STRATEGIC ALLIANCE AGREEMENT

EXHIBIT 10.1

STRATEGIC ALLIANCE AGREEMENT

     This Strategic Alliance Agreement (this “ Agreement ”) is dated as of March 18, 2009, by and among Elite Pharmaceuticals, Inc., a Delaware corporation (the “ Company ”), on the one hand, and Epic Pharma, LLC, a Delaware limited liability company (the “ Parent ”), and Epic Investments, LLC, a Delaware limited liability company (including its successors and assigns, the “ Purchaser ”), on the other hand.

     WHEREAS, each of the Company and Parent are engaged in the business of research and development, manufacturing, sales and marketing of oral immediate and controlled release products; and

     WHEREAS, the Purchaser is a newly-formed, wholly-owned subsidiary of the Parent;

and

     WHEREAS, the parties wish to enter into this Agreement in order to benefit from the synergies which are available from the joint development of various products and the sharing of certain technology and know-how, as more fully set forth below; and

     WHEREAS, in order to provide the Company with the additional capital necessary for the product development and synergies contemplated herein, and subject to the terms and conditions set forth in this Agreement and pursuant to Section 4(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 the Purchaser, and the Purchaser desires to purchase from the Company, securities of the Company as more fully described in this Agreement; and

     WHEREAS, in order to provide Parent with certain resources necessary to develop certain additional products as more particularly described herein, the Company has agreed to permit Parent to, among other things, use and occupy the Company’s facility located at 165 Ludlow Avenue, Northvale, New Jersey, including the building and grounds, the building systems, the laboratory equipment, the parking areas and all other common areas (the “ Facility ”);

     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 parties hereto agree as follows:

ARTICLE I
DEFINITIONS

      Definitions . In addition to the terms defined elsewhere in this Agreement, the following terms have the meanings indicated in this Section 1.1:

     “ Acquiring Person ” shall have the meaning assigned to such term in Section 4.6.

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

     “ Action by Shareholders ” means action by the shareholders of the Company approving the Authorized Share Approval in a manner that complies with applicable Delaware General Corporation Law, as amended.

     “ Actual Minimum ” means, as of any date, the maximum aggregate number of shares of Common Stock then issued or potentially issuable in the future pursuant to the Transaction Documents, including any Underlying Shares issuable upon exercise in full of all Warrants, ignoring any exercise limits set forth therein.

     “ Additional CR Products ” shall have the meaning assigned to such term in Section 5.2.

     “ Additional IR Products ” shall have the meaning assigned to such term in Section 5.2.

     “ Additional Closing Date ” shall have the meaning assigned to such term in Section 2.7.

     “ Additional Shares ” means the shares of Series E Preferred Stock to be issued by the Company to the Purchaser pursuant to Section 2.7 hereof.

     “ 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.

     “ Agreement ” shall have to meaning assigned to such term in the preamble hereto.

     “ Amendment ” means the amendment to the Company’s certificate of incorporation that (i) increases the number of authorized shares of Common Stock from 210,000,000 shares to 340,000,000 shares and (ii) reduces the par value of the authorized shares of Common Stock from $.01 to $.001 per share, in substantially the form of Exhibit A attached hereto.

     “ ANDA ” means an abbreviated new drug application for obtaining FDA approval of generic versions of certain drugs pursuant to the Drug Price Competition and Patent Term Restoration Act of 1984, commonly known as the “Hatch-Waxman” amendments.

     “ API ” means active pharmaceutical ingredient.

     “ Applicable Law ” means, with respect to the United States, the FDCA, all regulations promulgated thereunder, and all other applicable laws, rules, regulations and guidelines that apply to the import, export, research and development, manufacture, marketing, distribution, or sale of the Products or the performance of either party’s obligations under this Agreement (including disclosure obligations as required by the SEC or other comparable exchange or securities commission having authority over a party) to the extent applicable and relevant to such party.

     “ Assisting Party ” shall have the meaning set forth in Section 5.4(f) .

     “ Authorized Share Approval ” means the vote by the shareholders of the Company to approve the Amendment and the filing by the Company of the Amendment with the Secretary of

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State of the State of Delaware and the acceptance of the Amendment by the Secretary of State of the State of Delaware.

     “ Authorized Share Approval Date ” means the date when all of the actions set forth in the definition of the Authorized Share Approval have been completed.

     “ Basket ” shall have the meaning assigned to such term in Section 4.8(d) .

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

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

     “ CERCLA ” means the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended as of the date hereof.

     “ Certificate of Designation ” means the Certificate of Designation of Preferences, Rights and Limitations of Series E Convertible Voting Preferred Stock of the Company to be filed prior to the Initial Closing by the Company with the Secretary of State of Delaware, in the form of Exhibit B attached hereto.

     “ Change of Control Transaction ” means the occurrence after the date hereof of any of (i) an acquisition after the date hereof by an individual, legal entity or “group” (as described in Rule 13d-5(b)(1) promulgated under the Exchange Act) of effective control (whether through legal or beneficial ownership of capital stock of the Company, by contract or otherwise) of in excess of fifty percent (50%) of the voting securities of the Company, or (ii) the Company merges into or consolidates with any other Person, or any Person merges into or consolidates with the Company and, after giving effect to such transaction, the stockholders of the Company immediately prior to such transaction own less than fifty percent (50%) of the aggregate voting power of the Company or the successor entity of such transaction, or (iii) the Company sells or transfers all or substantially all of its assets to another Person and the stockholders of the Company immediately prior to such transaction own less than fifty percent (50%) of the aggregate voting power of the acquiring entity immediately after the transaction, or (iv) a replacement at one time or within a one year period of more than one-half of the members of the Company’s board of directors which is not approved by a majority of those individuals who are members of the board of directors on the date hereof (or by those individuals who are serving as members of the board of directors on any date whose nomination to the board of directors was approved by a majority of the members of the board of directors who are members on the date hereof), or (v) the execution by the Company of an agreement to which the Company is a party or by which it is bound, providing for any of the events set forth in clauses (i) through (iv) above.

     “ Closing ” means, individually or collectively, the closing of the purchase and sale of the Initial Closing Shares, Second Closing Shares, Third Closing Shares and/or Additional Shares, as applicable.

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     “ Closing Date ” means, individually or collectively, the Initial Closing Date, the Second Closing Date, Third Closing Date and/or any Additional Closing Date, as applicable.

     “ Code ” means the Internal Revenue Code of 1986, as amended, and the Regulations thereunder.

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

     “ Common Stock ” means the common stock of the Company, par value US$0.01 per share (as amended by the Amendment) , and any other class of securities into which such securities may hereafter be reclassified or changed into.

     “ 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, rights, options, warrants 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 ” shall have the meaning assigned to such term in the preamble hereto.

     “ Company Action ” means any of the actions or events set forth in Section 4.14(a) hereof.

     “ Company Counsel ” means Reitler, Brown, & Rosenblatt LLC with offices located at 800 Third Avenue, New York, NY 10022.

     “ Company Disclosure Schedules ” shall have the meaning assigned to such term in Section 3.1.

     “ Company Intellectual Property Rights ” shall have the meaning assigned to such term in Section 3.1(o) .

     “ Company Party ” shall have the meaning assigned to such term in Section 4.8(b) .

     “ Company Wire Transfer Instructions ” means, for each Closing, the most recent wire transfer instructions delivered by the Company to the Purchaser prior to the Closing Date for such Closing.

     “ Contract(s) ” means any of the agreements, contracts, leases, powers of attorney, notes, loans, evidence of indebtedness, purchase orders, letters of credit, settlement agreements, franchise agreements, undertakings, covenants not to compete, employment agreements, licenses, instruments, obligations, commitments, understandings, policies, purchase and sales orders, quotations and other executory commitments to which any Person is a party or to which any of the assets of such person is subject, whether oral or written, express or implied.

     “ Conversion Notices ” means the notices and other documentation, which shall be reasonably acceptable to the Purchaser, evidencing the irrevocable conversion of the Outstanding Preferred Stock into Common Stock as of the Initial Closing, to the extent required under Section 2.12(a)(i) and (ii).

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     “ Conversion Warrant(s) ” means, individually and collectively, the Common Stock purchase warrants, in the form of Exhibit C attached hereto, to be issued by the Company pursuant to Section 2.9 to the holders of Outstanding Preferred Stock who convert their shares of Outstanding Preferred Stock into Common Stock.

     “ Cost Of Goods Sold ” means one hundred twenty percent (120%) of the direct costs and the overhead cost allocation of manufacturing and of supplying Product calculated in accordance with Parent’s accounting methods consistently applied, which methodology shall be calculated in compliance with GAAP.

     “ DEA ” means the United States Drug Enforcement Administration or any successor agency having the administrative authority to enforce the controlled substances laws and regulations of the United States.

     “ Discussion Time ” shall have the meaning assigned to such term in Section 3.2 (s).

     “ Environmental Laws ” means any federal, state, local or foreign statute, law, ordinance, regulation, rule, code, treaty, writ or order and any enforceable judicial or administrative interpretation thereof, including any judicial or administrative order, consent decree, judgment, stipulation, injunction, permit, authorization, policy, opinion, or agency requirement, in each case having the force and effect of law, relating to pollution, contamination, protection, investigation or restoration of the environment, health and safety or natural resources, including, without limitation, noise, odor, wetlands, or the use, handling, presence, transportation, treatment, storage, disposal, release, threatened release or discharge of Hazardous Materials.

     “ Environmental Permits ” means any permit, approval, identification number, license and other authorization required under any applicable Environmental Law.

     “ Epic Disclosure Schedules ” shall have the meaning assigned to such term in Section 3.2.

     “ Epic Intellectual Property Rights ” shall have the meaning assigned to such term in Section 3.2(m) .

     “ Epic Material Contracts ” shall have the meaning assigned to such term in Section 3.2(l) .

     “ Epic Party ” shall have the meaning assigned to such term in Section 4.8(a) .

     “ ERISA ” means the Employee Retirement Income Security Act of 1974, as amended, and the regulations promulgated thereunder.

     “ ERISA Affiliate ” means any entity or trade or business (whether or not incorporated) other than the Company that together with the Company, is considered under common control and treated as a single employer under Section 4.14(b), (c), (m) or (o) of the Code.

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

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     “ Exempt Issuance ” means the issuance of (a) shares of Common Stock or options to purchase Common Stock to employees, consultants, officers or directors of the Company pursuant to any stock or option plan existing on the date hereof and disclosed in the Company Disclosure Schedules or, subject to Section 4.14(a)(ii), duly adopted by a majority of the independent members of the Board of Directors or a majority of a committee of independent members of the Board of Directors established for such purpose, (b) securities upon the exercise or exchange of or conversion of any securities of the Company outstanding on the date of this Agreement and disclosed in the Company Disclosure Schedules, including Outstanding Preferred Stock, pursuant to the terms thereof, provided that such securities have not been amended since the date of this Agreement to increase the number of securities or to decrease the exercise, exchange or conversion price of any such securities, except for adjustments required by the terms thereof, (c) up to a maximum of 2,000,000 shares of Common Stock or Common Stock Equivalents in any rolling 12 month period to consultants, vendors, financial institutions or lessors in connection with services (including the provision of Permitted Indebtedness) provided by such Persons referred to in this clause (c), 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, and provided that none of such shares may be registered for sale or resale by any such holders, and provided further that issuances described in this clause (c) are approved by a majority of the independent members of the Board of Directors, (d) securities as a dividend or distribution on any of the Securities issued pursuant to this Agreement, (e) shares of Common Stock upon the exercise of the Conversion Warrants and (f) securities issued in connection with any stock split, stock dividend or recapitalization of the Common Stock.

     “ Existing Preferred Stock ” means the issued and outstanding shares of Series B Preferred Stock and Series C Preferred Stock.

     “ Facility ” shall have the meaning assigned to such term in the Preamble hereof.

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

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

     “ Fundamental Transaction ” means any transaction whereby (a) the Company effects any merger or consolidation of the Company with or into another Person, (b) the Company effects any sale of all or substantially all of its assets in one transaction or a series of related transactions, (c) a tender offer or an exchange offer (whether by the Company or another Person) is completed pursuant to which holders of Common Stock are permitted to tender or exchange their shares for other securities, cash or property, or (d) the Company effects any reclassification of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash or property.

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

     “ GMP ” means current Good Manufacturing Practice Regulations promulgated by the U.S. Food and Drug Administration under the authority of the Federal Food, Drug, and Cosmetic Act.

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     “ Governmental Approval ” means any and all permits, licenses, approvals, and authorizations required by any governmental agency or quasi-governmental agency as a prerequisite to the development, manufacturing, packaging, marketing, and selling of the Products.

     “ First Commercial Sale ” means with respect to a Product, the first sale to an unaffiliated third party by Parent or by a third party designated by Parent to market and sell a Product. First Commercial Sale shall not include transfer of reasonable quantities of any free samples of a Product or reasonable quantities of a Product solely for development purposes, such as for use in experimental studies or clinical trials.

     “ Hazardous Materials ” means (a) any petroleum, petroleum products, byproducts or breakdown products, radioactive materials, asbestos-containing materials or polychlorinated biphenyls or (b) any chemical, material or other substance defined or regulated as toxic or hazardous or as a pollutant or contaminant or waste under any applicable Environmental Law.

     “ Identified CR Products ” means the control release drug products that are described in the Identified Products Letter, as hereafter modified or amended in accordance with this Agreement.

     “ Identified IR Products ” means the immediate release drug products that are described in the Identified Products Letter, as hereafter be modified or amended in accordance with this Agreement.

     “ Identified Products Letter ” means a letter or other written documents, duly signed by Parent and the Company, identifying the Identified CR Products, Additional CR Products, Identified IR Products and/or Additional IR Products, as the same may be modified or amended in accordance with this Agreement.

     “ Indemnified Party ” shall have the meaning assigned to such term in Section 4.8(c) .

     “ Indemnifying Party ” shall have the meaning assigned to such term in Section 4.8(c) .

     “ Initial Closing ” means the closing of the purchase and sale of the Initial Closing Shares pursuant to Section 2.1.

     “ Initial Closing Date ” means the first Trading Day when all of the Transaction Documents have been executed and delivered by the applicable parties thereto, and all conditions precedent to (i) the Purchaser’s obligation to purchase the Initial Closing Shares have been satisfied or waived by the Purchaser and (ii) the Company’s obligation to issue and deliver the Initial Closing Shares have been satisfied or waived by the Company.

     “ Initial Closing Shares ” means the shares of Series E Preferred Stock to be purchased by the Purchaser and issued and sold by the Company at the Initial Closing pursuant to Section 2.1 hereof.

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     “ Involuntary Petition ” shall have the meaning assigned to such term in Section 2.11(a)(vi) .

     “ Liens ” means a lien, charge, security interest, encumbrance, right of first refusal, preemptive right or other restriction.

     “ Lock-Up Period ” shall have the meaning assigned to such term in Section 4.16.

     “ Material Adverse Effect ” means, as to the Company, the Parent or the Purchaser, as the case may be, any of (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 or condition (financial or otherwise) of the Company and the Subsidiaries, taken as a whole, or the Parent and the Purchaser, taken as a whole, as the case may be, or (iii) a material adverse effect on the ability of the Company, on the one hand, or the Parent and/or the Purchaser, on the other hand, to perform in any material respect on a timely basis their respective obligations under this Agreement or any of the other Transaction Documents.

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

     “ Milestone Delivery ” shall have the meaning assigned to such term in Section 2.10(d) .

     “ Milestone Delivery Date ” shall have the meaning assigned to such term in Section 2.10(d) .

     “ Milestone Shares ” means the shares of Series E Preferred Stock to be issued by the Company to the Purchaser pursuant to Sections 2.10(a) and/or 2.10(b) hereof.

     “ Minimum Share Requirement ” means (i) a number of shares of Series E Preferred Stock equal to ninety percent (90%) of the aggregate number of shares of Series E Preferred Stock purchased by the Purchaser at all of the then applicable Closings or (ii) following the conversion by the Purchaser of the Series E Preferred Stock, a number of shares of Common Stock equal to ninety percent (90%) of the number of shares of Common Stock so converted.

     “ Net Sales ” means, with respect to sales of a Product, the gross amount invoiced by Parent or its Affiliates to unaffiliated third parties purchasing a Product (including, but not limited to, any royalty payments, up-front payments, licensing fees, milestone payments and other consideration paid to Parent or its Affiliates with respect to a Product (whether such payments, fees and other consideration were received by Parent or its Affiliates prior to, or after, the First Commercial Sale)), less the following items:

     (i) trade, cash, quantity and promotional discounts which effectively reduce the net selling price;

     (ii) excise, sales, value added or other taxes imposed upon and paid with respect to such sales (excluding taxes based on income);

     (iii) freight, insurance and other transportation charges reasonably incurred in shipping the Product to third parties and included in the amount

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invoiced to such third parties and amounts repaid or credited by reason of rejections, defects, recalls or returns or retroactive price reductions;

     (iv) all shelf stock adjustments, charge back payments, discounts and rebates (whether mandated or otherwise) granted to managed health care organizations or to federal, state and local governments, their agencies, and purchasers and reimbursers or to trade customers including, but not limited to, wholesalers and chain and pharmacy buying groups and charge back payments, discounts and rebates (whether mandated or otherwise) charged by national or local government;

     (v) accounts receivable or other bad debt write-offs or reductions resulting from a purchaser failing to pay all or any portion of an invoice; and

     (vi) if Parent or its Affiliates are marketing a Product, ten percent (10%) of the Net Sales amount determined after the reductions in (i) – (v) above, for marketing expenses.

Net Sales shall be determined from the books and records of Parent or its Affiliates. Net Sales exclude:

     (i) the transfer of reasonable and customary quantities of free sample of a Product and the transfer of a Product as clinical trial materials, other than for subsequent resale;

     (ii) sales or transfer of a Product among a Party and its Affiliates unless the receiving Party is the consumer or user of the Product; and

     (iii) use by a Party of a Product in connection with the securing or regulatory approval or validating of a manufacturing process or the obtaining of other necessary marketing approvals for a Product (unless such Product is subsequently sold).

     “ Notice of Acceptance ” means a written notice from the Parent to the Company notifying the Company that the Parent has received an acknowledgement letter from the FDA that the FDA accepted for filing an ANDA for an Identified CR Product and/or Identified IR Product as provided in 21 C.F.R. 314.101(b)(2), which such written notice from the Parent shall attach as an exhibit a copy of such acknowledgement letter from the FDA.

     “ Notice of Approval ” means a written notice from the Parent to the Company notifying the Company that the Parent has received from the FDA either (x) an approval letter under 21 C.F.R. 314.105 or (y) an approvable letter under 21 C. F.R. 314.110 in respect of an ANDA for an Identified CR Product and/or Identified IR Product, which such written notice from the Parent shall attach as an exhibit a copy of such approval letter or such approvable letter from the FDA.

     “ Outstanding Preferred Stock ” means the outstanding shares of Series B Preferred Stock, Series C Preferred Stock and Series D Preferred Stock collectively.

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     “ Parent ” shall have the meaning assigned to such term in the preamble hereto.

     “ Parent Financial Statements ” shall have the meaning assigned to such term in Section 3.2(h) .

     “ Party(ies) ” means the Company and/or Parent.

     “ 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.

     “ Permitted Indebtedness ” means (a) the indebtedness of the Company existing on the Initial Closing Date as set forth in Schedule 3.1(cc) of the Company Disclosure Schedules and (b) non-equity linked lines of credit or term loans, lease obligations and/or purchase money indebtedness of up to $1,000,000 in the aggregate.

     “ Pharmaceutical Product ” means each product subject to the jurisdiction of the FDA under the FDCA that is manufactured, packaged, labeled, tested, distributed, sold, and/or marketed by the Company (or any of its Subsidiaries) or the Parent, as the case may be.

     “ Preferred Stock ” means shares of Series B Preferred Stock, Series C Preferred Stock, Series D Preferred Stock, Series E Preferred Stock or any other equity security or capital stock having one or more rights, whether relating to dividends, redemption, liquidation, dissolution, voting or otherwise, senior to the Common Stock.

     “ Preferred Stock Equivalents ” means any securities of the Company or the Subsidiaries which would entitle the holder thereof to acquire at any time Preferred Stock, including without limitation, any debt, preferred stock, rights, options, warrants or other instruments that is at any time convertible into or exercisable for, otherwise entitles the holder thereof to receive, Preferred Stock.

     “ Proceeding ” means an action, claim, suit, investigation or proceeding (including, without limitation, an investigation or partial proceeding, such as a deposition), whether commenced or threatened.

     “ Product(s) ” shall have the meaning assigned to such term in Section 5.2.

     “ Product Fee ” shall have the meaning assigned to such term in Section 5.3(a) .

     “ Profit ” means Net Sales less Cost of Goods Sold. The parties acknowledge and agree that if Parent licenses the rights to one or more Products, the initial payments received by Parent from the licensee will represent a repayment or reimbursement of the Cost of Goods Sold and none of such payments will constitute Profit until the Cost of Goods Sold has been repaid or reimbursed in full.

     “ Proxy Statement ” shall have the meaning assigned to such term in Section 4.10(a) .

     “ Purchaser ” shall have the meaning assigned to such term in the preamble hereto.

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     “ Purchaser Counsel ” means Wolff & Samson PC with offices located at One Boland Drive, West Orange, New Jersey 07052.

     “ Purchaser Directors ” shall have the meaning assigned to such term in Section 4.11(a) .

     “ Receiving Party ” shall have the meaning set forth in Section 5.4(f) .

     “ Required Approvals ” shall have the meaning assigned 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 from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule.

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

     “ Second Closing ” means the closing of the purchase and sale of the Second Closing Shares pursuant to Section 2.3.

     “ Second Closing Date ” means the fifth Trading Day following the Special Meeting of Stockholders at which the Shareholder Approval is obtained, provided that all conditions precedent to (i) the Purchaser’s obligation to purchase the Second Closing Shares have been satisfied or waived by the Purchaser and (ii) the Company’s obligation to issue and deliver the Second Closing Shares have been satisfied or waived by the Company.

     “ Second Closing Shares ” means the shares of Series E Preferred Stock to be purchased by the Purchaser and issued and sold by the Company on the Second Closing Date pursuant to Section 2.3 hereof.

     “ Securities ” means the Initial Closing Shares, the Second Closing Shares, the Third Closing Shares, the Additional Shares, the Milestone Shares, the Warrants and the Underlying Shares.

     “ Securities Act ” shall have the meaning assigned to such term in the recitals hereto.

     “ Series B Preferred Stock ” means the issued and outstanding shares of Series B Preferred Stock, par value $0.01 per share, of the Company.

     “ Series C Preferred Stock ” means the issued and outstanding shares of Series C Preferred Stock, par value $0.01 per share, of the Company.

     “ Series D Preferred Stock ” means the issued and outstanding shares of the Company’s Series D 8% Convertible Preferred Stock, par value $0.01 per share, of the Company.

     “ Series E Preferred Stock ” means the issued and outstanding shares of the Company’s Series E Convertible Voting Preferred Stock, par value $0.01 per share, of the Company.

     “ Shareholder Approval ” means the Authorized Share Approval and any other approval as may be required by the applicable rules and regulations of the Trading Market from the

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shareholders of the Company with respect to the transactions contemplated by the Transaction Documents.

     “ Short Sales ” shall include all “short sales” as defined in Rule 200 of Regulation SHO under the Exchange Act.

     “ Special Meeting of Stockholders ” means the special meeting of the Company’s stockholders to be called and held by the Company pursuant to Section 4.10 hereof.

     “ Subsidiary ” means any entity in which the Company holds greater than fifty percent (50%) of voting securities, or of which representatives or designees of the Company constitute a majority of such entity’s board of directors or other governing body, each of which is set forth on Schedule 3.1(a) of the Company Disclosure Schedules and shall, where applicable, also include any direct or indirect subsidiary of the Company formed or acquired after the date hereof.

     “ Superior Proposal ” means any proposal (on its most recently amended or modified terms, if amended or modified) by any Person which is not an Affiliate of the Company (i) involving the acquisition of a majority equity interest in, or all or substantially all of the assets and liabilities of, the Company, and (ii) with respect to which the Board of Directors (A) determines in good faith that such proposal, if accepted, is reasonably likely to be consummated on a timely basis, taking into account all legal, financial, regulatory and other aspects of such proposal and the Person or Persons making such proposal, and (B) determines in its good faith judgment to be more favorable to the Company’s stockholders than the transactions contemplated by this Agreement and the other Transaction Documents taking into account all relevant factors (including whether, in the good faith judgment of the Board of Directors, the Person or Persons making such proposal is reasonably able to finance the transaction, and any proposed changes to this Agreement that may be proposed by the Purchaser in response to such proposal).

     “ Supplemental Company Schedules ” shall have the meaning assigned to such term in Section 4.17(a) .

     “ Taxes ” means any federal, state, local or foreign income, gross receipts, franchise, estimated, alternative, minimum, add-on minimum, sales, use, transfer, registration, ad valorem, value added, excise, natural resources, severance, stamp, occupation, premium, windfall profit, environmental (including taxes under Section 59A of the Code), customs duties, real property, personal property, capital stock, employment, profits, withholding, disability, intangibles, withholding, social security, unemployment, disability, payroll, license, employee or other tax or levy, of any kind whatsoever, including any interest, penalties, or additions to tax in respect of the foregoing whether disputed or not.

     “ Tax Returns ” means any report, return (including information return), claim for refund, declaration or statement relating to Taxes, including any schedule or attachment thereto, and including any amendments thereof.

     “ TD Bank ” shall have the meaning set forth in Section 2.2(b)(iii) .

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     “ TD Loan Agreement ” shall have the meaning set forth in Section 2.2(b)(iii) .

     “ Ten Percent Stockholders ” means the holders of ten percent (10%) or more of the issued and outstanding shares of Common Stock on the Initial Closing Date, after giving effect to the conversion of the Outstanding Preferred Stock into Common Stock in accordance with the Conversion Notices.

     “ Term ” shall have the meaning set forth in Section 5.1(a) .

     “ Third Closing ” means the closing of the purchase and sale of the Third Closing Shares pursuant to Section 2.5.

     “ Third Closing Date ” means the first Trading Day following the one year anniversary of the Initial Closing Date, provided that all conditions precedent to (i) the Purchaser’s obligation to purchase the Third Closing Shares have been satisfied or waived by the Purchaser and (ii) the Company’s obligation to issue and deliver the Third Closing Shares have been satisfied or waived by the Company.

     “ Third Closing Shares ” means the shares of Series E Preferred Stock to be purchased by the Purchaser and issued and sold by the Company on the Third Closing Date pursuant to Section 2.5 hereof.

     “ Trading Day ” means a day on which the Common Stock is traded on the Trading Market.

     “ Trading Market ” means the primary market or exchange on which the Common Stock is listed or quoted for trading on the date in question, including the American Stock Exchange, the Nasdaq Capital Market, the New York Stock Exchange, the Nasdaq Global Market, the Nasdaq Global Select Market or the OTC Bulletin Board.

     “ Transaction Documents ” means this Agreement and the Warrants.

     “ Transfer ” means, as to any share of Series E Preferred Stock purchased by the Purchaser hereunder, to directly or indirectly sell, assign, transfer, offer, grant a participation in, mortgage, pledge, hypothecate, create a security interest in or Lien upon, encumber, donate, contribute, place in trust, enter into any voting agreement in respect of, or otherwise dispose of, such share of Series E Preferred Stock, provided , however , (i) the conversion by the Holder of any shares of Series E Preferred Stock into Common Stock shall not be deemed a “Transfer” for purposes hereof and (ii) any sale, transfer conveyance, assignment or other disposition in connection with a Fundamental Transaction shall not be deemed a “Transfer” hereunder.

     “ Transfer Agent ” means Jersey Transfer and Trust Company.

     “ Underlying Shares ” means the shares of Common Stock issuable upon exercise of the Warrants.

     “ Voting Agreement ” means the written agreement, in the form of Exhibit D attached hereto, of all of the Company’s officers, directors and Ten Percent Stockholders to vote all

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Common Stock over which such Persons have voting control (i) as of the record date for the Special Meeting of Stockholders in favor of the Authorized Share Approval and Shareholder Approval and (ii) for the election or appointment of the Purchaser Directors to the Board of Directors.

     “ Warrant(s) ” means, individually and collectively, the Common Stock purchase warrant, in the form of Exhibit E attached hereto, to be executed and delivered by the Company to the Purchaser in accordance with Sections 2.2(a)(iv), 2.4(a)(iii), 2.6(a)(iii), 2.10(a) and 2.10(b) hereof, which Warrants shall, subject to the terms therein, be exercisable immediately upon issuance and have a term of exercise equal to seven (7) years from the date of issuance.

ARTICLE II
PURCHASE AND SALE

     2.1 Initial Closing . On the Initial Closing Date, upon the terms and subject to the conditions set forth herein, the Company agrees to issue and sell, and the Purchaser agrees to purchase, One Thousand (1,000) shares of Series E Preferred Stock. In consideration of the issuance and sale by the Company of the Initial Closing Shares, the Purchaser agrees to pay to the Company the sum of One Million Dollars ($1,000,000.00) by wire transfer in accordance with the Company Wire Transfer Instructions. Upon satisfaction of the applicable conditions set forth in this Article II, the Initial Closing shall occur at the offices of the Purchaser Counsel, or such other location as the parties shall mutually agree.

     2.2 Initial Closing Deliveries .

          (a) On the Initial Closing Date, the Company shall deliver or cause to be delivered to the Purchaser the following:

     (i) this Agreement duly executed by the Company;

     (ii) a legal opinion of Company Counsel, which shall be reasonably satisfactory to the Purchaser and Purchaser Counsel;

     (iii) a certificate evidencing the Initial Closing Shares, registered in the name of the Purchaser;

     (iv) a Warrant registered in the name of the Purchaser to purchase up to Forty Million (40,000,000) shares of Common Stock at an exercise price of Six and 25/100 Cents ($0.0625) per share;

     (v) the Conversion Notices;

     (vi) the Voting Agreement;

     (vii) a certificate, duly executed by its Chief Executive Officer, certifying as to the satisfaction of the conditions set forth in Sections 2.11(b) and 2.12(a);

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     (viii) a certificate executed by its Secretary having attached thereto (A) the Company’s Certificate of Incorporation and the Certificate of Designation, each certified by the Secretary of State of the State of Delaware, as in effect at the Initial Closing Date, (B) the Company’s By-Laws as in effect at the Initial Closing Date, (C) resolutions approved by the Board of Directors authorizing the transactions contemplated hereby, including the appointment of the Purchaser Directors, and (D) good standing certificate with respect to the Company from the Secretary of State of the States of Delaware and New Jersey;

     (ix) pursuant to Section 4.17(a), the Supplemental Company Schedules; and

     (x) the Identified Products Letter.

          (b) On the Initial Closing Date, the Purchaser shall deliver or cause to be delivered to the Company the following:

     (i) this Agreement duly executed by Parent and the Purchaser;

     (ii) the sum of One Million Dollars ($1,000,000.00) by wire transfer in accordance with the Company Wire Transfer Instructions;

     (iii) written confirmation from TD Bank, N.A. (“ TD Bank ”) stating (A) that the transactions contemplated by this Agreement and the other Transaction Documents do not violate any of the terms or conditions of that certain Loan and Security Agreement, dated as of July 18, 2009 (the “ TD Loan Agreement ”), by and among the Parent, Epic RE Holdco, LLC, a Delaware limited liability company, and TD Bank or any of the transactions contemplated thereby, (B) the amount of the loan facility committed to the Parent or its Affiliates pursuant to the TD Loan Agreement, and (C) the amount of such loan facility which remains available to the Parent or its Affiliates under the TD Loan Agreement as of the Initial Closing Date; and

     (iv) the Identified Products Letter.

     2.3 Second Closing . On the Second Closing Date, upon the terms and subject to the conditions set forth herein, the Company agrees to issue and sell, and the Purchaser agrees to purchase, One Thousand (1,000) shares of Series E Preferred Stock Price. In consideration of the issuance and sale by the Company of the Second Closing Shares, the Purchaser agrees to pay to the Company the sum of One Million Dollars ($1,000,000.00) by wire transfer in accordance with the Company Wire Transfer Instructions. Upon satisfaction of the applicable conditions set forth in Article II hereof, the Second Closing shall occur at the offices of the Purchaser Counsel, or such other location as the parties shall mutually agree.

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     2.4 Second Closing Deliveries .

          (a) On the Second Closing Date, the Company shall deliver or cause to be delivered to the Purchaser the following:

     (i) a legal opinion of Company Counsel, which shall be reasonably satisfactory to the Purchaser and Purchaser Counsel;

     (ii) a certificate evidencing the Second Closing Shares, registered in the name of the Purchaser;

     (iii) a Warrant registered in the name of the Purchaser to purchase up to Forty Million (40,000,000) shares of Common Stock at an exercise price of Six and 25/100 Cents ($0.0625) per share;

     (iv) a certificate, duly executed by the inspectors of election appointed for the Special Meeting of Stockholders, certifying the receipt by the Company of the Shareholder Approval;

     (v) a certificate, duly executed by its Chief Executive Officer, certifying as to the satisfaction of the conditions set forth in Sections 2.11(b) and 2.12(b);

     (vi) a certificate executed by its Secretary having attached thereto (A) the Company’s Certificate of Incorporation, certified by the Secretary of State of the State of Delaware, as in effect at the Second Closing Date and evidencing the Authorized Share Approval, (B) the Company’s By-Laws as in effect at the Second Closing Date, (C) resolutions approved by the Board of Directors authorizing the transactions contemplated hereby, and (D) good standing certificate with respect to the Company from the Secretary of State of the States of Delaware and New Jersey; and

     (vii) pursuant to 4.17(a), the Supplemental Company Schedules.

          (b) On the Second Closing Date, the Purchaser shall deliver or cause to be delivered to the Company the following :

     (i) the sum of One Million Dollars ($1,000,000.00) by wire transfer in accordance with the Company Wire Transfer Instructions; and

     (ii) a certificate executed by each of the Parent and the Purchaser certifying as to the accuracy on such Second Closing Date of the representations and warranties of the Parent and the Purchaser contained in Sections 3.2(o), 3.2(p), 3.2(q) and 3.2(r) .

     2.5 Third Closing . On the Third Closing Date, upon the terms and subject to the conditions set forth herein, the Company agrees to issue and sell, and the Purchaser agrees to purchase, One Thousand (1,000) shares of Series E Preferred Stock. In consideration of the issuance and sale by the Company of the Third Closing Shares, the Purchaser agrees to pay to the

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Company the sum of One Million Dollars ($1,000,000.00) by wire transfer in accordance with the Company Wire Transfer Instructions. Upon satisfaction of the applicable conditions set forth in Article II hereof, the Third Closing shall occur at the offices of the Purchaser Counsel, or such other location as the parties shall mutually agree.

     2.6 Third Closing Deliveries .

          (a) On the Third Closing Date, the Company shall deliver or cause to be delivered to the Purchaser the following:

     (i) a legal opinion of Company Counsel, which shall be reasonably satisfactory to the Purchaser and Purchaser Counsel;

     (ii) a certificate evidencing the Third Closing Shares, registered in the name of the Purchaser;

     (iii) a Warrant registered in the name of the Purchaser to purchase up to Forty Million (40,000,000) shares of Common Stock at an exercise price of Six and 25/100 Cents ($0.0625) per share;

     (iv) a certificate, duly executed by its Chief Executive Officer, certifying as to the satisfaction of the conditions set forth in Sections 2.11(b) and 2.12(c);

     (v) a certificate executed by its Secretary having attached thereto (A) the Company’s Certificate of Incorporation, certified by the Secretary of State of the State of Delaware, as in effect at the Third Closing Date, (B) the Company’s By-Laws as in effect at the Third Closing Date, (C) resolutions approved by the Board of Directors authorizing the transactions contemplated hereby, and (D) good standing certificate with respect to the Company from the Secretary of State of the States of Delaware and New Jersey; and

     (vi) pursuant to Section 4.17(a), the Supplemental Company Schedules.

          (b) On the Third Closing Date, the Purchaser shall deliver or cause to be delivered to the Company the following:

     (i) the sum of One Million Dollars ($1,000,000.00) by wire transfer in accordance with the Company Wire Transfer Instructions; and

     (ii) a certificate executed by each of the Parent and the Purchaser certifying as to the accuracy on such Third Closing Date of the representations and warranties of the Parent and the Purchaser contained in Sections 3.2(o), 3.2(p), 3.2(q) and 3.2(r) .

     2.7 Additional Shares . Within ten (10) Business days following the last day of each calendar quarter, beginning with the first calendar quarter following the Initial Closing Date (each such date, an “ Additional Closing Date ”) and continuing for each of the eleven (11)

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calendar quarters thereafter, upon the terms and subject to the conditions set forth herein, the Company agrees to issue and sell, and the Purchaser agrees to purchase, Sixty Two and one-half (62.5) shares of Series E Preferred Stock. In consideration of the issuance and sale by the Company of the Additional Shares, the Purchaser agrees to pay to the Company at each Additional Closing the sum of Sixty Two Thousand Five Hundred Dollars ($62,500.00) by wire transfer in accordance with the Company Wire Transfer Instructions. The total number of Additional Shares shall be Seven Hundred Fifty (750) and the total consideration to be paid by the Purchaser therefor shall be Seven Hundred Fifty Thousand Dollars ($750,000.00) . Upon satisfaction of the applicable conditions set forth in Article II hereof, each Additional Closing shall occur at the offices of the Purchaser Counsel, or such other location as the parties shall mutually agree.

     2.8 Additional Closing Deliveries .

          (a) On each Additional Closing Date, the Company shall deliver or cause to be delivered to the Purchaser the following:

     (i) a certificate evidencing the Additional Closing Shares, registered in the name of the Purchaser;

     (ii) a certificate, duly executed by its Chief Executive Officer, certifying as to the satisfaction of the conditions set forth in Sections 2.11(b) and 2.12(d);

     (iii) a certificate executed by its Secretary having attached thereto resolutions approved by the Board of Directors authorizing the transactions contemplated hereby; and

     (iv) pursuant to Section 4.17(a), the Supplemental Company Schedules.

          (b) On each Additional Closing Date, the Purchaser shall deliver or cause to be delivered to the Company the following:

     (i) the sum of Sixty Two Thousand Five Hundred Dollars ($62,500.00) by wire transfer in accordance with the Company Wire Transfer Instructions; and

     (ii) a certificate executed by each of the Parent and the Purchaser certifying as to the accuracy on such Additional Closing Date of the representations and warranties of the Parent and the Purchaser contained in Sections 3.2(o), 3.2(p), 3.2(q) and 3.2(r) .

     2.9 Offer to Holders of Outstanding Preferred Stock .

          (a) Between the date hereof and the Initial Closing Date, the Company shall use its best efforts to obtain the agreement of the holders of the Outstanding Preferred Stock to convert all of their shares of Outstanding Preferred Stock into Common Stock in accordance with

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the respective terms of the Outstanding Preferred Stock. Such conversion may be contingent upon, and effective as of, the Initial Closing.

          (b) Each holder of Outstanding Preferred Stock who elects to convert their shares of Outstanding Preferred Stock as of the Initial Closing Date shall be entitled to receive from the Company a Conversion Warrant. The Conversion Warrant shall (i) entitle the holder thereof to purchase a number of shares of Common Stock equal to one hundred percent (100%) of the number of shares of Common Stock received by the holder upon conversion of their shares of Outstanding Preferred Stock as of the Initial Closing Date, (ii) have an exercise price of Twenty Five cents ($0.25) per share, (iii) have a “cashless” feature, (iv) have a term of five (5) years from the date of issuance, and (v) not require the Company to register the shares of Common Stock issuable upon exercise thereof.

     2.10 Milestone Shares and Warrants . In consideration of the Parent’s covenants and agreements set forth in Article V, the Company agrees to issue the Milestone Shares and Warrants set forth in this Section 2.10 (as such Milestone Shares and Warrants may be adjusted from time to time for any stock splits, stock dividends, reclassifications and the like):

          (a) With respect to each Identified CR Product and Additional CR Product developed by the Parent at the Facility, (i) the Company agrees to issue and deliver to the Purchaser a Warrant registered in the name of the Purchaser to purchase up to Ten Million (10,000,000) shares of Common Stock at an exercise price of Six and 25/100 Cents ($0.0625) per share within five (5) Business Days following the receipt by the Company from the Parent of each Notice of Acceptance for such Identified CR Product and/or Additional CR Product, up to a maximum of four Warrants for an aggregate of Forty Million (40,000,000) shares, and (ii) the Company agrees to issue to the Purchaser Seven Million (7,000,000) shares of Common Stock, and deliver a certificate evidencing such shares registered in the name of the Purchaser, within five (5) Business Days following the receipt by the Company from the Parent of each Notice of Approval for such Identified CR Product and/or Additional CR Product, up to a maximum of an aggregate of Twenty Eight Million (28,000,000) shares.

          (b) With respect to each Identified IR Product and Additional IR Product developed by the Parent at the Facility, (i) the Company agrees to issue and deliver to the Purchaser a Warrant registered in the name of the Purchaser to purchase up to Four Million (4,000,000) shares of Common Stock at an exercise price of Six and 25/100 Cents ($0.0625) per share within five (5) Business Days following the receipt by the Company from the Parent of each Notice of Acceptance for such Identified IR Product and/or Additional IR Product, up to a maximum of four Warrants for an aggregate of Sixteen Million (16,000,000) shares, and (ii) the Company agrees to issue to the Purchaser Three Million (3,000,000) shares of Common Stock, and deliver a certificate evidencing such shares registered in the name of the Purchaser, within five (5) Business Days following the receipt by the Company from the Parent of each Notice of Approval for such Identified IR Products and/or Additional IR Products, up to a maximum of an aggregate of Twelve Million (12,000,000) shares.

          (c) On or before any Milestone Delivery Date, the Purchaser shall deliver or cause to be delivered to the Company a certificate executed by each of the Parent and the Purchaser certifying as to the accuracy as of such Milestone Delivery Date of the representations

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and warranties of the Parent and the Purchaser contained in Sections 3.2(o), 3.2(p), 3.2(q) and 3.2(r) .

          (d) Each date upon which the Company is obligated to deliver Milestone Shares and/or Warrants to the Purchaser shall be hereinafter referred to as a “ Milestone Delivery Date ” and each such delivery, a “ Milestone Delivery .”

     2.11 General Conditions .

          (a) The obligations of the Company set forth in this Article II and in connection with each Closing and Milestone Delivery are subject to the following conditions being met or waived by the Company:

     (i) the accuracy in all material respects when made and on the Initial Closing Date of the representations and warranties of each of the Parent and the Purchaser contained herein, other than representation and warranties that are qualified by “Material Adverse Effect” or “materiality,” which shall be true and correct in all respects;

     (ii) all obligations, covenants and agreements of each of the Parent and the Purchaser contained herein or the other Transaction Documents and required to be performed at or prior to the applicable Closing Date and Milestone Delivery Date shall have been performed in accordance with the terms set forth herein or therein;

     (iii) no governmental entity, nor any federal or state court of competent jurisdiction or arbitrator shall have enacted, issued, promulgated, enforced or entered any statute, rule, regulation, executive order, decree, judgment, injunction or arbitration award or finding or other order (whether temporary, preliminary or permanent), in any case which is in effect and which prevents or prohibits consummation of the transactions, or any of them, contemplated in this Agreement;

     (iv) the delivery by the Parent and/or the Purchaser of the items set forth in Sections 2.2(b), 2.4(b), 2.6(b) and 2.8(b) of this Agreement, as applicable;

     (v) there shall have been no filing by either the Parent or the Purchaser of a voluntary petition in bankruptcy, or a petition or an answer seeking reorganization or an arrangement with creditors, or to take advantage of any bankruptcy, reorganization, insolvency, readjustment of debt, dissolution or liquidation laws or statutes, or an answer admitting the material allegations of a petition filed against either the Parent or the Purchaser in any proceeding under any such law; and

     (vi) there shall have not been filed against either the Parent or the Purchaser an involuntary petition seeking reorganization of either the Parent or the Purchaser or the appointment of a receiver, trustee, custodian or liquidator of

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either the Parent or the Purchaser or a substantial part of their respective assets, or an involuntary petition under any bankruptcy, reorganization or insolvency law of any jurisdiction, whether now or hereafter in effect (any of the foregoing petitions being hereinafter referred to as an “ Involuntary Petition ”), which such Involuntary Petition shall not have been contested within ten (10) days, or dismissed within sixty (60) days, after it was filed.

          (b) The obligations of the Purchaser set forth in this Article II and in connection with each Closing and Milestone Delivery are subject to the following conditions being met or waived by the Purchaser:

     (i) the accuracy in all material respects on each Closing Date and each Milestone Delivery Date of the representations and warranties of the Company contained herein, other than (A) representation and warranties that are qualified by “Material Adverse Effect” or “materiality,” which shall be true and correct in all respects, and (B) as such representations and warranties are supplemented or amended by the Supplemental Company Schedules;

     (ii) all obligations, covenants and agreements of the Company contained herein or the other Transaction Documents and required to be performed at or prior to the applicable Closing Date and Milestone Delivery Date shall have been performed in accordance with the terms set forth herein or therein;

     (iii) the delivery by the Company of the items set forth in Sections 2.2(a), 2.4(a), 2.6(a) and 2.8(a) of this Agreement, as applicable;

     (iv) the Company shall have obtained all requisite governmental approvals, authorizations, consents and waivers, if any, required to consummate the transactions contemplated herein;

     (v) no governmental entity, nor any federal or state court of competent jurisdiction or arbitrator shall have enacted, issued, promulgated, enforced or entered any statute, rule, regulation, executive order, decree, judgment, injunction or arbitration award or finding or other order (whether temporary, preliminary or permanent), in any case which is in effect and which prevents or prohibits consummation of the transactions, or any of them, contemplated in this Agreement;

     (vi) neither the Chief Executive Officer nor the Chief Financial Officer of the Company shall have failed to provide, with respect to any SEC Report after the date of this Agreement, any necessary certification in the form required under the Sarbanes-Oxley Act;

     (vii) there shall have been no filing by the Company of a voluntary petition in bankruptcy, or a petition or an answer seeking reorganization or an arrangement with creditors, or to take advantage of any bankruptcy,

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reorganization, insolvency, readjustment of debt, dissolution or liquidation laws or statutes, or an answer admitting the material allegations of a petition filed against it in any proceeding under any such law;

     (viii) there shall have not been filed against the Company an Involuntary Petition, which such Involuntary Petition shall not have been contested within ten (10) days, or dismissed within sixty (60) days, after it was filed; and

     (ix) there shall not be any suit, claim, action, proceeding or investigation instituted, commenced, pending or threatened by or before any domestic or foreign governmental, administrative, judicial or regulatory authority that would or that seeks or is reasonably likely to (i) impose material limitations on the ability of Parent or Purchaser to consummate the transactions contemplated by the Transaction Documents, (ii) restrain, enjoin, prevent, prohibit or make illegal, or impose material limitations on, the consummation of the transactions contemplated by the Transaction Documents, or the ability of the Company to operate its business in the manner presently conducted, or (iii) find or impose material criminal, civil, common law or administrative liability related to goods or services provided by the Company to its customers.

     2.12 Additional Closing Conditions .

          (a) The obligation of the Purchaser to purchase the Initial Closing Shares is subject to the further condition precedent that on or prior to the Initial Closing Date (i) all of the outstanding Series B Preferred Stock and Series C Preferred Stock shall have been converted into an aggregate of 9,182,652 shares of Common Stock in accordance with the terms thereof, (ii) such number of shares of outstanding Series D Preferred Stock as the Purchaser shall determine, in its sole discretion, shall have been converted into Common Stock in accordance with the terms thereof, (iii) the Company shall have effected the delisting of the Common Stock from the American Stock Exchange (now known as NYSE Alternext U.S) and the Trading Market shall be such Trading Market as shall be required under any agreement, instrument or security to which the Company may be a party or may be bound and (iv) none of the transactions contemplated by this Agreement or the other Transaction Documents require the consent or approval of the “Purchasers” under (w) the Securities Purchase Agreement, dated as of March 15, 2006, among the Company and the “Purchasers” identified therein, (x) the Securities Purchase Agreement, dated as of April 24, 2007, among the Company and the “Purchasers” identified therein, (y) the Securities Purchase Agreement, dated as of July 17, 2007, among the Company and the “Purchasers” identified therein, and (z) the Securities Purchase Agreement, dated as of September 15, 2008, among the Company and the “Purchasers” identified therein.

          (b) The obligation of the Purchaser to purchase the Second Closing Shares is subject to the further condition precedent that (i) the Initial Closing shall have occurred in accordance with the terms set forth herein and (ii) the Shareholder Approval shall have been obtained no later than the six (6) month anniversary of the Initial Closing Date.

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          (c) The obligation of the Purchaser to purchase the Third Closing Shares is subject to the further condition precedent that the Initial Closing and the Second Closing shall have occurred in accordance with the terms set forth herein.

          (d) The obligation of the Purchaser to purchase the Additional Shares is subject to the further condition that (i) each of the Closings which, pursuant to the terms hereof, should have occurred prior to each Additional Closing Date shall have occurred in accordance with the terms set forth herein and (ii) as to each Additional Closing Date following the Third Closing Date, there shall have been no Material Adverse Effect with respect to the Company since the Third Closing Date.

          (e) All conditions precedent to the obligations of the Purchaser and Parent set forth herein are for the sole benefit of such parties and may be waived, in whole or in part, by such parties in their sole and absolute discretion. The waiver of any such condition, in whole or in part, any at any time or from time to time, shall not act or serve as a waiver of such condition at any other time and any and all such waivers must be in writing and signed by a duly authorized officer or representative of such parties.

     2.13 Company Loans . (a) If the Company determines, in its reasonable judgment, that additional funding is required for the development of its pharmaceutical products, then, as an integral part of the transactions contemplated by this Agreement, subject to the mutual agreement of the Company and Parent, either:

     (i) the Company shall issue, and the Purchaser shall purchase, such additional number of shares of Series E Preferred Stock or Common Stock from the Company, upon such terms and conditions as may be agreed upon by the Company and Parent; or

     (ii) On or after September 15, 2011, the Parent shall provide a loan to the Company, in an aggregate principal amount not to exceed $1,000,000, which such loan shall (A) have an interest rate equal to the then prime interest rate as published in the Wall Street Journal on the date of such loan, (B) mature on the second (2 ^nd ) anniversary of date of such loan, and (C) be on such other terms and conditions which are customary and reasonable to loans of a similar nature and which are mutually agreed upon between Parent and the Company.

ARTICLE III
REPRESENTATIONS AND WARRANTIES

     3.1 Representations and Warranties of the Company . Except as set forth in the disclosure schedules delivered to the Purchaser concurrently herewith (the “ Company Disclosure Schedules ”), as such Company Disclosure Schedules may be supplemented or amended by any Supplemental Company Schedules in accordance with Section 4.17(a), which such Company Disclosure Schedules and such Supplemental Company Schedules, if any, shall be deemed a part hereof and to qualify any representation or warranty otherwise made herein to the extent of such disclosure, the Company hereby makes the representations and warranties set forth below to the Purchaser as of the date hereof and as of the Initial Closing Date:

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          (a) Subsidiaries . All of the direct and indirect Subsidiaries of the Company are set forth on Schedule 3.1(a) of the Company Disclosure Schedules. 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 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, then all other references in the Transaction Documents to the Subsidiaries or any of them will be disregarded.

          (b) Organization and Qualification . The copies of the Company’s Certificate of Incorporation, as amended, and Bylaws, as filed as exhibits to the Company’s SEC Reports are complete and correct copies thereof as in effect on the date hereof. Except as provided in Schedule 3.1(b) of the Company Disclosure Schedules, true and complete copies of all minute books of the Company and the Subsidiaries have been made available by the Company to the Purchaser. 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 (as applicable), 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 or default of any of the provisions of its respective certificate or articles of incorporation or formation (as applicable), 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 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 each of the Transaction Documents and otherwise to carry out its obligations hereunder and thereunder. The execution and delivery of each of the 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 its stockholders in connection therewith other than in connection with the Required Approvals. Each Transaction Document 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 of the Transaction Documents by the Company and the consummation by the Company of the other transactions

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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, subject to the Authorized Share Approval 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, 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.

          (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 notice and/or application(s) to each applicable Trading Market for the issuance and sale of the Securities and the listing of the Underlying Shares for trading thereon in the time and manner required thereby, (ii) the filing of Form D with the Commission and such filings as are required to be made under applicable state securities laws, and (iii) Shareholder Approval (clauses (i), (ii) and (iii) collectively, the “ Required Approvals ”).

          (f) Issuance of the Securities . Subject to the Authorized Share Approval, 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. On or before the Initial Closing Date, the Company will reserve from its duly authorized capital stock a number of shares of Common Stock for issuance of the Underlying Shares in respect of the Warrants being issued at the Initial Closing at least equal to the Actual Minimum on the date hereof. After the Authorized Share Approval, the Company will reserve from its duly authorized capital stock a number of shares of Common Stock for issuance of the Underlying Shares at least equal to the Actual Minimum on the date hereof.

          (g) Capitalization . The capitalization of the Company is as set forth on Schedule 3.1(g) of the Company Disclosure Schedules. Except as set forth in Schedule 3.1(g) of the Company Disclosure Schedules, 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 or the issuance of shares of Common Stock to employees pursuant to the Company’s employee stock purchase plan. No Person has any right of first refusal, preemptive right, right of participation, or any similar right to participate in the transaction contemplated by the Transaction Documents. Except as a result

25

of the purchase and sale of the Securities or as set forth on Schedule 3.1(g) of the Company Disclosure Schedules, there are no outstanding options, warrants, script 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 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. The issuance and sale of the Securities will not obligate the Company to issue shares of Common Stock or other securities to any Person (other than the Purchaser) and will not result in a right of any holder of Company securities to adjust the exercise, conversion, exchange or reset price under any of such securities. All of the outstanding shares of capital stock of the Company are 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. Other than the Shareholder Approval, no further approval or authorization of any stockholder, the Board of Directors or others is required for the issuance and sale of the Securities. Except as set forth in Schedule 3.1(g) of the Company Disclosure Schedules, 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 . Except as set forth in Schedule 3.1(h) of the Company Disclosure Schedules, the Company has filed all reports, schedules, forms, statements and other documents required to be filed by it 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 and the rules and regulations of the Commission promulgated thereunder, 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 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. The books, records and accounts of the Company (i) are in all material respects true and correct, (ii) have been and are being maintained in accordance with reasonable business practices and customary

26

internal controls procedures on a basis consistent with prior years, and (iii) accurately and fairly reflect the transactions and dispositions of the assets of the Company. Except as set forth in SEC Reports, the Company maintains a system of internal accounting controls sufficient to provide reasonable assurances that: (i) transactions are executed in accordance with management’s general or specific authorization; (ii) transactions are recorded as necessary (1) to permit preparation of financial statements in conformity with generally accepted accounting principles or any other criteria applicable to such statements, and (2) to maintain accountability for assets; and (iii) the amount recorded for assets on the books and records of the Company is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences.

          (i) Material Changes; Undisclosed Events, Liabilities or Developments . Except as and to the extent set forth on the balance sheet of the Company as of December 31, 2008 included in the Company’s Form 10-Q for the period ended December 31, 2008 or the notes thereto (the “ Company Balance Sheet ”), the Company has no liabilities or obligations of any nature (whether accrued, absolute, contingent or otherwise) that would be required to be reflected on a balance sheet or in notes thereto prepared in accordance with GAAP, except for liabilities or obligations incurred in the ordinary course of business since December 31, 2008 that would not, individually or in the aggregate, have a Material Adverse Effect. Since December 31, 2008, except as specifically disclosed in the SEC Reports filed subsequent to such date or Schedule 3.1(i) of the Company Disclosure Schedules, the Company has conducted its businesses in the ordinary course consistent with past practice and there has not been any:

                    (1) Material Adverse Effect or an event or development that would, individually or in the aggregate, have a Material Adverse Effect;

                    (2) amendment to, or change in, the Company’s Certificate of Incorporation or Bylaws;

                    (3) incurrence, creation or assumption by the Company of (i) any mortgage, deed of trust, security interest, pledge, title retention device or collateral assignment, (ii) any claim, lien, charge, restriction or other encumbrance of any kind on any of the assets or properties of the Company other than obligations or liabilities incurred in the ordinary course of the Company’s business, or (iii) any indebtedness for borrowed money in excess of $10,000;

                    (4) offer, issuance or sale of any debt or equity securities of the Company, or any options, warrants or other rights to acquire from the Company, directly or indirectly, any debt or equity securities of the Company (other than pursuant to the exercise of outstanding employee stock options in accordance with the terms thereof);

                    (5) payment or discharge by the Company of any security interest, lien, claim, or encumbrance of any kind on any asset or property of the Company, or the payment or discharge of any liability other than in the ordinary course of its business;

                    (6) purchase, license, sale, assignment or other disposition or transfer (or any agreement or other arrangement for the purchase, license, sale, assignment or

27

other disposition or transfer) of any of the assets, properties or goodwill of the Company other than in the ordinary course of its business;

                    (7) damage, destruction or loss of any property or asset, whether or not covered by insurance, having (or likely with the passage of time to have) a Material Adverse Effect;

                    (8) declaration, setting aside or payment of any dividend on, or the making of any other distribution in respect of, the capital stock of the Company, any split, combination or recapitalization of the capital stock of the Company or any direct or indirect redemption, purchase or other acquisition of any capital stock of the Company or any change in any rights, preferences, privileges or restrictions of any outstanding security of the Company;

                    (9) change or increase in the compensation payable or to become payable to any (i) of the officers or directors of the Company or (ii) employees of the Company, except in connection with normal employee salary or performance reviews and in the ordinary course of the Company’ business;

                    (10) making by the Company of any loan, advance or capital contribution to, or any investment in, any officer, director or shareholder of the Company or any firm or business enterprise in which any such person had a direct or indirect material interest at the time of such loan, advance, capital contribution or investment;

                    (11) entering into, material amendment of, relinquishment, termination or non-renewal by the Company of any material Contract, other than in the ordinary course of its business;

                    (12) assertion by any customer(s) of the Company of any complaint regarding the Company’ services or products which, if substantiated, would be likely to have a Material Adverse Effect;

                    (13) entering into by the Company of any transaction, Contract or agreement that by its terms requires or contemplates a current and/or future financial commitment, expense or obligation on the part of the Company involving in excess of $100,000, other than in the ordinary course of the Company’ business;

                    (14) any license, transfer or grant of a right under any Intellectual Property Right of the Company; or

                    (15) any agreement made by the Company to provide exclusive services to any person or not to engage in any business activity.

          (j) Litigation . Except as set forth in Schedule 3.1(j) of the Company Disclosure Schedules, 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

28

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, to the knowledge of the Company, 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, and neither the Company or 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. No Company employee or consultant, to the knowledge of the Company, 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, and the continued employment of each such executive officer does not subject 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. The Company has identified in Schedule 3.1(k) of the Company Disclosure Schedules and, if written, has made available to Purchaser true and complete copies of all employment, consulting and severance agreements with directors, officers or employees of or consultants to the Company.

          (l) Compliance . Except as provided in Schedule 3.1(l) , 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 order of any court, arbitrator or governmental body, or (iii) is or has been in violation of any statute, rule or regulation of any governmental authority, including without limitation all foreign, federal, state and local laws applicable to its business and all such laws that affect the environment, except in each case as could not have or reasonably be expected to result in a Material Adverse Effect. Except as provided in Schedule 3.1(l), the Company is in compliance in all material respects with the applicable listing and corporate governance rules and regulations of the applicable Trading Market.

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          (m) Regulatory Permits . The Company and the Subsidiaries possess all certificates, licenses, authorizations and permits issued by the appropriate federal, state, local or foreign regulatory authorities necessary to conduct their respective businesses, except where the failure to possess such permits could not have or 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.

          (n) Title to Assets . Except as set forth on Schedule 3.1(n) of the Company Disclosure Schedules, the Company and the Subsidiaries have good and marketable title in fee simple to all real property owned by them that is material to the business of the Company and the Subsidiaries 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 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 Liens for the payment of federal, state or other taxes, 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.

          (o) Patents and Trademarks . 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, licenses and other intellectual property rights and similar rights necessary or material for use in connection with their respective businesses and which the failure to so have could have a Material Adverse Effect (collectively, the “ Company Intellectual Property Rights ”). All such Company Intellectual Property Rights are enforceable and there is no existing infringement by another Person of any of the Company Intellectual Property Rights. The Company and its Subsidiaries have taken reasonable security measures to protect the secrecy, confidentiality and value of all of the Company Intellectual Property Rights, except where failure to do so could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. Except as provided in Schedule 3.1(o) , none of the Company’s registered, or applied for, Company Intellectual Property Rights have expired or terminated or have been abandoned, or are expected to expire or terminate or expected to be abandoned within three years of the date of this Agreement. There is no claim, action or proceeding being made or brought, or to the knowledge of the Company, being threatened against the Company or its Subsidiaries regarding the Company Intellectual Property Rights, except for any claim, action or proceeding which, if determined against the Company, would not have a Material Adverse Effect. Schedule 3.1(o) of the Company Disclosure Schedules contains a complete list of (i) all Company registrations of any patents, copyrights, mask works, trademarks, service marks, Internet domain names or Internet or World Wide Web URLs or addresses with any governmental or quasi-governmental authority or other body; (ii) all applications, registrations, filings and other formal actions made or taken pursuant to federal, state and foreign laws by the Company to secure, perfect or protect its interest in the Company Intellectual Property Rights, including, without limitation, all patent applications, copyright applications, and applications for registration of trademarks and service marks, (iii) all unregistered copyrights, trademarks and service marks included within the Company Intellectual Property Rights, (iv) all licenses, sublicenses and other agreements as to which the Company is a

30

party and pursuant to which any person is authorized to use any of the Company Intellectual Property Rights, (v) all licenses, sublicenses and other agreements as to which the Company is a party and pursuant to which the Company is authorized to use any the Company Intellectual Property Rights of any third party (excluding generally available off the shelf software) and (vi) all applications, registrations, filings and other formal actions made or taken by the Company or received by the Company from any governmental entity pursuant to federal, state and foreign laws with respect to all Pharmaceutical Products presently being manufactured by the Company.

          (p) 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, and a summary of all such insurance is set forth in Schedule 3.1(p) of the Company Disclosure Schedules. 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.

          (q) Transactions With Affiliates and Employees . Except as set forth in the SEC Reports, none of the officers or directors of the Company and, to the knowledge of the Company, none of the employees of the Company 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 arrangement providing for the furnishing of services to or by, providing for rental of real or personal property to or from, or otherwise requiring payments to or from any officer, director or such employee or, to the 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 or partner, in each case in excess of US$60,000 per annum other than (i) for payment of salary to officers and employees for services rendered, (ii) reimbursement for expenses incurred on behalf of the Company and (iii) for other employee benefits, including stock option agreements under any stock option plan of the Company.

          (r) Certain Fees . Except as set forth on Schedule 3.1(r) of the Company Disclosure Schedules, no brokerage or finder’s fees or commissions are or will be payable by the Company 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 Purchaser 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 3.1(r) that may be due in connection with the transactions contemplated by the Transaction Documents.

          (s) Private Placement . Assuming the accuracy of the Purchaser 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 Purchaser as contemplated hereby. The issuance and sale of the Securities hereunder does not contravene the rules and regulations of the Trading Market.

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          (t) 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 subject to the Investment Company Act.

          (u) Listing and Maintenance Requirements . The Company’s 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.

          (v) No Integrated Offering . Assuming the accuracy of the Purchaser’ 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 the Securities Act or any applicable shareholder approval provisions of any Trading Market on which any of the securities of the Company are listed or designated.

          (w) Taxes . The Company has duly and timely filed with the appropriate Tax authorities or other governmental entities all Tax Returns required to be filed by it. All such Tax Returns are complete and accurate in all respects, except as would not, individually or in the aggregate, have a Material Adverse Effect. All Taxes shown as due on such Tax Returns have been timely paid. Subject to such exceptions as would not, individually or in the aggregate, have a Material Adverse Effect, and except as set forth in Schedule 3.1(w) , (i) the unpaid Taxes of the Company as of the date of the most recent financial statements (in each case, determining such liability for unpaid Taxes as of the date of such financial statements) contained in the SEC Reports did not exceed the reserve for Tax liability (excluding any reserve for deferred Taxes established to reflect timing differences between book and Tax income) set forth on the face of the balance sheets contained in such financial statements, (ii) no deficiencies for Taxes with respect to the Company have been claimed, proposed or assessed by a Tax authority or other governmental entity in writing, (iii) no audit or other proceeding for or relating to any liability in respect of Taxes of the Company is being conducted by any Tax authority or governmental entity, and the Company has not received notification in writing that any such audit or other proceeding is pending, (iv) neither the Company nor any predecessor has waived any statute of limitations in respect of Taxes or agreed to any extension of time with respect to a Tax assessment or deficiency, (v) there are no Tax liens upon any property or assets of the Company except (A) liens for current Taxes not yet due and payable, and (B) liens for Taxes that are being contested in good faith by appropriate proceedings and for which adequate reserves are being maintained in accordance with GAAP, (vi) the Company currently is not the beneficiary of any extension of time within which to file any Tax Return, (vii) the Company has no liability for the Taxes of any person (other than members of the consolidated group of which the Company is the common parent) under Treasury Regulation Section 1.1502 -6 (or any similar provision of state, local, or foreign law), as a transferee or successor, by contract, or otherwise and (viii) the Company has withheld and paid all Taxes required to have been withheld and paid in connection

32

with amounts paid or owing to any employee, independent contractor, creditor, stockholder or other third party. No written claim has been made by an authority in a jurisdiction where the Company does not file Tax Returns that it is or may be subject to taxation by that jurisdiction. The Company has not been a United States real property holding corporation within the meaning of Section 897(c)(2) of the Code during the applicable period described in Section 897(c)(1)(A)(ii) of the Code. The Company has not been a party to any distribution occurring during the two (2) years preceding the date of this Agreement in which the parties to such distribution treated the distribution as one to which Section 355 or 361 of the Code is applicable, in whole or in part. The Company has made available to Purchaser correct and complete copies of all federal Tax Returns for its past three (3) fiscal years. The Company is not a party to, is bound by or has any obligation under any Tax sharing or Tax indemnity agreement or similar contract or arrangement. The Company has not entered into any transaction identified as a “listed transaction” for purposes of Treasury Regulations Section 1.6011-4(b)(2) or 301.6111-2(b)(2).

          (x) 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 Purchaser.

          (y) [INTENTIONALLY OMITTED]

          (z) Sarbanes-Oxley; Internal Accounting Controls . Each required form, report and document containing financial statements that the Company has filed with or furnished to the Commission was accompanied by the certifications then required to be filed or furnished by the Company’s Chief Executive Officer and Chief Financial Officer pursuant to the Sarbanes-Oxley Act of 2002 and the rules and regulations promulgated under such Act or the Exchange Act (collectively, the “ Sarbanes-Oxley Act ”), and at the time of filing or submission of each such certification, such certification (i) was true and accurate and complied with the Sarbanes-Oxley Act, (ii) did not contain any qualifications or exceptions to the matters certified therein, except as otherwise permitted under the Sarbanes-Oxley Act, and (iii) has not been modified or withdrawn. As of the date of this Agreement, neither the Company nor any of its officers has received notice from any governmental entity questioning or challenging the accuracy, completeness, content, form or manner of filing or furnishing of such certifications. The Company’s disclosure controls and procedures (as defined in Sections 13a-14(c) and 15d-14(c)of the Exchange Act) effectively enable the Company to comply with, and the appropriate officers of the Company to make all certifications required under, the Sarbanes-Oxley Act. Neither the Company nor, to the Company’s knowledge, any director, officer, employee, auditor, accountant or representative of the Company has received any written complaint, assertion or claim alleging that the Company has engaged in improper or illegal accounting or auditing practices or maintains improper or inadequate internal controls over financial reporting (as defined in Exchange Act Rule 13a-15(f) and Rule 15a-15(f)).

          (aa) Application of Takeover Protections The Company’s certificate of incorporation and by-laws, contain no provision relating to any control share acquisition, business combination, poison pill (including any distribution under a rights agreement) or other similar anti-takeover provision. The Board of Directors has not taken any action in order to render inapplicable any control share acquisition, business combination, poison pill (including

33

any distribution under a rights agreement) or other similar anti-takeover provision under the Delaware General Corporation Law that is or could become applicable to the Purchaser as a result of the Purchaser 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 Purchaser’s ownership of the Securities.

          (bb) Disclosure . All disclosure furnished by or on behalf of the Company to the Purchaser regarding the Company, its business and the transactions contemplated hereby, including the Company Disclosure Schedules to this Agreement, is true and correct in all material respects 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 light of the circumstances under which they were made, not misleading. The Company acknowledges and agrees that the Purchaser neither makes nor has made any representations or warranties with respect to the transactions contemplated hereby other than those specifically set forth in Section 3.2 hereof.

          (cc) Solvency . Based on the consolidated financial condition of the Company as of the Closing Date, after giving effect to the receipt by the Company of the proceeds from the sale of the Securities hereunder, 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, and projected capital requirements and capital availability thereof. 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). Assuming the receipt by the Company of the proceeds from the sale of Securities hereunder, 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 Initial Closing Date. Schedule 3.1(cc) of the Company Disclosure Schedules sets forth as of the date hereof all outstanding secured and unsecured Indebtedness of the Company or any Subsidiary, or for which the Company or any Subsidiary has commitments. Schedule 3.1(cc) of the Disclosure Schedule sets forth the Permitted Indebtedness of the Company existing on the Initial Closing Date. 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 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.

          (dd) Accountants . The Company’s accounting firm is set forth on Schedule 3.1(dd) of the Company 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) has expressed its opinion with respect to the financial statements to be included in the Company’s Annual Report for the year ended March 31, 2008.

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          (ee) [INTENTIONALLY OMITTED]

          (ff) 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, except as set forth on Schedule 3.1(ff) of the Company Disclosure Schedules, 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.

          (gg) Acknowledgment Regarding Purchaser’s Purchase of Securities . The Company acknowledges and agrees that the Purchaser 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 Purchaser is not 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. The Company further represents to the 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.

          (hh) [INTENTIONALLY OMITTED]

          (ii) 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.

          (jj) FDA . Neither the Company nor any of its Subsidiaries is or has been in violation of any United States or foreign, federal, state or local law, statute, ordinance, rule, regulation, judgment, order, injunction, decree, arbitration award, agency requirement, license or permit of any governmental entity, including, without limitation, the Federal Food, Drug and Cosmetic Act, as amended, and the regulations thereunder (“ FDCA ”), the United States Food and Drug Administration (the “ FDA ”), the U.S. Drug Enforcement Administration (the “ DEA ”), the United States Department of Health and Human Services (“ HHS ”), Centers for Medicare and Medicaid Services (“ CMS ”), the HHS Office of Inspector General, and other governmental entity rules, regulations and policies, including, without limitation, 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, filing of reports, sales and marketing practices, off label promotion, government health care program price reporting, pre-and post-marketing adverse drug experience and adverse drug reaction reporting, as applicable, except for violations that would not be reasonably likely to have, either individually or in the aggregate, a Material Adverse Effect. Neither the Company nor any of its Subsidiaries is debarred under the Generic Drug Enforcement Act of 1992 or employs or uses the services of any individual who is debarred or, to the Company’s knowledge, has engaged in any activity that

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would reasonably be expected to lead to debarment. No investigation or review (other than routine inspections by the FDA or any other governmental entity concerned with the safety, efficacy, reliability, manufacture, investigation, sale or marketing of pharmaceuticals) by any governmental entity with respect to the Company or any of its Subsidiaries is pending or, to the knowledge of the Company, threatened, nor has any governmental entity indicated an intention to conduct the same, except for those the outcome of which would not be reasonably likely to have, either individually or in the aggregate, a Material Adverse Effect. Neither the Company, any of its Subsidiaries nor, to the knowledge of the Company, any of the agents, employees, vendors or suppliers of the Company or any of its Subsidiaries have been excluded from participation in any federal health care program, as defined under 42 U.S.C. §1320a-7b(f), for the provision of items or services for which payment may be made under such federal health care program, nor been debarred, suspended, proposed for debarment, declared ineligible, or voluntarily excluded by any state or federal department or agency. 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 of the Company, (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 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.

          (kk) 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.

          (ll) Employee Benefit Plans .

     (1) Schedule 3.1(ll) of the Company Disclosure Schedules sets forth a true and complete list of each material “employee benefit plan” as defined in Section 3(3) of ERISA and any other plan, policy, program,

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practice, agreement, understanding or arrangement (whether written or oral) providing material compensation or other material benefits to any current or former director, officer, employee or consultant (or to any dependent or beneficiary thereof of the Company), which are maintained, sponsored or contributed to by the Company, or under which the Company has any material obligation or liability, whether actual or contingent, including, without limitation, all incentive, bonus, deferred compensation, vacation, holiday, cafeteria, medical, disability, stock purchase, stock option, stock appreciation, phantom stock, restricted stock or other stock-based compensation plans, policies, programs, practices or arrangements (each a “ Company Benefit Plan ”). Neither the Company, nor to the knowledge of the Company, any other person or entity, has any commitment to establish, modify, change or terminate any Company Benefit Plan, other than with respect to a modification, change or termination required by ERISA or the Code. With respect to each Company Benefit Plan, except as set forth in Schedule 3.1(ll) of the Company Disclosure Schedules, the Company has delivered to Purchaser true, correct and complete copies of (i) each Company Benefit Plan (or, if not written a written summary of its material terms), including without limitation all plan documents, adoption agreements, trust agreements, insurance contracts or other funding vehicles and all amendments thereto, (ii) all current summary plan descriptions, including any current summary of material modifications, (iii) the annual reports (Form 5500 series) for the most recent year filed or required to be filed under the Code with respect to such Company Benefit Plan, (iv) the most recent actuarial report or other financial statement relating to such Company Benefit Plan, (v) the most recent determination or opinion letter, if any, issued by the Internal Revenue Service with respect to any Company Benefit Plan and any pending request for such a determination letter, (vi) the most recent nondiscrimination tests performed under the Code (including 401(k) and 401(m) tests) for each Company Benefit Plan, and (vii) all filings made with any governmental entity, including but not limited any filings under the Voluntary Compliance Resolution or Closing Agreement Program or the Department of Labor Delinquent Filer Program, within the current or prior two calendar years.

     (2) Each Company Benefit Plan has been administered in all material respects in accordance with its terms and all applicable laws, including ERISA and the Code, and contributions required to be made under the terms of any of the Company Benefit Plans have been timely made or, if not yet due, have been properly reflected on the most recent balance sheet filed or incorporated by reference in the SEC Reports. With respect to the Company Benefit Plans, no event has occurred and, to the knowledge of the Company, there exists no condition or set of circumstances in connection with which the Company could be subject to any material liability (other than for routine benefit liabilities) under the

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terms of, or with respect to, such Company Benefit Plans, ERISA, the Code or any other applicable law.

     (3) Except as set forth in Schedule 3.1(ll) of the Company Disclosure Schedules: (i) each Company Benefit Plan which is intended to qualify under Section 401(a), Section 401(k), Section 401(m) or Section 4975(e)(6) of the Code has either received a favorable determination letter from the Internal Revenue Service as to its qualified status or the remedial amendment period for such Company Benefit Plan has not yet expired, and each trust established in connection with any Company Benefit Plan which is intended to be exempt from federal income taxation under Section 501(a) of the Code is so exempt, and to the Company’s knowledge no fact or event has occurred that has adversely affected or could adversely affect the qualified status of any such Company Benefit Plan or the exempt status of any such trust, (ii) to the Company’s knowledge there has been no prohibited transaction (within the meaning of Section 406 of ERISA or Section 4975 of the Code and other than a transaction that is exempt under a statutory or administrative exemption) with respect to any Company Benefit Plan that could result in liability to the Company, (iii) each Company Benefit Plan can be amended, terminated or otherwise discontinued in accordance with its terms, (iv) no suit, administrative proceeding, action or other litigation has been brought, or to the knowledge of the Company is threatened, against or with respect to any such Company Benefit Plan, including any audit or inquiry by the Internal Revenue Service or United States Department of Labor (other than routine benefits claims), (v) no Company Benefit Plan is a multiemployer pension plan (as defined in Section 3(37) of ERISA) (“ Multiemployer Plan ”) or other pension plan subject to Title IV of ERISA and none of the Company or any ERISA Affiliate has sponsored or contributed to or been required to contribute to a Multiemployer Plan or other pension plan subject to Title IV of ERISA, (vi) no material liability under Title IV of ERISA has been incurred by the Company or any ERISA Affiliate that has not been satisfied in full, and no condition exists that presents a material risk to the Company or any ERISA Affiliate of incurring or being subject (whether primarily, jointly or secondarily) to a material liability thereunder, (vii) none of the assets of the Company or any ERISA Affiliate is, or may reasonably be expected to become, the subject of any lien arising under ERISA or Section 412(n) of the Code, (viii) neither the Company nor any ERISA Affiliate has any liability under ERISA Section 502, (ix) all tax, annual reporting and other governmental filings required by ERISA and the Code have been timely filed with the appropriate Governmental Entity and all notices and disclosures have been timely provided to participants, (x) all contributions and payments to such Company Benefit Plan are deductible under Code sections 162 or 404, (xi) no amount is subject to tax as unrelated business taxable income under Section 511 of the Code, and (xii) no excise tax could be imposed upon the Company under Chapter

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43 of the Code, except, in the case of clauses (ii), (iii), (viii), (ix), (x), (xi) and (xii), which would not, individually or in the aggregate, have a Material Adverse Effect.

     (4) No amount that could be received (whether in cash or property or the vesting of property), as a result of the consummation of the transactions contemplated by this Agreement, by any employee, officer or director of the Company who is a “disqualified individual” (as such term is defined in proposed Treasury Regulation Section 1.280G -1) under any Company Benefit Plan could be characterized as an “excess parachute payment” (as defined in Section 280G(b)(1) of the Code).

     (5) Except as required by law, no Company Benefit Plan provides any of the following retiree or post-employment benefits to any person: medical, disability or life insurance benefits. No Company Benefit Plan is a voluntary employee benefit association under Section 501(a)(9) of the Code. The Company and each ERISA Affiliate are in material compliance with the requirements of the applicable health care continuation and notice provisions of the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended, and the regulations (including proposed regulations) thereunder and any similar state law.

          (mm) Contracts . Schedule 3.1(mm) of the Company Disclosure Schedules sets forth a list of each of the following Contracts to which the Company is a party or to which the Company or any of its assets or properties is bound (the “ Company Material Contracts ”) and the Company has delivered to Purchaser a true, complete and correct copy of each Company Material Contract; provided , however , that any Company Material Contract that has been filed as of the date hereof with any SEC Report, as an exhibit or otherwise attached thereto, is deemed delivered for purposes hereof:

     (1) any distributor, sales representative or similar agreement under which any third party is authorized to sell, sublicense, lease, distribute, market or take orders for, any product, services or technology of the Company;

     (2) any continuing Contract for the future purchase, sale, license, provision or manufacture of products, material, supplies, equipment or services requiring payment to or from the Company in an amount in excess of $100,000 per annum;

     (3) any Contract or commitment in which the Company has granted or received most favored customer pricing provisions or exclusive marketing or distribution rights relating to any product or service, group of products or services, market or geographic territory;

     (4) any Contract providing for the development of technology or intellectual property for the Company, or the license of any technology

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or intellectual property to the Company, which technology or intellectual property is used or incorporated (or is contemplated by the Company to be used or incorporated) (i) in any product currently sold, licensed, leased, distributed or marketed by the Company or (ii) to provide any service currently provided or marketed by the Company (other than off-the-shelf software generally available to the public at retail);

     (5) any joint venture or partnership contract or agreement or other agreement which has involved or is reasonably expected to involve a sharing of profits, expenses or losses with any other party;

     (6) any Contract or commitment for or relating to the employment of any officer, employee or consultant of the Company or any other type of contract or understanding with any officer, employee or consultant of the Company that is not terminable by the Company without cost or other liability upon no more than 30 days prior notice;

     (7) any indenture, mortgage, trust deed, promissory note, loan agreement, security agreement, guarantee or other agreement or commitment for the borrowing of money, for a line of credit or for a leasing transaction of a type required to be capitalized in accordance with Statement of Financial Accounting Standards No. 13 of the Financial Accounting Standards Board;

     (8) any lease or other agreement under which the Company is lessee of or holds or operates any items of tangible personal property or real property owned by any third party and under which payments to such third party exceed $100,000 per annum;

     (9) any agreement or arrangement for the sale, licensing or leasing of any assets, properties, products, services or rights having a value in excess of $100,000 other than sale of inventory in the ordinary course of the Company’s business;

     (10) any agreement that restricts the Company from engaging in any aspect of its business, from participating or competing in any line of business or market or that restricts the Company from engaging in any business in any market or geographic area;

     (11) any agreement relating to the sale, issuance, grant, exercise, award, purchase, repurchase or redemption of any shares of capital stock or other securities of the Company or any options, warrants or other rights to purchase or otherwise acquire any such shares of stock, other securities or options, warrants or other rights therefore (other than stock options issued under the Company’s stock option plan);

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     (12) any consulting or similar agreement under which the Company receives any advice or services from a third party for a minimum annual compensation of $100,000 per year or more; and

     (13) any Contract for the current or future sale, provision or manufacture of products, material or supplies from the Company or in which the Company has granted or received distribution rights, most favored customer pricing provisions or exclusive marketing rights relating to any product or services, group of products or services or territory.

     Neither the Company nor any of its Subsidiaries is in breach or default under any of its Contracts or has received written notice or claims of such a breach or default, nor, to the knowledge of the Company, is any other party to any such contracts in breach or default thereunder, except in each case in such a manner as, either individually or in the aggregate, is not reasonably likely to have a Material Adverse Effect. Each Contract to which the Company or any of its Subsidiaries is a party or by which it is bound that has not expired or terminated by its terms is valid and in full force and effect, binding upon the Company or such Subsidiary in accordance with its terms, and, to the knowledge of the Company, binding upon the other parties thereto in accordance with its terms, except where the failure to be valid and in full force and effect or not binding, either individually or in the aggregate, is not reasonably likely to have a Material Adverse Effect.

          (nn) Product Liability . No product liability claims have been asserted in writing against the Company or any of its Subsidiaries or, to the knowledge of the Company, threatened against the Company or any of its Subsidiaries relating to any of their products or product candidates developed, tested, manufactured, marketed, distributed or sold by the Company or any of its Subsidiaries, except for claims that, either individually or in the aggregate, are not reasonably likely to have a Material Adverse Effect. There is no judgment, order or decree outstanding against the Company or any of its Subsidiaries relating to product liability claims or assessments except for judgments, orders or decrees that, either individually or in the aggregate, are not reasonably likely to have a Material Adverse Effect.

          (oo) Environmental Matters . Except as would not, individually or in the aggregate, have a Material Adverse Effect:

     (1) The Company (i) is in compliance with all, and is not subject to any liability with respect to any, applicable Environmental Laws, (ii) holds or has applied for all Environmental Permits necessary to conduct its current operations, and (iii) is in compliance with its Environmental Permits.

     (2) The Company has not received any written notice, demand, letter, claim or request for information alleging that the Company may be in violation of, or liable under, any Environmental Law.

     (3) The Company (i) has not entered into or agreed to any consent decree or order or is subject to any judgment, decree or judicial

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order relating to (A) compliance with Environmental Laws or Environmental Permits or (B) the investigation, sampling, monitoring, treatment, remediation, removal or cleanup of Hazardous Materials and no investigation, litigation or other proceeding is pending or, to the knowledge of the Company, threatened with respect thereto, or (ii) is not an indemnitor in connection with any claim threatened or asserted in writing by any third-party indemnitee for any liability under any Environmental Law or relating to any Hazardous Materials.

     (4) None of the real property owned or leased by the Company is, to the knowledge of the Company, listed or proposed for listing on the “National Priorities List” under CERCLA, as updated through the date hereof, or any similar state or foreign list of sites requiring investigation or cleanup.

     (5) To the knowledge of the Company, there are no past or present conditions, circumstances, or facts that may (i) interfere with or prevent continued compliance by the Company with Environmental Laws and the requirements of Environmental Permits, (ii) give rise to any liability or other obligation under any Environmental Laws, or (iii) form the basis of any claim, action, suit, proceeding, or investigation against or involving the Company based on or related to any Environmental Law.

     3.2 Representations and Warranties of the Parent and the Purchaser . Except as set forth in the disclosure schedules delivered to the Company concurrently herewith (the “ Epic Disclosure Schedules ”), which such Epic Disclosure Schedules shall be deemed a part hereof and to qualify any representation or warranty otherwise made herein to the extent of such disclosure, the Parent and the Purchaser, jointly and severally, hereby make the representations and warranties set forth below to the Company as of the date hereof and the Initial Closing Date:

          (a) Wholly-Owned Subsidiary; Operations of the Purchaser . The Parent owns, directly or indirectly, all of the membership interests or other equity interests in the Purchaser free and clear of any Liens, and all the issued and outstanding membership interests of the Purchaser are validly issued and are fully paid, non-assessable and free of preemptive and similar rights to subscribe for or purchase securities. The Purchaser has not engaged in business activities other than as contemplated by this Agreement and the other Transaction Documents and has conducted its operations only as contemplated by this Agreement and the other Transaction Documents and has no liabilities or obligations, other than as set forth in this Agreement or the other Transaction Documents to which it is a party or by which it is bound.

          (b) Organization and Qualification . Each of the Parent and the Purchaser 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 (as applicable), with the requisite power and authority to own and use their respective properties and assets and to carry on their respective business as currently conducted. Neither the Parent nor the Purchaser is in violation or default of any of the provisions of their respective certificate or articles of incorporation or formation (as applicable), bylaws or other organizational or charter documents. Each of the

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Parent and the Purchaser 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 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 . Each of the Parent and the Purchaser has the requisite corporate power and authority to enter into and to consummate the transactions contemplated by each of the Transaction Documents and otherwise to carry out its obligations hereunder and thereunder. The execution and delivery of each of the Transaction Documents by each of the Parent and the Purchaser and the consummation by each of the Parent and the Purchaser of the transactions contemplated hereby and thereby have been duly authorized by all necessary action on the part of the Parent and the Purchaser and no further action is required by the Parent or Purchaser, their respective boards of directors or, in the case of the Parent, its stockholders, and in the case of the Purchaser, the holders of its membership interests, in connection therewith. Each Transaction Document has been (or upon delivery will have been) duly executed by each of the Parent and the Purchaser and, when delivered in accordance with the terms hereof and thereof, will constitute the valid and binding obligation of each of the Parent and the Purchaser enforceable against each of the Parent and the Purchaser 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 . Except as set forth in Schedule 3.2(d) of the Epic Disclosure Schedules, the execution, delivery and performance of each of the Transaction Documents by each of the Parent and the Purchaser and the consummation by each of the Parent and the Purchaser of the other transactions contemplated hereby and thereby do not and will not: (i) conflict with or violate any provision of the Parent’s or Purchaser’s certificate or articles of incorporation or formation (as applicable), 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 either the Parent or the Purchaser, or give to others any rights of termination, amendment, acceleration or cancellation (with or without notice, lapse of time or both) of, any agreement, credit facility, debt or other instrument (evidencing a either a Parent or Purchaser debt or otherwise) or other understanding to which either the Parent or the Purchaser is a party or by which any property or asset of either the Parent or the Purchaser is bound or affected, or (iii) 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 either the Parent or the Purchaser is subject (including federal and state securities laws and regulations), or by which any property or asset of either the Parent or the Purchaser 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.

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          (e) Compliance . Except as set forth in Schedule 3.2(e) of the Epic Disclosure Schedules, neither the Parent nor the Purchaser (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 either the Parent or the Purchaser), nor has either the Parent or the Purchaser 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 not in violation of any order of any court, arbitrator or governmental body, or (iii) is not or has not been in violation of any statute, rule or regulation of any governmental authority, including without limitation all foreign, federal, state and local laws applicable to its business and all such laws that affect the environment, except in each case as could not have or reasonably be expected to result in a Material Adverse Effect.

          (f) Filings, Consents and Approvals . Except as set forth in Schedule 3.2(f) of the Epic Disclosure Schedules, neither the Parent nor the Purchaser is 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 either the Parent or the Purchaser of the Transaction Documents.

          (g) Strategic Transaction . Each of the Parent and the Purchaser acknowledges that the Company is relying upon the representations and warranties of each of the Parent and the Purchaser set forth in this Section 3.2 in determining the applicability of such covenants to the transactions contemplated by the Transaction Documents. As of the Initial Closing Date, the Parent is a drug development company and the Purchaser is a wholly-owned subsidiary of the Parent and that the businesses of each of the Parent and the Purchaser is synergistic with the business of the Company. Neither the Parent nor the Purchaser is in the primary business of investing in securities. The obligations of each of the Parent and the Purchaser under this Agreement and the other Transaction Documents shall be beneficial to the business of the Company.

          (h) Financial Statements, Schedule 3.2(h) of the Epic Disclosure Schedule sets forth the financial statements of the Parent, which include the audited balance sheet of the Parent as of December 31, 2008 and the related audited statements of income, members’ equity and cash flows, respectively, of the Parent, for the period from July 18, 2008 (inception) through December 31, 2008 (such financial statements, collectively, the “ Parent Financial Statements ”) which fairly present in all material respects the financial condition and position of the Parent at the dates and for the periods indicated; and have been prepared in conformity with GAAP consistently applied throughout the periods covered thereby, except as may be otherwise specified in such Parent Financial Statements or the notes thereto and fairly present in all material respects the financial position of the Parent on a consolidated basis with the Purchaser as of and for the dates thereof and the results of operations and cash flows for the periods then ended. Since the date of the most recent balance sheet included as part of the Parent Financial Statements, there has not been to the Parent’s knowledge any change in the assets, liabilities, financial condition or operations of the Parent from that reflected in the Parent Financial Statements, other than changes in the ordinary course of business, none of which individually or

44

in the aggregate would reasonably be expected to have a Material Adverse Effect. Except as set forth in the balance sheet included in the Parent Financial Statements, neither the Parent nor the Purchaser has liabilities or obligations of any nature, whether absolute, accrued, contingent or otherwise and whether due or to become due, of a nature required to be disclosed on a balance sheet or in the related notes to the Parent Financial Statements, except as arising in the ordinary course of business and which, individually or in the aggregate does not have a Material Adverse Effect.

          (i) FDA . Neither the Parent nor the Purchaser is and has not been in violation of any United States or foreign, federal, state or local law, statute, ordinance, rule, regulation, judgment, order, injunction, decree, arbitration award, agency requirement, license or permit of any governmental entity, including, without limitation, the FDCA, the FDA, the DEA, the HHS, the CMS, the HHS Office of Inspector General, and other governmental entity rules, regulations and policies, including, without limitation, 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, filing of reports, sales and marketing practices, off label promotion, government health care program price reporting, pre- and post-marketing adverse drug experience and adverse drug reaction reporting, as applicable, except for violations that would not be reasonably likely to have, either individually or in the aggregate, a Material Adverse Effect. Neither the Parent nor the Purchaser is debarred under the Generic Drug Enforcement Act of 1992 or employs or uses the services of any individual who is debarred or, to the knowledge of the Parent and/or the Purchaser, has engaged in any activity that would reasonably be expected to lead to debarment. No investigation or review (other than routine inspections by the FDA or any other governmental entity concerned with the safety, efficacy, reliability, manufacture, investigation, sale or marketing of pharmaceuticals) by any governmental entity with respect to either the Parent or the Purchaser is pending or, to the knowledge of the Parent and/or the Purchaser, threatened, nor has any governmental entity indicated an intention to conduct the same, except for those the outcome of which would not be reasonably likely to have, either individually or in the aggregate, a Material Adverse Effect. Neither the Parent nor the Purchaser has been, and, to the knowledge the Parent and/or the Purchaser, none of the their respective agents, employees, vendors or suppliers have been, excluded from participation in any federal health care program, as defined under 42 U.S.C. §1320a-7b(f), for the provision of items or services for which payment may be made under such federal health care program, nor been debarred, suspended, proposed for debarment, declared ineligible, or voluntarily excluded by any state or federal department or agency. There is no pending, completed or, to the knowledge of the Parent and/or the Purchaser, threatened, action (including any lawsuit, arbitration, or legal or administrative or regulatory proceeding, charge, complaint, or investigation) against either the Parent or the Purchaser, and neither the Parent nor the Purchaser 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 of either the Parent or the Purchaser, (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 of either the Parent or the Purchaser, (iii) imposes a clinical hold on any clinical investigation by either the

45

Parent or the Purchaser, (iv) enjoins production at any facility of either the Parent or the Purchaser, (v) enters or proposes to enter into a consent decree of permanent injunction with either the Parent or the Purchaser, or (vi) otherwise alleges any violation of any laws, rules or regulations by either the Parent or the Purchaser, and which, either individually or in the aggregate, would have a Material Adverse Effect. Neither the Parent nor the Purchaser has 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 either the Parent or the Purchaser.

          (j) Litigation . There are no Actions pending or, to the knowledge of the Parent and/or the Purchaser, threatened against or affecting either the Parent or the Purchaser 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) which (i) adversely affects or challenges the legality, validity or enforceability of any of the Transaction Documents or (ii) could, if there were an unfavorable decision, have or reasonably be expected to result in a Material Adverse Effect. Neither the Parent nor the Purchaser nor, to the knowledge of the Parent and/or the Purchaser, any of their respective directors or officers, 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.

          (k) Title to Assets . Except as set forth in Schedule 3.2(k) of the Epic Disclosure Schedules or the Parent Financial Statements, each of the Parent and the Purchaser has good and marketable title in fee simple to all real property owned by it that is material to the business of each of the Parent and the Purchaser, as the case may be, and good and marketable title in all personal property owned by it that is material to the business of each of the Parent and the Purchaser, as the case may be, in each case free and clear of all Liens, except for 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 each of the Parent and the Purchaser and Liens for the payment of federal, state or other taxes, the payment of which is neither delinquent nor subject to penalties. Any real property and facilities held under lease by the Parent or the Purchaser are held by it under valid, subsisting and enforceable leases with which it is in compliance.

          (l) Epic Material Contracts . Schedule 3.2(l) of the Epic Disclosure Schedule sets forth a list of each of the following Contracts to which each of the Parent and the Purchaser is a party or to which either the Parent or the Purchaser or any of their respective assets or properties is bound (the “ Epic Material Contracts ”) and either the Parent or the Purchaser has delivered to the Company a true, complete and correct copy of each Epic Material Contract:

     (1) any indenture, mortgage, trust deed, promissory note, loan agreement, security agreement, guarantee or other agreement or commitment for the borrowing of money, for a line of credit or for a leasing transaction of a type required to be capitalized in accordance with Statement of Financial Accounting Standards No. 13 of the Financial Accounting Standards Board;

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     (2) any agreement that restricts either the Parent or the Purchaser from engaging in any aspect of its business, from participating or competing in any line of business or market or that restricts either the Parent or the Purchaser from engaging in any business in any market or geographic area;

     (3) any agreement relating to the sale, issuance, grant, exercise, award, purchase, repurchase or redemption of any shares of capital stock or other securities of either the Parent or the Purchaser or any options, warrants or other rights to purchase or otherwise acquire any such shares of stock, other securities or options, warrants or other rights therefore (other than stock options issued under any stock option plan of either the Parent or the Purchaser);

     Neither the Parent nor the Purchaser is in breach or default under any of the Epic Material Contracts or has received written notice or claims of such a breach or default, nor, to the knowledge of the Parent and/or the Purchaser, is any other party to any such contracts in breach or default thereunder, except in each case in such a manner as, either individually or in the aggregate, is not reasonably likely to have a Material Adverse Effect. Each Epic Material Contract to which either the Parent or the Purchaser is a party or by which it is bound that has not expired or terminated by its terms is valid and in full force and effect, binding upon the Parent or the Purchaser, as applicable, in accordance with its terms, and, to the knowledge of the Parent and/or the Purchaser, binding upon the other parties thereto in accordance with its terms, except where the failure to be valid and in full force and effect or not binding, either individually or in the aggregate, is not reasonably likely to have a Material Adverse Effect.

          (m) Patents and Trademarks . The Parent has, or has rights to use, all patents, patent applications, trademarks, trademark applications, service marks, trade names, trade secrets, inventions, copyrights, licenses and other intellectual property rights and similar rights necessary or material for use in connection with its business and which the failure to so have could have a Material Adverse Effect (collectively, the “ Epic Intellectual Property Rights ”). All such Epic Intellectual Property Rights are enforceable and there is no existing infringement by another Person of any of the Epic Intellectual Property Rights. The Parent has taken reasonable security measures to protect the secrecy, confidentiality and value of all of the Epic Intellectual Property Rights, except where failure to do so could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. Except as set forth in Schedule 3.2(m) of the Epic Disclosure Schedules, none of the Parent’s registered, or applied for, Epic Intellectual Property Rights have expired or terminated or have been abandoned, or are expected to expire or terminate or expected to be abandoned within three years of the date of this Agreement. There is no claim, action or proceeding being made or brought, or to the knowledge of the Parent, being threatened against the Parent regarding the Epic Intellectual Property Rights, except for any claim, action or proceeding which, if determined against the Parent, would not have a Material Adverse Effect. Schedule 3.2(m) of the Epic Disclosure Schedules contains a complete list of (i) all the Parent’s registrations of any patents, copyrights, mask works, trademarks, service marks, Internet domain names or Internet or World Wide Web URLs or addresses with any governmental or quasi-governmental authority or other body; (ii) all

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applications, registrations, filings and other formal actions made or taken pursuant to federal, state and foreign laws by the Parent to secure, perfect or protect its interest in the Epic Intellectual Property Rights, including, without limitation, all patent applications, copyright applications, and applications for registration of trademarks and service marks, (iii) all unregistered copyrights, trademarks and service marks included within the Epic Intellectual Property Rights, (iv) all licenses, sublicenses and other agreements as to which the Parent is a party and pursuant to which any person is authorized to use any of the Epic Intellectual Property Rights, (v) all licenses, sublicenses and other agreements as to which the Parent is a party and pursuant to which the Parent is authorized to use any the Epic Intellectual Property Rights of any third party (excluding generally available off the shelf software) and (vi) all applications, registrations, filings and other formal actions made or taken by the Parent or received by the Parent from any governmental entity pursuant to federal, state and foreign laws with respect to all Pharmaceutical Products presently being manufactured by the Parent.

          (n) No Brokers . Neither the Parent nor the Purchaser has retained, utilized or been represented by any broker or finder in connection with the transactions contemplated by this Agreement.

          (o) Own Account . The Parent and the Purchaser understands that the Securities are “restricted securities” and have not been registered under the Securities Act or any applicable state securities law and that the Purchaser 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 (this representation and warranty not limiting the Purchaser’s right to sell the Securities in compliance with applicable federal and state securities laws) in violation of the Securities Act or any applicable state securities law.

          (p) Purchaser Status . At the time the Purchaser was offered the Securities, it was, and at 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) or (a)(8) under the Securities Act or (ii) a “qualified institutional buyer” as defined in Rule 144A(a) under the Securities Act. Purchaser is not required to be registered as a broker-dealer under Section 15 of the Exchange Act.

          (q) Experience of Purchaser . Each of the Parent and the Purchaser, either alone or together with their respective representatives, has such knowledge, sophistication and experience in business and financial matters so as to be capable of evaluating the merits and risks of the prospective investment in the Securities, and has so evaluated the merits and risks of such investment. Each of the Parent and the Purchaser is able to bear the economic risk of an investment in the Securities and, at the present time, is able to afford a complete loss of such investment. Each of the Parent and the Purchaser has been given the opportunity to ask questions of, and receive answers from, the Company concerning the terms and conditions of the offer of the Securities and other matters pertaining to such investment.

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          (r) General Solicitation . To the knowledge of the Parent and/or the Purchaser, the Purchaser is not purchasing the Securities as a result of any advertisement, article, notice or other communication regarding the Securities published in any newspaper, magazine or similar media or broadcast over television or radio or presented at any seminar or any other general solicitation or general advertisement.

          (s) Short Sales and Confidentiality Prior To The Date Hereof . Other than the transaction contemplated hereunder, neither the Parent nor the Purchaser has directly or indirectly, nor has any Person acting on behalf of or pursuant to any understanding with either the Parent or the Purchaser, executed any disposition, including Short Sales, in the securities of the Company during the period commencing from the time that either the Parent or the Purchaser first received a term sheet (written or oral) from the Company or any other Person setting forth the material terms of the transactions contemplated hereunder until such time as the transactions contemplated by this Agreement are publicly disclosed by the Company (“ Discussion Time ”). Other than to other Persons party to this Agreement and its financial and legal advisors, each of the Parent and the Purchaser has maintained the confidentiality of all disclosures made to it in connection with this transaction (including the existence and terms of this transaction).

ARTICLE IV
OTHER AGREEMENTS OF THE PARTIES

     4.1 Transfer Restrictions .

          (a) The Securities may only be disposed of in compliance with state and federal securities laws. In connection with any transfer of Securities other than pursuant to an effective registration statement or Rule 144, to the Company or to an Affiliate of a Purchaser or in connection with a pledge as contemplated in Section 4.1(b), the Company may require the transferor thereof to provide to the Company an opinion of counsel selected by the transferor and reasonably acceptable to the Company, the form and substance of which opinion shall be reasonably satisfactory to the Company, to the effect that such transfer does not require registration of such transferred Securities under the Securities Act. As a condition of transfer, any such transferee shall agree in writing to be bound by the terms of this Agreement and shall have the rights of a Purchaser under this Agreement.

          (b) T