Document:

Exhibit
4.2

    

    NEITHER
THESE SECURITIES NOR THE SECURITIES ISSUABLE UPON EXERCISE OF THESE SECURITIES
HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE
SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS OR BLUE SKY LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL
REASONABLY SATISFACTORY TO THE COMPANY.

     

    ZIOPHARM
ONCOLOGY, INC.

     

    WARRANT
TO PURCHASE COMMON STOCK

    
      	 
      	 
      	 
      
	
              Warrant
      No. PA2009-[    ]

            	
                

            	
              Original
      Issue Date:
      [                     ],
      2009

            

    

     

    ZIOPHARM
Oncology, Inc., a Delaware corporation (the “Company”), hereby certifies
that, for value received,
[            ] or
its permitted registered assigns (the “Holder”), is entitled to
purchase from the Company up to a total of
[            ]
shares of common stock, $0.001 par value (the “Common Stock”), of the
Company (each such share, a “Warrant Share” and all such
shares, the “Warrant
Shares”) at an exercise price per share equal to $2.04 (as adjusted from
time to time as provided in Section 9 herein, the “Exercise Price”), at any time
and from time to time from on or after the date hereof (the “Trigger Date”) and through
and including 5:30 P.M., New York City time, on
[                 ],
2014 (the “Expiration
Date”), and subject to the following terms and conditions:

    

    This Warrant (this “Warrant”) is being issued in
connection with a private placement of common stock and warrants to purchase
common stock pursuant to Securities Purchase Agreements dated September 9, 2009,
by and among the Company and the Purchasers identified therein (the “Purchase
Agreements”).  This Warrant (this “Warrant”) is one of a series
of similar warrants issued pursuant to that certain Placement Agents’ engagement
letter dated August 7, 2009, by and between the Company and Rodman and Renshaw,
LLC (the “Engagement
Letter”).  All such warrants are referred to herein,
collectively, as the “Warrants.”

     

    1.           Definitions. In
addition to the terms defined elsewhere in this Warrant, capitalized terms that
are not otherwise defined herein have the meanings given to such terms in the
Purchase Agreement.

      

    2.           
Registration of
Warrants.  The Company shall register this Warrant, upon
records to be maintained by the Company for that purpose (the “Warrant Register”), in the
name of the record Holder (which shall include the initial Holder or, as the
case may be, any registered assignee to which this Warrant is permissibly
assigned hereunder) from time to time.  The Company may deem and treat
the registered Holder of this Warrant as the absolute owner hereof for the
purpose of any exercise hereof or any distribution to the Holder, and for all
other purposes, absent actual notice to the contrary.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    3.           Registration of
Transfers. Subject to the restrictions on transfer set forth in Section
4.1 of the Purchase Agreement and compliance with all applicable securities
laws, the Company shall register the transfer of all or any portion of this
Warrant in the Warrant Register, upon (i) surrender of this Warrant, with the
Form of Assignment attached as Schedule 2 hereto
duly completed and signed, to the Company’s transfer agent or to the Company at
its address specified herein and (ii) if the Registration Statement is not
effective, (x) delivery, at the request of the Company, of an opinion of counsel
reasonably satisfactory to the Company to the effect that the transfer of such
portion of this Warrant may be made pursuant to an available exemption from the
registration requirements of the Securities Act and all applicable state
securities or blue sky laws and (y) delivery by the transferee of a written
statement to the Company certifying that the transferee is an “accredited
investor” as defined in Rule 501(a) under the Securities Act and making the
representations and certifications set forth in Section 3.2(b), (c) and (d) of
the Purchase Agreement, to the Company at its address specified in the Purchase
Agreement. Upon any such registration or transfer, a new warrant to purchase
Common Stock in substantially the form of this Warrant (any such new warrant, a
“New Warrant”)
evidencing the portion of this Warrant so transferred shall be issued to the
transferee, and a New Warrant evidencing the remaining portion of this Warrant
not so transferred, if any, shall be issued to the transferring Holder. The
acceptance of the New Warrant by the transferee thereof shall be deemed the
acceptance by such transferee of all of the rights and obligations of a Holder
of a Warrant.

     

    
      	
              4.

            	
              Exercise and Duration
      of Warrants.

            

    

     

    (a)           All
or any part of this Warrant shall be exercisable by the registered Holder at any
time and from time to time on or after the Trigger Date and through and
including 5:30 P.M. New York City time on the Expiration Date. At 5:30 P.M., New
York City time, on the Expiration Date, the portion of this Warrant not
exercised prior thereto shall be and become void and of no value and this
Warrant shall be terminated and no longer outstanding;

    

    (b)           The
Holder may exercise this Warrant by delivering to the Company (i) an exercise
notice, in the form attached as Schedule 1 hereto (the “Exercise Notice”),
appropriately completed and duly signed, (ii) payment of the Exercise Price in
immediately available funds for the number of Warrant Shares as to which this
Warrant is being exercised, and the date such items are delivered to the Company
(as determined in accordance with the notice provisions hereof) is an “Exercise Date.” The delivery
by (or on behalf of) the Holder of the Exercise Notice and the applicable
Exercise Price as provided above shall constitute the Holder’s certification to
the Company that its representations contained in Section 3.2(b), (c) and (d) of
the Purchase Agreement are true and correct as of the Exercise Date as if remade
in their entirety (or, in the case of any transferee Holder that is not a party
to the Purchase Agreement, such transferee Holder’s certification to the Company
that such representations are true and correct as to such assignee Holder as of
the Exercise Date).  The Holder shall not be required to deliver the
original Warrant in order to effect an exercise hereunder.  Execution
and delivery of the Exercise Notice shall have the same effect as cancellation
of the original Warrant and issuance of a New Warrant evidencing the right to
purchase the remaining number of Warrant Shares.

     

    
      
         

      

      
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              5.

            	
              Delivery of Warrant
      Shares.

            

    

    

    (a)           Upon
exercise of this Warrant, the Company shall promptly (but in no event later than
three Trading Days after the Exercise Date) issue or cause to be issued and
cause to be delivered to or upon the written order of the Holder and in such
name or names as the Holder may designate (provided that, if the Registration
Statement is not effective and the Holder directs the Company to deliver a
certificate for the Warrant Shares in a name other than that of the Holder or an
Affiliate of the Holder, it shall deliver to the Company on the Exercise Date an
opinion of counsel reasonably satisfactory to the Company to the effect that the
issuance of such Warrant Shares in such other name may be made pursuant to an
available exemption from the registration requirements of the Securities Act and
all applicable state securities or blue sky laws), a certificate for the Warrant
Shares issuable upon such exercise, free of restrictive legends, unless a
registration statement covering the resale of the Warrant Shares and naming the
Holder as a selling stockholder thereunder is not then effective or the Warrant
Shares are not freely transferable pursuant to Rule 144 under the Securities Act
pursuant to transactions in which paragraph (c)(1) of such rule do not apply.
The Holder, or any Person permissibly so designated by the Holder to receive
Warrant Shares, shall be deemed to have become the holder of record of such
Warrant Shares as of the Exercise Date.  If the Warrant Shares are to
be issued free of all restrictive legends, the Company shall, upon the written
request of the Holder, use its best efforts to deliver, or cause to be
delivered, Warrant Shares hereunder electronically through The Depository Trust
Company or another established clearing corporation performing similar
functions, if available; provided, that, the Company may, but will not be
required to, change its transfer agent if its current transfer agent cannot
deliver Warrant Shares electronically through such a clearing
corporation.

    

    (b)           
If (1) a certificate representing the Warrant Shares is not delivered to the
Holder within three (3) Trading Days of the due exercise of this Warrant by the
Holder and (2) prior to the time such certificate is received by the Holder, the
Holder, or any third party on behalf of the Holder or for the Holder’s account,
purchases (in an open market transaction or otherwise) shares of Common Stock to
deliver in satisfaction of a sale by the Holder of shares represented by such
certificate (a “Buy-In”), then the Company
shall pay in cash to the Holder (for costs incurred either directly by such
Holder or on behalf of a third party) the amount by which the total purchase
price paid for Common Stock as a result of the Buy-In (including brokerage
commissions, if any) exceeds the proceeds received by such Holder as a result of
the sale to which such Buy-In relates.  The Holder shall provide the
Company written notice indicating the amounts payable to the Holder in respect
of the Buy-In and, upon request of the Company, evidence of the amount of such
loss.

      

    6.
           Charges, Taxes and
Expenses. Issuance and delivery of certificates for shares of Common
Stock upon exercise of this Warrant shall be made without charge to the Holder
for any issue or transfer tax, transfer agent fee or other incidental tax or
expense in respect of the issuance of such certificates, all of which taxes and
expenses shall be paid by the Company; provided, however, that the
Company shall not be required to pay any tax which may be payable in respect of
any transfer involved in the registration of any certificates for Warrant Shares
or Warrants in a name other than that of the Holder or an Affiliate thereof. The
Holder shall be responsible for all other tax liability that may arise as a
result of holding or transferring this Warrant or receiving Warrant Shares upon
exercise hereof.

     

    7. 
          Replacement of
Warrant.  If this Warrant is mutilated, lost, stolen or
destroyed, the Company shall issue or cause to be issued in exchange and
substitution for and upon cancellation hereof, or in lieu of and substitution
for this Warrant, a New Warrant, but only upon receipt of evidence reasonably
satisfactory to the Company of such loss, theft or destruction (in such case)
and, in each case, a customary and reasonable indemnity (which shall not include
a surety bond), if requested. Applicants for a New Warrant under such
circumstances shall also comply with such other reasonable regulations and
procedures and pay such other reasonable third-party costs as the Company may
prescribe. If a New Warrant is requested as a result of a mutilation of this
Warrant, then the Holder shall deliver such mutilated Warrant to the Company as
a condition precedent to the Company’s obligation to issue the New
Warrant.

     

    
      
         

      

      
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    8.           Reservation of Warrant
Shares. The Company covenants that it will at all times reserve and keep
available out of the aggregate of its authorized but unissued and otherwise
unreserved Common Stock, solely for the purpose of enabling it to issue Warrant
Shares upon exercise of this Warrant as herein provided, the number of Warrant
Shares which are then issuable and deliverable upon the exercise of this entire
Warrant, free from preemptive rights or any other contingent purchase rights of
persons other than the Holder (taking into account the adjustments and
restrictions of Section 9). The
Company covenants that all Warrant Shares so issuable and deliverable shall,
upon issuance and the payment of the applicable Exercise Price in accordance
with the terms hereof, be duly and validly authorized, issued and fully paid and
nonassessable. The Company will take all such action as may be necessary to
assure that such shares of Common Stock may be issued as provided herein without
violation of any applicable law or regulation, or of any requirements of any
securities exchange or automated quotation system upon which the Common Shares
may be listed.

     

    9.            Certain Adjustments.
The Exercise Price and number of Warrant Shares issuable upon exercise of this
Warrant are subject to adjustment from time to time as set forth in this Section
9.

     

    (a)           
Stock Dividends and
Splits. If the Company, at any time while this Warrant is outstanding,
(i) pays a stock dividend on its Common Stock or otherwise makes a distribution
on any class of capital stock that is payable in shares of Common Stock, (ii)
subdivides its outstanding shares of Common Stock into a larger number of
shares, or (iii) combines its outstanding shares of Common Stock into a smaller
number of shares, then in each such case the Exercise Price shall be multiplied
by a fraction, the numerator of which shall be the number of shares of Common
Stock outstanding immediately before such event and the denominator of which
shall be the number of shares of Common Stock outstanding immediately after such
event. Any adjustment made pursuant to clause (i) of this paragraph shall become
effective immediately after the record date for the determination of
stockholders entitled to receive such dividend or distribution, and any
adjustment pursuant to clause (ii) or (iii) of this paragraph shall become
effective immediately after the effective date of such subdivision or
combination.

     

    (b)           Fundamental
Transactions. If, at any time while this Warrant is
outstanding  (i) the Company effects any merger or consolidation of
the Company with or into another Person, in which the shareholders of the
Company as of immediately prior to the transaction own less than a majority of
the outstanding stock of the surviving entity, (ii) the Company effects any sale
of all or substantially all of its assets or a majority of its Common Stock is
acquired by a third party, in each case, in one or a series of related
transactions, (iii) any tender offer or exchange offer (whether by the Company
or another Person) is completed pursuant to which all or substantially all of
the holders of Common Stock are permitted to tender or exchange their shares for
other securities, cash or property and would result in the shareholders of the
Company immediately prior to such tender offer or exchange offer owning less
than a majority of the outstanding stock after such tender offer or exchange
offer, or (iv) the Company effects any reclassification of the Common Stock or
any compulsory share exchange pursuant to which the Common Stock is effectively
converted into or exchanged for other securities, cash or property (other than
as a result of a subdivision or combination of shares of Common Stock covered by
Section 9(a) above) (in any such case, a “Fundamental Transaction”),
then the Holder shall have the right thereafter to receive, upon exercise of
this Warrant, the same amount and kind of securities, cash or property as it
would have been entitled to receive upon the occurrence of such Fundamental
Transaction if it had been, immediately prior to such Fundamental Transaction,
the holder of the number of Warrant Shares then issuable upon exercise in full
of this Warrant without regard to any limitations on exercise contained herein
(the “Alternate
Consideration”).  The Company shall not effect any such
Fundamental Transaction unless prior to or simultaneously with the consummation
thereof, any successor to the Company, surviving entity or the corporation
purchasing or otherwise acquiring such assets or other appropriate corporation
or entity shall assume the obligation to deliver to the Holder, such Alternate
Consideration as, in accordance with the foregoing provisions, the Holder may be
entitled to purchase and/or receive (as the case may be), and the other
obligations under this Warrant.  The provisions of this paragraph (c)
shall similarly apply to subsequent transactions analogous to a Fundamental
Transaction.

     

    
      
         

      

      
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            (c)           Number of Warrant
Shares. Simultaneously with any adjustment to the Exercise Price pursuant
to paragraph (a) of this Section, the number of Warrant Shares that may be
purchased upon exercise of this Warrant shall be increased or decreased
proportionately, so that after such adjustment the aggregate Exercise Price
payable hereunder for the increased or decreased number of Warrant Shares shall
be the same as the aggregate Exercise Price in effect immediately prior to such
adjustment.

                                                                

    (d)           Calculations. All
calculations under this Section 9 shall be
made to the nearest cent or the nearest 1/100th of a
share, as applicable. The number of shares of Common Stock outstanding at any
given time shall not include shares owned or held by or for the account of the
Company, and the sale or issuance of any such shares shall be considered an
issue or sale of Common Stock.

     

    (e)           Notice of
Adjustments. Upon the occurrence of each adjustment pursuant to this
Section 9, the
Company at its expense will, at the written request of the Holder, compute such
adjustment, in good faith, in accordance with the terms of this Warrant and
prepare a certificate setting forth such adjustment, including a statement of
the adjusted Exercise Price and adjusted number or type of Warrant Shares or
other securities issuable upon exercise of this Warrant (as applicable),
describing the transactions giving rise to such adjustments and showing in
detail the facts upon which such adjustment is based. Upon written request, the
Company will deliver a copy of each such certificate to the Holder and to the
Company’s transfer agent.

     

    10.           Intentionally
Omitted.

    

    11.           Payment of Exercise
Price. The Holder shall pay the Exercise Price in immediately available
funds, or the Holder may, in its sole discretion, satisfy its obligation to pay
the Exercise Price through a “cashless exercise”, in which event the Company
shall issue to the Holder the number of Warrant Shares determined as
follows:

     

    X = Y
[(A-B)/A]

     

    where:

     

    X = the
number of Warrant Shares to be issued to the Holder.

     

    Y = the
total number of Warrant Shares with respect to which this Warrant is being
exercised.

     

    A = the
average of the Closing Sale Prices of the shares of Common Stock (as reported by
Bloomberg Financial Markets) for the five Trading Days ending on the date
immediately preceding the Exercise Date.

     

    
      
         

      

      
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    B = the
Exercise Price then in effect for the applicable Warrant Shares at the time of
such exercise.

     

    For
purposes of this Warrant, “Closing Sale Price” means,
for any security as of any date, the last trade price for such security on the
principal securities exchange or trading market for such security, as reported
by Bloomberg Financial Markets, or, if such exchange or trading market begins to
operate on an extended hours basis and does not designate the last trade price,
then the last trade price of such security prior to 4:00:00 p.m., New York Time,
as reported by Bloomberg Financial Markets, or if the foregoing do not apply,
the last trade price of such security in the over-the-counter market on the
electronic bulletin board for such security as reported by Bloomberg Financial
Markets, or, if no last trade price is reported for such security by Bloomberg
Financial Markets, the average of the bid prices, or the ask prices,
respectively, of any market makers for such security as reported in the "pink
sheets" by Pink Sheets LLC.  If the Closing Sale Price cannot be
calculated for a security on a particular date on any of the foregoing bases,
the Closing Sale Price of such security on such date shall be the fair market
value as mutually determined by the Company and the Holder.  If the
Company and the Holder are unable to agree upon the fair market value of such
security, then the Company shall, within two business days submit via facsimile
(a) the disputed determination of the Warrant Exercise Price to an independent,
reputable investment bank selected by the Company and approved by the Holder or
(b) the disputed arithmetic calculation of the Warrant Shares to the Company's
independent, outside accountant.  The Company shall cause at its
expense the investment bank or the accountant, as the case may be, to perform
the determinations or calculations and notify the Company and the Holder of the
results no later than ten business days from the time it receives the disputed
determinations or calculations. Such investment bank's or accountant's
determination or calculation, as the case may be, shall be binding upon all
parties absent demonstrable error.  All such determinations to be
appropriately adjusted for any stock dividend, stock split, stock combination or
other similar transaction during the applicable calculation period

    

    For
purposes of Rule 144 promulgated under the Securities Act, it is intended,
understood and acknowledged that the Warrant Shares issued in a cashless
exercise transaction shall be deemed to have been acquired by the Holder, and
the holding period for the Warrant Shares shall be deemed to have commenced, on
the date this Warrant was originally issued pursuant to the Purchase Agreement
(provided that the Commission continues to take the position that such treatment
is proper at the time of such exercise).

    

    12.           Intentionally
Omitted.

    

    13.           No Fractional Shares.
No fractional Warrant Shares will be issued in connection with any exercise of
this Warrant.  In lieu of any fractional shares which would otherwise
be issuable, the number of Warrant Shares to be issued shall be rounded up to
the next whole number.

     

    14.           Notices. Any and all
notices or other communications or deliveries hereunder (including, without
limitation, any Exercise Notice) shall be in writing and shall be deemed given
and effective on the earliest of (i) the date of transmission, if such notice or
communication is delivered via facsimile at the facsimile number specified in
the Purchase Agreement prior to 5:30 p.m. (New York City time) on a Trading Day,
(ii) the next Trading Day after the date of transmission, if such notice or
communication is delivered via facsimile at the facsimile number specified in
the Purchase Agreement on a day that is not a Trading Day or later than 5:30
p.m. (New York City time) on any Trading Day, (iii) the Trading Day following
the date of mailing, if sent by nationally recognized overnight courier service
specifying next business day delivery, or (iv) upon actual receipt by the party
to whom such notice is required to be given, if by hand delivery. The address
and facsimile number of a party for such notices or communications shall be as
set forth in the Purchase Agreement unless changed by such party by two Trading
Days’ prior notice to the other party in accordance with this Section
14.

     

    
      
         

      

      
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    15.           Warrant Agent. The
Company shall serve as warrant agent under this Warrant. Upon thirty (30) days’
notice to the Holder, the Company may appoint a new warrant agent. Any
corporation into which the Company or any new warrant agent may be merged or any
corporation resulting from any consolidation to which the Company or any new
warrant agent shall be a party or any corporation to which the Company or any
new warrant agent transfers substantially all of its corporate trust or
shareholders services business shall be a successor warrant agent under this
Warrant without any further act. Any such successor warrant agent shall promptly
cause notice of its succession as warrant agent to be mailed (by first class
mail, postage prepaid) to the Holder at the Holder’s last address as shown on
the Warrant Register.

     

    16.           Miscellaneous.

     

    (a)           The
Holder, solely in such Person's capacity as a holder of this Warrant, shall not
be entitled to vote or receive dividends or be deemed the holder of share
capital of the Company for any purpose, nor shall anything contained in this
Warrant be construed to confer upon the Holder, solely in such Person's capacity
as the Holder of this Warrant, any of the rights of a stockholder of the Company
or any right to vote, give or withhold consent to any corporate action (whether
any reorganization, issue of stock, reclassification of stock, consolidation,
merger, amalgamation, conveyance or otherwise), receive notice of meetings,
receive dividends or subscription rights, or otherwise, prior to the issuance to
the Holder of the Warrant Shares which such Person is then entitled to receive
upon the due exercise of this Warrant. In addition, nothing contained in this
Warrant shall be construed as imposing any liabilities on the Holder to purchase
any securities (upon exercise of this Warrant or otherwise) or as a stockholder
of the Company, whether such liabilities are asserted by the Company or by
creditors of the Company. Notwithstanding this Section 15(a), the Company shall
provide the Holder with copies of the same notices and other information given
to the shareholders of the Company, contemporaneously with the giving thereof to
the shareholders.

     

    (b)           Subject
to the restrictions on transfer set forth on the first page hereof and in
Section 4.1 of the Purchase Agreement, and compliance with applicable securities
laws, this Warrant may be assigned by the Holder. This Warrant may not be
assigned by the Company except to a successor in the event of a Fundamental
Transaction. This Warrant shall be binding on and inure to the benefit of the
parties hereto and their respective successors and assigns. Subject to the
preceding sentence, nothing in this Warrant shall be construed to give to any
Person other than the Company and the Holder any legal or equitable right,
remedy or cause of action under this Warrant. This Warrant may be amended only
in writing signed by the Company and the Holder, or their successors and
assigns.

     

    
      
         

      

      
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    (c)           GOVERNING
LAW; VENUE; WAIVER OF JURY TRIAL. ALL QUESTIONS CONCERNING THE CONSTRUCTION,
VALIDITY, ENFORCEMENT AND INTERPRETATION OF THIS WARRANT SHALL BE GOVERNED BY
AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK
WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAW THEREOF. EACH PARTY HEREBY
IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL
COURTS SITTING IN THE CITY OF NEW YORK, BOROUGH OF MANHATTAN, FOR THE
ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR WITH ANY
TRANSACTION CONTEMPLATED HEREBY OR DISCUSSED HEREIN (INCLUDING WITH RESPECT TO
THE ENFORCEMENT OF ANY OF THE TRANSACTION DOCUMENTS), AND HEREBY IRREVOCABLY
WAIVES, AND AGREES NOT TO ASSERT IN ANY SUIT, ACTION OR PROCEEDING, ANY CLAIM
THAT IT IS NOT PERSONALLY SUBJECT TO THE JURISDICTION OF ANY SUCH COURT, THAT
SUCH SUIT, ACTION OR PROCEEDING IS IMPROPER. EACH PARTY HEREBY IRREVOCABLY
WAIVES PERSONAL SERVICE OF PROCESS AND CONSENTS TO PROCESS BEING SERVED IN ANY
SUCH SUIT, ACTION OR PROCEEDING BY MAILING A COPY THEREOF VIA REGISTERED OR
CERTIFIED MAIL OR OVERNIGHT DELIVERY (WITH EVIDENCE OF DELIVERY) TO SUCH PARTY
AT THE ADDRESS IN EFFECT FOR NOTICES TO IT UNDER THIS AGREEMENT AND AGREES THAT
SUCH SERVICE SHALL CONSTITUTE GOOD AND SUFFICIENT SERVICE OF PROCESS AND NOTICE
THEREOF. NOTHING CONTAINED HEREIN SHALL BE DEEMED TO LIMIT IN ANY WAY ANY RIGHT
TO SERVE PROCESS IN ANY MANNER PERMITTED BY LAW. THE COMPANY HEREBY WAIVES ALL
RIGHTS TO A TRIAL BY JURY. 

     

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

     

    (e)           In
case any one or more of the provisions of this Warrant shall be invalid or
unenforceable in any respect, the validity and enforceability of the remaining
terms and provisions of this Warrant shall not in any way be affected or
impaired thereby, and the parties will attempt in good faith to agree upon a
valid and enforceable provision which shall be a commercially reasonable
substitute therefor, and upon so agreeing, shall incorporate such substitute
provision in this Warrant.

     

    (f)           Except
as otherwise set forth herein, prior to exercise of this Warrant, the Holder
hereof shall not, by reason of by being a Holder, be entitled to any rights of a
stockholder with respect to the Warrant Shares.

     

    [REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK,

    SIGNATURE
PAGE FOLLOWS]

     

    
      
         

      

      
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    IN
WITNESS WHEREOF, the Company has caused this Warrant to be duly executed by its
authorized officer as of the date first indicated above.

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            	 	
                                    ZIOPHARM
      ONCOLOGY, INC

                                  
	 	 
      
	 	
                                    By:

                                  	 
      
	 	 	______________________________________ 
	 	
                                    Name:

                                  	 
      
	 	
                                    Title:

                                  	 
      

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

     

    
      
         

      

      
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    Exhibit
4.2

    

    SCHEDULE
1

    

    FORM OF
EXERCISE NOTICE

    

    (To be
executed by the Holder to exercise the right to purchase shares

    of Common
Stock under the foregoing Warrant)

     

    To:          ZIOPHARM
Oncology, Inc.

    

    (1)           The
undersigned is the Holder of Warrant No. __________ (the “Warrant”) issued by
ZIOPHARM Oncology, Inc. a Delaware corporation (the
“Company”).  Capitalized terms used herein and not otherwise defined
herein have the respective meanings set forth in the Warrant.

    

    (2)           The
undersigned hereby exercises its right to purchase __________ Warrant Shares
pursuant to the Warrant.

      

    (3)           The
Holder intends that payment of the Exercise Price shall be made as (check
one):

    

    o            Cash
Exercise

    

    o            “Cashless
Exercise” under Section 11

    

    (4)           If
the Holder has elected a Cash Exercise, the Holder shall pay the sum of $_______
in immediately available funds to the Company in accordance with the terms of
the Warrant.

    

    (5)           Pursuant
to this Exercise Notice, the Company shall deliver to the Holder _____________
Warrant Shares in accordance with the terms of the Warrant.

     

    Dated:_______________,
_____

     

    Name of
Holder:                                                                           

    

    
      
        
          
            	
                    By:_________________________________________

                  
	
                    Name:
      _______________________________________

                  
	
                    Title:
      _________________________________________

                  

          

        

      

    

    (Signature
must conform in all respects to name of

    Holder as
specified on the face of the Warrant)

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    SCHEDULE
2

    

    ZIOPHARM
ONCOLOGY, INC.

    

    FORM OF
ASSIGNMENT

     

    [To be
completed and signed only upon transfer of Warrant]

     

    FOR VALUE
RECEIVED, the undersigned hereby sells, assigns and transfers unto                             
(the “Transferee” the right represented by the within Warrant to purchase                 
shares of Common Stock of ZIOPHARM Oncology, Inc. (the “Company”) to which the
within Warrant relates and appoints                             
attorney to transfer said right on the books of the Company with full power of
substitution in the premises. In connection therewith, the undersigned
represents, warrants, covenants and agrees to and with the Company
that:

    

    
      	
               
      

            	
              (a)

            	
              the
      offer and sale of the Warrant contemplated hereby is being made in
      compliance with Section 4(1) of the United States Securities Act of 1933,
      as amended (the “Securities Act”) or another valid exemption from the
      registration requirements of Section 5 of the Securities Act and in
      compliance with all applicable securities laws of the states of the United
      States;

            

    

     

    
      	
               
      

            	
              (b)

            	
              the
      undersigned has not offered to sell the Warrant by any form of general
      solicitation or general advertising, including, but not limited to, any
      advertisement, article, notice or other communication published in any
      newspaper, magazine or similar media or broadcast over television or
      radio, and any seminar or meeting whose attendees have been invited by any
      general solicitation or general
advertising;

            

    

     

    
      	
               
      

            	
              (c)

            	
              the
      undersigned has read the Transferee’s investment letter included herewith,
      and to its actual knowledge, the statements made therein are true and
      correct; and

            

    

     

    
      	
               
      

            	
              (d)

            	
              the
      undersigned understands that the Company may condition the transfer of the
      Warrant contemplated hereby upon the delivery to the Company by the
      undersigned or the Transferee, as the case may be, of a written opinion of
      counsel (which opinion shall be in form, substance and scope customary for
      opinions of counsel in comparable transactions) to the effect that such
      transfer may be made without registration under the Securities Act and
      under applicable securities laws of the states of the United
      States.

            

    

     

    
      
        
          
            
              
                	
                        Dated:
                  ,     

                      	 
      	_________________________________________________ 
      
	 
      	 
      	
                        (Signature
      must conform in all respects to name of holder as specified on the face of
      the Warrant)

                      
	 
      	 
      	 
      
	 	 	_________________________________________________ 
	 
      	 
      	
                        Address
      of Transferee

                      
	 
      	 
      	 
      
	 
      	 
      	_________________________________________________ 
      
	 	 	 
	 	 	_________________________________________________ 

              

            

          

        

      

    

     

    
      	
              In
      the presence of:

               

            
	_______________________________________________EXHIBIT
10.1

    

    SECURITIES
PURCHASE AGREEMENT

     

    This
Securities Purchase Agreement (this “Agreement”) is dated as of
September 9, 2009, by and among ZIOPHARM Oncology, Inc, a Delaware corporation
(the “Company”), and
each purchaser identified on the signature pages hereto (each, including its
successors and assigns, a “Purchaser” and collectively,
the “Purchasers”).

     

    RECITALS

     

    A.           The
Company and each Purchaser is executing and delivering this agreement in
reliance upon the exemption from securities registration afforded by Section
4(2) of the Securities Act of 1933, as amended (the “Securities Act”), and Rule
506 of Regulation D (“Regulation D”) as promulgated
by the United States Securities and Exchange Commission under the Securities
Act.

    

    B.           The
Company intends to raise gross proceeds of up to $10,000,000 pursuant to the
issuance and sale of (i) shares of the Common Stock, par value $0.001 per share
(the “Common Stock”),
of the Company (which shares of Common Stock and shall be collectively referred
to herein as the “Shares”), and (ii) and
warrants, in substantially the form attached hereto as Exhibit A (the “Warrants”).

    

    C.           Each
Purchaser, severally and not jointly, wishes to purchase, and the Company wishes
to sell, upon the terms and conditions stated in this Agreement, (i) that
aggregate number of Shares set forth below such Purchaser’s name on the
signature page of this Agreement, and (ii) Warrants to acquire up to that number
of additional shares of Common Stock equal to 100.0% of the number of Shares
purchased by such Purchaser (rounded up to the nearest whole share) (the shares
of Common Stock issuable upon exercise of or otherwise pursuant to the Warrants,
collectively, the “Warrant
Shares”).

    

    D.           The
Company has engaged Rodman & Renshaw, LLC, as its placement agent for the
offering of the Shares and the Warrants on a “reasonable efforts” basis, and
Rodman & Renshaw, LLC has in turn engaged Riverbank Capital Securities, Inc.
and Griffin Securities, Inc. to act as sub-agents in connection with such
offering.

    

    E.           Contemporaneously
with the execution and delivery of this Agreement, the parties hereto are
executing and delivering a Registration Rights Agreement, in the form attached
hereto as Exhibit
B (the “Registration
Rights Agreement”), pursuant to which, among other things, the Company
will agree to provide certain registration rights with respect to the Shares and
the Warrant Shares under the Securities Act and applicable state securities
laws.

    

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

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    ARTICLE
I.

    DEFINITIONS

     

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

     

    “Action” means any action,
suit, inquiry, notice of violation, proceeding (including any partial proceeding
such as a deposition) or investigation pending or, to the Company’s Knowledge,
threatened in writing against or affecting the Company or any of their
respective properties before or by any court, arbitrator, governmental or
administrative agency, regulatory authority (federal, state, county, local or
foreign), stock market, stock exchange or trading facility.

     

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

     

    “Agents’ Representative” means
Rodman & Renshaw, LLC, as representative of the Placement
Agents.

     

    “Business Day” means a day,
other than a Saturday or Sunday, on which banks in New York City are open for
the general transaction of business.

     

    “Buy-In” has the meaning set
forth in Section 4.1(f).

     

    “Closing” means the closing of
the purchase and sale of the Shares and the Warrants pursuant to this
Agreement.

     

    “Closing Date” means the
Trading Day when all of the Transaction Documents have been executed and
delivered by the applicable parties thereto, and all of the conditions set forth
in Sections 2.1, 2.2, 5.1 and 5.2 hereof are satisfied, or such other date as
the parties may agree.

     

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

     

    “Common Stock” has the meaning
set forth in the Recitals, and also includes any securities into which the
Common Stock may hereafter be reclassified or changed.

     

    “Company Counsel” means Maslon
Edelman Borman & Brand, LLP.

    

                          “Company Deliverables” has the
meaning set forth in Section 2.2(a).

    

                          “Company’s Knowledge” means
with respect to any statement made to the knowledge of a party, that the
statement is based upon the actual knowledge of the executive officers of such
party having responsibility for the matter or matters that are the subject of
the statement.

    

    “Control” (including the terms
“controlling”, “controlled by” or “under common control with”) means the
possession, direct or indirect, of the power to direct or cause the direction of
the management and policies of a Person, whether through the ownership of voting
securities, by contract or otherwise.

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    “Disclosure Materials” means
the SEC Reports together with this Agreement and the Schedules to this Agreement
(if any).

     

    “Effective Date” means the
date on which the initial Registration Statement required by Section 2(a) of the
Registration Rights Agreement is first declared effective by the
Commission.

     

    “Environmental Laws” has the
meaning set forth in Section 3.1(l).

     

    “Equity Incentive Plan” means
(i) any equity incentive, stock option or similar plan and (ii) any
other agreement, arrangement, understanding or other document pursuant to which
the Company is obligated to grant or issue Common Stock, including any
securities or instruments convertible into, exchangeable for or otherwise
entitles the holder thereof to receive Common Stock, to current or former
employees in connection with their services to the Company, in each case adopted
or approved by a majority of the non-employee members of the board of directors
of the Company or a majority of the members of a committee of non-employee
directors established.

     

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

     

    “GAAP” means U.S. generally
accepted accounting principles, as applied by the Company on a consistent basis
during the financial periods involved.

     

     “Intellectual Property” has
the meaning set forth in Section 3.1(r).

     

    “Irrevocable Transfer Agent
Instructions” means, with respect to the Company, the Irrevocable
Transfer Agent Instructions, in the form of Exhibit E, executed
by the Company and delivered to and acknowledged in writing by the Transfer
Agent.

     

    “Lien” means any lien, charge,
claim, encumbrance, security interest, right of first refusal, preemptive right
or other restrictions of any kind.

     

     “Material Adverse Effect”
means any of (i) a material and adverse effect on the legality, validity or
enforceability of any Transaction Document, (ii) a material and adverse effect
on the results of operations, assets, prospects, business or financial condition
of the Company and subsidiaries, taken as a whole, or (iii) any material adverse
impairment to the Company's ability to perform in any material respect on a
timely basis its obligations under any Transaction Document.

     

    “Material Permits” has the
meaning set forth in Section 3.1(p).

     

     “New York Courts” means the
state and federal courts sitting in the City of New York, Borough of
Manhattan.

     

    “Outside Date” means five
Trading Days following the date of this Agreement.

     

    “Person” means an individual,
corporation, partnership, limited liability company, trust, business trust,
association, joint stock company, joint venture, sole proprietorship,
unincorporated organization, governmental authority or any other form of entity
not specifically listed herein.

     

    “Placement Agents” means
Rodman & Renshaw, LLC, Riverbank Capital Securities, Inc. and Griffin
Securities, Inc.

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    “Principal Trading Market”
means the Trading Market on which the Common Stock is primarily listed on and
quoted for trading, which, as of the date of this Agreement and the Closing
Date, shall be the NASDAQ Capital Market.

     

    “Purchase Price” means the sum
of (i) the most recently reported consolidated closing bid price per share of
the Company’s Common Stock, as listed on the Principal Trading Market,
immediately preceding the execution and delivery of this Agreement, plus (ii)
$0.125.

     

    “Purchaser Deliverables” has
the meaning set forth in Section 2.2(b).

     

    “Registration Rights
Agreement” has the meaning set forth in the Recitals.

     

    “Registration Statement” means
a registration statement meeting the requirements set forth in the Registration
Rights Agreement and covering the resale by the Purchasers of the Registrable
Securities (as defined in the Registration Rights Agreement).

     

    “Required Approvals” has the
meaning set forth in Section 3.1(e).

     

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

     

    “SEC Reports” has the meaning
set forth in Section 3.1(h).

     

    “Secretary’s Certificate” has
the meaning set forth in Section 2.2(a)(vii).

     

    “Securities” mean the Shares,
the Warrants and the Warrant Shares issued pursuant to this
Agreement.

     

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

     

    “Short Sales” include, without
limitation, all “short sales” as defined in Rule 200 promulgated under
Regulation SHO under the Exchange Act, whether or not against the box, and all
types of direct and indirect stock pledges, forward sale contracts, options,
puts, calls, short sales, swaps, “put equivalent positions” (as defined in Rule
16a-1(h) under the Exchange Act) and similar arrangements (including on a total
return basis), and sales and other transactions through non-US broker dealers or
foreign regulated brokers.

     

    “Subscription Amount” means
with respect to each Purchaser, the aggregate amount to be paid for the Shares
and the related Warrants purchased hereunder as indicated on such Purchaser’s
signature page to this Agreement next to the heading “Purchase Price
(Subscription Amount)”.

     

    “Trading Affiliate” has the
meaning set forth in Section 3.2(g).

     

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

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    “Trading Market” means
whichever of the New York Stock Exchange, the American Stock Exchange, the
NASDAQ Global Select Market, the NASDAQ Global Market, the NASDAQ Capital Market
or the OTC Bulletin Board on which the Common Stock is listed or quoted for
trading on the date in question.

     

    “Transaction Documents” means
this Agreement, the schedules and exhibits attached hereto, the Warrants, the
Registration Rights Agreement, the Irrevocable Transfer Agent Instructions and
any other documents or agreements executed in connection with the transactions
contemplated hereunder.

     

    “Transfer Agent” means
American Stock Transfer and Trust Company or any successor transfer agent for
the Company.

     

    “Warrants” has the meaning set
forth in the Preamble to this Agreement.  The Placement Agents and/or
their designees are also receiving placement agent warrants as compensation for
services rendered in connection with the transactions set forth herein, which
warrants shall also constitute “Warrants” for all purposes
hereunder.

     

    ARTICLE
II.

    PURCHASE
AND SALE

     

    2.1 Closing.  (a)  Subject
to the terms and conditions set forth in this Agreement, at the Closing, the
Company shall issue and sell to each Purchaser, and each Purchaser shall,
severally and not jointly, purchase from the Company, such number of Shares of
Common Stock equal to the quotient resulting from dividing (i) the Subscription
Amount for such Purchaser, as indicated below such Purchaser’s name on the
signature page of this Agreement by (ii) the Purchase Price, rounded down to the
nearest whole Share. In addition, each Purchaser shall receive a Warrant to
purchase a number of Warrant Shares equal to 100.0% of the number of Shares
purchased by such Purchaser, as indicated below such Purchaser’s name on the
signature page of this Agreement, rounded down to the nearest whole Warrant
Share. The Warrants shall have an exercise price equal to 120% of the Purchase
Price and shall be exercisable at any time on or prior to the fifth anniversary
of the date of issuance.

     

    (b)    Each
Purchaser must complete and return a duly executed, unaltered copy of this
Agreement (including without limitation the completed Accredited Investor
Questionnaire and the Stock Certificate Questionnaire included as Exhibits C-1 and
C-2 hereto,
respectively) to the Agents’ Representative. The Company and the Agents’
Representative retain complete discretion to accept or reject any subscription
unless and until the Company executes a counterpart to this Agreement that
includes such Purchaser’s signature.  Within five Business Days after
the execution and delivery of this Agreement by Purchaser and the Company, each
Purchaser shall deposit the amount of readily available funds equal to such
Purchaser’s Subscription Amount in a segregated escrow account (the “Escrow Account”) with an
escrow agent designated by the Agents’ Representative (the “Escrow Agent”) or, if
directed by the Company and the Agents’ Representative, remit such funds to an
account of the Company, by wire transfer of immediately available funds pursuant
to the instructions to be delivered by the Company and the Agents’
Representative prior to the Closing.

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    (c)           The
Closing shall be held at a date and time designated by the Company and the
Placement Agents prior to 11:59 p.m. prevailing Eastern time on the Outside
Date.  The Closing shall occur at the offices of the Agents’
Representative, located at 1251 Avenue of the Americas, 20th Floor,
New York, New York, 10022, or at such other locations or remotely by facsimile
transmission or other electronic means as the parties may mutually agree. If
applicable, upon satisfaction or waiver of all conditions to the Closing, the
Agents’ Representative and the Company shall instruct the Escrow Agent to
release the proceeds held in the Escrow Account to the Company, less fees and
expenses due to the Placement Agents and the Escrow Agent.  Interest,
if any, that has accrued with respect to the Subscription Amount while in escrow
shall also be distributed to the Company at the Closing and the Purchaser will
have no right to such interest, even if there is no Closing.

     

    (d)           Unless
otherwise agreed to by the Company and any Purchaser, the Company shall deliver,
or cause to be delivered, a certificate or certificates, registered in such name
or names as the Purchasers may designate, representing the Shares and Warrants
purchased by the Purchaser hereunder as soon as practical after the Closing, and
in any event within five Business Days, to the Purchaser’s mailing address
indicated on the Stock Certificate Questionnaire included as Exhibit C-2
hereto.

     

    2.2           Closing
Deliveries.    (a)      On
or prior to the Closing, the Company shall issue, deliver or cause to be
delivered to each Purchaser the following (the “Company
Deliverables”):

     

    (i)           this
Agreement, duly executed by the Company;

     

    (ii)          the
Registration Rights Agreement, duly executed by the Company;

     

    (iii)         a
Warrant, executed by the Company and registered in the name of such Purchaser as
set forth on the Stock Certificate Questionnaire included as Exhibit C-2 hereto,
pursuant to which such Purchaser shall have the right to acquire such number of
Warrant Shares equal to 100.0% of the number of Shares issuable to such
Purchaser pursuant to Section 2.2(a)(ii), rounded up to the nearest whole share,
on the terms set forth therein;

     

    (iv)        
a legal opinion of Company Counsel, in the form attached hereto as Exhibit D, executed
by such counsel and addressed to the Purchasers and the Placement
Agents;

     

    (v)         
duly executed Irrevocable Transfer Agent Instructions acknowledged in
writing by the Transfer Agent;

     

    (vi)       
a certificate of the Secretary of the Company (the “Secretary’s Certificate”),
dated as of the Closing Date, (a) certifying the resolutions adopted by the
Board of Directors of the Company approving the transactions contemplated by
this Agreement and the other Transaction Documents and the issuance of the
Securities, (b) certifying the current versions of the certificate of
incorporation and by-laws of the Company, each as amended to date and (c)
certifying as to the signatures and authority of persons signing the Transaction
Documents and related documents on behalf of the Company;

     

    (vii)        the Compliance Certificate referred to
in Section 5.1(h);

     

    (viii)     
a certificate evidencing the formation and good standing of the Company in the
State of Delaware issued by the Secretary of State (or comparable office), as of
a date within 10 days of the Closing Date; and

     

    (ix)         a
certified copy of the Certificate of Incorporation as certified by the Secretary
of State of the State of Delaware within ten (10) days of the Closing
Date.

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

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

     

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

     

    (ii)         
its Subscription Amount, in United States dollars and in immediately
available funds, in the amount set forth as the “Purchase Price” indicated below
such Purchaser’s name on the applicable signature page hereto by wire transfer
to an account designated in writing by the Company for such purpose, as set
forth on Exhibit
F attached hereto;

     

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

     

    (iv)       
a fully completed and duly executed Selling Stockholder Questionnaire in
the form attached as Annex B to the
Registration Rights Agreement; and

     

    (v)        
a fully completed and duly executed Accredited Investor Questionnaire and
Stock Certificate Questionnaire in the forms attached hereto as Exhibits C-1 and
C-2,
respectively.

     

    ARTICLE
III.

    REPRESENTATIONS
AND WARRANTIES

     

    3.1 Representations and
Warranties of the Company.  The Company hereby represents and
warrants to the Purchasers and to the Placement Agents that, except as set forth
in the Schedules delivered herewith:

     

    (a)           Subsidiaries.  With
the exception of ZIOPHARM Oncology Limited, a private limited company
incorporated in England and Wales, the Company has no direct or indirect
subsidiaries.

     

    (b)           Organization and
Qualification.  The Company is an entity duly incorporated or
otherwise organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation or organization (as applicable), with the
requisite power and authority to own or lease and use its properties and assets
and to carry on its business as currently conducted.  The Company is
not in violation of any of the provisions of its certificate of incorporation,
bylaws or other organizational or charter documents.  The Company is
duly qualified to conduct business and is in good standing as a foreign
corporation or other entity in each jurisdiction in which the nature of the
business conducted or property owned by it makes such qualification necessary,
except where the failure to be so qualified or in good standing, as the case may
be, could not have or reasonably be expected to have, individually or in the
aggregate, resulted in a Material Adverse Effect, and no Action has been
instituted in any such jurisdiction revoking, limiting or curtailing or seeking
to revoke, limit or curtail such power and authority or
qualification.

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

    (c)           Authorization; Enforcement;
Validity.  The Company has the requisite corporate power and
authority to enter into and to consummate the transactions contemplated by each
of the Transaction Documents to which it is a party and otherwise to carry out
its obligations hereunder and thereunder.  The execution and delivery
of each of the Transaction Documents to which it is a party by the Company and
the consummation by it of the transactions contemplated hereby and thereby
(including, but not limited to, the sale and delivery of the Shares and the
Warrants and the subsequent issuance of the Warrant Shares upon exercise of the
Warrants) have been duly authorized by all necessary corporate action on the
part of the Company, and no further corporate action is required by the Company,
its Board of Directors or its shareholders in connection therewith other than in
connection with the Required Approvals.  Each of the Transaction
Documents to which it is a party has been (or upon delivery will have been) duly
executed by the Company and is, or when delivered in accordance with the terms
hereof, will constitute the valid and binding obligation of the Company
enforceable against the Company in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation or similar laws relating to, or
affecting generally the enforcement of, creditors’ rights and remedies or by
other equitable principles of general application. There are no shareholder
agreements, voting agreements, or other similar arrangements with respect to the
Company’s capital stock to which the Company is a party or, to the Company’s
Knowledge, between or among any of the Company’s shareholders.

     

    (d)           No
Conflicts.  The execution, delivery and performance by the
Company of the Transaction Documents to which it is a party and the consummation
by the Company of the transactions contemplated hereby or thereby (including,
without limitation, the issuance of the Shares and the reservation for issuance
and issuance of the Warrant Shares) do not and will not (i) conflict with or
violate any provision of the Company’s certificate of incorporation, bylaws or
other organizational or charter documents, (ii) conflict with, or constitute a
default (or an event that with notice or lapse of time or both would become a
default) under, result in the creation of any Lien upon any of the properties or
assets of the Company or give to others any rights of termination, amendment,
acceleration or cancellation (with or without notice, lapse of time or both) of,
any agreement, credit facility, debt or other instrument (evidencing a Company
debt or otherwise) to which the Company is a party or by which any property or
asset of the Company is bound or affected, or (iii) subject to the Required
Approvals, conflict with or result in a violation of any law, rule, regulation,
order, judgment, injunction, decree or other restriction of any court or
governmental authority to which the Company is subject (including federal and
state securities laws and regulations and the rules and regulations, assuming
the correctness of the representations and warranties made by the Purchasers
herein, of any self-regulatory organization to which the Company or its
securities are subject, including all applicable Trading Markets), or by which
any property or asset of the Company is bound or affected, except in the case of
clauses (ii) and (iii), such as would not, individually or in the aggregate,
have or reasonably be expected to result in a Material Adverse
Effect.

     

    (e)           Filings, Consents and
Approvals.  The Company is not required to obtain any consent,
waiver, authorization or order of, give any notice to, or make any filing or
registration with, any court or other federal, state, local or other
governmental authority or other Person in connection with the execution,
delivery and performance by the Company of the Transaction Documents (including
the issuance of the Securities), other than (i) the filing with the Commission
of one or more Registration Statements in accordance with the requirements of
the Registration Rights Agreement, (ii) filings required by applicable state
securities laws, (iii) the filing of a Notice of Sale of Securities on Form D
with the Commission under Regulation D of the Securities Act, (iv) the filing of
any requisite notices and/or application(s) to the Principal Trading Market for
the issuance and sale of the Shares and the Warrants and the listing of the
Shares and Warrant Shares for trading or quotation, as the case may be, thereon
in the time and manner required thereby (except as disclosed on Schedule 3.1(e)), (v)
the filings required in accordance with Section 4.7 of this Agreement and (vi)
those that have been made or obtained prior to the date of this Agreement
(collectively, the “Required
Approvals”).
 

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

    (f)           Issuance of the
Securities.  The Shares have been duly authorized and, when
issued and paid for in accordance with the terms of the Transaction Documents,
will be duly and validly issued, fully paid and nonassessable, free and clear of
all Liens, other than restrictions on transfer provided for in the Transaction
Documents or imposed by applicable securities laws, and shall not be subject to
preemptive or similar rights of shareholders.  The Warrants have been
duly authorized and, when issued and paid for in accordance with the terms of
the Transaction Documents, will be duly and validly issued, free and clear of
all Liens, other than restrictions on transfer provided for in the Transaction
Documents or imposed by applicable securities laws, and shall not be subject to
preemptive or similar rights of shareholders. The Warrant Shares issuable upon
exercise of the Warrants have been duly authorized and, when issued and paid for
in accordance with the terms of the Transaction Documents and the Warrants, will
be duly and validly issued, fully paid and nonassessable, free and clear of all
Liens, other than restrictions on transfer provided for in the Transaction
Documents or imposed by applicable securities laws, and shall not be subject to
preemptive or similar rights of shareholders.  Assuming the accuracy
of the representations and warranties of the Purchasers in this Agreement, the
Securities will be issued in compliance with applicable federal and state
securities laws.  The Company shall, so long as any of the Warrants
are outstanding, take all action reasonably necessary to reserve and keep
available out of its authorized and unissued capital stock, solely for the
purpose of effecting the exercise of the Warrants, 100% of the Warrant Shares
issuable upon exercise of the Warrants.

     

    (g)           Capitalization.  The
number of shares and type of all authorized, issued and outstanding capital
stock, options and other securities of the Company (whether or not presently
convertible into or exercisable or exchangeable for shares of capital stock of
the Company) has been set forth in the SEC Reports and has changed since the
date of such SEC Reports only to reflect stock option and warrant exercises that
do not, individually or in the aggregate, have a material affect on the issued
and outstanding capital stock, options and other securities.  All of
the outstanding shares of capital stock of the Company are duly authorized,
validly issued, fully paid and non-assessable, have been issued in compliance in
all material respects with all applicable federal and state securities laws, and
none of such outstanding shares was issued in violation of any preemptive rights
or similar rights to subscribe for or purchase any capital stock of the
Company.  Except as specified in the SEC Reports or as contemplated by
the Transaction Documents: (i) no shares of the Company's capital stock are
subject to preemptive rights or any other similar rights or any liens or
encumbrances suffered or permitted by the Company; (ii) there are no outstanding
options, warrants, scrip, rights to subscribe to, calls or commitments of any
character whatsoever relating to, or securities or rights convertible into, or
exercisable or exchangeable for, any shares of capital stock of the Company, or
contracts, commitments, understandings or arrangements by which the Company is
or may become bound to issue additional shares of capital stock of the Company
or options, warrants, scrip, rights to subscribe to, calls or commitments of any
character whatsoever relating to, or securities or rights convertible into, or
exercisable or exchangeable for, any shares of capital stock of the Company;
(iii) there are no outstanding debt securities, notes, credit agreements, credit
facilities or other agreements, documents or instruments evidencing indebtedness
of the Company or by which the Company is or may become bound; (iv) there are no
financing statements securing obligations in any material amounts, either singly
or in the aggregate, filed in connection with the Company; (v) there are no
agreements or arrangements under which the Company is obligated to register the
sale of any of their securities under the Securities Act (except the
Registration Rights Agreement); (vi) there are no outstanding securities or
instruments of the Company or which contain any redemption or similar
provisions, and there are no contracts, commitments, understandings or
arrangements by which the Company is or may become bound to redeem a security of
the Company; (vii) except as disclosed on Schedule 3.1(g)
hereto, there are no securities or instruments containing anti-dilution or
similar provisions that will be triggered by the issuance of the Securities;
(viii) the Company does not have any stock appreciation rights or “phantom
stock” plans or agreements or any similar plan or agreement; and (ix) the
Company has no liabilities or obligations required to be disclosed in the SEC
Reports (as defined herein) but not so disclosed in the SEC Reports, other than
those incurred in the ordinary course of the Company's businesses and which,
individually or in the aggregate, do not or would not have a Material Adverse
Effect.
 

    
      
         

      

      
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    (h)           SEC
Reports.  The Company has filed all reports, schedules, forms,
statements and other documents required to be filed by it under the Exchange
Act, including pursuant to Section 13(a) or 15(d) thereof, for the two years
preceding the date hereof (or such shorter period as the Company was required by
law or regulation to file such material) on a timely basis or has received a
valid extension of such time of filing and has filed any such SEC Reports prior
to the expiration of any such extension.  As of their respective
dates, or to the extent corrected by a subsequent restatement, the Company’s
Annual Report on Form 10-K for the fiscal year ended December 31, 2008, and all
other reports of the Company filed with the Commission pursuant to the Exchange
Act from January 1, 2009 through the date of this Agreement (including the
exhibits thereto and documents incorporated by reference therein, being
collectively referred to herein as the “SEC Reports”) complied in all
material respects with the requirements of the Exchange Act, and none of the SEC
Reports, when filed, contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading.

     

    (i)           Financial
Statements.         The financial
statements of the Company included in the SEC Reports comply in all material
respects with applicable accounting requirements and the rules and regulations
of the Commission with respect thereto as in effect at the time of filing (or to
the extent corrected by a subsequent restatement).  Such financial
statements have been prepared in accordance with GAAP applied on a consistent
basis during the periods involved, except as may be otherwise specified in such
financial statements or the notes thereto and except that unaudited financial
statements may not contain all footnotes required by GAAP, and fairly present in
all material respects the financial position of the Company of and for the dates
thereof and the results of operations and cash flows for the periods then ended,
subject, in the case of unaudited statements, to normal, year-end audit
adjustments. All material agreements to which the Company is a party or to which
the property or assets of the Company are subject are included as part of or
specifically identified in the SEC Reports.

     

    (j)           Tax
Matters         The Company (i)
has accurately and timely prepared and filed all foreign, federal and state
income and all other tax returns, reports and declarations required by any
jurisdiction to which it is subject, (ii) 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, with respect to which adequate reserves have been
set aside on the books of the Company and (iii) 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,
except, in the case of clauses (i) and (ii) above, where the failure to so pay
or file any such tax, assessment, charge or return would not result in a
Material Adverse Effect.  There are no unpaid taxes in any material
amount claimed to be due by the Company by the taxing authority of any
jurisdiction.

     

    (k)           Material
Changes.  Since the date of the latest audited financial
statements included within the SEC Reports and except as disclosed in a
subsequent SEC Report filed prior to the date of this Agreement, (i) there have
been no events, occurrences or developments that have had or that could
reasonably be expected to result, either individually or in the aggregate, in a
Material Adverse Effect, (ii) the Company has not incurred any liabilities
(contingent or otherwise) other than (A) trade payables, accrued expenses and
other liabilities incurred in the ordinary course of business consistent with
past practice and (B) liabilities not required to be reflected in the Company's
financial statements pursuant to GAAP or required to be disclosed in filings
made with the Commission, (iii) the Company has not altered its method of
accounting or the manner in which it keeps its accounting books and records,
(iv) the Company has not declared or made any dividend or distribution of cash
or other property to its shareholders or purchased, redeemed or made any
agreements to purchase or redeem any shares of its capital stock (other than in
connection with repurchases of unvested stock issued to employees of the
Company) and (v) the Company has not issued any equity securities to any
officer, director or Affiliate, except pursuant to an Equity Incentive Plan or
executive and director corporate arrangements disclosed in the SEC Reports and
(vi) there has not been any material change or amendment to, or any waiver of
any material right under, any contract under which the Company or any of their
assets is bound or subject. Except for the issuance of the Securities
contemplated by this Agreement, no event, liability or development has occurred
or exists with respect to the Company or its business, properties, operations or
financial condition that would be required to be disclosed by the Company under
applicable securities laws at the time this representation is made that has not
been publicly disclosed at least one Trading Day prior to the date that this
representation is made.
 

    
      
         

      

      
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    (l)           Environmental
Matters.  To the Company’s Knowledge, the Company (i) is not in
violation of any statute, rule, regulation, decision or order of any
governmental agency or body or any court, domestic or foreign, relating to the
use, disposal or release of hazardous or toxic substances or relating to the
protection or restoration of the environment or human exposure to hazardous or
toxic substances (collectively, “Environmental Laws”), (ii)
does not own or operate any real property contaminated with any substance that
is in violation of any Environmental Laws, (iii) is not liable for any off-site
disposal or contamination pursuant to any Environmental Laws, and (iv) is not
subject to any claim relating to any Environmental Laws; which violation,
contamination, liability or claim has had or could reasonably be expected to
have a Material Adverse Effect, individually or in the aggregate; and there is
no pending or, to the Company’s Knowledge, threatened investigation that might
lead to such a claim.

     

    (m)           Litigation.  There
is no Action which (i) adversely affects or challenges the legality, validity or
enforceability of any of the Transaction Documents or the Securities or (ii)
except as specifically disclosed in the SEC Reports or on Schedule 3.1(m),
would, if there were an unfavorable decision, individually or in the aggregate,
have or reasonably be expected to result in a Material Adverse
Effect.  The Company, nor, to the Company’s Knowledge, any current
director or officer thereof (in his or her capacity thereof), is or has been
during the five-year period prior to the Closing Date the subject of any Action
involving a claim of violation of or liability under federal or state securities
laws or a claim of breach of fiduciary duty.  There has not been and,
to the Company’s Knowledge, there is not pending or contemplated, any
investigation by the Commission involving the Company or, to the Company’s
Knowledge, any current or former director or officer of the Company (in his or
her capacity as such).  The Commission has not issued any stop order
or other order suspending the effectiveness of any registration statement filed
by the Company under the Exchange Act or the Securities Act.

     

    (n)           Employment
Matters.  No material labor dispute exists or, to the Company’s
Knowledge, is imminent with respect to any of the employees of the Company which
could reasonably be expected to result in a Material Adverse
Effect.  None of the Company’s employees is a member of a union that
relates to such employee’s relationship with the Company, the Company is not a
party to a collective bargaining agreement, and the Company believes that its
relationship with its employees is satisfactory.  No executive
officer, to the Company’s Knowledge, is, or is now expected to be, in violation
of any material term of any employment contract, confidentiality, disclosure or
proprietary information agreement or non-competition agreement, or any other
contract or agreement or any restrictive covenant, and the continued employment
of each such executive officer does not subject the Company to any liability
with respect to any of the foregoing matters.  To the Company’s
Knowledge, the Company is in compliance with all U.S. federal, state, local and
foreign laws and regulations relating to employment and employment practices,
terms and conditions of employment and wages and hours, except where the failure
to be in compliance could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.

     

    (o)           Compliance.  The
Company is not (i)  in default under or in violation of (and no event
has occurred that has not been waived that, with notice or lapse of time or
both, would result in a default by the Company), nor has the Company received
notice of a claim that it is in default under or that it is in violation of, any
indenture, loan or credit agreement or any other agreement or instrument to
which it is a party or by which it or any of its properties is bound (whether or
not such default or violation has been waived), (ii) in violation of any order
of any court, arbitrator or governmental body having jurisdiction over the
Company or its properties or assets, or (iii) in violation of, or in receipt of
notice that it is in violation of, any statute, rule or regulation of any
governmental authority applicable to the Company, except in each case as could
not, individually or in the aggregate, have or reasonably be expected to result
in a Material Adverse Effect.

     

    
      
         

      

      
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    (p)           Regulatory
Permits.  The Company possesses all certificates,
authorizations and permits issued by the appropriate federal, state, local or
foreign regulatory authorities necessary to conduct its business as described in
the SEC Reports, except where the failure to possess such permits, individually
or in the aggregate, has not and could not reasonably be expected to result in a
Material Adverse Effect (“Material Permits”), and the
Company has not received any notice of proceedings relating to the revocation or
modification of any such Material Permits.

     

    (q)           Title to
Assets.  Except for property that is specifically the subject
of, and covered by, other representations and warranties as to ownership or
title contained herein, the Company has good and marketable title in fee simple
to all real property owned by it that is material to its business and good and
marketable title in all personal property owned by it that is material to its
business, in each case free and clear of all Liens, except for Liens as do not
materially affect the value of such property and do not materially interfere
with the use made and proposed to be made of such property by the Company and
Liens for the payment of federal, state or other taxes, the payment of which is
neither delinquent nor subject to penalties.  Any real property and
facilities held under lease by the Company are held by it under valid,
subsisting and enforceable leases of which the Company is in material
compliance.

     

    (r)           Intellectual
Property.  The Company owns, possesses, licenses or has other
rights to use all foreign and domestic patents, patent applications, trade and
service marks, trade and service mark registrations, trade names, copyrights,
licenses, inventions, trade secrets, technology, Internet domain names, know-how
and other intellectual property (collectively, the “Intellectual Property”)
necessary for the conduct of its business as now conducted or as proposed to be
conducted.  Except as set forth in the SEC Reports and except where
such violations or infringements would not reasonably be expected to result,
either individually or in the aggregate, in a Material Adverse Effect, (a) to
the Company’s Knowledge, there are no rights of third parties to any such
Intellectual Property; (b) to the Company’s Knowledge, there is no infringement
by third parties of any such Intellectual Property; (c) there is no pending or,
to the Company’s Knowledge, threatened Action challenging the Company’s rights
in or to any such Intellectual Property, and the Company is unaware of any facts
which would form a reasonable basis for any such Action; (d) there is no pending
or, to the Company’s Knowledge, threatened Action challenging the validity or
scope of any such Intellectual Property; and (e) there is no pending or, to the
Company’s Knowledge, threatened Action that the Company infringes or otherwise
violates any patent, trademark, copyright, trade secret or other proprietary
rights of others, and the Company is unaware of any other fact which would form
a reasonable basis for any such Action.

     

    (s)           Insurance.  The
Company is insured by insurers of recognized financial responsibility against
such losses and risks and in such amounts as are prudent and customary in the
businesses and location in which the Company is engaged.  The Company
does not have any knowledge that it will be unable to renew its existing
insurance coverage for the Company as and when such coverage expires or to
obtain similar coverage from similar insurers as may be necessary to continue
its business without a significant increase in cost.

     

    (t)           Transactions With Affiliates
and Employees.  Except as set forth in the SEC Reports or
reported on a Form 3, 4 or 5 filed with the Commission, in either case at least
ten days prior to the date hereof, and except as disclosed on Schedule 3.1(t), none
of the executive officers, directors or employees of the Company is presently a
party to any transaction with the Company (other than for ordinary course
services as employees, officers or directors), including any contract, agreement
or other arrangement providing for the furnishing of services to or by,
providing for rental of real or personal property to or from, or otherwise
requiring payments to or from any such executive officer, director or employee
or, to the Company’s Knowledge, any corporation, partnership, trust or other
entity in which any such officer, director, or employee has a substantial
interest or is an officer, director, trustee or partner.

     

    
      
         

      

      
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    (u)           Internal Accounting
Controls.  The Company 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.

     

    (v)           Sarbanes-Oxley; Disclosure
Controls.  The Company is in compliance in all material
respects with all of the provisions of the Sarbanes-Oxley Act of 2002 which are
applicable to it as of the Closing Date.  The Company maintains
disclosure controls and procedures (as such term is defined in Rule 13a-15(e)
under the Exchange Act) that are effective in ensuring that information required
to be disclosed by the Company in the reports that it files or submits under the
Exchange Act is recorded, processed, summarized and reported, within the time
periods specified in the rules and forms of the Commission, including, without
limitation, controls and procedures designed to ensure that information required
to be disclosed by the Company in the reports that it files or submits under the
Exchange Act is accumulated and communicated to the Company's management,
including its principal executive officer or officers and its principal
financial officer or officers, as appropriate, to allow timely decisions
regarding required disclosure.

     

    (w)           Certain
Fees.  No person or entity will have, as a result of the
transactions contemplated by this Agreement, any valid right, interest or claim
against or upon the Company or a Purchaser for any commission, fee or other
compensation pursuant to any agreement, arrangement or understanding entered
into by or on behalf of the Company, other than the Placement Agents with
respect to the offer and sale of the Securities.  Such Placement Agent
fees and expenses are described on Schedule 3.1(w)
hereto and are being paid by the Company. The Company shall pay, and hold each
Purchaser harmless against, any liability, loss or expense (including, without
limitation, attorneys’ fees and out-of-pocket expenses) arising in connection
with any such right, interest or claim.

     

    (x)           Private
Placement.      Assuming the accuracy of the
Purchasers’ representations and warranties set forth in Section 3.2 of this
Agreement, no registration under the Securities Act is required for the offer
and sale of the Securities by the Company to the Purchasers under the
Transaction Documents.   Other than each of the Purchasers (with
respect to the Shares and the Warrant Shares), no Person has any right to cause
the Company to effect the registration under the Securities Act of any
securities of the Company other than those securities which are currently
registered on an effective registration statement on file with the
Commission.

     

    (y)           No Directed Selling Efforts
or General Solicitation.  Neither the Company, nor any of its
Affiliates, nor any Person acting on its or their behalf has conducted any
“general solicitation” or “general advertising” (as those terms are used in
Regulation D) in connection with the offer or sale of any of the
Securities.
 

    
      
         

      

      
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    (z)            
 No Integrated
Offering.  Assuming the accuracy of the Purchasers’
representations and warranties set forth in Section 3.2, neither the Company,
its Affiliates, nor any Person acting on its or their behalf has, directly or
indirectly, at any time within the past six months, made any offers or sales of
any Company security or solicited any offers to buy any security under
circumstances that would (i) eliminate the availability of the exemption from
registration under Regulation D under the Securities Act in connection with the
offer and sale by the Company of the Securities as contemplated hereby or (ii)
cause the offering of the Securities pursuant to the Transaction Documents to be
integrated with prior offerings by the Company for purposes of any applicable
law, regulation or shareholder approval provisions, including, without
limitation, under the rules and regulations of any Trading Market on which any
of the securities of the Company are listed or designated.

     

    (aa)           Listing and Maintenance
Requirements.  The Company’s Common Stock is registered
pursuant to Section 12(b) of the Exchange Act, and the Company has taken no
action designed to terminate the registration of the Common Stock under the
Exchange Act nor has the Company received any notification that the Commission
is contemplating terminating such registration.  Except as specified
in the SEC Reports, the Company has not, in the two years preceding the date
hereof, received written notice  from any Trading Market on which the
Common Stock is or has been listed or quoted to the effect that the Company is
not in compliance with the listing or maintenance requirements of such Trading
Market.  The Company is, and has no reason to believe that following
the Closing it will not in the foreseeable future continue to be, in compliance
in all material respects with the listing and maintenance requirements for
continued trading of the Common Stock on the Principal Trading
Market.

     

    (bb)           Investment
Company     The
Company is not required to be registered as, and is not an Affiliate of, and
immediately following the Closing will not be required to register as, an
“investment company” within the meaning of the Investment Company Act of 1940,
as amended.

     

    (cc)           Questionable
Payments. Neither, the Company,
nor, to the Company’s Knowledge, any directors, executive officers, employees,
agents or other Persons acting on behalf of the Company has, in the course of
its actions for, or on behalf of, the Company: (a) directly or indirectly, used
any corporate funds for unlawful contributions, gifts, entertainment or other
unlawful expenses relating to foreign or domestic political activity; (b) made
any direct or indirect unlawful payments to any foreign or domestic governmental
officials or employees or to any foreign or domestic political parties or
campaigns from corporate funds; (c) violated in any material respect any
provision of the Foreign Corrupt Practices Act of 1977, as amended, or (d) made
any other unlawful bribe, rebate, payoff, influence payment, kickback or other
unlawful payment to any foreign or domestic government official or
employee.

     

    (dd)           Application of Takeover
Protections; Rights Agreements.  The Company and its board of
directors have taken all necessary action, if any, in order to render
inapplicable any control share acquisition, business combination, poison pill
(including any distribution under a rights agreement) or other similar
anti-takeover provision under the Company's charter documents or the laws of its
state of incorporation that is or could reasonably be expected to become
applicable to any of the Purchasers as a result of the Purchasers and the
Company fulfilling their obligations or exercising their rights under the
Transaction Documents, including, without limitation, the Company's issuance of
the Securities and the Purchasers' ownership of the Securities.  The
Company has not adopted a stockholder rights plan or similar arrangement
relating to accumulations of beneficial ownership of Common Stock or a change in
control of the Company.

    
      
         

      

      
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    (ee)           Disclosure.  The
Company confirms that neither it nor any of its executive officers or directors
nor any other Person acting on its or their behalf has provided, and it has not
authorized the Placement Agents to provide, any Purchaser with information that
it believes constitutes or could reasonably be expected to constitute material,
non-public information except insofar as the existence, provisions and terms of
the Transaction Documents and the proposed transactions hereunder may constitute
such information, all of which will be disclosed by the Company in the Press
Release as contemplated by Section 4.7 hereof. The Company understands and
confirms that the Purchasers will rely on the foregoing representations in
effecting transactions in securities of the Company.  All disclosure
provided to the Purchasers regarding the Company, its business and the
transactions contemplated hereby furnished by the Company or authorized by the
Company and furnished by the Placement Agents on behalf of the Company
(including the Company’s representations and warranties set forth in this
Agreement) are true and correct in all material respects and do not contain any
untrue statement of a material fact or omit to state any material fact necessary
in order to make the statements made therein, in light of the circumstances
under which they were made, not misleading.  To the Company’s
Knowledge, no event or circumstance has occurred or information exists with
respect to the Company or its business, properties, operations or financial
conditions, which, under applicable law, rule or regulation, requires public
disclosure or announcement by the Company but which has not been so publicly
announced or disclosed, except for the announcement of this Agreement and
related transactions.

     

    (ff)           Off Balance Sheet
Arrangements.  There is no transaction, arrangement, or other
relationship between the Company and an unconsolidated or other off balance
sheet entity that is required to be disclosed by the Company in its Exchange Act
filings and is not so disclosed or that otherwise would be reasonably likely to
have a Material Adverse Effect.

     

    (gg)           Consultation with
Auditors.  The Company has consulted its independent auditors
concerning the accounting treatment of the transactions contemplated by the
Transaction Documents and in connection therewith has furnished such auditors
complete copies of the Transaction Documents.  The Company intends to
account for the net proceeds raised from the financing which is the subject of
this Agreement as equity in its financial statements.

     

    (hh)           No Additional
Agreements.  The Company does not have any agreement or
understanding with any Purchaser with respect to the transactions contemplated
by the Transaction Documents other than as specified in the Transaction
Documents.

     

    (ii)           Use of Form
S-3.  The Company meets the registration and transaction
requirements for use of Form S-3 for the registration of the Shares and the
Warrant Shares for resale by the Purchasers, subject to applicable limitations
on the amount of securities that may be registered for resale without being
deemed a primary offering by or on behalf of the Company under applicable
guidelines of the Commission.

     

    (jj)           
FDA Matters.
The properties, business and operations of the Company have been and are being
conducted in accordance with all applicable laws, rules and regulations of the
U.S. Food and Drug Administration (the “FDA”) including without
limitation under the U.S. Food, Drug and Cosmetic Act, as amended, and the
regulations thereunder (“FDCA”) and other federal or
state laws, rules and regulations relating to registration, investigational use,
premarket clearance, licensure, or application approval, good manufacturing
practices, good laboratory practices, good clinical practices, product listing,
quotas, labeling, advertising, record keeping and filing of reports, except
where the failure to be in compliance would not reasonably be expected to have a
Material Adverse Effect. There is no pending, completed or, to the Company’s
Knowledge, threatened, action (including any lawsuit, arbitration, or legal or
administrative or regulatory proceeding, charge, complaint, or investigation)
against the Company or any of its subsidiaries, and none of the Company or any
of its subsidiaries has received any notice, warning letter or other
communication from the FDA or any other governmental entity, which
(i) contests the premarket clearance, licensure, registration, or approval
of, the uses of, the distribution of, the manufacturing or packaging of, the
testing of, the sale of, or the labeling and promotion of any of the Company’s
product candidates subject to the jurisdiction of the FDA that is manufactured,
packaged, labeled, tested, distributed, sold and/or marketed by the Company or
any of its Subsidiaries (each such product candidate, a “Pharmaceutical
Product”), (ii) withdraws its approval of, requests the recall, suspension,
or seizure of, or withdraws or orders the withdrawal of advertising or sales
promotional materials relating to, any Pharmaceutical Product,
(iii) imposes a clinical hold on any clinical investigation by the Company
or any of its subsidiaries, (iv) enjoins production at any facility of the
Company or any of its subsidiaries, (v) enters or proposes to enter into a
consent decree of permanent injunction with the Company or any of its
subsidiaries, or (vi) otherwise alleges any violation of any laws, rules or
regulations by the Company or any of its subsidiaries, and which, either
individually or in the aggregate, would have or reasonably be expected to have a
Material Adverse Effect. The Company has not been informed by the FDA that the
FDA will prohibit the marketing, sale, license or use in the United States of
any product proposed to be developed, produced or marketed by the Company nor
has the FDA expressed any concern as to approving or clearing for marketing any
product being developed or proposed to be developed by the
Company.

    
      
         

      

      
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    (kk)           Stock
Options.  With respect to stock options issued pursuant to the
Company’s Equity Incentive Plan(s), (i) each stock option designated by the
Company at the time of grant as an “incentive stock option” under
Section 422 of the Code so qualifies, (ii) except as disclosed in the
SEC Reports, including the financial statements included therein, each grant of
a stock option was duly authorized no later than the date on which the grant of
such stock option was by its terms to be effective (the “Grant Date”) by all necessary
corporate action, including, as applicable, approval by the board of directors
of the Company (or a duly constituted and authorized committee thereof) and any
required stockholder approval by the necessary number of votes or written
consents, (iii) each such grant was made in accordance with the material
terms of an Equity Incentive Plan, the Securities Act and all other applicable
laws and regulatory rules or requirements, and (iv) each such grant was or
has now been properly accounted for in accordance with GAAP in the financial
statements (including the related notes) of the Company and disclosed in the
Company’s filings with the Commission in accordance with the Exchange Act and
all other applicable laws, except, in the cases of clauses (i), (ii),
(iii) and (iv), for any such failure, violation or default that, either
individually or in the aggregate, would not reasonably be expected to have a
Material Adverse Effect.

     

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

     

    (a)           Organization;
Authority.  If such Purchaser is not a natural person, (i) such
Purchaser is an entity duly organized, validly existing and in good standing
under the laws of the jurisdiction of its organization with the requisite
corporate or partnership power and authority to enter into and to consummate the
transactions contemplated by the applicable Transaction Documents and otherwise
to carry out its obligations hereunder and thereunder, and (ii) the execution,
delivery and performance by such Purchaser of the transactions contemplated by
this Agreement have been duly authorized by all necessary corporate or, if such
Purchaser is not a corporation, such partnership, limited liability company or
other applicable like action, on the part of such Purchaser.  Each of
this Agreement, the Warrant and the Registration Rights Agreement has been duly
executed by such Purchaser, and when delivered by such Purchaser in accordance
with the terms hereof, will constitute the valid and legally binding obligation
of such Purchaser, enforceable against it in accordance with its terms, except
as such enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation or similar laws relating to, or
affecting generally the enforcement of, creditors’ rights and remedies or by
other equitable principles of general application.

     

    
      
         

      

      
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      (b)           Investment
Intent.  Such Purchaser understands that the Securities are
“restricted securities” and have not been registered under the Securities Act or
any applicable state securities law and is acquiring the Securities and, upon
exercise of the Warrants, will acquire the Warrant Shares issuable upon exercise
thereof as principal for its own account and not with a view to, or for
distributing or reselling such Securities or any part thereof in violation of
the Securities Act or any applicable state securities laws, provided, however, that by
making the representations herein, such Purchaser does not agree to hold any of
the Securities for any minimum period of time and reserves the right, subject to
the provisions of this Agreement and the Registration Rights Agreement, at all
times to sell or otherwise dispose of all or any part of such Securities or
Warrant Shares pursuant to an effective registration statement under the
Securities Act or under an exemption from such registration and in compliance
with applicable federal and state securities laws, subject to the limitations
set forth herein or in such securities laws.  Such Purchaser is
acquiring the Securities hereunder in the ordinary course of its business. Such
Purchaser does not presently have any agreement, plan or understanding, directly
or indirectly, with any Person to distribute or effect any distribution of any
of the Securities (or any securities which are derivatives thereof) to or
through any person or entity.  Such Purchaser is not a registered
broker-dealer under Section 15 of the Exchange Act or an entity engaged in a
business that would require it to be so registered as a
broker-dealer.

       

      (c)           Purchaser
Status.  At the time such Purchaser was offered the Securities,
it was, and at the date hereof it is, and on each date on which it exercises the
Warrants it will be, an “accredited investor” as defined in Rule 501(a) under
the Securities Act.

       

      (d)           General Solicitation.
Such Purchaser is not purchasing the Securities as a result of any
advertisement, article, notice or other communication regarding the Securities
published in any newspaper, magazine or similar media or broadcast over
television or radio or presented at any seminar or any other general
advertisement.  Such Purchaser represents that it has a pre-existing
relationship with one of the Placement Agents or with the Company.

       

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

       

      (f)           Access to
Information.  Such Purchaser acknowledges that it has had the
opportunity to review the Disclosure Materials and has been afforded (i) the
opportunity to ask such questions as it has deemed necessary of, and to receive
answers from, representatives of the Company concerning the terms and conditions
of the offering of the Securities and the merits and risks of investing in the
Securities; (ii) access to information about the Company and its financial
condition, results of operations, business, properties, management and prospects
sufficient to enable it to evaluate its investment; and (iii) the opportunity to
obtain such additional information that the Company possesses or can acquire
without unreasonable effort or expense that is necessary to make an informed
investment decision with respect to the investment. Neither such inquiries nor
any other investigation conducted by or on behalf of such Purchaser or its
representatives or counsel shall modify, amend or affect such Purchaser's right
to rely on the Company's representations and warranties contained in the
Transaction Documents.

      
        
           

        

        
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      (g)           Certain Trading
Activities.  Other than with respect to the transactions
contemplated herein, since the earlier to occur of (1) the time that such
Purchaser was first contacted by the Company, the Placement Agents or any other
Person regarding the transactions contemplated hereby and (2) the tenth (10th) day
prior to the date of this Agreement, neither the Purchaser nor any Affiliate of
such Purchaser which (x) had knowledge of the transactions contemplated hereby,
(y) has or shares discretion relating to such Purchaser’s investments or trading
or information concerning such Purchaser’s investments, including in respect of
the Securities, and (z) is subject to such Purchaser’s review or input
concerning such Affiliate’s investments or trading (collectively, “Trading Affiliates”) has
directly or indirectly, nor has any Person acting on behalf of or pursuant to
any understanding with such Purchaser or Trading Affiliate, effected or agreed
to effect any transactions in the securities of the Company (including, without
limitation, any Short Sales involving the Company’s securities). Notwithstanding
the foregoing, in the case of a Purchaser and/or Trading Affiliate that is,
individually or collectively, a multi-managed investment vehicle whereby
separate portfolio managers manage separate portions of such Purchaser's or
Trading Affiliate’s assets and the portfolio managers have no direct knowledge
of the investment decisions made by the portfolio managers managing other
portions of such Purchaser's or Trading Affiliate’s assets, the representation
set forth above shall apply only with respect to the portion of assets managed
by the portfolio manager that have knowledge about the financing transaction
contemplated by this Agreement.  Other than to other Persons party to
this Agreement, such Purchaser has maintained the confidentiality of all
disclosures made to it in connection with this transaction (including the
existence and terms of this transaction). Notwithstanding the foregoing, no
Purchaser makes any representation, warranty or covenant hereby that it will not
engage in Short Sales in the securities of the Company after the time that the
transactions contemplated by this Agreement are first publicly announced as
described in Section 4.7, subject to the restrictions set forth in Section
4.10.

       

      (h)           Brokers and
Finders.  Other than the Company’s obligations to the Placement
Agents, no Person will have, as a result of the transactions contemplated by
this Agreement, any valid right, interest or claim against or upon the Company
or any Purchaser for any commission, fee or other compensation pursuant to any
agreement, arrangement or understanding entered into by or on behalf of the
Purchaser.

       

      (i)           Limited
Ownership.  The purchase by such Purchaser of the Securities
issuable to it at the Closing will not result in such Purchaser (individually or
together with other Person with whom such Purchaser has identified, or will have
identified, itself as part of a “group” in a public filing made with the
Commission involving the Company’s securities) acquiring, or obtaining the right
to acquire, in excess of 19.99% of the outstanding shares of Common Stock or the
voting power of the Company on a post transaction basis that assumes that the
Closing shall have occurred. Such Purchaser does not presently intend to, alone
or together with others, make a public filing with the Commission to disclose
that it has (or that it together with such other Persons have) acquired, or
obtained the right to acquire, as a result of the Closing (when added to any
other securities of the Company that it or they then own or have the right to
acquire), in excess of 19.99% of the outstanding shares of Common Stock or the
voting power of the Company on a post transaction basis that assumes that the
Closing shall have occurred.

       

      (j)           Independent Investment
Decision.  Such Purchaser has independently evaluated the
merits of its decision to purchase Securities pursuant to the Transaction
Documents, and such Purchaser confirms that it has not relied on the advice of
any other Purchaser’s business and/or legal counsel in making such
decision.  Such Purchaser understands that nothing in this Agreement
or any other materials presented by or on behalf of the Company to the Purchaser
in connection with the purchase of the Securities constitutes legal, tax or
investment advice.  Such Purchaser has consulted such legal, tax and
investment advisors as it, in its sole discretion, has deemed necessary or
appropriate in connection with its purchase of the Securities.  Such
Purchaser understands that the Placement Agents have acted solely as the agent
of the Company in this placement of the Securities and such Purchaser has not
relied on the business or legal advice of the Placement Agents or any of their
agents, counsel or Affiliates in making its investment decision hereunder, and
confirms that none of such Persons has made any representations or warranties to
such Purchaser in connection with the transactions contemplated by the
Transaction Documents.

      
        
           

        

        
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      (k)           Reliance on
Exemptions.  Such Purchaser understands that the Securities
being offered and sold to it in reliance on specific exemptions from the
registration requirements of United States federal and state securities laws and
that the Company is relying in part upon the truth and accuracy of, and such
Purchaser’s compliance with, the representations, warranties, agreements,
acknowledgements 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.

       

      (l)           No Governmental
Review.  Such Purchaser understands that no United States
federal or state agency or any other government or governmental agency has
passed on or made any recommendation or endorsement of the Securities or the
fairness or suitability of the investment in the Securities nor have such
authorities passed upon or endorsed the merits of the offering of the
Securities.

       

      (m)           Residency; Foreign
Securities Laws.  Unless such Purchaser resides, in the case of
individuals, or is headquartered or formed, in the case of entities, in the
United States, such Purchaser acknowledges that the Company will not issue any
Securities in compliance with the laws of any jurisdiction outside of the United
States and the Company makes no representation or warranty that any Securities
issued outside of the United States have been offered or sold in compliance with
the laws of the jurisdiction into which such Shares were issued.  Any
Purchaser not a resident of or formed in the United States warrants to the
Company that no filing is required by the Company with any governmental
authority in such Purchaser’s jurisdiction in connection with the transactions
contemplated hereby.  If such Purchaser is domiciled or was formed
outside of the United States, such Purchaser has satisfied itself as to the full
observance of the laws of its jurisdiction in connection with the acquisition of
the Securities or any use of this Agreement, including (i) the legal
requirements within its jurisdiction for the purchase of the Securities,
(ii) any foreign exchange restrictions applicable to such purchase,
(iii) any governmental or other consents that may need to be obtained and
(iv) the income tax and other tax consequences, if any, that may be
relevant to the purchase, holding, redemption, sale or transfer of the
Securities.  If such Purchaser is domiciled or was formed outside the
United States, such Purchaser’s acquisition of and payment for, and its
continued ownership of the Securities, will not violate any applicable
securities or other laws of his, her or its jurisdiction.

       

      (n)           Acknowledgements Regarding
Placement Agents.  Such Purchaser acknowledges that the
Placement Agents are acting as the exclusive placement agents on a “reasonable
efforts” basis for the Securities being offered hereby and will be compensated
by the Company for acting in such capacity.  Such Purchaser further
acknowledges that the Placement Agents and their respective directors, officers,
employees, representatives and controlling persons have no responsibility for
making any independent investigation of the SEC Reports and make no
representation or warranty to the Purchaser, express or implied, with respect to
the Company or the Securities, or the accuracy, completeness or adequacy of the
SEC Reports or any other publicly available information, nor shall any of the
foregoing persons be liable for any loss or damages of any kind resulting from
the use of the information contained therein or otherwise supplied to the
Purchaser.  In addition, such Purchaser acknowledges that it has not
relied on information provided by any of such persons but has conducted its own
investigation.

       

      The
Company acknowledges and agrees that no Purchaser has made or makes any
representations or warranties with respect to the transactions contemplated
hereby other than those specifically set forth in this Section 3.2.

       

      
        
          
          

        

        
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      ARTICLE
IV.

      OTHER
AGREEMENTS OF THE PARTIES

       

      4.1 (a) Compliance with
Laws.  Notwithstanding any other provision of this Article IV,
each Purchaser covenants that the securities may be disposed of only pursuant to
an effective registration statement under, and in compliance with the
requirements of, the Securities Act, or pursuant to an available exemption from,
or in a transaction not subject to, the registration requirements of the
Securities Act, and in compliance with any applicable state and federal
securities laws.  In connection with any transfer of the Securities
other than (i) pursuant to an effective registration statement, (ii) to the
Company, (iii) to an Affiliate of a Purchaser, (iv) pursuant to Rule 144 (provided that the Purchaser
provides the Company with reasonable assurances (in the form of seller and
broker representation letters or an opinion of counsel, as appropriate,) that
the securities may be sold pursuant to such rule) or Rule 144A, or (v) in
connection with a bona fide pledge as contemplated in Section 4.1(b), except as
otherwise provided herein, the Company may require the transferor thereof to
provide to the Company an opinion of counsel selected by the transferor and
reasonably acceptable to the Company, the form and substance of which opinion
shall be reasonably satisfactory to the Company, to the effect that such
transfer does not require registration of such transferred Securities under the
Securities Act.  As a condition of transfer, any such transferee shall
agree in writing to be bound by the terms of this Agreement and shall have the
rights of a Purchaser under this Agreement and the Registration Rights
Agreement.

       

      (b)           Legends.  Certificates
evidencing the Securities shall bear any legend as required by the “blue sky”
laws of any applicable state and a restrictive legend in substantially the
following form, until such time as they are not required under Section
4.1(c):

       

      [NEITHER
THESE SECURITIES NOR THE SECURITIES ISSUABLE UPON EXERCISE OF THESE SECURITIES
HAVE BEEN REGISTERED] [THESE SECURITIES HAVE NOT BEEN REGISTERED] WITH THE
SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN
RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD
EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT
OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO,
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH
APPLICABLE STATE SECURITIES LAWS OR BLUE SKY LAWS AS EVIDENCED BY A LEGAL
OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY.

       

      The Company acknowledges and agrees
that a Purchaser may from time to time pledge, and/or grant a security interest
in, some or all of the legended Securities in connection with applicable
securities laws, pursuant to a bona fide margin agreement in compliance with a
bona fide margin loan.  Such a pledge would not be subject to approval
or consent of the Company and no legal opinion of legal counsel to the pledgee,
secured party or pledgor shall be required in connection with the pledge, but
such legal opinion shall be required in connection with a subsequent transfer or
foreclosure following default by the Purchaser's transferee of the
pledge.  No notice shall be required of such pledge, but Purchaser’s
transferee shall promptly notify the Company of any such subsequent transfer or
foreclosure.  Each Purchaser acknowledges that the Company shall not
be responsible for any pledges relating to, or the grant of any security
interest in, any of the Securities or for any agreement, understanding or
arrangement between any Purchaser and its pledgee or secured
party.  At the appropriate Purchaser’s expense, the Company will
execute and deliver such reasonable documentation as a pledgee or secured party
of Shares may reasonably request in connection with a pledge or transfer of the
Shares, including the preparation and filing of any required prospectus
supplement under Rule 424(b)(3) of the Securities Act or other applicable
provision of the Securities Act to appropriately amend the list of Selling
Stockholders thereunder.  Each Purchaser acknowledges and agrees that,
except as otherwise provided in Section 4.1(c), any Shares subject to a pledge
or security interest as contemplated by this Section 4.1(b) shall continue to
bear the legend set forth in this Section 4.1(b) and be subject to the
restrictions on transfer set forth in Section 4.1(a).

      
        
           

        

        
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      (c)           Removal of
Legends.  The legend set forth in Section 4.1(b) above shall be
removed and the Company shall issue a certificate without such legend to the
holder of the Securities upon which it is stamped or issue to such holder by
electronic delivery at the applicable balance account at The Depository Trust
Company (“DTC”), if (i)
such Securities are registered for resale under the Securities Act, (ii) such
Securities are sold or transferred pursuant to Rule 144 (assuming the transferor
is not an Affiliate of the Company) or Rule 144A, or (iii) such Securities are
eligible for sale under Rule 144 without application of the requirements of
paragraph (c)(i) thereof.  The Company shall cause its counsel to
issue the legal opinion referred to in the Irrevocable Transfer Agent
Instructions to the Company’s transfer agent on the Effective
Date.  Any fees (with respect to the Transfer Agent, counsel to the
Company or otherwise) associated with the issuance of such opinion or the
removal of such legend shall be borne by the Company.  If any portion
of the Warrant is exercised at a time when there is an effective registration
statement to cover the resale of the Warrant Shares, or if such Warrant Shares
may be sold under Rule 144 without application of the requirements of paragraph
(c)(i) thereof, then such Warrant Shares shall be issued free of all
legends.  Following the Effective Date, or at such earlier time as a
legend is no longer required for certain Securities, the Company will no later
than three (3) Trading Days following the delivery by a Purchaser to the Company
or the Transfer Agent (with notice to the Company) of (i) a legended certificate
representing such Shares or Warrant Shares (endorsed or with stock powers
attached, signatures guaranteed, and otherwise in form necessary to affect the
reissuance and/or transfer) or (ii) an Exercise Notice in the manner stated in
the Warrants to effect the exercise of such Warrant in accordance with its terms
and an opinion of counsel to the extent required by Section 4.1(a), deliver or
cause to be delivered to such Purchaser a certificate representing such
Securities that is free from all restrictive and other legends.  The
Company may not make any notation on its records or give instructions to the
Transfer Agent that enlarge the restrictions on transfer set forth in this
Section.

      

      (d)           Irrevocable Transfer Agent
Instructions. The Company shall issue irrevocable instructions to its
transfer agent, and any subsequent transfer agent, to issue certificates or
credit shares to the applicable balance accounts at DTC, registered in the name
of each Purchaser or its respective nominee(s), for the Shares and the Warrant
Shares in such amounts as specified from time to time by each Purchaser to the
Company in the form of Exhibit E attached
hereto (the “Irrevocable Transfer Agent
Instructions”).

      

      (e)           Acknowledgement.  Each
Purchaser hereunder acknowledges its primary responsibilities under the
Securities Act and accordingly will not sell any of the Securities or any
interest therein without complying with the requirements of the Securities
Act.  While a Registration Statement remains effective, each Purchaser
hereunder may sell the shares in accordance with the plan of distribution
contained in such Registration Statement and if it does so it will comply
therewith and with the related prospectus delivery requirements unless an
exemption therefrom is available provided the Company delivers notice to such
Holder in writing that the conditions set forth in Rule 172 of the Securities
Act are not met and that, accordingly, such Holder is obligated to deliver
prospectuses upon such sales.  Each Purchaser, severally and not
jointly with the other Purchasers, agrees that if it is notified by the Company
at any time after the date any legend is removed pursuant to Section 4.1(c) hereof
that no Registration Statement is effective or that the prospectus included in
any such Registration Statement no longer complies with the requirements of
Section 10 of the Securities Act, the Purchaser will refrain from selling such
Shares and Warrant Shares until such time as the Purchaser is notified by the
Company that a Registration Statement is effective or such prospectus is
compliant with Section 10 of the Exchange Act, unless such Purchaser is able to,
and does, sell such Shares or Warrant Shares pursuant to an available exemption
from the registration requirements of Section 5 of the Securities
Act.  Each Purchaser, severally and not jointly with the other
Purchasers, agrees to indemnify the Company for any damages or losses resulting
to the Company from the Purchaser’s breach of its covenants set forth in the
preceding sentence.

      
        
           

        

        
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      (f)           Buy-In.  If
(i) the Company shall fail to deliver or cause to be delivered to a holder
unlegended certificates within three (3) Trading Days of receipt of documents
necessary for the removal of the legends set forth above (the “Deadline Date”), and if (ii)
prior to the time such unlegended certificate is received by such holder, such
holder, or any third party on behalf of such holder or for such holder’s
account, purchases (in an open market transaction or otherwise) shares of Common
Stock to deliver in satisfaction of a sale by such holder of shares represented
by such certificate (a “Buy-In”), then the Company
shall pay in cash to such holder (for costs incurred either directly by such
holder or on behalf of a third party) the amount by which the total purchase
price paid for Common Stock as a result of the Buy-In (including brokerage
commissions, if any) exceeds the proceeds received by such holder as a result of
the sale to which such Buy-In relates.  The holder shall provide the
Company written notice indicating the amounts payable to the holder in respect
of the Buy-In and, upon request of the Company, evidence of the amount of such
loss.

      

      4.2           Reservation of Common
Stock.  The Company shall take all action necessary to at all
times have authorized, and reserved for the purpose of issuance from and after
the Closing Date, no less than 100% of the number of shares of Common Stock
issuable upon exercise of the Warrants issued at the Closing (without taking
into account any limitations on exercise of the Warrants set forth in the
Warrants).

       

      4.3           Furnishing of
Information.  In order to enable the Purchasers to sell the
Securities under Rule 144 of the Securities Act, until such time as all of the
Shares and Warrant Shares have been either sold or are eligible for sale without
restriction pursuant to Rule 144, the Company shall use its commercially
reasonable efforts to timely file (or obtain extensions in respect thereof and
file within the applicable grace period) all reports required to be filed by the
Company after the date hereof pursuant to the Exchange Act.  During
such period, if the Company is not required to file reports pursuant to such
laws, it will prepare and furnish to the Purchasers and make publicly available
in accordance with Rule 144(c) such information as is required for the
Purchasers to sell the Shares and Warrant Shares under Rule 144. The Company
further covenants that it will take such further action as any holder of
Securities may reasonably request, all to the extent required from time to time
to enable such Person to sell the Shares and Warrant Shares without registration
under the Securities Act within the limitation of the exemptions provided by
Rule 144.

       

      4.4           Reporting
Status.  During the one year period from and after the Closing,
the Company shall not terminate its status as an issuer required to file reports
under the Exchange Act even if the Exchange Act would otherwise permit such
termination.

       

      4.5           Form D and Blue
Sky.  The Company agrees to file a Form D with respect to the
sale of the Shares and Warrants as required under Regulation D and to provide a
copy thereof to the Agents’ Representative promptly after such
filing.  The Company, on or before the Closing Date, shall take such
action as the Company shall reasonably determine is necessary in order to obtain
an exemption for or to qualify the Securities for sale to the Purchasers at the
Closing pursuant to this Agreement under applicable securities or “Blue Sky”
laws of the states of the United States (or to obtain an exemption from such
qualification), and shall provide evidence of any such action so taken to the
Agents’ Representative on or prior to the Closing Date.  The Company
shall make all filings and reports relating to the offer and sale of the
Securities required under applicable securities or “Blue Sky” laws of the states
of the United States following the Closing Date.

      
        
           

        

        
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      4.6           No
Integration.  The Company shall not, and shall use its best
efforts to ensure that no Affiliate of the Company shall, sell, offer for sale
or solicit offers to buy or otherwise negotiate in respect of any security (as
defined in Section 2 of the Securities Act) that will be integrated with the
offer or sale of the Securities in a manner that would require the registration
under the Securities Act of the sale of the Securities to the Purchasers, or
that will be integrated with the offer or sale of the Securities for purposes of
the rules and regulations of any Trading Market such that it would require
shareholder approval prior to the closing of such other transaction unless
shareholder approval is obtained before the closing of such subsequent
transaction.

       

      4.7           Securities Laws Disclosure;
Publicity.    By 9:00 a.m. (New York City time) on
the Trading Day immediately following the execution of this Agreement, the
Company shall issue a press release (the “Press Release”)
reasonably acceptable to the Agents’ Representative disclosing all material
terms of the transactions contemplated hereby.  On or prior to the
fourth (4th) Business Day following the date of this Agreement, the Company will
file a Current Report on Form 8-K with the Commission describing the terms of
the Transaction Documents (and including as exhibits to such Current Report on
Form 8-K the material Transaction Documents (including, without limitation, this
Agreement, the form of Warrant and the Registration Rights Agreement)). Each
Purchaser, severally and not jointly with the other Purchasers, covenants that
until such time as the transactions contemplated by this Agreement are publicly
disclosed by the Company as described in Section 4.7, such Purchaser will
maintain the confidentiality of all disclosures made to it in connection with
this transaction (including the existence and terms of this
transaction).

       

      4.8           Listing of
Securities.  Promptly following the date hereof, the Company
shall take all necessary action to cause the Shares, the Warrant Shares and the
shares of Common Stock issuable upon exercise of the Placement Agents’ Warrants
to be listed upon the Principal Trading Market, if any, upon which shares of
Common Stock are then listed (subject to official notice of issuance) and shall
maintain, so long as any other shares of Common Stock shall be so listed, such
listing.  Further, if the Company applies to have its Common Stock or
other securities listed on any other Trading Market, it shall include in such
application the Shares and the Warrant Shares (including the shares of Common
Stock issuable upon exercise of the warrants issued to the Placement Agents) and
will take such other action as is necessary to cause the Shares, and the Warrant
Shares (including the shares of Common Stock issuable upon exercise of the
warrants issued to the Placement Agents) to be listed on such other Trading
Market as promptly as practicable.

       

      4.9           Use of
Proceeds.  The Company intends to use the net proceeds from the
sale of the Securities hereunder for working capital and general corporate
purposes.

       

      4.10           Sales and Confidentiality
After the Date Hereof.  Such Purchaser shall not, and shall
cause its Trading Affiliates not to, engage, directly or indirectly, in any
transactions in the securities of the Company (including, without limitation,
any Short Sales) during the period from the date hereof until such time as (i)
the transactions contemplated by this Agreement are first publicly announced as
described in Section 4.7 or (ii) this Agreement is terminated in full pursuant
to Section 6.16.  Notwithstanding the foregoing, in the case of a
Purchaser that is a multi-managed investment vehicle whereby separate portfolio
managers manage separate portions of such Purchaser's assets and the portfolio
managers have no direct knowledge of the investment decisions made by the
portfolio managers managing other portions of such Purchaser's assets, the
representation set forth above shall apply only with respect to the portion of
assets managed by the portfolio manager that have knowledge about the financing
transaction contemplated by this Agreement.  Each Purchaser
understands and acknowledges, severally and not jointly with any other
Purchaser, that the Commission currently takes the position that covering a
short position established prior to effectiveness of a resale registration
statement with shares included in such registration statement would be a
violation of Section 5 of the Securities Act, as set forth in Item 65, Section 5
under Section A, of the Manual of Publicly Available Telephone Interpretations,
dated July 1997, compiled by the Office of Chief Counsel, Division of
Corporation Finance.

      
        
           

        

        
          23

          
            

          

        

        
           

        

      

       

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

       

      4.12           Indemnification.  Subject
to the provisions of this Section 412, the Company will indemnify and hold
each Purchaser and its directors, officers, shareholders, members, partners,
employees and agents (and any other Persons with a functionally equivalent role
of a Person holding such titles notwithstanding a lack of such title or any
other title), each Person who controls such Purchaser (within the meaning of
Section 15 of the Securities Act and Section 20 of the Exchange Act),
and the directors, officers, shareholders, agents, members, partners or
employees (and any other Persons with a functionally equivalent role of a Person
holding such titles notwithstanding a lack of such title or any other title) of
such controlling persons (each, a “Purchaser Party”) harmless
from any and all losses, liabilities, obligations, claims, contingencies,
damages, costs and expenses, including all judgments, amounts paid in
settlements, court costs and reasonable attorneys’ fees and costs of
investigation that any such Purchaser Party may suffer or incur as a result of
or relating to (a) any breach of any of the representations, warranties,
covenants or agreements made by the Company in this Agreement or in the other
Transaction Documents, or (b) any action instituted against a Purchaser, or
any of them or their respective Affiliates, by any stockholder of the Company
who is not an Affiliate of such Purchaser, with respect to any of the
transactions contemplated by the Transaction Documents (unless such action is
based upon a breach of such Purchaser’s representations, warranties or covenants
under the Transaction Documents or any agreements or understandings such
Purchaser may have with any such stockholder or any violations by the Purchaser
of state or federal securities laws or any conduct by such Purchaser which
constitutes fraud, gross negligence, willful misconduct or
malfeasance).  If any action shall be brought against any Purchaser
Party in respect of which indemnity may be sought pursuant to this Agreement,
such Purchaser Party shall promptly notify the Company in writing, and the
Company shall have the right to assume the defense thereof with counsel of its
own choosing reasonably acceptable to the Purchaser Party.  Any
Purchaser Party shall have the right to employ separate counsel in any such
action and participate in the defense thereof, but the fees and expenses of such
counsel shall be at the expense of such Purchaser Party except to the extent
that (i) the employment thereof has been specifically authorized by the
Company in writing, (ii) the Company has failed after a reasonable period
of time to assume such defense and to employ counsel, or (iii) in such
action there is, in the reasonable opinion of such separate counsel, a material
conflict on any material issue between the position of the Company and the
position of such Purchaser Party, in which case the Company shall be responsible
for the reasonable fees and expenses of no more than one such separate
counsel.  The Company will not be liable to any Purchaser Party under
this Agreement (i) for any settlement by a Purchaser Party effected without
the Company’s prior written consent, which shall not be unreasonably withheld or
delayed; or (ii) to the extent, but only to the extent that a loss, claim,
damage or liability is attributable to (A) any Purchaser Party’s breach of
any of the representations, warranties, covenants or agreements made by such
Purchaser Party in this Agreement or in the other Transaction Documents,
(B) any violations by the Purchaser of state or federal securities laws or
(C) any conduct by such Purchaser which constitutes fraud, gross
negligence, willful misconduct or malfeasance.

      
        
           

        

        
          24

          
            

          

        

        
           

        

      

       

      ARTICLE
V.

      CONDITIONS
PRECEDENT TO CLOSING

      

      5.1           Conditions Precedent to the
Obligations of the Purchasers to Purchase Securities.  The
obligation of each Purchaser to acquire Shares and Warrants at the Closing is
subject to the fulfillment to such Purchaser’s satisfaction, on or prior to the
Closing Date, of each of the following conditions, any of which may be waived by
such Purchaser (as to itself only):

       

      (a)           Representations and
Warranties.  The representations and warranties of the Company
contained herein shall be true and correct in all material respects (except that
representations and warranties that are qualified by materiality or Material
Adverse Effect shall be true and correct in all respects) as of the date when
made and as of the Closing Date, as though made on and as of such date, except
for representations and warranties that speak as of a specific date which shall
be true and correct in all material respects as of such date;

       

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

       

      (c)           No
Injunction.  No statute, rule, regulation, executive order,
decree, ruling or injunction shall have been enacted, entered, promulgated or
endorsed by any court or governmental authority of competent jurisdiction that
prohibits the consummation of any of the transactions contemplated by the
Transaction Documents;

       

      (d)           Consents.  The
Company shall have obtained in a timely fashion any and all consents, permits,
approvals, registrations and waivers necessary or appropriate for consummation
of the purchase and sale of the Securities, all of which shall be and remain so
long as necessary in full force and effect;

       

      (e)           Adverse
Changes.  Since the date of execution of this Agreement, no
event or series of events shall have occurred that has resulted or reasonably
could result in a Material Adverse Effect, nor shall a banking moratorium have
been declared by either the United States or New York State authorities nor
shall there have occurred any material outbreak or escalation of hostilities or
other national or international calamity of such magnitude in its effect on, or
any material adverse change in, any financial market which, in each case, in the
reasonable judgment of each Purchaser, makes it impractical or inadvisable to
purchase the Shares and Warrants at the Closing;

       

      (f)           No Suspensions of Trading in
Common Stock; Listing.  The Common Stock (i) shall be
designated for quotation or listed on the Principal Market and (ii) shall not
have been suspended, as of the Closing Date, by the Commission or the Principal
Market from trading on the Principal Market nor shall suspension by the
Commission or the Principal Market have been threatened, as of the Closing Date,
either (A) in writing by the Commission or the Principal Market or (B) by
falling below the minimum listing maintenance requirements of the Principal
Market;

       

      (g)           Company Deliverables.
The Company shall have delivered the Company Deliverables
in  accordance with Section 2.2(a);

       

      (h)           Compliance
Certificate.  The Company shall have delivered to each
Purchaser a certificate, dated as of the Closing Date and signed by its Chief
Executive Officer or its Chief Financial Officer, dated as of the Closing Date,
certifying to the fulfillment of the conditions specified in Sections 5.1(a),
(b), (c), (d) and (f); and

      
        
           

        

        
          25

          
            

          

        

        
           

        

      

       

      (i)           Termination. This
Agreement shall not have been terminated as to such Purchaser in accordance with
Section 6.16 herein.

       

      5.2           Conditions Precedent to the
Obligations of the Company to Sell
Securities.  The Company's obligation to sell and issue the
Shares and Warrants at the Closing is subject to the fulfillment to the
satisfaction of the Company on or prior to the Closing Date of the following
conditions, any of which may be waived by the Company:

       

      (a)           Representations and
Warranties.  The representations and warranties made by the
Purchasers in Section
3.2 hereof shall be true and correct in all material respects (except
that representations and warranties that are qualified by materiality or
Material Adverse Effect shall be true and correct in all respects) as of the
date when made, and as of the Closing Date as though made on and as of such
date, except for representations and warranties that speak as of a specific date
which shall be true and correct in all material respects as of such
date;

       

      (b)           Performance.  The
Purchasers shall have performed, satisfied and complied in all material respects
with all covenants, agreements and conditions required by the Transaction
Documents to be performed, satisfied or complied with by the Purchasers at or
prior to the Closing Date;

       

      (c)           No
Injunction.  No statute, rule, regulation, executive order,
decree, ruling or injunction shall have been enacted, entered, promulgated or
endorsed by any court or governmental authority of competent jurisdiction that
prohibits the consummation of any of the transactions contemplated by the
Transaction Documents;

       

      (d)           Consents.  The
Company shall have obtained in a timely fashion any and all consents, permits,
approvals, registrations and waivers necessary or appropriate for consummation
of the purchase and sale of the Securities, all of which shall be and remain so
long as necessary in full force and effect;

       

      (e)           Purchasers
Deliverables.  Each Purchaser shall have delivered its
Purchaser Deliverables in accordance with Section 2.2(b); and

       

      (f)           Termination. This
Agreement shall not have been terminated as to such Purchaser in accordance with
Section 6.16 herein.

      

      ARTICLE
VI.

      MISCELLANEOUS

       

      6.1           Fees and
Expenses.  The Company and the Purchasers shall each pay the
fees and expenses of their respective advisers, counsel, accountants and other
experts, if any, and all other expenses incurred by such party in connection
with the negotiation, preparation, execution, delivery and performance of this
Agreement.  The Company shall pay all Transfer Agents’ fees, stamp
taxes and other taxes and duties levied in connection with the sale and issuance
of the Securities to the Purchasers.

      
        
           

        

        
          26

          
            

          

        

        
           

        

      

      6.2           Entire
Agreement.  The Transaction Documents, together with the
Exhibits and Schedules thereto, contain the entire understanding of the parties
with respect to the subject matter hereof and supersede all prior agreements,
understandings, discussions and representations, oral or written, with respect
to such matters, which the parties acknowledge have been merged into such
documents, exhibits and schedules.  At or after the Closing, and
without further consideration, the Company and the Purchasers will execute and
deliver to the other such further documents as may be reasonably requested in
order to give practical effect to the intention of the parties under the
Transaction Documents.

       

      6.3           Notices.  Any
and all notices or other communications or deliveries required or permitted to
be provided hereunder shall be in writing and shall be deemed given and
effective on the earliest of (a) the date of transmission, if such notice or
communication is delivered via facsimile (provided the sender receives a
machine-generated confirmation of successful transmission) at the facsimile
number specified in this Section prior to 5:00 p.m. (New York City time) on a
Trading Day, (b) the next Trading Day after the date of transmission, if such
notice or communication is delivered via facsimile at the facsimile number
specified in this Section on a day that is not a Trading Day or later than 5:00
p.m. (New York City time) on any Trading Day, (c) the Trading Day following the
date of mailing, if sent by U.S. nationally recognized overnight courier service
with next day delivery specified, or (d) upon actual receipt by the party to
whom such notice is required to be given.  The address for such
notices and communications shall be as follows:

       

      If to the
Company:             
ZIOPHARM Oncology, Inc.

      1180 Avenue of the
Americas

      19th
Floor

      New York, New York 10036

      Telephone No.: (646)
214-0707

      Facsimile No.: (646)
214-0711

      Attention: Jonathan Lewis. M.D.,
Ph.D.

      

      With a
copy
to:                   Maslon
Edelman Borman & Brand, LLP

      3300 Wells Fargo Center

      90 South Seventh Street

      Minneapolis, MN 55402

      Telephone No.: (612)
672-8200

      Facsimile No.:   (612)
672-8397

      Attention: Alan M. Gilbert,
Esq.

      

      If to a
Purchaser:                 To
the address set forth under such Purchaser’s name on the signature page
hereof;

      

      or such
other address as may be designated in writing hereafter, in the same manner, by
such Person.

      

      6.4           Amendments; Waivers; No
Additional Consideration.  No provision of this Agreement may
be waived or amended except in a written instrument signed, in the case of an
amendment, by the Company and each of the Purchasers or, in the case of a
waiver, by the party against whom enforcement of any such waiver is
sought.  No waiver of any default with respect to any provision,
condition or requirement of this Agreement shall be deemed to be a continuing
waiver in the future or a waiver of any subsequent default or a waiver of any
other provision, condition or requirement hereof, nor shall any delay or
omission of either party to exercise any right hereunder in any manner impair
the exercise of any such right.  No consideration shall be offered or
paid to any Purchaser to amend or consent to a waiver or modification of any
provision of any Transaction Document unless the same consideration is also
offered to all Purchasers who then hold Securities.

      
        
           

        

        
          27

          
            

          

        

        
           

        

      

       

      6.5           Construction.  The
headings herein are for convenience only, do not constitute a part of this
Agreement and shall not be deemed to limit or affect any of the provisions
hereof.  The language used in this Agreement will be deemed to be the
language chosen by the parties to express their mutual intent, and no rules of
strict construction will be applied against any party.  This Agreement
shall be construed as if drafted jointly by the parties, and no presumption or
burden of proof shall arise favoring or disfavoring any party by virtue of the
authorship of any provisions of this Agreement or any of the Transaction
Documents.

       

      6.6           Successors and
Assigns.  The provisions of this Agreement shall inure to the
benefit of and be binding upon the parties and their successors and permitted
assigns.  This Agreement, or any rights or obligations hereunder, may
not be assigned by the Company without the prior written consent of the
Purchasers.  Any Purchaser may assign its rights hereunder in whole or
in part to any Person to whom such Purchaser assigns or transfers any Securities
in compliance with this Agreement and applicable law, provided such transferee
shall agree in writing to be bound, with respect to the transferred Securities,
by the terms and conditions of this Agreement that apply to the
“Purchasers”.

       

      6.7            No Third-Party
Beneficiaries.  This Agreement is intended for the benefit of
the parties hereto and their respective successors and permitted assigns and is
not for the benefit of, nor may any provision hereof be enforced by, any other
Person, except the Placement Agents are intended third party beneficiaries of
Article III hereof and each Placement Agent may enforce the provisions of such
Sections directly against the parties with obligations thereunder.

       

      6.8           Governing
Law.  All questions concerning the construction, validity,
enforcement and interpretation of this Agreement shall be governed by and
construed and enforced in accordance with the internal laws of the State of New
York, without regard to the principles of conflicts of law
thereof.  Each party agrees that all Actions concerning the
interpretations, enforcement and defense of the transactions contemplated by
this Agreement and any other Transaction Documents (whether brought against a
party hereto or its respective Affiliates, employees or agents) shall be
commenced exclusively in the New York Courts.  Each party hereto
hereby irrevocably submits to the exclusive jurisdiction of the New York Courts
for the adjudication of any dispute hereunder or in connection herewith or with
any transaction contemplated hereby or discussed herein (including with respect
to the enforcement of any of the Transaction Documents), and hereby irrevocably
waives, and agrees not to assert in any Action, any claim that it is not
personally subject to the jurisdiction of any such New York Court, or that such
Action has been commenced in an improper or inconvenient forum.  Each
party hereto hereby irrevocably waives personal service of process and consents
to process being served in any such Action by mailing a copy thereof via
registered or certified mail or overnight delivery (with evidence of delivery)
to such party at the address in effect for notices to it under this Agreement
and agrees that such service shall constitute good and sufficient service of
process and notice thereof.  Nothing contained herein shall be deemed
to limit in any way any right to serve process in any manner permitted by
law.  EACH PARTY
HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE
LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF
OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY.  If either party shall commence a Action to endorse any
provisions of a Transaction Document, then the prevailing party in such Action
shall be reimbursed by the other party for its reasonable attorney’s fees and
other reasonable costs and expenses incurred with the investigation preparation
and prosecution of such Action.

       

      6.9           Survival. Subject to
applicable statute of limitations, the representations, warranties, agreements
and covenants contained herein shall survive the Closing and the delivery of the
Securities until the one year anniversary of the Closing.

      
        
           

        

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

       

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

       

      6.12           Rescission and Withdrawal
Right.  Notwithstanding anything to the contrary contained in
(and without limiting any similar provisions of) the Transaction Documents,
whenever any Purchaser exercises a right, election, demand or option under a
Transaction Document and the Company does not timely perform its related
obligations within the periods therein provided, then such Purchaser may rescind
or withdraw, in its sole discretion from time to time upon written notice to the
Company, any relevant notice, demand or election in whole or in part without
prejudice to its future actions and rights.

       

      6.13           Replacement of
Securities.  If any certificate or instrument evidencing any
Securities is mutilated, lost, stolen or destroyed, the Company shall issue or
cause to be issued in exchange and substitution for and upon cancellation
thereof, or in lieu of and substitution therefor, a new certificate or
instrument, but only upon receipt of evidence reasonably satisfactory to the
Company and the Transfer Agent of such loss, theft or destruction and the
execution by the holder thereof of a customary lost certificate affidavit of
that fact and an agreement to indemnify and hold harmless the Company and the
Transfer Agent for any losses in connection therewith or, if required by the
Transfer Agent, a bond in such form and amount as is reasonably required by the
Transfer Agent.  The applicants for a new certificate or instrument
under such circumstances shall also pay any reasonable third-party costs
associated with the issuance of such replacement Securities.  If a
replacement certificate or instrument evidencing any Securities is requested due
to a mutilation thereof, the Company may require delivery of such mutilated
certificate or instrument as a condition precedent to any issuance of a
replacement.

       

      6.14           Adjustments in Share Numbers
and Prices. In the event of any stock split, subdivision, dividend or
distribution payable in shares of Common Stock (or other securities or rights
convertible into, or entitling the holder thereof to receive directly or
indirectly shares of Common Stock), combination or other similar
recapitalization or event occurring after the date hereof, each reference in any
Transaction Document to a number of shares or a price per share shall be deemed
to be amended to appropriately account for such event.

      
        
           

        

        
          29

          
            

          

        

        
           

        

      

      6.15           Independent Nature of
Purchasers' Obligations and Rights.  The obligations of each
Purchaser under any Transaction Document are several and not joint with the
obligations of any other Purchaser, and no Purchaser shall be responsible in any
way for the performance of the obligations of any other Purchaser under any
Transaction Document.  The decision of each Purchaser to purchase
Securities pursuant to the Transaction Documents has been made by such Purchaser
independently of any other Purchaser and independently of any information,
materials, statements or opinions as to the business, affairs, operations,
assets, properties, liabilities, results of operations, condition (financial or
otherwise) or prospects of the Company which may have been made or given by any
other Purchaser or by any agent or employee of any other Purchaser, and no
Purchaser and any of its agents or employees shall have any liability to any
other Purchaser (or any other Person) relating to or arising from any such
information, materials, statement or opinions.  Nothing contained
herein or in any Transaction Document, and no action taken by any Purchaser
pursuant thereto, shall be deemed to constitute the Purchasers as a partnership,
an association, a joint venture or any other kind of entity, or create a
presumption that the Purchasers are in any way acting in concert or as a group
with respect to such obligations or the transactions contemplated by the
Transaction Documents.  Each Purchaser acknowledges that no other
Purchaser has acted as agent for such Purchaser in connection with making its
investment hereunder and that no Purchaser will be acting as agent of such
Purchaser in connection with monitoring its investment in the Securities or
enforcing its rights under the Transaction Documents.  Each Purchaser
shall be entitled to independently protect and enforce its rights, including
without limitation the rights arising out of this Agreement or out of the other
Transaction Documents, and it shall not be necessary for any other Purchaser to
be joined as an additional party in any proceeding for such
purpose.  The Company acknowledges that each of the Purchasers has
been provided with the same Transaction Documents for the purpose of closing a
transaction with multiple Purchasers and not because it was required or
requested to do so by any Purchaser. The Company’s obligations to each Purchaser
under this Agreement are identical to its obligations to each other Purchaser
other than such differences resulting solely from the number of Securities
purchased by such Purchaser, but regardless of whether such obligations are
memorialized herein or in another agreement between the Company and a
Purchaser.

       

      6.16           Termination. This
Agreement may be terminated and the sale and purchase of the Shares and the
Warrants abandoned at any time prior to the Closing by either the Company or any
Purchaser (with respect to itself only) upon written notice to the other, if the
Closing has not been consummated on or prior to 5:00 p.m. (New York City time)
on the Outside Date; provided,
however, that the right to terminate this Agreement under this Section 6.16 shall
not be available to any Person whose failure to comply with its obligations
under this Agreement has been the cause of or resulted in the failure of the
Closing to occur on or before such time.  Nothing in this Section 6.16 shall be
deemed to release any party from any liability for any breach by such party of
the terms and provisions of this Agreement or the other Transaction Documents or
to impair the right of any party to compel specific performance by any other
party of its obligations under this Agreement or the other Transaction
Documents.  In the event of a termination pursuant to this Section,
the Company shall promptly notify all non-terminating
Purchasers.  Upon a termination in accordance with this Section, the
Company and the terminating Purchaser(s) shall not have any further obligation
or liability (including arising from such termination) to the other, and no
Purchaser will have any liability to any other Purchaser under the Transaction
Documents as a result therefrom.

      

      [REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]

      [SIGNATURE
PAGES FOLLOW]

      
        
           

        

        
          30

          
            

          

        

        
           

        

      

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

      

        
          
            
              
                
                  	
                          ZIOPHARM
      ONCOLOGY, INC.

                        
	 	 
	
                          By:  

                        	 
      
	 
      	
                          Name:

                        
	 
      	
                          Title:

                        

                

              

            

          

        

      

       

      [REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]

      [SIGNATURE
PAGES FOR PURCHASERS FOLLOW]

      

        
          
             

          

          
            
            

            
              

            

          

          
             

          

        

        

        
          
            
              
                
                  	
                          NAME OF PURCHASER:

                        	 
      

                

              

            

          

        

        

        
          
            
              
                
                  	
                          By:

                        	 
      
	
                          Name:

                        
	
                          Title:

                        

                

              

            

          

        

        

        
          
            
              
                
                  
                    
                      	
                              Purchase Price (Subscription Amount): $ 

                            	
                               

                            

                    

                  

                

              

            

          

        

        

        
          
            
              
                
                  	
                          Number of Shares to be acquired:

                        	 
      

                

              

            

          

        

        
          
            
              
                
                  	
                          Underlying Shares subject to Warrant:

                        	 
      

                

              

            

          

        

        
          
            
              
                
                  
                    
                      	
                              (100.0% of the number of Shares to be
      acquired)

                            
	 
      	 
      
	
                              Tax ID No.(or Social Security No., if a natural person):

                            
	 
      	 
      

                    

                  

                

              

            

          

        

        

        
          
            
              
                
                  
                    
                      
                        	
                                Address
      for Notice:

                              
	 
      	 
      
	 
      	 
      
	 
      	 
      
	 
      	 
      

                      

                    

                  

                

              

            

          

        

        

        
          
            
              
                
                  	
                          Telephone No.:

                        	 
      

                

              

            

          

        

        

        
          
            
              
                
                  	
                          Facsimile No.:

                        	 
      

                

              

            

          

        

        

        
          
            
              
                
                  	
                          Attention:

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