Document:

Filed by Automated Filing Services Inc. (604) 609-0244 - Buckingham Exploration, Inc. - Exhibit 10.5

PURCHASE AND SALE AGREEMENT 

FOR UNPATENTED LODE MINING CLAIMS 

THIS PURCHASE AND SALE AGREEMENT (“Agreement”) is made
effective the 9th day of May 2007 (the “Effective Date”) by and
between BUCKINGHAM EXPLORATION,
INC., a Nevada corporation (“BEI”) whose address is
1978 Vine Street, Suite 502, Vancouver, British Columbia V6K 4A1, and
PIKES PEAK RESOURCES
INC., a Canadian limited liability company (“PPR”) whose
address is suite 880, 609 Granville Street, Vancouver, BC V7Y 1G5. PPR and BEI
are sometimes referred to individually in this Agreement as “Party” and
collectively as “Parties.” 

RECITALS 

PPR is or by closing will be the recorded owner of 29
unpatented lode mining claims located in Sections 25, 30 and 31, T. 15 S., R 71
W. of the 6th P.M., Teller County, Colorado, which are more
particularly described in Exhibit A which is attached hereto and incorporated
herein by this reference (the “Claims”); and 

PPR wishes to sell the Claims to BEI, and BEI wishes to
purchase the Claims, on the terms and subject to the conditions set forth in
this Agreement. 

THEREFORE, in consideration of the mutual promises contained
herein and other good and valuable consideration, the receipt and adequacy of
which are acknowledged by PPR and BEI, the Parties have set forth below the
terms and conditions for the sale and purchase of the Claims. 

	A. 	
      Purchase Price. The purchase price for the Claims
      is deemed (a) ONE MILLION UNITED STATES DOLLARS to be paid at Closing by
      PPR in the form of (i) FIVE HUNDRED THOUSAND DOLLARS (US$) in good funds,
      (ii) FIVE MILLION shares of the common stock of BEI, and (b) a Net Returns
      Royalty of TWO percent of the proceeds of minerals mined and sold from the
      Claims by BEI (the “Royalty”). The definition and the manner of
      calculation of the Royalty is more fully set forth in the text of Exhibit
      B, a Quitclaim Deed and Royalty Agreement which is attached hereto and
      incorporated herein by this reference.

	 	 	 	 
	B. 	
      Closing. At a closing to be held in Denver,
      Colorado, or at any other place the Parties may otherwise mutually agree
      in writing, at a time and place to be agreed by the Parties, (the
      “Closing”), the Parties shall each deliver to the other the following
      payments and documents:

	 	 	 	 
		1. 	
      BEI. BEI shall deliver to PPR the
  following:

	 	 	 	 
			(a) 	
      FIVE HUNDRED THOUSAND DOLLARS (US$) in good
  funds.

	 	 	 	 
			(b) 	
      A share certificate registered in the name of PPR for
      FIVE MILLION shares of common stock of BEI (“Shares”)

	 	 	 	 
		2. 	
      PPR shall deliver the following:

Page 1 of 5 

/s/ R.R        /s/
M.O 

	 	(a) 	
      A Quitclaim Deed and Royalty Agreement substantially in
      the form of Exhibit B by which PPR will (i) transfer all of its right,
      title and interest in the Claims to BEI, and (ii) reserve the Royalty to
      itself.

	 	 	 
	 	(b) 	
      Such information and documents as PPR has in its
      possession or control regarding the ownership and geology of the Claims
      and the results of any maintenance or other activities PPR or its
      affiliates have performed on the Claims, if any.

	 	 	 
	 	(c) 	
      A certificate of PPR as to compliance by PPR and person
      who located the Claims with applicable Bureau of Land Management, State of
      Colorado and Teller County filing and or recording obligations regarding
      the Claims, assuming correctness of the legal description and excluding
      any survey thereof.

	C. 	
      Condition to Closing.

	 	 	 
		
      PPR shall have good and marketable title to the Claims
      proven to the reasonable satisfaction of BEI.

	 	 	 
		1. 	
      Closing shall occur on or before FOURTEEN days from the
      Effective Date of this Agreement unless extended in writing by both
      Parties.

	 	 	 
		2. 	
      BEI will reimburse PPR for the costs incurred by PPR in
      obtaining the BLM CMC serial numbers for those Claims which are located in
      Sections 30 and 31, T. 15 S., R. 71 W., 6th P.M., such
      reimbursement shall not exceed THREE THOUSAND SEVEN HUNDRED UNITED STATES
      DOLLARS.

	 	 	 
	D. 	
      Representations of the Parties.

	 	 	 
		1. 	
      BEI represents to PPR that it is a corporation in good
      standing in the place of its incorporation, that it has the lawful right
      and corporate authority to enter into and carry out its obligations under
      this Agreement, that it has the lawful right to conduct business in the
      State of Colorado, and that the person signing on behalf of BEI has the
      authority to bind BEI to the terms and conditions of this
  Agreement.

	 	 	 
		2. 	
      BEI represents to PPR that if at any time or from time to
      time BEI shall determine to register securities for its own account for a
      public offering or the account of any of its stockholders to publicly sell
      their securities, other than a registration on Form S-1 or S-8 relating
      solely to employee stock option or purchase plans, BEI will promptly
      notify PPR of such registration and if PPR notifies BEI of its desire to
      be included in such registration within FIVE business days of BEI’s
      notice, BEI shall include the shares issued to PPR in such registration.
      BEI at its expense will keep such registration effective for a period of
      ONE HUNDRED AND EIGHTY days or until all of the stockholders named therein
      have completed the distribution described in the registration statement,
      whichever first occurs.

	 	 	 
		3. 	
      PPR represents that it is a company in good standing in
      the place of its organization, that it has the lawful right and
      organizational authority to enter into and carry out its obligations under
      this Agreement, that its wholly owned

Page 2 of 5 

/s/ R.R        /s/
M.O 

	 		
      subsidiary and the direct owner of the Claims, Pikes Peak
      Energy LLC, has the lawful right to conduct business in the State of
      Colorado, and that the person signing on behalf of PPR has the authority
      to bind PPR to the terms and conditions of this Agreement.

	 	 	 
	 	4. 	
      PPR is purchasing the Shares for its own account for
      investment purposes and not with a view towards distribution and has no
      present arrangement or intention to sell the Shares.

	 	 	 
	 	5. 	
      PPR acknowledge and agrees that the Shares are
      “restricted securities” as defined by Rule 144 of the U.S. Securities and
      Exchange Commission and have not been registered under the Securities Act
      of 1933 as amended and may not be offered or sold in the United States or
      to U.S. Persons unless registered under the Act or an exemption from the
      registration requirements of the Act is available to the reasonable
      satisfaction of BEI.

	 	 	 
	 	6. 	
      PPR has carefully reviewed BEI’s filings with the
      Securities and Exchange Commission, including the most recently filed Form
      10KSB and 10QSB reports. PPR has also had the opportunity to ask and
      receive answers to any and all questions PPR had with respect to BEI, its
      business, management and current financial condition;

	 	 	 
	 	7. 	
      PPR is either an accredited investor as defined by
      Regulation D or is a sophisticated investor, close friend or business
      associate of the control persons of BEI. PPR represents that it has such
      knowledge and expertise in financial and business matters that PPR is
      capable of evaluating the merits and risks involved in an investment in
      the Shares and acknowledges that an investment in the Shares entails a
      number of very significant risks and PPR is able to withstand the
      potential total loss of its investment.

	E. 	
      Option to Purchase Royalty. BEI has the right to
      acquire the Royalty from PPR or any subsequent transferee thereof at any
      time after closing upon SIXTY days notice and the payment of ONE MILLION
      UNITED STATES DOLLARS as adjusted. Option Payments shall be adjusted
      upwards and downwards, as the case may be, on their respective due dates.
      Adjustments shall be by the same percentage as the percentage change, if
      any, in the United States Department of Labor, All Items (the “CPI”),
      published by the BLS for the most recent month immediately preceding a
      payment date for which a preliminary figure is then available using as a
      base the final figure (or preliminary figure if the final figure is not
      yet available) for December 2006. Within THIRTY days following BLS
      publication of the final figure for the most recent month prior to a
      payment date, the applicable purchase price shall be adjusted upwards or
      downwards as described above, but utilizing the final figures and, if
      different, then the difference shall be promptly paid to or refunded, as
      the case may be. The Quitclaim Deed and Royalty Agreement shall be
      recorded in the Clerk and Recorder office of the Teller County, Colorado
      and in any other notice or public filling regarding ownership of the
      Claims.

	 	 
	F. 	
      Taxes. At the request of PPR at any time following
      Closing up to one year from Closing, BEI must, within THIRTY days
      following the request, buy-back from PPR at market value a number of
      shares of BEI equivalent to the taxes payable by PPR to the State of
      Colorado and or the U.S. government up to a maximum of ONE HUNDRED
      FIFTY

Page 3 of 5 

/s/ R.R        /s/
M.O 

		
      THOUSAND UNITED STATES DOLLARS in regard to the FIVE
      MILLION shares of BEI paid to PPR as partial consideration for the
      Claims.

	 	 	 
	G. 	
      Abandonment of Claims. It is the intent of the
      Parties to grant BEI the option to repurchase the Claims for TEN THOUSAND
      UNITED STATES DOLLARS before the maintenance payments have to be made to
      prevent the BLM from declaring the Claims deemed abandoned and forfeited
      for failure to pay the BLM’s required annual maintenance fee. Therefore,
      in the event of BEI intends to abandon the Claims, BEI will notify PPR in
      writing at least SIXTY days before any mining claim maintenance fee
      payments must be made to the BLM to keep the Claims in good standing, and
      PPR will have the right to purchase all of BEI’s right, title and interest
      in the Claims for a payment of US$10,000.00, such payment to be made on or
      before the due date for the maintenance fees.

	 	 	 
	H. 	
      Miscellaneous.

	 	 	 
		1. 	
      Further Documents. Each party at the request of
      the other will promptly execute and deliver any further instruments or
      other papers reasonably necessary to effect the purposes of this
      Agreement.

	 	 	 
		2. 	
      Amendment, Waiver. There shall be no modification,
      amendment, change or alteration of this Agreement which shall be
      recognized as valid and binding on the Parties unless it is reflected in a
      written instrument executed by both Parties. Neither Party shall be
      construed to have waived any of its rights or interests in this Agreement
      due to a failure to assert a claim it has a right to make.

	 	 	 
		3. 	
      Governing Law. This Agreement shall be construed
      and enforced in accordance with the laws of the State of Colorado and the
      federal laws of the United States applicable therein, and the courts of
      the State of Colorado shall have exclusive jurisdiction of any dispute
      arising under this Agreement.

	 	 	 
		4. 	
      Headings. The headings in this Agreement are
      inserted only for convenience and shall not control or affect the meaning
      or construction thereof.

	 	 	 
		5. 	
      Severability. In the event one or more of the
      provisions of this Agreement or any other instrument related hereto is
      held invalid or unenforceable, the other provisions of this Agreement or
      other instruments shall not be affected and shall remain valid and
      enforceable between the parties with respect to its subject
  matter.

	 	 	 
		6. 	
      Entire Agreement, Enurement. This Agreement
      together with its Exhibits constitutes the entire agreement between the
      Parties with regard to the matters contained herein, and is binding on,
      and enures to the benefit of the Parties and their successors and
      permitted assigns.

	 	 	 
		7. 	
      Assignment. Except as expressly permitted by the
      terms of this Agreement, this Agreement may not be assigned in whole or
      part by either Party without the prior consent of the other
  Party.

Page 4 of 5 

/s/ R.R        /s/
M.O 

	8. 	
      Notice. All notices required or permitted in this
      Agreement, in order to be effective, must be delivered in person or mailed
      by certified mail, return receipt requested, and correctly
    addressed:

	 	If to PPR: 	If to BEI: 
	 	  	  
	 	             PIKES
      PEAK RESOURCES INC. 	           
       BUCKINGHAM EXPLORATION, INC. 
	 	             Suite 880,
      609 Granville Street 	           
       1978 Vine Street, Suite 502 
	 	             Vancouver,
      BC V7Y 1G5 	           
       Vancouver, BC V6K 4S1 
	 	             Canada 	           
       Canada 

		
      Notices given in person will be effective upon actual
      receipt and notices sent by certified mail will be deemed effective on the
      10th day following the date upon which it is deposited in the
      mail.

	 	 
	9. 	
      Counterparts. This Agreement may be executed in
      any number of counterparts and by different parties in separate
      counterparts. Each counterpart when so executed shall be deemed to be an
      original and all counterparts together shall constitute one and the same
      agreement.

IN WITNESS WHEREOF, the Parties have caused the
signatures of their authorized representatives to be set forth below: 

	Buckingham Exploration, Inc. 	Pikes Peak Resources Inc. 
	  	  
	                        /s/C.
      Robin
      Relph                               	                       /s/Mark
      Orsmond                                
	By:                  C.
      Robin
      Relph                                   	By:                 Mark
      Orsmond                                     
	Its
                        President                                              	Its
                        President                                              

Page 5 of 5 

/s/ R.R        /s/
M.O 

EXHIBIT A 

To the
Purchase and Sale Agreement Between 
Pikes Peak
Resources Inc. 
and 
Buckingham Exploration, Inc. 
dated effective May
9, 2007. 

PROPERTY 

	Teller County, Colorado 	Unpatented Mining Claims
    

	  	Name of Claim 	Reception No. 	Twp/Rg/Sec. 	BLM Serial No. 
	1. 	MC # 1 	587903 	15S 71 W 25 	CMC 256345 
	2. 	MC # 2 	587904 	“                                                         ”
    	CMC 256346 
	3. 	MC # 3 	587905 	“                                                         ”	CMC 256347 
	4. 	MC # 4 	587906 	“                                                         ”	CMC 256348 
	5. 	MC # 5 	587907 	“                                                         ”
    	CMC 256349 
	6. 	MC # 6 	587908 	“                                                         ”	CMC 256350 
	7. 	MC # 6A 	591475 	“                                                         ”
    	CMC 259049 
	8. 	MC # 7 	589633 	“                                                         ”
    	CMC 256709 
	9. 	MC # 8 	604369 	15S 71 W 31 	  
	10. 	MC # 9 	604370 	“                                                         ”
    	  
	11. 	MC # 10 	604371 	“                                                         ”
    	  
	12. 	MC # 11 	604372 	“                                                         ”
    	  
	13. 	MC # 12 	604373 	“                                                         ”
    	  
	14. 	MC # 13 	604374 	“                                                         ”
    	  
	15. 	MC # 14 	604375 	“                                                         ”
    	  
	16. 	MC # 15 	604376 	“                                                         ”
    	  
	17. 	MC # 16 	604377 	“                                                         ”
    	  
	18. 	MC #17 	604378 	“                                                         ”
    	  
	19. 	MC # 18 	604379 	“                                                         ”
    	  
	20. 	MC # 19 	604380 	15S 71 W 30 	  
	21. 	MC # 20 	604381 	“                                                         ”
    	  
	22. 	MC # 21 	604382 	“                                                         ”
    	  
	23. 	MC # 22 	604383 	“                                                         ”
    	  
	24. 	MC # 23 	604384 	“                                                         ”
    	  
	25. 	MC # 24 	604385 	“                                                         ”
    	  
	26. 	MC # 25 	604386 	“                                                         ”
    	  
	27. 	MC # 26 	604387 	“                                                         ”
    	  
	28. 	MC # 27 	604388 	“                                                         ”
    	  
	29. 	MC # 28 	604389 	“                                                         ”
    	  

A - 1 

/s/ R.R        /s/
M.O 

EXHIBIT B 

To the 
Purchase and Sale Agreement Between 
Pikes Peak
Resources Inc. 
and 
Buckingham Exploration, Inc. 
dated effective May
9, 2007. 

QUITCLAIM DEED AND ROYALTY AGREEMENT 

THIS QUIT CLAIM DEED AND ROYALTY AGREEMENT (this “Agreement”)
is made effective as of ______________ between PPR, a _______________
corporation, whose address is ___________________________ (hereinafter referred
to as “PPR”), and GRANTEE, a ________________ corporation, whose
address is ____________________, (hereinafter referred to as “Grantee”). 

WITNESSETH: 

For and in consideration of good and valuable consideration,
the receipt and sufficiency of which are acknowledged by the Parties, the
Parties agree as follows: 

1.        PPR does by these
presents hereby remise, release and forever quitclaim unto Grantee, and to its
successors and permitted assigns, forever, all right, title, estate and interest
of PPR in and to all those certain unpatented mining claims described in Exhibit
A attached hereto and by this reference made a part hereof (“Property”), subject
to the agreement and reservation of production royalties set forth below. 

2.        PPR hereby
reserves unto itself, its successors and assigns forever, and Grantee agrees to
pay to PPR, a perpetual production royalty of TWO percent of Net Returns
Production Royalty from the sale or other disposition of “Subject Minerals”
produced and sold from the Property (hereafter, the “Production Royalty”),
determined in accordance with the provisions set forth in this Section 1: 

            a.     
  Definitions. The following terms when initially capitalized
will have the definitions used in this Section 1a.: 

                      
(1)        “Sales Price” has the definition
contained in Paragraph 3 of this Agreement. 

                      
(2)        “Allowable Deductions” has the
definition contained in Paragraph 3 of this Agreement. 

                      
(3)        “Net Returns” means an amount
determined by subtracting Allowable Deductions from the Sale Price. 

B-1 of 6 

/s/ R.R        /s/
M.O

                      
(4)        “Subject Minerals” means minerals
and materials of every kind and character whatsoever, and all deposits of all
such materials and minerals, in, upon and under the Property. Subject Minerals
does not include any oil, gas, associated liquid hydrocarbons or coal, but does
include, without limit, all uranium, vanadium, and other fissionable source
materials. 

                      
(5)        “Yellowcake” means U308
concentrate, any chemical compound from which U308 concentrate can be derived,
or equivalent pounds of U308 in a pregnant solution (“Equivalent Pounds”). 

            b.       
Computation of Production Royalty. When Subject Minerals are mined from
the Property and sold by Grantee, Grantee will calculate the Production Royalty
due PPR as follows: (i) The Sales Price shall be determined as set forth in
Paragraph 3 of this Agreement, (ii) Allowable Deductions will be calculated and
subtracted from the Sales Price to determine Net Returns, and (ii) Net Returns
will be multiplied by TWO percent to determine the PPR’s Production Royalty.

            c.       
FOR EXAMPLE 

	Assume a Sale Price of Yellowcake 	$	100,000 	 
	Assume Allowable Deductions of: 	 	10,000 	 
	Net Return from the sale then equals 	 	90,000 	 
	Production Royalty of 2% equals 	 	1,800 	 

            d.       
Sales Price. “Sales Price” has the following meanings with regard to
particular types of Subject Minerals: 

             
(1)        When Yellowcake is produced by an
in situ or heap leaching process, then the Sales Price shall be the actual
proceeds received by Grantee from the of the Yellowcake. If product is not sold
as Yellowcake, but rather a pregnant solution is provided to a purchaser, the
Sales Price shall be established by determining the number of Equivalent Pounds
of Yellowcake contained in the pregnant solution. The number of Equivalent
Pounds shall be determined in accordance with Standard analytical procedures in
the uranium processing industry. If more than on of Yellowcake is made during
any calendar quarter, then, for the purpose of calculating Production Royalty,
the average price received by Grantee from such sales shall be deemed to be the
Sales Price for that quarter. 

                           
(a)        If after milling or beneficiation,
Yellowcake is delivered for further processing to a smelter or other processing
facility owned or controlled by Grantee, or which processes the concentrate for
Grantee on a toll basis, the concentrate shall be deemed sold, for royalty
purposes, when it is delivered to the smelter or facility. In such event,
Grantee will be deemed to have received, as the Sale Price for the Yellowcake, a
sum equal to the fair market value thereof, as determined by TradeTech, LLC’s
Long Term Price at the time it was delivered for further processing, less
deductions for Allowable Deductions. In the event that TradeTech, LLC’s Long
Term Price no longer exists, the PPR shall be paid upon another, similar price
indicator that is also widely recognized and accepted by the uranium industry.

B-2 of 6 

/s/ R.R        /s/
M.O

                           
(b)        With respect to uranium bearing
material, all weights for purposes of the Agreement will be dry weights for the
average price per pound of Yellowcake received by Grantee from the sales of
Yellowcake during the calendar quarter during which the Yellowcake is removed
from the Property for processing or beneficiating.

      
(2)        In all other cases, Sales Price
means the net proceeds actually paid to Grantee, or finally credited to Grantee
in exchange for Subject Minerals. That is, for ores mined by Grantee form the
Property that are not processed or beneficiated for the recovery of uranium, but
are milled for the recovery of contained base or precious metals, then the
value, for purposes of calculating Production Royalty, will be deemed to be the
net purchase received by Grantee from the smelter or other purchaser, for the
concentrate, after the deduction of Allowable Deductions. 

e.        Allowable
Deductions. For Yellowcake, “Allowable Deductions” shall mean transportation
costs to the point of sale and deductions made by the purchaser for sampling,
assaying, penalties and treatment, plus other deductions as more specifically
described in item numbers 3(a) through 3(b) below. 

f.        For ores that are not
Uranium-bearing, “Allowable Deductions” shall mean and include all costs,
expenses and charges of any nature whatsoever that are either paid or incurred
by Grantee for or in connection with mineral concentration, treatment, smelting,
refining or other beneficiation processes or procedures (whether or not
currently know) which are undertaken off of the Property including, without
limitation, costs or expenses paid or incurred for or in connection with
penalties or other processor deductions or for sampling and assaying fees
charged by an umpired, 

             
(3)        all costs, expenses and charges of
any nature whatsoever that are either paid or incurred by Grantee for or in
connection with the transportation of Subject Minerals away from the Property
(f.o.b. the Property and including shipping, freight, transaction taxes,
handling, port, demurrage, security, delay and forwarding expenses) to a mill,
smelter, refinery or other place or places of treatment, storage or sale; 

             
(4)        all costs, expenses and charges of
any nature whatsoever that are either paid or incurred by Grantee for or in
connection with insurance, storage, representation at a refinery, consignment
sale or sales brokerage costs or fees, or tolling or reining charges or
fees,

             
(5)        all sales, use, severance, net
proceeds of mine, excise and any other taxes except income tax which is paid or
incurred by Grantee and which is levied on, measured by or applicable to mineral
production, and (5) any production royalties, production taxes, severance taxes
and sales, privilege and other taxes paid to the United States that are measured
by or based upon production or the value of Subject Minerals produced from the
Property. 

g.        Treatment and
Sale. Grantee shall have the right (but not the obligation) to concentrate,
mill, smelt, refine, upgrade or otherwise process or beneficiate Subject
Minerals mined from the Property, at locations on or off the Property. In the
event that Subject Minerals are concentrated or milled, smelted, refined,
upgraded or otherwise processed or beneficiated in facilities owned or
controlled by Grantee, then Allowable Deductions shall not exceed Allowable
Deductions that would have been paid or 

B-3 of 6  

/s/ R.R        /s/
M.O

incurred by Grantee if the facilities
were owned or controlled by an independent party. No Production Royalty shall be
payable to PPR for or with respect to reasonable quantities of Subject Minerals
that are not sold by Grantee but are used by Grantee for assaying, treatment
amenability, metallurgical or other analytical processes or procedures. 

h.        Commingling.
Grantee shall have the right to mix or commingle, at any location and either
underground or at the surface, any Subject Minerals mined from the Property with
any ores, metals, minerals, or mineral products mined from other lands, provided
that Grantee shall determine the weight or volume of, sample and analyze all
such Subject Minerals, ores, metals, minerals and mineral products before they
are mixed or commingled. Any such determination of weight or volume, sampling
and analysis shall be made in accordance with sound and generally accepted
sampling and analytic practices and procedures. The weight or volume and the
analysis so derived shall be used as the basis of allocation of Royalties
payable to PPR in accordance with this Agreement in the event of a sale by
Grantee of any materials so mixed or commingled.

i.        Statements and
Payments. Each Royalty payment shall be made by wire transfer to an account
for the credit of PPR at a bank designated by PPR in Paragraph 4 of this
Agreement or a single check made payable to a person designated in writing by
PPR as the payee for purposes of payments due to PPR under this Agreement. Each
payment shall be made by Grantee’s check mailed or delivered as above within
THIRTY days after the calendar quarter in which Grantee receives payment of the
purchase price for ores, leachates, solutions or concentrates sold by it and for
which the Royalty is payable according to this Agreement. If above, the Royalty
shall be paid within THIRTY days after the calendar quarter during which the
further processing occurs. Each such payment shall be accompanied by an itemized
statement setting forth all facts and figures weights, analyses and values of
all ores, concentrates, Subject Minerals, and metals produced form the Property
during the Period for which payment is made in order to verify the accuracy of
the amount of the payment. Notwithstanding anything to the contrary in this
Agreement, Grantee shall not be in default for failing to make any payment to
PPR in timely fashion if PPR fails or refuse to give Grantee written notice
designating a bank account or a person to be the payee named on each and every
check to be either wired or sent to PPR. 

          All
statements provided to PPR by Grantee shall be conclusively presumed to be true
and correct after SIXTY days from the end of the period to which such statement
applies unless within the SIXTY day period PPR submits to Grantee a written
exception and claims that Grantee makes adjustment. Failure on the part of PPR
to make a claim against Grantee for an adjustment in the subject period shall
establish the correctness and preclude the filing of later favorable to Grantee
shall be made unless they are made within the prescribed SIXTY day period or
unless in connection with a claim made by PPR. 

j.        Audit. As
stated above in Paragraph 8 of this Agreement, PPR shall have a period of SIXTY
days after PPR’s receipt of each statement to give Grantee notice of any
objection. If PPR fails to object to a particular statement within SIXTY days
after PPR’ receipt thereof then, subject only to the provisions in Paragraph 10
(“Adjustments”) 

B-4 of 6  

/s/ R.R        /s/
M.O

of this Agreement, the accuracy of such
statement and the amount of any payment transmitted therewith shall be
conclusive with respect to PPR. If PPR objects to the accuracy of a particular
statement or the amount of the payment transmitted thereby within SIXTY days
after the statement is received by PPR, a certified public accountant mutually
acceptable to the parties and retained by PPR may promptly audit Grantee’s
relevant books and records at an office selected by Grantee during Grantee’s
normal business hours. Any such audit shall be made at the sole expense of PPR
if the audit determines that they payment in question was accurate to within
three percent (3%). Any such audit shall be made at the sole expense of Grantee
if the audit determines that the payment in question was inaccurate by more than
three percent (3%). In any case, the payment in question shall be adjusted to
reflect the results of the audit. 

k.        Adjustments.
The amounts of any charges, costs or expenses or any adjustments which are
actually made and given to Grantee by a purchaser, shipper, processor or other
creditor that were not taken into account in a statement to PPR which
accompanied a preceding Production Royalty payment shall be taken into account
in determining that amount of the next Production Royalty payment, but no such
charges or adjustments shall otherwise affect the conclusiveness of preceding
statements or payments. 

3.        In the event
Grantee intends to abandon the Property or any portion thereof, it shall first
give to PPR SIXTY days advance written notice of such intention and in such
written notice shall offer to convey the Property to PPR by quitclaim deed at no
cost to PPR. Provided, however, that if Grantee’s notice of abandonment is
delivered to PPR after July 1st of any year, Grantee shall be
obligated to perform the annual assessment work or pay the annual maintenance
fees required to keep the unpatented claims comprising the Property in good
standing for the next assessment year. During the SIXTY day period beginning on
the date of PPR’s receipt of notice, PPR will have the right, but not the
obligation, to accept the offer of reconveyance. PPR will indicate its
acceptance by giving written notice thereof to Grantee. If PPR exercises its
right to accept the reconveyance of the Property, Grantee will promptly execute
and deliver to PPR a deed conveying to PPR all of Grantee’s right, title, estate
and interest in the Property, with a warranty that the Property is free and
clear of any lien or encumbrance created by Grantee or arising from Grantee’s
activities on the Property. If PPR fails to give notice of its acceptance of the
offer of reconveyance within the SIXTY day period described above, Grantee shall
have no obligation to convey the Property to PPR. Together with Grantee’s notice
of abandonment of the Property or a portion thereof, Grantee shall furnish to
PPR a copy of all drilling logs, sample and drill-hole locations, maps and other
noninterpretive factual data which Grantee has developed in connection with
exploration and development of the Property to be abandoned.

B-5 of 6  

/s/ R.R        /s/
M.O

IN WITNESS WHEREOF, the Parties have caused the signatures of
their authorized representatives to be set forth below: 

	______________________________, Inc. 	______________________________, Inc.
  
	 	 
	By: 	By: 
	 	 
	Name: 	Name: 
	 	 
	Title: 	Title: 

STATE OF
______________________) 
                                                                                    
ss. 
COUNTY OF ____________________) 

The foregoing instrument was acknowledged before me this ______
day of ___________, 2007, By ______________________________________. 

Witness my hand and official seal. 

	My commission expires _____________	 
		 Notary Public 
	_______________________________. 	 

STATE OF
______________________) 
                                                                                    
ss. 
COUNTY OF ____________________) 

The foregoing instrument was acknowledged before me this ______
day of ___________, 2007, By ______________________________________. 

Witness my hand and official seal. 

	My commission expires _____________	 
		 Notary Public 
	_______________________________. 	 

B-6 of 6  

/s/ R.R        /s/
M.Owww.EXFILE.com  888.775.4789   MATRITECH, INC.  FORM 8K == EXHIBIT 4.1

    EXHIBIT
      4.1

     

    SECURITIES
      PURCHASE AGREEMENT

     

    This
      SECURITIES PURCHASE AGREEMENT (the “Agreement”), dated as of
      August 30, 2007, is made by and among Matritech, Inc., a corporation organized
      under the laws of the State of Delaware (the “Company”), and
      each of the purchasers (individually, a “Purchaser” and
      collectively the “Purchasers”) set forth on the execution pages
      hereof (each, an “Execution Page” and collectively the
“Execution Pages”).

     

    BACKGROUND

     

    A.  The
      Company and each Purchaser are executing and delivering this Agreement in
      reliance upon the exemption from securities registration afforded by the
      provisions of Regulation D (“Regulation D”), as promulgated by
      the United States Securities and Exchange Commission (the
“SEC”) under the Securities Act of 1933, as amended (the
“Securities Act”).

     

    B.  Upon
      the
      terms and conditions stated in this Agreement, the Company desires to issue
      and
      sell to the Purchasers, and each Purchaser desires to purchase (i) a secured
      promissory note, in the form attached hereto as Exhibit A (collectively,
      including any note or notes issued upon transfer of the secured promissory
      notes, the “Series CNotes”), in the principal
      face amount set forth on the Execution Pages hereof (for each Purchaser, the
      “Subscription Amount”). The Series C Notes are sometimes
      referenced herein as the “Securities” and each of them may
      individually be referred to herein as a
“Security.”

     

    C.  In
      connection with the Closing pursuant to this Agreement, the Company and the
      Collateral Agent will execute and deliver a Second Amended and Restated Security
      Agreement, which amends and restates the Amended and Restated Security Agreement
      dated January 22, 2007, in the form attached hereto as Exhibit B (the
“Security Agreement” and, together with the License Agreement
      (as defined below), the Pledge Agreement (as defined below) and any other
      document securing the Series C Notes, the “Security
      Documents”), such Security Agreement to be in favor of the Collateral
      Agent (as defined herein) for the benefit of all of the Purchasers, the
      purchasers of the 15% Secured Convertible Promissory Notes dated
      January 13, 2006 (the “Series A Notes”) and the purchasers
      of the Series B 15% Secured Convertible Promissory Notes dated January 22,
      2007 (the “Series B Notes”), and to provide that the Company
      has agreed to grant a security interest in certain collateral described in
      the
      Security Documents in order to secure its obligations under the Series C Notes,
      the Series B Notes and the Series A Notes.

     

    D.  In
      connection with the Closing pursuant to this Agreement, the Collateral Agent,
      for itself and the holders of the Series C Notes, Series B Notes and Series
      A
      Notes, together with the Company will execute and deliver a Second Amended
      and
      Restated Contingent License Agreement, which amends and restates the Amended
      and
      Restated Contingent License Agreement dated January 22, 2007, which agreement
      shall provide for the agreement by the Company, under certain circumstances,
      to
      provide a license to certain intellectual property rights to the Collateral
      Agent for the benefit of the holders of the Series C Notes, the holders of
      the
      Series B Notes and the holders of the Series A Notes, in the form attached
      hereto as Exhibit C (the “License Agreement”).

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    E.  The
      Company has entered into an Asset Purchase Agreement (the “Asset
      Purchase Agreement”), dated August 27, 2007, by and among Inverness
      Medical Innovations, Inc. (“Inverness”), Milano Acquisition
      Corp., and the Company, under which the Company has agreed to sell substantially
      all of its assets to Milano Acquisition Corp., in exchange for an initial
      payment of shares of Inverness common stock valued at approximately $36 million
      (the “Inverness Shares”).  After the closing of the
      sale of the Company’s assets contemplated under the Asset Purchase Agreement
      (the “Asset Purchase Closing”), the Company intends to resell
      the Inverness Shares pursuant to a Form S-3 registration statement to be filed
      by Inverness immediately following the Asset Purchase Closing as soon as
      reasonably practicable in order to repay the amounts owed by the Company
      pursuant to the Series A Notes, the Series B Notes and the Series C Notes and
      to
      satisfy the Borrower’s other obligations.

     

    F.  In
      connection with the Asset Purchase Closing, the holders of the Series C Notes
      acknowledge that the Majority Holders of the Series A Notes (as defined in
      the
      Series A Notes) and the Majority Holders of the Series B Notes (as defined
      in
      the Series B Notes) have instructed the Collateral Agent to, immediately prior
      to the Asset Purchase Closing, (i) release the existing liens and security
      interests in the Collateral (as defined in the Security Documents); (ii)
      terminate the existing Security Documents; (iii) terminate the existing UCC-1
      filings made under the Security Documents and file in lieu thereof a new UCC-1
      financing statement in respect of the Inverness Shares pledged as collateral
      pursuant to the Pledge Agreement; (iv) terminate the License Agreement; and
      (v)
      enter into the Pledge Agreement attached hereto as Exhibit D (the
“Pledge Agreement”), pursuant to which the Company agrees to
      (x) pledge that number of Inverness Shares evidenced by a stock certificate
      as
      would, upon the Asset Purchase Closing, have an aggregate value, as provided
      in
      the Asset Purchase Agreement, of 150% of all principal, interest and prepayment
      premiums owed in respect of the Series A Notes, the Series B Notes and the
      Series C Notes (the “Note Payment Amount”) and (y) in the event
      the value of the pledged Inverness Shares decreases to less than 120% of the
      Note Payment Amount for a period exceeding two consecutive trading days at
      any
      time prior to repayment in full of the Series A Notes, Series B Notes and the
      Series C Notes, pledge an additional number of Inverness Shares, valued as
      provided in the Asset Purchase Agreement, such that the aggregate value of
      all
      Inverness shares pledged under the Agreement shall be equal to 150% of the
      Note
      Payment Amount or provide other acceptable substitute collateral, within three
      (3) business days after receipt of written demand from the Majority Holders
      of
      the Series A Notes and the Majority Holders of the Series B
      Notes.  The Purchasers hereby give the same instruction as set forth
      above to the Collateral Agent.

     

    G.  This
      Agreement, the Series C Notes, the License Agreement and the Security Documents
      are collectively referred to herein as the “Transaction
      Documents.”

     

    NOW,
      THEREFORE, in consideration of the premises and mutual covenants contained
      herein and other good and valuable consideration, the receipt and sufficiency
      of
      which are hereby acknowledged, the Company and the Purchasers, intending to
      be
      legally bound, hereby agree as follows:

     

     

     

    
      
         

      

      
        –
2
          –

        
          

        

      

      
         

      

    

    
      	
              1.

            	
              PURCHASE
                AND SALE OF SECURITIES.

            

    

     

    (a)  Purchase
      and Sale of Securities.  Subject to the terms and conditions
      hereof, at the Closing (as defined in Section 1(b) below), the Company shall
      issue and sell to the Purchasers an aggregate principal face amount of
      Securities of $3,500,000 and each Purchaser, severally and not jointly, shall
      purchase from the Company, its respective Subscription Amount.

     

    (b)  The
      Closing.  Subject to the satisfaction (or waiver) of the
      conditions set forth in Sections 6 and 7 below, the closing of the transactions
      contemplated hereby (the “Closing”) shall take place at the
      offices of The Feinberg Law Group, LLC at 57 River Street,
      Suite
      204, Boston, Massachusetts 02481 at 10:00 a.m., Boston, Massachusetts time,
      on
      or before August 30, 2007 or such other time or place as the Company and
      the Purchasers may mutually agree (the “Closing
      Date”).

     

     

    
      	
              2.

            	
              PURCHASER’S
                REPRESENTATIONS AND WARRANTIES.

            

    

     

    Each
      Purchaser severally, but not
      jointly, represents and warrants to the Company as follows:

     

    (a)  Purchase
      for Own Account, Etc.  Such Purchaser is purchasing the Securities
      for such Purchaser’s own account for investment purposes only and not with a
      present view towards the public sale or distribution thereof, except pursuant
      to
      sales that are exempt from the registration requirements of the Securities
      Act
      and/or sales registered under the Securities Act.  Such Purchaser
      understands that such Purchaser must bear the economic risk of this investment
      indefinitely, unless the Securities are registered pursuant to the Securities
      Act and any applicable state securities or blue sky laws or an exemption from
      such registration is available, and that the Company has no present intention
      of
      registering the resale of any such Securities. Notwithstanding anything in
      this
      Section 2(a) to the contrary, by making the representations herein, such
      Purchaser does not agree to hold the Securities for any minimum or other
      specific term and reserves the right to dispose of the Securities at any time
      in
      accordance with or pursuant to a registration statement or an exemption from
      the
      registration requirements under the Securities Act.

     

    (b)  Accredited
      Investor Status.  Such Purchaser is an “Accredited
      Investor” as that term is defined in Rule 501(a) of Regulation
      D.

     

    (c)  Reliance
      on Exemptions.  Such Purchaser understands that the Securities are
      being offered and sold to such Purchaser in reliance upon specific exemptions
      from the registration requirements of United States federal and state securities
      laws and that the Company is relying upon the truth and accuracy of, and such
      Purchaser’s compliance with, the representations, warranties, agreements,
      acknowledgments and understandings of such Purchaser set forth herein in order
      to determine the availability of such exemptions and the eligibility of such
      Purchaser to acquire the Securities.

     

    (d)  Information.  Such
      Purchaser and its counsel, if identified to the Company, have been furnished
      all
      materials relating to the business, finances and operations of the Company
      and
      materials relating to the offer and sale of the Securities which have been
      specifically requested by such Purchaser or its counsel.  Neither such
      inquiries nor any other investigation conducted 

     

     

    
      
         

      

      
        –
3
          –

        
          

        

      

      
         

      

    

    by
      such
      Purchaser, its counsel or any of its representatives shall modify, amend or
      affect such Purchaser’s right to rely on the Company’s representations and
      warranties contained in Section 3 below.  Such Purchaser understands
      that such Purchaser’s investment in the Securities involves a high degree of
      risk.

     

    (e)  Governmental
      Review.  Such Purchaser understands that no United States federal
      or state agency or any other government or governmental agency has passed upon
      or made any recommendation or endorsement of the Securities.

     

    (f)
        Authorization;
      Enforcement.  This Agreement has been duly and validly authorized,
      executed and delivered on behalf of such Purchaser and is the valid and binding
      agreement of such Purchaser enforceable against such Purchaser in accordance
      with its terms, subject to applicable bankruptcy, insolvency, fraudulent
      conveyance, reorganization, moratorium and similar laws affecting creditors’
rights and remedies generally and general principles of equity.

     

    (g)  Residency.  Such
      Purchaser is a resident of, or has principal offices in the jurisdiction set
      forth under such Purchaser’s name on the Execution Page hereto executed by or on
      behalf of such Purchaser.

     

    (h)  No
      Trading in Securities.  Such Purchaser has not offered to sell,
      solicited offers to buy, disposed of, loaned, pledged or granted any right
      with
      respect to the Company’s Common Stock since the date it agreed to learn the
      confidential terms of the transactions contemplated by the Transaction
      Documents.

     

    (i) 
        Beneficial
      Ownership.  Prior to the Closing, such Purchaser is not a
“beneficial owner” of more than 5% of the Common Stock (as defined for purposes
      of Rule 13d-3 of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”)).  Prior to, and as a result of the
      purchase of the Series C Notes at the Closing, such Purchaser is not, and will
      not be an “interested stockholder” as defined in Section 203 of the Delaware
      General Corporation Law, as amended.

     

    (j)       Investment
      Permitted by Terms of Plan.  The investment by the Purchasers in
      the Series C Notes is permitted by the terms and conditions of the U.S. Boston
      Corporation Profit Sharing Plan and will not violate any applicable provisions
      of the Employee Retirement Income Security Act of 1974.

    

     

    Each
      Purchaser’s representations and warranties made in this Article 2 are made
      solely for the purpose of permitting the Company to make a determination that
      the offer and sale of the Securities pursuant to this Agreement comply with
      applicable U.S. federal and state securities laws and not for any other
      purpose.  Accordingly, the Company may not rely on such
      representations and warranties for any other purpose.  No Purchaser
      has made or hereby makes any other representations or warranties, express or
      implied, to the Company in connection with the transactions contemplated
      hereby.

     

     

     

    
 

    
      
         

      

      
        –
4
          –

        
          

        

      

      
         

      

    

    
      	
              3.

            	
              REPRESENTATIONS
                AND WARRANTIES OF THE COMPANY.

            

    

     

    Except
      as set forth on a Disclosure
      Schedule executed and delivered by the Company to each Purchaser (the
“Disclosure Schedule”), the Company represents and warrants to
      each Purchaser as follows:

     

    (a)  Organization
      and Qualification.  The Company and each of its direct and
      indirect subsidiaries (collectively, the “Subsidiaries”) is a
      corporation duly organized and existing in good standing under the laws of
      the
      jurisdiction in which it is incorporated or organized, and has the requisite
      corporate power to own its properties and to carry on its business as now being
      conducted.  The Company and each of its Subsidiaries is duly qualified
      as a foreign corporation to do business and is in good standing in every
      jurisdiction in which the nature of the business conducted by it makes such
      qualification necessary and where the failure so to qualify or be in good
      standing would have a Material Adverse Effect.  For purposes of this
      Agreement, “Material Adverse Effect” means any effect which,
      individually or in the aggregate with all other effects, reasonably would be
      expected to be materially adverse to (i) the Securities; (ii) the ability of
      the
      Company to perform its obligations under this Agreement, the Series C Notes
      or
      the other Transaction Documents; or (iii) the business, operations, properties,
      prospects, condition (financial or otherwise) or results of operations of the
      Company and its Subsidiaries, taken as a whole.

     

    (b)  Authorization;
      Enforcement.  Except as set forth in Section 3(b) of the
      Disclosure Schedule, (i) The Company has the requisite corporate power and
      authority to enter into and perform its obligations under this Agreement, the
      Series C Notes and the other Transaction Documents, and to issue and sell the
      Series C Notes in accordance with the terms hereof and thereof; (ii) the
      execution, delivery and performance of this Agreement, the Series C Notes and
      the other Transaction Documents by the Company and the consummation by it of
      the
      transactions contemplated hereby and thereby (including, without limitation,
      the
      issuance of the Series C Notes) have been duly authorized by the Company’s Board
      of Directors and, except as referenced in Section 7(g) hereof, no further
      consent or authorization of the Company, its Board of Directors, or any
      committee of the Board of Directors is required; and (iii) this Agreement
      constitutes, and, upon execution and delivery by the Company of the other
      Transaction Documents, such Transaction Documents will constitute, valid and
      binding obligations of the Company enforceable against the Company in accordance
      with their terms.

     

    (c)  Charter;
      Bylaws; Stock of Subsidiaries.  The Company has furnished to each
      Purchaser true and correct copies of the Company’s Amended and Restated
      Certificate of Incorporation as amended and as in effect on the date hereof
      (“Certificate of Incorporation”) and the Company’s Amended and
      Restated Bylaws as in effect on the date hereof (the
“Bylaws”).  For purposes of all provisions of this
      Agreement, any document publicly available on the SEC’s EDGAR system shall be
      considered to have been validly “furnished,” “delivered” or “provided” to a
      Purchaser or its counsel, as applicable.  The Company or one of its
      Subsidiaries has the unrestricted right to vote, and (subject to limitations
      imposed by applicable law) to receive dividends and distributions on, all
      capital securities of its Subsidiaries as owned by the Company or any such
      Subsidiary.

     

    (d)  Issuance
      of Securities.  The Series C Notes are duly authorized and, upon
      issuance in accordance with the terms of this Agreement, (i) will be the legal,
      valid and binding 

     

     

     

    
      
         

      

      
        –
5
          –

        
          

        

      

      
         

      

    

    obligations
      of the Company, enforceable in accordance with their terms, except as such
      enforceability may be limited by any applicable bankruptcy, insolvency,
      moratorium or similar laws affecting creditors’ rights generally; (ii) will not
      be subject to rights of first refusal or other similar rights of stockholders
      or
      noteholders of the Company or any other person which have not been waived in
      connection herewith; and (iii) will not impose personal liability on the holder
      thereof.

     

    (e)  No
      Conflicts; Consents.  The execution, delivery and performance of
      this Agreement and the other Transaction Documents by the Company and the
      consummation by the Company of the transactions contemplated hereby and thereby
      (including, without limitation, the issuance of the Series C Notes) will not
      (i)
      result in a violation of the Certificate of Incorporation or Bylaws; (ii)
      conflict with, or constitute a default (or an event that with notice or lapse
      of
      time or both would become a default) under, or give to others any rights of
      termination, amendment (including, without limitation, the triggering of any
      anti-dilution provisions), acceleration or cancellation of, any agreement,
      indenture or instrument to which the Company or any of its Subsidiaries is
      a
      party; or (iii) result in a violation of any law, rule, regulation, order,
      judgment or decree (including United States federal and state securities laws,
      rules and regulations and rules and regulations of any self-regulatory
      organizations to which either the Company or its securities are subject)
      applicable to the Company or any of its Subsidiaries or by which any property
      or
      asset of the Company or any of its Subsidiaries is bound or affected (except,
      with respect to clauses (ii) and (iii), for such conflicts, defaults,
      terminations, amendments, accelerations, cancellations and violations that
      would
      not, individually or in the aggregate, have a Material Adverse
      Effect).  Except (w) for the filing of a Form D with the SEC, (x) as
      may be required for compliance with applicable state securities or “blue sky”
laws, (y) for the filing with the Secretary of the State of Delaware of a new
      UCC-1 financing statement as contemplated in recital paragraph (F) above and
      as
      required in connection with the Pledge Agreement, or (z) as otherwise set forth
      in Section 3(e) of the Disclosure Schedule, the Company is not required
      to obtain any consent, approval, authorization or order of, or make any filing
      or registration with, any court or governmental agency or any regulatory or
      self-regulatory agency or other third party (including, without limitation,
      pursuant to any Material Contract (as defined in Section 3(g) below)) in order
      for it to execute, deliver or perform any of its obligations under this
      Agreement or any of the other Transaction Documents.

     

    (f)  Compliance.  The
      Company is not in violation of its Certificate of Incorporation, Bylaws or
      other
      organizational documents and no Subsidiary is in violation of any of its
      organizational documents.  Except as set forth in Section 3(f)
      of the Disclosure Schedule, neither the Company nor any of its Subsidiaries
      is
      in default (and no event has occurred that with notice or lapse of time or
      both
      would put the Company or any of its Subsidiaries in default) under, nor, to
      the
      knowledge of the Company or any of its Subsidiaries, has there occurred any
      event giving others (with notice or lapse of time or both) any rights of
      termination, amendment, acceleration or cancellation of, any agreement,
      indenture or instrument to which the Company or any of its Subsidiaries is
      a
      party (including, without limitation, the Material Contracts), except for actual
      or possible violations, defaults or rights that would not, individually or
      in
      the aggregate, have a Material Adverse Effect.  The businesses of the
      Company and its Subsidiaries are not being conducted, and shall not be conducted
      so long as any Purchaser owns any of the Securities, in violation of any law,
      ordinance or regulation of any governmental entity, except for possible
      violations the sanctions for which either individually or in the aggregate
      have
      not had and would

     

     

     

     

    
      
         

      

      
        –
6
          –

        
          

        

      

      
         

      

    

    not
      have
      a Material Adverse Effect.  Neither the Company, nor any of its
      Subsidiaries has, nor, to the knowledge of the Company or any of its
      Subsidiaries, has any director, officer, agent, employee or other person acting
      on behalf of the Company or any Subsidiary, in the course of his actions for,
      or
      on behalf of, the Company or any Subsidiary, used any corporate funds for any
      unlawful contribution, gift, entertainment or other unlawful expenses relating
      to political activity, made any direct or indirect unlawful payment to any
      foreign or domestic government official or employee from corporate funds,
      violated or is in violation of any provision of the U.S. Foreign Corrupt
      Practices Act of 1977, or made any bribe, rebate, payoff, influence payment,
      kickback or other unlawful payment to any foreign or domestic government
      official or employee.  The Company and its Subsidiaries possess all
      certificates, authorizations and permits issued by the appropriate federal,
      state, provincial or foreign regulatory authorities that are material to the
      conduct of its business, and neither the Company nor any of its Subsidiaries
      has
      received any notice of proceeding relating to the revocation or modification
      of
      any such certificate, authorization or permit.

     

    (g)  SEC
      Documents, Financial Statements.  Since December 31, 2001, the
      Company has timely filed (within applicable extension periods) all reports,
      schedules, forms, statements and other documents required to be filed by it
      with
      the SEC pursuant to the reporting requirements of the Exchange Act (all of
      the
      foregoing filed prior to the date hereof and all exhibits included therein
      and
      financial statements and schedules thereto and documents incorporated by
      reference therein, the “SEC Documents”).  The Company
      has delivered to each Purchaser true and complete copies of the SEC
      Documents.  As of their respective dates, the SEC Documents complied
      in all material respects with the requirements of the Exchange Act or the
      Securities Act, as the case may be, and the rules and regulations of the SEC
      promulgated thereunder applicable to the SEC Documents, and none of the SEC
      Documents, at the time they were filed with the SEC, 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.  None of
      the statements made in any such SEC Documents is, or has been, required to
      be
      amended or updated under applicable law (except for such statements as have
      been
      amended or updated in subsequent filings made prior to the date
      hereof).  As of their respective dates, the financial statements of
      the Company included in the SEC Documents complied as to form in all material
      respects with applicable accounting requirements and the published rules and
      regulations of the SEC applicable with respect thereto.  Such
      financial statements have been prepared in accordance with U.S. generally
      accepted accounting principles (“GAAP”), consistently applied,
      during the periods involved (except as may be otherwise indicated in such
      financial statements or the notes thereto or, in the case of unaudited interim
      statements, to the extent they may not include footnotes or may be condensed
      or
      summary statements) and fairly present in all material respects the consolidated
      financial position of the Company and its consolidated Subsidiaries as of the
      dates thereof and the consolidated results of their operations and cash flows
      for the periods then ended (subject, in the case of unaudited statements, to
      normal, immaterial year-end audit adjustments).  Except as set forth
      in the financial statements of the Company included in the Select SEC Documents
      (as defined below), the Company has no liabilities, contingent or otherwise,
      other than (i) liabilities incurred in the ordinary course of business with
      non-affiliated third parties subsequent to the date of such financial statements
      and (ii) obligations under contracts and commitments incurred in the ordinary
      course of business with non-affiliated third parties and not required under
      GAAP
      to be reflected in such financial statements, which

     

     

     

     

    
      
         

      

      
        –
7
          –

        
          

        

      

      
         

      

    

    liabilities
      and obligations referred to in clauses (i) and (ii), individually or in the
      aggregate, are not material to the financial condition or operating results
      of
      the Company.  To the extent required by the rules and regulations of
      the SEC applicable thereto, the Select SEC Documents contain a complete and
      accurate list of all material undischarged written or oral contracts,
      agreements, leases or other instruments to which the Company or any Subsidiary
      is a party or by which the Company or any Subsidiary is bound or to which any
      of
      the properties or assets of the Company or any Subsidiary is subject (each,
      a
“Material Contract”).  Except as set forth in the
      Select SEC Documents, none of the Company, its Subsidiaries or, to the best
      knowledge of the Company, any of the other parties thereto is in breach or
      violation of any Material Contract, which breach or violation would have a
      Material Adverse Effect.  For purposes of this Agreement,
“Select SEC Documents” means the Company’s (A) Proxy Statement
      for its 2007 Annual Meeting of Stockholders, (B) Annual Report on Form 10-K
      for
      the fiscal year ended December 31, 2006 (the “2006 Annual
      Report”), (C) Quarterly Reports on Form 10-Q for the fiscal quarters
      ended March 31, 2007 and June 30, 2007, and (D) Current Reports on Form 8-K
      filed since December 31, 2006.

     

    (h)  Internal
      Accounting Controls.  The Company and each of its Subsidiaries
      maintains a system of internal accounting controls sufficient to provide
      reasonable assurance that (i) transactions are executed in accordance with
      management’s general or specific authorizations; (ii) transactions are recorded
      as necessary to permit preparation of financial statements in conformity with
      GAAP and to maintain asset accountability; (iii) access to assets is permitted
      only in accordance with management’s general or specific authorization; and (iv)
      the recorded accountability for assets is compared with the existing assets
      at
      reasonable intervals and appropriate action is taken with respect to any
      differences.  The Company has established disclosure controls and
      procedures (as defined in Exchange Act Rules 13a-15 and 15d-15) for the Company
      and designed such disclosure controls and procedures to ensure that material
      information relating to the Company, including its Subsidiaries, is made known
      to the certifying officers by others within those entities, particularly during
      the period in which the Company’s Annual Report on Form 10-K or Quarterly Report
      on Form 10-Q, as the case may be, is being prepared.  The Company’s
      certifying officers have evaluated the effectiveness of the Company’s controls
      and procedures as of the end of the period covered by the 2006 Annual Report
      and
      the Company’s most recently filed Quarterly Report on Form 10-Q (each such date,
      an “Evaluation Date”).  The Company presented in the
      2006 Annual Report and its most recently filed Quarterly Report on Form 10-Q
      the
      conclusions of the certifying officers about the effectiveness of the disclosure
      controls and procedures based on their evaluations as of the respective
      Evaluation Date.  Since the Evaluation Date for the 2006 Annual
      Report, there have been no significant changes in the Company’s internal
      controls (as such term is defined in Item 307(b) of Regulation S-K under the
      Exchange Act) or, to the Company’s knowledge, in other factors that could
      significantly affect the Company’s internal controls.

     

    (i)  Absence
      of Certain Changes.  Except as set forth in the Select SEC
      Documents, since December 31, 2006, there has been no material adverse change
      and no material adverse development in the business, properties, operations,
      prospects, financial condition or results of operations of the Company and
      its
      Subsidiaries, taken as a whole.  The Company has not taken any steps,
      and does not currently expect to take any steps, to seek protection pursuant
      to
      any bankruptcy or receivership law, nor does the Company or any of its
      Subsidiaries have any 

     

     

     

     

    
      
         

      

      
        –
8
          –

        
          

        

      

      
         

      

    

    knowledge
      or reason to believe that its creditors intend to initiate involuntary
      bankruptcy proceedings with respect to the Company or any of its
      Subsidiaries.

     

    (j)  Transactions
      With Affiliates.  Except as set forth in the Select SEC Documents,
      none of the officers, directors, or employees of the Company or any of its
      Subsidiaries is presently a party to any transaction with the Company or any
      of
      its Subsidiaries (other than for ordinary course services solely in their
      capacity as officers, directors or employees), 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 such officer, director or employee or any
      corporation, partnership, trust or other entity in which any such officer,
      director, or employee has an ownership interest of five percent or more or
      is an
      officer, director, trustee or partner.

     

    (k)  Absence
      of Litigation.  Except as disclosed in the Select SEC Documents,
      there is no action, suit, proceeding, inquiry or investigation before or by
      any
      court, public board, government agency, self-regulatory organization or body
      (including, without limitation, the SEC) pending or, to the knowledge of the
      Company or any of its Subsidiaries, threatened against or affecting the Company,
      any of its Subsidiaries, or any of their respective directors or officers in
      their capacities as such.  There are no facts which, if known by a
      potential claimant or governmental authority, could give rise to a claim or
      proceeding which, if asserted or conducted with results unfavorable to the
      Company or any of its Subsidiaries, could reasonably be expected to have a
      Material Adverse Effect.

     

    (l)
        Intellectual
      Property.  Except for those matters described in the Company’s SEC
      Documents or as otherwise set forth in Section 3(l) of the Disclosure
      Schedule and except for other matters which are not material to the Company’s
      business taken as a whole:

     

    
      	
              (i)  

            	
              No
                “Intellectual Property” (consisting
                of patents, trademarks, service marks, trade dress, trade names and
                corporate names, copyrights; and any registrations, applications
                and
                renewals for any of the foregoing) owned by the Company or its
                Subsidiaries which is necessary for the conduct of the Company’s and each
                of its Subsidiaries’ respective businesses as currently conducted or as
                currently proposed to be conducted is now involved in any cancellation,
                dispute or litigation, and, to the Company’s knowledge, no such action is
                threatened.

            

    

     

    
      	
              (ii)  

            	
              No
                patent owned by the Company or its Subsidiaries is now involved in
                any
                interference, reissue, re-examination or opposition
                proceeding.

            

    

     

    
      	
              (iii)  

            	
              To
                the knowledge of the Company and its Subsidiaries, neither the Company
                nor
                any Subsidiary of the Company infringes or is in conflict with any
                right
                of any other person with respect to any third party Intellectual
                Property.

            

    

     

    
      	
              (iv)  

            	
              Neither
                the Company nor any of its Subsidiaries has received written notice
                of any
                pending conflict with or infringement upon such third party Intellectual
                Property.

            

    

     

     

     

     

    
      
         

      

      
        –
9
          –

        
          

        

      

      
         

      

    

    
      	
              (v)  

            	
              Neither
                the Company nor any of its Subsidiaries has entered into any consent
                agreement, forbearance to sue or settlement agreement with respect
                to the
                validity of the Company’s or its Subsidiaries’ ownership of or right to
                use its Intellectual Property.

            

    

     

    
      	
              (vi)  

            	
              The
                Company and its Subsidiaries have complied, in all material respects,
                with
                their respective contractual obligations relating to the protection
                of the
                Intellectual Property used pursuant to
                licenses.

            

    

     

    
      	
              (vii)  

            	
              To
                the Company’s knowledge, no person is infringing on or violating the
                Intellectual Property owned by the Company which is necessary for
                the
                conduct of Company’s and each of its Subsidiaries’ respective businesses
                as currently conducted or as currently proposed to be
                conducted.

            

    

     

    (m)  Title.  The
      Company and its Subsidiaries have good and marketable title in fee simple to
      all
      real property and good and merchantable title to all personal property owned
      by
      them that is material to the business of the Company and its Subsidiaries,
      in
      each case free and clear of all liens, encumbrances and defects except such
      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 its Subsidiaries.  Any real property and facilities held
      under lease by the Company and its Subsidiaries are held by them under valid,
      subsisting and enforceable leases with such exceptions as are not material
      and
      do not materially interfere with the use made and proposed to be made of such
      property and buildings by the Company and its Subsidiaries.

     

    (n)  Tax
      Status. Except as set forth in the Select SEC Documents or as otherwise set
      forth in Section 3(n) of the Disclosure Schedule, the Company and each of
      its Subsidiaries has made or filed all foreign, U.S. federal, state, provincial
      and local income and all other tax returns, reports and declarations required
      by
      any jurisdiction to which it is subject (unless and only to the extent that
      the
      Company and each of its Subsidiaries has set aside on its books provisions
      reasonably adequate for the payment of all unpaid and unreported taxes) and
      has
      paid all taxes and other governmental assessments and charges that are material
      in amount, shown or determined to be due on such returns, reports and
      declarations, except those being contested in good faith and has set aside
      on
      its books provisions reasonably adequate for the payment of all taxes for
      periods subsequent to the periods to which such returns, reports or declarations
      apply. There are no unpaid taxes in any material amount claimed to be due by
      the
      taxing authority of any jurisdiction, and the officers of the Company know
      of no
      basis for any such claim.  The Company has not executed a waiver with
      respect to any statute of limitations relating to the assessment or collection
      of any foreign, federal, state, provincial or local tax. None of the Company’s
      tax returns is presently being audited by any taxing authority.

     

    (o)  Insurance.  The
      Company and each Subsidiary maintains in full force and effect insurance
      coverage that is customary for comparably situated companies for the business
      being conducted and properties owned or leased by the Company and each
      Subsidiary, and the Company reasonably believes such insurance coverage to
      be
      adequate against all liabilities, claims and risks against which it is customary
      for comparably situated companies to insure. To the Company’s knowledge, no
      default or event has occurred that could give rise to a default under any such
      policy.

     

     

     

     

    
      
         

      

      
        –
10
          –

        
          

        

      

      
         

      

    

    (p)  Solvency.  Based
      on the financial condition of the Company as of the Closing Date, and after
      giving effect to the net proceeds of the transactions contemplated by this
      Agreement, the Company’s fair saleable value of its assets exceeds the amount
      that is currently required to be paid on or in respect of the Company’s existing
      debts and other liabilities (including known contingent
      liabilities).  The Company does not intend to incur debts beyond its
      ability to pay such debts as they mature (taking into account the timing and
      amounts of cash to be payable on or in respect of its debt).

     

    (q)  Anti-Takeover
      Provisions.  The Company and its board of directors have taken all
      necessary action, if any, in order to render inapplicable any control share
      acquisition, business combination, poison pill (including any distribution
      under
      a rights agreement) or other similar anti-takeover provision under its
      Certificate of Incorporation or the laws of the state of its incorporation
      (including, without limitation, Section 203 of the Delaware General Corporation
      Law, as amended) which is or could become applicable to any Purchaser as a
      result of the transactions contemplated by this Agreement, including, without
      limitation, the Company’s issuance of the Securities and any and all Purchaser’s
      ownership of the Securities.

     

    (r)  Acknowledgment
      Regarding Each Purchaser’s Purchase of the Securities.  The
      Company acknowledges and agrees that each Purchaser is acting solely in the
      capacity of arm’s length purchaser with respect to this Agreement and the other
      Transaction Documents and the transactions contemplated hereby and thereby,
      and
      that prior to the Closing no Purchaser is (i) an officer or director of the
      Company; (ii) an “affiliate” of the Company (as defined in Rule 144 under the
      Securities Act (including any successor rule, “Rule 144”)); or
      (iii) a “beneficial owner” of more than 5% of the Common Stock (as defined for
      purposes of Rule 13d-3 of the Exchange Act).  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 or
      the
      other Transaction Documents and the transactions contemplated hereby and
      thereby, and any advice given by a Purchaser or any of its representatives
      or
      agents in connection with this Agreement or the other Transaction Documents
      and
      the transactions contemplated hereby and thereby is merely incidental to such
      Purchaser’s purchase of the Securities.  The Company further
      represents to each Purchaser that the Company’s decision to enter into this
      Agreement and the other Transaction Documents has been based solely on the
      independent evaluation by the Company and its representatives.

     

    (s)  No
      General Solicitation or Integrated Offering.  Neither the Company
      nor any distributor participating on the Company’s behalf in the transactions
      contemplated hereby (if any) nor any person acting for the Company, or any
      such
      distributor, has conducted any “general solicitation” (as such term is defined
      in Regulation D) with respect to any of the Securities being offered
      hereby.  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 require registration of the Securities being offered
      hereby under the Securities Act or cause this offering of Securities to be
      integrated with any prior offering of securities of the Company for purposes
      of
      the Securities Act, which result of such integration would require registration
      under the Securities Act, or any applicable stockholder approval
      provisions.

     

     

     

     

    
      
         

      

      
        –
11
          –

        
          

        

      

      
         

      

    

    (t)  No
      Brokers.  The Company has taken no action that would give rise to
      any claim by any person for brokerage commissions, finder’s fees or similar
      payments by any Purchaser relating to this Agreement or the transactions
      contemplated hereby.

     

    (u)  Disclosure.  All
      information relating to or concerning the Company and/or any of its Subsidiaries
      set forth in this Agreement or provided to the Purchasers pursuant to Section
      2(d) hereof or otherwise in connection with the transactions contemplated hereby
      is true and correct in all material respects and the Company has not omitted
      to
      state any material fact necessary in order to make the statements made herein
      or
      therein, in light of the circumstances under which they were made, not
      misleading.  No event or circumstance has occurred or exists with
      respect to the Company or its Subsidiaries or their respective businesses,
      properties, prospects, operations or financial conditions, which has not been
      publicly disclosed but, under applicable law, rule or regulation, would be
      required to be disclosed by the Company in a registration statement filed on
      the
      date hereof by the Company under the Securities Act with respect to a primary
      issuance of the Company’s securities.

     

    
      	
              4.

            	
              COVENANTS.

            

    

     

    (a)  Best
      Efforts.  The parties shall use their respective best efforts
      timely to satisfy each of the conditions described in Sections 6 and 7 of this
      Agreement.

     

    (b)  Form
      D; Blue Sky Laws; Nonpublic Information; Publicity.  The Company
      shall file with the SEC a Form D with respect to the Securities as required
      under Regulation D.  The Company shall, on or before the Closing Date,
      take such action, if any, as the Company shall reasonably determine is necessary
      to qualify the Securities for sale to each Purchaser pursuant to this Agreement
      under applicable securities or “blue sky” laws of the states of the United
      States or obtain exemption therefrom.    No later than the
      second business day after the Closing Date, the Company shall file a Form 8-K
      with the SEC concerning this Agreement and the transactions contemplated hereby,
      which Form 8-K shall attach this Agreement and its Exhibits as exhibits to
      such
      Form 8-K (the “8-K Filing”).  Except as set forth in
Section 4(b) to the Disclosure Schedules (which shall be deemed
      to
      include any information provided to the Purchasers in the Cash Budget (as
      defined in Section 7(h) hereof) then remaining material and non-public),
      from and after the date of the 8-K Filing, the Company hereby acknowledges
      that
      no Purchaser shall be in possession of any material nonpublic information
      received from the Company, any of its Subsidiaries or, to the best of the
      Company’s knowledge, any of its or their respective directors, officers,
      employees, affiliates, stockholders, agents or representatives.  The
      Company shall not, and shall cause each of its Subsidiaries and its and each
      of
      their respective directors, officers, employees, affiliates, stockholders,
      agents or representatives not to, provide any Purchaser with any material
      nonpublic information regarding the Company or any of its Subsidiaries from
      and
      after the date of the 8-K Filing without the prior express written consent
      of
      such Purchaser; provided, however, that a Purchaser that
      exercises its rights under Section 4(i) (Inspection of Properties and
      Books) hereof shall be deemed to have given such express written
      consent.  In the event the covenant in the preceding sentence is
      breached for any reason, whether or not as a result of the fault or nonfeasance
      of the Company, the Company shall, as promptly as practicable and in no event
      later than the first trading day after becoming aware of such breach, disclose
      all such material nonpublic information to the public in accordance with
      Regulation FD promulgated under the Exchange Act.  Subject to the
      foregoing, neither the Company nor any

     

     

     

    
      
         

      

      
        –
12
          –

        
          

        

      

      
         

      

    

    Purchaser
      shall issue any press releases or any other public statements with respect
      to
      the transactions contemplated hereby; provided, however, that
      the Company shall be entitled, without the prior approval of any Purchaser,
      to
      make any press release or other public disclosure with respect to such
      transactions as is required by applicable law and regulations (provided that
      (a)
      each Purchaser shall be consulted by the Company in connection with any such
      press release or other public disclosure prior to its release and (b) in no
      event will any Purchaser be identified by name in any press release, or other
      public disclosure without the express prior approval of the Purchaser to be
      named).

     

    (c)  Reporting
      Status.  So long as any Purchasers (or any of their respective
      affiliates) beneficially own any of the Securities, the Company shall timely
      file all reports required to be filed with the SEC pursuant to the Exchange
      Act,
      and the Company shall not terminate its status as an issuer required to file
      reports under the Exchange Act even if the Exchange Act or the rules and
      regulations thereunder would permit such termination.

     

    (d)  Use
      of
      Proceeds.  The Company shall use the proceeds from the sale and
      issuance of the Series C Notes for general corporate
      purposes.  Notwithstanding the foregoing, except as set forth on
Section 4(d) of the Disclosure Schedule such proceeds shall not be used
      to (i) pay dividends; (ii) pay for any increase in executive
      compensation or make any loan or other material advance to any officer,
      employee, shareholder, director or other affiliate of the Company, without
      the
      express approval of the Board of Directors acting in accordance with past
      practice; (iii) purchase debt or equity securities of any entity, including
      those issued by the Company (except that the Company is expressly permitted
      to
      (i) repurchase certain warrants issued by it in connection with prior
      financing transactions and (ii) subject to Section 7(k), make repayments or
      other payments in respect of the Series A Notes and/or the Series B Notes),
      except for (A) evidences of indebtedness issued or fully guaranteed by the
      United States of America and having a maturity of not more than one year from
      the date of acquisition, (B) certificates of deposit, notes, acceptances and
      repurchase agreements having a maturity of not more than one year from the
      date
      of acquisition issued by a bank organized in the United States having capital,
      surplus and undivided profits of at least $500,000,000, (C) the highest-rated
      commercial paper having a maturity of not more than one year from the date
      of
      acquisition, and (D) “Money Market” fund shares, or money market accounts fully
      insured by the Federal Deposit Insurance Corporation and sponsored by banks
      and
      other financial institutions, provided that the investments consist principally
      of the types of investments described in clauses (A), (B), or (C) above; or
      (iv)
      make any investment not directly related to the current business of the
      Company.

     

    (e)  Corporate
      Existence.  So long as any Purchasers (or any of their respective
      affiliates) beneficially own any of the Securities, the Company shall maintain
      its corporate existence, and in the event of a merger, consolidation or sale
      of
      all or substantially all of the Company’s assets, the Company shall ensure that
      all its obligations under the Series C Notes are repaid in full in accordance
      with the terms and conditions of the Series C Notes.

     

    (f)  Legal
      Compliance.  The Company shall conduct its business and the
      business of its Subsidiaries in compliance with all laws, ordinances or
      regulations of governmental entities applicable to such businesses, except
      where
      the failure to do so would not have a Material Adverse Effect.

     

     

     

     

     

    
      
         

      

      
        –
13
          –

        
          

        

      

      
         

      

    

    (g)  Redemptions,
      Dividends and Repayments of Indebtedness.  So long as any
      Purchasers (or any of their respective affiliates) beneficially own any of
      the
      Series C Notes, the Company shall not, without first obtaining the written
      approval of the holders of the Series C Notes then outstanding (which approval
      may be given or withheld by such holders in their sole and absolute discretion),
      repurchase, redeem or declare or pay any cash dividend or distribution on any
      shares of capital stock of the Company or repay or prepay any principal of
      or
      interest on indebtedness of the Company other than as expressly set forth on
      Schedule 4(g) hereto or as contemplated in this Agreement (including,
      without limitation, in Section 4(d) hereof).

     

    (h)  Information.  So
      long as any Purchasers (or any of their respective affiliates) beneficially
      own
      any of the Securities, the Company shall furnish to each such Purchaser the
      information the Company must deliver to any holder or to any prospective
      transferee of Securities in order to permit the sale or other transfer of such
      Securities pursuant to Rule 144A of the SEC or any similar rule then in
      effect.

     

    The
      Company shall keep at its principal executive office a true copy of this
      Agreement (as at the time in effect), and cause the same to be available for
      inspection at such office during normal business hours by any holder of
      Securities or any prospective transferee of Securities designated by a holder
      thereof.

     

    (i)  Inspection
      of Properties and Books.  So long as any Purchasers (or any of
      their respective affiliates) beneficially own any of the Securities, each such
      Purchaser and its representatives and agents (collectively, the
“Inspectors”) shall have the right, at such Purchaser’s
      expense, to visit and inspect any of the properties of the Company and of its
      Subsidiaries, to examine the books of account and records of the Company and
      of
      its Subsidiaries, to make or be provided with copies and extracts therefrom,
      to
      discuss the affairs, finances and accounts of the Company and of its
      Subsidiaries with, and to be advised as to the same by, its and their officers,
      employees and independent public accountants (and by this provision the Company
      authorizes such accountants to discuss such affairs, finances and accounts,
      whether or not a representative of the Company is present) all at such
      reasonable times and intervals and to such reasonable extent as the Purchasers
      may desire; provided, however, that each Inspector shall hold
      in confidence and shall not make any disclosure (except to such Purchaser)
      of
      any such information which the Company determines in good faith to be
      confidential, and of which determination the Inspectors are so notified, unless
      (i) the parties mutually determine on a reasonable basis that the disclosure
      of
      such information is necessary to avoid or correct a misstatement or omission
      in
      any Registration Statement, (ii) the release of such information is ordered
      pursuant to a subpoena or other order from a court or government body of
      competent jurisdiction, or (iii) such information has been made generally
      available to the public other than by disclosure in violation of this or any
      other agreement.  Each Purchaser agrees that it shall, upon learning
      that disclosure of such information is sought in or by a court or governmental
      body of competent jurisdiction or through other means, give prompt notice to
      the
      Company and allow the Company, at its expense, to undertake appropriate action
      to prevent disclosure of, or to obtain a protective order for, the information
      deemed confidential.

     

    (j)  Stockholders
      Rights Plan.  No claim shall be made or enforced by the Company or
      any other person that any Purchaser is an “Acquiring Person” under any
      stockholders rights plan or similar plan or arrangement in effect or hereafter
      adopted by the Company, or that any 

     

     

     

     

     

    
      
         

      

      
        –
14
          –

        
          

        

      

      
         

      

    

    Purchaser
      could be deemed to trigger the provisions of any such plan or arrangement,
      by
      virtue of receiving Securities under this Agreement or any other Transaction
      Documents or under any other agreement between the Company and the
      Purchasers.

     

    (k)  Pledge
      of Securities. The Company acknowledges and agrees that the Securities may
      be pledged by any Purchaser in connection with a bona fide margin agreement
      or
      other loan or financing arrangement that is secured by the
      Securities.  The pledge of Securities shall not be deemed to be a
      transfer, sale or assignment of the Securities hereunder, and no Purchaser
      effecting a pledge of Securities shall be required to provide the Company with
      any notice thereof or otherwise make any delivery to the Company pursuant to
      this Agreement or any other Transaction Document.  The Company shall
      execute and deliver such documentation as a pledgee of the Securities may
      reasonably request in connection with a pledge of the Securities to such pledgee
      by a Purchaser.

     

    (l)
        Expenses.  At
      the Closing, the Company shall reimburse the Purchasers for the out-of-pocket
      expenses reasonably incurred by the Purchasers, their affiliates and their
      advisors in connection with the negotiation, preparation, execution and delivery
      of this Agreement and the other Transaction Documents and the consummation
      of
      the transactions contemplated hereby and thereby, including, without limitation,
      the Purchasers’ and their respective affiliates’ and advisors’ reasonable due
      diligence and attorneys’ fees and expenses (the “Expenses”);
provided, however, that the fees of the Purchasers’ outside
      counsel, The Feinberg Law Group, LLC, shall not exceed $27,500
      without the approval of the Company, which approval shall not be unreasonably
      withheld.  The Purchasers’ reasonable out-of-pocket costs and legal
      fees will be paid regardless of whether the transaction closes.

     

    (m)  Restriction
      on Sales.  Until such time that the Company makes the 8-K Filing,
      or otherwise publicly announces the transactions contemplated hereby, or until
      such time that the Purchasers are no longer in possession of any material
      non-public information related to the Cash Budget, the Purchasers will not
      offer
      to sell, solicit offers to buy, dispose of, loan, pledge or grant any right
      with
      respect to the Company’s common stock.

     

    (n)  Execution
      of Pledge Agreement.  Immediately prior to the Asset Purchase
      Closing, the Company shall execute and deliver to the Collateral Agent the
      Pledge Agreement.  In addition, the Company shall use its commercially
      reasonable efforts to give effect to the transactions contemplated by the Pledge
      Agreement.

     

    (o)  Usury
      Notices.  The Company shall co-operate with the Purchasers with
      respect to the filing of any usury notices that the Purchasers may elect to
      file.

     

    (p)  Security
      Interests.  So long as the Purchasers (or any of their respective
      affiliates) beneficially own any of the Series C Notes, the Company shall not,
      without first obtaining the written approval of the Required Holders (as defined
      herein), grant any additional security interests in the Company’s assets other
      than those outstanding on the date hereof.

     

     

    
      	
              5.

            	
              SECURITIES
                TRANSFER MATTERS.

            

    

     

    (a)  Transfer
      or Resale.  Each Purchaser understands that (i) the sale or resale
      of the Securities have not been and are not being registered under the
      Securities Act or any state 

     

     

     

     

     

    
      
         

      

      
        –
15
          –

        
          

        

      

      
         

      

    

    securities
      laws, and the Securities may not be transferred unless (A) the transfer is
      made
      pursuant to and as set forth in an effective registration statement under the
      Securities Act covering the Securities; or (B) such Purchaser shall have
      delivered to the Company an opinion of counsel (which opinion shall be in form,
      substance and scope customary for opinions of counsel in comparable
      transactions) to the effect that the Securities to be sold or transferred may
      be
      sold or transferred pursuant to an exemption from such registration; or (C)
      sold
      under and in compliance with Rule 144; or (D) sold or transferred to an
      affiliate of such Purchaser that agrees to sell or otherwise transfer the
      Securities only in accordance with the provisions of this Section 5(a); and
      (ii)
      neither the Company nor any other person is under any obligation to register
      such Securities under the Securities Act or any state securities
      laws.  Notwithstanding the foregoing or anything else contained herein
      to the contrary, the Securities may be pledged as collateral in connection
      with
      a bona fide margin account or other lending arrangement, provided such pledge
      is
      consistent with applicable laws, rules and regulations.

     

    (b)  Legends.  Each
      Purchaser understands that the Series C Notes may bear a restrictive legend
      in
      substantially the following form:

     

    “The
      securities represented hereby have not been registered under the Securities
      Act
      of 1933, as amended, or the securities laws of any state of the United States
      or
      in any other jurisdiction.  The securities represented hereby may not
      be offered, sold or transferred in the absence of an effective registration
      statement for the securities under applicable securities laws unless offered,
      sold or transferred pursuant to an available exemption from the registration
      requirements of those laws.”

     

    The
      legend set forth above shall be removed and the Company shall issue the
      Securities without such legend to the holder of any such Security upon which
      it
      is stamped, if, unless otherwise required by state securities laws, (i) the
      sale
      of such Security is registered under the Securities Act (including registration
      pursuant to Rule 416 thereunder); (ii) such holder provides the Company with
      an
      opinion of counsel, in form, substance and scope customary for opinions of
      counsel in comparable transactions, to the effect that a public sale or transfer
      of such Security may be made without registration under the Securities Act;
      or
      (iii) such holder provides the Company with reasonable assurances that such
      Security can be sold under Rule 144(k).  In the event the above legend
      is removed from any Security and thereafter the effectiveness of a registration
      statement covering such Security is suspended or the Company determines that
      a
      supplement or amendment thereto is required by applicable securities laws,
      then
      upon reasonable advance written notice to such Purchaser the Company may require
      that the above legend be placed on any such Security that cannot then be sold
      pursuant to an effective registration statement or under Rule 144 and such
      Purchaser shall cooperate in the replacement of such legend.  Such
      legend shall thereafter be removed when such Security may again be sold pursuant
      to an effective registration statement or under Rule 144(k).

     

    (c)  Transfer
      Agent Instruction.  Upon compliance by any Purchaser with the
      provisions of this Section 5 with respect to the transfer of any Securities,
      the
      Company shall permit the transfer of such Securities.  The Company
      shall not give any instructions to its transfer agent with respect to the
      Securities, other than any permissible or required instructions provided

     

     

     

    
      
         

      

      
        –
16
          –

        
          

        

      

      
         

      

    

    in
      this
      Section 5, and the Securities shall otherwise be freely transferable on the
      books and records of the Company as and to the extent provided in this
      Agreement.

     

     

    
      	
              6.

            	
              CONDITIONS
                TO THE COMPANY’S OBLIGATION TO
                SELL.

            

    

     

    The
      obligation of the Company hereunder to issue and sell the Series C Notes to
      each
      Purchaser hereunder is subject to the satisfaction, at or before the Closing
      Date, of each of the following conditions as to such Purchaser, provided that
      such conditions are for the Company’s sole benefit and may be waived by the
      Company at any time in its sole discretion:

     

    (a)  Execution
      of Transaction Documents.  Each Purchaser shall have executed such
      Purchaser’s Execution Page to this Agreement and each other Transaction Document
      to which such Purchaser is a party and delivered the same to the
      Company.

     

    (b)  Payment
      of Purchase Price.  Subject to Section 4(n), each Purchaser shall
      have delivered the full amount of such Purchaser’s Subscription Amount to the
      Company by wire transfer in accordance with the Company’s written wiring
      instructions.

     

    (c)  Representations
      and Warranties True; Covenants Performed.  The representations and
      warranties of each Purchaser shall be true and correct as of the date when
      made
      and as of the Closing Date as though made at that time (except for
      representations and warranties that speak as of a specific date, which
      representations and warranties shall be true and correct as of such date),
      and
      such Purchaser shall have performed, satisfied and complied with the covenants,
      agreements and conditions required by this Agreement to be performed, satisfied
      or complied with by such Purchaser at or prior to the Closing Date.

     

    (d)  No
      Legal Prohibition.  No statute, rule, regulation, executive order,
      decree, ruling, injunction, action or proceeding shall have been enacted,
      entered, promulgated or endorsed by any court or governmental authority of
      competent jurisdiction or any self-regulatory organization having authority
      over
      the matters contemplated hereby which restricts or prohibits the consummation
      of
      any of the transactions contemplated by this Agreement.

     

     

    
      	
              7.

            	
              CONDITIONS
                TO EACH PURCHASER’S OBLIGATION TO
                PURCHASE.

            

    

     

    The
      obligation of each Purchaser hereunder to purchase the Series C Notes for which
      it is subscribing from the Company hereunder is subject to the satisfaction,
      at
      or before the Closing Date, of each of the following conditions, provided that
      such conditions are for each Purchaser’s individual and sole benefit and may be
      waived by any Purchaser as to such Purchaser at any time in such Purchaser’s
      sole discretion:

     

    (a)  Execution
      of Transaction Documents.  The Company shall have executed such
      the Company’s Execution Page to this Agreement and each Transaction Document to
      which the Company is a party and delivered executed originals of the same to
      such Purchaser.  All other parties to the Transaction Documents (other
      than such Purchaser) shall have executed such Transaction Documents to which
      they are a party.  For clarity, the Transaction Documents to be
      delivered to the Purchaser include, without limitation, the Security Agreement
      and the License Agreement.

     

     

     

     

     

     

    
      
         

      

      
        –
17
          –

        
          

        

      

      
         

      

    

    (b)  Delivery
      of Securities.  The Company shall have delivered to each such
      Purchaser a duly executed Series C Note for the Subscription Amount being
      purchased by such Purchaser, registered in such Purchaser’s name.

     

    (c)  Representations
      and Warranties True; Covenants Performed.  The representations and
      warranties of the Company shall be true and correct as of the date when made
      and
      as of the Closing Date as though made at that time (except for representations
      and warranties that speak as of a specific date, which representations and
      warranties shall be true and correct as of such date) and the Company shall
      have
      performed, satisfied and complied with the covenants, agreements and conditions
      required by this Agreement to be performed, satisfied or complied with by the
      Company at or prior to the Closing Date.

     

    (d)  No
      Legal Prohibition.  No statute, rule, regulation, executive order,
      decree, ruling, injunction, action or proceeding shall have been enacted,
      entered, promulgated or endorsed by any court or governmental authority of
      competent jurisdiction or any self-regulatory organization having authority
      over
      the matters contemplated hereby which restricts or prohibits the consummation
      of, any of the transactions contemplated by this Agreement.

     

    (e)  Legal
      Opinion.  Such Purchaser shall have received an opinion of the
      Company’s counsel dated as of the Closing Date in substantially the form
      approved by the Purchasers prior to the Closing.

     

    (f)  No
      Material Adverse Change.  There shall have been no material
      adverse changes and no material adverse developments in the business,
      properties, operations, prospects, condition (financial or otherwise) or results
      of operations of the Company and its Subsidiaries, taken as a whole, since
      the
      date hereof, and no information that is materially adverse to the Company and
      of
      which such Purchaser is not currently aware shall come to the attention of
      such
      Purchaser.

     

    (g)  Corporate
      Approvals.  Such Purchaser shall have received (i) a copy of
      resolutions, duly adopted by the Board of Directors of the Company, which shall
      be in full force and effect at the time of the Closing, authorizing the
      execution, delivery and performance by the Company of this Agreement and the
      other Transaction Documents and the consummation by the Company of the
      transactions contemplated hereby and thereby and providing a determination
      as to
      whether any Purchasers are or will be an “interested stockholder” as defined in
      Section 203 of the Delaware General Corporation Law, as amended, as a result
      of
      the transactions contemplated hereby, certified as such by the Secretary or
      Assistant Secretary of the Company; (ii) consents of the holders of at least
      75%
      of the outstanding Series A Preferred Stock of the Company for the incurrence
      of
      aggregate debt of up to $15,300,000 since March 4, 2005; (iii) consents of
      the
      holders of a majority of outstanding principal balance of the Series A Notes
      to
      the incurrence by the Company of additional debt, including the issuance of
      the
      Series C Notes, and to the pari passu position of the Series C Notes to
      the Series A Notes as to repayment and security; (iv) consents of the holders
      of
      a majority of outstanding principal balance of the Series B Notes to the
      incurrence by the Company of additional debt, including the issuance of the
      Series C Notes, and to the pari passu position of the Series C Notes to
      the Series B Notes or Series B Notes as to repayment and security; and (v)
      such
      other documents as it reasonably requests in connection with the
      Closing.

     

     

     

    
      
         

      

      
        –
18
          –

        
          

        

      

      
         

      

    

    (h)  Cash
      Budget.  The Company shall have delivered to the Purchasers an
      operating budget, satisfactory to the Purchasers, for the period from June
      30,
      2007 to December 31, 2007 (the “Cash Budget”).

     

    (i)  Asset
      Purchase Agreement.  The Company shall have signed a definitive
      asset purchase agreement with Inverness Medical Innovations, Inc. and Milano
      Acquisition Corp. and shall have publicly announced the signing of such
      agreement.

     

    (j)  Other
      Security Documents.  The Collateral Agent shall have provided to
      the Purchasers copies of all filed financing statements and filings with the
      United States Patent and Trademark Office relating to the collateral securing
      the Series C Notes, and such copies shall be certified by the Collateral Agent
      as being (1) true and correct copies of the applicable documents and (2) in
      full
      force and effect.

     

    (k)  Deferral
      of Payments.  The holders of at least a majority of outstanding
      principal balance of the Series A Notes and the Series B Notes shall have agreed
      to defer cash payments of principal and interest on their respective notes
      until
      the Maturity Date (as such term is defined in the Series C Notes) of the Series
      C Notes.

     

     

    
      	
              8.

            	
              COLLATERAL
                AGENCY PROVISIONS.

            

    

     

    (a)  Appointment
      of Collateral Agent.  The Purchasers hereby appoint SDS Capital
      Group SPC, Ltd. (“SDS”) to act as collateral agent (the
“Collateral Agent”) and SDS agrees to act as Collateral Agent
      for the Purchasers, as contemplated herein and in the Security
      Documents.

     

    (b)  Collateral
      Agent Authorized to Enter into Collateral Documents.  Each of the
      Purchasers authorizes the Collateral Agent to enter into the Security Documents
      on its behalf.

     

    (c)  Amendment
      to Security Documents.  The Purchasers holding a majority of the
      total outstanding principal balance of the Series C Notes (the “Required
      Holders”) shall have the right to direct the Collateral Agent, from
      time to time, to consent, on behalf of the Purchasers, to any amendment,
      modification or supplement to or waiver of any provision of any Security
      Document and to release any Collateral (as defined in the Security Documents)
      from any lien or security interest held by the Collateral Agent;
provided, however, that (i) no such direction shall require
      the Collateral Agent to consent to the modification of any provision or portion
      thereof which (in the sole judgment of the Collateral Agent) is intended to
      benefit the Collateral Agent; (ii) the Collateral Agent shall have the right
      to
      decline to follow any such direction if the Collateral Agent shall determine
      in
      good faith that the directed action is not permitted by the terms of any
      Security Document or may not lawfully be taken; and (iii) no such direction
      shall waive or modify any provision of any Security Document, the waiver or
      modification of which expressly requires the consent of all of the Purchasers
      unless all Purchasers consent thereto.  The Collateral Agent may rely
      on any such direction given to it by the Required Holders and shall be fully
      protected in relying thereon, and shall under no circumstances be liable, except
      in circumstances involving the Collateral Agent’s gross negligence or willful
      misconduct as shall have been determined in a final nonappealable judgment
      of a
      court of competent jurisdiction, to any holder of the Series C Notes or any
      other

     

     

     

     

    
      
         

      

      
        –
19
          –

        
          

        

      

      
         

      

    

    person
      or
      entity for taking or refraining from taking action in accordance with any
      direction or otherwise in accordance with any of the Security
      Documents.  For the avoidance of doubt, the undersigned Purchasers,
      themselves the Required Holders, hereby give the Collateral Agent the
      instruction set forth in recital paragraph (F) above.

     

    (d)  Duties
      of Collateral Agent.

     

    (i)  Powers.  The
      Collateral Agent shall have and may exercise such powers under the Security
      Documents as are specifically delegated to the Collateral Agent by the terms
      hereof and thereof, together with such powers as are reasonably incidental
      thereto.  The Collateral Agent shall not have any implied duties or
      any obligations to take any action under the Security Documents except any
      action specifically provided by the Security Documents to be taken by the
      Collateral Agent.

     

    (ii)  Reliance
      on Instructions of Required Holders.  The Collateral Agent shall
      be required to act or to refrain from acting (and shall be fully protected
      in so
      acting or refraining from acting) upon the written instructions of the Required
      Holders, subject to Section 8(c) hereof, and such instructions shall be binding
      upon all the Purchasers; provided, however, that the Collateral Agent
      shall not be required to take any action which the Collateral Agent in good
      faith believes (A) could reasonably be expected to expose it to personal
      liability or (B) is contrary to this Agreement, the Security Documents and
      applicable law.  Notwithstanding anything to the contrary contained
      herein, if the holders of the Series A Notes give the Collateral Agent any
      direction, as provided in Section 8 of the Series A Purchase
      Agreement, by and among the Company and the purchasers party thereto, dated
      as of January 13, 2006, the holders of the Series C Notes party hereto
      acknowledge and agree that (i) such direction shall be
      deemed to be an instruction from the holders of the Series A Notes, the
      Series B Notes and the Series C Notes acting jointly; (ii) the holders of
      the Series C Notes shall not give a conflicting instruction to the Collateral
      Agent pursuant to the provisions of this Agreement; and (iii) if the
      Collateral Agent receives conflicting or inconsistent instructions from the
      holders of the Series B Notes or the Series C Notes, the Collateral Agent
      shall honor the instructions given by the holders of the Series A Notes and
      disregard the instructions given by the holders of the Series B Notes and/or
      the
      holders of the Series C Notes.  In addition, if, in the absence or
      failure to act of the holders of the Series A Notes, the holders of the Series
      B
      Notes give the Collateral Agent any direction, as provided in Section 8 of
      the
      Series B Purchase Agreement, by and among the Company and the purchasers party
      thereto, dated as of January 22, 2007, the holders of the Series C Notes party
      hereto acknowledge and agree that (i) such direction shall be deemed to be
      an
      instruction from the holders of the Series A Notes, the Series B Notes and
      the
      Series C Notes acting jointly; (ii) the holders of the Series C Notes shall
      not
      give a conflicting instruction to the Collateral Agent pursuant to the
      provisions of this Agreement; and (iii) if the Collateral Agent receives
      conflicting or inconsistent instructions from the holders of the Series C Notes,
      the Collateral Agent shall honor the instructions given by the holders of the
      Series B Notes and disregard the instructions given by the holders of the
      holders of the Series C Notes.  Finally, if, in the absence or failure
      to act of the holders of the Series A Notes and the Series B Notes, the holders
      of the Series C Notes give the Collateral Agent any direction, as provided
      in
      this Section 8, such direction shall be deemed to be an instruction from the
      holders of the Series A Notes, the Series B Notes and the Series C Notes acting
      jointly and the holders of the Series C Notes acknowledge and agree that if
      the
      Collateral Agent receives conflicting or inconsistent 

     

     

     

     

     

    
      
         

      

      
        –
20
          –

        
          

        

      

      
         

      

    

    instructions
      from the holders of the Series A Notes or the Series B Notes, the Collateral
      Agent shall honor the instructions given by the holders of the such other Notes
      and disregard the instructions given by the holders of the holders of the Series
      C Notes.

     

    (iii)  Action
      Without Instructions After Event of Default.  Absent written
      instructions from the Required Holders at a time when an Event of Default (as
      defined in the Series C Notes) shall have occurred and be continuing, the
      Collateral Agent may take, but shall have no obligation to take, any and all
      actions under the Security Documents or any of them or otherwise as it shall
      deem to be in the best interests of the Purchasers; provided, however,
      that in the absence of written instructions from the Required Holders, the
      Collateral Agent shall not exercise remedies available to it under any Security
      Document with respect to the Collateral or any part thereof (other than
      preserving, collecting and protecting the Collateral and the proceeds
      thereof).

     

    (iv)  Independent
      Right of Each Purchaser to Instruct Collateral Agent.  The right
      of each Purchaser to instruct the Collateral Agent is the separate and
      individual property of such Purchaser and may be exercised as such Purchaser
      sees fit in its sole discretion and with no liability to any other such
      Purchaser for the exercise or non-exercise thereof.  Without limiting
      the foregoing, the Required Holders shall not be liable under any circumstances
      to any other Purchaser for any action taken or omitted to be taken hereunder
      by
      the Collateral Agent upon written instructions from the Required
      Holders.

     

    (v)
        Relationship
      Between Collateral Agent and Purchasers.  The relationship between
      the Collateral Agent and the Purchasers is and shall be only to the extent
      explicitly provided for herein that of agent and principal and nothing herein
      contained shall be construed to constitute the Collateral Agent a trustee for
      any Purchaser or to impose on the Collateral Agent duties and obligations other
      than those expressly provided for herein.  Without limiting the
      generality of the foregoing, neither the Collateral Agent nor any of its
      directors, officers, employees, partners or agents shall:

     

    (A)  be
      responsible to the other Purchasers for any recitals, representations or
      warranties contained in, or for the execution, validity, genuineness,
      perfection, effectiveness or enforceability of, the Security Documents (it
      being
      expressly understood that any determination of the foregoing is the
      responsibility of each Purchaser),

     

    (B)  be
      responsible to the other Purchasers for the validity, genuineness, perfection,
      effectiveness, enforceability, existence, value or enforcement of any security
      interest in the Collateral (it being expressly understood that any determination
      of the foregoing is the responsibility of each Purchaser),

     

    (C)  be
      under
      any duty to inquire into or pass upon any of the foregoing matters, or to make
      any inquiry concerning the performance by any person or entity of its or their
      obligations under any Security Document (it being expressly understood that
      any
      determination of the foregoing is the responsibility of each
      Purchaser),

     

    (D)  be
      deemed
      to have knowledge of the occurrence of an Event of Default (as defined in either
      the Series B Notes or the Series C Notes), or any event, condition or

     

     

     

     

     

    
      
         

      

      
        –
21
          –

        
          

        

      

      
         

      

    

    circumstance
      the occurrence of which would, with the giving of notice or the passage of
      time
      or both, constitute an Event of Default,

     

    (E)  be
      responsible or liable to the Purchasers for any shortage, discrepancy, damage,
      loss or destruction of any part of the Collateral wherever the same may be
      located regardless of the cause thereof unless the same shall happen solely
      through the gross negligence or willful misconduct of the Collateral Agent
      as
      shall have been determined in a final nonappealable judgment of a court of
      competent jurisdiction,

     

    (F)  have
      any
      liability to the Purchasers for any error or omission or action or failure
      to
      act of any kind made in the settlement, collection or payment in connection
      with
      any of the Security Documents or any of the Collateral or any instrument
      received in payment therefor or for any damage resulting therefrom other than
      as
      a sole result of its own gross negligence or willful misconduct as shall have
      been determined in a final nonappealable judgment of a court of competent
      jurisdiction, or

     

    (G)  in
      any
      event, be liable to the Purchasers as such for any action taken or omitted
      by
      it, absent its gross negligence or willful misconduct as shall have been
      determined in a final nonappealable judgment of a court of competent
      jurisdiction.

     

    (e)  Standard
      of Care.  Each Purchaser agrees with all other Purchasers and the
      Collateral Agent that nothing contained in this Agreement shall be construed
      to
      give rise to, nor shall such Purchaser have, any claims whatsoever against
      the
      Collateral Agent on account of any act or omission to act in connection with
      the
      exercise of any right or remedy of the Collateral Agent with respect to the
      Security Documents or the Collateral in the absence of gross negligence or
      willful misconduct of the Collateral Agent as shall have been determined in
      a
      final nonappealable judgment of a court of competent jurisdiction.

     

    (f)  Collateral
      In Possession of Collateral Agent.  The Collateral Agent shall be
      at liberty to place any of the Collateral, this Agreement, the Security
      Documents and any other instruments, documents or deeds delivered to it pursuant
      to or in connection with any of such documents in any safe deposit box, safe
      or
      receptacle selected by it or with any bank, any company whose business includes
      undertaking the safe custody of documents or any firm of lawyers of good repute
      and the Collateral Agent shall not be responsible for any loss thereby incurred
      unless such loss is solely the result of the Collateral Agent’s gross negligence
      or willful misconduct as shall have been determined in a final nonappealable
      judgment of a court of competent jurisdiction.  The Collateral Agent’s
      books and records shall at all times show that the Collateral is held by the
      Collateral Agent subject to the pledge and lien of the Security
      Documents.

     

    (g)  Agents,
      Officers and Employees of Collateral Agent.  The Collateral Agent
      may execute any of its duties under the Security Documents by or through its
      agents, officers or employees.  Neither the Collateral Agent nor any
      of its agents, officers or employees shall be liable for any action taken or
      omitted to be taken by it or them in good faith, be responsible for the
      consequence of any oversight or error of judgment or answerable for any loss
      unless any of the foregoing shall happen through its or their gross negligence
      or willful misconduct as shall have been determined in a final nonappealable
      judgment of a court of competent jurisdiction.

     

     

     

    
      
         

      

      
        –
22
          –

        
          

        

      

      
         

      

    

    (h)  Appointment
      of Co-Agent.  Whenever the Collateral Agent shall deem it
      necessary or prudent in order either to conform to any law of any jurisdiction
      in which all or any part of the Collateral shall be situated or to make any
      claim or bring any suit with respect to the Collateral or the Security
      Documents, or in the event that the Collateral Agent shall have been requested
      to do so by or on behalf of the Required Holders, the Collateral Agent shall
      execute and deliver a supplemental agreement and all other instruments and
      agreements necessary or proper to constitute a bank or trust company, or one
      or
      more other persons or entities approved by the Collateral Agent, either to
      act
      as co-agent or co-agents with respect to all or any part of the Collateral
      or
      with respect to the Security Documents, jointly with the Collateral Agent or
      any
      successor or successors, or to act as separate agent or agents of any such
      property, in any such case with such powers as may be provided in such
      supplemental agreement, and to vest in such bank, trust company or other persons
      or entities as such co-agent or separate agent, as the case may be, any
      property, title, right or power of the Collateral Agent deemed necessary or
      advisable by the Required Holders or the Collateral Agent.

     

    (i)
        Reliance
      on Certain Documents.  The Collateral Agent shall be entitled to
      rely on any communication, instrument or document believed by it to be genuine
      and correct and to have been signed or sent by the proper person or entity,
      and
      with respect to all legal matters shall be entitled to rely on the advice of
      legal advisors selected by it concerning all matters relating to the Security
      Documents and its duties hereunder and thereunder and otherwise shall rely
      on
      such experts as it deems necessary or desirable, and shall not be liable to
      any
      Purchaser or any other person or entity for the consequences of such reliance
      in
      the absence of gross negligence or willful misconduct as shall have been
      determined in a final nonappealable judgment of a court of competent
      jurisdiction.

     

    (j)
        Collateral
      Agent May Have Separate Relationship with Parties.  The Collateral
      Agent (or any affiliate of the Collateral Agent) may, notwithstanding the fact
      that it is the Collateral Agent, act as a lender to the Company and lend money
      to, and generally engage in any kind of business with such party in the same
      manner and to the same effect as though it were not the Collateral Agent; and
      such business shall not constitute a breach of any obligation of the Collateral
      Agent to the other Purchasers.

     

    (k)  Indemnification
      of Collateral Agent.  Each of the Purchasers, ratably on the basis
      of the respective principal amounts of the Series C Notes outstanding at the
      time of the occurrence giving rise to the below liabilities, losses, etc.,
      agrees to indemnify the Collateral Agent for any and all liabilities, losses,
      damages, penalties, actions, judgments, suits, costs, expenses or disbursements
      of any kind and nature whatsoever that may be imposed on, incurred by or
      asserted against the Collateral Agent in its capacity as the Collateral Agent,
      in any way relating to or arising out of the Security Documents or the
      transactions contemplated hereby or thereby or the enforcement of any of the
      terms hereof or thereof (“Losses”), provided that
      neither the Company nor any Purchaser shall be liable for any of the foregoing
      to the extent they arise from gross negligence or willful misconduct on the
      part
      of the Collateral Agent as shall have been determined in a final nonappealable
      judgment of a court of competent jurisdiction.  This Section 8(k)
      shall survive the termination of this Agreement.  Prior to taking any
      action hereunder as Collateral Agent, the Collateral Agent may require each
      Purchaser to deposit with it sufficient sums as it determines in good faith
      is
      necessary to protect the Collateral Agent for costs and expenses associated
      with
      taking such action, and the Collateral Agent shall have no 

     

     

     

     

    
      
         

      

      
        –
23
          –

        
          

        

      

      
         

      

    

    liability
      hereunder for failure to take such action unless the Purchasers promptly deposit
      such sums.

     

    (l)
        Resignation.  The
      Collateral Agent at any time may resign, upon thirty (30) days’ prior written
      notice, by an instrument addressed and delivered to the Purchasers and the
      Company and may be removed at any time with or without cause upon thirty (30)
      days’ prior written notice, by an instrument in writing duly executed by duly
      authorized signatories of the Required Holders.  The Required Holders
      shall also have the right to appoint a successor to the Collateral Agent upon
      any such resignation or removal, by instrument of substitution complying with
      the requirements of applicable law, or, in the absence of any such requirement,
      without any formality other than appointment and designation in writing, a
      copy
      of which instrument or writing shall be sent to each Purchaser.  Upon
      the making of such appointment and delivery to such successor Collateral Agent
      of the Collateral then held by the retiring Collateral Agent, such successor
      Collateral Agent shall thereupon succeed to and become vested with all the
      rights, powers, privileges and duties conferred hereby and by the Security
      Documents upon the Collateral Agent named herein, and one or more such
      appointments and designations shall not exhaust the right to appoint and
      designate further successor Collateral Agents hereunder.  The retiring
      Collateral Agent shall not be discharged from its duties and obligations
      hereunder until, and the retiring Collateral Agent shall be so discharged when,
      all the Collateral held by the retiring Collateral Agent has been delivered
      to
      the successor Collateral Agent and such successor Collateral Agent shall
      execute, acknowledge and deliver to each holder of the Series C Notes and to
      the
      Company an instrument accepting such appointment.  If no successor
      shall be appointed and approved on or prior to the date of any such resignation,
      the resigning Collateral Agent may apply to any court of competent jurisdiction
      to appoint a successor to act until a successor shall have been appointed by
      the
      Required Holders as above provided.

     

    (m)  Rights
      with Respect to Collateral.

     

    (i)  Each
      Purchaser agrees with all other Purchasers (A) that it shall not, and shall
      not
      attempt to, exercise any rights with respect to its security interest in the
      Collateral, whether pursuant to any other agreement or otherwise (other than
      pursuant to this Agreement), or take or institute any action against the
      Collateral Agent or any of the other Purchasers in respect of the Collateral
      or
      its rights hereunder (other than any such action arising from the breach of
      this
      Agreement) and (B) that such Purchaser has no other rights with respect to
      the
      Collateral other than as set forth in this Agreement and the Security
      Documents.

     

    (ii)  Each
      Purchaser agrees with all other Purchasers and the Collateral Agent that nothing
      contained in this Section 8 shall be construed to give rise to, nor shall such
      Purchaser have, any claims whatsoever against any other Purchaser or the
      Collateral Agent on account of any act or omission to act in connection with
      the
      exercise of any right or remedy of the Collateral Agent or any other Purchaser
      with respect to the Collateral in the absence of gross negligence or willful
      misconduct of such other Purchaser or Collateral Agent, as applicable, as shall
      have been determined in a final nonappealable judgment of a court of competent
      jurisdiction.

     

     

     

     

     

    
      
         

      

      
        –
24
          –

        
          

        

      

      
         

      

    

    
      	
              9.

            	
              GOVERNING
                LAW; MISCELLANEOUS.

            

    

     

    (a)  Governing
      Law; Jurisdiction.  This Agreement shall be governed by and
      construed in accordance with the laws of the State of Delaware applicable to
      contracts made and to be performed in the State of Delaware.  The
      Company and each Purchaser irrevocably consent to the exclusive jurisdiction
      of
      the United States federal courts and the state courts located in the County
      of
      New Castle, the State of Delaware, in any suit or proceeding based on or arising
      under this Agreement or the transactions contemplated hereby and irrevocably
      agree that all claims between the parties in respect of such suit or proceeding
      may be determined in such courts. The Company and each Purchaser irrevocably
      waive the defense of an inconvenient forum to the maintenance of such suit
      or
      proceeding in such forum.  The Company and each Purchaser further
      agree that service of process upon the Company or any Purchaser mailed by first
      class mail shall be deemed in every respect effective service of process upon
      the Company or such Purchaser, as the case may be, in any such suit or
      proceeding.  Nothing herein shall affect the right of the Company or
      any Purchaser to serve process in any other manner permitted by
      law.  The Company and each Purchaser agree that a final non-appealable
      judgment in any such suit or proceeding shall be conclusive and may be enforced
      in other jurisdictions by suit on such judgment or in any other lawful
      manner.

     

    (b)  Counterparts.  This
      Agreement may be executed in two or more counterparts, all of which 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.  This Agreement, once executed by a party, may be delivered to
      the other parties hereto by facsimile transmission of a copy of this Agreement
      bearing the signature of the party so delivering this Agreement.  In
      the event any signature is delivered by facsimile transmission, the party using
      such means of delivery shall cause the manually executed execution page(s)
      hereof to be physically delivered to the other party within five (5) days of
      the
      execution hereof, provided that the failure to so deliver any manually executed
      execution page shall not affect the validity or enforceability of this
      Agreement.

     

    (c)  Construction.  Whenever
      the context requires, the gender of any word used in this Agreement includes
      the
      masculine, feminine or neuter, and the number of any word includes the singular
      or plural.  Unless the context otherwise requires, all references to
      articles and sections refer to articles and sections of this Agreement, and
      all
      references to schedules are to schedules attached hereto, each of which is
      made
      a part hereof for all purposes.  The descriptive head­ings of the
      several articles and sections of this Agreement are inserted for purposes of
      reference only, and shall not affect the meaning or construction of any of
      the
      provisions hereof.

     

    (d)  Severability.  If
      any provision of this Agreement shall be invalid or unenforceable in any
      jurisdiction, such invalidity or unenforceability shall not affect the validity
      or enforceability of the remainder of this Agreement or the validity or
      enforceability of this Agreement in any other jurisdiction.

     

    (e)  Entire
      Agreement; Amendments.  This Agreement and the other Transaction
      Documents (including any schedules and exhibits hereto and thereto) contain
      the
      entire understanding of the Purchasers, the Company, their affiliates and
      persons acting on their behalf with respect to the matters covered herein and
      therein and, except as specifically set forth herein 

     

     

     

     

    
      
         

      

      
        –
25
          –

        
          

        

      

      
         

      

    

    or
      therein, or in any certificate or document contemplated thereby, neither the
      Company nor the Purchasers make any representation, warranty, covenant or
      undertaking with respect to such matters.  No provision of this
      Agreement may be waived other than by an instrument in writing signed by the
      party to be charged with enforcement, and no provision of this Agreement may
      be
      amended other than by an instrument in writing signed by the Company and the
      Purchasers.

     

    (f)
        Notices.  Any
      notices required or permitted to be given under the terms of this Agreement
      shall be in writing and sent by certified or registered mail (return receipt
      requested) or delivered personally, by nationally recognized overnight carrier
      or by confirmed facsimile transmission, and shall be effective five (5) days
      after being placed in the mail, if mailed, or upon receipt or refusal of
      receipt, if delivered personally or by nationally recognized overnight carrier
      or confirmed facsimile transmission, in each case addressed to a party as
      provided herein.  The initial addresses for such communications shall
      be as follows, and each party shall provide notice to the other parties of
      any
      change in such party’s address:

     

    (i)  If
      to the
      Company:

     

    Matritech,
      Inc.

    330
      Nevada Street

    Newton,
      Massachusetts 02460

    Telephone:
      (617) 928-0820

    Facsimile:  (617)
      928-0821

    Attention:  Chief
      Executive Officer

     

    with
      a
      copy simultaneously transmitted by like means (which transmittal shall not
      constitute notice hereunder) to:

     

    Choate,
      Hall & Stewart LLP

    Two
      International Place

    Boston,
      Massachusetts  02110

    Telephone:
      (617) 248-5000

    Facsimile:  (617)
      248-4000

    Attention:  Barbara
      M. Johnson

     

    (ii)    If
      to any Purchaser, to the address set forth under such Purchaser’s name on the
      Execution Page hereto executed by such Purchaser,

     

    with
      a
      copy simultaneously transmitted by like means (which transmittal shall not
      constitute notice hereunder) to:

     

    The
      Feinberg Law Group,
LLC

    57
      River
      Street, Suite 204

    Wellesley,
      Massachusetts  02481

    Telephone:         (781)
      283-5775

    Facsimile:         
        (781) 283-5776

    Attention:           Jeannette
      D. Carneiro

     

     

     

     

    
      
         

      

      
        –
26
          –

        
          

        

      

      
         

      

    

    (g)  Successors
      and Assigns.  This Agreement shall be binding upon and inure to
      the benefit of the parties and their successors and assigns.  Except
      as provided herein, the Company shall not assign this Agreement or any rights
      or
      obligations hereunder.  Any Purchaser may assign or transfer the
      Securities pursuant to the terms of this Agreement and of such Securities,
      or
      assign such Purchaser’s rights hereunder to any other person or
      entity.

     

    (h)  Third
      Party Beneficiaries.  This Agreement is intended for the benefit
      of the parties hereto and their respective permitted successors and assigns,
      and
      is not for the benefit of, nor may any provision hereof be enforced by, any
      other person; provided, however, that Section 4(r) may be
      enforced by any Purchaser’s affiliates and its or their advisors to the extent
      the same is entitled to reimbursement of Expenses pursuant thereto.

     

    (i)
        Survival.  The
      representations and warranties of the Company and the agreements and covenants
      set forth in Sections 3, 4, 5, 8 and 9 hereof shall survive the Closing
      notwithstanding any due diligence investigation conducted by or on behalf of
      any
      Purchaser.  Moreover, none of the representations and warranties made
      by the Company herein shall act as a waiver of any rights or remedies any
      Purchaser may have under applicable U.S. federal or state securities
      laws.

     

    (j)
        Publicity.  The
      Company and each Purchaser shall have the right to approve before issuance
      any
      press releases or SEC filings, or any other public statements with respect
      to
      the transactions contemplated hereby; provided, however, that
      the Company shall be entitled, without the prior approval of the Purchasers,
      to
      make any press release or SEC filings as is required by applicable law and
      regulations (although the Purchasers shall be consulted by the Company in
      connection with any such press release prior to its release, and the Purchasers
      shall be provided with a copy thereof and must provide specific consent to
      the
      use of a Purchaser’s name in connection therewith).

     

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

     

    (l)   Indemnification.  In
      consideration of each Purchaser’s execution and delivery of this Agreement and
      the other Transaction Documents and purchase of the Securities hereunder, and
      in
      addition to all of the Company’s other obligations under this Agreement and the
      other Transaction Documents, from and after the Closing, the Company shall
      defend, protect, indemnify and hold harmless each Purchaser and each other
      holder of the Securities and all of their stockholders, partners, members,
      officers, directors, employees and direct or indirect investors and any of
      the
      foregoing persons’ agents or other representatives (including, without
      limitation, those retained in connection with the transactions contemplated
      by
      this Agreement, collectively, the “Indemnitees”) from and
      against any and all actions, causes of action, suits, claims, losses, costs,
      penalties, fees, liabilities and damages, and expenses in connection therewith
      (irrespective of whether any such Indemnitee is a party to the action for which
      indemnification hereunder is sought), and including reasonable attorneys’ fees
      and disbursements (the “Indemnified Liabilities”), incurred by
      any Indemnitee as a result of, or 

     

     

     

     

     

     

    
      
         

      

      
        –
27
          –

        
          

        

      

      
         

      

    

    arising
      out of, or relating to (i) any misrepresentation or breach of any representation
      or warranty made by the Company in this Agreement, any other Transaction
      Document or any other certificate, instrument or document contemplated hereby
      or
      thereby; (ii) any breach of any covenant, agreement or obligation of the Company
      contained in this Agreement, any other Transaction Document or any other
      certificate, instrument or document contemplated hereby or thereby; or (iii)
      any
      cause of action, suit, claim, order, proceeding or process brought or made
      against such Indemnitee by a third party (including for these purposes a
      derivative action brought on behalf of the Company) and arising out of or
      resulting from (A) the execution, delivery, performance or enforcement of this
      Agreement, any other Transaction Document or any other certificate, instrument
      or document contemplated hereby or thereby, (B) any disclosure made by such
      Purchaser pursuant to Section 4(b) or 4(i) hereof, or (C) the status of such
      Purchaser or holder of the Securities as an investor in the Company;
provided, however, that with respect to clause (iii) above,
      excluding any Indemnified Liabilities (a) resulting from the Indemnitee’s or the
      Purchaser’s own acts of fraud or willful misconduct and (b) resulting from any
      cause of action, suit, claim, order, proceeding or process brought or asserted
      against any Indemnified Party by any investor in or partner, shareholder,
      member, employee or agent of said Indemnified Party.  To the extent
      that the foregoing undertaking by the Company may be unenforceable for any
      reason, the Company shall make the maximum contribution to the payment and
      satisfaction of each of the Indemnified Liabilities which is permissible under
      applicable law.

     

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

     

    (n)  Joint
      Participation in Drafting.  Each party to this Agreement has
      participated in the negotiation and drafting of this Agreement and the other
      Transaction Documents.  As such, the language used herein and therein
      shall be deemed to be the language chosen by the parties hereto to express
      their
      mutual intent, and no rule of strict construction will be applied against any
      party to this Agreement.

     

    (o)  Remedies.  No
      provision of this Agreement or any other Transaction Document providing for
      any
      remedy to a Purchaser shall limit any other remedy which would otherwise be
      available to such Purchaser at law, in equity or otherwise.  Nothing
      in this Agreement or any other Transaction Document shall limit any rights
      any
      Purchaser may have under any applicable federal or state securities laws with
      respect to the investment contemplated hereby.  The Company
      acknowledges that a breach by it of its obligations hereunder will cause
      irreparable harm to the Purchasers by vitiating the intent and purpose of the
      transactions contemplated hereby.  Accordingly, the Company
      acknowledges that the remedy at law for a breach of its obligations hereunder
      (including, but not limited to, its obligations pursuant to Section 5
      hereof)

     

     

     

     

    
      
         

      

      
        –
28
          –

        
          

        

      

      
         

      

    

    will
      be
      inadequate and agrees, in the event of a breach or threatened breach by the
      Company of the provisions of this Agreement (including, but not limited to,
      its
      obligations pursuant to Section 5 hereof), that each Purchaser shall be
      entitled, in addition to all other available remedies, to an injunction
      restraining any breach and requiring immediate issuance and transfer of the
      Securities, without the necessity of showing economic loss and without any
      bond
      or other security being required.

     

    (p)  Knowledge.  As
      used in this Agreement, the term “knowledge” of any person or entity shall mean
      and include such person’s or entity’s or, with respect to the Company, the
      Company’s executive officers’ actual knowledge and that knowledge which a
      reasonably prudent business person could have obtained in the management of
      his
      or her business affairs after making due inquiry and exercising due diligence
      which a prudent business person should have made or exercised, as applicable,
      with respect thereto.

     

    (q)  Exculpation
      Among Purchasers; No “Group”.  Each Purchaser acknowledges that it
      has independently evaluated the merits of the transactions contemplated by
      this
      Agreement and the other Transaction Documents, that it has independently
      determined to enter into the transactions contemplated hereby and thereby,
      that
      it is not relying on any advice from or evaluation by any other Purchaser,
      and
      that it is not acting in concert with any other Purchaser in making its purchase
      of securities hereunder or in monitoring its investment in the
      Company.  The Purchasers and, to its knowledge, the Company agree that
      the Purchasers have not taken any actions that would deem such Purchasers to
      be
      members of a “group” for purposes of Section 13(d) of the Exchange Act, and the
      Purchasers have not agreed to act together for the purpose of acquiring,
      holding, voting or disposing of equity securities of the Company.

     

    [REMAINDER
      OF PAGE LEFT BLANK INTENTIONALLY]

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    
      
         

      

      
        –
29
          –

        
          

        

      

      
         

      

    

     

     

    IN
      WITNESS WHEREOF, the undersigned Purchasers and the Company have caused this
      Securities Purchase Agreement to be duly executed as of the date first above
      written.

     

     

     

    
      	 	MATRITECH,
              INC.	 
	 	 	 	 
	
            	
              By:
                

            	
            	 
	 	 	Name: 
              Stephen D. Chubb	 
	 	 	Title:   
              Chief Executive Officer 	 
	 	 	 	 

    

     

     

    
 

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

     

     

    PURCHASER:

    

    Leon
      Okurowski and Willard Umphrey, as Trustees

    for
      the
      benefit of Leon Okurowski

    

    

    ______________________________________________
Leon
      Okurowski, Trustee

    
 

     

     

     

    ______________________________________________
Willard
      Umphrey, Trustee

     

     

     

     

     

     

    
 

    

    

    ADDRESS: 
                U.S. BOSTON
      CORPORATION PROFIT SHARING PLAN

    LINCOLN
      NORTH

    LINCOLN,
      MASSACHUSETTS 01773

    TEL:
      (781)259-0249

    FAX:
      (781)259-1166

    

    

    SUBSCRIPTION
      AMOUNT:

    

    Aggregate
      Face Amount of Note: $1,750,000

     

     

     

     

     

     

     

     

     

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    PURCHASER:

    

    Leon
      Okurowski and Willard Umphrey, as Trustees

    for
      the
      benefit of Willard Umphrey

    

    

    ______________________________________________

    Leon
      Okurowski, Trustee

    

    

     

     

     

    ______________________________________________
Willard
      Umphrey, Trustee

    

    

    

    ADDRESS:            U.S.
      BOSTON CORPORATION PROFIT SHARING PLAN

    LINCOLN
      NORTH

    LINCOLN,
      MASSACHUSETTS 01773

    TEL:
      (781)259-0249

    FAX:
      (781)259-1166

    

    

    SUBSCRIPTION
      AMOUNT:

    

    Aggregate
      Face Amount of Note: $1,750,000

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00129-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00129-of-00352.parquet"}]]