Document:

Exhibit
10.2

 

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.

 

 

Warrant No. W-   

 

FORM OF COMMON STOCK PURCHASE WARRANT

 

To Purchase «Shares» Shares of Common Stock of

BIOSANTE PHARMACEUTICALS, INC.

 

THIS IS TO CERTIFY THAT «Name», or registered assigns
(the “Holder”), is entitled, during the Exercise Period (as hereinafter
defined), to purchase from BioSante Pharmaceuticals, Inc., 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 $2.15 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 Illinois 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 August 4, 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, $0.0001 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 4.3.

 

“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 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
bid 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 bid 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 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 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.

 

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“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. Unless
and until the Current Warrant Price is adjusted pursuant to the terms herein,
the initial Current Warrant Price shall be $2.15 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 August 3, 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 4.3.

 

“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).

 

“Purchase Agreement” means that certain Common
Stock and Warrant Purchase Agreement dated as of August 4, 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.

 

“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

 

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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» 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 if permitted pursuant to the
terms of this Warrant 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
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.

 

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 of immediately available funds 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

 

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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 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. 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.

 

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3.                                       Transfer,
Division and Combination.

 

3.1.                              Transfer.
The Warrants and the Warrant Stock shall be freely transferable, subject to
compliance with this Section 3.1 and 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, the transfer of this Warrant
or the resale of 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 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 AUGUST 4, 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

 

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NO COST BY WRITTEN
REQUEST MADE BY THE HOLDER OF RECORD OF THIS CERTIFICATE TO THE SECRETARY OF
THE COMPANY.”

 

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.

 

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

 

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(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.                              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 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.

 

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4.3.                              Reorganization,
Reclassification, Merger, Consolidation or Disposition of Assets.

 

(a)  If there
shall occur a Change of Control and, 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, 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 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.

 

(B)  In case of
any such Change of Control described in Section 4.3(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.

 

4.4.                              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.

 

4.5.                              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.

 

4.6.                              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

 

9

 

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 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;

 

(d)                                 the
Company shall cause the holders of its Common Stock to be entitled to receive
(i) any dividend or other distribution of cash, (ii) any evidences of its
indebtedness, or (iii) any shares of stock of any class or any 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 (iv) 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, in any one
or more of such cases, the Company shall give to the Holder (i) at least 15
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,

 

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consolidation,
sale, transfer, disposition, dissolution, liquidation or winding up, at least
15 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 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 certificate 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

 

11

 

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 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

 

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 be prepared by the Company in accordance with GAAP (except as may be
indicated thereon or in the notes thereto) 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.

 

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.

 

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.

 

13

 

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 material provision of this Warrant, the Company shall pay to the Holder
such amounts as shall be sufficient to cover any reasonable and documented
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.

 

15.2.                        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 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]

 

14

 

IN WITNESS WHEREOF, BioSante Pharmaceuticals, Inc. has
caused this Warrant to be executed by its duly authorized officer and attested
by its Secretary.

 

Dated:  August
4, 2003

 

 

	
   

  	
  BIOSANTE
  PHARMACEUTICALS, INC.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  Name: Stephen M.
  Simes

  	
   

  
	
   

  	
  Title: President
  and Chief Executive Officer

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Attest:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  	
   

  
	
  Name: Phillip B.
  Donenberg

  	
   

  	
   

  
	
  Title: Secretary

  	
   

  	
   

  
								

 

15

 

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 BioSante Pharmaceuticals, Inc. 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
BioSante Pharmaceuticals, Inc. 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.

 

16

 

EXHIBIT B

 

ASSIGNMENT FORM

 

FOR VALUE RECEIVED
the undersigned registered owner of this Warrant for the purchase of shares of
common stock of BioSante Pharmaceuticals, Inc. 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.

 

17

 

EXHIBIT C

 

FORM OF INVESTMENT REPRESENTATION LETTER

 

In connection with
the acquisition of [warrants (the “Warrants”) to purchase
     shares of common stock of BioSante Pharmaceuticals,
Inc. (the “Company”), par value $0.0001 per share (the “Common
Stock”)][   shares of common stock of BioSante Pharmaceuticals,
Inc. (the “Company”), par value $0.0001 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.”]*

 

*
Bracketed language to be inserted if applicable.

 

18

 

IN WITNESS
WHEREOF, the Holder has caused this Investment Representation Letter to be
executed this    day of
           200 .

 

[Name]

 

 

	
  By:

  	
   

  	
   

  
	
  Name:

  
	
  Title:

  

 

19Exhibit 10.3

 

INVESTOR RIGHTS AGREEMENT

 

This Investor
Rights Agreement (this “Agreement”) is made and entered into as of August 4,
2003 among BioSante Pharmaceuticals, Inc., 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 Common 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 Illinois
generally are authorized or required by law or other government actions to
close.

 

“Commission”
means the Securities and Exchange Commission.

 

“Common
Stock” means the Company’s Common Stock, par value $0.0001 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 35th 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.

 

“Purchased
Shares” means the shares of Common Stock purchased by the Purchasers
pursuant to the Purchase Agreement.

 

“Registrable
Securities” means (a) the Purchased Shares and the Warrant Shares (without
regard to any limitations on beneficial ownership contained in the Purchase
Agreement or Warrants) or other securities issued or issuable to each Purchaser
or its transferee or designee (i) upon exercise of the Warrants, or (ii) upon
any distribution with respect to, any exchange for or any replacement of such
Purchased Shares 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.

 

2

 

“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 reasonable best efforts to cause the
Registration Statement to be declared effective under the Securities Act not
later than ninety (90) 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) with respect to any Holder, such
time as all Registrable Securities held by such Holder 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

 

3

 

transfer agent
to such effect (the “Effectiveness Period”). 
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.  The Registration Statement filed in
accordance with Section 2 may include other shares of the Company with respect
to which registration rights have been granted, and may include shares of the
Company being sold for the account of the Company; provided, however, that such
inclusions do not adversely affect the registration of 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 and independent certified
public accountants 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 their receipt thereof. 
In the event of any such objection, the Holders shall provide the
Company with any requested revisions to such prospectus or supplement within
two (2) Business Days of such objection.

 

(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 reasonably
possible to any comments received from the Commission with respect to the
Registration Statement or any amendment thereto and as promptly as 

 

4

 

reasonably
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 Statement during the applicable 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 Special Counsel as promptly as reasonably 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) and (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 notify the Holders of
Registrable Securities to be sold and the Special Counsel as promptly as
reasonably possible, 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) 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 (iv) 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 reasonable best efforts to avoid the issuance of, or, if issued, use
reasonable 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 reasonably 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 

 

5

 

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 Holder’s Special Counsel), violate applicable
law.

 

(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 best
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 reasonably 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)                                     Following
the occurrence of any event contemplated by Section 3(c)(iv), as promptly as
possible, prepare a supplement or amendment, including a post-effective 

 

6

 

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 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 any 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.

 

(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 (“Holder
Information”), 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.  Each Holder agrees promptly to furnish to
the Company all Holder Information required to be disclosed in such
Registration Statement in order to make the information previously furnished to
the Company by such Holder not misleading. 
No Holder of Registrable Securities shall be entitled to liquidated
damages pursuant to Section 7(e) hereof unless and until such Holder shall have
provided all such Holder Information. 
Any sale of any Registrable Securities by any Holder shall constitute a
representation and warranty by such Holder that the Holder Information does not
as of the time of such sale contain any untrue statement of a material fact
relating to such Holder or its plan of distribution and that such Prospectus
does not as of the time of such sale omit to state any material fact relating
to such Holder or its plan of distribution necessary to make the statements in
such Prospectus, in the light of the circumstances under which they were made,
not misleading.

 

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 

 

7

 

Section
3(c)(i), 3(c)(ii), 3(c)(iii), 3(c)(iv), 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 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 60 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 any 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 securities or Blue Sky laws (including, without limitation, reasonable
and documented 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) reasonable and documented 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 

 

8

 

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,
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 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 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) 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(a) shall not apply to amounts paid in
settlement of any Losses if such settlement is effected without the prior
written consent of the Company, which consent shall not be unreasonably
withheld.  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,

 

9

 

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 out of or based 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 out of or based 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 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) 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 

 

10

 

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

 

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) shall
be paid to the Indemnified Party, 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

 

11

 

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 limitation of any indemnification provisions under the Purchase
Agreement.

 

6.                                       Rule
144.

 

As long as any
Holder owns Purchased 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 Purchased 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, all to the extent required from time to time to enable such Person to
sell Purchased 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 Purchased Shares and Warrant
Shares. Upon the request of any Holder, 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 

 

12

 

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 do not impair the rights of the Holders set forth
herein, and are not otherwise in conflict with the provisions of this
Agreement.  For avoidance of doubt, the
subsequent grant of a right to require that the Company file one or more
registration statements shall not in and of itself be deemed to impair the rights
granted to the Holders hereunder.

 

(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 

 

13

 

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. 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 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 thirty-fifth (35th) 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 thirty-fifth (35th) day
following the Closing Date, or (ii) the Company 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 any 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 rights of the
Holders to exercise into Warrant Shares are suspended for any reason due to an
intentional and willful act by the Company without the consent of the
particular 

 

14

 

Holder other
than as set forth in the Purchase 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 Purchased Shares purchased and then outstanding pursuant to the
Purchase Agreement for the initial thirty (30) day period until the applicable
Event has been cured, 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 Purchased Shares 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 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 an 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,

 

15

 

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., 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:

 

BioSante
Pharmaceuticals, Inc.

111 Barclay Boulevard

Lincolnshire, Illinois 60069

Attention:  Stephen M. Simes, President
and Chief Executive Officer

Facsimile No. (847) 478-9260

 

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:

 

Oppenheimer
Wolff & Donnelly LLP

Plaza VII Building, Suite 3300

45 South Seventh Street

Minneapolis, Minnesota 55402

Attention:  Amy E. Culbert, Esq.

Facsimile No.: (612) 607-7100

 

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 at least 75% 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 

 

16

 

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 Purchased
Shares, 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. 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 with a
transfer of Purchased Shares, Warrants or Registrable Securities (i) that the
Holder or transferee of all or a portion of the Purchased Shares, 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; provided, however, that the liquidated damages
provided in Section 7(e) shall be the Holders exclusive remedy in the event an
Event as described in Section 7(e) has occurred.

 

(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

 

17

 

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.

 

[signature page follows]

 

18

 

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:

 

BIOSANTE PHARMACEUTICALS, INC.

 

 

	
  By:

  	
  /s/ Stephen M. Simes

  	
   

  
	
  Name:
  Stephen M. Simes

  
	
  Title:  President and Chief Executive Officer

  

 

19

 

 

PURCHASERS:

 

	
  Print Exact
  Name:

  	
    SCO Capital Partners LLC

  	
   

  
	
   

  
	
  By:

  	
    /s/ Steven H. Rouhandeh

  	
   

  
	
  Name:

  	
  Steven H.
  Rouhandeh

  
	
  Title:  Chairman

  
						

 

 

	
  Print Exact
  Name:

  	
    SDS Merchant Fund, LP

  	
   

  
	
   

  
	
  By:

  	
    /s/ Scott E. Derby

  	
   

  
	
  Name:  Scott E. Derby

  
	
  Title:  General Counsel

  
					

 

 

	
  Print Exact
  Name:

  	
    North Sound Legacy Fund LLC

  	
   

  
	
   

  
	
  By:

  	
    /s/ Andrew Wilder

  	
   

  
	
  Name:  Andrew Wilder

  
	
  Title:  Chief Financial Officer

  
					

 

 

	
  Print Exact
  Name:

  	
    North Sound Legacy
  Institutional Fund LLC

  	
   

  
	
   

  
	
  By:

  	
    /s/ Andrew Wilder

  	
   

  
	
  Name:  Andrew Wilder

  
	
  Title:  Chief Financial Officer

  
					

 

 

	
  Print Exact
  Name:

  	
    North Sound Legacy
  International Ltd.

  	
   

  
	
   

  
	
  By:

  	
    /s/ Andrew Wilder

  	
   

  
	
  Name:  Andrew Wilder

  
	
  Title:  Chief Financial Officer

  
					

 

 

	
  Print Exact
  Name:

  	
    Perceptive Life Sciences Master
  Fund, Ltd.

  	
   

  
	
   

  
	
  By:

  	
    /s/ Andrew C. Sankin

  	
   

  
	
  Name:  Andrew C. Sankin

  
	
  Title:  Director

  
					

 

20

 

	
  Print Exact
  Name:

  	
    Joseph Edelman

  	
   

  
	
   

  
	
  By:

  	
    /s/ Joseph Edelman

  	
   

  
	
  Name:   Joseph Edelman

  
	
  Title:

  
					

 

 

	
  Print Exact
  Name:

  	
    Multi-National Consulting
  Services, IV, LLC

  	
   

  
	
   

  
	
  By:

  	
    /s/ Andrew C. Sankin

  	
   

  
	
  Name:  Andrew C. Sankin

  
	
  Title:    Executive Director

  
					

 

 

	
  Print Exact
  Name:

  	
    Daniel B. Heller

  	
   

  
	
   

  
	
  By:

  	
    /s/ Daniel B. Heller

  	
   

  
	
  Name:   Daniel B. Heller

  
	
  Title:  

  
					

 

 

	
  Print Exact
  Name:

  	
    Paul Scharfer

  	
   

  
	
   

  
	
  By:

  	
    /s/ Paul Scharfer

  	
   

  
	
  Name:   Paul Scharfer

  
	
  Title:  

  
					

 

 

	
  Print Exact
  Name:

  	
    Quogue Capital LLC

  	
   

  
	
   

  
	
  By:

  	
    /s/ Wayne Philip Rothbaum

  	
   

  
	
  Name:   Wayne Philip Rothbaum

  
	
  Title:  Principal

  
					

 

 

	
  Print Exact
  Name:

  	
    Orion Biomedical Offshore
  Fund, LP

  	
   

  
	
   

  
	
  By:

  	
    /s/ Lindsay A. Rosenwald,
  M.D.

  	
   

  
	
  Name:   Lindsay A. Rosenwald, M.D.

  
	
  Title:  Managing Member of G.P.

  
					

 

21

 

 

	
  Print Exact
  Name:

  	
    Orion Biomedical Fund, LP

  	
   

  
	
   

  
	
  By:

  	
    /s/ Lindsay A. Rosenwald, MD

  	
   

  
	
  Name:   Lindsay A. Rosenwald, MD

  
	
  Title:  Managing Member of G.P.

  
					

 

 

	
  Print Exact
  Name:

  	
    Richard B. Stone

  	
   

  
	
   

  
	
  By:

  	
    /s/ Richard B. Stone

  	
   

  
	
  Name:   Richard B. Stone

  
	
  Title:  

  
					

 

 

	
  Print Exact
  Name:

  	
    Steven M. Oliveira 1998
  Charitable Remainder Unitrust

  	
   

  
	
   

  
	
  By:

  	
    /s/ Steven Oliveira

  	
   

  
	
  Name:   Steven Oliveira

  
	
  Title:  Trustee

  
					

 

 

	
  Print Exact
  Name:

  	
    Morningstar Trust

  	
   

  
	
   

  
	
  By:

  	
   

  	
   

  
	
  Name:  

  
	
  Title:  

  
					

 

 

	
  Print Exact
  Name:

  	
    Victor A. Morgenstern

  	
   

  
	
   

  
	
  By:

  	
   

  	
   

  
	
  Name:  

  
	
  Title:  

  
					

 

 

	
  Print Exact
  Name:

  	
    Panacea Fund, LLC

  	
   

  
	
   

  
	
  By:

  	
    /s/ William Harris
  Investors, Inc.

  	
   

  
	
  Name:   Jack Polsky

  
	
  Title:  Chief Executive Officer

  
				

 

22

 

	
  Print Exact
  Name:

  	
    Irving B. Harris Revocable
  Trust

  	
   

  
	
   

  
	
  By:

  	
    /s/ Irving B. Harris

  	
   

  
	
  Name:   Irving B. Harris

  
	
  Title:  Trustee

  
					

 

 

	
  Print Exact
  Name:

  	
    Virginia H. Polsky Trust

  	
   

  
	
   

  
	
  By:

  	
    /s/ Jack R. Polsky

  	
   

  
	
  Name:   Jack R. Polsky

  
	
  By:  Delegation of Authority dated 6/6/96

  
					

 

 

	
  Print Exact
  Name:

  	
    Roxanne H. Frank Trust

  	
   

  
	
   

  
	
  By:

  	
    /s/ Jack R. Polsky

  	
   

  
	
  Name:   Jack R. Polsky

  
	
  By:  Delegation of Authority dated 12/3/99

  
	
   

  
	
   

  
	
  By:

  	
    /s/ Jerome Kahn, Jr.

  	
   

  
	
  Name:   Jerome Kahn, Jr.

  
	
  By:  Delegation of Authority dated 12/3/99

  
					

 

 

	
  Print Exact
  Name:

  	
    Couderay Partners

  	
   

  
	
   

  
	
  By:

  	
    /s/ Michael S. Resnick

  	
   

  
	
  Name:   Michael S. Resnick

  
	
  Title:  Management Agent

  
	
   

  
	
   

  
	
  By:

  	
    /s/ Jerome Kahn, Jr.

  	
   

  
	
  Name:   Jerome Kahn, Jr.

  
	
  Title:   Co-Managing Agent

  
						

 

 

	
  Print Exact
  Name:

  	
    JO & Co.

  	
   

  
	
   

  
	
  By:

  	
    /s/ Ross J. Mangano

  	
   

  
	
  Name:   Ross J. Mangano

  
	
  Title:  Partner

  
					

 

23

 

	
  Print Exact
  Name:

  	
    Crestview Capital Fund II,
  LP

  	
   

  
	
   

  
	
  By:

  	
    /s/ Richard Levy

  	
   

  
	
  Name:   Richard Levy

  
	
  Title:  Managing Member

  
					

 

 

	
  Print Exact
  Name:

  	
    James S. Levy Living Trust

  	
   

  
	
   

  
	
  By:

  	
    /s/ James S. Levy

  	
   

  
	
  Name:   James S. Levy

  
	
  Title:

  
					

 

 

	
  Print Exact
  Name:

  	
    Mitchell I. Dolins as
  Trustee of theMitchell I. Dolins Revocable Trust U/A/D 12/24/91

  	
   

  
	
   

  
	
  By:

  	
    /s/ Mitchell I. Dolins

  	
   

  
	
  Name:   Mitchell I. Dolins

  
	
  Title:

  
					

 

 

	
  Print Exact
  Name:

  	
    Bradley S. Glaser and Amy E.
  Glaser, as Tenant by the Entirety

  	
   

  
	
   

  
	
  By:

  	
    /s/ Amy E. Glaser

  	
   

  
	
  Name:   Amy E. Glaser

  
	
  Title:

  
	
   

  
	
   

  
	
  By:

  	
    /s/ Bradley S. Glaser

  	
   

  
	
  Name:   Bradley S. Glaser

  
	
  Title:

  
						

 

 

	
  Print Exact
  Name:

  	
    Dr. Herman S. Graf Zu
  Munster

  	
   

  
	
   

  
	
  By:

  	
    Herman S. Graf Zu Munster

  	
   

  
	
  Name:  Herman S. Graf Zu Munster

  
	
  Title:

  
					

 

 

	
  Print Exact
  Name:

  	
    Richard Sheiner

  	
   

  
	
   

  
	
  By:

  	
    /s/ Richard Sheiner

  	
   

  
	
  Name:   Richard Sheiner

  
	
  Title:

  
					

 

24

 

	
  Print Exact
  Name:

  	
    Roscoe F. Nicholson II for
  Roscoe F. Nicholson II Profit Sharing Plan

  	
   

  
	
   

  
	
  By:

  	
    /s/ Roscoe F.  Nicholson II

  	
   

  
	
  Name:   Roscoe F.  Nicholson II

  
	
  Title:

  
					

 

 

	
  Print Exact
  Name:

  	
    Shirley F. Nicholson for IRA
  Shirley M. Nicholson

  	
   

  
	
   

  
	
  By:

  	
    /s/ Shirley M. Nicholson

  	
   

  
	
  Name:   Shirley M. Nicholson

  
	
  Title:

  
					

 

 

	
  Print Exact
  Name:

  	
    Dr. Terry L. Lazarus

  	
   

  
	
   

  
	
  By:

  	
    /s/ Terry Lazarus, D.D.S.

  	
   

  
	
  Name:   Terry L. Lazarus

  
	
  Title:  Private Investor

  
					

 

 

	
  Print Exact
  Name:

  	
    Charles Burns

  	
   

  
	
   

  
	
  By:

  	
    /s/ Charles Burns

  	
   

  
	
  Name:   Charles Burns

  
	
  Title:

  
					

 

 

	
  Print Exact
  Name:

  	
    John E. Urheim

  	
   

  
	
   

  
	
  By:

  	
    /s/ John E. Urheim

  	
   

  
	
  Name:   John E. Urheim

  
	
  Title:

  
					

 

 

	
  Print Exact
  Name:

  	
    Stephen M. Simes, Rev. Trust
  U/A/D. 7/6/98

  	
   

  
	
   

  
	
  By:

  	
    /s/ Stephen M. Simes

  	
   

  
	
  Name:   Stephen M. Simes

  
	
  Title:  Trustee

  
					

 

25

 

 

	
  Print Exact
  Name:

  	
    Leah M. Lehman

  	
   

  
	
   

  
	
  By:

  	
    /s/ Leah M. Lehman

  	
   

  
	
  Name:   Leah M. Lehman

  
	
  Title:

  
					

 

 

	
  Print Exact
  Name:

  	
    Phillip B. Donenberg

  	
   

  
	
   

  
	
  By:

  	
    /s/ Phillip B. Donenberg

  	
   

  
	
  Name:   Phillip B. Donenberg

  
	
  Title:

  
					

 

 

[Omnibus BioSante Pharmaceuticals, Inc. Investor Rights Agreement
Signature Page]

 

26

 

SCHEDULE 1

 

PURCHASERS

 

	
  Name and
  Address

  	
   

  	
  Copy of Notice to:

  
	
   

  	
   

  	
   

  
	
  SCO Capital
  Partners LLC

  	
   

  	
  Michael
  Grundei, Esq.

  
	
  1285 Avenue
  of the Americas, 35th Floor

  	
   

  	
  Wiggin
  & Dana LLP

  
	
  New York, NY
  10019

  	
   

  	
  400 Atlantic Street

  
	
  Steven H.
  Rouhandeh

  	
   

  	
  Stamford, CT  06901

  
	
  T:
  212-554-4158

  	
   

  	
  Tel: 203-363-7630

  
	
  F:
  212-554-4058

  	
   

  	
  Fax: 203-363-7676

  
	
  Srouhandeh@SCOGroup.com

  	
   

  	
  Email:
  mgrundei@wiggin.com

  
	
   

  	
   

  	
   

  
	
  SDS Merchant Fund, LP

  	
   

  	
   

  
	
  53 Forest Ave., 2nd Floor

  	
   

  	
   

  
	
  Old Greenwich, CT 06870

  	
   

  	
   

  
	
  Attn: Scott Derby

  	
   

  	
   

  
	
  T: 203-967-5880

  	
   

  	
   

  
	
  F: 203-967-5851

  	
   

  	
   

  
	
  scott@sdscapital.com

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  North Sound Legacy Fund LLC

  	
   

  	
   

  
	
  53 Forest Avenue

  	
   

  	
   

  
	
  Suite 202

  	
   

  	
   

  
	
  Old Greenwich, CT 06870

  	
   

  	
   

  
	
  Attn: Andrew Wilder

  	
   

  	
   

  
	
  T: 203-967-5700

  	
   

  	
   

  
	
  F: 203-967-5701

  	
   

  	
   

  
	
  Andrew@northsound.com

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  North Sound Legacy Institutional Fund LLC

  	
   

  	
   

  
	
  53 Forest Avenue

  	
   

  	
   

  
	
  Suite 202

  	
   

  	
   

  
	
  Old Greenwich, CT 06870

  	
   

  	
   

  
	
  Attn: Andrew Wilder

  	
   

  	
   

  
	
  T: 203-967-5700

  	
   

  	
   

  
	
  F: 203-967-5701

  	
   

  	
   

  
	
  Andrew@northsound.com

  	
   

  	
   

  

 

27

 

	
  Name and
  Address

  	
   

  	
  Copy of Notice to:

  
	
   

  	
   

  	
   

  
	
  North Sound Legacy International Ltd.

  	
   

  	
   

  
	
  53 Forest Avenue

  	
   

  	
   

  
	
  Suite 202

  	
   

  	
   

  
	
  Old Greenwich, CT 06870

  	
   

  	
   

  
	
  Attn: Andrew Wilder

  	
   

  	
   

  
	
  T: 203-967-5700

  	
   

  	
   

  
	
  F: 203-967-5701

  	
   

  	
   

  
	
  Andrew@northsound.com

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Perceptive Life Sciences Master Fund, Ltd.

  	
   

  	
   

  
	
  5437 Connecticut Ave., NW

  	
   

  	
   

  
	
  Suite 100

  	
   

  	
   

  
	
  Washington, DC  20015

  	
   

  	
   

  
	
  Attn: Andrew Sankin

  	
   

  	
   

  
	
  P: 202-537-0029

  	
   

  	
   

  
	
  F: 202-537-0030

  	
   

  	
   

  
	
  sankin@hedgesource.org

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Deliver Securities to:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Perceptive Life Sciences Master Fund, Ltd.

  	
   

  	
   

  
	
  c/o First New York Securities

  	
   

  	
   

  
	
  850 Third Ave, 17th Floor

  	
   

  	
   

  
	
  New York, NY 10022

  	
   

  	
   

  
	
  Attn: Kenny Kountouras

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Joseph Edelman

  	
   

  	
   

  
	
  300 Central Park West

  	
   

  	
   

  
	
  Apt. 25-G

  	
   

  	
   

  
	
  New York, NY 10024

  	
   

  	
   

  
	
  T: 202-537-0029

  	
   

  	
   

  
	
  F: 202-537-0030

  	
   

  	
   

  
	
  sankin@hedgesource.org

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Deliver Securities to:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Northeast Securities

  	
   

  	
   

  
	
  2425 Post Road

  	
   

  	
   

  
	
  Southport, CT 06890

  	
   

  	
   

  
	
  Attn: Nick DiFalco

  	
   

  	
   

  

 

28

 

	
  Name and
  Address

  	
   

  	
  Copy of Notice to:

  
	
   

  	
   

  	
   

  
	
  Multi-National Consulting Services, IV, LLC

  	
   

  	
   

  
	
  5437 Connecticut Ave., NW

  	
   

  	
   

  
	
  Suite 100

  	
   

  	
   

  
	
  Washington, DC  20015

  	
   

  	
   

  
	
  Attn: Andrew Sankin

  	
   

  	
   

  
	
  P: 202-537-0029

  	
   

  	
   

  
	
  F: 202-537-0030

  	
   

  	
   

  
	
  sankin@hedgesource.org

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Deliver Securities to:

  	
   

  	
   

  
	
  Multi-National Consulting Services, IV, LLC

  	
   

  	
   

  
	
  c/o Punk Ziegel

  	
   

  	
   

  
	
  520 Madison Avenue

  	
   

  	
   

  
	
  7th Floor

  	
   

  	
   

  
	
  New York, NY  10022

  	
   

  	
   

  
	
  Attn: John Bligh

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Daniel B. Heller

  	
   

  	
   

  
	
  48 CardinalFlower Lane

  	
   

  	
   

  
	
  West Windsor, NJ 08550

  	
   

  	
   

  
	
  T: 609-448-8760

  	
   

  	
   

  
	
  F: 212-331-6777

  	
   

  	
   

  
	
  d.heller@fnysllc.com

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Paul Scharfer

  	
   

  	
   

  
	
  265 East 66th Street, Apt. 6C

  	
   

  	
   

  
	
  New York, NY 10021

  	
   

  	
   

  
	
  T: 917-763-2015

  	
   

  	
   

  
	
  F:

  	
   

  	
   

  
	
  PSCHARFER@aol.com

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Quogue Capital LLC

  	
   

  	
   

  
	
  1285 Avenue of the Americas, 35th Floor

  	
   

  	
   

  
	
  New York, NY 10019

  	
   

  	
   

  
	
  Attn: Wayne Philip Rothbaum

  	
   

  	
   

  
	
  T: 212-554-4475

  	
   

  	
   

  
	
  F: 212-554-4450

  	
   

  	
   

  
	
  wrothbaum@quoguecapital.com

  	
   

  	
   

  

 

29

 

	
  Name and
  Address

  	
   

  	
  Copy of Notice to:

  
	
   

  	
   

  	
   

  
	
  Orion Biomedical Offshore Fund, LP

  	
   

  	
   

  
	
  787 Seventh Avenue, 48th Floor

  	
   

  	
   

  
	
  New York, NY 10019

  	
   

  	
   

  
	
  Attn: Lindsay A. Rosenwald, MD

  	
   

  	
   

  
	
  T: 212-554-4284

  	
   

  	
   

  
	
  F: 212-554-4314

  	
   

  	
   

  
	
  jkazam@paramountcapital.com

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Orion Biomedical Fund, LP

  	
   

  	
   

  
	
  787 Seventh Avenue, 48th Floor

  	
   

  	
   

  
	
  New York, NY 10019

  	
   

  	
   

  
	
  Attn: Lindsay A. Rosenwald, MD

  	
   

  	
   

  
	
  T: 212-554-4284

  	
   

  	
   

  
	
  F: 212-554-4314

  	
   

  	
   

  
	
  jkazam@paramountcapital.com

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Richard Stone

  	
   

  	
   

  
	
  44 West 77th Street

  	
   

  	
   

  
	
  New York, NY 10024

  	
   

  	
   

  
	
  T: 917-502-2809

  	
   

  	
   

  
	
  F: 212-750-7277

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Steven M. Oliveira 1998 Charitable Remainder Unitrust

  	
   

  	
   

  
	
  18 Fieldstone Court

  	
   

  	
   

  
	
  New City, NY 10956

  	
   

  	
   

  
	
  T: 845-634-5620

  	
   

  	
   

  
	
  F:

  	
   

  	
   

  
	
  Steve_oliveira@yahoo.com

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Morningstar Trust

  	
   

  	
   

  
	
  By Fay Morgenstern, Trustee

  	
   

  	
   

  
	
  106 Vine Avenue

  	
   

  	
   

  
	
  Highland Park, IL  60035

  	
   

  	
   

  
	
  T: 847-432-8632

  	
   

  	
   

  
	
  F:

  	
   

  	
   

  
	
  vmstar@msn.com

  	
   

  	
   

  

 

30

 

	
  Name and
  Address

  	
   

  	
  Copy of Notice to:

  
	
   

  	
   

  	
   

  
	
  Victor A. Morgenstern

  	
   

  	
   

  
	
  106 Vine Avenue

  	
   

  	
   

  
	
  Highland Park, IL  60035

  	
   

  	
   

  
	
  T: 847-432-8632

  	
   

  	
   

  
	
  F:

  	
   

  	
   

  
	
  vmstar@msn.com

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Panacea Fund, LLC

  	
   

  	
   

  
	
  c/o William Harris Investors, Inc.

  	
   

  	
   

  
	
  2 North LaSalle Street, Suite 400

  	
   

  	
   

  
	
  Chicago, IL  60602

  	
   

  	
   

  
	
  T: 312-621-0590

  	
   

  	
   

  
	
  F: 312-621-0984

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Irving B. Harris Revocable Trust

  	
   

  	
   

  
	
  c/o William Harris Investors, Inc.

  	
   

  	
   

  
	
  2 N. LaSalle Street, Suite 400

  	
   

  	
   

  
	
  Chicago, IL  60602

  	
   

  	
   

  
	
  T: 312-621-0590

  	
   

  	
   

  
	
  F: 312-621-0984

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Virginia H. Polsky Trust

  	
   

  	
   

  
	
  c/o William Harris Investors, Inc.

  	
   

  	
   

  
	
  2 N. LaSalle Street, Suite 400

  	
   

  	
   

  
	
  Chicago, IL  60602

  	
   

  	
   

  
	
  T: 312-621-0590

  	
   

  	
   

  
	
  F: 312-621-0984

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Roxanne H. Frank Trust

  	
   

  	
   

  
	
  c/o William Harris Investors, Inc.

  	
   

  	
   

  
	
  2 N. LaSalle Street, Suite 400

  	
   

  	
   

  
	
  Chicago, IL  60602

  	
   

  	
   

  
	
  T: 312-621-0590

  	
   

  	
   

  
	
  F: 312-621-0984

  	
   

  	
   

  

 

31

 

	
  Name and
  Address

  	
   

  	
  Copy of Notice to:

  
	
   

  	
   

  	
   

  
	
  Couderay Partners

  	
   

  	
   

  
	
  c/o William Harris Investors, Inc.

  	
   

  	
   

  
	
  2 N. LaSalle Street, Suite 400

  	
   

  	
   

  
	
  Chicago, IL  60602

  	
   

  	
   

  
	
  T: 312-621-0590

  	
   

  	
   

  
	
  F: 312-621-0984

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  JO & Co

  	
   

  	
   

  
	
  P.O. Box 1655

  	
   

  	
   

  
	
  South Bend, IN  46634

  	
   

  	
   

  
	
  Attn: Ross Mangano

  	
   

  	
   

  
	
  T: 574-232-8213

  	
   

  	
   

  
	
  F: 574-232-8223

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Crestview Capital Fund II, LP

  	
   

  	
   

  
	
  95 Revere Drive, Suite F

  	
   

  	
   

  
	
  Northbrook, IL 60062

  	
   

  	
   

  
	
  Attn: Richard Levy

  	
   

  	
   

  
	
  T: 847-559-0060

  	
   

  	
   

  
	
  F: 847-559-5807

  	
   

  	
   

  
	
  Richard@crestviewcap.com

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  James S. Levy Living Trust

  	
   

  	
   

  
	
  1349 N. Thatcher Avenue

  	
   

  	
   

  
	
  River Forest, IL  60305

  	
   

  	
   

  
	
  Attn: James S. Levy

  	
   

  	
   

  
	
  T: 312-595-6475

  	
   

  	
   

  
	
  F: 312-595-6139

  	
   

  	
   

  
	
  jlevy@mesirowfinancial.com

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Mitchell I. Dolins as Trustee of the

  	
   

  	
   

  
	
  Mitchell I. Dolins Revocable Trust

  	
   

  	
   

  
	
  U/A/D 12/24/91

  	
   

  	
   

  
	
  427 Brierhill Road

  	
   

  	
   

  
	
  Deerfield, IL  60015

  	
   

  	
   

  
	
  T: 847-940-1228

  	
   

  	
   

  
	
  F: 847-940-1253

  	
   

  	
   

  
	
  mickydd24@aol.com

  	
   

  	
   

  

 

32

 

	
  Name and
  Address

  	
   

  	
  Copy of Notice to:

  
	
   

  	
   

  	
   

  
	
  Bradley S. Glaser and Amy E. Glaser,

  	
   

  	
   

  
	
  as Tenant by the Entirety

  	
   

  	
   

  
	
  1204 Berans Road

  	
   

  	
   

  
	
  Owings Mills, MD  21117

  	
   

  	
   

  
	
  T: 410-252-2766

  	
   

  	
   

  
	
  F: 410-296-0973

  	
   

  	
   

  
	
  bglaser@vanguardequities.com

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Dr. Hermann S. Graf Zu Munster

  	
   

  	
   

  
	
  Umweger Str. 66

  	
   

  	
   

  
	
  D-76488 Baden-Baden

  	
   

  	
   

  
	
  Germany

  	
   

  	
   

  
	
  T: 011-49 7223 60014

  	
   

  	
   

  
	
  F: 011-49 7223 60016

  	
   

  	
   

  
	
  hs.muenster@t-online.de

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Richard Sheiner

  	
   

  	
   

  
	
  4771 Trenton Court

  	
   

  	
   

  
	
  Long Grove, IL  60047

  	
   

  	
   

  
	
  T: 312-364-8752

  	
   

  	
   

  
	
  F: 847-913-9256

  	
   

  	
   

  
	
  deployant@aol.com

  	
   

  	
   

  

 

33

 

	
  Name and
  Address

  	
   

  	
  Copy of Notice to:

  
	
   

  	
   

  	
   

  
	
  Roscoe F. Nicholson II for Roscoe F.
  Nicholson II Profit Sharing Plan (Mesirow Financial Inc.)

  	
   

  	
   

  
	
  1222 Forest Hill Drive

  	
   

  	
   

  
	
  Hendersonville, NC  28791

  	
   

  	
   

  
	
  T: 828-692-4433

  	
   

  	
   

  
	
  F: 828-693-9032

  	
   

  	
   

  
	
  roscoeii@ioa.com

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Shirley M. Nicholson

  	
   

  	
   

  
	
  for IRA Shirley M. Nicholson at Mesirow
  Financial

  	
   

  	
   

  
	
  1222 Forest Hill Drive

  	
   

  	
   

  
	
  Hendersonville, NC  28791

  	
   

  	
   

  
	
  T: 828-692-4433

  	
   

  	
   

  
	
  F: 828-693-9032

  	
   

  	
   

  
	
  roscoeii@ioa.com

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Dr. Terry L. Lazarus

  	
   

  	
   

  
	
  1951-A Weston Road

  	
   

  	
   

  
	
  Weston, Ontario M9N 1W8

  	
   

  	
   

  
	
  Canada

  	
   

  	
   

  
	
  T: 416-241-3472

  	
   

  	
   

  
	
  F:

  	
   

  	
   

  
	
  tllaz@rogers.com

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Charles Burns

  	
   

  	
   

  
	
  245 Waterloo Avenue

  	
   

  	
   

  
	
  Toronto, Ontario M3H 3Z5

  	
   

  	
   

  
	
  Canada

  	
   

  	
   

  
	
  T: 416-398-5995

  	
   

  	
   

  
	
  F: 905-762-2386

  	
   

  	
   

  
	
  caburns@rogers.com

  	
   

  	
   

  

 

34

 

	
  Name and
  Address

  	
   

  	
  Copy of Notice to:

  
	
   

  	
   

  	
   

  
	
  John E. Urheim

  	
   

  	
   

  
	
  5417 Taylor Lane

  	
   

  	
   

  
	
  Fort Collins, CO  80528

  	
   

  	
   

  
	
  T: 970-282-8108

  	
   

  	
   

  
	
  F: 970-282-8384

  	
   

  	
   

  
	
  jeurheim@aol.com

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Stephen M. Simes, Rev. Trust U/A/D 7/6/98

  	
   

  	
   

  
	
  Stephen M. Simes, Trustee

  	
   

  	
   

  
	
  111 Barclay Blvd, Suite 280

  	
   

  	
   

  
	
  Lincolnshire, IL  60069

  	
   

  	
   

  
	
  T: 847-478-0500 x100

  	
   

  	
   

  
	
  F: 847-478-9260

  	
   

  	
   

  
	
  ssimes@biosantepharma.com

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Leah M. Lehman

  	
   

  	
   

  
	
  14308 W. Braemore Close

  	
   

  	
   

  
	
  Libertyville, IL  60048

  	
   

  	
   

  
	
  T: 847-816-8921

  	
   

  	
   

  
	
  F: 847-478-9263

  	
   

  	
   

  
	
  llehman@biosantepharma.com

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Phillip B. Donenberg

  	
   

  	
   

  
	
  2090 Sheridan Road

  	
   

  	
   

  
	
  Buffalo Grove, IL  60089

  	
   

  	
   

  
	
  T: 847-821-0922

  	
   

  	
   

  
	
  F: 847-478-9263

  	
   

  	
   

  
	
  donenber@biosantepharma.com

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SCO Securities
  LLC

  	
   

  	
  Michael
  Grundei, Esq.

  
	
  1285 Avenue
  of the Americas, 35th Floor

  	
   

  	
  Wiggin
  & Dana LLP

  
	
  New York, NY
  10019

  	
   

  	
  400 Atlantic Street

  
	
  Steven H.
  Rouhandeh

  	
   

  	
  Stamford, CT  06901

  
	
  T:
  212-554-4158

  	
   

  	
  Tel: 203-363-7630

  
	
  F:
  212-554-4058

  	
   

  	
  Fax: 203-363-7676

  
	
  Srouhandeh@SCOGroup.com

  	
   

  	
  Email: mgrundei@wiggin.com

  

 

35

 

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 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 transactions with
broker-dealers or other financial institutions which require the delivery of 

 

36

 

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.

 

In addition,
if required under applicable law or the rules or regulations of the 

 

37

 

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 customarily paid by the issuer 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.

 

38

 

EXHIBIT B

 

FORM OF NOTICE OF EFFECTIVENESS OF REGISTRATION STATEMENT

 

[Name and
Address of Transfer Agent]

 

Re:  BioSante Pharmaceuticals, Inc.

 

Dear
[            ]:

 

We are counsel
to BioSante Pharmaceuticals, Inc., a Delaware corporation (the “Company”), and
have represented the Company in connection with that certain Common 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 shares of its
Common Stock, par value $0.0001 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 issued
pursuant to the Purchase Agreement and the Common Stock issuable upon 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-     (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]

  

 

39

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00054-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00054-of-00352.parquet"}]]