Document:

Exhibit 10.1

     

    SECURITIES
      PURCHASE AGREEMENT

    THIS
      SECURITIES PURCHASE AGREEMENT
      (the
“Agreement”),
      dated
      as of February 1, 2007, by and among OccuLogix, Inc., a Delaware
      corporation
      with
      headquarters located at 2600 Skymark Avenue, Unit 9, Suite 201, Mississauga,
      Ontario L4W 5B2 (the “Company”),
      and
      the investors listed on the Schedule of Investors attached hereto as
      Exhibit A (individually,
      an “Investor”
and
      collectively, the “Investors”).
      

     

    BACKGROUND

     

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

     

    B. Each
      Investor, severally and not jointly, wishes to purchase, and the Company wishes
      to sell, upon the terms and conditions stated in this Agreement, (i) that
      aggregate number of shares of the Common Stock, par value $.001 per share,
      of
      the Company (the “Common
      Stock”),
      set
      forth opposite such Investor’s name in column two (2) on the Schedule of
      Investors in Exhibit A
      (which
      aggregate amount for all Investors together shall be 6,677,333 shares of Common
      Stock and shall collectively be referred to herein as the “Common
      Shares”)
      and
      (ii) warrants, in substantially the form attached hereto as Exhibit
      F
      (the
“Warrants”) to acquire up to that number of additional shares of Common Stock
      set forth opposite such Investor’s name in column three (3) on the Schedule of
      Investors (the shares of Common Stock issuable upon exercise of or otherwise
      pursuant to the Warrants, collectively, the “Warrant
      Shares”).
      

     

    C. The
      Common Shares, the Warrants and the Warrant Shares
      issued
      pursuant
      to this Agreement are
      collectively referred to herein as the “Securities.”
      

     

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

     

         
      ARTICLE I  

    DEFINITIONS

     

    1.1  Definitions.
      In
      addition to the terms defined elsewhere in this Agreement, the following terms
      have the meanings indicated:

     

    “Affiliate”
means
      any Person that, directly or indirectly through one or more intermediaries,
      controls or is controlled by or is under common control with a Person, as such
      terms are used in and construed under Rule 144
      under
      the Securities Act.

     

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

     

    “Agreement”
has
      the
      meaning set forth in the Preamble.

     

    “Best
      Efforts”
means
      the efforts that a prudent person desirous of achieving a result would use
      in
      similar circumstances to ensure that such result is achieved as expeditiously
      as
      practical; provided,
      however,
      that an
      obligation to use Best Efforts under this Agreement does not require the Company
      to dispose of or make any change to its business, expend any material funds
      or
      incur any other material burden.

     

    “Business
      Day”
means
      any day other than Saturday, Sunday or other day on which commercial banks
      in
      The City of New York are authorized or required by law to remain
      closed.

     

    “Closing”
means
      the closing of the purchase and sale of the Securities pursuant to Section 2.1.

     

    “Closing
      Date”
means
      the date and time of the Closing and shall be on such date and time as is
      mutually agreed to by the Company and each Investor.

     

    “Closing
      Price”
means,
      for any date, the closing price per share of the Common Stock for such date
      (or
      the nearest preceding date) on the primary Eligible Market or exchange or
      quotation system on which the Common Stock is then listed or
      quoted.

     

    “Company”
      has
      the
      meaning set forth in the Preamble.

     

    “Company
      Counsel”
means
      Torys
      LLP,
      counsel
      to the Company.

     

    “Common
      Shares”
means
      an aggregate of 6,677,333 shares of Common Stock, which are being issued and
      sold by the Company to the Investors at the Closing.

     

    “Common
      Stock”
means
      the common stock of the Company, par value $0.001 per share.

     

    “Contingent
      Obligation”
has
      the
      meaning set forth in Section
      3.1(aa).
      

     

    “Convertible
      Securities”
means
      any stock or securities (other than Options) convertible into or exercisable
      or
      exchangeable for Common Stock. 

     

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

     

    “Effective
      Date”
means
      the date that the Registration Statement is first declared effective by the
      SEC.

     

    “Effectiveness
      Period”
has
      the
      meaning set forth in Section 6.1(b).

     

    “8-K
      Filing”
has
      the
      meaning set forth in Section
      4.5. 

     

    “Eligible
      Market”
means
      any of the New York Stock Exchange, the American Stock Exchange, The Nasdaq
      Global Select Market, The Nasdaq Global Market or The Nasdaq Capital
      Market.

     

    “Event”
has
      the
      meaning set forth in Section 6.1(d).

     

    “Event
      Payments”
has
      the
      meaning set forth in Section 6.1(d).

     

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

     

    “Excluded
      Events”
has
      the
      meaning set forth in Section 6.1(d)(ii).

     

    “Excluded
      Investors”
means
      Cowen and Company, LLC and its Affiliates.

     

    “Filing
      Date”
means
      30 days after the Closing Date.

     

    “GAAP”
has
      the
      meaning set forth in Section
      3.1(g).
      

     

    “Indebtedness”
has
      the
      meaning set forth in Section
      3.1(aa).

     

    “Indemnified
      Party”
has
      the
      meaning set forth in Section 6.4(c).

     

    “Indemnifying
      Party”
has
      the
      meaning set forth in Section 6.4(c).

     

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

     

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

     

    “Investor”
has
      the
      meaning set forth in the Preamble. 

     

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

     

    “Losses”
means
      any and all losses, claims, damages, liabilities, settlement costs and expenses,
      including, without limitation, reasonable attorneys’ fees.

     

    “Material
      Adverse Effect”
means
      (i) a material adverse effect on the results of operations, assets, business
      or
      financial condition of the Company and the Subsidiaries, taken as a whole on
      a
      consolidated basis, or (ii) material and adverse impairment of the
      Company’s ability to perform its obligations under any of the Transaction
      Documents, provided, that none of the following alone shall be deemed, in and
      of
      itself, to constitute a Material Adverse Effect: (i) a change in the market
      price or trading volume of the Common Stock or (ii) changes in general economic
      conditions or changes affecting the industry in which the Company operates
      generally (as opposed to Company-specific changes) so long as such changes
      do
      not have a disproportionate effect on the Company and its Subsidiaries taken
      as
      a whole.

     

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

     

    “Options”
means
      any outstanding rights, warrants or options to subscribe for or purchase Common
      Stock or Convertible Securities.

     

    “Person”
means
      any individual or corporation, partnership, trust, incorporated or
      unincorporated association, joint venture, limited liability company, or joint
      stock company. 

     

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

     

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

     

    “Registrable
      Securities”
means
      the Common Shares and the Warrant Shares issued or issuable pursuant to the
      Transaction Documents, together with any securities issued or issuable upon
      any
      stock split, dividend or other distribution, recapitalization or similar event
      with respect to the foregoing.

     

    “Registration
      Statement”
means
      each registration statement required to be filed under Article VI,
      including (in each case) the Prospectus, amendments and supplements to such
      registration statement or Prospectus, including pre- and post-effective
      amendments, all exhibits thereto, and all material incorporated by reference
      or
      deemed to be incorporated by reference in such registration
      statement.

     

    “Regulation
      D”
has
      the
      meaning set forth in the Preamble. 

     

    “Required
      Effectiveness Date”
means
      the
      date
      which is the earliest of (i) if the Registration Statement does not become
      subject to review by the SEC, (a) ninety (90) days after the Closing Date or
      (b)
      five (5) Trading Days after the Company receives notification from the SEC
      that
      the Registration Statement will not become subject to review, or (ii) if the
      Registration Statement becomes subject to review by the SEC, one hundred and
      twenty (120) days after the Closing Date.

     

    “Rule 144,”
      “Rule 415,”
and
      “Rule 424”
means
      Rule 144,
      Rule 415
      and
      Rule 424,
      respectively, promulgated by the SEC pursuant to the Securities Act, as such
      Rules may be amended from time to time, or any similar rule or regulation
      hereafter adopted by the SEC having substantially the same effect as such
      Rule.

     

    “SEC”
      has
      the
      meaning set forth in the Preamble.

     

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

     

    “Securities”
has
      the
      meaning set forth in the Preamble.

     

    “Securities
      Act”
has
      the
      meaning set forth in the Preamble. 

     

    “Shares”
means
      shares of the Company’s Common Stock.

     

    “Short
      Sales”
has
      the
      meaning set forth in Section
      3.2(h).
      

     

    “Subsidiary”
means
      any direct
      or
      indirect subsidiary of the Company.

     

    “Trading
      Day”
means
      (a) any day on which the Common Stock is listed or quoted and traded on its
      primary Trading Market, (b) if the Common Stock is not then listed or
      quoted and traded on any Eligible Market, then a day on which trading occurs
      on
      the The Nasdaq Global Select Market (or any successor thereto), or (c) if
      trading ceases to occur on the The Nasdaq Global Select Market (or any successor
      thereto), any Business Day.

     

    “Trading
      Market”
means
      the The Nasdaq Global Select Market or
      any
      other Eligible Market, or any other national securities exchange, market or
      trading or quotation facility on which the Common Stock is then listed or
      quoted.

     

    “Transaction
      Documents”
means
      this Agreement, the schedules and exhibits attached hereto,
      the Warrants and the Transfer Agent Instructions.

     

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

     

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

     

    “Warrants”
has
      the
      meaning set forth in the Preamble.

     

    “Warrant
      Shares”
has
      the
      meaning set forth in the Preamble.

     

         
      ARTICLE II  

    PURCHASE
      AND SALE

     

    2.1  Closing.
      Subject
      to the terms and conditions set forth in this Agreement, at the Closing, the
      Company shall issue and sell to each Investor, and each Investor shall,
      severally and not jointly, purchase from the Company, such number of Common
      Shares
      and Warrants and for the price set forth opposite such Investor’s name on
Exhibit A
      hereto
      under the headings “Common Shares”, “Warrants” and “Purchase Price”,
      respectively. The date and time of the Closing shall be 11:00 a.m., New York
      City Time, on the Closing Date. The Closing shall take place at the offices
      of
      the Company Counsel. 

     

    2.2  Closing
      Deliveries.

     

    (a)  At
      the
      Closing, the Company shall deliver or cause to be delivered to each Investor
      the
      following:

     

    (i)  one
      or
      more stock certificates (or copies thereof provided by the Transfer Agent),
      free
      and clear of all restrictive and other legends (except as expressly provided
      in
Section 4.1(b)
      hereof), evidencing such number of Common Shares set forth opposite such
      Investor’s name on Exhibit A
      hereto
      under the heading “Common Shares,” registered in the name of such
      Investor;

     

    (ii)  a
      Warrant, issued in the name of such Investor, pursuant to which such Investor
      shall have the right to acquire such number of Warrant Shares set forth opposite
      such Investor’s name on Exhibit A
      hereto
      under the heading “Warrant Shares”;

     

    (iii)  a
      legal
      opinion of Company Counsel, in the form of Exhibit C,
      executed by such counsel and delivered to the Investors; 

     

    (iv)  duly
      executed Transfer Agent Instructions acknowledged by the Transfer Agent;
      and

     

    (v)  evidence
      of filing with each applicable Trading Market of an additional shares listing
      application covering all of the Registrable Securities (and, if applicable,
      evidence of conditional listing approval).

     

    (b)  At
      the
      Closing, each Investor shall deliver or cause to be delivered to the
      Company the purchase price set forth opposite such Investor’s name on
Exhibit A
      hereto
      under the heading “Purchase Price” in United States dollars and in immediately
      available funds, by wire transfer to an account designated in writing to such
      Investor by the Company for such purpose.

     

     
      ARTICLE III  

    REPRESENTATIONS
      AND WARRANTIES

     

    3.1  Representations
      and Warranties of the Company.
      The
      Company hereby represents and warrants to the Investors as follows (which
      representations and warranties shall be deemed to apply, where appropriate,
      to
      each Subsidiary of the Company):

     

    (a)  Subsidiaries.
      The
      Company has no Subsidiaries other than those listed in Schedule 3.1(a)
      hereto.
      Except as disclosed in Schedule 3.1(a)
      hereto,
      the Company owns, directly or indirectly, all of the capital stock or comparable
      equity interests of each Subsidiary free and clear of any Lien and all the
      issued and outstanding shares of capital stock or comparable equity interest
      of
      each Subsidiary are validly issued and are fully paid, non-assessable and free
      of preemptive and similar rights.

     

    (b)  Organization
      and Qualification.
      Each of
      the Company and the Subsidiaries is an entity duly organized, validly existing
      and in good standing under the laws of the jurisdiction of its incorporation
      or
      organization (as applicable), with the requisite legal authority to own and
      use
      its properties and assets and to carry on its business as currently conducted.
      Neither the Company nor any Subsidiary is in violation of any of the provisions
      of its respective certificate or articles of incorporation, bylaws or other
      organizational or charter documents. Each of the Company and the Subsidiaries
      is
      duly qualified to do business and is in good standing as a foreign corporation
      or other entity in each jurisdiction in which the nature of the business
      conducted or property owned by it makes such qualification necessary, except
      where the failure to be so qualified or in good standing, as the case may be,
      would not, individually or in the aggregate, have or reasonably be expected
      to
      result in a Material Adverse Effect.

     

    (c)  Authorization;
      Enforcement.
      The
      Company has the requisite corporate authority to enter into and to consummate
      the transactions contemplated by each of the Transaction Documents to which
      it
      is a party and otherwise to carry out its obligations hereunder and thereunder.
      The execution and delivery of each of the Transaction Documents to which it
      is a
      party by the Company and the consummation by it of the transactions contemplated
      hereby and thereby have been duly authorized by all necessary corporate action
      on the part of the Company and no further consent or action is required by
      the
      Company, its Board of Directors or its stockholders. Each of the Transaction
      Documents to which it is a party has been (or upon delivery will be) duly
      executed by the Company and is, or when delivered in accordance with the terms
      hereof will constitute, the valid and binding obligation of the Company
      enforceable against the Company in accordance with its terms, except as may
      be
      limited by (i) applicable bankruptcy, insolvency, reorganization or other
      laws of general application relating to or affecting the enforcement of
      creditors rights generally, and (ii) the effect of rules of law governing
      the availability of specific performance and other equitable
      remedies.

     

    (d)  No
      Conflicts.
      The
      execution, delivery and performance of the Transaction Documents to which it
      is
      a party by the Company and the consummation by the Company of the transactions
      contemplated hereby and thereby do not, and will not, (i) conflict with or
      violate any provision of the Company’s or any Subsidiary’s certificate or
      articles of incorporation, bylaws or other organizational or charter documents,
      (ii) conflict with, or constitute a default (or an event that 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 (with or without
      notice, lapse of time or both) of, any agreement, credit facility, debt or
      other
      instrument (evidencing a Company or Subsidiary debt or otherwise) or other
      understanding to which the Company or any Subsidiary is a party or by which
      any
      property or asset of the Company or any Subsidiary is bound, or affected, except
      to the extent that such conflict, default, termination, amendment, acceleration
      or cancellation right would not reasonably be expected to have a Material
      Adverse Effect, or (iii) result in a violation of any law, rule, regulation,
      order, judgment, injunction, decree or other restriction of any court or
      governmental authority to which the Company or a Subsidiary is subject
      (including, assuming the accuracy of the representations and warranties of
      the
      Investors set forth in Section
      3.2
      hereof,
      federal and state securities laws and regulations and the rules and regulations
      of any self-regulatory organization to which the Company or its securities
      are
      subject, including all applicable Trading Markets), or by which any property
      or
      asset of the Company or a Subsidiary is bound or affected, except to the extent
      that such violation would not reasonably be expected to have a Material Adverse
      Effect.

     

    (e)  The
      Securities.
      The
Securities
      (including the Warrant Shares) are duly authorized and, when issued and paid
      for
      in accordance with the Transaction Documents, will be duly and validly issued,
      fully paid and nonassessable, free and clear of all Liens and will not be
      subject to preemptive or similar rights of stockholders (other than those
      imposed by the Investors). The Company has reserved from its duly authorized
      capital stock the maximum number of shares of Common Stock issuable upon
      exercise of the Warrants. Assuming the continued validity of the Investors’
representations and warranties contained in Section 3.2(d),
      the
      offer, issuance and sale of the Shares, the Warrants and the Warrant Shares
      to
      the Investors pursuant to this Agreement, and in the case of the Warrant Shares,
      pursuant to the Warrants, are exempt from the registration requirements of
      the
      Securities Act.

     

    (f)  Capitalization.
      The
      aggregate number of shares and type of all authorized, issued and outstanding
      classes of capital stock, Options and other securities of the Company (whether
      or not presently convertible into or exercisable or exchangeable for shares
      of
      capital stock of the Company) is set forth in Schedule 3.1(f)
      hereto.
      All outstanding shares of capital stock are duly authorized, validly issued,
      fully paid and nonassessable and have been issued in compliance in all material
      respects with all applicable securities laws. Except as disclosed in
Schedule 3.1(f)
      hereto,
      the Company did not have outstanding at December 31, 2006, any other Options,
      script rights to subscribe to, calls or commitments of any character whatsoever
      relating to, or securities, rights or obligations convertible into or
      exercisable or exchangeable for, or entered into any agreement giving any Person
      any right to subscribe for or acquire, any shares of Common Stock, or securities
      or rights convertible or exchangeable into shares of Common Stock. Except as
      set
      forth on Schedule
      3.1(f)
      hereto,
      and except for customary adjustments as a result of stock dividends, stock
      splits, combinations of shares, reorganizations, recapitalizations,
      reclassifications or other similar events, there are no anti-dilution or price
      adjustment provisions contained in any security issued by the Company (or in
      any
      agreement providing rights to security holders) and the issuance and sale of
      the
      Securities will not obligate the Company to issue shares of Common Stock or
      other securities to any Person (other than the Investors) and will not result
      in
      a right of any holder of securities to adjust the exercise, conversion, exchange
      or reset price under such securities. To the knowledge of the Company, except
      as
      disclosed in the SEC Reports and any Schedules 13D or 13G filed with the SEC
      pursuant to Rule 13d-1 of the Exchange Act by reporting persons or in
Schedule
      3.1(f)
      hereto,
      no Person or group of related Persons beneficially owns (as determined pursuant
      to Rule 13d-3 under the Exchange Act), or has the right to acquire, by agreement
      with or by obligation binding upon the Company, beneficial ownership of in
      excess of 5% of the outstanding Common Stock.

     

    (g)  SEC
      Reports; Financial Statements.
      Except
      as set forth on Schedule 3.1(g),
      the
      Company has filed all reports required to be filed by it under the Exchange
      Act,
      including pursuant to Section 13(a) or 15(d) thereof, for the 12 months
      preceding the date hereof on a timely basis or has received a valid extension
      of
      such time of filing and has filed any such SEC Reports prior to the expiration
      of any such extension and has filed all reports required to be filed by it
      under
      the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof, for
      the
      two years preceding the date hereof. Such reports required to be filed by the
      Company under the Exchange Act, including pursuant to Section 13(a) or 15(d)
      thereof, together with any materials filed or furnished by the Company under
      the
      Exchange Act, whether or not any such reports were required being collectively
      referred to herein as the “SEC
      Reports”
and,
      together with this Agreement and the Schedules to this Agreement, the
“Disclosure
      Materials”.
      As of
      their respective dates, the SEC Reports filed by the Company 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, and none
      of
      the SEC Reports, when filed by the Company, 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 the light of the
      circumstances under which they were made, not misleading. The financial
      statements of the Company included in the SEC Reports comply in all material
      respects with applicable accounting requirements and the rules and regulations
      of the SEC with respect thereto as in effect at the time of filing. Such
      financial statements have been prepared in accordance with United States
      generally accepted accounting principles applied on a consistent basis during
      the periods involved (“GAAP”),
      except as may be otherwise specified in such financial statements, the notes
      thereto and except that unaudited financial statements may not contain all
      footnotes required by GAAP or may be condensed or summary statements, and fairly
      present in all material respects the consolidated financial position of the
      Company and its consolidated Subsidiaries as of and for the dates thereof and
      the results of operations and cash flows for the periods then ended, subject,
      in
      the case of unaudited statements, to normal, year-end audit adjustments. All
      material agreements to which the Company or any Subsidiary is a party or to
      which the property or assets of the Company or any Subsidiary are subject are
      included as part of or identified in the SEC Reports, to the extent such
      agreements are required to be included or identified pursuant to the rules
      and
      regulations of the SEC.

     

    (h)  Since
      the
      date of the latest audited financial statements included within the SEC Reports,
      except as disclosed in the SEC Reports or in Schedule
      3.1(h)
      hereto,
      (i) there has been no event, occurrence or development that, individually
      or in the aggregate, has had or that would result in a Material Adverse Effect,
      (ii) the Company has not incurred any material liabilities other than
      (A) trade payables and accrued expenses incurred in the ordinary course of
      business consistent with past practice and (B) liabilities not required to
      be reflected in the Company’s financial statements pursuant to GAAP or required
      to be disclosed in filings made with the SEC, (iii) the Company has not
      altered its method of accounting or changed its auditors, except as disclosed
      in
      its SEC Reports, (iv) the Company has not declared or made any dividend or
      distribution of cash or other property to its stockholders, in their capacities
      as such, or purchased, redeemed or made any agreements to purchase or redeem
      any
      shares of its capital stock (except for repurchases by the Company of shares
      of
      capital stock held by employees, officers, directors, or consultants pursuant
      to
      an option of the Company to repurchase such shares upon the termination of
      employment or services), and (v) the Company has not issued any equity
      securities to any officer, director or Affiliate, except pursuant to existing
      Company stock-based plans. The Company has not taken any steps to seek
      protection pursuant to any bankruptcy law nor does the Company have any
      knowledge or reason to believe that its creditors intend to initiate involuntary
      bankruptcy proceedings or any actual knowledge of any fact which would
      reasonably lead a creditor to do so. The Company is not as of the date hereof,
      and after giving effect to the transactions contemplated hereby to occur at
      the
      Closing, will not be Insolvent (as defined below). For purposes of this
Section
      3.1(h),
      “Insolvent”
      means
      (i) the present fair saleable value of the Company’s assets is less than the
      amount required to pay the Company’s total Indebtedness (as defined in
Section
      3.1(aa)),
      (ii)
      the Company is unable to pay its debts and liabilities, subordinated, contingent
      or otherwise, as such debts and liabilities become absolute and matured, (iii)
      the Company intends to incur or believes that it will incur debts that would
      be
      beyond its ability to pay as such debts mature or (iv) the Company has
      unreasonably small capital with which to conduct the business in which it is
      engaged as such business is now conducted.

     

    (i)  Absence
      of Litigation.
      Except
      as disclosed in the SEC Reports, there is no action, suit, claim, or Proceeding,
      or, to the Company’s knowledge, inquiry or investigation, before or by any
      court, public board, government agency, self-regulatory organization or body
      pending or, to the knowledge of the Company, threatened against or affecting
      the
      Company or any of its Subsidiaries that would be reasonably expected,
      individually or in the aggregate, to have a Material Adverse
      Effect.

     

    (j)  Compliance.
      Except
      as described in Schedule
      3.1(j),
      neither
      the Company nor any Subsidiary, except in each case as would not, individually
      or in the aggregate, reasonably be expected to have or result in a Material
      Adverse Effect, (i) is in default under or in violation of (and no event
      has occurred that has not been waived that, with notice or lapse of time or
      both, would result in a default by the Company or any Subsidiary under), nor
      has
      the Company or any Subsidiary received written notice of a claim that it is
      in
      default under or that it is in violation of, any indenture, loan or credit
      agreement or any other agreement or instrument to which it is a party or by
      which it or any of its properties is bound (whether or not such default or
      violation has been waived), (ii) is in violation of any order of any court,
      arbitrator or governmental body, or (iii) is or has been in violation of
      any statute, rule or regulation of any governmental authority.  

     

    (k)  Title
      to Assets.
      The
      Company and the Subsidiaries own no real property. Except as described in
Schedule
      3.1(k),
      the
      Company and the Subsidiaries have good and marketable title in all personal
      property owned by them that is material to the business of the Company and
      the
      Subsidiaries, free and clear of all Liens, except for Liens that do not,
      individually or in the aggregate, have or result in a Material Adverse Effect.
      Any real property and facilities held under lease by the Company and the
      Subsidiaries are held by them under valid, subsisting and enforceable leases
      of
      which the Company and the Subsidiaries are in material compliance.

     

    (l)  No
      General Solicitation; Placement Agent’s Fees.
      Neither
      the Company, nor any of its Affiliates, nor any Person acting on its or their
      behalf, has engaged in any form of general solicitation or general advertising
      (within the meaning of Regulation D) in connection with the offer or sale
      of the Securities. The Company shall be responsible for the payment of any
      placement agent’s fees, financial advisory fees, or brokers’ commission (other
      than for persons engaged by any Investor or its investment advisor) relating
      to
      or arising out of the issuance of the Securities pursuant to this Agreement.
      The
      Company shall pay, and hold each Investor harmless against, any liability,
      loss
      or expense (including, without limitation, reasonable attorney’s fees and
      out-of-pocket expenses) arising in connection with any such claim for fees
      arising out of the issuance of the Securities pursuant to this Agreement. The
      Company acknowledges that it has engaged Cowen and Company, LLC as its
      exclusive
      placement agent (the “Agent”)
      in
      connection with the sale of the Securities. Other than the Agent, the Company
      has not engaged any placement agent or other agent in connection with the sale
      of the Securities.

     

    (m)   Private
      Placement.
      Neither
      the Company nor any of its Affiliates nor, any Person acting on the Company’s
      behalf has, directly or indirectly, at any time within the past six months,
      made
      any offer or sale of any security or solicitation of any offer to buy any
      security under circumstances that would (i) eliminate the availability of
      the exemption from registration under Regulation D under the Securities Act
      in connection with the offer and sale by the Company of the Securities as
      contemplated hereby or (ii) cause the offering of the Securities pursuant
      to the Transaction Documents to be integrated with prior offerings by the
      Company for purposes of any applicable law, regulation or stockholder approval
      provisions, including, without limitation, under the rules and regulations
      of
      any Trading Market. The sale and issuance of the Securities hereunder does
      not
      contravene the rules and regulations of any Trading Market on which the Common
      Stock is listed or quoted. The Company is not required to be registered as,
      and
      is not an Affiliate of, an “investment company” within the meaning of the
      Investment Company Act of 1940, as amended. The Company is not required to
      be
      registered as a United States real property holding corporation within the
      meaning of the Foreign Investment in Real Property Tax Act of 1980.

     

    (n)  Form
      S-3 Eligibility.
      The
      Company is eligible to register the Common Shares and
      the
      Warrant Shares
      for
      resale by the Investors using Form S-3 promulgated under the Securities
      Act.

     

    (o)  Listing
      and Maintenance Requirements.
      The
      Company has not, in the twelve months preceding the date hereof, received notice
      (written or oral) from any Trading Market on which the Common Stock is or has
      been listed or quoted to the effect that the Company is not in compliance with
      the listing or maintenance requirements of such Trading Market. The Company
      is,
      and has no reason to believe that it will not in the foreseeable future continue
      to be, in compliance with all such listing and maintenance
      requirements.

     

    (p)  Registration
      Rights.
      Except
      as described in Schedule
      3.1(p),
      the
      Company has not granted or agreed to grant to any Person any rights (including
      “piggy-back” registration rights) to have any securities of the Company
      registered with the SEC or any other governmental authority that have not been
      satisfied or waived.

     

    (q)  Application
      of Takeover Protections.
      Except
      as described in Schedule 3.1(q),
      there
      is no control share acquisition, business combination, poison pill (including
      any distribution under a rights agreement) or other similar anti-takeover
      provision under the Company’s charter documents or the laws of its state of
      incorporation that is or could become applicable to any of the Investors as
      a
      result of the Investors and the Company fulfilling their obligations or
      exercising their rights under the Transaction Documents, including, without
      limitation, as a result of the Company’s issuance of the Securities and the
      Investors’ ownership of the Securities.

     

    (r)  Disclosure.
      The
      Company confirms that neither it nor any officers, directors or Affiliates,
      has
      provided any of the Investors (other than Excluded Investors) or their agents
      or
      counsel with any information that constitutes or might constitute material,
      nonpublic information (other than the existence and terms of the issuance of
      Securities, as contemplated by this Agreement). The
      Company understands and confirms that each of the Investors will rely on the
      foregoing representations in effecting transactions in securities of the Company
      (other than Excluded Investors). All disclosure provided by the Company to
      the
      Investors regarding the Company, its business and the transactions contemplated
      hereby, including the Schedules to this Agreement, furnished by or on the behalf
      of the Company are true and correct in all material respects and do not contain
      any untrue statement of a material fact or omit to state any material fact
      necessary in order to make the statements made therein, in the light of the
      circumstances under which they were made, not misleading. To the Company’s
      knowledge, except for the transactions contemplated by this Agreement, no event
      or circumstance has occurred or information exists with respect to the Company
      or any of its Subsidiaries or its or their business, properties, operations
      or
      financial condition, which, under applicable law, rule or regulation, requires
      public disclosure or announcement by the Company but which has not been so
      publicly announced or disclosed. The Company acknowledges and agrees that no
      Investor (other than Excluded Investors) makes or has made any representations
      or warranties with respect to the transactions contemplated hereby other than
      those set forth in the Transaction Documents. 

     

    (s)  Acknowledgment
      Regarding Investors’ Purchase of Securities.
      Based
      upon the assumption that the transactions contemplated by this Agreement are
      consummated in all material respects in conformity with the Transaction
      Documents, the Company acknowledges and agrees that each of the Investors (other
      than Excluded Investors) is acting solely in the capacity of an arm’s length
      purchaser with respect to the Transaction Documents and the transactions
      contemplated hereby and thereby. The Company further acknowledges that no
      Investor (other than Excluded Investors) is acting as a financial advisor or
      fiduciary of the Company (or in any similar capacity) with respect to this
      Agreement and the transactions contemplated hereby and any advice given by
      any
      Investor (other than Excluded Investors) or any of their respective
      representatives or agents in connection with the Transaction Documents and
      the
      transactions contemplated hereby and thereby is merely incidental to the
      Investors’ purchase of the Securities. The Company further represents to each
      Investor that the Company’s decision to enter into this Agreement has been based
      solely on the independent evaluation of the transactions contemplated hereby
      by
      the Company and its representatives.

     

    (t)  Patents
      and Trademarks.
      The
      Company and its Subsidiaries own, or, to the knowledge of the Company, possess
      adequate rights or licenses to use, all trademarks, trade names, service marks,
      service mark registrations, service names, patents, patent rights, copyrights,
      inventions, licenses, approvals, governmental authorizations, trade secrets
      and
      other intellectual property rights (“Intellectual
      Property Rights”)
      necessary to conduct their respective businesses
      as now
      conducted, other than as would not have or reasonably be expected to have a
      Material Adverse Effect. Except as set forth in Schedule 3.1(t), none of the
      Company’s Intellectual Property Rights have expired or terminated, or are
      expected to expire or terminate, within three years from the date of this
      Agreement. Neither the Company nor any of its Subsidiaries is the subject of
      any
      claim of infringement or misappropriation by the Company or any of its
      Subsidiaries of Intellectual Property Rights of others. Except as disclosed
      in
      the SEC Reports, there is no claim, action or Proceeding being made or brought,
      or to the knowledge of the Company, being threatened, against the Company or
      its
      Subsidiaries regarding its Intellectual Property Rights. 

     

    (u)  Insurance.
      The
      Company and the Subsidiaries (other than OcuSense, Inc.) are insured by insurers
      of recognized financial responsibility against such losses and risks and in
      such
      amounts as are deemed by the management of the Company to be prudent and
      customary in the businesses and locations in which the Company and the
      Subsidiaries are engaged and located, respectively. 

     

    (v)  Regulatory
      Permits.
      The
      Company and the Subsidiaries possess all certificates, authorizations and
      permits issued by the appropriate federal, state, local or foreign regulatory
      authorities necessary to conduct their respective businesses as described in
      the
      SEC Reports (“Material
      Permits”),
      except
      where the failure to possess such permits does not, individually or in the
      aggregate, have or would reasonably be expected to result in a Material Adverse
      Effect, and neither the Company nor any Subsidiary has received any written
      notice of proceedings relating to the revocation or modification of any Material
      Permit.

     

    (w)  Transactions
      With Affiliates and Employees.
      Except
      as set forth or incorporated by reference in the Company’s SEC Reports, none of
      the officers, directors or employees of the Company is presently a party to
      any
      transaction that would be required to be reported on Form 10-K with the Company
      or any of its Subsidiaries (other than for ordinary course services as
      employees, officers or directors), including any contract, agreement or other
      arrangement providing for the furnishing of services to or by, providing for
      rental of real or personal property to or from, or otherwise requiring payments
      to or from any such officer, director or employee or, to the Company’s
      knowledge, any corporation, partnership, trust or other entity in which any
      such
      officer, director or employee has a substantial interest or is an officer,
      director, trustee or partner.

     

    (x)  Internal
      Accounting Controls.
      The
      Company and the Subsidiaries maintain a system of internal accounting controls
      sufficient to provide reasonable assurance that (i) transactions are
      executed in accordance with management’s general or specific authorizations,
      (ii) transactions are recorded as necessary to permit preparation of
      financial statements in conformity with generally accepted accounting principles
      and to maintain asset accountability, (iii) access to assets is permitted
      only in accordance with management’s general or specific authorization, and
      (iv) the recorded accountability for assets is compared with the existing
      assets at reasonable intervals and appropriate action is taken with respect
      to
      any differences.

     

    (y)  Sarbanes-Oxley
      Act.
      The
      Company is in compliance in all material respects with applicable requirements
      of the Sarbanes-Oxley Act of 2002 and applicable rules and regulations
      promulgated by the SEC thereunder, except where such noncompliance would not
      have, individually or in the aggregate, a Material Adverse Effect.

     

    (z)  Foreign
      Corrupt Practices.
      Neither
      the Company nor any of its Subsidiaries nor, to the knowledge of the Company,
      any director, officer, agent, employee or other Person acting on behalf of
      the
      Company or any of its Subsidiaries has, in the course of its actions for, or
      on
      behalf of, the Company (i) used any corporate funds for any unlawful
      contribution, gift, entertainment or other unlawful expenses relating to
      political activity; (ii) made any direct or indirect unlawful payment to any
      foreign or domestic government official or employee from corporate funds; (iii)
      violated or is in violation of any provision of the U.S. Foreign Corrupt
      Practices Act of 1977, as amended; or (iv) made any unlawful bribe, rebate,
      payoff, influence payment, kickback or other unlawful payment to any foreign
      or
      domestic government official or employee.

     

    (aa)  Indebtedness.
      Except
      as disclosed in Schedule
      3.1(h),
      neither
      the Company nor any of its Subsidiaries (i) has any outstanding Indebtedness
      (as
      defined below) in an individual amount of more than $100,000, (ii) is in
      violation of any term of or in default under any contract, agreement or
      instrument relating to any Indebtedness, except where such violations and
      defaults would not result, individually or in the aggregate, in a Material
      Adverse Effect, or (iii) is a party to any contract, agreement or instrument
      relating to any Indebtedness, the performance of which, in the judgment of
      the
      Company’s officers, has or is expected to have a Material Adverse Effect.
Schedule
      3.1(h) provides
      a detailed description of the material terms of any such outstanding
      Indebtedness in an individual amount of more than $100,000. For purposes of
      this
      Agreement: (x) “Indebtedness”
      of any
      Person means, without duplication (A) all indebtedness for borrowed money,
      (B) all obligations issued, undertaken or assumed as the deferred purchase
      price
      of property or services (other than trade payables entered into in the ordinary
      course of business), (C) all reimbursement or payment obligations with respect
      to letters of credit, surety bonds and other similar instruments, (D) all
      obligations evidenced by notes, bonds, debentures or similar instruments,
      including obligations so evidenced incurred in connection with the acquisition
      of property, assets or businesses, (E) all indebtedness created or arising
      under
      any conditional sale or other title retention agreement, or incurred as
      financing, in either case with respect to any property or assets acquired with
      the proceeds of such indebtedness (even though the rights and remedies of the
      seller or bank under such agreement in the event of default are limited to
      repossession or sale of such property), (F) all monetary obligations under
      any
      leasing or similar arrangement which, in connection with generally accepted
      accounting principles, consistently applied for the periods covered thereby,
      is
      classified as a capital lease, (G) all indebtedness referred to in clauses
      (A) through (F) above secured by (or for which the holder of such Indebtedness
      has an existing right, contingent or otherwise, to be secured by) any mortgage,
      lien, pledge, charge, security interest or other encumbrance upon or in any
      property or assets (including accounts and contract rights) owned by any Person,
      even though the Person which owns such assets or property has not assumed or
      become liable for the payment of such indebtedness, and (H) all Contingent
      Obligations in respect of indebtedness or obligations of others of the kinds
      referred to in clauses (A) through (G) above; and (y) “Contingent
      Obligation”
      means,
      as to any Person, any direct or indirect liability, contingent or otherwise,
      of
      that Person with respect to any indebtedness, lease, dividend or other
      obligation of another Person if the primary purpose or intent of the Person
      incurring such liability, or the primary effect thereof, is to provide assurance
      to the obligee of such liability that such liability will be paid or discharged,
      or that any agreements relating thereto will be complied with, or that the
      holders of such liability will be protected (in whole or in part) against loss
      with respect thereto.

     

    (bb)  Employee
      Relations.
      Neither
      the Company nor any of its Subsidiaries is a party to any collective bargaining
      agreement or employs any member of a union. The Company believes that its
      relations with its employees are as disclosed in the SEC Reports. Except as
      disclosed in the SEC Reports, during the period covered by the SEC Reports,
      no
      executive officer of the Company or any of its Subsidiaries (as defined in
      Rule
      501(f) of the Securities Act) has notified the Company or any such Subsidiary
      that such officer intends to leave the Company or any such Subsidiary or
      otherwise terminate such officer’s employment with the Company or any such
      Subsidiary. To the knowledge of the Company or any such Subsidiary, no executive
      officer of the Company or any of its Subsidiaries is in violation of any
      material term of any employment contract, confidentiality, disclosure or
      proprietary information agreement, non-competition agreement, or any other
      contract or agreement or any restrictive covenant, and the continued employment
      of each such executive officer does not subject the Company or any such
      Subsidiary to any liability with respect to any of the foregoing
      matters.

     

    (cc)  Labor
      Matters.
      The
      Company and its Subsidiaries are in compliance in all material respects with
      all
      federal, state, local and foreign laws and regulations respecting labor,
      employment and employment practices and benefits, terms and conditions of
      employment and wages and hours, except where failure to be in compliance would
      not, either individually or in the aggregate, reasonably be expected to result
      in a Material Adverse Effect.

     

    (dd)  Subsidiary
      Rights.
      Except
      as set forth in Schedule 3.1(a),
      the
      Company or one of its Subsidiaries has the unrestricted right to vote, and
      (subject to limitations imposed by applicable law) to receive dividends and
      distributions on, all capital securities of its Subsidiaries as owned by the
      Company or such Subsidiary.

     

    (ee)  Tax
      Status.
      The
      Company and each of its Subsidiaries (i) has made or filed all foreign, federal
      and state income and all other tax returns, reports and declarations required
      by
      any jurisdiction to which it is subject, except for any which the failure to
      make or file would not be reasonably expected to have, individually or in the
      aggregate, a Material Adverse Effect, (ii) has paid all taxes and other
      governmental assessments and charges that are material in amount, shown or
      determined to be due on such returns, reports and declarations, except those
      being contested in good faith and (iii) has set aside on its books provision
      reasonably adequate for the payment of all taxes for periods subsequent to
      the
      periods to which such returns, reports or declarations apply. There are no
      unpaid taxes in any material amount claimed to be due by the taxing authority
      of
      any jurisdiction, and the officers of the Company know of no basis for any
      such
      claim.

     

    3.2  Representations,
      Warranties and Covenants of the Investors.
      Each
      Investor hereby, as to itself only and for no other Investor, represents,
      warrants and covenants to the Company as follows:

     

    (a)  Organization;
      Authority.
      Such
      Investor is an entity duly organized, validly existing and in good standing
      under the laws of the jurisdiction of its organization with the requisite
      corporate, partnership or other power and authority to enter into and to
      consummate the transactions contemplated by the Transaction Documents and
      otherwise to carry out its obligations hereunder and thereunder. The purchase
      by
      such Investor of the Securities hereunder has been duly authorized by all
      necessary corporate, partnership or other action on the part of such Investor.
      This Agreement has been duly executed and delivered by such Investor and
      constitutes the valid and binding obligation of such Investor, enforceable
      against it in accordance with its terms, except as may be limited by
      (i) applicable bankruptcy, insolvency, reorganization or other laws of
      general application relating to or affecting the enforcement of creditors rights
      generally, and (ii) the effect of rules of law governing the availability
      of specific performance and other equitable remedies.

     

    (b)  No
      Public Sale or Distribution.
      Such
      Investor is (i) acquiring the Common Shares
      and the Warrants and (ii) upon exercise of the Warrants will acquire the
      Warrant Shares issuable upon exercise thereof, in
      the
      ordinary course of business for its own account and not with a view towards,
      or
      for resale in connection with, the public sale or distribution thereof, except
      pursuant to sales registered under the Securities Act or under an exemption
      from
      such registration and in compliance with applicable federal and state securities
      laws, and such Investor does not have a present arrangement to effect any
      distribution of the Securities to or through any person or entity; provided,
      however,
      that by
      making the representations herein, and subject to Section 3.2(c),
      such
      Investor does not agree to hold any of the Securities for any minimum or other
      specific term and reserves the right to dispose of the Securities at any time
      in
      accordance with or pursuant to a registration statement or an exemption under
      the Securities Act.

     

    (c)  No
      Sale in Canada.
      The
      Investor acknowledges that the Securities are not qualified for
      distribution to the public in Canada. The Investor certifies that (A) the
      Investor is not a Canadian resident or acting for the account or benefit of
      a
      Canadian resident; (B) the Investor was, at the time of agreeing to acquire
      the
      Securities, and is, outside Canada; and (C) for a period ending four months
      after the Closing Date, the Investor will not, directly or indirectly, offer
      or
      re-sell the Securities in Canada or to any Canadian resident,
      or to
      any Person who is acting on behalf of a resident of Canada or to any Person
      whom
      it believes intends to re-offer, re-sell or deliver any of the Securities in
      Canada,
      unless
      permitted under applicable securities laws of the provinces and territories
      of
      Canada, and thereafter, any resale by the Investor to a Canadian resident or
      in
      Canada will be made in accordance with applicable securities laws of the
      provinces and territories of Canada.

     

    (d)  Investor
      Status.
      At the
      time such Investor was offered the Securities, it was, and at the date hereof
      it
      is, an “accredited investor” as defined in Rule 501(a) under the Securities Act
      or a “qualified institutional buyer” as defined in Rule 144A(a) under the
      Securities Act. Such Investor is not a registered broker dealer registered
      under
      Section 15(a) of the Exchange Act, or a member of the NASD, Inc. or an entity
      engaged in the business of being a broker dealer. Except as otherwise disclosed
      in writing to the Company on Exhibit
      B-2
      (attached hereto) on or prior to the date of this Agreement, such Investor
      is
      not affiliated with any broker dealer registered under Section 15(a) of the
      Exchange Act, or a member of the NASD, Inc. or an entity engaged in the business
      of being a broker dealer.

     

    (e)  Experience
      of Such Investor.
      Such
      Investor, either alone or together with its representatives has such knowledge,
      sophistication and experience in business and financial matters so as to be
      capable of evaluating the merits and risks of the prospective investment in
      the
      Securities, and has so evaluated the merits and risks of such investment. Such
      Investor understands that it must bear the economic risk of this investment
      in
      the Securities indefinitely, and is able to bear such risk and is able to afford
      a complete loss of such investment.

     

    (f)  Access
      to Information.
      Such
      Investor acknowledges that it has reviewed the Disclosure Materials and has
      been
      afforded: (i) the opportunity to ask such questions as it has deemed
      necessary of, and to receive answers from, representatives of the Company
      concerning the terms and conditions of the offering of the Securities and the
      merits and risks of investing in the Securities; (ii) access to information
      (other than material non-public information) about the Company and the
      Subsidiaries and their respective financial condition, results of operations,
      business, properties, management and prospects sufficient to enable it to
      evaluate its investment; and (iii) the opportunity to obtain such
      additional information that the Company possesses or can acquire without
      unreasonable effort or expense that is necessary to make an informed investment
      decision with respect to the investment. Neither such inquiries nor any other
      investigation conducted by or on behalf of such Investor or its representatives
      or counsel shall modify, amend or affect such Investor’s right to rely on the
      truth, accuracy and completeness of the Disclosure Materials and the Company’s
      representations and warranties contained in the Transaction Documents. Such
      Investor acknowledges receipt of copies of the SEC Reports. Such Investor is
      aware that TLC Vision Corporation, a New Brunswick corporation, which is the
      largest holder of the Common Stock, has publicly announced its intention to
      continue to sell shares of Common Stock.

     

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

     

    (h)  No
      Conflicts.
      The
      execution, delivery and performance by such Investor of this Agreement and
      the
      consummation by such Investor of the transactions contemplated hereby will
      not
      (i) result in a violation of the organizational documents of such Investor
      or (ii) conflict with, or constitute a default (or an event which with
      notice or lapse of time or both would become a default) under, or give to others
      any rights of termination, amendment, acceleration or cancellation of, any
      agreement, indenture or instrument to which such Investor is a party, or
      (iii) result in a violation of any law, rule, regulation, order, judgment
      or decree (including federal and state securities laws) applicable to such
      Investor, except in the case of clauses (ii) and (iii) above, for such that
      are
      not material and do not otherwise affect the ability of such Investor to
      consummate the transactions contemplated hereby.

     

    (i)  Prohibited
      Transactions.
      No
      Investor, directly or indirectly, and no Person acting on behalf of or pursuant
      to any understanding with any Investor, has engaged in any purchases or sales
      of
      any securities, including derivatives, of the Company (including, without
      limitation, any Short Sales (a “Transaction”)
      involving any of the Company’s securities) since the time that such Investor was
      first contacted by the Company, the Agent or any other Person regarding an
      investment in the Company. Such Investor covenants that neither it nor any
      Person acting on its behalf or pursuant to any understanding with such Investor
      will engage, directly or indirectly, in any Transactions in the securities
      of
      the Company (including Short Sales) prior to the time the transactions
      contemplated by this Agreement are publicly disclosed. “Short
      Sales”
      include,
      without limitation, all “short sales” as defined in Rule 200 promulgated under
      Regulation SHO under the Exchange Act and all types of direct and indirect
      stock
      pledges, forward sale contracts, options, puts, calls, short sales, swaps,
      derivatives and similar arrangements (including on a total return basis), and
      sales and other transactions through non-U.S. broker-dealers or foreign
      regulated brokers.

     

    (j)  Restricted
      Securities.
      The
      Investors understand that the Securities are characterized as “restricted
      securities” under the U.S. federal securities laws inasmuch as they are being
      acquired from the Company in a transaction not involving a public offering
      and
      that under such laws and applicable regulations such securities may be resold
      without registration under the Securities Act only in certain limited
      circumstances.

     

    (k)  Legends.
      It is
      understood that, except as provided in Section
      4.1(b)
      of this
      Agreement, certificates evidencing such Securities may bear the legends set
      forth in Section 4.1(b).
      and
      until
      such legend has been removed in accordance with the procedures set forth in
      Section 4.1(b):
      (A) the
      Securities cannot be traded through the facilities of the Toronto Stock Exchange
      (on the Toronto Stock Exchange, the certificate representing the Securities
      is
      not freely transferable and consequently is not “good delivery” in settlement of
      transactions); and (B) the Toronto Stock Exchange may deem the Investor to
      be
      responsible for any loss incurred on a sale made by the Investor of the
      Securities.

     

    (l)  No
      Legal, Tax or Investment Advice.
      

     

    (m)  Such
      Investor understands that nothing in this Agreement or any other materials
      presented by or on behalf of the Company to the Investor in connection with
      the
      purchase of the Securities constitutes legal, tax or investment advice. Such
      Investor has consulted such legal, tax and investment advisors as it, in its
      sole discretion, has deemed necessary or appropriate in connection with its
      purchase of the Securities. Such Investor understands that the Agent has acted
      solely as the agent of the Company in this placement of the Securities, and
      that
      the Agent makes no representation or warranty with regard to the merits of
      this
      transaction or as to the accuracy of any information such Investor may have
      received in connection therewith. Such Investor acknowledges that it has not
      relied on any information or advice furnished by or on behalf of the
      Agent.

     

        
      ARTICLE IV  

    OTHER
      AGREEMENTS OF THE PARTIES

     

    4.1  Transfer
      Restrictions.

     

    (a)  The
      Investors covenant that the Securities will only be disposed of pursuant to
      an
      effective registration statement under, and in compliance with the requirements
      of, the Securities Act or pursuant to an available exemption from the
      registration requirements of the Securities Act, and in compliance with any
      applicable state securities laws. In connection with any transfer of Securities
      other than pursuant to an effective registration statement or to the Company,
      the Company may require the transferor to provide to the Company an opinion
      of
      counsel (and the documents upon which the opinion is based) selected by the
      transferor, the form and substance of which opinion shall be reasonably
      satisfactory to the Company, to the effect that such transfer does not require
      registration under the Securities Act. Notwithstanding the foregoing, the
      Company hereby consents to and agrees to register on the books of the Company
      and with its Transfer Agent, without any such legal opinion, except to the
      extent that the Transfer Agent requests such legal opinion, any transfer of
      Securities by an Investor to an Affiliate of such Investor, provided that the
      transferee certifies to the Company that it is an “accredited investor” as
      defined in Rule 501(a) under the Securities Act and provided that such Affiliate
      does not request any removal of any existing legends on any certificate
      evidencing the Securities.

     

    (b)  The
      Investors agree to the imprinting, so long as is required by this Section 4.1(b),
      of the
      following legends on any certificate evidencing any of the Securities:

     

    THESE
      SECURITIES HAVE NOT 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”),
      OR
      ANY APPLICABLE STATE SECURITIES LAWS 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 COMPLIANCE WITH
      APPLICABLE STATE SECURITIES LAWS OR BLUE SKY LAWS.

     

    THE
      SECURITIES REPRESENTED BY THIS CERTIFICATE ARE LISTED ON THE TORONTO STOCK
      EXCHANGE (THE "TSX"); HOWEVER, THE SAID SECURITIES CANNOT BE TRADED THROUGH
      THE
      FACILITIES OF THE TSX SINCE THEY ARE NOT FREELY TRANSFERABLE, AND CONSEQUENTLY
      ANY CERTIFICATE REPRESENTING SUCH SECURITIES IS NOT "GOOD DELIVERY" IN
      SETTLEMENT OF TRANSACTIONS ON THE TSX.

     

    Certificates
      evidencing Securities shall not be required to contain such legends or any
      other
      legend (i) while a registration statement (including the Registration Statement)
      covering the resale of the Securities is effective under the Securities Act,
      (ii) following any sale of such Securities pursuant to Rule 144
      if
      the
      holder provides the Company with a legal opinion (and the documents upon which
      the legal opinion is based) reasonably acceptable to the Company to the effect
      that the Securities can be sold under Rule 144, (iii) if the holder provides
      the
      Company with a legal opinion (and the documents upon which the legal opinion
      is
      based) reasonably acceptable to the Company to the effect that the
      Securities are eligible for sale under Rule 144(k), or (iv) if the
      holder provides the Company with a legal opinion (and the documents upon which
      the legal opinion is based) reasonably acceptable to the Company to the effect
      that the
      legend
      is not required under applicable requirements of the Securities Act (including
      controlling judicial interpretations and pronouncements issued by the Staff
      of
      the SEC). The Company shall cause its counsel to issue the legal opinion
      included in the Transfer Agent Instructions to the Transfer Agent on the
      Effective Date. Following the Effective Date or at such earlier time as a legend
      is no longer required for certain Securities, the Company will no later than
      five
      Trading
      Days following the delivery by an Investor to the Company or the Transfer Agent
      of (i) a legended certificate representing such Securities, and (ii) an opinion
      of counsel to the extent required by Section
      4.1(a),
      deliver
      or cause to be delivered 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 the Transfer Agent
      that enlarge the restrictions on transfer set forth in this
      Section.

     

    If
      within
three
      Trading
      Days after the Company’s
      receipt
      of a legended certificate and the other documents as specified in Clauses (ii),
      (iii) and (iv) of the paragraph immediately above, as applicable, the Company
      shall fail to issue and deliver to such Investor a certificate representing
      such
      Securities that is free from all restrictive and other legends, and if on or
      after such Trading Day the Investor purchases (in an open market transaction
      or
      otherwise) shares of Common Stock to deliver in satisfaction of a sale by the
      Investor of shares of Common Stock that the Investor anticipated receiving
      from
      the Company without any restrictive legend (the “Covering
      Shares”),
      then
      the Company shall, within five
      Trading
      Days after the Investor’s
      request,
      pay cash
      to the Investor in an amount equal to the excess
      (if any) of the Investor’s
      total
      purchase price (including brokerage commissions, if any) for the Covering
      Shares,
      over the
      product of (A) the number of Covering Shares, times (B) the closing bid
      price
      on the
      date of delivery of such certificate and the other documents as specified in
      Clauses (ii),
      (iii) and (iv) of
      the
      paragraph immediately above, as applicable.

     

    (c) The
      Company will not object to and shall permit (except as prohibited by law) an
      Investor to pledge or grant a security interest in some or all of the Securities
      in connection with a bona fide margin agreement or other loan or financing
      arrangement secured by the Securities, and if required under the terms of such
      agreement, loan or arrangement, the Company will not object to and shall permit
      (except as prohibited by law) such Investor to transfer pledged or secured
      Securities to the pledgees or secured parties. Except as required by law, such
      a
      pledge or transfer would not be subject to approval of the Company, no legal
      opinion of the pledgee, secured party or pledgor shall be required in connection
      therewith, and no notice shall be required of such pledge. Each Investor
      acknowledges that the Company shall not be responsible for any pledges relating
      to, or the grant of any security interest in, any of the Securities or for
      any
      agreement, understanding or arrangement between any Investor and its pledgee
      or
      secured party. At the appropriate Investor’s expense, the Company will execute
      and deliver such reasonable documentation as a pledgee or secured party of
      Securities may reasonably request in connection with a pledge or transfer of
      the
      Securities, including the preparation and filing of any required prospectus
      supplement under Rule 424(b)(3) of the Securities Act or other applicable
      provision of the Securities Act to appropriately amend the list of Selling
      Stockholders thereunder. Provided that the Company is in compliance with the
      terms of this Section
      4.1(c),
      the
      Company’s indemnification obligations pursuant to Section
      6.4
      shall
      not extend to any Proceeding or Losses arising out of or related to this
Section
      4.1(c).

     

    4.2  Furnishing
      of Information.
      Until
      the date that any Investor owning Common Shares
      or
      Warrant Shares may sell all of them under Rule 144(k) of the Securities Act
      (or
      any successor
      provision), the Company covenants to use its commercially reasonable efforts
      to
      timely file (or obtain extensions in respect thereof and file within the
      applicable grace period) all reports required to be filed by the Company after
      the date hereof pursuant to the Exchange Act. The Company further covenants
      that
      it will take such further action as any holder of Securities may reasonably
      request to satisfy the provisions of this Section
      4.2.

     

    4.3  Integration.
      The
      Company shall not, and shall use its commercially reasonable efforts to ensure
      that no Affiliate thereof shall, sell, offer for sale or solicit offers to
      buy
      or otherwise negotiate in respect of any security (as defined in Section 2
      of the Securities Act) that would be integrated with the offer or sale of the
      Securities in a manner that would require the registration under the Securities
      Act of the sale of the Securities to the Investors or that would be integrated
      with the offer or sale of the Securities for purposes of the rules and
      regulations of any Trading Market.

     

    4.4  Reservation
      of Securities.
      The
      Company shall maintain a reserve from its duly authorized shares of Common
      Stock
      for issuance pursuant to the Transaction Documents in such amount as may be
      required to fulfill its obligations to issue such Shares under the Transaction
      Documents. In the event that at any time the then authorized shares of Common
      Stock are insufficient for the Company to satisfy its obligations to issue
      such
      Shares under the Transaction Documents, the Company shall promptly take such
      actions as may be required to increase the number of authorized
      shares.

     

    4.5  Securities
      Laws Disclosure; Publicity.
      The
      Company shall, at or before 8:30 a.m., New York time, on the first Trading
      Day
      following execution of this Agreement, issue a press release reasonably
      acceptable to the Investors disclosing all material terms of the transactions
      contemplated hereby. On the Closing Date, the Company shall file a Current
      Report on Form 8-K with the SEC (the “8-K
      Filing”)
      describing the terms of the transactions contemplated by the Transaction
      Documents and including as exhibits to such Current Report on Form 8-K the
      Transaction Documents (including the schedules and the names, and addresses
      of
      the Investors and the amount(s) of Securities respectively purchased)
      and the
      form of Warrants,
      in the
      form required by the Exchange Act. Thereafter, the Company shall timely file
      any
      filings and notices required by the SEC or applicable law with respect to the
      transactions contemplated hereby and provide copies thereof to the Investors
      promptly after filing. Except as herein provided, the Company shall not publicly
      disclose the name of any Investor, or include the name of any Investor in any
      press release without the prior written consent of such Investor, unless
      otherwise required by law. The Company shall not, and shall cause each of its
      Subsidiaries and its and each of their respective officers, directors, employees
      and agents not to, provide any Investor with any material nonpublic information
      regarding the Company or any of its Subsidiaries from and after the issuance
      of
      the above referenced press release without the express written consent of such
      Investor. 

     

    4.6  Use
      of
      Proceeds.
      The
      Company intends to use the net proceeds from the sale of the Securities for
      working capital and general corporate purposes. The Company also may use a
      portion of the net proceeds, currently intended for general corporate purposes,
      to acquire or invest in technologies, products or services that complement
      its
      business, although the Company has no present plans or commitments and is not
      currently engaged in any material negotiations with respect to these types
      of
      transactions. Pending these uses, the Company intends to invest the net proceeds
      from this offering in short-term, interest-bearing, investment-grade securities,
      or as otherwise pursuant to the Company’s customary investment
      policies.

     

    4.7  Restriction
      on Issuances.
      From
      the Closing Date until 45 days after the Effective Date, the Company shall
      not
      issue or sell any shares of Common Stock other than the issuance of shares
      of
      Common Stock (i) upon the exercise of Options outstanding on the date hereof,
      (ii) upon the exercise of Options issued in the future under the Company’s 2002
      Stock Option Plan or other security-based compensation arrangements, (iii)
      upon
      the exercise of the Warrants, (iv) to banks, equipment lessors or other
      financial institutions, or to real property lessors, pursuant to a debt
      financing, equipment leasing or real property leasing transaction, (v) pursuant
      to the acquisition of another corporation by the Company by merger, purchase
      of
      substantially all of the assets or other reorganization or pursuant to a joint
      venture agreement, and (vi) in connection with marketing or similar agreements
      or strategic partnerships (including, without limitation, by way of a private
      placement to strategic investors and/or entities (whatever the legal form)
      in
      which, or of which, one or more members of the Company’s management owns or
      controls an equity stake of 10% or greater).

     

         
      ARTICLE V  

    CONDITIONS

     

    5.1  Conditions
      Precedent to the Obligations of the Investors.
      The
      obligation of each Investor to acquire Securities at the Closing is subject
      to
      the satisfaction or waiver by such Investor, at or before the Closing, of each
      of the following conditions:

     

    (a)  Representations
      and Warranties.
      The
      representations and warranties of the Company contained herein shall be true
      and
      correct in all material respects as of the date when made and as of the Closing
      as though made on and as of such date; and

     

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

     

    5.2  Conditions
      Precedent to the Obligations of the Company.
      The
      obligation of the Company to sell the Securities at the Closing is subject
      to
      the satisfaction or waiver by the Company, at or before the Closing, of each
      of
      the following conditions:

     

    (a)  Representations
      and Warranties.
      The
      representations and warranties of the Investors contained herein shall be true
      and correct in all material respects as of the date when made and as of the
      Closing Date as though made on and as of such date; and

     

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

     

      
      ARTICLE VI  

    REGISTRATION
      RIGHTS

     

    6.1  Registration
      Statement.

     

    (a)  As
      promptly as possible, and in any event on or prior to the Filing Date, the
      Company shall prepare and file with the SEC a Registration Statement covering
      the resale of all Registrable Securities for an offering to be made on a
      continuous basis pursuant to Rule 415. The Registration Statement shall be
      on
      Form S-3 (except if the Company is not then eligible to register for resale
      the
      Registrable Securities on Form S-3, in which case such registration shall be
      on
      another appropriate form in accordance with the Securities Act and the Exchange
      Act) and shall contain (except if otherwise directed by the Investors or
      requested by the SEC) the “Plan of Distribution” in substantially the form
      attached hereto as Exhibit D.

     

    (b)  The
      Company shall use its commercially reasonable efforts to cause the Registration
      Statement to be declared effective by the SEC as promptly as possible after
      the
      filing thereof, but in any event prior to the Required 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
      that all Common Shares and Warrant Shares covered by such Registration Statement
      have been sold or can be sold publicly under Rule 144(k) (the “Effectiveness
      Period”);
      provided that, upon notification by the SEC that a Registration Statement will
      not be reviewed or is no longer subject to further review and comments, the
      Company shall request acceleration of such Registration Statement within
      five (5) Trading Days after receipt of such notice and request that it
      becomes effective at 4:00 p.m. New York City time on the Effective
      Date.

     

    (c)  The
      Company shall notify the Investors in writing promptly (and in any event within
      two Trading Days) after receiving notification from the SEC that the
      Registration Statement has been declared effective.

     

    (d)  Should
      an
      Event (as defined below) occur, then upon the occurrence of such Event, and
      on
      every monthly anniversary thereof until the applicable Event is cured, the
      Company shall pay to each Investor an amount in cash, as liquidated damages
      and
      not as a penalty, equal to one and one half percent (1.5%) of (i) the number
      of
      Common Shares held by such Investor as of the date of such Event, multiplied
      by
      (ii) the purchase price paid by such Investor for such Common Shares then held;
      provided, however, that the total amount of payments pursuant to this
Section 6.1(d)
      shall
      not exceed, when aggregated with all such payments paid to all Investors, twelve
      percent (12%) of the aggregate purchase price of the Securities purchased
      pursuant to this Agreement. The payments to which an Investor shall be entitled
      pursuant to this Section 6.1(d)
      are
      referred to herein as “Event
      Payments.”
Any
      Event Payments payable pursuant to the terms hereof shall apply on a pro rated
      basis for any portion of a month prior to the cure of an Event. In the event
      the
      Company fails to make Event Payments in a timely manner, such Event Payments
      shall bear interest at the rate of one percent (1.0%) per month (prorated for
      partial months) until paid in full. All pro rated calculations made pursuant
      to
      this paragraph shall be based upon the actual number of days in such pro rated
      month. 

     

    For
      such
      purposes, each of the following shall constitute an “Event”:

     

    (i)  the
      Registration Statement is not filed on or prior to the Filing Date or is not
      declared effective on or prior to the Required Effectiveness Date; 

     

    (ii)  except
      as
      provided for in Section
      6.1(e)
      (the
“Excluded
      Events”),
      after
      the Effective Date, an Investor is not permitted to sell Registrable Securities
      under the Registration Statement (or a subsequent Registration Statement filed
      in replacement thereof) for any reason (other than the fault of such Investor)
      for five or more Trading Days (whether or not consecutive);

     

    (iii)  except
      as
      a result of the Excluded Events, the Common Stock is not listed or quoted,
      or is
      suspended from trading, on an Eligible Market for a period of three Trading
      Days
      (which need not be consecutive Trading Days) during the Effectiveness
      Period;

     

    (iv)  with
      respect to an Investor, the Company fails for any reason to deliver a
      certificate evidencing any Securities to such Investor within five Trading
      Days
      after delivery of such certificate is required pursuant to any Transaction
      Document or the exercise rights of the Investors pursuant to the Warrants are
      otherwise suspended for any reason; or

     

    (v)  during
      the Effectiveness Period, except as a result of the Excluded Events, the Company
      fails to have any Shares listed on an Eligible Market.

     

    (e)  Notwithstanding
      anything in this Agreement to the contrary, after 60 consecutive Trading Days
      of
      continuous effectiveness of the initial Registration Statement filed and
      declared effective pursuant to this Agreement, the Company may, by written
      notice to the Investors, suspend sales under a Registration Statement after
      the
      Effective Date thereof and/or require that the Investors immediately cease
      the
      sale of shares of Common Stock pursuant thereto and/or defer the filing of
      any
      subsequent Registration Statement if the Company is engaged in a material
      merger, acquisition or sale and the Board of Directors determines in good faith,
      by appropriate resolutions, that, as a result of such activity, (A) it
      would be materially detrimental to the Company (other than as relating solely
      to
      the price of the Common Stock) to maintain a
      Registration Statement at such time or (B) it is in the best interests of
      the Company to suspend sales under such registration at such time. Upon receipt
      of such notice, each Investor shall immediately discontinue any sales of
      Registrable Securities pursuant to such registration until such Investor is
      advised in writing by the Company that the current Prospectus or amended
      Prospectus, as applicable, may be used. In no event, however, shall this right
      be exercised to suspend sales beyond the period during which (in the good faith
      determination of the Company’s Board of Directors) the failure to require such
      suspension would be materially detrimental to the Company. The Company’s rights
      under this Section
      6(e)
      may be
      exercised for a period of no more than 30 Trading Days at a time and not more
      than two times in any twelve-month period, without such suspension being
      considered as part of an Event Payment determination. Immediately after the
      end
      of any suspension period under this Section
      6(e),
      the
      Company shall take all necessary actions (including filing any required
      supplemental prospectus) to restore the effectiveness of the applicable
      Registration Statement and the ability of the Investors to publicly resell
      their
      Registrable Securities pursuant to such effective Registration
      Statement.

     

    (f)  The
      Company shall not, from the date hereof until the Effective Date of the
      Registration Statement, prepare and file with the SEC a registration statement
      relating to an offering for its own account or the account of others under
      the
      Securities Act of any of its equity securities, other
      than any registration statement relating to the Company’s employee benefit plans
      registered on Form S-8.

     

    6.2  Registration
      Procedures.
      In
      connection with the Company’s registration obligations hereunder, the Company
      shall:

     

    (a)  Not
      less
      than three Trading Days prior to the filing of a Registration Statement or
      any
      related Prospectus or any amendment or supplement thereto, furnish via email
      to
      those Investors who have supplied the Company with email addresses copies of
      all
      such documents proposed to be filed, which documents (other than any document
      that is incorporated or deemed to be incorporated by reference therein) will
      be
      subject to the review of such Investors. The Company shall reflect in each
      such
      document when so filed with the SEC such comments regarding the Investors and
      the plan of distribution as the Investors may reasonably and promptly propose
      no
      later than two Trading Days after the Investors have been so furnished with
      copies of such documents as aforesaid.

     

    (b)   (i) Subject
      to Section
      6.1(e),
      prepare
      and file with the SEC such amendments, including post-effective amendments,
      to
      each Registration Statement and the Prospectus used in connection therewith
      as
      may be necessary to keep the Registration Statement continuously effective,
      as
      to the applicable Registrable Securities for the Effectiveness Period and
      prepare and file with the SEC such additional Registration Statements in order
      to register for resale under the Securities Act all of the Registrable
      Securities; (ii) cause the related Prospectus to be amended or supplemented
      by any required Prospectus supplement, and as so supplemented or amended to
      be
      filed pursuant to Rule 424; (iii) respond as promptly as reasonably
      possible, and in any event within 12 Trading Days (except to the extent that
      the
      Company reasonably requires additional time to respond to accounting comments),
      to any comments received from the SEC with respect to the Registration Statement
      or any amendment thereto; and (iv) comply in all material respects with the
      provisions of the Securities Act and the Exchange Act with respect to the
      disposition of all Registrable Securities covered by the Registration Statement
      during the applicable period in accordance with the intended methods of
      disposition by the Investors thereof set forth in the Registration Statement
      as
      so amended or in such Prospectus as so supplemented.

     

    (c)  Notify
      the Investors as promptly as reasonably possible, and (if requested by the
      Investors, confirm such notice in writing no later than two Trading Days
      thereafter), of any of the following events: (i) the SEC notifies the
      Company whether there will be a “review” of any Registration Statement;
      (ii) the SEC comments in writing on any Registration Statement;
      (iii) any Registration Statement or any post-effective amendment is
      declared effective; (iv) the SEC or any other Federal or state governmental
      authority requests any amendment or supplement to any Registration Statement
      or
      Prospectus or requests additional information related thereto; (v) the SEC
      issues any stop order suspending the effectiveness of any Registration Statement
      or initiates any Proceedings for that purpose; (vi) the Company receives
      notice of any suspension of the qualification or exemption from qualification
      of
      any Registrable Securities for sale in any jurisdiction, or the initiation
      or
      threat of any Proceeding for such purpose; or (vii) the financial
      statements included in any Registration Statement become ineligible for
      inclusion therein or any Registration Statement or Prospectus or other document
      contains any untrue statement of a material fact or omits to state any material
      fact required to be stated therein or necessary to make the statements therein,
      in the light of the circumstances under which they were made, not
      misleading.

     

    (d)  Use
      its
      reasonable Best Efforts to avoid the issuance of or, if issued, obtain the
      withdrawal of (i) any order suspending the effectiveness of any
      Registration Statement, or (ii) any suspension of the qualification (or
      exemption from qualification) of any of the Registrable Securities for sale
      in
      any jurisdiction, as soon as possible.

     

    (e)  If
      requested by an Investor, provide such Investor, without charge, at least one
      conformed copy of each Registration Statement and each amendment thereto,
      including financial statements and schedules, and all exhibits to the extent
      requested by such Person (including those previously furnished or incorporated
      by reference) promptly after the filing of such documents with the
      SEC.

     

    (f)  Promptly
      deliver to each Investor, without charge, as many copies of the Prospectus
      or
      Prospectuses (including each form of prospectus) and each amendment or
      supplement thereto as such Persons may reasonably request. The Company hereby
      consents to the use of such Prospectus and each amendment or supplement thereto
      by each of the selling Investors in connection with the offering and sale of
      the
      Registrable Securities covered by such Prospectus and any amendment or
      supplement thereto to the extent permitted by federal and state securities
      laws
      and regulations.

     

    (g)  (i) In
      the time and manner required by each Trading Market, prepare and file with
      such
      Trading Market an additional shares listing application covering all of the
      Registrable Securities; (ii) take all steps necessary to cause such Common
      Shares to be approved for listing on each Trading Market as soon as possible
      thereafter; (iii) provide to each Investor evidence of such listing; and
      (iv) except as a result of the Excluded Events, during the Effectiveness
      Period, maintain the listing of such Common Shares on each such Trading Market
      or another Eligible Market.

     

    (h)  Prior
      to
      any public offering of Registrable Securities, use its reasonable Best Efforts
      to register or qualify or cooperate with the selling Investors in connection
      with the registration or qualification (or exemption from such registration
      or
      qualification) of such Registrable Securities for offer and sale under the
      securities or Blue Sky laws of such jurisdictions within the United States
      as
      any Investor requests in writing, to keep each such registration or
      qualification (or exemption therefrom) effective for so long as required, but
      not to exceed the duration of the Effectiveness Period, and to do any and all
      other acts or things reasonably necessary or advisable to enable the disposition
      in such jurisdictions of the Registrable Securities covered by a Registration
      Statement; provided,
      however,
      that
      the Company shall not be obligated to file any general consent to service of
      process or to qualify as a foreign corporation or as a dealer in securities
      in
      any jurisdiction in which it is not so qualified or to subject itself to
      taxation in respect of doing business in any jurisdiction in which it is not
      otherwise so subject.

     

    (i)  Cooperate
      with the Investors to facilitate the timely preparation and delivery of
      certificates representing Registrable Securities to be delivered to a transferee
      pursuant to a Registration Statement, which certificates shall be free, to
      the
      extent permitted by this Agreement and under law, of all restrictive legends,
      and to enable such certificates to be in such denominations and registered
      in
      such names as any such Investors may reasonably request.

     

    (j)  Upon
      the
      occurrence of any event described in Section
      6.2(c)(vii),
      as
      promptly as reasonably possible, prepare a supplement or amendment, including
      a
      post-effective amendment, to the Registration Statement or a supplement to
      the
      related Prospectus or any document incorporated or deemed to be incorporated
      therein by reference, and file any other required document so that, as
      thereafter delivered, neither the Registration Statement nor such Prospectus
      will contain an untrue statement of a material fact or omit to state a material
      fact required to be stated therein or necessary to make the statements therein,
      in the light of the circumstances under which they were made, not
      misleading.

     

    (k)  Cooperate
      with any reasonable due diligence investigation undertaken by the Investors
      in
      connection with the sale of Registrable Securities, including, without
      limitation, by making available documents and information; provided that the
      Company will not deliver or make available to any Investor material, nonpublic
      information unless such Investor requests in advance in writing to receive
      material, nonpublic information and agrees to keep such information
      confidential.

     

    (l)  Comply
      with all rules and regulations of the SEC applicable to the registration of
      the
      Securities.

     

    (m)  It
      shall
      be a condition precedent to the obligations of the Company to complete the
      registration pursuant to this Agreement with respect to the Registrable
      Securities of any particular Investor or to make any Event Payments set forth
      in
Section
      6.1(d)
      to such
      Investor that such Investor furnish to the Company the information specified
      in
Exhibits
      B-1,
      B-2
      and
B-3
      hereto
      and such other information regarding itself, the Registrable Securities and
      other shares of Common Stock held by it and the intended method of disposition
      of the Registrable Securities held by it (if different from the Plan of
      Distribution set forth on Exhibit D
      hereto)
      as shall be reasonably required to effect the registration of such Registrable
      Securities and shall complete and execute such documents in connection with
      such
      registration as the Company may reasonably request.

     

    (n)  The
      Company shall comply with all applicable rules and regulations of the SEC under
      the Securities Act and the Exchange Act, including, without limitation, Rule
      172
      under the Securities Act, file any final Prospectus, including any supplement
      or
      amendment thereof, with the SEC pursuant to Rule 424 under the Securities Act,
      promptly inform the Investors in writing if, at any time during the
      Effectiveness Period, the Company does not satisfy the conditions specified
      in
      Rule 172 and, as a result thereof, the Investors are required to make available
      a Prospectus in connection with any disposition of Registrable Securities and
      take such other actions as may be reasonably necessary to facilitate the
      registration of the Registrable Securities hereunder.

     

    6.3  Registration
      Expenses.
      The
      Company shall pay all fees and expenses incident to the performance of or
      compliance with Article VI of this Agreement by the Company, including
      without limitation (a) all registration and filing fees and expenses,
      including without limitation those related to filings with the SEC, any Trading
      Market and in connection with applicable state securities or Blue Sky laws,
      (b) printing expenses (including, without limitation, expenses of printing
      certificates for Registrable Securities), (c) messenger, telephone and
      delivery expenses, (d) fees and disbursements of counsel for the Company,
      (e) fees and expenses of all other Persons retained by the Company in
      connection with the consummation of the transactions contemplated by this
      Agreement, and (f) all listing fees to be paid by the Company to the
      Trading Market.

     

    6.4  Indemnification

     

    (a)  Indemnification
      by the Company.
      The
      Company shall, notwithstanding any termination of this Agreement, indemnify
      and
      hold harmless each Investor, the officers, directors, partners, members, agents
      and employees of each of them, each Person who controls any such Investor
      (within the meaning of Section 15 of the Securities Act or Section 20
      of the Exchange Act) and the officers, directors, partners, members, agents
      and
      employees of each such controlling Person, to the fullest extent permitted
      by
      applicable law, from and against any and all Losses (as determined by a court
      of
      competent jurisdiction in a final judgment not subject to appeal or review)
      arising out of or relating to (i) any misrepresentation or breach of any
      representation or warranty made by the Company in the Transaction Documents
      or
      any other certificate, instrument or document contemplated hereby or thereby,
      (ii) any breach of any covenant, agreement or obligation of the Company
      contained in the Transaction Documents or any other certificate, instrument
      or
      document contemplated hereby or thereby, (iii) any cause of action, suit or
      claim brought or made against such Indemnified Party (as defined in Section 6.4(c)
      below)
      by a third party (including for these purposes a derivative action brought
      on
      behalf of the Company), arising out of or resulting from (x) the execution,
      delivery, performance or enforcement of the Transaction Documents or any other
      certificate, instrument or document contemplated hereby or thereby, (y) any
      transaction financed or to be financed in whole or in part, directly or
      indirectly, with the proceeds of the issuance of the Securities, or (z) the
      status of Indemnified Party as holder of the Securities or (iv) any untrue
      or
      alleged untrue statement of a material fact contained in the Registration
      Statement, any Prospectus or any form of Company prospectus or in any amendment
      or supplement thereto or in any Company preliminary prospectus, or arising
      out
      of or relating to any omission or alleged omission of a material fact required
      to be stated therein or necessary to make the statements therein (in the case
      of
      any Prospectus or form of prospectus or supplement thereto, in the light of
      the
      circumstances under which they were made) not misleading, except to the extent,
      but only to the extent, that (A) such untrue statements, alleged untrue
      statements, omissions or alleged omissions are based solely upon information
      regarding such Investor furnished in writing to the Company by such Investor
      for
      use therein, or to the extent that such information relates to such Investor
      or
      such Investor’s proposed method of distribution of Registrable Securities and
      was reviewed and expressly approved by such Investor expressly for use in the
      Registration Statement, or (B) with respect to any prospectus, if the untrue
      statement or omission of material fact contained in such prospectus was
      corrected on a timely basis in the prospectus, as then amended or supplemented,
      if such corrected prospectus was timely made available by the Company to the
      Investor, and the Investor seeking indemnity hereunder was advised in writing
      not to use the incorrect prospectus prior to the use giving rise to Losses.
       

     

    (b)  Indemnification
      by Investors.
      Each
      Investor shall, severally and not jointly, indemnify and hold harmless the
      Company, its directors, officers, agents and employees, each Person who controls
      the Company (within the meaning of Section 15 of the Securities Act and
      Section 20 of the Exchange Act), and the directors, officers, agents or
      employees of such controlling Persons, to the fullest extent permitted by
      applicable law, from and against all Losses (as determined by a court of
      competent jurisdiction in a final judgment not subject to appeal or review)
      arising solely out of any untrue statement of a material fact contained in
      the
      Registration Statement, any Prospectus, or any form of prospectus, or in any
      amendment or supplement thereto, or arising out of or relating to any omission
      of a material fact required to be stated therein or necessary to make the
      statements therein (in the case of any Prospectus or form of prospectus or
      supplement thereto, in the light of the circumstances under which they were
      made) not misleading, but only to the extent that such untrue statement or
      omission is contained in any information so furnished by such Investor in
      writing to the Company specifically for inclusion in such Registration Statement
      or such Prospectus or to the extent that (i) such untrue statements or
      omissions are based solely upon information regarding such Investor furnished
      to
      the Company by such Investor in writing expressly for use therein, or to the
      extent that such information relates to such Investor or such Investor’s
      proposed method of distribution of Registrable Securities and was reviewed
      and
      expressly approved by such Investor expressly for use in the Registration
      Statement (it being understood that the information provided by the Investor
      to
      the Company in Exhibits
      B-1,
      B-2
      and
B-3
      and the
      Plan of Distribution set forth on Exhibit D,
      as the
      same may be modified by such Investor and other information provided by the
      Investor to the Company in or pursuant to the Transaction Documents constitutes
      information reviewed and expressly approved by such Investor in writing
      expressly for use in the Registration Statement), such Prospectus or such form
      of prospectus or in any amendment or supplement thereto. In no event shall
      the
      liability of any selling Investor hereunder be greater in amount than the dollar
      amount of the net proceeds received by such Investor upon the sale of the
      Registrable Securities giving rise to such indemnification
      obligation.

     

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

     

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

     

    All
      reasonable fees and expenses of the Indemnified Party (including reasonable
      fees
      and expenses to the extent incurred in connection with investigating or
      preparing to defend such Proceeding in a manner not inconsistent with this
      Section) shall be paid to the Indemnified Party, as incurred, within 20 Trading
      Days of written notice thereof to the Indemnifying Party (regardless of whether
      it is ultimately determined that an Indemnified Party is not entitled to
      indemnification hereunder; provided, that the Indemnifying Party may require
      such Indemnified Party to undertake to reimburse all such fees and expenses
      to
      the extent it is finally judicially determined that such Indemnified Party
      is
      not entitled to indemnification hereunder). 

     

    (d)  Contribution.
      If a
      claim for indemnification under Section
      6.4(a)
      or  (b)
      is
      unavailable to an Indemnified Party (by reason of public policy or otherwise),
      then each Indemnifying Party, in lieu of indemnifying such Indemnified Party,
      shall contribute to the amount paid or payable by such Indemnified Party as
      a
      result of such Losses, in such proportion as is appropriate to reflect the
      relative fault of the Indemnifying Party and Indemnified Party in connection
      with the actions, statements or omissions that resulted in such Losses as well
      as any other relevant equitable considerations. The relative fault of such
      Indemnifying Party and Indemnified Party shall be determined by reference to,
      among other things, whether any action in question, including any untrue or
      alleged untrue statement of a material fact or omission or alleged omission
      of a
      material fact, has been taken or made by, or relates to information supplied
      by,
      such Indemnifying Party or Indemnified Party, and the parties’ relative intent,
      knowledge, access to information and opportunity to correct or prevent such
      action, statement or omission. The amount paid or payable by a party as a result
      of any Losses shall be deemed to include, subject to the limitations set forth
      in Section
      6.4(c),
      any
      reasonable attorneys’ or other reasonable fees or expenses incurred by such
      party in connection with any Proceeding to the extent such party would have
      been
      indemnified for such fees or expenses if the indemnification provided for in
      this Section was
      available to such party in accordance with its terms.

     

    The
      parties hereto agree that it would not be just and equitable if contribution
      pursuant to this Section
      6.4(d)
      were
      determined by pro rata allocation or by any other method of allocation that
      does
      not take into account the equitable considerations referred to in the
      immediately preceding paragraph. Notwithstanding the provisions of this
Section
      6.4(d),
      no
      Investor shall be required to contribute, in the aggregate, any amount in excess
      of the amount by which the proceeds actually received by such Investor from
      the
      sale of the Registrable Securities subject to the Proceeding exceed the amount
      of any damages that such Investor has otherwise been required to pay by reason
      of such untrue or alleged untrue statement or omission or alleged omission.
      No
      Person guilty of fraudulent misrepresentation (within the meaning of
Section
      11(f) of
      the Securities Act) shall be entitled to contribution from any Person who was
      not guilty of such fraudulent misrepresentation.

     

    The
      indemnity and contribution agreements contained in this Section
 are
      in
      addition to any liability that the Indemnifying Parties may have to the
      Indemnified Parties.

     

    6.5  Dispositions.
      Each
      Investor agrees that it will comply with the prospectus delivery requirements
      of
      the Securities Act as applicable to it in connection with sales of Registrable
      Securities pursuant to the Registration Statement and shall sell its Registrable
      Securities in accordance with the Plan of Distribution set forth in the
      Prospectus. Each Investor further agrees that, upon receipt of a notice from
      the
      Company of the occurrence of any event of the kind described in Sections
      6.2(c)(v),
      (vi)
      or
(vii),
      such
      Investor will discontinue disposition of such Registrable Securities under
      the
      Registration Statement until such Investor is advised in writing by the Company
      that the use of the Prospectus, or amended Prospectus, as applicable, may be
      resumed. The Company may provide appropriate stop orders to enforce the
      provisions of this paragraph.

     

    6.6  No
      Piggyback on Registrations.
      Neither
      the Company nor any of its security holders (other than the Investors in such
      capacity pursuant hereto and the Excluded Investors) may include securities
      of
      the Company in the Registration Statement other than the Registrable
      Securities.

     

    6.7  Piggy-Back
      Registrations.
      If at
      any time during the Effectiveness Period there is not an effective Registration
      Statement covering all of the Registrable Securities and the Company shall
      determine to prepare and file with the SEC a registration statement relating
      to
      an offering for its own account or the account of others under the Securities
      Act of any of its equity securities, other than on Form S-4 or Form S-8 (each
      as
      promulgated under the Securities Act) or their then equivalents, relating to
      equity securities to be issued solely in connection with any acquisition of
      any
      entity or business or equity securities issuable in connection with stock option
      or other employee benefit plans, then the Company shall send to each Investor
      not then eligible to sell all of their Registrable Securities under Rule 144
      in
      a three-month period, written notice of such determination and if, within ten
      days after receipt of such notice, any such Investor shall so request in
      writing, the Company shall include in such registration statement all or any
      part of such Registrable Securities such Investor requests to be registered.
       Notwithstanding
      the foregoing, in the event that, in connection with any underwritten public
      offering, the managing underwriter(s) thereof shall impose a limitation on
      the
      number of shares of Common Stock which may be included in the Registration
      Statement because, in such underwriter(s)’ judgment, marketing or other factors
      dictate such limitation is necessary to facilitate public distribution, then
      the
      Company shall be obligated to include in such Registration Statement only such
      limited portion of the Registrable Securities with respect to which such
      Investor has requested inclusion hereunder as the underwriter shall permit;
      provided,
      however,
      that
      (i) the Company shall not exclude any Registrable Securities unless the Company
      has first excluded all outstanding securities, the holders of which are not
      contractually entitled to inclusion of such securities in such Registration
      Statement or are not contractually entitled to pro rata inclusion with the
      Registrable Securities and (ii) after giving effect to the immediately preceding
      proviso, any such exclusion of Registrable Securities shall be made pro rata
      among the Investors seeking to include Registrable Securities and the holders
      of
      other securities having the contractual right to inclusion of their securities
      in such Registration Statement by reason of demand registration rights, in
      proportion to the number of Registrable Securities or other securities, as
      applicable, sought to be included by each such Investor or other holder. If
      an
      offering in connection with which an Investor is entitled to registration under
      this Section
      6.7
      is an
      underwritten offering, then each Investor whose Registrable Securities are
      included in such Registration Statement shall, unless otherwise agreed by the
      Company, offer and sell such Registrable Securities in an underwritten offering
      using the same underwriter or underwriters and, subject to the provisions of
      this Agreement, on the same terms and conditions as other shares of Common
      Stock
      included in such underwritten offering and
      shall
      enter into an underwriting agreement in a form and substance reasonably
      satisfactory to the Company and the underwriter or underwriters. Upon the
      effectiveness of the registration statement for which piggy-back registration
      has been provided in this Section
      6.7,
      any
      Event Payments payable to an Investor whose Securities are included in such
      registration statement shall terminate and no longer be payable.

     

        
      ARTICLE VII  

    MISCELLANEOUS

     

    7.1  Termination.
      This
      Agreement may be terminated by the Company or any Investor, by written notice
      to
      the other parties, if the Closing has not been consummated by the third Business
      Day following the date of this Agreement; provided that no such termination
      will
      affect the right of any party to sue for any breach by the other party (or
      parties).

     

    7.2  Fees
      and Expenses.
      Except
      as expressly set forth in the Transaction Documents to the contrary, each party
      shall pay the fees and expenses of its advisers, counsel, accountants and other
      experts, if any, and all other expenses incurred by such party incident to
      the
      negotiation, preparation, execution, delivery and performance of this Agreement.
      The Company shall pay all Transfer Agent fees, stamp taxes and other taxes
      and
      duties levied in connection with the sale and issuance of the applicable
      Securities.

     

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

     

    7.4  Notices.
      Any and
      all notices or other communications or deliveries required or permitted to
      be
      provided hereunder shall be in writing and shall be deemed given and effective
      on the earliest of (a) the date of transmission, if such notice or
      communication is delivered via facsimile or email at the facsimile number or
      email address specified in this Section  prior
      to
      6:30 p.m. (New York City time) on a Trading Day, (b) the next Trading Day
      after the date of transmission, if such notice or communication is delivered
      via
      facsimile or email at the facsimile number or email address 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, (c) the Trading Day following the date of
      deposit with a nationally recognized overnight courier service, or (d) upon
      actual receipt by the party to whom such notice is required to be given. The
      addresses, facsimile numbers and email addresses for such notices and
      communications are those set forth on the signature pages hereof, or such other
      address or facsimile number as may be designated in writing hereafter, in the
      same manner, by any such Person.

     

    7.5  Amendments;
      Waivers.
      No
      provision of this Agreement may be waived or amended except in a written
      instrument signed, in the case of an amendment, by the Company and each of
      the
      Investors or, in the case of a waiver, by the party against whom enforcement
      of
      any such waiver is sought. No waiver of any default with respect to any
      provision, condition or requirement of this Agreement shall be deemed to be
      a
      continuing waiver in the future or a waiver of any subsequent default or a
      waiver of any other provision, condition or requirement hereof, nor shall any
      delay or omission of any party to exercise any right hereunder in any manner
      impair the exercise of any such right. Notwithstanding the foregoing, a waiver
      or consent to depart from the provisions hereof with respect to a matter that
      relates exclusively to the rights of Investors under Article VI
      may be
      given by Investors holding at least a majority of the Registrable Securities
      to
      which such waiver or consent relates.

     

    7.6  Construction.
      The
      headings herein are for convenience only, do not constitute a part of this
      Agreement and shall not be deemed to limit or affect any of the provisions
      hereof. The language used in this Agreement will be deemed to be the language
      chosen by the parties to express their mutual intent, and no rules of strict
      construction will be applied against any party.

     

    7.7  Successors
      and Assigns.
      This
      Agreement shall be binding upon and inure to the benefit of the parties and
      their respective successors and permitted assigns. The Company may not assign
      this Agreement or any rights or obligations hereunder without the prior written
      consent of the Investors. Any Investor may assign its rights under this
      Agreement to any Person to whom such Investor assigns or transfers any
      Securities, provided (i)
      such
      transferor agrees in writing with the transferee or assignee to assign such
      rights, and a copy of such agreement is furnished to the Company after such
      assignment, (ii) the Company is furnished with written notice of (x) the name
      and address of such transferee or assignee and (y) the Registrable Securities
      with respect to which such registration rights are being transferred or
      assigned, (iii) following such transfer or assignment, the further disposition
      of such securities by the transferee or assignee is restricted under the
      Securities Act and applicable state securities laws and applicable provincial
      securities laws of Canada, (iv) such
      transferee agrees in writing to be bound, with respect to the transferred
      Securities, by the provisions hereof that apply to the “Investors”, (v)
      such
      transfer shall have been made in accordance with the applicable requirements
      of
      this Agreement and with all laws applicable thereto and (vi) in the case of
      an
      assignment of registration rights pursuant to Article
      VI,
      such
      transferee or assignee acquires at least 100,000 shares of Common Stock
      (including Warrants exercisable for such shares).

     

    7.8  No
      Third-Party Beneficiaries.
      This
      Agreement is intended for the benefit of the parties hereto and their respective
      successors and permitted assigns and is not for the benefit of, nor may any
      provision hereof be enforced by, any other Person, except that each Indemnified
      Party is an intended third party beneficiary of Section 6.4
      and (in
      each case) may enforce the provisions of such Section directly against the
      parties with obligations thereunder.

     

    7.9  Governing
      Law; Venue; Waiver of Jury Trial.
      THE
      CORPORATE LAWS OF THE STATE OF DELAWARE
      SHALL
      GOVERN ALL ISSUES CONCERNING THE RELATIVE RIGHTS OF THE COMPANY AND ITS
      STOCKHOLDERS. ALL QUESTIONS CONCERNING THE CONSTRUCTION, VALIDITY, ENFORCEMENT
      AND INTERPRETATION OF THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
      ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. THE COMPANY AND INVESTORS
      HEREBY IRREVOCABLY SUBMIT TO THE NON-EXCLUSIVE JURISDICTION OF THE STATE AND
      FEDERAL COURTS SITTING IN THE CITY OF NEW YORK, BOROUGH OF MANHATTAN FOR THE
      ADJUDICATION OF ANY DISPUTE BROUGHT BY THE COMPANY OR ANY INVESTOR HEREUNDER,
      IN
      CONNECTION HEREWITH OR WITH ANY TRANSACTION CONTEMPLATED HEREBY OR DISCUSSED
      HEREIN (INCLUDING WITH RESPECT TO THE ENFORCEMENT OF ANY OF THE TRANSACTION
      DOCUMENTS), AND HEREBY IRREVOCABLY WAIVE, AND AGREE NOT TO ASSERT IN ANY SUIT,
      ACTION OR PROCEEDING BROUGHT BY THE COMPANY OR ANY INVESTOR, ANY CLAIM THAT
      IT
      IS NOT PERSONALLY SUBJECT TO THE JURISDICTION OF ANY SUCH COURT, OR THAT SUCH
      SUIT, ACTION OR PROCEEDING IS IMPROPER. EACH PARTY HEREBY IRREVOCABLY WAIVES
      PERSONAL SERVICE OF PROCESS AND CONSENTS TO PROCESS BEING SERVED IN ANY SUCH
      SUIT, ACTION OR PROCEEDING BY MAILING A COPY THEREOF VIA REGISTERED OR CERTIFIED
      MAIL OR OVERNIGHT DELIVERY (WITH EVIDENCE OF DELIVERY) TO SUCH PARTY AT THE
      ADDRESS IN EFFECT FOR NOTICES TO IT UNDER THIS AGREEMENT AND AGREES THAT SUCH
      SERVICE SHALL CONSTITUTE GOOD AND SUFFICIENT SERVICE OF PROCESS AND NOTICE
      THEREOF. NOTHING CONTAINED HEREIN SHALL BE DEEMED TO LIMIT IN ANY WAY ANY RIGHT
      TO SERVE PROCESS IN ANY MANNER PERMITTED BY LAW. THE COMPANY AND INVESTORS
      HEREBY WAIVE ALL RIGHTS TO A TRIAL BY JURY.

     

    7.10  Survival.
      The
      representations and warranties, agreements and covenants contained herein shall
      survive the Closing.

     

    7.11  Execution.
      This
      Agreement may be executed in two or more counterparts, all of which when taken
      together shall be considered one and the same agreement and shall become
      effective when counterparts have been signed by each party and delivered to
      the
      other party, it being understood that both parties need not sign the same
      counterpart. In the event that any signature is delivered by facsimile
      transmission or email attachment, such signature shall create a valid and
      binding obligation of the party executing (or on whose behalf such signature
      is
      executed) with the same force and effect as if such facsimile or email-attached
      signature page were an original thereof.

     

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

     

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

     

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

     

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

     

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

     

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

     

    7.18  Independent
      Nature of Investors’ Obligations and Rights.
      The
      obligations of each Investor under any Transaction Document 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 any Transaction Document. 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 or in any
      Transaction Document, 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 the Transaction Documents.
      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 or out of the other Transaction Documents, and it shall
      not be necessary for any other Investor to be joined as an additional party
      in
      any Proceeding for such purpose.

    [SIGNATURE
      PAGES TO FOLLOW]

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

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

     

                    OCCULOGIX,
      INC.

     

    

     

                    By:
      /s/ Elias
      Vamvakas

                                                         
      ________________________________ 

                    Name:
      Elias
      Vamvakas

                    Title:
      Chairman &
CEO

     

                    Address
      for
      Notice:

     

                    2600
      Skymark
      Avenue

                    Building
      9, Suite
      201

                    Mississauga,
      Ontario

                    L4W
      5B2
      Canada

     

                    Facsimile
      No.: (905)
      602-7623

                                                   
      Telephone
      No.: (866) 622-8564

                    Attn:
      Elias
      Vamvakas

                    and

                    Suh
      Kim,
      Esq.

     

                    With
      a copy
      to:                  
 Torys
      LLP

                    237
      Park
      Avenue

                    New
      York, New York
      10017

    

                    Facsimile:                             
      (212)
      682-0200

                    Telephone:                           (212)
      880-6000

                    Attn:                                     
      Andrew
      J.
      Beck, Esq.

    

    

    

    

    

    

    

    

    

    

     

    

    
      
        
        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
        

      

    

     

    Investor
      Signature Page

     

    By
      its
      execution and delivery of this signature page, the undersigned Investor hereby
      joins in and agrees to be bound by the terms and conditions of the Securities
      Purchase Agreement dated as of __________, 2007 (the “Purchase Agreement”) by
      and among OccuLogix,
      Inc.
      and the
      Investors (as defined therein), as to the number of shares of Common Stock
      and
      Warrants set forth below, and authorizes this signature page to be attached
      to
      the Purchase Agreement or counterparts thereof.

     

                    Name
      of
      Investor:

     

                                                    __________________________________________

     

    

     

                    By:
      _____________________________________________ 

                
       Name:

                         
      Title:

     

    

                    Address: _________________________________________

     

                                                    __________________________________________

            

                                                    __________________________________________

     

                    Telephone
      No.:
      ____________________________________ 

     

                    Facsimile
      No.:
      _____________________________________ 

     

                    Email
      Address:
      ____________________________________

     

                    Number
      of Shares:
      __________________________________  

     

                    Number
      of Warrants:
      _ ______________________________    

     

                    Aggregate
      Purchase
      Price: $___________________________ 

     

     

    

     

    

     

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

     

    Exhibits:

     

    A Schedule
      of Investors

    B Instruction
      Sheet for Investors

    C Opinion
      of Company Corporate Counsel

    D Plan
      of
      Distribution

    E Company
      Transfer Agent Instructions

    F Form
      of
      Warrant

    

     

    

     

    

    
      
        
        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
        

      

    

     

    Exhibit A

     

    Schedule
      of Investors

    

    
      	
              Investor

            	
              Common
                Shares

            	
              Warrants

            	
              Warrant
                Shares

            	
              Purchase
                Price

            
	
              Cranshire
                Capital, LP

            	
              335,000

            	
              134,000

            	
              134,000

            	
              $502,500.00

            
	
              Enable
                Growth Partners LP

            	
              1,134,750

            	
              453,900

            	
              453,900

            	
              $1,702,125.00

            
	
              Enable
                Opportunity Partners LP

            	
              133,500

            	
              53,400

            	
              53,400

            	
              $200,250.00

            
	
              Pierce
                Diversified Strategy Master Fund LLC, Ena

            	
              66,750

            	
              26,700

            	
              26,700

            	
              $100,125.00

            
	
              Evolution
                Master Fund Ltd. SPC, Segregated Portfolio M

            	
              1,133,333

            	
              453,333

            	
              453,333

            	
              $1,699,999.50

            
	
              Capital
                Ventures International

            	
              1,335,000

            	
              534,000

            	
              534,000

            	
              $2,002,500.00

            
	
              Hudson
                Bay Fund LP

            	
              251,450

            	
              100,580

            	
              100,580

            	
              $377,175.00

            
	
              Hudson
                Bay Overseas Funds Ltd.

            	
              283,550

            	
              113,420

            	
              113,420

            	
              $425,325.00

            
	
              RHP
                Master Fund, Ltd.

            	
              335,000

            	
              134,000

            	
              134,000

            	
              $502,500.00

            
	
              Rockmore
                Investment Master Fund Ltd.

            	
              335,000

            	
              134,000

            	
              134,000

            	
              $502,500.00

            
	
              Sherleigh
                Associates Inc., Profit Sharing Plan

            	
              1,000,000

            	
              400,000

            	
              400,000

            	
              $1,500,000

            
	
              UBS
                O’Connor LLC fbo O’Connor PIPEs Corporate Strategies Master
                Limited

            	
              334,000

            	
              133,600

            	
              133,600

            	
              $501,000.00

            
	
              TOTAL

            	
              6,677,333

            	
              2,670,933

            	
              2,670,933

            	
              $10,015,999.50

            

    

     

    

    
      
        
        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
        

      

    

     

    Exhibit B

     

    INSTRUCTION
      SHEET FOR INVESTOR

     

    (to
      be
      read in conjunction with the entire Securities Purchase Agreement)

     

    
      	A.  	
              Complete
                the following items in the Securities Purchase Agreement:

            

    

     

    
      	1.  	
              Complete
                and execute the Investor Signature Page. The Agreement must be executed
                by
                an individual authorized to bind the
                Investor.

            

    

     

    
      	2.  	
              Exhibit B-1
                - Stock Certificate Questionnaire:

            

    

     

    Provide
      the information requested by the Stock Certificate Questionnaire.
      

     

    
      	3.  	
              Exhibit B-2
                - Registration Statement
                Questionnaire:

            

    

     

    Provide
      the information requested by the Registration Statement
      Questionnaire.
      

     

    
      	4.  	
              Exhibit B-3
                - Investor Certificate:

            

    

     

    Provide
      the information requested by the Investor Certificate.

     

    
      	5.  	
              Return,
                via facsimile, the signed Securities Purchase Agreement including
                the
                properly completed Exhibits B-1 through B-3,
                to:

            

    

    Facsimile:
      

    Telephone:
      

    Attn:

    

    
      	6.  	
              After
                completing instruction number five (5) above, deliver the original
                signed
                Securities Purchase Agreement including the properly completed
                Exhibits B-1
                through B-3 to:

            

    

    

    Address:
      

    Attn:

     

    
      	B.  	
              Instructions
                regarding the wire transfer of funds for the purchase of the Securities
                will be telecopied to the Investor by the Company at a later
                date.

            

    

     

     

    

    
      
        
        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
        

      

    

     

    Exhibit B-1

     

    OCCULOGIX,
      INC.

     

    STOCK
      CERTIFICATE QUESTIONNAIRE

     

    

    
      	 	
               

              Please
                provide us with the following information:

            	 
	
               

              1.

            	
               

              The
                exact name that the Securities are to be registered in 

              (this
                is the name that will appear on the stock certificate(s)). You may
                use a
                nominee name if appropriate:

            	
               

              __________________________________________

            
	
               

              2.

            	
               

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

            	
               

              __________________________________________

            
	
               

              3.

            	
               

              The
                mailing address, telephone and telecopy number and email address
                of the
                Registered Holder listed
                

              in
                response to item 1 above:

            	
               

              __________________________________________

            
	 	 	__________________________________________
	 	 	__________________________________________ 
	 	 	__________________________________________ 
	 	 	__________________________________________
	
              4.

            	
              The
                Tax Identification Number of the Registered Holder listed in response
                to
                item 1 above:

            	
              __________________________________________ 

               

            

    

     

    

    
      
        
        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
        

      

    

     

    Exhibit B-2

     

    OCCULOGIX,
      INC.

     

    REGISTRATION
      STATEMENT QUESTIONNAIRE

    

     

    In
      connection with the Registration Statement, please provide us with the following
      information regarding the Investor.

     

    1. Please
      state your organization’s name exactly as it should appear in the Registration
      Statement: 

     

        ______________________________________________________________________

     

    

        Except
      as set
      forth below, your organization does not hold any equity securities of the
 Company
      on behalf of another person or entity. 

     

        State
      any
      exceptions here:

     

     

        ______________________________________________________________________

    

     

    2. Address
      of your organization:

     

    ______________________________________________________

     

    ______________________________________________________

     

    Telephone:
      __________________________

     

    Fax:
      ________________________________

     

    Contact
      Person: _______________________

     

    3. Have
      you
      or your organization had any position, office or other material relationship
      within the past three years with the Company or its affiliates?
      (Include
      any relationships involving you or any of your affiliates, officers, directors,
      or principal equity holders (5% or more) that has held any position or office
      or
      has had any other material relationship with the Company (or its predecessors
      or
      affiliates) during the past three years.)

     

     

    _______
       Yes   _______
       No

     

    If
      yes,
      please indicate the nature of any such relationship below:

    

     

    4. Are
      you
      the beneficial owner of any other securities of the Company?
      (Include
      any equity securities that you beneficially own or have a right to acquire
      within 60 days after the date hereof, and as to which you have sole voting
      power, shared voting power, sole investment power or shared investment
      power.)

     

                     _______
       Yes   _______
       No

     

    If
      yes,
      please describe the nature and amount of such ownership
      as of a
      recent date.

     

     

     

    5. Except
      as
      set forth below, you wish that all the shares of the Company’s common stock
      beneficially owned by you or that you have the right to acquire from the Company
      be offered for your account in the Registration Statement.

     

    State
      any
      exceptions here:

     

     

     

     

    6. Have
      you
      made or are you aware of any arrangements relating to the distribution of the
      shares of the Company pursuant to the Registration Statement?

     

    _______
       Yes   _______
       No

     

    If
      yes,
      please describe the nature and amount of such arrangements.

     

    

     

    

     

    

     

    7. NASD
      Matters

     

    (a) State
      below whether (i) you or any associate
      or
affiliate
      of yours
      are a member
      of the
      NASD, a controlling
      shareholder of an NASD member,
      a
person
      associated
      with a member,
      a
      direct or indirect affiliate
      of a
member,
      or an
underwriter
      or related person
      with
      respect to the proposed offering; (ii) you or any associate
      or
affiliate
      of yours
      owns any stock or other securities of any NASD member
      not
      purchased in the open market; or (iii) you or any associate
      or
affiliate
      of yours
      has made any outstanding subordinated loans to any NASD member.
      If you
      are a general or limited partnership, a no answer asserts that no such
      relationship exists for you as well as for each of your general or limited
      partners.

     

    
      	
               

              Yes:
                __________

            	
               

              No:
                __________

            

    

     

    

     

    

     

    If
“yes”,
      please identify the NASD member
      and
      describe your relationship, including, in the case of a general or limited
      partner, the name of the partner

     

    

     

    

     

    If
      you
      answer “no” to Question 7(a), you need not respond to Question 7(b).

     

    

     

    (b)  State
      below whether you or any associate
      or
affiliate
      of yours
      has been an underwriter, or a controlling
      person
      or member of any investment banking or brokerage firm which has been or might
      be
      an underwriter for securities of the Corporation or any affiliate
      thereof
      including, but not limited to, the common stock now being
      registered.

     

    

    
      	
               

              Yes:
                __________

            	
               

              No:
                __________

            

    

     

    

     

    If
“yes”,
      please identify the NASD member
      and
      describe your relationship, including, in the case of a general or limited
      partner, the name of the partner.

     

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    ACKNOWLEDGEMENT

     

    The
      undersigned hereby agrees to notify the Company promptly of any changes in
      the
      foregoing information which should be made as a result of any developments,
      including the passage of time. The undersigned also agrees to provide the
      Company and the Company’s counsel any and all such further information regarding
      the undersigned promptly upon request in connection with the preparation,
      filing, amending, and supplementing of the Registration Statement (or any
      prospectus contained therein). The undersigned hereby consents to the use of
      all
      such information in the Registration Statement.

     

    The
      undersigned understands and acknowledges that the Company will rely on the
      information set forth herein for purposes of the preparation and filing of
      the
      Registration Statement.

     

    The
      undersigned understands that the undersigned may be subject to serious civil
      and
      criminal liabilities if the Registration Statement, when it becomes effective,
      either contains an untrue statement of a material fact or omits to state a
      material fact required to be stated in the Registration Statement or necessary
      to make the statements in the Registration Statement not misleading. The
      undersigned represents and warrants that all information it provides to the
      Company and its counsel is currently accurate and complete and will be accurate
      and complete at the time the Registration Statement becomes effective and at
      all
      times subsequent thereto, and agrees during the Effectiveness Period and any
      additional period in which the undersigned is making sales of Shares under
      and
      pursuant to the Registration Statement, to notify the Company immediately of
      any
      misstatement of a material fact in the Registration Statement, and of the
      omission of any material fact necessary to make the statements contained therein
      not misleading.

     

    

     

    Dated:
      __________

                ______________________________

                Name

    

                ______________________________

                Signature

    

                ______________________________

                Name
      and Title of
      Signatory

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Exhibit B-3

     

    OCCULOGIX,
      INC.

     

    CERTIFICATE
      FOR CORPORATE, PARTNERSHIP, LIMITED LIABILITY COMPANY, 

    TRUST,
      FOUNDATION AND JOINT INVESTORS

     

    If
      the
      Investor is a corporation, partnership, limited liability company, trust,
      pension plan, foundation, joint investor (other than a married couple) or other
      entity, an authorized officer, partner, or trustee must complete, date and
      sign
      this Certificate.

     

    

     

    CERTIFICATE

     

    The
      undersigned certifies that the representations and responses below are true
      and
      accurate:

     

    (a) The
      Investor has been duly formed and is validly existing and has full power and
      authority to invest in the Company. The person signing on behalf of the
      undersigned has the authority to execute and deliver the Securities Purchase
      Agreement on behalf of the Investor and to take other actions with respect
      thereto.

     

    (b) Indicate
      the form of entity of the undersigned: 

     

    ____ Limited
      Partnership 

     

    ____ General
      Partnership 

     

    ____ Limited
      Liability Company

     

    ____ Corporation

     

    ____ Revocable
      Trust (identify each grantor and indicate under what circumstances the trust
      is
      revocable by the
      grantor):______________________________________________________________________________________________________________________________________

    (Continue
      on a separate piece of paper, if necessary.)

     

    ____ Other
      type of Trust (indicate type of trust and, for trusts other than pension trusts,
      name the grantors and
      beneficiaries):__________________________________________________________________________________________________________________________________

    (Continue
      on a separate piece of paper, if necessary.)

     

    ____ Other
      form of organization (indicate form of organization):
      ____________________________________________________________________________________________________________________________________________
      .

    .

     

    (c) Indicate
      the approximate date the undersigned entity was
      formed:  _______________________________________________________________________________
      .

     

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

     

    ___ 1. A
      bank as
      defined in Section 3(a)(2) of the Securities Act, or any savings and loan
      association or other institution as defined in Section 3(a)(5)(A) of the
      Securities Act 

                whether
      acting in its individual or fiduciary capacity;

     

    ___ 2. A
      broker
      or dealer registered pursuant to Section 15 of the Securities Exchange Act
      of 1934;

     

    ___ 3. An
      insurance company as defined in Section 2(13) of the Securities
      Act;

     

    ___ 4. An
      investment company registered under the Investment Company Act of 1940 or a
      business development company as defined in Section  2(a)(48)
      of that Act;

     

    ___ 5. A
      Small
      Business Investment Company licensed by the U.S. Small Business Administration
      under Section 301(c) or (d) of the Small Business Investment Act of
      1958;

     

    ___ 6. A
      plan
      established and maintained by a state, its political subdivisions, or any agency
      or instrumentality of a state or its political subdivisions, for the benefit
      of
      its 

               
      employees, if such plan has total assets in excess of $5,000,000;

     

    ___ 7. An
      employee benefit plan within the meaning of the Employee Retirement Income
      Security Act of 1974, if the investment decision is made by a plan fiduciary,
      as
      defined 

               
      in Section 3(21) of such Act, which is either a bank, savings and loan
      association, insurance company, or registered investment advisor, or if the
      employee benefit plan 

               
      has total assets in excess of $5,000,000 or, if a self-directed plan, with
      investment decisions made solely by persons that are accredited
      investors;

     

    ___ 8. A
      private
      business development company as defined in Section 202(a)(22) of the
      Investment Advisers Act of 1940;

     

    ___ 9. Any
      partnership or corporation or any organization described in
      Section 501(c)(3) of the Internal Revenue Code or similar business trust,
      not formed for the specific 

               
      purpose of acquiring the Securities, with total assets in excess of
      $5,000,000;

     

    ___ 10. A
      trust,
      with total assets in excess of $5,000,000, not formed for the specific purpose
      of acquiring the Securities, whose purchase is directed by a sophisticated
      person 

                 
      as described in Rule  506(b)(2)(ii) of
      the Exchange Act;

     

    ___ 11. An
      entity
      in which all of the equity owners qualify under any of the above subparagraphs.
      If the undersigned belongs to this investor category only, list the
      equity

                  owners
      of the undersigned, and the investor category which each such equity owner
      satisfies: ____________________________________________________

                          
      _____________________________________________________________________________________________________________

                          (Continue
      on a separate piece of paper, if necessary.)

     

    Please
      set forth in the space provided below the (i) states, if any, in the U.S.
      in which you maintained your principal office during the past two years and
      the
      dates during which you maintained your office in each state, (ii) state(s),
      if any, in which you are incorporated or otherwise organized and
      (iii) state(s), if any, in which you pay income taxes.

                            ____________________________________________________________________________________________

                            ____________________________________________________________________________________________

                            ____________________________________________________________________________________________

     

    

     

    Dated:__________________________,
      2007

     

    _______________________________

    Print
      Name of Investor

     

    _______________________________

    Name:

    Title:

    (Signature
      and title of authorized officer, partner or trustee)

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    SECURITIES
      DELIVERY INSTRUCTIONS

    

    

    

    Please
      instruct us as to where you would like the Securities delivered at
      Closing:

    

    

    

    Name:
      _________________________________________________________

    

    Company:
      ______________________________________________________

    

    Address:_______________________________________________________

    

    ______________________________________________________________

    

    Telephone:
      _____________________________________________________

    

    

    Other
      Special Instructions:__________________________________________

    

    ______________________________________________________________

    
      
        
        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
        

      

    

     

    Exhibit C

     

    OPINION
      OF COMPANY
      CORPORATE COUNSEL

     

    February
      __, 2007

    

    

    

    To
      the
      Investors identified on Exhibit
      A

    to
      the
      Agreement defined below

    

    Re: OccuLogix,
      Inc.

     

    Ladies
      and Gentlemen:

     

    We
      have
      acted as counsel to OccuLogix, Inc., a Delaware corporation (the “Company”),
      in
      connection with the Securities Purchase Agreement, dated as of January __,
      2007,
      by and among the Company, and the investors signatory thereto (the “Agreement”),
      and
      the transactions contemplated therein. Capitalized terms used herein and not
      otherwise defined herein shall have the respective meanings assigned to such
      terms in the Agreement.

     

    This
      opinion is being delivered pursuant to Section 2.2(a)(iv) of the Agreement.
      

     

    In
      rendering this opinion, we have examined executed originals, counterparts or
      copies of each of the following:

     

    1. the
      Agreement (and the exhibits and schedules thereto);

     

    2. the
      Company’s Amended and Restated Certificate of Incorporation as in effect on the
      date hereof (the
      “Certificate
      of Incorporation”);
      

     

    3. the
      Company’s Amended and Restated Bylaws (the “Bylaws”)
      as in
      effect on the date hereof;

     

    4. the
      corporate resolutions of the Board of Directors of the Company authorizing
      the
      execution and delivery of the Agreement and the consummation of the transactions
      contemplated thereby, including the issuance and sale of the Common Shares,
      the
      Warrants and the Warrant Shares;

     

    5. a
      certificate from the Secretary of the State of Delaware as to the good standing
      of the Company dated February __, 2007 (the “Good
      Standing Certificate”);

     

    6. the
      Officer’s Certificate of the Company, dated as of the date hereof (the
“Officer’s
      Certificate”);
      and

     

    7. such
      other documents and certificates of public officials and representatives of
      the
      Company as we have deemed necessary as a basis for the opinions expressed
      herein. 

     

     

    References
      to (1) “Applicable
      Laws”
shall
      mean those laws, rules and regulations of the State of New York and the United
      States of America as well as the General Corporation Law of the State of
      Delaware (“DGCL”)
      which,
      in our experience, are normally applicable to transactions of the type similar
      to the issuance and sale of the Common Shares and the Warrants, (2) the term
      “Governmental
      Authorities”
shall
      mean any New York State or federal executive, legislative, judicial,
      administrative or regulatory body and (3) the term “Applicable
      Orders”
shall
      mean those orders or decrees of Governmental Authorities applicable to the
      Company identified to us
      by the
      Chief Financial Officer or Secretary of
      the
      Company.

     

    As
      to
      various questions of fact material to this opinion, we have relied upon the
      representations and warranties contained in the Agreement and upon certificates
      and other documents and statements of officers of the Company, including without
      limitation, the Officer’s Certificate, and of public officials. In our
      examination of the documents referred to above, we have assumed (i) the
      genuineness of all signatures; (ii) the incumbency, authority, capacity (in
      the
      case of natural persons), and legal right and power under all applicable laws,
      statutes, rules and regulations of all persons executing the Agreement on behalf
      of the parties thereto other than the Company to enter into the Agreement and
      perform the obligations thereunder that are applicable to them; (iii) the
      Agreement has been duly authorized, executed and delivered by, and is binding
      upon and enforceable against, all persons (other than the Company) executing
      the
      Agreement; (iv) the authenticity and completeness of all documents submitted
      to
      us as original or certified documents; (v) the conformity to authentic original
      documents of all documents submitted to us as certified, conformed, facsimile
      or
      photostatic copies; and (vi) that the Good Standing Certificate remains accurate
      from the date thereof through and including the date of this opinion. We have
      made no independent investigation of such assumptions.

     

    We
      are
      attorneys admitted to practice only in the State of New York and we opine herein
      only as to the effect of the Applicable Laws of the State of New York, the
      federal laws of the United States of America and the DGCL on the subject
      transaction. We do not opine on and we assume no responsibility as to the
      applicability of or the effect on any of the matters covered herein other than
      the Applicable Laws.

     

    The
      opinions set forth below are subject to the following additional assumptions,
      limitations, qualifications and exceptions:

     

    
      	 	
              A.

            	
              The
                legality, validity, binding effect and enforceability of the Agreement
                and
                the Warrants may be limited by applicable bankruptcy, insolvency,
                fraudulent conveyance, reorganization, moratorium, marshaling or
                other
                similar laws now or hereafter in effect, affecting creditors’ rights and
                remedies generally;

            

    

     

    
      	 	
              B.

            	
              The
                legality, validity, binding effect and enforceability of the Agreement
                and
                the Warrants may be subject to general principles of equity, regardless
                of
                whether considered in equity or at law;

            

    

     

    
      	 	
              C.

            	
              No
                opinion is expressed with respect to the enforceability of provisions
                regarding indemnification and contribution against liabilities where
                such
                indemnification and contribution is contrary to public
                policy;

            

    

     

    D.          
      We
      have
      assumed that the issuance and sale of the Common Shares, the Warrants and the
      Warrant Shares do not and will not conflict with, contravene, violate or
      constitute a default under (i) any mortgage, lien, lease, agreement, contract,
      instrument, order, arbitration award, judgment or decree to which the Company
      is
      subject, (ii) any rule, law or regulation to which the Company is subject (other
      than the Applicable Laws) or (iii) any judicial or administrative order or
      decree of any governmental authority (other than the Applicable
      Orders);

     

    E.           
      Where
      we
      render an opinion “to our knowledge” with respect to the Company, it is based
      solely upon (i) the actual, current knowledge of those attorneys within this
      firm who devoted substantive attention to the representation of the Company
      in
      connection with the transactions to which this opinion relates, (ii) the
      representations and warranties of the Company set forth in the Agreement, (iii)
      receipt of a certificate executed by an authorized officer of the Company
      covering such matters, and (iv) review of documents provided to us by the
      Company in connection with rendering this opinion, and the due diligence
      performed in connection therewith, which review and due diligence were limited
      to reviewing the Agreement, the Certificate of Incorporation, the Bylaws and
      minute books of the Company, the Good Standing Certificate and certificates
      of
      the Company, and which due diligence did not include any examination of courts,
      boards, other tribunals or public records with respect to any litigation,
      investigation or proceedings, or judgments, orders or decrees applicable to
      the
      Company or any of its properties; 

     

    F.           
      We
      express no opinion as to the effect on the opinions herein stated of (i) the
      compliance or non-compliance of any party to the Agreement (other than the
      Company to the extent set forth herein) with any state, federal or other laws
      or
      regulations applicable to them, or (ii) the legal or regulatory status or the
      nature of the business of such other parties; 

     

    G.           
      Our
      opinion as to good standing contained in paragraph 1 is based solely on the
      Good
      Standing Certificate and is given only as of the date thereof; 

     

    H.           We
      express no opinion on the due authorization of the Common Shares or the Warrant
      Shares, in each case where the amount of Common Stock required to be issued
      under such instruments exceeds the authorized but unissued Common Stock set
      forth in the Certificate of Incorporation; and

     

    I.             This
      opinion is limited to the matters expressly set forth herein and no opinion
      is
      implied or may be inferred beyond the matters expressly so stated. This opinion
      is based upon facts known to the undersigned on the date hereof, and the
      undersigned does not undertake any liability or responsibility to inform you
      of
      any change in circumstances occurring after the date hereof which might alter
      the opinions contained herein.

     

    Based
      upon and subject to the foregoing, we are of the opinion that:

     

    1.  The
      Company is a corporation validly existing and in good standing under the laws
      of
      the State of Delaware and has the requisite corporate power and authority to
      carry on its business as now conducted and to own its properties.

     

    2.  (a)
      The
      Company has the requisite corporate power and authority to enter into and
      perform the Agreement and to issue the Common Shares, the Warrants and the
      Warrant Shares in accordance with the terms of the Agreement and the Warrants,
      as the case may be; (b) the execution and delivery of the Agreement and the
      Warrants by the Company and the consummation by it of the transactions
      contemplated thereby have been duly authorized by the Company’s Board of
      Directors and no further consent or authorization of the Company, its Board
      of
      Directors, or its shareholders is required; (c) the Agreement and the Warrants
      have been duly executed and delivered by the Company; and (d) the Agreement
      and
      the Warrants constitute valid and binding obligations of the Company enforceable
      against the Company in accordance with their terms. 

     

    3.  The
      Common Shares are duly authorized and, upon issuance in accordance with the
      terms of the Agreement, will be validly issued, fully paid and non-assessable,
      and, to our knowledge, free from all liens and charges with respect to the
      issuance thereof. The Warrant Shares are duly authorized and, upon issuance
      in
      accordance with the terms and conditions of the Warrants, will be validly
      issued, fully paid and non-assessable, and, to our knowledge, free from all
      liens and charges with respect to the issuance thereof. A number of shares
      of
      Common Stock sufficient to meet the Company’s obligations to issue Common Stock
      upon full exercise of the Warrants has been duly reserved.

     

    4.  No
      authorization, approval or consent of any Governmental Authority or the
      shareholders of the Company, is required for the issuance and sale of the
      Securities as contemplated by the Agreement or the consummation of the other
      transactions contemplated thereby.

     

    5.  The
      execution and delivery of the Agreement by the Company and the
      issuance of the Common Shares and the Warrants pursuant thereto do not, and,
      if
      issued on the date hereof, the issuance of the Warrant Shares upon exercise
      of
      the Warrants would not, (i) violate any provision of the Certificate of
      Incorporation or Bylaws, as currently in effect, or (ii) violate or contravene
      (a) any Applicable Law, or (b) any Applicable Order of which we are aware,
      the
      violation or contravention of which would result in a Material Adverse
      Effect.

     

    6.  We
      have
      not been engaged to devote substantive attention to any claims, actions, suits,
      proceedings or investigations that are pending against the Company or its
      properties, or against any officer or director of the Company in his or her
      capacity as such. Except
      as
      described in the Schedules to the Agreement and the SEC Filings, to our
      knowledge there is no action or proceeding pending against the Company or its
      Subsidiaries before any court or administrative agency that questions the
      validity of the Agreement or which reasonably might be expected to result,
      either individually or in the aggregate, in a Material Adverse
      Effect.

     

    7.  There
      is
      no control share acquisition, business combination, poison pill (including
      any
      distribution under a rights agreement) or other similar anti-takeover provision
      under the Certificate of Incorporation or Bylaws or the DGCL that is or could
      become applicable to any of the Investors as a result of the Investors and
      the
      Company fulfilling their obligations or exercising their rights under the
      Agreement, including, without limitation, as a result of the Company’s issuance
      of the Securities and the Investors’ ownership of the Securities.

     

    8.  Assuming
      the representations made by the Investors in the Agreement are true and correct,
      the sale of the Common Shares and the Warrants are exempt, and the Warrant
      Shares, if issued on the date hereof, would be exempt from the registration
      requirements of Section 5 of the Securities Act. 

     

    These
      opinions are rendered only to you and are solely for your benefit in connection
      with the transactions contemplated by the Agreement and may not, without our
      prior express written consent, be quoted or relied upon for any other purpose
      or
      by an other person. 

     

     

                Very
      truly yours,

     

    

    
      
        
        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
        

      

    

     

    Exhibit D

     

    PLAN
      OF DISTRIBUTION

    

    The
      selling stockholders may, from time to time, sell any or all of their shares
      of
      common stock on any stock exchange, market or trading facility on which the
      shares are traded or in private transactions. These sales may be at fixed or
      negotiated prices. The selling stockholders may use any one or more of the
      following methods when selling shares:

    

    
      	·  	
              ordinary
                brokerage transactions and transactions in which the broker-dealer
                solicits purchasers;

            

    

     

    
      	·  	
              block
                trades in which the broker-dealer will attempt to sell the shares
                as agent
                but may position and resell a portion of the block as principal to
                facilitate the transaction;

            

    

     

    
      	·  	
              purchases
                by a broker-dealer as principal and resale by the broker-dealer for
                its
                account;

            

    

     

    
      	·  	
              an
                exchange distribution in accordance with the rules of the applicable
                exchange;

            

    

     

    
      	·  	
              privately
                negotiated transactions;

            

    

     

    
      	·  	
              short
                sales;

            

    

     

    
      	·  	
              broker-dealers
                may agree with the selling stockholders to sell a specified number
                of such
                shares at a stipulated price per
                share;

            

    

     

    
      	·  	
              a
                combination of any such methods of sale;
                and

            

    

     

    
      	·  	
              any
                other method permitted pursuant to applicable
                law.

            

    

     

    The
      selling stockholders may also sell shares under Rule 144 under the Securities
      Act, if available, rather than under this prospectus.

    

    Broker-dealers
      engaged by the selling stockholders may arrange for other brokers-dealers to
      participate in sales. Broker-dealers may receive commissions or discounts from
      the selling stockholders (or, if any broker-dealer acts as agent for the
      purchaser of shares, from the purchaser) in amounts to be negotiated. The
      selling stockholders do not expect these commissions and discounts to exceed
      what is customary in the types of transactions involved. Any profits on the
      resale of shares of common stock by a broker-dealer acting as principal might
      be
      deemed to be underwriting discounts or commissions under the Securities Act.
      Discounts, concessions, commissions and similar selling expenses, if any,
      attributable to the sale of shares will be borne by a selling stockholder.
      The
      selling stockholders may agree to indemnify any agent, dealer or broker-dealer
      that participates in transactions involving sales of the shares if liabilities
      are imposed on that person under the Securities Act.

    

    The
      selling stockholders may from time to time pledge or grant a security interest
      in some or all of the shares of common stock owned by them and, if they default
      in the performance of their secured obligations, the pledgees or secured parties
      may offer and sell the shares of common stock from time to time under this
      prospectus after we have filed a supplement to this prospectus under Rule
      424(b)(3) or other applicable provision of the Securities Act of 1933
      supplementing or amending the list of selling stockholders to include the
      pledgee, transferee or other successors in interest as selling stockholders
      under this prospectus.

    

    The
      selling stockholders also may transfer the shares of common stock in other
      circumstances, in which case the transferees, pledgees or other successors
      in
      interest will be the selling beneficial owners for purposes of this prospectus
      and may sell the shares of common stock from time to time under this prospectus
      after we have filed a supplement to this prospectus under Rule 424(b)(3) or
      other applicable provision of the Securities Act of 1933 supplementing or
      amending the list of selling stockholders to include the pledgee, transferee
      or
      other successors in interest as selling stockholders under this
      prospectus.

    

    The
      selling stockholders and any broker-dealers or agents that are involved in
      selling the shares of common stock may be deemed to be “underwriters” within the
      meaning of the Securities Act in connection with such sales. In such event,
      any
      commissions received by such broker-dealers or agents and any profit on the
      resale of the shares of common stock purchased by them may be deemed to be
      underwriting commissions or discounts under the Securities Act. 

    

    We
      are
      required to pay all fees and expenses incident to the registration of the shares
      of common stock. We have agreed to indemnify the selling stockholders against
      certain losses, claims, damages and liabilities, including liabilities under
      the
      Securities Act.

    

    The
      selling stockholders have advised us that they have not entered into any
      agreements, understandings or arrangements with any underwriters or
      broker-dealers regarding the sale of their shares of common stock, nor is there
      an underwriter or coordinating broker acting in connection with a proposed
      sale
      of shares of common stock by any selling stockholder. If we are notified by
      any
      selling stockholder that any material arrangement has been entered into with
      a
      broker-dealer for the sale of shares of common stock, if required, we will
      file
      a supplement to this prospectus. If the selling stockholders use this prospectus
      for any sale of the shares of common stock, they will be subject to the
      prospectus delivery requirements of the Securities Act.

    

    The
      anti-manipulation rules of Regulation M under the Securities Exchange Act of
      1934 may apply to sales of our common stock and activities of the selling
      stockholders.

     

    

    
      
        
        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
        

      

    

     

    Exhibit E

     

    COMPANY
      TRANSFER AGENT INSTRUCTIONS

     

    

    Mellon
      Investor Services LLC

    Newport
      Office Center VII

    480
      Washington Boulevard

    Jersey
      City, New Jersey 07310

    

    Attention:
      

     

    Ladies
      and Gentlemen: 

    

    Reference
      is made to that certain Securities Purchase Agreement, dated as of February
      1,
      2007 (the “Agreement”),
      by and
      among OccuLogix, Inc., a Delaware corporation (the “Company”),
      and
      the investors named on the Schedule of Investors attached thereto (collectively,
      the “Holders”),
      pursuant to which the Company is issuing to the Holders shares (the
“Common
      Shares”)
      of
      Common Stock of the Company, par value $.001 per share (the “Common
      Stock”),
      and
      Warrants (the “Warrants”),
      which
      are exercisable into shares of Common Stock.

     

    This
      letter shall serve as our irrevocable authorization and direction to you
      (provided that you are the transfer agent of the Company at such time):

     

    (i) 
      to issue shares of Common Stock upon transfer or resale of the Common Shares;
      and 

     

    (ii) 
      to issue shares of Common Stock upon the exercise of the Warrants (the
“Warrant
      Shares”)
      to or
      upon the order of a Holder from time to time upon delivery to you of a properly
      completed and duly executed Exercise Notice, in the form attached hereto as
      Exhibit I,
      which
      has been acknowledged by the Company as indicated by the signature of a duly
      authorized officer of the Company thereon.

     

    You
      acknowledge and agree that so long as you have previously received
      (a) written confirmation from the Company’s legal counsel that either
      (i) a registration statement covering resales of the Common Shares and the
      Warrant Shares has been declared effective by the Securities and Exchange
      Commission (the “SEC”)
      under
      the Securities Act of 1933, as amended (the “1933
      Act”),
      and
      that resales of the Common Shares and the Warrant Shares may be made thereunder,
      or (ii) sales of the Common Shares and the Warrant Shares may be made in
      conformity with Rule 144 under the 1933 Act (“Rule 144”),
      (b) if applicable, a copy of such registration statement, and
      (c) notice from legal counsel to the Company or any Holder that a transfer
      of Common Shares and/or Warrant Shares has been effected either pursuant to
      the
      registration statement (and a prospectus delivered to the transferee) or
      pursuant to Rule 144, then, unless otherwise required by law, within three
      (3) business days of your receipt of the notice referred to in (c), you shall
      issue the certificates representing the Common Shares and the Warrant Shares
      so
      sold
      to the
      transferees registered in the names of such transferees, and such certificates
      shall not bear any legend restricting transfer of the Common Shares and
      the
      Warrant Shares thereby and should not be subject to any stop-transfer
      restriction. 

     

    A
      form of
      written confirmation (to be used in connection with any sale) from the Company’s
      outside legal counsel that a registration statement covering resales of the
      Common Shares and the Warrant Shares has
      been
      declared effective by the SEC under the 1933 Act is attached hereto as
Exhibit II.
      

     

    Please
      be
      advised that the Holders are relying upon this letter as an inducement to enter
      into the Agreement and, accordingly, each Holder is a third party beneficiary
      to
      these instructions. 

     

    Please
      execute this letter in the space indicated to acknowledge your agreement to
      act
      in accordance with these instructions. Should you have any questions concerning
      this matter, please contact me at (905) 602-0887. 

     

                    Very
      truly
      yours,

     

                    OCCULOGIX,
      INC.

     

                    By:  __________________________________________________ 

                         Name:
      

                       
      Title: 

     

    THE
      FOREGOING INSTRUCTIONS ARE

    ACKNOWLEDGED
      AND AGREED TO 

    this
      day
      of ___________, 2007

     

    MELLON
      INVESTOR SERVICES LLC

     

    By:_____________________________   

    Name:______________________  

    Title:_______________________
       

    

     

    Enclosures
      

     

    

    
      
        
        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
        

      

    

     

    Exhibit F

     

    FORM
      OF WARRANT

     

    

    NEITHER
      THESE SECURITIES NOR THE SECURITIES FOR WHICH THESE SECURITIES ARE EXERCISABLE
      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. THESE SECURITIES AND THE SECURITIES ISSUABLE UPON
      EXERCISE OF THESE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE
      MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.

     

    OCCULOGIX,
      INC.

     

    WARRANT

     

    Warrant
      No. [
      ]                                                                                                                                                                                                                                                    Dated:
      ______________, 2007

     

    OCCULOGIX,
      INC., a Delaware corporation (the “Company”),
      hereby certifies that, for value received, [Name of Holder] or its registered
      assigns (the “Holder”),
      is
      entitled to purchase from the Company up to a total of
      [  ]1 
      shares
      of common stock, $0.001 par value per share (the “Common
      Stock”),
      of
      the Company (each such share, a “Warrant
      Share”
and
      all
      such shares, the “Warrant
      Shares”)
      at an
      exercise price equal to [$_________] per share (as adjusted from time to time
      as
      provided in Section 9,
      the
“Exercise
      Price”),
      at
      any time on or after August [__], 2007 (the “Initial
      Exercise Date”)
      and
      through and including the date that is five years from the date of issuance
      hereof (the “Expiration
      Date”),
      and
      subject to the following terms and conditions. This Warrant (this “Warrant”)
      is one
      of a series of similar warrants issued pursuant to that certain Securities
      Purchase Agreement, dated as of the date hereof, by and among the Company and
      the Purchasers identified therein (the “Purchase
      Agreement”).
      All
      such warrants are referred to herein, collectively, as the “Warrants.”

     

    1 __%
      warrant coverage.

     

    1.  Definitions.
      In
      addition to the terms defined elsewhere in this Warrant, capitalized terms
      that
      are not otherwise defined herein have the meanings given to such terms in the
      Purchase Agreement.

     

    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 Holder of record 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 Transfer Agent or to the
      Company at its address specified herein. Upon any such registration of 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.

     

    (a)  This
      Warrant shall be exercisable by the registered Holder at any time and from
      time
      to time on or after the Initial Exercise Date to 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; provided that, if the average of the Closing Prices for the five Trading
      Days immediately prior to (but not including) the Expiration Date exceeds the
      Exercise Price on the Expiration Date, provided further that, if on the
      Expiration Date, there is no effective Registration Statement covering the
      resale of the Warrant Shares, then this Warrant shall be deemed to have been
      exercised in full (to the extent not previously exercised) on a “cashless
      exercise” basis at 6:30 P.M., New York City time on the Expiration
      Date.

     

    (b)  A
      Holder
      may exercise this Warrant by delivering to the Company (i) an exercise
      notice, in the form attached hereto (the “Exercise
      Notice”),
      appropriately completed and duly signed, and (ii) payment of the Exercise
      Price for the number of Warrant Shares as to which this Warrant is being
      exercised (which may take the form of a “cashless exercise” if so indicated in
      the Exercise Notice and only if a “cashless exercise” may occur at such time
      pursuant to Section 10 below), and the date such items are delivered to the
      Company (as determined in accordance with the notice provisions hereof) is
      an
“Exercise
      Date.”
The
      Holder shall not be required to deliver the original Warrant in order to effect
      an exercise hereunder. Execution and delivery of the Exercise Notice shall
      have
      the same effect as cancellation of the original Warrant and issuance of a New
      Warrant evidencing the right to purchase the remaining number of Warrant
      Shares.

     

    5.  Delivery
      of Warrant Shares.

     

    (a)  Upon
      exercise of this Warrant, the Company shall promptly (but in no event later
      than
      five Trading Days after the Exercise Date) issue or cause to be issued and
      cause
      to be delivered to or upon the written order of the Holder and in such name
      or
      names as the Holder may designate, a certificate for the Warrant Shares issuable
      upon such exercise, free of restrictive legends unless a registration statement
      covering the resale of the Warrant Shares and naming the Holder as a selling
      stockholder thereunder is not then effective and the Warrant Shares are not
      freely transferable without volume restrictions pursuant to Rule 144 under
      the Securities Act. The Holder, or any Person so designated by the Holder to
      receive Warrant Shares, shall be deemed to have become the holder of record
      of
      such Warrant Shares as of the Exercise Date. The Company shall, upon request
      of
      the Holder, use its best efforts to deliver Warrant Shares hereunder
      electronically through The Depository Trust Company or another established
      clearing corporation performing similar functions.

     

    (b)  This
      Warrant is exercisable, either in its entirety or, from time to time, for a
      portion of the number of Warrant Shares. Upon surrender of this Warrant
      following one or more partial exercises, the Company shall issue or cause to
      be
      issued, at its expense, a New Warrant evidencing the right to purchase the
      remaining number of Warrant Shares.

     

    (c)  In
      addition to any other rights available to a Holder, if the Company fails to
      deliver to the Holder a certificate representing Warrant Shares by the third
      Trading Day after the date on which delivery of such certificate is required
      by
      this Warrant, and if after such third Trading Day the Holder purchases (in
      an
      open market transaction or otherwise) shares of Common Stock to deliver in
      satisfaction of a sale by the Holder of the Warrant Shares that the Holder
      anticipated receiving from the Company (a “Buy-In”),
      then
      the Company shall, within three Trading Days after the Holder’s request and in
      the Holder’s discretion, either (i) pay cash to the Holder in an amount
      equal to the Holder’s total purchase price (including brokerage commissions, if
      any) for the shares of Common Stock so purchased (the “Buy-In
      Price”),
      at
      which point the Company’s obligation to deliver such certificate (and to issue
      such Common Stock) shall terminate, or (ii) promptly honor its obligation
      to deliver to the Holder a certificate or certificates representing such Common
      Stock and pay cash to the Holder in an amount equal to the excess (if any)
      of
      the Buy-In Price over the product of (A) such number of shares of Common Stock,
      times (B) the Closing Price on the date of the event giving rise to the
      Company’s obligation to deliver such certificate.

     

    (d)  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 shares of Common Stock upon exercise
      of
      this Warrant as required pursuant to the terms hereof.

     

    6.  Charges,
      Taxes and Expenses.
      Issuance and delivery of certificates for shares of Common Stock 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 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 bond or indemnity, 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.

     

    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 (after giving effect to the adjustments and restrictions of
      Section 9, if any). 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. The Company will take
      all
      such action as may be necessary to assure that such shares of Common Stock
      may
      be issued as provided herein without violation of any applicable law or
      regulation, or of any requirements of any securities exchange or automated
      quotation system upon which the Common Stock may be listed.

     

    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)  Pro
      Rata Distributions.
      If the
      Company, at any time while this Warrant is outstanding, distributes to holders
      of Common Stock (i) evidences of its indebtedness, (ii) any security
      (other than a distribution of Common Stock covered by the preceding paragraph),
      (iii) rights or warrants to subscribe for or purchase any security, or
      (iv) any other asset other than cash dividends out of earnings (in each
      case, “Distributed
      Property”),
      then
      in each such case the Holder shall be entitled upon exercise of this Warrant
      for
      the purchase of any or all of the Warrant Shares, to receive the amount of
      Distributed Property which would have been payable to the Holder had such Holder
      been the holder of such Warrant Shares on the record date for the determination
      of stockholders entitled to such Distributed Property. The Company will at
      all
      times set aside in escrow and keep available for distribution to such holder
      upon exercise of this Warrant a portion of the Distributed Property to satisfy
      the distribution to which such Holder is entitled pursuant to the preceding
      sentence.

     

    (c)  Fundamental
      Transactions.
      If any
      capital reorganization, reclassification of the capital stock of the Company,
      consolidation or merger of the Company with another corporation in which the
      Company is not the survivor, or sale, transfer or other disposition of all
      or
      substantially all of the Company’s assets to another corporation shall be
      effected (all such transactions being hereinafter referred to as a “Fundamental
      Transaction”),
      then
      the Company shall use its best efforts to ensure that lawful and adequate
      provision shall be made whereby the Holder shall thereafter have the right
      to
      purchase and receive upon the basis and upon the terms and conditions herein
      specified and in lieu of the Warrant Shares immediately theretofore issuable
      upon exercise of this Warrant, such shares of stock, securities or assets as
      would have been issuable or payable with respect to or in exchange for a number
      of Warrant Shares equal to the number of Warrant Shares immediately theretofore
      issuable upon exercise of this Warrant, had such reorganization,
      reclassification, consolidation, merger, sale, transfer or other disposition
      not
      taken place, and in any such case appropriate provision shall be made with
      respect to the rights and interests of the Holder to the end that the provisions
      hereof (including, without limitation, provision for adjustment of the Exercise
      Price) shall thereafter be applicable, as nearly equivalent as may be
      practicable in relation to any share of stock, securities or assets thereafter
      deliverable upon the exercise thereof. The Company shall not effect any such
      consolidation, merger, sale, transfer or other disposition unless prior to
      or
      simultaneously with the consummation thereof the successor corporation (if
      other
      than the Company) resulting from such consolidation or merger, or the
      corporation purchasing or otherwise acquiring such assets or other appropriate
      corporation or entity shall assume the obligation to deliver to the Holder,
      at
      the last address of the Holder appearing on the books of the Company, such
      shares of stock, securities or assets as, in accordance with the foregoing
      provisions, the Holder may be entitled to purchase, and the other obligations
      under this Warrant. The provisions of this Section 9(c) shall similarly
      apply to successive reorganizations, reclassifications, consolidations, mergers,
      sales, transfers or other dispositions, each of which transactions shall also
      constitute a Fundamental Transaction. Notwithstanding the foregoing, if any
      Fundamental Transaction constitutes or results in (a) a “going private”
transaction as defined in Rule 13e-3 under the Exchange Act, (b) an
      acquisition of the Company primarily for cash, or (c) an acquisition,
      merger or sale with or into a Person not traded on an Eligible Market, then
      the
      Company (or any such successor or surviving entity) will redeem this Warrant
      from the Holder for a purchase price, payable in cash on the closing date of
      such Fundamental Transaction, equal to the Black Scholes Value of the remaining
      unexercised portion of this Warrant on the closing date of such Fundamental
      Transaction, provided that the per share consideration to be received by the
      holders of Common Stock upon the consummation of such Fundamental Transaction
      is
      less than the Exercise Price. “Black
      Scholes Value”
means
      the value of this Warrant based on the Black and Scholes Option Pricing Model
      obtained from the “OV” function on Bloomberg determined as of the day
      immediately following the public announcement of the applicable Fundamental
      Transaction and reflecting (i) a risk-free interest rate corresponding to
      the U.S. Treasury rate for a period equal to the remaining term of this Warrant
      as of such date and (ii) an expected volatility equal to the lesser of (x)
      70 - or (y) 100 - day volatility obtained from the HVT function on
      Bloomberg.

     

    (d)  Subsequent
      Equity Sales.

     

    (i)  If,
      at
      any time while this Warrant is outstanding, the Company issues additional shares
      of Common Stock or rights, warrants, options or other securities or debt
      convertible, exercisable or exchangeable for shares of Common Stock or otherwise
      entitling any Person to acquire shares of Common Stock (collectively,
“Common
      Stock Equivalents”)
      at an
      effective price to the Company per share of Common Stock (the "Effective
      Price")
      less
      than the Exercise Price (as adjusted hereunder to such date), then the total
      maximum number of shares of Common Stock issuable upon conversion, exercise
      or
      exchange of such Common Stock Equivalents shall be deemed to be outstanding
      as
      of the date of issuance of such Common Stock Equivalents and the Exercise Price
      shall be reduced to equal the product of (A) the Exercise Price in effect
      immediately prior to such issuance of Common Stock or Common Stock Equivalents
      times (B) a fraction, the numerator of which is the sum of (1) the number of
      shares Common Stock outstanding or deemed to be outstanding immediately prior
      to
      such issuance, plus (2) the number of shares of Common Stock which the aggregate
      Effective Price of the Common Stock issued (or deemed to be issued) would
      purchase at the Exercise Price (as adjusted hereunder to such date), and the
      denominator of which is the aggregate number of shares of Common Stock
      outstanding or deemed to be outstanding immediately after such issuance.
      Notwithstanding the foregoing, in no event shall the Exercise Price be reduced
      below $1.85 per share (as appropriately adjusted for any event described in
      paragraph (a) of this Section) through the operation of this paragraph (d).
      For
      purposes of this paragraph, in connection with any issuance of any Common Stock
      Equivalents, (A) the maximum number of shares of Common Stock potentially
      issuable at any time upon conversion, exercise or exchange of such Common Stock
      Equivalents (the "Deemed
      Number")
      shall
      be deemed to be outstanding upon issuance of such Common Stock Equivalents
      (without regard to any provision contained therein for a subsequent adjustment
      to such number of shares), (B) the Effective Price applicable to such Common
      Stock shall equal the minimum dollar value of consideration payable to the
      Company to purchase such Common Stock Equivalents and to convert, exercise
      or
      exchange them into Common Stock (without regard to any provision contained
      therein for a subsequent adjustment to such number of shares), divided by the
      Deemed Number, and (C) no further adjustment shall be made to the Exercise
      Price
      upon the actual issuance of Common Stock upon conversion, exercise or exchange
      of such Common Stock Equivalents. If such Common Stock Equivalents by their
      terms provide, with the passage of time or otherwise, for any decrease in the
      consideration payable to the Company, or increase in the number of shares of
      Common Stock issuable upon the exercise, conversion or exchange thereof, the
      Exercise Price computed upon the original issue thereof, and any subsequent
      adjustments based thereon, shall, upon any such decrease or increase becoming
      effective, be recomputed to reflect such decrease or increase insofar as it
      affects such Common Stock Equivalents. On the expiration of any Common Stock
      Equivalent, or the termination of any such right to convert or exchange any
      such
      Common Stock Equivalent into or for Common Stock, the Exercise Price then in
      effect hereunder shall forthwith be readjusted (increased or decreased, as
      the
      case may be) to the Exercise Price which would have been in effect at the time
      of such expiration or termination had such Common Stock Equivalent, to the
      extent outstanding immediately prior to such expiration or termination, never
      been granted, issued or sold, and the shares of Common Stock issuable thereunder
      shall no longer be deemed to be outstanding.

     

    (ii)  If,
      at
      any time while this Warrant is outstanding, the Company issues Common Stock
      Equivalents with an Effective Price or a number of underlying shares that floats
      or resets or otherwise varies or is subject to adjustment based (directly or
      indirectly) on market prices of the Common Stock (a "Floating
      Price Security"),
      then
      for purposes of applying the preceding paragraph in connection with any
      subsequent exercise, the Effective Price will be determined separately on each
      Exercise Date and will be deemed to equal the lowest Effective Price at which
      any holder of such Floating Price Security is entitled to acquire Common Stock
      on such Exercise Date (regardless of whether any such holder actually acquires
      any shares, on such date).

     

    (iii)  Notwithstanding
      the foregoing, no adjustment will be made under this paragraph (d) in respect
      of
      any Excluded Stock. For purposes hereof, “Excluded
      Stock”
      shall
      mean shares of Common Stock or Common Stock Equivalents issued or deemed issued
      (v) upon the exercise of Options outstanding on the date hereof, (w) upon
      the issuance of Options in the future under the Company’s 2002 Stock Option Plan
      or other security-based compensation arrangements, (x) to banks, equipment
      lessors or other financial institutions, or to real property lessors, pursuant
      to a debt financing, equipment leasing or real property leasing transaction,
      (y)
      pursuant to the acquisition of another corporation by the Company by merger,
      purchase of substantially all of the assets or other reorganization or pursuant
      to a joint venture agreement, (z) in connection with marketing or similar
      agreements or strategic partnerships (including, without limitation, by way
      of a
      private placement to strategic investors and/or entities (whatever the legal
      form) in which, or of which, one or more members of the Company’s management
      beneficially owns or controls an equity stake of 10% or greater and (aa) in
      a firm commitment underwritten public offering.

     

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

     

    (f)  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.

     

    (g)  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 Transfer Agent.

     

    (h)  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 without
      limitation any granting of rights or warrants to subscribe for or purchase
      any
      capital stock of the Company, (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, at least ten 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.
      The
      Holder shall pay the Exercise Price in immediately available funds; provided,
      however, that if at any time after the Required Effective Date a Registration
      Statement covering the resale of the Warrant Shares is not effective on the
      Exercise Date, the Holder may satisfy its obligation to pay the Exercise Price
      through a “cashless exercise,” in which event the Company shall issue to the
      Holder the number of Warrant Shares determined as follows:

     

     

    X
      = Y
      [(A-B)/A]

     

    where:

     

    X
      = the
      number of Warrant Shares to be issued to the Holder.

     

    Y
      = the
      number of Warrant Shares with respect to which this Warrant is being
      exercised.

     

    A
      = the
      average of the Closing Prices for the five Trading Days immediately prior to
      (but not including) the Exercise Date.

     

    B
      = the
      Exercise Price.

     

    

    For
      purposes of Rule 144 promulgated under the Securities Act, it is intended,
      understood and acknowledged that the Warrant Shares issued in a cashless
      exercise transaction shall be deemed to have been acquired by the Holder, and
      the holding period for the Warrant Shares shall be deemed to have commenced,
      on
      the date this Warrant was originally issued pursuant to the Purchase
      Agreement.

     

    11.  Limitation
      on Exercise.
      Notwithstanding anything to the contrary contained herein, the number of shares
      of Common Stock that may be acquired by the Holder upon any exercise of this
      Warrant (or otherwise in respect hereof) shall be limited to the extent
      necessary to insure that, following such exercise (or other issuance), the
      total
      number of shares of Common Stock then beneficially owned by such Holder and
      its
      Affiliates and any other Persons whose beneficial ownership of Common Stock
      would be aggregated with the Holder’s for purposes of Section 13(d) of the
      Exchange Act, does not exceed 4.999% (the “Maximum
      Percentage”)
      of the
      total number of issued and outstanding shares of Common Stock (including for
      such purpose the shares of Common Stock issuable upon such exercise). For such
      purposes, beneficial ownership shall be determined in accordance with
      Section 13(d) of the Exchange Act and the rules and regulations promulgated
      thereunder. Each delivery of an Exercise Notice hereunder will constitute a
      representation by the Holder that it has evaluated the limitation set forth
      in
      this paragraph and determined that issuance of the full number of Warrant Shares
      requested in such Exercise Notice is permitted under this paragraph, and the
      Company shall have no liability with respect to this Section 11. The
      Company’s obligation to issue shares of Common Stock in excess of the limitation
      referred to in this Section shall be suspended (and shall not terminate or
      expire notwithstanding any contrary provisions hereof) until such time, if
      any,
      as such shares of Common Stock may be issued in compliance with such limitation,
      but in no event later than the Expiration Date. By written notice to the
      Company, the Holder may waive the provisions of this Section or increase or
      decrease the Maximum Percentage to any other percentage specified in such
      notice, but (i) any such waiver or increase will not be effective until the
      61st day after such notice is delivered to the Company, and (ii) any such
      waiver or increase or decrease will apply only to the Holder and not to any
      other holder of Warrants.

     

    12.  Fractional
      Shares.
      The
      Company shall not be required to issue or cause to be issued fractional Warrant
      Shares on the exercise of this Warrant. If any fraction of a Warrant Share
      would, except for the provisions of this Section, be issuable upon exercise
      of
      this Warrant, the number of Warrant Shares to be issued will be rounded down
      to
      the nearest whole share.

     

    13.  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 the Purchase Agreement 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 the Purchase Agreement 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 delivery to the courier service, 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 address
      for such notices or communications shall be as set forth in the Purchase
      Agreement.

     

    14.  Warrant
      Agent.
      The
      Company shall serve as warrant agent under this Warrant. Upon 30 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 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 stockholder 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.

     

    15.  Miscellaneous.

     

    (a)  Subject
      to the restrictions on transfer set forth on the first page hereof, this Warrant
      may be assigned by the Holder. This Warrant may not be assigned by the Company
      except to a successor in the event of a Fundamental Transaction. 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)  The
      Company will not, by amendment of its governing documents or through any
      reorganization, transfer of assets, consolidation, merger, dissolution, issue
      or
      sale of securities or any other voluntary action, avoid or seek to avoid the
      observance or performance of any of the terms of this Warrant, but will at
      all
      times in good faith assist in the carrying out of all such terms and in the
      taking of all such action as may be necessary or appropriate in order to protect
      the rights of the Holder against impairment. Without limiting the generality
      of
      the foregoing, the Company (i) will not increase the par value of any
      Warrant Shares above the amount payable therefor on such exercise,
      (ii) will take all such action as may be reasonably necessary or
      appropriate in order that the Company may validly and legally issue fully paid
      and nonassessable Warrant Shares on the exercise of this Warrant, and
      (iii) will not close its stockholder books or records in any manner which
      interferes with the timely exercise of this Warrant.

     

    (c)  GOVERNING
      LAW; VENUE; WAIVER OF JURY TRIAL.
      ALL
      QUESTIONS CONCERNING THE CONSTRUCTION, VALIDITY, ENFORCEMENT AND INTERPRETATION
      OF THIS WARRANT SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE
      WITH THE LAWS OF THE STATE OF NEW YORK. EACH PARTY HEREBY IRREVOCABLY SUBMITS
      TO
      THE EXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL COURTS SITTING IN THE CITY
      OF NEW YORK, BOROUGH OF MANHATTAN, FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER
      OR IN CONNECTION HEREWITH OR WITH ANY TRANSACTION CONTEMPLATED HEREBY OR
      DISCUSSED HEREIN (INCLUDING WITH RESPECT TO THE ENFORCEMENT OF ANY OF THE
      TRANSACTION DOCUMENTS), AND HEREBY IRREVOCABLY WAIVES, AND AGREES NOT TO ASSERT
      IN ANY SUIT, ACTION OR PROCEEDING, ANY CLAIM THAT IT IS NOT PERSONALLY SUBJECT
      TO THE JURISDICTION OF ANY SUCH COURT AND THAT SUCH SUIT, ACTION OR PROCEEDING
      IS IMPROPER. EACH PARTY HEREBY IRREVOCABLY WAIVES PERSONAL SERVICE OF PROCESS
      AND CONSENTS TO PROCESS BEING SERVED IN ANY SUCH SUIT, ACTION OR PROCEEDING
      BY
      MAILING A COPY THEREOF VIA REGISTERED OR CERTIFIED MAIL OR OVERNIGHT DELIVERY
      (WITH EVIDENCE OF DELIVERY) TO SUCH PARTY AT THE ADDRESS IN EFFECT FOR NOTICES
      TO IT UNDER THIS AGREEMENT AND AGREES THAT SUCH SERVICE SHALL CONSTITUTE GOOD
      AND SUFFICIENT SERVICE OF PROCESS AND NOTICE THEREOF. NOTHING CONTAINED HEREIN
      SHALL BE DEEMED TO LIMIT IN ANY WAY ANY RIGHT TO SERVE PROCESS IN ANY MANNER
      PERMITTED BY LAW. EACH OF THE COMPANY AND THE HOLDER HEREBY WAIVES ALL RIGHTS
      TO
      A TRIAL BY JURY.

     

    (d)  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.

     

    (e)  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 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.

     

    [REMAINDER
      OF PAGE INTENTIONALLY LEFT BLANK,

     

    SIGNATURE
      PAGE FOLLOWS]

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

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

    
      	 	
               

              OCCULOGIX,
                INC.

               

            
	 	
              By:

            	 
	 	
              Name:

            	 
	 	
              Title:

            	 

    

     

    

     

    

     

    

    

      

      
         

         

         

      

    

    
      
        
          

          
             

             

          

        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
        

      

    

     

    OCCULOGIX,
      INC.

     

    COMPANY
      DISCLOSURE SCHEDULE

     

    This
      Company Disclosure Schedule is made and given pursuant to the Securities
      Purchase Agreement (the “Agreement”),
      dated
      as of ______________________, 2007, among OccuLogix, Inc. (the “Company”),
      a
      Delaware corporation, and the investors listed on the Schedule of Investors
      attached thereto as Exhibit
      A
      (the
“Investors”).
      

     

    All
      capitalized terms used but not defined herein have the respective meanings
      attributed to such terms in the Agreement, unless otherwise provided. The
      section or subsection numbers below correspond to the section or subsection
      of
      the representations and warranties contained in the Agreement that are modified
      by the disclosure contained herein and any other section or subsection of the
      Agreement. To the extent that (a) one portion of this Company Disclosure
      Schedule specifically refers to another portion hereof by specific
      cross-reference or (b) it is readily apparent from the text of the disclosure
      contained herein that an item disclosed in one section or subsection of this
      Company Disclosure Schedule is omitted from another section or subsection where
      such disclosure would be appropriate, such item shall be deemed to have been
      disclosed in the section or subsection of this Company Disclosure Schedule
      from
      which such item is omitted.

     

    Nothing
      in this Company Disclosure Schedule is intended to broaden the scope of any
      representation or warranty contained in the Agreement or to create any covenant.
      Inclusion of any item in this Company Disclosure Schedule (a) does not represent
      a determination that such item is material or establish a standard of
      materiality, (b) does not represent a determination that such item did not
      arise
      in the ordinary course of business and (c) shall not constitute, or be deemed
      to
      be, an admission to any third party concerning such item or an admission of
      default or breach under any agreement or document. Unless otherwise stated
      herein or in the Agreement, all statements made herein are made as of the date
      hereof. Matters reflected in this Company Disclosure Schedule are not
      necessarily limited to matters required by the Agreement to be reflected herein;
      such additional matters, if any, are included for informational purposes
      only.

     

    The
      information contained herein is provided solely for purposes of making
      disclosure to the Investors under the Agreement. In disclosing such information,
      the Company does not waive any attorney-client privilege attaching to such
      information or any protection afforded by the work-product doctrine with respect
      to any of the matters disclosed herein.

     

    

     

    

    
      
        
        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
          

        

      

    

     

    SCHEDULE
      3.1(a)

     

    Subsidiaries

     

    

     

    Solx,
      Inc.

    OcuSense,
      Inc.2 

    OccuLogix
      Holdings, Inc.

    OccuLogix
      

    OccuLogix
      Canada LLC

    

    

      

      
         

        2
          The
          Company owns 1,754,589 shares of the Series A Preferred Stock of OcuSense,
          Inc.,
          representing 50.1% of OcuSense, Inc.’s capital stock on a fully diluted
          basis.

         

      

    

    
      
        
        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
          

        

      

    

     

    SCHEDULE
      3.1(f)

     

    Capitalization

     

    

    
      	
               

              Type
                of Securities

            	
               

              Number
                Authorized

            	
               

              Number
                Issued and
                Outstanding

            
	
               

              Common
                Stock, par value $0.001 per share

            	
               

              75,000,000

            	
               

              50,626,562

            
	
               

              Preferred
                Stock, par value $0.001 per share

            	
               

              10,000,000

            	
               

              -

            
	
               

              Options
                to purchase shares of Common Stock, par value $0.001 per share, under
                the
                Company’s 2002 Stock Option Plan

            	
               

              4,456,000

            	
               

              3,445,221

            
	
               

              Options
                to purchase shares of Common Stock, par value $0.001 per share, outside
                the Company’s 2002 Stock Option Plan

            	
               

              n/a

            	
               

              572,000

            

    

     

    

     

    Pursuant
      to a standby financing commitment that Elias Vamvakas, the Company’s Chairman
      and Chief Executive Officer, gave to the Company on November 30, 2006, Mr.
      Vamvakas committed to purchase convertible debentures of the Company in an
      aggregate maximum principal amount of $8,000,000 (“Convertible
      Debentures”).
      At any
      time and from time to time prior to their maturity date, at Mr. Vamvakas’
option, all or a portion of the principal amount of outstanding Convertible
      Debentures may be converted into shares of Common Stock at a rate of $2.70
      per
      share. No Convertible Debentures are outstanding on the date hereof, and such
      standby financing commitment will terminate on the Closing if the net proceeds
      of sale of Securities pursuant the Agreement are at least
      $8,000,000.

     

    To
      the
      knowledge of the Company, each of the following Persons beneficially owns in
      excess of 5% of outstanding Common Stock. The Company makes no statement
      regarding the filing with the SEC by any of them of Schedule 13D or Schedule
      13G.

     

    
      	·  	
              TLC
                Vision Corporation

            

    

    
      	·  	
              Diamed
                Medizintechnik GmbH

            

    

    
      	·  	
              Sowood
                Capital Management L.P.

            

    

    
      	·  	
              Boston
                Scientific Corporation

            

    

    
      
        
        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
          

        

      

    

     

    SCHEDULE
      3.1(g)

     

    SEC
      Reports; Financial Statements

     

    

     

    NIL

    
      
        
        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
          

        

      

    

     

    SCHEDULE
      3.1(h)

     

    

     

    Indebtedness
      in an amount greater than $100,000:

     

    Pursuant
      to the Agreement and Plan of Merger (the “Merger
      Agreement”),
      dated
      as of August 1, 2006, among the Company, OccuLogix Mergeco, Inc., formerly
      a
      wholly owned subsidiary of the Company, Solx, Inc. (“Solx”)
      and
      Doug P. Adams, John Sullivan and Peter M. Adams, acting, in each case, in his
      capacity as a member of the Stockholder Representative Committee referred to
      therein (the “Stockholder
      Representative Committee”),
      as
      amended by the Amending Agreement, dated as of August 30, 2006, by and among
      such parties, the Company is obligated to pay the Stockholder Representative
      Committee, acting as the representative of the former stockholders of Solx,
      $3,000,000 and $5,000,000, on September 1, 2007 and September 1, 2008,
      respectively. In addition, if Solx receives final approval from the U.S. Food
      and Drug Administration (the “FDA”)
      for the
      marketing and sale of its GMS gold shunt, then the Company will be obligated
      to
      pay an additional $5,000,000 to the former stockholders of Solx.

    

    Pursuant
      to the Series A Stock Purchase Agreement (the “Series
      A Stock Purchase Agreement”),
      dated
      as of November 30, 2006, between OcuSense, Inc. (“OcuSense”)
      and the
      Company, the Company will be required to pay to OcuSense $2,000,000 upon the
      attainment by OcuSense of the first of two pre-defined milestones and another
      $2,000,000 upon the attainment by OcuSense of the second of such milestones,
      provided that both milestones are achieved prior to May 1, 2009. In addition,
      pursuant to the Series A Preferred Stock Purchase Agreement, the Company will
      be
      required to purchase $3,000,000 of shares of OcuSense’s Series B Preferred Stock
      upon OcuSense’s receipt from the FDA of 510K clearance for OcuSense’s DES Test
      and to purchase another $3,000,000 of shares of OcuSense’s Series B Preferred
      Stock upon OcuSense’s receipt from the FDA of CLIA waiver for the DES
      Test.

    

    

     

     

    
      
        
        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
          

        

      

    

     

    SCHEDULE
      3.1(k)

     

    Title
      to Assets

     

    

     

    As
      of
      September 1, 2006, Solx granted a security interest in all of its intellectual
      property to Doug P. Adams, John Sullivan and Peter M. Adams, in their capacity
      as members of the Stockholder Representative Committee, in order to secure
      Solx’s obligations under the Guaranty, dated as of September 1, 2006, by Solx in
      favor of Doug P. Adams, John Sullivan and Peter M. Adams, in their capacity
      as
      members of the Stockholder Representative Committee (the “Guaranty”).
      Pursuant to the Guaranty, Solx guaranteed the Company’s obligations under the
      Merger Agreement to make payments of up to an aggregate of $13,000,000 to the
      Stockholder Representative Committee, acting as the representative of the former
      stockholders of Solx.

     

     

    
      
        
        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
          

        

      

    

     

    SCHEDULE
      3.1(j)

     

    Compliance

     

    

     

    NIL

    
      
        
        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
          

        

      

    

     

    SCHEDULE
      3.1(p)

     

    Registration
      Rights

     

    

     

    NIL

    
      
        
        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
          

        

      

    

     

    SCHEDULE
      3.1(q)

     

    Application
      of Takeover Protections

     

    

    NIL

    

    
      
        
        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
          

        

      

    

    SCHEDULE
      3.1(t)

    

    Patents
      and Trademarks

    

    

    Attached
      hereto is a chart indicating those of the Company’s trademarks that have been
      abandoned or cancelled as well as those of the Company’s trademarks with renewal
      dates pending within the next three years. 

    

    
      
        
        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
          

        

      

    

    

      
        	
                Country

              	
                Mark

              	
                File
                  No.

              	
                Application/
                  Registration No.

              	
                Status

              	
                Next
                  Due Date

              	
                Comments

              
	
                Australia

              	
                RHEOPHERESIS

              	
                33479-2045

              	
                797438

              	
                Registered

              	
                Renewal
                  Due Date:

                June
                  17, 2009.

              	
                Must
                  be renewed by June 17, 2009, otherwise registration will
                  lapse

              
	
                Canada

              	
                VASCULAR
                  SCIENCES

              	
                33479-2010

              	
                1,159,953

              	
                Abandoned

              	 	
                Abandoned
                  on October 12, 2006

              
	
                Canada

              	
                RHEOCLINIC

              	
                33479-2013

              	
                1,183,091

              	
                Abandoned

              	 	
                Allow
                  to lapse per client’s instructions.

              
	
                Canada

              	
                RHEO
                  THERAPEUTICS

              	
                33479-2084

              	
                1,247,666

              	
                Allowed

              	
                Declaration
                  of Use and Registration Fee Due: February 17, 2008

              	
                Declaration
                  of Use and Registration fee must be paid by February 17, 2008 otherwise
                  application will be deemed abandoned

              
	
                Canada

              	
                RHEOPHERESIS

              	
                33479-2029

              	
                1,253,711

              	
                Pending

              	
                Office
                  Action Response Due:

                February
                  22, 2007

              	
                Allow
                  to lapse per Julie Fotheringham’s instructions received by telephone on
                  December 5, 2006.

              
	
                European

              	 

                 

              	
                33479-2060

              	
                4678025

              	
                Accepted

              	 	
                Allow
                  to lapse - per Julie Fotheringham’s instructions December 5,
                  2006

              
	
                European

              	 	
                33479-2061

              	
                4678033

              	
                Opposed

              	 	
                Allow
                  to lapse per Julie Fotheringham’s instructions of December 5,
                  2006

              
	
                Singapore

              	
                RHEO
                  (wares)

              	
                33479-2058

              	
                T05/16411A

              	
                Abandoned

              	 	 
	
                Singapore

              	
                RHEO
                  (services)

              	
                33479-2066

              	
                T05/16412Z
                  

              	
                Abandoned

              	 	 
	
                USA

              	
                OUR
                  VISION IS YOUR VISION

              	
                33479-2016

              	
                2,293,681

              	
                Cancelled

              	 	
                Cancelled
                  on August 19, 2006

              
	
                USA

              	
                RHEOTHERAPY

              	
                33479-2017

              	
                2,207,551

              	
                Cancelled

              	 	
                Cancelled
                  on September 3, 2005 

              
	
                USA

              	
                VASCULAR
                  SCIENCES

              	
                33479-2038

              	
                76/412,446

              	
                Abandoned

              	 	
                Abandoned
                  on April 19, 2006

              
	
                USA

              	
                OCCULOGIX

              	
                33479-2018

              	
                2,446,726

              	
                Registered

              	
                Section
                  8/15 Due Date:

                April
                  24, 2007.

                Renewal
                  Due Date:

                April
                  24, 2011.

              	
                Affidavit
                  of Use/Continued Use must be filed by April 24, 2007 otherwise
                  registration will lapse

              
	
                USA

              	
                RHEOPHERESIS

              	
                33479-2019

              	
                2,547,756

              	
                Registered

              	
                Section
                  8/15 Due Date:

                March
                  12, 2008.

                Renewal
                  Due Date:

                March
                  12, 2012.

              	
                Affidavit
                  of Use/Continued Use must be filed by March 12, 2008 otherwise
                  registration will lapse

              
	
                USA

              	
                OCCULOGIX

              	
                33479-2022

              	
                2,511,866

              	
                Registered

              	
                Section
                  8/15 Due Date:

                November
                  27, 2007.

                Renewal
                  Due Date:

                November
                  27, 2011.

              	
                Affidavit
                  of Use/Continued Use must be filed by November 27, 2007 otherwise
                  registration will
                  lapse.EX-10.1

Exhibit No. 10.1

January 31, 2007

Steve Jennings

3114 Scenic Elm

Houston, TX 77059

Dear Steve:

This letter and its enclosures will provide you with important information regarding your recent
resignation from Cyberonics.

	 	•	 	Resignation Date: Your official resignation date will be March 2, 2007 and you
will receive your current base pay through this date. Please note, however, that you will
be relieved of all official duties as of January 31, 2007.

	 	•	 	Separation Pay: On or prior to March 7, 2007, you may elect to receive one of
the following:

	 	 	 	      a lump sum payment equal to 1.5 times the sum of your Base Salary plus
the most recent annual bonus earned; or

	 	 	 	      a lump sum payment equal to 1.5 times the sum of your Base Salary and
immediate vesting of all Options that would become vested in the twelve (12)
months beginning on March 2, 2007.

Please indicate your selection by initialing in the space provided and return this letter to
me no later than March 7, 2007.

	 	•	 	Stock Options: Please note that you must exercise any vested options within
ninety days (90) of your Termination Date (Grant Detail Report is attached). You should
note that the exercise of these options is currently prohibited by the U.S. securities
laws. This prohibition will be lifted when Cyberonics is current on its filings with the
Securities and Exchange Commission. You can contact the Stock Option Call Center at (281)
727-5299 or StockOptions@cyberonics.com for information on how to exercise vested
stock options.  If you are designated as an “Insider” for the purpose of compliance
with the Insider Trading Policy, you will continue to be deemed an Insider as of your
Termination Date. As a result, if Cyberonics has imposed a restriction or prohibition on
trading company shares as of your Termination Date, you must wait until Cyberonics lifts
the current trading restriction or prohibition before you can trade shares of Cyberonics
stock. 

	 	•	 	Health Care Benefits: Your Company-sponsored medical and dental benefits will
continue through the end of March, 2007. This medical benefit includes access to the
Employee Assistance Program. Should you need to contact an EAP representative, you may do
so at 1-888-238-6232.

	 	•	 	Continued Health Care Benefits: You have the right to continue coverage under
COBRA after the end of March, 2007. You will receive information regarding on your right
to extend your benefits under COBRA by separate correspondence.

	 	•	 	Other Benefits: You will find enclosed in this packet information on the other
benefit programs and the effect that your separation may have on your benefits under these
programs.

	 	•	 	Expenses: It remains essential that you timely submit expenses for business
reimbursements. For the next 30 days, you may submit expenses through Concur via their
website — https://my.concureworkplace.com. Cyberonics’ company ID is
cyfy48fzb8recwku. You must also submit the supporting receipts to Accounts Payable.
Please note that expense reports, complete with supporting documentation, must be submitted
within 30 days of the date that such expense is incurred. If you have any questions
regarding reimbursement of your expenses or if you have trouble accessing Concur, please
contact Accounts Payable at (281) 228-7398 or AccountsPayable@cyberonics.com.

	 	•	 	Company Property: You are obligated to return all of the Company’s property
including, but not limited to, all confidential and/or proprietary information, computer
equipment, telephone/Blackberry, literature or materials. These materials must be returned
to the corporate office within five (5) business days.

	 	•	 	Confidentiality Obligations: You are reminded that your Employment Agreement
has extensive covenants regarding confidentiality, trade secrets, proprietary items,
non-competition and non-interference that are valid and remain in effect even after
termination of employment. Please note that Cyberonics will enforce its rights under the
Employment Agreement to the fullest extent allowed by the law.

	 	•	 	Employment Agreement: The compensation and benefits outlined herein are offered
in lieu of those set forth in that certain Employment Agreement dated June 15, 2006 by and
between Cyberonics, Inc. and you.

	 	•	 	Release: By signing in the space provided below and accepting the consideration
set forth herein, you, individually and on behalf of your heirs, executors, administrators,
successors and assigns, hereby fully and finally RELEASES, ACQUITS and FOREVER DISCHARGES
Cyberonics and its officers, directors, shareholders, subsidiaries and other affiliates,
predecessors and successors in interest, agents and representatives, employees and insurers
from all claims, demands, liability and causes of action of whatsoever nature, whether in
contract or tort, whether pursuant to statute or common law including, but not limited to,
the Title VII Discrimination in Employment Act, the Americans With Disabilities Act and the
Age Discrimination in Employment Act, all as amended, and any other applicable federal or
state statutes arising out of or pertaining to your employment with Cyberonics and any of
its predecessors or affiliates.

We would like to thank you for your contributions to the organization and wish you success in your
future endeavors.

Sincerely,

	 	 	/s/ George E. Parker, III

	 	 	George E. Parker, III

Vice President, Human Resources

	 	 	Agreed to this      _6th     day of _February     , 2007.

	 	 	     /s/ Steve Jennings     

	 	 	Steve Jennings

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