Document:

Exhibit
4.1

     

    ADVAXIS,
INC.

     

    CERTIFICATE
OF DESIGNATIONS OF PREFERENCES,

    RIGHTS
AND LIMITATIONS

    OF

    SERIES A
PREFERRED STOCK

     

    The
undersigned, Thomas A. Moore, hereby certifies that:

     

    1.           He
is the Chief Executive Officer of Advaxis, Inc., a
Delaware corporation (the “Corporation”).

     

    2.           The
Corporation is authorized to issue 5,000,000 shares of
preferred stock, none of which are issued or outstanding.

     

    3.           The
following resolutions were duly adopted by the Board of Directors:

     

    WHEREAS,
the Certificate of Incorporation of the Corporation provides for a class of its
authorized stock known as preferred stock, comprised of 5,000,000 shares,
$0.001 par value per share (the Preferred Stock”),
issuable from time to time in one or more series;

     

    WHEREAS,
the Board of Directors of the Corporation is authorized to fix the dividend
rights, dividend rate, voting rights, conversion rights, rights and terms of
redemption and liquidation preferences of any wholly unissued series of
Preferred Stock and the number of shares constituting any series and the
designation thereof, of any of them; and

     

    WHEREAS,
it is the desire of the Board of Directors of the Corporation, pursuant to its
authority as aforesaid, to fix the rights, preferences, restrictions and other
matters relating to a series of Preferred Stock, which shall consist of up to
1000 shares of
the Preferred Stock which the Corporation has the authority to issue, as
follows:

     

    NOW,
THEREFORE, BE IT RESOLVED, that the Board of Directors does hereby provide for
the issuance of a series of Preferred Stock for cash or exchange of other
securities, rights or property and does hereby fix and determine the rights,
preferences, restrictions and other matters relating to such series of Preferred
Stock as follows:

     

    TERMS OF
PREFERRED STOCK

     

    1.           Designation, Amount and Par
Value.  The series of Preferred Stock shall be designated as
the Corporation’s Series A Preferred Stock (the “Series A Preferred
Stock”) and the number of shares so designated shall be 1000 (which shall
not be subject to increase without the consent of all of the holders of the
Series A Preferred Stock (each a “Holder” and
collectively, the “Holders”).  Each
share of Series A Preferred Stock shall have a par value of $0.001 per
share.

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    2.           Ranking.  The
Series A Preferred Stock shall, with respect to dividend rights and rights upon
liquidation, winding-up or dissolution, rank:

     

    a.           senior
to the Corporation’s common stock, par value $0.001 per share (“Common Stock”), and
any other class or series of Preferred Stock of the Corporation other than a
class or series of Preferred Stock of the Corporation that the Corporation
intends to cause to be listed for trading or quoted on any one of the NASDAQ
Capital Market, the NASDAQ Global Market, the NASDAQ Global Select Market, the
NYSE Amex, or the New York Stock Exchange (collectively, together with any
warrants, rights, calls or options exercisable for or convertible into such
Preferred Stock, the “Junior Shares”);
and

     

    b.           junior
to all existing and future indebtedness of the Corporation and any class or
series of Preferred Stock of the Corporation that the Corporation intends to
cause to be listed for trading or quoted on any one of the NASDAQ Capital
Market, the NASDAQ Global Market, the NASDAQ Global Select Market, the NYSE
Amex, or the New York Stock Exchange (collectively, together with any warrants,
rights, calls or options exercisable for or convertible into such Preferred
Stock, the “Senior
Shares”).

     

    3.           Dividends and Other
Distributions.  Commencing on the date of the issuance of any
such shares of Series A Preferred Stock (each respectively an “Issuance Date”),
Holders of Series A Preferred Stock shall be entitled to receive dividends on
each outstanding share of Series A Preferred Stock (“Dividends”), which
shall accrue in shares of Series A Preferred Stock at a rate equal to 10.0% per
annum.

     

    a.           Any
calculation of the amount of such Dividends payable pursuant to the provisions
of this Section 3 shall be made based on a 365-day year and on the number of
days actually elapsed during the applicable calendar quarter, compounded
annually.

     

    b.           So
long as any shares of Series A Preferred Stock are outstanding, no dividends or
other distributions will be paid, declared or set apart with respect to any
Junior Shares.  The Common Stock shall not be redeemed while the
Series A Preferred Stock is outstanding.

     

    4.           Protective
Provision.  So long as any shares of Series A Preferred Stock
are outstanding, the Corporation shall not, without the affirmative approval of
the Holders of a majority of the shares of the Series A Preferred Stock then
outstanding, (a) alter or change adversely the powers, preferences or rights
given to the Series A Preferred Stock or alter or amend this Certificate of
Designations, (b) authorize or create any class of stock ranking as to
distribution of assets upon a liquidation senior to or otherwise pari passu with
the Series A Preferred Stock (other than Senior Shares), (c) amend its
certificate or articles of incorporation or other charter documents in breach of
any of the provisions hereof, (d) increase the authorized number of shares of
Series A Preferred Stock, (e) liquidate, dissolve or wind-up the business and
affairs of the  Corporation, or effect any Deemed Liquidation Event
(as defined below), or (f) enter into any agreement with respect to the
foregoing.

    
      
         

      

      
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    a.           A
“Deemed Liquidation
Event” shall mean:  (i) a merger or consolidation in which the
Corporation is a constituent party or a subsidiary of the Corporation is a
constituent party and the Corporation issues shares of its capital stock
pursuant to such merger or consolidation, except any such merger or
consolidation involving the Corporation or a subsidiary in which the shares of
capital stock of the Corporation outstanding immediately prior to such merger or
consolidation continue to represent, or are converted into or exchanged for
shares of capital stock that represent, immediately following such merger or
consolidation, at least a majority, by voting power, of the capital stock of the
surviving or resulting corporation or if the surviving or resulting corporation
is a wholly owned subsidiary of another corporation immediately following such
merger or consolidation, the parent corporation of such surviving or resulting
corporation; or (ii) the sale, lease, transfer, exclusive license or other
disposition, in a single transaction or series of related transactions, by the
Corporation or any subsidiary of the Corporation of all or substantially all the
assets of the Corporation and its subsidiaries taken as a whole,  or
the sale or disposition (whether by merger or otherwise) of one or more
subsidiaries of the Corporation if substantially all of the assets of the
Corporation and its subsidiaries taken as a whole are held by such subsidiary or
subsidiaries, except where such sale, lease, transfer, exclusive license or
other disposition is to a wholly owned subsidiary of the
Corporation.

     

    b.           The
Corporation shall not have the power to effect a Deemed Liquidation Event
referred to in Section 4(a) unless the agreement or plan of merger or
consolidation for such transaction provides that the consideration payable to
the stockholders of the Corporation shall be allocated among the holders of
capital stock of the Corporation in accordance with Section
5.

     

    5.           Liquidation.

     

    a.           Upon
any liquidation, dissolution or winding up of the Corporation, whether voluntary
or involuntary, after payment or provision for payment of debts and other
liabilities of the Corporation, before any distribution or payment shall be made
to the holders of any Junior Shares by reason of their ownership thereof, but
after any distribution or payment to be made to the holders of any Senior
Shares, the Holders of Series A Preferred Stock shall be entitled to be paid out
of the assets of the Corporation available for distribution to its stockholders
an amount with respect to each share of Series A Preferred Stock equal to $10,000.00 (the
“Original Series A
Issue Price”), plus any accrued but unpaid Dividends thereon
(collectively, the “Series A Liquidation
Value”).  If, upon any liquidation, dissolution or winding up
of the Corporation, whether voluntary or involuntary, and after any distribution
or payment to be made to the holders of any Senior Shares, the amounts payable
with respect to the shares of Series A Preferred Stock are not paid in full, the
holders of shares of Series A Preferred Stock shall share equally and ratably in
any distribution of assets of the Corporation in proportion to the liquidation
preference and an amount equal to all accumulated and unpaid Dividends, if any,
to which each such holder is entitled.

     

    b.           After
payment has been made to the Holders of the Series A Preferred Stock of the full
amount of the Series A Liquidation Value, any remaining assets of the
Corporation shall be distributed among the holders of the Corporation’s Junior
Shares in accordance with the Corporation’s Certificates of Designation and
Certificate of Incorporation.

     

    c.           If,
upon any liquidation, dissolution or winding up of the Corporation, the assets
of the Corporation shall be insufficient to make payment in full to all Holders,
then such assets shall be distributed among the Holders at the time outstanding,
ratably in proportion to the full amounts to which they would otherwise be
respectively entitled.

    
      
         

      

      
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    6.           Redemption.

     

    a.           Corporation’s Redemption
Option.  Upon or after the fifth anniversary of the initial
Issuance Date, the Corporation shall have the right, at the Corporation’s
option, to redeem all or a portion of the shares of Series A Preferred Stock, at
a price per share of Series A Preferred Stock equal to the Series A Liquidation
Value (the “Corporation Redemption
Price”).

     

    b.           Mechanics of
Redemption.  If the Corporation elects to redeem any of the
Holders’ Series A Preferred Stock then outstanding, it shall deliver written
notice thereof via facsimile and overnight courier (“Notice of Redemption at
Option of Corporation”) to each Holder, which Notice of Redemption at
Option of Corporation shall indicate (A) the number of shares of Series A
Preferred Stock that the Corporation is electing to redeem and (B) the
Corporation Redemption Price.

     

    c.           Payment of Redemption
Price.  Upon receipt by any Holder of a Notice of Redemption at
Option of Corporation, such Holder shall promptly submit to the Corporation such
Holder’s Series A Preferred Stock certificates.  Upon receipt of such
Holder’s Series A Preferred Stock certificates, the Corporation shall pay the
Corporation Redemption Price in cash to such Holder.

     

    7.           Transferability.

     

    a.           The
Series A Preferred Stock constitutes “restricted securities” as such term is
defined in Rule 144(a)(3) under the Act and may only be disposed of in
compliance with U.S. federal securities laws and applicable state securities or
“blue sky” laws.  Without limiting the generality of the foregoing,
the Series A Preferred Stock may not be offered for sale, sold, transferred,
assigned, pledged or otherwise distributed unless (A) subsequently registered
thereunder, (B) Holder shall have delivered to the Corporation an opinion of
counsel reasonably acceptable to the Corporation, in a form generally acceptable
to the Corporation, to the effect that such Series A Preferred Stock to be
offered for sale, sold, transferred, assigned, pledged or otherwise distributed
may be offered for sale, sold, transferred, assigned, pledged or otherwise
distributed pursuant to an exemption from such registration, or (C) Holder
provides the Corporation and its legal counsel with reasonable assurance that
such Series A Preferred Stock can be offered for sale, sold, transferred,
assigned, pledged or otherwise distributed pursuant to Rule 144A promulgated
under the Act;

     

    b.           So
long as is required by this Section 7, the certificates or other instruments
representing the Series A Preferred Stock shall bear any legends as required by
applicable state securities or “blue sky” laws, in addition to the following
restrictive legend (and that a stop-transfer order shall be placed against
transfer of such certificates):

    
      
         

      

      
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    THESE
SECURITIES HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION
OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”),
AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO
SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE
COMPANY.

     

    c.           The
Corporation shall keep at its principal office, or at the offices of the
Transfer Agent, a register of the Series A Preferred Stock.  Upon the
surrender of any certificate representing Series A Preferred Stock at such
place, the Corporation, at the request of the record Holder of such certificate,
shall execute and deliver (at the Corporation’s expense) a new certificate or
certificates in exchange therefor representing in the aggregate the number of
shares represented by the surrendered certificate.  Each such new
certificate shall be registered in such name and shall represent such number of
shares as is requested by the Holder of the surrendered certificate and shall be
substantially identical in form to the surrendered certificate.

     

    8.           Miscellaneous.

     

    a.           Notices.  Any
and all notices to the Corporation shall be addressed to the Corporation’s
President or Chief Executive Officer at the Corporation’s principal place of
business on file with the Secretary of State of the State of
Delaware.  Any and all notices or other communications or deliveries
to be provided by the Corporation to any Holder hereunder shall be in writing
and delivered personally, by facsimile, sent by a nationally recognized
overnight courier service addressed to each Holder at the facsimile telephone
number or address of such Holder appearing on the books of the Corporation, or
if no such facsimile telephone number or address appears, at the principal place
of business of the Holder. Any notice or other communication or deliveries
hereunder shall be deemed given and effective on the earliest of (i) the date of
transmission, if such notice or communication is delivered via facsimile at the
facsimile telephone number specified in this section prior to 5:30 p.m. Eastern
time, (ii) the date after the date of transmission, if such notice or
communication is delivered via facsimile at the facsimile telephone number
specified in this section later than 5:30 p.m. but prior to 11:59 p.m. Eastern
time on such date, (iii) the second business day following the date of mailing,
if sent by nationally recognized overnight courier service, or (iv) upon actual
receipt by the party to whom such notice is required to be given.

     

    b.           Lost or Mutilated Preferred
Stock Certificate.  Upon receipt of evidence reasonably
satisfactory to the Corporation (an affidavit of the registered Holder shall be
satisfactory) of the ownership and the loss, theft, destruction or mutilation of
any certificate evidencing shares of Series A Preferred Stock, and in the case
of any such loss, theft or destruction upon receipt of indemnity reasonably
satisfactory to the Corporation (provided that if the Holder is a financial
institution or other institutional investor its own agreement shall be
satisfactory) or in the case of any such mutilation upon surrender of such
certificate, the Corporation shall, at its expense, execute and deliver in lieu
of such certificate a new certificate of like kind representing the number of
shares of such class represented by such lost, stolen, destroyed or mutilated
certificate and dated the date of such lost, stolen, destroyed or mutilated
certificate.

    
      
         

      

      
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    c.           Headings.  The
headings contained herein are for convenience only, do not constitute a part of
this Certificate of Designations and shall not be deemed to limit or affect any
of the provisions hereof.

     

    RESOLVED,
FURTHER, that the chairman, chief executive officer, president or any
vice-president, and the secretary or any assistant secretary, of the Corporation
be and they hereby are authorized and directed to prepare and file a Certificate
of Designation of Preferences, Rights and Limitations of Series A Preferred
Stock in accordance with the foregoing resolution and the provisions of Delaware
law.

     

    IN
WITNESS WHEREOF, the undersigned have executed this Certificate this 24th day of
September 2009.

     

    
      
        	
                By: 

              	
                /s/ Thomas A. Moore

              
	
                Name:
      Thomas A. Moore

              
	
                Title:
      Chief Executive Officer

              

      

    

    
      
         

      

      
        6Exhibit
10.1

    Execution
Version

     

    PREFERRED STOCK PURCHASE
AGREEMENT

     

    This
Preferred Stock Purchase Agreement (“Agreement”) is
entered into and effective as of September 24, 2009 (“Effective Date”), by
and among Advaxis, Inc., a Delaware corporation (“Company”), and
Optimus Capital Partners, LLC, a Delaware limited liability company, dba Optimus
Life Sciences Capital Partners, LLC (including its designees, successors and
assigns, “Investor”).

     

    RECITALS

     

    A.           The
parties desire that, upon the terms and subject to the conditions contained
herein, the Company shall issue to Investor, and Investor shall purchase from
the Company, from time to time as provided herein, up to $5,000,000.00 of
Preferred Shares (as defined below); and

     

    B.           The
offer and sale of the Securities provided for herein are being made without
registration under the Act (as defined below), in reliance upon the provisions
of Section 4(2) of the Act, Regulation D promulgated under the Act, and such
other exemptions from the registration requirements of the Act as may be
available with respect to any or all of the purchases of Securities to be made
hereunder.

     

    AGREEMENT

     

    In
consideration of the premises, the mutual provisions of this Agreement, and
other good and valuable consideration the receipt and adequacy of which are
hereby acknowledged, Company and Investor agree as follows:

     

    ARTICLE 1

    DEFINITIONS

     

    In
addition to the terms defined elsewhere in this Agreement: (a) capitalized terms
that are not otherwise defined herein have the meanings given to such terms in
the Certificate of Designations, and (b) the following terms have the meanings
indicated in this ARTICLE 1:

     

    “Act” means the
Securities Act of 1933, as amended.

     

    “Action” has the
meaning set forth in Section 4.1(j).

     

    “Affiliate” means any
Person that, directly or indirectly through one or more intermediaries,
controls, is controlled by, or is under common control with a Person, as such
terms are used in and construed under Rule 144 under the Act.  With
respect to Investor, without limitation, any Person owning, owned by, or under
common ownership with Investor, and any investment fund or managed account that
is managed on a discretionary basis by the same investment manager as Investor
will  be deemed to be an Affiliate.

     

    “Agreement” means this
Preferred Stock Purchase Agreement.

     

    “Automatic
Termination” has the meaning set forth in Section
3.1.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    “Certificate of
Designations” means the certificate to be filed with the Secretary of
State of the State of Delaware, in the form attached hereto as Exhibit
B.

     

    “Closing” means any
one of (i) the Commitment Closing and (ii) each Tranche Closing.

     

    “Commitment Closing”
has the meaning set forth in Section
2.2(a).

     

    “Commitment Fee” means
a non-refundable fee of $250,000.00, payable by the Company to Investor, at the
Company’s option, either (i) in cash, by wire transfer of immediately available
funds to an account designated by Investor, with $125,000.00 due on or before
October 28, 2009 and $125,000.00 due on or before the first Tranche Closing Date
(and if paid on the first Tranche Closing Date, payable by offset from the first
Tranche Amount), or (ii) by issuance and delivery of unregistered shares of
Common Stock, issued on or before October 28, 2009 and valued based upon 82% of
the VWAP for the Common Stock on the 5 Trading Days immediately preceding such
date, which shares must be included in the Registration Statement filed by the
Company pursuant to Section 4.1(hh)(i) hereof; provided, however, that if the
Company elects to pay the Commitment Fee in shares of Common Stock pursuant to
clause (ii) above and, on the earlier of the effective date of the Registration
Statement or six months from the issuance date, the VWAP for the Common Stock
falls below the payment date VWAP, then all of the shares of Common Stock that
were paid as the Commitment Fee shall be repriced at 82% of the VWAP for the 5
Trading Days immediately preceding such repricing date.

     

    “Common Stock” means
the common stock, par value $0.001 per share, of the Company, and any
replacement or substitute thereof, or any share capital into which such Common
Stock shall have been changed or any share capital resulting from a
reclassification of such Common Stock.

     

    “Company” means
Advaxis, Inc., a Delaware corporation.

     

    “Company Parties” and
“Company Party”
have the meanings set forth in Section 5.8(b).

     

    “Company Termination”
has the meaning set forth in Section
3.2.

     

    “Conditions to Commitment
Closing” has the meaning set forth in Section 2.2(b).

     

    “Delisting Event”
means any time during the term of this Agreement, that the Common Stock is not
listed for trading or quoted on a Trading Market, or is suspended or delisted
with respect to the trading of shares of Common Stock on a Trading
Market.

     

    “Disclosure Schedules”
means the disclosure schedules of the Company delivered concurrently herewith
and attached hereto.

     

    “DTC” means The
Depository Trust Company, or any successor performing substantially the same
function for Company.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    “DWAC Shares” means
Warrant Shares issued to Investor or any Affiliate, successor or assign of
Investor pursuant to any exercise of the Warrant in electronic form, which
Warrant Shares do not require the imprinting of the restrictive legend(s)
referred to in Section
5.1 as set forth therein at the time of issuance of such Warrant Shares,
and are without restriction on resale at the time of issuance, and delivered by
the Company to the specified Deposit/Withdrawal at Custodian (DWAC) account with
DTC under its Fast Automated Securities Transfer (FAST) Program or any similar
program hereafter adopted by DTC performing substantially the same function, in
accordance with irrevocable instructions issued to and countersigned by the
Transfer Agent, in the form attached hereto as Exhibit
C.

     

    “Effective Date” has
the meaning set forth in the Preamble.

     

    “Evaluation Date” has
the meaning set forth in Section 4.1(r).

     

    “Exchange Act” means
the Securities Exchange Act of 1934, as amended.

     

    “FINRA” has the
meaning set forth in Section 4.1(e).

     

    “Fundamental
Transaction” means and shall be deemed to have occurred at such time upon
any of the following events:

     

    (a)           the
Company shall, directly or indirectly, in one or more related transactions, (i)
consolidate or merge with or into (whether or not the Company is the surviving
corporation) another Person or Persons, (ii) sell, assign, transfer, convey or
otherwise dispose of all or substantially all of the assets of the Company to
another Person, other than in the ordinary course of business, (iii) allow
another Person to make a tender or exchange offer that is accepted by the
holders of more than 50% of the outstanding shares of Common Stock (not
including any shares of Common Stock held by the Person or Persons making or
party to, or associated or affiliated with the Persons making or party to, such
purchase, tender or exchange offer), or (iv) consummate a stock purchase or
other business combination (including, without limitation, a reorganization,
recapitalization, spin-off or scheme of arrangement) with another Person whereby
such other Person acquires more than the 50% of the outstanding shares of Common
Stock (not including any shares of Common Stock held by the other Person or
other Persons making or party to, or associated or affiliated with the other
Persons making or party to, such stock purchase agreement or other business
combination) (other than, in the case of clause (i) above, (A) any such
transaction pursuant to which holders of Common Stock immediately prior to such
transaction (x) continue to hold more than 50% of the outstanding shares of
Common Stock or (y) have the ability to elect a majority of the board of
directors of the Company or (B) any merger or consolidation which is effected
solely to change the jurisdiction of incorporation of the Company, and in the
case of clauses (iii) and (iv) above, any transaction which is effected solely
to change the jurisdiction of incorporation of the Company); or

     

    (b)           any
“person” or “group” (as these terms are used for purposes of Sections 13(d) and
14(d) of the Exchange Act) is or shall become the “beneficial owner” (as defined
in Rule 13d-3 under the Exchange Act), directly or indirectly, of 50% of the
aggregate Common Stock, other than persons or groups who exceed such ownership
level as of the Effective Date and other than in connection with a transaction
which is effected solely to change the jurisdiction of incorporation of the
Company.

    
      
         

      

      
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    “Funding Default”
means a failure by Investor to accept a Tranche Notice delivered by the Company,
provided such
Tranche Notice was delivered in accordance with the terms and conditions of this
Agreement (including the timely and full satisfaction of the conditions to the
obligation of Investor to accept a Tranche Notice set forth in Section 2.3(c) of
this Agreement), and to acquire and pay for the Preferred Shares in accordance
therewith upon delivery of such Preferred Shares to the Investor in accordance
with the terms of this Agreement (and the timely delivery by the Company of the
other Required Tranche Deliveries required to be delivered by it and the timely
and full satisfaction by the Company of all other conditions for the Tranche
Closing required to be satisfied by it as set forth in Sections 2.3(d) and
(e) of this Agreement).

     

    “GAAP” means United
States generally accepted accounting principles applied on a consistent basis
during the periods involved.

     

    “Indebtedness” means
(a) any liabilities for borrowed money or amounts owed in excess of $100,000
(other than trade accounts payable incurred in the ordinary course of business),
(b) all guaranties, endorsements and other contingent obligations in respect of
Indebtedness of others, whether or not the same are or should be reflected in
the Company’s balance sheet (or the notes thereto), except guaranties by
endorsement of negotiable instruments for deposit or collection or similar
transactions in the ordinary course of business; and (c) the present value of
any lease payments in excess of $100,000 due under leases required to be
capitalized in accordance with GAAP.

     

    “Intellectual Property
Rights” has the meaning set forth in Section 4.1(o).

     

    “Investor” means
Optimus Capital Partners, LLC, a Delaware limited liability company, dba Optimus
Life Sciences Capital Partners, LLC (including its designees, successors and
assigns).

     

    “Investor Parties” and
“Investor
Party” have the meanings set forth in Section 5.8.

     

    “Liens” means a lien,
charge, security interest, encumbrance, right of first refusal, preemptive right
or other restriction (excluding restrictions on transfer of securities under
applicable U.S. federal or state securities or “blue sky” laws).

     

    “Lock-Up Agreements”
means an agreement in the form attached as Exhibit D, executed
by each of the Company’s executive officers, directors and beneficial owners of
10% or more of the Common Stock, precluding each such Person from participating
in any sale of the Common Stock from the Tranche Notice Date through the Tranche
Closing Date.

     

    “Losses” has the
meaning set forth in Section 5.8.

     

    “Luce Forward” has the
meaning set forth in Section 5.1(a).

    
      
         

      

      
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    “Material Adverse
Effect” means a material adverse effect on (i) the legality, validity or
enforceability of any Transaction Document, (ii) the results of operations,
assets, business or financial condition of the Company, or (iii) the Company’s
ability to perform in any material respect its obligations under any Transaction
Document; provided, however, that none of
the following, individually or in the aggregate, shall be taken into account in
determining whether a Material Adverse Effect has occurred: (a) changes in
conditions in the U.S. or global capital, credit or financial markets generally,
including changes in the availability of capital or currency exchange rates; (b)
changes generally affecting the biotechnology or pharmaceutical industries; (c)
any deterioration in the results of operations, assets, business or financial
condition of the Company substantially resulting from (1) circumstances,
conditions or risks (including, without limitation, the section entitled “Risk
Factors” contained in the Company’s Form 10-KSB for its fiscal year ended
October 31, 2008) existing as of the Effective Date that are set forth in any of
the SEC Reports or (2) any of the matters set forth in the Disclosure Schedule
(as the same may be updated pursuant to Section 2.3(c)(ii)); (d) any effect of
the announcement of this Agreement or the consummation of the transactions
contemplated by this Agreement on the Company’s relationships, contractual or
otherwise, with customers, suppliers, vendors, bank lenders, strategic venture
partners or employees; and (e) any decrease in the market price of the Common
Stock (but excluding herefrom any condition, occurrence, state of facts or event
underlying such decrease to the extent that such condition, occurrence, state of
facts or event otherwise would constitute a Material Adverse
Effect).

     

    “Material Agreement”
includes any material loan agreement, financing agreement, equity investment
agreement or securities instrument to which Company is a party, any material
agreement or instrument to which Company and Investor or any Affiliate of
Investor is a party, and any other material agreement listed, or required to be
listed, on any of Company’s reports filed or required to be filed with the SEC,
including without limitation Forms 10-K, 10-Q or 8-K.

     

    “Material Permits” has
the meaning set forth in Section 4.1(m).

     

    “Maximum Placement”
means $5,000,000.00.

     

    “Maximum Tranche
Amount” means, subject to any other applicable limitations set forth in
this Agreement, the Maximum Placement less the amount of any previously noticed
and funded Tranches.

     

    “Officer’s Closing
Certificate” means a certificate in customary form reasonably acceptable
to the Investor, executed by an authorized officer of the Company.

     

    “Opinion” means an
opinion from Company’s independent legal counsel, in the form attached as Exhibit E, to be
delivered in connection with the Commitment Closing and any Tranche
Closing.

     

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

     

    “Preferred Shares”
means shares of Series A Preferred Stock of the Company provided for in the
Certificate of Designations, to be issued to Investor pursuant to this
Agreement.

     

    “Prospectus” includes
each prospectus (within the meaning of the Act) related to the sale or offering
of any Warrant Shares, including without limitation any prospectus contained
within the Registration Statement.

    
      
         

      

      
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    “Registration
Statement” means a valid, current and effective registration statement
registering for resale the Warrant Shares, and except where the context
otherwise requires, means the registration statement, as amended, including (i)
all documents filed as a part thereof, and (ii) any information contained in a
prospectus filed with the SEC in connection with such registration statement, to
the extent such information is deemed under the Act to be part of the
registration statement.

     

    “Regulation D” means
Regulation D promulgated under the Act.

     

    “Required Tranche
Deliveries” has the meaning set forth in Section 2.3(d).

     

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

     

    “Rule 144 Eligible”
means eligible for immediate resale under Rule 144 without limitation on the
amount of securities sold under Rule 144(e) and without  requiring
discharge by payment in full of any promissory notes given to Company prior to
the sale of the securities under Rule 144(d)(2)(iii).

     

    “SEC” means the United
States Securities and Exchange Commission.

     

    “SEC Reports” includes
all reports required to be filed by the Company under the Act and the Exchange
Act, including pursuant to Section 13(a) or 15(d) thereof, for the two years
preceding the Effective Date (or such shorter period as the Company was required
by law to file such material).

     

    “Securities” includes
the Warrants, Warrant Shares and Preferred Shares issuable pursuant to this
Agreement.

     

    “Subsidiary” means any
Person the Company owns or controls, or in which the Company, directly or
indirectly, owns a majority of the capital stock or similar interest that would
be disclosable pursuant to Regulation S-K, Item 601(b)(21).

     

    “Termination Date”
means the earlier of (i) the date that is three years after the Effective Date,
or (ii) the Tranche Closing Date on which the sum of the aggregate Tranche
Purchase Price for all Tranche Shares equals the Maximum Placement.

     

    “Termination Notice”
has the meaning as set forth in Section
3.2.

     

    “Trading Day” means
any day on which the Common Stock is traded on the Trading Market; provided that
it shall not include any day on which the Common Stock is (a) scheduled to trade
for less than 5 hours, or (b) suspended from trading.

     

    “Trading Market” means
the OTC Bulletin Board, the NASDAQ Capital Market, the NASDAQ Global Market, the
NASDAQ Global Select Market, the NYSE Amex, or the New York Stock Exchange,
whichever is at the time the principal trading exchange or market for the Common
Stock.

     

    “Tranche” has the
meaning set forth in Section
2.3(a).

    
      
         

      

      
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    “Tranche Amount” means
the amount of any individual put purchase, as specified by the Company, and
shall not exceed the Maximum Tranche Amount.

     

    “Tranche Closing” has
the meaning set forth in Section
2.3(e).

     

    “Tranche Closing Date”
has the meaning set forth in Section
2.3(e).

     

    “Tranche Notice” has
the meaning set forth in Section
2.3(b).

     

    “Tranche Notice Date”
has the meaning set forth in Section
2.3(b).

     

    “Tranche Purchase
Price” has the meaning set forth in Section 2.3(b), and
shall be specified in writing by the Company.

     

    “Tranche Share Price”
means $10,000.00 per Preferred Share. Company may not put fractional Preferred
Shares.

     

    “Tranche Shares” means
the Preferred Shares that are purchased by Investor pursuant to a
Tranche.

     

    “Transaction
Documents” include this Agreement and the Exhibits hereto and
thereto.

     

    “Transfer Agent” means
Securities Transfer Corporation, or any successor transfer agent for the Common
Stock.

     

    “Warrant Shares” means
the shares of Common Stock issuable upon exercise of the Warrant.

     

    “Warrant” means the
warrant issuable under this Agreement, in the form attached hereto as Exhibit A, to
purchase 33,750,000 shares of Common Stock, at an initial exercise price of
$0.20 per share, subject to adjustment after the Commitment Closing as provided
therein.

     

    ARTICLE 2

    PURCHASE
AND SALE

     

    2.1          Agreement to
Purchase.  Subject to the terms and conditions herein and the
satisfaction of the conditions to Closing set forth in this ARTICLE
2:

     

    (a)           Investor
hereby agrees to purchase such amounts of Preferred Shares as the Company may,
in its sole and absolute discretion, from time to time elect to issue and sell
to Investor according to one or more Tranches pursuant to Section 2.3 below;
and

     

    (b)           The
Company agrees to pay the Commitment Fee and issue the Warrant to Investor in
accordance with the terms of this Agreement.

     

    2.2         Investment
Commitment.

     

    (a)           Investment
Commitment. The closing of this Agreement (the “Commitment Closing”)
shall be deemed to occur when this Agreement has been duly executed by both
Investor and the Company, and the other Conditions to the Commitment Closing set
forth in Section
2.2(b) have been met.

    
      
         

      

      
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    (b)           Conditions to Investment
Commitment. As a condition precedent to the Commitment Closing, all of
the following (the “Conditions to Commitment
Closing”) shall have been satisfied prior to or concurrently with the
parties’ execution and delivery of this Agreement:

     

     (i)           the
following documents shall have been delivered to Investor:  (A) this
Agreement, executed by the Company; (B) a Secretary’s Certificate as to (x) the
resolutions of the Company’s board of directors authorizing this Agreement and
the Transaction Documents, and the transactions contemplated hereby and thereby,
(y) a copy of the Company’s current Certificate of Incorporation, and (z) a copy
of the Company’s current Bylaws; (C) the Certificate of Designations executed by
the Company and accepted by the Secretary of State of Delaware; (D) the Opinion;
and (E) a copy of the press release announcing the transactions contemplated by
this Agreement and Current Report on Form 8-K of the Company describing the
transactions contemplated by, and attaching a complete copy of, the Transaction
Documents;

     

     (ii)           other
than for losses incurred in the ordinary course of business, there shall have
been no Material Adverse Effect since the date of the last SEC Report filed by
the Company;

     

     (iii)           the
representations and warranties of the Company in this Agreement shall be true
and correct in all material respects and the Company shall have delivered an
Officer’s Closing Certificate to such effect to Investor, signed by an officer
of the Company; and

     

     (iv)           the
representations and warranties of Investor in this Agreement shall be true and
correct in all material respects.

     

    (c)           Delivery of the
Warrant.  Simultaneously with the Commitment Closing, the
Company shall deliver the Warrant to the Investor.

     

    (d)           Investor’s Obligation to
Purchase. Subject to the prior satisfaction of all conditions set forth
in this Agreement, following the Investor’s receipt of a validly delivered
Tranche Notice, the Investor shall be required to purchase from the Company a
number of Tranche Shares equal to the permitted Tranche Share Amount, in the
manner described below.

     

    2.3         Tranches to
Investor.

     

    (a)           Procedure to Elect a
Tranche. Subject to the Maximum Tranche Amount, the Maximum Placement and
the other conditions and limitations set forth in this Agreement, at any time
beginning on the Effective Date, the Company may, in its sole and absolute
discretion, elect to exercise one or more tranches of puts (each a “Tranche”) according
to the following procedure, provided that each subsequent Tranche Notice Date
(defined below) after the first Tranche Notice Date shall be no sooner than five
(5) Trading Days following the preceding Tranche Notice Date.

    
      
         

      

      
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    (b)           Delivery of Tranche
Notice. The Company shall deliver an irrevocable written notice (the
“Tranche
Notice”) the form of which is attached hereto as Exhibit F (the date
of such Tranche Notice being the “Tranche Notice
Date”), to Investor stating that the Company shall exercise a Tranche and
stating the number of Preferred Shares which the Company will sell to Investor
at the Tranche Share Price, and the aggregate purchase price for such Tranche
(the “Tranche Purchase
Price”).  A Tranche Notice may be delivered by the Company to
Investor before 5:00 p.m., New York City time, on any Trading Day via facsimile
or electronic mail, with confirming copy by overnight carrier.  A
Tranche Notice delivered after such time or on a non-Trading Day shall be deemed
delivered on the following Trading Day.  The Company may not give a
Tranche Notice unless the Tranche Closing for the prior Tranche has
occurred.

     

    (c)           Conditions Precedent to a
Tranche Notice.  The right of the Company to deliver a Tranche
Notice and the obligation of the Investor to accept a Tranche Notice and to
acquire and pay for the Preferred Shares are subject to the satisfaction (or
where legally permissible, the waiver), on the Tranche Notice Date, of each of
the conditions set forth below. Other than the conditions set forth in clause
(iii) below, which are for the Company’s sole benefit and may be waived by the
Company at any time in its sole discretion (if legally permissible), and the
conditions set forth in clause (viii) below, which are for the Company’s and the
Investor’s benefit and may be waived by both the Company and the Investor in
their discretion (if legally permissible) by mutual written agreement, the
remaining conditions set forth in this Section 2.3(c) are for the Investor’s
sole benefit and may be waived by the Investor at any time in its sole
discretion (if legally permissible).

     

     (i)           the
Common Stock shall be listed for trading or quoted on the Trading Market, and to
the Company’s knowledge there is no notice of any suspension or delisting with
respect to the trading or quotation of the shares of Common Stock on the Trading
Market;

     

     (ii)           the
representations and warranties of the Company set forth in this Agreement shall
be true and correct in all material respects as if made on such date, except for
representations and warranties that are expressly made as of a particular date
in which case, such representations and warranties shall be true and correct as
of such particular date (provided, however, that any information disclosed by
the Company in a filing with the SEC after the Effective Date but prior to the
date of the Tranche Notice shall be deemed to update the Disclosure Schedules
automatically and without any further action on the part of the Company), the
Company shall have performed, satisfied and complied in all material respects
with all covenants and agreements required by this Agreement to be performed,
satisfied or complied with by the Company at or prior to such date, and the
Company shall deliver an Officer’s Closing Certificate to such effect to
Investor, signed by an officer of the Company;

     

     (iii)           the
representations and warranties of the Investor set forth in this Agreement shall
be true and correct in all material respects as if made on such date, except for
representations and warranties that are expressly made as of a particular date
in which case, such representations and warranties shall be true and correct as
of such particular date, and the Investor shall have performed, satisfied and
complied in all material respects with all covenants and agreements required by
this Agreement to be performed, satisfied or complied with by the Investor at or
prior to such date;

    
      
         

      

      
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    (iv)           other
than losses incurred in the ordinary course of business, there shall have been
no Material Adverse Effect since the Commitment Closing;

     

    (v)         
  all Warrant Shares shall have been timely delivered pursuant to any
Exercise Notice properly delivered to the Company under the terms of the Warrant
prior to the applicable Tranche Notice Date;

     

    (vi)           to
the extent required under the terms of the Warrant and Section 5.1 of this
Agreement, all previously-issued Warrant Shares are DWAC Shares in electronic
form without restriction on resale;

     

    (vii)          the
Company is not, and will not be as a result of the applicable Tranche, in
default of any Material Agreement (it being hereby acknowledged and agreed that
for purposes of this paragraph (vii), the trigger of any antidilution,
price-reset or similar provisions in any outstanding warrants or other
derivative securities of the Company as a result of the applicable Tranche shall
not be deemed a default of any Material Agreement);

     

    (viii)        there
is not then in effect any law, rule or regulation prohibiting the transactions
contemplated by any of the Transaction Documents, or requiring any consent or
approval which shall not have been obtained, nor is there any pending proceeding
or investigation which may have the effect of prohibiting or adversely affecting
any of the transactions contemplated by this Agreement; no statute, rule,
regulation, executive order, decree, ruling or injunction shall have been
enacted, entered, promulgated or adopted by any court or governmental authority
of competent jurisdiction that prohibits the transactions contemplated by this
Agreement, and no actions, suits or proceedings shall be in progress or pending
by any person (other than Investor or any Affiliate of Investor) that seek to
enjoin or prohibit the transactions contemplated by this Agreement (it being
hereby acknowledged and agreed that for purposes of this paragraph (viii), no
proceeding shall be deemed pending unless one of the parties hereto has received
written notification thereof prior to the applicable Tranche Notice
Date);

     

    (ix)           the
Company is in compliance with all reporting requirements under the Exchange Act
in order to maintain listing on its then current Trading Market;

     

    (x)      
     either (A) the Company has a current, valid and
effective Registration Statement covering the lawful resale of all Warrant
Shares then issued or issuable upon exercise of the Warrant, or (B) all of such
Warrant Shares are Rule 144 Eligible (assuming cashless exercise of the
Warrant);

     

    (xi)           Company
has a sufficient number of duly authorized shares of Common Stock reserved for
issuance in such amount as may be required to issue all Warrant Shares issuable
upon exercise of the Warrant based on the then current anticipated exercise
price(s) of the Warrant;

     

    (xii)         the
Company has provided notice of its delivery of the Tranche Notice to all
signatories of a Lock-Up Agreement as required under the Lock-Up Agreement;
and

    
      
         

      

      
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     (xiii)        the
aggregate number of Warrant Shares issuable upon exercise of the Warrant based
on the then-current anticipated exercise price(s) of the Warrant, aggregated
with all other shares of Common Stock deemed beneficially owned by the Investor
and its Affiliates would not result in the Investor beneficially owning more
than 9.99% of the Common Stock outstanding on the Tranche Notice Date, as
determined in accordance with Section 13(d) of the Exchange Act and the rules
and regulations promulgated thereunder.

     

    (d)           Deliveries at Tranche
Closing. The Closing of any Tranche and the parties’ obligations
hereunder shall additionally be conditioned upon the delivery of each of the
following (the “Required Tranche
Deliveries”), except as otherwise indicated, on or before the applicable
Tranche Closing Date:

     

     (i)          
 a number of Preferred Shares equal to the Tranche Purchase Price divided
by the Tranche Share Price shall have been delivered to Investor or an account
specified by Investor for the Tranche Shares;

     

     (ii)           the
Tranche Purchase Price shall have been paid by the Investor to the Company by
wire transfer of immediately available funds to an account designated by the
Company prior to the applicable Tranche Closing Date;

     

     (iii)           Investor
shall have received that portion of the Commitment Fee, if any, that is payable
as set forth in the definition of Commitment Fee set forth in Article I
hereof;

     

     (iv)           the
following executed documents shall have been delivered to Investor: the Opinion
and the Officer’s Closing Certificate;

     

     (v)           
with respect to the first Tranche Closing only, the Lock-Up Agreements shall
have been delivered to Investor;

     

     (vi)           a
“Use of Proceeds” certificate, signed by an officer of the Company, and setting
forth how the Tranche Purchase Price will be applied by the Company, shall have
been delivered to Investor;

     

     (vii)          all
Warrant Shares shall have been timely delivered to Investor in accordance with
any Exercise Notice properly delivered to Company under the terms of the Warrant
prior to the applicable Tranche Closing Date;

     

     (viii)        all
documents, instruments and other writings required to be delivered by the
parties on or before the Tranche Closing Date pursuant to any provision of this
Agreement in order to implement and effect the transactions contemplated herein;
and

     

     (ix)           payment
of a $5,000.00 non-refundable administrative fee to Investor’s counsel, by
offset against the Tranche Amount, or wire transfer of immediately available
funds.

    
      
         

      

      
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     (e)           Mechanics of Tranche
Closing.  Each of the Company and Investor shall deliver all
Required Tranche Deliveries required to be delivered by either of them pursuant
to Section
2.3(d) of this Agreement, as applicable, at or prior to each Tranche
Closing. Subject to such delivery and the satisfaction (or where legally
permissible, the waiver) of the conditions set forth in Section 2.3(d) as of
the Tranche Closing Date, the closing of the purchase by Investor of Preferred
Shares shall occur by 5:00 p.m., New York City time, on the date which is 10
Trading Days following the Tranche Notice Date (each a “Tranche Closing
Date”) at the offices of Investor; provided, however, that if any
Warrant Shares are not timely delivered in accordance with Section 1.1 of the
Warrant, with respect to any portion of the Warrant exercised before the Tranche
Closing Date, then the Tranche Closing Date shall be extended one Trading Day
for each Trading Day that such delivery is not made; and provided, further, that if any
Warrant Shares are not DWAC Shares upon delivery, then the Tranche Closing Date
shall be extended one Trading Day for each Trading Day that the Warrant Shares
are not DWAC Shares.  On or before each Tranche Closing Date, Investor
shall pay to the Company the Tranche Purchase Price to be paid for such Tranche
Shares by wire transfer of immediately available funds to an account designated
by the Company prior to the applicable Tranche Closing Date.  The
closing (each a “Tranche Closing”) for
each Tranche shall occur on the date that all Required Tranche Deliveries, as
applicable, have been delivered to the applicable party pursuant to Section 2.3(d) of
this Agreement.

     

     (f)           Limitation on Obligations to
Purchase and Sell.  Notwithstanding anything herein to the
contrary, in the event the average closing price of the Common Stock during the
nine (9) Trading Days following the Tranche Notice Date falls below 75.0% of the
closing bid price of the Common Stock on the Trading Day immediately prior to
the Tranche Notice Date:  (i) Investor may, at its option, and without
penalty, decline to purchase the applicable Tranche Shares on the Tranche
Closing Date; or (ii) Company may, at its option, and without penalty, terminate
the Tranche Notice and decline to sell the applicable Tranche Shares on the
Tranche Closing Date.

     

    2.4           Maximum
Placement.  Investor shall not be obligated to purchase any
additional Tranche Shares once the aggregate Tranche Purchase Price paid by
Investor equals the Maximum Placement.

     

    ARTICLE 3

    TERMINATION

     

    3.1           Automatic
Termination.  This Agreement shall terminate automatically
(each, an “Automatic
Termination”) upon the occurrence of any of the following:

     

     (a)           if,
at any time after the Effective Date, either the Company or the Investor, or any
director or executive officer of the Company or the Investor, has engaged in a
transaction or conduct related to the Company or the Investor, as applicable,
that has resulted in (i) a SEC enforcement action, or (ii) a civil judgment or
criminal conviction for fraud or misrepresentation, or for any other offense
that, if prosecuted criminally, would constitute a felony under applicable
law;

     

     (b)           on
any date after a Delisting Event that lasts for an aggregate of 20 Trading Days
during any calendar year;

    
      
         

      

      
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(c)           if
at any time the Company has filed for and/or is subject to any bankruptcy,
insolvency, reorganization or liquidation proceedings or other proceedings for
relief under any bankruptcy law or any law for the relief of debtors instituted
by or against the Company or any subsidiary of the Company;

     

     
(d)           upon
the occurrence of a Fundamental Transaction;

     

     
(e)           so
long as any Preferred Shares are outstanding, the Company (i) creates or
publicly announces its intention to create a class of Common Stock or series of
preferred stock senior to the Series A Preferred Stock with respect to
liquidation rights (other than a series of preferred stock that the Company
intends to cause to be listed for trading or quoted on any Trading Market other
than the OTC Bulletin Board) or (ii) substantially alters or publicly announces
its intention to substantially alter the capital structure of the Company in a
manner that materially adversely effects the rights or preferences of the Series
A Preferred Stock (other than in connection with the creation of a series of
preferred stock that the Company intends to cause to be listed for trading or
quoted on any Trading Market other than the OTC Bulletin Board), in each case
without the prior approval of the holders or a majority of the Preferred Shares
then outstanding; and

     

     
(f)           on
the Termination Date.

     

    3.2           Company
Termination.  The Company may at any time in its sole
discretion terminate (a “Company Termination”)
this Agreement by providing 30 days’ advanced written notice (“Termination Notice”)
to Investor.

     

    3.3           Other
Termination.  The Investor may terminate this Agreement by
providing three days’ advanced written notice to the Company, if the Company is
in breach or default of any Material Agreement which would reasonably be
expected to have a Material Adverse Effect, and such breach or default is not
cured within 20 Trading Days after notice of such breach or default is delivered
to the Company. The Company or the Investor may terminate this Agreement by
providing three days’ advanced written notice to the other, if the other party
is in material breach or default of this Agreement or any Transaction Document,
and such material breach or default is not cured within 10 Trading Days after
notice of such material breach or default is delivered to the breaching party.
This Agreement may be terminated at any time by the mutual written consent of
both the Company and the Investor, effective as of the date of such mutual
written consent unless otherwise provided in such written consent.

     

    3.4           Effect of
Termination.  In the event of termination by the Company or the
Investor pursuant to Section 3.2 or 3.3, as applicable, written notice thereof
shall forthwith be given to the other party as provided in Section 6.2 and the
transactions contemplated by this Agreement shall be terminated without further
action by either party. If this Agreement is terminated as provided in Section
3.1, 3.2 or 3.3 herein, this Agreement shall become void and of no further force
and effect, except as provided in Section 6.8 hereof. Nothing in this Section
3.4 shall be deemed to release the Company or the Investor from any liability
for any breach or default under this Agreement or any of the other Transaction
Documents occurring prior to such termination, or to impair the rights of the
Company and the Investor to compel specific performance by the other party of
its obligations under this Agreement arising prior to such termination, or to
impair rights of indemnification under this Agreement or any other Transaction
Document. The termination of this Agreement will have no effect on any Preferred
Shares, Warrant (except as provided therein in the event of a Funding Default)
or Warrant Shares previously issued or delivered, or on any rights of any holder
thereof. Notwithstanding any other provision, all fees paid to Investor or its
counsel are non-refundable.

    
      
         

      

      
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    ARTICLE 4

    REPRESENTATIONS
AND WARRANTIES

     

    4.1           Representations and
Warranties of the Company.  Except as set forth under the
corresponding section of the Disclosure Schedules (as the same may be updated
pursuant to Section 2.3(c)(ii)), which shall be deemed a part hereof, or as set
forth in the SEC Reports, the Company hereby represents and warrants to, and as
applicable covenants with, Investor as follows:

     

     (a)           No
Subsidiaries.  The Company does not own, directly or
indirectly, any capital stock or other equity interests in any
Subsidiary.

     

     (b)           Organization and
Qualification.  The Company is an entity duly incorporated,
validly existing and in good standing under the laws of the State of Delaware,
with the requisite power and authority to own and use its properties and assets
and to carry on its business as currently conducted.  The Company is
not in violation or default of any of the provisions of its certificate of
incorporation or bylaws as currently in effect, except where such violation or
default would not, individually or in the aggregate, constitute a Material
Adverse Effect. The Company is duly qualified to conduct business and is in good
standing as a foreign corporation in each jurisdiction in which the nature of
the business conducted or property owned by it makes such qualification
necessary, except where the failure to be so qualified or in good standing, as
the case may be, would not have or reasonably be expected to result in a
Material Adverse Effect, and no proceeding has been instituted in any such
jurisdiction revoking, limiting or curtailing or seeking to revoke, limit or
curtail such power and authority or qualification, except as would not have or
reasonably be expected to result in a Material Adverse Effect.

     

     (c)           Authorization;
Enforcement.  The Company has the requisite corporate power and
authority to enter into and to consummate the transactions contemplated by each
of the Transaction Documents and otherwise to carry out its obligations
hereunder or thereunder.  The execution and delivery of each of the
Transaction Documents by the Company and the consummation by it of the
transactions contemplated hereby or thereby have been duly authorized by all
necessary corporate action on the part of the Company and no further consent or
authorization of the Company or its board of directors or stockholders is
required.  Each of the Transaction Documents has been, or upon
delivery will be, duly executed by the Company and, when delivered in accordance
with the terms hereof, will constitute the valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms, subject
to applicable bankruptcy, insolvency, reorganization, moratorium and similar
laws affecting creditors’ rights and remedies.

    
      
         

      

      
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    (d)           No
Conflicts.  Assuming each of the filings, consents and
approvals referred to in Section 4.1(e) are obtained, given or made on a timely
basis, as applicable, the execution, delivery and performance of the Transaction
Documents by the Company, the issuance and sale of the Securities and the
consummation by the Company of the other transactions contemplated thereby do
not and will not (i) conflict with or violate any provision of the Company’s
certificate of incorporation or bylaws as currently in effect, or (ii) conflict
with, or constitute a default (or an event that with notice or lapse of time or
both would become a default) under, result in the creation of any Lien upon any
of the properties or assets of the Company, or give to others any rights of
termination, amendment, acceleration or cancellation (with or without notice,
lapse of time or both) of, any agreement, credit facility, debt or other
instrument (evidencing a Company debt or otherwise) or other understanding to
which the Company is a party or by which any property or asset of the Company is
bound or affected, or (iii) conflict with or result in a violation of any law,
rule, regulation, order, judgment, injunction, decree or other restriction of
any court or governmental authority to which the Company is subject (including
U.S. federal and state securities laws and regulations), or by which any
property or asset of the Company is bound or affected; except in the case of
each of clauses (ii) and (iii), such as would not have or reasonably be expected
to result in a Material Adverse Effect.

     

    (e)           Filings, Consents and
Approvals.  The Company is not required to obtain any consent,
waiver, authorization or order of, give any notice to, or make any filing or
registration with, any court or other federal, state, local or other
governmental authority or other Person in connection with the execution,
delivery and performance by the Company of the Transaction Documents, other than
(i) the filing of the Certificate of Designations, (ii) such as may be required
under the Act (including, without limitation, the filing of a Form D with the
SEC and any Registration Statement required to be filed pursuant to this
Agreement) or the Exchange Act (including, without limitation, the filing of a
Current Report on Form 8-K of the Company describing the transactions
contemplated by, and attaching a complete copy of, the Transaction Documents),
(iii) such as may be required under applicable state securities or “blue sky”
laws, (iv) such as may be required under the rules and regulations of the
Trading Market or the Financial Industry Regulatory Authority (the “FINRA”) and (v) such
consents, waivers, authorizations, order, notices, filings or registrations, the
failure of which to obtain, give or make would not, individually or in the
aggregate, result in a Material Adverse Effect; provided, that, for
purposes of the representation made in this Section 4.1(e), the
Company is assuming and relying upon the accuracy of the representations and
warranties of the Investor contained in Sections 4.2(d)
through and including 4.2(m), and the full
performance of and compliance with the covenants and agreements of the Investor
contained in Section
5.1 of this Agreement.

     

    (f)           Issuance of the
Securities.  Subject to Section 5.13, the
Securities are duly authorized and, when issued and paid for in accordance with
the applicable Transaction Documents, and subject to, and in reliance on, the
representations, warranties, covenants and agreements made herein by the
Investor, will be duly and validly issued, fully paid and nonassessable, free
and clear of all Liens.  The Company has reserved from its duly
authorized capital stock a number of shares of Common Stock and Preferred Stock
for issuance of the Securities at least equal to the number of Securities which
could be issued pursuant to the terms of this Agreement based on the
then-current anticipated exercise price(s) of the Warrant.

    
      
         

      

      
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    (g)           Capitalization.  The
authorized capital stock of the Company as of July 31, 2009 and the number of
shares of Common Stock issued and outstanding as of August 31, 2009 is as
described in the Company’s Quarterly Report on Form 10-Q for its fiscal quarter
ended July 31, 2009.  No Person has any right of first refusal,
preemptive right, right of participation, or any similar right to participate in
the transactions contemplated by the Transaction Documents.  As of the
Effective Date, except as a result of the purchase and sale of the Securities
and for stock options issued by the Company to its employees, directors and
consultants, there are no outstanding options, warrants, script rights to
subscribe to, calls or commitments of any character whatsoever relating to, or
securities, rights or obligations convertible into or exchangeable for, or
giving any Person any right to subscribe for or acquire, any shares of Common
Stock, or contracts, commitments, understandings or arrangements by which the
Company or any Subsidiary is or may become bound to issue additional shares of
Common Stock or securities convertible into or exercisable for shares of Common
Stock. All of the outstanding shares of capital stock of the Company are validly
issued, fully paid and nonassessable, have been issued in compliance with all
U.S. federal and state securities laws, and none of such outstanding shares was
issued in violation of any preemptive rights or similar rights to subscribe for
or purchase securities.  As of the Effective Date, there are no
stockholders agreements, voting agreements or other similar agreements with
respect to the Company’s capital stock to which the Company is a party or, to
the knowledge of the Company, between or among any of the Company’s
stockholders.

     

    (h)           SEC Reports; Financial
Statements.  Except as set forth in Schedule 4.1(h) of the
Disclosure Schedules, the Company has filed all required SEC Reports for the two
years preceding the Effective Date (or such shorter period as the Company was
required by law to file such material) on a timely basis or has received a valid
extension of such time of filing and has filed any such SEC Reports prior to the
expiration of any such extension.  As of their respective dates, the
SEC Reports complied in all material respects with the requirements of the Act
and the Exchange Act and the rules and regulations of the SEC promulgated
thereunder, as applicable, and none of the SEC Reports, when filed, contained
any untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading.  The financial statements of the Company included in the
SEC Reports comply in all material respects with applicable accounting
requirements and the rules and regulations of the SEC with respect thereto as in
effect at the time of filing.  Such financial statements have been
prepared in accordance with GAAP, except as may be otherwise specified in such
financial statements or the notes thereto and except that unaudited financial
statements may not contain all footnotes required by GAAP, and fairly present in
all material respects the financial position of the Company and its consolidated
subsidiaries as of and for the dates thereof and the results of operations and
cash flows for the periods then ended, subject, in the case of unaudited
statements, to normal, immaterial, year-end audit adjustments.

     

    (i)           Material
Changes.  Since the date of the latest audited financial
statements included within the SEC Reports, except as disclosed in the SEC
Reports, (i) there has been no event, occurrence or development that has had or
that would reasonably be expected to result in a Material Adverse Effect, (ii)
the Company has not incurred any liabilities (contingent or otherwise) other
than (A) trade payables and accrued expenses incurred in the ordinary course of
business consistent with past practice and (B) liabilities not required to be
reflected in the Company’s financial statements pursuant to GAAP or required to
be disclosed in filings made with the SEC, (iii) the Company has not altered its
method of accounting, (iv) the Company has not declared or made any dividend or
distribution of cash or other property to its stockholders or purchased,
redeemed or made any agreements to purchase or redeem any shares of its capital
stock and (v) the Company has not issued any equity securities to any officer,
director or Affiliate, except pursuant to existing Company equity incentive
plans.  The Company does not have pending before the SEC any request
for confidential treatment of information.

    
      
         

      

      
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    (j)           Litigation.  There
is no action, suit, inquiry, notice of violation, proceeding or investigation
pending or, to the knowledge of the Company, threatened against or affecting the
Company or any of its properties before or by any court, arbitrator,
governmental or administrative agency or regulatory authority (federal, state,
county, local or foreign) (collectively, an “Action”), which (i)
adversely affects or challenges the legality, validity or enforceability of any
of the Transaction Documents or the Securities, or (ii) would, if there were an
unfavorable decision, have or reasonably be expected to result in a Material
Adverse Effect.  Neither the Company, nor to the knowledge of the
Company any director or officer of the Company, is or has been during the past
five years the subject of any Action involving a claim of violation of or
liability under U.S. federal or state securities laws or a claim of breach of
fiduciary duty.  During the past five years, there has not been, and
to the knowledge of the Company, there is not pending or contemplated, any
investigation by the SEC involving the Company or any current or former director
or officer of the Company in their capacity as a director or officer of the
Company.  During the past five years, the SEC has not issued any stop
order or other order suspending the effectiveness of any registration statement
filed by the Company under the Exchange Act or the Act.

     

    (k)           Labor
Relations.  No material labor dispute exists or, to the
knowledge of the Company, is imminent with respect to any of the employees of
the Company, which would reasonably be expected to result in a Material Adverse
Effect.

     

    (l)           Compliance.  The
Company (i) is not in default under or in violation of (and, to the Company’s
knowledge, no event has occurred that has not been waived that, with notice or
lapse of time or both, would result in a default by the Company under), nor has
the Company received written notice of a claim that it is in default under or
that it is in violation of, any indenture, loan or credit agreement or any other
similar agreement or instrument to which it is a party or by which it or any of
its properties is bound (whether or not such default or violation has been
waived), (ii) is in violation of any order of any court, arbitrator or
governmental body applicable to the Company, or (iii) is or has been in
violation of any statute, rule or regulation of any governmental authority
applicable to the Company, including without limitation all foreign, federal,
state and local laws applicable to its business, except in each of the cases
referenced in clauses (i), (ii) and (iii) above as would not have a Material
Adverse Effect.

     

    (m)           Regulatory
Permits.  The Company and the Subsidiaries possess all
certificates, authorizations and permits issued by the appropriate federal,
state, local or foreign regulatory authorities necessary to conduct their
respective businesses as described in the SEC Reports, except where the failure
to possess such permits would not, individually or in the aggregate, have or
reasonably be expected to result in a Material Adverse Effect (“Material Permits”),
and neither the Company nor any Subsidiary has received any written notice of
proceedings relating to the revocation or modification of any Material
Permit.

    
      
         

      

      
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    (n)           Title to
Assets.  The Company and the Subsidiaries have good and
marketable title in fee simple to all real property owned by them that is
material to the business of the Company and the Subsidiaries and good and
marketable title in all personal property owned by them that is material to the
business of the Company and the Subsidiaries, in each case free and clear of all
Liens, except for Liens as do not materially affect the value of such property
and do not materially interfere with the use made and proposed to be made of
such property by the Company and the Subsidiaries and Liens for the payment of
federal, state or other taxes, the payment of which is neither delinquent nor
subject to penalties.  Any real property and facilities held under
lease by the Company and the Subsidiaries are held by them under valid,
subsisting and enforceable leases of which the Company and the Subsidiaries are
in compliance.

     

    (o)           Patents and
Trademarks.  The Company has, or has rights to use, all
patents, patent applications, trademarks, trademark applications, service marks,
trade names, copyrights, licenses and other similar rights that are necessary or
material for use in connection with their respective businesses as described in
the SEC Reports and which the failure to so have would have a Material Adverse
Effect (collectively, the “Intellectual Property
Rights”).  The Company has not received a written notice that
the Intellectual Property Rights used by the Company violates or infringes upon
the rights of any Person. To the knowledge of the Company, all such Intellectual
Property Rights are enforceable and there is no existing infringement by another
Person of any of the Intellectual Property Rights of the Company.

     

    (p)           Insurance.  The
Company is insured by insurers of recognized financial responsibility against
such losses and risks and in such amounts as are prudent and customary in the
businesses in which the Company is engaged.  The Company has no reason
to believe that it will not be able to renew its existing insurance coverage as
and when such coverage expires or to obtain similar coverage from similar
insurers as may be necessary to continue its business without a significant
increase in cost.

     

    (q)           Transactions With Affiliates
and Employees.  Except as set forth in the SEC Reports, none of
the officers or directors of the Company and, to the knowledge of the Company,
none of the employees of the Company is presently a party to any transaction
with the Company or any Subsidiary (other than for services as employees,
officers and directors), including any contract, agreement or other arrangement
providing for the furnishing of services to or by, providing for rental of real
or personal property to or from, or otherwise requiring payments to or from any
officer, director or such employee or, to the knowledge of the Company, any
entity in which any officer, director, or any such employee has a substantial
interest or is an officer, director, trustee or partner, in each case in excess
of $120,000 other than (i) for payment of salary or consulting fees for services
rendered, (ii) reimbursement for expenses incurred on behalf of the Company and
(iii) for other employee benefits, including stock option agreements under any
equity incentive plan of the Company.

    
      
         

      

      
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    (r)           Sarbanes-Oxley; Internal
Accounting Controls.  The Company is in material compliance
with all provisions of the Sarbanes-Oxley Act of 2002, which are applicable to
it as of the date of the Commitment Closing.  The Company and the
Subsidiaries maintain a system of internal accounting controls sufficient to
provide reasonable assurance that (i) transactions are executed in accordance
with management’s general or specific authorizations, (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with GAAP and to maintain asset accountability, (iii) access to
assets is permitted only in accordance with management’s general or specific
authorization, and (iv) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.  The Company has established disclosure
controls and procedures (as defined in Exchange Act Rules 13a-15(e) and
15d-15(e)) for the Company and designed such disclosure controls and procedures
to ensure that material information relating to the Company, including its
Subsidiaries, is made known to the certifying officers by others within those
entities, particularly during the period in which the Company’s most recently
filed periodic report under the Exchange Act, as the case may be, is being
prepared.  The Company’s certifying officers have evaluated the
effectiveness of the Company’s controls and procedures as of the date prior to
the filing date of the most recently filed periodic report under the Exchange
Act (such date, the “Evaluation
Date”).  The Company presented in its most recently filed
periodic report under the Exchange Act the conclusions of the certifying
officers about the effectiveness of the disclosure controls and procedures based
on their evaluations as of the Evaluation Date.  Since the Evaluation
Date, there have been no significant changes in the Company’s internal controls
(as such term is defined in Item 307(b) of Regulation S-K under the Exchange
Act) or, to the Company’s knowledge, in other factors that could materially
affect the Company’s internal controls.

     

    (s)           Certain
Fees.  Except for the payment of the Commitment Fee, the
issuance of the Warrant and the other payments to be made pursuant to the
Transaction Documents, no brokerage or finder’s fees or commissions are or will
be payable by the Company to any broker, financial advisor or consultant,
finder, placement agent, investment banker, bank or other Person with respect to
the transactions contemplated by this Agreement.  Except as a result
of any agreements or arrangements made by the Investor or its representatives or
Affiliates, to the Company’s knowledge, Investor shall have no obligation with
respect to any such fees or commissions of a type contemplated in this Section 4.1(s) that
may be due in connection with the transactions contemplated by this
Agreement.

     

    (t)           Private Placement.
Assuming the accuracy of Investor representations and warranties set forth in
Section 4.2, no
registration under the Act is required for the offer and sale of the Securities
by the Company to Investor as contemplated hereby. The issuance and sale of the
Securities hereunder does not contravene the rules and regulations of the OTC
Bulletin Board.

     

    (u)           Investment Company.
The Company is not, and is not an Affiliate of, and immediately after receipt of
payment for the Securities, will not be or be an Affiliate of, an “investment
company” within the meaning of the Investment Company Act of 1940, as
amended.  The Company shall conduct its business in a manner so that
it will not become subject to the Investment Company Act.

     

    (v)           Registration
Rights.  No Person has any right to cause the Company to effect
the registration under the Act of any securities of the
Company.

    
      
         

      

      
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    (w)           Listing and Maintenance
Requirements.  The Common Stock is registered pursuant to
Section 12 of the Exchange Act, and the Company has taken no action designed to,
or which to its knowledge is likely to have the effect of, terminating the
registration of the Common Stock under the Exchange Act nor, to the Company’s
knowledge, is the SEC contemplating terminating such
registration.  The Company has not, in the 12 months preceding the
Effective Date, received notice from any Trading Market on which the Common
Stock is or has been listed or quoted to the effect that the Company is not in
compliance with the listing or maintenance requirements of such Trading Market.
The Company is, and has no reason to believe that it will not in the foreseeable
future continue to be, in compliance with all such listing and maintenance
requirements.

     

    (x)           Application of Takeover
Protections.  The Company and its Board of Directors have taken
all necessary action, if any, in order to render inapplicable any control share
acquisition, business combination, poison pill (including any distribution under
a rights agreement) or other similar anti takeover provision under the Company’s
Certificate of Incorporation or the laws of its state of incorporation that is
or could become applicable to Investor as a result of Investor and the Company
fulfilling their obligations or exercising their rights under the Transaction
Documents, including without limitation the Company’s issuance of the Securities
and Investor’s ownership of the Securities.

     

    (y)           Disclosure.  Except
with respect to (i) the transactions contemplated by the Transaction Documents,
(ii) the information contained in the Disclosure Schedules and (iii) the
information that will be publicly disclosed by the Company pursuant to Section 2.2(b)(i)E
and Section
5.4, the Company confirms that neither the Company nor any other Person
acting on its behalf has provided Investor or its agents or counsel with any
information that constitutes material, non-public information that, according to
applicable law, rule or regulation, should have been disclosed publicly by the
Company prior to the Effective Date but which has not been so publicly
disclosed. The Company understands and confirms that Investor will rely on the
foregoing representations and covenants in effecting transactions in securities
of the Company.  All disclosure provided to Investor regarding the
Company, its business and the transactions contemplated hereby, furnished by or
on behalf of the Company with respect to the representations and warranties made
herein are true and correct in all material respects and do not contain any
untrue statement of a material fact or omit to state any material fact necessary
in order to make the statements made therein, in light of the circumstances
under which they were made, not misleading.

     

    (z)           No Integrated
Offering. Neither the Company, nor any of its Affiliates, nor any Person
acting on its or their behalf has, directly or indirectly, made any offers or
sales of any security or solicited any offers to buy any security, under
circumstances that would cause this offering of the Securities to be integrated
with prior offerings by the Company for purposes of the Act.

    
      
         

      

      
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    (aa)           Financial
Condition.  Based on the financial condition of the Company as
of the date of the Commitment Closing: (i) the fair saleable market value of the
Company’s assets exceeds the amount that will be required to be paid on or in
respect of the Company’s existing debts and other liabilities (including known
contingent liabilities) as they mature; (ii) the Company’s assets do not
constitute unreasonably small capital to carry on its business for the current
fiscal year as now conducted and as proposed to be conducted including its
capital needs taking into account the particular capital requirements of the
business conducted by the Company, and projected capital requirements and
capital availability thereof; and (iii) the current cash flow of the Company,
together with the proceeds the Company would receive, were it to liquidate all
of its assets, after taking into account all anticipated uses of the cash, would
be sufficient to pay all amounts on or in respect of its debt when such amounts
are required to be paid.  The Company does not intend to incur debts
beyond its ability to pay such debts as they mature (taking into account the
timing and amounts of cash to be payable on or in respect of its debt). The
Company has no knowledge of any facts or circumstances, which lead it to believe
that it will file for reorganization or liquidation under the bankruptcy or
reorganization laws of any jurisdiction within one year from the date of the
Commitment Closing.  The Company’s Quarterly Report on Form 10-Q for
its fiscal quarter ended July 31, 2009 sets forth as of July 31, 2009 all
outstanding secured and unsecured Indebtedness of the Company, or for which the
Company has commitments.  The Company is not in default with respect
to any Indebtedness.

     

    (bb)           Tax
Status.  The Company and each of its Subsidiaries has made or
filed all federal, state and foreign income and all other tax returns, reports
and declarations required by any jurisdiction to which it is subject (unless and
only to the extent that the Company and each of its Subsidiaries has set aside
on its books provisions reasonably adequate for the payment of all unpaid and
unreported taxes) and has paid all taxes and other governmental assessments and
charges that are material in amount, shown or determined to be due on such
returns, reports and declarations, except those being contested in good faith
and has set aside on its books provisions reasonably adequate for the payment of
all taxes for periods subsequent to the periods to which such returns, reports
or declarations apply.  There are no unpaid taxes in any material
amount claimed to be due by the taxing authority of any jurisdiction, and the
officers of the Company know of no basis for any such claim.  The
Company has not executed a waiver with respect to the statute of limitations
relating to the assessment or collection of any foreign, federal, statue or
local tax.  None of the Company’s tax returns is presently being
audited by any taxing authority.

     

    (cc)           No General Solicitation or
Advertising.  Except for the Registration Statement to be filed
as contemplated by this Agreement, neither the Company nor, to the knowledge of
the Company, any of its directors or officers (i) has conducted or will conduct
any general solicitation (as that term is used in Rule 502(c) of Regulation D)
or general advertising with respect to the sale of the Securities, or (ii) made
any offers or sales of any security or solicited any offers to buy any security
under any circumstances that would require registration of the Securities under
the Act or made any “directed selling efforts” as defined in  rule 902
of Regulation S.

     

    (dd)           Foreign Corrupt
Practices.  Neither the Company, nor to the knowledge of the
Company, any agent or other person acting on behalf of the Company, has (i)
directly or indirectly, used any corrupt funds for unlawful contributions,
gifts, entertainment or other unlawful expenses related to foreign or domestic
political activity, (ii) made any unlawful payment to foreign or domestic
government officials or employees or to any foreign or domestic political
parties or campaigns from corporate funds, (iii) failed to disclose fully any
contribution made by the Company (or made by any person acting on its behalf of
which the Company is aware) which is  in violation of law, or (iv)
violated in any material respect any provision of the Foreign Corrupt Practices
Act of 1977, as amended.

    
      
         

      

      
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    (ee)           Acknowledgment Regarding
Investor’s Purchase of Securities.  The Company acknowledges
and agrees that Investor is acting solely in the capacity of arm’s length
purchaser with respect to this Agreement and the transactions contemplated
hereby.  The Company further acknowledges that Investor is not acting
as a financial advisor or fiduciary of the Company (or in any similar capacity)
with respect to this Agreement and the transactions contemplated hereby and any
statement made by Investor or any of its representatives or agents in connection
with this Agreement and the transactions contemplated hereby is not advice or a
recommendation and is merely incidental to Investor’s purchase of the
Securities.  The Company further represents to Investor that the
Company’s decision to enter into this Agreement has been based solely on the
independent evaluation of the Company and its representatives.

     

    (ff)           Accountants.  The
Company’s accountants are set forth in the SEC Reports.  To the
Company’s knowledge, such accountants are an independent registered public
accounting firm as required by the Act.

     

    (gg)         No Disagreements with
Accountants and Lawyers.  There are no disagreements of any
kind presently existing, or reasonably anticipated by the Company to arise,
between the accountants and lawyers formerly or presently employed by the
Company, and the Company is current with respect to any fees owed to its
accountants.

     

    (hh)         Registration Statements and
Prospectuses.

     

      (i)           Company
will use its commercially reasonable efforts to file within 30 calendar days
after the Effective Date (or as soon as possible thereafter), cause to become
effective as soon as possible thereafter, and remain effective until the earlier
of (A) the first date on which all Warrant Shares covered thereby have been sold
or are Rule 144 Eligible (assuming cashless exercise of the Warrant by the
holder thereof at all times after such first date) or (B) in the event that no
Tranche Closing ever occurs, the Termination Date, a Registration Statement
covering the public resale by the Investor of all Common Shares issued in
payment of the Commitment Fee and all Warrant Shares.  Such
Registration Statement, on the date it is filed with the SEC and on the date it
becomes effective, and, as amended or supplemented, at the time of any Tranche
Notice Date, Tranche Closing Date, or issuance of any Warrant Shares, will
comply as to form, in all material respects, with the requirements of the
Act.

     

      (ii)           Such
Registration Statement, as of its effective date, will not contain any 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 not misleading; provided that this
representation and warranty does not apply to statements in or omissions from
the Registration Statement made in reliance upon and in conformity with
information relating to the Investor furnished to the Company in writing by or
on behalf of the Investor expressly for use therein, which to the Company’s
knowledge are not false or misleading.

     

      (iii)           The
Prospectus, on the date it is filed with the SEC and as of its date, and, at the
time of any Tranche Notice Date, Tranche Closing Date, or issuance of any
Warrant Shares, and at all times during which a prospectus is required by the
Act to be delivered in connection with any sale of Warrant Shares covered
thereby, will comply as to form, in all material respects, with the requirements
of the Act.

    
      
         

      

      
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      (iv)           The
Prospectus and any amendment or supplement thereto, as of its date, will not
contain any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided that this
representation and warranty does not apply to statements in or omissions from
the Prospectus or any amendment or supplement thereto made in reliance upon and
in conformity with information relating to the Investor furnished to the Company
in writing by or on behalf of the Investor expressly for use therein, which to
the Company’s knowledge are not false or misleading.

     

      (v)           The
Registration Statement, as of its effective date, will meet the requirements of
subsections (a)(1)(i) and/or (a)(1)(iii) of Rule 415 under the Act or any other
applicable subsections thereof.

     

    4.2           Representations and
Warranties of Investor. Investor hereby represents and warrants to, and
as applicable covenants with, the Company as follows:

     

     (a)           Organization;
Authority.  Investor is an entity duly formed, validly existing
and in good standing under the laws of the State of Delaware, with the requisite
power and authority to own and use its properties and assets and to carry on its
business as currently conducted. Investor has the requisite company power and
authority to enter into and to consummate the transactions contemplated by this
Agreement and otherwise to carry out its obligations hereunder.  The
execution and delivery of this Agreement by Investor and the consummation by it
of the transactions contemplated hereby have been duly authorized by all
necessary company action on the part of Investor and no further consent or
authorization of Investor or its members is required.  Each
Transaction Document to which it is a party has been (or will be) duly executed
by Investor, and when delivered by Investor in accordance with the terms hereof,
will constitute the valid and legally binding obligation of Investor,
enforceable against it in accordance with its terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium and similar laws affecting
creditors’ rights and remedies.

     

     (b)           No
Conflicts.  The execution, delivery and performance of this
Agreement by Investor do not and will not conflict with or violate any provision
of Investor’s certificate of formation or operating agreement (or similar
organizational documents) as currently in effect.

     

     (c)           Investor
Status.  At the time Investor was offered the Securities, it
was, and it is: (i) an “accredited investor” as defined in Rule 501(a)(1),
(a)(2), (a)(3), (a)(7) or (a)(8) under the Act or (ii) a “qualified
institutional buyer” as defined in Rule 144A(a) under the Act.

     

     (d)           Experience of
Investor.  Investor, either alone or together with its
representatives, has such knowledge, sophistication and experience in business
and financial matters so as to be capable of evaluating the merits and risks of
the prospective investment in the Securities, and has so evaluated the merits
and risks of such investment.  Investor is able to bear the economic
risk of an investment in the Securities and, at the present time, is able to
afford a complete loss of such investment.

    
      
         

      

      
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    (e)           Information. The
Investor and its advisors, if any, have been furnished with all materials
relating to the business, finances and operations of the Company and materials
relating to the offer and sale of the Securities which have been requested by
the Investor. The Investor and its advisors, if any, have been afforded the
opportunity to ask questions of the Company; provided, however, that neither
such inquiries nor any other due diligence investigations conducted by Investor
or its representatives shall modify, amend or affect Investor’s right to rely on
the Company’s representations and warranties contained in Section 4.1. The
Investor has sought such accounting, legal and tax advice as it has considered
necessary to make an informed investment decision with respect to its
acquisition of the Securities. The Investor understands that it (and not the
Company) shall be responsible for its own tax liabilities that may arise as a
result of this investment or the transactions contemplated by this
Agreement.

     

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

     

    (g)           No Public Sale or
Distribution.  Investor is acquiring the Securities for its own
account, and not as a nominee or agent.  Investor is acquiring the
Preferred Shares and the Warrant for investment purposes, and not with a view
towards, or for resale in connection with, the public sale or distribution of
any part thereof, except pursuant to transactions registered under the Act or
exempt from such registration; provided, however, that the
disposition of its property shall at all times be within its
control.  Investor does not presently have any contract, agreement,
undertaking, arrangement or understanding, directly or indirectly, with any
non-Affiliate of Investor to sell, transfer, pledge, assign or otherwise
distribute any of the Securities.

     

    (h)           Acknowledgement of Private
Placement.  Investor understands that the offer and sale of the
Securities provided for herein is being made without registration under the Act,
in reliance upon the provisions of Section 4(2) of the Act, Regulation D
promulgated under the Act, and such other exemptions from the registration
requirements of the Act as may be available with respect to any or all of the
purchases of Securities to be made hereunder, and that the Company is relying in
part upon the truth and accuracy of, and such Investor’s compliance with, the
representations, warranties, agreements, covenants, acknowledgments and
understandings of such Investor set forth herein in order to determine the
availability of such exemptions and the eligibility of such Investor to acquire
the Securities.

     

    (i)           Transfer or Resale.
Investor understands that: (i) the Preferred Shares and the Warrants have not
been and are not being registered under the Act or any state securities or “blue
sky” laws, (ii) as of the Effective Date the Warrant Shares have not been
registered under the Act or any state securities or “blue sky” laws and (iii)
except as expressly provided in the Transaction Documents with respect to the
Warrant Shares, neither the Company nor any other Person is under any obligation
to register the Securities under the Act or any state securities or “blue sky”
laws or to comply with the terms and conditions of any exemption
thereunder.

     

    (j)           Trading Restrictions;
Compliance with Securities Laws.  The Investor covenants and
agrees that during the period beginning on the Trading Day immediately preceding
the Effective Date and ending on the Trading Day next following the termination
of this Agreement, neither the Investor nor any of its Affiliates nor any entity
managed or controlled by the Investor will, directly or indirectly, enter into
or execute or cause or assist any Person to enter into or execute any “short
sale” (as such term is defined in Rule 200 of Regulation SHO, or any successor
regulation, promulgated by the SEC under the Exchange Act) of the Common
Stock.

    
      
         

      

      
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    (k)         Not an
Affiliate.  The Investor is not an officer, director or
Affiliate of the Company.

     

    (l)           No Governmental
Review. Investor understands that no United States federal or state
agency or any other government or governmental agency has passed on or made any
recommendation or endorsement of the Securities or the fairness or suitability
of the investment in the Securities nor have such authorities passed upon or
endorsed the merits of the offering of the Securities.

     

    (m)        Public Resale of Warrant
Shares.  The Investor agrees that unless the Warrant Shares
covered by any Registration Statement are Rule 144 Eligible, it will publicly
resell such Warrant Shares only pursuant to such Registration Statement, in a
manner described under the caption “Plan of Distribution” in the Registration
Statement, and in a manner in compliance with any applicable prospectus delivery
requirements of the Securities Act.

     

    The
Company acknowledges and agrees that Investor does not make or has not made any
representations or warranties with respect to the transactions contemplated
hereby other than those specifically set forth in this Section
4.2.

     

    ARTICLE 5

    OTHER
AGREEMENTS OF THE PARTIES

     

    5.1           Transfer
Restrictions.

     

     (a)          The
Securities constitute “restricted securities” as such term is defined in Rule
144(a)(3) under the Act and may only be disposed of in compliance with U.S.
federal securities laws and applicable state securities or “blue sky”
laws.  Without limiting the generality of the foregoing, except for a
transfer to an Affiliate of Investor or a bona fide pledge of the Securities,
the Securities may not be offered for sale, sold, transferred, assigned, pledged
or otherwise distributed unless (i) subsequently registered thereunder, (ii)
Investor shall have delivered to the Company an opinion of counsel reasonably
acceptable to the Company (which may be Luce Forward Hamilton & Scripps LLP
(“Luce
Forward”)), in a form generally acceptable to the Company, to the effect
that such Securities to be offered for sale, sold, transferred, assigned,
pledged or otherwise distributed may be offered for sale, sold, transferred,
assigned, pledged or otherwise distributed pursuant to an exemption from such
registration, or (iii) such Securities can be offered for sale, sold,
transferred, assigned, pledged or otherwise distributed pursuant to Rule 144 or
Rule 144A promulgated under the Act, as applicable.

     

     (b)          The
parties acknowledge and agree that the Warrant Shares will be issued without any
restrictive legends.  Investor agrees to the imprinting, for so long
as is required by this Section 5.1, upon the
certificates or other instruments representing the Preferred Shares and Warrants
of any legends required by applicable state securities or “blue sky” laws, in
addition to the following restrictive legend (and that a stop transfer order
shall be placed against transfer of such certificates):

    
      
         

      

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

     

    5.2           Furnishing of
Information.  As long as Investor owns Securities, the Company
covenants to timely file (or obtain extensions in respect thereof and file
within the applicable grace period) all reports required to be filed by the
Company after the Effective Date pursuant to the Exchange Act.  Upon
the request of Investor, the Company shall deliver to Investor a written
certification of a duly authorized officer as to whether it has complied with
the preceding sentence. As long as Investor owns Securities, if the Company is
not required to file reports pursuant to such laws, it will prepare and furnish
to Investor and make publicly available in accordance with Rule 144(c) such
information as is required for Investor to sell the Securities under Rule 144
until such time as Investor may sell all such Securities without restriction
under Rule 144.  The Company further covenants that it will take such
further action as any holder of Securities may reasonably request, all to the
extent required from time to time to enable such Person to sell Securities
without registration under the Act within the limitation of the exemptions
provided by Rule 144.

     

    5.3           Integration.  The
Company shall not sell, offer for sale or solicit offers to buy or otherwise
negotiate in respect of any security (as defined in Section 2 of the Act) that
would be integrated with the offer or sale of the Securities in a manner that
would require the registration under the Act of the sale of the Securities to
Investor.

     

    5.4           Securities Laws Disclosure;
Publicity.  The Company shall, by 8:30 a.m., New York City
time, on the Trading Day immediately following the Effective Date, issue a press
release and shall, by 5:30 p.m., New York City time, on the Trading Day
immediately following the Effective Date, file a Current Report on Form 8-K
describing the transactions contemplated by, and attaching a complete copy of,
the Transaction Documents. Such press release and Current Report on Form 8-K
shall be reasonably acceptable to Investor. The Company and Investor shall
consult with each other in issuing any additional press releases with respect to
the transactions contemplated hereby, and neither the Company nor Investor shall
issue any such press release or otherwise make any such public statement without
the prior consent of the Company, with respect to any such press release of
Investor, or without the prior consent of Investor, with respect to any such
press release of the Company, which consent shall not unreasonably be withheld
or delayed, except if such disclosure is required by law, Trading Market
regulations or judicial process, in which case the disclosing party shall
promptly provide the other party with prior notice of such public statement or
communication.  The Company shall provide Investor with prior notice
of any public disclosure of the name of Investor in any filing with the SEC or
any regulatory agency or Trading Market (it being hereby acknowledged and agreed
by Investor that Investor’s name shall be disclosed in any Current Report on
Form 8-K of the Company describing the transactions contemplated by the
Transaction Documents, in any Registration Statement and Prospectus covering any
Warrant Shares, and in other reports of the Company required to be filed by the
Company under the Act and the Exchange Act, including pursuant to Section 13(a)
or 15(d) thereof).

    
      
         

      

      
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    5.5           Shareholders Rights
Plan.  No claim will be made or enforced by the Company or, to
the knowledge of the Company, any other Person that Investor is an “Acquiring
Person” under any shareholders rights plan or similar plan or arrangement in
effect or hereafter adopted by the Company, or that Investor could be deemed to
trigger the provisions of any such plan or arrangement, by virtue of receiving
Securities under the Transaction Documents or under any other agreement between
the Company and Investor. The Company shall conduct its business in a manner so
that it will not become subject to the Investment Company Act of 1040, as
amended.

     

    5.6           Non-Public
Information.  The Company covenants and agrees that neither it
nor any Person acting on its behalf will provide, Investor or its agents or
counsel with any information that the Company believes constitutes material
non-public information, unless prior thereto Investor shall have executed a
written agreement regarding the confidentiality and use of such
information.  The Company understands and confirms that Investor shall
be relying on the foregoing covenant in effecting transactions in securities of
the Company.

     

    5.7           Reimbursement.  If
Investor becomes involved in any capacity in any proceeding by or against any
Person who is a stockholder of the Company (except as a result of sales,
pledges, margin sales and similar transactions by Investor to or with any
current stockholder), solely as a result of Investor’s acquisition of the
Securities under this Agreement, the Company will reimburse Investor for its
reasonable legal and other expenses (including the cost of any investigation
preparation and travel in connection therewith) incurred in connection
therewith, as such expenses are incurred, or will assume the defense of Investor
in such matter.  The reimbursement obligations of the Company under
this paragraph shall be in addition to any liability which the Company may
otherwise have, shall extend upon the same terms and conditions to any
Affiliates of Investor who are actually named in such action, proceeding or
investigation, and partners, directors, agents, employees and controlling
persons (if any), as the case may be, of Investor and any such Affiliate, and
shall be binding upon and inure to the benefit of any successors, assigns, heirs
and personal representatives of the Company, Investor and any such Affiliate and
any such Person.

    
      
         

      

      
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    5.8           Indemnification.

     

     (a)           Indemnification by
Company.  Subject to the provisions of this Section 5.8(a), the
Company will indemnify and hold Investor and any Warrant holder, their
Affiliates and attorneys, and each of their directors, officers, shareholders,
partners, employees, agents, and any Person who controls Investor within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act
(collectively, the “Investor Parties” and
each an “Investor
Party”), harmless from any and all losses, liabilities, obligations,
claims, contingencies, damages, costs and expenses, including all judgments,
amounts paid in settlements, court costs and reasonable attorneys’ fees and
costs of investigation (collectively, “Losses”) that any
Investor Party may suffer or incur as a result of or relating to (a) any breach
of any of the representations, warranties, covenants or agreements made by the
Company in this Agreement or in the other Transaction Documents, (b) any action
instituted against any Investor Party, or any of them or their respective
Affiliates, by any stockholder of the Company who is not an Affiliate of an
Investor Party, with respect to any of the transactions contemplated by the
Transaction Documents (unless such action is based upon a breach of Investor’s
representation, warranties or covenants or agreements under the Transaction
Documents or any agreements or understandings Investor may have with any such
stockholder or any violations by Investor of state or federal securities laws or
any conduct by Investor which constitutes fraud, gross negligence, willful
misconduct or malfeasance), (c)  any untrue statement or alleged
untrue statement of a material fact contained in a Registration Statement (or in
a Registration Statement as amended by any post-effective amendment thereof by
the Company) or arising out of or based upon any omission or alleged omission to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading, and/or (d) any untrue statement or alleged
untrue statement of a material fact included in any Prospectus ( or any
amendments or supplements to any Prospectus ), or arising out of or based upon
any omission or alleged omission to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under which they
were made, not misleading; provided, however, that (i) the Company shall not be
obligated to indemnify any Investor Party for any Losses finally adjudicated to
have been caused solely by an untrue statement of a material fact or an omission
to state a material fact made in reliance upon and conformity with information
furnished to the Company in writing by or on behalf of such Person expressly for
use in the Registration Statement or the Prospectus (or any amendment or
supplement thereto) and (ii) the foregoing indemnity shall not inure to the
benefit of any Investor Party from whom the Person asserting any Losses
purchased Securities, if a copy of the Prospectus (as then supplemented) was not
sent or given by or on behalf of such Investor Party to such Person, if required
by law to have been delivered, at or prior to the written confirmation of the
sale of such Securities to such person, and if delivery of the Prospectus (as
then supplemented) would have cured the defect giving rise to such Losses. The
parties intend that any Losses subject to indemnification under this Section
5.8(a) will be net of insurance proceeds (which Investor agrees to use
commercially reasonable efforts to recover or cause any Investor Party to
recover).  Accordingly, the amount which the Company is required to
pay any Investor Party under this Section 5.8(a) will be reduced by any
insurance proceeds actually recovered by or on behalf of any Investor Party in
reduction of the related Losses.  In addition, if an Investor Party
receives indemnification from the Company under this Section 5.8(a) in respect
of any Losses and subsequently receives any such insurance proceeds, then
Investor will pay, or will cause such other Investor Party to pay, to the
Company an amount equal to the indemnification payment received under this
Section 5.8(a) less the amount of the indemnification payment that would have
been due if the insurance proceeds had been received, realized or recovered
before such indemnification payment was made.  However, no provision
herein regarding insurance proceeds shall delay payment by the Company to any
Investor Party for any indemnified Losses.

    
      
         

      

      
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    (b)           Indemnification by
Investor.  Subject to the provisions of this Section 5.8(b),
Investor will indemnify and hold the Company, its Affiliates and attorneys, and
each of the Company’s directors, officers, shareholders, employees, agents, and
any Person who controls the Company within the meaning of Section 15 of the Act
or Section 20 of the Exchange Act (collectively, the “Company Parties” and
each an “Company
Party”), harmless from any and all Losses that any Company Party has been
finally adjudicated to have suffered or incurred solely as a result of (a) any
unexcused material breach of any material representations, warranties, covenants
or agreements made by Investor in this Agreement or in the other Transaction
Documents, (b) any conduct by Investor which constitutes fraud, willful
misconduct or malfeasance, (c) any untrue statement of a material fact contained
in a Registration Statement (or in a Registration Statement as amended by any
post-effective amendment thereof by the Company) based upon any omission to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading, in each case, to the extent the untrue
statement or omission was made in reliance upon, and in conformity with,
information furnished to the Company in writing by or on behalf of any Investor
Party expressly for use in the Registration Statement (or any amendment thereto)
and/or (d) any untrue statement of a material fact included in any Prospectus
(or any amendments or supplements to any Prospectus ), or based upon any
omission to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, in each case, to the extent the untrue statement or omission was
made in reliance upon, and in conformity with, information furnished to the
Company in writing by or on behalf of any Investor Party expressly for use in
the Prospectus (or any supplement thereto). The parties intend that any Losses
subject to indemnification under this Section 5.8(b) will be net of insurance
proceeds (which the Company agrees to use commercially reasonable efforts to
recover or cause any Company Party to recover).  Accordingly, the
amount which Investor is required to pay any Company Party under this Section
5.8(b) will be reduced by any insurance proceeds actually recovered by or on
behalf of any Company Party in reduction of the related Losses.  In
addition, if a Company Party receives indemnification from Investor under this
Section 5.8(b) in respect of any Losses and subsequently receives any such
insurance proceeds, then the Company will pay, or will cause such other Company
Party to pay, to Investor an amount equal to the indemnification payment
received under this Section 5.8(b) less the amount of the indemnification
payment that would have been due if the insurance proceeds had been received,
realized or recovered before such indemnification payment was made. However, no
provision herein regarding insurance proceeds shall delay payment by Investor to
any Company Party for any indemnified Losses.

     

    (c)           Procedure for
Indemnification Claims.  Promptly after a Person receives
notice of a claim or the commencement of an action for which the Person intends
to seek indemnification under this Section 5.8, the Person will notify the
indemnifying party in writing of the claim or commencement of the action, suit
or proceeding; provided, however, that failure
to notify the indemnifying party will not relieve the indemnifying party from
liability under this Section 5.8, except to the extent it has been materially
prejudiced by the failure to give notice.  The indemnifying party will
be entitled to participate in the defense of any claim, action, suit or
proceeding as to which indemnification is being sought, and if the indemnifying
party is the Company, the indemnifying party may (but will not be required to)
assume the defense against the claim, action, suit or proceeding with counsel
satisfactory to it.  Subject to the immediately following sentence, if
the Company notifies an indemnified party that it wishes to assume the defense
of a claim, action, suit or proceeding, the Company will not be liable for any
legal or other expenses incurred by the indemnified party in connection with the
defense against the claim, action, suit or proceeding. The indemnified party
shall have the right to employ separate counsel in any such action and
participate in the defense thereof, but the fees and expenses of such counsel
shall be at the expense of such indemnified party, except to the extent that (i)
the employment thereof has been specifically authorized by the Company in
writing, (ii) the Company has failed after a reasonable period of time to assume
such defense and to employ counsel, or (iii) in such action there is, in the
reasonable opinion of such separate counsel, a material conflict with respect to
the dispute in question on any material issue between the position of the
Company and the position of the indemnified party such that it would be
inappropriate for one counsel to represent both parties.  No
indemnifying party will be liable to any indemnified party under this Agreement
for any settlement by such indemnified party of any action effected by such
indemnified party without the indemnifying party’s prior written consent, which
shall not be unreasonably withheld or delayed.

    
      
         

      

      
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    5.9           Reservation of
Securities.  The Company shall maintain a reserve from its duly
authorized shares of Common Stock for issuance pursuant to the Transaction
Documents in such amount as may be required to fulfill its obligations in full
under the Transaction Documents.

     

    5.10         Limited
Standstill.  The Company will use reasonable efforts to deliver
to Investor on or before the first Tranche Closing Date, and will thereafter
honor and enforce the provisions of, the Lock-Up Agreements with the Company’s
executive officers, directors and beneficial owners of 10% or more of the Common
Stock.

     

    5.11         Issuance of Additional
Securities.  The Company shall not issue additional Common
Stock or securities convertible into Common Stock to any Person (other than
Investor, an Affiliate of Investor, or in connection with an incentive
compensation plan), if such issuance would reduce the number of remaining
authorized shares of Common Stock that could be issued by the Company below the
number of remaining authorized shares issuable upon exercise of the Warrant,
without previously amending its Certificate of Incorporation to increase the
number of duly authorized shares of Common Stock by at least the amount
necessary to assume a sufficient number of shares to permit the exercise in full
of the Warrant.  However, nothing in this Section 5.11 shall diminish
the obligation of the Company to issue the Securities to the Investor in
accordance with this Agreement and the Warrant.

     

    5.12         Prospectus Availability and
Changes.  The Company will make available to Investor upon
request, and thereafter from time to time will furnish Investor, as many copies
of any Prospectus (or of the Prospectus as amended or supplemented if the
Company shall have made any amendments or supplements thereto after the
effective date of the applicable Registration Statement) as Investor may request
for the purposes contemplated by the Act; and in case Investor is required to
deliver a prospectus after the nine-month period referred to in Section 10(a)(3)
of the Act in connection with the sale of the Warrant Shares, or after the time
a post-effective amendment to the applicable Registration Statement is required
pursuant to Item 512(a) of Regulation S-K under the Act, the Company will
prepare, at its expense, promptly upon request such amendment or amendments to
the Registration Statement and the Prospectus as may be necessary to permit
compliance with the requirements of Section 10(a)(3) of the Act or Item 512(a)
of Regulation S-K under the Act, as the case may be.

    
      
         

      

      
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    The
Company will advise Investor promptly of the happening of any event within the
time during which a Prospectus is required to be delivered by Investor under the
Act which, in the good faith judgment of the Company, following consultation
with its independent legal counsel, would require the making of any change in
the Prospectus then being used so that the Prospectus would not include an
untrue statement of material fact or omit to state a material fact necessary in
order to make the statements therein, in the light of the circumstances under
which they are made, not misleading, and to advise Investor promptly if, during
such period, in the good faith judgment of the Company, following consultation
with its independent legal counsel, it shall become necessary to amend or
supplement any Prospectus to cause such Prospectus to comply with the
requirements of the Act, and in each case, during such time, to prepare and
furnish, at the Company’s expense, to Investor promptly such amendments or
supplements to such Prospectus as may be necessary to reflect any such change or
to effect such compliance. The Company shall not be required to disclose to the
Investor the substance or specific reasons of any of the events referred to in
the immediately preceding sentence, but rather, shall only be required to
disclose that the event has occurred. Notwithstanding anything herein to the
contrary, the Company need not advise the Investor regarding any supplement to
the Prospectus the purpose of which is to update the Prospectus and the
Registration Statement to include information the Company has previously filed
with the SEC pursuant to Section 13 or 15(d) or 14(a) of the Exchange Act and
the rules and regulations promulgated thereunder.

     

    5.13           Activity
Restrictions.  For so long as Investor or any of its Affiliates
holds any Securities, neither Investor nor any Affiliate will:  (i)
vote any shares of Common Stock owned or controlled by it, solicit any proxies,
or seek to advise or influence any Person with respect to any voting securities
of the Company; (ii) engage or participate in any actions, plans or proposals
which relate to or would result in (a) acquiring additional securities of the
Company, alone or together with any other Person, which would result in
beneficially owning or controlling more than 9.99% of the total outstanding
Common Stock or other voting securities of the Company, (b) an extraordinary
corporate transaction, such as a merger, reorganization or liquidation,
involving Company or any of its subsidiaries, (c) a sale or transfer of a
material amount of assets of the Company or any of its subsidiaries, (d) any
change in the present board of directors or management of the Company, including
any plans or proposals to change the number or term of directors or to fill any
existing vacancies on the board, (e) any material change in the present
capitalization or dividend policy of the Company, (f) any other material change
in the Company’s business or corporate structure, including but not limited to,
if the Company is a registered closed-end investment company, any plans or
proposals to make any changes in its investment policy for which a vote is
required by Section 13 of the Investment Company Act of 1940, (g) changes in the
Company’s charter, bylaws or instruments corresponding thereto or other actions
which may impede the acquisition of control of the Company by any Person, (h)
causing a class of securities of the Company to be delisted from a national
securities exchange or to cease to be authorized to be quoted in an inter-dealer
quotation system of a registered national securities association, (i) a class of
equity securities of the Company becoming eligible for termination of
registration pursuant  to Section 12(g)(4) of the Act, or (j) any
action, intention, plan or arrangement similar to any of those enumerated above;
or (iii) request the Company or its directors, officers, employees, agents or
representatives to amend or waive any provision of this Section
5.13.

    
      
         

      

      
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    ARTICLE 6

    MISCELLANEOUS

     

    6.1           Fees and
Expenses.  Except for the $20,000.00 non-refundable document
preparation fee previously paid by the Company to counsel for Investor, the
receipt of which is hereby acknowledged by Investor, and the $5,000.00
non-refundable administrative fee payable to counsel for Investor at each
Tranche Closing, and as may be otherwise provided in this Agreement, each party
shall pay the fees and expenses of its own advisers, counsel, accountants and
other experts, if any, and all other expenses incurred by such party incident to
the negotiation, preparation, execution, delivery and performance of the
Transaction Documents.  The Company acknowledges and agrees that Luce
Forward solely represents Investor, and does not represent the Company or its
interests in connection with the Transaction Documents or the transactions
contemplated thereby.  The Company shall pay all stamp and other taxes
and duties levied in connection with the sale of the Securities, if any, to
Investor by the Company.

     

    6.2           Notices.  Any
and all notices or other communications or deliveries required or permitted to
be provided hereunder shall be in writing and shall be deemed given and
effective on the earliest of:  (a) the date of transmission, if such
notice or communication is delivered via facsimile or electronic mail prior to
5:30 p.m., New York City time, on a Trading Day and an electronic confirmation
of delivery is received by the sender, (b) the next Trading Day after the date
of transmission, if such notice or communication is delivered later than 5:30
p.m., New York City time, or on a day that is not a Trading Day, (c) three
Trading Days following the date of mailing, if sent by U.S. nationally
recognized overnight courier service, or (d) upon actual receipt by the party to
whom such notice is required to be given.  The addresses for such
notices and communications are those set forth following the signature page
hereof, or such other address as may be designated in writing hereafter, in the
same manner, by such Person.

     

    6.3           Amendments;
Waivers.  No provision of this Agreement may be waived or
amended except in a written instrument signed, in the case of an amendment, by
the Company and Investor or, in the case of a waiver, by the party against whom
enforcement of any such waiver is sought.  No waiver of any default
with respect to any provision, condition or requirement of this Agreement shall
be deemed to be a continuing waiver in the future or a waiver of any subsequent
default or a waiver of any other provision, condition or requirement hereof, nor
shall any delay or omission of either party to exercise any right hereunder in
any manner impair the exercise of any such right.

     

    6.4           Headings.  The
headings herein are for convenience only, do not constitute a part of this
Agreement and shall not be deemed to limit or affect any of the provisions
hereof.

     

    6.5           Successors and
Assigns.  This Agreement shall be binding upon and inure to the
benefit of the parties and their successors and permitted
assigns.  The Company may not assign this Agreement or any rights or
obligations hereunder without the prior written consent of Investor, which
consent will not be unreasonably withheld or delayed.  Investor may
assign any or all of its rights under this Agreement to any Affiliate or to any
Person to whom Investor assigns or transfers any Securities, provided such
transferee agrees in writing to be bound, with respect to the transferred
Securities, by the provisions hereof that apply to the
“Investor”.

    
      
         

      

      
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    6.6           No Third-Party
Beneficiaries.  This Agreement is intended for the benefit of
the parties hereto and their respective successors and permitted assigns and is
not for the benefit of, nor may any provision hereof be enforced by, any other
Person, except as otherwise expressly set forth in Section 5.8
hereof.

     

    6.7           Governing
Law.  All questions concerning the construction, validity,
enforcement and interpretation of the Transaction Documents shall be governed by
and construed and enforced in accordance with the internal laws of the State of
New York, without regard to the principles of conflicts of law
thereof.  Each party agrees that all legal proceedings concerning the
interpretations, enforcement and defense of the transactions contemplated by
this Agreement and any other Transaction Documents (whether brought against a
party hereto or its respective affiliates, directors, officers, shareholders,
employees or agents) shall be commenced exclusively in the state and federal
courts sitting in the City of New York.  Each party hereby irrevocably
submits to the exclusive jurisdiction of the state and federal courts sitting in
the City of New York, borough of Manhattan for the adjudication of any dispute
hereunder or in connection herewith or with any transaction contemplated hereby
or discussed herein (including with respect to the enforcement of any of the
Transaction Documents), and hereby irrevocably waives, and agrees not to assert
in any suit, action or proceeding, any claim that it is not personally subject
to the jurisdiction of any such court, that such suit, action or proceeding is
improper or inconvenient venue for such proceeding.  Each party hereby
irrevocably waives personal service of process and consents to process being
served in any such suit, action or proceeding by mailing a copy thereof via
registered or certified mail or overnight delivery (with evidence of delivery)
to such party at the address in effect for notices to it under this Agreement
and agrees that such service shall constitute good and sufficient service of
process and notice thereof.  Nothing contained herein shall be deemed
to limit in any way any right to serve process in any manner permitted by
law.  The parties hereby waive all rights to a trial by
jury.  If either party shall commence an action or proceeding to
enforce any provisions of the Transaction Documents, then the prevailing party
in such action or proceeding shall be reimbursed by the other party for its
attorneys’ fees and other costs and expenses reasonably incurred in connection
with the investigation, preparation and prosecution of such action or
proceeding.

     

    6.8           Survival.  The
representations and warranties and covenants contained herein shall survive the
Closing and the delivery, exercise and/or conversion of the Securities, as
applicable.

     

    6.9           Execution.  This
Agreement may be executed in two or more counterparts, all of which when taken
together shall be considered one and the same agreement and shall become
effective when counterparts have been signed by each party and delivered to the
other party, it being understood that both parties need not sign the same
counterpart.  In the event that any signature is delivered by
facsimile transmission, such signature shall create a valid and binding
obligation of the party executing (or on whose behalf such signature is
executed) with the same force and effect as if such facsimile signature page
were an original thereof.

     

    6.10         Severability.  If
any provision of this Agreement is held to be invalid or unenforceable in any
respect, the validity and enforceability of the remaining terms and provisions
of this Agreement shall not in any way be affected or impaired thereby and the
parties will attempt to agree upon a valid and enforceable provision that is a
reasonable substitute therefor, and upon so agreeing, shall incorporate such
substitute provision in this Agreement.

    
      
         

      

      
        33

        
          

        

      

      
         

      

    

     

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

     

    6.12           Remedies.  In
addition to being entitled to exercise all rights provided herein or granted by
law, including recovery of damages, each of Investor and the Company will be
entitled to specific performance under the Transaction Documents.  The
parties agree that monetary damages may not be adequate compensation for any
loss incurred by reason of any breach of obligations under the Transaction
Documents and hereby agrees to waive in any action for specific performance of
any such obligation the defense that a remedy at law would be
adequate.

     

    6.13           Payment Set
Aside.  To the extent that the Company makes a payment or
payments to Investor pursuant to any Transaction Document or Investor enforces
or exercises its rights thereunder, and such payment or payments or the proceeds
of such enforcement or exercise or any part thereof are subsequently
invalidated, declared to be fraudulent or preferential, set aside, recovered
from, disgorged by or are required to be refunded, repaid or otherwise restored
to the Company, a trustee, receiver or any other person under any law
(including, without limitation, any bankruptcy law, state or federal law, common
law or equitable cause of action), then to the extent of any such restoration
the obligation or part thereof originally intended to be satisfied shall be
revived and continued in full force and effect as if such payment had not been
made or such enforcement or setoff had not occurred.

     

    6.14           Liquidated
Damages.  The Company’s obligations to pay any partial
liquidated damages or other amounts owing under the Transaction Documents is a
continuing obligation of the Company and shall not terminate until all unpaid
partial liquidated damages and other amounts have been paid notwithstanding the
fact that the instrument or security pursuant to which such partial liquidated
damages or other amounts are due and payable shall have been
canceled.

     

    6.15           Time of the
Essence.  Time is of the essence with respect to all provisions
of this Agreement that specify a time for performance.

     

    6.16           Construction.  The
parties agree that each of them and/or their respective counsel has reviewed and
had an opportunity to revise the Transaction Documents and, therefore, the
normal rule of construction to the effect that any ambiguities are to be
resolved against the drafting party shall not be employed in the interpretation
of the Transaction Documents or any amendments hereto.

    
      
         

      

      
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    6.17           Entire
Agreement.  The Transaction Documents contain the entire
agreement and understanding of the parties, and supersede all prior and
contemporaneous agreements, term sheets, letters, discussions, communications
and understandings, both oral and written, which the parties acknowledge have
been merged into the Transaction Documents.  Neither party has relied
upon any agreement, assurance, promise, understanding or representation not
expressly set forth in the Transaction Documents and each party agrees that it
may only rely on the agreements, assurances, promises, understandings and
representations set forth therein.

     

    6.18           Further
Assurances.  From and after the Effective Date, upon the
request of Investor or the Company, each of the Company and Investor shall
execute and deliver such instruments, documents and other writings as may be
reasonably necessary or desirable to confirm and carry out and to effectuate
fully the intent and purposes of this Agreement.

     

    
      
         

      

      
        35

        
          

        

      

      
         

      

    

    

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

     

    ADVAXIS,
INC.

     

    
      
        	
                By:

              	
                /s/ Thomas A.
  Moore

              

      

    

    Name:
Thomas A. Moore

    Title:
Chairman and CEO

     

    OPTIMUS
LIFE SCIENCES CAPITAL PARTNERS, LLC

     

    
      
        	
                By:

              	
                /s/ Terry
Peizer

              

      

    

    Name:
Terry Peizer

    Title:
Managing Member

    
      
         

      

      
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    Addresses
for Notice

     

    To
Company:

     

    Advaxis,
Inc.

    The
Technology Centre of New Jersey

    675 Route
1, Suite 119

    North
Brunswick, NJ 08902

    Fax
No.:  (732) 545-1084

    Email:
moore@advaxis.com

     

    with a
copy to:

     

    Greenberg
Traurig, LLP

    The
MetLife Building

    200 Park
Avenue

    New York,
NY 10166

    Attention:  Robert
H. Cohen, Esq.

    Fax
No.:  (212) 801-6400

    Email:  cohenr@gtlaw.com

    

    
      
        
          	 
      	
                  To
      Investor:

                
	 
      	 
      
	 
      	
                  Optimus
      Life Sciences Capital Partners, LLC

                
	 
      	
                  11150
      Santa Monica Boulevard, Suite 1500

                
	 
      	
                  Los
      Angeles, CA 90025

                
	 
      	
                  Fax
      No.:  (310) 444-5300

                
	 
      	
                  Email:  info@optimuscg.com

                
	 	 
	 
      	
                  with
      a copy to:

                
	 	 
	 
      	
                  Luce
      Forward Hamilton & Scripps LLP

                
	 
      	
                  601
      South Figueroa Street, Suite 3900

                
	 
      	
                  Los
      Angeles, CA 90017

                
	 
      	
                  Attention:  John
      C. Kirkland, Esq.

                
	 
      	
                  Fax
      No.:  (213) 452-8035

                
	 
      	
                  Email:  jkirkland@luce.com

                

        

      

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    Exhibit
A

     

    Form
of Warrant

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    NEITHER
THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE
SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE HAVE BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES
LAWS.  THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED
OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR
THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION
OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER), IN A GENERALLY
ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS
SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT.

     

    Advaxis,
Inc.

     

    Warrant
To Purchase Common Stock

     

    
      
        	
                Warrant
      No.: 2009-1

              	
                Issuance
      Date:  September 24, 2009

              
	 
      	 
      
	
                Number
      of Warrant Shares:  33,750,000

              	
                Initial
      Exercise
Price:  $0.20

              

      

    

     

    Advaxis,
Inc., a Delaware corporation (“Company”), hereby
certifies that, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, Optimus CG II, LLC, the holder hereof, or its
designees or assigns (“Holder”), is
entitled, subject to the terms set forth below, to purchase from the Company, at
the Exercise Price (as defined below) then in effect, upon surrender of this
Warrant to Purchase Common Stock (including any Warrants to Purchase Common
Stock issued in exchange, transfer or replacement hereof, the “Warrant”), at any
time or times during the Exercise Period (as defined below), that number of duly
authorized, validly issued, fully paid and non-assessable shares of Common Stock
set forth above (the “Warrant
Shares”).

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    ARTICLE 1

    EXERCISE
OF WARRANT.

     

    1.1           Mechanics of
Exercise.  Subject to the terms and conditions hereof, this
Warrant may be exercised by the Holder on any day during the Exercise Period, in
whole or in part, by (i) delivery of a written notice to the Company, in the
form attached hereto as Appendix 1 (the “Exercise Notice”), of
the Holder’s election to exercise this Warrant and (ii) payment to the Company
of an amount equal to the applicable Exercise Price multiplied by the number of
Warrant Shares as to which this Warrant is being exercised (the “Aggregate Exercise
Price”) in cash or by wire transfer of immediately available funds, by
the issuance and delivery of a recourse promissory note substantially in the
form attached hereto as Appendix 2 (each, a “Recourse Note”), or,
if applicable, by cashless exercise pursuant to Section 1.3.  The
Holder shall not be required to deliver the original Warrant in order to effect
an exercise hereunder.  Execution and delivery of the Exercise Notice
with respect to less than all of the Warrant Shares shall have the same effect
as cancellation of the original Warrant and issuance of a new Warrant evidencing
the right to purchase the remaining number of Warrant Shares.  On the
same Trading Day on which the Company has received each of the Exercise Notice
and the Aggregate Exercise Price (the “Exercise Delivery
Documents”) by 10:30 a.m. Eastern time, or the following Trading Day if
received after such time or on a non-Trading Day, the Company shall transmit by
facsimile an acknowledgment of confirmation of receipt of the Exercise Delivery
Documents to the Holder and the Company’s transfer agent (the “Transfer Agent”) and
(i) provided that the Transfer Agent is participating in The Depository Trust
Company (DTC) Fast Automated Securities Transfer (FAST) Program, upon the
request of the Holder, credit such aggregate number of Warrant Shares to which
the Holder is entitled pursuant to such exercise to the Holder’s or its
designee’s balance account with DTC through its Deposit/Withdrawal at Custodian
(DWAC) system, or (ii) if the Transfer Agent is not participating in the DTC
FAST Program, issue and deliver to the Holder or, at the Holder’s instruction
pursuant to the Exercise Notice, the Holder’s agent or designee, in each case,
sent by reputable overnight courier to the address as specified in the
applicable Exercise Notice, a certificate, registered in the Company’s share
register in the name of the Holder or its designee (as indicated in the
applicable Exercise Notice), for the number of Warrant Shares to which the
Holder is entitled pursuant to such exercise, which certificate shall not be
imprinted with any restrictive legends and no stop transfer order shall be
placed against the transfer thereof.  Upon delivery of the Exercise
Delivery Documents, the Holder shall be deemed for all corporate purposes to
have become the holder of record of the Warrant Shares with respect to which
this Warrant has been exercised, irrespective of the date such Warrant Shares
are credited to the Holder’s DTC account or the date of delivery of the
certificate(s) evidencing the Warrant Shares (as the case may be). If this
Warrant is submitted in connection with any exercise pursuant to this Section
1.1 and the number of Warrant Shares represented by this Warrant submitted for
exercise is greater than the number of Warrant Shares being acquired upon an
exercise, then the Company shall as soon as practicable and in no event later
than three Trading Days after any exercise and return of the previously issued
Warrant, at its own expense issue a new Warrant representing the right to
purchase the number of Warrant Shares purchasable immediately prior to such
exercise under this Warrant, less the number of Warrant Shares with respect to
which this Warrant is exercised. No fractional shares of Common Stock are to be
issued upon the exercise of this Warrant, but rather the number of shares of
Common Stock to be issued shall be rounded up to the nearest whole number. The
Company shall pay any and all taxes which may be payable with respect to the
issuance and delivery of Warrant Shares upon exercise of this
Warrant.

     

    1.2           Exercise
Price.

     

      (a)           For
purposes of this Warrant, “Exercise Price” means $0.20, subject to adjustment as
provided in paragraph (b) below and subject to adjustment as provided in Article
II hereof.

     

      (b)           Immediately
following each Tranche Closing, the Exercise Price applicable to a number of
Warrant Shares equal to the product of (i) the total number of Warrant Shares
issuable upon exercise of this Warrant on the day of the applicable Tranche
Closing multiplied by (ii) the quotient of (1) the aggregate Tranche Purchase
Price paid by the Holder to the Company on the day of the applicable Tranche
Closing divided by (2) the Maximum Placement shall be automatically adjusted to
equal the Closing Sale Price of a share of Common Stock on the Trading Day
immediately preceding the applicable Tranche Notice Date, and such adjusted
Exercise Price and such number of Warrant Shares to which it applies shall be
set forth on Schedule 1 attached hereto (subject to adjustment as provided in
Article II hereof after the initial issuance date hereof).  Once the
Exercise Price applicable to a Warrant Share is adjusted pursuant to the
foregoing, no further adjustment to the Exercise Price applicable to such
Warrant Share shall be made pursuant to this paragraph.

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

     

    1.3           Cashless
Exercise.  Notwithstanding anything contained herein to the
contrary (other than Section 1.5 below), if at any time a registration statement
is not effective (or the prospectus contained therein is not available for use)
for the resale by the Holder of the Warrant Shares that are the subject of the
Exercise Notice (the “Unavailable Warrant
Shares”), the Holder may, in its sole discretion, exercise this Warrant
in whole or in part and, in lieu of making the cash payment otherwise
contemplated to be made to the Company upon such exercise in payment of the
Aggregate Exercise Price, elect instead to receive upon such exercise the “Net
Number” of shares of Common Stock determined according to the following formula
(a “Cashless
Exercise”):

     

    Net
Number = (B-C) x
A

     

       
B

     

    For
purposes of the foregoing formula:

    

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

     

    B = the
average of the Closing Sale Prices of the shares of Common Stock (as reported by
Bloomberg) for the five (5) consecutive Trading Days ending on the date
immediately preceding the date of the Exercise Notice.

     

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

     

    1.4           Company’s Failure to Timely
Deliver Securities.  If the Company shall fail for any reason
or for no reason to timely issue to the Holder or its designee a certificate for
the number of Warrant Shares to which the Holder is entitled and register such
Warrant Shares on the Company’s share register or to credit the Holder’s balance
account with DTC for such number of Warrant Shares to which the Holder is
entitled upon the Holder’s exercise of this Warrant (as the case may be), then,
in addition to all other remedies available to the Holder, the Company shall pay
in cash to the Holder on each day that the issuance of such Warrant Shares is
not timely effected an amount equal to 1.5% of the product of (A) the sum of the
number of Warrant Shares not issued to the Holder on a timely basis and to which
the Holder is entitled and (B) the Closing Sale Price of the shares of Common
Stock on the Trading Day immediately preceding the last possible date which the
Company could have issued such Warrant Shares to the Holder without violating
Section 1.1.  In addition to the foregoing, if after the Company’s
receipt of the applicable Exercise Delivery Documents the Company shall fail to
timely issue to the Holder or its designee a certificate for the number of
Warrant Shares to which the Holder is entitled and register such Warrant Shares
on the Company’s share register or to credit the Holder’s balance account with
DTC for the number of Warrant Shares to which the Holder is entitled upon the
Holder’s exercise hereunder (as the case may be), and the Holder purchases (in
an open market transaction or otherwise) shares of Common Stock to deliver in
satisfaction of a sale by the Holder of Warrant Shares issuable upon such
exercise that the Holder anticipated receiving from the Company (a “Buy-In”), then the
Company shall, within three Trading Days after the Holder’s request and in the
Holder’s discretion, either (i) pay cash to the Holder in an amount equal to the
Holder’s total purchase price (including brokerage commissions, if any) for the
shares of Common Stock so purchased (the “Buy-In Price”), at
which point the Company’s obligation to deliver such certificate or credit such
Holder’s balance account with DTC for the number of Warrant Shares to which the
Holder is entitled upon the Holder’s exercise hereunder (as the case may be) and
to issue such Warrant Shares shall terminate, or (ii) promptly honor its
obligation to deliver to the Holder or its designee a certificate or
certificates representing such Warrant Shares or credit such Holder’s balance
account with DTC for the number of Warrant Shares to which the Holder is
entitled upon the Holder’s exercise hereunder (as the case may be) and pay cash
to the Holder in an amount equal to the excess (if any) of the Buy-In Price over
the product of (A) such number of shares of Common Stock sold by Holder in
satisfaction of its obligations, times (B) the Closing Bid Price on the date of
exercise.

    
      
         

      

      
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    1.5           Exercise
Limitation.  Notwithstanding any other provision, at no time
may the Holder exercise this Warrant such that the number of Warrant Shares to
be received pursuant to such exercise aggregated with all other shares of Common
Stock then owned by the Holder beneficially or deemed beneficially owned by the
Holder would result in the Holder owning more than 4.99% of all of such Common
Stock as would be outstanding on such Exercise Date, as determined in accordance
with Section 13(d) of the Exchange Act and the rules and regulations promulgated
thereunder.  In addition, as of any date, the aggregate number of
shares of Common Stock into which this Warrant is exercisable within 61 days,
together with all other shares of Common Stock then beneficially owned (as such
term is defined in Rule 13(d) under the Exchange Act) by Holder and its
affiliates, shall not exceed 9.99% of the total outstanding shares of Common
Stock as of such date.  At no time when the number of Warrant Shares
then owned by the Holder, when aggregated with all other shares of Common Stock
then owned by the Holder beneficially or deemed beneficially owned by the
Holder, would result in the Holder owning more than 1.0% of all outstanding
Common Stock will Holder vote or cause to be voted any such shares.

     

    1.6           Restrictions.  For
so long as Holder holds this Warrant or any Warrant Shares, Holder will
not:  (i) vote any shares of Common Stock owned or controlled by it,
solicit any proxies, or seek to advise or influence any Person with respect to
any voting securities of the Company; (ii) engage or participate in any actions,
plans or proposals which relate to or would result in (a) acquiring additional
securities of the Company, alone or together with any other Person, which would
result in beneficially owning or controlling more than 9.99% of the total
outstanding Common Stock or other voting securities of the Company, (b) an
extraordinary corporate transaction, such as a merger, reorganization or
liquidation, involving Company or any of its subsidiaries, (c) a sale or
transfer of a material amount of assets of the Company or any of its
subsidiaries, (d) any change in the present board of directors or management of
the Company, including any plans or proposals to change the number or term of
directors or to fill any existing vacancies on the board, (e) any material
change in the present capitalization or dividend policy of the Company, (f) any
other material change in the Company’s business or corporate structure,
including but not limited to, if the Company is a registered closed-end
investment company, any plans or proposals to make any changes in its investment
policy for which a vote is required by Section 13 of the Investment Company Act
of 1940, (g) changes in the Company’s charter, bylaws or instruments
corresponding thereto or other actions which may impede the acquisition of
control of the Company by any Person, (h) causing a class of securities of the
Company to be delisted from a national securities exchange or to cease to be
authorized to be quoted in an inter-dealer quotation system of a registered
national securities association, (i) a class of equity securities of the Company
becoming eligible for termination of registration pursuant  to Section
12(g)(4) of the Act, or (j) any action, intention, plan or arrangement similar
to any of those enumerated above; or (iii) request the Company or its directors,
officers, employees, agents or representatives to amend or waive any provision
of this Section
1.6.

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

     

    1.7           Disputes.  In
the case of a dispute as to the determination of the Exercise Price or the
arithmetic calculation of the Warrant Shares, the Company shall promptly issue
to the Holder the number of Warrant Shares that are not disputed and resolve
such dispute in accordance with Section 12.

     

    1.8           Insufficient Authorized
Shares.  If at any time while this Warrant (or any portion
thereof) remains outstanding the Company does not have a sufficient number of
authorized and unreserved shares of Common Stock to satisfy its obligation to
reserve for issuance upon exercise of this Warrant at least a number of shares
of Common Stock equal to 110% of the number of shares of Common Stock as shall
from time to time be necessary to effect the exercise in full of any unexercised
portion of this Warrant (the “Required Reserve
Amount”) (an “Authorized Share
Failure”), then the Company shall immediately take all action necessary
to increase the Company’s authorized shares of Common Stock to an amount
sufficient to allow the Company to reserve the Required Reserve Amount for the
unexercised portion of the Warrant then outstanding.  Without limiting
the generality of the foregoing sentence, as soon as practicable after the date
of the occurrence of an Authorized Share Failure, but in no event later than 90
days after the occurrence of such Authorized Share Failure, the Company shall
use commercially reasonable efforts to hold a meeting of its stockholders for
the approval of an increase in the number of authorized shares of Common
Stock.  In connection with such meeting, the Company shall provide
each stockholder with a proxy statement and shall use its commercially
reasonable efforts to solicit its stockholders’ approval of such increase in
authorized shares of Common Stock and to cause its board of directors to
recommend to the stockholders that they approve such proposal.

     

    ARTICLE 2

    ADJUSTMENT
UPON SUBDIVISION OR COMBINATION OF COMMON STOCK.

     

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

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

     

    ARTICLE 3

    PURCHASE
RIGHTS; FUNDAMENTAL TRANSACTIONS

     

    3.1           Purchase
Rights.  In addition to any adjustments pursuant to ARTICLE 2
above, if at any time the Company grants, issues or sells any Options,
Convertible Securities or rights to purchase stock, warrants, securities or
other property pro rata to the record holders of any class of shares of Common
Stock (the “Purchase
Rights”), then the Holder will be entitled to acquire, upon the terms
applicable to such Purchase Rights, the aggregate Purchase Rights which the
Holder could have acquired if the Holder had held the number of shares of Common
Stock acquirable upon complete exercise of this Warrant (without regard to any
limitations on the exercise of this Warrant) immediately before the date on
which a record is taken for the grant, issuance or sale of such Purchase Rights,
or, if no such record is taken, the date as of which the record holders of
shares of Common Stock are to be determined for the grant, issue or sale of such
Purchase Rights.

     

    3.2           Fundamental
Transactions.  The Company shall not enter into or be party to
a Fundamental Transaction unless the Successor Entity assumes in writing all of
the obligations of the Company under this Warrant in accordance with the
provisions of this Section 3.2 pursuant to written agreements in form and
substance satisfactory to the Required Holders and approved by the Required
Holders prior to such Fundamental Transaction, including agreements to deliver
to each holder of Warrants in exchange for such Warrants a security of the
Successor Entity evidenced by a written instrument substantially similar in form
and substance to this Warrant, including, without limitation, an adjusted
exercise price equal to the value for the shares of Common Stock reflected by
the terms of such Fundamental Transaction, and exercisable for a corresponding
number of shares of capital stock equivalent to the shares of Common Stock
acquirable and receivable upon exercise of this Warrant (without regard to any
limitations on the exercise of this Warrant) prior to such Fundamental
Transaction, and satisfactory to the Required Holders.  Upon the
occurrence of any Fundamental Transaction, the Successor Entity shall succeed
to, and be substituted for (so that from and after the date of such Fundamental
Transaction, the provisions of this Warrant referring to the “Company” shall refer
instead to the Successor Entity), and may exercise every right and power of the
Company and shall assume all of the obligations of the Company under this
Warrant with the same effect as if such Successor Entity had been named as the
Company herein.  Upon consummation of the Fundamental Transaction, the
Successor Entity shall deliver to the Required Holders confirmation that there
shall be issued upon exercise of this Warrant at any time after the consummation
of the Fundamental Transaction, in lieu of the shares of the Common Stock (or
other securities, cash, assets or other property) purchasable upon the exercise
of this Warrant prior to such Fundamental Transaction, such shares of stock,
securities, cash, assets or any other property whatsoever (including warrants or
other purchase or subscription rights) which the Required Holders would have
been entitled to receive upon the happening of such Fundamental Transaction had
this Warrant been converted immediately prior to such Fundamental Transaction,
as adjusted in accordance with the provisions of this Warrant.  In
addition to and not in substitution for any other rights hereunder, prior to the
consummation of any Fundamental Transaction pursuant to which holders of shares
of Common Stock are entitled to receive securities or other assets with respect
to or in exchange for shares of Common Stock (a “Corporate Event”),
the Company shall make appropriate provision to insure that the Required Holders
will thereafter have the right to receive upon an exercise of this Warrant at
any time after the consummation of the Fundamental Transaction, in lieu of the
shares of the Common Stock (or other securities, cash, assets or other property)
purchasable upon the exercise of this Warrant prior to such Fundamental
Transaction, such shares of stock, securities, cash, assets or any other
property whatsoever (including warrants or other purchase or subscription
rights) which the Required Holders would have been entitled to receive upon the
happening of such Fundamental Transaction had this Warrant been exercised
immediately prior to such Fundamental Transaction.  Provision made
pursuant to the preceding sentence shall be in a form and substance reasonably
satisfactory to the Required Holders.  The provisions of this Section
3.2  shall apply similarly and equally to successive Fundamental
Transactions and Corporate Events and shall be applied without regard to any
limitations on the exercise of this Warrant.

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

     

    3.3           Notwithstanding
the foregoing, in the event of a Fundamental Transaction other than one in which
the Successor Entity is a Public Successor Entity that assumes this Warrant such
that this Warrant shall be exercisable for the publicly traded common stock of
such Public Successor Entity, at the request of the Holder delivered before the
90th day after such Fundamental Transaction, the Company (or the Successor
Entity) shall purchase this Warrant from the Holder by paying to the Holder,
within five (5) Trading Days after such request (or, if later, on the effective
date of the Fundamental Transaction), cash in an amount equal to the value of
the remaining unexercised portion of this Warrant on the date of such
consummation, which value shall be determined by use of the Black Scholes Option
Pricing Model using a volatility equal to the 100 day average historical price
volatility prior to the date of the public announcement of such Fundamental
Transaction.

     

    ARTICLE 4

    NONCIRCUMVENTION

     

    The
Company hereby covenants and agrees that the Company will not, by amendment of
its Certificate of Incorporation, Bylaws or through any reorganization, transfer
of assets, consolidation, merger, scheme of arrangement, dissolution, issue or
sale of securities, or any other voluntary action, avoid or seek to avoid the
observance or performance of any of the terms of this Warrant, and will at all
times in good faith carry out all the provisions of this Warrant and take all
action as may be required to protect the rights of the
Holder.  Without limiting the generality of the foregoing, the Company
(i) shall not increase the par value of any shares of Common Stock receivable
upon the exercise of this Warrant above the Exercise Price then in effect, (ii)
shall take all such actions as may be necessary or appropriate in order that the
Company may validly and legally issue fully paid and nonassessable shares of
Common Stock upon the exercise of this Warrant, and (iii) shall, so long as the
Warrant is outstanding, take all action necessary to reserve and keep available
out of its authorized and unissued shares of Common Stock, solely for the
purpose of effecting the exercise of the Warrant, 110% of the number of shares
of Common Stock as shall from time to time be necessary to effect the exercise
of the unexercised portion of the Warrant then outstanding (without regard to
any limitations on exercise).

     

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

     

    ARTICLE 5

    WARRANT
HOLDER NOT DEEMED A STOCKHOLDER

     

    Except as
otherwise specifically provided herein, the Holder, solely in such Person’s
capacity as a holder of this Warrant, shall not be entitled to vote or receive
dividends or be deemed the holder of share capital of the Company for any
purpose, nor shall anything contained in this Warrant be construed to confer
upon the Holder, solely in such Person’s capacity as the Holder of this Warrant,
any of the rights of a stockholder of the Company or any right to vote, give or
withhold consent to any corporate action (whether any reorganization, issue of
stock, reclassification of stock, consolidation, merger, conveyance or
otherwise), receive notice of meetings, receive dividends or subscription
rights, or otherwise, prior to the issuance to the Holder of the Warrant Shares
which such Person is then entitled to receive upon the due exercise of this
Warrant.  In addition, nothing contained in this Warrant shall be
construed as imposing any liabilities on the Holder to purchase any securities
(upon exercise of this Warrant or otherwise) or as a stockholder of the Company,
whether such liabilities are asserted by the Company or by creditors of the
Company.  Notwithstanding this ARTICLE 5, the Company shall provide
the Holder with copies of the same notices and other information given to the
stockholders of the Company generally, contemporaneously with the giving thereof
to the stockholders.

     

    ARTICLE 6

    REISSUANCE
OF WARRANTS; COMPANY CALL RIGHT

     

    6.1           Transfer of
Warrant.

     

     
a.           This Warrant
and the Warrant Shares constitute “restricted
securities” as such term is defined in Rule 144(a)(3) under the
Securities Act of 1933, as amended (the “Act”) and may only be
disposed of in compliance with U.S. federal securities laws and applicable state
securities or “blue sky” laws.  Without limiting the generality of the
foregoing, except in connection with a bona fide pledge or transfer to an
affiliate of Holder, (i) the Warrant and the Warrant Shares may not be offered
for sale, sold, transferred, assigned, pledged or otherwise distributed unless
(A) subsequently registered thereunder, (B) Investor shall have delivered to the
Company an opinion of counsel reasonably acceptable to the Company (which may be
Luce Forward Hamilton & Scripps LLP (“Luce Forward”)), in a
form generally acceptable to the Company, to the effect that the Warrant or the
Warrant Shares, as applicable, to be offered for sale, sold, transferred,
assigned, pledged or otherwise distributed may be offered for sale, sold,
transferred, assigned, pledged or otherwise distributed pursuant to an exemption
from such registration, or (C) the Warrant or the Warrant Shares, as applicable,
can be offered for sale, sold, transferred, assigned, pledged or otherwise
distributed pursuant to Rule 144 or Rule 144A promulgated under the Act, as
applicable.

     

     
b.           So long as
is required by this Section 6.1, the certificates or other instruments
representing the Warrant shall bear any legends as required by applicable state
securities or “blue sky” laws, in addition to the restrictive legend set forth
on the front page of this Warrant.  The parties acknowledge and agree
that the Warrant Shares will be issued without any restrictive
legends.

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

     

     
c.           If this
Warrant is to be transferred, in accordance with this Section 6.1, the Holder
shall surrender this Warrant to the Company, whereupon the Company will
forthwith issue and deliver upon the order of the Holder a new Warrant,
registered as the Holder may request, representing the right to purchase the
number of Warrant Shares being transferred by the Holder and, if less then the
total number of Warrant Shares then underlying this Warrant is being
transferred, a new Warrant to the Holder representing the right to purchase the
number of Warrant Shares not being transferred.

     

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

     

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

     

    6.4           Issuance of New
Warrants.  Whenever the Company is required to issue a new
Warrant pursuant to the terms of this Warrant, such new Warrant (i) shall be of
like tenor with this Warrant, (ii) shall represent, as indicated on the face of
such new Warrant, the right to purchase the Warrant Shares then underlying this
Warrant (or in the case of a new Warrant being issued pursuant to Section 6.1 or
Section 6.3, the Warrant Shares designated by the Holder which, when added to
the number of shares of Common Stock underlying the other new Warrants issued in
connection with such issuance, does not exceed the number of Warrant Shares then
underlying this Warrant), (iii) shall have an issuance date, as indicated on the
face of such new Warrant which is the same as the Issuance Date, and (iv) shall
have the same rights and conditions as this Warrant.

     

    6.5           Company Call Right.
If a Funding Default occurs and the Holder has not previously exercised this
Warrant in full, the Company shall have the right to demand the surrender of
this Warrant, or any remaining portion thereof, from the Holder without
compensation, and the Holder shall promptly surrender this Warrant, or remaining
portion thereof. Following such demand for surrender, this Warrant shall
automatically be canceled and shall have no further force or
effect.

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

     

    ARTICLE 7

    NOTICES

     

    Whenever
notice is required to be given under this Warrant, unless otherwise provided
herein, such notice shall be given in accordance with Section 6.2 of the
Purchase Agreement.  The Company shall provide the Holder with prompt
written notice of all actions taken pursuant to this Warrant, including in
reasonable detail a description of such action and the reason
therefore.  Without limiting the generality of the foregoing, the
Company will give written notice to the Holder (i) as soon as practicable upon
any adjustment of the Exercise Price, setting forth in reasonable detail, and
certifying, the calculation of such adjustment and (ii) at least fifteen days
prior to the date on which the Company closes its books or takes a record (A)
with respect to any dividend or distribution upon the shares of Common Stock,
(B) with respect to any grants, issuances or sales of any Options, Convertible
Securities or rights to purchase stock, warrants, securities or other property
to holders of shares of Common Stock as such or (C) for determining rights to
vote with respect to any Fundamental Transaction, dissolution or liquidation,
provided in each case that such information shall be made known to the public
prior to or in conjunction with such notice being provided to the
Holder.

     

    ARTICLE 8

    AMENDMENT
AND WAIVER

     

    Except as
otherwise provided herein, the provisions of this Warrant may be amended and the
Company may take any action herein prohibited, or omit to perform any act herein
required to be performed by it, only if the Company has obtained the written
consent of the Holder; provided that except as provided herein, no such action
may increase the exercise price of the Warrant or decrease the number of shares
or class of stock obtainable upon exercise of the Warrant without the written
consent of the Holder.  No such amendment shall be effective to the
extent that it applies to less than all of the holders of the Warrants then
outstanding

     

    ARTICLE 9

    GOVERNING
LAW

     

    This
Warrant shall be governed by and construed and enforced in accordance with, and
all questions concerning the construction, validity, interpretation and
performance of this Warrant shall be governed by, the internal laws of the State
of New York, without giving effect to any choice of law or conflict of law
provision or rule (whether of the State of New York or any other jurisdictions)
that would cause the application of the laws of any jurisdictions other than the
State of New York.

     

    ARTICLE 10

    CONSTRUCTION;
HEADINGS

     

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

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

     

    ARTICLE 11

    DISPUTE
RESOLUTION

     

    In the
case of a dispute as to the determination of the Exercise Price or the
arithmetic calculation of the Warrant Shares, the Company shall submit the
disputed determinations or arithmetic calculations via facsimile within 2
Trading Days of receipt of the Exercise Notice giving rise to such dispute, as
the case may be, to the Holder.  If the Holder and the Company are
unable to agree upon such determination or calculation of the Exercise Price or
the Warrant Shares within three Trading Days of such disputed determination or
arithmetic calculation being submitted to the Holder, then the Company shall,
within 2 Trading Days submit via facsimile (a) the disputed determination of the
Exercise Price or arithmetic calculation to an independent, reputable investment
bank or independent registered public accounting firm selected by Holder subject
to Company’s approval, which may not be unreasonably withheld or delayed, or (b)
the disputed arithmetic calculation of the Warrant Shares to the Company’s
independent registered public accounting firm.  The Company shall
cause at its expense the investment bank or the accountant, as the case may be,
to perform the determinations or calculations and notify the Company and the
Holder of the results no later than 3 Trading Days from the time it receives the
disputed determinations or calculations.  Such investment bank’s or
accountant’s determination or calculation, as the case may be, shall be binding
upon all parties absent demonstrable error.

     

    ARTICLE 12

    REMEDIES,
OTHER OBLIGATIONS, BREACHES AND INJUNCTIVE RELIEF

     

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

     

    ARTICLE 13

    DEFINITIONS

     

    For
purposes of this Warrant, the following terms shall have the following
meanings:

     

    13.1           “Bloomberg” means
Bloomberg Financial Markets.

     

    13.2           “Closing Bid Price”
and “Closing Sale
Price” means, for any security as of any date, the last closing bid price
and last closing trade price, respectively, for such security on the Trading
Market, as reported by Bloomberg, or, if the Trading Market begins to operate on
an extended hours basis and does not designate the closing bid price or the
closing trade price, as the case may be, then the last bid price or last trade
price, respectively, of such security prior to 4:00 p.m., Eastern time, as
reported by Bloomberg, or, if the Trading Market is not the principal securities
exchange or trading market for such security, the last closing bid price or last
trade price, respectively, of such security on the principal securities exchange
or trading market where such security is listed or traded as reported by
Bloomberg, or if the foregoing do not apply, the last closing bid price or last
trade price, respectively, of such security in the over-the-counter market on
the electronic bulletin board for such security as reported by Bloomberg, or, if
no closing bid price or last trade price, respectively, is reported for such
security by Bloomberg, the average of the bid prices, or the ask prices,
respectively, of any market makers for such security as reported in the “pink
sheets” by Pink Sheets LLC (formerly the National Quotation Bureau,
Inc.).  If the Closing Bid Price or the Closing Sale Price cannot be
calculated for a security on a particular date on any of the foregoing bases,
the Closing Bid Price or the Closing Sale Price, as the case may be, of such
security on such date shall be the fair market value as mutually determined by
the Company and the Holder.  If the Company and the Holder are unable
to agree upon the fair market value of such security, then such dispute shall be
resolved pursuant to ARTICLE 11.  All such determinations to be
appropriately adjusted for any stock dividend, stock split, stock combination or
other similar transaction during the applicable calculation
period.

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

     

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

     

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

     

    13.5           “Exercise Period”
means that period beginning on the Trading Day immediately following the
effective date of the Registration Statement (or, in the case of a cashless
exercise pursuant to Section 1.3 hereof, the first date on which Warrant Shares
are eligible for resale without limitation under Rule 144) and continuing until
the earlier of (i) 11:59 p.m., Eastern time, on the third (3rd)
anniversary of the effective date of the Registration Statement, or (ii) a
Funding Default; provided, however, that the
Exercise Period shall be suspended for any period during which either (A) the
effectiveness of the Registration Statement lapses for any reason (including,
without limitation, the issuance of a stop order by the SEC) or the Registration
Statement or prospectus included therein is otherwise unavailable for the resale
of Warrant Shares, or (B) Warrant Shares are not eligible for resale without
limitation under Rule 144 under the Securities Act (it being understood that the
Holder shall not be permitted to exercise all or any portion of this Warrant
during any such suspension period).

     

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

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

     

    13.7           “Funding Default”
means a failure by Investor to accept a Tranche Notice delivered by the Company,
provided such
Tranche Notice was delivered in accordance with the terms and conditions of the
Purchase Agreement (including the timely and full satisfaction of the conditions
to the obligation of Investor to accept a Tranche Notice set forth in Section 2.3(c) of the
Purchase Agreement), and to acquire and pay for the Preferred Shares in
accordance therewith upon delivery of such Preferred Shares to the Investor in
accordance with the terms of the Purchase Agreement (and the timely delivery by
the Company of the other Required Tranche Deliveries required to be delivered by
it and the timely and full satisfaction by the Company of all other conditions
for the Tranche Closing required to be satisfied by it as set forth in Sections 2.3(d) and
(e) of the Purchase Agreement).

     

    13.8           “Investor” means
Optimus Capital Partners, LLC, a Delaware limited liability company, dba Optimus
Life Sciences Capital Partners, LLC (including its designees, successors and
assigns).

     

    13.9           “Maximum Placement”
means $5,000,000.00.

     

    13.10        
“Options” means
any rights, warrants or options to subscribe for or purchase shares of Common
Stock or Convertible Securities.

     

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

     

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

     

    13.13         “Preferred Shares”
means shares of Series A Preferred Stock of the Company provided for in the
Certificate of Designations, to be issued to Investor pursuant to the Purchase
Agreement.

     

    13.14         “Purchase Agreement”
means the Preferred Stock Purchase Agreement dated September 24, 2009, by and
among the Company and the investors referred to therein.

     

    13.15         “Registration
Statement” means a registration statement registering for resale the
Warrant Shares, and except where the context otherwise requires, means the
registration statement, as amended, including (i) all documents filed as a part
thereof and (ii) any information contained in a prospectus filed with the
Securities and Exchange Commission in connection with such registration
statement, to the extent such information is deemed under the Act to be part of
the registration statement.

    
      
         

      

      
        13

        
          

        

      

      
         

      

    

     

    13.16         “Required Holders”
means the Holders of the Warrants representing at least a majority of shares of
Warrant Shares underlying the Warrants then outstanding.

     

    13.17         “Trading Market” means
the OTC Bulletin Board, the NASDAQ Capital Market, the NASDAQ Global Market, the
NASDAQ Global Select Market, the NYSE Amex, or the New York Stock Exchange,
whichever is at the time the principal trading exchange or market for the Common
Stock.

     

    13.18         “Public Successor
Entity” means a Successor Entity that is a publicly traded corporation
whose stock is quoted or listed for trading on a Trading Market.

     

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

     

    13.20         “Trading Day” means
any day on which the Common Stock is traded on a Trading Market; provided that
it shall not include any day on which the Common Stock (a) is suspended from
trading, or (b) is scheduled to trade on such exchange or market for less than 5
hours.

     

    13.21         “Tranche Closing” has
the meaning set forth in the Purchase Agreement.

    
      
         

      

      
        14

        
          

        

      

      
         

      

    

     

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

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            	ADVAXIS,
      INC.
	 	 
	
                                    By:

                                  	 
      
	
                                    Name:

                                  	 
      
	
                                    Title:

                                  	 
      
	 	 
	
                                    By:

                                  	 
      
	
                                    Name:

                                  	 
      
	
                                    Title:

                                  	 
      

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

    
      
         

      

      
        15

        
          

        

      

      
         

      

    

    

    SCHEDULE  1

     

    EXERCISE
PRICES AS ADJUSTED

     

    
      
        
          
            
              	
                      Exercise Price

                    	 	
                      Number of Warrant Shares at Exercise
      Price

                    
	 	 	 

            

          

        

      

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    APPENDIX
1

     

    EXERCISE
NOTICE

     

    ADVAXIS,
INC.

     

    The
undersigned hereby exercises the right to purchase ________________ shares of
Common Stock (“Warrant
Shares”) of Advaxis, Inc., a Delaware corporation (“Company”), evidenced
by the attached Warrant to Purchase Common Stock (“Warrant”).  Capitalized
terms used herein and not otherwise defined shall have the respective meanings
set forth in the Warrant.  The Holder intends that payment of the
Exercise Price shall be made as:

     

    ___           Cash
Exercise with respect to ____________ Warrant Shares having an exercise price of
$______ per share ___

     

    ___           Cashless
Exercise with respect to ____________ Warrant Shares having an exercise price of
$______ per share ___

     

    ___           Recourse
Note Exercise with respect to ____________ Warrant Shares having an exercise
price of $______ per share

     

    Please
issue:

     

    ___           A
certificate or certificates representing said shares of Common Stock in the name
specified below

     

    ___           Said
shares in electronic form to the Deposit/Withdrawal at Custodian (DWAC) account
with Depository Trust Company (DTC) specified below.

     

    
      
        
          
            
              
                
                  
                    	 
	 
      	 
      
	
                            By:

                          	 
      
	
                            Name:

                          	 
      
	
                            Title:

                          	 
      

                  

                

              

            

          

        

      

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    ACKNOWLEDGMENT

     

    The
Company hereby acknowledges the foregoing Exercise Notice and hereby directs
[_______________________________] to issue the above indicated number of shares
of Common Stock as specified above, in accordance with the Transfer Agent
Instructions dated [_______________________________] from the Company, and
acknowledged and agreed to by the transfer agent.

     

    
      
        
          
            
              
                	
                        ADVAXIS,
      INC.

                      
	 
      	 
      
	
                        By:

                      	 
      
	
                        Name:

                      	 
      
	
                        Title:

                      	 
      

              

            

          

        

      

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    APPENDIX
2

     

    FORM OF
NOTE

     

    SECURED
PROMISSORY NOTE

     

    
      	
              $[_____________]

            	 
      	
              Date:
      [________], 20[__]

            

    

     

    FOR VALUE
RECEIVED, [_____________] (“Borrower”) promises
to pay to the order of Advaxis, Inc. (“Lender”), at
[________], or at such other place as Lender may from time to time designate in
writing, the principal sum of $[________], with interest, as
follows:

     

    1.           Interest.  The
principal balance outstanding, from time to time, shall bear interest from and
after the date hereof at the rate of 2.0% per year.  Interest shall be
calculated on a simple interest basis and the number of days elapsed during the
period for which interest is being calculated.  Interest not paid when
due shall be added to the principal.

     

    2.           Payments.  If
not sooner paid, the entire unpaid principal balance, interest thereon and any
other charges due and payable under this Note shall be due and payable on the
fourth anniversary of the date of this Note (“Maturity Date”);
provided, however, that in no event shall this Note be due or payable at any
time that (a) Lender is in default of any preferred stock purchase agreement for
Series A Preferred Stock or any Warrant issued pursuant thereto, any loan
agreement or other material agreement, or (b) there are any shares of Series A
Preferred Stock of Lender issued or outstanding.  Borrower shall have
the right to prepay all or any part of the principal balance of this Note at any
time without penalty or premium.  In the event that Lender redeems all
or a portion of any shares of Series A Preferred Stock then held by Borrower,
Borrower shall apply, and Lender may offset, the proceeds of any such redemption
to pay down the accrued interest and outstanding principal of this
Note.  All payments shall be first be applied to interest, then to
reduce the outstanding principal.

     

    3.           Full Recourse
Note.  THIS IS A FULL RECOURSE PROMISSORY
NOTE.  Accordingly, notwithstanding that Borrower’s obligations under
this Note are secured by the Collateral, in the event of a material default
hereunder, Lender shall have full recourse to all the other assets of
Borrower.  Moreover, Lender shall not be required to proceed against
or exhaust any Collateral, or to pursue any Collateral in any particular order,
before Lender pursues any other remedies against Borrower or against any of
Borrower’s assets.

     

    4.           Security

     

    a.           Pledge.  As
security for the due and prompt payment and performance of all payment
obligations under this Note and any modifications, replacements and extensions
hereof (collectively, “Secured
Obligations”), Borrower hereby pledges and grants a security interest to
Lender in all of Borrower’s right, title, and interest in and to all of the
following, now owned or hereafter acquired or arising (together the “Collateral”):

     

    i.           Publicly
traded shares of common stock, preferred stock, bonds, notes and/or debentures
(collectively, “Pledged Securities”)
with a fair market value on the date hereof at least equal to the principal
amount of this Note, based upon the trading price of such securities on the Pink
Sheets, OTC Bulletin Board, NASDAQ Capital Market, NASDAQ Global Market, NASDAQ
Global Select Market, NYSE Amex, or New York Stock Exchange;

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    ii.           all
rights of Borrower with respect to or arising out of the Pledged Securities,
including voting rights, and all equity and debt securities and other property
distributed or distributable with respect thereto as a result of merger,
consolidation, dissolution, reorganization, recapitalization, stock split, stock
dividend, reclassification, exchange, redemption, or other change in capital
structure; and

     

    iii.           all
proceeds, replacements, substitutions, accessions and increases in any of the
Collateral.

     

    b.           Replacement
Securities.  So long as any Secured Obligations remain
outstanding, in the event that Borrower sells or disposes of any Pledged
Securities, Borrower shall promptly provide replacement securities of equal or
greater value.

     

    c.           Rights With Respect to
Distributions.  So long as no default shall have occurred and
be continuing under this Note, Borrower shall be entitled to receive any and all
dividends and distributions made with respect to the Pledged Securities and any
other Collateral.  However, upon the occurrence and during the
continuance of any default, Lender shall have the sole right (unless otherwise
agreed by Lender) to receive and retain dividends and distributions and apply
them to the outstanding balance of this Note or hold them as Collateral, at
Lender’s election.

     

    d.           Voting
Rights.  So long as no default shall have occurred and be
continuing under this Note, Borrower shall be entitled to exercise all voting
rights pertaining to the Pledged Securities and any other
Collateral.  However, upon the occurrence and during the continuance
of any default, all rights of Borrower to exercise the voting rights that
Borrower would otherwise be entitled to exercise with respect to the Collateral
shall cease and (unless otherwise agreed by Lender) all such rights shall
thereupon become vested in Lender, which shall thereupon have the sole right to
exercise such rights.

     

    e.           Financing Statement; Further
Assurances.  Borrower agrees, concurrently with executing this
Note, that Lender may file a UCC-1 financing statement relating to the
Collateral in favor of Lender, and any similar financing statements in any
jurisdiction in which Lender reasonably determines such filing to be
necessary.  Borrower further agrees that at any time and from time to
time Borrower shall promptly execute and deliver all further instruments and
documents that Lender may request in order to perfect and protect the security
interest granted hereby, or to enable Lender to exercise and enforce its rights
and remedies with respect to any Collateral, including, following an event of
default, delivering the Collateral to Lender to hold as secured
party.

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

     

    f.           Powers of
Lender.  Borrower hereby appoints Lender as Borrower’s true and
lawful attorney-in-fact to perform any and all of the following acts, which
power is coupled with an interest, is irrevocable until the Secured Obligations
are paid and performed in full, and may be exercised from time to time by Lender
in its discretion:  To take any action and to execute any instrument
which Lender may deem reasonably necessary or desirable to accomplish the
purposes of this Section 4(f) and,
more broadly, this Note including, without limitation:  (i) to
exercise voting and consent rights with respect to Collateral in accordance with
this Note, (ii) during the continuance of any default hereunder, to receive,
endorse and collect all instruments or other forms of payment made payable to
Borrower in respect of the Collateral or any part thereof and to give full
discharge for the same, (iii) to perform or cause the performance of any
obligation of Borrower hereunder in Borrower’s name or otherwise, (iv) during
the continuance of any default hereunder, to liquidate any Collateral pledged to
Lender hereunder and to apply proceeds thereof to the payment of the Secured
Obligations or to place such proceeds into a cash collateral account or to
transfer the Collateral into the name of Lender, all at Lender’s sole
discretion, (v)  to enter into any extension, reorganization or other
agreement relating to or affecting the Collateral, and, in connection therewith,
to deposit or surrender control of the Collateral, (vi) to accept other property
in exchange for the Collateral, (vii) to make any compromise or settlement
Lender deems desirable or proper, and (viii) to execute on Borrower’s behalf and
in Borrower’s name any documents required in order to give Lender a continuing
first lien upon the Collateral or any part thereof.

     

    5.           Additional
Terms

     

    a.           No
Waiver.  The acceptance by Lender of payment of a portion of
any installment when due or an entire installment but after it is due shall
neither cure nor excuse the default caused by the failure of Borrower timely to
pay the whole of such installment and shall not constitute a waiver of Lender’s
right to require full payment when due of any future or succeeding
installments.

     

    b.           Default.  Any
one or more of the following shall constitute a “default” under this
Note:  (i) a default in the payment when due of any amount hereunder,
(ii) Borrower’s refusal to perform any material term, provision or covenant
under this Note, (iii) the commencement of any liquidation, receivership,
bankruptcy, assignment for the benefit of creditors or other debtor-relief
proceeding by or against Borrower, or subject to Section 4(b), the Collateral is
transferred by Borrower without being replaced by Pledged Securities of equal or
greater fair market value on the date of transfer, and (iv) the levying of any
attachment, execution or other process against Borrower, or subject to Section
4(b) the Collateral or any material portion thereof.

     

    c.           Default
Rights

     

    i.           Upon
the occurrence of any payment default Lender may, at its election, declare the
entire balance of principal and interest under this Note immediately due and
payable.  A delay by Lender in exercising any right of acceleration
after a default shall not constitute a waiver of the default or the right of
acceleration or any other right or remedy for such default.  The
failure by Lender to exercise any right of acceleration as a result of a default
shall not constitute a waiver of the right of acceleration or any other right or
remedy with respect to any other default, whenever occurring.

     

    ii.           Further,
upon the occurrence of any material non-monetary default, following 30 days
notice from Lender to Borrower specifying the default and demanded manner of
cure for any non-monetary default, Lender shall thereupon and thereafter have
any and all of the rights and remedies to which a secured party is entitled
after a default under the applicable Uniform Commercial Code, as then in
effect.  In addition to its other rights and remedies, Borrower agrees
that, upon the occurrence of default, Lender may in its sole discretion do or
cause to be done any one or more of the following:

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

     

    d.           Proceed
to realize upon the Collateral or any portion thereof as provided by law, and
without liability for any diminution in price which may have occurred, sell the
Collateral or any part thereof, in such manner, whether at any public or private
sale, and whether in one lot as an entirety, or in separate portions, and for
such price and other terms and conditions as is commercially reasonable given
the nature of the Collateral.

     

    e.           If
notice to Borrower is required, give written notice to Borrower at least ten
days before the date of sale of the Collateral or any portion
thereof.

     

    f.           Transfer
all or any part of the Collateral into Lender’s name or in the name of its
nominee or nominees.

     

    g.           Vote
all or any part of the Collateral (whether or not transferred into the name of
Lender) and give all consents, waivers and ratifications in respect of the
Collateral and otherwise act with respect thereto, as though Lender were the
outright owner thereof.

     

    i.           Borrower
acknowledges that all or part of foreclosure of the Collateral may be restricted
by state or federal securities laws, Lender may be unable to effect a public
sale of all or part of the Collateral, that a public sale is or may be
impractical and inappropriate and that, in the event of such restrictions,
Lender thus may be compelled to resort to one or more private sales to a
restricted group of purchasers who will be obliged to agree, among other things,
to acquire the Collateral for their own account, for investment and not with a
view to its distribution or resale.  Borrower agrees that if
reasonably necessary Lender may resort to one or more sales to a single
purchaser or a restricted or limited group of purchasers.  Lender
shall not be obligated to make any sale or other disposition, unless the terms
thereof shall be satisfactory to it.

     

    ii.           If,
in the opinion of Lender based upon written advice of counsel, any consent,
approval or authorization of any federal, state or other governmental agency or
authority should be necessary to effectuate any sale or other disposition of any
Collateral, Borrower shall execute all such applications and other instruments
as may reasonably be required in connection with securing any such consent,
approval or authorization, and will otherwise use its commercially reasonable
best efforts to secure the same.

     

    iii.           The
rights, privileges, powers and remedies of Lender shall be cumulative, and no
single or partial exercise of any of them shall preclude the further or other
exercise of any of them.  Any waiver, permit, consent or approval of
any kind by Lender of any default hereunder, or any such waiver of any
provisions or conditions hereof, must be in writing and shall be effective only
to the extent set forth in writing.  Any proceeds of any disposition
of the Collateral, or any part thereof, may be applied by Lender to the payment
of expenses incurred by Lender in connection with the foregoing, and the balance
of such proceeds shall be applied by Lender toward the payment of the Secured
Obligations.

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

     

    h.           No Oral Waivers or
Modifications.  No provision of this Note may be waived or
modified orally, but only in a writing signed by Lender and
Borrower.

     

    i.           Attorney
Fees.  The prevailing party in any action by Lender to collect
any amounts due under this Note shall be entitled to recover its reasonable
attorneys fees and costs.

     

    j.           Governing
Law.  This Note has been executed and delivered in, and is to
be construed, enforced, and governed according to the internal laws of, the
State of New York without regard to its principles of conflict of
laws.

     

    k.           Severability.  Whenever
possible, each provision of this Note shall be interpreted in such manner as to
be effective and valid under applicable law.  However, if any
provision of this Note shall be held to be prohibited by or invalid under
applicable law, it shall be ineffective only to the extent of such prohibition
or invalidity without invalidating the remainder of that provision or the other
provisions of this Note.

     

    l.           Entire
Agreement.  This Note contain the entire understanding of the
parties with respect to the subject matter hereof and supersedes all prior
agreements and understandings, oral or written, with respect to such
matters.

     

    
      
        
          
            
              
                
                  	 
      
	
                          By:

                        	 
      
	
                          Name:

                        	 
      
	
                          Title:

                        	 
      

                

              

            

          

        

      

    

     

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    

    Exhibit
B

     

    Certificate
of Designations

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    Exhibit
C

     

    Transfer
Agent Instructions

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

     [___________],
2009

     

    _________________________

    _________________________

    _________________________

     

    Re:  Advaxis,
Inc Ladies and Gentlemen:

     

    In
accordance with the Preferred Stock Purchase Agreement (“Purchase Agreement”),
dated September 24, 2009, by and between Advaxis, Inc., a Delaware corporation
(“Company”),
and Optimus Life Sciences Capital Partners, LLC, a Delaware limited liability
company (“Buyer”), pursuant to
which the Company has issued and delivered a warrant (“Warrant”) to purchase
shares (“Warrant
Shares”) of the Company’s common stock, par value $0.001 per share
(“Common
Stock”), this shall serve as our irrevocable authorization and direction
to you (provided that you are the transfer agent of the Company at such time),
in the event the holder of the Warrant elects or has elected to exercise all or
any portion of the Warrant in accordance with the terms and conditions of the
Warrant, from time to time, upon surrender to you of a notice of exercise of the
Warrant, to issue the Warrant Shares. Capitalized terms used herein without
definition shall have the respective meanings ascribed to them in the Purchase
Agreement.

     

    Specifically,
this shall constitute an irrevocable instruction to you to process any notice of
exercise of the Warrant that has been properly made in accordance with the terms
and conditions of the Warrant and in accordance with the terms of these
instructions as soon as practicable.

     

    Upon your
receipt of a notice of exercise of the Warrant, provided that (i) you receive
written confirmation from the Company’s legal counsel that either (a) a
registration statement covering the resale of the Warrant Shares has been
declared effective by the Securities and Exchange Commission (“SEC”) under the
Securities Act of 1933, as amended (the “Act”), and that to
such counsel’s knowledge, no stop transfer order suspending its effectiveness
has been issued or that any proceedings therefor are pending before or
threatened by the SEC or (b) the Warrant Shares may be resold without
restriction under Rule 144 under the Act and (ii) you are
participating in The Depository Trust Company (DTC) Fast Automated Securities
Transfer (FAST) Program, then, you shall use your commercially reasonable
efforts to, on the same trading day of receipt thereof, credit the number of
shares of Common Stock for which the Warrant has been exercised to the balance
account with DTC’s FAST Program through its Deposit/Withdrawal at Custodian
(DWAC) system specified by the holder of the Warrant. The Company hereby
confirms that, provided a registration statement covering the resale of the
Warrant Shares has been declared effective by the SEC under the Act and remains
effective, the Warrant Shares should not be subject to any stop-transfer
restrictions and shall otherwise be freely transferable on the books and records
of the Company.

     

    If, upon
your receipt of a notice of exercise of the Warrant, either (i) you do not
receive written confirmation from the Company’s legal counsel referred to in the
immediately preceding sentence (or we otherwise notify you in writing that the
prospectus contained therein is not current or is otherwise not available for
use for the resale by the holder of the Warrant Shares) or (ii) you are not
participating in the DTC FAST Program, then, you shall use your commercially
reasonable efforts to issue on the same trading day of receipt thereof and
deliver to the holder of the Warrant or, at the instruction of the holder of the
Warrant, the Warrant holder’s agent or designee, in each case, by reputable
overnight courier to the address as specified in the applicable notice of
exercise, a certificate, registered in the Company’s share register in the name
of the Warrant holder or its designee (as indicated in the applicable notice of
exercise), for the number of shares of Common Stock for which the Warrant has
been exercised, which certificate (A) in the case of clause (ii) of this
paragraph, shall not be imprinted with any restrictive legends and no stop
transfer order shall be placed against the transfer thereof and (B) in the case
of clause (i) of this paragraph, shall be imprinted with the following
restrictive legend (in addition to any restrictive legend(s) required by
applicable state securities or “blue sky” laws), and a stop transfer order shall
be placed against transfer thereof:

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

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

     

    The
Company hereby confirms that no instructions other than as contemplated herein
will be given to you by the Company with respect to the Warrant Shares. The
Company hereby agrees that it shall not replace you as the Company’s transfer
agent, until such time as the Company provides written notice to you and Buyer
that a suitable replacement has agreed to serve as transfer agent and to be
bound by the terms and conditions of these Irrevocable Transfer Agent
Instructions.

     

    The
Company and you hereby acknowledge and confirm that complying with the terms of
this agreement does not and shall not prohibit you from satisfying any and all
fiduciary responsibilities and duties you may owe to the Company.

     

    The
Company and you acknowledge that the Buyer is relying on the representations and
covenants made by the Company and you hereunder and are a material inducement to
the Buyer to enter into the Purchase Agreement. The Company and you further
acknowledge that without such representations and covenants made hereunder, the
Buyer would not enter into the Purchase Agreement and purchase Securities
pursuant thereto.

     

    Each
party hereto specifically acknowledges and agrees that a breach or threatened
breach of any provision hereof will cause irreparable damage and that damages at
law would be an inadequate remedy if these Irrevocable Transfer Agent
Instructions were not specifically enforced.  Therefore, in the event
of a breach or threatened breach by a party hereto, including, without
limitation, the attempted termination of the agency relationship created by this
instrument, in addition to all other rights or remedies, an injunction
restraining such breach and granting specific performance of the provisions of
these Irrevocable Transfer Agent Instructions should issue without any
requirement to show any actual damage or to post any bond or other
security.

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

     

    IN
WITNESS WHEREOF, the parties have caused this letter agreement regarding
Irrevocable Transfer Agent Instructions to be duly executed and delivered as of
the date first written above.

     

    
      
        
          
            
              
                	
                        ADVAXIS,
      INC.

                      
	 
      	 
      
	
                        By:

                      	  
      
	
                        Name:

                      	  
      
	
                        Title:

                      	  
      

              

            

          

        

      

    

     

    THE
FOREGOING INSTRUCTIONS ARE ACKNOWLEDGED AND AGREED TO:

     

    
      
        
          
            
              
                
                  	 
      
	
                          By:

                        	 
      
	
                          Name:

                        	 
      
	
                          Title:

                        	 
      

                

              

            

          

        

      

    

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

     

    Exhibit
D

     

    Lock-Up
Agreement

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

                 
 [___________], 2009

     

    Optimus
Life Sciences Capital Partners, LLC

    11150
Santa Monica Boulevard, Suite 1500

    Los
Angeles, CA 90025

     

    Ladies
and Gentlemen:

     

    This
Lock-Up Agreement is being delivered to you in connection with the Preferred
Stock Purchase Agreement dated as of September 24, 2009 (“Purchase Agreement”)
and entered into by and among Advaxis, Inc., a Delaware  corporation
(the “Company”), and
Optimus Life Sciences Capital Partners, LLC, a Delaware limited liability
company (“Investor”), with
respect to the purchase without registration under the Securities Act of 1933,
as amended (the “Act”), in reliance on
Section 4(2) of the Act and Rule 506 of Regulation D promulgated thereunder, of
shares of the Company’s Series A Preferred Stock and related
Securities.  Capitalized terms used herein without definition shall
have the respective meanings ascribed to them in the Purchase
Agreement.

     

    In order
to induce Investor to enter into the Purchase Agreement, the undersigned agrees
that, for a period of ten Trading Days beginning on each date the Company
delivers a Tranche Notice to Investor (the “Tranche Notice Date”)
and ending on the Tranche Closing Date pursuant to the terms of the Purchase
Agreement (the “Lock-up Period”), the
undersigned will not, without the prior written consent of Investor, (a) sell,
offer to sell, contract or agree to sell, hypothecate, pledge, grant any option
to purchase or otherwise dispose of or agree to dispose of, directly or
indirectly, in respect of, or establish or increase a put equivalent position or
liquidate or decrease a call equivalent position within the meaning of Section
16 of the Securities Exchange Act of 1934, as amended, and the rules and
regulations of the SEC promulgated thereunder (the “Exchange Act”) with
respect to, any Common Stock or any securities convertible into or exercisable
or exchangeable for Common Stock, or warrants or other rights to purchase Common
Stock or any such securities, or any securities substantially similar to the
Common Stock, (b) enter into any swap or other arrangement that transfers to
another, in whole or in part, any of the economic consequences of ownership of
Common Stock or any securities convertible into or exercisable or exchangeable
for Common Stock or any such securities, or warrants or other rights to purchase
Common Stock, whether any such transaction is to be settled by delivery of
Common Stock or such other securities, in cash or otherwise or (c) publicly
announce an intention to effect any transaction specified in clause (a) or
(b).

     

    The
foregoing sentence shall not apply to (a) bona fide gifts, provided the
recipient thereof agrees in writing to be bound by the terms of this Lock-Up
Agreement, (b) dispositions to any trust for the direct or indirect benefit of
the undersigned and/or the immediate family of the undersigned, provided that
such trust agrees in writing to be bound by the terms of this Lock-Up Agreement,
(c) sales made pursuant to any written sales plans established prior to the date
of this Lock-Up Agreement in conformity with the requirements of Rule 10b5-1(c)
promulgated under the Exchange Act or (d) exercise of options for Common Stock
and the disposition (whether by sale, gift or otherwise) of Common Stock
underlying such options.  Notwithstanding subsection (a) above,
the undersigned may make a bona fide gift of up to 10,000 shares of Common Stock
to a charity or other non-profit entity and such charity or entity shall not be
required to be bound by the terms of this Lock-Up Agreement; provided, however,
that in the event the undersigned exercises options during the Lock-Up Period,
the undersigned may not, during the Lock-Up Period, dispose of the number of
shares of Common Stock underlying such exercised options equal to the number of
shares of Common Stock gifted by the undersigned pursuant to this sentence
during the Lock-Up Period.  For purposes of this paragraph, “immediate
family” shall mean the undersigned and the spouse, any lineal descendent,
father, mother, brother or sister of the undersigned.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    The
Company agrees to provide the undersigned with notice that the Company has
delivered a Tranche Notice to Investor prior to, or simultaneous with, its
delivery of the Tranche Notice to Investor.  Such notice shall provide
the undersigned with the Tranche Notice Date and clearly indicate the beginning
of the Lock-up Period.

     

    Upon the
termination of the Purchase Agreement, this Lock-Up Agreement shall be
terminated and the undersigned shall be released from its obligations
hereunder.

     

    
      
        
          
            	
                    Sincerely,

                  
	 
	 
      
	
                    Stockholder

                  

          

        

      

    

    Acknowledged
and Agreed:

     

    
      
        
          
            
              
                	
                        Advaxis,
      Inc.

                      
	 
      	 
      
	
                        By:

                      	   
      
	
                        Name:

                      	  
      
	
                        Title:

                      	  
      

              

            

          

        

      

    

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

     

    Exhibit
E

     

    Opinion

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Exhibit
F

     

    Tranche
Notice

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    Dated:
[________], 20[__]

     

    Optimus
Life Sciences Capital Partners, LLC

    11150
Santa Monica Boulevard, Suite 1500

    Los
Angeles, CA 90025

     

    Re:           Tranche
Notice Ladies & Gentlemen:

     

    Pursuant
to the September 24, 2009 Preferred Stock Purchase Agreement (“Agreement”) between
Advaxis, Inc., a Delaware corporation (“Company”), and
Optimus Life Sciences Capital Partners, LLC (“Investor”), Company
hereby elects to exercise a Tranche.  Capitalized terms not otherwise
defined herein shall have the meanings defined in the Agreement.

     

    At the
Tranche Closing, Company will sell to Investor [___________] Preferred Shares at
$10,000.00 per share for a Tranche Amount of $[___________].

     

    On behalf
of Company, the undersigned hereby certifies to Investor as
follows:

     

    1.           The
undersigned is a duly authorized officer of Company;

     

    2.           The
above Tranche Amount does not exceed the Maximum Tranche Amount;
and

     

    3.           All
of the conditions precedent to the right of the Company to deliver a Tranche
Notice set forth in Section 2.3(d) of the
Agreement have been satisfied.

     

    IN
WITNESS WHEREOF, the Company has executed and delivered this Tranche Notice as
of the date first written above.

     

    
      
        
          
            
              
                	
                        ADVAXIS,
      INC.

                      
	 
      	 
      
	
                        By:

                      	 
      
	
                        Name:

                      	 
      
	
                        Title:

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