Securities Purchase Agreement and Warrants

Securities Purchase Agreement and Warrants

This Securities Purchase Agreement and Warrants (the "Agreement") is made as of by and between , a corporation organized under the laws of , with a principal place of business at (the "Company"), and , with an address at (the "Purchaser").

RECITALS

WHEREAS, the Company desires to issue and sell to the Purchaser, and the Purchaser desires to purchase from the Company, shares of the Company's capital stock together with warrants to purchase additional shares, on the terms and conditions set forth herein.

WHEREAS, the parties intend that the securities sold pursuant to this Agreement be sold in a private placement transaction and that the Purchaser is acquiring such securities for investment for its own account and not with a view to distribution.

WHEREAS, concurrently with the purchase of the Securities, the Company will issue Warrants to the Purchaser evidencing the right to purchase additional shares on the terms set forth herein.

NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained, the parties agree as follows:

1. DEFINITIONS

1.1 "Securities" shall mean the shares of to be issued to Purchaser under this Agreement and any Warrant Shares issued upon exercise of the Warrants.

1.2 "Purchase Price" shall mean the aggregate amount payable by the Purchaser at the Closing, equal to $ .

1.3 "Warrants" shall mean the warrants issued by the Company to the Purchaser under this Agreement, exercisable to purchase up to shares at an exercise price of $ per share and otherwise on the terms set forth in Section 7.

2. PURCHASE AND SALE

2.1 Sale of Securities. Subject to the terms and conditions of this Agreement, at the Closing the Company shall sell, issue and deliver to the Purchaser, and the Purchaser shall purchase from the Company, shares of the Securities at a purchase price of $ per share (the "Price Per Share"), for an aggregate Purchase Price as set forth above.

2.2 Delivery of Warrants. Contemporaneously with the issuance of the Securities, the Company shall issue to the Purchaser the Warrants in substantially the form attached hereto as Exhibit A, each exercisable for shares on the terms set forth therein.

3. CLOSING

3.1 Closing. The closing of the transactions contemplated by this Agreement ("Closing") shall take place on at such place or by electronic transfer as the parties may agree, unless otherwise mutually agreed in writing.

3.2 Deliveries at Closing. At the Closing, (a) the Purchaser shall deliver the Purchase Price by wire transfer or other immediately available funds, and (b) the Company shall deliver certificates or evidence of issuance of the Securities and the Warrants, free and clear of all liens and encumbrances, duly authorized and validly issued.

4. REPRESENTATIONS AND WARRANTIES OF THE COMPANY

The Company represents and warrants to the Purchaser that, as of the date hereof and as of the Closing date: (a) Organization and Qualification: the Company is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization and has full corporate power to own its properties and to carry on its business as presently conducted; (b) Authorization: this Agreement and the documents to be delivered by the Company at the Closing have been duly authorized by all necessary corporate action; (c) Valid Issuance: upon issuance and delivery in accordance with the terms hereof, the Securities and the Warrant Shares (if issued upon valid exercise of the Warrants) will be duly authorized, validly issued, fully paid and non-assessable and free of preemptive or similar rights; (d) No Conflict: the execution, delivery and performance of this Agreement and the issuance of the Securities will not (i) violate the Certificate or Articles of Incorporation or Bylaws, (ii) violate any agreement or instrument binding on the Company, or (iii) require any consent or approval of any governmental authority except as set forth on Exhibit B.

5. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER

The Purchaser represents and warrants to the Company that: (a) Organization and Authority: if an entity, the Purchaser is duly organized and has full power and authority to enter into and perform this Agreement; (b) Investment Purpose: the Purchaser is acquiring the Securities and the Warrants for investment for its own account and not with a view to distribution; (c) Accredited Investor Status: the Purchaser represents that it is an accredited investor under applicable securities laws and has the knowledge and experience to evaluate the risks of the investment. The Purchaser further acknowledges that the Securities have not been registered under applicable securities laws and understands the restrictions on transfer.

6. COVENANTS

6.1 Conduct of Business. From the date hereof through the Closing, the Company shall operate in the ordinary course of business and shall use commercially reasonable efforts to preserve intact its business organization and assets and to preserve the rights and goodwill of its customers, suppliers and others with whom it has business relationships.

6.2 Board and Shareholder Approvals. The Company shall obtain all corporate approvals necessary to authorize the issuance of the Securities and the Warrants and to effect the transactions contemplated by this Agreement.

7. TERMS OF THE WARRANTS

7.1 Form and Exercise. The Warrants shall be in registered form and shall be exercisable in whole or in part by the holder delivering a duly executed exercise notice to the Company together with payment of the aggregate exercise price. Exercise notices shall specify the number of Warrant Shares to be purchased. Fractional shares resulting from exercise shall be settled in cash.

7.2 Term and Adjustment. The Warrants shall have a term of months from the date of issuance. The exercise price and number of Warrant Shares shall be subject to standard anti-dilution adjustments for stock splits, reverse splits, subdivisions and combinations, but not for issuances of additional shares or price-based adjustments except as expressly provided herein.

8. INDEMNIFICATION

8.1 Company Indemnification. The Company shall indemnify, defend and hold harmless the Purchaser and its officers, directors and affiliates from and against all losses, claims, damages, liabilities and expenses (including reasonable attorneys' fees) arising out of any breach of any representation, warranty or covenant of the Company contained in this Agreement.

8.2 Purchaser Indemnification. The Purchaser shall indemnify, defend and hold harmless the Company and its officers, directors and affiliates from and against all losses, claims, damages, liabilities and expenses arising out of any breach of any representation, warranty or covenant of the Purchaser contained in this Agreement or any transfer or disposition of the Securities in violation of applicable securities laws.

9. REMEDIES; SPECIFIC PERFORMANCE

The parties agree that a breach of this Agreement by either party may cause irreparable harm to the other for which monetary damages would be an inadequate remedy; accordingly, in addition to any other remedies available at law or in equity, the non-breaching party shall be entitled to seek injunctive relief and specific performance.

10. CONDITIONS TO CLOSING

The parties' obligations to consummate the Closing are subject to customary conditions including, without limitation: accuracy of representations and warranties as of the Closing date; performance by the other party of its covenants and agreements; delivery of certificates, opinion letters and other customary documents; and absence of injunctive relief or other legal restraint preventing the transactions.

11. TERMINATION

This Agreement may be terminated prior to the Closing by mutual written consent of the parties, or by either party if the Closing has not occurred by , provided that the terminating party is not in material breach of any of its representations, warranties or covenants under this Agreement.

12. NOTICES

Notices shall be in writing and shall be deemed given when delivered personally, by overnight courier, by confirmed facsimile or electronic transmission with receipt confirmed, or three business days after deposit in the United States mail, postage prepaid, certified or registered mail, return receipt requested, to the addresses set forth above or to such other address as a party may designate by notice.

13. AMENDMENTS; WAIVER

No provision of this Agreement may be amended, waived or modified except by written instrument signed by the party against whom enforcement of such amendment, waiver or modification is sought. No failure or delay by a party in exercising any right shall operate as a waiver of such right.

14. GOVERNING LAW

This Agreement shall be governed by and construed in accordance with the laws of the State of , without regard to principles of conflicts of laws.

15. ENTIRE AGREEMENT; SEVERABILITY

This Agreement, including the Exhibits and Schedules hereto, constitutes the entire agreement among the parties with respect to the subject matter hereof and supersedes all prior agreements and understandings. If any provision of this Agreement is held to be invalid or unenforceable, the remaining provisions shall remain in full force and effect.

16. COUNTERPARTS

This Agreement may be executed in one or more counterparts, each of which shall be deemed an original and all of which taken together shall constitute one instrument. Signatures transmitted by electronic means shall be deemed to be originals for all purposes.

17. MISCELLANEOUS

The headings in this Agreement are for convenience of reference only and shall not affect the interpretation of this Agreement. Each party acknowledges that it has had the opportunity to consult counsel of its choice with respect to this Agreement.

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