Document:

EXECUTION
VERSION

     

    SECURITIES
PURCHASE AGREEMENT

     

    This
Securities Purchase Agreement (this "Agreement") is dated as of
December 21, 2010, among Oramed Pharmaceuticals Inc., a Nevada corporation (the
"Company"), and the
investors identified on the signature page hereto (each, an "Investor" and collectively
the “Investors”).

     

    WHEREAS,
subject to the terms and conditions set forth in this Agreement and pursuant to
Section 4(2) of the Securities Act of 1933, as amended (the “Securities Act”) and Rule 506
promulgated thereunder, the Company desires to issue and sell to each Investor,
and each Investor, severally and not jointly, desires to purchase from the
Company certain securities of the Company, as more fully described in this
Agreement; and

     

    WHEREAS,
the Company is currently negotiating with other potential investors to invest in
the Company on substantially the same price as set forth in this Agreement
("Related
Investments").

     

    NOW,
THEREFORE, in consideration of the mutual covenants contained in this Agreement,
and for other good and valuable consideration the receipt and adequacy of which
are hereby acknowledged, the Company and the Investors agree as
follows:

     

    ARTICLE
I.

    DEFINITIONS

     

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

     

    "Affiliate" means any Person
that, directly or indirectly through one or more intermediaries, controls or is
controlled by or is under common control with a Person, as such terms are used
in and construed under Rule 144.

     

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

     

    "Closing Date" means the later
of (i) January 10, 2011 or (ii) the Trading Day when all of the all conditions
precedent to (A) the Investors’ obligations to pay the Investment Amount and (B)
the Company’s obligations to deliver the Securities have been satisfied or
waived.
 

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    "Common Stock" means the
common stock of the Company, par value $0.001 per share, and any other class of
securities into which such common stock may hereafter be reclassified or changed
into.

     

    "Investment Amount" means,
with respect to each Investor, the aggregate amount to be paid for Shares and
Warrants purchased hereunder as indicated below such Investor's name on the
signature page of this Agreement and as set forth on Schedule
1.

     

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

     

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

     

    "Per Unit Purchase Price"
means $0.32.

     

    "Person" means an individual
or corporation, partnership, trust, incorporated or unincorporated association,
joint venture, limited liability company, joint stock company, government (or an
agency or subdivision thereof) or other entity of any kind.

     

    "Rule 144" means Rule 144
promulgated by the SEC pursuant to the Securities Act, as such Rule may be
amended from time to time, or any similar rule or regulation hereafter adopted
by the SEC having substantially the same effect as such Rule.

     

    "SEC" means the U.S.
Securities and Exchange Commission.

     

    "Securities" means the Shares,
the Warrants and the Warrant Shares.

     

    "Shares" means the shares of
Common Stock issued or issuable to the Investors pursuant to this
Agreement.

     

    "Short Sales" means, without
limitation, all "short sales" as defined in Rule 200 of Regulation SHO
promulgated under the Exchange Act.

     

    "Trading Day" means any day
other than Friday, Saturday, Sunday or other day on which commercial banks in
The City of New York or Israel are authorized or required by law to remain
closed.

     

    "Transaction Documents" means
this Agreement, the Warrants and any other documents or agreements executed in
connection with the transactions contemplated hereunder.

     

    "Warrants" means the Common
Stock purchase warrants in the form of Exhibit A.
 

    
      
         

      

      
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    "Warrant Shares" means the
shares of Common Stock issuable upon exercise of the Warrants.

     

    ARTICLE
II.

    PURCHASE
AND SALE

     

    2.1          Closing.  On
the Closing Date, subject to the terms and conditions set forth in this
Agreement, the Company shall issue and sell to each Investor, severally and not
jointly, and each Investor, severally and not jointly, shall purchase from the
Company, the Shares and the Warrants set forth opposite such Investor’s name on
Schedule 1.
Upon satisfaction of the conditions set forth in Sections 2.2 and 2.3, the
Closing shall occur at such location as the parties shall mutually
agree.

     

    (b)
Notwithstanding anything to the contrary in this Agreement, the number of shares
of Common Stock (and a proportionate number of Warrants) that any Investor shall
be entitled to purchase from the Company shall be reduced to the extent that
after giving effect to such purchase, such Investor (together with such
Investor’s Affiliates) would beneficially own in excess of 9.9% of the shares of
Common Stock outstanding immediately after giving effect to such purchase and
any other purchases of Common Stock being made concurrently.  For
purposes of the foregoing sentence, the aggregate number of shares of Common
Stock beneficially owned by such Person and its Affiliates shall exclude shares
of Common Stock which would be issuable upon exercise of the Warrants or any
other securities of the Company beneficially owned by such Person and its
Affiliates (including, without limitation, any convertible notes or convertible
shares, options or warrants) that is subject to a limitation on conversion or
exercise analogous to the limitation contained herein. Except as set forth in
the preceding sentence, for purposes of this paragraph, beneficial ownership
shall be calculated in accordance with Section 13(d) of the Exchange
Act.

     

    2.2          Deliveries.

     

    (a)    On
the date hereof, the Company and each of the Investors shall deliver or cause to
be delivered to the other, this Agreement, together with all exhibits and
schedules attached thereto, duly executed by an authorized
representative.

     

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

     

    (i)           a
certificate evidencing the number of Shares equal to such Investor’s Investment
Amount divided by the Per Unit Purchase Price, registered in the name of such
Investor as set forth on Schedule 1;

    
      
         

      

      
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    (ii)           a
warrant, registered in the name of such Investor, pursuant to which such
Investor shall have the right to acquire the number of shares of Common Stock
equal to 35% of the number of Shares issuable to such Investor pursuant to
Section 2.2(i) and

     

    (iii)           a
certificate of the Secretary of the Company dated the Closing Date, certifying
the incumbency and authority of the officers or authorized signatories of the
Company who execute this Agreement and the other Transaction Documents and the
truth, correctness and completeness of the following exhibits which shall be
attached thereto: (i) a copy of resolutions duly adopted by the Board of
Directors of the Company, in full force and effect at the time this Agreement is
entered into, authorizing the execution of this Agreement and the other
Transaction Documents and the consummation of the transactions contemplated
herein and therein, (ii) a copy of the Certificate of Incorporation of the
Company, as amended through the Closing Date, and as filed with and accepted and
certified by an appropriate official of the Company’s jurisdiction of
incorporation, and (iii) a copy of the By-Laws of the Company, as amended
through the Closing Date.

     

    (c)    On
the Closing Date, each Investor shall deliver or cause to be delivered (by check
or wire transfer) the aggregate amount of the Investor’s Investment Amount in
payment for the Shares and Warrants in accordance with the instructions set
forth on Schedule
2 hereof.

     

    2.3          Closing
Conditions.

     

    (a)    The
obligations of the Company hereunder in connection with the Closing are subject
to the following conditions having been met:

     

    (i)           the
accuracy in all material respects when made and on the Closing Date of the
representations and warranties of the Investors contained herein;

     

    (ii)          all
obligations, covenants and agreements of the Investors contained herein required
to be performed at or prior to the Closing Date shall have been performed;
and

     

    (iii)         the
delivery by the Investors of the items set forth in Section 2.2(c) of this
Agreement.

     

    (b)    The
respective obligations of the Investors hereunder in connection with the Closing
are subject to the following conditions having been met:

     

    (i)           the
accuracy in all material respects on the Closing Date of the representations and
warranties of the Company contained herein;
  

    
      
         

      

      
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    (ii)           all
obligations, covenants and agreements of the Company contained herein required
to be performed at or prior to the Closing Date shall have been
performed;

     

    (iii)          the
delivery by the Company of the items set forth in Section 2.2(b) of this
Agreement;

     

    (iv)          from
the date hereof to the Closing Date, trading in the Common Stock shall not have
been suspended by the SEC or the National Association of Securities Dealers
over-the-counter electronic bulletin board (the “OTCBB”).

     

    ARTICLE
III.

    REPRESENTATIONS
AND WARRANTIES

     

    3.1          Representations and
Warranties of the Company.  The Company hereby represents and
warrants to the Investors as follows on the date hereof and as of the Closing
Date:

     

    (a)    Organization, Good Standing
and Qualification of the Company.  The Company is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Nevada.  The Company has all requisite corporate power and
authority to own and operate its properties and to carry on its business as now
being conducted and as proposed to be conducted.  The Company is duly
qualified to do business as a foreign corporation and is in good standing in
each jurisdiction in which failure to so qualify would materially and adversely
affect the business, properties, operations, prospects or condition, financial
or otherwise, of the Company.  The resolutions adopted by the
directors of the Company on December __, 2010 authorizing the transactions
contemplated by the Transaction Documents have not been amended or modified in
any way, have not been rescinded and are in full force and effect on the date
hereof.

     

    (b)    Corporate Authority;
Enforceability.  The Company has full right, power and
authority to issue and sell the Securities as herein contemplated and the
Company has full power and authority to enter into and perform its obligations
under the Transaction Documents.  The execution and delivery of the
Transaction Documents and the consummation of the transactions contemplated
herein and therein have been duly authorized and approved by all requisite
corporate action, and each of the Transaction Documents are a valid and legally
binding obligation of the Company.
 

    
      
         

      

      
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    (c)    Conflicts.  Neither
the authorization, execution and delivery of the Transaction Documents nor the
consummation of the transactions herein and therein contemplated, will (i)
conflict with or result in a breach of any of the terms of the Company’s
Certificate of Incorporation or By-Laws, (ii) violate any judgment, order,
injunction, decree or award of any court or governmental body, having
jurisdiction over the Company, against or binding on the Company or to which its
property is subject, (iii) violate any material law or regulation of any
jurisdiction which is applicable to the Company, (iv) violate, conflict with or
result in the breach or termination of, or constitute a default under, the terms
of any material agreement to which the Company is a party, except for such
violations or defaults which do not materially and adversely affect the
business, assets, operations, prospects or condition, financial or otherwise of
the Company, or (v) violate or conflict with the rules and regulations of the
National Association of Securities Dealers over-the-counter electronic bulletin
board (the “OTCBB“)
applicable to the Company.

     

    (d)    Capitalization. The
authorized capital of the Company as of the date hereof consists of 200,000,000
shares of Common Stock, of which there were (i) 58,756,535 issued and
outstanding as of the date hereof as fully paid and non-assessable shares; (ii)
options and/or warrants to purchase 8,765,022 shares of Common Stock; and (iii)
employee and directors options to purchase 6,648,000 shares of Common Stock. As
of the date hereof, the Company has not issued any capital stock since its most
recently filed periodic report under the Exchange Act, other than pursuant to
the exercise of employee stock options under the Company’s stock option plans
and the issuance of shares of Common Stock to employees pursuant to the
Company’s employee stock purchase plan outstanding as of the date of the most
recently filed periodic report under the Exchange Act.  All of the
outstanding shares of capital stock of the Company are validly issued, fully
paid and nonassessable.  No further approval or authorization of any
stockholder or the Board of Directors of the Company is required for the
issuance and sale of the Securities.  The issuance of the Securities
pursuant to the provisions of this Agreement will not violate any preemptive
rights or rights of first refusal granted by the Company that will not be
validly waived or complied with, and will be free of any liens or encumbrances,
other than any liens or encumbrances created by or imposed upon the Investors
through no action of the Company.  There are no stockholders
agreements, voting agreements or other similar agreements with respect to the
Company’s capital stock to which the Company is a party or, to the knowledge of
the Company, between or among any of the Company’s stockholders.

     

    (e)    Litigation.  There
are no actions, suits or proceedings at law or in equity or by or before any
governmental instrumentality or other agency or regulatory authority now
pending, or, to the best knowledge of the Company, threatened against the
Company which, if adversely determined, could materially and adversely affect
the business, assets, operations, prospects or condition, financial or
otherwise, of the Company. There is no action, suit or proceeding by the Company
currently pending or that the Company currently intends to
initiate.

     

    (f)     Compliance with
Laws.  The Company is not in violation of any statute, law,
rule or regulation, or in default with respect to any judgment, writ,
injunction, decree, rule or regulation of any court or governmental agency or
instrumentality, except for such violations or defaults which do not materially
and adversely affect the business, assets, operations, prospects or condition,
financial or otherwise, of the Company.
 

    
      
         

      

      
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    (g)    Governmental
Consents.  Subject to the accuracy of the representations and
warranties of the Investors set forth herein, no registration or filing with, or
consent or approval of or other action by, any Federal, state or other
government agency under laws and regulations thereof as now in effect is or will
be necessary for the valid execution, delivery and performance by the Company of
the Transaction Documents, and the issuance, sale and delivery of the
Securities, other than the filing of a Form D with the SEC and the filings
required by state securities law.

     

    (h)    Regulatory
Matters.  The clinical, pre-clinical and other trials, studies
and tests conducted by or on behalf of or sponsored by the Company relating to
its pharmaceutical product candidates were and, if still pending, are being
conducted in all material respects in accordance with medical and scientific
protocols and research procedures that the Company reasonably believes are
appropriate.  The descriptions of the results of such trials, studies
and tests as set forth in the SEC Documents (as defined in Section 3(i) of this
Agreement), provided to the Investors are accurate in all material respects and
fairly present the data derived from such trials, studies and
tests.  All clinical trials conducted by the Company have been in
compliance in all material respects with applicable laws and
regulations.  The Company has not received any warning letters or
written correspondence from the FDA and/or any other governmental entity or
agency requiring the termination, suspension or modification of any clinical,
pre-clinical and other trials, studies or tests that are material to the
Company.   None of the clinical trials that the Company is
currently conducting or sponsoring is subject to any temporary or permanent
clinical hold by the FDA or any other governmental entity or agency, and the
Company has no reason to believe that such clinical trials will be subject to
any such action.  The Company is planning to file an Investigational
New Drug Application with the United States Food and Drug Administration (“FDA”) for a phase II clinical
trial it intends to conduct with respect to its orally ingestible insulin
capsule (ORMD0801) (the “IND
Application”).  The IND Application will be in material
compliance with applicable laws and rules and regulations when
filed.

     

    (i)     SEC Documents; Financial
Statements.  The Company has 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 Exchange Act (all of the foregoing
filed prior to the date hereof and all exhibits included therein and financial
statements, notes and schedules thereto and documents incorporated by reference
therein being hereinafter referred to as the “SEC
Documents”).  The Company has delivered to the Investors or
their respective representatives true, correct and complete copies of each of
the SEC Documents not available on the Electronic Data Gathering, Analysis, and
Retrieval system of the SEC (“EDGAR”) that have been
requested by an Investor.  As of their respective dates, the SEC
Documents complied as to form in all material respects with the requirements of
the Exchange Act and the rules and regulations of the SEC promulgated thereunder
applicable to the SEC Documents, and none of the SEC Documents, at the time they
were filed with the SEC, contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary in
order to make the statements therein, in 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
as to form 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 (“GAAP”), 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).  The
Company has no liabilities or obligations required to be disclosed in the SEC
Documents that are not so disclosed in the SEC Documents, other than those
incurred in the ordinary course of the Company’s
business.
 

    
      
         

      

      
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    (j)     Sarbanes-Oxley; Internal
Accounting Controls. Each SEC Document containing financial statements
that has been filed with or submitted to the SEC was accompanied by the
certifications required to be filed or submitted by the Company’s chief
executive officer and chief financial officer pursuant to the Sarbanes-Oxley Act
of 2002 (the “Sarbanes-Oxley
Act”); at the time of filing or submission of each such certification,
such certification was true and accurate and complied with the Sarbanes-Oxley
Act and the rules and regulations promulgated thereunder; such certifications
contain no qualifications or exceptions to the matters certified therein and
have not been modified or withdrawn; and neither the Company nor any of its
officers has received notice from any governmental entity questioning or
challenging the accuracy, completeness, form or manner of filing or submission
of such certification;

     

    (k)    Absence of
Changes.  The Common Stock is quoted for trading on the
OTCBB.  No order ceasing, halting or suspending trading in the Common
Stock nor prohibiting the sale of the Common Stock has been issued to and is
outstanding against the Company or its directors, officers or promoters, and, to
the best of the Company’s knowledge, no investigations or proceedings for such
purposes are pending or threatened.  The Company has not taken any
action which would be reasonably expected to result in the delisting or
suspension of quotation of the Common Stock on or from the OTCBB and the Company
has complied in all material respects with the rules and regulations of
eligibility on the OTCBB.  The Company has not taken any steps to seek
protection pursuant to any bankruptcy law nor does the Company have any
knowledge or reason to believe that its creditors intend to initiate involuntary
bankruptcy proceedings or any actual knowledge of any fact which would
reasonably lead any creditor or creditors to do so.  Based on the
financial condition of the Company as of the date hereof, after giving effect to
the receipt by the Company of the proceeds from the transactions contemplated
hereby, the Company reasonably believes that (i) the fair saleable value of the
Company’s assets exceeds the amount that will be required to be paid on or in
respect of the Company’s existing debts and other liabilities as they mature;
(ii) the Company’s assets do not constitute unreasonably small capital to carry
on its business as now conducted and as proposed to be conducted including its
capital needs taking into account the particular capital requirements of the
business conducted by the Company, and projected capital requirements and
capital availability thereof; and (iii) the current cash flow of the Company,
together with the proceeds the Company would receive, were it to liquidate all
of its assets, after taking into account all anticipated uses of the cash, would
be sufficient to pay all amounts on or in respect of its liabilities when such
amounts are required to be paid.  The Company does not intend to incur
debts beyond its ability to pay such debts as they mature (taking into account
the timing and amounts of cash to be payable on or in respect of its
debt).  The SEC Documents set forth as of the dates thereof all
outstanding secured and unsecured Indebtedness of the Company or any Subsidiary,
or for which the Company or any Subsidiary has commitments. For the purposes of
this Agreement, “Indebtedness” shall mean (a)
any liabilities for borrowed money or amounts owed (other than trade accounts
payable incurred in the ordinary course of business), (b) all guaranties,
endorsements and other contingent obligations in respect of Indebtedness of
others, whether or not the same are or should be reflected in the Company’s
balance sheet (or the notes thereto), except guaranties by endorsement of
negotiable instruments for deposit or collection or similar transactions in the
ordinary course of business; and (c) the present value of any lease payments due
under leases required to be capitalized in accordance with GAAP. Neither the
Company nor any Subsidiary is in default with respect to any
Indebtedness.
 

    
      
         

      

      
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    (l)     Patents and
Trademarks. The Company has rights to use all patents, patent
applications, trademarks, trademark applications, service marks, trade names,
trade secrets, inventions, copyrights, licenses and other intellectual property
rights and similar rights necessary or material for use in connection with its
business as described in the SEC Documents and which the failure to so have
would have a material adverse effect on the results of operations, assets,
business, prospects, or condition, financial or otherwise, of the Company
(collectively, the “Intellectual Property
Rights”). The Company has not received any notice (written or otherwise)
that the Intellectual Property Rights used by the Company violate or infringe
upon the rights of any other person or entity. To the knowledge of the Company,
all such Intellectual Property Rights are enforceable and there is no existing
infringement by another person or entity of any of the Intellectual Property
Rights. The Company has taken reasonable security measures to protect the
secrecy, confidentiality and value of all of its Intellectual Property
Rights.

     

    (m)   Offering.  Assuming
the accuracy of the representations and warranties of the Investors contained in
Section 3.2 of this Agreement, the offer, issue, and sale of the Securities
are exempt from the registration and prospectus delivery requirements of the
Securities Act and the registration or qualification requirements of all
applicable state securities laws.  Neither the Company nor any
authorized agent acting on its behalf will knowingly take any action hereafter
that would cause the loss of such exemptions.
 

    
      
         

      

      
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    (n)    Acknowledgment.  The
Company acknowledges and agrees that each Investor is acting solely in the
capacity of an arm’s length purchaser with respect to the Securities and the
transactions contemplated hereby and thereby and that no Investor is (i) an
officer or director of the Company, (ii) an Affiliate of the Company or
(iii) to the knowledge of the Company, a “beneficial owner” of more than
10% of the shares of Common Stock (as defined for purposes of Rule 13d-3 of the
Exchange Act).  The Company further acknowledges that no Investor is
acting as a financial advisor or fiduciary of the Company (or in any similar
capacity) with respect to this Agreement and the transactions contemplated
hereby, and any advice given by any Investor or any of its representatives or
agents in connection with this Agreement and the transactions contemplated
hereby is merely incidental to such Investor’s purchase of the
Securities.  The Company further represents to each Investor that the
Company’s decision to enter into the Transaction Documents and issue the
Securities has been based solely on the independent evaluation by the Company
and its representatives.

     

    (o)    No General Solicitation;
Placement Agent’s Fees.  Neither the Company, nor any of its
Affiliates, nor any person acting on its or their behalf, has engaged in any
form of general solicitation or general advertising (within the meaning of
Regulation D of the Securities Act) in connection with the offer or 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 Investor or its investment advisor) relating to
or arising out of the transactions contemplated hereby.

     

    (p)    No Integrated
Offering.  Neither the Company nor any person acting on its
behalf has, directly or indirectly, made any offers or sales of any security or
solicited any offers to buy any security, under circumstances that would require
registration of any of the Securities under the Securities Act or cause this
offering of the Securities to be integrated with prior offerings by the Company
for purposes of the Securities Act or any applicable shareholder approval
provisions, including, without limitation, under the rules and regulations of
the OTCBB or any other exchange or automated quotation system on which any of
the securities of the Company are listed or designated.

     

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

     

    (r)     Disclosure.  All
disclosure provided to the Investors with regard to the representations and
warranties contained in this Section 3.1 regarding the Company, its business and
the transactions contemplated hereby, furnished in writing by the Company is
true and correct in all material respects and does not contain any untrue
statement of a material fact or omit to state any material fact necessary in
order to make the statements made therein, in the light of the circumstances
under which they were made, together with the disclosure in the SEC Documents,
not misleading.

    

      
        
           

        

        
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    (s)    Investor
Reliance.  The Company expressly acknowledges and agrees that
the Investors are relying upon the Company’s representations contained in this
Agreement.

     

    3.2          Representations and
Warranties of the Investor.  Each Investor, severally and not
jointly, hereby represents and warrants to the Company as follows:

     

    (a)    Authorization;
Enforcement.  Such Investor represents and warrants that it is
an entity duly organized, validly existing and in good standing under the laws
of the jurisdiction of its organization with the requisite corporate or
partnership power and authority to enter into and to consummate the transactions
contemplated by the applicable this Agreement and otherwise to carry out its
obligations hereunder.  This Agreement has been duly executed by such
Investor, and when delivered by such Investor in accordance with terms hereof,
will constitute the valid and legally binding obligation of such Investor,
enforceable against it in accordance with its terms.

     

    (b)           Investment
Intent.  Such Investor is acquiring the Securities as principal
for its own account for investment purposes only and not with a view to or for
distributing or reselling such Securities or any part thereof, without
prejudice, however, to such Investor's right at all times to sell or otherwise
dispose of all or any part of such Securities in compliance with applicable
federal and state securities laws.  Such Investor is acquiring the
Securities hereunder in the ordinary course of its business. Such Investor does
not have any agreement or understanding, directly or indirectly, with any Person
to distribute any of the Securities.

     

    (c)           Investor
Status.  At the time such Investor was offered the Securities,
it was, and at the date hereof it is, and on each date on which it exercises the
Warrants it will be, an "accredited investor" as defined in Rule 501(a) under
the Securities Act.  Such Investor is not required to be registered as
a broker-dealer under Section 15 of the Securities Exchange Act of 1934, as
amended.

     

    (d)           General
Solicitation.  Such Investor is not purchasing the Securities
as a result of any advertisement, article, notice or other communication
regarding the Securities published in any newspaper, magazine or similar media
or broadcast over television or radio or presented at any seminar or any other
general solicitation or general advertisement.
 

    
      
         

      

      
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    (e)           Access to
Information.  Such Investor acknowledges that it has been
afforded (i) the opportunity to ask such questions as it has deemed necessary
of, and to receive answers from, representatives of the Company concerning the
terms and conditions of the offering of the Shares and the merits and risks of
investing in the Securities; (ii) access to information about the Company and
its financial condition, results of operations, business, properties, management
and prospects sufficient to enable it to evaluate its investment; and (iii) the
opportunity to obtain such additional information that the Company possesses or
can acquire without unreasonable effort or expense that is necessary to make an
informed investment decision with respect to the investment. Such Investor
understands that a purchase of the Securities is a speculative investment
involving a high degree of risk.  Such Investor is aware that there is
no guarantee that such Investor will realize any gain from this investment, and
that such Investor could lose the total amount of this investment. Such Investor
acknowledges that it has received no representations or warranties from the
Company or its employees or agents in making this investment decision other than
as set forth in this Agreement.

     

    (f)     Independent Investment
Decision.  Such Investor has independently evaluated the merits
of its decision to purchase Securities pursuant to this Agreement, such decision
has been independently made by such Investor and such Investor confirms that it
has only relied on the advice of its own business and/or legal counsel and not
on the advice of any other Investor’s business and/or legal counsel in making
such decision.

     

    (g)    Short
Sales.  Such Investor has not directly or indirectly, nor has
any Person acting on behalf of or pursuant to any understanding with such
Investor, executed any Short Sales in the securities of the Company since the
date that such Investor was first contacted regarding an investment in the
Company.

     

    (h)    Limitations on
Transfers.   Such Investor acknowledges that the
Securities must be held indefinitely unless subsequently registered under the
Securities Act or unless an exemption from such registration is
available.  Such Investor is aware of the provisions of Rule 144
promulgated under the Securities Act which permit limited resale of securities
purchased in a private placement subject to the satisfaction of certain
conditions, which may include, among other things, the existence of a public
market for the securities, the availability of certain current public
information about the Company, the resale occurring not less than six months
after a party has purchased and paid for the security to be sold, the sale being
effected through a “broker’s transaction” or in transactions directly with a
“market maker” and the number of securities being sold during any three month
period not exceeding specified limitations.

     

    (i)     Company
Reliance.  Such Investor expressly acknowledges and agrees that
the Company is relying upon such Investor’s representations contained in this
Agreement.
 

    
      
         

      

      
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    ARTICLE
IV.

    REGISTRATION
RIGHTS

     

    4.1          Registration
Statement.

     

    (a)    The
Company shall prepare and file with the SEC within seventy-five (75) calendar
days after the Closing Date (the “Filing Deadline”) a
registration statement (on Form S-1, or other appropriate registration statement
form) under the Securities Act (the “Registration Statement”), at
the sole expense of the Company (except as specifically provided in Section
‎4.2 of this
Agreement) so as to permit a public offering and resale of the Shares and the
Warrant Shares (the “Registrable Securities”) in
the United States under the Securities Act by the Investors as selling
stockholders. The Company shall use its reasonable best efforts to cause such
Registration Statement to become effective as soon as possible thereafter, and
within the earlier of: (i) one hundred twenty (120) calendar days after the
Closing Date (or one hundred and fifty (150) calendar days in the event the SEC
shall elect to review the Registration Statement), or (ii) five (5) calendar
days after the SEC clearance to request acceleration of effectiveness (the
“Effectiveness
Deadline”).  The Company will notify the Investors of the
effectiveness of the Registration Statement (the “Effective Date”) within three
(3) Trading Days.

     

    (b)    The
Company will maintain the Registration Statement filed under Section 4 of this
Agreement effective under the Securities Act until the earlier of the date (i)
all of the Registrable Securities have been sold pursuant to such Registration
Statement, (ii) the Investors receive an opinion of counsel to the Company,
which opinion and counsel shall be reasonably acceptable to the Investors, that
the Registrable Securities may be sold under the provisions of Rule 144 without
limitation as to volume, (iii) all Registrable Securities (or all Warrants, in
the case of Warrants not then exercised) have been otherwise transferred to
persons who may trade the Registrable Securities without restriction under the
Securities Act, and the Company has delivered a new certificate or other
evidence of ownership for such Registrable Securities not bearing a restrictive
legend, (iv) all Registrable Securities may be sold without any time, volume or
manner limitations pursuant to Rule 144 or any similar provision then in effect
under the Securities Act in the opinion of counsel to the Company, which counsel
shall be reasonably acceptable to the Investors, or (v) one (1) year from the
Effective Date.

     

    (c)    Prior
to the Effective Date, the rights to cause the Company to register Registrable
Securities granted to the Investors by the Company under Section 4 of this
Agreement may be assigned in full by an Investor in connection with a transfer
by such Investor of not less than 1,000,000 shares of Common Stock in a single
transaction to a single transferee purchasing as principal, provided, however,
that (i) such transfer is otherwise effected in accordance with applicable
securities laws; (ii) such Investor gives prior written notice to the Company;
and (iii) such transferee agrees to comply with the terms and provisions of this
Agreement in a form reasonably satisfactory to the Company, and such transfer is
otherwise in compliance with this Agreement.

     

    (d)    If
at any time or from time to time after the Effective Date, the Company notifies
the Investors in writing of the existence of a Potential Material Event (as
defined in Section 4(e) below), the Investors shall not offer or sell any
Registrable Securities or engage in any other transaction involving or relating
to Registrable Securities, from the time of the giving of notice with respect to
a Potential Material Event until the Investors receives written notice from the
Company that such Potential Material Event either has been disclosed to the
public or no longer constitutes a Potential Material Event.  If a
Potential Material Event shall occur prior to the Filing Deadline, then the
Company’s obligation to file such Registration Statement shall be delayed
without penalty for not more than thirty (30) calendar days.  The
Company must, if lawful and practicable, give the Investors notice in writing at
least two (2) Trading Days prior to the first day of the blackout
period.
 

    
      
         

      

      
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    (e)    “Potential Material Event”
means any of the following: (i) the possession by the Company of material
information not ripe for disclosure in a registration statement, as determined
in good faith by the Chief Executive Officer or the Board of Directors of the
Company that disclosure of such information in a Registration Statement would be
detrimental to the business and affairs of the Company; or (ii) any material
engagement or activity by the Company which would, in the good faith
determination of the Chief Executive Officer or the Board of Directors of the
Company, be adversely affected by disclosure in a registration statement at such
time, which determination shall be accompanied by a good faith determination by
the Chief Executive Officer or the Board of Directors of the Company that the
applicable Registration Statement would be materially misleading absent the
inclusion of such information; provided that, (i)
the Company shall not use such right with respect to the Registration Statement
for more than an aggregate of 90 days in any 12-month period; and (ii) the
number of days the Company is required to keep the Registration Statement
effective under Section 4(b)(v) above shall be extended by the number of days
for which the Company shall have used such right.

     

    (f)     The
Investors will cooperate with the Company in all respects in connection with
this Agreement, including timely supplying all information reasonably requested
by the Company (which shall include all information regarding the Investors and
proposed manner of sale of the Registrable Securities required to be disclosed
in any Registration Statement) and executing and returning all documents
reasonably requested in connection with the registration and sale of the
Registrable Securities and entering into and performing its obligations under
any underwriting agreement, if the offering is an underwritten offering, in
usual and customary form, with the managing underwriter or underwriters of such
underwritten offering.  Any delay or delays caused by the Investors,
or by any other purchaser of securities of the Company having registration
rights similar to those contained herein, by failure to cooperate as required
hereunder shall not constitute a breach or default of the Company under this
Agreement.
 

    
      
         

      

      
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    (g)    The
Company acknowledges that there is no adequate remedy at law for failure by it
to comply with the provisions of Section 4 of this Agreement and that such
failure would not be adequately compensable in damages.  Therefore,
the Company agrees that in the event that the Registration Statement to be filed
by the Company pursuant to paragraph 4(a) above (i) is not filed with the SEC on
or before the Filing Deadline, or (ii) such Registration Statement is not
declared effective by the SEC on or before the Effectiveness Deadline, then the
Company shall (x) for the period commencing on the seventy sixth (76th) day
after the Closing Date and on the 30th day thereafter until the date that the
Registration Statement is filed and (y) for the period commencing on the one
hundred twenty first (121st) day
after the Closing Date (or the one hundred fifty first (151st) day
after the Closing Date in the event the SEC shall elect to review the
Registration Statement) and on the 30th day thereafter until the date that the
Registration Statement is declared effective by the SEC, the Company will pay to
each Investor as liquidated damages and not as a penalty for such failure (the
“Liquidated Damages”)
either: (A) a cash payment equal to a certain percentage (the "Percentage") of such
Investor’s Investment Amount or (B) at the sole election of such Investor,
shares of Common Stock equal to the Percentage of the number of Shares purchased
by such Investor pursuant to this Agreement.  The Percentage shall
initially equal 0.5% and, after the first three payments of the Liquidated
Damages, to the extent that the Liquidated Damages are still required to be
paid, the Percentage shall increase to 1.0%.  In no event shall the
Liquidated Damages exceed, in the aggregate, 10% of such Investor’s Investment
Amount.  On either the Filing Deadline, if the Registration Statement
has not be filed, or the Effectiveness Deadline, if the Registration Statement
has not be declared effective, the Company will provide written notice of
failure to the Investor and promptly pay the Investor the Liquidated Damages
..  The Company and the Investors agree that the agreements contained
in Section 4 of this Agreement may be specifically enforced, and the Liquidated
Damages are in addition to any other rights or remedies the Investors may have
at law or in equity.  In addition, the Company shall also reimburse
the Investors for any and all reasonable legal fees and expenses incurred by it
in enforcing their rights pursuant to Section 4 of this Agreement, regardless of
whether any litigation was commenced.  Notwithstanding anything in
this Agreement to the contrary, (i) if the SEC limits the number of Registrable
Securities that may be included in the Registration Statement due to limitations
on the use of Rule 415 of the Securities Act, then the Company shall so advise
all the Investors holding Registrable Securities which were proposed to be
registered in such Registration Statement, and the number of shares of Common
Stock that may be included in the Registration Statement shall be allocated to
the holders of such Registrable Securities so requesting to be registered on a
pro rata basis, based on the number of Registrable Securities then held by all
such Investors and no Liquidated Damages shall be paid in respect of the
Registrable Securities excluded from the Registration Statement pursuant
thereto, (ii) no Investor shall be entitled to receive any Liquidated Damages
with respect to any period during which such Investor is permitted to sell all
its Registrable Securities without any time, volume or manner limitations
pursuant to Rule 144 or any similar provision then in effect under the
Securities Act in the opinion of counsel to the Company, which counsel shall be
reasonably acceptable to the Investors and (iii) no Liquidated Damages shall be
payable in respect of any delay in the effectiveness of the Registration
Statement caused by the existence of anti-dilution adjustment provisions in the
Warrants.

     

    4.2           Registration
Expenses.  All fees, disbursements and out-of-pocket expenses
and costs incurred by the Company in connection with the preparation and filing
of the Registration Statement and in complying with applicable securities and
“blue sky” laws (including, without limitation, all attorneys' fees of the
Company, registration, qualification, notification and filing fees, printing
expenses, escrow fees, blue sky fees and expenses and the expense of any special
audits incident to or required by any such registration) shall be borne by the
Company.  The Investors shall bear the cost of underwriting and/or
brokerage discounts, fees and commissions, if any, applicable to the Registrable
Securities being registered and the fees and expenses of its
counsel.  The Investors and its counsel shall have a reasonable
period, not to exceed five (5) Trading Days, to review the proposed Registration
Statement or any amendment thereto, prior to filing with the SEC.  The
Company shall qualify any of the Registrable Securities for sale in such states
as an Investor reasonably designates.  However, the Company shall not
be required to qualify in any state which will require an escrow or other
restriction relating to the Company and/or the sellers, or which will require
the Company to qualify to do business in such state or require the Company to
file therein any general consent to service of process.  The Company
at its expense will supply each Investor with copies of the applicable
Registration Statement and the prospectus included therein and other related
documents in such quantities as may be reasonably requested by such
Investor.
 

    
      
         

      

      
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    4.3          Registration
Procedures. Whenever the Company is required by any of the provisions of
this Agreement to effect the registration of any of the Registrable Securities
under the Securities Act, the Company shall (except as otherwise provided in
this Agreement), as expeditiously as possible, subject to the assistance and
cooperation as reasonably required of the Investors with respect to each
Registration Statement:

     

    (a)    (A)  prior
to the filing with the SEC of any Registration Statement (including any
amendments thereto) and the distribution or delivery of any prospectus
(including any supplements thereto), provide draft copies thereof to the
Investor and reflect in such documents all such comments as the Investor (and
its counsel), reasonably may propose respecting the Selling Shareholders and
Plan of Distribution sections (or equivalents) and (B) furnish to the Investor
such numbers of copies of a prospectus including a preliminary prospectus or any
amendment or supplement to any prospectus, as applicable, in conformity with the
requirements of the Securities Act, and such other documents, as the Investor
may reasonably request in order to facilitate the public sale or other
disposition of the Registrable Securities owned by the Investor;

     

    (b)    register
and qualify the Registrable Securities covered by the Registration Statement
under such other securities or blue sky laws of such jurisdictions as the
Investor shall reasonably request (subject to the limitations set forth in
Section 4.2 above), and do any and all other acts and things which may be
necessary or advisable to enable the Investor to consummate the public sale or
other disposition in such jurisdiction of the securities owned by the
Investor;

     

    (c)    cause
the Registrable Securities to be quoted or listed on each service on which the
Common Stock of the Company is then quoted or listed;

     

    (d)    notify
the Investor, at any time when a prospectus relating thereto covered by the
Registration Statement is required to be delivered under the Securities Act, of
the happening of any event of which it has knowledge as a result of which the
prospectus included in the Registration Statement, as then in effect, includes
an untrue statement of a material fact or omits to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading in the light of  the circumstances then existing, and the
Company shall prepare and file a curative amendment as promptly as commercially
reasonable;

    
      
         

      

      
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    (e)    as
promptly as practicable after becoming aware of such event, notify the Investor
(or, in the event of an underwritten offering, the managing underwriters) of the
issuance by the SEC of any stop order or other suspension of the effectiveness
of the Registration Statement at the earliest possible time and take all lawful
action to effect the withdrawal, recession or removal of such stop order or
other suspension; and

     

    (f)     provide
a transfer agent and registrar for all securities registered pursuant to the
Registration Statement and a CUSIP number for all such securities.

     

    4.4          Piggyback Registration
Rights. In addition to the registration rights set forth in Section 4.1
of this Agreement, if the Registration Statement to be filed pursuant to Section
4.1 is not filed by the Filing Deadline, or otherwise declared effective by the
SEC, then the Investors shall also have certain “piggy-back” registration rights
as follows:

     

    (a)    If
at any time after the issuance of the Registrable Securities, the Company shall
file with the SEC a registration statement under the Securities Act registering
any shares of equity securities (but other than registration relating solely to
employee benefit plans on Form S-8 or similar forms that may be promulgated in
the future, or a registration relating solely to a SEC Rule 145 transaction on
Form S-4 or similar forms that may be promulgated in the future), the Company
shall give written notice to the Investors prior to such filing.

     

    (b)    Within
twenty (20) calendar days after such notice from the Company, each Investor
shall give written notice to the Company whether or not it desires to have all
of its Registrable Securities included in the registration
statement.  If an Investor fails to give such notice within such
period, such Investor shall not have further rights hereunder to have its
Registrable Securities registered pursuant to such registration
statement.  If an Investor gives such notice, then the Company shall
include such Investor’s Registrable Securities in the registration statement, at
Company’s sole cost and expense, subject to the remaining terms of this Section
4.4.

     

    (c)    If
the registration statement relates to an underwritten offering, and the
underwriter shall determine in writing that the total number of shares of equity
securities to be included in the offering, including the Registrable Securities,
shall exceed the amount which the underwriter deems to be appropriate for the
offering, the number of shares of the Registrable Securities shall be reduced in
the same proportion as the remainder of the shares in the offering and the
Investor’s Registrable Securities included in such registration statement will
be reduced proportionately, provided, however, that securities being offered by
the Company or by a shareholder pursuant to demand registration rights shall be
entitled to priority over the Registrable Securities.  Any Registrable
Securities excluded or withdrawn from such underwriting shall be excluded and
withdrawn from the registration. For this purpose, if other securities in the
registration statement are derivative securities, their underlying shares shall
be included in the computation.  The Investor shall enter into such
agreements as may be reasonably required by the underwriters and the Investor
shall pay the underwriters commissions relating to the sale of their respective
Registrable Securities.
 

    
      
         

      

      
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    (d)    The
Investors shall have an unlimited number of opportunities to have the
Registrable Securities registered under this Section 4.4, provided that the
Company shall not be required to register any Registrable Security or keep any
Registration Statement effective beyond such period required under Section
4.1(b) of this Agreement.

     

    (e)    The
Investors shall furnish in writing to the Company such information as the
Company shall reasonably require in connection with a registration
statement.

     

    (f)     The
Company shall have the right to terminate or withdraw any registration initiated
by it under this Section ‎4.4 prior to the
effectiveness of such registration, whether or not any Investor has elected to
include securities in such registration.

     

    4.5          Indemnity and
Contribution.

     

    (a)    The
Company agrees to indemnify and hold harmless each Investor, its officers,
directors, employees, partners, legal counsel and accountants, and each person
controlling such Investor within the meaning of Section 15 of the Securities
Act, from and against any direct losses, claims, damages, expenses or
liabilities (or actions or proceedings in respect thereof) to which such
Investor or such other indemnified persons may become
subject  (including in settlement of litigation, whether commenced or
threatened) insofar as such losses, claims, damages, expenses or liabilities (or
actions or proceedings in respect thereof) arise out of, or are based upon, any
untrue statement or alleged untrue statement of a material fact or omission or
alleged omission to state a material fact in the Registration Statement,
including all documents filed as a part thereof and information deemed to be a
part thereof, on the effective date thereof, or any amendment or supplements
thereto, and the Company will, as incurred, reimburse such Investor, each of its
officers, directors, employees, partners, legal counsel and accountants, and
each person controlling such Investor, for any legal or other expenses
reasonably incurred in investigating, defending or preparing to defend or
settling such action, proceeding or claim; provided, however,
that the Company shall not be liable in any such case to the extent that such
loss, claim, damage, expense or liability (or action or proceeding in respect
thereof) arises out of, or is based upon, (i) the failure of such Investor, or
any of its agents, affiliates or persons acting on its behalf, to comply with
such Inevestor's covenants and agreements contained in this Agreement with
respect to the sale of Registrable Securities, (ii) an untrue statement or
omission in such Registration Statement in reliance upon and in conformity with
written information furnished to the Company by an instrument duly executed by
or on behalf of such Investor, or any of its agents, affiliates or persons
acting on its behalf, and stated to be specifically for use in preparation of
the Registration Statement and not corrected in a timely manner by such Investor
in writing or (iii) an untrue statement or omission in any prospectus that is
corrected in any subsequent prospectus, or supplement or amendment thereto, that
was delivered to such Investor prior to the pertinent sale or sales by such
Investor and not delivered by such Investor to the individual or entity to which
it made such sale(s) prior to such sale(s).
 

    
      
         

      

      
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    (b)    Each
Investor, severally and not jointly, agrees to indemnify and hold harmless the
Company, its officers, directors, employees, partners, legal counsel and
accountants, and each person controlling the Company within the meaning of
Section 15 of the Securities Act, from and against any direct losses, claims,
damages, expenses or liabilities (or actions or proceedings in respect thereof)
to which the Company or such other indemnified persons may become subject (under
the Securities Act or otherwise) insofar as such losses, claims, damages,
expenses or liabilities (or actions or proceedings in respect thereof) arise out
of, or are based upon (i) the failure of such Investor or any of its agents,
affiliates or persons acting on its behalf, to comply with the covenants and
agreements contained in this Agreement with respect to the sale of Registrable
Securities; or (ii) an untrue statement or alleged untrue statement of a
material fact or omission to state a material fact in the Registration Statement
in reliance upon and in conformity with written information furnished to the
Company by an instrument duly executed by or on behalf of such Investor and
stated to be specifically for use in preparation of the Registration Statement;
provided,
however, that such Investor shall not be liable in any such case for (i)
any untrue statement or alleged untrue statement or omission in any prospectus
or Registration Statement which statement has been corrected, in writing, by
such Investor and delivered to the Company before the sale from which such loss
occurred; or (ii) an untrue statement or omission in any prospectus that is
corrected in any subsequent prospectus, or supplement or amendment thereto, that
was delivered to such Investor prior to the pertinent sale or sales by such
Investor and delivered by such Investor to the individual or entity to which it
made such sale(s) prior to such sale(s), and such Investor will, as incurred,
reimburse the Company for any legal or other expenses reasonably incurred in
investigating, defending or preparing to defend any such action, proceeding or
claim.  Notwithstanding the foregoing, such Investor shall not be
liable or required to indemnify the Company or such other indemnified persons in
the aggregate for any amount in excess of the net amount received by such
Investor from the sale of the Registrable Securities, to which such loss, claim,
damage, expense or liability (or action proceeding in respect thereof)
relates.
 

    
      
         

      

      
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    (c)    Promptly
after receipt by any indemnified person of a notice of a claim or the beginning
of any action in respect of which indemnity is to be sought against an
indemnifying person pursuant to this Section 4.5, such indemnified person shall
notify the indemnifying person in writing of such claim or of the commencement
of such action and, subject to the provisions hereinafter stated, in case any
such action shall be brought against an indemnified person, the indemnifying
person shall be entitled to participate therein, and, to the extent that it
shall wish, to assume the defense thereof.  After notice from the
indemnifying person to such indemnified person of the indemnifying person’s
election to assume the defense thereof, the indemnifying person shall not be
liable to such indemnified person for any legal expenses subsequently incurred
by such indemnified person in connection with the defense thereof; provided, however,
that if there exists or shall exist a conflict of interest that would, in the
opinion of counsel to the indemnified party, make it inappropriate under
applicable laws or codes of professional responsibility for the same counsel to
represent both the indemnified person and such indemnifying person or any
affiliate or associate thereof, the indemnified person shall be entitled to
retain its own counsel at the expense of such indemnifying person; provided, further,
that the indemnifying person shall not be obligated to assume the expenses of
more than one counsel to represent all indemnified persons.  In the
event of such separate counsel, such counsel shall agree to reasonably
cooperate. Notwithstanding anything to the contrary herein, no indemnifying
person shall be required to pay any amounts of indemnification or contribution
with respect to a settlement of any Proceeding or losses, claims, damages,
expenses or liabilities if such settlement is effected without the consent of
the indemnifying person.

     

    (d)    If
the indemnification provided for in this Section 4.5 is unavailable or
insufficient to hold harmless an indemnified party under subsection (a) or (b)
above in respect of any direct losses, claims, damages, expenses or liabilities
(or actions or proceedings in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages, expenses or
liabilities (or actions or proceedings in respect thereof) in such proportion as
is appropriate to reflect the relative fault of the Company on the one hand and
the Investors, or its respective agents, affiliates or persons acting on its
behalf, on the other in connection with the statements or omissions which
resulted in such losses, claims, damages, expenses or liabilities (or actions or
proceedings in respect thereof), as well as any other relevant equitable
considerations.  The relative fault shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company on the one hand or an Investor,
or its agents, affiliates or persons acting on its behalf, on the other and the
parties’ relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission.  The Company and such
Investor agree that it would not be just and equitable if contribution pursuant
to this subsection (d) were determined by any other method of allocation which
does not take into account the equitable considerations referred to above in
this subsection (d).  The amount paid or payable by an indemnified
party as a result of the losses, claims, damages, expenses or liabilities (or
actions or proceedings in respect thereof) referred to above in this subsection
(d) shall be deemed to include any legal or other expenses reasonably incurred
by such indemnified party in connection with investigating or defending any such
action or claim.  No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.  In any event, such Investor shall not be liable or
required to contribute to the Company in the aggregate for any amount in excess
of the net amount received by such Investor from the sale of its Registrable
Securities.
 

    
      
         

      

      
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    4.6 
  Market
Standoff.     Each Investor hereby agrees that,
if so requested by the representative of the lead or managing underwriters (the
“Managing Underwriter”),
such Investor shall not, without the prior consent of the Managing Underwriter
(i) lend, offer, pledge, sell, contract to sell, sell any option or contract to
purchase, purchase any option or contract to sell, grant any option, right or
warrant to purchase, or otherwise transfer or dispose of, directly or
indirectly, any Registrable Securities or any other securities of the Company or
(ii) enter into any swap or other arrangement that transfers to another, in
whole or in part, any of the economic consequences of ownership of the
Registrable Securities, whether any such transaction described in clause (i) or
(ii) above is to be settled by delivery of Registrable Securities or such other
securities, in cash or otherwise, during the period specified by the Managing
Underwriter (the “Market
Standoff Period”), with such period not to exceed 10 days prior to the
anticipated effective date of such registration statement and 90 days following
the effective date of such registration statement. Each Investor further agrees
to execute such agreements as may be reasonably requested by the underwriters in
the Company’s offering on the same terms of this Section 4.6.

     

    ARTICLE
V.

    TERMINATION

     

    5.1           Termination.  If
the conditions to the Investors’ obligations at Closing have not been satisfied
or waived on before January 31, 2011, then this Agreement may be terminated at
any time thereafter upon written notice to the Company by Investors representing
at least a majority in interest of the Shares to be purchased
hereunder.  The provisions of Sections 6.2 and 6.5 to 6.17 shall
survive the termination of this Agreement.

     

    ARTICLE
VI.

    MISCELLANEOUS

     

    6.1           Certificates;
Resales.

     

    (a)           The
Securities may only be disposed of in compliance with state and federal
securities laws.  In connection with any transfer of the Securities
other than pursuant to an effective registration statement or Rule 144(b)(1), to
the Company or to an Affiliate of an Investor, the Company may require the
transferor thereof to provide to the Company an opinion of counsel selected by
the transferor, reasonably acceptable to the Company, the form and substance of
which opinion shall be reasonably satisfactory to the Company, to the effect
that such transfer does not require registration of such transferred Securities
under the Securities Act.

     

    (b)           Certificates
evidencing the Securities will contain the following legend, until such time as
they are not required:
 

    
      
         

      

      
        21

        
          

        

      

      
         

      

    

     

    [NEITHER
THESE SECURITIES NOR THE SECURITIES ISSUABLE UPON EXERCISE OF THESE SECURITIES
HAVE BEEN REGISTERED] [THESE SECURITIES HAVE NOT BEEN REGISTERED] WITH THE
SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN
RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD
EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT
OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO,
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH
APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO
THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY
ACCEPTABLE TO THE COMPANY.  [THESE SECURITIES AND THE SECURITIES
ISSUABLE UPON EXERCISE OF THESE SECURITIES] [THESE SECURITIES] MAY BE PLEDGED IN
CONNECTION WITH A BONA FIDE MARGIN ACCOUNT SECURED BY SUCH
SECURITIES.

     

    (c)           Certificates
evidencing the Shares and Warrant Shares shall not contain any legend (including
the legend set forth in Section 5.1(b) of this Agreement), (i) following a sale
of such securities pursuant to an effective registration statement, or (ii)
following any sale of such Shares or Warrant Shares pursuant to Rule 144
(assuming the transferor was not an Affiliate of the Company), or (iii) if such
Shares or Warrant Shares are eligible for sale under Rule 144(b)(1), or (iv) if
such legend is not required under applicable requirements of the Securities Act
(including judicial interpretations and pronouncements issued by the staff of
the SEC).  The Company shall cause its counsel to issue a legal
opinion to the Company’s transfer agent promptly after the Effective Date if
required by the Company’s transfer agent to effect the removal of the legend
hereunder in contemplation of a sale of Registrable Securities pursuant to the
Registration Statement.  If all or any portion of a Warrant is
exercised at a time when there is an effective registration statement to cover
the issuance of the Warrant Shares, such Warrant Shares shall be issued free of
all legends.  The Company agrees that at such time as such legend is
no longer required under this Section 5.1(c), it will, no later than three
Trading Days following the delivery by an Investor to the Company or the
Company’s transfer agent of a certificate representing Warrant Shares issued
with a restrictive legend accompanied by a customary representation letter ,
deliver or cause to be delivered to such Investor a certificate representing
such shares that is free from all restrictive and other legends.  The
Company may not make any notation on its records or give instructions to any
transfer agent of the Company that enlarge the restrictions on transfer set
forth in this Section 5.1(c) except in the case of an Investor or its permitted
transferee becoming an Affiliate.  Certificates for Securities subject
to legend removal hereunder shall be transmitted by the transfer agent of the
Company to the Investors by crediting the account of the Investor’s prime broker
with the Depository Trust Company System.
 

    
      
         

      

      
        22

        
          

        

      

      
         

      

    

     

    6.2           Indemnification.

     

    (a)    Each
Investor acknowledges that he, she or it understands the meaning and legal
consequences of the representations and warranties that are contained herein and
hereby agrees, severally and not jointly, to indemnify, save and hold harmless
the Company and its directors, officers, employees and counsel, from and against
any and all claims or actions arising out of a breach of any representation,
warranty or acknowledgment of such Investor contained in this
Agreement.  Such indemnification shall be deemed to include not only
the specific liabilities or obligations with respect to which such indemnity is
provided, but also all reasonable costs, expenses, counsel fees and expenses of
settlement relating thereto, whether or not any such liability or obligation
shall have been reduced to judgment.  In addition, each Investor’s
representations, warranties and indemnification contained herein shall survive
such Investor’s purchase of the Securities hereunder for a period of one year
following the date hereof.

     

    (b)    The
Company acknowledges it understands the meaning and legal consequences of the
representations and warranties that are contained herein and hereby agrees to
indemnify, save and hold harmless each Investor and its directors, officers,
employees and counsel, from and against any and all claims or actions arising
out of a breach of any representation, warranty or acknowledgment of the Company
contained in this Agreement.  Such indemnification shall be deemed to
include not only the specific liabilities or obligations with respect to which
such indemnity is provided, but also all reasonable costs, expenses, counsel
fees and expenses of settlement relating thereto, whether or not any such
liability or obligation shall have been reduced to judgment.  In
addition, the Company’s representations, warranties and indemnification
contained herein shall survive the purchase of the Securities hereunder for a
period of one year following the date hereof.

     

    6.3           Preemptive
Right.

     

    (a)   
Following the Closing Date, for so long as any Investor holds shares of Common
Stock constituting 5% or more of the outstanding shares of Common Stock, if the
Company proposes to issue Additional Securities (other than upon the exercise or
conversion of options, warrants or other rights to purchase Common Stock), it
shall give such Investor a written notice thereof of its intention to do so (the
“Rights Notice”),
describing the Additional Securities, the price and the general terms upon which
the Company proposes to issue them. Each Investor shall have fourteen (14)
calendar days from delivery of the Rights Notice to agree to purchase all or any
part of its pro-rata portion of such Additional Securities, which pro-rata
portion is equal to the ratio of (i) the number of outstanding shares of Common
Stock which such Investor holds immediately prior to the issuance of such
Additional Securities to (ii) the total number of outstanding shares of Common
Stock prior to issuance of the Additional Securities, for the price and upon the
general terms specified in the Rights Notice, by giving written notice to the
Company setting forth the quantity of Additional Securities which such Investor
wishes to purchase.
 

    
      
         

      

      
        23

        
          

        

      

      
         

      

    

     

    (b)  If
the Investors fail to exercise in full their preemptive right within the period
specified in Section 5.3(a), then the Company shall have sixty (60) Days after
delivery of the Rights Notice to sell the unsold Additional Securities at a
price and upon general terms no more favorable to the purchasers thereof than
specified in the Rights Notice. If the Company has not sold the Additional
Securities within said sixty (60) Day period, the Company shall not thereafter
issue or sell any Additional Securities without first offering such securities
to the Investors in the manner provided above.

     

    (c)  The
preemptive right granted to the Investors hereunder is personal and is not
transferable to any other Person.

     

    (d)  "Additional Securities" means
any shares of Common Stock or options, warrants or other rights to purchase
shares of Common Stock, other than (i) securities issued in any investment round
raising less than $500,000 at the closing thereof, (ii) securities issued to
directors, officers or employees of the Company or a wholly owned subsidiary
thereof in their capacity as such in the ordinary course pursuant to an
incentive plan approved by the Board of Directors of the Company and (iii)
securities having a market value of up to $1,000,000 in the aggregate issued in
bona fide, arm's-length transactions to service providers of the Company or a
wholly owned subsidiary thereof in consideration for services
provided.

     

    6.4           Abstention from
Trading. From the date hereof until the Closing Date, (i) the Investors
will not engage in any financial market transactions (whether long, short or
other hedging transactions) with respect to the Company’s Common Stock and (ii)
the Company will not, and the Company shall cause its directors and officers and
each of its and their respective Affiliates to not, engage in any financial
market transactions (whether long, short or other hedging transactions) with
respect to the Company’s Common Stock.

     

    6.5           Entire Agreement;
Amendment.  The parties have not made any representations or
warranties with respect to the subject matter hereof not set forth
herein.  This Agreement, together with the Warrants and any other
instruments executed simultaneously herewith, constitute the entire agreement
between the parties with respect to the subject matter hereof.  All
understandings and agreements heretofore between the parties with respect to the
subject matter hereof are merged in this Agreement and any such instruments,
which alone fully and completely expresses their agreement.  This
Agreement may not be changed, modified, extended, terminated or discharged
orally, but only by an agreement in writing, which is signed by all of the
parties to this Agreement.
 

    
      
         

      

      
        24

        
          

        

      

      
         

      

    

     

    6.6           Notices.  Any
notice required or permitted to be given to a party pursuant to the provisions
of this Agreement will be in writing and will be effective on (i) the date of
transmission, if such notice or communication is delivered via facsimile at the
facsimile number set forth in this Agreement prior to 5:30 p.m. (in the time
zone of the recipient of such notice) on a Trading Day, (ii) the next Trading
Day after the date of transmission, if such notice or communication is delivered
via facsimile at the facsimile number set forth in this Agreement on a day that
is not a Trading Day or later than 5:30 p.m. (in the time zone of the recipient
of such notice) on any Trading Day, (iii) the 2nd Trading
Day following the date of mailing, if sent by U.S. nationally recognized
overnight courier service, including Express Mail, for United States deliveries
or (iii) five (5) Trading Days after deposit in the United States mail by
registered or certified mail for United States deliveries.  All
notices not delivered personally or by facsimile will be sent with postage and
other charges prepaid and properly addressed to the party to be notified at the
address set forth below such party’s signature of this Agreement or at such
other address as such party may designate by ten (10) days advance written
notice to the other parties hereto. The address for such notices and
communications shall be as follows:

     

    
      	
              If
      to the Company:

            	 
      	
              Oramed
      Pharmaceuticals Inc.

            
	 
      	 
      	 
      
	 
      	 
      	
              Hi-Tech
      Park 2/5

            
	 
      	 
      	
              Givat-Ram

            
	 
      	 
      	
              PO
      Box 39098

            
	 
      	 
      	
              Jerusalem
      91390 Israel

            
	 
      	 
      	
              Attn:
      Nadav Kidron

            
	 
      	 
      	
              Facsimile:  +972-2-566-0004

            
	 
      	 
      	 
      
	
              With
      a copy to:

            	 
      	 
      
	 
      	 
      	
              Goldfarb,
      Levy, Eran, Meiri, Tzafrir & Co.

            
	 
      	 
      	
              2
      Weitzman Street

            
	 
      	 
      	
              Tel
      Aviv 64239, Israel

            
	 
      	 
      	
              Attn:  Adam
      M. Klein, Adv.

            
	 
      	 
      	
              Facsimile:  +972-3-608-9855

            
	 
      	 
      	 
      
	
              If
      to an Investor:

            	 
      	
              To
      the address set forth under such Investor's name

            
	 
      	
                

            	
              on
      the signature pages hereof.

            

    

     

    6.7           Delays or
Omissions.  Except as otherwise specifically provided for
hereunder, no party shall be deemed to have waived any of his or her or its
rights hereunder or under any other agreement, instrument or document signed by
any of them with respect to the subject matter hereof unless such waiver is in
writing and signed by the party waiving said right.  Except as
otherwise specifically provided for hereunder, no delay or omission by any party
in exercising any right with respect to the subject matter hereof shall operate
as a waiver of such right or of any such other right.  A waiver on any
one occasion with respect to the subject matter hereof shall not be construed as
a bar to, or waiver of, any right or remedy on any future
occasion.  All rights and remedies with respect to the subject matter
hereof, whether evidenced hereby or by any other agreement, instrument or
document, will be cumulative, and may be exercised separately or
concurrently.
 

    
      
         

      

      
        25

        
          

        

      

      
         

      

    

     

    6.8           Severability.  If
any provision of this Agreement is held to be unenforceable under applicable
law, then such provision shall be excluded from this Agreement, and the balance
of this Agreement shall be interpreted as if such provision was so excluded and
shall be enforceable in accordance with its terms.

     

    6.9           Successors and
Assigns.  Except as otherwise expressly provided herein, the
provisions hereof shall inure to the benefit of, and be binding upon, the
successors, assigns, heirs, executors and administrators of the parties
hereto.

     

    6.10         Counterparts;
Signatures.  This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, and all of which
together shall constitute one instrument.  Signatures transmitted by
facsimile or scanned and transmitted by electronic mail shall be considered
valid and binding signatures.

     

    6.11         Survival of
Warranties.  The representations, warranties, covenants and
agreements of the Company and the Investors contained in or made pursuant to
this Agreement shall survive the execution and delivery of this Agreement and
shall in no way be affected by any investigation made by an Investor or the
Company.

     

    6.12         Further
Action.  The parties agree to execute any and all such other
and further instruments and documents, and to take any and all such further
actions reasonably required to effectuate this Agreement and the intent and
purposes hereof.

     

    6.13         Construction.  The
headings herein are for convenience only, do not constitute a part of this
Agreement and shall not be deemed to limit or affect any of the provisions
hereof.  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.  This Agreement
shall be construed as if drafted jointly by the parties, and no presumption or
burden of proof shall arise favoring or disfavoring any party by virtue of the
authorship of any provisions of this Agreement.

     

    6.14         No Third-Party
Beneficiaries.  This Agreement is intended for the benefit of
the parties hereto and their respective successors and permitted assigns and is
not for the benefit of, nor may any provision hereof be enforced by, any other
Person.

     

    6.15         Governing Law; Venue and
Waiver of Jury
Trial.  This Agreement is to be construed in accordance with
and  governed  by the  internal  laws of
the State of New York without giving effect to any choice of law rule that would
cause the application of the laws of any jurisdiction to the rights and duties
of the  parties.  The Company and the Investors agree that
any suit, action, or proceeding arising out of or relating to this Agreement
shall be brought in the United States District Court for the Southern District
of New York (or should such court lack jurisdiction to hear such action, suit or
proceeding, in a New York state court in the County of New York) and that the
parties  shall submit to the jurisdiction of such court. The parties
irrevocably waive, to the fullest extent permitted by law, any objection the
party may have to the laying of venue for any such suit, action or proceeding
brought in such court.  THE PARTIES ALSO EXPRESSLY WAIVE ANY RIGHT
THEY HAVE OR MAY HAVE TO A JURY TRIAL OF ANY SUCH SUIT, ACTION OR
PROCEEDING.  If any one or more provisions  of this Section
5.14 shall for any  reason be held  invalid or
unenforceable, it is the specific  intent of the parties that such
provisions shall be modified to the minimum extent necessary to make it or its
application valid and enforceable.
 

    
      
         

      

      
        26

        
          

        

      

      
         

      

    

     

    6.16         Replacement of
Securities.  If any certificate or instrument evidencing any
Securities is mutilated, lost, stolen or destroyed, the Company shall issue or
cause to be issued in exchange and substitution for and upon cancellation
thereof, or in lieu of and substitution therefor, a new certificate or
instrument, but only upon receipt of evidence reasonably satisfactory to the
Company of such loss, theft or destruction and customary and reasonable
indemnity, if requested.  The applicants for a new certificate or
instrument under such circumstances shall also pay any reasonable third-party
costs associated with the issuance of such replacement Securities.  If
a replacement certificate or instrument evidencing any Securities is requested
due to a mutilation thereof, the Company may require delivery of such mutilated
certificate or instrument as a condition precedent to any issuance of a
replacement.

     

    6.17         Independent Nature of
Investors’ Obligations and Rights.  The obligations of each
Investor under any Transaction Document are several and not joint with the
obligations of any other Investor, and no Investor shall be responsible in any
way for the performance or non-performance of the obligations of any other
Investor under any Transaction Document.  Nothing contained herein or
in any other Transaction Document, and no action taken by any Investor pursuant
thereto, shall be deemed to constitute the Investors as a partnership, an
association, a joint venture or any other kind of entity, or create a
presumption that the Investors are in any way acting in concert or as a group
with respect to such obligations or the transactions contemplated by the
Transaction Documents.  Each Investor shall be entitled to
independently protect and enforce its rights, including without limitation, the
rights arising out of this Agreement or out of the other Transaction Documents,
and it shall not be necessary for any other Investor to be joined as an
additional party in any proceeding for such purpose.

     

     [REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK

    SIGNATURE
PAGES FOLLOW]
 

    
      
         

      

      
        27

        
          

        

      

      
         

      

    

     

    IN
WITNESS WHEREOF, the parties hereto have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

     

    
      
        	 
      	
                ORAMED
      PHARMACEUTICALS INC.

              
	 
      	 
      	 
      
	 
      	
                By:

              	
                /s/ Nadav Kidron

              
	 
      	
                Name: 

              	
                Nadav
      Kidron

              
	
                 

              	
                Title:

              	Chief
      Executive Officer

      

    

     

    [REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK

    SIGNATURE
PAGES FOR INVESTORS FOLLOW]
 

    
      
         

      

      
        28

        
          

        

      

      
         

      

    

    IN
WITNESS WHEREOF, the parties have executed this Securities Purchase Agreement as
of the date first written above.

     

    Investment
Amount:

     

         6,250,000
Units x $0.32 per Unit = $2,000,000

     

    (Each
Unit consists of one Share and a Warrant convertible into 0.35
Shares)

    

    Name of
Investor: _Attara
Fund, Ltd._________________________________________

    

    Signature
of Authorized Signatory of Investor:_/s/ Alexandra
Toohey______________________

    

    Name of
Authorized Signatory: __ Alexandra Toohey
__________________________________

    

    Title of
Authorized Signatory:___Director____________________________________________

    

    Email
Address of Investor:_ ___________________________

    

    Social
Security or Taxpayer Identification  Number
_______________________________

    

    Address
for Notice of Investor:

    

    c/o
Attara Capital LP

    767
Fifth Ave. 

    12th
floor

    New
York, New York 10153

    Facsimile:  1-212-256-8401

    

    Address
for Delivery of Securities for Investor (if not same as above):

    

    ____________________________________________

    ____________________________________________

    ____________________________________________

    ____________________________________________

     

    
      
         

      

      
        29

        
          

        

      

      
         

      

    

    SCHEDULE
1

     

    
      
        
          
            	
                    Investor

                  	 	
                    Number of Shares

                  	 	 	
                    Number of Warrants

                    (35% of the Number

                    of Shares)

                  	 	 	
                    Investment

                    Amount

                  	 
	
                    Attara
      Fund, Ltd.

                  	 	 	6,250,000	 	 	 	2,187,500	 	 	$	2,000,000	 

          

        

      

    

     

    
      
         

      

      
        30NEITHER
THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS EXERCISABLE HAVE
BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES
COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY,
MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM,
OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS
EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE
SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY. THIS SECURITY
AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS SECURITY MAY BE PLEDGED IN
CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH
SECURITIES.

     

    COMMON
STOCK PURCHASE WARRANT

     

    To
Purchase 2,187,500 Shares of Common Stock of

     

    ORAMED
PHARMACEUTICALS INC.

     

    THIS
COMMON STOCK PURCHASE WARRANT (the “Warrant”) certifies that, for value
received, Attara Fund, Ltd.
(the “Holder”), is entitled, upon the terms and subject to the
limitations on exercise and the conditions hereinafter set forth, at any time on
or after the date hereof (the “Initial Exercise Date”) and on or prior to the
close of business on the fifth anniversary of the Initial Exercise Date (the
“Termination Date”) but not thereafter, to subscribe for and purchase from
Oramed Pharmaceuticals Inc. a Nevada corporation (the “Company”), up to
2,187,500 shares (the “Warrant Shares”) of Common Stock, par value $0.001 per
share, of the Company (the “Common Stock”).  The purchase price of one
share of Common Stock under this Warrant shall be equal to the Exercise Price,
as defined in Section 2(b).

    

    Section
1.       Definitions.  Capitalized
terms used and not otherwise defined herein shall have the meanings set forth in
that certain Securities Purchase Agreement (the “Purchase Agreement”), dated
December 21, 2010, among the Company and the purchasers signatory
thereto.

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

     

    Section
2.        Exercise

     

    (a)           Exercise of
Warrant.  Exercise of the purchase rights represented by this
Warrant may be made, in whole or in part, at any time or times on or after the
Initial Exercise Date and on or before the Termination Date by delivery to the
Company of a duly executed facsimile copy of the Notice of Exercise Form annexed
hereto at the headquarters of the Company (or such other office or agency of the
Company as it may designate by notice in writing to the registered Holder at the
address of such Holder appearing on the books of the Company); and within 5
Trading Days of the date said Notice of Exercise is delivered to the Company,
the Company shall have received payment of the aggregate Exercise Price of the
shares thereby purchased by wire transfer or cashier’s check drawn on a United
States bank. Notwithstanding anything herein to the contrary, the Holder shall
not be required to physically surrender this Warrant to the Company until the
Holder has purchased all of the Warrant Shares available hereunder and the
Warrant has been exercised in full, in which case the Holder shall surrender
this Warrant to the Company for cancellation within 5 Trading Days of the date
the final Notice of Exercise is delivered to the Company.  Partial
exercises of this Warrant resulting in purchases of a portion of the total
number of Warrant Shares available hereunder shall have the effect of lowering
the outstanding number of Warrant Shares purchasable hereunder in an amount
equal to the applicable number of Warrant Shares purchased.  The
Holder and the Company shall maintain records showing the number of Warrant
Shares purchased hereunder and the date of such purchases.  The
Company shall deliver any objection to any Notice of Exercise Form within three
Business Days of receipt of such notice.  The Holder and any assignee,
by acceptance of this Warrant, acknowledge and agree that, by reason of the
provisions of this paragraph, following the purchase of a portion of the Warrant
Shares hereunder, the number of Warrant Shares available for purchase hereunder
at any given time may be less than the amount stated on the face
hereof.

     

    (b)           Exercise
Price.  The exercise price per share of the Common Stock under
this Warrant shall be $0.50, subject to adjustment hereunder (the “Exercise
Price”).

     

    (c)           Cashless
Exercise.  If, after the Effectiveness Deadline, at the time of
exercise hereof there is no effective registration statement registering all of
the Warrant Shares for
resale by the Holder into the market from time to time, then, at the election of the Holder,
this Warrant may also be exercised by means of a “cashless exercise” by
which the Holder authorizes the Company to withhold from issuance a number of
shares of Common Stock issuable upon such exercise of this Warrant which, when
multiplied by the Fair Market Value of the Common Stock, is equal to the
aggregate Exercise Price (and such withheld shares shall no longer be issuable
under this Warrant).  For purposes hereof, “Fair Market Value”
means:

     

    (i) if
the Common Stock is then listed or quoted on a securities exchange (the “Trading
Market”), the volume weighted average price of the Common Stock for the five
trading days immediately prior to
(but not including) the date of delivery of the Exercise Notice Form on
the Trading Market on which the Common Stock is then listed or quoted for
trading as reported by Bloomberg Financial L.P. (based on a trading day on the
Trading Market from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City
time); (ii) if the Common Stock is not then listed or quoted for trading on
the Trading Market but is quoted for trading on the OTC Bulletin Board, the
volume weighted average price of the Common Stock for such period on the OTC
Bulletin Board; (iii) if the Common Stock is not then quoted for trading on the
OTC Bulletin Board and if prices for the Common Stock are then reported in the
“Pink Sheets” published by Pink Sheets, LLC (or a similar organization or agency
succeeding to its functions of reporting prices), the average of the last sale
price over the five trading day period immediately prior to (but not including) the
date of delivery of the Exercise Notice Form; or (iv) in all other cases,
the fair market value of a share of Common Stock as determined by an independent
appraiser selected in good faith by the Board of Directors of the Company and
reasonably acceptable to the Holder. If the Holder shall elect to effect a
cashless exercise and clause (i) or (ii) above shall be applicable, then the
Exercise Notice Form shall be accompanied by a copy of a print-out of the
Bloomberg screen showing the Fair Market Value of the Common Stock, certified as
true and correct by the Holder.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (d)          Mechanics of
Exercise.

     

    (i)           Authorization of Warrant
Shares.  The Company covenants that all Warrant Shares which
may be issued upon the exercise of the purchase rights represented by this
Warrant will, upon exercise of the purchase rights represented by this Warrant,
be duly authorized, validly issued, fully paid and nonassessable and free from
all taxes, liens and charges created by the Company in respect of the issue
thereof (other than taxes in respect of any transfer occurring contemporaneously
with such issue).

     

    (ii)          Delivery of Certificates
Upon Exercise.  Certificates for shares purchased hereunder
shall be transmitted by the transfer agent of the Company to the Holder by
crediting the account of the Holder’s prime broker with the Depository Trust
Company through its Deposit Withdrawal Agent Commission (“DWAC”) system if the
Company is a participant in such system, so long as the certificates therefor
are not required to bear a legend regarding restriction on
transferability, and otherwise by physical
delivery to the address specified by the Holder in the Notice of Exercise within
three (3) Trading Days from the delivery to the Company of the Notice of
Exercise Form, surrender of this Warrant (if required) and payment of the
aggregate Exercise Price as set forth above (“Warrant Share Delivery
Date”).  This Warrant shall be deemed to have been exercised on the
date the Exercise Price is received by the Company. The Warrant Shares shall be
deemed to have been issued, and Holder or any other person so designated to be
named therein shall be deemed to have become a holder of record of such shares
for all purposes, as of the date the Warrant has been exercised by payment to
the Company of the Exercise Price (or cashless exercise, if permitted) and all
taxes required to be paid by the Holder, if any, pursuant to Section 2(d)(v)
prior to the issuance of such shares, have been paid.

     

    (iii)         Delivery of New Warrants
Upon Exercise.  If this Warrant shall have been exercised in
part, the Company shall, at the request of a Holder and upon surrender of this
Warrant certificate, at the time of delivery of the certificate or certificates
representing Warrant Shares, deliver to Holder a new Warrant evidencing the
rights of Holder to purchase the unpurchased Warrant Shares called for by this
Warrant, which new Warrant shall in all other respects be identical with this
Warrant.

     

    (iv)        Rescission Rights. If
the Company fails to deliver to the Holder a certificate or certificates
representing the Warrant Shares by the close of business on the third Trading
Day after the Warrant Share Delivery Date, then the Holder will have the right
to rescind such exercise by providing written notice that is received by the
Company prior to the issuance of the Warrant Shares.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (v)         Compensation for Buy-In on
Failure to Timely Deliver Certificates Upon Exercise. In addition to any
other rights available to the Holder, if the Company fails to deliver to the
Holder a certificate representing the Warrant Shares pursuant to an exercise by
the close of business on the third Trading Day after the Warrant Share Delivery
Date, and if after such date the Holder is required to purchase (in an open
market transaction or otherwise) shares of Common Stock to deliver in
satisfaction of a prior sale by the Holder of the Warrant Shares which the
Holder anticipated receiving upon such exercise (a “Buy-In”), then the Company
shall within three Trading Days after the Holder’s request and in the Holder’s
discretion, either (1) pay cash to the Holder in an amount equal to the Holder’s
total purchase price (including brokerage commissions, if any) for the shares of
Common Stock less the aggregate Exercise Price (the “Buy-In Price”), at which
point the Company’s obligation to deliver such certificate (and to issue such
Common Stock), solely with respect to such exercise, shall terminate or (2)
promptly honor its obligation to deliver to the Holder a certificate
representing such Common Stock and pay cash to the Holder in an amount equal to
the excess (if any) of the Buy-In-Price over the product of (A) such number of
shares of Common Stock, times (B) the closing price on the date of the event
giving rise to the Company’s obligation to deliver such certificates. Nothing
herein shall limit a Holder’s right to pursue any other remedies available to it
hereunder, at law or in equity including, without limitation, a decree of
specific performance and/or injunctive relief with respect to the Company’s
failure to timely deliver certificates representing Warrant Shares upon exercise
of the Warrant as required pursuant to the terms hereof.

     

    (vi)        No Fractional Shares or
Scrip.  No fractional shares or scrip representing fractional
shares shall be issued upon the exercise of this Warrant. As to any fraction of
a share which Holder would otherwise be entitled to purchase upon such exercise,
the Company shall at its election, either pay a cash adjustment in respect of
such final fraction in an amount equal to such fraction multiplied by the
Exercise Price or round up to the next whole share.

     

    (vii)       Charges, Taxes and
Expenses.  Issuance and delivery of certificates for Warrant
Shares shall be made without charge to the Holder for any issue or transfer tax,
withholding tax, transfer agent fee or other incidental tax or expense in
respect of the issuance of such certificate, all of which taxes and expenses
shall be paid by the Company, and such certificates shall be issued in the name
of the Holder or in such name or names as may be directed by the Holder;
provided, however, that in the event certificates for Warrant Shares are to be
issued in a name other than the name of the Holder, this Warrant when
surrendered for exercise shall be accompanied by the Assignment Form attached
hereto duly executed by the Holder; and the Company may require, as a condition
thereto, the payment of a sum sufficient to reimburse it for any transfer tax
incidental thereto.

     

    (e)           Closing of
Books.  The Company will not close its stockholder books or
records in any manner which prevents the timely exercise of this Warrant,
pursuant to the terms hereof.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (f)           Limitations on
Exercise. Notwithstanding anything to the contrary herein, the Company
shall not effect the exercise of this Warrant, and the Holder shall not have the
right to exercise this Warrant, to the extent that after giving effect to such
exercise, such Person (together with such Person’s Affiliates) would
beneficially own in excess of 9.9% (the “Maximum Percentage”) of the shares of
Common Stock outstanding immediately after giving effect to such
exercise.  For purposes of the foregoing sentence, the aggregate
number of shares of Common Stock beneficially owned by such Person and its
Affiliates shall include the number of shares of Common Stock issuable upon
exercise of this Warrant with respect to which the determination of such
sentence is being made, but shall exclude shares of Common Stock which would be
issuable upon (i) exercise of the remaining, unexercised portion of this Warrant
beneficially owned by such Person and its Affiliates and (ii) exercise or
conversion of the unexercised or unconverted portion of any other securities of
the Company beneficially owned by such Person and its Affiliates (including,
without limitation, any convertible notes or convertible shares, options or
warrants) that is subject to a limitation on conversion or exercise analogous to
the limitation contained herein. Except as set forth in the preceding sentence,
for purposes of this paragraph, beneficial ownership shall be calculated in
accordance with Section 13(d) of the Securities Exchange Act of 1934, as
amended. For purposes of this Warrant, in determining the number of outstanding
shares of Common Stock, the Holder may rely on the number of outstanding shares
of Common Stock as reflected in the most recent of (1) the Company’s most recent
Form 10-Q,  Form 10-K or other public filing with the Securities and
Exchange Commission, as the case may be, (2) a more recent public announcement
by the Company or (3) any other notice by the Company or its transfer agent
setting forth the number of shares of Common Stock outstanding. For any reason
at any time, upon the written or oral request of the Holder, the Company shall
within two (2) Trading Days confirm to the Holder the number of shares of Common
Stock then outstanding. In any case, the number of outstanding shares of Common
Stock shall be determined after giving effect to the conversion or exercise of
securities of the Company, including this Warrant, by the Holder and its
Affiliates since the date as of which such number of outstanding shares of
Common Stock was reported. By written notice to the Company, the Holder may from
time to time increase or decrease the Maximum Percentage to any other percentage
specified in such notice; provided that (i) any such increase will not be
effective until the sixty-first (61st) day after such notice is delivered to the
Company, and (ii) any such increase or decrease will apply only to the Holder.
The provisions of this paragraph shall be construed, corrected and implemented
in a manner so as to effectuate the intended beneficial ownership limitation
herein contained. The limitations contained in this paragraph shall apply to any
successor Holder of this Warrant.

     

    Section
3.   Certain
Adjustments.

     

    (a)           Stock Dividends and
Splits.  If the Company, at any time while this Warrant is
outstanding: (A) pays a stock dividend or otherwise make a distribution or
distributions on shares of its Common Stock or any other equity or equity
equivalent securities payable in shares of Common Stock (which, for avoidance of
doubt, shall not include any shares of Common Stock issued by the Company upon
exercise of Warrant), (B) subdivides outstanding shares of Common Stock into a
larger number of shares, or (C) combines (including by way of reverse stock
split) outstanding shares of Common Stock into a smaller number of shares, then
in each case the Exercise Price shall be multiplied by a fraction of which the
numerator shall be the number of shares of Common Stock (excluding treasury
shares, if any) 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 this Section 3(a)
shall become effective immediately after the record date for the determination
of stockholders entitled to receive such dividend or distribution and shall
become effective immediately after the effective date in the case of a
subdivision or combination.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (b)           Reclassification
Transaction.  In the event of a reclassification or
reorganization of the outstanding shares of the Common Stock of the Company at
any time while this Warrant is outstanding, including, without limitation, as a
result of a merger or consolidation, the Company shall thereafter deliver at the
time of purchase of Warrant Shares under this Warrant and in lieu of the number
of Warrant Shares in respect of which the right to purchase is then being
exercised, the number of shares of the Company of the appropriate class or
classes resulting from said reclassification or reclassifications as the Holder
would have been entitled to receive in respect of the number of Warrant Shares
in respect of which the right of purchase hereunder is then being exercised had
the right of purchase been exercised before such reclassification or
reorganization.

     

    (c)           Adjustments for Other
Dividends and Distributions.  In the event the Company, at any
time or from time to time while this Warrant is outstanding, shall make or
issue, or fix a record date for the determination of holders of Common Stock
entitled to receive a dividend or other distribution payable in securities of
the Company (other than shares of Common Stock) or in cash or other property
(other than cash out of earnings or earned surplus, determined in accordance
with generally accepted accounting principles), then and in each such event
provision shall be made so that the Holder shall receive upon exercise hereof,
in addition to the number of shares of Common Stock issuable hereunder, the kind
and amount of securities of the Company and/or cash and other property to which
the Holder would have been entitled to receive had this Warrant been exercised
into Common Stock on the date of such event and had the Holder thereafter,
during the period from the date of such event to and including the Exercise
Date, retained any such securities receivable, giving application to all
adjustments called for during such period under this Section 3 with respect to
the rights of the Holder, provided, however, (x) in the event that the holders
of Common Stock have received options, warrants or rights that have expired
prior to the date of exercise of this Warrant, the Holder shall not be entitled
to receive such options, warrants or rights and (y) in the event of a
distribution consisting of cash as referred to above, the Exercise Price in
effect immediately prior to such distribution will be proportionately reduced by
the amount of the distribution per share of Common Stock such Holder would have
been entitled to receive had such Holder been the holder of record of such
Common Stock as of the date on which holders of Common Stock received or became
entitled to receive such cash distribution.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (d)           Fundamental
Transaction. If, at any time while this Warrant is outstanding, (A) the
Company effects any merger or consolidation of the Company with or into another
Person, (B) the Company effects any sale of all or substantially all of its
assets in one or a series of related transactions, (C) any tender offer or
exchange offer is accepted by the holders of more than the 50% of the
outstanding shares of Common Stock (not including any Common Stock held by the
Person or Persons making or party to, or associated or affiliated with the
Persons making or party to, such tender or exchange offer), or (D) the Company
effects any reclassification of the Warrant Shares or any compulsory share
exchange (other than a share split or reverse share split) pursuant to which the
Warrant Shares are effectively converted into or exchanged for other securities,
cash or property (in any such case, a “Fundamental Transaction”), then, upon any
subsequent exercise of this Warrant, the Holder shall have the right to receive,
for each Warrant Share that would have been issuable upon such exercise
immediately prior to the occurrence of such Fundamental Transaction, at the
option of the Holder, (a) upon exercise of this Warrant, the number of shares of
stock, or other securities or property of the successor or acquiring corporation
or of the Company, if it is the surviving corporation, and any additional
consideration (the “Alternate Consideration”) receivable upon or as a result of
such reorganization, reclassification, merger, consolidation or disposition of
assets by a Holder to which the Holder would have been entitled if the Holder
had exercised its rights pursuant to the Warrant immediately prior thereto or
(b) if the Company is acquired in an all cash transaction in which the per share
consideration payable to the holders of Common Stock is less than the Exercise
Price, cash equal to the value of this Warrant as determined in accordance with
the Black-Scholes option pricing formula.  For purposes of any such
exercise, the determination of the Exercise Price shall be appropriately
adjusted to apply to such Alternate Consideration based on the amount of
Alternate Consideration issuable in respect of one Warrant Share in such
Fundamental Transaction, and the Company shall apportion the Exercise Price
among the Alternate Consideration in a reasonable manner reflecting the relative
value of any different components of the Alternate Consideration.  If
holders of Warrant Shares are given any choice as to the securities, cash or
property to be received in a Fundamental Transaction, then the Holder shall be
given the same choice as to the Alternate Consideration it receives upon any
exercise of this Warrant following such Fundamental Transaction.  To
the extent necessary to effectuate the foregoing provisions, any successor to
the Company or surviving entity in such Fundamental Transaction shall issue to
the Holder a new warrant consistent with the foregoing provisions and evidencing
the Holder’s right to exercise such warrant into Alternate Consideration. The
terms of any agreement pursuant to which a Fundamental Transaction is effected
shall include terms requiring any such successor or surviving entity to comply
with the provisions of this Section 3(d) and insuring that this Warrant (or any
such replacement security) will be similarly adjusted upon any subsequent
transaction analogous to a Fundamental Transaction.

     

    (e)           Anti-dilution
Adjustments. If, at any time while this Warrant is outstanding, the
Company shall issue or sell any Common Stock for a consideration per share less
than the Exercise Price then in effect, or shall issue or sell any options,
warrants or other rights (including, without limitation, securities convertible
into or exercisable for Common Stock) for the purchase or acquisition of such
shares at a consideration per share of less than the Exercise Price then in
effect, the Exercise Price shall be reduced to an amount equal to the per share
consideration payable to the Company in such sale or issuance.  The
consideration per share payable to the Company in a sale or issuance of options,
warrants or other rights for the purchase or acquisition of shares of Common
Stock shall be determined by dividing:  (A) the total amount, if any,
received or receivable by the Company as consideration for the sale or issue of
such options, warrants or other rights, plus the minimum aggregate amount of
additional consideration (as set forth in the instruments relating thereto,
without regard to any provision contained therein for a subsequent adjustment of
such consideration) payable to the Company upon the exercise of such options,
warrants or other rights or conversion or exercise of such other rights, by (B)
the maximum number of shares of Common Stock (as set forth in the instruments
relating thereto, without regard to any provision contained therein for a
subsequent adjustment of such number) issuable upon the exercise of such
options, warrants or other rights or conversion or exercise of such other
rights.  In case any portion of the consideration to be received by
the Company shall be in a form other than cash, the fair market value of such
non-cash consideration, as determined in good faith by the Board of Directors of
the Company, shall be utilized to determine the consideration per share. The
foregoing adjustment shall not apply in any of the following scenarios: (i) any
issuances of securities to directors, officers or employees of the Company or a
wholly owned subsidiary thereof in their capacity as such in the ordinary course
pursuant to an incentive plan approved by the Board of Directors of the Company;
(ii) any issuances of securities having a Fair Market Value of up to $1,000,000
in the aggregate to service providers of the Company or a wholly owned
subsidiary thereof in bona fide, arm's length transactions in consideration for
services provided; (iii) any issuances of securities having a Fair Market Value
of up to $6,000,000 in the aggregate to investors during the one-year period
commencing on the date hereof; and (iv) any issuances of Common Stock pursuant
to options or warrants to purchase Common Stock that are outstanding prior to
the date hereof. 

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (f)           Voluntary Adjustment By
Company.  The Company may at any time during the term of this
Warrant reduce the then current Exercise Price to any amount and for any period
of time deemed appropriate by the Board of Directors of the Company.

     

    (g)          Number of Warrant
Shares. Simultaneously with any adjustment to the Exercise Price pursuant
to of this Section 3, the number of shares issuable upon exercise of this
Warrant shall be proportionately adjusted so that after such adjustment the
aggregate Exercise Price payable hereunder for the increased or decreased number
of Warrant Shares shall be the same as the aggregate Exercise Price in effect
immediately prior to such adjustment.

     

    (h)          Calculations. All
calculations under this Section 3 shall be made to the nearest cent or the
nearest 1/100th of a share, as the case may be. For purposes of this Section 3,
the number of shares of Common Stock deemed to be issued and outstanding as of a
given date shall be the sum of the number of shares of Common Stock (excluding
treasury shares, if any) issued and outstanding.

     

    (i)           Notice to
Holders.

     

    (i)           Adjustment to Exercise
Price.  Whenever the Exercise Price is adjusted pursuant to any
provision of this Section 3, the Company shall promptly mail to each Holder a
notice setting forth the Exercise Price after such adjustment and setting forth
a brief statement of the facts requiring such adjustment.

     

    (ii)          Notice to Allow Exercise by
Holder. If (A) the Company shall declare a dividend (or any other
distribution in whatever form) on the Common Stock; (B) the Company shall
declare a special nonrecurring cash dividend on or a redemption of the Common
Stock; (C) the Company shall authorize the granting to all holders of the Common
Stock rights or warrants to subscribe for or purchase any shares of capital
stock of any class or of any rights; (D) the approval of any stockholders of the
Company shall be required in connection with any reclassification of the Common
Stock, any consolidation or merger to which the Company is a party, any sale or
transfer of all or substantially all of the assets of the Company, of any
compulsory share exchange whereby the Common Stock is converted into other
securities, cash or property; (E) the Company shall authorize the voluntary or
involuntary dissolution, liquidation or winding up of the affairs of the
Company; then, in each case, the Company shall notify the Holder at least 10
calendar days prior to the applicable record or effective date hereinafter
specified, a notice stating (x) the date on which a record is to be taken for
the purpose of such dividend, distribution, redemption, rights or warrants, or
if a record is not to be taken, the date as of which the holders of the Common
Stock of record to be entitled to such dividend, distributions, redemption,
rights or warrants are to be determined or (y) the date on which such
reclassification, consolidation, merger, sale, transfer or share exchange is
expected to become effective or close, and the date as of which it is expected
that holders of the Common Stock of record shall be entitled to exchange their
shares of the Common Stock for securities, cash or other property deliverable
upon such reclassification, consolidation, merger, sale, transfer or share
exchange; provided that the failure to mail such notice or any defect therein or
in the mailing thereof shall not affect the validity of the corporate action
required to be specified in such notice.  Any such notice or
information published via international wire or furnished to or filed with the
U.S. Securities and Exchange Commission shall satisfy this notice
requirement.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    Section
4.            Transfer of
Warrant.

     

    (a)          Transferability.  Subject
to compliance with any applicable securities laws and the conditions set forth
in Section 4(d) hereof and to the provisions of Section 5.7 of the Purchase
Agreement, this Warrant and all rights hereunder (including, without limitation,
any registration rights) are transferable, in whole or in part, upon surrender
of this Warrant at the principal office of the Company or its designated agent,
together with a written assignment of this Warrant substantially in the form
attached hereto duly executed by the Holder or its agent or attorney and funds
sufficient to pay any transfer taxes payable upon the making of such transfer.
Upon such surrender and, if required, such payment, the Company shall execute
and deliver a new Warrant or Warrants in the name of the assignee or assignees
and in the denomination or denominations specified in such instrument of
assignment, and shall issue to the assignor a new Warrant evidencing the portion
of this Warrant not so assigned, and this Warrant shall promptly be cancelled. A
Warrant, if properly assigned, may be exercised by a new holder for the purchase
of Warrant Shares without having a new Warrant issued.

     

    (b)          New
Warrants.  This Warrant may be divided or combined with other
Warrants upon presentation hereof at the aforesaid office of the Company,
together with a written notice specifying the names and denominations in which
new Warrants are to be issued, signed by the Holder or its agent or attorney.
Subject to compliance with Section 4(a), as to any transfer which may be
involved in such division or combination, the Company shall execute and deliver
a new Warrant or Warrants in exchange for the Warrant or Warrants to be divided
or combined in accordance with such notice.

     

    (c)          Warrant
Register.  The Company shall register this Warrant, upon
records to be maintained by the Company for that purpose (the “Warrant
Register”), in the name of the record Holder hereof from time to time. The
Company may deem and treat the registered Holder of this Warrant as the absolute
owner hereof for the purpose of any exercise hereof or any distribution to the
Holder, and for all other purposes, absent actual notice to the
contrary.

     

    (d)          Transfer
Restrictions.  If, at the time of the surrender of this Warrant
in connection with any transfer of this Warrant, the transfer of this Warrant
shall not be registered pursuant to an effective registration statement under
the Securities Act and under applicable state securities or blue sky laws, the
Company may require, as a condition of allowing such transfer (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 shall be in form, substance and
scope customary for opinions of counsel in comparable transactions) to the
effect that such transfer may be made without registration under the Securities
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 Regulation D under the Securities Act or a
qualified institutional buyer as defined in Rule 144A under the Securities
Act.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    Section
5.            Miscellaneous.

     

    (a)          No Rights as Shareholder
Until Exercise.  This Warrant does not entitle the Holder to
any voting rights or other rights as a shareholder of the Company prior to the
exercise hereof. Upon the surrender of this Warrant and the payment of the
aggregate Exercise Price, the Warrant Shares so purchased shall be and be deemed
to be issued to such Holder as the record owner of such shares as of the close
of business on the later of the date of such surrender or payment.

     

    (b)          Loss, Theft, Destruction or
Mutilation of Warrant. The Company covenants that upon receipt by the
Company of evidence reasonably satisfactory to it of the loss, theft,
destruction or mutilation of this Warrant or any stock certificate relating to
the Warrant Shares, and in case of loss, theft or destruction, of indemnity or
security reasonably satisfactory to it (which, in the case of the Warrant, shall
not include the posting of any bond), and upon surrender and cancellation of
such Warrant or stock certificate, if mutilated, the Company will make and
deliver a new Warrant or stock certificate of like tenor and dated as of such
cancellation, in lieu of such Warrant or stock certificate.

     

    (c)          Saturdays, Sundays,
Holidays, etc.  If the last or appointed day for the taking of
any action or the expiration of any right required or granted herein shall not
be a Business Day, then such action may be taken or such right may be exercised
on the next succeeding Business Day.

     

    (d)          Authorized
Shares.

     

    The
Company covenants that during the period the Warrant is outstanding, it will
reserve from its authorized and unissued Common Stock a sufficient number of
shares to provide for the issuance of the Warrant Shares upon the exercise of
any purchase rights under this Warrant. The Company further covenants that its
issuance of this Warrant shall constitute full authority to its officers who are
charged with the duty of executing stock certificates to execute and issue the
necessary certificates for the Warrant Shares upon the exercise of the purchase
rights under this Warrant. The Company will take all such reasonable action as
may be necessary to assure that such Warrant Shares may be issued as provided
herein without violation of any applicable law or regulation, or of any
requirements of the Trading Market upon which the Common Stock may be
listed.

     

    Except
and to the extent waived or consented to by the Holder, the Company shall not by
any action, including, without limitation, amending its certificate of
incorporation or through any reorganization, transfer of assets, consolidation,
merger, dissolution, issue or sale of securities or any other voluntary action,
avoid or seek to avoid the observance or performance of any of the terms of this
Warrant, but will at all times in good faith assist in the carrying out of all
such terms and in the taking of all such actions as may be necessary or
appropriate to protect the rights of Holder as set forth in this Warrant against
impairment.  Without limiting the generality of the foregoing, the
Company will (a) not increase the par value of any Warrant Shares above the
amount payable therefor upon such exercise immediately prior to such increase in
par value, (b) take all such action as may be necessary or appropriate in order
that the Company may validly and legally issue fully paid and nonassessable
Warrant Shares upon the exercise of this Warrant, and (c) use commercially
reasonable efforts to obtain all such authorizations, exemptions or consents
from any public regulatory body having jurisdiction thereof as may be necessary
to enable the Company to perform its obligations under this
Warrant.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (e)          Jurisdiction.  All
questions concerning the construction, validity, enforcement and interpretation
of this Warrant shall be determined in accordance with the provisions of the
Purchase Agreement.

     

    (f)           Restrictions.  The
Holder acknowledges that the Warrant Shares acquired upon the exercise of this
Warrant, if not registered, will have restrictions upon resale imposed by state
and federal securities laws.

     

    (g)          Nonwaiver and
Expenses. No course of dealing or any delay or failure to exercise any
right hereunder on the part of Holder shall operate as a waiver of such right or
otherwise prejudice Holder’s rights, powers or remedies, notwithstanding the
fact that all rights hereunder terminate on the Termination Date. If the Company
willfully and knowingly fails to comply with any provision of this Warrant,
which results in any damages to the Holder, and if the Holder shall prevail
against the Company in a final non-appealable court judgment, the Company shall
pay to Holder such amounts as shall be sufficient to cover any costs and
expenses including, but not limited to, reasonable attorneys’ fees, including
those of appellate proceedings, incurred by Holder in collecting any amounts due
pursuant hereto or in otherwise enforcing any of its rights, powers or remedies
hereunder.

     

    (h)          Notices.  Any
notice, request or other document required or permitted to be given or delivered
to the Holder by the Company shall be delivered in accordance with the notice
provisions of the Purchase Agreement.

     

    (i)           Limitation of
Liability.  No provision hereof, in the absence of any
affirmative action by Holder to exercise this Warrant to purchase Warrant
Shares, and no enumeration herein of the rights or privileges of Holder, shall
give rise to any liability of Holder for the purchase price of any Common Stock
or as a stockholder of the Company, whether such liability is asserted by the
Company or by creditors of the Company.

     

    (j)           Remedies. Holder, in
addition to being entitled to exercise all rights granted by law, including
recovery of damages, will be entitled to specific performance of its rights
under this Warrant, without duplication. The Company agrees that monetary
damages would not be adequate compensation for any loss incurred by reason of a
breach by it of the provisions of this Warrant and hereby agrees to waive and
not to assert the defense in any action for specific performance that a remedy
at law would be adequate.

     

    (k)          Successors and
Assigns.  Subject to applicable securities laws, this Warrant
and the rights and obligations evidenced hereby shall inure to the benefit of
and be binding upon the successors of the Company and the successors and
permitted assigns of Holder. The provisions of this Warrant are intended to be
for the benefit of all Holders from time to time of this Warrant and shall be
enforceable by any such Holder or holder of Warrant Shares.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (l)           Amendment.  This
Warrant may be modified or amended or the provisions hereof waived with the
written consent of the Company and the Holder.

     

    (m)         Severability.  Wherever
possible, each provision of this Warrant shall be interpreted in such manner as
to be effective and valid under applicable law,  but if any provision
of this Warrant shall be prohibited by or invalid under applicable law, such
provision shall be ineffective to the extent of such prohibition or invalidity,
without invalidating the remainder of such provisions or the remaining
provisions of this Warrant.

     

    (n)          Headings.  The
headings used in this Warrant are for the convenience of reference only and
shall not, for any purpose, be deemed a part of this Warrant.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

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

     

    
      
        	 
      	
                ORAMED
      PHARMACEUTICALS INC.

              
	 
      	 
      	 
      
	 
      	
                By:

              	
                /s/ Nadav Kidron

              
	 
      	
                Name:  Nadav
      Kidron

              
	 
      	
                Title:   Chief
      Executive Officer

              
	
                Dated:
      January 10, 2011

              	 
      	 
      

      

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    NOTICE OF
EXERCISE

    

    
      	
              TO: 

            	
              Oramed
      Pharmaceuticals Inc.

            

    

    
      	
               
      

            	
              Hi-Tech
      Park 2/5

            

    

    
      	
               
      

            	
              Givat-Ram

            

    

    
      	
               
      

            	
              PO
      Box 39098

            

    

    Jerusalem
91390 Israel

    Attn:
Nadav Kidron

    

    (1)          The
undersigned hereby elects to purchase __________ Warrant Shares of the Company
pursuant to the terms of the attached Warrant (only if exercised in full), and
tenders herewith payment of the exercise price in full, together with all
applicable transfer taxes, if any.

     

    (2)          Payment
shall take the form of (check applicable box):

     

    [  ]
in lawful money of the United States; or

     

    [ ] the
cancellation of such number of Warrant Shares as is necessary, in accordance
with the formula set forth in Section 2(c), to exercise this Warrant with
respect to the maximum number of Warrant Shares purchasable pursuant to the
cashless exercise procedure set forth in Section 2(c). [Attached hereto is a
true and correct copy of a print-out of the Bloomberg screen showing the Fair
Market Value of the Common Stock, as defined therein.]

     

    (3)          Please
issue a certificate or certificates representing said Warrant Shares in the name
of the undersigned or in such other name as is specified below:

     

    _________________________________________

     

    The
Warrant Shares shall be delivered to the following:

     

    __________________________________________

    __________________________________________

    __________________________________________

     

    (4)          Accredited
Investor.  The undersigned is an “accredited investor” as
defined in Regulation D promulgated under the Securities Act of 1933, as
amended.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    [SIGNATURE
OF HOLDER]

    

    Name of
Investing Entity: __________________________________________

    Signature
of Authorized Signatory of Investing Entity:
_______________________________

    Name of
Authorized Signatory: __________________________________________

    Title of
Authorized Signatory: ___________________________________________

    Date:
_______________________

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    ASSIGNMENT
FORM

     

    (To
assign the foregoing warrant, execute

    this form
and supply required information.

    Do not
use this form to exercise the warrant.)

     

    FOR VALUE
RECEIVED, the foregoing Warrant and all rights evidenced thereby are hereby
assigned to whose address is
__________________________________________________________________________________________
__________________________________

     

    Dated:
_____________________

     

    Holder’s
Signature: __________________________

    

    Holder’s
Address: _________________________

     _________________________

     _________________________

    

    Signature
Guaranteed: _____________________________

    

    NOTE: The
signature to this Assignment Form must correspond with the name as it appears on
the face of the Warrant, without alteration or enlargement or any change
whatsoever, and must be guaranteed by a bank or trust
company.  Officers of corporations and those acting in a fiduciary or
other representative capacity should file proper evidence of authority to assign
the foregoing Warrant.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00183-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00183-of-00352.parquet"}]]