Document:

[FORM
OF CONVERTIBLE NOTE]

     

    NEITHER
THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE
SECURITIES INTO WHICH THESE SECURITIES ARE CONVERTIBLE HAVE BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES
LAWS.  THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED
OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR
THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION
OF COUNSEL, IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED
UNDER SAID ACT, OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID
ACT.  NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN
CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING
ARRANGEMENT SECURED BY THE SECURITIES.  ANY TRANSFEREE OF THIS NOTE
SHOULD CAREFULLY REVIEW THE TERMS OF THIS NOTE, INCLUDING SECTIONS 3(c)(ii) AND
15(a) HEREOF.  THE PRINCIPAL AMOUNT REPRESENTED BY THIS NOTE AND,
ACCORDINGLY, THE SECURITIES ISSUABLE UPON CONVERSION HEREOF MAY BE LESS THAN THE
AMOUNTS SET FORTH ON THE FACE HEREOF PURSUANT TO SECTION 3(c)(iii) OF THIS
NOTE.

     

    Radient
Pharmaceuticals Corporation

     

    CONVERTIBLE
NOTE

     

    
      	
              Issuance
      Date:  January [___], 2011

            	
              Original
      Principal Amount: U.S.
      $[            ]

            

    

    

    FOR VALUE RECEIVED, Radient
Pharmaceuticals Corporation, a Delaware corporation (the "Company"), hereby promises to
pay to [BUYER] or registered assigns (the "Holder") the amount set out
above as the Original Principal Amount (as reduced pursuant to the terms hereof
pursuant to redemption, conversion, amortization or otherwise, the "Principal") in cash and/or in
shares of Common Stock (as defined below) and when due, whether upon the
Maturity Date (as defined below), each Installment Date (as defined below),
acceleration, redemption or otherwise (in each case in accordance with the terms
hereof).  This Convertible Note (including all Convertible Notes
issued in exchange, transfer or replacement hereof, this "Note") is one of an issue of
Convertible Notes issued pursuant to the Securities Purchase Agreement on the
Closing Date (collectively, the "Notes" and such other
Convertible Notes, the "Other Notes").  Certain
capitalized terms used herein are defined in Section 28.
  

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    (1)           PAYMENTS OF
PRINCIPAL.  On the Maturity Date, the Company shall pay to the
Holder an amount in cash representing all outstanding Principal and accrued and
unpaid Late Charges on such Principal.  The "Maturity Date" shall be December 1,
2011, as may be extended at the option of the Holder (i) in the event that, and
for so long as, an Event of Default (as defined in Section 4(a)) shall have
occurred and be continuing on the Maturity Date (as may be extended pursuant to
this Section 1) or any event shall have occurred and be continuing on the
Maturity Date (as may be extended pursuant to this Section 1) that with the
passage of time and the failure to cure would result in an Event of Default and (ii) through the
date that is ten (10) Business Days after the consummation of a Change of
Control in the event that a Change of Control is publicly announced or a Change
of Control Notice (as defined in Section 5(b)) is delivered prior to the
Maturity Date.

     

    (2)           INTEREST AND
PREPAYMENT.  The Company acknowledges and agrees that this Note
was issued at an original issue discount.  Other than any accrued and
unpaid Late Charge or interest in accordance with Section 3(c)(ii), if any, no
interest payments shall be made on this Note.  Other than as
specifically permitted by this Note, the Company may not prepay any portion of
the outstanding Principal or accrued and unpaid Late Charges on Principal, if
any.  

     

    (3)           CONVERSION OF
NOTES.  This Note shall be convertible into shares of the
Company's common stock, par value $0.001 per share (the "Common Stock"), on the terms
and conditions set forth in this Section 3.

     

     (a)          Conversion
Right.  Subject to the provisions of Section 3(d), at any time
or times on or after the date hereof, the Holder shall be entitled to convert
any portion of the outstanding and unpaid Conversion Amount (as defined below)
into fully paid and nonassessable shares of Common Stock in accordance with
Section 3(c), at the Conversion Rate (as defined below).  The Company
shall not issue any fraction of a share of Common Stock upon any
conversion.  If the issuance would result in the issuance of a
fraction of a share of Common Stock, the Company shall round such fraction of a
share of Common Stock up to the nearest whole share.  The Company
shall pay any and all transfer, stamp and similar taxes that may be payable with
respect to the issuance and delivery of Common Stock upon conversion of any
Conversion Amount.

     

     (b)          Conversion
Rate.  The number of shares of Common Stock issuable upon
conversion of any Conversion Amount pursuant to Section 3(a) shall be determined
by dividing (x) such Conversion Amount by (y) the Conversion Price (the "Conversion
Rate").

     

    (i)           "Conversion Amount" means the
sum of (A) the portion of the Principal to be converted, amortized, redeemed or
otherwise with respect to which this determination is being made, and (B) any
accrued and unpaid Late Charges with respect to such Principal.

     

    (ii)           "Conversion Price" means, as of
any Conversion Date (as defined below) or other date of determination, $0.60 per
share, subject to adjustment as provided herein.
  

    
      
         

      

      
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    (c)          Mechanics of
Conversion.

     

    (i)           Optional
Conversion.  To convert any Conversion Amount into shares of
Common Stock on any date (a "Conversion Date"), the Holder
shall (A) transmit by facsimile (or otherwise deliver), for receipt on or prior
to 11:59 p.m., New York time, on such date, a copy of an executed notice of
conversion in the form attached hereto as Exhibit I (the "Conversion Notice") to the
Company and the Transfer Agent and (B) if required by Section 3(c)(iii),
surrender this Note to a common carrier for delivery to the Company as soon as
practicable on or following such date (or an indemnification undertaking with
respect to this Note in the case of its loss, theft or
destruction).  On or before the first (1st) Business Day following the
date of receipt of a Conversion Notice, the Company shall transmit by facsimile
a confirmation of receipt of such Conversion Notice to the Holder and the
Transfer Agent.  On or before the third (3rd) Trading Day following
the date of receipt of a Conversion Notice (the "Share Delivery Date"), the Company shall (x)
provided that the Transfer Agent is participating in the DTC Fast Automated
Securities Transfer Program, credit such aggregate number of shares of Common
Stock to which the Holder shall be entitled to the Holder's or its designee's
balance account with DTC through its Deposit Withdrawal Agent Commission system
or (y) if the Transfer Agent is not participating in the DTC Fast Automated
Securities Transfer Program, issue and deliver to the address as specified in
the Conversion Notice, a certificate, registered in the name of the Holder or
its designee, for the number of shares of Common Stock to which the Holder shall
be entitled.  If this Note is physically surrendered for conversion as
required by Section 3(c)(iii) and the outstanding Principal of this Note is
greater than the Principal portion of the Conversion Amount being converted,
then the Company shall as soon as practicable and in no event later than three
(3) Business Days after receipt of this Note and at its own expense, issue and
deliver to the Holder a new Note (in accordance with Section 16(d)) representing
the outstanding Principal not converted.  The Person or Persons
entitled to receive the shares of Common Stock issuable upon a conversion of
this Note shall be treated for all purposes as the record holder or holders of
such shares of Common Stock on the Conversion Date.

     

    (ii)           Company's Failure to Timely
Convert.  If the Company shall fail to issue a certificate to
the Holder or credit the Holder's balance account with DTC, as applicable, for
the number of shares of Common Stock to which the Holder is entitled upon
conversion of any Conversion Amount on or prior to the date which is three (3)
Trading Days after the Conversion Date (a "Conversion Failure"), then (A)
the Company shall pay damages to the Holder for each Trading Day of such
Conversion Failure in an amount equal to 1.5% of the product of (1) the sum of
the number of shares of Common Stock not issued to the Holder on or prior to the
Share Delivery Date and to which the Holder is entitled, and (2) the Closing
Sale Price of the Common Stock on the Share Delivery Date and (B) the Holder,
upon written notice to the Company, may void its Conversion Notice with respect
to, and retain or have returned, as the case may be, any portion of this Note
that has not been converted pursuant to such Conversion Notice; provided that the
voiding of a Conversion Notice shall not affect the Company's obligations to
make any payments which have accrued prior to the date of such notice pursuant
to this Section 3(c)(ii) or otherwise.  In addition to the foregoing,
if within three (3) Trading Days after the Company's receipt of the facsimile
copy of a Conversion Notice, the Company shall fail to issue and deliver a
certificate to the Holder or credit the Holder's balance account with DTC for
the number of shares of Common Stock to which the Holder is entitled upon such
Holder's conversion of any Conversion Amount, and if on or after such Trading
Day the Holder purchases (in an open market transaction or otherwise) Common
Stock to deliver in satisfaction of a sale by the Holder of Common Stock
issuable upon such conversion that the Holder anticipated receiving from the
Company (a "Buy-In"),
then the Company shall, within three (3) Trading Days after the Holder's request
and in the Holder's discretion, either (i) pay cash to the Holder in an amount
equal to the Holder's total purchase price (including brokerage commissions and
other out-of-pocket expenses, if any) for the shares of Common Stock so
purchased (the "Buy-In
Price"), at which point the Company's obligation to deliver such
certificate (and to issue such Common Stock) shall terminate, or (ii) promptly
honor its obligation to deliver to the Holder a certificate or certificates
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 Bid Price on the Conversion
Date.
  

    
      
         

      

      
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    (iii)           Registration;
Book-Entry. The Company shall maintain a register (the "Register") for the recordation
of the names and addresses of the holders of each Note and the principal amount
of the Notes held by such holders (the "Registered
Notes").  The entries in the Register shall be conclusive and
binding for all purposes absent manifest error.  The Company and the
holders of the Notes shall treat each Person whose name is recorded in the
Register as the owner of a Note for all purposes, including, without limitation,
the right to receive payments of Principal and Interest, if any, hereunder,
notwithstanding notice to the contrary.  A Registered Note may be
assigned or sold in whole or in part only by registration of such assignment or
sale on the Register.  Upon its receipt of a request to assign or sell
all or part of any Registered Note by a Holder, the Company shall record the
information contained therein in the Register and issue one or more new
Registered Notes in the same aggregate principal amount as the principal amount
of the surrendered Registered Note to the designated assignee or transferee
pursuant to Section 16.  Notwithstanding anything to the contrary in
this Section 3(c)(iii), a Holder may assign any Note or any portion thereof to
an Affiliate of such Holder or a Related Fund of such Holder without delivering
a request to assign or sell such Note to the Company and the recordation of such
assignment or sale in the Register (a "Related Party Assignment");
provided, that
(x) the Company may continue to deal solely with such assigning or selling
Holder unless and until such Holder has delivered a request to assign or sell
such Note or portion thereof to the Company for recordation in the Register; (y)
the failure of such assigning or selling Holder to deliver a request to assign
or sell such Note or portion thereof to the Company shall not affect the
legality, validity, or binding effect of such assignment or sale and (z) such
assigning or selling Holder shall, acting solely for this purpose as a
non-fiduciary agent of the Company, maintain a register (the "Related Party Register")
comparable to the Register on behalf of the Company, and any such assignment or
sale shall be effective upon recordation of such assignment or sale in the
Related Party Register.  Notwithstanding anything to the contrary set
forth herein, upon conversion of any portion of this Note in accordance with the
terms hereof, the Holder shall not be required to physically surrender this Note
to the Company unless (A) the full Conversion Amount represented by this Note is
being converted or (B) the Holder has provided the Company with prior written
notice (which notice may be included in a Conversion Notice) requesting physical
surrender and reissue of this Note.  The Holder and the Company shall
maintain records showing the Principal and Late Charges, if any, converted and
the dates of such conversions or shall use such other method, reasonably
satisfactory to the Holder and the Company, so as not to require physical
surrender of this Note upon conversion.
  

    
      
         

      

      
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    (iv)           Pro Rata Conversion;
Disputes.  In the event that the Company receives a Conversion
Notice from more than one holder of Notes for the same Conversion Date and the
Company can convert some, but not all, of such portions of the Notes submitted
for conversion, the Company, subject to Section 3(d), shall convert from each
holder of Notes electing to have Notes converted on such date a pro rata amount
of such holder's portion of its Notes submitted for conversion based on the
principal amount of Notes submitted for conversion on such date by such holder
relative to the aggregate principal amount of all Notes submitted for conversion
on such date.  In the event of a dispute as to the number of shares of
Common Stock issuable to the Holder in connection with a conversion of this
Note, the Company shall issue to the Holder the number of shares of Common Stock
not in dispute and resolve such dispute in accordance with Section
21.

     

    (d)          Limitations on
Conversions.

     

    (i)           Beneficial
Ownership.  The Company shall not effect any conversion of this
Note, and the Holder of this Note shall not have the right to convert any
portion of this Note pursuant to the terms and provisions of this Note, to the
extent that after giving effect to such conversion, the Holder (together with
the Holder's Affiliates) would beneficially own in excess of 4.99% (the "Maximum Percentage") of the
number of shares of Common Stock outstanding immediately after giving effect to
such conversion.  For purposes of the foregoing sentence, the number
of shares of Common Stock beneficially owned by the Holder and its Affiliates
shall include the number of shares of Common Stock issuable upon conversion of
this Note with respect to which the determination of such sentence is being
made, but shall exclude the number of shares of Common Stock which would be
issuable upon (A) conversion of the remaining, nonconverted portion of this Note
beneficially owned by the Holder or any of its Affiliates and (B) exercise or
conversion of the unexercised or nonconverted portion of any other securities of
the Company (including, without limitation, any Other Notes or warrants) subject
to a limitation on conversion or exercise analogous to the limitation contained
herein beneficially owned by the Holder or any of its
Affiliates.  Except as set forth in the preceding sentence, for
purposes of this Section 3(d)(i), beneficial ownership shall be calculated in
accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended
(the "Exchange
Act").  For purposes of this Section 3(d)(i), 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 (x) the Company's
most recent Form 10-K, Form 10-Q or Form 8-K, as the case may be, (y) a more
recent public announcement by the Company or (z) any other notice by the Company
or the 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 one (1) Business Day confirm
orally and in writing 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 Note, by the Holder or 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 increase
or decrease the Maximum Percentage to any other percentage not in excess of
9.99% 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 and not to any other holder of
Notes.  The provisions of this paragraph shall be construed and
implemented in a manner otherwise than in strict conformity with the terms of
this Section 3(d)(i) to correct this paragraph (or any portion hereof) which may
be defective or inconsistent with the intended beneficial ownership limitation
herein contained or to make changes or supplements necessary or desirable to
properly give effect to such limitation.
  

    
      
         

      

      
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    (ii)           Principal Market
Regulation.  The Company shall not be obligated to issue any
shares of Common Stock upon conversion of this Note, and the Holder of this Note
shall not have the right to receive upon conversion of this Note any shares of
Common Stock, if the issuance of such shares of Common Stock would exceed the
aggregate number of shares of Common Stock which the Company may issue upon
conversion or exercise, as applicable, of the Notes and Warrants without
breaching the Company's obligations under the rules or regulations of the
Principal Market, which aggregate number equals 19.99% of the number of shares
outstanding on the Closing Date (the "Exchange Cap"), except that
such limitation shall not apply in the event that the Company (A) obtains the
approval of its stockholders as required by the applicable rules of the
Principal Market for issuances of Common Stock in excess of such amount or (B)
obtains a written opinion from outside counsel to the Company that such approval
is not required, which opinion shall be reasonably satisfactory to the Required
Holders.  Until such approval or written opinion is obtained, no
purchaser of the Notes pursuant to the Securities Purchase Agreement (the "Purchasers") shall be issued
in the aggregate, upon conversion or exercise, as applicable, of Notes or
Warrants, shares of Common Stock in an amount greater than the product of the
Exchange Cap multiplied by a fraction, the numerator of which is the principal
amount of Notes issued to such Purchaser pursuant to the Securities Purchase
Agreement on the Closing Date and the denominator of which is the aggregate
principal amount of all Notes issued to the Purchasers pursuant to the
Securities Purchase Agreement on the Closing Date (with respect to each
Purchaser, the "Exchange Cap
Allocation").  In the event that any Purchaser shall sell or
otherwise transfer any of such Purchaser's Notes, the transferee shall be
allocated a pro rata portion of such Purchaser's Exchange Cap Allocation, and
the restrictions of the prior sentence shall apply to such transferee with
respect to the portion of the Exchange Cap Allocation allocated to such
transferee.  In the event that any holder of Notes shall convert all
of such holder's Notes into a number of shares of Common Stock which, in the
aggregate, is less than such holder's Exchange Cap Allocation, then the
difference between such holder's Exchange Cap Allocation and the number of
shares of Common Stock actually issued to such holder shall be allocated to the
respective Exchange Cap Allocations of the remaining holders of Notes on a pro
rata basis in proportion to the aggregate principal amount of the Notes then
held by each such holder.
  

    
      
         

      

      
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    (4)          RIGHTS UPON EVENT OF
DEFAULT.

     

    (a)          Event of
Default.  Each of the following events shall constitute an
"Event of
Default":

     

    (i)           the
failure of the applicable Registration Statement required to be filed pursuant
to the Registration Rights Agreement to be filed within the applicable time
period specified in the Registration Rights Agreement or to be declared
effective by the SEC on or prior to the date that is sixty (60) days after the
applicable Effectiveness Deadline (as defined in the Registration Rights
Agreement), or, while the applicable Registration Statement is required to be
maintained effective pursuant to the terms of the Registration Rights Agreement,
the effectiveness of the applicable Registration Statement lapses for any reason
(including, without limitation, the issuance of a stop order) or is unavailable
to any holder of the Notes for sale of all of such holder's Registrable
Securities (as defined in the Registration Rights Agreement) in accordance with
the terms of the Registration Rights Agreement, and such lapse or unavailability
continues for a period of ten (10) consecutive days or for more than an
aggregate of thirty (30) days in any 365-day period (other than days during an
Allowable Grace Period (as defined in the Registration Rights
Agreement));

     

    (ii)           the
suspension from trading or failure of the Common Stock to be listed on an
Eligible Market for a period of five (5) consecutive Trading Days or for more
than an aggregate of ten (10) Trading Days in any 365-day period;

     

    (iii)          subject
to Section 3(d)(ii), the Company's (A) failure to cure a Conversion Failure by
delivery of the required number of shares of Common Stock within ten (10)
Business Days after the applicable Conversion Date or (B) notice, written or
oral, to any holder of the Notes, including by way of public announcement or
through any of its agents, at any time, of its intention not to comply with a
request for conversion of any Notes into shares of Common Stock that is tendered
in accordance with the provisions of the Notes;

     

    (iv)         at
any time following the tenth (10th)
consecutive Business Day that the Holder's Authorized Share Allocation is less
than the number of shares of Common Stock that the Holder would be entitled to
receive upon a conversion of the full Conversion Amount of this Note (without
regard to any limitations on conversion set forth in Section 3(d) or
otherwise);

     

    (v)           the
Company's failure to pay to the Holder any amount of Principal (including,
without limitation, any redemption payments), Late Charges or other amounts when
and as due under this Note or any other Transaction Document (as defined in the
Securities Purchase Agreement) or any other agreement, document, certificate or
other instrument delivered in connection with the transactions contemplated
hereby and thereby to which the Holder is a party, except, in the case of a
failure to pay Late Charges or any other such amounts specified above, other
than the Principal, when and as due, in which case only if such failure
continues for a period of at least five (5) Business Days;
 

    
      
         

      

      
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    (vi)         any
default under, redemption of or acceleration prior to maturity of any
Indebtedness of the Company or any of its Subsidiaries (as defined in Section
3(a) of the Securities Purchase Agreement) other than with respect to any Other
Notes;

     

    (vii)        the
Company or any of its Subsidiaries, pursuant to or within the meaning of Title
11, U.S. Code, or any similar Federal, foreign or state law for the relief of
debtors (collectively, "Bankruptcy Law"), (A)
commences a voluntary case, (B) consents to the entry of an order for relief
against it in an involuntary case, (C) consents to the appointment of a
receiver, trustee, assignee, liquidator or similar official (a "Custodian"), (D) makes a
general assignment for the benefit of its creditors or (E) admits in writing
that it is generally unable to pay its debts as they become due;

     

    (viii)       a
court of competent jurisdiction enters an order or decree under any Bankruptcy
Law that (A) is for relief against the Company or any of its Subsidiaries in an
involuntary case, (B) appoints a Custodian of the Company or any of its
Subsidiaries or (C) orders the liquidation of the Company or any of its
Subsidiaries;

     

    (ix)        
a final judgment or judgments for the payment of money aggregating in excess of
$200,000 are rendered against the Company or any of its Subsidiaries and which
judgments are not, within sixty (60) days after the entry thereof, bonded,
discharged or stayed pending appeal, or are not discharged within sixty (60)
days after the expiration of such stay; provided, however, that any
judgment which is covered by insurance or an indemnity from a credit worthy
party shall not be included in calculating the $200,000 amount set forth above
so long as the Company provides the Holder a written statement from such insurer
or indemnity provider (which written statement shall be reasonably satisfactory
to the Holder) to the effect that such judgment is covered by insurance or an
indemnity and the Company will receive the proceeds of such insurance or
indemnity within thirty (30) days of the issuance of such judgment;

     

    (x)          the
Company breaches any representation, warranty, covenant or other term or
condition of any Transaction Document, except, in the case of a breach of a
covenant which is curable, only if such breach continues for a period of at
least ten (10) consecutive Business Days;

     

    (xi)         any
breach or failure in any respect to comply with Section 13 of this
Note;

     

    (xii)        any
material damage to, or loss, theft or destruction of, a material amount of
property of the Company, whether or not insured, or any strike, lockout, labor
dispute, embargo, condemnation, act of God or public enemy, or other casualty
which causes, for more than thirty (30) consecutive days, the cessation or
substantial curtailment of revenue producing activities at any facility of the
Company or any Subsidiary, if any such event or circumstance could reasonably be
expected to have a Material Adverse Effect (as defined in the Securities
Purchase Agreement);
  

    
      
         

      

      
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    (xiii)        either
the Principal Market Stockholder Approval (as defined in the Securities Purchase
Agreement) or the Authorized Share Stockholder Approval (as defined in the
Securities Purchase Agreement) has not occurred on or prior to the Stockholder
Meeting Deadline; or

     

    (xiv)        any
Event of Default (as defined in the Other Notes) occurs with respect to any
Other Notes.

     

    (b)           Redemption
Right.  Upon the occurrence of an Event of Default with respect
to this Note or any Other Note, the Company shall within one (1) Business Day
deliver written notice thereof via facsimile and overnight courier (an "Event of Default Notice") to
the Holder.  At any time after the earlier of the Holder's receipt of
an Event of Default Notice and the Holder becoming aware of an Event of Default,
the Holder may require the Company to redeem (an "Event of Default Redemption")
all or any portion of this Note by delivering written notice thereof (the "Event of Default Redemption
Notice") to the Company, which Event of Default Redemption Notice shall
indicate the portion of this Note the Holder is electing to
redeem.  Each portion of this Note subject to redemption by the
Company pursuant to this Section 4(b) shall be redeemed by the Company in cash
at a price equal to 125% of the greater of (x) the Conversion Amount to be
redeemed and (y) the product of (A) the Conversion Rate in effect at such time
as the Holder delivers an Event of Default Redemption Notice with respect to
such Conversion Amount being redeemed and (B) the greatest Closing Sale Price of
the Common Stock on any Trading Day during the period commencing on the date
immediately preceding such Event of Default and ending on the date the Holder
delivers the Event of Default Redemption Notice (the "Event of Default Redemption
Price").  Redemptions required by this Section 4(b) shall be
made in accordance with the provisions of Section 11.  To the extent
redemptions required by this Section 4(b) are deemed or determined by a court of
competent jurisdiction to be prepayments of the Note by the Company, such
redemptions shall be deemed to be voluntary prepayments.  The parties
hereto agree that in the event of the Company's redemption of any portion of the
Note under this Section 4(b), the Holder's damages would be uncertain and
difficult to estimate because of the parties' inability to predict future
interest rates and the uncertainty of the availability of a suitable substitute
investment opportunity for the Holder.  Accordingly, any Event of
Default redemption premium due under this Section 4(b) is intended by the
parties to be, and shall be deemed, a reasonable estimate of the Holder's actual
loss of its investment opportunity and not as a penalty.
  

    
      
         

      

      
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    (5)          RIGHTS UPON FUNDAMENTAL
TRANSACTION AND CHANGE OF CONTROL.

     

    (a)           Assumption.  The
Company shall not enter into or be party to a Fundamental Transaction unless
(i)  the Successor Entity assumes in writing all of the obligations of the
Company under this Note and the other Transaction Documents in accordance with
the provisions of this Section 5(a) pursuant to written agreements in form and
substance reasonably satisfactory to the Required Holders and approved by the
Required Holders prior to such Fundamental Transaction, including agreements to
deliver to each holder of Notes in exchange for such Notes a security of the
Successor Entity evidenced by a written instrument substantially similar in form
and substance to the Notes, including, without limitation, having a principal
amount and interest rate equal to the principal amounts and the interest rates
of the Notes then outstanding held by such holder, having similar conversion
rights and having similar ranking and security to the Notes, and satisfactory to
the Required Holders and (ii) the Successor Entity (including its Parent Entity)
is a publicly traded corporation whose common stock is quoted on or listed for
trading on an Eligible Market.  Upon the occurrence of any Fundamental
Transaction, the Successor Entity shall succeed to, and be substituted for (so
that from and after the date of such Fundamental Transaction, the provisions of
this Note referring to the "Company" shall refer instead to the Successor
Entity), and may exercise every right and power of the Company and shall assume
all of the obligations of the Company under this Note with the same effect as if
such Successor Entity had been named as the Company herein.  Upon
consummation of the Fundamental Transaction, the Successor Entity shall deliver
to the Holder confirmation that there shall be issued upon conversion or
redemption of this Note at any time after the consummation of the Fundamental
Transaction, in lieu of the shares of the Company's Common Stock (or other
securities, cash, assets or other property) issuable upon the conversion or
redemption of the Notes prior to such Fundamental Transaction, such shares of
the publicly traded common stock (or their equivalent) of the Successor Entity
(including its Parent Entity), as adjusted in accordance with the provisions of
this Note.  The provisions of this Section shall apply similarly and
equally to successive Fundamental Transactions and shall be applied without
regard to any limitations on the conversion or redemption of this
Note.

     

    (b)           Redemption
Right.  No sooner than fifteen (15) days nor later than ten
(10) days prior to the consummation of a Change of Control, but not prior to the
public announcement of such Change of Control, the Company shall deliver written
notice thereof via facsimile and overnight courier to the Holder (a "Change of Control Notice").  At any
time during the period beginning after the Holder's receipt of a Change of
Control Notice and ending twenty (20) Trading Days after the date of the
consummation of such Change of Control, the Holder may require the Company to
redeem (a "Change of Control
Redemption") all or any portion of this Note by delivering written notice
thereof ("Change of Control
Redemption Notice", and the date thereof, the "Change of Control Redemption Notice
Date") to the Company, which Change of Control Redemption Notice shall
indicate the Conversion Amount the Holder is electing to require the Company to
redeem.  The portion of this Note subject to redemption pursuant to
this Section 5(b) shall be redeemed by the Company in cash at a price equal to
125% of the greater of (x) the Conversion Amount to be redeemed and (y) the
product of (A) the Conversion Rate in effect at such time as the Holder delivers
a Change of Control Redemption Notice with respect to such Conversion Amount
being redeemed and (B) the greatest Closing Sale Price of the shares of Common
Stock during the period beginning on the date immediately preceding the earlier
to occur of (1) the consummation of the Change of Control and (2) the public
announcement of such Change of Control and ending on the date the Holder
delivers the Change of Control Redemption Notice (the "Change of Control Redemption
Price").  Redemptions required by this Section 5 shall be made
in accordance with the provisions of Section 11 and shall have priority to
payments to stockholders in connection with a Change of Control.  To
the extent redemptions required by this Section 5(b) are deemed or determined by
a court of competent jurisdiction to be prepayments of the Note by the Company,
such redemptions shall be deemed to be voluntary
prepayments.  Notwithstanding anything to the contrary in this Section
5, but subject to Section 3(d), until the Change of Control Redemption Price
(together with any interest thereon) is paid in full, the Conversion Amount
submitted for redemption under this Section 5(c) (together with any interest
thereon) may be converted, in whole or in part, by the Holder into Common Stock
pursuant to Section 3.  The parties hereto agree that in the event of
the Company's redemption of any portion of the Note under this Section 5(b), the
Holder's damages would be uncertain and difficult to estimate because of the
parties' inability to predict future interest rates and the uncertainty of the
availability of a suitable substitute investment opportunity for the
Holder.  Accordingly, any Change of Control redemption premium due
under this Section 5(b) is intended by the parties to be, and shall be deemed, a
reasonable estimate of the Holder's actual loss of its investment opportunity
and not as a penalty.
  

    
      
         

      

      
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    (6)          DISTRIBUTION OF ASSETS;
RIGHTS UPON ISSUANCE OF PURCHASE RIGHTS AND OTHER CORPORATE
EVENTS.

     

    (a)           Distribution of
Assets.  If the Company shall declare or make any dividend or
other distributions of its assets (or rights to acquire its assets) to any or
all holders of shares of Common Stock, by way of return of capital or otherwise
(including without limitation, any distribution of cash, stock or other
securities, property or options by way of a dividend, spin off,
reclassification, corporate rearrangement, scheme of arrangement or other
similar transaction) (the "Distributions"), then the
Holder will be entitled to such Distributions as if the Holder had held the
number of shares of Common Stock acquirable upon complete conversion of this
Note (without taking into account any limitations or restrictions on the
convertibility of this Note) immediately prior to the date on which a record is
taken for such Distribution or, if no such record is taken, the date as of which
the record holders of Common Stock are to be determined for such
Distributions.

     

    (b)           Purchase
Rights.  If at any time the Company grants, issues or sells any
Options, Convertible Securities or rights to purchase stock, warrants,
securities or other property pro rata to the record holders of any class of
Common Stock (the "Purchase
Rights"), then the Holder will be entitled to acquire, upon the terms
applicable to such Purchase Rights, the aggregate Purchase Rights which the
Holder could have acquired if the Holder had held the number of shares of Common
Stock acquirable upon complete conversion of this Note (without taking into
account any limitations or restrictions on the convertibility of this Note)
immediately prior to the date on which a record is taken for the grant, issuance
or sale of such Purchase Rights, or, if no such record is taken, the date as of
which the record holders of shares of Common Stock are to be determined for the
grant, issue or sale of such Purchase Rights.

     

    (c)           Other Corporate
Events.  In addition to and not in substitution for any other
rights hereunder, prior to the consummation of any Fundamental Transaction
pursuant to which holders of shares of Common Stock are entitled to receive
securities or other assets with respect to or in exchange for shares of Common
Stock (a "Corporate
Event"), the Company shall make appropriate provision to insure that the
Holder will thereafter have the right to receive upon a conversion of this Note,
(i) in addition to the shares of Common Stock receivable upon such conversion,
such securities or other assets to which the Holder would have been entitled
with respect to such shares of Common Stock had such shares of Common Stock been
held by the Holder upon the consummation of such Corporate Event (without taking
into account any limitations or restrictions on the convertibility of this Note)
or (ii) in lieu of the shares of Common Stock otherwise receivable upon such
conversion, such securities or other assets received by the holders of shares of
Common Stock in connection with the consummation of such Corporate Event in such
amounts as the Holder would have been entitled to receive had this Note
initially been issued with conversion rights for the form of such consideration
(as opposed to shares of Common Stock) at a conversion rate for such
consideration commensurate with the Conversion Rate.  Provision made
pursuant to the preceding sentence shall be in a form and substance satisfactory
to the Required Holders.  The provisions of this Section shall apply
similarly and equally to successive Corporate Events and shall be applied
without regard to any limitations on the conversion or redemption of this
Note.
  

    
      
         

      

      
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    (7)          RIGHTS UPON ISSUANCE OF
OTHER SECURITIES.

     

    (a)           Adjustment of Conversion
Price upon Issuance of Common Stock.  If and whenever on or
after the Subscription Date, the Company issues or sells, or in accordance with
this Section 7(a) is deemed to have issued or sold, any shares of Common Stock
(including the issuance or sale of shares of Common Stock owned or held by or
for the account of the Company, but excluding shares of Common Stock deemed to
have been issued or sold by the Company in connection with any Excluded
Securities) for a consideration per share (the "New Issuance Price") less than
a price (the "Applicable
Price") equal to the Conversion Price in effect immediately prior to such
issue or sale or deemed issuance or sale (the foregoing a "Dilutive Issuance"), then
immediately after such Dilutive Issuance the Conversion Price then in effect
shall be reduced to an amount equal to the New Issuance Price.  For
purposes of determining the adjusted Conversion Price under this Section 7(a),
the following shall be applicable:

     

    (i)           Issuance of
Options.  If the Company in any manner grants any Options and
the lowest price per share for which one share of Common Stock is issuable upon
the exercise of any such Option or upon conversion, exercise or exchange of any
Convertible Securities issuable upon exercise of any such Option is less than
the Applicable Price, then such share of Common Stock shall be deemed to be
outstanding and to have been issued and sold by the Company at the time of the
granting or sale of such Option for such price per share.  For
purposes of this Section 7(a)(i), the "lowest price per share for which one
share of Common Stock is issuable upon exercise of such Options or upon
conversion, exercise or exchange of such Convertible Securities issuable upon
exercise of any such Option" shall be equal to the sum of the lowest amounts of
consideration (if any) received or receivable by the Company with respect to any
one share of Common Stock upon the granting or sale of the Option, upon exercise
of the Option and upon conversion, exercise or exchange of any Convertible
Security issuable upon exercise of such Option less any consideration paid or
payable by the Company with respect to such one share of Common Stock upon the
granting or sale of such Option, upon exercise of such Option and upon
conversion exercise or exchange of any Convertible Security issuable upon
exercise of such Option.  No further adjustment of the Conversion
Price shall be made upon the actual issuance of such shares of Common Stock or
of such Convertible Securities upon the exercise of such Options or upon the
actual issuance of such shares of Common Stock upon conversion, exercise or
exchange of such Convertible Securities.
  

    
      
         

      

      
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    (ii)           Issuance of Convertible
Securities.  If the Company in any manner issues or sells any
Convertible Securities and the lowest price per share for which one share of
Common Stock is issuable upon the conversion, exercise or exchange thereof is
less than the Applicable Price, then such share of Common Stock shall be deemed
to be outstanding and to have been issued and sold by the Company at the time of
the issuance or sale of such Convertible Securities for such price per
share.  For the purposes of this Section 7(a)(ii), the "lowest price
per share for which one share of Common Stock is issuable upon the conversion,
exercise or exchange thereof" shall be equal to the sum of the lowest amounts of
consideration (if any) received or receivable by the Company with respect to one
share of Common Stock upon the issuance or sale of the Convertible Security and
upon conversion, exercise or exchange of such Convertible Security less any
consideration paid or payable by the Company with respect to such one share of
Common Stock upon the issuance or sale of such Convertible Security and upon
conversion, exercise or exchange of such Convertible Security.  No
further adjustment of the Conversion Price shall be made upon the actual
issuance of such shares of Common Stock upon conversion, exercise or exchange of
such Convertible Securities, and if any such issue or sale of such Convertible
Securities is made upon exercise of any Options for which adjustment of the
Conversion Price has been or is to be made pursuant to other provisions of this
Section 7(a), no further adjustment of the Conversion Price shall be made by
reason of such issue or sale.

     

    (iii)           Change in Option Price or
Rate of Conversion.  If the purchase price provided for in any
Options, the additional consideration, if any, payable upon the issue,
conversion, exercise or exchange of any Convertible Securities, or the rate at
which any Convertible Securities are convertible into or exercisable or
exchangeable for shares of Common Stock increases or decreases at any time, the
Conversion Price in effect at the time of such increase or decrease shall be
adjusted to the Conversion Price which would have been in effect at such time
had such Options or Convertible Securities provided for such increased or
decreased purchase price, additional consideration or increased or decreased
conversion rate, as the case may be, at the time initially granted, issued or
sold.  For purposes of this Section 7(a)(iii), if the terms of any
Option or Convertible Security that was outstanding as of the Subscription Date
are increased or decreased in the manner described in the immediately preceding
sentence, then such Option or Convertible Security and the shares of Common
Stock deemed issuable upon exercise, conversion or exchange thereof shall be
deemed to have been issued as of the date of such increase or
decrease.  No adjustment pursuant to this Section 7(a) shall be made
if such adjustment would result in an increase of the Conversion Price then in
effect.
  

    
      
         

      

      
        - 13
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    (iv)           Calculation of Consideration
Received.  In case any Option is issued in connection with the
issue or sale of other securities of the Company, together comprising one
integrated transaction, (x) the Options will be deemed to have been issued for
the Option Value and (y) the other securities issued or sold in such integrated
transaction shall be deemed to have been issued for the difference of (I) the
aggregate consideration received by the Company less any consideration paid or
payable by the Company pursuant to the terms of such other securities of the
Company, less (II) the Option Value.  If any shares of Common Stock,
Options or Convertible Securities are issued or sold or deemed to have been
issued or sold for cash, the consideration received therefor will be deemed to
be the net amount received by the Company therefor.  If any shares of
Common Stock, Options or Convertible Securities are issued or sold for a
consideration other than cash, the amount of such consideration received by the
Company will be the fair value of such consideration, except where such
consideration consists of securities, in which case the amount of consideration
received by the Company will be the Closing Sale Price of such security on the
date of receipt.  If any shares of Common Stock, Options or
Convertible Securities are issued to the owners of the non-surviving entity in
connection with any merger in which the Company is the surviving entity, the
amount of consideration therefor will be deemed to be the fair value of such
portion of the net assets and business of the non-surviving entity as is
attributable to such shares of Common Stock, Options or Convertible Securities,
as the case may be.  The fair value of any consideration other than
cash or securities will be determined jointly by the Company and the Required
Holders.  If such parties are unable to reach agreement within ten
(10) days after the occurrence of an event requiring valuation (the "Valuation Event"), the fair
value of such consideration will be determined within five (5) Trading Days
after the tenth (10th) day
following the Valuation Event by an independent, reputable appraiser jointly
selected by the Company and the Required Holders.  The determination
of such appraiser shall be final and binding upon all parties absent manifest
error and the fees and expenses of such appraiser shall be borne by the
Company.

     

    (v)           Record
Date.  If the Company takes a record of the holders of shares
of Common Stock for the purpose of entitling them (A) to receive a dividend
or other distribution payable in shares of Common Stock, Options or in
Convertible Securities or (B) to subscribe for or purchase shares of Common
Stock, Options or Convertible Securities, then such record date will be deemed
to be the date of the issue or sale of the shares of Common Stock deemed to have
been issued or sold upon the declaration of such dividend or the making of such
other distribution or the date of the granting of such right of subscription or
purchase, as the case may be.

     

    (b)           Adjustment of Conversion
Price upon Subdivision or Combination of Common Stock.  If the
Company at any time on or after the Subscription Date subdivides (by any stock
split, stock dividend, recapitalization or otherwise) one or more classes of its
outstanding shares of Common Stock into a greater number of shares, the
Conversion Price in effect immediately prior to such subdivision will be
proportionately reduced.  If the Company at any time on or after the
Subscription Date combines (by combination, reverse stock split or otherwise)
one or more classes of its outstanding shares of Common Stock into a smaller
number of shares, the Conversion Price in effect immediately prior to such
combination will be proportionately increased.

     

    (c)           Other
Events.  If any event occurs of the type contemplated by the
provisions of this Section 7 but not expressly provided for by such provisions
(including, without limitation, the granting of stock appreciation rights,
phantom stock rights or other rights with equity features, but excluding
Excluded Securities), then the Company's Board of Directors will make an
appropriate adjustment in the Conversion Price so as to protect the rights of
the Holder under this Note; provided, that no
such adjustment pursuant to this Section 7(c) will increase the Conversion Price
as otherwise determined pursuant to this Section 7.
  

    
      
         

      

      
        - 14
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    (d)           Voluntary Adjustment By
Company. The Company may at any time during the term of this Note reduce
the then current Conversion Price to any amount and for any period of time
deemed appropriate by the Board of Directors of the Company.

     

    (8)           COMPANY INSTALLMENT
CONVERSION OR REDEMPTION.  On each Installment Date, the
Company shall pay to the Holder of this Note the Installment Amount due on such
date by converting all or some of such Installment Amount into Common Stock,
provided there has been no Equity Conditions Failure, in accordance with this
Section 8 (a "Company
Conversion"); provided, however, that the
Company may, at its option following notice to the Holder as set forth below,
pay the Installment Amount by redeeming such Installment Amount in cash (a
"Company Redemption") or
by any combination of a Company Conversion and a Company Redemption so long as
all of the outstanding applicable Installment Amount due on any Installment Date
shall be converted and/or redeemed by the Company on the applicable Installment
Date, subject to the provisions of this Section 8.

     

    (a)                      General.  On
or prior to the date which is the twenty-third (23rd) Trading Day prior to each
Installment Date (each, an "Installment Notice Due Date"),
the Company shall deliver written notice (each, a "Company Installment Notice"
and the date all of the holders receive such notice is referred to as to the
"Company Installment Notice
Date"), to each holder of Notes which Company Installment Notice shall
(i) either (A) confirm that the applicable Installment Amount of such holder's
Note shall be converted to Common Stock in whole or in part pursuant to a
Company Conversion (such amount to be converted, the "Company Conversion Amount") or
(B) (1) state that the Company elects to redeem, or is required to redeem in
accordance with the provisions of the Notes, in whole or in part, the applicable
Installment Amount pursuant to a Company Redemption and (2) specify the portion
(including Late Charges, if any, on such amount) which the Company elects or is
required to redeem pursuant to a Company Redemption (such amount to be redeemed,
the "Company Redemption
Amount") and the portion (including Late Charges, if any, on such amount)
that is the Company Conversion Amount, which amounts, when added together, must
equal the applicable Installment Amount and (ii) if the Installment Amount is to
be paid, in whole or in part, in Common Stock pursuant to a Company Conversion,
certify that the Equity Conditions have been satisfied as of the date of the
Company Installment Notice.  Each Company Installment Notice shall be
irrevocable.  If the Company does not timely deliver a Company
Installment Notice in accordance with this Section 8, then the Company shall be
deemed to have delivered an irrevocable Company Installment Notice confirming a
Company Conversion and shall be deemed to have certified that the Equity
Conditions in connection with any such conversion on the Company Installment
Notice Date and Installment Date have been satisfied.  Notwithstanding
the foregoing, if the Company delivers, or is deemed to have delivered, a
Company Installment Notice confirming or specifying (as the case may be) a
Company Conversion with respect to all or a portion of the applicable
Installment Amount and the Holder delivers a written notice to the Company prior
to the applicable Installment Date specifying the portion of the applicable
Installment Amount with respect to which such Company Conversion would result in
a violation of Section 3(d)(i) if such Company Conversion were effected (such
amount so specified is referred to herein as the “Specified Amount”), then such
Company Installment Notice shall be deemed to have, at the time it was
delivered, (I) stated that the Company elected a Company Redemption with respect
to the applicable Specified Amount and that the applicable Specified Amount
together with any Company Redemption Amount previously indicated in the
applicable Company Installment Notice will be the applicable Company Redemption
Amount on the applicable Installment Date and (II) confirmed a Company
Conversion with respect to the remaining portion of the applicable Installment
Amount equal to the difference between the applicable Installment Amount and the
applicable Specified Amount.  Except as expressly provided in this
Section 8(a), the Company shall convert and/or redeem the applicable Installment
Amount of this Note pursuant to this Section 8 and the corresponding Installment
Amounts of the Other Notes pursuant to the corresponding provisions of the Other
Notes in the same ratio of the Installment Amount being converted and/or
redeemed hereunder.  The Company Conversion Amount (whether set forth
in the Company Installment Notice or by operation of this Section 8) shall be
converted in accordance with Section 8(b) and the Company Redemption Amount
shall be redeemed in accordance with Section 8(c).  Notwithstanding
anything herein to the contrary, in the event of any partial conversion or
redemption of this Note, the Principal amount converted or redeemed shall be
deducted from the final Installment Amount to be paid hereunder on the final
Installment Date.
  

    
      
         

      

      
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    (b)           Mechanics of Company
Conversion.  Subject to Section 3(d), when the Company delivers
a Company Installment Notice and confirms, or is deemed to have confirmed, in
whole or in part, a Company Conversion in accordance with Section 8(a), then (1)
contemporaneously with the delivery of the Company Installment Notice on the
applicable Company Installment Notice Date, the Company shall deliver to the
Holder's account with DTC (or if the Transfer Agent is not participating in the
DTC Fast Automated Securities Transfer Program, issue and deliver a certificate)
such number of shares of Common Stock (the "Pre-Installment Conversion
Shares") equal to the quotient of (x) the Company Conversion Amount as of
the applicable Installment Date divided by (y) the applicable Company
Pre-Installment Conversion Price and (2) on the applicable Installment Date, the
Company shall deliver to the Holder's account with DTC (or if the Transfer Agent
is not participating in the DTC Fast Automated Securities Transfer Program,
issue and deliver a certificate) an additional number of shares of Common Stock
equal to the Installment Balance Conversion Shares; provided, that the
Equity Conditions have been satisfied (or waived in writing by the Holder) on
such Company Installment Notice Date and the Installment Date and the Holder
shall not have delivered to the Company written notice after the applicable
Company Installment Notice Date but prior to the applicable Installment Date
stating that such Company Conversion would result in a violation of Section
3(d)(i) if such Company Conversion were effected (which written notice is
referred to herein as a “Blocker Notice” and shall
specify the portion of the applicable Installment Amount with respect to which
such Company Conversion would result in a violation of Section 3(d)(i) if such
Company Conversion were effected (such amount so specified is referred to herein
as the “Designated Specified
Amount”)).  All Pre-Installment Conversion Shares and
Installment Balance Conversion Shares shall be fully paid and nonassessable
shares of Common Stock (rounded to the nearest whole share).  If the
Equity Conditions are not satisfied as of the Company Installment Notice Date,
then unless the Company has elected to redeem such Installment Amount, the
Company Installment Notice shall indicate that unless the Holder waives the
Equity Conditions, the Installment Amount shall be redeemed.  If the
Company confirmed (or is deemed to have confirmed by operation of Section 8(a))
the conversion of the applicable Company Conversion Amount, in whole or in part,
and there was no Equity Conditions Failure as of the applicable Company
Installment Notice Date (or is deemed to have certified that the Equity
Conditions in connection with any such conversion have been satisfied by
operation of Section 8(a)) but an Equity Conditions Failure occurred between the
applicable Company Installment Notice Date and any time prior to the applicable
Installment Date, the Company shall provide the Holder a subsequent notice to
that effect.  If the Equity Conditions are not satisfied (or waived in
writing by the Holder) during such period, then at the option of the Holder, the
Holder may require the Company to do any one or more of the following: (i) the
Company shall redeem all or any part designated by the Holder of the Company
Conversion Amount (including at the election of the Holder, such amount
converted to Pre-Installment Conversion Shares in which case the Holder shall
return such Pre-Installment Conversion Shares to the Company) (such designated
amount is referred to as the "First Redemption Amount") (or,
if a Blocker Notice was delivered to the Company by the Holder after the
applicable Delivery Date but prior to the applicable Installment Date, the
entire Designated Specified Amount) on such Installment Date and the Company
shall pay to the Holder on such Installment Date, by wire transfer of
immediately available funds, an amount in cash equal to 125% of such First
Redemption Amount (or 100% of the Designated Specified Amount on the applicable
Installment Date solely if the Holder delivered a Blocker Notice to the Company
after the applicable Delivery Date but prior to the applicable Installment Date)
(as applicable), and/or (ii) the Company Conversion shall be null and void with
respect to all or any part designated by the Holder of the unconverted Company
Conversion Amount and the Holder shall be entitled to all the rights of a holder
of this Note with respect to such amount of the Company Conversion Amount; provided, however, that the
Conversion Price for such unconverted Company Conversion Amount shall thereafter
be adjusted to equal the lesser of (A) the Company Conversion Price as in effect
on the date on which the Holder voided the Company Conversion or (B) the Company
Conversion Price as in effect on the date on which the Holder delivers a
Conversion Notice relating thereto.  If the Company fails to redeem
any First Redemption Amount on or before the applicable Installment Date by
payment of such amount on the applicable Installment Date, then the Holder shall
have the rights set forth in Section 12(a) as if the Company failed to pay the
applicable Company Installment Redemption Price and all other rights under this
Note (including, without limitation, such failure constituting an Event of
Default described in Section 4(a)(v)).  Notwithstanding anything to
the contrary in this Section 8(b), but subject to the limitations set forth in
Section 3(d), until the Company delivers Common Stock representing the Company
Conversion Amount to the Holder, the Company Conversion Amount may be converted
by the Holder into Common Stock pursuant to Section 3.  In the event
that the Holder elects to convert the Company Conversion Amount prior to the
applicable Installment Date as set forth in the immediately preceding sentence,
the Company Conversion Amount so converted shall be deducted from the
Installment Amounts relating to the applicable Installment Dates as set forth in
the applicable Conversion Notice.
  

    
      
         

      

      
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    (c)           Mechanics of Company
Redemption.  If the Company elects a Company Redemption in
accordance with Section 8, then the Company Redemption Amount which is to be
paid to the Holder on the applicable Installment Date shall be redeemed by the
Company and the Company shall pay to the Holder on such Installment Date, by
wire transfer of immediately available funds, an amount in cash (the "Company Installment Redemption
Price") equal to 100% of the Company Redemption Amount.  If the
Company fails to redeem the Company Redemption Amount on the applicable
Installment Date by payment of the Company Installment Redemption Price on such
date, then at the option of the Holder designated in writing to the Company (any
such designation, a "Conversion
Notice" for purposes of this Note), the Holder may require the Company to
convert all or any part of the Company Redemption Amount at the Company
Conversion Price as in effect on the applicable Installment
Date.  Conversions required by this Section 8(c) shall be made in
accordance with the provisions of Section 3(c).  Notwithstanding
anything to the contrary in this Section 8(c), but subject to Section 3(d),
until the Company Installment Redemption Price is paid in full, the Company
Redemption Amount may be converted, in whole or in part, by the Holder into
Common Shares pursuant to Section 3.  In the event the Holder elects
to convert all or any portion of the Company Redemption Amount prior to the
applicable Installment Date as set forth in the immediately preceding sentence,
the Company Redemption Amount so converted shall be deducted from the
Installment Amounts relating to the applicable Installment Dates or from the
Maturity Amount to be paid on the Maturity Date as set forth in the applicable
Conversion Notice.
  

    
      
         

      

      
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    (9)         NONCIRCUMVENTION.  The
Company hereby covenants and agrees that the Company will not, by amendment of
its Certificate of Incorporation, Bylaws or through any reorganization, transfer
of assets, consolidation, merger, scheme of arrangement, dissolution, issue or
sale of securities, or any other voluntary action, avoid or seek to avoid the
observance or performance of any of the terms of this Note, and will at all
times in good faith carry out all of the provisions of this Note and take all
action as may be required to protect the rights of the Holder of this
Note.

     

    (10)        RESERVATION OF AUTHORIZED
SHARES.

     

    (a)           Reservation.  Prior
to receipt of the Authorized Share Stockholder Approval, the Company shall
reserve out of its authorized and unissued Common Stock a number of shares of
Common Stock for each of the Notes equal to 100% of the Conversion Rate with
respect to the Conversion Amount of each such Note as of the Issuance Date.  From
and after receipt of the Authorized Share Stockholder Approval, the Company
shall reserve out of its authorized and unissued Common Stock 130% of the number
of shares of Common Stock as shall from time to time be necessary to effect the
conversion of all of the Notes then outstanding at the then applicable
Conversion Price.  For so long as any of the Notes are outstanding,
the Company shall take all action necessary to reserve and keep available out of
its authorized and unissued Common Stock, solely for the purpose of effecting
the conversion of the Notes, the number of shares of Common Stock specified
above in this Section 10(a) as shall from time to time be necessary to effect
the conversion of all of the Notes then outstanding; provided, that at no
time shall the number of shares of Common Stock so reserved be less than the
number of shares required to be reserved pursuant hereto (in each case without
regard to any limitations on conversions) (the "Required Reserve
Amount").  The initial number of shares of Common Stock
reserved for conversions of the Notes and each increase in the number of shares
so reserved shall be allocated pro rata among the holders of the Notes based on
the principal amount of the Notes held by each holder at the Closing (as defined
in the Securities Purchase Agreement) or increase in the number of reserved
shares, as the case may be (the "Authorized Share
Allocation").  In the event that a holder shall sell or
otherwise transfer any of such holder's Notes, each transferee shall be
allocated a pro rata portion of such holder's Authorized Share
Allocation.  Any shares of Common Stock reserved and allocated to any
Person which ceases to hold any Notes shall be allocated to the remaining
holders of Notes, pro rata based on the principal amount of the Notes then held
by such holders.
  

    
      
         

      

      
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    (b)           Insufficient Authorized
Shares.  If at any time while any of the Notes remain
outstanding the Company does not have a sufficient number of authorized and
unreserved shares of Common Stock to satisfy its obligation to reserve for
issuance upon conversion of the Notes at least a number of shares of Common
Stock equal to the Required Reserve Amount (an "Authorized Share Failure"),
then the Company shall immediately take all action necessary to increase the
Company's authorized shares of Common Stock to an amount sufficient to allow the
Company to reserve the Required Reserve Amount for the Notes then
outstanding.  Without limiting the generality of the foregoing
sentence, as soon as practicable after the date of the occurrence of an
Authorized Share Failure, but in no event later than sixty (60) days after the
occurrence of such Authorized Share Failure, the Company shall either (x) obtain
the written consent of its stockholders for the approval of an increase in the
number of authorized shares of Common Stock and provide each stockholder with an
information statement with respect thereto or (y) hold a meeting of its
stockholders for the approval of an increase in the number of authorized shares
of Common Stock; provided, that if the
SEC reviews the (i) proxy statement contemplated in clause (y) above or (ii) the
information statement contemplated in clause (x) above, then the sixty (60) day
period may be extended for an additional period not to exceed thirty (30)
days.  In connection with such meeting, the Company shall provide each
stockholder with a proxy statement and shall use its best efforts to solicit its
stockholders' approval of such increase in authorized shares of Common Stock and
to cause its Board of Directors to recommend to the stockholders that they
approve such proposal.

     

    (11)        REDEMPTIONS.

     

    (a)           Mechanics.  The
Company shall deliver the applicable Event of Default Redemption Price to the
Holder within five (5) Business Days after the Company's receipt of the Holder's
Event of Default Redemption Notice (the "Event of Default Redemption
Date").  If the Holder has submitted a Change of Control
Redemption Notice in accordance with Section 5(b), the Company shall deliver the
applicable Change of Control Redemption Price to the Holder (i) concurrently
with the consummation of such Change of Control if such notice is received prior
to the consummation of such Change of Control and (ii) within five (5) Business
Days after the Company's receipt of such notice otherwise (such date, the "Change of Control Redemption
Date").  In the event of a redemption of less than all of the
Conversion Amount of this Note, the Company shall promptly cause to be issued
and delivered to the Holder a new Note (in accordance with Section 16(d))
representing the outstanding Principal which has not been
redeemed.  In the event that the Company does not pay the applicable
Redemption Price to the Holder within the time period required, at any time
thereafter and until the Company pays such unpaid Redemption Price in full, the
Holder shall have the option, in lieu of redemption, to require the Company to
promptly return to the Holder all or any portion of this Note representing the
Conversion Amount that was submitted for redemption and for which the applicable
Redemption Price (together with any Late Charges thereon) has not been
paid.  Upon the Company's receipt of such notice, (x) the applicable
Redemption Notice shall be null and void with respect to such Conversion Amount,
(y) the Company shall immediately return this Note, or issue a new Note (in
accordance with Section 16(d)) to the Holder representing such Conversion Amount
to be redeemed and (z) the Conversion Price of this Note or such new Notes shall
be adjusted to the lesser of (A) the Conversion Price as in effect on the date
on which the applicable Redemption Notice is voided and (B) the lowest Closing
Bid Price of the shares of Common Stock during the period beginning on and
including the date on which the applicable Redemption Notice is delivered to the
Company and ending on and including the date on which the applicable Redemption
Notice is voided.  The Holder's delivery of a notice voiding a
Redemption Notice and exercise of its rights following such notice shall not
affect the Company's obligations to make any payments of Late Charges which have
accrued prior to the date of such notice with respect to the Conversion Amount
subject to such notice.
  

    
      
         

      

      
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    (b)           Redemption by Other
Holders.  Upon the Company's receipt of notice from any of the
holders of the Other Notes for redemption or repayment as a result of an event
or occurrence substantially similar to the events or occurrences described in
Section 4(b) or Section 5(b) (each, an "Other Redemption Notice"), the
Company shall immediately, but no later than one (1) Business Day of its receipt
thereof, forward to the Holder by facsimile a copy of such notice.  If
the Company receives a Redemption Notice and one or more Other Redemption
Notices, during the seven (7) Business Day period beginning on and including the
date which is three (3) Business Days prior to the Company's receipt of the
Holder's Redemption Notice and ending on and including the date which is three
(3) Business Days after the Company's receipt of the Holder's Redemption Notice
and the Company is unable to redeem all principal, interest and other amounts
designated in such Redemption Notice and such Other Redemption Notices received
during such seven (7) Business Day period, then the Company shall redeem a pro
rata amount from each holder of the Notes (including the Holder) based on the
principal amount of the Notes submitted for redemption pursuant to such
Redemption Notice and such Other Redemption Notices received by the Company
during such seven Business Day period.

     

    (12)        VOTING
RIGHTS.  The Holder shall have no voting rights as the holder
of this Note, except as provided by law and as expressly provided in this
Note.

     

    (13)        COVENANTS.

     

    (a)           Rank.  All
payments due under this Note shall rank (i) senior to
all the Company’s debt currently outstanding or hereafter created, unless
prohibited by law, other than as set forth in the immediately following clause
(ii); and (ii) pari
passu with
and be of equal priority to the: (x) 12% promissory notes that the Company
issued on December 8, 2008, January 30, 2009, May 4, 2009 and June 12, 2009 and
(y) all Other Notes, provided, that the terms of such Indebtedness set forth in
clauses (x) and (y) above are not increased, amended, modified, changed or
extended on or after the Issuance Date.
  

    
      
         

      

      
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    (b)           Incurrence of
Indebtedness.  So long as this Note is outstanding, the Company
shall not, and the Company shall not permit any of its Subsidiaries to, directly
or indirectly, incur or guarantee, assume or suffer to exist any Indebtedness,
other than: (i) Indebtedness set forth on Schedule 3(s) to the Securities
Purchase Agreement, provided, that the terms of such Indebtedness are not
increased, amended, modified, changed or extended on or after the Issuance Date;
(ii) Indebtedness evidenced by this Note and the Other Notes; (iii) unsecured
Indebtedness incurred by the Company that is made expressly subordinate in right
of payment to the Indebtedness evidenced by this Note, as reflected in a written
agreement acceptable to the Required Holders and approved by the Required
Holders in writing, and which Indebtedness does not provide at any time for (A)
the payment, prepayment, repayment, repurchase or defeasance, directly or
indirectly, of any principal or premium, if any, thereon until ninety-one (91)
days after the Maturity Date or later and (B) total interest and fees at a rate
in excess of 8% per annum; (iv) trade payables incurred in the ordinary course
of business consistent with past practice; and (v) Indebtedness contemplated to
be incurred by Jade Pharmaceuticals Inc. (the "Jade Indebtedness") and NuVax
Therapeutics, Inc. (the "NuVax
Indebtedness") as set forth on Schedule 13(g) hereto; provided, that (w)
the aggregate amount of Jade Indebtedness or NuVax Indebtedness outstanding at
any one time shall not exceed $2,000,000 for each of the Jade Indebtedness and
the NuVax Indebtedness, (x) neither the Jade Indebtedness nor the NuVax
Indebtedness shall at any time be incurred, guaranteed or assumed by the
Company; (y) if either the Jade Indebtedness or the NuVax Indebtedness is,
directly or indirectly, convertible or exchangeable into shares of Common Stock,
then the terms of such conversion or exchange shall be subject to the terms and
provisions of Section 7 hereof; and (z) if the issuance of any shares of Common
Stock upon any conversion or exchange provided for in the immediately preceding
clause (y) requires prior stockholder approval in accordance with the rules or
regulations of the Principal Market, then the Company shall not convert or
exchange such Indebtedness into shares of Common Stock and shall not issue
shares of Common Stock in connection with such conversion or exchange prior to
such stockholder approval.

     

    (c)           Existence of
Liens.  So long as this Note is outstanding, the Company shall
not, and the Company shall not permit any of its Subsidiaries to, directly or
indirectly, allow or suffer to exist any mortgage, lien, pledge, charge,
security interest or other encumbrance upon or in any property or assets
(including accounts and contract rights) owned by the Company or any of its
Subsidiaries (collectively, "Liens") other than Permitted
Liens.

     

    (d)           Cash
Dividend.  So long as this Note is outstanding, the Company
shall not, and the Company shall not permit any of its Subsidiaries to, directly
or indirectly, pay cash dividends or distributions on any equity securities of
the Company or of its Subsidiaries.

     

    (e)           Restricted
Payments.  The Company shall not, and the Company shall not
permit any of its Subsidiaries to, directly or indirectly, redeem, defease,
repurchase, repay or make any payments in respect of, by the payment of cash or
cash equivalents (in whole or in part, whether by way of open market purchases,
tender offers, private transactions or otherwise), all or any portion of any
Indebtedness (other than this Note, the Other Notes, the Jade Indebtedness and
the NuVax Indebtedness), whether by way of payment in respect of principal of
(or premium, if any) or interest on, such Indebtedness.

     

    (f)           Restriction on
Redemption.  Until all of the Notes have been converted,
redeemed or otherwise satisfied in accordance with their terms, the Company
shall not, directly or indirectly, redeem or repurchase its capital stock
without the prior express written consent of the Required Holders.

     

    (g)           Change in Nature of
Business.  The Company shall not make, or permit any of its
Subsidiaries to make, any change in the nature of its business as described in
the Company's most recent annual report filed on Form 10-K with the
SEC.  The Company shall not modify its purpose or, other than as set
forth in Schedule 13(g), which is incorporated herein by reference, the Company
shall not modify its corporate structure.
  

    
      
         

      

      
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    (h)           Intellectual
Property.  The Company shall not, and the Company shall not
permit any of its Subsidiaries, directly or indirectly, to encumber or allow any
Liens on, any of its copyright rights, copyright applications, copyright
registrations and like protections in each work of authorship and derivative
work, whether published or unpublished, any patents, patent applications and
like protections, including improvements, divisions, continuations, renewals,
reissues, extensions, and continuations-in-part of the same, trademarks, service
marks and, to the extent permitted under applicable law, any applications
therefor, whether registered or not, and the goodwill of the business of the
Company and its Subsidiaries connected with and symbolized thereby, know-how,
operating manuals, trade secret rights, rights to unpatented inventions, and any
claims for damage by way of any past, present, or future infringement of any of
the foregoing, other than Permitted Liens.

     

    (i)           Preservation of Existence,
Etc.  The Company shall maintain and preserve, and cause each
of its Subsidiaries to maintain and preserve, its existence, rights and
privileges, and become or remain, and cause each of its Subsidiaries to become
or remain, duly qualified and in good standing in each jurisdiction in which the
character of the properties owned or leased by it or in which the transaction of
its business makes such qualification necessary.

     

    (j)           Maintenance of Properties,
Etc.  The Company shall maintain and preserve, and cause each
of its Subsidiaries to maintain and preserve, all of its properties which are
necessary or useful in the proper conduct of its business in good working order
and condition, ordinary wear and tear excepted, and comply, and cause each of
its Subsidiaries to comply, at all times with the provisions of all leases to
which it is a party as lessee or under which it occupies property, so as to
prevent any loss or forfeiture thereof or thereunder.

     

    (k)           Maintenance of
Insurance.  The Company shall maintain, and cause each of its
Subsidiaries to maintain, insurance with responsible and reputable insurance
companies or associations (including, without limitation, comprehensive general
liability, hazard, rent and business interruption insurance) with respect to its
properties (including all real properties leased or owned by it) and business,
in such amounts and covering such risks as is required by any governmental
authority having jurisdiction with respect thereto or as is carried generally in
accordance with sound business practice by companies in similar businesses
similarly situated.

     

    (l)          
 Transactions
with Affiliates.  The Company shall not, nor shall it permit
any of its Subsidiaries to, enter into, renew, extend or be a party to, any
transaction or series of related transactions (including, without limitation,
the purchase, sale, lease, transfer or exchange of property or assets of any
kind or the rendering of services of any kind) with any Affiliate, except in the
ordinary course of business in a manner and to an extent consistent with past
practice (except as set forth in Schedule 13(g)) and necessary or desirable for
the prudent operation of its business, for fair consideration and on terms no
less favorable to it or its Subsidiaries than would be obtainable in a
comparable arm's length transaction with a Person that is not an Affiliate
thereof.

     

    (m)          Cash
Reserve.  So long as this Note is outstanding, the Company
shall maintain in its bank accounts at all times no less than $2,250,000 in
unrestricted cash that is not subject to any Liens.
  

    
      
         

      

      
        - 22
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    (n)           Distributions to
Subsidiaries.  So long as this Note is outstanding, the Company
shall not make any payments, transfers or other distributions of cash, cash
equivalents, any property or any other assets of the Company to Jade
Pharmaceuticals Inc. or NuVax Therapeutics, Inc.

     

    (o)           First Installment Date
Payment.  The Company and the Holder hereby agree that the
Company shall redeem the whole applicable Installment Amount in connection with
the first Installment Date and the Company shall pay the Holder in cash, in
immediately available funds, such Installment Amount on March 1, 2011 and the
Company shall not be entitled or required to provide any notice to the Holder in
connection with such Installment Amount.

     

    (14)        VOTE TO ISSUE, OR CHANGE THE
TERMS OF, NOTES.  The written consent of the Required Holders
shall be required for any change or amendment to any of the Notes, unless the
change shall only effect the Holder and the Company shall have offered such
change to all holders of Notes and complied with the requirement of the third to
last sentence of Section 9(e) of the Securities Purchase Agreement, in which
case only the consent of the Holder is required.

     

    (15)        TRANSFER.  This
Note and any shares of Common Stock issued upon conversion of this Note may be
offered, sold, assigned or transferred by the Holder without the consent of the
Company.

     

    (16)        REISSUANCE OF THIS
NOTE.

     

    (a)           Transfer.  If
this Note is to be transferred, the Holder shall surrender this Note to the
Company, whereupon the Company will forthwith issue and deliver upon the order
of the Holder a new Note (in accordance with Section 16(d)), registered as the
Holder may request, representing the outstanding Principal being transferred by
the Holder and, if less then the entire outstanding Principal is being
transferred, a new Note (in accordance with Section 16(d)) to the Holder
representing the outstanding Principal not being transferred.  The
Holder and any assignee, by acceptance of this Note, acknowledge and agree that,
by reason of the provisions of Section 3(c)(iii) following conversion or
redemption of any portion of this Note, the outstanding Principal represented by
this Note may be less than the Principal stated on the face of this
Note.

     

    (b)           Lost, Stolen or Mutilated
Note.  Upon receipt by the Company of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of
this Note, and, in the case of loss, theft or destruction, of any
indemnification undertaking by the Holder to the Company in customary form and,
in the case of mutilation, upon surrender and cancellation of this Note, the
Company shall execute and deliver to the Holder a new Note (in accordance with
Section 16(d)) representing the outstanding Principal.

     

    (c)           Note Exchangeable for
Different Denominations.  This Note is exchangeable, upon the
surrender hereof by the Holder at the principal office of the Company, for a new
Note or Notes (in accordance with Section 16(d) and in principal amounts of at
least $100,000) representing in the aggregate the outstanding Principal of this
Note, and each such new Note will represent such portion of such outstanding
Principal as is designated by the Holder at the time of such
surrender.
  

    
      
         

      

      
        - 23
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    (d)           Issuance of New
Notes.  Whenever the Company is required to issue a new Note
pursuant to the terms of this Note, such new Note (i) shall be of like tenor
with this Note, (ii) shall represent, as indicated on the face of such new Note,
the Principal remaining outstanding (or in the case of a new Note being issued
pursuant to Section 16(a) or Section 16(c), the Principal designated by the
Holder which, when added to the principal represented by the other new Notes
issued in connection with such issuance, does not exceed the Principal remaining
outstanding under this Note immediately prior to such issuance of new Notes),
(iii) shall have an issuance date, as indicated on the face of such new Note,
which is the same as the Issuance Date of this Note, (iv) shall have the same
rights and conditions as this Note, and (v) shall represent accrued and unpaid
Late Charges, if any, on the Principal of this Note, from the Issuance
Date.

     

    (17)        REMEDIES, CHARACTERIZATIONS,
OTHER OBLIGATIONS, BREACHES AND INJUNCTIVE RELIEF.  The
remedies provided in this Note shall be cumulative and in addition to all other
remedies available under this Note and any of the other Transaction Documents at
law or in equity (including a decree of specific performance and/or other
injunctive relief), and nothing herein shall limit the Holder's right to pursue
actual and consequential damages for any failure by the Company to comply with
the terms of this Note.  Amounts set forth or provided for herein with
respect to payments, conversion and the like (and the computation thereof) shall
be the amounts to be received by the Holder and shall not, except as expressly
provided herein, be subject to any other obligation of the Company (or the
performance thereof).  The Company acknowledges that a breach by it of
its obligations hereunder will cause irreparable harm to the Holder and that the
remedy at law for any such breach may be inadequate.  The Company
therefore agrees that, in the event of any such breach or threatened breach, the
Holder shall be entitled, in addition to all other available remedies, to an
injunction restraining any breach, without the necessity of showing economic
loss and without any bond or other security being required.

     

    (18)        PAYMENT OF COLLECTION,
ENFORCEMENT AND OTHER COSTS.  If (a) this Note is placed in the
hands of an attorney for collection or enforcement or is collected or enforced
through any legal proceeding or the Holder otherwise takes action to collect
amounts due under this Note or to enforce the provisions of this Note or (b)
there occurs any bankruptcy, reorganization, receivership of the Company or
other proceedings affecting Company creditors' rights and involving a claim
under this Note, then the Company shall pay the costs incurred by the Holder for
such collection, enforcement or action or in connection with such bankruptcy,
reorganization, receivership or other proceeding, including, but not limited to,
attorneys' fees and disbursements.

     

    (19)        CONSTRUCTION;
HEADINGS.  This Note shall be deemed to be jointly drafted by
the Company and all the Purchasers and shall not be construed against any person
as the drafter hereof.  The headings of this Note are for convenience
of reference and shall not form part of, or affect the interpretation of, this
Note.
  

    
      
         

      

      
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    (20)        FAILURE OR INDULGENCE NOT
WAIVER.  No failure or delay on the part of the Holder in the
exercise of any power, right or privilege hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any such power, right or
privilege preclude other or further exercise thereof or of any other right,
power or privilege.

     

    (21)        DISPUTE
RESOLUTION.  In the case of a dispute as to the determination
of the Closing Bid Price, the Closing Sale Price or the Weighted Average Price
or the arithmetic calculation of the Conversion Rate, the Conversion Price or
any Redemption Price, the Company shall submit the disputed determinations or
arithmetic calculations via facsimile within one (1) Business Day of receipt, or
deemed receipt, of the Conversion Notice or Redemption Notice or other event
giving rise to such dispute, as the case may be, to the Holder.  If
the Holder and the Company are unable to agree upon such determination or
calculation within one (1) Business Day of such disputed determination or
arithmetic calculation being submitted to the Holder, then the Company shall,
within one Business Day submit via facsimile (a) the disputed determination of
the Closing Bid Price, the Closing Sale Price or the Weighted Average Price to
an independent, reputable investment bank selected by the Holder and approved by
the Company, such approval not to be unreasonably withheld, or (b) the disputed
arithmetic calculation of the Conversion Rate, Conversion Price or any
Redemption Price to the Company's independent, outside
accountant.  The Company shall cause the investment bank or the
accountant, as the case may be, to perform the determinations or calculations
and notify the Company and the Holder of the results no later than five (5)
Business Days from the time it receives the disputed determinations or
calculations.  Such investment bank's or accountant's determination or
calculation, as the case may be, shall be binding upon all parties absent
demonstrable error.  The party whose calculation is furthest from the
investment bank's or accountant's determination or calculation, as the case may
be, shall be obligated to pay the fees and expenses of such investment bank or
accountant.

     

    (22)        NOTICES;
PAYMENTS.

     

    (a)           Notices.  Whenever
notice is required to be given under this Note, unless otherwise provided
herein, such notice shall be given in accordance with Section 9(f) of the
Securities Purchase Agreement.  The Company shall provide the Holder
with prompt written notice of all actions taken pursuant to this Note, including
in reasonable detail a description of such action and the reason
therefore.  Without limiting the generality of the foregoing, the
Company shall give written notice to the Holder (i) immediately upon any
adjustment of the Conversion Price, setting forth in reasonable detail, and
certifying, the calculation of such adjustment and (ii) at least twenty (20)
days prior to the date on which the Company closes its books or takes a record
(A) with respect to any dividend or distribution upon the Common Stock, (B) with
respect to any pro rata subscription offer to holders of Common Stock or (C) for
determining rights to vote with respect to any Fundamental Transaction,
dissolution or liquidation, provided in each case that such information shall be
made known to the public prior to or in conjunction with such notice being
provided to the Holder.
  

    
      
         

      

      
        - 25
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    (b)           Payments.  Except
as otherwise provided in this Note, whenever any payment of cash is to be made
by the Company to any Person pursuant to this Note, such payment shall be made
in lawful money of the United States of America by a check drawn on the account
of the Company and sent via overnight courier service to such Person at such
address as previously provided to the Company in writing (which address, in the
case of each of the Purchasers, shall initially be as set forth on the Schedule
of Buyers attached to the Securities Purchase Agreement); provided, that the
Holder may elect to receive a payment of cash via wire transfer of immediately
available funds by providing the Company with prior written notice setting out
such request and the Holder's wire transfer instructions.  Whenever
any amount expressed to be due by the terms of this Note is due on any day which
is not a Business Day, the same shall instead be due on the next succeeding day
which is a Business Day.  Any amount of Principal or other amounts due
under the Transaction Documents which is not paid when due shall result in a
late charge being incurred and payable by the Company in an amount equal to
interest on such amount at the rate of twenty four percent (24%) per annum from
the date such amount was due until the same is paid in full ("Late Charge").

     

    (23)        CANCELLATION.  After
all Principal and other amounts at any time owed on this Note have been paid in
full, this Note shall automatically be deemed canceled, shall be surrendered to
the Company for cancellation and shall not be reissued.

     

    (24)       WAIVER OF
NOTICE.  To the extent permitted by law, the Company hereby
waives demand, notice, protest and all other demands and notices in connection
with the delivery, acceptance, performance, default or enforcement of this Note
and the Securities Purchase Agreement.

     

    (25)       GOVERNING LAW; JURISDICTION; JURY
TRIAL.  This Note shall be construed and enforced in accordance
with, and all questions concerning the construction, validity, interpretation
and performance of this Note shall be governed by, the internal laws of the
State of New York, without giving effect to any choice of law or conflict of law
provision or rule (whether of the State of New York or any other jurisdictions)
that would cause the application of the laws of any jurisdictions other than the
State of New York.  The Company hereby irrevocably submits to the
exclusive jurisdiction of the state and federal courts sitting in The City of
New York, Borough of Manhattan, for the adjudication of any dispute hereunder or
in connection herewith or with any transaction contemplated hereby or discussed
herein, and hereby irrevocably waives, and agrees not to assert in any suit,
action or proceeding, any claim that it is not personally subject to the
jurisdiction of any such court, that such suit, action or proceeding is brought
in an inconvenient forum or that the venue of such suit, action or proceeding is
improper.  The Company hereby irrevocably waives personal service of
process and consents to process being served in any such suit, action or
proceeding by mailing a copy thereof to such party at the address it set forth
on the signature page hereto and agrees that such service shall constitute good
and sufficient service of process and notice thereof.  Nothing
contained herein shall be deemed to limit in any way any right to serve process
in any manner permitted by law.  Nothing contained herein shall be
deemed or operate to preclude the Holder from bringing suit or taking other
legal action against the Company in any other jurisdiction to collect on the
Company's obligations to the Holder, to realize on any collateral or any other
security for such obligations, or to enforce a judgment or other court ruling in
favor of the Holder.  THE COMPANY HEREBY IRREVOCABLY WAIVES
ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE
ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF
THIS NOTE OR ANY TRANSACTION CONTEMPLATED HEREBY.
 

    
      
         

      

      
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    (26)       
CURRENCY.  All
principal, interest and other amounts owing under this Note or any Transaction
Document that, in accordance with their terms, are paid in cash shall be paid in
US dollars.  All amounts denominated in other currencies shall be
converted in the US dollar equivalent amount in accordance with the Exchange
Rate on the date of calculation.

     

    (27)       
SEVERABILITY.
If any provision of this Note is prohibited by law or otherwise determined to be
invalid or unenforceable by a court of competent jurisdiction, the provision
that would otherwise be prohibited, invalid or unenforceable shall be deemed
amended to apply to the broadest extent that it would be valid and enforceable,
and the invalidity or unenforceability of such provision shall not affect the
validity of the remaining provisions of this Note so long as this Note as so
modified continues to express, without material change, the original intentions
of the parties as to the subject matter hereof and the prohibited nature,
invalidity or unenforceability of the provision(s) in question does not
substantially impair the respective expectations or reciprocal obligations of
the parties or the practical realization of the benefits that would otherwise be
conferred upon the parties.  The parties will endeavor in good faith
negotiations to replace the prohibited, invalid or unenforceable provision(s)
with a valid provision(s), the effect of which comes as close as possible to
that of the prohibited, invalid or unenforceable provision(s).

     

    (28)       
CERTAIN
DEFINITIONS.  For purposes of this Note, the following terms
shall have the following meanings:

     

    (a)           "Affiliate" means, with respect
to any Person, any other Person that directly or indirectly controls, is
controlled by, or is under common control with, such Person, it being understood
for purposes of this definition that "control" of a Person means the power
directly or indirectly either to vote 10% or more of the stock having ordinary
voting power for the election of directors of such Person or direct or cause the
direction of the management and policies of such Person whether by contract or
otherwise.

     

    (b)          "Approved Stock Plan" means any
stock option plan which has been approved by the Board of Directors of the
Company, pursuant to which the Company's securities may be issued to any
employee, officer or director for services provided to the Company; provided that the
issuance price, exercise price or deemed issuance or exercise price, for any
securities issued pursuant to such a plan is equal to or exceeds the then
existing exercise price for the Series A Warrants (as defined in the Securities
Purchase Agreement).

     

    (c)           "Bloomberg" means Bloomberg
Financial Markets.

     

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

     

    (e)           "Change of Control" means any
Fundamental Transaction other than (i) any reorganization, recapitalization or
reclassification of the Common Stock in which holders of the Company's voting
power immediately prior to such reorganization, recapitalization or
reclassification continue after such reorganization, recapitalization or
reclassification to hold publicly traded securities and, directly or indirectly,
are, in all material respect, the holders of the voting power of the surviving
entity (or entities with the authority or voting power to elect the members of
the board of directors (or their equivalent if other than a corporation) of such
entity or entities) after such reorganization, recapitalization or
reclassification or (ii) pursuant to a migratory merger effected solely for the
purpose of changing the jurisdiction of incorporation of the
Company.
  

    
      
         

      

      
        - 27
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    (f)           "Closing Bid Price" and "Closing Sale Price" means, for
any security as of any date, the last closing bid price and last closing trade
price, respectively, for such security on the Principal Market, as reported by
Bloomberg, or, if the Principal Market begins to operate on an extended hours
basis and does not designate the closing bid price or the closing trade price,
as the case may be, then the last bid price or last trade price, respectively,
of such security prior to 4:00:00 p.m., New York Time, as reported by Bloomberg,
or, if the Principal Market is not the principal securities exchange or trading
market for such security, the last closing bid price or last trade price,
respectively, of such security on the principal securities exchange or trading
market where such security is listed or traded as reported by Bloomberg, or if
the foregoing do not apply, the last closing bid price or last trade price,
respectively, of such security in the over-the-counter market on the electronic
bulletin board for such security as reported by Bloomberg, or, if no closing bid
price or last trade price, respectively, is reported for such security by
Bloomberg, the average of the bid prices, or the ask prices, respectively, of
any market makers for such security as reported in the "pink sheets" by Pink
Sheets LLC (formerly the National Quotation Bureau, Inc.).  If the
Closing Bid Price or the Closing Sale Price cannot be calculated for a security
on a particular date on any of the foregoing bases, the Closing Bid Price or the
Closing Sale Price, as the case may be, of such security on such date shall be
the fair market value as mutually determined by the Company and the
Holder.  If the Company and the Holder are unable to agree upon the
fair market value of such security, then such dispute shall be resolved pursuant
to Section 21.  All such determinations to be appropriately adjusted
for any stock dividend, stock split, stock combination, reclassification or
similar transaction during the applicable calculation period.

     

    (g)          "Closing Date" shall have the
meaning set forth in the Securities Purchase Agreement, which date is the date
the Company initially issued Notes pursuant to the terms of the Securities
Purchase Agreement.

     

    (h)          "Company Conversion Price"
means as of any date of determination, that price which shall be the lowest of
(i) the applicable Conversion Price, (ii) the applicable Company Pre-Installment
Conversion Price and (iii) the Market Price as of the applicable Installment
Date.

     

    (i)           "Company Pre-Installment Conversion
Price" means, with respect to any Company Installment Notice Date, that
price which shall be the lower of (i) the applicable Conversion Price and (ii)
the Market Price as of the applicable Company Installment Notice
Date.

     

    (j)           "Contingent Obligation" means,
as to any Person, any direct or indirect liability, contingent or otherwise, of
that Person with respect to any Indebtedness, lease, dividend or other
obligation of another Person if the primary purpose or intent of the Person
incurring such liability, or the primary effect thereof, is to provide assurance
to the obligee of such liability that such liability will be paid or discharged,
or that any agreements relating thereto will be complied with, or that the
holders of such liability will be protected (in whole or in part) against loss
with respect thereto.
  

    
      
         

      

      
        - 28
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    (k)           "Conversion Shares" means
shares of Common Stock issuable by the Company upon the conversion of any of the
Notes.

     

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

     

    (m)         "Eligible Market" means the
Principal Market, The New York Stock Exchange, Inc., The NASDAQ Capital Market,
The NASDAQ Global Market, The NASDAQ Global Select Market, or the OTC Bulletin
Board.

     

    (n)          "Equity Conditions" means each
of the following conditions:  (i) on each day during the period
beginning thirty (30) Trading Days prior to the applicable date of determination
and ending on and including the applicable date of determination (the "Equity Conditions Measuring
Period"), either (x) the Registration Statement (as defined in the
Registration Rights Agreement, the "Registration Statement") filed
pursuant to the Registration Rights Agreement shall be effective and available
for the resale of all remaining Registrable Securities in accordance with the
terms of the Registration Rights Agreement and there shall not have been any
Grace Periods (as defined in the Registration Rights Agreement) or (y) all
shares of Common Stock issuable upon conversion of the Notes and exercise of the
Warrants shall be eligible for sale without restriction and without the need for
registration under any applicable federal or state securities laws, including
but not limited to Rule 144 under the Securities Act of 1933 and without the
requirement to be in compliance with Rule 144(c)(1) (or any successor thereto)
under the Securities Act of 1933; (ii) on each day during the Equity Conditions
Measuring Period the Common Stock is designated for quotation on the Principal
Market or any other Eligible Market and shall not have been suspended from
trading on such exchange or market (other than suspensions of not more than two
(2) days and occurring prior to the applicable date of determination due to
business announcements by the Company) nor shall delisting or suspension by such
exchange or market been threatened, commenced or pending either (A) in writing
by such exchange or market or (B) by falling below the then effective minimum
listing maintenance requirements of such exchange or market; (iii) on each day
during the Equity Conditions Measuring Period, the Company shall have delivered
Conversion Shares upon conversion of the Notes and Warrant Shares upon exercise
of the Warrants to the holders on a timely basis as set forth in Section 3(c)
hereof (and analogous provisions under the Other Notes) and Sections 1(a) of the
Warrants; (iv) any applicable shares of Common Stock to be issued in connection
with the event requiring determination may be issued in full without violating
Section 3(d)(i) and (ii) hereof and the rules or regulations of the Principal
Market or any other applicable Eligible Market; (v) during the Equity Conditions
Measuring Period, the Company shall not have failed to timely make any payments
within five (5) Business Days of when such payment is due pursuant to any
Transaction Document; (vi) during the Equity Conditions Measuring Period, there
shall not have occurred either (A) the public announcement of a pending,
proposed or intended Fundamental Transaction which has not been abandoned,
terminated or consummated, (B) an Event of Default or (C) an event that with the
passage of time or giving of notice would constitute an Event of Default; (vii)
the Company shall have no knowledge of any fact that would cause (x) the
Registration Statements required pursuant to the Registration Rights Agreement
not to be effective and available for the resale of all remaining Registrable
Securities in accordance with the terms of the Registration Rights Agreement or
(y) any shares of Common Stock issuable upon conversion of the Notes and shares
of Common Stock issuable upon exercise of the Warrants not to be eligible for
sale without restriction pursuant to Rule 144 and without the requirement to be
in compliance with Rule 144(c)(1) (or any successor thereto) promulgated under
the 1933 Act and any applicable state securities laws; (viii) the Company
otherwise shall have been in compliance with and shall not have breached any
provision, covenant, representation or warranty of any Transaction Document;
(ix) the Principal Market Stockholder Approval and the Authorized Share
Stockholder Approval shall have occurred; and (x) immediately prior to and after
the issuance by the Company of Pre-Installment Conversion Shares and
Post-Installment Conversion Shares, the Company shall have available out of its
authorized and unissued Common Stock 100% of the number of shares of Common
Stock as shall from time to time be necessary to effect the conversion of all of
the Notes then outstanding at the then applicable Conversion Price and to effect
the exercise of all of the Warrants then outstanding at the then applicable
Exercise Price (as defined in the Warrant).
  

    
      
         

      

      
        - 29
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    (o)           "Equity Conditions Failure"
means that on any day during the period commencing ten (10) Trading Days prior
to the applicable date of determination through the applicable date of
determination, the Equity Conditions have not been satisfied (or waived in
writing by the Holder).

     

    (p)           "Exchange Rate" means, in
relation to any amount of currency to be converted into US dollars pursuant to
this Note, the US dollar exchange rate as published in the Wall Street Journal
on the relevant date of calculation (it being understood and agreed that where
an amount is calculated with reference to, or over, a period of time, the date
of calculation shall be the final date of such period of time).

     

    (q)           "Excluded
Securities" means any shares of Common Stock issued or issuable: (i) in
connection with any Approved Stock Plan; provided that the option term, exercise
price or similar provisions of any issuances pursuant to such Approved Stock
Plan are not amended, modified or changed on or after the Subscription Date;
(ii) upon exercise of any of the Warrants or conversion of any of the Other
Notes, provided, that neither the terms of the Other Notes nor the terms of the
Warrants are amended, modified or changed on or after the Subscription Date to
lower the conversion price, amortization price or exercise price of any such
securities, to extend the term of any such securities or otherwise in any manner
that adversely affects, or could reasonably be expected to adversely affect, the
Holder; (iii) in connection with up to 1,163,793 warrants issued to the
Placement Agent on the terms set forth on Schedule 4(n)(i)(5) of the Securities
Purchase Agreement; provided that the terms of such warrants are not amended,
modified or changed on or after the date hereof to lower the exercise price,
extend the term thereof or otherwise in any other matter that adversely affects,
or could reasonably be expected to adverse affect the Holder and provided,
further, that the shares of Common Stock underlying such warrants are
not reserved by the Company out of the authorized and unissued shares of
Common Stock and are not issuable or issued until the Company
obtains the Principal Market Stockholder Approval and the
Authorized Share Stockholder Approval; and provided,
further, that the shares of Common Stock underlying such warrants are not
registered until all of the Registrable Securities are registered; (iv)
upon exercise of any Options or Convertible Securities which are outstanding on
the day immediately preceding the Subscription Date, provided that the terms of
such Options or Convertible Securities are not amended, modified or changed on
or after the Subscription Date to lower the conversion price, amortization price
or exercise price of any such securities, to extend the term of any such
securities or otherwise in any manner that adversely affects, or could
reasonably be expected to adverse affect, the Holder; and (v) in connection with
mergers, acquisitions, strategic licensing arrangements, strategic business
partnerships or joint ventures, in each case with non-affiliated third parties
and otherwise on an arm's-length basis, the purpose of which is not to raise
additional capital; provided, that such third parties are not granted any
registration rights.  Notwithstanding the foregoing, any Common Stock
issued or issuable to raise capital for the Company or its Subsidiaries,
directly or indirectly, in connection with any transaction contemplated by
clause (v) above, including, without limitation, securities issued in one or
more related transactions or that result in similar economic consequences, shall
not be deemed to be Excluded Securities.
  

    
      
         

      

      
        - 30
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    (r)           "Fundamental Transaction" means
that (A) the Company shall, directly or indirectly, in one or more related
transactions, (i) consolidate or merge with or into (whether or not the Company
is the surviving corporation) another Person or Persons, or (ii) sell, assign,
transfer, convey or otherwise dispose of all or substantially all of the
properties or assets of the Company to another Person, or (iii) allow another
Person to make a purchase, tender or exchange offer that is accepted by the
holders of more than the 50% of the outstanding shares of Voting Stock (not
including any shares of Voting Stock held by the Person or Persons making or
party to, or associated or affiliated with the Persons making or party to, such
purchase, tender or exchange offer), or (iv) consummate a stock purchase
agreement or other business combination (including, without limitation, a
reorganization, recapitalization, spin-off or scheme of arrangement) with
another Person whereby such other Person acquires more than the 50% of the
outstanding shares of Voting Stock (not including any shares of Voting Stock
held by the other Person or other Persons making or party to, or associated or
affiliated with the other Persons making or party to, such stock purchase
agreement or other business combination), (v) reorganize, recapitalize or
reclassify its Common Stock or (B) any "person" or "group" (as these terms are
used for purposes of Sections 14(d) and 15(d) of the Exchange Act) is or shall
become the "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of 50% of the aggregate ordinary voting power
represented by issued and outstanding Common Stock.

     

    (s)           "GAAP" means United States
generally accepted accounting principles, consistently applied.

     

    (t)           "Holder Pro Rata Amount" means
a fraction (i) the numerator of which is the Principal amount of this Note on
the Closing Date and (ii) the denominator of which is the aggregate principal
amount of all Notes issued to the initial purchasers pursuant to the Securities
Purchase Agreement on the Closing Date.
  

    
      
         

      

      
        - 31
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    (u)           "Indebtedness" of any Person
means, without duplication (i) all indebtedness for borrowed money, (ii) all
obligations issued, undertaken or assumed as the deferred purchase price of
property or services, including (without limitation) "capital leases" in
accordance with GAAP (other than trade payables entered into in the ordinary
course of business), (iii) all reimbursement or payment obligations with respect
to letters of credit, surety bonds and other similar instruments, (iv) all
obligations evidenced by notes, bonds, debentures or similar instruments,
including obligations so evidenced incurred in connection with the acquisition
of property, assets or businesses, (v) all indebtedness created or arising under
any conditional sale or other title retention agreement, or incurred as
financing, in either case with respect to any property or assets acquired with
the proceeds of such indebtedness (even though the rights and remedies of the
seller or bank under such agreement in the event of default are limited to
repossession or sale of such property), (vi) all monetary obligations under any
leasing or similar arrangement which, in connection with GAAP, consistently
applied for the periods covered thereby, is classified as a capital lease, (vii)
all indebtedness referred to in clauses (i) through (vi) above secured by (or
for which the holder of such Indebtedness has an existing right, contingent or
otherwise, to be secured by) any mortgage, lien, pledge, charge, security
interest or other encumbrance upon or in any property or assets (including
accounts and contract rights) owned by any Person, even though the Person which
owns such assets or property has not assumed or become liable for the payment of
such indebtedness, and (viii) all Contingent Obligations in respect of
indebtedness or obligations of others of the kinds referred to in clauses (i)
through (vii) above.

     

    (v)           "Installment Amount" means with
respect to any Installment Date, the lesser of (A) the product of (i) $843,750
multiplied by (ii) the Holder Pro Rata Amount and (B) the outstanding Principal
amount under this Note as of such Installment Date, as any such Installment
Amount may be reduced pursuant to the terms of this Note, whether upon
conversion, redemption or otherwise, together with, in each case the sum of any
accrued and unpaid accrued and unpaid Late Charges, if any, with respect to such
Principal amount.  In the event the Holder shall sell or otherwise
transfer any portion of this Note, the transferee shall be allocated a pro rata
portion of each unpaid Installment Amount hereunder.

     

    (w)           "Installment Balance Conversion
Shares" means, for any Installment Date, a number of shares of Common
Stock equal to (i) the Post-Installment Conversion Shares for such date minus
(ii) the amount of any Pre-Installment Conversion Shares delivered in respect of
the applicable Installment Date; provided, that in the
event that the amount of Pre-Installment Conversion Shares exceeds the
Post-Installment Shares for such date, the Installment Balance Conversion Shares
shall equal zero (0) for such date.

     

    (x)           "Installment Date" means the
first (1st) Business Day of each month beginning on March 1, 2011 through and
including the Maturity Date.

     

    (y)           "Market Price" means 90% of the
arithmetic average of the six (6) lowest Weighted Average Prices of the shares
of Common Stock during the twenty (20) consecutive Trading Day period ending two
(2) Trading Days immediately preceding such date (the "Measuring
Period").  All such determinations to be appropriately adjusted
for any stock split, stock dividend, stock combination or other similar
transaction during such Measuring Period.

     

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

    
      
         

      

      
        - 32
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    (aa)         "Option Value" means the value
of an Option based on the Black and Scholes Option Pricing model obtained from
the "OV" function on Bloomberg determined as of the day prior to the public
announcement of the applicable Option for pricing purposes and reflecting (i) a
risk-free interest rate corresponding to the U.S. Treasury rate for a period
equal to the remaining term of the applicable Option as of the applicable date
of determination, (ii) an expected volatility equal to the greater of 100% and
the 100 day volatility obtained from the HVT function on Bloomberg as of the day
immediately following the public announcement of the applicable Option, (iii)
the underlying price per share used in such calculation shall be the highest
Weighted Average Price during the period beginning on the day prior to the
execution of definitive documentation relating to the issuance of the applicable
Option and the public announcement of such issuance and (iv) a 360 day
annualization factor.

     

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

     

    (cc)         "Permitted Liens" means (i) any
Lien for taxes not yet due or delinquent or being contested in good faith by
appropriate proceedings for which adequate reserves have been established in
accordance with GAAP, (ii) any statutory Lien arising in the ordinary course of
business by operation of law with respect to a liability that is not yet due or
delinquent, (iii) any Lien created by operation of law, such as materialmen's
liens, mechanics' liens and other similar liens, arising in the ordinary course
of business with respect to a liability that is not yet due or delinquent or
that are being contested in good faith by appropriate proceedings, (iv) Liens
(A) upon or in any equipment acquired or held by the Company or any of its
Subsidiaries to secure the purchase price of such equipment or indebtedness
incurred solely for the purpose of financing the acquisition or lease of such
equipment, or (B) existing on such equipment at the time of its acquisition,
provided that the Lien is confined solely to the property so acquired and
improvements thereon, and the proceeds of such equipment, (v) Liens incurred in
connection with the extension, renewal or refinancing of the indebtedness
secured by Liens of the type described in clause (iv) above, provided that any
extension, renewal or replacement Lien shall be limited to the property
encumbered by the existing Lien and the principal amount of the Indebtedness
being extended, renewed or refinanced does not increase, (vi) leases or
subleases and licenses and sublicenses granted to others in the ordinary course
of the Company's business, not interfering in any material respect with the
business of the Company and its Subsidiaries taken as a whole, (vii) Liens
in favor of customs and revenue authorities arising as a matter of law to secure
payments of custom duties in connection with the importation of goods, and
(viii) Liens arising from judgments, decrees or attachments in circumstances not
constituting an Event of Default under Section 4(a)(ix).

     

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

     

    (ee)         "Post-Installment Conversion
Shares" means, for any Installment Date, that number of shares of Common
Stock equal to the applicable Company Conversion Amount on such Installment Date
divided by the Company Conversion Price (without taking into account the
delivery of any Pre-Installment Conversion Shares), rounded up to the nearest
whole share of Common Stock.
  

    
      
         

      

      
        - 33
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    (ff)          "Principal Market" means NYSE
Amex.

     

    (gg)        "Redemption Notices" means,
collectively, the Event of Default Redemption Notices and the Change of Control
Redemption Notices, each of the foregoing, individually, a Redemption
Notice.

     

    (hh)        "Redemption Prices" means,
collectively, the Event of Default Redemption Price and the Change of Control
Redemption Price, each of the foregoing, individually, a Redemption
Price.

     

    (ii)           "Registration Rights Agreement"
means that certain registration rights agreement dated as of the Subscription
Date by and among the Company and the initial holders of the Notes relating to,
among other things, the registration of the resale of the Common Stock issuable
upon conversion of the Notes and exercise of the Warrants.

     

    (jj)           "Required Holders" means the
holders of Notes representing at least sixty (60%) of the aggregate principal
amount of the Notes then outstanding.

     

    (kk)         "SEC" means the United States
Securities and Exchange Commission.

     

    (ll)           "Securities Purchase Agreement"
means that certain securities purchase agreement dated as of the Subscription
Date, by and among the Company and the initial holders of the Notes pursuant to
which the Company issued the Notes and Warrants.

     

    (mm)       "Subscription Date" means
January 30, 2011.

     

    (nn)        "Successor Entity" means the
Person, which may be the Company, formed by, resulting from or surviving any
Fundamental Transaction or the Person with which such Fundamental Transaction
shall have been made, provided that if such Person is not a publicly traded
entity whose common stock or equivalent equity security is quoted or listed for
trading on an Eligible Market, Successor Entity shall mean such Person's Parent
Entity.

     

    (oo)        "Trading Day" means any day on
which the Common Stock is traded on the Principal Market, or, if the Principal
Market is not the principal trading market for the Common Stock, then on the
principal securities exchange or securities market on which the Common Stock is
then traded; provided that "Trading Day" shall not include any day on which the
Common Stock is scheduled to trade on such exchange or market for less than 4.5
hours or any day that the Common Stock is suspended from trading during the
final hour of trading on such exchange or market (or if such exchange or market
does not designate in advance the closing time of trading on such exchange or
market, then during the hour ending at 4:00:00 p.m., New York
Time).
  

    
      
         

      

      
        - 34
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    (pp)        "Voting Stock" of a Person
means capital stock of such Person of the class or classes pursuant to which the
holders thereof have the general voting power to elect, or the general power to
appoint, at least a majority of the board of directors, managers or trustees of
such Person (irrespective of whether or not at the time capital stock of any
other class or classes shall have or might have voting power by reason of the
happening of any contingency).

     

    (qq)        "Warrants" has the meaning
ascribed to such term in the Securities Purchase Agreement, and shall include
all warrants issued in exchange therefor or replacement thereof.

     

    (rr)          "Warrant Shares" means shares
of Common Stock issuable by the Company upon the conversion of any of the
Warrants.

     

    (ss)         "Weighted Average Price" means,
for any security as of any date, the dollar volume-weighted average price for
such security on the Principal Market during the period beginning at 9:30:01
a.m., New York Time (or such other time as the Principal Market publicly
announces is the official open of trading), and ending at 4:00:00 p.m., New York
Time (or such other time as the Principal Market publicly announces is the
official close of trading) as reported by Bloomberg through its "Volume at
Price" functions, or, if the foregoing does not apply, the dollar
volume-weighted average price of such security in the over-the-counter market on
the electronic bulletin board for such security during the period beginning at
9:30:01 a.m., New York Time (or such other time as such market publicly
announces is the official open of trading), and ending at 4:00:00 p.m., New York
Time (or such other time as such market publicly announces is the official close
of trading) as reported by Bloomberg, or, if no dollar volume-weighted average
price is reported for such security by Bloomberg for such hours, the average of
the highest closing bid price and the lowest closing ask price of any of the
market makers for such security as reported in the "pink sheets" by Pink Sheets
LLC (formerly the National Quotation Bureau, Inc.).  If the Weighted
Average Price cannot be calculated for a security on a particular date on any of
the foregoing bases, the Weighted Average Price of such security on such date
shall be the fair market value as mutually determined by the Company and the
Holder.  If the Company and the Holder are unable to agree upon the
fair market value of such security, then such dispute shall be resolved pursuant
to Section 21.  All such determinations to be appropriately adjusted
for any stock dividend, stock split, stock combination, reclassification or
similar transaction during the applicable calculation period.
 

    
      
         

      

      
        - 35
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    (29)           DISCLOSURE. Upon
receipt or delivery by the Company of any notice in accordance with the terms of
this Note, unless the Company has in good faith determined that the matters
relating to such notice do not constitute material, nonpublic information
relating to the Company or its Subsidiaries, the Company shall within one (1)
Business Day after any such receipt or delivery publicly disclose such material,
nonpublic information on a Report of Foreign Issuer on Form 8-K or
otherwise.  In the event that the Company believes that a notice
contains material, nonpublic information relating to the Company or its
Subsidiaries, the Company so shall indicate to such Holder contemporaneously
with delivery of such notice, and in the absence of any such indication, the
Holder shall be allowed to presume that all matters relating to such notice do
not constitute material, nonpublic information relating to the Company or its
Subsidiaries.

     

    [Signature
Page Follows]
  

    
      
         

      

      
        - 36
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    IN
WITNESS WHEREOF, the Company has caused this Note to be duly executed as of the
Issuance Date set out above.

      

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              	 	
                                      RADIENT
      PHARMACEUTICALS CORPORATION

                                    
	 	 
	
                                       

                                    	By:	
                                       
          

                                    
	 
      	 	
                                      Name:

                                    
	 
      	 	
                                      Title:

                                    

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    EXHIBIT
I

    

    RADIENT
PHARMACEUTICALS CORPORATION

    CONVERSION
NOTICE

     

    Reference
is made to the Convertible Note (the "Note") issued to the
undersigned by Radient Pharmaceuticals Corporation, a Delaware corporation (the
"Company").  In
accordance with and pursuant to the Note, the undersigned hereby elects to
convert the Conversion Amount (as defined in the Note) of the Note indicated
below into shares of Common Stock par value par value $0.001 per share (the
"Common Stock") of the
Company, as of the date specified below.

     

    
      
        
          
            
              
                	
                        Date
      of Conversion:
      ___________________________________________________________________________

                      
	 
      
	
                        Aggregate
      Conversion Amount to be converted:
      _____________________________________________________

                      
	 
      
	
                        Please
      confirm the following information:

                      
	 
      
	
                        Conversion
      Price:
      ____________________________________________________________________________

                      
	 
      
	
                        Number
      of shares of Common Stock to be issued:
      ____________________________________________________

                      
	 
      
	
                        Please
      issue the Common Stock into which the Note is being converted in the
      following name and to the following address:

                      
	 
      
	
                        Issue
      to: 
      ___________________________________________________________________________________

                      
	 
	
                                                      
      ___________________________________________________________________________________ 

                      
	 
	                               ___________________________________________________________________________________   
      
	 
      
	
                        Facsimile
      Number: 
      ____________________________________________________________________________

                      
	 
      
	
                        Tax
      ID or SS#:
      _______________________________________________________________________________

                      
	 
      
	
                        Authorization:
      _______________________________________________________________________________

                      
	 
      
	
                        By:
      ____________________________________________________________________________________

                      
	 
      
	
                         
      Title:
      ________________________________________________________________________________

                      
	 
      
	
                        Dated:
      ____________________________________________________________________________________________

                      
	 
      
	
                        Account
      Number:
      ____________________________________________________________________________

                      
	
                          (if
      electronic book entry transfer)

                      
	 
      
	
                        Transaction
      Code Number:
      _____________________________________________________________________

                      
	
                          (if
      electronic book entry transfer)

                      

              

            

          

        

      

    

     

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    ACKNOWLEDGMENT

     

    The
Company hereby acknowledges this Conversion Notice and hereby directs Corporate
Stock Transfer, Inc. to issue the above indicated number of shares of Common
Stock in accordance with the Transfer Agent Instructions dated
January [__], 2011 from the Company and acknowledged and agreed to by
Corporate Stock Transfer, Inc.

      

    
      	 	
              RADIENT
      PHARMACEUTICALS CORPORATION

            
	 	 
	
                   

            	By:	
               
          
      

            
	 
      	 	
              Name:

            
	 
      	 	
              Title:Unassociated Document

    FORM
OF SERIES [A] [B] WARRANT

     

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

     

    RADIENT
PHARMACEUTICALS CORPORATION

     

    Warrant
To Purchase Common Stock

     

    Warrant
No.: ____________

    Number of
Shares of Common Stock:_____________

    Date of
Issuance:  January [___], 2011 ("Issuance Date")

     

    Radient
Pharmaceuticals Corporation, a Delaware corporation (the "Company"), hereby certifies
that, for good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, [BUYER], the registered holder hereof or its permitted
assigns (the "Holder"),
is entitled, subject to the terms set forth below, to purchase from the Company,
at the Exercise Price (as defined below) then in effect, at any time or times on
or after the Initial Exercisability Date (as defined below), but not after 11:59
p.m., New York time, on the Expiration Date, (as defined below), ______________
(_____________)1
fully paid nonassessable shares of Common Stock, par value $0.001 per share,
subject to adjustment as provided herein (the "Warrant
Shares").  Except as otherwise defined herein, capitalized
terms in this Warrant to Purchase Common Stock (including any Warrants to
Purchase Common Stock issued in exchange, transfer or replacement hereof, this
"Warrant"), shall have
the meanings set forth in Section 18.  This Warrant is one of the
Warrants to purchase Common Stock (the "SPA Warrants") issued pursuant
to Section 1 of that certain Securities Purchase Agreement, dated as of January
30, 2011 (the "Subscription
Date"), by and among the Company and the investors (the "Buyers") referred to therein
(the "Securities Purchase
Agreement").  Capitalized terms used herein and not otherwise
defined shall have the definitions ascribed to such terms in the Securities
Purchase Agreement.

     

    
      
        

      

    

    
      1 [SERIES A: Insert the number
equal to the quotient determined by dividing the aggregate principal amount of
SPA Securities issued to the Holder pursuant to the Securities Purchase
Agreement by the initial Conversion Price (as defined in the SPA Securities).]
[SERIES B: Insert the
number equal to 50% of the quotient determined by dividing the aggregate
principal amount of SPA Securities issued to the Holder pursuant to the
Securities Purchase Agreement by the initial Conversion Price (as defined in the
SPA Securities).]

      

        
          
             

          

          
            
            

            
              

            

          

          
             

          

        

      

    

     

    1.           EXERCISE OF
WARRANT.

     

    (a)           Mechanics of
Exercise.  Subject to the terms and conditions hereof
(including, without limitation, the limitations set forth in Section 1(f)), this
Warrant may be exercised by the Holder on any time or times on or after the
Initial Exercisability Date, in whole or in part, by (i) delivery of a
written notice, in the form attached hereto as Exhibit A (the "Exercise Notice"), of the
Holder's election to exercise this Warrant and (ii) (A) payment to the
Company of an amount equal to the applicable Exercise Price multiplied by the
number of Warrant Shares as to which this Warrant is being exercised (the "Aggregate Exercise Price") in
cash or by wire transfer of immediately available funds or (B) by notifying the
Company that this Warrant is being exercised pursuant to a Cashless Exercise (as
defined in Section 1(d)).  The Holder shall not be required to deliver
the original Warrant in order to effect an exercise
hereunder.  Execution and delivery of the Exercise Notice with respect
to less than all of the Warrant Shares shall have the same effect as
cancellation of the original Warrant and issuance of a new Warrant evidencing
the right to purchase the remaining number of Warrant Shares.  On or
before the first (1st)
Trading Day following the date on which the Company has received the Exercise
Notice, the Company shall transmit by facsimile an acknowledgment of
confirmation of receipt of the Exercise Notice to the Holder and the Company's
transfer agent (the "Transfer
Agent").  On or before the third (3rd)
Trading Day following the date on which the Company has received the Exercise
Notice (the "Share Delivery
Date"), so long as the Holder delivers the Aggregate Exercise Price (or
notice of a Cashless Exercise) on or prior to the second (2nd)
Trading Day following the date on which the Company has received the Exercise
Notice, the Company shall (X) provided that the Transfer Agent is participating
in The Depository Trust Company ("DTC") Fast Automated
Securities Transfer Program, upon the request of the Holder, credit such
aggregate number of Warrant Shares to which the Holder is entitled pursuant to
such exercise to the Holder's or its designee's balance account with DTC through
its Deposit / Withdrawal At Custodian system, or (Y) if the Transfer Agent is
not participating in the DTC Fast Automated Securities Transfer Program, issue
and dispatch by overnight courier to the address as specified in the Exercise
Notice, a certificate, registered in the Company's share register in the name of
the Holder or its designee, for the number of shares of Common Stock to which
the Holder is entitled pursuant to such exercise.  The Company shall
be responsible for all fees and expenses of the Transfer Agent and all fees and
expenses with respect to the issuance of Warrant Shares via DTC, if
any.  Upon delivery of the Exercise Notice, the Holder shall be deemed
for all corporate purposes to have become the holder of record of the Warrant
Shares with respect to which this Warrant has been exercised, irrespective of
the date such Warrant Shares are credited to the Holder's DTC account or the
date of delivery of the certificates evidencing such Warrant Shares, as the case
may be.  If this Warrant is submitted in connection with any exercise
pursuant to this Section 1(a) and the number of Warrant Shares represented by
this Warrant submitted for exercise is greater than the number of Warrant Shares
being acquired upon an exercise, then the Company shall as soon as practicable
and in no event later than three (3) Trading Days after any exercise and at its
own expense, issue a new Warrant (in accordance with Section 8(d)) representing
the right to purchase the number of Warrant Shares issuable immediately prior to
such exercise under this Warrant, less the number of Warrant Shares with respect
to which this Warrant is exercised.  No fractional shares of Common
Stock are to be issued upon the exercise of this Warrant, but rather the number
of shares of Common Stock to be issued shall be rounded up to the nearest whole
number.  The Company shall pay any and all taxes which may be payable
with respect to the issuance and delivery of Warrant Shares upon exercise of
this Warrant.  Following the exercise in full of this Warrant, the
Holder shall deliver this original Warrant certificate to the
Company.

     

    
      
         

      

      
        - 2
-

        
          

        

      

      
         

      

    

    (b)           Exercise
Price.  For purposes of this Warrant, "Exercise Price" means
$[    ]2, subject to adjustment as
provided herein.

     

    (c)           Company's Failure to Timely
Deliver Securities.  If the Company shall fail for any reason
or for no reason to issue to the Holder within three (3) Trading Days of receipt
of the Exercise Notice so long as the Holder delivers the Aggregate Exercise
Price (or notice of a Cashless Exercise) on or prior to the second (2nd)
Trading Day following the date on which the Company has received the Exercise
Notice, a certificate for the number of shares of Common Stock to which the
Holder is entitled and register such shares of Common Stock on the Company's share register or
to credit the Holder's balance account
with DTC for such number of shares of Common Stock to which the Holder is
entitled upon the Holder's exercise of this
Warrant, then, in addition to all other remedies available to the Holder, the
Company shall pay in cash to the Holder on each day after such third (3rd)
Trading Day that the issuance of such shares of Common Stock is not timely
effected an amount equal to 1.5% of the product of (A) the sum of the number of
shares of Common Stock not issued to the Holder on a timely basis and to which
the Holder is entitled and (B) the Closing Sale Price of the Common Stock on the
Trading Day immediately preceding the last possible date which the Company could
have issued such shares of Common Stock to the Holder without violating Section
1(a).  In addition to the foregoing, if within three (3) Trading Days
after the Company's receipt of the
facsimile copy of an Exercise Notice the Company shall fail to issue and deliver
a certificate to the Holder and register such shares of Common Stock on the
Company's share
register or credit the Holder's balance account
with DTC for the number of shares of Common Stock to which the Holder is
entitled upon the Holder's exercise hereunder
or pursuant to the Company's obligation
pursuant to clause (ii) below, and if on or after such Trading Day the Holder
purchases (in an open market transaction or otherwise) shares of Common Stock to
deliver in satisfaction of a sale by the Holder of shares of Common Stock
issuable upon such exercise that the Holder anticipated receiving from the
Company (a "Buy-In"),
then the Company shall, within three (3) Trading Days after the Holder's request and in the
Holder's
discretion, either (i) pay cash to the Holder in an amount equal to the
Holder's total
purchase price (including brokerage commissions and other reasonable
out-of-pocket expenses, if any) for the shares of Common Stock so purchased (the
"Buy-In Price"), at
which point the Company's obligation to
deliver such certificate (and to issue such shares of Common Stock) or credit
such Holder's
balance account with DTC shall terminate, or (ii) promptly honor its obligation
to deliver to the Holder a certificate or certificates representing such shares
of Common Stock or credit such Holder's balance account
with DTC and pay cash to the Holder in an amount equal to the excess (if any) of
the Buy-In Price over the product of (A) such number of shares of Common Stock,
times (B) the Closing Bid Price on the date of exercise. Nothing shall limit the
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 shares of Common Stock (or to electronically deliver
such shares of Common Stock) upon the exercise of this Warrant as required
pursuant to the terms hereof.

     

    
      

    
      2 Insert
price equal to [SERIES
A: $0.67] [SERIES
B: $0.8175]

    

    
      
         

      

      
        - 3
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    (d)           Cashless Exercise.
 Notwithstanding
anything contained herein to the contrary, if the Registration Statement (as
defined in the Securities Purchase Agreement) covering the issuance of the
Warrant Shares that are subject to the Exercise Notice (the "Unavailable Warrant Shares")
is not available for the issuance of such Unavailable Warrant Shares, the Holder
may exercise this Warrant in whole or in part and, in lieu of making the cash
payment otherwise contemplated to be made to the Company upon such exercise in
payment of the Aggregate Exercise Price, elect instead to receive upon such
exercise the "Net Number" of shares of Common Stock determined according to the
following formula (a "Cashless
Exercise"):

     

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

                                                                                   
D

     

    For
purposes of the foregoing formula:

     

    
      
        	
              	
                A=

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

              

      

    

     

    
      
        	
              	
                B=

              	      
                the
      Weighted Average Price of the Common
      Stock on the date immediately preceding the date of the Exercise
      Notice.

              

      

       

    

    
      
        	
              	
                C=

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

              

      

    

     

    
      
        	
              	
                D=

              	
                the
      Closing Sale Price of the Common Stock on the date of the Exercise
      Notice.

              

      

    

     

    For
purposes of Rule 144(d) promulgated under the 1933 Act, as in effect on the date
hereof, it is intended that the Warrant Shares issued in a Cashless Exercise
shall be deemed to have been acquired by the Holder, and the holding period for
the Warrant Shares shall be deemed to have commenced, on the date this Warrant
was originally issued pursuant to the Securities Purchase
Agreement.

     

    (e)           Disputes.  In
the case of a dispute as to the determination of the Exercise Price or the
arithmetic calculation of the Warrant Shares, the Company shall promptly issue
to the Holder the number of Warrant Shares that are not disputed and resolve
such dispute in accordance with Section 13.

     

    
      
         

      

      
        - 4
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    (f)           Limitations on
Exercises.  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 4.99% (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 preferred stock or
warrants) subject to a limitation on conversion or exercise analogous to the
limitation contained herein.  Except as set forth in the preceding
sentence, for purposes of this paragraph, beneficial ownership shall be
calculated in accordance with Section 13(d) of the Securities Exchange Act of
1934, as amended (the "1934
Act").  For purposes of 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 (1) the Company's most recent Form
10-K, Form 10-Q, Current Report on Form 8-K or other public filing with the
Securities and Exchange Commission, as the case may be, (2) a more recent public
announcement by the Company or (3) any other notice by the Company or the
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 one (1) Business Day confirm
orally and in writing 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 the SPA Warrants, 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 not in excess of 9.99% 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 and not to any other holder of SPA
Warrants.  The provisions of this paragraph shall be construed and
implemented in a manner otherwise than in strict conformity with the terms of
this Section 1(f) to correct this paragraph (or any portion hereof) which may be
defective or inconsistent with the intended beneficial ownership limitation
herein contained or to make changes or supplements necessary or desirable to
properly give effect to such limitation.

     

    
      
         

      

      
        - 5
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    (g)           Insufficient Authorized
Shares.  [SERIES A: (A) If at any time
while this Warrant remains outstanding and prior to the time the Authorized
Share Stockholder Approval (as defined in the Securities Purchase Agreement) is
obtained, the Company does not have a sufficient number of authorized and
unreserved shares of Common Stock to satisfy its obligation to reserve for
issuance upon exercise of this Warrant at least a number of shares of Common
Stock equal to 100% of the number of shares of Common Stock (the "Initial Required Reserve
Amount") as shall from time to time be necessary to effect the exercise
of all of this Warrant then outstanding (a "Initial Authorized Share
Failure"), or (B) if][SERIES B: If] at any time
while this Warrant remains outstanding and following the time the Authorized
Share Stockholder Approval is obtained, the Company does not have a sufficient
number of authorized and unreserved shares of Common Stock to satisfy its
obligation to reserve for issuance upon exercise of this Warrant at least a
number of shares of Common Stock equal to 130% of the number of shares of Common
Stock (the [SERIES A:
"Subsequent Required
Reserve Amount", and each of the Initial Required Reserve Amount and the
Subsequent Required Reserve Amount, a ]"Required Reserve Amount") as
shall from time to time be necessary to effect the exercise of all of this
Warrant then outstanding ([SERIES A: a "Subsequent Authorized Share
Failure", and each of the Initial Authorized Share Failure and the
Subsequent Authorized Share Failure, ]an " Authorized Share Failure ")
then the Company shall immediately take all action necessary to increase the
Company's
authorized shares of Common Stock to an amount sufficient to allow the Company
to reserve the applicable Required Reserve Amount for this Warrant then
outstanding.  Without limiting the generality of the foregoing
sentence, as soon as practicable after the date of the occurrence of an
Authorized Share Failure, but in no event later than sixty (60) days after the
occurrence of such Authorized Share Failure, the Company shall either (x) hold a
meeting of its stockholders for the approval of an increase in the number of
authorized shares of Common Stock or (y) obtain the written consent of its
stockholders for the approval of an increase in the number of authorized shares
of Common Stock and provide each stockholder with an information statement with
respect thereto; provided, that if the
SEC reviews the (i) proxy statement contemplated in clause (x) above or (ii) the
information statement contemplated in clause (y) above, then the
sixty  (60) day period may be extended for an additional period not to
exceed thirty (30) days.  In connection with such meeting, the Company
shall provide each stockholder with a proxy statement and shall use its best
efforts to solicit its stockholders' approval of such
increase in authorized shares of Common Stock and to cause its board of
directors to recommend to the stockholders that they approve such
proposal.

     

    2.           ADJUSTMENT OF EXERCISE PRICE
AND NUMBER OF WARRANT SHARES.  The Exercise Price and the
number of Warrant Shares shall be adjusted from time to time as
follows:

     

    (a)           Adjustment Upon Issuance of
Shares of Common Stock.  If and whenever on or after the
Subscription Date, the Company issues or sells, or in accordance with this
Section 2 is deemed to have issued or sold, any shares of Common Stock
(including the issuance or sale of shares of Common Stock owned or held by or
for the account of the Company, but excluding shares of Common Stock deemed to
have been issued by the Company in connection with any Excluded Securities) for
a consideration per share (the "New Issuance Price") less than
a price (the "Applicable
Price") equal to the Exercise Price in effect immediately prior to such
issue or sale or deemed issuance or sale (the foregoing a "Dilutive Issuance"), then
immediately after such Dilutive Issuance, the Exercise Price then in effect
shall be reduced to an amount equal to the New Issuance Price.  Upon
each such adjustment of the Exercise Price hereunder (except pursuant to Section
2(e)), the number of Warrant Shares issuable immediately prior to such Dilutive
Issuance shall be adjusted to the number of shares of Common Stock determined by
multiplying the Exercise Price then in effect immediately prior to such
adjustment by the number of Warrant Shares acquirable upon exercise of this
Warrant immediately prior to such adjustment and dividing the product thereof by
the Exercise Price resulting from such adjustment.  For purposes of
determining the adjusted Exercise Price under this Section 2(a), the following
shall be applicable:

     

    
      
         

      

      
        - 6
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    (i)           Issuance of
Options.  If the Company in any manner grants any Options and
the lowest price per share for which one share of Common Stock is issuable upon
the exercise of any such Option or upon conversion, exercise or exchange of any
Convertible Securities issuable upon exercise of any such Option is less than
the Applicable Price, then such share of Common Stock shall be deemed to be
outstanding and to have been issued and sold by the Company at the time of the
granting or sale of such Option for such price per share.  For
purposes of this Section 2(a)(i), the "lowest price per share for which one
share of Common Stock is issuable upon exercise of such Options or upon
conversion, exercise or exchange of such Convertible Securities issuable upon
exercise of any such Option" shall be equal to the sum of the lowest amounts of
consideration (if any) received or receivable by the Company with respect to any
one share of Common Stock upon the granting or sale of the Option, upon exercise
of the Option and upon conversion, exercise or exchange of any Convertible
Security issuable upon exercise of such Option less any consideration paid or
payable by the Company with respect to such one share of Common Stock upon the
granting or sale of such Option, upon exercise of such Option and upon
conversion exercise or exchange of any Convertible Security issuable upon
exercise of such Option.  No further adjustment of the Exercise Price
or number of Warrant Shares shall be made upon the actual issuance of such
shares of Common Stock or of such Convertible Securities upon the exercise of
such Options or upon the actual issuance of such shares of Common Stock upon
conversion, exercise or exchange of such Convertible Securities.

     

    (ii)           Issuance of Convertible
Securities.  If the Company in any manner issues or sells any
Convertible Securities and the lowest price per share for which one share of
Common Stock is issuable upon the conversion, exercise or exchange thereof is
less than the Applicable Price, then such share of Common Stock shall be deemed
to be outstanding and to have been issued and sold by the Company at the time of
the issuance or sale of such Convertible Securities for such price per
share.  For the purposes of this Section 2(a)(ii), the "lowest price
per share for which one share of Common Stock is issuable upon the conversion,
exercise or exchange thereof" shall be equal to the sum of the lowest amounts of
consideration (if any) received or receivable by the Company with respect to one
share of Common Stock upon the issuance or sale of the Convertible Security and
upon conversion, exercise or exchange of such Convertible Security less any
consideration paid or payable by the Company with respect to such one share of
Common Stock upon the issuance or sale of such Convertible Security and upon
conversion, exercise or exchange of such Convertible Security.  No
further adjustment of the Exercise Price or number of Warrant Shares shall be
made upon the actual issuance of such shares of Common Stock upon conversion,
exercise or exchange of such Convertible Securities, and if any such issue or
sale of such Convertible Securities is made upon exercise of any Options for
which adjustment of this Warrant has been or is to be made pursuant to other
provisions of this Section 2(a), no further adjustment of the Exercise Price or
number of Warrant Shares shall be made by reason of such issue or
sale.

     

    
      
         

      

      
        - 7
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    (iii)           Change in Option Price or
Rate of Conversion.  If the purchase price provided for in any
Options, the additional consideration, if any, payable upon the issue,
conversion, exercise or exchange of any Convertible Securities, or the rate at
which any Convertible Securities are convertible into or exercisable or
exchangeable for shares of Common Stock increases or decreases at any time, the
Exercise Price and the number of Warrant Shares in effect at the time of such
increase or decrease shall be adjusted to the Exercise Price and the number of
Warrant Shares which would have been in effect at such time had such Options or
Convertible Securities provided for such increased or decreased purchase price,
additional consideration or increased or decreased conversion rate, as the case
may be, at the time initially granted, issued or sold.  For purposes
of this Section 2(a)(iii), if the terms of any Option or Convertible Security
that was outstanding as of the date of issuance of this Warrant are increased or
decreased in the manner described in the immediately preceding sentence, then
such Option or Convertible Security and the shares of Common Stock deemed
issuable upon exercise, conversion or exchange thereof shall be deemed to have
been issued as of the date of such increase or decrease.  No
adjustment pursuant to this Section 2(a) shall be made if such adjustment would
result in an increase of the Exercise Price then in effect or a decrease in the
number of Warrant Shares.

     

    (iv)           Calculation of Consideration
Received.  In case any Option is issued in connection with the
issue or sale of other securities of the Company, together comprising one
integrated transaction, (x) the Options will be deemed to have been issued for
the Option Value of such Options and (y) the other securities issued or sold in
such integrated transaction shall be deemed to have been issued for the
difference of (I) the aggregate consideration received by the Company less any
consideration paid or payable by the Company pursuant to the terms of such other
securities of the Company, less (II) the Option Value.  If any shares
of Common Stock, Options or Convertible Securities are issued or sold or deemed
to have been issued or sold for cash, the consideration received therefor will
be deemed to be the net amount received by the Company therefor.  If
any shares of Common Stock, Options or Convertible Securities are issued or sold
for a consideration other than cash, the amount of such consideration received
by the Company will be the fair value of such consideration, except where such
consideration consists of securities, in which case the amount of consideration
received by the Company will be the Closing Sale Price of such security on the
date of receipt.  If any shares of Common Stock, Options or
Convertible Securities are issued to the owners of the non-surviving entity in
connection with any merger in which the Company is the surviving entity, the
amount of consideration therefor will be deemed to be the fair value of such
portion of the net assets and business of the non-surviving entity as is
attributable to such shares of Common Stock, Options or Convertible Securities,
as the case may be.  The fair value of any consideration other than
cash or securities will be determined jointly by the Company and the Required
Holders.  If such parties are unable to reach agreement within ten
(10) days after the occurrence of an event requiring valuation (the "Valuation Event"), the fair
value of such consideration will be determined within five (5) Trading Days
after the tenth (10th) day
following the Valuation Event by an independent, reputable appraiser jointly
selected by the Company and the Required Holders.  The determination
of such appraiser shall be final and binding upon all parties absent manifest
error and the fees and expenses of such appraiser shall be borne by the
Company.

     

    (v)           Record
Date.  If the Company takes a record of the holders of shares
of Common Stock for the purpose of entitling them (A) to receive a dividend
or other distribution payable in shares of Common Stock, Options or in
Convertible Securities or (B) to subscribe for or purchase shares of Common
Stock, Options or Convertible Securities, then such record date will be deemed
to be the date of the issue or sale of the shares of Common Stock deemed to have
been issued or sold upon the declaration of such dividend or the making of such
other distribution or the date of the granting of such right of subscription or
purchase, as the case may be.

     

    
      
         

      

      
        - 8
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    (b)           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.

     

    (c)           Adjustment Upon Subdivision
or Combination of Shares of Common Stock.  If the Company at
any time on or after the Subscription Date subdivides (by any stock split, stock
dividend, recapitalization or otherwise) one or more classes of its outstanding
shares of Common Stock into a greater number of shares, the Exercise Price in
effect immediately prior to such subdivision will be proportionately reduced and
the number of Warrant Shares will be proportionately increased.  If
the Company at any time on or after the Subscription Date  combines
(by combination, reverse stock split or otherwise) one or more classes of its
outstanding shares of Common Stock into a smaller number of shares, the Exercise
Price in effect immediately prior to such combination will be proportionately
increased and the number of Warrant Shares will be proportionately
decreased.  Any adjustment under this Section 2(c) shall become
effective at the close of business on the date the subdivision or combination
becomes effective.

     

    (d)           Other
Events.  If any event occurs of the type contemplated by the
provisions of this Section 2 but not expressly provided for by such provisions
(including, without limitation, the granting of stock appreciation rights,
phantom stock rights or other rights with equity features, but excluding
Excluded Securities), then the Company's Board of Directors
will make an appropriate adjustment in the Exercise Price and the number of
Warrant Shares so as to protect the rights of the Holder; provided that no such
adjustment pursuant to this Section 2(d) will increase the Exercise Price or
decrease the number of Warrant Shares as otherwise determined pursuant to this
Section 2.

     

    (e)           Additional Price
Adjustment.  If the arithmetic average of the Weighted Average
Prices for each of the ten (10) Trading Days immediately following the First
Determination Date (the "First
Adjustment Price") is less than the then existing Exercise Price, then on
the tenth (10th) Trading Day following the First Determination Date, the
Exercise Price then in effect shall be reduced (but in no event increased) to
the First Adjustment Price.  In addition, if at any time during the
period commencing on the six (6) month anniversary of the Issuance Date and
ending at such time that all of the Securities (as defined in the Securities
Purchase Agreement) may be sold without restriction or limitation pursuant to
Rule 144 and without the requirement to be in compliance with Rule 144(c)(1),
the Company shall fail for any reason to satisfy the current public information
requirement under Rule 144(c) (a "Public Reporting Failure"),
then if the arithmetic average of the Weighted Average Prices for each of the
ten (10) Trading Days immediately following the Second Determination Date (the
"Second Adjustment
Price") is less than the then existing Exercise Price, then on the on the
tenth (10th) Trading Day following the Second Determination Date, the Exercise
Price then in effect shall be reduced (but in no event increased) to the Second
Adjustment Price. For the avoidance of doubt, if any adjustment in this Section
2(e) would otherwise result in an increase in the Exercise Price hereunder, no
such adjustment shall be made.

     

    
      
         

      

      
        - 9
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    (f)           Exercise Floor
Price.  Unless and until such time as the Company obtains
stockholder approval for the issuance of all Securities (as defined in the
Securities Purchase Agreement) issued pursuant to the Securities Purchase
Agreement required by the rules and regulations of the Principal Market (for so
long as the Common Stock is listed or quoted on the Principal Market) (the
"Principal Market Stockholder
Approval"), no adjustment pursuant to Section 2 shall cause the Exercise
Price to be less than $0.67, as adjusted for any stock dividend, stock split,
stock combination, reclassification or similar transaction (the "Exercise Floor
Price").  Upon the receipt of such stockholder approval, any
adjustment to the Exercise Price that would have made pursuant to this Section 2
but for this Section 2(f) shall be made on the date of such
receipt.

     

    3.           RIGHTS UPON DISTRIBUTION OF
ASSETS.  If the Company shall declare or make any dividend or
other distribution of its assets (or rights to acquire its assets) to holders of
shares of Common Stock, by way of return of capital or otherwise (including,
without limitation, any distribution of cash, stock or other securities,
property or options by way of a dividend, spin off, reclassification, corporate
rearrangement, scheme of arrangement or other similar transaction) (a "Distribution"), at any time
after the issuance of this Warrant, then, in each such case, the Holder shall be
entitled to participate in such Distribution to the same extent that the Holder
would have participated therein if the Holder had held the number of shares of
Common Stock acquirable upon complete exercise of this Warrant (without regard
to any limitations on exercise hereof, including without limitation, the Maximum
Percentage) immediately before the date of which a record is taken for such
Distribution, or, if no such record is taken, the date as of which the record
holders of shares of Common Stock are to be determined for the participation in
such Distribution (provided, however, to the
extent that the Holder's right to participate in any such Distribution would
result in the Holder exceeding the Maximum Percentage, then the Holder shall not
be entitled to participate in such Distribution to such extent (or in the
beneficial ownership of any shares of Common Stock as a result of such
Distribution to such extent) and the portion of such Distribution shall be held
in abeyance for the benefit of the Holder until such time, if ever, as its right
thereto would not result in the Holder exceeding the Maximum
Percentage.

     

    4.           PURCHASE RIGHTS; FUNDAMENTAL
TRANSACTIONS.

     

    (a)           Purchase
Rights.  In addition to any adjustments pursuant to Section 2
above, if at any time the Company grants, issues or sells any Options,
Convertible Securities or rights to purchase stock, warrants, securities or
other property pro rata to the record holders of any class of Common Stock (the
"Purchase Rights"), then
the Holder will be entitled to acquire, upon the terms applicable to such
Purchase Rights, the aggregate Purchase Rights which the Holder could have
acquired if the Holder had held the number of shares of Common Stock acquirable
upon complete exercise of this Warrant (without regard to any limitations on
exercise hereof, including without limitation, the Maximum Percentage)
immediately before the date on which a record is taken for the grant, issuance
or sale of such Purchase Rights, or, if no such record is taken, the date as of
which the record holders of shares of Common Stock are to be determined for the
grant, issue or sale of such Purchase Rights (provided, however, that to the
extent that the Holder's right to participate in any such Purchase Right would
result in the Holder exceeding the Maximum Percentage, then the Holder shall not
be entitled to participate in such Purchase Right to such extent (or beneficial
ownership of such shares of Common Stock as a result of such Purchase Right to
such extent) and such Purchase Right to such extent shall be held in abeyance
for the Holder until such time, if ever, as its right thereto would not result
in the Holder exceeding the Maximum Percentage, at which time the Holder shall
be granted such right to the same extent as if there had been no such
limitation).

     

    
      
         

      

      
        - 10
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    (b)           Fundamental
Transactions.  The Company shall not enter into or be party to
a Fundamental Transaction unless (i) the Successor Entity assumes in writing all
of the obligations of the Company under this Warrant and the other Transaction
Documents in accordance with the provisions of this Section 4(b) pursuant to
written agreements in form and substance satisfactory to the Required Holders
and approved by the Required Holders prior to such Fundamental Transaction,
including agreements to deliver to each holder of the SPA Warrants in exchange
for such SPA Warrants a security of the Successor Entity evidenced by a written
instrument substantially similar in form and substance to this Warrant,
including, without limitation, an adjusted exercise price equal to the value for
the shares of Common Stock reflected by the terms of such Fundamental
Transaction, and exercisable for a corresponding number of shares of capital
stock equivalent to the shares of Common Stock acquirable and receivable upon
exercise of this Warrant (without regard to any limitations on the exercise of
this Warrant) prior to such Fundamental Transaction, and satisfactory to the
Required Holders and (ii) the Successor Entity (including its Parent
Entity) is a publicly traded corporation whose common stock is quoted on or
listed for trading on an Eligible Market.  Upon the occurrence of any
Fundamental Transaction, the Successor Entity shall succeed to, and be
substituted for (so that from and after the date of such Fundamental
Transaction, the provisions of this Warrant referring to the "Company" shall
refer instead to the Successor Entity), and may exercise every right and power
of the Company and shall assume all of the obligations of the Company under this
Warrant with the same effect as if such Successor Entity had been named as the
Company herein.  Upon consummation of the Fundamental Transaction, the
Successor Entity shall deliver to the Holder confirmation that there shall be
issued upon exercise of this Warrant at any time after the consummation of the
Fundamental Transaction, in lieu of the shares of Common Stock (or other
securities, cash, assets or other property) issuable upon the exercise of the
Warrant prior to such Fundamental Transaction, such shares of the publicly
traded common stock or common shares (or its equivalent) of the Successor Entity
(including its Parent Entity) which the Holder would have been entitled to
receive upon the happening of such Fundamental Transaction had this Warrant been
converted immediately prior to such Fundamental Transaction, as adjusted in
accordance with the provisions of this Warrant.  In addition to and
not in substitution for any other rights hereunder, prior to the consummation of
any Fundamental Transaction pursuant to which holders of shares of Common Stock
are entitled to receive securities or other assets with respect to or in
exchange for shares of Common Stock (a "Corporate Event"), the Company
shall make appropriate provision to insure that the Holder will thereafter have
the right to receive upon an exercise of this Warrant at any time after the
consummation of the Corporate Event but prior to the Expiration Date, in lieu of
shares of Common Stock (or other securities, cash, assets or other property)
purchasable upon the exercise of this Warrant prior to such Corporate Event,
such shares of stock, securities, cash, assets or any other property whatsoever
(including warrants or other purchase or subscription rights) which the Holder
would have been entitled to receive upon the happening of such Corporate Event
had this Warrant been exercised immediately prior to such Corporate
Event.  Provision made pursuant to the preceding sentence shall be in
a form and substance reasonably satisfactory to the Required
Holders.  The provisions of this Section shall apply similarly and
equally to successive Fundamental Transactions and Corporate Events and shall be
applied without regard to any limitations on the exercise of this
Warrant.

     

    
      
         

      

      
        - 11
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    (c)           Notwithstanding
the foregoing, in the event of a Fundamental Transaction, at the request of the
Holder delivered before the ninetieth (90th) day
after the consummation of such Fundamental Transaction, the Company (or the
Successor Entity) shall purchase this Warrant from the Holder by paying to the
Holder, within five (5) Business Days after such request (or, if later, on the
effective date of the Fundamental Transaction), cash in an amount equal to the
Black Scholes Value of the remaining unexercised portion of this Warrant on the
date of such Fundamental Transaction.

     

    5.           FORCED
EXERCISE.

     

    (a)           At
any time after the six-month anniversary of the Issuance Date (the “Trigger Date”), if (i) the
Weighted Average Price of the Common Stock for twenty (20) consecutive Trading
Days after the Trigger Date (the "Forced Exercise Measuring
Period") is equal to or greater than
$[     ]3 (subject to adjustment
for stock splits, stock dividends, recapitalizations, reorganizations,
reclassification, combinations, reverse stock splits or other similar events
after the Subscription Date with respect to the Common Stock); and (ii) there is
no Equity Conditions Failure (unless the Holder has waived such Equity
Conditions Failure) as of such date (clauses (i) and (ii), the "Forced Exercise Conditions"),
the Company may deliver a notice to the Holder (a "Forced Exercise Notice" and
the date such notice is received by the Holder, the "Forced Exercise Notice Date"),
of its irrevocable election to require the Holder to exercise up to 50% of the
then unexercised portion of this Warrant.  The Company shall set forth
the number of Warrant Shares to which the forced exercise relates in the Forced
Exercise Notice (the "Forced
Exercise Share Number"), which number shall not exceed 50% of the then
unexercised portion of this Warrant.  The date of such forced exercise
shall be the thirtieth (30th) Trading Day following the Forced Exercise Notice
Date (the "Forced Exercise
Date").  A Forced Exercise Notice may not be given more than
two (2) Trading Days after satisfaction of Forced Exercise Conditions and each
Forced Exercise Notice shall certify that the Forced Exercise Conditions have
been satisfied.  The forced exercise thereunder may only occur on the
Forced Exercise Date if each of the following shall be true: (i) there is no
Equity Conditions Failure (unless the Holder has waived such Equity Conditions
Failure); and (ii) the Weighted Average Price of the Common Stock is equal to or
greater than $[     ] 4 (subject to adjustment
for stock splits, stock dividends, recapitalizations, reorganizations,
reclassification, combinations, reverse stock splits or other similar events
after the Subscription Date with respect to the Common Stock) for twenty (20)
consecutive Trading Days immediately prior to the Forced Exercise Date (such
period, the "Forced Exercise
Bring Down Measuring Period," and clauses (i) and (ii), the "Forced Exercise Bring Down
Conditions").  The Company shall deliver to the Holder a notice
no later than 10:00 a.m., New York time, on the Forced Exercise Date (the "Bring-Down Notice"), which
notice shall certify whether or not the Forced Exercise Bring Down Conditions
have been satisfied.  If the Forced Exercise Bring Down Conditions
have not been satisfied at such time (and are not waived by the Holder), the
Forced Exercise Notice will be null and void, ab
initio.  Notwithstanding the foregoing, nothing in this
subsection shall prevent the Holder from exercising this Warrant, in whole or
part, on or prior to the Forced Exercise Date.  The Company covenants
and agrees that it will honor all Exercise Notices tendered from the time of
delivery of the Forced Exercise Notice through the Forced Exercise
Date.  If a Holder voluntarily exercises this Warrant after the time
of delivery of the Forced Exercise Notice for a number of Warrant Shares less
than the Forced Exercise Share Number, then the Forced Exercise Share Number
shall be reduced by the number of Warrant Shares exercised pursuant to such
voluntary exercise.  Upon an Equity Conditions Failure, the Holder may
revoke any Exercise Notice delivered after the Forced Exercise Notice is
received by the Holder and the Company, within one (1) Business Day of such
revocation, shall return the Aggregate Exercise Price applicable to any such
Exercise Notice(s) to the Holder by wire transfer of immediately available funds
and any SPA Warrants so exercised shall be deemed reinstated and returned to the
Holders, if applicable.  The Company shall not deliver more than one
Forced Exercise Notice.

    

      

    
      3 Insert
dollar amount equal to 200% of the initial Exercise Price. 

    

    
      4 Insert
dollar amount equal to 200% of the initial Exercise
Price.

    

    
      
         

      

      
        - 12
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    (b)           Pro Rata Forced Exercise
Requirement.  If the Company elects a Forced Exercise of this
Warrant pursuant to Section 5(a), then it must simultaneously take the same
action in the same proportion with respect to all of the SPA
Warrants.  If the Company elects a Forced Exercise of this Warrant
pursuant to Section 5(a) (or similar provisions under the other SPA Warrants)
with respect to less than all of the Warrant Shares then outstanding under this
Warrant, then the Company shall require a forced exercise of a number of Warrant
Shares from each of the holders of the SPA Warrants equal to each Holders' Pro
Rata Amount of the total number of Warrant Shares subject to such Forced
Exercise pursuant to all of the SPA Warrants (such fraction with respect to each
holder is referred to as its "Forced Exercise Allocation Percentage," and
such amount with respect to each holder is referred to as its "Pro Rata Forced Exercise
Amount"); provided, however, that in the
event that any holder's Pro Rata Forced Exercise Amount exceeds the outstanding
number of Warrant Shares of such holder's Warrant, then such excess Pro Rata
Forced Exercise Amount shall be allocated amongst the remaining holders of SPA
Warrants in accordance with the foregoing formula.  In the event that
the initial holder of any SPA Warrants shall sell or otherwise transfer any of
such holder's SPA Warrants, the transferee shall be allocated a pro rata portion
of such holder's Forced Exercise Allocation Percentage and the Pro Rata Forced
Exercise Amount.

     

    6.           NONCIRCUMVENTION.  The
Company hereby covenants and agrees that the Company will not, by amendment of
its Certificate of Incorporation or Bylaws, or through any reorganization,
transfer of assets, consolidation, merger, scheme of arrangement, dissolution,
issue or sale of securities, or any other voluntary action, avoid or seek to
avoid the observance or performance of any of the terms of this Warrant, and
will at all times in good faith carry out all the provisions of this Warrant and
take all action as may be required to protect the rights of the
Holder.  Without limiting the generality of the foregoing, the Company
(i) shall not increase the par value of any shares of Common Stock
receivable upon the exercise of this Warrant above the Exercise Price then in
effect, (ii) shall take all such actions as may be necessary or appropriate
in order that the Company may validly and legally issue fully paid and
nonassessable shares of Common Stock upon the exercise of this Warrant, and
(iii) (A) shall, until the Authorized Share Stockholder Approval is obtained and
so long as any of the SPA Warrants are outstanding, take all action necessary to
reserve and keep available out of its authorized and unissued shares of Common
Stock, solely for the purpose of effecting the exercise of the SPA Warrants,
100% of the number of shares of Common Stock as shall from time to time be
necessary to effect the exercise of the SPA Warrants then outstanding (without
regard to any limitations on exercise) and (B) shall, from and after the time
that the Authorized Share Stockholder Approval is obtained and so long as any of
the SPA Warrants are outstanding, take all action necessary to reserve and keep
available out of its authorized and unissued shares of Common Stock, solely for
the purpose of effecting the exercise of the SPA Warrants, 130% of the number of
shares of Common Stock as shall from time to time be necessary to effect the
exercise of the SPA Warrants then outstanding (without regard to any limitations
on exercise).

     

    
      
         

      

      
        - 13
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    7.           WARRANT HOLDER NOT DEEMED A
STOCKHOLDER.  Except as otherwise specifically provided herein,
the Holder, solely in such Person's capacity as a holder of this Warrant, shall
not be entitled to vote or receive dividends or be deemed the holder of share
capital of the Company for any purpose, nor shall anything contained in this
Warrant be construed to confer upon the Holder, solely in such Person's capacity
as the Holder of this Warrant, any of the rights of a stockholder of the Company
or any right to vote, give or withhold consent to any corporate action (whether
any reorganization, issue of stock, reclassification of stock, consolidation,
merger, conveyance or otherwise), receive notice of meetings, receive dividends
or subscription rights, or otherwise, prior to the issuance to the Holder of the
Warrant Shares which such Person is then entitled to receive upon the due
exercise of this Warrant.  In addition, nothing contained in this
Warrant shall be construed as imposing any liabilities on the Holder to purchase
any securities (upon exercise of this Warrant or otherwise) or as a stockholder
of the Company, whether such liabilities are asserted by the Company or by
creditors of the Company.  Notwithstanding this Section 7, the Company
shall provide the Holder with copies of the same notices and other information
given to the stockholders of the Company generally, contemporaneously with the
giving thereof to the stockholders.

     

    8.           REISSUANCE OF
WARRANTS.

     

    (a)           Transfer of
Warrant.  If this Warrant is to be transferred, the Holder
shall surrender this Warrant to the Company, whereupon the Company will
forthwith issue and deliver upon the order of the Holder a new Warrant (in
accordance with Section 8(d)), registered as the Holder may request,
representing the right to purchase the number of Warrant Shares being
transferred by the Holder and, if less than the total number of Warrant Shares
then underlying this Warrant is being transferred, a new Warrant (in accordance
with Section 8(d)) to the Holder representing the right to purchase the number
of Warrant Shares not being transferred.

     

    (b)           Lost, Stolen or Mutilated
Warrant.  Upon receipt by the Company of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of
this Warrant, and, in the case of loss, theft or destruction, of any
indemnification undertaking by the Holder to the Company in customary form and,
in the case of mutilation, upon surrender and cancellation of this Warrant, the
Company shall execute and deliver to the Holder a new Warrant (in accordance
with Section 8(d)) representing the right to purchase the Warrant Shares then
underlying this Warrant.

     

    
      
         

      

      
        - 14
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    (c)           Exchangeable for Multiple
Warrants.  This Warrant is exchangeable, upon the surrender
hereof by the Holder at the principal office of the Company, for a new Warrant
or Warrants (in accordance with Section 8(d)) representing in the aggregate the
right to purchase the number of Warrant Shares then underlying this Warrant, and
each such new Warrant will represent the right to purchase such portion of such
Warrant Shares as is designated by the Holder at the time of such surrender;
provided, however, that no SPA
Warrants for fractional shares of Common Stock shall be given.

     

    (d)           Issuance of New
Warrants.  Whenever the Company is required to issue a new
Warrant pursuant to the terms of this Warrant, such new Warrant (i) shall be of
like tenor with this Warrant, (ii) shall represent, as indicated on the face of
such new Warrant, the right to purchase the Warrant Shares then underlying this
Warrant (or in the case of a new Warrant being issued pursuant to Section 8(a)
or Section 8(c), the Warrant Shares designated by the Holder which, when added
to the number of shares of Common Stock underlying the other new Warrants issued
in connection with such issuance, does not exceed the number of Warrant Shares
then underlying this Warrant), (iii) shall have an issuance date, as indicated
on the face of such new Warrant which is the same as the Issuance Date, and (iv)
shall have the same rights and conditions as this Warrant.

     

    9.           NOTICES.  Whenever
notice is required to be given under this Warrant, unless otherwise provided
herein, such notice shall be given in accordance with Section 9(f) of the
Securities  Purchase Agreement.  The Company shall provide
the Holder with prompt written notice of all actions taken pursuant to this
Warrant, including in reasonable detail a description of such action and the
reason therefor.  Without limiting the generality of the foregoing,
the Company will give written notice to the Holder (i) immediately upon any
adjustment of the Exercise Price, setting forth in reasonable detail, and
certifying, the calculation of such adjustment and (ii) at least fifteen (15)
days prior to the date on which the Company closes its books or takes a record
(A) with respect to any dividend or distribution upon the shares of Common
Stock, (B) with respect to any grants, issuances or sales of any Options,
Convertible Securities or rights to purchase stock, warrants, securities or
other property to holders of shares of Common Stock or (C) for determining
rights to vote with respect to any Fundamental Transaction, dissolution or
liquidation; provided in each case
that such information shall be made known to the public prior to or in
conjunction with such notice being provided to the Holder.

     

    10.         AMENDMENT AND
WAIVER.  Except as otherwise provided herein, the provisions of
this Warrant may be amended and the Company may take any action herein
prohibited, or omit to perform any act herein required to be performed by it,
only if the Company has obtained the written consent of the Holder.

     

    
      
         

      

      
        - 15
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    11.         GOVERNING
LAW.  This Warrant shall be governed by and construed and
enforced in accordance with, and all questions concerning the construction,
validity, interpretation and performance of this Warrant shall be governed by,
the internal laws of the State of New York, without giving effect to any choice
of law or conflict of law provision or rule (whether of the State of New York or
any other jurisdictions) that would cause the application of the laws of any
jurisdictions other than the State of New York. The Company hereby irrevocably
submits to the exclusive jurisdiction of the state and federal courts sitting in
The City of New York, Borough of Manhattan, for the adjudication of any dispute
hereunder or in connection herewith or with any transaction contemplated hereby
or discussed herein, and hereby irrevocably waives, and agrees not to assert in
any suit, action or proceeding, any claim that it is not personally subject to
the jurisdiction of any such court, that such suit, action or proceeding is
brought in an inconvenient forum or that the venue of such suit, action or
proceeding is improper.  The Company hereby irrevocably waives
personal service of process and consents to process being served in any such
suit, action or proceeding by mailing a copy thereof to such party at the
address it set forth on the signature page hereto and agrees that such service
shall constitute good and sufficient service of process and notice thereof.
Nothing contained herein shall be deemed to limit in any way any right to serve
process in any manner permitted by law.  Nothing contained herein
shall be deemed or operate to preclude the Holder from bringing suit or taking
other legal action against the Company in any other jurisdiction to collect on
the Company's obligations to the Holder, to realize on any collateral or any
other security for such obligations, or to enforce a judgment or other court
ruling in favor of the Holder.  THE COMPANY HEREBY IRREVOCABLY WAIVES
ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE
ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF
THIS WARRANT OR ANY TRANSACTION CONTEMPLATED HEREBY.

     

    12.         CONSTRUCTION;
HEADINGS.  This Warrant shall be deemed to be jointly drafted
by the Company and all the Buyers and shall not be construed against any person
as the drafter hereof.  The headings of this Warrant are for
convenience of reference and shall not form part of, or affect the
interpretation of, this Warrant.

     

    13.         DISPUTE
RESOLUTION.  In the case of a dispute as to the determination
of the Exercise Price or the arithmetic calculation of the Warrant Shares, the
Company shall submit the disputed determinations or arithmetic calculations via
facsimile within two (2) Business Days of receipt of the Exercise Notice giving
rise to such dispute, as the case may be, to the Holder.  If the
Holder and the Company are unable to agree upon such determination or
calculation of the Exercise Price or the Warrant Shares within three (3)
Business Days of such disputed determination or arithmetic calculation being
submitted to the Holder, then the Company shall, within two (2) Business Days
submit via facsimile (a) the disputed determination of the Exercise Price to an
independent, reputable investment bank selected by the Company and approved by
the Holder  or (b) the disputed arithmetic calculation of the Warrant
Shares to the Company's independent, outside accountant.  The Company
shall cause the investment bank or the accountant, as the case may be, to
perform the determinations or calculations and notify the Company and the Holder
of the results no later than ten (10) Business Days from the time it receives
the disputed determinations or calculations.  Such investment bank's
or accountant's determination or calculation, as the case may be, shall be
binding upon all parties absent demonstrable error.  The party whose
calculation is furthest from the investment bank's or accountant's determination
or calculation, as the case may be, shall be obligated to pay the fees and
expenses of such investment bank or accountant.

     

    14.         REMEDIES, OTHER OBLIGATIONS,
BREACHES AND INJUNCTIVE RELIEF.  The remedies provided in this
Warrant shall be cumulative and in addition to all other remedies available
under this Warrant and the other Transaction Documents, at law or in equity
(including a decree of specific performance and/or other injunctive relief), and
nothing herein shall limit the right of the Holder to pursue actual damages for
any failure by the Company to comply with the terms of this
Warrant.  The Company acknowledges that a breach by it of its
obligations hereunder will cause irreparable harm to the Holder and that the
remedy at law for any such breach may be inadequate.  The Company
therefore agrees that, in the event of any such breach or threatened breach, the
holder of this Warrant shall be entitled, in addition to all other available
remedies, to an injunction restraining any breach, without the necessity of
showing economic loss and without any bond or other security being
required.

     

    
      
         

      

      
        - 16
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    15.         TRANSFER.   This
Warrant may be offered for sale, sold, transferred or assigned without the
consent of the Company, except as may otherwise be required by Section 2(g) of
the Securities  Purchase Agreement.

     

    16.         SEVERABILITY.   If
any provision of this Warrant is prohibited by law or otherwise determined to be
invalid or unenforceable by a court of competent jurisdiction, the provision
that would otherwise be prohibited, invalid or unenforceable shall be deemed
amended to apply to the broadest extent that it would be valid and enforceable,
and the invalidity or unenforceability of such provision shall not affect the
validity of the remaining provisions of this Warrant so long as this Warrant as
so modified continues to express, without material change, the original
intentions of the parties as to the subject matter hereof and the prohibited
nature, invalidity or unenforceability of the provision(s) in question does not
substantially impair the respective expectations or reciprocal obligations of
the parties or the practical realization of the benefits that would otherwise be
conferred upon the parties.  The parties will endeavor in good faith
negotiations to replace the prohibited, invalid or unenforceable provision(s)
with a valid provision(s), the effect of which comes as close as possible to
that of the prohibited, invalid or unenforceable provision(s).

     

    17.         CURRENCY.  All
amounts set forth in this Warrant that refer to dollars or $ shall refer to US
dollars.  All amounts denominated in other currencies shall be
converted in the US dollar equivalent amount in accordance with the Exchange
Rate on the date of calculation.

     

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

     

    (a)           "Approved Stock Plan" means any
stock option plan which has been approved by the Board of Directors of the
Company, pursuant to which the Company's securities may be issued to any
employee, officer or director for services provided to the Company; provided that the
issuance price, exercise price or deemed issuance or exercise price, for any
securities issued pursuant to such a plan is equal to or exceeds the then
existing exercise price for the Series A Warrants (as defined in the Securities
Purchase Agreement).

     

    (b)           "Black Scholes Value" means the
value of this Warrant based on the Black and Scholes Option Pricing Model
obtained from the "OV" function on Bloomberg determined as of the day
immediately following the public announcement of the applicable Fundamental
Transaction for pricing purposes and reflecting (i) a risk-free interest rate
corresponding to the U.S. Treasury rate for a period equal to the remaining term
of this Warrant as of such date of request, (ii) an expected volatility equal to
the greater of 100% and the 100 day volatility obtained from the HVT function on
Bloomberg as of the day immediately following the public announcement of the
applicable Fundamental Transaction, (iii) the underlying price per share used in
such calculation shall be the sum of the price per share being offered in cash,
if any, plus the value of any non-cash consideration, if any, being offered in
the Fundamental Transaction and (iv) a 360 day annualization
factor.

     

    
      
         

      

      
        - 17
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    (c)           "Bloomberg" means Bloomberg
Financial Markets.

     

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

     

    (e)           "Closing Bid Price" and "Closing Sale Price" means, for
any security as of any date, the last closing bid price and last closing trade
price, respectively, for such security on the Principal Market, as reported by
Bloomberg, or, if the Principal Market begins to operate on an extended hours
basis and does not designate the closing bid price or the closing trade price,
as the case may be, then the last bid price or the last trade price,
respectively, of such security prior to 4:00:00 p.m., New York time, as reported
by Bloomberg, or, if the Principal Market is not the principal securities
exchange or trading market for such security, the last closing bid price or last
trade price, respectively, of such security on the principal securities exchange
or trading market where such security is listed or traded as reported by
Bloomberg, or if the foregoing do not apply, the last closing bid price or last
trade price, respectively, of such security in the over-the-counter market on
the electronic bulletin board for such security as reported by Bloomberg, or, if
no closing bid price or last trade price, respectively, is reported for such
security by Bloomberg, the average of the bid prices, or the ask prices,
respectively, of any market makers for such security as reported in the "pink
sheets" by Pink Sheets LLC (formerly the National Quotation Bureau,
Inc.).  If the Closing Bid Price or the Closing Sale Price cannot be
calculated for a security on a particular date on any of the foregoing bases,
the Closing Bid Price or the Closing Sale Price, as the case may be, of such
security on such date shall be the fair market value as mutually determined by
the Company and the Holder.  If the Company and the Holder are unable
to agree upon the fair market value of such security, then such dispute shall be
resolved pursuant to Section 13.  All such determinations to be
appropriately adjusted for any stock dividend, stock split, stock combination or
other similar transaction during the applicable calculation period.

     

    (f)           "Common Stock" means
(i) the Company's shares of Common Stock, par value $0.001 per share, and
(ii) any share capital into which such Common Stock shall have been changed
or any share capital resulting from a reclassification of such Common
Stock.

     

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

     

    (h)           "Eligible Market" means the
Principal Market, The NASDAQ Global Market, The NASDAQ Global Select Market, The
New York Stock Exchange, Inc., The Nasdaq Capital Market or the OTC Bulletin
Board.

     

    
      
         

      

      
        - 18
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    (i)           "Equity Conditions"
means:  (A) on each day during the period beginning thirty (30)
Trading Days prior to the applicable date of determination and ending on and
including the applicable date of determination (the "Equity Conditions Measuring
Period"), either (x) the Registration Statement (as defined in the
Registration Rights Agreement) filed pursuant to the Registration Rights
Agreement shall be effective and available for the resale of all remaining
Registrable Securities in accordance with the terms of the Registration Rights
Agreement and there shall not have been any Grace Period (as defined in the
Registration Rights Agreement) or (y) all shares of Common Stock issuable upon
conversion of the SPA Securities and exercise of the Warrants shall be eligible
for sale without restriction and without the need for registration under any
applicable federal or state securities laws, including, without limitation
pursuant to Rule 144 if without any restriction or limitation and without the
requirement to be in compliance with Rule 144(c)(1); (B) on each day during the
Equity Conditions Measuring Period, the Common Stock is designated for quotation
on the Principal Market or an Eligible Market and shall not have been suspended
from trading from any applicable exchanges or markets nor shall proceedings for
such delisting or suspension from all such exchanges or markets have been
commenced, threatened or pending either (1) in writing by all relevant exchanges
and markets or (2) by falling below the minimum listing maintenance requirements
of all relevant exchanges and markets; (C) on each day during the Equity
Conditions Measuring Period, the Company shall have delivered Common Stock upon
exercise of the SPA Warrants to the holders on a timely basis as set forth in
Section 1(a) hereof; (D) any applicable shares of Common Stock to be issued in
connection with the event requiring determination may be issued in full without
violating Section 1(f) hereof or the rules or regulations of the applicable
Principal Market; provided, however, that the
foregoing shall not preclude the Company from issuing such number of shares that
does not cause any such violation; (E) during the Equity Conditions Measuring
Period, the Company shall not have failed to timely make any payments within
five (5) Business Days of when such payment is due pursuant to any Transaction
Document (as defined in the Securities Purchase Agreement); (F) during the
Equity Conditions Measuring Period, there shall not have occurred a Triggering
Event or an event that with the passage of time or giving of notice would
constitute a Triggering Event; (G) the Company shall have no knowledge of any
fact that would cause all shares of Common Stock issued and issuable upon
exercise of the Warrants not to be eligible for sale without restriction or
limitation and without the need for registration under any applicable federal or
state securities laws; and (H) on each day during the Equity Conditions
Measuring Period, the Company otherwise shall be in material compliance with and
shall not be in breach of any provision, covenant, representation or warranty of
any Transaction Document.

     

    (j)           "Equity Conditions Failure"
means that during the period beginning on the Forced Exercise Notice Date
through the Forced Exercise Date, the Equity Conditions have not been satisfied
(or waived in writing by the Holder).

     

    
      
         

      

      
        - 19
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    (k)           "Excluded Securities" means any
Common Stock issued or issuable: (i) in connection with any Approved Stock Plan;
provided that the option term, exercise price or similar provisions of any
issuances pursuant to such Approved Stock Plan are not amended, modified or
changed on or after the Subscription Date, (ii) upon conversion of the SPA
Securities or exercise of the Warrants; provided that neither
the terms of the SPA Securities nor the Warrants are amended, modified or
changed on or after the date hereof to lower the conversion price, amortization
price or exercise price of any such securities, to extend the term of any such
securities or otherwise in any manner that adversely affects, or could
reasonably be expected to adverse affect, the Holder; (iii) in connection with
the warrants issued to the Placement Agent on the terms set forth on Schedule
4(n)(i)(5) of the Securities Purchase Agreement; provided that the terms of such
warrants are not amended, modified or changed on or after the date hereof to
lower the exercise price, extend the term thereof or otherwise in any other
matter that adversely affects, or could reasonably be expected to adverse affect
the Holder and provided, further, that the
shares of Common Stock underlying such warrants are not reserved by the Company out of the authorized and
unissued shares of Common Stock and are not issuable or issued until the
Company obtains the Principal Market Stockholder Approval and the Authorized
Share Stockholder Approval; and provided, further, that the shares of Common Stock
underlying such warrants are not registered until all of the Registrable
Securities are registered; (iv) upon exercise of any Options or
Convertible Securities which are outstanding on the day immediately preceding
the date hereof; provided that the
terms of such Options or Convertible Securities are not amended, modified or
changed on or after the date hereof to lower the conversion price, amortization
price or exercise price of any such securities, to extend the term of any such
securities or otherwise in any manner that adversely affects, or could
reasonably be expected to adverse affect, the Holder and (v) in connection with
mergers, acquisitions, strategic licensing arrangements, strategic business
partnerships or joint ventures, in each case with non-affiliated third parties
and otherwise on an arm's-length basis, the purpose of which is not to raise
additional capital; provided, that such third parties are not granted any
registration rights.  Notwithstanding the foregoing, any Common Stock
issued or issuable to raise capital for the Company or its Subsidiaries,
directly or indirectly, in connection with any transaction contemplated by
clause (v) above, including, without limitation, securities issued in one or
more related transactions or that result in similar economic consequences, shall
not be deemed to be Excluded Securities.

     

    (l)           "Expiration Date" means the
date sixty months after the Initial Exercisability Date or, if such date falls
on a day other than a Business Day or on which trading does not take place on
the Principal Market (a "Holiday"), the next day that
is not a Holiday.

     

    (m)           "First Determination Date"
means the later of (i) the earlier of (A) the date that the Principal Market
Stockholder Approval is obtained and (B) the date that the Common Stock ceases
to be listed or quoted on the Principal Market, and (ii) the earlier of the date
that (A) the Registration Statement filed pursuant to the Registration Rights
Agreement shall be effective and available for the resale of all remaining
Registrable Securities in accordance with the terms of the Registration Rights
Agreement and (B) the first date that all of the Securities (as defined in the
Securities Purchase Agreement) may be resold without restriction or limitation
pursuant to Rule 144.

     

    (n)           "Fundamental Transaction" means
that (A) the Company shall, directly or indirectly, in one or more related
transactions, (i) consolidate or merge with or into (whether or not the Company
is the surviving corporation) another Person, or (ii) sell, assign, transfer,
convey or otherwise dispose of all or substantially all of the properties or
assets of the Company to another Person, or (iii) allow another Person to make a
purchase, tender or exchange offer that is accepted by the holders of more than
the 50% of the outstanding shares of Common Stock (not including any shares of
Common Stock held by the Person or Persons making or party to, or associated or
affiliated with the Persons making or party to, such purchase, tender or
exchange offer), or (iv) consummate a stock purchase agreement or other business
combination (including, without limitation, a reorganization, recapitalization,
spin-off or scheme of arrangement) with another Person whereby such other Person
acquires more than the 50% of the outstanding shares of Common Stock (not
including any shares of Common Stock held by the other Person or other Persons
making or party to, or associated or affiliated with the other Persons making or
party to, such stock purchase agreement or other business combination), or (v)
reorganize, recapitalize or reclassify its Common Stock or (B) any "person" or
"group" (as these terms are used for purposes of Sections 13(d) and 14(d) of the
1934 Act) is or shall become the "beneficial owner" (as defined in Rule 13d-3
under the 1934 Act), directly or indirectly, of 50% of the aggregate ordinary
voting power represented by issued and outstanding shares of Common
Stock.

     

    
      
         

      

      
        - 20
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    (o)           "Initial Exercisability Date"
means the earlier of (i) the six month anniversary of the Issuance Date, (ii)
the date that the Common Stock ceases to be listed or quoted on the Principal
Market and (ii) the date that the Company obtains Principal Market Stockholder
Approval.

     

    (p)           
"Option Value" means the
value of an Option based on the Black and Scholes Option Pricing model obtained
from the "OV" function on Bloomberg determined as of the day prior to the public
announcement of the applicable Option for pricing purposes and reflecting (i) a
risk-free interest rate corresponding to the U.S. Treasury rate for a period
equal to the remaining term of the applicable Option as of the applicable date
of determination, (ii) an expected volatility equal to the greater of 100% and
the 100 day volatility obtained from the HVT function on Bloomberg as of the day
immediately following the public announcement of the applicable Option, (iii)
the underlying price per share used in such calculation shall be the highest
Weighted Average Price during the period beginning on the day prior to the
execution of definitive documentation relating to the issuance of the applicable
Option and the public announcement of such issuance and (iv) a 360 day
annualization factor.

     

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

     

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

     

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

     

    (t)           "Principal Market" means NYSE
Amex Equities.

     

    (u)           "Required Holders" means the
holders of the SPA Warrants representing at least sixty percent (60%) of the
shares of Common Stock underlying the SPA Warrants then
outstanding.

     

    (v)           "Second Determination Date"
means the date that all of the Securities (as defined in the Securities Purchase
Agreement) may be resold without restriction or limitation pursuant to Rule 144
and the Company regains compliance with the Company's current public information
requirement under Rule 144(c)(1) after a Public Reporting Failure; provided,
that if the Company does not regain such compliance on or prior to the one year
anniversary of the Issuance Date, the Second Determination Date shall be the one
year anniversary of the Issuance Date.

     

    
      
         

      

      
        - 21
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    (w)           "SPA Securities" means the
Notes issued pursuant to the Securities Purchase Agreement.

     

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

     

    (y)           "Trading Day" means any day on
which the Common Stock is traded on the Principal Market, or, if the Principal
Market is not the principal trading market for the Common Stock, then on the
principal securities exchange or securities market on which the Common Stock is
then traded; provided that
"Trading Day" shall not include any day on which the Common Stock is scheduled
to trade on such exchange or market for less than 4.5 hours or any day that the
Common Stock is suspended from trading during the final hour of trading on such
exchange or market (or if such exchange or market does not designate in advance
the closing time of trading on such exchange or market, then during the hour
ending at 4:00:00 p.m., New York time).

     

    (z)           Triggering
Event.  A "Triggering Event" shall be
deemed to have occurred at such time as any of the following
events:

     

    (1)           while
the Registration Statement is required to be maintained, the effectiveness of
the Registration Statement lapses for any reason (including, without limitation,
the issuance of a stop order) or is unavailable to the Holder for the issuance
and sale of the Warrant Shares underlying this Warrant, and such lapse or
unavailability continues for a period of ten (10) consecutive Trading Days or
for more than an aggregate of thirty (30) days in any 365 day period;

     

    (2)           the
suspension from trading or failure of the Common Stock to be listed on the
Principal Market or another Eligible Market for a period of five (5) consecutive
Trading Days or for more than an aggregate of ten (10) Trading Days in any
365-day period;

     

    (3)           the
entry by a court having jurisdiction in the premises of (i) a decree or order
for relief in respect of the Company or any Subsidiary of a voluntary case or
proceeding under any applicable Federal or State bankruptcy, insolvency,
reorganization or other similar law or (ii) a decree or order adjudging the
Company or any Subsidiary as bankrupt or insolvent, or approving as properly
filed a petition seeking reorganization, arrangement, adjustment or composition
of or in respect of the Company or any Subsidiary under any applicable Federal
or State law or (iii) appointing a custodian, receiver, liquidator, assignee,
trustee, sequestrator or other similar official of the Company or any Subsidiary
or of any substantial part of its property, or ordering the winding up or
liquidation of its affairs, and the continuance of any such decree or order for
relief or any such other decree or order unstayed and in effect for a period of
60 consecutive days;

     

    
      
         

      

      
        - 22
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    (4)           the
commencement by the Company or any Subsidiary of a voluntary case or proceeding
under any applicable Federal or State bankruptcy, insolvency, reorganization or
other similar law or of any other case or proceeding to be adjudicated a
bankrupt or insolvent, or the consent by it to the entry of a decree or order
for relief in respect of the Company or any Subsidiary in an involuntary case or
proceeding under any applicable Federal or State bankruptcy, insolvency,
reorganization or other similar law or to the commencement of any bankruptcy or
insolvency case or proceeding against it, or the filing by it of a petition or
answer or consent seeking reorganization or relief under any applicable Federal
or State law, or the consent by it to the filing of such petition or to the
appointment of or taking possession by a custodian, receiver, liquidator,
assignee, trustee, sequestrator or other similar official of the Company or any
Subsidiary or of any substantial part of its property, or the making by it of an
assignment for the benefit of creditors, or the admission by it in writing of
its inability to pay its debts generally as they become due, or the taking of
corporate action by the Company or any Subsidiary in furtherance of any such
action; or

     

    (5)           the
Company breaches any representation, warranty, covenant or other term or
condition of any Transaction Document (as defined in the Securities Purchase
Agreement), except, in the case of a breach of a covenant which is curable, only
if such breach remains uncured for a period of at least five (5) Business
Days.

     

    (aa)           "Weighted Average Price" means,
for any security as of any date, the dollar volume-weighted average price for
such security on the Principal Market during the period beginning at 9:30:01
a.m., New York time (or such other time as the Principal Market publicly
announces is the official open of trading), and ending at 4:00:00 p.m., New York
time (or such other time as the Principal Market publicly announces is the
official close of trading), as reported by Bloomberg through its "Volume at
Price" function or, if the foregoing does not apply, the dollar volume-weighted
average price of such security in the over-the-counter market on the electronic
bulletin board for such security during the period beginning at 9:30:01 a.m.,
New York time (or such other time as the Principal Market publicly announces is
the official open of trading), and ending at 4:00:00 p.m., New York time (or
such other time as the Principal Market publicly announces is the official close
of trading), as reported by Bloomberg, or, if no dollar volume-weighted average
price is reported for such security by Bloomberg for such hours, the average of
the highest closing bid price and the lowest closing ask price of any of the
market makers for such security as reported in the "pink sheets" by Pink Sheets
LLC (formerly the National Quotation Bureau, Inc.).  If the Weighted
Average Price cannot be calculated for a security on a particular date on any of
the foregoing bases, the Weighted Average Price of such security on such date
shall be the fair market value as mutually determined by the Company and the
Holder.  If the Company and the Holder are unable to agree upon the
fair market value of such security, then such dispute shall be resolved pursuant
to Section 13 with the term "Weighted Average Price" being substituted for the
term "Exercise Price." All such determinations shall be appropriately adjusted
for any stock dividend, stock split, stock combination or other similar
transaction during the applicable calculation period.

     

    [Signature
Page Follows]

    
      
         

      

      
        - 23
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    IN WITNESS WHEREOF, the
Company has caused this Warrant to Purchase Common Stock to be duly executed as
of the Issuance Date set out above.

     

    
      
        
          
            
              
                	 	
                        RADIENT
      PHARMACEUTICALS CORPORATION

                      	 
	 	 
      	 
	 	
                        By:

                      	
                            

                      	 
	 	
                        Name:  

                      	 
      	 
	 	
                        Title:

                      	 
      	 

              

            

          

        

      

    

    

      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

    EXHIBIT
A

    

    EXERCISE
NOTICE

     

    TO
BE EXECUTED BY THE REGISTERED HOLDER TO EXERCISE THIS

    WARRANT
TO PURCHASE COMMON STOCK

    

    RADIENT
PHARMACEUTICALS CORPORATION

     

    The undersigned holder hereby exercises
the right to purchase _________________ of the Common Stock ("Warrant Shares") of Radient
Pharmaceuticals Corporation, a
Delaware corporation (the "Company"), evidenced by the
attached Warrant to Purchase Common Stock (the "Warrant").  Capitalized
terms used herein and not otherwise defined shall have the respective meanings
set forth in the Warrant.

    

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

    

    
      ____________
a
"Cash Exercise"
with respect to _________________ Warrant Shares; or

    

    

    
      ____________
a
"Cashless
Exercise" with respect to _______________ Warrant
Shares.

    

    

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

    

    3.  Delivery of Warrant
Shares.  The Company shall deliver to the holder __________ Warrant
Shares in accordance with the terms of the Warrant.

    

    Date:
_______________ __, ______

    

    
      
        	
                     

              
	
                Name
      of Registered Holder

              
	 
      	 
      
	
                By:

              	
                     

              
	 
      	
                Name:

              
	 
      	
                Title:

              

      

    

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    ACKNOWLEDGMENT

    

    The Company hereby acknowledges this
Exercise Notice and hereby directs Corporate Stock Transfer, Inc. to issue the above
indicated number of shares of Common Stock in accordance with the Transfer Agent
Instructions dated January [__], 2011 from the Company and acknowledged and
agreed to Corporate Stock Transfer, Inc..

    

    
      
        
          
            
              	 	
                      RADIENT
      PHARMACEUTICALS CORPORATION

                    	 
	 	 
      	 
	 	
                      By:

                    	
                          

                    	 
	 	
                      Name:  

                    	 
      	 
	 	
                      Title:

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