Document:

Exhibit 4.1

 

[FACE
OF CERTIFICATE]

 

Number

 

[LOGO]

 

TAPESTRY
Pharmaceuticals

TAPESTRY
PHARMACEUTICALS, INC.

INCORPORATED
UNDER THE LAWS OF THE STATE OF DELAWARE

 

COMMON
STOCK

Shares

CUSIP
876031 20 4

 

SEE
REVERSE FOR CERTAIN DEFINITIONS

 

THIS
IS TO CERTIFY that 

is
the owner of 

fully
paid and non-assessable shares of Common Stock of the par value of seventy-five
hundredths of One Cent ($.0075) each of 

Tapestry
Pharmaceuticals, Inc. 

transferable
on the books of the Corporation by holder hereof in person or by duly
authorized attorney upon the surrender of this Certificate properly endorsed.
This Certificate is not valid until countersigned by the Transfer Agent and
Registrar.

 

WITNESS
the facsimile seal of the Corporation and the facsimile signatures of its duly
authorized officers.

 

	
  Dated:

  
	
  /s/

  	
   

  
	
  SECRETARY

  
	
  [SEAL]

  
	
  /s/

  	
   

  
	
  CHAIRMAN

  
	
  COUNTERSIGNED
  AND REGISTERED:

  
	
  AMERICAN
  STOCK TRANSFER & TRUST COMPANY

  
	
  (New
  York, N.Y.)

  
	
  TRANSFER
  AGENT AND REGISTRAR

  
	
  BY

  
	
  AUTHORIZED
  SIGNATURE

  

 

[REVERSE
OF CERTIFICATE]

 

TAPESTRY
PHARMACEUTICALS, INC.

 

The
Corporation will furnish without charge to any stockholder who so requests a full
statement of, and the authority of the Board of Directors to fix, the
designation, relative rights, preferences and limitations of the shares of each
class of stock, or series thereof, authorized to be issued.

 

The
following abbreviations, when used in the inscription on the face of this
certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:

 

TEN
COM - as tenants in common

TEN
ENT - as tenants by the entireties

JT
TEN - as joint tenants with right of survivorship and not as tenants in common

 

Additional
abbreviations may also be used though not in the above list.

 

For
Value Received,           
hereby sell, assign and transfer unto

 

PLEASE
INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE

 

(PLEASE
PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING ZIP CODE, OF ASSIGNEE)

 

shares
of the capital stock represented by the within Certificate, and do hereby
irrevocably constitute and appoint

 

 

Attorney
to transfer the said stock on the books of the within named Corporation with
full power of substitution in the premises.

 

Dated

 

NOTICE:
THE SIGNATURE(S) TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME(S) AS WRITTEN
UPON THE FACE OF THE CERTIFICATE IN EVERY PARTICULAR, WITHOUT ALTERATION OR
ENLARGEMENT OR ANY CHANGE WHATEVER.Exhibit 10.1

 

EXECUTION COPY

 

PURCHASE
AGREEMENT

 

THIS PURCHASE
AGREEMENT (“Agreement”) is made as of the 2nd day of February, 2006 by and
among Tapestry Pharmaceuticals, Inc., a Delaware corporation (the “Company”),
and the Investors set forth on the signature pages affixed hereto (each an
“Investor” and collectively the “Investors”).

 

Recitals

 

A.                                   The
Company and the Investors are executing and delivering this Agreement in
reliance upon the exemption from securities registration afforded by the
provisions of Regulation D (“Regulation D”), as promulgated by the U.S.
Securities and Exchange Commission (the “SEC”) under the Securities Act of
1933, as amended; and

 

B.                                     The
Investors wish to purchase from the Company, and the Company wishes to sell and
issue to the Investors, upon the terms and conditions stated in this Agreement,
(i) the number of shares of the Company’s Common Stock, par value $0.0075
per share (together with any securities into which such shares may be
reclassified, the “Common Stock”), determined in accordance with the terms of
this Agreement at a per share purchase price equal to $2.00 (after giving
effect to the Reverse Split) (the “Shares”), and (ii) warrants to purchase
an aggregate number of shares of Common Stock (subject to adjustment) equal to
the number of shares of Common Stock acquired by the Investors pursuant to
clause (i) above at a per share exercise price equal to $2.40 (after
giving effect to the Reverse Split) (subject to adjustment as set forth
therein) in the form attached hereto as Exhibit A (the “Warrants”); and

 

C.                                     Contemporaneous
with the sale of the Common Stock and Warrants, the parties hereto will execute
and deliver a Registration Rights Agreement, in the form attached hereto as Exhibit B
(the “Registration Rights Agreement”), pursuant to which the Company will agree
to provide certain registration rights under the Securities Act of 1933, as
amended, and the rules and regulations promulgated thereunder, and
applicable state securities laws with respect to the Securities.

 

In
consideration of the mutual promises made herein and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:

 

1.                                       Definitions.  In addition to those terms defined above and
elsewhere in this Agreement, for the purposes of this Agreement, the following
terms shall have the meanings set forth below:

 

“Affiliate”
means, with respect to any Person, any other Person which directly or
indirectly through one or more intermediaries Controls, is controlled by, or is
under common control with, such Person.

 

“Alternative
Investment” means the issuance or sale of any equity securities, debt
securities or material assets of the Company or any of its Subsidiaries, or any
merger, material 

 

 

joint venture or disposition or transfer of control of all or any
material portion of the Company’s or any of its Subsidiaries’ respective
businesses, in each case whether by way of any business combination, purchase
of equity securities, purchase of assets, license, lease, tender or exchange
offer or otherwise, to any Person other than, with respect to any such
transaction other than a Counter Proposal, the Investors or any of their
Affiliates.

 

“Board”
means the board of directors of the Company.

 

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

 

“Company’s
Knowledge” means the actual knowledge of the executive officers (as defined
in Rule 405 under the 1933 Act) of the Company, after due inquiry.

 

“Confidential
Information” means trade secrets, confidential information and know-how
(including but not limited to ideas, formulae, compositions, processes,
procedures and techniques, research and development information, computer
program code, performance specifications, support documentation, drawings,
specifications, designs, business and marketing plans, and customer and
supplier lists and related information).

 

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

 

“Effective
Date” means the date on which the initial Registration Statement is
declared effective by the SEC.

 

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

 

“Independent
Directors” means the directors of the Company who are “Independent
Directors,” as defined in The Nasdaq Stock Market’s Marketplace Rule 4200(a)(15)
as in effect on the date hereof.

 

“Intellectual
Property” means all of the following: (i) patents, patent
applications, patent disclosures and inventions (whether or not patentable and
whether or not reduced to practice); (ii) trademarks, service marks, trade
dress, trade names, corporate names, logos, slogans and Internet domain names,
together with all goodwill associated with each of the foregoing; (iii) copyrights
and copyrightable works; (iv) registrations, applications and renewals for
any of the foregoing; and (v) proprietary computer software (including but
not limited to data, data bases and documentation).

 

“Material
Adverse Effect” means a material adverse effect on (i) the assets,
liabilities, results of operations, condition (financial or otherwise),
business, or prospects of the 

 

2

 

Company and its Subsidiaries taken as a whole, or (ii) the ability
of the Company to perform its obligations under the Transaction Documents.

 

“Nasdaq”
means The Nasdaq Stock Market, Inc.

 

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

 

“Proposal”
has the meaning set forth in Section 7.9.

 

“Purchase
Price” means the aggregate purchase price for the Shares and the Warrants
to be acquired by the Investors in accordance with the terms hereof.

 

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

 

“Reverse
Split” means a one-for-10 reverse split of the Common Stock that does not
alter the number of shares of Common Stock the Company is authorized to issue.

 

“SEC
Filings” has the meaning set forth in Section 4.6.

 

“Securities”
means the Alternative Warrants, the Shares, the Warrants and the Warrant
Shares.

 

“Subsidiary”
of any Person means another Person, an amount of the voting securities, other
voting ownership or voting partnership interests of which is sufficient to
elect at least a majority of its Board of Directors or other governing body
(or, if there are no such voting interests, 50% or more of the equity interests
of which) is owned directly or indirectly by such first Person.

 

“Superior
Proposal” means any Alternative Investment that (i) the Board
reasonably determines (after consultation with a financial advisor of
nationally recognized reputation) to be (A) more favorable to the Company’s
stockholders from a financial point of view than the sale of the Shares and the
Warrants hereunder (taking into account all the terms and conditions of such
proposal and this Agreement and any other factors as the Board deems relevant)
and (B) reasonably capable of being completed on the terms so proposed,
taking into account all financial, legal, regulatory and other aspects of such
proposal, (ii) was not solicited by the Company after the date hereof, (iii) was
proposed after the date hereof and (iv) did not otherwise result from a breach
of Section 7.13(a).

 

“Transaction
Documents” means this Agreement, the Alternative Warrants, the Warrants and
the Registration Rights Agreement.

 

3

 

“Warrant
Shares” means the shares of Common Stock issuable upon the exercise of the
Alternative Warrants or the Warrants, as the case may be.

 

“1933 Act”
means the Securities Act of 1933, as amended, or any successor statute, and the
rules and regulations promulgated thereunder.

 

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

 

2.                                       Purchase
and Sale of the Shares and the Warrants. 
Subject to the terms and conditions of this Agreement, on the Closing
Date, each of the Investors shall severally, and not jointly, purchase, and the
Company shall sell and issue to the Investors, the Shares and the Warrants in
the respective amounts set forth opposite the Investors’ names on the signature
pages attached hereto in exchange for the Purchase Price as specified in Section 3
below.

 

3.                                       Closing;
Payment of Purchase Price.  Upon
confirmation that the other conditions to closing specified herein have been
satisfied or duly waived by the Investors, the Company shall deliver to Lowenstein
Sandler PC, in trust, a certificate or certificates, registered in such name or
names as the Investors may designate, representing the Shares and the Warrants,
with instructions that such certificates are to be held for release to a
particular Investor only upon payment in full of the portion of the Purchase
Price to be paid to the Company by such Investor.  Upon such receipt by Lowenstein Sandler PC of
the certificates, each Investor shall promptly, but no more than one Business
Day thereafter, cause a wire transfer in same day funds to be sent to the
account of the Company as instructed in writing by the Company, in an amount
representing such Investor’s pro rata portion of the Purchase Price as set
forth on the signature pages to this Agreement.  On the date the Company receives the Purchase
Price (the “Closing Date”), the certificates evidencing the Shares and the
Warrants shall be released to the Investors (the “Closing”).  The Closing of the purchase and sale of the
Shares and the Warrants shall take place at the offices of Lowenstein Sandler
PC, 1251 Avenue of the Americas, 18th Floor, New York, New York 10020, or at
such other location and on such other date as the Company and the Investors
shall mutually agree.

 

4.                                       Representations
and Warranties of the Company.  The
Company hereby represents and warrants to the Investors that, except as set
forth in the schedules delivered herewith (collectively, the “Disclosure
Schedules”):

 

4. 1                              Organization, Good
Standing and Qualification.  Each of
the Company and its Subsidiaries is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation and has all requisite corporate power and authority to carry on
its business as now conducted and to own its properties.  Each of the Company and its Subsidiaries is
duly qualified to do business as a foreign corporation and is in good standing
in each jurisdiction in which the conduct of its business or its ownership or
leasing of property makes such qualification or leasing necessary unless the
failure to so qualify has not had and could not reasonably be expected to have
a Material Adverse Effect.  The Company’s
Subsidiaries are listed on Schedule 4.1 hereto.

 

4

 

4.2                                 Authorization.  The Company has full power and authority and,
except for approval of the Proposal by its stockholders as contemplated in Section 7.9, has taken all requisite action on
the part of the Company, its officers, directors and stockholders necessary for
(i) the authorization, execution and delivery of the Transaction
Documents, (ii) the authorization of the performance of all obligations of
the Company hereunder or thereunder, (iii) the authorization, issuance (or
reservation for issuance) and delivery of the Securities and (iv) the
effectuation of the Reverse Split.  This Agreement constitutes, and the other
Transaction Documents will constitute when executed and delivered, the legal,
valid and binding obligations of the Company, enforceable against the Company
in accordance with their terms, subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general applicability,
relating to or affecting creditors’ rights generally.

 

4.3                                 Capitalization.  Schedule 4.3 sets forth (a) the
authorized capital stock of the Company on the date hereof; (b) the number
of shares of capital stock issued and outstanding; (c) the number of
shares of capital stock issuable pursuant to the Company’s stock plans; and (d) the
number of shares of capital stock issuable and reserved for issuance pursuant
to securities (other than the Shares, the Alternative Warrants and the
Warrants) exercisable for, or convertible into or exchangeable for any shares
of capital stock of the Company.  All of
the issued and outstanding shares of the Company’s capital stock have been duly
authorized and validly issued and are fully paid, nonassessable and free of pre-emptive
rights and were issued in full compliance with applicable state and federal
securities law and any rights of third parties. 
Except as described on Schedule 4.3, all of the issued and
outstanding shares of capital stock of each Subsidiary have been duly
authorized and validly issued and are fully paid, nonassessable and free of pre-emptive
rights, were issued in full compliance with applicable state and federal
securities law and any rights of third parties and are owned by the Company,
beneficially and of record, subject to no lien, encumbrance or other adverse
claim.  Except as described on Schedule 4.3,
no Person is entitled to pre-emptive or similar statutory or contractual rights
with respect to any securities of the Company. 
Except as described on Schedule 4.3, there are no
outstanding warrants, options, convertible securities or other rights,
agreements or arrangements of any character under which the Company or any of
its Subsidiaries is or may be obligated to issue any equity securities of any
kind and except as contemplated by this Agreement, neither the Company nor any
of its Subsidiaries is currently in negotiations for the issuance of any equity
securities of any kind.  Except as
described on Schedule 4.3 and except for the Registration Rights
Agreement, there are no voting agreements, buy-sell agreements, option or right
of first purchase agreements or other agreements of any kind among the Company
and any of the securityholders of the Company relating to the securities of the
Company held by them.  Except as
described on Schedule 4.3 and except as provided in the
Registration Rights Agreement, no Person has the right to require the Company
to register any securities of the Company under the 1933 Act, whether on a
demand basis or in connection with the registration of securities of the
Company for its own account or for the account of any other Person.

 

Except as
described on Schedule 4.3, the issuance and sale of the Securities
hereunder will not obligate the Company to issue shares of Common Stock or
other securities to any other Person (other than the Investors) and will not
result in the adjustment of the exercise, conversion, exchange or reset price
of any outstanding security.

 

5

 

Except as
described on Schedule 4.3, the Company does not have outstanding
stockholder purchase rights or “poison pill” or any similar arrangement in
effect giving any Person the right to purchase any equity interest in the
Company upon the occurrence of certain events.

 

4.4                                 Valid
Issuance.  The Shares have been duly
and validly authorized and, when issued and paid for pursuant to this
Agreement, will be validly issued, fully paid and nonassessable, and shall be
free and clear of all encumbrances and restrictions (other than those created
by the Investors), except for restrictions on transfer set forth in the
Transaction Documents or imposed by applicable securities laws.  The Alternative Warrants and the Warrants
have been duly and validly authorized. 
Upon the due exercise of the Alternative Warrants or the Warrants, as
the case may be, the Warrant Shares will be validly issued, fully paid and non-assessable
free and clear of all encumbrances and restrictions, except for restrictions on
transfer set forth in the Transaction Documents or imposed by applicable
securities laws and except for those created by the Investors.  The Company has reserved a sufficient number
of shares of Common Stock for issuance upon the exercise of the Alternative
Warrants or the Warrants, as the case may be, free and clear of all
encumbrances and restrictions, except for restrictions on transfer set forth in
the Transaction Documents or imposed by applicable securities laws and except
for those created by the Investors.

 

4.5                                 Consents.  Except
for approval of the Proposal by the Company’s stockholders as contemplated in Section 7.9,
the execution, delivery and performance by the Company of the
Transaction Documents and the offer, issuance and sale of the Securities
require no consent of, action by or in respect of, or filing with, any Person,
governmental body, agency, or official other than filings that have been made
pursuant to applicable state securities laws and post-sale filings pursuant to
applicable state and federal securities laws which the Company undertakes to
file within the applicable time periods. 
Subject to the accuracy of the representations and warranties of each
Investor set forth in Section 5 hereof, the Company has taken all action
necessary to exempt (i) the issuance and sale of the Securities, (ii) the
issuance of the Warrant Shares upon due exercise of the Alternative Warrants or
the Warrants, as the case may be, and (iii) the other transactions
contemplated by the Transaction Documents from the provisions of any
stockholder rights plan or other “poison pill” arrangement, any anti-takeover,
business combination or control share law or statute binding on the Company or
to which the Company or any of its assets and properties may be subject and any
provision of the Company’s Certificate of Incorporation or Bylaws that is or
could reasonably be expected to become applicable to the Investors as a result
of the transactions contemplated hereby, including without limitation, the
issuance of the Securities and the ownership, disposition or voting of the
Securities by the Investors or the exercise of any right granted to the
Investors pursuant to this Agreement or the other Transaction Documents.

 

4.6                                 Delivery
of SEC Filings; Business.  The
Company has made available to the Investors through the EDGAR system, true and
complete copies of the Company’s most recent Annual Report on Form 10-K
for the fiscal year ended December 29, 2004 (the “10-K”), and all other
reports filed by the Company pursuant to the 1934 Act since the filing of the 10-K
and prior to the date hereof (collectively, the “SEC Filings”).  The SEC Filings are the only filings required
of the Company pursuant to the 1934 Act for such period.  The Company and its 

 

6

 

Subsidiaries are engaged in all material respects only in the business
described in the SEC Filings and the SEC Filings contain a complete and
accurate description in all material respects of the business of the Company
and its Subsidiaries, taken as a whole.

 

4.7                                 Use
of Proceeds.  The net proceeds of the
sale of the Shares and the Warrants hereunder shall be used by the Company in
accordance with the budget of the Company for the calendar years 2006 and 2007
adopted in accordance with Section 6.1(f), as such budget may be amended
or modified from time to time by the majority of the Independent
Directors.  Any proceeds remaining
following use as provided in the prior sentence shall be used by the Company
for general corporate purposes.

 

4.8                                 No
Material Adverse Change.  Since December 29,
2004, except for the Reverse Split and except as identified and described in
the SEC Filings or as described on Schedule 4.8, there has not
been:

 

(i)                                     any
change in the consolidated assets, liabilities, financial condition or
operating results of the Company from that reflected in the financial
statements included in the Company’s Quarterly Report on Form 10-Q for the
quarter ended September 28, 2005, except for changes in the ordinary
course of business which have not had and could not reasonably be expected to
have a Material Adverse Effect, individually or in the aggregate;

 

(ii)                                  any
declaration or payment of any dividend, or any authorization or payment of any
distribution, on any of the capital stock of the Company, or any redemption or
repurchase of any securities of the Company;

 

(iii)                               any
damage, destruction or loss, whether or not covered by insurance to any assets
or properties of the Company or its Subsidiaries, in each case in excess of
$25,000 individually or $50,000 in the aggregate;

 

(iv)                              any
waiver, not in the ordinary course of business, by the Company or any
Subsidiary of a material right or of a material debt owed to it;

 

(v)                                 any
satisfaction or discharge of any lien, claim or encumbrance by the Company or a
Subsidiary, except in the ordinary course of business and which is not material
to the assets, properties, financial condition, operating results or business
of the Company and its Subsidiaries taken as a whole (as such business is
presently conducted);

 

(vi)                              (A) any
change or amendment to the Company’s Certificate of Incorporation or Bylaws, or
(B) any material change to any material contract or arrangement that
requires the payment by any Person party thereto of at least $50,000 in the
aggregate in any fiscal year by which the Company or any Subsidiary is bound or
to which any of their respective assets or properties is subject, other than,
in the case of clause (B) above, any such change made in the ordinary
course of business;

 

(vii)                           any
material labor difficulties or labor union organizing activities with respect
to employees of the Company or any Subsidiary;

 

7

 

(viii)                        any
material transaction entered into by the Company or a Subsidiary other than in
the ordinary course of business;

 

(ix)                                the
loss of the services of any key employee, or material change in the composition
or duties of the senior management of the Company or any Subsidiary;

 

(x)                                   the
loss or threatened loss of any customer which has had or could reasonably be
expected to have a Material Adverse Effect; or

 

(xi)                                any
other event or condition of any character that has had or could reasonably be
expected to have a Material Adverse Effect.

 

4.9                                 SEC
Filings; S-3 Eligibility.

 

(a)                                  At
the time of filing thereof, the SEC Filings complied as to form in all material
respects with the requirements of the 1934 Act and did not contain any untrue
statement of a material fact or omit to state any material fact necessary in
order to make the statements made therein, in the light of the circumstances
under which they were made, not misleading.

 

(b)                                 Each
registration statement and any amendment thereto filed by the Company since January 1,
2003 pursuant to the 1933 Act and the rules and regulations thereunder, as
of the date such statement or amendment became effective, complied as to form
in all material respects with the 1933 Act and did not contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements made therein not
misleading; and each prospectus filed pursuant to Rule 424(b) under
the 1933 Act, as of its issue date and as of the closing of any sale of
securities pursuant thereto did not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements made therein, in the light of the
circumstances under which they were made, not misleading.

 

(c)                                  The
Company is eligible to use Form S-3 to register the Registrable Securities
(as such term is defined in the Registration Rights Agreement) for sale by the
Investors as contemplated by the Registration Rights Agreement.

 

4.10                           No
Conflict, Breach, Violation or Default. 
Subject to the approval of the Proposal by its stockholders as
contemplated in Section 7.9, the execution, delivery and performance of
the Transaction Documents by the Company and the issuance and sale of the
Securities will not conflict with or result in a breach or violation of any of
the terms and provisions of, or constitute a default under (i) the Company’s
Certificate of Incorporation or the Company’s Bylaws, both as in effect on the
date hereof (true and complete copies of which have been made available to the
Investors through the EDGAR system), or (ii)(a) any statute, rule,
regulation or order of any governmental agency or body or any court, domestic
or foreign, having jurisdiction over the Company, any Subsidiary or any of
their respective assets or properties, or (b) any agreement or instrument
to which the Company or any Subsidiary is a 

 

8

 

party or by which the Company or a Subsidiary is bound or to which any
of their respective assets or properties is subject, except, in the case of
clause (ii) above, for any conflict, breach, violation or default that has
not had or could not reasonably be expected to have a Material Adverse Effect.

 

4.11                           Tax
Matters.  The Company and each
Subsidiary has timely prepared and filed all tax returns required to have been
filed by the Company or such Subsidiary with all appropriate governmental
agencies and timely paid all taxes shown thereon or otherwise owed by it,
except where the failure to make such payment or filing has not had or could
not reasonably be expected to have a Material Adverse Effect.  The charges, accruals and reserves on the
books of the Company in respect of taxes for all fiscal periods are adequate in
all material respects, and there are no material unpaid assessments against the
Company or any Subsidiary for the assessment of any additional taxes, penalties
or interest for any fiscal period or audits by any federal, state or local
taxing authority except for any assessment which is not material to the Company
and its Subsidiaries, taken as a whole. 
All taxes and other assessments and levies that the Company or any
Subsidiary is required to withhold or to collect for payment have been duly
withheld and collected and paid to the proper governmental entity or third
party when due, except for any withholding, collection and payment that has not
had or could not reasonably be expected to have a Material Adverse Effect.  There are no tax liens or claims pending or,
to the Company’s Knowledge, threatened against the Company or any Subsidiary or
any of their respective assets or property. 
Except as described on Schedule 4.11, there are no
outstanding tax sharing agreements or other such arrangements between the
Company and any Subsidiary or other corporation or entity.

 

4.12                           Title
to Properties.  Except as disclosed
in the SEC Filings, the Company and each Subsidiary has good and marketable
title to all real properties and all other properties and assets owned by it,
in each case free from liens, encumbrances and defects that would materially
affect the value thereof or materially interfere with the use made thereof by
them; and except as disclosed in the SEC Filings, the Company and each
Subsidiary holds any leased real or personal property under valid and
enforceable leases with no exceptions that would materially interfere with the
use made thereof by them.

 

4.13                           Certificates,
Authorities and Permits.  The Company
and each Subsidiary possess adequate certificates, authorities or permits
issued by appropriate governmental agencies or bodies necessary to conduct the
business now operated by it, except where the failure to so possess has not had
or could not reasonably be expected to have a Material Adverse Effect,
individually or in the aggregate, and neither the Company nor any Subsidiary
has received any written notice of proceedings relating to the revocation or
modification of any such certificate, authority or permit that, if determined
adversely to the Company or such Subsidiary, could reasonably be expected to
have a Material Adverse Effect, individually or in the aggregate.

 

4.14                           Labor Matters.

 

(a)                                  Except as set forth on Schedule 4.14,
the Company is not a party to or bound by any collective bargaining agreements
or other agreements with labor organizations. 
The Company has not violated in any material respect any laws,
regulations, orders or contract 

 

9

 

terms, affecting the collective bargaining
rights of employees, labor organizations or any laws, regulations or orders
affecting employment discrimination, equal opportunity employment, or employees’
health, safety, welfare, wages and hours.

 

(b)                                 (i) There are no labor disputes
existing, or to the Company’s Knowledge, threatened, involving strikes, slow-downs,
work stoppages, job actions, disputes, lockouts or any other disruptions of or
by the Company’s employees, (ii) there are no unfair labor practices or
petitions for election pending or, to the Company’s Knowledge, threatened
before the National Labor Relations Board or any other federal, state or local
labor commission relating to the Company’s employees, (iii) no demand for
recognition or certification heretofore made by any labor organization or group
of employees is pending with respect to the Company and (iv) to the
Company’s Knowledge, the Company enjoys good labor and employee relations with
its employees and labor organizations.

 

(c)                                  The Company is, and at all times has been, in
compliance in all material respects with all applicable laws respecting
employment (including laws relating to classification of employees and
independent contractors) and employment practices, terms and conditions of
employment, wages and hours, and immigration and naturalization.  There are no claims pending against the
Company before the Equal Employment Opportunity Commission or any other
administrative body or in any court asserting any violation of Title VII of the
Civil Rights Act of 1964, the Age Discrimination Act of 1967, 42 U.S.C. §§ 1981
or 1983 or any other federal, state or local Law, statute or ordinance barring
discrimination in employment.

 

(d)                                 Except as disclosed in the SEC Filings or as
described on Schedule 4.14, the Company is not a party to, or bound
by, any employment or other contract or agreement that contains any severance,
termination pay or change of control liability or obligation, including,
without limitation, any “excess parachute payment,” as defined in Section 2806(b) of
the Internal Revenue Code.

 

(e)                                  Except as specified in Schedule 4.14,
to the Company’s Knowledge, each of the Company’s employees is a Person who is
either a United States citizen or a permanent resident entitled to work in the
United States.  To the Company’s
Knowledge, the Company has no liability for the improper classification by the
Company of such employees as independent contractors or leased employees prior
to the Closing.

 

4.15                           Intellectual
Property.  Except as described in Schedule 4.15:

 

(a)                                  All
Intellectual Property of the Company and its Subsidiaries owned by the Company
or any Subsidiary or licensed by any of them and necessary for the conduct of
their respective businesses is currently in compliance with all legal
requirements (including timely filings, proofs and payments of fees) and, to
the Company’s Knowledge, are valid and enforceable, subject, in the case of any
patent application, to any modification or other action that may be taken by
the Patent and Trademark Office.  No
Intellectual Property of the Company or its Subsidiaries which is necessary for
the conduct of Company’s and each of its Subsidiaries’ respective businesses as
currently conducted or as currently proposed to be conducted has been or is now
involved in any cancellation, dispute or litigation, and, to the 

 

10

 

Company’s Knowledge, no such action is threatened.  No patent of the Company or its Subsidiaries
has been or is now involved in any interference, reissue, re-examination or
opposition proceeding.

 

(b)                                 All
of the licenses and sublicenses and consent, royalty or other agreements
concerning Intellectual Property which are necessary for the conduct of the
Company’s and each of its Subsidiaries’ respective businesses as currently
conducted or as currently proposed to be conducted to which the Company or any
Subsidiary is a party or by which any of their assets are bound (other than
 generally commercially available, non-custom, off-the-shelf software
application programs having a retail acquisition price of less than $10,000 per
license) (collectively, “License Agreements”) are valid and binding obligations
of the Company or its Subsidiaries that are parties thereto and, to the Company’s
Knowledge, the other parties thereto, enforceable in accordance with their
terms, except to the extent that enforcement thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or
other similar laws affecting the enforcement of creditors’ rights generally,
and there exists no event or condition which will result in a material
violation or breach of or constitute (with or without due notice or lapse of
time or both) a default by the Company or any of its Subsidiaries under any
such License Agreement.

 

(c)                                  To
the Company’s Knowledge, the Company and its Subsidiaries own or have the valid
right to use all of the Intellectual Property that is necessary for the conduct
of the Company’s and each of its Subsidiaries’ respective businesses as
currently conducted or as currently proposed to be conducted and for the
ownership, maintenance and operation of the Company’s and its Subsidiaries’
properties and assets, free and clear of all liens, encumbrances, adverse
claims or obligations to license such owned Intellectual Property and
Confidential Information known to or created by the Company, other than
licenses entered into in the ordinary course of the Company’s and its Subsidiaries’
businesses.  The Company and its
Subsidiaries have a valid and enforceable right to use all third party
Intellectual Property and Confidential Information used or held for use in the
respective businesses of the Company and its Subsidiaries.

 

(d)                                 To
the Company’s Knowledge, the conduct of the Company’s and its Subsidiaries’
businesses as currently conducted does not infringe or otherwise impair or
conflict with (collectively, “Infringe”) any Intellectual Property rights of
any third party, or violate any confidentiality obligation owed by the Company
to a third party.  To the Company’s
Knowledge, the Intellectual Property and Confidential Information of the
Company and its Subsidiaries which are necessary for the conduct of Company’s
and each of its Subsidiaries’ respective businesses as currently conducted or
as currently proposed to be conducted are not being Infringed by any third
party.  There is no litigation or order
pending or outstanding or, to the Company’s Knowledge, threatened or imminent,
that seeks to limit or challenge or that concerns the ownership, use, validity
or enforceability of any Intellectual Property or Confidential Information of
the Company and its Subsidiaries and the Company’s and its Subsidiaries’ use of
any Intellectual Property or Confidential Information owned by a third party,
and, to the Company’s Knowledge, there is no valid basis for the same.

 

11

 

(e)                                  The
consummation of the transactions contemplated hereby and by the other
Transaction Documents will not result in the alteration, loss, impairment of or
restriction on the Company’s or any of its Subsidiaries’ ownership or right to
use any of the Intellectual Property or Confidential Information which is
necessary for the conduct of Company’s and each of its Subsidiaries’ respective
businesses as currently conducted or as currently proposed to be conducted.

 

(f)                                    The
Company and its Subsidiaries have taken reasonable steps to protect the Company’s
and its Subsidiaries’ rights in their Intellectual Property and Confidential
Information.  Each employee, consultant
and contractor who has had access to Confidential Information which is
necessary for the conduct of Company’s and each of its Subsidiaries’ respective
businesses as currently conducted or as currently proposed to be conducted has
executed an agreement to maintain the confidentiality of such Confidential
Information and has executed appropriate agreements that are substantially
consistent with the Company’s standard forms thereof.  Except under confidentiality obligations,
there has been no material disclosure of any of the Company’s or its
Subsidiaries’ Confidential Information to any third party.

 

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

 

4.17                           Litigation.  Except as described on Schedule 4.17,
there are no pending actions, suits or proceedings against or affecting the
Company, its Subsidiaries or any of its or their properties that have had or
could reasonably be expected to have a Material Adverse Effect, individually or
in the aggregate; and to the Company’s Knowledge, no such actions, suits or
proceedings are threatened or contemplated.

 

4.18                           Financial
Statements.  The financial statements
included in each SEC Filing present fairly, in all material respects, the
consolidated financial position of the Company as of the dates shown and its
consolidated results of operations and cash flows for the periods shown, and
such financial statements have been prepared in conformity with United States
generally accepted accounting principles applied on a consistent basis (“GAAP”)
(except as may be disclosed therein or in the notes thereto, and, in the case
of quarterly financial statements, as permitted by Form 10-Q under the
1934 Act).  Except as set forth in the
financial statements of the Company included in the SEC Filings filed prior to
the date hereof or as described on Schedule 4.18, neither the
Company nor any of its Subsidiaries has incurred any liabilities, contingent or
otherwise, except those incurred in the ordinary course of business, consistent
(as to amount and nature) with past practices since the date of such financial
statements, none of 

 

12

 

which, individually or in the aggregate, have had or could reasonably
be expected to have a Material Adverse Effect.

 

4.19                           Insurance
Coverage.  The Company and each
Subsidiary maintains in full force and effect insurance coverage that is
customary for comparably situated companies for the business being conducted
and properties owned or leased by the Company and each Subsidiary, and the
Company reasonably believes such insurance coverage to be adequate against all
liabilities, claims and risks against which it is customary for comparably
situated companies to insure.

 

4.20                           Compliance
with Nasdaq Continued Listing Requirements. 
Except as described in Schedule 4.20, the Company is in
compliance with applicable Nasdaq continued listing requirements.  Except as described in Schedule 4.20,
there are no proceedings pending or, to the Company’s Knowledge, threatened
against the Company relating to the continued listing of the Common Stock on
Nasdaq and the Company has not received any notice of, nor to the Company’s
Knowledge is there any basis for, the delisting of the Common Stock from
Nasdaq.

 

4.21                           Brokers
and Finders.  No Person will have, as
a result of the transactions contemplated by the Transaction Documents, any
valid right, interest or claim against or upon the Company, any Subsidiary or
an Investor for any commission, fee or other compensation pursuant to any
agreement, arrangement or understanding entered into by or on behalf of the
Company, other than as described in Schedule 4.21.

 

4.22                           No
Directed Selling Efforts or General Solicitation.  Neither the Company nor any Person acting on
its behalf has conducted any general solicitation or general advertising (as those
terms are used in Regulation D) in connection with the offer or sale of any of
the Securities.

 

4.23                           No
Integrated Offering.  Neither the
Company nor any of its Affiliates, nor any Person acting on its or their behalf
has, directly or indirectly, made any offers or sales of any Company security
or solicited any offers to buy any security, under circumstances that would
adversely affect reliance by the Company on Section 4(2) for the
exemption from registration for the transactions contemplated hereby or would
require registration of the Securities under the 1933 Act.

 

4.24                           Private
Placement.  The offer and sale of the
Securities to the Investors as contemplated hereby is exempt from the
registration requirements of the 1933 Act.

 

4.25                           Questionable
Payments.  Neither
the Company nor any of its Subsidiaries nor, to the Company’s Knowledge, any of
their respective current or former stockholders, directors, officers,
employees, agents or other Persons acting on behalf of the Company or any
Subsidiary, has on behalf of the Company or any Subsidiary or in connection
with their respective businesses: (a) used any corporate funds for
unlawful contributions, gifts, entertainment or other unlawful expenses
relating to political activity; (b) made any direct or indirect unlawful
payments to any governmental officials or employees from corporate funds; (c) established
or maintained any unlawful or unrecorded fund of corporate monies or other
assets; 

 

13

 

(d) made any false or fictitious entries on the books and records
of the Company or any Subsidiary; or (e) made any unlawful bribe, rebate,
payoff, influence payment, kickback or other unlawful payment of any nature.

 

4.26                           Transactions
with Affiliates.  Except as disclosed
in the SEC Filings or as disclosed on Schedule 4.26, none of the
officers or directors of the Company and, to the Company’s Knowledge, none of
the employees of the Company is presently a party to any transaction with the
Company or any Subsidiary (other than as holders of stock options and/or
warrants, and 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 Company’s Knowledge, any entity in which any officer,
director, or any such employee has a substantial interest or is an officer,
director, trustee or partner.

 

4.27                           Internal
Controls.  The Company is in material compliance with the provisions
of the Sarbanes-Oxley Act of 2002 currently applicable to the Company.  The Company and the Subsidiaries
maintain a system of internal accounting controls sufficient to provide
reasonable assurance that (i) transactions are executed in accordance with
management’s general or specific authorizations, (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with GAAP 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. The Company has established disclosure
controls and procedures (as defined in 1934 Act Rules 13a-14 and 15d-14)
for the Company and designed such disclosure controls and procedures to ensure
that material information relating to the Company, including the Subsidiaries,
is made known to the certifying officers by others within those entities,
particularly during the period in which the Company’s most recently filed
period report under the 1934 Act, as the case may be, is being prepared.  The Company’s certifying officers have
evaluated the effectiveness of the Company’s controls and procedures as of the
end of the period covered by the most recently filed periodic report under the
1934 Act (such date, the “Evaluation Date”). 
The Company presented in its most recently filed periodic report under
the 1934 Act the conclusions of the certifying officers about the effectiveness
of the disclosure controls and procedures based on their evaluations as of the
Evaluation Date.  Since the Evaluation
Date, there have been no significant changes in the Company’s internal controls
(as such term is defined in Item 308 of Regulation S-K) or, to the Company’s
Knowledge, in other factors that could significantly affect the Company’s
internal controls.  The Company maintains
and will continue to maintain a standard system of accounting established and
administered in accordance with GAAP and the applicable requirements of the
1934 Act.

 

4.28                           Disclosures.  Neither the Company nor any Person acting on
its behalf has provided the Investors or their agents or counsel with any
information that constitutes or might constitute material, non-public
information, other than the existence of this Agreement and the other Transaction
Documents and the transactions contemplated hereby and thereby.

 

14

 

4.29                           Most
Favored Nations.  Except as expressly
contemplated by Section 7.10 and except for any restrictions on the
exercise of the Warrants to which any Investor may agree, none of the Investors
shall be entitled to any rights, preferences or privileges under the
Transaction Documents that are more favorable to such Investor than the rights,
preferences and privileges applicable to any other Investor under the
Transaction Documents (such more favorable terms, the “More Favorable Terms”).

 

4.30                           Disclosure.  No representation or warranty of the Company
contained in this Section 4, as qualified by the Disclosure Schedules,
contains any untrue statement of a material fact or omits to state a material
fact necessary in order to make the statements contained herein not misleading
in light of the circumstances under which they were made.

 

5.                                       Representations
and Warranties of the Investors.  Each
of the Investors hereby severally, and not jointly, represents and warrants to
the Company that:

 

5.1                                 Organization and
Existence.  Such Investor is a
validly existing corporation, limited partnership or limited liability company
and has all requisite corporate, partnership or limited liability company power
and authority to invest in the Securities pursuant to this Agreement.

 

5.2                                 Authorization.  The execution, delivery and performance by
such Investor of the Transaction Documents to which such Investor is a party
have been duly authorized and will each constitute the valid and legally
binding obligation of such Investor, enforceable against such Investor in
accordance with their respective terms, subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws of general
applicability, relating to or affecting creditors’ rights generally.

 

5.3                                 Purchase Entirely
for Own Account.  The Securities to
be received by such Investor hereunder will be acquired for such Investor’s own
account, not as nominee or agent, and not with a view to the resale or
distribution of any part thereof in violation of the 1933 Act, and such
Investor has no present intention of selling, granting any participation in, or
otherwise distributing the same in violation of the 1933 Act without prejudice, however, to such Investor’s
right at all times to sell or otherwise dispose of all or any part of such
Securities in compliance with applicable federal and state securities
laws.  Nothing contained herein shall be
deemed a representation or warranty by such Investor to hold the Securities for
any period of time.  Such Investor
is not a broker-dealer registered with the SEC under the 1934 Act or an entity
engaged in a business that would require it to be so registered.

 

5.4                                 Investment
Experience.  Such Investor
acknowledges that it can bear the economic risk and complete loss of its
investment in the Securities and has such knowledge and experience in financial
or business matters that it is capable of evaluating the merits and risks of
the investment contemplated hereby.

 

5.5                                 Disclosure of
Information.  Such Investor has had
an opportunity to receive all information related to the Company requested by
it and to ask questions of and receive answers from the Company regarding the
Company, its business and the terms and 

 

15

 

conditions of the offering of the Securities.  Such Investor acknowledges receipt of copies
of the SEC Filings.  Neither such
inquiries nor any other due diligence investigation conducted by such Investor
shall modify, amend or affect such Investor’s right to rely on the Company’s
representations and warranties contained in this Agreement.

 

5.6                                 Restricted
Securities.  Such Investor
understands that the Securities are characterized as “restricted securities”
under the U.S. federal securities laws inasmuch as they are being acquired from
the Company in a transaction not involving a public offering and that under
such laws and applicable regulations such securities may be resold without
registration under the 1933 Act only in certain limited circumstances.

 

5.7                                 Legends.  It is understood that, except as provided
below, certificates evidencing the Securities may bear the following or any
similar legend:

 

(a)                                  “The securities
represented hereby may not be transferred unless (i) such securities have
been registered for sale pursuant to the Securities Act of 1933, as amended, (ii) such
securities may be sold pursuant to Rule 144(k), or (iii) the Company has
received an opinion of counsel reasonably satisfactory to it that such transfer
may lawfully be made without registration under the Securities Act of 1933 or
qualification under applicable state securities laws.”

 

(b)                                 If required by the
authorities of any state in connection with the issuance of sale of the
Securities, the legend required by such state authority.

 

5.8                                 Accredited
Investor.  Such Investor is an
accredited investor as defined in Rule 501(a) of Regulation D, as
amended, under the 1933 Act.

 

5.9                                 No
General Solicitation.  Such Investor
did not learn of the investment in the Securities as a result of any public
advertising or general solicitation.

 

5.10                           Brokers
and Finders.  No Person will have, as
a result of the transactions contemplated by the Transaction Documents, any
valid right, interest or claim against or upon the Company, any Subsidiary or
an Investor for any commission, fee or other compensation pursuant to any
agreement, arrangement or understanding entered into by or on behalf of such
Investor.

 

5.11                           Prohibited
Transactions.  During the last thirty
(30) days prior to the date hereof, neither such Investor nor any Affiliate of
such Investor which (x) had knowledge of the transactions contemplated hereby,
(y) has or shares discretion relating to such Investor’s investments or trading
or information concerning such Investor’s investments, including in respect of
the Securities, or (z) is subject to such Investor’s review or input concerning
such Affiliate’s investments or trading (collectively, “Trading Affiliates”)
has, directly or indirectly, effected or agreed to effect any short sale,
whether or not against the box, established any “put equivalent position” (as
defined in Rule 16a-1(h) under the 1934 Act) with respect to the
Common Stock, borrowed or pre-borrowed any shares of Common Stock, granted any
other right (including, without limitation, any put or call option) with
respect to the Common Stock or 

 

16

 

with respect to any security that includes, relates to or derived any
significant part of its value from the Common Stock or otherwise sought to
hedge its position in the Securities (each, a “Prohibited Transaction”).  Prior to the earliest to occur of (i) the
termination of this Agreement, (ii) the Effective Date or (iii) the
Effectiveness Deadline, such Investor shall not, and shall cause its Trading
Affiliates not to, (A) engage, directly or indirectly, in a Prohibited
Transaction, or (B) effect any sale, assignment, pledge, hypothecation,
put, call, transfer or other disposition of any Securities.  Such Investor acknowledges that the
representations, warranties and covenants contained in this Section 5.11
are being made for the benefit of the Investors as well as the Company and that
each of the other Investors shall have an independent right to assert any
claims against such Investor arising out of any breach or violation of the
provisions of this Section 5.11.

 

6.  Conditions to Closing.

 

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

 

(a)                                  The
representations and warranties made by the Company in Section 4 hereof
qualified as to materiality shall be true and correct at all times prior to and
on the Closing Date, except to the extent any such representation or warranty
expressly speaks as of an earlier date, in which case such representation or
warranty shall be true and correct as of such earlier date, and, the
representations and warranties made by the Company in Section 4 hereof not
qualified as to materiality shall be true and correct in all material respects
at all times prior to and on the Closing Date, except to the extent any such
representation or warranty expressly speaks as of an earlier date, in which
case such representation or warranty shall be true and correct in all material
respects as of such earlier date.  The
Company shall have performed in all material respects all obligations and
covenants herein required to be performed by it on or prior to the Closing Date.

 

(b)                                 The
Company shall have obtained any and all consents, permits, approvals,
registrations and waivers (including,
without limitation, approval of the Proposal by its stockholders in accordance
with applicable law and the applicable requirements of any stock exchange or
market on which the Common Stock is traded or quoted) necessary for
consummation of the purchase and sale of the Securities and the consummation of
the other transactions contemplated by the Transaction Documents, all of which
shall be in full force and effect.

 

(c)                                  The
Company shall have executed and delivered the Registration Rights Agreement.

 

(d)                                 The
Company shall have taken all action necessary to effect the listing of the
Shares and the Warrant Shares on the Nasdaq Capital Market upon official notice
of issuance.

 

17

 

(e)                                  The
Reverse Split shall have become effective.

 

(f)                                    The
Board shall have adopted a budget for calendar years 2006 and 2007 (the “Approved
Budget”), which Approved Budget shall include a covenant that the net proceeds
from the sale of the Shares and the Warrants hereunder will be used solely to
fund the development of the Company’s TPI 287 compound and that any amendment
or variance with respect to such aspect of the Approved Budget shall require
the prior written approval of a majority of the Independent Directors.

 

(g)                                 The
Company shall have received gross proceeds from the sale of the Shares and the
Warrants as contemplated hereby of at least Twenty Million Dollars
($20,000,000).

 

(h)                                 No
judgment, writ, order, injunction, award or decree of or by any court, or
judge, justice or magistrate, including any bankruptcy court or judge, or any
order of or by any governmental authority, shall have been issued, and no
action or proceeding shall have been instituted by any governmental authority,
enjoining or preventing the consummation of the transactions contemplated
hereby or in the other Transaction Documents.

 

(i)                                     The
Company shall have delivered a Certificate, executed on behalf of the Company
by its Chief Executive Officer or its Chief Financial Officer, dated as of the
Closing Date, certifying to the fulfillment of the conditions specified in
subsections (a), (b), (d), (e), (f), (g), (h) (which subsection (h) shall
be qualified to the Company’s Knowledge) and (l) of this Section 6.1.

 

(j)                                     The
Company shall have delivered a Certificate, executed on behalf of the Company
by its Secretary, dated as of the Closing Date, certifying the resolutions
adopted by the Board approving the transactions contemplated by this Agreement
and the other Transaction Documents, the calling of the Stockholders Meeting
(as defined below), the Reverse Split and the issuance of the Securities,
certifying the current versions of the Certificate of Incorporation and Bylaws
of the Company and certifying as to the signatures and authority of persons
signing the Transaction Documents and related documents on behalf of the
Company.

 

(k)                                  The
Investors shall have received an opinion from Kirkland & Ellis LLP,
the Company’s counsel, dated as of the Closing Date, in form and substance
reasonably acceptable to the Investors and addressing such legal matters as set
forth on Exhibit D attached hereto.

 

(l)                                     No
stop order or suspension of trading shall have been imposed by Nasdaq, the SEC
or any other governmental or regulatory body with respect to public trading in
the Common Stock.

 

(m)                               The
Company shall have delivered to the Investors one or more executed Lock-Up
Agreements in the form attached hereto as Exhibit C from each officer and
director of the Company that is, as of the date hereof, subject to the
reporting requirements of Section 16 of the 1934 Act.

 

18

 

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

 

(a)                                  The
representations and warranties made by the Investors in Section 5 hereof,
other than the representations and warranties contained in Sections 5.3, 5.4,
5.5, 5.6, 5.7, 5.8 and 5.9 (the “Investment Representations”), shall be true
and correct in all material respects when made, and shall be true and correct
in all material respects on the Closing Date with the same force and effect as
if they had been made on and as of said date. 
The Investment Representations shall be true and correct in all respects
when made, and shall be true and correct in all respects on the Closing Date
with the same force and effect as if they had been made on and as of said
date.  The Investors shall have performed
in all material respects all obligations and covenants herein required to be
performed by them on or prior to the Closing Date.

 

(b)                                 The
Investors shall have executed and delivered the Registration Rights Agreement.

 

(c)                                  The
Investors shall have delivered the Purchase Price to the Company.

 

(d)                                 The
Company shall have obtained any and all consents, permits, approvals,
registrations and waivers (including,
without limitation, approval of the Proposal by its stockholders in accordance
with applicable law and the applicable requirements of any stock exchange or
market on which the Common Stock is traded or quoted) necessary or
appropriate for consummation of the purchase and sale of the Securities and the
consummation of the other transactions contemplated by the Transaction
Documents, all of which shall be in full force and effect.

 

(e)                                  No
judgment, writ, order, injunction, award or decree of or by any court, or
judge, justice or magistrate, including any bankruptcy court or judge, or any
order of or by any governmental authority, shall have been issued, and no
action or proceeding shall have been instituted by any governmental authority,
enjoining or preventing the consummation of the transactions contemplated
hereby or in the other Transaction Documents.

 

(f)                                    The
Company shall have received gross proceeds from the sale of the Shares and the
Warrants as contemplated hereby of at least Twenty Million Dollars
($20,000,000).

 

6.3                                 Termination
of Obligations to Effect Closing; Effects.

 

(a)                                  The
obligations of the Company, on the one hand, and the Investors, on the other
hand, to effect the Closing may be terminated as follows:

 

19

 

(i)                                     Upon
the mutual written consent of the Company and the Investors;

 

(ii)                                  By
the Company if any of the conditions set forth in Section 6.2 shall have
become incapable of fulfillment, and shall not have been waived by the Company;

 

(iii)                               By
the Company if the stockholders of the Company fail to approve the Proposal at
the Stockholders Meeting;

 

(iv)                              By
the Company if the Board authorizes the Company to enter into a definitive
agreement governing a Superior Proposal (subject to compliance with Section 7.13);

 

(v)                                 By
an Investor (with respect to itself only) if any of the conditions set forth in
Section 6.1 shall have become incapable of fulfillment, and shall not have
been waived by the Investor; or

 

(vi)                              By
either the Company or any Investor (with respect to itself only) if the Closing
has not occurred on or prior to May 31, 2006;

 

provided, however, that, except
in the case of clauses (i) and (iii) above, the party seeking to
terminate its obligation to effect the Closing shall not then be in breach of
any of its representations, warranties, covenants or agreements contained in
this Agreement or the other Transaction Documents if such breach has resulted
in the circumstances giving rise to such party’s seeking to terminate its
obligation to effect the Closing.

 

(b)                                 In
the event of termination by the Company or any Investor of its obligations to
effect the Closing pursuant to this Section 6.3, written notice thereof
shall forthwith be given to the other Investors, and each other Investor shall
have the right, if such termination results in any of the conditions set forth
in Section 6.1 becoming incapable of fulfillment with respect to such
Investor, to terminate its obligations to effect the Closing upon written
notice to the Company and the other Investors; provided that, if any Investor
terminates its obligations to effect the Closing pursuant to this Section 6.3,
then each other Investor shall have the right (but not the obligation) to
reduce its portion of the Purchase Price, and the corresponding number of
Shares and Warrant Shares to be acquired by such Investor, such that such
Investor’s beneficial ownership (determined in accordance with Rule 13d-3
under the 1934 Act) of Common Stock following the Closing does not exceed
9.999% of the total number of issued and outstanding shares of Common Stock
(including for such purpose any shares of Common Stock issuable upon the
exercise of the Warrant to be issued to such Investor at the Closing that would
be required to be included for purposes of such determination).  Nothing in this Section 6.3 shall be
deemed to release any party from any liability for any breach by such party of
the terms and provisions of this Agreement or the other Transaction Documents
or to impair the right of any party to compel specific performance by any other
party of its obligations under this Agreement or the other Transaction
Documents.

 

20

 

7.                                       Covenants
and Agreements of the Company and the Investors.

 

7.1                                 Reservation
of Common Stock.  The Company shall
at all times reserve and keep available out of its authorized but unissued
shares of Common Stock, solely for the purpose of providing for the exercise of
the Warrants, such number of shares of Common Stock as shall from time to time
equal the number of shares sufficient to permit the exercise of the Warrants
issued pursuant to this Agreement in accordance with their respective terms.

 

7.2                                 Reports.  The Company will furnish to the Investors
and/or their assignees such information relating to the Company and its
Subsidiaries as from time to time may reasonably be requested by the Investors
and/or their assignees; provided, however, that the Company shall not disclose
material nonpublic information to the Investors, or to advisors to or
representatives of the Investors, unless prior to disclosure of such
information the Company identifies such information as being material nonpublic
information and provides the Investors, such advisors and representatives with
the opportunity to accept or refuse to accept such material nonpublic
information for review and any Investor wishing to obtain such information
enters into an appropriate confidentiality agreement with the Company with
respect thereto.

 

7.3                                 No
Conflicting Agreements.  The Company
will not take any action, enter into any agreement or make any commitment that
would conflict or interfere in any material respect with the Company’s
obligations to the Investors under the Transaction Documents.

 

7.4                                 Management
Equity Incentive Plan.  Each of the
Investors shall, and shall cause each of its controlled Affiliates to, at any
meeting of the stockholders of the Company called for such purpose after the Closing
Date, consent to and vote, in person or by proxy, all shares of the Company
held by such Person or with respect to which such Person has voting authority,
in favor of the adoption and implementation of a management equity incentive
plan of the Company containing terms and conditions that are substantially the
same as the terms and conditions set forth on Schedule 7.4.  The commitment set forth in this Section 7.4
shall continue to be applicable at any meeting called by the Company for such
purpose, notwithstanding the fact that such matter may have been previously
voted upon but not approved by the Company’s stockholders.  The implementation of the management equity
incentive plan as set forth on Schedule 7.4 will not result in any
material adverse tax consequence to the Company or require the payment by the
Company of any cash amount to any taxing authority in respect of such plan
(other than income and employment tax withholding payments related to taxable
income recognized by participants with respect to awards under such plan).

 

7.5                                 Compliance
with Laws.  The Company will comply
in all material respects with all applicable laws, rules, regulations, orders
and decrees of all governmental authorities.

 

7.6                                 Listing
of Underlying Shares and Related Matters. 
Promptly following the date hereof, the Company shall take all necessary
action to cause the Shares and the Warrant Shares to be listed on the Nasdaq
Capital Market no later than the Closing Date. 
Further, if the Company applies to have its Common Stock or other
securities traded on any other principal stock exchange or market, it shall
include in such application the Shares and the Warrant Shares 

 

21

 

and will take such other action as is necessary to cause such Common
Stock to be so listed.  The Company will
use commercially reasonable efforts to continue the listing and trading of its
Common Stock on Nasdaq and, in accordance, therewith, will use commercially
reasonable efforts to comply in all respects with the Company’s reporting,
filing and other obligations under the bylaws or rules of such market or
exchange, as applicable.

 

7.7                                 Termination
of Covenants.  The provisions of
Sections 7.2 through 7.5 shall terminate and be of no further force and effect
on the date on which the Company’s obligations under the Registration Rights
Agreement to register or maintain the effectiveness of any registration
covering the Registrable Securities (as such term is defined in the
Registration Rights Agreement) shall terminate.

 

7.8                                 Removal
of Legends.  Upon the earlier of (i) registration
for resale pursuant to the Registration Rights Agreement, (ii) Rule 144(k)
becoming available the Company, (iii) any sale pursuant to Rule 144
(assuming the transferor is not an Affiliate of the Company) or (iv) such
time as a legend is no longer required under applicable requirements of the
Securities Act (including controlling judicial interpretations and
pronouncements issued by the SEC), the Company shall (A) deliver to the transfer
agent for the Common Stock (the “Transfer Agent”) irrevocable instructions that
the Transfer Agent shall reissue a certificate representing shares of Common
Stock without legends upon receipt by such Transfer Agent of the legended
certificates for such shares, together with either (1) a customary
representation by the Investor that Rule 144(k) or Rule 144 applies
to the shares of Common Stock represented thereby or (2) in connection
with any sale of Common Stock by any Investor pursuant to the registration
contemplated by the Registration Rights Agreement, a statement by such Investor
that it has sold the shares of Common Stock represented thereby in accordance
with the Plan of Distribution contained in the Registration Statement, and (B) cause
its counsel to deliver to the Transfer Agent one or more blanket opinions to
the effect that the removal of such legends in such circumstances may be
effected under the 1933 Act.  From and
after the earlier of such dates, upon an Investor’s written request, the
Company shall promptly cause certificates evidencing the Investor’s Securities
to be replaced with certificates which do not bear such restrictive legends,
and Warrant Shares subsequently issued upon due exercise of the Alternative
Warrants or the Warrants, as the case may be, shall not bear such restrictive
legends provided the provisions of either clause (i) or clause (ii) above,
as applicable, are satisfied with respect to such Warrant Shares.  When the Company is required to cause
unlegended certificates to replace previously issued legended certificates, if
unlegended certificates are not delivered to an Investor within three (3) Business
Days of submission by that Investor of legended certificate(s) to the Transfer
Agent as provided above (or to the Company, in the case of the Warrants), the
Company shall be liable to the Investor for liquidated damages in an amount
equal to 1.5% of the aggregate purchase price of the Securities evidenced by
such certificate(s) for each thirty (30) day period (or portion thereof) beyond
such three (3) Business Day that the unlegended certificates have not been
so delivered.

 

7.9                                 Proxy Statement;
Stockholders Meeting.  (a)  Promptly following the execution
and delivery of this Agreement the Company shall take all action necessary to
call a meeting of its stockholders (the “Stockholders Meeting”), which shall
occur not later than May 2, 2006 (the “Stockholders Meeting Deadline”),
for the purpose of seeking approval of the 

 

22

 

Company’s
stockholders for the issuance and sale to the Investors of the Securities (the “Proposal”).  In connection therewith, the Company will
promptly prepare and file with the SEC proxy materials (including a proxy
statement and form of proxy) for use at the Stockholders Meeting and, after
receiving and promptly responding to any comments of the SEC thereon, shall
promptly mail such proxy materials to the stockholders of the Company.  Each Investor shall promptly furnish in
writing to the Company such information relating to such Investor and its
investment in the Company as the Company may reasonably request for inclusion
in the Proxy Statement.  The Company will
comply with Section 14(a) of the 1934 Act and the rules promulgated
thereunder in relation to any proxy statement (as amended or supplemented, the “Proxy
Statement”) and any form of proxy to be sent to the stockholders of the Company
in connection with the Stockholders Meeting, and the Proxy Statement shall not,
on the date that the Proxy Statement (or any amendment thereof or supplement
thereto) is first mailed to stockholders or at the time of the Stockholders
Meeting, contain any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements made therein not false
or misleading, or omit to state any material fact necessary to correct any
statement in any earlier communication with respect to the solicitation of
proxies or the Stockholders Meeting which has become false or misleading.  If the Company should discover at any time
prior to the Stockholders Meeting, any event relating to the Company or any of
its Subsidiaries or any of their respective affiliates, officers or directors
that is required to be set forth in a supplement or amendment to the Proxy
Statement, in addition to the Company’s obligations under the 1934 Act, the
Company will promptly inform the Investors thereof.

 

(b)                                 Subject
to the following sentence, the Board shall recommend to the Company’s
stockholders that the stockholders vote in favor of the Proposal (the “Company
Board Recommendation”) and take all commercially reasonable action (including,
without limitation, the hiring of a proxy solicitation firm of nationally
recognized standing) to solicit the approval of the stockholders for the
Proposal unless the Board shall have modified, amended or withdrawn the Company
Board Recommendation pursuant to the provisions of the immediately succeeding
sentence.  The Company covenants that the
Board shall not modify, amend or withdraw the Company Board Recommendation
unless (i) the Company shall have received a Superior Proposal and (ii) the
Board (after consultation with the Company’s outside counsel) shall have
determined in the good faith exercise of its business judgment that maintaining
the Company Board Recommendation would violate its fiduciary duty to the
Company’s stockholders.  Whether or not
the Board modifies, amends or withdraws the Company Board Recommendation
pursuant to the immediately preceding sentence, the Company shall in accordance
with Section 146 of the Delaware General Corporation Law and the
provisions of its Certificate of Incorporation and Bylaws, (i) take all
action necessary to convene the Stockholders Meeting as promptly as
practicable, but no later than the Stockholders Meeting Deadline, to consider
and vote upon the approval of the Proposal and (ii) submit the Proposal at
the Stockholders Meeting to the stockholders of the Company for their approval.

 

7.10                           Director
Designees.

 

(a)                                  From
and after the Closing Date, so long as Special Situations Fund III, L.P. (“SSF”)
and/or one or more of its Affiliates collectively are the beneficial owners
(determined in accordance with Rule 13d-3 under the 1934 Act) of at least
25% of the Shares 

 

23

 

and Warrant Shares acquired by it pursuant to this Agreement, SSF shall
have the right to designate up to two Persons for election to the Board (the “SSF
Designees”).  Upon any such designation
by SSF, the Company shall use its commercially reasonable efforts to cause the
SSF Designees to be elected to the Board. 
SSF shall have the right to remove or replace any SSF Designee by giving
notice to such SSF Designee and the Company and the Company shall use its
commercially reasonable efforts to effect the removal or replacement of any
such SSF Designee.

 

(b)                                 Subject
to any limitations imposed by applicable law, any SSF Designee shall be
entitled to the same perquisites, including stock options, reimbursement of
expenses and other similar rights in connection with such Person’s membership
on the Board, as every other non-employee member of the Board.

 

(c)                                  So
long as SSF has the right to appoint an SSF Designee, the Company shall not
increase the number of directors constituting the Board without the prior
written approval of SSF.

 

(d)                                 Promptly
following the time that SSF no longer has the right to designate any SSF
Designee, such SSF Designee shall, and SSF shall cause such SSF Designee to,
promptly tender his or her resignation as a member of the Board, which
resignation may be accepted by the Board in its discretion.

 

7.11                           Most
Favored Nations.  Each Investor shall
receive “most favorite nations status” with respect to the Transaction
Documents, meaning that if the Company takes any action contemplated by Section 4.29,
the terms of the Transaction Documents to which such Investor is a party
automatically shall be amended, without further action, so as to provide such
Investor the benefits of such More Favorable Terms.

 

7.12                           Preemptive
Rights.

 

(a)                                  From and after the Closing, the
Company shall not sell any Common Stock or any securities exercisable or
exchangeable for or convertible into, directly or indirectly, Common Stock
(collectively, the “Preemptive Securities”) to any Person unless the Company
shall have first offered to sell to each Investor (for so long as such Investor
holds at least 50% of the Shares acquired by such Investor hereunder) (each a “Preemptive
Holder”) such Preemptive Holder’s Preemptive Share of the Preemptive Securities,
at a price and on such other terms as shall have been specified by the Company
in writing delivered to each such Preemptive Holder (the “Preemptive Offer”) at
the address set forth on the signature page hereto, which Preemptive Offer
shall by its terms remain open and irrevocable for a period of at least fifteen
business days from the date it is delivered by the Company (the “Preemptive
Offer Period”).  Each Preemptive Holder
may elect to purchase all or any portion of such Preemptive Holder’s Preemptive
Share of the Preemptive Securities as specified in the Preemptive Offer at the
price and upon the terms specified therein by delivering written notice of such
election to the Company as soon as practical but in any event within the
Preemptive Offer Period; provided that if the Company is issuing Common Stock
together as a unit with any debt securities or other equity securities, then
any Preemptive Holder who elects to purchase the Preemptive Securities pursuant
to this Section 7.12 must purchase the same proportionate mix of all of
such securities.

 

24

 

(b)                                 Each Preemptive Holder’s “Preemptive
Share” of Preemptive Securities shall be determined as follows: the total
number of Preemptive Securities, multiplied by a fraction, (i) the
numerator of which is the number of shares of Common Stock that were purchased
by such Preemptive Holder pursuant to this Agreement or pursuant to an exercise
of a Warrant and that, in each case, continue to be held by such Preemptive
Holder, and (ii) the denominator of which is the number of shares of
Common Stock then issued and outstanding.

 

(c)                                  Upon the expiration of the
Preemptive Offer Period, the Company shall be entitled during the 180 day
period following expiration of the Preemptive Offer Period to sell such
Preemptive Securities which the Preemptive Holders have not elected to purchase
on terms and conditions not materially more favorable to the purchasers thereof
than those offered to the Preemptive Holders.

 

(d)                                 The provisions of this Section 7.12
shall not apply to the following issuances of Common Stock:

 

(i)                                     Common Stock issued to employees,
officers, directors and other service providers of or to the Company or any of
its Subsidiaries in accordance with the terms of any applicable incentive plan
of the Company approved by the Board;

 

(ii)                                  Common Stock issued for
consideration other than cash in connection with consulting, licensing,
acquisition, equipment leasing, lending, merger or other business transactions;

 

(iii)                               Common Stock issued upon exercise of
the Warrants; and

 

(iv)                              in connection with the subdivision
of Common Stock (including any split), any combination of Common Stock
(including any reverse split, including the Reverse Split) or any
recapitalization, reorganization, reclassification or conversion of the
Company.

 

7.13                           Non-Solicitation
of Alternative Investment.

 

(a)                                  From and after the
date hereof until the earlier to occur of the Closing or the termination of the
obligations to effect the Closing pursuant to Section 6.3, the Company
shall not, and neither shall it authorize or permit any of its Subsidiaries or
any of their respective directors, officers or employees to, nor knowingly
authorize or permit the Company’s and its Subsidiaries’ investment bankers,
financial advisors, attorneys, accountants or other advisors, agents or
representatives (collectively, “Representatives”) to, directly or
indirectly through another Person, (i) solicit, initiate, participate in
or knowingly encourage, or take any other action designed to, or which could
reasonably be expected to, facilitate, any Alternative Investment or (ii) enter
into, continue or otherwise participate in any discussions or negotiations
regarding, or furnish to any Person any information, or otherwise cooperate in
any way with, any Alternative Investment. 
The Company shall, and shall cause its Subsidiaries and Representatives
to, immediately cease and cause to be terminated all existing discussions or
negotiations with any Person (other than the Investors) conducted heretofore
with respect to any Alternative 

 

25

 

Investment.  Notwithstanding the foregoing, if and to the
extent that (1) the Stockholders Meeting has not occurred, (2) in
response to a bona fide written Alternative Investment proposal that the Board
reasonably determines (after consultation with outside counsel and a financial
advisor of nationally recognized reputation) constitutes a Superior Proposal,
and (3) the Board believes in good faith, considering the advice of the
Company’s counsel, that the failure to participate in such negotiations or
discussions or disclose such information would be inconsistent with the
fiduciary duties of the Board under applicable law, the Company and its Representatives
may, subject to compliance with Section 7.13(b), (x) furnish information
with respect to the Company and its Subsidiaries to the Person making such
Alternative Investment proposal (and its Representatives) pursuant to a
customary confidentiality agreement, provided that all such information has
previously been provided to the Investors or is provided to the Investors prior
to or substantially concurrent with the time it is provided to such Person, and
(y) participate in discussions or negotiations with the Person making such
Alternative Investment proposal (and its Representatives) regarding such
Alternative Investment proposal.

 

(b)                                 In addition to the
obligations of the Company set forth in Section 7.13(a), the Company shall
promptly (and in any event within 24 hours of the receipt thereof by the
Company) advise the Investors orally and in writing of the existence of any
Alternative Investment proposal, the material terms and conditions of any such
Alternative Investment proposal (including any changes thereto) and the
identity of the Person making any such Alternative Investment proposal.  The Company shall (i) keep the Investors
fully informed in all material respects of the status of any Alternative
Investment proposal and (ii) provide to the Investors as soon as
practicable (and in any event within 24 hours) after receipt or delivery
thereof copies of all correspondence and other written material sent or
provided to the Company or any of its Subsidiaries from any Person that
describes any of the terms or conditions of any Alternative Investment
proposal.

 

(c)                                  During
the period from the date of this Agreement until the Closing or the effective
date of termination of the obligations to effect the Closing under Section 6.3,
if the Board determines in good faith to accept a Superior Proposal, prior to
accepting such Superior Proposal, the Company shall first (i) disclose to
each of the Investors the terms and conditions of such Superior Proposal and (ii) offer
each of the Investors the opportunity to enter into a transaction with the
Company on terms no less favorable to the Company and its stockholders from a
financial point of view (including conditions to consummation of the
contemplated transactions) than those contained in the Superior Proposal (the “Offer”).  Any one or more of the Investors (the “Proposing
Investor(s)”) shall be entitled to notify the Company within three business
days of the terms of a transaction with the Company in response to the Offer (a
“Counter Proposal”).  If the terms of the
Counter Proposal are determined by the Board (after consultation with its legal
and financial advisors) in good faith to be no less favorable to the Company
and its stockholders from a financial point of view (including conditions to
consummation of the contemplated transaction) than those contained in the
Superior Proposal, then the Company shall accept the Counter Proposal.  In the event that more than one Investor make
a Counter Proposal that is a Superior Proposal, then the Board shall determine
which among them is superior to the others and that proposal will be the
Counter Proposal accepted by the Company. 
If the Company does not receive a Counter Proposal from any of the
Investors within such three-business day period, or the Counter Proposal(s)
received do not constitute a Superior Proposal, then the Company may accept the
Superior Proposal, provided there are no 

 

26

 

subsequent material changes to the terms of such Superior
Proposal.  If the terms of such Superior
Proposal are materially changed, then such Superior Proposal shall be deemed a
new proposal and shall be subject to each of the terms of this Section 7.13(c).  This Section 7.13(c) shall apply to
any Superior Proposal made by any Person at any time prior to the termination
of the Investors’ rights under this Section 7.13(c).  If the Company agrees to enter into an
agreement governing the transaction contemplated by the Counter Proposal, then
the Proposing Investor(s) shall promptly give written notice thereof (the “Proposal
Notice”) to the other Investors.  The
Proposal Notice shall specify in reasonable detail the price and other material
terms and conditions of the Counter Proposal and the notice address at which
the other Investors may give notice to the Proposing Investor(s) as hereinafter
provided.  In such Proposal Notice, the
Proposing Investor(s) shall offer the other Investors the right to participate
in such transaction on the same terms and conditions as the Proposing Investor(s),
which offer shall be irrevocable for a period of three business days after the
date of receipt of the notice by the other Investors.  Upon receipt of the Proposal Notice, each of
the other Investors shall have the right to elect to participate in such
transaction on a pro rata basis based on its pro rata portion of the Purchase
Price (or on such other basis as such Investors may agree) by giving the
Proposing Investor(s) written notice of their election to participate within
such three-business day period.  Each
Investor that sends such a notice is being referred to as an “Electing
Investor.”  If any Investor does not
respond during the applicable period, it shall be deemed to have waived its
rights under this Section 7.13(c) with respect to such Counter
Proposal.   The Proposing Investor(s) and
the Electing Investors together shall consummate the transaction contemplated
by the Counter Proposal on such terms and conditions as set forth in the
Counter Proposal or as may otherwise be agreed by the Proposing Investor(s),
the Electing Investors and the Company; it being understood that the Proposing
Investor(s) and the Electing Investors must agree to purchase or acquire 100%
of the securities that are contemplated to be acquired from the Company or its
stockholders by the Counter Proposal. 
Notwithstanding any other provision in this Agreement, none of the
Investors or any of their respective Affiliates shall be permitted to
participate in any Alternative Investment, other than a Counter Proposal as
contemplated in this Section 7.13(c).

 

7.14                           Issuance
of Alternative Warrants.  Within
three business days following the date hereof, the Company shall issue to each
Investor, for no additional consideration, a warrant to purchase an aggregate
number of shares of Common Stock (subject to adjustment as set forth in such
warrant) equal to the number of shares of Common Stock set forth opposite such
Investor’s name on Schedule 7.14 at a per share exercise price equal to
$0.01 (subject to adjustment as set forth in such warrant), which warrant shall
be in form and substance substantially as set forth in Exhibit A attached
hereto (all such warrants issued to the Investors pursuant to this Section 7.14,
the “Alternative Warrants”).  At the time
that the Alternative Warrants are issued, (a) Kirkland & Ellis
LLP, the Company’s counsel, shall deliver to the Investors an opinion dated as
of such date, in form and substance reasonably acceptable to the Investors and
addressing such legal matters as set forth on Exhibit D attached hereto
(addressing those matters relevant to the issuance of the Alternative Warrants
and shares of Common Stock subject thereto), and (b) the Company and each
of the Investors shall execute and deliver a registration rights agreement with
respect to the registration of the shares of Common Stock purchasable upon
exercise of such Alternative Warrants in substantially the form attached as Exhibit B
hereto, with such modifications as may be necessary or reasonably required to
give effect to the terms of this Section 7.14.  The Alternative Warrants shall become
exercisable only if one of the events specified in the 

 

27

 

following clauses (i) through (iv) (each a “Trigger Event”)
occurs: (i) the stockholders of the Company fail to approve the Proposal
at the Stockholders Meeting, (ii) the Company terminates its obligations
to effect the Closing pursuant to Section 6.3 and the Company has received
an Alternative Investment proposal prior to such time which has not been
withdrawn, (iii) the Company enters into an agreement governing the
consummation of an Alternative Investment with any Person other than the
Investors, as contemplated by Section 7.13(c) above, prior to the
termination of this Agreement in accordance with Section 6.3 or (iv) the
Stockholders Meeting shall not have occurred prior to the Stockholders Meeting
Deadline and the Company shall have breached its obligations under Section 7.9;
provided, however, that notwithstanding any other provision herein, the
Alternative Warrant issued to any non-Electing Investor shall become
exercisable immediately if the Company consummates the
transactions contemplated by a Counter Proposal and this Agreement is
terminated pursuant to Section 6.3; it being understood that those
Alternative Warrants held by any Investor participating in a Counter Proposal
shall not become exercisable and shall terminate and be of no further force and
effect on the date on which the Company consummates the transactions
contemplated by a Counter Proposal. 
In the event that a Trigger Event has not occurred prior to or in
connection with the termination of this Agreement (in whole or with respect to
any particular Investor) or the Closing shall occur, then all outstanding
Alternative Warrants held by all Investors or, in the case of a termination
with respect a particular Investor, that Investor, shall
terminate and be of no further force and effect.  The Alternative Warrants in the aggregate
will represent the right to acquire shares of Common Stock representing 15
percent of the issued and outstanding shares of Common Stock determined as of
the date hereof.

 

7.15                           Use
of Proceeds; Approved Budget.  The
net proceeds from the sale of the Shares and the Warrants hereunder shall be
used solely to fund the development of the Company’s TPI 287 compound in
accordance with the Approved Budget.  Any
amendment or variance with respect to such aspect of the Approved Budget shall
require the prior approval of a majority of the Independent Directors.  For the avoidance of doubt, the Investors
agree that the Approved Budget shall not restrict the Company’s use of its
other assets, including any cash-on-hand as of the Closing.

 

7.16                           Prohibition
on Sale.  The Company shall use its
reasonable best efforts to cause each of Leonard P. Shaykin, Martin M. Batt,
Patricia A. Pilia, Gordon Link, Kai P. Larson, Bruce W. Fiedler, Stephen K.
Carter, M.D., George M. Gould, Arthur H. Hayes, Jr., Elliot M. Maza, The
Honorable Richard N. Perle and Robert E. Pollack to execute and deliver to the
Company within five business days after the date hereof an lock-up agreement in
form and substance substantially as set forth on Exhibit C hereto.  The Company shall not terminate, amend,
modify or waive any provision of such agreement without the consent of the
Investors.

 

28

 

8.                                       Survival
and Indemnification.

 

8.1  Survival.  The representations, warranties, covenants
and agreements contained in this Agreement shall survive the Closing of the
transactions contemplated by this Agreement; provided, however, that any claim
for Losses as a result of a breach of a representation or warranty contained
herein must be must be made, if at all, within 18 months of the Closing, except
that any claim for Losses as a result of a breach of any representation or
warranty contained in Section 4.15 hereof must be made, if at all, on or
prior to the first anniversary of the Closing Date.

 

8.2  Indemnification.  The Company agrees to indemnify and hold
harmless each Investor and its Affiliates and their respective directors,
officers, employees and agents from and against, without duplication, (a) any
and all losses, claims, damages, liabilities and expenses (including without
limitation reasonable attorneys fees and disbursements and other expenses
incurred in connection with investigating, preparing or defending any action,
claim or proceeding, pending or threatened and the costs of enforcement
thereof) (collectively, “Losses”) to which such Person may become subject as a
result of any breach of representation, warranty, covenant or agreement made by
or to be performed on the part of the Company under the Transaction Documents
or (b) reasonable attorneys fees and disbursements and other expenses
incurred in connection with investigating, preparing or defending any action,
claim or proceeding arising from a claim by any third party (including any
governmental authority) that the provisions relating to the exercise of the
Warrant issued to such Person hereunder are unenforceable if such Person
ultimately prevails with respect to such claim, and, in each case, will
reimburse any such Person for all such amounts as they are incurred by such
Person.

 

8.3  Conduct
of Indemnification Proceedings.  Promptly after receipt by any
Person (the “Indemnified Person”) of notice of
any demand, claim or circumstances which would or might give rise to a claim or
the commencement of any action, proceeding or investigation in respect of which
indemnity may be sought pursuant to Section 8.2, such Indemnified Person
shall promptly notify the Company in writing and the Company shall assume the
defense thereof, including the employment of counsel reasonably satisfactory to
such Indemnified Person, and shall assume the payment of all fees and expenses;
provided, however, that the
failure of any Indemnified Person so to notify the Company shall not relieve
the Company of its obligations hereunder except to the extent that the Company
is materially prejudiced by such failure to notify.  In any such proceeding, any Indemnified
Person shall have the right to retain its own counsel, but the fees and
expenses of such counsel shall be at the expense of such Indemnified Person
unless: (i) the Company and the Indemnified Person shall have mutually agreed
to the retention of such counsel; or (ii) in the reasonable judgment of
counsel to such Indemnified Person representation of both parties by the same
counsel would be inappropriate due to actual or potential differing interests
between them.  The Company shall not be
liable for any settlement of any proceeding effected without its written
consent, which consent shall not be unreasonably withheld, but if settled with
such consent, or if there be a final judgment for the plaintiff, the Company
shall indemnify and hold harmless such Indemnified Person from and against any
loss or liability (to the extent stated above) by reason of such settlement or
judgment.  Without the prior written
consent of the Indemnified Person, which 

 

29

 

consent shall not be unreasonably withheld, the Company shall not
effect any settlement of any pending or threatened proceeding in respect of
which any Indemnified Person is or could have been a party and indemnity could
have been sought hereunder by such Indemnified Party, unless such settlement
includes an unconditional release of such Indemnified Person from all liability
arising out of such proceeding.

 

9.                                       Miscellaneous.

 

9.1                                 Successors and
Assigns.  This Agreement may not be
assigned by a party hereto without the prior written consent of the Company or
the Investors, as applicable, provided, however, that an Investor may assign
its rights and delegate its duties hereunder in whole or in part to an
Affiliate or to a third party acquiring some or all of its Securities in a
private transaction without the prior written consent of the Company or the
other Investors, after notice duly given by such Investor to the Company
provided, that no such assignment or obligation shall affect the obligations of
such Investor hereunder.  The provisions
of this Agreement shall inure to the benefit of and be binding upon the
respective permitted successors and assigns of the parties.  Nothing in this Agreement, express or
implied, is intended to confer upon any party other than the parties hereto or
their respective successors and assigns any rights, remedies, obligations, or
liabilities under or by reason of this Agreement, except as expressly provided
in this Agreement (including in Section 9.6).

 

9.2                                 Counterparts; Faxes.  This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.  This Agreement may also be executed via
facsimile, which shall be deemed an original.

 

9.3                                 Titles and
Subtitles.  The titles and subtitles
used in this Agreement are used for convenience only and are not to be
considered in construing or interpreting this Agreement.

 

9.4                                 Notices.  Unless otherwise provided, any notice
required or permitted under this Agreement shall be given in writing and shall
be deemed effectively given as hereinafter described (i) if given by
personal delivery, then such notice shall be deemed given upon such delivery, (ii) if
given by telex or telecopier, then such notice shall be deemed given upon
receipt of confirmation of complete transmittal, (iii) if given by mail,
then such notice shall be deemed given upon the earlier of (A) receipt of
such notice by the recipient or (B) three days after such notice is
deposited in first class mail, postage prepaid, and (iv) if given by an
internationally recognized overnight air courier, then such notice shall be
deemed given one Business Day after delivery to such carrier.  All notices shall be addressed to the party
to be notified at the address as follows, or at such other address as such
party may designate by ten days’ advance written notice to the other party:

 

If to the
Company:

 

Tapestry
Pharmaceuticals, Inc.

4840 Pearl
East Circle, Suite 300W

 

30

 

Boulder,
Colorado 80301

Attention:  Leonard Shaykin, Chairman and Chief Executive
Officer

Fax:  (212) 319-2808

 

With a copy
to:

 

Kirkland &
Ellis LLP

Citigroup
Center

153 East 53rd
Street

New York, New York
10022-4611

Attention:  Michael Movsovich

Fax:  (212) 446-6460

 

If to any
Investor:

 

to such
Investor’s address(es) set forth on the signature pages hereto.

 

9.5                                 Expenses.  The parties hereto shall pay their own costs
and expenses in connection herewith, except that the Company shall pay the
reasonable and documented fees and expenses of Lowenstein Sandler PC in
connection with the negotiation and execution of the Transaction Documents in
an amount not to exceed $35,000.  Such
expenses shall be paid not later than the Closing.  The Company shall reimburse the Investors
upon demand for all reasonable and documented out-of-pocket expenses incurred
by the Investors, including without limitation reimbursement of attorneys’ fees
and disbursements, in connection with any amendment, modification or waiver of
this Agreement or the other Transaction Documents.  In the event that legal proceedings are
commenced by any party to this Agreement against another party to this Agreement
in connection with this Agreement or the other Transaction Documents, the party
or parties which do not prevail in such proceedings shall severally, but not
jointly, pay their pro rata share of the reasonable attorneys’ fees and other
reasonable and documented out-of-pocket costs and expenses incurred by the
prevailing party in such proceedings.

 

9.6                                 Amendments and
Waivers.  Any term of this Agreement
may be amended and the observance of any term of this Agreement may be waived
(either generally or in a particular instance and either retroactively or
prospectively), only with the written consent of the Company and the
Investors.  Any amendment or waiver
effected in accordance with this paragraph shall be binding upon each holder of
any Securities purchased under this Agreement at the time outstanding, each
future holder of all such Securities, and the Company.

 

9.7                                 Publicity.  Except as set forth below, no public release
or announcement concerning the transactions contemplated hereby shall be issued
by the Company or the Investors without the prior consent of the Company (in
the case of a release or announcement by the Investors) or the Investors (in
the case of a release or announcement by the Company) (which consents shall not
be unreasonably withheld), except as such release or announcement may be
required by law or the applicable rules or regulations of any securities
exchange or securities 

 

31

 

market, in which case the Company or the Investors, as the case may be,
shall allow the Investors or the Company, as applicable, to the extent
reasonably practicable in the circumstances, reasonable time to comment on such
release or announcement in advance of such issuance.  By 8:30 a.m. (New York City time) on the
trading day immediately following the date hereof, the Company shall issue a
press release disclosing the execution and delivery of this Agreement.  No later than the third trading day following
the date hereof, the Company will file a Current Report on Form 8-K
attaching the press release described in the foregoing sentence.  By 8:30 a.m. (New York City time) on the
trading day immediately following the Closing Date, the Company shall issue a
press release disclosing the consummation of the transactions contemplated by
this Agreement.  No later than the third
trading day following the Closing Date, the Company will file a Current Report
on Form 8-K attaching the press release described in the foregoing
sentence.  In addition, the Company will
make such other filings and notices in the manner and time required by the SEC
or Nasdaq.  Notwithstanding the foregoing,
the Company shall not publicly disclose the name of any Investor, or include
the name of any Investor in any filing with the SEC (other than such Forms 8-K,
the Registration Statement and any exhibits to filings made in respect of this
transaction in accordance with periodic filing requirements under the 1934 Act)
or any regulatory agency or Nasdaq, without the prior written consent of such
Investor, except to the extent such disclosure is required by law or trading
market regulations, in which case the Company shall provide the Investors with
prior notice of such disclosure.

 

9.8                                 Severability.  Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof but shall be interpreted as if it
were written so as to be enforceable to the maximum extent permitted by applicable
law, and any such prohibition or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in any other
jurisdiction.  To the extent permitted by
applicable law, the parties hereby waive any provision of law which renders any
provision hereof prohibited or unenforceable in any respect.

 

9.9                                 Entire Agreement.  This Agreement, including the Exhibits and
the Disclosure Schedules, and the other Transaction Documents constitute the
entire agreement among the parties hereof with respect to the subject matter
hereof and thereof and supersede all prior agreements and understandings, both
oral and written, between the parties with respect to the subject matter hereof
and thereof (including that certain Term Sheet, dated as of November 16,
2005, by and between the Company and Special Situations Funds).

 

9.10                           Further Assurances.  The parties shall execute and deliver all
such further instruments and documents and take all such other actions as may
reasonably be required to carry out the transactions contemplated hereby and to
evidence the fulfillment of the agreements herein contained.

 

9.11                           Governing Law; Consent to
Jurisdiction; Waiver of Jury Trial. 
This Agreement shall be governed by, and construed in accordance with,
the internal laws of the State of New York without regard to the choice of law
principles thereof.  Each of the parties
hereto irrevocably submits to the exclusive jurisdiction of the courts of the
State of New York located in New York County and the United States District
Court for the Southern District of New York for 

 

32

 

the purpose of any suit, action, proceeding or judgment relating to or
arising out of this Agreement and the transactions contemplated hereby.  Service of process in connection with any
such suit, action or proceeding may be served on each party hereto anywhere in
the world by the same methods as are specified for the giving of notices under
this Agreement.  Each of the parties
hereto irrevocably consents to the jurisdiction of any such court in any such
suit, action or proceeding and to the laying of venue in such court.  Each party hereto irrevocably waives any
objection to the laying of venue of any such suit, action or proceeding brought
in such courts and irrevocably waives any claim that any such suit, action or
proceeding brought in any such court has been brought in an inconvenient forum.
 EACH OF THE
PARTIES HERETO WAIVES ANY RIGHT TO REQUEST A TRIAL BY JURY IN ANY LITIGATION
WITH RESPECT TO THIS AGREEMENT AND REPRESENTS THAT COUNSEL HAS BEEN CONSULTED
SPECIFICALLY AS TO THIS WAIVER.

 

9.12                           Independent
Nature of Investors’ Obligations and Rights.  The obligations of each Investor under any
Transaction Document are several and not joint with the obligations of any
other Investor, and no Investor shall be responsible in any way for the
performance of the obligations of any other Investor under any Transaction
Document.  The decision of each Investor
to purchase Securities pursuant to the Transaction Documents has been made by
such Investor independently of any other Investor.  Nothing contained herein or in any
Transaction Document, and no action taken by any Investor pursuant thereto,
shall be deemed to constitute the Investors as a partnership, an association, a
joint venture or any other kind of entity, or create a presumption that the
Investors are in any way acting in concert or as a group with respect to such
obligations or the transactions contemplated by the Transaction Documents.  Each Investor acknowledges that no other
Investor has acted as agent for such Investor in connection with making its
investment hereunder and that no Investor will be acting as agent of such
Investor in connection with monitoring its investment in the Securities or
enforcing its rights under the Transaction Documents.  Each Investor shall be entitled to
independently protect and enforce its rights, including, without limitation,
the rights arising out of this Agreement or out of the other Transaction Documents,
and it shall not be necessary for any other Investor to be joined as an
additional party in any proceeding for such purpose.  The Company acknowledges that each of the
Investors has been provided with the same Transaction Documents for the purpose
of closing a transaction with multiple Investors and not because it was
required or requested to do so by any Investor.

 

[signature pages follow]

 

33

 

IN WITNESS
WHEREOF, the parties have executed this Agreement or caused their duly
authorized officers to execute this Agreement as of the date first above
written.

 

	
  The Company:

  	
  TAPESTRY
  PHARMACEUTICALS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Leonard
  Shaykin

  	
   

  
	
   

  	
  Name: 

  	
  Leonard
  Shaykin

  
	
   

  	
  Title:

  	
  Chairman and
  Chief Executive Officer

  
					

 

 

Signature Page to Purchase Agreement

 

 

The Investors:

 

	
  Baker Bros. Investments II, L.P.

  	
   

  	
   

  
	
  By: Baker Bros. Capital, L.P., (general
  partner)

  	
   

  	
  Baker Biotech Fund III (Z) L.P.

  
	
  By: Baker Bros. Capital (GP), LLC, (general
  partner)

  	
   

  	
  By: Baker Biotech Capital III (Z), L.P.
  (general partner)

  
	
  By: Julian Baker, Managing Member

  	
   

  	
  By: Baker Biotech Capital III (Z) (GP), LLC,
  (general partner)

  
	
   

  	
   

  	
  By: Julian Baker, Managing Member

  
	
   

  	
   

  	
   

  
	
  /s/ Julian Baker

  	
   

  	
  /s/ Julian Baker

  
	
   

  	
   

  	
   

  
	
  Baker Biotech Fund II (Z) L.P.

  	
   

  	
   

  
	
  By: Baker Biotech Capital II (Z), L.P.
  (general partner)

  	
   

  	
  14159, L.P.

  
	
  By: Baker Biotech Capital II (Z) (GP), LLC,
  (general partner)

  	
   

  	
  By: 14159 Capital, L.P., (general partner)

  
	
  By: Julian Baker, Managing Member

  	
   

  	
  By: 14159 Capital (GP), LLC, (general
  partner)

  
	
   

  	
   

  	
  By: Julian Baker, Managing Member

  
	
   

  	
   

  	
   

  
	
  /s/ Julian Baker

  	
   

  	
  /s/ Julian Baker

  
	
   

  	
   

  	
   

  
	
  Baker Biotech Fund III L.P.

  	
   

  	
   

  
	
  By: Baker Biotech Capital III, L.P.
  (general partner)

  	
   

  	
   

  
	
  By: Baker Biotech Capital III (GP), LLC,
  (general partner)

  	
   

  	
   

  
	
  By: Julian Baker, Managing Member

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/ Julian Baker

  	
   

  	
   

  

 

	
  Aggregate Purchase Price: $

  	
   

  	
   

  
	
  Number of Shares:

  	
  See Attachment A

  	
   

  
	
  Number of Warrant Shares:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Address for Notice:

  	
   

  	
   

  
	
   

  	
   

  
	
  Attn:

  	
  Leo Kirby, CFO

  	
   

  
				

 

Signature Page to Purchase Agreement

 

 

Tapestry Pharmaceuticals

 

Attachment A

 

SCHEDULE OF PURCHASERS

 

2/1/2006

 

	
  Purchaser Name and Address

  and Federal Taxpayer ID*

  	
   

  	
  Aggregate

  Number of

  Shares

  	
   

  	
  Purchase

  Price Per

  Share

  	
   

  	
  Aggregate

  Number of

  Warrants

  	
   

  	
  Purchase

  Price Per

  Warrant

  	
   

  	
  Aggregate

  Purchase Price

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Baker Bros.
  Investments II, L.P.

  667 Madison Avenue, 17th Floor

  New York, NY 10021

  Tax ID: 36-4448341

  	
   

  	
  41,641

  	
   

  	
  2.00

  	
   

  	
  41,641

  	
   

  	
  0

  	
   

  	
  $

  	
  83,282.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Baker Biotech
  Fund II (Z), L.P.

  667 Madison Avenue, 17th Floor

  New York, NY 10021

  Tax ID: 30-0089643

  	
   

  	
  54,481

  	
   

  	
  2.00

  	
   

  	
  54,481

  	
   

  	
  0

  	
   

  	
  $

  	
  108,962.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Baker Biotech
  Fund III, L.P.

  667 Madison Avenue, 17th Floor

  New York, NY 10021

  Tax ID: 30-0089645

  	
   

  	
  1,525,130

  	
   

  	
  2.00

  	
   

  	
  1,525,130

  	
   

  	
  0

  	
   

  	
  $

  	
  3,050,260.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Baker Biotech
  Fund III (Z), L.P.

  667 Madison Avenue, 17th Floor

  New York, NY 10021

  Tax ID: 731719525

  	
   

  	
  264,874

  	
   

  	
  2.00

  	
   

  	
  264,874

  	
   

  	
  0

  	
   

  	
  $

  	
  529,748.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  14159, L.P.

  667 Madison Avenue, 17th Floor

  New York, NY 10021

  Tax ID: 86-1123269

  	
   

  	
  113,874

  	
   

  	
  2.00

  	
   

  	
  113,874

  	
   

  	
  0

  	
   

  	
  $

  	
  227,748.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total:

  	
   

  	
  2,000,000

  	
   

  	
   

  	
   

  	
  2,000,000

  	
   

  	
   

  	
   

  	
  $

  	
  4,000,000.00

  	
   

  

 

 

	
   

  	
  NAME OF INVESTOR:

  
	
   

  	
   

  
	
   

  	
  BIOTECHNOLOGY VALUE FUND, L.P.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  BVF Partners L.P., its general partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  BVF Inc., its general partner

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  /s/ Mark N. Lampert

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Mark N. Lampert

  
	
   

  	
   

  	
   

  	
   

  	
  President

  
	
   

  	
   

  	
   

  	
   

  
	
   

  
	
  Aggregate Purchase Price:

  	
  $672,000

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Number of Shares:

  	
  336,000

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Number of Warrant Shares:

  	
  336,000

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Address for Notice:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Grosvenor Capital Management, L.P.

  
	
   

  	
  900 N. Michigan Avenue

  
	
   

  	
  Suite 1100

  
	
   

  	
  Chicago, IL 60611

  
	
   

  	
  Attention: Elizabeth Delaney

  
	
   

  	
  Telephone: 312-506-6862

  
	
   

  	
  Facsimile:  312-506-6870

  
									

 

 

	
   

  	
  NAME OF INVESTOR:

  
	
   

  	
   

  
	
   

  	
  BIOTECHNOLOGY VALUE FUND II, L.P.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  BVF Partners L.P., its general partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  BVF Inc., its general partner

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  /s/ Mark N. Lampert

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Mark N. Lampert

  
	
   

  	
   

  	
   

  	
   

  	
  President

  
	
   

  	
   

  	
   

  	
   

  
	
  Aggregate Purchase Price:

  	
  $459,600

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Number of Shares:

  	
  229,800

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Number of Warrant Shares:

  	
  229,800

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Address for Notice:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Grosvenor Capital Management, L.P.

  
	
   

  	
  900 N. Michigan Avenue

  
	
   

  	
  Suite 1100

  
	
   

  	
  Chicago, IL 60611

  
	
   

  	
  Attention: Elizabeth Delaney

  
	
   

  	
  Telephone: 312-506-6862

  
	
   

  	
  Facsimile:  312-506-6870

  
									

 

 

	
   

  	
  NAME OF INVESTOR:

  
	
   

  	
   

  
	
   

  	
  BVF INVESTMENTS, L.L.C.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  BVF Partners L.P., its manager

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  BVF Inc., its general partner

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  /s/ Mark N. Lampert

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Mark N. Lampert

  
	
   

  	
   

  	
   

  	
   

  	
  President

  
	
   

  
	
  Aggregate Purchase Price:

  	
  $1,666,200

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Number of Shares:

  	
  833,100

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Number of Warrant Shares:

  	
  833,100

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Address for Notice:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Grosvenor Capital Management, L.P.

  
	
   

  	
  900 N. Michigan Avenue

  
	
   

  	
  Suite 1100

  
	
   

  	
  Chicago, IL 60611

  
	
   

  	
  Attention: Elizabeth Delaney

  
	
   

  	
  Telephone: 312-506-6862

  
	
   

  	
  Facsimile:  312-506-6870

  
									

 

 

	
   

  	
  NAME OF INVESTOR:

  
	
   

  	
   

  
	
   

  	
  INVESTMENTS 10, L.L.C.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  BVF Partners L.P., its attonery-in-fact

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  BVF Inc., its general partner

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  /s/ Mark N. Lampert

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Mark N. Lampert

  
	
   

  	
   

  	
   

  	
   

  	
  President

  
	
   

  
	
  Aggregate Purchase Price:

  	
  $202,200

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Number of Shares:

  	
  101,100

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Number of Warrant Shares:

  	
  101,100

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Address for Notice:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Grosvenor Capital Management, L.P.

  
	
   

  	
  900 N. Michigan Avenue

  
	
   

  	
  Suite 1100

  
	
   

  	
  Chicago, IL 60611

  
	
   

  	
  Attention: Elizabeth Delaney

  
	
   

  	
  Telephone: 312-506-6862

  
	
   

  	
  Facsimile:  312-506-6870

  
									

 

 

	
   

  	
  NAME OF INVESTOR:

  
	
   

  	
   

  	
   

  
	
   

  	
  Fort Mason Master, LP

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Dan German

  	
   

  
	
   

  	
  Name:

  	
  Fort Mason Capital, LLC

  	
   

  
	
   

  	
  Title: 

  	
  Managing Member

  	
   

  
	
   

  	
   

  
	
  Aggregate Purchase Price:

  	
  $2,817,300

  
	
   

  	
   

  
	
  Number of Shares:

  	
  1,408,650

  
	
   

  	
   

  
	
  Number of Warrant Shares:

  	
  1,408,650

  
	
   

  
	
  Address for Notice:

  
	
   

  	
  456 Montgomery Street

  
	
   

  	
  San Francisco, CA 94104

  
	
   

  	
   

  
	
   

  	
  Attention:

  	
  Marshall Jensen

  
	
   

  	
  Telephone:

  	
  415-249-3380

  
	
   

  	
  Facsimile:

  	
  415-249-3389

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  With a copy to:

  
	
   

  	
  N/A

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Attention:

  	
   

  
	
   

  	
  Telephone:

  	
   

  
	
   

  	
  Facsimile:

  	
   

  
									

 

Signature Page to Purchase Agreement

 

 

	
   

  	
  NAME OF INVESTOR:

  
	
   

  	
   

  	
   

  
	
   

  	
  Fort Mason Partners, LP

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Dan German

  	
   

  
	
   

  	
  Name:

  	
  Fort Mason Capital, LLC

  	
   

  
	
   

  	
  Title: 

  	
  Managing Member

  	
   

  
	
   

  	
   

  
	
  Aggregate Purchase Price:

  	
  $182,700

  
	
   

  	
   

  
	
  Number of Shares:

  	
  91,350

  
	
   

  	
   

  
	
  Number of Warrant Shares:

  	
  91,350

  
	
   

  
	
  Address for Notice:

  
	
   

  	
  456 Montgomery Street

  
	
   

  	
  San Francisco, CA 94104

  
	
   

  	
   

  
	
   

  	
  Attention:

  	
  Marshall Jensen

  
	
   

  	
  Telephone:

  	
  415-249-3380

  
	
   

  	
  Facsimile:

  	
  415-249-3389

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  With a copy to:

  
	
   

  	
  N/A

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Attention:

  	
   

  
	
   

  	
  Telephone:

  	
   

  
	
   

  	
  Facsimile:

  	
   

  
									

 

Signature Page to Purchase Agreement

 

 

	
   

  	
  NAME OF INVESTOR:

  
	
   

  	
   

  	
   

  
	
   

  	
  Capital Ventures International

  by: Heights Capital Management, Inc.

  its authorized agent

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Martin Kobinger

  	
   

  
	
   

  	
  Name:

  	
  Martin Kobinger

  	
   

  
	
   

  	
  Title: 

  	
  Investment Manager

  	
   

  
	
   

  	
   

  
	
  Aggregate Purchase Price:

  	
  $2,000,000

  
	
   

  	
   

  
	
  Number of Shares:

  	
  1,000,000

  
	
   

  	
   

  
	
  Number of Warrant Shares:

  	
  1,000,000

  
	
   

  
	
  Address for Notice:

  
	
   

  
	
   

  	
  c/o Heights
  Capital Management

  
	
   

  	
  101
  California Street, Suite 3250

  
	
   

  	
  San
  Francisco, CA 94111

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Attention:

  	
  Martin Kobinger

  
	
   

  	
  Telephone:

  	
  415-403-6500

  
	
   

  	
  Facsimile:

  	
  415-403-6525

  
	
   

  	
   

  
	
   

  	
  With a copy to:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Attention:

  	
   

  
	
   

  	
  Telephone:

  	
   

  
	
   

  	
  Facsimile:

  	
   

  
									

 

Signature Page to Purchase Agreement

 

 

	
   

  	
  NAME OF INVESTOR:

  
	
   

  	
   

  	
   

  
	
   

  	
  Merlin BioMed
  Long Term Appreciation, LP

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Norman Schleifer

  	
   

  
	
   

  	
  Name:

  	
  Norman Schleifer

  	
   

  
	
   

  	
  Title: 

  	
  Chief Financial Officer

  	
   

  
	
   

  	
   

  
	
  Aggregate Purchase Price:

  	
  $350,000

  
	
   

  	
   

  
	
  Number of Shares:

  	
  175,000

  
	
   

  	
   

  
	
  Number of Warrant Shares:

  	
  175,000

  
	
   

  
	
  Address for Notice:

  
	
   

  
	
   

  	
  Merlin BioMed
  Group

  
	
   

  	
  230 Park
  Ave, Suite 928

  
	
   

  	
  New York NY
  10169

  
	
   

  	
  Attention:

  	
  Norman Schleifer

  
	
   

  	
  Telephone:

  	
  646 227 5200

  
	
   

  	
  Facsimile:

  	
  646 227 5201

  
									

 

Signature Page to Purchase Agreement

 

 

	
   

  	
  NAME OF INVESTOR:

  
	
   

  	
   

  	
   

  
	
   

  	
  Merlin
  BioMed Offshore Master Fund

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Norman Schleifer

  	
   

  
	
   

  	
  Name:

  	
  Norman Schleifer

  	
   

  
	
   

  	
  Title: 

  	
  Chief Financial Officer

  	
   

  
	
   

  	
   

  
	
  Aggregate Purchase Price:

  	
  $650,000

  
	
   

  	
   

  
	
  Number of Shares:

  	
  325,000

  
	
   

  	
   

  
	
  Number of Warrant Shares:

  	
  325,000

  
	
   

  
	
  Address for Notice:

  
	
   

  
	
   

  	
  Merlin BioMed
  Group

  
	
   

  	
  230 Park
  Ave, Suite 928

  
	
   

  	
  New York NY
  10169

  
	
   

  	
  Attention:

  	
  Norman Schleifer

  
	
   

  	
  Telephone:

  	
  646 227 5200

  
	
   

  	
  Facsimile:

  	
  646 227 5201

  
									

 

Signature Page to Purchase Agreement

 

 

	
   

  	
  NAME OF INVESTOR:

  
	
   

  	
   

  	
   

  
	
   

  	
  Special
  Situations Fund III Q.P. L.P.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David Greenhouse

  	
   

  
	
   

  	
  Name:

  	
  David Greenhouse

  	
   

  
	
   

  	
  Title: 

  	
   

  	
   

  
	
   

  	
   

  
	
  Aggregate Purchase Price:

  	
  $2,400,000.00

  
	
   

  	
   

  
	
  Number of Shares:

  	
  1,200,000

  
	
   

  	
   

  
	
  Number of Warrant Shares:

  	
  1,200,000

  
	
   

  
	
  Address for Notice:

  
	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Attention:

  	
   

  
	
   

  	
  Telephone:

  	
   

  
	
   

  	
  Facsimile:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  With a copy to:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Attention:

  	
   

  
	
   

  	
  Telephone:

  	
   

  
	
   

  	
  Facsimile:

  	
   

  
									

 

Signature Page to Purchase Agreement

 

 

	
   

  	
  NAME OF INVESTOR:

  
	
   

  	
   

  	
   

  
	
   

  	
  Special
  Situations Fund L.P.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David Greenhouse

  	
   

  
	
   

  	
  Name:

  	
  David Greenhouse

  	
   

  
	
   

  	
  Title: 

  	
   

  	
   

  
	
   

  	
   

  
	
  Aggregate Purchase Price:

  	
  $200,000.00

  
	
   

  	
   

  
	
  Number of Shares:

  	
  100,000

  
	
   

  	
   

  
	
  Number of Warrant Shares:

  	
  100,000

  
	
   

  
	
  Address for Notice:

  
	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Attention:

  	
   

  
	
   

  	
  Telephone:

  	
   

  
	
   

  	
  Facsimile:

  	
   

  
	
   

  	
   

  
	
   

  	
  with a copy to:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Attention:

  	
   

  
	
   

  	
  Telephone:

  	
   

  
	
   

  	
  Facsimile:

  	
   

  
									

 

Signature Page to Purchase Agreement

 

 

	
   

  	
  NAME OF INVESTOR:

  
	
   

  	
   

  	
   

  
	
   

  	
  Special
  Situations Life Science Fund III L.P.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David Greenhouse

  	
   

  
	
   

  	
  Name:

  	
  David Greenhouse

  	
   

  
	
   

  	
  Title: 

  	
   

  	
   

  
	
   

  	
   

  
	
  Aggregate Purchase Price:

  	
  $700,000

  
	
   

  	
   

  
	
  Number of Shares:

  	
  350,000

  
	
   

  	
   

  
	
  Number of Warrant Shares:

  	
  350,000

  
	
   

  
	
  Address for Notice:

  
	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Attention:

  	
   

  
	
   

  	
  Telephone:

  	
   

  
	
   

  	
  Facsimile:

  	
   

  
	
   

  	
   

  
	
   

  	
  with a copy to:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Attention:

  	
   

  
	
   

  	
  Telephone:

  	
   

  
	
   

  	
  Facsimile:

  	
   

  
									

 

Signature Page to Purchase Agreement

 

 

	
   

  	
  NAME OF INVESTOR:

  
	
   

  	
   

  	
   

  
	
   

  	
  Special Situations Cayman Fund L.P.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David Greenhouse

  	
   

  
	
   

  	
  Name:

  	
  David Greenhouse

  	
   

  
	
   

  	
  Title: 

  	
   

  	
   

  
	
   

  	
   

  
	
  Aggregate Purchase Price:

  	
  $700,000.00

  	
   

  
	
   

  	
   

  	
   

  
	
  Number of Shares:

  	
  350,000

  	
   

  
	
   

  	
   

  	
   

  
	
  Number of Warrant Shares:

  	
  350,000

  	
   

  
	
   

  
	
  Address for Notice:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Attention:

  	
   

  
	
   

  	
  Telephone:

  	
   

  
	
   

  	
  Facsimile:

  	
   

  
	
   

  	
   

  
	
   

  	
  with a copy to:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Attention:

  	
   

  
	
   

  	
  Telephone:

  	
   

  
	
   

  	
  Facsimile:

  	
   

  
										

 

 

	
   

  	
  NAME OF INVESTOR:

  
	
   

  	
   

  	
   

  
	
   

  	
  Special Situations Private Equity Fund L.P.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David Greenhouse

  	
   

  
	
   

  	
  Name:

  	
  David  Greenhouse

  	
   

  
	
   

  	
  Title: 

  	
   

  	
   

  
	
   

  	
   

  
	
  Aggregate Purchase Price:

  	
  $1,000,000.00

  
	
   

  	
   

  
	
  Number of Shares:

  	
  500,000

  
	
   

  	
   

  
	
  Number of Warrant Shares:

  	
  500,000

  
	
   

  
	
  Address for Notice:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Attention:

  	
   

  
	
   

  	
  Telephone:

  	
   

  
	
   

  	
  Facsimile:

  	
   

  
	
   

  	
   

  
	
   

  	
  with a copy to:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Attention:

  	
   

  
	
   

  	
  Telephone:

  	
   

  
	
   

  	
  Facsimile:

  	
   

  
								

 

 

	
   

  	
  NAME OF INVESTOR:

  
	
   

  	
   

  	
   

  
	
   

  	
  IBA FBO Chung W. Kong DB Securities Inc.

  
	
   

  	
  Custodian Roth Conversion Account

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Chung W. Kong

  	
   

  
	
   

  	
  Name:

  	
  Chung W. Kong

  	
   

  
	
   

  	
  Title: 

  	
  Beneficiary

  	
   

  
	
   

  	
   

  
	
  Aggregate Purchase Price:

  	
  $20,000.00

  
	
   

  	
   

  
	
  Number of Shares:

  	
  10,000

  
	
   

  	
   

  
	
  Number of Warrant Shares:

  	
  10,000

  
	
   

  
	
  Address for Notice:

  
	
   

  	
  C/O Tang Capital Partners, LP

  
	
   

  	
  4401 Eastgate Mall

  
	
   

  	
  San Diego, CA 92121

  
	
   

  	
  Attention:

  	
  Kevin Tang

  
	
   

  	
  Telephone:

  	
  858-200-3030

  
	
   

  	
  Facsimile:

  	
  858-200-3837

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  With a copy to:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Attention:

  	
   

  
	
   

  	
  Telephone:

  	
   

  
	
   

  	
  Facsimile:

  	
   

  
								

 

Signature Page to Purchase Agreement

 

 

	
   

  	
  NAME OF INVESTOR:

  
	
   

  	
   

  	
   

  
	
   

  	
  IBA FBO Chang L. Kong DB Securities Inc.

  
	
   

  	
  Custodian Roth Conversion Account

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Chang L. Kong

  	
   

  
	
   

  	
  Name:

  	
  Chang L. Kong

  	
   

  
	
   

  	
  Title: 

  	
  Beneficiary

  	
   

  
	
   

  	
   

  
	
  Aggregate Purchase Price:

  	
  $20,000.00

  
	
   

  	
   

  
	
  Number of Shares:

  	
  10,000

  
	
   

  	
   

  
	
  Number of Warrant Shares:

  	
  10,000

  
	
   

  
	
  Address for Notice:

  
	
   

  	
  C/O Tang Capital Partners, LP

  
	
   

  	
  4401 Eastgate Mall

  
	
   

  	
  San Diego, CA 92121

  
	
   

  	
  Attention:

  	
  Kevin Tang

  
	
   

  	
  Telephone:

  	
  858-200-3830

  
	
   

  	
  Facsimile:

  	
  858-200-3837

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  With a copy to:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Attention:

  	
   

  
	
   

  	
  Telephone:

  	
   

  
	
   

  	
  Facsimile:

  	
   

  
								

 

Signature Page to Purchase Agreement

 

 

	
   

  	
  NAME OF INVESTOR:

  
	
   

  	
   

  	
   

  
	
   

  	
  Tang Capital Partners, LP

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Kevin C. Tang

  	
   

  
	
   

  	
  Name:

  	
  Kevin C. Tang

  	
   

  
	
   

  	
  Title: 

  	
  Managing Member

  	
   

  
	
   

  	
   

  
	
  Aggregate Purchase Price:

  	
  $3,410,000.00

  
	
   

  	
   

  
	
  Number of Shares:

  	
  1,705,000

  
	
   

  	
   

  
	
  Number of Warrant Shares:

  	
  1,705,000

  
	
   

  
	
  Address for Notice:

  
	
   

  	
  4401 Eastgate Mall

  
	
   

  	
  San Diego, CA 92121

  
	
   

  	
   

  
	
   

  	
  Attention:

  	
  Kevin Tang

  
	
   

  	
  Telephone:

  	
  858-200-3830

  
	
   

  	
  Facsimile:

  	
  858-200-3837

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  with a copy to:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Attention:

  	
   

  
	
   

  	
  Telephone:

  	
   

  
	
   

  	
  Facsimile:

  	
   

  
									

 

Signature Page to Purchase Agreement

 

 

	
   

  	
  NAME OF INVESTOR:

  
	
   

  	
   

  	
   

  
	
   

  	
  Kevin C. Tang as Custodian for Julian Kong
  Tang

  
	
   

  	
  Under the CA Transfer to Minors Act

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Kevin C. Tang

  	
   

  
	
   

  	
  Name:

  	
  Kevin C. Tang

  	
   

  
	
   

  	
  Title: 

  	
  Trustee

  	
   

  
	
   

  	
   

  
	
  Aggregate Purchase Price:

  	
  $70,000.00

  
	
   

  	
   

  
	
  Number of Shares:

  	
  35,000

  
	
   

  	
   

  
	
  Number of Warrant Shares:

  	
  35,000

  
	
   

  
	
  Address for Notice:

  
	
   

  	
  C/O Tang Capital Partners, LP

  
	
   

  	
  4401 Eastgate Mall

  
	
   

  	
  San Diego, CA 92121

  
	
   

  	
  Attention:

  	
  Kevin C. Tang

  
	
   

  	
  Telephone:

  	
  858-200-3830

  
	
   

  	
  Facsimile:

  	
  858-200-3837

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  with a copy to:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Attention:

  	
   

  
	
   

  	
  Telephone:

  	
   

  
	
   

  	
  Facsimile:

  	
   

  
								

 

Signature Page to Purchase Agreement

 

 

	
   

  	
  NAME OF INVESTOR:

  
	
   

  	
   

  	
   

  
	
   

  	
  Kevin C. Tang as Custodian for Justin Lee
  Tang

  
	
   

  	
  Under the CA Transfer to Minors Act

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Kevin C. Tang

  	
   

  
	
   

  	
  Name:

  	
  Kevin C. Tang

  	
   

  
	
   

  	
  Title: 

  	
  Trustee

  	
   

  
	
   

  	
   

  
	
  Aggregate Purchase Price:

  	
  $100,000.00

  
	
   

  	
   

  
	
  Number of Shares:

  	
  50,000

  
	
   

  	
   

  
	
  Number of Warrant Shares:

  	
  50,000

  
	
   

  
	
  Address for Notice:

  
	
   

  	
  C/O Tang Capital Partners, LP

  
	
   

  	
  4401 Eastgate Mall

  
	
   

  	
  San Diego, CA 92121

  
	
   

  	
  Attention:

  	
  Kevin C. Tang

  
	
   

  	
  Telephone:

  	
  858-200-3830

  
	
   

  	
  Facsimile:

  	
  858-200-3837

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  with a copy to:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Attention:

  	
   

  
	
   

  	
  Telephone:

  	
   

  
	
   

  	
  Facsimile:

  	
   

  
								

 

Signature Page to Purchase Agreement

 

 

	
   

  	
  NAME OF INVESTOR:

  
	
   

  	
   

  	
   

  
	
   

  	
  Kevin C. Tang as Custodian for Noa Young
  Tang

  
	
   

  	
  Under the CA Transfer to Minors Act

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Kevin C. Tang

  	
   

  
	
   

  	
  Name:

  	
  Kevin C. Tang

  	
   

  
	
   

  	
  Title: 

  	
  Trustee

  	
   

  
	
   

  	
   

  
	
  Aggregate Purchase Price:

  	
  $30,000.00

  
	
   

  	
   

  
	
  Number of Shares:

  	
  15,000

  
	
   

  	
   

  
	
  Number of Warrant Shares:

  	
  15,000

  
	
   

  
	
  Address for Notice:

  
	
   

  	
  C/O Tang Capital Partners, LP

  
	
   

  	
  4401 Eastgate Mall

  
	
   

  	
  San Diego, CA 92121

  
	
   

  	
  Attention:

  	
  Kevin C. Tang

  
	
   

  	
  Telephone:

  	
  858-200-3830

  
	
   

  	
  Facsimile:

  	
  858-200-3837

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  with a copy to:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Attention:

  	
   

  
	
   

  	
  Telephone:

  	
   

  
	
   

  	
  Facsimile:

  	
   

  
								

 

Signature Page to Purchase Agreement

 

 

	
   

  	
  NAME OF INVESTOR:

  
	
   

  	
   

  	
   

  
	
   

  	
  Kevin Tang and Haeyoung Tang Trustees The
  Tang Family Trust Dated 8-27-02

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Kevin C. Tang

  	
   

  
	
   

  	
  Name:

  	
  Kevin C. Tang

  	
   

  
	
   

  	
  Title: 

  	
  Trustee

  	
   

  
	
   

  	
   

  
	
  Aggregate Purchase Price:

  	
  $300,000.00

  
	
   

  	
   

  
	
  Number of Shares:

  	
  150,000

  
	
   

  	
   

  
	
  Number of Warrant Shares:

  	
  150,000

  
	
   

  
	
  Address for Notice:

  
	
   

  	
  C/O Tang Capital Partners, LP

  
	
   

  	
  4401 Eastgate Mall

  
	
   

  	
  San Diego, CA 92121

  
	
   

  	
  Attention:

  	
  Kevin Tang

  
	
   

  	
  Telephone:

  	
  858-200-3830

  
	
   

  	
  Facsimile:

  	
  858-200-3837

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  with a copy to:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Attention:

  	
   

  
	
   

  	
  Telephone:

  	
   

  
	
   

  	
  Facsimile:

  	
   

  
								

 

Signature Page to Purchase Agreement

 

 

	
   

  	
  NAME OF INVESTOR:

  
	
   

  	
   

  	
   

  
	
   

  	
  IRA FBO Keven Tang DB Securities Inc.

  
	
   

  	
  Custodian Rollover Account

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Kevin C. Tang

  	
   

  
	
   

  	
  Name:

  	
  Kevin C. Tang

  	
   

  
	
   

  	
  Title: 

  	
  Beneficiary

  	
   

  
	
   

  	
   

  
	
  Aggregate Purchase Price:

  	
  $50,000.00

  
	
   

  	
   

  
	
  Number of Shares:

  	
  25,000

  
	
   

  	
   

  
	
  Number of Warrant Shares:

  	
  25,000

  
	
   

  
	
  Address for Notice:

  
	
   

  	
  C/O Tang Capital Partners, LP

  
	
   

  	
  4401 Eastgate Mall

  
	
   

  	
  San Diego, CA 92121

  
	
   

  	
  Attention:

  	
  Kevin Tang

  
	
   

  	
  Telephone:

  	
  858-200-3830

  
	
   

  	
  Facsimile:

  	
  858-200-3837

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  with a copy to:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Attention:

  	
   

  
	
   

  	
  Telephone:

  	
   

  
	
   

  	
  Facsimile:

  	
   

  
								

 

Signature Page to Purchase Agreement

 

 

	
   

  	
  NAME OF INVESTOR:

  
	
   

  	
   

  	
   

  
	
   

  	
  VERSANT CAPITAL MANAGEMENT LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Herriot Tabuteau

  	
   

  
	
   

  	
  Name:

  	
   HERRIOT TABUTEAU

  	
   

  
	
   

  	
  Title: 

  	
  MANAGING MEMBER

  	
   

  
	
   

  	
   

  
	
  Aggregate Purchase Price:

  	
  $1,500,000.00

  
	
   

  	
   

  
	
  Number of Shares:

  	
  750,000

  
	
   

  	
   

  
	
  Number of Warrant Shares:

  	
  750,000

  
	
   

  
	
  Address for Notice:

  
	
   

  	
  VERSANT CAPITAL MANAGEMENT LLC

  
	
   

  	
  45 ROCKEFELLER PLAZA SUITE 2074

  
	
   

  	
  NEW YORK, NY 10111

  
	
   

  	
  Attention:

  	
  HERRIOT TABUTEAU

  
	
   

  	
  Telephone:

  	
  212-332-3467

  
	
   

  	
  Facsimile:

  	
  212-332-3468

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  with a copy to:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Attention:

  	
   

  
	
   

  	
  Telephone:

  	
   

  
	
   

  	
  Facsimile:

  	
   

  
								

 

Signature Page to Purchase Agreement

 

 

	
   

  	
  NAME OF INVESTOR:

  
	
   

  	
   

  	
   

  
	
   

  	
  XMARK JV INVESTMENT PARTNERS, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ MITCHELL D. KAYE

  	
   

  
	
   

  	
  Name:

  	
  MITCHELL D. KAYE

  	
   

  
	
   

  	
  Title: 

  	
  CHIEF INVESTMENT OFFICER

  	
   

  
	
   

  	
   

  
	
  Aggregate Purchase Price:

  	
  $1,000,000

  
	
   

  	
   

  
	
  Number of Shares:

  	
  500,000

  
	
   

  	
   

  
	
  Number of Warrant Shares:

  	
  500,000

  
	
   

  
	
  Address for Notice:

  
	
   

  	
  XMARK FUNDS

  
	
   

  	
  301 TRESSER BLVD. SUITE 1320

  
	
   

  	
  STAMFORD, CT 06901

  
	
   

  	
  Attention:

  	
  MITCHELL KAYE

  
	
   

  	
  Telephone:

  	
  203-653-2500

  
	
   

  	
  Facsimile:

  	
  203-653-2501

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  with a copy to:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Attention:

  	
   

  
	
   

  	
  Telephone:

  	
   

  
	
   

  	
  Facsimile:

  	
   

  
								

 

Signature Page to Purchase Agreement

 

 

	
   

  	
  NAME OF INVESTOR:

  
	
   

  	
   

  	
   

  
	
   

  	
  XMARK OPPORTUNITY FUND, L.P.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ MITCHELL D. KAYE

  	
   

  
	
   

  	
  Name:

  	
  MITCHELL D. KAYE

  	
   

  
	
   

  	
  Title: 

  	
  C.I.O.

  	
   

  
	
   

  	
   

  
	
  Aggregate Purchase Price:

  	
  $450,000

  
	
   

  	
   

  
	
  Number of Shares:

  	
  225,000

  
	
   

  	
   

  
	
  Number of Warrant Shares:

  	
  225,000

  
	
   

  
	
  Address for Notice:

  
	
   

  	
  XMARK FUNDS

  
	
   

  	
  301 TRESSER BLVD. SUITE 1320

  
	
   

  	
  STAMFORD, CT 06901

  
	
   

  	
  Attention:

  	
  MITCHELL KAYE

  
	
   

  	
  Telephone:

  	
  203 653 2500

  
	
   

  	
  Facsimile:

  	
  203 653 2501

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  with a copy to:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Attention:

  	
   

  
	
   

  	
  Telephone:

  	
   

  
	
   

  	
  Facsimile:

  	
   

  
								

 

Signature Page to Purchase Agreement

 

 

	
   

  	
  NAME OF INVESTOR:

  
	
   

  	
   

  	
   

  
	
   

  	
  XMARK OPPORTUNITY FUND, LTD.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ MITCHELL D. KAYE

  	
   

  
	
   

  	
  Name:

  	
  MITCHELL D. KAYE

  	
   

  
	
   

  	
  Title: 

  	
  C.I.O.

  	
   

  
	
   

  	
   

  
	
  Aggregate Purchase Price:

  	
  $550,000

  
	
   

  	
   

  
	
  Number of Shares:

  	
  275,000

  
	
   

  	
   

  
	
  Number of Warrant Shares:

  	
  275,000

  
	
   

  
	
  Address for Notice:

  
	
   

  	
  XMARK FUNDS

  
	
   

  	
  301 TRESSER BLVD. SUITE 1320

  
	
   

  	
  STAMFORD, CT 06901

  
	
   

  	
  Attention:

  	
  MITCHELL D. KAYE

  
	
   

  	
  Telephone:

  	
  203-653-2500

  
	
   

  	
  Facsimile:

  	
  203-653-2501

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  with a copy to:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Attention:

  	
   

  
	
   

  	
  Telephone:

  	
   

  
	
   

  	
  Facsimile:

  	
   

  
								

 

Signature Page to Purchase Agreement

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00097-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00097-of-00352.parquet"}]]