Exhibit 10.1

EXECUTION VERSION

AMENDED AND RESTATED

SECURITIES PURCHASE AGREEMENT

This AMENDED AND RESTATED SECURITIES PURCHASE AGREEMENT (the “Agreement”), dated
as of May 16, 2011, by and among Marshall Edwards, Inc., a Delaware corporation,
with headquarters located at 11975 El Camino Real, Suite 101, San Diego,
California, 92130 (the ”Company”) and the investors listed on the Schedule of
Buyers attached hereto (individually, a “Buyer” and collectively, the “Buyers”)
amends and restates in its entirety that certain Securities Purchase Agreement
(the “Original Securities Purchase Agreement”) dated as of May 2, 2011, by and
among the Company and the Buyers.

WHEREAS:

A. The Company and each Buyer is executing and delivering this Agreement in
reliance upon the exemption from securities registration afforded by
Section 4(2) of the Securities Act of 1933, as amended (the “1933 Act”), and
Rule 506 of Regulation D (“Regulation D”) as promulgated by the United States
Securities and Exchange Commission (the “SEC”) under the 1933 Act.

B. Each Buyer wishes to purchase, and the Company wishes to sell, upon the terms
and conditions stated in this Agreement, (i) that aggregate number of shares of
the Common Stock, par value $0.00000002 per share, of the Company (the “Common
Stock”), set forth opposite such Buyer’s name in column (3) on the Schedule of
Buyers attached hereto (which aggregate number for all Buyers shall be 835,217
shares of Common Stock and shall collectively be referred to herein as the
“Common Shares”), (ii) warrants, in substantially the form attached hereto as
Exhibit A (the “Series A Warrants”), representing the right to acquire up to
that number of Shares of Common Stock set forth opposite such Buyer’s name in
column (4) on the Schedule of Buyers attached hereto (as exercised,
collectively, the “Series A Warrant Shares”) and (iii) warrants in substantially
the form attached hereto as Exhibit B (the “Series B Warrants” and together with
the Series A Warrants, the “Warrants”) representing the right to acquire up to
that number of Shares of Common Stock set forth opposite such Buyer’s name in
column (5) on the Schedule of Buyers attached hereto (as exercised,
collectively, the ”Series B Warrant Shares” and together with the Series A
Warrant Shares, the “Warrant Shares).

C. Contemporaneously with the execution and delivery of this Agreement, the
parties hereto are executing and delivering an Amended and Restated Registration
Rights Agreement, substantially in the form attached hereto as Exhibit D (the
“Registration Rights Agreement”), pursuant to which the Company has agreed to
provide certain registration rights with respect to the Registrable Securities
(as defined in the Registration Rights Agreement) under the 1933 Act and the
rules and regulations promulgated thereunder, and applicable state securities
laws.

D. The Common Shares, the Adjustment Shares, the Warrants and the Warrant Shares
collectively are referred to herein as the “Securities”.

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E. Capitalized terms not otherwise defined herein shall have the meanings
ascribed to them in Section 10 of this Agreement.

NOW, THEREFORE, the Company and each Buyer hereby agree as follows:

1. PURCHASE AND SALE OF COMMON SHARES AND WARRANTS; ADJUSTMENT SHARES
OBLIGATION.

(a) Purchase and sale of Common Shares and Warrants.

(i) Purchase of Common Shares and Warrants. Subject to the satisfaction (or
waiver) of the conditions set forth in Sections 6 and 7 below, the Company shall
issue and sell to each Buyer, and each Buyer severally, but not jointly, agrees
to purchase from the Company on the Closing Date (as defined below), (w) the
number of Common Shares as is set forth opposite such Buyer’s name in column
(3) on the Schedule of Buyers along with (x) Series A Warrants to acquire up to
that number of Series A Warrant Shares as is set forth opposite such Buyer’s
name in column (4) on the Schedule of Buyers and (y) Series B Warrants to
acquire up to that number of Series B Warrant Shares as is set forth opposite
such Buyer’s name in column (5) on the Schedule of Buyers (the “Closing”).

(ii) Closing. The date and time of the Closing (the “Closing Date”) shall be
10:00 a.m., New York City time, on the date the conditions to the Closing set
forth in Sections 6 and 7 below have been satisfied (or such other date and time
as is mutually agreed to by the Company and each Buyer), at the offices of
Schulte Roth & Zabel LLP, 919 Third Avenue, New York, New York 10022.

(iii) Purchase Price. The aggregate purchase price for the Common Shares and the
Warrants to be purchased by each such Buyer at the Closing (the “Purchase
Price”) shall be the amount set forth opposite each Buyer’s name in column
(6) of the Schedule of Buyers.

(iv) Form of Payment. On the Closing Date, (i) each Buyer shall pay its
respective Purchase Price to the Company for the Common Shares and Warrants to
be issued and sold to such Buyer at the Closing (less, in the case of Hudson Bay
Master Fund Ltd. (“Hudson Bay”), the amounts withheld pursuant to Section 4(g)),
by wire transfer of immediately available funds in accordance with the Company’s
written wire instructions, and (ii) the Company shall deliver to each Buyer
(A) one or more stock certificates, evidencing the Common Shares such Buyer is
purchasing as is set forth opposite such Buyer’s name in column (3) of the
Schedule of Buyers, (B) a Series A Warrant pursuant to which such Buyer shall
have the right to acquire up to such number of Warrant Shares as is set forth
opposite such Buyer’s name in column (4) of the Schedule of Buyers, and (C) a
Series B Warrant pursuant to which such Buyer shall have the right to acquire up
to such number of Warrant Shares as is set forth opposite such Buyer’s name in
column (5) of the Schedule of Buyers, in all cases duly executed on behalf of
the Company and registered in the name of such Buyer or its designee.

 

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(b) Adjustment Shares.

(i) Obligation to Issue Adjustment Shares. The Company shall, without any
additional consideration, issue to each Buyer a number of shares of Common Stock
on the First Adjustment Date equal to the number (if positive) obtained by
subtracting (I) the sum of the number of Common Shares purchased by such Buyer
on the Closing Date and the number of Series B Warrants exercised by such Buyer
(each as adjusted for stock splits, stock dividends, recapitalizations,
reorganizations, reclassification, combinations, reverse stock splits or other
similar events) (the “Initial Shares”) from (II) the quotient determined by
dividing (x) the sum of the Purchase Price paid by such Buyer and the aggregate
exercise price paid upon exercise of the Series B Warrants exercised by such
Buyer by (y) the First Adjustment Price (such number, the “First Adjustment
Share Amount”). If (A) the First Adjustment Date was triggered by clause (1) of
such definition and the Registration Statement is not available for the resale
of all Registrable Securities thereunder at all times from the First Adjustment
Date until the sixtieth (60th) day following the First Adjustment Date or
(B) the First Adjustment Date was triggered by either clause (2) or clause
(3) of such definition and there shall occur a Public Information Failure (as
hereinafter defined) at any time on or prior to the sixtieth (60th) day
following the First Adjustment Date, the Company shall, without any additional
consideration, issue to each Buyer a number of shares of Common Stock on the
Second Adjustment Date equal to the number (if positive) obtained by subtracting
the sum of (i) the First Adjustment Share Amount and (ii) the number of Initial
Shares, from the quotient determined by dividing (A) the sum of the Purchase
Price paid by such Buyer and the aggregate exercise price paid upon exercise of
the Series B Warrants exercised by such Buyer by (B) the Second Adjustment Price
(such number, the “Second Adjustment Share Amount”). If (A) the Second
Adjustment Date was triggered by clause (1) of such definition and the
Registration Statement is not available for the resale of all Registrable
Securities and Adjustment Shares thereunder at all times from the Second
Adjustment Date until the sixtieth (60th) day following the Second Adjustment
Date or (B) the Second Adjustment Date was triggered by clause (2) of such
definition and there shall occur a Public Information Failure at any time on or
prior to the sixtieth (60th) day following the Second Adjustment Date, the
Company shall, without any additional consideration, issue to each Buyer a
number of shares of Common Stock on the Third Adjustment Date equal to the
number (if positive) obtained by subtracting the sum of (i) the Second
Adjustment Share Amount, (ii) the First Adjustment Share Amount and (iii) the
number of Initial Shares, from the quotient determined by dividing (A) the sum
of the Purchase Price paid by such Buyer and the aggregate exercise price paid
upon exercise of the Series B Warrants exercised by such Buyer by (B) the Third
Adjustment Price (such number, the “Third Adjustment Share Amount”). The Company
shall, without any additional consideration, issue to each Buyer a number of
shares of Common Stock upon the occurrence of any Allowed Subsequent Placement
(as defined in Section 4(n) hereof) (the “Allowed Subsequent Placement
Adjustment Date” and, together with the First Adjustment Date, the Second
Adjustment Date and the Third Adjustment Date, each an “Adjustment Date”) equal
to the number (if positive) obtained by subtracting (I) the number of Common
Shares issued to a Buyer on the Closing Date from (II) the quotient obtained by
dividing (i) the aggregate Purchase Price paid by such Buyer by (ii) the lowest
deemed consideration per share of Common Stock (as determined in accordance with
the provisions of Section 2(a) of the Series A Warrants) issued in such Allowed
Subsequent Placement (such number, the “Allowed Subsequent Placement Adjustment
Share Amount” and, together with the First Adjustment Share Amount, the Second
Adjustment Share Amount and the Third Adjustment Share Amount, the “Adjustment
Shares”).

 

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As used herein, (u) the “First Adjustment Date” means the date that is the
twenty sixth (26th) Trading Day after the earliest of (1) the date that all
Registrable Securities (as defined in the Registration Rights Agreement) and the
Adjustment Shares have become registered pursuant to an effective Registration
Statement that is available for the resale of all such Registrable Securities
and Adjustment Shares, (2) the date that such Buyer can sell all of the
Adjustment Shares pursuant to Rule 144 and (3) the six month anniversary of the
Closing Date (the earliest of (1), (2) and (3), the “First Trigger Date”);
(v) the “First Adjustment Price” means eighty five percent (85%) of the eight
(8) lowest Weighted Average Prices of the Common Stock during the twenty
(20) Trading Days immediately following the fifth (5th) Trading Day after the
First Trigger Date (as adjusted for stock splits, stock dividends,
recapitalizations, reorganizations, reclassification, combinations, reverse
stock splits or other similar events during such period); (w) the “Second
Adjustment Date” means the earlier of (1) the date that all Registrable
Securities and the Adjustment Shares are registered pursuant to an effective
Registration Statement that is available for the resale of all such Registrable
Securities and Adjustment Shares (2) the date that such Buyer can sell all of
the Adjustment Shares pursuant to Rule 144 and (3) the one (1) year anniversary
of the Closing Date (the earliest of (1), (2) and (3), the “Second Trigger
Date”); (x) “Second Adjustment Price” means eighty five percent (85%) of the
eight (8) lowest Weighted Average Prices of the Common Stock during the twenty
(20) Trading Days immediately following the fifth (5th) Trading Day after the
Second Trigger Date (as adjusted for stock splits, stock dividends,
recapitalizations, reorganizations, reclassification, combinations, reverse
stock splits or other similar events during such period), (y) the “Third
Adjustment Date” means the one (1) year anniversary of the Closing Date; and
(z) “Third Adjustment Price” means eighty five percent (85%) of the eight
(8) lowest Weighted Average Prices of the Common Stock during the twenty
(20) Trading Days immediately following the fifth (5th) Trading Day after the
one (1) year anniversary of the Closing Date (as adjusted for stock splits,
stock dividends, recapitalizations, reorganizations, reclassification,
combinations, reverse stock splits or other similar events during such period).

(ii) Cash Settlement. If (a) on any Adjustment Date the aggregate number of
Adjustment Shares issuable, together with the aggregate number of Adjustment
Shares previously issued and the number of Initial Shares issued, to a Buyer
pursuant to Section 1(b) of this Agreement, exceeds the quotient determined by
dividing (I) the sum of the Purchase Price paid by such Buyer and the aggregate
exercise price paid upon exercise of the Series B Warrants exercised by such
Buyer prior to the applicable Adjustment Date by (II) $0.75 (the “Adjustment
Shares Cap”), the Company shall promptly notify such Buyer in writing of such
event and no later than three (3) Trading Days following such event, the Company
shall pay such Buyer in cash by wire transfer of immediately available funds a
dollar amount determined by multiplying such excess number of shares of Common
Stock by the Weighted Average Price of the Common Stock on the date of such
event or (b) the Stockholder Approval (as hereinafter defined) is not obtained
on or prior to the First Adjustment Date, in lieu of delivering the Adjustment
Shares otherwise required to be delivered pursuant to this Section 1(b), the
Company shall pay the Buyers in cash by wire transfer of immediately available
funds in a dollar amount determined by multiplying the number of Adjustment
Shares otherwise deliverable to such Buyer pursuant to this Section 1(b) by the
Weighted Average Price of the Common Stock on the date of such event. In the
event the Company fails to make any cash payments required under this Agreement
by a specified deadline, such payments shall bear interest at the rate of one
and one-

 

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half percent (1.5%) per month (prorated for partial months) (or such lesser
maximum amount that is permitted to be paid by applicable law) until paid in
full.

(iii) Blocker. Notwithstanding anything to the contrary contained herein, the
Company shall not issue Adjustment Shares, and no Buyer shall have the right to
receive Adjustment Shares, and any such issuance shall be null and void and
treated as if never made, to the extent that after giving effect to such
issuance, such Buyer (together with such Buyer’s affiliates) would beneficially
own in excess of 9.99% (the “Maximum Percentage”) of the number of shares of
Common Stock outstanding immediately after giving effect to such issuance. For
purposes of the foregoing sentence, the aggregate number of shares of Common
Stock beneficially owned by such Buyer and its affiliates shall include the
number of shares of Common Stock issuable pursuant to Section 1(b) hereof with
respect to which the determination of such sentence is being made, but shall
exclude shares of Common Stock which would be issuable upon (i) exercise, as
applicable, of the remaining, unexercised portion of the Warrants beneficially
owned by such Buyer and its affiliates and (ii) exercise or conversion of the
unexercised or unconverted portion of any other securities of the Company
beneficially owned by such Buyer and its affiliates subject to a limitation on
conversion or exercise analogous to the limitation contained herein. Except as
set forth in the preceding sentence, for purposes of this paragraph, beneficial
ownership shall be calculated in accordance with Section 13(d) of the Securities
Exchange Act of 1934, as amended (the “1934 Act”). For purposes of determining
the number of outstanding shares of Common Stock, the Buyers may rely on the
number of outstanding shares of Common Stock as reflected in (1) the Company’s
most recent Form 10-K, Form 10-Q, Current Report on Form 8-K or other public
filing with the Securities and Exchange Commission, as the case may be, (2) a
more recent public announcement by the Company or (3) any other notice by the
Company or the Company’s transfer agent setting forth the number of shares of
Common Stock outstanding. For any reason at any time, upon the written or oral
request of a Buyer, the Company shall within one business day confirm orally and
in writing to such Buyer the number of shares of Common Stock then outstanding.
In any case, the number of outstanding shares of Common Stock shall be
determined after giving effect to the issuance of the Adjustment Shares and the
conversion or exercise of securities of the Company, including the Warrants,
held by each Buyer and its affiliates since the date as of which such number of
outstanding shares of Common Stock was reported. By written notice to the
Company, each Buyer may from time to time increase or decrease the Maximum
Percentage to any other percentage not in excess of 9.99% specified in such
notice; provided that any such increase will not be effective until the
sixty-first (61st) day after such notice is delivered to the Company. The
provisions of this paragraph shall be construed and implemented in a manner
otherwise than in strict conformity with the terms of this paragraph to correct
this paragraph (or any portion hereof) which may be defective or inconsistent
with the intended beneficial ownership limitation herein contained or to make
changes or supplements necessary or desirable to properly give effect to such
limitation. If a Buyer’s right to receive Adjustment Shares is limited, in whole
or in part, by this Section, all such Adjustment Shares that are so limited
shall be held in abeyance for the benefit of such Buyer by the Company until
such time, if ever, as its right thereto would not result in such Buyer
exceeding the Maximum Percentage.

 

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(iv) Mechanics of Issuance.

(1) Delivery of Certificates Upon Adjustment. Certificates for the Adjustment
Shares shall be transmitted by the Company’s transfer agent to a Buyer by
crediting the account of such Buyer’s prime broker with The Depository Trust
Company through its Deposit/Withdrawal at Custodian system if the Company is
then a participant in such system and there is an effective registration
statement permitting the issuance of the Adjustment Shares to or resale of the
Adjustment Shares by Buyer and otherwise by physical delivery to the address
specified by such Buyer in a written notice delivered prior to the delivery date
prescribed in Section 1(b)(iii) or the delivery of such Adjustment Shares (such
date, the “Adjustment Shares Delivery Date”). Notwithstanding anything to the
contrary contained herein, in no event will any Adjustment Shares be issued with
any restrictive legends or any restrictions or limitations on resale by the
Buyers. If the Company and/or its transfer agent requires any legal opinions
with respect to the issuance of any Adjustment Shares without restrictive
legends or the removal of any such restrictive legends, the Company agrees to
cause its legal counsel to issue any such legal opinions.

(2) Company’s Failure to Timely Deliver Securities. If the Company shall fail
for any reason or for no reason to issue to a Buyer on or before the Adjustment
Shares Delivery Date, a certificate for the number of shares of Common Stock to
which such Buyer is entitled and register such shares of Common Stock on the
Company’s share register or to credit such Buyer’s balance account with DTC for
such number of shares of Common Stock to which such Buyer is entitled under
Section 1(b), then, in addition to all other remedies available to such Buyer,
the Company shall pay in cash to such Buyer on each day after such Adjustment
Shares Delivery Date that the issuance of such shares of Common Stock is not
timely effected an amount equal to 1.5% of the product of (A) the sum of the
number of shares of Common Stock not issued to such Buyer on a timely basis and
to which such Buyer is entitled and (B) the Closing Sale Price of the Common
Stock on the Trading Day immediately preceding the last possible date which the
Company could have issued such shares of Common Stock to the Buyer without
violating Section 1(b). In addition to the foregoing, if on or prior to the
Adjustment Shares Delivery Date the Company shall fail to issue and deliver a
certificate to the Buyer and register such shares of Common Stock on the
Company’s share register or credit the Buyer’s balance account with DTC for the
number of shares of Common Stock to which the Buyer is entitled pursuant to the
Company’s obligation pursuant to Section 1(b)(i) or clause (ii) below, and if on
or after such Trading Day the Buyer purchases (in an open market transaction or
otherwise) shares of Common Stock to deliver in satisfaction of a sale by the
Buyer of shares of Common Stock the Buyer anticipated receiving from the Company
(a “Buy-In”) under Section 1(b), then the Company shall, within three
(3) Trading Days after the Buyer’s request and in the Buyer’s discretion, either
(i) pay cash to the Buyer in an amount equal to the Buyer’s total purchase price
(including brokerage commissions and other reasonable out-of-pocket expenses, if
any) for the shares of Common Stock so purchased (the “Buy-In Price”), at which
point the Company’s obligation to deliver such certificate (and to issue such
shares of Common Stock) or credit such Buyer’s balance account with DTC shall
terminate, or (ii) promptly honor its obligation to deliver to the Buyer a
certificate or certificates representing such shares of Common Stock or credit
such Buyer’s balance account with DTC and pay cash to the Buyer in an amount
equal to the excess (if any) of the Buy-In

 

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Price over the product of (A) such number of shares of Common Stock, times
(B) the Closing Bid Price on the applicable Adjustment Shares Delivery Date.

(3) Charges, Taxes and Expenses. Issuance of certificates for Adjustment Shares
shall be made without charge to the Buyers for any issue or transfer tax or
other incidental expense in respect of the issuance of such certificate, all of
which taxes and expenses shall be paid by the Company, and such certificates
shall be issued in the name of the respective Buyer or in such name or names as
may be directed by the respective Buyer.

(4) Closing of Books. The Company will not close its shareholder books or
records in any manner which prevents the timely exercise of this Buyer’s rights
with respect to the Adjustment Shares.

(v) Certain Adjustments.

(1) Subdivision; Combination of Shares. If the Company at any time on or after
the date of this Agreement subdivides (by any stock split, stock dividend,
recapitalization or otherwise) one or more classes of its outstanding shares of
Common Stock into a greater number of shares, the number of Adjustment Shares
will be proportionately increased. If the Company at any time on or after the
date of this Agreement combines (by combination, reverse stock split or
otherwise) one or more classes of its outstanding shares of Common Stock into a
smaller number of shares, the number of Adjustment Shares will be
proportionately decreased. Any adjustment under this Section 1(b)(v) shall
become effective at the close of business on the date the subdivision or
combination becomes effective.

(2) Purchase Rights. While any Adjustment Shares are issuable hereunder, the
Company shall not grant, issue or sell any Purchase Rights (as defined in the
Warrants).

(3) Other Events. If any event occurs of the type contemplated by the provisions
of this Section 1(b)(v) but not expressly provided for by such provisions
(including, without limitation, the granting of stock appreciation rights,
phantom stock rights or other rights with equity features), then the Company’s
Board of Directors will make an appropriate adjustment in the number of
Adjustment Shares so as to protect the rights of the Buyers; provided that no
such adjustment pursuant to this Section 1(b)(v) will decrease the number of
Adjustment Shares as otherwise determined pursuant to this Section 1(b)(v).

(4) Pro Rata Distributions. If the Company shall declare or make any dividend or
other distribution of its assets (or rights to acquire its assets) to holders of
Common Stock, by way of return of capital or otherwise (including, without
limitation, any distribution of cash, stock or other securities, property or
options by way of a dividend, spin off, reclassification, corporate
rearrangement, scheme of arrangement or other similar transaction) (a
“Distribution”), at any time after the Closing Date and prior to the later of
the date of delivery of all Adjustment Shares which the Company is

 

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obligated to deliver under this Agreement and the date that the right to receive
Adjustment Shares shall expire then, in each such case, each Buyer shall be
entitled to receive, with respect to each unissued Adjustment Share, such
dividend or other distribution of assets (or rights to acquire its assets) that
the Buyer would have received with respect to each such Adjustment Share had it
been issued on the date of such dividend or other distribution.

(5) Fundamental Transaction. If, at any time after the Closing Date and prior to
an Adjustment Date, a Fundamental Transaction occurs, then for each Adjustment
Share issuable under Section 1(b) not issued prior to the date of such
Fundamental Transaction, the respective Buyer shall be entitled to receive the
number of shares of capital stock of the successor or acquiring corporation or
of the Company, if it is the surviving corporation, and any additional
consideration (the “Alternate Consideration”) receivable as a result of such
Fundamental Transaction by holder of a share of Common Stock immediately prior
to such Fundamental Transaction. If holders of Common Stock are given any choice
as to the securities, cash or property to be received in a Fundamental
Transaction, then the Buyer shall be given the same choice as to the Alternate
Consideration it receives upon the issuance of an Adjustment Share following
such Fundamental Transaction. The Company shall cause any successor entity in a
Fundamental Transaction in which the Company is not the survivor (the “Successor
Entity”) to assume in writing all of the obligations of the Company under this
Section 1(b) in accordance with the provisions of this Section 1(b)(v)(5)
pursuant to written agreements in form and substance reasonably satisfactory to
the Required Holders (as defined in the Registration Rights Agreement). If a
Fundamental Transaction is publicly announced or occurs prior to occurrence of
an Adjustment Event or the issuance of the Adjustment Shares, each Buyer will
have the option to receive cash, payable on the closing date of such Fundamental
Transaction (or if the notice contemplated below is not delivered within 15 days
prior to the closing date of such Fundamental Transaction, promptly following
the election of the option to receive cash), in lieu of the right to receive
Adjustment Shares under Section 1(b), at price per share equal to the Weighted
Average Price of the Common Stock on the date of such election by the Buyer. The
Company shall provide each Buyer with written notice, including a summary of
material terms, of any Fundamental Transaction described in the preceding
sentence no less than 15 days prior to the consummation such Fundamental
Transaction, provided that if the Company does not have knowledge of such
Fundamental Transaction or material terms thereof at least 15 days prior to the
consummation, the Company shall provide written notice, including a summary of
material terms, within two (2) Trading Days of having such knowledge. Each Buyer
shall have a period of 15 days from the receipt of the notice described in the
preceding sentence which to elect whether to receive Adjustment Shares (and cash
to the extent applicable pursuant to Section 1(b)(ii)) or cash.

(6) Calculations. All calculations under this Section 1(b) shall be made to the
nearest cent or the nearest 1/100th of a share, as the case may be. For purposes
of this Section 1(b), the number of shares of Common Stock deemed to be issued
and outstanding as of a given date shall be the sum of the number of shares of
Common Stock (excluding treasury shares, if any) issued and outstanding.

 

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(7) Notice to Buyers.

(A) Adjustment to Number of Adjustment Shares. Whenever there is an adjustment
pursuant to any provision of Section 1.b(v), the Company shall promptly mail to
each Buyer a notice setting forth the adjustment to the number of Adjustment
Shares and setting forth a brief statement of the facts requiring such
adjustment.

(B) Notice of Certain Events. If (A) the Company shall declare a dividend (or
any other distribution in whatever form) on the Common Stock, (B) the Company
shall declare a special nonrecurring cash dividend on or a redemption of the
Common Stock, (C) the Company shall authorize the granting to all holders of the
Common Stock rights or warrants to subscribe for or purchase any shares of
capital stock of any class or of any rights, (D) the approval of any
shareholders of the Company shall be required in connection with any
reclassification of the Common Stock, any consolidation or merger to which the
Company is a party, any sale or transfer of all or substantially all of the
assets of the Company, or any compulsory share exchange whereby the Common Stock
are converted into other securities, cash or property, or (E) the Company shall
authorize the voluntary or involuntary dissolution, liquidation or winding up of
the affairs of the Company, in each case prior to the later of an Adjustment
Date or the issuance of the applicable number of Adjustment Shares issuable in
respect of such Adjustment Date, then, in each case, the Company shall cause to
be mailed to each Buyer at its last address, at least 20 calendar days prior to
the applicable record or effective date hereinafter specified, a notice stating
(x) the date on which a record is to be taken for the purpose of such dividend,
distribution, redemption, rights or warrants, or if a record is not to be taken,
the date as of which the holders of the Common Stock of record to be entitled to
such dividend, distributions, redemption, rights or warrants are to be
determined or (y) the date on which such reclassification, consolidation,
merger, sale, transfer or share exchange is expected to become effective or
close, and the date as of which it is expected that holders of the Common Stock
of record shall be entitled to exchange their shares of the Common Stock for
securities, cash or other property deliverable upon such reclassification,
consolidation, merger, sale, transfer or share exchange; provided that the
failure to mail such notice or any defect therein or in the mailing thereof
shall not affect the validity of the corporate action required to be specified
in such notice. To the extent that any notice provided hereunder constitutes, or
contains, material, non-public information regarding the Company or any of its
subsidiaries, the Company shall simultaneously file such notice with the
Commission pursuant to a Current Report on Form 8-K.

(vi) Dispute Resolution. In the case of a dispute as to the determination of the
number of Adjustment Shares deliverable hereunder and/or the amount of cash
payable hereunder, the Company shall submit the disputed determinations or
arithmetic calculations via facsimile within two (2) Business Days of event
giving rise to such dispute, as the case may be, to the Buyers. If a Buyer and
the Company are unable to agree upon such determination or calculation of the
number of shares of Common Stock issuable within three (3) Business Days of such
disputed determination or arithmetic calculation being submitted to the Buyers,
then the Company shall, within two (2) Business Days submit via facsimile
(a) the disputed determination of the number of Adjustment Shares and/or the
amount of cash to an independent, reputable investment bank selected by the
Company and approved by the Required Holders or (b) the disputed arithmetic
calculation of the number of Adjustment Shares and/or

 

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the amount of cash to the Company’s independent, outside accountant. The Company
shall cause at its expense the investment bank or accountant, as the case may
be, to perform the determinations or calculations and notify the Company and the
applicable Buyer(s) of the results no later than ten (10) Business Days from the
time it receives the disputed determinations or calculations. Such accountant’s
determination or calculation shall be binding upon all parties absent
demonstrable error.

2. BUYER’S REPRESENTATIONS AND WARRANTIES. Each Buyer, severally and not
jointly, represents and warrants with respect to only itself that:

(a) Organization and Authority. Such Buyer is duly organized and validly
existing in good standing under the laws of the jurisdiction in which it is
formed, and has the requisite power and authorization to enter into and to
consummate the transactions contemplated by the Transaction Documents (as
defined below) to which it is a party and otherwise to carry out its obligations
hereunder.

(b) No Public Sale or Distribution. Such Buyer is (i) acquiring the Common
Shares and the Warrants and (ii) upon exercise of the Warrants will acquire the
Warrant Shares issuable upon exercise of the Warrants (other than pursuant to a
Cashless Exercise (as defined in the Warrants)), for its own account and not
with a view towards, or for resale in connection with, the public sale or
distribution thereof, except pursuant to sales registered or exempted under the
1933 Act; provided, however, that by making the representations herein, such
Buyer does not agree to hold any of the Securities for any minimum or other
specific term and reserves the right to dispose of the Securities at any time in
accordance with or pursuant to a registration statement or an exemption under
the 1933 Act. Such Buyer is acquiring the Securities hereunder in the ordinary
course of its business. Such Buyer does not presently have any agreement or
understanding, directly or indirectly, with any Person (as defined in
Section 3(s)) to distribute any of the Securities.

(c) Accredited Investor Status. Such Buyer is, and on the date of any cash
exercise of the Warrants will be, an “accredited investor” as that term is
defined in Rule 501(a) of Regulation D.

(d) Reliance on Exemptions. Such Buyer understands that the Securities are being
offered and sold to it in reliance on specific exemptions from the registration
requirements of United States federal and state securities laws and that the
Company is relying in part upon the truth and accuracy of, and such Buyer’s
compliance with, the representations, warranties, agreements, acknowledgments
and understandings of such Buyer set forth herein in order to determine the
availability of such exemptions and the eligibility of such Buyer to acquire the
Securities.

(e) Information. Such Buyer and its advisors, if any, have been furnished with
all materials relating to the business, finances and operations of the Company
and materials relating to the offer and sale of the Securities that have been
requested by such Buyer. Such Buyer and its advisors, if any, have been afforded
the opportunity to ask questions of the Company. Neither such inquiries nor any
other due diligence investigations conducted by such Buyer or its advisors, if
any, or its representatives shall modify, amend or affect such Buyer’s

 

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right to rely on the Company’s representations and warranties contained herein.
Such Buyer understands that its investment in the Securities involves a high
degree of risk. Such Buyer has sought such accounting, legal and tax advice as
it has considered necessary to make an informed investment decision with respect
to its acquisition of the Securities.

(f) No Governmental Review. Such Buyer understands that no United States federal
or state agency or any other government or governmental agency has passed on or
made any recommendation or endorsement of the Securities or the fairness or
suitability of the investment in the Securities nor have such authorities passed
upon or endorsed the merits of the offering of the Securities.

(g) Transfer or Resale. Such Buyer understands that: (i) the Securities have not
been and, except as provided in the Registration Rights Agreement, are not being
registered under the 1933 Act or any state securities laws, and may not be
offered for sale, sold, assigned or transferred unless (A) pursuant to an
effective registration statement pursuant to the 1933 Act, (B) subject to
Section 1(b), such Buyer shall have delivered to the Company an opinion of
counsel, in a form reasonably acceptable to the Company, to the effect that such
Securities to be sold, assigned or transferred may be sold, assigned or
transferred pursuant to an exemption from such registration, or (C) subject to
Section 1(b),such Buyer provides the Company with reasonable assurance (in the
form of seller and, if applicable, broker representation letters) that such
Securities can be sold, assigned or transferred pursuant to Rule 144 or Rule
144A promulgated under the 1933 Act, as amended, (or a successor rule thereto)
(collectively, “Rule 144”); (ii) any sale of the Securities made in reliance on
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 the Securities under circumstances
in which the seller (or the Person (as defined below) through whom the sale is
made) may be deemed to be an underwriter (as that term is defined in the 1933
Act) may require compliance with some other exemption under the 1933 Act or the
rules and regulations of the SEC thereunder; and (iii) except as provided in the
Registration Rights Agreement, neither the Company nor any other Person is under
any obligation to register the Securities under the 1933 Act or any state
securities laws or to comply with the terms and conditions of any exemption
thereunder. Notwithstanding the foregoing, the Securities may be pledged in
connection with a bona fide margin account or other loan or financing
arrangement secured by the Securities and such pledge of Securities shall not be
deemed to be a transfer, sale or assignment of the Securities hereunder, and no
Buyer effecting a pledge of Securities shall be required to provide the Company
with any notice thereof or otherwise make any delivery to the Company pursuant
to this Agreement or any other Transaction Document (as defined in
Section 3(b)), including, without limitation, this Section 2(f).

(h) Legends. Such Buyer understands that the certificates or other instruments
representing the Common Shares and the Warrants and, until such time as the
resale of the Warrant Shares have been registered under the 1933 Act as
contemplated by the Registration Rights Agreement, the stock certificates
representing the Warrant Shares, until such time as they are no longer required
pursuant to this Section 2(h), shall bear any legend as required by the “blue
sky” laws of any state and a restrictive legend in substantially the following
form (and a stop-transfer order may be placed against transfer of such stock
certificates):

 

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[NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE
NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE [EXERCISABLE] HAVE BEEN][THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN] REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE
SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE
ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL, IN A FORM
REASONABLY ACCEPTABLE TO THE COMPANY, THAT REGISTRATION IS NOT REQUIRED UNDER
SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT.
NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH
A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE
SECURITIES.

The legend set forth above shall be removed and the Company shall issue a
certificate without such legend to the holder of the Securities upon which it is
stamped or issue to such holder by electronic delivery at the applicable balance
account at The Depository Trust Company (“DTC”) if, unless otherwise required by
state securities laws, (i) such Securities are registered for resale under the
1933 Act (provided that, if the holder is selling pursuant to an effective
registration statement registering the Securities for resale, such holder agrees
to only sell such Securities in compliance with the terms of the Registration
Rights Agreement), (ii) in connection with a sale, assignment or other transfer,
such holder provides the Company with an opinion of counsel (which in the case
of the Adjustment Shares, shall, to the extent required by the Company or its
transfer agent, be an opinion of counsel to the Company), in a form reasonably
acceptable to the Company, to the effect that such sale, assignment or transfer
of the Securities may be made without registration under the applicable
requirements of the 1933 Act, or (iii) the Securities can be sold, assigned or
transferred pursuant to Rule 144 (without the requirement for the Company to be
in compliance with the current public information required under Rule 144(c)(1)
as to such Securities and without volume or manner-of-sale restrictions),
provided that the holder of the Securities shall promptly surrender a
certificate containing such legend to the Company. The Company shall be
responsible for the fees of its transfer agent and all DTC fees associated with
such issuance. If the Company shall fail for any reason or for no reason to
issue to the holder of the Securities within three (3) Trading Days (as defined
in the Warrant) after the occurrence of any of (i) through (iii) above, a
certificate without such legend to the holder or to issue such Securities to
such holder by electronic delivery at the applicable balance account at DTC, and
if on or after such Trading Day the holder purchases (in an open market
transaction or otherwise) shares of Common Stock to deliver in satisfaction of a
sale by the holder of such Securities that the holder anticipated receiving
without legend from the Company, then the Company shall, within three
(3) Business Days after the holder’s request and in the holder’s discretion,
either (i) pay cash to the holder in an amount equal to the Buy-In Price at
which point the Company’s

 

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obligation to deliver such unlegended Securities shall terminate, or
(ii) promptly honor its obligation to deliver to the holder such unlegended
Securities as provided above and pay cash to the holder in an amount equal to
the excess (if any) of the Buy-In Price over the product of (A) such number of
shares of Common Stock, times (B) the Closing Bid Price (as defined in the
Warrants) on the date of exercise.

(i) Validity; Enforcement. This Agreement and the Registration Rights Agreement
have been duly and validly authorized, executed and delivered on behalf of such
Buyer and shall constitute the legal, valid and binding obligations of such
Buyer enforceable against such Buyer in accordance with their respective terms,
except as such enforceability may be limited by general principles of equity or
to applicable bankruptcy, insolvency, reorganization, moratorium, liquidation
and other similar laws relating to, or affecting generally, the enforcement of
applicable creditors’ rights and remedies.

(j) No Conflicts. The execution, delivery and performance by such Buyer of this
Agreement and the Registration Rights Agreement and the consummation by such
Buyer of the transactions contemplated hereby and thereby will not (i) result in
a violation of the organizational documents of such Buyer or (ii) 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 such Buyer is a party, or (iii) result in a violation of any
law, rule, regulation, order, judgment or decree (including federal and state
securities laws) applicable to such Buyer, except in the case of clauses
(ii) and (iii) above, for such conflicts, defaults, rights or violations which
would not, individually or in the aggregate, reasonably be expected to have a
material adverse effect on the ability of such Buyer to perform its obligations
hereunder.

(k) Residency. Such Buyer is a resident of that jurisdiction specified below its
address on the Schedule of Buyers.

3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.

The Company represents and warrants to each of the Buyers that:

(a) Organization and Qualification. Each of the Company and its “Subsidiaries”
(which for purposes of this Agreement means any entity in which the Company,
directly or indirectly, owns any of the capital stock or holds an equity or
similar interest) are entities duly organized and validly existing in good
standing under the laws of the jurisdiction in which they are formed, and have
the requisite power and authorization to own their properties and to carry on
their business as now being conducted. Each of the Company and its Subsidiaries
is duly qualified as a foreign entity to do business and is in good standing or
its equivalent under any applicable foreign jurisdiction in every jurisdiction
in which its ownership of property or the nature of the business conducted by it
makes such qualification necessary, except to the extent that the failure to be
so qualified or be in good standing would not reasonably be expected to have a
Material Adverse Effect. As used in this Agreement, “Material Adverse Effect”
means any material adverse effect on the business, properties, assets,
operations, results of operations, condition (financial or otherwise) or
prospects of the Company and its Subsidiaries, individually or taken as a whole,
or on the transactions contemplated hereby

 

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or on the other Transaction Documents or by the agreements and instruments to be
entered into in connection herewith or therewith, or on the authority or ability
of the Company to perform its obligations under the Transaction Documents (as
defined below). The Company has no Subsidiaries except as set forth on Schedule
3(a).

(b) Authorization; Enforcement; Validity. The Company has the requisite power
and, subject, as applicable, to the Stockholder Approval (as defined below)
authority to enter into and perform its obligations under this Agreement, the
Warrants, the Registration Rights Agreement, the Voting Agreement (as defined in
Section 4(q)), the Irrevocable Transfer Agent Instructions (as defined in
Section 5(b)), the Lock-Up Agreements (as defined in Section 7(ix)) and each of
the other agreements entered into by the parties hereto in connection with the
transactions contemplated by this Agreement (collectively, the “Transaction
Documents”) and to issue the Securities in accordance with the terms hereof and
thereof. The execution and delivery of the Transaction Documents by the Company
and the consummation by the Company of the transactions contemplated hereby and
thereby, including, without limitation, the issuance of the Common Shares, the
Warrants and the reservation for issuance and issuance of Warrant Shares
issuable upon exercise of the Warrants have been duly authorized by the
Company’s Board of Directors and (other than the filing with the SEC of (i) one
or more Registration Statements in accordance with the requirements of the
Registration Rights Agreement and other filings as may be required by state
securities agencies, (ii) an Information Statement or Proxy in respect of the
Stockholder Approval and (iii) the filing and approval of a listing application
as required by the rules of the Principal Market (as defined below)) no further
filing, consent, or authorization is required by the Company, its Board of
Directors or its stockholders. This Agreement and the other Transaction
Documents have been duly executed and delivered by the Company, and constitute
the legal, valid and binding obligations of the Company, enforceable against the
Company in accordance with their respective terms, except as such enforceability
may be limited by general principles of equity or applicable bankruptcy,
insolvency, reorganization, moratorium, liquidation or similar laws relating to,
or affecting generally, the enforcement of applicable creditors’ rights and
remedies.

(c) Issuance of Securities. The issuance of the Common Shares and the Warrants
are duly authorized and, upon issuance in accordance with the terms hereof,
shall be validly issued and free from all taxes, liens and charges with respect
to the issue thereof and the Common Shares shall be fully paid and nonassessable
with the holders being entitled to all rights accorded to a holder of Common
Stock. As of the Closing, a number of shares of Common Stock shall have been
duly authorized and reserved for issuance which equals or exceeds 100% of the
aggregate of the maximum number of shares of Common Stock (the “Required
Reserved Amount”) issuable (i) upon exercise of the Warrants, without taking
into account any limitations on the exercise of the Warrants set forth in the
Warrants, and (ii) as Adjustment Shares, taking into account the Adjustment
Shares Cap. Upon exercise in accordance with the Warrants, the Warrant Shares
will be validly issued, fully paid and nonassessable and free from all
preemptive or similar rights, taxes, liens and charges with respect to the issue
thereof, with the holders being entitled to all rights accorded to a holder of
Common Stock. The Adjustment Shares, when issued in accordance with the terms of
Section 1(b), will be validly issued, fully paid and nonassessable and free from
all preemptive or similar rights, taxes, liens and charges with respect to the
issue thereof, with the holders being entitled to all rights accorded to a
holder of Common Stock. Assuming the accuracy of each of the representations and
warranties set forth in Section

 

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2 of this Agreement, the offer and issuance by the Company of the Securities is
exempt from registration under the 1933 Act.

(d) No Conflicts. Subject to receipt of the Stockholder Approval, the making of
the filings and the receipt of clearances from the SEC and the Principal Market
in respect of the filings specified in Section 3(b), the execution, delivery and
performance of the Transaction Documents by the Company and the consummation by
the Company of the transactions contemplated hereby and thereby (including,
without limitation, the issuance of the Common Shares and the Warrants and
reservation for issuance and issuance of the Warrant Shares and Adjustment
Shares) will not (i) result in a violation of any memorandum of association,
certificate of incorporation, certificate of formation, any certificate of
designations or other constituent documents of the Company or any of its
Subsidiaries, any capital stock of the Company or any of its Subsidiaries or the
articles of association or bylaws of the Company or any of its Subsidiaries or
(ii) conflict with, or constitute a default (or an event which with notice or
lapse of time or both would become a default) in any respect under, or give to
others any rights of termination, amendment, acceleration or cancellation of,
any material agreement, indenture or instrument to which the Company or any of
its Subsidiaries is a party, or (iii) result in a violation of any law, rule,
regulation, order, judgment or decree (including foreign, federal and state
securities laws and regulations and the rules and regulations of The NASDAQ
Capital Market (the “Principal Market”) and laws of the State of Delaware
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, in
the cases of (ii) and (iii) above, to the extent such violations could not
reasonably be expected to have a Material Adverse Effect.

(e) Consents. Subject to receipt of the Stockholder Approval, the making of the
filings and the receipt of clearances from the SEC and the Principal Market in
respect of the filings specified in Section 3(b), neither the Company nor any of
its Subsidiaries is required to obtain any consent, authorization or order of,
or make any filing or registration with, any court, governmental agency or any
regulatory or self-regulatory agency or any other Person in order for it to
execute, deliver or perform any of its obligations under or contemplated by the
Transaction Documents, in each case in accordance with the terms hereof or
thereof. The Company and its Subsidiaries are unaware of any facts or
circumstances that might prevent the Company from obtaining or effecting any of
the registration, application or filings pursuant to the preceding sentence. The
Company is not in violation of the listing requirements of the Principal Market
and has no knowledge of any facts that would reasonably lead to delisting or
suspension of the Common Stock in the foreseeable future. The issuance by the
Company of the Securities shall not have the effect of delisting or suspending
the Common Stock from the Principal Market.

(f) Acknowledgment Regarding Buyer’s Purchase of Securities. The Company
acknowledges and agrees that each Buyer is acting solely in the capacity of an
arm’s length purchaser with respect to the Transaction Documents and the
transactions contemplated hereby and thereby and that no Buyer is (i) an officer
or director of the Company or any of its Subsidiaries, (ii) an “affiliate” of
the Company or any of its Subsidiaries (as defined in Rule 144) or (iii) to the
knowledge of the Company, a “beneficial owner” of more than 10% of the shares of
Common Stock (as defined for purposes of Rule 13d-3 of the 1934 Act). The
Company further acknowledges that no Buyer is acting as a financial advisor or
fiduciary of the Company or any of its Subsidiaries (or in any similar capacity)
with respect to the Transaction Documents and the

 

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transactions contemplated hereby and thereby, and any advice given by a Buyer or
any of its representatives or agents in connection with the Transaction
Documents and the transactions contemplated hereby and thereby is merely
incidental to such Buyer’s purchase of the Securities. The Company further
represents to each Buyer that the Company’s decision to enter into the
Transaction Documents has been based solely on the independent evaluation by the
Company and its representatives.

(g) No General Solicitation; Placement Agent’s Fees. Neither the Company, nor
any of its Subsidiaries or affiliates, nor any Person acting on its or their
behalf, has engaged in any form of general solicitation or general advertising
(within the meaning of Regulation D) in connection with the offer or sale of the
Securities. The Company shall be responsible (other than for Persons engaged by
any Buyer or its investment advisor) for the payment of any placement agent’s
fees, financial advisory fees, or brokers’ commissions (other than for persons
engaged by any Buyer or its investment advisor) relating to or arising out of
the transactions contemplated hereby, including, without limitation, placement
agent fees payable to Roth Capital Partners, as placement agent (the “Placement
Agent”) in connection with the sale of the Securities. The Company shall pay,
and hold each Buyer harmless against, any liability, loss or expense (including,
without limitation, attorney’s fees and out-of-pocket expenses) arising in
connection with any such claim. The Company acknowledges that it has engaged the
Placement Agent in connection with the sale of the Securities. Other than the
Placement Agent, neither the Company nor any of its Subsidiaries has engaged any
placement agent or other agent in connection with the sale of the Securities.

(h) No Integrated Offering. None of the Company, its Subsidiaries, any of their
affiliates, and any Person acting on 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 require registration of any of the
Securities under the 1933 Act, whether through integration with prior offerings
or otherwise, (other than the Stockholder Approval) or cause this offering of
the Securities to require approval of stockholders of the Company for purposes
of the 1933 Act or any applicable stockholder approval provisions, including,
without limitation, under the rules and regulations of any exchange or automated
quotation system on which any of the securities of the Company are listed or
designated. None of the Company, its Subsidiaries, their affiliates and any
Person acting on their behalf will take any action or steps referred to in the
preceding sentence that would require registration of any of the Securities
under the 1933 Act or cause the offering of the Securities to be integrated with
other offerings for purposes of any such applicable stockholder approval
provisions.

(i) Dilutive Effect. The Company understands and acknowledges that its
obligation to issue the Warrant Shares upon exercise of the Warrants in
accordance with this Agreement and the Warrants and to issue the Adjustment
Shares in accordance with Section 1(b) is, in each case, is absolute and
unconditional regardless of the dilutive effect that such issuance may have on
the ownership interests of other stockholders of the Company.

(j) Application of Takeover Protections; Rights Agreement. The Company and its
board of directors have taken all necessary action, if any, in order to render
inapplicable any control share acquisition, business combination, poison pill
(including any distribution under a rights agreement) or other similar
anti-takeover provision under the Certificate of Incorporation

 

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or the laws of the State of Delaware which is or could become applicable to any
Buyer as a result of the transactions contemplated by this Agreement, including,
without limitation, the Company’s issuance of the Securities and any Buyer’s
ownership of the Securities. The Company has not adopted a stockholder rights
plan or similar arrangement relating to accumulations of beneficial ownership of
Common Stock or a change in control of the Company.

(k) SEC Documents; Financial Statements. Except as disclosed in Schedule 3(k),
during the two (2) years prior to the date hereof, the Company has timely filed
all reports, schedules, forms, statements and other documents required to be
filed by it with the SEC pursuant to the reporting requirements of the 1934 Act
(all of the foregoing filed prior to the date hereof, and all exhibits included
therein and financial statements, notes and schedules thereto and documents
incorporated by reference therein being hereinafter referred to as the “SEC
Documents”). The Company has delivered to the Buyers or their respective
representatives true, correct and complete copies of the SEC Documents not
available on the EDGAR system. As of their respective filing dates when taken
together with any subsequent amendments or supplements, the SEC Documents
complied in all material respects with the requirements of the 1934 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 the light of the circumstances under which they were
made, not misleading. As of their respective filing dates, the financial
statements of the Company included in the SEC Documents complied as to form in
all material respects with applicable accounting requirements and the published
rules and regulations of the SEC with respect thereto. Such financial statements
have been prepared in accordance with generally accepted accounting principles,
consistently applied, during the periods involved (except (i) as may be
otherwise indicated in such financial statements or the notes thereto, or
(ii) in the case of unaudited interim statements, to the extent they may exclude
footnotes or may be condensed or summary statements) and fairly present in all
material respects the financial position of the Company as of the dates thereof
and the results of its operations and cash flows for the periods then ended
(subject, in the case of unaudited statements, to normal year-end audit
adjustments). No other information provided by or on behalf of the Company to
the Buyers which is not included in the SEC Documents, including, without
limitation, information referred to in Section 2(d) of this Agreement or in the
disclosure schedules to this Agreement, contains any untrue statement of a
material fact or omits to state any material fact necessary in order to make the
statements therein, in the light of the circumstance under which they are or
were made, not misleading.

(l) Absence of Certain Changes. Except as disclosed in Schedule 3(l), since
June 30, 2010, there has been no material adverse change and no material adverse
development in the business, assets, properties, operations, condition
(financial or otherwise), results of operations or prospects of the Company or
its Subsidiaries. Except as disclosed in Schedule 3(l), since June 30, 2010,
neither the Company nor any of its Subsidiaries has (i) declared or paid any
dividends, (ii) sold any assets, individually or in the aggregate, in excess of
$100,000 outside of the ordinary course of business or (iii) had capital
expenditures, individually or in the aggregate, in excess of $100,000. Neither
the Company nor any of its Subsidiaries has taken any steps to seek protection
pursuant to any bankruptcy law nor does the Company have any knowledge or reason
to believe that its creditors intend to initiate involuntary bankruptcy
proceedings or any

 

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actual knowledge of any fact that would reasonably lead a creditor to do so. The
Company and its Subsidiaries, individually and on a consolidated basis, are not
as of the date hereof, and after giving effect to the transactions contemplated
hereby to occur at the Closing, will not be Insolvent (as defined below). For
purposes of this Section 3(l), “Insolvent” means, with respect to any Person,
(i) the present fair saleable value of such Person’s assets is less than the
amount required to pay such Person’s total Indebtedness (as defined in
Section 3(s)), (ii) such Person is unable to pay its debts and liabilities,
subordinated, contingent or otherwise, as such debts and liabilities become
absolute and matured, (iii) such Person intends to incur or believes that it
will incur debts that would be beyond its ability to pay as such debts mature or
(iv) such Person has unreasonably small capital with which to conduct the
business in which it is engaged as such business is now conducted and is
proposed to be conducted.

(m) No Undisclosed Events, Liabilities, Developments or Circumstances. No event,
liability, development or circumstance has occurred or exists, or is
contemplated to occur with respect to the Company, its Subsidiaries or their
respective business, properties, prospects, operations or financial condition,
that would be required to be disclosed by the Company under applicable
securities laws on a registration statement on Form S-1 filed with the SEC
relating to an issuance and sale by the Company of its Common Stock and which
has not been publicly announced.

(n) Conduct of Business; Regulatory Permits. Neither the Company nor any of its
Subsidiaries is in violation of any term of or in default under any certificate
of designations of any outstanding series of preferred stock of the Company, its
Certificate of Incorporation or Bylaws (as such terms are defined below) or
their organizational charter or memorandum of association or certificate of
incorporation or articles of association or bylaws, respectively. Neither the
Company nor any of its Subsidiaries is in violation of any judgment, decree or
order or any statute, ordinance, rule or regulation applicable to the Company or
any of its Subsidiaries, and neither the Company nor any of its Subsidiaries
will conduct its business in violation of any of the foregoing, except for
possible violations which could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect. Without limiting the
generality of the foregoing, the Company is not in violation of any of the
rules, regulations or requirements of the Principal Market and has no knowledge
of any facts or circumstances that would reasonably lead to delisting or
suspension of the Common Stock by the Principal Market in the foreseeable
future. Except as disclosed in Schedule 3(n), during the two (2) years prior to
the date hereof, (i) the Common Stock has been designated for quotation on the
Principal Market, (ii) trading in the Common Stock has not been suspended by the
SEC or the Principal Market other than temporary trading halts as a result of
material announcements and (iii) the Company has received no communication,
written or oral, from the SEC or the Principal Market regarding the suspension
or delisting of the Common Stock from the Principal Market. The Company and its
Subsidiaries possess all certificates, authorizations and permits issued by the
appropriate federal, state or foreign regulatory authorities necessary to
conduct their respective businesses, except where the failure to possess such
certificates, authorizations or permits would not have, individually or in the
aggregate, a Material Adverse Effect, and neither the Company nor any such
Subsidiary has received any notice of proceedings relating to the revocation or
modification of any such certificate, authorization or permit.

 

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(o) Foreign Corrupt Practices. Neither the Company, nor any of its Subsidiaries,
nor any director, officer, agent, employee or other Person acting on behalf of
the Company or any of its Subsidiaries has, in the course of its actions for, or
on behalf of, the Company or any of its Subsidiaries (i) used any corporate
funds for any unlawful contribution, gift, entertainment or other unlawful
expenses relating to political activity; (ii) made any direct or indirect
unlawful payment to any foreign or domestic government official or employee from
corporate funds; (iii) violated or is in violation of any provision of the U.S.
Foreign Corrupt Practices Act of 1977, as amended; or (iv) made any unlawful
bribe, rebate, payoff, influence payment, kickback or other unlawful payment to
any foreign or domestic government official or employee.

(p) Sarbanes-Oxley Act. The Company is in compliance with any and all applicable
requirements of the Sarbanes-Oxley Act of 2002 that are effective as of the date
hereof, and any and all applicable rules and regulations promulgated by the SEC
thereunder that are effective as of the date hereof.

(q) Transactions With Affiliates. Except as disclosed in the SEC Documents, none
of the officers, directors or employees of the Company or any of its
Subsidiaries is presently a party to any transaction with the Company or any of
its Subsidiaries (other than for ordinary course services as employees, officers
or 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
such officer, director or employee or, to the knowledge of the Company or any of
its Subsidiaries, any corporation, partnership, trust or other entity in which
any such officer, director, or employee has a substantial interest or is an
officer, director, trustee or partner.

(r) Equity Capitalization. As of the date hereof, the authorized capital stock
of the Company consists of (i)113,000,000 shares of Common Stock, of which as of
the date hereof, 8,045,872 shares are issued and outstanding, 666,588 shares are
reserved for issuance pursuant to the Company’s employee incentive plan or other
options and warrants outstanding and 9,654,000 shares are reserved for issuance
pursuant to securities (other than the aforementioned options and warrants and
the Warrants) exercisable or exchangeable for, or convertible into, Common Stock
and (ii) 100,000 shares of preferred stock, par value $0.01 per share, of which
as of the date hereof 1,000 shares of Series A Convertible Preferred Stock (the
“Series A Preferred Stock”) are issued and outstanding, as disclosed in the
Current Report on Form 8-K filed by the Company on May 11, 2011, as amended (the
“May 11 8-K”), after being issued on May 9, 2011 pursuant to the Asset Purchase
Agreement, dated as of December 21, 2010, between the Company and Novogen
Limited (“Novogen”) and Novogen Research PTY Limited in the form filed as an
exhibit to the May 11 8-K (the “Asset Purchase Agreement”). All of such
outstanding shares have been, or upon issuance will be, validly issued and are
fully paid and nonassessable. Except as disclosed in Schedule 3(r): (i) none of
the Company’s capital stock is subject to preemptive rights or any other similar
rights or any liens or encumbrances suffered or permitted by the Company;
(ii) there are no outstanding options, warrants, scrip, rights to subscribe to,
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

 

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shares of capital stock of the Company or any of its Subsidiaries or options,
warrants, scrip, rights to subscribe to, 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; (iii) there are no outstanding debt securities, notes, credit
agreements, credit facilities or other agreements, documents or instruments
evidencing Indebtedness of the Company or any of its Subsidiaries or by which
the Company or any of its Subsidiaries is or may become bound; (iv) there are no
financing statements securing obligations in any material amounts, either singly
or in the aggregate, filed in connection with the Company or any of its
Subsidiaries; (v) there are no agreements or arrangements under which the
Company or any of its Subsidiaries is obligated to register the sale of any of
their securities under the 1933 Act (except pursuant to the Registration Rights
Agreement); (vi) there are no outstanding securities or instruments of the
Company or any of its Subsidiaries which contain any redemption or similar
provisions, and there are no contracts, commitments, understandings or
arrangements by which the Company or any of its Subsidiaries is or may become
bound to redeem a security of the Company or any of its Subsidiaries;
(vii) there are no securities or instruments containing anti-dilution or similar
provisions that will be triggered by the issuance of the Securities; (viii) the
Company does not have any stock appreciation rights or “phantom stock” plans or
agreements or any similar plan or agreement; and (ix) the Company and its
Subsidiaries have no liabilities or obligations required to be disclosed in the
SEC Documents but not so disclosed in the SEC Documents, other than those
incurred in the ordinary course of the Company’s or any of its Subsidiary’s’
respective businesses and which, individually or in the aggregate, do not or
would not have a Material Adverse Effect. The Company has furnished or made
available to the Buyers true, correct and complete copies of the Company’s
Certificate of Incorporation, as amended and as in effect on the date hereof
(the “Certificate of Incorporation”), and the Company’s Bylaws, as amended and
as in effect on the date hereof (the “Bylaws”), and the terms of all securities
convertible into, or exercisable or exchangeable for, shares of Common Stock and
the material rights of the holders thereof in respect thereto.

(s) Indebtedness and Other Contracts. Except as disclosed in Schedule 3(s),
neither the Company nor any of its Subsidiaries (i) has any outstanding
Indebtedness (as defined below), (ii) is a party to any contract, agreement or
instrument, the violation of which, or default under which, by the other
party(ies) to such contract, agreement or instrument could reasonably be
expected to result in a Material Adverse Effect, (iii) is in violation of any
term of or in default under any contract, agreement or instrument relating to
any Indebtedness, except where such violations and defaults would not result,
individually or in the aggregate, in a Material Adverse Effect, or (iv) is a
party to any contract, agreement or instrument relating to any Indebtedness, the
performance of which, in the judgment of the Company’s officers, has or is
expected to have a Material Adverse Effect. Schedule 3(s) provides a detailed
description of the material terms of any such outstanding Indebtedness. For
purposes of this Agreement: (x) “Indebtedness” of any Person means, without
duplication (A) all indebtedness for borrowed money, (B) all obligations issued,
undertaken or assumed as the deferred purchase price of property or services,
including, without limitation, “capital leases” in accordance with United States
generally accepted accounting principles (other than trade payables entered into
in the ordinary course of business), (C) all reimbursement or payment
obligations with respect to letters of credit, surety bonds and other similar
instruments, (D) all obligations evidenced by notes, bonds, debentures or
similar instruments, including obligations so evidenced incurred in connection
with the acquisition of property, assets or businesses, (E) all indebtedness
created or arising under any conditional sale

 

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or other title retention agreement, or incurred as financing, in either case
with respect to any property or assets acquired with the proceeds of such
indebtedness (even though the rights and remedies of the seller or bank under
such agreement in the event of default are limited to repossession or sale of
such property), (F) all monetary obligations under any leasing or similar
arrangement which, in connection with generally accepted accounting principles,
consistently applied for the periods covered thereby, is classified as a capital
lease, (G) all indebtedness referred to in clauses (A) through (F) above secured
by (or for which the holder of such Indebtedness has an existing right,
contingent or otherwise, to be secured by) any mortgage, lien, pledge, charge,
security interest or other encumbrance upon or in any property or assets
(including accounts and contract rights) owned by any Person, even though the
Person which owns such assets or property has not assumed or become liable for
the payment of such indebtedness, and (H) all Contingent Obligations in respect
of indebtedness or obligations of others of the kinds referred to in clauses
(A) through (G) above; (y) “Contingent Obligation” means, as to any Person, any
direct or indirect liability, contingent or otherwise, of that Person with
respect to any indebtedness, lease, dividend or other obligation of another
Person if the primary purpose or intent of the Person incurring such liability,
or the primary effect thereof, is to provide assurance to the obligee of such
liability that such liability will be paid or discharged, or that any agreements
relating thereto will be complied with, or that the holders of such liability
will be protected (in whole or in part) against loss with respect thereto; and
(z) “Person” means an individual, a limited liability company, a partnership, a
joint venture, a corporation, a trust, an unincorporated organization and a
government or any department or agency thereof.

(t) Absence of Litigation. There is no action, suit, proceeding, inquiry or
investigation before or by the Principal Market, any court, public board,
government agency, self-regulatory organization or body pending or, to the
knowledge of the Company, threatened against or affecting the Company or any of
its Subsidiaries, the Common Stock or any of the Company’s Subsidiaries or any
of the Company’s or its Subsidiaries’ officers or directors in their capacities
as such, except as set forth in Schedule 3(t). The matters set forth in Schedule
3(t) would not reasonably be expected to have a Material Adverse Effect.

(u) Insurance. The Company and each of its Subsidiaries are insured by insurers
of recognized financial responsibility against such losses and risks and in such
amounts as management of the Company believes to be prudent and customary in the
businesses in which the Company and its Subsidiaries are engaged. Neither the
Company nor any such Subsidiary has been refused any insurance coverage sought
or applied for and neither the Company nor any such Subsidiary has any reason to
believe that it will not be able to renew its existing insurance coverage as and
when such coverage expires or to obtain similar coverage from similar insurers
as may be necessary to continue its business at a cost that would not have a
Material Adverse Effect.

(v) Employee Relations.

(i) Neither the Company nor any of its Subsidiaries is a party to any collective
bargaining agreement or employs any member of a union. The Company and its
Subsidiaries believe that their relations with their employees are good. No
executive officer of the Company or any of its Subsidiaries (as defined in Rule
501(f) of the 1933 Act) has notified the Company or any such Subsidiary that
such officer intends to leave the Company or any such

 

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Subsidiary or otherwise terminate such officer’s employment with the Company or
any such Subsidiary. No executive officer of the Company or any of its
Subsidiaries, to the knowledge of the Company or any of its Subsidiaries, 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 such executive officer does not
subject the Company or any of its Subsidiaries to any liability with respect to
any of the foregoing matters.

(ii) The Company and its Subsidiaries are in compliance with all federal, state,
local and foreign laws and regulations respecting labor, employment and
employment practices and benefits, terms and conditions of employment and wages
and hours, except where failure to be in compliance would not, either
individually or in the aggregate, reasonably be expected to result in a Material
Adverse Effect.

(w) Title. The Company and its Subsidiaries have good and marketable title in
fee simple to all real property and good and marketable title to all personal
property owned by them which is material to the business of the Company and its
Subsidiaries, in each case free and clear of all liens, encumbrances and defects
except such as do not materially affect the value of such property and do not
interfere with the use made and proposed to be made of such property by the
Company and any of its Subsidiaries. Any real property and facilities held under
lease by the Company and any of its Subsidiaries are held by them under valid,
subsisting and enforceable leases with such exceptions as are not material and
do not interfere with the use made and proposed to be made of such property and
buildings by the Company and its Subsidiaries.

(x) Intellectual Property Rights. The Company and its Subsidiaries own or
possess adequate rights or licenses to use all trademarks, trade names, service
marks, service mark registrations, service names, original works of authorship,
patents, patent rights, copyrights, inventions, licenses, approvals,
governmental authorizations, trade secrets and other intellectual property
rights and all applications and registrations therefor (“Intellectual Property
Rights”) necessary to conduct their respective businesses as now conducted.
Except as set forth in Schedule 3(x), none of the Company’s Intellectual
Property Rights have expired or terminated or have been abandoned or are
expected to expire or terminate or are expected to be abandoned, within three
years from the date of this Agreement. The Company does not have any knowledge
of any infringement by the Company or its Subsidiaries of Intellectual Property
Rights of others. There is no claim, action or proceeding being made or brought,
or to the knowledge of the Company or any of its Subsidiaries, being threatened,
against the Company or any of its Subsidiaries regarding its Intellectual
Property Rights. Neither the Company nor any of its Subsidiaries is aware of any
facts or circumstances which might give rise to any of the foregoing
infringements or claims, actions or proceedings. The Company and its
Subsidiaries have taken reasonable security measures to protect the secrecy,
confidentiality and value of all of their Intellectual Property Rights.

(y) Environmental Laws. The Company and its Subsidiaries (i) are in compliance
with any and all Environmental Laws (as hereinafter defined), (ii) have received
all permits, licenses or other approvals required of them under applicable
Environmental Laws to conduct their respective businesses and (iii) are in
compliance with all terms and conditions of any such permit, license or approval
where, in each of the foregoing clauses (i), (ii) and (iii), the

 

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failure to so comply could be reasonably expected to have, individually or in
the aggregate, a Material Adverse Effect. The term “Environmental Laws” means
all federal, state, local or foreign laws relating to pollution or protection of
human health or the environment (including, without limitation, ambient air,
surface water, groundwater, land surface or subsurface strata), including,
without limitation, laws relating to emissions, discharges, releases or
threatened releases of chemicals, pollutants, contaminants, or toxic or
hazardous substances or wastes (collectively, “Hazardous Materials”) into the
environment, or otherwise relating to the manufacture, processing, distribution,
use, treatment, storage, disposal, transport or handling of Hazardous Materials,
as well as all authorizations, codes, decrees, demands or demand letters,
injunctions, judgments, licenses, notices or notice letters, orders, permits,
plans or regulations issued, entered, promulgated or approved thereunder.

(z) Subsidiary Rights. The Company or one of its Subsidiaries has the
unrestricted right to vote, and (subject to limitations imposed by applicable
law) to receive dividends and distributions on, all capital securities of its
Subsidiaries as owned by the Company or such Subsidiary.

(aa) Investment Company Status. The Company is not, and upon consummation of the
sale of the Securities, and for so long any Buyer holds any Securities, will not
be, an “investment company,” a company controlled by an “investment company” or
an “affiliated person” of, or “promoter” or “principal underwriter” for, an
“investment company” as such terms are defined in the Investment Company Act of
1940, as amended.

(bb) Tax Status. The Company and each of its Subsidiaries (i) has made or filed
all foreign, U.S. federal and state income and all other tax returns, reports
and declarations required by any jurisdiction to which it is subject, (ii) has
paid all taxes and other governmental assessments and charges that are material
in amount, shown or determined to be due on such returns, reports and
declarations, except those being contested in good faith and (iii) has set aside
on its books provision reasonably adequate for the payment of all taxes for
periods subsequent to the periods to which such returns, reports or declarations
apply. There are no unpaid taxes in any material amount claimed to be due by the
taxing authority of any jurisdiction, and the officers of the Company know of no
basis for any such claim.

(cc) Internal Accounting and Disclosure Controls. The Company and each of its
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
and liability accountability, (iii) access to assets or incurrence of
liabilities is permitted only in accordance with management’s general or
specific authorization and (iv) the recorded accountability for assets and
liabilities is compared with the existing assets and liabilities at reasonable
intervals and appropriate action is taken with respect to any difference. The
Company maintains disclosure controls and procedures (as such term is defined in
Rule 13a-15 under the 1934 Act) that are effective in ensuring that information
required to be disclosed by the Company in the reports that it files or submits
under the 1934 Act is recorded, processed, summarized and reported, within the
time periods specified in the rules and forms of the SEC, including, without
limitation, controls and procedures designed in to ensure that information

 

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required to be disclosed by the Company in the reports that it files or submits
under the 1934 Act is accumulated and communicated to the Company’s management,
including its principal executive officer or officers and its principal
financial officer or officers, as appropriate, to allow timely decisions
regarding required disclosure. During the twelve months prior to the date hereof
neither the Company nor any of its Subsidiaries has received any notice or
correspondence from any accountant relating to any material weakness in any part
of the system of internal accounting controls of the Company or any of its
Subsidiaries.

(dd) Off Balance Sheet Arrangements. There is no transaction, arrangement, or
other relationship between the Company and an unconsolidated or other off
balance sheet entity that is required to be disclosed by the Company in its 1934
Act filings and is not so disclosed or that otherwise would be reasonably likely
to have a Material Adverse Effect.

(ee) Eligibility for Registration. The Company is eligible to register the
Common Shares and the Warrant Shares for resale by the Buyers using Form S-3
promulgated under the 1933 Act in accordance with the Registration Rights
Agreement.

(ff) Transfer Taxes. On the Closing Date, all stock transfer or other taxes
(other than income or similar taxes) which are required to be paid in connection
with the sale and transfer of the Securities to be sold to each Buyer hereunder
will be, or will have been, fully paid or provided for by the Company, and all
laws imposing such taxes will be or will have been complied with.

(gg) Manipulation of Price. The Company has not, and to its knowledge no one
acting on its behalf has, (i) taken, directly or indirectly, any action designed
to cause or to result, or that could reasonably be expected to cause or result,
in the stabilization or manipulation of the price of any security of the Company
to facilitate the sale or resale of any of the Securities, (ii) other than the
Placement Agent, sold, bid for, purchased, or paid any compensation for
soliciting purchases of, any of the Securities, or (iii) other than the
Placement Agent, paid or agreed to pay to any person any compensation for
soliciting another to purchase any Securities.

(hh) Acknowledgement Regarding Buyers’ Trading Activity. It is understood and
acknowledged by the Company that (i) none of the Buyers has been asked to agree,
nor has any Buyer agreed, to desist from purchasing or selling, long and/or
short, securities of the Company, or “derivative” securities based on securities
issued by the Company or to hold the Securities for any specified term; (ii) any
Buyer, and counter-parties in “derivative” transactions to which any such Buyer
is a party, directly or indirectly, presently may have a “short” position in the
Common Stock, and (iii) each Buyer shall not be deemed to have any affiliation
with or control over any arm’s length counter-party in any “derivative”
transaction. The Company further understands and acknowledges that following the
public disclosure of the transactions contemplated by the Transaction Documents,
one or more Buyers may engage in hedging and/or trading activities at various
times during the period that the Securities are outstanding, including, without
limitation, during the periods that the value of the Warrant Shares and/or the
Adjustment Shares are being determined and (b) such hedging and/or trading
activities, if any, can reduce the value of the existing stockholders’ equity
interest in the Company both at and after the time the hedging and/or trading
activities are being conducted. The Company acknowledges that such
aforementioned hedging and/or trading activities do not

 

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constitute a breach of this Agreement, the Warrants or any of the documents
executed in connection herewith.

(ii) U.S. Real Property Holding Corporation. The Company is not, has never been,
and so long as any Securities remain outstanding, shall not become, a U.S. real
property holding corporation within the meaning of Section 897 of the Internal
Revenue Code of 1986, as amended, and the Company shall so certify upon any
Buyer’s request.

(jj) Bank Holding Company Act. Neither the Company nor any of its Subsidiaries
or affiliates is subject to the Bank Holding Company Act of 1956, as amended
(the “BHCA”) and to regulation by the Board of Governors of the Federal Reserve
System (the “Federal Reserve”). Neither the Company nor any of its Subsidiaries
or affiliates owns or controls, directly or indirectly, five percent (5%) or
more of the outstanding shares of any class of voting securities or twenty-five
percent (25%) or more of the total equity of a bank or any entity that is
subject to the BHCA and to regulation by the Federal Reserve. Neither the
Company nor any of its Subsidiaries or affiliates exercises a controlling
influence over the management or policies of a bank or any entity that is
subject to the BHCA and to regulation by the Federal Reserve.

(kk) No Additional Agreements. The Company does not have any agreement or
understanding with any Buyer with respect to the transactions contemplated by
the Transaction Documents other than as specified in the Transaction Documents.

(ll) Disclosure. The Company confirms that neither it nor any other Person
acting on its behalf has provided any of the Buyers or their agents or counsel
with any information that constitutes or could reasonably be expected to
constitute material, nonpublic information, other than the existence of the
transactions contemplated by this Agreement and the other Transaction Documents.
The Company understands and confirms that each of the Buyers will rely on the
foregoing representations in effecting transactions in securities of the
Company. All disclosure provided to the Buyers regarding the Company, or any of
its Subsidiaries, their business and the transactions contemplated hereby,
including the disclosure schedules to this Agreement, furnished by or on behalf
of the Company is true and correct and does not contain any untrue statement of
a material fact or omit to state any material fact necessary in order to make
the statements made therein, in the light of the circumstances under which they
were made, not misleading. Each press release issued by the Company or any of
its Subsidiaries during the twelve (12) months preceding the date of this
Agreement did not at the time of release contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. No event or
circumstance has occurred or information exists with respect to the Company or
any of its Subsidiaries or its or their business, properties, prospects,
operations or financial conditions, which, under applicable law, rule or
regulation, requires public disclosure or announcement by the Company but which
has not been so publicly announced or disclosed. The Company acknowledges and
agrees that no Buyer makes or has made any representations or warranties with
respect to the transactions contemplated hereby other than those specifically
set forth in Section 2.

 

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(mm) Shell Company Status. The Company is not, and has never been, an issuer
identified in Rule 144(i)(1).

(nn) Stock Option Plans. Each stock option granted by the Company was granted
(i) in accordance with the terms of the applicable Company stock option plan
except as disclosed on Schedule 3(nn) and (ii) with an exercise price at least
equal to the fair market value of the Common Stock on the date such stock option
would be considered granted under United States Generally Accepted Accounting
Principals, consistently applied, and applicable law. No stock option granted
under the Company’s stock option plan has been backdated. The Company has not
knowingly granted, and there is no and has been no Company policy or practice to
knowingly grant, stock options prior to, or otherwise knowingly coordinate the
grant of stock options with, the release or other public announcement of
material information regarding the Company or its Subsidiaries or their
financial results or prospects.

(oo) No Disagreements with Accountants and Lawyers. There are no material
disagreements of any kind presently existing, or reasonably anticipated by the
Company to arise, between the Company and the accountants and lawyers formerly
or presently employed by the Company and the Company is current with respect to
any fees owed to its accountants and lawyers which could affect the Company’s
ability to perform any of its obligations under any of the Transaction
Documents.

(pp) No Additional Issuances. All securities issuable under that certain
Securities Purchase Agreement, dated as of March 17, 2011, by and among the
Company and Ironridge Global BioPharma (the “Ironridge SPA”) have been issued
and the Company has no further right or obligation to deliver any notices under,
or issue any securities pursuant to, the Ironridge SPA.

(qq) Novogen. The Company consummated the transactions contemplated by the Asset
Purchase Agreement, dated as of December 21, 2010, by and among the Company,
Novogen and Novogen Research Ptd Limited pursuant to the terms set forth in such
agreement that is attached to the Current Report of Form 8-K filed by the
Company on December 22, 2010.

4. COVENANTS.

(a) Best Efforts. Each party shall use its best efforts timely to satisfy each
of the covenants and the conditions to be satisfied by it as provided in
Sections 6 and 7 of this Agreement.

(b) Form D and Blue Sky. The Company agrees to file a Form D with respect to the
Securities if required under Regulation D and to provide a copy thereof to each
Buyer promptly after such filing. The Company shall, on or before the Closing
Date, take such action as the Company shall reasonably determine is necessary in
order to obtain an exemption for or to qualify the Securities for sale to the
Buyers at the Closing pursuant to this Agreement under applicable securities or
“Blue Sky” laws of the states of the United States (or to obtain an exemption
from such qualification), and shall provide evidence of any such action so taken
to the Buyers on or prior to the Closing Date. The Company shall make all
filings and reports relating

 

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to the offer and sale of the Securities required under applicable securities or
“Blue Sky” laws of the states of the United States following the Closing Date,
if any.

(c) Reporting Status. Until the date on which the Investors (as defined in the
Registration Rights Agreement) shall have sold all the Warrant Shares and none
of the Warrants are outstanding (the “Reporting Period”), the Company shall
timely file all reports required to be filed with the SEC pursuant to the 1934
Act, and the Company shall not terminate its status as an issuer required to
file reports under the 1934 Act even if the 1934 Act or the rules and
regulations thereunder would no longer require or otherwise permit such
termination, and the Company shall take all actions necessary to maintain its
eligibility to register the Warrant Shares for resale by the Investors on Form
S-1.

(d) Use of Proceeds. The Company will use proceeds from the sale of the
Securities for general corporate and for working capital purposes but not for
(i) the repayment of any outstanding Indebtedness of the Company or any of its
Subsidiaries or (ii) the redemption or repurchase of any of its or its
Subsidiaries’ equity securities.

(e) Financial Information. The Company agrees to send the following to each
Investor during the Reporting Period (i) unless the following are filed with the
SEC through EDGAR and are available to the public through the EDGAR system,
within one (1) Business Day after the filing thereof with the SEC, a copy of its
Annual Reports on Form 10-K, any Quarterly Reports on Form 10-Q, any Current
Reports on Form 8-K (or any analogous reports under the 1934 Act) and any
registration statements (other than on Form S-8) or amendments filed pursuant to
the 1933 Act, and (ii) copies of any notices and other information made
available or given to the stockholders of the Company generally,
contemporaneously with the making available or giving thereof to the
stockholders. As used herein, “Business Day” means any day other than Saturday,
Sunday or other day on which commercial banks in The City of New York are
authorized or required by law to remain closed.

(f) Listing.

(i) The Company shall promptly secure the listing of all of the Registrable
Securities (as defined in the Registration Rights Agreement) upon each national
securities exchange and automated quotation system, if any, upon which the
Common Stock is then listed (subject to official notice of issuance) and shall
maintain such listing of all Registrable Securities from time to time issuable
under the terms of the Transaction Documents. The Company shall maintain the
authorization for quotation of the Common Stock on the Principal Market. Neither
the Company nor any of its Subsidiaries shall take any action which would be
reasonably expected to result in the delisting or suspension of the Common Stock
on the Principal Market. The Company shall pay all fees and expenses in
connection with satisfying its obligations under this Section 4(f).

(g) Fees. The Company shall reimburse Hudson Bay (a Buyer) or its designee(s)
(in addition to any other expense amounts paid to any Buyer or its counsel prior
to the date of this Agreement) for all documented reasonable out of pocket costs
and expenses incurred to third parties in connection with the transactions
contemplated by the Transaction Documents (including all reasonable legal fees
and disbursements in connection therewith,

 

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documentation and implementation of the transactions contemplated by the
Transaction Documents and due diligence in connection therewith) up to a maximum
of $93,000 (and Hudson Bay acknowledges that the Company has paid Hudson Bay’s
counsel a $25,000 advance), which amount may be withheld by such Buyer from its
Purchase Price at the Closing. The Company shall be responsible for the payment
of any placement agent’s fees, financial advisory fees, or broker’s commissions
(other than for Persons engaged by any Buyer) relating to or arising out of the
transactions contemplated hereby, including, without limitation, any fees or
commissions payable to the Placement Agent. The Company shall pay, and hold each
Buyer harmless against, any liability, loss or expense (including, without
limitation, reasonable attorney’s fees and out-of-pocket expenses) arising in
connection with any claim relating to any such payment. Except as otherwise set
forth in the Transaction Documents, each party to this Agreement shall bear its
own expenses in connection with the sale of the Securities to the Buyers.

(h) Pledge of Securities. The Company acknowledges and agrees that the
Securities may be pledged by an Investor (as defined in the Registration Rights
Agreement) in connection with a bona fide margin agreement or other loan or
financing arrangement that is secured by the Securities. The pledge of
Securities shall not be deemed to be a transfer, sale or assignment of the
Securities hereunder, and no Investor effecting a pledge of Securities shall be
required to provide the Company with any notice thereof or otherwise make any
delivery to the Company pursuant to this Agreement or any other Transaction
Document, including, without limitation, Section 2(f) hereof; provided that an
Investor and its pledgee shall be required to comply with the provisions of
Section 2(g) hereof in order to effect a sale, transfer or assignment of
Securities to such pledgee. The Company hereby agrees to execute and deliver
such documentation as a pledgee of the Securities may reasonably request in
connection with a pledge of the Securities to such pledgee by an Investor.

(i) Disclosure of Transactions and Other Material Information. On or before 8:30
a.m., New York City time, on the first Business Day after this Agreement has
been executed, the Company shall file a Current Report on Form 8-K describing
the terms of the transactions contemplated by the Transaction Documents in the
form required by the 1934 Act and attaching the material Transaction Documents
(including, without limitation, this Agreement (and all schedules and exhibits
to this Agreement), the form of the Registration Rights Agreement, the form of
Lock-Up Agreement and the form of Voting Agreement as exhibits to such filing
(including all attachments, the “8-K Filing”). From and after the filing of the
8-K Filing with the SEC, no Buyer shall be in possession of any material,
nonpublic information received from the Company, any of its Subsidiaries or any
of their respective officers, directors, employees or agents, that is not
disclosed in the 8-K Filing. The Company shall not, and shall cause each of its
Subsidiaries and its and each of their respective officers, directors, employees
and agents, not to, provide any Buyer with any material, nonpublic information
regarding the Company or any of its Subsidiaries from and after the filing of
the 8-K Filing with the SEC without the express prior written consent of such
Buyer. If a Buyer has, or believes it has, received any such material, nonpublic
information regarding the Company or any of its Subsidiaries from the Company,
any of its Subsidiaries or any of their respective officers, directors,
affiliates or agents, it may provide the Company with written notice thereof.
The

 

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Company shall, within two (2) Trading Days (as defined in the Warrants) of
receipt of such notice, make public disclosure of such material, nonpublic
information. In the event of a breach of the foregoing covenant by the Company,
any of its Subsidiaries, or any of its or their respective officers, directors,
employees and agents, in addition to any other remedy provided herein or in the
Transaction Documents, a Buyer shall have the right to make a public disclosure,
in the form of a press release, public advertisement or otherwise, of such
material, nonpublic information without the prior approval by the Company, its
Subsidiaries, or any of its or their respective officers, directors, employees
or agents. No Buyer shall have any liability to the Company, its Subsidiaries,
or any of its or their respective officers, directors, employees, stockholders
or agents for any such disclosure. To the extent that the Company delivers any
material, non-public information to a Buyer without such Buyer’s consent, the
Company hereby covenants and agrees that such Buyer shall not have any duty of
confidentiality with respect to, or a duty not to trade on the basis of, such
material, non-public information. Subject to the foregoing, neither the Company,
its Subsidiaries nor any Buyer shall issue any press releases or any other
public statements with respect to the transactions contemplated hereby;
provided, however, that the Company shall be entitled, without the prior
approval of any Buyer, to make any press release or other public disclosure with
respect to such transactions (i) in substantial conformity with the 8-K Filing
and contemporaneously therewith and (ii) as is required by applicable law and
regulations (provided that in the case of clause (i) each Buyer shall be
consulted by the Company in connection with any such press release or other
public disclosure prior to its release). Without the prior written consent of
any applicable Buyer, neither the Company nor any of its Subsidiaries or
affiliates shall disclose the name of such Buyer in any filing, announcement,
release or otherwise.

(j) Variable Securities; Dilutive Issuances. For so long as any Warrants remain
outstanding, the Company shall not, in any manner, issue or sell any rights,
warrants or options to subscribe for or purchase Common Stock or directly or
indirectly convertible into or exchangeable or exercisable for Common Stock at a
price which varies or may vary with the market price of the Common Stock,
including by way of one or more reset(s) to any fixed price unless the
conversion, exchange or exercise price of any such security cannot be less than
the then applicable Exercise Price (as defined in the Warrants) with respect to
the Common Stock into which any Warrant is exercisable. For so long as any
Warrants remain outstanding, the Company shall not, in any manner, enter into
agreement or affect any Dilutive Issuance (as defined in the Warrants) if the
effect of such Dilutive Issuance is to cause the Company to be required to issue
upon exercise of any Warrant any Common Stock in excess of that number of shares
of Common Stock which the Company may issue upon exercise of the Warrants
without breaching the Company’s obligations under the rules or regulations of
the Principal Market or any applicable Eligible Market, and for purposes of the
foregoing, without giving effect to (w) any limitations on exercise contained in
the Warrants and (y) any applicable Exercise Floor Price (as defined in the
Warrants) (the “Securities Limitations”). For so long as any Warrants are
outstanding, unless or until the Stockholder Approval (as defined below) has
been obtained, the Company shall not take any action if the effect of such
action would be to cause the Exercise Price to be reduced, and for purposes of
the foregoing, without giving effect to any Securities Limitations.

(k) Corporate Existence. So long as any Buyer beneficially owns any Securities,
the Company shall maintain its corporate existence and shall not be party to any

 

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Fundamental Transaction (as defined in the Warrants) unless the Company is in
compliance with the applicable provisions governing Fundamental Transactions set
forth in the Warrants.

(l) Reservation of Shares. So long as any Buyer owns any Securities, the Company
shall take all action necessary to at all times after the Stockholder Approval
(as defined below) have authorized, and reserved for the purpose of issuance, no
less than 100% of the maximum number of shares of Common Stock issuable upon
exercise of the Warrants then outstanding (without taking into account any
limitations on exercise of the Warrants set forth in the Warrants). If at any
time the number of shares of Common Stock authorized and reserved for issuance
is not sufficient to meet the Required Reserved Amount, the Company will
promptly take all corporate action necessary to authorize and reserve a
sufficient number of shares, including, without limitation, calling a special
meeting of stockholders to authorize additional shares to meet the Company’s
obligations under Section 3(c), in the case of an insufficient number of
authorized shares, obtain stockholder approval of an increase in such authorized
number of shares, and voting the management shares of the Company in favor of an
increase in the authorized shares of the Company to ensure that the number of
authorized shares is sufficient to meet the Required Reserved Amount.

(m) Conduct of Business. The business of the Company and its Subsidiaries shall
not be conducted in violation of any law, ordinance or regulation of any
governmental entity, except where such violations would not result, either
individually or in the aggregate, in a Material Adverse Effect.

(n) Additional Issuances of Securities.

(i) [Intentionally Omitted].

(ii) From the date hereof until the earlier of (i) the date ninety (90) days
after the date when all Registrable Securities (as defined in the Registration
Rights Agreement) have been registered and (ii) the date thirteen (13) months
after the Closing Date (the “Trigger Date”), the Company will not, directly or
indirectly, file any registration statement with the SEC other than the
Registration Statement (as defined in the Registration Rights Agreement) and
other than pre-effective amendments with respect to the Registration Statement
filed by the Company on Form S-3 on April 1, 2011. From the date hereof until
the Trigger Date, the Company will not, (i) directly or indirectly, offer, sell,
grant any option to purchase, or otherwise dispose of (or announce any offer,
sale, grant or any option to purchase or other disposition of) any of its or its
Subsidiaries’ equity or equity equivalent securities, including without
limitation any debt, preferred stock or other instrument or security that is, at
any time during its life and under any circumstances, convertible into or
exchangeable or exercisable for Common Stock or Common Stock Equivalents (any
such offer, sale, grant, disposition or announcement being referred to as a
“Subsequent Placement”), or (ii) be party to any solicitations, negotiations or
discussions with regard to the foregoing.

(iii) From the date hereof until the eighteen month anniversary of the Closing
Date, the Company will not, directly or indirectly, effect any Subsequent
Placement unless the Company shall have first complied with this
Section 4(n)(iii).

 

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(1) The Company shall deliver to each Buyer an irrevocable written notice
(the “Offer Notice”) of any proposed or intended issuance or sale or exchange
(the “Offer”) of the securities being offered (the “Offered Securities”) in a
Subsequent Placement, which Offer Notice shall (w) identify and describe the
Offered Securities, (x) describe the price and other terms upon which they are
to be issued, sold or exchanged, and the number or amount of the Offered
Securities to be issued, sold or exchanged, (y) identify the persons or entities
(if known) to which or with which the Offered Securities are to be offered,
issued, sold or exchanged and (z) offer to issue and sell to or exchange with
such Buyers thirty-five percent (35%) of the Offered Securities, allocated among
such Buyers (a) based on such Buyer’s pro rata portion of the Common Shares
purchased hereunder (the “Basic Amount”), and (b) with respect to each Buyer
that elects to purchase its Basic Amount, any additional portion of the Offered
Securities attributable to the Basic Amounts of other Buyers as such Buyer shall
indicate it will purchase or acquire should the other Buyers subscribe for less
than their Basic Amounts (the “Undersubscription Amount”), which process shall
be repeated until the Buyers shall have an opportunity to subscribe for any
remaining Undersubscription Amount.

(2) To accept an Offer, in whole or in part, such Buyer must deliver a written
notice to the Company prior to the end of the fifth (5th) Business Day after
such Buyer’s receipt of the Offer Notice (the “Offer Period”), setting forth the
portion of such Buyer’s Basic Amount that such Buyer elects to purchase and, if
such Buyer shall elect to purchase all of its Basic Amount, the
Undersubscription Amount, if any, that such Buyer elects to purchase (in either
case, the “Notice of Acceptance”). If the Basic Amounts subscribed for by all
Buyers are less than the total of all of the Basic Amounts, then each Buyer who
has set forth an Undersubscription Amount in its Notice of Acceptance shall be
entitled to purchase, in addition to the Basic Amounts subscribed for, the
Undersubscription Amount it has subscribed for; provided, however, that if the
Undersubscription Amounts subscribed for exceed the difference between the total
of all the Basic Amounts and the Basic Amounts subscribed for (the “Available
Undersubscription Amount”), each Buyer who has subscribed for any
Undersubscription Amount shall be entitled to purchase only that portion of the
Available Undersubscription Amount as the Basic Amount of such Buyer bears to
the total Basic Amounts of all Buyers that have subscribed for Undersubscription
Amounts, subject to rounding by the Company to the extent its deems reasonably
necessary. Notwithstanding anything to the contrary contained herein, if the
Company desires to modify or amend the terms and conditions of the Offer prior
to the expiration of the Offer Period, the Company may deliver to the Buyers a
new Offer Notice and the Offer Period shall expire on the fifth (5th) Business
Day after such Buyer’s receipt of such new Offer Notice.

(3) The Company shall have ten (10) Business Days from the expiration of the
Offer Period above to offer, issue, sell or exchange all or any part of such
Offered Securities as to which a Notice of Acceptance has not been given by the
Buyers (the “Refused Securities”) pursuant to a definitive

 

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agreement (the “Subsequent Placement Agreement”) but only to the offerees
described in the Offer Notice (if so described therein) and only upon terms and
conditions (including, without limitation, unit prices and interest rates) that
are not more favorable to the acquiring person or persons or less favorable to
the Company than those set forth in the Offer Notice and (ii) to publicly
announce (a) the execution of such Subsequent Placement Agreement, and
(b) either (x) the consummation of the transactions contemplated by such
Subsequent Placement Agreement or (y) the termination of such Subsequent
Placement Agreement, which shall be filed with the SEC on a Current Report on
Form 8-K with such Subsequent Placement Agreement and any documents contemplated
therein filed as exhibits thereto.

(4) In the event the Company shall propose to sell less than all the Refused
Securities (any such sale to be in the manner and on the terms specified in
Section 4(n)(iii)(3) above), then each Buyer may, at its sole option and in its
sole discretion, reduce the number or amount of the Offered Securities specified
in its Notice of Acceptance to an amount that shall be not less than the number
or amount of the Offered Securities that such Buyer elected to purchase pursuant
to Section 4(n)(iii)(2) above multiplied by a fraction, (i) the numerator of
which shall be the number or amount of Offered Securities the Company actually
proposes to issue, sell or exchange (including Offered Securities to be issued
or sold to Buyers pursuant to Section 4(n)(iii)(3) above prior to such
reduction) and (ii) the denominator of which shall be the original amount of the
Offered Securities. In the event that any Buyer so elects to reduce the number
or amount of Offered Securities specified in its Notice of Acceptance, the
Company may not issue, sell or exchange more than the reduced number or amount
of the Offered Securities unless and until such securities have again been
offered to the Buyers in accordance with Section 4(n)(iii)(1) above.

(5) Upon the closing of the issuance, sale or exchange of all or less than all
of the Refused Securities, the Buyers shall acquire from the Company, and the
Company shall issue to the Buyers, the number or amount of Offered Securities
specified in the Notices of Acceptance, as reduced pursuant to
Section 4(n)(iii)(3) above if the Buyers have so elected, upon the terms and
conditions specified in the Offer. The purchase by the Buyers of any Offered
Securities is subject in all cases to the preparation, execution and delivery by
the Company and the Buyers of a purchase agreement relating to such Offered
Securities reasonably satisfactory in form and substance to the Buyers and their
respective counsel, provided that a securities purchase agreement on terms as
favorable and no more burdensome than the terms hereof shall be deemed
reasonably satisfactory.

(6) Any Offered Securities not acquired by the Buyers or other persons in
accordance with Section 4(n)(iii)(3) above may not be issued, sold or exchanged
until they are again offered to the Buyers under the procedures specified in
this Agreement.

 

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(7) The Company and the Buyers agree that if any Buyer elects to participate in
the Offer, (x) neither the Subsequent Placement Agreement with respect to such
Offer nor any other transaction documents related thereto (collectively, the
“Subsequent Placement Documents”) shall include any term or provisions whereby
any Buyer shall be required to agree to any restrictions in trading as to any
securities of the Company owned by such Buyer prior to such Subsequent
Placement, and (y) any registration rights set forth in such Subsequent
Placement Documents shall be similar in all material respects to the
registration rights contained in the Registration Rights Agreement.

(8) Notwithstanding anything to the contrary in this Section 4(n) and unless
otherwise agreed to by the Buyers, the Company shall either confirm in writing
to the Buyers that the transaction with respect to the Subsequent Placement has
been abandoned or shall publicly disclose its intention to issue the Offered
Securities, in either case in such a manner such that the Buyers will not be in
possession of material non-public information, by the fifteenth (15th) Business
Day following delivery of the Offer Notice. If by the fifteenth (15th) Business
Day following delivery of the Offer Notice no public disclosure regarding a
transaction with respect to the Offered Securities has been made, and no notice
regarding the abandonment of such transaction has been received by the Buyers,
such transaction shall be deemed to have been abandoned and the Buyers shall not
be deemed to be in possession of any material, non-public information with
respect to the Company. Should the Company decide to pursue such transaction
with respect to the Offered Securities, the Company shall provide each Buyer
with another Offer Notice and each Buyer will again have the right of
participation set forth in this Section 4(n)(iii). The Company shall not be
permitted to deliver more than one such Offer Notice to the Buyers in any 60 day
period.

(iv) The restrictions contained in subsections (ii) and (iii) of this
Section 4(n) shall not apply in connection with the issuance of any Excluded
Securities. As used herein, “Excluded Securities” means: (i) any equity or
equity equivalent security of the Company issued or issuable, including any
shares of Common Stock issued or issuable upon conversion or exercise thereof,
in connection with any Approved Stock Plan, (ii) any shares of Common Stock
issued or issuable upon exercise of any Warrants, (iii) any shares of Common
Stock issued or issuable upon conversion of any Options or Convertible
Securities which are outstanding on the day immediately preceding the
Subscription Date, provided that the terms of such Options or Convertible
Securities are not amended, modified or changed on or after the Subscription
Date, (iv) the shares of Common Stock issuable to Novogen upon conversion of the
Series A Preferred Stock issued to Novogen pursuant to the Asset Purchase
Agreement on the terms set forth in the certificate of designations attached as
Exhibit A to the Asset Purchase Agreement and (v) any shares of Common Stock
issued or issuable upon exercise of the warrants to purchase Common Stock issued
to the Placement Agent on the Closing Date as set forth in Schedule 3(r). In
addition, the restrictions contained in subsection (ii) of this Section 4(n)
shall not apply, with respect to the issuance of up to an aggregate of
$4,000,000 of Common Stock and warrants to purchase Common Stock (an “Allowed
Subsequent Placement”), during the period beginning on (a) the later of (i) one
hundred twenty (120) days after the Closing Date and

 

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(ii) the date that is the earlier of (A) the date that all Common Shares have
been registered pursuant to an effective Registration Statement (as such terms
are defined in the Registration Rights Agreement) that is available for the
resale of all such Common Shares and (B) the date that all Common Shares can be
sold pursuant to Rule 144 without any restrictions or limitations, and ending on
(b) the Trigger Date.

(o) Public Information. At any time during the period commencing from the six
(6) month anniversary of the Closing Date and ending at such time that all of
the Securities, if a registration statement is not available for the resale of
all of the Securities may be sold without restriction or limitation pursuant to
Rule 144 and without the requirement to be in compliance with Rule 144(c)(1), if
the Company shall fail for any reason to satisfy the current public information
requirement under Rule 144(c) (a “Public Information Failure”) then, as partial
relief for the damages to any holder of Securities by reason of any such delay
in or reduction of its ability to sell the Securities (which remedy shall not be
exclusive of any other remedies available at law or in equity), the Company
shall pay to each such holder an amount in cash equal to one and a half percent
(1.5%) of the aggregate Purchase Price of such holder’s Securities on the day of
a Public Information Failure and on every thirtieth day (pro rated for periods
totaling less than thirty days) thereafter until the earlier of (i) the date
such Public Information Failure is cured and (ii) such time that such public
information is no longer required pursuant to Rule 144. The payments to which a
holder shall be entitled pursuant to this Section 4(o) are referred to herein as
“Public Information Failure Payments.” Public Information Failure Payments shall
be paid on the earlier of (I) the last day of the calendar month during which
such Public Information Failure Payments are incurred and (II) the third
Business Day after the event or failure giving rise to the Public Information
Failure Payments is cured. In the event the Company fails to make Public
Information Failure Payments in a timely manner, such Public Information Failure
Payments shall bear interest at the rate of 1.5% per month (prorated for partial
months) until paid in full.

(p) Stockholder Approval. The Company shall file with the SEC and provide each
stockholder of the Company with an information statement complying with the
requirements of the 1934 Act, in a form reasonably acceptable to the Buyers
after review by Schulte Roth & Zabel LLP at the expense of the Company,
informing such stockholders of the actions taken in accordance with the
Resolutions and the Stockholder Approval (each as defined below). In addition to
the foregoing, if required by any governmental or regulatory agency, the Company
shall provide each stockholder entitled to vote at a special or annual meeting
of the stockholders of the Company (a “Stockholder Meeting”), which shall be
called as promptly as practicable after the date hereof, but in no event later
than ninety (90) days after the Closing Date (the “Stockholder Meeting
Deadline”), a proxy statement, in a form reasonably acceptable to the Buyers
after review by Schulte Roth & Zabel LLP at the expense of the Company,
soliciting each such stockholder’s affirmative vote at the Stockholder Meeting
for approval of resolutions (the “Resolutions”) providing for (i) the issuance
of all of the Securities as described in the Transaction Documents in accordance
with applicable law, the provisions of the Bylaws and the rules and regulations
of the Principal Market and (ii) to remove any restrictions imposed by the
Principal Market on such Securities (such affirmative approval, whether obtained
by written consent or at a Stockholder Meeting, being referred to herein as the
“Stockholder Approval” and the date such approval is obtained, the “Stockholder
Approval Date”), and the Company shall use its reasonable best efforts to
solicit its stockholders’ approval of such Resolutions and to

 

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cause the Board of Directors of the Company to recommend to the stockholders
that they approve the Resolutions. The Company shall be obligated to seek to
obtain the Stockholder Approval as soon as practicable, but in no event later
than the Stockholder Meeting Deadline. If, despite the Company’s reasonable best
efforts, the Stockholder Approval is not obtained at the Stockholder Meeting,
the Company shall cause an additional Stockholder Meeting to be held each
calendar quarter thereafter until Stockholder Approval is obtained.

(q) Voting Agreement. The Company shall use its reasonable best efforts to
effectuate the transactions contemplated by the Voting Agreement, substantially
in the form attached hereto as Exhibit E (the “Voting Agreement”), executed by
the Company and Novogen (the “Principal Stockholder”). The Company shall not
amend or waive any provision of the Voting Agreement and shall enforce the
provisions of the Voting Agreement in accordance with its terms. If the
Principal Stockholder breaches any provisions of the Voting Agreement, the
Company shall promptly use its best efforts to seek specific performance of the
terms of the Voting Agreement in accordance with Section 4.02 thereof. In
addition, if the Company receives any notice from the Principal Stockholder
pursuant to the Voting Agreement, the Company shall promptly, but in no event
later than two (2) Business Days, deliver a copy of such notice to each Buyer.

(r) Lock-Up. The Company shall not amend or waive any provision of the Lock-Up
Agreements (defined below) except to extend the term of the lock-up period and
shall enforce the provisions of each Lock-Up Agreements in accordance with its
terms. If any officer, director or other Person that is a party to a Lock-Up
Agreement breaches any provision of such Lock-Up Agreement, the Company shall
promptly use its best efforts to seek specific performance of the terms of the
Lock-Up Agreement.

(s) Closing Documents. On or prior to fourteen (14) calendar days after the
Closing Date, the Company agrees to deliver, or cause to be delivered, to each
Buyer and Schulte Roth & Zabel LLP executed copies of the Transaction Documents,
Securities and other document required to be delivered to any party pursuant to
Section 7 hereof or otherwise.

5. REGISTER; TRANSFER AGENT INSTRUCTIONS.

(a) Register. The Company shall maintain at its principal executive offices (or
such other office or agency of the Company as it may designate by notice to each
holder of Securities), a register for the Common Stock and the Warrants in which
the Company shall record the name and address of the Person in whose name the
Common Stock and the Warrants have been issued (including the name and address
of each transferee) and the Warrant Shares issuable upon exercise of the
Warrants held by such Person. The Company shall keep the register open and
available at all times during business hours for inspection of any Buyer or its
legal representatives.

(b) Transfer Agent Instructions. The Company shall issue irrevocable
instructions to its transfer agent, and any subsequent transfer agent, to issue
certificates or credit shares to the applicable balance accounts at the DTC,
registered in the name of each Buyer or its respective nominee(s), for the
Common Shares issued at the Closing and the Warrant Shares upon exercise of the
Warrants in such amounts as specified from time to time by each Buyer to

 

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the Company upon exercise of the Warrants in the form of Exhibit G attached
hereto (the “Irrevocable Transfer Agent Instructions”). The Company warrants
that no instruction other than the Irrevocable Transfer Agent Instructions
referred to in this Section 5(b), and stop transfer instructions to give effect
to Section 2(f) hereof, 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 as and to the extent provided in this Agreement and the
other Transaction Documents. If a Buyer effects a sale, assignment or transfer
of the Securities in accordance with Section 2(f), the Company shall permit the
transfer and shall promptly instruct its transfer agent to issue one or more
certificates or credit shares to the applicable balance accounts at DTC in such
name and in such denominations as specified by such Buyer to effect such sale,
transfer or assignment. In the event that such sale, assignment or transfer
involves the Warrant Shares sold, assigned or transferred pursuant to an
effective registration statement or pursuant to Rule 144, the transfer agent
shall issue such Securities to the Buyer, assignee or transferee, as the case
may be, without any restrictive legend. The Company acknowledges that a breach
by it of its obligations hereunder will cause irreparable harm to a Buyer.
Accordingly, the Company acknowledges that the remedy at law for a breach of its
obligations under this Section 5(b) will be inadequate and agrees, in the event
of a breach or threatened breach by the Company of the provisions of this
Section 5(b), that a Buyer shall be entitled, in addition to all other available
remedies, to an order and/or 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.

6. CONDITIONS TO THE COMPANY’S OBLIGATION TO SELL.

The obligation of the Company hereunder to issue and sell the Common Shares and
Warrants to each Buyer at the Closing is subject to the satisfaction, at or
before the Closing Date, of each of the following conditions, 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 by providing each Buyer with prior
written notice thereof:

(i) Such Buyer shall have executed each of the Transaction Documents to which it
is a party and delivered the same to the Company.

(ii) Such Buyer shall have delivered to the Company the Purchase Price (less, in
the case of Hudson Bay, the amounts withheld pursuant to Section 4(g)) for the
Common Shares and the related Warrants being purchased by such Buyer at the
Closing by wire transfer of immediately available funds pursuant to the wire
instructions provided by the Company.

(iii) The representations and warranties of such Buyer shall be true and correct
as of the date when made and as of the Closing Date as though made at that time
(except for representations and warranties that speak as of a specific date
which shall be true and correct as of such specified date), and such Buyer 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 such Buyer at or prior to the Closing Date.

 

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(iv) The Buyers shall have delivered to the Company such other documents
relating to the transactions contemplated by this Agreement as the Company or
its counsel may reasonably request.

7. CONDITIONS TO EACH BUYER’S OBLIGATION TO PURCHASE.

The obligation of each Buyer hereunder to purchase the Common Shares and the
Warrants at the Closing is subject to the satisfaction, at or before the Closing
Date, of each of the following conditions, provided that these conditions are
for each Buyer’s sole benefit and may be waived by such Buyer at any time in its
sole discretion by providing the Company with prior written notice thereof:

(i) The Company shall have duly executed and delivered to such Buyer (A) each of
the Transaction Documents, (B) the Common Shares (allocated in such amounts as
such Buyer shall request) and (C) the related Warrants (allocated in such
amounts as such Buyer shall request) being purchased by such Buyer at the
Closing pursuant to this Agreement.

(ii) Such Buyer and the Placement Agent shall have received the opinion of
Morgan, Lewis & Bockius LLP, the Company’s outside counsel, dated as of the
Closing Date, in substantially the form of Exhibit H attached hereto.

(iii) The Company shall have delivered to such Buyer a copy of the Irrevocable
Transfer Agent Instructions, in the form of Exhibit G attached hereto, which
instructions shall have been delivered to and acknowledged in writing by the
Company’s transfer agent.

(iv) The Company shall have delivered to such Buyer a certificate evidencing the
incorporation and good standing of the Company and each of its Subsidiaries in
such entity’s jurisdiction of formation issued by the Secretary of State (or
comparable office) of such jurisdiction, as of a date within ten (10) days of
the Closing Date.

(v) The Company shall have delivered to such Buyer a certificate evidencing the
Company’s qualification as a foreign corporation and good standing issued by the
Secretary of State (or comparable office) of each jurisdiction in which the
Company conducts business, as of a date within ten (10) days of the Closing
Date.

(vi) The Company shall have delivered to such Buyer a certified copy of the
Certificate of Incorporation as certified by the Secretary of State (or
comparable office) of the State of Delaware within ten (10) days of the Closing
Date.

(vii) The Company shall have delivered to such Buyer a certificate, executed by
the Secretary of the Company and dated as of the Closing Date, as to (i) the
resolutions consistent with Section 3(b) as adopted by the Company’s Board of
Directors in a form reasonably acceptable to such Buyer, (ii) the Certificate of
Incorporation and (iii) the Bylaws, each as in effect at the Closing, in the
form attached hereto as Exhibit I.

 

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(viii) The representations and warranties of the Company shall be true and
correct as of the date when made and as of the Closing Date as though made at
that time (except for representations and warranties that speak as of a specific
date which shall be true and correct as of such specified date) and the Company
shall have performed, satisfied and complied in all respects with the covenants,
agreements and conditions required by the Transaction Documents to be performed,
satisfied or complied with by the Company at or prior to the Closing Date. Such
Buyer shall have received a certificate, executed by the Chief Executive Officer
of the Company, dated as of the Closing Date, to the foregoing effect and as to
such other matters as may be reasonably requested by such Buyer in the form
attached hereto as Exhibit J.

(ix) The Company shall have delivered to each Buyer a lock-up agreement in the
form attached hereto as Exhibit K, executed and delivered by the Company and
each officer and director of the Company and the Principal Stockholder (the
“Lock-Up Agreements”).

(x) The Company shall have delivered to such Buyer a letter from the Company’s
transfer agent certifying the number of shares of Common Stock outstanding as of
a date within five days of the Closing Date.

(xi) The Common Stock (I) shall be designated for quotation or listed on the
Principal Market and (II) shall not have been suspended, as of the Closing Date,
by the SEC or the Principal Market from trading on the Principal Market nor
shall suspension by the SEC or the Principal Market have been threatened, as of
the Closing Date, either (A) in writing by the SEC or the Principal Market or
(B) by falling below the minimum listing maintenance requirements of the
Principal Market.

(xii) The Company shall have obtained all governmental, regulatory or third
party consents and approvals, if any, necessary for the sale of the Securities.

(xiii) The Voting Agreement shall have been executed and delivered to such Buyer
by the Company and the Principal Stockholder.

(xiv) The Company shall have delivered to such Buyer such other documents
relating to the transactions contemplated by this Agreement as such Buyer or its
counsel may reasonably request.

 

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8. TERMINATION. In the event that the Closing shall not have occurred with
respect to a Buyer on or before May 20, 2011 due to the Company’s or such
Buyer’s failure to satisfy the conditions set forth in Sections 6 and 7 above
(and the nonbreaching party’s failure to waive such unsatisfied condition(s)),
the nonbreaching party shall have the option to terminate this Agreement with
respect to such breaching party at the close of business on such date without
liability of any party to any other party; provided, however, that if this
Agreement is terminated pursuant to this Section 8, the Company shall remain
obligated to reimburse the non-breaching Buyers for the expenses described in
Section 4(g) above.

9. MISCELLANEOUS.

(a) Governing Law; Jurisdiction; Jury Trial. All questions concerning the
construction, validity, enforcement and interpretation of this Agreement shall
be governed by the internal laws of the State of New York, without giving effect
to any choice of law or conflict of law provision or rule (whether of the State
of New York or any other jurisdictions) that would cause the application of the
laws of any jurisdictions other than the State of New York. Each party hereby
irrevocably submits to the exclusive jurisdiction of the state and federal
courts sitting in The City of New York, Borough of Manhattan, for the
adjudication of any dispute hereunder or in connection herewith or with any
transaction contemplated hereby or discussed herein, and hereby irrevocably
waives, and agrees not to assert in any suit, action or proceeding, any claim
that it is not personally subject to the jurisdiction of any such court, that
such suit, action or proceeding is brought in an inconvenient forum or that the
venue of such suit, action or proceeding is improper. Each party hereby
irrevocably waives personal service of process and consents to process being
served in any such suit, action or proceeding by mailing a copy thereof to such
party at the address for such notices to it under this Agreement and agrees that
such service shall constitute good and sufficient service of process and notice
thereof. Nothing contained herein shall be deemed to limit in any way any right
to serve process in any manner permitted by law. EACH PARTY HEREBY IRREVOCABLY
WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE
ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF
THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.

(b) Counterparts. This Agreement may be executed in two or more identical
counterparts, all of which 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; provided that a facsimile signature shall be
considered due execution and shall be binding upon the signatory thereto with
the same force and effect as if the signature were an original, not a facsimile
signature.

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

(d) Severability. If any provision of this Agreement is prohibited by law or
otherwise determined to be invalid or unenforceable by a court of competent
jurisdiction, the provision that would otherwise be prohibited, invalid or
unenforceable shall be deemed amended to apply to the broadest extent that it
would be valid and enforceable, and the invalidity or

 

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unenforceability of such provision shall not affect the validity of the
remaining provisions of this Agreement so long as this Agreement as so modified
continues to express, without material change, the original intentions of the
parties as to the subject matter hereof and the prohibited nature, invalidity or
unenforceability of the provision(s) in question does not substantially impair
the respective expectations or reciprocal obligations of the parties or the
practical realization of the benefits that would otherwise be conferred upon the
parties. The parties will endeavor in good faith negotiations to replace the
prohibited, invalid or unenforceable provision(s) with a valid provision(s), the
effect of which comes as close as possible to that of the prohibited, invalid or
unenforceable provision(s).

(e) Entire Agreement; Amendments. This Agreement and the other Transaction
Documents supersede all other prior oral or written agreements between the
Buyers, the Company, their affiliates and Persons acting on their behalf with
respect to the matters discussed herein, and this Agreement, the other
Transaction Documents and the instruments referenced herein and therein contain
the entire understanding of the parties with respect to the matters covered
herein and therein and, except as specifically set forth herein or therein,
neither the Company nor any Buyer makes any representation, warranty, covenant
or undertaking with respect to such matters. No provision of this Agreement may
be amended or waived in a manner that is adverse to any Buyer other than by an
instrument in writing signed by the Company and the Required Holders. No
consideration shall be offered or paid to any Person to amend or consent to a
waiver or modification of any provision of the Transaction Documents unless the
same consideration also is offered to all of the parties to the Transaction
Documents. The Company has not, directly or indirectly, made any agreements with
any Buyers relating to the terms or conditions of the transactions contemplated
by the Transaction Documents except as set forth in the Transaction Documents.
Without limiting the foregoing, the Company confirms that, except as set forth
in this Agreement, no Buyer has made any commitment or promise or has any other
obligation to provide any financing to the Company or otherwise.

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

If to the Company:

Marshall Edwards Inc.

11975 El Camino Real

Suite 101

San Diego, CA 92130

Telephone:        (858) 792-6300

Facsimile:         (858) 792-5406

Attention:          Secretary

 

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With a copy to:

Morgan, Lewis & Bockius LLP

101 Park Avenue

New York, NY 10178

Telephone:        212-309-6000

Facsimile:          212-309-6001

Attention:          Steven Navarro

If to the Transfer Agent:

Computershare Inc.

350 Indiana Street, Suite 750

Golden, CO 80401

Telephone:        (303) 262-0678

Facsimile:          (303) 262-0610

Attention:          Christine Abbey

If to a Buyer, to its address and facsimile number set forth on the Schedule of
Buyers, with copies to such Buyer’s representatives as set forth on the Schedule
of Buyers,

with a copy (for informational purposes only) to:

Schulte Roth & Zabel LLP

919 Third Avenue

New York, New York 10022

Telephone:          (212) 756-2000

Facsimile:           (212) 593-5955

Attention:            Eleazer N. Klein, Esq.

E-mail:                eleazer.klein@srz.com

or to such other address and/or facsimile number and/or to the attention of such
other Person as the recipient party has specified by written notice given to
each other party five (5) days prior to the effectiveness of such change.
Written confirmation of receipt (A) given by the recipient of such notice,
consent, waiver or other communication, (B) mechanically or electronically
generated by the sender’s facsimile machine containing the time, date, recipient
facsimile number and an image of the first page of such transmission or
(C) provided by an overnight courier service shall be rebuttable evidence of
personal service, receipt by facsimile or receipt from an overnight courier
service in accordance with clause (i), (ii) or (iii) above, respectively.

(g) Successors and Assigns. This Agreement shall be binding upon and inure to
the benefit of the parties and their respective successors and assigns,
including any purchasers of the Common Shares and the Warrants. The Company
shall not assign this Agreement or any rights or obligations hereunder without
the prior written consent of Required Holders, including by way of a Fundamental
Transaction (unless the Company is in compliance with the applicable

 

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provisions governing Fundamental Transactions set forth in the Warrants). A
Buyer may assign some or all of its rights hereunder to any Person to whom such
Buyer assigns or transfers any Securities without the consent of the Company, in
which event such assignee shall be deemed to be a Buyer hereunder with respect
to such assigned rights; provided such Person agrees in writing to be bound by
the Transaction Documents.

(h) No Third 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.

(i) Survival. Unless this Agreement is terminated under Section 8, the
representations and warranties of the Company and the Buyers contained in
Sections 2 and 3, and the agreements and covenants set forth in Sections 4, 5
and 9 shall survive the Closing. Each Buyer shall be responsible only for its
own representations, warranties, agreements and covenants hereunder.

(j) Further 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 any 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.

(k) Indemnification.

(i) In consideration of each Buyer’s execution and delivery of the Transaction
Documents and acquiring the Securities thereunder and in addition to all of the
Company’s other obligations under the Transaction Documents, the Company shall
defend, protect, indemnify and hold harmless each Buyer and each other holder of
the Securities and all of their stockholders, partners, members, officers,
directors, employees and direct or indirect investors and any of the foregoing
Persons’ agents or other representatives (including, without limitation, those
retained in connection with the transactions contemplated by this Agreement)
(collectively, the “Indemnitees”) from and against any and all actions, causes
of action, suits, claims, losses, costs, penalties, fees, liabilities and
damages, and expenses in connection therewith (irrespective of whether any such
Indemnitee is a party to the action for which indemnification hereunder is
sought), and including reasonable attorneys’ fees and disbursements (the
“Indemnified Liabilities”), incurred by any Indemnitee as a result of, or
arising out of, or relating to (a) any misrepresentation or breach of any
representation or warranty made by the Company in the Transaction Documents or
any other certificate, instrument or document contemplated hereby or thereby,
(b) any breach of any covenant, agreement or obligation of the Company contained
in the Transaction Documents or any other certificate, instrument or document
contemplated hereby or thereby or (c) any cause of action, suit or claim brought
or made against such Indemnitee by a third party (including for these purposes a
derivative action brought on behalf of the Company) and arising out of or
resulting from (i) the execution, delivery, performance or enforcement of the
Transaction Documents or any other certificate, instrument or document
contemplated hereby or thereby, (ii) any transaction financed or to be financed
in whole or in part, directly or indirectly, with the proceeds of the issuance
of the Securities, (iii) any disclosure properly made by such Buyer pursuant to
Section 4(i), or (iv) the

 

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status of such Buyer or holder of the Securities as an investor in the Company
pursuant to the transactions contemplated by the Transaction Documents. To the
extent that the foregoing undertaking by the Company may be unenforceable for
any reason, the Company shall make the maximum contribution to the payment and
satisfaction of each of the Indemnified Liabilities that is permissible under
applicable law.

(ii) Promptly after receipt by an Indemnitee under this Section 9(k) of notice
of the commencement of any action or proceeding (including any governmental
action or proceeding) involving an Indemnified Liability, such Indemnitee shall,
if a claim for indemnification in respect thereof is to be made against any
indemnifying party under this Section 9(k), deliver to the indemnifying party a
written notice of the commencement thereof, and the indemnifying party shall
have the right to participate in, and, to the extent the indemnifying party so
desires, jointly with any other indemnifying party similarly noticed, to assume
control of the defense thereof with counsel mutually satisfactory to the
indemnifying party and the Indemnitee; provided, however, that an Indemnitee
shall have the right to retain its own counsel with the fees and expenses of not
more than one counsel for such Indemnitee to be paid by the indemnifying party,
if, in the reasonable opinion of the Indemnitee, the representation by such
counsel of the Indemnitee and the indemnifying party would be inappropriate due
to actual or potential differing interests between such Indemnitee and any other
party represented by such counsel in such proceeding. Legal counsel referred to
in the immediately preceding sentence shall be selected by the Buyers holding at
least a majority of the Securities issued and issuable hereunder. The Indemnitee
shall cooperate fully with the indemnifying party in connection with any
negotiation or defense of any such action or Indemnified Liabilities by the
indemnifying party and shall furnish to the indemnifying party all information
reasonably available to the Indemnitee that relates to such action or
Indemnified Liabilities. The indemnifying party shall keep the Indemnitee fully
apprised at all times as to the status of the defense or any settlement
negotiations with respect thereto. No indemnifying party shall be liable for any
settlement of any action, claim or proceeding effected without its prior written
consent, provided, however, that the indemnifying party shall not unreasonably
withhold, delay or condition its consent. No indemnifying party shall, without
the prior written consent of the Indemnitee, which consent shall not be
unreasonably withheld conditioned or delayed, consent to entry of any judgment
or enter into any settlement or other compromise which (i) does not include as
an unconditional term thereof the giving by the claimant or plaintiff to such
Indemnitee of a release from all liability in respect to such Indemnified
Liabilities or litigation, (ii) requires any admission of wrongdoing by such
Indemnitee, or (iii) obligates or requires an Indemnitee to take, or refrain
from taking, any action. Following indemnification as provided for hereunder,
the indemnifying party shall be subrogated to all rights of the Indemnitee with
respect to all third parties, firms or corporations relating to the matter for
which indemnification has been made.

(iii) The indemnification required by this Section 9(k) shall be made by
periodic payments of the amount thereof during the course of the investigation
or defense, as and when bills are received or Indemnified Liabilities are
incurred.

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

 

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(l) No Strict Construction. The language used in this Agreement will be deemed
to be the language chosen by the parties to express their mutual intent, and no
rules of strict construction will be applied against any party.

(m) Remedies. Each Buyer and each holder of the Securities shall have all rights
and remedies set forth in the Transaction Documents and all rights and remedies
which such holders have been granted at any time under any other agreement or
contract and all of the rights which such holders have under any law. Any Person
having any rights under any provision of this Agreement shall be entitled to
enforce such rights specifically (without posting a bond or other security), to
recover damages by reason of any breach of any provision of this Agreement and
to exercise all other rights granted by law. Furthermore, the Company recognizes
that in the event that it fails to perform, observe, or discharge any or all of
its obligations under the Transaction Documents, any remedy at law may prove to
be inadequate relief to the Buyers. The Company therefore agrees that the Buyers
shall be entitled to seek temporary and permanent injunctive relief in any such
case without the necessity of proving actual damages and without posting a bond
or other security.

(n) Rescission and Withdrawal Right. Notwithstanding anything to the contrary
contained in (and without limiting any similar provisions of) the Transaction
Documents, whenever any Buyer exercises a right, election, demand or option
under a Transaction Document and the Company does not timely perform its related
obligations within the periods therein provided, then such Buyer may rescind or
withdraw, in its sole discretion from time to time upon written notice to the
Company, any relevant notice, demand or election in whole or in part without
prejudice to its future actions and rights.

(o) Payment Set Aside. To the extent that the Company makes a payment or
payments to the Buyers hereunder or pursuant to any of the other Transaction
Documents or the Buyers enforce or exercise their rights hereunder or
thereunder, and such payment or payments or the proceeds of such enforcement or
exercise or any part thereof are subsequently invalidated, declared to be
fraudulent or preferential, set aside, recovered from, disgorged by or are
required to be refunded, repaid or otherwise restored to the Company, a trustee,
receiver or any other Person under any law (including, without limitation, any
bankruptcy law, foreign, state or federal law, common law or equitable cause of
action), then to the extent of any such restoration the obligation or part
thereof originally intended to be satisfied shall be revived and continued in
full force and effect as if such payment had not been made or such enforcement
or setoff had not occurred.

(p) Independent Nature of Buyers’ Obligations and Rights. The obligations of
each Buyer under any Transaction Document are several and not joint with the
obligations of any other Buyer, and no Buyer shall be responsible in any way for
the performance of the obligations of any other Buyer under any Transaction
Document. Nothing contained herein or in any other Transaction Document, and no
action taken by any Buyer pursuant hereto or thereto, shall be deemed to
constitute the Buyers as, and the Company acknowledges that the Buyers do not so
constitute, a partnership, an association, a joint venture or any other kind of
entity, or create a presumption that the Buyers are in any way acting in concert
or as a group, and the Company shall not assert any such claim with respect to
such obligations or the transactions contemplated by the Transaction Documents
and the Company acknowledges that the Buyers are not acting in

 

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concert or as a group with respect to such obligations or the transactions
contemplated by the Transaction Documents. The Company acknowledges and each
Buyer confirms that it has independently participated in the negotiation of the
transaction contemplated hereby with the advice of its own counsel and advisors.
Each Buyer shall be entitled to independently protect and enforce its rights,
including, without limitation, the rights arising out of this Agreement or out
of any other Transaction Documents, and it shall not be necessary for any other
Buyer to be joined as an additional party in any proceeding for such purpose.

(q) Currency. Unless otherwise indicated, all dollar amounts referred to in this
Agreement are in United States Dollars. All amounts owing under this Agreement
or any Transaction Document shall be paid in US dollars.

10. CERTAIN DEFINITIONS. The following terms shall have the following meanings:

(a) “Approved Stock Plan” means any employee benefit plan or other issuance,
employment agreement or option grant or similar agreement which has been
approved by the Board of Directors of the Company, pursuant to which the
Company’s securities may be issued to any employee, officer or director for
services provided to the Company.

(b) “Bloomberg” means Bloomberg Financial Markets.

(c) “Closing Bid Price” and “Closing Sale Price” means, for any security as of
any date, the last closing bid price and last closing trade price, respectively,
for such security on the Principal Market, as reported by Bloomberg, or, if the
Principal Market begins to operate on an extended hours basis and does not
designate the closing bid price or the closing trade price, as the case may be,
then the last bid price or the last trade price, respectively, of such security
prior to 4:00:00 p.m., New York time, as reported by Bloomberg, or, if the
Principal Market is not the principal securities exchange or trading market for
such security, the last closing bid price or last trade price, respectively, of
such security on the principal securities exchange or trading market where such
security is listed or traded as reported by Bloomberg, or if the foregoing do
not apply, the last closing bid price or last trade price, respectively, of such
security in the over-the-counter market on the electronic bulletin board for
such security as reported by Bloomberg, or, if no closing bid price or last
trade price, respectively, is reported for such security by Bloomberg, the
average of the bid prices, or the ask prices, respectively, of any market makers
for such security as reported in the “pink sheets” by Pink Sheets LLC (formerly
the National Quotation Bureau, Inc.). If the Closing Bid Price or the Closing
Sale Price cannot be calculated for a security on a particular date on any of
the foregoing bases, the Closing Bid Price or the Closing Sale Price, as the
case may be, of such security on such date shall be the fair market value as
mutually determined by the Company and the Required Holders. If the Company and
the Required Holders are unable to agree upon the fair market value of such
security, then such dispute shall be resolved pursuant to Section 1(b)(vi). All
such determinations to be appropriately adjusted for any stock dividend, stock
split, stock combination or other similar transaction during the applicable
calculation period.

(d) “Convertible Securities” means any stock or securities (other than Options)
directly or indirectly convertible into or exercisable or exchangeable for
shares of Common Stock.

 

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(e) “Common Stock Equivalents” means, collectively, Options and Convertible
Securities.

(f) “Eligible Market” means the Principal Market, The NASDAQ Global Market, The
NASDAQ Global Select Market, The New York Stock Exchange, Inc., or The NYSE
Amex.

(g) “Fundamental Transaction” means that (A) the Company shall, directly or
indirectly, in one or more related transactions, (i) consolidate or merge with
or into (whether or not the Company is the surviving corporation) another
Person, or (ii) sell, assign, transfer, convey or otherwise dispose of all or
substantially all of the properties or assets of the Company to another Person,
or (iii) consummate a stock purchase agreement or other business combination
(including, without limitation, a reorganization, recapitalization, spin-off or
scheme of arrangement) with another Person whereby such other Person acquires
more than the 50% of the outstanding shares of Common Stock (not including any
shares of Common Stock held by the other Person or other Persons making or party
to, or associated or affiliated with the other Persons making or party to, such
stock purchase agreement or other business combination), or (iv) reorganize,
recapitalize or reclassify its Common Stock, (B) a Person makes a purchase,
tender or exchange offer that is accepted by the holders of more than the 50% of
the outstanding shares of Common Stock (not including any shares of Common Stock
held by the Person or Persons making or party to, or associated or affiliated
with the Persons making or party to, such purchase, tender or exchange offer) or
(C) any “person” or “group” (as these terms are used for purposes of Sections
13(d) and 14(d) of the 1934 Act) is or shall become the “beneficial owner” (as
defined in Rule 13d-3 under the 1934 Act), directly or indirectly, of (x) 50% of
the aggregate ordinary voting power represented by issued and outstanding shares
of Common Stock, (y) 50% of the aggregate ordinary voting power represented by
issued and outstanding shares of Common Stock not beneficially owned by such
Person on the date of this Agreement or (z) a percentage of the aggregate
ordinary voting power represented by issued and outstanding shares of Common
Stock or other equity securities of the Company sufficient to allow such Person
to effect a statutory short form merger or other transaction requiring other
stockholders of the Company to surrender their shares of Common Stock without
approval of the stockholders of the Company.

(h) “Options” means any rights, warrants or options to subscribe for or purchase
shares of Common Stock or Convertible Securities.

(i) “Parent Entity” of a Person means an entity that, directly or indirectly,
controls the applicable Person and whose common shares or common stock or
equivalent equity security is quoted or listed on an Eligible Market, or, if
there is more than one such Person or Parent Entity, the Person or Parent Entity
with the largest public market capitalization as of the date of consummation of
the Fundamental Transaction.

(j) “Successor Entity” means the Person (or, if so elected by the Required
Holders, the Parent Entity) formed by, resulting from or surviving any
Fundamental Transaction or the Person with which such Fundamental Transaction
shall have been entered into.

(k) “Weighted Average Price” means, for any security as of any date, the dollar
volume-weighted average price for such security on the Principal Market during
the period

 

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beginning at 9:30:01 a.m., New York time (or such other time as the Principal
Market publicly announces is the official open of trading), and ending at
4:00:00 p.m., New York time (or such other time as the Principal Market publicly
announces is the official close of trading), as reported by Bloomberg through
its “Volume at Price” function or, if the foregoing does not apply, the dollar
volume-weighted average price of such security in the over-the-counter market on
the electronic bulletin board for such security during the period beginning at
9:30:01 a.m., New York time (or such other time as the Principal Market publicly
announces is the official open of trading), and ending at 4:00:00 p.m., New York
time (or such other time as the Principal Market publicly announces is the
official close of trading), as reported by Bloomberg, or, if no dollar
volume-weighted average price is reported for such security by Bloomberg for
such hours, the average of the highest closing bid price and the lowest closing
ask price of any of the market makers for such security as reported in the “pink
sheets” by Pink Sheets LLC (formerly the National Quotation Bureau, Inc.). If
the Weighted Average Price cannot be calculated for a security on a particular
date on any of the foregoing bases, the Weighted Average Price of such security
on such date shall be the fair market value as mutually determined by the
Company and the Required Holders. If the Company and the Required Holders are
unable to agree upon the fair market value of such security, then such dispute
shall be resolved pursuant to Section 1(b)(vi). All such determinations shall be
appropriately adjusted for any stock dividend, stock split, stock combination or
other similar transaction during the applicable calculation period.

[Signature Page Follows]

 

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IN WITNESS WHEREOF, each Buyer and the Company have caused their respective
signature page to this Amended and Restated Securities Purchase Agreement to be
duly executed as of the date first written above.

 

COMPANY: MARSHALL EDWARDS, INC. By:  

/s/ Daniel P. Gold

  Name: Daniel P. Gold   Title: Chief Executive Officer

[Signature Page to Amended and Restated Securities Purchase Agreement]

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, each Buyer and the Company have caused their respective
signature page to this Amended and Restated Securities Purchase Agreement to be
duly executed as of the date first written above.

 

BUYERS: HUDSON BAY MASTER FUND LTD. By: Hudson Bay Capital Management LP, as its
Investment Manager By:  

/s/ Yoav Roth

  Name: Yoav Roth   Title: Authorized Signatory

[Signature Page to Amended and Restated Securities Purchase Agreement]

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, each Buyer and the Company have caused their respective
signature page to this Amended and Restated Securities Purchase Agreement to be
duly executed as of the date first written above.

 

BUYERS: CAPITAL VENTURES INTERNATIONAL By:  

/s/ Martin Kobinger

  Name: Martin Kobinger   Title: Investment Manager

[Signature Page to Amended and Restated Securities Purchase Agreement]

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SCHEDULE OF BUYERS

 

(1)    (2)    (3)    (4)    (5)    (6)    (7)

Buyer

  

Address and

Facsimile Number

   Number of
Common Shares    Maximum
Number of Series
A Warrant Shares    Maximum
Number of Series
B Warrant Shares    Purchase Price   

Legal Representative’s
Address and Facsimile

Number

Hudson Bay Master Fund Ltd.   

120 Broadway, 40th Floor

New York, New York 10271

Attention: Yoav Roth

              George Antonopolous

Facsimile: 646-214-7946

Telephone: 212-571-1244

Residence: Cayman Islands

E-mail: investments@hudsonbaycapital.com

operations@hudsonbaycapital.com

   417,609    1,125,282    1,082,767    $556,672.80   

Schulte Roth & Zabel LLP

919 Third Avenue

New York, New York 10022

Attention: Eleazer Klein, Esq.

Facsimile: (212) 593-5955

Telephone: (212) 756-2376

Capital Ventures International   

c/o Heights Capital Management

101 California Street Suite 3250

San Francisco, CA 94111

Attention: Martin Kobinger and Sam Winer

Facsimile: 415-403-6595

Telephone: 415-403-6550

Residence: Cayman Islands

Email: kobinger@sig.com;

winer@sig.com

   417,608    1,125,282    1,082,767    $556,671.46   

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EXHIBITS

 

Exhibit A    Form of Series A Warrant Exhibit B    Form of Series B Warrant
Exhibit C    Form of Series C Warrant Exhibit D    Form of Registration Rights
Agreement Exhibit E    Form of Voting Agreement Exhibit G    Form of Irrevocable
Transfer Agent Instructions Exhibit H    Form of Opinion of Company Counsel
Exhibit I    Form of Secretary’s Certificate Exhibit J    Form of Officer’s
Certificate Exhibit K    Form of Lock Up Agreement

SCHEDULES

 

Schedule 3(a)    Subsidiaries Schedule 3(k)    SEC Documents Schedule 3(l)   
Absence of Certain Changes Schedule 3(n)    Conduct of Business; Regulatory
Permits Schedule 3(r)    Equity Capitalization Schedule 3(s)    Indebtedness and
Other Contracts Schedule 3(t)    Absence of Litigation Schedule 3(x)   
Intellectual Property Rights Schedule 3(nn)    Stock Option Plans