Document:

ex10a.htm

    
 

    
      AMENDED
AND RESTATED

       

      SUPPLEMENTAL
SENIOR EXECUTIVE RETIREMENT PLAN

       

      OF

       

      PROGRESS
ENERGY, 1NC.

       

      Effective
January 1, 1984

       

      (As last
amended effective January 1, 2009)

 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

      TABLE OF
CONTENTS

       

       

      Page

       

      

        ARTICLE
I

      

    

                                                                                                                                       

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          
                                            
                                              
                                                
                                                  
                                                    
                                                      
                                                        
                                                          
                                                            
                                                              
                                                                
                                                                  
                                                                    
                                                                      
                                                                        
                                                                          
                                                                            
                                                                              
                                                                                
                                                                                  
                                                                                    
                                                                                      
                                                                                        
                                                                                          
                                                                                            
                                                                                              
                                                                                                
                                                                                                  
                                                                                                    
                                                                                                      
                                                                                                        
                                                                                                          
                                                                                                            
                                                                                                              
                                                                                                                
                                                                                                                  
                                                                                                                    
                                                                                                                      
                                                                                                                        
                                                                                                                          
                                                                                                                            
                                                                                                                              
                                                                                                                                
                                                                                                                                  
                                                                                                                                    
                                                                                                                                      
                                                                                                                                        
                                                                                                                                          
                                                                                                                                            
                                                                                                                                              
                                                                                                                                                
                                                                                                                                                  
                                                                                                                                                    
                                                                                                                                                      
                                                                                                                                                        
                                                                                                                                                          
                                                                                                                                                            
                                                                                                                                                              
                                                                                                                                                                
                                                                                                                                                                  
                                                                                                                                                                    
                                                                                                                                                                      
                                                                                                                                                                        
                                                                                                                                                                          
                                                                                                                                                                            
                                                                                                                                                                              
                                                                                                                                                                                
                                                                                                                                                                                  
                                                                                                                                                                                    
                                                                                                                                                                                      
                                                                                                                                                                                        
                                                                                                                                                                                          
                                                                                                                                                                                            
                                                                                                                                                                                              
                                                                                                                                                                                                
                                                                                                                                                                                                  
                                                                                                                                                                                                    
                                                                                                                                                                                                      
                                                                                                                                                                                                        
                                                                                                                                                                                                          
                                                                                                                                                                                                            
                                                                                                                                                                                                              
                                                                                                                                                                                                                
                                                                                                                                                                                                                  
                                                                                                                                                                                                                    
                                                                                                                                                                                                                      
                                                                                                                                                                                                                        
                                                                                                                                                                                                                          
                                                                                                                                                                                                                            
                                                                                                                                                                                                                              
                                                                                                                                                                                                                                
                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                    
                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                            
                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                    
                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                            
                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                                    
                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                            
                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                                                    
                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                                            
                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                                                                    
                                                                                                                                                                                                                                                                                                      	STATEMENT
      OF PURPOSE	
                                                                                                                                                                                                                                                                                                              1

                                                                                                                                                                                                                                                                                                            
	 
	
                                                                                                                                                                                                                                                                                                              ARTICLE
      II

                                                                                                                                                                                                                                                                                                            
	DEFINITIONS	
                                                                                                                                                                                                                                                                                                              2

                                                                                                                                                                                                                                                                                                            
	 2.1	
                                                                                                                                                                                                                                                                                                              Terms

                                                                                                                                                                                                                                                                                                            	  2
	 2.2	
                                                                                                                                                                                                                                                                                                              Affiliated
      Company

                                                                                                                                                                                                                                                                                                            	 
      2
	 2.3 	
                                                                                                                                                                                                                                                                                                              

                                                                                                                                                                                                                                                                                                                Assumed
      Deferred Vested Pension Benefit

                                                                                                                                                                                                                                                                                                              

                                                                                                                                                                                                                                                                                                            	 
       
      2
	 2.4 	
                                                                                                                                                                                                                                                                                                              Assumed
      Early Retirement Pension Benefit

                                                                                                                                                                                                                                                                                                            	    
      2
	 2.5 	
                                                                                                                                                                                                                                                                                                              Assumed
      Normal Retirement Pension Benfit

                                                                                                                                                                                                                                                                                                            	3
	 2.6 	
                                                                                                                                                                                                                                                                                                              Board

                                                                                                                                                                                                                                                                                                            	3
	 2.7 	
                                                                                                                                                                                                                                                                                                              Change
      in Control

                                                                                                                                                                                                                                                                                                            	 3
	 2.8 	
                                                                                                                                                                                                                                                                                                              Committee

                                                                                                                                                                                                                                                                                                            	  5
	 2.9 	
                                                                                                                                                                                                                                                                                                              Company

                                                                                                                                                                                                                                                                                                            	  5
	 2.10 	
                                                                                                                                                                                                                                                                                                              Continuing
      Director

                                                                                                                                                                                                                                                                                                            	
                                                                                                                                                                                                                                                                                                               
      5

                                                                                                                                                                                                                                                                                                            
	 2.11 	
                                                                                                                                                                                                                                                                                                              Designated
      Beneficiary

                                                                                                                                                                                                                                                                                                            	  5
	 2.12 	
                                                                                                                                                                                                                                                                                                              Early
      Retirement Date

                                                                                                                                                                                                                                                                                                            	  6
	 2.13 	
                                                                                                                                                                                                                                                                                                              Eligible
      Spouse

                                                                                                                                                                                                                                                                                                            	6
	 2.14 	
                                                                                                                                                                                                                                                                                                              Final
      Average Salary

                                                                                                                                                                                                                                                                                                            	6
	 2.15 	
                                                                                                                                                                                                                                                                                                              Normal
      Retirement Date

                                                                                                                                                                                                                                                                                                            	  7
	 2.16 	
                                                                                                                                                                                                                                                                                                              Participant

                                                                                                                                                                                                                                                                                                            	  7
	 2.17 	
                                                                                                                                                                                                                                                                                                              Pension

                                                                                                                                                                                                                                                                                                            	  7
	 2.18 	
                                                                                                                                                                                                                                                                                                              Plan

                                                                                                                                                                                                                                                                                                            	7
	 2.19 	
                                                                                                                                                                                                                                                                                                              Salary 

                                                                                                                                                                                                                                                                                                            	 
       
      7
	 2.20 	
                                                                                                                                                                                                                                                                                                              Separation
      of Service

                                                                                                                                                                                                                                                                                                            	8
	 2.21 	
                                                                                                                                                                                                                                                                                                              Service

                                                                                                                                                                                                                                                                                                            	8
	 2.22	
                                                                                                                                                                                                                                                                                                              Social
      Security Benefit

                                                                                                                                                                                                                                                                                                            	8
	 2.23 	
                                                                                                                                                                                                                                                                                                              Spouse's
      Pension

                                                                                                                                                                                                                                                                                                            	9
	 2.24 	
                                                                                                                                                                                                                                                                                                              Target
      Early Retirement Benefit

                                                                                                                                                                                                                                                                                                            	  9
	 2.25 	
                                                                                                                                                                                                                                                                                                              Target
      Normal Retirement Benefit

                                                                                                                                                                                                                                                                                                            	  10
	 2.26	
                                                                                                                                                                                                                                                                                                              Target
      Pre-Retirement Death Benefit

                                                                                                                                                                                                                                                                                                            	 
       
      10
	 2.27 	
                                                                                                                                                                                                                                                                                                              Target
      Severance Benefit

                                                                                                                                                                                                                                                                                                            	
                                                                                                                                                                                                                                                                                                              10

                                                                                                                                                                                                                                                                                                            
	 
	
                                                                                                                                                                                                                                                                                                              ARTICLE
      III 

                                                                                                                                                                                                                                                                                                            
	ELIGIBILTY
      AND PARTICIPATION	11
	 3.1 	
                                                                                                                                                                                                                                                                                                              Eligibility

                                                                                                                                                                                                                                                                                                            	11
	 3.2 	
                                                                                                                                                                                                                                                                                                              Date
      of Participation

                                                                                                                                                                                                                                                                                                            	11
	 3.3 	
                                                                                                                                                                                                                                                                                                              Duration
      of Participation

                                                                                                                                                                                                                                                                                                            	11
	 	 	 	 
	
                                                                                                                                                                                                                                                                                                               

                                                                                                                                                                                                                                                                                                                ARTICLE
      IV

                                                                                                                                                                                                                                                                                                              

                                                                                                                                                                                                                                                                                                            
	RETIREMENT
      BENEFITS	11
	 4.1 	
                                                                                                                                                                                                                                                                                                              Normal
      Retirement Benefit

                                                                                                                                                                                                                                                                                                            	
                                                                                                                                                                                                                                                                                                              11

                                                                                                                                                                                                                                                                                                            
	 4.2 	
                                                                                                                                                                                                                                                                                                              Early
      Retirement Benefit

                                                                                                                                                                                                                                                                                                            	13
	 4.3 	
                                                                                                                                                                                                                                                                                                              Surviving
      Spouse Benefit

                                                                                                                                                                                                                                                                                                            	15
	 4.4 	
                                                                                                                                                                                                                                                                                                              Re-employment
      of Retired Participant

                                                                                                                                                                                                                                                                                                            	15
	 
      

                                                                                                                                                                                                                                                                                                              ARTICLE
      V

                                                                                                                                                                                                                                                                                                            
	 	
                                                                                                                                                                                                                                                                                                            	
                                                                                                                                                                                                                                                                                                            	
                                                                                                                                                                                                                                                                                                               

                                                                                                                                                                                                                                                                                                            
	PRE-RETIREMENT
      DEATH BENEFITS	15
	 5.1 	
                                                                                                                                                                                                                                                                                                              Eligibility

                                                                                                                                                                                                                                                                                                            	15
	 5.2 	
                                                                                                                                                                                                                                                                                                              Amount

                                                                                                                                                                                                                                                                                                            	16
	 5.3 	
                                                                                                                                                                                                                                                                                                              Alternative
      Benefit

                                                                                                                                                                                                                                                                                                            	16
	 5.4	
                                                                                                                                                                                                                                                                                                              Commencement
      and Duration

                                                                                                                                                                                                                                                                                                            	16
	 	 	 	 
	 
      ARTICLE
      VI
	SEVERANCE
      BENEFITS	16
	 6.1	
                                                                                                                                                                                                                                                                                                              Eligibility

                                                                                                                                                                                                                                                                                                            	16
	 6.2	
                                                                                                                                                                                                                                                                                                              Amount

                                                                                                                                                                                                                                                                                                            	16
	 6.3	
                                                                                                                                                                                                                                                                                                              Commencement
      and Duration

                                                                                                                                                                                                                                                                                                            	17
	 6.4	
                                                                                                                                                                                                                                                                                                              Surviving
      Spouse Benefit

                                                                                                                                                                                                                                                                                                            	18
	 	 	 	 
	 
      ARTICLE
      VII
	ADMINISTRATION	19
	 7.1	
                                                                                                                                                                                                                                                                                                              Committee

                                                                                                                                                                                                                                                                                                            	19
	 7.2	
                                                                                                                                                                                                                                                                                                              Voting

                                                                                                                                                                                                                                                                                                            	19
	 7.3	
                                                                                                                                                                                                                                                                                                              Records

                                                                                                                                                                                                                                                                                                            	
                                                                                                                                                                                                                                                                                                              19

                                                                                                                                                                                                                                                                                                            
	 7.4	
                                                                                                                                                                                                                                                                                                              Liability

                                                                                                                                                                                                                                                                                                            	19
	 7.5	
                                                                                                                                                                                                                                                                                                              Expenses

                                                                                                                                                                                                                                                                                                            	
                                                                                                                                                                                                                                                                                                              20 

                                                                                                                                                                                                                                                                                                            
	 	 
      
	
                                                                                                                                                                                                                                                                                                              ARTICLE
      VIII

                                                                                                                                                                                                                                                                                                            
	AMENDEMENT
      AND TERMINATION	
                                                                                                                                                                                                                                                                                                              20

                                                                                                                                                                                                                                                                                                            
	 	 
	
                                                                                                                                                                                                                                                                                                              ARTICLE
      IX

                                                                                                                                                                                                                                                                                                            
	MISCELLANEOUS	
                                                                                                                                                                                                                                                                                                              20

                                                                                                                                                                                                                                                                                                            
	 9.1	
                                                                                                                                                                                                                                                                                                              Non-Alienation
      Benefits

                                                                                                                                                                                                                                                                                                            	
                                                                                                                                                                                                                                                                                                               
      20 

                                                                                                                                                                                                                                                                                                            
	 9.2	
                                                                                                                                                                                                                                                                                                              No
      Trust Created 

                                                                                                                                                                                                                                                                                                            	
                                                                                                                                                                                                                                                                                                              21

                                                                                                                                                                                                                                                                                                            
	 9.3	
                                                                                                                                                                                                                                                                                                              No
      Employee Agreement 

                                                                                                                                                                                                                                                                                                            	
                                                                                                                                                                                                                                                                                                              21 

                                                                                                                                                                                                                                                                                                            
	 9.4	
                                                                                                                                                                                                                                                                                                              Binding
      Effect 

                                                                                                                                                                                                                                                                                                            	
                                                                                                                                                                                                                                                                                                              21 

                                                                                                                                                                                                                                                                                                            
	 9.5	
                                                                                                                                                                                                                                                                                                              Suicide 

                                                                                                                                                                                                                                                                                                            	
                                                                                                                                                                                                                                                                                                              22 

                                                                                                                                                                                                                                                                                                            
	 9.6	
                                                                                                                                                                                                                                                                                                              Claims
      for Benefits 

                                                                                                                                                                                                                                                                                                            	
                                                                                                                                                                                                                                                                                                              22

                                                                                                                                                                                                                                                                                                            
	 9.7	
                                                                                                                                                                                                                                                                                                              Entire
      Plan 

                                                                                                                                                                                                                                                                                                            	
                                                                                                                                                                                                                                                                                                              23 

                                                                                                                                                                                                                                                                                                            
	 9.8	
                                                                                                                                                                                                                                                                                                              Change
      in Control 

                                                                                                                                                                                                                                                                                                            	
                                                                                                                                                                                                                                                                                                              23 

                                                                                                                                                                                                                                                                                                            
	 9.9	
                                                                                                                                                                                                                                                                                                              Acceleration
      of Payment

                                                                                                                                                                                                                                                                                                            	
                                                                                                                                                                                                                                                                                                              23 

                                                                                                                                                                                                                                                                                                            
	 	 	 
	
                                                                                                                                                                                                                                                                                                              ARTICLE
      X

                                                                                                                                                                                                                                                                                                            
	CONSTRUCTION	
                                                                                                                                                                                                                                                                                                              23 

                                                                                                                                                                                                                                                                                                            
	 10.1	
                                                                                                                                                                                                                                                                                                              Governing
      Law 

                                                                                                                                                                                                                                                                                                            	
                                                                                                                                                                                                                                                                                                              23 

                                                                                                                                                                                                                                                                                                            
	 10.2	
                                                                                                                                                                                                                                                                                                              Gender

                                                                                                                                                                                                                                                                                                            	
                                                                                                                                                                                                                                                                                                              23 

                                                                                                                                                                                                                                                                                                            
	 10.3	
                                                                                                                                                                                                                                                                                                              Headings,
      etc. 

                                                                                                                                                                                                                                                                                                            	
                                                                                                                                                                                                                                                                                                              23 

                                                                                                                                                                                                                                                                                                            
	 10.4	
                                                                                                                                                                                                                                                                                                              Action

                                                                                                                                                                                                                                                                                                            	
                                                                                                                                                                                                                                                                                                              24 

                                                                                                                                                                                                                                                                                                            

                                                                                                                                                                                                                                                                                                    

                                                                                                                                                                                                                                                                                                  

                                                                                                                                                                                                                                                                                                

                                                                                                                                                                                                                                                                                              

                                                                                                                                                                                                                                                                                            

                                                                                                                                                                                                                                                                                          

                                                                                                                                                                                                                                                                                        

                                                                                                                                                                                                                                                                                      

                                                                                                                                                                                                                                                                                    

                                                                                                                                                                                                                                                                                  

                                                                                                                                                                                                                                                                                

                                                                                                                                                                                                                                                                              

                                                                                                                                                                                                                                                                            

                                                                                                                                                                                                                                                                          

                                                                                                                                                                                                                                                                        

                                                                                                                                                                                                                                                                      

                                                                                                                                                                                                                                                                    

                                                                                                                                                                                                                                                                  

                                                                                                                                                                                                                                                                

                                                                                                                                                                                                                                                              

                                                                                                                                                                                                                                                            

                                                                                                                                                                                                                                                          

                                                                                                                                                                                                                                                        

                                                                                                                                                                                                                                                      

                                                                                                                                                                                                                                                    

                                                                                                                                                                                                                                                  

                                                                                                                                                                                                                                                

                                                                                                                                                                                                                                              

                                                                                                                                                                                                                                            

                                                                                                                                                                                                                                          

                                                                                                                                                                                                                                        

                                                                                                                                                                                                                                      

                                                                                                                                                                                                                                    

                                                                                                                                                                                                                                  

                                                                                                                                                                                                                                

                                                                                                                                                                                                                              

                                                                                                                                                                                                                            

                                                                                                                                                                                                                          

                                                                                                                                                                                                                        

                                                                                                                                                                                                                      

                                                                                                                                                                                                                    

                                                                                                                                                                                                                  

                                                                                                                                                                                                                

                                                                                                                                                                                                              

                                                                                                                                                                                                            

                                                                                                                                                                                                          

                                                                                                                                                                                                        

                                                                                                                                                                                                      

                                                                                                                                                                                                    

                                                                                                                                                                                                  

                                                                                                                                                                                                

                                                                                                                                                                                              

                                                                                                                                                                                            

                                                                                                                                                                                          

                                                                                                                                                                                        

                                                                                                                                                                                      

                                                                                                                                                                                    

                                                                                                                                                                                  

                                                                                                                                                                                

                                                                                                                                                                              

                                                                                                                                                                            

                                                                                                                                                                          

                                                                                                                                                                        

                                                                                                                                                                      

                                                                                                                                                                    

                                                                                                                                                                  

                                                                                                                                                                

                                                                                                                                                              

                                                                                                                                                            

                                                                                                                                                          

                                                                                                                                                        

                                                                                                                                                      

                                                                                                                                                    

                                                                                                                                                  

                                                                                                                                                

                                                                                                                                              

                                                                                                                                            

                                                                                                                                          

                                                                                                                                        

                                                                                                                                      

                                                                                                                                    

                                                                                                                                  

                                                                                                                                

                                                                                                                              

                                                                                                                            

                                                                                                                          

                                                                                                                        

                                                                                                                      

                                                                                                                    

                                                                                                                  

                                                                                                                

                                                                                                              

                                                                                                            

                                                                                                          

                                                                                                        

                                                                                                      

                                                                                                    

                                                                                                  

                                                                                                

                                                                                              

                                                                                            

                                                                                          

                                                                                        

                                                                                      

                                                                                    

                                                                                  

                                                                                

                                                                              

                                                                            

                                                                          

                                                                        

                                                                      

                                                                    

                                                                  

                                                                

                                                              

                                                            

                                                          

                                                        

                                                      

                                                    

                                                  

                                                

                                              

                                            

                                          

                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

     

    ARTICLE
I

     

     

    

     

     

    STATEMENT
OF PURPOSE

     

    This Plan
is designed and implemented for the purpose of enhancing the earnings and growth
of Progress Energy, Inc. (the "Sponsor") by providing to the limited group of
senior management employees largely responsible for such earnings and long-term
growth deferred compensation in the form of supplemental retirement income
benefits, thereby increasing the incentive of such key senior management
employees to make the Sponsor and its Affiliated Companies more profitable. The
benefits are normally payable to Participants upon retirement or death. The
terms of the benefits operate in conjunction with the Participant's benefits
payable under the Progress Energy Pension Plan and are designed to supplement
such pension plan benefits and provide the Participant with additional financial
security upon retirement or death.

     

    The Plan
is intended to constitute a nonqualified deferred compensation plan that
complies with the provisions of Section 409A of the Internal Revenue Code of
1986, as amended (the "Code"). Accordingly, the Plan shall be construed in
accordance with Section 409A of the Code, regulations promulgated thereunder and
related guidance ("Section 409A"), notwithstanding any provision of the Plan to
the contrary. The Plan is further intended to be an unfunded retirement plan for
a select group of management or highly compensated employees within the meaning
of Title I of the Employee Retirement Income Security Act of 1974, as
amended.

     

    The
Sponsor hereby restates and amends the Plan effective January 1,
2009.  The terms of the amended and restated Plan shall govern the
payment of any benefits commencing on and after January 1, 2009.

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    ARTICLE
II

     

     

    

     

     

    DEFINITIONS

     

    2.1 Terms.  Unless
otherwise clearly required by the context, the terms used herein shall have the
following meaning. Capitalized terms that are not defined below shall have the
meaning ascribed to them in the Retirement Plan.

     

    2.2 Affiliated
Company.  Shall mean any corporation or other entity that is
required to be aggregated with the Sponsor pursuant to Section 414(b), (c), (m),
or (o) of the Code, but only to the extent required.

     

    2.3 Assumed Deferred Vested
Pension Benefit.  Shall mean the monthly benefit of the
deferred vested Pension to commence on his Normal Retirement Date payable in the
form of an annuity to which a separated Participant would be entitled under the
Retirement Plan, calculated with the following assumptions based on such
Participant's marital status at the time benefits hereunder
commence:

     

    (a) In the
case of a Participant with an Eligible Spouse, in the form of a 50% Qualified
Joint and Survivor Annuity as provided in the Retirement Plan.

    (b) In the
case of a Participant without an Eligible Spouse, in the form of a Single Life
Annuity as provided in the Retirement Plan.

    (c) Without
regard to any other benefit payment option under the Retirement
Plan.

     

    2.4 Assumed Early Retirement
Pension Benefit.  Shall mean the monthly benefit of the normal
retirement Pension payable in the form of an annuity to which a Participant
would be entitled under the Retirement Plan at his Normal Retirement Date, based
upon his projected years of Service at his Normal Retirement Date and calculated
with the following assumptions based upon his marital status at the time
benefits hereunder commence:

     

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    (a) In the
case of a Participant with an Eligible Spouse, in the form of a 50% Qualified
Joint and Survivor Annuity as provided in the Retirement Plan.

    (b) In the
case of a Participant without an Eligible Spouse, in the form of a Single Life
Annuity as provided in the Retirement Plan.

    (c) Without
regard to any other benefit payment option under the Retirement
Plan.

     

    2.5 Assumed Normal Retirement
Pension Benefit.  Shall mean the monthly benefit of the normal
retirement Pension payable in the form of an annuity to which a Participant
would be entitled under the Retirement Plan if he retired at his Normal
Retirement Date, calculated with the following assumptions based on his marital
status at the time benefits hereunder commence:

     

    (a) In the
case of a Participant with an Eligible Spouse, in the form of a 50% Qualified
Joint and Survivor Annuity as provided in the Retirement Plan.

    (b) In the
case of a Participant without an Eligible Spouse, in the form of a Single Life
Annuity as provided in the Retirement Plan.

    (c) Without
regard to any other benefit payment option under the Retirement
Plan.

     

    2.6 Board.  Shall
mean the Board of Directors of Sponsor.

     

    2.7 Change in
Control.  Shall occur on the earliest of the following
dates:

     

    (a) the date
any person or group of persons (within the meaning of Section 13(d) or 14(d) of
the Securities Exchange Act of 1934), excluding employee benefit plans of the
Sponsor, becomes, directly or indirectly, the "beneficial owner" (as defined in
Rule 13d-3 promulgated under the Securities Act of 1934) of securities of the
Sponsor representing twenty-five percent (25%) or more of the combined voting
power of the Sponsor's then outstanding

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    securities
(excluding the acquisition of securities of the Sponsor by an entity at least
eighty percent (80%) of the outstanding voting securities of which are, directly
or indirectly, beneficially owned by the Sponsor); or

    (b) the date
of consummation of a tender offer for the ownership of more than fifty percent
(50%) of the Sponsor's then outstanding voting securities; or

    (c) the date
of consummation of a merger, share exchange or consolidation of the Sponsor with
any other corporation or entity regardless of which entity is the survivor,
other than a merger, share exchange or consolidation which would result in the
voting securities of the Sponsor outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or being converted into
voting securities of the surviving or acquiring entity) more than sixty percent
(60%) of the combined voting power of the voting securities of the Sponsor or
such surviving or acquiring entity outstanding immediately after such merger or
consolidation; or

    (d) the date,
when as a result of a tender offer or exchange offer for the purchase of
securities of the Sponsor (other than such an offer by the Sponsor for its own
securities), or as a result of a proxy contest, merger, share exchange,
consolidation or sale of assets, or as a result of any combination of the
foregoing, individuals who are Continuing Directors cease for any reason to
constitute at least two-thirds (2/3) of the members of the Board;
or

    (e) the date
the shareholders of the Sponsor approve a plan of complete liquidation or
winding-up of the Sponsor or an agreement for the sale or disposition by the
Sponsor of all or substantially all of the Sponsor's assets; or the date of any
event which the Board determines should constitute a Change in
Control.

     

    
      
        
        

      

      
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    A Change
in Control shall not be deemed to have occurred until a majority of the members
of the Board receive written certification from the Committee that such event
has occurred. Any determination that such an event has occurred shall, if made
in good faith on the basis of information available at that time, be conclusive
and binding on the Committee, the Sponsor, the Company, the Participants and
their beneficiaries for all purposes of the Plan,

     

    2.8 Committee.  Shall
mean the Committee on Organization and Compensation of the Board.

     

    2.9 Company.  Shall
mean Progress Energy, Inc. or any successor to it in the ownership of
substantially all of its assets, and each Affiliated Company that, with the
consent of the Board adopts the Plan and is included in Appendix A, as in effect
from time to time. Appendix A shall set forth any limitations imposed on
employees of Affiliated Companies that adopt the Plan, including limitations on
"Service," notwithstanding any provision of the Plan to the
contrary.

     

    2.10 Continuing
Director.  Shall mean the members of the Board as of January 1,
2009; provided, however, that any person becoming a Director subsequent to such
date whose election or nomination for election was supported by seventy-live
percent (75%) or more of the Directors who then comprised Continuing Directors
shall be considered to be a Continuing Director.

     

    2.11 Designated
Beneficiary.  Shall mean one or more beneficiaries as
designated by a Participant in writing delivered to the Committee. In the event
no such written designation is made by a Participant or if such beneficiary
shall not be living or in existence at the time for commencement of payment to
any Designated Beneficiary under the Plan, the Participant shall be deemed to
have designated his estate as such beneficiary.

     

    
      
        
        

      

      
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    2.12 Early Retirement
Date.  Shall mean the date on which a Participant who qualifies
for the early retirement benefit of Section 4.02 hereof retires from the employ
of the Company and its affiliated entities.

     

    2.13 Eligible
Spouse.  Shall mean the spouse of a Participant who, under the
laws of the State where the marriage was contracted, is deemed married to that
Participant on the date on which the payments from this Plan are to begin to the
Participant, except that for purposes of Articles V and VI hereof, Eligible
Spouse shall mean a person who is married to a Participant for a period of at
least one year prior to his death.

     

    2.14 Final Average
Salary.  Shall mean a Participant's average monthly Salary (as
defined in Section 2.20 hereof) during the 36 completed calendar months of
highest compensation within the 120-month period immediately preceding the
earliest to occur of the Participant's death, Separation from Service, Early
Retirement Date, or Normal Retirement Date, whichever is applicable. Provided,
however, if a Participant becomes entitled to a benefit hereunder while under a
period of long-term disability under the Sponsor's Group Insurance Plan, Final
Average Salary shall be determined for the 12 calendar months immediately
preceding the commencement of such period of long-term disability. Provided,
further, in determining average monthly Salary (i) annual incentives and other
similar payments shall be deemed received in twelve (12) equal payments
beginning with the eleventh preceding month and ending with the month in which
actual payment is made, and (ii) amounts of compensation deferred under any
deferred compensation plan or arrangement shall be deemed received in the months
such payments would have been received assuming no deferral had occurred. For
years of Service granted under the terms of a written employment agreement as
provided under Section 

     

    
      
        
        

      

      
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    2.22,
Salary during each such month is deemed to be zero dollars ($0.00) for purposes
of calculating Final Average Salary.

     

    2.15 Normal Retirement
Date.  Shall mean the first day of the calendar month
coinciding with or next following the Participant's 65th birthday.

     

    2.16 Participant.  Shall
mean an employee of the Company who is eligible and is participating in this
Plan in accordance with Article III hereof.

     

    2.17 Pension.  Shall
mean a level monthly annuity which is payable under the Retirement Plan as of
the Benefit Commencement Date if the Participant elected an annuity form of
benefit.

     

    2.18 Plan.  Shall
mean the "Supplemental Senior Executive Retirement Plan of Progress Energy,
Inc." as contained herein and as it may be amended from time to time hereafter.
2.19 Retirement Plan. Shall mean the "Progress Energy Pension Plan" (as amended
effective January 1, 2002) as it may be amended from time to time
thereafter.

     

    2.19 Salary.  Shall
mean the sum of:

    (1) The
annual base compensation paid by the Company to a Participant, and

    (2) annual
cash awards made under incentive compensation programs excluding, however, any
payment made under the Sponsor's Long-Term Compensation Program or the Sponsor's
Equity Incentive Plans, and

    (3) amounts
of annual compensation deferred under any deferred compensation plan or
arrangement (including, without limitation, the "Executive Deferred Compensation
Plan," the "Deferred Compensation Plan for Key Management Employees of Progress
Energy, Inc.," the "Progress Energy, Inc. Management Deferred 

     

     

    
      
        
        

      

      
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    Compensation
Plan" and the "Progress Energy 401(k) Savings and Stock Ownership Plan") and
which, but for the deferral, would have been reflected in Internal Revenue
Service Form W-2.

     

    2.20 Separation from
Service.  Shall mean the date the Participant leaves the employ
of the Company and all affiliated entities other than on account of his death, a
period of long-term disability under the Company's long-term disability plan, or
retirement at either his Early Retirement Date or upon or after his Normal
Retirement Date. Separation from Service under this Section 2.21 must also be
"separation from service," as defined for purposes of Section 409A.

     

    2.21 Service.  Shall
have the same meaning as "Eligibility Service," determined as provided in
Sections 2.02 and 3.01 of the Retirement Plan, plus any additional years of
service that may be granted to the Participant in connection with this Plan
under the terms of a written employment agreement (or any amendment thereto)
entered into between the Company and the Participant.

     

    2.22 Social Security
Benefit.  Means the monthly amount of benefit which a
Participant is or would be entitled to receive at age 65 as a primary insurance
amount under the federal Social Security Act, as amended, whether or not he
applies for such benefit, and even though he may lose part or all of such
benefit through delay in applying for it, by making application prior to age 65
for a reduced benefit, by entering into covered employment, or for any other
reason. The amount of such Social Security Benefit to which the Participant is
or would be entitled shall be estimated by the Committee for the purposes of
this Plan as of the January 1 of the year in which his Separation from Service
or retirement occurs on the following basis:

     

     

    
      
        
        

      

      
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    (a) For a
Participant entitled to a normal retirement benefit, on the basis of the federal
Social Security Act as in effect on the January 1 coincident with or next
preceding his Normal Retirement Date (regardless of any retroactive changes made
by legislation enacted after said January 1);

    (b) For a
Participant entitled to an early retirement benefit, on the basis of the federal
Social Security Act as in effect on the January 1 coincident with or next
preceding his Early Retirement Date (regardless of any retroactive change made
by legislation enacted after said January 1), assuming that his employment, and
Salary in effect at his Early Retirement Date, continued to age 65;
or

    (c) For a
Participant entitled to a severance benefit, on the basis of the federal Social
Security Act as in effect on the January 1 coincident with or next preceding his
Separation from Service (regardless of any retroactive change made by
legislation enacted after said January 1), assuming that his employment, and
Salary in effect at his Separation from Service, continued to age
65.

     

    For
purposes of the calculations required under paragraphs (a) and (b) above, if a
Participant is disabled under a period of long-term disability under the
Company's Group Insurance Plan, said Social Security Benefit shall be calculated
as if his Salary in effect at the commencement of such period of long-term
disability continued to age 65.

     

    2.23 Spouse's
Pension.  Shall mean the actual monthly benefit payable to an
Eligible Spouse under the Retirement Plan, assuming the Eligible Spouse elected
a 50% Joint and Survivor Annuity form of benefit.

     

    2.24 Target Early Retirement
Benefit.  Shall mean an amount equal to a Participant's Final
Average Salary determined at his Early Retirement Date multiplied by two and
one-quarter 

     

    
      
        
        

      

      
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    percent
(2.25%) for each projected year of Service at his Normal Retirement Date up to a
maximum of sixty-two percent (62%).  Notwithstanding the foregoing,
with respect to a Participant who first entered the Plan as a Participant prior
to January 1, 2009, the Target Early Retirement Benefit shall be determined by
multiplying the Participant's Final Average Salary by four percent (4%) for each
projected year of Service at his Normal Retirement Date up to a maximum of
sixty-two percent (62%).

     

    2.25 Target Normal Retirement
Benefit.  Shall mean an amount equal to a Participant's Final
Average Salary determined at his Normal Retirement Date multiplied by two and
one-quarter percent (2.25%) for each projected year of Service at his Normal
Retirement Date up to a maximum of sixty-two percent
(62%).  Notwithstanding the foregoing, with respect to a Participant
who first entered the Plan as a Participant prior to January 1, 2009, the Target
Normal Retirement Benefit shall be determined by multiplying the Participant's
Final Average Salary by four percent (4%) for each projected year of Service at
his Normal Retirement Date up to a maximum of sixty-two percent
(62%).

     

    2.26 Target Pre-Retirement Death
Benefit.  Shall mean an amount equal to a deceased
Participant's Final Average Salary determined at his death multiplied by two and
one-quarter percent (2.25%) for each year of Service at his death up to a
maximum of sixty-two percent (62%).  Notwithstanding the foregoing,
with respect to a Participant who first entered the Plan as a Participant prior
to January 1, 2009, the Target Pre-Retirement Death Benefit shall be determined
by multiplying the Participant's Final Average Salary by four percent (4%) for
each year of Service at his death up to a maximum of sixty-two percent
(62%).

     

    2.27 Target Severance
Benefit.  Shall mean an amount equal to a Participant's Final
Average Salary determined at his Separation from Service multiplied by two and
one-quarter 

     

    
      
        
        

      

      
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    percent
(2.25%) for each year of Service at his Separation from Service up to a maximum
of sixty-two percent (62%).  Notwithstanding the foregoing, with
respect to a Participant who first entered the Plan as a Participant prior to
January 1, 2009, the Target Severance Benefit shall be determined by multiplying
the Participant's Final Average Salary by four percent (4%) for each year of
Service at his Separation from Service up to a maximum of sixty-two percent
(62%).

     

    ARTICLE
III

     

     

    

     

     

    ELIGIBILITY
AND PARTICIPATION

     

    3.1 Eligibility.  Any
executive employee of a Company who has served on the Senior Management
Committee of the Sponsor and who has been a Senior Vice President or above for a
minimum period of three (3) years and who has at least ten (10) years of Service
shall be eligible to participate in this Plan.

     

    3.2 Date of
Participation.  Each executive who is eligible to become a
Participant under Section 3.01 shall become a Participant on the first day of
the month following the month in which he is first eligible to
participate.

     

    3.3 Duration of
Participation.  Each executive who becomes a Participant shall
continue to be a Participant until the termination of his employment with the
Company or, if later, the date he is no longer entitled to benefits under this
Plan.

     

    ARTICLE
IV

     

     

    

     

     

    RETIREMENT
BENEFITS

     

    4.1 Normal Retirement
Benefit.

    (a) Eligibility.  A
Participant whose employment with the Company or any Affiliated Company
terminates on or after his Normal Retirement Date and whose termination is

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    "separation
from service," as defined for purposes of Section 409A, shall be eligible for
the normal retirement benefit described in this Section 4.01.

    (b) Amount and
Form.  The monthly payment hereunder shall be in the form of a
Single Life Annuity if the Participant has no Eligible Spouse and in the form of
a 50% Qualified Joint and Survivor Annuity if the Participant has an Eligible
Spouse. The eligible Participant's normal retirement benefit shall be a monthly
amount equal to his Target Normal Retirement Benefit reduced by the sum of (1)
his Assumed Normal Retirement Pension Benefit and (2) his Social Security
Benefit.

    (c) Commencement and
Duration.  Monthly normal retirement benefit payments shall
commence within sixty days of the first day of the calendar month next following
the retirement of the Participant, and shall continue in monthly installments
thereafter ending with a payment for the month in which such eligible
Participant's death occurs, unless the benefit is being paid in the form of a
Qualified Joint and Survivor Annuity. in which case the survivor benefit shall
be paid to the Eligible Spouse, if living, for his or her life. If at the time
of commencement of payment such eligible Participant does not have an Eligible
Spouse the monthly benefit payments shall be guaranteed for one hundred twenty
(120) monthly payments with any such guaranteed payments remaining at such
Participant's death payable to his Designated Beneficiary.

    (d) Key
Employees.  Notwithstanding the foregoing, payments with
respect to a Participant who is a key employee (as defined in Section 4I6(i) of
the Code but determined without regard to paragraph 5 thereof or the 50 employee
limit on the number of officers treated as key employees) shall not begin
earlier than the date that is six months after the date of termination of the
Participant (or, if earlier, the date of death). In the event payments to the

     

    
      
        
        

      

      
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    Participant
under this Plan shall be delayed for six months following the termination of the
Participant as provided in this paragraph (d), the Participant (if then living)
shall receive a lump sum payment as of the first day of the seventh month
following the termination of employment in an amount equal to six times the
monthly payment due to the Participant under this Plan, plus the monthly payment
then due to the Participant. If the Participant dies following termination of
employment but prior to the commencement of payments under this paragraph (d),
the Participant's surviving Eligible Spouse, if any, or Designated Beneficiary
shall be entitled to receive the same death benefit payable in the event the
Participant had commenced receiving benefit payments as of the first day of the
month prior to his death.

     

    4.2 Early Retirement
Benefit.

    (a) Eligibility.  A
Participant whose employment with the Company or any Affiliated Company
terminates upon or after his attainment of age fifty-five (55) with at least
fifteen (15) years of Service (except for purposes of calculating benefits
payable under Article V and Article VI herein below, as applicable) but prior to
his Normal Retirement Date, shall be eligible for the early retirement benefit
described in this Section 4.02, provided that such termination of employment is
"separation from service," as defined for purposes of Section 409A.

    (b) Amount and
Form.  The monthly payment hereunder shall be in the form of a
Single Life Annuity if the Participant has no Eligible Spouse and in the form of
a 50% Qualified Joint and Survivor Annuity if the Participant has an Eligible
Spouse. The eligible Participant's early retirement benefit shall he a monthly
amount equal to his Target Early Retirement Benefit reduced by the sum of (1)
his Assumed Early Retirement Pension Benefit and 

     

    
      
        
        

      

      
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    (2) his
Social Security Benefit; provided, however, such benefit will be reduced, where
applicable, by the following:

    (i) The
amount of 2.5% for each year that such benefit is received prior to his Normal
Retirement Date, and

    (ii) If such
eligible Participant's projected years of Service at his Normal Retirement Date
are less than fifteen (15), his Target Early Retirement Benefit and his Assumed
Early Retirement Pension Benefit shall be calculated based upon his actual years
of Service at his Early Retirement Date rather than upon his projected years of
Service at his Normal Retirement Date.

    (c) Commencement
and Duration. Monthly early retirement benefit payments shall commence within
sixty days of the first day of the calendar month next following the retirement
of the Participant, and shall continue in monthly installments thereafter ending
with a payment for the month in which such eligible Participant's death occurs,
unless the benefit is being paid in the form of a Qualified Joint and Survivor
Annuity, in which case the survivor benefit shall be paid to the Eligible
Spouse, if living, for his or her life. If at the time of commencement of
payment such eligible Participant does not have an Eligible Spouse, the monthly
benefit payments shall be guaranteed for one hundred twenty (120) monthly
payments with any such guaranteed payments remaining at such Participant's death
payable to his Designated Beneficiary.

    (d) Key
Employees. Notwithstanding the foregoing, payments with respect to a Participant
who is a key employee (as defined in Section 416(i) of the Code but determined
without regard to paragraph 5 thereof or the 50 employee limit on the number of
officers treated 

     

    
      
        
        

      

      
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    as key
employees) shall not begin earlier than the date that is six months after the
date of termination of the Participant (or, if earlier, the date of death). In
the event payments to the Participant under this Plan shall be delayed for six
months following the termination of the Participant as provided in this
paragraph (d), the Participant (if then living) shall receive a lump sum payment
as of the first day of the seventh month following the termination of employment
in an amount equal to six times the monthly payment due to the Participant under
this Plan, plus the monthly payment then due to the Participant. If the
Participant dies following termination of employment but prior to the
commencement of payments under this paragraph (d), the Participant's surviving
Eligible Spouse, if any, or Designated Beneficiary shall be entitled to receive
the same death benefit payable in the event the Participant had commenced
receiving benefit payments as of the first day of the month prior to his
death.

     

    4.3 Surviving Spouse
Benefit.  The surviving Eligible Spouse of a Participant who is
entitled to receive a Qualified Joint and Survivor Benefit as a normal
retirement benefit or as an early retirement benefit shall be eligible for the
surviving spouse benefit upon the death of the Participant for the duration of
the Eligible Spouse's life.

     

    4.4 Re-employment of Retired
Participant.  A retired Participant receiving or eligible to
receive the retirement benefits described in Sections 4.01 and 4.02 hereof' who
is reemployed by the Company shall be ineligible to again participate in this
Plan.

     

    ARTICLE
V

     

     

    

     

     

    PRE-RETIREMENT
DEATH BENEFITS

     

    5.1 Eligibility.  A
Participant's surviving Eligible Spouse shall be eligible for the pre-retirement
death benefit as described in this Article V if such Participant dies while in
the employ of the Company with 10 or more years of Service.

     

    
      
        
        

      

      
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    5.2 Amount.  Such
surviving Eligible Spouse shall be entitled to a monthly pre-retirement death
benefit payable in the form of an annuity in an amount equal to the difference,
if any, between (a) forty percent (40%) of the Target Pre-Retirement Death
Benefit and (b) the Spouse's Pension.

     

    5.3 Alternative
Benefit.  If greater than the monthly benefit of Section 5.02
hereof, the surviving Eligible Spouse of a Participant who dies while in the
employ of the Company after attaining age fifty-five (55) with fifteen (15)
years of Service shall be entitled to a monthly pre-retirement death benefit
equal to fifty percent (50%) of the early retirement benefit the Participant
would have been entitled to receive under Section 4.02 hereof (calculated using
both reductions, where applicable, in subsections 4.02(b)(i) and 4.02(b)(ii)) as
if he had retired immediately prior to his death with the recommendation of the
Chief Executive Officer and approval of the Committee.

     

    5.4 Commencement and
Duration.  The surviving Eligible Spouse's monthly
pre-retirement death benefit payments shall commence in the month following the
Participant's death and shall be paid in monthly installments thereafter ending
with a payment for the month in which such surviving Eligible Spouse's death
occurs.

     

    ARTICLE
VI

     

     

    

     

     

    SEVERANCE
BENEFITS

     

    6.1 Eligibility.  Upon
his Separation from Service from the Company or any Affiliated Company, a
Participant who has completed ten (10) or more years of Service but is not
eligible for a retirement benefit under Article IV shall be eligible for one of
the severance benefits described in this Article VI.

     

    6.2 Amount.

     

    
      
        
        

      

      
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    (a) If at
Separation from Service such eligible Participant is not entitled to a deferred
vested Pension pursuant to Section 5.03 of the Retirement Plan or an early
retirement Pension pursuant to Section 5.02 of the Retirement Plan, his
severance benefit shall be a monthly amount equal to his Target Severance
Benefit reduced by his Social Security Benefit.

    (b) If at
Separation from Service such eligible Participant is entitled to a deferred
vested Pension pursuant to Section 5.03 of the Retirement Plan, his severance
benefit shall be a monthly amount equal to his Target Severance Benefit reduced
by the sum of (1) his Assumed Deferred Vested Pension Benefit and (2) his Social
Security Benefit.

    (c) If at his
Separation from Service such eligible Participant is entitled to an early
retirement Pension pursuant to Section 5.02 of the Retirement Plan, his
severance benefit shall be a monthly amount equal to his Target Severance
Benefit reduced by the sum of (1) his Assumed Early Retirement Pension Benefit
and (2) his Social Security Benefit; provided, however, such Assumed Early
Retirement Pension Benefit shall be calculated based upon his actual years of
Service at his Separation from Service rather than upon his projected years of
Service at his Normal Retirement Date.

    

    6.3 Commencement and
Duration.

    (a) General.  Monthly
severance benefit payments shall commence as of the eligible Participant's
Normal Retirement Date and shall continue in monthly installments thereafter
ending with a payment for the month in which such eligible Participant's death
occurs.

    (b) Key
Employees.  Notwithstanding the foregoing, payments with
respect to a Participant who is a key employee (as defined in Section 416(i) of
the Code but determined without regard to paragraph 5 thereof or the 50 employee
limit on the number of officers treated 

     

    
      
        
        

      

      
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    as key
employees) shall not begin earlier than the date that is six months after the
date of termination of the Participant (or, if earlier, the date of death). In
the event payments to the Participant under this Plan shall be delayed for six
months following the termination of the Participant as provided in this
paragraph (b), the Participant (if then living) shall receive a lump sum payment
as of the first day of the seventh month following the termination of employment
in an amount equal to six times the monthly payment due to the Participant under
this Plan, in addition to the monthly payment then due to the Participant. If
the Participant dies following termination of employment but prior to the
commencement of payments under this paragraph (b), the Participant's surviving
Eligible Spouse, if any, shall be eligible for the surviving spouse benefit
provided in Section 6.04.

     

    6.4 Surviving Spouse
Benefit.

    (a) Eligibility.  The
surviving Eligible Spouse of a Participant who is receiving or who dies after
attaining age fifty-five (55) entitled to receive a severance benefit hereunder
shall be eligible for the surviving spouse benefit described in this Section
6.04.

    (b) Benefit
Amount.  Such surviving Eligible Spouse shall be entitled to a
monthly surviving spouse benefit in an amount equal to fifty percent (50%) of
the severance benefit which the deceased Participant was receiving or entitled
to receive at his Normal Retirement Date under either Section 6.02(a) or 6.02(b)
hereof on the day before his death.

    (c) Commencement and
Duration.  The monthly surviving spouse benefit payment shall
commence in the month following the Participant's death and shall be paid in
monthly installments thereafter ending with a payment for the month in which
such surviving Eligible Spouse's death occurs.

     

     

    
      
        
        

      

      
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    ARTICLE
VII

     

     

    

     

     

    ADMINISTRATION

     

    7.1 Committee.  This
Plan shall be administered by the Committee. The Committee shall have all powers
necessary to enable it to carry out its duties in the administration of the
Plan. Not in limitation, but in application of the foregoing, the Committee
shall have the duty and power to determine all questions that may arise
hereunder as to the status and rights of Participants in the Plan.

     

    7.2 Voting.  The
Committee shall act by a majority of the number then constituting the Committee,
and such action may be taken either by vote at a meeting or in writing, without
a meeting.

     

    7.3 Records.  The
Committee shall keep a complete record of all its proceedings and all data
relating to the administration of the Plan. The Committee shall select one of
its members as a Chairman. The Committee shall appoint a Secretary to keep
minutes of its meetings and the Secretary may or may not be a member of the
Committee. The Committee shall make such rules and regulations for the conduct
of its business as it shall deem advisable.

     

    7.4 Liability.  To
the extent permitted by law, no member of the Committee shall be liable to any
person for any action taken or omitted in connection with the interpretation and
administration of this Plan unless attributable to his own gross negligence or
willful misconduct. The Sponsor shall indemnify the members of the Committee
against any and all claims, losses, damages, expenses, including counsel fees,
incurred by them., and any liability, including any amounts paid in settlement
with their approval, arising from their action or failure to act, except when
the same is judicially determined to be attributable to their gross negligence
or willful misconduct.

     

    
      
        
        

      

      
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    7.5 Expenses.  The
cost of payments from this Plan and the expenses of administering the Plan shall
borne by each Company with respect to its own employees.

     

    ARTICLE
VIII

     

     

    

     

     

    AMENDMENT
AND TERMINATION

     

    The
Sponsor reserves the right, at any time or from time to time, by action of its
Board, to modify or amend in whole or in part any or all provisions of the Plan.
In addition, the Sponsor reserves the right by action of its Board to terminate
the Plan in whole or in part; provided, however, that no such modification,
amendment or termination shall in any way affect a Participant's accrued benefit
or the right to payment thereof under the provisions of the Plan as in effect
immediately prior to such amendment or termination. Notwithstanding the
foregoing, the Plan may be terminated and benefits distributed to Participants
within twelve months of a "change in control event" as defined for purposes of
Section 409A.

     

    ARTICLE
IX

     

     

    

     

     

    MISCELLANEOUS

     

    9.1 Non-Alienation of
Benefits.  No right or benefit under the Plan shall be subject
to anticipation, alienation, sale, assignment, pledge, encumbrance, or charge,
and any attempt to anticipate, alienate, sell, assign, pledge, encumber, or
charge any right or benefit under the Plan shall be void. No right or benefit
hereunder shall in any manner be liable for or subject to the debts, contracts,
liabilities or torts of the person entitled to such benefits. If the Participant
or Eligible Spouse shall become bankrupt, or attempt to anticipate, alienate,
sell, assign, pledge, encumber, or charge any right hereunder, then such right
or benefit shall, in the discretion of the Committee, cease and terminate, and
in such event, the Committee may hold or apply the same 

     

    
      
        
        

      

      
        20

        
          

        

      

      
        
        

      

    

     

    or any
part thereof for the benefit of the Participant or his spouse, children, or
other dependents, or any of them, in such manner and in such amounts and
proportions as the Committee may deem proper.

     

    9.2 No Trust
Created.  The obligations of the Sponsor and each Company to
make payments hereunder shall constitute a liability of the Sponsor and each
Company, as the case may be, to a Participant. Such payments shall be made from
the general funds of the Sponsor or a Company, and the Sponsor or a Company
shall not be required to establish or maintain any special or separate fund, or
purchase or acquire life insurance on a Participant's life, or otherwise to
segregate assets to assure that such payment shall be made, and neither a
Participant nor Eligible Spouse shall have any interest in any particular asset
of the Sponsor or a Company by reason of its obligations hereunder. Nothing
contained in the Plan shall create or be construed as creating a trust of any
kind or any other fiduciary relationship between the Sponsor, a Company and a
Participant or any other person.

     

    9.3 No Employment
Agreement.  Neither the execution of this Plan nor any action
taken by the Sponsor or a Company pursuant to this Plan shall be held or
construed to confer on a Participant any legal right to be continued as an
employee of the Sponsor or a Company in an executive position or in any other
capacity whatsoever. This Plan shall not be deemed to constitute a contract of
employment between the Sponsor or a Company and a Participant, nor shall any
provision herein restrict the right of any Participant to terminate his
employment with the Sponsor or a Company.

     

    9.4 Binding
Effect.  Obligations incurred by the Sponsor or a Company
pursuant to this Plan shall be binding upon and inure to the benefit of the
Sponsor or a Company, its successors and assigns, and the Participant or his
Eligible Spouse.

     

    
      
        
        

      

      
        21

        
          

        

      

      
        
        

      

    

     

    9.5 Suicide.  No
benefit shall be payable under the Plan to a Participant or Eligible Spouse
where such Participant dies as a result of suicide within two (2) years of his
commencement of participation herein.

     

    9.6 Claims for
Benefits.  Each Participant or Eligible Spouse must claim any
benefit to which he is entitled under this Plan by a written notification to the
Committee. If a claim is denied, it must be denied within a reasonable period of
time, and be contained in a written notice stating the following:

    (A) The
specific reason for the denial.

    (B) Specific
reference to the Plan provision on which the denial is based.

    (C) Description
of additional information necessary for the claimant to present his claim, if
any, and an explanation of why such material is necessary.

    (D) An
explanation of the Plan's claims review procedure.

    The
claimant will have 60 days to request a review of the denial by the Committee,
which will provide a full and fair review. The request for review must be in
writing delivered to the Committee. The claimant may review pertinent documents,
and he may submit issues and comments in writing.

     

    The
decision by the Committee with respect to the review must be given within 60
days after receipt of the request, unless special circumstances require an
extension (such as for a hearing). In no event shall the decision be delayed
beyond 120 days after receipt of the request for review. The decision shall be
written in a manner calculated to be understood by the claimant, and it shall
include specific reasons and refer to specific Plan provisions as to its
effect.

     

     

    
      
        
        

      

      
        22

        
          

        

      

      
        
        

      

    

     

    9.7 Entire
Plan.  This document and any amendments contain all the terms
and provisions of the Plan and shall constitute the entire Plan, any other
alleged terms or provisions being of no effect.

     

    9.8 Change in
Control.  In the event of a Change in Control, the Sponsor
shall irrevocably set aside funds in one or more grantor trusts in an amount
that is sufficient to pay each Participant (or Designated Beneficiary) the
amount of benefits accrued under the Plan as of the date of the Change in
Control. Any such trust shall be subject to the claims of the general creditors
of the Company in the event of the bankruptcy or insolvency of the
Company.

     

    9.9 Acceleration of
Payment.  The acceleration of the time or schedule of any
payment due under the Plan is prohibited except as provided in regulations and
administrative guidance provided under Section 409A. It is not an acceleration
of the time or schedule of payment if the Company waives or accelerates the
vesting requirements applicable to a benefit under the Plan.

     

    ARTICLE
X

     

     

    

     

     

    CONSTRUCTION

     

    10.1 Governing
Law.  This Plan shall be construed and governed in accordance
with the laws of the State of North Carolina to the extent not preempted by
Federal Law.

     

    10.2 Gender.  The
masculine gender, where appearing in the Plan, shall be deemed to include the
feminine gender, and the singular may include the plural, unless the context
clearly indicates to the contrary.

     

    10.3 Headings,
etc.  The cover page of this Plan, the Table of Contents and
all headings used in this Plan are for convenience of reference only and are not
part of the substance of this Plan.

     

    
      
        
        

      

      
        23

        
          

        

      

      
        
        

      

    

     

    10.4 Action.  Any
action under this Plan required or permitted by the Sponsor shall be by action
of its Board or its duly authorized designee.

     

    IN
WITNESS WHEREOF, this instrument has been executed
this  ____  day of ___________, 2009.

    PROGRESS ENERGY, INC.

    

    

    

    By:                                                                           

    William D. Johnson

    Chief Executive Officer

    

    
      
         

      

      
        24

        
          

        

      

      
         

      

    

    APPENDIX
A

     

    AFFILIATED
COMPANIES

     

    Progress
Energy Florida, Inc. (non-bargaining employees) ("PEF"); provided that for all
purposes of the Plan, Service for an employee of PEF on December 31, 2001 (as
defined in Section 2.21) shall include employment only with PEF (or another
adopting Company) on or after January 1, 2002; and further provided that the
accrued benefit calculated under Sections 2.03, 2.04 and 2.05 shall not include
the "Accrued Benefit" under Supplement B, Paragraph B-2(a) of the Retirement
Plan, attributable to the FPC Plan.

     

    Progress
Fuels Corporation (corporate employees) ("PFC"); provided that for all purposes
of the Plan, Service for an employee of PFC on December 31, 2001 (as defined in
Section 2.21) shall include employment only with PFC (or another adopting
Company) on or after January 1, 2002; and further provided that the accrued
benefit calculated under Sections 2.03, 2.04 and 2.05 shall not include the
"Accrued Benefit" under Supplement B, Paragraph B-2(a) of the Retirement Plan,
attributable to the FPC Plan.

     

    Progress
Energy Carolinas, Inc.

    Progress
Energy Service Company, LLC

    Progress
Energy Ventures, Inc.exhibit1063_spa.htm

    Exhibit
10.63

     

    

     

    SECURITIES
PURCHASE AGREEMENT

     

    This
Securities Purchase Agreement (this “Agreement”) is dated as of
May 7, 2009, by and among Cytori Therapeutics, Inc., a Delaware corporation (the
“Company”), and each
purchaser identified on the signature pages hereto (each, including its
successors and assigns, a “Purchaser” and collectively,
the “Purchasers”).

     

    RECITALS

     

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

     

    B.           Each
Purchaser, severally and not jointly, wishes to purchase, and the Company wishes
to sell, upon the terms and conditions stated in this Agreement, that aggregate
number of (i) shares of common stock, par value $0.001 per share (the “Common Stock”), of the
Company, set forth below such Purchaser’s name on the signature page of this
Agreement (which aggregate amount for all Purchasers together shall be 1,859,783
shares of Common Stock and shall be collectively referred to herein as the
“Shares”) and (ii)
warrants, in substantially the form attached hereto as Exhibit A (the “Warrants”), to acquire up to
that number of additional shares of Common Stock equal to 175% of the number of
Shares purchased by such Purchaser (rounded up to the nearest whole share) (the
shares of Common Stock issuable upon exercise of or otherwise pursuant to the
Warrants collectively are referred to herein as the “Warrant
Shares”).   The Shares, Warrants and Warrant Shares
collectively are referred to herein as the “Securities”.

     

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

     

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

     

     

    ARTICLE
I.

    DEFINITIONS

     

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

     

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

     

                         “Affiliate” means, with
respect to any Person, any other Person that, directly or indirectly through one
or more intermediaries, Controls, is controlled by or is under common control
with such Person, as such terms are used in and construed under Rule 405 under
the Securities Act. With respect to a Purchaser, any investment fund or managed
account that is managed on a discretionary basis by the same investment manager
as such Purchaser will be deemed to be an Affiliate of such
Purchaser.

     

                         “Agreement” shall have the
meaning ascribed to such term in the Preamble.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

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

     

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

     

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

     

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

     

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

     

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

     

                         “Commission” has the meaning
set forth in the Recitals.

     

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

     

                         “Common Stock Equivalents”
means any securities of the Company or any Subsidiary which would entitle the
holder thereof to acquire at any time Common Stock, including, without
limitation, any debt, preferred stock, rights, options, warrants or other
instrument that is at any time convertible into or exchangeable for, or
otherwise entitles the holder thereof to receive, Common Stock or other
securities that entitle the holder to receive, directly or indirectly, Common
Stock.

     

                         “Company Counsel” means DLA
Piper LLP (US).

     

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

     

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

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

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

     

                         “Disclosure Materials” has the
meaning set forth in Section 3.1(h).

     

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

     

                         “Effectiveness Deadline” means
the date on which the initial Registration Statement is required to be declared
effective by the Commission under the terms of the Registration Rights
Agreement.

     

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

     

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

     

                         “GAAP” means U.S. generally
accepted accounting principles, as applied by the Company.

     

                         “Indemnified Person” has the
meaning set forth in Section 4.9(b).

     

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

     

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

     

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

     

                         “Material Adverse Effect”
means any of (i) a material and adverse effect on the legality, validity or
enforceability of any Transaction Document, (ii) a material and adverse effect
on the results of operations, assets, business or financial condition of the
Company and the Subsidiaries, taken as a whole, or (iii) any adverse impairment
to the Company's ability to perform in any material respect on a timely basis
its obligations under any Transaction Document, except that any of the
following, either alone or in combination, shall not be deemed a Material
Adverse Effect: (A) effects caused by changes or circumstances affecting general
market conditions in the U.S. economy or which are generally applicable to the
industry in which the Company operates, (B) effects resulting from or relating
to the announcement or disclosure of the sale of the Securities or other
transactions contemplated by this Agreement, or (C) effects caused by any event,
occurrence or condition resulting from or relating to the taking of any action
in accordance with this Agreement.

     

                         “Material Contract” means any
contract of the Company that was filed (or should have been filed) as an exhibit
to the SEC Reports pursuant to Item 601(b)(4) or Item 601(b)(10) of Regulation
S-K.

     

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

     

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

     

                         “Outside Date” means the
thirtieth day following the date of this Agreement; provided that if such day is
not a Business Day, the first day following such day that is a Business
Day.

     

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

     

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

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

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

     

                         “Purchase Price” means $2.28
per unit.

     

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

     

                         “Purchaser Party” has the
meaning set forth in Section 4.9(a).

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

                         “Subsidiary” means any entity
in which the Company, directly or indirectly, owns sufficient capital stock or
holds a sufficient equity or similar interest such that it is consolidated with
the Company in the financial statements of the Company.

     

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

     

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

     

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

     

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

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

                         “Transfer Agent” means
Computershare Investor Services, or any successor transfer agent for the
Company.

     

    “Warrants” has the meaning set
forth in the Recitals to this Agreement.

     

    “Warrant Shares” has the
meaning set forth in the Recitals to this Agreement.

     

     

    ARTICLE
II.

    PURCHASE
AND SALE

     

    2.1           Closing.

     

    (a)           Amount.  Subject
to the terms and conditions set forth in this Agreement, at the Closing the
Company shall issue and sell to each Purchaser, and each Purchaser shall,
severally and not jointly, purchase from the Company, such number of Shares
equal to the quotient resulting from dividing (i) the Subscription Amount for
such Purchaser by (ii) the Purchase Price, rounded down to the nearest whole
Share.  In addition, each Purchaser shall receive a Warrant to
purchase that number of Warrant Shares equal to 175% of the number of Shares
purchased by such Purchaser, as indicated below such Purchaser’s name on the
signature page to this Agreement.  The Warrants shall have an exercise
price equal to $2.62 per Warrant Share.

     

    (b)           Closing.  The
Closing of the purchase and sale of the Shares and Warrants shall take place at
the offices of DLA Piper LLP (US), 4365 Executive Drive, Suite 1100, San Diego,
California, 92121, on the Closing Date or at such other locations or remotely by
facsimile transmission or other electronic means as the parties may mutually
agree.

     

    (c)           Form of
Payment.  On the Closing Date, each Purchaser shall wire its
Subscription Amount, in United States dollars and in immediately available
funds, to an account designated by the Company as set forth on Exhibit G
hereto.  On the Closing Date, (a) the Company shall irrevocably
instruct the Transfer Agent to deliver to each Purchaser one or more stock
certificates, free and clear of all restrictive and other legends (except as
expressly provided in Section 4.1(b) hereof), evidencing the number of Shares
such Purchaser is purchasing as is set forth on such Purchaser’s signature page
to this Agreement next to the heading “Number of Shares to be Acquired”, within
three (3) Business Days after the Closing and (b) the Company shall issue to
each Purchaser a Warrant pursuant to which such Purchaser shall have the right
to acquire such number of Warrant Shares as is set forth on such Purchaser’s
signature page to this Agreement next to the heading “Underlying Shares Subject
to Warrant”, in each case duly executed on behalf of the Company and registered
in the name of such Purchaser.

     

    2.2           Closing Deliveries.
  

     

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

     

    
      	
                             

            	
              (i) 

            	
              this
      Agreement, duly executed by the
Company;

            

    

     

    
      	
                             

            	
              (ii) 

            	
              facsimile
      copies of one or more stock certificates, free and clear of all
      restrictive and other legends (except as provided in Section 4.1(b)
      hereof), evidencing the Shares subscribed for by Purchaser hereunder,
      registered in the name of such Purchaser as set forth on the Stock
      Certificate and Warrant Questionnaire included as Exhibit C-2
      hereto (the “ Stock
      Certificates”), with the original Stock Certificates sent within
      three (3) Business Days of
Closing;

            

    

     

    
      	
                             

            	
              (iii) 

            	
              the
      Registration Rights Agreement, duly executed by the
    Company;

            

    

     

    
      	
                             

            	
              (iv) 

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

            

    

     

    
      	
                             

            	
              (v) 

            	
              a
      certificate of the Secretary of the Company (the “Secretary’s
      Certificate”), dated as of the Closing Date, (a) certifying
      the resolutions adopted by the Board of Directors of the Company or a duly
      authorized committee thereof approving the transactions contemplated by
      this 

            

    

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    
       

      
        	
                               

              	
                 

              	
                Agreement
      and the other Transaction Documents and the issuance of the Securities,
      (b) certifying the current versions of the certificate or articles of
      incorporation, as amended, and by-laws of the Company and
      (c) certifying as to the signatures and authority of persons signing
      the Transaction Documents and related documents on behalf of the Company,
      in the form attached hereto as Exhibit E
      ;

              

      

       

    

    
      	
                             

            	
              (vi) 

            	
              the
      Compliance Certificate referred to in
  Section 5.1(g);

            

    

     

    
      	
                             

            	
              (vii) 

            	
              a
      Warrant, executed by the Company and registered in the name of such
      Purchaser as set forth on the Stock Certificate and Warrant Questionnaire
      included as Exhibit C-2
      hereto, pursuant to which such Purchaser shall have the right to acquire
      such number of Warrant Shares equal to 175% of the number of Shares
      issuable to such Purchaser pursuant to this Agreement, rounded up to the
      nearest whole share, on the terms set forth
  therein;

            

    

     

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

     

    
      	
                             

            	
              (i) 

            	
              this
      Agreement, duly executed by such
Purchaser;

            

    

     

    
      	
                             

            	
              (ii) 

            	
              its
      Subscription Amount, in United States dollars and in immediately available
      funds, in the amount set forth as the “Purchase Price” indicated below
      such Purchaser’s name on the applicable signature page hereto under the
      heading “Aggregate Purchase Price (Subscription Amount)” by wire transfer
      to the escrow account set forth on Exhibit G
      attached hereto;

            

    

     

    
      	
                             

            	
              (iii) 

            	
              the
      Registration Rights Agreement, duly executed by such
      Purchaser;

            

    

     

    
      	
                             

            	
              (iv) 

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

            

    

     

    
      	
                             

            	
              (v) 

            	
              a
      fully completed and duly executed Accredited Investor Questionnaire,
      reasonably satisfactory to the Company, and Stock Certificate and Warrant
      Questionnaire in the forms attached hereto as Exhibits C-1 and C-2 ,
      respectively.

            

    

     

     

    ARTICLE
III.

    REPRESENTATIONS
AND WARRANTIES

     

                    3.1           Representations and
Warranties of the Company. The Company hereby represents and warrants as
of the date hereof and the Closing Date (except for the representations and
warranties that speak as of a specific date, which shall be made as of such
date), to each of the Purchasers that, except as set forth in the Schedules
delivered herewith or disclosed in the SEC Reports:

     

                                    (a)           Subsidiaries. The
Company has no direct or indirect Subsidiaries other than those listed in Schedule 3.1(a)
hereto. Except as disclosed in Schedule 3.1(a)
hereto, the Company owns, directly or indirectly, all of the capital stock or
comparable equity interests of each Subsidiary free and clear of any and all
Liens which could reasonably be expected to have a Material Adverse Effect, and
all the issued and outstanding shares of capital stock or comparable equity
interest of each Subsidiary are validly issued and are fully paid,
non-assessable and free of preemptive and similar rights to subscribe for or
purchase securities.

     

                                    (b)           Organization and
Qualification. The Company and each of its Subsidiaries is an entity duly
incorporated or otherwise organized, validly existing and in good standing under
the laws of the jurisdiction of its incorporation or organization (as
applicable), with the requisite corporate power and authority to own or lease
and use its properties and assets and to carry on its business as currently
conducted. Neither the Company nor any Subsidiary is in violation of any of the
provisions of its respective certificate or articles of incorporation, bylaws or
other organizational or charter documents. The Company and each of its
Subsidiaries is duly qualified to conduct business and is in good standing as a
foreign corporation or other entity in each jurisdiction in which the nature of
the business conducted or property owned by it makes such 

     

    
      
        
        

      

      
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    qualification
necessary, except where the failure to be so qualified or in good standing, as
the case may be, would not have a Material Adverse Effect.

     

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

     

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

     

                                    (e)           Filings, Consents and
Approvals. Neither the Company nor any of its Subsidiaries is required to
obtain any consent, waiver, authorization or order of, give any notice to, or
make any filing or registration with, any court or other federal, state, local
or other governmental authority or other Person in connection with the
execution, delivery and performance by the Company of the Transaction Documents
(including, without limitation, the issuance of the Securities and the
reservation for issuance and issuance of the Warrant Shares), other than
(i) the filing with the Commission of one or more Registration Statements
in accordance with the requirements of the Registration Rights Agreement,
(ii) filings required by applicable state securities laws, (iii) the
filing of a Notice of Sale of Securities on Form D with the Commission
under Regulation D of the Securities Act, (iv) the filing of any
requisite notices and/or application(s) to the Principal Trading Market for the
issuance and sale of the Common Stock and the listing of the Common Stock for
trading or quotation, as the case may be, thereon in the time and manner
required thereby, (v) the 

     

    
      
        
        

      

      
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    filings
required in accordance with Section 4.6 of this Agreement and
(vi) those that have been made or obtained prior to the date of this
Agreement (collectively, the “Required
Approvals”).

     

                                    (f)           Issuance of the
Securities. The Shares have been duly authorized and, when issued and
paid for in accordance with the terms of the Transaction Documents, will be duly
and validly issued, fully paid and nonassessable and free and clear of all
Liens, other than restrictions on transfer provided for in the Transaction
Documents or imposed by applicable securities laws, and shall not be subject to
preemptive or similar rights.  The Warrants have been duly authorized
and, when issued and paid for in accordance with the terms of the Transaction
Documents, will be duly and validly issued, free and clear of all Liens, other
than restrictions on transfer provided for in the Transaction Documents or
imposed by applicable securities laws, and shall not be subject to preemptive or
similar rights of stockholders. The Warrant Shares issuable upon exercise of the
Warrants have been duly authorized and, when issued and paid for in accordance
with the terms of the Transaction Documents and the Warrants, will be duly and
validly issued, fully paid and nonassessable, free and clear of all Liens, other
than restrictions on transfer provided for in the Transaction Documents or
imposed by applicable securities laws, and shall not be subject to preemptive or
similar rights of stockholders.  Assuming the accuracy of the
representations and warranties of the Purchasers in this Agreement, the
Securities will be issued in compliance with all applicable federal and state
securities laws.  As of the Closing Date, the Company shall have
reserved from its duly authorized capital stock the number of shares of Common
Stock issuable upon exercise of the Warrants (without taking into account any
limitations on the exercise of the Warrants set forth in the
Warrants).  The Company shall, so long as any of the Warrants are
outstanding, take all action necessary to reserve and keep available out of its
authorized and unissued capital stock, solely for the purpose of effecting the
exercise of the Warrants, 100% of the number of shares of Common Stock issuable
upon exercise of the outstanding Warrants (without taking into account any
limitations on the exercise of the outstanding Warrants set forth in the
Warrants).

     

                                    (g)           Capitalization. The
number of shares and type of all authorized, issued and outstanding capital
stock, options and other securities of the Company (whether or not presently
convertible into or exercisable or exchangeable for shares of capital stock of
the Company) has been set forth in the SEC Reports and has changed since the
date of such SEC Reports only due to stock grants or other equity awards or
stock option and warrant exercises that do not, individually or in the
aggregate, have a material effect on the issued and outstanding capital stock,
options and other securities. All of the outstanding shares of capital stock of
the Company are duly authorized, validly issued, fully paid and non-assessable,
have been issued in compliance in all material respects with all applicable
federal and state securities laws, and none of such outstanding shares was
issued in violation of any preemptive rights or similar rights to subscribe for
or purchase any capital stock of the Company. Except as specified in the SEC
Reports: (i) no shares of the Company’s outstanding capital stock are
subject to preemptive rights or any other similar rights; (ii) there are no
outstanding options, warrants, scrip, rights to subscribe to, calls or
commitments of any character whatsoever relating to, or securities or rights
convertible into, or exercisable or exchangeable for, any shares of capital
stock of the Company, or contracts, commitments, understandings or arrangements
by which the Company is or may become bound to issue additional shares of
capital stock of the Company or options, warrants, scrip, rights to subscribe
to, calls or commitments of any character whatsoever relating to, or securities
or rights convertible into, or exercisable or exchangeable for, any shares of
capital stock of the Company, other than those issued or granted pursuant to
Material Contracts or equity or incentive plans or arrangements described in the
SEC Reports; (iii) there are no material outstanding debt securities,
notes, credit agreements, credit facilities or other
agreements, documents or instruments evidencing indebtedness of the Company or
by which the Company is bound; (iv) to the Company’s Knowledge, there are
no financing statements securing obligations in any material amounts, either
singly or in the aggregate, filed in connection with the Company;
(v) except as identified in the Registration Rights Agreement, there are no
agreements or arrangements under which the Company is obligated to register the
sale of any of their securities under the Securities Act; (vi) there are no
outstanding securities or instruments of the Company or which contain any
redemption or similar provisions, and there are no contracts, commitments,
understandings or arrangements by which the Company is or may become bound to
redeem a security of the Company; (vii) there are no securities or
instruments containing anti-dilution or similar provisions that will be
triggered by the issuance of the Securities; (viii) the Company does not have
any stock appreciation rights or “phantom stock” plans or 

     

    
      
        
        

      

      
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    agreements
or any similar plan or agreement; and (ix) the Company has no liabilities
or obligations required to be disclosed in the SEC Reports but not so disclosed
in the SEC Reports, other than those incurred in the ordinary course of the
Company’s businesses and which, individually or in the aggregate, do not or
would not have a Material Adverse Effect.

     

                                    (h)           SEC Reports; Disclosure
Materials. The Company has filed all reports, schedules, forms,
statements and other documents required to be filed by it under the Exchange
Act, including pursuant to Section 13(a) or 15(d) thereof, for the twelve months
preceding the date hereof (or such shorter period as the Company was required by
law or regulation to file such material) (the foregoing materials, including the
exhibits thereto and documents incorporated by reference therein, being
collectively referred to herein as the “SEC Reports” and together
with this Agreement and the Schedules to this Agreement, and including the items
set forth in Schedule
3.1(h)-2 and Schedule 3.1(h)-3
hereto the “Disclosure
Materials”), on a timely basis or has received a valid extension of such
time of filing and has filed any such SEC Reports prior to the expiration of any
such extension. As of their respective filing dates, or to the extent corrected
by a subsequent restatement or subsequent filings, the SEC Reports complied in
all material respects with the requirements of the Securities Act and the
Exchange Act and the rules and regulations of the Commission promulgated
thereunder, and, except as corrected by subsequent filings, none of the SEC
Reports, when filed, contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading.  The Company has never been an issuer
subject to Rule 144(i) under the Securities Act.

     

                                    (i)           Financial Statements.
The financial statements of the Company included in the SEC Reports comply in
all material respects with applicable accounting requirements and the rules and
regulations of the Commission with respect thereto as in effect at the time of
filing (or to the extent corrected by a subsequent restatement). Such financial
statements have been prepared in accordance with GAAP applied on a consistent
basis during the periods involved, except as may be otherwise specified in such
financial statements or the notes thereto and except that unaudited financial
statements may not contain all footnotes required by GAAP, and fairly present in
all material respects the financial position of the Company and its consolidated
subsidiaries taken as a whole 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, year-end audit adjustments.

     

                                    (j)           Tax Matters. The
Company (i) has prepared and filed all foreign, federal and state income
and all other tax returns, reports and declarations required by any jurisdiction
to which it is subject, (ii) has paid all taxes and other governmental
assessments and charges that are material in amount, shown or determined to be
due on such returns, reports and declarations, except those being contested in
good faith, with respect to which adequate reserves have been set aside on the
books of the Company and (iii) has set aside on its books provisions
reasonably adequate for the payment of all taxes for periods subsequent to the
periods to which such returns, reports or declarations apply, except, in the
case of clauses (i) and (ii) above, where the failure to so pay or
file any such tax, assessment, charge or return would not have a Material
Adverse Effect.

     

                                    (k)           Material Changes.
Since the date of the latest financial statements included within the SEC
Reports, except as specifically disclosed in the SEC Reports or in the items
identified in Schedule
3.1(h)-2 hereto, (i) there have been no events, occurrences or
developments that have had or would reasonably be expected to have, either
individually or in the aggregate, a Material Adverse Effect, (ii) the
Company has not incurred any material liabilities (contingent or otherwise)
other than (A) trade payables, accrued expenses and other liabilities
incurred in the ordinary course of business consistent with past practice and
(B) liabilities not required to be reflected in the Company’s financial
statements pursuant to GAAP or required to be disclosed in filings made with the
Commission, (iii) the Company has not altered materially its method of
accounting or the manner in which it keeps its accounting books and records,
(iv) the Company has not declared or made any dividend or distribution of
cash or other property to its stockholders or purchased, redeemed or made any
agreements to purchase or redeem any shares of its capital stock (other

     

    
      
        
        

      

      
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    than in
connection with repurchases of unvested stock issued to employees of the
Company), (v) the Company has not issued any equity securities to any
officer, director or Affiliate, except Common Stock (A) issued in the ordinary
course as dividends on outstanding preferred stock or (B) issued pursuant to
existing Company stock option or stock purchase plans or executive and director
corporate arrangements disclosed in the SEC Reports or (C) issued pursuant to
other existing agreements disclosed in the SEC Reports and (vi) there has
not been any material change or amendment to, or any waiver of any material
right by the Company under, any Material Contract under which the Company or any
of its Subsidiaries is bound or subject. Except for the transactions
contemplated by this Agreement, no event, liability or development has occurred
or exists with respect to the Company or its Subsidiaries or their respective
business, properties, operations or financial condition that would be required
to be disclosed by the Company under applicable securities laws at the time this
representation is made that has not been publicly disclosed at least one Trading
Day prior to the date that this representation is made.

     

                                    (l)           Environmental
Matters. To the Company’s Knowledge, neither the Company nor any of its
Subsidiaries (i) is in violation of any statute, rule, regulation, decision
or order of any governmental agency or body or any court, domestic or foreign,
relating to the use, disposal or release of hazardous or toxic substances or
relating to the protection or restoration of the environment or human exposure
to hazardous or toxic substances (collectively, “Environmental Laws”),
(ii) owns or operates any real property contaminated with any substance
that is in violation of any Environmental Laws, (iii) is liable for any
off-site disposal or contamination pursuant to any Environmental Laws, or
(iv) is subject to any claim relating to any Environmental Laws; which
violation, contamination, liability or claim has had or would have, individually
or in the aggregate, a Material Adverse Effect; and, to the Company’s Knowledge,
there is no pending or threatened investigation that might lead to such a
claim.

     

                                    (m)           Litigation. To the
Company’s Knowledge, there is no Action which (i) adversely affects or
challenges the legality, validity or enforceability of any of the Transaction
Documents or the Securities or (ii) except as specifically disclosed in the
SEC Reports, is reasonably likely to have a Material Adverse Effect,
individually or in the aggregate, if there were an unfavorable decision. The
Commission has not issued any stop order or other order suspending the
effectiveness of any registration statement filed by the Company or any of its
Subsidiaries under the Exchange Act or the Securities Act.

     

                                    (n)           Employment Matters.
No material labor dispute exists or, to the Company’s Knowledge, is imminent
with respect to any of the employees of the Company which would have a Material
Adverse Effect. None of the Company’s employees is a member of a union that
relates to such employee’s relationship with the Company, and neither the
Company nor any of its Subsidiaries is a party to a collective bargaining
agreement, and the Company and each Subsidiary believes that its relationship
with its employees is good. No executive officer of the Company (as defined in
Rule 501(f) of the 1933 Act) has notified the Company that such officer intends
to leave the Company or otherwise terminate such officer’s employment with the
Company. To the Company’s Knowledge, it is in compliance with all U.S. federal,
state, local and foreign laws and regulations relating to employment and
employment practices, terms and conditions of employment and
wages and hours, except where the failure to be in compliance would not,
individually or in the aggregate, have a Material Adverse
Effect.

     

                                    (o)           Compliance. Neither
the Company nor any of its Subsidiaries (i) is in default under or in
violation of (and no event has occurred that has not been waived that, with
notice or lapse of time or both, would result in a default by the Company or any
of its Subsidiaries under), nor has the Company or any of its Subsidiaries
received written notice of a claim that it is in default under or that it is in
violation of, any Material Contract (whether or not such default or violation
has been waived), (ii) is in violation of any order of which the Company
has been made aware in writing of any court, arbitrator or governmental body
having jurisdiction over the Company or its properties or assets, or
(iii) is in violation of, or in receipt of written notice that it is in
violation of, any statute, rule or regulation of any governmental authority
applicable to the Company, except in each case as would not, individually or in
the aggregate, have a Material Adverse Effect.

     

                                    (p)           Regulatory Permits.
The Company possesses or has applied for all certificates, authorizations and
permits issued by the appropriate federal, state, local or foreign regulatory
authorities 

     

    
      
        
        

      

      
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    necessary
to conduct its business as currently conducted and as described in the SEC
Reports, except where the failure to possess such permits, individually or in
the aggregate, has not and would not have, individually or in the aggregate, a
Material Adverse Effect (“Material Permits”), and
(i) neither the Company nor any of its Subsidiaries has received any notice
in writing of proceedings relating to the revocation or material adverse
modification of any such Material Permits and (ii) the Company is unaware
of any facts or circumstances that would give rise to the revocation or material
adverse modification of any Material Permits.

     

                                    (q)           Title to Assets. The
Company and its Subsidiaries do not own any real property. The Company and its
Subsidiaries have good and marketable title to all tangible personal property
owned by them which is material to the business of the Company and its
Subsidiaries, taken as whole, in each case free and clear of all Liens except
such as do not materially affect the value of such property and do not interfere
with the use made and proposed to be made of such property by the Company and
any of its Subsidiaries. Any real property and facilities held under lease by
the Company and any of its Subsidiaries are held by them under valid, subsisting
and enforceable leases with such exceptions as are not material and do not
interfere with the use made and proposed to be made of such property and
buildings by the Company and its Subsidiaries.

     

                                    (r)           Patents and
Trademarks. To the Company’s Knowledge, the Company and its Subsidiaries
own, possess, license or have other rights to use all foreign and domestic
patents, patent applications, trade and service marks, trade and service mark
registrations, trade names, copyrights, inventions, trade secrets, technology,
Internet domain names, know-how and other intellectual property (collectively,
the “Intellectual
Property”) necessary for the conduct of their respective businesses as
now conducted or as proposed to be conducted in the SEC Reports. Except as set
forth in the SEC Reports and except where such violations or infringements would
not have, either individually or in the aggregate, a Material Adverse Effect,
(a) to the Company’s Knowledge, there are no rights of third parties to any
such Intellectual Property; (b) to the Company’s Knowledge, there is no
infringement by third parties of any such Intellectual Property; (c) to the
Company’s Knowledge, there is no pending or threatened action, suit, proceeding
or claim by others challenging the Company’s and its Subsidiaries’ rights in or
to any such Intellectual Property; (d) to the Company’s Knowledge, there is no
pending or threatened action, suit, proceeding or claim by others challenging
the validity or scope of any such Intellectual Property; and (e) to the
Company’s Knowledge, there is no pending or threatened action, suit, proceeding
or claim by others that the Company and/or any Subsidiary infringes or otherwise
violates any patent, trademark, copyright, trade secret or other proprietary
rights of others.

     

                                    (s)           Insurance. The
Company and each of the Subsidiaries are insured by insurers of recognized
financial responsibility against such losses and risks and in such amounts as
the Company believes to be prudent and customary in the businesses and locations
in which the Company and the Subsidiaries are engaged. Neither the Company nor
any of its Subsidiaries has received any notice of cancellation of any such
insurance, nor, to the Company’s Knowledge, will it or any Subsidiary be unable
to renew their respective existing insurance coverage as and when such coverage
expires or to obtain similar coverage from similar insurers as may be necessary
to continue its business.

     

                                    (t)           Transactions With Affiliates
and Employees. Except as set forth in the SEC Reports and other than the
grant of stock options or other equity awards that are not individually or in
the aggregate material in amount, none of the officers or directors of the
Company and, to the Company’s Knowledge, none of the employees of the Company,
is presently a party to any transaction with the Company (other than in
connection to the presently contemplated transaction, or other than for services
as employees, officers and directors) that would be required to be disclosed
pursuant to Item 404 of Regulation S-K promulgated under the
Securities Act.

     

                                    (u)           Internal Accounting
Controls. The Company maintains a system of internal accounting controls
sufficient to provide reasonable assurance that (i) transactions are
executed in accordance with management’s general or specific authorizations,
(ii) transactions are recorded as necessary to permit preparation of
financial statements in conformity with GAAP and to maintain asset and liability

     

    
      
        
        

      

      
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    accountability,
(iii) access to assets or incurrence of liabilities is permitted only in
accordance with management’s general or specific authorization, and
(iv) the recorded accountability for assets and liabilities is compared
with the existing assets and liabilities at reasonable intervals and in the
Company’s good faith judgment appropriate action is taken with respect to any
differences.

     

                                    (v)           Sarbanes-Oxley; Disclosure
Controls. To the Company’s Knowledge, the Company is in compliance in all
material respects with all of the provisions of the Sarbanes-Oxley Act of 2002
which are applicable to it, except where such noncompliance would not have,
individually or in the aggregate, a Material Adverse Effect. The Company
maintains disclosure controls and procedures (as such term is defined in
Rule 13a-15(e) and 15d-15(e) under the Exchange Act).

     

                                    (w)           Certain Fees. To the
Company’s Knowledge, no person or entity will have, as a result of the
transactions contemplated by this Agreement, any valid right, interest or claim
against or upon the Company or a Purchaser for any commission, fee or other
compensation pursuant to any agreement, arrangement or understanding entered
into by or on behalf of the Company. The Company shall indemnify, pay, and hold
each Purchaser harmless against, any liability, loss or expense (including,
without limitation, attorneys’ fees and out-of-pocket expenses) arising in
connection with any such right, interest or claim.

     

                                    (x)           Private Placement.
Assuming the accuracy of the Purchasers’ representations and warranties set
forth in Section 3.2 of this Agreement and the accuracy of the information
disclosed in the Accredited Investor Questionnaires, no registration under the
Securities Act is required for the offer and sale of the Securities by the
Company to the Purchasers under the Transaction Documents.

     

                                    (y)           Registration Rights.
Other than as set forth in the SEC Reports, no Person has any right to cause the
Company to effect the registration under the Securities Act of any securities of
the Company other than those securities which are currently registered on an
effective registration statement on file with the Commission.

     

                                    (z)           No Integrated
Offering. Assuming the accuracy of the Purchasers’ representations and
warranties set forth in Section 3.2, none of the Company, its Subsidiaries
nor, to the Company’s Knowledge, any of its Affiliates or any
Person acting on its behalf has, directly or indirectly, at any time within the
past six months, made any offers or sales of any Company security or solicited
any offers to buy any security under circumstances that would (i) eliminate
the availability of the exemption from registration under Regulation D
under the Securities Act in connection with the offer and sale by the Company of
the Shares and Warrants as contemplated hereby or (ii) cause the offering of the
Shares and Warrants pursuant to the Transaction Documents to be integrated with
prior offerings by the Company for purposes of any applicable law, regulation or
stockholder approval provisions, including, without limitation, under the rules
and regulations of any Trading Market on which any of the securities of the
Company are listed or designated.

     

                                    (aa)           Listing and Maintenance
Requirements. The Company’s Common Stock is registered pursuant to
Section 12(b) or 12(g) of the Exchange Act, and the Company has taken no action
designed to terminate the registration of the Common Stock under the Exchange
Act nor has the Company received any notification that the Commission is
contemplating terminating such registration. The Company has not, in the
12 months preceding the date hereof, received written notice from any
Trading Market on which the Common Stock is listed or quoted to the effect that
the Company is not in compliance with the listing or maintenance requirements of
such Trading Market. The Company is in compliance in all material respects with
the listing and maintenance requirements for continued trading of the Common
Stock on the Principal Trading Market.

     

                                    (bb)           Investment Company.
Neither the Company nor any of its Subsidiaries is required to be registered as,
and is not an Affiliate of, and immediately following the Closing will not be
required to register as, an “investment company” within the meaning of the
Investment Company Act of 1940, as amended.

     

                                    (cc)           Questionable
Payments. To the Company’s Knowledge, neither the Company nor any of its
Subsidiaries, nor any directors, officers, employees, agents or other Persons
acting at the direction 

     

    
      
        
        

      

      
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    of the
Company has, in the course of its actions for, or on behalf of, the Company: (a)
directly or indirectly, used any material corporate funds for unlawful
contributions, gifts, entertainment or other unlawful expenses relating to
foreign or domestic political activity; (b) made any material direct or indirect
unlawful payments to any foreign or domestic governmental officials or employees
or to any foreign or domestic political parties or campaigns from corporate
funds; (c) violated in any material respect any provision of the Foreign
Corrupt Practices Act of 1977, as amended, or (d) made any other material
unlawful bribe, rebate, payoff, influence payment, kickback or other material
unlawful payment to any foreign or domestic government official or
employee.

     

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

     

                                    (ee)           Disclosure. To the
Company’s Knowledge, no event or circumstance has occurred or information exists
with respect to the Company or any of its Subsidiaries or its or their business,
properties, operations or financial conditions, which, under applicable law,
rule or regulation, requires public disclosure or announcement by the Company
but which has not been so publicly announced or disclosed (assuming for this
purpose that the Company’s reports filed under the Exchange Act are being
incorporated into an effective registration statement filed by the Company under
the Securities Act), except for the announcement of this
Agreement and related transactions and as may be disclosed on the Form 8-K filed
pursuant to Section 4.6.

     

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

     

                                    (gg)           Acknowledgment Regarding
Purchasers’ Purchase of Shares and Warrants.  The Company
acknowledges and agrees that each of the Purchasers is acting solely in the
capacity of an arm’s length purchaser with respect to the Transaction Documents
and the transactions contemplated hereby and thereby.  The Company further
acknowledges that no Purchaser is acting as a financial advisor or fiduciary of
the Company (or in any similar capacity) with respect to the Transaction
Documents and the transactions contemplated thereby and any advice given by any
Purchaser or any of their respective representatives or agents in connection
with the Transaction Documents and the transactions contemplated thereby is
merely incidental to the Purchasers’ purchase of the Shares and
Warrants. 

     

                                    (hh)           Regulation M
Compliance.  In the last thirty days, the Company has not, and to
the Company’s Knowledge no one acting on its behalf has, (i) taken,
directly or indirectly, any action designed to cause or to result in the
stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of any of the Securities, (ii) sold, bid for,
purchased, or paid any compensation for soliciting purchases of, any of the
securities of the Company or (iii) paid or agreed to pay to any Person any
compensation for soliciting another to purchase any other securities of the
Company.

     

                                    (ii)           OFAC. Neither the
Company nor any Subsidiary nor, to the Company’s Knowledge, any director,
officer, agent, employee, Affiliate or Person acting on behalf of the Company or
any Subsidiary is currently subject to any U.S. sanctions administered by the
Office of Foreign Assets Control of the U.S. Treasury Department (“OFAC”); and the Company will
not knowingly directly or indirectly use the proceeds of the sale of the
Securities, or lend, contribute or otherwise make available such proceeds to any
Subsidiary, joint venture partner or other Person or entity, towards any sales
or operations in Cuba, Iran, Syria, Sudan, 

     

    
      
        
        

      

      
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    Myanmar
or any other country sanctioned by OFAC or for the purpose of financing the
activities of any Person currently subject to any U.S. sanctions administered by
OFAC.

     

                                    (jj)           Money Laundering
Laws. To the Company’s Knowledge, the operations of each of the Company
and any Subsidiary are and have been conducted at all times in compliance with
the money laundering statutes of applicable jurisdictions, the rules and
regulations thereunder and any related or similar rules, regulations or
guidelines, issued, administered or enforced by any applicable governmental
agency (collectively, the “Money Laundering Laws”) and
to the Company’s Knowledge, no action, suit or proceeding by or before any court
or governmental agency, authority or body or any arbitrator involving the
Company and/or any Subsidiary with respect to the Money Laundering Laws is
pending or threatened.

     

                                    (kk)           FDA.   To
the Company’s Knowledge, there is no pending, completed or threatened, action
(including any lawsuit, arbitration, or legal or administrative or regulatory
proceeding, charge, complaint, or investigation) against the Company or any of
its Subsidiaries, and none of the Company or any of its Subsidiaries has
received any notice, warning letter or other communication from the U.S. Food
and Drug Administration Office of Compliance (“FDA”), which
(i) contests the premarket clearance, licensure, registration, or approval
of, the uses of, the distribution of, the manufacturing or packaging of, the
testing of, the sale of, or the labeling and promotion of any product subject to
the jurisdiction of the FDA under the Federal Food, Drug and Cosmetic Act, as
amended, and the regulations thereunder that is manufactured,
packaged, labeled, tested, distributed, sold, and/or marketed by the Company or
any of its Subsidiaries (each such product, a “Pharmaceutical Product”),
(ii) imposes a clinical hold on any clinical investigation by the Company or any
of its Subsidiaries, (iii) enjoins production at any facility of the
Company or any of its Subsidiaries, (iv) enters or proposes to enter into a
consent decree of permanent injunction with the Company or any of its
Subsidiaries, or (v) otherwise alleges any violation of any laws, rules or
regulations by the Company or any of its Subsidiaries, and which, either
individually or in the aggregate, would have a Material Adverse Effect. 
The Company has not been informed in writing by the FDA that the FDA will
prohibit the marketing, sale, license or use in the United States of any product
proposed to be developed, produced or marketed by the Company.

     

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

     

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

     

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

     

                                    (b)           No Conflicts. The
execution, delivery and performance by such Purchaser of this Agreement and the
Registration Rights Agreement and the consummation by such Purchaser of the
transactions contemplated hereby and thereby will not (i) result in a
violation of the organizational documents of such Purchaser, (ii) conflict
with, or constitute a default (or an event which with notice or lapse of time or
both would become a default) under, or give to others any rights of termination,
amendment, 

     

    
      
        
        

      

      
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    acceleration
or cancellation of, any agreement, indenture or instrument to which such
Purchaser is a party, or (iii) result in a violation of any law, rule,
regulation, order, judgment or decree (including federal and state securities
laws) applicable to such Purchaser, except in the case of clauses (ii) and
(iii) above, for such conflicts, defaults, rights or violations which would
not, individually or in the aggregate, reasonably be expected to have a material
adverse effect on the ability of such Purchaser to perform its obligations
hereunder.

     

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

     

                                    (d)           Purchaser Status. At
the time such Purchaser was offered the Shares and Warrants, it was, and at the
date hereof it is, an “accredited investor” as defined in Rule 501(a) under the
Securities Act.

     

                                    (e)           General Solicitation.
Such Purchaser is not purchasing the Shares and Warrants as a result of any
advertisement, article, notice or other communication regarding the Shares and
Warrants published in any newspaper, magazine or similar media or broadcast over
television or radio or presented at any seminar or any other general
advertisement.

     

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

     

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

     

                                    (h)           Certain Trading
Activities. Other than with respect to the transactions contemplated
herein, since the time that such Purchaser was first contacted by the Company or
any other Person regarding the transactions contemplated hereby, neither the
Purchaser nor any Affiliate of such Purchaser which 

     

    
      
        
        

      

      
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    (x) had
knowledge of the transactions contemplated hereby, (y) has or shares
discretion relating to such Purchaser’s investments or trading or information
concerning such Purchaser’s investments, including in respect of the Shares and
Warrants, and (z) is subject to such Purchaser’s review or input concerning
such Affiliate’s investments or trading (collectively, “ Trading Affiliates”) has
directly or indirectly, nor has any Person acting on behalf of or pursuant to
any understanding with such Purchaser or Trading Affiliate, effected or agreed
to effect any purchases or sales of the securities of the Company (including,
without limitation, any Short Sales involving the Company’s securities).
Notwithstanding the foregoing, in the case of a Purchaser and/or Trading
Affiliate that is, individually or collectively, a multi-managed investment bank
or vehicle whereby separate portfolio managers manage separate portions of such
Purchaser’s or Trading Affiliate’s assets and the portfolio managers have no
direct knowledge of the investment decisions made by the portfolio managers
managing other portions of such Purchaser’s or Trading Affiliate’s assets, the representation set forth above shall apply only with respect to
the portion of assets managed by the portfolio manager that have knowledge about
the financing transaction contemplated by this Agreement. Other than to other
Persons party to this Agreement, such Purchaser has maintained the
confidentiality of all disclosures made to it in connection with this
transaction (including the existence and terms of this
transaction).

     

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

     

                                    (j)           Independent Investment
Decision. Such Purchaser has independently evaluated the merits of its
decision to purchase Shares and Warrants pursuant to the Transaction Documents,
and such Purchaser confirms that it has not relied on the advice of any other
Purchaser’s business and/or legal counsel in making such decision. Such
Purchaser understands that nothing in this Agreement or any other materials
presented by or on behalf of the Company to the Purchaser in connection with the
purchase of the Shares and Warrants constitutes legal, tax or investment advice.
Such Purchaser has consulted such legal, tax and investment advisors as it, in
its sole discretion, has deemed necessary or appropriate in connection with its
purchase of the Shares and Warrants.

     

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

     

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

     

                                    (m)           Regulation M.
Such Purchaser is aware that the anti-manipulation rules of Regulation M
under the Exchange Act may apply to sales of Common Stock and other activities
with respect to the Common Stock by the Purchasers.

     

                                    (n)           Residency. Such
Purchaser’s residence (if an individual) or office in which its investment
decision with respect to the Shares and Warrants was made (if an entity) are
located at the address immediately below such Purchaser’s name on its signature
page hereto.

     

    The
Company and each of the Purchasers acknowledge and agree that no party to this
Agreement has made or makes any representations or warranties with respect to
the transactions contemplated hereby other than those specifically set forth in
this Article III and the Transaction Documents.

     

    
      
        
        

      

      
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    ARTICLE
IV.

    OTHER
AGREEMENTS OF THE PARTIES

     

                    4.1           Transfer
Restrictions.

     

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

     

                                    (b)           Legends. Certificates
evidencing the Shares, the Warrants and the Warrant Shares shall bear any legend
as required by the California Corporations Code (including the legend set forth
in Schedule
4.1(b) hereto), the “blue sky” laws of any state and a restrictive legend
in substantially the following form, until such time as they are not required
under Section 4.1(c) or applicable law:

     

    

    [NEITHER
THESE SECURITIES NOR THE SECURITIES ISSUABLE UPON EXERCISE OF THESE SECURITIES
HAVE BEEN REGISTERED] [THESE SECURITIES HAVE NOT BEEN REGISTERED] UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR APPLICABLE STATE
SECURITIES LAWS.  THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD,
TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION
STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OR (B) AN AVAILABLE
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS OR BLUE SKY LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL
REASONABLY SATISFACTORY TO THE COMPANY AND ITS TRANSFER AGENT OR (II) UNLESS
SOLD PURSUANT TO RULE 144 UNDER SAID ACT.  NOTWITHSTANDING THE
FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN
ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE
SECURITIES.  NO REPRESENTATION IS MADE BY THE ISSUER AS TO THE
AVAILABILITY OF THE EXEMPTION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT FOR
RESALES OF THESE SECURITIES.

     

    The
Company acknowledges and agrees that a Purchaser may from time to time pledge,
and/or grant a security interest in, some or all of the legended Securities in
connection with applicable securities laws, pursuant to a bona fide margin
agreement in compliance with a bona fide margin loan.  Such a pledge
would not be subject to approval or consent of the Company and no legal opinion
of legal counsel 

     

    
      
        
        

      

      
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    to the
pledgee, secured party or pledgor shall be required in connection with the
pledge, but such legal opinion shall be required in connection with a subsequent
transfer or foreclosure following default by the Purchaser transferee of the
pledge.  No notice shall be required of such pledge, but Purchaser’s
transferee shall promptly notify the Company of any such subsequent transfer or
foreclosure.  Each Purchaser acknowledges that the Company shall not
be responsible for any pledges relating to, or the grant of any security
interest in, any of the Securities or for any agreement, understanding or
arrangement between any Purchaser and its pledgee or secured
party.  At the appropriate Purchaser’s expense, the Company will
execute and deliver such reasonable documentation as a pledgee or secured party
of Shares may reasonably request in connection with a pledge or a permissible
transfer of the Shares, including the preparation and filing of any required
prospectus supplement under Rule 424(b)(ii) of the Securities Act or other
applicable provision of the Securities Act to appropriately amend the list of
“Selling Stockholders” thereunder. Each Purchaser acknowledges and agrees that,
except as otherwise provided in Section 4.1(c), any Securities subject to a
pledge or security interest as contemplated by this Section 4.1(b) shall
continue to bear the legend set forth in this Section 4.1(b) and be subject to
the restrictions on transfer set forth in Section 4.1(a).

     

                                    (c)           Removal of Legends.
The restrictive legend set forth in Section 4.1(b) above shall be removed and
the Company shall issue a certificate without such restrictive legend or any
other restrictive legend to the holder of the applicable Securities upon which
it is stamped or issue to such holder by electronic delivery at the applicable
balance account at the Depository Trust Company (“DTC”), if (i) such Securities
are registered for resale under the Securities Act (provided that, if the
Purchaser is selling pursuant to the effective registration statement
registering the Securities for resale, the Purchaser agrees to only sell such
Securities during such time that such registration statement is effective and
not withdrawn or suspended, and only as permitted by such registration
statement), (ii) such Securities are sold or transferred pursuant to Rule 144
(if the transferor is not an Affiliate of the Company), or (iii) such Securities
are eligible for sale under Rule 144, without the requirement for the Company to
be in compliance with the current public information required under Rule 144 as
to such securities and without volume or manner-of-sale
restrictions.  Following the earlier of (i) the Effective Date or (ii)
Rule 144 becoming available for the resale of Securities, without the
requirement for the Company to be in compliance with the current public
information required under Rule 144 as to such securities and without volume or
manner-of-sale restrictions, the Company shall cause Company Counsel to issue to
the Transfer Agent the legal opinion referred to in the Irrevocable Transfer
Agent Instructions.  Any fees (with respect to the Transfer Agent,
Company Counsel or otherwise) associated with the issuance of such opinion or
the removal of such legend shall be borne by the Company.  Following
the Effective Date, or at such earlier time as a restrictive legend is no longer
required for certain Securities, the Company will no later than three (3)
Trading Days following the delivery by a Purchaser to the Company or the
Transfer Agent (with notice to the Company) of a legended certificate
representing such Securities (endorsed or with stock powers attached, signatures
guaranteed, and otherwise in form necessary to affect the reissuance and/or
transfer) and an opinion of counsel to the extent required by Section 4.1(a),
(such third Trading Day, the “Legend Removal Date”) deliver
or cause to be delivered to such Purchaser a certificate representing such
Securities that is free from all restrictive legends.  The Company may
not make any notation on its records or give instructions to the Transfer Agent
that enlarge the restrictions on transfer set forth in this Section
4.1(c).  Certificates for Securities subject to legend removal
hereunder may be transmitted by the Transfer Agent to the Purchasers by
crediting the account of the Purchaser’s prime broker with DTC as directed by
such Purchaser.

     

                                    (d)           Irrevocable Transfer Agent
Instructions. The Company shall issue irrevocable instructions to its
Transfer Agent, and any subsequent transfer agent in the form of Exhibit D attached
hereto (the “Irrevocable
Transfer Agent Instructions”). The Company represents and warrants that
no instruction other than the Irrevocable Transfer Agent Instructions referred
to in this Section 4.1(d) or instructions that are not contradictory
therewith will be given by the Company to its transfer agent in connection with
this Agreement, and that the Securities shall otherwise be freely transferable
on the books and records of the Company as and to the extent provided in this
Agreement and the other Transaction Documents and applicable law. The Company
acknowledges that a breach by it of its obligations under this
Section 4.1(d) will cause irreparable harm to a Purchaser. Accordingly, the
Company acknowledges that the remedy at law 

     

    
      
        
        

      

      
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    for a
breach of its obligations under this Section 4.1(d) will be inadequate and
agrees, in the event of a breach or threatened breach by the Company of the
provisions of this Section 4.1(d), that a Purchaser shall be entitled, in
addition to all other available remedies, to an order and/or injunction
restraining any breach and requiring immediate issuance and transfer, without
the necessity of showing economic loss and without any bond or other security
being required.

     

                                    (e)           Acknowledgement. Each
Purchaser hereunder acknowledges its primary responsibilities under the
Securities Act and accordingly will not sell or otherwise transfer the
Securities or any interest therein without complying with the requirements of
the Securities Act. Except as otherwise provided below, while the
above-referenced registration statement remains effective, each Purchaser
hereunder may sell the Shares and Warrant Shares in accordance with the plan of
distribution contained in the registration statement and if it does so it will
comply therewith and with the related prospectus delivery requirements unless an
exemption therefrom is available.  Each Purchaser, severally and not
jointly with the other Purchasers, agrees that if it is notified by the Company
in writing at any time that the registration statement registering the resale of
the Shares and Warrant Shares is not effective or that the prospectus included
in such registration statement no longer complies with the requirements of
Section 10 of the Securities Act, the Purchaser will refrain from selling
such Shares and Warrant Shares until such time as the Purchaser is notified by
the Company that such registration statement is effective or such prospectus is
compliant with Section 10 of the Exchange Act, unless such Purchaser is
able to, and does, sell such Shares and Warrant Shares pursuant to an available
exemption from the registration requirements of Section 5 of the Securities
Act. Both the Company and its Transfer Agent, and their respective directors,
officers, employees and agents, may rely on this subsection (e) and each
Purchaser hereunder will indemnify and hold harmless each of such persons from
any breaches or violations of this paragraph.

     

                                    (f)           Buy-In. If the
Company shall fail for any reason or for no reason to issue to a Purchaser
unlegended certificates within three (3) Business Days of receipt of all
documents necessary for the removal of the legend set forth above (the “Deadline Date”), then, in
addition to all other remedies available to such Purchaser, if on or after the
Business Day immediately following such three (3) Business Day period, such
Purchaser purchases (in an open market transaction or otherwise) shares of
Common Stock to deliver in satisfaction of a sale by the holder of shares of
Common Stock that such Purchaser anticipated receiving from the Company without
any restrictive legend (a “Buy-In”), then the Company
shall, within three (3) Business Days after such Purchaser’s request and in
such Purchaser’s sole discretion, either (i) pay cash to the Purchaser in
an amount equal to such Purchaser’s total purchase price (including brokerage
commissions, if any) for the shares of Common Stock so purchased (the “Buy-In Price”), at which
point the Company’s obligation to deliver such certificate (and to issue such
shares of Common Stock) shall terminate, or (ii) promptly honor its
obligation to deliver to such Purchaser a certificate or certificates
representing such shares of Common Stock and pay cash to the Purchaser in an
amount equal to the excess (if any) of the Buy-In Price over the product of
(a) such number of shares of Common Stock, times (b) the Closing Bid
Price on the Deadline Date.

     

                    4.2           Acknowledgment of
Dilution.  The Company acknowledges that the issuance of the
Securities may result in dilution of the outstanding shares of Common
Stock.  The Company further acknowledges that its obligations under the
Transaction Documents, including without limitation its obligation to issue the
Securities pursuant to the Transaction Documents, are unconditional and absolute
and not subject to any right of set off, counterclaim, delay or reduction,
regardless of the effect of any such dilution or any claim the Company may have
against any Purchaser and regardless of the dilutive effect that such issuance
may have on the ownership of the other stockholders of the Company.

     

                    4.3           Furnishing of
Information. In order to enable the Purchasers to sell the Securities
under Rule 144 of the Securities Act, for a period of one year from the Closing,
the Company shall use its commercially reasonably efforts to maintain the
registration of the Securities under Section 12(b) or 12(g) of the Exchange Act
and to timely file (or obtain extensions in respect thereof and file within the
applicable grace period) all reports required to be filed by the Company after
the date hereof pursuant to the Exchange Act.  During such one year
period, if the Company is not required to file reports pursuant to such laws, it
will prepare and 

     

    
      
        
        

      

      
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    furnish
to the Purchasers and make publicly available in accordance with Rule 144(c)
such information as is required for the Purchasers to sell the Securities under
Rule 144.

     

                    4.4           Form D and Blue
Sky. The Company agrees to timely file a Form D with respect to the
Shares and Warrants as required under Regulation D.  The Company,
on or before the Closing Date, shall take such action as the Company shall
reasonably determine is necessary in order to obtain an exemption for or to
qualify the Shares and Warrants for sale to the Purchasers at the Closing
pursuant to this Agreement under applicable securities or “Blue Sky” laws of the
states of the United States (or to obtain an exemption from such qualification).
The Company shall make all filings and reports relating to the offer and sale of
the Shares and Warrants required under applicable securities or “Blue Sky” laws
of the states of the United States following the Closing Date.

     

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

     

                    4.6           Securities Laws Disclosure;
Publicity. By 9:00 a.m., New York City time, on the Trading Day
immediately following the execution of this Agreement, the Company shall issue
one or more press releases (each, a “Press Release”) disclosing
all material terms of the transactions contemplated hereby and the items
identified on Schedule
3.1(h)-2.  On or before 9:00 a.m., New York City time, on the
Trading Day immediately following the execution of this Agreement, the Company
will file a Current Report on Form 8-K with the Commission describing the terms
of the Transaction Documents (and including as exhibits to such Current Report
on Form 8-K the material Transaction Documents (including, without limitation,
this Agreement and the Registration Rights Agreement)). Notwithstanding the
foregoing, the Company shall not publicly disclose the name of any Purchaser or
an Affiliate of any Purchaser, or include the name of any Purchaser or an
Affiliate of any Purchaser in any press release or filing with the Commission
(other than the Registration Statement) or any regulatory agency or Trading
Market, without the prior written consent of such Purchaser, except (i) as
required by federal securities law in connection with (A) any registration
statement contemplated by the Registration Rights Agreement and (B) the
filing of final Transaction Documents (including signature pages thereto) with
the Commission and (ii) to the extent such disclosure is required by law,
request of the Staff of the Commission or Trading Market regulations, in which
case the Company shall provide the Purchasers with prior written notice of such
disclosure permitted under this subclause (ii).  From and after the
issuance of the Press Release(s) (which shall include the items identified in
Schedule 3.1(h)-2
hereto), no Purchaser shall be in possession of any material, non-public
information received from the Company, any Subsidiary or any of their respective
officers, directors, employees or agents, that is not disclosed in the Press
Release(s) (which shall include the items identified in Schedule 3.1(h)-2
hereto) unless a Purchaser shall have executed a written agreement regarding the
confidentiality and use of such information.  Each Purchaser,
severally and not jointly with the other Purchasers, covenants that until such
time as the transactions contemplated by this Agreement are publicly disclosed
by the Company as described in this Section 4.6 (which shall include the
items identified in Schedule 3.1(h)-2
hereto), such Purchaser will maintain the confidentiality of all disclosures
made to it in connection with this transaction (including the existence and
terms of this transaction).

     

                    4.7           Non-Public
Information. Except with respect to the material terms and conditions of
the transactions contemplated by the Transaction Documents, and except with the
express written consent of such Purchaser and unless prior thereto such
Purchaser shall have executed a written agreement regarding the confidentiality
and use of such information, the Company shall not, and shall cause each
Subsidiary and each of their respective officers, directors, employees and
agents, not to, and each Purchaser shall not directly solicit the Company, any
of its Subsidiaries or any of their respective officers, directors, employees or
agents to provide any Purchaser with any material, non-public information
regarding the Company or any of its 

     

    
      
        
        

      

      
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    Subsidiaries
from and after the filing of the Press Release(s) (which shall include the items
identified in Schedule 3.1(h)-2
hereto).

     

                    4.8           Indemnification.

     

                                    (a)           Indemnification of
Purchasers. In addition to the indemnity provided in the Registration
Rights Agreement, the Company will indemnify and hold each Purchaser and its
directors, officers, stockholders, members, partners, employees and agents (and
any other Persons with a functionally equivalent role of a Person holding such
titles notwithstanding a lack of such title or any other title), each Person who
controls such Purchaser (within the meaning of Section 15 of the Securities Act
and Section 20 of the Exchange Act), and the directors, officers,
stockholders, agents, members, partners or employees (and any other Persons with
a functionally equivalent role of a Person holding such titles notwithstanding a
lack of such title or any other title) of such controlling person (each, a
“Purchaser Party”)
harmless from any and all losses, liabilities, obligations, claims,
contingencies, damages, costs and expenses, including all judgments, amounts
paid in settlements, court costs and reasonable attorneys’ fees and costs of
investigation that any such Purchaser Party may suffer or incur as a result of
any breach of any of the representations, warranties, covenants or agreements
made by the Company in this Agreement or in the other Transaction
Documents.  The Company will not be liable to any Purchaser Party under
this Agreement to the extent, but only to the extent that a loss, claim, damage
or liability is attributable to any Purchaser Party’s breach of any of the
representations, warranties, covenants or agreements made by such Purchaser
Party in this Agreement or in the other Transaction Documents; provided that
such a claim for indemnification relating to any breach of any of the
representations or warranties made by the Company in this Agreement is made
within one year from the Closing.

     

                                    (b)           Conduct of Indemnification
Proceedings.
Promptly after receipt by any Person (the "Indemnified Person”) of
notice of any demand, claim or circumstances which would or might give rise to a
claim or the commencement of any action, proceeding or investigation in respect
of which indemnity may be sought pursuant to Section 4.8(a), such
Indemnified Person shall promptly notify the Company in writing and the Company
shall assume the defense thereof, including the employment of counsel reasonably
satisfactory to such Indemnified Person, and shall assume the payment of all
fees and expenses; provided,
however, that the failure of any Indemnified Person so to notify the
Company shall not relieve the Company of its obligations hereunder except to the
extent that the Company is actually and materially and adversely prejudiced by
such failure to notify. In any such proceeding, any Indemnified Person shall
have the right to retain its own counsel, but the fees and expenses of such
counsel shall be at the expense of such Indemnified Person unless: (i) the
Company and the Indemnified Person shall have mutually agreed to the retention
of such counsel; (ii) the Company shall have failed promptly
to assume the defense of such proceeding and to employ counsel reasonably
satisfactory to such Indemnified Person in such proceeding; or (iii) in the
reasonable judgment of counsel to such Indemnified Person, representation of
both parties by the same counsel would be inappropriate due to actual or
potential differing interests between them. The Company shall not be liable for
any settlement of any proceeding effected without its written consent, which
consent shall not be unreasonably withheld, delayed or conditioned. Without the
prior written consent of the Indemnified Person, which consent shall not be
unreasonably withheld, delayed or conditioned, the Company shall not effect any
settlement of any pending or threatened proceeding in respect of which any
Indemnified Person is or could have been a party and indemnity could have been
sought hereunder by such Indemnified Party, unless such settlement includes an
unconditional release of such Indemnified Person from all liability arising out
of such proceeding.

     

                    4.9           Listing of Common
Stock. In the time and manner required by the Principal Trading Market,
the Company shall prepare and file with such Trading Market an additional shares
listing application covering all of the Shares and Warrant Shares and shall use
its commercially reasonable efforts to take all steps necessary to cause the
Shares and Warrant Shares to be approved for listing on the Principal Trading
Market as soon as possible thereafter.

     

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

     

    
      
        
        

      

      
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    4.11           Short Sales After The Date
Hereof.  Such Purchaser shall not, and shall cause its Trading
Affiliates not to, engage, directly or indirectly, in any transactions in the
Company’s securities (including, without limitation, any Short Sales involving
the Company’s securities) during the period from the date hereof until the
earlier of such time as (i) the transactions contemplated by this Agreement are
first required to be publicly announced as described in Section 4.6 (which
public announcement shall include the items identified in Schedule 3.1(h)-2
hereto) or (ii) this Agreement is terminated in full pursuant to Section 6.17
and the items identified in Schedule 3.1(h)-2
hereto have been publicly announced as described in Section 4.6.  Each
Purchaser severally and not jointly with the other Purchasers covenants that
until such time as the transactions contemplated by this Agreement are publicly
disclosed by the Company as described in Section 4.6 (which public announcement
shall include the items identified in Schedule 3.1(h)-2
hereto), such Purchaser will maintain the confidentiality of the existence and
terms of this Agreement and the transactions contemplated hereby and the
non-public information contained in the items identified in Schedule 3.1(h)-2
hereto.  Notwithstanding the foregoing, no Purchaser makes any
representation, warranty or covenant hereby that it will not engage in Short
Sales in the securities of the Company after the time that the transactions
contemplated by this Agreement are publicly disclosed by the Company as
described in Section 4.6 (which public announcement shall include the items
identified in Schedule 3.1(h)-2
hereto).  Notwithstanding the foregoing, in the event that a Purchaser
is a multi-managed investment vehicle whereby separate portfolio managers manage
separate portions of such Purchaser's assets and the portfolio managers have no
direct knowledge of the investment decisions made by the portfolio managers
managing other portions of such Purchaser's assets, the representation set forth
above shall apply only with respect to the portion of assets managed by the
portfolio manager that have knowledge about the financing transaction
contemplated by this Agreement.  Each Purchaser understands and
acknowledges, severally and not jointly with any other Purchaser, that the
Commission currently takes the position that covering a short position
established prior to effectiveness of a resale registration statement with
shares included in such registration statement would be a violation of Section 5
of the Securities Act, as set forth in Item 65, Section 5 under Section A, of
the Manual of Publicly Available Telephone Interpretations, dated July 1997,
compiled by the Office of Chief Counsel, Division of Corporation
Finance.

     

    4.12           Reservation of Shares of
Common Stock.  The Company shall take all action necessary to
at all times have authorized, and reserved for the purpose of issuance from and
after the Closing Date, the number of shares of Common Stock issuable upon
exercise of the Warrants issued at the Closing (without taking into account any
limitations on exercise of the Warrants set forth in the Warrants).

     

    ARTICLE
V.

    CONDITIONS
PRECEDENT TO CLOSING

     

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

     

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

     

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

     

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

     

    
      
        
        

      

      
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                                    (d)           Consents. The Company
shall have obtained in a timely fashion any and all consents, permits,
approvals, registrations and waivers necessary for consummation of the purchase
and sale of the Shares and Warrants at the Closing (including all Required
Approvals), all of which shall be and remain so long as necessary in full force
and effect.

     

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

     

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

     

                                    (g)           Compliance
Certificate . The Company shall have delivered to each Purchaser a
certificate, dated as of the Closing Date and signed by its Chief Executive
Officer or its Chief Financial Officer, dated as of the Closing Date, certifying
to the fulfillment of the conditions specified in Sections 5.1(a) and
(b) in the form attached hereto as Exhibit F.

     

    (h)           Adverse Changes.
Since the date of execution of this Agreement, no event or series of events
shall have occurred that has had or would reasonably be expected to have a
Material Adverse Effect.

     

                                    (i)           Termination . This
Agreement shall not have been terminated as to such Purchaser in accordance with
Section 6.17 herein.

     

     

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

     

                                    (a)           Representations and
Warranties. The representations and warranties made by the Purchaser in
Section 3.2 hereof shall be true and correct in all material respects as of
the date when made, and as of the Closing Date as though made on and as of such
date, except for representations and warranties that speak as of a specific
date.

     

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

     

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

     

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

     

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

     

                                    (f)           Termination. This
Agreement shall not have been terminated as to such Purchaser in accordance with
Section 6.17 herein.

     

    
      
        
        

      

      
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    ARTICLE
VI.

    MISCELLANEOUS

     

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

     

     

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

     

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

     

    

    If to the
Company:               Cytori
Therapeutics, Inc.

    3020
Callan Road

    San
Diego, California 92121

    Telephone
No.:  (858) 458-0900

    Facsimile
No.:  (858) 450-4331

    Attention:  Chief
Executive Officer

     

    
      	
               
      

            	
              With
      a copy to:

            	
              DLA
      Piper LLP (US)

            

    

    
      	
               
      

            	
              4365
      Executive Drive, Suite 1100

            

    

    
      	
               
      

            	
              San
      Diego, California 92121-2133

            

    

    
      	
               
      

            	
              Telephone
      No.:  (858) 677-1400

            

    

    
      	
               
      

            	
              Facsimile
      No.:  (858) 677-1401

            

    

    
      	
               
      

            	
              Attention:  Jeff
      Baglio, Esq.

            

    

     

    
      	
              If
      to a Purchaser:

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

            

    

    

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

     

                    6.4           Amendments; Waivers; No
Additional Consideration. No provision of this Agreement may be waived or
amended except in a written instrument signed, in the case of an amendment, by
the Company and each of the Purchasers holding or having the right to acquire a
majority of the Securities on a fully-diluted basis at the time of such
amendment or, in the case of a waiver, by the party against whom enforcement of
any such waiver is sought. No waiver of any default with respect to any
provision, condition or requirement of this Agreement shall be deemed to be a
continuing waiver in the future or a waiver of any 

     

    
      
        
        

      

      
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    subsequent
default or a waiver of any other provision, condition or requirement hereof, nor
shall any delay or omission of either party to exercise any right hereunder in
any manner impair the exercise of any such right. No consideration shall be
offered or paid to any Purchaser to amend or consent to a waiver or modification
of any provision of any Transaction Document unless the same consideration is
also offered to all Purchasers who then hold Securities.

     

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

     

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

     

                    6.7           No Third-Party
Beneficiaries. This Agreement is intended for the benefit of the parties
hereto and their respective successors and permitted assigns and is not for the
benefit of, nor may any provision hereof be enforced by, any other
Person.

     

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

     

                    6.9           Survival. Subject to
applicable statute of limitations, the representations, warranties, agreements
and covenants contained herein shall survive the Closing and the delivery of the
Shares and Warrants, except that the representations and warranties contained
herein shall terminate upon the one-year anniversary of the Closing
Date.

     

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

     

    
      
        
        

      

      
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    party
executing (or on whose behalf such signature is executed) with the same force
and effect as if such facsimile signature page were an original
thereof.

     

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

     

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

     

                    6.13           Remedies. In addition
to being entitled to exercise all rights provided herein or granted by law,
including recovery of damages, each of the Purchasers and the Company will be
entitled to specific performance under the Transaction Documents. The parties
agree that monetary damages may not be adequate compensation for any loss
incurred by reason of any breach of obligations described in the foregoing
sentence and hereby agree to waive in any action for specific performance of any
such obligation (other than in connection with any action for a temporary
restraining order) the defense that a remedy at law would be
adequate.

     

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

     

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

     

                    6.16           Independent Nature of
Purchasers’ Obligations and Rights. The obligations of each Purchaser
under any Transaction Document are several and not joint with the obligations of
any other Purchaser, and no Purchaser shall be responsible in any way for the
performance of the obligations of any other Purchaser under any Transaction
Document.  The decision of each Purchaser to purchase Securities
pursuant to the Transaction Documents has been made by such Purchaser
independently of any other Purchaser and independently of any information,
materials, statements or opinions as to the business, affairs, operations,
assets, properties, liabilities, results of operations, condition (financial or
otherwise) or prospects of the Company or any Subsidiary which may have been
made or given by any other Purchaser or by any agent or employee of any other
Purchaser, and no Purchaser and any of its agents or employees shall have

     

    
      
        
        

      

      
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    any
liability to any other Purchaser (or any other Person) relating to or arising
from any such information, materials, statement or opinions.  Nothing
contained herein or in any Transaction Document, and no action taken by any
Purchaser pursuant thereto, shall be deemed to constitute the Purchasers as a
partnership, an association, a joint venture or any other kind of entity, or
create a presumption that the Purchasers are in any way acting in concert or as
a group with respect to such obligations or the transactions contemplated by the
Transaction Documents.  Each Purchaser acknowledges that no other
Purchaser has acted as agent for such Purchaser in connection with making its
investment hereunder and that no Purchaser will be acting as agent of such
Purchaser in connection with monitoring its investment in the Securities or
enforcing its rights under the Transaction Documents.  Each Purchaser
shall be entitled to independently protect and enforce its rights, including
without limitation the rights arising out of this Agreement or out of the other
Transaction Documents, and it shall not be necessary for any other Purchaser to
be joined as an additional party in any proceeding for such
purpose.  Each Purchaser has been represented by its own separate
legal counsel in its review and negotiation of the Transaction
Documents.  For reasons of administrative convenience only, Purchasers
and their respective counsels have chosen to communicate with the Company
through [_______].  The Company has elected to provide all Purchasers
with the same terms and Transaction Documents for the convenience of the Company
and not because it was required or requested to do so by any
Purchaser.

     

                    6.17           Termination. This
Agreement may be terminated and the sale and purchase of the Shares and Warrants
abandoned at any time prior to the Closing by either the Company or any
Purchaser (with respect to itself only) upon written notice to the other, if the
Closing has not been consummated on or prior to 5:00 p.m., New York City time,
on the Outside Date; provided,
however, that the right to terminate this Agreement under this
Section 6.17 shall not be available to any Person whose failure to comply
with its obligations under this Agreement has been the cause of or resulted in
the failure of the Closing to occur on or before such time.  Nothing
in this Section 6.17 shall be deemed to release any party from any
liability for any breach by such party of the terms and provisions of this
Agreement or the other Transaction Documents or to impair the right of any party
to compel specific performance by any other party of its obligations under this
Agreement or the other Transaction Documents. In the event of a termination
pursuant to this Section, the Company shall promptly notify all non-terminating
Purchasers and the Escrow Agent. Upon a termination in accordance with this
Section, the Company and the terminating Purchaser(s) shall not have any further
obligation or liability (including arising from such termination) to the other,
and no Purchaser will have any liability to any other Purchaser under the
Transaction Documents as a result therefrom.

     

                    6.18           Waiver of Conflicts.
Each party to this Agreement acknowledges that Company Counsel, outside general
counsel to the Company, has in the past performed and is or may now or in the
future represent one or more Purchasers or their affiliates in matters unrelated
to the transactions contemplated by the Transaction Documents, including
representation of such Purchasers or their affiliates in matters of a similar
nature to the transactions contemplated by the Transaction Documents. The
applicable rules of professional conduct require that Company Counsel inform the
parties hereunder of this representation and obtain their consent. Company
Counsel has served as outside general counsel to the Company and has negotiated
the terms of the transactions contemplated by the Transaction Documents solely
on behalf of the Company. The Company and each Purchaser hereby
(a) acknowledge that they have had an opportunity to ask for and have
obtained information relevant to such representation, including disclosure of
the reasonably foreseeable adverse consequences of such representation;
(b) acknowledge that with respect to the transactions contemplated by the
Transaction Documents, Company Counsel has represented solely the Company, and
not any Purchaser or any stockholder, director or employee of the Company or any
Purchaser; and (c) gives its informed consent to Company Counsel’s
representation of the Company in the transactions contemplated by the
Transaction Documents.

     

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

    

    
      
        
           

        

        
          27

          
            

          

        

        
           

        

      

    

    

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

     

    CYTORI
THERAPEUTICS, INC.

     

    
      	
               
      

            	
              By:

            	
              /s/ Mark E. Saad        

            	 

    

    
      	
               
      

            	
              Name:  Mark
      E. Saad

            

    

    
      	
               
      

            	
              Title:  Chief
      Financial Officer

            

    

     

    

     

    [REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]

     

    [SIGNATURE
PAGES FOR PURCHASERS FOLLOW]

     

     

     

     

     

     

     

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    NAME OF
PURCHASER: Walter Cruttenden

    

    

    

    By:   /s/ Walter Cruttenden                                                                     

    Name:

    Title:

    

     

    Aggregate
Purchase Price (Subscription Amount): $500,000

     

    Number of
Shares to be Acquired: 219,298

     

    Underlying
Shares Subject to Warrant: 383,772

     

    (175% of
the number of Shares to be acquired)

     

    Tax ID
No.: ____________________

     

    Address for Notice:

     

    __________________________________

    __________________________________

    __________________________________

    

    Telephone
No.:   _______________________

    

    Facsimile
No.:   ________________________

    

    E-mail
Address:   ________________________

    

    Attention:  _______________________

    

    

    Delivery
Instructions:

    (if
different than above)

    

    c/o  _______________________________

    

    Street:   ____________________________

    

    City/State/Zip:
______________________

    

    Attention:
__________________________

    

    Telephone
No.: ____________________________

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    
      

      NAME OF
PURCHASER: Genet Family 2007 Opportunity Trust 

      

      

      

      By:   /s/ Benjamin
Genet                                                                     

      Name:  Benjamin
Genet

      Title:  Trustee

      

       

      Aggregate
Purchase Price (Subscription Amount): $400,000

       

      Number of
Shares to be Acquired: 175,439

       

      Underlying
Shares Subject to Warrant: 307,019

      (175% of
the number of Shares to be acquired)

       

      Tax ID
No.: ____________________

       

      Address for Notice:

       

      __________________________________

      __________________________________

      __________________________________

      

      Telephone
No.:   _______________________

      

      Facsimile
No.:   ________________________

      

      E-mail
Address:   ________________________

      

      Attention:  _______________________

      

      

      Delivery
Instructions:

      (if
different than above)

      

      c/o  _______________________________

      

      Street:   ____________________________

      

      City/State/Zip:
______________________

      

      Attention:
__________________________

      

      Telephone
No.: ____________________________

      

      
        
          
             

          

          
             

            
              

            

          

          
             

          

        

      

      
        

        NAME OF
PURCHASER: Thomas R. Speno

        

        

        

        By:   /s/ Thomas R. Speno                                                                     

        Name:

        Title:

        

         

        Aggregate
Purchase Price (Subscription Amount): $342,000

         

        Number of
Shares to be Acquired: 150,000

         

         

        Underlying
Shares Subject to Warrant: 262,500

        (175% of
the number of Shares to be acquired)

         

        Tax ID
No.: ____________________

         

        Address for Notice:

         

        __________________________________

        __________________________________

        __________________________________

        

        Telephone
No.:   _______________________

        

        Facsimile
No.:   ________________________

        

        E-mail
Address:   ________________________

        

        Attention:  _______________________

        

        

        Delivery
Instructions:

        (if
different than above)

        

        c/o  _______________________________

        

        Street:   ____________________________

        

        City/State/Zip:
______________________

        

        Attention:
__________________________

        

        Telephone
No.: ____________________________

        

        
          
            
               

            

            
               

              
                

              

            

            
               

            

          

        

        

        

        NAME OF
PURCHASER: Michael G. Masarek 2008 Grantor Retained Annuity Trust UAD
4/24/08

        

        

        

        By:   /s/ Michael
Masarek                                                                 

        Name:  Michael
Masarek

        Title:  Trustee

        

         

        Aggregate
Purchase Price (Subscription Amount): $300,000

         

        Number of
Shares to be Acquired: 131,579

         

         

        Underlying
Shares Subject to Warrant: 230,264

         

        (175% of
the number of Shares to be acquired)

         

        Tax ID
No.: ____________________

         

        Address for Notice:

         

        __________________________________

        __________________________________

        __________________________________

        

        Telephone
No.:   _______________________

        

        Facsimile
No.:   ________________________

        

        E-mail
Address:   ________________________

        

        Attention:  _______________________

        

        

        Delivery
Instructions:

        (if
different than above)

        

        c/o  _______________________________

        

        Street:   ____________________________

        

        City/State/Zip:
______________________

        

        Attention:
__________________________

        

        Telephone
No.: ____________________________

        

        
          
            
               

            

            
               

              
                

              

            

            
               

            

          

        

        

        

        NAME OF
PURCHASER: Robert M. Schneider

        

        

        

        By:   /s/ Robert M.
Schneider                                                                 

        Name:

        Title:

        

         

        Aggregate
Purchase Price (Subscription Amount): $250,800

         

        Number of
Shares to be Acquired: 110,000

         

         

        Underlying
Shares Subject to Warrant: 192,500

         

        (175% of
the number of Shares to be acquired)

         

        Tax ID
No.: ____________________

         

        Address for Notice:

         

        __________________________________

        __________________________________

        __________________________________

        

        Telephone
No.:   _______________________

        

        Facsimile
No.:   ________________________

        

        E-mail
Address:   ________________________

        

        Attention:  _______________________

        

        

        Delivery
Instructions:

        (if
different than above)

        

        c/o  _______________________________

        

        Street:   ____________________________

        

        City/State/Zip:
______________________

        

        Attention:
__________________________

        

        Telephone
No.: ____________________________

        

        
          
            
               

            

            
               

              
                

              

            

            
               

            

          

        

        

        

        NAME OF
PURCHASER: Gagnon Investment Associates Master Fund

        

        

        

        By:     /s/ Neil
Gagnon                                                               

        Name:  Neil Gagnon

        Title:  Managing
Member

        

         

        Aggregate
Purchase Price (Subscription Amount): $250,000

         

        Number of
Shares to be Acquired: 109,649

         

         

        Underlying
Shares Subject to Warrant: 191,886

         

        (175% of
the number of Shares to be acquired)

         

        Tax ID
No.: ____________________

         

        Address for Notice:

         

        __________________________________

        __________________________________

        __________________________________

        

        Telephone
No.:   _______________________

        

        Facsimile
No.:   ________________________

        

        E-mail
Address:   ________________________

        

        Attention:  _______________________

        

        

        Delivery
Instructions:

        (if
different than above)

        

        c/o  _______________________________

        

        Street:   ____________________________

        

        City/State/Zip:
______________________

        

        Attention:
__________________________

        

        Telephone
No.: ____________________________

        

        
          
            
               

            

            
               

              
                

              

            

            
               

            

          

        

        

        

        NAME OF
PURCHASER: London Family Trust

        

        

        

        By:   /s/ Robert
S. London                                                                 

        Name:  Robert S.
London

        Title:  Trustee

        

         

        Aggregate
Purchase Price (Subscription Amount): $228,000

         

        Number of
Shares to be Acquired: 100,000

         

         

        Underlying
Shares Subject to Warrant: 175,000

         

        (175% of
the number of Shares to be acquired)

         

        Tax ID
No.: ____________________

         

        Address for Notice:

         

        __________________________________

        __________________________________

        __________________________________

        

        Telephone
No.:   _______________________

        

        Facsimile
No.:   ________________________

        

        E-mail
Address:   ________________________

        

        Attention:  _______________________

        

        

        Delivery
Instructions:

        (if
different than above)

        

        c/o  _______________________________

        

        Street:   ____________________________

        

        City/State/Zip:
______________________

        

        Attention:
__________________________

        

        Telephone
No.: ____________________________

        

        
          
            
               

            

            
               

              
                

              

            

            
               

            

          

        

        

        

        NAME OF
PURCHASER: M. Stephen Jackman Trust

        

        

        

        By:   /s/ M. Stephen Jackman                                                                     

        Name:  M. Stephen
Jackman

        Title:  Trustee

        

         

        Aggregate
Purchase Price (Subscription Amount): $215,960

         

        Number of
Shares to be Acquired: 94,719

         

        Underlying
Shares Subject to Warrant: 165,759

         

        (175% of
the number of Shares to be acquired)

         

        Tax ID
No.: ____________________

         

        Address for Notice:

         

        __________________________________

        __________________________________

        __________________________________

        

        Telephone
No.:   _______________________

        

        Facsimile
No.:   ________________________

        

        E-mail
Address:   ________________________

        

        Attention:  _______________________

        

        

        Delivery
Instructions:

        (if
different than above)

        

        c/o  _______________________________

        

        Street:   ____________________________

        

        City/State/Zip:
______________________

        

        Attention:
__________________________

        

        Telephone
No.: ____________________________

        

        
          
            
               

            

            
               

              
                

              

            

            
               

            

          

        

        

        

        NAME OF
PURCHASER: David Sonenberg

        

        

        By:   /s/ David
Sonenberg                                                                

        Name:  

        Title:

        

         

        Aggregate
Purchase Price (Subscription Amount): $200,000

         

        Number of
Shares to be Acquired: 87,719

         

         

        Underlying
Shares Subject to Warrant: 153,509

         

        (175% of
the number of Shares to be acquired)

         

        Tax ID
No.: ____________________

         

        Address for Notice:

         

        __________________________________

        __________________________________

        __________________________________

        

        Telephone
No.:   _______________________

        

        Facsimile
No.:   ________________________

        

        E-mail
Address:   ________________________

        

        Attention:  _______________________

        

        

        Delivery
Instructions:

        (if
different than above)

        

        c/o  _______________________________

        

        Street:   ____________________________

        

        City/State/Zip:
______________________

        

        Attention:
__________________________

        

        Telephone
No.: ____________________________

        

        
          
            
               

            

            
               

              
                

              

            

            
               

            

          

        

        

        

        NAME OF
PURCHASER: Neil Gagnon

        

        

        

        By:    /s/ Neil
Gagnon                                                                

        Name:

        Title:

        

         

        Aggregate
Purchase Price (Subscription Amount): $150,000

         

        Number of
Shares to be Acquired: 65,789

         

        Underlying
Shares Subject to Warrant: 115,131

         

        (175% of
the number of Shares to be acquired)

         

        Tax ID
No.: ____________________

         

        Address for Notice:

         

        __________________________________

        __________________________________

        __________________________________

        

        Telephone
No.:   _______________________

        

        Facsimile
No.:   ________________________

        

        E-mail
Address:   ________________________

        

        Attention:  _______________________

        

        

        Delivery
Instructions:

        (if
different than above)

        

        c/o  _______________________________

        

        Street:   ____________________________

        

        City/State/Zip:
______________________

        

        Attention:
__________________________

        

        Telephone
No.: ____________________________

        

        
          
            
               

            

            
               

              
                

              

            

            
               

            

          

        

        

        

        NAME OF
PURCHASER: David B. Schulman

        

        

        

        By:   /s/ David B. Schulman                                                                     

        Name:

        Title:

        

         

        Aggregate
Purchase Price (Subscription Amount): $114,000

         

        Number of
Shares to be Acquired: 50,000

         

         

        Underlying
Shares Subject to Warrant: 87,500

         

        (175% of
the number of Shares to be acquired)

         

        Tax ID
No.: ____________________

         

        Address for Notice:

         

        __________________________________

        __________________________________

        __________________________________

        

        Telephone
No.:   _______________________

        

        Facsimile
No.:   ________________________

        

        E-mail
Address:   ________________________

        

        Attention:  _______________________

        

        

        Delivery
Instructions:

        (if
different than above)

        

        c/o  _______________________________

        

        Street:   ____________________________

        

        City/State/Zip:
______________________

        

        Attention:
__________________________

        

        Telephone
No.: ____________________________

        

        
          
            
               

            

            
               

              
                

              

            

            
               

            

          

        

        

        

        NAME OF
PURCHASER: Lois Gagnon

        

        

        By:   /s/ Lois
Gagnon                                                                  

        Name:

        Title:

        

         

        Aggregate
Purchase Price (Subscription Amount): $100,000

         

        Number of
Shares to be Acquired: 43,860

         

         

        Underlying
Shares Subject to Warrant: 76,755

         

        (175% of
the number of Shares to be acquired)

         

        Tax ID
No.: ____________________

         

        Address for Notice:

         

        __________________________________

        __________________________________

        __________________________________

        

        Telephone
No.:   _______________________

        

        Facsimile
No.:   ________________________

        

        E-mail
Address:   ________________________

        

        Attention:  _______________________

        

        

        Delivery
Instructions:

        (if
different than above)

        

        c/o  _______________________________

        

        Street:   ____________________________

        

        City/State/Zip:
______________________

        

        Attention:
__________________________

        

        Telephone
No.: ____________________________

        

        
          
            
               

            

            
               

              
                

              

            

            
               

            

          

        

         

        
          
            NAME OF
PURCHASER: Manuel F. Mair

            

            

            By:   /s/ Manuel
F. Mair                                                                  

            Name:

            Title:

            

             

            Aggregate
Purchase Price (Subscription Amount): $100,000

             

            Number of
Shares to be Acquired: 43,860

             

             

            Underlying
Shares Subject to Warrant: 76,755

             

            (175% of
the number of Shares to be acquired)

             

            Tax ID
No.: ____________________

             

            Address for Notice:

             

            __________________________________

            __________________________________

            __________________________________

            

            Telephone
No.:   _______________________

            

            Facsimile
No.:   ________________________

            

            E-mail
Address:   ________________________

            

            Attention:  _______________________

            

            

            Delivery
Instructions:

            (if
different than above)

            

            c/o  _______________________________

            

            Street:   ____________________________

            

            City/State/Zip:
______________________

            

            Attention:
__________________________

            

            Telephone
No.: ____________________________

            

            
              
                
                   

                

                
                   

                  
                    

                  

                

                
                   

                

              

               

              NAME OF
PURCHASER: Perry Isenberg

              

              

              By:   /s/ Perry
Isenberg                                                                 

              Name:

              Title:

              

               

              Aggregate
Purchase Price (Subscription Amount): $100,000

               

              Number of
Shares to be Acquired: 43,860

               

               

              Underlying
Shares Subject to Warrant: 76,755

               

              (175% of
the number of Shares to be acquired)

               

              Tax ID
No.: ____________________

               

              Address for Notice:

               

              __________________________________

              __________________________________

              __________________________________

              

              Telephone
No.:   _______________________

              

              Facsimile
No.:   ________________________

              

              E-mail
Address:   ________________________

              

              Attention:  _______________________

              

              

              Delivery
Instructions:

              (if
different than above)

              

              c/o  _______________________________

              

              Street:   ____________________________

              

              City/State/Zip:
______________________

              

              Attention:
__________________________

              

              Telephone
No.: ____________________________

              

              
                
                  
                     

                  

                  
                     

                    
                      

                    

                  

                  
                     

                  

                

                 

                NAME OF
PURCHASER: Peter E. Lacey

                

                

                By:   /s/ Peter E.
Lacey                                                                  

                Name:

                Title:

                

                 

                Aggregate
Purchase Price (Subscription Amount): $100,000

                 

                Number of
Shares to be Acquired: 43,860

                 

                 

                Underlying
Shares Subject to Warrant: 76,755

                 

                (175% of
the number of Shares to be acquired)

                 

                Tax ID
No.: ____________________

                 

                Address for Notice:

                 

                __________________________________

                __________________________________

                __________________________________

                

                Telephone
No.:   _______________________

                

                Facsimile
No.:   ________________________

                

                E-mail
Address:   ________________________

                

                Attention:  _______________________

                

                

                Delivery
Instructions:

                (if
different than above)

                

                c/o  _______________________________

                

                Street:   ____________________________

                

                City/State/Zip:
______________________

                

                Attention:
__________________________

                

                Telephone
No.: ____________________________

                

                
                  
                    
                       

                    

                    
                       

                      
                        

                      

                    

                    
                       

                    

                  

              

            

          

        

        NAME OF
PURCHASER: Alfred Sacks

        

        

        

        By:   /s/ Alfred Sacks                                                                         

        Name:

        Title:

        

         

        Aggregate
Purchase Price (Subscription Amount): $75,000

         

        Number of
Shares to be Acquired: 32,895

         

         

        Underlying
Shares Subject to Warrant: 57,567

        (175% of
the number of Shares to be acquired)

         

        Tax ID
No.: ____________________

         

        Address for Notice:

         

        __________________________________

        __________________________________

        __________________________________

        

        Telephone
No.:   _______________________

        

        Facsimile
No.:   ________________________

        

        E-mail
Address:   ________________________

        

        Attention:  _______________________

        

        

        Delivery
Instructions:

        (if
different than above)

        

        c/o  _______________________________

        

        Street:   ____________________________

        

        City/State/Zip:
______________________

        

        Attention:
__________________________

        

        Telephone
No.: ____________________________

        

        
          
            
               

            

            
               

              
                

              

            

            
               

            

          

        

        

          NAME OF
PURCHASER: Evan J. Brody

          

          

          

          By:   /s/ Evan J. Brody                                                                         

          Name:

          Title:

          

           

          Aggregate
Purchase Price (Subscription Amount): $75,000

           

          Number of
Shares to be Acquired: 32,895

           

           

          Underlying
Shares Subject to Warrant: 57,567

          (175% of
the number of Shares to be acquired)

           

          Tax ID
No.: ____________________

           

          Address for Notice:

           

          __________________________________

          __________________________________

          __________________________________

          

          Telephone
No.:   _______________________

          

          Facsimile
No.:   ________________________

          

          E-mail
Address:   ________________________

          

          Attention:  _______________________

          

          

          Delivery
Instructions:

          (if
different than above)

          

          c/o  _______________________________

          

          Street:   ____________________________

          

          City/State/Zip:
______________________

          

          Attention:
__________________________

          

          Telephone
No.: ____________________________

          

          
            
              
                 

              

              
                 

                
                  

                

              

              
                 

              

            

          

          

        

        

        NAME OF
PURCHASER: Darren and Tara Levine, JTWROS

        

        

        

        By:    /s/ Darren Levine                                                     

         

        
          By:    /s/ Tara Levine                                                                    

          Name:

        

        Title:

        

         

        Aggregate
Purchase Price (Subscription Amount): $68,400

         

        Number of
Shares to be Acquired: 30,000

         

         

        Underlying
Shares Subject to Warrant: 52,500

        (175% of
the number of Shares to be acquired)

         

        Tax ID
No.: ____________________

         

        Address for Notice:

         

        __________________________________

        __________________________________

        __________________________________

        

        Telephone
No.:   _______________________

        

        Facsimile
No.:   ________________________

        

        E-mail
Address:   ________________________

        

        Attention:  _______________________

        

        

        Delivery
Instructions:

        (if
different than above)

        

        c/o  _______________________________

        

        Street:   ____________________________

        

        City/State/Zip:
______________________

        

        Attention:
__________________________

        

        Telephone
No.: ____________________________

        

        
          
            
               

            

            
               

              
                

              

            

            
               

            

          

        

        

        

        NAME OF
PURCHASER: John Collins

        

        

        

        By:   /s/ John Collins                                                                         

        Name:

        Title:

        

         

        Aggregate
Purchase Price (Subscription Amount): $57,000

         

        Number of
Shares to be Acquired: 25,000

         

         

        Underlying
Shares Subject to Warrant: 43,750

         

        (175% of
the number of Shares to be acquired)

         

        Tax ID
No.: ____________________

         

        Address for Notice:

         

        __________________________________

        __________________________________

        __________________________________

        

        Telephone
No.:   _______________________

        

        Facsimile
No.:   ________________________

        

        E-mail
Address:   ________________________

        

        Attention:  _______________________

        

        

        Delivery
Instructions:

        (if
different than above)

        

        c/o  _______________________________

        

        Street:   ____________________________

        

        City/State/Zip:
______________________

        

        Attention:
__________________________

        

        Telephone
No.: ____________________________

        

        
          
            
               

            

            
               

              
                

              

            

            
               

            

          

        

        

        

        NAME OF
PURCHASER: Ronald Henriksen

        

        

        

        By:  /s/ Ronald Henriksen                                                                      

        Name:

        Title:

        

         

        Aggregate
Purchase Price (Subscription Amount): $50,160

         

        Number of
Shares to be Acquired: 22,000

         

        Underlying
Shares Subject to Warrant: 38,500

         

        (175% of
the number of Shares to be acquired)

         

        Tax ID
No.: ____________________

         

        Address for Notice:

         

        __________________________________

        __________________________________

        __________________________________

        

        Telephone
No.:   _______________________

        

        Facsimile
No.:   ________________________

        

        E-mail
Address:   ________________________

        

        Attention:  _______________________

        

        

        Delivery
Instructions:

        (if
different than above)

        

        c/o  _______________________________

        

        Street:   ____________________________

        

        City/State/Zip:
______________________

        

        Attention:
__________________________

        

        Telephone
No.: ____________________________

        

        
          
            
               

            

            
               

              
                

              

            

            
               

            

          

        

        

        

        NAME OF
PURCHASER: Alan Rutner

        

        

        

        By:   /s/ Alan Rutner                                                                      

        Name:

        Title:

        

         

        Aggregate
Purchase Price (Subscription Amount): $50,000

         

        Number of
Shares to be Acquired: 21,930

         

         

        Underlying
Shares Subject to Warrant: 38,378

         

        (175% of
the number of Shares to be acquired)

         

        Tax ID
No.: ____________________

         

        Address for Notice:

         

        __________________________________

        __________________________________

        __________________________________

        

        Telephone
No.:   _______________________

        

        Facsimile
No.:   ________________________

        

        E-mail
Address:   ________________________

        

        Attention:  _______________________

        

        

        Delivery
Instructions:

        (if
different than above)

        

        c/o  _______________________________

        

        Street:   ____________________________

        

        City/State/Zip:
______________________

        

        Attention:
__________________________

        

        Telephone
No.: ____________________________

        

        
          
            
               

            

            
               

              
                

              

            

            
               

            

          

        

        
          

          

          NAME OF
PURCHASER: Lisa J. Burley Revocable Trust

          

          

          

          By:   /s/ Lisa J. Burley                                                                          

          Name:  Lisa J.
Burley

          Title:  Trustee

          

           

          Aggregate
Purchase Price (Subscription Amount): $50,000

           

          Number of
Shares to be Acquired: 21,930

           

           

          Underlying
Shares Subject to Warrant: 38,378

           

          (175% of
the number of Shares to be acquired)

           

          Tax ID
No.: ____________________

           

          Address for Notice:

           

          __________________________________

          __________________________________

          __________________________________

          

          Telephone
No.:   _______________________

          

          Facsimile
No.:   ________________________

          

          E-mail
Address:   ________________________

          

          Attention:  _______________________

          

          

          Delivery
Instructions:

          (if
different than above)

          

          c/o  _______________________________

          

          Street:   ____________________________

          

          City/State/Zip:
______________________

          

          Attention:
__________________________

          

          Telephone
No.: ____________________________

          

          
            
              
                 

              

              
                 

                
                  

                

              

              
                 

              

            

          

          
            
 

            NAME OF
PURCHASER: Randy M. Bennis

            

            

            

            By:   /s/ Randy M. Bennis                                                                          

            Name:

            Title:

            

             

            Aggregate
Purchase Price (Subscription Amount): $50,000

             

            Number of
Shares to be Acquired: 21,930

             

             

            Underlying
Shares Subject to Warrant: 38,378

             

            (175% of
the number of Shares to be acquired)

             

            Tax ID
No.: ____________________

             

            Address for Notice:

             

            __________________________________

            __________________________________

            __________________________________

            

            Telephone
No.:   _______________________

            

            Facsimile
No.:   ________________________

            

            E-mail
Address:   ________________________

            

            Attention:  _______________________

            

            

            Delivery
Instructions:

            (if
different than above)

            

            c/o  _______________________________

            

            Street:   ____________________________

            

            City/State/Zip:
______________________

            

            Attention:
__________________________

            

            Telephone
No.: ____________________________

            

            
              
                
                   

                

                
                   

                  
                    

                  

                

                
                   

                

              

            

            
              
 

              NAME OF
PURCHASER: Marc Hedrick

              

              

              

              By:   /s/ Marc Hedrick                                                                          

              Name:

              Title:

              

               

              Aggregate
Purchase Price (Subscription Amount): $45,600

               

              Number of
Shares to be Acquired: 20,000

               

               

              Underlying
Shares Subject to Warrant: 35,000

               

              (175% of
the number of Shares to be acquired)

               

              Tax ID
No.: ____________________

               

              Address for Notice:

               

              __________________________________

              __________________________________

              __________________________________

              

              Telephone
No.:   _______________________

              

              Facsimile
No.:   ________________________

              

              E-mail
Address:   ________________________

              

              Attention:  _______________________

              

              

              Delivery
Instructions:

              (if
different than above)

              

              c/o  _______________________________

              

              Street:   ____________________________

              

              City/State/Zip:
______________________

              

              Attention:
__________________________

              

              Telephone
No.: ____________________________

              

              
                
                  
                     

                  

                  
                     

                    
                      

                    

                  

                  
                     

                  

                

              

              

                
                  
 

                  NAME OF
PURCHASER: Ronald Stricoff

                  

                  

                  

                  By:   /s/ Ronald Stricoff                                                                          

                  Name:

                  Title:

                  

                   

                  Aggregate
Purchase Price (Subscription Amount): $45,600

                   

                  Number of
Shares to be Acquired: 20,000

                   

                   

                  Underlying
Shares Subject to Warrant: 35,000

                   

                  (175% of
the number of Shares to be acquired)

                   

                  Tax ID
No.: ____________________

                   

                  Address for Notice:

                   

                  __________________________________

                  __________________________________

                  __________________________________

                  

                  Telephone
No.:   _______________________

                  

                  Facsimile
No.:   ________________________

                  

                  E-mail
Address:   ________________________

                  

                  Attention:  _______________________

                  

                  

                  Delivery
Instructions:

                  (if
different than above)

                  

                  c/o  _______________________________

                  

                  Street:   ____________________________

                  

                  City/State/Zip:
______________________

                  

                  Attention:
__________________________

                  

                  Telephone
No.: ____________________________

                  

                  
                    
                      
                         

                      

                      
                         

                        
                          

                        

                      

                      
                         

                      

                    

                  

                  

 

                

                NAME OF
PURCHASER: Andrea Philippou

                

                

                By:   /s/ Andrea Philippou                                                                          

                Name:

                Title:

                

                 

                Aggregate
Purchase Price (Subscription Amount): $45,000

                 

                Number of
Shares to be Acquired: 19,737

                 

                 

                Underlying
Shares Subject to Warrant: 34,540

                 

                (175% of
the number of Shares to be acquired)

                 

                Tax ID
No.: ____________________

                 

                Address for Notice:

                 

                __________________________________

                __________________________________

                __________________________________

                

                Telephone
No.:   _______________________

                

                Facsimile
No.:   ________________________

                

                E-mail
Address:   ________________________

                

                Attention:  _______________________

                

                

                Delivery
Instructions:

                (if
different than above)

                

                c/o  _______________________________

                

                Street:   ____________________________

                

                City/State/Zip:
______________________

                

                Attention:
__________________________

                

                Telephone
No.: ____________________________

                

                
                  
                    
                       

                    

                    
                       

                      
                        

                      

                    

                    
                       

                    

                  

                

                
                  
 

                  NAME OF
PURCHASER: Angel Martinez

                  

                  

                  

                  By:   /s/ Angel Martinez                                                                          

                  Name:

                  Title:

                  

                   

                  Aggregate
Purchase Price (Subscription Amount): $30,000

                   

                  Number of
Shares to be Acquired: 13,158

                   

                   

                  Underlying
Shares Subject to Warrant: 23,027

                   

                  (175% of
the number of Shares to be acquired)

                   

                  Tax ID
No.: ____________________

                   

                  Address for Notice:

                   

                  __________________________________

                  __________________________________

                  __________________________________

                  

                  Telephone
No.:   _______________________

                  

                  Facsimile
No.:   ________________________

                  

                  E-mail
Address:   ________________________

                  

                  Attention:  _______________________

                  

                  

                  Delivery
Instructions:

                  (if
different than above)

                  

                  c/o  _______________________________

                  

                  Street:   ____________________________

                  

                  City/State/Zip:
______________________

                  

                  Attention:
__________________________

                  

                  Telephone
No.: ____________________________

                  

                  
                    
                      
                         

                      

                      
                         

                        
                          

                        

                      

                      
                         

                      

                    

                  

                  
                    
 

                    NAME OF
PURCHASER: Gregory J. Randazza

                    

                    

                    

                    By:   /s/ Gregory J. Randazza                                                                          

                    Name:

                    Title:

                    

                     

                    Aggregate
Purchase Price (Subscription Amount): $30,000

                     

                    Number of
Shares to be Acquired: 13,158

                     

                     

                    Underlying
Shares Subject to Warrant: 23,027

                     

                    (175% of
the number of Shares to be acquired)

                     

                    Tax ID
No.: ____________________

                     

                    Address for Notice:

                     

                    __________________________________

                    __________________________________

                    __________________________________

                    

                    Telephone
No.:   _______________________

                    

                    Facsimile
No.:   ________________________

                    

                    E-mail
Address:   ________________________

                    

                    Attention:  _______________________

                    

                    

                    Delivery
Instructions:

                    (if
different than above)

                    

                    c/o  _______________________________

                    

                    Street:   ____________________________

                    

                    City/State/Zip:
______________________

                    

                    Attention:
__________________________

                    

                    Telephone
No.: ____________________________

                    

                    
                      
                        
                           

                        

                        
                           

                          
                            

                          

                        

                        
                           

                        

                      

                    

                    

                    
 

                    NAME OF
PURCHASER: Bob Friedman

                    

                    

                    

                    By:   /s/ Bob Friedman                                                                          

                    Name:

                    Title:

                    

                     

                    Aggregate
Purchase Price (Subscription Amount): $25,080

                     

                    Number of
Shares to be Acquired: 11,000

                     

                    Underlying
Shares Subject to Warrant: 19,250

                     

                    (175% of
the number of Shares to be acquired)

                     

                    Tax ID
No.: ____________________

                     

                    Address for Notice:

                     

                    __________________________________

                    __________________________________

                    __________________________________

                    

                    Telephone
No.:   _______________________

                    

                    Facsimile
No.:   ________________________

                    

                    E-mail
Address:   ________________________

                    

                    Attention:  _______________________

                    

                    

                    Delivery
Instructions:

                    (if
different than above)

                    

                    c/o  _______________________________

                    

                    Street:   ____________________________

                    

                    City/State/Zip:
______________________

                    

                    Attention:
__________________________

                    

                    Telephone
No.: ____________________________

                    

                    
                      
                        
                           

                        

                        
                           

                          
                            

                          

                        

                        
                           

                        

                      

                    

                    

                       

                      NAME OF
PURCHASER: 1999 Garfinkle Family Trust

                      

                      

                      

                      By:   /s/ Marla Garfinkle                                                                          

                      Name:  Marla
Garfinkle

                      Title:  Trustee

                      

                       

                      Aggregate
Purchase Price (Subscription Amount): $25,000

                       

                      Number of
Shares to be Acquired: 10,965

                       

                       

                      Underlying
Shares Subject to Warrant: 19,189

                       

                      (175% of
the number of Shares to be acquired)

                       

                      Tax ID
No.: ____________________

                       

                      Address for Notice:

                       

                      __________________________________

                      __________________________________

                      __________________________________

                      

                      Telephone
No.:   _______________________

                      

                      Facsimile
No.:   ________________________

                      

                      E-mail
Address:   ________________________

                      

                      Attention:  _______________________

                      

                      

                      Delivery
Instructions:

                      (if
different than above)

                      

                      c/o  _______________________________

                      

                      Street:   ____________________________

                      

                      City/State/Zip:
______________________

                      

                      Attention:
__________________________

                      

                      Telephone
No.: ____________________________

                      

                      
                        
                          
                             

                          

                          
                             

                            
                              

                            

                          

                          
                             

                          

                        

                      

                      

                         

                        NAME OF
PURCHASER: Louis Berlin

                        

                        

                        

                        By:   /s/ Louis Berlin                                                                          

                        Name:  

                        Title:  

                        

                         

                        Aggregate
Purchase Price (Subscription Amount): $25,000

                         

                        Number of
Shares to be Acquired: 10,965

                         

                         

                        Underlying
Shares Subject to Warrant: 19,189

                         

                        (175% of
the number of Shares to be acquired)

                         

                        Tax ID
No.: ____________________

                         

                        Address for Notice:

                         

                        __________________________________

                        __________________________________

                        __________________________________

                        

                        Telephone
No.:   _______________________

                        

                        Facsimile
No.:   ________________________

                        

                        E-mail
Address:   ________________________

                        

                        Attention:  _______________________

                        

                        

                        Delivery
Instructions:

                        (if
different than above)

                        

                        c/o  _______________________________

                        

                        Street:   ____________________________

                        

                        City/State/Zip:
______________________

                        

                        Attention:
__________________________

                        

                        Telephone
No.: ____________________________

                        

                        
                          
                            
                               

                            

                            
                               

                              
                                

                              

                            

                            
                               

                            

                          

                        

                        

                           

                          NAME OF
PURCHASER: Sidney J. Workman

                          

                          

                          

                          By:   /s/ Sidney J. Workman                                                                          

                          Name:  

                          Title:  

                          

                           

                          Aggregate
Purchase Price (Subscription Amount): $25,000

                           

                          Number of
Shares to be Acquired: 10,965

                           

                           

                          Underlying
Shares Subject to Warrant: 19,189

                           

                          (175% of
the number of Shares to be acquired)

                           

                          Tax ID
No.: ____________________

                           

                          Address for Notice:

                           

                          __________________________________

                          __________________________________

                          __________________________________

                          

                          Telephone
No.:   _______________________

                          

                          Facsimile
No.:   ________________________

                          

                          E-mail
Address:   ________________________

                          

                          Attention:  _______________________

                          

                          

                          Delivery
Instructions:

                          (if
different than above)

                          

                          c/o  _______________________________

                          

                          Street:   ____________________________

                          

                          City/State/Zip:
______________________

                          

                          Attention:
__________________________

                          

                          Telephone
No.: ____________________________

                          

                          
                            
                              
                                 

                              

                              
                                 

                                
                                  

                                

                              

                              
                                 

                              

                            

                          

                          

                             

                            NAME OF
PURCHASER: James Garrett Schwendig M.D., Inc.

                            

                            

                            

                            By:   /s/ James Garrett Schwendig                                                                          

                            Name:  James Garrett
Schwendig

                            Title:  President

                            

                             

                            Aggregate
Purchase Price (Subscription Amount): $22,800

                             

                            Number of
Shares to be Acquired: 10,000

                             

                            Underlying
Shares Subject to Warrant: 17,500

                             

                            (175% of
the number of Shares to be acquired)

                             

                            Tax ID
No.: ____________________

                             

                            Address for Notice:

                             

                            __________________________________

                            __________________________________

                            __________________________________

                            

                            Telephone
No.:   _______________________

                            

                            Facsimile
No.:   ________________________

                            

                            E-mail
Address:   ________________________

                            

                            Attention:  _______________________

                            

                            

                            Delivery
Instructions:

                            (if
different than above)

                            

                            c/o  _______________________________

                            

                            Street:   ____________________________

                            

                            City/State/Zip:
______________________

                            

                            Attention:
__________________________

                            

                            Telephone
No.: ____________________________

                            

                            
                              
                                
                                   

                                

                                
                                   

                                  
                                    

                                  

                                

                                
                                   

                                

                              

                            

                            

                               

                              NAME OF
PURCHASER: Kenneth J. Sobel & Debra S. Sobel, Husband and Wife as tenants by
the entireties

                              

                              

                              By:   /s/ Kenneth J. Sobel                                                                          

                              By:   /s/ Debra
S. Sobel                 

                                                                                       

                              Name:  

                              Title:  

                               

                              Aggregate
Purchase Price (Subscription Amount): $20,000

                               

                              Number of
Shares to be Acquired: 8,772

                               

                              Underlying
Shares Subject to Warrant: 15,351

                               

                              (175% of
the number of Shares to be acquired)

                               

                              Tax ID
No.: ____________________

                               

                              Address for Notice:

                               

                              __________________________________

                              __________________________________

                              __________________________________

                              

                              Telephone
No.:   _______________________

                              

                              Facsimile
No.:   ________________________

                              

                              E-mail
Address:   ________________________

                              

                              Attention:  _______________________

                              

                              

                              Delivery
Instructions:

                              (if
different than above)

                              

                              c/o  _______________________________

                              

                              Street:   ____________________________

                              

                              City/State/Zip:
______________________

                              

                              Attention:
__________________________

                              

                              Telephone
No.: ____________________________

                              

                              
                                
                                  
                                     

                                  

                                  
                                     

                                    
                                      

                                    

                                  

                                  
                                     

                                  

                                

                              

                              

                                 

                                NAME OF
PURCHASER: Mike Reuter

                                 

                                

                                By:   /s/ Mike Reuter                                                                                                                                  

                                Name:  

                                Title:  

                                 

                                Aggregate
Purchase Price (Subscription Amount): $20,000

                                 

                                Number of
Shares to be Acquired: 8,772

                                 

                                Underlying
Shares Subject to Warrant: 15,351

                                 

                                (175% of
the number of Shares to be acquired)

                                 

                                Tax ID
No.: ____________________

                                 

                                Address for Notice:

                                 

                                __________________________________

                                __________________________________

                                __________________________________

                                

                                Telephone
No.:   _______________________

                                

                                Facsimile
No.:   ________________________

                                

                                E-mail
Address:   ________________________

                                

                                Attention:  _______________________

                                

                                

                                Delivery
Instructions:

                                (if
different than above)

                                

                                c/o  _______________________________

                                

                                Street:   ____________________________

                                

                                City/State/Zip:
______________________

                                

                                Attention:
__________________________

                                

                                Telephone
No.: ____________________________

                                

                                
                                  
                                    
                                       

                                    

                                    
                                       

                                      
                                        

                                      

                                    

                                    
                                       

                                    

                                  

                                

                                

                                   

                                  NAME OF
PURCHASER: Seitlin & Company

                                   

                                  
 

                                  By:   /s/ M. Stephen Jackman                             

                                  Name:  M. Stephen
Jackman

                                  Title:  Chairman

                                   

                                  Aggregate
Purchase Price (Subscription Amount): $17,100

                                   

                                  Number of
Shares to be Acquired: 7,500

                                   

                                  Underlying
Shares Subject to Warrant: 13,125

                                   

                                  (175% of
the number of Shares to be acquired)

                                   

                                  Tax ID
No.: ____________________

                                   

                                  Address for Notice:

                                   

                                  __________________________________

                                  __________________________________

                                  __________________________________

                                  

                                  Telephone
No.:   _______________________

                                  

                                  Facsimile
No.:   ________________________

                                  

                                  E-mail
Address:   ________________________

                                  

                                  Attention:  _______________________

                                  

                                  

                                  Delivery
Instructions:

                                  (if
different than above)

                                  

                                  c/o  _______________________________

                                  

                                  Street:   ____________________________

                                  

                                  City/State/Zip:
______________________

                                  

                                  Attention:
__________________________

                                  

                                  Telephone
No.: ____________________________

                                  

                                  
                                    
                                      
                                         

                                      

                                      
                                         

                                        
                                          

                                        

                                      

                                      
                                         

                                      

                                    

                                  

                                  
                                    
                                       

                                       

                                      NAME OF
PURCHASER: Stanley R. Brenner

                                       

                                      

                                      By:   /s/ Stanley R. Brenner                

                                      Name:  

                                      Title:  

                                       

                                      Aggregate
Purchase Price (Subscription Amount): $11,400

                                       

                                      Number of
Shares to be Acquired: 5,000

                                       

                                      Underlying
Shares Subject to Warrant: 8,750

                                       

                                      (175% of
the number of Shares to be acquired)

                                       

                                      Tax ID
No.: ____________________

                                       

                                      Address for Notice:

                                       

                                      __________________________________

                                      __________________________________

                                      __________________________________

                                      

                                      Telephone
No.:   _______________________

                                      

                                      Facsimile
No.:   ________________________

                                      

                                      E-mail
Address:   ________________________

                                      

                                      Attention:  _______________________

                                      

                                      

                                      Delivery
Instructions:

                                      (if
different than above)

                                      

                                      c/o  _______________________________

                                      

                                      Street:   ____________________________

                                      

                                      City/State/Zip:
______________________

                                      

                                      Attention:
__________________________

                                      

                                      Telephone
No.: ____________________________

                                      

                                      
                                        
                                          
                                             

                                          

                                          
                                             

                                            
                                              

                                            

                                          

                                          
                                             

                                          

                                        

                                      

                                    

                                     

                                    NAME OF
PURCHASER: Alan J. Brenner

                                     

                                    

                                    By:   /s/ Alan J. Brenner                                                                                                                                  

                                    Name:  

                                    Title:  

                                     

                                    Aggregate
Purchase Price (Subscription Amount): $11,400

                                     

                                    Number of
Shares to be Acquired: 5,000

                                     

                                    Underlying
Shares Subject to Warrant: 8,750

                                     

                                    (175% of
the number of Shares to be acquired)

                                     

                                    Tax ID
No.: ____________________

                                     

                                    Address for Notice:

                                     

                                    __________________________________

                                    __________________________________

                                    __________________________________

                                    

                                    Telephone
No.:   _______________________

                                    

                                    Facsimile
No.:   ________________________

                                    

                                    E-mail
Address:   ________________________

                                    

                                    Attention:  _______________________

                                    

                                    

                                    Delivery
Instructions:

                                    (if
different than above)

                                    

                                    c/o  _______________________________

                                    

                                    Street:   ____________________________

                                    

                                    City/State/Zip:
______________________

                                    

                                    Attention:
__________________________

                                    

                                    Telephone
No.: ____________________________

                                    

                                    
                                      
                                        
                                           

                                        

                                        
                                           

                                          
                                            

                                          

                                        

                                        
                                           

                                        

                                      

                                    

                                    
                                       

                                      
                                        
                                          NAME OF
PURCHASER: Sam Katz

                                          

                                          By:   /s/ Sam
Katz                                                                  

                                          Name:

                                          Title:

                                          

                                           

                                          Aggregate
Purchase Price (Subscription Amount): $11,400

                                           

                                          Number of
Shares to be Acquired: 5,000

                                           

                                          Underlying
Shares Subject to Warrant: 8,750

                                           

                                          (175% of
the number of Shares to be acquired)

                                           

                                          Tax ID
No.: ____________________

                                           

                                          Address for Notice:

                                           

                                          __________________________________

                                          __________________________________

                                          __________________________________

                                          

                                          Telephone
No.:   _______________________

                                          

                                          Facsimile
No.:   ________________________

                                          

                                          E-mail
Address:   ________________________

                                          

                                          Attention:  _______________________

                                          

                                          

                                          Delivery
Instructions:

                                          (if
different than above)

                                          

                                          c/o  _______________________________

                                          

                                          Street:   ____________________________

                                          

                                          City/State/Zip:
______________________

                                          

                                          Attention:
__________________________

                                          

                                          Telephone
No.: ____________________________

                                          

                                          
                                            
                                              
                                                 

                                              

                                              
                                                 

                                                
                                                  

                                                

                                              

                                              
                                                 

                                              

                                            

                                             

                                          

                                        

                                      

                                       

                                      NAME OF
PURCHASER: Dave Rickey & Daughters Foundation

                                       

                                      

                                      By:   /s/ David M. Rickey                              

                                      Name:  

                                      Title:  

                                       

                                      Aggregate
Purchase Price (Subscription Amount): $10,000

                                       

                                      Number of
Shares to be Acquired: 4,386

                                       

                                      Underlying
Shares Subject to Warrant: 7,676

                                       

                                      (175% of
the number of Shares to be acquired)

                                       

                                      Tax ID
No.: ____________________

                                       

                                      Address for Notice:

                                       

                                      __________________________________

                                      __________________________________

                                      __________________________________

                                      

                                      Telephone
No.:   _______________________

                                      

                                      Facsimile
No.:   ________________________

                                      

                                      E-mail
Address:   ________________________

                                      

                                      Attention:  _______________________

                                      

                                      

                                      Delivery
Instructions:

                                      (if
different than above)

                                      

                                      c/o  _______________________________

                                      

                                      Street:   ____________________________

                                      

                                      City/State/Zip:
______________________

                                      

                                      Attention:
__________________________

                                      

                                      Telephone
No.: ____________________________

                                      

                                      
                                        
                                          
                                             

                                          

                                          
                                             

                                            
                                              

                                            

                                          

                                          
                                             

                                          

                                        

                                      

                                      
                                         

                                        NAME OF
PURCHASER: Solomon Genet

                                         

                                        

                                        By:   /s/ Solomon Genet                                                                                                                                  

                                        Name:  

                                        Title:  

                                         

                                        Aggregate
Purchase Price (Subscription Amount): $5,000

                                         

                                        Number of
Shares to be Acquired: 2,193

                                         

                                        Underlying
Shares Subject to Warrant: 3,838

                                         

                                        (175% of
the number of Shares to be acquired)

                                         

                                        Tax ID
No.: ____________________

                                         

                                        Address for Notice:

                                         

                                        __________________________________

                                        __________________________________

                                        __________________________________

                                        

                                        Telephone
No.:   _______________________

                                        

                                        Facsimile
No.:   ________________________

                                        

                                        E-mail
Address:   ________________________

                                        

                                        Attention:  _______________________

                                        

                                        

                                        Delivery
Instructions:

                                        (if
different than above)

                                        

                                        c/o  _______________________________

                                        

                                        Street:   ____________________________

                                        

                                        City/State/Zip:
______________________

                                        

                                        Attention:
__________________________

                                        

                                        Telephone
No.: ____________________________

                                        

                                        
                                          
                                            
                                               

                                            

                                            
                                               

                                              
                                                

                                              

                                            

                                            
                                               

                                            

                                          

                                        

                                        
 

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

         

      

    

    EXHIBITS

     

    A:   Form of
Warrant

    B:    Form of
Registration Rights Agreement

    C-1:       Accredited
Investor Questionnaire

    C-2:       Stock
Certificate and Warrant Questionnaire

    D:          Irrevocable
Transfer Agent Instructions

    E:           Form
of Secretary’s Certificate

    F:           Form
of Officer’s Certificate

    G:          Wire
Instructions

    

     

    SCHEDULES

     

    3.1(h)-2
SEC Reports; Disclosure Materials

    4.1(b)
Legends

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

     

    EXHIBIT
A

     

    Form of
Warrant

     

     

     

     

     

     

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

     

    EXHIBIT
B

     

    Form of
Registration Rights Agreement

     

     

     

     

     

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    Instruction
Sheet

    (to be
read in conjunction with the entire

    Securities
Purchase Agreement and Registration Rights Agreement)

    

    
      	
              A.

            	
              Complete
      the following items in the Securities Purchase Agreement and/or
      Registration Rights Agreement:

            

    

     

    
      
        
          	
                   
      

                	
                  1.

                	
                  
                    Provide
      the information regarding the Purchaser requested on the signature
      page.  The Securities
      Purchase Agreement and the Registration Rights Agreement must be executed
      by an individual authorized to bind the
      Purchaser.

                  

                

        

         

      

    

    
      	
               
      

            	
              2.

            	
              Exhibit C-1 –
      Accredited Investor Questionnaire:

            

    

    

    
      	
               
      

            	
              Provide
      the information requested by the Accredited Investor
      Questionnaire

            

    

    

    
      	
               
      

            	
              3.

            	
              Exhibit C-2
      Stock Certificate and Warrant
Questionnaire:

            

    

    

    
      	
               
      

            	
              Provide
      the information requested by the Stock Certificate and Warrant
      Questionnaire

            

    

    

    
      	
               
      

            	
              4.

            	
              Annex
      B to the Registration Rights Agreement -- Selling Securityholder Notice
      and Questionnaire

            

    

    

    
      	
               
      

            	
              Provide
      the information requested by the Selling Securityholder Notice and
      Questionnaire

            

    

    

    
      	
               
      

            	
              5.

            	
              Return
      the signed Securities Purchase Agreement and Registration Rights Agreement
      to:

            

    

    

    Cytori Therapeutics, Inc.

    3020
Callan Road

    San
Diego, California 92121

    Telephone
No.:  (858) 458-0900

    Facsimile
No.:  (858) 450-4335

    Attention:  Jon
Soneff

     

    

    
      	
              B.

            	
              Instructions
      regarding the transfer of funds for the purchase of Securities is set
      forth on Exhibit
      G to the Securities Purchase
Agreement.

            

    

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    EXHIBIT
C-1

    

    ACCREDITED
INVESTOR QUESTIONNAIRE

    

    (ALL
INFORMATION WILL BE TREATED CONFIDENTIALLY)

    

    To:           Cytori
Therapeutics, Inc.

    

    This
Investor Questionnaire (“Questionnaire”) must
be completed by each potential investor in connection with the offer and sale of
shares of common stock, par value $0.001 per share, and warrants to purchase
shares of common stock (the “Securities”), of
Cytori Therapeutics, Inc., a Delaware corporation (the “Corporation”).  The
Securities are being offered and sold by the Corporation without registration
under the Securities Act of 1933, as amended (the “Act”), and the
securities laws of certain states, in reliance on the exemptions contained in
Section 4(2) of the Act and on Regulation D promulgated thereunder and in
reliance on similar exemptions under applicable state laws.  The
Corporation must determine that a potential investor meets certain suitability
requirements before offering or selling Securities to such
investor.  The purpose of this Questionnaire is to assure the
Corporation that each investor will meet the applicable suitability
requirements.  The information supplied by you will be used in
determining whether you meet such criteria, and reliance upon the private
offering exemptions from registration is based in part on the information herein
supplied.

     

    This
Questionnaire does not constitute an offer to sell or a solicitation of an offer
to buy any security.  Your answers will be kept strictly
confidential.  However, by signing this Questionnaire, you will be
authorizing the Corporation to provide a completed copy of this Questionnaire to
such parties as the Corporation deems appropriate in order to ensure that the
offer and sale of the Securities will not result in a violation of the Act or
the securities laws of any state and that you otherwise satisfy the suitability
standards applicable to purchasers of the Securities.  All potential
investors must answer all applicable questions and complete, date and sign this
Questionnaire.  Please print or type your responses and attach
additional sheets of paper if necessary to complete your answers to any
item.

     

    PART
A.                      BACKGROUND
INFORMATION

    

    Name of
Beneficial Owner of the Securities:                                                                                                                                          

    

    Business
Address:                                                                                                                                          

    (Number and Street)

                                                        

    (City)                                           (State)                                                                (Zip
Code)

    

    Telephone
Number:
(___)                                                                                                                                          

    

    If
a corporation, partnership, limited liability company, trust or other
entity:

    

    Type of
entity:                                                                                                                                          

    

    State of
formation:______________________                                                                                     Approximate
Date of formation: ____________________

    

    
      	
               
      

            	
              Were
      you formed for the purpose of investing in the securities being
      offered?

            

    

    

    Yes
____                      No
____

    
 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    If an
individual:

    

    Residence
Address:                                                                                                                                          

    (Number and Street)

    
                                                           

    (City)                                           (State)                                                                (Zip
Code)

    

    Telephone
Number:
(___)                                                                                                                                          

    

    Age:­­­­­­­­
­__________                                                      Citizenship:
____________                                                      Where
registered to vote: _______________

    

    Set forth
in the space provided below the state(s), if any, in the United States in which
you maintained your residence during the past two years and the dates during
which you resided in each state:

    

    
      	
               
      

            	
              Are
      you a director or executive officer of the
  Corporation?

            

    

    

    Yes
____                      No
____

    

    Social
Security or Taxpayer Identification
No.                                                                                                                                          

    

    

    PART
B.                      ACCREDITED INVESTOR
QUESTIONNAIRE

    

     

    In order for the Company to offer and
sell the Securities in conformance with state and federal securities laws, the
following information must be obtained regarding your investor status. Please
initial each
category applicable to you as a
Purchaser of Securities of the Company.

    
      

      
        	
                 
      

              	
                __
      (1)

              	
                A
      bank as defined in Section 3(a)(2) of the Securities Act, or any savings
      and loan association
      or other institution as defined in Section 3(a)(5)(A) of the Securities
      Act whether
      acting in its individual or fiduciary
    capacity;

              

      

      
        

        
          	
                   
      

                	
                  __
      (2)

                	
                  
                    A
      broker or dealer registered pursuant to Section 15 of the Securities
      Exchange Act of 1934

                  

                

        

         

      

    

    
      	
               
      

            	
              __
      (3)

            	
              An
      insurance company as defined in Section 2(13) of the Securities
      Act;

            

    

    

    
      	
               
      

            	
              __
      (4)

            	
              An
      investment company registered under the Investment Company Act of 1940 or
      a business development company as defined in Section 2(a)(48) of that
      Act;

            

    

    

    
      	
               
      

            	
              __
      (5)

            	
              A
      Small Business Investment Company licensed by the U.S. Small Business
      Administration under Section 301(c) or (d) of the Small Business
      Investment Act of 1958;

            

    

    

    
      	
               
      

            	
              __
      (6)

            	
              A
      plan established and maintained by a state, its political subdivisions, or
      any agency or instrumentality of a state or its political subdivisions,
      for the benefit of its employees, if such plan has total assets in excess
      of $5,000,000;

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              __
      (7)

            	
              An
      employee benefit plan within the meaning of the Employee Retirement Income
      Security Act of 1974, if the investment decision is made by a plan
      fiduciary, as defined in Section 3(21) of such act, which is either a
      bank, savings and loan association, insurance company, or registered
      investment adviser, or if the employee benefit plan has total assets in
      excess of $5,000,000 or, if a self-directed plan, with investment
      decisions made solely by persons that are accredited
      investors;

            

    

    

    
      	
               
      

            	
              __
      (8)

            	
              A
      private business development company as defined in Section 202(a)(22) of
      the Investment Advisers Act of
1940;

            

    

    

    
      	
               
      

            	
              __
      (9)

            	
              An
      organization described in Section 501(c)(3) of the Internal Revenue Code,
      a corporation, Massachusetts or similar business trust, or partnership,
      not formed for the specific purpose of acquiring the Securities, with
      total assets in excess of
$5,000,000;

            

    

    
 

    
      
        	
                 
      

              	
                __
      (10)

              	
                A
      trust, with total assets in excess of $5,000,000, not formed for the
      specific purpose of acquiring the Securities, whose purchase is directed
      by a sophisticated person who has such knowledge and experience in
      financial and business matters that such person is capable of evaluating
      the merits and risks of investing in the
  Company;

              

      

      
        

        
          	
                   
      

                	
                  __
      (11)

                	
                  A
      natural person whose individual net worth, or joint net worth with that
      person’sspouse, at the time of his purchase exceeds
      $1,000,000;

                

        

         

        

        
          	
                   
      

                	
                  __
      (12)

                	A natural person who had an individual income in excess
      of $200,000 in each of thetwo most recent years, or joint income with that
      person’s spouse in excess of$300,000, in each of those years, and has a
      reasonable expectation of reaching the same income level in the current
      year;

        

         

      

    

    
      	
               
      

            	
              ___(13)

            	
              An
      executive officer or director of the
Company;

            

    

     

    
      
        	
                 
      

              	
                ___(14)

              	
                An
      entity in which all of the equity owners qualify under any of the above
      subparagraphs. If the undersigned belongs to this investor category only,
      list the equity owners of the undersigned, and the investor category which
      each such equity owner satisfies.

              

      

       

       

    

    A.           FOR
EXECUTION BY AN INDIVIDUAL:

     

                              By                                       

    Date

    Print
Name:                                                              

    

    B.           FOR
EXECUTION BY AN ENTITY:

     

                    Entity Name:                                                              

     

    
       

                                By                                       

      Date

      Print
Name:                                                              

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
         

        C.           ADDITIONAL
SIGNATURES (if required by partnership, corporation or trust
document):

         

        
           

                          Entity Name:                                                              

           

          
             

                                      By                                       

            Date

            Print
Name:                                                              

             

            
               

                              Entity Name:                                                              

               

              
                 

                                          By                                       

                Date

                Print
Name:                                                              

                 

              

            

          

        

         

      

    

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    

    EXHIBIT
C-2

     

    Stock
Certificate and Warrant Questionnaire

     

    Pursuant
to Section 2.2(b) of the Agreement, please provide us with the following
information:

     

    
      	
              1.

            	
              The
      exact name that the Securities are to be registered in (this is the name
      that will appear on the stock certificate(s) and
      warrant(s)).  You may use a nominee name if
      appropriate:

            	 
      
	
              2.

            	
              The
      relationship between the Purchaser of the Securities and the Registered
      Holder listed in response to Item 1 above:

            	 
      
	
              3.

            	
              The
      mailing address, telephone and telecopy number of the Registered Holder
      listed in response to Item 1 above:

            	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	
              4.

            	
              The
      Tax Identification Number (or, if an individual, the Social Security
      Number) of the Registered Holder listed in response to Item 1
      above:

            	 
      

    

    

     

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    

    EXHIBIT
D

     

    Form of
Irrevocable Transfer Agent Instructions

     

    As of
_________, 2009

     

    Computershare
Investor Services, LLC

    [Address]

    [Address]

    Attn:  _________________

     

     

    Ladies
and Gentlemen:

     

                    Reference
is made to that certain Securities Purchase Agreement, dated as of May 7, 2009
(the “Agreement”), by
and among Cytori Therapeutics, Inc., a Delaware corporation (the “Company”), and the purchasers
named on the signature pages thereto (collectively, and including permitted
transferees, the “Holders”), pursuant to which
the Company is issuing to the Holders shares of common stock (the “Shares”) of the Company, par
value $0.001 per share (the “Common Stock”) and warrants
(the “Warrants”) which
are exercisable into Common Stock.

     

                    This
letter shall serve as our irrevocable authorization and direction to you
(provided that you are the transfer agent of the Company at such time and the
conditions set forth in this letter are satisfied), subject to any stop transfer
instructions that we may issue to you from time to time, if any, to issue
certificates representing shares of Common Stock to a Holder from time to time
upon delivery to you of instructions by the Company as indicated in writing
executed by a duly authorized officer of the Company together with indication of
receipt of the exercise price therefor.

     

    You acknowledge and agree that so long
as you have received (a) written confirmation from the Company’s legal
counsel that either (1) a registration statement covering resales of the
Shares and Warrant Shares has been declared effective by the Securities and
Exchange Commission (the “Commission”) under the
Securities Act of 1933, as amended (the “Securities Act”), or
(2) the Shares and Warrant Shares have been sold in conformity with
Rule 144 under the Securities Act (“Rule 144”) or are
eligible for sale under Rule 144, without the requirement for the Company to be
in compliance with the current public information required under Rule 144 as to
such securities and without volume or manner-of-sale restrictions and
(b) if applicable, a copy of such registration statement, then, unless
otherwise required by law, within three (3) business days of your receipt
of written authorization from a duly authorized officer of the Company that the
Common Stock may be issued pursuant to the Exercise Notice, you shall issue the
certificates representing the Common Stock registered in the names of such
Holders or transferees, as the case may be, and such certificates shall not bear
any legend restricting transfer of the Shares or Warrant Shares thereby and
should not be subject to any stop-transfer restriction; provided, however, that if
such Shares or Warrant Shares are not registered for resale under the Securities
Act or able to be sold under Rule 144 without the requirement for the Company to
be in compliance with the current public information required under Rule 144 as
to such securities and without volume or manner-of-sale restrictions, then the
certificates for such Shares or Warrant Shares shall bear the following
restrictive legend:

    

     

    THESE
SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE “SECURITIES ACT”), OR APPLICABLE STATE SECURITIES LAWS.  THE
SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE
ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    SECURITIES
ACT OR (B) AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH
APPLICABLE STATE SECURITIES LAWS OR BLUE SKY LAWS AS EVIDENCED BY A LEGAL
OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY AND ITS TRANSFER AGENT
OR (II) UNLESS SOLD PURSUANT TO RULE 144 UNDER SAID
ACT.  NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN
CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING
ARRANGEMENT SECURED BY THE SECURITIES.  NO REPRESENTATION IS MADE BY
THE ISSUER AS TO THE AVAILABILITY OF THE EXEMPTION PROVIDED BY RULE 144 UNDER
THE SECURITIES ACT FOR RESALES OF THESE SECURITIES.

     

     

                    The
Shares and the Warrant Shares shall continue to bear the following informative
legend:

     

    THIS
CERTIFICATE EVIDENCES AND ENTITLES THE HOLDER HEREOF TO CERTAIN RIGHTS AS SET
FORTH IN A RIGHTS AGREEMENT BETWEEN CYTORI THERAPEUTICS, INC. AND COMPUTERSHARE
TRUST COMPANY, INC., A COLORADO CORPORATION, AS RIGHTS AGENT, DATED AS OF MAY
29, 2003, AS AMENDED (THE “RIGHTS AGREEMENT”), THE TERMS OF WHICH ARE HEREBY
INCORPORATED HEREIN BY REFERENCE AND A COPY OF WHICH IS ON FILE AT THE PRINCIPAL
EXECUTIVE OFFICES OF CYTORI THERAPEUTICS, INC. UNDER CERTAIN CIRCUMSTANCES, AS
SET FORTH IN THE RIGHTS AGREEMENT, SUCH RIGHTS WILL BE EVIDENCED BY SEPARATE
CERTIFICATES AND WILL NO LONGER BE EVIDENCED BY THIS CERTIFICATE. CYTORI
THERAPEUTICS, INC. WILL MAIL TO THE HOLDER OF THIS CERTIFICATE A COPY OF THE
RIGHTS AGREEMENT WITHOUT CHARGE AFTER RECEIPT OF A WRITTEN REQUEST THEREFOR.
UNDER CERTAIN CIRCUMSTANCES SET FORTH IN THE RIGHTS AGREEMENT, RIGHTS ISSUED TO,
OR HELD BY, ANY PERSON WHO IS, WAS OR BECOMES AN ACQUIRING PERSON OR AN
AFFILIATE OR ASSOCIATE THEREOF (AS SUCH TERMS ARE DEFINED IN THE RIGHTS
AGREEMENT) AND CERTAIN RELATED PERSONS, WHETHER CURRENTLY HELD BY OR ON BEHALF
OF SUCH PERSON OR BY ANY SUBSEQUENT HOLDER, MAY BECOME NULL AND
VOID.

     

    A form of
written confirmation from the Company’s outside legal counsel that a
registration statement covering resales of the Shares and Warrant Shares has
been declared effective by the Commission under the Securities Act is attached
hereto as Annex I.

                

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

                    Please
execute this letter in the space indicated to acknowledge your agreement to act
in accordance with these instructions.

     

    

    Very truly yours,

    

    CYTORI THERAPEUTICS, INC.

    

     

    By:  __________________________________

                                    Name:
________________________________

    Title:  ________________________________

    

    

    Acknowledged
and Agreed:

    

    COMPUTERSHARE
INVESTOR SERVICES, LLC

    

    By:
__________________________________

    Name:
________________________________

    Title:  ________________________________

    

    Date:  _________________,
2009

    

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    

     

    Annex I

     

    FORM
OF NOTICE OF EFFECTIVENESS OF REGISTRATION STATEMENT

    
      	 
      	 
      	 
      
	
              Computershare
      Investor Services

              [Address]

              [Address]

              Attn:  _________________

            
	 
      	 
      	 
      
	 
      	 
      	
              Re:
      Cytori Therapeutics,
    Inc.

            

    

     

    Ladies
and Gentlemen:

     

                       We
are counsel to Cytori Therapeutics, Inc., a Delaware corporation (the “Company”), and have
represented the Company in connection with that certain Securities Purchase
Agreement, dated as of May 7, 2009, entered into by and among the Company and
the buyers named therein (collectively, the “Purchasers”) pursuant to
which the Company issued to the Purchasers shares of the Company’s common stock,
$0.001 par value per share (the “Common Stock”) and warrants
to purchase additional shares of Common Stock.  Pursuant to that
certain Registration Rights Agreement of even date, the Company agreed to
register the resale of such shares and the shares issuable upon exercise of such
warrants (collectively, the “Registrable Securities”),
under the Securities Act of 1933, as amended (the “Securities Act”). In
connection with the Company’s obligations under the Registration Rights
Agreement, on                     ,
2009, the Company filed a Registration Statement on Form S-3 (File
No. 333-                    )
(the “Registration
Statement”) with the Securities and Exchange Commission (the “Commission”) relating to the
Registrable Securities which names each of the Purchasers as a selling
stockholder thereunder.

     

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

     

                    Pursuant
to the Agreement, the Purchasers have agreed to satisfy the applicable
prospectus delivery requirements and to sell pursuant to the “Plan of
Distribution” section in the Registration Statement.  On the basis of
the foregoing, this letter shall serve as our standing notice to you that the
Common Stock may be freely transferred by the Purchasers pursuant to the
Registration Statement. You need not require further letters from us to effect
any future legend-free issuance or reissuance of Common Stock to the Purchasers
or the transferees of the Purchasers, as the case may be, as contemplated by the
Company’s Irrevocable Transfer Agent Instructions dated __________, 2009,
provided at the time of such reissuance, the Company has not otherwise notified
you that the Registration Statement is unavailable for the resale of the
Registrable Securities. This letter shall serve as our standing instructions
with regard to this matter.

    
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	
              Very
      truly yours,

            
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	
              [DLA
      PIPER US LLP]

            
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	
              By:

            	 
      	 
      
	 
      	 
      	 
      	 
      	 
      

    

     

    CC:           Purchasers

     

    

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

     

    EXHIBIT
E

     

    Form of
Secretary’s Certificate

    

    The
undersigned hereby certifies that he is the duly elected, qualified and acting
Secretary of Cytori Therapeutics, Inc., a Delaware corporation (the "Company"), and that as such
he is authorized to execute and deliver this certificate in the name and on
behalf of the Company and in connection with the Securities Purchase Agreement,
dated as of May 7, 2009, by and among the Company and the investors party
thereto (the "Securities
Purchase Agreement"), and further certifies in his official capacity, in
the name and on behalf of the Company, the items set forth
below.  Capitalized terms used but not otherwise defined herein shall
have the meaning set forth in the Securities Purchase Agreement.

     

    
      	
              1.  

            	
              Attached
      hereto as Exhibit A is a
      true, correct and complete copy of (a) the resolutions duly adopted by the
      Board of Directors of the Company, in a meeting of the Board held on
      February 26, 2009, and (b) the resolutions duly adopted by the Special
      Pricing Committee of the Board of Directors of the Company at a meeting of
      the Special Pricing Committee held on May 6, 2009.  Such
      resolutions have not in any way been amended, modified, revoked or
      rescinded, have been in full force and effect since their adoption to and
      including the date hereof and are now in full force and
      effect.

            

    

     

    
      	
              2.  

            	
              Attached
      hereto as Exhibit B is a
      true, correct and complete copy of the Certificate of Incorporation of the
      Company, together with any and all amendments thereto currently in effect,
      and no action has been taken to further amend, modify or repeal such
      Certificate of Incorporation, the same being in full force and effect in
      the attached form as of the date
hereof.

            

    

     

    
      	
              3.  

            	
              Attached
      hereto as Exhibit C is a
      true, correct and complete copy of the Bylaws of the Company and any and
      all amendments thereto currently in effect, and no action has been taken
      to further amend, modify or repeal such Bylaws, the same being in full
      force and effect in the attached form as of the date
    hereof.

            

    

     

    
      	
              4.  

            	
              Each
      person listed below has been duly elected or appointed to the position(s)
      indicated opposite his name and is duly authorized to sign the Securities
      Purchase Agreement and each of the Transaction Documents on behalf of the
      Company, and the signature appearing opposite such person’s name below is
      such person’s genuine signature.

            

    

     

    

    
      
        
          
            
              
                
                  	
                          Name

                        	
                          Position

                        	
                          Signature

                        
	
                          Christopher
      J. Calhoun

                        	
                          Chief
      Executive Officer

                        	
                          _________________________

                        
	
                          Mark
      E. Saad

                        	
                          Chief
      Financial Officer

                        	
                          _________________________

                        
	 
      	 
      	 
      

                

              

            

          

        

      

    

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
 

    IN
WITNESS WHEREOF, the undersigned has hereunto set his hand as of this ___ day of
May, 2009.

     

     

    
      
        	
                 
      

              	
                                        

              
	 	Jonathan
      E. Soneff
	 	Secretary

      

    

    

    

    I,
Christopher J. Calhoun, Chief Executive Officer, hereby certify that Jonathan E.
Soneff is the duly elected, qualified and acting Secretary of the Company and
that the signature set forth above is his true signature.

    
       

      
        
          	
                   
      

                	
                                          

                
	 	Christopher
      J. Calhoun
	 	Secretary

        

      

      

    

     

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

     

    EXHIBIT
A

     

    Resolutions

     

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    EXHIBIT
B

     

    Certificate
of Incorporation

     

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    EXHIBIT
C

     

    Bylaws

     

    

    
 

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

     

    EXHIBIT
F

     

    Form of
Officer’s Certificate

     

    

    The
undersigned, the Chief Executive Officer of Cytori Therapeutics, Inc., a
Delaware corporation (the "Company"), pursuant to
Section 5.1(g) of the Securities Purchase Agreement, dated as of May 7, 2009, by
and among the Company and the investors signatory thereto (the "Securities Purchase
Agreement"), hereby represents, warrants and certifies as follows
(capitalized terms used but not otherwise defined herein shall have the meaning
set forth in the Securities Purchase Agreement):

    

    
      	
               
      

            	
              1.

            	
              The
      representations and warranties of the Company contained in the Securities
      Purchase Agreement are true and correct in all material respects (except
      for those representations and warranties which are qualified as to
      materiality, in which case such representations and warranties shall be
      true and correct in all respects) as of the date when made and as of the
      Closing Date, as though made on and as of such date, except for such
      representations and warranties that speak as of a specific
      date.

            

    

    

    
      	
               
      

            	
              2.

            	
              The
      Company has performed, satisfied and complied in all material respects
      with all covenants, agreements and conditions required by the Transaction
      Documents to be performed, satisfied or complied with by it at or prior to
      the Closing.

            

    

    

    

    IN WITNESS WHEREOF, the
undersigned has executed this certificate this ___ day of May,
2009.

    

    

    

    ___________________________

    Christopher
J. Calhoun

    Chief
Executive Officer

    

     

    

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

     

    EXHIBIT
G

     

    Wire
Instructions

     

    

    Wells
Fargo Bank, N.A.

    

    ABA #:
XXXXXX

    Account
#: XXXXXXXX

    Account
Name: Cytori Therapeutics, Inc.

                                       

    Account
Officer: XXXXXXXXX

    Phone
Number: XXXXXXXXXX

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