Document:

Exhibit
      10.1

    

    SECOND
      AMENDMENT TO ASSET PURCHASE AGREEMENT 

    

    This
      Second Amendment to Asset Purchase Agreement (this “Second
      Amendment”)
      effective as of April 17, 2007, and entered into by and among Nayna Networks,
      Inc., a Nevada corporation (the “Buyer”),
      Abundance Networks, Inc., a Delaware corporation and wholly-owned subsidiary
      of
      the Buyer, Abundance Networks, LLC, a Delaware limited liability company (the
      “Seller”)
      and
      Abundance Networks (India) Pvt Ltd, an India private limited company and wholly
      owned subsidiary of the Seller (collectively, the “Parties”).
      

     

    WITNESSETH
      

     

    WHEREAS:
      The
      Parties previously entered into that certain Asset Purchase Agreement, dated
      as
      of December 1, 2005 (the “Original
      Agreement”).
      

     

    WHEREAS:
      The
      Parties previously entered into that certain First Amendment to Asset Purchase
      Agreement, dated as of January 20, 2006 (the “First
      Amendment”).
      

     

    WHEREAS:
      Section
      10.9 of the Original Agreement provides that any term of the Original Agreement
      may be amended with the written consent of each of the Parties. 

     

    WHEREAS:
      In
      connection with the Parties’ desire to amend the payment terms contained in the
      Original Agreement, as amended by the First Amendment, the parties hereto wish
      to amend the Original Agreement as set forth herein. 

     

    NOW,
      THEREFORE, the
      Parties hereto, for good and valuable consideration, the receipt and sufficiency
      of which are hereby acknowledged, hereby agree as follows: 

     

    
      	
              1.
                

            	
              Section
                1.3(b)(i) of the Original Agreement and as amended in Section 2 of
                the
                First Amendment shall be deleted in its entirety and replaced with
                the
                following in lieu thereof: 

            

    

    “(i)
      The
      Buyer shall issue 4,500,000 shares of Common Stock to Seller on or before April
      30, 2007.” 

     

    
      	
              2.
                

            	
              Section
                1.3(b)(ii) of the Original Agreement shall be deleted in its entirety
                and
                replaced with the following in lieu thereof:

            

    

    “(ii)
       RESERVED”

     

    
      	
              3.

            	
              Section
                1.3(b)(iii) of the Original Agreement shall be deleted in its entirety
                and
                replaced with the following in lieu
                thereof:

            

    

    “(iii)
       RESERVED”

    

    
      	
              4.

            	
              Section
                1.3(d) of the Original Agreement shall be deleted in its entirety
                and
                replaced with the following in lieu
                thereof:

            

    

    “(d)
       RESERVED”

    

    
      	
              5.

            	
              This
                Second Amendment shall be governed by and construed in accordance
                with the
                internal laws of the State of California, without giving effect to
                any
                choice or conflict of law provision or rule (whether of the State
                of
                California or any other jurisdiction) that would cause the application
                of
                laws of any jurisdictions other than those of the State of California.
                

            

    

     

    
      	
              6
                

            	
              This
                Second Amendment may be executed in one or more counterparts and
                by
                different parties hereto in separate counterparts, each of which
                when so
                executed and delivered shall be deemed an original, but all such
                counterparts together shall constitute one and the same instrument;
                signature pages may be detached from multiple separate counterparts
                and
                attached to a single counterpart so that all signature pages are
                physically attached to the same document.

            

    

    

    [Remainder
      of Page Intentionally Left Blank] 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

     

    IN
      WITNESS WHEREOF, the Parties have caused this Second Amendment to Asset Purchase
      Agreement to be duly executed as of the date first above written. 

    

    

    NAYNA
      NETWORKS, INC. 

    a
      Nevada
      corporation 

     

    /s/
      Naveen S. Bisht

    
      
        

      

    

    Name:
      Naveen S. Bisht 

    Title:
      President & CEO 

     

    

    ABUNDANCE
      NETWORKS, INC. 

    a
      Delaware corporation 

     

    /s/
      Naveen
      S. Bisht

    
      
        

      

    

    Name:
      Naveen S. Bisht 

    Title:
      President & CEO 

     

    

    ABUNDANCE
      NETWORKS, LLC 

    a
      Delaware limited liability company 

     

    /s/
      Suresh R. Pillai

    
      
        

      

    

    Name:
      Suresh R. Pillai 

    Title:
      President & CEO 

     

    

    ABUNDANCE
      NETWORKS (INDIA) PVT LTD 

    an
      India
      private limited company 

     

    /s/
      Suresh R. Pillai

    
      
        

      

    

    Name:
      Suresh R. Pillai 

    Title:
      President & CEOEXHIBIT
      4.4

    

    SUBSCRIPTION
      AGREEMENT

     

    This
      Subscription Agreement (this “Agreement”)
      is
      made as of the date set forth on the signature page of this Agreement by and
      between Velcera Pharmaceuticals, Inc., a Delaware corporation (the “Company”),
      and
      each party who is a signatory hereto (individually, a “Subscriber”
and
      collectively with other signatories of similar subscription agreements entered
      into in connection with the Offering described below, the “Subscribers”).

    

    RECITALS:

    

    WHEREAS,
      Maxim
      Group, LLC is acting as exclusive placement agent (“Placement
      Agent”),
      on a
“best efforts” basis, in a private offering (the “Offering”)
      of
      units (the “Units”),
      each
      consisting of one (1) share of the Company’s Common Stock, $.001 par value per
      share (the “Common
      Stock”)
      and
      one (1) warrant to purchase one-half (0.5) of a share of Common Stock at the
      purchase price of $1.87 per share (the “Warrants”);

    

    WHEREAS,
      the
      Company desires to offer and sell Units at a price of $1.87 (the “Purchase
      Price”)
      with a
      minimum offering amount of 2,673,797 Units for an aggregate amount of
      $5,000,000.39 (the “Minimum
      Offering”)
      and up
      to 5,347,593 Units for aggregate gross proceeds of $9,999,998.91 (the
“Maximum
      Offering”).
      The
      minimum investment per Subscriber is 50,000 Units ($93,500), although the
      Company, in its sole discretion may allow sales of a fewer number of
      Units;

    

    WHEREAS,
      simultaneously upon the Initial Closing (as defined below), the Company shall
      complete a “reverse merger” (the “Merger”)
      with
      the wholly owned subsidiary (“Merger
      Sub”)
      of a
      publicly reporting shell company (“Pubco”)
      pursuant to a merger agreement customary for transactions of such nature (the
      “Merger
      Agreement”).
      The
      Company expects that such Merger Sub will be Denali Acquisition Corp., a
      Delaware corporation, a wholly-owned subsidiary of Denali Sciences, Inc., a
      Delaware corporation;

    

    WHEREAS,
      the
      Company has retained Maxim Group LLC to act as its placement agent in connection
      with the sale of the securities pursuant to this Agreement (the “Placement
      Agent”);
      and

    

    WHEREAS,
      the
      Company desires to enter into this Agreement to issue and sell the Units and
      the
      Subscriber desires to purchase that number of Units set forth on the signature
      page hereto on the terms and conditions set forth herein; and

     

    WHEREAS,
      the
      terms of the Offering are summarized in that certain Confidential Private
      Placement Memorandum dated January 11, 2007 (the “Memorandum”).

    

    AGREEMENT:

    

    NOW,
      THEREFORE,
      in
      consideration of the promises and the mutual representations and covenants
      hereinafter set forth, the parties hereto do hereby agree as
      follows:

    
      
        
        

      

      
        
        

        
          

        

      

       

    

     

    
      	I.	
              SUBSCRIPTION
                OF UNITS

            

    

    

    1.1 Subject
      to the terms set forth herein and in the Memorandum, the Subscriber hereby
      irrevocably subscribes for and agrees to purchase from the Company that number
      of Units as is set forth on the signature page hereto at the Purchase Price.
      The
      aggregate Purchase Price is payable by wire transfer of immediately available
      funds to:

    

    
      	
              Bank
                Name:

            	 	
              JP
                Morgan Chase Bank

            
	
              ABA
                #:

            	 	 
	
              Acct
                #:

            	 	 
	
              Acct.
                Name: 

            	 	
              American
                Stock Transfer & Trust Company, as Agent for 

              Velcera
                Pharmaceuticals, Inc. 

            

    

    

    1.2 The
      minimum purchase that may be made by any prospective investor shall be 50,000
      Units. Subscriptions for investment below the minimum investment may be accepted
      at the discretion of the Company. The Company reserves the right to reject
      any
      subscription made hereby, in whole or in part, in its sole discretion. The
      Company’s agreement with each Subscriber is a separate agreement and the sale of
      the Units to each Subscriber is a separate sale.

    

    1.3 Pending
      the sale of the Units, all funds paid hereunder shall be deposited by the
      Company in escrow with JP Morgan Chase Bank. The Offering period shall expire
      on
      February 28, 2007 (the “Termination Date”), unless extended by mutual agreement
      between the Company and the Placement Agent. The Subscriber hereby authorizes
      and directs the Company and the Placement Agent to direct the Escrow Agent
      to
      return any funds for unaccepted subscriptions to the same account from which
      the
      funds were drawn, without interest.

    

    1.4 On
      or
      prior to Termination Date, the Company may conduct one or more closings of
      the
      purchase and sale of Units (a “Closing”).
      Each
      Closing shall occur at the offices of the Placement Agent at 405 Lexington
      Avenue, New York, New York, 10174.

    

    1.5 Certificates
      evidencing the Common Stock purchased by the Subscriber pursuant to this
      Agreement will be prepared for delivery to the Subscriber within ten (10)
      business days following the Closing at which such purchase takes place.
      Certificates evidencing the Warrants purchased by the Subscriber will be
      prepared for delivery to the Subscriber within ten (10) business days following
      the final Closing. The Subscriber hereby authorizes and directs the Company
      to
      deliver the certificates representing the Common Stock and Warrants purchased
      by
      the Subscriber pursuant to this Agreement directly to the Subscriber's account
      maintained by the Placement Agent, if any, or, if no such account exists, to
      the
      residential or business address indicated on the signature page hereto.

    

    1.6
       Placement
      of the Units will be made by the Company who will remit certain compensation
      to
      the Placement Agent for introduction to investors and other
      services.

     

    
      	II.	
              REPRESENTATIONS
                BY SUBSCRIBER

            

    

     

    The
      Subscriber agrees, represents and warrants to the Company and the Placement
      Agent, severally and solely with respect to itself and its purchase hereunder
      and not with respect to any of the other Subscribers, that:

     

    2.1 Organization
      and Qualification.
      If an
      entity, the Subscriber is duly incorporated, organized or otherwise formed,
      validly existing and in good standing under the laws of the jurisdiction in
      which it is incorporated, organized or otherwise formed.

     

    
      
        
        

      

      
        
        

        
          

        

      

       

    

     

    2.2 Authorization.
      If an
      entity: (a) the Subscriber has the requisite corporate or other requisite power
      and authority to enter into and to perform its obligations under this Agreement
      and to consummate the transactions contemplated hereby in accordance with the
      terms hereof; and (b) the execution, delivery and performance of this Agreement
      by the Subscriber and the consummation by it of the transactions contemplated
      hereby have been duly authorized by the Subscriber’s Board of Directors or other
      governing body and no further consent or authorization of the Subscriber, its
      Board of Directors or its shareholders, members or other interest holders is
      required.

     

    2.3 Enforcement.
      This
      Agreement has been duly executed by the Subscriber and constitutes a legal,
      valid and binding obligation of the Subscriber enforceable against the
      Subscriber in accordance with its terms, subject to the effect of any applicable
      bankruptcy, insolvency, reorganization or moratorium or similar laws affecting
      the rights of creditors generally and the application of general principles
      of
      equity.

     

    2.4 Consents.
      The
      Subscriber is not required to give any notice to, make any filing, application
      or registration with, obtain any authorization, consent, order or approval
      of or
      obtain any waiver from any person or entity in order to execute and deliver
      this
      Agreement or to consummate the transactions contemplated hereby, except for
      such
      notices, filings, applications, registrations, authorizations, consents, orders,
      approvals and waivers (if any) as have been obtained and the filing of a Form
      D
      with the Securities and Exchange Commission (the “Commission”)
      and
      other similar filings required by applicable state securities or “blue sky” laws
      and regulations in connection with offerings of securities under Rule 506
      (“Rule
      506”)
      promulgated under the Securities Act of 1933, as amended (the “Securities
      Act”).

     

    2.5 Noncontravention.
      Neither
      the execution and the delivery by the Subscriber of this Agreement, nor the
      consummation by the Subscriber of the transactions contemplated hereby, will
      (a)
      violate any law, rule, injunction, or judgment of any governmental agency or
      court to which the Subscriber is subject or any provision of its charter,
      bylaws, trust agreement, or other governing documents or (b) conflict with,
      result in a breach of, or constitute a default under, any agreement, contract,
      lease, license, instrument, or other arrangement to which the Subscriber is
      a
      party or by which the Subscriber is bound or to which any of its assets is
      subject.

     

    2.6 Investment
      Purpose.
      The
      Subscriber is purchasing the Units for its own account and not with a present
      view toward the public sale or distribution thereof.

     

    2.7 Accredited
      Subscriber Status.
      The
      Subscriber is an “accredited investor” as defined in Regulation D and has
      delivered to the Company a Confidential Investor Questionnaire substantially
      in
      the form of Exhibit
      A
      attached
      hereto. The Subscriber hereby represents and warrants that, either by reason
      of
      the Subscriber’s business or financial experience or the business or financial
      experience of the Subscriber’s advisors (including, but not limited to, a
“purchaser representative” (as defined in Rule 501(h) promulgated under
      Regulation D), attorney and/or an accountant each as engaged by the Subscriber
      at its sole risk and expense) the Subscriber (a) has the capacity to protect
      its
      own interests in connection with the transaction contemplated hereby and/or
      (b)
      the Subscriber has prior investment experience, including investments in
      securities of privately-held companies or companies whose securities are not
      listed, registered, quoted and/or traded on a national securities exchange,
      including
      the Nasdaq Global Select Market, the Nasdaq Global Market, and the Nasdaq
      Capital Market (together,
      the “NASDAQ”);
      to
      the extent necessary, the Subscriber has retained, at its sole risk and expense,
      and relied upon appropriate professional advice regarding the investment, tax
      and legal merits and consequences of this Agreement and the purchase of the
      Units hereunder; if an entity, the Subscriber was not formed for the sole
      purpose of purchasing the Units.

    
      
        
        

      

      
        
        

        
          

        

      

       

    

     

    2.8 Reliance
      on Exemptions.
      The
      Subscriber agrees, acknowledges and understands that the Units are being offered
      and sold to it in reliance upon specific exemptions from the registration
      requirements of United States federal and applicable state securities or “blue
      sky” laws and that the Company and its counsel are relying upon the truth and
      accuracy of, and the Subscriber’s compliance with, the representations,
      warranties, covenants, agreements, acknowledgments and understandings of the
      Subscriber set forth herein in order to determine the availability of such
      exemptions and the eligibility of the Subscriber to acquire the
      Units.

     

    2.9 No
      General Solicitation.
      The
      Subscriber (a) was contacted regarding the sale of the Units by the Company
      or
      the Placement Agent (or their respective authorized agents or representatives)
      with whom the Subscriber had a prior substantial pre-existing relationship
      and
      (b) no Units were offered or sold to it by means of any form of general
      solicitation or general advertising, and in connection therewith, the Subscriber
      did not receive any general solicitation or general advertising including,
      but
      not limited to, the Subscriber’s: (i) receipt or review of any advertisement,
      article, notice or other communication published in any newspaper, magazine
      or
      similar media or broadcast over television or radio, whether closed circuit,
      or
      generally available; or (ii) attendance at any seminar meeting or industry
      investor conference whose attendees were invited by any general solicitation
      or
      general advertising.

     

    2.10 Information.
      

     

    (a)
      The
      Subscriber agrees, acknowledges and understands that the Subscriber and its
      advisors, if any, have been furnished with all materials relating to the
      business, finances and operations of the Company, and materials relating to
      the
      offer and sale of the Units that have been requested by the Subscriber or its
      advisors, if any, including, without limitation, the Memorandum, the risk
      factors set forth therein, and all appendices to the Memorandum (collectively
      with this Subscription Agreement and the Warrant, the “Offering
      Documents”).
      The
      Subscriber represents and warrants that the Subscriber and its advisors, if
      any,
      have been afforded the opportunity to ask questions of the Company. The
      Subscriber agrees, acknowledges and understands that neither such inquiries
      nor
      any other due diligence investigation conducted by the Subscriber or any of
      its
      advisors or representatives modify, amend or affect the Subscriber’s right to
      rely on the Company’s representations and warranties contained in Article III
      below.

     

    (b) The
      Subscriber agrees, acknowledges and understands that the Placement Agent has
      not
      supplied any information for inclusion in the Memorandum other than information
      furnished in writing to the Company by the Placement Agent specifically for
      inclusion in the Memorandum relating to the Placement Agent, that the Placement
      Agent has no responsibility for the accuracy or completeness of the Memorandum
      and that the Subscriber has not relied upon the independent investigation or
      verification, if any, which may have been undertaken by the Placement
      Agent.

     

    2.11 Acknowledgement
      of Risk.
      The
      Subscriber agrees, acknowledges and understands that its investment in the
      Units
      involves a significant degree of risk, including, without limitation that:
      (a)
      the Company is a development stage business with limited operating history
      and
      requires substantial funds in addition to the proceeds from the sale of the
      Units; (b) an investment in the Company is highly speculative and only
      subscribers who can afford the loss of their entire investment should consider
      investing in the Company and the Units; (c) the Subscriber may not be able
      to
      liquidate its investment; (d) transferability of the Common Stock and the
      Warrants is extremely limited; and (e) in the event of a disposition of the
      Common Stock or the Warrants, the Subscriber can sustain the loss of its entire
      investment. The Subscriber agrees, acknowledges and understands that such risks
      are set forth in greater detail in the Memorandum.

    
      
        
        

      

      
        
        

        
          

        

      

       

    

     

    2.12 Governmental
      Review. The Subscriber agrees, acknowledges and understands that no United
      States federal or state agency or any other government or governmental agency
      has passed upon or made any recommendation or endorsement of the Units or an
      investment therein. 

     

    2.13 Transfer
      or Resale.
      The
      Subscriber agrees, acknowledges and understands that:

     

    (a) the
      Common Stock and Warrants have not been and, except as set forth in Article
      V,
      are not being registered under the Securities Act or any applicable state
      securities or “blue sky” laws. Consequently, the Subscriber may have to bear the
      risk of holding the Common Stock and Warrants for an indefinite period of time
      because the Common Stock and Warrants may not be transferred unless: (i) the
      resale of the Common Stock and Warrants is registered pursuant to an effective
      registration statement under the Securities Act; (ii) the Subscriber has
      delivered to the Company an opinion of counsel reasonably acceptable to the
      Company and its counsel (in form, substance and scope customary for opinions
      of
      counsel in comparable transactions) to the effect that the Common Stock and/or
      Warrants to be sold or transferred may be sold or transferred pursuant to an
      exemption from such registration; or (iii) the Common Stock and/or Warrants
      are
      sold or transferred pursuant to Rule 144 promulgated under the Securities Act
      (“Rule
      144”);

     

    (b) any
      sale
      of the Common Stock or Warrants made in reliance on Rule 144 may be made only
      in
      accordance with the terms of Rule 144 and, if Rule 144 is not applicable, any
      resale of the Common Stock and Warrants under circumstances in which the seller
      (or the person through whom the sale is made) may be deemed to be an underwriter
      (as that term is defined in the Securities Act) may require compliance with
      some
      other exemption under the Securities Act or the rules and regulations of the
      Commission promulgated thereunder; and

     

    (c) except
      as
      set forth in Article V, neither the Company nor any other person is under any
      obligation to register the Common Stock or Warrants under the Securities Act
      or
      any state securities or “blue sky” laws or to comply with the terms and
      conditions of any exemption thereunder.

     

    2.14 Legends.
      The
      Subscriber agrees, acknowledges and understands that the certificates
      representing the Common Stock and Warrants (the “Restricted
      Securities”)
      will
      bear restrictive legends in substantially the following form (and a
      stop-transfer order may be placed against transfer of the certificates for
      such
      Restricted Securities):

     

    THE
      SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
      SECURITIES ACT OF 1933 OR THE SECURITIES OR “BLUE SKY” LAWS OF ANY STATE OF THE
      UNITED STATES. THE SECURITIES MAY NOT BE SOLD, TRANSFERRED OR ASSIGNED IN THE
      ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER
      APPLICABLE SECURITIES LAWS, OR UNLESS OFFERED, SOLD OR TRANSFERRED PURSUANT
      TO
      AN AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THOSE LAWS. IN
      ADDITION, THE SECURITIES MAY NOT BE SOLD FOR A PERIOD OF 120 DAYS FOLLOWING
      CERTAIN PUBLIC OFFERINGS. 

    
      
        
        

      

      
        
        

        
          

        

      

       

    

     

    The
      Subscriber agrees, acknowledges and understands that the Company will make
      a
      notation in the appropriate records with respect to the foregoing restrictions
      on the transferability of the Restricted Securities. Certificates evidencing
      the
      Restricted Securities shall not be required to contain such legend or any other
      legend (a) following any sale of the Restricted Securities pursuant to Rule
      144,
      or (b) if the Restricted Securities are eligible for sale under Rule 144(k)
      or
      have been sold pursuant to a registration statement and in compliance with
      the
      Subscriber’s obligations set forth in this Agreement, or (c) such legend is not
      required under applicable requirements of the Securities Act (including judicial
      interpretations and pronouncements issued by the Staff of the Securities and
      Exchange Commission), in each such case (a) through (c) to the extent reasonably
      determined by the Company’s legal counsel. 

     

    2.15 Residency.
      The
      Subscriber is a resident of the jurisdiction set forth immediately below the
      Subscriber’s name on the signature pages hereto.

     

    2.16 Acknowledgements
      Regarding Placement Agent.

     

    (a) The
      Subscriber agrees, acknowledges and understands that the Placement Agent is
      acting as placement agent for the Units being offered hereby and will be
      compensated by the Company for acting in such capacity, including, but not
      limited to, by: (i) a cash commission equal to 6% of the gross proceeds from
      the
      Offering; (ii) expenses of up to $50,000; and (iii) the issuance to the
      Placement Agent of warrants to purchase a number of shares of Common Stock
      equal
      to 2% of the number of Units sold in the Offering at $1.87 per share (the
“Placement
      Warrant”).
       The
      Subscriber further agrees, acknowledges and understands that the Placement
      Agent
      has acted solely as an agent of the Company in connection with the Offering,
      that the information and data provided to the Subscriber in connection with
      the
      transactions contemplated hereby have not been subjected to independent
      verification by the Placement Agent and that the Placement Agent makes no
      representation or warranty with respect to the accuracy or completeness of
      such
      information, data or other related disclosure material. The Subscriber further
      agrees and acknowledges that in making its decision to enter into this Agreement
      and purchase the Units, it has relied on its own examination of the Company
      and
      the terms and consequences of holding the Units. The Subscriber further agrees,
      acknowledges and understands that the provisions of this Section 2.16 are for
      the benefit of, and may be enforced by, the Placement Agent.

     

    (b) The
      Subscriber agrees, acknowledges and understands that the Placement Agent may
      engage other persons, selected by it in the Placement Agent’s discretion, who
      are members of the National Association of Securities Dealers, Inc., or who
      are
      located outside the United States, to assist the Placement Agent in connection
      with this Offering and that the Placement Agent shall be responsible for the
      compensation of any selected dealer so engaged.

     

    2.17 Not
      a
      Registered Representative.
      The
      Subscriber agrees, acknowledges and understands that if it is a Registered
      Representative of an NASD member firm, he or she must give such firm the notice
      required by the NASD’s Rules of Fair Practice, receipt of which must be
      acknowledged by such firm in the Confidential Investor Questionnaire attached
      hereto as Exhibit
      A.

    
      
        
        

      

      
        
        

        
          

        

      

       

    

     

    2.18 No
      Brokers.
      The
      Subscriber has not engaged, consented to or authorized any broker, finder or
      intermediary to act on its behalf, directly or indirectly, as a broker, finder
      or intermediary in connection with the transactions contemplated by this
      Agreement. The Subscriber hereby agrees to indemnify and hold harmless the
      Company and the Placement Agent from and against all fees, commissions or other
      payments owing to any such person or firm acting on behalf of the Subscriber
      hereunder. 

    

    2.19 Reliance
      on Representations.
      The
      Subscriber agrees,
      acknowledges and understands
      that the
      Company and its counsel, as well as the Placement Agent, are entitled to rely
      on
      the representations, warranties and covenants made by the Subscriber
      herein.

     

    2.20 No
      Representations by Placement Agent. The Subscriber acknowledges that the
      Placement Agent (including any of its members, managers, employees, agents
      or
      representatives) has not made any representations or warranties to the
      Subscriber concerning the Company and its Subsidiary and their respective
      businesses, condition (financial or otherwise) or prospects. 

    

    
      	III.	
              REPRESENTATIONS
                BY THE COMPANY 

            

    

    

    The
      Company hereby represents and warrants to each Subscriber and the Placement
      Agent that:

     

    3.1 Organization
      and Qualification.
      The
      Company is duly incorporated, validly existing and in good standing under the
      laws of the jurisdiction in which it is incorporated, with full power and
      authority (corporate and other) to own, lease, use and operate its properties
      and to carry on its business as and where now owned, leased, used, operated
      and
      conducted. The Company is duly qualified to do business and is in good standing
      in every jurisdiction in which the nature of the business conducted by it makes
      such qualification necessary, except where the failure to be so qualified or
      in
      good standing would not have a material adverse effect on (a) the business,
      operations assets or condition (financial or otherwise) of the Company or (b)
      the ability of the Company to perform its obligations pursuant to the
      transactions contemplated by this Agreement or under any instruments to be
      entered into or filed in connection herewith (collectively, a “Material
      Adverse Effect”).

     

    3.2 Authorization;
      Enforcement.
      (a) The
      Company has the requisite corporate power and authority to enter into and to
      perform its obligations under this Agreement, to consummate the transactions
      contemplated hereby and to issue the Units in accordance with the terms hereof;
      (b) the execution, delivery and performance of this Agreement by the Company
      and
      the consummation by it of the transactions contemplated hereby (including
      without limitation the issuance of the Common Stock and Warrants) have been
      duly
      authorized by the Company’s Board of Directors (the “Board”)
      and no
      further consent or authorization of the Company, its Company or its shareholders
      is required that has not or will not be obtained prior to the Closing; (c)
      this
      Agreement has been duly executed by the Company; and (d) this Agreement
      constitutes a legal, valid and binding obligation of the Company enforceable
      against the Company in accordance with its terms, subject to the effect of
      any
      applicable bankruptcy, insolvency, reorganization or moratorium or similar
      laws
      affecting the rights of creditors generally and the application of general
      principles of equity.

     

    3.3 Capitalization.
      The
      authorized capital stock of the Company is as set forth in the Memorandum.
      Except as set forth in the Memorandum, there are not issued, reserved for
      issuance or outstanding: (a) any Units of capital stock or other voting
      securities of the Company; (b) any securities of the Company convertible into
      or
      exchangeable or exercisable for Units of capital stock or voting securities
      of
      the Company; (c) any warrants, calls, options or other rights to acquire from
      the Company, and any obligation of the Company to issue, any capital stock,
      voting securities or securities convertible into or exchangeable or exercisable
      for capital stock or voting securities of the Company.

    
      
        
        

      

      
        
        

        
          

        

      

       

    

     

    3.4 Issuance
      of Units.
      The
      Units, Common Stock, Warrants and shares of Common Stock underlying the Warrants
      (the “Warrant Shares”) purchased under this Agreement are duly authorized and,
      upon issuance in accordance with the terms of this Agreement, will be validly
      issued, fully paid and non-assessable, free and clear from all taxes, liens,
      claims, encumbrances and charges with respect to the issue thereof, will not
      be
      subject to preemptive rights or other similar rights of stockholders of the
      Company, and will not impose personal liability on the holders
      thereof.

     

    3.5 No
      Conflicts; No Violation.

     

    (a) The
      execution, delivery and performance of this Agreement by the Company and the
      consummation by the Company of the transactions contemplated hereby (including,
      without limitation, the issuance of the Units) will not: (i) conflict with
      or
      result in a violation of any provision of its Certificate of Incorporation
      or
      Bylaws; (ii) violate or conflict with, result in a breach of any provision
      of,
      constitute a default (or an event which with notice or lapse of time, or both,
      could become a default) under or give to others any rights of termination,
      amendment, acceleration or cancellation of any material agreement, indenture,
      patent, patent license or instrument to which the Company is a party; or (iii)
      to the best of the Company’s knowledge, result in a material violation of any
      law, rule, regulation, order, judgment or decree (including United States
      federal and state securities or “blue sky” laws and regulations and regulations
      of any self-regulatory organizations to which the Company or its securities
      are
      subject) applicable to the Company or by which any property or asset of the
      Company is bound or affected (except for such conflicts, breaches, defaults,
      terminations, amendments, accelerations, cancellations and violations as would
      not, individually or in the aggregate, have a Material Adverse
      Effect).

     

    (b) Except
      as
      specifically contemplated by this Agreement and as required under the Securities
      Act and any applicable state securities or “blue sky” laws or any listing
      agreement with any securities exchange or automated quotation system, the
      Company is not required to obtain any consent, authorization or order of, or
      make any filing or registration with, any court or governmental agency or any
      regulatory or self regulatory agency in order for it to execute, deliver or
      perform any of its obligations under this Agreement in accordance with the
      terms
      hereof, or to issue and sell the Units in accordance with the terms hereof.
      All
      consents, authorizations, orders, filings and registrations which the Company
      is
      required to obtain pursuant to the preceding sentence have been obtained or
      effected on or prior to the date hereof.

     

    3.6 Absence
      of Certain Changes.
      Except
      as disclosed in the Memorandum, since the date of the Memorandum (including
      any
      subsequent amendments or supplements thereto) there has been no material adverse
      change in the assets, liabilities, business, properties, operations, financial
      condition, prospects or results of operations of the Company, except that the
      Company has continued losses from operations.

     

    3.7 Absence
      of Litigation.
      With
      the exception of any clinical trials being conducted or to be conducted in
      the
      ordinary course of business, there is no action, suit, claim, proceeding,
      inquiry or investigation before or by any court, public board, government
      agency, self-regulatory organization or body pending or, to the knowledge of
      the
      Company, threatened, against or affecting the Company or any of its officers
      or
      directors acting as such that could, individually or in the aggregate, have
      a
      Material Adverse Effect.

    
      
        
        

      

      
        
        

        
          

        

      

       

    

     

    3.8 Intellectual
      Property Rights.
      The
      Company owns or possesses licenses or rights to use all patents, patent
      applications, patent rights, inventions, know-how, trade secrets, trademarks,
      trademark applications, service marks, service names, trade names and copyrights
      that it believes are necessary to enable it to conduct its business as now
      operated (the “Intellectual
      Property”).
      Except as set forth in the Memorandum, there are no material options, licenses
      or agreements relating to the Intellectual Property, nor is the Company bound
      by, or a party to, any material options, licenses or agreements relating to
      the
      patents, patent applications, patent rights, inventions, know-how, trade
      secrets, trademarks, trademark applications, service marks, service names,
      trade
      names or copyrights of any other person or entity. Except as disclosed in the
      Memorandum, there is no claim or action or proceeding pending or, to the
      Company’s knowledge, threatened, that challenges the right of the Company with
      respect to any Intellectual Property.

     

    3.9 Tax
      Status.
      The
      Company has timely made or filed all federal, state and foreign income and
      all
      other tax returns, reports and declarations required by any jurisdiction to
      which it is subject (unless and only to the extent that the Company has set
      aside on its books provisions reasonably adequate for the payment of all unpaid
      and unreported taxes) and has timely paid all taxes and other governmental
      assessments and charges that are material in amount, shown or determined to
      be
      due on such returns, reports and declarations, except those being contested
      in
      good faith, and has set aside on its books provisions reasonably adequate for
      the payment of all taxes for periods subsequent to the periods to which such
      returns, reports or declarations apply. To the knowledge of the Company, there
      are no unpaid taxes in any material amount claimed to be due by the taxing
      authority of any jurisdiction, and the officers of the Company know of no basis
      for any such claim. The Company has not executed a waiver with respect to the
      statute of limitations relating to the assessment or collection of any foreign,
      federal, state or local tax. To the Company’s knowledge, none of the Company’s
      tax returns are presently being audited by any taxing authority.

     

    3.10 No
      Brokers.
      Except
      as disclosed in the Memorandum, the Company has taken no action which would
      give
      rise to any claim by any person for brokerage commissions, finder’s fees or
      similar payments relating to this Agreement or the transactions contemplated
      hereby, except for dealings with the Placement Agent, whose commissions and
      fees
      will be paid by the Company.

     

    3.11 Investment
      Company Status.
      The
      Company is not, and upon consummation of the sale of the Units will not be,
      an
“investment company,” a company controlled by an “investment company” or an
“affiliated person” of, or “promoter” or “principal underwriter” for, an
“investment company” as such terms are defined in the Investment Company Act of
      1940, as amended.

     

    3.12 Placement
      Agent.
      The
      Company has engaged, consented to and authorized the Placement Agent to act
      as
      agent of the Company in connection with the transactions contemplated by this
      Agreement. The Company will pay the Placement Agent a commission in the form
      of
      both cash and the Placement Warrant and will reimburse the Placement Agent’s
      reasonable out-of-pocket expenses incurred in connection with the Offering
      up to
      $50,000, and the Company agrees to indemnify and hold harmless the Subscribers
      from and against all fees, commissions or other payments owing by the Company
      to
      the Placement Agent or any other person or firm acting on behalf of the Company
      hereunder.

    
      
        
        

      

      
        
        

        
          

        

      

       

    

     

    3.13 Financial
      Statements.
      The
      financial statements of the Company included in the Memorandum (the
      "Financial
      Statements")
      fairly
      present in all material respects the financial condition and position of the
      Company at the dates and for the periods indicated; and have been prepared
      in
      conformity with generally accepted accounting principles in the United States
      (“GAAP”)
      consistently applied throughout the periods covered thereby, except as may
      be
      otherwise specified in such Financial Statements or the notes thereto and except
      that unaudited financial statements may not contain all footnotes required
      by
      GAAP, and fairly present in all material respects the financial position of
      the
      Company as of and for the dates thereof and the results of operations and cash
      flows for the periods then ended, subject, in the case of unaudited statements,
      to normal, immaterial, year-end audit adjustments. Since the date of the most
      recent balance sheet included as part of the Financial Statements, there has
      not
      been to the Company’s knowledge: (a) any change in the assets, liabilities,
      financial condition or
      operations of the Company from that reflected in the Financial Statements,
      other
      than changes in the ordinary course of business, including ongoing losses,
      none
      of which individually or in the aggregate would reasonably be expected to have
      a
      Material Adverse Effect; or (b) any other event or condition of any character
      that, either individually or cumulatively, would reasonably be expected to
      have
      a Material Adverse Effect, except for the expenses incurred in connection with
      the transactions contemplated by this Agreement.

     

    3.14 Title
      to Properties and Assets; Liens, Etc.
      The
      Company has good and marketable title to its properties and assets, including
      the properties and assets reflected in the most recent balance sheet included
      in
      the Financial Statements, and good title to its leasehold estates, in each
      case
      subject to no mortgage, pledge, lien, lease, encumbrance or charge, other than
      (a) those resulting from taxes which have not yet become delinquent; (b) liens
      and encumbrances which do not materially detract from the value of the property
      subject thereto or materially impair the operations of the Company; (c) those
      that have otherwise arisen in the ordinary course of business; and (d) those
      that would not reasonably be expected to have a Material Adverse Effect. The
      Company is in compliance with all material terms of each lease to which it
      is a
      party or is otherwise bound.

     

    3.15 Obligations
      to Related Parties.
      Except
      as disclosed in the Memorandum or as would not reasonably be expected to have
      a
      Material Adverse Effect, there are no obligations of the Company to officers,
      directors, stockholders, or employees of the Company other than (a) for payment
      of salary or other compensation for services rendered, (b) reimbursement for
      reasonable expenses incurred on behalf of the Company, (c) standard
      indemnification provisions in the certificate of incorporation and by-laws,
      and
      (d) for other standard employee benefits made generally available to all
      employees (including stock option agreements outstanding under any stock option
      plan approved by the Board). Except as may be disclosed in the Financial
      Statements, the Company is not a guarantor or indemnitor of any indebtedness
      of
      any other person, firm or corporation.

     

    3.16 Employee
      Relations; Employee Benefit Plans.
      The
      Company is not a party to any collective bargaining agreement or a union
      contract. The Company believes that its relations with its employees are good.
      No executive officer (as defined in Rule 501(f) of the Securities Act) of the
      Company has notified the Company that such officer intends to leave the Company
      or otherwise terminate such officer's employment with the Company. The Company
      is in compliance with all federal, state, local and foreign laws and regulations
      respecting employment and employment practices, terms and conditions of
      employment and wages and hours, except where failure to be in compliance would
      not, either individually or in the aggregate, reasonably be expected to result
      in a Material Adverse Effect. Except as disclosed in the Memorandum, the Company
      does not maintain any compensation or benefit plan, agreement, arrangement
      or
      commitment (including, but not limited to, "employee benefit plans", as defined
      in Section 3(3) of the Employee Retirement Income Security Act of 1974, as
      amended ("ERISA")
      for
      any present or former employees, officers or directors of the Company or with
      respect to which the Company has liability or makes or has an obligation to
      make
      contributions, other than any such plans, agreements, arrangements or
      commitments made generally available to the Company’s
      employees.

    
      
        
        

      

      
        
        

        
          

        

      

       

    

     

    3.17 Environmental
      Laws.
      To the
      best of its knowledge, the Company (a) is in compliance with any and all
      Environmental Laws (as hereinafter defined), (b) has received all permits,
      licenses or other approvals required of it under applicable Environmental Laws
      to conduct its business and (c) are in compliance with all terms and conditions
      of any such permit, license or approval where, in each of the foregoing clauses
      (a), (b) and (c), the failure to so comply would reasonably be expected to
      have,
      individually or in the aggregate, a Material Adverse Effect. The term
      "Environmental
      Laws"
      means
      all federal, state, local or foreign laws relating to pollution or protection
      of
      human health or the environment (including, without limitation, ambient air,
      surface water, groundwater, land surface or subsurface strata), including,
      without limitation, laws relating to emissions, discharges, releases or
      threatened releases of chemicals, pollutants, contaminants, or toxic or
      hazardous substances or wastes (collectively, "Hazardous
      Materials")
      into
      the environment, or otherwise relating to the manufacture, processing,
      distribution, use, treatment, storage, disposal, transport or handling of
      Hazardous Materials, as well as all authorizations, codes, decrees, demands
      or
      demand letters, injunctions, judgments, licenses, notices or notice letters,
      orders, permits, plans or regulations issued, entered, promulgated or approved
      thereunder.

     

    3.18 Disclosure.
      This
      Agreement, the Schedules and Exhibits hereto (including, without limitation,
      the
      Offering Documents) and all other documents delivered to the Subscriber in
      connection herewith at the Closing, do not contain any untrue statement of
      a
      material fact, or omit to state a material fact necessary to make the statements
      therein, in light of the circumstances under which they were made, not
      misleading. There are no facts that, individually or in the aggregate, would
      have a Material Adverse Effect that have not been disclosed in the Offering
      Documents (including the Schedules and Exhibits thereto) or any other documents
      delivered to the Subscriber in connection herewith or therewith at the
      Closing.

     

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

     

    3.20. Licenses
      and Permits.
      

     

    (a)
      Except as set forth in the Offering Documents, the Company has obtained and
      maintains all federal, state, local and foreign licenses, permits, consents,
      approvals, registrations, authorizations and qualifications required to be
      maintained in connection with its operations as presently conducted and as
      proposed to be conducted, except where the failure to obtain or maintain such
      licenses, permits, consents, approvals, registrations, authorizations and
      qualifications could not have a Material Adverse Effect. The Company is not
      in
      default in any material respect under any of such licenses, permits, consents,
      approvals, registrations, memberships, authorizations and
      qualifications.

     

    
      
        
        

      

      
        
        

        
          

        

      

       

    

    

    (b)
      To
      the best of the Company’s knowledge, the conduct of its business as presently
      and proposed to be conducted is not presently subject to continuing oversight,
      supervision, regulation or examination by any governmental official or body
      of
      the United States or any other jurisdiction wherein the Company conducts or
      proposes to conduct business, except as described in the Offering Documents
      and
      except such regulation as is applicable to commercial enterprises generally.
      

    

    3.21. 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 in any security
      or
      solicited any offers to buy any security under circumstances that would require
      registration under the Securities Act. The issuance of the Securities will
      not
      be integrated with any past issuance of the Company’s securities for purposes of
      the Securities Act. Except as disclosed in the Offering Documents, the Company
      has not sold or issued any shares of Common Stock, convertible notes or warrants
      during the past six months, including sales pursuant to Rule 144A, Regulation
      D
      or Regulation S under the Act, other than shares issued pursuant to employee
      benefit plans, if any.

    

    3.22. Related
      Party Transactions.
      No
      transaction has occurred between or among the Company and any of its affiliates,
      officers or directors or any affiliate or affiliates of any such officer or
      director that is required to be described in the Offering Documents that is
      not
      so described. 

     

    3.23. Books
      and Records.
      The
      books, records and accounts of the Company accurately and fairly reflect, in
      reasonable detail, the transactions in, and dispositions of, the assets of,
      and
      the results of operations of, the Company, all to the extent required by
      generally accepted accounting principles. 

    

    3.24 Additional
      Representations.
      All
      representations and warranties of Pubco and Merger Sub contained in the Merger
      Agreement are true and correct in all material respects (except for those
      representations and warranties that speak as of a certain date, which in such
      case, were true and correct in all material respects as of such date) and the
      Subscribers and the Placement Agent may rely on such representations and
      warranties as if made directly to them. Pubco and Merger Sub have complied
      in
      all material respects with all covenants and other obligations to which they
      are
      bound under the Merger Agreement. The transactions contemplated by the Merger
      Agreement are being consummated simultaneously with the Initial
      Closing. 

     

    
      	IV.	
              TERMS
                OF SUBSCRIPTION

            

    

     

    4.1 The
      minimum subscription by any single Subscriber shall be $93,500; provided that
      the Company reserves the right to accept, at the discretion of the Company
      and
      the Placement Agent, subscriptions for a lesser amount of Securities. The
      Offering shall terminate at the earlier of (i) 11:59 p.m. New York City time
      on
      February 28, 2007 (subject to extension upon mutual agreement of the Company
      and
      the Placement Agent without notice to Subscriber) or (ii) such other date on
      which all of the Securities to be issued in the Offering are sold. The
      Company may conduct an initial closing upon receipt of a properly executed
      copy
      of this Agreement from the Subscriber or such other subscriber and the purchase
      price for the Securities being purchased by the Subscriber or such other
      subscriber representing in the aggregate the Minimum Amount. The initial closing
      of the purchase and sale of the Securities pursuant to the Offering shall be
      referred to herein as the “Initial
      Closing”.
      The
      Company may conduct additional closings (each, an “Additional
      Closing”;
      each
      Additional Closing and the Initial Closing are referred to herein as a
“Closing”)
      until
      all of the Securities are sold pursuant to the Offering, subject to the
      termination dates set forth above (the date of each such Closing, the
“Closing
      Date”).
      In
      the event the Company shall not have obtained subscriptions (including this
      subscription) for purchases of the Minimum Amount on or before 11:59 p.m. New
      York City time on February 28, 2007, then this subscription shall be void and
      all funds paid hereunder by the Subscriber, without interest, shall be returned
      to the Subscriber. 

    
      
        
        

      

      
        
        

        
          

        

      

       

    

     

    4.2 Pending
      the sale of the Units, all funds paid hereunder shall be deposited by the
      Company in escrow with the Escrow Agent. 

     

    4.3 The
      Subscriber hereby authorizes and directs the Company to deliver the Units to
      be
      issued to the Subscriber pursuant to this Agreement to the residential or
      business address indicated on the signature page hereto or to any customer
      account maintained with the Placement Agent.

     

    4.4 The
      Subscriber hereby authorizes and directs the Company to return, without
      interest, any funds for unaccepted subscriptions (including any subscriptions
      that were not accepted as a result of the termination of the Offering) to the
      same account from which the funds were drawn, including any customer account
      maintained with the Placement Agent.

     

    4.5 The
      Company’s agreement with each Subscriber is a separate agreement and the sale of
      Units to each Subscriber is a separate sale.

     

    
      	V.	
              COVENANTS
                OF THE COMPANY AND SUBSCRIBER

            

    

     

    5.1 Form
      D; Blue Sky Laws.
      The
      Company shall timely file with the Commission a Notice of Sale of Units on
      Form
      D with respect to the Offering, as required under Regulation D. The Company
      will, on or before the Closing Date, take such action as it reasonably
      determines to be necessary to qualify the Units for sale to the Subscriber
      under
      this Agreement under applicable securities (or “blue sky”) laws or regulations
      of the states of the United States (or to obtain an exemption from such
      qualification).

     

    5.2 Expenses.
      The
      Company and the Subscriber are liable for, and shall pay, their own expenses
      incurred in connection with the negotiation, preparation, execution and delivery
      of this Agreement, including, without limitation, attorneys’ and consultants’
fees and expenses.

     

    5.3 Compliance
      with Law.
      As long
      as the Subscriber owns any of the Common Stock, the Company will conduct its
      business in compliance with all applicable laws, rules and regulations of the
      jurisdictions in which it is conducting business (including, without limitation,
      all applicable local, state and federal environmental laws and regulations),
      except for those laws, rules and regulations the failure to comply with which
      would not have a Material Adverse Effect.

     

    5.4 Sales
      by Subscribers.
      The
      Subscriber shall sell any and all Registrable Securities (as defined below)
      purchased hereby in compliance with applicable prospectus delivery requirements,
      if any, or otherwise in compliance with the requirements for an exemption from
      registration under the Securities Act and the rules and regulations promulgated
      thereunder. The Subscriber will not make any sale, transfer or other disposition
      of the Units in violation of federal or state securities or “blue sky” laws and
      regulations.

    
      
        
        

      

      
        
        

        
          

        

      

       

    

    

    
      	VI.	
              CONDITIONS
                TO OBLIGATIONS OF THE
                SUBSCRIBER

            

    

     

    The
      Subscriber’s obligation to purchase Units at the Closing is subject to the
      fulfillment on or prior to the Closing of the following conditions, which
      conditions may be waived at the option of the Subscriber to the extent permitted
      by law:

     

    6.1 Representations
      and Warranties Correct. The representations and warranties made by the Company
      in Article III hereof 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. 

    

    6.2 Covenants.
      All
      covenants, agreements and conditions contained in this Agreement to be performed
      by the Company on or prior to such purchase shall have been performed or
      complied with in all material respects.

    

    6.3 No
      Legal Order Pending.
      There
      shall not then be in effect any legal or other order enjoining or restraining
      the transactions contemplated by this Agreement.

    

    6.4 No
      Law
      Prohibiting or Restricting Such Sale.
      There
      shall not be in effect any law, rule or regulation prohibiting or restricting
      such sale or requiring any consent or approval of any person which shall not
      have been obtained to issue the Common Stock and the Warrants (except as
      otherwise provided in this Agreement).

    

    6.5 Legal
      Opinion.
      The
      Subscribers and the Placement Agent shall have received a legal opinion from
      the
      Company’s outside counsel covering such matters as reasonably requested by the
      Placement Agent. 

    

    6.6 Officer’s
      Certificates.
      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
      Sections 6.1, 6.2, 6.3, 6.4 and 6.8 of this Article VI, and (ii) Pubco and
      Merger Sub shall have delivered a Certificate, executed by their respective
      Chief Executive Officers or Chief Financial Officers, dated as of the Closing
      Date, certifying to the representations and warranties and conditions set forth
      in the Merger Agreement.

    

    6.7
       Secretary
      Certificates.
      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 of Directors of the Company approving, as applicable, the
      transactions contemplated by this Agreement and the other Transaction Documents,
      and the issuance of the Common Stock and the Warrants, certifying the current
      versions of its Articles of Incorporation and Bylaws or other organizational
      documents and certifying as to the signatures and authority of persons signing
      the Transaction Documents and related documents on its behalf.

    

    6.8 Closing
      of Transaction with Pubco.
      In
      order for the Initial Closing to occur, the transactions contemplated by the
      Merger Agreement shall have been consummated simultaneously with the closing
      of
      the transactions contemplated by this Agreement.

    
      
        
        

      

      
        
        

        
          

        

      

       

    

    

    
      	VII.	
              REGISTRATION
                RIGHTS.
                

            

    

    

    7.1 Registration;
      Definitions.
      

    

    (a) No
      later
      than sixty (60) days following the Merger (as defined in the Memorandum) (the
      “Registration
      Due Date”),
      the
      Company shall prepare and file with the Commission a registration statement
      covering the resale of all of the Registrable Securities (the “Registration
      Statement”).
      The
      Registration Statement required hereunder shall be on Form SB-2 (or another
      appropriate form in accordance herewith). Subject to the terms of this
      Agreement, the Company shall use its commercially reasonable efforts to cause
      the Registration Statement to be declared effective under the Securities Act
      as
      promptly as possible after the filing thereof and shall use its commercially
      reasonable efforts to keep the Registration Statement continuously effective
      under the Securities Act until the date when all Registrable Securities covered
      by the Registration Statement have been sold or may be sold without volume
      restrictions pursuant to Rule 144(k) as determined by the counsel to the Company
      pursuant to a written opinion letter to such effect, addressed and acceptable
      to
      the Company’s transfer agent and the affected Holders (the “Effectiveness
      Period”).
      The
      Company shall file additional registration statements on Form SB-2 (or another
      appropriate form in accordance herewith) and use its commercially reasonable
      efforts to cause such registration statements, if any, to be declared effective
      under the Securities Act as promptly as possible to
      cover
      any additional shares of Common Stock issuable to the Holders of Registrable
      Securities pursuant to any adjustments set forth in the Warrants and the
      Placement Warrant and to cover any shares issuable upon payment of dividends
      in
      shares of Common Stock.

    

    (b) In
      the
      event
      the
      Company fails to file the Registration
      Statement with the Commission
      on or
      before Registration Due Date, the
      Company shall pay to each Subscriber, as liquidated damages and not as a
      penalty, an amount, for each month (or portion of a month) in which such delay
      shall occur, equal to one percent (1%) of the purchase price paid by each such
      Subscriber, until the point in time when the Company has filed the Registration
      Statement with the Commission.

    

    (c) The
      term
“Registrable
      Securities”
shall
      mean the Common Stock and the Common Stock issuable upon exercise of the
      Warrants and the Placement Warrant; provided, however, that securities shall
      only be treated as Registrable Securities if and only for so long as they (i)
      have not been sold (A) pursuant to a registration statement; (B) to or through
      a
      broker, dealer or underwriter in a public distribution or a public securities
      transaction; and/or (C) in a transaction exempt from the registration and
      prospectus delivery requirements of the Securities Act under Section 4(1)
      thereof so that all transfer restrictions and restrictive legends with respect
      thereto, if any, are removed upon the consummation of such sale; (ii) are not
      held by a Holder or a permitted transferee; and (iii) are not eligible for
      sale
      pursuant to Rule 144(k) (or any successor thereto) under the Securities
      Act.

    

    (d) The
      term
“Holder”
shall
      mean any person owning or having the right to acquire Registrable Securities
      or
      any permitted transferee of a Holder.

    

    7.2 Registration
      Procedures.

    

    In
      connection with the Company's registration obligations set forth in Section
      7.1
      above, the Company shall:

     

    (a) Not
      less
      than five (5) business days prior to the filing of the Registration Statement
      or
      any related prospectus or any amendment or supplement thereto (i) furnish to
      the
      Holders copies of all such documents proposed to be filed (including documents
      incorporated or deemed incorporated by reference to the extent requested by
      such
      Person) which documents will be subject to the review of such Holders and (ii)
      cause its officers, directors, counsel and independent certified public
      accountants to respond to such inquiries as shall be necessary, in the
      reasonable opinion of respective counsel, to conduct a reasonable investigation
      within the meaning of the Securities Act. The Company shall not file the
      Registration Statement or any such prospectus or any amendments or supplements
      thereto to which the Holders of a majority of the Registrable Securities shall
      reasonably object in good faith, provided that the Company is notified of such
      objection in writing no later than three (3) business days after the Holders
      have been so furnished copies of such documents. 

    
      
        
        

      

      
        
        

        
          

        

      

       

    

     

    (b)
       Prepare
      and file with the Commission such amendments, including post-effective
      amendments, to the Registration Statement and the prospectus used in connection
      therewith as may be necessary to keep the Registration Statement continuously
      effective as to the applicable Registrable Securities for the Effectiveness
      Period and prepare and file with the Commission such additional Registration
      Statements in order to register for resale under the Securities Act all of
      the
      Registrable Securities.

     

    (c) Use
      commercially reasonable efforts to avoid the issuance of, or, if issued, obtain
      the withdrawal of (i) any order suspending the effectiveness of the Registration
      Statement or (ii) any suspension of the qualification (or exemption from
      qualification) of any of the Registrable Securities for sale in any
      jurisdiction, at the earliest practicable moment.

     

    (d) Comply
      with all applicable rules and regulations of the Commission.

     

    (e) Use
      its
      best efforts to avoid the issuance of, or, if issued, obtain the withdrawal
      of
      (i) any order suspending the effectiveness of a Registration Statement, or
      (ii)
      any suspension of the qualification (or exemption from qualification) of any
      of
      the Registrable Securities for sale in any jurisdiction, at the earliest
      practicable moment.

     

    (f) Furnish
      to any Holder, so long as the Holder owns any Registrable Securities, forthwith
      upon request (i) a copy of the most recent annual or quarterly report of the
      Company and such other reports and documents so filed by the Company, and (ii)
      such other information as may be reasonably requested in availing any Holder
      of
      any rule or regulation of the SEC which permits the selling of any such
      securities without registration or pursuant to such form.

    

    7.3 Registration
      Expenses.
      All
      fees and expenses of the Company incident to the performance of or compliance
      with Section 7.1 and Section 7.2 hereof by the Company shall be borne by the
      Company. In addition, the Company shall pay, on a one-time basis, the reasonable
      fees and expenses of counsel to the Holders of up to $10,000 in the aggregate
      with respect to the review of any registration statement filed pursuant to
      Section 7.1 hereof, as directed by the then Holders of a majority of the
      Registrable Securities. 

    
      
        
        

      

      
        
        

        
          

        

      

       

    

    

    7.4 Indemnification.
      In the
      event that any Registrable Securities are included in a Registration Statement
      under this Article VII:

    

    (a) To
      the
      extent permitted by law, the Company will indemnify and hold harmless each
      Holder, any underwriter (as defined in the Securities Act) for such Holder
      and
      each person, if any, who controls such Holder or underwriter within the meaning
      of the Securities Act or the Exchange Act, against any losses, claims, damages,
      or liabilities (joint or several) to which they may become subject under the
      Securities Act, or the Exchange Act, insofar as such losses, claims, damages,
      or
      liabilities (or actions in respect thereof) arise out of or are based upon
      any
      of the following statements, omissions or violations (collectively a
“Violation”):
      (i)
      any untrue statement or alleged untrue statement of a material fact contained
      in
      such registration statement, including any preliminary prospectus or final
      prospectus contained therein or any amendments or supplements thereto, (ii)
      the
      omission or alleged omission to state therein a material fact required to be
      stated therein, or necessary to make the statements therein not misleading,
      or
      (iii) any violation or alleged violation by the Company of the Securities Act,
      the Exchange Act, or any rule or regulation promulgated under the Securities
      Act, or the Exchange Act, and the Company will pay to each such Holder,
      underwriter or controlling person, as incurred, any legal or other expenses
      reasonably incurred by them in connection with investigating or defending any
      such loss, claim, damage, liability, or action; provided, however, that the
      indemnity agreement contained in this Section 7.4(a) shall not apply to amounts
      paid in settlement of any such loss, claim, damage, liability, or action if
      such
      settlement is effected without the consent of the Company (which consent shall
      not be unreasonably withheld), nor shall the Company be liable in any such
      case
      for any such loss, claim, damage, liability, or action to the extent that it
      arises out of or is based upon a Violation which occurs in reliance upon and
      in
      conformity with written information furnished expressly for use in connection
      with such registration by any such Holder, underwriter or controlling
      person.

    

    (b) To
      the
      extent permitted by law, each Selling Holder will indemnify and hold harmless
      the Company, each of its directors, each of its officers, each person, if any,
      who controls the Company within the meaning of the Securities Act, any
      underwriter, any other Holder selling securities in such registration statement
      and any controlling person of any such underwriter or other Holder, against
      any
      losses, claims, damages, or liabilities (joint or several) to which any of
      the
      foregoing persons may become subject, under the Securities Act, or the Exchange
      Act, insofar as such losses, claims, damages, or liabilities (or actions in
      respect thereto) arise out of or are based upon any Violation, in each case
      to
      the extent (and only to the extent) that such Violation occurs in reliance
      upon
      and in conformity with written information furnished by such Holder expressly
      for use in connection with such registration; and each such Holder will pay,
      as
      incurred, any legal or other expenses reasonably incurred by any person intended
      to be indemnified pursuant to this Section 7.4(b), in connection with
      investigating or defending any such loss, claim, damage, liability, or action;
      provided,
      however,
      that
      the indemnity agreement contained in this Section 7.4(b) shall not apply to
      amounts paid in settlement of any such loss, claim, damage, liability or action
      if such settlement is effected without the consent of the Holder, which consent
      shall not be unreasonably withheld; provided,
      further,
      that, in
      no event shall any indemnity under this Section 7.4(b) exceed the greater of
      the
      cash value of the (i) gross proceeds from the offering received by such Holder
      or (ii) such Holder’s investment pursuant to this Agreement as set forth on the
      signature page attached hereto.

    

    (c) Promptly
      after receipt by an indemnified party under this Section 7.4 of notice of the
      commencement of any action (including any governmental action), such indemnified
      party shall, if a claim in respect thereof is to be made against any
      indemnifying party under this Section 7.4, deliver to the indemnifying party
      a
      written notice of the commencement thereof and the indemnifying party shall
      have
      the right to participate in, and, to the extent the indemnifying party so
      desires, jointly with any other indemnifying party similarly notified, to assume
      the defense thereof with counsel selected by the indemnifying party and approved
      by the indemnified party (whose approval shall not be unreasonably withheld);
      provided, however, that an indemnified party (together with all other
      indemnified parties which may be represented without conflict by one counsel)
      shall have the right to retain one separate counsel, with the fees and expenses
      to be paid by the indemnifying party, if representation of such indemnified
      party by the counsel retained by the indemnifying party would be inappropriate
      due to actual or potential differing interests between such indemnified party
      and any other party represented by such counsel in such proceeding. The failure
      to deliver written notice to the indemnifying party within a reasonable time
      of
      the commencement of any such action, if prejudicial to its ability to defend
      such action, shall relieve such indemnifying party of any liability to the
      indemnified party under this Section 7.4, but the omission so to deliver written
      notice to the indemnifying party will not relieve it of any liability that
      it
      may have to any indemnified party otherwise than under this Section
      7.4.

    
      
        
        

      

      
        
        

        
          

        

      

       

    

    

    (d) If
      the
      indemnification provided for in this Section 7.4 is held by a court of competent
      jurisdiction to be unavailable to an indemnified party with respect to any
      loss,
      liability, claim, damage, or expense referred to therein, then the indemnifying
      party, in lieu of indemnifying such indemnified party hereunder, shall
      contribute to the amount paid or payable by such indemnified party as a result
      of such loss, liability, claim, damage, or expense in such proportion as is
      appropriate to reflect the relative fault of the indemnifying party on the
      one
      hand and of the indemnified party on the other in connection with the statements
      or omissions that resulted in such loss, liability, claim, damage, or expense
      as
      well as any other relevant equitable considerations. The relative fault of
      the
      indemnifying party and of the indemnified party shall be determined by reference
      to, among other things, whether the untrue or alleged untrue statement of a
      material fact or the alleged omission to state a material fact relates to
      information supplied by the indemnifying party or by the indemnified party
      and
      the parties' relative intent, knowledge, access to information, and opportunity
      to correct or prevent such statement or omission.

    

    (e) The
      obligations of the Company and Holders under this Section 7.4 shall survive
      the
      completion of any offering of Registrable Securities in a registration statement
      under this Article VII, and otherwise.

     

    7.5 Remedies.
      In the event of a breach by the Company or by a Holder, of any of their
      obligations under this Agreement, each Holder or the Company, as the case may
      be, in addition to being entitled to exercise all rights granted by law and
      under this Agreement, including recovery of damages, will be entitled to
      specific performance of its rights under this Agreement. The Company and each
      Holder agree that monetary damages would not provide adequate compensation
      for
      any losses incurred by reason of a breach by it of any of the provisions of
      this
      Agreement and hereby further agrees that, in the event of any action for
      specific performance in respect of such breach, it shall waive the defense
      that
      a remedy at law would be adequate.

     

    7.6 Cutback.
      In connection with filing the Registration Statement pursuant to Section 7.1
      hereof, if the Commission limits the amount of Registrable Securities to be
      registered for resale, then the Company shall be entitled to exclude such
      disallowed Registrable Securities on a pro rata basis among the Holders thereof.
      

    
      
        
        

      

      
        
        

        
          

        

      

       

    

     

    7.7 Piggy-Back
      Registrations. If at any time during the Effectiveness Period there is not
      an effective Registration Statement covering all of the Registrable Securities
      and the Company shall determine to prepare and file with the Commission a
      registration statement relating to an offering for its own account or the
      account of others under the Securities Act of any of its equity securities,
      other than on Form S-4 or Form S-8 (each as promulgated under the Securities
      Act) or their then equivalents relating to equity securities to be issued solely
      in connection with any acquisition of any entity or business or equity
      securities issuable in connection with the stock option or other employee
      benefit plans, then the Company shall send to each Holder a written notice
      of
      such determination and, if within fifteen (15) days after the date of such
      notice, any such Holder shall so request in writing, the Company shall include
      in such registration statement all or any part of such Registrable Securities
      such Holder requests to be registered, subject to customary underwriter cutbacks
      applicable to all holders of registration rights.

     

    7.8 Waivers.
      With the written consent of the Company and the Holders holding at least a
      majority of the Registrable Securities that are then outstanding, any provision
      of this ARTICLE VII may be waived (either generally or in a particular instance,
      either retroactively or prospectively and either for a specified period of
      time
      or indefinitely) or amended. Upon the effectuation of each such waiver or
      amendment, the Company shall promptly give written notice thereof to the
      Holders, if any, who have not previously received notice thereof or consented
      thereto in writing.

    

    
      	VIII.	
              MISCELLANEOUS

            

    

     

    8.1 Governing
      Law; Jurisdiction.
      This
      Agreement will be governed by and interpreted in accordance with the laws of
      the
      State of Delaware without regard to the principles of conflict of laws. The
      parties hereto hereby submit to the exclusive jurisdiction of the United States
      federal and state courts located in the State of New York with respect to any
      dispute arising under this Agreement or the transactions contemplated hereby
      or
      thereby.

     

    8.2 Counterparts;
      Signatures by Facsimile.
      This
      Agreement may be executed in two or more counterparts, all of which are
      considered one and the same agreement and will become effective when
      counterparts have been signed by each party and delivered to the other parties.
      This Agreement, once executed by a party, may be delivered to the other parties
      hereto by facsimile transmission of a copy of this Agreement bearing the
      signature of the party so delivering this Agreement.

     

    8.3 Headings.
      The
      headings of this Agreement are for convenience of reference only, are not part
      of this Agreement and do not affect its interpretation.

     

    8.4 Severability.
      If any
      provision of this Agreement is invalid or unenforceable under any applicable
      statute or rule of law, then such provision will be deemed modified in order
      to
      conform to such statute or rule of law. Any provision hereof that may prove
      invalid or unenforceable under any law will not affect the validity or
      enforceability of any other provision hereof.

     

    8.5
       Entire
      Agreement; Amendments.
      This
      Agreement (including all schedules and exhibits hereto) constitutes the entire
      agreement among the parties hereto with respect to the subject matter hereof
      and
      thereof. There are no restrictions, promises, warranties or undertakings, other
      than those set forth or referred to herein or therein. This Agreement supersedes
      all prior agreements and understandings among the parties hereto with respect
      to
      the subject matter hereof. Except as set forth in Article VII, no provision
      of
      this Agreement may be waived or amended other than by an instrument in writing
      signed by the party to be charged with enforcement.

    
      
        
        

      

      
        
        

        
          

        

      

       

    

     

    8.6 Notices.
      Any
      notices required or permitted to be given under the terms of this Agreement
      must
      be sent by certified or registered mail (return receipt requested) or delivered
      personally or by courier (including a recognized overnight delivery service)
      and
      will be effective five days after being placed in the mail, if mailed by regular
      United States mail, or upon receipt, if delivered personally, or by courier
      (including a recognized overnight delivery service), in each case addressed
      to a
      party. The addresses for such communications are:

    

    
      	
            	If
              to the Company:	
              Chief
                Executive Officer 
                Velcera
                  Pharmaceuticals, Inc.

                201
                  Corporate Drive

                Langhorne
                  PA 19047-8007

              

            

    

    
      
        

        
          	
                	If
                  to the Subscriber:	
                  To
                    the address set forth immediately below the 
                    Subscriber’s
                      name on the signature pages hereto.

                  

                

        

      

    

     

    Each
      party will provide written notice to the other parties of any change in its
      address.

     

    8.7 Removal
      of Legends. Upon the earlier of (i) registration for resale pursuant to
      Article VII hereof or (ii) Rule 144(k) becoming available, 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 Subscriber that Rule 144(k) applies
      to the shares of Common Stock represented thereby or (2) a statement by the
      Subscriber that such Subscriber 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 subject to
      such
      investor and broker representations and notifications that counsel may
      reasonably request. From and after the earlier of such dates, upon a
      Subscriber’s written request, the Company shall promptly cause certificates
      evidencing the Subscriber’s securities to be replaced with certificates which do
      not bear such restrictive legends, and Warrant Shares subsequently issued upon
      due exercise of the Warrants 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 a Subscriber
      within five (5) Business Days of submission by that Subscriber of legended
      certificate(s) to the Transfer Agent as provided above (or to the Company,
      in
      the case of the Warrants or Notes), the Company shall be liable to the
      Subscriber 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 five (5) Business Days
      that the unlegended certificates have not been so delivered.

     

    8.8 Successors
      and Assigns. This Agreement is binding upon and inures to the benefit of the
      parties and their successors and assigns. The Company will not assign this
      Agreement or any rights or obligations hereunder without the prior written
      consent of the Subscriber and the Subscriber may not assign this Agreement
      or
      any rights or obligations hereunder without the prior written consent of the
      Company. Notwithstanding the foregoing, the Subscriber may assign all or part
      of
      its rights and obligations hereunder to any of its “affiliates,” as that term is
      defined under the Securities Act, without the consent of the Company so long
      as
      the affiliate is an accredited investor (within the meaning of Regulation D)
      and
      agrees in writing to be bound by this Agreement. This provision does not limit
      the Subscriber’s right to transfer the Common Stock or Warrants pursuant to the
      terms of this Agreement or to assign the Subscriber’s rights hereunder to any
      such transferee pursuant to the terms of this Agreement.

    
      
        
        

      

      
        
        

        
          

        

      

       

    

     

    8.9 Third
      Party Beneficiaries.
      This
      Agreement is intended for the benefit of the parties hereto and their respective
      permitted successors and assigns, and is not for the benefit of, nor may any
      provision hereof be enforced by, any other person.

     

    8.10 Further
      Assurances.
      Each
      party will do and perform, or cause to be done and performed, all such further
      acts and things, and will execute and deliver all other agreements,
      certificates, instruments and documents, as another party may reasonably request
      in order to carry out the intent and accomplish the purposes of this Agreement
      and the consummation of the transactions contemplated hereby.

     

    8.11 No
      Strict Construction.
      The
      language used in this Agreement is deemed to be the language chosen by the
      parties to express their mutual intent, and no rules of strict construction
      will
      be applied against any party.

     

    8.12 Equitable
      Relief. The Company recognizes that, if it fails to perform or discharge any
      of its obligations under this Agreement, any remedy at law may prove to be
      inadequate relief to the Subscriber. The Company therefore agrees that the
      Subscribers are entitled to seek temporary and permanent injunctive relief
      in
      any such case. 

     

    8.13 Acceptance.
      Upon
      the
      execution and delivery of this Agreement by the Subscriber, this Agreement
      shall
      become a binding obligation of the Subscriber with respect to the purchase
      of
      Units as herein provided, subject to acceptance by the Company; subject,
      however, to the right hereby reserved to the Company to enter into the same
      agreements with other Subscribers and to add and/or delete other persons as
      Subscribers. 

     

    8.14 Waiver.
      It is agreed that a waiver by either party of a breach of any provision of
      this
      Agreement shall not operate, or be construed, as a waiver of any subsequent
      breach by that same party.

     

    8.15 Other
      Documents. The parties agree to execute and deliver all such further
      documents, agreements and instruments and take such other and further action
      as
      may be necessary or appropriate to carry out the purposes and intent of this
      Agreement.

     

    8.16 Public
      Statements. The Subscriber agrees not to issue any public statement with
      respect to the Subscriber’s investment or proposed investment in the Company or
      the terms of any agreement or covenant between them and the Company without
      the
      Company’s prior written consent, except such disclosures as may be required
      under applicable law or under any applicable order, rule or
      regulation.

     

    8.17 Exculpation
      Among Subscribers.
      The
      Subscriber agrees, acknowledges and understands that it is not relying on any
      of
      the other Subscribers in making its investment or decision to invest in the
      Company. The Subscriber agrees, acknowledges and understands that none of the
      other Subscribers nor their respective controlling persons, officers, directors,
      partners, agents or employees shall be liable to the Subscriber for any action
      heretofore or hereafter taken or omitted to be taken by any of them in
      connection with the purchase of the Units or the execution of or performance
      under this Agreement, nor shall the Subscriber be liable to the other
      Subscribers for any action heretofore or hereafter taken or omitted to be taken
      by the Subscriber in connection with the purchase of the Units or the execution
      of or performance under this Agreement.

     

    
      
        
        

      

      
        
        

        
          

        

      

       

    

     

    8.18 Press
      Release and 8-K.
      By 8:30
      a.m. (New York City time) on the day two (2) business days following the Initial
      Closing Date, the Company shall issue a press release disclosing the
      consummation of the transactions contemplated by this Agreement. Notwithstanding
      the foregoing, the Company shall not publicly disclose the name of any
      Subscriber, or include the name of any Subscriber in any filing with the SEC
      (other than 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 the Principal Market, without
      the prior written consent of such Subscriber, except to the extent such
      disclosure is required by law or trading market regulations, in which case
      the
      Company shall provide the Subscribers with prior notice of such disclosure.
      For
      purposes of this Agreement, “Principal Market” means the relevant market the
      Common Stock of the Company is listed or admitted for trading.

     

    8.19. Several
      Obligations.
      The
      obligations of each Subscriber under any Offering Agreements are several and
      not
      joint with the obligations of any other Subscriber, and no Subscriber shall
      be
      responsible in any way for the performance of the obligations of any other
      Subscriber under any Offering Agreement. Nothing contained herein or in any
      other Offering Agreement, and no action taken by any Subscriber pursuant hereto
      or thereto, shall be deemed to constitute the Subscribers as a partnership,
      an
      association, a joint venture or any other kind of entity, or create a
      presumption that the Subscribers are in any way acting in concert or as a group
      with respect to such obligations or the transactions contemplated by the
      Offering Agreements. Each Subscriber confirms that it has independently
      participated in the negotiation of the transaction contemplated hereby with
      the
      advice of its own counsel and advisors. Each Subscriber shall be entitled to
      independently protect and enforce its rights, including, without limitation,
      the
      rights arising out of this Agreement or out of any other Offering Agreements,
      and it shall not be necessary for any other Subscriber to be joined as an
      additional party in any proceeding for such purpose. The Company acknowledges
      that each of the Subscribers has been provided with the same Offering Agreements
      for the purpose of closing a transaction with multiple Subscribers and not
      because it was required or requested to do so by any Subscriber.

     

    8.20
       Counterparts.
      This
      Agreement may be executed in two or more counterparts each of which shall be
      deemed an original, but all of which shall together constitute one and the
      same
      instrument.

     

    [REMAINDER
      OF PAGE INTENTIONALLY LEFT BLANK]

     

    
      
        
        

      

      
        
        

        
          

        

      

       

    

    SIGNATURE
      PAGE

    

    NUMBER
      OF UNITS _____________ x
      $1.87
      = _____________
      (the
      “Purchase
      Price”)

    

    
      	  
	 	  
	 
	
              Signature

            	 	
              Signature
                (if purchasing jointly)

            	 
	 	 	 	 
	  
	 	  
	 
	
              Name
                Typed or Printed

            	 	
              Name
                Typed or Printed

            	 
	 	 	 	 
	  
	 	  
	 
	
              Entity
                Name

            	 	
              Entity
                Name

            	 
	 	 	 	 
	  
	 	  
	 
	
              Address

            	 	
              Address

            	 
	 	 	 	 
	  
	 	  
	 
	
              City,
                State and Zip Code

            	 	
              City,
                State and Zip Code

            	 
	 	 	 	 
	  
	 	  
	 
	
              Telephone-Business

            	 	
              Telephone—Business

            	 
	 	 	 	 
	  
	 	  
	 
	
              Telephone-Residence

            	 	
              Telephone—Residence

            	 
	 	 	 	 
	  
	 	  
	 
	
              Facsimile-Business

            	 	
              Facsimile—Business

            	 
	 	 	 	 
	  
	 	  
	 
	
              Facsimile-Residence

            	 	
              Facsimile—Residence

            	 
	 	 	 	 
	  
	 	  
	 
	
              Tax
                ID # or Social Security # 

            	 	
              Tax
                ID # or Social Security # 

            	 
	 	 	 	 
	
              Name
                in which securities should be issued:

            	 	  
	 

    

    Dated: _____________,
      2007

    

    This
      Subscription Agreement is agreed to and accepted as of ____________________,
      2007.

     

    
      	 	 	 
	 	
              VELCERA
                PHARMACEUTICALS, INC.

            
	 
 	 
 	 
 
	
            	By:  	
            
	 	
              

              Name: 
                Dennis Steadman

              Title:  
                President and 

              Chief
                Executive Officer

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