8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported)

May 3, 2005

MIRAVANT MEDICAL TECHNOLOGIES

(Exact name of registrant as specified in its charter)

DELAWARE	0-25544	77-0222872
(State or other jurisdiction ofincorporation)	(Commission File Number)	(IRS Employer Identification No.)

336 Bollay Drive

Santa Barbara, CA 93117

(Address of principal executive offices, including zip code)

(805) 685-9880

(Registrant’s telephone number, including area code)

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01 Entry into a Material Definitive Agreement; Item 3.02 Unregistered Sales of Equity Securities; Item 3.03 Material Modifications to rights of Security Holders; and Item 5.03 Amendments to the Articles of Incorporation or Bylaws; Change in Fiscal Year

On May 3, 2005, Miravant Medical Technologies, or the Company, entered into a $8.0 million Securities Purchase Agreement led by Scorpion Capital Partners, LP, aNew York-based SBIC, with net proceeds to the Company of approximately $7.5 million. Pursuant to the Series B Convertible Preferred Stock Purchase Agreement, the Company issued 8.0 million shares of a newly created Series B Preferred Stock (the “Series B Preferred”). The shares of Series B Preferred are convertible, initially at a one-for-one ratio, based on a purchase price of $1.00 per share, into shares of the Company’s Common Stock. The Company also issued a warrant to purchase one share of Common Stock for each share of Series B Preferred purchased. The exercise price of each warrant is $1.00 per share. The Company also granted the purchasers registration rights with respect to the shares of Common Stock underlying the convertible Series B Preferred Stock. The shares of Series B Preferred and the warrants were issued pursuant to an exemption from registration provided by Rule 506 of Regulation D promulgated under the Securities Act of 1933, as amended. As a result of the May 2005 Preferred Stock Agreement, the Company will be required to issue warrants to the debt holders of the December 2002 Convertible Debt and Warrant Agreement and certain debt holders of the August 2003 Convertible Debt and Warrant Agreement. The warrants issued will be for the purchase of a total of 3,775,000 shares of Common Stock of the Company, at an exercise price of $1.00 and will expire December 31, 2013.

In addition the Company filed a Certificate of Designation in the State of Delaware creating the Series B Preferred, which included conversion rights, voting rights, dividend rights and liquidation preferences. The following is a brief description of the liquidation preferences: in the event of any liquidation, dissolution or winding up of the Company, either voluntary or involuntary, all assets and funds of the Company legally available for distribution shall be first distributed to the holders of the Series B Preferred Stock equal to ONE DOLLAR ($1.00) per share, plus accrued but unpaid dividends, after distributions are first made to the holders of the Series A-1, A-2 and A-3 Preferred Stock, but prior to any other distributions to any Junior Securities.

The Company intends to use the proceeds from the sale of the Series B Preferred shares to fund its confirmatory Phase III clinical trial for PHOTREX, in addition to funding its ongoing research, development programs and for general corporate purposes. A copy of the Series B Convertible Preferred Stock Purchase Agreement, related Registration Rights Agreement, Form of Warrant Agreement and Press Release are filed as exhibits to this report and are incorporated by reference.

Separately, the Company also announced an amendment to its March 2005 Debt Agreement, to establish the minimum conversion rate of the notes and the exercise price of the related warrants to the greater of $1.00 per share of convertible Common Stock or 125% of the average monthly closing price of the month preceding the conversion. The last available borrowing was extended to July 1, 2007.

Item 9.01. Financial Statements and Exhibits.

(c) Exhibits.

ExhibitNo.	Description
4.1	Form of Warrant Agreement
4.2	Registration Rights Agreement
4.3	Certificate of Designation of Series B Preferred Stock
10.1	Series B Convertible Preferred Stock Purchase Agreement
99.1	Press Release dated May 4, 2005

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	MIRAVANT MEDICAL TECHNOLOGIES
By:	/s/ John M. Philpott
	John M. Philpott Chief Financial Officer

Date: May 6, 2005

EXHIBIT INDEX

ExhibitNo.	Description
4.1	Form of Warrant Agreement
4.2	Registration Rights Agreement
4.3	Certificate of Designation of Series B Preferred Stock
10.1	Series B Convertible Preferred Stock Purchase Agreement
99.1	Press Release dated May 4, 2005

EX-4.1

EXHIBIT A

TO

SECURITIES PURCHASE AGREEMENT

FORM OF WARRANT

NEITHER THIS WARRANT NOR ANY SHARES OF COMMON STOCK ISSUABLE UPON THE EXERCISE OF THIS WARRANT HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND THE RULES AND REGULATIONS PROMULGATED THEREUNDER (THE “SECURITIES ACT”). THIS WARRANT AND THE COMMON STOCK ISSUABLE UPON EXERCISE OF THIS WARRANT MAY NOT BE OFFERED, SOLD, OR OTHERWISE TRANSFERRED IN THE ABSENCE OF REGISTRATION UNDER THE SECURITIES ACT OR UNLESS SUCH OFFER, SALE OR TRANSFER IS EXEMPT FROM SUCH REGISTRATION.

MIRAVANT MEDICAL TECHNOLOGIES

COMMON STOCK WARRANT

No. __________May 3, 2005

MIRAVANT MEDICAL TECHNOLOGIES, a Delaware corporation (the “Company”), hereby certifies that ______________________________________, its permissible transferees, designees, successors and assigns (collectively, the “Holder”), for value received, is entitled to purchase from the Company at any time commencing on the effective date, as set forth in Section 1 below (the “Effective Date”), and terminating on the fifth anniversary of such date (the “Termination Date”) up to _____________ shares (each, a “Share” and collectively the “Shares”) of the Company’s common stock par value $0.01 per Share (the “Common Stock”), at an exercise price per Share equal to $1.00 (the “Exercise Price”). The number of Shares purchasable hereunder and the Exercise Price are subject to adjustment as provided in Section 5 hereof.

1.Exercise of Warrant.

(a)The purchase right represented by this Warrant is exercisable, in whole or in part, at any time and from time to time from the Date of Grant through and including the Termination Date; provided, however, that Holder may not exercise this Warrant until such time as the Company’s shareholders approve an increase in the number of authorized shares of Common Stock to one hundred million (100,000,000) or such other number as may be sufficient to allow for the reservation for issuance of all shares of Common Stock underlying each outstanding security convertible or exercisable for, or exchangeable into, Common Stock (the “Proposal”).

(b)Upon presentation and surrender of this Common Stock Warrant (this “Warrant”), accompanied by a completed Election to Purchase in the form attached hereto as Exhibit A (the “Election to Purchase”) duly executed, at the principal office of the Company currently located at 336 Bollay Drive, Santa Barbara, California 93117, Attn: Chief Financial Officer, (or such other office or agency of the Company within the United States as the Company may designate to the Holder) together with a check payable to, or wire transfer to, the Company in the amount of the Exercise Price multiplied by the number of Shares being purchased, the Company or the Company’s Transfer Agent, as the case may be, shall within three (3) business days deliver to the Holder hereof certificates of fully paid and non-assessable Common Stock which in the aggregate represent the number of Shares being purchased. The certificates so delivered shall be in such denominations as may be requested by the Holder and shall be registered in the name of the Holder or such other name as shall be designated by the Holder. All or less than all of the purchase rights represented by this Warrant may be exercised and, in case of the exercise of less than all, the Company, upon surrender hereof, will at the Company’s expense deliver to the Holder a new warrant entitling said holder to purchase the number of Shares represented by this Warrant which have not been exercised. This Warrant may only be exercised to the extent the Company has a sufficient number of Shares of Common Stock available for issuance at the time of any exercise.

2.Net Exercise. In lieu of payment of the Exercise Price described in Section 1, the Holder may elect to receive, without the payment by the Holder of any additional consideration, Shares equal to the value of this Warrant or any portion hereof by the surrender of this Warrant or such portion to the Company, with the net issue election notice attached hereto as Exhibit B (the “Net Issuance Election Notice”) duly executed, at the office of the Company as specified in Section 1. Thereupon, the Company shall issue to the Holder such number of fully paid and nonassessable Shares as is computed using the following formula:

where: X = Y (A-B)

A

X = the number of Shares to be issued to the Holder pursuant to this Section 2.

Y = the number of Shares covered by this Warrant in respect of which the net issuance election is made pursuant to this Section 2.

A = the fair market value of one Share, as determined in accordance with the provisions of this Section 2.

B = the Exercise Price in effect under this Warrant at the time the net issuance election is made pursuant to this Section 2.

For purposes of this Section 2, the “fair market value” per Share shall mean:

i.If the class of Shares is traded on a national securities exchange or is listed on the Nasdaq National Market (the “NNM”) or other over-the-counter quotation system, the fair market value shall be the last reported sale price of a Share on such exchange or on the NNM or other over-the-counter quotation system on the last business day before the effective date of exercise of the net issuance election or if no such sale is made on such day, the mean of the closing bid and asked prices for such day on such exchange, the NNM or over-the-counter quotation system; and

ii.If the class of Shares is not so listed and bid and ask prices are not reported, the fair market value shall be the price per Share which the Company could obtain from a willing buyer for Shares sold by the Company, as such price shall be determined in good faith by the Company’s Board of Directors.

3.Warrant.

(a)Exchange, Transfer and Replacement. At any time prior to the exercise hereof, this Warrant may be exchanged upon presentation and surrender to the Company, alone or with other warrants of like tenor of different denominations registered in the name of the same Holder, for another warrant or warrants of like tenor in the name of such Holder exercisable for the aggregate number of Shares as the warrant or warrants surrendered.

(b)Replacement of Warrant. Upon receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction, or mutilation of this Warrant and, in the case of any such loss, theft, or destruction, upon delivery of an indemnity agreement reasonably satisfactory in form and amount to the Company, or, in the case of any such mutilation, upon surrender and cancellation of this Warrant, the Company, at its expense, will execute and deliver in lieu thereof, a new Warrant of like tenor.

(c)Cancellation; Payment of Expenses. Upon the surrender of this Warrant in connection with any transfer, exchange or replacement as provided in this Section 3, this Warrant shall be promptly canceled by the Company. The Company shall pay all taxes (other than securities transfer taxes) and all other expenses (other than legal expenses, if any, incurred by the Holder or transferees) and charges payable in connection with the preparation, execution and delivery of Warrants pursuant to this Section 3.

(d)Warrant Register. The Company shall maintain, at its principal executive offices (or at the offices of the transfer agent for the Warrant or such other office or agency of the Company as it may designate by notice to the holder hereof), a register for this Warrant (the “Warrant Register”), in which the Company shall record the name and address of the person in whose name this Warrant has been issued, as well as the name and address of each transferee and each prior owner of this Warrant.

4.Rights and Obligations of Holders of this Warrant. The Holder of this Warrant shall not, by virtue hereof, be entitled to any rights of a stockholder in the Company, either at law or in equity; provided, however, that in the event any certificate representing shares of Common Stock or other securities is issued to the holder hereof upon exercise of this Warrant, such holder shall, for all purposes, be deemed to have become the holder of record of such Common Stock on the date on which this Warrant, together with a duly executed Election to Purchase, was surrendered and payment of the aggregate Exercise Price was made, irrespective of the date of delivery of such Common Stock certificate.

5.Adjustments.

(a)Stock Dividends, Reclassifications, Recapitalizations, Etc. In the event the Company: (i) pays a dividend in Common Stock or makes a distribution in Common Stock, (ii) subdivides its outstanding Common Stock into a greater number of shares, (iii) combines its outstanding Common Stock into a smaller number of shares or (iv) increases or decreases the number of shares of Common Stock outstanding by reclassification of its Common Stock (including a recapitalization in connection with a consolidation or merger in which the Company is the continuing corporation), then (1) the Exercise Price on the record date of such division or distribution or the effective date of such action shall be adjusted by multiplying such Exercise Price by a fraction, the numerator of which is the number of shares of Common Stock outstanding immediately before such event and the denominator of which is the number of shares of Common Stock outstanding immediately after such event, and (2) the number of shares of Common Stock for which this Warrant may be exercised immediately before such event shall be adjusted by multiplying such number by a fraction, the numerator of which is the Exercise Price immediately before such event and the denominator of which is the Exercise Price immediately after such event.

(b)Cash Dividends and Other Distributions. In the event that at any time or from time to time the Company shall distribute to all holders of Common Stock (i) any dividend or other distribution of cash, evidences of its indebtedness, shares of its capital stock or any other properties or securities or (ii) any options, warrants or other rights to subscribe for or purchase any of the foregoing (other than in each case, (w) the issuance of any rights under a shareholder rights plan, (x) any dividend or distribution described in Section 5(a), (y) any rights, options, warrants or securities described in Section 5(c) and (z) any cash dividends or other cash distributions from current or retained earnings), then the number of shares of Common Stock issuable upon the exercise of this Warrant shall be increased to a number determined by multiplying the number of shares of Common Stock issuable upon the exercise of this Warrant immediately prior to the record date for any such dividend or distribution by a fraction, the numerator of which shall be such Current Market Value (as hereinafter defined) per share of Common Stock on the record date for such dividend or distribution, and the denominator of which shall be such Current Market Value per share of Common Stock on the record date for such dividend or distribution less the sum of (x) the amount of cash, if any, distributed per share of Common Stock and (y) the fair value (as determined in good faith by the Board of Directors of the Company, whose determination shall be evidenced by a board resolution, a copy of which will be sent to the Holders upon request) of the portion, if any, of the distribution applicable to one share of Common Stock consisting of evidences of indebtedness, shares of stock, securities, other property, warrants, options or subscription or purchase rights; and the Exercise Price shall be adjusted to a number determined by dividing the Exercise Price immediately prior to such record date by the above fraction. Such adjustments shall be made whenever any distribution is made and shall become effective as of the date of distribution, retroactive to the record date for any such distribution. No adjustment shall be made pursuant to this Section 5(b) which shall have the effect of decreasing the number of shares of Common Stock issuable upon exercise of this Warrant or increasing the Exercise Price.

(c)Combination: Liquidation. (i) Except as provided in Section 5(d), in the event of a Combination (as defined below), each Holder shall have the right to receive upon exercise of the Warrant the kind and amount of shares of capital stock or other securities or property which such Holder would have been entitled to receive upon or as a result of such Combination had such Warrant been exercised immediately prior to such event (subject to further adjustment in accordance with the terms hereof). Unless paragraph (ii) is applicable to a Combination, the Company shall provide that the surviving or acquiring Person (the “Successor Company”) in such Combination will assume by written instrument the obligations under this Section 5 and the obligations to deliver to the Holder such shares of stock, securities or assets as, in accordance with the foregoing provisions, the Holder may be entitled to acquire. “Combination” means an event in which the Company consolidates with, mergers with or into, or sells all or substantially all of its assets to another Person, where “Person” means any individual, corporation, partnership, joint venture, limited liability company, association, joint-stock company, trust, unincorporated organization, government or any agency or political subdivision thereof or any other entity; (ii) In the event of (x) a Combination where consideration to the holders of Common Stock in exchange for their shares is payable solely in cash or (y) the dissolution, liquidation or winding-up of the Company, the Holders shall be entitled to receive, upon surrender of their Warrant, distributions on an equal basis with the holders of Common Stock or other securities issuable upon exercise of the Warrant, as if the Warrant had been exercised immediately prior to such event, less the Exercise Price. In case of any Combination described in this Section 5, the surviving or acquiring Person and, in the event of any dissolution, liquidation or winding-up of the Company, the Company, shall deposit promptly with an agent or trustee for the benefit of the Holders of the funds, if any, necessary to pay to the Holders the amounts to which they are entitled as described above. After such funds and the surrendered Warrant are received, the Company is required to deliver a check in such amount as is appropriate (or, in the case or consideration other than cash, such other consideration as is appropriate) to such Person or Persons as it may be directed in writing by the Holders surrendering such Warrant.

(d)Subsequent Equity Sales. If the Company or any subsidiary thereof, as applicable, at any time while this Warrant is outstanding, shall offer, sell, grant any option to purchase or offer, sell or grant any right to reprice its securities, or otherwise dispose of or issue (or announce any offer, sale, grant or any option to purchase or other disposition) any Common Stock or Common Stock Equivalents entitling any Person to acquire shares of Common Stock, at an effective price per share less than the then Exercise Price (such lower price, the "Base Share Price"), as adjusted hereunder (if the holder of the Common Stock or Common Stock Equivalents so issued shall at any time, whether by operation of purchase price adjustments, reset provisions, floating conversion, exercise or exchange prices or otherwise, or due to warrants, options or rights per share which is issued in connection with such issuance, be entitled to receive shares of Common Stock at an effective price per share which is less than the Exercise Price, such issuance shall be deemed to have occurred for less than the Exercise Price), then, the Exercise Price shall immediately be reduced to the Base Share Price. Such adjustment shall be made whenever such Common Stock or Common Stock Equivalents are issued. The Company shall notify the Holder in writing, no later than the second business day following the issuance of any Common Stock or Common Stock Equivalents subject to this section, indicating therein the applicable issuance price, or of applicable reset price, exchange price, conversion price and other pricing terms. "Common Stock Equivalents" means any securities of the Company or any subsidiary 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 exchangeable for, or otherwise entitles the holder thereof to receive Common Stock. This Section 5(d) shall not apply to (i) shares of Common Stock issued or issuable to officers, directors and employees of, or consultants to, the Company pursuant to stock grants, option plans, purchase plans or other employee stock incentive programs or arrangements approved by the Board of Directors, or upon exercise of options or warrants granted to such parties pursuant to any such plan or arrangements or (ii) shares of Common Stock issued or issuable to banks, equipment lessors or other financial institutions pursuant to a debt financing or commercial leasing transaction approved by the Board of Directors.

(e)Notice of Adjustment. Whenever the Exercise Price or the number of shares of Common Stock and other property, if any, issuable upon exercise of the Warrant is adjusted, as herein provided, the Company shall deliver to the holders of the Warrant in accordance with Section 11 a certificate of the Company’s Chief Financial Officer setting forth, in reasonable detail, the event requiring the adjustment and the method by which such adjustment was calculated (including a description of the basis on which (i) the Board of Directors determined the fair value of any evidences of indebtedness, other securities or property or warrants, options or other subscription or purchase rights and (ii) the Current Market Value of the Common Stock was determined, if either of such determinations were required), and specifying the Exercise Price and number of shares of Common Stock issuable upon exercise of Warrant after giving effect to such adjustment.

(f)Notice of Certain Transactions. In the event that the Company shall propose (a) to pay any dividend payable in securities of any class to the holders of its Common Stock or to make any other non-cash dividend or distribution to the holders of its Common Stock, (b) to offer the holders of its Common Stock rights to subscribe for or to purchase any securities convertible into shares of Common Stock or shares of stock of any class or any other securities, rights or options, (c) to effect any capital reorganization, reclassification, consolidation or merger affecting the class of Common Stock, as a whole, or (d) to effect the voluntary or involuntary dissolution, liquidation or winding-up of the Company, the Company shall, within the time limits specified below, send to each Holder a notice of such proposed action or offer. Such notice shall be mailed to the Holders at their addresses as they appear in the Warrant Register (as defined in Section 3(d)), which shall specify the record date for the purposes of such dividend, distribution or rights, or the date such issuance or event is to take place and the date of participation therein by the holders of Common Stock, if any such date is to be fixed, and shall briefly indicate the effect of such action on the Common Stock and on the number and kind of any other shares of stock and on other property, if any, and the number of shares of Common Stock and other property, if any, issuable upon exercise of each Warrant and the Exercise Price after giving effect to any adjustment pursuant to Section 5 which will be required as a result of such action. Such notice shall be given as promptly as possible and (x) in the case of any action covered by clause (a) or (b) above, at least ten (10) days prior to the record date for determining holders of the Common Stock for purposes of such action or (y) in the case of any other such action, at least twenty (20) days prior to the date of the taking of such proposed action or the date of participation therein by the holders of Common Stock, whichever shall be the earlier.

(g)Current Market Value. “Current Market Value” per share of Common Stock or any other security at any date means (i) if the security is not registered under the Securities Exchange Act of 1934 and/or traded on a national securities exchange, quotation system or bulletin board, as amended (the “Exchange Act”), (a) the value of the security, determined in good faith by the Board of Directors of the Company and certified in a board resolution, based on the most recently completed arm’s-length transaction between the Company and a Person other than an affiliate of the Company or between any two such Persons and the closing of which occurs on such date or shall have occurred within the six-month period preceding such date, or (b) if no such transaction shall have occurred within the six-month period, the value of the security as determined by an independent financial expert or an agreed upon financial valuation model or (ii) if the security is registered under the Exchange Act and/or traded on a national securities exchange, quotation system or bulletin board, the average of the daily closing bid prices (or the equivalent in an over-the-counter market) for each day on which the Common Stock is traded for any period on the principal securities exchange or other securities market on which the common Stock is being traded (each, a “Trading Day”) during the period commencing thirty (30) days before such date and ending on the date one day prior to such date.

(h)Other Adjustments. If the event of any other transaction of the type contemplated by this Section 5, but not expressly provided for by the provisions hereof, the Board of Directors of the Company will make appropriate adjustment in the Exercise Price so as to equitably protect the rights of the Holder. [In addition, the Exercise Price of this Warrant shall be adjusted in accordance with Section 4.4 of the Purchase Agreement in the event of a subsequent financing transaction as specified therein.]

(i)No Impairment of Holder’s Rights. The Company will not, by amendment of its certificate of incorporation or bylaws or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all action as may be necessary or appropriate in order to protect the rights of the Holder against dilution or other impairment.

6.Company’s Representations.

(a)The Company covenants and agrees that, assuming approval of the Proposal and filing with the Delaware Secretary of State of an amended Certificate of Incorporation reflecting such approval, all shares of Common Stock issuable upon exercise of this Warrant Certificate will, upon delivery, be duly and validly authorized and issued, fully-paid and non-assessable and free from all taxes, liens, claims and encumbrances.

(b)The Company covenants and agrees that it will seek approval from its stockholders to the Proposal, and to the extent received will, after such approval, at all times reserve and keep available an authorized number of shares of its Common Stock and other applicable securities sufficient to permit the exercise in full of this Warrant Certificate.

(c)The Company has taken all necessary action and proceedings as required and permitted by applicable law, rule and regulation, including, without limitation, the notification of the principal market on which the Common Stock is traded, for the legal and valid issuance of this Warrant.

(d)The Warrant Shares, after receipt of approval of the Company’s stockholders to the Proposal, when issued in accordance with the terms hereof, will be duly authorized and, when paid for or issued in accordance with the terms hereof, shall be validly issued, fully paid and non-assessable.

(e)With a view to making available to Holder the benefits of Rule 144 promulgated under the Act and any other rule or regulation of the Securities and Exchange Commission (“SEC”) that may at any time permit Holder to sell securities of the Company to the public without registration, the Company agrees to use its reasonable best efforts to:

(i)make and keep public information available, as those terms are understood and defined in Rule 144, at all times;

(ii)file with the SEC in a timely manner all reports and other documents required of the Company under the Act and the Securities Exchange Act of 1934, as amended (the “Exchange Act”); and

(iii)furnish to any Holder forthwith upon request a written statement by the Company that it has complied with the reporting requirements of Rule 144 and of the Act and the Exchange Act, a copy of the most recent annual or quarterly report of the Company, and such other reports and documents so filed by the Company as may be reasonably requested to permit any such Holder to take advantage of any rule or regulation of the SEC permitting the selling of any such securities without registration.

7.Registration Rights. The Holder is entitled to the benefit of such registration rights in respect of the Shares as are set forth in the Registration Rights Agreement dated as of May 3, 2005 by and between the Company and the Holder.

8.Fractional Shares. In lieu of issuance of a fractional share upon any exercise hereunder, the Company will pay the cash value of that fractional share, calculated on the basis of the Exercise Price.

9.Legends. Prior to issuance of the shares of Common Stock underlying this Warrant, all such certificates representing such shares shall bear a restrictive legend to the effect that the Shares represented by such certificate have not been registered under the 1933 Act, and that the Shares may not be sold or transferred in the absence of such registration or an exemption therefrom, such legend to be substantially in the form of the bold-face language appearing at the top of Page 1 of this Warrant.

10.Disposition of Warrants or Shares. The Holder of this Warrant, each transferee hereof and any holder and transferee of any Shares, by his or its acceptance thereof, agrees that no public distribution of Warrants or Shares will be made in violation of the provisions of the 1933 Act. Furthermore, it shall be a condition to the transfer of this Warrant that any transferee thereof deliver to the Company his or its written agreement to accept and be bound by all of the terms and conditions contained in this Warrant.

11.Merger or Consolidation. The Company will not merge or consolidate with or into any other corporation, or sell or otherwise transfer its property, assets and business substantially as an entirety to another corporation, unless the corporation resulting from such merger or consolidation (if not the Company), or such transferee corporation, as the case may be, shall expressly assume, by supplemental agreement reasonably satisfactory in form and substance to the Holder, the due and punctual performance and observance of each and every covenant and condition of this Warrant to be performed and observed by the Company.

12.Notices. Except as otherwise specified herein to the contrary, all notices, requests, demands and other communications required or desired to be given hereunder shall only be effective if given in writing by certified or registered U.S. mail with return receipt requested and postage prepaid; by private overnight delivery service (e.g. Federal Express); by facsimile transmission (if no original documents or instruments must accompany the notice); or by personal delivery. Any such notice shall be deemed to have been given (a) on the business day immediately following the mailing thereof, if mailed by certified or registered U.S. mail as specified above; (b) on the business day immediately following deposit with a private overnight delivery service if sent by said service; (c) upon receipt of confirmation of transmission if sent by facsimile transmission; or (d) upon personal delivery of the notice. All such notices shall be sent to the following addresses (or to such other address or addresses as a party may have advised the other in the manner provided in this Section 12):

If to the Company:

Miravant Medical Technologies

336 Bollay Drive

Santa Barbara, CA 93117

Attention: John M. Philpott

Chief Financial Officer

Fax: (805) 685-7981

Telephone: (805) 685-9880

If to the Holder:

____________________________

____________________________

____________________________

Attention:

Fax:

Telephone:

with a copy to:

____________________________

____________________________

____________________________

Attention:

Fax:

Telephone:

Notwithstanding the time of effectiveness of notices set forth in this Section, an Election to Purchase shall not be deemed effectively given until it has been duly completed and submitted to the Company together with this original Warrant and payment of the Exercise Price in a manner set forth in this Section.

13.Governing Law. This Warrant shall be governed by and construed in accordance with the laws of the State of California applicable to contracts made and to be performed in the State of California.

14.Successors and Assigns. This Warrant shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and assigns.

15.Headings. The headings of various sections of this Warrant have been inserted for reference only and shall not affect the meaning or construction of any of the provisions hereof.

16.Severability. If any provision of this Warrant is held to be unenforceable under applicable law, such provision shall be excluded from this Warrant, and the balance hereof shall be interpreted as if such provision were so excluded.

17.Modification and Waiver. This Warrant and any provision hereof may be amended, waived, discharged or terminated only by an instrument in writing signed by the Company and the Holder.

18.Specific Enforcement. The Company and the Holder acknowledge and agree that irreparable damage would occur in the event that any of the provisions of this Warrant were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that the parties shall be entitled to an injunction or injunctions to prevent or cure breaches of the provisions of this Warrant and to enforce specifically the terms and provisions hereof, this being in addition to any other remedy to which either of them may be entitled by law or equity.

19.Assignment. Subject to prior written approval by the Company, this Warrant may be transferred or assigned, in whole or in part, at any time and from time to time by the then Holder by submitting this Warrant to the Company together with a duly executed Assignment in substantially the form and substance of the Form of Assignment which accompanies this Warrant, as Exhibit C hereto, and, upon the Company’s receipt hereof, and in any event, within three (3) business days thereafter, the Company shall issue a warrant to the Holder to evidence that portion of this Warrant, if any as shall not have been so transferred or assigned.

#80039823.2 (DT FINAL)	-1-
		0WEG-083556

20.Mandatory Exercise. In the event that (a) the registration statement required to be filed by the Company pursuant to the Registration Rights Agreement shall have been declared effective by the Securities and Exchange Commission and shall remain effective with respect to the shares of Common Stock issuable upon exercise hereof, and (b) the Market Price of the Common Stock has been greater than Four Hundred Percent (400%) of the Exercise Price then in effect for at least twenty (20) consecutive trading days (the satisfaction of the criteria specified in clauses (a) and (b) being referred to herein as a “Mandatory Exercise Trigger Event”), then the Company shall be entitled, subject to the terms of this Section 20, to require the Holder to exercise all or any portion of the Warrants evidenced by this Warrant Certificate (a “Mandatory Exercise”) by giving written notice to the Holder at least thirty (30) days prior to the date fixed for such Mandatory Exercise; provided, however, that in the event that the Company desires to cause a Mandatory Exercise of all or any portion of these Warrants, the Company shall be required to elect to cause a Mandatory Exercise of the same proportion of all other warrants issued pursuant to the Purchase Agreement that contain this Mandatory Exercise provision; and, provided further, that each Mandatory Exercise shall be limited to an aggregate of 1,000,000 shares of Common Stock upon each occurrence of a Mandatory Exercise Trigger Event among all warrants issued pursuant to the Purchase Agreement that contain this Mandatory Exercise provision. For purposes of satisfying the conditions required to constitute a Mandatory Exercise Trigger Event set forth in clause (b) hereof, upon the election by the Company to cause a Mandatory Exercise, the Company may not cause another Mandatory Exercise until the Market Price of the Common Stock has been greater than Four Hundred Percent (400%) of the Exercise Price then in effect for an additional twenty (20) consecutive trading days thereafter. Neither the occurrence of a Mandatory Exercise Trigger Event or an election by the Company to cause a Mandatory Exercise shall affect the right of the Holder hereof to exercise these Warrants prior to the date fixed for such Mandatory Exercise or cause the holder to own more than 4.95% of the Company’s outstanding Common Shares.

1.

#80039823.2 (DT FINAL)
	0WEG-083556

IN WITNESS WHEREOF, the Company has caused this Warrant to be duly executed, manually or by facsimile, by one of its officers thereunto duly authorized.

MIRAVANT MEDICAL TECHNOLOGIES

Date: May 3, 2005By:_________________________________

Name:Gary S. Kledzik

Title: Chief Executive Officer

#80039823v2

EXHIBIT A

TO

WARRANT CERTIFICATE

ELECTION TO PURCHASE

To Be Executed by the Holder

in Order to Exercise the Warrant

The undersigned Holder hereby elects to purchase _______ Shares pursuant to the attached Warrant, and requests that certificates for securities be issued in the name of:

__________________________________________________________

(Please type or print name and address)

__________________________________________________________

__________________________________________________________

__________________________________________________________

(Social Security or Tax Identification Number)

and delivered to:______________________________________________________________ _______________________________________________________________________.

(Please type or print name and address if different from above)

If such number of Shares being purchased hereby shall not be all the Shares that may be purchased pursuant to the attached Warrant, a new Warrant for the balance of such Shares shall be registered in the name of, and delivered to, the Holder at the address set forth below.

In full payment of the purchase price with respect to the Shares purchased and transfer taxes, if any, the undersigned hereby tenders payment of $__________ by check, money order or wire transfer payable in United States currency to the order of Miravant Medical Technologies.

HOLDER:

By:_____________________________________

Name:

Title:

Address:

Dated:___________________

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		0WEG-083556

EXHIBIT B

TO

WARRANT CERTIFICATE

NET ISSUANCE ELECTION NOTICE

The undersigned hereby elects to purchase ___________ shares of ___________ (the “Shares”) pursuant to Section 2 of the attached Warrant. The Certificate(s) for the Shares issuable upon such net issuance election shall be issued in the name of the undersigned or as otherwise indicated below.

Please issue a new Warrant for the unexercised portion of the attached Warrant, if any, in the name of the undersigned.

The undersigned hereby represents and warrants that the undersigned is acquiring such Shares for its own account for investment purposes only, and not for resale or with a view to distribution of such Shares or any part thereof.

HOLDER:

Name:

Title:

Date:

Address:

Name in which shares should be registered:

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EXHIBIT C

TO

WARRANT

FORM OF ASSIGNMENT

(To be signed only on transfer of Warrant)

For value received, the undersigned hereby sells, assigns, and transfers unto _____________ the right represented by the within Warrant to purchase ______ shares of Common Stock of Miravant Medical Technologies, a Delaware corporation, to which the within Warrant relates, and appoints ____________________ Attorney to transfer such right on the books of Miravant Medical Technologies, a Delaware Corporation, with full power of substitution of premises.

Dated: By:___________________________________ Name:

Title:

(signature must conform to name of holder as specified on the fact of the Warrant)

Address:

Signed in the presence of :

Dated:

EX-4.2

EXHIBIT D

TO

SERIES B PREFERRED STOCK PURCHASE AGREEMENT

REGISTRATION RIGHTS AGREEMENT

THIS REGISTRATION RIGHTS AGREEMENT, is entered into as of May 3, 2005, by and between MIRAVANT MEDICAL TECHNOLOGIES, a Delaware corporation (the “Company”), with headquarters located at 336 Bollay Drive, Santa Barbara, California 93117, and SCORPION CAPITAL PARTNERS, LP, ALBA LTD. and ALERT INVESTMENTS LIMITED (the “Purchasers”). Capitalized terms used herein are used as defined in Section 1 of this Agreement.

RECITALS

A.In connection with the Series B Preferred Stock Purchase Agreement dated as of May 3, 2005 between the Purchasers and the Company (the “Purchase Agreement”), the Company has agreed, upon the terms and subject to the conditions of said Purchase Agreement, to issue and sell to the Purchasers, and the Purchasers have agreed to purchase from the Company, up to Eight Million Dollars ($8,000,000) of the Company’s Series B Preferred Stock ("Preferred Stock") and related Warrants.

B.To induce the Purchasers to execute and deliver the Purchase Agreement, the Company has agreed to provide certain registration rights under the Securities Act of 1933, as amended (the “Securities Act”), with respect to the shares of Common Stock issuable upon conversion of the Preferred Stock and issuable upon exercise of the Warrants (collectively, the “Registrable Shares”).

AGREEMENTS

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

1.Definitions. Capitalized terms used herein and not otherwise defined herein shall have the respective meanings set forth in the Purchase Agreement. As used in this Agreement, the following terms shall have the following meanings:

(a)“Common Stock” means the Company’s common stock, par value $0.01 per share.

(b)“Holders” are stockholders of the Company who, by virtue of agreements with the Company, are entitled to include their securities in certain Registration Statements filed by the Company.

(c)“Purchasers” means the Purchasers and any transferee or assignee of the Purchasers who agree to become bound by the provisions of this Agreement in accordance with Section 9 hereof.

(d)“Registrable Securities” means the Registrable Shares, together with any shares of Common Stock or other securities which may be issued as a dividend or other distribution or in exchange for Registrable Shares and any additional shares of Common Stock, which may be issued to Purchasers in accordance with antidilution rights available to the Purchasers.

(e)“Registration Period” means the period between the date of this Agreement and the earliest of (i) the date on which all of the Registrable Securities (including all shares of Common Stock into which the Warrants are exercisable) have been sold in transactions where the transferee is not subject to securities law resale restrictions (or is subject to securities law resale restrictions solely because it is an “affiliate” of the Company under the Securities Act and the Rules promulgated thereunder), or (ii) the date on which the Registrable Securities (in the opinion of Purchasers' or the Company’s counsel) may be immediately sold without registration and free of restrictions on transfer.

(f)“Registration Statement” means a registration statement of the Company filed with the Securities and Exchange Commission (the “SEC”) under the Securities Act.

(g)The terms “register,” “registered,” and “registration” refer to a registration effected by preparing and filing a Registration Statement in compliance with the Securities Act and applicable rules and regulations thereunder and pursuant to Rule 415 under the Securities Act, and the declaration or ordering of effectiveness of such Registration Statement by the SEC.

2.Registration.

(a)Required Registration. Pursuant to the terms of this Section 2(a), and upon the earlier of (i) sixty (60) days of a demand by Purchasers holding a majority of the issued and outstanding Preferred Stock, or (ii) thirty (30) days following approval of the Proposal, the Company shall prepare promptly and file a Registration Statement with the SEC, registering the Registrable Securities for resale. To the extent allowable under the Securities Act and the Rules promulgated thereunder (including Rule 416), the Registration Statement shall include such indeterminate number of additional shares of Common Stock as may become issuable upon conversion of the Preferred Stock and exercise of the Warrants (A) to prevent dilution resulting from stock splits, stock dividends or similar transactions, or (B) by reason of changes in the exercise price of the Warrants in accordance with the terms thereof. The Registration Statement (and each amendment or supplement thereto) shall be provided to, and subject to the reasonable approval of, the Purchasers and their counsel prior to its filing or other submission. The Company shall use its best efforts to cause such Registration Statement to be declared effective by the SEC as soon as practicable following the filing thereof, but in any event no later than the ninetieth (90th) day following the filing of the Registration Statement. A registration shall not count as a required registration for purposes of this Section 2(a) until (x) the Registration Statement filed in connection with such required registration has become effective, and (ii) each of the Purchasers is able to register and offer for sale all of their Registrable Securities.

(b)Payments by the Company. If any Registration Statement (or any amendment or supplement to any Registration Statement) required to be filed pursuant to Section 2(a) or 2(c) hereof has not been filed by the Company with the SEC prior to the earlier of (i) sixty (60) days of a demand by Purchasers holding a majority of the issued and outstanding Preferred Stock, or (ii) thirty (30) days following approval of the Proposal, in the case of the filing under Section 2(a) (the “Initial Filing Deadline”), or the sixtieth (60th) day following the applicable Registration Trigger Date (as defined in Section 2(c) below), in the case of a filing under Section 2(c) (a “Subsequent Filing Deadline”), or if the Company shall not have caused the Registration Statement to be declared effective by the SEC not later than the one hundred and twentieth (120th) day following the date hereof (the "Initial Effectiveness Deadline"), or after a Registration Statement is first declared effective by the SEC, it ceases for any reason to remain continuously effective as to all Registrable Securities for which it is required to be effective, for in any such cases ten Business Days (which need not be consecutive days) in the aggregate during any 12-month period (each such day being a "Non-Effective Day"), then the Company shall make payments to each Purchaser in such amounts and at such times as shall be determined pursuant to this Section 2(b) as partial relief for the damages to the Purchasers by reason of any such delay in or reduction of their ability to sell the Registrable Securities (which remedy shall not be exclusive of any other remedies available at law or in equity). The Company shall pay to each Purchaser an amount equal to the product of (i) the aggregate purchase price of the Preferred Stock then outstanding and held by such Purchaser (including, for this purpose, the liquidated preference of any Preferred Stock that have been converted into shares of Common Stock then held by such Purchaser as if such Preferred Stock had not been so converted), multiplied by (ii) one hundredth (.01), for each 30 day period (or portion thereof) (A) after the Initial Filing Deadline and prior to the date the Registration Statement is filed with the SEC pursuant to Section 2(a), or (B) after any Subsequent Filing Deadline and prior to the date the respective Registration Statement (or amendment or supplement to any previous Registration Statement) is filed with the SEC pursuant to Section 2(c), or (C) if the Registration Statement is not declared effective by the Initial Effectiveness Deadline, until such effectiveness occurs, or (D) containing a Non-Effective Day; provided, however, that, for purpose of calculating the payment amount owed to any given Purchasers, there shall be excluded from each such period any delays which are solely attributable to changes required by such Purchaser in the Registration Statement with respect to information relating to such Purchaser, including, without limitation, changes to the plan of distribution (other than any corrections of Company mistakes with respect to information previously provided by such Purchaser). All such amounts required to be paid hereunder shall be paid in cash within five days after demand therefor by Purchasers.

(c)Piggy-Back Registrations. To the extent permitted under the Company's existing registration rights agreements, if, at any time and from time to time prior to the expiration of the Registration Period (a “Registration Trigger Date”), the Company shall file with the SEC a Registration Statement relating to an offering for its own account or the account of others under the Securities Act of any of its equity securities (other than on Form S-4 or Form S-8 or their then equivalents relating to equity securities to be issued solely in connection with any acquisition of any entity or business or equity securities issuable in connection with stock option or other employee benefit plans), the Company shall send to each Purchaser written notice of such filing, and if, within fifteen (15) days after the date of such notice, such Purchaser shall so request in writing, the Company shall include in such Registration Statement all or any part of the Registrable Securities such Purchaser requests to be registered. Notwithstanding the foregoing, in the event that, in connection with any underwritten public offering, the managing underwriter(s) thereof shall impose a limitation on the number of shares of Common Stock which may be included in the Registration Statement because, in such underwriter(s)’ judgment, marketing or other factors dictate such limitation is necessary to facilitate public distribution, then the Company shall be obligated to include in such Registration Statement only such limited portion of the Registrable Securities with respect to which such Purchaser has requested inclusion hereunder as the underwriter shall permit; provided, however, that (i) the Company shall not exclude any Registrable Securities unless the Company has first excluded all outstanding securities, the holders of which are not contractually entitled to inclusion of such securities in such Registration Statement or are not contractually entitled to pro rata inclusion with the Registrable Securities, (ii) after giving effect to the immediately preceding proviso, any such exclusion of Registrable Securities shall be made pro rata among the Purchasers seeking to include Registrable Securities and the holders of other securities having the contractual right to inclusion of their securities in such Registration Statement by reason of required registration rights, in proportion to the number of Registrable Securities or other securities, as applicable, sought to be included by each such Purchaser or other holder, and (iii) no such reduction shall reduce the amount of Registrable Securities included in the registration below fifty (50%) of the total amount of securities included in such registration. No right to registration of Registrable Securities under this Section 2(c) shall be construed to limit any registration required under Section 2(a) hereof. If an offering in connection with which a Purchaser is entitled to registration under this Section 2(c) is an underwritten offering, then each Purchaser whose Registrable Securities are included in such Registration Statement shall, unless otherwise agreed by the Company, offer and sell such Registrable Securities in an underwritten offering using the same underwriter or underwriters and, subject to the provisions of this Agreement, on the same terms and conditions as other shares of Common Stock included in such underwritten offering. The Purchasers shall be entitled to unlimited piggyback registrations during the Registration Period.

3.Additional Obligations of the Company. In connection with the registration of the Registrable Securities, the Company shall have the following additional obligations:

(a)The Company shall keep the Registration Statement required by Section 2(a) hereof effective pursuant to Rule 415 under the Securities Act at all times during the Registration Period as defined in Section 1(e) above.

(b)The Registration Statement (including any amendments or supplements thereto and prospectuses contained therein) filed by the Company shall not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein, or necessary to make the statements therein, in light of the circumstances in which they were made, not misleading. The Company shall prepare and file with the SEC such amendments (including post-effective amendments) and supplements to the Registration Statement and the prospectus used in connection with the Registration Statement as may be necessary to keep the Registration Statement effective at all times during the Registration Period, and, during such period, shall comply with the provisions of the Securities Act with respect to the disposition of all Registrable Securities of the Company covered by the Registration Statement until such time as all of such Registrable Securities have been disposed of in accordance with the intended methods of disposition by the sellers thereof as set forth in the Registration Statement. In the event the number of shares of Common Stock included in a Registration Statement filed pursuant to this Agreement is insufficient to cover all of the Registrable Securities, the Company shall amend, if permissible, the Registration Statement and/or file a new Registration Statement so as to cover all of the Registrable Securities as soon as practicable, but in no event more than twenty (20) business days after the Company first determines (or reasonably should have determined) the need therefor. The Company shall use its commercially reasonable efforts to cause such amendment and/or new Registration Statement to become effective as soon as practicable following the filing thereof.

(c)The Company shall furnish to each Purchaser whose Registrable Securities are included in the Registration Statement (i) promptly after the same is prepared and publicly distributed, filed with the SEC or received by the Company, one copy of the Registration Statement and any amendment thereto; each preliminary prospectus and final prospectus and each amendment or supplement thereto; and, in the case of the Registration Statement required under Section 2(a) above, each letter written by or on behalf of the Company to the SEC and each item of correspondence from the SEC, in each case relating to such Registration Statement (other than any portion of any item thereof which contains information for which the Company has sought confidential treatment); and (ii) such number of copies of a prospectus, including a preliminary prospectus, and all amendments and supplements thereto, and such other documents as such Purchaser may reasonably request in order to facilitate the disposition of the Registrable Securities owned by such Purchaser.

(d)The Company shall use its commercially reasonable best efforts to (i) register and qualify the Registrable Securities covered by the Registration Statement under such other securities or blue sky laws of such jurisdictions as the Purchasers reasonably request, (ii) prepare and file in those jurisdictions such amendments (including post-effective amendments) and supplements to such registrations as may be necessary to maintain the effectiveness thereof during the Registration Period, (iii) take such other actions as may be necessary to maintain such registrations and qualifications in effect at all times during the Registration Period, and (iv) take all other actions reasonably necessary or advisable to qualify the Registrable Securities for sale in such jurisdictions. Notwithstanding the foregoing provision, the Company shall not be required in connection therewith or as a condition thereto to (i) qualify to do business in any jurisdiction where it would not otherwise be required to qualify but for this Section 3(d), (ii) subject itself to general taxation in any such jurisdiction, (iii) file a general consent to service of process in any such jurisdiction, (iv) provide any undertakings that cause more than nominal expense or burden to the Company, or (v) make any change in its charter or bylaws, which in each case the Board of Directors of the Company determines to be contrary to the best interests of the Company and its stockholders.

(e)The Company shall notify each Purchaser who holds Registrable Securities being sold pursuant to a Registration Statement of the happening of any event of which the Company has knowledge as a result of which the prospectus included in the Registration Statement as then in effect includes an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading (a “Suspension Event”). The Company shall make such notification as promptly as practicable after the Company becomes aware of such Suspension Event, shall promptly, but in all events within five (5) business days, use its commercially reasonable best efforts to prepare a supplement or amendment to the Registration Statement to correct such untrue statement or omission, and shall deliver a number of copies of such supplement or amendment to each Purchaser as such Purchaser may reasonably request. Notwithstanding the foregoing provision, the Company shall not be required to maintain the effectiveness of the Registration Statement or to amend or supplement the Registration Statement for a period (a “Delay Period”) expiring upon the later to occur of (i)  the date on which the Company is able to comply with its disclosure obligations and SEC requirements related thereto, or (iii) thirty (30) days after the occurrence of the Suspension Event.

(f)The Company shall use its commercially reasonable efforts to prevent the issuance of any stop order or other suspension of effectiveness of a Registration Statement and, if such an order is issued, shall use its commercially reasonable best efforts to obtain the withdrawal of such order at the earliest possible time and to notify each Purchaser who holds Registrable Securities being sold (or, in the event of an underwritten offering, the managing underwriters) of the issuance of such order and the resolution thereof.

(g)The Company shall permit a single firm of counsel designated by the Purchasers who holds a majority in interest of the Registrable Securities being sold pursuant to such registration to review the Registration Statement and all amendments and supplements thereto (as well as all requests for acceleration or effectiveness thereof) a reasonable period of time prior to their filing with the SEC, and shall not file any document in a form to which such counsel reasonably objects.

(h)At the request of any Purchaser who holds Registrable Securities being sold pursuant to such registration, the Company shall furnish on the date that Registrable Securities are delivered to an underwriter for sale in connection with the Registration Statement (i) a letter, dated such date, from the Company’s independent certified public accountants in form and substance as is customarily given by independent certified public accountants to underwriters in an underwritten public offering, addressed to the Purchasers; and (ii) an opinion, dated such date, from counsel representing the Company for purposes of such Registration Statement, in form and substance as is customarily given in an underwritten public offering, addressed to the underwriters and Purchasers.

(i)The Company shall make available for inspection by any Purchaser whose Registrable Securities are being sold pursuant to such registration, any underwriter participating in any disposition pursuant to the Registration Statement, and any attorney, accountant or other agent retained by any such Purchaser or underwriter (collectively, the “Inspectors”), all pertinent financial and other records, pertinent corporate documents and properties of the Company (collectively, the “Records”), as shall be reasonably necessary to enable each Inspector to exercise its due diligence responsibility, and cause the Company’s officers, directors and employees to supply all information which any Inspector may reasonably request for purposes of such due diligence; provided, however, that each Inspector shall hold in confidence and shall not make any disclosure (except to a Purchaser) of any Record or other information which the Company determines in good faith to be confidential, and of which determination the Inspectors are so notified, unless (i) the disclosure of such Records is necessary to avoid or correct a misstatement or omission in any Registration Statement, (ii) the release of such Records is ordered pursuant to a subpoena or other order from a court or government body of competent jurisdiction, or such release is reasonably necessary in connection with litigation or other legal process or (iii) the information in such Records has been made generally available to the public other than by disclosure in violation of this or any other agreement. The Company shall not be required to disclose any confidential information in such Records to any Inspector until and unless such Inspector shall have entered into confidentiality agreements (in form and substance satisfactory to the Company) with the Company with respect thereto, substantially in the form of this Section 3(j). Each Purchaser agrees that it shall, upon learning that disclosure of such Records is sought in or by a court or governmental body of competent jurisdiction or through other means, give prompt notice to the Company and allow the Company, at the Company’s expense, to undertake appropriate action to prevent disclosure of, or to obtain a protective order for, the Records deemed confidential. Nothing herein shall be deemed to limit the Purchasers' ability to sell Registrable Securities in a manner which is otherwise consistent with applicable laws and regulations.

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

(k)The Company shall provide a transfer agent and registrar, which may be a single entity, for the Registrable Securities not later than the effective date of the Registration Statement.

(l)The Company shall cooperate with the Purchasers who hold Registrable Securities being sold and the managing underwriter or underwriters, if any, to facilitate the timely preparation and delivery of certificates (not bearing any restrictive legends) representing Registrable Securities to be sold pursuant to the Registration Statement and enable such certificates to be in such denominations or amounts as the case may be, and registered in such names as the managing underwriter or underwriters, if any, or the Purchasers may reasonably request; and, within three (3) business days after a Registration Statement which includes Registrable Securities is ordered effective by the SEC, the Company shall deliver, and shall cause legal counsel selected by the Company to deliver, to the transfer agent for the Registrable Securities (with copies to the Purchasers whose Registrable Securities are included in such Registration Statement) instructions to the transfer agent to issue new stock certificates without a legend and an opinion of such counsel that the Registrable Shares have been registered.

(m)The Company shall take all other reasonable actions necessary to expedite and facilitate disposition by the Purchasers of the Registrable Securities pursuant to the Registration Statement.

(n)At the request of any Purchaser, the Company shall promptly prepare and file with the SEC such amendments (including post-effective amendments) and supplements to a Registration Statement and the prospectus used in connection with the Registration Statement as may be necessary in order to change the plan of distribution set forth in such Registration Statement to conform to written information supplied to the Company by such Purchaser for such purpose.

(o)In the case of an underwritten offering, enter into such customary agreements (including underwriting agreements in customary form) and take all such other actions as the Purchasers of a majority of the Registrable Shares being sold or the underwriters, if any, reasonably request in order to expedite or facilitate the disposition of such Registrable Shares;

(p)The Company shall comply with all applicable laws related to a Registration Statement and offering and sale of securities and all applicable rules and regulations of governmental authorities in connection therewith.

4.Obligations of the Purchasers. In connection with the registration of the Registrable Securities, the Purchasers shall have the following obligations:

(a)The Purchasers agree to furnish to the Company such information regarding itself, the number of Registrable Securities held by it and the intended method of disposition of the Registrable Securities held by it as shall be reasonably required by rules of the SEC to effect the registration of the Registrable Securities. The information so provided by any given Purchaser shall be included without material alteration in the Registration Statement and shall not be modified without such Purchaser’s written consent. At least twenty (20) business days prior to the first anticipated filing date of the Registration Statement, the Company shall notify the Purchasers of the information the Company requires from each Purchaser (the “Requested Information”) if such Purchaser elects to have any of such Purchaser’s Registrable Securities included in the Registration Statement.

(b)The Purchasers, by the Purchasers' acceptance of the Registrable Securities, agrees to cooperate with the Company as reasonably requested by the Company in connection with the preparation and filing of the Registration Statement hereunder, unless any given Purchaser has notified the Company in writing of such Purchasers' election to exclude all of such Purchaser’s Registrable Securities from the Registration Statement.

(c)The Purchasers agree that, upon receipt of any notice from the Company of the happening of any event of the kind described in Section 3(f) or 3(g), the Purchasers will immediately discontinue disposition of Registrable Securities pursuant to the Registration Statement covering such Registrable Securities until such Purchaser’s’ receipt of the copies of the supplemented or amended prospectus contemplated by Section 3(f) or 3(g) and, if so directed by the Company, such Purchaser shall deliver to the Company (at the expense of the Company) or destroy (and deliver to the Company a certificate of destruction) all copies, other than file copies, in such Purchaser’s possession, of the prospectus covering such Registrable Securities current at the time of receipt of such notice.

5.Expenses of Registration. All expenses, other than underwriting discounts and commissions, incurred in connection with registrations, filings or qualifications pursuant to Sections 2 and 3, including, without limitation, all registration, listing and qualifications fees, printers and accounting fees, the fees and disbursements of counsel for the Company, and the reasonable fees and disbursements of one counsel selected by the Purchasers pursuant to Section 3(e) hereof, shall be borne by the Company.

6.Indemnification. In the event any Registrable Securities are included in a Registration Statement under this Agreement:

(a)To the extent permitted by law, the Company will indemnify and hold harmless each Purchaser who holds such Registrable Securities, the directors, if any, of such Purchaser, the officers, if any, of such Purchaser, each person, if any, who controls any Purchaser within the meaning of the Securities Act or the Exchange Act, any underwriter (as defined in the Securities Act) for the Purchasers, the directors, if any, of such underwriter and the officers, if any, of such underwriter, and each person, if any, who controls any such underwriter within the meaning of the Securities Act or the Exchange Act (each, an “Indemnified Person”), against any losses, claims, damages, expenses or liabilities (joint or several) (collectively “Claims”) to which any of them become subject under the Securities Act, the Exchange Act or otherwise, insofar as such Claims (or actions or proceedings, whether commenced or threatened, in respect thereof) arise out of or are based upon any of the following statements, omissions or violations in the Registration Statement, or any post-effective amendment thereof, or any prospectus included therein: (i) any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement or any post-effective amendment thereof or the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, (ii) any untrue statement or alleged untrue statement of a material fact contained in any preliminary prospectus if used prior to the effective date of such Registration Statement, or contained in the final prospectus (as amended or supplemented, if the Company files any amendment thereof or supplement thereto with the SEC) or the omission or alleged omission to state therein any material fact necessary to make the statements made therein, in light of the circumstances under which the statements therein were made, not misleading, or (iii) any violation or alleged violation by the Company of the Securities Act, the Exchange Act or any state securities law or any rule or regulation (the matters in the foregoing clauses (i) through (iii) being, collectively, “Violations”). Subject to the restrictions set forth in Section 6(c) with respect to the number of legal counsel, the Company shall reimburse the Purchasers and each such underwriter or controlling person, promptly as such expenses are incurred and are due and payable, for any legal fees or other reasonable expenses incurred by them in connection with investigating or defending any such Claim. Notwithstanding anything to the contrary contained herein, the indemnification agreement contained in this Section 6(a): (A) shall not apply to a Claim arising out of or based upon a Violation which occurs in reliance upon and in conformity with information furnished in writing to the Company by any Indemnified Person or underwriter for such Indemnified Person expressly for use in connection with the preparation of the Registration Statement or any such amendment thereof or supplement thereto, if such prospectus was timely made available by the Company pursuant to Section 3(c) hereof; (B) with respect to any preliminary prospectus shall not inure to the benefit of any such person from whom the person asserting any such Claim purchased the Registrable Securities that are the subject thereof (or to the benefit of any person controlling such person) if the untrue statement or omission of material fact contained in the preliminary prospectus was corrected in the prospectus, as then amended or supplemented, if a prospectus was timely made available by the Company pursuant to Section 3(c) hereof; and (C) shall not apply to amounts paid in settlement of any Claim if such settlement is effected without the prior written consent of the Company, which consent shall not be unreasonably withheld. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of the Indemnified Persons and shall survive the transfer of the Registrable Securities by the Purchasers pursuant to Section 9.

(b)In connection with any Registration Statement in which a Purchaser is participating, each such Purchaser, severally and not jointly, agrees to indemnify and hold harmless, to the same extent and in the same manner set forth in Section 6(a), the Company, each of its directors, each of its officers who signs the Registration Statement, each person, if any, who controls the Company within the meaning of the Securities Act or the Exchange Act, any underwriter and any other stockholder selling securities pursuant to the Registration Statement or any of its directors or officers or any person who controls such stockholder or underwriter within the meaning of the Securities Act or the Exchange Act (collectively and together with an Indemnified Person, an “Indemnified Party”), against any Claim to which any of them may become subject, under the Securities Act, the Exchange Act or otherwise, insofar as such Claim arises out of or is based upon any Violation, in each case to the extent (and only to the extent) that such Violation occurs in reliance upon and in conformity with written information furnished to the Company by such Purchaser expressly for use in connection with such Registration Statement, and such Purchaser will promptly reimburse any legal or other expenses reasonably incurred by them in connection with investigating or defending any such Claim; provided, however, that the indemnity agreement contained in this Section 6(b) shall not apply to amounts paid in settlement of any Claim if such settlement is effected without the prior written consent of such Purchaser, which consent shall not be unreasonably withheld; provided further, however, that the Purchasers shall be liable under this Section 6(b) for only that amount of a Claim as does not exceed the net proceeds to such Purchaser as a result of the sale of Registrable Securities pursuant to such Registration Statement. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of such Indemnified Party and shall survive the transfer of the Registrable Securities by the Purchasers pursuant to Section 9. Notwithstanding anything to the contrary contained herein, the indemnification agreement contained in this Section 6(b) with respect to any preliminary prospectus shall not inure to the benefit of any Indemnified Party if the untrue statement or omission of material fact contained in the preliminary prospectus was corrected on a timely basis in the prospectus, as then amended or supplemented.

(c)Promptly after receipt by an Indemnified Person or Indemnified Party under this Section 6 of notice of the commencement of any action (including any governmental action), such Indemnified Person or Indemnified Party shall, if a Claim in respect thereof is to made against any indemnifying party under this Section 6, deliver to the indemnifying party a written notice of the commencement thereof and this indemnifying party shall have the right to participate in, and, to the extent the indemnifying party so desires, jointly with any other indemnifying party similarly noticed, to assume control of the defense thereof with counsel mutually satisfactory to the indemnifying parties; provided, however, that an Indemnified Person or Indemnified Party shall have the right to retain its own counsel, with the fees and expenses to be paid by the indemnifying party, if, in the reasonable opinion of counsel retained by the indemnifying party, the representation by such counsel of the Indemnified Person or Indemnified Party and the indemnifying party would be inappropriate due to actual or potential differing interests between such Indemnified Person or Indemnified Party and other party represented by such counsel in such proceeding. The Company shall pay for only one separate legal counsel for the Purchasers; such legal counsel shall be selected by the Purchasers holding a majority in interest of the Registrable Securities. The failure to deliver written notice to the indemnifying party within a reasonable time of the commencement of any such action shall not relieve such indemnifying party of any liability to the Indemnified Person or Indemnified Party under this Section 6, except to the extent that the indemnifying party is prejudiced in its ability to defend such action. The indemnification required by this Section 6 shall be made by periodic payments of the amount thereof during the course of the investigation or defense, as such expense, loss, damage or liability is incurred and is due and payable. The provisions of this Section 6 shall survive the termination of this Agreement.

7.Contribution. If the indemnification provided for in Section 6 herein is unavailable to the Indemnified Parties in respect of any losses, claims, damages or liabilities referred to herein (other than by reason of the exceptions provided therein), then each such Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall contribute to the amount paid or payable by such Indemnified Party as a result of such losses, claims, damages or liabilities as between the Company on the one hand and any Purchaser on the other, in such proportion as is appropriate to reflect the relative fault of the Company and of such Purchaser in connection with the statements or omissions which resulted in such losses, claims, damages or liabilities, as well as any other relevant equitable considerations. The relative fault of the Company on the one hand and of any Purchaser on the other shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact relates to information supplied by the Company or by such Purchaser.

In no event shall the obligation of any Indemnifying Party to contribute under this Section 7 exceed the amount that such Indemnifying Party would have been obligated to pay by way of indemnification if the indemnification provided for under Section 6(a) or 6(b) hereof had been available under the circumstances.

The Company and the Purchasers agree that it would not be just and equitable if contribution pursuant to this Section 7 were determined by pro rata allocation (even if the Purchasers or the underwriters were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to in the immediately preceding paragraphs. The amount paid or payable by an Indemnified Party as a result of the losses, claims, damages and liabilities referred to in the immediately preceding paragraphs shall be deemed to include, subject to the limitations set forth above, any legal or other expenses reasonably incurred by such Indemnified Party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this section, no Purchaser or underwriter shall be required to contribute any amount in excess of the amount by which (i) in the case of any Purchaser, the net proceeds received by such Purchaser from the sale of Registrable Securities or (ii) in the case of an underwriter, the total price at which the Registrable Securities purchased by it and distributed to the public were offered to the public exceeds, in any such case, the amount of any damages that such Purchaser or underwriter has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act ) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation.

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

(a)File with the SEC in a timely manner and make and keep available all reports and other documents required of the Company under the Exchange Act so long as the Company remains subject to such requirements and the filing and availability of such reports and other documents is required for the applicable provisions of Rule 144; and

(b)Furnish to the Purchasers so long as the Purchasers hold Registrable Securities, promptly upon request, (i) a written statement by the Company that it has complied with the reporting requirements of Rule 144 and the Exchange Act, (ii) a copy of the most recent annual or quarterly report of the Company and such other reports and documents so filed by the Company, and (iii) such other information as may be reasonably requested to permit the Purchasers to sell such securities pursuant to Rule 144 without registration.

9.Assignment of Registration Rights. The rights to have the Company register Registrable Securities pursuant to this Agreement shall be automatically assigned by the Purchasers to transferees or assignees of all or any portion of such securities or Warrants exercisable into Registrable Securities only if (i) the Purchasers agree in writing with the transferee or assignee to assign such rights, and a copy of such agreement is furnished to the Company within a reasonable time after such assignment, (ii) the Company is, within a reasonable time after such transfer or assignment, furnished with written notice of the name and address of such transferee or assignee and the securities with respect to which such registration rights are being transferred or assigned, (iii) following such transfer or assignment the further disposition of such securities by the transferee or assignee is restricted under the Securities Act and applicable state securities laws, (iv) at or before the time the Company received the written notice contemplated by clause (ii) of this sentence, the transferee or assignee agrees in writing with the Company to be bound by all of the provisions contained herein, (v) such transfer shall have been made in accordance with the applicable requirements of the Purchase Agreement, and (vi) such transferee shall be an “accredited investor” as that term is defined in Rule 501 of Regulation D promulgated under the Securities Act.

10.Amendment of Registration Rights. Provisions of this Agreement may be amended and the observance thereof may be waived (either generally or in a particular instance and either retroactively or prospectively) only with the written consent of the Company and Purchasers holding a majority of the Registrable Securities then outstanding. Any such amendment or waiver effected in accordance with this paragraph shall be binding upon each holder of Registrable Securities (including securities into which such securities have been converted or exchanged or for which such securities have been exercised) and each future holder of all such securities. Each Purchaser acknowledges that by the operation of this paragraph, the holders of a majority of the Registrable Securities then outstanding will have the right and power to diminish or eliminate all rights of Purchasers under this Agreement.

11.Miscellaneous.

(a)Conflicting Instructions. A person or entity is deemed to be a holder of Registrable Securities whenever such person or entity owns of record such Registrable Securities. If the Company receives conflicting instructions, notices or elections from two or more persons or entities with respect to the same Registrable Securities, the Company shall act upon the basis of instructions, notice or election received from the registered owner of such Registrable Securities.

(b)Notices. Any notices required or permitted to be given under the terms of this Agreement shall be sent by certified or registered mail (with return receipt requested) or delivered personally or by courier (including a nationally recognized overnight delivery service) or by facsimile transmission. Any notice so given shall be deemed effective upon receipt if delivered personally, by U.S. Mail or by courier or facsimile transmission, in each case addressed to a party at the following address or such other address as each such party furnishes to the other in accordance with this Section 12(b), and:

if to the Company:

Miravant Medical Technologies

336 Bollay Drive

Santa Barbara, CA 93117

Attention: John M. Philpott

Facsimile: (805) 685-1901

with copy to:

Sheppard Mullin Richter & Hampton, LLP

800 Anacapa Street

Santa Barbara, CA 93101

Attention: Joseph E. Nida, Esq.

Facsimile: (805) 568-1955

If to the Purchasers:

Scorpion Capital Partners, L.P.

245 Fifth Avenue, 25th Floor

New York, New York 10016

Attention: Kevin R. McCarthy

Facsimile: (212) 213-9607

Alba Ltd.

___________________________

___________________________

___________________________

Alert Investments Limited

___________________________

___________________________

___________________________

with a copy to:

Liner Yankelevitz Sunshine & Regenstreif LLP

1100 Glendon Ave., 14th Floor

Los Angeles, CA 90024-3503

Attention: David M. Tamman, Esq.

Facsimile: (310) 500-3501

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

(d)Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of California applicable to contracts made and to be performed in the State of California.

(e)Severability. In the event that any provision of this Agreement is invalid or unenforceable under any applicable statute or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform with such statute or rule of law. Any provision hereof which may prove invalid or unenforceable under any law shall not affect the validity or enforceability of any other provision hereof.

(f)Entire Agreement. This Agreement and the Purchase Agreement (including all schedules and exhibits thereto) constitute the entire agreement among the parties hereto with respect to the subject matter hereof. There are no restrictions, promises, warranties or undertakings, other than those set forth or referred to herein or therein. This Agreement supersedes all prior agreements and understandings among the parties hereto with respect to the subject matter hereof.

(g)Successors and Assigns. Subject to the requirements of Section 9 hereof, this Agreement shall inure to the benefit of and be binding upon the successors and assigns of each of the parties hereto.

(h)Use of Pronouns. All pronouns and any variations thereof refer to the masculine, feminine or neuter, singular or plural, as the context may require.

(i)Headings. The headings and subheadings in the Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof.

(j)Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original but all of which shall constitute one and the same agreement. This Agreement, once executed by a party, may be delivered to the other party hereto by facsimile transmission, and facsimile signatures shall be binding on the parties hereto.

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

(l)Remedies. No provision of this Agreement providing for any remedy to the Purchasers shall limit any remedy which would otherwise be available to the Purchasers at law or in equity. Nothing in this Agreement shall limit any rights a Purchasers may have with any applicable federal or state securities laws with respect to the investment contemplated hereby. The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to a Purchaser. Accordingly, the Company acknowledges that the remedy at law for a breach of its obligations under this Agreement will be inadequate and agrees, in the event of a breach or threatened breach by the Company of the provisions of this Agreement, that a Purchaser shall be entitled, in addition to all other available remedies, to an injunction restraining any breach and requiring immediate compliance, without the necessity of showing economic loss and without any bond or other security being required.

(signature page immediately follows)

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

COMPANY:

MIRAVANT MEDICAL TECHNOLOGIES

By:

Name:John M. Philpott

Title:Chief Financial Officer

PURCHASERS:

SCORPION CAPITAL PARTNERS, LP

By: SCORPION GP, LLC, its general partner

By: ___________________________

Name:Nuno Brandolini

Title: Managing Partner

ALBA LTD.

By:_____________________________________

Name:

Title:

ALERT INVESTMENTS LIMITED

By:_____________________________________

Name:

Title:

EX-4.3

CERTIFICATE OF DESIGNATION

OF

SERIES B PREFERRED STOCK OF

MIRAVANT MEDICAL TECHNOLOGIES

(pursuant to Section 151 of the Delaware General Corporation Law)

GARY S. KLEDZIK and JOSEPH E. NIDA certify that:

1.They are the Chief Executive Officer and Secretary, respectively, of MIRAVANT MEDICAL TECHNOLOGIES, a Delaware corporation (the “Corporation”).

2.The Corporation is authorized to issue THIRTY MILLION (30,000,000) shares of preferred stock.

3.The following resolutions were duly adopted by the Board of Directors:

WHEREAS, the Amended and Restated Certificate of Incorporation (the “Certificate of Incorporation”) of the Corporation provides for a class of its authorized stock known as preferred stock, comprising THIRTY MILLION (30,000,000) shares, par value $0.01;

WHEREAS, the Board of Directors of the Corporation is authorized to determine the rights, preferences, privileges and restrictions, including the dividend rights, dividend rate, voting rights, conversion rights, rights and terms of redemption and liquidation preferences of any wholly unissued series of preferred stock and the number of shares constituting any series and the designation thereof, of any of them; and

WHEREAS, the Corporation has issued one series of preferred stock, the "Series A-1 Preferred Stock," consisting of ONE MILLION ONE HUNDRED AND TWELVE THOUSAND NINE HUNDRED AND SIXTY SIX (1,112,966) shares; and

WHEREAS, the Corporation wishes to issue a new class of preferred stock, "Series B Preferred Stock."

NOW, THEREFORE, BE IT RESOLVED, that the Board of Directors does hereby provide for the issuance of the Series B Preferred Stock and does hereby fix and determine the rights, preferences, privileges, restrictions and other matters relating to the Series B Preferred Stock as follows:

1.Designation. The series of preferred stock shall consist of EIGHT MILLION (8,000,000) shares designated and known as “Series B Preferred Stock.”

2.Voting.

(a)The holders of the Series B Preferred Stock shall be entitled to notice of all stockholder meetings in accordance with the Corporation’s bylaws, and except as provided in the Certificate of Incorporation, any Certificate of Designation of the Corporation, or as required by the Delaware General Corporation Law, the holders of the Series B Preferred Stock shall be entitled to vote on all matters submitted to the stockholders for a vote, voting together with the holders of the Common Stock as a single class, with each share of Series B Preferred Stock entitled to one vote for each share of Common Stock into which the Series B Preferred Stock may be converted. This provision for determination of the number of votes to which each holder of Series B Preferred Stock is entitled shall also apply in cases in which the holders of Series B Preferred Stock have the right to vote as a separate class.

(b)The Corporation shall not, without the affirmative vote or written consent of the holders of at least a majority of the then outstanding Series B Preferred Stock, voting together as a separate class:

(i)repurchase any shares of capital stock (except for the repurchase of shares of capitalstock from directors, employees and consultants pursuant to approval by the Board of Directors);

(ii)authorize, create (by reclassification or otherwise) or issue, or obligate itself to issue, any other equity security, including any other security convertible into or exercisable for any equity security, ranking senior to or having a preference over the Series B Preferred Stock or ranking on a parity therewith as to rights, preferences or privileges, including, without limitation, as to voting, dividends or the distribution of assets upon liquidation;

(iii)declare or pay dividends on or make any distribution on account of the Corporation’s Common Stock or Preferred Stock;

(iv)increase or decrease the number of authorized shares of Series B Preferred Stock;

(v)alter or amend the rights, privileges, powers, preferences or limitations of the Series B Preferred Stock by amendment of the Corporation's Certificate of Incorporation, merger, consolidation or otherwise;

(vi)sell, lease, license or otherwise dispose of all or substantially all of its assets, or consolidate with or merge into any other corporation or entity, or permit any other corporation or entity to consolidate or merge into it, or enter into a plan of exchange with any other corporation or entity, unless following such consolidation, merger or exchange the stockholders of this Corporation immediately prior to such consolidation, merger or exchange own a majority of the equity of the combined entity.

(vii)liquidate, dissolve, wind-up the Corporation or seek relief under the provisions of the bankruptcy or any insolvency laws, including without limitation, voluntary dissolution, winding-up of its business, or the making of a creditors arrangement, or the cessation of all or a substantial part of the Corporation's business.

(viii)sell or grant an exclusive license not in the ordinary course of business to, or transfer of, all or substantially all of the material intellectual property of the Corporation or its subsidiaries related to the Corporation's and its subsidiaries' core technology or core products.

3.Dividends. Each holder of Series B Preferred Stock, in preference and priority to the holders of all other classes of stock except for the Series A-1, A-2 and A-3 Preferred Stock, shall be entitled to receive, with respect to each share of Series B Preferred Stock then outstanding and held by such holder of Series B Preferred Stock, dividends, commencing from the date of issuance of such share of Series B Preferred Stock, at the rate of ten percent (10%) per annum of the Series B Liquidation Preference (the “Series B Preferred Dividends”). The Series B Preferred Dividends shall be paid annually commencing one (1) year from the date of issuance. The Corporation shall also declare and pay to the holders of the Series B Preferred Stock at the same time that it declares and pays such dividends to the holders of any capital stock of the Corporation, a dividend of Ten Percent (10%) per annum of the Series B Liquidation Preference (on an as converted to Common Stock basis). The Series B Preferred Dividends shall be cumulative in the event unpaid. No dividend shall be paid or declared on or with respect to any class or series of Junior Securities unless a dividend, payable in the same consideration and manner, is simultaneously declared and paid, as the case may be, on each share of Series B Preferred Stock in an amount determined as set forth above. “Junior Securities” means the Common Stock of the Corporation and any other class or series of stock or other equity securities of the Corporation ranking junior to the Series B Preferred Stock in respect of rights on liquidation, dissolution and winding up of the affairs of the Corporation.

4.Liquidation, Dissolution or Winding Up.

(a)In the event of any liquidation, dissolution or winding up of the Corporation, either voluntary or involuntary (a “Liquidation Event”), all assets and funds of the Corporation legally available for distribution shall be first distributed to the holders of the Series B Preferred Stock equal to ONE DOLLAR ($1.00) per share (the "Series B Liquidation Preference"), plus accrued but unpaid dividends, after distributions are first made to the Series A-1, A-2 ad A-3 Preferred Stock, but prior to any other distributions to any Junior Securities. If upon such liquidation, dissolution or winding up of the Corporation, whether voluntary or involuntary, the assets to be distributed among the holders of the Series B Preferred Stock and any class or series of capital stock ranking on a parity with the Series B Preferred Stock as to such distributions shall be insufficient to permit payment to the holders of the Series B Preferred Stock and any such class or series of capital stock of their respective liquidation amount, then the entire assets of the Corporation to be distributed shall be distributed, following any liquidation preference of the Series A-1, A-2 and A-3 Preferred Stock existing as of the date of this Certificate of Designation, pro rata to the holders of Series B Preferred Stock and the holders of such class or series of capital stock ranking on a parity with the Series B Preferred Stock as to such distributions according to the preferential amounts due thereon. Unless waived in writing by the holders of a majority of the Series B Preferred Stock then outstanding, voting together as one class, either (i) the acquisition of the Corporation by another entity by means of any transaction or series of related transactions (including, without limitation, any reorganization, merger, consolidation or similar transaction of the Corporation with or into any other corporation or entity, but excluding any merger effected exclusively for the purpose of changing the domicile of the Corporation), or (ii) a sale of all or substantially all of the assets of the Corporation, in any case in which transactions under clause (i) or (ii) above the Corporation's stockholders immediately prior to such transaction own immediately after such transaction less than a majority of the voting power of the surviving or acquiring entity (each such transaction being hereinafter referred to as a “Corporate Transaction”), shall be deemed to be a Liquidation Event within the meaning of this Section 4; provided, however, that the holder(s) of any share or shares of Series B Preferred Stock shall have the right, at his, her or its option, upon consummation of a Corporate Transaction, to require the Corporation to redeem such holder(s) shares or shares of Series B Preferred Stock, for an amount equal to such holder's Series B Liquidation Preference.

(b)The dollar amounts specified in Section 4(a) shall be equitably adjusted in the event of any stock splits, stock dividends or similar capital modifications affecting the Common Stock or the Series B Preferred Stock after the filing of this Certificate of Designation. No adjustment to any Conversion Price (as defined hereinafter) pursuant to this Certificate of Designation shall otherwise alter the above liquidation preference dollar amounts.

(c)Insofar as any distribution pursuant to Section 4(a) consists of property other than cash, the value thereof shall, for purposes of the provisions of Section 4(a), be the Fair Market Value (as hereinafter defined) at the time of such distribution.

5.Conversion.

(a)At the election of each holder of Series B Preferred Stock at any time prior to or at the occurrence of and upon compliance with the provisions of Section 5(b) as to surrender thereof, each share of Series B Preferred Stock may be converted into such number of fully paid and non-assessable shares of Common Stock as is determined by dividing ONE DOLLAR ($1.00) by the applicable Conversion Price (the “Conversion Price”) determined as hereinafter provided, in effect at the time of conversion. The initial Conversion Price shall be ONE DOLLAR ($1.00), and will be subject to adjustment as provided in Section 6 hereof.

(b)To convert any or all of his, her or its shares of Series B Preferred Stock into Common Stock, the holder shall surrender the certificate or certificates evidencing such Series B Preferred Stock, duly endorsed, accompanied by a written notice that the holder elects to convert such Series B Preferred Stock, stating therein the name or names in which the holder wishes the certificate or certificates for the Common Stock to be issued. As soon as practicable after the surrender of such certificates and subject to compliance with applicable securities laws, there shall be issued and delivered to such holder, or to the holder's nominee or nominees, a certificate or certificates for the number of Common Stock to which the holder shall be entitled, together with cash, if any, in lieu of any fraction of a share as provided herein. Such conversion shall be deemed to have been made as of the date of such surrender of the certificate or certificates for Series B Preferred Stock to be converted, and on and after such date the Person or Persons entitled to receive the Common Stock issued upon such conversion shall be treated for all purposes as the record holder or holders of such Common Stock.

(c)Any Series B Preferred Stock which at any time has been converted shall be restored to the status of authorized but unissued Preferred Stock and shall in no circumstances be reissued as Series B Preferred Stock, and the Corporation may, from time to time, take such appropriate action as may be necessary to reduce the authorized Series B Preferred Stock accordingly.

(d)The Corporation shall at all times reserve and keep available out of its authorized Common Stock, solely for issuance upon the conversion of Series B Preferred Stock, as herein provided, such number of Common Stock as shall, from time to time, be issuable upon the conversion of all outstanding Series B Preferred Stock.

(e)Upon any conversion, at the election of the Corporation, fractional shares shall not be issued but any fractions shall be adjusted by payment in cash by the Corporation on the basis of the Market Price of the Common Stock at the close of business on the date of conversion. For purposes hereof, “Market Price” shall be determined as follows:

(i)If the Common Stock is traded on a national securities exchange or is listed on the Nasdaq National Market (the “NNM”) or other over-the-counter quotation system, the Market Price shall be the last reported sale price of a share of Common Stock on such exchange or on the NNM or other over-the-counter quotation system on the last business day before the effective date of exercise of the net issuance election or if no such sale is made on such day, the mean of the closing bid and asked prices for such day on such exchange, the NNM or over-the-counter quotation system; and

(ii)If the Common Stock is not so listed and bid and ask prices are not reported, the Market Price shall be the price per share of Common Stock which the Corporation could obtain from a willing buyer for shares sold by the Corporation, as such price shall be determined in good faith by the Corporation’s Board of Directors.

(f)The Corporation shall pay all issue taxes, if any, incurred in respect of the issuance of Common Stock on conversion; provided, however, that the Corporation shall not be required to pay any transfer or other taxes incurred by reason of the issuance of such Common Stock in names other than those in which the Series B Preferred Stock surrendered for conversion is then registered.

(g)In case the Corporation shall propose at any time to take any action described in Section 4(a), then, in each such case, the Corporation shall mail to the holders of record of Series B Preferred Stock at their last known post office addresses as shown by the Corporation's records, a statement, signed by an officer of the Corporation, with respect to the proposed action, setting forth such facts with respect thereto as shall be reasonably necessary to inform the holders of Series B Preferred Stock as to the effect of such action upon their conversion rights. Such statement shall be mailed at least twenty (20) days prior to the date of the taking of such action.

6.Adjustments; Priority Distributions; Reclassification; Reorganization and Merger.

(a)If the Corporation increases or decreases the number of its issued and outstanding shares of Common Stock, or changes in any way the rights and privileges of the Common Stock, by means of (i) the making of a distribution on Common Stock payable in Common Stock, (ii) the creation of a new series of stock, (iii) a consolidation or combination of stock or (iv) a reclassification or recapitalization involving its Common Stock, then the Conversion Price in effect at the time of such action and the number of Common Stock into which the Series B Preferred Stock is then convertible shall be adjusted to be the same as they would have been if such Series B Preferred Stock had been converted immediately prior to the occurrence of the event at issue and the Common Stock into which the Series B Preferred Stock were convertible immediately prior to the event at issue had been issued and outstanding at the time of such event.

(b)If the Corporation declares a distribution payable in cash on its Common Stock and at substantially the same time offers to the holders of Common Stock a right to purchase new Common Stock from the proceeds of such distribution or for an amount substantially equal to such distribution, then the holders of Series B Preferred Stock shall have the same subscription rights that such holders would have been entitled to if such holders had converted all of the Series B Preferred Stock into Common Stock immediately prior to such grant, and the Corporation shall notify the holders of Series B Preferred Stock of such right concurrently with notice to the holders of Common Stock of their subscription right.

(c)If at any time the Corporation grants to the holders of Common Stock any right to subscribe pro rata for additional securities of the Corporation, whether Common Stock, convertible securities, or other classifications, or for any other securities or interests that a holder of Series B Preferred Stock would have been entitled to subscribe for if, immediately prior to such grant, such holder had converted Series B Preferred Stock into Common Stock, and if such action by the Corporation does not result in a readjustment of the Conversion Price under any other subsection of this Section 6, then the holders of Series B Preferred Stock shall have the same subscription rights that such holders would have been entitled to if such holders had converted all of the Series B Preferred Stock into Common Stock immediately prior to such grant, and the Corporation shall notify the holders of Series B Preferred Stock of such right concurrently with notice to the holders of Common Stock of their subscription right.

(d)In the event the Corporation shall declare a distribution payable in securities of other Persons or evidences of indebtedness issued by the Corporation or other Persons, assets (excluding cash distributions), then, in each such case for the purpose of this Section 6(d), the holders of Series B Preferred Stock shall be entitled to a proportionate share of any such distribution as though they were the holders of the number of Common Stock of the Corporation into which their Series B Preferred Stock is convertible as of the record date fixed for the determination of the holders of Common Stock of the Corporation entitled to receive such distribution.

(e)Upon the occurrence of any of the following events, the Corporation shall cause any effective provision to be made so that each holder of Series B Preferred Stock shall have the right thereafter, by converting such Series B Preferred Stock, to acquire the kind and amount of shares and other securities, and property and interests, as would be issued or payable with respect to or in exchange for the number of Common Stock of the Corporation into which the Series B Preferred Stock is then convertible as if such Series B Preferred Stock had been converted into Common Stock immediately prior to such event: (i) the reclassification, capital reorganization or other similar change of outstanding Common Stock of the Corporation, other than as described and provided for in Section 6(a); (ii) the merger or consolidation of the Corporation with one or more other corporations or other entities, other than a merger with a subsidiary or affiliate pursuant to which the Corporation is the surviving Corporation and the outstanding Common Stock, including the Common Stock into which the Series B Preferred Stock is then convertible pursuant hereto, are not affected, or (iii) the spin-off of assets, a subsidiary, or an affiliated entity, or the sale, lease, or exchange of a significant portion of the Corporation's assets, in a transaction pursuant to which the Corporation's stockholders are to receive securities or other interests in a successor entity. Any such provision made by the Corporation for adjustments with respect to the Series B Preferred Stock shall be as nearly equivalent to the adjustments otherwise provided for herein as is reasonably practicable.

(f)If any Liquidation Event is proposed, in addition to obtaining the requisite consent of the holders of the Series B Preferred Stock as set forth in Section 2(b), and in addition to the rights of the holders of the Series B Preferred Stock set forth in Section 4(a), the rights set forth herein shall be applicable. The Corporation shall deliver written notice to each holder of Series B Preferred Stock no later than twenty (20) days prior to the consummation of such Liquidation Event as a condition precedent to the consummation of any such Liquidation Event. If, as a result of such a Liquidation Event, stockholders of the Corporation are to receive securities or other interests of a successor entity, the provisions of Section 4(c)above shall apply. However, if the result of such a Liquidation Event is that stockholders of the Corporation are to receive money or property other than securities or other interest in a successor entity, each holder of Series B Preferred Stock shall be entitled to convert such shares into Common Stock prior to the consummation of such Liquidation Event, and, with respect to any Common Stock so acquired, shall be entitled to all of the rights of the other holders of Common Stock with respect to any distribution by the Corporation in connection with such Liquidation Event. If no successor entity is involved, all conversion rights provided for herein shall terminate at the close of business on the date as of which holders of record of the Common Stock shall be entitled to participate in a distribution of the assets of the Corporation in connection with such Liquidation Event; provided, however, that in no event shall that date be less than twenty (20) days after delivery to the holders of Series B Preferred Stock of the written notice described above. If the termination of conversion rights hereunder is to occur as a result of such Liquidation Event, a statement to that effect shall be included in that written notice.

(g)If the Corporation shall offer, sell, grant any option to purchase or offer, sell or grant any right to re-price its securities, or otherwise dispose of or issue (or announce any offer, sale, grant or any option to purchase or other disposition) any Common Stock or Common Stock Equivalents entitling any Person to acquire shares of Common Stock, at an effective price per share less than the Conversion Price then in effect (such lower price, the “Issuance Price”) (if the holder of the Common Stock or Common Stock Equivalents so issued shall at any time, whether by operation of purchase price adjustments, reset provisions, floating conversion, exercise or exchange prices or otherwise, or due to warrants, options or rights per share which is issued in connection with such issuance, be entitled to receive shares of Common Stock at an effective price per share which is less than the Conversion Price, such issuance shall be deemed to have occurred for less than the Conversion Price), then, the Conversion Price shall immediately be reduced to the Issuance Price. “Common Stock Equivalents” means any securities of the Corporation or any subsidiary 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 exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock. This Section 6(g) shall not apply to (i) shares of Common Stock issued or issuable to officers, directors and employees of, or consultants to, the Corporation pursuant to stock grants, option plans, purchase plans or other employee stock incentive programs or arrangements approved by the Board of Directors, or upon exercise of options or warrants granted to such parties pursuant to any such plan or arrangements, not to exceed 9,000,000 shares in the aggregate, or (ii) shares of Common Stock issued or issuable to banks, equipment lessors or other financial institutions pursuant to a debt financing or commercial leasing transaction approved by the Board of Directors.

(h)Calculation of Consideration Received. If any Common Stock, option or convertible security is issued or sold or deemed to have been issued or sold for cash, the consideration paid therefor shall be deemed to be the aggregate gross consideration paid by the purchasers therefor before deducting any discounts, commissions or other expenses in connection with the issuance and sale thereof. If any Common Stock, option or convertible security is issued or sold for a consideration other than cash, the amount of the consideration other than cash received by the Corporation shall be the Fair Market Value of such consideration. If any Common Stock, option or convertible security is issued to the owners of the non-surviving entity in connection with any merger in which the Corporation is the surviving entity, the amount of consideration therefor shall be deemed to be the Fair Market Value of such portion of the net assets and business of the non-surviving entity as is attributable to such Common Stock, option or convertible security, as the case may be. “Fair Market Value” shall mean, with respect to securities, the Market Price, and as to any other property, the value of such property determined in good faith jointly by the Board of Directors and the holders of a majority of the issued and outstanding Series B Preferred Stock.

(i)Notice of Adjustments to Conversion Price. Whenever the Conversion Price is adjusted pursuant to this Section 6, the Corporation shall promptly mail to each holder of Series B Preferred Stock, a notice setting forth the Conversion Price after such adjustment and setting forth a brief statement of the facts requiring such adjustment.

RESOLVED, FURTHER, that the Chairman, the president or any vice-president, and the secretary or any assistant secretary, of the Corporation be and they hereby are authorized and directed to prepare and file a Certificate of Designation for the Series B Preferred Stock in accordance with the foregoing resolution and the provisions of Delaware law.

#80039824.2 --

We declare, under penalty of perjury under the laws of the State of California, that the matters set forth in this certificate are true and correct of our own knowledge.

Date: May 3, 2005

____________________________________

GARY S. KLEDZIK,

Chief Executive Officer

____________________________________

JOSEPH E. NIDA,

Secretary

EX-10.1

SERIES B CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT

THIS SERIES B CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT (the "Agreement") is entered into as of May 3, 2005, by and between MIRAVANT MEDICAL TECHNOLOGIES, a Delaware corporation (the "Company"), with headquarters located at 336 Bollay Drive, Santa Barbara, California 93117, and the purchasers (collectively, the "Purchasers" and each a "Purchaser") set forth on Schedule 1 hereof, with regard to the following:

RECITALS

A.The Company and Purchasers are executing and delivering this Agreement in reliance upon the exemption from securities registration afforded by the provisions of Regulation D ("Regulation D"), as promulgated by the United States Securities and Exchange Commission (the "SEC") under the Securities Act of 1933, as amended (the "Securities Act").

B.The Purchasers desire to (a) purchase, upon the terms and conditions stated in this Agreement, shares of the Company's Series B Convertible Preferred Stock, par value $0.01 per share (the "Preferred Stock") and the Certificate of Designation for the Preferred Stock is attached hereto as Exhibit A; and (b) to purchase, upon the terms and conditions stated in this Agreement, the Stock Purchase Warrants (the "Warrants"), in the form attached hereto as Exhibit B, to acquire shares of Common Stock. The shares of Common Stock issuable upon exercise of or otherwise pursuant to the Warrants are referred to herein as "Warrant Shares". The shares of Preferred Stock issued to the Purchasers hereunder (exclusive of the Warrant Shares) are referred to herein as the "Preferred Shares." The Preferred Shares are initially convertible into one (1) share of Common Stock for each share of Preferred Stock purchased. The shares of the Company's common stock, par value $0.01 per share, issuable upon conversion of the Preferred Shares are referred to herein as the "Conversion Shares." The Preferred Shares, the Warrants, the Warrant Shares and the Conversion Shares are collectively referred to herein as the "Securities".

C.Contemporaneously with the execution and delivery of this Agreement, the parties hereto are executing and delivering a Registration Rights Agreement in the form attached hereto as Exhibit C (the "Registration Rights Agreement," and collectively with this Agreement, the Warrants and any other documents or agreements executed in connection with the transactions contemplated hereunder, the "Transaction Documents"), pursuant to which the Company has agreed to provide certain registration rights under the Securities Act, the rules and regulations promulgated thereunder and applicable state securities laws.

AGREEMENTS

NOW, THEREFORE, in consideration of their respective promises contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and Purchasers hereby agree as follows:

ARTICLE I

PURCHASE AND SALE OF PREFERRED STOCK AND WARRANTS

1.1Purchase of Preferred Stock and Warrants. Subject to the terms and conditions of this Agreement, the issuance, sale and purchase of the Preferred Shares and Warrants shall be consummated in a "Closing." The purchase price (the "Purchase Price") shall be ONE DOLLAR ($1.00) per Unit. Each Unit will purchase one (1) share of Preferred Stock, and a Warrant for the purchase of one (1) a share of Common Stock at an exercise price of ONE DOLLAR ($1.00), with a term of five (5) years. Each Purchaser agrees to purchase the amounts set forth on Schedule 1 hereof. On the date of the Closing, subject to the satisfaction or waiver of the conditions set forth in ARTICLES VI and VII hereof, the Company shall issue and sell to each Purchaser, and each Purchaser severally agrees to purchase from the Company, the number of shares of Preferred Stock set forth on the signature page executed by such Purchaser. Each Purchaser's obligation to purchase Preferred Shares and Warrants hereunder is distinct and separate from each other Purchaser's obligation to purchase, and no Purchaser shall be required to purchase hereunder more than the number of Preferred Shares and Warrants set forth on such Purchaser's signature page. The obligations of the Company with respect to each Purchaser shall be separate from the obligations of each other Purchaser and shall not be conditioned as to any Purchaser upon the performance of obligations of any other Purchaser.

1.2Form of Payment. Each Purchaser shall pay the aggregate Purchase Price for the Preferred Shares and Warrants being purchased by such Purchaser by wire transfer to the account designated by the Company.

1.3Conversion of Preferred Stock. Each share of Preferred Stock purchased is initially convertible into one (1) share of Common Stock.

1.4Closing Fee. At the Closing, the Company will pay Northeast Securities, Inc. (the "Placement Agent") a four percent (4%) placement fee of the total funds received hereunder. The Company hereby agrees to indemnify and hold harmless the Placement Agent and its officers, directors and shareholders, individually and collectively ("Placement Agent Indemnified Person(s)") from and against any and all claims, liabilities, losses, damages, costs and reasonable expenses incurred by any Placement Agent Indemnified Person (including reasonable fees and disbursements of counsel) which are related to or arising out of: (i) any untrue statement of any material fact made by the Company; or (ii) any omission of material fact necessary to make any statement not misleading, made by the Company. The Company will not however, be responsible for any claims, liabilities, losses, damages, or expenses, which resulted directly or indirectly from the Placement Agent's negligence or willful misconduct.

1.5Closing Date. Subject to the satisfaction (or waiver) of the conditions set forth in ARTICLES VI and VII below, the date and time of the issuance, sale and purchase of the Preferred Shares and Warrants pursuant to this Agreement shall be at 10:00 a.m. California time, on May 3, 2005.

ARTICLE II

PURCHASER'S REPRESENTATIONS AND

WARRANTIES

Each Purchaser represents and warrants as of the date hereof and as of the Closing, severally and solely with respect to itself and its purchase hereunder and not with respect to any other Purchaser or the purchase hereunder by any other Purchaser (and no Purchaser shall be deemed to make or have any liability for any representation or warranty made by any other Purchaser), to the Company as set forth in this ARTICLE II. No Purchaser makes any other representations or warranties, express or implied, to the Company in connection with the transactions contemplated hereby and any and all prior representations and warranties, if any, which may have been made by a Purchaser to the Company in connection with the transactions contemplated hereby shall be deemed to have been merged in this Agreement and any such prior representations and warranties, if any, shall not survive the execution and delivery of this Agreement.

2.1Investment Purpose. Purchaser is purchasing the Preferred Shares and the Warrants for Purchaser's own account for investment only and not with a view toward or in connection with the public sale or distribution thereof. Purchaser will not, directly or indirectly, offer, sell, pledge or otherwise transfer its Preferred Shares or Warrants or any interest therein except pursuant to transactions that are exempt from the registration requirements of the Securities Act and/or sales registered under the Securities Act. Purchaser understands that Purchaser must bear the economic risk of this investment indefinitely, unless the Securities are registered pursuant to the Securities Act and any applicable state securities laws or an exemption from such registration is available, and that the Company has no present intention of registering any such Securities other than as contemplated by the Registration Rights Agreement.

2.2Accredited Investor Status. Purchaser is an "accredited investor" as that term is defined in Rule 501(a) of Regulation D.

2.3Reliance on Exemptions. Purchaser understands that the Preferred Shares and Warrants are being offered and sold to Purchaser in reliance upon specific exemptions from the registration requirements of United States federal and state securities laws and that the Company is relying upon the truth and accuracy of, and Purchaser's compliance with, the representations, warranties, agreements, acknowledgments and understandings of Purchaser set forth herein in order to determine the availability of such exemptions and the eligibility of Purchaser to acquire the Preferred Shares and Warrants.

2.4Information. The Company has made available all materials relating to the business, finances and operations of the Company and materials relating to the offer and sale of the Securities which have been specifically requested by Purchaser, including without limitation the Company's Annual Report on Form 10-K for the year ended December 31, 2004 filed with the SEC (such documents collectively, the "SEC Documents"). Purchaser has been afforded the opportunity to ask questions of the Company, was permitted to meet with the Company's officers and has received what the Purchaser believes to be complete and satisfactory answers to any such inquiries. Neither such inquiries nor any other due diligence investigation conducted by Purchaser or any of its representations shall modify, amend or affect Purchaser's right to rely on the Company's representations and warranties contained in ARTICLE III. Purchaser understands that Purchaser's investment in the Securities involves a high degree of risk, including without limitation the risks and uncertainties disclosed in the SEC Documents.

2.5Governmental Review. Purchaser understands that no United States federal or state agency or any other government or governmental agency has passed upon or made any recommendation or endorsement of the Securities.

2.6Transfer or Resale. Purchaser understands that (i) except as provided in the Registration Rights Agreement, the Securities have not been and are not being registered under the Securities Act or any state securities laws, and may not be offered, sold, pledged or otherwise transferred unless subsequently registered thereunder or an exemption from such registration is available (which exemption the Company expressly agrees may be established as contemplated in clauses (b) and (c) of Section 5.1 hereof); (ii) any sale of such Securities made in reliance on Rule 144 under the Securities Act (or a successor rule) ("Rule 144") may be made only in accordance with the terms of Rule 144 and further, if Rule 144 is not applicable, any resale of such Securities without registration under the Securities Act under circumstances in which the seller may be deemed to be an underwriter (as that term is defined in the Securities Act) may require compliance with some other exemption under the Securities Act or the rules and regulations of the SEC thereunder in order for such resale to be allowed, (iii) the Company is under no obligation to register such Securities under the Securities Act or any state securities laws or to comply with the terms and conditions of any exemption thereunder (in each case, other than pursuant to this Agreement or the Registration Rights Agreement) and (iv) the Company has agreed to register the shares of Preferred Stock as provided in the Registration Rights Agreement.

2.7Legends. Purchaser understands that, subject to ARTICLE V hereof, the certificates for the Warrants and, until such time as the Conversion Shares and Warrant Shares have been registered under the Securities Act as contemplated by the Registration Rights Agreement or otherwise may be sold by Purchaser pursuant to Rule 144 (subject to and in accordance with the procedures specified in ARTICLE V hereof), the certificates for the Preferred Shares, Conversion Shares and Warrant Shares and the Warrants will bear a restrictive legend (the "Legend") in the following form:

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES. THE SECURITIES REPRESENTED HEREBY MAY NOT BE OFFERED OR SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER APPLICABLE SECURITIES LAWS OR UNLESS OFFERED, SOLD OR TRANSFERRED PURSUANT TO AN AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THOSE LAWS.

2.8Authorization; Enforcement. This Agreement and the Registration Rights Agreement have been duly and validly authorized, executed and delivered on behalf of Purchaser and are valid and binding agreements of Purchaser enforceable in accordance with their respective terms, except to the extent that such validity or enforceability may be subject to or affected by any bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally the enforcement of, creditors' rights or remedies of creditors generally, or by other equitable principles of general application.

2.9Residency. Purchaser is a resident of the jurisdiction set forth under Purchaser's name on the signature page hereto executed by Purchaser.

2.10SBIC Status. Purchaser is a federally licensed Small Business Investment Company under the Small Business Investment Act of 1958. As such, it is required to submit certain information from its portfolio companies and its is required that all portfolio companies sign certain representations that they will provide such information. In additional, the Small Business Administration ("SBA") examiners may require access to a portfolio company's books and records.

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

The Company represents and warrants to each Purchaser as of the date hereof and as of the Closing that:

3.1Organization and Qualification. Each of the Company and its subsidiaries is a corporation duly organized and existing in good standing under the laws of the jurisdiction in which it is incorporated, and has the requisite corporate power to own its properties and to carry on its business as now being conducted. The Company and each of its subsidiaries is duly qualified as a foreign corporation to do business and is in good standing in every jurisdiction where the failure so to qualify or be in good standing could reasonably be expected to have a Material Adverse Effect. "Material Adverse Effect" means any effect which, individually or in the aggregate with all other effects, reasonably would be expected to be materially adverse to the business, operations, properties, financial condition, operating results or prospects of the Company and its subsidiaries, taken as a whole on a consolidated basis or on the transactions contemplated hereby.

3.2Authorization; Enforcement. (a) The Company has the requisite corporate power and authority to enter into and perform under the Transaction Documents, and to issue, sell and perform its obligations with respect to the Securities in accordance with the terms hereof and thereof and in accordance with the terms and conditions of the Securities; (b) the execution, delivery and performance of the Transaction Documents by the Company and the consummation by it of the transactions contemplated hereby and thereby (including, without limitation, the issuance of the Preferred Shares and the Warrants, and, upon approval of the Proposal (as defined in Section 4.6), the issuance and reservation for issuance of the Warrant Shares) have been duly authorized by all necessary corporate action and, except as set forth on Schedule 3.2 hereof, no further consent or authorization of the Company, its board of directors, or its stockholders or any other Person is required with respect to any of the transactions contemplated hereby or thereby; (c)  this Agreement, the Registration Rights Agreement, the Preferred Shares, and the Warrants have been duly executed and delivered by the Company; and (d) this Agreement, the Registration Rights Agreement, the Preferred Shares, and the Warrants constitute legal, valid and binding obligations of the Company enforceable against the Company in accordance with their respective terms, except (i) to the extent that such validity or enforceability may be subject to or affected by any bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally the enforcement of, creditors' rights or remedies of creditors generally, or by other equitable principles of general application, and (ii) as rights to indemnity and contribution under the Registration Rights Agreement may be limited by federal or state securities laws. "Person" means any individual, sole proprietorship, partnership, limited liability company, joint venture, trust, unincorporated association, corporation, entity or government (whether federal, state, county, city or otherwise, including, without limitation, any instrumentality, division, agency or department thereof).

3.3Capitalization. The capitalization of the Company as of March 31, 2005, including the authorized capital stock, the number of shares issued and outstanding, the number of shares reserved for issuance pursuant to the Company's stock option plans, the number of shares reserved for issuance pursuant to securities (other than the Warrants) exercisable for, or convertible into or exchangeable for, any shares of Preferred Stock and the number of shares to be reserved for issuance upon exercise of the Warrants is set forth on Schedule 3.3 hereof. All of such outstanding shares of capital stock have been, or upon issuance will be, validly issued, fully paid and nonassessable. No shares of capital stock of the Company (including the Preferred Shares and the Warrant Shares) are subject to preemptive rights or any other similar rights of the stockholders of the Company or any liens or encumbrances. Except as disclosed in Schedule 3.3 hereof, as of the date of this Agreement, (i) there are no outstanding options, warrants, scrip, rights to subscribe for, calls or commitments of any character whatsoever relating to, or securities or rights convertible into or exercisable or exchangeable for, any shares of capital stock of the Company or any of its subsidiaries, or contracts, commitments, understandings or arrangements by which the Company or any of its subsidiaries is or may become bound to issue additional shares of capital stock of the Company or any of its subsidiaries, (ii) issuance of the Securities will not trigger antidilution rights for any other outstanding or authorized securities of the Company, and (iii) there are no agreements or arrangements under which the Company or any of its subsidiaries is obligated to register the sale of any of its or their securities under the Securities Act (except the Registration Rights Agreement). The Company has made available to Purchaser true and correct copies of the Company's Certificate of Incorporation as in effect on the date hereof ("Certificate of Incorporation"), and the Company's By-laws as in effect on the date hereof (the "By-laws"). The Company has set forth on Schedule 3.3 hereof all instruments and agreements (other than the Certificate of Incorporation and By-laws) governing securities convertible into or exercisable or exchangeable for Preferred Stock of the Company (and the Company shall provide to Purchaser copies thereof upon the request of Purchaser).

3.4Issuance of Shares. The Preferred Shares are duly authorized and reserved for issuance. The Company has currently 8,739,950 shares of Common Stock duly authorized and reserved for issuance pursuant to the conversion of the Preferred Shares and the exercise of the Warrants. Such shares, as well as any additional shares of Common Stock subsequently authorized by the Company's stockholders and Board of Directors for issuance pursuant to the conversion of the Preferred Shares, and, in the case of the Warrant Shares, upon the exercise of the Warrants in accordance with the terms thereof, as applicable, will be validly issued, fully paid and non-assessable, and free from all taxes, liens, claims and encumbrances imposed or suffered by the Company and will not be subject to preemptive rights or other similar rights of stockholders of the Company. The Preferred Shares and Warrants are duly authorized and validly issued, fully paid and nonassessable, and free from all liens, claims and encumbrances imposed or suffered by the Company and are not and will not be subject to preemptive rights or other similar rights of stockholders of the Company.

3.5No Conflicts. The execution, delivery and performance of the Transaction Documents by the Company, and the consummation by the Company of transactions contemplated hereby and thereby (including, without limitation, the issuance and reservation for issuance, as applicable, of the Securities) do not and will not (a) result in a violation of the Certificate of Incorporation or By-laws or (b) conflict with, or constitute a default (or an event which, with notice or lapse of time or both, would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture or instrument to which the Company or any of its subsidiaries is a party, or result in a violation of any law, rule, regulation, order, judgment or decree (including U.S. federal and state securities laws) applicable to the Company or any of its subsidiaries, or by which any property or asset of the Company or any of its subsidiaries, is bound or affected (except for such possible conflicts, defaults, terminations, amendments, accelerations, cancellations and violations as would not, individually or in the aggregate, have a Material Adverse Effect). Neither the Company nor any of its subsidiaries is in violation of its Certificate of Incorporation or other organizational documents. Neither the Company nor any of its subsidiaries, is in default (and no event has occurred which has not been waived which, with notice or lapse of time or both, could reasonably be expected to put the Company or any of its subsidiaries in default) under, nor has there occurred any event giving others (with notice or lapse of time or both) any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture or instrument to which the Company or any of its subsidiaries is a party, except for possible violations, defaults or rights as would not, individually or in the aggregate, have a Material Adverse Effect. The businesses of the Company and its subsidiaries are not being conducted, and shall not be conducted so long as a Purchaser owns any of the Securities, in violation of any law, ordinance or regulation of any governmental entity, except for possible violations the sanctions for which either individually or in the aggregate would not have a Material Adverse Effect. Except as (A) such as may be required under the Securities Act in connection with the performance of the Company's obligations under the Registration Rights Agreement, (B) filing of a Form D with the SEC, and (C) compliance with the state securities or Blue Sky laws of applicable jurisdictions, the Company is not required to obtain any consent, authorization or order of, or make any filing or registration with, any court or governmental agency or any regulatory or self-regulatory agency in order for it to execute, deliver or perform any of its obligations under this Agreement or the Registration Rights Agreement or to perform its obligations in accordance with the terms hereof or thereof.

3.6Consents. Except for approval of the Proposal by its stockholders as contemplated in Section 4.6, the execution, delivery and performance by the Company of the Transaction Documents and the offer, issuance and sale of the Securities require no consent of, action by or in respect of, or filing with, any Person, governmental body, agency, or official other than (i) filings that have been made pursuant to applicable state securities laws, and (ii) post-sale filings pursuant to applicable state and federal securities laws. Subject to the accuracy of the representations and warranties of each Purchaser set forth in ARTICLE II hereof, the Company has taken all action necessary to exempt (i) the issuance and sale of the Preferred Shares, (ii) the issuance of the Conversion Shares upon the due conversion of the Preferred Shares, (iii) the issuance of the Warrants, and (iv) the issuance of the Warrant Shares upon due conversion of the Warrants, from the provisions of any stockholder rights plan or other “poison pill” arrangement, any anti-takeover, business combination or control share law or statute binding on the Company or to which the Company or any of its assets and properties may be subject and any provision of the Company’s Certificate of Incorporation or By-laws that is or could reasonably be expected to become applicable to the Purchasers as a result of the transactions contemplated hereby, including without limitation, the issuance of the Securities and the ownership, disposition or voting of the Securities by the Purchasers or the exercise of any right granted to the Purchaser pursuant to this Agreement or the other Transaction Documents.

3.7SEC Documents; Financial Statements. Since December 31, 2004, the Company has timely filed the SEC Documents required to be filed by it with the SEC pursuant to the reporting requirements of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). The Company has made available to each Purchaser true and complete copies of the SEC Documents. As of their respective dates, the SEC Documents complied in all material respects with the requirements of the Exchange Act and the rules and regulations of the SEC promulgated thereunder applicable to the SEC Documents, and none of the SEC Documents, at the time they were filed with the SEC, 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 light of the circumstances under which they were made, not misleading. None of the statements made in any such SEC Documents which is required to be updated or amended under applicable law has not been so updated or amended. The consolidated financial statements of the Company included in the SEC Documents have been prepared in accordance with U.S. generally accepted accounting principles, consistently applied, and the rules and regulations of the SEC during the periods involved (except (i) as may be otherwise indicated in such consolidated financial statements or the notes thereto, or (ii) in the case of unaudited interim statements, to the extent they do not include footnotes or are condensed or summary statements) and present accurately and completely the consolidated financial position of the Company and its consolidated subsidiaries as of the dates thereof and the consolidated results of their operations and cash flows for the periods then ended (subject, in the case of unaudited statements, to normal year-end audit adjustments). Except as set forth in a manner clearly evident to a sophisticated institutional investor in the consolidated financial statements or the notes thereto of the Company included in the SEC Documents, the Company has no liabilities, contingent or otherwise, other than (i) liabilities incurred in the ordinary course of business consistent with past practice subsequent to the date of such financial statements and (ii) obligations under contracts and commitments incurred in the ordinary course of business consistent with past practice and not required under generally accepted accounting principles to be reflected in such financial statements. To the extent required by the rules of the SEC applicable thereto, the SEC Documents contain a complete and accurate list of all material undischarged written or oral contracts, agreements, leases or other instruments to which the Company or any subsidiary is a party or by which the Company or any subsidiary is bound or to which any of the properties or assets of the Company or any subsidiary is subject (each a "Contract"). None of the Company, its subsidiaries or, to the Company's Knowledge, any of the other parties thereto, is in breach or violation of any Contract, which breach or violation would have a Material Adverse Effect. No event, occurrence or condition exists which, with the lapse of time, the giving of notice, or both, could become a default by the Company or its subsidiaries thereunder which could reasonably be expected to have a Material Adverse Effect. For purposes of this Agreement, "Company's Knowledge" means the actual knowledge of the executive officers (as defined in Rule 405 under the Securities Act) of the Company, after due inquiry.

3.8Absence of Certain Changes. Since December 31, 2004, there has been no material adverse change and no material adverse development in the business, properties, operations, financial condition, results of operations or prospects of the Company, or clearly evident to a sophisticated institutional investor from the SEC Documents, including, without limitation:

(i)any change in the consolidated assets, liabilities, financial condition or operating results of the Company from that reflected in the financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2004, except for changes in the ordinary course of business which have not and could not reasonably be expected to have a Material Adverse Effect, individually or in the aggregate;

(ii)any declaration or payment of any dividend, or any authorization or payment of any distribution, on any of the capital stock of the Company, or any redemption or repurchase of any securities of the Company;

(iii)any material damage, destruction or loss, whether or not covered by insurance to any assets or properties of the Company or its subsidiaries;

(iv)any waiver, not in the ordinary course of business, by the Company or any subsidiary of a material right or of a material debt owed to it;

(v)any satisfaction or discharge of any lien, claim or encumbrance or payment of any obligation by the Company or a subsidiary, except in the ordinary course of business and which is not material to the assets, properties, financial condition, operating results or business of the Company and its subsidiaries taken as a whole (as such business is presently conducted and as it is proposed to be conducted);

(vi)any change or amendment to the Company's Certificate of Incorporation or By-laws, or material change to any material contract or arrangement by which the Company or any subsidiary is bound or to which any of their respective assets or properties is subject;

(vii)any material labor difficulties or labor union organizing activities with respect to employees of the Company or any subsidiary;

(viii)any material transaction entered into by the Company or a subsidiary other than in the ordinary course of business;

(ix)the loss of the services of any key employee, or material change in the composition or duties of the senior management of the Company or any subsidiary;

(x)the loss or threatened loss of any customer which has had or could reasonably be expected to have a Material Adverse Effect; or

(xi)any other event or condition of any character that has had or could reasonably be expected to have a Material Adverse Effect.

3.9Absence of Litigation. Except as disclosed in Schedule 3.9, there is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, or self-regulatory organization or body pending or, to the Company's Knowledge or any of its subsidiaries, threatened against or affecting the Company, any of its subsidiaries, or any of their respective directors or officers in their capacities as such. There are no facts known to the Company which, if known by a potential claimant or governmental authority, could reasonably be expected to give rise to a claim or proceeding which, if asserted or conducted with results unfavorable to the Company or any of its subsidiaries, could reasonably be expected to have a Material Adverse Effect.

3.10Tax Matters. Except as described in Schedule 3.10, the Company and each subsidiary has timely prepared and filed all tax returns required to have been filed by the Company or such subsidiary with all appropriate governmental agencies and timely paid all taxes shown thereon or otherwise owed by it. The charges, accruals and reserves on the books of the Company in respect of taxes for all fiscal periods are adequate in all material respects, and there are no material unpaid assessments against the Company or any subsidiary nor, to the Company's Knowledge, any basis for the assessment of any additional taxes, penalties or interest for any fiscal period or audits by any federal, state or local taxing authority except for any assessment which is not material to the Company and its subsidiaries, taken as a whole. All taxes and other assessments and levies that the Company or any subsidiary is required to withhold or to collect for payment have been duly withheld and collected and paid to the proper governmental entity or third party when due. There are no tax liens or claims pending or, to the Company's Knowledge, threatened against the Company or any subsidiary or any of their respective assets or property. Except as described on Schedule 3.10, there are no outstanding tax sharing agreements or other such arrangements between the Company and any subsidiary or other corporation or entity.

3.11Transactions with Affiliates. Except as disclosed in the SEC Documents, none of the officers or directors of the Company and, to the Company's Knowledge, none of the employees of the Company is presently a party to any transaction with the Company or any subsidiary (other than as holders of stock options and/or warrants, and 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 Company's Knowledge, any entity in which any officer, director, or any such employee has a substantial interest or is an officer, director, trustee or partner.

3.12Internal Controls. The Company and the subsidiaries maintain a system of internal accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management's general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles and to maintain asset accountability, (iii) access to assets is permitted only in accordance with management's general or specific authorization, and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any difference. The Company maintains and will continue to maintain a standard system of accounting established and administered in accordance with GAAP and the applicable requirements of the Exchange Act. The Company's officers certified to the Company's internal controls as of the filing of the Company's Form 10-K for the period ending December 31, 2004 and since that date, that there have been no significant changes in the Company's internal controls (as such term is defined in Section 307(b) of Regulation S-K) or, to the Company's Knowledge, any other facts that would significantly affect the Company's internal controls. The Company is not required at this date to certify its internal controls under Section 404 of the Sarbanes-Oxley Act of 2002 and has not taken any steps necessary to evaluate its internal controls to determine whether it will be able to take such a certification.

3.13Disclosure. No information relating to or concerning the Company set forth in this Agreement contains an untrue statement of a material fact. No information relating to or concerning the Company set forth in any of the SEC Documents contains a statement of material fact that was untrue as of the date such SEC Document was filed with the SEC. The Company has not omitted to state a material fact necessary in order to make the statements made herein or therein, in light of the circumstances under which they were made, not misleading. Except for the execution and performance of this Agreement, no material fact (within the meaning of the federal securities laws of the United States and of applicable state securities laws) exists with respect to the Company which has not been publicly disclosed.

3.14Acknowledgment Regarding Purchaser's Purchase of the Securities. The Company acknowledges and agrees that Purchaser is not acting as a financial advisor or fiduciary of the Company (or in any similar capacity) with respect to this Agreement or the transactions contemplated hereby, that this Agreement and the transaction contemplated hereby, and the relationship between each Purchaser and the Company, are "arms-length," and that any statement made by Purchaser (except as set forth in ARTICLE II), or any of its representatives or agents, in connection with this Agreement and the transactions contemplated hereby is not advice or a recommendation, is merely incidental to Purchaser's purchase of the Securities and has not been relied upon as such in any way by the Company, its officers or directors. The Company further represents to Purchaser that the Company's decision to enter into this Agreement and the transactions contemplated hereby have been based solely on an independent evaluation by the Company and its representatives.

3.15S-3 Registration. The Company is not currently eligible to register the resale by Purchaser of the Warrant Shares and to register the Conversion Shares on a registration statement on Form S-3 under the Securities Act because the Company's shares of Common Stock must be listed on a national exchange or Nasdaq. However, the Company will use its commercially reasonable best efforts to become eligible to register the Warrant Shares and the Conversion Shares on a Form S-2 after the Closing.

3.16No General Solicitation. Neither the Company nor any distributor participating on the Company's behalf in the transactions contemplated hereby (if any) nor any person acting for the Company, or any such distributor, has conducted any "general solicitation," as described in Rule 502(c) under Regulation D, with respect to any of the Securities being offered hereby.

3.17No Integrated Offering. Neither the Company, nor any of its affiliates, nor any person acting on its or their behalf, has directly or indirectly made any offers or sales of any security or solicited any offers to buy any security under circumstances that would prevent the parties hereto from consummating the transactions contemplated hereby pursuant to an exemption from the registration under the Securities Act pursuant to the provisions of Regulation D. The transactions contemplated hereby are exempt from the registration requirements of the Securities Act, assuming the accuracy of the representations and warranties herein contained of each Purchaser.

3.18No Brokers. The Company has taken no action which would give rise to any claim by any person for brokerage commissions, finder's fees or similar payments by Purchaser relating to this Agreement or the transactions contemplated hereby.

3.19Intellectual Property.

(i)To the Company's Knowledge, all Intellectual Property of the Company and its subsidiaries is currently in compliance with all legal requirements (including timely filings, proofs and payments of fees) and is valid and enforceable, except where the failure to be in compliance or to be valid and enforceable has not and could not reasonably be expected to have a Material Adverse Effect on the Company and its subsidiaries taken as a whole. No Intellectual Property of the Company or its subsidiaries which is necessary for the conduct of Company's and each of its subsidiaries' respective businesses as currently conducted or as currently proposed to be conducted has been or is now involved in any cancellation, dispute or litigation, and, to the Company's Knowledge, no such action is threatened. No patent of the Company or its subsidiaries has been or is now involved in any interference, reissue, re-examination or opposition proceeding. "Intellectual Property" means all of the following: (a) patents, patent applications, patent disclosures and inventions (whether or not patentable and whether or not reduced to practice); (b) trademarks, service marks, trade dress, trade names, corporate names, logos, slogans and Internet domain names, together with all goodwill associated with each of the foregoing; (c) copyrights and copyrightable works; (d) registrations, applications and renewals for any of the foregoing; and (e) proprietary computer software (including but not limited to data, data bases and documentation).

(ii)All of the licenses and sublicenses and consent, royalty or other agreements concerning Intellectual Property which are necessary for the conduct of the Company's and each of its subsidiaries' respective businesses as currently conducted or as currently proposed to be conducted to which the Company or any subsidiary is a party or by which any of their assets are bound (other than generally commercially available, non custom, off the shelf software application programs having a retail acquisition price of less than $10,000 per license) (collectively, "License Agreements") are valid and binding obligations of the Company or its subsidiaries that are parties thereto and, to the Company's Knowledge, the other parties thereto, enforceable in accordance with their terms, except to the extent that enforcement thereof may be limited by bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or other similar laws affecting the enforcement of creditors' rights generally, and there exists no event or condition which will result in a material violation or breach of or constitute (with or without due notice or lapse of time or both) a default by the Company or any of its subsidiaries under any such License Agreement.

(iii)The Company and its subsidiaries own or have the valid right to use all of the Intellectual Property that is necessary for the conduct of the Company's and each of its subsidiaries' respective businesses as currently conducted or as currently proposed to be conducted and for the ownership, maintenance and operation of the Company's and its subsidiaries' properties and assets, free and clear of all liens, encumbrances, adverse claims or obligations to license all such owned Intellectual Property, other than licenses entered into in the ordinary course of the Company's and its subsidiaries' businesses. The Company and its subsidiaries have a valid and enforceable right to use all third party Intellectual Property and confidential information used or held for use in the respective businesses of the Company and its subsidiaries.

(iv)To the Company's Knowledge, the conduct of the Company's and its subsidiaries' businesses as currently conducted does not infringe or otherwise impair or conflict with (collectively, "Infringe") any Intellectual Property rights of any third party or any confidentiality obligation owed to a third party, and, to the Company's Knowledge, the Intellectual Property and confidential information of the Company and its subsidiaries which are necessary for the conduct of Company's and each of its subsidiaries' respective businesses as currently conducted or as currently proposed to be conducted are not being Infringed by any third party. There is no litigation or order pending or outstanding or, to the Company's Knowledge, threatened or imminent, that seeks to limit or challenge or that concerns the ownership, use, validity or enforceability of any Intellectual Property or confidential information of the Company and its subsidiaries and the Company's and its subsidiaries' use of any Intellectual Property or confidential information owned by a third party, and, to the Company's Knowledge, there is no valid basis for the same.

(v)The consummation of the transactions contemplated hereby will not result in the alteration, loss, impairment of or restriction on the Company's or any of its subsidiaries' ownership or right to use any of the Intellectual Property or confidential information which is necessary for the conduct of Company's and each of its subsidiaries' respective businesses as currently conducted or as currently proposed to be conducted.

(vi)The Company and its subsidiaries have taken reasonable steps to protect the Company's and its subsidiaries' rights in their Intellectual Property. Each employee, consultant and contractor who has had access to confidential information which is necessary for the conduct of Company's and each of its subsidiaries' respective businesses as currently conducted or as currently proposed to be conducted has executed an agreement to maintain the confidentiality of such confidential information and has executed appropriate agreements that are substantially consistent with the Company's standard forms thereof. Except under confidentiality obligations, there has been no material disclosure of any of the Company's or its subsidiaries' confidential information to any third party.

3.20Environmental Matters. Neither the Company nor any subsidiary is in violation of any statute, rule, regulation, decision or order of any governmental agency or body or any court, domestic or foreign, relating to the use, disposal or release of hazardous or toxic substances or relating to the protection or restoration of the environment or human exposure to hazardous or toxic substances (collectively, "Environmental Laws"), owns or operates any real property contaminated with any substance that is subject to any Environmental Laws, is liable for any off-site disposal or contamination pursuant to any Environmental Laws, or is subject to any claim relating to any Environmental Laws; and there is no pending or, to the Company's Knowledge, threatened investigation that might lead to such a claim.

3.21Certificates, Authorities and Permits. The Company and each subsidiary possess adequate certificates, authorities or permits issued by appropriate governmental agencies or bodies necessary to conduct the business now operated by it, and neither the Company nor any subsidiary has received any notice of proceedings relating to the revocation or modification of any such certificate, authority or permit that, if determined adversely to the Company or such subsidiary, could reasonably be expected to have a Material Adverse Effect, individually or in the aggregate.

3.22Key Employees. No Key Employee, to the Company's Knowledge, is, or is now expected to be, in violation of any material term of any employment contract, confidentiality, disclosure or proprietary information agreement, non-competition agreement, or any other contract or agreement or any restrictive covenant, and the continued employment of each Key Employee does not subject the Company or any of its subsidiaries to any liability with respect to any of the foregoing matters. No Key Employee has, to the Company's Knowledge, any intention to terminate his employment with, or services to, the Company or any of its subsidiaries. "Key Employee" means each of Gary S. Kledzik, Chairman of the Board and Chief Executive Officer, and David E. Mai, President.

3.23Labor Matters.

(i)Except as set forth on Schedule 3.23, the Company is not a party to or bound by any collective bargaining agreements or other agreements with labor organizations. The Company has not violated in any material respect any laws, regulations, orders or contract terms, affecting the collective bargaining rights of employees, labor organizations or any laws, regulations or orders affecting employment discrimination, equal opportunity employment, or employees' health, safety, welfare, wages and hours.

(ii)(A) There are no labor disputes existing, or to the Company's Knowledge, threatened, involving strikes, slow-downs, work stoppages, job actions, disputes, lockouts or any other disruptions of or by the Company's employees, (B) there are no unfair labor practices or petitions for election pending or, to the Company's Knowledge, threatened before the National Labor Relations Board or any other federal, state or local labor commission relating to the Company's employees, (C) no demand for recognition or certification heretofore made by any labor organization or group of employees is pending with respect to the Company and (D) to the Company's Knowledge, the Company enjoys good labor and employee relations with its employees and labor organizations.

(iii)To the Company's Knowledge, the Company is, and at all times has been, in full compliance in all material respects with all applicable laws respecting employment (including laws relating to classification of employees and independent contractors) and employment practices, terms and conditions of employment, wages and hours, and immigration and naturalization. There are no claims pending against the Company before the Equal Employment Opportunity Commission or any other administrative body or in any court asserting any violation of Title VII of the Civil Rights Act of 1964, the Age Discrimination Act of 1967, 42 U.S.C. §§ 1981 or 1983 or any other federal, state or local law, statute or ordinance barring discrimination in employment.

(iv)The Company is not a party to, or bound by, any employment or other contract or agreement that contains any severance, termination pay or change of control liability or obligation, including, without limitation, any "excess parachute payment," as defined in Section 2806(b) of the Internal Revenue Code.

ARTICLE IV

COVENANTS

4.1Reasonable Efforts. The parties shall use their commercially reasonable efforts to timely satisfy each of the conditions described in ARTICLES VI and VII of this Agreement and to seek its Board of Directors' approval of this Agreement.

4.2Securities Laws; Disclosure; Press Release. The Company agrees to file a Form D with respect to the Securities with the SEC as required under Regulation D and to provide a copy thereof to each Purchaser within fifteen (15) days after the date of Closing. The Company shall, on or prior to the date of Closing, take such action as is necessary to sell the Securities to each Purchaser under applicable securities laws of the states of the United States, and shall provide evidence of any such action so taken to each Purchaser on or prior to the date of the Closing. The Company agrees to file a Form 8-K disclosing this Agreement and the transactions contemplated hereby with the SEC within four (4) business days following the date of Closing. The Company and each Purchaser shall consult with each other in connection with the Form 8-K disclosing this Agreement and the transactions contemplated hereby, and in issuing any other press releases with respect to the transactions contemplated hereby, and neither the Company nor any Purchaser shall issue any such press release or otherwise make any such public statement without the prior consent of the Company, with respect to any press release of any Purchaser, or without the prior consent of each Purchaser, with respect to any press release of the Company, which consent shall not unreasonably be withheld, except if such disclosure is required by law, in which case the disclosing party shall promptly provide the other party with prior notice of such public statement or communication.

4.3Reporting Status. So long as any Purchaser beneficially owns any of the Securities, the Company shall timely file all reports required to be filed with the SEC pursuant to the Exchange Act, and the Company shall not terminate its status as an issuer required to file reports under the Exchange Act even if the Exchange Act or the rules and regulations thereunder would permit such termination.

4.4Reservation of Common Stock. The Company has currently 8,739,950 shares of Common Stock duly authorized and reserved for issuance pursuant to the conversion of the Preferred Shares and the exercise of the Warrants. Such shares, as well as any additional shares of Common Stock subsequently authorized by the Company's stockholders and Board of Directors for issuance pursuant to the conversion of the Preferred Shares, and, in the case of the Warrant Shares, upon the exercise of the Warrants in accordance with the terms thereof, as applicable, shall be reserved by the Company, and the Company shall continue to reserve and keep available at all times, free of preemptive rights, a sufficient number of shares of Common Stock for the purpose of enabling the Company to issue Conversion Shares, upon approval of the Proposal, the Warrant Shares pursuant to any exercise of the Warrants.

4.5Listing of Common Stock. The Company hereby agrees to use commercially reasonable efforts to maintain the listing of the Common Stock. The Company further agrees, if, following the effective date of a registration statement covering the Conversion Shares or the Warrant Shares, the Company applies to have the Common Stock traded on any other trading market, it will include in such application all of the Conversion Shares and Warrant Shares, and will take such other action as is reasonably necessary to cause all of the Conversion Shares and Warrant Shares to be listed on such other trading market as promptly as possible. The Company will take all action reasonably necessary to continue the listing and trading of its Common Stock on a trading market and will comply in all respects with the Company's reporting, filing and other obligations under the bylaws or rules of the trading market.

4.6Proxy Statement; Stockholders Meeting.

(i)Promptly following the execution and delivery of this Agreement the Company shall take all action necessary to call a meeting of its stockholders (the "Stockholders Meeting"), which shall occur promptly following the Company’s next annual stockholders meeting scheduled for June 23, 2005, but not later than September 30, 2005 (the "Stockholders Meeting Deadline"), for the purpose of seeking approval of the Company's stockholders to certain actions including, without limitation, the amendment to the Company’s Certificate of Incorporation to increase the authorized number of shares of Common Stock to not less than 100,000,000 (the “Proposal”). In connection therewith, the Company will promptly prepare and file with the SEC proxy materials (including a proxy statement and form of proxy) for use at the Stockholders Meeting and, after receiving and promptly responding to any comments of the SEC thereon, shall promptly mail such proxy materials to the stockholders of the Company. Each Purchaser shall promptly furnish in writing to the Company such information relating to such Purchaser and its investment in the Company as the Company may reasonably request for inclusion in the Proxy Statement. The Company will comply with Section 14(a) of the Exchange Act and the rules promulgated thereunder in relation to any proxy statement (as amended or supplemented, the "Proxy Statement") and any form of proxy to be sent to the stockholders of the Company in connection with the Stockholders Meeting, and the Proxy Statement shall not, on the date that the Proxy Statement (or any amendment thereof or supplement thereto) is first mailed to stockholders or at the time of the Stockholders Meeting, contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made therein not false or misleading, or omit to state any material fact necessary to correct any statement in any earlier communication with respect to the solicitation of proxies or the Stockholders Meeting which has become false or misleading. If the Company should discover at any time prior to the Stockholders Meeting, any event relating to the Company or any of its Subsidiaries or any of their respective affiliates, officers or directors that is required to be set forth in a supplement or amendment to the Proxy Statement, in addition to the Company's obligations under the Exchange Act, the Company will promptly inform the Purchasers thereof.

(ii)Subject to their fiduciary obligations under applicable law (as determined in good faith by the Company's Board of Directors after consultation with the Company's outside counsel), the Company's Board of Directors shall recommend to the Company's stockholders (and, subject to their fiduciary obligations, not revoke or amend such recommendation) that the stockholders vote in favor of the Proposal and shall cause the Company to take all commercially reasonable action to solicit the approval of the stockholders for the Proposal. Whether or not the Company's Board of Directors determines at any time after the date hereof that, due to its fiduciary duties, it must revoke or amend its recommendation to the Company's stockholders, the Company shall be required to, and will take, in accordance with applicable law and its Certificate of Incorporation and By-laws, all action necessary to convene the Stockholders Meeting as promptly as practicable, but no later than the Stockholders Meeting Deadline, to consider and vote upon the approval of the Proposal.

4.7Right of First Refusal on Future Financings. From the date hereof until one year after the Closing Date, upon any financing by the Company of its Common Stock or Common Stock Equivalents (a "Subsequent Financing"), each Purchaser shall have the right to participate in up to 50% of such Subsequent Financing. At least five (5) business days prior to the closing of the Subsequent Financing, the Company shall deliver to each Purchaser a written notice of its intention to effect a Subsequent Financing ("Pre-Notice"), which Pre-Notice shall ask such Purchaser if it wants to review the details of such financing (such additional notice, a "Subsequent Financing Notice"). Upon the request of a Purchaser, and only upon a request by such Purchaser, for a Subsequent Financing Notice, the Company shall promptly, but no later than one business day after such request, deliver a Subsequent Financing Notice to such Purchaser. The Subsequent Financing Notice shall describe in reasonable detail the proposed terms of such Subsequent Financing, the amount of proceeds intended to be raised thereunder, the Person with whom such Subsequent Financing is proposed to be effected, and attached to which shall be a term sheet or similar document relating thereto. Each Purchaser shall notify the Company by 6:30 p.m. (New York City time) on the fifth (5th) business day after their receipt of the Subsequent Financing Notice of its willingness to provide the Subsequent Financing on the terms described in the Subsequent Financing Notice, subject to completion of mutually acceptable documentation. If one or more Purchasers shall fail to so notify the Company of their willingness to participate in the Subsequent Financing, the Purchasers agreeing to participate in the Subsequent Financing (the "Participating Purchasers") shall have the right to provide all of the Subsequent Financing. If one or more Purchasers fail to notify the Company of their willingness to provide all of the Subsequent Financing and the Participating Purchasers do not agree to provide all of the Subsequent Financing, the Company may effect the remaining portion of such Subsequent Financing on the terms and to the Persons set forth in the Subsequent Financing Notice; provided that the Company must provide the Purchasers with a second Subsequent Financing Notice, and the Purchasers will again have the right of first refusal set forth above in this Section 4.7, if the Subsequent Financing subject to the initial Subsequent Financing Notice is not consummated for any reason on the terms set forth in such Subsequent Financing Notice within 60 business days after the date of the initial Subsequent Financing Notice with the Person identified in the Subsequent Financing Notice. In the event the Company receives responses to Subsequent Financing Notices from Purchasers seeking to purchase more than the financing sought by the Company in the Subsequent Financing such Purchasers shall have the right to purchase their Pro Rata Portion (as defined below) of the Common Stock or Common Stock Equivalents to be issued in such Subsequent Financing. "Pro Rata Portion" is the ratio of (x) the amount invested by such Purchaser pursuant to this Agreement (the "Subscription Amount") and (y) the aggregate sum of all of the Subscription Amounts. Notwithstanding the foregoing, this Section 4.7 shall not apply in respect of the issuance of (a) shares of Common Stock or options to employees, consultants, officers or directors of the Company pursuant to any stock or option plan duly adopted by a majority of the non-employee members of the Board of Directors of the Company or a majority of the members of a committee of non-employee directors established for such purpose, (b) securities upon the exercise of or conversion of any convertible securities, options or warrants issued and outstanding on the date of this Agreement, provided that such securities have not been amended since the date of this Agreement and (c) securities to a strategic partner in a transaction, the primary purpose of which is not the raising of capital and (d) securities to a lender in connection with the provision of credit to the Company. "Common Stock Equivalents" means any securities of the Company or its 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 exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock.

4.8Information. The Company agrees to make available the following reports to each Purchaser until such Purchaser transfers, assigns or sells all of its Securities in transactions in which the transferee is (unless such transferee is an affiliate of the Company) not subject to securities law resale restrictions: (a) within three (3) business days after the filing with the SEC, a copy of its Annual Report on Form 10-K, its Quarterly Reports on Form 10-Q, any proxy statements and any Current Reports on Form 8-K; and (b) within one (1) business day after release, copies of all press releases issued by the Company or any of its subsidiaries. The Company further agrees to promptly provide to any Purchaser any information with respect to the Company, its properties, or its business or Purchaser's investment as such Purchaser may reasonably request; provided, however, that the Company shall not be required to give any Purchaser any material nonpublic information. If any information requested by a Purchaser from the Company contains material nonpublic information, the Company shall inform the Purchaser in writing that the information requested contains material nonpublic information and shall in no event provide such information to Purchaser without the express written consent of such Purchaser after being so informed.

4.9Conversion Limit. In no event shall any Purchaser have the right (i) to convert Preferred Shares or the Warrant Shares, or (ii) to vote the Preferred Shares, Conversion Shares, or Warrant Shares, to the extent that such right to convert Preferred Shares or the Warrant Shares, or to vote the Preferred Shares, Conversion Shares or Warrant Shares, would result in the Purchaser and its affiliates together beneficially owning more than 4.95% of the outstanding shares of Common Stock. For purposes of this subparagraph, beneficial ownership shall be determined in accordance with Section 13(d) of the Exchange Act, and Regulation 13D-G thereunder. The restriction contained in this Section 4.9 may not be altered, amended, deleted or changed in any manner whatsoever unless the holders of a majority of the outstanding shares of Common Stock and the Purchaser shall approve, in writing, such alteration, amendment, deletion or change.

4.10Corporate Existence. So long as any Purchaser beneficially owns any Securities, the Company shall maintain its corporate existence, except in the event of a merger, consolidation or sale of all or substantially all of the Company's assets, as long as the surviving or successor entity in such transaction assumes the Company's obligations hereunder and under the agreements and instruments entered into in connection herewith.

4.11Hedging Transactions. No Purchaser has an existing short position with respect to the Company’s common stock (the “Common Shares”). Each Purchaser agrees not to, directly or indirectly, enter into any short sales with respect to the Common Shares prior to the date on which such Purchaser is entitled to sell, transfer the number of shares of Preferred Stock as to which such Purchaser proposes to establish a short position. This Section 4.11 shall not prohibit Purchaser from at any time entering into options contracts with respect to the Common Shares, including puts and calls including delivering Preferred Stock in satisfaction of any exercised options.

4.12Use of Proceeds. The Company will use the proceeds of the sale of the Securities for working capital needs consistent with financial budgets approved from time to time by the Company's Board of Directors.

ARTICLE V

LEGEND REMOVAL, TRANSFER, CERTAIN SALES, ADDITIONAL SHARES

5.1Removal of Legend. The Legend shall be removed and the Company shall issue a certificate without such Legend to the holder of any Security upon which it is stamped, and a certificate for a security shall be originally issued without the Legend, if, (a) the sale of such Security is registered under the Securities Act, (b) such holder provides the Company with an opinion of counsel, in form, substance and scope customary for opinions of counsel in comparable transactions and reasonably satisfactory to the Company and its counsel (the reasonable cost of which shall be borne by the Company if, after one (1) year, neither an effective registration statement under the Securities Act or Rule 144 is available in connection with such sale) to the effect that a public sale or transfer of such Security may be made without registration under the Securities Act pursuant to an exemption from such registration requirements or (c) such Security can be sold pursuant to Rule 144 and the holder provides the Company with reasonable assurances that the Security can be so sold without restriction or (d) such Security can be sold pursuant to Rule 144(k). The Company may not make any notation on its records or give instructions to any transfer agent of the Company that enlarge the restrictions on transfer set forth in this Section. Each Purchaser agrees to sell all Securities, including those represented by a certificate(s) from which the Legend has been removed, or which were originally issued without the Legend, pursuant to an effective registration statement, in accordance with the manner of distribution described in such registration statement and to deliver a prospectus in connection with such sale, or in compliance with an exemption from the registration requirements of the Securities Act. In the event the Legend is removed from any Security or any Security is issued without the Legend and the Security is to be disposed of other than pursuant to the registration statement or pursuant to Rule 144, then prior to, and as a condition to, such disposition such Security shall be relegended as provided herein in connection with any disposition if the subsequent transfer thereof would be restricted under the Securities Act. Also, in the event the Legend is removed from any Security or any Security is issued without the Legend and thereafter the effectiveness of a registration statement covering the resale of such Security is suspended or the Company determines that a supplement or amendment thereto is required by applicable securities laws, then upon reasonable advance notice to Purchaser holding such Security, the Company may require that the Legend be placed on any such Security that cannot then be sold pursuant to an effective registration statement or Rule 144 or with respect to which the opinion referred to in clause (b) next above has not been rendered, which Legend shall be removed when such Security may be sold pursuant to an effective registration statement or Rule 144 or such holder provides the opinion with respect thereto described in clause (b) next above.

5.2Transfer Agent Instructions. The Company agrees that following the effective date of the registration statement or at such time as such legend is no longer required under Section 5.1, it will, no later than five trading days following the delivery by a Purchaser to the Company or the Company's transfer agent of a certificate representing Conversion Shares or Warrant Shares, as the case may be, issued with a restrictive legend (such date, the "Legend Removal Date"), deliver or cause to be delivered to such Purchaser a certificate representing such Securities that is free from all restrictive and other legends, registered in the name of each Purchaser or its nominee, for the Conversion Shares, and for the Warrant Shares in such amounts determined in accordance with the terms of the Warrants. The Company covenants that no instruction other than such instructions referred to in this ARTICLE V, and stop transfer instructions to give effect to Section 2.6 hereof in the case of the Conversion Shares and Warrant Shares prior to registration of the Conversion Shares and Warrant Shares under the Securities Act, will be given by the Company to its transfer agent and that the Securities shall otherwise be freely transferable on the books and records of the Company. Nothing in this Section shall affect in any way each Purchaser's obligations and agreement set forth in Section 5.1 hereof to resell the Securities pursuant to an effective registration statement and to deliver a prospectus in connection with such sale or in compliance with an exemption from the registration requirements of applicable securities laws. If (a) a Purchaser provides the Company with an opinion of counsel, which opinion of counsel shall be in form, substance and scope customary for opinions of counsel in comparable transactions and reasonably satisfactory to the Company and its counsel (the reasonable cost of which shall be borne by the Company if, after one (1) year, neither an effective registration statement under the Securities Act or Rule 144 is available in connection with such sale), to the effect that the Securities to be sold or transferred may be sold or transferred pursuant to an exemption from registration or (b) a Purchaser transfers Securities to an affiliate which is an accredited investor (within the meaning of Regulation D under the Securities Act) and which delivers to the Company in written form the same representations, warranties and covenants made by Purchaser hereunder or pursuant to Rule 144, the Company shall permit the transfer, and, in the case of the Conversion Shares and Warrant Shares, promptly instruct its transfer agent to issue one or more certificates in such name and in such denomination as specified by such Purchaser. The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to a Purchaser by vitiating the intent and purpose of the transaction contemplated hereby. Accordingly, the Company acknowledges that the remedy at law for a breach of its obligations under this ARTICLE V will be inadequate and agrees, in the event of a breach or threatened breach by the Company of the provisions of this ARTICLE V, that a Purchaser shall be entitled, in addition to all other available remedies to an injunction restraining any breach and requiring immediate issuance and transfer, without the necessity of showing economic loss and without any bond or other security being required.

ARTICLE VI

CONDITIONS TO THE COMPANY'S OBLIGATION TO SELL

6.1Conditions to the Company's Obligation to Sell. The obligation of the Company hereunder to issue and sell the Preferred Shares and Warrants to a Purchaser at the Closing is subject to the satisfaction, as of the date of the Closing and with respect to such Purchaser, of each of the following conditions thereto, provided that these conditions are for the Company's sole benefit and may be waived by the Company at any time in its sole discretion:

(i)Such Purchaser shall have executed and delivered the signature page to this Agreement and the Registration Rights Agreement;

(ii)Such Purchaser shall have wired its Purchase Price to the account designated by the Company;

(iii)The representations and warranties of such Purchaser shall be true and correct in all material respects as of the date when made and as of the Closing as though made at that time (except for representations and warranties that speak as of a specific date), and such Purchaser shall have performed, satisfied and complied in all material respects with the covenants, agreements and conditions required by this Agreement to be performed, satisfied or complied with by the applicable Purchaser at or prior to the Closing;

(iv)No statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed by any court or governmental authority of competent jurisdiction or any self-regulatory organization having authority over the matters contemplated hereby which restricts or prohibits the consummation of any of the transactions contemplated by this Agreement; and

(v)Purchaser shall have delivered an officer's certificate, in form and substance reasonably acceptable to the Company, as to the accuracy of such Purchaser's representations and warranties pursuant to ARTICLE II.

ARTICLE VII

CONDITIONS TO EACH PURCHASER'S OBLIGATION TO PURCHASE

7.1The obligation of each Purchaser hereunder to purchase the Preferred Shares and Warrants to be purchased by it on the date of the Closing is subject to the satisfaction of each of the following conditions, provided that these conditions are for each Purchaser's sole benefit and may be waived by such Purchaser at any time in such Purchaser's sole discretion:

(i)The Company shall have executed and delivered the signature page to this Agreement and the Registration Rights Agreement;

(ii)The Company shall have delivered to the Purchaser's counsel duly issued certificates for the Preferred Shares being so purchased by Purchaser and Warrants being issued to such Purchaser at the Closing;

(iii)The Company shall have filed with the Delaware Secretary of State the Preferred Stock Certificate of Designation, attached hereto as Exhibit A;

(iv)The representations and warranties of the Company shall be true and correct in all material respects as of the date when made and as of the Closing as though made at that time and the Company shall have performed, satisfied and complied in all material respects with the covenants, agreements and conditions required by this Agreement to be performed, satisfied or complied with by the Company at or prior to the Closing. Purchaser shall have received a certificate, executed by the Chief Executive Officer or Chief Financial Officer of the Company, dated as of the Closing to the foregoing effect;

(v)No statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed by any court or governmental authority of competent jurisdiction or any self-regulatory organization having authority over the matters contemplated hereby which prohibits the consummation of any of the transactions contemplated by this Agreement;

(vi)The Company shall have delivered an officer's certificate, in form and substance reasonably acceptable to the Purchaser, as to the accuracy of the Company's representations and warranties pursuant to ARTICLE III; and

(vii)Purchaser shall have received the legal opinion from the Company's counsel in the form attached hereto as Exhibit D.

ARTICLE VIII

GOVERNING LAW; MISCELLANEOUS

8.1Governing Law: Jurisdiction. This Agreement shall be governed by and construed in accordance with the Delaware General Corporation Law (in respect of matters of corporation law) and the laws of the State of California (in respect of all other matters) applicable to contracts made and to be performed in the State of California. The parties hereto irrevocably consent to the jurisdiction of the United States federal courts and state courts located in the County of New Castle in the State of Delaware in any suit or proceeding based on or arising under this Agreement or the transactions contemplated hereby and irrevocably agree that all claims in respect of such suit or proceeding may be determined in such courts. The Company and each Purchaser irrevocably waives the defense of an inconvenient forum to the maintenance of such suit or proceeding in such forum. The Company and each Purchaser further agrees that service of process upon the Company or such Purchaser, as applicable, mailed by the first class mail in accordance with Section 8.6 shall be deemed in every respect effective service of process upon the Company or such Purchaser in any suit or proceeding arising hereunder. Nothing herein shall affect Purchaser's right to serve process in any other manner permitted by law. The parties hereto agree that a final non-appealable judgment in any such suit or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on such judgment or in any other lawful manner. The parties hereto irrevocably waive any right to a trial by jury under applicable law.

8.2Counterparts. This Agreement may be executed in two or more counterparts, including, without limitation, by facsimile transmission, all of which counterparts shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party. In the event any signature page is delivered by facsimile transmission, the party using such means of delivery shall cause additional original executed signature pages to be delivered to the other parties as soon as practicable thereafter.

8.3Headings. The headings of this Agreement are for convenience of reference and shall not form part of, or affect the interpretation of, this Agreement.

8.4Severability. If any provision of this Agreement shall be invalid or unenforceable in any jurisdiction, such invalidity or unenforceability shall not affect the validity or enforceability of the remainder of this Agreement or the validity or enforceability of this Agreement in any other jurisdiction.

8.5Entire Agreement; Amendments. This Agreement and the instruments referenced herein contain the entire understanding of the parties with respect to the maters covered herein and therein and, except as specifically set forth herein or therein, neither the Company nor any Purchaser makes any representation, warranty, covenant or undertaking with respect to such matters. No provision of this Agreement may be waived other than by an instrument in writing signed by the party to be charged with enforcement and no provision of this Agreement may be amended other than by an instrument in writing signed by the Company and each Purchaser.

8.6Notice. Any notice herein required or permitted to be given shall be in writing and may be personally served or delivered by nationally-recognized overnight courier or by facsimile machine confirmed telecopy, and shall be deemed delivered at the time and date of receipt (which shall include telephone line facsimile transmission). The addresses for such communications shall be:

if to the Company:

Miravant Medical Technologies

336 Bollay Drive

Santa Barbara, CA 93117

Attention: Gary S. Kledzik

Facsimile: (805) 685-7981

with copy to:

Sheppard Mullin Richter & Hampton, LLP

800 Anacapa Street

Santa Barbara, CA 93101

Attention: Joseph E. Nida, Esq.

Facsimile: (805) 568-1955

If to the Purchasers:

Scorpion Capital Partners, L.P.

245 Fifth Avenue, 25th Floor

New York, New York 10016

Attention: Kevin R. McCarthy

Facsimile: (212) 213-9607

with a copy to:

Liner Yankelevitz Sunshine & Regenstreif LLP

1100 Glendon Ave., 14th Floor

Los Angeles, CA 90024-3503

Attention: David M. Tamman, Esq.

Facsimile: (310) 500-3501

Alba Ltd.

__________________________

__________________________

Alert Investments Limited

__________________________

__________________________

If to any other Purchaser, to such address set forth under such Purchaser's name on the signature page hereto executed by such Purchaser. Each party shall provide notice to the other parties of any change in address.

8.7Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their successors and assigns. Neither the Company nor any Purchaser shall assign this Agreement or any rights or obligations hereunder without the prior written consent of the other. Notwithstanding the foregoing, each Purchaser may assign its rights and obligations hereunder to any of its "affiliates," as that term is defined under the Securities Act, without the consent of the Company so long as such affiliate is an accredited investor (within the meaning of Regulation D under the Securities Act) and agrees in writing to be bound by this Agreement. This provision shall not limit each Purchaser's right to transfer the Securities pursuant to the terms of this Agreement or to assign such Purchaser's rights hereunder to any such transferee. In that regard, if Purchaser sells all or part of its Common Shares to someone that acquires the shares subject to restrictions on transferability (other than restrictions, if any, arising out of the transferee's status as an affiliate of the Company), Purchaser shall be permitted to assign its rights hereunder, in whole or in part, to such transferee.

8.8Third Party Beneficiaries. This Agreement is intended for the benefit of the parties hereto and their respective permitted successors and assigns and is not for the benefit of, nor may any provision hereof be enforced by, any other Person.

8.9Survival; Indemnification. The representations and warranties of the Company and the agreements and covenants shall survive the closing hereunder notwithstanding any due diligence investigation conducted by or on behalf of Purchaser. The Company agrees to indemnify and hold harmless each Purchaser and each of each Purchaser's officers, directors, employees, partners, agents and affiliates from and against any and all losses, claims, damages, liabilities and expenses (including without limitation reasonable attorneys' fees and disbursements and other expenses incurred in connection with investigating, preparing or defending any action, claim or proceeding, pending or threatened and the costs of enforcement thereof) (collectively, "Losses") arising as a result of or related to any breach or alleged breach by the Company of any of its representations or covenants set forth herein, including advancement of expenses as they are incurred. The representations and warranties of the Purchasers shall survive the Closing hereunder and each Purchaser shall indemnify and hold harmless the Company and each of its officers, directors, employees, partners, agents and affiliates from and against any and all Losses arising as a result of the breach of such Purchaser's representations and warranties.

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

8.11Expenses. The Company will reimburse the Purchasers collectively for up to FIFTY THOUSAND DOLLARS ($50,000) for actual documented legal expenses, consulting expenses, due diligence expenses and travel expenses.

8.12Remedies. No provision of this Agreement providing for any remedy to a Purchaser shall limit any remedy which would otherwise be available to such Purchaser at law or in equity. Nothing in this Agreement shall limit any rights a Purchaser may have with any applicable federal or state securities laws with respect to the investment contemplated hereby. The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to a Purchaser. Accordingly, the Company acknowledges that the remedy at law for a material breach of its obligations under this Agreement will be inadequate and agrees, in the event of a breach or threatened breach by the Company of the provisions of this Agreement, that a Purchaser shall be entitled, in addition to all other available remedies, to an injunction restraining any breach and requiring immediate compliance, without the necessity of showing economic loss and without any bond or other security being required.

8.13Final Agreement. This Agreement, when executed by the parties hereto, shall constitute the final agreement between the parties and upon such execution Purchasers and the Company accept the terms hereof and have no cause of action against each other for prior negotiations preceding the execution of this Agreement.

IN WITNESS WHEREOF, the undersigned Purchasers and the Company have caused this Agreement to be duly executed as of the date first above written.

COMPANY:

MIRAVANT MEDICAL TECHNOLOGIES:

By:

Name: John M. Philpott

Title: Chief Financial Officer

PURCHASERS:

SCORPION CAPITAL PARTNERS, LP:

By:SCORPION, LLC, its general partner

By:

Name:Nuno Brandolini

Title:Managing Partner

Aggregate Number of Preferred Shares: 4,000,000

Number of Warrants: 4,000,000

ALBA LTD.:

By:

Aggregate Number of Preferred Shares: 1,000,000

Number of Warrants: 1,000,000

ALERT INVESTMENTS LIMITED:

By:

Aggregate Number of Preferred Shares: 3,000,000

Number of Warrants: 3,000,000

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		0WEG-083556

LIST OF EXHIBITS

EXHIBIT A-CERTIFICATE OF DESIGNATION OF PREFERRED STOCK

EXHIBIT B-WARRANT

EXHIBIT C-REGISTRATION RIGHTS AGREEMENT

EXHIBIT D-LEGAL OPINION OF COMPANY'S COUNSEL

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		0WEG-083556

Exhibit A

To

Series B Preferred Stock Purchase Agreement

CERTIFICATE OF DESIGNATION OF PREFERRED STOCK

#80039820.1 (DT)	--
		0WEG-083556

Exhibit B

To

Series B Preferred Stock Purchase Agreement

STOCK PURCHASE WARRANT

#80039820.1 (DT)	--
		0WEG-083556

Exhibit C

To

Series B Preferred Stock Purchase Agreement

REGISTRATION RIGHTS AGREEMENT

#80039820.1 (DT)	--
		0WEG-083556

Exhibit D

To

Series B Preferred Stock Purchase Agreement

LEGAL OPINION OF COMPANY'S COUNSEL

#80039820.1 (DT)	--
		0WEG-083556

List of Schedules

to

Series B Preferred Stock Purchase Agreement

Schedule 1-List of Investors

Schedule 3.2-Authorization; Enforcement

Schedule 3.3-Capitalization

Schedule 3.5-Conflicts

Schedule 3.9-Litigation

Schedule 3.10-Tax Matters

Schedule 3.23 -Labor Matter

#80039820.1 (DT)	--
		0WEG-083556

SCHEDULE 1

TO SERIES B PREFERRED STOCK PURCHASE AGREEMENT

LIST OF INVESTORS

Investor	Shares of Preferred Stock	Warrant Shares
Scorpion Capital Partners, LP	4,000,000	4,000,000
Alba Ltd.	1,000,000	1,000,000
Alert Investments Limited	3,000,000	3,000,000

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		0WEG-083556

SCHEDULE 3.2

TO

SERIES B PREFERRED STOCK PURCHASE AGREEMENT

AUTHORIZATION; ENFORCEMENT

None

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		0WEG-083556

SCHEDULE 3.3

TO

SERIES B PREFERRED STOCK PURCHASE AGREEMENT

CAPITALIZATION

AS OF DECEMBER 31, 2004

Number of Shares

Authorized Stock as:

Preferred Stock30,000,000

Common Stock75,000,000

Outstanding Stock:

Preferred Stock1,112,966

Common Stock36,718,605

Stock Options:

Issued ($2.57 avg exercise price) 5,028,254

Exercisable (vested; $2.98 avg exercise price)3,541,652

Warrants:

Issued ($0.85 avg exercise price)10,005,750

Other Convertible Instruments:

Reserved for Preferred Stock conversion1,112,966

Convertible Debentures Issued10,317,026

Note: There currently are available only 8,739,950 shares of authorized common stock.

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		0WEG-083556

SCHEDULE 3.5

TO

SERIES B PREFERRED STOCK PURCHASE AGREEMENT

CONFLICTS

None

#80039820.1 (DT)	--
		0WEG-083556

SCHEDULE 3.9

TO

SERIES B PREFERRED STOCK PURCHASE AGREEMENT

LITIGATION

None

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		0WEG-083556

SCHEDULE 3.10

TO

SERIES B PREFERRED STOCK PURCHASE AGREEMENT

TAX MATTERS

·   The Company has received a preliminary report from Ernst & Young LLP, which discusses the impact of IRS Section 382, on the Company’s current Net Operating Losses (NOLs). The preliminary report states that there has been no limitations on the Company’s NOLs from equity or equity equivalent transactions through June 30, 2004. The report does not take into account this transaction and its impact on the potential NOL limitation.

·   The Company is currently in the process of analyzing the impact of withholding taxes which should have been paid on behalf of certain non-US entities in regard to the interest payments made to those entities. The Company does not currently have an estimate on the amount to be withheld.

·  

#80039820.1 (DT)	--
		0WEG-083556

SCHEDULE 3.23

TO

SERIES B PREFERRED STOCK PURCHASE AGREEMENT

LABOR MATTERS

The Company currently has employment agreements with Dr. Gary S. Kledzik, Chief Executive Officer, David E. Mai, President, John M. Philpott Chief Financial Officer and Glenn A. Wilson, Senior Vice-President Pharmaceutical Development. Each agreement contains severance payments upon termination by the Company as described in the Company’s Proxy Statement.

EX-99.1

Press Release Exhibit 99.1

Miravant Completes $8 Million Funding

SANTA BARBARA, Calif.--(BUSINESS WIRE)--May 4, 2005--Miravant Medical Technologies (OTCBB:MRVT), a pharmaceutical development company specializing in PhotoPoint(R) photodynamic therapy (PDT), announced today the closing of an $8 million private placement of convertible Preferred Stock led by Scorpion Capital Partners LP, a New York-based SBIC, with net proceeds to the Company of $7.50 million. The Preferred Stock is convertible into Common Stock at the conversion price of $1.00 per share. The Company has also issued a warrant to purchase one share of Common Stock for each convertible share of Common Stock purchased. The exercise price of each warrant is $1.00 per share.

Separately, the Company also announced an amendment to its March 2005 $15.0 million convertible debt line-of-credit agreement, to establish the minimum conversion rate at $1.00 per share of convertible Common Stock or 125% of the average monthly closing price of the month preceding the conversion, whichever is greater.

Gary S. Kledzik, Ph.D., chairman and chief executive officer, said, "We are very pleased to announce the completion of this funding with Scorpion. The proceeds will primarily support the PHOTREX(TM) confirmatory phase III clinical trial for macular degeneration, slated to begin in Europe this summer."

About Miravant

Miravant Medical Technologies specializes in PhotoPoint(R) photodynamic therapy (PDT), developing photoreactive (light-activated) drugs to selectively target diseased cells and blood vessels. Miravant's primary areas of focus are ophthalmology and cardiovascular disease with new drugs in clinical and preclinical development. PHOTREX(TM) (rostaporfin), the Company's most advanced program, has received an FDA Approvable Letter as a treatment for wet age-related macular degeneration and a Special Protocol Assessment for a Phase III confirmatory clinical trial. Miravant's cardiovascular development program, supported by an investment from Guidant Corporation, focuses on life-threatening coronary artery diseases, with PhotoPoint MV0633 in advanced preclinical testing for atherosclerosis, vulnerable plaque and restenosis.

For more information, please visit our web site at: www.miravant.com

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995

The statements contained in this press release that are not purely historical are forward-looking statements within the meaning of Section 21E of the Securities and Exchange Act of 1934, as amended, including but not limited to those by Dr. Kledzik and other statements about the use of funds to support the confirmatory phase III clinical trial planned to begin in Europe in mid-2005, and the Company's development programs for large potential markets in ophthalmology, dermatology, cardiovascular disease and oncology are forward looking and relate to our future plans, objectives, expectations and intentions. Our actual results may differ materially from those described in these statements. For instance, the occurrence of one or more of the following may cause our results to differ from our plans: the Company's operating capital may not be sufficient to continue some or all of its development programs, fund the PHOTREX phase III clinical trial or continue as a going concern; potential future funding may not be available when needed if at all or under terms acceptable to the Company; the Company may not meet the covenants of the December 2002 Debt Agreement, the August 2003 Convertible Debt and Warrant Purchase Agreement, or the March 2005 Convertible Note and Warrant Purchase Agreement, which would give the holders under these agreements the right to call outstanding debt immediately due and payable; the Company may not achieve certain milestones required to receive future investments under its Collaboration Agreement with Guidant Corporation; investors may determine not to advance funds to the Company under the lines of credit, either because certain specified conditions have not been satisfied, because the Company's operations are, in their judgment, not meeting its business objectives, or for any other reason, in the investors' sole discretion; the Company may be unable to resolve all issues and conditions associated with the PHOTREX New Drug Application; the FDA may require further clinical studies before granting marketing approval, or may limit labeling claims, or may not grant marketing approval at all; even if approved, the Company may not have the necessary resources or corporate partnering relationship(s) to commercialize PHOTREX and the degree of acceptance cannot be guaranteed; the Company may decide not to or may be unable to further develop its PhotoPoint drugs in ophthalmology, dermatology, cardiovascular disease and/or oncology; the Company may not be able to demonstrate the safety or efficacy of its drugs in development or achieve their regulatory approvals; and/or partnering discussions may not progress or may not provide the funding and support the Company needs. For a discussion of additional important risk factors that may cause our results to differ from those described above, please refer to our annual report on Form 10-K for the year ended December 31, 2004, and our other quarterly and periodic reports filed with the Securities and Exchange Commission. Our products require regulatory approval before marketing, sales or clinical use. PhotoPoint(R) is a registered trademark of Miravant Medical Technologies. PHOTREX(TM) is a trademark of Miravant Medical Technologies.