Document:

Form of Securities Purchase Agreement dated July 13, 2005 by and among Xenomics,
      Inc. and the purchasers set forth on the signature page thereto.

     

     

    Exhibit
      10.1

     

    SECURITIES
      PURCHASE AGREEMENT

     

    This
      Securities Purchase Agreement (this “Agreement”)
      is
      dated as of July 13, 2005, by and among Xenomics, Inc., a Florida corporation
      (the “Company”),
      and
      the purchasers 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
      Section 4(2) of the Securities Act of 1933, as amended (the “Securities
      Act”)
      and
      Rule 506 promulgated thereunder, 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 agrees as
      follows:

     

     

    ARTICLE
      I

    DEFINITIONS

     

    1.1      
      Definitions.
      In
      addition to the terms defined elsewhere in this Agreement: (a) capitalized
      terms
      that are not otherwise defined herein have the meanings given to such terms
      in
      the Certificate of Designation (as defined herein), and (b) the following terms
      have the meanings indicated in this Section 1.1:

     

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

     

    “Actual
      Minimum”
      means,
      as of any date, the maximum aggregate number of shares of Common Stock then
      issued or potentially issuable in the future pursuant to the Transaction
      Documents, including any Underlying Shares issuable upon exercise or conversion
      in full of all Warrants and shares of Preferred Stock, ignoring any conversion
      or exercise limits set forth therein, and assuming that any previously
      unconverted shares of Preferred Stock are held until the second anniversary
      of
      the date of determination and all dividends are paid in shares of Common Stock
      until such second anniversary.

     

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

     

    “Articles
      of Amendment” means
      the
      Articles of Amendment Designating Series A Convertible Preferred Stock to be
      filed prior to the Closing by the Company with the Secretary of State of
      Florida, in the form of Exhibit
      A
      attached
      hereto.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

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

     

    “Closing
      Date”
      means
      the Trading Day when 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 have been satisfied or
      waived.

     

    “Commission”
      means
      the Securities and Exchange Commission.

     

    “Common
      Stock”
      means
      the common stock of the Company, par value $.0001 per share, and any securities
      into which such common stock shall hereinafter have been reclassified
      into.

     

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

     

    “Company
      Counsel”
      means
      Sichenzia Ross Friedman Ference LLP.

     

    “Conversion
      Price”
      shall
      have the meaning ascribed to such term in the Articles of
      Amendment.

     

    “Disclosure
      Schedules”
      shall
      have the meaning ascribed to such term in Section 3.1 hereof.

     

    “Effective
      Date”
      means
      the date that the initial Registration Statement filed by the Company pursuant
      to the Registration Rights Agreement is first declared effective by the
      Commission.

     

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

     

    “Exempt
      Issuance”
      means
      the issuance of (a) shares of Common Stock or options to employees, officers
      or
      directors of the Company pursuant to any stock or option plan duly adopted
      by a
      majority of the non-employee members of the Board of Directors of the Company
      or
      a majority of the members of a committee of non-employee directors established
      for such purpose, (b) securities upon the exercise of or conversion of any
      securities issued hereunder, convertible securities, options or warrants 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, and (c) securities issued pursuant to acquisitions or strategic
      transactions, provided any such issuance shall only be to a Person which is,
      itself or through its subsidiaries, an operating company in a business
      synergistic with the business of the Company and in which the

     

    
      
        
        

      

      
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    Company
      receives benefits in addition to the investment of funds, but shall not include
      a transaction in which the Company is issuing securities primarily for the
      purpose of raising capital or to an entity whose primary business is investing
      in securities.

     

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

     

    “Liens”
      means a
      lien, charge, security interest, encumbrance, right of first refusal, preemptive
      right or other restriction.

     

    “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).

     

    “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.

     

    “Preferred
      Stock”
      means
      the up to 277,100 shares of the Company’s Series A Convertible Preferred Stock
      issued hereunder having the rights, preferences and privileges set forth in
      the
      Certificate of Designation.

    

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

     

    “Registration
      Rights Agreement”
      means
      the Registration Rights Agreement, dated the date hereof, among the Company
      and
      the Purchasers, in the form of Exhibit
      B
      attached
      hereto.

     

    “Registration
      Statement”
      means a
      registration statement meeting the requirements set forth in the Registration
      Rights Agreement and covering the resale of the Underlying Shares by each
      Purchaser as provided for in the Registration Rights Agreement.

     

    “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.

     

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

     

    “Securities”
      means
      the Preferred Stock, the Warrants and the Underlying Shares.

     

    
      
        
        

      

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

     

     “Shareholder
      Approval”
      means
      such approval as may be required by the applicable rules and regulations of
      the
      Trading Market (or any successor entity) from the shareholders of the Company
      with respect to the transactions contemplated by the Transaction Documents,
      including the issuance of all of the Underlying Shares and shares of Common
      Stock issuable upon exercise of the Warrants in excess of 19.99% of the issued
      and outstanding Common Stock on the Closing Date.

    

    “Stated
      Value”
      means
      $10 per share of Preferred Stock.

     

    “Subscription
      Amount”
      shall
      mean, as to each Purchaser, the amount to be paid for the Preferred Stock
      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.

     

    “Subsequent
      Financing”
      shall have the meaning ascribed to such term in Section 4.13.

     

    “Subsidiary”
      means
      any subsidiary of the Company as set forth on Schedule
      3.1(a).

     

    “Trading
      Day”
      means a
      day on which the Common Stock is traded on a Trading Market.

     

    “Trading
      Market”
      means
      the following markets or exchanges on which the Common Stock is listed or quoted
      for trading on the date in question: the Over-The-Counter Bulletin Board, the
      Nasdaq SmallCap Market, the American Stock Exchange, the New York Stock Exchange
      or the Nasdaq National Market.

     

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

     

    “Underlying
      Shares”
      means
      the shares of Common Stock issuable upon conversion of the Preferred Stock,
      upon
      exercise of the Warrants and issued and issuable in lieu of the cash payment
      of
      dividends on the Preferred Stock.

     

    “VWAP”
      means,
      for any date, the price determined by the first of the following clauses that
      applies: (a) if the Common Stock is then listed or quoted on a Trading Market,
      the daily volume weighted average price of the Common Stock for such date (or
      the nearest preceding date) on the Trading Market on which the Common Stock
      is
      then listed or quoted as reported by Bloomberg Financial L.P. (based on a
      Trading Day from 9:30 a.m. Eastern Time to 4:02 p.m. Eastern Time); (b) if
      the
      Common Stock is not then listed or quoted on a Trading Market and if prices
      for
      the Common Stock are then quoted on the OTC Bulletin Board, the volume weighted
      average price of the Common Stock for such date (or the nearest preceding date)
      on the OTC Bulletin Board; (c) if the Common

     

    
      
        
        

      

      
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    Stock
      is
      not then listed or quoted on the OTC Bulletin Board and if prices for the Common
      Stock are then reported in the “Pink Sheets” published by the Pink Sheets, LLC
      (or a similar organization or agency succeeding to its functions of reporting
      prices), the most recent bid price per share of the Common Stock so reported;
      or
      (c) in all other cases, the fair market value of a share of Common Stock as
      determined by an independent appraiser selected in good faith by the Purchasers
      and reasonably acceptable to the Company.

    

    “Warrants”
      means
      collectively the Common Stock purchase warrants, in the form of Exhibit C
      delivered to the Purchasers at the Closing in accordance with Section 2.2(a)
      hereof, which Warrants shall be exercisable immediately and have a term of
      exercise equal to 5 years.

     

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

     

     

    ARTICLE
      II

    PURCHASE
      AND SALE

     

    2.1     
      Closing.
      On the
      Closing Date, upon the terms and subject to the conditions set forth herein,
      concurrent with the execution and delivery of this Agreement by the parties
      hereto, the Company agrees to sell, and each Purchaser agrees to purchase in
      the
      aggregate, severally and not jointly, up to $2,771,000 of shares of Preferred
      Stock with an aggregated Stated Value equal to such Purchaser’s Subscription
      Amount and Warrants as determined by pursuant to Section 2.2(a)(iii). The
      aggregate number of shares of Preferred Stock sold hereunder shall be up to
      277,100. Each
      Purchaser shall deliver to the Company via wire transfer or a certified check
      immediately available funds equal to their Subscription Amount and the Company
      shall deliver to each Purchaser their respective shares of Preferred Stock
      and
      Warrants as determined pursuant to Section 2.2(a) and the other items set forth
      in Section 2.2 issuable at the Closing. Upon satisfaction of the conditions
      set
      forth in Section 2.2, the Closing shall occur at the offices of Company Counsel,
      or such other location as the parties shall mutually agree.

     

    2.2      
      Deliveries.

     

    
      	 	
              a)

            	
              On
                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
                certificate evidencing a number of shares of Preferred Stock equal
                to such
                Purchaser’s Subscription Amount divided by the Stated Value, registered in
                the name of such Purchaser;

            

    

     

    
      	 	
              (iii)

            	
              a
                Warrant registered in the name of such Purchaser to purchase up to
                a
                number of shares of Common Stock equal to 30% of such Purchaser’s
                Subscription Amount divided by the Conversion Price
                

            

    

     

    
      
        
        

      

      
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        	 	 	immediately prior to the Closing Date, with an exercise price
                equal to
                $3.25,
                subject to adjustment therein;

      

      
        	 	 	 

      

      
        	 	
                (iv)

              	
                the
                  Registration Rights Agreement duly executed by the Company;
                  

              

      

    

     

    
      	 	
              (v)

            	
              a
                legal opinion of Company Counsel, in the form of Exhibit
                D
                attached hereto; and

            

    

     

    
      	 	
              (vi)

            	
              a
                certificate, dated the Closing Date, duly executed by an officer
                of the
                Company to the effect that the conditions specified in Sections 2.3(b)(i)
                and 2.3(b)(ii) have been satisfied.

            

    

     

    
      	 	
              b)

            	
              On
                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;

            

    

     

    
      	 	
              (ii)

            	
              such
                Purchaser’s Subscription Amount by wire transfer to the account as
                specified in writing by the Company;
                and

            

    

     

    
      	 	
              (iii)

            	
              the
                Registration Rights Agreement duly executed by such
                Purchaser.

            

    

     

    
      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;

            

    

     

    
      	 	
              (ii)

            	
              all
                obligations, covenants and agreements of the Purchasers required
                to be
                performed at or prior to the Closing Date shall have been performed;
                and

            

    

     

    
      	 	
              (iii)

            	
              the
                delivery by the Purchasers 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;

            

    

     

    
      	 	
              (ii)

            	
              all
                obligations, covenants and agreements of the Company required
                

            

    

     

    
      
        
        

      

      
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        	 	 	to be performed at or prior to the Closing Date shall have been
                performed; 

      

      
        	 	 	 

      

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

            

    

     

     

    ARTICLE
      III

    REPRESENTATIONS
      AND WARRANTIES

     

    3.1      
      Representations
      and Warranties of the Company.
      Except
      as set forth under the corresponding section of the disclosure schedules
      delivered to the Purchasers concurrently herewith (the “Disclosure
      Schedules”)
      which
      Disclosure Schedules shall be deemed a part hereof, the Company hereby makes
      the
      representations and warranties set forth below to each Purchaser.

     

    (a)     
      Subsidiaries.
      All of
      the direct and indirect subsidiaries of the Company are set forth on
Schedule
      3.1(a).
      Except
      as 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 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.
      Each of
      the Company and the Subsidiaries is an entity duly incorporated or otherwise
      organized, validly existing and in good standing under the laws of the
      jurisdiction of its incorporation or organization (as

     

    
      
        
        

      

      
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    applicable),
      with the requisite power and authority to own and use its properties and assets
      and to carry on its business as currently conducted. Neither the Company nor
      any
      Subsidiary is in violation or 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, could 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,
      prospects or financial condition 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.

     

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

     

    (d)     
      No
      Conflicts.
      The
      execution, delivery and performance of the Transaction Documents by the Company
      and the consummation by the Company of the other transactions contemplated
      thereby 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

     

    
      
        
        

      

      
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    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 could not have or reasonably
      be expected to result in a Material Adverse Effect.

     

    (e)     
      Filings,
      Consents and Approvals.
      The
      Company is not required to obtain any consent, waiver, authorization or order
      of, give any notice to, or make any filing or registration with, any court
      or
      other federal, state, local or other governmental authority or other Person
      in
      connection with the execution, delivery and performance by the Company of the
      Transaction Documents, other than (i) filings required pursuant to Section
      4.6,
      (ii) the filing with the Commission of the Registration Statement, (iii) the
      notice and/or application(s) to each applicable Trading Market for the issuance
      and sale of the Preferred Stock and Warrants and the listing of the Underlying
      Shares for trading thereon in the time and manner required thereby, (iv) the
      filing of Form D with the Commission and such filings as are required to be
      made
      under applicable state securities laws and (vi) the approvals set forth on
      Schedule
      3.1(e)
      (collectively, the “Required
      Approvals”).

     

    (f)     
      Issuance
      of the Securities.
      The
      Preferred Stock and the Underlying Shares 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 other than restrictions on transfer provided for
      in
      the Transaction Documents. The Company has reserved from its duly authorized
      capital stock a number of shares of Common Stock for issuance of the Underlying
      Shares at least equal to the Actual Minimum on the date hereof. The Company
      has
      not, and to the knowledge of the Company, no Affiliate of the Company has sold,
      offered for sale or solicited offers to buy or otherwise negotiated in respect
      of any security (as defined in Section 2 of the Securities Act) that would
      be
      integrated with the offer or sale of the Securities in a manner that would
      require the registration under the Securities Act of the sale of the Securities
      to the Purchasers, or that would be integrated with the offer or sale of the
      Securities for purposes of the rules and regulations of any Trading
      Market.

     

    (g)     
      Capitalization.
      The
      capitalization of the Company is as described in the Company’s most recent
      report filed with the Commission. Except as set forth on Schedule 3.1(g), the
      Company has not issued any capital stock since such filing other than pursuant
      to the employee stock option plan. 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 which shall not
      have
      been waived prior to Closing. Except as disclosed in the Company’s reports filed
      with the Commission, issued pursuant to the Company’s stock incentive plan or as
      a result of the purchase and sale of the Securities, there are no outstanding
      options, warrants, script rights to subscribe to, calls or commitments of any
      character whatsoever relating to, or securities, rights or obligations
      convertible into or exchangeable for, or giving any Person any right to
      subscribe for or acquire, any shares of Common Stock, or contracts,

     

    
      
        
        

      

      
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    commitments,
      understandings
      or arrangements by which the Company or any Subsidiary is or may become bound
      to
      issue additional shares of Common Stock, or securities or rights convertible
      or
      exchangeable into shares of Common Stock. The issuance and sale of the
      Securities will not obligate the Company to issue shares of Common Stock or
      other securities to any Person (other than the Purchasers) and will not result
      in a right of any holder of Company securities to adjust the exercise,
      conversion, exchange or reset price under such securities. 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 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, except as set forth on Schedule
      3.1(g).
      No
      further approval or authorization of any stockholder, the Board of Directors
      of
      the Company or others is required for the issuance and sale of the shares of
      Preferred Stock. 

     

    (h)     
      SEC
      Reports; Financial Statements.
      The
      Company has filed all reports required to be filed by it under the Securities
      Act and the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof,
      for the two years preceding the date hereof (or such shorter period as the
      Company was required by law to file such material) (the foregoing materials,
      including the exhibits thereto, being collectively referred to herein as the
      “SEC
      Reports”)
      on a
      timely basis or has received a valid extension of such time of filing and has
      filed any such SEC Reports prior to the expiration of any such extension. As
      of
      their respective dates, the SEC Reports complied in all material respects with
      the requirements of the Securities Act and the Exchange Act and the rules and
      regulations of the Commission promulgated thereunder, and none of the SEC
      Reports, when filed, contained any untrue statement of a material fact or
      omitted to state a material fact required to be stated therein or necessary
      in
      order to make the statements therein, in light of the circumstances under which
      they were made, not misleading. The financial statements of the Company included
      in the SEC Reports comply in all material respects with applicable accounting
      requirements and the rules and regulations of the Commission with respect
      thereto as in effect at the time of filing. Such financial statements have
      been
      prepared in accordance with 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. 

     

    (i)     
      Material
      Changes.
      Since
      the date of the latest audited financial statements included within the SEC
      Reports, except as specifically disclosed in the SEC Reports, (i) there has
      been
      no event, occurrence or development that has had or that could reasonably be
      expected to result in a Material Adverse Effect, (ii) the Company has not
      incurred any liabilities (contingent or otherwise) other than (A) trade payables
      and accrued expenses incurred in the ordinary course of business consistent
      with
      past practice and (B) liabilities not required to be reflected in the Company's
      financial statements pursuant to GAAP or

     

    
      
        
        

      

      
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    required
      to be disclosed in filings made with the Commission, (iii) the Company has
      not
      altered its method of accounting, (iv) the Company has not declared or made
      any
      dividend or distribution of cash or other property to its stockholders or
      purchased, redeemed or made any agreements to purchase or redeem any shares
      of
      its capital stock and (v) the Company has not issued any equity securities
      to
      any officer, director or Affiliate, except pursuant to existing Company stock
      option plan or restricted stock plan. The Company does not have pending before
      the Commission any request for confidential treatment of
      information.

     

    (j)     
      Litigation.
      Except
      as set forth in SEC Reports, there is no action, suit, inquiry, notice of
      violation, proceeding or investigation pending or, to the knowledge of the
      Company, threatened against or affecting the Company, 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. Neither the Company nor any Subsidiary, nor any director or
      officer thereof, is or has been the subject of any Action involving a claim
      of
      violation of or liability under federal or state securities laws or a claim
      of
      breach of fiduciary duty. There has not been, and to the knowledge of the
      Company, there is not pending or contemplated, any investigation by the
      Commission involving the Company or any current or former director or officer
      of
      the Company. The Commission has not issued any stop order or other order
      suspending the effectiveness of any registration statement filed by the Company
      or 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.

     

    (l)     
      Compliance.
      Except
      as set forth in the SEC Reports or on Schedule 3.1(l), 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 order of any court, arbitrator or
      governmental body, or (iii) is or has been in violation of any statute, rule
      or
      regulation of any governmental authority, including without limitation all
      foreign, federal, state and local laws applicable to its business except in
      each
      case as could not have a Material Adverse Effect. 

     

    (m)     
      Regulatory
      Permits.
      The
      Company and the 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 

     

    
      
        
        

      

      
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    described
      in the SEC Reports, except where the failure to possess such permits could
      not
      have or 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.

     

    (n)     
      Title
      to Assets.
      Except
      as set forth on Schedule
      3.1(n),
      the
      Company and the Subsidiaries have good and marketable title in fee simple to
      all
      real property owned by them that is material to the business of the Company
      and
      the Subsidiaries 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 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 of which the Company
      and the Subsidiaries are in compliance.

     

    (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,
      copyrights, licenses and other similar rights that are necessary or material
      for
      use in connection with their respective businesses as described in the SEC
      Reports and which the failure to so have could have a Material Adverse Effect
      (collectively, the “Intellectual
      Property Rights”).
      Neither the Company nor any Subsidiary has received a written notice that the
      Intellectual Property Rights used by the Company or any Subsidiary violates
      or
      infringes upon the rights of any Person. To the knowledge of the Company, all
      such Intellectual Property Rights are enforceable and there is no existing
      infringement by another Person of any of the Intellectual Property Rights of
      others.

     

    (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. To the best of Company’s knowledge, such insurance contracts and
      policies are accurate and complete. 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 without a
      significant increase in cost.

     

    (q)     
      Transactions
      With Affiliates and Employees.
      Except
      as set forth in the SEC Reports, none of the officers or directors of the
      Company and, to the knowledge of the Company, none of the employees of the
      Company is presently a party to any transaction with the Company or 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

     

    
      
        
        

      

      
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    employee
      or, to the knowledge of the Company, any entity in which any officer, director,
      or any such employee has a substantial interest or is an officer, director,
      trustee or partner, in each case in excess of $60,000 other than (i) for payment
      of salary or consulting fees for services rendered, (ii) reimbursement for
      expenses incurred on behalf of the Company and (iii) for other employee
      benefits, including stock option agreements under any stock option plan of
      the
      Company and restricted stock agreements under any restricted stock plan of
      the
      Company.

     

    (r)     
      Sarbanes-Oxley;
      Internal Accounting Controls.
      Except
      as set forth in the SEC Reports, the Company is in material compliance with
      all
      provisions of the Sarbanes-Oxley Act of 2002 which are applicable to it 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. 

     

    (s)     
      Certain
      Fees.
      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 this Agreement, except as set forth on Schedule
      3.1(s).
      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 in connection with the transactions contemplated
      by this Agreement.

     

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

     

    (u)     
      Investment
      Company.
      The
      Company is not, and is not an Affiliate of, and immediately after receipt of
      payment for the shares of Preferred Stock, 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 subject to the Investment Company Act.

     

    (v)     
      Listing
      and Maintenance Requirements.
      The
      Company’s Common Stock is registered pursuant to Section 15(d) of the Exchange
      Act, and the Company has taken no action designed to, or which to its knowledge
      is likely to have the effect of, terminating the registration of the Common
      Stock 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,

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

    received
      notice from any Trading Market on which the Common Stock is or has been listed
      or quoted to the effect that the Company is not in compliance with the listing
      or maintenance requirements of such Trading Market. The Company is, and has
      no
      reason to believe that it will not in the foreseeable future continue to be,
      in
      compliance with all such listing and maintenance requirements.

     

    (w)     
      Disclosure.
      The
      Company understands and confirms that the Purchasers will rely on the foregoing
      representations and covenants in effecting transactions in securities of the
      Company. All disclosure provided to the Purchasers regarding the Company, its
      business and the transactions contemplated hereby, including the Disclosure
      Schedules to this Agreement, furnished by or on behalf of the Company with
      respect to the representations and warranties made herein are true and correct
      with respect to such representations and warranties and do not contain any
      untrue statement of a material fact or omit to state any material fact necessary
      in order to make the statements made therein, in light of the circumstances
      under which they were made, not misleading. 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.

     

    (x)     
      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 the Securities Act or any
      applicable shareholder approval provisions, including, without limitation,
      under
      the rules and regulations of any exchange or automated quotation system on
      which
      any of the securities of the Company are listed or designated. 

     

    (y)     
      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 federal, state and foreign income and
      franchise tax returns and has paid or accrued all taxes shown as due thereon,
      and the Company has no knowledge of a tax deficiency which has been asserted
      or
      threatened against the Company or any Subsidiary.

     

    (z)     
      No
      General Solicitation.
      Neither
      the Company nor any person acting on behalf of the Company has offered or sold
      any of the Securities by any form of general solicitation or general
      advertising. The Company has offered the Securities for sale only to the
      Purchasers and certain other “accredited investors” within the meaning of Rule
      501 under the Securities Act.

     

    (aa)    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
      corporate funds for unlawful contributions, gifts, entertainment or other
      unlawful expenses related to foreign or domestic political activity, (ii) made
      any

     

    
      
        
        

      

      
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    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

     

    (bb)    Accountants.
      The
      Company’s accountants are set forth on Schedule
      3.1(cc)
      of the
      Disclosure Schedule. To the Company’s knowledge, such accountants are a
      registered public accounting firm as required by the Securities
      Act.

     

    (cc)    No
      Disagreements with Accountants and Lawyers.
      There
      are no disagreements of any kind presently existing, or reasonably anticipated
      by the Company to arise, between the accountants and lawyers formerly or
      presently employed by the Company and the Company is current with respect to
      any
      fees owed to its accountants and lawyers.

     

    (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 hereby. 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 this Agreement and
      the
      transactions contemplated hereby and any advice given by any Purchaser or any
      of
      their respective representatives or agents in connection with this Agreement
      and
      the transactions contemplated hereby 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 has been based solely
      on the independent evaluation of the transactions contemplated hereby by the
      Company and its representatives. The Company further understands and
      acknowledges that (a) 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 Underlying Shares
      deliverable with respect to Securities are being determined and that such
      hedging activities will be done in accordance with all applicable laws, rules
      and regulations and (b) 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.

     

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

     

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

     

    
      
        
        

      

      
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    Purchaser
      of the transactions contemplated by this Agreement have been duly authorized
      by
      all necessary corporate or similar action 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, 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)     
      Purchaser
      Representation.
      Such
      Purchaser understands that the Securities are “restricted securities” and have
      not been registered under the Securities Act or any applicable state securities
      law and is acquiring the Securities as principal for its own account and not
      with a view to or for distributing or reselling such Securities or any part
      thereof, has no present intention of distributing any of such Securities and
      has
      no arrangement or understanding with any other persons regarding the
      distribution of such Securities (this representation and warranty not limiting
      such Purchaser’s right to sell the Securities pursuant to the Registration
      Statement or otherwise in compliance with applicable federal and state
      securities laws). Such Purchaser is acquiring the Securities hereunder in the
      ordinary course of its business. Such Purchaser does not have any agreement
      or
      understanding, directly or indirectly, with any Person to distribute any of
      the
      Securities.

     

    (c)     
      Purchaser
      Status.
      At the
      time such Purchaser was offered the Securities, it was, and at the date hereof
      it is, and on each date on which it exercises any Warrants, it will be either:
      (i) an “accredited investor” as defined in Rule 501(a)(1), (a)(2), (a)(3),
      (a)(7) or (a)(8) under the Securities Act or (ii) a “qualified institutional
      buyer” as defined in Rule 144A(a) under the Securities Act. Such Purchaser is
      not required to be registered as a broker-dealer under Section 15 of the
      Exchange Act.

     

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

     

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

     

    (f)     
      Certain
      Trading Activities.
       Such Purchaser has not, directly or indirectly,

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

     

    nor
      has
      any Person acting on behalf of or pursuant to any understanding with such
      Purchaser, engaged in (i) any Short Sales (defined below) involving the
      Company's securities during the 30 Trading Days immediately preceding the date
      hereof or (ii) any transactions in any securities of the Company following
      the
      date on which such Purchaser was aware of this Transaction (other than this
      Transaction); provided, however, that the restrictions contained in this Section
      3.2(f) shall not apply after the date that the Company publicly discloses the
      consummation of the transactions contemplated hereby.  For purposes
      of this
      Section, "Short Sales" include, without limitation, all types of direct and
      indirect stock pledges, forward sale contracts, options, puts, calls, short
      sales, swaps and similar arrangements
      (including on a total return basis), and sales and other transactions
      through non-US broker dealers or foreign regulated brokers having the effect
      of
      hedging the securities or investment made under this Agreement. 

     

    (g)     
      Material
      Non-Public Information.
      Such
      Purchaser understands that any material non-public information provided to
      such
      Purchaser pursuant to a confidentiality agreement is preliminary and subject
      to
      change at any time prior to any public announcement, if any. Such Purchaser
      acknowledges that there can be no assurance that the Company will consummate
      or
      execute any transaction or agreement disclosed to such Purchaser and considered
      by the Company to be material non-public information. Such Purchaser hereby
      represents that it is not entering into this Agreement solely on the basis
      of
      any material non-public information provided to such Purchaser. 

     

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

     

     

    ARTICLE
      IV

    OTHER
      AGREEMENTS OF THE PARTIES

     

    4.1       Transfer
      Restrictions.

     

    (a)     
      The
      Securities may only be disposed of in compliance with state and federal
      securities laws. In connection with any transfer of Securities other than
      pursuant to an effective registration statement or Rule 144, to the Company
      or
      to an affiliate of a Purchaser or in connection with a pledge as contemplated
      in
      Section 4.1(b), the Company may require the transferor thereof to provide to
      the
      Company an opinion of counsel selected by the transferor and reasonably
      acceptable to the Company, the form and substance of which opinion shall be
      reasonably satisfactory to the Company, to the effect that such transfer does
      not require registration of such transferred Securities under the Securities
      Act. As a condition of transfer, any such transferee shall agree in writing
      to
      be bound by the terms of this Agreement and shall have the rights of a Purchaser
      under this Agreement and the Registration Rights Agreement.

     

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

     

    
      
        
        

      

      
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    [NEITHER]
      THESE SECURITIES [NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE
      [EXERCISABLE] [CONVERTIBLE]] HAVE [NOT] BEEN REGISTERED WITH THE SECURITIES
      AND
      EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON
      AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED
      (THE
“SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT
      TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT
      TO
      AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
      REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH
      APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL
      TO
      THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY
      ACCEPTABLE TO THE COMPANY. THESE SECURITIES AND THE SECURITIES ISSUABLE UPON
      EXERCISE OF THESE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE
      MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.

     

    The
      Company acknowledges and agrees that a Purchaser may from time to time pledge
      pursuant to a bona fide margin agreement with a registered broker-dealer or
      grant a security interest in some or all of the Securities to a financial
      institution that is an “accredited investor” as defined in Rule 501(a) under the
      Securities Act and who agrees to be bound by the provisions of this Agreement
      and the Registration Rights Agreement and, if required under the terms of such
      arrangement, such Purchaser may transfer pledged or secured Securities to the
      pledgees or secured parties. Such a pledge or transfer would not be subject
      to
      approval of the Company and no legal opinion of legal counsel of the pledgee,
      secured party or pledgor shall be required in connection therewith. Further,
      no
      notice shall be required of such pledge. At the appropriate Purchaser’s expense,
      the Company will execute and deliver such reasonable documentation as a pledgee
      or secured party of Securities may reasonably request in connection with a
      pledge or transfer of the Securities, including, if the Securities are subject
      to registration pursuant to the Registration Rights Agreement, the preparation
      and filing of any required prospectus supplement under Rule 424(b)(3) under
      the
      Securities Act or other applicable provision of the Securities Act to
      appropriately amend the list of Selling Stockholders thereunder.

     

    (c)     
      Certificates
      evidencing the Underlying Shares shall not contain any legend (including the
      legend set forth in Section 4.1(b) hereof): (i) while a registration statement
      (including the Registration Statement) covering the resale of such security
      is
      effective under the Securities Act, or (ii) following any sale of such
      Underlying Shares pursuant to Rule 144, or (iii) if such Underlying Shares
      are
      eligible for sale under Rule 144(k), or (iv) if such legend is not required
      under applicable requirements of the Securities Act (including judicial
      interpretations and pronouncements issued by the staff of the Commission).
      The
      Company shall cause its counsel to issue a legal opinion to the Company’s
      transfer agent promptly after the Effective Date if required by the Company’s
      transfer agent to effect the removal of the legend hereunder. If all or any
      shares of

     

    
      
        
        

      

      
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    Preferred
      Stock or any portion of a Warrant is converted or exercised (as applicable)
      at a
      time when there is an effective registration statement to cover the resale
      of
      the Underlying Shares, or if such Underlying Shares may be sold under Rule
      144(k) or if such legend is not otherwise required under applicable requirements
      of the Securities Act (including judicial interpretations thereof) then such
      Underlying Shares shall be issued free of all legends. The Company agrees that
      following the Effective Date or at such time as such legend is no longer
      required under this Section 4.1(c), it will, no later than five Trading Days
      following the delivery by a Purchaser to the Company or the Company's transfer
      agent of a certificate representing Underlying Shares, as applicable, issued
      with a restrictive legend (such third Trading Day, the “Legend
      Removal Date”),
      deliver or cause to be delivered to such Purchaser a certificate representing
      such shares that is free from all restrictive and other legends. The Company
      may
      not make any notation on its records or give instructions to any transfer agent
      of the Company that enlarge the restrictions on transfer set forth in this
      Section.

    

    (d)     
      Each
      Purchaser, severally and not jointly with the other Purchasers, agrees that
      the
      removal of the restrictive legend from certificates representing Securities
      as
      set forth in this Section 4.1 is predicated upon the Company’s reliance that the
      Purchaser will sell any Securities pursuant to either the registration
      requirements of the Securities Act, including any applicable prospectus delivery
      requirements, or an exemption therefrom.

    

    4.2      
      Acknowledgment
      of Dilution.
      The
      Company acknowledges that the issuance of the Securities may result in dilution
      of the outstanding shares of Common Stock, which dilution may be substantial
      under certain market conditions. The Company further acknowledges that its
      obligations under the Transaction Documents, including without limitation its
      obligation to issue the Underlying Shares pursuant to the Transaction Documents,
      are unconditional and absolute and not subject to any right of set off,
      counterclaim, delay or reduction, regardless of the effect of any such dilution
      or any claim the Company may have against any Purchaser and regardless of the
      dilutive effect that such issuance may have on the ownership of the other
      stockholders of the Company.

     

    4.3      
      Furnishing
      of Information.
      As long
      as any Purchaser owns Securities, the Company covenants to timely file (or
      obtain extensions in respect thereof and file within the applicable grace
      period) all reports required to be filed by the Company after the date hereof
      pursuant to the Exchange Act. As long as any Purchaser owns Securities, if
      the
      Company is not required to file reports pursuant to the Exchange Act, it will
      prepare and furnish to the Purchasers and make publicly available in accordance
      with Rule 144(c) such information as is required for the Purchasers to sell
      the
      Securities under Rule 144. The Company further covenants that it will take
      such
      further action as any holder of Securities may reasonably request, all to the
      extent required from time to time to enable such Person to sell such Securities
      without registration under the Securities Act within the limitation of the
      exemptions provided by Rule 144.

     

    4.4      
      Integration.
      The
      Company shall not sell, offer for sale or solicit offers to buy or otherwise
      negotiate in respect of any security (as defined in Section 2 of the Securities
      Act) that would be integrated with the offer or sale of the Securities in a
      manner that would require the

     

    
      
        
        

      

      
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    registration
      under the Securities Act of the sale of the Securities to the Purchasers or
      that
      would be integrated with the offer or sale of the Securities for purposes of
      the
      rules and regulations of any Trading Market.

     

    4.5      
      Conversion
      and Exercise Procedures.
      The
      form of Notice of Exercise included in the Warrants and the Notice of Conversion
      included in the Articles of Amendment set forth the totality of the procedures
      required of the Purchasers in order to exercise the Warrants or convert the
      Preferred Stock. No additional legal opinion or other information or
      instructions shall be required of the Purchasers to exercise their Warrants
      or
      convert their Preferred Stock. The Company shall honor exercises of the Warrants
      and conversions of the Preferred Stock and shall deliver Underlying Shares
      in
      accordance with the terms, conditions and time periods set forth in the
      Transaction Documents.

     

    4.6      
      Securities
      Laws Disclosure; Publicity.
      The
      Company agrees that no later than one Trading Day after the Closing Date it
      shall issue a press release announcing the Closing. Within four Trading Days
      after the Closing Date, the Company shall issue a Current Report on Form 8-K
      disclosing the material terms of the transactions contemplated hereby, and
      shall
      attach the Transaction Documents thereto. 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 or otherwise make any such public statement
      without the prior consent of the Company, with respect to any press release
      of
      any Purchaser, or without the prior consent of each Purchaser, with respect
      to
      any press release of the Company, which consent shall not unreasonably be
      withheld, except if such disclosure is required by law, in which case the
      disclosing party shall promptly provide the other party with prior notice of
      such public statement or communication. 

     

    4.7      
      Non-Public
      Information.
      The
      Company covenants and agrees that neither it nor any other Person acting on
      its
      behalf will provide any Purchaser or its agents or counsel with any information
      that the Company believes constitutes material non-public information, unless
      prior thereto such Purchaser shall have executed a written agreement regarding
      the confidentiality and use of such information. The Company understands and
      confirms that each Purchaser shall be relying on the foregoing representations
      in effecting transactions in securities of the Company.

     

    4.8      
      Use
      of
      Proceeds.
      Except
      as set forth on Schedule
      4.8
      attached
      hereto, the Company shall use the net proceeds from the sale of the Securities
      hereunder for working capital purposes.

     

    4.9      
      Indemnification
      of Purchasers.
      Subject
      to the provisions of this Section 4.9, the Company will indemnify and hold
      the
      Purchasers and their directors, officers, shareholders, partners, employees
      and
      agents (each, a “Purchaser
      Party”)
      harmless from any and all losses, liabilities, obligations, claims,
      contingencies, damages, costs and expenses (collectively, “Losses”), including
      all judgments, amounts paid in settlements, court costs and reasonable
      attorneys’ fees and costs of investigation that any such Purchaser Party may
      suffer or incur as a result of or relating to (a) any breach of any of the
      representations, warranties, covenants or agreements made by the Company in
      this
      Agreement or in the other Transaction Documents or (b) any action instituted
      against a Purchaser, or any of them or their respective Affiliates, by
      any

     

    
      
        
        

      

      
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    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 representation, warranties or
      covenants under the Transaction Documents or any agreements or understandings
      such Purchaser may have with any such stockholder or any violations by the
      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. 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 the Purchaser Party
      reasonable concludes that, either (x) one or more defenses are available to
      the
      Purchaser Party that are not available to the Company or (y) a conflict or
      potential conflict exists between the Company, on the one hand, and such
      Purchaser Party, on the other hand, that would make such separate representation
      advisable. The Company will not be liable to any Purchaser Party under this
      Agreement (i) for any settlement by a Purchaser Party effected without the
      Company’s prior written consent, which shall not be unreasonably withheld or
      delayed; or (ii) 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 the Purchasers
      in this Agreement or in the other Transaction Documents.

     

    4.10      
      Contribution.
      If the
      indemnification provided for in this Article IV from the Company is unavailable
      to a Purchaser Party hereunder in respect of any Losses referred to herein,
      then
      the Company, in lieu of indemnifying such Purchaser Party, shall contribute
      to
      the amount paid or payable by such Purchaser Party as a result of such Losses
      in
      such proportion as is appropriate to reflect the relative fault of the Company
      and Purchaser Party in connection with the actions which resulted in such
      Losses, as well as any other relevant equitable considerations. The relative
      faults of the Company and such Purchaser Party shall be determined by reference
      to, among other things, whether any action in question, including any untrue
      or
      alleged untrue statement of a material fact or omission or alleged omission
      to
      state a material fact, has been made by, or relates to information supplied
      by,
      the Company or such Purchaser Party, and the parties relative intent, knowledge,
      access to information and opportunity to correct or prevent such action. The
      amount paid or payable by a party as a result of the Losses referred to above
      shall be deemed to include any legal or other fees, charges or expenses
      reasonably incurred by such party in connection with any investigation or
      proceeding.

     

    4.11      
      Reservation
      and Listing of Securities.
      The
      Company shall maintain a reserve from its duly authorized shares of Common
      Stock
      for issuance pursuant to the Transaction Documents in such amount as may be
      required to fulfill its obligations in full under the Transaction Documents.
      

     

    
      
        
        

      

      
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    4.12      
      Equal
      Treatment of Purchasers.
      No
      consideration 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 to treat for the Company 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.

     

    4.13      
      Future
      Financing.
      

     

    (a)     
      For 180 days after the Closing, upon any financing by the Company or any of
      its
      Subsidiaries of Common Stock or Common Stock Equivalents (a “Subsequent
      Financing”), all Purchasers in the aggregate shall have the right to participate
      in the Subsequent Financing for an amount up to the lesser of the aggregated
      Stated Value of all outstanding Preferred Stock and the full amount of the
      Subsequent Financing (the “Participation Maximum”). At least 5 Trading Days
      prior to the closing of the Subsequent Financing, the Company shall deliver
      to
      each Purchaser a written notice of its intention to effect a Subsequent
      Financing (“Pre-Notice”), which Pre-Notice shall ask such Purchaser if it wants
      to review the details of such financing (such additional notice, a “Subsequent
      Financing Notice”). Upon the request of a Purchaser, and only upon a request by
      such Purchaser, for a Subsequent Financing Notice, the Company shall promptly,
      but no later than 1 Trading Day after such request, deliver a Subsequent
      Financing Notice to such Purchaser. The Subsequent Financing Notice shall
      describe in reasonable detail the proposed terms of such Subsequent Financing,
      the amount of proceeds intended to be raised thereunder, the Person with whom
      such Subsequent Financing is proposed to be effected, and attached to which
      shall be a term sheet or similar document relating thereto. If by 5:30 p.m.
      (New
      York City time) on the 5th Trading Day after all of the Purchasers
      have received the Pre-Notice, notifications by the Purchasers of their
      willingness to participate in the Subsequent Financing (or to cause their
      designees to participate) is, in the aggregate, less than the total amount
      of
      the Subsequent Financing, then the Company may effect the remaining portion
      of
      such Subsequent Financing on the terms and to the Persons set forth in the
      Subsequent Financing Notice. If the Company receives no notice from a Purchaser
      as of such 5th Trading Day, such Purchaser shall be deemed to have
      notified the Company that it does not elect to participate. The Company must
      provide the Purchasers with a second Subsequent Financing Notice, and the
      Purchasers will again have the right of participation set forth above in this
      Section 4.13, if the Subsequent Financing subject to the initial Subsequent
      Financing Notice is not consummated for any reason on the terms set forth in
      such Subsequent Financing Notice within 45 Trading Days after the date of the
      initial Subsequent Financing Notice. In the event the Company receives responses
      to Subsequent Financing Notices from Purchasers seeking to purchase more than
      the aggregate amount of the Subsequent Financing, each such Purchaser shall
      have
      the right to purchase their Pro Rata Portion (as defined below) of the
      Participation Maximum. “Pro Rata Portion” is the ratio of (x) the Subscription
      Amount of Securities purchased by a participating Purchaser and (y) the sum
      of
      the aggregate Subscription Amount of all

     

    
      
        
        

      

      
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    participating
      Purchasers. Notwithstanding the foregoing, this Section 4.13 shall not apply
      in
      respect of an Exempt Issuance or any public offering of securities of the
      Company which result in gross proceeds to the Company of $5,000,0000 or
      more.

     

    (b)     
      Neither
      the Company nor any of its Subsidiaries will offer any Subsequent Financings
      prior to the Effectiveness Date (as defined in the Registration Rights
      Agreement) of the Registration Statement and neither the Company nor any of
      its
      Subsidiaries will file a registration statement seeking to register additional
      shares of common stock for resale (other than on Form S-4 or Form S-8 or their
      then equivalents relating to equity securities to be issued solely in connection
      with any acquisition of any entity or business or equity securities issuable
      in
      connection with stock option or other bona fide
      employee
      benefit plans), until
      180 days after the Effectiveness Date.

     

    (c)     
      A Purchaser shall not have the right to participate in a Subsequent Financing,
      pursuant to Section 4.13 or otherwise, to the extent that after giving effect
      to
      such participation, the Purchaser (together with the Purchaser’s affiliates),
      would beneficially own in excess of 9.99% of the number of shares of the Common
      Stock outstanding immediately after giving effect to such
      participation. Except as set forth in the preceding sentence, for purposes
      of this Section 4.13(c), beneficial ownership shall be calculated in accordance
      with Section 13(d) of the Exchange Act, it being acknowledged by Purchaser
      that
      the Company is not representing to Purchaser that such calculation is in
      compliance with Section 13(d) of the Exchange Act and Purchaser is solely
      responsible for any schedules required to be filed in accordance therewith.
      To
      the extent that the limitation contained in this Section 4.13 (c) applies,
      the
      determination of whether Purchaser can participate in a Subsequent Financing
      (in
      relation to other securities owned by the Purchaser) shall be in the sole
      discretion of such Purchaser, and the submission of a notification by a
      Purchaser of their willingness to participate in a Subsequent Financing shall
      be
      deemed to be such Purchaser’s determination of whether such Purchaser can
      participate in a Subsequent Financing pursuant to this Section 4.13 (in relation
      to other securities owned by such Purchaser), in each case subject to such
      aggregate percentage limitation, and the Company shall have no obligation to
      verify or confirm the accuracy of such determination. For purposes of this
      Section 4.13(c), in determining the number of outstanding shares of Common
      Stock, the Purchaser may rely on the number of outstanding shares of Common
      Stock as reflected in (x) the Company’s most recent Form 10-QSB or Form 10-KSB,
      as the case may be, (y) a more recent public announcement by the Company or
      (z)
      any other notice by the Company or the Company’s Transfer Agent setting forth
      the number of shares of Common Stock outstanding. Upon the written or
      oral
      request of the Purchaser, the Company shall within two Trading Days confirm
      orally and in writing to the Purchaser the number of shares of Common Stock
      then
      outstanding.  In any case, the number of outstanding shares of Common
      Stock
      shall be determined after giving effect to the conversion or exercise of
      securities of the Company by the Purchaser or its affiliates since the date
      as
      of which such number of outstanding shares of Common Stock was reported. The
      provisions of this Section 4.13(c) may be waived by the Purchaser upon, at
      the
      election of the Purchaser, not less than 61 days’ prior notice to the Company,
      and the provisions of this Section 4.13 (c) shall continue to apply until such
      61st day (or such later date, as determined by the Purchaser, as may
      be specified in such notice of waiver).

     

    
      
        
        

      

      
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    ARTICLE
      V

     

    MISCELLANEOUS

     

    5.1     
      Termination.
      This
      Agreement may be terminated by any Purchaser, by written notice to the other
      parties, if the Closing has not been consummated on or before June 30, 2005;
      provided 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 issuance of any Securities.

     

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

     

    5.4     
      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 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 or amended except in a written
      instrument signed, in the case of an amendment, by the Company and each
      Purchaser or, in the case of a waiver, by the party against whom enforcement
      of
      any such waiver is sought. No waiver of any default with respect to any
      provision, condition or requirement of this Agreement shall be deemed to be
      a
      continuing waiver in the future or a waiver of any subsequent default or a
      waiver of any other provision, condition or requirement hereof, nor shall any
      delay or omission of either party to exercise any right hereunder in any manner
      impair the exercise of any such right.

     

    
      
        
        

      

      
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    5.6     
      Construction.
      The
      headings herein are for convenience only, do not constitute a part of this
      Agreement and shall not be deemed to limit or affect any of the provisions
      hereof. The language used in this Agreement will be deemed to be the language
      chosen by the parties to express their mutual intent, and no rules of strict
      construction will be applied against any party.

     

    5.7     
      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. Any Purchaser may assign any or all of its rights
      under this Agreement and the Registration Rights Agreement to any Person to
      whom
      such Purchaser assigns or transfers any Securities, provided such transferee
      agrees in writing to be bound, with respect to the transferred Securities,
      by
      the provisions hereof that apply to the “Purchasers”.

     

    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 4.9.

     

    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 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 manner
      permitted by law. The parties hereby waive all rights to a trial by jury. If
      either party shall commence an action or proceeding to enforce any provisions
      of
      the Transaction Documents, then the prevailing party in such action or
      proceeding shall be reimbursed by the other party for its attorneys’ fees and
      other costs and expenses incurred with the investigation, preparation and
      prosecution of such action or proceeding.

     

    
      
        
        

      

      
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    5.10     
      Survival.
      The
      representations and warranties contained herein shall survive the Closing and
      the delivery, exercise and/or conversion of the Securities, as applicable for
      the applicable statue of limitations.

     

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

     

    5.12     
      Severability.
      If any
      provision of this Agreement is held to be invalid or unenforceable in any
      respect, the validity and enforceability of the remaining terms and provisions
      of this Agreement shall not in any way be affected or impaired thereby and
      the
      parties will attempt to agree upon a valid and enforceable provision that is
      a
      reasonable substitute therefor, and upon so agreeing, shall incorporate such
      substitute provision in this Agreement.

     

    5.13     
      Replacement
      of Securities.
      If any
      certificate or instrument evidencing any Securities is mutilated, lost, stolen
      or destroyed, the Company shall issue or cause to be issued in exchange and
      substitution for and upon cancellation thereof, or in lieu of and substitution
      therefor, a new certificate or instrument, but only upon receipt of evidence
      reasonably satisfactory to the Company of such loss, theft or destruction and
      customary and reasonable indemnity, if requested. The applicants for a new
      certificate or instrument under such circumstances shall also pay any reasonable
      third-party costs associated with the issuance of such replacement
      Securities.

     

    5.14     
      Remedies.
      In
      addition to being entitled to exercise all rights provided herein or granted
      by
      law, including recovery of damages, each of the Purchasers and the Company
      will
      be entitled to specific performance under the Transaction Documents. The parties
      agree that monetary damages may not be adequate compensation for any loss
      incurred by reason of any breach of obligations described in the foregoing
      sentence and hereby agrees to waive in any action for specific performance
      of
      any such obligation the defense that a remedy at law would be
      adequate.

     

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

     

    
      
        
        

      

      
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    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. 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 the
      Purchasers.

     

     

    [SIGNATURE
      PAGE FOLLOWS]

    
      
        
        

      

      
        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.

     

    
      	
              XENOMICS,
                INC.

            	 	 	
              Address
                for Notice:

            
	 	 	 	 	
               

            
	By:	 	 	 	Xenomics,
              Inc.
	 	
              

            	 	 	
              420
                Lexington Avenue, Suite 1701

              New
                York, NY 10170

            
	
            	
              Name:
                V. Randy White, Ph.D.

              Title:
                Chief Executive Officer

            	 	 	 

    

     

     

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

    
      Jeffrey
        J. Fessler, Esq.

      Sichenzia
        Ross Friedman Ference LLP

      1065
        Avenue of the Americas

      New
        York,
        New York 10018

    

    

    

    [REMAINDER
      OF PAGE INTENTIONALLY LEFT BLANK

    SIGNATURE
      PAGE FOR PURCHASER FOLLOWS]

     

    
      
        
        

      

      
        28

        
          

        

      

      
        
        

      

    

    [PURCHASER
      SIGNATURE PAGES TO 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
      Investing Entity: __________________________

    Signature
      of Authorized Signatory of Investing Entity:
      __________________________

    Name
      of
      Authorized Signatory: _________________________

    Title
      of
      Authorized Signatory: __________________________

    Email
      Address of Authorized Signatory:________________________________

    Tax
      ID
      number of Investing Entity:__________________________________

    

    Address
      for Notice of Investing Entity:

    

    

    

    

    Address
      for Delivery of Securities for Investing Entity (if not same as
      above):

    

    

    

    

    

    Subscription
      Amount:

    Shares
      of
      Preferred Stock:

    Warrant
      Shares:

    

    

    [SIGNATURE
      PAGES CONTINUE]

     

    
      
        
        

      

      
        29

        
          

        

      

      
        
        

      

    

    Annex
      A 

    

    CLOSING
      STATEMENT

    

    Pursuant
      to the attached Securities Purchase Agreement, dated as of the date hereto,
      the
      purchasers shall purchase up to $_____ of Preferred Stock and Warrants from
      Xenomics, Inc. (the “Company”).
      All
      funds will be disbursed in accordance with this Closing Statement. 

    

    Disbursement
      Date: ___,
      2005

     

    
      
        

      

    

    

    
      	
              I.   
                PURCHASE
                PRICE

            	 
	 	 
	
              Gross
                Proceeds to be Received 

            	
              $

            
	 	 
	
              II.  
                DISBURSEMENTS

            	 
	 	
              $

            
	
               

            	
              $

            
	 	
              $

            
	 	
              $

            
	 	
              $

            
	 	 
	
              Total
                Amount Disbursed:

            	
              $

            
	 	 
	 	 
	 	 
	
              WIRE
                INSTRUCTIONS:

               

            	 
	 	 
	
              To:
                _____________________________________

               

               

               

               

            	 
	
              To:
                _____________________________________

               

               

               

               

            	 

    

     

     

    30Form of Registration Rights Agreement dated July 13, 2005 by and among Xenomics,
      Inc. and the purchasers signatory thereto.

     

     

    Exhibit
      10.2

     

    REGISTRATION
      RIGHTS AGREEMENT

    

    This
      Registration Rights Agreement (this “Agreement”)
      is
      made and entered into as of July 13, 2005, among Xenomics, Inc., a Florida
      corporation (the “Company”),
      and
      the purchasers signatory hereto (each such purchaser is a “Purchaser”
      and all
      such purchasers are, collectively, the “Purchasers”).

    

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

    

    The
      Company and the Purchasers hereby agree as follows:

    

    1.
      Definitions

    

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

    

    “Advice”
      shall
      have the meaning set forth in Section 6(d).

    

    “Effectiveness
      Date”
      means,
      with respect to the initial Registration Statement required to be filed
      hereunder, October 25, 2005 and, with respect to any additional Registration
      Statements which may be required pursuant to Section 3(c), the 105th calendar
      day following the date on which the Company first knows, or reasonably should
      have known, that such additional Registration Statement is required hereunder;
      provided,
      however,
      in the
      event the Company is notified by the Commission that one of the above
      Registration Statements will not be reviewed or is no longer subject to further
      review and comments, the Effectiveness Date as to such Registration Statement
      shall be the fifth Trading Day following the date on which the Company is so
      notified if such date precedes the dates required above.

    

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

    

    “Event”
      shall
      have the meaning set forth in Section 2(b).

    

    “Event
      Date”
      shall
      have the meaning set forth in Section 2(b).

    

    “Filing
      Date” means, with respect to the initial Registration Statement required
      hereunder, the 30th calendar day following the Closing Date and, with
      respect to any additional Registration Statements which may be required pursuant
      to Section 3(c), the 30th day following the date on which the Company
      first knows, or reasonably should have known that such additional Registration
      Statement is required hereunder.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

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

    

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

    

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

    

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

     

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

     

    “Prospectus”
      means
      the prospectus included in a Registration Statement (including, without
      limitation, a prospectus that includes any information previously omitted from
      a
      prospectus filed as part of an effective registration statement in reliance
      upon
      Rule 430A promulgated under the Securities Act), as amended or supplemented
      by
      any prospectus supplement, with respect to the terms of the offering of any
      portion of the Registrable Securities covered by a Registration Statement,
      and
      all other amendments and supplements to the Prospectus, including post-effective
      amendments, and all material incorporated by reference or deemed to be
      incorporated by reference in such Prospectus.

    

    “Registrable
      Securities”
      means,
      as of the date in question, (i) all of the shares of Common Stock issuable
      upon
      conversion in full of the shares of Preferred Stock, (ii) all Warrant Shares,
      (iii) any securities issued or issuable upon any stock split, dividend or other
      distribution recapitalization or similar event with respect to the foregoing
      and
      (iv) any additional shares issuable in connection with any anti-dilution
      provisions associated with the Preferred Stock and Warrants.

     

    “Registration
      Statement”
      means
      the registration statements required to be filed hereunder and any additional
      registration statements contemplated by Section 3(c), including (in each case)
      the Prospectus, amendments and supplements to such registration statement or
      Prospectus, including pre- and post-effective amendments, all exhibits thereto,
      and all material incorporated by reference or deemed to be incorporated by
      reference in such registration statement.

    

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

    

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

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    2.
      Shelf
      Registration

    

    (a)     
      On or prior to each Filing Date, the Company shall prepare and file with the
      Commission a “Shelf” Registration Statement covering the resale of the
      Registrable Securities on such Filing Date for an offering to be made on a
      continuous basis pursuant to Rule 415. The Registration Statement shall be
      on
      Form S-3 (except if the Company is not then eligible to register for resale
      the
      Registrable Securities on Form S-3, in which case such registration shall be
      on
      another appropriate form in accordance herewith) and shall contain (unless
      otherwise directed by the Holders) substantially the “Plan
      of Distribution”
      attached hereto as Annex
      A.
      Subject
      to the terms of this Agreement, the Company shall use its commercially
      reasonable efforts to cause the Registration Statement to be declared effective
      under the Securities Act as promptly as possible after the filing thereof,
      but
      in any event prior to the applicable Effectiveness Date, and shall use its
      commercially reasonable efforts to keep such Registration Statement continuously
      effective under the Securities Act until the earliest of (i) the date that
      is
      two (2) years after the last day of the calendar month following the month
      in
      which the relevant Effective Date occurs, (ii) the date when the Holder may
      sell
      all Registrable Securities under Rule 144 without volume or other restrictions
      or limits or (iii) the date the Holders no longer own any of the Registrable
      Securities (the “Effectiveness
      Period”).
      The
      Company shall immediately notify the Holders via facsimile or e-mail of the
      effectiveness of the Registration Statement on the same day that the Company
      receives notification of the effectiveness from the Commission. 

    

    (b)     
      If: (i) a Registration Statement is not filed on or prior to its Filing Date,
      or
      (ii) the Company fails to file with the Commission a request for acceleration
      in
      accordance with Rule 461 promulgated under the Securities Act, within five
      Trading Days of the date that the Company is notified (orally or in writing,
      whichever is earlier) by the Commission that a Registration Statement will
      not
      be “reviewed,” or not subject to further review, (iii) a Registration Statement
      filed or required to be filed hereunder is not declared effective by the
      Commission by its Effectiveness Date, or (iv) after the Effectiveness Date,
      the
      availability of the Registration and Prospectus is suspended for more than
      60
      days in any 12-month period (any such failure or breach being referred to as
      an
“Event”,
      and
      for purposes of clause (i) or (iii) the date on which such Event occurs, or
      for
      purposes of clause (ii) the date on which such five Trading Day period is
      exceeded being referred to as “Event
      Date”),
      then
      in addition to any other rights the Holders may have hereunder or under
      applicable law, on each such Event Date and on each monthly anniversary of
      each
      such Event Date (if the applicable Event shall not have been cured by such
      date)
      until the applicable Event is cured, the Company shall pay to each Holder an
      amount in cash, as partial liquidated damages and not as a penalty, equal to
      1%
      of the aggregate purchase price paid by such Holder pursuant to the Purchase
      Agreement for any Registrable Securities then held by such Holder. The partial
      liquidated damages pursuant to the terms hereof shall apply on a daily pro-rata
      basis for any portion of a month prior to the cure of an Event.

    

    3.
      Registration
      Procedures

    

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

    

    (a)     
      Not
      less
      than four Trading Days prior to the filing of each Registration Statement or
      any
      related Prospectus or any amendment or supplement thereto (including any
      document that

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    would
      be
      incorporated or deemed to be incorporated therein by reference), the Company
      shall, (i) furnish to each Holder copies of all such documents proposed to
      be
      filed, which documents (other than those incorporated or deemed to be
      incorporated by reference) will be subject to the review of such Holders, and
      (ii) cause its officers and directors, counsel and independent certified public
      accountants to respond to such inquiries as shall be necessary, in the
      reasonable opinion of respective counsel to conduct a reasonable investigation
      within the meaning of the Securities Act. The Company shall not file the
      Registration Statement or any such Prospectus or any amendments or supplements
      thereto to which the Holders of a majority of the Registrable Securities shall
      reasonably object in good faith, provided that, the Company is notified of
      such
      objection, including the substance of such objection, in writing no later than
      two Trading Days after the Holders have been so furnished copies of such
      documents. Each Holder, severally and not jointly agrees to furnish to the
      Company a completed Questionnaire in the form attached to this Agreement as
      Annex B (a “Selling
      Holder Questionnaire”)
      not
      less than ten Trading Days prior to the Filing Date.

     

    (b)     
      (i)
      Prepare and file with the Commission such amendments, including post-effective
      amendments, to a Registration Statement and the Prospectus used in connection
      therewith as may be necessary to keep a Registration Statement continuously
      effective as to the applicable Registrable Securities for the Effectiveness
      Period and prepare and file with the Commission such additional Registration
      Statements in order to register for resale under the Securities Act all of
      the
      Registrable Securities; (ii) cause the related Prospectus to be amended or
      supplemented by any required Prospectus supplement (subject to the terms of
      this
      Agreement), and as so supplemented or amended to be filed pursuant to Rule
      424;
      (iii) respond as promptly as reasonably possible to any comments received from
      the Commission with respect to a Registration Statement or any amendment
      thereto; and (iv) comply in all material respects with the provisions of the
      Securities Act and the Exchange Act with respect to the disposition of all
      Registrable Securities covered by a Registration Statement during the applicable
      period in accordance (subject to the terms of this Agreement) with the intended
      methods of disposition by the Holders thereof set forth in such Registration
      Statement as so amended or in such Prospectus as so supplemented.

     

    (c)     
      If
      during
      the Effectiveness Period, the number of Registrable Securities at any time
      exceeds the number of shares of Common Stock then registered in a Registration
      Statement, then the Company shall file as soon as reasonably practicable but
      in
      any case prior to the applicable Filing Date, an additional Registration
      Statement covering the resale by the Holders of such additional Registrable
      Securities.

    

    (d)     
      Notify
      the Holders of Registrable Securities to be sold (which notice shall, pursuant
      to clauses (ii) through (vi) hereof, be accompanied by an instruction to suspend
      the use of the Prospectus until the requisite changes have been made) as
      promptly as reasonably possible (and, in the case of (i)(A) below, not less
      than
      five Trading Days prior to such filing) and (if requested by any such Person)
      confirm such notice in writing no later than one Trading Day following the
      day
      (i)(A) when a Prospectus or any Prospectus supplement or post-effective
      amendment to a Registration Statement is proposed to be filed; (B) when the
      Commission notifies the Company whether there will be a “review” of such
      Registration Statement and whenever the Commission comments in writing on such
      Registration Statement; and (C) with

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    respect
      to a Registration Statement or any post-effective amendment, when the same
      has
      become effective; (ii) of any request by the Commission or any other Federal
      or
      state governmental authority for amendments or supplements to a Registration
      Statement or Prospectus or for additional information; (iii) of the issuance
      by
      the Commission or any other federal or state governmental authority of any
      stop
      order suspending the effectiveness of a Registration Statement covering any
      or
      all of the Registrable Securities or the initiation of any Proceedings for
      that
      purpose; (iv) of the receipt by the Company of any notification with respect
      to
      the suspension of the qualification or exemption from qualification of any
      of
      the Registrable Securities for sale in any jurisdiction, or the initiation
      or
      threatening of any Proceeding for such purpose; (v) of the occurrence of any
      event or passage of time that makes the financial statements included in a
      Registration Statement ineligible for inclusion therein or any statement made
      in
      a Registration Statement or Prospectus or any document incorporated or deemed
      to
      be incorporated therein by reference untrue in any material respect or that
      requires any revisions to a Registration Statement, Prospectus or other
      documents so that, in the case of a Registration Statement or the Prospectus,
      as
      the case may be, it will not contain any untrue statement of a material fact
      or
      omit to state any material fact required to be stated therein or necessary
      to
      make the statements therein, in light of the circumstances under which they
      were
      made, not misleading; and (vi) the occurrence or existence of any pending
      corporate development with respect to the Company that the Company believes
      may
      be material and that, in the determination of the Company, makes it not in
      the
      best interest of the Company to allow continued availability of the Registration
      Statement or Prospectus; provided that any and all of such information shall
      remain confidential to each Holder until such information otherwise becomes
      public, unless disclosure by a Holder is required by law; provided,
      further,
      notwithstanding each Holder’s agreement to keep such information confidential,
      the Holders make no acknowledgement that any such information is material,
      non-public information. 

     

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

    

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

    

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

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

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

    

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

    

    (j) Upon
      the
      occurrence of any event contemplated by this Section 3, as promptly as
      reasonably possible under the circumstances taking into account the Company’s
      good faith assessment of any adverse consequences to the Company and its
      stockholders of the premature disclosure of such event, prepare a supplement
      or
      amendment, including a post-effective amendment, to a Registration Statement
      or
      a supplement to the related Prospectus or any document incorporated or deemed
      to
      be incorporated therein by reference, and file any other required document
      so
      that, as thereafter delivered, neither a Registration Statement nor such
      Prospectus will contain an untrue statement of a material fact or omit to state
      a material fact required to be stated therein or necessary to make the
      statements therein, in light of the circumstances under which they were made,
      not misleading. If
      the Company notifies the Holders in accordance with clauses (ii) through (v)
      of
      Section 3(d) above to suspend the use of any Prospectus until the requisite
      changes to such Prospectus have been made, then the Holders shall suspend use
      of
      such Prospectus. The Company will use its commercially reasonable efforts to
      ensure that the use of the Prospectus may be resumed as promptly as is
      practicable. The Company shall be entitled to exercise its right under this
      Section 3(j) to suspend the availability of a Registration Statement and
      Prospectus, for a period not to exceed 75 days (which need not be consecutive
      days) in any 12 month period.

     

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

    

    (l) The
      Company may require each selling Holder to furnish to the Company a certified
      statement as to the number of shares of Common Stock beneficially owned by
      such
      Holder and, if required by the Commission, the person thereof that has voting
      and dispositive control over the Shares. During any periods that the Company
      is
      unable to meet its obligations hereunder with respect to the registration of
      the
      Registrable Securities solely because any Holder fails to furnish such
      information within five Trading Days of the Company’s request, any 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    liquidated
      damages that are accruing at such time as to such Holder only shall be tolled
      and any Event that may otherwise occur solely because of such delay shall be
      suspended as to such Holder only, until such information is delivered to the
      Company.

    

    4.
      Registration
      Expenses.
      All
      fees and expenses incident to the performance of or compliance with this
      Agreement by the Company shall be borne by the Company whether or not any
      Registrable Securities are sold pursuant to the Registration Statement. The
      fees
      and expenses referred to in the foregoing sentence shall include, without
      limitation, (i) all registration and filing fees (including, without limitation,
      fees and expenses (A) with respect to filings required to be made with the
      Trading Market on which the Common Stock is then listed for trading, and (B)
      in
      compliance with applicable state securities or Blue Sky laws reasonably agreed
      to by the Company in writing (including, without limitation, fees and
      disbursements of counsel for the Company in connection with Blue Sky
      qualifications or exemptions of the Registrable Securities and determination
      of
      the eligibility of the Registrable Securities for investment under the laws
      of
      such jurisdictions as requested by the Holders), (ii) printing expenses
      (including, without limitation, expenses of printing certificates for
      Registrable Securities), (iii) messenger, telephone and delivery expenses,
      (iv)
      fees and disbursements of counsel for the Company, (v) Securities Act liability
      insurance, if the Company so desires such insurance, and (vi) fees and expenses
      of all other Persons retained by the Company in connection with the consummation
      of the transactions contemplated by this Agreement. In addition, the Company
      shall be responsible for all of its internal expenses incurred in connection
      with the consummation of the transactions contemplated by this Agreement
      (including, without limitation, all salaries and expenses of its officers and
      employees performing legal or accounting duties), the expense of any annual
      audit and the fees and expenses incurred in connection with the listing of
      the
      Registrable Securities on any securities exchange as required hereunder. In
      no
      event shall the Company be responsible for any broker or similar commissions
      or
      any legal fees or other costs of the Holders.

    

    5.
      Indemnification

    

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

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    expressly
      approved in writing by such Holder expressly for use in a Registration
      Statement, such Prospectus or such form of Prospectus or in any amendment or
      supplement thereto (it being understood that the Holder has approved Annex
      A
      hereto for this purpose) or (ii) in the case of an occurrence of an event of
      the
      type specified in Section 3(d)(ii)-(vi), the use by such Holder of an outdated
      or defective Prospectus after the Company has notified such Holder in writing
      that the Prospectus is outdated or defective and prior to the receipt by such
      Holder of the Advice contemplated in Section 6(d). The Company shall notify
      the
      Holders promptly of the institution, threat or assertion of any Proceeding
      arising from or in connection with the transactions contemplated by this
      Agreement of which the Company is aware.

    

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

    

    (c)
      Conduct
      of Indemnification Proceedings.
      If any
      Proceeding shall be brought or asserted against any Person entitled to indemnity
      hereunder (an “Indemnified
      Party”),
      such Indemnified Party shall promptly notify the Person from whom indemnity
      is
      sought (the “Indemnifying
      Party”)
      in
      writing, and the Indemnifying Party shall have the right to assume the defense
      thereof, including the employment of counsel reasonably satisfactory to the
      Indemnified Party and the payment of all fees and expenses incurred in
      connection with defense thereof; provided, that the failure of any Indemnified
      Party to give such notice shall not relieve the Indemnifying Party of its
      obligations or liabilities pursuant to this Agreement, except (and
      only)

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    to
      the
      extent that it shall be finally determined by a court of competent jurisdiction
      (which determination is not subject to appeal or further review) that such
      failure shall have prejudiced the Indemnifying Party.

    

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

    

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

    

    The
      parties hereto agree that it would not be just and equitable if contribution
      pursuant to this Section 5(d) were determined by pro rata allocation or by
      any
      other method of allocation that does not take into account the equitable
      considerations referred to in the immediately preceding paragraph.
      Notwithstanding the provisions of this Section 5(d), no Holder shall
      be

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    required
      to contribute, in the aggregate, any amount in excess of the amount by which
      the
      proceeds actually received by such Holder from the sale of the Registrable
      Securities subject to the Proceeding exceeds the amount of any damages that
      such
      Holder has otherwise been required to pay by reason of such untrue or alleged
      untrue statement or omission or alleged omission, except in the case of fraud
      by
      such Holder.

    

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

    

    6. Reports
      Under Exchange Act.
      With a
      view to making available to the Holder the benefits of Rule 144 promulgated
      under the Securities Act and any other rule or regulation of the SEC that may
      at
      any time permit a Holder to sell Registrable Shares of the Company to the public
      without registration, the Company agrees to:

     

    
      	 	
              (a)

            	
              Make
                and keep public information available, as those terms are used in
                SEC Rule
                144, at all times;

            

    

     

    
      	 	
              (b)

            	
              File
                with the SEC in a timely manner all reports and other documents required
                of the Company under the Securities Act and the Exchange
                Act;

            

    

     

    
      	 	
              (c)

            	
              Furnish
                to any Holder, so long as the Holder owns any Registrable Shares,
                forthwith on request, (i) a written statement by the Company that
                it has
                complied with the reporting requirements of SEC Rule 144, the Securities
                Act and the Exchange Act, (ii) a copy of the most recent annual or
                quarterly report of the Company and such other reports and documents
                so
                filed by the Company, and (iii) such other information as may be
                reasonably requested in availing any Holder of any rule or regulation
                of
                the SEC that permits the selling of any such securities without
                registration; and 

            

    

     

    
      	 	
              (d)

            	
              Undertake
                any additional actions reasonably necessary to maintain the availability
                of the use of Rule 144.

            

    

     

    7.
      Miscellaneous

    

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

    

    (b) Compliance.
      Each
      Holder, severally and not jointly, covenants and agrees that it will comply
      with
      the prospectus delivery requirements of the Securities Act as applicable to
      it
      in connection with sales of Registrable Securities pursuant to the Registration
      Statement.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    (c) Discontinued
      Disposition.
      Each
      Holder, severally and not jointly, agrees by its acquisition of such Registrable
      Securities that, upon receipt of a notice from the Company of the occurrence
      of
      any event of the kind described in Section 3(d), such Holder will forthwith
      discontinue disposition of such Registrable Securities under a Registration
      Statement until such Holder's receipt of the copies of the supplemented
      Prospectus and/or amended Registration Statement, or until it is advised in
      writing (the “Advice”)
      by the
      Company that the use of the applicable Prospectus may be resumed, and, in either
      case, has received copies of any additional or supplemental filings that are
      incorporated or deemed to be incorporated by reference in such Prospectus or
      Registration Statement. The Company will use its commercially reasonable efforts
      to ensure that the use of the Prospectus may be resumed as promptly as it
      practicable. The Company agrees and acknowledges that any periods during which
      the Holder is required to discontinue the disposition of the Registrable
      Securities hereunder shall be subject to the provisions of Section
      2(b).

    

    (d) Amendments
      and Waivers.
      The
      provisions of this Agreement, including the provisions of this sentence, may
      not
      be amended, modified or supplemented, and waivers or consents to departures
      from
      the provisions hereof may not be given, unless the same shall be in writing
      and
      signed by the Company and each Holder of the then outstanding Registrable
      Securities. Notwithstanding the foregoing, a waiver or consent to depart from
      the provisions hereof with respect to a matter that relates exclusively to
      the
      rights of Holders and that does not directly or indirectly affect the rights
      of
      other Holders may be given by Holders of all of the Registrable Securities
      to
      which such waiver or consent relates; provided,
      however,
      that
      the provisions of this sentence may not be amended, modified, or supplemented
      except in accordance with the provisions of the immediately preceding sentence.
      

    

    (e) Notices.
      Any and
      all notices or other communications or deliveries required or permitted to
      be
      provided hereunder shall be delivered as set forth in the Purchase Agreement.
      

    

    (f) Successors
      and Assigns.
      This
      Agreement shall inure to the benefit of and be binding upon the successors
      and
      permitted assigns of each of the parties and shall inure to the benefit of
      each
      Holder. The Company may not assign its rights or obligations hereunder without
      the prior written consent of all of the Holders of the then-outstanding
      Registrable Securities. Each Holder may assign their respective rights hereunder
      in the manner and to the Persons as permitted under the Purchase
      Agreement.

    

    (g) No
      Inconsistent Agreements.
      Neither
      the Company nor any of its subsidiaries has entered, as of the date hereof,
      nor
      shall the Company or any of its subsidiaries, on or after the date of this
      Agreement, enter into any agreement with respect to its securities, that would
      have the effect of impairing the rights granted to the Holders in this Agreement
      or otherwise conflicts with the provisions hereof. 

    

    (h) Execution
      and Counterparts.
      This
      Agreement may be executed in any number of counterparts, each of which when
      so
      executed shall be deemed to be an original and, all of which taken together
      shall constitute one and the same Agreement. In the event that any signature
      is
      delivered by facsimile transmission, such signature shall create a valid binding
      obligation of the

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    party
      executing (or on whose behalf such signature is executed) the same with the
      same
      force and effect as if such facsimile signature were the original
      thereof.

    

    (i)
      Governing
      Law.
      All
      questions concerning the construction, validity, enforcement and interpretation
      of this Agreement shall be determined with the provisions of the Purchase
      Agreement.

    

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

    

    (k) 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.

    

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

    

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

     

     

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

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

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

       

       

      
        	 	 	 
	 	XENOMICS,
                INC.
	 
 	 
 	 
 
	 	By:  	 
	 	
                

              
	 	
                Name:

                Title:

              

      

    

    

      

     

     

    [SIGNATURE
      PAGE OF HOLDERS FOLLOWS]

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    [PURCHASER’S
      SIGNATURE PAGE]

    

    Name
      of
      Investing Entity: __________________________

    Signature
      of Authorized Signatory of Investing Entity:
      __________________________

    Name
      of
      Authorized Signatory: _________________________

    Title
      of
      Authorized Signatory: __________________________

    

    

    [SIGNATURE
      PAGES CONTINUE]

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    ANNEX
      A

    

    Plan
      of Distribution

     

    The
      selling stockholders, which as used herein includes donees, pledgees,
      transferees or other successors-in-interest selling shares of common stock
      or
      interests in shares of common stock received after the date of this prospectus
      from a selling stockholder as a gift, pledge, partnership distribution or other
      transfer, may, from time to time, sell, transfer or otherwise dispose of any
      or
      all of their shares of common stock or interests in shares of common stock
      on
      any stock exchange, market or trading facility on which the shares are traded
      or
      in private transactions. These dispositions may be at fixed prices, at
      prevailing market prices at the time of sale, at prices related to the
      prevailing market price, at varying prices determined at the time of sale,
      or at
      negotiated prices.

    

    The
      selling stockholders may use any one or more of the following methods when
      disposing of shares or interests therein:

    

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

    

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

    

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

    

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

    

    -
      privately negotiated transactions;

    

    -
      short
      sales;

    

    -
      through
      the writing or settlement of options or other hedging transactions, whether
      through an options exchange or otherwise;

    

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

    

    -
      a
      combination of any such methods of sale; and

    

    -
      any
      other method permitted pursuant to applicable law.

    

    The
      selling stockholders may, from time to time, pledge or grant a security interest
      in some or all of the shares of common stock owned by them and, if they default
      in the performance of their secured obligations, the pledgees or secured parties
      may offer and sell the shares of common stock, from time to time, under this
      prospectus, or under an amendment to this prospectus under Rule 424(b)(3) or
      other applicable provision of the Securities Act amending the list of selling
      stockholders to include the pledgee, transferee or other successors in interest
      as

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    selling
      stockholders under this prospectus. The selling stockholders also may transfer
      the shares of common stock in other circumstances, in which case the
      transferees, pledgees or other successors in interest will be the selling
      beneficial owners for purposes of this prospectus.

    

    In
      connection with the sale of our common stock or interests therein, the selling
      stockholders may enter into hedging transactions with broker-dealers or other
      financial institutions, which may in turn engage in short sales of the common
      stock in the course of hedging the positions they assume. The selling
      stockholders may also sell shares of our common stock short and deliver these
      securities to close out their short positions, or loan or pledge the common
      stock to broker-dealers that in turn may sell these securities. The selling
      stockholders may also enter into option or other transactions with
      broker-dealers or other financial institutions or the creation of one or more
      derivative securities which require the delivery to such broker-dealer or other
      financial institution of shares offered by this prospectus, which shares such
      broker-dealer or other financial institution may resell pursuant to this
      prospectus (as supplemented or amended to reflect such
      transaction).

    

    The
      aggregate proceeds to the selling stockholders from the sale of the common
      stock
      offered by them will be the purchase price of the common stock less discounts
      or
      commissions, if any. Each of the selling stockholders reserves the right to
      accept and, together with their agents from time to time, to reject, in whole
      or
      in part, any proposed purchase of common stock to be made directly or through
      agents. We will not receive any of the proceeds from this offering. Upon any
      exercise of the warrants by payment of cash, however, we will receive the
      exercise price of the warrants.

    

    The
      selling stockholders also may resell all or a portion of the shares in open
      market transactions in reliance upon Rule 144 under the Securities Act of 1933,
      provided that they meet the criteria and conform to the requirements of that
      rule.

    

    The
      selling stockholders and any underwriters, broker-dealers or agents that
      participate in the sale of the common stock or interests therein may be
      "underwriters" within the meaning of Section 2(11) of the Securities Act. Any
      discounts, commissions, concessions or profit they earn on any resale of the
      shares may be underwriting discounts and commissions under the Securities Act.
      Selling stockholders who are "underwriters" within the meaning of Section 2(11)
      of the Securities Act will be subject to the prospectus delivery requirements
      of
      the Securities Act.

    

    To
      the
      extent required, the shares of our common stock to be sold, the names of the
      selling stockholders, the respective purchase prices and public offering prices,
      the names of any agents, dealer or underwriter, any applicable commissions
      or
      discounts with respect to a particular offer will be set forth in an
      accompanying prospectus supplement or, if appropriate, a post-effective
      amendment to the registration statement that includes this
      prospectus.

    

    In
      order
      to comply with the securities laws of some states, if applicable, the common
      stock may be sold in these jurisdictions only through registered or licensed
      brokers or dealers. In addition, in some states the common stock may not be
      sold
      unless it has been registered or qualified for sale or an exemption from
      registration or qualification requirements is available and is complied
      with.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    We
      have
      advised the selling stockholders that the anti-manipulation rules of Regulation
      M under the Exchange Act may apply to sales of shares in the market and to
      the
      activities of the selling stockholders and their affiliates. In addition, we
      will make copies of this prospectus (as it may be supplemented or amended from
      time to time) available to the selling stockholders for the purpose of
      satisfying the prospectus delivery requirements of the Securities Act. The
      selling stockholders may indemnify any broker-dealer that participates in
      transactions involving the sale of the shares against certain liabilities,
      including liabilities arising under the Securities Act.

    

    We
      have
      agreed to indemnify the selling stockholders against liabilities, including
      liabilities under the Securities Act and state securities laws, relating to
      the
      registration of the shares offered by this prospectus.

    

    We
      have
      agreed with the selling stockholders to keep the registration statement of
      which
      this prospectus constitutes a part effective until the earlier (i) the date
      that
      is two (2) years after the last day of the calendar month following the month
      in
      which the effective date of the registration statement occurs, (ii) the date
      when the selling stockholder may sell all securities registered under the
      registration statement under Rule 144 without volume or other restrictions
      or
      limits or (iii) the date the selling stockholders no longer own any of the
      securities registered under the registration statement.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Annex
      B

     

     

    XENOMICS,
      INC.

     

     

    SELLING
      STOCKHOLDERS’ QUESTIONNAIRE 

     

    The
      following information is requested from you in connection with the preparation
      and filing by Xenomics, Inc. (the “Company”) of a Registration Statement on Form
      SB-2 or other appropriate form (the “Registration Statement”) with the
      Securities and Exchange Commission (the “SEC”) covering the sale of shares of
      the Company’s common stock by certain stockholders.

    

    We
      would
      appreciate your answering all of the questions included in this questionnaire,
      even though your answers may be in the negative, so that the Company will have
      a
      record of your responses for use in connection with the preparation of the
      Registration Statement. It
      is
      requested that you give careful attention to each question and that you complete
      this questionnaire personally.

    

    In
      order
      to assist you in completing this questionnaire, certain terms used herein are
      defined in the appendix which is attached to this questionnaire. Each of such
      defined terms has been bolded
      and italicized
      for
      identification. The term “person,” as used in this questionnaire, means any
      natural person, company, government or political subdivision, agency or
      instrumentality of a government.

    

    After
      you have completed the following questionnaire, please send the completed
      questionnaire by facsimile ((212) 930-9725) or overnight courier as soon as
      possible to the attention of Jeffrey Fessler at Sichenzia Ross Friedman Ference
      LLP, 1065 Avenue of the Americas, New York, New York
      10018.

     

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

     

    General
      Information

     

    1.       
      Please
      provide your full name and address or the full name and address of the entity
      on
      whose behalf you are completing this questionnaire. The address may be a
      business, mailing or residence address.

     

     

    
      	Name:	 
	 	 
	Address: 
	 

    

    
 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Securities
      Holdings

     

    1.     
      Please
      fill in all blanks in the following questions related to your beneficial
      ownership
      of the
      Company’s common stock. Generally, the term “beneficial
      ownership”
      refers
      to any direct or indirect interest in the securities which entitles you to
      any
      of the rights or benefits of ownership, even though you may not be the holder
      of
      record of the securities. For example, securities held in “street name” over
      which you exercise voting or investment power would be considered beneficially
      owned
      by you.
      Other examples of indirect ownership include ownership by a partnership in
      which
      you are a partner or by an estate or trust of which you or any member of your
      immediate
      family
      is a
      beneficiary. Ownership of securities held in the names of your spouse, minor
      children or other relatives who live in the same household may be attributed
      to
      you.

    

    If
      you
      have any reason to believe that any interest in securities of the Company which
      you may have, however remote, is a beneficial interest, please describe such
      interest. For purposes of responding to this questionnaire, it is preferable
      to
      err on the side of inclusion rather than exclusion. Where the SEC’s
      interpretation of beneficial
      ownership
      would
      require disclosure of you interest or possible interest in certain securities
      of
      the Company, and you believe that you do not actually possess the attributes
      of
beneficial
      ownership,
      an
      appropriate response is to disclose the interest and at the same time disclaim
      beneficial
      ownership
      of the
      securities.

    

    Please
      indicate the amount of common stock of the Company or any of its subsidiaries
      which you beneficially
      owned
      as of
      the date hereof.

    

    For
      each
      holding:

    

    
      	 	
              ·

            	 	
              State
                the nature of the holding (i.e.,
                held in your own name, jointly, as a trustee or beneficiary of a
                trust, as
                a custodian, as an executor, in discretionary accounts, by your spouse
                or
                minor children, by a partnership of which you are a partner, etc.),
                and

            

    

     

    
      	 	
              ·

            	 	
              State
                whether you are the beneficial
                owner
                by
                reason of (i) sole voting power, (ii) shared voting power, (iii)
                sole
                investment power, (iv) shared investment power, (v) the right to
                acquire
                stock within 60 days of the end of the calendar year, and/or (vi)
                the
                right to acquire stock with the purpose of changing or influencing
                control.

            

    

     

    
      	 	
              ·

            	 	
              Indicate
                in the Remarks column whether you have sole or shared voting or investment
                power with respect to any such securities, and in what capacity
                (i.e.,
                individual, general partner, trustee) you have such power or
                powers.

            

    

     

    
      	 	
              ·

            	 	
              If
                you wish to disclaim beneficial
                ownership
                of
                any shares listed, so indicate by writing the word “Disclaim” in the
                Remarks column below; and you understand that such shares will be
                shown
                separately from your beneficial holdings and an appropriate disclaimer
                set
                forth.

            

    

     

    
      	 	
              ·

            	 	
              If
                any of the shares listed are subject to any claim, encumbrance, pledge
                or
                lien, so indicate in the Remarks
                column.

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
              Number
                of

                Shares  

            	 	
              Registered
                in

              the
                Name of

            	 	
              Beneficially

              Owned
                by

            	 	
              Remarks

            	 	
              Shares
                Voted

            	 	
               

              Shares
                to be Sold

            
	
               

            	 	
               

            	 	
               

            	 	
               

            	 	
               

            	 	
               

            
	
              ________

            	 	
              _______________

            	 	
              _______________

            	 	
              _______________

            	 	
              ________

            	 	
               

            
	
               

            	 	
               

            	 	
               

            	 	
               

            	 	
               

            	 	
               

            
	
              ________

            	 	
              _______________

            	 	
              _______________

            	 	
              _______________

            	 	
              ________

            	 	
               

            
	
               

            	 	
               

            	 	
               

            	 	
               

            	 	
               

            	 	
               

            
	
              ________

            	 	
              _______________

            	 	
              _______________

            	 	
              _______________

            	 	
              ________

            	 	
               

            
	
               

            	 	
               

            	 	
               

            	 	
               

            	 	
               

            	 	
               

            
	
               

            	 	
               

            	 	
               

            	 	
               

            	 	
               

            	 	
               

            
	
            	 	
            	 	
            	 	
            	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    2.        
      5%
      Stockholders

    

    To
      the
      best of my knowledge, all persons (including myself and my associates
      and
      including corporations, partnerships, trusts, associations and other such
      groups) who beneficially
      own
      more
      than 5% of any class of the Company’s stock are described below:

    

    
      	 	
              Name
                of

              Beneficial

              Owner

            	 	
              Class
                of Shares

              Beneficially

              Owned

            	 	
              Holder
                of

              Voting
                or

              Investment
                Power

            	 

    

     

     

     

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    No
      Adverse Interest

     

    All
      interests I or my associates
      have or
      will have that are adverse to the Company interests in any pending or
      contemplated legal proceeding or government investigation to which the Company
      is or will be a party (or to which its property may be subject) are described
      below:

     

     

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    Voting
      Arrangement

     

    All
      voting trusts or similar agreements or arrangements
      of which
      I have knowledge under which more than 5% of the Company’s outstanding common
      stock, on an as converted basis, is held or to be held are described below:
      

    

    
      	 	
              Names
                and Addresses of Voting Trustees

            	 	
              Voting
                Rights and Other Powers

              Under
                Trust, Agreement or Arrangement

            	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 

    

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    Change
      in Control

     

    All
      arrangements
      of which
      I have knowledge, including any pledge by any person of securities of the
      Company, the operations of which may at a subsequent date result in a change
      in
control
      of the
      Company, are described below:

     

     

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

    Transactions
      with the Company

     

    1.       
      Information
      regarding all material
      interests of yours or your associates in any actual or proposed transaction
      during the last three fiscal years to which the Company was or is to be a party
      and that are identified under “Securities Holdings” above) is provided below.
Further,
      no such transaction need be described if:

    

    (a)     
      the
      amount involved (including all periodic installments in the case of any lease
      or
      other agreement provided for periodic payments or installments and including
      the
      value of all transactions In a series of similar transactions) does not exceed
      $60,000;

    

    (b)     
      the
      rates
      or charges involved in the transaction are fixed by law or governmental
      authority or determined by competitive bids;

    

    (c)     
      the
      services involved are as a bank depositary of funds, transfer agent, registrar,
      trustee under a trust indenture or other similar service;

    

    (d)     
      my
      interest arises solely from my ownership of securities of the Company and I
      received no extra or special benefit not shared on a pro rata basis by all
      other
      holders of securities in the same class;

    

    (e)     
      my
      interest in the corporation that is a party to the transaction is solely as
      a
      director; or

    

    (f)     
      my
      interest arose solely as an officer and/or director of the Company (e.g., my
      compensation arrangement with the Company).

    

    Description:

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

    Affiliation
      with Accountants or attorneys

     

    Described
      below is any interest, affiliation or connection you have with the firm of
      Sichenzia Ross Friedman Ference LLP, Lazar Levine & Felix LLP or any other
      law firm or accounting firm that has been retained by the Company during the
      last three fiscal years or is proposed to be retained by the Company:

     

     

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    Contracts
      with the Company

     

    Described
      below are all contracts with the Company or in which the Company has a
      beneficial interest, or to which the Company has succeeded by assumption or
      assignment, to which you or any of your associates
      is a
      party, which are to be performed in whole or in part at or after the date of
      the
      proposed filing of the Registration Statement, or which were made not more
      than
      two years prior thereto:

     

     

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

    NASD-RELATED
      QUESTIONS

     

     

    (1) Are
      you
      (i) a “member” of the National Association of Securities Dealers, Inc.
      (“NASD”),
      (ii)
      an “affiliate” of a member of the NASD, (iii) a “person associated with a
      member” or “associated person of a member” of the NASD or (iv) associated with
      an “underwriter or related person” with respect to the proposed initial public
      offering for the Company? 

     

    
      
        	 	Yes                       
                No       
                

      

    

     

     

    For
      the
      sole purpose of this Question: (i) the NASD defines a “member” as being either
      any broker or dealer admitted to membership in the NASD or any officer or
      partner of such a member or the executive representative of such member or
      the
      substitute for such representative; (ii) the term “affiliate” means a person
      that directly, or indirectly through one or more intermediaries, controls,
      or is
      controlled by, or is in common control with the person specified. Persons who
      have acted or are acting on behalf or for the benefit of a person include,
      but
      are not necessarily limited to, directors, officers, employees, agents,
      consultants and sales representatives; (iii) the NASD defines a “person
      associated with a member” or “associated person of a member” as being every sole
      proprietor, partner, officer, director or branch manager of any member, or
      any
      natural person occupying a similar status or performing similar functions,
      or
      any natural person engaged in the investment banking or securities business
      who
      is directly or indirectly controlling or controlled by such member (for example,
      any employee), whether or not any such person is registered or exempt from
      registration with the NASD; and (iv) the term “underwriter or related person”
      includes, with respect to a proposed offering, underwriters, underwriters’
      counsel, financial consultants and advisers, finders, members of the selling
      or
      distribution group, and any and all other persons associated with or related
      to
      any such persons.

    

    If
      yes,
      kindly describe such relationship (whether direct or indirect) and please
      respond to Questions (2) and (3) below; if no, please proceed to Question
      (4).

    

    (2) Please
      set forth information as to all purchases and acquisitions (including contracts
      for purchase or acquisition) of securities of the Company by you, regardless
      of
      the time acquired or the source from which derived:

    

    
      	
              
                Seller
                  or
Prospective Seller

            	
              
                Amount
                  and
Nature of Securities

            	
              Price
                or Other

              Consideration

            	
              Date

            

    

    

    

    (3) In
      connection with your direct or indirect affiliation or association with a
“member” of the NASD as set forth above in Question (1), please furnish the
      identity of such NASD member and any information, if known, as to whether such
      NASD member intends to participate in any capacity in this proposed initial
      public offering, including the details of such participation:

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    (4) Please
      describe any underwriting compensation and arrangement or any dealings known
      to
      you between any “underwriter or related person”, “member” of the NASD,
“affiliate” of a member of the NASD, “person associated with a member”, or
“associated person of a member” of the NASD on the one hand and the Company or
      controlling shareholder thereof on the other hand, other than information
      relating to the proposed initial public offering of the Company:

    

    

    

    (5) Please
      set out below any information, if known, as to whether any “member” of the NASD,
      any “underwriter or related person”, “affiliate” or a member of the NASD,
“person associated with a member” or “associated person of a member” of the NASD
      may receive any portion of the net offering:

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

    I
      understand that material misstatements or the omission of material facts in
      the
      Registration Statement may give rise to civil and criminal liabilities to the
      Company, to each officer and director of the Company signing the Registration
      Statement and other persons signing the Registration Statement. I will notify
      you and the Company of any misstatement of a material fact in the Registration
      Statement or any amendment thereto, and of the omission of any material fact
      necessary to make the statements contained therein not misleading, as soon
      as
      practicable after a copy of the Registration Statement or any such amendment
      has
      been provided to me.

    

    I
      confirm
      that the foregoing statements are correct, to the best of my knowledge and
      belief. 

    

    Dated: ___________.

     

     

    
      	 	
              Very
                truly yours,

            	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	(Signature)	 
	 	 	 
	
               

               

            	 	 
	 	(Typed
              or Printed Name)	 

    

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

    Definitions

     

     

    The
      term
“arrangement”
      means
      any plan, contract, authorization or understanding whether or not set forth
      in a
      formal document.

    

    The
      term
“associate”
      as used
      throughout this questionnaire, means (a) any corporation or organization (other
      than the Company) of which I am an officer, director or partner or of which
      I
      am, directly or indirectly, the beneficial owner of 5% or more of any class
      of
      equity securities, (b) any trust or other estate in which I have a substantial
      beneficial interest or as to which I serve as trustee or in a similar capacity,
      (c) my spouse, (d) any relative of my spouse or any relative of mine who has
      the
      same home as me or who is a director or officer or key executive of the Company,
      (e) any partner, syndicate member or person with whom I have agreed to act
      in
      concert with respect to the acquisition, holding, voting or disposition of
      shares of the Company’s securities.

    

    The
      term
“beneficially
      owned”
      when
      used in connection with the ownership of securities, means (a) any interest
      in a
      security which entitles me to any of the rights or benefits of ownership even
      though I may not be the owner of record or (b) securities owned by me directly
      or indirectly, including those held by me for my own benefit (regardless of
      how
      registered) and securities held by others for my benefit (regardless of how
      registered), such as by custodians, brokers, nominees, pledgees, etc., and
      including securities held by an estate or trust in which I have an interest
      as
      legatee or beneficiary, securities owned by a partnership of which I am a
      partner, securities held by a personal holding company of which I am a
      stockholder, etc., and securities held in the name of my spouse, minor children
      and any relative (sharing the same home). A “beneficial owner” of a security
      includes any person who, directly or indirectly, through any contract,
      arrangement, understanding, relationship or otherwise has or
      shares:

    

    (a)     
      voting
      power which includes the power to vote, or to direct the voting of, such
      security; and/or

    

    (b)     
      investment
      power which includes the power to dispose, or to direct the disposition, of
      such
      security.

    

    The
      term
“control”
      means
      the possession, directly or indirectly, of the power to direct or cause the
      direction of the management and policies of a person, whether through the
      ownership of voting securities, by contract or otherwise.

    

    The
      term
“immediate
      family”
      means
      any relationship by blood, marriage or adoption, not more remote than first
      cousin.

    

    The
      term
“material,”
      when
      used in this questionnaire to qualify a requirement for the furnishing of
      information as to any subject, limits the information required to those matters
      as to which an average prudent investor ought reasonably to be informed before
      purchasing the Common Stock of the Company.

     

     

    15

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