Document:

FORM OF FIVE YEAR WARRANT

 Exhibit 10.5 
  
 THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS. THIS WARRANT AND THE COMMON STOCK ISSUABLE UPON EXERCISE OF THIS WARRANT MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT AS TO THIS WARRANT UNDER SAID ACT AND ANY APPLICABLE STATE SECURITIES LAWS OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO ICORIA, INC. THAT SUCH REGISTRATION IS NOT REQUIRED. 
  
 Right to Purchase up to 825,472 in Shares of Common Stock of 
 Icoria, Inc.  
 (subject to adjustment as
provided herein) 
  
 FIVE –YEAR COMMON STOCK PURCHASE
WARRANT 
  

			
	 No.
                                
	 	Issue Date: October 19, 2004

  
 ICORIA, INC., a
corporation organized under the laws of the State of Delaware (“ICOR”), hereby certifies that, for value received, LAURUS MASTER FUND, LTD., or assigns (the “Holder”), is entitled, subject to the terms set forth below, to
purchase from the Company (as defined herein) from and after the Issue Date of this Warrant and at any time or from time to time before 5:00 p.m., New York time, through the close of business October 19, 2009 (the “Expiration Date”), up to
825,472 fully paid and nonassessable shares of Common Stock (as hereinafter defined), $0.01 par value per share, at the applicable Exercise Price per share (as defined below). The number and character of such shares of Common Stock and the
applicable Exercise Price per share are subject to adjustment as provided herein. 
  
 As used herein the following terms, unless the context otherwise requires, have the following respective meanings: 
  
 (a) The term “Company” shall include ICOR and any corporation which shall succeed, or assume the obligations of, ICOR hereunder.

  
 (b) The term “Common Stock”
includes (i) the Company’s Common Stock, par value $0.01 per share; and (ii) any other securities into which or for which any of the securities described in (a) may be converted or exchanged pursuant to a plan of recapitalization,
reorganization, merger, sale of assets or otherwise. 
  
 (c) The term “Other Securities” refers to any stock (other than Common Stock) and other securities of the Company or any other person (corporate or otherwise) which the holder of the Warrant at any time shall be entitled to
receive, or shall have received, on the exercise of the Warrant, in lieu of or in addition to Common Stock, or which at any time shall be issuable or shall have been issued in exchange for or in replacement of Common Stock or Other Securities
pursuant to Section 4 or otherwise. 

 (d) The “Exercise Price” applicable under this Warrant shall be as follows:

  
 (i) a price of $0.85 for the first 412,736
shares acquired hereunder; and 
  
 (ii) a price
of $0.97 for 412,736 shares acquired hereunder. 
  
 1. Exercise
of Warrant. 
  
 1.1 Number of Shares Issuable upon
Exercise. From and after the date hereof through and including the Expiration Date, the Holder shall be entitled to receive, upon exercise of this Warrant in whole or in part, by delivery of an original or fax copy of an exercise notice in the
form attached hereto as Exhibit A (the “Exercise Notice”), shares of Common Stock of the Company, subject to adjustment pursuant to Section 4. 
  
 1.2 Fair Market Value. For purposes hereof, the “Fair Market Value” of a share of Common Stock as of a particular date (the
“Determination Date”) shall mean: 
  
 (a) If the Company’s Common Stock is traded on the American Stock Exchange or another national exchange or is quoted on the National or SmallCap Market of The Nasdaq Stock Market, Inc. (“Nasdaq”), then the closing or last
sale price, respectively, reported for the last business day immediately preceding the Determination Date. 
  
 (b) If the Company’s Common Stock is not traded on the American Stock Exchange or another national exchange or on the Nasdaq but is
traded on the NASD OTC Bulletin Board, then the mean of the average of the closing bid and asked prices reported for the last business day immediately preceding the Determination Date. 
  
 (c) Except as provided in clause (d) below, if the Company’s Common Stock is not publicly traded, then
as the Holder and the Company agree or in the absence of agreement by arbitration in accordance with the rules then in effect of the American Arbitration Association, before a single arbitrator to be chosen from a panel of persons qualified by
education and training to pass on the matter to be decided. 
  
 (d) If the Determination Date is the date of a liquidation, dissolution or winding up, or any event deemed to be a liquidation, dissolution or winding up pursuant to the Company’s charter, then all amounts to be
payable per share to holders of the Common Stock pursuant to the charter in the event of such liquidation, dissolution or winding up, plus all other amounts to be payable per share in respect of the Common Stock in liquidation under the charter,
assuming for the purposes of this clause (d) that all of the shares of Common Stock then issuable upon exercise of the Warrant are outstanding at the Determination Date. 
  
 1.3 Company Acknowledgment. The Company will, at the time of the exercise of the Warrant, upon the request of the
holder hereof acknowledge in writing its continuing obligation to afford to such holder any rights to which such holder shall continue to be entitled after such exercise in accordance with the provisions of this Warrant. If the Holder shall fail to
make any such request, such failure shall not affect the continuing obligation of the Company to afford to such holder any such rights. 
  

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 1.4 Trustee for Warrant Holders. In the event that a bank or trust company shall have been
appointed as trustee for the holders of the Warrant pursuant to Subsection 3.2, such bank or trust company shall have all the powers and duties of a warrant agent (as hereinafter described) and shall accept, in its own name for the account of the
Company or such successor person as may be entitled thereto, all amounts otherwise payable to the Company or such successor, as the case may be, on exercise of this Warrant pursuant to this Section 1. 
  
 2. Procedure for Exercise. 
  
 2.1 Delivery of Stock Certificates, Etc., on Exercise. The Company
agrees that the shares of Common Stock purchased upon exercise of this Warrant shall be deemed to be issued to the Holder as the record owner of such shares as of the close of business on the date on which this Warrant shall have been surrendered
and payment made for such shares in accordance herewith. As soon as practicable after the exercise of this Warrant in full or in part, and in any event within three (3) business days thereafter, the Company at its expense (including the payment by
it of any applicable issue taxes) will cause to be issued in the name of and delivered to the Holder, or as such Holder (upon payment by such Holder of any applicable transfer taxes) may direct in compliance with applicable securities laws, a
certificate or certificates for the number of duly and validly issued, fully paid and nonassessable shares of Common Stock (or Other Securities) to which such Holder shall be entitled on such exercise, plus, any fractional share to which such holder
would otherwise be entitled will be rounded to the nearest one full share and included in the aforementioned certificate or certificates, up to the number of shares available under this Warrant. Holder will also receive any other stock or other
securities and property (including cash, where applicable) to which such Holder is entitled upon such exercise pursuant to Section 1 or otherwise. 
  
 2.2 Exercise. Payment may be made in cash, wire transfer or by certified or official bank check payable to the order of the Company equal to the
applicable aggregate Exercise Price, for the number of Common Shares specified in such Exercise Notice (as such exercise number shall be adjusted to reflect any adjustment in the total number of shares of Common Stock issuable to the Holder per the
terms of this Warrant) and the Holder shall thereupon be entitled to receive the number of duly authorized, validly issued, fully-paid and non-assessable shares of Common Stock (or Other Securities) determined as provided herein. 
  
 3. Effect of Reorganization, Etc.; Adjustment of Exercise Price.

  
 3.1 Reorganization, Consolidation, Merger, Etc. In
case at any time or from time to time, the Company shall (a) effect a reorganization, (b) consolidate with or merge into any other person, or (c) transfer all or substantially all of its properties or assets to any other person under any plan or
arrangement contemplating the dissolution of the Company, then, in each such case, as a condition to the consummation of such a transaction, proper and adequate provision shall be made by the Company whereby the Holder of this Warrant, on the
exercise hereof as provided in Section 1 at any time after the consummation of such reorganization, consolidation or merger or the effective date of such dissolution, as the case may be, shall be 
  

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 permitted to exercise the Warrant as if such exercise occurred previous to the reorganization, consolidation, merger, as
set forth above, and receive the Common Stock (or Other Securities) issuable on such exercise prior to such consummation or such effective date, any other stock and other securities and property (including cash) to which such Common Stock holder
would be entitled, all subject to further adjustment thereafter as provided in Section 4. Further, pursuant to an occurrence or transaction contemplated in this paragraph, the Company may, in its sole discretion, choose to redeem the then
outstanding warrants for cash, rather than allow the warrants to remain outstanding subsequent to any occurrence or transaction contemplated in this paragraph. The cash value of the warrants will be the value of the consideration received by the
Common Stock holders minus the then current exercise price of the warrants. 
  
 3.2 Dissolution. In the event of any dissolution of the Company following the transfer of all or substantially all of its properties or assets, the Company, concurrently with any distributions made to holders
of its Common Stock, shall at its expense deliver or cause to be delivered to the Holder the same distributions made to holders of its Common Stock, pursuant to the exercise mechanism set forth above in Section 3.1, or, if the Holder shall so
instruct the Company, to a bank or trust company specified by the Holder and having its principal office in New York, NY as trustee for the Holder of the Warrant (the “Trustee”). 
  
 3.3 Continuation of Terms. Upon any reorganization, consolidation,
merger or transfer (and any dissolution following any transfer) referred to in this Section 3, this Warrant shall continue in full force and effect and the terms hereof shall be applicable to the shares of stock and other securities and property
receivable on the exercise of this Warrant after the consummation of such reorganization, consolidation or merger or the effective date of dissolution following any such transfer, as the case may be, and shall be binding upon the issuer of any such
stock or other securities, including, in the case of any such transfer, the person acquiring all or substantially all of the properties or assets of the Company, whether or not such person shall have expressly assumed the terms of this Warrant as
provided in Section 4. In the event this Warrant does not continue in full force and effect after the consummation of the transactions described in this Section 3, then the Company’s securities and property (including cash, where applicable)
receivable by the Holders of the Warrant will be delivered to Holder or the Trustee as contemplated by Section 3.2. 
  
 4. Extraordinary Events Regarding Common Stock. In the event that the Company shall (a) issue additional shares of the Common Stock as a dividend
or other distribution on outstanding Common Stock, (b) subdivide its outstanding shares of Common Stock, or (c) combine its outstanding shares of the Common Stock into a smaller number of shares of the Common Stock, then, in each such event, the
Exercise Price shall, simultaneously with the happening of such event, be adjusted by multiplying the then Exercise Price by a fraction, the numerator of which shall be the number of shares of Common Stock outstanding immediately prior to such event
and the denominator of which shall be the number of shares of Common Stock outstanding immediately after such event, and the product so obtained shall thereafter be the Exercise Price then in effect. The Exercise Price, as so adjusted, shall be
readjusted in the same manner upon the happening of any successive event or events described herein in this Section 4. The number of shares of Common Stock that the holder of this Warrant shall 
  

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 thereafter, on the exercise hereof as provided in Section 1, be entitled to receive shall be increased to a number
determined by multiplying the number of shares of Common Stock that would otherwise (but for the provisions of this Section 4) be issuable on such exercise by a fraction of which (a) the numerator is the Exercise Price that would otherwise (but for
the provisions of this Section 4) be in effect, and (b) the denominator is the Exercise Price in effect on the date of such exercise. 
  
 5. Certificate as to Adjustments. In each case of any adjustment or readjustment in the shares of Common Stock (or Other Securities) issuable on
the exercise of the Warrant, the Company at its expense will promptly cause its Chief Financial Officer or other appropriate designee to compute such adjustment or readjustment in accordance with the terms of the Warrant and prepare a certificate
setting forth such adjustment or readjustment and showing in detail the facts upon which such adjustment or readjustment is based, including a statement of (a) the consideration received or receivable by the Company for any additional shares of
Common Stock (or Other Securities) issued or sold or deemed to have been issued or sold, (b) the number of shares of Common Stock (or Other Securities) outstanding or deemed to be outstanding, and (c) the Exercise Price and the number of shares of
Common Stock to be received upon exercise of this Warrant, in effect immediately prior to such adjustment or readjustment and as adjusted or readjusted as provided in this Warrant. The Company will forthwith mail a copy of each such certificate to
the holder of the Warrant and any Warrant agent of the Company (appointed pursuant to Section 11 hereof). 
  
 6. Reservation of Stock, Etc., Issuable on Exercise of Warrant. The Company will at all times reserve and keep available, solely for issuance and
delivery on the exercise of the Warrant, shares of Common Stock (or Other Securities) from time to time issuable on the exercise of the Warrant. 
  
 7. Assignment; Exchange of Warrant. Subject to compliance with applicable securities laws, this Warrant, and the rights evidenced hereby, may be
transferred by any registered holder hereof (a “Transferor”) in whole or in part. On the surrender for exchange of this Warrant, with the Transferor’s endorsement in the form of Exhibit B attached hereto (the “Transferor
Endorsement Form”) and together with evidence reasonably satisfactory to the Company demonstrating compliance with applicable securities laws, which shall include, without limitation, the provision of a legal opinion from the Transferor’s
counsel (at the Company’s expense) that such transfer is exempt from the registration requirements of applicable securities laws, and with payment by the Transferor of any applicable transfer taxes) will issue and deliver to or on the order of
the Transferor thereof a new Warrant of like tenor, in the name of the Transferor and/or the transferee(s) specified in such Transferor Endorsement Form (each a “Transferee”), calling in the aggregate on the face or faces thereof for the
number of shares of Common Stock called for on the face or faces of the Warrant so surrendered by the Transferor. 
  
 8. Replacement of Warrant. On receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this
Warrant and, in the case of any such loss, theft or destruction of this Warrant, on delivery of an indemnity agreement or security reasonably satisfactory in form and amount to the Company or, in the case of any such mutilation, on surrender and
cancellation of this Warrant, the Company at its expense will execute and deliver, in lieu thereof, a new Warrant of like tenor. 
  

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 9. Registration Rights. The Holder of this Warrant has been granted certain registration rights by
the Company. These registration rights are set forth in a Registration Rights Agreement entered into by the Company and Holder dated as of even date of this Warrant. 
  
 10. Maximum Exercise A. Notwithstanding anything contained herein to the contrary, the Holder shall not be entitled
to exercise this Warrant on an exercise date, in connection with that number of shares of Common Stock which would be in excess of the sum of (i) the number of shares of Common Stock beneficially owned by the Holder and its affiliates on an exercise
date, and (ii) the number of shares of Common Stock issuable upon the exercise of this Warrant with respect to which the determination of this proviso is being made on an exercise date, which would result in beneficial ownership by the Holder and
its affiliates of more than 4.99% of the outstanding shares of Common Stock of the Company on such date. For clarity sake, the exercise of this Warrant is subordinated to the conversions under the Secured Convertible Term Note, and so long as the
conversions under the Note are available, no warrants may be exercised and no shares issuable hereunder that will exceed 4.99% of the issued and outstanding shares of the Common Stock of the Company when combined with the Note conversions.

  
 B. Beneficial ownership, as discussed in this paragraph 10,
shall be determined in accordance with Section 13(d) of the Exchange Act and Regulation 13d-3 thereunder. Notwithstanding anything contained herein to the contrary, at no time shall the beneficial ownership exceed 19.99% of the Common Stock.
Notwithstanding anything contained herein to the contrary, the number of shares of Common Stock issuable by the Company and acquirable by the Holder at a price below $0.49 per share pursuant to the terms of this Warrant, the Note made by the Company
to the Holder dated the date hereof (as amended, modified or supplemented from time to time, the “Note”), the Purchase Agreement (as defined in the Note) or any Related Agreement (as defined in the Purchase Agreement), shall not exceed an
aggregate of 7,261,022 shares of the Company’s Common Stock (subject to appropriate adjustment for stock splits, stock dividends, or other similar recapitalizations affecting the Common Stock) (the “Maximum Common Stock
Issuance”), unless the issuance of shares hereunder in excess of the Maximum Common Stock Issuance shall first be approved by the Company’s shareholders. If at any point in time and from time to time the number of shares of Common
Stock issued pursuant to the terms of this Warrant, the Note, the Purchase Agreement or any Related Agreement, together with the number of shares of Common Stock that would then be issuable by the Company to the Holder in the event of a conversion
or exercise pursuant to the terms of this Warrant, the Note, the Purchase Agreement or any Related Agreement, would exceed the Maximum Common Stock Issuance but for this paragraph the Holder’s actions shall be stayed, and, the Company shall
promptly within ninety (90) days call a shareholders meeting to solicit shareholder approval for the issuance of the shares of Common Stock hereunder in excess of the Maximum Common Stock Issuance. 
  
 11. Warrant Agent. The Company may, by written notice to the each
Holder of the Warrant, appoint an agent for the purpose of issuing Common Stock (or Other Securities) on the 
  

 6 

 exercise of this Warrant pursuant to Section 1, exchanging this Warrant pursuant to Section 7, and replacing this Warrant
pursuant to Section 8, or any of the foregoing, and thereafter any such issuance, exchange or replacement, as the case may be, shall be made at such office by such agent. 
  
 12. Transfer on the Company’s Books. Until this Warrant is transferred on the books of the Company, the Company
may treat the registered holder hereof as the absolute owner hereof for all purposes, notwithstanding any notice to the contrary. 
  
 13. Notices, Etc. All notices and other communications from the Company to the Holder of this Warrant shall be mailed by first class registered or
certified mail, postage prepaid, sent by overnight courier, communicated through a facsimile transmission, at such address, or facsimile transmission number, as may have been furnished to the Company in writing by such Holder or, until any such
Holder furnishes to the Company an address, then to, and at the address of, the last Holder of this Warrant who has so furnished an address to the Company. 
  
 14. Miscellaneous. This Warrant and any term hereof may be changed, waived, discharged or terminated only by an instrument in writing signed by the
party against which enforcement of such change, waiver, discharge or termination is sought. This Warrant shall be governed by and construed in accordance with the laws of State of New York without regard to principles of conflicts of laws. Any
action brought concerning the transactions contemplated by this Warrant shall be brought only in the state courts of New York or in the federal courts located in the state of New York; provided, however, that the Holder may choose to waive this
provision and bring an action outside the state of New York. The individuals executing this Warrant on behalf of the Company agree to submit to the jurisdiction of such courts and waive trial by jury. The prevailing party shall be entitled to
recover from the other party its reasonable attorney’s fees and costs. In the event that any provision of this Warrant is invalid or unenforceable under any applicable statute or rule of law, then such provision shall be deemed inoperative to
the extent that it may conflict therewith and shall be deemed modified to conform with such statute or rule of law. Any such provision which may prove invalid or unenforceable under any law shall not affect the validity or enforceability of any
other provision of this Warrant. The headings in this Warrant are for purposes of reference only, and shall not limit or otherwise affect any of the terms hereof. The invalidity or unenforceability of any provision hereof shall in no way affect the
validity or enforceability of any other provision hereof. The Company acknowledges that legal counsel participated in the preparation of this Warrant and, therefore, stipulates that the rule of construction that ambiguities are to be resolved
against the drafting party shall not be applied in the interpretation of this Warrant to favor any party against the other party. 
  
 [BALANCE OF PAGE INTENTIONALLY LEFT BLANK; 
 SIGNATURE PAGE FOLLOWS.] 
  

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 IN WITNESS WHEREOF, the Company has executed this Warrant as of the date first written above. 

 

					
	 	 	 ICORIA, INC.

	 WITNESS:
	 	 	 	 
	 	 	 By:
	 	  

	 	 	 Name:
	 	  

	
	 	 Title:
	 	  

  

 8 

 EXHIBIT A 
  

FORM OF SUBSCRIPTION 
 (To Be Signed
Only On Exercise Of Warrant) 
  
 TO: ICORIA, INC.

  
 Attention: Barry Buzogany, General Counsel 
  
 The undersigned, pursuant to the provisions set forth in the attached Warrant
(No.            ), hereby irrevocably elects to purchase (check applicable box): 
  
                                  shares of the Common Stock
covered by such Warrant 
  
 _____ 
  
  
 The undersigned herewith makes payment of the full Exercise Price for such shares at the price per share provided for in such Warrant, which is
$                . Such payment takes the form of (check applicable box or boxes): 
  
                     $                 in
lawful money of the United States 
  
 _____ 
  
  
 _____

  
  
  
 The undersigned requests that the certificates for such shares be issued in the name of, and delivered to
                                        
                                     whose address is
                                        
                                        
                            . 
  
 The undersigned represents and warrants that all offers and sales by the undersigned of the securities issuable upon
exercise of the within Warrant shall be made pursuant to registration of the Common Stock under the Securities Act of 1933, as amended (the “Securities Act”) or pursuant to an exemption from registration under the Securities Act.

  

					
	Dated:                     	  	  

	 	  	(Signature must conform to name of holder as
specified on the face of the Warrant)
			
	 	  	Address:	 	  

	 	  	 	 	  

  

 A-1 

 EXHIBIT B 
  

FORM OF TRANSFEROR ENDORSEMENT 
 (To
Be Signed Only On Transfer Of Warrant) 
  
 For value received, the
undersigned hereby sells, assigns, and transfers unto the person(s) named below under the heading “Transferees” the right represented by the within Warrant to purchase the percentage and number of shares of Common Stock of Icoria, Inc.
into which the within Warrant relates specified under the headings “Percentage Transferred” and “Number Transferred,” respectively, opposite the name(s) of such person(s) and appoints each such person Attorney to transfer its
respective right on the books of Icoria, Inc. with full power of substitution in the premises. 
  

							
	 Transferees

	 	 Address

	 	 Percentage
 Transferred

	 	 Number
 Transferred

				
	__________________	 	__________________	 	__________________	 	__________________
				
	__________________	 	__________________	 	__________________	 	__________________
				
	__________________	 	__________________	 	__________________	 	__________________
				
	__________________	 	__________________	 	__________________	 	__________________

  
  

					
	Dated:                     	 	  

	 	 	(Signature must conform to name of holder as
specified on the face of the Warrant)
			
	 	 	Address:	 	  

	 	 	 	 	  

  

					
	 	 	SIGNED IN THE PRESENCE OF:
	 	 	  

	  	 
	 	 	                                    (Name)	  	 
			
	ACCEPTED AND AGREED:	 	 	  	 
	[TRANSFEREE]	 	 	  	 
	  

	 	 	  	 
	(Name)	 	 	  	 

  

 B-1PLACEMENT AGENCY AGREEMENT

 Exhibit 10.6 
  
 PLACEMENT AGENCY AGREEMENT 
  
 THIS PLACEMENT AGENCY AGREEMENT (this “Agreement”) is made and entered into as of July 14, 2004 (the “Effective Date”), by and
between Paradigm Genetics, Inc., a Delaware corporation (the “Company”), and Stonegate Securities, Inc., a Texas corporation (“Stonegate”). 
  

WHEREAS, subject to the terms and conditions set forth herein, the Company desires to retain Stonegate as its non-exclusive placement agent, and
Stonegate is willing to act in such capacity, in each case subject to the terms and conditions of this Agreement. 
  
 NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained, the Company and Stonegate (each a “Party” and
collectively, the “Parties”) hereby agree as follows: 
  

	1.	RETENTION OF STONEGATE; SCOPE OF SERVICES 

  

	 	(a)	Subject to the terms and conditions set forth herein, the Company hereby retains Stonegate to act as the non-exclusive placement agent to the Company during the Contract Period (as
defined in Section 2 below), and Stonegate hereby agrees to be so retained. 

  

	 	(b)	As the non-exclusive placement agent to the Company, Stonegate will have the non-exclusive right during the Contract Period to identify for the Company prospective purchasers
(collectively, the “Purchasers” and each individually, a “Purchaser”) in one or more placement (each, a “Placement” and collectively, the “Placements”) of debt and/or equity securities to be issued by the
Company, the type and dollar amount being as mutually agreed to by the Parties (the “Securities”). 

  

	 	(c)	Terms of the Placements shall be as set forth in subscription documents, including any stock purchase or subscription agreement, escrow agreement, registration rights agreement,
warrant agreement and/or other documents to be executed and delivered in connection with each Placement (collectively, the “Subscription Documents”). The Placements are intended to be exempt from the registration requirements of the
Securities Act of 1933, as amended (the “Securities Act”), pursuant to Regulation D (“Regulation D”) of the rules and regulations of the Securities and Exchange Commission (the “SEC’) promulgated under the Securities
Act. 

  

	 	(d)	Stonegate will act on a best efforts basis and will have no obligation to purchase any of the Securities offered in any Placement. During the Contract Period (as defined below),
subject to Section 6(a) below, Stonegate shall have-the non-exclusive right to arrange for all sales of Securities in the Placements, including 

  

 without limitation the non-exclusive right to identify potential buyers for the Securities. Subject to
Section 6(a) below, all sales of Securities (as defined below) in the Placements shall be subject to the approval of the Company, which approval may be withheld by the Company for any reason and/or no reason. 
  

	2.	CONTRACT PERIOD AND TERMINATION 

  

	 	(a)	Subject to Section 6(a) below, Stonegate shall act as the Company’s non-exclusive placement agent under this Agreement for a period commencing on the Effective Date, and
continuing until the earlier to occur of (i) termination by either Party upon ten (10) days’ prior written notice to the other Party, or (ii) December 31, 2004, unless extended by the Parties in writing (the “Contract Period”).

  

	 	(b)	Upon expiration of the Contract Period or termination, neither party will have any further obligation under this Agreement except as provided in Sections 5, 6, 7, 8, 9 and 10
hereof. 

  

	3.	REPRESENTATIONS AND WARRANTIES OF THE COMPANY 

  

	 	(a)	The representations and warranties of the Company made to the Purchasers as set forth in the Subscription Documents are hereby incorporated by reference as of the date of
consummation of the sale of the Securities (the “Closing’) and all such representations and warranties are hereby deemed made by the Company directly to Stonegate as though set forth in full herein. The Company represents and warrants to
Stonegate that (i) it has full power and authority to enter into this Agreement and to perform its obligations hereunder, (ii) this Agreement is enforceable against the Company in accordance with its terms, subject to applicable laws governing
bankruptcy, insolvency and creditors’ rights generally, and (iii) this Agreement does not conflict with, violate, cause a default, right of termination, or acceleration (whether through the passage of time or otherwise) under any contract,
agreement, or understanding binding upon the Company or any subsidiary of the Company. 

  

	4.	COVENANTS OF THE COMPANY 

  
 The Company covenants and agrees as follows: 
  

	 	(a)	Neither the Company nor any affiliate of the Company (as defined in Rule 501(b) of Regulation D) will sell, offer for sale or solicit offers to buy or otherwise negotiate in respect
of any security (as defined in the Securities Act) of the Company which will be integrated with the sale of the Securities in a manner which would require the registration under the Securities Act of the Securities. 

  

	 	(b)	Any and all filings and documents required to be filed in connection with or as a result of the Placements pursuant to federal and state securities laws are the responsibility of
the Company and will be filed by the Company. 

  

 Placement Agency Agreement paradigm genetics Final Execution 

	 	(c)	Any press release to be issued by the Company announcing or referring to any Placement shall be subject to the prior review of Stonegate, and each such press release shall, subject
to applicable law and regulations, at the request of Stonegate, identify Stonegate as the placement agent Stonegate shall be permitted to publish a tombstone or similar advertisement upon completion of each Placement identifying itself as the
Company’s placement agent with respect thereto. This Agreement shall not be filed publicly by the Company without the prior written consent of Stonegate, unless required by applicable law or regulation. 

  

	5.	FURNISHING OF COMPANY INFORMATION; CONFIDENTIALITY 

  

	 	(a)	In connection with Stonegate’s activities hereunder on the Company’s behalf, the Company shall furnish Stonegate with all reasonable information concerning the Company and
its operations that Stonegate deems necessary or appropriate (the “Company Information”) and shall provide Stonegate with reasonable access to the Company’s books, records, officers, directors, employees, accountants and counsel. The
Company acknowledges and agrees that, in rendering its services hereunder, Stonegate will be using and relying upon the Company Information without independent verification thereof or independent appraisal of any of the Company’s assets and
may, in its sole discretion, use additional information contained in public reports or other information furnished by the Company or third parties. 

  

	 	(b)	Stonegate agrees that the Company Information will be used solely for the purpose of performing its services hereunder. Subject to the limitations set forth in subsection (c) below,
Stonegate will keep the Company Information provided hereunder confidential and will not disclose such Company Information or any portion thereof, except (i) to a third party contacted by Stonegate on behalf of, and with the prior approval of, the
Company pursuant hereto who has agreed to be bound by a confidentiality agreement satisfactory in form and substance to the Company, or (ii) to any other person for which the Company’s consent to disclose such Company Information has been
obtained. 

  

	 	(c)	Stonegate’s confidentiality obligations under this Agreement shall not apply to any portion of the Company Information which (i) at the time of disclosure to Stonegate or
thereafter is generally available to and known by the public (other than as a result of a disclosure directly or indirectly by Stonegate in violation of this Agreement); (ii) was available to Stonegate on a non-confidential basis from a source other
than the Company, provided that such source is not and was not bound by a confidentiality agreement with the Company; (iii) has been independently acquired or developed by Stonegate without violating any of its 

  

 Placement Agency Agreement paradigm genetics Final Execution 

 obligations under this Agreement; or (iv) the disclosure of which is legally compelled (whether by
deposition, interrogatory, request for documents, subpoena, civil or administrative investigative demand or other similar process). In the event that Stonegate becomes legally compelled to disclose any of the Company Information, Stonegate shall
provide the Company with prompt prior written notice of such requirement so that the Company may seek a protective order or other appropriate remedy and/or waive compliance with the terms of this Agreement. 
  

	 	(d)	The obligations of the Parties under this Section 5 shall survive the termination or expiration of this Agreement for three (3) years. 

  

	6.	FEES AND EXPENSES 

  

	 	(a)	As compensation for services rendered by Stonegate in connection with the Placements, the Company agrees to pay Stonegate a fee (the “Agency Fee”) of: (i) seven (7%)
percent of the gross proceeds from the sale of Securities for the first Ten Million ($10,000,000) Dollars of Securities sold in the Placements (on a cumulative basis); and (ii) six (6%) percent of the gross proceeds from the sale of Securities for
any Securities sold in the Placements in excess of Ten Million ($10,000,000) Dollars (on a cumulative basis); provided, however, that in the event that the Company desires to include any Purchasers in the Placement(s) identified on Schedule I
attached hereto which were previously contacted by Needham & Company, Inc. (the “Prior Company Contacts”), then the total Agency Fee payable to Stonegate will be reduced by the amount of any agency fees payable to Needham &
Company, Inc. Notwithstanding the foregoing, the minimum Agency Fee payable to Stonegate for the Placement(s) shall not be less than five (5%) percent of the gross proceeds from the sale of Securities sold in such Placements (on a cumulative basis)
(the “Minimum Agency Fee”). The Agency Fee shall be paid immediately upon the closing of each sale of Securities by the Company; provided, however, that if the Agency Fee paid after all closings does not equal the Minimum Agency Fee, the
difference between the Minimum Agency Fee and the Agency Fee shall be paid upon the final closing. 

  

	 	(b)	The Company shall promptly reimburse Stonegate for all reasonable out-of-pocket expenses incurred by Stonegate and its directors, officers and employees in connection with the
performance of Stonegate’s services under this Agreement, such expenses not to exceed $25,000 without the prior written consent of the Company. For these purposes, “out-of-pocket expenses” shall include, but not be limited to,
attorneys’ fees and costs, long distance telephone, courier, travel and similar expenses. 

  

	 	(c)	Upon execution of this Agreement by the Parties, the Company agrees to issue to Stonegate (or its affiliates) warrants substantially in the form attached hereto as Exhibits A1 and
A2 (the “Initial Warrants”). 

  

 Placement Agency Agreement paradigm genetics Final Execution 

	 	(d)	Subject to Section 6(a) above, upon each closing of the Placements, the Company agrees to issue to Stonegate a Securities Purchase Warrant (the “Representative’s
Warrant”) entitling the holder(s) thereof to purchase an amount of Securities equal to ten (10%) percent of the total number of Securities sold in the Placement(s) less the number of shares of Common Stock underlying the Initial Warrants (or in
the case of a Placement of convertible debt, an amount of Securities equal to ten (10%) percent of the total number of Securities into which the convertible debt sold in the Placement(s) is convertible less the number of shares of Common Stock
underlying the Initial Warrants); provided, however, in the event that any of the Purchasers in the Placement are Prior Company Contacts, the amount of the Representative’s Warrant shall, in addition to any reduction for the Initial Warrants,
be reduced by the total amount of warrant coverage payable to Needham & Company, Inc. Notwithstanding the foregoing, the minimum number of Securities issuable Stonegate pursuant to the Representative’s Warrant and the Initial Warrants,
taken together, for the Placement(s) shall not be less than eight (8%) percent of the total number of Securities sold in the Placement(s) (on a cumulative basis), or, in the case of convertible debt, eight (8%) percent of the total number of
Securities into which the convertible debt sold in the Placement(s) is convertible (the “Minimum Warrant Coverage”). The Representative’s Warrant shall be for a period of five (5) years, have an exercise price per share equal to the
price at which the Securities are sold to Purchasers (or in the case of convertible debt, the price at which the convertible debt is convertible into Securities) in the applicable Placement and shall otherwise be substantially in the form of Exhibit
B attached hereto. The Representative’s Warrant shall be issued immediately upon the closing of each sale of Securities by the Company to the extent it exceeds the amount of the Initial Warrants; provided, however, that if the
Representative’s Warrant and the Initial Warrants do not equal the Minimum Warrant Coverage after all closings, the deficiency in the Minimum Warrant Coverage shall be paid upon the final closing. 

  

	 	(e)	Subject to any conditions and/or exceptions provided elsewhere herein, the obligations of the Parties under this Section 6 shall survive the termination or expiration of this
Agreement for any reason. 

  

	7.	INDEMNIFICATION 

  

	 	(a)	The Company agrees to indemnify and hold Stonegate harmless from and against any and all losses, claims, damages or liabilities (or actions, including securityholder actions, in
respect thereof) related to or arising out of Stonegate’s engagement hereunder or its role in connection herewith, and will reimburse Stonegate for all reasonable expenses (including reasonable costs, expenses, awards and counsel fees and/or
judgments) as they are incurred by Stonegate in connection with investigating, preparing for or defending any such action or claim, whether or not in connection with pending or threatened litigation in which 

  

 Placement Agency Agreement paradigm genetics Final Execution 

 Stonegate is a party. The Company will not, however, be responsible for any claims, liabilities, losses,
damages or expenses which are finally judicially determined to have resulted primarily from the bad faith, gross negligence or willful misconduct of Stonegate (a “Non-Indemnified Claim”). In this regard, Stonegate shall reimburse the
Company for any payments made herein for a Non-Indemnified Claim. The Company also agrees that Stonegate shall not have any liability to the Company for or in connection with such engagement, except for any such liability for losses, claims,
damages, liabilities or expenses incurred by the Company that result from the bad faith, gross negligence or willful misconduct of Stonegate and/or any of its affiliates, agents and/or representatives. In the event that the foregoing indemnity is
unavailable except by reason of the bad faith, willful misconduct, or gross negligence of Stonegate, then the Company shall contribute to amounts paid or payable by Stonegate in respect of its losses, claims, damages and liabilities in such
proportion as appropriately reflects the relative benefits received by, and fault of, the Company and Stonegate in connection with the matters as to which such losses, claims, damages or liabilities relate, and other equitable considerations. The
foregoing shall be in addition to any rights that Stonegate may have at common law or otherwise and shall extend upon the same terms to and inure to the benefit of any director, officer, employee, agent or controlling person of Stonegate.

  

	 	(b)	Stonegate agrees to indemnify and hold the Company harmless from and against any and all losses, claims, damages or liabilities (or actions, including securityholder actions, in
respect thereof) which are finally judicially determined to have resulted primarily from the bad faith, gross negligence or willful misconduct of Stonegate, and will reimburse the Company for all reasonable expenses (including reasonable costs,
expenses, awards and counsel fees and/or judgments) as they are incurred by the Company in connection with investigating, preparing for or defending any such action or claim, whether or not in connection with pending or threatened litigation in
which the Company is a party. In the event that the foregoing indemnity is unavailable, then Stonegate shall contribute to amounts paid or payable by the Company in respect of its losses, claims, damages and liabilities in such proportion as
appropriately reflects the relative benefits received by, and fault of, the Company and Stonegate in connection with the matters as to which such losses, claims, damages or liabilities relate, and other equitable considerations. The foregoing shall
be in addition to any rights that the Company may have at common law or otherwise and shall extend upon the same terms to and inure to the benefit of any director, officer, employee, agent or controlling person of the Company.

  

	 	(c)	The obligations of the Parties under this Section 7 shall survive the termination of or expiration of this Agreement. 

  

 Placement Agency Agreement paradigm genetics Final Execution 

	8.	POST-TERMINATION AGREEMENT 

  
 If the Company enters into any agreement, transaction or arrangement with any of the institutions (including their agents, principals and affiliates and
the accounts and funds which they manage or advise) which Stonegate has introduced to the Company as prospective purchasers of the Securities in the Placements pursuant to face to face meetings, conference calls or video conferences (collectively,
the “Stonegate Contacts”), regardless of whether a transaction is consummated with such prospective purchasers, the Company shall notify Stonegate in writing of the agreement, transaction or arrangement, and pay Stonegate a fee equal to
(i) one hundred percent (100%) of the Agency Fee and Representative’s Warrant for securities of the Company sold to Stonegate Contacts (subject to any offsets payable to Needham & Company, Inc. as set forth above) within the first six (6)
months following termination of this Agreement and (ii) fifty percent (50%) of the Agency Fee and Representative’s Warrant for securities of the Company sold to Stonegate Contacts (subject to any offsets payable to Needham & Company, Inc.
as set forth above) within the period beginning (6) months following termination of this Agreement and ending twelve (12) months following termination of this Agreement. Upon the termination or expiration of this Agreement, Stonegate and the Company
shall in good faith prepare a list of each Stonegate Contact to which this Section 8 is applicable. The Company shall only have obligations under this Section 8 with respect to those persons identified on such list. 
  

	9.	GOVERNING LAW 

  
 THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF DELAWARE, WITHOUT GIVING EFFECT TO ANY CONFLICT OF LAWS
PROVISIONS THEREOF. 
  

	10.	ARBITRATION 

  
 Stonegate and the Company will attempt to settle any claim or controversy arising out of this Agreement through consultation and negotiation in good faith
and a spirit of mutual cooperation. Any dispute which the parties cannot resolve may then be submitted by either party to binding arbitration under the rules of the American Arbitration Association for resolution. Nothing in this paragraph will
prevent either party from resorting to judicial proceedings if (a) good faith efforts to resolve the dispute under these procedures have been unsuccessful or (b) interim relief from a court is necessary to prevent serious and irreparable injury.

  

	11.	NO WAIVER 

  
 The failure or neglect of any party hereto to insist, in any one or more instances, upon the strict performance of any of the terms or conditions of this
Agreement, or waiver by any party of strict performance of any of the terms or conditions of this Agreement, shall not be construed as a waiver or relinquishment in the future of such term or condition, but the same shall continue in full force and
effect. 
  

 Placement Agency Agreement paradigm genetics Final Execution 

	12.	SUCCESSORS AND ASSIGNS 

  
 The benefits of this Agreement shall inure to the benefit of the Parties, their respective successors, assigns and representatives, and the obligations
and liabilities assumed in this Agreement by the Parties shall be binding upon their respective successors and assigns. Neither this Agreement nor any obligation hereunder may be assigned by either Party without the express written consent of the
other Party. 
  

	13.	NOTICES 

  
 All notices and other communications required or permitted to be given under this Agreement shall be in writing and shall be delivered (a) by certified
mall, return receipt requested, by facsimile transmission, or recognized overnight delivery service with an acceptance receipt, as follows: 
  
 If to the Company: 
  
 Paradigm Genetics, Inc. 
 108 Alexander Drive

 Research Triangle Park 
 North
Carolina, 27709 
 Attention:     Mr. J. Barry Buzogany, Esq. 
 Telephone:     (919) 425-3000 
 Facsimile:     (919) 425-2915 
  
 If to Stonegate: 
  
 Stonegate Securities, Inc.

 5950 Sherry Lane, Suite 410 
 Dallas, Texas 75225 
 Attention:     Mr. Scott Griffith, President 
 Telephone:     (214) 987-4121 
 Facsimile:     (214) 987-1981 
  
 Either Party may change its address or facsimile number set forth above by giving the other Party notice of such change in accordance with the provisions of this Section 13. A notice shall be deemed given (a) if by certified mail, on the
date shown on the applicable return receipt, (b) if by facsimile, upon electronic confirmation of the transmission thereof, or (c) if by overnight delivery service, on the day of receipt as evidenced by a receipt. 
  

	14.	NATURE OF RELATIONSHIP 

  
 The Parties intend that Stonegate’s relationship to the Company and the relationship of each director, officer, employee or agent of Stonegate to the
Company shall be that of an 
  

 Placement Agency Agreement paradigm genetics Final Execution 

 independent contractor and not as an employee of the Company or an affiliate thereof. Nothing contained
in this Agreement shall constitute or be construed to be or create a partnership or joint venture between Stonegate and the Company or their respective successors or assigns. Neither Stonegate nor any director, officer, employee or agent of
Stonegate shall be considered to be an employee of the Company by virtue of the services provided hereunder. 
  

	15.	MISCELLANEOUS 

  
 Stonegate’s obligations under this Agreement are subject to the following general conditions: 
  

	 	(a)	All relevant terms, conditions, and circumstances relating to the Placements will be reasonably satisfactory to Stonegate and its counsel; 

  

	 	(b)	Stonegate reserves the right to solicit the assistance of outside dealers (“Dealers”) to assist in the offer and sale of the Placements with the prior written consent of
the Company; provided, however, that any such Dealers agree in writing to be bound by the terms of the applicable Placement, including the indemnification provisions of this Agreement. It is understood that Stonegate, in its sole discretion, shall
be entitled to pay over to any such Dealers any portion of the compensation received by Stonegate hereunder. The Company shall have no financial liability for any fees or expenses of any such Dealers. 

  

	16.	CAPTIONS 

  
 The Section titles herein are for reference purposes only and do not control or affect the meaning or interpretation of any term or provision hereof.

  

	17.	AMENDMENTS 

  
 No alteration, amendment, change or addition hereto shall be binding or effective unless the same is set forth in a writing signed by a duly authorized
representative of each Party. 
  

	18.	PARTIAL INVALIDITY 

  
 If it is finally determined that any term or provision hereof is invalid or unenforceable, (a) the remaining terms and provisions hereof shall be
unimpaired, and (b) the invalid or unenforceable term or provision shall be replaced by a term or provision that is valid and enforceable and that comes as close as possible to expressing the intention of the invalid or unenforceable term or
provision. 
  

	19.	ENTIRE AGREEMENT 

  
 This Agreement embodies the entire agreement and understanding of the Parties and supersedes any and all prior agreements, arrangements and understandings
relating to the matters provided for herein. 
  

 Placement Agency Agreement paradigm genetics Final Execution 

	20.	COUNTERPARTS 

  
 This Agreement may be executed in one or more counterparts, each of which shall be an original, but all of which together shall be considered one and the
same agreement 
  
 [Remainder of page intentionally left blank]

  

 Placement Agency Agreement paradigm genetics Final Execution 

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

			
	PARADIGM GENETICS, INC.
		
	By:	 	 /s/ Philip R. Alfano

	Name:	 	 Philip R. Alfano

	Title:	 	 Vice President, Finance and CFO

	
	STONEGATE SECURITIES, INC.
		
	By:	 	 /s/ J. B. Shelmire

	Name:	 	 J. B. Shelmire

	Title:	 	 Partner

  

 Placement Agency Agreement paradigm genetics Final Execution 

 Schedule I 
  
 Prior Company Contacts 
  
 Bluegrass Growth Fund 
 China Development and Industrial Bank 
 HBK Investments 
 Heights Capital 
 Midsummer Capital 
 Omicron Capital 
 OrbiMed Advisors 
 Pequot Capital 
 ProMed Management 
 RAM Capital Resources 
 Royce & Associates 
 SF Capital 
 Special Situations Fund 
 Strauss Asset Management 
 Titan Capital Management 
 Vertical Ventures 
 WPG Farber Fund 
  

 Placement Agency Agreement paradigm genetics Final Execution

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