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                                                                   EXHIBIT 10.01

                          INTERNATIONAL GAME TECHNOLOGY
                          EMPLOYEE STOCK PURCHASE PLAN

              (AMENDED AND RESTATED EFFECTIVE AS OF MARCH 1, 1999;
            COMPOSITE PLAN DOCUMENT REFLECTING JULY 2003 STOCK SPLIT
                          AND DECEMBER 2003 AMENDMENT)

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                                TABLE OF CONTENTS

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1.   PURPOSE................................................................................................        1
2.   DEFINITIONS............................................................................................        1
3.   ELIGIBILITY............................................................................................        4
4.   STOCK SUBJECT TO THIS PLAN; SHARE LIMITATIONS..........................................................        4
5.   OFFERING PERIODS.......................................................................................        4
6.   PARTICIPATION..........................................................................................        4
7.   METHOD OF PAYMENT OF CONTRIBUTIONS.....................................................................        5
8.   GRANT OF OPTION........................................................................................        6
9.   EXERCISE OF OPTION.....................................................................................        6
10.  DELIVERY...............................................................................................        7
11.  TERMINATION OF EMPLOYMENT; CHANGE IN ELIGIBLE STATUS...................................................        7
12.  ADMINISTRATION.........................................................................................        8
13.  DESIGNATION OF BENEFICIARY.............................................................................        9
14.  TRANSFERABILITY........................................................................................       10
15.  USE OF FUNDS; INTEREST.................................................................................       10
16.  REPORTS................................................................................................       10
17.  ADJUSTMENTS OF AND CHANGES IN THE STOCK................................................................       10
18.  POSSIBLE EARLY TERMINATION OF PLAN AND OPTIONS.........................................................       11
19.  TERM OF PLAN; AMENDMENT OR TERMINATION.................................................................       11
20.  NOTICES................................................................................................       12
21.  CONDITIONS UPON ISSUANCE OF SHARES.....................................................................       12
22.  PLAN CONSTRUCTION......................................................................................       12
23.  EMPLOYEES' RIGHTS......................................................................................       13
24.  MISCELLANEOUS..........................................................................................       13
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                          INTERNATIONAL GAME TECHNOLOGY
                          EMPLOYEE STOCK PURCHASE PLAN
              (AMENDED AND RESTATED EFFECTIVE AS OF MARCH 1, 1999;
            COMPOSITE PLAN DOCUMENT REFLECTING JULY 2003 STOCK SPLIT
                          AND DECEMBER 2003 AMENDMENT)

            The following constitute the provisions of the International Game
Technology Employee Stock Purchase Plan (the "PLAN"). The Plan was first adopted
by the Board of Directors (the "BOARD") of International Game Technology, a
Nevada corporation (the "CORPORATION") on February 26, 1987. The Plan was
approved by the Corporation's stockholders on February 16, 1988. This amendment
to and restatement of the Plan is effective as of March 1, 1999.

1.    PURPOSE

      The purpose of this Plan is to assist Qualified Employees in acquiring a
      stock ownership interest in the Corporation pursuant to a plan which is
      intended to qualify as an "employee stock purchase plan" under Section 423
      of the Code. This Plan is also intended to help Qualified Employees
      provide for their future security and to encourage them to remain in the
      employ of the Corporation (and those Subsidiaries which may be designated
      by the Committee as "Participating Subsidiaries").

2.    DEFINITIONS

      Capitalized terms used herein which are not otherwise defined shall have
      the following meanings.

            "ACCOUNT" means the bookkeeping account maintained by the
            Corporation, or by a recordkeeper on behalf of the Corporation, for
            a Participant pursuant to Section 7(a).

            "BOARD" means the Board of Directors of the Corporation.

            "CODE" means the Internal Revenue Code of 1986, as amended from time
            to time.

            "COMMITTEE" means the committee appointed by the Board to administer
            this Plan pursuant to Section 12.

            "COMMON STOCK" means the Common Stock, without par value, of the
            Corporation.

            "COMPANY" means, collectively, the Corporation and its Subsidiaries.

            "COMPENSATION" means a Qualified Employee's regular gross pay for a
            40-hour week. Compensation includes any amounts contributed as
            salary reduction contributions to a plan qualifying under Section
            401(k), 125 or 129 of the Code. Any other form of remuneration is
            excluded from Compensation, including (but not limited to) the
            following: overtime payments, sales commissions, prizes,

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            awards, relocation or housing allowances, stock option exercises,
            stock appreciation rights, restricted stock exercises, performance
            awards, auto allowances, tuition reimbursement and other forms of
            imputed income, bonuses, incentive compensation, special payments,
            fees and allowances. Notwithstanding the foregoing, Compensation
            shall not include any amounts deferred under or paid from any
            nonqualified deferred compensation plan maintained by the Company.

            "CONTRIBUTIONS" means all bookkeeping amounts credited to the
            Account of a Participant pursuant to Section 7(a).

            "CORPORATION" means International Game Technology, a Nevada
            corporation, and its successors.

            "EFFECTIVE DATE" means February 26, 1987, the original effective
            date of this Plan. This amendment to and restatement of the Plan is
            effective as of March 1, 1999.

            "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended
            from time to time.

            "EXERCISE DATE" means, with respect to an Offering Period, the last
            day of that Offering Period.

            "FAIR MARKET VALUE" on any date means: (i) if the Common Stock is
            listed or admitted to trade on a national securities exchange, the
            closing price of a share of Common Stock on the Composite Tape, as
            published in the Western Edition of The Wall Street Journal, of the
            principal national securities exchange on which such stock is so
            listed or admitted to trade, on such date, or, if there is no
            trading of the Common Stock on such date, then the closing price of
            a share of Common Stock as quoted on such Composite Tape on the next
            preceding date on which there was trading in such shares; (ii) if
            the Common Stock is not listed or admitted to trade on a national
            securities exchange, the last/closing price for a share of Common
            Stock on such date, as furnished by the National Association of
            Securities Dealers, Inc. ("NASD") through the NASDAQ National Market
            Reporting System or a similar organization if the NASD is no longer
            reporting such information; (iii) if the Common Stock is not listed
            or admitted to trade on a national securities exchange and is not
            reported on the National Market Reporting System, the mean between
            the bid and asked price for a share of Common Stock on such date, as
            furnished by the NASD or a similar organization; or (iv) if the
            Common Stock is not listed or admitted to trade on a national
            securities exchange, is not reported on the National Market
            Reporting System and if bid and asked prices for the Common Stock
            are not furnished by the NASD or a similar organization, the value
            as established by the Committee at such time for purposes of this
            Plan.

            "GRANT DATE" means the first day of each Offering Period, as
            determined by the Committee and announced to potential Qualified
            Employees; provided, however,

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            that no Grant Date may occur on or before the Exercise Date for the
            immediately preceding Offering Period.

            "OFFERING PERIOD" means the twelve-consecutive month period
            commencing on each Grant Date; provided, however, that the Committee
            may declare, as it deems appropriate and in advance of the
            applicable Offering Period, (i) a shorter (not to be less than three
            months) Offering Period or a longer (not to exceed 27 months)
            Offering Period.

            "OPTION" means the stock option to acquire Shares granted to a
            Participant pursuant to Section 8.

            "OPTION PRICE" means the per share exercise price of an Option as
            determined in accordance with Section 8(b).

            "PARENT" means any corporation (other than the Corporation) in an
            unbroken chain of corporations ending with the Corporation in which
            each corporation (other than the Corporation) owns stock possessing
            50% or more of the total combined voting power of all classes of
            stock in one or more of the other corporations in the chain.

            "PARTICIPANT" means a Qualified Employee who has elected to
            participate in this Plan and who has filed a valid and effective
            Subscription Agreement to make Contributions pursuant to Section 6.

            "PLAN" means this International Game Technology Employee Stock
            Purchase Plan, as amended from time to time.

            "QUALIFIED EMPLOYEE" means any employee of the Corporation, or of
            any Subsidiary which has been designated in writing by the Committee
            as a "Participating Subsidiary" (including any Subsidiaries which
            have become such after the date that this Plan is approved by the
            stockholders of the Corporation). Notwithstanding the foregoing,
            "Qualified Employee" shall not include any employee: (i) who has not
            as of the Grant Date completed at least 90 days of continuous
            full-time employment with the Company; or (ii) whose customary
            employment is for 20 hours per week or less; or (iii) whose
            customary employment is for not more than five months in a calendar
            year.

            "RULE 16b-3" means Rule 16b-3 as promulgated by the Commission under
            Section 16, as amended from time to time.

            "SECTION 16" means Section 16 of the Exchange Act.

            "SHARE" means a share of Common Stock.

            "SUBSCRIPTION AGREEMENT" means the written agreement filed by a
            Qualified Employee with the Corporation pursuant to Section 6 to
            participate in this Plan.

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            "SUBSIDIARY" means any corporation in an unbroken chain of
            corporations (beginning with the Corporation) in which each
            corporation (other than the last corporation) owns stock possessing
            50% or more of the total combined voting power of all classes of
            stock in one or more of the other corporations in the chain.

3.    ELIGIBILITY

      Any person employed as a Qualified Employee as of a Grant Date shall be
      eligible to participate in this Plan during the Offering Period in which
      such Grant Date occurs, subject to the Qualified Employee satisfying the
      requirements of Section 6.

4.    STOCK SUBJECT TO THIS PLAN; SHARE LIMITATIONS

      (a)   The maximum number of Shares that may be delivered pursuant to
            Options granted under this Plan is 12,600,000* Shares (after giving
            effect to the Corporation's stock splits affecting the Common Stock
            through the July 2003 four-for-one stock split), subject to
            adjustments pursuant to Section 17. In the event that all of the
            Shares made available under this Plan are subscribed prior to the
            expiration of this Plan, this Plan may be terminated by the Board.

      (b)   The maximum number of Shares that any one individual may acquire
            upon exercise of his or her Option with respect to any one Offering
            Period is 12,000, subject to adjustments pursuant to Section 17 (the
            "INDIVIDUAL LIMIT"); provided, however, that the Committee may amend
            such Individual Limit, effective no earlier than the first Offering
            Period commencing after the adoption of such amendment, without
            stockholder approval. The Individual Limit shall be proportionately
            adjusted for any Offering Period of less than six months, and may,
            at the discretion of the Committee, be proportionately increased for
            any Offering Period of greater than six months.

5.    OFFERING PERIODS

      During the term of this Plan, the Corporation will offer Options to
      purchase Shares in each Offering Period to all Participants in that
      Offering Period. Each Option shall become effective on the Grant Date. The
      term of each Option shall be the duration of the related Offering Period
      and shall end on the Exercise Date. Offering Periods shall continue until
      this Plan is terminated in accordance with Section 18 or 19, or, if
      earlier, until no Shares remain available for Options pursuant to Section
      4.

6.    PARTICIPATION

      A Qualified Employee may become a participant in this Plan by completing a
      Subscription Agreement on a form approved by and in a manner prescribed by
      the Committee (or its delegate). To become effective, a Subscription
      Agreement must be filed with the Corporation at the time specified by the
      Committee, but in all cases prior to

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* Reflects the December 2003 amendment approved by the Board to increase the
Share limit by 3,000,000 Shares, which amendment is subject to approval by
stockholders at the 2004 annual meeting of stockholders.

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      the start of the Offering Period with respect to which it is to become
      effective, and must set forth a stated amount (or, if the Committee so
      provides, a whole percentage) of the Qualified Employee's Compensation to
      be credited to the Participant's Account as Contributions each pay period;
      subject to (i) the $25,000 annual limitation set forth in Section 8(c),
      (ii) unless the Committee otherwise provides, an election of a stated
      amount of Compensation must result in a Plan Contribution of at least
      $10.00 each pay period, (iii) a Participant may not contribute more than
      ten percent (10%) of his or her Compensation as Plan Contributions, and
      (iv) such other limits, rules, or procedures as the Committee may
      prescribe. Subscription Agreements shall contain the Qualified Employee's
      authorization and consent to the Corporation's withholding from his or her
      Compensation the amount of his or her Contributions. A Subscription
      Agreement shall be effective only with respect to the related Offering
      Period. A Qualified Employee must timely file a new Subscription Agreement
      for each Offering Period in which he or she wishes to participate.

7.    METHOD OF PAYMENT OF CONTRIBUTIONS

      (a)   The Corporation shall maintain on its books, or cause to be
            maintained by a recordkeeper, an Account in the name of each
            Participant. The percentage of Compensation elected to be applied as
            Contributions by a Participant shall be deducted from such
            Participant's Compensation on each payday during the period for
            payroll deductions set forth below and such payroll deductions shall
            be credited to that Participant's Account as soon as
            administratively practicable after such date. A Participant may not
            make any additional payments to his or her Account. A Participant's
            Account shall be reduced by any amounts used to pay the Option Price
            of Shares acquired, or by any other amounts distributed pursuant to
            the terms hereof.

      (b)   Payroll deductions with respect to an Offering Period shall commence
            as of the first day of the payroll period which coincides with or
            immediately follows the applicable Grant Date and shall end on the
            last day of the payroll period which coincides with or immediately
            precedes the applicable Exercise Date, unless sooner terminated by
            the Participant as provided in this Section 7 or until his or her
            participation terminates pursuant to Section 11.

      (c)   A Participant may terminate his or her Contributions during an
            Offering Period (and receive a distribution of the balance of his or
            her Account in accordance with Section 11) by completing and filing
            with the Corporation, in such form and on such terms as the
            Committee (or its delegate) may prescribe, a written withdrawal form
            which shall be signed by the Participant. Such termination shall be
            effective as soon as administratively practicable after its receipt
            by the Corporation. Partial withdrawals of Accounts, and other
            modifications or suspensions of Subscription Agreements are not
            permitted.

      (d)   During leaves of absence approved by the Corporation and meeting the
            requirements of Regulation Section 1.421-7(h)(2) under the Code, a
            Participant may continue participation in this Plan by cash payments
            to the Corporation on

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            his normal paydays equal to the reduction in his Plan Contributions
            caused by his leave.

8.    GRANT OF OPTION

      (a)   On each Grant Date, each Qualified Employee who is a participant
            during that Offering Period shall be granted an Option to purchase a
            number of Shares. The Option shall be exercised on the Exercise
            Date. The number of Shares subject to the Option shall be determined
            by dividing the Participant's Account balance as of the applicable
            Exercise Date by the Option Price.

      (b)   The Option Price per Share of the Shares subject to an Option shall
            be the lesser of: (i) 85% of the Fair Market Value of a Share on the
            applicable Grant Date; or (ii) 85% of the Fair Market Value of a
            Share on the applicable Exercise Date.

      (c)   Notwithstanding anything else contained herein, a person who is
            otherwise a Qualified Employee shall not be granted any Option (or
            any Option granted shall be subject to compliance with the following
            limitations) or other right to purchase Shares under this Plan to
            the extent (i) it would, if exercised, cause the person to own
            "stock" (as such term is defined for purposes of Section 423(b)(3)
            of the Code) possessing 5% or more of the total combined voting
            power or value of all classes of stock of the Corporation, or of any
            Parent, or of any Subsidiary, or (ii) such Option causes such
            individual to have rights to purchase stock under this Plan and any
            other plan of the Corporation, any Parent, or any Subsidiary which
            is qualified under Section 423 of the Code which accrue at a rate
            which exceeds $25,000 of the fair market value of the stock of the
            Corporation, of any Parent, or of any Subsidiary (determined at the
            time the right to purchase such Stock is granted) for each calendar
            year in which such right is outstanding at any time. For this
            purpose a right to purchase stock accrues when it first become
            exercisable during the calendar year. In determining whether the
            stock ownership of a Qualified Employee equals or exceeds the 5%
            limit set forth above, the rules of Section 424(d) of the Code
            (relating to attribution of stock ownership) shall apply, and stock
            which the Qualified Employee may purchase under outstanding options
            shall be treated as stock owned by the Qualified Employee.

9.    EXERCISE OF OPTION

      Unless a Participant's Plan participation is terminated as provided in
      Section 11, his or her Option for the purchase of Shares shall be
      exercised automatically on the Exercise Date for that Offering Period,
      without any further action on the Participant's part, and the maximum
      number of whole Shares subject to such Option (subject to the Individual
      Limit set forth in Section 4(b) and the limitations contained in Section
      8(c)) shall be purchased at the Option Price with the balance of such
      Participant's Account. If any amount which is not sufficient to purchase a
      whole Share remains in a Participant's Account after the exercise of his
      or her Option on the Exercise Date: (i) such amount shall be credited to
      such Participant's Account for the next Offering Period, if he or she is
      then a Participant; or (ii) if such Participant is not a Participant in
      the next Offering

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      Period, or if the Committee so elects, such amount shall be refunded to
      such Participant as soon as administratively practicable after such date.
      If any amount which exceeds the Individual Limit set forth in Section 4(b)
      or one of the limitations set forth in Section 8(c) remains in a
      Participant's Account after the exercise of his or her Option on the
      Exercise Date, such amount shall be refunded to the Participant as soon as
      administratively practicable after such date.

10.   DELIVERY

      As soon as administratively practicable after the Exercise Date, the
      Corporation shall deliver to each Participant a certificate representing
      the Shares purchased upon exercise of his or her Option. The Corporation
      may make available an alternative arrangement for delivery of Shares to a
      recordkeeping service. The Committee (or its delegate), in its discretion,
      may either require or permit the Participant to elect that such
      certificates be delivered to such recordkeeping service. In the event the
      Corporation is required to obtain from any commission or agency authority
      to issue any such certificate, the Corporation will seek to obtain such
      authority. Inability of the Corporation to obtain from any such commission
      or agency authority which counsel for the Corporation deems necessary for
      the lawful issuance of any such certificate shall relieve the Corporation
      from liability to any Participant except to return to the Participant the
      amount of the balance in his or her Account.

11.   TERMINATION OF EMPLOYMENT; CHANGE IN ELIGIBLE STATUS

      (a)   Upon a Participant's termination from employment with the Company
            for any reason other than his or her death or Retirement, or if the
            Participant elects to terminate Contributions pursuant to Section
            7(c), at any time prior to the last day of an Offering Period in
            which he or she participates, such Participant's Account shall be
            paid to him or her or in cash, and such Participant's Option and
            participation in the Plan shall be automatically terminated. If a
            Participant (i) ceases to be a Qualified Employee during an Offering
            Period but remains an employee of the Company through the Exercise
            Date, or (ii) during an Offering Period commences a leave of absence
            approved by the Company and meeting the requirements of Treasury
            Regulation Section 1.421-7(h)(2) and is an employee of the Company
            or on such leave as of the applicable Exercise Date, such
            Participant's Contributions shall cease (subject to Section 6(d)),
            and the Contributions previously credited to the Participant's
            Account for that Offering Period shall be used to exercise the
            Participant's Option as of the applicable Exercise Date in
            accordance with Section 9 (unless the Participant makes an election
            to terminate Contributions in accordance with Section 7(c) at any
            time prior to the last day of the applicable Offering Period, in
            which case such Participant's Account shall be paid to him or her in
            cash in accordance with the foregoing).

      (b)   A Participant who terminates employment with the Company due to
            Retirement may, at his election and by written notice to the
            Corporation, either (i) exercise his Option as of his Retirement
            date, in which event the Corporation shall apply the

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            balance in his Account to purchase Shares and pay the Option Price
            (with the Exercise Date of such Option being the date of his
            retirement for purposes of calculating such price) and refund any
            amount which is not sufficient to purchase a whole Share to the
            Participant, or (ii) request payment of the balance in his Account
            in the form of cash, in which event the Corporation promptly shall
            make such payment, and thereupon his interest in the Plan and his
            Option shall terminate. If the Corporation does not receive such
            notice within 90 days of the Participant's Retirement or, if
            earlier, the end of the applicable Offering Period, the Participant
            shall be conclusively presumed to have elected alternative (ii) and
            requested the payment of the balance of his Account.

      (c)   If the employment of a Participant is terminated by his death, his
            Beneficiary may, at his election and by written notice to the
            Corporation, either (i) exercise the Participant's Option as of the
            date of the Participant's death, in which event the Corporation
            shall apply the balance in the Participant's Account to purchase
            Shares and pay the Option Price (with the Exercise Date of such
            Option being the date of the Participant's death for purposes of
            calculating such price) and refund any amount which is not
            sufficient to purchase a whole share to the Beneficiary, or (ii)
            request payment of the balance in the Participant's Account in the
            form of cash, in which event the Corporation promptly shall make
            such payment to the Beneficiary and thereupon any interest of the
            Participant and his Beneficiary in the Plan and any Option shall
            terminate. If the Corporation does not receive such notice within 90
            days of the Participant's death, or, if earlier, the end of the
            applicable Offering Period, the Participant's Beneficiary shall be
            conclusively presumed to have elected alternative (ii) and requested
            the payment of the balance of the Participant's Account.

      (d)   A Participant's termination from Plan participation precludes the
            Participant from again participating in this Plan during that
            Offering Period. However, such termination shall not have any effect
            upon his or her ability to participate in any succeeding Offering
            Period, provided that the applicable eligibility and participation
            requirements are again then met. A Participant's termination from
            Plan participation shall be deemed to be a revocation of that
            Participant's Subscription Agreement and such Participant must file
            a new Subscription Agreement to resume Plan participation in any
            succeeding Offering Period.

12.   ADMINISTRATION

      (a)   The Board shall appoint the Committee, which shall be composed of
            not less than two members of the Board. Each member of the
            Committee, in respect of any transaction at a time when an affected
            Participant may be subject to Section 16 of the Exchange Act, shall
            be a "non-employee director" within the meaning of Rule 16b-3. The
            Board may, at any time, increase or decrease the number of members
            of the Committee, may remove from membership on the Committee all or
            any portion of its members, and may appoint such person or persons
            as it desires to fill any vacancy existing on the Committee, whether
            caused by removal, resignation,

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            or otherwise. The Board may also, at any time, assume or change the
            administration of this Plan.

      (b)   The Committee shall supervise and administer this Plan and shall
            have full power and discretion to adopt, amend and rescind any rules
            deemed desirable and appropriate for the administration of this Plan
            and not inconsistent with the terms of this Plan, and to make all
            other determinations necessary or advisable for the administration
            of this Plan. The Committee shall act by majority vote or by
            unanimous written consent. No member of the Committee shall be
            entitled to act on or decide any matter relating solely to himself
            or herself or solely to any of his or her rights or benefits under
            this Plan. The Committee shall have full power and discretionary
            authority to construe and interpret the terms and conditions of this
            Plan, which construction or interpretation shall be final and
            binding on all parties including the Corporation, Participants and
            beneficiaries. The Committee may delegate ministerial
            non-discretionary functions to third parties, including officers of
            the Corporation.

      (c)   Any action taken by, or inaction of, the Corporation, the Board or
            the Committee relating to this Plan shall be within the absolute
            discretion of that entity or body and will be conclusive and binding
            upon all persons. No member of the Board or Committee, or officer of
            the Corporation, will be liable for any such action or inaction of
            the entity or body, of another person, or, except in circumstances
            involving bad faith, of himself or herself.

13.   DESIGNATION OF BENEFICIARY

      (a)   A Participant may file, in a manner prescribed by the Committee (or
            its delegate), a written designation of a beneficiary who is to
            receive any Shares or cash from such Participant's Account under
            this Plan in the event of such Participant's death. If a
            Participant's death occurs subsequent to the end of an Offering
            Period but prior to the delivery to him or her of any Shares
            deliverable under the terms of this Plan, such Shares and any
            remaining balance of such Participant's Account shall be paid to
            such beneficiary (or such other person as set forth in Section
            13(b)) as soon as administratively practicable after the Corporation
            receives notice of such Participant's death and any outstanding
            unexercised Option shall terminate. If a Participant's death occurs
            at any other time, the balance of such Participant's Account shall
            be paid to such beneficiary (or such other person as set forth in
            Section 13(b)) in cash as soon as administratively practicable after
            the Corporation receives notice of such Participant's death and such
            Participant's Option shall terminate. If a Participant is married
            and the designated beneficiary is not his or her spouse, spousal
            consent shall be required for such designation to be effective
            unless it is established (to the satisfaction of a Plan
            representative) that there is no spouse or that the spouse cannot be
            located. The Committee may rely on the last designation of a
            beneficiary filed by a Participant in accordance with this Plan.

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      (b)   Beneficiary designations may be changed by the Participant (and his
            or her spouse, if required) at any time on forms provided and in the
            manner prescribed by the Committee (or its delegate). If a
            Participant dies with no validly designated beneficiary under this
            Plan who is living at the time of such Participant's death, the
            Corporation shall deliver all Shares and/or cash payable pursuant to
            the terms hereof to the executor or administrator of the estate of
            the Participant, or if no such executor or administrator has been
            appointed, the Corporation, in its discretion, may deliver such
            Shares and/or cash to the spouse or to any one or more dependents or
            relatives of the Participant, or if no spouse, dependent or relative
            is known to the Corporation, then to such other person as the
            Corporation may designate.

14.   TRANSFERABILITY

      Neither Contributions credited to a Participant's Account nor any Options
      or rights with respect to the exercise of Options or right to receive
      Shares under this Plan may be anticipated, alienated, encumbered,
      assigned, transferred, pledged or otherwise disposed of in any way (other
      than by will, the laws of descent and distribution, or as provided in
      Section 13) by the Participant. Any such attempt at anticipation,
      alienation, encumbrance, assignment, transfer, pledge or other disposition
      shall be without effect and all amounts shall be paid and all shares shall
      be delivered in accordance with the provisions of this Plan. Amounts
      payable or Shares deliverable pursuant to this Plan shall be paid or
      delivered only to the Participant or, in the event of the Participant's
      death, to the Participant's beneficiary pursuant to Section 13.

15.   USE OF FUNDS; INTEREST

      All Contributions received or held by the Corporation under this Plan will
      be included in the general assets of the Corporation and may be used for
      any corporate purpose. Notwithstanding anything else contained herein to
      the contrary, no interest will be paid to any Participant or credited to
      his or her Account under this Plan (in respect of Account balances,
      refunds of Account balances, or otherwise).

16.   REPORTS

      Statements shall be provided to Participants as soon as administratively
      practicable following each Exercise Date. Each Participant's statement
      shall set forth, as of such Exercise Date, that Participant's Account
      balance immediately prior to the exercise of his or her Option, the Fair
      Market Value of a Share, the Option Price, the number of whole Shares
      purchased and his or her remaining Account balance, if any.

17.   ADJUSTMENTS OF AND CHANGES IN THE STOCK

      The following provisions will apply if any extraordinary dividend or other
      extraordinary distribution occurs in respect of the Common Stock (whether
      in the form of cash, Common Stock, other securities, or other property),
      or any reclassification, recapitalization, stock split (including a stock
      split in the form of a stock dividend), reverse stock split,
      reorganization, merger, combination, consolidation, split-up, spin-off,

                                       10

<PAGE>

      combination, repurchase, or exchange of Common Stock or other securities
      of the Corporation, or any similar, unusual or extraordinary corporate
      transaction (or event in respect of the Common Stock) or a sale of
      substantially all the assets of the Corporation as an entirety occurs. The
      Committee will, in such manner and to such extent (if any) as it deems
      appropriate and equitable

      (a)   proportionately adjust any or all of (i) the number and type of
            Shares (or other securities) that thereafter may be made the subject
            of Options (including the specific maxima and numbers of shares set
            forth elsewhere in this Plan), (ii) the number, amount and type of
            Shares (or other securities or property) subject to any or all
            outstanding Options, (iii) the Option Price of any or all
            outstanding Options, or (iv) the securities, cash or other property
            deliverable upon exercise of any outstanding Options, or

      (b)   in the case of an extraordinary dividend or other distribution,
            recapitalization, reclassification, merger, reorganization,
            consolidation, combination, sale of assets, split up, exchange, or
            spin off, make provision for the substitution or exchange of any or
            all outstanding Options or the cash, securities or property
            deliverable to the holder of any or all outstanding Options based
            upon the distribution or consideration payable to holders of the
            Common Stock upon or in respect of such event.

      In each case, no such adjustment will be made that would cause this Plan
      to violate Section 423 of the Code or any successor provisions without the
      written consent of the holders materially adversely affected thereby. In
      any of such events, the Committee may take such action sufficiently prior
      to such event if necessary to permit the Participant to realize the
      benefits intended to be conveyed with respect to the underlying shares in
      the same manner as is available to stockholders generally.

18.   POSSIBLE EARLY TERMINATION OF PLAN AND OPTIONS

      Upon a dissolution of the Corporation, or any other event described in
      Section 17 that the Corporation does not survive, the Plan and, if prior
      to the last day of an Offering Period, any outstanding Option granted with
      respect to that Offering Period shall terminate, subject to any provision
      that has been expressly made by the Committee through a plan or
      reorganization approved by the Board or otherwise for the survival,
      substitution, assumption, exchange or other settlement of the Plan and
      Options. In the event a Participant's Option is terminated pursuant to
      this Section 18, such Participant's Account shall be paid to him or her in
      cash.

19.   TERM OF PLAN; AMENDMENT OR TERMINATION

      (a)   This Plan shall become effective as of the Effective Date. No new
            Offering Periods shall commence on or after February 26, 2007 (after
            giving effect to the amendment approved by the Corporation's
            stockholders at the 1997 annual meeting of stockholders which
            extended the term of this Plan) and this Plan shall

                                       11

<PAGE>

            terminate as of the Exercise Date immediately following such date
            unless sooner terminated pursuant to Section 4, Section 18, or this
            Section 19.

      (b)   The Board may amend, modify or terminate this Plan at any time
            without notice. Stockholder approval for any amendment or
            modification shall not be required, except to the extent required by
            Section 423 of the Code or other applicable law, or deemed necessary
            or advisable by the Board. No amendment, modification, or
            termination pursuant to this Section 18(b) shall, without written
            consent of the Participant, affect in any manner materially adverse
            to the Participant any rights or benefits of such Participant or
            obligations of the Corporation under any Option granted under this
            Plan prior to the effective date of such change. Changes
            contemplated by Section 17 or Section 18 shall not be deemed to
            constitute changes or amendments requiring Participant consent.
            Notwithstanding the foregoing, the Committee shall have the right to
            designate from time to time the Subsidiaries whose employees may be
            eligible to participate in this Plan and such designation shall not
            constitute any amendment to this Plan requiring stockholder
            approval.

20.   NOTICES

      All notices or other communications by a Participant to the Corporation
      contemplated by this Plan shall be deemed to have been duly given when
      received in the form and manner specified by the Committee (or its
      delegate) at the location, or by the person, designated by the Committee
      (or its delegate) for that purpose.

21.   CONDITIONS UPON ISSUANCE OF SHARES

      Shares shall not be issued with respect to an Option unless the exercise
      of such Option and the issuance and delivery of such Shares complies with
      all applicable provisions of law, domestic or foreign, including, without
      limitation, the Securities Act of 1933, as amended from time to time, the
      Exchange Act, any applicable state securities laws, the rules and
      regulations promulgated thereunder, and the requirements of any stock
      exchange upon which the Shares may then be listed.

      As a condition precedent to the exercise of any Option, if, in the opinion
      of counsel for the Corporation such a representation is required under
      applicable law, the Corporation may require any person exercising such
      Option to represent and warrant that the Shares subject thereto are being
      acquired only for investment and without any present intention to sell or
      distribute such Shares.

22.   PLAN CONSTRUCTION

      (a)   It is the intent of the Corporation that transactions involving
            Options under this Plan in the case of Participants who are or may
            be subject to the prohibitions of Section 16 satisfy the
            requirements for applicable exemptions under Rule 16 promulgated by
            the Commission under Section 16 so that such persons (unless they
            otherwise agree) will be entitled to the exemptive relief of Rule
            16b-3 or

                                       12

<PAGE>

            other exemptive rules under Section 16 in respect of those
            transactions and will not be subject to avoidable liability
            thereunder.

      (b)   This Plan and Options are intended to qualify under Section 423 of
            the Code.

      (c)   If any provision of this Plan or of any Option would otherwise
            frustrate or conflict with the intents expressed above, that
            provision to the extent possible shall be interpreted so as to avoid
            such conflict. If the conflict remains irreconcilable, the Committee
            may disregard the provision if it concludes that to do so furthers
            the interest of the Corporation and is consistent with the purposes
            of this Plan as to such persons in the circumstances.

23.   EMPLOYEES' RIGHTS

      Nothing in this Plan (or in any agreement related to this Plan) will
      confer upon any Qualified Employee or Participant any right to continue in
      the employ or other service of the Company or constitute any contract or
      agreement of employment or other service, or interfere in any way with the
      right of the Company to otherwise change such person's compensation or
      other benefits or to terminate the employment or other service or such
      Qualified Employee or Participant, with or without cause, but nothing
      contained in this Plan or any document related hereto shall affect any
      other contractual right of any Qualified Employee or Participant without
      such person's consent. No Participant shall have any rights as a
      stockholder until a certificate for Shares has been issued in the
      Participant's name following exercise of his or her Option. No adjustment
      will be made for dividends or other rights as a stockholder for which a
      record date is prior to the issuance of such Share certificate. Nothing in
      this Plan shall be deemed to create any fiduciary relationship between the
      Corporation and any Participant.

24.   MISCELLANEOUS

      (a)   This Plan, the Options, and related documents shall be governed by,
            and construed in accordance with, the laws of the State of Nevada.
            If any provision shall be held by a court of competent jurisdiction
            to be invalid and unenforceable, the remaining provisions of this
            Plan shall continue in effect.

      (b)   Captions and headings are given to the sections of this Plan solely
            as a convenience to facilitate reference. Such captions and headings
            shall not be deemed in any way material or relevant to the
            construction of interpretation of this Plan or any provision hereof.

      (c)   The adoption of this Plan shall not affect any other Company
            compensation or incentive plans in effect. Nothing in this Plan will
            limit or be deemed to limit the authority of the Board or Committee
            (i) to establish any other forms of incentives or compensation for
            employees of the Company (with or without reference to the Common
            Stock), or (ii) to grant or assume options (outside the scope of and
            in addition to those contemplated by this Plan) in connection with
            any proper corporate purpose; to the extent consistent with any
            other plan or authority.

                                       13<PAGE>
                                                                     EXHIBIT 4.1

             Warrant to Purchase up to 58,632 Shares of Common Stock

                                       of

                          Northfield Laboratories Inc.

                            PLACEMENT AGENT'S WARRANT

                               Dated: May 18, 2004

      This certifies that SG COWEN & CO., LLC (herein sometimes called the
"PLACEMENT AGENT") or its permitted transferee (the Placement Agent or any such
transferee is sometimes herein called the "HOLDER") is entitled to purchase from
NORTHFIELD LABORATORIES INC., a Delaware corporation (the "COMPANY"), at the
price and during the period as hereinafter specified, up to 58,632 shares (the
"SHARES") (equal to three percent (3%) of the number of shares of common stock,
$0.01 par value per share of the Company (the "COMMON STOCK"), sold pursuant to
the purchase agreements in the form included as Exhibit A to the Placement Agent
Agreement (as defined below)) at a purchase price of $13.73 per share (equal to
the average Closing Price of a Share, as reported on the Nasdaq National Market
for the three consecutive Trading Days (as defined herein) ending on and
including the date of the Placement Agent Agreement (as defined herein)),
subject to adjustment as described below (as so adjusted from time to time, the
"EXERCISE PRICE")), at any time during the four (4) year period commencing one
(1) year from the Closing Date.

      This Placement Agent's Warrant (the "PLACEMENT AGENT'S WARRANT") is issued
pursuant to a Placement Agent Agreement between the Company and SG Cowen & Co.,
LLC, as Placement Agent, in connection with a public offering, through the
commercially reasonable efforts of the Placement Agent, of up to 1,954,416
shares of Common Stock as therein described (the "PLACEMENT AGENT AGREEMENT").
All capitalized terms used herein and not otherwise defined, shall have the
meanings ascribed to such terms in the Placement Agent Agreement.

      1. EXERCISE. The rights represented by the Placement Agent's Warrant shall
be exercisable at the Exercise Price, and during the periods as follows:

            (a) During the period from the Closing Date to and through May 17,
2005 (the "FIRST ANNIVERSARY DATE"), inclusive, the Holder shall have no right
to purchase any Shares hereunder.

            (b) At any time and from time to time between, May 18, 2005 and May
17, 2009, (the expiration of five (5) years from the Closing Date, i.e. the
"EXPIRATION DATE") inclusive, the Holder shall have the right to purchase such
number of Shares hereunder as is determined pursuant to Section 1(c) hereof at
the Exercise Price.

<PAGE>

            (c) This Placement Agent's Warrant shall be exercisable for such
number of shares (rounded to the nearest whole number) as is equal to the
aggregate number of shares of Stock purchased by the Purchasers at the Closing
multiplied by 0.03.

            (d) After the Expiration Date, the Holder shall have no right to
purchase all or any portion of the Shares hereunder.

      2. PAYMENT FOR SHARES; ISSUANCE OF CERTIFICATES; NET EXERCISE.

            (a) The rights represented by the Placement Agent's Warrant may be
exercised at any time within the periods above specified, in whole or in part,
by (i) the surrender of the Placement Agent's Warrant (with the purchase form at
the end hereof properly executed) at the principal executive office of the
Company (or such other office or agency of the Company as it may designate by
notice in writing to the Holder at the address of the Holder appearing on the
books of the Company); (ii) payment to the Company of the Exercise Price then in
effect for the number of Shares specified in the above-mentioned purchase form
together with applicable stock transfer taxes, if any; and (iii) delivery to the
Company of a duly executed agreement signed by the person(s) designated in the
purchase form to the effect that such person(s) agree(s) to be bound by the
provisions of Section 6 and subsections (b), (c) and (d) of Section 7 hereof.
The Placement Agent's Warrant shall be deemed to have been exercised, in whole
or in part to the extent specified, immediately prior to the close of business
on the date the Placement Agent's Warrant is surrendered and payment is made in
accordance with the foregoing provisions of this Section 2, and the person or
persons in whose name or names the certificates for the Shares shall be issuable
upon such exercise shall become the holder or holders of record of such Shares
at that time and date. The Shares and the certificates for the Shares so
purchased shall be delivered to the Holder within a reasonable time, not
exceeding ten (10) business days, after the rights represented by this Placement
Agent's Warrant shall have been so exercised.

            (b) Notwithstanding anything to the contrary contained in Section
2(a), the Holder may elect to exercise this Placement Agent's Warrant in whole
or in part on a "cashless exercise basis" by receiving Shares equal to the value
(as determined below) of this Placement Agent's Warrant, or any part hereof,
upon surrender of the Placement Agent's Warrant at the principal office of the
Company together with notice of such election in which event the Company shall
issue to the Holder a number of Shares computed using the following formula:

                                 X = Y(A-B)
                                     ------
                                       A

      Where:      X = the number of Shares to be issued to the Holder;

                  Y = the number of Shares issuable upon exercise of this
                      Placement Agent's Warrant or, if only a portion of this
                      Placement Agent's Warrant is being exercised, the portion
                      of this Placement Agent's Warrant being canceled (at the
                      date of such calculation);

                  A = the fair market value of one share of Common Stock (at the
                      date of such calculation);

                                       2
<PAGE>

                  B = the Exercise Price (as adjusted to the date of such
                      calculation).

For the purpose of any computation under this Subsection 2(b), the fair market
value per share of Common Stock at any date shall be deemed to be the Closing
Price of the Common Stock on the Trading Day immediately preceding the date as
of which the fair market value is being determined, provided that if the Common
Stock is not then listed on any market or exchange, then the fair market value
shall be the average of the closing bid prices for the Common Stock on the OTC
Bulletin Board, or, if such is not available, the Pink Sheets LLC (formerly the
National Quotation Bureau), or otherwise the average of the closing bid prices
for the Common Stock quoted by two market-makers of the Common Stock, or
otherwise such fair market value shall be determined in good faith by the
Corporation and the Holders. "TRADING DAY" shall mean any day on which the
principal United States securities exchange or trading market on which the
Common Stock is listed or traded (the "PRINCIPAL MARKET") as reported by
Bloomberg Financial Markets ("BLOOMBERG'S") is open for trading. "CLOSING PRICE"
shall mean the last sale price for the Common Stock on the Principal Market on
any particular Trading Day.

      3. TRANSFER. (a) The Placement Agent's Warrant shall not be sold,
transferred, assigned, or hypothecated for a period of one (1) year commencing
on the Closing Date, except that it may be transferred to successors of the
Holder.

            (b) Any transfer of this Placement Agent's Warrant shall be effected
by the Holder by (i) executing the form of assignment at the end hereof and (ii)
surrendering the Placement Agent's Warrant for cancellation at the office or
agency of the Company referred to in Section 2 hereof, accompanied by (x) a
written instrument of transfer in form reasonably satisfactory by the Company,
duly executed by the registered Holder thereof or by the duly appointed legal
representative thereof or by a duly authorized attorney-in-fact, (y) a
certificate (signed by an officer of the Holder if the Holder is a corporation)
stating that each transferee is a permitted transferee under this Section 3; and
(z) an opinion of counsel, reasonably satisfactory in form and substance to the
Company, to the effect that this Placement Agent's Warrant or the Shares, as
applicable, may be sold or otherwise transferred without registration under the
Securities Act of 1933, as amended (the "ACT").

            Upon any transfer of this Placement Agent's Warrant or any part
thereof in accordance with the first sentence of this Section 3(b), the Company
shall issue, in the name or names specified by the Holder (including the
Holder), a new Placement Agent's Warrant or Warrants of like tenor and
representing in the aggregate rights to purchase the same number of Shares as
are purchasable hereunder at such time.

            (c) Any attempted transfer of this Placement Agent's Warrant or any
part thereof in violation of this Section 3 shall be null and void ab initio.

      4. SHARES TO BE FULLY PAID; RESERVATION OF SHARES. The Company covenants
and agrees that all Shares which may be purchased hereunder will, upon issuance
and delivery against payment therefor of the requisite purchase price, be duly
and validly issued, fully paid and nonassessable. The Company further covenants
and agrees that, during the periods within which the Placement Agent's Warrant
may be exercised, the Company will at all times have authorized and reserved a
sufficient

                                       3
<PAGE>

number of shares of its Common Stock to provide for the exercise of the
Placement Agent's Warrant.

      5. NO VOTING OR DIVIDEND RIGHTS. The Placement Agent's Warrant shall not
entitle the Holder to any voting rights or other rights, including without
limitation notice of meetings of other actions or receipt of dividends, as a
stockholder of the Company.

      6. REGISTRATION RIGHTS. The Company covenants and agrees that, during the
periods within which the Placement Agent's Warrant may be exercised, the Company
will, upon the written request of the Placement Agent, use its commercially
reasonable efforts to amend or supplement the registration statement filed on
Form S-3 in connection with the offering of the Common Stock that is subject to
the Placement Agent Agreement in order to include any additional information as,
in the opinion of counsel to the Placement Agent, may be required to permit a
public offering of all or any of the Shares underlying the Placement Agent's
Warrant (the "REGISTRABLE SECURITIES"). In the event that, during any such
periods, the Registrable Securities may not be publicly offered under such
registration statement, the Holders of Placement Agent's Warrants shall have the
following registration rights:

            (a) Except as provided in Section 6(b), the Company shall advise the
Holder or its permitted transferee, whether the Holder holds the Placement
Agent's Warrant or has exercised the Placement Agent's Warrant and holds Shares,
by written notice at least ten (10) business days prior to the filing of any new
registration statement thereto under the Act, covering any equity securities of
the Company, for its own account or for the account of others, except for any
registration statement filed on Form S-4 or S-8 (or other comparable form), and
will, during the four (4) year period beginning on the First Anniversary Date,
upon the request of the Holder, include in any such new registration statement
(the "REGISTRATION STATEMENT") such information as may be required to permit a
public offering of, all or any of the Registrable Securities.

            (b) At any time during the four (4) year period beginning on the
First Anniversary Date, a 50% Holder (as defined below) may request that the
Company register under the Act any and all of the Registrable Securities held by
such 50% Holder, at the Company's expense (except as provided below). Except as
otherwise expressly provided herein, the holders of Registrable Securities may
exercise the demand registration rights provided in this Section 6(b) only on
one occasion. Upon the receipt of any such notice, the Company will promptly,
but no later than four weeks after receipt of such notice, file a post-effective
amendment to any existing registration statement or a new registration statement
pursuant to the Act (such post-effective amendment or new registration
statement, a "DEMAND REGISTRATION Statement"), so that such designated
Registrable Securities may be publicly sold under the Act as promptly as
practicable thereafter and the Company shall, subject to Section 6(h), use its
commercially reasonable efforts to cause such Demand Registration Statement to
become effective (including the taking of such reasonable steps as are necessary
to obtain the removal of any stop order) within 120 days after the receipt of
such notice, provided, that such 50% Holder shall furnish the Company with
appropriate information in connection therewith as the Company may reasonably
request in writing. The 50% Holder may, at its option, request the registration
of any of Registrable Securities in a registration statement made

                                       4
<PAGE>

by the Company as contemplated by Section 6(a) or in connection with a request
made pursuant to this Section 6(b), in either case prior to acquisition of the
Shares issuable upon exercise of the Placement Agent's Warrant. Subject to
Section 6(h), within ten days after receiving any such notice pursuant to this
Section 6(b), the Company shall give notice to any other Holders of the
Placement Agent's Warrant, advising that the Company is proceeding with such
Demand Registration Statement and offering to include therein, pursuant to
Section 6(a), the Shares underlying that part of the Placement Agent's Warrant
held by the other Holders, provided that they shall furnish the Company with
such appropriate information (relating to the intentions of such Holders) in
connection therewith as the Company shall reasonably request in writing.

            (c) The term "50% HOLDER" as used in this Section 6 shall mean the
Holder(s) of at least 50% of the Placement Agent's Warrant and/or the Shares
underlying the Placement Agent's Warrant upon the initial issuance of the
Placement Agent's Warrant, as the same may have been adjusted pursuant to
Section 8.

            (d) For so long as the Registrable Securities included in any
Registration Statement or Demand Registration Statement remain unsold, but in
any event not longer than 270 days after the date of effectiveness of such
Registration Statement or Demand Registration Statement (plus the number of
days, if any, that such Registration Statement or Demand Registration Statement
has been suspended pursuant to the provisions of Section 6(h)), the Company
shall, subject to Section 6(h), use its commercially reasonable efforts to (i)
maintain the effectiveness of such Registration Statement or Demand Registration
Statement; (ii) timely file all reports required under the Securities Exchange
Act of 1934, as amended, and the rules and regulations of the Securities and
Exchange Commission (the "COMMISSION") thereunder; (iii) file such
post-effective amendments to the Registration Statement or Demand Registration
Statement as may be necessary so that the Registration Statement or Demand
Registration Statement does not contain any misstatement of a material fact or
omit to state any material fact required to make the statements therein not
misleading; (iv) supply prospectuses and such other documents as any Holder
whose Registrable Securities are included in such Registration Statement or
Demand Registration Statement may reasonably request in order to facilitate the
public sale or other disposition of such Registrable Securities; (v) register
and qualify any of the Registrable Securities for sale in such jurisdictions
within the United States (x) as any such Holder designates and (y) with respect
to which the Company obtained a qualification in connection with its initial
public offering, provided that the nothing in this clause (v) shall require the
Company to qualify to do business as a foreign corporation, submit to taxation
in any jurisdiction or to file a general consent to service of process in any
jurisdiction in which it is not otherwise so qualified or required to file such
a consent at the time; and (vi) do any and all other acts and things which may
be necessary or desirable to enable any such Holder to consummate the public
sale or other disposition of the Registrable Securities included in the
Registration Statement or Demand Registration Statement, all at no expense to
such Holder or the Placement Agent (except as provided in the immediately
following sentence). All costs and expenses in connection with any Registration
Statement or Demand Registration Statement shall be borne by the Company, except
that the Holder(s) shall bear the fees of their own counsel and any other
advisors retained by them and any underwriting discounts or sales or other
commissions applicable to any of the Registrable

                                       5
<PAGE>

Securities sold by them. In connection with any Registration Statement or Demand
Registration Statement, the Company shall furnish indemnification in the manner
provided in Section 7 hereof, and each Holder whose Registrable Securities are
included therein shall furnish information and indemnification in the manner
provided in Section 7. Subject to Section 6(g), the Company shall have the right
to include additional shares of Common Stock to be issued and sold by the
Company in any Demand Registration Statement.

            (e) Notwithstanding the foregoing set forth in this Section 6, the
Company shall not be required to include in any Registration Statement or any
Demand Registration Statement any Registrable Securities which in the opinion of
counsel to the Company (which opinion is reasonably acceptable to counsel to the
Placement Agent) would be saleable without restriction or limitation under the
holding period requirements or volume limitations under Rule 144 (or its
successor) if the Placement Agent's Warrant was exercised pursuant to Section
2(b) herein.

            (f) If any registration pursuant to this Section 6 is in the form of
an underwritten offering, the Company will select and obtain the investment
banker or investment bankers and manager or managers that will administer the
offering. The Company shall (together with each Holder whose Registrable
Securities are included in such offering) enter into an underwriting agreement
in customary form with the managing underwriter selected for such underwriting.
If any Holder disapproves of the terms of the underwriting, it may elect to
withdraw therefrom by written notice to the Company and the managing
underwriter, and upon such withdrawal the original request of such Holder to
cause Registrable Securities to be registered shall not be deemed to constitute
a request for registration pursuant to Section 6(b), provided that the
withdrawal of one or more Holders shall not affect the determination of whether
any request made pursuant to Section 6(b) was made by a 50% Holder, and provided
further that if all Holders who have requested inclusion of their shares in a
Demand Registration pursuant to Section 6(b) withdraw their Registrable
Securities, then, notwithstanding anything to the contrary in this Placement
Agent's Warrant, any Holders who request registration of Registrable Securities
pursuant to Section 6(b) in the future shall be responsible for and pay all
expenses incurred by the Company in connection with such future registration.

            (g) (i) In the event that any registration pursuant to Section 6(a)
shall be in connection with an underwritten offering, and the managing
underwriter determines in good faith and advises in writing that the number of
Registrable Securities to be included in such offering, together with the number
of shares of Common Stock to be included in the Registration Statement by the
Company or other holders of the Company's securities with the right to request
inclusion in the Registration Statement, if any, exceeds the number of shares of
Common Stock that it is advisable to offer and sell at such time or would
interfere with the successful marketing of the Common Stock covered by the
Registration Statement, then priority for including shares of Common Stock in
the Registration Statement, up to the number advised by the managing
underwriter, shall be allocated first, to the Company and each other person who
has requested inclusion of shares of Common Stock pursuant to a "demand"
registration right, pro rata in proportion to the respective number of shares of
Common Stock to be included by them, and second, to the extent of any remaining
capacity as advised by the

                                       6
<PAGE>

managing underwriter, to the Holders requesting registration of their
Registrable Securities and each other person who has requested inclusion of
shares of Common Stock pursuant to a "piggyback" registration right, pro rata in
proportion to the respective number of shares of Common Stock (including
Registrable Securities) to be included by them. (ii) In the event that any
registration pursuant to Section 6(b) shall be in connection with an
underwritten offering, and the managing underwriter determines in good faith and
advises in writing that the number of Registrable Securities to be included in
such offering, together with the number of shares of Common Stock to be included
in the Demand Registration Statement by the Company or other holders of the
Company's securities with the right to request inclusion in the Demand
Registration Statement, if any, exceeds the number of shares of Common Stock
that it is advisable to offer and sell at such time or would interfere with the
successful marketing of the Common Stock covered by the Demand Registration
Statement, then priority for including shares of Common Stock in the Demand
Registration Statement, up to the number advised by the managing underwriter,
shall be allocated first, to the 50% Holder and each other person who has
requested inclusion of shares of Common Stock pursuant to a "demand"
registration right, pro rata in proportion to the respective number of shares of
Common Stock to be included by them, and second, to the extent of any remaining
capacity as advised by the managing underwriter, to the Company and each other
person (including any Holder who is not a 50% Holder and who requests inclusion
of Registrable Securities in the Demand Registration Statement pursuant to
Section 6(a)) who has requested inclusion of shares of Common Stock pursuant to
a "piggyback" registration right, pro rata in proportion to the respective
number of shares of Common Stock (including Registrable Securities) to be
included by them.

            (h) In any registration initiated by the Company or by any person
having "demand" registration rights (other than a 50% Holder exercising such
rights pursuant to Section 6(b)) in which Holders request inclusion of their
Registrable Securities pursuant to Section 6(a), if at any time after giving
notice of its intention to register securities and prior to the effective date
of the Registration Statement the Company or such other person shall determine
for any reason not to register or to delay registration of it securities, the
Company may, at its election, give written notice of such determination to each
Holder that has requested inclusion of Registrable Securities in the
Registration Statement and (x) in the case of a determination not to register,
shall be relieved of its obligation to register any Registrable Securities in
connection with such registration and (y) in the case of a determination to
delay registering, shall be permitted to delay registering any Registrable
Securities for the same period as the delay in registering such other
securities. If (i) at any time when a prospectus relating to Registrable
Securities is required to be delivered under the Act, the Company discovers
that, or any event occurs as a result of which, the prospectus (including any
supplement thereto) included in any Registration Statement or Demand
Registration Statement, as then in effect, includes an untrue statement of a
material fact or omits to state any material fact required to be stated therein
or necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, or (ii) the Commission issues any
stop order suspending the effectiveness of any Registration Statement or
proceedings are initiated or threatened for that purpose, then the Company shall
promptly deliver a written notice to such effect to each Holder whose
Registrable

                                       7
<PAGE>

Securities are included in such Registration Statement or Demand Registration
Statement, and each such Holder shall immediately upon receipt of such notice
discontinue its disposition of Registrable Securities pursuant to such
Registration Statement or Demand Registration Statement until its receipt of the
copies of the supplemented or amended prospectus contemplated by the immediately
following sentence and, if so directed by the Company, shall deliver to the
Company (at the Company's expense) all copies, other than permanent file copies,
then in such Holder's possession of the prospectus or prospectus supplement
relating to such Registrable Securities current at the time of receipt of such
notice. As promptly as practicable following the event or discovery referred to
in clause (i) of the immediately preceding sentence, the Company shall prepare
and furnish to the Holders whose Registrable Securities are included in such
Registration Statement or Demand Registration Statement a reasonable number of
copies of an amendment or supplement of such prospectus so that, as thereafter
delivered to purchasers of such Registrable Securities, such prospectus shall
not include an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading.
Notwithstanding anything to the contrary in this Section 6 if the filing or
maintenance of any Registration Statement or Demand Registration Statement would
require the Company to make a disclosure that would, in the reasonable judgment
of the Company's Board of Directors, have a material adverse effect on the
business, operations, properties, prospects or financial condition of the
Company or on pending or imminent transactions, the Company shall have the
right, exercisable for a period not to exceed in the aggregate 60 consecutive
calendar days in any period of twelve consecutive months (the "Blackout Period")
upon written notice to the Holders, to delay the filing of any Registration
Statement or Demand Registration Statement or of any amendment thereto, to
suspend its obligation to maintain the effectiveness of any Registration
Statement or Demand Registration Statement and to suspend the use of any
prospectus or prospectus supplement in connection with any Registration
Statement or Demand Registration Statement. Each Holder agrees that upon receipt
of any such notice from the Company, it shall immediately cease all efforts to
dispose of Registrable Securities pursuant to such Registration Statement or
Demand Registration Statement until such time as the Company shall notify it of
the end of such restrictions or, if earlier, the expiration of the Blackout
Period.

            7. INDEMNIFICATION. (a) Whenever pursuant to Section 6 a
Registration Statement or Demand Registration Statement relating to any Shares
issued upon exercise of the Placement Agent's Warrant is filed under the Act,
amended or supplemented, the Company will indemnify and hold harmless each
Holder of the securities covered by such Registration Statement or Demand
Registration Statement, amendment or supplement (such Holder being hereinafter
called the "DISTRIBUTING HOLDER"), and each person, if any, who controls (within
the meaning of the Act) the Distributing Holder, and each underwriter (within
the meaning of the Act) of such securities and each person, if any, who controls
(within the meaning of the Act) any such underwriter, against any losses,
claims, damages or liabilities, joint or several, to which the Distributing
Holder, any such controlling person or any such underwriter may become subject,
under the Act or otherwise, insofar as such losses, claims, damages or
liabilities, or actions in respect thereof, arise out of or are based upon (i)
any untrue statement or alleged untrue

                                       8
<PAGE>

statement of any material fact contained in any such Registration Statement or
Demand Registration Statement as declared effective or any final prospectus
constituting a part thereof or any amendment or supplement thereto, (ii) the
omission or the alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading or
(iii) any act or failure to act, or any alleged act or failure to act, by any
Distributing Holder in connection with, or relating in any manner to, the
Registration Statement or Demand Registration Statement or the offering
contemplated thereby, and which is included as part of or referred to in any
loss, claim, damage, liability or action arising out of or based upon matters
covered by clause (i) or (ii) above; (provided that the Company shall not be
liable in the case of any matter covered by this clause (iii) to the extent that
it is determined in a final judgment by a court of competent jurisdiction that
such loss, claim, damage, liability or action resulted directly from any such
act or failure to act undertaken or omitted to be taken by such Distributing
Holder through its gross negligence or willful misconduct) and will reimburse
the Distributing Holder or such controlling person or underwriter promptly upon
demand for any legal or other expense reasonably incurred by them in connection
with investigating or defending any such loss, claim, damage, liability or
action as such expenses are incurred; provided, however, that the Company will
not be liable in any such case to the extent that any such loss, claim, damage,
liability or action arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission made in said
Registration Statement or Demand Registration Statement, said preliminary
prospectus, said final prospectus or said amendment or supplement in reliance
upon and in conformity with written information furnished by such Distributing
Holder or any other Distributing Holder for use in the preparation thereof and
provided further, that the indemnity agreement provided in this Section 7(a)
with respect to any preliminary prospectus shall not inure to the benefit of any
Distributing Holder, controlling person of such Distributing Holder, underwriter
or controlling person of such underwriter from whom the person asserting any
losses, claims, charges, liabilities or litigation based upon any untrue
statement or alleged untrue statement of a material fact or omission or alleged
omission to state therein a material fact, received such preliminary prospectus,
if a copy of the prospectus in which such untrue statement or alleged untrue
statement or omission or alleged omission was corrected has not been sent or
given to such person within the time required by the Act and the rules and
regulations of the Commission thereunder. This indemnity agreement is not
exclusive and will be in addition to any liability, which the Company might
otherwise have and shall not limit any rights or remedies that may otherwise be
available at law or in equity to each Distributing Holder.

            (b) The Distributing Holder will indemnify and hold harmless the
Company, each of its directors, each of its officers who have signed said
Registration Statement or Demand Registration Statement and such amendments and
supplements thereto, and each person, if any, who controls the Company (within
the meaning of the Act) against any losses, claims, damages or liabilities,
joint or several, to which the Company or any such director, officer or
controlling person may become subject, under the Act or otherwise, insofar as
such losses, claims, damages or liabilities, or actions in respect thereof,
arise out of or are based upon (i) any untrue or alleged untrue statement of any
material fact contained in said Registration Statement or Demand Registration

                                       9
<PAGE>

Statement, said preliminary prospectus, said final prospectus, or said amendment
or supplement, or (ii) are based upon the omission or the alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, in each case to the extent, but only to
the extent, that such loss, claim, damage or liability arises out of or is based
upon an untrue statement or alleged untrue statement or omission or alleged
omission made in said Registration Statement or Demand Registration Statement,
said preliminary prospectus, said final prospectus or said amendment or
supplement in reliance upon and in conformity with written information furnished
by such Distributing Holder for use in the preparation thereof; and will
reimburse the Company or any such director, officer or controlling person for
any legal or other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage, liability or action as
such expenses are incurred. This indemnity agreement is not exclusive and will
be in addition to any liability, which each Distributing Holder might otherwise
have and shall not limit any rights or remedies that may otherwise be available
at law or in equity to the Company.

            (c) Promptly after receipt by an indemnified party under this
Section 7 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against an indemnifying party
under this Section 7, notify the indemnifying party in writing of the
commencement thereof, but the omission so to notify the indemnifying party will
not relieve it from any liability which it may have to any indemnified party for
indemnity or contribution to the extent it is not prejudiced as a proximate
result of such failure. In case any such action is brought against any
indemnified party, and such indemnified party seeks or intends to seek indemnity
from an indemnifying party, the indemnifying party will be entitled to
participate in, and, to the extent that it shall elect, jointly with any other
indemnifying party similarly notified, by written notice delivered to the
indemnified party promptly after receiving the aforesaid notice from such
indemnified party, to assume the defense thereof with counsel reasonably
satisfactory to such indemnified party; provided, however, if the defendants in
any such action include both the indemnified party and the indemnifying party
and the indemnified party shall have reasonably concluded that a conflict may
arise between the positions of the indemnifying party and the indemnified party
in conducting the defense of any such action or that there may be legal defenses
available to it and/or other indemnified parties which are different from or
additional to those available to the indemnifying party, the indemnified party
or parties shall have the right to select separate counsel to assume such legal
defenses and to otherwise participate in the defense of such action on behalf of
such indemnified party or parties. Upon receipt of notice from the indemnifying
party to such indemnified party of such indemnifying party's election so to
assume the defense of such action and approval by the indemnified party of
counsel (which approval shall not be unreasonably withheld or delayed), the
indemnifying party will not be liable to such indemnified party under this
Section 7 for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof unless: (i) the
indemnified party shall have employed separate counsel in accordance with the
proviso to the next preceding sentence (it being understood, however, that the
indemnifying party shall not be liable for the expenses of more than one
separate counsel (together with local counsel), representing the indemnified
parties who are parties to such action); (ii) the indemnifying party shall not
have employed counsel

                                       10
<PAGE>

satisfactory to the indemnified party to represent the indemnified party within
a reasonable time after notice of commencement of the action; or (iii) the
indemnifying party has authorized the employment of counsel for the indemnified
party satisfactory to the indemnified party at the expense of the indemnifying
party, in each of which cases the fees and expenses of counsel shall be at the
expense of the indemnifying party.

            (d) The indemnifying party under this Section 7 shall not be liable
for any settlement of any proceeding effected without its written consent, which
consent shall not be unreasonably withheld or delayed, but if settled with such
consent or if there be a final judgment for the plaintiff, the indemnifying
party agrees to indemnify the indemnified party against any loss, claim, damage,
liability or expense by reason of such settlement or judgment. No indemnifying
party shall, without the prior written consent of the indemnified party, effect
any settlement, compromise or consent to the entry of judgment in any pending or
threatened action, suit or proceeding in respect of which any indemnified party
is or could have been a party and indemnity was or could have been sought
hereunder by such indemnified party, unless such settlement, compromise or
consent includes: (i) an unconditional release of such indemnified party from
all liability on claims that are the subject matter of such action, suit or
proceeding; and (ii) does not include a statement as to or an admission of
fault, culpability or a failure to act by or on behalf of any indemnified party.

            (e) Any losses, claims, damages, liabilities or expenses for which
an indemnified party is entitled to indemnification or contribution under this
Section 7 shall be paid by the indemnifying party to the indemnified party as
such losses, claims, damages, liabilities or expenses are incurred, but in all
cases, no later than forty-five (45) days after invoice to the indemnifying
party.

            (f) If the indemnification provided for in this Section 7 is
unavailable to or insufficient to hold harmless an indemnified party under
Section 7(a) or 7(b) above in respect of any losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) then each
indemnifying party shall contribute to the aggregate amount paid or payable by
such indemnified party in such proportion as is appropriate to reflect the
relative fault of such indemnifying party on the one hand and the Distributing
Holder on the other in connection with the statements or omissions which
resulted in such losses, claims, damages or liabilities (or actions or
proceedings in respect thereof), as well as any other relevant equitable
considerations. The relative fault shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to
information supplied by the Company or the "control" stockholders on the one
hand or the Distributing Holder on the other and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.

      The Company and each Distributing Holder agree that it would not be just
and equitable if contributions pursuant to this Section 7(f) were determined by
pro rata allocation or by any other method of allocation which does not take
account of the equitable considerations referred to above in this Section 7(f).
The amount paid or payable by an indemnified party as a result of the losses,
claims, damages or liabilities (or actions or proceedings in respect thereof)
referred to above in this Section 7(f) shall be deemed to include any legal or
other expenses reasonably incurred by such indemnified

                                       11
<PAGE>

party in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 7(f): (i) each Distributing
Holder shall not be required to contribute any amount in excess of the amount of
proceeds received by such Holder from sale(s) of such Holder's Shares pursuant
to the Registration Statement or Demand Registration Statement; and (ii) no
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation.

      8. ADJUSTMENT OF EXERCISE PRICE. The Exercise Price in effect at the time
and the number and kind of securities purchasable upon the exercise of the
Warrant shall be subject to adjustment from time to time upon the happening of
certain events as follows:

            (a) In case the Company shall (i) declare a dividend or make a
distribution on its outstanding shares of Common Stock in shares of Common
Stock, (ii) subdivide or reclassify its outstanding shares of Common Stock into
a greater number of shares, (iii) combine or reclassify its outstanding shares
of Common Stock into a smaller number of shares, or (iv) enter into any
transaction whereby the outstanding shares of Common Stock of the Company are at
any time changed into or exchanged for a different number or kind of shares or
other security of the Company or of another corporation through reorganization,
merger, consolidation, liquidation or recapitalization, then appropriate
adjustments in the number of Shares (or other securities for which such Shares
have previously been exchanged or converted) subject to this Placement Agent's
Warrant shall be made and the Exercise Price in effect at the time of the record
date for such dividend or distribution or of the effective date of such
subdivision, combination, reclassification, reorganization, merger,
consolidation, liquidation or recapitalization shall be proportionately adjusted
so that the Holder of this Placement Agent's Warrant exercised after such date
shall be entitled to receive the aggregate number and kind of shares of Common
Stock which, if this Placement Agent's Warrant had been exercised by such Holder
immediately prior to such date, the Holder would have been entitled to receive
upon such dividend, distribution, subdivision, combination, reclassification,
reorganization, merger, consolidation, liquidation or recapitalization. For
example, if the Company declares a 2 for 1 stock distribution and the Exercise
Price hereof immediately prior to such event was $7.00 per Share and the number
of Shares issuable upon exercise of this Placement Agent's Warrant was 85,500,
the adjusted Exercise Price immediately after such event would be $3.50 per
Share and the adjusted number of Shares issuable upon exercise of this Placement
Agent's Warrant would be 171,000. Such adjustment shall be made successively
whenever any event listed above shall occur.

            (b) Whenever the Exercise Price is adjusted, as herein provided, the
Company shall promptly cause a notice setting forth the adjusted Exercise Price
and adjusted number of Shares issuable upon exercise of the Placement Agent's
Warrant to be mailed to the Holder, at its address set forth herein, and shall
cause a certified copy thereof to be mailed to the Company's transfer agent, if
any. The Company may retain a firm of independent certified public accountants
selected by the Board of Directors (who may be the regular accountants employed
by the Company) to make any computation required by this Section 8, and a
certificate signed by such firm shall be conclusive evidence of the correctness
of such adjustment.

                                       12
<PAGE>

            (c) In the event that at any time, as a result of an adjustment made
pursuant to the provisions of this Section 8, the Holder of the Placement
Agent's Warrant thereafter shall become entitled to receive any shares of the
Company other than Common Stock, thereafter the number of such other shares so
receivable upon exercise of the Placement Agent's Warrant shall be subject to
adjustment from time to time in a manner and on terms as nearly equivalent as
practicable to the provisions with respect to the Common Stock contained in
Sections 8(a) above.

      9. GOVERNING LAW. This Agreement shall be governed by and in accordance
with the laws of the State of New York without regard to conflicts of laws
principles thereof.

      10. BINDING EFFECT ON SUCCESSORS. In case of any consolidation of the
Company with, or merger of the Company into, any other entity, or in case of any
sale or conveyance of all or substantially all of the assets of the Company
other than in connection with a plan of complete liquidation of the Company at
any time prior to the Expiration Date, then as a condition of such
consolidation, merger or sale or conveyance, the Company shall give written
notice of consolidation, merger, sale or conveyance to the Holder and, from and
after the effective date of such consolidation, merger, sale or conveyance the
Placement Agent's Warrant shall represent only the right to receive the
consideration that would have been issuable in respect of the Shares underlying
the Placement Agent's Warrant in such consolidation, merger, sale or conveyance
had the Placement Agent's Warrant been exercised in full immediately prior to
such effective time and the Holder shall have no further rights under this
Placement Agent's Warrant other than the right to receive such consideration.

      11. FRACTIONAL SHARES. No fractional shares shall be issued upon exercise
of this Placement Agent's Warrant. The Company shall, in lieu of issuing any
fractional share, pay the holder entitled to such fraction a sum in cash equal
to such fraction multiplied by the then effective Exercise Price.

      12. LOST WARRANTS. The Company represents and warrants to the Holder
hereof that upon receipt of evidence reasonably satisfactory to the Company of
the loss, theft, destruction, or mutilation of this Warrant and, in the case of
any such loss, theft or destruction, upon receipt of an indemnity reasonably
satisfactory to the Company, or in the case of any such mutilation upon
surrender and cancellation of such Warrant, the Company, at its expense, will
make and deliver a new Warrant, of like tenor, in lieu of the lost, stolen,
destroyed or mutilated Warrant.

      13. HEADINGS. The headings of the several sections and paragraphs of this
Warrant are inserted for convenience only and do not constitute a part of this
Warrant.

      14. MODIFICATION AND WAIVER. This Warrant and any provision hereof may be
changed, waived, discharged or terminated only by an instrument in writing
signed by the party against which enforcement of the same is sought.

      15. SURVIVAL. The rights and obligations of the Company, of the holder of
this Warrant and of the holder of Shares issued upon exercise of this Warrant
shall survive the exercise of this Warrant.

                                       13
<PAGE>

      IN WITNESS WHEREOF, the Company has caused this Placement Agent's Warrant
to be signed by its duly authorized officers under its corporate seal, and this
Placement Agent's Warrant to be dated May 18, 2004.

                                         NORTHFIELD LABORATORIES INC.

                                         By:______________________________
                                             Name:
                                             Title:

                                       14
<PAGE>

                                  PURCHASE FORM

                  (To be signed only upon exercise of Warrant)

      The undersigned, the holder of the foregoing Placement Agent's Warrant,
hereby irrevocably elects to exercise the purchase rights represented by such
Warrant for, and to purchase thereunder, _______________ shares of Common Stock,
$0.01 par value per share (the "SHARES"), of NORTHFIELD LABORATORIES INC. and
either

[ ] tenders herewith payment of the aggregate Exercise Price in respect of the
Shares in full, in the amount of $_________; or

[ ] elects pursuant to Section 2(b) of such Warrant to convert such Warrant into
Common Stock on a cashless exercise basis; and

      requests that the certificates for the Shares issued in the name(s) of,
and delivered to _________________, whose address(es) is (are):

      Dated:__________________________

                        By: __________________________

                            __________________________

                            __________________________
                            Address

<PAGE>

                                  TRANSFER FORM

         (To be signed only upon transfer of Placement Agent's Warrant)

      For value received, the undersigned hereby sells, assigns, and transfers
unto ______________________________ the right to purchase Shares represented by
the foregoing Placement Agent's Warrant to the extent of __________ Shares, and
appoints _________________________ attorney to transfer such rights on the books
of Northfield Laboratories Inc., with full power of substitution in the
premises. The undersigned believes that each transferee is a permitted
transferee under Section 3 of the Placement Agent's Warrant.

      Dated: ____________________________

                  By:       __________________________

                            __________________________

                            __________________________
                            Address

In the presence of:

__________________________

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