SECURITIES PURCHASE AGREEMENT

This   Securities   Purchase   Agreement   (this   “ Agreement ” )   is   dated   as   of     May   6,   2019,

between    Parallax    Health    Sciences,    Inc.,    a    Nevada    corporation    (the    “ Company ” ),    and    each

purchaser   identified   on   the   signature   pages   hereto   (each,   including   its   successors   and   assigns,   a

“ Purchaser ” and collectively, the “ Purchasers ” ).

WHEREAS,   subject   to   the   terms   and   conditions   set   forth   in   this   Agreement   and   pursuant

to Section 4(a)(2) of the Securities Act of 1933, as amended (the “ Securities Act ” ), and Rule 506

promulgated  thereunder,  the  Company  desires  to  issue  and  sell   to   each   Purchaser,   and   each

Purchaser,   severally   and   not   jointly,   desires   to   purchase   from   the   Company,   securities   of   the

Company as more fully described in this Agreement.

NOW,   THEREFORE,   IN   CONSIDERATION   of   the   mutual   covenants   contained   in   this

Agreement, and for other good and valuable consideration, the receipt and adequacy of which are

hereby acknowledged, the Company and each Purchaser agree as follows:

ARTICLE I.

DEFINITIONS

1.1

Definitions.   In   addition   to   the   terms   defined   elsewhere   in   this   Agreement,   for   all

purposes of this Agreement, the following terms have the meanings set forth in this Section 1.1:

“ Acquiring Person ” shall have the meaning ascribed to such term in Section 4.5.

“ Action ” shall have the meaning ascribed to such term in Section 3.1(j).

“ Affiliate ”  means  any  Person  that,  directly  or  indirectly  through  one  or  more

intermediaries,   controls   or   is   controlled   by   or   is   under   common   control   with   a   Person,   as

such terms are used in and construed under Rule 405 under the Securities Act.

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

“ Business   Day ”   means   any   day   except   any   Saturday,   any   Sunday,   any   day   which

is   a   federal   legal   holiday   in   the   United   States   or   any   day   on   which   banking   institutions   in

the   State   of   New   York   are   authorized   or   required   by   law   or   other   governmental   action   to

close.

“ Closing Dates ” means the First Closing Date and the Second Closing Date.

“ Closings ”   means   the   First   Closing   and   the   Second   Closing   of   the   purchase   and

sale of the Securities pursuant to Section 2.1.

“ Commission ” means the United States Securities and Exchange Commission.

“ Common Stock ” means the common stock of the Company, par value $0.001 per

share,  and  any  other  class  of  securities  into  which  such  securities  may  hereafter  be

reclassified or changed.

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“ Common    Stock    Equivalents ”    means    any    securities    of    the    Company    or    the

Subsidiaries which would entitle the holder thereof to acquire at any time Common Stock,

including,   without   limitation,   any   debt,   preferred   stock,   right,   option,   warrant   or   other

instrument   that   is   at   any   time   convertible   into   or   exercisable   or   exchangeable   for,   or

otherwise entitles the holder thereof to receive, Common Stock.

“ Company     Counsel ”     means     ____________,     with     offices     located     at

_____________.

“ Disclosure Schedules ” means the Disclosure Schedules of the Company delivered

concurrently herewith.

“ Disclosure   Time ”   means,   (i)   if   this   Agreement   is   signed   on   a   day   that   is   not   a

Trading Day or after 9:00 a.m. (New York City time) and before midnight (New York City

time)    on    any    Trading    Day,    9:01    a.m.    (New    York    City    time)    on    the    Trading    Day

immediately following the date hereof, [unless otherwise instructed as to an earlier time by

the   Placement   Agent,   and   (ii)   if   this   Agreement   is   signed   between   midnight   (New   York

City time) and 9:00 a.m. (New York City time) on any Trading Day, no later than 9:01 a.m.

(New York City time) on the date hereof[, unless otherwise instructed as to an earlier time

by the Placement Agent.

“ Effective   Date ”   means   the   earliest   of   the   date   that   (a)   the   initial   Registration

Statement has been declared effective by the Commission, (b) all of the Shares and Warrant

Shares   have been   sold   pursuant   to   Rule   144   or   may   be   sold   pursuant   to   Rule   144   without

the requirement for the Company to be in compliance with the current public information

required under Rule 144 and without volume or manner-of-sale restrictions,  (c) following

the   one   year   anniversary   of   the   last   Closing   Date   provided   that   a   holder   of   Shares   or

Warrant   Shares   is   not   an   Affiliate   of   the   Company,   or   (d)   all   of   the   Shares   and   Warrant

Shares may be sold pursuant to an exemption from registration under Section 4(a)(1) of the

Securities   Act   without   volume   or   manner-of-sale   restrictions   and   Company   Counsel   has

delivered   to   such   holders   a   standing   written   unqualified   opinion   that   resales   may   then   be

made by such holders of the Shares and Warrant Shares pursuant to such exemption which

opinion shall be in form and substance reasonably acceptable to such holders.

“ EGS ”   means   Ellenoff   Grossman   &   Schole   LLP,   with   offices   located   at   1345

Avenue of the Americas, New York, New York 10105-0302.

“ Evaluation Date ” shall have the meaning ascribed to such term in Section 3.1(s).

“ Exchange Act ” means the Securities Exchange Act of 1934, as amended, and the

rules and regulations promulgated thereunder.

“ Exempt   Issuance ”   means   the   issuance   of   (a)   shares   of   Common   Stock   or   options

to   employees,   officers   or   directors   of   the   Company   pursuant   to   any   stock   or   option   plan

duly   adopted   for   such   purpose,   by   a   majority   of   the   non-employee   members   of   the   Board

of   Directors   or   a   majority   of   the   members   of   a   committee   of   non-employee   directors

established for such purpose for services rendered to the Company, (b) securities upon the

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exercise   or   exchange   of   or   conversion   of   any   Securities   issued   hereunder   and/or   other

securities   exercisable   or   exchangeable   for   or   convertible   into   shares   of   Common   Stock

issued   and   outstanding   on   the   date   of   this   Agreement,   provided   that   such   securities   have

not  been  amended  since  the  date  of  this  Agreement  to  increase  the  number  of  such

securities   or   to   decrease   the   exercise   price,   exchange   price   or   conversion   price   of   such

securities (other than in connection with stock splits or combinations) or to extend the term

of such securities, and (c) securities issued pursuant to acquisitions or strategic transactions

approved   by   a   majority   of   the   disinterested   directors   of   the   Company,   provided   that   such

securities  are  issued  as   “ restricted  securities ”  (as  defined  in  Rule  144)  and  carry  no

registration    rights    that    require    or    permit    the    filing    of    any    registration    statement    in

connection therewith during the prohibition period in Section 4.12(a) herein, and provided

that any such issuance shall only be to a Person (or to the equityholders of a Person) which

is,   itself   or   through   its   subsidiaries,   an   operating   company   or   an   owner   of   an   asset   in   a

business   synergistic   with   the   business   of   the   Company   and   shall   provide   to   the   Company

additional benefits in addition to the investment of funds, but shall not include a transaction

in   which   the   Company   is   issuing   securities   primarily   for   the   purpose   of   raising   capital   or

to an entity whose primary business is investing in securities.

“ FCPA ” means the Foreign Corrupt Practices Act of 1977, as amended.

“ FDA ” shall have the meaning ascribed to such term in Section 3.1(kk).

“ FDCA ” shall have the meaning ascribed to such term in Section 3.1(kk).

“ First Closing ” shall have the meaning ascribed to such term in Section 2.1.

“ First  Closing  Date ”  means  the  Trading  Day  on  which  all  of  the   Transaction

Documents   have   been   executed   and   delivered   by   the   applicable   parties   thereto,   and   all

conditions precedent to (i) the Purchasers ’ obligations to pay the Subscription Amount for

the   First   Closing   and   (ii)   the   Company ’ s   obligations   to   deliver the   Securities   for   the   First

Closing, in each case, have been satisfied or waived.

“ GAAP ” shall have the meaning ascribed to such term in Section 3.1(h).

“ Indebtedness ” shall have the meaning ascribed to such term in Section 3.1(bb).

“ Intellectual   Property   Rights ”   shall   have   the   meaning   ascribed  to   such   term   in

Section 3.1(p).

“ Legend   Removal   Date ”   shall   have   the   meaning   ascribed   to   such   term   in   Section

4.1(c).

“ Liens ”   means   a   lien,   charge   pledge,   security   interest,   encumbrance,   right   of   first

refusal, preemptive right or other restriction.

“ Lock-Up Agreement ” means the Lock-Up Agreement, dated as of the date hereof,

by   and   among   the   Company   and   the   directors,   officers,   and   10%   stockholders   of   the

Company, in the form of Exhibit D attached hereto.

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“ Material Adverse Effect ” shall have the meaning assigned to such term in Section

3.1(b).

“ Material Permits ” shall have the meaning ascribed to such term in Section 3.1(n).

“ Participation Maximum ” shall have the meaning ascribed to such term in Section

4.11(a).

“ Per Unit Purchase Price ” equals $0.125 per unit, subject to adjustment for reverse

and forward stock splits, stock dividends, stock combinations and other similar transactions

of the Common Stock that occur after the date of this Agreement.

“ Person ”   means   an   individual   or   corporation,   partnership,   trust,   incorporated   or

unincorporated association, joint venture, limited liability company, joint stock company,

government (or an agency or subdivision thereof) or other entity of any kind.

“ Pharmaceutical Product ” shall have the meaning ascribed to such term in Section

3.1(jj).

“ Proceeding ”   means   an action, claim,   suit, investigation or proceeding   (including,

without   limitation,   an   informal   investigation   or   partial   proceeding,   such   as   a   deposition),

whether commenced or threatened.

“ Public  Information  Failure ”  shall  have  the  meaning  ascribed  to   such   term   in

Section 4.2(b).

“ Public   Information   Failure   Payments ”   shall   have   the   meaning   ascribed   to   such

term in Section 4.2(b).

“ Purchaser Party ” shall have the meaning ascribed to such term in Section 4.8.

“ Registration Rights Agreement ” means the Registration Rights Agreement, dated

on or about the date hereof, among the Company and the Purchasers, in the form of Exhibit

A attached hereto.

“ Registration Statement ”   means a registration statement   meeting   the requirements

set forth in the Registration Rights Agreement and covering the resale by the Purchasers of

the Shares and the Warrant Shares.

“ Required   Approvals ”   shall   have   the   meaning   ascribed   to   such   term   in   Section

3.1(e).

“ Rule  144 ”  means  Rule  144  promulgated  by  the  Commission  pursuant  to  the

Securities   Act,   as   such   Rule   may   be   amended   or   interpreted   from   time   to   time,   or   any

similar   rule   or   regulation   hereafter   adopted   by   the   Commission   having   substantially   the

same purpose and effect as such Rule.

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“ Rule  424 ”  means  Rule  424  promulgated  by  the  Commission  pursuant  to  the

Securities   Act,   as   such   Rule   may   be   amended   or   interpreted   from   time   to   time,   or   any

similar   rule   or   regulation   hereafter   adopted   by   the   Commission   having   substantially   the

same purpose and effect as such Rule.

“ SEC Reports ” shall have the meaning ascribed to such term in Section 3.1(h).

“ Second Closing ” shall have the meaning ascribed to such term in Section 2.1.

“ Second   Closing   Date ”   means   the   Trading   Day   on   which   all   of   the   Transaction

Documents   have   been   executed   and   delivered   by   the   applicable   parties   thereto,   and   all

conditions precedent to (i) the Purchasers ’ obligations to pay the Subscription Amount for

the   Second   Closing   and   (ii)   the   Company ’ s   obligations   to   deliver   the   Securities   for   the

Second Closing, in each case, have been satisfied or waived.

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

“ Securities   Act ”   means   the   Securities   Act   of   1933,   as   amended,   and   the   rules   and

regulations promulgated thereunder.

“ Shares ” means the shares of Common Stock issued or issuable to each Purchaser

pursuant to this Agreement.

“ Subscription   Amount ”   means,   as   to   each   Purchaser,   the   aggregate   amount   to   be

paid  for  units  of  Shares  and  Warrants  purchased  hereunder  as  specified  below  such

Purchaser ’ s  name  on  the  signature  page  of  this  Agreement  and  next  to  the  heading

“ Subscription Amount, ” in United States dollars and in immediately available funds.  The

Subscription Amounts at the First Closing and the Second Closing shall be the same.

“ Subsidiary ” means any subsidiary of the Company as set forth on Schedule 3.1(a)

and shall, where applicable, also include any direct or indirect subsidiary of the Company

formed or acquired after the date hereof.

“ Trading   Day ”   means   a   day   on   which   the   principal   Trading   Market   is   open   for

trading.

“ Trading Market ”   means   any   of   the following   markets   or exchanges   on which   the

Common Stock is listed or quoted for trading on the date in question: the NYSE American,

the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market,

the   New   York   Stock   Exchange,   OTCQB   or   OTCQX   (or   any   successors   to   any   of   the

foregoing).

“ Transaction   Documents ”   means   this   Agreement,   the   Warrants,   the   Registration

Rights Agreement, the Lock-Up Agreement, all exhibits and schedules thereto and hereto

and   any   other   documents   or   agreements   executed   in   connection   with   the   transactions

contemplated hereunder.

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“ Transfer Agent ” means Action Stock Transfer Corp., the current transfer agent of

the Company, and any successor transfer agent of the Company.

“ Variable  Rate  Transaction ”  shall  have  the  meaning  ascribed  to  such  term  in

Section 4.12(b).

“ VWAP ”   means,   for   any   date,   the   price   determined   by   the   first   of   the   following

clauses that applies: (a) if the Common Stock is then listed or quoted on a Trading Market,

the daily volume weighted average price of the Common Stock for such date (or the nearest

preceding date) on the Trading Market on which the Common Stock is then listed or quoted

as   reported   by   Bloomberg   L.P.   (based   on   a   Trading   Day   from   9:30   a.m.   (New   York   City

time)   to   4:02   p.m.   (New   York   City   time)),   (b)   if   OTCQB   or   OTCQX   is   not   a   Trading

Market,   the   volume   weighted   average   price   of   the   Common   Stock   for   such   date   (or   the

nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Stock is

not then listed or quoted for trading on OTCQB or OTCQX and if prices for the Common

Stock are then reported in the “ Pink Sheets ” published by OTC Markets Group, Inc. (or a

similar   organization   or   agency   succeeding   to   its   functions   of   reporting   prices),   the   most

recent   bid   price   per   share   of   the   Common   Stock   so   reported,   or   (d)   in   all   other   cases,   the

fair market value of a share of Common Stock as determined by an independent appraiser

selected   in   good   faith   by   the   Purchasers   of   a   majority   in   interest   of   the   Securities   then

outstanding   and   reasonably   acceptable   to   the   Company,   the   fees   and   expenses   of   which

shall be paid by the Company.

“ Warrants ” means, collectively, the Common Stock purchase warrants delivered to

the   Purchasers   at   the   Closing   in   accordance   with   Section   2.2(a)   hereof,   which   Warrants

shall be exercisable immediately and have a term of exercise equal to two (2) years, in the

form of Exhibit C attached hereto.

“ Warrant Shares ” means the shares of Common Stock issuable upon exercise of the

Warrants.

ARTICLE II.

PURCHASE AND SALE

2.1

Closings.     Upon    the    terms    and    subject    to    the    conditions    set    forth    herein,

substantially   concurrent   with   the   execution   and   delivery   of   this   Agreement   by   the   parties   hereto,

the Company agrees to sell, and the Purchasers, severally and not jointly, agree to purchase in two

Closings,   up   to   an   aggregate   of   $1,000,000   of   units   with   each   unit   consisting   of   1.5   Shares   and

Warrants to purchase 1.5 Warrant Shares.  Each Purchaser shall deliver to the Company, via wire

transfer   or   a   certified   check,   immediately   available   funds   equal   to   such   Purchaser ’ s   Subscription

Amount   as   set   forth   on   the   signature   page   hereto   executed   by   such   Purchaser,   and   the   Company

shall deliver to each Purchaser its respective units of Shares and a Warrant, as determined pursuant

to   Section   2.2(a),   and   the   Company   and   each   Purchaser   shall   deliver   the   other   items   set   forth   in

Section   2.2   deliverable   at   the   Closing.    The   Closings   shall   take   place   in   two   stages   as   set   forth

below   (respectively,   the   “ First   Closing ”   and   the   “ Second   Closing ” ).     Upon   satisfaction   of   the

covenants and conditions set forth in Sections 2.2 and 2.3, the Closing shall occur at the offices of

EGS or such other location as the parties shall mutually agree.

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(a)

First Closing.   The First Closing shall be for up to $500,000 of the aggregate

Subscription Amount subscribed for by all Purchasers hereunder and shall occur on, or as

soon as reasonably practicable following, the date hereof.

(b)

Second   Closing.   The   Second   Closing   shall   be   for   up   to   $500,000   of   the

aggregate Subscription Amount subscribed for by all Purchasers hereunder and shall occur

within 5 Business Days following the Effective Date, subject to the terms hereunder.

2.2

Deliveries.

(a)   On   or   prior   to   each   Closing   Date,   the   Company   shall   deliver   or   cause   to   be

delivered to each Purchaser the following:

(i)

as    to    the    First    Closing,    this    Agreement    duly    executed    by    the

Company;

(ii)

as    to    the    First    Closing,    a    legal    opinion    of    Company    Counsel,

substantially in the form of Exhibit B attached hereto;

(iii)      a    copy    of    the    irrevocable    instructions    to    the    Transfer    Agent

instructing  the  Transfer  Agent  to  deliver,  on  an  expedited  basis,  a  certificate

evidencing a number of Shares equal to (A) such Purchaser ’ s Subscription Amount

for the respective Closing divided (B) by the quotient obtained by dividing the Per

Unit Purchase Price by 1.5, registered in the name of such Purchaser;

(iv)

a   Warrant   registered   in   the   name   of   such   Purchaser   to   purchase   up

to a number of shares of Common Stock equal to 100% of such Purchaser ’ s Shares,

with an exercise price equal to $0.25, subject to adjustment therein;

(v)

the   Company   shall   have   provided   each   Purchaser   with   the

Company ’ s   wire   instructions,   on   Company   letterhead   and   executed   by   the   Chief

Executive Officer or Chief Financial Officer;

(vi)

as to the First Closing, the Lock-Up Agreements; and

(vii)       as   to   the   First   Closing,   the   Registration   Rights   Agreement   duly

executed by the Company.

(b)   On   or   prior   to   each   Closing   Date,   each   Purchaser   shall   deliver   or   cause   to   be

delivered to the Company, as applicable, the following:

(i)

As  to  the  First  Closing,  this  Agreement  duly  executed  by  such

Purchaser;

(ii)

such Purchaser ’ s Subscription Amount as to the applicable Closing

by wire transfer to the account specified in writing by the Company;

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(iii)      such   Purchaser ’ s   leak-out   agreement   in   form   and   substance

reasonably acceptable to the Purchaser and the Company1; and

(iv)

as   to   the   First   Closing,   the   Registration   Rights   Agreement   duly

executed by such Purchaser.

2.3

Closing Conditions.

(a)

The   obligations   of   the   Company   hereunder in   connection   with   the   Closing

are subject to the following conditions being met:

(i)

the accuracy in all material respects (or, to the extent representations

or warranties are qualified by materiality or Material Adverse Effect, in all respects)

on    the    applicable    Closing    Date    of    the    representations    and    warranties    of    the

Purchasers contained herein (unless as of a specific date therein in which case they

shall be accurate as of such date);

(ii)

all    obligations,    covenants    and    agreements    of    each    Purchaser

required to be performed at or prior to the applicable Closing Date shall have been

performed; and

(iii)      the delivery by each Purchaser of the items set forth in Section 2.2(b)

of this Agreement.

(b)

The   respective   obligations   of   the   Purchasers   hereunder   in   connection   with

the Closing are subject to the following conditions being met:

(i)

the accuracy in all material respects (or, to the extent representations

or warranties are qualified by materiality or Material Adverse Effect, in all respects)

when    made    and    on    the    applicable    Closing    Date    of    the    representations    and

warranties of the Company contained herein (unless as of a specific date therein in

which case they shall be accurate as of such date);

(ii)

all obligations, covenants and agreements of the Company required

to    be    performed    at    or    prior    to    the    applicable    Closing    Date    shall    have    been

performed;

(iii)      the delivery by the Company of the items set forth in Section 2.2(a)

of this Agreement;

(iv)

there shall have been no Material Adverse Effect with respect to the

Company since the date hereof;

(v)

as to the Second Closing, the Registration Statement shall have been

declared effective as to all of the Shares and Warrant Shares issued and issuable at

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If market price is less than exercise price purchaser will not sell greater than $15,000 and 15% of dollar

weighted average trading volume from prior 5 trading days.

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the First Closing and Second Closing (ignoring for such purposes an conversion or

exercise limitations thereunder) by the Commission on or before ______________,

2019; and

(vi)

from   the   date   hereof   to   the   applicable   Closing   Date,   trading   in   the

Common    Stock    shall    not    have    been    suspended    by    the    Commission    or    the

Company ’ s   principal   Trading   Market,   and,   at   any   time   prior   to   the   applicable

Closing   Date,   trading   in   securities   generally   as   reported   by   Bloomberg   L.P.   shall

not  have  been  suspended  or  limited,  or  minimum  prices  shall  not  have  been

established   on   securities   whose   trades   are   reported   by   such   service,   or   on   any

Trading   Market,   nor   shall   a   banking   moratorium   have   been   declared   either   by   the

United   States   or   New   York   State   authorities   nor   shall   there   have   occurred   any

material  outbreak  or  escalation  of  hostilities  or  other  national  or  international

calamity of such magnitude in its effect on, or any material adverse change in, any

financial market which, in each case, in the reasonable judgment of such Purchaser,

makes it impracticable or inadvisable to purchase the Securities at the Closing.

ARTICLE III.

REPRESENTATIONS AND WARRANTIES

3.1

Representations    and    Warranties    of    the    Company.    Except    as    set    forth    in    the

Disclosure Schedules, which Disclosure Schedules shall be deemed a part hereof and shall qualify

any   representation   or   otherwise   made   herein   to   the   extent   of   the   disclosure   contained   in   the

corresponding   section   of   the   Disclosure   Schedules,   the   Company   hereby   makes   the   following

representations and warranties to each Purchaser:

(a)

Subsidiaries.  All of the direct and indirect subsidiaries of the Company are

set   forth   on Schedule   3.1(a).    The   Company   owns,   directly   or   indirectly,   all   of   the   capital

stock or other equity interests of each Subsidiary free and clear of any Liens, and all of the

issued and outstanding shares of capital stock of each Subsidiary are validly issued and are

fully   paid,   non-assessable   and   free   of   preemptive   and   similar   rights   to   subscribe   for   or

purchase  securities.    If  the  Company  has  no  subsidiaries,  all  other  references  to  the

Subsidiaries or any of them in the Transaction Documents shall be disregarded.

(b)

Organization and Qualification.   The Company and each of the Subsidiaries

is an entity duly incorporated or otherwise organized, validly existing and in good standing

under   the   laws   of   the   jurisdiction   of   its   incorporation   or   organization,   with   the   requisite

power and authority to own and use its properties and assets and to carry on its business as

currently   conducted.    Neither   the   Company   nor   any   Subsidiary   is   in   violation   nor   default

of any of the provisions of its respective certificate   or   articles of incorporation, bylaws or

other   organizational   or   charter   documents.    Each   of   the   Company   and   the   Subsidiaries   is

duly qualified to conduct business and is in good standing as a foreign corporation or other

entity in each jurisdiction in which the nature of the business conducted or property owned

by   it   makes   such   qualification   necessary,   except   where   the   failure   to   be   so   qualified   or   in

good   standing,   as   the   case   may   be,   could   not   have   or   reasonably   be   expected   to   result   in:

(i)   a   material   adverse   effect   on   the   legality,   validity   or   enforceability   of   any   Transaction

Document,   (ii)   a   material   adverse   effect   on   the   results   of   operations,   assets,   business,

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prospects or condition (financial or otherwise) of the Company and the Subsidiaries, taken

as   a   whole,   or   (iii)   a   material   adverse   effect   on   the   Company ’ s   ability   to   perform   in   any

material respect on a timely basis its obligations under any Transaction Document (any of

(i), (ii) or (iii), a “ Material Adverse Effect ” ) and no Proceeding has been instituted in any

such jurisdiction revoking, limiting or curtailing or seeking to revoke, limit or curtail such

power and authority or qualification.

(c)

Authorization;   Enforcement.     The   Company   has   the   requisite   corporate

power and authority to enter into and to consummate the transactions contemplated by this

Agreement   and   each   of   the   other   Transaction   Documents   and   otherwise   to   carry   out   its

obligations hereunder and thereunder.    The execution and delivery of this Agreement and

each of the other Transaction Documents by the Company and the consummation by it of

the  transactions  contemplated  hereby  and  thereby  have  been  duly  authorized  by  all

necessary   action   on   the   part   of   the   Company   and   no   further   action   is   required   by   the

Company,   the   Board   of   Directors   or   the   Company ’ s   stockholders   in   connection   herewith

or   therewith   other   than   in   connection   with   the   Required   Approvals.    This   Agreement   and

each   other   Transaction   Document   to   which   it   is   a   party   has   been   (or   upon   delivery   will

have   been)   duly   executed   by   the   Company   and,   when   delivered   in   accordance   with   the

terms hereof and thereof, will constitute the valid and binding obligation of the Company

enforceable   against   the   Company   in   accordance   with   its   terms,   except   (i)   as   limited   by

general    equitable    principles    and    applicable    bankruptcy,    insolvency,    reorganization,

moratorium and other laws of general application affecting enforcement of creditors ’ rights

generally,  (ii)  as  limited  by  laws  relating  to  the  availability  of  specific  performance,

injunctive  relief  or  other  equitable  remedies  and  (iii)  insofar  as  indemnification  and

contribution provisions may be limited by applicable law.

(d)

No Conflicts.   The execution, delivery and performance by the Company of

this   Agreement   and   the   other   Transaction   Documents   to   which   it   is   a   party,   the   issuance

and   sale   of   the   Securities   and   the   consummation   by   it   of   the   transactions   contemplated

hereby   and   thereby   do   not   and   will   not   (i)   conflict   with   or   violate   any   provision   of   the

Company ’ s   or   any   Subsidiary ’ s   certificate   or   articles   of   incorporation,   bylaws   or   other

organizational or charter documents, or (ii) conflict with, or constitute a default (or an event

  that   with   notice   or   lapse   of   time   or   both   would   become   a   default)   under,   result   in   the

creation of any Lien upon any of the properties or assets of the Company or any Subsidiary,

or give to others any rights of termination, amendment, anti-dilution or similar adjustments,

acceleration  or  cancellation  (with  or  without  notice,  lapse  of  time  or  both)  of,  any

agreement,   credit   facility,   debt   or   other   instrument   (evidencing   a   Company   or   Subsidiary

debt   or   otherwise)   or   other   understanding   to   which   the   Company   or   any   Subsidiary   is   a

party   or   by   which   any   property   or   asset   of   the   Company   or   any   Subsidiary   is   bound   or

affected, or (iii) subject to the Required Approvals, conflict with or result in a violation of

any   law,   rule,   regulation,   order,   judgment,   injunction,   decree   or   other   restriction   of   any

court or governmental authority to which the Company or a Subsidiary is subject (including

federal and state securities laws and regulations), or by which any property or asset of the

Company or a Subsidiary is bound or affected; except in the case of each of clauses (ii) and

(iii),   such   as   could   not   have   or   reasonably   be   expected   to   result   in   a   Material   Adverse

Effect.

10

(e)

Filings,   Consents   and   Approvals.    The   Company   is   not   required   to   obtain

any   consent,   waiver,   authorization   or   order   of,   give   any   notice   to,   or   make   any   filing   or

registration with, any court or other federal, state, local or other governmental authority or

other Person in connection with the execution, delivery and performance by the Company

of   the   Transaction   Documents,   other   than:   (i)   the   filings   required   pursuant   to   Section   4.4

of this Agreement, (ii) the filing with the Commission pursuant to the Registration Rights

Agreement, (iii) the notice and/or application(s) to each applicable Trading Market for the

issuance   and   sale   of   the   Securities   and   the   listing   of   the   Shares   and   Warrant   Shares   for

trading thereon in the time and manner required thereby and (iv) the filing of Form D with

the  Commission  and  such  filings  as  are  required  to  be  made  under  applicable  state

securities laws (collectively, the “ Required Approvals ” ).

(f)

Issuance   of   the   Securities.   The   Securities   are   duly   authorized   and,   when

issued and paid for in accordance with the applicable Transaction Documents, will be duly

and validly issued, fully paid and nonassessable, free and clear of all Liens imposed by the

Company   other   than   restrictions   on   transfer   provided   for   in   the   Transaction   Documents.

The    Warrant    Shares,    when    issued  in    accordance    with    the    terms    of     the    Transaction

Documents, will be validly issued, fully paid and nonassessable, free and clear of all Liens

imposed by the Company other than restrictions on transfer provided for in the Transaction

Documents.    The  Company  has  reserved  from  its  duly  authorized  capital  stock  the

maximum   number   of   shares   of   Common   Stock   issuable   pursuant   to   this   Agreement   and

the Warrants.

(g)

Capitalization.    The   capitalization   of   the   Company   as   of   the   date   hereof   is

as   set   forth   on   Schedule   3.1(g),   which   Schedule   3.1(g)   shall   also   include   the   number   of

shares of Common Stock owned beneficially, and of record, by Affiliates of the Company

as of the date hereof.   The Company has not issued any capital stock since its most recently

filed  periodic  report  under  the  Exchange  Act,  other  than  pursuant  to  the  exercise  of

employee stock options under the Company ’ s stock option plans, the issuance of shares of

Common   Stock   to   employees   pursuant   to   the   Company ’ s   employee   stock   purchase   plans

and pursuant to the conversion and/or exercise of Common Stock Equivalents outstanding

as of the date of the most recently filed periodic report under the Exchange Act.   No Person

has any right of first refusal, preemptive right, right of participation, or any similar right to

participate   in   the   transactions   contemplated   by   the   Transaction   Documents.    Except   as   a

result of the purchase and sale of the Securities, there are no outstanding options, warrants,

scrip rights to subscribe to, calls or commitments of any character whatsoever relating to,

or   securities,   rights   or   obligations   convertible   into   or   exercisable   or   exchangeable   for,   or

giving   any   Person   any   right   to   subscribe   for   or   acquire,   any   shares   of   Common   Stock   or

the    capital    stock    of    any    Subsidiary,    or    contracts,    commitments,    understandings    or

arrangements   by   which   the   Company   or   any   Subsidiary   is   or may   become   bound   to   issue

additional shares of Common Stock or Common Stock Equivalents or capital stock of any

Subsidiary.    The   issuance   and sale of the Securities   will   not   obligate the Company   or   any

Subsidiary   to   issue   shares   of   Common   Stock   or   other   securities to   any   Person (other than

the Purchasers). There are no outstanding securities or instruments of the Company or any

Subsidiary with any provision that adjusts the exercise, conversion, exchange or reset price

of   such   security   or   instrument   upon   an   issuance   of   securities   by   the   Company   or   any

Subsidiary.   There   are   no   outstanding   securities   or   instruments   of   the   Company   or   any

11

Subsidiary   that   contain   any   redemption   or   similar   provisions,   and   there   are   no   contracts,

commitments,   understandings   or   arrangements   by   which   the   Company   or   any   Subsidiary

is   or   may   become   bound   to   redeem   a   security   of   the   Company   or   such   Subsidiary.   The

Company  does  not  have  any  stock  appreciation  rights  or   “ phantom  stock ”  plans  or

agreements or any similar plan or agreement. All of the outstanding shares of capital stock

of   the   Company   are   duly   authorized,   validly   issued,   fully   paid   and   nonassessable,   have

been   issued   in   compliance   with   all   federal   and   state   securities   laws,   and   none   of   such

outstanding   shares   was   issued   in   violation   of   any   preemptive   rights   or   similar   rights   to

subscribe    for    or    purchase    securities.     No    further    approval    or    authorization    of    any

stockholder,   the   Board   of   Directors   or   others   is   required   for   the   issuance   and   sale   of   the

Securities.     There   are   no   stockholders   agreements,   voting   agreements   or   other   similar

agreements   with   respect   to   the   Company ’ s   capital   stock   to   which   the   Company   is   a   party

or,    to    the    knowledge    of    the    Company,    between    or    among    any    of    the    Company ’ s

stockholders.

(h)

SEC   Reports;   Financial   Statements.   The   Company   has   filed   all   reports,

schedules,   forms,   statements   and   other   documents   required   to   be   filed   by   the   Company

under the Securities Act and the Exchange Act, including pursuant to Section 13(a) or 15(d)

thereof, for the two years preceding the date hereof (or such shorter period as the Company

was required by law or regulation to file such material) (the foregoing materials, including

the   exhibits   thereto   and   documents   incorporated   by   reference   therein,   being   collectively

referred to herein as the “ SEC Reports ” ) on a timely basis or has received a valid extension

of   such   time   of   filing   and   has   filed   any   such   SEC   Reports   prior   to   the   expiration   of   any

  such   extension.   As   of   their   respective   dates,   the   SEC   Reports complied   in   all   material

respects   with   the   requirements   of   the   Securities   Act   and   the   Exchange   Act,   as   applicable,

and none of the SEC Reports, when filed, contained any untrue statement of a material fact

or omitted to state a material fact required to be stated therein or necessary in order to make

the   statements   therein,   in   the   light   of   the   circumstances   under which   they   were   made,   not

misleading.     The   Company   has   never   been   an   issuer   subject   to   Rule   144(i)   under   the

Securities   Act.   The   financial   statements   of   the   Company   included   in   the   SEC   Reports

comply in all material respects with applicable accounting requirements and the rules and

regulations of the Commission with respect thereto as in effect at the time of filing.    Such

financial  statements  have  been  prepared  in  accordance  with  United  States  generally

accepted   accounting   principles   applied   on   a   consistent   basis   during   the   periods   involved

( “ GAAP ” ), except as may be otherwise specified in such financial statements or the notes

thereto  and  except  that  unaudited  financial  statements  may  not  contain  all  footnotes

required   by   GAAP,   and   fairly   present   in   all   material   respects   the   financial   position   of   the

Company   and   its   consolidated   Subsidiaries   as   of   and   for   the   dates   thereof   and   the   results

of   operations   and   cash   flows   for   the   periods   then   ended,   subject,   in   the   case   of   unaudited

statements, to normal, immaterial, year-end audit adjustments.

(i)

Material Changes; Undisclosed Events, Liabilities or Developments.  Since

the date of the latest audited financial statements included within the SEC Reports, except

as set forth on Schedule 3.1(i), (i) there has been no event, occurrence or development that

has had or that could reasonably be expected to result in a Material Adverse Effect, (ii) the

Company   has   not   incurred   any   liabilities   (contingent   or   otherwise)   other   than   (A)   trade

payables and accrued expenses incurred in the ordinary course of business consistent with

12

past   practice   and   (B)   liabilities  not   required   to   be   reflected in   the   Company ’ s   financial

statements   pursuant   to   GAAP   or   disclosed   in   filings   made   with   the   Commission,   (iii)   the

Company   has   not   altered   its   method   of   accounting,   (iv)   the   Company   has   not   declared   or

made any dividend or distribution of cash or other property to its stockholders or purchased,

redeemed   or   made   any   agreements   to   purchase   or   redeem   any   shares   of   its   capital   stock

and  (v)  the  Company  has  not  issued  any  equity  securities  to  any  officer,  director  or

Affiliate, except pursuant to existing Company stock option plans.   The Company does not

have pending before the Commission any request for confidential treatment of information.

Except for the issuance of the Securities contemplated by this Agreement or as set forth on

Schedule   3.1(i),   no   event,   liability,   fact,   circumstance,   occurrence   or   development   has

occurred or exists or is reasonably expected to occur or exist with respect to the Company

or   its   Subsidiaries   or   their   respective   businesses,   prospects,   properties,   operations,   assets

or   financial   condition   that   would   be   required   to   be   disclosed   by   the   Company   under

applicable securities laws at the time this representation is made or deemed made that has

not been publicly disclosed at least 1 Trading Day prior to the date that this representation

is made.

(j)

Litigation.    Except   as   set   forth   in   Item   3   of   the   Company ’ s   Annual   Report

on   Form   10-K   or   as   set   forth   on   Schedule   3.1(j)   attached   hereto,   there   is   no   action,   suit,

inquiry,   notice   of   violation,   proceeding   or   investigation   pending   or,   to   the   knowledge   of

the Company, threatened against or affecting the Company, any Subsidiary or any of their

respective   properties   before   or   by   any   court,   arbitrator,   governmental   or   administrative

agency   or   regulatory   authority   (federal,   state,   county,   local   or   foreign)   (collectively,   an

“ Action ” )   which   (i)   adversely   affects   or   challenges   the   legality,   validity   or   enforceability

of   any   of   the   Transaction   Documents   or   the   Securities   or   (ii)   could,   if   there   were   an

unfavorable decision, have or reasonably be expected to result in a Material Adverse Effect.

Neither the Company nor any Subsidiary, nor any director or officer thereof, is or has been

the subject of any Action involving a claim of violation of or liability under federal or state

securities   laws   or   a   claim   of   breach   of   fiduciary   duty.   There   has   not   been,   and   to   the

knowledge of the Company, there is not pending or contemplated, any investigation by the

Commission   involving   the   Company   or   any   current   or   former   director   or   officer   of   the

Company.    The   Commission   has   not   issued   any   stop   order   or   other   order   suspending   the

effectiveness   of   any   registration   statement   filed   by   the   Company   or   any   Subsidiary   under

the Exchange Act or the Securities Act.

(k)

Labor  Relations.    No  labor  dispute  exists  or,  to  the  knowledge  of  the

Company, is imminent with respect to any of the employees of the Company, which could

reasonably be expected to result in a Material Adverse Effect.  None of the Company ’ s or

its  Subsidiaries ’  employees  is  a  member  of  a  union  that  relates  to  such  employee ’ s

relationship with the Company or such Subsidiary, and neither the Company nor any of its

Subsidiaries   is   a   party   to   a   collective   bargaining   agreement,   and   the   Company   and   its

Subsidiaries  believe  that  their  relationships  with  their  employees  are  good.    To  the

knowledge of the Company, no executive officer of the Company or any Subsidiary is, or

is   now   expected   to   be,   in   violation   of   any   material   term   of   any   employment   contract,

confidentiality,    disclosure    or    proprietary    information    agreement    or    non-competition

agreement,   or   any   other   contract   or   agreement   or   any   restrictive   covenant   in   favor   of   any

third party, and the continued employment of each such executive officer does not subject

13

the Company or any of its Subsidiaries to any liability with respect to any of the foregoing

matters.    The   Company   and   its   Subsidiaries   are in   compliance   with all   U.S.   federal, state,

local and foreign laws and regulations relating to employment and employment practices,

terms   and   conditions   of   employment   and   wages   and   hours,   except   where the   failure   to   be

in   compliance   could   not,   individually   or   in the   aggregate,   reasonably   be expected to have

a Material Adverse Effect.

(l)

Compliance.     Neither   the   Company   nor   any   Subsidiary:   (i)   is   in   default

under   or   in   violation   of   (and   no   event   has   occurred   that   has   not   been   waived   that,   with

notice or lapse of time or both, would result in a default by the Company or any Subsidiary

under), nor has the Company or any Subsidiary received notice of a claim that it is in default

under   or   that   it   is   in   violation   of,   any   indenture,   loan   or   credit   agreement   or   any   other

agreement   or   instrument   to   which   it   is   a   party   or   by   which   it   or   any   of   its   properties   is

bound (whether or not such default or violation has been waived), (ii) is in violation of any

judgment, decree, or order of any court, arbitrator or other governmental authority or (iii)

is or has been in violation of any statute, rule, ordinance or regulation of any governmental

authority,   including   without   limitation   all   foreign,   federal,   state   and   local   laws   relating   to

taxes, environmental protection, occupational health and safety, product quality and safety

and employment and labor matters, except in each case as could not have or reasonably be

expected to result in a Material Adverse Effect.

(m)

Environmental Laws.

The   Company   and   its   Subsidiaries   (i)   are   in

compliance with all federal, state, local and foreign laws relating to pollution or protection

of   human   health   or   the   environment   (including   ambient   air,   surface   water,   groundwater,

land surface or subsurface strata), including laws relating to emissions, discharges, releases

or    threatened    releases  of    chemicals,    pollutants,    contaminants,  or  toxic  or  hazardous

substances    or    wastes    (collectively,   “ Hazardous    Materials ” )    into  the    environment,    or

otherwise   relating   to   the   manufacture,   processing,   distribution,   use,   treatment,   storage,

disposal, transport or handling of Hazardous Materials, as well as all authorizations, codes,

decrees,   demands,   or   demand   letters,   injunctions,   judgments,   licenses,   notices   or   notice

letters,   orders,   permits,   plans   or   regulations,   issued,   entered,   promulgated   or   approved

thereunder  ( “ Environmental    Laws ” );  (ii)    have    received  all    permits    licenses  or  other

approvals    required    of    them    under    applicable    Environmental    Laws    to    conduct    their

respective businesses; and (iii) are in compliance with all terms and conditions of any such

permit,   license   or approval   where   in each   clause (i), (ii)   and   (iii), the   failure   to so comply

could be reasonably expected to have, individually or in the aggregate, a Material Adverse

Effect.

(n)

Regulatory    Permits.     The    Company    and    the    Subsidiaries    possess    all

certificates,   authorizations   and   permits   issued   by   the   appropriate   federal,   state,   local   or

foreign regulatory authorities necessary to conduct their respective businesses as described

in the SEC Reports, except where the failure to possess such permits could not reasonably

be   expected   to   result   in   a   Material   Adverse   Effect   ( “ Material   Permits ” ),   and   neither   the

Company  nor  any  Subsidiary  has  received  any  notice  of  proceedings  relating  to  the

revocation or modification of any Material Permit.

14

(o)

Title    to    Assets.      The    Company    and    the    Subsidiaries    have    good    and

marketable title in fee simple to all real property owned by them and good and marketable

title in all personal property owned by them that is material to the business of the Company

and the Subsidiaries, in each case free and clear of all Liens, except for (i) Liens as do not

  materially   affect   the   value   of such   property   and   do   not   materially   interfere   with   the   use

made and proposed to be made of such property by the Company and the Subsidiaries and

(ii)   Liens   for   the   payment   of   federal,   state   or   other   taxes,   for   which   appropriate   reserves

have   been   made   therefor   in   accordance   with   GAAP   and   the   payment   of   which   is   neither

delinquent nor subject to penalties.   Any real property and facilities held under lease by the

Company   and   the   Subsidiaries   are   held   by   them   under   valid,   subsisting   and   enforceable

leases with which the Company and the Subsidiaries are in compliance.

(p)

Intellectual   Property.     The   Company   and   the   Subsidiaries   have,   or   have

rights   to   use,   all   patents,   patent   applications,   trademarks,   trademark   applications,   service

marks,   trade   names,   trade   secrets,   inventions,   copyrights,   lice nses   and   other   intellectual

property   rights   and   similar   rights   necessary   or   required   for   use   in   connection   with   their

respective   businesses   as   described   in   the   SEC   Reports   and   which   the   failure   to   so   have

could   have   a   Material   Adverse   Effect   (collectively,   the   “ Intellectual   Property   Rights ” ).

None   of,   and   neither   the   Company   nor   any   Subsidiary   has   received   a   notice   (written   or

otherwise)   that   any   of,   the   Intellectual   Property   Rights   has   expired,   terminated   or   been

abandoned,   or   is   expected   to   expire   or   terminate   or   be   abandoned,   within   two   (2)   years

from   the   date   of   this   Agreement.    Neither   the   Company   nor   any   Subsidiary   has   received,

since the date of the latest audited financial statements included within the SEC Reports, a

written   notice   of   a   claim   or   otherwise   has   any   knowledge   that   the   Intellectual   Property

Rights   violate   or   infringe   upon   the   rights   of   any   Person,   except   as   could   not   have   or

reasonably   be   expected   to   not   have   a   Material   Adverse   Effect.    To   the   knowledge   of   the

Company,   all   such   Intellectual   Property   Rights   are   enforceable   and   there   is   no   existing

infringement by another Person of any of the Intellectual Property Rights.    The Company

and  its  Subsidiaries  have  taken  reasonable  security  measures  to  protect  the  secrecy,

confidentiality   and   value   of   all   of   their   intellectual   properties,   except   where   failure   to   do

so   could   not,   individually   or   in   the   aggregate,   reasonably   be   expected   to   have   a   Material

Adverse Effect.

(q)

Insurance.    The   Company   and   the   Subsidiaries   are   insured   by   insurers   of

recognized financial responsibility against such losses and risks and in such amounts as are

prudent   and   customary   in   the   businesses   in   which   the   Company   and   the   Subsidiaries   are

engaged,   including,   but   not   limited   to,   directors   and   officers   insurance   coverage   at   least

equal to the aggregate Subscription Amount.   Neither the Company nor any Subsidiary has

any reason to believe that it will not be able to renew its existing insurance coverage as and

when such coverage expires or to obtain similar coverage from similar insurers as may be

necessary to continue its business without a significant increase in cost.

(r)

Transactions    with    Affiliates    and    Employees.      Except    as    set    forth    on

Schedule 3.1(r), none of the officers or directors of the Company or any Subsidiary and, to

the knowledge of the Company, none of the employees of the Company or any Subsidiary

is presently a party to any transaction with the Company or any Subsidiary (other than for

services   as   employees,   officers   and   directors),   including   any   contract,   agreement   or   other

15

arrangement   providing   for   the   furnishing   of   services   to   or   by,   providing   for   rental   of   real

or personal property to or from, providing for the borrowing of money from or lending of

money to or otherwise requiring payments to or from any officer, director or such employee

or, to the knowledge of the Company, any entity in which any officer, director, or any such

employee   has   a   substantial   interest   or   is   an   officer,   director, trustee,   stockholder,   member

or   partner,   in   each   case   in   excess   of   $120,000   other   than   for   ( i)   payment   of   salary   or

consulting   fees   for   services   rendered,   (ii)   reimbursement   for   expenses   incurred   on   behalf

of the Company and (iii) other employee benefits, including stock option agreements under

any stock option plan of the Company.

(s)

Sarbanes-Oxley;  Internal  Accounting  Controls.    The  Company  and  the

Subsidiaries   are   in   compliance   with   any   and   all   applicable   requirements   of   the   Sarbanes-

Oxley Act of 2002 that are effective as of the date hereof, and any and all applicable rules

and regulations promulgated by the Commission thereunder that are effective as of the date

hereof and as of the applicable Closing Date.  The Company and the Subsidiaries maintain

a system of internal accounting controls sufficient to provide reasonable assurance that: (i)

transactions   are   executed   in   accordance   with   management ’ s   general   or   specific

authorizations, (ii) transactions are recorded as necessary to permit preparation of financial

statements   in   conformity   with   GAAP   and   to   maintain   asset   accountability,   (iii)   access   to

assets is permitted only in accordance with management ’ s general or specific authorization,

and   (iv)   the   recorded   accountability   for   assets   is   compared   with   the   existing   assets   at

reasonable   intervals   and   appropriate   action   is   taken   with   respect   to   any   differences.   The

Company   and   the   Subsidiaries   have   established   disclosure   contro ls   and   procedures   (as

defined  in  Exchange  Act  Rules  13a-15(e)  and  15d-15(e))  for  the  Company  and  the

Subsidiaries    and    designed    such    disclosure    controls    and    procedur   es    to    ensure    that

information required to be disclosed by the Company in the reports it files or submits under

the Exchange Act is recorded, processed, summarized and reported, within the time periods

specified   in   the   Commission ’ s   rules   and   forms.    The   Company ’ s   certifying   officers   have

evaluated the effectiveness of the disclosure controls and procedures of the Company and

the   Subsidiaries   as   of   the   end   of   the   period   covered   by   the   most   recently   filed   periodic

report under the Exchange Act (such date, the “ Evaluation Date ” ).   The Company presented

in   its   most   recently   filed   periodic   report   under   the   Exchange   Act   the   conclusions   of   the

certifying officers about the effectiveness of the disclosure controls and procedures based

on their evaluations as of the Evaluation Date.  Since the Evaluation Date, there have been

no   changes   in   the   internal   control   over   financial   reporting   (as   such   term   is   defined   in   the

Exchange   Act)   of   the   Company   and   its   Subsidiaries   that   have   materially   affected,   or   is

reasonably   likely   to   materially   affect,   the   internal   control   over   financial   reporting   of   the

Company and its Subsidiaries.

(t)

Certain   Fees.    No   brokerage   or   finder ’ s   fees   or   commissions   are   or   will   be

payable by the Company or  any Subsidiary to any broker, financial advisor or consultant,

finder,   placement   agent,   investment   banker,   bank   or   other   Person   with   respect   to   the

transactions   contemplated   by   the   Transaction   Documents.    The   Purchasers   shall   have   no

obligation   with   respect   to   any   fees   or   with   respect   to   any   claims   made   by   or   on   behalf   of

other Persons for fees of a type contemplated in this Section that may be due in connection

with the transactions contemplated by the Transaction Documents.

16

(u)

Private      Placement.      Assuming      the      accuracy      of      the      Purchasers ’

representations and warranties set forth in Section 3.2, no registration under the Securities

Act is required for the offer and sale of the Securities by the Company to the Purchasers as

contemplated    hereby.    The    issuance    and    sale    of    the    Securities    hereunder    does    not

contravene the rules and regulations of the Trading Market.

(v)

Investment   Company.   The   Company   is   not,   and   is   not   an   Affiliate   of,   and

immediately after receipt of payment for the Securities, will not be or be an Affiliate of, an

“ investment   company ”   within   the   meaning   of   the   Investment   Company   Act   of   1940,   as

amended.    The Company shall conduct its business in a manner so that it will not become

an   “ investment   company ”   subject   to   registration   under   the   Investment   Company   Act   of

1940, as amended.

(w)

Registration Rights.    Other than   each of the Purchasers, no Person has any

right to cause the Company or any Subsidiary to effect the registration under the Securities

Act of any securities of the Company or any Subsidiary that have not been satisfied either

through the filing of a resale registration statement or Rule 144 eligibility.

(x)

Listing   and   Maintenance   Requirements.    The   Common   Stock   is   registered

pursuant   to   Section   12(b)   or   12(g)   of   the   Exchange   Act,   and   the   Company   has   taken   no

action designed to, or which to its knowledge is likely to have the effect of, terminating the

registration of the Common Stock under the Exchange Act nor has the Company received

any notification that the Commission is contemplating terminating such registration.    The

Company   has   not,   in   the   12   months   preceding   the   date   hereof,   received   notice   from   any

Trading   Market   on   which   the   Common   Stock   is   or   has   been   listed   or   quoted   to   the   effect

that the Company is not in compliance with the listing or maintenance requirements of such

Trading   Market.   The   Company   is,   and   has   no   reason   to   believe   that   it   will   not   in   the

foreseeable   future   continue   to   be,   in   compliance   with   all   such   listing   and   maintenance

requirements.   The   Common   Stock   is   currently   eligible   for   electronic   transfer   through   the

Depository   Trust   Company   or   another   established   clearing   corporation   and   the   Company

is  current  in  payment  of  the  fees  to  the  Depository  Trust  Company  (or  such  other

established clearing corporation) in connection with such electronic transfer.

(y)

Application of Takeover Protections.   Except as set forth on Schedule 3.1(y)

attached hereto, the Company and the Board of Directors have taken all necessary action,

if any, in order to render inapplicable any control share acquisition, business combination,

poison    pill    (including    any    distribution    under    a    rights    agreement)    or    other    similar

anti-takeover provision under the Company ’ s certificate of incorporation (or similar charter

documents)   or   the   laws   of   its   state   of   incorporation   that   is   or   could   become   applicable   to

the Purchasers as a result of the Purchasers and the Company fulfilling their obligations or

exercising their rights under the Transaction Documents, including without limitation as a

result   of   the   Company ’ s   issuance   of   the   Securities   and   the   Purchasers ’   ownership   of   the

Securities.

(z)

Disclosure.  Except with respect to the material terms and conditions of the

transactions   contemplated   by   the   Transaction   Documents,   the   Company   confirms   that

neither   it   nor   any   other   Person   acting   on   its   behalf   has   provided   any   of   the   Purchasers   or

17

their agents or counsel with any information that it believes constitutes or might constitute

material,  non-public  information.

The  Company understands  and  confirms  that  the

Purchasers   will   rely   on the   foregoing   representation   in   effecting   transactions   in   securities

of   the   Company.    All   of   the   disclosure   furnished   by   or   on   behalf   of   the   Company   to   the

Purchasers regarding the Company and its Subsidiaries, their respective businesses and the

transactions   contemplated   hereby,   including   the   Disclosure   Schedules   to   this   Agreement,

is   true   and   correct   and   does   not   contain   any   untrue   statement   of   a   material   fact   or   omit   to

state any material fact necessary in order to make the statements made therein, in the light

of   the   circumstances   under   which   they   were   made,   not   misleading.   The   press   releases

disseminated  by  the  Company  during  the  twelve  months  preceding  the  date  of  this

Agreement taken as a whole do not contain any untrue statement of a material fact or omit

to   state   a   material   fact   required   to   be   stated   therein   or   necessary   in   order   to   make   the

statements therein, in the light of the circumstances under which they were made and when

made,   not   misleading.    The   Company   acknowledges   and   agrees   that   no   Purchaser   makes

or has made any representations or warranties with respect to the transactions contemplated

hereby other than those specifically set forth in Section 3.2 hereof.

(aa)      No   Integrated   Offering.   Assuming   the   accuracy   of   the   Purchasers ’

representations and warranties set forth in Section 3.2, neither the Company, nor any of its

Affiliates, nor any Person acting on its or their behalf has, directly or indirectly, made any

offers    or    sales    of    any    security    or    solicited    any    offers    to    buy    any    security,    under

circumstances   that   would   cause   this   offering   of   the   Securities   to   be   integrated   with   prior

offerings   by   the   Company   for   purposes   of   (i)   the   Securities   Act   which   would   require   the

registration    of    any    such    securities    under    the    Securities    Act,    or    (ii)    any    applicable

shareholder   approval   provisions   of   any   Trading   Market   on   which   any   of   the   securities   of

the Company are listed or designated.

(bb)       Solvency.    Based   on   the   consolidated   financial   condition   of   the   Company

as of the applicable Closing Date and the repayment of certain debt as set forth on Schedule

3.1(bb) out of the proceeds of this offering at Closing, after giving effect to the receipt by

the Company of the proceeds from the sale of the Securities hereunder, (i) the fair saleable

value of the Company ’ s assets exceeds the amount that will be required to be paid on or in

respect of the Company ’ s existing debts and other liabilities (including known contingent

liabilities)   as   they   mature,   (ii)   the   Company ’ s   assets   do   not   constitute   unreasonably   small

capital to carry on its business as now conducted and as proposed to be conducted including

its   capital   needs   taking   into   account   the   particular   capital   requirements   of   the   business

conducted   by   the   Company,   consolidated   and   projected   capital   requirements   and   capital

availability   thereof,   and   (iii)   the   current   cash   flow   of   the   Company,   together   with   the

proceeds the Company would receive, were it to liquidate all of its assets, after taking into

account   all   anticipated   uses   of   the   cash,   would   be   sufficient   to   pay   all   amounts   on   or   in

respect of its liabilities when such amounts are required to be paid.   The Company does not

intend to incur debts beyond its ability to pay such debts as they mature (taking into account

the   timing   and   amounts   of   cash   to   be   payable   on   or   in   respect   of its debt).    The Company

has no knowledge of any facts or circumstances which lead it to believe that it will file for

reorganization    or    liquidation    under    the    bankruptcy    or    reorganization    laws    of    any

jurisdiction within one year from the applicable Closing Date.  Schedule 3.1(bb) sets forth

as of the date hereof all outstanding secured and unsecured Indebtedness of the Company

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or any Subsidiary, or for which the Company or any Subsidiary has commitments.  For the

purposes of this Agreement, “ Indebtedness ” means (x) any liabilities for borrowed money

or   amounts   owed   in   excess   of   $50,000   (other   than   trade   accounts   payable   incurred   in   the

ordinary    course    of    business),    (y)    all    guaranties,    endorsements    and    other    contingent

obligations   in   respect   of   indebtedness   of   others,   whether   or   not   the   same   are   or   should   be

reflected  in  the  Company ’ s  consolidated  balance  sheet  (or  the  notes  thereto),  except

guaranties   by   endorsement   of   negotiable   instruments   for   deposit   or   collection   or   similar

transactions   in   the   ordinary   course   of   business;   and   (z)   the   present   value   of   any   lease

payments   in   excess   of   $50,000   due   under   leases   required   to   be   capitalized   in   accordance

with   GAAP.    Neither   the   Company   nor   any   Subsidiary   is   in   default   with   respect   to   any

Indebtedness.

(cc)      Tax  Status.    Except  for  matters  that  would  not,  individually  or   in  the

aggregate,   have   or   reasonably   be   expected   to   result   in   a   Material   Adverse   Effect,   the

Company and its Subsidiaries each (i) has made or filed all United States federal, state and

local   income   and   all   foreign   income   and   franchise   tax   returns,   reports   and   declarations

required  by  any  jurisdiction  to  which  it  is  subject,  (ii)  has  paid  all  taxes  and  other

governmental   assessments   and   charges   that   are   material   in   amount,   shown   or   determined

to   be   due   on   such   returns,   reports   and   declarations   and   (iii)   has   set   aside   on   its   books

provision reasonably adequate for the payment of all material taxes for periods subsequent

to   the   periods   to   which   such   returns,   reports   or   declarations   apply.    There   are   no   unpaid

taxes in any material amount claimed to be due by the taxing authority of any jurisdiction,

and the officers of the Company or of any Subsidiary know of no basis for any such claim.

(dd)       No   General   Solicitation.    Neither   the   Company   nor   any   Person   acting   on

behalf   of   the   Company   has   offered   or   sold   any   of   the   Securities   by   any   form   of   general

solicitation   or   general   advertising.    The   Company   has   offered   the   Securities   for   sale   only

to the Purchasers and certain other “ accredited investors ” within the meaning of Rule 501

under the Securities Act.

(ee)      Foreign Corrupt Practices.   Neither the Company nor any Subsidiary, nor to

the   knowledge   of   the   Company   or   any   Subsidiary,   any   agent   or   other   person   acting   on

behalf of the Company or any Subsidiary, has (i) directly or indirectly, used any funds for

unlawful   contributions,   gifts,   entertainment   or   other   unlawful   expenses   related   to   foreign

or   domestic   political   activity,   (ii)   made   any   unlawful   payment   to   foreign   or   domestic

government  officials  or  employees  or  to  any  foreign  or  domestic  political  parties  or

campaigns from corporate funds, (iii) failed to disclose fully any contribution made by the

Company   or   any   Subsidiary   (or   made   by   any   person   acting   on   its   behalf   of   which   the

Company is aware) which is in violation of law or (iv) violated in any material respect any

provision of FCPA.

(ff)

Accountants.     The   Company ’ s   accounting   firm   is   set   forth   on   Schedule

3.1(ff)   of   the   Disclosure   Schedules.    To   the   knowledge   and   belief   of   the   Company,   such

accounting firm (i) is a registered public accounting firm as required by the Exchange Act

and   (ii)   shall   express   its opinion   with   respect to the   financial   statements   to   be   included   in

the Company ’ s Annual Report for the fiscal year ending December 31, 2019.

19

(gg)       No     Disagreements     with     Accountants     and     Lawyers.     There     are     no

disagreements of any kind presently existing, or reasonably anticipated by the Company to

arise,  between  the  Company  and  the  accountants  and  lawyers  formerly  or  presently

employed   by   the   Company   and   the   Company   is   current   with   respect   to   any   fees   owed   to

its accountants and lawyers which could affect the Company ’ s ability to perform any of its

obligations under any of the Transaction Documents.

(hh)

Acknowledgment  Regarding  Purchasers ’  Purchase  of  Securities.      The

Company   acknowledges   and   agrees   that   each   of   the   Purchasers   is   acting   solely   in   the

capacity   of   an   arm ’ s   length   purchaser   with   respect   to   the   Transaction   Documents   and   the

transactions contemplated thereby. The Company further acknowledges that no Purchaser

is   acting   as   a   financial   advisor   or   fiduciary   of   the   Company   (or   in   any   similar   capacity)

with respect to the Transaction Documents and the transactions contemplated thereby and

any   advice   given   by   any   Purchaser   or   any   of   their   respective   representatives   or   agents   in

connection   with   the   Transaction   Documents   and   the   transactions   contemplated   thereby   is

merely   incidental   to   the   Purchasers ’   purchase   of   the   Securities.     The   Company   further

represents to each Purchaser that the Company ’ s decision to enter into this Agreement and

the   other   Transaction   Documents   has   been   based   solely   on   the   independent   evaluation   of

the transactions contemplated hereby by the Company and its representatives.

(ii)

Acknowledgment   Regarding   Purchaser ’ s   Trading   Activity.     Anything   in

this   Agreement   or   elsewhere   herein   to   the   contrary   notwithstanding   (except   for   Sections

3.2[(g) and 4.14 hereof), it is understood and acknowledged by the Company that: (i) none

of the Purchasers has been asked by the Company to agree, nor has any Purchaser agreed,

to   desist   from   purchasing   or   selling,   securities   of   the   Company,   or   “ derivative ”   securities

based on securities issued by the Company or to hold the Securities for any specified term,

(ii)   past   or   future   open   market   or   other   transactions   by   any   Purchaser   before   or   after   the

closing of this or future private placement transactions, may negatively impact the market

price   of   the   Company ’ s   publicly-traded   securities,   and   (iii)   ea ch   Purchaser   shall   not   be

deemed to have any affiliation with or control over any arm ’ s length counter-party in any

“ derivative ” transaction.   The Company further understands and acknowledges that (y) one

or more Purchasers may engage in hedging activities at various times during the period that

the   Securities   are   outstanding,   including,   without   limitation,   during   the   periods   that   the

value   of   the   Warrant   Shares   deliverable   with   respect   to   Securities   are   being   determined,

and (z) such hedging activities (if any) could reduce the value of the existing stockholders'

equity   interests   in   the   Company   at   and   after   the   time   that   the hedging   activities   are   being

conducted.    The   Company   acknowledges   that   such   aforementioned   hedging   activities   do

not constitute a breach of any of the Transaction Documents.

(jj)

Regulation M Compliance.  The Company has not, and to its knowledge no

one   acting   on   its   behalf   has,   (i)   taken,   directly   or   indirectly,   any   action   designed   to   cause

or to result in the stabilization or manipulation of the price of any security of the Company

to facilitate the sale or resale of any of the Securities, (ii) sold, bid for, purchased, or paid

any   compensation   for   soliciting purchases   of,   any   of the   Securities, or (iii) paid or agreed

to  pay  to  any  Person  any  compensation  for  soliciting  another  to  purchase  any  other

securities   of   the   Company,   other   than,   in   the   case   of   clauses   (ii)   and   (iii),   compensation

paid to the Company ’ s placement agent in connection with the placement of the Securities.

20

(kk)       FDA.    As   to   each   product   subject   to   the   jurisdiction   of   the   U.S.   Food   and

Drug  Administration  ( “ FDA ” )  under  the  Federal  Food,  Drug  and  Cosmetic  Act,  as

amended,  and  the  regulations  thereunder  ( “ FDCA ” )  that  is  manufactured,  packaged,

labeled, tested, distributed, sold, and/or marketed by the Company or any of its Subsidiaries

(each   such   product,   a   “ Pharmaceutical   Product ” ),   such   Pharmaceutical   Product   is   being

manufactured, packaged, labeled, tested, distributed, sold and/or marketed by the Company

in   compliance   with   all   applicable   requirements   under   FDCA   and   similar   laws,   rules   and

regulations   relating   to   registration,   investigational   use,   premarket   clearance,   licensure,   or

application    approval,    good    manufacturing    practices,    good    laboratory    practices,    good

clinical   practices,   product   listing,   quotas,   labeling,   advertising,   record   keeping   and   filing

of reports, except where the failure to be in compliance would not have a Material Adverse

Effect.   There is no pending, completed or, to the Company's knowledge, threatened, action

(including   any   lawsuit,   arbitration,   or   legal   or   administrative   or   regulatory   proceeding,

charge,   complaint,   or   investigation)   against   the   Company   or   any   of   its   Subsidiaries,   and

none   of   the   Company   or   any   of   its   Subsidiaries   has   received any notice, warning   letter   or

other   communication   from   the   FDA   or   any   other   governmental   entity,   which   (i)   contests

the premarket clearance, licensure, registration, or approval of, the uses of, the distribution

of,   the   manufacturing   or   packaging   of,   the   testing   of,   the   sale   of,   or   the   labeling   and

promotion   of   any   Pharmaceutical   Product,   (ii)   withdraws   its   approval   of,   requests   the

recall,   suspension,   or   seizure   of,   or   withdraws   or   orders   the   withdrawal   of   advertising   or

sales promotional materials relating to, any Pharmaceutical Product, (iii) imposes a clinical

hold   on   any   clinical   investigation   by   the   Company   or   any   of   its   Subsidiaries,   (iv)   enjoins

production at any facility of the Company or any of its Subsidiaries, (v) enters or proposes

to   enter   into   a   consent   decree   of   permanent   injunction   with   the   Company   or   any   of   its

Subsidiaries, or (vi) otherwise alleges any violation of any laws, rules or regulations by the

Company   or   any   of   its   Subsidiaries,   and   which,   either   individually   or   in   the   aggregate,

would   have   a   Material   Adverse   Effect.     The   properties,   business    and   operations   of   the

Company have been and are being conducted in all material respects in accordance   with all

applicable laws, rules and regulations of the FDA.  The Company has not been informed by

the FDA that the FDA will prohibit the marketing, sale, license or use in the United States of

any   product   proposed   to   be   developed,   produced   or   marketed   by   the   Company   nor   has   the

FDA   expressed   any   concern   as   to   approving   or   clearing   for   marketing   any   product   being

developed or proposed to be developed by the Company.

(ll)

Stock Option Plans. Each stock option granted by the Company under the

Company ’ s    stock    option    plan    was    granted    (i)    in    accordance    with    the    terms    of    the

Company ’ s stock option plan and (ii) with an exercise price at least equal to the fair market

value   of   the   Common   Stock   on   the   date   such   stock   option   would   be   considered   granted

under   GAAP   and   applicable   law.   No   stock   option   granted   under   the   Company ’ s   stock

option plan has been backdated.  The Company has not knowingly granted, and there is no

and has been no Company policy or practice to knowingly grant, stock options prior to, or

otherwise knowingly coordinate the grant of stock options with, the release or other public

announcement   of   material   information   regarding   the   Company   or   its   Subsidiaries   or   their

financial results or prospects.

(mm)     Office of Foreign Assets Control.   Neither the Company nor any Subsidiary

nor, to the Company's knowledge, any director, officer, agent, employee or affiliate of the

21

Company or any Subsidiary is currently subject to any U.S. sanctions administered by the

Office of Foreign Assets Control of the U.S. Treasury Department ( “ OFAC ” ).

(nn)       U.S. Real Property Holding Corporation.  The Company is not and has

never been a U.S. real property holding corporation within the meaning of Section 897 of

the Internal Revenue Code of 1986, as amended, and the Company shall so certify upon

Purchaser ’ s request.

(oo)       Bank    Holding    Company    Act.     Neither    the    Company    nor    any    of    its

Subsidiaries or Affiliates is subject to the Bank Holding Company Act of 1956, as amended

(the “ BHCA ” ) and to regulation by the Board of Governors of the Federal Reserve System

(the   “ Federal   Reserve ” ).   Neither   the   Company   nor   any   of   its   Subsidiaries   or   Affiliates

owns or controls, directly or indirectly, five percent (5%) or more of the outstanding shares

of any class of voting securities or twenty-five percent or more of the total equity of a bank

or any entity that is subject to the BHCA and to regulation by the Federal Reserve.   Neither

the Company nor any of its Subsidiaries or Affiliates exercises a controlling influence over

the   management   or   policies   of   a   bank   or   any   entity   that   is   subject   to   the   BHCA   and   to

regulation by the Federal Reserve.

(pp)       Money   Laundering.    The   operations   of   the   Company   and   its   Subsidiaries

are   and   have   been   conducted   at   all   times   in   compliance   with   applicable   financial   record-

keeping   and   reporting   requirements   of   the   Currency   and   Foreign   Transactions   Reporting

Act   of   1970,   as   amended,   applicable   money   laundering   statutes   and   applicable   rules   and

regulations   thereunder   (collectively,   the   “ Money   Laundering   Laws ” ),   and   no   Action   or

Proceeding   by   or   before   any   court   or   governmental   agency,   authority   or   body   or   any

arbitrator involving the Company or any Subsidiary with respect to the Money Laundering

Laws is pending or, to the knowledge of the Company or any Subsidiary, threatened.

(qq)       No Disqualification Events.   With respect to the Securities to be offered and

sold hereunder in reliance on Rule 506 under the Securities Act, none of the Company, any

of its predecessors, any affiliated issuer, any director, executive officer, other officer of the

Company participating in the offering hereunder, any beneficial owner of 20% or more of

the   Company ’ s   outstanding   voting   equity   securities,   calculated   on   the   basis   of   voting

power,   nor   any   promoter   (as   that   term   is   defined   in   Rule   405   under   the   Securities   Act)

connected with the Company in any capacity at the time of sale (each, an “ Issuer Covered

Person ”   and,   together,   “ Issuer   Covered   Persons ” )   is   subject   to   any   of   the   "Bad   Actor"

disqualifications  described  in  Rule  506(d)(1)(i)  to  (viii)  under  the  Securities  Act  (a

“ Disqualification   Event ” ),   except   for   a   Disqualification   Event   covered   by   Rule   506(d)(2)

or   (d)(3).   The   Company   has   exercised   reasonable   care   to   determine   whether   any   Issuer

Covered Person is subject to a Disqualification Event. The Company has complied, to the

extent   applicable,   with   its   disclosure   obligations   under   Rule   506(e),   and   has   furnished   to

the Purchasers a copy of any disclosures provided thereunder.

(rr)

Other   Covered   Persons.   The   Company   is   not   aware   of   any   person   (other

than   any   Issuer   Covered   Person)   that   has   been   or   will   be   paid   (directly   or   indirectly)

remuneration for solicitation of purchasers in connection with the sale of any Securities.

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(ss)

Notice of Disqualification Events. The Company will notify the Purchasers

in writing, prior to the applicable Closing Date of (i) any Disqualification Event relating to

any Issuer Covered Person and (ii) any event that would, with the passage of time, become

a Disqualification Event relating to any Issuer Covered Person.

3.2

Representations   and   Warranties   of   the   Purchasers.    Each   Purchaser,   for   itself   and

for no other Purchaser, hereby represents and warrants as of the date hereof and as of the applicable

Closing   Date   to   the   Company   as   follows   (unless   as   of   a   specific   date   therein,   in   which   case   they

shall be accurate as of such date):

(a)

Organization; Authority.   Such Purchaser is either an individual or an entity

duly   incorporated   or   formed,   validly   existing   and   in   good   standing   under   the   laws   of   the

jurisdiction of its incorporation or formation with full right, corporate, partnership, limited

liability   company   or   similar   power   and   authority   to   enter   into   and   to   consummate   the

transactions   contemplated   by   the   Transaction   Documents   and   otherwise   to   carry   out   its

obligations  hereunder  and  thereunder.  The  execution  and  delivery  of  the  Transaction

Documents   and   performance   by   such   Purchaser   of   the   transactions   contemplated   by   the

Transaction Documents have been duly authorized by all necessary corporate, partnership,

limited   liability   company   or   similar   action,   as   applicable,   on   the   part   of   such   Purchaser.

Each  Transaction  Document  to  which  it  is  a  party  has  been  duly  executed  by  such

Purchaser, and when delivered by such Purchaser in accordance with the terms hereof, will

constitute   the   valid   and   legally   binding   obligation   of   such   Purchaser,   enforceable   against

it   in   accordance   with   its   terms,   except   (i)   as   limited   by   general   equitable   principles   and

applicable   bankruptcy,   insolvency,   reorganization,   moratorium   and   other   laws   of   general

application   affecting   enforcement   of   creditors ’   rights   generally,   (ii)   as   limited   by   laws

relating   to   the   availability   of   specific   performance,   injunctive   relief   or   other   equitable

remedies   and   (iii)   insofar   as   indemnification   and   contribution   provisions   may   be   limited

by applicable law.

(b)

Own    Account.       Such    Purchaser    understands    that    the    Securities    are

“ restricted  securities ”  and  have  not  been  registered  under  the  Securities  Act  or  any

applicable   state   securities   law   and   is   acquiring   the   Securities   as   principal   for   its   own

account   and   not   with   a   view   to   or   for   distributing   or   reselling   such   Securities   or   any   part

thereof   in   violation   of   the   Securities   Act   or   any   applicable   state   securities   law,   has   no

present intention of distributing any of such Securities in violation of the Securities Act or

any    applicable    state    securities    law    and    has    no    direct    or    indirect    arrangement    or

understandings   with   any   other   persons   to   distribute   or   regarding   the   distribution   of   such

Securities   in   violation   of   the   Securities   Act   or   any   applicable   state   securities   law   (this

representation  and  warranty  not  limiting  such  Purchaser ’ s  right  to  sell  the  Securities

pursuant to the Registration Statement or otherwise in compliance with applicable federal

and   state   securities   laws).   Such   Purchaser   is   acquiring   the   Securities   hereunder   in   the

ordinary course of its business.

(c)

Purchaser Status.    At the time such Purchaser was offered the Securities, it

was, and as of the date hereof it is, and on each date on which it exercises any Warrants, it

will be either: (i) an “ accredited investor ” as defined in Rule 501(a)(1), (a)(2), (a)(3), (a)(7)

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