Document:

Exhibit
4.1

 

NEITHER THESE
SECURITIES NOR THE SECURITIES ISSUABLE UPON EXERCISE OF THESE SECURITIES HAVE
BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES
COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND,
ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO
SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE
COMPANY. THESE SECURITIES AND THE SECURITIES ISSUABLE UPON EXERCISE OF THESE
SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT SECURED
BY SUCH SECURITIES.

 

XENOMICS,
INC.

 

WARRANT

 

	
  Warrant No. [ ]

  	
  Original Issue
  Date:          , 2006

  

 

Xenomics, Inc., a
Florida corporation (the “Company”),
hereby certifies that, for value received, [        ]
or its registered assigns (the “Holder”),
is entitled to purchase from the Company up to a total of
[                ]
shares of Common Stock (each such share, a “Warrant
Share” and all such shares, the “Warrant
Shares”), at any time and from time to time from and after the
Original Issue Date and through and including
          , 2007 (the “Expiration Date”), and subject to the
following terms and conditions:

 

1.             Definitions. As used in this Warrant, the
following terms shall have the respective definitions set forth in this Section
1. Capitalized terms that are used and not defined in this Warrant that are
defined in the Purchase Agreement (as defined below) shall have the respective
definitions set forth in the Purchase Agreement.

 

“Business Day”
means any day except Saturday, Sunday and any day that is a federal legal
holiday in the United States or a day on which banking institutions in the
State of New York are authorized or required by law or other government action
to close.

 

“Common Stock”
means the common stock of the Company, par value $0.0001 per share, and any
securities into which such common stock may hereafter be reclassified.

 

“Exercise Price” means
$1.25, subject to adjustment in accordance with Section 9.

 

 

“Fundamental Transaction”
means any of the following: (1) the Company effects any merger or consolidation
of the Company with or into another Person, (2) the Company effects any sale of
all or substantially all of its assets in one or a series of related
transactions, (3) any tender offer or exchange offer (whether by the Company or
another Person) is completed pursuant to which holders of Common Stock are
permitted to tender or exchange their shares for other securities, cash or
property, or (4) the Company effects any reclassification of the Common Stock
or any compulsory share exchange pursuant to which the Common Stock is
effectively converted into or exchanged for other securities, cash or property.

 

“Original Issue Date”
means the Original Issue Date first set forth on the first page of this
Warrant.

 

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

 

“Purchase Agreement”
means the Securities Purchase Agreement, dated December __, 2006, to which the
Company and the original Holder are parties.

 

“Trading Day” means
(i) a day on which the Common Stock is traded on a Trading Market, or (ii) if
the Common Stock is not quoted on any Trading Market, a day on which the Common
Stock is quoted in the over-the-counter market as reported by the 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) and (ii) hereof, then Trading Day shall
mean a Business Day.

 

“VWAP” means on any
particular Trading Day or for any particular period, the volume weighted
average trading price per share of Common Stock on such date or for such period
as reported by the Bloomberg L.P., or by any successor performing similar
functions.

 

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

 

3.             Registration of Transfers. The Company shall
register the transfer of any portion of this Warrant in the Warrant Register,
upon surrender of this Warrant, with the Form of Assignment attached hereto
duly completed and signed, to the Company at its address specified herein. Upon
any such registration or transfer, a new Warrant to purchase Common Stock, in
substantially the form of this Warrant (any such new Warrant, a “New Warrant”), evidencing the portion of
this Warrant so transferred shall be issued to the transferee and a New Warrant
evidencing the remaining portion of this Warrant not so transferred, if any,
shall be issued to the transferring Holder. The acceptance of the New Warrant
by the transferee thereof shall be deemed the acceptance by such transferee of
all of the rights and obligations of a holder of a Warrant.

 

4.             Exercise and Duration of Warrants. This Warrant
shall be exercisable by the registered Holder at any time and from time to time
on or after the Original Issue Date through

 

2

 

and including the Expiration Date.
At 6:30 p.m., New York City time on the Expiration Date, the portion of this
Warrant not exercised prior thereto shall be and become void and of no value. The
Company may not call or redeem any portion of this Warrant without the prior
written consent of the affected Holder.

 

5.             Delivery of Warrant Shares.

 

(a)           To
effect exercises hereunder, the Holder shall not be required to physically
surrender this Warrant unless the aggregate Warrant Shares represented by this
Warrant is being exercised. Upon delivery of the Exercise Notice (in the form
attached hereto) to the Company (with the attached Warrant Shares Exercise Log)
at its address for notice set forth herein and upon payment of the Exercise
Price multiplied by the number of Warrant Shares that the Holder intends to
purchase hereunder, the Company shall promptly (but in no event later than
three Trading Days after the Date of Exercise (as defined herein)) issue and
deliver to the Holder, a certificate for the Warrant Shares issuable upon such
exercise, which, unless otherwise required by the Purchase Agreement, shall be
free of restrictive legends. The Company shall, upon request of the Holder and
subsequent to the Effective Date, use its reasonable best efforts to deliver
Warrant Shares hereunder electronically through the Depository Trust
Corporation or another established clearing corporation performing similar
functions, if available, provided, that, the Company may, but will not
be required to change its transfer agent if its current transfer agent cannot
deliver Warrant Shares electronically through the Depository Trust Corporation.
A “Date of Exercise” means the
date on which the Holder shall have delivered to the Company: (i) the Exercise
Notice (with the Warrant Exercise Log attached to it), appropriately completed
and duly signed and (ii) payment of the Exercise Price for the number of
Warrant Shares so indicated by the Holder to be purchased.

 

(b)           The
Company’s obligations to issue and deliver Warrant Shares in accordance with
the terms hereof are absolute and unconditional, irrespective of any action or
inaction by the Holder to enforce the same, any waiver or consent with respect
to any provision hereof, the recovery of any judgment against any Person or any
action to enforce the same, or any setoff, counterclaim, recoupment, limitation
or termination, or any breach or alleged breach by the Holder or any other
Person of any obligation to the Company or any violation or alleged violation
of law by the Holder or any other Person, and irrespective of any other
circumstance which might otherwise limit such obligation of the Company to the
Holder in connection with the issuance of Warrant Shares. Nothing herein shall
limit a Holder’s right to pursue any other remedies available to it hereunder,
at law or in equity including, without limitation, a decree of specific
performance and/or injunctive relief with respect to the Company’s failure to
timely deliver certificates representing Warrant Shares upon exercise of the
Warrant as required pursuant to the terms hereof.

 

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

 

3

 

may arise as a result of holding
or transferring this Warrant or receiving Warrant Shares upon exercise hereof.

 

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

 

8.             Reservation of Warrant Shares. The Company
covenants that it will at all times reserve and keep available out of the
aggregate of its authorized but unissued and otherwise unreserved Common Stock,
solely for the purpose of enabling it to issue Warrant Shares upon exercise of
this Warrant as herein provided, the number of Warrant Shares which are then
issuable and deliverable upon the exercise of this entire Warrant, free from
preemptive rights or any other contingent purchase rights of Persons other than
the Holder (taking into account the adjustments and restrictions of Section
9). The Company covenants that all Warrant Shares so issuable and
deliverable shall, upon issuance and the payment of the applicable Exercise
Price in accordance with the terms hereof, be duly and validly authorized,
issued and fully paid and nonassessable.

 

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

 

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

 

(b)           Fundamental
Transactions. If, at any time while this Warrant is outstanding there is a
Fundamental Transaction, then the Holder shall have the right thereafter to
receive, upon exercise of this Warrant, the same amount and kind of securities,
cash or property as it would have been entitled to receive upon the occurrence
of such Fundamental Transaction if it had been, immediately prior to such
Fundamental Transaction, the holder of the number of

 

4

 

Warrant Shares then issuable upon exercise in full of
this Warrant (the “Alternate Consideration”).
For purposes of any such exercise, the determination of the Exercise Price
shall be appropriately adjusted to apply to such Alternate Consideration based
on the amount of Alternate Consideration issuable in respect of one share of
Common Stock in such Fundamental Transaction, and the Company shall apportion
the Exercise Price among the Alternate Consideration in a reasonable manner
reflecting the relative value of any different components of the Alternate
Consideration. If holders of Common Stock are given any choice as to the
securities, cash or property to be received in a Fundamental Transaction, then
the Holder shall be given the same choice as to the Alternate Consideration it
receives upon any exercise of this Warrant following such Fundamental
Transaction. At the Holder’s option and request, any successor to the Company
or surviving entity in such Fundamental Transaction shall, either (1) issue to
the Holder a new warrant substantially in the form of this Warrant and
consistent with the foregoing provisions and evidencing the Holder’s right to
purchase the Alternate Consideration for the aggregate Exercise Price upon
exercise thereof, or (2) purchase the Warrant from the Holder for a purchase
price, payable in cash within five Trading Days after such request (or, if
later, on the effective date of the Fundamental Transaction), equal to the
Black Scholes value of the remaining unexercised portion of this Warrant on the
date of such request. The terms of any agreement pursuant to which a Fundamental
Transaction is effected shall include terms requiring any such successor or
surviving entity to comply with the provisions of this paragraph (b) and
insuring that the Warrant (or any such replacement security) will be similarly
adjusted upon any subsequent transaction analogous to a Fundamental
Transaction.

 

(c)           Number
of Warrant Shares. Simultaneously with any adjustment to the Exercise Price
pursuant to this Section 9, the number of Warrant Shares that may be purchased
upon exercise of this Warrant shall be increased or decreased proportionately,
so that after such adjustment the aggregate Exercise Price payable hereunder
for the adjusted number of Warrant Shares shall be the same as the aggregate
Exercise Price in effect immediately prior to such adjustment.

 

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

 

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

 

(f)            Notice
of Corporate Events. If the Company (i) declares a dividend or any other
distribution of cash, securities or other property in respect of its Common
Stock, including

 

5

 

without limitation any granting of rights or warrants
to subscribe for or purchase any capital stock of the Company or any
Subsidiary, (ii) authorizes or approves, enters into any agreement
contemplating or solicits stockholder approval for any Fundamental Transaction
or (iii) authorizes the voluntary dissolution, liquidation or winding up of the
affairs of the Company, then the Company shall deliver to the Holder a notice
describing the material terms and conditions of such transaction (but only to
the extent such disclosure would not result in the dissemination of material,
non-public information to the Holder) at least 10 calendar days prior to the
applicable record or effective date on which a Person would need to hold Common
Stock in order to participate in or vote with respect to such transaction, and
the Company will take all steps reasonably necessary in order to insure that
the Holder is given the practical opportunity to exercise this Warrant prior to
such time so as to participate in or vote with respect to such transaction;
provided, however, that the failure to deliver such notice or any defect
therein shall not affect the validity of the corporate action required to be
described in such notice.

 

10.           Payment of Exercise Price. This Warrant may be
exercised by the Holder as to the whole or any lesser number of the Warrant
Shares covered hereby, upon surrender of this Warrant to the Company at its
principal executive office together with the Notice of Exercise attached hereto
as Exhibit A, duly completed and executed by the Holder, and payment to
the Company of the aggregate Exercise Price for the Warrant Shares to be
purchased in the form of (i) a check made payable to the Company,
(ii) wire transfer according to the Company’s instructions or
(iii) any combination of (i) and (ii).

 

11.           No Fractional Shares. No fractional shares of
Warrant Shares will be issued in connection with any exercise of this Warrant. In
lieu of any fractional shares which would, otherwise be issuable, the Company
shall pay cash equal to the product of such fraction multiplied by the closing
price of one Warrant Share as reported by the applicable Trading Market on the
date of exercise.

 

12.           Notices. Any and all notices or other communications
or deliveries hereunder (including, without limitation, any Exercise Notice)
shall be in writing and shall be deemed given and effective on the earliest of
(i) the date of transmission, if such notice or communication is delivered via
facsimile at the facsimile number specified in this Section prior to 6:30 p.m.
(New York City time) on a Trading Day, (ii) the next Trading Day after the date
of transmission, if such notice or communication is delivered via facsimile at
the facsimile number specified in this Section on a day that is not a Trading
Day or later than 6:30 p.m. (New York City time) on any Trading Day, (iii) the
Trading Day following the date of mailing, if sent by nationally recognized
overnight courier service, or (iv) upon actual receipt by the party to whom
such notice is required to be given. The addresses for such communications
shall be:  (i) if to the Company, to 420
Lexington Avenue, Suite 1701, New York, New York 10170, Attn: Chief Executive
Officer, or to facsimile no.:  (212) 297-0808
(or such other address as the Company shall indicate in writing in accordance
with this Section), or (ii) if to the Holder, to the address or facsimile
number appearing on the Warrant Register or such other address or facsimile
number as the Holder may provide to the Company in accordance with this
Section.

 

13.           Warrant Agent. The Company shall serve as warrant
agent under this Warrant. Upon 10 calendar days’ notice to the Holder, the
Company may appoint a new warrant agent. Any corporation into which the Company
or any new warrant agent may be merged or any

 

6

 

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

 

14.           Miscellaneous.

 

(a)           This
Warrant shall be binding on and inure to the benefit of the parties hereto and
their respective successors and assigns. Subject to the preceding sentence,
nothing in this Warrant shall be construed to give to any Person other than the
Company and the Holder any legal or equitable right, remedy or cause of action
under this Warrant. This Warrant may be amended only in writing signed by the
Company and the Holder and their successors and assigns.

 

(b)           All
questions concerning the construction, validity, enforcement and interpretation
of this Warrant shall be governed by and construed and enforced in accordance
with the internal laws of the State of New York (except for matters governed by
corporate law in the State of Delaware), without regard to the principles of
conflicts of law thereof. Each party agrees that all legal proceedings
concerning the interpretations, enforcement and defense of this Warrant and the
transactions herein contemplated (“Proceedings”)
(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, 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 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 Warrant 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 Warrant or the transactions contemplated
hereby. If either party shall commence a Proceeding to enforce any provisions
of this Warrant, then the prevailing party in such Proceeding shall be
reimbursed by the other party for its attorney’s fees and other costs and
expenses incurred with the investigation, preparation and prosecution of such
Proceeding.

 

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

 

(d)           In
case any one or more of the provisions of this Warrant shall be invalid or
unenforceable in any respect, the validity and enforceability of the remaining
terms and provisions of this Warrant shall not in any way be affected or impaired
thereby and the parties

 

7

 

will attempt in good faith to agree upon a valid and
enforceable provision which shall be a commercially reasonable substitute
therefor, and upon so agreeing, shall incorporate such substitute provision in
this Warrant.

 

(e)           Prior
to exercise of this Warrant, the Holder hereof shall not, by reason of being a
Holder, be entitled to any rights of a stockholder with respect to the Warrant
Shares.

 

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

 

 

	
   

  	
  XENOMICS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

8

 

EXERCISE NOTICE

XENOMICS, INC.

WARRANT DATED        , 2006

 

The undersigned
Holder hereby irrevocably elects to purchase
                      
shares of Common Stock pursuant to the above referenced Warrant. Capitalized
terms used herein and not otherwise defined have the respective meanings set
forth in the Warrant.

 

(1)           The
undersigned Holder hereby exercises its right to purchase                                    
Warrant Shares pursuant to the Warrant.

 

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

 

 

	
  Dated: 
                     ,
       

  	
   

  	
  Name of Holder:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (Print)

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (Signature must
  conform in all respects to

  name of holder as specified on the face of the

  Warrant)

  
								

 

9

 

Warrant Shares
Exercise Log

 

	
  Date

  	
   

  	
  Number of Warrant

  Shares Available to be

  Exercised

  	
   

  	
  Number of Warrant Shares

  Exercised

  	
   

  	
  Number of

  Warrant Shares

  Remaining to

  be Exercised

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

10

 

XENOMICS, INC.

WARRANT ORIGINALLY ISSUED        , 2006

WARRANT NO.    

 

FORM OF ASSIGNMENT

 

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

 

FOR VALUE RECEIVED, the undersigned hereby sells,
assigns and transfers unto                                                                   
the right represented by the above-captioned Warrant to purchase
                          
shares of Common Stock to which such Warrant relates and appoints
                                   
attorney to transfer said right on the books of the Company with full power of
substitution in the premises.

 

Dated: 
                         ,
     

 

 

	
   

  	
   

  	
   

  
	
   

  	
  (Signature must
  conform in all respects to name of

  holder as specified on the face of the Warrant)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Address of
  Transferee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
  In the presence
  of:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
				

 

11Exhibit
10.1

 

SECURITIES PURCHASE AGREEMENT

 

This Securities Purchase
Agreement (this “Agreement”) is made as of December 21, 2006 between Xenomics,
Inc., a Florida corporation (the “Company”), and the investors listed on Exhibit
A hereto, each of which is herein referred to as an “Investor” and
collectively, the “Investors”.

 

RECITALS:

 

WHEREAS, the Investors
desire to purchase from the Company, and the Company desires to sell to the
Investors, up to 1,000,000 shares of the Company’s common stock, par value
$0.0001 per share (the “Common Stock”) and up to 500,000 warrants to purchase
shares of the Common Stock (the “Warrants”), upon the terms and subject to the
conditions set forth herein;

 

NOW, THEREFORE, in
consideration of the premises and mutual covenants contained herein, the
parties hereto agree as follows:

 

1.                                       PURCHASE
AND SALE OF SECURITIES.

 

1.1                                 Purchase
and Sale of Securities. Upon the terms and subject to the conditions of
this Agreement, at the Closing (as defined below), the Company agrees to sell
to the Investors, and each Investor agrees to purchase from the Company the
number of shares of the Company’s Common Stock and Warrants set forth opposite
such Investor’s name on Exhibit A hereto (collectively, the
“Securities”) at the per share purchase price of $1.00 (“Purchase Price”). The
Warrants shall be exercisable at $1.25 per share for a period of 6 months from
the date of issuance.

 

1.2                                 Closing.
The closing of the purchase and sale of the Securities (the “Closing”) shall
take place at the offices of the Company at 5:00 p.m., Eastern time on
             ,
2006, or such other location, time or date as the parties shall mutually agree,
but only after the satisfaction or waiver of each of the conditions set forth
in Sections 6 and 7 (the “Closing Date”).

 

1.3                                 Deliveries.
At the Closing, the Company shall deliver to each Investor at the address set
forth on such Investor’s signature page hereto, a certificate or certificates,
registered in the name of the applicable Investor, representing the shares of
Common Stock and Warrants purchased by such Investor, and each Investor shall
deliver to the Company the aggregate Purchase Price, by wire transfer of
immediately available funds to the following account:

 

HSBC
Bank USA

950 Third Avenue

New
York, NY 10022

 

A/C of Sichenzia Ross
Friedman Ference LLP, IOLA

A/C# 629034125

ABA# 021001088

REMARK:  XENOMICS

 

1

 

2.                                       REPRESENTATIONS
AND WARRANTIES OF THE COMPANY.

 

For purposes of this
Section, all references to “Company” in Sections 2.1, 2.4 (with the exception
of subsection (a) thereof), 2.7, 2.9 through 2.12, and 2.14 through 2.20 shall
be deemed to be a reference to the Company and all of its direct and indirect
subsidiaries. The Company hereby represents and warrants to each Investor that,
except as set forth on a Schedule of Exceptions (the “Company Schedule of
Exceptions”) attached hereto as Schedule A, which exceptions shall be
deemed to be representations and warranties as if made hereunder:

 

2.1                                 Corporate
Organization. The Company is a corporation duly organized, validly existing
and in good standing under the laws of its state of incorporation, and has the
requisite corporate power and authority to own or lease its properties and to
carry on its business as now being conducted. The Company is duly qualified as
a foreign corporation to do business and is in good standing in every
jurisdiction in which the property owned or leased by it or the nature of the
business conducted by it makes such qualification necessary, except to the
extent that the failure to be so qualified or in good standing would not have,
individually or in the aggregate, a Material Adverse Effect. For purposes of
this Agreement, “Material Adverse Effect” shall mean, as to any entity, any material
adverse effect on the business, operations, conditions (financial or
otherwise), assets or results of operations of that entity individually or of
the Company and its subsidiaries as a whole.

 

2.2                                 Capitalization;
Organizational Documents.

 

(a)                                  The
authorized capital stock of the Company will consist immediately prior to the
Closing of 100,000,000 shares of Common Stock, of which as of the date hereof,
20,194,148 shares are issued and outstanding, and 20,000,000 shares of
preferred stock of the Company, of which, as of the date hereof, 103,100 shares
of Series Convertible Preferred Stock are issued and outstanding. All of the
issued and outstanding shares have been duly and validly issued and are fully
paid and nonassessable and have been issued in accordance with all applicable
federal and state securities laws. Except as disclosed in the Company Schedule
of Exceptions, no shares of Common Stock are subject to preemptive rights or
any other similar rights or any liens suffered or permitted by the Company. There
are no preemptive rights or rights of first refusal or similar rights which are
binding on the Company permitting any person to subscribe for or purchase from
the Company shares of its capital stock pursuant to any provision of applicable
law, the Certificate of Incorporation (as defined below) or the Company’s
By-laws. There are no securities or instruments containing anti-dilution or
similar provisions that will be triggered by the issuance of the Securities,
except for the anti-dilution provisions set forth in the Articles of Amendment
Designating the Series A Convertible Preferred Stock of the Company and as set
forth in the Company Schedule of Exceptions. The Company has made available to
each Investor true and correct copies of the Company’s Articles of
Incorporation, as amended and as in effect on the date hereof (the “Articles of
Incorporation”), and the Company’s By-laws, as in effect on the date hereof
(the “By-laws”).

 

2

 

(b)                                 Upon
issuance of the Securities and payment of the Purchase Price therefor in
accordance with the terms of this Agreement, the Securities will be duly
authorized, validly issued, fully paid and nonassessable, and free and clear of
any restrictions on transfer and any taxes, claims, liens, pledges, options,
security interests, purchase rights, preemptive rights, trusts, encumbrances or
other rights or interests of any other person (other than any restrictions
under the Securities Act of 1933, as amended (the “Securities Act”).

 

2.3                                 Authorization;
Enforcement. (a) The Company has the requisite corporate power and
authority to enter into and perform its obligations under this Agreement and to
issue, sell and perform its obligations with respect to the Securities in
accordance with the terms hereof, (b) the execution and delivery of this
Agreement by the Company and the consummation by it of the transactions
contemplated hereby have been duly authorized by the Company’s Board of
Directors and no further consent or authorization is required by the Company,
its Board of Directors or its stockholders, except as disclosed on the Company
Schedule of Exceptions and (c) this Agreement has been duly executed and
delivered by the Company. This Agreement, when executed and delivered by the
Company, constitutes a valid and binding obligation of the Company enforceable
against the Company in accordance with its terms, except as such enforceability
may be limited by general principles of equity or applicable bankruptcy,
insolvency, reorganization, moratorium, liquidation or similar laws relating
to, or affecting generally, the enforcement of creditors’ rights and remedies.

 

2.4                                 No
Conflicts. The execution, delivery and performance of this Agreement by the
Company, and the consummation by the Company of the transactions contemplated
hereby, will not (a) result in a violation of the Articles of Incorporation or
By-laws of the Company, or (b) violate or conflict with, or result in a
breach of, any provision of, 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, acceleration or cancellation of,
or result in the creation of any lien on or against any of the material
properties of the Company, any material note, bond, mortgage, agreement,
license, indenture or instrument to which the Company is a party, or result in
a violation of any statute, law, rule, regulation, writ, injunction, order,
judgment or decree applicable to the Company or by which any property or asset
of the Company is bound or affected, except where such violation, conflict,
breach or other consequence would not have a Material Adverse Effect. Except as
specifically contemplated by this Agreement and applicable blue sky laws, the
Company is not required to obtain any consent, authorization or order of, or
make any filing or registration with, any court or governmental or regulatory
or self-regulatory agency in order for it to execute, deliver or perform any of
its obligations under or contemplated by this Agreement in accordance with the
terms hereof. All consents, authorizations, orders, filings and registrations
that the Company is required to obtain pursuant to the preceding sentence have
been obtained or effected on or prior to the date hereof, except for those
required pursuant to blue sky laws.

 

2.5                                 SEC
Documents; Financial Statements. The Company has filed all reports,
schedules, forms, statements and other documents required to be filed by it
with the Securities and Exchange Commission (the “SEC”) pursuant to the
reporting requirements of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”) (all of the foregoing, and all other documents and registration
statements heretofore filed by the Company with the SEC being

 

3

 

hereinafter referred to
as the “SEC Documents”). The Common Stock is currently traded on the Over the
Counter Bulletin Board. The Company has delivered or made available to each
Investor true and complete copies of the SEC Documents. As of their respective
dates, the SEC Documents complied in all material respects with the
requirements of the Securities Act, and the Exchange Act and the rules and
regulations of the SEC promulgated thereunder applicable to the SEC Documents,
and none of the SEC Documents, at the time they were filed with the SEC (except
those SEC Documents that were subsequently amended), 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. Except as
disclosed in the Company Schedule of Exceptions, as of their respective dates,
the financial statements of the Company and its subsidiaries included (or
incorporated by reference) in the SEC Documents complied as to form in all
material respects with applicable accounting requirements and the published
rules and regulations of the SEC or other applicable rules and regulations with
respect thereto. Such financial statements have been prepared in accordance
with generally accepted accounting principles applied on a consistent basis
during the periods involved (except (a) as may be otherwise indicated in such
financial statements or the notes thereto, or (b) in the case of unaudited
interim statements, to the extent they may exclude footnotes or may be
condensed or summary statements) and fairly present the financial position of
the Company and its subsidiaries as of the dates thereof and the results of its
operations and cash flows for the periods then ended (subject, in the case of
unaudited statements, to normal year-end audit adjustments).

 

2.6                                 Securities
Law Exemption. Assuming the truth and accuracy of each Investor’s
representations set forth in this Agreement, the offer, sale and issuance of
the Securities as contemplated by this Agreement are exempt from the
registration requirements of the Securities Act and applicable state securities
laws, and neither the Company nor any authorized agent acting on its behalf has
taken or will take any action hereafter that would cause the loss of such
exemption.

 

2.7                                 Litigation.
All actions, suits, arbitrations or other proceedings or, to the Company’s
knowledge, investigations pending or threatened against the Company that would
have a Material Adverse Effect on the Company, are disclosed in the SEC
Documents. There is no action, suit, proceeding or, to the Company’s knowledge,
investigation that questions this Agreement or the right of the Company to
execute, deliver and perform under same.

 

2.8                                 Use
of Proceeds. The net proceeds from the sale of the Securities shall be used
solely for general corporate and working capital purposes.

 

2.9                                 Intellectual
Property. The Company owns, or has the contractual right to use, sell or
license all intellectual property necessary or required for the conduct of its
business as presently conducted and as proposed to be conducted, including,
without limitation, all trade secrets, processes, source code, licenses,
trademarks, service marks, trade names, logos, brands, copyrights, patents,
franchises, domain names and permits. The Company has not received any
communications alleging that the Company has violated or, by conducting its
business presently conducted violates or will violate any intellectual property
rights of any other person or entity.

 

4

 

2.10                           Title
to Property and Assets. The Company has good and marketable title to or, in
the case of leases and licenses, has valid and subsisting leasehold interests
or licenses in, all of its properties and assets (whether real or personal,
tangible or intangible) free and clear of any liens or other encumbrances,
except for liens or other encumbrances that do not, individually or in the
aggregate, have a Material Adverse Effect. With respect to property leased by
the Company, the Company has a valid leasehold interest in such property
pursuant to leases which are in full force and effect, and the Company is in
compliance in all material respects with the provisions of such leases.

 

2.11                           Compliance
with Laws. The Company is in compliance with all laws, rules, regulations,
orders, judgments or decrees that are applicable to the Company, the conduct of
its business as presently conducted, and the ownership of its property and
assets (including, without limitation, all Environmental Laws (as defined
below) and laws related to occupational safety, health, wage and hour, and
employment discrimination). All required reports and filings with governmental
authorities have been properly made as and when required, except where the
failure to report or file would not, individually or in the aggregate, have a
Material Adverse Effect. “Environmental Laws” means all federal, state, local
and foreign laws, ordinances, treaties, rules, regulations, guidelines and
permit conditions relating to contamination or pollution of the environment
(including ambient air, surface water, ground water, land surface or subsurface
strata) or the protection of human health and worker safety, including, without
limitation, laws and regulations relating to transportation, storage, use,
manufacture, disposal or release of, or exposure of employees or others to,
Hazardous Materials (as defined below) or emissions, discharges, releases or
threatened releases of Hazardous Materials. “Hazardous Materials” means any
substance that has been designated by any governmental entity or by applicable
Environmental Laws to be radioactive, toxic, hazardous or otherwise a danger to
health or the environment, including, without limitation, PCBs, asbestos,
petroleum, urea formaldehyde and all substances listed as hazardous substances
pursuant to the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, as amended, or defined as a hazardous waste pursuant to
the Resource Conservation and Recovery Act of 1976, as amended, and the
regulations promulgated pursuant to Environmental Laws, but excluding office
and janitorial supplies maintained in accordance with Environmental Laws.

 

2.12                           Licenses
and Permits. The Company has obtained and maintains all material federal,
state, local and foreign licenses, permits, consents, approvals, registrations,
memberships, authorizations and qualifications required to be maintained in
connection with the operations of the Company as presently conducted, the lack
of which could have a Material Adverse Effect. The Company is not in default in
any material respect under any of such licenses, permits, consents, approvals,
registrations, memberships, authorizations and qualifications.

 

2.13                           Related
Entities. Except for the Subsidiaries set forth on the Company Schedule of
Exceptions, the Company does not presently own or control, directly or indirectly,
any interest in any other subsidiary, corporation, association or other
business entity. Except for SpaXen Italia, S.R.L., the Company is not a party
to any joint venture, partnership or similar arrangement.

 

5

 

2.14                           Changes.
Except as disclosed on the Company Schedule of Exceptions and in the SEC
Documents, since July 31, 2006, the Company has operated its business
diligently and in the ordinary course of business and, to the knowledge of the
Company, there has not been, or the Company has not (as the case may be):

 

(a)                                  any
Material Adverse Effect;

 

(b)                                 any
damage, destruction or loss, whether or not covered by insurance, which would
have a Material Adverse Effect;

 

(c)                                  any
waiver or compromise by the Company of a valuable right or of a material debt
owed it;

 

(d)                                 sold,
encumbered, assigned or transferred any material assets or properties of the
Company, other than in the ordinary course of business;

 

(e)                                  incurred
any liability, whether accrued, absolute, contingent or otherwise, and whether
due or to become due, other than (i) in the ordinary course of business or (ii)
liabilities that are not, individually or in the aggregate, material to the
business, operations, condition (financial or otherwise), assets or results of
operations of the Company;

 

(f)                                    created,
incurred, assumed or guaranteed any indebtedness or subjected any of its assets
to any lien or encumbrance, except for indebtedness, liens or encumbrances that
are not, individually or in the aggregate, material to the business,
operations, condition (financial or otherwise), assets or results of operations
of the Company;

 

(g)                                 directly
or indirectly redeemed, purchased or otherwise acquired any shares of capital
stock of the Company;

 

(h)                                 declared,
set aside or paid any dividends or made any other distributions in cash or
property on the Company’s capital stock;

 

(i)                                     except
in the ordinary course of business of the Company, materially increased the
compensation payable or to become payable by the Company to any of its
officers, employees or directors or materially increased any bonus, insurance,
pension or other employee benefit plan, payment or arrangement made by the
Company for or with any such officers, employees or directors;

 

(j)                                     made
any direct or indirect loan to any stockholder, employee, officer or director
of the Company, other than advances made in the ordinary course of business;

 

(k)                                  changed
any agreement to which the Company is a party which would have a Material
Adverse Effect; or

 

6

 

(l)                                     entered
into any agreement or commitment to do any of the things described in this
Section 2.14.

 

2.15                           Employee
Benefit Plans. All “employee benefit plans,” as such term is defined in the
Employee Retirement Income Security Act of 1974, as amended (“ERISA”), to which
the Company has any liability or obligation, contingent or otherwise, comply in
all material respects and have been maintained and administered in material
compliance with ERISA, the Internal Revenue Code of 1986, as amended (the
“Code”), and all other statutes, orders and governmental rules and regulations
applicable to such employee benefit plans.

 

2.16                           Insurance.
The Company has in full force and effect fire, casualty and liability insurance
policies sufficient in amount (subject to reasonable deductibles) to allow the
Company to replace any of its properties that might be damaged or destroyed to
the extent and in the manner customary for companies in similar business
similarly situated.

 

2.17                           Employees.
The Company does not have any collective bargaining agreements with any of its
employees. There is no labor union organizing activity pending or, to the
Company’s knowledge, threatened with respect to the Company.

 

2.18                           Material
Contracts. All contracts, agreements, instruments, leases, licenses,
arrangements, understandings or other documents filed with or required to be
filed as exhibits to the SEC Documents to which the Company therein is a party
or by which it may be bound have been so filed (the “Material Contracts”). The
Material Contracts that have been filed as exhibits are complete and correct
copies of the contracts, agreements, instruments, leases, licenses,
arrangement, understanding or other documents of which they purport to be copies.
The Material Contracts are valid and in full force and effect as to the
Company, and, to the Company’s knowledge, to the other parties thereto.

 

2.21                           Brokers
and Finders. Except as disclosed in the Schedule of Exceptions, the Company
has not employed any broker, finder, consultant or intermediary in connection
with the transactions contemplated by this Agreement that would be entitled to
a broker’s, finder’s or similar fee or commission in connection herewith and
therewith.

 

2.22                           Disclosure.
This Agreement, Schedules and Exhibits hereto and all other documents delivered
to the Investors in connection herewith or therewith at the Closing, do not
contain any untrue statement of a material fact, or omit to state a material
fact necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading. There are no facts that,
individually or in the aggregate, would have a Material Adverse Effect that
have not been disclosed to each Investor in this Agreement (including the
Schedules and Exhibits hereto), the SEC Documents or any other documents
delivered to each Investor in connection herewith or therewith at the Closing.

 

3.                                       REPRESENTATIONS
AND WARRANTIES OF INVESTOR.

 

Each of the Investors,
severally and not jointly, hereby represents and warrants to the Company as to
itself and not as to any other Investor, that:

 

7

 

3.1                                 Organization.
The Investor represents and warrants to, and covenants with, the Company that
the Investor has full right, power, authority and capacity to enter into this
Agreement and to consummate the transactions contemplated hereby.

 

3.2                                 Authorization;
Enforcement. (a) The Investor has the requisite power and authority to
enter into and perform its obligations under this Agreement, (b) the execution
and delivery of this Agreement by the Investor and the consummation by it of
the transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of the Investor, and (c) this Agreement has been
duly executed and delivered by the Investor. To the knowledge of the Investor,
no other proceedings on the part of the Investor are necessary to approve and
authorize the execution and delivery of this Agreement. This Agreement, when
executed and delivered, constitutes a valid and binding obligation of the
Investor, enforceable against the Investor in accordance with its terms, except
as such enforceability may be limited by general principles of equity or
applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or
similar laws relating to, or affecting generally, the enforcement of creditors’
rights and remedies.

 

3.3                                 No
Conflicts. The execution, delivery and performance of this Agreement by the
Investor, and the consummation by the Investor of the transactions contemplated
hereby will not (a) result in a violation of the organizational documents of
the Investor, or (b) result in a violation of any statute, law, rule,
regulation, writ, injunction, order, judgment or decree applicable to the
Investor, except where such violation, conflict, breach or other consequence
would not have a Material Adverse Effect. The Investor is not required to
obtain any consent, authorization or order of, or make any filing or registration
with, any court or governmental or regulatory or self-regulatory agency in
order for it to execute, deliver or perform any of its obligations under or
contemplated by this Agreement in accordance with the terms hereof.

 

3.4                                 Investment
Representations.

 

(a)                                  The
Investor is an “accredited investor”, as defined in Regulation D promulgated
under the Securities Act, and has such knowledge, sophistication and experience
in financial and business matters that the Investor is capable of evaluating
the merits and risks of the investment in the Securities.

 

(b)                                 The
Investor (i) has adequate means of providing for its current financial needs
and possible contingencies, and has no need for liquidity of investment in the
Company, (ii) can afford to hold unregistered Securities for an indefinite
period of time and sustain a complete loss of the entire amount of the
subscription, and (iii) has not made an overall commitment to investments which
are not readily marketable that is so disproportionate as to cause such overall
commitment to become excessive.

 

(c)                                  The
Investor agrees and understands that the Securities are being offered and sold
to the Investor in reliance upon specific exemptions from the registration
requirements of the Securities Act and the rules and regulations promulgated
thereunder and that, in order to determine the availability of such exemptions
and the eligibility of the Investor to acquire the Securities, the Company is
relying upon the truth and accuracy of the Investor’s

 

8

 

representations and
warranties, and compliance with the Investor’s covenants and agreements, set
forth in this Agreement. The Investor further agrees with the Company that (i)
no Securities were offered or sold to the Investor by means of any form of
general solicitation or general advertising, and in connection therewith, the
Investor did not (1) receive or review any advertisement, article, notice or
other communication published in a newspaper or magazine or similar media or broadcast
over television or radio, whether closed circuit or generally available; or (2)
attend any seminar meeting or industry investor conference whose attendees were
invited by any general solicitation or general advertising. The Investor hereby
acknowledges that the offering of the Securities has not been reviewed by the
SEC or any state regulatory authority since the offering of the Securities is
intended to be exempt from the registration requirements of Section 5 of the
Securities Act pursuant to Regulation D promulgated thereunder. The Investor
understands that the Securities have not been registered under the Securities
Act and agrees not to sell or otherwise transfer the Securities unless they are
registered under the Securities Act or unless an exemption from such
registration is available.

 

(d)                                 The
Securities are being purchased by the Investor for its own account, for
investment purposes only, not for the account of any other person, or
corporation and not with a view to distribution, assignment or resale to others
in whole or in part. The Investor has no present intention of selling, granting
any participation in, or otherwise distributing the Securities. The Investor
does not have any contract, undertaking, agreement or arrangement with any person
to sell, transfer, pledge, hypothecate, grant any option to purchase or
otherwise dispose of any of the Securities. Nothing herein shall prevent the
distribution of any Securities to any subsidiary, member, partner, stockholder,
affiliate or former member, partner, stockholder or affiliate of the Investor
in compliance with the Securities Act and applicable state “blue sky” laws.

 

(e)                                  The
Investor has had access to the Company’s SEC Documents and other public
filings.

 

(f)                                    With
respect to corporate tax and other economic considerations involved in an
investment in the Securities, the Investor is not relying on the Company. The
Investor has carefully considered and has, to the extent the Investor believes
such discussion necessary, discussed with its professional legal, tax,
accounting and financial advisors the suitability of an investment in the
Securities for its particular tax and financial situation and has determined
that the Securities are a suitable investment for the Investor.

 

(g)                                 The
Company has made available to the Investor all documents and information that
the Investor has requested relating to an investment in the Securities.

 

(h)                                 Subject
to the Company’s disclosures in this Agreement and the SEC Documents, the
Investor recognizes that the Company has generated no revenues to date, is not
expected to have any products commercially available for a number of years, if
at all, and that investment in the Company involves substantial risks,
including loss of the entire amount of such investment and has taken full
cognizance of and understands all of the risk factors relating to the purchase
of the Securities.

 

9

 

(i)                                     The
Investor has not been formed for the specific purpose of acquiring the
Securities.

 

4.                                       COVENANTS.

 

4.1                                 Confidentiality.
Each Investor hereby acknowledges that unauthorized disclosure of information
regarding the offering of the Securities pursuant to this Agreement may cause
the Company to violate Regulation FD and each Investor agrees to keep such
information confidential. The Company shall not publicly disclose the name of
any Investor, or include the name of any Investor in any filing with the
Commission or any regulatory agency or trading market, without the prior
written consent of such Investor, except (i) as required by the federal
securities laws and in connection with the registration statement contemplated
by this Agreement and (ii) to the extent such disclosure is required by law or
trading market regulations.

 

4.2                                 Restrictions
on Transfer.

 

(a)                                  Each
Investor hereby agrees, severally and not jointly, that, except in accordance
with a registration statement filed pursuant to Section 5.2 of this Agreement,
it will not dispose of any of such Investor’s Securities (other than pursuant
to Rule 144 promulgated under the Securities Act (“Rule 144”) or pursuant to a
registration statement filed with the SEC pursuant to the Securities Act)
unless and until such Investor shall have (A) notified the Company of the
proposed disposition and shall have furnished the Company with a statement of
the circumstances surrounding the proposed disposition and (B) if requested by
the Company, furnished the Company with an opinion of counsel, reasonably
satisfactory in form and substance to the Company and the Company’s counsel, to
the effect that such disposition will not require registration under the
Securities Act. The restrictions on transfer imposed by this Section 4.2 shall
cease and terminate as to the Securities held by an Investor when:  (x) such Securities shall have been
effectively registered under the Securities Act and sold by the holder thereof
in accordance with such registration, or (y) on delivery of an opinion of the
kind described in the preceding sentence with respect to such Securities. Each
certificate evidencing the Securities shall bear an appropriate restrictive
legend as set forth in Section 4.2(b), except that such legend shall not be
required after a transfer is made in compliance with Rule 144 or pursuant to a
registration statement or if the opinion of counsel referred to above is issued
and provides that such legend is not required in order to establish compliance
with any provisions of the Securities Act. The Company agrees that pursuant to
the prior sentence, it will, no later than five Business Days (“Business Day”
shall mean any day banks are open for business in New York, New York) following
(a) receipt by the Company’s transfer agent of a certificate representing
Securities issued with a restrictive legend, accompanied by a certification of
the Investor in form suitable for processing by the Company that a prospectus
has been delivered (in the case of sale pursuant to prospectus, a “Prospectus
Letter”) or customary supporting documentation, including legal opinion if required
pursuant to Clause (B) above, “Supporting Documentation”) and (b) receipt by
the Company of notice of such delivery to the transfer agent and Prospectus
Letter or Supporting Documentation, as the case may be (such notice to be sent
by facsimile to the attention of the Company’s president and CEO at the fax
number set forth in Section 8.6 hereof) deliver or cause to be delivered
(evidence of deposit for next day delivery with a nationally recognized
overnight delivery service shall be deemed

 

10

 

delivery) to such
Investor a certificate representing such Securities that is free from all
restrictive and other legends. The Company may not make any notation on its
records or give instructions to any transfer agent of the Company that enlarge
the restrictions on transfer set forth in this Section. In the event the
Prospectus Letter or Supporting Documentation is not in form suitable for
processing by to the Company, the five Business Days shall toll until the Company
receives a Prospectus Letter or Supporting Documentation that is in form
suitable for processing.

 

(b)                                 Notwithstanding
the provisions of Section 4.2(a), no registration statement or opinion of
counsel shall be necessary for a transfer by an Investor of the Securities to a
subsidiary, member, partner, stockholder or affiliate of that Investor, if the
transferee agrees in writing to be subject to the terms hereof to the same
extent as if such transferee were an Investor hereunder.

 

(c)                                  It
is understood that, subject to Sections 4.2(a) and 4.2(b), the certificates
evidencing the Securities will bear the following legends:

 

(i)                                     THESE
SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE
“SECURITIES ACT”) OR UNDER APPLICABLE STATE SECURITIES LAWS AND MAY NOT BE
SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER THE
SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO
AVAILABLE EXEMPTIONS FROM SUCH REGISTRATION, PROVIDED THAT THE SELLER DELIVERS
TO THE COMPANY AN OPINION OF COUNSEL (WHICH OPINION IS REASONABLY SATISFACTORY
TO THE COMPANY) CONFIRMING THE AVAILABILITY OF SUCH EXEMPTION.

 

(ii)                                  Any
legend required by the laws of any other applicable jurisdiction.

 

4.3                                 Securities
Compliance. The Company shall take all action necessary to comply with any
federal or state securities laws applicable to the transactions contemplated
hereunder.

 

5.                                       REGISTRATION
RIGHTS.

 

5.1                                 Registrable
Shares. As used herein the term “Registrable Security” means (a) each of
the Shares, (b) the shares of Common Stock of the Company issuable upon
exercise of the Warrants and (c) any Common Stock of the Company issued as (or
issuable on the conversion or exercise of any warrant, right or other security
that is issued as) a dividend or other distribution with respect to, or in
exchange for, or in replacement of, the shares referenced in clause (a) above; provided, however, that with respect to
any particular Registrable Security held by an Investor, such security shall
cease to be a Registrable Security when, as of the date of determination,
(a) it has been effectively registered under the Securities Act and
disposed of pursuant thereto, or (b) registration under the Securities Act
is no longer required for the immediate public distribution of any particular
Registrable Shares held by that Investor and its affiliates. In the event of
any merger, reorganization, consolidation, recapitalization or other change in
corporate structure affecting the Common Stock, such adjustment shall be made
in the

 

11

 

definition of
“Registrable Security” as is appropriate in order to prevent any dilution or
enlargement of the rights granted pursuant to this Section 5.

 

5.2                                 Mandatory
Registration.

 

(a)                                  Within
15 calendar days after the earlier of the closing of a financing or series of
financings in which the Company raises an aggregate of $5,000,000 or May 14,
2007, the Company shall prepare and file with the Commission the Registration
Statement covering the resale of all of the Registrable Shares for an offering
to be made on a continuous basis pursuant to Rule 415 (the “Required Filing
Date”). The Registration Statement required hereunder shall be on Form SB-2
(except if the Company is not then eligible to register for resale the
Registrable Shares on Form SB-2, in which case the Registration Statement shall
be on another appropriate form in accordance herewith). The Company shall use
its commercially reasonable efforts to cause the Registration Statement to be
declared effective under the Securities Act as promptly as possible after the
filing thereof, but in any event not later than the 45th day after the Filing
Date (the “Effectiveness Date”), and shall use its commercially reasonable
efforts to keep the Registration Statement continuously effective under the
Securities Act until the earlier of the date when all Registrable Shares
covered by the Registration Statement (a) have been sold pursuant to the
Registration Statement or an exemption from the registration requirements of
the Securities Act or (b) may be sold without volume restrictions pursuant to
Rule 144(k) as determined by the counsel to the Company pursuant to a written
opinion letter to such effect, addressed and acceptable to the Company’s
transfer agent and the affected Investors or (c) the second anniversary of the
date on which the Registration Statement is declared effective (the “Effectiveness
Period”) or such longer time as the Company may determine.

 

(b)  Notwithstanding the foregoing, if the Company
shall furnish to the Investors a certificate signed by the Chief Executive
Officer of the Company stating that in the good faith judgment of the Board of
Directors of the Company it would not be in the best interest of the Company
for such registration statement to be filed, the Company shall have the right
to defer taking such action with respect to such filing for a period of not
more than seventy-five (75) days after the date of such certificate; provided,
however, that the Company shall not defer its obligation in this manner
more than once in any twelve (12) month period.

 

(d)                                 In
the event, the Investor fails to provide the Company with any information that
is required to be provided in the Registration Statement with respect to such
Investor pursuant to Section 5.3(k) within ten (10) days of receiving a request
for such information from the Company, the Company shall send an additional
request to the Investor (the “Additional Request”) and in the event the
Investor fails to respond to the Company within five (5) days of receipt of the
Additional Request, the Company shall be entitled to exclude such Investor’s
Registrable Shares from the Registration Statement.

 

5.3                                 Covenants
of the Company With Respect to Registration.

 

The Company covenants and
agrees as follows:

 

(a)                                  Not less than five business days
prior to the filing of the Registration Statement or any related Prospectus or
any amendment or supplement thereto, furnish to the

 

12

 

Investors copies of all such documents proposed to be filed
(including documents incorporated or deemed incorporated by reference to the
extent requested by such person), which documents will be subject to the review
of such Investors within such five business days. The Company shall not file
the Registration Statement or any such Prospectus or any amendments or
supplements thereto to which the holders of a majority of the Registrable
Shares shall reasonably object in good faith based on the advice of counsel and
the Company shall make reasonable efforts to address the objections raised. In
the event the holders of a majority of the Registrable Shares object to any
such filing pursuant to the previous sentence, then the Required Filing Date or
Effectiveness Date, as the case may be, shall be extended by the number of days
that elapse between the date the Company is notified of the objection until the
day following the date the Company has been notified that such objection no
longer exists.

 

(b)                                 Following
the effective date of the Registration Statement under Section 5.2, the Company
shall, upon the request of the Investors, forthwith supply such reasonable
number of copies of the Registration Statement, preliminary prospectus and
prospectus meeting the requirements of the Securities Act, and other documents
necessary or incidental to the public offering of the Registrable Shares, as
shall be reasonably requested by the Investors to permit the Investors to make
a public distribution of the Registrable Shares registered in connection with
the Registration Statement.

 

(c)                                  The
Company shall prepare and file with the SEC such amendments and supplements to
such Registration Statement and the prospectus used in connection with such
Registration Statement as may be necessary to comply with the Securities Act
with respect to the disposition of all Shares covered by such Registration
Statement during the period of time such Registration Statement remains
effective;

 

(d)                                 The
Company shall use its commercially reasonable efforts to register and qualify
the Shares covered by such Registration Statement under such other securities
or Blue Sky laws of such jurisdictions as shall be reasonably requested by the
Investors; provided that the Company shall not be required in connection
therewith or as a condition thereto to qualify to do business or to file a
general consent to service of process in any such states or jurisdictions;

 

(e)                                  During
the period of time such Registration Statement remains effective, the Company
shall notify each Investor of Registrable Shares covered by such registration
statement at any time when a prospectus relating thereto is required to be
delivered under the Securities Act or the happening of any event as a result of
which the prospectus included in such Registration Statement, as then in
effect, includes an untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading in the light of the circumstances then existing;

 

(f)                                    The
Company shall use its commercially reasonable efforts to cause all such
Registrable Shares registered hereunder to be listed on each securities
exchange on which securities of the same class issued by the Company are then
listed;

 

13

 

(g)                                 The
Company shall provide a transfer agent and registrar for all Registrable Shares
registered hereunder and a CUSIP number for all such Registrable Shares, in
each case not later than the effective date of such registration; and

 

(k)                                  The
obligations of the Company hereunder with respect to the Registrable Shares are
subject to the Investors’ furnishing to the Company such information concerning
the Investors, the Registrable Shares and the terms of the Investors’ offering
of such Registrable Shares as are required to be included in the Registration
Statement by Commission regulations or pursuant to a specific Commission
comment on the Registration Statement.

 

5.4                                 Expenses.
All expenses incurred in effecting a registration pursuant to this Agreement
(including, without limitation, all registration, qualification and filing
fees, printing expenses, fees and disbursements of counsel for the Company,
blue sky fees and expenses) shall be borne by the Company. All transfer taxes,
underwriting discounts and selling commissions applicable to the sale of the
Registrable Shares shall be borne by the Investors thereof.

 

5.5                                 Indemnification.
In the event any Registrable Shares are included in a Registration Statement
under this Section 5:

 

(a)                                  To
the extent permitted by law, the Company will indemnify and hold harmless each
Investor, the partners, officers, directors, stockholders, members and managers
of such Investor, each person, if any, who controls such Investor within the
meaning of the Securities Act or the Exchange Act, against any losses, claims,
damages, or liabilities (joint or several) to which they may become subject
under the Securities Act, the Exchange Act or other federal or state law,
insofar as such losses, claims, damages, or liabilities (or actions in respect
thereof) arise out of or are based upon any of the following statements,
omissions or violations (each, a “Violation”): (i) any untrue statement or
alleged untrue statement of a material fact contained in such Registration
Statement, including any preliminary prospectus or final prospectus contained
therein or any amendments or supplements thereto, (ii) the omission or alleged
omission to state therein a material fact required to be stated therein, or
necessary to make the statements therein not misleading, or (iii) any violation
or alleged violation by the Company of the Securities Act, the Exchange Act,
any state securities law or any rule or regulation promulgated under the
Securities Act, the Exchange Act or any state securities law; and the Company
will pay to each such Investor, underwriter or controlling person, as incurred,
any legal or other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage, liability, or action; provided, however, that the indemnity
agreement contained in this Section 5.5(a) shall not apply to amounts paid in
settlement of any such loss, claim, damage, liability, or action if such
settlement is effected without the consent of the Company (which consent shall
not be unreasonably withheld or delayed), nor shall the Company be liable to
any Investor, underwriter or controlling person for any such loss, claim,
damage, liability, or action to the extent that it arises out of or is based upon
a Violation which occurs in reliance upon and in conformity with written
information furnished expressly for use in connection with such registration by
any such Investor, underwriter or controlling person.

 

14

 

(b)                                 To
the extent permitted by law, each selling Investor will indemnify and hold
harmless the Company, each of its directors, each of its officers who has
signed the Registration Statement, each person, if any, who controls the
Company within the meaning of the Securities Act, against any losses, claims,
damages, or liabilities (joint or several) to which any of the foregoing
persons may become subject, under the Securities Act, the Exchange Act or other
federal or state law, insofar as such losses, claims, damages, or liabilities
(or actions in respect thereto) arise out of or are based upon any Violation,
in each case to the extent (and only to the extent) that such Violation occurs
in reliance upon and in conformity with written information furnished by such
Investor expressly for use in connection with such registration; and each such
Investor will pay, as incurred, any legal or other expenses reasonably incurred
by any person indemnified pursuant to this Section 5.5(b), in connection with
investigating or defending any such loss, claim, damage, liability, or action; provided, however, that the indemnity
agreement contained in this Section 5.5(b) shall not apply to amounts paid in
settlement of any such loss, claim, damage, liability or action if such
settlement is effected without the consent of the Investor (which consent shall
not be unreasonably withheld or delayed); provided
further that in no event shall any indemnity under this Section
5.5(b) exceed the net proceeds from the offering received by such Investor.

 

(c)                                  Promptly
after receipt by an indemnified party under this Section 5.5 of notice of the
commencement of any action (including any governmental action), such
indemnified party will, if a claim in respect thereof is to be made against any
indemnifying party under this Section 5.5, deliver to the indemnifying party a
written notice of the commencement thereof and the indemnifying party shall
have the right to participate in, and, to the extent the indemnifying party so
desires, jointly with any other indemnifying party similarly noticed, to assume
the defense thereof with counsel mutually satisfactory to the parties; provided, however, that an indemnified
party (together with all other indemnified parties which may be represented
without conflict by one counsel) shall have the right to retain one separate
counsel, with the reasonable fees and expenses to be paid by the indemnifying
party, if representation of such indemnified party by the counsel retained by
the indemnifying party would be inappropriate due to actual or potential
differing interests between such indemnified party and any other party
represented by such counsel in such proceeding. The failure to deliver written
notice to the indemnifying party within a reasonable time after receipt of
notice of the commencement of any such action, if prejudicial to its ability to
defend such action, shall relieve such indemnifying party of any liability to
the indemnified party under this Section 5.5, but the omission so to deliver
written notice to the indemnifying party will not relieve it of any liability
that it may have to any indemnified party otherwise than under this Section
5.5.

 

(d)                                 If
the indemnification provided for in this Section 5.5 is held by a court of
competent jurisdiction to be unavailable to an indemnified party with respect
to any loss, liability, claim, damage or expense referred to therein, then the
indemnifying party, in lieu of indemnifying such indemnified party hereunder,
shall contribute to the amount paid or payable by such indemnified party as a
result of such loss, liability, claim, damage, or expense in such proportion as
is appropriate to reflect the relative fault of the indemnifying party on the
one hand and of the indemnified party on the other in connection with the
statements or omissions that resulted in such loss, liability, claim, damage or
expense as well as any other relevant equitable considerations; provided that in no event shall any
contribution by an Investor under this Section 5.5(d)

 

15

 

exceed the net proceeds
from the offering received by such Investor. The relative fault of the
indemnifying party and of the indemnified party shall be determined by
reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission to state a material fact relates
to information supplied by the indemnifying party or by the indemnified party
and the parties’ relative intent, knowledge, access to information, and opportunity
to correct or prevent such statement or omission.

 

(e)                                  Notwithstanding
the foregoing, to the extent that the provisions on indemnification and
contribution contained in the underwriting agreement entered into in connection
with the underwritten public offering are in conflict with the foregoing
provisions, the provisions in the underwriting agreement shall control.

 

(f)                                    The
obligations of the Company and Investors under this Section 5.5 shall survive
the completion of any offering of Registrable Shares in a registration
statement and the termination of this Agreement.

 

5.6                                 Suspension
of Sales.

 

(a)                                  With
respect to the Registration Statement filed pursuant to Section 5.2, the
Company may suspend sales of Registrable Shares under such Registration Statement
for a period of not more than seventy-five (75) days in any twelve (12) month
period with respect to such Registration Statement if, at any time the Company
is engaged in confidential negotiations or other confidential business
activities, the disclosure of which would be required if such sales were not
suspended and the Board of Directors of the Company determines in good faith
that such suspension would be in the Company’s best interest at such time; provided,
that the Company shall not be permitted to suspend such sales for more than
seventy-five (75) days in any twelve (12) month period. In order to suspend
sales pursuant to this Section 5.6(a), the Company shall promptly (but in any
event within five (5) business days), upon determining to seek such suspension,
deliver to each holder of Registrable Shares a certificate signed by an
executive officer of the Company stating that the Company is suspending such
filing pursuant to this Section 5.6(a). Each holder of Registrable Shares
hereby agrees to keep confidential any information disclosed to it in any such
certificate (including the fact that a certificate was delivered).

 

(b)                                 If
the Company suspends such Registration Statement pursuant to Section 5.6(a)
above, the Company shall, as promptly as practicable following the termination
of the circumstances which entitled the Company to do so but in no event more
than fifteen (15) days thereafter, take such actions as may be necessary to
file or reinstate the effectiveness of such Registration Statement and/or give
written notice to the selling Investors authorizing them to resume sales
pursuant to such Registration Statement. If, as a result thereof, the
prospectus included in such Registration Statement has been amended to comply
with the requirements of the Securities Act, the Company shall enclose such
revised prospectus with the notice to the selling Investors given pursuant to
this Section 5.6(b), and the selling Investors shall make no offers or sales of
Shares pursuant to such Registration Statement other than by means of such
revised prospectus.

 

16

 

5.7                                 Transfer
or Assignment of Registration Rights. The rights to cause the Company to
register Registrable Shares granted to an Investor by the Company under this
Section 5 may be transferred or assigned by an Investor to a transferee or
assignee of such Registrable Shares that (i) is a subsidiary, parent, current
or former partner, current or former limited partner, current or former member,
current or former manager or stockholder of an Investor, (ii) is an entity
controlling, controlled by or under common control, or under common investment
management, with an Investor, including without limitation a corporation,
partnership or limited liability company that is a direct or indirect parent or
subsidiary of the Investor, or (iii) is a transferee or assignee of not less
than 50,000 shares of Registrable Shares (as presently constituted and subject
to subsequent adjustments for stock splits, stock dividends, reverse stock
splits and the like), provided that
the Company is given written notice at the time of or within a reasonable time
after said transfer or assignment, stating the name and address of said
transferee or assignee and identifying the Securities with respect to which
such registration rights are being transferred or assigned, and provided further that the transferee or
assignee of such rights assumes the obligations of such Investor under this
Section 5.

 

5.8                                 Reports
Under Exchange Act. With a view to making available to the Investors the
benefits of Rule 144 promulgated under the Securities Act and any other rule or
regulation of the SEC that may at any time permit an Investor to sell
Securities of the Company to the public without registration, the Company
agrees to:

 

(a)                                  Make
and keep public information available, as those terms are used in SEC Rule 144,
at all times;

 

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

 

(c)                                  Furnish
to any Investor, so long as the Investor owns any Registrable Shares, forthwith
on request, (i) a written statement by the Company that it has complied with
the reporting requirements of SEC Rule 144, the Securities Act and the Exchange
Act, (ii) a copy of the most recent annual or quarterly report of the Company
and such other reports and documents so filed by the Company, and (iii) such
other information as may be reasonably requested in availing any Investor of
any rule or regulation of the SEC that permits the selling of any such
securities without registration; and

 

(d)                                 Undertake
any additional actions reasonably necessary to maintain the availability of the
use of Rule 144.

 

5.9                                 Delay
of Registration. No Investor shall have any right to obtain or seek an
injunction restraining or otherwise delaying any registration as the result of
any controversy that might arise with respect to the interpretation or
implementation of this Section 5.

 

6.                                       CONDITIONS
TO INVESTOR OBLIGATIONS AT CLOSING.

 

The
obligations of the Investors to purchase the Securities at the Closing are
subject to the fulfillment on or prior to the Closing of each of the following
conditions:

 

17

 

6.1                                 Representations
and Warranties. The representations and warranties of the Company contained
in Section 2 shall be true in all material respects on and as of the Closing
Date with the same effect as though such representations and warranties had
been made on and as of the Closing Date, except that any representations and
warranties stated as being true and correct as of a date other than the date
hereof shall be true and correct as of such other date.

 

6.2                                 Performance.
The Company shall have performed and complied with all agreements, obligations
and conditions contained in this Agreement that are required to be performed or
complied with by it on or before the Closing.

 

6.3                                 Qualifications.
All authorizations, approvals, or permits, if any, of any governmental
authority or regulatory body of the United States or of any state of the United
States that are required in connection with the lawful issuance and sale of the
Securities to the Investors pursuant to this Agreement shall have been duly
obtained and shall be effective on and as of the Closing.

 

6.4                                 Proceedings
and Documents. All corporate and other proceedings undertaken in connection
with the transactions contemplated at the Closing and all documents incident
thereto shall be reasonably satisfactory in form and substance to each
Investor, and they shall have received all such counterpart original and
certified or other copies of such documents as they may reasonably request.

 

6.5                                 Absence
of Litigation. No proceeding challenging this Agreement or the transactions
contemplated hereby or thereby, or seeking to prohibit, alter, prevent or delay
the Closing, shall have been instituted against the Company before any court,
arbitrator or governmental body, agency or official and shall be pending.

 

6.6                                 Compliance
Certificate. The Company shall deliver to the Investors at the Closing,
relating to the Investors’ purchase of Securities, a certificate signed by the
Chief Executive Officer of the Company stating that the Company has complied
with or satisfied each of the conditions to the Investors’ obligation to
consummate the Closing set forth in Sections 6.1 through 6.5, unless waived in
writing by the Investors.

 

6.7                                 Legal
Prohibition. The purchase of the Securities by the Investors shall not be
prohibited by any law or governmental order or regulation.

 

7.                                       CONDITIONS
TO THE COMPANY’S OBLIGATIONS AT CLOSING.

 

The obligations of the
Company under Section 1 of this Agreement are subject to the fulfillment on or
before the Closing of each of the following conditions:

 

7.1                                 Representations
and Warranties. The representations and warranties of each Investor
contained in Section 3 shall be true in all respects on and as of the Closing
Date with the same effect as though such representations and warranties had
been made on and as of the Closing Date, except that any representations and
warranties stated as being true and correct as of a date other than the date
hereof shall be true and correct as of such other date.

 

18

 

7.2                                 Performance.
Each Investor shall have performed and complied with all agreements,
obligations and conditions contained in this Agreement that are required to be
performed or complied with by it on or before the Closing.

 

7.3                                 Qualifications.
All authorizations, approvals, or permits, if any, of any governmental
authority or regulatory body of the United States or of any state of the United
States that are required in connection with the lawful issuance and sale of the
Securities to the Investors pursuant to this Agreement shall have been duly
obtained and shall be effective on and as of the Closing.

 

7.4                                 Proceedings
and Documents. All corporate and other proceedings undertaken in connection
with the transactions contemplated by this Agreement and all documents incident
thereto shall be reasonably satisfactory in form and substance to the Company
and its counsel, and they shall have received all such counterpart original and
certified or other copies of such documents as they may reasonably request.

 

8.                                       MISCELLANEOUS.

 

8.1                                 Survival
of Warranties. The warranties, representations, agreements, covenants and
undertakings of the Company or the Investors contained in or made pursuant to
this Agreement shall survive the execution and delivery of this Agreement and
the Closing and shall in no way be affected by any investigation of the subject
matter thereof made by or on behalf of the Investors or the Company.

 

8.2                                 Incorporation
by Reference. All Exhibits and Schedules appended to this Agreement are
herein incorporated by reference and made a part hereof.

 

8.3                                 Successor
and Assignees. All terms, covenants, agreements, representations,
warranties and undertakings in this Agreement made by and on behalf of any of
the parties hereto shall bind and inure to the benefit of the respective
successors and assigns of the parties hereto (including transferees of any
Securities) whether so expressed or not, subject to Section 5.7.

 

8.4                                 Amendments
and Waivers. Neither this Agreement nor any provision hereof shall be
waived, modified, changed, discharged, terminated, revoked or canceled except
by an instrument in writing signed by the party against whom any change,
discharge or termination is sought. Failure of either party to exercise any
right or remedy under this Agreement or any other agreement between the Company
and the Investors, or otherwise, or delay by the Company or the Investors in
exercising such right or remedy, will not operate as a waiver thereof, nor
shall any single or partial exercise thereof preclude any other or further
exercise thereof or the exercise of any other right, power or privilege. The
rights and remedies herein provided shall be cumulative and not exclusive of
any rights or remedies provided by law.

 

8.5                                 Governing
Law. This Agreement shall be deemed a contract made under the laws of the
State of New York, without giving effect to the conflicts of law principles
thereof.

 

19

 

8.6                                 Notices.
All notices, requests, consents, demands, notice or other communication
required or permitted under this Agreement shall be in writing and shall be
deemed duly given and received when delivered personally or transmitted by
facsimile, or one business day after being deposited for next-day delivery with
a nationally recognized overnight delivery service, or three days after being
deposited as first class mail with the United States Postal Services, all
charges or postage prepaid, and properly addressed:

 

to the
Company at:

 

Xenomics, Inc.

420 Lexington Avenue,
Suite 1701

New York, New York 10170

Tel:  (212) 297-0808

Fax:  (212) 297-1888

Attention:  Executive Chairman

 

with a
copy (which shall not constitute notice) to:

 

Sichenzia
Ross Friedman Ference LLP

1065
Avenue of the Americas

New
York, New York 10018

Fax:
(212) 930-9725

Attention:
Jeffrey J. Fessler

 

or to
the Investors at the address set forth opposite each Investor’s name on Exhibit
A hereto

 

or such other address as
may be furnished in writing by a party hereto.

 

8.7                                 Counterparts.
This Agreement may be executed in counterparts, all of which together shall
constitute one and the same instrument.

 

8.8                                 Effect
of Headings. The section and paragraph headings herein are included for
convenience only and shall not affect the construction hereof.

 

8.9                                 Entire
Agreement. This Agreement and the Exhibits and Schedules hereto and thereto
constitute the entire agreement among the Company and the Investors with
respect to the subject matter hereof. There are no representations, warranties,
covenants or undertakings with respect to the subject matter hereof other than
those expressly set forth herein. This Agreement supersedes all prior
agreements between the parties with respect to the Securities purchased
hereunder and the subject matter hereof.

 

8.10                           Publicity.
Neither party shall originate any publicity, news release or other public
announcement, written or oral, whether relating to the performance under this
Agreement or the existence of any arrangement between the parties, without the
prior written consent of the other party (which consent shall not be unreasonably
withheld or delayed), except where such publicity, news release or other public
announcement is required by law or by

 

20

 

Section 4.1; provided that, in such event, each such
party shall (a) promptly consult the other party in connection with any such
publicity, news release or other public announcement prior to its release; (b)
promptly provide the other party a copy thereof; and (c) use commercially
reasonable efforts to ensure that such portions of such information as may
reasonably be designated by the other party are accorded confidential treatment
by the applicable governmental entity.

 

8.11                           Severability.
If any provision of this Agreement is held by a court of competent jurisdiction
to be unenforceable under applicable law, such provision shall be replaced with
a provision that accomplishes, to the extent possible, the original business
purpose of such provision in a valid and enforceable manner, and the balance of
the Agreement shall be interpreted as if such provision were so modified and
shall be enforceable in accordance with its terms.

 

8.12                           Interpretation.
This Agreement shall be construed according to its fair language. The rule of
construction to the effect that any ambiguities are to be resolved against the
drafting party shall not be employed in the interpretation of this Agreement.

 

8.13                           No
Strict Construction. 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.

 

8.14                           Independent
Nature of Investors’ Obligations and Rights.  The obligations of each Investor under this
Agreement are several and not joint with the obligations of any other Investor,
and no Investor shall be responsible in any way for the performance of the
obligations of any other Investor under this Agreement. The decision of each
Investor to purchase Securities pursuant to this Agreement has been made by
such Investor independently of any other Investor and independently of any
information, materials, statements or opinions as to the business, affairs,
operations, assets, properties, liabilities, results of operations, condition
(financial or otherwise) or prospects of the Company which may have been made
or given by any other Investor or by any agent or employee of any other
Investor, and no Investor or any of its agents or employees shall have any
liability to any other Investor (or any other person) relating to or arising
from any such information, materials, statements or opinions. Nothing contained
herein, and no action taken by any Investor pursuant thereto, shall be deemed
to constitute the Investors as a partnership, an association, a joint venture
or any other kind of entity, or create a presumption that the Investors are in
any way acting in concert or as a group with respect to such obligations or the
transactions contemplated by this Agreement. Each Investor acknowledges that no
other Investor has acted as agent for such Investor in connection with making
its investment hereunder and that no other Investor will be acting as agent of
such Investor in connection with monitoring its investment hereunder. Each
Investor shall be entitled to independently protect and enforce its rights, including
without limitation the rights arising out of this Agreement, and it shall not
be necessary for any other Investor to be joined as an additional party in any
proceeding for such purpose. The Company has elected to provide all Investors
with the same terms and form of this Agreement for the convenience of the
Company and not because it was required or requested to do so by the Investors.

 

21

 

IN WITNESS WHEREOF, this
Agreement has been executed as of the date first above written, by the duly
authorized representatives of the parties hereto.

 

	
   

  	
  XENOMICS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
					

 

 

	
   

  	
   

  	
  INVESTOR

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name of Person or
  Entity

  

 

 

	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  	
  Title:

  	
   

  

 

22

 

Schedule A

 

COMPANY SCHEDULE
OF EXCEPTIONS

 

 

Exhibit A

 

	
  Investor Name and

  Notice Address

  	
   

  	
  Cash

  Investment

  Amount

  	
   

  	
  Number of

  Shares

  	
   

  	
  Number of

  Warrants

  (1)

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

(1)          A number of warrants as
equals 50% of the Shares subscribed for by each Investor

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00115-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00115-of-00352.parquet"}]]