Document:

Exhibit
        10.1 

       

      STANDBY
        EQUITY DISTRIBUTION AGREEMENT

       

      THIS
        AGREEMENT
        dated as
        of the 28th day of September 2005 (the “Agreement”)
        between CORNELL
        CAPITAL PARTNERS, LP,
        a
        Delaware limited partnership (the “Investor”),
        and
TITAN
        PHARMACEUTICALS, INC.,
        a
        corporation organized and existing under the laws of the State of Delaware
        (the
“Company”).

       

      WHEREAS,
        the
        parties desire that, upon the terms and subject to the conditions contained
        herein, the Company shall issue and sell to the Investor, from time to time
        as
        provided herein, and the Investor shall purchase from the Company up to Thirty
        Five Million Dollars ($35,000,000) of the Company’s common stock, par value
        $0.001 per share (the “Common
        Stock”)
        over
        the course of twenty-four (24) months after a registration statement for
        such
        shares of Common Stock becomes effective; and

       

      WHEREAS,
        such
        investments will be made in reliance upon the provisions of Regulation D
        (“Regulation
        D”)
        of the
        Securities Act of 1933, as amended, and the regulations promulgated thereunder
        (the “Securities
        Act”),
        and
        or upon such other exemption from the registration requirements of the
        Securities Act as may be available with respect to any or all of the investments
        to be made hereunder.

       

      WHEREAS,
        the
        Company has engaged Monitor Capital, Inc. (the “Placement
        Agent”),
        to
        act as the Company’s exclusive placement agent in connection with the sale of
        the Company’s Common Stock to the Investor hereunder pursuant to the Placement
        Agent Agreement dated the date hereof by and among the Company, the Placement
        Agent and the Investor (the “Placement
        Agent Agreement”).

       

      NOW,
        THEREFORE,
        the
        parties hereto agree as follows:

       

      ARTICLE
        I.

      Certain
        Definitions

       

      Section
        1.1. “Advance”
        shall
        mean the portion of the Commitment Amount requested by the Company in the
        Advance Notice.

       

      Section
        1.2. “Advance
        Date”
        shall
        mean the first (1st)
        Trading
        Day after expiration of the applicable Pricing Period for each
        Advance.

       

      Section
        1.3. “Advance
        Notice”
        shall
        mean a written notice to the Investor setting forth the Advance amount that
        the
        Company requests from the Investor and the Advance Date.

       

      Section
        1.4. “Advance
        Notice Date”
        shall
        mean each date the Company delivers (in accordance with Section 2.2(b) of
        this
        Agreement) to the Investor an Advance Notice requiring the Investor to advance
        funds to the Company, subject to the terms of this Agreement. No Advance
        Notice
        Date shall be less than five (5) Trading Days after the prior Advance Notice
        Date.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      Section
        1.5. “Bid
        Price”
        shall
        mean, on any date, the closing bid price (as reported by Bloomberg L.P.)
        of the
        Common Stock on the Principal Market or if the Common Stock is not traded
        on a
        Principal Market, the highest reported bid price for the Common Stock, as
        furnished by the National Association of Securities Dealers, Inc.

       

      Section
        1.6. “Closing”
        shall
        mean one of the closings of a purchase and sale of Common Stock pursuant
        to
        Section 2.3.

       

      Section
        1.7. “Commitment
        Amount”
        shall
        mean the aggregate amount of up to Thirty Five Million
        Dollars ($35,000,000) which the Investor has agreed to provide to
        the
        Company in order to purchase the Company’s Common Stock pursuant to the terms
        and conditions of this Agreement, provided
        that the
        Company shall not have the right to request an Advance if the issuance of
        the
        full number of shares of Common Stock issuable in connection with such Advance
        would, together with all shares of Common Stock previously issued under this
        Agreement, exceed 6,475,287 shares of Common Stock (which is no more than
        19.99%
        of the 32,392,635 outstanding shares of Common Stock as of the date of this
        Agreement) unless the necessary shareholder approval or consent has been
        received prior to such request.

       

      Section
        1.8. “Commitment
        Period”
        shall
        mean the period commencing on the earlier to occur of (i) the Effective Date,
        or
        (ii) such earlier date as the Company and the Investor may mutually agree
        in
        writing, and expiring on the earliest to occur of (x) the date on which the
        Investor shall have made payment of Advances pursuant to this Agreement in
        the
        aggregate amount of Thirty Five Million Dollars ($35,000,000), (y)
        the date
        this Agreement is terminated pursuant to Section 2.4, or (z) the date occurring
        twenty-four (24) months after the Effective Date.

       

      Section
        1.9. “Common
        Stock”
        shall
        mean the Company’s common stock, par value $0.001 per share.

       

      Section
        1.10. “Condition
        Satisfaction Date”
        shall
        have the meaning set forth in Section 7.2.

       

      Section
        1.11. “Damages”
        shall
        mean any loss, claim, damage, liability, costs and expenses (including, without
        limitation, reasonable attorney’s fees and disbursements and costs and expenses
        of expert witnesses and investigation).

       

      Section
        1.12. “Effective
        Date”
        shall
        mean the date on which the SEC first declares effective a Registration Statement
        registering the resale of the Registrable Securities as set forth in Section
        7.2(a). 

       

      Section
        1.13. Intentionally
        Omitted

       

      Section
        1.14. “Exchange
        Act”
        shall
        mean the Securities Exchange Act of 1934, as amended, and the rules and
        regulations promulgated thereunder.

       

      Section
        1.15. “Material
        Adverse Effect”
        shall
        mean any condition, circumstance, or situation that would prohibit or otherwise
        materially interfere with the ability of the Company to enter into and perform
        any of its obligations under this Agreement or the Registration Rights Agreement
        in any material respect.

       

      
        
          
          

        

        
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      Section
        1.16. “Market
        Price”
        shall
        mean the lowest daily VWAP of the Common Stock during the Pricing
        Period.

       

      Section
        1.17. “Maximum
        Advance Amount”
        shall
        be Two Million Dollars ($2,000,000) per Advance Notice, subject to
        the
        limitations set forth in Section 1.7 of this Agreement. 

       

      Section
        1.18. “NASD”
        shall
        mean the National Association of Securities Dealers, Inc.

       

      Section
        1.19. “Person”
        shall
        mean an individual, a corporation, a partnership, an association, a trust
        or
        other entity or organization, including a government or political subdivision
        or
        an agency or instrumentality thereof.

       

      Section
        1.20. “Placement
        Agent”
        shall
        mean Monitor Capital, Inc., a registered broker-dealer.

       

      Section
        1.21. “Pricing
        Period”
        shall
        mean the five (5) consecutive Trading Days after the Advance Notice
        Date.

       

      Section
        1.22. “Principal
        Market”
        shall
        mean the Nasdaq National Market, the Nasdaq SmallCap Market, the American
        Stock
        Exchange, the OTC Bulletin Board or the New York Stock Exchange, whichever
        is at
        the time the principal trading exchange or market for the Common
        Stock.

       

      Section
        1.23. “Purchase
        Price”
        shall
        be set at one hundred percent (100%) of the Market Price during the Pricing
        Period.

       

      Section
        1.24. “Registrable
        Securities”
        shall
        mean the shares of Common Stock to be issued hereunder (i)
        in
        respect of which the Registration Statement has not been declared effective
        by
        the SEC, (ii) which have not been sold under circumstances meeting all of
        the
        applicable conditions of Rule 144 (or any similar provision then in force)
        under
        the Securities Act (“Rule
        144”)
        or
        (iii) which have not been otherwise transferred to a holder who may trade
        such
        shares without restriction under the Securities Act, and the Company has
        delivered a new certificate or other evidence of ownership for such securities
        not bearing a restrictive legend.

       

      Section
        1.25. “Registration
        Rights Agreement”
        shall
        mean the Registration Rights Agreement dated the date hereof, regarding the
        filing of the Registration Statement for the resale of the Registrable
        Securities, entered into between the Company and the Investor.

       

      Section
        1.26. “Registration
        Statement”
        shall
        mean a registration statement on Form S-1 or SB-2 (if use of such form is
        then
        available to the Company pursuant to the rules of the SEC and, if not, on
        such
        other form promulgated by the SEC for which the Company then qualifies and
        which
        counsel for the Company shall deem appropriate, and which form shall be
        available for the resale of the Registrable Securities to be registered
        thereunder in accordance with the provisions of this Agreement and the
        Registration Rights Agreement, and in accordance with the intended method
        of
        distribution of such securities), for the registration of the resale by the
        Investor of the Registrable Securities under the Securities Act.

       

      
        
          
          

        

        
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      Section
        1.27. “Regulation
        D”
        shall
        have the meaning set forth in the recitals of this Agreement.

       

      Section
        1.28. “SEC”
        shall
        mean the Securities and Exchange Commission.

       

      Section
        1.29. “Securities
        Act”
        shall
        have the meaning set forth in the recitals of this Agreement.

       

      Section
        1.30. “SEC
        Documents”
        shall
        mean Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current
        Reports on Form 8-K and Proxy Statements of the Company as supplemented to
        the
        date hereof, filed by the Company for a period of at least twelve (12) months
        immediately preceding the date hereof or the Advance Date, as the case may
        be,
        until such time as the Company no longer has an obligation to maintain the
        effectiveness of a Registration Statement as set forth in the Registration
        Rights Agreement.

       

      Section
        1.31. “Trading
        Day”
        shall
        mean any day during which the American Stock Exchange shall be open for
        business.

       

      Section
        1.32. “VWAP”
        shall
        mean the volume weighted average price of the Company’s Common Stock as quoted
        by Bloomberg, LP.

       

      ARTICLE
        II.

      Advances

       

      Section
        2.1. Investments.

       

      (a) Advances.
        Upon
        the terms and conditions set forth herein (including, without limitation,
        the
        provisions of Article VII hereof) the Company may request an Advance by the
        Investor by the delivery of an Advance Notice. The number of shares of Common
        Stock that the Investor shall receive for each Advance shall be determined
        by
        dividing the amount of the Advance by the Purchase Price. No fractional shares
        shall be issued. Fractional shares shall be rounded to the next higher whole
        number of shares. The aggregate maximum amount of all Advances that the Investor
        shall be obligated to make under this Agreement shall not exceed the Commitment
        Amount.

       

      Section
        2.2. Mechanics.

       

      (a) Advance
        Notice.
        At any
        time during the Commitment Period, the Company may deliver an Advance Notice
        to
        the Investor, subject to the conditions set forth in Section 7.2;
        provided,
        however, the amount for each Advance as designated by the Company in the
        applicable Advance Notice shall not be more than the Maximum Advance Amount.
        The
        aggregate amount of all Advances pursuant to this Agreement shall not exceed
        the
        Commitment Amount. The Company acknowledges that the Investor may sell shares
        of
        the Company’s Common Stock corresponding with a particular Advance Notice
        beginning after the Advance Notice is received by the Investor. There shall
        be a
        minimum of five (5) Trading Days between each Advance Notice Date.

       

      
        
          
          

        

        
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      (b) Date
        of Delivery of Advance Notice.
        An
        Advance Notice shall be deemed delivered on (i) the Trading Day it is received
        by facsimile or otherwise by the Investor if such notice is received prior
        to
        5:00 pm Eastern Time, or (ii) the immediately succeeding Trading Day if it
        is
        received by facsimile or otherwise after 5:00 pm Eastern Time on a Trading
        Day
        or at any time on a day which is not a Trading Day. No Advance Notice may
        be
        deemed delivered on a day that is not a Trading Day. 

       

      Section
        2.3. Closings.
        On each
        Advance Date (i) the Company shall deliver to the Investor shares of the
        Company’s Common Stock, representing the amount of the Advance specified in such
        Advance Notice pursuant to Section 2.1 herein, registered in the name of
        the
        Investor and (ii) the Investor shall deliver to the Company the amount of
        the
        Advance specified in the Advance Notice by wire transfer of immediately
        available funds. In addition, on or prior to the Advance Date, each of the
        Company and the Investor shall deliver to the other, all documents, instruments
        and writings required to be delivered by either of them pursuant to this
        Agreement in order to implement and effect the transactions contemplated
        herein.
        To the extent the Company has not paid the fees, expenses, and disbursements
        of
        the Investor, the Investor’s counsel, or the Company’s counsel in accordance
        with Section 12.4, the amount of such fees, expenses, and disbursements may
        be
        deducted by the Investor (and shall be paid to the relevant party) from the
        amount of the Advance with no reduction in the amount of shares of the Company’s
        Common Stock to be delivered on such Advance Date. 

       

      Section
        2.4. Termination
        of Investment.
        The
        obligation of the Investor to make an Advance to the Company pursuant to
        this
        Agreement shall terminate permanently (including with respect to an Advance
        Date
        that has not yet occurred) in the event that (i) there shall occur any stop
        order or suspension of the effectiveness of the Registration Statement for
        an
        aggregate of fifty (50) Trading Days, other than due to the acts of the
        Investor, during the Commitment Period, or (ii) the Company shall at any
        time
        fail materially to comply with the requirements of Article VI and such failure
        is not cured within thirty (30) days after receipt of written notice from
        the
        Investor, provided,
        however,
        that
        this termination provision shall not apply to any period commencing upon
        the
        filing of a post-effective amendment to such Registration Statement and ending
        upon the date on which such post effective amendment is declared effective
        by
        the SEC.

       

      Section
        2.5. Agreement
        to Advance Funds.
        The
        Investor agrees to advance the amount specified in the Advance Notice to
        the
        Company after the completion of each of the following conditions and the
        other
        conditions set forth in this Agreement:

       

      (a) the
        execution and delivery by the Company, and the Investor, of this Agreement
        and
        the Exhibits hereto;

       

      (b) The
        Investor shall have received the shares of Common Stock applicable to the
        Advance in accordance with Section 2.3. Such shares shall be free of restrictive
        legends.

       

      
        
          
          

        

        
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      (c) the
        Company’s Registration Statement with respect to the resale of the Registrable
        Securities in accordance with the terms of the Registration Rights Agreement
        shall have been declared effective by the SEC;

       

      (d) the
        Company shall have obtained all material permits and qualifications required
        by
        any applicable state for the offer and sale of the Registrable Securities,
        or
        shall have the availability of exemptions therefrom and the sale and issuance
        of
        the Registrable Securities shall be legally permitted by all laws and
        regulations to which the Company is subject, provided, however, that the
        Company
        shall not be required in connection therewith to consent to service of process
        in a jurisdiction in which it does not conduct business; 

       

      (e) the
        Company shall have filed with the Commission in a timely manner (including
        any
        filing extensions provided by Rule 12b-25 of the Exchange Act) all reports,
        notices and other documents required of a “reporting company” under the Exchange
        Act and applicable SEC regulations;

       

      (f) the
        fees
        as set forth in Section 12.4 below shall have been paid or can be withheld
        as
        provided in Section 2.3;

       

      (g) the
        conditions set forth in Section 7.2 shall have been satisfied; and

       

      (h) The
        Company’s transfer agent shall be DWAC eligible.

       

      Section
        2.6. Lock
        Up Period.
        On the
        date hereof, the Company shall obtain from each executive officer and director
        of the Company a lock-up agreement, as defined below, in the form annexed
        hereto
        as Schedule 2.6 agreeing to only sell in compliance with the volume
        limitation of Rule 144.

       

      Section
        2.7. Hardship.
        In the
        event the Investor sells shares of the Company’s Common Stock after receipt of
        an Advance Notice and the Company fails to perform its obligations as mandated
        in Section 2.3, and specifically if the Company fails to deliver to the Investor
        on the Advance Date the shares of Common Stock corresponding to the applicable
        Advance, the Company acknowledges that the Investor shall suffer financial
        hardship and therefore shall be liable for any and all losses, commissions,
        fees, or financial hardship caused to the Investor.

       

      ARTICLE
        III.

      Representations
        and Warranties of Investor

       

      Investor
        hereby represents and warrants to, and agrees with, the Company that the
        following are true and correct as of the date hereof and as of each Advance
        Date:

       

      Section
        3.1. Organization
        and Authorization.
        The
        Investor is duly incorporated or organized and validly existing in the
        jurisdiction of its incorporation or organization and has all requisite power
        and authority to purchase and hold the securities issuable hereunder. The
        decision to invest and the execution and delivery of this Agreement by such
        Investor, the performance by such Investor of its obligations hereunder and
        the
        consummation by such Investor of the transactions contemplated hereby have
        been
        duly authorized and requires no other proceedings on the part of the Investor.
        The undersigned has the right, power and authority to execute and deliver
        this
        Agreement and all other instruments (including, without limitations, the
        Registration Rights Agreement), on behalf of the Investor. This Agreement
        has
        been duly executed and delivered by the Investor and, assuming the execution
        and
        delivery hereof and acceptance thereof by the Company, will constitute the
        legal, valid and binding obligations of the Investor, enforceable against
        the
        Investor in accordance with its terms.

       

      
        
          
          

        

        
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      Section
        3.2. Evaluation
        of Risks.
        The
        Investor has such knowledge and experience in financial, tax and business
        matters as to be capable of evaluating the merits and risks of, and bearing
        the
        economic risks entailed by, an investment in the Company and of protecting
        its
        interests in connection with this transaction. It recognizes that its investment
        in the Company involves a high degree of risk.

       

      Section
        3.3. No
        Legal Advice From the Company.
        The
        Investor acknowledges that it had the opportunity to review this Agreement
        and
        the transactions contemplated by this Agreement with his or its own legal
        counsel and investment and tax advisors. The Investor is relying solely on
        such
        counsel and advisors and not on any statements or representations of the
        Company
        or any of its representatives or agents for legal, tax or investment advice
        with
        respect to this investment, the transactions contemplated by this Agreement
        or
        the securities laws of any jurisdiction.

       

      Section
        3.4. Investment
        Purpose.
        The
        securities are being purchased by the Investor for its own account, and for
        investment purposes. The Investor agrees not to assign or in any way transfer
        the Investor’s rights to the securities or any interest therein and acknowledges
        that the Company will not recognize any purported assignment or transfer
        except
        in accordance with applicable Federal and state securities laws. No other
        person
        has or will have a direct or indirect beneficial interest in the securities.
        The
        Investor agrees not to sell, hypothecate or otherwise transfer the Investor’s
        securities unless the securities are registered under Federal and applicable
        state securities laws or unless, in the opinion of counsel satisfactory to
        the
        Company, an exemption from such laws is available.

       

      Section
        3.5. Accredited
        Investor.
        The
        Investor is an “Accredited
        Investor”
        as that
        term is defined in Rule 501(a)(3) of Regulation D of the Securities
        Act.

       

      Section
        3.6. Information.
        The
        Investor and its advisors (and its counsel), if any, have been furnished
        with
        all materials relating to the business, finances and operations of the Company
        and information it deemed material to making an informed investment decision.
        The Investor and its advisors, if any, have been afforded the opportunity
        to ask
        questions of the Company and its management. Neither such inquiries nor any
        other due diligence investigations conducted by such Investor or its advisors,
        if any, or its representatives shall modify, amend or affect the Investor’s
        right to rely on the Company’s representations and warranties contained in this
        Agreement. The Investor understands that its investment involves a high degree
        of risk. The Investor is in a position regarding the Company, which, based
        upon
        employment, family relationship or economic bargaining power, enabled and
        enables such Investor to obtain information from the Company in order to
        evaluate the merits and risks of this investment. The Investor has sought
        such
        accounting, legal and tax advice, as it has considered necessary to make
        an
        informed investment decision with respect to this transaction.

       

      
        
          
          

        

        
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      Section
        3.7. Receipt
        of Documents.
        The
        Investor and its counsel have received and read in their entirety: (i) this
        Agreement and the Exhibits annexed hereto; (ii) all due diligence and other
        information necessary to verify the accuracy and completeness of such
        representations, warranties and covenants; (iii) the Company’s Form 10-K for the
        year ended December 31, 2004 and Form 10-Q for the period ended June 30,
        2005;
        and (iv) answers to all questions the Investor submitted to the Company
        regarding an investment in the Company; and the Investor has relied on the
        information contained therein and has not been furnished any other document,
        literature, memorandum or prospectus. 

       

      Section
        3.8. Registration
        Rights Agreement.
        The
        parties have entered into the Registration Rights Agreement dated the date
        hereof.

       

      Section
        3.9. No
        General Solicitation.
        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 under the Securities Act) in connection
        with
        the offer or sale of the shares of Common Stock offered hereby.

       

      Section
        3.10. Not
        an
        Affiliate.
        The
        Investor is not an officer, director or a person that directly, or indirectly
        through one or more intermediaries, controls or is controlled by, or is under
        common control with the Company or any “Affiliate”
        of the
        Company (as that term is defined in Rule 405 of the Securities Act).

       

      Section
        3.11. Trading
        Activities.
        The
        Investor’s trading activities with respect to the Company’s Common Stock shall
        be in compliance with all applicable federal and state securities laws, rules
        and regulations and the rules and regulations of the Principal Market on
        which
        the Company’s Common Stock is listed or traded. Neither
        the Investor nor its affiliates has an open short position in the Common
        Stock
        of the Company, the Investor agrees that it shall not, and that it will cause
        its affiliates not to, engage in any short sales of or hedging transactions
        with
        respect to the Common Stock, provided
        that the
        Company acknowledges and agrees that upon receipt of an Advance Notice the
        Investor has the right to sell the shares to be issued to the Investor pursuant
        to the Advance Notice
        during
        the applicable Pricing Period. 

       

      ARTICLE
        IV.

      Representations
        and Warranties of the Company

       

      Except
        as
        stated below, on the disclosure schedules attached hereto or in the SEC
        Documents (as defined herein), the Company hereby represents and warrants
        to,
        and covenants with, the Investor that the following are true and correct
        as of
        the date hereof:

       

      Section
        4.1. Organization
        and Qualification.
        The
        Company is duly incorporated or organized and validly existing in the
        jurisdiction of its incorporation or organization and has all requisite
        corporate power to own its properties and to carry on its business as now
        being
        conducted. Each of the Company and its subsidiaries is duly qualified as
        a
        foreign corporation to do business and is in good standing in every jurisdiction
        in which the nature of the business conducted by it makes such qualification
        necessary, except to the extent that the failure to be so qualified or be
        in
        good standing would not have a Material Adverse Effect on the Company and
        its
        subsidiaries taken as a whole.

       

      
        
          
          

        

        
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      Section
        4.2. Authorization,
        Enforcement, Compliance with Other Instruments.
        (i) The
        Company has the requisite corporate power and authority to enter into and
        perform this Agreement, the Registration Rights Agreement, the Placement
        Agent
        Agreement and any related agreements, in accordance with the terms hereof
        and
        thereof, (ii) the execution and delivery of this Agreement, the Registration
        Rights Agreement, the Placement Agent Agreement and any related agreements
        by
        the Company and the consummation by it of the transactions contemplated hereby
        and thereby, have been duly authorized by the Company’s Board of Directors and
        no further consent or authorization is required by the Company, its Board
        of
        Directors or its stockholders, (iii) this Agreement, the Registration
        Rights Agreement, the Placement Agent Agreement and any related agreements
        have
        been duly executed and delivered by the Company, (iv) this Agreement, the
        Registration Rights Agreement, the Placement Agent Agreement and, assuming
        the
        execution and delivery thereof and acceptance by the Investor, constitute
        the
        valid and binding obligations of the Company enforceable against the Company
        in
        accordance with their terms, except as such enforceability may be limited
        by
        general principles of equity or applicable bankruptcy, insolvency,
        reorganization, moratorium, liquidation or similar laws relating to, or
        affecting generally, the enforcement of creditors’ rights and
        remedies.

       

      Section
        4.3. Capitalization.
        The
        authorized capital stock of the Company consists of 75,000,000 shares of
        Common
        Stock and 5,000,000 shares of Preferred Stock, $0.001 par value per share
        (“Preferred
        Stock”),
        of
        which 32,392,635 shares of Common Stock and 222,400 shares of Convertible
        Series
        C Preferred Stock are issued and outstanding. All of such outstanding shares
        have been validly issued and are fully paid and nonassessable. Except as
        disclosed in the SEC Documents, no shares of Common Stock are subject to
        preemptive rights or any other similar rights or any liens or encumbrances
        suffered or permitted by the Company. Except as disclosed in the SEC Documents,
        as of the date hereof, (i) except for options issued in the ordinary
        course
        to employees, officers or directors of the Company, there are no outstanding
        options, warrants, scrip, rights to subscribe to, calls or commitments of
        any
        character whatsoever relating to, or securities or rights convertible into,
        any
        shares of capital stock of the Company or any of its subsidiaries, or contracts,
        commitments, understandings or arrangements by which the Company or any of
        its
        subsidiaries is or may become bound to issue additional shares of capital
        stock
        of the Company or any of its subsidiaries or options, warrants, scrip, rights
        to
        subscribe to, calls or commitments of any character whatsoever relating to,
        or
        securities or rights convertible into, any shares of capital stock of the
        Company or any of its subsidiaries, (ii) there are no outstanding debt
        securities (iii) there
        are no outstanding registration statements other than on Form S-8 and (iv)
        there
        are no agreements or arrangements under which the Company or any of its
        subsidiaries is obligated to register the sale of any of their securities
        under
        the Securities Act (except pursuant to the Registration Rights Agreement).
        There
        are no securities or instruments containing anti-dilution or similar provisions
        that will be triggered by this Agreement or any related agreement or the
        consummation of the transactions described herein or therein. The Company
        has
        furnished to the Investor true and correct copies of the Company’s Certificate
        of Incorporation, as amended and as in effect on the date hereof (the
“Certificate
        of Incorporation”),
        and
        the Company’s By-laws, as in effect on the date hereof (the “By-laws”),
        and
        the terms of all securities convertible into or exercisable for Common Stock
        and
        the material rights of the holders thereof in respect thereto.

       

      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      

      Section
        4.4. No
        Conflict.
        The
        execution, delivery and performance of this Agreement by the Company and
        the
        consummation by the Company of the transactions contemplated hereby will
        not (i)
        result in a violation of the Certificate of Incorporation, any certificate
        of
        designations of any outstanding series of preferred stock of the Company
        or the
        By-laws 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 the Company or any of its
        subsidiaries is a party, or to the knowledge of the Company result in a
        violation of any law, rule, regulation, order, judgment or decree (including
        federal and state securities laws and regulations and the rules and regulations
        of the Principal Market on which the Common Stock is quoted) applicable to
        the
        Company or any of its subsidiaries or by which any material property or asset
        of
        the Company or any of its subsidiaries is bound or affected and which would
        cause a Material Adverse Effect. Except as disclosed in the SEC Documents,
        neither the Company nor its subsidiaries is in violation of any term of or
        in
        default under its Articles of Incorporation or By-laws or their organizational
        charter or by-laws, respectively, or any material contract, agreement, mortgage,
        indebtedness, indenture, instrument, judgment, decree or order or to the
        knowledge of the Company any statute, rule or regulation applicable to the
        Company or its subsidiaries. To the knowledge of the Company the business
        of the
        Company and its subsidiaries is not being conducted in violation of any material
        law, ordinance, regulation of any governmental entity. Except as specifically
        contemplated by this Agreement and as required under the Securities Act and
        any
        applicable state securities laws, the Company is not required to obtain any
        consent, authorization or order of, or make any filing or registration with,
        any
        court or governmental agency in order for it to execute, deliver or perform
        any
        of its obligations under or contemplated by this Agreement or the Registration
        Rights Agreement in accordance with the terms hereof or thereof. All consents,
        authorizations, orders, filings and registrations which the Company is required
        to obtain pursuant to the preceding sentence have been obtained or effected
        on
        or prior to the date hereof. The Company and its subsidiaries are unaware
        of any
        fact or circumstance which might give rise to any of the foregoing.

       

      Section
        4.5. SEC
        Documents; Financial Statements.
        Since
        January 1, 2003, the Company has filed all reports, schedules, forms, statements
        and other documents required to be filed by it with the SEC under the Exchange
        Act. The Company has delivered to the Investor or its representatives, or
        has
        filed on the SEC’s website at http://www.sec.gov, true and complete copies of
        the SEC Documents. As of their respective dates, the financial statements
        of the
        Company disclosed in the SEC Documents (the “Financial
        Statements”)
        complied as to form in all material respects with applicable accounting
        requirements and the published rules and regulations of the SEC with respect
        thereto. Such financial statements have been prepared in accordance with
        generally accepted accounting principles, consistently applied, during the
        periods involved (except (i) as may be otherwise indicated in such financial
        statements or the notes thereto, or (ii) in the case of unaudited interim
        statements, to the extent they may exclude footnotes or may be condensed
        or
        summary statements) and, fairly present in all material respects the financial
        position of the Company as of the dates thereof and the results of its
        operations and cash flows for the periods then ended (subject, in the case
        of
        unaudited statements, to normal year-end audit adjustments). No other
        information provided by or on behalf of the Company to the Investor which
        is not
        included in the SEC Documents contains any untrue statement of a material
        fact
        or omits to state any material fact necessary in order to make the statements
        therein, in the light of the circumstances under which they were made, not
        misleading.

       

      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

      

      Section
        4.6. 10b-5.
        The SEC
        Documents do not include any untrue statements of material fact, nor do they
        omit to state any material fact required to be stated therein necessary to
        make
        the statements made, in light of the circumstances under which they were
        made,
        not misleading.

       

      Section
        4.7. No
        Default.
        Except
        as disclosed in the SEC Documents, the Company is not in default in the
        performance or observance of any material obligation, agreement, covenant
        or
        condition contained in any indenture, mortgage, deed of trust or other material
        instrument or agreement to which it is a party or by which it is or its property
        is bound and neither the execution, nor the delivery by the Company, nor
        the
        performance by the Company of its obligations under this Agreement or any
        of the
        exhibits or attachments hereto will conflict with or result in the breach
        or
        violation of any of the terms or provisions of, or constitute a default or
        result in the creation or imposition of any lien or charge on any assets
        or
        properties of the Company under its Certificate of Incorporation, By-Laws,
        any
        material indenture, mortgage, deed of trust or other material agreement
        applicable to the Company or instrument to which the Company is a party or
        by
        which it is bound, or to its knowledge any statute, or any decree, judgment,
        order, rules or regulation of any court or governmental agency or body having
        jurisdiction over the Company or its properties, in each case which default,
        lien or charge is likely to cause a Material Adverse Effect on the Company’s
        business or financial condition.

       

      Section
        4.8. Absence
        of Events of Default.
        Except
        for matters described in the SEC Documents and/or this Agreement, no event
        of
        default, as defined in the respective agreement to which the Company is a
        party,
        and no event which, with the giving of notice or the passage of time or both,
        would become an event of default (as so defined), has occurred and is
        continuing, which would have a Material Adverse Effect on the Company’s
        business, properties, prospects, financial condition or results of
        operations.

       

      Section
        4.9. Intellectual
        Property Rights.
        The
        Company and its subsidiaries own or possess adequate rights or licenses to
        use
        all material trademarks, trade names, service marks, service mark registrations,
        service names, patents, patent rights, copyrights, inventions, licenses,
        approvals, governmental authorizations, trade secrets and rights necessary
        to
        conduct their respective businesses as now conducted. The Company and its
        subsidiaries do not have any knowledge of any infringement by the Company
        or its
        subsidiaries of trademark, trade name rights, patents, patent rights,
        copyrights, inventions, licenses, service names, service marks, service mark
        registrations, trade secret or other similar rights of others, and, to the
        knowledge of the Company, there is no claim, action or proceeding being made
        or
        brought against, or to the Company’s knowledge, being threatened against, the
        Company or its subsidiaries regarding trademark, trade name, patents, patent
        rights, invention, copyright, license, service names, service marks, service
        mark registrations, trade secret or other infringement; and the Company and
        its
        subsidiaries are unaware of any facts or circumstances which might give rise
        to
        any of the foregoing. 

       

      Section
        4.10. Employee
        Relations.
        Neither
        the Company nor any of its subsidiaries is involved in any labor dispute
        nor, to
        the knowledge of the Company or any of its subsidiaries, is any such dispute
        threatened. None of the Company’s or its subsidiaries’ employees is a member of
        a union and the Company and its subsidiaries believe that their relations
        with
        their employees are good.

       

      
        
          
          

        

        
          11

          
            

          

        

        
          
          

        

      

      Section
        4.11. Environmental
        Laws.
        The
        Company and its subsidiaries are (i) in material compliance with any and
        all
        applicable foreign, federal, state and local laws and regulations relating
        to
        the protection of human health and safety, the environment or hazardous or
        toxic
        substances or wastes, pollutants or contaminants (“Environmental
        Laws”),
        (ii)
        have received all material permits, licenses or other approvals required
        of them
        under applicable Environmental Laws to conduct their respective businesses
        and
        (iii) are in compliance with all terms and conditions of any such permit,
        license or approval.

       

      Section
        4.12. Title.
        Except
        as set forth in the SEC Documents, the Company has good and marketable title
        to
        its properties and material assets owned by it, free and clear of any pledge,
        lien, security interest, encumbrance, claim or equitable interest other than
        such as are not material to the business of the Company. Any real property
        and
        facilities held under lease by the Company and its subsidiaries are held
        by them
        under valid, subsisting and enforceable leases with such exceptions as are
        not
        material and do not interfere with the use made and proposed to be made of
        such
        property and buildings by the Company and its subsidiaries.

       

      Section
        4.13. Insurance.
        The
        Company and each of its subsidiaries are insured by insurers of recognized
        financial responsibility against such losses and risks and in such amounts
        as
        management of the Company believes to be prudent and customary in the businesses
        in which the Company and its subsidiaries are engaged. Neither the Company
        nor
        any such subsidiary has been refused any insurance coverage sought or applied
        for and neither the Company nor any such subsidiary has any reason to believe
        that it will not be able to renew its existing insurance coverage as and
        when
        such coverage expires or to obtain similar coverage from similar insurers
        as may
        be necessary to continue its business at a cost that would not materially
        and
        adversely affect the condition, financial or otherwise, or the earnings,
        business or operations of the Company and its subsidiaries, taken as a
        whole.

       

      Section
        4.14. Regulatory
        Permits.
        The
        Company and its subsidiaries possess all material certificates, authorizations
        and permits issued by the appropriate federal, state or foreign regulatory
        authorities necessary to conduct their respective businesses, and neither
        the
        Company nor any such subsidiary has received any notice of proceedings relating
        to the revocation or modification of any such material certificate,
        authorization or permit.

       

      Section
        4.15. Internal
        Accounting Controls.
        The
        Company and each of its 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.

       

      Section
        4.16. No
        Material Adverse Breaches, etc.
        Except
        as set forth in the SEC Documents, neither the Company nor any of its
        subsidiaries is subject to any charter, corporate or other legal restriction,
        or
        any judgment, decree, order, rule or regulation which in the judgment of
        the
        Company’s officers has or is expected in the future to have a Material Adverse
        Effect on the business, properties, operations, financial condition, results
        of
        operations or prospects of the Company or its subsidiaries. Except as set
        forth
        in the SEC Documents, neither the Company nor any of its subsidiaries is
        in
        breach of any contract or agreement which breach, in the judgment of the
        Company’s officers, has or is expected to have a Material Adverse Effect on the
        business, properties, operations, financial condition, results of operations
        or
        prospects of the Company or its subsidiaries.

       

      
        
          
          

        

        
          12

          
            

          

        

        
          
          

        

      

      Section
        4.17. Absence
        of Litigation.
        Except
        as set forth in the SEC Documents, and except as disclosed to the Investor
        in
        the course of its due diligence review, to the knowledge of the Company there
        is
        no action, suit, proceeding, inquiry or investigation before or by any court,
        public board, government agency, self-regulatory organization or body pending
        against or affecting the Company, the Common Stock or any of the Company’s
        subsidiaries, wherein an unfavorable decision, ruling or finding would (i)
        have
        a Material Adverse Effect on the transactions contemplated hereby (ii) adversely
        affect the validity or enforceability of, or the authority or ability of
        the
        Company to perform its obligations under, this Agreement or any of the documents
        contemplated herein, or (iii) except as expressly disclosed in the SEC
        Documents, have a Material Adverse Effect on the business, operations,
        properties, financial condition or results of operation of the Company and
        its
        subsidiaries taken as a whole.

       

      Section
        4.18. Subsidiaries.
        Except
        as disclosed in the SEC Documents, the Company does not presently own or
        control, directly or indirectly, any interest in any other corporation,
        partnership, association or other business entity.

       

      Section
        4.19. Tax
        Status.
        Except
        as disclosed in the SEC Documents, the Company and each of its subsidiaries
        has
        made or filed all federal and state income and all other tax returns, reports
        and declarations required by any jurisdiction to which it is subject and
        (unless
        and only to the extent that the Company and each of its subsidiaries has
        set
        aside on its books provisions reasonably adequate for the payment of all
        unpaid
        and unreported taxes) 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 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.

       

      Section
        4.20. Certain
        Transactions.
        Except
        as set forth in the SEC Documents none of the officers, directors, or employees
        of the Company is presently a party to any transaction with the Company (other
        than for services as employees, officers and 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 officer, director or such employee or,
        to the
        knowledge of the Company, any corporation, partnership, trust or other entity
        in
        which any officer, director, or any such employee has a substantial interest
        or
        is an officer, director, trustee or partner.

       

      Section
        4.21. Fees
        and Rights of First Refusal.
        The
        Company is not obligated to offer the securities offered hereunder on a right
        of
        first refusal basis or otherwise to any third parties including, but not
        limited
        to, current or former shareholders of the Company, underwriters, brokers,
        agents
        or other third parties.

       

      
        
          
          

        

        
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      Section
        4.22. Use
        of
        Proceeds.
        The
        Company shall use the net proceeds from this offering for general corporate
        purposes. However, in no event shall the Company use the net proceeds from
        this
        offering for the payment (or loan to any such person for the payment) of
        any
        judgment, or other liability, incurred by any executive officer, officer,
        director or employee of the Company, except for any liability owed to such
        person for services rendered, or if any judgment or other liability is incurred
        by such person originating from services rendered to the Company, or the
        Company
        has indemnified such person from liability.

       

      Section
        4.23. Further
        Representation and Warranties of the Company.
        For so
        long as any securities issuable hereunder held by the Investor remain
        outstanding, the Company acknowledges, represents, warrants and agrees that
        it
        will maintain the listing of its Common Stock on the Principal
        Market.

       

      Section
        4.24. Opinion
        of Counsel.
        Investor shall receive an opinion letter from counsel to the Company on the
        date
        hereof.

       

      Section
        4.25. Opinion
        of Counsel.
        The
        Company will obtain for the Investor, at the Company’s expense, any and all
        opinions of counsel which may be reasonably required in order to sell the
        securities issuable hereunder without restriction.

       

      Section
        4.26. Dilution.
        The
        Company is aware and acknowledges that issuance of shares of the Company’s
        Common Stock could cause dilution to existing shareholders and could
        significantly increase the outstanding number of shares of Common Stock.
        

       

      ARTICLE
        V.

      Indemnification

       

      The
        Investor and the Company represent to the other the following with respect
        to
        itself:

       

      Section
        5.1. Indemnification.

       

      (a) In
        consideration of the Investor’s execution and delivery of this Agreement, and in
        addition to all of the Company’s other obligations under this Agreement, the
        Company shall defend, protect, indemnify and hold harmless the Investor,
        and all
        of its officers, directors, partners, employees and agents (including, without
        limitation, those retained in connection with the transactions contemplated
        by
        this Agreement) (collectively, the “Investor
        Indemnitees”)
        from
        and against any and all actions, causes of action, suits, claims, losses,
        costs,
        penalties, fees, liabilities and damages, and expenses in connection therewith
        (irrespective of whether any such Investor Indemnitee is a party to the action
        for which indemnification hereunder is sought), and including reasonable
        attorneys’ fees and disbursements (the “Indemnified
        Liabilities”),
        incurred by the Investor Indemnitees or any of them as a result of, or arising
        out of, or relating to (a) any misrepresentation or breach of any representation
        or warranty made by the Company in this Agreement or the Registration Rights
        Agreement or any other certificate, instrument or document contemplated hereby
        or thereby, (b) any breach of any covenant, agreement or obligation of the
        Company contained in this Agreement or the Registration Rights Agreement
        or any
        other certificate, instrument or document contemplated hereby or thereby,
        or (c)
        any cause of action, suit or claim brought or made against such Investor
        Indemnitee not arising out of any action or inaction of an Investor Indemnitee,
        and arising out of or resulting from the execution, delivery, performance
        or
        enforcement of this Agreement or any other instrument, document or agreement
        executed pursuant hereto by any of the Investor Indemnitees. To the extent
        that
        the foregoing undertaking by the Company may be unenforceable for any reason,
        the Company shall make the maximum contribution to the payment and satisfaction
        of each of the Indemnified Liabilities, which is permissible under applicable
        law.

       

      
        
          
          

        

        
          14

          
            

          

        

        
          
          

        

      

      (b) In
        consideration of the Company’s execution and delivery of this Agreement, and in
        addition to all of the Investor’s other obligations under this Agreement, the
        Investor shall defend, protect, indemnify and hold harmless the Company and
        all
        of its officers, directors, shareholders, employees and agents (including,
        without limitation, those retained in connection with the transactions
        contemplated by this Agreement) (collectively, the “Company
        Indemnitees”)
        from
        and against any and all Indemnified Liabilities incurred by the Company
        Indemnitees or any of them as a result of, or arising out of, or relating
        to (a)
        any misrepresentation or breach of any representation or warranty made by
        the
        Investor in this Agreement, the Registration Rights Agreement, or any instrument
        or document contemplated hereby or thereby executed by the Investor, (b)
        any
        breach of any covenant, agreement or obligation of the Investor(s) contained
        in
        this Agreement, the Registration Rights Agreement or any other certificate,
        instrument or document contemplated hereby or thereby executed by the Investor,
        or (c) any cause of action, suit or claim brought or made against such Company
        Indemnitee based on misrepresentations or due to a breach by the Investor
        and
        arising out of or resulting from the execution, delivery, performance or
        enforcement of this Agreement or any other instrument, document or agreement
        executed pursuant hereto by any of the Company Indemnitees. To the extent
        that
        the foregoing undertaking by the Investor may be unenforceable for any reason,
        the Investor shall make the maximum contribution to the payment and satisfaction
        of each of the Indemnified Liabilities, which is permissible under applicable
        law.

       

      (c) The
        obligations of the parties to indemnify or make contribution under this Section
        5.1 shall survive termination.

       

      ARTICLE
        VI.

      Covenants
        of the Company

       

      Section
        6.1. Registration
        Rights.
        The
        Company shall cause the Registration Rights Agreement to remain in full force
        and effect and the Company shall comply in all material respects with the
        terms
        thereof.

       

      Section
        6.2. Listing
        of Common Stock.
        The
        Company shall use commercially reasonable efforts to maintain the Common
        Stock’s
        eligibility for listing on the American Stock Exchange or the National
        Association of Securities Dealers Inc.’s Over the Counter Bulletin Board.

       

      Section
        6.3. Exchange
        Act Registration.
        The
        Company will cause its Common Stock to continue to be registered under Section
        12(g) of the Exchange Act, will file in a timely manner (including any
        extensions to the filing time provided by Rule 12b-25) all reports and other
        documents required of it as a reporting company under the Exchange Act and
        will
        not take any action or file any document (whether or not permitted by Exchange
        Act or the rules thereunder) to terminate or suspend such registration or
        to
        terminate or suspend its reporting and filing obligations under said Exchange
        Act.

       

      
        
          
          

        

        
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      Section
        6.4. Transfer
        Agent Instructions.
        Upon
        effectiveness of the Registration Statement the Company shall deliver
        instructions to its transfer agent to issue shares of Common Stock to the
        Investor free of restrictive legends on or before each Advance Date, provided
        that the Investor has agreed to comply with all securities act rules and
        regulations in connection with its sale of such Common Stock including the
        prospectus delivery requirements. 

       

      Section
        6.5. Corporate
        Existence.
        The
        Company will take all commercially reasonable steps necessary to preserve
        and
        continue the corporate existence of the Company.

       

      Section
        6.6. Notice
        of Certain Events Affecting Registration; Suspension of Right to Make an
        Advance.
        The
        Company will promptly, in light of the circumstances, notify the Investor
        upon
        its becoming aware of the occurrence of any of the following events in respect
        of a registration statement or related prospectus relating to an offering
        of
        Registrable Securities: (i) receipt of any request for additional information
        by
        the SEC or any other Federal or state governmental authority during the period
        of effectiveness of the Registration Statement for amendments or supplements
        to
        the registration statement or related prospectus; (ii) the issuance by the
        SEC
        or any other Federal or state governmental authority of any stop order
        suspending the effectiveness of the Registration Statement or the initiation
        of
        any proceedings for that purpose; (iii) receipt of any notification with
        respect
        to the suspension of the qualification or exemption from qualification of
        any of
        the Registrable Securities for sale in any jurisdiction or the initiation
        or
        threatening of any proceeding for such purpose; (iv) the happening of any
        event
        that makes any statement made in the Registration Statement or related
        prospectus of any document incorporated or deemed to be incorporated therein
        by
        reference untrue in any material respect or that requires the making of any
        changes in the Registration Statement, related prospectus or documents so
        that,
        in the case of the Registration Statement, it will not contain any untrue
        statement of a material fact or omit to state any material fact required
        to be
        stated therein or necessary to make the statements therein not misleading,
        and
        that in the case of the related prospectus, it will not contain any untrue
        statement of a material fact or omit 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; and (v) the Company’s
        reasonable determination that a post-effective amendment to the Registration
        Statement would be appropriate; and the Company will promptly make available
        to
        the Investor any such supplement or amendment to the related prospectus.
        The
        Company shall not deliver to the Investor any Advance Notice during the
        continuation of any of the foregoing events.

       

      Section
        6.7. Restriction
        on Sale of Capital Stock.
        During
        the Commitment Period, the Company shall not, without first providing the
        Investor with five (5) days’ advance written notice, (i) issue or sell any
        Common Stock or Preferred Stock without consideration or for a consideration
        per
        share less than the Bid Price of the Common Stock determined
        immediately prior to its issuance, (ii) issue or sell any
        Preferred Stock
        warrant, option, right, contract, call, or other security or instrument granting
        the holder thereof the right to acquire Common Stock without consideration
        or
        for a consideration per share less than such Common Stock’s Bid Price determined
        immediately prior to its issuance, or (iii) file any registration statement
        on
        Form S-8.

       

      
        
          
          

        

        
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      Section
        6.8. Consolidation;
        Merger.
        The
        Company shall not, at any time after the date hereof, effect any merger or
        consolidation of the Company with or into, or a transfer of all or substantially
        all the assets of the Company to another entity (a “Consolidation
        Event”)
        unless
        the resulting successor or acquiring entity (if not the Company) assumes
        by
        written instrument the obligation to deliver to the Investor such shares
        of
        stock and/or securities as the Investor is entitled to receive pursuant to
        this
        Agreement.

       

      Section
        6.9. Issuance
        of the Company’s Common Stock.
        The sale
        of the shares of Common Stock shall be made in accordance with the provisions
        and requirements of Regulation D and any applicable state securities
        law.

       

      Section
        6.10. Review
        of Public Disclosures.
        All SEC
        filings (including, without limitation, all filings required under the Exchange
        Act, which include Forms 10-Q, 10-K, 8-K, etc) and other public disclosures
        made
        by the Company, including, without limitation, all press releases, investor
        relations materials, and scripts of analysts meetings and calls, shall be
        reviewed and approved for release by the Company’s attorneys and, if containing
        financial information, the Company’s independent certified public accountants.

       

      Section
        6.11. Market
        Activities. The
        Company will not, directly or indirectly, (i) take any action designed to
        cause
        or result in, or that constitutes or might reasonably be expected to constitute,
        the stabilization or manipulation of the price of any security of the Company
        to
        facilitate the sale or resale of the Common Stock or (ii) sell, bid for or
        purchase the Common Stock, or pay anyone any compensation for soliciting
        purchases of the Common Stock.

       

      ARTICLE
        VII.

      Conditions
        for Advance and Conditions to Closing

       

      Section
        7.1. Conditions
        Precedent to the Obligations of the Company.
        The
        obligation hereunder of the Company to issue and sell the shares of Common
        Stock
        to the Investor incident to each Closing is subject to the satisfaction,
        or
        waiver by the Company, at or before each such Closing, of each of the conditions
        set forth below.

       

      (a) Accuracy
        of the Investor’s Representations and Warranties.
        The
        representations and warranties of the Investor shall be true and correct
        in all
        material respects.

       

      (b) Performance
        by the Investor.
        The
        Investor shall have performed, satisfied and complied in all respects with
        all
        covenants, agreements and conditions required by this Agreement and the
        Registration Rights Agreement to be performed, satisfied or complied with
        by the
        Investor at or prior to such Closing.

       

      Section
        7.2. Conditions
        Precedent to the Right of the Company to Deliver an Advance Notice and the
        Obligation of the Investor to Purchase Shares of Common Stock.
        The
        right of the Company to deliver an Advance Notice and the obligation of the
        Investor hereunder to acquire and pay for shares of the Company’s Common Stock
        incident to a Closing is subject to the fulfillment by the Company, on (i)
        the
        date of delivery of such Advance Notice and (ii) the applicable Advance
        Date (each a “Condition
        Satisfaction Date”),
        of
        each of the following conditions:

       

      
        
          
          

        

        
          17

          
            

          

        

        
          
          

        

      

      (a) Registration
        of the Common Stock with the SEC.
        The
        Company shall have filed with the SEC a Registration Statement with respect
        to
        the resale of the Registrable Securities in accordance with the terms of
        the
        Registration Rights Agreement. As set forth in the Registration Rights
        Agreement, the Registration Statement shall have previously become effective
        and
        shall remain effective on each Condition Satisfaction Date and (i) neither
        the
        Company nor the Investor shall have received notice that the SEC has issued
        or
        intends to issue a stop order with respect to the Registration Statement
        or that
        the SEC otherwise has suspended or withdrawn the effectiveness of the
        Registration Statement, either temporarily or permanently, or intends or
        has
        threatened to do so (unless the SEC’s concerns have been addressed and the
        Investor is reasonably satisfied that the SEC no longer is considering or
        intends to take such action), and (ii) no other suspension of the use or
        withdrawal of the effectiveness of the Registration Statement or related
        prospectus shall exist. The Registration Statement must have been declared
        effective by the SEC prior to the first Advance Notice Date.

       

      (b) Authority.
        The
        Company shall have obtained all permits and qualifications required by any
        applicable state in accordance with the Registration Rights Agreement for
        the
        offer and sale of the shares of Common Stock, or shall have the availability
        of
        exemptions therefrom. The sale and issuance of the shares of Common Stock
        shall
        be legally permitted by all laws and regulations to which the Company is
        subject.

       

      (c) Fundamental
        Changes.
        There
        shall not exist any fundamental changes to the information set forth in the
        Registration Statement which would require the Company to file a post-effective
        amendment to the Registration Statement. 

       

      (d) Performance
        by the Company.
        The
        Company shall have performed, satisfied and complied in all material respects
        with all covenants, agreements and conditions required by this Agreement
        (including, without limitation, the conditions specified in Section 2.5
        hereof) and the Registration Rights Agreement to be performed, satisfied
        or
        complied with by the Company at or prior to each Condition Satisfaction
        Date.

       

      (e) No
        Injunction.
        No
        statute, rule, regulation, executive order, decree, ruling or injunction
        shall
        have been enacted, entered, promulgated or endorsed by any court or governmental
        authority of competent jurisdiction that prohibits or directly and adversely
        affects any of the transactions contemplated by this Agreement, and no
        proceeding shall have been commenced that may have the effect of prohibiting
        or
        adversely affecting any of the transactions contemplated by this
        Agreement.

       

      (f) No
        Suspension of Trading in or Delisting of Common Stock.
        The
        trading of the Common Stock is not suspended by the SEC or the Principal
        Market
        (if the Common Stock is traded on a Principal Market). The issuance of shares
        of
        Common Stock with respect to the applicable Closing, if any, shall not violate
        the shareholder approval requirements of the Principal Market (if the Common
        Stock is traded on a Principal Market). The Company shall not have received
        any
        notice threatening the continued listing of the Common Stock on the Principal
        Market (if the Common Stock is traded on a Principal Market).

       

      
        
          
          

        

        
          18

          
            

          

        

        
          
          

        

      

      (g) Maximum
        Advance Amount.
        The
        amount of an Advance requested by the Company shall not exceed the Maximum
        Advance Amount. In addition, in no event shall the number of shares issuable
        to
        the Investor pursuant to an Advance cause the aggregate number of shares
        of
        Common Stock beneficially owned by the Investor and its affiliates to exceed
        nine and 9/10 percent (9.9%) of the then outstanding Common Stock of the
        Company. For the purposes of this section beneficial ownership shall be
        calculated in accordance with Section 13(d) of the Exchange Act. For the
        purposes of complying with this section, upon reasonable request by the Company,
        the Investor shall disclose to the Company the then current aggregate number
        of
        shares of Common Stock beneficially owned by the Investor and its affiliates.
        

       

      (h) No
        Knowledge.
        The
        Company has no knowledge of any event which would be more likely than not
        to
        have the effect of causing such Registration Statement to be suspended or
        otherwise ineffective.

       

      (i) Other.
        On each
        Condition Satisfaction Date, the Investor shall have received the certificate
        executed by an officer of the Company in the form of Exhibit
        A
        attached
        hereto.

       

      ARTICLE
        VIII.

      Due
        Diligence Review; Non-Disclosure of Non-Public Information

       

      Section
        8.1. Due
        Diligence Review.
        Prior
        to the filing of the Registration Statement the Company shall make available
        for
        inspection and review by the Investor, its advisors and representatives,
        and any
        underwriter participating in any disposition of the Registrable Securities
        on
        behalf of the Investor pursuant to the Registration Statement, any such
        registration statement or amendment or supplement thereto or any blue sky,
        NASD
        or other filing, all financial and other records, all SEC Documents and other
        filings with the SEC, and all other corporate documents and properties of
        the
        Company as may be reasonably necessary for the purpose of such review, and
        cause
        the Company’s officers, directors and employees to supply all such information
        reasonably requested by the Investor or any such representative, advisor
        or
        underwriter in connection with such Registration Statement (including, without
        limitation, in response to all questions and other inquiries reasonably made
        or
        submitted by any of them), prior to and from time to time after the filing
        and
        effectiveness of the Registration Statement for the sole purpose of enabling
        the
        Investor and such representatives, advisors and underwriters and their
        respective accountants and attorneys to conduct initial and ongoing due
        diligence with respect to the Company and the accuracy of the Registration
        Statement.

       

      Section
        8.2. Non-Disclosure
        of Non-Public Information.

       

      (a) The
        Company shall not disclose material non-public information to the Investor,
        its
        advisors, or its representatives, unless prior to disclosure of such information
        the Company identifies such information as being material non-public information
        and provides the Investor, such advisors and representatives with the
        opportunity to accept or refuse to accept such material non-public information
        for review. The Company may, as a condition to disclosing any material
        non-public information hereunder, require the Investor’s advisors and
        representatives to enter into a confidentiality agreement in form reasonably
        satisfactory to the Company and the Investor.

       

      
        
          
          

        

        
          19

          
            

          

        

        
          
          

        

      

      (b) Nothing
        herein shall require the Company to disclose material non-public information
        to
        the Investor or its advisors or representatives (including pursuant to Section
        6.7), and the Company represents that it does not disseminate material
        non-public information to any investors who purchase stock in the Company
        in a
        public offering, to money managers or to securities analysts, provided, however,
        that notwithstanding anything herein to the contrary, the Company will, as
        hereinabove provided, immediately notify the advisors and representatives
        of the
        Investor and, if any, underwriters, of any event or the existence of any
        circumstance (without any obligation to disclose the specific event or
        circumstance) of which it becomes aware, constituting material non-public
        information (whether or not requested of the Company specifically or generally
        during the course of due diligence by such persons or entities), which, if
        not
        disclosed in the prospectus included in the Registration Statement would
        cause
        such prospectus to include a material misstatement or to omit a material
        fact
        required to be stated therein in order to make the statements, therein, in
        light
        of the circumstances in which they were made, not misleading. Nothing contained
        in this Section 8.2 shall be construed to mean that such persons or entities
        other than the Investor (without the written consent of the Investor prior
        to
        disclosure of such information) may not obtain material non-public information
        in the course of conducting due diligence in accordance with the terms of
        this
        Agreement and nothing herein shall prevent any such persons or entities from
        notifying the Company of their opinion that based on such due diligence by
        such
        persons or entities, that the Registration Statement contains an untrue
        statement of material fact or omits a material fact required to be stated
        in the
        Registration Statement or necessary to make the statements contained therein,
        in
        light of the circumstances in which they were made, not misleading.

       

      ARTICLE
        IX.

      Choice
        of Law/Jurisdiction

       

      Section
        9.1. Governing
        Law.
        This
        Agreement shall be governed by and interpreted in accordance with the laws
        of
        the State of New Jersey without regard to the principles of conflict of laws.
        The parties further agree that any action between them shall be heard in
        Hudson
        County, New Jersey, and expressly consent to the jurisdiction and venue of
        the
        Superior Court of New Jersey, sitting in Hudson County, New Jersey and the
        United States District Court of New Jersey, sitting in Newark, New Jersey,
        for
        the adjudication of any civil action asserted pursuant to this
        paragraph.

       

      ARTICLE
        X.

      Assignment;
        Termination

       

      Section
        10.1. Assignment.
        Neither
        this Agreement nor any rights of the Company hereunder may be assigned to
        any
        other Person. 

       

      Section
        10.2. Termination.
        

       

      (a) The
        obligations of the Investor to make Advances under Article II hereof shall
        terminate twenty-four (24) months after the Effective Date.

       

      
        
          
          

        

        
          20

          
            

          

        

        
          
          

        

      

      (b) The
        Company may terminate this Agreement upon ten (10) days written notice to
        the
        Investor provided that (i) there are no Advances outstanding, and (ii) the
        Company has paid all amounts owed to the Investor pursuant to this Agreement
        or
        any other agreements between the Company and the Investor. Any termination
        of
        this Agreement pursuant to this Section 10.2 (b) shall not terminate the
        Registration Rights Agreement unless the Investor has disposed of all the
        Investor Shares (as defined below) and all shares issued to the Investor
        pursuant to Advances, or all such shares are eligible for resale pursuant
        to
        Rule 144(k).

       

      ARTICLE
        XI.

      Notices

       

      Section
        11.1. Notices.
        Any
        notices, consents, waivers, or other communications required or permitted
        to be
        given under the terms of this Agreement must be in writing and will be deemed
        to
        have been delivered (i) upon receipt, when delivered personally; (ii) upon
        receipt, when sent by facsimile, provided a copy is mailed by U.S. certified
        mail, return receipt requested; (iii) three (3) days after being sent by
        U.S.
        certified mail, return receipt requested, or (iv) one (1) day after deposit
        with
        a nationally recognized overnight delivery service, in each case properly
        addressed to the party to receive the same. The addresses and facsimile numbers
        for such communications shall be:

      

      
        	
                If
                  to the Company, to:

              	
                Titan
                  Pharmaceuticals, Inc.

              
	 	
                400
                  Oyster Point Blvd. - Suite 505

              
	 	
                San
                  Francisco, CA 94080

              
	 	
                Attention: 
                  Robert
                  E. Farrell, Chief Financial Officer

              
	 	
                Telephone: 
                  (650)
                  244-4990

              
	 	
                Facsimile: 
                  (866)
                  449-8519

              
	 	 
	
                With
                  a copy to:

              	
                Loeb
                  & Loeb, LLP

              
	 	
                345
                  Park Avenue

              
	 	
                New
                  York, NY 10154-0037

              
	 	
                Attention: 
                  Fran
                  Stoller

              
	 	
                Telephone:  
                  (212)
                  407-4935

              
	 	
                Facsimile: 
                  (212)
                  214-0706

              
	 	 
	
                If
                  to the Investor(s):

              	
                Cornell
                  Capital Partners, LP

              
	 	
                101
                  Hudson Street - Suite 3700

              
	 	
                Jersey
                  City, NJ 07302

              
	 	
                Attention: 
                  Mark
                  Angelo

              
	 	
                 Portfolio
                  Manager

              
	 	
                Telephone: 
                  (201)
                  985-8300

              
	 	
                Facsimile: 
                  (201)
                  985-8266

              
	 	 
	
                With
                  a Copy to:

              	
                David
                  Gonzalez, Esq.

              
	 	
                101
                  Hudson Street - Suite 3700

              
	 	
                Jersey
                  City, NJ 07302

              
	 	
                Telephone: (201)
                  985-8300

              
	 	
                Facsimile: (201)
                  985-8266

              
	 	 

      

    

    
      

      
        
          
          

        

        
          21

          
            

          

        

        
          
          

        

      

      Each
        party shall provide five (5) days’ prior written notice to the other party of
        any change in address or facsimile number.

       

      ARTICLE
        XII.

      Miscellaneous

       

      Section
        12.1. Counterparts.
        This
        Agreement may be executed in two or more identical counterparts, all of which
        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.
        In
        the event any signature page is delivered by facsimile transmission, the
        party
        using such means of delivery shall cause four (4) additional original executed
        signature pages to be physically delivered to the other party within five
        (5)
        days of the execution and delivery hereof, though failure to deliver such
        copies
        shall not affect the validity of this Agreement.

       

      Section
        12.2. Entire
        Agreement; Amendments.
        This
        Agreement supersedes all other prior oral or written agreements between the
        Investor, the Company, their affiliates and persons acting on their behalf
        with
        respect to the matters discussed herein, and this Agreement and the instruments
        referenced herein contain the entire understanding of the parties with respect
        to the matters covered herein and therein and, except as specifically set
        forth
        herein or therein, neither the Company nor the Investor makes any
        representation, warranty, covenant or undertaking with respect to such matters.
        No provision of this Agreement may be waived or amended other than by an
        instrument in writing signed by the party to be charged with
        enforcement.

       

      Section
        12.3. Reporting
        Entity for the Common Stock.
        The
        reporting entity relied upon for the determination of the trading price or
        trading volume of the Common Stock on any given Trading Day for the purposes
        of
        this Agreement shall be Bloomberg, L.P. or any successor thereto. The written
        mutual consent of the Investor and the Company shall be required to employ
        any
        other reporting entity.

       

      Section
        12.4. Fees
        and Expenses.
        The
        Company hereby agrees to pay the following fees:

       

      (a) Structuring
        Fees.
        Each of
        the parties shall pay its own fees and expenses (including the fees
        of any
        attorneys, accountants, appraisers or others engaged by such party) in
        connection with this Agreement and the transactions contemplated hereby,
        except
        that the Company will pay a structuring fee of Ten Thousand
        Dollars ($10,000) to Yorkville Advisors Management, LLC, which shall
        be
        paid on the date hereof. Subsequently on each advance date, the Company will
        pay
        Yorkville Advisors Management, LLC a structuring fee of Five Hundred
        Dollars ($500) directly out the proceeds of any Advances
        hereunder.

       

      (b) Commitment
        Fees.

       

      (i) On
        each
        Advance Date the Company shall pay to the Investor, directly from the gross
        proceeds, an amount equal to five percent (5%) of the amount of each Advance.
        The Company hereby agrees that if such payment, as is described above, is
        not
        made by the Company on the Advance Date, such payment will be made at the
        direction of the Investor as outlined and mandated by Section 2.3 of this
        Agreement. 

       

      
        
          
          

        

        
          22

          
            

          

        

        
          
          

        

      

      (ii) Upon
        the
        execution of this Agreement the Company shall issue to the Investor shares
        of
        the Common Stock in an amount equal to One Hundred Forty Thousand
        Dollars ($140,000) divided by the VWAP of the Company’s Common Stock, as
        quoted by Bloomberg, LP, on the Trading Day immediately preceding the date
        hereof (the “Investor’s
        Shares”).

       

      (iii) Fully
        Earned.
        The
        Investor’s Shares shall be deemed fully earned as of the date hereof.

       

      (iv) Registration
        Rights.
        The
        Investor’s Shares will have “piggy-back” registration rights.

       

      Section
        12.5. Brokerage.
        Each of
        the parties hereto represents that it has had no dealings in connection with
        this transaction with any finder or broker who will demand payment of any
        fee or
        commission from the other party. The Company on the one hand, and the Investor,
        on the other hand, agree to indemnify the other against and hold the other
        harmless from any and all liabilities to any person claiming brokerage
        commissions or finder’s fees on account of services purported to have been
        rendered on behalf of the indemnifying party in connection with this Agreement
        or the transactions contemplated hereby.

       

      Section
        12.6. Confidentiality.
        If for
        any reason the transactions contemplated by this Agreement are not consummated,
        each of the parties hereto shall keep confidential any information obtained
        from
        any other party (except information publicly available or in such party’s domain
        prior to the date hereof, and except as required by court order) and shall
        promptly return to the other parties all schedules, documents, instruments,
        work
        papers or other written information without retaining copies thereof, previously
        furnished by it as a result of this Agreement or in connection
        herein.

       

      [REMAINDER
        OF PAGE INTENTIONALLY LEFT BLANK]

      

      

      
        
          
          

        

        
          23

          
            

          

        

        
          
          

        

      

      
         

      

      

      IN
        WITNESS WHEREOF,
        the
        parties hereto have caused this Standby Equity Distribution Agreement to
        be
        executed by the undersigned, thereunto duly authorized, as of the date first
        set
        forth above.

       

      
        	 	
                COMPANY:

              	 
	 	
                TITAN
                  PHARMACEUTICALS, INC.

              	 
	 	 	 
	 	
                By:       

              	 
	 	
                Name: 

              	 
	 	
                Title: 

              	 
	 	 	 
	 	 	 
	 	
                INVESTOR:

              	 
	 	
                CORNELL
                  CAPITAL PARTNERS, LP

              	 
	 	 	 
	 	
                By: Yorkville
                  Advisors, LLC

              	 
	 	
                Its: General
                  Partner

              	 
	 	 	 
	 	
                By:      

              	 
	 	
                Name: Mark
                  Angelo

              	 
	 	
                Title: Portfolio
                  Manager

              	 
	 	 	 

      

      

      

      
        
          
          

        

        
          24

          
            

          

        

        
          
          

        

      

       

      EXHIBIT
        A

       

      ADVANCE
        NOTICE/COMPLIANCE CERTIFICATE

       

      TITAN
        PHARMACEUTICALS, INC.

       

      

      The
        undersigned, _______________________ hereby certifies, with respect to the
        sale
        of shares of Common Stock of TITAN
        PHARMACEUTICALS, INC.
        (the
“Company”),
        issuable in connection with this Advance Notice and Compliance Certificate
        dated
        ___________________ (the “Notice”),
        delivered pursuant to the Standby Equity Distribution Agreement (the
“Agreement”),
        as
        follows: 

       

      1. The
        undersigned is the duly elected ______________ of the Company.

       

      2. There
        are
        no fundamental changes to the information set forth in the Registration
        Statement which would require the Company to file a post effective amendment
        to
        the Registration Statement. 

       

      3.
         The
        Company has performed in all material respects all covenants and agreements
        to
        be performed by the Company on or prior to the Advance Date related to the
        Notice and has complied in all material respects with all obligations and
        conditions contained in the Agreement.

       

      4. The
        undersigned hereby represents, warrants and covenants that it has made all
        filings (“SEC
        Filings”)
        required to be made by it pursuant to applicable securities laws (including,
        without limitation, all filings required under the Securities Exchange Act
        of
        1934, which include Forms 10-Q or 10-QSB, 10-K or 10-KSB, 8-K, etc.). All
        SEC
        Filings and other public disclosures made by the Company, including, without
        limitation, all press releases, analysts meetings and calls, etc. (collectively,
        the “Public
        Disclosures”),
        have
        been reviewed and approved for release by the Company’s attorneys and, if
        containing financial information, the Company’s independent certified public
        accountants. None of the Company’s Public Disclosures contain any untrue
        statement of a material fact or omit 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.

       

      5. The
        Advance requested is _____________________.

       

      The
        undersigned has executed this Certificate this ____ day of
        _________________.

       

      TITAN
        PHARMACEUTICALS, INC.

      

      

      By:                               
         

      Name: 

      Title: 

      

        If
          Returning This Form by Facsimile Please Send To: (201) 946-0851 

        If
          by
          Mail: Cornell Capital Partners, LP, 101 Hudson Street, Suite 101, Jersey
          City,
          NJ 07302

        
          
            
            

          

          
            25

            
              

            

          

          
            
            

          

        

      

      

      SCHEDULE
        2.6

       

      TITAN
        PHARMACEUTICALS, INC.

       

      The
        undersigned hereby agrees that for a period commencing on September ___,
        2005
        and expiring upon the termination of the Standby Equity Distribution Agreement
        dated September ___, 2005 between Titan Pharmaceuticals, Inc. and Cornell
        Capital Partners, LP (the “Lock-up
        Period”),
        he,
        she or it will not, directly or indirectly, without the prior written consent
        of
        the Investor, issue, offer, agree or offer to sell, sell, grant an option
        for
        the purchase or sale of, transfer, pledge, assign, hypothecate, distribute
        or
        otherwise encumber or dispose of any securities of the Company, including
        common
        stock or options, rights, warrants or other securities underlying, convertible
        into, exchangeable or exercisable for or evidencing any right to purchase
        or
        subscribe for any common stock (whether or not beneficially owned by the
        undersigned), or any beneficial interest therein (collectively, the
“Securities”)
        except
        in accordance with the volume limitations set forth in Rule 144(e) of the
        General Rules and Regulations under the Securities Act of 1933, as
        amended.

       

      In
        order
        to enable the aforesaid covenants to be enforced, the undersigned hereby
        consents to the placing of legends and/or stop-transfer orders with the transfer
        agent of the Company’s securities with respect to any of the Securities
        registered in the name of the undersigned or beneficially owned by the
        undersigned, and the undersigned hereby confirms the undersigned’s investment in
        the Company.

       

      Dated:
        _______________, 2005

      

      Signature

      

      

      Name:
        __________________________________________

      Address:
        ________________________________________      

      City,
        State, Zip Code: _______________________________

       

       

      ________________________________________________

      

      

       

      
        
          
          

        

        
          26Exhibit
        10.2

      

      TITAN
        PHARMACEUTICALS, INC. 

      PLACEMENT
        AGENT AGREEMENT

      

      

      Dated
        as
        of: September
        28,
        2005

      

      Monitor
        Capital, Inc.

      9171
        Towne Centre Drive, Suite 465

      San
        Diego, CA 92122

      

      

      Ladies
        and Gentlemen:

      

      The
        undersigned, Titan Pharmaceuticals, Inc., a Delaware corporation (the
“Company”),
        hereby agrees with
        Monitor
        Capital, Inc. (the “Placement
        Agent”),
        and
        Cornell Capital Partners, LP (the “Investor”) as follows:

       

      1. Offering.
        The Company hereby engages the Placement Agent to act as its exclusive placement
        agent in connection with the Standby Equity Distribution Agreement dated
        the
        date hereof between the Company and the Investor (the “Standby Equity
        Distribution Agreement”), pursuant to which the Company shall issue and sell
        to the Investor, from time to time, and the Investor shall purchase from
        the
        Company (the “Offering”) up to Thirty Five Million
        Dollars ($35,000,000) (the “Commitment Amount”) of the Company’s
        common stock, par value $0.001 per share (the “Common Stock”), at price
        per share equal to the Purchase Price, as that term is defined in the Standby
        Equity Distribution Agreement. The Placement Agent services shall
        consist
        of reviewing the terms of the Standby Equity Distribution Agreement and advising
        the Company with respect to those terms.

       

      All
        capitalized terms used herein and not otherwise defined herein shall have
        the
        same meaning ascribed to them as in the Standby Equity Distribution Agreement.
        The Investor will be granted certain registration rights with respect to
        the
        Common Stock as more fully set forth in the Registration Rights Agreement
        between the Company and the Investor dated the date hereof (the “Registration
        Rights Agreement”).
        The
        documents to be executed and delivered in connection with the Offering,
        including, but not limited, to the
        Company’s latest Quarterly Report on Form 10-Q as filed with the United States
        Securities and Exchange Commission, this
        Agreement, the Standby Equity Distribution Agreement, and the Registration
        Rights Agreement are referred to sometimes hereinafter collectively as the
        “Offering
        Materials.”
        The
        Company’s Common Stock
        purchased by the Investor under
        the
        Standby Equity Distribution Agreement is sometimes referred to hereinafter
        as
        the “Securities.”
        The
        Placement Agent shall not be obligated to sell any Securities.

       

      2. Compensation.

       

      A. Upon
        the
        execution of this Agreement, the Company shall issue to the Placement Agent
        or
        its designee shares of the Company’s Common Stock in an amount equal to Ten
        Thousand Dollars ($10,000) divided by the volume weighted average price of
        the
        Common Stock, as quoted by Bloomberg, LP, on the trading day immediately
        preceding the date hereof (the “Placement
        Agent’s Shares”).
        The
        Placement Agent shall be entitled to “piggy-back” registration rights with
        respect to the Placement Agent’s Shares, which shall be triggered upon
        registration of any shares of Common Stock by the Company pursuant to the
        Registration Rights Agreement dated the date hereof. 

       

      
        
          
          

        

        
          1

          
            

          

        

        
          
          

        

      

       

      3. Representations,
        Warranties and Covenants of the Placement Agent.

       

      A. The
        Placement Agent represents, warrants and covenants as follows:

       

      (i) The
        Placement Agent has the necessary power to enter into this Agreement and
        to
        consummate the transactions contemplated hereby.

       

      (ii) The
        execution and delivery by the Placement Agent of this Agreement and the
        consummation of the transactions contemplated herein will not result in any
        violation of, or be in conflict with, or constitute a default under, any
        agreement or instrument to which the Placement Agent is a party or by which
        the
        Placement Agent or its properties are bound, or any judgment, decree, order
        or,
        to the Placement Agent’s knowledge, any statute, rule or regulation applicable
        to the Placement Agent. This Agreement when executed and delivered by the
        Placement Agent, will constitute the legal, valid and binding obligations
        of the
        Placement Agent, enforceable in accordance with their respective terms, except
        to the extent that (a) the enforceability hereof or thereof may be limited
        by
        bankruptcy, insolvency, reorganization, moratorium or similar laws from time
        to
        time in effect and affecting the rights of creditors generally, (b) the
        enforceability hereof or thereof is subject to general principles of equity,
        or
        (c) the indemnification provisions hereof or thereof may be held to
        be in
        violation of public policy.

       

      (iii) Upon
        receipt and execution of this Agreement, the Placement Agent will promptly
        forward copies of this Agreement to the Company or its counsel and the Investor
        or its counsel.

       

      (iv) The
        Placement Agent will not intentionally take any action that it reasonably
        believes would cause the Offering to violate the provisions of the Securities
        Act of 1933, as amended (the “1933
        Act”),
        the
        Securities Exchange Act of 1934 (the “1934
        Act”),
        the
        respective rules and regulations promulgated thereunder
        (the
“Rules
        and Regulations”)
        or
        applicable “Blue Sky” laws of any state or jurisdiction.

       

      (v) The
        Placement Agent is a member of the National Association of Securities Dealers,
        Inc., and is a broker-dealer registered as such under the 1934 Act and under
        the
        securities laws of the states in which the Securities will be offered or
        sold by
        the Placement Agent unless an exemption for such state registration is available
        to the Placement Agent. The Placement Agent is in material
        compliance
        with the
        rules
        and regulations applicable to the Placement Agent generally and applicable
        to
        the Placement Agent’s participation in the Offering.

       

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

      4. Representations
        and Warranties of the Company.

       

      A. The
        Company represents and warrants as follows:

       

      (i) The
        execution, delivery and performance of each of this Agreement, the Standby
        Equity Distribution Agreement, and the Registration Rights Agreement has
        been or
        will be duly and validly authorized by the Company and is, or with respect
        to
        this Agreement, the Standby Equity Distribution Agreement, and the Registration
        Rights Agreement will be, a valid and binding agreement of the Company,
        enforceable in accordance with its respective terms, except to the extent
        that
        (a) the enforceability hereof or thereof may be limited by bankruptcy,
        insolvency, reorganization, moratorium or similar laws from time to time
        in
        effect and affecting the rights of creditors generally, (b) the enforceability
        hereof or thereof is subject to general principles of equity or (c) the
        indemnification provisions hereof or thereof may be held to be in violation
        of
        public policy. The Securities to be issued pursuant to the transactions
        contemplated by this Agreement and the Standby Equity Distribution Agreement
        have been duly authorized and, when issued and paid for in accordance with
        this
        Agreement and the Standby Equity Distribution Agreement will be valid and
        binding obligations of the Company, enforceable in accordance with their
        respective terms, except to the extent that (1) the enforceability
        thereof
        may be limited by bankruptcy, insolvency, reorganization, moratorium or similar
        laws from time to time in effect and affecting the rights of creditors
        generally, and (2) the enforceability thereof is subject to general principles
        of equity. Except for obtaining stockholder approval relating to the issuance
        of
        over 19.9% of the current outstanding Common Stock, all corporate action
        required to be taken for the authorization, issuance and sale of the Securities
        has been duly and validly taken by the Company.

       

      (ii) The
        Company has a duly authorized, issued and outstanding capitalization as set
        forth herein and in the Standby Equity Distribution Agreement. The Company
        is
        not a party to or bound by any instrument, agreement or other arrangement
        providing for it to issue any capital stock, rights, warrants, options or
        other
        securities, except for this Agreement, the agreements described herein and
        as
        described in the Standby Equity Distribution Agreement and the agreements
        described therein.
        All
        issued and outstanding securities of the Company, have been duly authorized
        and
        validly issued and are fully paid and non-assessable; the holders thereof
        have
        no rights of rescission or preemptive rights with respect thereto and are
        not
        subject to personal liability solely by reason of being security holders;
        and
        none of such securities were issued in violation of the preemptive rights
        of any
        holders of any security of the Company. 

       

      (iii) The
        Common Stock to be issued in accordance with this Agreement and the Standby
        Equity Distribution Agreement have been duly authorized and, when issued
        and
        paid for in accordance with this Agreement, the Standby Equity Distribution
        Agreement and the certificates/instruments representing such Common Stock
        will
        be validly issued, fully-paid and non-assessable; the holders thereof will
        not
        be subject to personal liability solely by reason of being such holders;
        such
        Securities are not and will not be subject to the preemptive rights of any
        holder of any security of the Company.

       

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

      (iv) The
        Company has good and marketable title to, or valid and enforceable leasehold
        estates in, all items of real and personal property necessary to conduct
        its
        business (including, without limitation, any real or personal property stated
        in
        the Offering Materials to be owned or leased by the Company), free and clear
        of
        all liens, encumbrances, claims, security interests and defects of any material
        nature whatsoever, other than those set forth in the Offering Materials and
        liens for taxes not yet due and payable.

       

      (v) There
        is
        no material litigation or governmental proceeding pending or, to the best
        of the
        Company’s knowledge, threatened against, or involving the properties or business
        of the Company, except as set forth in the Offering Materials or as disclosed
        to
        the Investor in the course of its due diligence review. 

       

      (vi) The
        Company is duly organized and validly exists as a corporation in good standing
        under the laws of the State of Delaware. Except as set forth in the Offering
        Materials, the Company does not own or control, directly or indirectly, an
        interest in any other corporation, partnership, trust, joint venture or other
        business entity. The Company is duly qualified or licensed and in good standing
        as a foreign corporation in each jurisdiction in which the character of its
        operations requires such qualification or licensing and where failure to
        so
        qualify would have a material adverse effect on the Company. The Company
        has all
        requisite corporate power and authority, and all material and necessary
        authorizations, approvals, orders, licenses, certificates and permits of
        and
        from all governmental regulatory officials and bodies (domestic and foreign)
        to
        conduct its businesses (and proposed business) as described in the Offering
        Materials. Any disclosures in the Offering Materials concerning the effects
        of
        foreign, federal, state and local regulation on the Company’s businesses as
        currently conducted and as contemplated are correct in all material respects
        and
        do not omit to state a material fact. The Company has all corporate power
        and
        authority to enter into this Agreement, the Standby Equity Distribution
        Agreement, the Registration Rights Agreement, and to carry out the provisions
        and conditions hereof and thereof, and all consents, authorizations, approvals
        and orders required in connection herewith and therewith have been obtained.
        No
        consent, authorization or order of, and no filing with, any court, government
        agency or other body is required by the Company for the issuance of the
        Securities or execution and delivery of the Offering Materials except for
        applicable federal and state securities laws. The Company, since its inception,
        has not incurred any liability arising under or as a result of the application
        of any of the provisions of the 1933 Act, the 1934 Act or the Rules and
        Regulations.

       

      (vii) There
        has
        been no material adverse change in the condition or prospects of the Company,
        financial or otherwise, from the latest dates as of which such condition
        or
        prospects, respectively, are set forth in the Offering Materials, and the
        outstanding debt, the property and the business of the Company conform in
        all
        material respects to the descriptions thereof contained in the Offering
        Materials.

       

      (viii) Except
        as
        set forth in the Offering Materials,
        the
        Company is not in material breach of, or in default under, any term or provision
        of any material indenture, mortgage, deed of trust, lease, note, loan or
        any
        other material agreement or instrument evidencing an obligation for borrowed
        money, or any other material agreement or instrument to which it is a party
        or
        by which it or any of its properties may be bound or affected. The Company
        is
        not in material violation of any provision of its charter or by-laws or in
        material violation of any franchise, license, permit, judgment, decree or
        order,
        or to its knowledge in material violation of any statute, rule or regulation.
        Neither the execution and delivery of the Offering Materials nor the issuance
        and sale or delivery of the Securities, nor the consummation of any of the
        transactions contemplated in the Offering Materials nor the compliance by
        the
        Company with the terms and provisions hereof or thereof, has conflicted with
        or
        will conflict with, or has resulted in or will result in a breach of, any
        of the
        terms and provisions of, or has constituted or will constitute a default
        under,
        or has resulted in or will result in the creation or imposition of any lien,
        charge or encumbrance upon any property or assets of the Company or pursuant
        to
        the terms of any indenture, mortgage, deed of trust, note, loan or any other
        agreement or instrument evidencing an obligation for borrowed money, or any
        other agreement or instrument to which the Company may be bound or to which
        any
        of the property or assets of the Company is subject except (a) where such
        default, lien, charge or encumbrance would not have a material adverse effect
        on
        the Company and (b) as described in the Offering Materials; nor will such
        action
        result in any violation of the provisions of the charter or the by-laws of
        the
        Company or, assuming the due performance by the Placement Agent of its
        obligations hereunder, any material statute or any material order, rule or
        regulation applicable to the Company of any court or of any foreign, federal,
        state or other regulatory authority or other government body having jurisdiction
        over the Company.

       

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

      (ix) Subsequent
        to the dates as of which information is given in the Offering Materials,
        and
        except as may otherwise be indicated or contemplated herein or therein the
        Company has not (a) except for the issuance in the ordinary course of options
        to
        purchase common stock to employees, officers and directors of the Company,
        issued any securities or incurred any liability or obligation, direct or
        contingent, for borrowed money, or (b) entered into any transaction other
        than
        in the ordinary course of business, or (c) declared or paid any dividend
        or made
        any other distribution on or in respect of its capital stock. Except as
        described in the Offering Materials, the Company has no outstanding obligations
        to any officer or director of the Company other than normal payable in
        connection with services provided recently.

       

      (x) There
        are
        no claims for services in the nature of a finder’s or origination fee with
        respect to the sale of the Common Stock or any other arrangements, agreements
        or
        understandings that may affect the Placement Agent's compensation, as determined
        by the National Association of Securities Dealers, Inc.

       

      (xi) The
        Company owns or possesses, free and clear of all liens or encumbrances and
        rights thereto or therein by third parties, the requisite licenses or other
        rights to use all trademarks, service marks, copyrights, service names, trade
        names, patents, patent applications and licenses necessary to conduct its
        business (including, without limitation, any such licenses or rights described
        in the Offering Materials as being owned or possessed by the Company) and,
        except as set forth in the Offering Materials, there is no claim or action
        by
        any person pertaining to, or proceeding, pending or threatened, which challenges
        the exclusive rights of the Company with respect to any trademarks, service
        marks, copyrights, service names, trade names, patents, patent applications
        and
        licenses used in the conduct of the Company’s businesses (including, without
        limitation, any such licenses or rights described in the Offering Materials
        as
        being owned or possessed by the Company) except any claim or action that
        would
        not have a material adverse effect on the Company; the Company’s current
        products, services or processes do not infringe or will not infringe on the
        patents currently held by any third party.

       

      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

      (xii) Subject
        to the performance by the Placement Agent of its obligations
        hereunder
        the
        offer and sale of the Securities complies,
        and
        will continue to comply,
        in all
        material respects with the requirements of Rule 506 of Regulation D promulgated
        by the SEC pursuant to the 1933 Act and any other applicable federal and
        state
        laws, rules, regulations and executive orders. Neither the Offering Materials
        nor any amendment or supplement thereto nor any documents prepared by the
        Company in connection with the Offering will contain any untrue statement
        of a
        material fact or omit to state any material fact required to be stated therein
        or necessary to make the statements therein, in light of the circumstances
        under
        which they were made, not misleading. All statements of material facts in
        the
        Offering Materials are true and correct as of the date of the Offering
        Materials.

       

      (xiii) All
        material
        taxes which are due and payable from the Company have been paid in full or
        adequate provision has been made for such taxes on the books of the
        Company,
        except
        for those taxes disputed in good faith by
        the
        Company. 

       

      (xiv) None
        of
        the Company nor any of its officers, directors, employees or agents, nor
        any
        other person acting on behalf of the Company, has, directly or indirectly,
        given
        or agreed to give any money, gift or similar benefit (other than legal price
        concessions to customers in the ordinary course of business) to any customer,
        supplier, employee or agent of a customer or supplier, or official or employee
        of any governmental agency or instrumentality of any government (domestic
        or
        foreign) or any political party or candidate for office (domestic or foreign)
        or
        other person who is or may be in a position to help or hinder the business
        of
        the Company (or assist it in connection with any actual or proposed transaction)
        which (A) might subject the Company to any damage or penalty in any civil,
        criminal or governmental litigation or proceeding, or (B) if not given in
        the
        past, might have had a materially adverse effect on the assets, business
        or
        operations of the Company as reflected in any of the financial statements
        contained in the Offering Materials, or (C) if not continued in the future,
        might adversely affect the assets, business, operations or prospects of the
        Company in the future.

       

      5. Certain
        Covenants and Agreements of the Company.

       

      The
        Company covenants and agrees at its expense and without any expense to the
        Placement Agent as follows:

       

      A. To
        advise
        the Placement Agent of
        any
        material adverse change in the Company’s financial condition, prospects or
        business or of any development materially affecting the Company or rendering
        untrue or misleading any material statement in the Offering Materials occurring
        at any time as soon as the Company is either informed or becomes aware
        thereof.

       

      B. To
        use
        its commercially reasonable efforts to cause the Common Stock issuable in
        connection with the Standby Equity Distribution Agreement to be qualified
        or
        registered for sale on terms consistent with those stated in the Registration
        Rights Agreement and under the securities laws of such jurisdictions as the
        Placement Agent shall reasonably request. Qualification, registration and
        exemption charges and fees shall be at the sole cost and expense of the
        Company.

       

      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

      C. Upon
        written request, to provide and continue to provide the Placement Agent copies
        of all quarterly financial statements and audited annual financial statements
        prepared by or on behalf of the Company, other reports prepared by or on
        behalf
        of the Company for public disclosure and all documents delivered to the
        Company’s stockholders.

       

      D. To
        comply
        with the terms of the Offering Materials.

       

      E. To
        ensure
        that any transactions between or among the Company, or any of its officers,
        directors and affiliates be on terms and conditions that are no less favorable
        to the Company, than the terms and conditions that would be available in
        an
“arm’s length” transaction with an independent third party.

       

      F. Upon
        the
        effectiveness of a registration statement covering the Securities, the Company
        shall promptly provide the Placement Agent an opinion of Counsel to the Company,
        which opinion shall be in form and substance reasonably satisfactory to and
        the
        Placement Agent.

       

      G. At
        or
        prior to the Closing, the Company shall have been furnished such documents,
        certificates and opinions as it may reasonably require for the purpose of
        enabling the Placement Agent to review or pass upon the matters referred
        to in
        this Agreement and the Offering Materials, or in order to evidence the accuracy,
        completeness or satisfaction of any of the representations, warranties or
        conditions herein contained.

       

      6. Indemnification
        and Limitation of Liability.

       

      A. The
        Company hereby agrees that it will indemnify and hold the Placement Agent
        and
        each officer, director, shareholder, employee or representative of the Placement
        Agent and each person controlling, controlled by or under common control
        with
        the Placement Agent within the meaning of Section 15 of the 1933 Act or Section
        20 of the 1934 Act or the SEC’s Rules and Regulations promulgated thereunder
        (the “Rules
        and Regulations”),
        harmless from and against any and all loss, claim, damage, liability, cost
        or
        expense whatsoever (including, but not limited to, any and all reasonable
        legal
        fees and other expenses and disbursements incurred in connection with
        investigating, preparing to defend or defending any action, suit or proceeding,
        including any inquiry or investigation, commenced or threatened, or any claim
        whatsoever or in appearing or preparing for appearance as a witness in any
        action, suit or proceeding, including any inquiry, investigation or pretrial
        proceeding such as a deposition) to which the Placement Agent or such
        indemnified person of the Placement Agent may become subject under the 1933
        Act,
        the 1934 Act, the Rules and Regulations, or any other federal or state law
        or
        regulation, common law or otherwise, arising out of or based upon (i) any
        untrue
        statement or alleged untrue statement of a material fact contained in (a)
        Section 4 of this Agreement, (b) the Offering Materials (except those written
        statements relating to the Placement Agent given by the
        Placement Agent
        for
        inclusion therein), (c) any application or other document or written
        communication executed by the Company or based upon written information
        furnished by the Company filed in any jurisdiction in order to qualify the
        Common Stock under the securities laws thereof, or any state securities
        commission or agency; (ii) the omission or alleged omission from documents
        described in clauses (a), (b) or (c) above of a material fact required to
        be
        stated therein or necessary to make the statements therein not misleading;
        or
        (iii) the breach of any representation, warranty, covenant or agreement made
        by
        the Company in this Agreement. The Company further agrees that upon demand
        by an
        indemnified person, at any time or from time to time, it will promptly reimburse
        such indemnified person for any loss, claim, damage, liability, cost or expense
        actually and reasonably paid by the indemnified person as to which the Company
        has indemnified such person pursuant hereto. Notwithstanding the foregoing
        provisions of this Paragraph 7(A), any such payment or reimbursement by the
        Company of fees, expenses or disbursements incurred by an indemnified person
        in
        any proceeding in which a final judgment by a court of competent jurisdiction
        (after all appeals or the expiration of time to appeal) is entered against
        the
        Placement Agent or such indemnified person based upon specific finding of
        fact
        that the Placement Agent or such indemnified person’s gross negligence or
        willful misfeasance will be promptly repaid to the Company.

       

      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

      

      B. The
        Placement Agent hereby agrees that it will indemnify and hold the Company
        and
        each officer, director, shareholder, employee or representative of the Company,
        and each person controlling, controlled by or under common control with the
        Company within the meaning of Section 15 of the 1933 Act or Section 20 of
        the
        1934 Act or the Rules and Regulations, harmless from and against any and
        all
        loss, claim, damage, liability, cost or expense whatsoever (including, but
        not
        limited to, any and all reasonable legal fees and other expenses and
        disbursements incurred in connection with investigating, preparing to defend
        or
        defending any action, suit or proceeding, including any inquiry or
        investigation, commenced or threatened, or any claim whatsoever or in appearing
        or preparing for appearance as a witness in any action, suit or proceeding,
        including any inquiry, investigation or pretrial proceeding such as a
        deposition) to which the Company or such indemnified person of the Company
        may
        become subject under the 1933 Act, the 1934 Act, the Rules and Regulations,
        or
        any other federal or state law or regulation, common law or otherwise, arising
        out of or based upon (i) the material
        breach of any representation, warranty, covenant or agreement made by the
        Placement Agent in this Agreement, or (ii)
        any
        false or misleading information provided to the Company in
        writing by
        one of
        the Placement Agent’s indemnified persons
        specifically for inclusion in the Offering Materials.

       

      C. Promptly
        after receipt by an indemnified party of notice of commencement of any action
        covered by Section 7(A) or (B), the party to be indemnified shall, within
        five
        (5) business days, notify the indemnifying party of the commencement thereof;
        the omission by one (1) indemnified party to so notify the indemnifying
        party shall not relieve the indemnifying party of its obligation to indemnify
        any other indemnified party that has given such notice and shall not relieve
        the
        indemnifying party of any liability outside of this indemnification if not
        materially prejudiced thereby. In the event that any action is brought against
        the indemnified party, the indemnifying party will be entitled to participate
        therein and, to the extent it may desire, to assume and control the defense
        thereof with counsel chosen by it which is reasonably acceptable to the
        indemnified party. After notice from the indemnifying party to such indemnified
        party of its election to so assume the defense thereof, the indemnifying
        party
        will not be liable to such indemnified party under such Section 7(A) or (B),
        for
        any legal or other expenses subsequently incurred by such indemnified party
        in
        connection with the defense thereof, but the indemnified party may, at its
        own
        expense, participate in such defense by counsel chosen by it, without, however,
        impairing the indemnifying party’s control of the defense. Subject to the
        proviso of this sentence and notwithstanding any other statement to the contrary
        contained herein, the indemnified party or parties shall have the right to
        choose its or their own counsel and control the defense of any action, all
        at
        the expense of the indemnifying party if (i) the employment of such
        counsel
        shall have been authorized in writing by the indemnifying party in connection
        with the defense of such action at the expense of the indemnifying party,
        or
        (ii) the indemnifying party shall not have employed counsel reasonably
        satisfactory to such indemnified party to have charge of the defense of such
        action within a reasonable time after notice of commencement of the action,
        or
        (iii) such indemnified party or parties shall have reasonably concluded that
        there may be defenses available to it or them which are different from or
        additional to those available to one or all of the indemnifying parties (in
        which case the indemnifying parties shall not have the right to direct the
        defense of such action on behalf of the indemnified party or parties), in
        any of
        which events such reasonable fees and expenses of one additional counsel
        shall
        be borne by the indemnifying party; provided, however, that the indemnifying
        party shall not, in connection with any one action or separate but substantially
        similar or related actions in the same jurisdiction arising out of the same
        general allegations or circumstance, be liable for the reasonable fees and
        expenses of more than one separate firm of attorneys at any time for all
        such
        indemnified parties. No settlement of any action or proceeding against an
        indemnified party shall be made without the consent of the indemnifying
        party.

       

      
        
          
          

        

        
          8

          
            

          

        

        
          
          

        

      

      D. In
        order
        to provide for just and equitable contribution in circumstances in which
        the
        indemnification provided for in Section 7(A) or 7(B) is due in accordance
        with
        its terms but is for any reason held by a court to be unavailable on grounds
        of
        policy or otherwise, the Company and the Placement Agent shall contribute
        to the
        aggregate losses, claims, damages and liabilities (including legal or other
        expenses reasonably incurred in connection with the investigation or defense
        of
        same) which the other may incur in such proportion so that the Placement
        Agent
        shall be responsible for such percent of the aggregate of such losses, claims,
        damages and liabilities as shall equal the percentage of the gross proceeds
        paid
        to the Placement Agent and the Company shall be responsible for the balance;
        provided, however, that no person guilty of fraudulent misrepresentation
        within
        the meaning of Section 11(f) of the 1933 Act shall be entitled to contribution
        from any person who was not guilty of such fraudulent misrepresentation.
        For
        purposes of this Section 7(D), any person controlling, controlled by or under
        common control with the Placement Agent, or any partner, director, officer,
        employee, representative or any agent of any thereof, shall have the same
        rights
        to contribution as the Placement Agent and each person controlling, controlled
        by or under common control with the Company within the meaning of Section
        15 of
        the 1933 Act or Section 20 of the 1934 Act and each officer of the Company
        and
        each director of the Company shall have the same rights to contribution as
        the
        Company. Any party entitled to contribution will, promptly after receipt
        of
        notice of commencement of any action, suit or proceeding against such party
        in
        respect of which a claim for contribution may be made against the other party
        under this Section 7(D), notify such party from whom contribution may be
        sought,
        but the omission to so notify such party shall not relieve the party from
        whom
        contribution may be sought from any obligation they may have hereunder or
        otherwise if the party from whom contribution may be sought is not materially
        prejudiced thereby. 

       

      E. The
        indemnity and contribution agreements contained in this Section 7 shall remain
        operative and in full force and effect regardless of any investigation made
        by
        or on behalf of any indemnified person or any termination of this
        Agreement.

       

      F. The
        Company hereby waives, to the fullest extent permitted by law, any right
        to or
        claim of any punitive, exemplary, incidental, indirect, special, consequential
        or other damages (including, without limitation, loss of profits) against
        the
        Placement Agent and each officer, director, shareholder, employee or
        representative of the placement agent and each person controlling, controlled
        by
        or under common control with the Placement Agent within the meaning of Section
        15 of the 1933 Act or Section 20 of the 1934 Act or the Rules and Regulations
        arising out of any cause whatsoever (whether such cause be based in contract,
        negligence, strict liability, other tort or otherwise). Notwithstanding anything
        to the contrary contained herein, the aggregate liability of the Placement
        Agent
        and each officer, director, shareholder, employee or representative of the
        Placement Agent and each person controlling, controlled by or under common
        control with the Placement Agent within the meaning of Section 15 of the
        1933
        Act or Section 20 of the 1934 Act or the Rules and Regulations shall not
        exceed
        the compensation received by the Placement Agent pursuant to Section 2 hereof.
        This limitation of liability shall apply regardless of the cause of action,
        whether contract, tort (including, without limitation, negligence) or breach
        of
        statute or any other legal or equitable obligation.

       

      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      

      7. Payment
        of Expenses.

       

      The
        Company hereby agrees to bear all of the expenses in connection with the
        Offering, including, but not limited to the following: filing fees, printing
        and
        duplicating costs, advertisements, postage and mailing expenses with respect
        to
        the transmission of Offering Materials, registrar and transfer agent fees,
        fees
        of the Company’s counsel and accountants, issue and transfer taxes, if any.

       

      8. Termination.

       

      This
        Agreement shall be co-terminus with, and terminate upon the same terms and
        conditions as those set forth in the Standby Equity Distribution Agreement.
        

       

      9. Miscellaneous.

       

      A. This
        Agreement may be executed in any number of counterparts, each of which shall
        be
        deemed to be an original, but all which shall be deemed to be one and the
        same
        instrument.

       

      B. Any
        notice required or permitted to be given hereunder shall be given in writing
        and
        shall be deemed effective when deposited in the United States mail, postage
        prepaid, or when received if personally delivered or faxed (upon confirmation
        of
        receipt received by the sending party), addressed as follows
        to such
        other address of which written notice is given to the others):

       

      
        	
                If
                  to Placement Agent, to:

              	
                Monitor
                  Capital, Inc.

              
	 	
                9171
                  Towne Centre Drive, Suite 465

              
	 	
                San
                  Diego, CA 92122

              
	 	
                Attention: Hsiao-Wen
                  Kao

              
	 	
                Telephone: (858)
                  546-8007

              
	 	
                Facsimile: (858)
                  546-8756

              
	 	 
	
                If
                  to the Company, to:

              	
                Titan
                  Pharmaceuticals, Inc.

              
	 	
                400
                  Oyster Point Blvd. - Suite 505

              
	 	
                San
                  Francisco, CA 94080

              
	 	
                Attention: Robert
                  E. Farrell, Chief Financial Officer

              
	 	
                Telephone: (650)
                  244-4990

              
	 	
                Facsimile: (866)
                  449-8519

              
	 	 
	
                With
                  a copy to:

              	
                Loeb
                  & Loeb, LLP

              
	 	
                345
                  Park Avenue

              
	 	
                New
                  York, NY 10154-0037

              
	 	
                Attention: Fran
                  Stoller

              
	 	
                Telephone:
                   (212)
                  407-4935

              
	 	
                Facsimile:
                   (212)
                  214-0706

              
	 	 
	 	 

      

       

       

      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

      

      C. This
        Agreement shall be governed by and construed in all respects under the laws
        of
        the State of New Jersey, without reference to its conflict of laws rules
        or
        principles. Any suit, action, proceeding or litigation arising out of or
        relating to this Agreement shall be brought and prosecuted in such federal
        or
        state court or courts located within the State of Florida as provided by
        law.
        The parties hereby irrevocably and unconditionally consent to the jurisdiction
        of each such court or courts located within the State of Florida and to service
        of process by registered or certified mail, return receipt requested, or
        by any
        other manner provided by applicable law, and hereby irrevocably and
        unconditionally waive any right to claim that any suit, action, proceeding
        or
        litigation so commenced has been commenced in an inconvenient
        forum.

       

      D. This
        Agreement and the other agreements referenced herein contain the entire
        understanding between the parties hereto and may not be modified or amended
        except by a writing duly signed by the party against whom enforcement of
        the
        modification or amendment is sought.

       

      E. If
        any
        provision of this Agreement shall be held to be invalid or unenforceable,
        such
        invalidity or unenforceability shall not affect any other provision of this
        Agreement.

       

      [REMAINDER
        OF PAGE INTENTIALLY LEFT BLANK]

      
         

        
          
            
            

          

          
            11

            
              

            

          

          
            
            

          

        

      

      

      

      IN
        WITNESS WHEREOF,
        the
        parties hereto have executed this Placement Agent Agreement as of the date
        first
        written above.

       

      
        	 	 	 
	 	
                Titan
                  Pharmaceuticals, Inc.

              	 
	 	 	 
	 	
                By:      

              	 
	 	
                Name: 

              	 
	 	
                Title: 

              	 
	 	 	 
	 	 	 
	 	 	 
	 	
                Monitor
                  Capital, Inc.

              	 
	 	 	 
	 	
                By:      

              	 
	 	
                Name: Hsiao-Wen
                  Kao

              	 
	 	
                Title: President

              	 
	 	 	 
	 	 	 
	 	
                Cornell
                  Capital Partners, LP

              	 
	 	 	 
	 	
                By: Yorkville
                  Advisors, LLC

              	 
	 	
                Its: General
                  Partner

              	 
	 	 	 
	 	
                By:      

              	 
	 	
                Name: Mark
                  A. Angelo

              	 
	 	
                Title: Portfolio
                  Manager

              	 

      

      

       

      
        
          
          

        

        
          12

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