Document:

EXHIBIT
      4.2

    

    THIS
      WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF HAVE BEEN ACQUIRED
      FOR
      INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
      AMENDED (THE “ACT”), OR ANY STATE SECURITIES LAW. THIS WARRANT AND SUCH
      SECURITIES MAY NOT BE OFFERED, SOLD OR OTHERWISE PLEDGED, TRANSFERRED OR
      HYPOTHECATED IN THE ABSENCE OF SUCH REGISTRATION OR DELIVERY OF AN OPINION
      OF
      COUNSEL IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO THE COMPANY THAT SUCH
      OFFER, SALE OR TRANSFER, PLEDGE OR HYPOTHECATION IS IN COMPLIANCE WITH THE
      ACT
      OR UNLESS SOLD IN FULL COMPLIANCE WITH RULE 144 UNDER THE ACT.

    

    

    VIOQUEST
      PHARMACEUTICALS, INC.

    

    

    Warrant
      for the Purchase of Shares of

    Common
      Stock

     

    
      	Issuance Date:
              [       ], 2007	 	 
	No. 2007-[ ]	 	
              ______ Shares

            

    

     

    FOR
      VALUE
      RECEIVED, VIOQUEST PHARMACEUTICALS, INC., a Delaware corporation (the
      "Company"),
      hereby certifies that [________________], its designee or its permitted assigns
      is entitled to purchase from the Company, at any time or from time to time
      commencing on [ ], 2007 and prior to 5:00 P.M., New York City time, on [ ],
      2012
      (the “Exercise
      Period”),
      [________________] fully paid and non-assessable shares of common stock, $0.001
      par value per share, of the Company for a purchase price per share of
$[
      ].
 Hereinafter,
      (i) said common stock, $0.001 par value per share, of the Company, is referred
      to as the
      "Common
      Stock";
      (ii) the shares of the Common Stock (subject to adjustment as set forth herein)
      purchasable hereunder or under any other Warrant (as hereinafter defined) are
      referred to as the "Warrant
      Shares";
      (iii) the aggregate purchase price payable for the Warrant Shares purchasable
      hereunder is referred to as the "Aggregate
      Warrant Price";
      (iv) the price payable (initially $0.40 per share subject to adjustment as
      set
      forth herein) for each of the Warrant Shares hereunder is referred to as the
      "Per
      Share Warrant Price";
      (v) this Warrant, all similar Warrants issued on the date hereof and all
      warrants hereafter issued in exchange or substitution for this Warrant or such
      similar Warrants are referred to as the "Warrants";
      (vi) the holder of this Warrant is referred to as the "Holder"
      and the holder of this Warrant and all other Warrants and Warrant Shares are
      referred to as the "Holders"
      and Holders of more than fifty percent (50%) of the Warrant Shares then issuable
      upon exercise of then outstanding Warrants are referred to as the "Majority
      of the Holders")
      and (vii) the then Current Market Price per share of the Common Stock (the
      "Current
      Market Price")
      shall be deemed to be the last reported sale price of the Common Stock on the
      Trading Day (as defined below) immediately prior to such date or, in case no
      such reported sales take place on such day, the average of the last reported
      bid
      and asked prices of the Common Stock on such day, in either case on the
      principal national securities exchange on which the Common Stock is admitted
      to
      trading or listed, or if not listed or admitted to trading on any such exchange,
      the representative closing sale price of the Common Stock as reported by the
      Nasdaq Global Market or the Nasdaq Capital Market (collectively,
      “NASDAQ”),
      or other similar organization if NASDAQ is no longer reporting such information,
      or, if the Common Stock is not reported on NASDAQ, the per share sale price
      for
      the Common Stock in the over-the-counter market as reported by the OTC Bulletin
      Board or another over-the-counter market, or if not so available, the fair
      market value of the Common Stock as determined in good faith by the Company’s
      Board of Directors. A "Trading
      Day"
      shall mean any day on which shares of the Company’s Common Stock are sold on the
      respective exchange or over-the-counter market. The Aggregate Warrant Price
      is
      not subject to adjustment.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    This
      Warrant is one in a series of related warrants constituting in the aggregate
      Warrants to purchase [ ] Warrant Shares, which were originally issued pursuant
      to a series of Note and Warrant Purchase Agreements (the “Purchase
      Agreements”)
      between the Company and the investors named therein in connection with a private
      placement by the Company of its securities, as described in the Company’s
      Confidential Private Placement Memorandum dated June 20, 2007. By acceptance
      of
      this Warrant, the Holder agrees to comply with all applicable provisions of
      the
      Purchase Agreement.

    

    1. Exercise
      of Warrant.
      

    

    (a) This
      Warrant may be exercised in whole at any time, or in part from time to time,
      by
      the Holder during the Exercise Period:

    

    (i) by
      the surrender of this Warrant (with the subscription form at the end hereof
      duly
      executed) at the address set forth in subsection 10(a) hereof, together with
      proper payment of the Aggregate Warrant Price, or the proportionate part thereof
      if this Warrant is exercised in part, with payment for the Warrant Shares made
      by certified or official bank check payable to the order of, or wire transfer
      of
      immediately available funds to, the Company; or

    

    (ii) if
      at any time following the first anniversary of the Issuance Date the sale of
      the
      Warrant Shares by the Holder is not then registered under the Act pursuant
      to an
      effective registration statement, by the surrender of this Warrant (with the
      cashless exercise form at the end hereof duly executed) (a “Cashless
      Exercise”)
      at the address set forth in subsection 10(a) hereof. Such presentation and
      surrender shall be deemed a waiver of the Holder's obligation to pay the
      Aggregate Warrant Price, or the proportionate part thereof if this Warrant
      is
      exercised in part. In the event of a Cashless Exercise, the Holder shall
      exchange its Warrant for that number of Warrant Shares subject to such Cashless
      Exercise multiplied by a fraction, the numerator of which shall be the
      difference between the then Current Market Price and the Per Share Warrant
      Price, and the denominator of which shall be the then Current Market Price.
      For
      purposes of any computation under this subsection 1(a), the then Current Market
      Price shall be based on the Trading Day immediately preceding such Cashless
      Exercise.

    

    (b) If
      this Warrant is exercised in part, this Warrant must be exercised for a number
      of whole shares of the Common Stock and the Holder is entitled to receive a
      new
      Warrant covering the Warrant Shares that have not been exercised and setting
      forth the proportionate part of the Aggregate Warrant Price applicable to such
      Warrant Shares. Upon surrender of this Warrant in connection with the exercise
      of this Warrant pursuant to the terms hereof, the Company will (i) as soon
      as
      practicable but no later than three business days after the due exercise of
      this
      Warrant (the “Warrant
      Share Delivery Date”),
      issue a certificate or certificates in the name of the Holder for the largest
      number of whole shares of the Common Stock to which the Holder shall be entitled
      upon such exercise and, if this Warrant is exercised in whole, in lieu of any
      fractional share of the Common Stock to which the Holder shall be entitled,
      pay
      to the Holder cash in an amount equal to the fair value of such fractional
      share
      (determined in such reasonable manner as the Board of Directors of the Company
      shall determine), and (ii) deliver the other securities and properties
      receivable upon the exercise of this Warrant, or the proportionate part thereof,
      if this Warrant is exercised in part, pursuant to the provisions of this
      Warrant.

    

    (c) In
      addition to any other rights available to the Holder, if the Company fails
      to
      cause its transfer agent to transmit to the Holder a certificate or certificates
      representing the Warrant Shares pursuant to an exercise on or before the Warrant
      Share Delivery Date, and if after such date the Holder is required by its broker
      to purchase (in an open market transaction or otherwise) shares of Common Stock
      to deliver in satisfaction of a sale by the Holder of the Warrant Shares which
      the Holder anticipated receiving upon such exercise (a “Buy-In”),
      then
      the Company shall (1) pay in cash to the Holder the amount by which (x) the
      Holder’s total purchase price (including brokerage commissions, if any) for the
      shares of Common Stock so purchased exceeds (y) the amount obtained by
      multiplying (A) the number of Warrant Shares that the Company was required
      to
      deliver to the Holder in connection with the exercise at issue times (B) the
      price at which the sell order giving rise to such purchase obligation was
      executed, and (2) at the option of the Holder, either reinstate the portion
      of
      the Warrant and equivalent number of Warrant Shares for which such exercise
      was
      not honored or deliver to the Holder the number of shares of Common Stock that
      would have been issued had the Company timely complied with its exercise and
      delivery obligations hereunder. For example, if the Holder purchases Common
      Stock having a total purchase price of $11,000 to cover a Buy-In with respect
      to
      an attempted exercise of shares of Common Stock with an aggregate sale price
      giving rise to such purchase obligation of $10,000, under clause (1) of the
      immediately preceding sentence the Company shall be required to pay the Holder
      $1,000. The Holder shall provide the Company written notice indicating the
      amounts payable to the Holder in respect of the Buy-In, together with applicable
      confirmations and other evidence reasonably requested by the Company. Nothing
      herein shall limit a Holder’s right to pursue any other remedies available to it
      hereunder, at law or in equity including, without limitation, a decree of
      specific performance and/or injunctive relief with respect to the Company’s
      failure to timely deliver certificates representing shares of Common Stock
      upon
      exercise of the Warrant as required pursuant to the terms hereof.

     

    
      
         

      

      
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    2. Reservation
      of Warrant Shares; Listing.
      

    

    The
      Company agrees that, prior to the expiration of this Warrant, the Company shall
      at all times (a) have authorized and in reserve, and shall keep available,
      solely for issuance and delivery upon the exercise of this Warrant, the shares
      of the Common Stock and other securities and properties as from time to time
      shall be receivable upon the exercise of this Warrant, free and clear of all
      restrictions on sale or transfer, other than under Federal or state securities
      laws, and free and clear of all preemptive rights and rights of first refusal
      and (b) if the Company hereafter lists its Common Stock on any national
      securities exchange or NASDAQ, use its commercially reasonable efforts to keep
      the Warrant Shares authorized for listing on such exchange upon notice of
      issuance.

    

    3. Certain
      Adjustments.
      

     

    (a) In
      case the Company shall hereafter (i) pay a dividend or make a distribution
      on
      its Common Stock in shares of Common Stock, (ii) subdivide its outstanding
      shares of Common Stock into a greater number of shares, (iii) combine or
      reverse-split its outstanding shares of Common Stock into a smaller number
      of
      shares or (iv) issue by reclassification of its Common Stock any shares of
      capital stock of the Company, then the Per Share Warrant Price and the number
      of
      Warrant Shares shall forthwith be proportionately decreased and increased,
      respectively, in the case of a subdivision, distribution or stock dividend,
      or
      proportionately increased and decreased, respectively, in the case of a
      combination or reverse stock split. The Aggregate Warrant Price payable for
      the
      then total number
      of
      Warrant
      Shares available for exercise under this Warrant shall remain the same.
      Adjustments made pursuant to this subsection 3(a) shall become effective on
      the
      record date in the case of a dividend or distribution, and shall become
      effective immediately after the effective date in the case of a subdivision,
      combination or reclassification. If such dividend, distribution, subdivision
      or
      combination is not consummated in full, the Per Share Warrant Price and Warrant
      Shares shall be readjusted accordingly.

     

    
      
         

      

      
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    (b) In
      case of any capital reorganization or reclassification, or any consolidation
      or
      merger to which the Company is a party other than a merger or consolidation
      in
      which the Company is the continuing corporation, or in case of any sale or
      conveyance to another entity of all or substantially all of the assets of the
      Company, or in the case of any statutory exchange of securities with another
      corporation (including any exchange effected in connection with a merger of
      a
      third corporation into the Company but excluding any exchange of securities
      or
      merger with another corporation in which the Company is a continuing corporation
      and that does not result in any reclassification of or similar change in the
      Common Stock), the Holder of this Warrant shall have the right thereafter to
      receive on the exercise of this Warrant the kind and amount of securities,
      cash
      or other property which the Holder would have owned or have been entitled to
      receive immediately after such reorganization, reclassification, consolidation,
      merger, statutory exchange, sale or conveyance had this Warrant been exercised
      immediately prior to the effective date of such reorganization,
      reclassification, consolidation, merger, statutory exchange, sale or conveyance
      and in any such case, if necessary, appropriate adjustment shall be made in
      the
      application of the provisions set forth in this Section 3 with respect to the
      rights and interests thereafter of the Holder of this Warrant to the end that
      the provisions set forth in this Section 3 shall thereafter correspondingly
      be
      made applicable, as nearly as may reasonably be, in relation to any shares
      of
      stock or other securities or property thereafter deliverable on the exercise
      of
      this Warrant. The above provisions of this subsection 3(b) shall similarly
      apply
      to successive reorganizations, reclassifications, consolidations, mergers,
      statutory exchanges, sales or conveyances. The Company shall require the issuer
      of any shares of stock or other securities or property thereafter deliverable
      on
      the exercise of this Warrant to be responsible for all of the agreements and
      obligations of the Company hereunder. Notice of any such reorganization,
      reclassification, consolidation, merger, statutory exchange, sale or conveyance
      and of said provisions so proposed to be made, shall be mailed to the Holders
      of
      the Warrants not less than twenty (20) days prior to such event. A sale of
      all
      or substantially all of the assets of the Company for a consideration consisting
      primarily of securities shall be deemed a consolidation or merger for the
      foregoing purposes.

    

    (c) No
      adjustment in the Per Share Warrant Price shall be required unless such
      adjustment would require an increase or decrease of at least $0.01 per share
      of
      Common Stock; provided,
      however,
      that any adjustments which by reason of this subsection 3(c) are not required
      to
      be made shall be carried forward and taken into account in any subsequent
      adjustment; provided,
      further,
      however, that adjustments shall be required and made in accordance with the
      provisions of this Section 3 (other than this subsection 3(c)) not later than
      such time as may be required in order to preserve the tax-free nature of a
      distribution, if any, to the Holder of this Warrant or Common Stock issuable
      upon the exercise hereof. All calculations under this Section 3 shall be made
      to
      the nearest cent or to the nearest 1/100th of a share, as the case may be.
      Anything in this Section 3 to the contrary notwithstanding, the Company shall
      be
      entitled to make such reductions in the Per Share Warrant Price, in addition
      to
      those required by this Section 3, as it in its discretion shall deem to be
      advisable in order that any stock dividend, subdivision of shares or
      distribution of rights to purchase stock or securities convertible or
      exchangeable for stock hereafter made by the Company to its stockholders shall
      not be taxable.

    

    (d) Whenever
      the Per Share Warrant Price or the number of Warrant Shares is adjusted as
      provided in this Section 3 and upon any modification of the rights of a Holder
      of Warrants in accordance with this Section 3, the Company shall promptly
      prepare a brief statement of the facts requiring such adjustment or modification
      and the manner of computing the same and cause copies of such certificate to
      be
      mailed to the Holders of the Warrants. The Company may, but shall not be
      obligated to unless requested by a Majority of the Holders, obtain, at its
      expense, a certificate of a firm of independent public accountants of recognized
      standing selected by the Board of Directors (who may be the regular auditors
      of
      the Company) setting forth the Per Share Warrant Price and the number of Warrant
      Shares in effect after such adjustment or the effect of such modification,
      a
      brief statement of the facts requiring such adjustment or modification and
      the
      manner of computing the same and cause copies of such certificate to be mailed
      to the Holders of the Warrants.

     

    
      
         

      

      
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    (e) If
      the Board of Directors of the Company shall declare any dividend or other
      distribution with respect to the Common Stock other than a cash distribution
      out
      of earned surplus, the Company shall mail notice thereof to the Holders of
      the
      Warrants not less than ten (10) days prior to the record date fixed for
      determining stockholders entitled to participate in such dividend or other
      distribution.

    

    (f) If,
      as a result of an adjustment made pursuant to this Section 3, the Holder of
      any
      Warrant thereafter surrendered for exercise shall become entitled to receive
      shares of two or more classes of capital stock or shares of Common Stock and
      other capital stock of the Company, the Board of Directors (whose determination
      shall be conclusive and shall be described in a written notice to the Holder
      of
      any Warrant promptly after such adjustment) shall determine, in good faith,
      the
      allocation of the adjusted Per Share Warrant Price between or among shares
      or
      such classes of capital stock or shares of Common Stock and other capital
      stock.

     

    (g) Upon
      the expiration of any rights, options, warrants or conversion privileges with
      respect to the issuance of which an adjustment to the Per Share Warrant Price
      had been made, if such option, right warrant or conversion shall not have been
      exercised, the number of Warrant Shares purchasable upon exercise of this
      Warrant, to the extent this Warrant has not then been exercised, shall, upon
      such expiration, be readjusted and shall thereafter be such as they would have
      been had they been originally adjusted (or had the original adjustment not
      been
      required, as the case may be) on the basis of (A) the fact that Common Stock,
      if
      any, actually issued or sold upon the exercise of such rights, options, warrants
      or conversion privileges, and (B) the fact that such shares of Common Stock,
      if
      any, were issued or sold for the consideration actually received by the Company
      upon such exercise plus the consideration, if any, actually received by the
      Company for the issuance, sale or grant of all such rights, options, warrants
      or
      conversion privileges whether or not exercised; provided,
      however,
      that no such readjustment shall have the effect of decreasing the number of
      Warrant Shares purchasable upon exercise of this Warrant by an amount in excess
      of the amount of the adjustment initially made in respect of the issuance,
      sale
      or grant of such rights, options, warrants or conversion
      privileges.

    

    (h) In
      case any event shall occur as to which the other provisions of this Section
      3
      are not strictly applicable but as to which the failure to make any adjustment
      would not fairly protect the purchase rights represented by this Warrant in
      accordance with the essential intent and principles of the adjustments set
      forth
      in this Section 3 then, in each such case, the Board of Directors of the Company
      shall in good faith determine the adjustment, if any, on a basis consistent
      with
      the essential intent and principles established herein, necessary to preserve
      the purchase rights represented by the Warrants. Upon such determination, the
      Company will promptly mail a copy thereof to the Holder of this Warrant and
      shall make the adjustments described therein.

    

    4. Fully
      Paid Stock; Taxes.
      The shares of the Common Stock represented by each and every certificate for
      Warrant Shares delivered on the exercise of this Warrant shall, subject to
      compliance by the Holder with the terms hereof, at the time of such delivery,
      be
      duly authorized, validly issued and outstanding, fully paid and nonassessable,
      and not subject to preemptive rights or rights of first refusal imposed by
      any
      agreement to which the Company is a party, and the Company will take all such
      actions as may be necessary to assure that the par value, if any, per share
      of
      the Common Stock is at all times equal to or less than the then Per Share
      Warrant Price. The Company shall pay, when due and payable, any and all Federal
      and state stamp, original issue or similar taxes which may be payable in respect
      of the issue of any Warrant Share or any certificate thereof to the extent
      required because of the issuance by the Company of such security.

     

    
      
         

      

      
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    5. Registration
      Under Act.
      

    

    (a) The
      Holder shall have the right to participate in the registration rights granted
      to
      purchasers of the Securities (as defined in the Purchase Agreement) pursuant
      to
      Article 5 of the Purchase Agreement. By acceptance of this Warrant, the Holder
      agrees to comply with the provisions in Article 5 of the Purchase Agreement
      to
      the same extent as if it were a party thereto.

    

    (b) Until
      all of the Warrant Shares and any shares of Common Stock issuable thereunder
      have been sold under a Registration Statement or pursuant to Rule 144(k), so
      long as the Company’s Common Stock remains registered under the Act, the Company
      shall use its commercially reasonable efforts to file with the Securities and
      Exchange Commission all current reports and the information as may be necessary
      to enable the Holder to effect sales of its shares in reliance upon Rule 144(k)
      promulgated under the Act.

    

    6. Investment
      Intent; Limited Transferability. 

    

    (a) By
      accepting this Warrant, the Holder represents to the Company that it understands
      that this Warrant and any securities obtainable upon exercise of this Warrant
      have not been registered for sale under Federal or state securities laws and
      are
      being offered and sold to the Holder pursuant to one or more exemptions from
      the
      registration requirements of such securities laws. In the absence of an
      effective registration of such securities or an exemption therefrom, any
      certificates for such securities shall bear the legend set forth on the first
      page hereof. The Holder understands that it must bear the economic risk of
      its
      investment in this Warrant and any securities obtainable upon exercise of this
      Warrant for an indefinite period of time, as this Warrant and such securities
      have not been registered under Federal or state securities laws and therefore
      cannot be sold unless subsequently registered under such laws, unless an
      exemption from such registration is available. The Holder further represents
      to
      the Company, by accepting this Warrant, that it has full power and authority
      to
      accept this Warrant and make the representations set forth herein.

    

    (b) The
      Holder, by its acceptance of this Warrant, represents to the Company that it
      is
      acquiring this Warrant and will acquire any securities obtainable upon exercise
      of this Warrant for its own account for investment and not with a view to,
      or
      for sale in connection with, any distribution thereof in violation of the Act.
      The Holder agrees, by acceptance of this Warrant, that this Warrant and any
      such
      securities will not be sold or otherwise transferred unless (i) a registration
      statement with respect to such transfer is effective under the Act and any
      applicable state securities laws or (ii) such sale or transfer is made pursuant
      to one or more exemptions from the Act. 

    

    (c) In
      addition to the limitations set forth in Section 1 and in accordance with the
      legend on the first page hereof, this Warrant may not be sold, transferred,
      assigned or hypothecated by the Holder except in compliance with the provisions
      of the Act and the applicable state securities “blue sky” laws, and is so
      transferable only upon the books of the Company which it shall cause to be
      maintained for such purpose. The Company may treat the registered Holder of
      this
      Warrant as it appears on the Company's books at any time as the Holder for
      all
      purposes. The Company shall permit any Holder of a Warrant or its duly
      authorized attorney, upon written request during ordinary business hours, to
      inspect and copy or make extracts from its books showing the registered Holders
      of Warrant. All Warrants issued upon the transfer or assignment of this Warrant
      will be dated the same date as this Warrant, and all rights of the holder
      thereof shall be identical to those of the Holder unless, in each case,
      otherwise prohibited by applicable law.

     

    
      
         

      

      
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    (d) The
      Holder has been afforded (i) the opportunity to ask such questions as it has
      deemed necessary of, and to receive answers from, representatives of the Company
      concerning the terms and conditions of the Warrants or the exercise of the
      Warrants; and (ii) the opportunity to request such additional information which
      the Company possesses or can acquire without unreasonable effort or
      expense.

    

    (e) The
      Holder did not (i) receive or review any advertisement, article, notice or
      other
      communication published in a newspaper or magazine or similar media or broadcast
      over television or radio, whether closed circuit, or generally available; or
      (ii) attend any seminar, meeting or investor or other conference whose attendees
      were, to such Holder’s knowledge, invited by any general solicitation or general
      advertising.

    

    (f) The
      Holder is an “accredited investor” within the meaning of Regulation D under the
      Act. Such Holder is acquiring the Warrants for its own account and not with
      a
      present view to, or for sale in connection with, any distribution thereof in
      violation of the registration requirements of the Act, without prejudice,
      however, to such Holder’s right, subject to the provisions of the Purchase
      Agreement and this Warrant, at all times to sell or otherwise dispose of all
      or
      any part of such Warrants and Warrant Shares.

    

    (g) Either
      by reason of such Holder’s business or financial experience or the business or
      financial experience of its professional advisors (who are unaffiliated with
      and
      who are not compensated by the Company or any affiliate, finder or selling
      agent
      of the Company, directly or indirectly), such Holder has the capacity to protect
      such Holder’s interests in connection with the transactions contemplated by this
      Warrant and the Purchase Agreement. The Holder, by its acceptance of this
      Warrant, represents to the Company that it is able to fend for itself, can
      bear
      the economic risk of its investment and has such knowledge and experience in
      financial or business matters that it is capable of evaluating the merits and
      risks of the investment in this Warrant. Holder also represents it has not
      been
      organized for the purpose of acquiring this Warrant.

     

    7.
      Optional Redemption. 

    

    (a) In
      the event that the closing price of the Common Stock for any twenty (20)
      consecutive trading days on the OTC Bulletin Board (or upon a national
      securities exchange or the NASDAQ, if then applicable) is at least $1.50
      (subject to adjustment for any stock splits, combinations, or similar events
      with respect to the Common Stock after the original issuance date of this
      Warrant, as described in Section 3 hereof) (the “Redemption
      Price”),
      the Company shall be entitled to redeem all, but not less than all, of the
      Warrants at a per Warrant redemption price of $0.001, at any time after the
      completion of such twenty (20) consecutive trading day period by providing
      thirty (30) business days’ written notice to the Holders. The Holder agrees to
      return the certificate representing the redeemed Warrants to the Company upon
      their redemption (or evidence reasonably satisfactory to the Company of the
      loss, theft, destruction or mutilation of this Warrant in accordance with
      Section 8 hereof). 

    

    (b) Notwithstanding
      Section 7(a) hereof, for so long as any Warrant Shares are not subject to a
      registration statement providing for the resale thereof under the Securities
      Act
      declared effective by the SEC or are not otherwise permitted to be immediately
      sold, in whole, pursuant to an exemption to registration for such resale
      pursuant to Rule 144(k) of the Act, the Company shall not be entitled to
      exercise its redemption rights pursuant to Section 7(a) above.

    

    8. Loss,
      etc., of Warrant.
      Upon receipt of evidence reasonably satisfactory to the Company of the loss,
      theft, destruction or mutilation of this Warrant, and of indemnity reasonably
      satisfactory to the Company, if lost, stolen or destroyed, and upon surrender
      and cancellation of this Warrant, if mutilated, the Company shall execute and
      deliver to the Holder a new Warrant of like date, tenor and
      denomination.

     

    
      
         

      

      
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    9. Warrant
      Holder Not Stockholder.
      This Warrant does not confer upon the Holder any right to vote on or consent
      to
      or receive notice as a stockholder of the Company, as such, in respect of any
      matters whatsoever, nor any other rights or liabilities as a stockholder, prior
      to the exercise hereof; this Warrant does, however, require certain notices
      to
      Holders as set forth herein.

    

    10. Communication.
      No notice or other communication under this Warrant shall be effective or deemed
      to have been given unless, the same is in writing and is mailed by first-class
      mail, postage prepaid, or via recognized overnight courier with confirmed
      receipt, addressed to:

    

    (a) the
      Company at VioQuest Pharmaceuticals, Inc., 180 Mount Airy Road, Suite 102,
      Basking Ridge, New Jersey 07920, Attn: President, or other such address as
      the
      Company has designated in writing to the Holder;
      or

    

    (b) the
      Holder at the address last
      furnished to the Company in writing by the Holder.

    

    11. Headings.
      The headings of this Warrant have been inserted as a matter of convenience
      and
      shall not affect the construction hereof.

    

    12. Applicable
      Law.
      This Warrant shall be governed by and construed in accordance with the law
      of
      the State of New York without giving effect to the principles of conflicts
      of
      law thereof.

    

    13. Amendment,
      Waiver, etc.
      Except as expressly provided herein, neither this Warrant nor any term hereof
      may be amended, waived, discharged or terminated other than by a written
      instrument signed by the party against whom enforcement of any such amendment,
      waiver, discharge or termination is sought; provided, however, that any
      provision hereof may be amended, waived, discharged or terminated upon the
      written consent of the Company and the Majority of the Holders and such
      amendment, waiver, discharge or termination shall be effective with respect
      to
      the Company and all Holders.

    

    IN
      WITNESS WHEREOF,
      the Company has caused this Warrant to be signed by the undersigned duly
      authorized officer, this ___ day of _________, 2007.

    

    

    VIOQUEST
      PHARMACEUTICALS, INC.

     

    

    By:
      _________________________________    

    Its:

    

    
      
         

      

      
        8EXHIBIT
      10.1

    

    NOTE
      AND WARRANT PURCHASE
      AGREEMENT

    

    This
      NOTE
      AND WARRANT PURCHASE AGREEMENT (this “Agreement”)
      made
      as of the date set forth on the signature page hereof between VioQuest
      Pharmaceuticals, Inc., a Delaware corporation having a place of business at
      180
      Mount Airy Road, Suite 102, Basking Ridge, New Jersey 07920 (the “Company”),
      and
      the undersigned (the “Subscriber”).

    

    WITNESSETH:

    

    WHEREAS,
      the
      Company has retained GunnAllen Financial, Inc. (“GunnAllen”)
      and
      Paramount BioCapital, Inc. (“Paramount,”
and
      together with GunnAllen, the “Placement
      Agents”)
      to act
      as its co-placement agents, on a “best efforts” basis, in a private offering
      (the “Offering”)
      of
      senior convertible promissory notes in substantially the form attached to the
      Memorandum (as defined below) as Exhibit 3 (each a “Note”
and,
      together, the “Notes”),
      and
      in connection therewith has authorized the Placement Agents to engage one or
      more other firms to assist in finding qualified subscribers for the
      Notes;

    

    WHEREAS,
      the
      Company desires to offer and sell a minimum of $1,000,000 aggregate principal
      amount of Notes (the “Minimum
      Offering”)
      and a
      maximum of $4,000,000 aggregate principal amount of Notes (the “Maximum
      Offering”);
      

    

    WHEREAS,
      the
      Notes will automatically convert into securities of the Company issued in a
      “Qualified Financing” (as such term is defined in the Notes);

    

    WHEREAS,
      prior
      to automatic conversion or repayment by the Company, each Note is convertible
      by
      the holder thereof into shares (the “Note
      Shares”)
      of the
      Company’s common stock, par value $0.001 per share (the “Common
      Stock”);

    

    WHEREAS,
      in
      addition to a Note, each Subscriber will receive a five-year warrant, in
      substantially the form attached to the Memorandum as Exhibit 4 (the
“Warrant,”
and
      together with the Note, the “Securities”),
      to
      purchase a number of shares of Common Stock equal to quotient resulting from
      dividing (i) 25% of the principal amount of the Notes purchased by such
      Subscriber, by (ii) the closing sale price of the Common Stock on the Initial
      Closing Date (as defined herein);

    

    WHEREAS,
      the
      Company desires to enter into this Agreement to issue and sell the Notes and
      the
      Subscriber desires to purchase the principal amount of Notes set forth on the
      signature page hereto on the terms and conditions set forth herein;
      and

     

    WHEREAS,
      the
      terms of the Offering are summarized in that certain Confidential Private
      Placement Memorandum dated June 20, 2007 (together with all amendments,
      supplements, exhibits and appendices thereto, the “Memorandum”).

    

    NOW,
      THEREFORE,
      in
      consideration of the promises and the mutual representations and covenants
      hereinafter set forth, the parties hereto do hereby agree as
      follows:

     

    
      
        
        

      

      
        A-1

        
          

        

      

      
        
        

      

    

     

    1.
      PURCHASE
      AND SALE OF SECURITIES.

    

    1.1  Offering.
      The
      Company is offering to a limited number of “accredited investors,” as that term
      is defined by Rule 501(a) of Regulation D of the Securities Act, the Securities
      on terms and conditions described in this Agreement. The Minimum Offering Amount
      will be offered on a “all or none, best efforts" basis. The Maximum Offering
      Amount will be offered on a “best efforts” basis. The Subscriber understands,
      however, that the Subscriber’s subscription for the purchase of the Securities
      is contingent upon the Company receiving aggregate subscriptions for Securities
      in an amount at least equal to the Minimum Offering. The minimum amount of
      any
      Note purchasable by any single investor shall be equal to $25,000, subject
      to
      the discretion of the Company and the Placement Agents to accept subscriptions
      for lesser amounts. 

     

    1.2  Closing.
      At each
      closing (each a “Closing,”
and
      the date thereof, the “Closing
      Date”
and
      the
      first Closing Date, the “Initial
      Closing Date”),
      provided the Company has received the Minimum Offering Amount, the Company
      shall
      issue and sell to the Subscriber and the Subscriber shall purchase from the
      Company, a Note in the amount of the Subscriber’s subscription as set forth on
      the signature page hereof that is accepted by the Company (the “Aggregate
      Purchase Price”
as
      further defined below). In addition to the Note, each Subscriber shall receive
      a
      Warrant to purchase a number of shares of Common Stock (the “Warrant
      Shares”)
      determined by dividing (i) 25% of the principal amount of the Notes purchased
      by
      such investor, by (ii) the closing sale price of the Common Stock on the Initial
      Closing Date. The Warrants shall be exercisable at any time prior to the fifth
      anniversary of the date of issuance and shall have an exercise price per share
      equal to the lesser of (A) 105% of the closing sale price of the Common Stock
      on
      the Closing Date and (B) $0.60, in each case subject to appropriate adjustment
      for stock splits, combinations and similar recapitalization events (the
“Warrant
      Exercise Price”).

     

    1.3  Closing
      Mechanics.
      The
      Closing shall be held at a date or dates and time designated by the Company
      and
      the Placement Agents prior to 11:59 p.m. Eastern Standard Time on June 29,
      2007
      (subject to extension at the discretion of the Company and the Placement Agents
      without notice to the Subscriber of up to 60 days), which date shall be no
      later
      than five (5) Business Days (as defined in Article 5) after satisfaction or
      waiver of the closing conditions set forth in Article 4 hereof. The Closing
      shall occur at the offices of Paramount, located at 787 Seventh Avenue, 48th
      Floor, New York, New York 10019. Upon
      satisfaction or waiver of all conditions to the Closing, the Placement Agents
      and the Company shall instruct U.S. Bank Trust, N.A., as escrow agent (the
      “Escrow
      Agent”),
      to
      release the proceeds of the Offering to the Company, less fees and expenses
      due
      to the Placement Agents. Interest, if any, that has accrued with respect to
      the
      Aggregate Purchase Price while in escrow shall also be distributed to the
      Company at the Closing and the Subscriber will have no right to such interest,
      even if there is no Closing.

     

    1.4  Payment
      of Aggregate Purchase Price.
      Upon,
      or prior to, the execution of this Agreement by the Subscriber, the Subscriber
      shall deposit the amount of readily available funds equal to the Aggregate
      Purchase Price in a segregated escrow account with the Escrow Agent by check
      or
      wire transfer of immediately available funds pursuant to the instructions
      provided below. Subject to the terms and conditions of this Agreement
      (including, without limitation, the Company’s and the Placement Agents’ option,
      each at its sole discretion, to refuse to accept subscriptions, in whole or
      in
      part, from any Subscriber), the Subscriber hereby subscribes for and agrees
      to
      purchase from the Company such number of Securities and the Company agrees
      to
      sell such number of Securities to the Subscriber as is set forth upon the
      signature page hereof at the Aggregate Purchase Price as accepted by the Company
      and the Placement Agents.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    US
      Bank Trust National Association

    ABA
      Routing Number: 091000022

    US
      Bank and Trust Corp. Account Number: [ ]

    For:
      VioQuest/Paramount BioCapital

    SEI
      Number: 100447000

    Reference:
      [Investor Name]

    

    

    The
      Subscriber must complete and return a duly executed, unaltered copy of this
      Agreement (including the completed Confidential Investor Questionnaire included
      in Article 7 hereof (the “Confidential
      Investor Questionnaire”))
      to a
      Placement Agent at such Placement Agent’s address indicated in the Memorandum
      (as defined below) on or before the date indicated to the Subscriber by such
      Placement Agent to be eligible to participate in the Offering. The Company
      and
      the Placement Agents retain complete discretion to accept or reject any
      subscription unless and until the Company executes a counterpart to this
      Agreement that includes such Subscriber’s signature.

    

    1.5  Delivery
      of Certificates.
      The
      Company shall deliver, or cause to be delivered, the certificates representing
      the Securities purchased by the Subscriber hereunder as soon as practical after
      the Closing to the Subscriber’s residential or business address indicated on the
      signature page hereto.

     

    2.
      REPRESENTATIONS
      AND WARRANTIES OF SUBSCRIBER.

    

    The
      Subscriber hereby represents and warrants to the Company as of the date hereof
      and the Closing Date as follows:

    

    2.1 The
      Subscriber understands, acknowledges and agrees that the purchase of the
      Securities involves a high degree of risk including, but not limited to, the
      following: (i) an investment in the Company is highly speculative, and only
      investors who can afford the loss of their entire investment should consider
      investing in the Company and the Securities; (ii) the Subscriber may not be
      able
      to liquidate its investment; (iii) transferability of the Securities is
      extremely limited; (iv) in the event of a disposition of the Securities, the
      Subscriber could sustain the loss of its entire investment; and (v) since the
      Company has been a publicly-traded company, the Company has not paid any
      dividends on its Common Stock and does not anticipate the payment of dividends
      in the foreseeable future.

    

    2.2 The
      Subscriber is an “accredited investor” as such term is defined in Rule 501 of
      Regulation D promulgated under the Securities Act, as indicated by the
      Subscriber’s responses to the questions contained in the Confidential Investor
      Questionnaire, which are true and correct as of the date hereof and shall be
      true and correct as of the Closing Date, and that the Subscriber is able to
      bear
      the economic risk of an investment in the Company. If the Subscriber is a
      natural person, the Subscriber has reached the age of majority in the state
      or
      other jurisdiction in which the Subscriber resides, has adequate means of
      providing for the Subscriber’s current financial needs and contingencies, is
      able to bear the substantial economic risks of an investment in the Securities
      for an indefinite period of time, has no need for liquidity in such investment
      and, at the present time, could afford a complete loss of such
      investment.

     

    2.3  The
      Subscriber understands, acknowledges and agrees that: (i) the Subscriber is
      knowledgeable, sophisticated and has experience in making, and is qualified
      to
      make, decisions with respect to investments representing an investment decision
      like that involved in the purchase of the Securities and has prior investment
      experience, including investment in securities which are non-listed,
      unregistered and/or not traded on the New York Stock Exchange, AMEX, the
      National Market or SmallCap Market of the National Association of Securities
      Dealers, Inc. (“NASD”)
      Automated Quotation System or any other national stock exchange; (ii) the
      investment in the Securities is of a highly speculative nature and involves
      a
      significant degree of risk, that the market price of the Common Stock has been
      and continues to be volatile and that Subscriber has carefully evaluated the
      risks of an investment in the Securities; and (iii) the Subscriber is able
      to
      bear the economic risk of an investment in the Securities and the potential
      loss
      of such investment, which risk the Subscriber hereby assumes.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    2.4  The
      Subscriber has received and carefully reviewed this Agreement, the Memorandum,
      including the following documents filed by the Company with the Securities
      and
      Exchange Commission (the “SEC”,
      and
      such documents, the “SEC
      Filings”)
      and
      included as exhibits to the Memorandum: Annual Report on Form 10-KSB for the
      year ended December 31, 2006; Quarterly Report on Form 10-QSB for the quarter
      ended March 31, 2007; Current Reports on Form 8-K filed April 4, 2007, April
      16,
      2007, and June 12, 2007, respectively; and Definitive Proxy Statement on
      Schedule 14A filed April 25, 2007. The Subscriber further represents that the
      Subscriber has been furnished by the Company during the course of this
      transaction with all information regarding the Company which the Subscriber,
      its
      investment advisor, attorney and/or accountant has requested or desired to
      know
      or which is otherwise relevant to an investment decision, has been afforded
      the
      opportunity to ask questions of and receive answers from duly authorized
      officers or other representatives of the Company concerning the terms and
      conditions of the Offering, and has received any additional information which
      the Subscriber or its advisors or agents has requested.

    

    2.5 (a) The
      Subscriber has relied solely upon the information provided by the Company in
      making the decision to invest in the Securities. The Subscriber is familiar
      with
      and understands the terms of the Offering, including the rights to which the
      Subscriber is entitled under this Agreement. In evaluating the suitability
      of an
      investment in the Company, the Subscriber has not relied upon any representation
      or other information (whether oral or written) from the Company, or any agent,
      employee or Affiliate of the Company other than as set forth in the Memorandum,
      in this Agreement or resulting from the results of the Subscriber’s own
      independent investigation. The Subscriber understands and acknowledges that
      nothing in this Agreement, the Memorandum or any other materials provided to
      the
      Subscriber in connection with the subscription for the Securities or sale of
      the
      Securities constitutes investment, tax or legal advice. To the extent deemed
      necessary or advisable by the Subscriber in its sole discretion, the Subscriber
      has retained, at its sole expense, and relied upon appropriate professional
      advice regarding the investment, tax and legal merits and consequences of this
      Agreement and its purchase of the Securities hereunder. 

    

    (b) No
      Securities were offered or sold to the Subscriber by means of any form of
      general solicitation or general advertising, and in connection therewith the
      Subscriber did not: (A) receive or review any advertisement, article, notice
      or
      other communication published in a newspaper or magazine or similar media or
      broadcast over television or radio whether closed circuit, or generally
      available; or (B) attend any seminar meeting or industry investor conference
      whose attendees were invited by any general solicitation or general
      advertising.

    

    2.6 The
      Subscriber, either by reason of the Subscriber’s business or financial
      experience or the business or financial experience of the Subscriber’s
      professional advisors, has the capacity to protect the Subscriber’s own
      interests in connection with the transaction contemplated hereby. 

    

    2.7 The
      Subscriber understands, acknowledges and agrees that the Offering has not been
      reviewed, recommended or endorsed by the SEC or any state securities regulatory
      authority or other governmental body or agency, since the Offering is intended
      to be exempt from the registration requirements of Section 5 of the Securities
      Act pursuant to Regulation D promulgated under the Securities Act. The
      Subscriber shall not sell or otherwise transfer the Securities unless such
      transfer is registered under the Securities Act or unless an exemption from
      such
      registration is available. The Subscriber understands that if required by the
      laws or regulations or any applicable jurisdictions, the Offering contemplated
      hereby will be submitted to the appropriate authorities of such state(s) for
      registration of exemption therefrom. 

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    2.8 The
      Subscriber understands, acknowledges and agrees that the Securities have not
      been registered under the Securities Act in reliance upon a claimed exemption
      under the provisions of the Securities Act which depends, in part, upon the
      Subscriber’s investment intention and the truth and accuracy of, and
      Subscriber’s compliance with, the representations, warranties, acknowledgments
      and covenants of Subscriber set forth herein. In this connection, the Subscriber
      hereby represents that the representations, warranties, acknowledgments and
      covenants of Subscriber set forth herein are true and correct, Subscriber will
      comply with the covenants set forth herein, and the Subscriber is purchasing
      the
      Securities for the Subscriber’s own account for investment purposes only and not
      with a view toward the resale or distribution to others and has no contract,
      undertaking, agreement or other arrangement, in existence or contemplated,
      to
      sell, pledge, assign or otherwise transfer the Securities to any other Person
      (as defined in Article 5). The Subscriber, if an entity, also represents that
      it
      was not formed for the purpose of purchasing the Securities. The Subscriber
      has
      no current plans to effect a “change of control” of the Company, as such term is
      understood in Rule 13d of the Securities Exchange Act of 1934, as amended (the
      “Exchange
      Act”).

    

    2.9 The
      Subscriber understands that the Securities will not be registered or available
      for sale in the public markets except as specifically provided herein, and
      Rule
      144 promul-gated under the Securities Act (“Rule
      144”)
      requires, among other conditions, a one-year holding period prior to the resale
      (in limited amounts) of securities acquired in a non-public offering (and a
      two-year holding period for unlimited sales by non-Affiliates of the Company)
      without having to satisfy the registration requirements under the Securities
      Act. The Subscriber understands and hereby acknowledges that the Company is
      under no obligation to register any of the Securities under the Securities
      Act
      or any state securities or “blue sky” laws or assist the Subscriber in obtaining
      an exemption from various registration requirements, other than as set forth
      in
      Article 5 herein. 

    

    2.10 The
      Subscriber consents to the placement of a legend on any certificate or other
      document evidencing the Securities substantially as set forth below, that such
      Securities have not been registered under the Securities Act or any state
      securities or “blue sky” laws and setting forth or referring to the restrictions
      on transferability and sale thereof contained in this Agreement. The Subscriber
      is aware that the Company will make a notation in its appropriate records with
      respect to the restrictions on the transferability of the Securities.

    

    THE
      SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
      ACT
      OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR UNDER THE SECURITIES LAWS OF ANY
      STATE. THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND
      RESALE AND MAY NOT BE SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN
      EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT
      AND
      APPLICABLE STATE SECURITIES LAWS, OR AN OPINION OF COUNSEL IN FORM, SUBSTANCE
      AND SCOPE REASONABLY SATISFACTORY TO THE COMPANY, TO THE EFFECT THAT
      REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT AND APPLICABLE STATE
      SECURITIES LAWS.

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    2.11 The
      Subscriber agrees to supply
      the Company, within five (5) days after the Subscriber receives the request
      therefor from the Company, with such additional information concerning the
      Subscriber as the Company deems necessary or advisable in order to establish
      or
      verify the Subscriber’s representations contained herein.

    

    2.12 The
      address of the Subscriber furnished by Subscriber on the signature page hereof
      is the Subscriber’s principal residence if Subscriber is an individual or its
      principal business address if it is a corporation or other entity.

    

    2.13 The
      Subscriber has full power and authority (corporate or otherwise) to execute,
      deliver, and perform this Agreement and to purchase the Securities and has
      taken
      all action necessary to authorize the execution, delivery and performance of
      this Agreement. This Agreement constitutes the legal, valid and binding
      obligation of the Subscriber, enforceable against the Subscriber in accordance
      with its terms, subject to laws of general application relating to bankruptcy,
      insolvency and the relief of debtors and rules of law governing specific
      performance, injunctive relief or other equitable remedies, and to limitations
      of public policy.

    

    2.14 If
      the
      Subscriber is a corporation, partnership, limited liability company, trust,
      employee benefit plan, individual retirement account, Keogh Plan, or other
      entity (a) it is authorized and qualified to become an investor in the Company
      and the Person signing this Agreement on behalf of such entity has been duly
      authorized by such entity to do so and (b) it is duly organized, validly
      existing and in good standing under the laws of the jurisdiction of its
      organization.

    

    2.15 The
      Subscriber acknowledges that if he or she is a Registered Representative of
      an
      NASD member firm, he or she must give such firm the notice required by NASD
      Rule
      3050, receipt of which must be acknowledged by such firm in Section 7.4 below
      in
      accordance with such rules.

    

    2.16 The
      Subscriber understands, acknowledges and agrees that this subscription may
      be
      rejected, in whole or in part, by the Company or the Placement Agents, in each
      of their sole and absolute discretion, at any time before any Closing Date
      notwithstanding prior receipt by the Subscriber of notice of acceptance of
      the
      Subscriber’s subscription. The Subscriber hereby authorizes and directs the
      Company to return, without interest, any funds for unaccepted subscriptions
      to
      the same account from which the funds were drawn, including any customer account
      maintained by the Subscriber with a Placement Agent.

     

    2.17 The
      Subscriber understands, acknowledges and agrees with the Company that except
      as
      otherwise set forth herein, the subscription hereunder is irrevocable by the
      Subscriber, that, except as required by law, the Subscriber is not entitled
      to
      cancel, terminate or revoke this Agreement or any agreements of the Subscriber
      hereunder and that this Agreement and such other agreements shall survive the
      death or disability of the Subscriber and shall be binding upon and inure to
      the
      benefit of the parties and their heirs, executors, administrators, successors,
      legal representatives and permitted assigns. If the Subscriber is more than
      one
      Person, the obligations of the Subscriber hereunder shall be joint and several
      and the agreements, representations, warranties and acknowledgments herein
      contained shall be deemed to be made by and be binding upon each such Person
      and
      its heirs, executors, administrators, successors, legal representatives and
      permitted assigns.

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    2.18  The
      Subscriber understands, acknowledges and agrees with the Company that, the
      Offering is intended to be exempt from registration under the Securities Act
      by
      virtue of Section 4(2) of the Securities Act and the provisions of Regulation
      D,
      and/or the provisions of Regulation S which is in part dependent upon the truth,
      completeness and accuracy of the statements made by the Subscriber.

    

    2.19  The
      Subscriber understands, acknowledges and agrees that there can be no assurance
      that the Subscriber will be able to sell or dispose of the Securities. It is
      understood than in order not to jeopardize the Offering’s exempt status under
      Section 4(2) of the Securities Act and Regulation D, in addition to any other
      restrictions on transfer set forth herein or in the Warrants, the Company may,
      at a minimum, require any transferee to fulfill the Subscriber suitability
      requirements thereunder and make the representations, warranties and covenants
      of Subscriber hereunder.

    

    2.20  The
      Subscriber represents and warrants that during the period commencing upon the
      date that the Subscriber was first contacted with respect to the Offering (the
      “First
      Date”)
      the
      Subscriber has not, directly or indirectly, through related parties, Affiliates
      or otherwise, sold “short” or “short against the box” (as such terms are
      generally understood) and until the Registration Statement (as defined in
      Article 6) is declared effective, will not sell "short" or "short against the
      box" any equity security of the Company or take any action with respect to
      any
      equity security of the Company which would violate the Securities Act or the
      rules and regulations promulgated thereunder and from the First Date through
      the
      Closing Date or termination of this Agreement has not and will not take any
      action the intent or reasonably foreseeable effect of which is to reduce the
      trading price of the Common Stock.

    

    2.21 The
      Subscriber understands, acknowledges and agrees that the existence of and
      information contained in this Agreement, the Memorandum or otherwise made
      available to the Subscriber by the Company (collectively, the “Confidential
      Information”)
      is to
      be used solely for the purpose of evaluating a possible investment in the
      Securities and is confidential and non-public and agrees that all such
      Confidential Information shall be kept in confidence by the Subscriber and
      neither used by the Subscriber for the Subscriber’s personal benefit (other than
      in connection with evaluating a possible investment in the Securities) nor
      disclosed to any third party for any reason and in any manner, notwithstanding
      that a Subscriber’s subscription may not be accepted by the Company;
provided,
      however,
      that
      this obligation shall not apply to any such Confidential Information that (i)
      is
      part of the public knowledge or literature and readily accessible at the date
      hereof (except as a result of a breach of this provision by any party) or (ii)
      becomes part of the public knowledge or literature and readily accessible by
      publication (except as a result of a breach of this provision by any
      party).

    

    2.22 Subscriber
      represents and warrants that he/she/it has complied with all applicable
      provisions of the Exchange Act, the rules and regulations promulgated by the
      SEC
      thereunder and will comply at the time of sale pursuant to the Registration
      Statement. Additionally, Subscriber understands that the rules and regulations
      of the SEC prohibit Subscriber from using any Note Shares or Warrant Shares
      to
      cover short sales of Common Stock “against the box” which were made prior to the
      effectiveness of the Registration Statement covering the resale of the Note
      Shares and Warrant Shares. Subscriber (either directly or indirectly) shall
      not
      use the information about the Company (including the terms of the Offering
      and
      the Securities) for any other purpose, including trading of the Company’s
      securities (including any short selling or other hedging transactions), until
      the terms of the Offering have been publicly disclosed.

    

    2.23 If
      the
      Subscriber is purchasing the Securities in a fiduciary capacity for another
      Person, including without limitation a corporation, partnership, trust or any
      other entity, the Subscriber has been duly authorized and empowered to execute
      this Agreement and all other subscription documents, and such other Person
      fulfills all the requirements for purchase of the Securities as such
      requirements are set forth herein, concurs in the purchase of the Securities
      and
      agrees to be bound by the obligations, representations, warranties and covenants
      contained herein. Upon request of the Company, the Subscriber will provide
      true,
      complete and correct copies of all relevant documents creating the Subscriber,
      authorizing its investment in the Company and/or evidencing the satisfaction
      of
      the foregoing.

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    2.24 No
      authorization, approval, consent or license of any Person is required to be
      obtained for the purchase of the Securities
      by the
      Subscriber, other than as have been obtained and are in full force and effect.
      The execution and delivery of this Agreement does not, and the consummation
      of
      the transactions contemplated hereby will not, result in any violation of or
      constitute a default under any material agreement or other instrument to which
      the Subscriber is a party or by which the Subscriber or any of its properties
      are bound, or to the best of the Subscriber’s knowledge, any permit, franchise,
      judgment, order, decree, statute, rule or regulation to which the Subscriber
      or
      any of its businesses or properties is subject.

    

    2.25 The
      Subscriber understands, acknowledges and agrees that the representations,
      warranties and agreements of the Subscriber contained herein (including the
      Confidential Investor Questionnaire) and in any other writing delivered in
      connection with the transactions contemplated hereby shall be true and correct
      on the date hereof and as of the Closing Date as if made on and as of such
      date
      (except for representations, warranties and agreements as of a specific date,
      which shall be true and correct as of such date) and shall survive the execution
      and delivery of this Agreement and the purchase of the Securities. The
      Subscriber agrees that the Placement Agents shall be entitled to rely on the
      representations, warranties and agreements of the Subscriber contained herein
      as
      if such representations, warranties and agreements were made or provided
      directly to the Placement Agents.

    

    2.26 The
      Subscriber hereby covenants with the Company not to make any sale of the
      Securities under the Registration Statement without effectively causing the
      prospectus delivery requirements under the Securities Act to be satisfied,
      and
      further agrees to comply with reasonable requests of the Company or its transfer
      agent to provide additional information and representations concerning such
      sale.

    

    2.27 (a) The
      Subscriber agrees, acknowledges and understands that each Placement Agent is
      acting as placement agent for the Securities being offered hereby and will
      be
      compensated by the Company for acting in such capacity, including, but not
      limited to, by: (i) placement fees in cash equal to up to 7% of the proceeds
      received by the Company at the Closing; and (ii) warrants (the “Placement
      Warrants”)
      to
      purchase a number of shares of Common Stock (the “Placement
      Warrant Shares”)
      equal
      to 10% of the gross cash proceeds from the Offering divided by the closing
      value
      of the Common Stock on the Closing Date; provided, however, that GunnAllen
      will
      also receive an additional Placement Warrant to purchase 240,000 Placement
      Warrant Shares; and (iii) reimbursement of its reasonable, documented expenses
      (including reasonable legal fees) incurred in connection with the Offering
      (which reimbursement shall not exceed $35,000). The Placement Warrants shall
      have an exercise price per share equal to 110% of the conversion price
      applicable to a voluntary conversion of the Notes. Except as otherwise provided
      herein, the Subscriber shall not be entitled to reimbursement of any expenses
      incurred by the Subscriber in connection with the Offering.

    

    (b) The
      Subscriber agrees, acknowledges and understands that each Placement Agent may
      engage other Persons, selected by it in its discretion, who are members of
      the
      NASD or who are located outside the United States, to assist such Placement
      Agent in connection with this Offering. 

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    3. REPRESENTATIONS
      BY AND COVENANTS OF THE COMPANY.

    

    The
      Company hereby represents and warrants to the Subscriber and agrees as of the
      date hereof and the Closing Date that:

    

    3.1 Organization,
      Good Standing and Qualification.
      The
      Company is a corporation duly organized, validly existing and in good standing
      under the laws of the State of Delaware and has full corporate power and
      authority to conduct its business as currently conducted. The Company is duly
      qualified as a foreign corporation to do business and is in good standing in
      every jurisdiction in which the property owned or leased by it or the nature
      of
      the business conducted by it makes such qualification necessary, except to
      the
      extent that the failure to be so qualified or in good standing would not
      reasonably be expected to have, individually or in the aggregate, a material
      adverse effect on the business, operations, conditions (financial or otherwise),
      properties, assets, liabilities, or results of operations of that entity
      individually or of the Company and its Subsidiaries (as defined below) as a
      whole (a “Material
      Adverse Effect”).
      For
      purposes of this Section, “Subsidiary”
      means
      any corporation, partnership, limited liability company, association, or other
      business entity in which the Company owns or controls, directly or indirectly,
      any interest, including, without limitation, any joint venture, partnership,
      or
      similar arrangement.

    

    3.2 Capitalization.

    

    (a) The
      authorized capital stock of the Company consists of 100,000,000 shares of Common
      Stock and 10,000,000 shares of preferred stock. As of the date of the
      Memorandum, there were 54,621,119 shares of Common Stock issued and outstanding,
      all of which are duly authorized, validly issued, fully paid and non-assessable,
      and no shares of preferred stock outstanding. In addition, there are 22,976,191
      shares of Common Stock reserved for issuance pursuant to outstanding options
      and
      warrants. All of the securities issued by the Company have been issued in
      accordance with all applicable federal and state securities laws. Other than
      as
      set forth above, there are no other options, warrants, calls, rights,
      commitments or agreements of any character to which the Company is a party
      or by
      which the Company is bound or obligating the Company to issue, deliver, sell,
      repurchase or redeem, or cause to be issued, delivered, sold, repurchased or
      redeemed, any shares of the capital stock of the Company or obligating the
      Company to grant, extend or enter into any such option, warrant, call, right,
      commitment or agreement. Except as set forth in the Memorandum, there are no
      preemptive rights or rights of first refusal or similar rights which are binding
      on the Company permitting any Person to subscribe for or purchase from the
      Company shares of its capital stock pursuant to any provision of law, the
      Company’s Certificate of Incorporation as in effect on the date hereof (the
“Certificate
      of Incorporation”)
      or the
      Company’s Bylaws, as in effect on the date hereof (the “Bylaws”)
      or by
      agreement or otherwise. Except as set forth in the Memorandum, there are no
      securities or instruments containing anti-dilution or similar provisions that
      will be triggered by the issuance of the Securities as described in this
      Agreement. The Company has made available to the Placement Agents true, correct
      and complete copies of the Company’s Certificate of Incorporation and
      Bylaws.

    

    (b) The
      Company owns all of the issued and outstanding shares of capital stock of all
      of
      its Subsidiaries, except as described in the SEC Filings. There are no
      outstanding securities, options, warrants, rights or agreements or other
      commitments pursuant to which any such subsidiary is or may become obligated
      to
      issue any shares of its capital stock, or any securities convertible into or
      exercisable or exchangeable for such capital stock

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    3.3 Authorization;
      Enforceability.
      The
      Company has all corporate right, power and authority to enter into this
      Agreement and to consummate the transactions contemplated hereby. All corporate
      action on the part of the Company, its directors and stockholders necessary
      for
      the (i) authorization execution, delivery and performance of this Agreement
      by
      the Company; and (ii) authorization, sale, issuance and delivery of the
      Securities contemplated hereby and the performance of the Company's obligations
      hereunder has been taken. This Agreement has been duly executed and delivered
      by
      the Company and constitutes a legal, valid and binding obligation of the
      Company, enforceable against the Company in accordance with its terms, subject
      to laws of general application relating to bankruptcy, insolvency and the relief
      of debtors and rules of law governing specific performance, injunctive relief
      or
      other equitable remedies, and to limitations of public policy. The Note Shares,
      when issued and fully paid for in accordance with the terms of this Agreement,
      will be validly issued, fully paid and non-assessable. The Warrant Shares,
      when
      issued in accordance with the terms of the Warrants, will be validly issued,
      full paid and non-assessable. The Company has reserved, and will reserve at
      all
      times in the future, a sufficient number of shares of Common Stock to allow
      for
      the conversion of the Notes and the exercise of the Warrants. The issuance
      and
      sale of the Securities contemplated hereby will not give rise to any preemptive
      rights or rights of first refusal on behalf of any person which have not been
      waived in connection with this Offering.

    

    3.4 No
      Conflict; Governmental Consents.

    

    (a) Except
      as
      would not reasonably be expected to have a Material Adverse Effect, the
      execution and delivery by the Company of this Agreement and the consumma-tion
      of
      the transactions contemplated hereby will not result in the violation of any
      law, statute, rule, regulation, order, writ, injunction, judgment or decree
      of
      any court or governmental authority to or by which the Company is bound, or
      of
      any provision of the Certificate of Incorporation or By-Laws of the Company,
      and
      will not conflict with, or result in a breach or violation of, any of the terms
      or provisions of, or constitute (with due notice or lapse of time or both)
      a
      default under, any lease, loan agreement, mortgage, security agreement, trust
      indenture or other agreement or instrument to which the Company is a party
      or by
      which it is bound or to which any of its properties or assets is subject, nor
      result in the creation or imposition of any lien upon any of the properties
      or
      assets of the Company.

    

    (b) No
      consent, approval, authorization or other order of any governmental authority
      or
      other third party is required to be obtained by the Company in connection with
      the authorization, execution and delivery of this Agreement or with the
      authorization, issue and sale of the Securities, except such filings as may
      be
      required to be made with the SEC and with any state or foreign blue sky or
      securities regulatory authority relating to an exemption from registration
      thereunder.

    

    3.5 Licenses.
      Except
      as otherwise set forth in the Memorandum or as would not reasonably be expected
      to have a Material Adverse Effect, the Company has sufficient licenses, permits
      and other governmental authorizations currently required for the conduct of
      its
      business or ownership of properties and is in all material respects complying
      therewith.

    

    3.6 Litigation.
      There
      is no pending, or to the Company’s knowledge, threatened legal or governmental
      proceedings against the Company which (i) adversely questions the validity
      of
      this Agreement or any agreements related to the transactions contemplated hereby
      or the right of the Company to enter into any of such agreements, or to
      consummate the transactions contemplated hereby or thereby or (ii) could, if
      there were an unfavorable decision, have a Material Adverse Effect. There is
      no
      action, suit, proceeding or investigation by the Company currently pending
      in
      any court or before any arbitrator or that the Company intends to
      initiate.

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    3.7 Investment
      Company.
      The
      Company is not an “investment company” within the meaning of such term under the
      Investment Company Act of 1940, as amended, and the rules and regulations of
      the
      SEC thereunder.

    

    3.8 Financial
      Statements.
      The
      financial statements of the Company included in the SEC Filings (the
“Financial
      Statements”)
      fairly
      present in all material respects the financial condition and position of the
      Company at the dates and for the periods indicated; and have been prepared
      in
      conformity with generally accepted accounting principles in the United States
      (“GAAP”)
      consistently applied throughout the periods covered thereby, except as may
      be
      otherwise specified in such Financial Statements or the notes thereto and except
      that unaudited financial statements may not contain all footnotes required
      by
      GAAP, and fairly present in all material respects the financial position of
      the
      Company as of and for the dates thereof and the results of operations and cash
      flows for the periods then ended, subject, in the case of unaudited statements,
      to normal, immaterial, year-end audit adjustments. Since the date of the most
      recent balance sheet included as part of the Financial Statements, there has
      not
      been to the Company’s knowledge: (i) any change in the business, conditions
      (financial or otherwise), properties, assets, liabilities, or results of
      operations of the Company from that reflected in the Financial Statements,
      other
      than changes in the ordinary course of business, none of which individually
      or
      in the aggregate would reasonably be expected to have a Material Adverse Effect;
      or (ii) any other event or condition of any character that, either individually
      or cumulatively, would reasonably be expected to have a Material Adverse Effect,
      except for the expenses incurred in connection with the transactions
      contemplated by this Agreement.

    

    3.9 Title
      to Properties and Assets; Liens, Etc.
      Except
      as described in the Memorandum, the Company has good and marketable title to
      its
      properties and assets, including the properties and assets reflected in the
      most
      recent balance sheet included in the Financial Statements, and good title to
      its
      leasehold estates, in each case subject to no mortgage, pledge, lien, lease,
      encumbrance or charge, other than (a) those resulting from taxes which have
      not
      yet become delinquent; (b) liens and encumbrances which do not materially
      detract from the value of the property subject thereto or materially impair
      the
      operations of the Company; (c) those that have otherwise arisen in the ordinary
      course of business; and (d) those that would not reasonably be expected to
      have
      a Material Adverse Effect. The Company is in compliance with all material terms
      of each lease to which it is a party or is otherwise bound.

    

    3.10 Obligations
      to Related Parties.
      Except
      as disclosed in the Memorandum or as would not reasonably be expected to have
      a
      Material Adverse Effect, there are no obligations of the Company to officers,
      directors, stockholders, or employees of the Company other than (a) for payment
      of salary or other compensation for services rendered, (b) anti-dilution
      provisions in favor of the Company’s Chief Executive Officer, as described in
      the Memorandum under the caption “The Offering and Related Matters - Option
      Grant to Chief Executive Officer”, (c) reimbursement for reasonable expenses
      incurred on behalf of the Company, (d) standard indemnification provisions
      in
      the certificate of incorporation and by-laws, and (e) for other standard
      employee benefits made generally available to all employees (including stock
      option agreements outstanding under any stock option plan approved by the Board
      of Directors of the Company). Except as may be disclosed in the Financial
      Statements, the Company is not a guarantor or indemnitor of any indebtedness
      of
      any other person, firm or corporation.

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    3.11 Employee
      Relations; Employee Benefit Plans.
      The
      Company is not a party to any collective bargaining agreement or union contract.
      The Company believes that its relations with its employees are good. No
      executive officer (as defined in Rule 501(f) of the Securities Act) of the
      Company has notified the Company that such officer intends to leave the Company
      or otherwise terminate such officer's employment with the Company. The Company
      is in compliance with all federal, state, local and foreign laws and regulations
      respecting employment and employment practices, terms and conditions of
      employment and wages and hours, except where failure to be in compliance would
      not, either individually or in the aggregate, reasonably be expected to result
      in a Material Adverse Effect. Except as disclosed in the Memorandum, the Company
      does not maintain any compensation or benefit plan, agreement, arrangement
      or
      commitment (including, but not limited to, "employee benefit plans", as defined
      in Section 3(3) of the Employee Retirement Income Security Act of 1974, as
      amended (“ERISA”))
      for
      any present or former employees, officers or directors of the Company or with
      respect to which the Company has liability or makes or has an obligation to
      make
      contributions, other than any such plans, agreements, arrangements or
      commitments made generally available to the Company’s employees.

    

    3.12 Environmental
      Laws.
      To the
      knowledge of the Company, it (i) is in compliance with any and all Environmental
      Laws (as hereinafter defined), (ii) has received all permits, licenses or other
      approvals required of it under applicable Environmental Laws to conduct its
      business and (iii) is in compliance with all terms and conditions of any such
      permit, license or approval where, in each of the foregoing clauses (i), (ii)
      and (iii), the failure to so comply would reasonably be expected to have,
      individually or in the aggregate, a Material Adverse Effect. The term
“Environmental
      Laws”
means
      all federal, state, local or foreign laws relating to pollution or protection
      of
      human health or the environment (including, without limitation, ambient air,
      surface water, groundwater, land surface or subsurface strata), including,
      without limitation, laws relating to emissions, discharges, releases or
      threatened releases of chemicals, pollutants, contaminants, or toxic or
      hazardous substances or wastes (collectively, “Hazardous
      Materials”)
      into
      the environment, or otherwise relating to the manufacture, processing,
      distribution, use, treatment, storage, disposal, transport or handling of
      Hazardous Materials, as well as all authorizations, codes, decrees, demands
      or
      demand letters, injunctions, judgments, licenses, notices or notice letters,
      orders, permits, plans or regulations issued, entered, promulgated or approved
      thereunder.

    

    3.13 Tax
      Status.
      To the
      knowledge of the Company, it (i) has made or filed all federal and state income
      and all other tax returns, reports and declarations required by any jurisdiction
      to which it is subject, (ii) has paid all taxes and other governmental
      assessments and charges that are material in amount, shown or determined to
      be
      due on such returns, reports and declarations, except those being contested
      in
      good faith and (iii) has set aside on its books provision reasonably adequate
      for the payment of all taxes for periods subsequent to the periods to which
      such
      returns, reports or declarations apply. There are no unpaid taxes in any
      material amount claimed to be due by the taxing authority of any jurisdiction,
      and the officers of the Company know of no basis for any such
      claim.

    

    3.14 Proprietary
      Rights.
      To the
      Company’s knowledge, the Company owns or possesses adequate and enforceable
      rights to use all patents, patent applications, trademarks, trade names,
      corporate names, copyrights, trade secrets, licenses, inventions, formulations,
      technology and know-how and other intangible property used in the conduct of
      its
      business as described in the Memorandum (the “Proprietary
      Rights”).
      Except as described in the Memorandum, to the Company’s knowledge, the Company
      has not received any notice of, and there are no facts known to the Company
      that
      reasonably indicate the existence of (i) any infringement or misappropriation
      by
      any third party of any of the Proprietary Rights or (ii) any claim by a third
      party contesting the validity of any of the Proprietary Rights. The Company
      has
      not received any notice of any infringement, misappropriation or violation
      by
      the Company or any of its employees of any Proprietary Rights of third
      parties

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    3.15 Absence
      of Certain Changes.
      Since
      the date of the Memorandum, there has been no material adverse change in the
      business, operations, conditions (financial or otherwise), prospects, assets
      or
      results of operations of the Company or any of its Subsidiaries, other than
      as
      contemplated by or described in the Memorandum.

     

    3.16 Other
      Indebtedness.
      Following the Closing Date, as long as any Note remains outstanding, the Company
      will not, without the prior written consent of the holders of Notes evidencing
      at least a majority of the principal indebtedness then outstanding under the
      Notes, incur indebtedness for borrowed money (“New
      Debt”)
      in
      favor of any person or entity (each a “New
      Lender”)
      which
      indebtedness is secured or otherwise senior in priority to any Note issued
      to
      any subscriber pursuant to this Agreement or any substantially similar
      agreement, unless the New Lenders execute and deliver to the subscribers then
      holding Notes a subordination agreement (in a form acceptable to the subscribers
      holding Notes evidencing at least a majority of the principal indebtedness
      then
      outstanding under the Notes) providing for the subordination of the New Debt
      to
      any of the indebtedness evidenced by any Notes. 

     

    3.17 Disclosure.
      The
      information set forth in the Memorandum as of the date hereof contains no untrue
      statement of a material fact nor omits to state a material fact necessary in
      order to make the statements contained therein, in light of the circumstances
      under which they were made, not misleading.

    

    4. CONDITIONS
      TO OBLIGATIONS OF EACH PARTY.

    

    4.1  Conditions
      to Obligations of the Company.
      The
      Company’s obligation to complete the sale and issuance of the Securities and
      deliver the Securities to the Subscriber at the Closing is subject to the
      fulfillment on or prior to the Closing of the following conditions, which
      conditions may be waived at the option of the Company to the extent permitted
      by
      law:

    

    (a) Representations
      and Warranties Correct.
      The
      representations and warranties made by the Subscriber in Article 2 hereof shall
      be true and correct when made, and shall be true and correct on and as of the
      Closing Date (except for any representation or warranty that speaks as of a
      specific date, which shall be true and correct as of such date).

    

    (b) Covenants.
      All
      covenants, agreements and conditions contained in this Agreement to be performed
      by the Subscriber on or prior to such sale and issuance shall have been
      performed or complied with in all material respects.

    

    (c) No
      Legal Order Pending.
      There
      shall not then be in effect any legal or other order enjoining or restraining
      the transactions contemplated by this Agreement.

    

    (d)
      No
      Law
      Prohibiting or Restricting Such Sale.
      There
      shall not be in effect any law, rule or regulation prohibiting or restricting
      the issuance and sale of the Securities or requiring any consent or approval
      of
      any Person which shall not have been obtained to issue or sell the Securities,
      or in either case to otherwise consummate the transactions contemplated hereby
      (except as otherwise provided in this Agreement).

    

    (e)
      Payment
      of Consideration.
      The
      Company shall have received the full amount of the Aggregate Purchase Price
      for
      the Securities being purchased hereunder at the Closing.

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

    (f)
      Questionnaires.
      The
      Subscriber shall have completed, executed and delivered to the Company the
      Confidential Investor Questionnaire, included as Article 7 hereof, and the
      Registration Questionnaire, included as Appendix
      A
      hereto,
      which questionnaires shall be true and correct as of the Closing and shall
      be
      satisfactory to the Placement Agents and the Company, in their sole
      discretion.

    

    (g)
      Minimum
      Offering.
      The
      Company shall have received duly executed subscriptions and corresponding
      readily available funds shall have been deposited into the Escrow Account from
      Subscribers equal to or in excess of the Minimum Offering.

    

    4.2 The
      Subscriber’s obligation to purchase the Securities at the Closing is subject to
      the fulfillment on or prior to the Closing of the following conditions, which
      conditions may be waived at the option of each Subscriber to the extent
      permitted by law:

    

    (a) Representations
      and Warranties Correct.
      The
      representations and warranties made by the Company in Article 3 hereof shall
      be
      true and correct when made, and shall be true and correct on and as of the
      Closing Date (except for any representation or warranty that speaks as of a
      specific date, which shall be true and correct as of such date).

    

    (b) Covenants.
      All
      covenants, agreements and conditions contained in this Agreement to be performed
      by the Company on or prior to such purchase shall have been performed or
      complied with in all material respects.

    

    (c) No
      Legal Order Pending.
      There
      shall not then be in effect any legal or other order enjoining or restraining
      the transactions contemplated by this Agreement.

    

    (d)
      No
      Law
      Prohibiting or Restricting Such Sale.
      There
      shall not be in effect any law, rule or regulation prohibiting or restricting
      the issuance and sale of the Securities or requiring any consent or approval
      of
      any Person which shall not have been obtained to issue or sell the Securities,
      or in either case to otherwise consummate the transactions contemplated hereby
      (except as otherwise provided in this Agreement).

    

    (e)
      Minimum
      Offering.
      The
      Company shall have received duly executed subscriptions and corresponding
      readily available funds in the Escrow Account from Subscribers equal to or
      in
      excess of the Minimum Offering Amount.

     

    (f)
      No
      Suspension of Trading; Change in Financial Markets.
      Trading
      in the Common Stock shall not be suspended by the SEC or the OTC Bulletin Board
      (except for any suspension of trading of limited duration agreed to by the
      Company, which suspension shall have been terminated prior to the Closing),
      and,
      at any time prior to the Closing Date, trading in securities generally in the
      United States shall have not been suspended or limited, nor shall there have
      occurred any material outbreak or escalation of hostilities or other national
      or
      international calamity of such magnitude in its effect on, or any material
      adverse change in, any financial market which, in each case, in the reasonable
      judgment of the Placement Agents, makes it impracticable or inadvisable to
      purchase the Securities at the Closing.

    

    5. REGISTRATION
      RIGHTS.

    

    5.1 As
      used
      in this Agreement, the following terms shall have the following
      meanings:

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

     

    (a) “Affiliate”
shall
      mean, with respect to any Person (as defined below), any other Person
      controlling, controlled by or under direct or indirect common control with
      such
      Person (for the purposes of this definition “control,” when used with respect to
      any specified Person, shall mean the power to direct the management and policies
      of such Person, directly or indirectly, whether through ownership of voting
      securities, by contract or otherwise; and the terms “controlling” and
“controlled” shall have meanings correlative to the foregoing).

    

    (b) “Business
      Day”
shall
      mean any day other than a Saturday, Sunday or other day on which the SEC is
      closed for business.

    

    (c) “Holders”
shall
      mean the Subscribers and any Person holding Registrable Securities or any Person
      to whom the rights under Article 5 have been transferred in accordance with
      Section 5.11 hereof.

    

    (d) “Person”
shall
      mean any person, individual, corporation, limited liability company,
      partnership, trust or other nongovernmental entity or any governmental agency,
      court, authority or other body (whether foreign, federal, state, local or
      otherwise).

    

    (e) The
      terms
“register,”
      “registered”
and
      “registration”
refer
      to the registration effected by preparing and filing a registration statement
      in
      compliance with the Securities Act, and the declaration or ordering of the
      effectiveness of such registration statement.

    

    (f) “Registrable
      Securities”
shall
      mean the Note Shares, the Warrant Shares and the Placement Warrant Shares and
      any shares of Common Stock issued as a dividend or distribution with respect
      to
      or in replacement of the Common Stock issued, directly or indirectly, in
      connection with this Offering; provided,
      however,
      that
      Securities shall only be treated as Registrable Securities if and only for
      so
      long as they (i) have not been sold (A) pursuant to a registration statement;
      (B) to or through a broker, dealer or underwriter in a public distribution
      or a
      public securities transaction; and/or (C) in a transaction exempt from the
      registration and prospectus delivery requirements of the Securities Act under
      Section 4(1) thereof so that all transfer restrictions and restrictive legends
      with respect thereto, if any, are removed upon the consummation of such sale;
      (ii) are not held by a Holder or a permitted transferee; and (iii) are not
      eligible for sale pursuant to Rule 144(k) (or any successor thereto) under
      the
      Securities Act. 

    

    (g)  “Registration
      Expenses”
shall
      mean all expenses incurred by the Company in complying with Section 5.2 hereof,
      including, without limitation, all registration, qualification and filing fees,
      printing expenses, escrow fees, fees and expenses of counsel for the Company,
      blue sky fees and expenses and the expense of any special audits incident to
      or
      required by any such registration (but excluding the fees of legal counsel
      for
      any Holder).

    

    (h)  “Selling
      Expenses”
shall
      mean all underwriting discounts and selling commissions applicable to the sale
      of Registrable Securities and, except to the extent set forth in the definition
      of Registration Expenses, all fees and expenses of legal counsel for any
      Holder.

    

    (i)  “Subsidiary”
shall
      mean, with respect to any Person, any other Person of which more than fifty
      percent (50%) of the shares of stock or other interests entitled to vote in
      the
      election of directors or comparable Persons performing similar functions
      (excluding shares or other interests entitled to vote only upon the failure
      to
      pay dividends thereon or other contingencies) are at the time owned or
      controlled, directly or indirectly through one or more Subsidiaries, by such
      Person.

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

     

    5.2 Piggyback
      Registration.
      

    

    (a) The
      Company agrees that if, at any time, and from time to time, after the completion
      of a Qualified Financing, the Board of Directors of the Company (the
“Board”)
      shall
      authorize the filing of a registration statement under the Securities Act in
      connection with the registration of any of its Securities by it or any of its
      stockholders (other than an offering registered on Form S-8, Form S-4 or a
      similarly inappropriate form), the Company shall: (A) promptly notify each
      Holder that such registration statement will be filed and that the Registrable
      Securities then held by such Holder will be included in such registration
      statement at such Holder’s request; (B) subject to Section 5.6, cause such
      registration statement to cover all of such Registrable Securities issued to
      such Holder for which such Holder requests inclusion; (C) use reaonable best
      efforts to cause such registration statement to become effective as soon as
      practicable; and (D) take all other reasonable action necessary under any
      Federal or state law or regulation of any governmental authority to permit
      all
      such Registrable Securities that have been issued to such Holder to be sold
      or
      otherwise disposed of, and will maintain such compliance with each such Federal
      and state law and regulation of any governmental authority for the period
      necessary for such Holder to promptly effect the proposed sale or other
      disposition.

    

    (b) Notwithstanding
      any other provision of this Section 5.2, the Company may at any time, abandon
      or
      delay any registration commenced by the Company. In the event of such an
      abandonment by the Company, the Company shall not be required to continue
      registration of shares requested by the Holder for inclusion, the Holder shall
      retain the right to request inclusion of shares as set forth above and the
      withdrawn registration shall not be deemed to be a registration request for
      the
      purposes of Section 5.2(c) below.

    

    (c) Each
      Holder shall have the right to request inclusion of any of its Registrable
      Securities in a registration statement as described in this Section 5.2, up
      to
      three times.

    

    5.3 Registration
      Procedures.
      Whenever required under this Article 5 to include Registrable Securities in
      a
      Company registration statement, the Company shall, as expeditiously as
      reasonably possible:

    

    (a) Use
      reaonable best efforts to (i) cause such registration statement to become
      effective, and (ii) cause such registration statement to remain effective until
      the earliest to occur of (A) such date as the Holders have completed the
      distribution described in the registration statement and (B) such time that
      all
      of such Registrable Securities are no longer, by reason of Rule 144(k) under
      the
      Act, required to be registered for the sale thereof by such Holders. The Company
      will also use its reaonable best efforts to, during the period that such
      registration statement is required to be maintained hereunder, file such
      post-effective amendments and supplements thereto as may be required by the
      Securities Act and the rules and regulations thereunder or otherwise to ensure
      that the registration statement does not contain any untrue statement of
      material fact or omit to state a fact required to be stated therein or necessary
      to make the statements contained therein, in light of the circumstances under
      which they are made, not misleading; provided, however, that if applicable
      rules
      under the Securities Act governing the obligation to file a post-effective
      amendment permits, in lieu of filing a post-effective amendment that (i)
      includes any prospectus required by Section 10(a)(3) of the Securities Act
      or
      (ii) reflects facts or events representing a material or fundamental change
      in
      the information set forth in the registration statement, the Company may
      incorporate by reference information required to be included in (i) and (ii)
      above to the extent such information is contained in periodic reports filed
      pursuant to Section 13 or 15(d) of the Exchange Act in the registration
      statement. In the event that the Company becomes qualified for the use of Form
      S-3 or any successor form at a time when any registration statement on any
      other
      Form which includes Registrable Securities is required to be maintained
      hereunder, the Company shall, upon the request of any Selling Holder, subject
      to
      Section 5.4, (i) as expeditiously as reasonably possible, use reaonable best
      efforts to cause a Short-Form Registration covering such Registrable Securities
      to become effective and (ii) comply with each of the other requirements of
      this
      Section 5.3 which may applicable thereto. Upon the effectiveness of such
      Short-Form Registration, the Company shall be relieved of its obligations
      hereunder to keep in effect the registration statement which initially covered
      the Registrable Securities included in such Short-Form Registration.

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

     

    (b) Prepare
      and file with the SEC such amendments and supplements to such registration
      state-ment, and the prospectus used in connection with such registra-tion
      statement, as may be necessary to comply with the provi-sions of the Securities
      Act with respect to the disposition of all securities covered by such
      registra-tion statement.

    

    (c) Make
      available for inspection upon reasonable notice during the Company’s regular
      business hours by each Selling Holder, any underwriter participating in any
      distribution pursuant to such registration statement, and any attorney,
      accountant or other agent retained by such Selling Holder or underwriter, all
      financial and other records, pertinent corporate documents and properties of
      the
      Company, and cause the Company’s officers, directors and employees to supply all
      information reasonably requested by any such Selling Holder, underwriter,
      attorney, accountant or agent in connection with such registration
      statement.

    

    (d) Furnish
      to the Selling Holders such numbers of copies of a prospectus, including a
      preliminary pros-pectus as amended or supplemented from time to time, in
      conformi-ty with the requirements of the Securities Act, and such other
      documents as they may reasonably request in order to facilitate the disposi-tion
      of Registrable Securities owned by them.

    

    (e) Use
      reaonable best efforts to register and qualify the securities covered by such
      registration statement under such other federal or state securities laws of
      such
      jurisdic-tions as shall be reason-ably requested by the Selling Holders;
      provided, however, that the Company shall not be required in connection
      therewith or as a condition there-to to quali-fy to do business or to file
      a
      general consent to ser-vice of process in any such states or jurisdic-tions,
      unless the Company is already subject to service in such jurisdiction and except
      as may be re-quired by the Securities Act.

    

    (f) In
      the
      event of any underwritten public offer-ing, enter into and perform its
      obligations under an under-writing agreement, in usual and customary form,
      with
      the managing under-writer of such offering. Each Selling Holder participating
      in
      such under-writing shall also enter into and perform its obligations under
      such
      an agreement.

    

    (g) Notify
      each Holder of Registrable Securities covered by such registration statement,
      at
      any time when a pro-spectus relating thereto is required to be delivered under
      the Securities Act, (i) when the registration statement or any post-effective
      amendment and supplement thereto has become effective; (ii) of the issuance
      by
      the SEC of any stop order or the initiation of proceedings for that purpose
      (in
      which event the Company shall make every effort to obtain the withdrawal of
      any
      order suspending effectiveness of the registration statement at the earliest
      possible time or prevent the entry thereof); (iii) of the receipt by the Company
      of any notification with respect to the suspension of the qualification of
      the
      Registrable Securities for sale in any jurisdiction or the initiation of any
      proceeding for such purpose; and (iv) of the happening of any event as a result
      of which the prospectus included in such regis-tration statement, as then in
      effect, in-cludes an untrue state-ment of a material fact or omits to state
      a
      material fact required to be stated therein or neces-sary to make the statements
      therein not misleading in the light of the circum-stances then
      existing.

     

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

     

    (h) Cause
      all
      such Registrable Securi-ties regis-tered hereunder to be listed on each
      secu-rities exchange or quotation service on which similar securities issued
      by
      the Company are then listed or quoted or, if no such similar securities are
      listed or quoted on a securities exchange or quotation service, apply for
      qualification and use reaonable best efforts to qualify such Registrable
      Securities for inclusion on the New York Stock Exchange or listing on a
      quotation system of the National Association of Securities Dealers,
      Inc.

    

    (i) Cooperate
      with the Selling Holders and the managing underwriters, if any, to facilitate
      the timely preparation and delivery of certificates representing the Registrable
      Securities to be sold, which certificates will not bear any restrictive legends;
      and enable such Registrable Securities to be in such denominations and
      registered in such names as the managing underwriters, if any, shall request
      at
      least two business days prior to any sale of the Registrable Securities to
      the
      underwriters.

    

    5.4 Furnish
      Information. It
      shall
      be a condition precedent to the obligation of the Company to take any action
      pursu-ant to this Article 5 with respect to the Registrable Securi-ties of
      any
      Selling Holder that such Holder shall furnish to the Company such informa-tion
      regarding the Holder, the Registra-ble Securities held by the Holder, and the
      intended method of disposition of such securi-ties as shall be reasonably
      required by the Company to effect the registration of such Holder's Registrable
      Securities, which shall include, without limitation, the completion of the
      Registration Questionnaire attached hereto as Appendix
      A.

    

    5.5 Registration
      Expenses.
      The
      Company shall bear and pay all Registration Expenses incurred in connection
      with
      any registra-tion, filing or qualifica-tion of Registrable Securities with
      respect to registra-tions pursuant to this Article 5 for each Holder, but
      excluding under-writing dis-counts and com-missions relating to Registra-ble
      Securi-ties and excluding any professional fees or costs of accounting,
      financial or legal advisors to any of the Holders.

    

    5.6 Underwriting
      Requirements.
      In
      connec-tion with any offering involving an underwriting of shares of the
      Company’s capital stock, the Company shall not be required under Section 5.2 to
      include any of the Holders’ Registrable Securities in such underwriting unless
      they accept the terms of the underwriting as agreed upon between the Company
      and
      the underwriters selected by it (or by other persons entitled to select the
      underwrit-ers), and then only in such quantity as the underwriters determine
      in
      their sole discretion will not jeopardize the success of the offering by the
      Company. If the total amount of securities, including Registrable Secu-rities,
      requested by stockholders to be included in such offering exceeds the amount
      of
      securities sold other than by the Company that the underwriters determine in
      their sole discretion is compatible with the success of the offering, then
      the
      Company shall be required to include in the offering only that number of such
      securi-ties, including Registra-ble Securities, which the under-writers
      determine in their sole discretion will not jeopardize the success of the
      offering (the securities so included to be appor-tioned pro rata among the
      selling stockholders according to the total amount of securities entitled to
      be
      includ-ed there-in owned by each selling stockholder or in such other
      proportions as shall mutu-ally be agreed to by such sell-ing stockholders).
      For
      purposes of the preceding paren-thetical concerning apportionment, for any
      selling stock-holder who is a holder of Registrable Securities and is a
      partner-ship or corporation, the partners, retired part-ners and stockholders
      of
      such holder, or the estates and family members of any such partners and retired
      partners and any trusts for the benefit of any of the foregoing persons shall
      be
      deemed to be a single “selling stock-holder”, and any pro-rata reduction with
      respect to such “selling stockholder” shall be based upon the aggregate amount
      of shares carrying registra-tion rights owned by all entities and individuals
      in-cluded in such “selling stockhold-er”, as defined in this sentence. To the
      extent any Registrable Securities are excluded from registration pursuant to
      this Section 5.6, then the Company shall continue to be obligated under Section
      5.2 hereof to include such omitted Registrable Securities in the next
      appropriate registration statement filed by the Company.

     

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

     

    5.7 Delay
      of Registration.
      No
      Holder shall have any right to obtain or seek an injunction restrain-ing or
      otherwise delaying any such registration as the result of any controversy that
      might arise with respect to the inter-pretation or implemen-tation of this
      Article. 

    

    5.8 Indemnification.
      In the
      event that any Regis-trable Securi-ties are included in a registration
      state-ment under this Article 5:

    

    (a) To
      the
      extent permitted by law, the Company will indemnify and hold harmless each
      Holder, any underwriter (as defined in the Securities Act) for such Holder
      and
      each person, if any, who controls such Holder or under-writer within the meaning
      of the Securities Act or the Exchange Act, against any losses, claims, damages,
      or liabili-ties (joint or sever-al) to which they may become subject under
      the
      Securities Act, or the Exchange Act, insofar as such losses, claims, damag-es,
      or liabilities (or actions in respect thereof) arise out of or are based upon
      any of the following statements, omissions or violations (collec-tively a
“Violation”):
      (i)
      any untrue state-ment or alleged untrue statement of a material fact contained
      in such registra-tion state-ment, including any preliminary prospectus or final
      prospectus contained therein or any amendments or sup-plements thereto, (ii)
      the
      omission or alleged omis-sion to state therein a material fact re-quired to
      be
      stated therein, or necessary to make the statements therein not misleading,
      or
      (iii) any viola-tion or alleged violation by the Company of the Securities
      Act,
      the Exchange Act, or any rule or regulation promulgated under the Securities
      Act, or the Exchange Act, and the Company will pay to each such Holder,
      under-writer or controlling person, as in-curred, any legal or other expenses
      reasonably in-curred by them in connection with investi-gating or defending
      any
      such loss, claim, damage, liability, or action; provided, however, that the
      indemnity agreement contained in this Section 5.8(a) shall not apply to amounts
      paid in settlement of any such loss, claim, damage, liability, or action if
      such
      set-tlement is effected without the consent of the Compa-ny (which consent
      shall
      not be unreasonably with-held), nor shall the Company be liable in any such
      case
      for any such loss, claim, damage, liability, or action to the extent that it
      arises out of or is based upon a Violation which occurs in reliance upon and
      in
      conformi-ty with written information furnished expressly for use in con-nection
      with such registration by any such Holder, under-writer or controlling
      person.

    

    (b) To
      the
      extent permitted by law, each Selling Holder will indemnify and hold harmless
      the Company, each of its directors, each of its officers, each person, if any,
      who con-trols the Company within the meaning of the Securities Act, any
      underwriter, any other Holder selling securi-ties in such registration statement
      and any controlling person of any such under-writer or other Holder, against
      any
      losses, claims, damages, or liabilities (joint or sever-al) to which any of
      the
      foregoing persons may become subject, under the Securities Act, or the Exchange
      Act, insofar as such losses, claims, damages, or liabilities (or actions in
      respect thereto) arise out of or are based upon any Violation, in each case
      to
      the extent (and only to the extent) that such Violation occurs in reliance
      upon
      and in conformity with written information fur-nished by such Holder ex-pressly
      for use in connection with such regis-tration; and each such Holder will pay,
      as
      incurred, any legal or other expenses reasonably incurred by any person
      intend-ed to be indemnified pursu-ant to this Section 5.8(b), in connection
      with
      investi-gating or defending any such loss, claim, damage, liability, or action;
      provided,
      however,
      that
      the indem-nity agreement con-tained in this Section 5.8(b) shall not apply
      to
      amounts paid in settlement of any such loss, claim, damage, liability or action
      if such settlement is ef-fected with-out the consent of the Hold-er, which
      consent shall not be unreasonably withheld; provid-ed,
      further,
      that, in
      no event shall any indemnity under this Section 5.8(b) exceed the greater of
      the
      cash value of the (i) gross proceeds from the offering received by such Holder
      or (ii) such Holder’s investment pursuant to this Agreement as set forth on the
      signature page attached hereto.

     

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

     

    (c) Promptly
      after receipt by an indem-ni-fied party under this Section 5.8 of notice of
      the
      commencement of any action (including any governmental action), such
      indem-nified party shall, if a claim in respect thereof is to be made against
      any indemnify-ing party under this Section 5.8, deliver to the indemnify-ing
      party a written notice of the commencement thereof and the indemni-fying party
      shall have the right to par-ticipate in, and, to the extent the indemnifying
      party so desires, jointly with any other indemnifying party simi-larly notified,
      to assume the defense thereof with counsel selected by the indemnifying party
      and approved by the indemnified party (whose approval shall not be unreasonably
      withheld); provided, however, that an indemnified party (together with all
      other
      indem-nified parties which may be represented with-out conflict by one counsel)
      shall have the right to retain one sepa-rate counsel, with the fees and expenses
      to be paid by the indemnifying party, if representation of such indem-nified
      party by the counsel retained by the indemnifying party would be inappropriate
      due to actual or potential differing interests between such indemni-fied party
      and any other party represented by such counsel in such proceeding. The failure
      to deliver written notice to the indemnifying party within a rea-sonable time
      of
      the com-mencement of any such action, if prejudicial to its ability to defend
      such action, shall relieve such indem-nifying party of any liability to the
      indemnified party under this Section 5.8, but the omission so to deliver written
      notice to the indemnify-ing party will not re-lieve it of any liabil-ity that
      it
      may have to any indem-nified party otherwise than under this Section
      5.98.

    

    (d) If
      the
      indemnification provided for in this Section 5.8 is held by a court of competent
      juris-diction to be unavailable to an indemnified party with respect to any
      loss, liability, claim, damage, or ex-pense referred to therein, then the
      indemnifying party, in lieu of indem-nifying such indemnified party hereun-der,
      shall contrib-ute to the amount paid or pay-able by such indemnified party
      as a
      result of such loss, liabil-ity, claim, dam-age, or expense in such pro-por-tion
      as is appro-priate to reflect the relative fault of the indem-nifying party
      on
      the one hand and of the indem-nified party on the other in connection with
      the
      state-ments or omissions that resulted in such loss, liabili-ty, claim, damage,
      or expense as well as any other relevant equita-ble consid-er-ations. The
      relative fault of the indemni-fying party and of the indemnified party shall
      be
      deter-mined by refer-ence to, among other things, whether the untrue or alleged
      untrue statement of a materi-al fact or the alleged omission to state a material
      fact relates to infor-mation supplied by the indemnifying party or by the
      indemnified party and the parties' rela-tive intent, knowl-edge, access to
      infor-ma-tion, and opportunity to correct or prevent such state-ment or
      omission.

    

    (e) Notwithstanding
      the foregoing, to the extent that the provisions on indemnification and
      con-tri-bution contained in the underwriting agreement en-tered into in
      connection with the underwritten public offering are in conflict with the
      foregoing provisions, the provi-sions in the underwriting agreement shall
      con-trol.

    

    (f) The
      obligations of the Company and Holders under this Section 5.8 shall survive
      the
      com-ple-tion of any offer-ing of Registrable Securities in a registration
      state-ment under this Article V, and other-wise.

    

    5.9 Reports
      Under Securities Exchange Act of 1934.
      With a
      view to making available to the Holders the benefits of Rule 144 and any other
      rule or regula-tion of the SEC that may at any time permit a Holder to sell
      securities of the Company to the public without registration, as well as to
      maintain its eligibility for trading the Common Stock on the OTC Bulletin Board,
      the Company agrees to:

     

    
      
        
        

      

      
        20

        
          

        

      

      
        
        

      

    

     

    (a) make
      and
      keep public information avail-able, as those terms are understood and defined
      in
      Rule 144; and

    

    (b) file
      with
      the SEC in a timely manner all reports and other documents required of the
      Company under the Securities Act and the Exchange Act.

    

    5.10 Permitted
      Transferees.
      The
      rights to cause the Company to register Registrable Securities granted to the
      Holders by the Company under this Article 5 may be assigned in full by a Holder
      in connection with a transfer by such Holder of its Registrable Securities
      if:
      (a) such Holder gives prior written notice to the Company; (b) such
      transferee agrees to comply with the terms and provisions of this Agreement;
      (c) such transfer is otherwise in compliance with this Agreement,
      (d) such transfer is otherwise effected in accordance with applicable
      securities laws and (e) such Holder transfers at least 51% of its shares of
      Registrable Securities to the transferee. Except as specifically permitted
      by
      this Section 5.10, the rights of a Holder with respect to Registrable Securities
      as set out herein shall not be transferable to any other Person, and any
      attempted transfer shall cause all rights of such Holder therein to be
      forfeited. 

    

    5.12 Termination
      of Registration Rights
      The
      right of any Holder to request or demand inclu-sion in any regis-tration
      pursuant to this Article 5 shall terminate if all shares of Registrable
      Secu-rities held by such Holder may immediately be sold under Rule 144(k)
      without restriction.

    

    6. MISCELLANEOUS.

    

    6.1 The
      Company reserves the right to reject the subscription made hereby in its sole
      discretion. Unless terminated earlier in the Placement Agents’ or the Company’s
      sole discretion, the Offering will expire on June 29, 2007, (as such date may
      be
      extended by agreement of the Placement and the Company in their sole discretion
      without notice to the Subscribers for an additional 60 days (the “Termination
      Date”)),
      if
      the conditions to closing set forth in Article 4 have not been satisfied or
      waived by such time.

    

    6.2 The
      Company’s agreement with each Subscriber is a separate agreement and each sale
      of the Securities to each Subscriber is a separate sale.

    

    6.3 All
      notices, requests and other communications under this Agreement shall be in
      writing, and shall be sufficiently given if delivered to the addressees in
      person or by recognized overnight courier, mailed by certified or registered
      mail, return receipt requested, or by facsimile or e-mail transmission, as
      follows: 

     

    
      	
              If
                to the Company:

            	 	VioQuest Pharmaceuticals, Inc.
	
            	 	180 Mount Airy Road, Suite 102
	
            	 	Basking Ridge, New Jersey 07920
	
            	 	Facsimile: (908)766-4455
	
            	 	Attn: Chief Financial Officer
	
            	 	Email:
              brian.lenz@vioquestpharm.com

    

    
       

      
        	
                With
                  a copy to:

              	 	Maslon Edelman Borman & Brand,
                LLP
	
              	 	3300 Wells Fargo Center
	
              	 	90 South 7th Street
	
              	 	Minneapolis, Minnesota 55402
	
              	 	
                Facsimile:
                  (612) 642-8343

              
	
              	 	
                Attn:
                  Christopher J. Melsha, Esq.

              
	
              	 	Email:
                chris.melsha@maslon.com

      

    

     

    
      
        
        

      

      
        21

        
          

        

      

      
        
        

      

    

     

    If
      to a Subscriber, at such address as such Subscriber shall have provided in
      writing to the Company or such other addresses as such Subscriber furnishes
      by
      notice given in accordance with this Section 6.3 or
      such
      other address as may be designated in writing hereafter, in the same manner,
      by
      such Person. 

    

    6.4 Except
      as
      provided in Section 5.11 above, this Agreement shall not be changed, modified
      or
      amended except by a writing signed by the parties to be charged, and this
      Agreement may not be discharged except by performance in accordance with its
      terms or by a writing signed by the party to be charged.

    

    6.5 Subject
      to the provisions of Section 5.9, this Agreement shall be binding upon and
      inure
      to the benefit of the parties hereto and to their respective heirs, legal
      representatives, successors and assigns. This Agreement sets forth the entire
      agreement and understanding between the parties as to the subject matter hereof
      and merges and supersedes all prior discussions, agreements and understandings
      of any and every nature among them.

    

    6.6 Upon
      the
      execution and delivery of this Agreement by the Subscriber, this Agreement
      shall
      become a binding obligation of the Subscriber with respect to the purchase
      of
      the Securities as herein provided; subject, however, to the right hereby
      reserved to the Company to reject this subscription in accordance with Section
      2.16, enter into the same agreements with other subscribers and to add and/or
      delete other Persons as subscribers. 

    

    6.7 Notwithstanding
      the place where this Agreement may be executed by any of the parties hereto,
      the
      parties expressly agree that all the terms and provisions hereof shall be
      construed in accordance with and governed by the laws of the State of New York
      without regard to principles of conflicts of law.

    

    6.8 The
      holding of any provision of this Agreement to be invalid or unenforceable by
      a
      court of competent jurisdiction shall not affect any other provision of this
      Agreement, which shall remain in full force and effect. If any provision of
      this
      Agreement shall be declared by a court of competent jurisdiction to be invalid,
      illegal or incapable of being enforced in whole or in part, such provision
      shall
      be interpreted so as to remain enforceable to the maximum extent permissible
      consistent with applicable law and the remaining conditions and provisions
      or
      portions thereof shall nevertheless remain in full force and effect and
      enforceable to the extent they are valid, legal and enforceable, and no
      provisions shall be deemed dependent upon any other covenant or provision unless
      so expressed herein.

    

    6.9 It
      is
      agreed that a waiver by either party of a breach of any provision of this
      Agreement shall not operate, or be construed, as a waiver of any subsequent
      breach by that same party.

    

    6.10 The
      parties agree to execute and deliver all such further documents, agreements
      and
      instruments and take such other and further action as may be necessary or
      appropriate to carry out the purposes and intent of this Agreement.

    

    6.11 This
      Agreement may be executed in two or more counterparts each of which shall be
      deemed an original, but all of which shall together constitute one and the
      same
      instrument.

     

    
      
        
        

      

      
        22

        
          

        

      

      
        
        

      

    

     

    6.12 (a) The
      Subscriber agrees not to issue any public statement with respect to the
      Subscriber’s investment or proposed investment in the Company or the terms of
      any agreement or covenant between them and the Company without the Company’s
      prior written consent, except such disclosures as may be required under
      applicable law or under any applicable order, rule or regulation.

    

    (b) The
      Company agrees not to disclose the names, addresses or any other information
      about the Subscriber, except as required by law or court order and to satisfy
      its obligations under Article 5.

    

    6.13 The
      Subscriber represents and warrants that it has not engaged, consented to nor
      authorized any broker, finder or intermediary to act on its behalf, directly
      or
      indirectly, as a broker, finder or intermediary in connection with the
      transactions contemplated by this Agreement (other than the Placement Agents).
      The Subscriber hereby agrees to indemnify and hold harmless the Company from
      and
      against all fees, commissions or other payments owing to any such Person (other
      than the Placement Agents) acting on behalf of the Subscriber
      hereunder.

     

    6.14 This
      Agreement (including all exhibits, schedules and amendments hereto) (i)
      constitutes the entire Agreement and understandings of the parties hereto and
      supersedes all prior agreements and understandings, both written and oral,
      between the parties hereto with respect to the subject matter hereof and (ii)
      is
      not intended to confer upon any other Person other than the parties hereto
      any
      rights or remedies hereunder (except for the holders of Registrable Securities
      as set forth in Article 5).

     

    

    7. CONFIDENTIAL
      INVESTOR QUESTIONNAIRE.

    

    7.1 The
      Subscriber represents and warrants that he, she or it comes within one category
      marked below, and that for any category marked, he, she or it has truthfully
      set
      forth, where applicable, the factual basis or reason the Subscriber comes within
      that category. ALL INFORMATION IN RESPONSE TO THIS SECTION WILL BE KEPT STRICTLY
      CONFIDENTIAL except as otherwise required by law or as necessary for inclusion
      in the Registration Statement. The undersigned agrees to furnish any additional
      information which the Company deems necessary in order to verify the answers
      set
      forth below.

     

    
      	Category A ___	 	
              The
                undersigned is an individual (not a
                partnership, corporation, etc.) whose individual net worth, or joint
                net
                worth with his or her spouse, presently exceeds $1,000,000.

               

              Explanation:
                In calculating net worth you
                may include equity in personal property and real estate, including
                your
                principal residence, cash, short-term investments, stock and securities.
                Equity in personal property and real estate should be based on the
                fair
                market value of such property less debt secured by such property.

            

    

    
       

      
        	Category B ___	 	
                The
                  undersigned is an individual (not a
                  partnership, corporation, etc.) who had an income in excess of
                  $200,000 in
                  each of the two most recent years, or joint income with his or
                  her spouse
                  in excess of $300,000 in each of those years (in each case including
                  foreign income, tax exempt income and full amount of capital gains
                  and
                  losses but excluding any income of other family members and any
                  unrealized
                  capital appreciation) and has a reasonable expectation of reaching
                  the
                  same income level in the current
                  year.

              

      

    

     

    
      
        
        

      

      
        23

        
          

        

      

      
        
        

      

    

    
      
         

        
          	Category C ___	 	
                  The
                    undersigned is a director or executive
                    officer of the Company which is issuing and selling the
                    Securities.

                

        

      

      
        
           

          
            	Category D
                    ___	 	
                    The
                      undersigned is a bank; a savings and loan
                      association; insurance company; registered investment company;
                      registered
                      business development company; licensed small business investment
                      company
                      (“SBIC”); or employee benefit plan within the meaning of Title 1 of
                      ERISA
                      and (a) the investment decision is made by a plan fiduciary
                      which is
                      either a bank, savings and loan association, insurance company
                      or
                      registered investment advisor, or (b) the plan has total assets
                      in excess
                      of $5,000,000 or (c) is a self directed plan with investment
                      decisions
                      made solely by persons that are accredited investors. (describe
                      entity)

                     

                    
                      

                    

                     

                    
                      

                    

                  

          

        

        
          
             

            
              	Category E ___	 	
                      The
                        undersigned is a private business
                        development company as defined in section 202(a)(22) of the
                        Investment
                        Advisors Act of 1940. (describe entity) 

                       

                      
                        
 

                      
                        
 

                    

            

          

          
            
               

              
                	Category F ___	 	
                        The
                          undersigned is either a corporation,
                          partnership, Massachusetts business trust, or non-profit
                          organization
                          within the meaning of Section 501(c)(3) of the Internal
                          Revenue Code, in
                          each case not formed for the specific purpose of acquiring
                          the Securities
                          and with total assets in excess of $5,000,000. (describe
                          entity)

                         

                        
                          
 

                        
                          
 

                      

              

            

            
              
                
                  
                     

                    
                      	Category G ___	 	
                              The
                                undersigned is a trust with total assets in
                                excess of $5,000,000, not formed for the specific
                                purpose of acquiring the
                                Securities, where the purchase is directed by a “sophisticated investor“
                                as defined in Regulation 506(b)(2)(ii) under the
                                Securities
                                Act.

                            

                    

                  

                  
                    
                      
                        
                           

                          
                            	Category H
                                    ___	 	
                                    The
                                      undersigned is an entity (other than a
                                      trust) in which all of the equity owners are
“accredited investors” within
                                      one or more of the above categories. If relying
                                      upon this Category alone,
                                      each equity owner must complete a separate
                                      copy of this Agreement.
                                      (describe entity)

                                     

                                    
                                      
 

                                  

                          

                        

                        
                          
                            
                              
                                 

                                
                                  	Category I
                                          ___	 	The undersigned
                                          is not within any of the
                                          categories above and is therefore not an
                                          accredited
                                          investor.

                                

                              

                              
                                 

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

    The
      undersigned agrees that the undersigned will notify the Company at any time
      on
      or prior to the Closing Date in the event that the representations and
      warranties in this Agreement shall cease to be true, accurate and
      complete.

     

    
      
        
        

      

      
        24

        
          

        

      

      
        
        

      

    

     

    7.2 SUITABILITY
      (please
      answer each question)

    

    (a)
      For
      an individual Subscriber, please describe your current employment, including
      the
      company by which you are employed and its principal business:

     

    
      
        

        

        

      

    

    
      
 

    

    (b)
      For
      an individual Subscriber, please describe any college or graduate degrees held
      by you:

     

    
      

      

      

    

    

    (c)
      For
      all Subscribers, please state whether you have you participated in other
private
      placements
      before:

    

    YES_______   NO_______

    

    (d)
      If
      your answer to question (d) above was “YES”, please indicate frequency of such
      prior participation in private
      placements
      of:

     

    
      	
            	 	
              Public
Companies

            	 	
              Private
Companies

            	
              
              

            	
              Public
                or Private Biopharmaceutical
                Companies

            
	
            	 	
            	
               

            	 	
            	 
	Frequently	 	_______________	 	_______________	
            	_______________
	Occasionally	 	_______________	 	_______________	
            	_______________
	Never	 	_______________	 	_______________	
            	_______________

    

      

    (e)
      For
      individual Subscribers, do you expect your current level of income to
      significantly decrease in the foreseeable future:

    

    YES_______   NO_______

    

    (f)
      For
      trust, corporate, partnership and other institutional Subscribers, do you expect
      your total assets to significantly decrease in the foreseeable future:

    

    YES_______   NO_______

    

    (g)
      For
      all Subscribers, do you have any other investments or contingent liabilities
      which you reasonably anticipate could cause you to need sudden cash requirements
      in excess of cash readily available to you: 

    

    YES_______   NO_______

     

    
      
        
        

      

      
        25

        
          

        

      

      
        
        

      

    

     

    (h)
      For
      all Subscribers, are you familiar with the risk aspects and the non-liquidity
      of
      investments such as the securities for which you seek to subscribe?

    

    YES_______   NO_______

    

    (h)  For
      all
      Subscribers, do you understand that there is no guarantee of financial return
      on
      this investment, that an investment in the Securities is highly speculative
      and
      risky and that you run the risk of losing your entire investment?

    

    YES_______   NO_______

    

    (j)
       For
      all
      Subscribers, will you have sufficient readily available cash to fund your
      obligation to purchase Securities at the Closing pursuant to your subscription
      if and when the Closing occurs?

    

    YES_______   NO_______

    

    7.3 MANNER
      IN WHICH TITLE IS TO BE HELD.
      (circle
      one)

    

    (a)  
      Individual
      Ownership

    (b)  
      Community
      Property

    (c)  
      Joint
      Tenant with Right of  

    Survivorship
      (both parties

    must
      sign)

    (d)  
      Partnership*

    (e)  
      Tenants
      in Common

    (f)  
      Corporation*

    (g)  Trust*

    (h)  Limited
      Liability Company*

    (i)   Other

    

    *If
      Securities are being subscribed for by an entity, the attached Certificate
      of
      Signatory must also be completed.

    

    7.4 NASD
      AFFILIATION.

    

    Are
      you
      affiliated or associated with an NASD member firm (please check
      one):

    

    Yes
      _________  No
      __________

    

    If
      Yes,
      please describe:

    _________________________________________________________

    _________________________________________________________

    _________________________________________________________

    

    *If
      Subscriber is a Registered Representative with an NASD member firm, have the
      following acknowledgment signed by the appropriate party:

    

    The
      undersigned NASD member firm acknowledges receipt of the notice required by
      NASD
      Rule 3050.

    

    _________________________________

    Name
      of
      NASD Member Firm

     

    
      
        
        

      

      
        26

        
          

        

      

      
        
        

      

    

     

    By:
      ______________________________

    Authorized
      Officer

    

    Date:
      ____________________________

    

    7.5 The
      undersigned is informed of the significance to the Company of the foregoing
      representations and answers contained in the Confidential Investor Questionnaire
      contained in this Section 7 and such answers have been provided under the
      assumption that the Company will rely on them.

    

    

    

    [REMAINDER
      OF PAGE INTENTIONALLY LEFT BLANK

    SIGNATURE
      PAGE TO FOLLOW]

     

    
      
        
        

      

      
        27

        
          

        

      

      
        
        

      

    

     

    [Signature
      Page]

    

    Aggregate
      Principal Amount of Notes = $___________________________    

    (Total
      Investment)

     

    
      	 	 	 
	Signature	 	Signature (if purchasing
              jointly)
	 	 	 
	Name Typed or Printed	 	Name Typed or Printed
	 	 	 
	Entity Name	 	Entity Name
	 	 	 
	Address	 	Address
	 	 	 
	City, State and Zip Code	 	City, State and Zip Code
	 	 	 
	Telephone-Business	 	Telephone-Business
	 	 	 
	Telephone-Residence	 	Telephone-Residence
	 	 	 
	Facsimile-Business	 	Facsimile-Business
	 	 	 
	Facsimile-Residence	 	Facsimile-Residence
	 	 	 
	Email Address	 	Email Address
	 	 	 
	Tax ID # or Social Security #	 	Tax ID # or Social Security # 
	
            	 	
            
	Name
              in which securities should be issued:
              _________________________________________

    

    Dated:    
      ______________________
      ,
      2007

    

    INVESTORS:
       PLEASE
      COMPLETE THE REGISTRATION QUESTIONNAIRE ATTACHED HERETO AS APPENDIX
      A.

     

    
      
        
        

      

      
        28

        
          

        

      

      
        
        

      

    

     

    [Company
      Signature Page]

    

    

    This
      Subscription Agreement is agreed to and accepted by the Company as of _______,
      2007.

     

    
      	 	 	 
	 	VIOQUEST
              PHARMACEUTICALS, INC.
	 
 	 
 	 
 
	 	By: 	 
	 	Name:  	
              
 
	 	Title 	 

    

     

    
      
        
        

      

      
        29

        
          

        

      

      
        
        

      

    

     

    CERTIFICATE
      OF SIGNATORY

    

    (To
      be
      completed if Securities are

    being
      subscribed for by an entity)

    

    

    I,____________________________,
      am the____________________________ of __________________________________________
      (the “Entity”).

    

    I
      certify
      that I am empowered and duly authorized by the Entity to execute and carry
      out
      the terms of the Subscription Agreement and to purchase and hold the Securities,
      and certify further that the Subscription Agreement has been duly and validly
      executed on behalf of the Entity and constitutes a legal and binding obligation
      of the Entity.

    

    IN
      WITNESS WHEREOF, I have set my hand this ______ day of _________________,
      2007.

    

    
      	 	 	 
	 	
              

              (Signature)

            

    

     

    
      
        
        

      

      
        30

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