Exhibit 10.1

Execution

SECURITIES PURCHASE AGREEMENT

THIS SECURITIES PURCHASE AGREEMENT (the “Agreement”), dated as of February 11,
2013, is by and among Unilife Corporation, a Delaware corporation with offices
located at 250 Cross Farm Lane, York, Pennsylvania 17406 (the “Company”), and
each of the investors listed on the Schedule of Buyers attached hereto
(individually, a “Buyer” and collectively, the “Buyers”) (provided that if only
one Buyer is listed on the Schedule of Buyers, then all references to “Buyers”
hereunder shall be treated as if a reference to a single “Buyer” hereunder).

BACKGROUND

The Company and each Buyer desire to enter into this transaction to purchase the
Common Shares and Warrants set forth herein pursuant to a Registration Statement
on Form S-3 (Registration Number 333-173195), which provides for the
registration of an offering of, among other things, (i) shares of the Company’s
common stock, $0.01 par value per share, (the “Common Stock”) (ii) warrants to
purchase Common Stock and (iii) units consisting of a combination of shares of
Common Stock and warrants to purchase shares of Common Stock (the “Registration
Statement”), which Registration Statement has been declared effective in
accordance with the Securities Act of 1933, as amended (the “1933 Act”), by the
United States Securities and Exchange Commission (the “SEC”).

In the United States, the Common Stock is listed on the Nasdaq Global Market
(the “Principal Market”) and the Australian Securities Exchange (the “ASX”).

The parties hereto each understand that this Securities Purchase Agreement and
the purchase and sale contemplated hereby is unconditional and binding on all
parties hereto.

TERMS

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

 

1. PURCHASE AND SALE OF COMMON SHARES AND WARRANTS.

(a) Common Shares and Warrants. The Company shall issue and sell to each Buyer,
and each Buyer severally, but not jointly, shall purchase from the Company on
the Closing Date, such number of units (the “Units”) consisting of (i) one share
of Common Stock (the aggregate amount for all Buyers shall be collectively
referred to herein as the “Common Shares”) and (ii) a warrant to purchase
one-third of a share of Common Stock (each a “Warrant” and all shares of Common
Stock acquirable upon exercise or exchange of the Warrants, collectively, the
“Warrant Shares”), as evidenced by the warrant certificate in the form attached
hereto as Exhibit A as is set forth for such Buyer on the Schedule of Buyers.
Notwithstanding that the Units are being purchased hereunder, the Common Shares
and Warrants underlying each Unit shall be immediately separable and shall be
independent from one another. The Common Shares, the Warrants and the Warrant
Shares are collectively referred to herein as the “Securities.”

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(b) Closing. The closing and settlement (the “Closing”) of the purchase of the
Units by the Buyers shall occur at the offices of Greenberg Traurig, LLP, 77 W.
Wacker Drive, Suite 3100, Chicago, Illinois 60601 on the date hereof and shall
occur at 10:00 a.m. (or such earlier time as agreed to by the parties), New York
time (the “Closing Date”). As used herein “Business Day” means any day other
than a Saturday, Sunday or other day on which commercial banks in New York, New
York are authorized or required by law to remain closed.

(c) Purchase Price. The aggregate purchase price for the Units to be purchased
by each Buyer (the “Purchase Price”) shall be the amount set forth for such
Buyer on the Schedule of Buyers.

(d) Form of Payment; Deliveries. On the Closing Date, (i) each Buyer shall pay
its respective Purchase Price to the Company for the Units to be issued and sold
to such Buyer at the Closing (less for Crede (as defined below), the amounts, if
any, withheld pursuant to Section 4(e)), by wire transfer of immediately
available funds in accordance with the Company’s written wire instructions and
(ii) the Company shall (A) cause Computershare (together with any subsequent
transfer agent, the “Transfer Agent”) through the Depository Trust Company
(“DTC”) Fast Automated Securities Transfer Program to credit, without
restriction, to such Buyer’s or its designee’s balance account with DTC through
its Deposit/Withdrawal at Custodian (“DWAC”) system such aggregate number of
Common Shares that such Buyer is purchasing as is set forth for such Buyer on
the Schedule of Buyers, (B) deliver to each Buyer a warrant certificate, in the
form attached hereto as Exhibit A, pursuant to which such Buyer shall have the
right to initially acquire up to the number of Warrant Shares as is set forth
for such Buyer on the Schedule of Buyers and (C) deliver to such Buyer the other
documents, instruments and certificates set forth in Section 6.

 

2. BUYER’S REPRESENTATIONS AND WARRANTIES.

Each Buyer, severally and not jointly, represents and warrants to the Company
with respect to only itself that:

(a) Organization; Authority. Such Buyer is an entity duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
organization with the requisite power and authority to enter into and to
consummate the transactions contemplated by the Transaction Documents to which
it is a party and otherwise to carry out its obligations hereunder and
thereunder.

(b) Validity; Enforcement. This Agreement has been duly and validly authorized,
executed and delivered on behalf of such Buyer and constitutes the legal, valid
and binding obligations of such Buyer enforceable against such Buyer in
accordance with its 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.

 

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(c) No Conflicts. The execution, delivery and performance by such Buyer of this
Agreement and the consummation by such Buyer of the transactions contemplated
hereby 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.

(d) Certain Trading Activities. Such Buyer has not directly or indirectly, nor
has any Person acting on behalf of or pursuant to any understanding with such
Buyer, engaged in any transactions in the securities of the Company (including,
without limitation, any Short Sales involving the Company’s securities) during
the period commencing as of the time that such Buyer and the Company (or the
Placement Agent if any) first began discussions regarding the specific
investment in the Company contemplated by this Agreement and ending immediately
prior to the execution of this Agreement by such Buyer (it being understood and
agreed that for all purposes of this Agreement, and, without implication that
the contrary would otherwise be true, that neither transactions nor purchases
nor sales shall include the location and/or reservation of borrowable shares of
Common Stock). “Short Sales” means all “short sales” as defined in Rule 200
promulgated under Regulation SHO under the 1934 Act. “Person” means any person
or entity, whether an individual, trustee, corporation, partnership, limited
partnership, limited liability company, trust, unincorporated organization,
business association, firm, joint venture or governmental entity.

(e) Investment decision. Such Buyer has based its investment decision solely
upon the information contained in the Transaction Documents, the SEC Documents,
such information as may be filed by the company as a “Free Writing Prospectus”
under the 1933 Act, and such other information as may have been provided to it
by the Company in response to its inquiries, and has not based its investment
decision on any research report or other information regarding the Company. Each
Buyer further acknowledges that (i) the purchase of the Securities involves a
degree of risk and (ii) the offer contained in the Transaction Documents does
not constitute a securities recommendation or other form of financial product
advice.

(f) No re-sale. The Buyer represents and warrants that it is not applying for
the Securities for the purpose of selling or transferring them or granting,
issuing or transferring interests in, or options over them in Australia within
12 months of the date of purchase of the Securities. This confirmation is
understood to be a statement of present intention only but not an undertaking
not to sell, particularly where the Buyer’s investment objectives or market
conditions change.

 

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3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.

The Company represents and warrants to each of the Buyers that, except as may be
set forth in the Company’s SEC Documents (provided the following representations
and warranties shall not be qualified by reference to the SEC Documents except
to the extent (and only to the extent) specifically set forth in such
representations and warranties: Sections 3(a), 3(b), 3(c), 3(d), 3(e), 3(f),
3(g), 3(h), 3(i), 3(j), 3(l), 3(x), 3(y), 3(aa), 3(bb), 3(cc), 3(dd) and 3(ee)),
as of the date of this Agreement (unless such representation and warranty
specifies a different time):

(a) Organization and Qualification. Each of the Company and each of its
Subsidiaries are entities duly organized or incorporated (as applicable),
validly existing as a corporation and in good standing (where applicable) under
the laws of the jurisdiction in which they are formed or incorporated (as
applicable), and have the requisite power and authorization to own their
properties and to carry on their business as now being conducted and as
presently proposed to be conducted. Each of the Company and each of its
Subsidiaries is duly qualified as a foreign entity (where applicable) to do
business and is in good standing (where applicable) 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 have a Material Adverse Effect. As
used in this Agreement, “Material Adverse Effect” means any material adverse
effect on (i) the business, properties, assets, liabilities, operations
(including results thereof), condition (financial or otherwise) or prospects of
the Company or any Subsidiary, individually or taken as a whole, (ii) the
transactions contemplated hereby or in any of the other Transaction Documents or
(iii) the authority or ability of the Company to perform any of its obligations
under any of the Transaction Documents. “Subsidiaries” means any Person in which
the Company, directly or indirectly, (I) owns any of the outstanding capital
stock or holds any equity or similar interest of such Person or (II) controls or
operates all or any part of the business, operations or administration of such
Person, and each of the foregoing is individually referred to herein as a
“Subsidiary.”

(b) Authorization; Enforcement; Validity. The Company has the requisite power
and authority to enter into and perform its obligations under this Agreement and
the other Transaction Documents and to issue the Securities in accordance with
the terms hereof and thereof. The execution and delivery of this Agreement and
the other 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 issuance of the Warrants and
the reservation for issuance and issuance of the 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 the prospectus supplement
required by the Registration Statement pursuant to Rule 424(b) under the 1933
Act (the “Prospectus Supplement”) supplementing the base prospectus forming part
of the Registration Statement (the “Prospectus”) and any other filings as may be
required by any state securities agencies, all of which shall be made prior to
the Closing) no further filing, consent or authorization is required by the
Company, its board of directors or its stockholders or other governing body.
This Agreement has been, and the other Transaction Documents will be prior to
the Closing, duly executed and delivered by the Company, and each constitutes
the legal, valid and binding obligations of the Company, enforceable against the
Company in accordance with its 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 and except as rights to indemnification and to contribution may be
limited by federal or state securities law.

 

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“Transaction Documents” means, collectively, this Agreement, the Warrants, the
Irrevocable Transfer Agent Instructions and each of the other agreements and
instruments entered into or delivered by any of the parties hereto in connection
with the transactions contemplated hereby and thereby, as may be amended from
time to time.

(c) Issuance of Securities; Registration Statement. The issuance of the Common
Shares and the Warrants are duly authorized and, upon issuance in accordance
with the terms of the Transaction Documents, will be validly issued, fully paid
and non-assessable and free from all preemptive or similar rights, taxes, liens,
charges and other encumbrances with respect to the issue thereof. As of the
Closing, the Company shall have reserved from its duly authorized capital stock
the maximum number of shares of Common Stock issuable upon exercise of the
Warrants (without taking into account any limitations on the exercise of the
Warrants set forth therein). The issuance of the Warrant Shares is duly
authorized, and upon exercise in accordance with the Warrants, the Warrant
Shares, when issued, will be validly issued, fully paid and non-assessable and
free from all preemptive or similar rights, taxes, liens, charges and other
encumbrances with respect to the issue thereof, with the holders being entitled
to all rights accorded to a holder of Common Stock. The issuance by the Company
of the Securities has been registered under the 1933 Act, the Securities are
being issued pursuant to the Registration Statement and, subject to the Company
issuing a cleansing notice on ASX in accordance with the requirements of section
708A(6) of the Corporations Act 2001 (Cth) as modified by ASIC Instrument of
Relief 13-0118 dated February 8, 2013 (“ASX Notice”) (and is entitled to do so)
within five Business Days of the issue of the Securities, all of the Securities
are freely transferable and freely tradable by each of the Buyers without
restriction; provided, the filing of (or failure to file) the ASX Notice shall
qualify the prior representation solely with respect to sales made in Australia.
The Registration Statement is effective and available for the issuance of the
Securities thereunder and the Company has not received any notice that the SEC
has issued or intends to issue a stop-order with respect to the Registration
Statement or that the SEC otherwise has suspended or withdrawn the effectiveness
of the Registration Statement, either temporarily or permanently, or intends or
has threatened in writing to do so. The “Plan of Distribution” section under the
Registration Statement permits the issuance and sale of the Securities hereunder
and as contemplated by the other Transaction Documents. The Registration
Statement and any prospectus included therein, including the Prospectus and the
Prospectus Supplement, comply and complied in all material respects with the
requirements of the 1933 Act and the 1934 Act and the rules and regulations of
the SEC promulgated thereunder and all other applicable laws and regulations of
the United States. At the time the Registration Statement and any amendments
thereto became effective, at the date of this Agreement and at each deemed
effective date thereof pursuant to Rule 430B(f)(2) of the 1933 Act, the
Registration Statement and any amendments thereto complied and will comply in
all material respects with the requirements of the 1933 Act and did not and will
not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading; and the Prospectus and any amendments or supplements
thereto (including, without limitation the Prospectus Supplement), at the time
the Prospectus or any amendment or supplement thereto was issued and at the
Closing Date, complied and will comply in all material respects with the
requirements of the 1933 Act and did not and will not contain an untrue
statement of a material fact or omit to state a material fact necessary in order
to make the statements therein, in light of the circumstances under which they
were made, not misleading.

 

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The Company meets all of the requirements for the use of Form S-3 under the 1933
Act for the offering and sale of the Securities contemplated by this Agreement
and the other Transaction Documents, and the SEC has not notified the Company of
any objection to the use of the form of the Registration Statement pursuant to
Rule 401(g)(1) under the 1933 Act. The Registration Statement meets the
requirements set forth in Rule 415(a)(1)(x) under the 1933 Act. At the earliest
time after the filing of the Registration Statement that the Company or another
offering participant made a bona fide offer (within the meaning of Rule
164(h)(2) under the 1933 Act) relating to any of the Securities, the Company was
not and is not an “Ineligible Issuer” (as defined in Rule 405 under the 1933
Act). The Company (i) has not distributed any offering material in connection
with the offering and sale of any of the Securities and (ii) until no Buyer
holds any of the Securities, shall not distribute any offering material in
connection with the offering and sale of any of the Securities to, or by, any of
the Buyers, in each case, other than the Registration Statement, the Prospectus
or the Prospectus Supplement. Further, the Company will not distribute any
offering material in connection with the offering and sale of any Securities in
any place in which, or to any person to whom, it would not be lawful to make
such an offer.

(d) No Conflicts. 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, the Warrants and Warrant Shares and the reservation for
issuance of the Warrant Shares) will not (i) result in a violation of the
Company’s Certificate of Incorporation (including, without limitation, any
certificates of designation contained therein) or other organizational documents
of the Company or any of its Subsidiaries, any capital stock of the Company, or
Bylaws , (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, note, lease, mortgage, deed or other instrument to which the Company
is a party or by which the Company is bound or affected that has been filed as
an exhibit to the SEC Documents, or (iii) result in a violation of any law,
rule, regulation, order, judgment or decree (including, without limitation,
federal and state and foreign securities laws and regulations and the rules and
regulations of the Principal Market) 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 case of clause (ii) above, to
the extent such violations that could not reasonably be expected to be material.

(e) Consents. The Company is not required to obtain any consent from,
authorization or order of, or make any filing which has not already been
obtained or made (including, without limitation as to the listing on the
Principal Market of the Common Shares and the Warrant Shares upon issuance) or
registration with (other than the filing with the SEC of the Prospectus
Supplement, the filing of the ASX Notice on ASX within five Business Days of the
issue of the Securities, the filing of an Appendix 3B with ASX within five
Business Days of the issue of the Securities and any other filings as may be
required by any state securities agencies), 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. All consents, authorizations, orders, filings and registrations which
the Company is required to obtain at or prior to the Closing will have been
obtained or effected on or prior to the Closing Date, and

 

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neither the Company nor any of its Subsidiaries are aware of any facts or
circumstances which might prevent the Company from obtaining or effecting any of
the registration, application or filings contemplated by the Transaction
Documents. The Company is not in violation of the requirements of the Principal
Market or foreign, federal, state or local securities laws, and has no knowledge
of any facts or circumstances which could reasonably lead to such violation or
delisting or suspension of the Common Stock in the foreseeable future. No
statute, rule, regulation, executive order, decree, ruling or injunction has
been enacted, entered, promulgated or endorsed by any court or governmental
authority of competent jurisdiction that prohibits the consummation of any of
any of the transactions contemplated by the Transaction Documents, and no
actions, suits or proceedings are pending or threatened by any Person that seeks
to enjoin, prohibit or otherwise adversely affect any of the transactions
contemplated by the Transaction Documents.

(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 or (ii) an “affiliate” (as
defined in Rule 144 promulgated under the 1933 Act (or a successor rule thereto)
(collectively, “Rule 144”)) of the Company (an “Affiliate”) or any of its
Subsidiaries. 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
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) Placement Agent’s Fees. Except for Westor Capital Group, Inc. (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. The Company shall be responsible 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.

(h) No Integrated Offering. None of the Company, its Subsidiaries or any of
their Affiliates, nor 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 cause this offering of the
Securities to require approval of stockholders of the Company under 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 nor any Person acting on their
behalf will take any action or steps that would cause the offering of any of the
Securities to be integrated with other offerings. No registration of the offer,
sale or transfer of any of the Securities is required, except for registration
contemplated hereby pursuant to the Registration Statement.

 

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(i) 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, interested stockholder, business
combination, poison pill (including any distribution under a rights agreement)
or other similar anti-takeover provision under the Certificate of Incorporation,
Bylaws or other organizational documents or the laws of the jurisdiction of its
incorporation or otherwise that can be waived by approval of the board of
directors and 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 and its board of directors have taken all necessary
action, if any, in order to render inapplicable any stockholder rights plan or
similar arrangement relating to accumulations of beneficial ownership of shares
of Common Stock or a change in control of the Company or any of its
Subsidiaries.

(j) SEC Documents; Financial Statements. During the two 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 Securities Exchange Act of 1934, as amended (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”). As of their respective dates, 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 dates, the financial statements of the
Company included in the SEC Documents complied in all material respects with
applicable accounting requirements and the published rules and regulations of
the SEC with respect thereto as in effect as of the time of filing. 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 which will not be material, either individually or in the
aggregate). No other information provided by or on behalf of the Company to the
Buyers which is not included in the SEC Documents contains any untrue statement
of a material fact or omits to state any material fact necessary in order to
make the statements therein not misleading, in the light of the circumstance
under which they are or were made.

(k) Conduct of Business; Regulatory Permits. Neither the Company nor any of its
Subsidiaries is in violation of any term of or in default under its Certificate
of Incorporation, any certificate of designation, preferences or rights of any
other outstanding series of preferred stock of the Company or any of its
Subsidiaries or Bylaws or their organizational charter, certificate of formation
or certificate of incorporation or bylaws, respectively. Neither the Company nor
any of

 

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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 in all cases for
possible violations which could not, individually or in the aggregate, have a
Material Adverse Effect. Since January 1, 2010, (i) the Common Stock has been
listed or designated for quotation on the Principal Market, (ii) trading in the
Common Stock has not been suspended by the SEC or the Principal Market and
(iii) the Company has received no communication, written or oral, from the SEC
or, except as disclosed in the SEC Documents, the Principal Market regarding or
relating to the suspension or delisting of the Common Stock from the Principal
Market. The Company and each of its Subsidiaries possess all certificates,
authorizations and permits issued by the appropriate 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.

(l) Equity Capitalization. As of the date hereof, the authorized capital stock
of the Company consists of (i) 250,000,000 shares of Common Stock, of which
85,379,235 are issued and outstanding and 1,297,868 shares are reserved for
issuance pursuant to securities (other than the Warrants) exercisable or
exchangeable for, or convertible into, shares of Common Stock and
(ii) 50,000,000 shares of preferred stock, of which none are issued and
outstanding. 28,670 shares of Common Stock are held in treasury. All of such
outstanding shares are duly authorized and have been, or upon issuance will be,
validly issued and are fully paid and non-assessable. 7,936,046 shares of the
Company’s issued and outstanding Common Stock on the date hereof are owned by
Persons who are “Affiliates” (as defined in Rule 405 of the 1933 Act and
calculated based on the assumption that only officers, directors and holders of
at least 10% of the Company’s issued and outstanding Common Stock are
“Affiliates” without conceding that any such Persons are “Affiliates” for
purposes of federal securities laws) of the Company or any of its Subsidiaries.
The SEC Documents contain 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.

(m) Internal Accounting and Disclosure Controls. The Company and each of its
Subsidiaries maintains internal control over financial reporting (as such term
is defined in Rule 13a-15(f) under the 1934 Act) that is effective to provide
reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with
generally accepted accounting principles, including 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

 

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(as such term is defined in Rule 13a-15(e) 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 to ensure that information 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. Neither the Company nor any of its Subsidiaries has received any
notice or correspondence from any accountant or other Person relating to any
potential material weakness or significant deficiency in any part of the
internal controls over financial reporting of the Company or any of its
Subsidiaries.

(n) Off Balance Sheet Arrangements. There is no transaction, arrangement, or
other relationship between the Company or any of its Subsidiaries 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 could be reasonably likely to have a Material Adverse Effect.

(o) Foreign Corrupt Practices; Certain Other Unlawful Matters. 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 rules or regulations or interpretations thereunder); or (iv) made
any unlawful bribe, rebate, payoff, influence payment, kickback or other
unlawful payment to any foreign or domestic government official or employee or
otherwise. The Company and its Subsidiaries are in compliance with, and have not
previously violated, the USA Patriot Act of 2001 and all other applicable U.S.
and non-U.S. anti-money laundering laws and regulations, including, without
limitation, the laws, regulations and Executive Orders and sanctions programs
administered by the U.S. Office of Foreign Assets Control, including, without
limitation, (i) Executive Order 13224 of September 23, 2001 entitled, “Blocking
Property and Prohibiting Transactions With Persons Who Commit, Threaten to
Commit, or Support Terrorism” (66 Fed. Reg. 49079 (2001)); and (ii) any
regulations contained in 31 CFR, Subtitle B, Chapter V.

(p) Sarbanes-Oxley Act. The Company and each Subsidiary is in compliance with
all applicable requirements of the Sarbanes-Oxley Act of 2002 that are effective
as of the date hereof, 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 or Affiliates 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

 

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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 Person in which
any such officer, director or employee or Affiliate has a substantial interest
or is an employee, officer, director, trustee or partner.

(r) Absence of Litigation. Except as disclosed in the SEC Documents, there is no
action, suit, proceeding, inquiry or investigation before or by 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 or its
Subsidiaries’ officers or directors which is outside of the ordinary course of
business or individually or in the aggregate material to the Company or any of
its Subsidiaries. There has not been, and to the knowledge of the Company, there
is not pending or contemplated, any investigation by the SEC involving the
Company, any of its Subsidiaries or any current of former director or officer of
the Company or any of its Subsidiaries. The SEC has not issued any stop order or
other order suspending the effectiveness of the Registration Statement.

(s) 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 be unable 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.

(t) Employee Relations. 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 believes that its and its Subsidiaries’ relations with their
respective employees are good. No executive officer (as defined in Rule 501(f)
promulgated under the 1933 Act) or other key employee of the Company or any of
its Subsidiaries has notified the Company or any such Subsidiary that such
officer intends to leave the Company or any such Subsidiary or otherwise
terminate such officer’s employment with the Company or any such Subsidiary. No
executive officer or other key employee 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 or other key employee (as the case may be) does not subject the Company
or any of its Subsidiaries to any liability with respect to any of the foregoing
matters. The Company and its Subsidiaries are in compliance with all 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.

 

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(u) Title. The Company and its Subsidiaries have good and marketable title in
fee simple to all real property, and have 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 or 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 or any of its Subsidiaries.

(v) 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, patents, patent rights,
copyrights, original works, 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 and as
presently proposed to be conducted. None of the Company’s or its Subsidiaries’
Intellectual Property Rights have expired, terminated or been abandoned, or are
expected to expire, terminate or be abandoned, within three years from the date
of this Agreement, except where the expiration, termination or abandonment,
either individually or in the aggregate, would not reasonably be expected to
have a Material Adverse Effect. The Company has no knowledge of any infringement
by the Company or any of 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 their Intellectual Property
Rights. The Company is not aware of any facts or circumstances which might give
rise to any of the foregoing infringements or claims, actions or proceedings.
The Company and each of its Subsidiaries have taken reasonable security measures
to protect the secrecy, confidentiality and value of all of their Intellectual
Property Rights.

(w) Environmental Laws. The Company and its Subsidiaries (i) are in compliance
with all Environmental Laws (as defined below), (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 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 of the applicable jurisdictions to which the Company is subject
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.

 

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(x) Investment Company Status. The Company is not, and upon consummation of the
sale of the Securities will not be, an “investment company,” an Affiliate of 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.

(y) Manipulation of Price. Neither the Company nor any of its Subsidiaries has,
and, to the knowledge of the Company, no Person acting on their behalf has,
directly or indirectly, (i) taken any action designed to cause or to result in
the stabilization or manipulation of the price of any security of the Company or
any of its Subsidiaries to facilitate the sale or resale of any of the
Securities, (ii) sold, bid for, purchased, or paid any compensation for
soliciting purchases of, any of the Securities (other than the Placement Agent),
or (iii) paid or agreed to pay to any Person any compensation for soliciting
another to purchase any other securities of the Company or any of its
Subsidiaries.

(z) Purpose of issue of Securities. The purpose of the issue and sale of the
Securities pursuant to the terms of the Transaction Documents is not to
facilitate the subsequent sale or transfer of the Securities (or the grant,
issue or transfer of any interest in or option over the Securities) into
Australia within 12 months following the date of issue of the Securities by the
Company.

(aa) Acknowledgement Regarding Buyers’ Trading Activity. It is understood and
acknowledged by the Company that (i) following the public disclosure of the
transactions contemplated by the Transaction Documents, in accordance with the
terms thereof, none of the Buyers have been asked by the Company or any of its
Subsidiaries to agree, nor has any Buyer agreed with the Company or any of its
Subsidiaries, to desist from effecting any transactions in or with respect to
(including, without limitation, purchasing or selling, long and/or short) any
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 counterparties in “derivative” transactions to which any such Buyer is a
party, directly or indirectly, presently may have a “short” position in the
Common Stock which was established prior to such Buyer’s knowledge of the
transactions contemplated by the Transaction Documents; and (iii) each Buyer
shall not be deemed to have any affiliation with or control over any arm’s
length counterparty in any “derivative” transaction. The Company further
understands and acknowledges that following the public disclosure of the
transactions contemplated by the Transaction Documents pursuant to the Press
Release (as defined below) 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
and/or number of the Warrant Shares deliverable with respect to the Securities
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 constitute a breach of this Agreement or any other
Transaction Document or any of the documents executed in connection herewith or
therewith.

(bb) Registration Eligibility. The Company is eligible to register the issuance
and sale of the Securities to the Buyers using Form S-3 promulgated under the
1933 Act.

 

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(cc) 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 issuance and sale 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.

(dd) Registration Rights. No holder of securities of the Company has rights to
the registration of any securities of the Company because of the issuance of the
Securities hereunder that could expose the Company to material liability or any
Buyer to any liability or that could impair the Company’s ability to consummate
the issuance and sale of the Securities in the manner, and at the times,
contemplated hereby, which rights have not been waived by the holder thereof as
of the date hereof.

(ee) 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, non-public information concerning the Company or any of its
Subsidiaries, other than the existence of the transactions contemplated by this
Agreement and the other Transaction Documents and such information as may be
filed by the company as a “Free Writing Prospectus” under the 1933 Act. 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 and its
Subsidiaries, their businesses and the transactions contemplated hereby,
including the schedules to this Agreement, furnished by or on behalf of the
Company or any of its Subsidiaries 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 material 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 are 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, liabilities,
prospects, operations (including results thereof) or conditions (financial or
otherwise), which, under applicable law, rule or regulation, requires public
disclosure at or before the date hereof or announcement by the Company but which
has not been so publicly 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.

 

4. COVENANTS.

(a) Registration Statement If at any time following the date hereof the
Registration Statement is not effective or is not otherwise available for the
issuance of the Securities or any prospectus contained therein is not available
for use, the Company shall immediately notify the holders of the Securities in
writing that the Registration Statement is not then effective or a prospectus
contained therein is not available for use and thereafter shall promptly notify
such holders when the Registration Statement is effective again and available
for the issuance of the Securities or such prospectus is again available for
use.

 

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(b) Prospectus Supplement and Blue Sky. Immediately prior to execution of this
Agreement, the Company shall have delivered, and as soon as practicable after
execution of this Agreement the Company shall file, the Prospectus Supplement
with respect to the Securities as required under, and in conformity with, the
1933 Act, including Rule 424(b) thereunder. The Company shall have taken
immediately upon execution of this Agreement such action, if any, as required 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. Without limiting any other
obligation of the Company under this Agreement, the Company shall timely make
all filings and reports relating to the offer and sale of the Securities
required under all applicable securities laws (including, without limitation,
all applicable federal securities laws and all applicable “Blue Sky” laws), and
the Company shall comply with all applicable federal, state and local laws,
statutes, rules, regulations and the like relating to the offering and sale of
the Securities to the Buyers. The Company shall take all necessary action to
ensure the compliance with all applicable securities laws (including without
limitation “Blue Sky” laws) of the issuance of any Warrant Shares from time to
time upon exercise of the Warrants.

(c) Reporting Status. Until the date on which no 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.

(d) Listing. The Company has secured the listing of all of the Common Shares and
Warrant Shares (subject to notice of issuance) on the Principal Market in
connection with the transactions contemplated hereby and by the Warrants and
shall secure the listing or designation for quotation (as the case may be) of
all of the Common Shares and Warrant Shares upon each other national securities
exchange and automated quotation system, if any, upon which the Common Stock is
then listed or designated for quotation (as the case may be) (subject to
official notice of issuance) (but in no event later than the Closing Date) and
shall maintain such listing or designation for quotation (as the case may be) of
all the shares of Common Stock from time to time issuable under the terms of the
Transaction Documents on the Principal Market and such national securities
exchange or automated quotation system. The Company shall maintain the Common
Stock’s listing or designation for quotation (as the case may be) on the
Principal Market, The New York Stock Exchange, the Nasdaq Capital Market or the
Nasdaq Global Select Market (each, an “Eligible Market”). Neither the Company
nor any of its Subsidiaries shall take any action which could be reasonably
expected to result in the delisting or suspension of the Common Stock on an
Eligible Market. The Company shall pay all fees and expenses in connection with
satisfying its obligations under this Section 4(d).

(e) Fees. Prior to the date hereof, the Company has paid, for the benefit of
Crede CG II, Ltd. (“Crede”), a non-refundable, non-accountable document
preparation fee in the amount of $30,000. In addition, Crede shall pay directly
to the Placement Agent, on behalf of the Company, an amount equal to $300,000,
which amount shall be withheld by Crede from the Purchase Price to be paid by it
at the Closing (and only due and payable simultaneously with and upon
consummation of the Closing). Except as set forth above, or as may otherwise be
set forth in this Agreement or the other Transaction Documents, each party to
this Agreement shall bear its own expenses in connection with the sale of the
Securities to the Buyers.

 

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(f) Pledge of Securities. Notwithstanding anything to the contrary contained in
this Agreement, the Company acknowledges and agrees that the Securities may be
pledged by a Buyer 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 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. 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 a Buyer.

(g) Disclosure of Transactions and Other Material Information. The Company
shall, on or before 9:30 a.m. (but in no event prior to 9:15 a.m.), New York
time, on the date hereof, issue a press release (the “Press Release”) reasonably
acceptable to the Buyers disclosing all the material terms of the transactions
contemplated by the Transaction Documents. On or before 9:30 a.m. (but in no
event prior to 9:15 a.m.), New York time, on the date hereof, the Company shall
file a Current Report on Form 8-K describing all the material terms of the
transactions contemplated by the Transaction Documents in the form required by
the 1934 Act and attaching all the material Transaction Documents (including,
without limitation, this Agreement (and all schedules to this Agreement) and the
form of Warrants) (including all attachments, the “8-K Filing”). From and after
the issuance of the Press Release, the Company shall have disclosed all
material, non-public information (if any) delivered to any of the Buyers by the
Company or any of its Subsidiaries, or any of their respective officers,
directors, employees or agents in connection with the transactions contemplated
by the Transaction Documents. The Company shall not, and the Company shall cause
each of its Subsidiaries and each of its and their respective officers,
directors, employees and agents, not to, provide any Buyer with any material,
non-public information regarding the Company or any of its Subsidiaries from and
after the issuance of the Press Release without the express prior written
consent of such Buyer. In the event of a breach of any of the foregoing
covenants by the Company, any of its Subsidiaries, or any of its or their
respective officers, directors, employees and agents (as determined in the
reasonable good faith judgment of such Buyer), in addition to any other remedy
provided herein or in the Transaction Documents, such Buyer shall have the right
to make a public disclosure, in the form of a press release, public
advertisement or otherwise, of such material, non-public information without the
prior approval by the Company, any of its Subsidiaries, or any of its or their
respective officers, directors, employees or agents. No Buyer shall have any
liability to the Company, any of its Subsidiaries, or any of its or their
respective officers, directors, employees, stockholders or agents, for any such
disclosure. 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, 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

 

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consent of the applicable Buyer, the Company shall not (and shall cause each of
its Subsidiaries and Affiliates to not) disclose the name of such Buyer in any
filing (other than in the Transaction Documents filed as exhibits to the 8-K
Filing), announcement, release or otherwise.

(h) Additional Issuance of Securities. The Company agrees that for the period
commencing on the date hereof and ending on the date that is 90 days after the
date hereof (the “Restricted Period”), neither the Company nor any of its
Subsidiaries shall directly or indirectly issue, offer, sell, grant any option
or right to purchase, or otherwise dispose of (or announce any issuance, offer,
sale, grant of any option or right to purchase or other disposition of) any
Common Stock or any security or any debt or other instrument directly or
indirectly convertible or exchangeable or exercisable into Common Stock (each a
“Convertible Security”) or which constitutes (or would constitute but for lack
of a fixed exercise or conversion or similar price or if it were not solely cash
settled) a “derivative security” (as defined under the rules and regulations
under Section 16 of the 1934 Act) or otherwise an equity-linked or related
security (including, without limitation, any “equity security” (as that term is
defined under Rule 405 promulgated under the 1933 Act) (any such issuance,
offer, sale, grant, disposition or announcement (whether occurring during the
Restricted Period or at any time thereafter) is referred to as a “Subsequent
Placement”). This Section 4(b) shall not apply in respect of the issuance of
(A) shares of Common Stock or options to purchase Common Stock or other equity
linked securities (e.g., stock appreciation rights) to directors, officers or
employees of the Company in their capacity as such pursuant to an Approved Share
Plan), provided that (1) all such issuances (taking into account the shares of
Common Stock issuable upon exercise of such options) after the date hereof
pursuant to this clause (A) do not, in the aggregate, exceed more than 2% of the
shares of Common Stock and (2) the exercise price of any such options is not
lowered, none of such options are amended to increase the number of shares
issuable thereunder and none of the terms or conditions of any such options are
otherwise materially changed in any manner that adversely affects any of the
Buyers; (B) shares of Common Stock issued upon the conversion or exercise of
Convertible Securities (other than standard options to purchase Common Stock
issued pursuant to an Approved Share Plan that are covered by clause (A) above)
issued prior to the date hereof, provided that the conversion price of any such
Convertible Securities (other than standard options to purchase Common Stock
issued pursuant to an Approved Share Plan that are covered by clause (A) above)
is not lowered, none of such Convertible Securities (other than standard options
to purchase Common Stock issued pursuant to an Approved Share Plan that are
covered by clause (A) above) are amended to increase the number of shares
issuable thereunder and none of the terms or conditions of any such Convertible
Securities (other than standard options to purchase Common Stock issued pursuant
to an Approved Share Plan that are covered by clause (A) above) are otherwise
materially changed in any manner that adversely affects any of the Buyers;
(C) the Warrants; (D) the Warrant Shares; (E) issuances of equity to a seller,
or in the case of a merger, the equity holders of the target company in such
merger, or the officers or employees thereof, in each case in connection with a
bona fide merger, business combination transaction or acquisition of stock or
assets outside of the ordinary course; (F) a stock split or other subdivision or
combination, or a stock dividend made to all holders of any Company equity on a
pro rata basis; or (G) shares of Common Stock or Convertible Securities issued
to a bank or other Person acting as bona fide lender in connection with a credit
facility or other indebtedness provided by such Person (each of the foregoing in
clauses (A) through (G), collectively the “Excluded Securities”). “Approved

 

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Share Plan” means any employee incentive or benefit plan which has been approved
by the board of directors of the Company prior to or subsequent to the date
hereof pursuant to which shares of Common Stock and standard options to purchase
Common Stock may be issued to any employee, officer or director for services
provided to the Company in their capacity as such.

(i) Reservation of Shares. So long as any of the Warrants remain outstanding,
the Company shall take all action necessary to at all times have authorized, and
reserved for the purpose of issuance, the maximum number of shares of Common
Stock issuable upon exercise of all the Warrants (without regard to any
limitations on the exercise of the Warrants set forth therein).

(j) 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 in any jurisdiction to which the Company is subject, except
where such violations would not result, either individually or in the aggregate,
in a Material Adverse Effect.

(k) Certain Restrictions as to Buyer. For so long as the Buyer or any of its
Affiliates holds any Securities, neither the Buyer nor any Affiliate will: (i)
vote any shares of Common Stock beneficially owned by it, solicit any proxies,
or seek to advise or influence any Person with respect to any voting securities
of the Company; (ii) engage or participate in any actions, plans or proposals
which relate to or would result in (a) acquiring additional securities of the
Company, alone or together with any other Person, which would result in Buyer or
its Affiliates beneficially owning (within the meaning of Section 13(d) under
the 1934 Act) more than 9.9% of the Common Stock, (b) an extraordinary corporate
transaction, such as a merger, reorganization or liquidation, involving Company
or any of its Subsidiaries, (c) a sale or transfer of a material amount of
assets of the Company or any of its Subsidiaries, (d) any change in the present
board of directors or management of the Company, including any plans or
proposals to change the number or term of directors or to fill any existing
vacancies on the board, (e) any material change in the present capitalization or
dividend policy of the Company, (f) any other material change in the Company’s
business or corporate structure, including but not limited to, if the Company is
a registered closed-end investment company, any plans or proposals to make any
changes in its investment policy for which a vote is required by Section 13 of
the Investment Company Act of 1940, (g) changes in the Company’s charter, bylaws
or instruments corresponding thereto or other actions which may impede the
acquisition of control of the Company by any Person, (h) causing a class of
securities of the Company to be delisted from a national securities exchange or
to cease to be authorized to be quoted in an inter-dealer quotation system of a
registered national securities association, (i) a class of equity securities of
the Company becoming eligible for termination of registration pursuant to
Section 12(g)(4) of the Act, or (j) any action, intention, plan or arrangement
similar to any of those enumerated above; or (iii) request the Company or its
directors, officers, employees, agents or representatives to amend or waive any
provision of this paragraph. The restrictions contained in this paragraph
(i) shall not limit Buyer’s rights to enforce its rights or exercise its rights
as to the Securities or under the Transaction Documents.

 

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5. REGISTER; TRANSFER AGENT INSTRUCTIONS; LEGEND.

(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 Shares and the Warrants in
which the Company shall record the name and address of the Person in whose name
the Common Shares and the Warrants have been issued (including the name and
address of each transferee), the number of Common Shares held by such Person and
the number of 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 the Transfer Agent in the form previously provided to the
Company (the “Irrevocable Transfer Agent Instructions”) to issue certificates or
credit shares to the applicable balance accounts at DTC, without restriction and
registered in the name of each Buyer or its respective nominee(s), for the
Common Shares and the Warrant Shares in such amounts as specified from time to
time by each Buyer to the Company upon delivery of the Common Shares or the
exercise of the Warrants (as the case may be). No instruction other than the
Irrevocable Transfer Agent Instructions referred to in this Section 5(a) will be
given by the Company to the Transfer Agent with respect to the Securities (other
than instructions in connection with the exercise of the Warrants or otherwise
provided for in, or allowed by, any of the Transaction Documents), and that the
Securities shall otherwise be freely transferable on the books and records of
the Company. If a Buyer effects a sale, assignment or transfer of the
Securities, the Company shall permit the transfer and shall promptly instruct
the 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. The Company
acknowledges that a breach by it of its obligations hereunder will cause
irreparable harm to each 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 each 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.

(c) Certificates and any other instruments evidencing the Securities shall not
bear any restrictive or other legend.

 

6. ADDITIONAL CLOSING DELIVERIES OF THE COMPANY.

At the Closing, in addition to its other deliveries required under this
Agreement, the Company shall deliver the following:

(i) The opinion of Pepper Hamilton LLP, the Company’s counsel, dated as of the
Closing Date, in the form set forth on Exhibit B;

(ii) A copy of the Irrevocable Transfer Agent Instructions, in the form
reasonably acceptable to the Buyer, which has been delivered to and acknowledged
in writing (which may be via .pdf e-mail) by the Transfer Agent;

(iii) A certificate evidencing the formation and good standing of the Company in
the Company’s jurisdiction of formation issued by the Secretary of State (or
comparable office) of such jurisdiction of formation as of a date within ten
days of the Closing Date;

 

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(iv) A certified copy of the Certificate of Incorporation of the Company within
ten days of the Closing Date;

(v) A certificate executed by the Secretary of the Company on behalf of the
company, and not in his or her personal capacity, and dated as of the Closing
Date, as to (i) the resolutions as adopted by the Company’s board of directors
and as necessary or appropriate with respect to the issuance of the Securities
and the approval of this Agreement and the other Transaction Documents and the
terms and conditions hereof and thereof and otherwise in order to give effect
hereto and thereto, (ii) the Certificate of Incorporation of the Company and
(iii) the Bylaws of the Company, each as in effect at the Closing.

(vi) A letter from the Transfer Agent certifying the number of shares of Common
Stock outstanding on the Closing Date immediately prior to the Closing.

(vii) A certificate executed by the Chief Executive Officer of the Company,
dated as of the Closing Date, stating on behalf of the company, and not in his
or her personal capacity, that as of the Closing (i) each and every
representation and warranty of the Company herein is true and correct in all
material respects as of the date when made and as of the Closing as though
originally made at that time, and (ii) that the Company has performed, satisfied
and complied in all material respects with the covenants, agreements and
conditions required to be performed, satisfied or complied with by the Company
at or prior Closing.

(viii) Such other documents, instruments or certificates relating to the
transactions contemplated by this Agreement as necessary or appropriate to
accomplish the purposes or intents of the issuance of the Securities, and the
consummation of the transactions contemplated by this Agreement and the other
Transaction Documents.

 

7. DAMAGES IN CERTAIN CIRCUMSTANCE AND CERTAIN RELATED MATTERS.

In the event that the Company shall fail to consummate the Closing as called for
by Section 1(b) hereof, for any reason (other than material breach by Buyer
hereunder), the Company shall indemnify and hold harmless such Buyer from any
and all costs, expenses, damages, losses and otherwise, with respect to the
failure of the Company to effectuate the Closing and the transactions
contemplated hereby. Without limiting the foregoing, in such event, such Buyer
shall have the right to terminate its obligations under this Agreement with
respect to itself at any time on or after such failure by the Company, without
liability of such Buyer to the Company or any other Person. No such failure or
termination of obligations of Buyer shall affect any obligation of the Company
under this Agreement to reimburse such Buyer for the expenses otherwise called
for by this Agreement. Nothing contained in this Section shall be deemed to
release any party from any liability for any breach by such party of the terms
and provisions of this Agreement or the other Transaction Documents or to impair
the right of any party to compel specific performance by any other party of its
obligations under this Agreement or the other Transaction Documents.

 

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8. 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 (i) limit or be deemed to limit in any
way any right to serve process in any manner permitted by law or (ii) operate,
or be deemed to operate, to preclude any Buyer from bringing suit or taking
other legal action against the Company in any other jurisdiction to collect on
the Company’s obligations to such Buyer or to enforce a judgment or other court
ruling in favor of such Buyer or (iii) limit, or be deemed to limit, any
provision of the Warrants which is contrary to the above. EACH PARTY HEREBY
IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO, 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. In the event that any signature is delivered by
facsimile transmission or by an e-mail which contains a portable document format
(.pdf) file of an executed signature page, such signature page shall create a
valid and binding obligation of the party executing (or on whose behalf such
signature is executed) with the same force and effect as if such signature page
were an original thereof.

(c) Headings; Gender; Certain Meanings. The headings of this Agreement are for
convenience of reference and shall not form part of, or affect the
interpretation of, this Agreement. Unless the context clearly indicates
otherwise, each pronoun herein shall be deemed to include the masculine,
feminine, neuter, singular and plural forms thereof. The terms “including,”
“includes,” “include” and words of like import shall be construed broadly as if
followed by the words “without limitation.” The terms “herein,” “hereunder,”
“hereof” and words of like import refer to this entire Agreement instead of just
the provision in which they are found. When used herein, the words “law,”
“rule,” “regulation” and the like means all

applicable laws, rules and regulations, domestic or foreign, state, provincial,
local or self-regulatory, including without limitation as to all applicable
laws, rules and regulations of or related to the United States, applicable
states, the SEC, and the Principal Market.

 

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(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 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, the other Transaction
Documents and the schedules and exhibits attached hereto and thereto and the
instruments referenced herein and therein supersede all other prior oral or
written agreements between the Buyers, the Company, their Affiliates and Persons
acting on their behalf solely with respect to the matters contained herein and
therein, and this Agreement, the other Transaction Documents, the schedules and
exhibits attached hereto and thereto and the instruments referenced herein and
therein contain the entire understanding of the parties solely with respect to
the matters covered herein and therein. No provision of this Agreement may be
amended other than by an instrument in writing signed by the Company and each of
the Buyers. No waiver shall be effective unless it is in writing and signed by
an authorized representative of the waiving party. 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, any Subsidiary or otherwise. As a material inducement for each
Buyer to enter into this Agreement, the Company expressly acknowledges and
agrees that (i) no due diligence investigation conducted by a Buyer or its
advisors, if any, or its representatives shall affect such Buyer’s right to rely
on, or modify or qualify any of, the Company’s representations and warranties
contained in this Agreement or any other Transaction Document, (ii) nothing
contained in the Registration Statement, the Prospectus or the Prospectus
Supplement shall affect such Buyer’s right to rely on, or modify or qualify any
of, the Company’s representations and warranties contained in this Agreement or
any other Transaction Document and (iii) unless a provision of this Agreement or
any other Transaction Document is expressly preceded by “except as disclosed in
the SEC Documents,” nothing contained in any of the SEC Documents shall affect
such Buyer’s right to rely on, or modify or qualify any of, the Company’s
representations and warranties contained in this Agreement or any other
Transaction Document.

 

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(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); (iii) when sent, if sent by e-mail (provided that such sent
e-mail is kept on file (whether electronically or otherwise) by the sending
party and the sending party does not receive an automatically generated message
from the recipient’s e-mail server that such e-mail could not be delivered to
such recipient); and (iv) one Business Day after deposit with an overnight
courier service with next day delivery specified, in each case, properly
addressed to the party to receive the same. The addresses and facsimile numbers
and email addresses for such communications shall be:

If to the Company:

Unilife Corporation

250 Cross Farm Lane

York PA 17406 USA

Telephone:       (717) 384-3400

Facsimile:        (717) 384-3402

Email: alan.shortall@unilife.com

Attention: Alan Shortall

With a copy (for informational purposes only) to:

Pepper Hamilton LLP

3000 Two Logan Square 18th & Arch Streets

Philadelphia, PA 19103

Telephone: (215) 981-4000

Facsimile: (215) 981-4750

Email:             abramss@pepperlaw.com

                         jonessr@pepperlaw.com

Attention:       Steven J. Abrams, Esq.

                         Scott R. Jones, Esq.

If to the Transfer Agent:

Computer Share

525 Washington Blvd.

Suite 4690

Jersey City, NJ 07310

Telephone: (201) 222-4237

Facsimile: (201) 222-4151

Email:             robbin.mayo@computershare.com

Attention:       Robbin Mayo

 

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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:

Greenberg Traurig, LLP

77 W. Wacker Drive, Suite 3100

Chicago, Illinois 60601

Telephone: (312) 456-8400

Facsimile: (312) 456-8435

Email:         liebermanp@gtlaw.com

                    mazure@gtlaw.com

Attention:    Peter H. Lieberman, Esq.

                     Eric Mazur, Esq.

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 days prior to the effectiveness of such change, provided
that Greenberg Traurig, LLP shall only be provided copies of notices sent to
Crede. 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. A copy of the e-mail transmission containing the time, date and
recipient e-mail address shall be rebuttable evidence of receipt by e-mail in
accordance with clause (iii) above.

(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, as contemplated below, any assignee of any of the Securities. The
Company shall not assign this Agreement or any rights or obligations hereunder
without the prior written consent of each of the Buyers. A Buyer may assign some
or all of its rights hereunder in connection with any transfer of any of its
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.

(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, other than the Buyer Indemnitees referred to in Section 8(k) and the
Placement Agent as specifically set forth in Section 8(o).

(i) Survival. The representations and warranties contained in this Agreement
shall survive Closing and until the earlier to occur of (i) such time as the
Buyer no longer holds any Warrants, (ii) the date the Buyer exercises the last
Warrant held by Buyer and (iii) the date the last Warrant held by Buyer shall
have expired; provided; however, that in no event shall such representations and
warranties survive for less than one year. The agreements and covenants
contained in this Agreement which specify a final time of performance shall
survive Closing and

 

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until the final time of performance of such agreement and covenant. The
agreements and covenants contained in this Agreement which do not specify a
final time of performance shall survive Closing and until the earlier to occur
of (i) such time as the Buyer no longer holds any Warrants, (ii) the date the
Buyer exercises the last Warrant held by Buyer and (iii) the date the last
Warrant held by Buyer shall have expired; provided, however, that in no event
shall such agreements and covenants survive for less than one year. To the
extent a Warrant is held by an Affiliate of the Buyer, such Warrant shall be
considered to be held by the Buyer for the purpose of this Section 8(i).

(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 holder of any
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 any of the Transaction
Documents or (b) any breach of any covenant, agreement or obligation of the
Company contained in any of 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 which is permissible under applicable law.

(ii) Promptly after receipt by an Indemnitee under this Section 8(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 in respect thereof is to be made against the Company under this
Section 8(k), deliver to the Company a written notice of the commencement
thereof, and the Company shall have the right to participate in, and, to the
extent the Company so desires, to assume control of the defense thereof with
counsel mutually satisfactory to the Company and the Indemnitee; provided,
however, that an Indemnitee shall have the right to retain its own counsel with
the fees and expenses of such counsel to be paid by the Company if: (i) the
Company has agreed in writing to pay such fees and expenses; (ii) the Company
shall have failed

 

25

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promptly to assume the defense of such Indemnified Liability and to employ
counsel reasonably satisfactory to such Indemnitee in any such Indemnified
Liability; or (iii) the named parties to any such Indemnified Liability
(including any impleaded parties) include both such Indemnitee and the Company,
and such Indemnitee shall have been advised by counsel that a conflict of
interest is likely to exist if the same counsel were to represent such
Indemnitee and the Company (in which case, if such Indemnitee notifies the
Company in writing that it elects to employ separate counsel at the expense of
the Company, then the Company shall not have the right to assume the defense
thereof and such counsel shall be at the expense of the Company), provided
further, that in the case of clause (iii) above the Company shall not be
responsible for the reasonable fees and expenses of more than one separate legal
counsel for such Indemnitee. The Indemnitee shall reasonably cooperate with the
Company in connection with any negotiation or defense of any such action or
Indemnified Liability by the Company and shall furnish to the Company all
information reasonably available to the Indemnitee which relates to such action
or Indemnified Liability. The Company shall keep the Indemnitee reasonably
apprised at all times as to the status of the defense or any settlement
negotiations with respect thereto. The Company shall not be liable for any
settlement of any action, claim or proceeding effected without its prior written
consent, provided, however, that the Company shall not unreasonably withhold,
delay or condition its consent. The Company shall not, without the prior written
consent of the Indemnitee, consent to entry of any judgment or enter into any
settlement or other compromise which 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 Liability or litigation, and
such settlement shall not include any admission as to fault on the part of the
Indemnitee. Following indemnification as provided for hereunder, the Company
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. The failure to deliver written notice to the Company within a
reasonable time of the commencement of any such action shall not relieve the
Company of any liability to the Indemnitee under this Section 8(k), except to
the extent that the Company is materially and adversely prejudiced in its
ability to defend such action.

(iii) The indemnification required by this Section 8(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.

(iv) The indemnity agreement contained herein shall be in addition to (A) any
cause of action or similar right of the Indemnitee against the Company or
others, and (B) any liabilities the Company may be subject to pursuant to the
law.

(l) 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. No specific
representation or warranty shall limit the generality or applicability of a more
general representation or warranty.

 

26

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(m) Remedies. Each Buyer and each holder of any 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 specific performance and/or temporary, preliminary and
permanent injunctive or other equitable relief from any court of competent
jurisdiction in any such case without the necessity of proving actual damages
and without posting a bond or other security.

(n) 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) Acknowledgement. The Buyers acknowledge that no escrow is being be used to
effectuate the delivery of the Common Shares and the Warrants at the Closing.
Accordingly, each Buyer agrees that should the Company fail to deliver the
Common Shares and/or the Warrants to such Buyer at the Closing, such Buyer shall
have no recourse against the Placement Agent for such failure by the Company;
provided, the foregoing shall in no way limit the rights and remedies of any
Buyer against the Company. The Placement Agent shall be a third party
beneficiary of this Section 8(o).

(p) Payment Set Aside; Currency. To the extent that the Company makes a payment
or payments to any Buyer hereunder or pursuant to any of the other Transaction
Documents or any of 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. Unless otherwise expressly indicated, all dollar
amounts referred to in this Agreement and the other Transaction Documents are in
United States Dollars (“U.S. Dollars”), and all amounts owing under this
Agreement and all other Transaction Documents shall be paid in U.S. Dollars. All
amounts denominated in other currencies (if any) shall be converted in the
U.S. Dollar equivalent amount in accordance with the Exchange Rate on the date
of calculation. “Exchange Rate” means, in relation to any amount of currency to
be converted into U.S. Dollars pursuant to this Agreement, the U.S. Dollar spot
exchange rate as published in the Wall Street Journal on the relevant date of
calculation.

[signature pages follow]

 

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Buyer and the Company have caused their respective signature page to this
Agreement to be duly executed as of the date first written above.

 

COMPANY:

 

UNILIFE CORPORATION

By:   /s/ Alan Shortall   Name: Alan Shortall   Title: Chief Executive Officer

[Signature Page to Securities Purchase Agreement]

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Buyer and the Company have caused their respective signature page to this
Agreement to be duly executed as of the date first written above.

 

BUYER:

 

CREDE CG II, LTD.

By:   /s/ Terren S. Peizer   Name: Terren S. Peizer   Title: Managing Director

[Signature Page to Securities Purchase Agreement]

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

SCHEDULE OF BUYERS (include page for each Buyer)

Name of Buyer: Crede CG II, Ltd., an entity organized under the laws of Bermuda

UNITS EQUAL TO ONE SHARE OF COMMON STOCK AND ONE WARRANT TO PURCHASE ONE-THIRD
OF ONE SHARE OF COMMON STOCK:

PURCHASE PRICE PER UNIT EQUAL TO $2.241667.

AGGREGATE NUMBER OF UNITS TO BE PURCHASED: 4,460,966 UNITS FOR AN AGGREGATE
PURCHASE PRICE EQUAL TO $10,000,000.

As a result: 4,460,966 shares of Common Stock will be issued and warrants to
initially purchase 1,486,988 shares of Common Stock will be purchased. Initial
warrant exercise price per share will be equal to $3.00. Each Warrant shall
contain a 9.9% beneficial ownership blocker provision.

The Company represents and warrants to the above Buyer that based upon the above
and the number of outstanding shares of Common Stock as set forth in
Section 3(r) hereof, upon execution of this Agreement Buyer will beneficially
own (within the meaning of Section 13(d) of the 1934 Act and the rules and
regulations thereunder) no more than 9.9% of the Company’s Common Stock.

[Schedule to Securities Purchase Agreement]

 

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Exhibit A

Form of Warrant

UNILIFE CORPORATION

WARRANT TO PURCHASE COMMON STOCK

Warrant No.:            

Date of Issuance: February [•], 2013 (“Issuance Date”)

Unilife Corporation, a Delaware corporation (the “Company”), hereby certifies
that, for good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, [•], the registered holder hereof or its permitted
assigns (the “Holder”), is entitled, subject to the terms set forth below, to
purchase from the Company, at the Exercise Price (as defined below) then in
effect, upon exercise of this Warrant to Purchase Common Stock (including any
Warrants to Purchase Common Stock issued in exchange, transfer or replacement
hereof, the “Warrant”), at any time or times on or after the Issuance Date but
not after 11:59 p.m., New York time, on the Expiration Date , [•] (subject to
adjustment as provided herein) fully paid and non-assessable shares of Common
Stock (as defined below) (the “Warrant Shares”). Except as otherwise defined
herein, capitalized terms in this Warrant shall have the meanings set forth in
Section 16.

This Warrant is one of the Warrants to Purchase Common Stock (the “SPA
Warrants”) issued pursuant to that certain Securities Purchase Agreement, dated
as of February [•], 2013, by and among the Company and the investor(s)
thereunder (the “Buyer” or “Buyers” as applicable) referred to therein (the
“Securities Purchase Agreement”).

1. EXERCISE OF WARRANT.

(a) Mechanics of Exercise. Subject to the terms and conditions hereof
(including, without limitation, the limitations set forth in Section1(f)), this
Warrant may be exercised by the Holder on any day on or after the Issuance Date
in whole or in part, by delivery (whether via facsimile or otherwise) of a
written notice, in the form attached hereto as Exhibit A (the “Exercise Notice”)
along with payment to the Company of an amount equal to the Exercise Price in
effect on the date of such exercise multiplied by the number of Warrant Shares
as to which this Warrant was so exercised (in respect of such specific exercise,
the “Aggregate Exercise Price”) in cash or via wire transfer of immediately
available funds if the Holder did not notify the Company in such Exercise Notice
that such exercise was made pursuant to a Cashless Exercise (as defined in
Section 1(d)). The Holder shall not be required to deliver the original of this
Warrant in order to effect an exercise hereunder. Execution and delivery of an
Exercise Notice with respect to less than all of the Warrant Shares shall have
the same effect as cancellation of the original of this Warrant certificate and
issuance of a new Warrant certificate evidencing the right to purchase the
remaining number of Warrant Shares. Execution and delivery of an Exercise Notice
for all of the then-remaining Warrant Shares shall have the same effect as
cancellation of the original of this Warrant certificate after delivery of the
Warrant Shares in accordance with the terms hereof. On or before the first
Trading Day following the date on which the Company has received an Exercise
Notice, the Company shall transmit by facsimile an acknowledgment of
confirmation of receipt of such Exercise Notice and Aggregate

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Exercise Price, in the form attached hereto as Exhibit C, to the Holder and the
Company’s transfer agent (the “Transfer Agent”). On or before the third Trading
Day following the date on which the Company has received such Exercise Notice
and the Aggregate Exercise Price, the Company shall (X) provided that the
Transfer Agent is participating in The Depository Trust Company (“DTC”) Fast
Automated Securities Transfer Program (which the Company shall cause the
Transfer Agent to do at Holder’s request), upon the request of the Holder,
credit such aggregate number of shares of Common Stock to which the Holder is
entitled pursuant to such exercise to the Holder’s or its designee’s balance
account with DTC through its Deposit/Withdrawal at Custodian system, or (Y) if
the Transfer Agent is not participating in the DTC Fast Automated Securities
Transfer Program, issue and deliver to the Holder or, at the Holder’s
instruction pursuant to the Exercise Notice, the Holder’s agent or designee, in
each case, sent by reputable overnight courier to the address as specified in
the applicable Exercise Notice, a certificate, registered in the Company’s share
register in the name of the Holder or its designee (as indicated in the
applicable Exercise Notice), for the number of shares of Common Stock to which
the Holder is entitled pursuant to such exercise. Upon delivery of an Exercise
Notice and the Aggregate Exercise Price, the Holder shall be deemed for all
corporate purposes to have become the holder of record of the Warrant Shares
with respect to which this Warrant has been exercised, irrespective of the date
such Warrant Shares are credited to the Holder’s DTC account or the date of
delivery of the certificates evidencing such Warrant Shares (as the case may
be). If this Warrant is submitted in connection with any exercise pursuant to
this Section 1(a) and the number of Warrant Shares represented by this Warrant
submitted for exercise is greater than the number of Warrant Shares being
acquired upon an exercise, then, at the request of the Holder and upon surrender
hereof by the Holder at the principal office of the Company, the Company shall
as soon as practicable and in no event later than three Trading Days after any
exercise and at its own expense, issue and deliver to the Holder (or its
designee) a new Warrant (in accordance with Section 7(d)) representing the right
to purchase the number of Warrant Shares purchasable immediately prior to such
exercise under this Warrant, less the number of Warrant Shares with respect to
which this Warrant is exercised. No fractional shares of Common Stock are to be
issued upon the exercise of this Warrant, but rather the number of shares of
Common Stock to be issued shall be rounded down to the nearest whole number. The
Company shall pay any and all taxes and fees which may be payable with respect
to the issuance and delivery of Warrant Shares upon exercise of this Warrant.
Notwithstanding anything to the contrary contained in this Warrant, all Warrant
Shares shall be delivered via DWAC.

(b) Exercise Price. For purposes of this Warrant, “Exercise Price” means $3.00,
subject to adjustment as provided herein.

(c) Company’s Failure to Timely Deliver Securities. If the Aggregate Exercise
Price has been delivered to the Company and the Company shall fail, for no
reason of its own and despite using reasonable best efforts, to issue (or cause
to be issued) to the Holder within three Trading Days after receipt of the
applicable Exercise Notice (and the Aggregate Exercise Price) or Exchange
Notice, as applicable, a certificate for the number of shares of Common Stock to
which the Holder is entitled and register such shares of Common Stock on the
Company’s share register or to credit the Holder’s balance account with DTC for
such number of shares of Common Stock to which the Holder is entitled upon the
Holder’s exercise of this Warrant (as the case may be), then, in addition to all
other remedies available to the Holder, the Company shall pay in cash to the
Holder on each day after such third Trading Day that the issuance of such

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shares of Common Stock is not timely effected an amount equal to 2% of the
product of (A) the aggregate number of shares of Common Stock not issued to the
Holder on a timely basis and to which the Holder is entitled and (B) the Closing
Sale Price of the Common Stock on the Trading Day immediately preceding the last
possible date on which the Company could have issued such shares of Common Stock
to the Holder without violating Section 1(a). In addition to the foregoing, if
within three Trading Days after the Company’s receipt of the applicable Exercise
Notice or Exchange Notice, as applicable, the Company shall fail to issue and
deliver a certificate to the Holder and register such shares of Common Stock on
the Company’s share register or to credit the Holder’s balance account with DTC
for the number of shares of Common Stock to which the Holder is entitled upon
the Holder’s exercise or exchange hereunder (as the case may be), and if on or
after such third (3rd) Trading Day the Holder (or any other Person in respect,
or on behalf, of 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 all or any portion of the number of shares of Common Stock, or a sale
of a number of shares of Common Stock equal to all or any portion of the number
of shares of Common Stock, issuable upon such exercise or exchange that the
Holder so anticipated receiving from the Company, then, in addition to all other
remedies available to the Holder, the Company shall, within three 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 Holder’s total purchase price (including
brokerage commissions and other out-of-pocket expenses, if any) for the shares
of Common Stock so purchased (including, without limitation, by any other Person
in respect, or on behalf, of the Holder) (the “Buy-In Price”), at which point
the Company’s obligation to so issue and deliver such certificate or credit the
Holder’s balance account with DTC for the number of shares of Common Stock to
which the Holder is entitled upon the Holder’s exercise or exchange hereunder
(as the case may be) (and to issue such shares of Common Stock) shall terminate,
or (ii) promptly honor its obligation to so issue and deliver to the Holder a
certificate or certificates representing such shares of Common Stock or credit
the Holder’s balance account with DTC for the number of shares of Common Stock
to which the Holder is entitled upon the Holder’s exercise or exchange hereunder
(as the case may be) 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 multiplied by (B) the lowest Closing Sale Price of the Common Stock
on any Trading Day during the period commencing on the date of the applicable
Exercise Notice or Exchange Notice, as the case may be, and ending on the date
of such issuance and payment under this clause (ii).

(d) Cashless Exercise. Notwithstanding anything contained herein to the contrary
(other than Section 1(f) below), if at the time of an exercise hereof any Equity
Conditions Failure shall then exist, then the Holder may, in its sole
discretion, exercise this Warrant in whole or in part and, in lieu of making the
cash payment otherwise contemplated to be made to the Company upon such exercise
in payment of the Aggregate Exercise Price, elect instead to make a cashless
exercise (each a “Cashless Exercise”) under this Section 1(d). A Cashless
Exercise under this Section 1(d) may be made, at the election of the Holder from
time to time and irrespective of any other election to make a Cashless Exercise,
so that upon such exercise Holder shall receive the “Net Number” of shares of
Common Stock determined according to the following formula:

Net Number = (A x B) - (A x C)

                           B

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For purposes of the foregoing formula:

 

  A = the total number of shares with respect to which this Warrant is then
being exercised.

 

  B = as applicable: (i) the Closing Sale Price of the Common Stock on the
Trading Day immediately preceding the date of the applicable Exercise Notice if
such Exercise Notice is (1) both executed and delivered pursuant to Section 1(a)
on a day that is not a Trading Day or (2) both executed and delivered pursuant
to Section 1(a) on a Trading Day prior to the opening of “regular trading hours”
(as defined in Rule 600(b)(64) of Regulation NMS promulgated under the federal
securities laws) on such Trading Day, (ii) the Bid Price of the Common Stock as
of the time of the Holder’s execution of the applicable Exercise Notice if such
Exercise Notice is executed during “regular trading hours” on a Trading Day and
is delivered within two hours thereafter pursuant to Section 1(a) or (iii) the
Closing Sale Price of the Common Stock on the date of the applicable Exercise
Notice if the date of such Exercise Notice is a Trading Day and such Exercise
Notice is both executed and delivered pursuant to Section 1(a) after the close
of “regular trading hours” on such Trading Day.

 

  C = the Exercise Price then in effect for the applicable Warrant Shares at the
time of such exercise.

Notwithstanding anything to the contrary contained herein, exercise of this
Warrant on a cashless basis may also be made from time to time at the election
of the Holder (and irrespective of any election to make a Cashless Exercise
under this paragraph (d)), pursuant to the exchange provisions of Section 4 of
this Warrant.

 

(e) Disputes. In the case of a dispute as to the determination of the Exercise
Price or the arithmetic calculation of the number of Warrant Shares to be issued
pursuant to the terms hereof (including, without limitation, the Net Number),
the Company shall promptly issue to the Holder the number of Warrant Shares that
are not disputed, provided that following such issuance to Holder such dispute
shall be resolved in accordance with Section 13.

(f) Limitations on Exercises and Exchanges. Notwithstanding anything to the
contrary contained in this Warrant, this Warrant shall not be exercisable or
exchangeable by the Holder hereof to the extent (but only to the extent) that
the Holder or any of its affiliates would beneficially own in excess of 9.9%
(the “Maximum Percentage”) of the Common Stock following such exercise. To the
extent the above limitation applies, the determination of whether this Warrant
shall be exercisable or exchangeable (vis-à-vis other convertible, exercisable
or exchangeable securities owned by the Holder or any of its affiliates) and of
which such securities shall be exercisable or exchangeable (as among all such
securities owned by the Holder) shall, subject to such Maximum Percentage
limitation, be determined on the basis of the first submission to the Company
for conversion, exercise or exchange (as the case may be). No prior inability to
exercise or exchange this Warrant pursuant to this paragraph shall have any
effect on the applicability of the provisions of this paragraph with respect to
any subsequent determination

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of exercisability or exchangeability. For the purposes of this paragraph,
beneficial ownership and all determinations and calculations (including, without
limitation, with respect to calculations of percentage ownership) shall be
determined in accordance with Section 13(d) of the 1934 Act (as defined in the
Securities Purchase Agreement) and the rules and regulations promulgated
thereunder. The provisions of this paragraph shall be 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 Maximum Percentage beneficial ownership limitation herein
contained or to make changes or supplements necessary or desirable to properly
give effect to such Maximum Percentage limitation. The limitations contained in
this paragraph shall apply to a successor Holder of this Warrant. The holders of
Common Stock shall be third party beneficiaries of this paragraph and the
Company may not waive this paragraph without the consent of holders of a
majority of its Common Stock. For any reason at any time, upon the written or
oral request of the Holder, the Company shall within three Business Days confirm
orally and in writing to the Holder the number of shares of Common Stock then
outstanding, including by virtue of any prior conversion or exercise or exchange
of convertible or exercisable or exchangeable securities into Common Stock,
including, without limitation, pursuant to this Warrant or securities issued
pursuant to the Securities Purchase Agreement.

(g) Exercise/Exchange Cap. Notwithstanding any other provision of this Warrant
and in order to comply with the rules and regulations of the Principal Market
and the Australian Securities Exchange (the “ASX”), the Company shall not issue
any shares of Common Stock upon exercise or exchange of this Warrant if the
issuance of such shares of Common Stock would, when added to the number of
Common Shares (as defined in the Securities Purchase Agreement) issued pursuant
to the Securities Purchase Agreement, exceed 6,000,000 shares (which number of
shares shall be adjusted as necessary upon the occurrence of any of the events
that would cause and adjustment to the number of Warrant Shares issuable
hereunder) in the aggregate (the “Exchange Cap”), except that such limitation
shall not apply in the event that the Company (A) obtains the approval of its
stockholders as required by the applicable rules of the Principal Market and ASX
for issuances of shares of Common Stock in excess of such amount, (B) is no
longer traded on the Principal Market or ASX, or (C) obtains a written opinion
from outside counsel to the Company that such approval is not required, which
opinion shall be reasonably satisfactory to the Holder.

(h) Insufficient Authorized Shares. The Company shall at all times keep reserved
for issuance under this Warrant a number of shares of Common Stock as shall be
necessary to satisfy the Company’s obligation to issue shares of Common Stock
hereunder (without regard to any limitation otherwise contained herein with
respect to the number of shares of Common Stock that may be acquirable upon
exercise or exchange of this Warrant). If, notwithstanding the foregoing, and
not in limitation thereof, at any time while any of the SPA Warrants remain
outstanding the Company does not have a sufficient number of authorized and
unreserved shares of Common Stock to satisfy its obligation to reserve for
issuance upon exercise or exchange of the SPA Warrants at least a number of
shares of Common Stock equal to the number of shares of Common Stock as shall
from time to time be necessary to effect the exercise or exchange of all of the
SPA Warrants then outstanding (the “Required Reserve Amount”) (an “Authorized
Share Failure”), then the Company shall immediately take all action necessary to
increase the Company’s authorized shares of Common Stock to an amount sufficient
to allow the Company

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to reserve the Required Reserve Amount for all the SPA Warrants then
outstanding. Without limiting the generality of the foregoing sentence, as soon
as practicable after the date of the occurrence of an Authorized Share Failure,
but in no event later than ninety (90) days after the occurrence of such
Authorized Share Failure, the Company shall hold a meeting of its shareholders
for the approval of an increase in the number of authorized shares of Common
Stock. In connection with such meeting, the Company shall provide each
shareholder with a proxy statement and shall use its reasonable efforts to
solicit its shareholders’ approval of such increase in authorized shares of
Common Stock.

(i) Activity Restrictions. (i) For so long as Holder or any of its Affiliates
holds any Warrants or any Warrant Shares, neither Holder nor any Affiliate
will: (i) vote any shares of Common Stock beneficially owned by it, solicit any
proxies, or seek to advise or influence any Person with respect to any voting
securities of the Company; (ii) engage or participate in any actions, plans or
proposals which relate to or would result in (a) acquiring additional securities
of the Company, alone or together with any other Person, which would result in
Buyer or its Affiliates beneficially owning (within the meaning of Section 13(d)
under the 1934 Act) more than 9.9% of the Common Stock, (b) an extraordinary
corporate transaction, such as a merger, reorganization or liquidation,
involving Company or any of its Subsidiaries, (c) a sale or transfer of a
material amount of assets of the Company or any of its Subsidiaries, (d) any
change in the present board of directors or management of the Company, including
any plans or proposals to change the number or term of directors or to fill any
existing vacancies on the board, (e) any material change in the present
capitalization or dividend policy of the Company, (f) any other material change
in the Company’s business or corporate structure, including but not limited to,
if the Company is a registered closed-end investment company, any plans or
proposals to make any changes in its investment policy for which a vote is
required by Section 13 of the Investment Company Act of 1940, (g) changes in the
Company’s charter, bylaws or instruments corresponding thereto or other actions
which may impede the acquisition of control of the Company by any Person,
(h) causing a class of securities of the Company to be delisted from a national
securities exchange or to cease to be authorized to be quoted in an inter-dealer
quotation system of a registered national securities association, (i) a class of
equity securities of the Company becoming eligible for termination of
registration pursuant to Section 12(g)(4) of the Act, or (j) any action,
intention, plan or arrangement similar to any of those enumerated above; or
(iii) request the Company or its directors, officers, employees, agents or
representatives to amend or waive any provision of this paragraph. The
restrictions contained in this paragraph (i) shall not limit Holder’s rights to
enforce its rights or exercise its rights as to the Securities or under this
Warrant or the Transaction Documents.

(ii) Provided that the Company is in compliance with its obligations under this
Warrant and the other Transaction Documents and no Equity Condition Failure
shall have occurred, if the trading price on the Principal Market at the time of
an exercise of this Warrant is greater than the then applicable Exercise Price
then in effect, then in respect of such particular exercise Holder may only
exercise this Warrant for a cash exercise price (and not by means of a Cashless
Exercise under Section 1(d) above or on a cashless basis under Section 4).

2. ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF WARRANT SHARES. The Exercise Price
and number of Warrant Shares issuable upon exercise of this Warrant are subject
to adjustment from time to time as set forth in this Section 2.

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(a) Stock Dividends and Splits. Without limiting any provision of Section 3, if
the Company, at any time on or after the date of the Securities Purchase
Agreement, (i) pays a stock dividend on one or more classes of its then
outstanding shares of Common Stock or otherwise makes a distribution on any
class of capital stock that is payable in shares of Common Stock,
(ii) subdivides (by any stock split, stock dividend, recapitalization or
otherwise) one or more classes of its then outstanding shares of Common Stock
into a larger number of shares or (iii) combines (by combination, reverse stock
split or otherwise) one or more classes of its then outstanding shares of Common
Stock into a smaller number of shares, then in each such case the Exercise Price
shall be multiplied by a fraction of which the numerator shall be the number of
shares of Common Stock outstanding immediately before such event and of which
the denominator shall be the number of shares of Common Stock outstanding
immediately after such event. Any adjustment made pursuant to clause (i) of this
paragraph shall become effective immediately after the record date for the
determination of shareholders entitled to receive such dividend or distribution,
and any adjustment pursuant to clause (ii) or (iii) of this paragraph shall
become effective immediately after the effective date of such subdivision or
combination. If any event requiring an adjustment under this paragraph occurs
during the period that an Exercise Price is calculated hereunder, then the
calculation of such Exercise Price shall be adjusted appropriately to reflect
such event.

(b) Return of capital. In a return of capital the number of Warrants must remain
the same, and the Exercise Price of each Warrant must be reduced by the same
amount as the amount of cash or value of shares, securities, or other property
returned in relation to each share of Common Stock.

(c) Reduction of capital. In a reduction of capital by a cancellation of paid up
capital that is lost or not represented by available assets where no securities
are cancelled – the number of Warrant Shares and the Exercise Price of each
Warrant must remain unaltered.

(d) Pro-rata cancellation of capital. In a pro-rata cancellation of capital the
number of Warrant Shares must be reduced in the same ratio as outstanding shares
of Common Stock on issue and the Exercise Price of each Warrant must be amended
in inverse proportion to that ratio.

(e) Bonus shares and stock dividends. If there is a pro-rata bonus issue, or a
pro-rata dividend to be paid only in shares of Common Stock, to the holders of
outstanding shares of Common Stock, the number of Warrant Shares to be issued
upon exercise of the Warrants will be increased by the number of Warrant Shares
which the holder of the Warrants would have received if the Warrants had been
exercised before the record date for the bonus issue or dividend.

(f) Pro-rata issue. The Warrant does not confer a right to participate in new
issues of Common Stock unless the Holder has first exercised the Warrant and
such exercise took place on or before the record date for determining
entitlements to the issue. A Holder has the right to exercise their Warrant
prior to the date for determining entitlements to participate in any issues made
during the term of the Warrant, and will be granted a period of at least five
Business Days before the relevant record date to exercise the Warrant. In the
event that a pro rata issue of the Common Stock (other than a bonus issue) is
made to the Company’s stockholders, the Exercise Price of the Warrant shall be
reduced in accordance with the formula in ASX Listing Rule 6.22.2.

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(g) Notice of Adjustment. Upon any adjustment of the Exercise Price, and/or any
increase or decrease in the number of Warrant Shares, the Company shall give
written notice thereof to the Holder of the Warrant at the last address of the
Holder herein. The notice, shall state the Exercise Price resulting from such
adjustment and the increase or decrease, if any, in the number of Warrant
Shares, setting forth in reasonable detail the method of calculation and the
facts upon which such calculation is based.

(h) In any other case. The number of Warrant Shares or the Exercise Price, or
both, must be reorganized so that the holder of the Warrant will not receive a
benefit that holders of the Company’s outstanding shares of Common Stock do not
receive.

(i) Number of Warrant Shares. Notwithstanding anything to the contrary contained
herein, upon an Exchange as set forth in Section 4, the number of Warrant Shares
for which this Warrant is exercisable immediately following such Exchange shall
be equal to (i) the number of Warrant Shares for which this Warrant was
exercisable immediately prior to such Exchange less (ii) the number of Warrant
Shares under the portion of the Warrant exchanged in Exchange (e.g., if this
Warrant is exercisable (without regard to limitations hereunder) for 100 shares
immediately prior to an Exchange and 30% of the Warrant is submitted for
Exchange (i.e., the Warrant to acquire 30 Warrant Shares is submitted for
Exchange), then this Warrant will be exercisable for 70 Warrant Shares
immediately following the completion of such Exchange), and the number of such
Warrant Shares issuable hereunder shall automatically be adjusted, as necessary,
to enable to the Company to comply with its obligations to issue the full
Exchange Number under Section 4 upon any Exchange hereunder.

(j) Calculations. All calculations under this Section 2 shall be made by
rounding to the nearest 1/10000th of cent and the nearest 1/100th of a share, as
applicable. The number of shares of Common Stock outstanding at any given time
shall not include shares owned or held by or for the account of the Company, and
the disposition of any such shares shall be considered an issue or sale of
Common Stock.

3. FUNDAMENTAL TRANSACTIONS.

(a) Fundamental Transactions. If any liquidation, capital reorganization,
reclassification of the capital stock of the Company, consolidation or merger of
the Company with another entity in which the Company is not the surviving
corporation, or sale, transfer or other disposition of all or substantially all
of the Company’s assets to another entity shall be effected (any such
transaction being hereinafter referred to as a “Fundamental Transaction”), then
this Warrant shall be deemed to be exercised in full immediately upon the
closing of such Fundamental Transaction (without the payment of any
consideration by the Holder) and the Holder shall thereafter have the right to
receive in lieu of the Warrant Shares issuable upon such exercise of this
Warrant, such shares of stock, securities or assets (including cash) as would
have been issuable or payable with respect to or in exchange for a number of
Warrant Shares equal to the number of Warrant Shares immediately theretofore
issuable upon exercise of this Warrant, had such reorganization,
reclassification, consolidation, merger, sale, transfer or other disposition not
taken place.

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(b) Black Scholes Value—FT. Notwithstanding the foregoing and the provisions of
Section 3(a), at the request of the Holder at any time prior to the closing of a
Fundamental Transaction, the Company shall, at of the time of closing of the
Fundamental Transaction, purchase this Warrant from the Holder on the date of
the consummation of such Fundamental Transaction by paying to the Holder cash in
an amount equal to the Black Scholes Value—FT.

4. EXCHANGE RIGHTS. In addition to the rights of the Holder under Section 1,
this Warrant shall be exchangeable by the Holder on a cashless basis as further
set forth below.

 

  (a) Exchange Right. The Holder shall be entitled at any time and from time to
time from and after the date that is 30 days after the Issuance Date and prior
to the Expiration Date, by written notice to the Company in the form of Exhibit
B attached hereto (an “Exchange Notice”) to exchange (an “Exchange”) all or any
portion of this Warrant for cash or, if elected by the Company in compliance
with Section 1(g), fully paid and non-assessable shares of Common Stock, all as
further set forth in this Section 4 (subject to compliance at all times with
Section 4(e)). If the Company does not elect to honor such Exchange in shares of
Common Stock (or is not permitted to elect to honor such Exchange in shares of
Common Stock due to Section 1(f), Section 1(g) or Section 4(e)), then the
Company shall pay to the holder, within three Business Days after receipt of the
applicable Exchange Notice, the Exchange Amount in cash in respect of such
Exchange.

(b) Exchange Number. If the Company is permitted to honor an Exchange by issuing
shares of Common Stock in respect thereof, then the number of shares of Common
Stock issuable in respect of such Exchange shall be determined by dividing
(x) the Exchange Amount (as defined below) in respect of such Exchange by
(y) the Exchange Price (as defined below) in respect of such Exchange (such
number of shares of Common Stock so issuable being the “Exchange Number”).

 

  (c) Definitions.

(i) “Exchange Amount” means the Black-Scholes Exchange Value of the portion of
the Warrant being exchanged pursuant to Section 4(a), determined as of the
applicable Exchange Date.

(ii) “Exchange Price” means the Closing Bid Price as of two Trading Days prior
to the Exchange Date.

 

  (d) Mechanics of Exchange.

(i) Optional Exchange. To exchange any Exchange Amount on any date (an “Exchange
Date”), the Holder shall transmit by facsimile (or otherwise deliver), for
receipt on such date, a copy of an executed Exchange Notice. The Holder shall
not be required to deliver the original of this Warrant in order to effect an
exchange hereunder.

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Execution and delivery of an Exchange Notice with respect to less than all of
the Warrant Shares shall have the same effect as cancellation of the original of
this Warrant and issuance of a new Warrant evidencing the right to purchase the
remaining number of Warrant Shares. Execution and delivery of an Exchange Notice
for all of the then-remaining Warrant Shares shall have the same effect as
cancellation of the original of this Warrant after delivery of the Warrant
Shares in accordance with the terms hereof.

(ii) Exchange for Shares of Common Stock. Subject to Section 4(e), if the
Company is permitted to elect, and has elected, to pay the Exchange Amount in
shares of Common Stock in respect of a specific Exchange Notice, which election
shall be made on or before the first Trading Day following the date on which the
Company has received such Exchange Notice, the Company shall transmit by
facsimile an acknowledgment of confirmation of receipt of such Exchange Notice,
in the form attached hereto as Exhibit C, to the Holder and the Transfer Agent
and stating that such Exchange Notice shall be honored in shares of Common
Stock. In such event, then on or before the third Trading Day following the date
on which the Company has received such Exchange Notice, the Exchange Number of
shares of Common Stock shall be issued to Holder, or at Holder’s instruction, as
if such shares of Common Stock were issuable upon an exercise under Section 1
hereof.

(iii) Equity Condition Failure. Notwithstanding the above, if at the time on an
Exchange Date, an Equity Condition Failure is reasonably likely to occur or has
occurred and is still then continuing, then the Company shall not be permitted
to elect to honor such Exchange in shares of Common Stock and shall instead
honor such Exchange in cash.

(iv) Disputes. Dispute as to the determination of the Exchange Amount, the
Exchange Price or the arithmetic calculation of the number of Warrant Shares to
be issued pursuant to the terms hereof, and shares subject to such dispute,
shall be handled in the same manner as for disputes under Section 1(e) hereof.

(e) Restrictions on Exchange for Shares of Common Stock. Notwithstanding any
other term of this Warrant, if there is a legal or regulatory impediment
(including under the requirements of the ASX Listing Rules) to the Company
complying with its obligations under this Section 4 (including the requirement
for the Company to Exchange the Warrant for shares of Common Stock upon receipt
of an Exchange Notice), then the terms of this Warrant will be deemed to exclude
the right to Exchange the Warrant for shares of Common Stock under this
Section 4 and the Company shall instead honor such Exchange in cash.

5. NONCIRCUMVENTION. The Company hereby covenants and agrees that the Company
will not, by amendment of its Certificate of Incorporation (as defined in the
Securities Purchase Agreement), Bylaws (as defined in the Securities Purchase
Agreement) or through any reorganization, transfer of assets, consolidation,
merger, scheme of arrangement, dissolution, issue or sale of securities, or any
other voluntary action, avoid or seek to avoid the observance or performance of
any of the terms of this Warrant, and will at all times in good faith carry out
all the provisions of this Warrant and take all action as may be required to
protect the rights of the Holder. Without limiting the generality of the
foregoing, the Company (i) shall not increase the par value of any shares of
Common Stock receivable upon the exercise of this Warrant above the

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Exercise Price then in effect, (ii) shall take all such actions as may be
necessary or appropriate in order that the Company may validly and legally issue
fully paid and non-assessable shares of Common Stock upon the exercise of this
Warrant, and (iii) shall, so long as any of the SPA Warrants are outstanding,
take all action necessary to reserve and keep available out of its authorized
and unissued shares of Common Stock, solely for the purpose of effecting the
exercise of the SPA Warrants, the maximum number of shares of Common Stock as
shall from time to time be necessary to effect the exercise of the SPA Warrants
then outstanding (without regard to any limitations on exercise).

6. WARRANT HOLDER NOT DEEMED A STOCKHOLDER. The Holder, solely in its capacity
as a holder of this Warrant, shall not be entitled to vote or receive dividends
or be deemed the holder of share capital of the Company for any purpose, nor
shall anything contained in this Warrant be construed to confer upon the Holder,
solely in its capacity as the Holder of this Warrant, any of the rights of a
stockholder of the Company or any right to vote, give or withhold consent to any
corporate action (whether any reorganization, issue of stock, reclassification
of stock, consolidation, merger, conveyance or otherwise), receive notice of
meetings, receive dividends or subscription rights, or otherwise, prior to the
issuance to the Holder of the Warrant Shares which it is then entitled to
receive upon the due exercise of this Warrant. In addition, nothing contained in
this Warrant shall be construed as imposing any liabilities on the Holder to
purchase any securities (upon exercise of this Warrant or otherwise) or as a
stockholder of the Company, whether such liabilities are asserted by the Company
or by creditors of the Company.

7. REISSUANCE OF WARRANTS.

(a) Transfer of Warrant. If this Warrant is to be transferred, the Holder shall
surrender this Warrant to the Company, whereupon the Company will forthwith
issue and deliver upon the order of the Holder a new Warrant (in accordance with
Section 7(d)), registered as the Holder may request, representing the right to
purchase the number of Warrant Shares being transferred by the Holder and, if
less than the total number of Warrant Shares then underlying this Warrant is
being transferred, a new Warrant (in accordance with Section 7(d)) to the Holder
representing the right to purchase the number of Warrant Shares not being
transferred.

(b) Lost, Stolen or Mutilated Warrant. Upon receipt by the Company of evidence
reasonably satisfactory to the Company of the loss, theft, destruction or
mutilation of this Warrant (as to which a written certification and the
indemnification contemplated below shall suffice as such evidence), and, in the
case of loss, theft or destruction, of any indemnification undertaking by the
Holder to the Company in customary and reasonable form and, in the case of
mutilation, upon surrender and cancellation of this Warrant, the Company shall
execute and deliver to the Holder a new Warrant (in accordance with
Section 7(d)) representing the right to purchase the Warrant Shares then
underlying this Warrant.

(c) Exchangeable for Multiple Warrants. This Warrant is exchangeable, upon the
surrender hereof by the Holder at the principal office of the Company, for a new
Warrant or Warrants (in accordance with Section 7(d)) representing in the
aggregate the right to purchase the number of Warrant Shares then underlying
this Warrant, and each such new Warrant will represent the right to purchase
such portion of such Warrant Shares as is designated by the Holder at the time
of such surrender; provided, however, no warrants for fractional shares of
Common Stock shall be given.

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(d) Issuance of New Warrants. Whenever the Company is required to issue a new
Warrant pursuant to the terms of this Warrant, such new Warrant (i) shall be of
like tenor with this Warrant, (ii) shall represent, as indicated on the face of
such new Warrant, the right to purchase the Warrant Shares then underlying this
Warrant (or in the case of a new Warrant being issued pursuant to Section 7(a)
or Section 7(c), the Warrant Shares designated by the Holder which, when added
to the number of shares of Common Stock underlying the other new Warrants issued
in connection with such issuance, does not exceed the number of Warrant Shares
then underlying this Warrant), (iii) shall have an issuance date, as indicated
on the face of such new Warrant which is the same as the Issuance Date, and
(iv) shall have the same rights and conditions as this Warrant.

8. NOTICES. Whenever notice is required to be given under this Warrant, unless
otherwise provided herein, such notice shall be given in accordance with the
notice provision of the of the Securities Purchase Agreement. The Company shall
provide the Holder with prompt written notice of all actions taken pursuant to
this Warrant. Without limiting the generality of the foregoing, the Company will
give written notice to the Holder as soon as practicable upon each adjustment of
the Exercise Price and the number of Warrant Shares, setting forth in reasonable
detail, and certifying, the calculation of such adjustment(s). To the extent
that any notice provided hereunder (whether under this Section 8 or otherwise)
constitutes, or contains, material, non-public information regarding the Company
or any of its Subsidiaries, the Company shall simultaneously file such notice
with the SEC (as defined in the Securities Purchase Agreement) pursuant to a
Current Report on Form 8-K. It is expressly understood and agreed that the time
of execution specified by the Holder in each Exercise Notice shall be definitive
and may not be disputed or challenged by the Company.

9. AMENDMENT AND WAIVER. Except as otherwise provided herein, the provisions of
this Warrant (other than Section 1(f)) may be amended and the Company may take
any action herein prohibited, or omit to perform any act herein required to be
performed by it, only if the Company has obtained the written consent of the
Holder. No waiver shall be effective unless it is in writing and signed by an
authorized representative of the waiving party.

10. SEVERABILITY. If any provision of this Warrant 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 unenforceability of such
provision shall not affect the validity of the remaining provisions of this
Warrant so long as this Warrant 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).

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11. GOVERNING LAW. This Warrant shall be governed by and construed and enforced
in accordance with, and all questions concerning the construction, validity,
interpretation and performance of this Warrant 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. The Company 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. Nothing contained herein shall be deemed to limit in any
way any right to serve process in any manner permitted by law. Nothing contained
herein shall be deemed or operate to preclude the Holder from bringing suit or
taking other legal action against the Company in any other jurisdiction to
collect on the Company’s obligations to the Holder or to enforce a judgment or
other court ruling in favor of the Holder. THE COMPANY HEREBY IRREVOCABLY WAIVES
ANY RIGHT IT MAY HAVE TO, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE
ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF
THIS WARRANT OR ANY TRANSACTION CONTEMPLATED HEREBY.

12. CONSTRUCTION; HEADINGS. This Warrant shall be deemed to be jointly drafted
by the Company and the Holder and shall not be construed against any Person as
the drafter hereof. The headings of this Warrant are for convenience of
reference and shall not form part of, or affect the interpretation of, this
Warrant. Terms used in this Warrant but defined in the other Transaction
Documents shall have the meanings ascribed to such terms on the Closing Date (as
defined in the Securities Purchase Agreement) in such other Transaction
Documents unless otherwise consented to in writing by the Holder.

13. DISPUTE RESOLUTION. In the case of a dispute as to the determination of the
Exercise Price, the Exchange Amount, the Exchange Price, the Closing Sale Price,
the Closing Bid Price, the Bid Price or fair market value or the arithmetic
calculation of the Warrant Shares (as the case may be), the Company or the
Holder (as the case may be) shall submit the disputed determinations or
arithmetic calculations (as the case may be) via facsimile (i) within two
Business Days after receipt of the applicable notice giving rise to such dispute
to the Company or the Holder (as the case may be) or (ii) if no notice gave rise
to such dispute, at any time after the Holder or the Company (as the case may
be) learned of the circumstances giving rise to such dispute. If the Holder and
the Company are unable to agree upon such determination or calculation (as the
case may be) of the Exercise Price, the Exchange Amount, the Exchange Price, the
Closing Sale Price, the Closing Bid Price, the Bid Price or fair market value or
the number of Warrant Shares (as the case may be) within three Business Days of
such disputed determination or arithmetic calculation being submitted to the
Company or the Holder (as the case may be), then the Company shall, within two
Business Days submit via facsimile (a) the disputed arithmetic calculation of
the Warrant Shares, the disputed determination of the Exercise Price, the
Exchange Amount, the Exchange Price, the Closing Sale Price, the Closing Bid
Price, the Bid Price or fair market value (as the case may be) to an
independent, reputable investment

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bank selected by the Holder or (b) if acceptable to the Holder, the disputed
arithmetic calculation of the Warrant Shares to the Company’s independent,
outside accountant. The Company shall cause at its expense the investment bank
or the accountant (as the case may be) to perform the determinations or
calculations (as the case may be) and notify the Company and the Holder of the
results no later than ten Business Days from the time it receives such disputed
determinations or calculations (as the case may be). Such investment bank’s or
accountant’s determination or calculation (as the case may be) shall be binding
upon all parties absent demonstrable error.

14. REMEDIES, CHARACTERIZATION, OTHER OBLIGATIONS, BREACHES AND INJUNCTIVE
RELIEF. The remedies provided in this Warrant shall be cumulative and in
addition to all other remedies available under this Warrant and the other
Transaction Documents, at law or in equity (including a decree of specific
performance and/or other injunctive relief), and nothing herein shall limit the
right of the Holder to pursue actual and consequential damages for any failure
by the Company to comply with the terms of this Warrant. The Company covenants
to the Holder that there shall be no characterization concerning this instrument
other than as expressly provided herein. Amounts set forth or provided for
herein with respect to payments, exercises and the like (and the computation
thereof) shall be the amounts to be received by the Holder and shall not, except
as expressly provided herein, be subject to any other obligation of the Company
(or the performance thereof). The Company acknowledges that a breach by it of
its obligations hereunder will cause irreparable harm to the Holder and that the
remedy at law for any such breach may be inadequate. The Company therefore
agrees that, in the event of any such breach or threatened breach, the holder of
this Warrant may be entitled, in addition to all other available remedies, to an
injunction restraining any breach, without the necessity of showing economic
loss and without any bond or other security being required. Except where such
information and documentation contains or would otherwise constitute material,
non-public information, the Company shall provide all information and
documentation to the Holder that is requested by the Holder to enable the Holder
to confirm the Company’s compliance with the terms and conditions of this
Warrant (including, without limitation, compliance with Section 2 hereof). The
issuance of shares and certificates for shares as contemplated hereby upon the
exercise of this Warrant shall be made without charge to the Holder or such
shares for any issuance tax or other costs in respect thereof, provided that the
Company shall not be required to pay any tax which may be payable in respect of
any transfer involved in the issuance and delivery of any certificate in a name
other than the Holder or its agent on its behalf.

15. TRANSFER. This Warrant may be offered for sale, sold, transferred or
assigned without the consent of the Company.

16. CERTAIN DEFINITIONS. For purposes of this Warrant, the following terms shall
have the following meanings:

(a) “Bid Price” means, for any security as of the particular time of
determination, the bid price for such security on the Principal Market as
reported by Bloomberg as of such time of determination, or, if the Principal
Market is not the principal securities exchange or trading market for such
security, the bid price of such security on the principal securities exchange or
trading market where such security is listed or traded as reported by Bloomberg
as of such time of determination, or if the foregoing does not apply, the bid
price of such security in the over-the-counter market on the electronic bulletin
board for such security as reported by Bloomberg as

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of such time of determination, or, if no bid price is reported for such security
by Bloomberg as of such time of determination, the average of the bid prices of
all of the market makers for such security as reported in the “pink sheets” by
OTC Markets Group Inc. (formerly Pink Sheets LLC) (the “Pink Sheets”) as of such
time of determination. If the Bid Price cannot be calculated for a security as
of the particular time of determination on any of the foregoing bases, the Bid
Price of such security as of such time of determination shall be the fair market
value as mutually determined by the Company and the Holder. If the Company and
the Holder are unable to agree upon the fair market value of such security, then
such dispute shall be resolved in accordance with the procedures in Section 13.
All such determinations shall be appropriately adjusted for any stock dividend,
stock split, stock combination or other similar transaction during such period.

(b) “Black Scholes Exchange Value” means the value of an option for the number
of shares equal to the portion of the Warrant being exchanged at the applicable
Exchange Date as set forth in the applicable Exchange Notice as such value is
determined calculated using the Black Scholes Option Pricing Model obtained from
the “OV” function on Bloomberg utilizing (i) an underlying price per share equal
to the Closing Sale Price of the Common Stock as of the Issuance Date (adjusted
upward to the same extent that the Exercise Price hereunder has been adjusted
upward pursuant to Section 2(a)), (ii) a risk-free interest rate corresponding
to the U.S. Treasury rate for a period equal to the remaining term of the
Warrant as of such Exchange Date, (iii) a strike price equal to the Exercise
Price in effect at the time of the applicable Exchange, (iv) an expected
volatility equal to 135% and (v) a deemed remaining term of the Warrant of five
years (regardless of the actual remaining term of the Warrant).

(c) “Black Scholes Value—FT” means the value of the unexercised portion of this
Warrant remaining on the date of the Holder’s request pursuant to Section 3(b),
which value is calculated using the Black Scholes Option Pricing Model obtained
from the “OV” function on Bloomberg utilizing (i) an underlying price per share
equal to the greater of (1) the highest Closing Sale Price of the Common Stock
during the period beginning on the Trading Day immediately preceding the
earliest to occur of (x) the public disclosure of the applicable Fundamental
Transaction, (y) the consummation of the applicable Fundamental Transaction and
(z) the date on which the Holder first became aware of the applicable
Fundamental Transaction and ending on the Trading Day of the Holder’s request
pursuant to Section 3(b) and (2) the sum of the price per share being offered in
cash in the applicable Fundamental Transaction (if any) plus the value of the
non-cash consideration being offered in the applicable Fundamental Transaction
(if any), (ii) a strike price equal to the Exercise Price in effect on the date
of the Holder’s request pursuant to Section 3(b), (iii) a risk-free interest
rate corresponding to the U.S. Treasury rate for a period equal to the greater
of (1) the remaining term of this Warrant as of the date of the Holder’s request
pursuant to Section 3(b) and (2) the remaining term of this Warrant as of the
date of consummation of the applicable Fundamental Transaction or as of the date
of the Holder’s request pursuant to Section 3(b) if such request is prior to the
date of the consummation of the applicable Fundamental Transaction and (iv) an
expected volatility equal to the greater of 135% and the 100 day volatility
obtained from the HVT function on Bloomberg (determined utilizing a 365 day
annualization factor) as of the Trading Day immediately following the earliest
to occur of (x) the public disclosure of the applicable Fundamental Transaction,
(y) the consummation of the applicable Fundamental Transaction and (z) the date
on which the Holder first became aware of the applicable Fundamental
Transaction.

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(d) “Bloomberg” means Bloomberg, L.P.

(e) “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) “Closing Bid Price” and “Closing Sale Price” means, for any security as of
any date, the last closing bid price and the 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 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
all of the market makers for such security as reported in the Pink Sheets. 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 Holder. If the Company and the Holder are unable to agree upon the fair
market value of such security, then such dispute shall be resolved in accordance
with the procedures in Section 13. All such determinations shall be
appropriately adjusted in accordance with Section 2 for any stock dividend,
stock split, stock combination or other similar transaction during such period.

(g) “Common Stock” means (i) the Company’s shares of common stock, $0.01 par
value per share, and (ii) any capital stock into which such common stock shall
have been changed or any share capital resulting from a reclassification of such
common stock.

(h) “Convertible Securities” means any stock or other security (other than
Options) that is at any time and under any circumstances, directly or
indirectly, convertible into, exercisable or exchangeable for, or which
otherwise entitles the holder thereof to acquire, any shares of Common Stock.

(i) “Eligible Market” means the OTC Bulletin Board, the New York Stock Exchange,
the Nasdaq Global Select Market, the NYSE MKT, or the Principal Market.

(j) “Equity Conditions” means: (i) the Company shall have complied in all
material respects with all applicable securities laws and regulations and all
rules and regulations of the Eligible Markets in respect of the offer, sale and
issuance of the Securities under the Transaction Documents, (ii) the Common
Stock (including all shares of Common Stock to be received by Holder) shall be
listed or designated for quotation (as applicable) on an Eligible Market and no
Trading Market Event (or event which with notice or passage of time would be a
Trading Market Event) has occurred, nor shall delisting or suspension by an
Eligible Market be pending or

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threatened and still pending (iii) the Company shall be in compliance in all
material respects with all of its obligations under all of the Transaction
Documents, (iv) no public announcement of a pending, proposed or intended
Fundamental Transaction shall have occurred which has not been abandoned,
terminated or consummated, (v) the Holder shall not be in possession of any
material, non-public information provided to it by the Company, any of its
affiliates or any of their respective officers, employees, directors,
representatives, agents or the like, (vi) each of the Registration Statement and
the Prospectus contained therein (each as defined in the Securities Purchase
Agreement) shall continue to be effective and fully available for use with
respect to issuance of all of the Securities, including, without limitation, any
issuance of Warrant Shares pursuant to a cash exercise hereof, including without
limitation a Mandatory Exercise under Section 17, (vii) all Common Shares and
Warrant Shares (including any Warrant Shares to be received upon exercise or
exchange of this Warrant and including any Warrant Shares to be issued in a cash
exercise) shall be then (or upon such issuance (as the case may be)) freely
tradeable by Holder without restriction of any kind or nature (and the Company
shall have no knowledge of any fact which would reasonably be expected to negate
the foregoing in the foreseeable future), (viii) no limitation shall be
applicable with respect to the issuance of any Warrant Shares hereunder (other
than under Section 1(f)), (ix) the Company is fully reporting under the 1934
Act, and (x) all Common Shares and all Warrant Shares required to be delivered
shall have been properly and timely delivered under the Securities Purchase
Agreement and this Warrant, including without limitation, all Warrant Shares
issuable under Section 4 hereof and all Common Shares and Warrant Shares have
been, and will be, delivered via DWAC. For purposes hereof a “Trading Market
Event” shall mean if the Company or the Common Stock or any shares of Common
Stock issued or issuable hereunder or under any other Transaction Document shall
cease or fail to be listed for trading or quoted on an Eligible Market or shall
fall below any dollar threshold for listing or qualification or the Company
shall then not be in compliance with any applicable listing or qualification
standard (or will be with the passage of time).

(k) “Equity Conditions Failure” means that on any applicable date of
determination, any of the Equity Conditions have not been satisfied then. Except
with respect to the events set forth in clauses (ii), (v), (vi), (vii) and
(viii) in the definition of Equity Conditions, an Equity Conditions Failure
shall not have occurred if the event, fact or circumstance causing an Equity
Condition not to be satisfied arises due to, or at the instruction of, the
Holder (including, without limitation, any action taken by the Company in
accordance with the Transaction Documents).

(l) “Expiration Date” means the date that is the fifth anniversary of the
Issuance Date or, if such date falls on a day other than a Business Day or on
which trading does not take place on the Principal Market (a “Holiday”), the
next date that is not a Holiday.

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

(n) “Person” means an individual, a limited liability company, a partnership, a
joint venture, a corporation, a trust, an unincorporated organization, any other
entity or a government or any department or agency thereof.

(o) “Principal Market” means the Nasdaq Global Market.

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(p) “Trading Day” means, as applicable, (x) with respect to all price
determinations relating to the Common Stock, any day on which the Common Stock
is traded on the Principal Market, or, if the Principal Market is not the
principal trading market for the Common Stock, then on the principal securities
exchange or securities market on which the Common Stock is then traded, provided
that “Trading Day” shall not include any day on which the Common Stock is
scheduled to trade on such exchange or market for less than 4.5 hours or any day
that the Common Stock is suspended from trading during the final hour of trading
on such exchange or market (or if such exchange or market does not designate in
advance the closing time of trading on such exchange or market, then during the
hour ending at 4:00:00 p.m., New York time) unless such day is otherwise
designated as a Trading Day in writing by the Holder or (y) with respect to all
determinations other than price determinations relating to the Common Stock, any
day on which The New York Stock Exchange (or any successor thereto) is open for
trading of securities.

(q) “Voting Stock” of a Person means capital stock of such Person of the class
or classes pursuant to which the holders thereof have the general voting power
to elect, or the general power to appoint, at least a majority of the board of
directors, managers or trustees of such Person (irrespective of whether or not
at the time capital stock of any other class or classes shall have or might have
voting power by reason of the happening of any contingency).

(r) “VWAP” means, for any security as of any date, the dollar volume-weighted
average price for such security on the Principal Market (or, if the Principal
Market is not the principal trading market for such security, then on the
principal securities exchange or securities market on which such security is
then traded) during the period beginning at 9:30:01 a.m., New York time, and
ending at 4:00:00 p.m., New York time, 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, and ending at 4:00:00 p.m., New York time, 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 three
highest closing bid prices and the three lowest closing ask prices of all of the
market makers for such security as reported in the Pink Sheets. If VWAP cannot
be calculated for such security on such date on any of the foregoing bases, the
VWAP of such security on such date shall be the fair market value as mutually
determined by the Company and the Holder. If the Company and the Holder are
unable to agree upon the fair market value of such security, then such dispute
shall be resolved in accordance with the procedures in Section 13. All such
determinations shall be appropriately adjusted for any stock dividend, stock
split, stock combination or other similar transaction during such period.

17. MANDATORY EXERCISE. If at any time after the date of issuance of this
Warrant, for 10 consecutive Trading Days the Closing Bid Price of the Common
Stock for each Trading Day during such period is at a price greater than or
equal to 25% above the Exercise Price as in effect at the end of such Trading
Day, and the average daily dollar volume during such 10 consecutive Trading Days
is equal to or exceeds $600,000 (such period being the “Trigger Period”), then
(provided no Equity Conditions Failure shall have occurred and is continuing
through the end of such period), the Company shall have the right to require the
Holder to exercise for cash all, but not less than all, of this Warrant for all
of the then-remaining Warrant Shares as further set forth below. The Company may
exercise its right to require exercise under this Section 17 (the

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“Mandatory Exercise Right”) (to the extent permitted hereby) by delivering,
within 10 Trading Days following the end of the Trigger Period, a written notice
thereof by facsimile and overnight courier to the Holder (the “Mandatory
Exercise Notice” and the date such notice by facsimile is deemed to be delivered
in accordance with Section 8 is referred to as the “Mandatory Exercise Notice
Date”). The Mandatory Exercise Notice shall be irrevocable. The Mandatory
Exercise Notice shall (1) state the Trading Day selected for the Mandatory
Exercise in accordance with this Section 17, which Trading Day shall be at least
five Trading Days but not more than 15 Trading Days following the Mandatory
Exercise Notice Date (the “Mandatory Exercise Date”), (2) state the number of
shares of Common Stock to be issued to the Holder on the Mandatory Exercise Date
and (3) contain a certification from the Chief Executive Officer of the Company
that there has been no Equity Conditions Failure as of the Mandatory Exercise
Notice Date. Any portion of this Warrant exercised by the Holder after the
Mandatory Exercise Notice Date shall reduce the number of Warrant Shares for
which this Warrant is required to be exercised on the Mandatory Exercise Date.
If the Company has elected a Mandatory Exercise, the mechanics of exercise set
forth in Section 1 shall apply, to the extent applicable, as if the Company had
received from the Holder on the Mandatory Exercise Date an Exercise Notice with
respect to all of the then-remaining Warrant Shares (or the Permitted Exercise
Amount (as defined below) of Warrant Shares, as applicable). Notwithstanding
anything contained in this Section 17 to the contrary (but subject to the last
sentence of this Section 17), if (I) the Closing Bid Price of the Common Stock
on any Trading Day during the period commencing on the Mandatory Exercise Notice
Date and ending on the Trading Day immediately preceding the Mandatory Exercise
Date is less than the Exercise Price then in effect at the end of trading on
such day; (II) the daily dollar trading volume (as reported on Bloomberg) of the
Common Stock on the applicable Eligible Market on any Trading Day during the
period commencing on the Mandatory Exercise Notice Date and ending on the
Trading Day immediately preceding the Mandatory Exercise Date is less than
$600,000; or (III) an Equity Conditions Failure occurs on any day since the
occurrence of the Trigger Period and is continuing on the Mandatory Exercise
Date, then the Mandatory Exercise Notice delivered to the Holder shall be null
and void ab initio and the Mandatory Exercise shall not occur and the Mandatory
Exercise Right shall not be available to the Company unless and until the
conditions precedent to such Mandatory Exercise Right are again satisfied. If
the Company elects to cause a mandatory exercise of this Warrant pursuant to
this Section 17, then it must simultaneously take the same action with respect
to all of the other SPA Warrants, if any, held by any person other than Holder.
Notwithstanding anything contained in this Section 17 to the contrary, an effort
by the Company to exercise its right under this Section 17 shall be stayed to
the extent the Holder delivers a written notice to the Company stating that such
exercise would result in a violation of Section 1(f) (a “Blocker Notice”), which
Blocker Notice may be delivered at any time prior to the Mandatory Exercise
Date, in which case the Company shall have the right to require the Holder to
exercise this Warrant for such number of Warrant Shares that may be exercise
hereunder without violating Section 1(f) (the “Permitted Exercise Amount”) and
from time to time thereafter the Holder shall exercise this Warrant (so long as
no Equity Conditions Failure has occurred from and after the Mandatory Exercise
Notice Date) in such amounts and from time to time until fully exercised,
subject to ongoing compliance with Section 1(f) and subject to Holder’s rights
hereunder and the other terms and conditions hereof following the Mandatory
Exercise Date

[signature page follows]

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

The Company has caused this Warrant to Purchase Common Stock to be duly executed
as of the Issuance Date set out above.

 

UNILIFE CORPORATION   By:       Name:   Title:

[Signature Page to Warrant]

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EXHIBIT A

EXERCISE NOTICE

TO BE EXECUTED BY THE REGISTERED HOLDER TO EXERCISE THIS

WARRANT TO PURCHASE COMMON STOCK

UNILIFE CORPORATION

The undersigned holder hereby exercises the right to purchase              of
the shares of Common Stock (“Warrant Shares”) of Unilife Corporation, a Delaware
corporation (the “Company”), evidenced by Warrant to Purchase Common Stock No.
             (the “Warrant”). Capitalized terms used herein and not otherwise
defined shall have the respective meanings set forth in the Warrant.

1. Form of Exercise Price. The Holder intends that payment of the Exercise Price
shall be made as:

                                 a “Cash Exercise” with respect to
                     Warrant Shares; and/or

                                 a “Cashless Exercise” with respect to
                     Warrant Shares.

In the event that the Holder has elected a Cashless Exercise with respect to
some or all of the Warrant Shares to be issued pursuant hereto, the Holder
hereby represents and warrants that (i) this Exercise Notice was executed by the
Holder at             [a.m.][p.m.] on the date set forth below and (ii) if
applicable, the Bid Price as of such time of execution of this Exercise Notice
was $            .

2. Payment of Exercise Price. In the event that the Holder has elected a Cash
Exercise with respect to some or all of the Warrant Shares, the Holder shall pay
the Aggregate Exercise Price in the sum of $             to the Company in
accordance with the terms of the Warrant.

3. Delivery of Warrant Shares and Net Number of shares of Common Stock. The
Company shall deliver to Holder, or its designee or agent as specified below,
             shares of Common Stock in respect of the exercise contemplated
hereby. Delivery shall be made to Holder, or for its benefit, to the following
address:

 

                               

Date:                              ,             

 

 

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

Name of Registered Holder By:       Name:   Title:

Account Number:                                          
                                         
                                         
                                                  

(if electronic book entry transfer)

Transaction Code Number:                                        
                                         
                                                                              

(if electronic book entry transfer)

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

EXHIBIT B

EXCHANGE NOTICE

TO BE EXECUTED BY THE REGISTERED HOLDER TO EXCHANGE THIS

WARRANT TO PURCHASE COMMON STOCK

UNILIFE CORPORATION

The undersigned holder hereby exercises the right to exchange the Warrant to
Purchase Common Stock No.             (the “Warrant”) of Unilife Corporation, a
Delaware corporation (the “Company”) as described. Capitalized terms used herein
and not otherwise defined shall have the respective meanings set forth in the
Warrant.

Date of Exchange:             

 

18. The total number of shares with respect to which this Warrant is being
exchanged:                     

 

19. Black Scholes Exchange Value (as defined in Section 17) for an option to
purchase                      [SAME # AS FROM 1 ABOVE] shares of Common Stock:
$                    .

Resulting Exchange Amount: $                    [insert from item 2 above]

 

20. Exchange Price: Closing Bid Price of the Common Stock as of two (2) Trading
Days prior to the date of Exchange (as such Closing Bid Price is defined in
Section 17 herein): $                    .

Resulting Exchange Number [Exchange Amount/Exchange Price as set forth in 3
above] (if issuer is permitted to elect to issue shares of Common
Stock):                     shares of Common Stock

Account for Wire Transfer:                                       
                                         
                                                                             

Account for Share issuance (if Company is permitted to elect and so
elects):                    

 

 

Date:                              ,             

 

 

Name of Registered Holder

By:       Name:   Title:

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EXHIBIT C

ACKNOWLEDGMENT

The Company hereby acknowledges the receipt of the [Exercise Notice and
Aggregate Exercise Price][Exchange Notice] and hereby directs              to
issue the above indicated number of shares of Common Stock in accordance with
the Transfer Agent Instructions dated             , 20__, from the Company and
acknowledged and agreed to by             .

 

UNILIFE CORPORATION By:       Name:   Title: