Document:

Unassociated Document

    

      THE
        REGISTERED HOLDER OF THIS PURCHASE OPTION, BY ITS ACCEPTANCE HEREOF, AGREES
        THAT
        IT WILL NOT SELL, TRANSFER OR ASSIGN THIS PURCHASE OPTION, EXCEPT AS HEREIN
        PROVIDED, AND THE REGISTERED HOLDER OF THIS PURCHASE OPTION AGREES THAT IT
        WILL
        NOT SELL, TRANSFER, ASSIGN, PLEDGE OR HYPOTHECATE THIS PURCHASE OPTION FOR
        A
        PERIOD OF ONE YEAR FOLLOWING THE EFFECTIVE DATE (DEFINED BELOW) TO ANYONE
        OTHER
        THAN (I) MAXIM GROUP LLC OR ITS AFFILIATES (“MAXIM”) OR AN UNDERWRITER OR A
        SELECTED DEALER IN CONNECTION WITH THE OFFERING (DEFINED HEREIN), OR (II)
        A BONA
        FIDE OFFICER, PARTNER OR EMPLOYEE OF MAXIM OR OF ANY SUCH UNDERWRITER OR
        SELECTED DEALER.

       

      THIS
        PURCHASE OPTION IS NOT EXERCISABLE PRIOR TO THE LATER OF (I) ________________,
        2006 AND (II) THE CONSUMMATION BY AFFINITY MEDIA INTERNATIONAL CORP. (“COMPANY”)
        OF A MERGER, CAPITAL STOCK EXCHANGE, ASSET ACQUISITION OR OTHER SIMILAR BUSINESS
        COMBINATION (“BUSINESS COMBINATION”) (AS DESCRIBED MORE FULLY IN THE COMPANY’S
        REGISTRATION STATEMENT (DEFINED HEREIN)). THIS PURCHASE OPTION SHALL BE VOID
        AFTER 5:00 P.M, NEW YORK CITY TIME, ON _____________,
        2010.

       

      

      

      UNIT
        PURCHASE OPTION

      

      

      FOR
        THE
        PURCHASE OF

      

      175,000
        UNITS

      

      OF

      

      AFFINITY
        MEDIA INTERNATIONAL CORP.

      

      

      1. Purchase
        Option.

      

      THIS
        CERTIFIES THAT, in consideration of $100 duly paid by or on behalf of
Maxim
        Partners LLC (collectively, with its successors and permitted assigns and/or
        transferees, the "Holder"),
        as
        registered owner of this Purchase Option, to Affinity Media International
        Corp.
        (the "Company"),
        Holder is entitled, at any time or from time to time upon the later of (i)
        the
        consummation of a Business Combination and (ii) _____________, 2006
        ("Commencement
        Date"),
        and
        at or before 5:00 p.m., Eastern Time, __________, 2010 ("Expiration
        Date"),
        but
        not thereafter, to subscribe for, purchase and receive, in whole or in part,
        up
        to One Hundred and Seventy Five Thousand (175,000) units (the "Units")
        of the
        Company, each Unit consisting of one share of common stock of the Company,
        par
        value $.0001 per share (the "Common
        Stock"),
        and
        one warrant (the "Warrant(s)")
        expiring four years from the effective date ("Effective
        Date")
        of the
        registration statement ("Registration
        Statement")
        pursuant to which Units are offered for sale to the public (the "Offering").
        Each
        Warrant is on the same terms and conditions as the warrants included in the
        Units being registered for sale to the public by way of the Registration
        Statement,
        including that the Warrants underlying the Units comprising this Purchase
        Option
        have an exercise price of $6.00 per share.
        If the
        Expiration Date is a day on which banking institutions are authorized by
        law to
        close, then this Purchase Option may be exercised on the next succeeding
        day
        which is not such a day in accordance with the terms herein. During the period
        ending on the Expiration Date, the Company agrees not to take any action
        that
        would terminate the Purchase Option. This Purchase Option is initially
        exercisable at $8.80 per Unit so purchased; provided,
        however,
        that
        upon the occurrence of any of the events specified in Section 6 hereof, the
        rights granted by this Purchase Option, including the exercise price per
        Unit
        and the number of Units (and shares of Common Stock and Warrants) to be received
        upon such exercise, shall be adjusted as therein specified. The term
        "Exercise
        Price"
        shall
        mean the initial exercise price or the adjusted exercise price, depending
        on the
        context.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      2. Exercise.

      

      2.1 Exercise
        Form.
        In
        order to exercise this Purchase Option, the exercise form attached hereto
        must
        be duly executed and completed and delivered to the Company, together with
        this
        Purchase Option and payment of the Exercise Price for the Units being purchased
        payable in cash or by certified check or official bank check. If the
        subscription rights represented hereby shall not be exercised at or before
        5:00
        p.m., New York City Time, on the Expiration Date, this Purchase Option shall
        become and be void without further force or effect, and all rights represented
        hereby shall cease and expire.

      

      2.2 Legend.
        Each
        certificate for the securities purchased under this Purchase Option shall
        bear a
        legend as follows unless such securities have been registered under the
        Securities Act of 1933, as amended (the "Act"):

      

      "The
        securities represented by this certificate have not been registered under
        the
        Securities Act of 1933, as amended ("Act") or applicable state law. The
        securities may not be offered for sale, sold or otherwise transferred except
        pursuant to an effective registration statement under the Act, or pursuant
        to an
        exemption from registration under the Act and applicable state
        law."

      

      
        
           

        

        
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      2.3 Cashless
        Exercise.
        In lieu
        of the payment of the Exercise Price multiplied by the number of Units for
        which
        this Purchase Option is exercisable (and in lieu of being entitled to receive
        Common Stock and Warrants) in the manner required by Section 2.1, the Holder
        shall have the right (but not the obligation) to convert any exercisable
        but
        unexercised portion of this Purchase Option into Units (the "Conversion
        Right")
        as
        follows: upon exercise of the Conversion Right, the Company shall deliver
        to the
        Holder (without payment by the Holder of any of the Exercise Price in cash)
        that
        number of shares of Common Stock and Warrants comprising that number of Units
        equal to the quotient obtained by dividing (x) the "Value" (as defined below)
        of
        the portion of the Purchase Option being converted by (y) the Current Market
        Value (as defined below) of the portion of the Purchase Option being converted.
        The "Value"
        of the
        portion of the Purchase Option being converted shall equal the remainder
        derived
        from subtracting (a) (i) the Exercise Price multiplied by (ii) the number
        of
        Units underlying the portion of this Purchase Option being converted from
        (b)
        the Current
        Market Value
        of a
        Unit multiplied by the number of Units underlying the portion of the Purchase
        Option being converted. As used herein, the term "Current
        Market Value"
        per
        Unit at any date means: (A) in the event that neither the Units nor Warrants
        are
        still trading, the remainder derived from subtracting (x) the exercise price
        of
        the Warrants multiplied by the number of shares of Common Stock issuable
        upon
        exercise of the Warrants underlying one Unit from (y) (i) the Current Market
        Price of the Common Stock multiplied by (ii) the number of shares of Common
        Stock underlying one Unit, which shall include the shares of Common Stock
        underlying the Warrants included in such Unit; (B) in the event that the
        Units,
        Common Stock and Warrants are still trading, (i) if the Units are listed
        on a
        national securities exchange or quoted on the Nasdaq National Market, Nasdaq
        SmallCap Market or NASD OTC Bulletin Board (or successor such as the Bulletin
        Board Exchange), the last sale price of the Units in the principal trading
        market for the Units as reported by the exchange, Nasdaq or the NASD, as
        the
        case may be, on the last trading day preceding the date in question; or (ii)
        if
        the Units are not listed on a national securities exchange or quoted on the
        Nasdaq National Market, Nasdaq SmallCap Market or the NASD OTC Bulletin Board
        (or successor exchange), but is traded in the residual over-the-counter market,
        the closing bid price for Units on the last trading day preceding the date
        in
        question for which such quotations are reported by the Pink Sheets, LLC or
        similar publisher of such quotations; and (C) in the event that the Units
        are
        not still trading but the Common Stock and Warrants underlying the Units
        are
        still trading, the Current Market Price of the Common Stock plus the product
        of
        (x) the Current Market Price of the Warrants and (y) the number of shares
        of
        Common Stock underlying the Warrants included in one Unit. The "Current
        Market Price"
        shall
        mean (i) if the Common Stock (or Warrants, as the case may be) is listed
        on a
        national securities exchange or quoted on the Nasdaq National Market, Nasdaq
        SmallCap Market or NASD OTC Bulletin Board (or successor such as the Bulletin
        Board Exchange), the last sale price of the Common Stock (or Warrants) in
        the
        principal trading market for the Common Stock as reported by the exchange,
        Nasdaq or the NASD, as the case may be, on the last trading day preceding
        the
        date in question; (ii) if the Common Stock (or Warrants, as the case may
        be) is
        not listed on a national securities exchange or quoted on the Nasdaq National
        Market, Nasdaq SmallCap Market or the NASD OTC Bulletin Board (or successor
        exchange), but is traded in the residual over-the-counter market, the closing
        bid price for the Common Stock (or Warrants) on the last trading day preceding
        the date in question for which such quotations are reported by the Pink Sheets,
        LLC or similar publisher of such quotations; and (iii) if the fair market
        value
        of the Common Stock cannot be determined pursuant to clause (i) or (ii) above,
        such price as the Board of Directors of the Company shall determine, in good
        faith.

      2.4
         Mechanics
        of Cashless Exercise.
        The
        Cashless Exercise Right may be exercised by the Holder on any business day
        on or
        after the Commencement Date and not later than the Expiration Date by delivering
        the Purchase Option with the duly executed exercise form attached hereto
        with
        the cashless exercise section completed to the Company, exercising the Cashless
        Exercise Right and specifying the total number of Units the Holder will purchase
        pursuant to such Cashless Exercise Right.

       

      
        
           

        

        
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      3. Transfer.

      

      3.1 General
        Restrictions.
        The
        registered Holder of this Purchase Option, by its acceptance hereof, agrees
        that
        it will not sell, transfer, assign, pledge or hypothecate this Purchase Option
        for a period of one year following the Effective Date to anyone other than
        (i)
        Maxim or an underwriter or a selected dealer in connection with the Offering,
        or
        (ii) a bona fide officer or partner of Maxim or of any such underwriter or
        selected dealer. On and after the first anniversary of the Effective Date,
        transfers to others may be made subject to compliance with or exemptions
        from
        applicable securities laws. In order to make any permitted assignment, the
        Holder must deliver to the Company the assignment form attached hereto duly
        executed and completed, together with the Purchase Option and payment of
        all
        transfer taxes, if any, payable in connection therewith. The Company shall
        within five business days transfer this Purchase Option on the books of the
        Company and shall execute and deliver a new Purchase Option or Purchase Options
        of like tenor to the appropriate assignee(s) expressly evidencing the right
        to
        purchase the aggregate number of Units purchasable hereunder or such portion
        of
        such number as shall be contemplated by any such assignment.

      

      3.2 Restrictions
        Imposed by the Act.
        The
        securities evidenced by this Purchase Option shall not be transferred unless
        and
        until (i) the Company has received the opinion of counsel for the Holder
        that
        the securities may be transferred pursuant to an exemption from registration
        under the Act and applicable state securities laws, the availability of which
        is
        established to the reasonable satisfaction of the Company (the Company hereby
        agreeing that the opinion of Lowenstein Sandler PC shall be deemed satisfactory
        evidence of the availability of an exemption), or (ii) a registration statement
        or a post-effective amendment to the Registration Statement relating to such
        securities has been filed by the Company and declared effective by the
        Securities and Exchange Commission and compliance with applicable state
        securities law has been established.

      

      4. New
        Purchase Options to be Issued.

      

      4.1 Partial
        Exercise or Transfer.
        Subject
        to the restrictions in Section 3 hereof, this Purchase Option may be exercised
        or assigned in whole or in part. In the event of the exercise or assignment
        hereof in part only, upon surrender of this Purchase Option for cancellation,
        together with the duly executed exercise or assignment form and, except in
        the
        case of an exercise of this Purchase Option contemplated by Section 2.3 hereof,
        funds sufficient to pay any Exercise Price and/or transfer tax, the Company
        shall cause to be delivered to the Holder without charge a new Purchase Option
        of like tenor to this Purchase Option in the name of the Holder evidencing
        the
        right of the Holder to purchase the number of Units purchasable hereunder
        as to
        which this Purchase Option has not been exercised or assigned.

      

      4.2 Lost
        Certificate.
        Upon
        receipt by the Company of evidence satisfactory to it of the loss, theft,
        destruction or mutilation of this Purchase Option and of reasonably satisfactory
        indemnification or the posting of a bond, the Company shall execute and deliver
        a new Purchase Option of like tenor and date. Any such new Purchase Option
        executed and delivered as a result of such loss, theft, mutilation or
        destruction shall constitute a substitute contractual obligation on the part
        of
        the Company.

      

      
        
           

        

        
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      5. Registration
        Rights.

      

      5.1 Demand
        Registration.

      

      5.1.1 Grant
        of Right.
        The
        Company, upon written demand (an "Initial
        Demand Notice")
        of the
        Holder(s) of at least 51% of the Purchase Options and/or the underlying Units
        and/or the underlying securities (the "Majority
        Holders"),
        agrees to register on one occasion, all or any portion of the Purchase Options
        requested by the Majority Holders in the Initial Demand Notice and all of
        the
        securities underlying such Purchase Options, including the Units, Common
        Stock,
        the Warrants and the Common Stock underlying the Warrants (collectively,
        the
        "Registrable
        Securities").
        On
        such occasion, the Company will file a registration statement or a
        post-effective amendment to the Registration Statement covering the Registrable
        Securities within sixty days after receipt of the Initial Demand Notice and
        use
        its best efforts to have such registration statement or post-effective amendment
        declared effective as soon as possible thereafter. The demand for registration
        may be made at any time during a period of five years beginning on the Effective
        Date. The Company covenants and agrees to give written notice of its receipt
        of
        any Initial Demand Notice by any Holder(s) to all other registered Holders
        of
        the Purchase Options and/or the Registrable Securities within ten days from
        the
        date of the receipt of any such Initial Demand Notice.

      

      5.1.2 Terms.
        The
        Company shall bear all fees and expenses attendant to registering the
        Registrable Securities, including the expenses of any legal counsel selected
        by
        the Holders to represent them in connection with the sale of the Registrable
        Securities, but the Holders shall pay any and all underwriting commissions.
        The
        Company agrees to use its reasonable best efforts to qualify or register
        the
        Registrable Securities in such States as are reasonably requested by the
        Majority Holder(s); provided,
        however,
        that in
        no event shall the Company be required to register the Registrable Securities
        in
        a State in which such registration would cause (i) the Company to be obligated
        to qualify to do business in such State, or would subject the Company to
        taxation as a foreign corporation doing business in such jurisdiction or
        (ii)
        the principal stockholders of the Company to be obligated to escrow their
        shares
        of capital stock of the Company. The Company shall cause any registration
        statement or post-effective amendment filed pursuant to the demand rights
        granted under Section 5.1.1 to remain effective for a period of two (2) years
        from the effective date of such registration statement or post-effective
        amendment.

      

      5.2 "Piggy-Back"
        Registration.

      

      5.2.1 Grant
        of Right.
        In
        addition to the demand right of registration, the Holders of the Purchase
        Options shall have the right for a period of seven years commencing on the
        Effective Date, to include the Registrable Securities as part of any other
        registration of securities filed by the Company (other than in connection
        with a
        transaction contemplated by Rule 145(a) promulgated under the Act or pursuant
        to
        Form S-8); provided,
        however,
        that
        if, in the written opinion of the Company's managing underwriter or
        underwriters, if any, for such offering, the inclusion of the Registrable
        Securities, when added to the securities being registered by the Company
        or the
        selling stockholder(s), will exceed the maximum amount of the Company's
        securities (the "Maximum
        Number of Shares")
        which
        can be marketed (i) at a price reasonably related to their then current market
        value, and (ii) without materially and adversely affecting the entire offering,
        then the Company shall include in any such registration:

      

      
        
           

        

        
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      (i) If
        the
        registration is undertaken for the Company's account: (A) first, the shares
        of
        Common Stock or other securities that the Company desires to sell that can
        be
        sold without exceeding the Maximum Number of Shares; (B) second, to the extent
        that the Maximum Number of Shares has not been reached under the foregoing
        clause (A), the shares of Common Stock, if any, including the Registrable
        Securities, as to which registration has been requested pursuant to written
        contractual piggy-back registration rights of security holders (pro rata
        in
        accordance with the number of shares of Common Stock which each such person
        has
        actually requested to be included in such registration, regardless of the
        number
        of shares of Common Stock with respect to which such persons have the right
        to
        request such inclusion) that can be sold without exceeding the Maximum Number
        of
        Shares; and

      

      (ii) If
        the
        registration is a "demand" registration undertaken at the demand of persons
        other than the holders of Registrable Securities pursuant to written contractual
        arrangements with such persons, (A) first, the shares of Common Stock for
        the
        account of the demanding persons that can be sold without exceeding the Maximum
        Number of Shares; (B) second, to the extent that the Maximum Number of Shares
        has not been reached under the foregoing clause (A), the shares of Common
        Stock
        or other securities that the Company desires to sell that can be sold without
        exceeding the Maximum Number of Shares; and (C) third, to the extent that
        the
        Maximum Number of Shares has not been reached under the foregoing clauses
        (A)
        and (B), the Registrable Securities as to which registration has been requested
        under this Section 5.2 (pro rata in accordance with the number of shares
        of
        Registrable Securities held by each such holder); and (D) fourth, to the
        extent
        that the Maximum Number of Shares has not been reached under the foregoing
        clauses (A), (B) and (C), the shares of Common Stock, if any, as to which
        registration has been requested pursuant to written contractual piggy-back
        registration rights which other shareholders desire to sell that can be sold
        without exceeding the Maximum Number of Shares.

      

      5.2.2 Terms.
        The
        Company shall bear all fees and expenses attendant to registering the
        Registrable Securities, including the expenses of any legal counsel selected
        by
        the Holders to represent them in connection with the sale of the Registrable
        Securities but the Holders shall pay any and all underwriting commissions
        related to the Registrable Securities. In the event of such a proposed
        registration, the Company shall furnish the then Holders of outstanding
        Registrable Securities with not less than fifteen days written notice prior
        to
        the proposed date of filing of such registration statement. Such notice to
        the
        Holders shall continue to be given for each applicable registration statement
        filed (during the period in which the Purchase Option is exercisable) by
        the
        Company until such time as all of the Registrable Securities have been
        registered and sold. The holders of the Registrable Securities shall exercise
        the "piggy-back" rights provided for herein by giving written notice, within
        ten
        days of the receipt of the Company's notice of its intention to file a
        registration statement. The Company shall cause any registration statement
        filed
        pursuant to the above "piggyback" rights to remain effective for at least
        nine
        months from the date that the Holders of the Registrable Securities are first
        given the opportunity to sell all of such securities. The
        Company agrees, at its sole expenses, to use its reasonable best efforts
        to
        qualify or register the Registrable Securities in such States as are reasonably
        requested by the Majority Holder(s); provided, however, that in no event
        shall
        the Company be required to register the Registrable Securities in a State
        in
        which such registration would cause (i) the Company to be obligated to qualify
        to do business in such State, or would subject the Company to taxation as
        a
        foreign corporation doing business in such jurisdiction or (ii) the principal
        stockholders of the Company to be obligated to escrow their shares of capital
        stock of the Company. 

      

      
        
           

        

        
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      5.3 Damages.
        Should
        the registration or the effectiveness thereof required by Sections 5.1 and
        5.2
        hereof be delayed by the Company or the Company otherwise materially fails
        to
        comply with such provisions, the Company shall, in addition to any other
        equitable or other relief available to the Holder(s), be liable for any and
        all
        incidental, special and consequential damages sustained by the Holder(s),
        including, but not limited to, the loss of any profits that might have been
        received by the holder upon the sale of shares of Common Stock or Warrants
        (and
        shares of Common Stock underlying the Warrants) underlying this Purchase
        Option.

      

      5.4 General
        Terms.

      

      5.4.1 Indemnification.
        The
        Company shall indemnify the Holder(s) of the Registrable Securities to be
        sold
        pursuant to any registration statement hereunder and each person, if any,
        who
        controls such Holders within the meaning of Section 15 of the Act or Section
        20(a) of the Securities Exchange Act of 1934, as amended (the "Exchange
        Act"),
        and any
        of their respective heirs, successors, permitted assigns and transfers, and
        agents and representatives,
        against
        all loss, claim, damage, expense or liability (including all reasonable
        attorneys' fees and other expenses reasonably incurred in investigating,
        preparing or defending against litigation, commenced or threatened, or any
        claim
        whatsoever whether arising out of any action between the underwriter and
        the
        Company or between the underwriter and any third party or otherwise) to which
        any of them may become subject under the Act, the Exchange Act or otherwise,
        arising from such registration statement but only to the same extent and
        with
        the same effect as the provisions pursuant to which the Company has agreed
        to
        indemnify the underwriters contained in Section 6 of the Underwriting Agreement
        between the Company, Maxim and the other underwriters named therein dated
        the
        Effective Date. The Holder(s) of the Registrable Securities to be sold pursuant
        to such registration statement, and their successors and assigns, shall
        severally, and not jointly, indemnify the Company, its officers and directors
        and each person, if any, who controls the Company within the meaning of Section
        15 of the Act or Section 20(a) of the Exchange Act, against all loss, claim,
        damage, expense or liability (including all reasonable attorneys' fees and
        other
        expenses reasonably incurred in investigating, preparing or defending against
        any claim whatsoever) to which they may become subject under the Act, the
        Exchange Act or otherwise, arising from information furnished by or on behalf
        of
        such Holders, or their successors or assigns, in writing, for specific inclusion
        in such registration statement to the same extent and with the same effect
        as
        the provisions contained in Section 5 of the Underwriting Agreement pursuant
        to
        which the underwriters have agreed to indemnify the Company.

       

      

      
        
           

        

        
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        5.4.2 Exercise
          of Purchase Options.
          Nothing
          contained in this Purchase Option shall be construed as requiring the Holder(s)
          to exercise their Purchase Options or Warrants underlying such Purchase
          Options
          prior to or after the initial filing of any registration statement or the
          effectiveness thereof.

      

       

      5.4.3 Documents
        Delivered to Holders.
        The
        Company shall furnish Maxim, as representative of the Holders participating
        in
        any of the foregoing offerings, a signed counterpart, addressed to the
        participating Holders, of (i) an opinion of counsel to the Company, dated
        the
        effective date of such registration statement (and, if such registration
        includes an underwritten public offering, an opinion dated the date of the
        closing under any underwriting agreement related thereto), and (ii) a "cold
        comfort" letter dated the effective date of such registration statement (and,
        if
        such registration includes an underwritten public offering, a letter dated
        the
        date of the closing under the underwriting agreement) signed by the independent
        public accountants who have issued a report on the Company's financial
        statements included in such registration statement, in each case covering
        substantially the same matters with respect to such registration statement
        (and
        the prospectus included therein) and, in the case of such accountants' letter,
        with respect to events subsequent to the date of such financial statements,
        as
        are customarily covered in opinions of issuer's counsel and in accountants'
        letters delivered to underwriters in underwritten public offerings of
        securities. The Company shall also deliver promptly to Maxim, as representative
        of the Holders participating in the offering, the correspondence and memoranda
        described below and copies of all correspondence between the Commission and
        the
        Company, its counsel or auditors and all memoranda relating to discussions
        with
        the Commission or its staff with respect to the registration statement and
        permit Maxim, as representative of the Holders, to do such investigation,
        upon
        reasonable advance notice, with respect to information contained in or omitted
        from the registration statement as it deems reasonably necessary to comply
        with
        applicable securities laws or rules of the National Association of Securities
        Dealers, Inc. (the "NASD").
        Such
        investigation shall include access to books, records and properties and
        opportunities to discuss the business of the Company with its officers and
        independent auditors, all to such reasonable extent and at such reasonable
        times
        and as often as Maxim, as representative of the Holders, shall reasonably
        request. The Company shall not be required to disclose any confidential
        information or other records to Maxim, as representative of the Holders,
        or to
        any other person, until and unless such persons shall have entered into
        reasonable confidentiality agreements (in form and substance reasonably
        satisfactory to the Company), with the Company with respect
        thereto.

      

      5.4.4 Underwriting
        Agreement.
        The
        Company shall enter into an underwriting agreement with the managing
        underwriter(s), if any, selected by any Holders whose Registrable Securities
        are
        being registered pursuant to this Section 5, which managing underwriter shall
        be
        reasonably acceptable to the Company. Such agreement shall be reasonably
        satisfactory in form and substance to the Company, each Holder and such managing
        underwriters, and shall contain such representations, warranties and covenants
        by the Company and such other terms as are customarily contained in agreements
        of that type used by the managing underwriter. The Holders shall be parties
        to
        any underwriting agreement relating to an underwritten sale of their Registrable
        Securities and may, at their option, require that any or all the
        representations, warranties and covenants of the Company to or for the benefit
        of such underwriters shall also be made to and for the benefit of such Holders.
        Such Holders shall not be required to make any representations or warranties
        to
        or agreements with the Company or the underwriters except as they may relate
        to
        such Holders and their intended methods of distribution. Such Holders, however,
        shall agree to such covenants and indemnification and contribution obligations
        for selling stockholders as are customarily contained in agreements of that
        type
        used by the managing underwriter. Further, such Holders shall execute
        appropriate custody agreements and otherwise cooperate fully in the preparation
        of the registration statement and other documents relating to any offering
        in
        which they include securities pursuant to this Section 5. Each Holder shall
        also
        furnish to the Company such information regarding itself, the Registrable
        Securities held by it, and the intended method of disposition of such securities
        as shall be reasonably required to effect the registration of the Registrable
        Securities.

      

      
        
           

        

        
          8

          
            

          

        

        
           

        

      

       

      5.4.5 Rule
        144 Sale.  Notwithstanding
        anything contained in this Section 5 to the contrary, the Company shall have
        no
        obligation pursuant to Sections 5.1 or 5.2 for the registration of Registrable
        Securities held by any Holder (i) where such Holder would then be entitled
        to
        sell under Rule 144 within any three month period (or such other period
        prescribed under Rule 144 as may be provided by amendment thereof) all of
        the
        Registrable Securities held by such Holder, and (ii) where the number of
        Registrable Securities held by such Holder is within the volume limitations
        under paragraph (e) of Rule 144 (calculated as if such Holder were an affiliate
        within the meaning of Rule 144).

      

      5.4.6 Supplemental
        Prospectus.
        Each
        Holder agrees, that upon receipt of any notice from the Company of the happening
        of any event as a result of which the prospectus included in the Registration
        Statement, as then in effect, includes an untrue statement of a material
        fact or
        omits to state a material fact required to be stated therein or necessary
        to
        make the statements therein not misleading in light of the circumstances
        then
        existing, such Holder will immediately discontinue disposition of Registrable
        Securities pursuant to the Registration Statement covering such Registrable
        Securities until such Holder's receipt of the copies of a supplemental or
        amended prospectus, and, if so desired by the Company, such Holder shall
        deliver
        to the Company (at the expense of the Company) or destroy (and deliver to
        the
        Company a certificate of such destruction) all copies, other than permanent
        file
        copies then in such Holder's possession, of the prospectus covering such
        Registrable Securities current at the time of receipt of such
        notice.

      

      6. Adjustments.

      

      6.1 Adjustments
        to Exercise Price and Number of Securities.
        The
        Exercise Price and the number of Units underlying the Purchase Option shall
        be
        subject to adjustment from time to time as hereinafter set forth:

      

      6.1.1 Stock
        Dividends - Split-Ups.
        If
        after the date hereof, and subject to the provisions of Section 6.4 below,
        the
        number of outstanding shares of Common Stock is increased by a stock dividend
        payable in shares of Common Stock or by a split-up of shares of Common Stock
        or
        other similar event, then, on the effective date thereof, the number of shares
        of Common Stock underlying each of the Units purchasable hereunder shall
        be
        increased in proportion to such increase in outstanding shares. In such case,
        the number of shares of Common Stock, and the exercise price applicable thereto,
        underlying the Warrants underlying each of the Units purchasable hereunder
        shall
        be adjusted in accordance with the terms of the Warrants. For example, if
        the
        Company declares a two-for-one stock dividend and at the time of such dividend
        this Purchase Option is for the purchase of one Unit at $8.80 per whole Unit
        (each Warrant underlying the Units is exercisable for $6.00 per share), upon
        effectiveness of the dividend, this Purchase Option will be adjusted to allow
        for the purchase of one Unit at $8.80 per Unit, each Unit entitling the holder
        to receive two shares of Common Stock and two Warrants (each Warrant exercisable
        for $3.00 per share).

       

      
        
           

        

        
          9

          
            

          

        

        
           

        

      

       

      6.1.2 Aggregation
        of Shares.
        If
        after the date hereof, and subject to the provisions of Section 6.4, the
        number
        of outstanding shares of Common Stock is decreased by a consolidation,
        combination or reclassification of shares of Common Stock or other similar
        event, then, on the effective date thereof, the number of shares of Common
        Stock
        underlying each of the Units purchasable hereunder shall be decreased in
        proportion to such decrease in outstanding shares. In such case, the number
        of
        shares of Common Stock, and the exercise price applicable thereto, underlying
        the Warrants underlying each of the Units purchasable hereunder shall be
        adjusted in accordance with the terms of the Warrants.

      

      6.1.3 Replacement
        of Securities upon Reorganization, etc.
        In case
        of any reclassification or reorganization of the outstanding shares of Common
        Stock other than a change covered by Section 6.1.1 or 6.1.2 hereof or that
        solely affects the par value of such shares of Common Stock, or in the case
        of
        any merger or consolidation of the Company with or into another corporation
        (other than a consolidation or merger in which the Company is the continuing
        corporation and that does not result in any reclassification or reorganization
        of the outstanding shares of Common Stock), or in the case of any sale or
        conveyance to another corporation or entity of the property of the Company
        as an
        entirety or substantially as an entirety in connection with which the Company
        is
        dissolved, the Holder of this Purchase Option shall have the right thereafter
        (until the expiration of the right of exercise of this Purchase Option) to
        receive upon the exercise hereof, for the same aggregate Exercise Price payable
        hereunder immediately prior to such event, the kind and amount of shares
        of
        stock or other securities or property (including cash) receivable upon such
        reclassification, reorganization, merger or consolidation, or upon a dissolution
        following any such sale or transfer, by a Holder of the number of shares
        of
        Common Stock of the Company obtainable upon exercise of this Purchase Option
        and
        the underlying Warrants immediately prior to such event; and if any
        reclassification also results in a change in shares of Common Stock covered
        by
        Section 6.1.1 or 6.1.2, then such adjustment shall be made pursuant to Sections
        6.1.1, 6.1.2 and this Section 6.1.3. The provisions of this Section 6.1.3
        shall
        similarly apply to successive reclassifications, reorganizations, mergers
        or
        consolidations, sales or other transfers.

       

      6.1.4 Changes
        in Form of Purchase Option.
        This
        form of Purchase Option need not be changed because of any change pursuant
        to
        this Section, and Purchase Options issued after such change may state the
        same
        Exercise Price and the same number of Units as are stated in the Purchase
        Options initially issued pursuant to this Agreement. The acceptance by any
        Holder of the issuance of new Purchase Options reflecting a required or
        permissive change shall not be deemed to waive any rights to an adjustment
        occurring after the Commencement Date or the computation thereof.

      

      
        
           

        

        
          10

          
            

          

        

        
           

        

      

       

      6.2 Substitute
        Purchase Option.
        In case
        of any consolidation of the Company with, or merger of the Company with,
        or
        merger of the Company into, another corporation (other than a consolidation
        or
        merger which does not result in any reclassification or change of the
        outstanding Common Stock), the corporation formed by such consolidation or
        merger shall execute and deliver to the Holder a supplemental Purchase Option
        providing that the holder of each Purchase Option then outstanding or to
        be
        outstanding shall have the right thereafter (until the stated expiration
        of such
        Purchase Option) to receive, upon exercise of such Purchase Option, the kind
        and
        amount of shares of stock and other securities and property receivable upon
        such
        consolidation or merger, by a holder of the number of shares of Common Stock
        of
        the Company for which such Purchase Option might have been exercised immediately
        prior to such consolidation, merger, sale or transfer. Such supplemental
        Purchase Option shall provide for adjustments which shall be identical to
        the
        adjustments provided in Section 6. The above provision of this Section shall
        similarly apply to successive consolidations or mergers.

      

      6.3 Elimination
        of Fractional Interests.
        The
        Company shall not be required to issue certificates representing fractions
        of
        shares of Common Stock or Warrants upon the exercise of the Purchase Option,
        nor
        shall it be required to issue scrip or pay cash in lieu of any fractional
        interests, it being the intent of the parties that all fractional interests
        shall be eliminated by rounding any fraction up or down to the nearest whole
        number of Warrants, shares of Common Stock or other securities, properties
        or
        rights.

      

      7. Reservation
        and Listing.
        The
        Company shall at all times reserve and keep available out of its authorized
        shares of Common Stock, solely for the purpose of issuance upon exercise
        of the
        Purchase Options or the Warrants underlying the Purchase Option, such number
        of
        shares of Common Stock or other securities, properties or rights as shall
        be
        issuable upon the exercise thereof. The Company covenants and agrees that,
        upon
        exercise of the Purchase Options and payment of the Exercise Price therefor,
        all
        shares of Common Stock and other securities issuable upon such exercise shall
        be
        duly and validly issued, fully paid and non-assessable and not subject to
        preemptive rights of any stockholder. The Company further covenants and agrees
        that upon exercise of the Warrants underlying the Purchase Options and payment
        of the respective Warrant exercise price therefor, all shares of Common Stock
        and other securities issuable upon such exercise shall be duly and validly
        issued, fully paid and non-assessable and not subject to preemptive rights
        of
        any stockholder. As long as the Purchase Options shall be outstanding, the
        Company shall use its best efforts to cause all (i) Units and shares of Common
        Stock issuable upon exercise of the Purchase Options, (ii) Warrants issuable
        upon exercise of the Purchase Options and (iii) shares of Common Stock issuable
        upon exercise of the Warrants included in the Units issuable upon exercise
        of
        the Purchase Option to be listed (subject to official notice of issuance)
        on all
        securities exchanges (or, if applicable on the Nasdaq National Market, SmallCap
        Market, OTC Bulletin Board or any successor trading market) on which the
        Units,
        the Common Stock or the Warrants may then be listed and/or quoted.

       

      8. Certain
        Notice Requirements.

      

      8.1 Holder's
        Right to Receive Notice.
        Nothing
        herein shall be construed as conferring upon the Holders the right to vote
        or
        consent as a stockholder for the election of directors or any other matter,
        or
        as having any rights whatsoever as a stockholder of the Company. If, however,
        at
        any time prior to the expiration of the Purchase Options and their exercise,
        any
        of the events described in Section 8.2 shall occur, then, in one or more
        of said
        events, the Company shall give written notice of such event at least fifteen
        days prior to the date fixed as a record date or the date of closing the
        transfer books for the determination of the stockholders entitled to such
        dividend, distribution, conversion or exchange of securities or subscription
        rights, or entitled to vote on such proposed dissolution, liquidation, winding
        up or sale. Such notice shall specify such record date or the date of the
        closing of the transfer books, as the case may be. Notwithstanding the
        foregoing, the Company shall deliver to each Holder a copy of each notice
        given
        to the other stockholders of the Company at the same time and in the same
        manner
        that such notice is given to the stockholders.

      

      
        
           

        

        
          11

          
            

          

        

        
           

        

      

       

      8.2 Events
        Requiring Notice.
        The
        Company shall be required to give the notice described in this Section 8
        upon
        one or more of the following events: (i) if the Company shall take a record
        of
        the holders of its shares of Common Stock for the purpose of entitling them
        to
        receive a dividend or distribution, or (ii) the Company shall offer to all
        the
        holders of its Common Stock any additional shares of capital stock of the
        Company or securities convertible into or exchangeable for shares of capital
        stock of the Company, or any option, right or warrant to subscribe therefor,
        or
        (iii) a dissolution, liquidation or winding up of the Company (other than
        in
        connection with a consolidation or merger) or a sale of all or substantially
        all
        of its property, assets and business or a merger of the Company wherein the
        separate existence of the Company shall cease shall be proposed.

      

      8.3 Notice
        of Change in Exercise Price.
        The
        Company shall, promptly after an event requiring a change in the Exercise
        Price
        pursuant to Section 6 hereof, send notice to the Holders of such event and
        change (a "Price
        Notice").
        The
        Price Notice shall describe the event causing the change and the method of
        calculating same and shall be certified as being true and accurate by the
        Company's President and Chief Financial Officer.

      

       

      8.4 Transmittal
        of Notices.
        All
        notices, requests, consents and other communications under this Purchase
        Option
        shall be in writing and shall be deemed to have been duly made when hand
        delivered, mailed by express mail or private courier service, or sent by
        facsimile transmission, with confirmation of receipt: (i) If to the registered
        Holder of the Purchase Option, to the address and/or fax number of such Holder
        as shown on the books of the Company, or (ii) if to the Company, to the
        following address or fax number or to such other address or and fax number
        as
        the Company may designate by notice to the Holders:

      

      Affinity
        Media International Corp.

      11601
        Wilshire Blvd., Suite 1500

      Los
        Angeles, CA 90025

      Attn:
        Howard Cohl, President

      Fax
        No.:
        (310) 203-9689

      

      

      
        
           

        

        
          12

          
            

          

        

        
           

        

      

       

      9. Miscellaneous.

      

      9.1 Amendments.
        The
        Company and Maxim may from time to time supplement or amend this Purchase
        Option
        without the approval of any of the Holders in order to cure any ambiguity,
        to
        correct or supplement any provision contained herein that may be defective
        or
        inconsistent with any other provisions herein, or to make any other provisions
        in regard to matters or questions arising hereunder that the Company and
        Maxim
        may deem necessary or desirable and that the Company and Maxim deem shall
        not
        adversely affect the interest of the Holders. All other modifications or
        amendments shall require the written consent of and be signed by the party
        against whom enforcement of the modification or amendment is
        sought.

      

      9.2 Headings.
        The
        headings contained herein are for the sole purpose of convenience of reference,
        and shall not in any way limit or affect the meaning or interpretation of
        any of
        the terms or provisions of this Purchase Option.

      

      10. Entire
        Agreement.
        This
        Purchase Option (together with the other agreements and documents being
        delivered pursuant to or in connection with this Purchase Option) constitutes
        the entire agreement of the parties hereto with respect to the subject matter
        hereof, and supersedes all prior agreements and understandings of the parties,
        oral and written, with respect to the subject matter hereof.

      

      10.1 Binding
        Effect.
        This
        Purchase Option shall inure solely to the benefit of and shall be binding
        upon,
        the Holder and the Company and their permitted assignees, respective successors,
        legal representative and assigns, and no other person shall have or be construed
        to have any legal or equitable right, remedy or claim under or in respect
        of or
        by virtue of this Purchase Option or any provisions herein
        contained.

      

      10.2 Governing
        Law; Submission to Jurisdiction.
        This
        Purchase Option shall be governed by and construed and enforced in accordance
        with the laws of the State of New York, without giving effect to conflict
        of
        laws. Each of the Company and Maxim agree that any action, proceeding or
        claim
        against it arising out of, or relating in any way to this Purchase Option
        shall
        be brought and enforced in the courts of the State of New York located in
        New
        York County or of the United States of America for the Southern District
        of New
        York, and irrevocably submits to such jurisdiction, which jurisdiction shall
        be
        exclusive. Each of the Company and Maxim hereby waives any objection to such
        exclusive jurisdiction and that such courts represent an inconvenient forum.
        Any
        process or summons to be served upon the Company may be served by transmitting
        a
        copy thereof by registered or certified mail, return receipt requested, postage
        prepaid, addressed to it at the address set forth in Section 8 hereof. Such
        mailing shall be deemed personal service and shall be legal and binding upon
        the
        Company in any action, proceeding or claim. The Company and the Holder agree
        that the prevailing party(ies) in any such action shall be entitled to recover
        from the other party(ies) all of its reasonable attorneys' fees and expenses
        relating to such action or proceeding and/or incurred in connection with
        the
        preparation therefor.

      

      10.3 Waiver,
        Etc.
        The
        failure of the Company or the Holder to at any time enforce any of the
        provisions of this Purchase Option shall not be deemed or construed to be
        a
        waiver of any such provision, nor to in any way affect the validity of this
        Purchase Option or any provision hereof or the right of the Company or any
        Holder to thereafter enforce each and every provision of this Purchase Option.
        No waiver of any breach, non-compliance or non-fulfillment of any of the
        provisions of this Purchase Option shall be effective unless set forth in
        a
        written instrument executed by the party or parties against whom or which
        enforcement of such waiver is sought; and no waiver of any such breach,
        non-compliance or non-fulfillment shall be construed or deemed to be a waiver
        of
        any other or subsequent breach, non-compliance or non-fulfillment.

      

       

      

      10.5
         Exchange
        Agreement.
        As a
        condition of the Holder's receipt and acceptance of this Purchase Option,
        Holder
        agrees that, at any time prior to the complete exercise of this Purchase
        Option
        by Holder, if the Company and Maxim enter into an agreement (an "Exchange
        Agreement")
        pursuant to which they agree that all outstanding Purchase Options will be
        exchanged for securities or cash or a combination of both, then Holder shall
        agree to such exchange and become a party to the Exchange
        Agreement.

       

      10.6 Underlying
        Warrants.
        At any
        time after exercise by the Holder of this Purchase Option, the Holder may
        exchange his Warrants for Public Warrants upon payment to the Company of
        the
        difference between the exercise price of his Warrant and the exercise price
        of
        the Public Warrants, if any.

      

      

      
        [Remainder
          of Page Intentionally Left Blank]

      

      

      

      

      

      

      

      

      

      

      

      

      

      
        
           

        

        
          13

          
            

          

        

        
           

        

      

      

      IN
        WITNESS WHEREOF, the Company has caused this Purchase Option to be signed
        by its
        duly authorized officer as of the ____ day of __________, 2005.

      

      

      AFFINITY
        MEDIA INTERNATIONAL CORP.

      

      

      By:_________________________________

      Name:
        Howard Cohl 

      Title:    President

      
        
           

        

        
          14

          
            

          

        

        
           

        

      

      Form
        to
        be used to exercise Purchase Option

      

      Affinity
        Media International Corp.

      _________________________

      _________________________

      

      Date:_________________,
        200__

      

      The
        undersigned hereby elects irrevocably to exercise all or a portion of the
        within
        Purchase Option and to purchase ____ Units of Affinity Media International
        Corp.
        and hereby makes payment of $____________ (at the rate of $_________ per
        Unit)
        in payment of the Exercise Price pursuant thereto. Please issue the Common
        Stock
        and Warrants as to which this Purchase Option is exercised in accordance
        with
        the instructions given below.

      

      or

      

      The
        undersigned hereby elects irrevocably to convert its right to purchase _________
        Units purchasable under the within Purchase Option by surrender of the
        unexercised portion of the attached Purchase Option (with a "Value" based
        of
        $_______ based on a "Market Price" of $_______). Please issue the securities
        comprising the Units as to which this Purchase Option is exercised in accordance
        with the instructions given below.

      

      ________________________

      Signature

      

      ________________________

      Signature
        Guaranteed

      

      

      

      INSTRUCTIONS
        FOR REGISTRATION OF SECURITIES

      

      

      Name_____________________________________________________________

      (Print
        in
        Block Letters)

      

      Address__________________________________________________________

      

      

      NOTICE:
        THE SIGNATURE TO THIS FORM MUST CORRESPOND WITH THE NAME AS WRITTEN UPON
        THE
        FACE OF THE WITHIN PURCHASE OPTION IN EVERY PARTICULAR WITHOUT ALTERATION
        OR
        ENLARGEMENT OR ANY CHANGE WHATSOEVER, AND MUST BE GUARANTEED BY A BANK, OTHER
        THAN A SAVINGS BANK, OR BY A TRUST COMPANY OR BY A FIRM HAVING MEMBERSHIP
        ON A
        REGISTERED NATIONAL SECURITIES EXCHANGE.

      

      

      
        
           

        

        
          15

          
            

          

        

        
           

        

      

       

      Form
        to
        be used to assign Purchase Option

      

      

      ASSIGNMENT

      

      

      (To
        be
        executed by the registered Holder to effect a transfer of the within Purchase
        Option):

      

      FOR
        VALUE
        RECEIVED,___________________________________________ does hereby sell, assign
        and transfer unto______________________________________ the right to purchase
        __________ Units of Affinity Media International Corp. (the "Company")
        evidenced by the within Purchase Option and does hereby authorize the Company
        to
        transfer such right on the books of the Company.

      

      Dated:___________________,
        200_

      

      

      ______________________

      Signature

      

      

      ______________________

      Signature
        Guaranteed

      

      

      

      NOTICE:
        THE SIGNATURE TO THIS FORM MUST CORRESPOND WITH THE NAME AS WRITTEN UPON
        THE
        FACE OF THE WITHIN PURCHASE OPTION IN EVERY PARTICULAR WITHOUT ALTERATION
        OR
        ENLARGEMENT OR ANY CHANGE WHATSOEVER, AND MUST BE GUARANTEED BY A BANK, OTHER
        THAN A SAVINGS BANK, OR BY A TRUST COMPANY OR BY A FIRM HAVING MEMBERSHIP
        ON A
        REGISTERED NATIONAL SECURITIES EXCHANGE.

      

       

      

      
        
           

        

        
          16>

  
    

      Exhibit
        4.1 

       

      REGISTRATION
        RIGHTS AGREEMENT

       

      REGISTRATION
        RIGHTS AGREEMENT
        (this
“Agreement”),
        dated
        as of September 28, 2005, by and between TITAN
        PHARMACEUTICALS, INC.,
        a
        Delaware corporation (the “Company”),
        and
CORNELL
        CAPITAL PARTNERS, LP,
        a
        Delaware limited partnership (the “Investor”).

       

      WHEREAS:

       

      A. In
        connection with the Standby Equity Distribution Agreement by and between
        the
        parties hereto of even date herewith (the “Standby
        Equity Distribution Agreement”),
        the
        Company has agreed, upon the terms and subject to the conditions of the Standby
        Equity Distribution Agreement, to issue and sell to the Investor that number
        of
        shares of the Company’s common stock, par value $0.001 per share (the
“Common
        Stock”),
        which
        can be purchased pursuant to the terms of the Standby Equity Distribution
        Agreement for an aggregate purchase price of up to Thirty Five Million
        Dollars ($35,000,000). Capitalized terms not defined herein shall
        have the
        meaning ascribed to them in the Standby Equity Distribution
        Agreement.

       

      B. To
        induce
        the Investor to execute and deliver the Standby Equity Distribution Agreement,
        the Company has agreed to provide certain registration rights under the
        Securities Act of 1933, as amended, and the rules and regulations thereunder,
        or
        any similar successor statute (collectively, the “Securities
        Act”),
        and
        applicable state securities laws.

       

      NOW,
        THEREFORE,
        in
        consideration of the premises and the mutual covenants contained herein and
        other good and valuable consideration, the receipt and sufficiency of which
        are
        hereby acknowledged, the Company and the Investor hereby agree as
        follows:

       

      1. DEFINITIONS.

       

      As
        used
        in this Agreement, the following terms shall have the following
        meanings:

       

      a. “Person”
        means a
        corporation, a limited liability company, an association, a partnership,
        an
        organization, a business, an individual, a governmental or political subdivision
        thereof or a governmental agency.

       

      b. “Register,”“registered,”
        and
“registration”
        refer
        to a registration effected by preparing and filing one or more Registration
        Statements (as defined below) in compliance with the Securities Act and pursuant
        to Rule 415 under the Securities Act or any successor rule providing for
        offering securities on a continuous or delayed basis (“Rule
        415”),
        and
        the declaration or ordering of effectiveness of such Registration Statement(s)
        by the United States Securities and Exchange Commission (the “SEC”).

       

      c. “Registrable
        Securities”
        means
        the Investor’s Shares, as defined in the Standby Equity Distribution Agreement,
        and shares of Common Stock issuable to the Investor pursuant to the Standby
        Equity Distribution Agreement.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      d. “Registration
        Statement”
        means a
        registration statement under the Securities Act which covers the Registrable
        Securities.

       

      2. REGISTRATION.

       

      a. Mandatory
        Registration.
        The
        Company shall prepare and file with the SEC a Registration Statement on Form
        S-1, SB-2 or on such other form as is available to the Company. The Company
        shall use commercially reasonable efforts to cause such Registration Statement
        to be declared effective by the SEC prior to the first sale to the Investor
        of
        the Company’s Common Stock pursuant to the Standby Equity Distribution
        Agreement. The Company shall cause the Registration Statement to remain
        effective until the full completion of the Commitment Period (as such term
        is
        defined in the Standby Equity Distribution Agreement). 

       

      b. Sufficient
        Number of Shares Registered.
        In the
        event the number of shares available under a Registration Statement filed
        pursuant to Section 2(a) is insufficient to cover all of the Registrable
        Securities pursuant to the Standby Equity Distribution Agreement, the Company
        shall amend the Registration Statement, or file a new Registration Statement,
        or
        both, so as to cover all of such Registrable Securities pursuant to the Standby
        Equity Distribution Agreement as soon as practicable, but in any event not
        later
        than fifteen (15) days after the necessity therefore arises. The Company
        shall
        use commercially reasonable efforts to cause such amendment and/or new
        Registration Statement to become effective as soon as practicable following
        the
        filing thereof. For purposes of the foregoing provision, the number of shares
        available under a Registration Statement shall be deemed “insufficient to cover
        all of the Registrable Securities” if at any time the number of Registrable
        Securities issuable on an Advance Notice Date is greater than the number
        of
        shares available for resale under such Registration Statement.

       

      3. RELATED
        OBLIGATIONS.

       

      a. The
        Company shall keep the Registration Statement effective pursuant to Rule
        415 at
        all times until the date on which the Investor shall have sold all the
        Registrable Securities covered by such Registration Statement (the “Registration
        Period”),
        which
        Registration Statement (including any amendments or supplements thereto and
        prospectuses contained therein) shall not contain any untrue statement of
        a
        material fact or omit to state a material fact required to be stated therein,
        or
        necessary to make the statements therein, in light of the circumstances in
        which
        they were made, not misleading.

       

      b. The
        Company shall prepare and file with the SEC such amendments (including
        post-effective amendments) and supplements to a Registration Statement and
        the
        prospectus used in connection with such Registration Statement, which prospectus
        is to be filed pursuant to Rule 424 promulgated under the Securities Act,
        as may
        be necessary to keep such Registration Statement effective at all times during
        the Registration Period, and, during such period, comply with the provisions
        of
        the Securities Act with respect to the disposition of all Registrable Securities
        of the Company covered by such Registration Statement until such time as
        all of
        such Registrable Securities shall have been disposed of in accordance with
        the
        intended methods of disposition by the seller or sellers thereof as set forth
        in
        such Registration Statement. In the case of amendments and supplements to
        a
        Registration Statement which are required to be filed pursuant to this Agreement
        (including pursuant to this Section 3(b)) by reason of the Company’s filing a
        report on Form 10-K, Form 10-Q or Form 8-K or any analogous report under
        the
        Securities Exchange Act of 1934, as amended (the “Exchange
        Act”),
        the
        Company shall have incorporated such report by reference into the Registration
        Statement, if applicable, or shall file such amendments or supplements with
        the
        SEC on the same day on which the Exchange Act report is filed which created
        the
        requirement for the Company to amend or supplement the Registration
        Statement.

       

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

      c. The
        Company shall furnish to the Investor without charge, (i) at least one copy
        of
        such Registration Statement as declared effective by the SEC and any
        amendment(s) thereto, including financial statements and schedules, all
        documents incorporated therein by reference, all exhibits and each preliminary
        prospectus, (ii) ten (10) copies of the final prospectus included in such
        Registration Statement and all amendments and supplements thereto (or such
        other
        number of copies as such Investor may reasonably request) and (iii) such
        other
        documents as such Investor may reasonably request from time to time in order
        to
        facilitate the disposition of the Registrable Securities owned by such
        Investor.

       

      d. The
        Company shall use its best efforts to (i) register and qualify the Registrable
        Securities covered by a Registration Statement under such other securities
        or
“blue sky” laws of such jurisdictions in the United States as the Investor
        reasonably requests, (ii) prepare and file in those jurisdictions,
        such
        amendments (including post-effective amendments) and supplements to such
        registrations and qualifications as may be necessary to maintain the
        effectiveness thereof during the Registration Period, (iii) take such other
        actions as may be necessary to maintain such registrations and qualifications
        in
        effect at all times during the Registration Period, and (iv) take all other
        actions reasonably necessary or advisable to qualify the Registrable Securities
        for sale in such jurisdictions; provided, however, that the Company shall
        not be
        required in connection therewith or as a condition thereto to (w) make any
        change to its certificate of incorporation or by-laws, (x) qualify to do
        business in any jurisdiction where it would not otherwise be required to
        qualify
        but for this Section 3(d), (y) subject itself to general taxation in any
        such
        jurisdiction, or (z) file a general consent to service of process in any
        such
        jurisdiction. The Company shall promptly notify the Investor of the receipt
        by
        the Company of any notification with respect to the suspension of the
        registration or qualification of any of the Registrable Securities for sale
        under the securities or “blue sky” laws of any jurisdiction in the United States
        or its receipt of actual notice of the initiation or threat of any proceeding
        for such purpose.

       

      e. As
        promptly as practicable after becoming aware of such event or development,
        the
        Company shall notify the Investor in writing of the happening of any event
        as a
        result of which the prospectus included in a Registration Statement, as then
        in
        effect, includes an untrue statement of a material fact or omission to state
        a
        material fact required to be stated therein or necessary to make the statements
        therein, in light of the circumstances under which they were made, not
        misleading (provided that in no event shall such notice contain any material,
        nonpublic information), and promptly prepare a supplement or amendment to
        such
        Registration Statement to correct such untrue statement or omission, and
        deliver
        ten (10) copies of such supplement or amendment to each Investor.
        Notwithstanding any provision of this Agreement to the contrary, if the Company
        makes such a notification, the Company may suspend the use of any prospectus
        contained in any Registration Statement in the event that the Company
        determines, in the exercise of its reasonable discretion, after consultation
        with outside legal counsel, that sales of Registrable Securities thereunder
        could constitute violations of the Securities Act due to the Registration
        Statement containing an untrue statement of a material fact or omission to
        state
        a material fact required to be stated therein or necessary to make the
        statements therein, in light of the circumstances under which they were made,
        not misleading. In each case the Company shall use commercially reasonable
        efforts to remedy the deficiency in the Registration Statement within fifteen
        (15) business days. The Company shall also promptly notify the Investor in
        writing (i) when a prospectus or any prospectus supplement or post-effective
        amendment has been filed, and when a Registration Statement or any
        post-effective amendment has become effective (notification of such
        effectiveness shall be delivered to the Investor by facsimile on the same
        day of
        such effectiveness), (ii) of any request by the SEC for amendments or
        supplements to a Registration Statement or related prospectus or related
        information, and (iii) of the Company’s reasonable determination that a
        post-effective amendment to a Registration Statement would be appropriate.
        

       

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

      f. The
        Company shall use its best efforts to prevent the issuance of any stop order
        or
        other suspension of effectiveness of a Registration Statement, or the suspension
        of the qualification of any of the Registrable Securities for sale in any
        jurisdiction within the United States of America and, if such an order or
        suspension is issued, to obtain the withdrawal of such order or suspension
        at
        the earliest possible moment and to notify the Investor of the issuance of
        such
        order and the resolution thereof or its receipt of actual notice of the
        initiation or threat of any proceeding for such purpose.

       

      g. The
        Company shall make available for inspection by (i) the Investor and (ii)
        one
        firm of accountants or other agents retained by the Investor (collectively,
        the
“Inspectors”)
        all
        pertinent financial and other records, and pertinent corporate documents
        and
        properties of the Company (collectively, the “Records”),
        as
        shall be reasonably deemed necessary by each Inspector, and cause the Company’s
        officers, directors and employees to supply all information which any Inspector
        may reasonably request; provided, however, that each Inspector shall agree,
        and
        the Investor hereby agrees, to hold in strict confidence and shall not make
        any
        disclosure (except to an Investor) or use of any Record or other information
        which the Company determines in good faith to be confidential, and of which
        determination the Inspectors are so notified, unless (a) the disclosure of
        such
        Records is necessary to avoid or correct a misstatement or omission in any
        Registration Statement or is otherwise required under the Securities Act,
        (b)
        the release of such Records is ordered pursuant to a final, non-appealable
        subpoena or order from a court or government body of competent jurisdiction,
        or
        (c) the information in such Records has been made generally available to
        the
        public other than by disclosure in violation of this or any other agreement
        of
        which the Inspector and the Investor has knowledge. The Investor agrees that
        it
        shall, upon learning that disclosure of such Records is sought in or by a
        court
        or governmental body of competent jurisdiction or through other means, give
        prompt notice to the Company and allow the Company, at its expense, to undertake
        appropriate action to prevent disclosure of, or to obtain a protective order
        for, the Records deemed confidential.

       

      h. The
        Company shall hold in confidence and not make any disclosure of information
        concerning the Investor provided to the Company unless (i) disclosure of
        such
        information is necessary to comply with federal or state securities laws,
        (ii)
        the disclosure of such information is necessary to avoid or correct a
        misstatement or omission in any Registration Statement, (iii) the release
        of
        such information is ordered pursuant to a subpoena or other final,
        non-appealable order from a court or governmental body of competent
        jurisdiction, or (iv) such information has been made generally available
        to the
        public other than by disclosure in violation of this Agreement or any other
        agreement. The Company agrees that it shall, upon learning that disclosure
        of
        such information concerning the Investor is sought in or by a court or
        governmental body of competent jurisdiction or through other means, give
        prompt
        written notice to the Investor and allow the Investor, at the Investor’s
        expense, to undertake appropriate action to prevent disclosure of, or to
        obtain
        a protective order for, such information.

       

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

      i. The
        Company shall use its best efforts either to cause all the Registrable
        Securities covered by a Registration Statement (i) to be listed on each
        securities exchange on which securities of the same class or series issued
        by
        the Company are then listed, if any, if the listing of such Registrable
        Securities is then permitted under the rules of such exchange or to secure
        the
        inclusion for quotation on the National Association of Securities Dealers,
        Inc.
        OTC Bulletin Board for such Registrable Securities. The Company shall pay
        all
        fees and expenses in connection with satisfying its obligation under this
        Section 3(j).

       

      j. The
        Company shall cooperate with the Investor to the extent applicable, to
        facilitate the timely preparation and delivery of certificates (not bearing
        any
        restrictive legend) representing the Registrable Securities to be offered
        pursuant to a Registration Statement and enable such certificates to be in
        such
        denominations or amounts, as the case may be, as the Investor may reasonably
        request and registered in such names as the Investor may request provided
        that
        the Investor hereby agrees not to sell such securities except in compliance
        with
        the Securities Act and the Rules and Regulations promulgated thereunder,
        including the prospectus delivery requirements, if applicable.

       

      k. Subject
        to Section 3.d. of this Agreement, the Company shall use its best efforts
        to
        cause the Registrable Securities covered by the applicable Registration
        Statement to be registered with or approved by such other governmental agencies
        or authorities as may be necessary to consummate the disposition of such
        Registrable Securities.

       

      l. The
        Company shall make generally available to its security holders as soon as
        practical, but not later than ninety (90) days after the close of the period
        covered thereby, an earnings statement (in form complying with the provisions
        of
        Rule 158 under the Securities Act) covering a twelve-month period beginning
        not
        later than the first day of the Company’s fiscal quarter next following the
        effective date of the Registration Statement.

       

      m. The
        Company shall otherwise use its best efforts to comply with all applicable
        rules
        and regulations of the SEC in connection with any registration
        hereunder.

       

      n. Within
        two (2) business days after a Registration Statement which covers Registrable
        Securities is ordered effective by the SEC, the Company shall deliver, and
        shall
        cause legal counsel for the Company to deliver, to the transfer agent for
        such
        Registrable Securities (with copies to the Investor) confirmation that such
        Registration Statement has been declared effective by the SEC in the form
        attached hereto as Exhibit
        A.

       

      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

      4. OBLIGATIONS
        OF THE INVESTOR.

       

      The
        Investor agrees that, upon receipt of any notice from the Company of the
        happening of any event of the kind described in Section 3(f) or the first
        sentence of 3(e), the Investor will immediately discontinue disposition of
        Registrable Securities pursuant to any Registration Statement(s) covering
        such
        Registrable Securities until the Investor’s receipt of the copies of the
        supplemented or amended prospectus contemplated by Section 3(e) or receipt
        of
        notice that no supplement or amendment is required. Notwithstanding anything
        to
        the contrary, the Company shall cause its transfer agent to deliver unlegended
        certificates for shares of Common Stock to a transferee of the Investor in
        accordance with the terms of the Standby Equity Distribution Agreement in
        connection with any sale of Registrable Securities with respect to which
        the
        Investor has entered into a contract for sale prior to the Investor’s receipt of
        a notice from the Company of the happening of any event of the kind described
        in
        Section 3(f) or the first sentence of 3(e) and for which the Investor has
        not
        yet settled.

       

      5. EXPENSES
        OF REGISTRATION.

       

      All
        expenses incurred in connection with registrations, filings or qualifications
        pursuant to Sections 2 and 3, including, without limitation, all registration,
        listing and qualifications fees, printers, legal and accounting fees shall
        be
        paid by the Company. 

       

      6. INDEMNIFICATION.

       

      With
        respect to Registrable Securities which are included in a Registration Statement
        under this Agreement:

       

      a. To
        the
        fullest extent permitted by law, the Company will, and hereby does, indemnify,
        hold harmless and defend the Investor, the directors, officers, partners,
        employees, agents, representatives of, and each Person, if any, who controls
        the
        Investor within the meaning of the Securities Act or the Exchange Act (each,
        an
“Indemnified
        Person”),
        against any losses, claims, damages, liabilities, judgments, fines, penalties,
        charges, costs, reasonable attorneys’ fees, amounts paid in settlement or
        expenses, joint or several (collectively, “Claims”)
        incurred in investigating, preparing or defending any action, claim, suit,
        inquiry, proceeding, investigation or appeal taken from the foregoing by
        or
        before any court or governmental, administrative or other regulatory agency,
        body or the SEC, whether pending or threatened, whether or not an indemnified
        party is or may be a party thereto (“Indemnified
        Damages”),
        to
        which any of them may become subject insofar as such Claims (or actions or
        proceedings, whether commenced or threatened, in respect thereof) arise out
        of
        or are based upon: (i) any untrue statement or alleged untrue statement of
        a
        material fact in a Registration Statement or any post-effective amendment
        thereto or in any filing made in connection with the qualification of the
        offering under the securities or other “blue sky” laws of any jurisdiction in
        which Registrable Securities are offered (“Blue
        Sky Filing”),
        or
        the omission or alleged omission to state a material fact required to be
        stated
        therein or necessary to make the statements therein not misleading;
        (ii) any untrue statement or alleged untrue statement of a material
        fact
        contained in any final prospectus (as amended or supplemented, if the Company
        files any amendment thereof or supplement thereto with the SEC) or the omission
        or alleged omission to state therein any material fact necessary to make
        the
        statements made therein, in light of the circumstances under which the
        statements therein were made, not misleading; or (iii) any violation or alleged
        violation by the Company of the Securities Act, the Exchange Act, any other
        law,
        including, without limitation, any state securities law, or any rule or
        regulation there under relating to the offer or sale of the Registrable
        Securities pursuant to a Registration Statement (the matters in the foregoing
        clauses (i) through (iii) being, collectively, “Violations”)
        except
        to the extent that such Violation occurs in reliance upon and in conformity
        with
        written information furnished to the Company by the Investor or the Placement
        Agent pursuant to the Placement Agent Agreement dated as of the date hereof
        by
        and among the Company, the Investor and the Placement Agent named therein
        expressly for use in connection with such Registration Statement. The Company
        shall reimburse the Investor and each such controlling person promptly as
        such
        expenses are incurred and are due and payable, for any reasonable legal fees
        or
        disbursements or other reasonable expenses incurred by them in connection
        with
        investigating or defending any such Claim. Notwithstanding anything to the
        contrary contained herein, the indemnification agreement contained in this
        Section 6(a): (x) shall not apply to a Claim by an Indemnified Person arising
        out of or based upon a Violation which occurs in reliance upon and in conformity
        with information furnished in writing to the Company by such Indemnified
        Person
        expressly for use in connection with the preparation of the Registration
        Statement or any such amendment thereof or supplement thereto; (y) shall
        not be
        available to the extent such Claim is based on a failure of the Investor
        to
        deliver or to cause to be delivered the prospectus made available by the
        Company, if such prospectus was timely made available by the Company pursuant
        to
        Section 3(e); and (z) shall not apply to amounts paid in settlement of any
        Claim
        if such settlement is effected without the prior written consent of the Company,
        which consent shall not be unreasonably withheld. Such indemnity shall remain
        in
        full force and effect regardless of any investigation made by or on behalf
        of
        the Indemnified Person. Notwithstanding anything to the contrary contained
        herein, the indemnification agreement contained in this Section 6(a) with
        respect to any prospectus shall not inure to the benefit of any Indemnified
        Person if the untrue statement or omission of material fact contained in
        the
        prospectus was corrected and such new prospectus was delivered to the Investor
        prior to the Investor’s use of the prospectus to which the Claim
        relates.

       

      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

      b. In
        connection with a Registration Statement, the Investor agrees to indemnify,
        hold
        harmless and defend, to the same extent and in the same manner as is set
        forth
        in Section 6(a), the Company, each of its directors, each of its officers
        who
        signs the Registration Statement and each Person, if any, who controls the
        Company within the meaning of the Securities Act or the Exchange Act (each
        an
“Indemnified
        Party”),
        against any Claim or Indemnified Damages to which any of them may become
        subject, under the Securities Act, the Exchange Act or otherwise, insofar
        as
        such Claim or Indemnified Damages arise out of or is 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 to
        the
        Company by the Investor or the Placement Agent pursuant to this Agreement,
        the
        Standby Equity Distribution Agreement, or the Placement Agent Agreement dated
        as
        of the date hereof by and among the Company, the Investor and the Placement
        Agent named therein expressly for use in connection with such Registration
        Statement; and, subject to Section 6(d), the Investor will reimburse any
        reasonable legal or other expenses reasonably incurred by them in connection
        with investigating or defending any such Claim; provided, however, that the
        indemnity agreement contained in this Section 6(b) and the agreement with
        respect to contribution contained in Section 7 shall not apply to amounts
        paid
        in settlement of any Claim if such settlement is effected without the prior
        written consent of the Investor, which consent shall not be unreasonably
        withheld; provided, further, however, that the Investor shall be liable under
        this Section 6(b) for only that amount of a Claim or Indemnified Damages
        as does
        not exceed the net proceeds to the Investor as a result of the sale of
        Registrable Securities pursuant to such Registration Statement. Such indemnity
        shall remain in full force and effect regardless of any investigation made
        by or
        on behalf of such Indemnified Party. Notwithstanding anything to the contrary
        contained herein, the indemnification agreement contained in this Section
        6(b)
        with respect to any prospectus shall not inure to the benefit of any Indemnified
        Party if the untrue statement or omission of material fact contained in the
        prospectus was corrected and such new prospectus was delivered to the Investor
        prior to the Investor’s use of the prospectus to which the Claim
        relates.

       

      c. Promptly
        after receipt by an Indemnified Person or Indemnified Party under this Section
        6
        of notice of the commencement of any action or proceeding (including any
        governmental action or proceeding) involving a Claim, such Indemnified Person
        or
        Indemnified Party shall, if a Claim in respect thereof is to be made against
        any
        indemnifying party under this Section 6, 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 noticed, to
        assume
        control of the defense thereof with counsel mutually satisfactory to the
        indemnifying party and the Indemnified Person or the Indemnified Party, as
        the
        case may be; provided, however, that an Indemnified Person or Indemnified
        Party
        shall have the right to retain its own counsel with the reasonable fees and
        expenses of not more than one counsel for such Indemnified Person or Indemnified
        Party to be paid by the indemnifying party, if, in the reasonable opinion
        of
        counsel retained by the indemnifying party, the representation by such counsel
        of the Indemnified Person or Indemnified Party and the indemnifying party
        would
        be inappropriate due to actual or potential differing interests between such
        Indemnified Person or Indemnified Party and any other party represented by
        such
        counsel in such proceeding. The Indemnified Party or Indemnified Person shall
        cooperate fully with the indemnifying party in connection with any negotiation
        or defense of any such action or claim by the indemnifying party and shall
        furnish to the indemnifying party all information reasonably available to
        the
        Indemnified Party or Indemnified Person which relates to such action or claim.
        The indemnifying party shall keep the Indemnified Party or Indemnified Person
        fully apprised at all times as to the status of the defense or any settlement
        negotiations with respect thereto. No indemnifying party shall be liable
        for any
        settlement of any action, claim or proceeding effected without its prior
        written
        consent, provided, however, that the indemnifying party shall not unreasonably
        withhold, delay or condition its consent. No indemnifying party shall, without
        the prior written consent of the Indemnified Party or Indemnified Person,
        consent to entry of any judgment or enter into any settlement or other
        compromise which does not include as an unconditional term thereof the giving
        by
        the claimant or plaintiff to such Indemnified Party or Indemnified Person
        of a
        release from all liability in respect to such claim or litigation. Following
        indemnification as provided for hereunder, the indemnifying party shall be
        subrogated to all rights of the Indemnified Party or Indemnified Person with
        respect to all third parties, firms or corporations relating to the matter
        for
        which indemnification has been made. The failure to deliver written notice
        to
        the indemnifying party within a reasonable time of the commencement of any
        such
        action shall not relieve such indemnifying party of any liability to the
        Indemnified Person or Indemnified Party under this Section 6, except to the
        extent that the indemnifying party is prejudiced in its ability to defend
        such
        action.

       

      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

      

      d. The
        indemnification required by this Section 6 shall be made by periodic payments
        of
        the amount thereof during the course of the investigation or defense, as
        and
        when bills are received or Indemnified Damages are incurred.

       

      e. The
        indemnity agreements contained herein shall be in addition to (i) any cause
        of
        action or similar right of the Indemnified Party or Indemnified Person against
        the indemnifying party or others, and (ii) any liabilities the indemnifying
        party may be subject to pursuant to the law.

       

      7. CONTRIBUTION.

       

      To
        the
        extent any indemnification by an indemnifying party is prohibited or limited
        by
        law, the indemnifying party agrees to make the maximum contribution with
        respect
        to any amounts for which it would otherwise be liable under Section 6 to
        the
        fullest extent permitted by law; provided, however, that: (i) no seller of
        Registrable Securities guilty of fraudulent misrepresentation (within the
        meaning of Section 11(f) of the Securities Act) shall be entitled to
        contribution from any seller of Registrable Securities who was not guilty
        of
        fraudulent misrepresentation; and (ii) contribution by any seller of Registrable
        Securities shall be limited in amount to the net amount of proceeds received
        by
        such seller from the sale of such Registrable Securities.

       

      8. REPORTS
        UNDER THE EXCHANGE ACT.

       

      With
        a
        view to making available to the Investor the benefits of Rule 144 promulgated
        under the Securities Act or any similar rule or regulation of the SEC that
        may
        at any time permit the Investors to sell securities of the Company to the
        public
        without registration (“Rule
        144”)
        the
        Company agrees to:

       

      a. make
        and
        keep public information available, as those terms are understood and defined
        in
        Rule 144;

       

      b. file
        with
        the SEC in a timely manner all reports and other documents required of the
        Company under the Securities Act and the Exchange Act so long as the Company
        remains subject to such requirements (it being understood that nothing herein
        shall limit the Company’s obligations under Section 6.3 of the Standby Equity
        Distribution Agreement) and the filing of such reports and other documents
        is
        required for the applicable provisions of Rule 144; and

       

      c. furnish
        to the Investor so long as the Investor owns Registrable Securities, promptly
        upon request, (i) a written statement by the Company that it has complied
        with
        the reporting requirements of Rule 144, the Securities Act and the Exchange
        Act,
        (ii) 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 (iii) such
        other
        information as may be reasonably requested to permit the Investor to sell
        such
        securities pursuant to Rule 144 without registration.

       

      
        
          
          

        

        
          8

          
            

          

        

        
          
          

        

      

      9. AMENDMENT
        OF REGISTRATION RIGHTS.

       

      Provisions
        of this Agreement may be amended and the observance thereof may be waived
        (either generally or in a particular instance and either retroactively or
        prospectively), only by a written agreement between the Company and the
        Investor. Any amendment or waiver effected in accordance with this Section
        9
        shall be binding upon the Investor and the Company. No consideration shall
        be
        offered or paid to any Person to amend or consent to a waiver or modification
        of
        any provision of any of this Agreement unless the same consideration also
        is
        offered to all of the parties to this Agreement.

       

      10. MISCELLANEOUS.

       

      a. A
        Person
        is deemed to be a holder of Registrable Securities whenever such Person owns
        or
        is deemed to own of record such Registrable Securities. If the Company receives
        conflicting instructions, notices or elections from two or more Persons with
        respect to the same Registrable Securities, the Company shall act upon the
        basis
        of instructions, notice or election received from the registered owner of
        such
        Registrable Securities.

       

      b. Any
        notices, consents, waivers or other communications required or permitted
        to be
        given under the terms of this Agreement must be in writing and will be deemed
        to
        have been delivered: (i) upon receipt, when delivered personally; (ii) upon
        receipt, when sent by facsimile (provided confirmation of transmission is
        mechanically or electronically generated and kept on file by the sending
        party);
        or (iii) one business day after deposit with a nationally recognized overnight
        delivery service, in each case properly addressed to the party to receive
        the
        same. The addresses and facsimile numbers for such communications shall
        be:

       

      
        	
                If
                  to the Company, to:

              	
                Titan
                  Pharmaceuticals, Inc.

              
	 	
                400
                  Oyster Point Blvd. - Suite 505

              
	 	
                San
                  Francisco, CA 94080

              
	 	
                Attention: Robert
                  E. Farrell, Chief Financial Officer

              
	 	
                Telephone: (650)
                  244-4990

              
	 	
                Facsimile: (866)
                  449-8519

              
	 	 
	
                With
                  a copy to:

              	
                Loeb
                  & Loeb, LLP

              
	 	
                345
                  Park Avenue

              
	 	
                New
                  York, NY 10154-0037

              
	 	
                Attention: Fran
                  Stoller

              
	 	
                Telephone:
                   (212)
                  407-4935

              
	 	
                Facsimile:
                   (212)
                  214-0706

              
	 	 
	
                If
                  to the Investor, to:

              	
                Cornell
                  Capital Partners, LP

              
	 	
                101
                  Hudson Street - Suite 3700

              
	 	
                Jersey
                  City, New Jersey 07302

              
	 	
                Attention: Mark
                  Angelo

              
	 	
                Portfolio
                  Manager

              
	 	
                Telephone: (201)
                  985-8300

              
	 	
                Facsimile: (201)
                  985-8266

              
	 	 
	
                With
                  a copy to:

              	
                Cornell
                  Capital Partners, LP

              
	 	
                101
                  Hudson Street - Suite 3700

              
	 	
                Jersey
                  City, NJ 07302

              
	 	
                Attention: David
                  Gonzalez, Esq.

              
	 	
                Telephone: (201)
                  985-8300

              
	 	
                Facsimile: (201)
                  985-8266

              
	 	 
	 	 

      

       

      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      

      Any
        party may change its address by providing written
        notice to the other parties hereto at least five days prior to the effectiveness
        of such change. Written confirmation of receipt (A) given by the recipient
        of
        such notice, consent, waiver or other communication, (B) mechanically or
        electronically generated by the sender’s facsimile machine containing the time,
        date, recipient facsimile number and an image of the first page of such
        transmission or (C) provided by a courier or overnight courier service shall
        be
        rebuttable evidence of personal service, receipt by facsimile or receipt
        from a
        nationally recognized overnight delivery service in accordance with clause
        (i),
        (ii) or (iii) above, respectively.

       

      c. Failure
        of any party to exercise any right or remedy under this Agreement or otherwise,
        or delay by a party in exercising such right or remedy, shall not operate
        as a
        waiver thereof.

       

      d. The
        corporate laws of the State of New Jersey shall govern all issues concerning
        the
        relative rights of the Company and the Investor. All other questions concerning
        the construction, validity, enforcement and interpretation of this Agreement
        shall be governed by the internal laws of the State of New Jersey, without
        giving effect to any choice of law or conflict of law provision or rule (whether
        of the State of New Jersey or any other jurisdiction) that would cause the
        application of the laws of any jurisdiction other than the State of New Jersey.
        Each party hereby irrevocably submits to the non-exclusive jurisdiction of
        the
        Superior Courts of the State of New Jersey, sitting in Hudson County, New
        Jersey
        and the Federal District Court for the District of New Jersey sitting in
        Newark,
        New Jersey, for the adjudication of any dispute hereunder or in connection
        herewith or with any transaction contemplated hereby or discussed herein,
        and
        hereby irrevocably waives, and agrees not to assert in any suit, action or
        proceeding, any claim that it is not personally subject to the jurisdiction
        of
        any such court, that such suit, action or proceeding is brought in an
        inconvenient forum or that the venue of such suit, action or proceeding is
        improper. Each party hereby irrevocably waives personal service of process
        and
        consents to process being served in any such suit, action or proceeding by
        mailing a copy thereof to such party at the address for such notices to it
        under
        this Agreement and agrees that such service shall constitute good and sufficient
        service of process and notice thereof. Nothing contained herein shall be
        deemed
        to limit in any way any right to serve process in any manner permitted by
        law.
        If any provision of this Agreement shall be invalid or unenforceable in any
        jurisdiction, such invalidity or unenforceability shall not affect the validity
        or enforceability of the remainder of this Agreement in that jurisdiction
        or the
        validity or enforceability of any provision of this Agreement in any other
        jurisdiction. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE,
        AND
        AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE
        HEREUNDER OR IN CONNECTION HEREWITH OR ARISING OUT OF THIS AGREEMENT OR ANY
        TRANSACTION CONTEMPLATED HEREBY.

       

      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

      

      e. This
        Agreement, the Standby Equity Distribution Agreement, and the Placement Agent
        Agreement constitute 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
        and
        therein. This Agreement, the Standby Equity Distribution Agreement, and the
        Placement Agent Agreement supersede all prior agreements and understandings
        among the parties hereto with respect to the subject matter hereof and
        thereof.

       

      f. This
        Agreement shall inure to the benefit of and be binding upon the permitted
        successors and assigns of each of the parties hereto.

       

      g. The
        headings in this Agreement are for convenience of reference only and shall
        not
        limit or otherwise affect the meaning hereof.

       

      h. This
        Agreement may be executed in identical counterparts, each of which shall
        be
        deemed an original but all of which shall constitute one and the same agreement.
        This Agreement, once executed by a party, may be delivered to the other party
        hereto by facsimile transmission of a copy of this Agreement bearing the
        signature of the party so delivering this Agreement.

       

      i. Each
        party shall do and perform, or cause to be done and performed, all such further
        acts and things, and shall execute and deliver all such other agreements,
        certificates, instruments and documents, as the other 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.

       

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

       

      k. 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.

       

      

      

      [REMAINDER
        OF PAGE INTENTIONALLY LEFT BLANK]

      

      

      
         

        
          
            
            

          

          
            11

            
              

            

          

          
            
            

          

        

      

      

      IN
        WITNESS WHEREOF,
        the
        parties have caused this Registration Rights Agreement to be duly executed
        as of
        day and year first above written.

       

      
        	 	
                Titan
                  Pharmaceuticals, Inc.

              	 
	 	 	 
	 	
                By:        

              	 
	 	
                Name: 

              	 
	 	
                Title: 

              	 
	 	 	 
	 	 	 
	 	
                Cornell
                  Capital Partners, LP

              	 
	 	 	 
	 	
                By: Yorkville
                  Advisors, LLC

              	 
	 	
                Its: General
                  Partner

              	 
	 	 	 
	 	
                By:      

              	 
	 	
                Name: Mark
                  Angelo

              	 
	 	
                Title: Portfolio
                  Manager

              	 
	 	 	 

      

      

       

      
        
          
          

        

        
          12

          
            

          

        

        
          
          

        

      

      

      EXHIBIT
        A

      FORM
        OF NOTICE OF EFFECTIVENESS

      OF
        REGISTRATION STATEMENT

       

      

      

      Attention: 

      

      Re: TITAN
        PHARMACEUTICALS, INC.

      

      Ladies
        and Gentlemen:

      

      We
        are
        counsel to Titan Pharmaceuticals, Inc. (the “Company”),
        and
        have represented the Company in connection with that certain Standby Equity
        Distribution Agreement (the “Standby
        Equity Distribution Agreement”)
        entered into by and between the Company and Cornell Capital Partners, LP
        (the
“Investor”)
        pursuant to which the Company issued to the Investor shares of its Common
        Stock,
        par value $0.001 per share (the “Common
        Stock”).
        Pursuant to the Standby Equity Distribution Agreement, the Company also has
        entered into a Registration Rights Agreement with the Investor (the
“Registration
        Rights Agreement”)
        pursuant to which the Company agreed, among other things, to register the
        Registrable Securities (as defined in the Registration Rights Agreement)
        under
        the Securities Act of 1933, as amended (the “Securities
        Act”).
        In
        connection with the Company’s obligations under the Registration Rights
        Agreement, on ____________ ____, the Company filed a Registration Statement
        on
        Form ________ (File No. 333-_____________) (the “Registration
        Statement”)
        with
        the Securities and Exchange Commission (the “SEC”)
        relating to the Registrable Securities which names the Investor as a selling
        stockholder thereunder.

       

      In
        connection with the foregoing, we advise you that a member of the SEC’s staff
        has advised us by telephone that the SEC has entered an order declaring the
        Registration Statement effective under the Securities Act at [ENTER
        TIME OF EFFECTIVENESS]
        on
[ENTER
        DATE OF EFFECTIVENESS]
        and we
        have no knowledge, after telephonic inquiry of a member of the SEC’s staff, that
        any stop order suspending its effectiveness has been issued or that any
        proceedings for that purpose are pending before, or threatened by, the SEC
        and
        the Registrable Securities are available for resale under the Securities
        Act
        pursuant to the Registration Statement.

       

      Very
        truly yours,

      

      

      

      By:_________________________________      

      

      cc: Cornell
        Capital Partners, LP

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