ex4-4july2007.htm


    EXHIBIT 4.4

     

    

      


       

      


       

      


       

      THIS
        WARRANT AND THE SHARES ISSUABLE UPON THE EXERCISE OF THIS WARRANT HAVE NOT
        BEEN
        REGIS­TERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.  EXCEPT
        AS OTHERWISE SET FORTH HEREIN OR IN A SECURITIES PURCHASE AGREEMENT DATED
        AS OF
        JULY 24, 2007, NEITHER THIS WARRANT NOR ANY OF SUCH SHARES MAY BE SOLD,
        TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRA­TION
        STATEMENT FOR SUCH SECURITIES UNDER SAID ACT OR, AN OPINION OF COUNSEL, IN
        FORM,
        SUBSTANCE AND SCOPE, CUSTOMARY FOR OPINIONS OF COUNSEL IN COMPARABLE
        TRANSACTIONS, THAT REGISTRATION IS NOT REQUIRED UNDER SUCH ACT OR UNLESS
        SOLD
        PURSUANT TO RULE 144 OR REGULATION S UNDER SUCH ACT.

       

      Right
        to
        Purchase 1,760,000 Shares of Common Stock, par value $.01 per share

       

      STOCK
        PURCHASE WARRANT

       

      THIS
        CERTIFIES THAT, for value received, AJW Partners, LLC or its registered
        assigns, is entitled to purchase from Avitar Inc., a Delaware
        corporation (the “Company”), at any time or from time to time during the period
        specified in Paragraph 2 hereof, 1,760,000 fully paid and nonassessable
        shares of the Company’s Common Stock, par value $.01 per share (the “Common
        Stock”), at an exercise price per share equal to $.01 (the “Exercise
        Price”).  The term “Warrant Shares,” as used herein, refers to the
        shares of Common Stock purchasable hereunder.  The Warrant Shares and
        the Exercise Price are subject to adjustment as provided in Paragraph 4
        hereof.  The term “Warrants” means this Warrant and the other warrants
        issued pursuant to that certain Securities Purchase Agreement, dated July
        19,
        2007, by and among the Company and the Buyers listed on the execution page
        thereof (the “Securities Purchase Agreement”).

       

      This
        Warrant is subject to the following terms, provisions, and
        conditions:

       

      1.  Manner
        of Exercise; Issuance of Certificates; Payment for
        Shares.

       

      
        	
                Subject
                  to the provisions hereof, this Warrant may be exercised by the
                  holder
                  hereof, in whole or in part, by the surrender of this Warrant,
                  together
                  with a completed exercise agreement in the form attached hereto
                  (the
                  “Exercise Agreement”), to the Company during normal business hours on any
                  business day at the Company’s principal executive offices (or such other
                  office or agency of the Company as it may designate by notice to
                  the
                  holder hereof), and upon (i) payment to the Company in cash, by
                  certified
                  or offi­cial bank check or by wire transfer for the account of the
                  Company of the Exercise Price for the Warrant Shares specified
                  in the
                  Exercise Agreement or (ii) if the resale of the Warrant Shares
                  by the
                  holder is not then registered pursuant to an effective registration
                  statement under the Securities Act of 1933, as amended (the “Securities
                  Act”), delivery to the Company of a written notice of an election to
                  effect a “Cashless Exercise” (as defined in Section 11(c) below) for the
                  Warrant Shares specified in the Exercise Agreement.  The Warrant
                  Shares so purchased shall be deemed to be issued to the holder
                  hereof or
                  such holder’s designee, as the record owner of such shares, as of the
                  close of business on the date on which this Warrant shall have
                  been
                  surrendered, the completed Exercise Agreement shall have been
                  deliv­ered, and payment shall have been made for such shares as set
                  forth above.  Certifi­cates for the Warrant Shares so
                  purchased, representing the aggregate number of shares specified
                  in the
                  Exercise Agreement, shall be delivered to the holder hereof within
                  a
                  reasonable time, not exceeding five (5) business days, after this
                  Warrant
                  shall have been so exercised.  The certificates so delivered
                  shall be in such denominations as may be requested by the holder
                  hereof
                  and shall be registered in the name of such holder or such other
                  name as
                  shall be designated by such holder.  If this Warrant shall have
                  been exercised only in part, then, unless this Warrant has expired,
                  the
                  Company shall, at its expense, at the time of delivery of such
                  certificates, deliver to the holder a new Warrant representing
                  the number
                  of shares with respect to which this Warrant shall not then have
                  been
                  exercised.  In addition to all other available remedies at law
                  or in equity, if the Company fails to deliver certificates for
                  the Warrant
                  Shares within five (5) business days after this Warrant is exercised,
                  then
                  the Company shall pay to the holder in cash a penalty (the “Penalty”)
                  equal to 2% of the number of Warrant Shares that the holder is
                  entitled to
                  multiplied by the Market Price (as hereinafter defined) for each
                  day that
                  the Company fails to deliver certificates for the Warrant
                  Shares.  For example, if the holder is entitled to 100,000
                  Warrant Shares and the Market Price is $2.00, then the Company
                  shall pay
                  to the holder $4,000 for each day that the Company fails to deliver
                  certificates for the Warrant Shares.  The Penalty shall be paid
                  to the holder by the fifth day of the month following the month
                  in which
                  it has accrued.

              


      

       

      Notwithstanding
        anything in this Warrant to the contrary, in no event shall the holder of
        this
        Warrant be entitled to exercise a number of Warrants (or portions thereof)
        in
        excess of the number of Warrants (or portions thereof) upon exercise of which
        the sum of (i) the number of shares of Common Stock beneficially owned by
        the
        holder and its affiliates (other than shares of Common Stock which may be
        deemed
        beneficially owned through the ownership of the unexercised Warrants and
        the
        unexercised or unconverted portion of any other securities of the Company
        (including the Notes (as defined in the Securities Purchase Agreement)) subject
        to a limitation on conversion or exercise analogous to the limitation contained
        herein) and (ii) the number of shares of Common Stock issuable upon exercise
        of
        the Warrants (or portions thereof) with respect to which the determination
        described herein is being made, would result in beneficial ownership by the
        holder and its affiliates of more than 4.9% of the outstanding shares of
        Common
        Stock.  For purposes of the immediately preceding sentence, beneficial
        ownership shall be determined in accordance with Section 13(d) of the Securities
        Exchange Act of 1934, as amended, and Regulation 13D-G thereunder, except
        as
        otherwise provided in clause (i) of the preceding
        sentence.  Notwithstanding anything to the contrary contained herein,
        the limitation on exercise of this Warrant set forth herein may not be amended
        without (i) the written consent of the holder hereof and the Company and
        (ii)
        the approval of a majority of shareholders of the Company.

       

      2.  Period
        of Exercise.

       

      
        	
                  This
                  Warrant is exercisable at any time or from time to time on or after
                  the
                  date on which this Warrant is issued and delivered pursuant to
                  the terms
                  of the Securities Purchase Agreement and before 6:00 p.m., New
                  York, New
                  York time on the seventh (7th)
                  anniversary
                  of the date of issuance (the “Exercise
                  Period”).

              


      

       

      3.  Certain
        Agreements of the Company.

       

      
        	
                  The
                  Company hereby covenants and agrees as
                  follows:

              


      

       

      (a)  Shares
        to be Fully Paid.  All Warrant Shares
        will, upon issuance in accordance with the terms of this Warrant, be validly
        issued, fully paid, and nonassessable and free from all taxes, liens, and
        charges with respect to the issue thereof.

       

      (b)  Reservation
        of Shares.  During the Exercise Period,
        the Company shall at all times have authorized, and reserved for the purpose
        of
        issuance upon exercise of this Warrant, a suf­ficient number of shares of
        Common Stock to provide for the exercise of this Warrant.

       

      (c)  Listing.  The
        Company shall promptly secure the listing of the shares of Common Stock issuable
        upon exercise of the Warrant upon each national securities exchange or automated
        quotation system, if any, upon which shares of Common Stock are then listed
        (subject to official notice of issuance upon exercise of this Warrant) and
        shall
        maintain, so long as any other shares of Common Stock shall be so listed,
        such
        listing of all shares of Common Stock from time to time issuable upon the
        exercise of this Warrant; and the Company shall so list on each national
        securities exchange or automated quotation system, as the case may be, and
        shall
        maintain such listing of, any other shares of capital stock of the Company
        issuable upon the exercise of this Warrant if and so long as any shares of
        the
        same class shall be listed on such national securities exchange or automated
        quotation system.

       

      (d)  Certain
        Actions Prohibited.  The Company will
        not, by amendment of its charter or through any re­organi­zation,
        transfer of assets, consolidation, mer­ger, dissolution, issue or sale of
        securities, or any other voluntary action, avoid or seek to avoid the observance
        or performance of any of the terms to be observed or performed by it hereunder,
        but will at all times in good faith assist in the carrying out of all the
        provisions of this Warrant and in the taking of all such action as may
        reasonably be requested by the holder of this Warrant in order to protect
        the
        exercise privilege of the holder of this Warrant against dilu­tion or other
        impairment, consistent with the tenor and purpose of this
        Warrant.  Without limiting the general­ity of the foregoing, the
        Company (i) will not increase the par value of any shares of Common Stock
        receivable upon the exercise of this Warrant above the Exercise Price then
        in
        effect, and (ii) will take all such actions as may be necessary or appropriate
        in order that the Company may validly and legally issue fully paid and
        nonassessable shares of Common Stock upon the exercise of this
        Warrant.

       

      (e)  Successors
        and Assigns.  This Warrant will be
        binding upon any entity succeeding to the Company by merger, consolidation,
        or
        acquisition of all or sub­stantially all the Company’s assets.

       

      4.  Antidilution
        Provisions.

       

      During
        the Exercise Period, the Exercise Price and the number of Warrant Shares
        shall
        be subject to adjustment from time to time as provided in this Paragraph
        4.

       

      In
        the
        event that any adjustment of the Exercise Price as required herein results
        in a
        fraction of a cent, such Exercise Price shall be rounded up to the nearest
        cent.

       

      (a)  Adjustment
        of Exercise Price and Number of Shares upon Issuance of Common
        Stock.  Except as otherwise provided in
        Paragraphs 4(c) and 4(e) hereof, if and whenever on or after the date of
        issuance of this Warrant, the Company issues or sells, or in accordance with
        Paragraph 4(b) hereof is deemed to have issued or sold, any shares of Common
        Stock for no consideration or for a consideration per share (before deduction
        of
        reasonable expenses or commissions or underwriting discounts or allowances
        in
        connection therewith) less than the Market Price on the date of issuance
        (a
“Dilutive Issuance”), then immediately upon the Dilutive Issuance, the Exercise
        Price will be reduced to a price determined by multiplying the Exercise Price
        in
        effect immediately prior to the Dilutive Issuance by a fraction, (i) the
        numerator of which is an amount equal to the sum of (x) the number of shares
        of
        Common Stock actually outstanding immediately prior to the Dilutive Issuance,
        plus (y) the quotient of the aggregate consideration, calculated as set forth
        in
        Paragraph 4(b) hereof, received by the Company upon such Dilutive Issuance
        divided by the Market Price in effect immediately prior to the Dilutive
        Issuance, and (ii) the denominator of which is the total number of shares
        of
        Common Stock Deemed Outstanding (as defined below) immediately after the
        Dilutive Issuance.

       

      (b)  Effect
        on Exercise Price of Certain
        Events.  For purposes of determining the
        adjusted Exercise Price under Paragraph 4(a) hereof, the following will be
        applicable:

       

      (i)  Issuance
        of Rights or Options.  If the Company in
        any manner issues or grants any warrants, rights or options, whether or not
        immediately exercisable, to subscribe for or to purchase Common Stock or
        other
        securities convertible into or exchangeable for Common Stock (“Convertible
        Securities”) (such warrants, rights and options to purchase Common Stock or
        Convertible Securities are hereinafter referred to as “Options”) and the price
        per share for which Common Stock is issuable upon the exercise of such Options
        is less than the Market Price on the date of issuance or grant of such Options,
        then the maximum total number of shares of Common Stock issuable upon the
        exercise of all such Options will, as of the date of the issuance or grant
        of
        such Options, be deemed to be outstanding and to have been issued and sold
        by
        the Company for such price per share.  For purposes of the preceding
        sentence, the “price per share for which Common Stock is issuable upon the
        exercise of such Options” is determined by dividing (i) the total amount, if
        any, received or receivable by the Company as consideration for the issuance
        or
        granting of all such Options, plus the minimum aggregate amount of additional
        consideration, if any, payable to the Company upon the exercise of all such
        Options, plus, in the case of Convertible Securities issuable upon the exercise
        of such Options, the minimum aggregate amount of additional consideration
        payable upon the conversion or exchange thereof at the time such Convertible
        Securities first become convertible or exchangeable, by (ii) the maximum
        total
        number of shares of Common Stock issuable upon the exercise of all such Options
        (assuming full conversion of Convertible Securities, if
        applicable).  No further adjustment to the Exercise Price will be made
        upon the actual issuance of such Common Stock upon the exercise of such Options
        or upon the conversion or exchange of Convertible Securities issuable upon
        exercise of such Options.

       

      (ii)  Issuance
        of Convertible Securities.  If the
        Company in any manner issues or sells any Convertible Securities, whether
        or not
        immediately convertible (other than where the same are issuable upon the
        exercise of Options) and the price per share for which Common Stock is issuable
        upon such conversion or exchange is less than the Market Price on the date
        of
        issuance, then the maximum total number of shares of Common Stock issuable
        upon
        the conversion or exchange of all such Convertible Securities will, as of
        the
        date of the issuance of such Convertible Securities, be deemed to be outstanding
        and to have been issued and sold by the Company for such price per
        share.  For the purposes of the preceding sentence, the “price per
        share for which Common Stock is issuable upon such conversion or exchange” is
        determined by dividing (i) the total amount, if any, received or receivable
        by
        the Company as consideration for the issuance or sale of all such Convertible
        Securities, plus the minimum aggregate amount of additional consideration,
        if
        any, payable to the Company upon the conversion or exchange thereof at the
        time
        such Convertible Securities first become convertible or exchangeable, by
        (ii)
        the maximum total number of shares of Common Stock issuable upon the conversion
        or exchange of all such Convertible Securities.  No further adjustment
        to the Exercise Price will be made upon the actual issuance of such Common
        Stock
        upon conversion or exchange of such Convertible Securities.

       

      (iii)  Change
        in Option Price or Conversion Rate.  If
        there is a change at any time in (i) the amount of additional consideration
        payable to the Company upon the exercise of any Options; (ii) the amount
        of
        additional consideration, if any, payable to the Company upon the conversion
        or
        exchange of any Convertible Securities; or (iii) the rate at which any
        Convertible Securities are convertible into or exchangeable for Common Stock
        (other than under or by reason of provisions designed to protect against
        dilution), the Exercise Price in effect at the time of such change will be
        readjusted to the Exercise Price which would have been in effect at such
        time
        had such Options or Convertible Securities still outstanding provided for
        such
        changed additional consideration or changed conversion rate, as the case
        may be,
        at the time initially granted, issued or sold.

       

      (iv)  Treatment
        of Expired Options and Unexercised Convertible
        Securities.  If, in any case, the total
        number of shares of Common Stock issuable upon exercise of any Option or
        upon
        conversion or exchange of any Convertible Securities is not, in fact, issued
        and
        the rights to exercise such Option or to convert or exchange such Convertible
        Securities shall have expired or terminated, the Exercise Price then in effect
        will be readjusted to the Exercise Price which would have been in effect
        at the
        time of such expiration or termination had such Option or Convertible
        Securities, to the extent outstanding immediately prior to such expiration
        or
        termination (other than in respect of the actual number of shares of Common
        Stock issued upon exercise or conversion thereof), never been
        issued.

       

      (v)  Calculation
        of Consideration Received.  If any
        Common Stock, Options or Convertible Securities are issued, granted or sold
        for
        cash, the consideration received therefor for purposes of this Warrant will
        be
        the amount received by the Company therefor, before deduction of reasonable
        commissions, underwriting discounts or allowances or other reasonable expenses
        paid or incurred by the Company in connection with such issuance, grant or
        sale.  In case any Common Stock, Options or Convertible Securities are
        issued or sold for a consideration part or all of which shall be other than
        cash, the amount of the consideration other than cash received by the Company
        will be the fair value of such consideration, except where such consideration
        consists of securities, in which case the amount of consideration received
        by
        the Company will be the Market Price thereof as of the date of
        receipt.  In case any Common Stock, Options or Convertible Securities
        are issued in connection with any acquisition, merger or consolidation in
        which
        the Company is the surviving corporation, the amount of consideration therefor
        will be deemed to be the fair value of such portion of the net assets and
        business of the non-surviving corporation as is attributable to such Common
        Stock, Options or Convertible Securities, as the case may be.  The
        fair value of any consideration other than cash or securities will be determined
        in good faith by the Board of Directors of the Company.

       

      (vi)  Exceptions
        to Adjustment of Exercise Price.  No
        adjustment to the Exercise Price will be made (i) upon the exercise of any
        warrants, options or convertible securities granted, issued and outstanding
        on
        the date of issuance of this Warrant; (ii) upon the grant or exercise of
        any
        stock or options which may hereafter be granted or exercised under any employee
        benefit plan, stock option plan or restricted stock plan of the Company now
        existing or to be implemented in the future, so long as the issuance of such
        stock or options is approved by a majority of the independent members of
        the
        Board of Directors of the Company or a majority of the members of a committee
        of
        independent directors established for such purpose; or (iii) upon the exercise
        of the Warrants.

       

      (c)  Subdivision
        or Combination of Common Stock.  If the
        Company at any time subdivides (by any stock split, stock dividend,
        recapitalization, reorganization, reclassification or otherwise) the shares
        of
        Common Stock acquirable hereunder into a greater number of shares, then, after
        the date of record for effecting such subdivision, the Exercise Price in
        effect
        immediately prior to such subdivision will be proportionately
        reduced.  If the Company at any time combines (by reverse stock split,
        recapitalization, reorganization, reclassification or otherwise) the shares
        of
        Common Stock acquirable hereunder into a smaller number of shares, then,
        after
        the date of record for effecting such combination, the Exercise Price in
        effect
        immediately prior to such combination will be proportionately
        increased.

       

      (d)  Adjustment
        in Number of Shares.  Upon each
        adjustment of the Exercise Price pursuant to the provisions of this Paragraph
        4,
        the number of shares of Common Stock issuable upon exercise of this Warrant
        shall be adjusted by multiplying a number equal to the Exercise Price in
        effect
        immediately prior to such adjustment by the number of shares of Common Stock
        issuable upon exercise of this Warrant immediately prior to such adjustment
        and
        dividing the product so obtained by the adjusted Exercise Price.

       

      (e)  Consolidation,
        Merger or Sale.  In case of any
        consolidation of the Company with, or merger of the Company into any other
        corporation, or in case of any sale or conveyance of all or substantially
        all of
        the assets of the Company other than in connection with a plan of complete
        liquidation of the Company, then as a condition of such consolidation, merger
        or
        sale or conveyance, adequate provision will be made whereby the holder of
        this
        Warrant will have the right to acquire and receive upon exercise of this
        Warrant
        in lieu of the shares of Common Stock immediately theretofore acquirable
        upon
        the exercise of this Warrant, such shares of stock, securities or assets
        as may
        be issued or payable with respect to or in exchange for the number of shares
        of
        Common Stock immediately theretofore acquirable and receivable upon exercise
        of
        this Warrant had such consolidation, merger or sale or conveyance not taken
        place.  In any such case, the Company will make appropriate provision
        to insure that the provisions of this Paragraph 4 hereof will thereafter
        be
        applicable as nearly as may be in relation to any shares of stock or securities
        thereafter deliverable upon the exercise of this Warrant.  The Company
        will not effect any consolidation, merger or sale or conveyance unless prior
        to
        the consummation thereof, the successor corporation (if other than the Company)
        assumes by written instrument the obligations under this Paragraph 4 and
        the
        obligations to deliver to the holder of this Warrant such shares of stock,
        securities or assets as, in accordance with the foregoing provisions, the
        holder
        may be entitled to acquire.

       

      (f)  Distribution
        of Assets.  In case the Company shall
        declare or make any distribution of its assets (including cash) to holders
        of
        Common Stock as a partial liquidating dividend, by way of return of capital
        or
        otherwise, then, after the date of record for determining shareholders entitled
        to such distribution, but prior to the date of distribution, the holder of
        this
        Warrant shall be entitled upon exercise of this Warrant for the purchase
        of any
        or all of the shares of Common Stock subject hereto, to receive the amount
        of
        such assets which would have been payable to the holder had such holder been
        the
        holder of such shares of Common Stock on the record date for the determination
        of shareholders entitled to such distribution.

       

      (g)  Notice
        of Adjustment.  Upon the occurrence of
        any event which requires any adjustment of the Exercise Price, then, and
        in each
        such case, the Company shall give notice thereof to the holder of this Warrant,
        which notice shall state the Exercise Price resulting from such adjustment
        and
        the increase or decrease in the number of Warrant Shares purchasable at such
        price upon exercise, setting forth in reasonable detail the method of
        calculation and the facts upon which such calculation is based.  Such
        calculation shall be certified by the Chief Financial Officer of the
        Company.

       

      (h)  Minimum
        Adjustment of Exercise Price.  No
        adjustment of the Exercise Price shall be made in an amount of less than
        1% of
        the Exercise Price in effect at the time such adjustment is otherwise required
        to be made, but any such lesser adjustment shall be carried forward and shall
        be
        made at the time and together with the next subsequent adjustment which,
        together with any adjustments so carried forward, shall amount to not less
        than
        1% of such Exercise Price.

       

      (i)  No
        Fractional Shares.  No fractional shares
        of Common Stock are to be issued upon the exercise of this Warrant, but the
        Company shall pay a cash adjustment in respect of any fractional share which
        would otherwise be issuable in an amount equal to the same fraction of the
        Market Price of a share of Common Stock on the date of such
        exercise.

       

      (j)  Other
        Notices.  In case at any
        time:

       

      (i)  the
        Company shall declare any dividend upon the Common Stock payable in shares
        of
        stock of any class or make any other distribution (including dividends or
        distributions payable in cash out of retained earnings) to the holders of
        the
        Common Stock;

       

      (ii)  the
        Company shall offer for subscription pro rata to the holders of the Common
        Stock
        any additional shares of stock of any class or other rights;

       

      (iii)  there
        shall be any capital reorganiza­tion of the Company, or reclassification of
        the Common Stock, or consolidation or merger of the Company with or into,
        or
        sale of all or substan­tially all its assets to, another corporation or
        entity; or

       

      (iv)  there
        shall be a voluntary or involun­tary dissolution, liquidation or winding up
        of the Company;

       

      then,
        in
        each such case, the Company shall give to the holder of this Warrant (a)
        notice
        of the date on which the books of the Company shall close or a record shall
        be
        taken for determining the holders of Common Stock entitled to receive any
        such
        divi­dend, distribution, or subscription rights or for determining the
        holders of Common Stock entitled to vote in respect of any such reorganization,
        reclassification, consolidation, merger, sale, dissolution, liquidation or
        winding-up and (b) in the case of any such reorganization, reclassification,
        consolidation, merger, sale, dissolution, liquidation or winding-up, notice
        of
        the date (or, if not then known, a reasonable approximation thereof by the
        Company) when the same shall take place.  Such notice shall also
        specify the date on which the holders of Common Stock shall be entitled to
        receive such dividend, distribution, or subscription rights or to exchange
        their
        Common Stock for stock or other securities or property deliverable upon such
        reorganization, re­classification, consolidation, merger, sale, dissolution,
        liquidation, or winding-up, as the case may be.  Such notice shall be
        given at least 30 days prior to the record date or the date on which the
        Company’s books are closed in respect thereto.  Failure to give any
        such notice or any defect therein shall not affect the validity of the
        proceedings referred to in clauses (i), (ii), (iii) and (iv) above.

       

      (k)  Certain
        Events.  If any event occurs of the type
        contemplated by the adjustment provisions of this Paragraph 4 but not expressly
        provided for by such provisions, the Company will give notice of such event
        as
        provided in Paragraph 4(g) hereof, and the Company’s Board of Directors will
        make an appropriate adjustment in the Exercise Price and the number of shares
        of
        Common Stock acquirable upon exercise of this Warrant so that the rights
        of the
        holder shall be neither enhanced nor diminished by such event.

       

      (l)  Certain
        Definitions.

       

      (i)  “Common
        Stock Deemed Outstanding” shall mean the number of
        shares of Common Stock actually outstanding (not including shares of Common
        Stock held in the treasury of the Company), plus (x) pursuant to Paragraph
        4(b)(i) hereof, the maximum total number of shares of Common Stock issuable
        upon
        the exercise of Options, as of the date of such issuance or grant of such
        Options, if any, and (y) pursuant to Paragraph 4(b)(ii) hereof, the maximum
        total number of shares of Common Stock issuable upon conversion or exchange
        of
        Convertible Securities, as of the date of issuance of such Convertible
        Securities, if any.

       

      (ii)  “Market
        Price,” as of any date, (i) means the average of
        the last reported sale prices for the shares of Common Stock on the OTCBB
        for
        the five (5) Trading Days immediately preceding such date as reported by
        Bloomberg, or (ii) if the OTCBB is not the principal trading market for the
        shares of Common Stock, the average of the last reported sale prices on the
        principal trading market for the Common Stock during the same period as reported
        by Bloomberg, or (iii) if market value cannot be calculated as of such date
        on
        any of the foregoing bases, the Market Price shall be the fair market value
        as
        reasonably determined in good faith by (a) the Board of Directors of the
        Company
        or, at the option of a majority-in-interest of the holders of the outstanding
        Warrants by (b) an independent investment bank of nationally recognized standing
        in the valuation of businesses similar to the business of the corporation.
        The
        manner of determining the Market Price of the Common Stock set forth in the
        foregoing definition shall apply with respect to any other security in respect
        of which a determination as to market value must be made hereunder.

       

      (iii)  “Common
        Stock,” for purposes of this Paragraph 4, includes
        the Common Stock, par value $.01 per share, and any additional class of stock
        of
        the Company having no preference as to dividends or distributions on
        liquidation, provided that the shares purchasable pursuant to this Warrant
        shall
        include only shares of Common Stock, par value $.01 per share, in respect
        of
        which this Warrant is exercisable, or shares resulting from any subdivision
        or
        combination of such Common Stock, or in the case of any reorganization,
        reclassification, consolidation, merger, or sale of the character referred
        to in
        Paragraph 4(e) hereof, the stock or other securities or property provided
        for in
        such Paragraph.

       

      5.  Issue
        Tax.

       

      
        	
                  The
                  issuance of certificates for Warrant Shares upon the exercise of
                  this
                  Warrant shall be made without charge to the holder of this Warrant
                  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 of this
                  Warrant.

              


      

       

      6.  No
        Rights or Liabilities as a Shareholder.

       

      
        	
                  This
                  Warrant shall not entitle the holder hereof to any voting rights
                  or other
                  rights as a shareholder of the Company.  No provision of this
                  Warrant, in the absence of affirmative action by the holder hereof
                  to
                  purchase Warrant Shares, and no mere enumeration herein of the
                  rights or
                  privileges of the holder hereof, shall give rise to any liability
                  of such
                  holder for the Exercise Price or as a shareholder of the Company,
                  whether
                  such liability is asserted by the Company or by creditors of the
                  Company.

              


      

       

      7.  Transfer,
        Exchange, and Replacement of Warrant.

       

      (a)  Restriction
        on Transfer.  This Warrant and the
        rights granted to the holder hereof are transferable, in whole or in part,
        upon
        surrender of this Warrant, together with a properly executed assignment in
        the
        form attached hereto, at the office or agency of the Company referred to
        in
        Paragraph 7(e) below, pro­vided, however, that any transfer or
        assignment shall be subject to the conditions set forth in Paragraph 7(f)
        hereof
        and to the applicable provisions of the Securities Purchase
        Agreement.  Until due presentment for registration of transfer on the
        books of the Company, the Company may treat the registered holder hereof
        as the
        owner and holder hereof for all purposes, and the Company shall not be affected
        by any notice to the con­trary.  Notwithstanding anything to the
        contrary contained herein, the registration rights described in Paragraph
        8 are
        assignable only in accordance with the provisions of that certain Registration
        Rights Agreement, dated July 24, 2007, by and among the Company and the other
        signatories thereto (the “Registration Rights Agreement”).

       

      (b)  Warrant
        Exchangeable for Different
        Denomina­tions.  This Warrant is
        exchange­able, upon the surrender hereof by the holder hereof at the office
        or agency of the Company referred to in Paragraph 7(e) below, for new Warrants
        of like tenor representing in the aggregate the right to purchase the number
        of
        shares of Common Stock which may be purchased hereunder, each of such new
        Warrants to represent the right to purchase such number of shares as shall
        be
        designated by the holder hereof at the time of such surrender.

       

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

       

      (d)  Cancellation;
        Payment of Expenses.  Upon the surrender
        of this Warrant in connection with any trans­fer, exchange, or replacement
        as provided in this Paragraph 7, this Warrant shall be promptly canceled
        by the
        Company.  The Company shall pay all taxes (other than securities
        transfer taxes) and all other expenses (other than legal expenses, if any,
        incurred by the holder or transferees) and charges payable in connection
        with
        the preparation, execution, and delivery of Warrants pursuant to this Paragraph
        7.

       

      (e)  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 the holder hereof),
        a
        register for this Warrant, in which the Company shall record the name and
        address of the person in whose name this Warrant has been issued, as well
        as the
        name and address of each transferee and each prior owner of this
        Warrant.

       

      (f)  Exercise
        or Transfer Without Registration.  If,
        at the time of the surrender of this Warrant in connection with any exercise,
        transfer, or exchange of this Warrant, this Warrant (or, in the case of any
        exercise, the Warrant Shares issuable hereunder), shall not be registered
        under
        the Securities Act of 1933, as amended (the “Securities Act”) and under
        applicable state securities or blue sky laws, the Company may require, as
        a
        condition of allowing such exercise, transfer, or exchange, (i) that the
        holder
        or transferee of this Warrant, as the case may be, furnish to the Company
        a
        written opinion of counsel, which opinion and counsel are acceptable to the
        Company, to the effect that such exercise, transfer, or exchange may be made
        without registration under said Act and under applicable state securities
        or
        blue sky laws, (ii) that the holder or transferee execute and deliver to
        the
        Company an investment letter in form and substance acceptable to the Company
        and
        (iii) that the transferee be an “accredited investor” as defined in Rule 501(a)
        promulgated under the Securities Act; provided that no such opinion, letter
        or
        status as an “accredited investor” shall be required in connection with a
        transfer pursuant to Rule 144 under the Securities Act.  The first
        holder of this Warrant, by taking and holding the same, represents to the
        Company that such holder is acquiring this Warrant for investment and not
        with a
        view to the distribution thereof.

       

      8.  Registration
        Rights.

       

      
        	
                The
                  initial holder of this Warrant (and certain assignees thereof)
                  is entitled
                  to the benefit of such registration rights in respect of the Warrant
                  Shares as are set forth in Section 2 of the Registration Rights
                  Agreement.

              


      

       

      9.  Notices.

       

      
        	
                  All
                  notices, requests, and other communications required or permitted
                  to be
                  given or delivered hereunder to the holder of this Warrant shall
                  be in
                  writing, and shall be personally delivered, or shall be sent by
                  certified
                  or registered mail or by recognized overnight mail courier, postage
                  prepaid and addressed, to such holder at the address shown for
                  such holder
                  on the books of the Company, or at such other address as shall
                  have been
                  furnished to the Company by notice from such holder.  All
                  notices, requests, and other communications required or permitted
                  to be
                  given or delivered hereunder to the Company shall be in writing,
                  and shall
                  be personally delivered, or shall be sent by certified or registered
                  mail
                  or by recognized overnight mail courier, postage prepaid and addressed,
                  to
                  the office of the Company at 65 Dan Road, Canton, MA 02021, Attention:
                  Chief Executive Officer, or at such other address as shall have
                  been
                  furnished to the holder of this Warrant by notice from the
                  Company.  Any such notice, request, or other communication may
                  be sent by facsimile, but shall in such case be subsequently confirmed
                  by
                  a writing personally delivered or sent by certified or registered
                  mail or
                  by recognized overnight mail courier as provided above.  All
                  notices, requests, and other communications shall be deemed to
                  have been
                  given either at the time of the receipt thereof by the person entitled
                  to
                  re­ceive such notice at the address of such person for purposes of
                  this Paragraph 9, or, if mailed by registered or certified mail
                  or with a
                  recognized overnight mail courier upon deposit with the United
                  States Post
                  Office or such overnight mail courier, if postage is prepaid and
                  the
                  mailing is properly addressed, as the case may
                  be.

              


      

       

      10.  Governing
        Law.

       

      
        	
                  THIS
                  WARRANT SHALL BE ENFORCED, GOVERNED BY AND CONSTRUED IN ACCORDANCE
                  WITH
                  THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE
                  AND TO BE
                  PERFORMED ENTIRELY WITHIN SUCH STATE, WITHOUT REGARD TO THE PRINCIPLES
                  OF
                  CONFLICT OF LAWS.  THE PARTIES HERETO HEREBY SUBMIT TO THE
                  EXCLUSIVE JURISDICTION OF THE UNITED STATES FEDERAL COURTS LOCATED
                  IN NEW
                  YORK, NEW YORK WITH RESPECT TO ANY DISPUTE ARISING UNDER THIS WARRANT,
                  THE
                  AGREEMENTS ENTERED INTO IN CONNECTION HEREWITH OR THE TRANSACTIONS
                  CONTEMPLATED HEREBY OR THEREBY. BOTH PARTIES IRREVOCABLY WAIVE
                  THE DEFENSE
                  OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH SUIT OR
                  PROCEEDING.  BOTH PARTIES FURTHER AGREE THAT SERVICE OF PROCESS
                  UPON A PARTY MAILED BY FIRST CLASS MAIL SHALL BE DEEMED IN EVERY
                  RESPECT
                  EFFECTIVE SERVICE OF PROCESS UPON THE PARTY IN ANY SUCH SUIT OR
                  PROCEEDING.  NOTHING HEREIN SHALL AFFECT EITHER PARTY’S RIGHT TO
                  SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW.  BOTH
                  PARTIES AGREE THAT A FINAL NON-APPEALABLE JUDGMENT IN ANY SUCH
                  SUIT OR
                  PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS
                  BY SUIT ON SUCH JUDGMENT OR IN ANY OTHER LAWFUL MANNER.  THE
                  PARTY WHICH DOES NOT PREVAIL IN ANY DISPUTE ARISING UNDER THIS
                  WARRANT
                  SHALL BE RESPONSIBLE FOR ALL FEES AND EXPENSES, INCLUDING ATTORNEYS’ FEES,
                  INCURRED BY THE PREVAILING PARTY IN CONNECTION WITH SUCH
                  DISPUTE.

              


      

       

      11.  Miscellaneous.

       

      (a)  Amendments.  This
        Warrant and any provision hereof may only be amended by an instrument in
        writing
        signed by the Company and the holder hereof.

       

      (b)  Descriptive
        Headings.  The descriptive headings of
        the several paragraphs of this Warrant are in­serted for purposes of
        reference only, and shall not affect the meaning or construction of any of
        the
        provisions hereof.

       

      (c)  Cashless
        Exercise.  Notwithstanding anything to
        the contrary contained in this Warrant, if the resale of the Warrant Shares
        by
        the holder is not then registered pursuant to an effective registration
        statement under the Securities Act, this Warrant may be exercised by
        presentation and surrender of this Warrant to the Company at its principal
        executive offices with a written notice of the holder’s intention to effect a
        cashless exercise, including a calculation of the number of shares of Common
        Stock to be issued upon such exercise in accordance with the terms hereof
        (a
“Cashless Exercise”).  In the event of a Cashless Exercise, in lieu of
        paying the Exercise Price in cash, the holder shall surrender this Warrant
        for
        that number of shares of Common Stock determined by multiplying the number
        of
        Warrant Shares to which it would otherwise be entitled by a fraction, the
        numerator of which shall be the difference between the then current Market
        Price
        per share of the Common Stock and the Exercise Price,  and the
        denominator of which shall be the then current Market Price per share of
        Common
        Stock.  For example, if the holder is exercising 100,000 Warrants with
        a per Warrant exercise price of $0.75 per share through a cashless exercise
        when
        the Common Stock’s current Market Price per share is $2.00 per share, then upon
        such Cashless Exercise the holder will receive 62,500 shares of Common
        Stock.

       

      (d)  Remedies.  The
        Company acknowledges that a breach by it of its obligations hereunder will
        cause
        irreparable harm to the holder, by vitiating the intent and purpose of the
        transaction contemplated hereby.  Accordingly, the Company
        acknowledges that the remedy at law for a breach of its obligations under
        this
        Warrant will be inadequate and agrees, in the event of a breach or threatened
        breach by the Company of the provisions of this Warrant, that the holder
        shall
        be entitled, in addition to all other available remedies at law or in equity,
        and in addition to the penalties assessable herein, to an injunction or
        injunctions restraining, preventing or curing any breach of this Warrant
        and to
        enforce specifically the terms and provisions thereof, without the necessity
        of
        showing economic loss and without any bond or other security being
        required.

       

      


       

      


       

      


       

      


       

      


       

      


       

      [REMAINDER
        OF PAGE INTENTIONALLY LEFT BLANK]

       


      
        
           

        

        
           

          
            

          

        

        
           

        

      


      IN
        WITNESS WHEREOF, the Company has caused this Warrant to be signed by
        its duly authorized officer.

       

      AVITAR
        INC.

      


      


      


      By:
        _______________________________

       Peter
        Phildius

       Chief
        Executive Officer

      


       

      Dated
        as
        of July 19, 2007

       


      
        
           

        

        
           

          
            

          

        

        
           

        

      


      FORM
        OF EXERCISE AGREEMENT

       

      


       

      Dated:  ________
        __,
        200_

       

      


       

      To:           ______________________

       

      


       

      


       

      The
        undersigned, pursuant to the provisions set forth in the within Warrant,
        hereby
        agrees to purchase ________ shares of Common Stock covered by such Warrant,
        and
        makes pay­ment herewith in full therefor at the price per share provided by
        such Warrant in cash or by certified or official bank check in the amount
        of,
        or, if the resale of such Common Stock by the undersigned is not currently
        registered pursuant to an effective registration statement under the Securities
        Act of 1933, as amended, by surrender of securities issued by the Company
        (including a portion of the Warrant) having a market value (in the case of
        a
        portion of this Warrant, determined in accordance with Section 11(c) of the
        Warrant) equal to $_________.  Please issue a certificate or
        certifi­cates for such shares of Common Stock in the name of and pay any
        cash for any fractional share to:

       

      


       

      Name:                      ______________________________

      


      


      Signature:

      Address:____________________________

      _____________________________

      


      


      
        	
                 

              	
                Note:

              	
                The
                  above signature should correspond exactly with the name on the
                  face of the
                  within Warrant, if applicable.

              


      

      


       

      and,
        if
        said number of shares of Common Stock shall not be all the shares purchasable
        under the within Warrant, a new Warrant is to be issued in the name of said
        undersigned covering the balance of the shares purchasable thereunder less
        any
        frac­tion of a share paid in cash.

       


      
        
           

        

        
           

          
            

          

        

        
           

        

      


      FORM
        OF ASSIGNMENT

       

      


       

      


       

      FOR
        VALUE RECEIVED, the undersigned hereby sells, assigns, and transfers
        all the rights of the undersigned under the within Warrant, with respect
        to the
        number of shares of Common Stock covered thereby set forth hereinbelow,
        to:

      


       

      Name
        of
        Assignee                                                                Address                                                                No
        of Shares

       

      


       

      


       

      


       

      ,
        and
        hereby irrevocably constitutes and appoints ___________________________________
        as agent and attorney-in-fact to trans­fer said Warrant on the books of the
        within-named corporation, with full power of substitution in the
        premises.

       

      


       

      Dated:                      ________
        __, 200_

       

      


       

      In
        the
        presence
        of:                                                                                    ______________________________

       

      Name:______________________________

      


       

      Signature:_________________________

      Title
        of
        Signing Officer or Agent (if any):

      ______________________________

      Address:                      ______________________________

      ______________________________

      


      


      
        	
                 

              	
                Note:

              	
                The
                  above signature should correspond exactly with the name on the
                  face of the
                  within Warrant, if
                  applicable.