Document:

Exhibit 10.39

FORM OF DISTRIBUTION AND MARKETING AGREEMENT

by and between

ALFACELL CORPORATION

and

USP PHARMA SPOLKA Z.O.O.

 

Effective as of July 25, 2007

	

	
DISTRIBUTION AND MARKETING AGREEMENT

                 This Distribution and Marketing Agreement (the “Agreement”) is effective as of July 25, 2007
(“Effective Date”) and is by and between Alfacell Corporation, a Delaware corporation with
principal offices at 300 Atrium Drive, Somerset, New Jersey 08873 (“Alfacell”) and USP
Pharma Spolka Z.O.O., a corporation formed under the laws of Poland with principal offices at c/o
US Pharmacia International, Inc., 966 Hungerford Drive, Suite 3B, Rockville, Maryland 20850 (“Distributor”).
Alfacell and Distributor are referred to herein each as a “Party” and collectively as the
“Parties”).

WITNESSETH :

                WHEREAS, Alfacell is developing ONCONASE® for oncological uses and

                WHEREAS, Alfacell desires to appoint Distributor as the exclusive distributor in the Territory of Product
for use in the Field and Distributor desires to accept such appointment, all on and subject to the
terms and conditions hereinafter set forth.

                NOW, THEREFORE, subject to the terms and conditions of this Agreement, and in consideration of the
covenants and agreements hereinafter set forth, as well as other good an valuable consideration,
the receipt and sufficiency of which is acknowledged by the Parties, the Parties agree as follows.

1.             DEFINITIONS

                “AAA” shall have the meaning set forth in Section 18(c).

                “Additional Purchase Order” shall have the meaning set forth in Section 3(g).

                “Affiliate” of an entity means, for so long as one of the following relationships is maintained,
any corporation or other business entity controlled by, controlling, or under common control with
another entity, with “control” meaning direct or indirect beneficial ownership of more
than fifty percent (50%) of the voting stock of such corporation, or more than fifty percent (50%)
interest in the decision-making authority of such other business entity, or a corporation in which
the maximum amount of stock permitted by law to be held by another entity is beneficially owned by
such other entity. 

                “Alfacell Indemnitees” shall have the meaning set forth in Section 9(b).

                “Annual Forecast” shall have the meaning set forth in Section 3(f).

                “Annual Minimum” shall have the meaning set forth in Section 3(c).

                “Applicable Law” shall mean all applicable laws, rules, regulations, guidelines and standards.

                “CPR” shall have the meaning set forth in Section 18(b).

                “Disclosing Party” shall have the meaning set forth in Section 16.

                “Dispute” shall mean dispute, controversy or claim between the Parties based on or arising
out of this Agreement, any obligation or warranty hereunder or the breach or alleged breach thereof.

                “Distribute” shall mean to promote, market, distribute and sell.

	

	
                “Distribution Commitment” shall have the meaning set forth in Section 2(b).

                “Distributor Indemnitees” shall have the meaning set forth in Section 9(a).

                “EMEA” shall mean the European Agency for the Evaluation of Medicinal Products.

                “Extended Term” shall have the meaning set forth in Section 13(a).

                “Field” shall mean human therapeutic uses in the field of oncology. 

                “Fiscal Quarter” shall mean the three (3) month period ending on January 31, April 30, July
31, or October 31 of each calendar year, as the context requires.

                “First Commercial Sale” shall mean the date of the first arm’s length transaction, transfer
or disposition for value to a Third Party of a Product by or on behalf of Distributor or any Affiliate
or permitted Sub-distributor in such country.

                “Indemnitee” shall mean a Distributor Indemnitee or an Alfacell Indemnitee.

                “Indemnitor” shall have the meaning set forth in Section 9(c).

                “Initial Indication” shall mean the treatment of Mesothelioma with Product.

                “Initial Term” shall have the meaning set forth in Section 13(a).

                “JCC” shall have the meaning set forth in Section 8(b).

                “Liaison” shall have the meaning set forth in Section 8(a).

                “Marketing Materials” shall mean, to the extent permitted by Applicable Law, all sales, education
and marketing materials including all patient and physician communications and materials, websites,
educational materials and presentations, and detailing products and premiums.

                “Net Sales” shall mean, on a country-by-country basis, the gross invoiced sales price
for all Product sold by Distributor, its Affiliates or permitted Sub-distributors to Third Parties
throughout the Territory during each Fiscal Quarter, less the following amounts incurred or paid
during such Fiscal Quarter with respect to sales of Product regardless of the Fiscal Quarter in which
such sales were made:

	 
	                           *          *           *           *           *           *           *           *           *           *
	 

	
  “Net Sales” shall not include sales or transfers between Distributor and its Affiliates or Sublicensees, unless Product is consumed by the Affiliate or Sublicensee.

                  “Notice of Breach” shall have the meaning set forth in Section 13(b)(i).

                  “Notice of Termination” shall have the meaning set forth in Section 13(b)(i).

                  “Patent Rights” shall mean the rights and interests in and to issued patents and pending patent applications (including inventor’s certificates and utility models) in any country or jurisdiction within the Territory, including all provisionals, substitutions, continuations, continuations-in-part, divisionals, supplementary protection certificates, renewals, all letters patent granted thereon, and all reissues, 

  

	

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reexaminations, extensions, confirmations, revalidations, registrations, patents of addition thereof,
PCTs and foreign counterparts, owned, controlled, partnered, or licensed by a Party.

                “Product” shall mean ONCONASE® (ranpirnase) for injection.

                “Product Cost” shall mean * * * * * * * * * *. 

                “Purchase Order” shall have the meaning set forth in Section 3(f).

                “Receiving Party” shall have the meaning set forth in Section 16.

                “Regulatory Approval” shall mean any and all approvals (including pricing and reimbursement
approvals), product and establishment licenses, registrations or authorizations of any kind necessary
for the development, pre-clinical and/or human clinical testing, manufacture, quality testing, supply,
use, storage, importation, export, transport, marketing and sale of a Product (or any component thereof)
for use in the Field in any country or other jurisdiction in the Territory. 

                “Remedial Action” shall have the meaning set forth in Section 7(b).

                “Specifications” shall mean the final commercial specifications for Product established by
Alfacell.

                “Sub-distributors” shall have the meaning set forth in Section 2(a).

                “Taxes” shall mean sales, use, import, export, excise, value added and similar taxes, and
customs duties and assessments, however designated, that are incurred or assessed in connection with
the purchase of Product under this Agreement, the sale or use of Product or transactions contemplated
under this Agreement, excluding (for the avoidance of doubt) income tax imposed on Alfacell.

                “Territory” shall mean the countries of Poland, Lithuania, Estonia, Latvia, Belarus and the
Ukraine.

                “Third-Party Claims and Expenses” shall mean claims, actions, causes of action, liabilities,
losses, costs and expenses (including reasonable attorneys’ fees) incurred thereby or caused
thereto arising out of third-party claims.

                “Transfer Price” shall have the meaning set forth in Section 3(b).

                “Up-front Fee” shall have the meaning set forth in Section 5(a).

                “Valid Claim” shall mean a claim in an issued, unexpired patent or in a pending patent application
among the Patent Rights covering Product that (a) has not been finally cancelled, withdrawn, abandoned
or rejected by any administrative agency or other body of competent jurisdiction, (b) has not been
revoked, held invalid, or declared unpatentable or unenforceable in a decision of a court or other
body of competent jurisdiction that is unappealable or unappealed within the time allowed for appeal,
(c) has not been rendered unenforceable through disclaimer or otherwise, and (d) is not lost through
an interference proceeding. 

	

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2.             APPOINTMENT; EXCLUSIVITY

                   (a)           Appointment of Distributor. Subject to the terms and conditions of this Agreement, Alfacell hereby appoints Distributor as the
exclusive (even as to Alfacell) distributor to Distribute Product for use in the Field in the Territory,
and Distributor hereby accepts such appointment and agrees to act as such exclusive distributor.
Distributor shall purchase its entire supply of Product exclusively from Alfacell. * * * * * *. 

	 

	                   (b)           Marketing and Distribution Commitment. Distributor’s right to sell Product exclusively in the Territory is subject to and conditioned upon Distributor’s commencing and continuing, at its sole expense, the Distribution of Product, beginning not less than* * * * prior to anticipated First Commercial Sale in the Territory. To that end, Distributor shall use its commercially reasonable and diligent efforts to do, among other activities, efforts and strategies it will take to
maximize sales in the Territory, the following to the extent permitted by Applicable Law:
  

                                      (i)            Distributor shall establish and maintain import, transport, warehousing, sales, and promotion capabilities, facilities, equipment, and personnel as reasonably required to fulfill its duties hereunder.

                                      (ii)           Distributor will identify and support leading medical institutions and thought leaders to assist in validation of Product and shall identify and, when appropriate, promote Product to the wider community in the Territory.

                                      (iii)          Distributor shall provide an importation, marketing, promotion, sales distribution organization, including facilities equipment and personnel, reasonably useful to sell Product in the Territory, and shall make systematic efforts to strengthen its sales coverage within the Territory. 

                                      (iv)          Distributor shall comply with all general sales policies and standard operating procedures established by Alfacell from time to time during the term of this Agreement, provided that Distributor shall not be required to contravene Applicable Law.

                                      (v)           Distributor shall regularly forward to Alfacell copies of all inquiries and correspondence from customers concerning Product. The date and time of any contact and site visits shall be reported to Alfacell on a quarterly basis.

                                      (vi)          Distributor shall provide sales training to Distributor sales personnel and develop direct marketing to and education for physicians and institutional and governmental representatives and decision makers. 

  * * * * * * * *.  Each of the foregoing obligations is the “Distribution Commitment” of Distributor. If Distributor fails to meet the Distribution Commitment in any country, Alfacell may elect, in its discretion, to either (A) continue to allow Distributor to Distribute Product in such country, but only on a non-exclusive basis or (B) terminate Distributor’s right to Distribute Product in the Territory. If Alfacell elects to act under either clause above, Distributor shall retain the non-exclusive right to Distribute Product in the territory subject to Alfacell’s right, at any time thereafter on no less than ninety (90) days’ written notice to Distributor, to terminate Distributor’s right to Distribute Product in the Territory. * * * * * * * * * * .

	 
	
                   (c)           Marketing and Distribution Plan. Distributor will develop and will provide to Alfacell on * * * * basis a Product marketing plan for each calendar year, which plan will contain information and projections agreed by the parties. Prior to its implementation, the plan will be subject to the prior

	

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approval of Alfacell, which shall not be unreasonably withheld, delayed, or conditioned. The Parties
shall discuss such plan, and Distributor’s performance against it, at meetings of the JCC.

	 

	                   (d)           Manner of Marketing and Distribution. Distributor will be solely responsible, at its sole expense, for, and shall have the sole right, after
  consideration of advice from the JCC, to make all decisions and determinations with respect to the
  manner in which it Distributes Product in the Field in the Territory, all subject to and in compliance
  with Applicable Law and the terms and conditions of this Agreement. In connection therewith, all
  Marketing Materials shall be in the Polish, English and other languages as are appropriate and necessary
  for marketing in the Territory. Distributor shall, at its own cost, provide drafts (with English
  language translations) of all Marketing Materials to Alfacell reasonably in advance for Alfacell’s review and approval, which approval will not be unreasonably withheld, delayed or conditioned but Distributor shall be responsible for all such materials. Distributor shall deliver copies of all final promotional and marketing materials used by Distributor to Alfacell. 

	 
	
                  (e)           Distributor’s Exclusivity Obligations. For * * * * after the Effective Date, neither Distributor nor its Affiliates or Sub-distributors shall sell any product in the Territory that competes with Alfacell’s Product. Thereafter, the foregoing prohibition shall continue to be in full force and effect after such period until the end of the Term.

	 

	                   (f)            Sales Outside the Field
  or Territory. To the extent permitted by Applicable Law, Distributor is prohibited from selling Product outside
  the Territory, * * * * * * *. This prohibition includes but is not limited to visiting, calling,
  mailing, or marketing Product to such customers. If Distributor or its Affiliates or Sub-distributors
  sell Product that is used outside of the Field or to customers outside of the Territory, * * * *
  * *, Distributor shall pay Alfacell, at Alfacell’s option, in addition to any other remedies available to Alfacell, for each Product thus sold, all Net Sales attributable to the sale of Product plus an additional amount equal to * * * * * of such Net Sales. In addition, Alfacell may terminate this Agreement on * * * * * * notice to Distributor if Distributor does not cease such sales and cause its Affiliates and Sub-distributors to cease such sales outside the Field or Territory within such * * * * * *.

	 

	                   (g)           Appointment of Sub-distributors. Distributor may, with the prior written consent of Alfacell (such consent shall not be unreasonably
  withheld for any potential Sub-distributor that is an Affiliate of Distributor), appoint Sub-distributors
  (which may be its Affiliates or non-Affiliates) to distribute, promote, market and sell Product for
  use in the Field in the Territory, subject to the following: (i) each agreement with a Sub-distributor
  shall state that the Sub-distributor’s rights under such agreement are subject to all relevant terms and conditions of this Agreement, including (without limitation) provisions and restrictions relating to Field, Territory, price, payment, reporting, audit of books and records, promotional materials, trade name, termination and conversion to non-exclusivity; (ii) if this Agreement terminates or becomes non-exclusive, in whole or in part, the rights of any Sub-distributors shall automatically be terminated or reduced to non-exclusive, as the case may be, in accordance therewith; (iii) Distributor shall promptly notify Alfacell of any breaches by any Sub-distributors and report to Alfacell full details of the breach; (iv) Distributor shall ensure that each Sub-distributor complies with all applicable terms and conditions of this Agreement and shall be liable to Alfacell for any failure of any Sub-distributor to do so; (v) Distributor shall
provide Alfacell with the names and primary business addresses of all Sub-distributors and, within fifteen (15) days of the effective date of each agreement with a Sub-distributor, Distributor shall provide a copy of each such agreement to Alfacell with an English language translation. Any act or omission of a Sub-distributor that would be a breach of this Agreement if performed by Distributor will be deemed to be a breach by Distributor of this Agreement.

	

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3.             PRODUCT

	 

	                   (a)           Development and Approval. Alfacell shall use its commercially reasonable efforts to obtain and maintain (and shall have the
  sole right and responsibility for obtaining and maintaining) all necessary Regulatory Approvals in
  the Territory for Product. All Regulatory Approvals shall be obtained and maintained in the name
  of Alfacell. Distributor shall, at its sole cost and expense, provide all cooperation reasonably
  requested by Alfacell in connection with its Product development and obtaining and maintaining of
  Product Regulatory Approval. Distributor shall not perform any Product development, including the
  conduct of preclinical, clinical, marketing, or post-marketing studies on Product absent the express
  prior written consent of Alfacell. Any permitted studies shall be conducted with the participation
  of and at the direction of Alfacell.

	 

	                  (b)           Supply. Distributor shall obtain Product only from Alfacell or its designated manufacturer. Alfacell shall
  supply to Distributor all of its Product requirements. As partial payment for Product, upon delivery
  of Product by Alfacell in accordance with Section 3(g) below, Distributor shall pay to Alfacell *
  * * * * * (the “Transfer Price”). The foregoing payment shall be in addition to any other payments hereunder, including those set forth in Section 5. * * * * * * * * *.

	 

	                   (c)           Annual Minimum. Not less than * * * * * after First Commercial Sale, the Parties shall agree on annual minimum Product
  sales for * * * * * * (the “Annual Minimum”). Each Party’s Liaison shall * * * * * * to the end of each calendar year, agree on any adjustments to the Annual Minimum for the following calendar year.

	 

	                  (d)           Commercial Pricing. Distributor shall have the right to set Product pricing for customers in its sole discretion.

	 

	                   (e)           Initial Product Delivery. Not less than * * * * * * prior to the anticipated date of First Commercial Sale * * * * * * *, the
  Parties agree to meet and determine the approximate date on which Product will be first be shipped
  to Distributor. In addition, the Parties shall agree upon an initial one (1)-year forecast of Distributor’s Product requirements. 

	 

	                   (f)            Product Forecasts and Purchase
  Orders. Not less than * * * * * prior to initial Product delivery and, thereafter, * * * * * * * prior to
  the first business day of every Fiscal Quarter, Distributor shall submit to Alfacell a rolling quarterly
  forecast * * * * * (“Annual Forecast”) detailing its Product requirements by Product accompanied by purchase orders for * * * * * * (each, a “Purchase Order”). * * * * * * * Distributor, and the Purchase Orders for the second Fiscal Quarter shall be firm, non-cancelable and binding on Distributor unless modified in writing by Distributor by written notice to Alfacell received by Alfacell at least * * * * * prior to the scheduled delivery date in such month, provided that the difference between the forecast Purchase Order and the modified Purchase Order for a given Fiscal Quarter shall * * * * * * of the forecast Purchase Order. From time-to-time, Distributor may place additional Purchase Orders for Product with Alfacell either by written purchase order or by electronic or other ordering processes established and mutually approved by Distributor and Alfacell (“Additional Purchase Orders”), and Alfacell will attempt to
fill Additional Purchase Orders, but shall not be in breach of this Agreement should it fail to do so. 

	 	 

	                   (g)           Delivery. Subject to the foregoing, Alfacell shall use commercially reasonable efforts to deliver Product in
  order to meet the quantity ordered and delivery dates specified in Distributor’s Purchase Orders. In Distributor’s name and at Distributor’s risk and expense, Alfacell will deliver Product in accordance with standard operating procedures established by Alfacell and approved by Distributor, such approval not to be unreasonably withheld, delayed or conditioned. Alfacell’s Transfer 

	

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Price to Distributor is EXW (Incoterms 2000) Alfacell’s place of manufacture. Title to all Product
shall remain in Alfacell until the Transfer Price for the relevant Product is received by Alfacell.
Risk of loss shall pass to Distributor upon delivery at Alfacell’s place of manufacture. Shipment
of Product to the Territory shall be the responsibility of Distributor. 

4.             PRODUCT LABELING, PRODUCT
LITERATURE

                The package label for Product manufactured by Alfacell and sold to Distributor pursuant to this Agreement
shall, to the extent permitted by Applicable Law, reflect Alfacell’s trademark and patent rights
or variations thereof acceptable to Alfacell. All other printed material related thereto shall be
agreeable to both Parties and acceptable under Applicable Law. Distributor shall promote and sell
Product throughout the Territory under Alfacell’s Product trade name ONCONASE®, or such
other trade name determined by Alfacell, which is and shall be owned and controlled by Alfacell,
or such other Product trade name as Alfacell shall designate. Alfacell shall also determine the trademark
to accompany the trade name it selects for the Product. The size of the trademarks for the Product
and all Product labeling shall be in a form acceptable to Alfacell and in compliance with all Applicable
Law, provided that, all packaging design, labels, trade names, trademarks and copyrights used for
the Product shall be owned by Alfacell. Distributor shall not alter or remove any trademarks, labels
or packaging applied to Product. Except only as permitted in connection with its promotion and sale
of Product as permitted in this Agreement, nothing contained in this Agreement shall grant to Distributor
any right, title or interest in Alfacell’s trademarks, trade names, copyrights or other intellectual
property rights. At no time during or after the term of this Agreement shall Distributor or its Affiliates
challenge or assist others to challenge Alfacell’s trademarks, trade names, copyrights or the
registration thereof, or use or register, or attempt to use or register, any trademarks or trade
names confusingly similar to those of Alfacell. In connection with its marketing efforts hereunder,
all representations of Alfacell’s trademarks that Distributor intends to use shall first be
submitted to Alfacell for approval of size, design, color, and other details, which shall not be
unreasonably withheld, or shall be exact copies of those used by Alfacell. If any of Alfacell’s
trademarks are to be used in conjunction with another trademark on or in relation to Product, then
Alfacell’s mark shall be presented of equal or greater size than the other with equal or greater
prominence than the other, but nevertheless separated from the other so that each appears to be a
mark in its own right, distinct from the other mark. 

5.             PAYMENT FROM DISTRIBUTOR

	 

	                   (a)           Up-front Fee. In partial consideration of the appointment of Distributor as exclusive distributor of Product as
  set forth herein, Distributor will pay to Alfacell an up-front fee (the “Up-front Fee”) of One Hundred Thousand Dollars ($100,000). 

	 

	                   (b)           Equity Investment. In partial consideration of the appointment of Distributor as exclusive distributor of Product as
  set forth herein, the Parties have entered into that certain Stock Purchase Agreement dated as of
  the date hereof.

	 

	                   (c)           Milestones. In partial consideration of the appointment of Distributor as exclusive distributor of Product as
  set forth herein, Distributor will pay to Alfacell the following milestone payments within ten (10)
  days after such milestone is met:

	

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	MILESTONE	PAYMENT	 
	
	 
	* * * * * * * * 	* * * * * *	 
	* * * * * * * * 	* * * * * *	 
	* * * * * * * * 	* * * * * *	 
	* * * * * * * * 	* * * * * *	 
	* * * * * * * * 	* * * * * *	 

	
	 

	                   (d)           Royalties. In partial consideration of the appointment of Distributor as exclusive distributor of Product as
  set forth herein, and subject to the other terms of this Agreement (including the remainder of this
  Section 5), commencing on the date of the First Commercial Sale of each Product in each country in the Territory and continuing for the Term, Distributor shall pay to Alfacell a royalty equal to * * * * * * of Net Sales of any Product sold by Distributor and/or its Affiliates and/or permitted Sub-distributors, provided that royalty payments for any given Fiscal Year plus the Transfer Price for Product sold to produce the underlying Net Sales shall not exceed a total of * * * * * * of the relevant Net Sales (the “Royalty Cap”). Reconciliation of the Royalty Cap shall be made on a fiscal year-basis as part of the calculation of royalties due for each fiscal year’s final Fiscal Quarter. 

	 

	                   (e)           Sales Reports. Within thirty (30) days after the end of each Fiscal Quarter, Distributor shall deliver a report to
  Alfacell that sets forth, on a country-by-country basis, the number of Products sold; sales price;
  the applicable royalty rate under this Agreement; the royalties payable in each country’s currency, including an accounting of deductions taken in the calculation of Net Sales; the applicable exchange rate to convert from each country’s currency to United States Dollars under this Section; the royalties payable in United States Dollars; and other significant sales metrics as reasonably requested by Alfacell. For purposes of determining when a sale of any Product occurs under this Agreement, the sale shall be deemed to occur on the earlier of (a) the date the Product is shipped or (b) on the date of the invoice to the purchaser of the Product. 

	 

	                   (f)            Timing of Payments. Distributor shall pay (i) the Up-front Fee on the Effective Date, (ii) the Transfer Price upon Product
  delivery, (iii) all royalty payments owed to Alfacell hereunder in arrears, within forty (40) days
  from the end of each Fiscal Quarter in which such payment accrues, and (iv) all milestone payments
  within ten (10) days of the achievement of such milestone. All payments to Alfacell are exclusive
  of Taxes. Distributor shall pay all Taxes.

	 

	                   (g)           Overdue Royalties. Subject to the other terms of this Agreement, any payments not paid within the time period set forth
  in this Section 5 shall bear interest at a rate of * * * * * * per month from the due date until
  paid in full, provided that in no event shall said annual rate exceed the maximum interest rate permitted
  by Applicable Law in regard to such payments. Such royalty payment when made shall be accompanied
  by all interest so accrued. Said interest and the payment and acceptance thereof shall not negate
  or waive the right of Alfacell to any other remedy, legal or equitable, to which it may be entitled
  because of the delinquency of the payment.

	 

	                   (h)           Accounting. All payments hereunder shall be made in the United States in United States dollars. Conversion of
  foreign currency to United States dollars shall be made at the conversion rate existing in the United
  States (as reported in The Wall Street Journal) on the last business day of the quarter immediately preceding the applicable Fiscal Quarter. If The Wall Street Journal ceases to be published, then the rate of exchange to be used shall be that reported in such other business publication of national circulation in the United States as the Parties reasonably agree. 

	

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	                (i)            Distributor’s Books
  and Records. Distributor shall maintain accurate and complete books and records for a period of at least six (6)
  years (or such longer period as may correspond to Distributor’s internal records retention policy) for each reporting period in which sales occur showing the sales, use and other disposition of Product by Distributor, its Affiliates and Sub-distributors in sufficient detail to enable the amounts payable to Alfacell hereunder to be accurately determined and otherwise to verify compliance by Distributor (and its Affiliates and Sub-distributors) with all obligations under this Agreement. Distributor shall permit its books and records to be audited, reviewed and copied (“examined” or “examination”) from time-to-time by authorized employees of, or attorneys and/or accountants selected by, Alfacell with at least ten (10) days advance written notice to Distributor, but not more frequently than once a year without cause. Such examination shall be during normal business hours and shall be made at the expense of the entity conducting
 it, except that if the results of the examination for any year reveal that Distributor has underpaid Alfacell by an amount exceeding five (5) percent, then Distributor shall pay the reasonable costs and expenses incurred by the examining entity and its representatives in conducting such examination. Distributor shall immediately pay to Alfacell any underpayment revealed by such examination and accrued interest thereon. 

	 
	

6.             INSPECTION OF DISTRIBUTOR
FACILITIES AND RECORDS

                Distributor agrees to permit representatives of any relevant regulatory or governmental authority to
access at any reasonable time during normal business hours relevant records, information (and where
applicable make copies of the same), personnel and facilities. Distributor shall immediately notify
Alfacell if any governmental or regulatory authority schedules, or without scheduling begins, an
inspection or audit. Distributor shall make every reasonable effort to permit Alfacell to be present
at or participate in such inspection or audit if the same relates directly or indirectly to this
Agreement. In addition, Distributor will immediately provide Alfacell copies of any correspondence
from or draft communications with (including any notes) government or regulatory authorities relating
directly or indirectly to this Agreement.

7.             COMPLAINTS, ADVERSE EVENT
REPORTING AND RECALLS

                                   (i)            Alfacell shall be responsible
for the prompt review, evaluation and documentation of all complaints relating to Product, with Distributor’s
reasonable cooperation. Distributor shall forward to Alfacell, within five (5) days—and within
24 hours with respect to reports of serious injury or serious adverse events—of initial receipt,
all complaints received concerning Product, including, without limitation, all reports of serious
injury, other adverse events, misuse, improper promotion or other problems. Distributor shall cooperate
with Alfacell’s investigation of complaints, including (as reasonably necessary) by providing
detailed distribution records to Alfacell and cooperating to notify affected customers. The Party
whose conduct or omission caused the complaint shall be responsible for resolving it, at its expense,
with the reasonable cooperation of the other Party. 

                                   (ii)           Alfacell and Distributor agree
that if either Party discovers or becomes aware of any fact, condition, circumstance or event (whether
actual or potential) concerning or related to Product that may reasonably require a report, a recall
or market withdrawal of Product in the Territory, such Party shall promptly communicate such fact,
condition, circumstance or event to the other Party within twenty-four (24) hours. In the event (i)
any governmental entity or regulatory body requests that Product be recalled or withdrawn, (ii) a
court of competent jurisdiction orders such a recall or withdrawal, or (iii) Alfacell determines
that the Product should be recalled or withdrawn from the market, the Parties shall take all appropriate
remedial actions with respect to such recall or withdrawal of Product (“Remedial Action”).
Alfacell shall be responsible for all reporting, vigilance reporting and recalls associated with 

	

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Product, and Alfacell shall be the primary contact person for any communications to any governmental
entity, regulatory body, the media and customers concerning the Remedial Action, with Distributor’s
reasonable cooperation (including providing detailed distribution records and information helpful
in the notification of customers). The Party whose breach of any of its representations, warranties
or covenants contained herein is primarily attributable as the cause or basis for such Remedial Action
shall be liable for, and shall reimburse the other Party for, all costs reasonably incurred as a
result of such action, including replacement cost of any Product affected thereby. Alfacell shall
notify Distributor within forty-eight (48) hours of undertaking a Remedial Action, and the reasons
therefor. The Parties shall cooperate fully with one another to obtain all information reasonably
required by regulatory or governmental authorities related to Product.

8.             LIAISONS AND JOINT STEERING
COMMITTEE

	 

	                   (a)           Liaisons. The Parties recognize that good communication between them is important to the success of this Agreement.
  To promote such communication, Alfacell and Distributor shall each appoint an individual who shall
  serve as that Party’s liaison (its “Liaison”) to the other Party to facilitate good day-to-day communication between the Parties. Each Party shall notify the other Party in writing of its designated Liaison, whom it may replace at any time in its discretion (with notice of such replacement to the other Party). As of the Effective Date, Alfacell’s Liaison shall be Andrew Aromando and Distributor’s Liaison shall be F. Patrick Ostronic.

	 

	                   (b)           Joint Commercialization Committee. Within six (6) months after the Effective Date, Alfacell and Distributor will form a joint commercialization committee (“JCC”) composed of * * * * * * from Distributor and * * * * * * from Alfacell to oversee commercialization activities under this Agreement, which shall not include duties that are exclusively Alfacell’s, such as manufacturing, Product development, clinical and post-Regulatory Approval studies, and seeking and maintaining Regulatory Approvals. The JCC shall make decisions in accordance with the terms of this Agreement.
The purpose of the JCC is to facilitate open communication, collaboration and cooperation between the Parties and to promote the prompt and reasonable resolution of issues or problems that may arise during the term of this Agreement. The JCC shall meet * * * * * * * (in person or by telephone) at such times and places as the Liaisons shall mutually determine. Each Party shall be responsible for all travel and related costs incurred by its representatives to attend meetings of, and otherwise participate on, the JCC. Each Party shall notify the other Party of its representatives on the JCC and shall be free to change its representatives at any time, in its discretion, on notice to the other Party. 
  

  9.             INDEMNIFICATION; INSURANCE

  
	 

	                   (a)           Indemnification by Alfacell. Alfacell shall indemnify, defend and hold harmless Distributor and its Affiliates, and their respective
  directors, officers, employees and agents (“Distributor Indemnitees”), harmless from and against any and all Third-Party Claims and Expenses to the extent that such Third-Party Claims and Expenses arise out of or result from: (i) any defect in Product at the time it was delivered to Distributor, where such defect constitutes a breach of Alfacell’s Product warranty set forth in Section 10(d); (ii) any material breach of this Agreement by Alfacell (including, without limitation,
material breach of any of its warranties hereunder); or (iii) the gross negligence or willful misconduct of Alfacell or an Alfacell Indemnitee, provided that Alfacell shall have no duty to indemnify, defend or hold harmless any Distributor Indemnitee to the extent Distributor, its Affiliates or Sub-distributors caused or contributed to Third-Party Claims and Expenses or to the extent Distributor is obligated to indemnify Alfacell under Section 9(b), and, provided further, that nothing in this Section 9(a) 

	

10

	
shall create or imply liability for Alfacell where such liability is expressly disclaimed or limited
under this Agreement. 

	 

	                   (b)           Indemnification by Distributor. Distributor shall indemnify, defend, and hold Alfacell and its Affiliates, and their respective directors,
  officers, employees and agents (“Alfacell Indemnitees”), harmless from and against any and all Third-Party Claims and Expenses to the extent that such Third-Party Claims and Expenses arise out of or result from: (i) any material breach of this Agreement by Distributor (including, without limitation, material breach of any of its warranties hereunder) or other act or omission of Distributor or Distributor Indemnitee, including any material breach by a Sub-distributor of any obligation of Distributor hereunder; (ii) any mishandling of Product after delivery by Alfacell, or any claims, whether written or oral, made or alleged to be made, by Distributor or a Distributor Indemnitee in advertising, publicity, promotion, sale or distribution of Product where such claims were for any use of Product other than the use permitted under Applicable Law and regulations or were not substantially the same as those claims for Product furnished by
Alfacell; (iii) the labeling of Product, including where such labeling was materially different than the labeling information furnished by Alfacell; or (iv) the negligence or willful misconduct of Distributor or a Distributor Indemnitee, provided that Distributor shall have no duty to indemnify, defend or hold harmless any Alfacell Indemnitee to the extent Alfacell is obligated to indemnify distributor under Section 9(a).

	 

	                   (c)           Indemnification Procedure and
  Resolution. Unless and to the extent otherwise specifically provided herein, an Indemnitee that intends to claim
  indemnification under Section 9(a) or (b) shall notify the other Party (the “Indemnitor”) promptly of any Third-Party Claims and Expenses in respect of which the Indemnitee intends to claim such indemnification, and the Indemnitor shall assume the defense thereof, at its expense, with counsel of its own choosing; provided that an Indemnitee shall also have the right to retain its own counsel at its sole expense, but if (i) the action threatens to restrain or adversely affect the conduct of the business of the Indemnitee or (ii) independent counsel to the Indemnitee concludes that there are defenses available to Indemnitee which are different from, or additional to, and may conflict with those available to the Indemnitor, the costs, expenses and attorneys’ fees incurred by the Indemnitee in retaining its own counsel shall be borne by the Indemnitor. An Indemnitee shall not be entitled to indemnification under this Section 9 if any
settlement or compromise of a third-party action is effected by the Indemnitee without the consent of the Indemnitor. An Indemnitor shall not (except with the Indemnitee’s prior written approval) enter into any settlement or compromise of any third-party action or consent to the entry of any judgment or other order with respect to any action that does not contain, as a part thereof, an unconditional release of the Indemnitee for liability for all losses, liabilities and expenses that may rise from such action, or that does contain any injunctive or any other non-monetary relief that might in any way interfere with the future conduct of business by the Indemnitee. The failure by the Indemnitee to deliver notice to the Indemnitor within a reasonable time after the commencement of any such third-party action of which it becomes aware shall relieve such Indemnitor of any liability to the Indemnitee under this Section 9 only if and to the extent that
 the Indemnitor was materially prejudiced thereby. An Indemnitee and its representatives shall cooperate fully with the Indemnitor and its legal representatives in the investigation of any action covered by this indemnification.

	 

	                   (d)           Insurance. As of the First Commercial Sale, each Party shall maintain with reputable insurers general liability
  insurance, including products liability coverage, in a minimum amounts commensurate with industry
  standards for products substantially similar to the Product and markets substantially similar to
  the Territory. At a minimum, the Parties shall maintain such insurance coverage required hereunder
  for the entire term of this Agreement and, if any such policy(ies) shall provide coverage on a claims
  made basis, the Parties shall be required to maintain a claims-made policy(ies) providing such coverage
  for an additional period of not less than five (5) years following the expiration or termination
  of this Agreement (to the extent such policies are reasonably available). Each policy required 

	

11

	
hereunder shall name the other Party as an additional insured with respect to this Agreement. Each
Party shall deliver to the other a certificate from the insurance carrier or broker evidencing such
coverage and the fact that the other Party is named as an additional insured and noting any exclusions
and agreeing to provide no less than five (5) days’ prior written notice to the other Party
in the event of a material change in coverage or policy cancellation.

10.          WARRANTIES OF ALFACELL

                Alfacell hereby warrants as follows:

	 

	                   (a)           Organization; Authority. Alfacell is a corporation duly organized and validly existing in good standing under the laws of Delaware.
  Alfacell has the power and authority, and has taken all corporate action necessary, to execute, deliver
  and perform this Agreement.

	 

	                   (b)           Binding Obligation. The execution and delivery of this Agreement by Alfacell does not, and the performance of its obligations
  hereunder will not, violate any provision of the articles of incorporation or by-laws of Alfacell
  or violate any provisions of, or result in a breach of any of the terms or provisions of or the acceleration
  of any of the obligations under, or constitute a default under, any mortgage, lease, agreement, instrument,
  order, arbitration award, judgment or decree to which Alfacell is a Party or to which Alfacell or
  its assets, properties or business are subject. This Agreement is a valid and binding agreement of
  Alfacell enforceable against it in accordance with its terms (subject to applicable bankruptcy laws).

	 

	                   (c)           No Other Agreement. Alfacell is not Party to any agreement with or obligation to any third-party or any other legally
  binding commitment of any kind or nature whatsoever that conflicts with the full right and authority
  of Alfacell to perform its covenants under this Agreement.

	 

	                   (d)           Product Warranty. At the time of shipment to Distributor, the Product hereunder will meet the Specifications. 

	 
	

                                   (i)            If Product is not returned
within thirty (30) days of delivery, Distributor may not return a Product to Alfacell for any reason
without Alfacell’s prior written consent; provided that (for the avoidance of doubt) this shall
not limit Alfacell’s indemnification obligations for Third-Party Claims and Expenses based on
a breach of the Product warranty as provided in Section 10(d). 

                                   (ii)           EXCEPT FOR, AND WITHOUT LIMITING,
ALFACELL’S INDEMNIFICATION OBLIGATIONS UNDER SECTION 9(a) WITH RESPECT TO THIRD-PARTY CLAIMS
AND EXPENSES ARISING OUT OF OR RESULTING FROM SUPPLIER’S BREACH OF THE PRODUCT WARRANTY IN SECTION
10(d), SUPPLIER’S EXCLUSIVE LIABILITY, AND THE EXCLUSIVE REMEDY OF DISTRIBUTOR, FOR SUPPLIER’S
SUPPLY OF DEFECTIVE PRODUCT SHALL BE REPLACEMENT OF SUCH PRODUCT OR CREDIT THEREFOR. The warranty
set forth in Section 10(d) is void if Product failure or deficiencies are (1) the result of occurrences,
mishandling or modification during or after shipment to Distributor or (2) caused by an act or omission
of Distributor, Affiliates, employees, agents or permitted Sub-distributors or any of their respective
employees or agents. 

	

12

	
11.          WARRANTIES OF DISTRIBUTOR

                Distributor hereby warrants as follows:

	 

	                   (a)           Organization. Distributor is a corporation duly organized and validly existing in good standing under the laws of
  the country of Poland. Distributor has the power and authority, and has taken all corporate action
  necessary, to execute, deliver and perform this Agreement.

	 

	                   (b)           Binding Obligation. The execution and delivery of this Agreement by Distributor does not, and the performance of its obligations
  hereunder will not, violate any provision of the certificate of incorporation or by-laws of Distributor
  or violate any provisions of, or result in a breach of any of the terms or provisions of or the acceleration
  of any of the obligations under, or constitute a default under, any mortgage, lease, agreement, instrument,
  order, arbitration award, judgment or decree to which Distributor is a Party or to which Distributor
  or its assets, properties or business are subject. This Agreement is a valid and binding agreement
  of Distributor enforceable against it in accordance with its terms (subject to applicable bankruptcy laws).

	 

	                   (c)           No Other Agreement. Distributor is not Party to any agreement with or obligation to any third-party or any other legally
  binding commitment of any kind or nature whatsoever that conflicts with the full right and authority
  of Distributor to perform its covenants under this Agreement. 

	 

	                   (d)           Compliance with Laws. Distributor shall comply with all Applicable Law applicable to its conduct and its respective obligations
  under this Agreement including, without limitation, those applicable to the handling, storage, shipment,
  export, import, rotation, segregation, promotion, pricing, sale and distribution of Product. In addition,
  Distributor agrees to comply with and not cause Alfacell to be in violation of the US Foreign Corrupt
  Practices Act, as amended. Distributor hereby certifies it does not and shall not employ, contract
  with or retain any person directly or indirectly to perform services under, related to, or in support
  of this Agreement if such person is debarred under 21 U.S.C. 335a (a) or (b) or otherwise debarred
  or disqualified by any regulatory or governmental authority from performing work related to this
  Agreement or the pharmaceutical industry under similar laws, rules, regulations or standards of any
  other relevant jurisdiction. Upon written request of Alfacell, Distributor shall, within ten (10)
  business days, provide written confirmation that it has complied with the foregoing obligation. Distributor
  agrees to promptly disclose in writing to Alfacell if any employee or agent is debarred or disqualified,
  or if any action or investigation is pending or, to the best of Distributor’s knowledge, threatened, relating to the debarment or disqualification of Distributor or any person performing services related to this Agreement.

	 

	                   (e)           Permits.  Distributor shall obtain and maintain all permits and approvals required for its sales and product distribution facilities and networks. 

	 
	

12.          NO OTHER WARRANTIES; LIMITATION OF LIABILITY

	 

	                   (a)           No Other Warranties. EXCEPT THE EXPRESS WARRANTIES SET FORTH IN THIS AGREEMENT, ALFACELL MAKES NO WARRANTIES, EXPRESS OR
  IMPLIED, EITHER IN FACT OR BY OPERATION OF LAW, BY STATUTE OR OTHERWISE, AND ALFACELL SPECIFICALLY
  DISCLAIMS ANY IMPLIED WARRANTY OF QUALITY, WARRANTY OF MERCHANTABILITY, WARRANTY OF FITNESS FOR A
  PARTICULAR PURPOSE OR WARRANTY OF NONINFRINGEMENT WITH RESPECT TO THE PRODUCT.

	

13

	                   (b)           Limitations of Liability.  EXCEPT FOR ITS INDEMNIFICATION OBLIGATIONS WITH RESPECT TO THIRD-PARTY CLAIMS AND EXPENSES UNDER SECTION
  9, IN NO EVENT SHALL ALFACELL BE LIABLE TO DISTRIBUTOR (UNDER ANY CONTRACT, STRICT LIABILITY, NEGLIGENCE
  OR OTHER LEGAL OR EQUITABLE THEORY) FOR ANY INDIRECT, SPECIAL, INCIDENTAL, CONSEQUENTIAL, PUNITIVE,
  OR EXEMPLARY DAMAGES OF ANY KIND, INCLUDING WITHOUT LIMITATION, LOST PROFITS, REVENUES, OR SALES,
  ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT, EVEN IF ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.

	 
	

13.          TERM AND TERMINATION

	 

	                   (a)           Term. Unless earlier terminated in accordance with the provisions of this Agreement, the initial term of
  this Agreement shall commence on the Effective Date and shall continue until the earlier of ten (10) years after First Commercial Sale or the expiration of all Valid Claims covering Product in the Territory (“Initial Term”). Upon the expiration of the Initial Term, this Agreement shall automatically renew for successive subsequent one (1) Year periods (each an “Extended Term” and together with the Initial Term, the “Term”) unless either Party has notified the other Party in writing at least ninety (90) days prior to the termination of the Initial Term or the then current Extended Term that this Agreement will be terminated effective at the conclusion of the Initial Term or the Extended Term, as the case may be.

	 

	                   (b)           Termination. Notwithstanding the foregoing, this Agreement may be terminated as follows.

	 
	

                                    (i)            This Agreement may be terminated
by a Party for material breach of this Agreement by the other Party, unless the breaching Party shall
have remedied such breach within ninety (90) days (thirty (30) days if the breach is a failure to
pay money) following its receipt of written notice from the other Party describing such breach in
detail, which notice shall include a statement of the intent to terminate this Agreement unless such
breach is remedied (“Notice of Breach”). In the event such breach is not remedied within
ninety (90) days (thirty (30) days if the breach is a failure to pay) from the breaching Party’s
receipt of the Notice of Breach, the non-breaching Party may terminate this Agreement within ninety
(90) days after the end of the initial cure period (or such longer time as the Parties may agree
in writing) by sending a notice of termination to the breaching Party (“Notice of Termination”).
This Agreement shall terminate thirty (30) days following the breaching Party’s receipt of such
Notice of Termination. For the sake of clarity, any breach of Section 2(e), 2(f) 3(a) or 7 shall
be deemed a material breach of this Agreement.

                                    (ii)           This Agreement may be terminated
by either Party by written notice to the other in the event that the other Party shall go into liquidation,
or seek the benefit of any bankruptcy or insolvency act, or a receiver or trustee is appointed for
its property or estate, or it makes an assignment for the benefit of creditors, whether any of the
aforesaid events be the outcome of the voluntary act of such Party or otherwise, and such procedures
are not terminated within ninety (90) days.

                                    (iii)          Alfacell may terminate this Agreement
as provided in Section 2(b).

                                    (iv)          Alfacell may immediately terminate
this Agreement in the event that Distributor challenges in any forum the validity, enforceability,
scope or any other elements of Patent Rights covering a Product.

                                    (v)           A Party may terminate this Agreement
as provided in Section 15.

	

14

	                 (c)           Termination Rights; Survival of
  Obligations. The termination of this Agreement for any reason shall be without prejudice to Alfacell’s right to receive all payments accrued and unpaid for Product delivered at or prior to the effective date of such termination and to the remedy of either Party hereto in respect of any previous breach of any of the covenants herein contained. The termination of this Agreement shall not release Alfacell from its obligation to deliver all Product ordered by Distributor prior to the notice of termination, unless the termination is based on Distributor’s breach of this Agreement or failure to meet the requirements of Section 2. Following termination or expiration of this Agreement, Distributor shall have the right to sell any Product remaining in its inventory, or which has been ordered prior to the notice of termination but not delivered, for a period of not more than six (6) months from the date of termination or expiration.
Distributor’s payment obligations hereunder and the provisions of Sections 2(e), 4, 5(e), 5(g), 5(h), 5(i), 6, 7, 9, 10(d)(ii), 12, 13(c), 14, and 16 - 26, shall survive termination or expiration of this Agreement, as shall such other provisions that, by their context, are logically intended to survive.

	 
	

14.           IP – OWNERSHIP; DEFENSE; INFRINGEMENT
BY THIRD PARTIES

                All intellectual property (including inventions, whether patentable or not, and know how) conceived
or developed by Distributor that relates to Product shall be the sole and exclusive property of Alfacell.
Distributor shall disclose to Alfacell all such intellectual property and, upon the request of Alfacell,
assign, and cause its employees and agents to assign, to Alfacell all rights in such intellectual
property. Distributor shall not file for any Patent Rights that might cover Product. Alfacell shall
have sole responsibility for the writing, filing, prosecution, maintenance and defense of all Patent
Rights covering Product. Distributor shall notify Alfacell in writing in the event it becomes aware
of any third-party infringement or threatened infringement of any patent or other intellectual property
right in or to the Product. Alfacell shall have the exclusive right, in its discretion, to control
any enforcement against such infringement or threatened infringement. Distributor shall fully cooperate
with and provide all assistance to Alfacell in connection with Alfacell’s fulfillment of its
obligations under this Section.

15.           DISABILITIES

                If either Party shall be delayed or hindered in or prevented from the performance of any act required
hereunder by reason of strike, lockouts, labor troubles, restrictive governmental or judicial orders
or decrees, riots, insurrection, war, acts of God, inclement weather or other reason or cause reasonably
beyond such Party’s control (each a “Disability”), then performance of such act shall
be excused for the period of such Disability. The Party incurring the Disability shall provide notice
to the other of the commencement and termination of the Disability. Should a Disability continue
for more than three (3) months, the Party unaffected by the Disability may terminate this Agreement
upon prior written notice to the affected Party. Should the Disability equally affect the performance
of both Parties, then such termination shall only be by mutual written agreement.

16.           CONFIDENTIALITY

                Each Party (the “Receiving Party”) acknowledges that all scientific, technical, financial
and commercial information (written, oral, tangible or observed) previously disclosed by or obtained
(prior to the Effective Date) from the other Party (the “Disclosing Party”) or hereafter
possessed or obtained by the Receiving Party concerning the business, manufacturing, products or
plans of the Disclosing Party, including, but not limited to, information relating to the Disclosing
Party’s research, development, manufacturing or marketing methods, plans, issues and difficulties,
financial plans and records, 

	

15

	
intellectual property protection, and arrangements or negotiations with suppliers to or customers of,
or others having significant dealings with, the Disclosing Party, shall be deemed to be the Disclosing
Party’s confidential information (“Confidential Information”) and shall be maintained
by the Receiving Party, its Affiliates and Sub-distributors, and their respective employees, agents
and directors, in confidence at all times during the term of this Agreement, and for a period of
five (5) years after this Agreement has expired or been terminated for any reason, except as otherwise
permitted in writing by the Disclosing Party. Without limiting the foregoing, each of the Parties
further agrees to use the same degree of care concerning the other Party’s Confidential Information
as it uses to protect its own confidential and proprietary technical information to prevent the unauthorized
disclosure to any third party of such Confidential Information and to not use the other Party’s
Confidential Information for any purpose except for those purposes contemplated by this Agreement..
Any information owned by Alfacell pursuant to Section 14 shall be the Confidential Information of Alfacell.

                The obligations hereunder shall not apply to Confidential Information:

                (A)          which the Receiving Party can demonstrate
by written records was known to it prior to the date of disclosure by the Disclosing Party; provided
that such information was not obtained by the Receiving Party through wrongful disclosure by a third
party receiving such information in confidence from the Disclosing Party;

                (B)           which is now in the public knowledge,
or becomes public knowledge in the future other than by breach of this Agreement by the Receiving
Party;

                (C)           which, as can be established by
written records, is independently developed by the receiving Party without benefit of Confidential
Information received from the Disclosing Party;

                (D)          which is disclosed to the Receiving
Party, after the date of disclosure by the Disclosing Party, by a third party having a right to make
such disclosure; or

                (E)           which is required to be disclosed
by Applicable Law or proper legal, governmental or other competent authority, or the rules of any
securities exchange on which any security issued by either Party is traded, or included in any filing
or action taken by the receiving party to obtain or maintain government clearance or approval to
market Product; provided, however, that when permitted by the provisions of Applicable Law, the Receiving
Party shall use its reasonable best efforts to protect the confidentiality of such Confidential Information
submitted to governmental agencies or authorities pursuant to this Agreement, and; provided, however,
further, that, with regard to a court order or similar process, the Party whose information is to
be disclosed shall be notified sufficiently in advance of such requirement so that it may seek a
protective order (or equivalent) with respect to such disclosure, which the other Party shall fully
comply with; and, provided, however, further, that in the case of a disclosure required to comply
with the rules of any securities exchange, the Party required or intending to disclose the other
Party’s Confidential Information will provide the other Party with a reasonable opportunity
to review such disclosure prior to its public release or filing with a regulatory authority and will
consider in good faith reasonable changes to such disclosure requested by the other party.

17.          NOTICES

               All notices, consents and approvals hereunder shall be in writing and shall be deemed to have been
properly given and to be effective on the date of delivery if delivered in person, by international
courier service or by facsimile transmission (provided a faxed copy is also sent by international
courier service, provided that notices of breach or notices of termination of this Agreement shall
not be sent by 

	

16

	
facsimile transmission) to the respective address or facsimile number provided below or to such other
address or facsimile number as a Party shall designate by written notice to the other in such manner:

		 

		If to Distributor:	USP Pharma Spolka Z.O.O.

  c/o US Pharmacia International, Inc.
966 Hungerford Drive, Suite 3B
Rockville, Maryland 20850 
Attention: Patrick Ostronic
Facsimile: (301)279-0002
			 
		with a copy to:	Arnold & Porter LLP

    555 Twelfth Street, NW

    Washington, D.C. 20004-1206 

    Attention Joseph Howe 

    Facsimile:  (202) 942-5999
			 
		If to Alfacell:  	Alfacell Corporation

    300 Atrium Drive

    Somerset, New Jersey 08873 

Attention: Andrew Aromando

Facsimile: (732) 652-4582  
			 
		With a copy to:	Heller Ehrman LLP

    Times Square Tower

    7 Times Square

    New York, New York 10036

    Attention:  Kevin T. Collins 

    Facsimile:  (212) 763-7600

	 
	
18.          DISPUTE RESOLUTION

                                (i)            In the event of any Dispute,
a Party shall give detailed written notice of such Dispute to the other Party. The Parties shall
attempt in good faith to resolve such Dispute in a voluntary, amicable and expeditious manner through
mediation pursuant to Section 18(b).

                                (ii)           The Parties shall endeavor to
resolve any dispute arising out of or relating to this Agreement by mediation in New York, New York
under the International Institute for Conflict Prevention and Resolution (“CPR”) Mediation
Procedure then currently in effect. Unless the Parties agree otherwise, the mediator will be selected
from the JAMS panel of neutrals. If the dispute is not resolved within thirty (30) days of a Party’s
written request for mediation, there is no further obligation to mediate.

                                (iii)          If the Parties are unable to resolve
any Dispute through mediation as required by Section 18(ii), the Dispute shall be resolved by binding
arbitration in accordance with the rules of the American Arbitration Association (“AAA”).
The arbitration proceeding shall be commenced and conducted and completed in New York, New York.
The Dispute shall be resolved by one (1) neutral arbitrator, to be mutually agreed upon by the Parties
within forty-five (45) days following the receiving Party’s receipt of the written notice from
the other Party requesting arbitration. In the event the Parties do not reach agreement on a single
arbitrator within such 45-day period (such period being subject to extension by the Parties’
mutual agreement), then the arbitration shall be conducted by three (3) neutral 

	

17

	
arbitrators.  In such event, each Party shall select one neutral arbitrator within thirty (30)
days following the end of such 45-day period and notify the other Party of such selection, and those
two arbitrators shall select the third neutral arbitrator within thirty (30) days thereafter. If
they are unable to reach agreement on the third arbitrator within such 30-day period, the director
of the AAA office in the city closest to where the arbitration is conducted shall select the third
arbitrator, who shall be neutral, in accordance with AAA rules and policies. All proceedings hereunder,
and all communications, filings, hearing and decisions in connection therewith, shall be in the English
language. The procedures to be followed within the arbitration, including the rules of evidence that
are to apply, shall be in accordance with the AAA rules and, to the extent not governed by such rules,
shall be within the sound discretion of the arbitrator(s). The arbitrator(s) are and shall be specifically
requested to conduct the arbitration proceedings to promote the efficient, cost-effective and prompt
resolution of the Dispute. Except as the arbitrator(s) may elect to award otherwise, each Party shall
bear its own costs and expenses, including its attorneys fees, consultant fees and witness fees,
incurred in connection with such arbitration proceedings, and, during the proceedings, each Party
shall pay on, an ongoing basis, fifty percent (50%) of the costs, fees and expenses of the arbitrator(s)
and of the AAA billed in connection with such proceedings. The final arbitration decision and award
shall be binding on the Parties, shall not be appealable, may be entered as a final judgment in any
court of competent jurisdiction, and shall be enforceable in any court of competent jurisdiction
in any country. The arbitrator(s) shall have the authority to award both monetary damages and equitable
relief (including injunctive relief), subject to the limitations of liability set forth in this Agreement
and the other terms and conditions of this Agreement. As part of the final award, the arbitrator(s)
shall require the Party deemed by the arbitrator(s) to be the losing Party in the arbitration to: (i)
reimburse the winning Party for all costs, fees and expenses of the arbitrator(s) and AAA paid by
the winning Party, (ii) pay one hundred percent (100%) of any remaining costs, fees and expenses
of the arbitrator(s) and AAA, and (iii) pay all reasonable attorneys’ fees and costs incurred
by the winning Party after the date of the final arbitration decision and awards in connection with enforcing such decision and award.

                                (iv)          Despite the foregoing, nothing in this
Section 18 shall prevent either Party from seeking temporary equitable relief (including injunctive
relief) from any court of competent jurisdiction, pending selection of the arbitrator(s) and the
arbitrator(s)’ commencement of proceedings, when such interim relief is appropriate to preserve
a Party’s rights under this Agreement pending arbitration (e.g., the enforcement of the confidentiality
provisions of this Agreement). The arbitrator(s) shall be authorized, in their discretion, to continue,
terminate or modify any such interim relief upon commencing the arbitration proceedings.

19.           ENTIRE AGREEMENT; AMENDMENTS

                This Agreement, constitutes the entire agreement between the Parties and supersedes all prior agreements,
understandings, representations, and statements, if any, regarding the subject matter hereof, whether
oral or written. No amendment or modification of this Agreement shall be valid and binding upon the
Parties unless made in writing and signed on behalf of each of such Parties by their respective authorized
officers.

20.           GOVERNING LAW

                This Agreement shall be construed and interpreted in accordance with the laws of New York, without
giving effect to the choice-of-law provisions thereof. The Parties hereby expressly agree that the
United Nations Convention on Contracts for the International Sale of Goods shall not apply.

	

18

	
21.           SEVERABILITY OF PROVISIONS

                If any provision of this Agreement shall be held to be illegal, invalid or unenforceable by a court,
arbitrator or other authority of competent jurisdiction, the Parties shall endeavor to replace it
with another provision that will as closely as possible reflect their original intention. The validity,
legality and enforceability of the remaining provisions shall not in any way be affected or impaired
thereby.

22.           WAIVER OF DEFAULT

                Failure of either Party at any time to require performance of any provision of this Agreement shall
not affect the right to require full performance thereof at any time thereafter. The waiver of any
default under this Agreement by either Party shall not constitute a waiver of any of its rights for
any subsequent default.

23.           ASSIGNMENT

                This Agreement shall be binding upon and inure to the benefit of the Parties hereto and their respective
successors and assigns. Except as provided below, neither Party may assign this Agreement (by operation
or law or otherwise) without the prior written consent of the other Party. Despite the foregoing,
Alfacell shall have the right, with written notice to Distributor, to assign this Agreement to any
Affiliate without Distributor’s consent. Furthermore, Distributor’s consent shall not be
required in connection with the transfer (including by assignment) of Alfacell’s rights or obligations
under this Agreement incident to a merger, consolidation, reorganization or acquisition of substantially
all the assets relating to this Agreement of, or a controlling interest in, Alfacell.

24.           INDEPENDENT CONTRACTOR

                Each Party hereto shall be and remain an independent contractor, and nothing herein shall be deemed
to constitute the Parties as partners or joint venturers. Further, neither Party shall have any authority
to act, or attempt to act, or represent itself, directly or by implication, as an agent of the other
or in any manner assume or create, or attempt to assume or create, any obligation on behalf of or
in the name of the other, nor shall either be deemed the agent of the other.

25.           PRESS RELEASES

                No public announcement or press release with respect to the subject matter of this Agreement shall
be made or issued, directly or indirectly, by Distributor without first obtaining the prior
written approval of Alfacell. Alfacell shall be permitted to make public announcements or press
releases detailing the terms of this Agreement as required by Applicable Law or deemed
otherwise advisable by Alfacell, provided that a copy of all such releases shall be provided
to Distributor. Distributor acknowledges that Alfacell may be obligated to file a copy of this Agreement
with the United States Securities and Exchange Commission. Neither Party shall use the other’s
name in any sales promotion, advertising or other form of publicity without the prior approval of
such Party, except as specifically permitted in this Agreement. 

	

19

	
26.          COUNTERPARTS

                This Agreement may be executed in counterparts with the same effect as if both Parties had signed the
same document. All such counterparts shall be deemed an original, shall be construed together, and
shall constitute one and the same instrument.

[Remainder of page is intentionally left blank]

	

20

	
                IN WITNESS WHEREOF, the Parties have executed this Agreement as of the day and year first above written.

	 

	 	ALFACELL CORPORATION
		 
		 
	 	By:	___________________________________
		 	Name: ____________________________________ 
		 	Title: _____________________________________ 
		 	Date: _____________________________________ 
		 
	 	USP PHARMA SPOLKA Z.O.O.
	 	 	 
	 	 	 
	 	By:	___________________________________
		 	Name: ____________________________________ 
		 	Title: _____________________________________ 
		 	Date: _____________________________________ 
		 

	

        21

        

    

	TABLE OF CONTENTS

	 	 	 
	 	 	Page
	 	 	 
	1.	DEFINITIONS	1
	2.	APPOINTMENT; EXCLUSIVITY	4
	 	(a)	Appointment of Distributor	4
	 	(b)	Marketing and Distribution Commitment	4
	 	(c)	Marketing and Distribution Plan	4
	 	(d)	Manner of Marketing and Distribution	5
	 	(e)	Distributor’s Exclusivity Obligations	5
	 	(f)	Sales Outside the Field or Territory	5
	 	(g)	Appointment of Sub-distributors	5
	3.	PRODUCT	6
	 	(a)	Development and Approval	6
	 	(b)	Supply	6
	 	(c)	Annual Minimum	6
	 	(d)	Commercial Pricing	6
	 	(e)	Initial Product Delivery	6
	 	(f)	Product Forecasts and Purchase Orders	6
	 	(g)	Delivery	6
	4.	PRODUCT LABELING, PRODUCT LITERATURE	7
	5.	PAYMENT FROM DISTRIBUTOR	7
	 	(a)	Up-front Fee	7
	 	(b)	Equity Investment	7
	 	(c)	Milestones	7
	 	(d)	Royalties	8
	 	(e)	Sales Reports	8
	 	(f)	Timing of Payments	8
	 	(g)	Overdue Royalties	8
	 	(h)	Accounting	8
	 	(i)	Distributor’s Books and Records	9
	6.	INSPECTION OF DISTRIBUTOR FACILITIES AND RECORDS	9
	7.	COMPLAINTS, ADVERSE EVENT REPORTING AND RECALLS	9

	

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	8.	LIAISONS AND JOINT STEERING COMMITTEE	10
	 	(a)	Liaisons	10
	 	(b)	Joint Commercialization Committee	10
	9.	INDEMNIFICATION; INSURANCE	10
	 	(a)	Indemnification by Alfacell	10
	 	(b)	Indemnification by Distributor	11
	 	(c)	Indemnification Procedure and Resolution	11
	 	(d)	Insurance	11
	10.	WARRANTIES OF ALFACELL	12
	 	(a)	Organization; Authority	12
	 	(b)	Binding Obligation	12
	 	(c)	No Other Agreement	12
	 	(d)	Product Warranty	12
	11.	WARRANTIES OF DISTRIBUTOR	13
	 	(a)	Organization	13
	 	(b)	Binding Obligation	13
	 	(c)	No Other Agreement	13
	 	(d)	Compliance with Laws	13
	 	(e)	Permits	13
	12.	NO OTHER WARRANTIES; LIMITATION OF LIABILITY	13
	 	(a)	No Other Warranties	13
	 	(b)	Limitations of Liability	14
	13.	TERM AND TERMINATION	14
	 	(a)	Term	14
	 	(b)	Termination	14
	 	(c)	Termination Rights; Survival of Obligations	15
	14.	IP – OWNERSHIP; DEFENSE; INFRINGEMENT BY THIRD PARTIES	15
	15.	DISABILITIES	15
	16.	CONFIDENTIALITY	15
	17.	NOTICES	16
	18.	DISPUTE RESOLUTION	17
	19.	ENTIRE AGREEMENT; AMENDMENTS	18
	20.	GOVERNING LAW	18
	21.	SEVERABILITY OF PROVISIONS	19
	22.	WAIVER OF DEFAULT	19

	

        23

        

    

	23.	ASSIGNMENT	19
	24.	INDEPENDENT CONTRACTOR	19
	25.	PRESS RELEASES	19
	26.	COUNTERPARTS	20

	

        24Exhibit 10.40
	 
	
FORM OF SECURITIES PURCHASE AGREEMENT

                This Securities Purchase Agreement (this “Agreement”) is dated as of July 25, 2007, between Alfacell Corporation, a Delaware corporation (the “Company”), and Unilab LP, a limited partnership organized under the laws of Maryland (the “Purchaser”).

                WHEREAS, subject to the terms and conditions set forth in this Agreement and pursuant to Section 4(2)
of the Securities Act (as defined below) and Rule 506 promulgated thereunder, the Company desires
to issue and sell to the Purchaser, and the Purchaser desires to purchase from the Company shares
of common stock of the Company, as more fully described in this Agreement.

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

ARTICLE I.
DEFINITIONS

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

                                “Action” means any action, suit, inquiry, notice of violation, proceeding (including any partial proceeding
such as a deposition) or investigation pending or threatened in writing against or affecting the
Company or any of its properties before or by any court, arbitrator, governmental or administrative
agency, regulatory authority (federal, state, county, local or foreign), stock market, stock exchange
or trading facility.

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

                                “Business Day” means any day except Saturday, Sunday and any day which shall be a federal legal holiday or
a day on which banking institutions in the State of New York are authorized or required by law or
other governmental action to close.

                                “Closing” means the closing of the purchase and sale of the Shares pursuant to Section 2.

                                “Closing Date” means July 25, 2007.

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

                                “Common Stock” means the common stock of the Company, $.001 par value per share. 

                                “Distribution Agreement” means the Distribution and Marketing Agreement of even date herewith between the Company and
the Purchaser’s affiliate, USP Pharma Spolka Z.O.O.

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

	

 

	
                                “Lien” means any lien, charge, encumbrance, security interest, right of first refusal or other restrictions
of any kind.

                                “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.

                                “Proceeding” means an action, claim, suit, investigation or proceeding (including, without limitation, an
investigation or partial proceeding, such as a deposition), whether commenced or threatened.

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

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

                                “Shares” means the shares of Common Stock issued to the Purchaser pursuant to this Agreement. The Shares
shall have the same voting rights as the shares of Common Stock outstanding as of the date hereof.

                                “Trading Day” means (i) a day on which the Common Stock is traded on a Trading Market, or (ii) if the Common
Stock is not listed on a Trading Market, a day on which the Common Stock is traded in the over-the-counter
market, as reported by the OTC Bulletin Board, or (iii) if the Common Stock is not quoted on the
OTC Bulletin Board, a day on which the Common Stock is quoted in the over-the-counter market as reported
by the National Quotation Bureau Incorporated (or any similar organization or agency succeeding to
its functions of reporting prices); provided, that in the event that the Common Stock is not listed
or quoted as set forth in (i), (ii) and (iii) hereof, then Trading Day shall mean a Business Day.

                                “Trading Market” means whichever of the New York Stock Exchange, the American Stock Exchange, the NASDAQ Global
Market, the NASDAQ Capital Market or OTC Bulletin Board on which the Common Stock is listed or quoted
for trading on the date in question.

ARTICLE II.
PURCHASE AND SALE

                2.1           Closing. Subject to the terms and conditions set forth in this Agreement, at the Closing the Company shall
issue and sell to the Purchaser an aggregate of 553,360 Shares for a per Share purchase price of
$2.53 and an aggregate purchase price of $1,400,000. 

                2.2           The Closing shall take place at
the offices of Heller Ehrman LLP, 7 Times Square, New York, NY 10036 on the Closing Date or at such
other location or time as the parties may agree.

                2.3           Closing Deliveries. (a) At the Closing, the Company shall deliver or cause to be delivered to each Purchaser the
following:

                                                (i)            a certificate evidencing 553,360
Shares.

                                (b)           At the Closing, the Purchaser
shall deliver or cause to be delivered to the Company the following:

	

2

	
                                                (i)            $1,400,000, in United States
dollars and in immediately available funds, by wire transfer to an account designated in writing
by the Company for such purpose.

ARTICLE III.
REPRESENTATIONS AND WARRANTIES

                3.1           Representations and Warranties of the Company. The Company hereby makes the following representations and warranties to the Purchaser: 

                                (a)           Subsidiaries. The Company has no direct or indirect subsidiaries. 

                                (b)           Organization and Qualification. The Company is an entity duly incorporated or otherwise organized, validly existing and in good standing
under the laws of the jurisdiction of its incorporation or organization (as applicable), 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 of any of the provisions of its respective
certificate or articles of incorporation, bylaws or other organizational or charter documents. The
Company is duly qualified to conduct business and is in good standing as a foreign corporation or
other entity 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, could not, individually or in the aggregate, have or reasonably be
expected to result in (i) an adverse effect on the legality, validity or enforceability of this Agreement,
(ii) a material and adverse effect on the results of operations, assets, business or condition (financial
or otherwise) of the Company, taken as a whole, or (iii) an adverse impairment to the Company’s
ability to perform on a timely basis its obligations under this Agreement (any of (i), (ii) or (iii), 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 this Agreement and otherwise to carry out its obligations hereunder. The execution
and delivery of this Agreement by the Company and the consummation by it of the transactions contemplated
hereby have been duly authorized by all necessary action on the part of the Company and no further
action is required by the Company in connection herewith. This Agreement has been 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. 

                                (d)           No Conflicts. The execution, delivery and performance of this Agreement by the Company and the consummation by
the Company of the transactions contemplated hereby do not and will not (i) conflict with or violate
any provision of the Company’s certificate or articles of incorporation, bylaws or other organizational
or charter documents, 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, 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 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) 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 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 could not, individually or in the aggregate,
have or reasonably be expected to result in a Material Adverse Effect.

	

3

	
                                (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 this Agreement, other than (i) the application(s) to the Trading Market on which the Common Stock
is listed for trading for the listing of the Shares for trading thereon in the time and manner required
thereby; and (ii) the filing with the Commission of a Form D and the applicable blue sky forms in
the relevant states.

                                (f)            Issuance of the Securities. The Securities have been duly authorized and, when issued and paid for in accordance with this Agreement,
will be duly and validly issued, fully paid and nonassessable, free and clear of all Liens. 

                                (g)           Capitalization. As of June 15, 2007, the Company’s capitalization is as set forth in Schedule 3.1(g). Except as disclosed in Schedule 3.1(g), no securities of the Company are entitled to preemptive or similar rights, and no Person has any
right of first refusal, preemptive right, right of participation, or any similar right to participate
in the transactions contemplated by this Agreement. Except as disclosed in Schedule 3.1(g), there are no outstanding options, warrants, scrip 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 is or may become bound to issue
additional shares of Common Stock, or securities or rights convertible or exchangeable into shares
of Common Stock. Except as set forth in Schedule 3.1(g), the issue and sale of the Shares will not, immediately or with the passage of time, obligate the
Company to issue shares of Common Stock or other securities to any Person (other than the Purchaser)
and will not result in a right of any holder of Company securities to adjust the exercise, conversion,
exchange or reset price under such securities. 

                                (h)           SEC Reports; Financial Statements. The Company has informed the Purchaser of the accessibility of all of its financial documents and
any other periodic report, current report or definitive proxy statement required to be filed with
the SEC at www.sec.gov. The Company has filed all reports required to be filed by it under the Securities
Act and the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof, for the twelve months
preceding the date hereof (or such shorter period as the Company was required by law to file such
reports) (the foregoing materials being collectively referred to herein as the “SEC Reports”) on a timely basis or has timely filed 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 Securities Act and
the Exchange Act and the rules and regulations of the Commission promulgated thereunder, 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 Commission with respect thereto as in effect at
the time of filing. Such financial statements have been prepared in accordance with generally accepted
accounting principles applied on a consistent basis during the periods involved (“GAAP”), except as may be otherwise specified in such financial statements or the notes thereto, and
fairly present in all material respects the financial position of the Company 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. Notwithstanding
anything to the contrary in this Agreement, the Company’s current financial performance may
vary materially from expectations disclosed in the Company’s SEC Reports and other publicly
released information by the Company.

	

4

	
                                (i)            Material Changes. Since the date of the latest audited financial statements included within the SEC Reports, except
as specifically disclosed in the SEC Reports, (i) there has been no event, occurrence or development
that has had or that could 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 Commission, (iii) the Company has not
altered its method of accounting or the identity of its auditors, (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 stock option plans or outstanding options and warrants. 

                                (j)            Litigation. Except as set forth in the SEC Reports, there is no Action which (i) adversely affects or challenges
the legality, validity or enforceability of any of this Agreement or the Shares or (ii) could, if
there were an unfavorable decision, individually or in the aggregate, have or reasonably be expected
to result in a Material Adverse Effect. The Commission 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 Securities Act.

                                (k)           Labor Relations. Except as disclosed in the SEC Reports, no material labor dispute exists or, to the knowledge of
the Company, is imminent with respect to any of the employees of the Company. 

                                (l)            Compliance. Except as disclosed in the SEC Reports, the Company (i) is not in default under or in violation of
(and 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), nor has the Company received 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
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 not in violation of any order of
any court, arbitrator or governmental body, or (iii) is not or has not been in violation of any statute,
rule or regulation of any governmental authority, including without limitation all foreign, federal,
state and local laws relating to taxes, environmental protection, occupational health and safety,
product quality and safety and employment and labor matters, except in each case as could not, individually
or in the aggregate, have or reasonably be expected to result in a Material Adverse Effect. The Company
is in compliance with the applicable requirements of the Sarbanes-Oxley Act of 2002 and the rules
and regulations thereunder promulgated by the Commission, except where such noncompliance could not
have or reasonably be expected to result in a Material Adverse Effect. The Company and the development
and manufacture of its products comply with any and all applicable requirements of the Federal Food,
Drug and Cosmetic Act, 21 U.S.C. § 301, et seq., any applicable rules and regulations of the
Food and Drug Administration promulgated thereunder, and any similar laws outside of the United States
to which the Company is subject, except where such noncompliance could not have or reasonably be
expected to result in a Material Adverse Effect. 

                                (m)          Regulatory Permits. The Company possesses all certificates, authorizations and permits issued by the appropriate federal,
state, local or foreign regulatory authorities necessary to conduct its business 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 the Company has not received any notice of proceedings relating to the revocation or modification
of any Material Permit. 

	

5

	
                                (n)           Title to Assets. The Company has good and marketable title in fee simple to all real property owned by it that is
material to its business and good and marketable title in all personal property owned by it that
is material to its business, in each case free and clear of all Liens, except for Liens disclosed
in the SEC Reports and 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. Except as disclosed
in the SEC Reports, all real property and facilities held under lease by the Company are held under
valid, subsisting and enforceable leases of which the Company is in substantial compliance.

                                (o)           Patents and Trademarks. To the knowledge of the Company, the Company owns, or has rights to use, all patents, patent applications,
trademarks, trademark applications, service marks, trade names, copyrights and other similar rights
(collectively, the “Intellectual Property Rights”) that are necessary for conducting its business as described in the SEC Reports and which the
failure to so have could, individually or in the aggregate, have or reasonably be expected to result
in a Material Adverse Effect. The Company has not received a written notice that the Intellectual
Property Rights used by the Company violate or infringe upon the rights of any Person. Except as
set forth in the SEC Reports, 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.

                                (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 (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.

                                (r)            Certain Fees. 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. 

                                (s)           Listing and Maintenance Requirements. The Company has not, in the two years preceding the date hereof, received notice (written or oral)
from any Trading Market to the effect that the Company is not in compliance with the listing or maintenance
requirements thereof. The Company is, and has no reason to believe that it will not in the foreseeable
future continue to be, in compliance with the listing and maintenance requirements for continued
listing of the Common Stock on the NASDAQ Capital Market. The issuance and sale of the Shares under
this Agreement do not contravene the rules and regulations of the Trading Market on which the Common
Stock is currently listed or quoted or any other Trading Market with whom the Company may be in formal
discussions regarding the listing of the Common Stock, and no approval of the shareholders of the
Company thereunder is required for the Company to issue and deliver to the Purchaser the number of
Shares contemplated by this Agreement. 

	

6

	
                                (t)            Investment Company. The Company is not, and is not an Affiliate of, an “investment company” within the meaning
of the Investment Company Act of 1940, as amended.

                                (u)           Disclosure. The Company understands and confirms that the Purchaser will rely on the foregoing representations
and covenants in effecting transactions in securities of the Company. All disclosure provided to
the Purchaser regarding the Company, its business and the transactions contemplated hereby, furnished
by or on behalf of the Company in writing to the Purchaser (including the Company’s representations
and warranties set forth in this Agreement) are true and correct 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.

                3.2           Representations and Warranties of the Purchaser. The Purchaser hereby represents and warrants to the Company as follows:

                                (a)           Authority. The Agreement has been duly executed by the Purchaser, and when delivered by the Purchaser in accordance
with terms hereof, will constitute the valid and legally binding obligation of the Purchaser, enforceable
against it in accordance with its terms.

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

                                (c)           Purchaser Status. At the time the Purchaser was offered the Shares, it was, and at the date hereof and as of the Closing
Date it is, an “accredited investor” as defined in Rule 501(a) under the Securities Act.
The Purchaser is not a registered broker-dealer under Section 15 of the Exchange Act.

                                (d)           General Solicitation. The Purchaser is not purchasing the Shares as a result of any advertisement, article, notice or other
communication regarding the Shares 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.

                                (e)           Access to Information. The Purchaser acknowledges that it has reviewed the SEC Reports and has been afforded (i) the opportunity
to ask such questions as it has deemed necessary of, and to receive answers from, representatives
of the Company concerning the terms and conditions of the offering of the Shares and the merits and
risks of investing in the Shares; (ii) access to information about the Company and its financial
condition, results of operations, business, properties, management and prospects sufficient to enable
it to evaluate its investment; and (iii) the opportunity to obtain such additional information that
the Company possesses or can acquire without unreasonable effort or expense that is necessary to
make an informed investment decision with respect to the investment. Neither such inquiries nor any
other investigation conducted by or on behalf of the Purchaser or its representatives or counsel
shall modify, amend or affect the Purchaser’s right to rely on the truth, accuracy and completeness
of the Company’s representations and warranties contained in this Agreement. The Purchaser acknowledges
that in connection with its evaluation of the product that is the subject matter of the Distribution
Agreement it received confidential information concerning such product and the Company which could
be viewed as material non-public information.

	

7

	
                                (f)            Disclosure. The Purchaser understands and confirms that the Company will rely on the foregoing representations
and covenants of the Purchaser in evaluating whether or not registration is required under the Securities
Act for the offer, sale and issuance of the Shares to the Purchaser as contemplated herein.

                                (g)           Suitability and Sophistication. The Purchaser has such knowledge, sophistication and experience in financial and business matters
that it is capable of independently evaluating the risks and merits of purchasing the Shares, and
it has sufficient financial resources to bear the loss of its entire investment in the Shares.

ARTICLE IV.
OTHER AGREEMENTS OF THE PARTIES

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

                                (b)           Certificates
evidencing the Shares will contain the following legend, so long as is required by this Section 4.1(b):

                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. 

                4.2           Securities Laws Disclosure; Publicity. The Company will issue a press release disclosing the transactions contemplated hereby and file a
Current Report on Form 8-K disclosing the material terms of the transactions contemplated hereby.
The Company will file this Agreement and the Distribution Agreement with the Commission. In addition,
the Company will make such other filings and notices in the manner and time required by the Commission
and the Trading Market on which the Common Stock is listed.

                4.3           Use of Proceeds. The Company will utilize the proceeds it receives from the sale of the Shares hereunder for general
corporate purposes, including without limitation for research and development of its technologies
and products.

ARTICLE V.
MISCELLANEOUS

                5.1           Entire Agreement. This Agreement and the Distribution Agreement contain the entire understanding of the parties with
respect to the subject matter hereof and supersede all prior agreements 

	

8

	
and understandings, oral or written, with respect to such matters, which the parties acknowledge have
been merged into such documents and exhibits. 

                5.2           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 at the facsimile number specified in this
Section prior to 6:30 p.m. (New York City time) on a Trading Day, (b) the next Trading Day after
the date of transmission, if such notice or communication is delivered via facsimile at the facsimile
number specified in this Section on a day that is not a Trading Day or later than 6:30 p.m. (New
York City time) on any Trading Day, (c) the Trading Day 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 address for such notices and communications shall be as follows:

	 

	 	If to the Company:	Alfacell Corporation

  300 Atrium Drive,
Somerset, NJ 08873
Attn: Chief Executive Officer
Facsimile No.: (973) 748-1355
	 	 	 
	 	With a copy to:	Heller Ehrman LLP

  7 Times Square 
New York, NY 10036
Attn: Kevin T. Collins
Facsimile No.: (212) 847-8742

	 	 	 
	 	If to the Purchaser:   	Unilab LP

  966 Hungerford Drive, Suite 3B

  Rockville, Maryland 20850

	 
	
or such other address as may be designated in writing hereafter, in the same manner, by such Person.

                5.3           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 the Purchaser 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.

                5.4           Construction. The headings herein are for convenience only, do not constitute a part of this Agreement and shall
not be deemed to limit or affect any of the provisions hereof. The language used in this Agreement
will be deemed to be the language chosen by the parties to express their mutual intent, and no rules
of strict construction will be applied against any party. This Agreement shall be construed as if
drafted jointly by the parties, and no presumption or burden of proof shall arise favoring or disfavoring
any party by virtue of the authorship of any provisions of this Agreement.

                5.5           Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their successors
and permitted assigns. Neither party may assign this Agreement or any rights or obligations hereunder
without the prior written consent of the other party.

	

9

	
                5.6           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.

                5.7           Governing Law. All questions concerning the construction, validity, enforcement and interpretation of this Agreement
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 Proceedings concerning the interpretations, enforcement and defense of the transactions contemplated
by this Agreement (whether brought against a party hereto or its respective Affiliates, employees
or agents) shall be commenced exclusively in the state and federal courts sitting in the City of
New York, Borough of Manhattan (the “New York Courts”). Each party hereto hereby irrevocably submits to the exclusive jurisdiction of the New York
Courts for the adjudication of any dispute hereunder or in connection herewith or with any transaction
contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert
in any Proceeding, any claim that it is not personally subject to the jurisdiction of any such New
York Court, or that such Proceeding has been commenced in an improper or inconvenient forum. Each
party hereto hereby irrevocably waives personal service of process and consents to process being
served in any such 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. Each party hereto hereby irrevocably waives, to the fullest
extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising
out of or relating to this Agreement or the transactions contemplated hereby. If either party shall
commence a Proceeding to enforce any provisions of this Agreement, then the prevailing party in such
Proceeding shall be reimbursed by the other party for its attorney’s fees and other costs and
expenses incurred with the investigation, preparation and prosecution of such Proceeding.

                5.8           Survival. The representations, warranties, agreements and covenants contained herein shall survive the Closing
Date and the delivery of the Shares.

                5.9           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 the 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.

                5.10         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.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
SIGNATURE PAGE FOLLOWS]

	

10

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

	 

	 	ALFACELL CORPORATION
		 
		/s/ Kuslima Shogen
		

		Name:	Kuslima Shogen
		Title:	Chief Executive Officer
		 
		 
		UNILAB LP
		 
		

		Name:
		Title:

	

11

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