Document:

DOR Securities Purchase Agreement 04-04-06

    

      

      SECURITIES
        PURCHASE AGREEMENT

       

      This
        Securities Purchase Agreement (this "Agreement")
        is
        dated as of April 6, 2006, among DOR BioPharma, Inc., a Delaware corporation
        (the "Company"),
        and
        the investors identified on the signature pages hereto (each, an "Investor"
        and
        collectively, the "Investors").

       

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

       

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

       

      ARTICLE
        I.  

       

      DEFINITIONS

       

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

       

      "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, any Subsidiary or any of their
        respective 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.

       

      “AMEX”
        means
        the
        American Stock Exchange.

       

      "Business
        Day"
        means
        any day except Saturday, Sunday and any day that is 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 Securities pursuant to Article
        II.

       

      "Closing
        Date"
        means
        the Business Day immediately following the date on which all the conditions
        set
        forth in Sections 5.1 and 5.2 hereof are satisfied, or such other date as
        the
        parties may agree.

       

      "Commission"
        means
        the Securities and Exchange Commission.

       

      "Common
        Stock"
        means
        the common stock of the Company, par value $.001 per share, and any securities
        into which such common stock may hereafter be reclassified. 

       

      "Common
        Stock Equivalents"
        means
        any securities of the Company or any Subsidiary which entitle the holder
        thereof
        to acquire Common Stock at any time, including without limitation, any debt,
        preferred stock, rights, options, warrants or other instrument that is at
        any
        time convertible into or exchangeable for, or otherwise entitles the holder
        thereof to receive, Common Stock or other securities that entitle the holder
        to
        receive, directly or indirectly, Common Stock.

       

      "Company
        Counsel"
        means
        Edwards Angell Palmer & Dodge LLP.

       

      "Disclosure
        Materials"
        has the
        meaning set forth in Section 3.1(h) hereof.

       

      "Discussion
        Time"
        has the
        meaning set forth in Section 3.2(h) hereof.

       

      "Effective
        Date"
        means
        the date that the Registration Statement required by Section 2(a) of the
        Registration Rights Agreement is first declared effective by the
        Commission.

       

      "Exchange
        Act"
        means
        the Securities Exchange Act of 1934, as amended.

       

      "First
        Notice"
        has the
        meaning set forth in Section 4.2 hereof.

       

      "GAAP"
        has the
        meaning set forth in Section 3.1(h) hereof.

       

      "Intellectual
        Property Rights"
        has the
        meaning set forth in Section 3.1(o) hereof.

       

      "Investment
        Amount"
        means,
        with respect to each Investor, the investment amount indicated below such
        Investor's name on the signature page of this Agreement and as set forth
        on
Schedule
        1.

       

      "Investor
        Party"
        has the
        meaning set forth in Section 4.7 hereof.

       

      "Investors"
        shall
        mean the parties listed on Schedule
        1
        attached
        hereto. 

       

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

       

      "Losses"
        shall
        have the meaning set forth in Section 4.7 hereof.

       

      "Material
        Adverse Effect"
        has the
        meaning set forth in Section 3.1(b) hereof. 

       

      "Material
        Permits"
        has the
        meaning set forth in Section 3.1(m) hereof.

       

      "New
        York Courts"
        has the
        meaning set forth in Section 6.8 hereof.

       

      "Notice
        of Acceptance"
        has the
        meaning set forth in Section 4.2(c) hereof.

       

      "Per
        Unit Purchase Price"
        equals
        the lesser of $0.35 or 85% of the average closing price of the Shares as
        reported on the Trading Market for five (5) Business Days prior to the
        Closing.

       

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

       

      "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.

       

      "Registration
        Statement"
        means a
        registration statement meeting the requirements set forth in the Registration
        Rights Agreement and covering the resale by the Investors of the Shares and
        the
        Warrant Shares.

       

      "Registration
        Rights Agreement"
        means
        the Registration Rights Agreement, dated as of the date of this Agreement,
        among
        the Company and the Investors, in the form of Exhibit
        B
        hereto.

       

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

       

      "Securities
        Act"
        means
        the Securities Act of 1933, as amended.

       

      "SEC
        Reports"
        has the
        meaning set forth in Section 3.1(h) hereof.

       

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

       

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

       

      "Subsidiary"
        means
        any "significant subsidiary" as defined in Rule 1-02(w) of the Regulation
        S-X
        promulgated by the Commission under the Exchange Act.

       

      "Trading
        Day"
        means
        (i) a day on which the Common Stock is traded on a Trading Market (other
        than
        the OTC Bulletin Board), 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
        any of the following markets or exchanges on which the Common Stock is listed
        or
        quoted for trading on the date in question: the New York Stock Exchange,
        the
        American Stock Exchange, the Nasdaq National Market, the Nasdaq Capital Market
        or the OTC Bulletin Board on which the Common Stock is listed or quoted for
        trading on the date in question.

       

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

       

      "Warrants"
        means
        the Common Stock purchase warrants in the form of Exhibit A,
        which
        are issuable to the Investors at the Closing.

       

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

       

      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 each Investor, and each Investor shall,
        severally and not jointly, purchase from the Company, the Shares and the
        Warrants representing such Investor’s Investment Amount as set forth opposite
        each Investor’s name on Schedule
        1.
        The
        Closing shall take place at the offices of Edwards Angell Palmer & Dodge
        LLP, 750 Lexington Avenue, New York, New York 10022 on the Closing Date or
        at
        such other location or time as the parties may agree.

       

      2.2  Closing
        Deliveries.
        

       

      (a) Company
        Deliverables.  At
        the Closing, the Company shall deliver or cause to be delivered to each Investor
        the following (the “Company
        Deliverables”):

       

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

       

      (ii)  Warrants,
        registered in the name of each Investor, pursuant to which such Investor
        shall
        have the right to acquire the number of shares of Common Stock equal to 100%
        of
        the number of Shares issuable to such Investor pursuant to Section
        2.2(a)(i);

       

      (iii)  the
        legal
        opinion of Company Counsel, in agreed form, addressed to the Investors;
        and

       

      (iv)  this
        Agreement and the Registration Rights Agreement, duly executed by the
        Company.

       

      (b)  Investor
        Deliverables.
        At the
        Closing, each Investor shall deliver or cause to be delivered to the Company
        the
        following:

       

      (i)  its
        Investment Amount, in United States dollars and in immediately available
        funds,
        by wire transfer to an account designated in writing by the Company for such
        purpose, as set forth in Schedule
        1;
        and

       

      (ii)  this
        Agreement and the Registration Rights Agreement, duly executed by such
        Investor.

       

      

       

      ARTICLE
        III.  

       

      REPRESENTATIONS
        AND WARRANTIES

       

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

       

      (a)  Subsidiaries.
        The
        Company has no direct or indirect Subsidiaries other than as specified in
        the
        SEC Reports. Except as specified in the SEC Reports or in Schedule
        3.1(a),
        the
        Company owns, directly or indirectly, all of the capital stock of each
        Subsidiary free and clear of any and all Liens, other than restrictions on
        transfer under applicable securities laws, and all the issued and outstanding
        shares of capital stock of each Subsidiary are validly issued and are fully
        paid, non-assessable and free of preemptive and similar rights. 

       

      (b)  Organization
        and Qualification.
        Each of
        the Company and each Subsidiary 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. Neither the Company nor any
        Subsidiary is in violation of any of the provisions of its respective
        certificate or articles of incorporation, bylaws or other organizational
        or
        charter documents. Each of the Company and each Subsidiary 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, would
        not,
        individually or in the aggregate, have or reasonably be expected to result
        in
        (i) a material and adverse effect on the legality, validity or enforceability
        of
        any Transaction Document, (ii) a material and adverse effect on the results
        of
        operations, assets, prospects, business or condition (financial or otherwise)
        of
        the Company and the Subsidiaries, taken as a whole, or (iii) a material adverse
        impairment to the Company's ability to perform on a timely basis its obligations
        under any Transaction Document (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 each of the Transaction Documents
        and otherwise to carry out its obligations thereunder. The execution and
        delivery of each of the Transaction Documents by the Company and the
        consummation by it of the transactions contemplated thereby 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 therewith other than the
        filings
        referred to in Section 3.1(e) hereof and required pursuant to Section 4.7
        hereof. Each Transaction Document has been (or upon delivery will have 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, except (i)
        as such
        enforceability may be limited by applicable bankruptcy, insolvency,
        reorganization, moratorium, liquidation or similar laws relating to, or
        affecting generally the enforcement of, creditors’ rights and remedies or by
        other equitable principles of general application affecting enforcement of
        creditors’ rights generally, (ii) as limited by laws relating to the
        availability of specific performance, injunctive relief or other equitable
        remedies and (iii) insofar as indemnification and contribution provisions
        may be
        limited by applicable law. 

       

      (d)  No
        Conflicts.
        The
        execution, delivery and performance of the Transaction Documents by the Company
        and the consummation by the Company of the transactions contemplated thereby
        do
        not and will not (i) conflict with or violate any provision of the Company's
        or
        any Subsidiary'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 (evidencing a Company
        or Subsidiary debt or otherwise) or other understanding to which the Company
        or
        any Subsidiary is a party or by which any property or asset of the Company
        or
        any Subsidiary 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 or a Subsidiary
        is
        subject (including federal and state securities laws and regulations), or
        by
        which any property or asset of the Company or a Subsidiary is bound or affected;
        except in the case of each of clauses (ii) and (iii), such as would not,
        individually or in the aggregate, have or reasonably be expected to result
        in a
        Material Adverse Effect.

       

      (e)  Filings,
        Consents and Approvals.
        The
        Company is not required to obtain any consent, waiver, authorization or order
        of, give any notice to, or make any filing or registration with, any court
        or
        other federal, state, local or other governmental authority or other Person
        in
        connection with the execution, delivery and performance by the Company of
        the
        Transaction Documents, other than (i) the filing with the Commission of one
        or
        more Registration Statements in accordance with the requirements of the
        Registration Rights Agreement, (ii) filings required by state securities
        laws, and the timely filing of a Notice of Sale of Securities on Form D with
        the
        Commission, (iii) the filings required in accordance with Section 4.7, and
        (iv)
        those that have been made or obtained prior to the date of this
        Agreement.

       

      (f)  Issuance
        of the Securities.
        The
        Securities have been duly authorized and, when issued and paid for in accordance
        with the Transaction Documents, will be duly and validly issued, fully paid
        and
        nonassessable, free and clear of all Liens, other than restrictions on transfer
        under applicable securities laws. The Company has reserved from its duly
        authorized capital stock the shares of Common Stock issuable pursuant to
        this
        Agreement and the Warrants in order to issue the Shares and the Warrant
        Shares.

       

      (g)  Capitalization.
        The
        number of shares and type of all authorized, issued and outstanding capital
        stock of the Company, and all shares of Common Stock reserved for issuance
        under
        the Company’s various option and incentive plans, is set forth in the SEC
        Reports. As of the date hereof, the authorized capital stock of the Company
        consists of (i) 150,000,000 shares of Common Stock, of which as of the date
        hereof, 52,070,147 shares are issued and outstanding, and (ii) 4,600,000
        shares
        of preferred stock, par value $.001 per share, and 200,000 shares of Series
        B
        Convertible Preferred Stock, par value $.05 per share, in each case no shares
        of
        which are outstanding. 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 the Transaction Documents, and 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 or any
        Subsidiary is or may become bound to issue additional shares of Common Stock,
        or
        securities or rights convertible or exchangeable into shares of Common Stock.
        

       

      (h)  No
        General Solicitation.
        Neither
        the Company nor any of its Affiliates, nor any person acting on their behalf,
        has conducted any general solicitation or general advertising (as those terms
        are used in Regulation D) in connection with the offer or sale of the
        Securities. 

       

      (i)  No
        Integrated Offering.
        Neither
        the Company, nor any of its Affiliates, nor any Person acting on their behalf,
        has made any offers or sales of any Company security or solicited any offers
        to
        buy any security, under circumstances that would adversely affect reliance
        by
        the Company on Section 4(2) of the Securities Act for the exemption from
        registration for the transactions contemplated hereby or would require
        registration of the Securities under the Securities Act. 

       

      (j)  Foreign
        Corrupt Practices.
        Neither
        the Company nor any of its Subsidiaries nor, to the Company's knowledge,
        any
        director, officer, agent, employee or other Person acting on behalf of the
        Company or any of its Subsidiaries, has, in the course of its actions for,
        or on
        behalf of, the Company (i) used any corporate funds for any unlawful
        contribution, gift, entertainment or other unlawful expenses relating to
        political activity; (ii) made any direct or indirect unlawful payment to
        any
        foreign or domestic government official or employee from corporate funds;
        (iii)
        violated or is in violation of any provision of the U.S. Foreign Corrupt
        Practices Act of 1977, as amended; or (iv) made any unlawful bribe, rebate,
        payoff, influence payment, kickback or other unlawful payment to any foreign
        or
        domestic government official or employee.

       

      (k)  No
        Undisclosed Liabilities.
        No
        liability has occurred or exists with respect to the Company or its Subsidiaries
        or their respective business, properties, operations or financial condition
        that
        would be required to be disclosed by the Company under applicable securities
        laws in a registration statement on Form S-1 filed with the SEC relating
        to an
        issuance and sale by the Company of its securities and which has not been
        publicly disclosed.

       

      (l)  SEC
        Reports; Financial Statements.
        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 12 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"
        and,
        together with the Schedules to this Agreement (if any), the "Disclosure
        Materials")
        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 except that unaudited financial statements may not contain all footnotes
        required by GAAP, and fairly present in all material respects the financial
        position of the Company and its consolidated Subsidiaries as of and for the
        dates thereof and the results of operations and cash flows for the periods
        then
        ended, subject, in the case of unaudited statements, to normal, year-end
        audit
        adjustments disclosed therein. 

       

      (m)  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 would reasonably
        be
        expected to result in a Material Adverse Effect, (ii) the Company has not
        incurred any liabilities (contingent or otherwise) other than (A) trade
        payables, accrued expenses, and other liabilities 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, and (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. The Company does not have pending before the Commission any request
        for
        confidential treatment of information.

       

      (n)  Litigation.
        Except
        as set forth in Schedule
        3.1(j),
        there
        is no Action which (i) adversely affects or challenges the legality, validity
        or
        enforceability of any of the Transaction Documents or the Securities or (ii)
        except as specifically disclosed in the SEC Reports, would, if there were
        an
        unfavorable decision, individually or in the aggregate, have or reasonably
        be
        expected to result in a Material Adverse Effect. Neither the Company nor
        any
        Subsidiary, nor any director or officer thereof (in his or her capacity as
        such), is or has been the subject of any Action involving a claim of violation
        of or liability under federal or state securities laws or a claim of breach
        of
        fiduciary duty, except as specifically disclosed in the SEC Reports. There
        has
        not been, and to the knowledge of the Company, there is not pending any
        investigation by the Commission involving the Company or any current or former
        director or officer of the Company (in his or her capacity as such). The
        Commission has not issued any stop order or other order suspending the
        effectiveness of any registration statement filed by the Company or any
        Subsidiary under the Exchange Act or the Securities Act.

       

      (o)  Labor
        Relations.
        No
        material labor dispute exists or, to the actual knowledge of the executive
        officers or directors of the Company, is imminent with respect to any of
        the
        employees of the Company.

       

      (p)  Compliance.
        Neither
        the Company nor any Subsidiary (i) is 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 or any Subsidiary
        under),
        nor has the Company or any Subsidiary 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 in violation of any order of any court,
        arbitrator or governmental body, or (iii) is or has 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 would 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
        effective requirements of the Sarbanes-Oxley Act of 2002, as amended, and
        the
        rules and regulations thereunder, except where such noncompliance would not
        have
        or reasonably be expected to result in a Material Adverse Effect. 

       

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

       

      (r)  Title
        to Assets.
        The
        Company and the Subsidiaries have good and marketable title in fee simple
        to all
        real property owned by them that is material to their respective businesses
        and
        good and marketable title in all personal property owned by them that is
        material to their respective businesses, in each case free and clear of all
        Liens, except for Liens as do not materially affect the value of such property
        and do not materially interfere with the use made and proposed to be made
        of
        such property by the Company and the Subsidiaries. Any real property and
        facilities held under lease by the Company and the Subsidiaries are held
        by them
        under valid, subsisting and enforceable leases of which the Company and the
        Subsidiaries are in compliance, except as would not, individually or in the
        aggregate, have or reasonably be expected to result in a Material Adverse
        Effect.

       

      (s)  Patents
        and Trademarks.
        The
        Company and the Subsidiaries have, or have rights to use, all patents, patent
        applications, trademarks, trademark applications, service marks, trade names,
        copyrights, licenses and other similar rights that are necessary or material
        for
        use in connection with their respective businesses as described in the SEC
        Reports and which the failure to so have would, individually or in the
        aggregate, have or reasonably be expected to result in a Material Adverse
        Effect
        (collectively, the "Intellectual
        Property Rights").
        Neither the Company nor any Subsidiary has received a written notice that
        the
        Intellectual Property Rights used by the Company or any Subsidiary violates
        or
        infringes upon the rights of any Person where such infringement would have
        or
        could reasonably be expected to have a Material Adverse Effect. Except as
        set
        forth in the SEC Reports, to the actual knowledge of the executive officers
        and
        directors 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.

       

      (t)  Insurance.
        The
        Company and the Subsidiaries are 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 and the Subsidiaries
        are
        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 on terms consistent with market for the Company’s line of
        business.

       

      (u)  Transactions
        With Affiliates and Employees.
        Except
        as set forth in Schedule
        3.1(q)
        and the
        SEC Reports, none of the officers or directors of the Company and, to the
        knowledge of the Company, none of the employees of the Company is presently
        a
        party to any transaction with the Company or any Subsidiary (other than for
        services as employees, officers and directors), including any contract,
        agreement or other arrangement providing for the furnishing of services to
        or
        by, providing for rental of real or personal property to or from, or otherwise
        requiring payments to or from any officer, director or such employee or,
        to the
        knowledge of the Company, any entity in which any officer, director, or any
        such
        employee has a substantial interest or is an officer, director, trustee or
        partner.

       

      (v)  Internal
        Accounting Controls.
        The
        Company and the Subsidiaries maintain a system of internal accounting controls
        sufficient to provide reasonable assurance that (i) transactions are executed
        in
        accordance with management's general or specific authorizations, (ii)
        transactions are recorded as necessary to permit preparation of financial
        statements in conformity with generally accepted accounting principles and
        to
        maintain asset accountability, (iii) access to assets is permitted only in
        accordance with management's general or specific authorization, and (iv)
        the
        recorded accountability for assets is compared with the existing assets at
        reasonable intervals and appropriate action is taken with respect to any
        differences. The Company has established disclosure controls and procedures
        (as
        defined in Exchange Act rules 13a-15(e) and 15d-15(e)) for the Company and
        designed such disclosure controls and procedures to ensure that material
        information relating to the Company, including its Subsidiaries, is made
        known
        to the certifying officers by others within those entities, particularly
        during
        the period in which the Company’s Form 10-KSB or 10-QSB, as the case may be, is
        being prepared. 

       

      (w)  Solvency.
        Based
        on the financial condition of the Company as of the Closing Date (and assuming
        the Closing shall have occurred), the Company’s assets and the Company’s ability
        to draw down on the Fusion Capital financing facility, the Company has
        sufficient capital to enable it to carry on its business for the current
        fiscal
        year as now conducted and as currently proposed to be conducted through June
        30,
        2007. 

       

      (x)  Certain
        Fees.
        Except
        as may be payable to MidSouth Capital, Inc. by the Company, 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. The Investors shall have no obligation with respect to any
        fees
        payable to MidSouth Capital, Inc. or with respect to any claims (other than
        such
        fees or commissions owed by an Investor pursuant to written agreements executed
        by such Investor which fees or commissions shall be the sole responsibility
        of
        such Investor) made by or on behalf of other Persons for fees of a type
        contemplated in this Section that may be due in connection with the transactions
        contemplated by this Agreement. 

       

      (y)  Certain
        Registration Matters.
        Assuming the accuracy of the Investors’ representations and warranties set forth
        in Sections 3.2(b)-(e), no registration under the Securities Act is required
        for
        the offer and sale of the Shares and Warrant Shares by the Company to the
        Investors under the Transaction Documents. Except as disclosed on Schedule
        3.1(u),
        the
        Company has not granted or agreed to grant to any Person any rights (including
        "piggy-back" registration rights) to have any securities of the Company
        registered with the Commission or any other governmental authority that have
        not
        been satisfied.

       

      (z)  Listing
        and Maintenance Requirements.
        Except
        as specified in the SEC Reports, the Company has not, in the two years preceding
        the date hereof, received notice from any Trading Market to the effect that
        the
        Company is not in compliance with the listing or maintenance requirements
        thereof. The issuance and sale of the Securities under the Transaction Documents
        does not contravene the rules and regulations of the Trading Market on which
        the
        Common Stock is currently listed or quoted, and no approval of the shareholders
        of the Company thereunder is required for the Company to issue and deliver
        to
        the Investors the maximum number of Securities contemplated by Transaction
        Documents.

       

      (aa)  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.

       

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

       

      (cc)  No
        Additional Agreements.
        The
        Company does not have any agreement or understanding with any Investor with
        respect to the transactions contemplated by the Transaction Documents other
        than
        as specified in the Transaction Documents.

       

      (dd)  Disclosure.
        Upon
        the filing of the press release required under Section 4.7, the Investors
        will
        not have received from the Company or any Person acting on its behalf any
        information that the Company believes constitutes material, non-public
        information concerning the Company. If such press release is not filed on
        the
        Closing, then the Company confirms that it has not disclosed any potentially
        material non-public information to any Investor concerning the Company. The
        Company understands and confirms that the Investors will rely on the foregoing
        representations and covenants in effecting transactions in securities of
        the
        Company. All written disclosures provided to the Investors regarding the
        Company, its business and the transactions contemplated hereby, furnished
        by or
        on behalf of the Company (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 Investors.
        Each
        Investor hereby, for itself and for no other Investor, represents and warrants
        to the Company as follows:

       

      (a)  Organization;
        Authority.
        Such
        Investor is an entity duly organized, validly existing and in good standing
        under the laws of the jurisdiction of its organization with the requisite
        corporate or partnership power and authority to enter into and to consummate
        the
        transactions contemplated by the applicable Transaction Documents and otherwise
        to carry out its obligations thereunder. The execution, delivery and performance
        by such Investor of the transactions contemplated by this Agreement has been
        duly authorized by all necessary corporate or, if such Investor is not a
        corporation, such partnership, limited liability company or other applicable
        like action, on the part of such Investor. Each of this Agreement and the
        Registration Rights Agreement has been duly executed by such Investor, and
        when
        delivered by such Investor in accordance with terms hereof, will constitute
        the
        valid and legally binding obligation of such Investor, enforceable against
        it in
        accordance with its terms, except (i) as such enforceability may be limited
        by
        applicable bankruptcy, insolvency, reorganization, moratorium, liquidation
        or
        similar laws relating to, or affecting generally the enforcement of, creditors’
rights and remedies or by other equitable principles of general application
        affecting enforcement of creditors’ rights generally, (ii) as limited by laws
        relating to the availability of specific performance, injunctive relief or
        other
        equitable remedies and (iii) insofar as indemnification and contribution
        provisions may be limited by applicable law.

       

      (b)  Investment
        Intent.
        Such
        Investor is acquiring the Securities as principal for its own account for
        investment purposes only and not with a view to or for distributing or reselling
        such Securities or any part thereof, without prejudice, however, to such
        Investor's right at all times to sell or otherwise dispose of all or any
        part of
        such Securities in compliance with applicable federal and state securities
        laws.
        Subject to the immediately preceding sentence, nothing contained herein shall
        be
        deemed a representation or warranty by such Investor to hold the Securities
        for
        any period of time. Such Investor is acquiring the Securities hereunder in
        the
        ordinary course of its business. Such Investor does not have any agreement
        or
        understanding, directly or indirectly, with any Person to distribute any
        of the
        Securities.

       

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

       

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

       

      (e)  Access
        to Information.
        Such
        Investor acknowledges that it has reviewed the Disclosure Materials 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 Securities; (ii) access to information about the Company
        and
        the Subsidiaries and their respective 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 such Investor or its representatives
        or counsel shall modify, amend or affect such Investor's right to rely on
        the
        truth, accuracy and completeness of the Disclosure Materials and the Company's
        representations and warranties contained in the Transaction
        Documents.

       

      (f)  Limited
        Ownership.Based
        upon the representations of the Company set forth in Section 3.1(g) hereof,
        the
        purchase by such Investor of the Securities issuable to it at the Closing
        (including the Underlying Shares that would be issuable in respect of such
        Securities) will not result in such Investor acquiring, or obtaining the
        right
        to acquire immediately upon the Closing, in excess of 19.999% of the Common
        Stock or the voting power of the Company outstanding prior to the Closing.
        Such
        Investor
        is not an officer or director of the Company or any Subsidiary
        thereof.

       

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

       

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

       

      (i)  Residency.
        Such
        Investor is a resident of that jurisdiction specified as the address that
        the
        Investor is to receive notices hereunder on the signature pages hereto.

       

      The
        Company acknowledges and agrees that each Investor does not make or has not
        made
        any representations or warranties with respect to the transactions contemplated
        hereby other than those specifically set forth in this Section 3.2.

       

      ARTICLE
        IV.  

       

      OTHER
        AGREEMENTS OF THE PARTIES

       

      4.1  Certificates.

       

      (a) Securities
        may only be disposed of in compliance with state and federal securities laws.
        In
        connection with any transfer of the Securities other than pursuant to an
        effective registration statement, to the Company, to an Affiliate of an
        Investor, pursuant to Rule 144(k) or in connection with a pledge as contemplated
        in Section 4.1(b), the Company may require the transferor thereof to provide
        to
        the Company an opinion of counsel selected by the transferor, reasonably
        acceptable to the Company, the form and substance of which opinion shall
        be
        reasonably satisfactory to the Company, to the effect that such transfer
        does
        not require registration of such transferred Securities under the Securities
        Act. 

       

      (b) Certificates
        evidencing the Securities will contain the following legend, until such time
        as
        they are not required under Section 4.1(c):

       

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

       

      The
        Company acknowledges and agrees that an Investor may from time to time pledge,
        and/or grant a security interest in some or all of the Securities pursuant
        to a
        bona fide margin agreement with a registered broker-dealer or grant a security
        interest in some or all of the Securities to a financial institution that
        is an
        "accredited investor" as defined in Rule 501(a) under the Securities Act
        and who
        agrees to be bound by the provisions of this Agreement and the Registration
        Rights Agreement and, if required under the terms of such agreement or account,
        such Investor may transfer pledged or secured Securities to the pledgees
        or
        secured parties. Such a pledge or transfer would not be subject to approval
        or
        consent of the Company and no legal opinion of legal counsel to the pledgee,
        secured party or pledgor shall be required in connection with the pledge,
        but
        such legal opinion may be required in connection with a subsequent transfer
        following default by the Investor transferee of the pledge. No notice shall
        be
        required of such pledge. At the appropriate Investor’s expense, the Company will
        execute and deliver such reasonable documentation as a pledgee or secured
        party
        of Securities may reasonably request in connection with a pledge or transfer
        of
        the Securities including the preparation and filing of any required prospectus
        supplement under Rule 424(b)(3) of the Securities Act or other applicable
        provision of the Securities Act to appropriately amend the list of Selling
        Stockholders thereunder.

       

      (c) Certificates
        evidencing the Shares and Warrant Shares shall not contain any legend (including
        the legend set forth in Section 4.1(b)): (i) following a sale of such Securities
        pursuant to an effective registration statement (including the Registration
        Statement), or (ii) following a sale of such Shares or Warrant Shares pursuant
        to Rule 144 (assuming the transferor is not an Affiliate of the Company),
        or
        (iii) while such Shares or Warrant Shares are eligible for sale under Rule
        144(k). Following such time as restrictive legends are not required to be
        placed
        on certificates representing Shares or Warrant Shares pursuant to the preceding
        sentence, the Company will, no later than three Trading Days following the
        delivery by an Investor to the Company or the Company's transfer agent of
        a
        certificate representing Shares or Warrant Shares containing a restrictive
        legend, deliver or cause to be delivered to such Investor a certificate
        representing such Shares or Warrant Shares that is free from all restrictive
        and
        other legends. The Company may not make any notation on its records or give
        instructions to any transfer agent of the Company that enlarge the restrictions
        on transfer set forth in this Section.

       

      (d) Subject
        to the limitations set forth in Sections 1(f) and (g) of the Warrant, if
        the
        Company shall fail for any reason to cause to be issued to an Investor, within
        three (3) Trading Days of a reasonable written request therefor, a certificate
        without any restrictive legends for the number of shares of Common Stock
        to
        which the Investor is entitled pursuant
        to Section 4.1(c),
        the
        Company shall pay as
        partial liquidated
        damages
        in cash to the Investor on each day after such third Business Day that the
        issuance of such Common Stock is not timely effected an amount equal to 1.0%
        of
        the product of (i) the sum of the number of shares of Common Stock not issued
        to
        the Investor without
        any restrictive legends on
        a
        timely basis and to which the Investor is entitled and (ii) the closing price
        of
        the Common Stock as reported on the Trading Market on the Trading Day
        immediately preceding the third Business Day. Nothing
        herein shall limit such Investor’s right to pursue actual damages for the
        Company's failure to deliver certificates representing any Securities as
        required by the Transaction Documents, and such Investor shall have the right
        to
        pursue all remedies available to it at law or in equity including, without
        limitation, a decree of specific performance and/or injunctive relief.

       

      

       

      4.2  Participation
        Rights.
        If,
        until the earlier of (i) of twelve (12) months from Closing or (ii) as long
        as
        an Investor holds of record at least 25% of the Shares (not including the
        Warrant Shares), the Company proposes to issue any equity Common Stock or
        Common
        Stock Equivalents (collectively, “New
        Issue Securities”),
        the
        Company shall first offer the New Issue Securities to each of such Investors
        in
        accordance with the following provisions:

       

      (a)  The
        Company shall give a written notice to each Investor (the “First
        Notice”)
        stating
        (i) its intention to issue the New Issue Securities, (ii) the number and
        description of the New Issue Securities proposed to be issued and (iii) the
        proposed purchase price (calculated as of the proposed issuance date) and
        the
        other terms and conditions upon which the Company is proposing to offer the
        New
        Issue Securities.

       

      (b)  Transmittal
        of the First Notice to the Investors by the Company shall constitute an offer
        by
        the Company to sell each Investor up to his, her or its proportionate number
        (based upon his, her or its percentage ownership of the total number of issued
        and outstanding shares of Common Stock as of the date of the First Notice)
        of
        the New Issue Securities for the price and upon the terms and conditions
        set
        forth in the First Notice. For a period of five (5) Business Days after receipt
        of the of the First Notice to the Investors, each Investor shall have the
        option, exercisable by written notice to the Company, to accept ("Notice
        of Acceptance")
        the
        Company’s offer as to all or any part of such Investor’s proportionate number of
        the New Issue Securities. If two or more types of New Issue Securities are
        to be
        issued or New Issue Securities are to be issued together with other types
        of
        securities, including, without limitation, debt Securities, in a single
        transaction or related transactions, the rights to purchase New Issue Securities
        granted to the Investors under this Section must be exercised to purchase
        all
        types of New Issue Securities and such other securities in the same proportion
        as such New Issue Securities and other securities are to be issued by the
        Company. 

       

      (c)  The
        Company shall have thirty (30) Business Days after the date of the First
        Notice
        to offer, issue, sell or exchange all or any part of the New Issue Securities
        as
        to which a Notice of Acceptance has not been given by the Investors, but
        only
        upon terms and conditions that are not more favorable to the acquiring person
        or
        persons or less favorable to the Company than those set forth in the First
        Notice. 

       

      (d)  The
        participation rights contained in this Section shall not apply to the issuance
        and sale by the Company, from time to time hereafter, of (i) shares of Common
        Stock or Common Stock Equivalents to employees, officers, or directors of,
        or
        consultants to, the Company, as compensation for their services to the Company
        or any of its direct or indirect Subsidiaries pursuant to arrangements approved
        by the Board of Directors of the Company, (ii) the issuance of the Securities
        pursuant to the Transaction Documents and the issuance and exercise of the
        warrants issuable to MidSouth Capital, Inc. pursuant to its engagement letter
        with the Company in connection with the offering subject to this Agreement,
        (iii) shares of Common Stock issued and sold in a firm commitment underwritten
        public offering (which shall not include an equity line of credit or similar
        financing arrangement) resulting in gross proceeds to the Company of in excess
        of $15,000,000 or (iv) shares of Common Stock issued as consideration for
        the
        acquisition of another company or business in which the shareholders of the
        Company do not have a majority ownership interest, which acquisition has
        been
        approved by the Board of Directors of the Company or (v) shares of Common
        Stock
        issuable upon the exercise of outstanding Common Stock Equivalents (but not
        amendments thereto).

       

      4.3  Fusion
        Capital.
        Without
        the prior written consent of Iroquois Capital Management, LLC (“Iroquois
        Capital”),
        the
        Company shall not: (a) at any time prior to the earlier of (i) the date that
        is
        seven (7) Business Days after a U.S. Food and Drug Administration (the
        "FDA")
        advisory panel meeting regarding the New Drug Application for orBec® or (ii) the
        date the FDA responds to the New Drug Application for orBec®, offer for sale or
        sell shares of Common Stock to Fusion Capital Fund II, LLC (“Fusion
        Capital”)
        pursuant to the terms of the common stock purchase agreement, dated as of
        January 17, 2006 (“Fusion
        Capital Agreement”),
        between the Company and Fusion Capital, or (b) modify the Fusion Capital
        Agreement with regard to the Company’s sale to Fusion Capital of Common Stock
        below $0.60 per share. 

       

      4.4  No
        Debt Security.
        Without
        the prior written consent of Iroquois Capital, the Company shall not issue
        any
        debt securities to a third party until the earlier of (i) the date that the
        FDA
        approves the New Drug Application for orBec® or (ii) the one year anniversary of
        the Closing Date. 

       

      4.5  Integration.
        The
        Company shall not, and shall use its best efforts to ensure that no Affiliate
        of
        the Company shall, sell, offer for sale or solicit offers to buy or otherwise
        negotiate in respect of any security (as defined in Section 2 of the Securities
        Act) that would be integrated with the offer or sale of the Securities in
        a
        manner that would require the registration under the Securities Act of the
        sale
        of the Securities to the Investors, or that would be integrated with the
        offer
        or sale of the Securities for purposes of the rules and regulations of any
        Trading Market in a manner that would require stockholder approval of the
        sale
        of the securities to the Investors.

       

      4.6  Subsequent
        Registrations.
        Other
        than pursuant to the Registration Statement, prior to the Effective Date,
        the
        Company may not file any registration statement (other than on Form S-8)
        with
        the Commission with respect to any securities of the Company.

       

      4.7  Securities
        Laws Disclosure; Publicity.
        By 9:00
        a.m. (New York time) on April 7, 2006, the Company will file a press release
        relating to the transaction contemplated by this Agreement and within 2 Business
        Days following the Closing, a Current Report on Form 8-K disclosing the material
        terms of the Transaction Documents (and attach as exhibits thereto the
        Transaction Documents). 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. Notwithstanding the foregoing,
        the
        Company shall not publicly disclose the name of any Investor, or include
        the
        name of any Investor in any filing with the Commission (other than the
        Registration Statement and any exhibits to filings made in respect of this
        transaction in accordance with periodic filing requirements under the Exchange
        Act) or any regulatory agency or Trading Market, without the prior written
        consent of such Investor, except to the extent such disclosure is required
        by
        law or Trading Market regulations, in which case the Company shall provide
        the
        Investors with prior notice of such disclosure.

       

      4.8 Reimbursement.
        If any Investor becomes involved in any capacity in any Proceeding by or
        against
        any Person who is a stockholder of the Company (except as a result of sales,
        pledges, margin sales and similar transactions by such Investor to or with
        any
        current stockholder), solely as a result of such Investor’s acquisition of the
        Securities under this Agreement, the Company will reimburse such Investor
        for
        its reasonable legal and other expenses (including the reasonable cost of
        any
        investigation preparation and travel in connection therewith) incurred in
        connection therewith, as such expenses are incurred. The reimbursement
        obligations of the Company under this paragraph shall be in addition to any
        liability which the Company may otherwise have, shall extend upon the same
        terms
        and conditions to any Affiliates of the Investor who are actually named in
        such
        action, proceeding or investigation, and partners, directors, agents, employees
        and controlling persons (if any), as the case may be, of the Investor and
        any
        such Affiliate, and shall be binding upon and inure to the benefit of any
        successors, assigns, heirs and personal representatives of the Company, the
        Investor and any such Affiliate and any such Person. The Company also agrees
        that neither the Investor nor any such Affiliates, partners, directors, agents,
        employees or controlling persons shall have any liability to the Company
        or any
        Person asserting claims on behalf of or in right of the Company solely as
        a
        result of acquiring the Securities under this Agreement. Notwithstanding
        anything contained in this Section 4.8 to the contrary, the Company shall
        not be
        obligated to reimburse any Investor who becomes involved in a Proceeding
        arising
        from a Person who is directly or indirectly an investor, partner or equityholder
        in the Investor in such Person’s capacity as such an investor, partner or
        equityholder, or arising in relation to any Investor’s power or authority to
        make an investment in the Company. 

      

      4.9 Indemnification
        of Investors.
        In
        addition to the indemnity provided in the Registration Rights Agreement,
        the
        Company will indemnify and hold the Investors and their directors, officers,
        shareholders, partners, employees and agents (each, an "Investor
        Party")
        harmless from any and all losses, liabilities, obligations, claims,
        contingencies, damages, costs and expenses, including all judgments, amounts
        paid in settlements, court costs and reasonable attorneys' fees and costs
        of
        investigation (collectively, "Losses")
        that
        any such Investor Party may suffer or incur as a result of or relating to
        any
        misrepresentation, breach or inaccuracy of any representation, warranty,
        covenant or agreement made by the Company in any Transaction Document. In
        addition to the indemnity contained herein, the Company will reimburse each
        Investor Party for its reasonable legal and other expenses (including the
        cost
        of any investigation, preparation and travel in connection therewith) incurred
        in connection therewith, as such expenses are incurred. 

       

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

       

      4.11 Use
        of
        Proceeds.
        The net
        proceeds from the offer and sale of the Securities will be used to advance
        the
        pre-clinical and clinical development of the Company’s drug candidates,
        including the hiring of contract research organizations and sponsoring of
        research to support these development activities, to fund expenses relating
        to
        the submission of a New Drug Application for orBec® with the FDA to fund sales
        and marketing and research and development expenses relating to orBec®, to fund
        future acquisitions or joint ventures or and to fund the development of new
        products or technologies. A portion of the net proceeds shall also be used
        for
        general corporate purposes, including the maintenance of in-licensed patent
        rights and proprietary intellectual property patent applications and patents.
        No
        portion of the net proceeds will be used to redeem outstanding securities
        of the
        Company. 

       

      4.12 No
        Short Sales.
        Each
        Investor covenants that neither it nor any Affiliates acting on its behalf
        or
        pursuant to any understanding with it will execute any Short Sales during
        the
        period from the Discussion Time until prior to the time that the transactions
        contemplated by this Agreement are first publicly announced as described
        in
        Section 4.7 hereof. Additionally, each Investor understands and acknowledges,
        severally and not jointly with any other Investor, that the Commission currently
        takes the position that coverage of short sales of the Common Stock
“against
        the box”
prior
        to the Effective Date of the Registration Statement with the Warrant Shares
        issuable hereunder is a violation of Section 5 of the Securities Act, as
        set
        forth in Item 65, Section 5 under Section A, of the Manual of Publicly Available
        Telephone Interpretations, dated July 1997, compiled by the Office of Chief
        Counsel, Division of Corporation Finance. 

       

      ARTICLE
        V.  

      CONDITIONS
        PRECEDENT

       

      5.1  Conditions
        Precedent to the Obligations of the Investors to Purchase
        Securities.
        The
        obligation of each Investor to acquire Securities at the Closing is subject
        to
        the satisfaction or waiver by such Investor, at or before the Closing, of
        each
        of the following conditions:

       

      (a)  Representations
        and Warranties.
        The
        representations and warranties of the Company contained herein shall be true
        and
        correct in all material respects as of the date when made and as of the Closing
        as though made on and as of such date;

       

      (b)  Performance.
        The
        Company shall have performed, satisfied and complied in all material respects
        with all covenants, agreements and conditions required by the Transaction
        Documents to be performed, satisfied or complied with by it at or prior to
        the
        Closing;

       

      (c)  No
        Injunction.
        No
        statute, rule, regulation, executive order, decree, ruling or injunction
        shall
        have been enacted, entered, promulgated or endorsed by any court or governmental
        authority of competent jurisdiction that prohibits the consummation of any
        of
        the transactions contemplated by the Transaction Documents;

       

      (d)  Adverse
        Changes.
        Since
        the date of execution of this Agreement, no event or series of events shall
        have
        occurred that reasonably would be expected to have or result in a (i) an
        adverse effect on the legality, validity or enforceability of any Transaction
        Document, or (ii) a material and adverse effect on the results of operations,
        assets, business or condition (financial or otherwise) of the Company and
        the
        Subsidiaries, taken as a whole; 

       

      (e)  No
        Suspensions of Trading in Common Stock; Listing.
        Trading
        in the Common Stock shall not have been suspended by the Commission (except
        for
        any suspensions of trading of not more than one Trading Day solely to permit
        dissemination of material information regarding the Company) at any time
        since
        the date of execution of this Agreement, and the Common Stock shall have
        been at
        all times since such date listed for trading on a Trading Market; 

       

      (f)  Company
        Deliverables
        The
        Company shall have delivered to such Investor the Company Deliverables;
        and

       

      (g)  Minimum
        Subscriptions.
        The
        aggregate of the Investors’ Investment Amount shall not be less than
        $2,500,000.

       

      5.2  Conditions
        Precedent to the Obligations of the Company to sell Securities.
        The
        obligation of the Company to sell Securities at the Closing is subject to
        the
        satisfaction or waiver by the Company, at or before the Closing, of each
        of the
        following conditions:

       

      (a)  Representations
        and Warranties.
        The
        representations and warranties of each Investor contained herein shall be
        true
        and correct in all material respects as of the date when made and as of the
        Closing Date as though made on and as of such date;

       

      (b)  Performance.
        Each
        Investor shall have performed, satisfied and complied in all material respects
        with all covenants, agreements and conditions required by the Transaction
        Documents to be performed, satisfied or complied with by such Investor at
        or
        prior to the Closing;

       

      (c)  No
        Injunction.
        No
        statute, rule, regulation, executive order, decree, ruling or injunction
        shall
        have been enacted, entered, promulgated or endorsed by any court or governmental
        authority of competent jurisdiction that prohibits the consummation of any
        of
        the transactions contemplated by the Transaction Documents; and

       

      (d)  Minimum
        Subscriptions.
        The
        aggregate of the Investors’ Investment Amounts shall not be less than $2,500,000
        at the Closing. 

       

      ARTICLE
        VI.

       

        COMMON
        STOCK ANTI-DILUTION RIGHTS

       

      6.1 Common
        Stock Anti-Dilution Rights.
        The
        Investors shall have the following rights with respect to sales of New Issue
        Securities. Each Investors’ rights under this Article VI shall terminate on the
        earlier to occur of (i) the one year anniversary of the Closing and (ii)
        the
        date that the FDA approves the New Drug Application for orBec®.

      

      6.2 Adjustment
        of Investors Price.
        Subject
        to Section 6.1 hereof, if and whenever on or after the date of this Agreement
        the Company issues or sells any New Issue Securities for a consideration
        per
        share less than the Per Unit Purchase Price in effect immediately prior to
        the
        time of such issue or sale, then and in each case the then existing Per Unit
        Purchase Price shall be reduced, as of the close of business on the date
        of such
        issue or sale, to the price per share paid for the New Issue
        Securities.

      

      6.3 Notices.
        Immediately upon any adjustment of the Per Unit Purchase Price, the Company
        shall give written notice thereof to the Investors (i) setting forth in
        reasonable detail and certifying the calculation of such adjustment and (ii)
        fixing a date for the delivery (the “Delivery
        Date”)
        to the
        Investors of the number of additional shares of Common Stock calculated in
        accordance with Section 6.4(a) below (the “Additional
        Shares”).

      

      6.4 Delivery
        of Shares.

      

      (a) Calculation
        of Number of Additional Shares.
        In the
        event of an adjustment to the applicable Per Unit Purchase Price, the Company
        shall issue to each Investor on the Delivery Date, that number of Additional
        Shares equal to (i) the number of Shares then held by such Investor multiplied
        by a fraction, the numerator of which is the Per Unit Purchase Price immediately
        preceding the issuance of New Issue Securities and the denominator of which
        is
        the Per Unit Purchase Price of the New Issue Securities, minus (ii) the number
        of Shares held by the Investor immediately preceding the issuance of the
        New
        Issue Securities.

      

      (b) Delivery
        of Additional Shares.
        On the
        Delivery Date, the Company shall cause to be delivered to each Investor a
        certificate or certificates for the appropriate number of Additional Shares.
        The
        Company, however, will not be obligated to deliver Additional Shares to a
        Common
        Holder if (i) the Investor elects not to take delivery of such Additional
        Shares
        or (ii) the total number of shares of Common Stock then beneficially owned
        by
        such Investors and their affiliates and any other persons whose beneficial
        ownership of Common Stock would be aggregated with the Investor’s for purposes
        of Section 13(d) of the Exchange Act, would exceed 9.999% of the total number
        of
        issued and outstanding shares of Common Stock or (iii) at any time the Board
        shall determine in its discretion (based on a written opinion of counsel
        (a copy
        of which must be provided to the Investors)) that the issuance and sale of
        the
        Additional Shares to the Investors would cause the Company to violate any
        provision of the Securities Act, the securities laws of any state or any
        other
        law; provided, however, that in each such case the Company will issue to
        each
        Investor Common Stock purchase warrants to purchase the appropriate number
        of
        Additional Shares at an exercise price of $0.01 per share for a period of
        five
        years from the date of issuance.

      

      6.5 Issuance
        of Preferred Stock.
        Notwithstanding anything else contained in this Article VI to the contrary,
        if
        the Company, at any time prior to earlier of (i) the one year anniversary
        of the
        Closing and (ii) the date that the FDA approves the New Drug Application
        for
        orBec®, sells its preferred stock for a consideration per share less than the
        Per Unit Purchase Price paid by the Investors at the Closing, the Company
        shall
        immediately provide written notice thereof (“Preferred
        Stock Notice”)
        to all
        of the Investors and offer to exchange, in it sole discretion, an equal number
        of shares of such preferred stock for the Shares then owned by each of the
        Investors. Each Investor shall have thirty (30) days from the date of the
        Preferred Stock Notice to accept or reject the exchange of preferred stock
        for
        the Shares. If an Investor does not deliver a written notice to the Company
        accepting such exchange within such thirty (30) day period, then such Investor
        shall be deemed to have rejected such offer to exchange preferred stock for
        the
        Investor’s Shares. Each Investor desiring to exchange its Shares for the
        preferred shares should so notify the Company in writing (“Acceptance
        Notice”)
        within
        such thirty (30) days and include with such notice such Investor’s Shares duly
        endorsed in blank. Within five (5) Business Days of the Company’s receipt of the
        Acceptance Notice, the Company shall issue to such Investor a stock certificate
        for the preferred stock covering an equivalent number of the Shares then
        owned
        by such Investor or a debenture in an amount equal to the closing price of
        the
        Common Stock on the date of the Preferred Stock Notice multiplied by the
        number
        of Shares held by each such Investor. It is understood and agreed by the
        parties
        hereto that such shares of preferred stock shall not be covered by the
        Registration Rights Agreement.

       

      6.6 Exclusion.
        The
        provisions of Article VI hereof shall not apply (i) in connection with any
        employee benefit plan which has been approved by the Board of Directors of
        the
        Company, pursuant to which the Company’s securities may be issued to any
        employee, officer, director or consultant for services provided to the Company
        or any of its subsidiaries, or pursuant to the exercise of any securities
        of the
        Company issued thereunder; (ii) pursuant to a bona fide firm commitment
        underwritten public offering with a nationally recognized underwriter which
        generates gross proceeds to the Company in excess of $15 million; (iii) upon
        conversion of any options, warrants or other rights to acquire shares of
        Common
        Stock that are outstanding on the day immediately preceding the Closing,
        provided, however, that the terms of such options, warrants or rights are
        not
        amended, modified or changed on or after the Closing; or (iv) in connection
        with
        shares of Common Stock issued as consideration for the acquisition of another
        company or business in which the shareholders of the Company do not have
        a
        majority ownership interest, which acquisition has been approved by the Board
        of
        Directors of the Company. 

       

      

      ARTICLE
        VII.

      MISCELLANEOUS

       

      7.1 Fees
        and Expenses.
        Except
        for the Company's payment of $10,000 to Iroquois Capital as a lead investor
        fee,
        each party shall pay the fees and expenses of its advisers, counsel, accountants
        and other experts, if any, and all other expenses incurred by such party
        incident to the negotiation, preparation, execution, delivery and performance
        of
        the Transaction Documents. The Company shall pay all stamp and other taxes
        and
        duties levied in connection with the sale of the Securities.

       

      7.2 Entire
        Agreement.
        The
        Transaction Documents, together with the Exhibits and Schedules thereto,
        contain
        the entire understanding of the parties with respect to the subject matter
        hereof and supersede all prior agreements, understandings, discussions and
        representations, oral or written, with respect to such matters, which the
        parties acknowledge have been merged into such documents, exhibits and
        schedules. 

       

      7.3 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 (provided the sender receives a machine-generated
        confirmation of successful transmission) 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: DOR
        BioPharma Inc.

      1691
        Michigan Ave.

      Suite
        435

      Miami,
        Florida 33139

      Attn:
        President

      Facsimile:
        (305) 534-3383

      

      With
        a
        copy to: Edwards
        Angell Palmer & Dodge LLP

      350
        E.
        Las Olas Boulevard

      Suite
        1150

      Fort
        Lauderdale, FL 33301-4215

      Attn:
        Leslie J. Croland, P.A.

      Facsimile:
        (954)
        727-2601

      

      If
        to an
        Investor: To
        the
        address set forth under such Investor's name

      on
        the
        signature pages hereof;

       

       

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

       

      7.4 Amendments;
        Waivers; No Additional Consideration.
        No
        provision of this Agreement may be waived or amended except in a written
        instrument signed by the Company and the Investors holding at least 65% of
        the
        Shares. 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. No consideration shall be offered or paid to any Investor to amend
        or
        consent to a waiver or modification of any provision of any Transaction Document
        unless the same consideration is also offered to all Investors who then hold
        Securities.

       

      7.5 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 or any of the Transaction
        Documents.

       

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

       

      7.7 No
        Third-Party Beneficiaries.
        This
        Agreement is intended for the benefit of the parties hereto and their respective
        successors and permitted assigns and is not for the benefit of, nor may any
        provision hereof be enforced by, any other Person, except as otherwise set
        forth
        in Section 4.7 (as to each Investor Party).

       

      7.8 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 and any other Transaction Documents (whether
        brought against a party hereto or its respective Affiliates, employees or
        agents) may 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
        (including with respect to the enforcement of the any of the Transaction
        Documents), 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 a Transaction Document, then the prevailing party
        in
        such Proceeding shall be reimbursed by the other party for its reasonable
        attorneys’ fees and other costs and expenses incurred with the investigation,
        preparation and prosecution of such Proceeding.

       

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

       

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

       

      7.11 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.

       

      7.12 Rescission
        and Withdrawal Right.
        Notwithstanding anything to the contrary contained in (and without limiting
        any
        similar provisions of) the Transaction Documents, whenever any Investor
        exercises a right, election, demand or option under a Transaction Document
        and
        the Company does not timely perform its related obligations within the periods
        therein provided, then such Investor may rescind or withdraw, in its sole
        discretion from time to time upon written notice to the Company, any relevant
        notice, demand or election in whole or in part without prejudice to its future
        actions and rights.

       

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

       

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

       

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

       

      7.16 Independent
        Nature of Investors' Obligations and Rights.
        The
        obligations of each Investor under any Transaction Document are several and
        not
        joint with the obligations of any other Investor, and no Investor shall be
        responsible in any way for the performance of the obligations of any other
        Investor under any Transaction Document. The decision of each Investor to
        purchase Securities pursuant to the Transaction Documents has been made by
        such
        Investor independently of any other Investor. Nothing contained herein or
        in any
        Transaction Document, and no action taken by any Investor pursuant thereto,
        shall be deemed to constitute the Investors as a partnership, an association,
        a
        joint venture or any other kind of entity, or create a presumption that the
        Investors are in any way acting in concert or as a group with respect to
        such
        obligations or the transactions contemplated by the Transaction Document.
        Each
        Investor acknowledges that no other Investor has acted as agent for such
        Investor in connection with making its investment hereunder and that no Investor
        will be acting as agent of such Investor in connection with monitoring its
        investment in the Securities or enforcing its rights under the Transaction
        Documents. Each Investor shall be entitled to independently protect and enforce
        its rights, including without limitation the rights arising out of this
        Agreement or out of the other Transaction Documents, and it shall not be
        necessary for any other Investor to be joined as an additional party in any
        proceeding for such purpose. The Company acknowledges that each of the Investors
        has been provided with the same Transaction Documents for the purpose of
        closing
        a transaction with multiple Investors and not because it was required or
        requested to do so by any Investor.

       

      

       

      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.

       

      DOR
        BIOPHARMA, INC.

       

      By:
        /s/ Michael T. Sember    

      Name:
        Michael T. Sember

      Title:
        President & Chief Executive Officer

       

      [REMAINDER
        OF PAGE INTENTIONALLY LEFT BLANK

       

      SIGNATURE
        PAGES FOR INVESTORS FOLLOW]

       

      
        

      

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

       

      
        

[INVESTOR]

      

      Iroquois
        Master Fund Ltd.

      

      By:
        /s/
        Joshua Silverman

      Name:
        Joshua Silverman

      Title:
        Authorized Signatory

      

      
        	 	
                Investment
                  Amount:                                      
                   

              	
                 

                $700,000

              

      

      

      
        	 	
                Address for
                  Notice:                                          
                  

              	
                 

                641
                  Lexington Ave.,

              

      

      26th
        Floor

      New
        York,
        NY 10022

      

      
        

      

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

       

      
        

[INVESTOR]

      

      Platinum
        Partners Long Term Growth III

      

      By:
        /s/
        Mark Norducht

      Name:
        Mark Norducht

      Title:
        President

      

      
        	 	
                Investment
                  Amount:                                             
                  

              	
                 

                $600,000

              

      

      

      Address
        for Notice:     
152
        West
        57th
        Street 

            
        54th
        Floor

             
        New York, NY 10019

      

      

      

      
        

      

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

       

      
        

[INVESTOR]

      

      Alpha
        Capital AG/CO LH Financial

      

      By:
        /s/
        Konrad Ackermann

      Name:
        Konrad Ackermann

      Title:
        Director

      

      
        	 	
                Investment
                  Amount:                                       
                  

              	
                 

                $500,000

              

      

      

      
        	 	
                Address for 
                  Notice:                                          
                  

              	
                 

                160
                  Central Park South,

              

      

      Suite
        2701

      New
        York,
        NY 10019

       

       

      
 

      

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

       

      
        

[INVESTOR]

      

      Cyrille
        F. Buhrman

      

      By:
        /s/
        Cyrille F. Buhrman

      Name:
        Cyrille F. Buhrman

      Title:
        Authorized Signatory

      

      
        	 	
                Investment
                  Amount:                              
                  

              	
                 

                $500,000

              

      

      

      
        	 	
                Address
                  for
                  Notice:                                 
                  

              	
                 

                 

                229/1
                  South Sathorn Road,

              

                                                                                                                     
        Bangkok, 10120 Thailand

      

       

       

      
        

      

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

       

      
        

[INVESTOR]

      

      Nite
        Capital, LP

      

      By:
        /s/
        Keith Goodman

      Name:
        Keith Goodman

      Title:
        Manager of the General Partner

      

      
        	 	
                Investment
                  Amount:                               
                  

              	
                 

                $400,000

              

      

      

      
        	 	
                Address
                  for
                  Notice:                                   

              	
                 

                 

                 100
                  E Cook Ave.

              

      

                                                                                                                              
        Suite 201

                              
        Libertyville, IL 60048

      

      

      
        

      

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

       

      
        

[INVESTOR]

      

      Smithfield
        Fiduciary LLC

      Highbridge
        Capital Management, LLC

      

      By:
        /s/
        Adam J. Chill

      Name:
        Adam J. Chill

      Title:
        Authorized Signatory

      

      
        	 	
                Investment
                  Amount:                            
                  

              	
                 

                $300,000

              

      

      

      
        	 	
                Address
                  for
                  Notice:                               
                  

              	
                 

                 

                9
                  West 57th
                  Street,

              

      

                                                                                                                         
        27th
        Floor

                                                                                                                         
New
        York, NY 10019

      

      
        

      

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

       

      
        

[INVESTOR]

      

      Little
        Gem Life Sciences Fund, LLC

      

      By:
        /s/
        Jeffrey Benison

      Name:
        Jeffrey Benison

      Title:
        Manager

      

      
        	 	
                Investment
                  Amount:                                
                  

              	
                 

                $100,000

              

      

      

      
        	 	
                Address
                  for
                  Notice:                                  
                  

              	
                 

                 

                57
                  Flowery Road,

              

                                                                                                                      
        Valley Stream, NY 11581

      

      
        

      

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

       

      
        

[INVESTOR]

      

      Ed
        Burke

      

      By:
        /s/
        Ed
        Burke

      Name:
        Ed
        Burke

      Title:
        Authorized Signatory

      

      
        	 	
                Investment
                  Amount:                         
                  

              	
                 

                $100,000

              

      

      

      
        	 	
                Address
                  for
                  Notice:                            
                  

              	
                 

                 

                400
                  9th
                  Street

              

      

                                                                                                                       #W4F

                                                                                                                      
Hoboken,
        NJ 07030

      
        

      

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

       

      
        

[INVESTOR]

      

      Bristol
        Capital Advisors, LLC

      

      By:
        /s/
        Paul Kessler

      Name:
        Paul Kessler

      Title:
        Director

      

      
        	 	
                Investment
                  Amount:                                     
                  

              	
                 

                $250,000

              

      

      

      
        	 	
                Address
                  for
                  Notice:                                        
                  

              	
                 

                 

                10990
                  Wilshire Blvd.,

              

      

                                                                                                                                  
        Suite 1410

                                                                                                                                  
Los
        Angeles, CA 90024

      

      
        

      

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

       

      
        

[INVESTOR]

      

      Steven
        Mark

      

      By:
        /s/
        Steven Mark

      Name:
        Steven Mark

      Title:
        Authorized Signatory

      

      
        	 	
                Investment
                  Amount:                                 
                  

              	
                 

                $25,000

              

      

      

      
        	 	
                Address
                  for
                  Notice:                                    
                  

              	
                 

                 

                101
                  Narrows Road

              

                                                                                                                        
        Bedford Hills, NY 10507

      

      
        

      

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

       

      
        

[INVESTOR]

      

      Vasili
        Myrianthopoulos

      

      By:
        /s/
        Vasili Myrianthopoulos

      Name:
        Vasili Myrianthopoulos

      Title:
        Authorized Signatory

      

      
        	 	
                Investment
                  Amount:                              
                  

              	
                 

                $20,000

              

      

      

      
        	 	
                Address
                  for
                  Notice:                                 
                  

              	
                 

                 

                545
                  South 8th
                  Street

              

                                                                                                                     
        Lindenhurst, NY 11757

      

      

      
        

      

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

       

      
        

[INVESTOR]

      

      Ken
        Alberstadt

      

      By:
        /s/
        Ken Alberstadt

      Name:
        Ken
        Alberstadt

      Title:
        Authorized Signatory

      

      
        	 	
                Investment
                  Amount:                                  
                  

              	
                 

                $10,000

              

      

      

      
        	 	
                Address
                  for
                  Notice:                                    
                  

              	
                 

                 

                3P
                  E. 85th
                  Street

              

                                                                                                                         New
        York, NY 10028

      

      

      
        

      

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

       

      
        

[INVESTOR]

      

      David
        Gentile

      

      By:
        /s/
        David Gentile

      Name:
        David Gentile

      Title:
        Authorized Signatory

      

      
        	 	
                Investment
                  Amount:                                  
                  

              	
                $16,666

              

      

      

      Address
        for Notice:   
7
        Plymouth Road

                                                         
        Manhasset,
        NY 11030

      
        

      

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

       

      
        

[INVESTOR]

      

      Bernard
        Pismeny

      

      By:
        /s/
        Bernard Pismeny

      Name:
        Bernard Pismeny

      Title:
        Authorized Signatory

      

      
        	 	
                Investment
                  Amount:                                       
                  

              	
                $16,667

              

      

      

      Address
        for Notice:     159
        Northern Blvd.

      Great
        Neck, NY 11021

      

      
        

      

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

       

      
        

[INVESTOR]

      

      Kyle
        Brengel

      

      By:
        /s/
        Kyle Brengel

      Name:
        Kyle
        Brengel

      Title:
        Authorized Signatory

      

      
        	 	
                Investment
                  Amount:                               
                  

              	
                $16,667

              

      

      

      Address
        for Notice:  
2645
        Ramona

                                                    
        East
        Meadow, NY 11554

      
        

      

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

       

      
        

[INVESTOR]

      

      Michael
        T. Sember

      

      By:
        /s/
        Michael T. Sember

      Name:
        Michael T. Sember

      Title:
        Authorized Signatory

      

      
        	 	
                Investment
                  Amount:                            
                  

              	
                 

                $75,000

              

      

      

      
        	 	
                Address
                  for
                  Notice:                               
                  

              	
                 

                 

                1691
                  Michigan Ave

              

      

                                                                                                                        
        Suite 435

                                                                                                                        
Miami,
        FL
        33139

      
        

      

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

       

      
        

[INVESTOR]

      

      Evan
        Myrianthopoulos

      

      By:
        /s/
        Evan Myrianthopoulos

      Name:
        Evan
        Myrianthopoulos

      Title:
        Authorized Signatory

      

      
        	 	
                Investment
                  Amount:                          
                  

              	
                 

                $25,000

              

      

      

      
        	 	
                Address
                  for
                  Notice:                              
                  

              	
                 

                 

                1691
                  Michigan Ave

              

      

                                                                                                                        
        Suite 435

                                                                                                                        
Miami,
        FL
        33139

      

      
        

      

      SCHEDULE
        1

      

      
        	
                Investor

              	
                Shares

              	
                Warrants

              	
                Indication

              
	
                Iroqouis
                  Master Fund LTD

              	
                2,526,164

              	
                2,526,164

              	
                $
                  700,000

              
	
                Platinum
                  Partners Long Term Growth III

              	
                2,165,283

              	
                2,165,283

              	
                $
                  600,000

              
	
                Alpha
                  Capital AG/CO LH Financial

              	
                1,804,403

              	
                1,804,403

              	
                $
                  500,000

              
	
                Smithfield
                  Fiduciary LLC Highbridge Capital Management, LLC

              	
                1,082,642

              	
                1,082,642

              	
                $
                  300,000

              
	
                Nite
                  Capital, LP

              	
                1,443,522

              	
                1,443,522

              	
                $
                  400,000

              
	
                Cyrille
                  F. Buhrman

              	
                1,804,403

              	
                1,804,403

              	
                $
                  500,000

              
	
                Ed
                  Burke

              	
                360,881

              	
                360,881

              	
                $
                  100,000

              
	
                Little
                  Gem Life Sceinces Fund, LLC

              	
                360,881

              	
                360,881

              	
                $
                  100,000

              
	
                Steven
                  Mark

              	
                90,220

              	
                90,220

              	
                $
                  25,000

              
	
                Vasili
                  Myrianthopoulos

              	
                72,176

              	
                72,176

              	
                $
                  20,000

              
	
                Ken
                  Alberstadt

              	
                36,088

              	
                36,088

              	
                $
                  10,000

              
	
                Evan
                  Myrianthopoulos

              	
                90,220

              	
                90,220

              	
                $
                  25,000

              
	
                Michael
                  T. Sember

              	
                270,660

              	
                270,660

              	
                $
                  75,000

              
	
                David
                  Gentile

              	
                60,144

              	
                60,144

              	
                $
                  16,666

              
	
                Bernard
                  Pismeny

              	
                60,148

              	
                60,148

              	
                $
                  16,667

              
	
                Kyle
                  Brengel

              	
                60,148

              	
                60,148

              	
                $
                  16,667

              
	
                Bristol
                  Capitol Advisors, LLC

              	
                902,201

              	
                902,201

              	
                $
                  250,000

              
	 	 	 	 
	 	
                13,190,184

              	
                13,190,184

              	
                $
                  3,655,000

              

      

       

      
        
          

        

      

      SCHEDULE
        3.1(a)

      

      

      Enteron
        Pharmaceuticals, Inc - The Company owns 89.13% of the issued and outstanding
        shares of such Subsidiary’s common stock.

      

      Corporate
        Technology Development, Inc. - The Company owns 100% of the issued and
        outstanding shares of such Subsidiary’s common stock.

      

      Oral
        Solutions, Inc. - The Company owns 85% of the issued and outstanding shares
        of
        such Subsidiary’s common stock.

      

      Formulation
        Technologies, Inc. - The Company owns 100% of the issued and outstanding
        shares
        of such Subsidiary’s common stock.

      

      Intero
        Corp. - The Company owns 100% of the issued and outstanding shares of such
        Subsidiary’s common stock.

      

      Magyer
        Pharmaceuticals - The Company owns 100% of the issued and outstanding shares
        of
        such Subsidiary’s common stock.

      

      Rx
        Eyes,
        Inc. - The Company owns 80% of the issued and outstanding shares of such
        Subsidiary’s common stock.

      

      Orasomal
        Technologies, Inc. - The Company owns 75.3% of the issued and outstanding
        shares
        of such Subsidiary’s common stock.

      

      Wisconsin
        Genetics, Inc. - The Company owns 100% of the issued and outstanding shares
        of
        such Subsidiary’s common stock.

      

      Innovaccines
        Corp. - The Company owns 100% of the issued and outstanding shares of such
        Subsidiary’s common stock.

      

      Endorex
        Newco, LTD - The Company owns 80.1% of the issued and outstanding shares
        of such
        Subsidiary’s common stock.

      

      Institute
        for Drug Research, Inc. - The Company owns 100% of the issued and outstanding
        shares of such Subsidiary’s common stock.

      
        
          -
            -PMB_PMB_297638_3.DOC/LCROLAND

          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      SCHEDULE
        3.1(j)

      

      The
        Company did not renew its letter of intent with Gastrotech Pharma A/S
        (“Gastrotech”) dated October 28, 2005, as amended on December 29, 2005. The
        Company has taken the position that the letter of intent expired in accordance
        with its terms on January 15, 2006. Gastrotech may take the position that
        the
        Company is in material breach of its obligations under the letter of intent
        and
        is obligated to pay Gastrotech a break-up fee of $1 million. It is the Company’s
        position that it does not owe Gastrotech such break-up fee. 

      
        
          -
            -PMB_PMB_297638_3.DOC/LCROLAND

          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      SCHEDULE
        3.1(q)

      

      The
        Company intends to merge its subsidiary, Enteron Pharmaceuticals, Inc. into
        a
        wholly-owned subsidiary of the Company. Pursuant to this transaction, the
        Company will issue 3,069,386 shares of Common Stock to the former shareholders
        of Enteron. 

      
        
          -
            -PMB_PMB_297638_3.DOC/LCROLAND

          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      SCHEDULE
        3.1(u)

      

      Current
        shareholders of Enteron Pharmaceuticals, Inc. who will, in connection with
        a
        merger, be exchanging their shares of Enteron Pharmaceuticals, Inc. for Common
        Stock will have piggyback registration rights for 3,069,386 shares of Common
        Stock.DOR Warrant Purchase Document

    

      

      

      

      THE
        SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT
        AND
        HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
        “ACT”), OR ANY STATE SECURITIES LAW. SUCH SECURITIES MAY NOT BE SOLD OR
        TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH SALE OR TRANSFER
        IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF THE
        ACT
        OR THE ISSUER HAS RECEIVED AN OPINION OF COUNSEL IN FORM AND SUBSTANCE
        REASONABLY ACCEPTABLE TO THE ISSUER THAT REGISTRATION IS NOT REQUIRED UNDER
        THE
        ACT OR APPLICABLE STATE SECURITIES LAWS.
        THESE
        SECURITIES AND THE SECURITIES ISSUABLE UPON EXERCISE OF THESE SECURITIES
        MAY BE
        PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT SECURED BY SUCH
        SECURITIES.

      

      

      DOR
        BIOPHARMA, INC.

      

      

      Warrant
        for the Purchase of Shares of

      Common
        Stock

      

      No.         [_____] Shares

      Original
        Issue Date [ ],
        2006

      

      

      FOR
        VALUE
        RECEIVED, DOR BIOPHARMA, INC., a Delaware corporation (the "Company"),
        hereby certifies that [____________________],
        is
        entitled to purchase from the Company, at any time or from time to time
        commencing on the Original Issue Date and expiring at 5:00 P.M., New York
        City
        time, on the third (3rd) anniversary of the Original Issue Date (as such
        date
        may be changed pursuant to Section 2 hereof, the “Expiration
        Date”)
        ________
        1 
        fully
        paid and non-assessable shares of Common Stock, par value $.001 per share,
        of
        the Company (the “Warrant
        Shares”)
        for a
        per share exercise price of $0.45 (the “Per
        Share Warrant Price”).
        The
        Per Share Warrant Price is subject to adjustment as hereinafter provided.
        Capitalized terms used and not otherwise defined in this Warrant shall have
        the
        meanings specified in Section 9, unless the context otherwise
        requires.

      

      1. Exercise
        of Warrant.
        

      

      (a) This
        Warrant may be exercised, in whole at any time or in part from time to time,
        commencing on the Original Issue Date and expiring at 5:00 P.M., New York
        City
        time, on the Expiration Date (with the Exercise Notice at the end of this
        Warrant duly executed) at the address set forth in Section 10 hereof, together
        with payment of the Per Share Warrant Price multiplied by the number of Warrant
        Shares to which such exercise relates made by delivery to the Company of
        one or
        more types of Permitted Consideration.

      

       

      (b) If
        this
        Warrant is exercised in part, the Company will deliver to the Holder within
        three Trading Days of the date such Holder delivers to the Company this Warrant
        and an Exercise Notice, together with the payment of the aggregate Per Share
        Warrant Price for such exercise, a new Warrant covering the Warrant Shares
        that
        have not been exercised. By the expiration of the third Trading Day following
        the Holder’s delivery of a Warrant, together with an Exercise Notice and the
        payment of the aggregate Per Share Warrant Price for such exercise, the Company
        will (i) issue a certificate or certificates in the name of the Holder for
        the
        largest number of whole shares of the Common Stock to which the Holder shall
        be
        entitled and, if this Warrant is exercised in whole, in lieu of any fractional
        share of the Common Stock to which the Holder shall be entitled, pay to the
        Holder cash in an amount equal to the fair value of such fractional share
        (determined by reference to the closing sales price of the Common Stock on
        the
        date of the Exercise Notice), and (ii) deliver the other securities and
        properties receivable upon the exercise of this Warrant, or the proportionate
        part thereof if this Warrant is exercised in part, pursuant to the provisions
        of
        this Warrant.

      

      (c) If
        the
        registration statement for the Warrant Shares is not declared effective by
        the
        Commission by the first anniversary of the Closing Date, then notwithstanding
        anything contained herein to the contrary, the Holder may, at its election
        exercised in its sole discretion, exercise this Warrant in whole or in part
        and,
        in lieu of making a cash payment of Permitted Consideration, elect instead
        to
        receive upon such exercise the “Net Number” of shares of Common Stock determined
        according to the following formula:

      

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

      B

      For
        purposes of the foregoing formula:

      

      A=the
        total number of Warrant Shares with respect

      to
        which
        this Warrant is then being exercised.

      

      B=the
        average of the closing sales prices for the five

      Trading
        Days immediately prior to (but not including) 

      the
        day
        that the Holder delivers the Exercise Notice at issue.

      

      C=the
        Per
        Share Warrant Price.

      

      (d) If,
        by
        the third Trading Day after the date that the Holder delivers an Exercise
        Notice, together with the payment of the aggregate Per Share Warrant Price
        for
        such exercise, the Company fails to deliver the required number of Warrant
        Shares in the manner required pursuant to Section 1(b), then the Holder will
        have the right to rescind such exercise.

      

      (e) If,
        by
        the third Trading Day after the date that the Holder delivers an Exercise
        Notice, together with the payment of the aggregate Per Share Warrant Price
        for
        such exercise, the Company fails to deliver the required number of Warrant
        Shares in the manner required pursuant to Section 1(b), and if after such
        third
        Trading Day and prior to the receipt of such Warrant Shares, the Holder
        purchases (in an open market transaction or otherwise) shares of Common Stock
        to
        deliver in satisfaction of a sale by the Holder of the Warrant Shares which
        the
        Holder anticipated receiving upon such exercise (a "Buy-In"),
        then
        the Company shall (1) pay in cash to the Holder the amount by which (x) the
        Holder's total purchase price (including brokerage commissions, if any) for
        the
        shares of Common Stock so purchased exceeds (y) the amount obtained by
        multiplying (A) the number of Warrant Shares that the Company was required
        to
        deliver to the Holder in connection with the exercise at issue by (B) the
        closing bid price of the Common Stock at the time of the obligation giving
        rise
        to such purchase obligation and (2) at the option of the Holder, either
        reinstate the portion of the Warrant and equivalent number of Warrant Shares
        for
        which such exercise was not honored or deliver to the Holder the number of
        shares of Common Stock that would have been issued had the Company timely
        complied with its exercise and delivery obligations hereunder. The Holder
        shall
        provide the Company written notice indicating the amounts payable to the
        Holder
        in respect of the Buy-In.

      

      (f) Notwithstanding
        anything to the contrary contained herein, the number of shares of Common
        Stock
        that may be acquired by the Holder upon any exercise of this Warrant shall
        be
        limited to the extent necessary to insure that, following such exercise,
        the
        total number of shares of Common Stock then beneficially owned by such Holder
        and its affiliates and any other persons whose beneficial ownership of Common
        Stock would be aggregated with the Holder’s for purposes of Section 13(d) of the
        Exchange Act, does not exceed 4.999% of the total number of issued and
        outstanding shares of Common Stock (including for such purpose the shares
        of
        Common Stock issuable upon such exercise). For such purposes, beneficial
        ownership shall be determined in accordance with Section 13(d) of the Exchange
        Act and the rules and regulations promulgated thereunder. Each delivery of
        an
        Exercise Notice will constitute a representation by the Holder that it has
        evaluated the limitation set forth in this paragraph and determined that
        issuance of the full number of Warrant Shares requested in such Exercise
        Notice
        is permitted under this paragraph. This provision shall not restrict the
        number
        of shares of Common Stock that a Holder may receive or beneficially own in
        order
        to determine the amount of securities or other consideration that such Holder
        may receive in the event of a Fundamental Transaction as contemplated in
        Section
        3. By written notice to the Company, the Holder may waive the provisions
        of this
        Section but any such waiver will not be effective until the 61st day after
        such
        notice is delivered to the Company.

      

      (g) Notwithstanding
        anything to the contrary contained herein, the number of shares of Common
        Stock
        that may be acquired by the Holder upon any exercise of this Warrant (or
        otherwise in respect hereof) shall be limited to the extent necessary to
        insure
        that, following such exercise (or other issuance), the total number of shares
        of
        Common Stock then beneficially owned by such Holder and its affiliates and
        any
        other persons whose beneficial ownership of Common Stock would be aggregated
        with the Holder's for purposes of Section 13(d) of the Exchange Act, does
        not
        exceed 9.999% of the total number of issued and outstanding shares of Common
        Stock (including for such purpose the shares of Common Stock issuable upon
        such
        exercise). For such purposes, beneficial ownership shall be determined in
        accordance with Section 13(d) of the Exchange Act and the rules and regulations
        promulgated thereunder. Each delivery of an Exercise Notice will constitute
        a
        representation by the Holder that it has evaluated the limitation set forth
        in
        this paragraph and determined that issuance of the full number of Warrant
        Shares
        requested in such Exercise Notice is permitted under this paragraph. This
        provision shall not restrict the number of shares of Common Stock that a
        Holder
        may receive or beneficially own in order to determine the amount of securities
        or other consideration that such Holder may receive in the event of a
        Fundamental Transaction as contemplated in Section 3. This restriction may
        not
        be waived.

      

      2. Company’s
        Option to Change Expiration Date.
        

      

      Notwithstanding
        anything herein to the contrary, in the event that (i) the volume weighted
        average share price per share of Common Stock is in excess of $1.69 for twenty
        (20) consecutive Trading Days, (ii) the Warrant Shares are either registered
        for
        resale pursuant to an effective registration statement naming the Holder
        as a
        selling stockholder thereunder (and the prospectus thereunder is available
        for
        use by the Holder as to all then available Warrant Shares) or freely
        transferable without volume restrictions pursuant to Rule 144(k) promulgated
        under the Securities Act, as determined by counsel to the Company pursuant
        to a
        written opinion letter addressed and in form and substance reasonably acceptable
        to the Holder and the transfer agent for the Common Stock, during the entire
        twenty (20) Trading Day period referenced in (i) above through the expiration
        of
        the Call Date as set forth in the Company’s notice pursuant to this Section (the
“Call
        Condition Period”),
        and
        (iii) the Company shall have complied in all material respects with its
        obligations under this Warrant and under the Purchase Agreement and the Common
        Stock shall at all times be listed on the AMEX, New York Stock Exchange,
        the
        Nasdaq National Market, the Nasdaq Capital Market or the OTC Bulletin Board,
        then, subject to the conditions set forth in this Section, the Company may,
        in
        its sole discretion, elect to change the Expiration Date for the respective
        Warrant to 5:00 P.M., New York City time on the date that is thirty (30)
        days
        after written notice thereof (a “Call
        Notice”)
        is
        received by the Holder (the “Call
        Date”)
        at the
        address last shown on the records of the Company for the Holder or given
        by the
        Holder to the Company for the purpose of notice; provided, that the conditions
        to giving such notice must be in effect at all times during the Call Condition
        Period or any such notice shall be null and void. The Company and
        the Holder agree that, if and to the extent Section 1(f) or (g) of
        this Warrant would restrict the ability of the Holder to exercise this Warrant
        in the event of a delivery of a Call Notice, then notwithstanding anything
        to the contrary set forth in the Call Notice, the Call Notice shall be deemed
        automatically amended to apply only to such portion of this Warrant as may
        be exercised by the Holder by the Call Date in accordance with Section 1(f)
        and
        (g).  The Holder will promptly (and, in any event, prior to the Call Date)
        notify the Company in writing following receipt of a Call Notice
        if Section 1(f) or (g) would restrict its exercise of the Warrant,
        specifying therein the number of Warrant Shares so restricted.

      

      3. Certain
        Adjustments.
        The Per
        Share Warrant Price and number of Warrant Shares issuable upon exercise of
        this
        Warrant are subject to adjustment from time to time as set forth in this
        Section
        3.

      

      (a)
        If
        the Company, at any time while this Warrant is outstanding, (i) pays a stock
        dividend on its Common Stock or otherwise makes a distribution on any class
        of
        capital stock that is payable in shares of Common Stock, (ii) subdivides
        outstanding shares of Common Stock into a larger number of shares, or (iii)
        combines outstanding shares of Common Stock into a smaller number of shares,
        then in each such case the Per Share Warrant Price shall be multiplied by
        a
        fraction of which the numerator shall be the number of shares of Common Stock
        outstanding immediately before such event and of which the denominator shall
        be
        the number of shares of Common Stock outstanding immediately after such event.
        Any adjustment made pursuant to clause (i) of this paragraph shall become
        effective immediately after the record date for the determination of
        shareholders entitled to receive such dividend or distribution, and any
        adjustment pursuant to clause (ii) or (iii) of this paragraph shall become
        effective immediately after the effective date of such subdivision or
        combination.

      

      (b)
        If,
        at any time while this Warrant is outstanding, (1) the Company effects any
        merger or consolidation of the Company with or into another person, (2) the
        Company effects any sale of all or substantially all of its assets in one
        or a
        series of related transactions, (3) any tender offer or exchange offer (whether
        by the Company or another Person) is completed pursuant to which holders
        of
        Common Stock are permitted to tender or exchange their shares for other
        securities, cash or property, or (4) the Company effects any reclassification
        of
        the Common Stock or any compulsory share exchange pursuant to which the Common
        Stock is effectively converted into or exchanged for other securities, cash
        or
        property (in any such case, a "Fundamental
        Transaction"),
        then
        thereafter this Warrant shall represent the right to receive, upon exercise
        of
        this Warrant, the same amount and kind of securities, cash or property as
        it
        would have been entitled to receive upon the occurrence of such Fundamental
        Transaction if it had been, immediately prior to such Fundamental Transaction,
        the holder of the number of Warrant Shares then issuable upon exercise in
        full
        of this Warrant (the "Alternate
        Consideration").
        For
        purposes of any such exercise, the determination of the Per Share Warrant
        Price
        shall be appropriately adjusted to apply to such Alternate Consideration
        based
        on the amount of Alternate Consideration issuable in respect of one share
        of
        Common Stock in such Fundamental Transaction, and the Company shall apportion
        the Per Share Warrant Price among the Alternate Consideration in a reasonable
        manner reflecting the relative value of any different components of the
        Alternate Consideration. If holders of Common Stock are given any choice
        as to
        the securities, cash or property to be received in a Fundamental Transaction,
        then the Holder shall be given the same choice as to the Alternate Consideration
        it receives upon any exercise of this Warrant following such Fundamental
        Transaction. At the Holder's option and request, any successor to the Company
        or
        surviving entity (and, if an entity different from the successor or surviving
        entity, the entity whose capital stock or assets the Holders of Common Stock
        are
        entitled to receive as a result of such Fundamental Transaction) in such
        Fundamental Transaction shall, either (1) issue to the Holder a new warrant
        substantially in the form of this Warrant and consistent with the foregoing
        provisions and evidencing the Holder's right to purchase the Alternate
        Consideration for the aggregate Per Share Warrant Price upon exercise thereof,
        or (2) purchase the Warrant from the Holder for a purchase price, payable
        in
        cash within five trading days after such request (or, if later, on the effective
        date of the Fundamental Transaction), equal to the Black Scholes value of
        the
        remaining unexercised portion of this Warrant on the date of such request.
        The
        terms of any agreement pursuant to which a Fundamental Transaction is effected
        shall include terms requiring any such successor or surviving entity (and,
        if an
        entity different from the successor or surviving entity, the entity whose
        capital stock or assets the Holders of Common Stock are entitled to receive
        as a
        result of such Fundamental Transaction) to comply with the provisions of
        this
        paragraph (b) and insuring that the Warrant (or any such replacement security)
        will be similarly adjusted upon any subsequent transaction analogous to a
        Fundamental Transaction.

      

      (c)
        Except as set forth in Sections 3(d) and 3(e) hereof, if the Company at any
        time
        while this Warrant is outstanding, shall offer, sell, grant any option to
        purchase or offer, sell or grant any right to reprice its securities, or
        otherwise dispose of or issue (or announce any offer, sale, grant or any
        option
        to purchase or other disposition) any Common Stock or any securities of the
        Company which entitles the holder thereof to acquire Common Stock at any
        time,
        including without limitation, any debt, preferred stock, rights, options,
        warrants or other instrument that is at any time convertible into or
        exchangeable for, or otherwise entitles the holder thereof to receive, Common
        Stock or other securities that entitle the holder to receive, directly or
        indirectly, Common Stock (“Common
        Stock Equivalent”),
        at an
        effective price per share less than the then Per Share Warrant Price (such
        lower
        price, the “Base
        Share Price”
and
        such issuances collectively, a “Dilutive
        Issuance”),
        as
        adjusted hereunder (if the holder of the Common Stock or Common Stock
        Equivalents so issued shall at any time, whether by operation of purchase
        price
        adjustments, reset provisions, floating conversion, exercise or exchange
        prices
        or otherwise, or due to warrants, options or rights per share which is issued
        in
        connection with such issuance, be entitled to receive shares of Common Stock
        at
        an effective price per share which is less than the Per Share Warrant Price,
        such issuance shall be deemed to have occurred for less than the Per Share
        Warrant Price on such date of the Dilutive Issuance), then the Exercise Price
        shall be reduced to equal the Base Share Price. Such adjustment shall be
        made
        whenever such Common Stock or Common Stock Equivalents are issued. The Company
        shall notify the Holder in writing, no later than the Trading Day following
        the
        issuance of any Common Stock or Common Stock Equivalents subject to this
        section, indicating therein the applicable issuance price, or of applicable
        reset price, exchange price, conversion price and other pricing terms (such
        notice the “Dilutive
        Issuance Notice”).
        For
        purposes of clarification, whether or not the Company provides a Dilutive
        Issuance Notice pursuant to this Section 3(c), upon the occurrence of any
        Dilutive Issuance, after the date of such Dilutive Issuance the Holder is
        entitled to receive the Warrant Shares exercisable for the Base Share Price
        per
        share regardless of whether the Holder accurately refers to the Base Share
        Price
        in the Notice of Exercise. 

      

      (d) The
        provisions of Section 3(c) hereof shall not apply (i) in connection with
        any
        employee benefit plan which has been approved by the Board of Directors of
        the
        Company, pursuant to which the Company’s securities may be issued to any
        employee, officer, director or consultant for services provided to the Company
        or any of its subsidiaries, or pursuant to the exercise of any securities
        of the
        Company issued thereunder; (ii) pursuant to a bona fide firm commitment
        underwritten public offering with a nationally recognized underwriter which
        generates gross proceeds to the Company in excess of $15 million; (iii) upon
        conversion of any options, warrants or other rights to acquire shares of
        Common
        Stock that are outstanding on the day immediately preceding the First Closing,
        provided, however, that the terms of such options, warrants or rights are
        not
        amended, modified or changed on or after the First Closing; or (iv) in
        connection with shares of Common Stock issued as consideration for the
        acquisition of another company or business in which the shareholders of the
        Company do not have a majority ownership interest, which acquisition has
        been
        approved by the Board of Directors of the Company.

      

      (e) The
        Holder’s rights under Section 3(c) hereof shall terminate on the earlier to
        occur of (i) the one year anniversary of the Closing Date and (ii) the date
        that
        the U.S. Food and Drug Administration approves the New Drug Application for
        orBec®. 

      

      (f) All
        calculations under this Section 3 shall be made to the nearest cent or the
        nearest 1/100th
        of a
        share, as applicable. The number of shares of Common Stock outstanding at
        any
        given time shall not include shares owned or held by or for the account of
        the
        Company.

      

      (g) Upon
        the
        occurrence of each adjustment pursuant to this Section 3, the Company at
        its
        expense will promptly compute such adjustment in accordance with the terms
        of
        this Warrant and prepare a certificate setting forth such adjustment, including
        a statement of the adjusted Per Share Warrant Price and adjusted number or
        type
        of Warrant Shares or other securities issuable upon exercise of this Warrant
        (as
        applicable), describing the transactions giving rise to such adjustments
        and
        showing in detail the facts upon which such adjustment is based. The Company
        will promptly deliver a copy of each such certificate to the Holder and to
        the
        Company's transfer agent.

      

      4. Fully
        Paid Stock; Taxes.
        

      

      The
        Company agrees that the shares of Common Stock represented by each and every
        certificate for Warrant Shares delivered on the exercise of this Warrant
        shall
        at the time of such delivery, be duly authorized, validly issued and
        outstanding, fully paid and nonassessable, and not subject to preemptive
        rights
        or rights of first refusal, and the Company will take all such actions as
        may be
        necessary to assure that the par value or stated value, if any, per share
        of the
        Common Stock is at all times equal to or less than the then Per Share Warrant
        Price. The Company further covenants and agrees that it will pay, when due
        and
        payable, any and all Federal and state stamp, original issue or similar taxes
        which may be payable in respect of the issue of any Warrant Share or any
        certificate thereof to the extent required because of the issuance by the
        Company of such security.

      

      5. Registration
        Under Securities Act .
        

      

      (a)
        The
        Holder shall, with respect to the Warrant Shares, have the registration rights
        set forth in the Registration Rights Agreement. By acceptance of this Warrant,
        the Holder agrees to comply with the provisions of the Registration Rights
        Agreement.

      

      (b) Until
        the
        later of (i) such time as the Holder shall be eligible to resell all of its
        Warrant Shares without volume restrictions pursuant to Rule 144(k) promulgated
        under the Securities Act (assuming Holder is not an “affiliate” of the Company,
        as defined in Rule 144), as evidenced by a legal opinion to such effect
        delivered by the Company’s counsel and acceptable to each of the Company’s
        transfer agent and the Holder, or (ii) the date on which all Warrant Shares
        have
        been sold under a Registration Statement or pursuant to Rule 144 (“Rule
        144”)
        as
        promulgated under the Securities Act, the Company shall use its reasonable
        best
        efforts to file with the Securities and Exchange Commission all current reports
        and the information as may be necessary to enable the Holder to effect sales
        of
        the Warrant Shares in reliance upon Rule 144 promulgated under the Securities
        Act.

       

      6. Investment
        Intent; Restrictions on Transferability. 

      

      (a) The
        Holder represents, by accepting this Warrant that it understands that this
        Warrant and any securities obtainable upon exercise of this Warrant have
        not
        been registered for sale under Federal or state securities laws and are being
        offered and sold to the Holder pursuant to one or more exemptions from the
        registration requirements of such securities laws. Certificates representing
        Warrant Shares may, for so long as required in accordance with the Purchase
        Agreement, bear the restrictive legend set forth on the first page hereof.
        The
        Holder understands that the Holder must bear the economic risk of such Holder’s
        investment in this Warrant and any Warrant Shares or other securities obtainable
        upon exercise of this Warrant for an indefinite period of time, as this Warrant
        and such Warrant shares or other securities have not been registered under
        Federal or state securities laws and therefore cannot be sold unless
        subsequently registered under such laws, or an exemption from such registration
        is available.

      

      (b) The
        Holder, by such Holder’s acceptance of this Warrant, represents to the Company
        that such Holder is acquiring this Warrant and will acquire any Warrant Shares
        or other securities obtainable upon exercise of this Warrant for such Holder’s
        own account for investment and not with a view to, or for sale in connection
        with, any distribution thereof in violation of the Securities Act. The Holder
        agrees that this Warrant and any such Warrant Shares or other securities
        will
        not be sold or otherwise transferred unless (i) a registration statement
        with
        respect to such transfer is effective under the Securities Act or (ii) such
        sale
        or transfer is made pursuant to one or more exemptions from the Securities
        Act.

      

      7. Loss,
        Theft, Destruction or Mutilation of Warrant.
        

      

      Upon
        receipt of evidence satisfactory to the Company of the loss, theft, destruction
        or mutilation of this Warrant, and of indemnity reasonably satisfactory to
        the
        Company, if lost, stolen or destroyed, and upon surrender and cancellation
        of
        this Warrant, if mutilated, the Company shall execute and deliver to the
        Holder,
        a new Warrant of like date, tenor and denomination.

      

      8. Warrant
        Holder Not Stockholder.
        

      

      This
        Warrant does not confer upon the Holder any right to vote or to consent to
        or
        receive notice as a stockholder of the Company, as such, in respect of any
        matters whatsoever, or any other rights or liabilities as a stockholder,
        prior
        to the exercise hereof; this Warrant does, however, require certain notices
        to
        Holders as set forth herein.

      

      9. Definitions.

      

      In
        addition to the terms defined elsewhere in this Warrant, the following terms
        have the following meanings:

      

      “Closing
        Date”
shall
        have the meaning given such term in the Purchase Agreement.

      

        “Common
        Stock”
shall
        mean the Common Stock, par value $.001 per share, of the Company, for which
        the
        Warrant is exercisable and any securities into which such common stock may
        hereafter be classified.

      

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

      

      “Holder”
shall
        mean the holder of this Warrant and “Holders”
shall
        mean the holder of this Warrant and the holders of all other
        Warrants.

      

      “Majority
        of the Holders”
shall
        mean Holders of Warrants representing more than fifty percent (50%) of the
        shares of Common Stock obtainable upon exercise of the Warrants then
        outstanding.

      

      “Permitted
        Consideration”
shall
        mean (a) cash or other funds immediately available to the Company or (b)
        Warrant
        Shares in the event of a net exercise in accordance with the terms
        hereof.

      

      “Purchase
        Agreement”
shall
        mean that certain Securities Purchase Agreement, dated as of April 6, 2006
        by
        and among the Company and the investors named therein, pursuant to which,
        among
        other things, the initial Holder purchased this Warrant.

      

      “Registration
        Rights Agreement”
shall
        mean that certain Registration Rights Agreement, dated as of April 6, 2006,
        by
        and among the Company and the Investors party thereto.

      

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

      

      “Trading
        Day”
means
        (i) a day on which the Common Stock is traded on a Trading Market (other
        than
        the OTC Bulletin Board), 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.

      

      “Warrants”
shall
        mean this Warrant, all similar Warrants issued on the date hereof and all
        warrants hereafter issued in exchange or substitution for this Warrant or
        such
        similar Warrants.

      

      10. Communication.
        

      

      All
        notices and communications hereunder shall be in writing and shall be deemed
        to
        be duly given if sent by registered or certified mail, return receipt requested,
        via a national recognized overnight mail delivery service, or by facsimile
        (provided the sender receives a machine-generated confirmation of successful
        transmission), if to the Company, to: 

      

      If
        to the
        Company:

      

      DOR
        BioPharma Inc.

      1691
        Michigan Ave.

      Suite
        435

      Miami,
        Florida 33139

      Attn: President

      Fax:
         (305)
        534-3383

      

      With
        a
        copy to (except in the case of Exercise Notices, Assignments and Partial
        Assignments):

      

      Edwards
        Angell Palmer & Dodge LLP

      350
        E.
        Las Olas Boulevard

      Suite
        1150

      Fort
        Lauderdale, Florida 33301-4215

      Attn: Leslie
        J.
        Croland, P.A.

      Fax: (904)
        727-2601

      

      If
        to the
        Holder of this Warrant, to such Holder at the address listed on the records
        of
        the Company.

      

      11. Reservation
        of Warrant Shares; Listing.
        

      

      The
        Company shall at all times prior to the Expiration Date (a) have authorized
        and
        in reserve, and shall keep available, solely for issuance and delivery upon
        the
        exercise of this Warrant, the shares of the Common Stock and other securities
        and properties as from time to time shall be receivable upon the exercise
        of
        this Warrant, free and clear of all restrictions on sale or transfer, other
        than
        under Federal or state securities laws, and free and clear of all preemptive
        rights and rights of first refusal; and (b) use its reasonable best efforts
        to
        keep the Warrant Shares authorized for listing on any national securities
        exchange, the Nasdaq National Market, the Nasdaq Capital Market or the OTC
        Bulletin Board.

      

      12. Headings;
        Severability.
        

      

      The
        headings of this Warrant have been inserted as a matter of convenience and
        shall
        not affect the construction hereof. In case any one or more of the provisions
        of
        this Warrant shall be invalid or unenforceable in any respect, the validity
        and
        enforceability of the remaining terms and provisions of this Warrant shall
        not
        in any way be affected or impaired thereby and the parties will attempt in
        good
        faith to agree upon a valid and enforceable provision which shall be a
        commercially reasonable substitute therefor, and upon so agreeing, shall
        incorporate such substitute provision in this Warrant.

      

      13. Applicable
        Law.
        

      

      This
        Warrant shall be governed by and construed in accordance with the law of
        the
        State of New York without giving effect to the principles of conflicts of
        law
        thereof.

      

      14. Specific
        Performance.
        The
        Company agrees that the remedies at law of the Holder of this Warrant in
        the
        event of any default or threatened default by the Company in the performance
        of
        or compliance with any of the terms of this Warrant are not and will not
        be
        adequate and that, to the fullest extent permitted by law, such terms maybe
        specifically enforced by a decree for the specific performance of any obligation
        contained herein or by an injunction against a violation of any of the terms
        hereof or otherwise.

      

      15. Amendment,
        Waiver, etc. 

      

      Except
        as
        expressly provided herein, neither this Warrant nor any term hereof may be
        amended, waived, discharged or terminated other than by a written instrument
        signed by the party against whom enforcement of any such amendment, waiver,
        discharge or termination is sought. 

      [Signature
        Page Follows]

      
        
          -
            -PMB_296938_5.DOC/DUGARTE

           

        

        
           

          
            

          

        

        
           

        

      

      IN
        WITNESS WHEREOF, the Company has caused this Warrant to be duly signed by
        its
        President and its corporate seal to be hereunto affixed and attested by its
        Secretary as of the Original Issue Date first above referenced.

      

      DOR
        BIOPHARMA, INC. 

      

      

      

      By: _________________________ 

      Name:
         _________________________

      Title:
         _________________________

      

      ATTEST:

      

      

      _____________________________

      Secretary

      [Corporate
        Seal]

      
        
          -
            -PMB_296938_5.DOC/DUGARTE

           

        

        
           

          
            

          

        

        
           

        

      

      

      ASSIGNMENT

      

      FOR
        VALUE
        RECEIVED _______________ hereby sells, assigns and transfers unto
        ____________________ the foregoing Warrant and all rights evidenced thereby,
        and
        does irrevocably constitute and appoint _____________________, attorney,
        to
        transfer said Warrant on the books of DOR Biopharma, Inc.

      

      Dated:_______________   Signature:____________________

      

      Address:______________________

      

      PARTIAL
        ASSIGNMENT

      

      FOR
        VALUE
        RECEIVED _______________ hereby assigns and transfers unto ____________________
        the right to purchase _______ shares of the Common Stock, par value $.001
        per
        share, of DOR BioPharma, Inc. covered by the foregoing Warrant, and a
        proportionate part of said Warrant and the rights evidenced thereby, and
        does
        irrevocably constitute and appoint ____________________, attorney, to transfer
        that part of said Warrant on the books of DOR BioPharma, Inc.

      

      Dated:_______________   Signature:____________________

      

      Address:______________________

      
        
          -
            -PMB_296938_5.DOC/DUGARTE

           

        

        
           

          
            

          

        

        
           

        

      

      EXERCISE
        NOTICE

       

      
        

The
        undersigned hereby elects to purchase _____________ shares of Common Stock
        of
        DOR BioPharma, Inc. pursuant to the attached Warrant, and, if such Holder
        is not
        utilizing the cashless (or net) exercise provisions set forth in the Warrant,
        encloses herewith (if the undersigned shall not be utilizing the net exercise
        provisions of the Warrant) $________ in cash, certified or official bank
        check
        or checks or other immediately available funds, which sum represents the
        aggregate Per Share Warrant Price for the number of shares of Common Stock
        to
        which this Exercise Notice relates, together with any applicable taxes payable
        by the undersigned pursuant to the Warrant.

      

      By
        its
        delivery of this Exercise Notice, the undersigned represents and warrants
        to the
        Company that in giving effect to the exercise evidenced hereby the Holder
        will
        not beneficially own in excess of the number of shares of Common Stock
        (determined in accordance with Section 13(d) of the Securities Exchange Act
        of
        1934) permitted to be owned under Section 1(g) or 1(g) (as applicable) of
        this
        Warrant to which this notice relates.

      

      By
        its
        delivery of this Exercise Notice, the undersigned represents and warrants
        to the
        Company that it is an "accredited investor" as defined in Rule 501(a) under
        the
        Securities Act of 1933.

      

      The
        undersigned requests that certificates for the shares of Common Stock issuable
        upon this exercise be issued in the name of

       

      PLEASE
        INSERT SOCIAL SECURITY OR

       

       

      TAX
        IDENTIFICATION NUMBER

       

      (Please
        print name and address)

      

      

      

        

        
          1 100%
            of the Share number being purchased by the Investor pursuant to the Purchase
            Agreement.

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