Document:

Exhibit 4.2

 

INVESTOR RIGHTS
AGREEMENT

 

This Investor
Rights Agreement (this “Agreement”) is made and entered into as of July 14,
2003 among Genetronics Biomedical Corporation, a Delaware corporation (the
“Company”), and each of the purchasers executing this Agreement and listed on Schedule
1 attached hereto (collectively, the “Purchasers”).

 

This Agreement
is being entered into pursuant to the Preferred Stock and Warrant Purchase
Agreement, dated as of the date hereof, by and among the Company and the Purchasers
(the “Purchase Agreement”).

 

The Company
and the Purchasers hereby agree as follows:

 

1.                                       Definitions.

 

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

 

“Advice”
shall have the meaning set forth in Section 3(m).

 

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

 

“Blackout
Period” shall have the meaning set forth in Section 3(n).

 

“Board”
shall have the meaning set forth in Section 3(n).

 

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

 

“Closing
Date” means the Closing Date as defined in the Purchase Agreement.

 

“Commission”
means the Securities and Exchange Commission.

 

“Common
Stock” means the Company’s Common Stock, par value $0.001 per share.

 

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

 

“Event”
shall have the meaning set forth in Section 7(e).

 

 

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

 

“Filing
Date” means the 60th day following the Closing Date.

 

“Holder”
or “Holders” means the holder or holders, as the case may be, from time
to time of Registrable Securities, including without limitation the Purchasers
and their assignees.

 

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

 

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

 

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

 

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

 

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

 

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

 

“Registrable
Securities” means (a) the Conversion Shares and the Warrant Shares (without
regard to any limitations on beneficial ownership contained in the Certificate
of Designation or Warrants) or other securities issued or issuable to each
Purchaser or its transferee or designee (i) upon conversion of the Preferred
Stock and/or upon exercise of the Warrants, or (ii) upon any dividend or
distribution with respect to, any exchange for or any replacement of such
Preferred Stock or Warrants or (iii) upon any conversion, exercise or exchange
of any securities issued in connection with any such distribution, exchange or
replacement; (b) securities issued or issuable upon any stock split, stock
dividend, recapitalization or similar event with respect to the foregoing; and
(c) any other security issued as a dividend or other distribution with respect
to, in exchange for, in replacement or redemption of, or in reduction of the
liquidation value of, any of the securities referred to in the preceding
clauses; provided, however, that such securities shall cease to be Registrable
Securities when such securities have been sold to or through a broker or dealer
or underwriter in a public distribution or a public securities transaction or
when such securities may be sold without any restriction pursuant to Rule
144(k) as determined by the counsel to the Company pursuant to a written
opinion letter, addressed to the Company’s transfer agent to such effect as
described in Section 2 of this Agreement.

 

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“Registration
Statement” means the registration statements and any additional
registration statements contemplated by Section 2, including (in each case) the
Prospectus, amendments and supplements to such registration statement or
Prospectus, including pre- and post-effective amendments, all exhibits thereto,
and all material incorporated by reference in such registration statement.

 

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

 

“Rule 158”
means Rule 158 promulgated by the Commission pursuant to the Securities Act, as
such Rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the Commission having substantially the same effect as
such Rule.

 

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

 

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

 

“Special
Counsel” means one special counsel to the Holders selected by a majority in
interest of the Holders with notice of such selection given to the Company.

 

“Warrant
Shares” means the shares of Common Stock issuable upon the exercise of the
warrants issued or to be issued to the Purchasers or their assignees or
designees in connection with the offering consummated under the Purchase
Agreement.

 

2.                                       Registration.
As soon as possible following the Closing Date (but not later than the Filing
Date), the Company shall prepare and file with the Commission a “shelf”
Registration Statement covering all Registrable Securities for a secondary or
resale offering to be made on a continuous basis pursuant to Rule 415. The
Registration Statement shall be on Form S-3 (or if such form is not available
to the Company on another form appropriate for such registration in accordance
herewith). The Company shall use its best efforts to cause the Registration
Statement to be declared effective under the Securities Act not later than one
hundred and twenty (120) days after the Closing Date (including filing with the
Commission a request for acceleration of effectiveness in accordance with Rule
12dl-2 promulgated under the Exchange Act within five (5) Business Days of the
date that the Company is notified (orally or in writing, whichever is earlier)
by the Commission that a Registration Statement will not be “reviewed,” or not
be subject to further review) and to keep such Registration Statement
continuously effective under the Securities Act until such date as is the
earlier of (x) the date when all Registrable Securities covered by such
Registration Statement have been sold or (y) the date on which the Registrable
Securities may be sold without any restriction pursuant to Rule 144(k) as
determined by the counsel to the Company pursuant to a written opinion letter,
addressed to the Company’s transfer agent to such effect (the

 

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“Effectiveness Period”). Upon the initial
filing thereof, the Registration Statement shall cover at least 100% of the
shares of Common Stock for issuance upon the conversion of the Preferred Stock
and 100% of the shares of Common Stock for issuance upon the exercise of the
Warrants.  Such Registration Statement
also shall cover, to the extent allowable under the Securities Act and the
Rules promulgated thereunder (including Securities Act Rule 416), such
indeterminate number of additional shares of Common Stock resulting from stock
splits, stock dividends or similar transactions with respect to the Registrable
Securities.

 

3.                                       Registration
Procedures.

 

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

 

(a) Prepare
and file with the Commission on or prior to the Filing Date, a Registration
Statement on Form S-3 (or if such form is not available to the Company on
another form appropriate for such registration in accordance herewith) (which
shall include a Plan of Distribution substantially in the form of Exhibit A
attached hereto), and cause the Registration Statement to become effective and
remain effective as provided herein; provided, however, that not less than
three (3) Business Days prior to the filing of the Registration Statement or
any related Prospectus or any amendment or supplement thereto, the Company
shall (i) furnish to the Special Counsel, copies of all such documents proposed
to be filed, which documents (other than those incorporated by reference) will
be subject to the review of such Special Counsel, and (ii) at the request of
any Holder cause its officers and directors, counsel or independent certified
public accountants, as applicable, to respond to such inquiries as shall be
necessary, in the reasonable opinion of counsel to such Holders, to conduct a
reasonable investigation within the meaning of the Securities Act. The Company
shall not file the Registration Statement or any such Prospectus or any
amendments or supplements thereto to which the Holders of a majority of the
Registrable Securities or the Special Counsel shall reasonably object within
three (3) Business Days after the Special Counsel’s receipt thereof.

 

(b)                                 (i)
Prepare and file with the Commission such amendments, including post-effective
amendments, to the Registration Statement as may be necessary to keep the
Registration Statement continuously effective as to the applicable Registrable
Securities for the Effectiveness Period and to the extent any Registrable
Securities are not included in such Registration Statement for reasons other
than the failure of the Holder to comply with Section 3(m) hereof, shall
prepare and file with the Commission such additional Registration Statements in
order to register for resale under the Securities Act all Registrable
Securities; (ii) cause the related Prospectus to be amended or supplemented by
any required Prospectus supplement, and as so supplemented or amended to be
filed pursuant to Rule 424 (or any similar provisions then in force)
promulgated under the Securities Act; (iii) respond as promptly as possible,
and in no event later than 10 business days, to any comments received from the
Commission with respect to the Registration Statement or any amendment thereto
and as promptly as possible provide the Holders true and complete copies of all
correspondence from and to the Commission relating to the Registration Statement;
and (iv) comply in all material respects with the provisions of the Securities
Act and the Exchange Act with respect to the disposition of all Registrable
Securities covered by the Registration

 

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Statement during the Effectiveness Period in
accordance with the intended methods of disposition by the Holders thereof set
forth in the Registration Statement as so amended or in such Prospectus as so
supplemented.

 

(c)                                  Notify
the Holders of Registrable Securities to be sold and the Special Counsel as
promptly as possible (A) when a Prospectus or any Prospectus supplement or
post-effective amendment to the Registration Statement is proposed to be filed
(but in no event in the case of this subparagraph (A), less than three (3)
Business Days prior to date of such filing); (B) when the Commission notifies
the Company whether there will be a “review” of such Registration Statement and
whenever the Commission comments in writing on such Registration Statement; and
(C) with respect to the Registration Statement or any post-effective amendment,
when the same has become effective, and after the effectiveness thereof: (i) of
any request by the Commission or any other Federal or state governmental
authority for amendments or supplements to the Registration Statement or
Prospectus or for additional information; (ii) of the issuance by the
Commission of any stop order suspending the effectiveness of the Registration
Statement covering any or all of the Registrable Securities or the initiation
of any Proceedings for that purpose; (iii) if at any time any of the
representations and warranties of the Company contained in any agreement
contemplated hereby ceases to be true and correct in all material respects;
(iv) of the receipt by the Company of any notification with respect to the
suspension of the qualification or exemption from qualification of any of the
Registrable Securities for sale in any jurisdiction, or the initiation or
threatening of any Proceeding for such purpose; and (v) if the financial
statements included in the Registration Statement become ineligible for
inclusion therein or of the occurrence of any event that makes any statement
made in the Registration Statement or Prospectus or any document incorporated or
deemed to be incorporated therein by reference untrue in any material respect
or that requires any revisions to the Registration Statement, Prospectus or
other documents so that, in the case of the Registration Statement or the
Prospectus, as the case may be, it will not contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading.

 

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

 

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

 

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

 

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

 

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

 

(i)                                     Cooperate
with the Holders to facilitate the timely preparation and delivery of
certificates representing Registrable Securities to be sold pursuant to a
Registration Statement, which certificates shall be free, to the extent
permitted by applicable law and the Purchase Agreement, of all restrictive
legends, and to enable such Registrable Securities to be in such denominations
and registered in such names as any Holder may request at least two (2)
Business Days prior to any sale of Registrable Securities. In connection
therewith, the Company shall promptly after the effectiveness of the
Registration Statement cause an opinion of counsel to be delivered to and
maintained with its transfer agent, together with any other authorizations,
certificates and directions required by the transfer agent, which authorize and
direct the transfer agent to issue such Registrable Securities without legend
upon sale by the Holder of such shares of Registrable Securities under the
Registration Statement.

 

(j)                                     Upon
the occurrence of any event contemplated by Section 3(c)(v), as promptly as
possible, prepare a supplement or amendment, including a post-effective
amendment, to the Registration Statement or a supplement to the related
Prospectus or any document incorporated or deemed to be incorporated therein by
reference, and file any other required document so that, as thereafter
delivered, neither the Registration Statement nor such Prospectus will contain
an untrue statement of a material fact or omit to state a material

 

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fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading.

 

(k)                                  Cause
all Registrable Securities relating to such Registration Statement to be listed
on the American Stock Exchange and any other United States securities exchange,
quotation system, market or over-the-counter bulletin board, if any, on which
similar securities issued by the Company are then listed as and when required
pursuant to the Purchase Agreement.

 

(l)                                     Comply
in all material respects with all applicable rules and regulations of the
Commission and make generally available to its security holders earning
statements satisfying the provisions of Section 11(a) of the Securities Act and
Rule 158 not later than 45 days after the end of any 3-month period (or 90 days
after the end of any 12-month period if such period is a fiscal year)
commencing on the first day of the first fiscal quarter of the Company after
the effective date of the Registration Statement, which statement shall conform
to the requirements of Rule 158.

 

(m)                               Request
each selling Holder to furnish to the Company information regarding such Holder
and the distribution of such Registrable Securities as is required by law or
the Commission to be disclosed in the Registration Statement, and the Company
may exclude from such registration the Registrable Securities of any such
Holder who fails to furnish such information within a reasonable time prior to
the filing of each Registration Statement, supplemented Prospectus and/or
amended Registration Statement.

 

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

 

Each Holder
agrees by its acquisition of such Registrable Securities that, upon receipt of
a notice from the Company of the occurrence of any event of the kind described
in Section 3(c)(i), 3(c)(ii), 3(c)(iii), 3(c)(iv), 3(c)(v) or 3(n), such Holder
will forthwith discontinue disposition of such Registrable Securities under the
Registration Statement until such Holder’s receipt of the copies of the
supplemented Prospectus and/or amended Registration Statement contemplated by
Section 3(j), or until it is advised in writing (the “Advice”) by the Company
that the use of the applicable Prospectus may be resumed, and, in either case,
has received copies of any additional or supplemental filings that are
incorporated or deemed to be incorporated by reference in such Prospectus or
Registration Statement.

 

(n)                                 If
(i) there is material non-public information regarding the Company which the
Company’s Board of Directors (the “Board”) reasonably determines not to be in
the Company’s best interest to disclose and which the Company is not otherwise
required to disclose, or (ii) there is a significant business opportunity
(including, but not limited to, the acquisition or disposition of assets (other
than in the ordinary course of business) or any

 

7

 

merger, consolidation, tender offer or other
similar transaction) available to the Company which the Board reasonably
determines not to be in the Company’s best interest to disclose and which the
Company would be required to disclose under the Registration Statement, then
the Company may postpone or suspend filing or effectiveness of a registration
statement for a period not to exceed 30 consecutive days, provided that the
Company may not postpone or suspend its obligation under this Section 3(n) for
more than 45 days in the aggregate during any 12 month period (each, a
“Blackout Period”).

 

4.                                       Registration
Expenses.

 

All fees and
expenses incident to the performance of or compliance with this Agreement by
the Company shall be borne by the Company whether or not the Registration
Statement is filed or becomes effective and whether or not any Registrable
Securities are sold pursuant to the Registration Statement. The fees and
expenses referred to in the foregoing sentence shall include, without
limitation, (i) all registration and filing fees (including, without
limitation, fees and expenses (A) with respect to filings required to be made
with the American Stock Exchange and each other securities exchange, quotation
system, market or over-the-counter bulletin board on which Registrable
Securities are required hereunder to be listed, (B) with respect to filings
required to be made with the Commission, and (C) in compliance with state or
provincial securities or Blue Sky laws (including, without limitation, fees and
disbursements of Special Counsel in connection with Blue Sky qualifications of
the Registrable Securities and determination of the eligibility of the
Registrable Securities for investment under the laws of such jurisdictions as
the Holders of a majority of Registrable Securities may designate)), (ii)
printing expenses (including, without limitation, expenses of printing
certificates for Registrable Securities and of printing or photocopying
prospectuses), (iii) messenger, telephone and delivery expenses, (iv)
Securities Act liability insurance, if the Company so desires such insurance,
(v) fees and expenses of all other Persons retained by the Company in
connection with the consummation of the transactions contemplated by this Agreement,
including, without limitation, the Company’s independent public accountants
(including, in the case of an underwritten offering, the expenses of any
comfort letters or costs associated with the delivery by independent public
accountants of a comfort letter or comfort letters) and legal counsel, and (vi)
fees and expenses of the Special Counsel in connection with any Registration
Statement hereunder. In addition, the Company shall be responsible for all of
its internal expenses incurred in connection with the consummation of the
transactions contemplated by this Agreement (including, without limitation, all
salaries and expenses of its officers and employees performing legal or
accounting duties), the expense of any annual audit, the fees and expenses
incurred in connection with the listing of the Registrable Securities on any
securities exchange as required hereunder.

 

5.                                       Indemnification.

 

(a)                                  Indemnification
by the Company. The Company shall, notwithstanding any termination of this
Agreement, indemnify and hold harmless each Holder, the officers, directors,
partners, agents, brokers (including brokers who offer and sell Registrable
Securities as principal as a result of a pledge or any failure to perform under
a margin call of Common Stock), investment advisors and employees of each of
them, each Person who

 

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controls any such Holder (within the meaning
of Section 15 of the Securities Act or Section 20 of the Exchange Act) and the
officers, directors, agents and employees of each such controlling Person, to
the fullest extent permitted by applicable law, from and against any and all
losses, claims, damages, liabilities, costs (including, without limitation,
costs of preparation and reasonable attorneys’ fees) and expenses
(collectively, “Losses”), as incurred, arising out of or relating to any untrue
or alleged untrue statement of a material fact contained or incorporated by
reference in the Registration Statement, any Prospectus or any form of prospectus
or in any amendment or supplement thereto or in any preliminary prospectus, or
arising out of or relating to any omission or alleged omission of a material
fact required to be stated therein or necessary to make the statements therein
(in the case of any Prospectus or form of prospectus or amendment or supplement
thereto, in the light of the circumstances under which they were made) not
misleading, except to the extent, but only to the extent, that (i) such untrue
statements or omissions are based solely upon information regarding such Holder
furnished in writing to the Company by such Holder expressly for use therein,
which information was reasonably relied on by the Company for use therein or to
the extent that such information relates to (x) such Holder and was reviewed
and expressly approved in writing by such Holder expressly for use in the
Registration Statement, such Prospectus or such form of prospectus or in any
amendment or supplement thereto or (y) such Holder’s proposed method of
distribution of Registrable Securities as set forth in Exhibit A (or as such
Holder otherwise informs the Company in writing); or (ii) in the case of an
occurrence of an event of the type described in Section 3(c)(ii), 3(c)(iii),
3(c)(iv), 3(c)(v) or 3(n), the use by a Holder of an outdated or defective
Prospectus after the delivery to the Holder of written notice from the Company
that the Prospectus is outdated or defective and prior to the receipt by such
Holder of the Advice contemplated in Section 3(m). The Company shall notify the
Holders promptly of the institution, threat or assertion of any Proceeding of
which the Company is aware in connection with the transactions contemplated by
this Agreement. Such indemnity shall remain in full force and effect regardless
of any investigation made by or on behalf of an Indemnified Party (as defined
in Section 5(c) to this Agreement) and shall survive the transfer of the
Registrable Securities by the Holders.

 

(b)                                 Indemnification
by Holders. Each Holder shall, severally and not jointly, indemnify and
hold harmless the Company, its directors, officers, agents and employees, each
Person who controls the Company (within the meaning of Section 15 of the
Securities Act and Section 20 of the Exchange Act), and the directors, officers,
agents and employees of such controlling Persons, to the fullest extent
permitted by applicable law, from and against all Losses, as incurred, arising
solely out of or based solely upon any untrue statement of a material fact
contained in the Registration Statement, any Prospectus, or any form of
prospectus, or in any amendment or supplement thereto, or arising solely out of
or based solely upon any omission of a material fact required to be stated
therein or necessary to make the statements therein (in the case of any
Prospectus or form of prospectus or supplement thereto, in the light of the
circumstances under which they were made) not misleading, to the extent, but
only to the extent, that (i) such untrue statement or omission is contained in
or omitted from any information so furnished in writing by such Holder to the
Company specifically for inclusion in the Registration Statement or such
Prospectus and that such information was reasonably relied upon by the Company
for use in the Registration Statement, such Prospectus, or in any amendment or
supplement thereto, or to the extent that

 

9

 

such information relates to (x) such Holder
and was reviewed and expressly approved in writing by such Holder expressly for
use in the Registration Statement, such Prospectus, or such form of prospectus
or in any amendment or supplement thereto or (y) such Holder’s proposed method
of distribution of Registrable Securities as set forth in Exhibit A (or as such
Holder otherwise informs the Company in writing) or (ii) in the case of an
occurrence of an event of the type described in Section 3(c)(ii), 3(c)(iii),
3(c)(iv), 3(c)(v) or 3(n), the use by a Holder of an outdated or defective
Prospectus after the delivery to the Holder of written notice from the Company
that the Prospectus is outdated or defective and prior to the receipt by such
Holder of the Advice contemplated in Section 3(m); provided, however, that the
indemnity agreement contained in this Section 5(b) shall not apply to amounts
paid in settlement of any Losses if such settlement is effected without the
prior written consent of the Holder, which consent shall not be unreasonably
withheld. Notwithstanding anything to the contrary contained herein, the Holder
shall be liable under this Section 5(b) for only that amount as does not exceed
the net proceeds to such Holder as a result of the sale of Registrable
Securities pursuant to such Registration Statement.

 

(c)                                  Conduct
of Indemnification Proceedings. If any Proceeding shall be brought or
asserted against any Person entitled to indemnity hereunder (an “Indemnified
Party”), such Indemnified Party promptly shall notify the Person from whom
indemnity is sought (the “Indemnifying Party”) in writing, and the Indemnifying
Party shall assume the defense thereof, including the employment of counsel
reasonably satisfactory to the Indemnified Party and the payment of all
reasonable fees and expenses incurred in connection with defense thereof;
provided, that the failure of any Indemnified Party to give such notice shall
not relieve the Indemnifying Party of its obligations or liabilities pursuant
to this Agreement, except (and only) to the extent that it shall be finally
determined by a court of competent jurisdiction (which determination is not
subject to appeal or further review) that such failure shall have proximately
and materially adversely prejudiced the Indemnifying Party.

 

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

 

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Proceeding and does not impose any monetary
or other obligation or restriction on the Indemnified Party.

 

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

 

(d)                                 Contribution.
If a claim for indemnification under Section 5(a) or 5(b) is unavailable to an
Indemnified Party because of a failure or refusal of a governmental authority
to enforce such indemnification in accordance with its terms (by reason of
public policy or otherwise), then each Indemnifying Party, in lieu of
indemnifying such Indemnified Party, shall contribute to the amount paid or
payable by such Indemnified Party as a result of such Losses, in such
proportion as is appropriate to reflect the relative fault of the Indemnifying
Party and Indemnified Party in connection with the actions, statements or
omissions that resulted in such Losses as well as any other relevant equitable
considerations. The relative fault of such Indemnifying Party and Indemnified
Party shall be determined by reference to, among other things, whether any
action in question, including any untrue or alleged untrue statement of a
material fact or omission or alleged omission of a material fact, has been taken
or made by, or relates to information supplied by, such Indemnifying, Party or
Indemnified Party, and the parties’ relative intent, knowledge, access to
information and opportunity to correct or prevent such action, statement or
omission. The amount paid or payable by a party as a result of any Losses shall
be deemed to include, subject to the limitations set forth in Section 5(c), any
reasonable attorneys’ or other reasonable fees or expenses incurred by such
party in connection with any Proceeding to the extent such party would have
been indemnified for such fees or expenses if the indemnification provided for
in this Section was available to such party in accordance with its terms.
Notwithstanding anything to the contrary contained herein, the Holder shall be
required to contribute under this Section 5(d) for only that amount as does not
exceed the net proceeds to such Holder as a result of the sale of Registrable
Securities pursuant to such Registration Statement.

 

The parties
hereto agree that it would not be just and equitable if contribution pursuant
to this Section 5(d) were determined by pro rata allocation or by any other
method of allocation that does not take into account the equitable
considerations referred to in the immediately preceding paragraph. No Person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any Person who was
not guilty of such fraudulent misrepresentation.

 

The indemnity
and contribution agreements contained in this Section are in addition to any
liability that the Indemnifying Parties may have to the Indemnified Parties.
The indemnity and contribution agreements herein are in addition to and not in
diminution or

 

11

 

limitation of any indemnification provisions
under the Purchase Agreement.

 

6.                                       Rule
144.

 

As long as any
Holder owns Preferred Stock, Conversion Shares, Warrants or Warrant Shares, the
Company covenants to timely file (or obtain extensions in respect thereof and
file within the applicable grace period) all reports required to be filed by
the Company after the date hereof pursuant to Section 13(a) or 15(d) of the
Exchange Act. As long as any Holder owns Preferred Stock, Conversion Shares,
Warrants or Warrant Shares, if the Company is not required to file reports
pursuant to Section 13(a) or 15(d) of the Exchange Act, it will prepare and
furnish to the Holders and make publicly available in accordance with Rule
144(c) promulgated under the Securities Act annual and quarterly financial
statements, together with a discussion and analysis of such financial
statements in form and substance substantially similar to those that would
otherwise be required to be included in reports required by Section 13(a) or
15(d) of the Exchange Act, as well as any other information required thereby,
in the time period that such filings would have been required to have been made
under the Exchange Act. The Company further covenants that it will take such
further action as any Holder may reasonably request in writing, all to the
extent required from time to time to enable such Person to sell Conversion
Shares and Warrant Shares without registration under the Securities Act within
the limitation of the exemptions provided by Rule 144 promulgated under the
Securities Act, including compliance with the provisions of the Purchase
Agreement relating to the transfer of the Conversion Shares and Warrant Shares.
Upon the request of any Holder, in writing, the Company shall deliver to such
Holder a written certification of a duly authorized officer as to whether it
has complied with such requirements.

 

7.                                       Miscellaneous.

 

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

 

(b)                                 No
Inconsistent Agreements. Except as otherwise disclosed in the Purchase
Agreement, neither the Company nor any of its subsidiaries is a party to an
agreement currently in effect, nor shall the Company or any of its
subsidiaries, on or after the date of this Agreement, enter into any agreement
with respect to its securities that is inconsistent with the rights granted to the
Holders in this Agreement or otherwise conflicts with the provisions hereof.
Without limiting the generality of the foregoing, without the written consent
of the Holders of a majority of the then outstanding Registrable Securities,
the Company shall not grant to any Person the right to request the Company to
register any securities of the Company under the Securities Act unless the
rights so granted are subject in

 

12

 

all respects to the prior rights in full of
the Holders set forth herein, and are not otherwise in conflict with the
provisions of this Agreement.

 

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

 

(d)                                 Piggy-Back
Registrations. If at any time when there is not an effective Registration
Statement covering all of the Registrable Securities, the Company shall
determine to prepare and file with the Commission a registration statement
relating to an offering for its own account or the account of others under the
Securities Act of any of its equity securities, other than on Form S-4 or Form
S-8 (each as promulgated under the Securities Act) or its then equivalents
relating to equity securities to be issued solely in connection with any
acquisition of any entity or business or equity securities issuable in connection
with stock option or other employee benefit plans, the Company shall send to
each Holder of Registrable Securities written notice of such determination and,
if within seven (7) Business Days after receipt of such notice, any such Holder
shall so request in writing (which request shall specify the Registrable
Securities intended to be disposed of by the Holder), the Company will cause
the registration under the Securities Act of all Registrable Securities which
the Company has been so requested to register by the Holder, to the extent
required to permit the disposition of the Registrable Securities so to be
registered, provided that if at any time after giving written notice of its
intention to register any securities and prior to the effective date of the registration
statement filed in connection with such registration, the Company shall
determine for any reason not to register or to delay registration of such
securities, the Company may, at its election, give written notice of such
determination to such Holder and, thereupon, (i) in the case of a determination
not to register, shall be relieved of its obligation to register any
Registrable Securities in connection with such registration (but not from its
obligation to pay expenses in accordance with Section 4 hereof), and (ii) in
the case of a determination to delay registering, shall be permitted to delay
registering any Registrable Securities being registered pursuant to this
Section 7(d) for the same period as the delay in registering such other securities.
The Company shall include in such registration statement all or any part of
such Registrable Securities such Holder requests to be registered; provided,
however, that the Company shall not be required to register any Registrable
Securities pursuant to this Section 7(d) that are eligible for sale pursuant to
Rule 144(k) of the Securities Act. In the case of an underwritten public
offering, if the managing underwriter(s) or underwriter(s) should reasonably
object to the inclusion of the Registrable Securities in such registration
statement, then if the Company after consultation with the managing underwriter
should reasonably determine that the inclusion of such Registrable Securities,
would materially adversely affect the offering contemplated in such registration
statement, and based on such determination recommends inclusion in such
registration statement of fewer or none of the Registrable Securities of the
Holders, then (x) the number of Registrable Securities of the Holders included
in such registration statement shall be reduced pro-rata among such Holders
(based upon the number

 

13

 

of Registrable Securities requested to be
included in the registration), if the Company after consultation with the underwriter(s)
recommends the inclusion of fewer Registrable Securities, or (y) none of the
Registrable Securities of the Holders shall be included in such registration
statement, if the Company after consultation with the underwriter(s) recommends
the inclusion of none of such Registrable Securities; provided, however, that
if securities are being offered for the account of other persons or entities as
well as the Company, such reduction shall not represent a greater fraction of
the number of Registrable Securities intended to be offered by the Holders than
the fraction of similar reductions imposed on such other persons or entities
(other than the Company).

 

(e)                                  Failure
to File Registration Statement and Other Events. The Company and the
Holders agree that the Holders will suffer damages if the Registration
Statement is not filed on or prior to the sixtieth (60th) day following the
Closing Date and maintained in the manner contemplated herein during the
Effectiveness Period. The Company and the Holders further agree that it would
not be feasible to ascertain the extent of such damages with precision.
Accordingly, if (i) the Registration Statement is not filed on or prior to the
sixtieth (60th) day following the Closing Date, or (ii) except as otherwise
permitted herein, the Company intentionally and willfully fails to file with
the Commission a request for acceleration in accordance with Rule 12d1-2
promulgated under the Exchange Act within five (5) Business Days of the date
that the Company is notified (orally or in writing, whichever is earlier) by
the Commission that a Registration Statement will not be “reviewed,” or not
subject to further review, or (iii) the Registration Statement is filed with
and declared effective by the Commission but thereafter ceases to be effective
as to all Registrable Securities at any time prior to the expiration of the
Effectiveness Period due to an intentional and willful act by the Company,
without being succeeded immediately by a subsequent Registration Statement
filed with the Commission, except as otherwise permitted by this Agreement,
including pursuant to Section 3(n), or (iv) trading in the Common Stock shall
be suspended or if the Common Stock is delisted from the American Stock
Exchange or any other securities exchange, quotation system, market or
over-the-counter bulletin board on which Registrable Securities are required
hereunder to be listed (each an “Exchange”), without immediately being listed
on any other Exchange, for any reason for more than one (1) Business Day, other
than pursuant to Section 3(n), due to an intentional and willful act by the
Company, or (v) the conversion rights of the Holders are suspended due to an
intentional and willful act by the Company without the consent of the
particular Holder other than as set forth in the Certificate of Designation, or
(vi) the Company has breached Section 3(n) of this Agreement (any such failure
or breach being referred to as an “Event”), the Company shall pay in cash as
liquidated damages for such failure and not as a penalty to each Holder an
amount equal to one percent (1%) of such Holder’s pro rata share of the
purchase price paid by all Holders for Preferred Stock purchased and then
outstanding pursuant to the Purchase Agreement for the initial thirty (30) day
period until the applicable Event has been cured or until the Preferred Stock
has been redeemed (whichever is earlier), which shall be pro rated for such
periods less than thirty (30) days and one percent (1%) of such Holder’s pro
rata share of the purchase price paid by all Holders for Preferred Stock
purchased and then outstanding pursuant to the Purchase Agreement for each
subsequent thirty (30) day period until the applicable Event has been cured
which shall be pro rated for such periods less than thirty days (the “Periodic
Amount”). Payments to be made pursuant to this Section 7(e) shall be due and
payable immediately upon demand in immediately available cash funds. The

 

14

 

parties agree that the Periodic Amount
represents a reasonable estimate on the part of the parties, as of the date of
this Agreement, of the amount of damages that may be incurred by the Holders if
the Registration Statement is not filed on or prior to the sixtieth (60th) day
following the Closing Date and maintained in the manner contemplated herein
during the Effectiveness Period or if any other Event as described herein has
occurred.

 

(f)                                    Specific
Enforcement, Consent to Jurisdiction.

 

(i)                                     The
Company and the Holders acknowledge and agree that irreparable damage would
occur in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise breached.
It is accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent or cure breaches of the provisions of this Agreement and
to enforce specifically the terms and provisions hereof, this being in addition
to any other remedy to which any of them may be entitled by law or equity.

 

(ii)                                  Each
of the Company and the Holders (i) hereby irrevocably submits to the exclusive
jurisdiction of the state and federal courts located in New York City, New York
for the purposes of any suit, action or proceeding arising out of or relating
to this Agreement and (ii) hereby waives, and agrees not to assert in any such
suit, action or proceeding, any claim that it is not personally subject to the
jurisdiction of such court, that the suit, action or proceeding is brought in
an inconvenient forum or that the venue of the suit, action or proceeding is
improper. Each of the Company and the Holders consents to process being served
in any such suit, action or proceeding by mailing a copy thereof 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 in this Section 7(f) shall affect or limit any right to serve
process in any other manner permitted by law.

 

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

 

(h)                                 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 earlier of (i) the date of transmission, if such notice or
communication is delivered via facsimile at the facsimile telephone number
specified for notice prior to 5:00 p.m., New York City time, on a Business Day,
(ii) the next Business 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 Business Day or later than 5:00 p.m.,

 

15

 

New York City time, on any date and earlier
than 11:59 p.m., New York City time, on such date, (iii) the Business Day
following the date of mailing, if sent by nationally recognized overnight
courier service such as Federal Express or (iv) actual receipt by the party to
whom such notice is required to be given. The addresses for such communications
shall be with respect to each Holder at its address set forth under its name on
Schedule 1 attached hereto, or with respect to the Company, addressed
to:

 

Genetronics
Biomedical Corporation

11199 Sorrento
Valley Road

San Diego, CA
92121-1334

Attention:  Mr. Peter Kies, Chief Financial Officer

Facsimile
No.:  858-597-0451

 

or to such
other address or addresses or facsimile number or numbers as any such party may
most recently have designated in writing to the other parties hereto by such
notice. Copies of notices to the Company shall be sent to Kirkpatrick &
Lockhart, LLP, 10100 Santa Monica Boulevard, 7th Floor, Los Angeles, CA, 90067,
Attention: Mr. Thomas Poletti, Esq, Facsimile: 310- 552-5001. Copies
of notices to any Holder shall be sent to the addresses, if any, listed on Schedule
1 attached hereto.

 

(i)                                     Successors
and Assigns. This Agreement shall be binding upon and inure to the benefit
of the parties and their successors and permitted assigns and shall inure to
the benefit of each Holder and its successors and assigns; provided, that the
Company may not assign this Agreement or any of its rights or obligations
hereunder without the prior written consent of Holders holding a majority of
the Registrable Securities; and provided, further, that each Holder may assign
its rights hereunder in the manner and to the Persons as permitted under the
Purchase Agreement.

 

(j)                                     Assignment
of Registration Rights. The rights of each Holder hereunder, including the
right to have the Company register for resale Registrable Securities in
accordance with the terms of this Agreement, shall be automatically assignable
by each Holder to any transferee of such Holder of all or a portion of the
Preferred Stock, the Warrants or the Registrable Securities if: (i) the Holder
agrees in writing with the transferee or assignee to assign such rights, and a
copy of such agreement is furnished to the Company within a reasonable time
after such assignment, (ii) the Company is, within a reasonable time after such
transfer or assignment, furnished with written notice of (a) the name and
address of such transferee or assignee, and (b) the securities with respect to
which such registration rights are being transferred or assigned, (iii)
following such transfer or assignment the further disposition of such
securities by the transferee or assignees is restricted under the Securities
Act and applicable state securities laws, (iv) at or before the time the Company
receives the written notice contemplated by clause (ii) of this Section 7(j),
the transferee or assignee agrees in writing with the Company to be bound by
all of the provisions of this Agreement, and (v) such transfer shall have been
made in accordance with the applicable requirements of the Purchase Agreement
and applicable securities legislation. The rights to assignment shall apply to
the Holders (and to subsequent) successors and assigns.

 

The Company
may require, as a condition of allowing such assignment in connection

 

16

 

with a transfer of Preferred Stock, Warrants
or Registrable Securities (i) that the Holder or transferee of all or a portion
of the Preferred Stock, the Warrants or the Registrable Securities as the case
may be, furnish to the Company a written opinion of counsel that is reasonably
acceptable to the Company to the effect that such transfer may be made without
registration under the Securities Act, (ii) that the Holder or transferee execute
and deliver to the Company an investment letter in form and substance
acceptable to the Company and (iii) that the transferee be an “accredited
investor” as defined in Rule 501(a) promulgated under the Securities Act.

 

(k)                                  Counterparts;
Facsimile. This Agreement may be executed in any number of counterparts,
each of which when so executed shall be deemed to be an original and, all of
which taken together shall constitute one and the same Agreement. In the event
that any signature is delivered by facsimile transmission, such signature shall
create a valid binding obligation of the party executing (or on whose behalf
such signature is executed) the same with the same force and effect as if such
facsimile signature were the original thereof.

 

(l)                                     Governing
Law. This Agreement shall be governed by and construed in accordance with
the laws of the State of New York, without regard to principles of conflicts of
law thereof.

 

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

 

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

 

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

 

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

 

[signature page follows]

 

17

 

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

 

	
  COMPANY:

  
	
   

  
	
  GENETRONICS BIOMEDICAL CORPORATION

  
	
   

  
	
   

  
	
  By:

  	
  /s/ James L.
  Heppell

  	
   

  
	
  Name: James
  L. Heppell

  
	
  Title:
  Chairman

  

 

18

 

	
  PURCHASERS:

  
	
   

  
	
  Print Exact
  Name:

  	
  East Hudson
  Inc. (BVI)

  	
   

  
	
   

  
	
   

  
	
  By:

  	
  /s/ Andrew
  Zacks

  	
   

  
	
  Name: Andrew
  Zacks

  
	
  Title:
  Managing Director, Investment Mgr.

  
				

 

 

[Omnibus Investor Rights Agreement Signature Page]

 

19

 

 

	
  PURCHASERS:

  
	
   

  
	
  Print Exact
  Name:

  	
  The Conus
  Fund L.P.

  	
   

  
	
   

  
	
   

  
	
  By:

  	
  /s/ Andrew
  Zacks

  	
   

  
	
  Name: Andrew
  Zacks

  
	
  Title:
  Managing Member, G.P.

  
				

 

 

[Omnibus Investor Rights Agreement Signature Page]

 

20

 

 

	
  PURCHASERS:

  
	
   

  
	
  Print Exact
  Name:

  	
  The Conus
  Fund Offshore Ltd.

  	
   

  
	
   

  
	
   

  
	
  By:

  	
  /s/ Andrew
  Zacks

  	
   

  
	
  Name: Andrew
  Zacks

  
	
  Title:
  Managing Director, Investment Manager

  
				

 

 

[Omnibus Investor Rights Agreement Signature Page]

 

21

 

 

	
  PURCHASERS:

  
	
   

  
	
  Print Exact
  Name:

  	
  The Conus
  Fund (QP) L.P.

  	
   

  
	
   

  
	
   

  
	
  By:

  	
  /s/ Andrew
  Zacks

  	
   

  
	
  Name: Andrew
  Zacks

  
	
  Title:
  Managing Member, G.P.

  
				

 

 

[Omnibus Investor Rights Agreement Signature Page]

 

22

 

 

	
  PURCHASERS:

  
	
   

  
	
  Print Exact
  Name:

  	
  Kinetic
  Capital Limited Partnership

  	
   

  
	
   

  
	
   

  
	
  By:

  	
  /s/ Frank
  Barker

  	
  /s/ Dallas
  Ross

  	
   

  
	
  Name: Frank
  Barker

  	
  Dallas Ross

  	
   

  
	
  Title:
  Partner

  	
  Partner

  	
   

  
					

 

 

[Omnibus Investor Rights Agreement Signature Page]

 

23

 

	
  PURCHASERS:

  
	
   

  
	
  Print Exact
  Name:

  	
  JR Jay
  Public Investments

  	
   

  
	
   

  
	
   

  
	
  By:

  	
  /s/ Jeffrey
  R. Jay

  	
   

  
	
  Name:
  Jeffrey R. Jay

  
	
  Title:
  Chairman and CEO

  
				

 

 

[Omnibus Investor Rights Agreement Signature Page]

 

24

 

	
  PURCHASERS:

  
	
   

  
	
  Print Exact
  Name:

  	
  RAM Capital
  Group, LLC

  	
   

  
	
   

  
	
   

  
	
  By:

  	
  /s/ Mark
  Kovinsky

  	
   

  
	
  Name: Mark
  Kovinsky

  
	
  Title: Chief
  Investment Officer

  
				

 

 

[Omnibus Investor Rights Agreement Signature Page]

 

25

 

	
  PURCHASERS:

  
	
   

  
	
  Print Exact
  Name:

  	
  Park Place
  Columbia Ltd

  	
   

  
	
   

  
	
   

  
	
  By:

  	
  /s/ T.
  Foulser

  	
   

  
	
  Name: T.
  Foulser

  
	
  Title: 

  	
  Settlements
  Controller

  Park Place
  Capital Ltd

  As Agent In
  Process

  	
   

  
					

 

 

[Omnibus Investor Rights Agreement Signature Page]

 

26

 

	
  PURCHASERS:

  
	
   

  
	
  Print Exact
  Name:

  	
  Park Place
  Galileo Ltd

  	
   

  
	
   

  
	
   

  
	
  By:

  	
  /s/ T.
  Foulser

  	
   

  
	
  Name: T.
  Foulser

  
	
  Title: 

  	
  Settlements
  Controller

  Park Place
  Capital Ltd

  As Agent In
  Process

  	
   

  
					

 

 

[Omnibus Investor Rights Agreement Signature Page]

 

27

 

	
  PURCHASERS:

  
	
   

  
	
  Print Exact
  Name:

  	
  Aran Asset
  Management SA

  	
   

  
	
   

  
	
   

  
	
  By:

  	
  /s/ Jakob
  Baumgartner

  	
   

  
	
  Name: Jakob
  Baumgartner

  
	
  Title:
  Director Portfolio/Manager

  
				

 

 

[Omnibus Investor Rights Agreement Signature Page]

 

28

 

	
  PURCHASERS:

  
	
   

  
	
  Print Exact
  Name:

  	
  Finter Bank
  Zurich

  	
   

  
	
   

  
	
   

  
	
  By:

  	
  /s/
  Christian Russenberger

  	
  /s/ F.
  Zimmermann

  	
   

  
	
  Name:
  Christian Russenberger

  	
  F.
  Zimmermann

  	
   

  
	
  Title:

  
					

 

 

[Omnibus Investor Rights Agreement Signature Page]

 

29

 

	
  PURCHASERS:

  
	
   

  
	
  Print Exact
  Name:

  	
  Bernard
  Leroux

  	
   

  
	
   

  
	
   

  
	
  By:

  	
  /s/ Bernard
  Leroux

  	
   

  
	
  Name:

  
	
  Title:

  
				

 

 

[Omnibus Investor Rights Agreement Signature Page]

 

30

 

	
  PURCHASERS:

  
	
   

  
	
  Print Exact
  Name:

  	
  Glenariff
  Investments Ltd.

  	
   

  
	
   

  
	
   

  
	
  By:

  	
  /s/ G.F.
  Galbrath

  	
   

  
	
  Name:

  
	
  Title:
  President

  
				

 

 

[Omnibus Investor Rights Agreement Signature Page]

 

31

 

	
  PURCHASERS:

  
	
   

  
	
  Print Exact
  Name:

  	
  Colin Paul
  Sabiston

  	
   

  
	
   

  
	
   

  
	
  By:

  	
  /s/ Paul
  Sabiston

  	
   

  
	
  Name:

  
	
  Title:

  
				

 

 

[Omnibus Investor Rights Agreement Signature Page]

 

32

 

	
  PURCHASERS:

  
	
   

  
	
  Print Exact
  Name:

  	
  Mike
  Fitzmaurice

  	
   

  
	
   

  
	
   

  
	
  By:

  	
  /s/ Mike
  Fitzmaurice

  	
   

  
	
  Name:

  
	
  Title:

  
				

 

 

[Omnibus Investor Rights Agreement Signature Page]

 

33

 

	
  PURCHASERS:

  
	
   

  
	
  Print Exact
  Name:

  	
  Catalyst
  Capital LLC

  	
   

  
	
   

  
	
   

  
	
  By:

  	
  /s/ Kiran
  Sidhu

  	
   

  
	
  Name: Kiran
  Sidhu

  
	
  Title:
  Managing Member

  
				

 

 

[Omnibus Investor Rights Agreement Signature Page]

 

34

 

	
  PURCHASERS:

  
	
   

  
	
  Print Exact
  Name:

  	
  Brian Noble

  	
   

  
	
   

  
	
   

  
	
  By:

  	
  /s/ Brian
  Noble

  	
   

  
	
  Name:

  
	
  Title:

  
				

 

 

[Omnibus Investor Rights Agreement Signature Page]

 

35

 

	
  PURCHASERS:

  
	
   

  
	
  Print Exact
  Name:

  	
  Northern
  Rivers Innovation Fund LP

  	
   

  
	
   

  
	
   

  
	
  By:

  	
  /s/ Peter
  Blacklock

  	
   

  
	
  Name: Peter
  Blacklock

  
	
  Title: 

  	
  Vice
  President, Secretary, Treasurer

  Northern
  Rivers General Partner Ltd.

  	
   

  
					

 

 

[Omnibus Investor Rights Agreement Signature Page]

 

36

 

	
  PURCHASERS:

  
	
   

  
	
  Print Exact
  Name:

  	
  B.C.
  Equities, Inc.

  	
   

  
	
   

  
	
   

  
	
  By:

  	
  /s/ D.B. Rix

  	
   

  
	
  Name: 

  
	
  Title:
  President

  
				

 

 

[Omnibus Investor Rights Agreement Signature Page]

 

37

 

	
  PURCHASERS:

  
	
   

  
	
  Print Exact
  Name:

  	
  Otape
  Investments LLC

  	
   

  
	
   

  
	
   

  
	
  By:

  	
  /s/ Richard
  M. Coyne

  	
   

  
	
  Name:
  Richard M. Coyne

  
	
  Title:
  General Counsel

  
				

 

 

[Omnibus Investor Rights Agreement Signature Page]

 

38

 

	
  PURCHASERS:

  
	
   

  
	
  Print Exact
  Name:

  	
  SCO Capital
  Partners LLC

  	
   

  
	
   

  
	
   

  
	
  By:

  	
  /s/ Steven
  Rouhandeh

  	
   

  
	
  Name: Steven
  Rouhandeh

  
	
  Title:
  Chairman

  
				

 

 

[Omnibus Investor Rights Agreement Signature Page]

 

39

 

	
  PURCHASERS:

  
	
   

  
	
  Print Exact
  Name:

  	
  The Chloe H
  Rouhandeh Trust

  	
   

  
	
   

  
	
   

  
	
  By:

  	
  /s/ Steven
  Rouhandeh

  	
   

  
	
  Name: Steven
  Rouhandeh

  
	
  Title:
  Trustee

  
				

 

 

[Omnibus Investor Rights Agreement Signature Page]

 

40

 

	
  PURCHASERS:

  
	
   

  
	
  Print Exact
  Name:

  	
  The Sophie C
  Rouhandeh Trust

  	
   

  
	
   

  
	
   

  
	
  By:

  	
  /s/ Steven
  Rouhandeh

  	
   

  
	
  Name: Steven
  Rouhandeh

  
	
  Title:
  Trustee

  
				

 

 

[Omnibus Investor Rights Agreement Signature Page]

 

41

 

	
  PURCHASERS:

  
	
   

  
	
  Print Exact
  Name:

  	
  The Steven H
  Rouhandeh 1999 Family Trust

  	
   

  
	
   

  
	
   

  
	
  By:

  	
  /s/ Lynn A.
  Frielinghaus

  	
   

  
	
  Name: Lynn
  A. Frielinghaus

  
	
  Title:
  Trustee

  
					

 

 

[Omnibus Investor Rights Agreement Signature Page]

 

42

 

	
  PURCHASERS:

  
	
   

  
	
  Print Exact
  Name:

  	
  SDS Merchant
  Fund, LP

  	
   

  
	
   

  
	
   

  
	
  By:

  	
  /s/ Scott E.
  Derby

  	
   

  
	
  Name: Scott
  E. Derby

  
	
  Title:
  General Counsel

  
				

 

 

[Omnibus Investor Rights Agreement Signature Page]

 

43

 

	
  PURCHASERS:

  
	
   

  
	
  Print Exact
  Name:

  	
  Bay Star
  Capital II, L.P.

  	
   

  
	
   

  
	
   

  
	
  By:

  	
  /s/ Steven
  M. LaMar

  	
   

  
	
  Name: Steven
  M. LaMar

  
	
  Title:
  Managing Partner

  
				

 

 

[Omnibus Investor Rights Agreement Signature Page]

 

44

 

	
  PURCHASERS:

  
	
   

  
	
  Print Exact
  Name:

  	
  North Sound
  Legacy Fund LLC

  	
   

  
	
   

  
	
   

  
	
  By:

  	
  /s/ Thomas
  McAuley

  	
   

  
	
  Name: Thomas
  McAuley

  
	
  Title: Chief
  Investment Officer

  
				

 

 

[Omnibus Investor Rights Agreement Signature Page]

 

45

 

	
  PURCHASERS:

  
	
   

  
	
  Print Exact
  Name:

  	
  North Sound
  Legacy International Ltd.

  	
   

  
	
   

  
	
   

  
	
  By:

  	
  /s/ Thomas
  McAuley

  	
   

  
	
  Name: Thomas
  McAuley

  
	
  Title: Chief
  Investment Officer

  
				

 

 

[Omnibus Investor Rights Agreement Signature Page]

 

46

 

	
  PURCHASERS:

  
	
   

  
	
  Print Exact
  Name:

  	
  North Sound
  Legacy International Fund LLC

  	
   

  
	
   

  
	
   

  
	
  By:

  	
  /s/ Thomas
  McAuley

  	
   

  
	
  Name: Thomas
  McAuley

  
	
  Title: Chief
  Investment Officer

  
					

 

 

[Omnibus Investor Rights Agreement Signature Page]

 

47

 

	
  PURCHASERS:

  
	
   

  
	
  Print Exact
  Name:

  	
  ProMed
  Partners, L.P.

  	
   

  
	
   

  
	
   

  
	
  By:

  	
  /s/ Barry
  Kurokawa

  	
   

  
	
  Name: Barry
  Kurokawa

  
	
  Title:
  Managing Director

  
				

 

 

[Omnibus Investor Rights Agreement Signature Page]

 

48

 

	
  PURCHASERS:

  
	
   

  
	
  Print Exact
  Name:

  	
  ProMed
  Offshore Fund, Ltd.

  	
   

  
	
   

  
	
   

  
	
  By:

  	
  /s/ Barry
  Kurokawa

  	
   

  
	
  Name: Barry
  Kurokawa

  
	
  Title:
  Managing Director

  
				

 

 

[Omnibus Investor Rights Agreement Signature Page]

 

49

 

	
  PURCHASERS:

  
	
   

  
	
  Print Exact
  Name:

  	
  Xmark Fund,
  Ltd

  	
   

  
	
   

  
	
   

  
	
  By:

  	
  /s/ Mitchell
  D. Kaye

  	
   

  
	
  Name:
  Mitchell D. Kaye

  
	
  Title: CIO

  
				

 

 

[Omnibus Investor Rights Agreement Signature Page]

 

50

 

	
  PURCHASERS:

  
	
   

  
	
  Print Exact
  Name:

  	
  Xmark Fund,
  L.P.

  	
   

  
	
   

  
	
   

  
	
  By:

  	
  /s/ Mitchell
  D. Kaye

  	
   

  
	
  Name:
  Mitchell D. Kaye

  
	
  Title: CIO

  
				

 

 

[Omnibus Investor Rights Agreement Signature Page]

 

51

 

	
  PURCHASERS:

  
	
   

  
	
  Print Exact
  Name:

  	
  Paul
  Scharfer

  	
   

  
	
   

  
	
   

  
	
  By:

  	
  /s/ Paul
  Scharfer

  	
   

  
	
  Name:

  
	
  Title:

  
				

 

 

[Omnibus Investor Rights Agreement Signature Page]

 

52

 

	
  PURCHASERS:

  
	
   

  
	
  Print Exact
  Name:

  	
  Shekhar Basu

  	
   

  
	
   

  
	
   

  
	
  By:

  	
  /s/ Shekhar
  Basu

  	
   

  
	
  Name:

  
	
  Title:

  
				

 

 

[Omnibus Investor Rights Agreement Signature Page]

 

53

 

	
  PURCHASERS:

  
	
   

  
	
  Print Exact
  Name:

  	
  John W.
  Mellors

  	
   

  
	
   

  
	
   

  
	
  By:

  	
  /s/ John W.
  Mellors

  	
   

  
	
  Name:

  
	
  Title:

  
				

 

 

[Omnibus Investor Rights Agreement Signature Page]

 

54

 

	
  PURCHASERS:

  
	
   

  
	
  Print Exact
  Name:

  	
  Crescent
  International Ltd

  	
   

  
	
   

  
	
   

  
	
  By:

  	
  /s/
  Illegible

  	
  /s/
  Illegible

  	
   

  
	
  Name: M.
  Craw

  	
  M. Brezzi

  	
   

  
	
  Title:
  Authorized Signatories

  
					

 

 

[Omnibus Investor Rights Agreement Signature Page]

 

55

 

	
  PURCHASERS:

  
	
   

  
	
  Print Exact
  Name:

  	
  David M.
  Israel

  	
   

  
	
   

  
	
   

  
	
  By:

  	
  /s/ David M.
  Israel

  	
   

  
	
  Name:

  
	
  Title:

  
				

 

 

[Omnibus Investor Rights Agreement Signature Page]

 

56

 

	
  PURCHASERS:

  
	
   

  
	
  Print Exact
  Name:

  	
  Kenneth S.
  Pilot

  	
   

  
	
   

  
	
   

  
	
  By:

  	
  /s/ Kenneth
  S. Pilot

  	
   

  
	
  Name:

  
	
  Title:

  
				

 

 

[Omnibus Investor Rights Agreement Signature Page]

 

57

 

	
  PURCHASERS:

  
	
   

  
	
  Print Exact
  Name:

  	
  QFinance,
  Inc.

  	
   

  
	
   

  
	
   

  
	
  By:

  	
  /s/ Tom
  Perkins

  	
   

  
	
  Name: Tom
  Perkins

  
	
  Title:
  President

  
				

 

 

[Omnibus Investor Rights Agreement Signature Page]

 

58

 

	
  PURCHASERS:

  
	
   

  
	
  Print Exact
  Name:

  	
  Gamma
  Opportunity Capital Partners, LP

  	
   

  
	
   

  
	
   

  
	
  By:

  	
  /s/
  Christopher Rossman

  	
   

  
	
  Name:
  Christopher Rossman

  
	
  Title:

  	
  Managing
  Director

  Gamma
  Capital Advisors, Ltd. (as agent)

  	
   

  
					

 

 

[Omnibus Investor Rights Agreement Signature Page]

 

59

 

	
  PURCHASERS:

  
	
   

  
	
  Print Exact
  Name:

  	
  SCO
  Securities LLC

  	
   

  
	
   

  
	
   

  
	
  By:

  	
  /s/ Jeffrey
  B. Davis

  	
   

  
	
  Name:
  Jeffrey B. Davis

  
	
  Title:
  President

  
				

 

 

[Omnibus Investor Rights Agreement Signature Page]

 

60

 

	
  PURCHASERS:

  
	
   

  
	
  Print Exact
  Name:

  	
  Ellis
  International Ltd. Inc.

  	
   

  
	
   

  
	
   

  
	
  By:

  	
  /s/ Julian
  Ungar

  	
   

  
	
  Name: Julian
  Ungar

  
	
  Title:
  Director

  
				

 

 

[Omnibus Investor Rights Agreement Signature Page]

 

61

 

SCHEDULE 1

 

PURCHASERS

 

	
  Name and
  Address

  	
   

  	
  Copy of Notice to:

  
	
  East
  Hudson Inc. (BVI)

  c/o Conus Partners, Inc.

  1 Rockefeller Plaza

  19th Floor

  New York, NY 10020

  Attn:             Andrew Zacks

  Tel:                     212-332-7265

  Fax:                    212-332-7551

  az@conusfund.com

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  The
  Conus Fund L.P.

  1 Rockefeller Plaza

  19th Floor

  New York, NY 10020
Attn:             Andrew
  Zacks
Tel:                     212-332-7265
Fax:                    212-332-7551
az@conusfund.com

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  The
  Conus Fund Offshore Ltd.

  c/o Conus Partners, Inc.

  1 Rockefeller Plaza, 19th Floor

  New York, NY 10020
Attn:             Andrew
  Zacks
Tel:                     212-332-7265
Fax:                    212-332-7551
az@conusfund.com

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  The
  Conus Fund QP, L.P.

  1 Rockefeller Plaza
19th Floor
New York, NY 10020
Attn:             Andrew
  Zacks
Tel:                     212-332-7265
Fax:                    212-332-7551
az@conusfund.com

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Kinetic
  Capital Limited Partnership

  1460-777 Hornby Street
Vancouver, B.C.
V6Z 1S4
Attn:             Dallas
  Ross
Tel:                     604-692-2530
Fax:                    604-692-2531
dallas@kineticcapitalpartners.com
frank@kineticcapitalpartners.com

  	
   

  	
   

  

 

62

 

	
  Name and
  Address

  	
   

  	
  Copy of Notice to:

  
	
  JR
  Jay Public Investments, LLC

  P.O. Box 1511
Greenwich, CT 06836
Attn:             Jeffrey
  R. Jay
Tel:                     203-918-4321
Fax:                    203-552-1724
jjay@bmrf.com

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  RAM
  Capital Group, LLC

  2210 Bluemount Road
Monkton, MD 21111
Attn:             Mark
  A. Kovinsky
Tel:                     410-357-5166
Fax:                    410-357-5167
mkovinsky@ram-cap.com

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Park
  Place Columbia Ltd.

  Chancery Hall
52 Reid Street
Hamilton HM12
Bermuda
Attn:             Terry
  Foulser
Tel:                     011-44-20-7408-4810
Fax:                    011-44-20-7629-2439
Terry.foulser@parkplace.co.uk

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Park
  Place Galileo Ltd.

  Chancery Hall
52 Reid Street
Hamilton HM12
Bermuda
Attn:             Terry
  Foulser
Tel:                     011-44-20-7408-4810
Fax:                    011-44-20-7629-2439
Terry.foulser@parkplace.co.uk

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Aran
  Asset Management SA

  Alpenstrasse 11
P.O. Box 4010
CH-6304 Zug
Switzerland
Tel:                     011-41-41-726-0470
Fax:                    011-41-41-726-0477
baumgartner@aransa.ch

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Finter
  Bank Zurich

  Claridenstrasse 35
CH-8002 Zurich
Switzerland
Attn:             Christian
  Russenberger
Tel:                     011-41-1289-5615
Fax:                    011-41-1289-5762
c.russenberger@finter.ch

  	
   

  	
   

  

 

63

 

	
  Name and
  Address

  	
   

  	
  Copy of Notice to:

  
	
  Bernard
  Leroux

  1588 23rd Street
West Vancouver, B.C.
V7V 4W9
Tel:                     604-697-7407
Fax:                    604-697-7480
bleroux@haywood.com

Registration:
Haywood Securities ITF Bernard Leroux
400 Burrard Street
21st Floor
Vancouver, B.C.
V6C 3A6

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Glenariff
  Investments Ltd

  2741 30th Street
Vernon, B.C.
V1T 5C6
Attn:             George
  F. Galbraith
Tel:                     250-542-5900
Fax:                    250-542-9329
gfg@shaw.ca

  
Registration:
Haywood Securities ITF Glenariff
  Investments Ltd
400 Burrard Street
21st Floor
Vancouver, B.C.
V6C 3A6

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Colin
  Paul Sabiston

  2810 Bellevue Avenue
West Vancouver, B.C.
V7V 1E8
Tel:                     604-925-1994
Fax:                    604-925-1948
sabiston@telus.net

  
Registration:
Haywood Securities ITF Colin Paul
  Sabiston
400 Burrard Street
21st Floor
Vancouver, B.C.
V6C 3A6

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Mike
  Fitzmaurice

  505-1160 Burrard Street
Vancouver, B.C.
V6Z 2E3
Tel:                     604-671-2331
Fax:                    604-685-9449
mikefitz@telus.net

  	
   

  	
   

  

 

64

 

	
  Name and
  Address

  	
   

  	
  Copy of Notice to:

  
	
  Catalyst
  Capital LLC

  6720 Muirlands Drive
LaJolla, CA 92037
Attn:             Kiran
  Sidhu
Tel:                     858-459-0055
Fax:                    702-920-8061
ksidhu@catalystllc.net

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Brian
  Noble

  3558 Blenheim
Vancouver, B.C.
V6L 2X9
Tel:                     604-733-4481
Fax:                    604-682-2542
bnoble@blenz.com

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Northern
  Rivers Innovation Fund LP

  Royal Bank Plaza, South Tower
2305-200 Bay Street
Toronto, Ontario
M5J 2J2
Attn:             Hugh
  Cleland
Tel:                     416-597-1200
Fax:                    416-597-1202
dc@northernriversfunds.com

  
Registration:
Nesbitt Burns ITF Account 402 200
  9122
Prime Broker Services
36th Floor
1st Canadian Place
Toronto, Ontario
M5X 1H3

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  B.C.
  Equities Inc.

  101-4606 Canada Way
Burnaby, B.C.
V5G 1K5
Attn:             Don
  Rix
Tel:                     604-737-7224
Fax:                    604-737-7204
drix@quik.com

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Otape
  Investments LLC

  One Manhattanville Road
Purchase, NY 10577
Attn:             Paul
  Masters
Tel:                     914-694-5857
Fax:                    914-694-5335
Paul.Masters@ox.com

  	
   

  	
   

  

 

65

 

	
  Name and
  Address

  	
   

  	
  Copy of Notice to:

  
	
  SCO
  Capital Partners LLC

  1285 Avenue of the Americas,
  35th Floor
New York, NY 10019
Attn:             Steven
  Rouhandeh
Tel:                     212-554-4235
Fax:                    212-554-4058
srouhandeh@scogroup.com

  	
   

  	
  Wiggin
  & Dana LLP

  400 Atlantic Street
Stamford, CT 06901
Attn:             Michael
  Grundei
Tel:                     203-363-7630
Tel:                     203-363-7676
mgrundei@wiggin.com

  
	
   

  	
   

  	
   

  
	
  The
  Chloe H. Rouhandeh Trust

  1285 Avenue of the Americas,
  35th Floor
New York, NY 10019
Attn:             Steven
  Rouhandeh, Trustee
Tel:                     212-554-4235
Fax:                    212-554-4058
srouhandeh@scogroup.com

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  The
  Sophie C. Rouhandeh Trust

  1285 Avenue of the Americas,
  35th Floor
New York, NY 10019
Attn:             Steven
  Rouhandeh, Trustee
Tel:                     212-554-4235
Fax:                    212-554-4058
srouhandeh@scogroup.com

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  The
  Steven H. Rouhandeh 1999 Family Trust

  1285 Avenue of the Americas,
  35th Floor
New York, NY 10019
Attn:             Lynn
  A. Frielinghaus, Trustee
Tel:                     212-554-4235
Fax:                    212-554-4058

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SDS
  Merchant Fund, LP

  53 Forest Avenue, 2nd Floor
Old Greenwich, CT 06870
Attn:             Scott
  Derby
Tel:                     203-967-5880
Fax:                    203-967-5851
scott@sdscapital.com

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  BayStar
  Capital II, L.P.

  80 E. Sir Francis Drake
  Boulevard
Suite 2B
Larkspur, CA 94939
Attn:             Steven
  M. LaMar
Tel:                     415-834-4620
Fax:                    415-834-4601
slamar@baystarcapital.com

  	
   

  	
   

  

 

66

 

	
  Name and
  Address

  	
   

  	
  Copy of Notice to:

  
	
  North
  Sound Legacy Fund LLC

  53 Forest Avenue, Suite 202
Old Greenwich, CT 06870
Attn:             Andrew
  Wilder
Tel:                     203-967-5700
Fax:                    203-967-5701
andrew@northsound.com

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  North
  Sound Legacy International Ltd.

  53 Forest Avenue, Suite 202
Old Greenwich, CT 06870
Attn:             Andrew
  Wilder
Tel:                     203-967-5700
Fax:                    203-967-5701
andrew@northsound.com

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  North
  Sound Legacy Institutional Fund LLC

  53 Forest Avenue, Suite 202
Old Greenwich, CT 06870
Attn:             Andrew
  Wilder
Tel:                     203-967-5700
Fax:                    203-967-5701
andrew@northsound.com

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  ProMed
  Partners, L.P.

  237 Park Avenue, 9th Floor
New York, NY 10017
Attn:             Barry
  Kurokawa
Tel:                     212-692-3626
Fax:                    212-692-3627
bkurokawa@promedmgmt.com

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  ProMed
  Offshore Fund, Ltd.

  237 Park Avenue, 9th Floor
New York, NY 10017
Attn:             Barry
  Kurokawa
Tel:                     212-692-3626
Fax:                    212-692-3627
bkurokawa@promedmgmt.com

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Xmark
  Fund, Ltd.

  152 West 57th Street, 21st
  Floor
New York, NY 10019
Attn:             Mitchell
  Kaye
Tel:                     212-247-8200
Fax:                    212-247-1329
MKaye@xmarkfunds.com

  	
   

  	
  Lowenstein
  Sandler PC

  65 Livingston Avenue
Roseland, NJ 07068
Attn:             Steven
  E. Siesser
Tel:                     973-597-2506
Fax:                    973-597-2507
ssiesser@lowenstein.com

  

 

67

 

	
  Name and
  Address

  	
   

  	
  Copy of Notice to:

  
	
  Xmark
  Fund, L.P.

  152 West 57th Street, 21st
  Floor
New York, NY 10019
Attn:             Mitchell
  Kaye
Tel:                     212-247-8200
Fax:                    212-247-1329
MKaye@xmarkfunds.com

  	
   

  	
  Lowenstein
  Sandler PC

  65 Livingston Avenue
Roseland, NJ 07068
Attn:             Steven
  E. Siesser
Tel:                     973-597-2506
Fax:                    973-597-2507
ssiesser@lowenstein.com

  
	
   

  	
   

  	
   

  
	
  Paul
  Scharfer

  265 East 66th Street
Apt. 6-C
New York, NY 10021
Tel:                     917-763-2015
Fax:
pscharfer@aol.com

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Shekhar
  K. Basu

  39 Heathcote Drive
Mount Kisco, NY 10549
Tel:                     212-521-1450
Fax:                    212-755-9122
sbasu@greenberg.com

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  John
  W. Mellors

  201 Beech Street
Pittsburgh, PA 15218
Tel:                     412-760-3695
Fax:
jmellors@ix.netcom.com

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Crescent
  International Ltd

  c/o GreenLight (Switzerland)
  S.A.
84, av. Louis-Casai
P.O. Box 161
CH-1216 Cointrin, Geneva
Switzerland
Attn:             Maxi
  Brezzi
Tel:                     011-41-22-791-7256
Fax:                    011-41-22-929-5394
info@greenlight.dmitrust.com

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  David
  Israel

  983 Park Avenue
New York, NY 10028
Tel:                     212-861-9550
Fax:                    516-593-9634

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Kenneth
  S. Pilot

  401 East 60th Street, Apt. 29A
New York, NY 10022
Tel:                     212-758-0538
Fax:                    212-759-5189
Ken-Pilot@yahoo.com

  	
   

  	
   

  

 

68

 

	
  Name and
  Address

  	
   

  	
  Copy of Notice to:

  
	
  QFinance,
  Inc.

  4709 Creekstone Drive, Suite
  200
Durham, NC 27703
Attn:             Tom
  Perkins
Tel:                     919-998-2080
Fax:                    919-998-2399
Tom.perkins@quintiles.com

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Ellis
  International Ltd. Inc.

  53rd Street, Urbanization
  Obarrio
Swiss Tower, 16th Floor
Panama
Republic of Panama
Attn:             Julian
  Ungar
Tel:                     507-265-7777
Fax:                    507-265-7700

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Gamma
  Opportunity Capital Partners, LP

  British Colonial Centre of
  Commerce
One Bay Street, Suite 401
Nassau, The Bahamas
Attn:             Christopher
  Rossman
Tel:                     242-322-6656
Fax:                    242-322-6657

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SCO
  Securities LLC

  1285 Avenue of the Americas,
  35th Floor
New York, NY 10019
Attn:             Steven
  Rouhandeh
Tel:                     212-554-4235
Fax:                    212-554-4058
srouhandeh@scogroup.com

  	
   

  	
  Wiggin
  & Dana LLP

  400 Atlantic Street
Stamford, CT 06901
Attn:             Michael
  Grundei
Tel:                     203-363-7630
Tel:                     203-363-7676
mgrundei@wiggin.com

  

 

69

 

EXHIBIT A

 

PLAN OF DISTRIBUTION

 

We are
registering the shares of common stock on behalf of the selling security
holders. Sales of shares may be made by selling security holders, including
their respective donees, transferees, pledgees or other successors-in-interest
directly to purchasers or to or through underwriters, broker-dealers or through
agents. Sales may be made from time to time on the American Stock Exchange, any
other exchange upon which our shares may trade in the future, in the
over-the-counter market or otherwise, at market prices prevailing at the time
of sale, at prices related to market prices, or at negotiated or fixed prices.
The shares may be sold by one or more of, or a combination of, the following:

 

•                                          a
block trade in which the broker-dealer so engaged will attempt to sell the
shares as agent but may position and resell a portion of the block as principal
to facilitate the transaction (including crosses in which the same broker acts
as agent for both sides of the transaction);

 

•                                          purchases
by a broker-dealer as principal and resale by such broker-dealer, including
resales for its account, pursuant to this prospectus;

 

•                                          ordinary
brokerage transactions and transactions in which the broker solicits purchases;

 

•                                          through
options, swaps or derivatives;

 

•                                          in
privately negotiated transactions;

 

•                                          in
making short sales or in transactions to cover short sales; and

 

•                                          put
or call option transactions relating to the shares.

 

The selling
security holders may effect these transactions by selling shares directly to purchasers
or to or through broker-dealers, which may act as agents or principals. These
broker-dealers may receive compensation in the form of discounts, concessions
or commissions from the selling security holders and/or the purchasers of
shares for whom such broker-dealers may act as agents or to whom they sell as
principals, or both (which compensation as to a particular broker-dealer might
be in excess of customary commissions). The selling security holders have
advised us that they have not entered into any agreements, understandings or
arrangements with any underwriters or broker-dealers regarding the sale of
their securities.

 

The selling
security holders may enter into hedging transactions with broker-dealers or
other financial institutions. In connection with those transactions, the
broker-dealers or other financial institutions may engage in short sales of the
shares or of securities convertible into or exchangeable for the shares in the
course of hedging positions they assume with the selling security holders. The
selling security holders may also enter into options or other

 

70

 

transactions with broker-dealers or other
financial institutions which require the delivery of shares offered by this
prospectus to those broker-dealers or other financial institutions. The
broker-dealer or other financial institution may then resell the shares
pursuant to this prospectus (as amended or supplemented, if required by
applicable law, to reflect those transactions).

 

The selling
security holders and any broker-dealers that act in connection with the sale of
shares may be deemed to be “underwriters” within the meaning of Section 2(11)
of the Securities Act of 1933, and any commissions received by broker-dealers
or any profit on the resale of the shares sold by them while acting as
principals may be deemed to be underwriting discounts or commissions under the
Securities Act. The selling security holders may agree to indemnify any agent,
dealer or broker-dealer that participates in transactions involving sales of
the shares against liabilities, including liabilities arising under the
Securities Act. We have agreed to indemnify each of the selling security
holders and each selling security holder has agreed, severally and not jointly,
to indemnify us against some liabilities in connection with the offering of the
shares, including liabilities arising under the Securities Act.

 

The selling
security holders will be subject to the prospectus delivery requirements of the
Securities Act. We have informed the selling security holders that the
anti-manipulative provisions of Regulation M promulgated under the Securities
Exchange Act of 1934 may apply to their sales in the market.

 

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

 

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

 

•                                          the
name of each such selling security holder and of the participating
broker-dealer(s);

 

•                                          the
number of shares involved;

 

•                                          the
initial price at which the shares were sold;

 

•                                          the
commissions paid or discounts or concessions allowed to the broker-dealer(s),
where applicable;

 

•                                          that
such broker-dealer(s) did not conduct any investigation to verify the
information set out or incorporated by reference in this prospectus; and

 

•                                          other
facts material to the transactions.

 

71

 

In addition,
if required under applicable law or the rules or regulations of the Commission,
we will file a supplement to this prospectus when a selling security holder
notifies us that a donee or pledgee intends to sell more than 500 shares of
common stock.

 

We are paying
all expenses and fees in connection with the registration of the shares. The
selling security holders will bear all brokerage or underwriting discounts or
commissions paid to broker-dealers in connection with the sale of the shares.

 

72

 

EXHIBIT B

 

FORM OF NOTICE OF EFFECTIVENESS OF REGISTRATION STATEMENT

 

[Name and
Address of Transfer Agent]

 

Re:  Genetronics Biomedical Corporation

 

Dear
[                 ]:

 

We are counsel
to Genetronics Biomedical Corporation, a Delaware corporation (the “Company”),
and have represented the Company in connection with that certain Preferred
Stock and Warrant Purchase Agreement (the “Purchase Agreement”) dated as of
                                  ,
2003 by and among the Company and the buyers named therein (collectively, the
“Holders”) pursuant to which the Company issued to the Holders its Series A
Cumulative Convertible Preferred Stock, par value $0.001 per share and Series B
Cumulative Convertible Preferred Stock, par value $0.001 per share
(collectively, the “Preferred Stock”) convertible into shares of the Company’s
common stock, par value $0.001 per share (the “Common Stock”), and warrants to
purchase shares of the Common Stock (the “Warrants”). Pursuant to the Purchase
Agreement, the Company has also entered into an Investor Rights Agreement with
the Holders (the “Investor Rights Agreement”) pursuant to which the Company agreed,
among other things, to register the shares of Common Stock issuable upon
conversion of the Preferred Stock and exercise of the Warrants, under the
Securities Act of 1933, as amended (the “1933 Act”). In connection with the
Company’s obligations under the Investor Rights Agreement, on
                                              ,
2003, the Company filed a Registration Statement on Form S-3 (File No.
333-                            )
(the “Registration Statement”) with the Securities and Exchange Commission (the
“SEC”) relating to the Registrable Securities which names each of the Holders
as a selling securityholder thereunder.

 

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

 

Very truly yours,

 

	
  By:

  	
   

  	
   

  
	
  cc:  [LIST NAMES OF HOLDERS]

  

 

73Exhibit 4.3

 

THIS
WARRANT AND THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE OFFERED, SOLD,
ASSIGNED OR TRANSFERRED, IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT
UNDER SAID ACT OR UNLESS THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL
REASONABLY SATISFACTORY TO THE COMPANY THAT REGISTRATION UNDER SAID ACT IS NOT
REQUIRED.

 

Warrants and shares of Common Stock issued
upon the exercise of the Warrants issued to residents of British Columbia and
Ontario must also bear the following legend:

 

UNLESS
PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THESE SECURITIES SHALL
NOT TRADE THE SECURITIES BEFORE NOVEMBER 15, 2003.

 

Warrant No. WA-      

 

SERIES A COMMON STOCK PURCHASE WARRANT

 

To
Purchase              
Shares of Common Stock of

GENETRONICS BIOMEDICAL CORPORATION

 

THIS IS TO
CERTIFY THAT
                         ,
or registered assigns (the “Holder”), is entitled, during the Exercise Period (as
hereinafter defined), to purchase from Genetronics Biomedical Corporation, a
Delaware corporation (the “Company”), the Warrant Stock (as hereinafter defined
and subject to adjustment as provided herein), in whole or in part, at a
purchase price of $0.75 per share, all on and subject to the terms and
conditions hereinafter set forth.

 

1.                                       Definitions.  As used in this Warrant, the following terms
have the respective meanings set forth below:

 

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

 

“Appraised
Value” means, in respect of any share of Common Stock on any date herein
specified, the fair saleable value of such share of Common Stock (determined
without giving effect to the discount for (i) a minority interest or (ii) any
lack of liquidity of the Common Stock or to the fact that the Company may have
no class of equity registered under the Exchange Act) as of the last day of the
most recent fiscal month ending prior to such date specified, based on the
value of the Company on a fully-diluted basis, as determined by a nationally
recognized investment banking firm selected by the Company’s Board of Directors
and having no prior relationship with the Company.

 

 

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

 

“Change of
Control” means the (i) acquisition by an individual or legal entity or
group (as set forth in Section 13(d) of the Exchange Act) of more than
one-half of the voting rights or equity interests in the Company; or (ii) sale,
conveyance, or other disposition of all or substantially all of the assets,
property or business of the Company or the merger into or consolidation with
any other corporation (other than a wholly owned subsidiary corporation) or
effectuation of any transaction or series of related transactions where holders
of the Company’s voting securities prior to such transaction or series of
transactions fail to continue to hold at least 50% of the voting power of the
Company.

 

“Closing
Date” means July 14, 2003.

 

“Commission”
means the Securities and Exchange Commission or any other federal agency then
administering the Securities Act and other federal securities laws.

 

“Common
Stock” means (except where the context otherwise indicates) the Common
Stock, $0.001 par value per share, of the Company as constituted on the Closing
Date, and any capital stock into which such Common Stock may thereafter be
changed or converted, and shall also include (i) capital stock of the Company
of any other class (regardless of how denominated) issued to the holders of
shares of Common Stock upon any reclassification thereof which is also not
preferred as to dividends or assets on liquidation over any other class of
stock of the Company and which is not subject to redemption and (ii) shares of
common stock of any successor or acquiring corporation received by or
distributed to the holders of Common Stock of the Company in the circumstances
contemplated by Section 4.4.

 

“Current
Market Price” means, in respect of any share of Common Stock on any date
herein specified,

 

(1)           if there shall not then
be a public market for the Common Stock, the higher of

 

(a) the book
value per share of Common Stock at such date, and

 

(b) the
Appraised Value per share of Common Stock at such date,

 

or

 

(2)           if there shall then be
a public market for the Common Stock, the higher of (x) the book value per
share of Common Stock at such date, and (y) the average of the daily market
prices for the 20 consecutive trading days immediately before such date. The daily
market price for each such trading day shall be (i) the closing price on such
day on the principal stock exchange (including Nasdaq) on which such Common
Stock is then listed or admitted to trading, or quoted, as applicable, (ii) if
no sale takes place on such day on any such exchange, the last reported closing
price on such day as officially quoted on any such exchange (including Nasdaq),
(iii) if the Common Stock is not then listed or admitted to trading on any
stock exchange, the last reported closing bid price on such day in the
over-the-counter market, as furnished by the 

 

2

 

National Association of Securities Dealers
Automatic Quotation System or the National Quotation Bureau, Inc., (iv) if neither
such corporation at the time is engaged in the business of reporting such
prices, as furnished by any similar firm then engaged in such business, or (v)
if there is no such firm, as furnished by any member of the National
Association of Securities Dealers, Inc. (the “NASD”) selected mutually by the
holder of this Warrant and the Company or, if they cannot agree upon such
selection, as selected by two such members of the NASD, one of which shall be
selected by holder of this Warrant and one of which shall be selected by the
Company.

 

“Current
Warrant Price” means, in respect of a share of Common Stock at any date
herein specified, the price at which a share of Common Stock may be purchased
pursuant to this Warrant on such date. Until the Current Warrant Price is
adjusted pursuant to the terms herein, the initial Current Warrant Price shall
be $0.75 per share of Common Stock.

 

“Exchange
Act” means the Securities Exchange Act of 1934, as amended, or any similar
federal statute, and the rules and regulations of the Commission thereunder,
all as the same shall be in effect from time to time.

 

“Exercise
Period” means the period during which this Warrant is exercisable pursuant
to Section 2.1.

 

“Expiration
Date” means July 13, 2008.

 

“GAAP”
means generally accepted accounting principles in the United States of America
as from time to time in effect.

 

“NASD”
means the National Association of Securities Dealers, Inc., or any successor
corporation thereto.

 

“Other
Property” has the meaning set forth in Section 4.4.

 

“Person”
means any individual, sole proprietorship, partnership, joint venture, trust,
incorporated organization, association, corporation, limited liability company,
institution, public benefit corporation, entity or government (whether federal,
state, county, city, municipal or otherwise, including, without limitation, any
instrumentality, division, agency, body or department thereof).

 

“Preferred
Stock Purchase Agreement” means that certain Preferred Stock and Warrant
Purchase Agreement dated as of July 14, 2003  among the Company and the
other parties named therein, pursuant to which this Warrant was originally
issued.

 

“Restricted
Common Stock” means shares of Common Stock which are, or which upon their
issuance upon the exercise of any Warrant would be required to be, evidenced by
a certificate bearing the restrictive legend set forth in Section 3.2.

 

3

 

“Securities
Act” means the Securities Act of 1933, as amended, or any similar federal
statute, and the rules and regulations of the Commission thereunder, all as the
same shall be in effect at the time.

 

“Trading
Day” means any day on which the primary market on which shares of Common
Stock are listed is open for trading.

 

“Transfer”
means any disposition of any Warrant or Warrant Stock or of any interest in
either thereof, which would constitute a sale thereof within the meaning of the
Securities Act.

 

“Warrants”
means this Warrant and all warrants issued upon transfer, division or
combination of, or in substitution for, any thereof. All Warrants shall at all
times be identical as to terms and conditions and date, except as to the number
of shares of Common Stock for which they may be exercised.

 

“Warrant
Price” means an amount equal to (i) the number of shares of Common Stock
being purchased upon exercise of this Warrant pursuant to Section 2.1,
multiplied by (ii) the Current Warrant Price.

 

“Warrant
Stock” means the
                             
shares of Common Stock to be purchased upon the exercise hereof, subject to
adjustment as provided herein.

 

2.                                       Exercise
of Warrant.

 

2.1.                              Manner
of Exercise. From and after the Closing Date, and until 5:00 P.M., New York
time, on the Expiration Date (the “Exercise Period”), the Holder may exercise
this Warrant, on any Business Day, for all or any part of the number of shares
of Warrant Stock purchasable hereunder.

 

In order to
exercise this Warrant, in whole or in part, the Holder shall deliver to the
Company at its principal office or at the office or agency designated by the
Company pursuant to Section 12, (i) a written notice of Holder’s election
to exercise this Warrant, which notice shall specify the number of shares of
Warrant Stock to be purchased, (ii) payment of the Warrant Price as provided
herein, and (iii) this Warrant. Such notice shall be substantially in the form
of the subscription form appearing at the end of this Warrant as Exhibit A,
duly executed by the Holder or its agent or attorney. Upon receipt thereof, the
Company shall, as promptly as practicable, and in any event within three
Business Days thereafter, execute or cause to be executed and deliver or cause
to be delivered to the Holder a certificate or certificates representing the
aggregate number of full shares of Warrant Stock issuable upon such exercise,
together with cash in lieu of any fraction of a share, as hereinafter provided.
The stock certificate or certificates so delivered shall be, to the extent
possible, in such denomination or denominations as the Holder shall request in
the notice and shall be registered in the name of the Holder or such other name
as shall be designated in the notice. This Warrant shall be deemed to have been
exercised and such certificate or certificates shall be deemed to have been
issued, and the Holder or any other Person so designated to be named therein
shall be deemed to have become a Holder of record of such shares for all
purposes, as of the date when the notice, together with the payment of the
Warrant Price and this Warrant, is received by the Company as described above.
If this Warrant shall have been exercised in part, the Company shall, at the
time of delivery of the certificate or 

 

4

 

certificates representing Warrant Stock,
deliver to the Holder a new Warrant evidencing the rights of the Holder to
purchase the unpurchased shares of Common Stock called for by this Warrant,
which new Warrant shall in all other respects be identical with this Warrant,
or at the request of the Holder, appropriate notation may be made on this
Warrant and the same returned to the Holder.

 

If the Company
intentionally and willfully fails to deliver to the holder such certificate or
certificates pursuant to this Section 2.1 (free of any restrictions on
transfer or legends, if such shares have been registered) in accordance
herewith, prior to the seventh trading day after the receipt by the Company of
(i) a written notice of Holder’s election to exercise this Warrant, which
notice shall specify the number of shares of Warrant Stock to be purchased,
(ii) payment of the Warrant Price as provided herein, and (iii) this Warrant
(the “Date of Receipt”), the Company shall pay to such Holder, in cash, on a
per diem basis, an amount equal to 2% of the value of the undelivered Warrant Stock
(based on the Current Market Price of the Common Stock on the Date of Receipt)
per month until such delivery takes place.

 

Payment of the
Warrant Price may be made at the option of the Holder by: (i) certified or
official bank check payable to the order of the Company, (ii) wire transfer to
the account of the Company or (iii) the surrender and cancellation of a portion
of shares of Common Stock then held by the Holder or issuable upon such
exercise of this Warrant, which shall be valued and credited toward the total
Warrant Price due the Company for the exercise of the Warrant based upon the
Current Market Price of the Common Stock. All shares of Common Stock issuable
upon the exercise of this Warrant pursuant to the terms hereof shall be validly
issued and, upon payment of the Warrant Price, shall be fully paid and
nonassessable and not subject to any preemptive rights.

 

2.2.                              Fractional
Shares. The Company shall not be required to issue a fractional share of
Common Stock upon exercise of any Warrant. As to any fraction of a share which
the Holder of one or more Warrants, the rights under which are exercised in the
same transaction, would otherwise be entitled to purchase upon such exercise,
the Company shall pay an amount in cash equal to the Current Market Price per
share of Common Stock on the date of exercise multiplied by such fraction.

 

2.3.                              Continued
Validity. A Holder of shares of Common Stock issued upon the exercise of
this Warrant, in whole or in part (other than a Holder who acquires such shares
after the same have been publicly sold pursuant to a Registration Statement
under the Securities Act or sold pursuant to Rule 144 thereunder), shall
continue to be entitled with respect to such shares to all rights to which it
would have been entitled as the Holder under Sections 10 and 13 of this
Warrant.

 

2.4.                              Restrictions
on Exercise Amount.

 

(i)                                     Unless
a Holder delivers to the Company irrevocable written notice prior to the date
of issuance hereof or sixty-one days prior to the effective date of such notice
that this Section 2.4(i) shall not apply to such Holder, the Holder may
not acquire a number of shares of Warrant Stock to the extent that, upon such
exercise, the number of shares of Common Stock then beneficially owned by such
holder and its Affiliates and any other persons or entities whose 

 

5

 

beneficial ownership of Common Stock would be
aggregated with the Holder’s for purposes of Section 13(d) of the Exchange
Act (including shares held by any “group” of which the holder is a member, but
excluding shares beneficially owned by virtue of the ownership of securities or
rights to acquire securities that have limitations on the right to convert,
exercise or purchase similar to the limitation set forth herein) exceeds 4.95%
of the total number of shares of Common Stock of the Company then issued and
outstanding; provided that such threshold shall be 9.95% if on the date of
issuance of this Warrant the number of shares of Common Stock beneficially owned
by such holder and its Affiliates and any other persons or entities whose
beneficial ownership of Common Stock would be aggregated with the Holder’s for
purposes of Section 13(d) of the Exchange Act (including shares held by
any “group” of which the holder is a member, but excluding shares beneficially
owned by virtue of the ownership of securities or rights to acquire securities
that have limitations on the right to convert, exercise or purchase similar to
the limitation set forth herein) already exceeds 4.95% of the total number of
shares of Common Stock of the Company issued and outstanding on the date
hereof.  For purposes hereof, “group”
has the meaning set forth in Section 13(d) of the Exchange Act and applicable
regulations of the Securities and Exchange Commission, and the percentage held
by the holder shall be determined in a manner consistent with the provisions of
Section 13(d) of the Exchange Act. Each delivery of a notice of exercise
by a Holder will constitute a representation by such Holder that it has
evaluated the limitation set forth in this paragraph and determined, based on
the most recent public filings by the Company with the Commission, that the
issuance of the full number of shares of Warrant Stock requested in such notice
of exercise is permitted under this paragraph.

 

(ii)                                  In
the event the Company is prohibited from issuing shares of Warrant Stock as a
result of any restrictions or prohibitions under applicable law or the rules or
regulations of any stock exchange, interdealer quotation system or other
self-regulatory organization, the Company shall as soon as possible seek the
approval of its stockholders and take such other action to authorize the
issuance of the full number of shares of Common Stock issuable upon exercise of
this Warrant.

 

3.                                       Transfer,
Division and Combination.

 

3.1.                              Transfer.
The Warrants and the Warrant Stock shall be freely transferable, subject to
compliance with all applicable laws, including, but not limited to the
Securities Act.  If, at the time of the
surrender of this Warrant in connection with any transfer of this Warrant or
the resale of the Warrant Stock, this Warrant or the Warrant Stock, as
applicable, shall not be registered under the Securities Act, the Company may
require, as a condition of allowing such transfer (i) that the Holder or
transferee of this Warrant or the Warrant Stock as the case may be, furnish to
the Company a written opinion of counsel that is reasonably acceptable to the
Company to the effect that such transfer may be made without registration under
the Securities Act, (ii) that the Holder or transferee execute and deliver to
the Company an investment letter in form and substance acceptable to the
Company and substantially in the form attached as Exhibit C hereto and
(iii) that the transferee be an “accredited investor” as defined in Rule 501(a)
promulgated under the Securities Act. Transfer of this Warrant and all rights
hereunder, in whole or in part, in accordance with the foregoing provisions,
shall be registered on the books of the Company to be maintained for such
purpose, upon surrender of this Warrant at the principal office of the Company
referred to in Section 2.1 or the office or agency designated by the
Company pursuant 

 

6

 

to Section 12, together with a written
assignment of this Warrant substantially in the form of Exhibit B hereto
duly executed by the Holder or its agent or attorney and funds sufficient to
pay any transfer taxes payable upon the making of such transfer. Upon such
surrender and, if required, such payment, the Company shall execute and deliver
a new Warrant or Warrants in the name of the assignee or assignees and in the
denomination specified in such instrument of assignment, and shall issue to the
assignor a new Warrant evidencing the portion of this Warrant not so assigned,
and this Warrant shall promptly be cancelled. Following a transfer that
complies with the requirements of this Section 3.1, the Warrant may be
exercised by a new Holder for the purchase of shares of Common Stock regardless
of whether the Company issued or registered a new Warrant on the books of the
Company.

 

3.2.                              Restrictive
Legends. Each certificate for Warrant Stock initially issued upon the
exercise of this Warrant, and each certificate for Warrant Stock issued to any
subsequent transferee of any such certificate, shall be stamped or otherwise
imprinted with legends in substantially the following form:

 

“THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933 AS AMENDED, AND MAY NOT BE OFFERED, SOLD, ASSIGNED OR
TRANSFERRED, IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER SAID
ACT OR UNLESS THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL REASONABLY
SATISFACTORY TO THE COMPANY THAT REGISTRATION UNDER SAID ACT IS NOT REQUIRED.”

 

“THE SALE,
TRANSFER OR ASSIGNMENT OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE
SUBJECT TO THE TERMS AND CONDITIONS OF A CERTAIN INVESTOR RIGHTS AGREEMENT
DATED AS OF JULY 14, 2003, AS AMENDED FROM TIME TO TIME, AMONG THE COMPANY
AND CERTAIN HOLDERS OF ITS OUTSTANDING SECURITIES. COPIES OF SUCH AGREEMENT
MAY BE OBTAINED AT NO COST BY WRITTEN REQUEST MADE BY THE HOLDER OF RECORD
OF THIS CERTIFICATE TO THE SECRETARY OF THE COMPANY.”

 

Warrants and shares of Common Stock issued
upon the exercise of the Warrants issued to residents of British Columbia and
Ontario must also bear the following legend:

 

UNLESS PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THESE
SECURITIES SHALL NOT TRADE THE SECURITIES BEFORE NOVEMBER 15, 2003.

 

3.3.                              Division
and Combination; Expenses; Books. This Warrant may be divided or combined
with other Warrants upon presentation hereof at the aforesaid office or agency
of the Company, together with a written notice specifying the names and
denominations in which new Warrants are to be issued, signed by the Holder or
its agent or attorney. Subject to compliance with Section 3.1 as to any
transfer which may be involved in such division or combination, the Company
shall execute and deliver a new Warrant or Warrants in exchange for the Warrant
or Warrants to be divided or combined in accordance with such notice. The
Company shall prepare, issue and deliver at its own expense the new Warrant or
Warrants under this Section 3. The Company agrees to maintain, at its
aforesaid office or agency, books for the registration and the registration of
transfer of the Warrants.

 

7

 

4.                                       Adjustments.
The number of shares of Common Stock for which this Warrant is exercisable, and
the price at which such shares may be purchased upon exercise of this Warrant,
shall be subject to adjustment from time to time as set forth in this
Section 4. The Company shall give the Holder notice of any event described
below which requires an adjustment pursuant to this Section 4 in
accordance with Sections 5.1 and 5.2.

 

4.1.                              Stock
Dividends, Subdivisions and Combinations. If at any time while this Warrant
is outstanding the Company shall:

 

(i)                                     declare
a dividend or make a distribution on its outstanding shares of Common Stock in
shares of Common Stock,

 

(ii)                                  subdivide
its outstanding shares of Common Stock into a larger number of shares of Common
Stock, or

 

(iii)                               combine
its outstanding shares of Common Stock into a smaller number of shares of
Common Stock, then:

 

(1)                                  the
number of shares of Common Stock acquirable upon exercise of this Warrant
immediately after the occurrence of any such event shall be adjusted to equal
the number of shares of Common Stock which a record holder of the same number
of shares of Common Stock that would have been acquirable under this Warrant
immediately prior to the record date for such dividend or distribution or the
effective date of such subdivision or combination would own or be entitled to receive
after such record date or the effective date of such subdivision or
combination, as applicable, and

 

(2)                                  the
Warrant Price shall be adjusted to equal:

 

(A)                              the
Current Warrant Price in effect at the time of the record date for such
dividend or distribution or of the effective date of such subdivision or
combination, multiplied by the number of shares of Common Stock into which this
Warrant is exercisable immediately prior to the adjustment, divided by

 

(B)                                the
number of shares of Common Stock into which this Warrant is exercisable
immediately after such adjustment.

 

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 clauses (ii) or (iii) of this paragraph shall become effective immediately
after the effective date of such subdivision or combination.

 

4.2.                              Certain
Other Distributions. If at any time while this Warrant is outstanding the
Company shall cause the holders of its Common Stock to be entitled to receive
any dividend or other distribution of:

 

(i)                                     cash,

 

(ii)                                  any
evidences of its indebtedness, any shares of stock of any class or any 

 

8

 

other securities or property or assets of any
nature whatsoever (other than cash or additional shares of Common Stock as
provided in Section 4.1 hereof), or

 

(iii)                               any
warrants or other rights to subscribe for or purchase any evidences of its
indebtedness, any shares of stock of any class or any other securities or
property or assets of any nature whatsoever, then:

 

(1)                                  the
number of shares of Common Stock acquirable upon exercise of this Warrant shall
be adjusted to equal the product of the number of shares of Common Stock
acquirable upon exercise of this Warrant immediately prior to the record date
for such dividend or distribution, multiplied by a fraction (x) the numerator
of which shall be the Current Warrant Price per share of Common Stock at the
date of taking such record and (y) the denominator of which shall be such
Current Warrant Price minus the amount allocable to one share of Common Stock
of any such cash so distributable and of the fair value (as determined in good
faith by the Board of Directors of the Company) of any and all such evidences
of indebtedness, shares of stock, other securities or property or warrants or
other subscription or purchase rights so distributable; and

 

(2)                                  the
Current Warrant Price in effect immediately prior to the record date fixed for
determination of stockholders entitled to receive such distribution shall be
adjusted to equal (x) the Current Warrant Price multiplied by the number of
shares of Common Stock acquirable upon exercise of this Warrant immediately
prior to the adjustment, divided by (y) the number of shares of Common Stock
acquirable upon exercise of this Warrant immediately after such adjustment. A
reclassification of the Common Stock (other than a change in par value, or from
par value to no par value or from no par value to par value) into shares of
Common Stock and shares of any other class of stock shall be deemed a
distribution by the Company to the holders of its Common Stock of such shares
of such other class of stock within the meaning of this Section 4.2 and,
if the outstanding shares of Common Stock shall be changed into a larger or
smaller number of shares of Common Stock as a part of such reclassification,
such change shall be deemed a subdivision or combination, as the case may be,
of the outstanding shares of Common Stock within the meaning of
Section 4.1.

 

4.3.                              Other
Provisions Applicable to Adjustments. The following provisions shall be
applicable to the making of adjustments of the number of shares of Common Stock
into which this Warrant is exercisable and the Current Warrant Price provided
for in Section 4:

 

(a) When
Adjustments to Be Made. The adjustments required by Section 4 shall be
made whenever and as often as any specified event requiring an adjustment shall
occur, except that any that would otherwise be required may be postponed
(except in the case of a subdivision or combination of shares of the Common
Stock, as provided for in Section 4.1) up to, but not beyond the date of
exercise if such adjustment either by itself or with other adjustments not
previously made adds or subtracts less than 1% of the shares of Common Stock
into which this Warrant is exercisable immediately prior to the making of such
adjustment. Any adjustment representing a change of less than such minimum
amount (except as aforesaid) which is postponed shall be carried forward and
made as soon as such adjustment, together with other adjustments required by
this Section 4 and not previously made, would result in a minimum

 

9

 

adjustment or on the date of exercise.  For the purpose of any adjustment, any
specified event shall be deemed to have occurred at the close of business on
the date of its occurrence.

 

(b)  Fractional Interests. In computing adjustments
under this Section 4, fractional interests in Common Stock shall be taken
into account to the nearest 1/100th of a share.

 

(c)  When Adjustment Not Required. If the
Company undertakes a transaction contemplated under this Section 4 and as
a result takes a record of the holders of its Common Stock for the purpose of
entitling them to receive a dividend or distribution or subscription or
purchase rights or other benefits contemplated under this Section 4 and
shall, thereafter and before the distribution to stockholders thereof, legally
abandon its plan to pay or deliver such dividend, distribution, subscription or
purchase rights or other benefits contemplated under this Section 4, then
thereafter no adjustment shall be required by reason of the taking of such
record and any such adjustment previously made in respect thereof shall be
rescinded and annulled.

 

(d)  Escrow of Stock. If after any
property becomes distributable pursuant to Section 4 by reason of the
taking of any record of the holders of Common Stock, but prior to the
occurrence of the event for which such record is taken, a holder of this
Warrant exercises the Warrant during such time, then such holder shall continue
to be entitled to receive any shares of Common Stock issuable upon exercise
hereunder by reason of such adjustment and such shares or other property shall
be held in escrow for the holder of this Warrant by the Company to be issued to
holder of this Warrant upon and to the extent that the event actually takes
place. Notwithstanding any other provision to the contrary herein, if the event
for which such record was taken fails to occur or is rescinded, then such
escrowed shares shall be canceled by the Company and escrowed property returned
to the Company.

 

4.4.                              Reorganization,
Reclassification, Merger, Consolidation or Disposition of Assets. If there
shall occur a Change of Control, then the Holder of this Warrant shall be
entitled, at such Holder’s option, either:

 

(a) upon
request of Holder delivered to the Company within 10 days of receipt of notice
of such Change of Control pursuant to Section 5.2, to have the Company (or
any such successor or surviving entity) purchase this Warrant from the Holder
for an aggregate purchase price, payable in cash on the effective date of consummation
of such Change of Control, equal to the product of (i) the difference between
the Current Market Price and the Current Warrant Price, multiplied by (ii) the
number of shares of Common Stock issuable upon exercise of this Warrant
immediately prior to the consummation of such Change of Control; or

 

(b)  if pursuant to the terms of such Change of
Control, shares of common stock of the successor or acquiring corporation, or
any cash, shares of stock or other securities or property of any nature
whatsoever (including warrants or other subscription or purchase rights) in
addition to or in lieu of common stock of the successor or acquiring
corporation (“Other Property”), are to be received by or distributed to the
holders of Common Stock of the Company, and the Holder shall not have elected
to have this Warrant purchased by the Company pursuant to Section 4.4(a)
above, then the Holder of this Warrant shall have the right thereafter to
receive, upon the exercise of the Warrant, the number of shares of common stock
of the successor or acquiring corporation or of the Company, if it is the
surviving corporation, and the Other 

 

10

 

Property receivable upon or as a result of
such Change of Control by a holder of the number of shares of Common Stock into
which this Warrant is exercisable immediately prior to such event.

 

(c)  In case of any such Change of Control
described above, to the extent this Warrant has not been fully purchased by the
Company pursuant to Section 4.4(a) above, the successor or acquiring
corporation (if other than the Company) shall expressly assume the due and
punctual observance and performance of each and every covenant and condition of
contained in this Warrant to be performed and observed by the Company and all
the obligations and liabilities hereunder, subject to such modifications as may
be deemed appropriate (as determined by resolution of the Board of Directors of
the Company) in order to provide for adjustments of shares of the Common Stock
into which this Warrant is exercisable which shall be as nearly equivalent as
practicable to the adjustments provided for in Section 4. For purposes of
Section 4, common stock of the successor or acquiring corporation shall
include stock of such corporation of any class which is not preferred as to
dividends or assets on liquidation over any other class of stock of such
corporation and which is not subject to redemption and shall also include any
evidences of indebtedness, shares of stock or other securities which are
convertible into or exchangeable for any such stock, either immediately or upon
the arrival of a specified date or the happening of a specified event and any
warrants or other rights to subscribe for or purchase any such stock. The
foregoing provisions of this Section 4 shall similarly apply to successive
Change of Control transactions.

 

4.5.                              Other
Action Affecting Common Stock. In case at any time or from time to time the
Company shall take any action in respect of its Common Stock, other than the
payment of dividends permitted by Section 4 or any other action described
in Section 4, then, unless such action will not have a materially adverse
effect upon the rights of the holder of this Warrant, the number of shares of
Common Stock or other stock into which this Warrant is exercisable and/or the
purchase price thereof shall be adjusted in such manner as may be equitable in
the circumstances; provided, that the mere authorization or issuance of
additional shares of capital stock of the Company (other than pursuant to a
stock dividend) shall not be considered any action in respect of its Common
Stock.

 

4.6.                              Certain
Limitations. Notwithstanding anything herein to the contrary, the Company
agrees not to enter into any transaction which, by reason of any adjustment
hereunder, would cause the Current Warrant Price to be less than the par value
per share of Common Stock.

 

4.7.                              Stock
Transfer Taxes. The issue of stock certificates upon exercise of this
Warrant shall be made without charge to the holder for any tax in respect of
such issue. The Company shall not, however, be required to pay any tax which
may be payable in respect of any transfer involved in the issue and delivery of
shares in any name other than that of the holder of this Warrant, and the
Company shall not be required to issue or deliver any such stock certificate
unless and until the person or persons requesting the issue thereof shall have
paid to the Company the amount of such tax or shall have established to the
satisfaction of the Company that such tax has been paid.

 

5.                                       Notices
to Warrant Holders.

 

5.1.                              Certificate
as to Adjustments. Upon the occurrence of each adjustment or 

 

11

 

readjustment of the Current Warrant Price,
the Company, at its expense, shall promptly compute such adjustment or
readjustment in accordance with the terms hereof and prepare and furnish to the
Holder of this Warrant a certificate setting forth such adjustment or
readjustment and showing in detail the facts upon which such adjustment or
readjustment is based. The Company shall, upon the written request at any time
of the Holder of this Warrant, furnish or cause to be furnished to such Holder
a like certificate setting forth (i) such adjustments and readjustments, (ii)
the Current Warrant Price at the time in effect and (iii) the number of shares
of Common Stock and the amount, if any, or other property which at the time
would be received upon the exercise of Warrants owned by such Holder.

 

5.2.                              Notice of Corporate
Action. If at any time:

 

(a)                                  the
Company shall take a record of the holders of its Common Stock for the purpose
of entitling them to receive a dividend (other than a cash dividend payable out
of earnings or earned surplus legally available for the payment of dividends
under the laws of the jurisdiction of incorporation of the Company) or other
distribution, or any right to subscribe for or purchase any evidences of its
indebtedness, any shares of stock of any class or any other securities or
property, or to receive any other right, or

 

(b)                                 there
shall be any capital reorganization of the Company, any reclassification or
recapitalization of the capital stock of the Company or any consolidation or
merger of the Company with, or any sale, transfer or other disposition of all
or substantially all the property, assets or business of the Company to,
another corporation, or

 

(c)                                  there
shall be a voluntary or involuntary dissolution, liquidation or winding up of
the Company;

 

then, in any
one or more of such cases, the Company shall give to the Holder (i) at least 20
days’ prior written notice of the date on which a record date shall be selected
for such dividend, distribution or right or for determining rights to vote in
respect of any such reorganization, reclassification, merger, consolidation,
sale, transfer, disposition, dissolution, liquidation or winding up, and (ii)
in the case of any such reorganization, reclassification, merger,
consolidation, sale, transfer, disposition, dissolution, liquidation or winding
up, at least 20 days’ prior written notice of the date when the same shall take
place. Such notice in accordance with the foregoing clause also shall specify
(i) the date on which any such record is to be taken for the purpose of such
dividend, distribution or right, the date on which the holders of Common Stock
shall be entitled to any such dividend, distribution or right, and the amount
and character thereof, and (ii) the date on which any such reorganization,
reclassification, merger, consolidation, sale, transfer, disposition,
dissolution, liquidation or winding up is to take place and the time, if any
such time is to be fixed, as of which the holders of Common Stock shall be
entitled to exchange their shares of Common Stock for securities or other property
deliverable upon such reorganization, reclassification, merger, consolidation,
sale, transfer, disposition, dissolution, liquidation or winding up. Each such
written notice shall be sufficiently given if addressed to the Holder at the
last address of the Holder appearing on the books of the Company and delivered
in accordance with Section 15.2.

 

5.3.                              No
Rights as Stockholder. This Warrant does not entitle the Holder to any
voting 

 

12

 

or other rights as a stockholder of the
Company prior to exercise and payment for the Warrant Price in accordance with
the terms hereof.

 

6.                                       No
Impairment. The Company shall not by any action, including, without
limitation, amending its articles of incorporation or through any
reorganization, transfer of assets, consolidation, merger, dissolution, issue
or sale of securities or any other voluntary action, avoid or seek to avoid the
observance or performance of any of the terms of this Warrant, but will at all
times in good faith assist in the carrying out of all such terms and in the
taking of all such actions as may be necessary or appropriate to protect the
rights of the Holder against impairment. Without limiting the generality of the
foregoing, the Company will (a) not increase the par value of any shares of
Common Stock receivable upon the exercise of this Warrant above the amount
payable therefor upon such exercise immediately prior to such increase in par
value, (b) take all such action as may be necessary or appropriate in order
that the Company may validly and legally issue fully paid and nonassessable
shares of Common Stock upon the exercise of this Warrant, and (c) use its best
efforts to obtain all such authorizations, exemptions or consents from any
public regulatory body having jurisdiction thereof as may be necessary to
enable the Company to perform its obligations under this Warrant. Upon the
request of the Holder, the Company will at any time during the period this
Warrant is outstanding acknowledge in writing, in form satisfactory to the
Holder, the continuing validity of this Warrant and the obligations of the
Company hereunder.

 

7.                                       Reservation
and Authorization of Common Stock; Registration With Approval of Any
Governmental Authority. From and after the Closing Date, the Company shall
at all times reserve and keep available for issue upon the exercise of Warrants
such number of its authorized but unissued shares of Common Stock as will be
sufficient to permit the exercise in full of all outstanding Warrants (without
regard to any ownership limitations provided in Section 2.4(i)). All
shares of Common Stock which shall be so issuable, when issued upon exercise of
any Warrant and payment therefor in accordance with the terms of such Warrant,
shall be duly and validly issued and fully paid and nonassessable, and not
subject to preemptive rights. Before taking any action which would cause an
adjustment reducing the Current Warrant Price below the then par value, if any,
of the shares of Common Stock issuable upon exercise of the Warrants, the
Company shall take any corporate action which may be necessary in order that
the Company may validly and legally issue fully paid and non-assessable shares
of such Common Stock at such adjusted Current Warrant Price. Before taking any
action which would result in an adjustment in the number of shares of Common
Stock for which this Warrant is exercisable or in the Current Warrant Price,
the Company shall obtain all such authorizations or exemptions thereof, or
consents thereto, as may be necessary from any public regulatory body or bodies
having jurisdiction thereof. If any shares of Common Stock required to be
reserved for issuance upon exercise of Warrants require registration or
qualification with any governmental authority under any federal or state law
before such shares may be so issued (other than as a result of a prior or
contemplated distribution by the Holder of this Warrant), the Company will in
good faith and as expeditiously as possible and at its expense endeavor to cause
such shares to be duly registered.

 

8.                                       Taking
of Record; Stock and Warrant Transfer Books. In the case of all dividends
or other distributions by the Company to the holders of its Common Stock with
respect to which any provision of Section 4 refers to the taking of a
record of such holders, the Company will in

 

13

 

each such case take such a record and will
take such record as of the close of business on a Business Day. The Company
will not at any time, except upon dissolution, liquidation or winding up of the
Company, close its stock transfer books or Warrant transfer books so as to
result in preventing or delaying the exercise or transfer of any Warrant.

 

9.                                       Registration
Rights. The resale of the Warrant Stock shall be registered in accordance
with the terms and conditions contained in that certain Investor Rights
Agreement dated of even date hereof, among the Holder, the Company and the
other parties named therein (the “Investor Rights Agreement”). The Holder
acknowledges that pursuant to the Investor Rights Agreement, the Company has
the right to request that the Holder furnish information regarding such Holder
and the distribution of the Warrant Stock as is required by law or the
Commission to be disclosed in the Registration Statement (as such term is
defined in the Investor Rights Agreement), and the Company may exclude from
such registration the shares of Warrant Stock acquirable hereunder if Holder
fails to furnish such information within a reasonable time prior to the filing
of each Registration Statement, supplemented prospectus included therein and/or
amended Registration Statement.

 

10.                                 Supplying
Information. Upon any default by the Company of its obligations hereunder
or under the Investor Rights Agreement, the Company shall cooperate with the
Holder in supplying such information as may be reasonably necessary for such
Holder to complete and file any information reporting forms presently or
hereafter required by the Commission as a condition to the availability of an
exemption from the Securities Act for the sale of any Warrant or Restricted
Common Stock.

 

11.                                 Loss
or Mutilation. Upon receipt by the Company from the Holder of evidence
reasonably satisfactory to it of the ownership of and the loss, theft,
destruction or mutilation of this Warrant and indemnity or security reasonably
satisfactory to it and reimbursement to the Company of all reasonable expenses
incidental thereto and in case of mutilation upon surrender and cancellation
hereof, the Company will execute and deliver in lieu hereof a new Warrant of
like tenor to the Holder; provided, however, that in the case of mutilation, no
indemnity shall be required if this Warrant in identifiable form is surrendered
to the Company for cancellation.

 

12.                                 Office
of the Company. As long as any of the Warrants remain outstanding, the
Company shall maintain an office or agency (which may be the principal
executive offices of the Company) where the Warrants may be presented for
exercise, registration of transfer, division or combination as provided in this
Warrant.

 

13.                                 Financial
and Business Information.

 

13.1.                        Quarterly
Information. The Company will deliver to the Holder, as soon as available
and in any event within 45 days after the end of each of the first three
quarters of each fiscal year of the Company, one copy of an unaudited
consolidated balance sheet of the Company and its subsidiaries as at the end of
such quarter, and the related unaudited consolidated statements of income,
retained earnings and cash flow of the Company and its subsidiaries for such
quarter and, in the case of the second and third quarters, for the portion of
the fiscal year ending with such quarter, setting forth in each case in
comparative form the figures for the corresponding periods in the previous
fiscal year. Such financial statements shall 

 

14

 

be prepared by the Company in accordance with
GAAP and accompanied by the certification of the Company’s chief executive
officer or chief financial officer that such financial statements present
fairly the consolidated financial position, results of operations and cash flow
of the Company and its subsidiaries as at the end of such quarter and for such
year-to-date period, as the case may be; provided, however, that the Company
shall have no obligation to deliver such quarterly information under this
Section 13.1 to the extent it is publicly available; and provided further,
that if such information contains material non-public information, the Company
shall so notify the Holder prior to delivery thereof and the Holder shall have
the right to refuse delivery of such information.

 

13.2.                        Annual
Information. The Company will deliver to the Holder as soon as available
and in any event within 90 days after the end of each fiscal year of the
Company, one copy of an audited consolidated balance sheet of the Company and
its subsidiaries as at the end of such year, and audited consolidated
statements of income, retained earnings and cash flow of the Company and its
subsidiaries for such year; setting forth in each case in comparative form the
figures for the corresponding periods in the previous fiscal year; all prepared
in accordance with GAAP, and which audited financial statements shall be accompanied
by an opinion thereon of the independent certified public accountants regularly
retained by the Company, or any other firm of independent certified public
accountants of recognized national standing selected by the Company; provided,
however, that the Company shall have no obligation to deliver such annual
information under this Section 13.2 to the extent it is publicly
available; and provided further, that if such information contains material
non-public information, the Company shall so notify the Holder prior to
delivery thereof and the Holder shall have the right to refuse delivery of such
information.

 

13.3.                        Filings.
The Company will file on or before the required date all regular or periodic
reports (pursuant to the Exchange Act) with the Commission and will deliver to
Holder promptly upon their becoming available one copy of each report, notice
or proxy statement sent by the Company to its stockholders generally.

 

14.                                 Limitation
of Liability. No provision hereof, in the absence of affirmative action by
the Holder to purchase shares of Common Stock, and no enumeration herein of the
rights or privileges of the Holder hereof, shall give rise to any liability of
the Holder for the purchase price of any Common Stock, whether such liability
is asserted by the Company or by creditors of the Company.

 

15.                                 Miscellaneous.

 

15.1.                        Nonwaiver
and Expenses. No course of dealing or any delay or failure to exercise any
right hereunder on the part of the Holder shall operate as a waiver of such
right or otherwise prejudice Holder’s rights, powers or remedies. If the
Company fails to make, when due, any payments provided for hereunder, or fails
to comply with any other provision of this Warrant, the Company shall pay to
the Holder such amounts as shall be sufficient to cover any third party costs
and expenses including, but not limited to, reasonable attorneys’ fees,
including those of appellate proceedings, incurred by the Holder in collecting
any amounts due pursuant hereto or in otherwise enforcing any of its rights,
powers or remedies hereunder.

 

15

 

15.2.                        Notice
Generally. All notices, requests, demands or other communications provided
for herein shall be in writing and shall be given in the manner and to the
addresses set forth in the Preferred Stock Purchase Agreement.

 

15.3.                        Successors
and Assigns. Subject to compliance with the provisions of Section 3.1,
this Warrant and the rights evidenced hereby shall inure to the benefit of and
be binding upon the successors of the Company and the successors and assigns of
the Holder. The provisions of this Warrant are intended to be for the benefit
of all Holders from time to time of this Warrant, and shall be enforceable by
any such Holder.

 

15.4.                        Amendment.
This Warrant may be modified or amended or the provisions of this Warrant
waived with the written consent of both the Company and the Holder.

 

15.5.                        Severability.
Wherever possible, each provision of this Warrant shall be interpreted in such
manner as to be effective and valid under applicable law, but if any provision
of this Warrant shall be prohibited by or invalid under applicable law, such
provision shall be modified to the extent of such prohibition or invalidity,
without invalidating the remainder of such provision or the remaining
provisions of this Warrant.

 

15.6.                        Headings.
The headings used in this Warrant are for the convenience of reference only and
shall not, for any purpose, be deemed a part of this Warrant.

 

15.7.                        Governing
Law. This Warrant and the transactions contemplated hereby shall be deemed
to be consummated in the State of New York and shall be governed by and
interpreted in accordance with the local laws of the State of New York without
regard to the provisions thereof relating to conflicts of laws. The Company
hereby irrevocably consents to the exclusive jurisdiction of the State and
Federal courts located in New York City, New York in connection with any action
or proceeding arising out of or relating to this Warrant. In any such
litigation the Company agrees that the service thereof may be made by certified
or registered mail directed to the Company pursuant to Section 15.2.

 

[Signature Page Follows]

 

16

 

IN WITNESS
WHEREOF, Genetronics Biomedical Corporation has caused this Warrant to be
executed by its duly authorized officer and attested by its Secretary.

 

Dated:
July 14, 2003

 

 

	
   

  	
  GENETRONICS
  BIOMEDICAL CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name: James
  L. Heppell

  
	
   

  	
  Title:  Chairman

  
	
   

  	
   

  
	
   

  	
   

  
	
  Attest:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
  Name:
  Douglas Murdock

  	
   

  
	
  Title:   Secretary

  	
   

  
						

 

17

 

EXHIBIT A

 

SUBSCRIPTION FORM

 

[To be executed only upon exercise of Warrant]

 

1.                                       The
undersigned hereby elects to purchase
               
shares of the Common Stock of Genetronics Biomedical Corporation pursuant to
the terms of the attached Warrant, and tenders herewith payment of the purchase
price of such shares in full.

 

2.                                       The
undersigned hereby elects to convert the attached Warrant into Common Stock of Genetronics
Biomedical Corporation through “cashless exercise” in the manner specified in
the Warrant.  This conversion is
exercised with respect to
                                            
of the Shares covered by the Warrant.

 

3.                                       Please
issue a certificate or certificates representing said shares in the name of the
undersigned or in such other name as is specified below:

 

 

	
   

  	
   

  
	
   

  	
  (Name)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  (Address)

  

[and, if such
shares of Common Stock shall not include all of the shares of Common Stock
issuable as provided in this Warrant, that a new Warrant of like tenor and date
for the balance of the shares of Common Stock issuable hereunder be delivered
to the undersigned.]

 

 

	
   

  	
   

  
	
  (Name of
  Registered Owner)

  
	
   

  
	
   

  
	
   

  	
   

  
	
  (Signature
  of Registered Owner)

  
	
   

  
	
   

  	
   

  
	
  (Street
  Address)

  
	
   

  
	
   

  	
   

  
	
  (State) (Zip
  Code)

  
			

 

NOTICE: The
signature on this subscription must correspond with the name as written upon
the face of the Warrant in every particular, without alteration or enlargement
or any change whatsoever.

 

18

 

EXHIBIT B

 

ASSIGNMENT FORM

 

FOR VALUE
RECEIVED the undersigned registered owner of this Warrant for the purchase of
shares of common stock of Genetronics Biomedical Corporation hereby sells,
assigns and transfers unto the Assignee named below all of the rights of the
undersigned under this Warrant, with respect to the number of shares of common
stock set forth below:

 

	
   

  	
   

  
	
   

  
	
   

  	
   

  
	
   

  
	
   

  	
   

  
	
  (Name and
  Address of Assignee)

  
	
   

  
	
   

  	
   

  
	
  (Number of
  Shares of Common Stock)

  

 

 

and does
hereby irrevocably constitute and appoint
                      
attorney-in-fact to register such transfer on the books of the Company,
maintained for the purpose, with full power of substitution in the premises.

 

 

	
  Dated:

  	
   

  	
   

  
	
   

  
	
   

  	
   

  
	
  (Print Name
  and Title)

  
	
   

  
	
   

  	
   

  
	
  (Signature)

  
	
   

  
	
   

  	
   

  
	
  (Witness)

  
				

 

 

NOTICE: The
signature on this assignment must correspond with the name as written upon the
face of the Warrant in every particular, without alteration or enlargement or
any change whatsoever.

 

19

 

EXHIBIT C

 

FORM OF INVESTMENT REPRESENTATION LETTER

 

In connection
with the acquisition of [warrants (the “Warrants”) to purchase
           shares of common
stock of Genetronics Biomedical Corporation (the “Company”), par value $0.001
per share (the “Common
Stock”)][        shares of common stock
of Genetronics Biomedical Corporation (the “Company”), par value $0.001 per
share (the “Common Stock”) upon the exercise of warrants by
               ],
by
                      
(the “Holder”) from                        ,
the Holder hereby represents and warrants to the Company as follows:

 

The Holder (i)
is an “Accredited Investor” as that term is defined in Rule 501 of Regulation D
promulgated under the Securities Act of 1933, as amended (the “Act”); and (ii)
has the ability to bear the economic risks of such Holder’s prospective
investment, including a complete loss of Holder’s investment in the Warrants
and the shares of Common Stock issuable upon the exercise thereof
(collectively, the “Securities”).

 

The Holder, by
acceptance of the Warrants, represents and warrants to the Company that the
Warrants and all securities acquired upon any and all exercises of the Warrants
are purchased for the Holder’s own account, and not with view to distribution
of either the Warrants or any securities purchasable upon exercise thereof in
violation of applicable securities laws.

 

The Holder
acknowledges that (i) the Securities have not been registered under the Act,
(ii) the Securities are “restricted securities” and the certificate(s)
representing the Securities shall bear the following legend, or a similar
legend to the same effect, until (i) in the case of the shares of Common Stock
underlying the Warrants, such shares shall have been registered for resale by
the Holder under the Act and effectively been disposed of in accordance with a
registration statement that has been declared effective; or (ii) in the opinion
of counsel for the Company such Securities may be sold without registration
under the Act:

 

“[NEITHER] THE
SECURITIES REPRESENTED BY THIS CERTIFICATE [NOR THE SECURITIES INTO WHICH THEY
ARE EXERCISABLE] HAVE [NOT] BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE “ACT”), AND ALL SUCH SECURITIES ARE SUBJECT TO RESTRICTIONS ON
TRANSFERABILITY AS SET FORTH IN THIS CERTIFICATE. [NEITHER] THE SECURITIES
REPRESENTED HEREBY [NOR THE SECURITIES INTO WHICH THEY ARE EXERCISABLE]
MAY [NOT] BE SOLD, TRANSFERRED, OR OTHERWISE DISPOSED OF IN THE ABSENCE OF
AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR AN OPINION OF COUNSEL,
REASONABLY ACCEPTABLE TO COUNSEL FOR THE COMPANY, TO THE EFFECT THAT THE
PROPOSED SALE, TRANSFER, OR DISPOSITION MAY BE EFFECTUATED WITHOUT
REGISTRATION UNDER THE ACT.”

 

20

 

IN WITNESS
WHEREOF, the Holder has caused this Investment Representation Letter to be
executed in its corporate name by its duly authorized officer this
      day of
                    
200  .

 

 

	
  [Name]

  
	
   

  
	
   

  
	
  By:

  	
   

  	
   

  
	
  Name:

  
	
  Title:

  

 

21

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