Document:

Form of Security Agreement

    EXHIBIT
      4.1

     

    SECURITIES
      PURCHASE AGREEMENT

     

    This
      Securities Purchase Agreement (this “Agreement”)
      is
      dated as of June 28, 2007, between Peregrine Pharmaceuticals, Inc., a Delaware
      corporation (the “Company”),
      and
      each purchaser identified on the signature pages hereto (each, including its
      successors and assigns, a “Purchaser”
and
      collectively the “Purchasers”).

     

    WHEREAS,
      subject to the terms and conditions set forth in this Agreement and pursuant
      to
      an effective registration statement under the Securities Act of 1933, as amended
      (the “Securities
      Act”),
      the
      Company desires to issue and sell to each Purchaser, and each Purchaser,
      severally and not jointly, desires to purchase from the Company, 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 each Purchaser agree as
      follows:

     

    ARTICLE
      I.

    DEFINITIONS

     

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

     

    “Action”
shall
      have the meaning ascribed to such term in Section 3.1(j).

     

    “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 405 under the Securities Act. With
      respect to a Purchaser, any investment fund or managed account that is managed
      on a discretionary basis by the same investment manager as such Purchaser will
      be deemed to be an Affiliate of such Purchaser.

     

    “Board
      of Directors”
means
      the board of directors of the Company.

     

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

     

    “Closing”
means
      the closing of the purchase and sale of the Shares pursuant to Section
      2.1.

     

    “Closing
      Date”
means
      the Trading Day when all of the Transaction Documents have been executed and
      delivered by the applicable parties thereto, and all conditions precedent to
      (i)
      the Purchasers’ obligations to pay the Subscription Amount and (ii) the
      Company’s obligations to deliver the Shares have been satisfied or
      waived.

     

    
      
        
        

      

      
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    “Commission”
means
      the Securities and Exchange Commission.

     

    “Common
      Stock”
means
      the common stock of the Company, par value $0.001 per share, and any other
      class
      of securities into which such securities may hereafter be reclassified or
      changed into. 

     

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

     

    “Company
      Counsel”
means
      Snell & Wilmer L.L.P., with offices located at 600 Anton Boulevard, Suite
      1400, Costa Mesa, California 92626. 

     

    “Disclosure
      Schedules”
means
      the Disclosure Schedules of the Company delivered concurrently herewith.

     

    “Evaluation
      Date”
shall
      have the meaning ascribed to such term in Section 3.1(r). 

     

    “Exchange
      Act”
means
      the Securities Exchange Act of 1934, as amended, and the rules and regulations
      promulgated thereunder.

    

    “Exempt
      Issuance”
means
      the issuance of (a) shares of Common Stock or options to employees, officers
      or
      directors of the Company pursuant to any stock or option plan duly adopted
      for
      such purpose, by a majority of the non-employee members of the Board of
      Directors or a majority of the members of a committee of non-employee directors
      established for such purpose, (b) shares of Common Stock upon exercise of common
      stock purchase warrants outstanding as of the date hereof, (c) securities issued
      pursuant to acquisitions or strategic transactions, such as joint ventures
      and
      research collaborations, approved by a majority of the disinterested directors
      of the Company, provided that any such issuance shall only be to a Person which
      is, itself or through its subsidiaries, an operating company in a business
      synergistic with the business of the Company and in which the Company receives
      benefits in addition to the investment of funds, but shall not include a
      transaction in which the Company is issuing securities primarily for the purpose
      of raising capital or to an entity whose primary business is investing in
      securities and (d) stock issued in exchange for bona fide research services
      provided to the Company. 

     

    “FWS”
means
      Feldman Weinstein & Smith LLP with offices located at 420 Lexington Avenue,
      Suite 2620, New York, New York 10170-0002.

     

    “GAAP”
shall
      have the meaning ascribed to such term in Section 3.1(h).

     

    “Indebtedness”
shall
      have the meaning ascribed to such term in Section 3.1(z).

     

    “Intellectual
      Property Rights”
shall
      have the meaning ascribed to such term in Section 3.1(o).

     

    
      
        
        

      

      
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    “Liens”
means
      a
      lien, charge, security interest, encumbrance, right of first refusal, preemptive
      right or other restriction.

     

    “Material
      Adverse Effect”
shall
      have the meaning assigned to such term in Section 3.1(b).

     

    “Material
      Permits”
shall
      have the meaning ascribed to such term in Section 3.1(m).

     

    “Participation
      Maximum”
shall
      have the meaning ascribed to such term in Section 4.10. 

     

    “Per
      Share Purchase Price”
equals
      $0.75, subject to adjustment for reverse and forward stock splits, stock
      dividends, stock combinations and other similar transactions of the Common
      Stock
      that occur after the date of this Agreement.

     

    “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.

     

    “Pre-Notice”
shall
      have the meaning ascribed to such term in Section 4.10. 

     

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

     

    “Prospectus”
means
      the final prospectus filed for the Registration Statement.

     

    “Prospectus
      Supplement”
means
      the supplement to the Prospectus complying with Rule 424(b) of the Securities
      Act that is filed with the Commission and delivered by the Company to each
      Purchaser at the Closing.

     

    “Purchaser
      Party”
shall
      have the meaning ascribed to such term in Section 4.8.

     

    “Registration
      Statement”
means
      the effective registration statement with Commission file No. 333-139975 which
      registers the sale of the Shares to the Purchasers.

     

    “Required
      Approvals”
shall
      have the meaning ascribed to such term in Section 3.1(e).

     

    “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. 

     

    “SEC
      Reports”
shall
      have the meaning ascribed to such term in Section 3.1(h).

     

    
      
        
        

      

      
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    “Securities
      Act”
means
      the Securities Act of 1933, as amended, and the rules and regulations
      promulgated thereunder.

     

    “Shares”
means
      the shares of Common Stock issued or issuable to each Purchaser pursuant to
      this
      Agreement.

     

    “Short
      Sales”
means
      all “short sales” as defined in Rule 200 of Regulation SHO under the Exchange
      Act and all types of direct and indirect stock pledges, forward sale contracts,
      options, puts, calls, short sales, swaps and similar arrangements (including
      on
      a total return basis), and sales and other transactions through non-U.S.
      broker-dealers or foreign regulated brokers. 

     

    “Subscription
      Amount”
means,
      as to each Purchaser, the aggregate amount to be paid for Shares purchased
      hereunder as specified below such Purchaser’s name on the signature page of this
      Agreement and next to the heading “Subscription Amount,” in United States
      dollars and in immediately available funds.

     

    “Subsequent
      Financing”
shall
      have the meaning ascribed to such term in Section 4.10.

     

    “Subsequent
      Financing Notice”
shall
      have the meaning ascribed to such term in Section 4.10. 

     

    “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 and as set forth on
Schedule
      3.1(a),
      which
      shall, where applicable, include any subsidiary of the Company formed or
      acquired after the date hereof.

     

    “Trading
      Day”
means
      a
      day on which the New York Stock Exchange is open for trading.

     

    “Trading
      Market”
means
      the following markets or exchanges on which the Common Stock is listed or quoted
      for trading on the date in question: the American Stock Exchange, the Nasdaq
      Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market,
      the
      New York Stock Exchange or the OTC Bulletin Board.

     

    “Transaction
      Documents”
means
      this Agreement and any other documents or agreements executed in connection
      with
      the transactions contemplated hereunder.

     

    “Transfer
      Agent”
means
      Integrity Stock Transfer, the current transfer agent of the Company, with a
      mailing address of 2920 N. Green Valley Parkway, Building 5 - Suite 527 and
      a
      facsimile number of (702) 796-5650 and any successor transfer agent of the
      Company.

     

    
      
        
        

      

      
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    ARTICLE
      II.

    PURCHASE
      AND SALE

     

    2.1    Closing.
      On the
      Closing Date, upon the terms and subject to the conditions set forth herein,
      substantially concurrent with the execution and delivery of this Agreement
      by
      the parties hereto, the Company agrees to sell, and the Purchasers, severally
      and not jointly, agree to purchase, up to an aggregate of $22,500,000 of Shares.
      Each Purchaser shall deliver to the Company, via wire transfer or a certified
      check, immediately available funds equal to its Subscription Amount and the
      Company shall deliver to each Purchaser its respective Shares, and the Company
      and each Purchaser shall deliver the other items set forth in Section 2.2
      deliverable at the Closing. Upon satisfaction of the covenants and conditions
      set forth in Sections 2.2 and 2.3, the Closing shall occur at the offices of
      FWS
      or such other location as the parties shall mutually agree.

     

    2.2    Deliveries.

     

    (a)    On
      or
      prior to the Closing Date, the Company shall deliver or cause to be delivered
      to
      each Purchaser the following:

     

    (i)    this
      Agreement duly executed by the Company;

     

    (ii)   a
      legal
      opinion of Company Counsel, substantially in the form of Exhibit
      B
      attached
      hereto; 

     

    (iii)         
      a
      copy of
      the irrevocable instructions to the Company’s transfer agent instructing the
      transfer agent to deliver via the Depository Trust Company Deposit Withdrawal
      Agent Commission System (“DWAC”)
      Shares
      equal to such Purchaser’s Subscription Amount divided by the Per Share Purchase
      Price, registered in the name of such Purchaser; and

     

    (iv)         
      the
      Prospectus and Prospectus Supplement (which may be delivered in accordance
      with
      Rule 172 under the Securities Act).

     

    (b)    On
      or
      prior to the Closing Date, each Purchaser shall deliver or cause to be delivered
      to the Company the following:

     

    (i)    this
      Agreement duly executed by such Purchaser; and

     

    (ii)   such
      Purchaser’s Subscription Amount by wire transfer to the account as specified in
      writing by the Company.

     

    2.3    Closing
      Conditions. 

     

    (a)    The
      obligations of the Company hereunder in connection with the Closing are subject
      to the following conditions being met:

     

    (i)    the
      accuracy in all material respects on the Closing Date of the representations
      and
      warranties of the Purchasers contained herein; 

     

    
      
        
        

      

      
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    (ii)   all
      obligations, covenants and agreements of each Purchaser required to be performed
      at or prior to the Closing Date shall have been performed;
      and

     

    (iii)   the
      delivery by each Purchaser of the items set forth in Section 2.2(b) of this
      Agreement.

     

    (b)    The
      respective obligations of the Purchasers hereunder in connection with the
      Closing are subject to the following conditions being met:

     

    (i)    the
      accuracy in all material respects on the Closing Date of the representations
      and
      warranties of the Company contained herein;

     

    (ii)   all
      obligations, covenants and agreements of the Company required to be performed
      at
      or prior to the Closing Date shall have been performed; 

     

    (iii)   the
      delivery by the Company of the items set forth in Section 2.2(a) of this
      Agreement; 

     

    (iv)   there
      shall have been no Material Adverse Effect with respect to the Company since
      the
      date hereof; and

     

    (v)    from
      the
      date hereof to the Closing Date, trading in the Common Stock shall not have
      been
      suspended by the Commission or the Company’s principal Trading Market (except
      for any suspension of trading of limited duration agreed to by the Company,
      which suspension shall be terminated prior to the Closing), and, at any time
      prior to the Closing Date, trading in securities generally as reported by
      Bloomberg L.P. shall not have been suspended or limited, or minimum prices
      shall
      not have been established on securities whose trades are reported by such
      service, or on any Trading Market, nor shall a banking moratorium have been
      declared either by the United States or New York State authorities nor shall
      there have occurred any material outbreak or escalation of hostilities or other
      national or international calamity of such magnitude in its effect on, or any
      material adverse change in, any financial market which, in each case, in the
      reasonable judgment of each Purchaser, makes it impracticable or inadvisable
      to
      purchase the Shares at the Closing.

     

    ARTICLE
      III.

    REPRESENTATIONS
      AND WARRANTIES

     

    3.1    Representations
      and Warranties of the Company.
      Except
      as
      set forth in the Disclosure Schedules, which Disclosure Schedules shall be
      deemed a part hereof and shall qualify any representation or otherwise made
      herein to the extent of the disclosure contained in the corresponding section
      of
      the Disclosure Schedules, the Company hereby makes the following representations
      and warranties to each Purchaser:

     

    (a)    Subsidiaries.
      All of
      the direct and indirect subsidiaries of the Company are set forth on
Schedule
      3.1(a).
      The
      Company owns, directly or indirectly, all of the capital stock or other equity
      interests of each Subsidiary free and clear of any Liens, and all of 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
      to
      subscribe for or purchase securities. If the Company has no subsidiaries, then
      all other references to the Subsidiaries or any of them in the Transaction
      Documents shall be disregarded.

     

    
      
        
        

      

      
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    (b)    Organization
      and Qualification.
      The
      Company and each of the Subsidiaries 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 or default 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 the Subsidiaries is duly qualified
      to
      conduct business and is in good standing as a foreign corporation or other
      entity in each jurisdiction in which the nature of the business conducted or
      property owned by it makes such qualification necessary, except where the
      failure to be so qualified or in good standing, as the case may be, could not
      have or reasonably be expected to result in (i) a material adverse effect on
      the
      legality, validity or enforceability of any Transaction Document, (ii) a
      material adverse effect on the results of operations, assets, business,
      prospects or condition (financial or otherwise) of the Company and the
      Subsidiaries, taken as a whole, or (iii) a material adverse effect on the
      Company’s ability to perform in any material respect on a timely basis its
      obligations under any Transaction Document (any of (i), (ii) or (iii), a
“Material
      Adverse Effect”)
      and no
      Proceeding has been instituted in any such jurisdiction revoking, limiting
      or
      curtailing or seeking to revoke, limit or curtail such power and authority
      or
      qualification.

     

    (c)    Authorization;
      Enforcement.
      The
      Company has the requisite corporate power and authority to enter into and to
      consummate the transactions contemplated by each of the Transaction Documents
      and otherwise to carry out its obligations hereunder and thereunder. The
      execution and delivery of each of the Transaction Documents by the Company
      and
      the consummation by it of the transactions contemplated hereby and thereby
      have
      been duly authorized by all necessary action on the part of the Company and
      no
      further action is required by the Company, the Board of Directors or the
      Company’s stockholders in connection therewith other than in connection with the
      Required Approvals. 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 and thereof, will constitute the valid and binding obligation
      of the Company enforceable against the Company in accordance with its terms,
      except (i) as limited by general equitable principles and applicable bankruptcy,
      insolvency, reorganization, moratorium and other laws 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.

     

    
      
        
        

      

      
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    (d)    No
      Conflicts.
      The
      execution, delivery and performance of the Transaction Documents by the Company,
      the issuance and sale of the Shares and the consummation by the Company of
      the
      other transactions contemplated hereby and 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, result
      in the creation of any Lien upon any of the properties or assets of the Company
      or any Subsidiary, 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) subject to the Required Approvals,
      conflict with or result in a violation of any law, rule, regulation, order,
      judgment, injunction, decree or other restriction of any court or governmental
      authority to which the Company 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 could not have or reasonably be expected to
      result in a Material Adverse Effect.

     

    (e)    Filings,
      Consents and Approvals.
      The
      Company is not required to obtain any consent, waiver, authorization or order
      of, give any notice to, or make any filing or registration with, any court
      or
      other federal, state, local or other governmental authority or other Person
      in
      connection with the execution, delivery and performance by the Company of the
      Transaction Documents, other than (i) filings required pursuant to Section
      4.4
      of this Agreement, (ii) the filing with the Commission of the Prospectus
      Supplement, (iii) application(s) to each applicable Trading Market for the
      listing of the Shares for trading thereon in the time and manner required
      thereby and (iv) such filings as are required to be made under applicable state
      securities laws (collectively, the “Required
      Approvals”).

     

    (f)    Issuance
      of the Shares; Registration.
      The
      Shares are duly authorized and, when issued and paid for in accordance with
      the
      applicable Transaction Documents, will be duly and validly issued, fully paid
      and nonassessable, free and clear of all Liens imposed by the Company. The
      Company has prepared and filed the Registration Statement in conformity with
      the
      requirements of the Securities Act, which became effective on January 23,
      2007 (the “Effective
      Date”),
      including the Prospectus, and such amendments and supplements thereto as may
      have been required to the date of this Agreement. The Registration Statement
      is
      effective under the Securities Act and no stop order preventing or suspending
      the effectiveness of the Registration Statement or suspending or preventing
      the
      use of the Prospectus has been issued by the Commission and no proceedings
      for
      that purpose have been instituted or, to the knowledge of the Company, are
      threatened by the Commission. The Company, if required by the rules and
      regulations of the Commission, proposes to file the Prospectus, with the SEC
      pursuant to Rule 424(b). At the time the Registration Statement and any
      amendments thereto became effective, at the date of this Agreement and at the
      Closing Date, the Registration Statement and any amendments thereto conformed
      and will conform in all material respects to the requirements of the Securities
      Act and did not and will not contain any untrue statement of a material fact
      or
      omit to state any material 

     

    
      
        
        

      

      
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        fact
          required to be stated therein or necessary to make the statements therein
          not
          misleading; and the Prospectus and any amendments or supplements thereto,
          at the
          time the Prospectus or any amendment or supplement thereto was issued and
          at the
          Closing Date, conformed and will conform in all material respects to the
          requirements of the Securities Act and did not and will not contain an
          untrue
          statement of a material fact or omit to state a material fact necessary
          in order
          to make the statements therein, in light of the circumstances under which
          they
          were made, not misleading.

      

       

    

    (g)    Capitalization.
      The
      capitalization of the Company is as set forth on Schedule
      3.1(g).
      The
      Company has not issued any capital stock since its most
      recently filed periodic report under the Exchange Act, other
      than pursuant to the exercise of employee stock options, and the award of shares
      of common stock, under the Company’s stock incentive plans, the issuance of
      shares of Common Stock to employees pursuant to the Company’s employee stock
      purchase plans and pursuant to the conversion or exercise of Common Stock
      Equivalents outstanding as of the date of the most recently filed periodic
      report under the Exchange Act. 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. Except as set forth
      on Schedule
      3.1(g)
      or as a
      result of the purchase and sale of the Shares, 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
      exercisable 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 Common Stock
      Equivalents. The issuance and sale of the Shares will not obligate the Company
      to issue shares of Common Stock or other securities to any Person (other than
      the Purchasers) and will not result in a right of any holder of Company
      securities to adjust the exercise, conversion, exchange or reset price under
      any
      of such securities. All of the outstanding shares of capital stock of the
      Company are validly issued, fully paid and nonassessable, have been issued
      in
      compliance with all federal and state securities laws, and none of such
      outstanding shares was issued in violation of any preemptive rights or similar
      rights to subscribe for or purchase securities. No further approval or
      authorization of any stockholder, the Board of Directors or others is required
      for the issuance and sale of the Shares. There are no stockholders agreements,
      voting agreements or other similar agreements with respect to the Company’s
      capital stock to which the Company is a party or, to the knowledge of the
      Company, between or among any of the Company’s stockholders.

     

    (h)    SEC
      Reports; Financial Statements.
      The
      Company has filed all reports, schedules, forms, statements and other documents
      required to be filed by the Company under the Securities Act and the Exchange
      Act, including pursuant to Section 13(a) or 15(d) thereof, for the two years
      preceding the date hereof (or such shorter period as the Company was required
      by
      law or regulation to file such material) (the foregoing materials, including
      the
      exhibits thereto and documents incorporated by reference therein, together
      with
      the Prospectus and the Prospectus Supplement, being collectively referred to
      herein as the “SEC
      Reports”)
      on a
      timely basis or has received a valid 

     

    
      
        
        

      

      
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    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, as applicable, and none of the SEC Reports, when filed,
      contained any untrue statement of a material fact or omitted to state a material
      fact required to be stated therein or necessary in order to make the statements
      therein, in the 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
      United States 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,
      immaterial, year-end audit adjustments.

     

    (i)    Material
      Changes; Undisclosed Events, Liabilities or Developments.
      Since
      the date of the latest audited financial statements included within the SEC
      Reports, except as specifically disclosed in a subsequent SEC Report filed
      prior
      to the date hereof, (i) there has been no event, occurrence or development
      that
      has had or that could reasonably be expected to result in a Material Adverse
      Effect, (ii) the Company has not incurred any liabilities (contingent or
      otherwise) other than (A) trade payables and accrued expenses incurred in the
      ordinary course of business consistent with past practice and (B) liabilities
      not required to be reflected in the Company’s financial statements pursuant to
      GAAP or disclosed in filings made with the Commission, (iii) the Company has
      not
      altered its method of accounting, (iv) the Company has not declared or made
      any
      dividend or distribution of cash or other property to its stockholders or
      purchased, redeemed or made any agreements to purchase or redeem any shares
      of
      its capital stock and (v) the Company has not issued any equity securities
      to
      any officer, director or Affiliate, except pursuant to existing Company stock
      incentive plans. The Company does not have pending before the Commission any
      request for confidential treatment of information. Except for the issuance
      of
      the Shares contemplated by this Agreement or as set forth on Schedule
      3.1(i),
      no
      event, liability or development 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 at the time this representation is made or
      deemed made that has not been publicly disclosed at least 1 Trading Day prior
      to
      the date that this representation is made.

     

    (j)    Litigation.
      There
      is no action, suit, inquiry, notice of violation, proceeding or investigation
      pending or, to the knowledge of the Company, threatened against or affecting
      the
      Company, any Subsidiary or any of their respective properties before or by
      any
      court, arbitrator, governmental or administrative agency or regulatory authority
      (federal, state, county, local or foreign) (collectively, an “Action”)
      which
      (i) adversely affects or challenges the legality, validity or enforceability
      of
      any of the Transaction 

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    Documents
      or the Shares or (ii) could, if there were an unfavorable decision, have or
      reasonably be expected to result in a Material Adverse Effect. Neither the
      Company nor any Subsidiary, nor any director or officer thereof, 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. There
      has not been, and to the knowledge of the Company, there is not pending or
      contemplated, any investigation by the Commission involving the Company or
      any
      current or former director or officer of the Company. 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. 

     

    (k)    Labor
      Relations.
      No
      material labor dispute exists or, to the knowledge of the Company, is imminent
      with respect to any of the employees of the Company which could reasonably
      be
      expected to result in a Material Adverse Effect. None of the Company’s or its
      Subsidiaries’ employees is a member of a union that relates to such employee’s
      relationship with the Company or such Subsidiary, and neither the Company nor
      any of its Subsidiaries is a party to a collective bargaining agreement, and
      the
      Company and its Subsidiaries believe that their relationships with their
      employees are good. No executive officer, to the knowledge of the Company,
      is,
      or is now expected to be, in violation of any material term of any employment
      contract, confidentiality, disclosure or proprietary information agreement
      or
      non-competition agreement, or any other contract or agreement or any restrictive
      covenant in favor of any third party, and the continued employment of each
      such
      executive officer does not subject the Company or any of its Subsidiaries to
      any
      liability with respect to any of the foregoing matters. The Company and its
      Subsidiaries are in compliance with all U.S. federal, state, local and foreign
      laws and regulations relating to employment and employment practices, terms
      and
      conditions of employment and wages and hours, except where the failure to be
      in
      compliance could not, individually or in the aggregate, reasonably be expected
      to have a Material Adverse Effect.

     

    (l)    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 applicable to its business
      and all such laws that affect the environment, except in each case as could
      not
      have or reasonably be expected to result in a Material Adverse
      Effect.

     

    (m)    Regulatory
      Permits.
      The
      Company and the Subsidiaries possess all certificates, authorizations and
      permits issued by the appropriate federal, state, local or foreign regulatory
      authorities necessary to conduct their respective businesses as described in
      the
      SEC Reports, except where the failure to possess such permits could not
      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.

     

    
      
        
        

      

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

     

    (o)    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,
      trade secrets, inventions, copyrights, licenses and other intellectual property
      rights and similar rights necessary or material for use in connection with
      their
      respective businesses as described in the SEC Reports and which the failure
      to
      so have could have a Material Adverse Effect (collectively, the “Intellectual
      Property Rights”).
      Neither the Company nor any Subsidiary has received a notice (written or
      otherwise) that any of the Intellectual Property Rights used by the Company
      or
      any Subsidiary violates or infringes upon the rights of any Person. To the
      knowledge of the Company, all such Intellectual Property Rights are enforceable
      and there is no existing infringement by another Person of any of the
      Intellectual Property Rights. The Company and its Subsidiaries have taken
      reasonable security measures to protect the secrecy, confidentiality and value
      of all of their intellectual properties, except where failure to do so could
      not, individually or in the aggregate, reasonably be expected to have a Material
      Adverse Effect.

     

    (p)    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, including, but not limited to, directors and officers insurance
      coverage at least equal to the aggregate Subscription Amount. Neither the
      Company nor any Subsidiary has any reason to believe that it will not be able
      to
      renew its existing insurance coverage as and when such coverage expires or
      to
      obtain similar coverage from similar insurers as may be necessary to continue
      its business without a significant increase in cost.

     

    (q)    Transactions
      With Affiliates and Employees.
      Except
      as set forth in the SEC Reports, none of the officers or directors of the
      Company and, to the knowledge of the Company, none of the employees of the
      Company is presently a party to any transaction with the Company or any
      Subsidiary (other than for services as employees, officers and directors),
      including any contract, agreement or other arrangement providing for the
      furnishing of services to or by, providing for rental of real or personal
      property to or from, or otherwise requiring payments to or from any officer,
      director or such employee or, to the knowledge of the Company, any entity in
      which any officer, director, or any such employee has a substantial interest
      or
      is an officer, director, trustee or partner, in each case in excess of $60,000
      other than for (i) payment of salary or consulting fees for services rendered,
      (ii) reimbursement for expenses incurred on behalf of the Company and (iii)
      other employee benefits, including stock option agreements under any stock
      option plan of the Company.

     

    
      
        
        

      

      
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    (r)    Sarbanes-Oxley;
      Internal Accounting Controls.
      The
      Company is in material compliance with all provisions of the Sarbanes-Oxley
      Act
      of 2002 which are applicable to it as of the Closing Date. The
      Company and the Subsidiaries maintain a system of internal accounting controls
      sufficient to provide reasonable assurance that (i) transactions are executed
      in
      accordance with management’s general or specific authorizations, (ii)
      transactions are recorded as necessary to permit preparation of financial
      statements in conformity with GAAP and to maintain asset accountability, (iii)
      access to assets is permitted only in accordance with management’s general or
      specific authorization, and (iv) the recorded accountability for assets is
      compared with the existing assets at reasonable intervals and appropriate action
      is taken with respect to any differences. The Company has established disclosure
      controls and procedures (as defined in Exchange Act Rules 13a-15(e) and
      15d-15(e)) for the Company and designed such disclosure controls and procedures
      to ensure that information required to be disclosed by the Company in the
      reports it files or submits under the Exchange Act is recorded, processed,
      summarized and reported, within the time periods specified in the Commission’s
      rules and forms. The Company’s certifying officers have evaluated the
      effectiveness of the Company’s disclosure controls and procedures as of the end
      of the period covered by the Company’s most recently filed periodic report under
      the Exchange Act (such date, the “Evaluation
      Date”).
      The
      Company presented in its most recently filed periodic report under the Exchange
      Act the conclusions of the certifying officers about the effectiveness of the
      disclosure controls and procedures based on their evaluations as of the
      Evaluation Date. Since the Evaluation Date, there have been no changes in the
      Company’s internal control over financial reporting (as such term is defined in
      the Exchange Act) that has materially affected, or is reasonably likely to
      materially affect, the Company’s internal control over financial
      reporting.

     

    (s)    Certain
      Fees.
      Except
      as set forth in the Prospectus Supplement, 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 the Transaction
      Documents. The Purchasers shall have no obligation with respect to any fees
      or
      with respect to any claims 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 the Transaction Documents.

     

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

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

       

    

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

     

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

     

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

     

    (x)    Disclosure.
      Except
      with respect to the material terms and conditions of the transactions
      contemplated by the Transaction Documents, the Company confirms that neither
      it
      nor, to the Company’s knowledge, any other Person acting on its behalf has
      provided any of the Purchasers or their agents or counsel with any information
      that it believes constitutes or might constitute material, non-public
      information which is not otherwise disclosed in the Prospectus Supplement.
      The
      Company understands and confirms that the Purchasers will rely on the foregoing
      representation in effecting transactions in securities of the Company. All
      disclosure furnished by or on behalf of the Company to the Purchasers regarding
      the Company, its business and the transactions contemplated hereby, including
      the Disclosure Schedules to this Agreement, is true and correct and does 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. The press releases
      disseminated by the Company during the twelve months preceding the date of
      this
      Agreement taken as a whole do not contain any untrue statement of a material
      fact or omit 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 and when made, not misleading. The Company acknowledges
      and
      agrees that no Purchaser makes or has made any representations or warranties
      with respect to the transactions contemplated hereby other than those
      specifically set forth in Section 3.2 hereof.

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

       

    

    (y)    No
      Integrated Offering.
      Assuming
      the accuracy of the Purchasers’ representations and warranties set forth in
      Section 3.2, neither the Company, nor any of its Affiliates, nor any Person
      acting on its or their behalf has, directly or indirectly, made any offers
      or
      sales of any security or solicited any offers to buy any security, under
      circumstances that would cause this offering of the Shares to be integrated
      with
      prior offerings by the Company for purposes of any applicable shareholder
      approval provisions of any Trading Market on which any of the securities of
      the
      Company are listed or designated.

     

    (z)    Solvency.
      Based
      on the consolidated financial condition of the Company as of the Closing Date,
      after giving effect to the receipt by the Company of the proceeds from the
      sale
      of the Shares hereunder, (i) the fair saleable value of the Company’s assets
      exceeds the amount that will be required to be paid on or in respect of the
      Company’s existing debts and other liabilities (including known contingent
      liabilities) as they mature, (ii) the Company’s assets do not constitute
      unreasonably small capital to carry on its business as now conducted and as
      proposed to be conducted including its capital needs taking into account the
      particular capital requirements of the business conducted by the Company, and
      projected capital requirements and capital availability thereof, and (iii)
      the
      current cash flow of the Company, together with the proceeds the Company would
      receive, were it to liquidate all of its assets, after taking into account
      all
      anticipated uses of the cash, would be sufficient to pay all amounts on or
      in
      respect of its liabilities when such amounts are required to be paid. The
      Company does not intend to incur debts beyond its ability to pay such debts
      as
      they mature (taking into account the timing and amounts of cash to be payable
      on
      or in respect of its debt). The Company has no knowledge of any facts or
      circumstances which lead it to believe that it will file for reorganization
      or
      liquidation under the bankruptcy or reorganization laws of any jurisdiction
      within one year from the Closing Date. Schedule
      3.1(z)
      sets
      forth as of the date thereof all outstanding secured and unsecured Indebtedness
      of the Company or any Subsidiary, or for which the Company or any Subsidiary
      has
      commitments. For the purposes of this Agreement, “Indebtedness”
means
      (a) any liabilities for borrowed money or amounts owed in excess of $50,000
      (other than trade accounts payable incurred in the ordinary course of business),
      (b) all guaranties, endorsements and other contingent obligations in respect
      of
      indebtedness of others, whether or not the same are or should be reflected
      in
      the Company’s balance sheet (or the notes thereto), except guaranties by
      endorsement of negotiable instruments for deposit or collection or similar
      transactions in the ordinary course of business; and (c) the present value
      of
      any lease payments
      in excess of $50,000 due under leases required to be capitalized in accordance
      with GAAP. Neither
      the Company nor any Subsidiary is in default with respect to any
      Indebtedness.

     

    (aa)   Tax
      Status.
      Except
      for matters that would not, individually or in the aggregate, have or reasonably
      be expected to result in a Material Adverse Effect, the Company and each
      Subsidiary has filed all necessary federal, state and foreign income and
      franchise tax returns and has paid or accrued all taxes shown as due thereon,
      and the Company has no knowledge of a tax deficiency which has been asserted
      or
      threatened against the Company or any Subsidiary.

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

       

    

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

     

    (cc)    Accountants.
      The
      Company’s accounting firm is set forth on Schedule
      3.1(cc)
      of the
      Disclosure Schedule. To the knowledge and belief of the Company, such accounting
      firm (i) is a registered public accounting firm as required by the Exchange
      Act
      and (ii) shall express its opinion with respect to the financial statements
      to
      be included in the Company’s Annual Report on Form 10-K for the year ending
      April 30, 2007.

     

    (dd)    Acknowledgment
      Regarding Purchasers’ Purchase of Shares.
      The
      Company acknowledges and agrees that each of the Purchasers is acting solely
      in
      the capacity of an arm’s length purchaser with respect to the Transaction
      Documents and the transactions contemplated thereby. The Company further
      acknowledges that no Purchaser is acting as a financial advisor or fiduciary
      of
      the Company (or in any similar capacity) with respect to the Transaction
      Documents and the transactions contemplated thereby and any advice given by
      any
      Purchaser or any of their respective representatives or agents in connection
      with the Transaction Documents and the transactions contemplated thereby is
      merely incidental to the Purchasers’ purchase of the Shares. The Company further
      represents to each Purchaser that the Company’s decision to enter into this
      Agreement and the other Transaction Documents has been based solely on the
      independent evaluation of the transactions contemplated hereby by the Company
      and its representatives.

     

    (ee)    Acknowledgement
      Regarding Purchaser’s Trading Activity.
      Anything
      in this Agreement or elsewhere herein to the contrary notwithstanding (except
      for Sections 3.2(e) and 4.12 hereof), it is understood and acknowledged by
      the
      Company (i) that none of the Purchasers have been asked by the Company to agree,
      nor has any Purchaser agreed, to desist from purchasing or selling, long and/or
      short, securities of the Company, or “derivative” securities based on securities
      issued by the Company or to hold the Shares for any specified term; (ii) that
      past or future open market or other transactions by any Purchaser, specifically
      including, without limitation, Short Sales or “derivative” transactions, before
      or after the closing of this or future private placement transactions, may
      negatively impact the market price of the Company’s publicly-traded securities;
      (iii) that any Purchaser, and counter-parties in “derivative” transactions to
      which any such Purchaser is a party, directly or indirectly, presently may
      have
      a “short” position in the Common Stock, and (iv) that each Purchaser shall not
      be deemed to have any affiliation with or control over any arm’s length
      counter-party in any “derivative” transaction. The
      Company further understands and acknowledges that (a) one or more Purchasers
      may
      engage in hedging activities at various times during the period that the Shares
      are outstanding, and (b) such hedging activities (if any) could reduce the
      value
      of the existing stockholders' equity interests in the Company at and after
      the
      time that the hedging activities are being conducted.  The Company
      acknowledges that such aforementioned hedging activities do not constitute
      a
      breach of any of the Transaction Documents.

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

       

    

    (ff)    Regulation
      M Compliance. 
      The Company has not, and to its knowledge no one acting on its behalf has,
      (i)
      taken, directly or indirectly, any action designed to cause or to result in
      the
      stabilization or manipulation of the price of any security of the Company to
      facilitate the sale or resale of any of the Shares, (ii) sold, bid for,
      purchased, or, paid any compensation for soliciting purchases of, any of the
      Shares, or (iii) paid or agreed to pay to any Person any compensation for
      soliciting another to purchase any other securities of the Company, other than,
      in the case of clauses (ii) and (iii), compensation paid to the Company’s
      placement agent in connection with the placement of the Shares.

     

    (gg)    FDA.
      As to
      each product subject to the jurisdiction of the U.S. Food and Drug
      Administration (“FDA”)
      under
      the Federal Food, Drug and Cosmetic Act, as amended, and the regulations
      thereunder (“FDCA”)
      that
      is manufactured, packaged, labeled, tested, distributed, sold, and/or marketed
      by the Company or any of its Subsidiaries (each such product, a “Pharmaceutical
      Product”),
      such
      Pharmaceutical Product is being manufactured, packaged, labeled, tested,
      distributed, sold and/or marketed by the Company in compliance with all
      applicable requirements under FDCA and similar laws, rules and regulations
      relating to registration, investigational use, premarket clearance, licensure,
      or application approval, good manufacturing practices, good laboratory
      practices, good clinical practices, product listing, quotas, labeling,
      advertising, record keeping and filing of reports, except where the failure
      to
      be in compliance would not have a Material Adverse Effect. There is no pending,
      completed or, to the Company's knowledge, threatened, action (including any
      lawsuit, arbitration, or legal or administrative or regulatory proceeding,
      charge, complaint, or investigation) against the Company or any of its
      Subsidiaries, and none of the Company or any of its Subsidiaries has received
      any notice, warning letter or other communication from the FDA or any other
      governmental entity, which (i) contests the premarket clearance, licensure,
      registration, or approval of, the uses of, the distribution of, the
      manufacturing or packaging of, the testing of, the sale of, or the labeling
      and
      promotion of any Pharmaceutical Product, (ii) withdraws its approval of,
      requests the recall, suspension, or seizure of, or withdraws or orders the
      withdrawal of advertising or sales promotional materials relating to, any
      Pharmaceutical Product, (iii) imposes a clinical hold on any clinical
      investigation by the Company or any of its Subsidiaries, (iv) enjoins production
      at any facility of the Company or any of its Subsidiaries, (v) enters or
      proposes to enter into a consent decree of permanent injunction with the Company
      or any of its Subsidiaries, or (vi) otherwise alleges any violation of any
      laws,
      rules or regulations by the Company or any of its Subsidiaries, and which,
      either individually or in the aggregate, would have a Material Adverse Effect.
      The
      properties, business and operations of the Company have been and are being
      conducted in all material respects in accordance with all applicable laws,
      rules
      and regulations of the FDA.  The Company has not been informed by the FDA
      that the FDA will prohibit the marketing, sale, license or use in the United
      States of any product proposed to be developed, produced or marketed by the
      Company nor has the FDA expressed any concern as to approving or clearing for
      marketing any product being developed or proposed to be developed by the
      Company.

     

    
      
        
        

      

      
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    3.2    Representations
      and Warranties of the Purchasers.
      Each
      Purchaser, for itself and for no other Purchaser, hereby represents and warrants
      as of the date hereof and as of the Closing Date to the Company as
      follows:

     

    (a)    Organization;
      Authority.
      Such
      Purchaser is an entity duly organized, validly existing and in good standing
      under the laws of the jurisdiction of its organization with full right,
      corporate or partnership power and authority to enter into and to consummate
      the
      transactions contemplated by this Agreement and otherwise to carry out its
      obligations hereunder and thereunder. The execution and delivery of this
      Agreement and performance by such Purchaser of the transactions contemplated
      by
      this Agreement have been duly authorized by all necessary corporate or similar
      action on the part of such Purchaser. Each Transaction Document to which it
      is a
      party has been duly executed by such Purchaser, and when delivered by such
      Purchaser in accordance with the terms hereof, will constitute the valid and
      legally binding obligation of such Purchaser, enforceable against it in
      accordance with its terms, except (i) as limited by general equitable principles
      and applicable bankruptcy, insolvency, reorganization, moratorium and other
      laws
      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)    Own
      Account.
      Such
      Purchaser is acquiring the Shares as principal for its own account and not
      with
      a view to or for distributing or reselling such Shares or any part thereof
      in
      violation of the Securities Act or any applicable state securities law, has
      no
      present intention of distributing any of such Shares in violation of the
      Securities Act or any applicable state securities law and has no direct or
      indirect arrangement or understandings with any other persons to distribute
      or
      regarding the distribution of such Shares (this representation and warranty
      not
      limiting such Purchaser’s right to sell the Shares immediately pursuant to the
      Registration Statement or otherwise in compliance with applicable federal and
      state securities laws) in violation of the Securities Act or any applicable
      state securities law. Such Purchaser is acquiring the Shares hereunder in the
      ordinary course of its business.

     

    (c)    Purchaser
      Status.
      At the
      time such Purchaser was offered the Shares, it was, and at the date hereof
      it is
      either: (i) an “accredited investor” as defined in Rule 501(a)(1), (a)(2),
      (a)(3), (a)(7) or (a)(8) under the Securities Act or (ii) a “qualified
      institutional buyer” as defined in Rule 144A(a) under the Securities Act. Such
      Purchaser is not required to be registered as a broker-dealer under Section
      15
      of the Exchange Act. 

     

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

     

    
      
        
        

      

      
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    (e)    Short
      Sales and Confidentiality Prior To The Date Hereof.
      Other
      than consummating the transactions contemplated hereunder, such Purchaser has
      not, nor has any Person acting on behalf of or pursuant to any understanding
      with such Purchaser, directly or indirectly executed any purchases or sales,
      including Short Sales, of the securities of the Company during the period
      commencing from
      the time
      that such Purchaser was first contacted by the Company or any other Person
      representing the Company inquiring whether such Purchaser had an interest in
      participating in the transactions contemplated hereunder until the date hereof
      (“Discussion
      Time”).
      Notwithstanding the foregoing, in the case of a Purchaser that is a
      multi-managed investment vehicle whereby separate portfolio managers manage
      separate portions of such Purchaser's assets and the portfolio managers have
      no
      direct knowledge of the investment decisions made by the portfolio managers
      managing other portions of such Purchaser's assets, the representation set
      forth
      above shall only apply with respect to the portion of assets managed by the
      portfolio manager that made the investment decision to purchase the Shares
      covered by this Agreement. Other than to other Persons party to this Agreement,
      such Purchaser has maintained the confidentiality of all disclosures made to
      it
      in connection with this transaction (including the existence and terms of this
      transaction).

     

    ARTICLE
      IV.

    OTHER
      AGREEMENTS OF THE PARTIES

     

    4.1    Furnishing
      of Information.
      Until
      one year from the Closing Date, the Company covenants to timely file (or obtain
      extensions in respect thereof and file within the applicable grace period)
      all
      reports required to be filed by the Company after the date hereof pursuant
      to
      the Exchange Act even if the Company is not then subject to the reporting
      requirements of the Exchange Act. Until one year from the Closing Date, if
      the
      Company is not required to file reports pursuant to the Exchange Act, it will
      prepare and furnish to the Purchasers and make publicly available in accordance
      with Rule 144(c) such information as is required for the Purchasers to sell
      the
      Shares under Rule 144. The Company further covenants that it will take such
      further action as any holder of Shares may reasonably request, to the extent
      required from time to time to enable such Person to sell such Shares without
      registration under the Securities Act within the requirements of the exemption
      provided by Rule 144.

     

    4.2    Integration.
      The
      Company shall not sell, offer for sale or solicit offers to buy or otherwise
      negotiate in respect of any security (as defined in Section 2 of the Securities
      Act) that would be integrated with the offer or sale of the Shares for purposes
      of the rules and regulations of any Trading Market such that it would require
      shareholder approval prior to the closing of such other transaction unless
      shareholder approval is obtained before the closing of such subsequent
      transaction.

     

    4.3    Securities
      Laws Disclosure; Publicity.
      The
      Company shall, by 8:30 a.m. (New York City time) on the Trading Day immediately
      following the date hereof, issue a Current Report on Form 8-K, disclosing the
      material terms of the transactions contemplated hereby, and filing the
      Transaction Documents as exhibits thereto. The Company and each

     

    
      
        
        

      

      
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     Purchaser
      shall consult with each other in issuing any other press releases with respect
      to the transactions contemplated hereby, and neither the Company nor any
      Purchaser shall issue any such press release or otherwise make any such public
      statement without the prior consent of the Company, with respect to any press
      release of any Purchaser, or without the prior consent of each Purchaser, with
      respect to any press release of the Company, which consent shall not
      unreasonably be withheld or delayed, except if such disclosure is required
      by
      law, in which case the disclosing party shall promptly provide the other party
      with prior notice of such public statement or communication. Notwithstanding
      the
      foregoing, the Company shall not publicly disclose the name of any Purchaser,
      or
      include the name of any Purchaser in any filing with the Commission or any
      regulatory agency or Trading Market, without the prior written consent of such
      Purchaser, except (i) as required by federal securities law in connection with
      the filing of final Transaction Documents (including signature pages thereto)
      with the Commission and (ii) to the extent such disclosure is required by law
      or
      Trading Market regulations, in which case the Company shall provide the
      Purchasers with prior notice of such disclosure permitted under this clause
      (ii).

     

    4.4    Shareholder
      Rights Plan. No claim will be made or enforced by the Company or, with the
      consent of the Company, any other Person, that any Purchaser is an “Acquiring
      Person” under any control share acquisition, business combination, poison pill
      (including any distribution under a rights agreement) or similar anti-takeover
      plan or arrangement in effect or hereafter adopted by the Company, or that
      any
      Purchaser could be deemed to trigger the provisions of any such plan or
      arrangement, by virtue of receiving Shares under the Transaction Documents
      or
      under any other agreement between the Company and the Purchasers.

     

    4.5    Non-Public
      Information. Except with respect to the material terms and conditions of the
      transactions contemplated by the Transaction Documents, the Company covenants
      and agrees that neither it nor any other Person acting on its behalf will
      provide any Purchaser or its agents or counsel with any information that the
      Company believes constitutes material non-public information, unless prior
      thereto such Purchaser shall have executed a written agreement regarding the
      confidentiality and use of such information. The Company understands and
      confirms that each Purchaser shall be relying on the foregoing covenant in
      effecting transactions in securities of the Company.

     

    4.6    Use
      of
      Proceeds. Except as set forth in the Prospectus Supplement, the Company
      shall use the net proceeds from the sale of the Shares hereunder for working
      capital purposes and shall not use such proceeds for (a) the satisfaction of
      any
      portion of the Company’s debt (other than payment of trade payables in the
      ordinary course of the Company’s business and prior practices), (b) the
      redemption of any Common Stock or Common Stock Equivalents or (c) the settlement
      of any outstanding litigation.

     

    4.7    Indemnification
      of Purchasers. Subject to the provisions of this Section 4.7, the Company
      will indemnify and hold each Purchaser and its directors, officers,
      shareholders, members, partners, employees and agents (and any other Persons
      with a functionally equivalent role of a Person holding such titles
      notwithstanding a lack of such title or any other title), each Person who
      controls such Purchaser (within the meaning of Section 15 of the Securities
      Act
      and Section 20 of the Exchange Act), and the directors, officers, 

     

    
      
        
        

      

      
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    shareholders,
      agents, members, partners or employees (and any other Persons with a
      functionally equivalent role of a Person holding such titles notwithstanding
      a
      lack of such title or any other title) of such controlling persons (each, a
      “Purchaser 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 that any such Purchaser Party may suffer or incur as
      a
      result of or relating to (a) any breach of any of the representations,
      warranties, covenants or agreements made by the Company in this Agreement or
      in
      the other Transaction Documents or (b) any action instituted against a Purchaser
      in any capacity, or any of them or their respective Affiliates, by any
      stockholder of the Company who is not an Affiliate of such Purchaser, with
      respect to any of the transactions contemplated by the Transaction Documents
      (unless such action is based upon a breach of such Purchaser’s representations,
      warranties or covenants under the Transaction Documents or any agreements or
      understandings such Purchaser may have with any such stockholder or any
      violations by the Purchaser of state or federal securities laws or any conduct
      by such Purchaser which constitutes fraud, gross negligence, willful misconduct
      or malfeasance). If any action shall be brought against any Purchaser Party
      in
      respect of which indemnity may be sought pursuant to this Agreement, such
      Purchaser Party shall promptly notify the Company in writing, and the Company
      shall have the right to assume the defense thereof with counsel of its own
      choosing reasonably acceptable to the Purchaser Party. Any Purchaser Party
      shall
      have the right to employ separate counsel in any such action and participate
      in
      the defense thereof, but the fees and expenses of such counsel shall be at
      the
      expense of such Purchaser Party except to the extent that (i) the employment
      thereof has been specifically authorized by the Company in writing, (ii) the
      Company has failed after a reasonable period of time to assume such defense
      and
      to employ counsel or (iii) in such action there is, in the reasonable opinion
      of
      such separate counsel, a material conflict on any material issue between the
      position of the Company and the position of such Purchaser Party, in which
      case
      the Company shall be responsible for the reasonable fees and expenses of no
      more
      than one such separate counsel. The Company will not be liable to any Purchaser
      Party under this Agreement (i) for any settlement by a Purchaser Party effected
      without the Company’s prior written consent, which shall not be unreasonably
      withheld or delayed; or (ii) to the extent, but only to the extent that a loss,
      claim, damage or liability is attributable to any Purchaser Party’s breach of
      any of the representations, warranties, covenants or agreements made by such
      Purchaser Party in this Agreement or in the other Transaction
      Documents.

     

    4.8    Listing
      of
      Common Stock. The
      Company hereby agrees to use best efforts to maintain the listing of the Common
      Stock on a Trading Market, and as soon as reasonably practicable following
      the
      Closing (but not later than the Closing Date) to list all of the Shares on
      such
      Trading Market. The Company further agrees, if the Company applies to have
      the
      Common Stock traded on any other Trading Market, it will include in such
      application all of the Shares, and will take such other action as is necessary
      to cause all of the Shares to be listed on such other Trading Market as promptly
      as possible. The Company will take all action reasonably necessary to continue
      the listing and trading of its Common Stock on a Trading Market and will comply
      in all respects with the Company’s reporting, filing and other obligations under
      the bylaws or rules of the Trading Market.

     

    
      
        
        

      

      
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    4.9    Equal
      Treatment of Purchasers.
      No
      consideration shall be offered or paid to any Person to amend or consent to
      a
      waiver or modification of any provision of any of the Transaction Documents
      unless the same consideration is also offered to all of the parties to the
      Transaction Documents. For clarification purposes, this provision constitutes
      a
      separate right granted to each Purchaser by the Company and negotiated
      separately by each Purchaser, and is intended for the Company to treat the
      Purchasers as a class and shall not in any way be construed as the Purchasers
      acting in concert or as a group with respect to the purchase, disposition or
      voting of Shares or otherwise.

     

    4.10         
      Participation
      in Future Financing. 

     

    (a)    From
      the
      date hereof until the date that is the 6 month anniversary of the Closing Date,
      upon any issuance by the Company or any of its Subsidiaries of Common Stock
      or
      Common Stock Equivalents for cash consideration (a “Subsequent
      Financing”),
      each
      Purchaser shall have the right to participate in the Subsequent Financing up
      to
      an amount equal to 100% of the Subsequent Financing (the “Participation
      Maximum”)
      on the
      same terms, conditions and price provided for in the Subsequent Financing,
      unless the Subsequent Financing is a registered public offering, in which case
      the Company shall offer each Purchaser the right to participate in such public
      offering when it is lawful for the Company to do so, but no Purchaser shall
      be
      entitled to purchase any particular amount of such public
      offering. 

     

    (b)    At
      least
      5 Trading Days prior to the closing of the Subsequent Financing, the Company
      shall deliver to each Purchaser a written notice of its intention to effect
      a
      Subsequent Financing (“Pre-Notice”),
      which
      Pre-Notice shall ask such Purchaser if it wants to review the details of such
      financing (such additional notice, a “Subsequent
      Financing Notice”). 
      Upon the request of a Purchaser, and only upon a request by such Purchaser,
      for
      a Subsequent Financing Notice, the Company shall promptly, but no later than
      1
      Trading Day after such request, deliver a Subsequent Financing Notice to such
      Purchaser.  The Subsequent Financing Notice shall describe in reasonable
      detail the proposed terms of such Subsequent Financing, the amount of proceeds
      intended to be raised thereunder and the Person or Persons through or with
      whom
      such Subsequent Financing is proposed to be effected and shall include a term
      sheet or similar document relating thereto as an
      attachment.   

     

    (c)    Any
      Purchaser desiring to participate in such Subsequent Financing must provide
      written notice to the Company by not later than 5:30 p.m. (New York City time)
      on the 5th
      Trading
      Day after all of the Purchasers have received the Pre-Notice that the Purchaser
      is willing to participate in the Subsequent Financing, the amount of the
      Purchaser’s participation, and that the Purchaser has such funds ready, willing,
      and available for investment on the terms set forth in the Subsequent Financing
      Notice. If the Company receives no notice from a Purchaser as of such
      5th
      Trading
      Day, such Purchaser shall be deemed to have notified the Company that it does
      not elect to participate.  

     

    (d)    If
      by
      5:30 p.m. (New York City time) on the 5th
      Trading
      Day after all of the Purchasers have received the Pre-Notice, notifications
      by
      the Purchasers of their willingness to participate in the Subsequent Financing
      (or to cause their designees to participate) is, in the aggregate, less than
      the
      total amount of the Subsequent Financing, then the Company may effect the
      remaining portion of such Subsequent Financing on the terms and with the Persons
      set forth in the Subsequent Financing Notice.  

     

    
      
        
        

      

      
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    (e)    If
      by
      5:30 p.m. (New York City time) on the 5th
      Trading
      Day after all of the Purchasers have received the Pre-Notice, the Company
      receives responses to a Subsequent Financing Notice from Purchasers seeking
      to
      purchase more than the aggregate amount of the Participation Maximum, each
      such
      Purchaser shall have the right to purchase its Pro Rata Portion (as defined
      below) of the Participation Maximum.  “Pro
      Rata Portion”
means
      the ratio of (x) the Subscription Amount of Shares purchased on the Closing
      Date
      by a Purchaser participating under this Section 4.10 and (y) the sum of the
      aggregate Subscription Amounts of Shares purchased on the Closing Date by all
      Purchasers participating under this Section 4.10.

     

    (f)    The
      Company must provide the Purchasers with a second Subsequent Financing Notice,
      and the Purchasers will again have the right of participation set forth above
      in
      this Section 4.10, if the Subsequent Financing subject to the initial Subsequent
      Financing Notice is not consummated for any reason on the terms set forth in
      such Subsequent Financing Notice within 60 Trading Days after the date of the
      initial Subsequent Financing Notice.

     

    (g)    Notwithstanding
      the foregoing, this Section 4.10 shall not apply in respect of (i)
      an
      Exempt
      Issuance or
      (ii)
      an underwritten public offering of Common Stock.

     

    4.11        
      Subsequent
      Equity Sales.
      

     

    (a)    From
      the
      date hereof until December 31, 2007, neither the Company nor any Subsidiary
      shall issue shares of Common Stock or Common Stock Equivalents without the
      prior
      written consent of at least 51% in interest of the Purchasers, based upon the
      Shares held by each such Purchaser at the time such consent is
      required.

     

    (b)    Notwithstanding
      the foregoing, this Section 4.11 shall not apply in respect of an Exempt
      Issuance.

     

    4.12        
      Short
      Sales and Confidentiality After The Date Hereof.
      Each
      Purchaser, severally and not jointly with the other Purchasers, covenants that
      neither it nor any Affiliate acting on its behalf or pursuant to any
      understanding with it will execute any Short Sales during the period commencing
      at the Discussion Time and ending at the time that the transactions contemplated
      by this Agreement are first publicly announced as described in Section
      4.3. 
      Each
      Purchaser, severally and not jointly with the other Purchasers, covenants that
      until such time as the transactions contemplated by this Agreement are publicly
      disclosed by the Company as described in Section 4.3, such Purchaser will
      maintain the confidentiality of the existence and terms of this transaction
      and
      the information included in the Disclosure Schedules.  Notwithstanding
      the foregoing, no Purchaser makes any representation, warranty or covenant
      hereby that it will not engage in Short Sales in the securities of the Company
      after the time that the transactions contemplated by this Agreement are first
      publicly announced as described in Section 4.3.  Notwithstanding
      the foregoing, in the case of a Purchaser that is a multi-managed investment
      vehicle whereby separate portfolio managers manage separate portions of such
      Purchaser’s assets and the portfolio managers have no direct knowledge of the
      investment decisions made by the portfolio managers managing other portions
      of
      such Purchaser’s assets, the covenant set forth above shall only apply with
      respect to the portion of assets managed by the portfolio manager that made
      the
      investment decision to purchase the Shares covered by this
      Agreement.

     

    
      
        
        

      

      
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    4.13        
      Delivery
      of Shares After Closing. The Company shall deliver, or cause to be
      delivered, the respective Shares purchased by each Purchaser to such Purchaser
      within 3 Trading Days of the Closing Date.

     

    4.14         Capital
      Changes. Until the one year anniversary of the Closing Date, the Company
      shall not undertake a reverse stock split or reclassification of the Common
      Stock without the prior written consent of the Purchasers holding a majority
      in
      interest of the Shares.

     

    ARTICLE
      V.

    MISCELLANEOUS

     

    5.1    Termination. 
      This Agreement may be terminated by any Purchaser, as to such Purchaser’s
      obligations hereunder only and without any effect whatsoever on the obligations
      between the Company and the other Purchasers, by written notice to the other
      parties, if the Closing has not been consummated on or before July 3, 2007;
      provided, however, that no such termination will affect the right of any party
      to sue for any breach by the other party (or parties).

     

    5.2    Fees
      and Expenses. Except as expressly set forth in the Transaction Documents to
      the contrary, 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 this Agreement. The Company shall pay all Transfer Agent fees,
      stamp taxes and other taxes and duties levied in connection with the delivery
      of
      any Shares to the Purchasers.

     

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

     

    5.4    Notices.
      Any and all notices or other communications or deliveries required or permitted
      to be provided hereunder shall be in writing and shall be deemed given and
      effective on the earliest of (a) the date of transmission, if such notice or
      communication is delivered via facsimile at the facsimile number set forth
      on
      the signature pages attached hereto prior to 5:30 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
      set
      forth on the signature pages attached hereto on a day that is not a Trading
      Day
      or later than 5:30 p.m. (New York City time) on any Trading Day, (c) the
      2nd
      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 set forth on the signature pages attached hereto.

     

    
      
        
        

      

      
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    5.5    Amendments;
      Waivers. No provision of this Agreement may be waived or amended except in a
      written instrument signed, in the case of an amendment, by the Company and
      the
      Purchasers of at least 85% of the Shares still held by the Purchasers or, in
      the
      case of a waiver, by the party against whom enforcement of any such waived
      provision is sought. No waiver of any default with respect to any provision,
      condition or requirement of this Agreement shall be deemed to be a continuing
      waiver in the future or a waiver of any subsequent default or a waiver of any
      other provision, condition or requirement hereof, nor shall any delay or
      omission of any party to exercise any right hereunder in any manner impair
      the
      exercise of any such right.

     

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

     

    5.7    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 each Purchaser (other than by merger). Any Purchaser may
      assign any or all of its rights under this Agreement to any Person to whom
      such
      Purchaser assigns or transfers any Shares, provided such transferee agrees
      in
      writing to be bound, with respect to the transferred Shares, by the provisions
      of the Transaction Documents that apply to the “Purchasers.”

     

    5.8    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 4.8.

     

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

     

    
      
        
        

      

      
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    5.10    Survival.
      The representations and warranties contained herein shall survive the Closing
      and the delivery of the Shares.

     

    5.11    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 or by e-mail delivery of a “.pdf” format data file, 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 or “.pdf” signature page were an original thereof.

     

    5.12    Severability.
      If any term, provision, covenant or restriction of this Agreement is held by
      a
      court of competent jurisdiction to be invalid, illegal, void or unenforceable,
      the remainder of the terms, provisions, covenants and restrictions set forth
      herein shall remain in full force and effect and shall in no way be affected,
      impaired or invalidated, and the parties hereto shall use their commercially
      reasonable efforts to find and employ an alternative means to achieve the same
      or substantially the same result as that contemplated by such term, provision,
      covenant or restriction. It is hereby stipulated and declared to be the
      intention of the parties that they would have executed the remaining terms,
      provisions, covenants and restrictions without including any of such that may
      be
      hereafter declared invalid, illegal, void or unenforceable.

     

    5.13    Rescission
      and Withdrawal Right. Notwithstanding anything to the contrary contained in
      (and without limiting any similar provisions of) any of the other Transaction
      Documents, whenever any Purchaser 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 Purchaser 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, the Purchaser shall be required
      to
      return any shares of Common Stock delivered in connection with any such
      rescinded exercise notice.

     

    5.14    Replacement
      of Shares. If any certificate or instrument evidencing any Shares is
      mutilated, lost, stolen or destroyed, the Company shall issue or cause to be
      issued in exchange and substitution for and upon cancellation thereof (in the
      case of mutilation), 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. The applicant for a new certificate
      or instrument under such circumstances shall also pay any reasonable third-party
      costs (including customary indemnity) associated with the issuance of such
      replacement Shares.

     

    
      
        
        

      

      
        26

        
          

        

      

      
        
        

      

       

    

    5.15    Remedies.
      In addition to being entitled to exercise all rights provided herein or granted
      by law, including recovery of damages, each of the Purchasers 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 contained in the
      Transaction Documents and hereby agrees to waive and not to assert in any action
      for specific performance of any such obligation the defense that a remedy at
      law
      would be adequate.

     

    5.16    Payment
      Set Aside. To the extent that the Company makes a payment or payments to any
      Purchaser pursuant to any Transaction Document or a Purchaser 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.

     

    5.17    Independent
      Nature of Purchasers’ Obligations and Rights. The obligations of each
      Purchaser under any Transaction Document are several and not joint with the
      obligations of any other Purchaser, and no Purchaser shall be responsible in
      any
      way for the performance or non-performance of the obligations of any other
      Purchaser under any Transaction Document. Nothing contained herein or in any
      other Transaction Document, and no action taken by any Purchaser pursuant
      thereto, shall be deemed to constitute the Purchasers as a partnership, an
      association, a joint venture or any other kind of entity, or create a
      presumption that the Purchasers are in any way acting in concert or as a group
      with respect to such obligations or the transactions contemplated by the
      Transaction Documents. Each Purchaser 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 Purchaser to be joined as an additional party in any
      proceeding for such purpose. Each Purchaser has been represented by its own
      separate legal counsel in their review and negotiation of the Transaction
      Documents. For reasons of administrative convenience only, Purchasers and their
      respective counsel have chosen to communicate with the Company through FWS.
      FWS
      does not represent all of the Purchasers but only Rodman & Renshaw, LLC, the
      placement agent for the transaction. The Company has elected to provide all
      Purchasers with the same terms and Transaction Documents for the convenience
      of
      the Company and not because it was required or requested to do so by the
      Purchasers.

     

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

     

    
      
        
        

      

      
        27

        
          

        

      

      
        
        

      

       

    

    5.19    Saturdays,
      Sundays, Holidays, etc.If
      the
      last or appointed day for the taking of any action or the expiration of any
      right required or granted herein shall not be a Business Day, then such action
      may be taken or such right may be exercised on the next succeeding Business
      Day.

     

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

     

    5.21    Waiver
      of Jury Trial. In any action, suit or proceeding in any jurisdiction brought
      by any party against any other party, the parties each knowingly and
      intentionally, to the greatest extent permitted by applicable law, hereby
      absolutely, unconditionally, irrevocably and expressly waives forever trial
      by
      jury.

     

     

    (Signature
      Pages Follow)

     

    
      
        
        

      

      
        28

        
          

        

      

      
        
        

      

    

    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.

     

    
      	
              PEREGRINE
                PHARMACEUTICALS, INC.

               

            	
              Address
                for Notice:

            
	
              By:__________________________________________

            	
              Fax:

            
	
              Name:

              Title: 

            	 
	 	 
	
              With
                a copy to (which shall not constitute notice):

            	 

    

    

    

    

    [REMAINDER
      OF PAGE INTENTIONALLY LEFT BLANK

    SIGNATURE
      PAGE FOR PURCHASER FOLLOWS]

    
      
        
        

      

      
        29

        
          

        

      

      
        
        

      

    

    [PURCHASER
      SIGNATURE PAGES TO PPHM SECURITIES PURCHASE AGREEMENT]

    

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

     

    Name
      of
      Purchaser:
      _____________________________________________________________________________________________________________________

     

    Signature
      of Authorized Signatory of Purchaser:
      ______________________________________________________________________________________________

     

    Name
      of
      Authorized Signatory:
      ____________________________________________________________________________________________________________

     

    Title
      of
      Authorized Signatory:
      _____________________________________________________________________________________________________________

     

    Email
      Address of
      Purchaser:_______________________________________________________________________________________________________________

     

    Fax
      Number of Purchaser:
      _________________________________________________________________________________________________________________

     

    Address
      for Notice of Purchaser:

    

    

    Address
      for Delivery of Securities for Purchaser (if not same as address for
      notice):

    DTC#

    

    Account#

    

    

    Subscription
      Amount: $_________________

    

    Shares:
      _________________

    

    

    EIN
      Number: [PROVIDE
      THIS UNDER SEPARATE COVER]

    

    

    [SIGNATURE
      PAGES CONTINUE]

    
      
        
        

      

      
        30

        
          

        

      

      
        
        

      

    

    Schedule
      3(a)

    Listing
      of Subsidiaries

     

    During
      January 2002, the Company announced the formation of Avid Bioservices, Inc.,
      a
      wholly owned subsidiary of Peregrine Pharmaceuticals, Inc.

    

    On
      April
      24, 1997, the Company acquired its wholly owned subsidiary, Vascular Targeting
      Technologies, Inc. (formerly known as Peregrine Pharmaceuticals,
      Inc.).

    

    

    
      
        
        

      

      
        31

        
          

        

      

      
        
        

      

    

    Schedule
      3.1(g)

    

    Capitalization
      Table

    

    The
      capitalization of the Company includes the following as of April 30,
      2007:

    

    
      	 	 	 	 
	
              Common
                shares issued and outstanding 

            	 	 	
              196,112,201

            	 
	
              Common
                shares reserved for issuance under stock option plans

            	 	 	
              11,537,946

            	 
	
              Common
                shares available for future grant under option plans

            	 	 	
              4,651,409

            	 
	
              Common
                shares issuable upon exercise of outstanding warrants

            	 	 	
              422,865

            	 
	
               

              Total

            	 	 	
              
              

              212,724,421

            	 

    

    

    

    
      
        
        

      

      
        32

        
          

        

      

      
        
        

      

    

    Schedule
      3.1(z)

    

    Indebtedness

    

    The
      Company has financed certain laboratory equipment under note payable agreements
      with General Electric Capital Corporation. As of April 30, 2007, the aggregate
      note payable balance due to General Electric Capital Corporation is $498,000.
      

    

    

    
      
        
        

      

      
        33

        
          

        

      

      
        
        

      

    

    

    Schedule
      3.1(cc)

    

    Accountants

    

    The
      Company’s appointed independent registered public accounting firm is Ernst &
Young LLP.

    

    
34AeroCentury Purchases F100 11331

    

      

      

      

      AIRCRAFT
        SALE AGREEMENT

      

      

      dated
        _____ June 2007

      

      between

      

      

      

      Pembroke
        Capital Aircraft (Shannon) Limited

      

      as

      

      Seller

      

      

      and

      

      

      AeroCentury
        Corp.

      

      as

      

      Purchaser

      

      

      

      

      

      

      

      in
        respect of

       

      One
        FOKKER model F.28 MK 0100 Aircraft

       

      Also
        described: 

      In
        the FAA records as - F.28 MK 0100 

      In
        the International Registry drop down menu as - FOKKER model F100

      and

      In
        the International Registry by free text entry as - model
        F28MK0100

      and

      In
        the Type Certificate Data Sheet as - FOKKER model F.28 Mark
        0100

      

      MSN
        11331

      

      

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

      

      

      CONTENTS

      

      
        	 	 Clause 	
                 Page

              
	
                 1.

              	 Definitions and
                Interpretation	
                 3

              
	
                 2.

              	 Sale and
                Purchase	
                 7

              
	
                 3.

              	 Payments	
                 7

              
	
                 4.

              	 Delivery and Acceptance	
                 9

              
	
                 5.

              	 Conditions Precedent - Seller	
                 11

              
	
                 6.

              	 Conditions Precedent -
                Purchaser	
                 12

              
	
                 7.

              	 Representations and Warranties of
                Seller	
                 14

              
	
                 8.

              	 Representations and Warranties of
                Purchaser	
                 15

              
	
                 9.

              	 Taxes 	
                 17

              
	
                 10.

              	 Warranties and Disclaimers	
                 17

              
	
                 11.

              	 Indemnification	
                 18

              
	
                 12.

              	Insurance 	
                 20

              
	
                 13.

              	 Assignment/Transfer	
                 21

              
	
                 14.

              	 Confidentiality	
                 21

              
	
                 15.

              	 Miscellanous	
                 21

              
	
                 16.

              	 Notices	
                 22

              
	
                 17.

              	 Governing Law and
                Jurisdiction   	
                 23

              

      

        

      

       

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

      

      THIS
        AIRCRAFT SALE AGREEMENT
        is made
        on _____ June 2007

      

      between

      

      
        	
                (1)

              	
                Pembroke
                  Capital Aircraft (Shannon) Limited,
                  a
                  limited liability company incorporated under the laws of Ireland
                  and
                  having its principal place of business at Shannon Airport House,
                  Shannon,
                  Co. Clare, Ireland (the "Seller");
                  and

              

      

      

      
        	
                (2)

              	
                Aero
                  Century Corp.,
                  a
                  corporation incorporated under the laws of the State of Delaware,
                  United
                  States and having its principal place of business at 1440 Chapin
                  Ave,
                  Suite 310, Burlingame, California 94010, USA (the "Purchaser").

              

      

      

      

      RECITAL

      

      The
        Seller has agreed to sell and the Purchaser has agreed to purchase the Aircraft
        on the terms and conditions set out below.

      

      NOW
        IT IS AGREED
        as
        follows:

      

      1. Definitions
        and Interpretation 

      1.1 In
        this
        Agreement capitalized terms shall have the following meanings unless the
        context
        requires otherwise:

       

      "Aircraft" means
        the
        FOKKER model F.28 MK 0100 Aircraft (also described: in the FAA records as
        - F.28
        MK 0100, in the International Registry drop down menu as - FOKKER model F100,
        and in the International Registry by free text entry as - model F28MK0100
        and in
        the Type Certificate Data Sheet as - FOKKER model F.28 Mark 0100) more
        particularly described in Schedule 1 and includes the Engines, Parts and
        any
        other items of equipment installed in, or furnished with, the Aircraft at
        delivery of the Aircraft to Lessee under the Lease (excluding those items
        of
        equipment, furnishings and parts which have, or will have been installed
        on the
        Aircraft by Lessee on or prior to the Delivery Date and ownership of which
        is
        not required, pursuant to the provisions of the Lease, to vest in or be
        transferred to the Seller but including those items of equipment, furnishings
        and parts which have, or will have been removed from the Aircraft by Lessee
        on
        or prior to the Delivery Date and ownership of which is, pursuant to the
        provisions of the Lease, vested in or required to be vested in the Seller)
        and,
        where the context permits, references to the Aircraft shall include the Aircraft
        Documents;

       

      "Aircraft
        Documents"
        has the
        meaning given to it in the Lease and all records, manual and documentation
        relating to the Aircraft that are in the possession of Lessor;

       

      "APU
        Maintenance Reserve Rate Compensation"
        means
        the compensation for loss of revenue during the term of the Lease as a result
        of
        Amendment No.1 to the Lease;

       

      "Bill
        of Sale"
        means a
        bill of sale from the Seller to the Purchaser substantially in the form of
        Schedule 2; 

       

      "Business
        Day" means
        a
        day, other than a Saturday or a Sunday, on which banks are open for business
        in
        Dublin, Ireland and San Francisco, California, USA;

       

      ÒCape
        Town Convention"
        means,
        collectively, the Convention on International Interests in Mobile Equipment
        and
        the Protocol to the Convention on International Interests in Mobile Equipment
        on
        matters specific to Aircraft Equipment dated 16 November 2001;

       

      "C-Check
        Contribution"
        means
        the Lessor's contribution to the first C-Check of the Aircraft and the Other
        Aircraft as set forth in paragraph 1 of Part 3 of Appendix 1 of
        the Lease;

       

      "Claims"
        has the
        meaning given to it in Clause 11.1 of this Agreement;

       

      "Default" has
        the
        meaning given to it in the Lease;

       

      "Delivery" means
        the
        time at which the Purchaser shall obtain title to the Aircraft from the Seller
        in accordance with this Agreement;

       

      "Delivery
        Date" means
        the
        date on which Delivery shall occur;

       

      "Delivery
        Location" means
        a
        location as agreed between Seller and Purchaser in accordance with Clause
        9;

       

      "Deposit"
        the sum
        of the First Instalment and the Second Instalment;

       

      "Dollars" and
        "US$"
        means
        the lawful currency for the time being of the United States of
        America;

       

      "Effective
        Time"
        has the
        meaning ascribed to it in the Lease Novation;

       

      "Effective
        Time Notice"
        has the
        meaning ascribed to it in the Lease Novation;

       

      "Engines" means
        the
        engines described in Schedule 1;

       

      "Expected
        Delivery Date"
        means
        on or about 27 or 28 June 2007 provided Lessee fully cooperates or such
        other date as the parties may agree but in no event later than 04 July
 2007; 

       

      "First
        Instalment"
        means
        the sum of US$ 150,000.-;

       

      "Governmental
        Entity" includes
        (i) any national government, political subdivision thereof or local jurisdiction
        therein; (ii) any board, commission, department, division, organ,
        instrumentality, court or agency of any thereof, however constituted; and
        (iii)
        any association, organisation or institution of which any thereof is a member
        or
        to whose jurisdiction any thereof is subject or in whose activities any thereof
        is a participant;

       

      "Inspection
        Notice"
        means
        the notice received on 30 April, 2007 by Seller from Purchaser stating that
        the
        results of its inspection of the Aircraft are acceptable;

       

      "International
        Interest"
        has the
        meaning set forth in the Cape Town Convention;

       

      "International
        Registry"
        means
        the international registry established pursuant to the Cape Town
        Convention;

      

      "Law"
        includes (i) any statute, decree, constitution, regulation, order or other
        directive of any Governmental Entity; (ii) any treaty, pact, compact or other
        agreement to which any Governmental Entity is a signatory or party; (iii)
        any
        judicial or administrative interpretation or application of any thereof;
        and
        (iv) any amendment or revision of any thereof;

       

      "Lease"
        means
        the aircraft lease agreement dated 23 January 2007 between the Lessor,
        the Lessee and the Lease Guarantor as amended from time to time;

       

      "Lease
        Documents"
        has the
        meaning given to it in the Lease Novation;

       

      "Lease
        Guarantor"
        means
        Bon Air Beleggings en Participatie Maatschappij N.V. (BBPM), a company
        incorporated and existing under the laws of the Netherlands Antilles and
        having
        its principal place of business at Kaya L.D. Gerhardts # 8, Bonaire,
        Netherlands Antilles;

       

      "Lease
        Novation"
        means
        the Aircraft Lease Amendment and Novation Agreement to be entered into on
        or
        prior to the Delivery Date between the Lessor, the Purchaser, the Lessee
        and the
        Lease Guarantor in respect of the Lease and the Lessee Certificate of
        Acceptance;

       

      "Lessee"
        means
        Dutch Antilles Express B.V., a company incorporated and existing under the
        laws
        of the Netherlands Antilles and having its principal place of business at
        Plasa
        Medardo S.V. Thielmann Z/N, Bonaire, Netherlands Antilles;

       

      "Lessee
        Certificate of Acceptance"
        means
        the Certificate of Acceptance dated 24 January 2007 delivered by the
        Lessee to the Lessor under the Lease;

       

      "Lessor"
        means
        Germania Fluggesellschaft mbH a company incorporated under the laws of the
        Federal Republic of Germany and having its principal place of business at
        Riedemannweg 58, 13627 Berlin, Germany;

       

      "Lessor
        Lien"
        has the
        meaning given to it in the Lease;

       

      "Maintenance
        Reserves"
        has the
        meaning given to it in the Lease;

       

      "Material
        Damage"
        means
        damage to the Aircraft, the cost of repair of which shall, in the reasonable
        opinion of Fokker Services B.V. exceed US$ 500,000.-;

       

      "Nationality
        Registry"
        means
        the nationality registry in the Netherlands Antilles (as such registry is
        established under The National Decree Supervision Aviation, as amended
        (Landsbeluit
        Toezicht Luchtvaart, PB
        2003,
        56))
        (Nationaliteitsregister van de Nederlandse Antillen);

       

      "Novated
        Lease"
        means
        the Lease as novated and amended by the Lease Novation;

       

      "Other
        Aircraft"
        means
        the Fokker 100 aircraft with the manufacturer's serial number
        11310;

       

      "Part"
        has the
        meaning given to it in the Lease;

       

      "Permitted
        Lien"
        has the
        meaning given to it under the Lease.

       

      "Purchase
        Price"
        means
        US$ 6,860,000.-;

       

      "Purchaser
        Indemnitees"
        means
        the Purchaser and JetFleet Management Corp. and each Lender and including
        any of
        their respective affiliates, successors and assigns, shareholders, directors,
        officers, servants, agents and employees;

       

      "Rent"
        has the
        meaning given to it in the Lease;

       

      "Second
        Instalment"
        means
        the sum of US$ 300,000.-;

       

      "Security
        Deposit" has
        the
        meaning given to it in the Lease;

       

      "Security
        Interest" means
        any
        mortgage, charge, lien, pledge, encumbrance, hypothecation, lease, sublease,
        security interest, judgment, writ, order, national or international interest,
        or
        right of possession of any kind whatsoever, however and wherever created
        or
        arising and whether or not consensual (including any arrangement or agreement
        to
        give or effect any of the foregoing and any conditional sale or other title
        retention agreement);

       

      "Seller
        Indemnitees"
        means
        the Seller, Germania Express GmbH, Lessor, Deutsche Leasing AG, Deutsche
        Sparkassen Leasing AG & Co. KG, Pembroke Capital Shannon Limited, and
        including any of their respective affiliates, successors and assigns,
        shareholders, directors, officers, servants, agents and employees; 

       

      "Taxes"
        means
        any and all present and future sales, use, personal property, customs, ad
        valorem, value added, consumption, turnover, stamp, interest equalisation,
        income, gross receipts or other taxes, fees, withholdings, imposts, duties,
        deductions, levies or other charges of any nature together with any penalties,
        fines or interest thereon, imposed, levied or assessed by, or otherwise payable
        to, any Government Entity;

       

      "Total
        Loss"
        has the
        meaning given to it in the Lease; and

       

      "Transaction
        Documents" means
        this Agreement, the Lease Novation, the Effective Time Notice, the Bill of
        Sale
        and all notices, consents, confirmations and certificates and other documents
        related thereto and, in relation to a particular person, means such documents
        as
        that party has executed or is to execute.

       

      1.2 (a) Clause
        headings are for ease of reference only.

       

      (b) References
        in this Agreement to Clauses, paragraphs or Schedules are, unless otherwise
        specified, to be construed as references to clauses, paragraphs of and Schedules
        to this Agreement.

       

      (c) References
        in this Agreement to any statute or other legislative provision shall include
        any statutory or legislative modification or re-enactment thereof, or any
        substitution therefore and all regulations relating thereto, issued or
        promulgated by a Government Entity.

       

      (d) References
        in this Agreement to "relevant
        statutory provision"
        shall
        include references to any provision of the laws of any jurisdiction which
        may
        from time to time be applicable.

       

      (e) References
        in this Agreement to any agreement, document or instrument, except in clause
        7.2
        hereof, shall include such agreement, document or instrument as the same
        may
        from time to time be varied, amended, supplemented, novated or
        substituted.

       

      (f) References
        in this Agreement to the word "person"
        or
        "persons"
        include, without limitation, individuals, firms, corporations, government
        agencies, authorities and other bodies, incorporated or unincorporated and
        whether having distinct legal personality or not.

       

      (g) References
        in this Agreement to any party hereto or any person include references to
        any
        successor or permitted assign of such party or person.

       

      (h) References
        in this Agreement to the Aircraft include any part of the Aircraft, and,
        where
        the context so admits, any of the Aircraft Documents, and references to any
        part
        of the Aircraft include any part of any Engine.

       

      (i) Unless
        the context otherwise requires, words denoting the singular number shall
        include
        the plural and vice versa.

       

      (j) Reference
        in this Agreement to the word "written"
        or
        "in
        writing"
        shall
        include any means of visible reproduction.

      

      2. Sale
        and Purchase

       

      2.1 The
        Seller agrees to sell to the Purchaser, and the Purchaser agrees to purchase
        from the Seller, the Aircraft for the Purchase Price at the Delivery Location
        on
        the terms and conditions contained herein.

       

      2.2 The
        Seller agrees to cause Lessor to transfer the actual balance of the Security
        Deposit and the Maintenance Reserves held by Lessor at Delivery and the Rent
        received in respect of any period falling after Delivery to the Purchaser
        on the
        Delivery Date. Such transfer may be made by way of a set-off against the
        Purchase Price.

      

      3. Payments

       

      3.1 The
        Purchase Price shall be paid by the Purchaser to the Seller as
        follows:

      (a) the
        First
        Instalment prior to the date of this Agreement;

       

      (b) the
        Second Instalment upon execution of this Agreement; and

       

      
        	 	
                (c)

              	
                the
                  Purchase Price minus the Deposit and the APU Maintenance Reserve
                  Rate
                  Compensation amounting to US$ 44,587.39 plus Seller's share of
                  the C-Check
                  Contribution amounting to US$ 111.000.- on the Delivery Date (also
                  subject to Clause 2.2 above)

              

      

       

      to
        the
        following bank account of Seller:

       

      Correspondent
        Bank:    Bank
        of
        New York

      Swift
        Code:         IRVTUS3N

      ABA
        No.:          021000018

      Account
        No.:      8900338067

      

      For
        Account of:     Ulster
        Bank Limited, Dublin

      Swift
        Code:      ULSBIE2D

      Account
        Name:     Pembroke
        Capital Aircraft (Shannon) Limited

      Account
        No.:  1113316102

      Reference:      Aerocentury
        MSN 11331

      

      or
        such
        other bank account as Seller may advise in writing.

      

      3.2 All
        payments hereunder shall be made in Dollars and in immediately available
        funds
        so that the recipient receives credit for the full amount of such payment
        on the
        due date. All such payments shall be made in full without any deduction or
        withholding (whether in respect of setoff (except as set forth in clause
        2.2),
        counterclaim, duties, Taxes imposed by any Governmental Entity, charges or
        otherwise howsoever), unless the payer is prohibited by law from doing so,
        in
        which event the payer shall (i) ensure that the deduction or withholding
        does
        not exceed the minimum amount legally required; (ii) forthwith pay to the
        recipient such additional amount as shall result in the net amount received
        by
        the recipient being equal to the amount which would have been received by
        the
        recipient had such a deduction or withholding not been made; (iii) pay to
        the
        relevant taxation or other authorities, within the period for payment permitted
        by applicable law, the full amount of the deduction or withholding; and (iv)
        upon request in writing from the recipient to the payer deliver to the recipient
        receipts (if any) paid or payable in respect of any deduction or withholding
        as
        aforesaid.

       

      3.3 

      
        	 	
                (a)

              	
                Seller
                  and Purchaser acknowledge and agree that the Deposit (without any
                  interest) shall be refundable to Purchaser in the following
                  instances:

              

      

       

      
        	 	
                (i)

              	
                in
                  the event of termination of this Agreement under Clauses 4.1, 4.2
                  or 4.3
                  below;

              

      

       

      
        	 	
                (ii)

              	
                in
                  the event that any of the Conditions Precedent to Purchaser's obligations
                  (as set forth in Clause 6 below) are not met prior to the Expected
                  Delivery Date Purchaser may terminate this Agreement by written
                  notice to
                  Seller and upon receipt of such notice Seller shall refund the
                  Deposit to
                  Purchaser;

              

      

       

      
        	 	
                (iii)

              	
                in
                  the event that all conditions precedent to Seller's obligations
                  have been
                  met and Purchaser is ready, willing and able to proceed with sale
                  hereunder and Seller breaches its obligations to sell and deliver
                  the
                  Aircraft to Purchaser pursuant to the terms and conditions contained
                  in
                  this Agreement, Purchaser may terminate this Agreement by written
                  notice
                  to Seller and upon receipt of such notice Seller shall refund the
                  Deposit
                  to Purchaser.

              

      

       

      
        	 	
                (b)

              	
                In
                  the event all conditions precedent to Purchaser's obligations have
                  been
                  met and Seller is ready, willing and able to proceed with the sale
                  hereunder and Purchaser breaches its obligations to purchase the
                  Aircraft
                  and pay the Purchase Price pursuant to the terms and conditions
                  contained
                  in this Agreement, Seller may terminate this Agreement by written
                  notice
                  to Purchaser and the Deposit may be retained by
                  Seller.

              

      

       

      

      4. Delivery
        and Acceptance

       

      4.1 Immediately
        prior to Delivery, Purchaser shall be entitled to a final inspection of the
        Aircraft (the "Final
        Inspection")
        for
        the purposes of verifying that no Material Damage or Total Loss of the Aircraft
        has occurred since the issuance of the Inspection Notice. The Seller and
        the
        Purchaser shall use all reasonable endeavours to procure that Delivery occurs
        on
        the Expected Delivery Date while the Aircraft is at the Delivery Location
        and at
        such time as the parties may reasonably agree, or as soon after the Expected
        Delivery Date as is reasonably possible and always subject to the terms and
        conditions of this Agreement and in no event shall the Expected Delivery
        Date
        extend beyond 04 July 2007.

       

      For
        the
        avoidance of doubt, if Delivery does not occur on or prior to the Expected
        Delivery Date (and the parties have not agreed to amend such date to a later
        date) each party shall have the right and option to terminate this Agreement
        upon notice to the other, whereupon the Seller shall refund the Deposit (without
        any interest) to Purchaser and thereafter, this Agreement shall terminate
        and
        neither party shall have any further rights or obligations hereunder other
        than
        survival of the parties' respective obligations under Clause 14 hereof. Further,
        the provisions of Clause 4.4 shall not entitle the Seller to delay Delivery
        until the date after the Expected Delivery Date.

       

      4.2 If
        the
        Aircraft, prior to the sale and Delivery thereof to Purchaser, suffers a
        Total
        Loss, Seller shall notify the Purchaser thereof as soon as practicable and
        refund the Deposit (without interest) to Purchaser. After receipt of such
        notice
        and refund of the Deposit to Purchaser, this Agreement shall terminate and
        thereafter, neither party shall have any further rights or obligations (other
        than the parties’ respective obligations under Clause14) hereunder.

       

      4.3 If,
        prior
        to Delivery, the Aircraft suffers any damage for which the costs of the repair
        exceeds $50,000.-, Seller will notify Purchaser thereof as soon as practicable
        (after having been notified by Lessee in respect thereof) and Purchaser may
        request the immediate evaluation of such damage by Fokker Services B.V. in
        order
        to determine whether or not Material Damage to the Aircraft has occurred.
        If it
        is determined by Fokker Services B.V. that Material Damage has occurred,
        then
        the cost of the evaluation shall be for the account of the Seller, and Purchaser
        shall have the right to either, proceed with sale and delivery hereunder
        (relying on the Lessee to effect repair in accordance with the Lease) or,
        notify
        Seller of Purchaser’s termination of this Agreement, and upon receipt of
        Purchaser’s termination notice, Seller shall refund the Deposit (without
        interest) to Purchaser and upon such refund and notice by Purchaser of such
        termination, this Agreement shall terminate and thereafter, neither party
        shall
        have any further rights or obligations (other than the parties’ respective
        obligations under Clause 14) hereunder. If the damage is determined not to
        be
        Material Damage, Purchaser, notwithstanding such damage, will accept and
        purchase the Aircraft in accordance with the terms hereunder and the cost
        of the
        evaluation by Fokker Services B.V. shall be for the account of the
        Purchaser.

       

      4.4 The
        Seller shall not be liable for or be deemed to be in breach of this Agreement
        in
        respect of any delay or failure in tendering the Aircraft on the Expected
        Delivery Date if such delay or failure results from any occurrence that is
        beyond the reasonable control of the Seller.

       

      4.5 On
        the
        Delivery Date, subject to satisfaction or explicit waiver of the conditions
        precedent set out in Clauses 5 and 6, the Purchaser shall pay to the Seller
        the
        Purchase Price and upon receipt by the Seller of the Purchase Price, the
        Seller
        and the Purchaser shall execute and deliver to the other party, the Bill
        of Sale
        and the parties shall make the Lease Novation effective. Effective as and
        from
        the Delivery, the Seller hereby consents to the Purchaser's registering the
        sale
        of the Aircraft as and International Interest, as described and defined in
        the
        Cape Town Convention, to be validly registered with, and searchable at, the
        International Registry (including using all airframe model numbers noted
        herein
        in connection with such registration) and shall take such actions (including
        without limitation becoming (or causing its counsel) to become a "transaction
        user entity" with the International Registry and supplying its consent) as
        is
        reasonably required for such International Interest to be noted on the
        International Registry.

       

      4.6 As
        between the Seller and the Purchaser, the risk of loss of, or damage to,
        the
        Aircraft shall pass from the Seller to the Purchaser upon delivery of the
        Bill
        of Sale by the Seller to the Purchaser.

       

      4.7 The
        Aircraft to be sold hereunder shall be delivered to the Purchaser "AS IS
        WHERE
        IS WITH ALL FAULTS" at the Delivery Location and SUBJECT
        TO EACH AND EVERY DISCLAIMER OF WARRANTY AND REPRESENTATION AS SET FORTH
        IN
        CLAUSE 10.
        Subject
        to the foregoing provisions of Clause 4 and the due fulfilment or explicit
        waiver of all the conditions precedent referred to in Clauses 5 and 6, the
        Purchaser shall unconditionally accept the Aircraft for all purposes hereunder
        at Delivery in the condition in which it exists at Delivery and shall execute
        and deliver to Seller the countersigned Bill of Sale. Acceptance of the Aircraft
        by the Purchaser at Delivery and execution by the Purchaser of the Bill of
        Sale
        shall constitute an acknowledgement by the Purchaser that the Aircraft is
        in the
        condition required by the provisions of this Agreement.

       

      4.8 As
        soon
        as practicable after Delivery, Seller shall procure that Lessor, at Purchaser’s
        risk, cost and expense, shall ship to a United States location to be specified
        by Purchaser, all Aircraft Documents not in the possession of the Lessee
        but in
        the possession of Lessor at time of Delivery. Seller shall reimburse Purchaser's
        reasonable costs and expenses of transportation in respect of such shipment
        within 30 days after Seller's receipt of Purchaser's supported
        invoice.

      

      5. Conditions
        Precedent - Seller

       

      5.1 The
        Seller’s obligation to sell the Aircraft hereunder is subject to the following
        express conditions precedent on the Delivery Date:

       

      (a) receipt
        by the Seller of the Purchase Price, as provided for in Clause 4.5;

       

      (b) receipt
        by the Seller of a copy certified by an officer of the Purchaser to be a
        true,
        complete and up-to-date copy of the constitutive documents of the
        Purchaser;

       

      (c) receipt
        by the Seller of a copy certified by an officer of the Purchaser, to be a
        true,
        complete and up-to-date copy of resolutions of the board of directors (or
        other
        appropriate governing body) of the Purchaser, which are in full force and
        effect
        and not amended or rescinded:

       

      (i) approving
        the terms of, and the transactions contemplated by the Transaction Documents;
        and

       

      (ii) authorising
        a specified person or persons to sign and deliver on behalf of the Purchaser,
        the Transaction Documents and any notices or other documents to be given
        or
        entered into pursuant thereto, and

       

      (iii) a
        specimen signature of each such person;

       

      (d) the
        representations and warranties of the Purchaser in Clause 8 of this Agreement
        being true and correct on the Delivery Date as though such representations
        and
        warranties have been made as of the Delivery Date;

       

      (e) the
        Purchaser having complied with its material obligations under the Transaction
        Documents required to have been performed at or before Delivery;

       

      (f) receipt
        by the Seller of the conditions precedent which it is entitled to receive
        pursuant to Clause 5.4 of the Lease Novation;

       

      (g) receipt
        by the Seller of a letter from the Purchaser’s process agent in Germany
        addressed to the Purchaser agreeing to act as the Purchaser’s process agent in
        connection with the Transaction Documents;

       

      (h) receipt
        by the Seller of evidence reasonably satisfactory to the Seller demonstrating
        that the insurances required to be effected pursuant to Clause 12 of this
        Agreement have been effected;

       

      (i) no
        change
        having occurred after the date of this Agreement in any applicable law which
        would make it illegal for the Seller to perform any of its obligations under
        this Agreement (and any other documents or agreements to be entered into
        pursuant hereto), provided that if any such change has occurred, the parties
        shall use all reasonable cooperative endeavours to restructure the transaction
        contemplated by such documents so as to avoid the aforementioned
        illegality;

       

      (j) the
        receipt by the Seller of the Lease Novation duly executed by the Lessor,
        the
        Lessee, the Lease Guarantor and the Purchaser and of the Effective Time Notice
        (as defined in the Lease Novation) executed by the Purchaser, Lessee, Lease
        Guarantor and the Lessor, held in escrow to the order of the
        Purchaser;

       

      (k) subject
        always to Clause 4.2 and 4.3, no Total Loss or Material Damage having
        occurred;

       

      (l) the
        receipt by the Seller of a tax opinion from Seller’s own tax counsel in respect
        of the transaction set forth hereunder reasonably satisfactory by Seller;
        and

       

      (m) no
        action, suits or proceedings or any governmental action shall have been
        instituted or be threatened before any court or before or by any Governmental
        Entity, nor shall any order, judgment or decree have been issued or proposed
        to
        be issued by any court or Governmental Entity, as of the Delivery Date,
        questioning the validity or legality of this Agreement or the other Transaction
        Documents or the transactions contemplated hereby or thereby or the ability
        of
        the parties hereto to consummate the transactions contemplated hereby or
        thereby.

       

      5.2 The
        conditions precedent in Clause 5.1 are for the Seller’s benefit and may be
        waived in writing, in whole or in part by the Seller.

      

      6. Conditions
        Precedent - Purchaser

       

      6.1 The
        Purchaser’s obligation to purchase the Aircraft hereunder is subject to the
        following express conditions precedent on the Delivery Date: 

       

      (a) receipt
        by the Purchaser of a copy certified by an officer of the Seller to be a
        true,
        complete and up-to-date copy of the constitutive documents of the
        Seller;

       

      (b) a
        copy
        certified by an officer of the Seller, to be a true, complete and up-to-date
        copy of resolutions of the board of directors (or other appropriate governing
        body) of the Seller, which are in full force and effect and not amended or
        rescinded:

       

      (i) approving
        the terms of, and the transactions contemplated by the Transaction Documents;
        and

       

      (ii) authorising
        a specified person or persons to sign and deliver on behalf of the Seller,
        the
        Transaction Documents and any notices or other documents to be given or entered
        into pursuant thereto, and

       

      (iii) a
        specimen signature of each such person;

       

      (c) the
        representations and warranties of the Seller in Clause 7 of this Agreement
        being
        true and complete on the Delivery Date as though such representations and
        warranties have been made as of the Delivery Date;

       

      (d) the
        Seller having complied with its material obligations under the Transaction
        Documents required to have been performed at or before Delivery;

       

      (e) the
        confirmation on or before 30 April 2007 that Purchaser has completed the
        First
        Inspection of the Aircraft to its satisfaction;

       

      (f) receipt
        by the Purchaser of the conditions precedent set out in Clause 5.1 of the
        Lease
        Novation;

       

      (g) receipt
        by the Purchaser of a letter from the Seller’s process agent in Germany
        addressed to the Seller agreeing to act as the Seller’s process agent in
        connection with the Transaction Documents;

       

      (h) no
        change
        having occurred after the date of this Agreement in any applicable law which
        would make it illegal for the Purchaser to perform any of its obligations
        under
        this Agreement (and any other documents or agreements to be entered into
        pursuant hereto), provided that if any such change has occurred the parties
        shall use all reasonable cooperative endeavours to restructure the transaction
        contemplated by such documents so as to avoid the aforementioned
        illegality;

       

      (i) receipt
        by the Purchaser of the Lease Novation duly executed by the Lessee, Lease
        Guarantor and the Lessor and of the Effective Time Notice (as defined in
        the
        Lease Novation) executed by the Lessor, Lease Guarantor and Lessee, held
        in
        escrow to the order of the Purchaser;

       

      (j) receipt
        by the Purchaser of tax and enforceability opinions from its own counsel
        in
        respect of the Transaction Documents and the transactions contemplated thereby
        reasonably satisfactory by Purchaser;

       

      (k) receipt
        by the Purchaser of certified copies of the original Lease
        Documents;

       

      (l) subject
        always to Clause 4.2 and Clause 4.3, no Total Loss or Material Damage having
        occurred;

       

      (m) no
        action, suits or proceedings or any governmental action shall have been
        instituted or be threatened before any court or before or by any governmental
        agency, nor shall any order, judgment or decree have been issued or proposed
        to
        be issued by any court or governmental agency, as of the Delivery Date,
        questioning the validity or legality of this Agreement or the other Transaction
        Documents or the transactions contemplated hereby or thereby or the ability
        of
        the parties hereto to consummate the transactions contemplated hereby or
        thereby;

       

      (n) the
        Lease
        shall be in full force and effect and no Default shall have occurred and
        be
        continuing and no event shall have occurred and no condition shall be existing
        which could reasonably be expected to materially adversely affect the Lessee’s
        financial or business prospects, Lessee’s performance under the Lease and/or the
        Purchaser's and its lender’s security position in the Aircraft;

       

      (o) Prior
        to
        Delivery, Seller shall have established a valid and subsisting account with
        the
        International Registry as a transacting user entity and have appointed an
        administrator and/or have consented to the appointment of a professional
        user
        reasonably acceptable to Purchaser;

       

      (p) receipt
        by the Purchaser of evidence of termination of any headlease existing prior
        the
        Effective Day; and

       

      (q) receipt
        by the Purchaser of copies of the bills of sale (from US Airways and through
        any
        intermediate owners) evidencing Seller's title to the Aircraft.

       

      6.2 The
        conditions precedent specified in Clause 6.1 are for the Purchaser’s benefit and
        may be waived in writing, in whole or in part by the Purchaser.

      

      7. Representations
        and Warranties of Seller

       

      7.1 The
        Seller hereby represents and warrants, all such representations and warranties
        being continuing, to the Purchaser, in each case in relation to itself only
        and
        in relation to the Transaction Documents to which it is a party only,
        that:

       

      (a) it
        is a
        limited liability company duly organised and legally existing under the laws
        of
        Ireland and has the power and authority to carry on its business as presently
        conducted and to perform its obligations under, and execute and deliver,
        each of
        the Transaction Documents and each of the Transaction Documents has been
        duly
        authorised by all necessary corporate action on its part, and does not require
        any approval, direct or indirect, of its shareholders or any approval or
        consent
        of any trustee or holder or holders of any of its indebtedness (or if such
        approval is required, such approval has been obtained);

       

      (b) each
        of
        the Transaction Documents has been duly entered into and delivered by it
        and
        upon due authorisation, execution and delivery by the other parties thereto
        will
        constitute its legal, valid and binding obligation enforceable against it
        in
        accordance with its terms except as enforcement may be limited by applicable
        bankruptcy, insolvency, fraudulent conveyance, reorganisation, moratorium
        or
        other similar laws affecting creditors’ rights generally, or by equitable
        principles (regardless of whether enforcement is sought in a proceeding in
        equity or at law);

       

      (c) neither
        the execution and delivery of the Transaction Documents nor the consummation
        of
        the transactions contemplated thereby, nor the compliance by it with any
        of the
        terms and provisions thereof will contravene any law applicable to it or
        any
        order, writ, injunction or decree of any court or governmental agency or
        instrumentality binding on it or result in any breach of, or constitute a
        default under, or result in the creation of any lien, charge or encumbrance
        upon
        the Aircraft under any indenture, mortgage, chattel mortgage, deed of trust,
        conditional sales contract, bank loan or credit agreement, corporate charter
        or
        by-laws, or other agreement, instrument or other undertaking to which it
        is a
        party or by which it or its properties or assets may be bound or
        affected;

       

      (d) the
        execution, delivery and performance by it of the Transaction Documents and
        any
        of the transactions contemplated thereby do not require any consent, approval,
        order, or authorisation of, or registration with, or the giving of prior
        notice
        to, any Governmental Entity having jurisdiction with respect to the execution,
        delivery and performance by it of the Transaction Documents or the validity
        and
        enforceability thereof or the satisfaction of all monetary and other obligations
        thereunder;

       

      (e) it
        is
        subject to private commercial law and suit under the laws of its jurisdiction
        of
        incorporation, it is not entitled to sovereign immunity under the laws of
        its
        jurisdiction of incorporation, and neither it nor its properties or assets
        have
        any right of immunity from suit or execution on the grounds of sovereignty
        in
        its jurisdiction of incorporation;

       

      (f) no
        provision of the Transaction Documents is prohibited, unlawful or unenforceable
        under the laws of its jurisdiction of incorporation except as enforcement
        may be
        limited by applicable bankruptcy, insolvency, fraudulent conveyance,
        reorganisation, moratorium or other similar laws affecting creditors’ rights
        generally, or by equitable principles (regardless of whether enforcement
        is
        sought in a proceeding in equity or at law);

       

      (g) there
        is
        no investigation by any governmental agency or any action, suit, proceeding,
        or
        claim pending or, to its knowledge, threatened against it with respect to
        the
        Aircraft or any of the Transaction Documents which, if adversely determined,
        would be likely to have a material adverse effect on its ability to comply
        with
        its obligations under any of the Transaction Documents, and it knows of no
        basis
        or ground for any such investigation, action, suit, proceeding or
        claim;

       

      (h) there
        is
        no outstanding order, lien, levy, distraint, writ, injunction or decree of
        any
        court, government or governmental agency against or affecting it directly
        relating to the Aircraft or any of the Transaction Documents which is likely
        to
        have a material adverse effect on its ability to perform its obligations
        under
        any of the Transaction Documents; and

       

      (i) at
        Delivery, the Seller shall be the sole legal and beneficial owner of the
        Aircraft and shall have good and marketable title to the Aircraft free and
        clear
        of any Security Interests whatsoever except for Permitted Liens, which term,
        "Permitted Liens" shall not, in this context, include Lessor Liens; provided,
        however, Seller shall have no responsibility for and does not warrant that
        the
        Aircraft is free of Lessor Liens created by Purchaser. 

       

      7.2 As
        regards any of the Transaction Documents which have not been executed and
        delivered on the date of this Agreement, the representations and warranties
        set
        out in Clause 7.1 shall apply with respect thereto once they have been executed
        and delivered.

      

      8. Representations
        and Warranties of Purchaser 

       

      8.1 The
        Purchaser represents and warrants, all such representations and warranties
        being
        continuing, to the Seller, in each case in relation to itself only and in
        relation to the Transaction Documents to which it is a party only,
        that:

       

      (a) Purchaser
        is a corporation duly organised and legally existing under the laws of Delaware,
        United States of America and has the power and authority to carry on its
        business as presently conducted and to perform its obligations under and
        execute
        and deliver each of the Transaction Documents and each of the Transaction
        Documents has been duly authorised by all necessary corporate action on its
        part, and do not require any approval, direct or indirect, of its shareholders
        or any approval or consent of any trustee or holder or holders of any of
        its
        indebtedness (or if such approval is required, such approval has been
        obtained);

       

      (b) each
        of
        the Transaction Documents has been duly entered into and delivered by it
        and
        upon due authorisation, execution and delivery by the other parties thereto
        will
        constitute its legal, valid and binding obligation enforceable against it
        in
        accordance with its terms except as enforcement may be limited by applicable
        bankruptcy, insolvency, fraudulent conveyance, reorganisation, moratorium
        or
        other similar laws affecting creditors’ rights generally, or by equitable
        principles (regardless of whether enforcement is sought in a proceeding in
        equity or at law);

       

      (c) neither
        the execution and delivery of the Transaction Documents nor the consummation
        of
        the transactions as contemplated thereby, nor compliance by it with any of
        the
        terms and provisions thereof will contravene any law applicable to it or
        any
        order, writ, injunction or decree of any court or governmental agency or
        instrumentality binding on it or result in any breach of, or constitute a
        default under any indenture, mortgage, chattel mortgage, deed of trust,
        conditional sales contract, bank loan or credit agreement, corporate charter
        or
        bylaws or other agreement, instrument or other undertaking to which it is
        a
        party or by which it or its properties or assets may be bound or
        affected;

       

      (d) the
        execution, delivery and performance by it of the Transaction Documents and
        any
        of the transactions contemplated thereby do not require any consent, approval,
        order or authorisation of, or registration with, or the giving of prior notice
        to any Governmental Entity having jurisdiction with respect to the execution,
        delivery and performance by it of the Transaction Documents or the validity
        and
        enforceability thereof or the satisfaction of all monetary and other obligations
        thereunder;

       

      (e) it
        is
        subject to private commercial law and suit under the laws of the jurisdiction
        of
        its incorporation, it is not entitled to sovereign immunity under the laws
        of
        the jurisdiction of its incorporation and neither it nor its properties or
        assets have the right of immunity from suit or execution on the grounds of
        sovereignty in the jurisdiction of its incorporation;

       

      (f) no
        provision of the Transaction Documents is prohibited, unlawful or unenforceable
        under the laws of the jurisdiction of its incorporation except as enforcement
        may be limited by applicable bankruptcy, insolvency, fraudulent conveyance,
        reorganisation, moratorium or other similar laws affecting creditors’ rights
        generally, or by equitable principles (regardless of whether enforcement
        is
        sought in a proceeding in equity or at law);

       

      (g) there
        is
        no investigation by any governmental agency or any action, suit, proceeding,
        or
        claim pending or, to its knowledge, threatened against it with respect to
        the
        Aircraft or any of the Transaction Documents which, if adversely determined,
        would be likely to have a material adverse effect on its ability to comply
        with
        its obligations under any of the Transaction Documents, and it knows of no
        basis
        or ground for any such investigation, action, suit, proceeding or
        claim;

       

      (h) there
        is
        no outstanding order, writ, injunction or decree of any court, government
        or
        governmental agency against or affecting it directly relating to the Aircraft
        or
        any of the Transaction Documents which is likely to have a material adverse
        effect on its ability to perform its obligations under any of the Transaction
        Documents; and

       

      (i) Purchaser
        has a net worth of at least $5,000,000.-.

       

      8.2 As
        regards any of the Transaction Documents which have not been executed and
        delivered on the date of this Agreement, the representations and warranties
        set
        out in Clause 8.1 shall apply with respect thereto once they have been executed
        and delivered.

      

      9. Taxes

      The
        Delivery Location shall be at
        a
        location to be mutually agreed upon by Purchaser and Seller having
        due regard to any tax implications to which such location may give rise in
        connection with the transactions contemplated by this Agreement, it being
        the
        intention that neither Purchaser nor Seller should suffer any sales, VAT
        or
        similar taxes in relation to the sale and purchase of the Aircraft.

       

      10. Warranties
        and Disclaimers

       

      10.1 THE
        AIRCRAFT WILL BE DELIVERED IN "AS
        IS WHERE IS WITH ALL FAULTS"
        CONDITION. THE SELLER MAKES NO WARRANTIES, GUARANTEES OR REPRESENTATIONS
        (EXCEPT
        AS STATED IN CLAUSE 7 OF THIS AGREEMENT AND THE BILL OF SALE, WHICH EXCEPTION
        APPLIES TO THE ENTIRETY HEREOF) NOR UNDERTAKES ANY OBLIGATION OR LIABILITY,
        EXPRESS OR IMPLIED, ARISING BY LAW OR OTHERWISE, IN EACH CASE WITH RESPECT
        TO
        THE AIRCRAFT INCLUDING BUT NOT LIMITED TO (1) ANY IMPLIED WARRANTY (A) AS
        TO THE
        DESCRIPTION, AIRWORTHINESS, MERCHANTABILITY, FITNESS FOR ANY PURPOSE, VALUE,
        CONDITION, DESIGN, USE OR OPERATION OF THE AIRCRAFT OR (B) ARISING FROM ANY
        PART
        PERFORMANCE, COURSE OF DEALING, USAGE OR TRADE OR OTHERWISE, (2) ANY SUCH
        OBLIGATION, LIABILITY, RIGHT, CLAIM OR REMEDY IN TORT, AND (3) ANY SUCH
        OBLIGATION, LIABILITY, RIGHT, CLAIM OR REMEDY FOR LOSS OF OR DAMAGE TO THE
        AIRCRAFT, (A) FOR ANY LIABILITY OF ANY LESSEE OR ANY LESSOR TO ANY THIRD
        PARTY,
        (B) FOR ANY LIABILITY OF THE PURCHASER TO ANY THIRD PARTY, OR (C) FOR ANY
        OTHER
        DIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES; AND ALL SUCH WARRANTIES,
        GUARANTEES, REPRESENTATIONS, OBLIGATIONS, LIABILITIES, RIGHTS, CLAIMS OR
        REMEDIES, EXPRESS OR IMPLIED, STATUTORY OR OTHERWISE, ARE EXPRESSLY EXCLUDED.
        DELIVERY BY THE PURCHASER TO THE SELLER OF THE COUNTERSIGNED BILL OF SALE
        SHALL
        CONSTITUTE CONFIRMATION BY THE PURCHASER THAT THE AIRCRAFT IS IN EVERY WAY
        SATISFACTORY TO THE PURCHASER. 

       

      EXCEPT
        AS EXPRESSLY PROVIDED IN THE TRANSACTION DOCUMENTS, NEITHER THE SELLER NOR
        THE
        PURCHASER SHALL HAVE ANY LIABILITY TO EACH OTHER FOR ANY OBLIGATIONS OR
        LIABILITIES OF THE LESSEE OR ANY OTHER THIRD PARTY.

       

        

      
        	
                10.2

              	
                Seller
                  and Purchaser acknowledge and agree that Seller has conditionally
                  assigned
                  to Lessee under the Lease all effective warranties from manufacturers,
                  service providers or suppliers and that Purchaser shall be entitled
                  to the
                  rights of the "Lessor" under the Novated
                  Lease.

              

      

       

      

      11. Indemnification

       

      11.1 The
        Purchaser agrees to indemnify, reimburse and hold harmless each of the Seller
        Indemnitees from and against any and all claims, including without limitation
        claims made by Lessee under Clause 7.3 of the Lease proceedings, losses,
        liabilities, suits, judgments, penalties or fines and any costs and expenses
        in
        connection therewith, including reasonable attorneys’ fees and expenses (any and
        all of which are hereafter referred to as "Claims")
        imposed on, incurred by or asserted against a Seller Indemnitee to the extent
        arising out of the possession, delivery, performance, management, ownership,
        registration, control, maintenance, condition, service, repair, overhaul,
        leasing, use, operation or return of the Aircraft (collectively, the
        "Use"
        of the
        Aircraft), subsequent to Delivery; provided, however, that the Purchaser
        shall
        be subrogated to all rights and remedies which such Seller Indemnitee may
        have
        against any third party, including manufacturer(s) of the Aircraft or previous
        owner of the Aircraft or part thereof (other than such Seller Indemnitee)
        or any
        vendor, maintenance or modification facility which has done any work on the
        Aircraft or part thereof.

       

      11.2 The
        Seller agrees to indemnify, reimburse and hold harmless each of the Purchaser
        Indemnitees from and against any and all Claims imposed on, incurred by or
        asserted against such Purchaser Indemnitee to the extent arising out of the
        Use
        of the Aircraft prior to Delivery, including, without limitation, (i) any
        lien,
        levy, distraint or encumbrance (including Eurocontrol charges) on, over or
        relating to the Aircraft which were created, or existed prior to delivery
        of the
        Aircraft to Lessee under the Lease and with respect to which Lessee makes
        any
        claim against Lessor pursuant to Clause 7.3 of the Lease, and (ii) any Claim
        made by Lessee against Purchaser arising out of Lessee’s rights under Clause 7.3
        of the Lease.

       

      11.3 Without
        prejudice to the Purchaser’s liability under this Clause 11, the Purchaser
        hereby agrees to indemnify, reimburse and hold the Seller Indemnitees harmless
        from any Claims in any manner imposed upon, incurred by or asserted against
        such
        Seller Indemnitee to the extent arising out of facts or circumstances subsequent
        to Delivery and made on the grounds that any design, article or material
        in the
        Aircraft or any part thereof or the manufacture, operation or use thereof
        constitutes an infringement of patent, copyright, design, trademark or other
        proprietary right or any other right whatsoever, save where such losses shall
        have resulted from the actions of such Seller Indemnitee.

       

      11.4 The
        Purchaser shall have the right to assume and conduct promptly and diligently,
        at
        its sole cost and expense, the entire defence of any Seller Indemnitee against
        any such Claim as is referred to in Clauses 11.1 or 11.3 without prejudice
        to
        the provisions of Clauses 11.1 or 11.3 and subject to the Seller Indemnitee
        being indemnified and secured for the costs of any such action to its reasonable
        satisfaction.

      The
        Seller shall have the right to assume and conduct promptly and diligently,
        at
        its sole cost and expense, the entire defence of any Purchaser Indemnitee
        against any such Claim as is referred to in Clauses 11.2 without prejudice
        to
        the provisions of Clauses 11.2 and 11.5 and subject to such Purchaser Indemnitee
        being indemnified and secured for the costs of any such action to its reasonable
        satisfaction.

       

      11.5 Without
        prejudice to the Seller's liability under this Clause 11, the Seller hereby
        agrees to indemnify, reimburse and hold the Purchaser Indemnitees harmless
        from
        any Claims in any manner imposed upon, incurred by or asserted against such
        Purchaser Indemnitee to the extent arising out of facts or circumstances
        prior
        to Delivery and made on the grounds that any design, article or material
        in the
        Aircraft or any part thereof or the manufacture, operation or use thereof
        constitutes an infringement of patent, copyright, design, trademark or other
        proprietary right or any other right whatsoever, save where such losses shall
        have resulted from the actions of the Purchaser.

       

      11.6 The
        indemnities given by the Purchaser in this Clause 11 shall not extend to
        Claims
        relating to any Seller Indemnitee:

       

      (a) arising
        solely as a result of (or solely attributable to) the wilful misconduct,
        recklessness or gross negligence of any of such Seller Indemnitee;

       

      (b) arising
        out of (or attributable to) a breach by the Seller (or Seller Indemnitee
        which
        is a party) of any of its material obligations (including its representations
        and warranties not being true and correct in any material respect) under
        the
        Transaction Documents;

       

      (c) arising
        out of or attributable to an act, event, circumstance or omission that existed
        or occurred prior to Delivery; 

       

      (d) arising
        out of (or attributable to) Taxes or the imposition of Taxes; or,

       

      (e) arising
        out of (or attributable to) such Seller Indemnitee’s liability as a
        manufacturer, service provider, or vendor (of maintenance or repair services)
        of
        or to the Aircraft or any part thereof.

       

      11.7 The
        indemnities given by the Seller in this Clause 11 shall not extend to Claims
        relating to any Purchaser Indemnitee:

       

      (a) arising
        solely as a result of (or solely attributable to) the wilful misconduct,
        recklessness or gross negligence of any Purchaser Indemnitee;

       

      (b) arising
        out of (or attributable to) a breach by the Purchaser (or Purchaser Indemnitee
        which is a party) of any of its material obligations (including its
        representations and warranties not being true and correct in any material
        respect) under the Transaction Documents;

       

      (c) arising
        out of or attributable to an act, event, circumstance or omission that exists
        or
        occurs subsequent to Delivery; or

       

      (d) arising
        out of (or attributable to) Taxes or the imposition of Taxes.

       

      
        	
                11.8
                  

              	
                With
                  respect to the obligation of Purchaser (as lessor under the Novated
                  Lease)
                  under Clause 11.3 of the Novated Lease, Seller hereby makes the
                  following
                  covenant and assurance to Purchaser: Seller shall procure that
                  each
                  Previous Party (as defined in the Novated Lease) which is an "Indemnitee"
                  under the Lease uses its reasonable endeavours to mitigate any
                  Claim (as
                  defined in the Lease) for which such Indemnitee may claim against
                  Lessee
                  pursuant to Clause 11.1 (of the Lease) or any other applicable
                  provision
                  of the Lease.

              

      

       

      
        	
                11.9

              	
                The
                  Seller agrees to indemnify, defend and hold harmless the Purchaser
                  and its
                  successors and assigns from any and all liabilities, damages, losses,
                  expenses, demands, claims, suits or judgements by any third party
                  or
                  parties, including attorney fees, costs and expenses, which arise
                  out of
                  any claims or demands contrary to the warranties of Seller set
                  forth in
                  7.1 (i) hereunder.

              

      

      

      

      12. Insurance

       

      12.1 The
        Purchaser undertakes and agrees with the Seller that until the earlier of
        (i)
        the second anniversary of the Delivery Date and (ii) completion of the next
        scheduled Major Check (as defined in the Lease) to occur after the Delivery
        Date, the Purchaser will (i) procure that Lessee, so long as the Lease remains
        in effect, maintains liability insurance policies in respect of the Aircraft
        with the limit of coverage of such policy to be at least US$500,000,000.-
        on
        which the Seller Indemnitees shall be named as additional insureds, (ii)
        with
        respect to any subsequent lessee of the Aircraft during such period, procure
        that such lessee maintains liability insurance policies in respect of the
        Aircraft on which the Seller Indemnitees shall be named as additional insureds
        with the limit of coverage of such policy to be equal to that on which
        Purchaser, as lessor, is named additional insured, but in no event shall
        any
        such policy have limits less than US$350,000,000.-, and (iii) with respect
        to
        any off-lease period during which the Aircraft is not used in flight operation,
        for any reason whatsoever, during such period, maintain liability insurance
        policies in respect of the Aircraft on which the Seller Indemnitees shall
        be
        named additional insureds, with the limit of coverage and having such coverages
        as Purchaser maintains with respect to its other off-lease aircraft in its
        fleet, with such limit of coverage of such policy being no less than
        US$100,000,000.-. In the event the Aircraft is used in flight operations
        in any
        off-lease period the requirement for liability insurances with minimum coverage
        of US$ 350,000,000.- shall apply.

       

      12.2 The
        Purchaser further undertakes and agrees with the Seller that the Purchaser
        shall, when requested by the Seller, produce to the Seller a certificate
        or
        other evidence as the Seller may reasonably require to show that the Purchaser
        has complied with the obligations set forth in Clause 12.1 above and the
        certificate shall contain provisions customary in the insurance market to
        protect the interests of the Seller Indemnitees and a severability of interest
        provision, all in terms reasonably satisfactory to the Seller. The Seller
        acknowledges that any certificate including the provisions of AVN67B (or
        its
        equivalent) will be satisfactory to the Seller, for so long as AVN67B (or
        its
        equivalent) represents, at the relevant time in the international insurance
        markets, best aviation insurance market practice.

      

      13. Assignment/Transfer

      No
        party
        shall assign, transfer or otherwise convey this Agreement, and all or any
        part
        of its rights or obligations hereunder to any person without the prior written
        consent of the other party hereto.

      

      

      14. Confidentiality

      The
        terms
        and conditions of this Agreement are to be kept confidential by the Seller
        and
        the Purchaser and each party acknowledges that this Agreement contains
        commercially sensitive information (collectively, the "Confidential
        Information") and agrees that such Confidential Information will not be
        disclosed by it without the prior written permission of each other party
        except
        to: (i) any permitted assignee or transferee of Purchaser or Seller, provided
        such assignee agrees to be bound by the terms of this or other substantially
        similar confidentiality clause, (ii) the extent necessary in connection with
        the
        enforcement of Seller’s or Purchaser’s rights or obligations hereunder, (iii)
        the extent disclosure may be required by applicable law or legal process;
        (iv)
        the potential financiers of Purchaser and Seller’s existing financiers, provided
        such potential or existing financiers agree to be bound by the terms of this
        or
        substantially similar confidentiality clause and (v) each party’s respective
        boards of directors, employees, auditors, management companies and legal
        or
        technical advisors, in which case, the disclosing party shall cause such
        person
        to agree to be bound by the terms of this or substantially similar
        confidentiality clause. 

      

      

      15. Miscellaneous

       

      15.1 This
        Agreement constitutes the entire agreement between the parties and supersedes
        all previous statements, representations and agreements between the parties
        relating to the subject matter of this Agreement.

       

      15.2 No
        delay
        or omission by any party in exercising any right, power or remedy under this
        Agreement shall impair such right, power or remedy or be construed as a waiver
        thereof, nor shall any single or partial exercise of any such right, power
        or
        remedy preclude any further exercise thereof or the exercise of any other
        right,
        power or remedy. The rights, powers and remedies herein provided are cumulative
        and not exclusive of any rights, powers and remedies provided by
        Law.

       

      15.3 No
        amendment to this Agreement, including but not limited to this Clause 15.3,
        shall be effective unless in writing and duly signed by all parties
        hereto.

       

      15.4 If
        at any
        time any one or more of the provisions in this Agreement is or becomes invalid,
        illegal or unenforceable in any respect under any Law, the validity, legality
        and enforceability of the remaining provisions of this Agreement shall not
        be in
        any way affected or impaired thereby.

       

      15.5 Each
        party shall pay its own legal and professional costs and expenses in respect
        of
        the negotiation, documentation and closing of the transactions contemplated
        by
        this Agreement, including, inter alia, the Purchaser paying its own costs
        and
        expenses associated with the inspection of the Aircraft. All costs and expenses
        of the Lessee relating to the novation of the Lease shall be borne by Seller.
        Costs in connection with the registration of the Purchaser’s and its financier’s
        title in and to the Aircraft and the Novated Lease shall be for the account
        of
        the Purchaser.

       

      15.6 Each
        party undertakes to reasonably cooperate with the other to execute and deliver
        any and all such other documents as may be reasonably requested by the other
        party in order to effectuate the intent, purposes and terms of this
        Agreement.

      

      16. Notices

       

      16.1 Any
        notice or other communication to be given under or for the purposes of this
        Agreement shall be in writing and shall be treated as properly served or
        given
        if hand delivered or sent by international courier, registered post or legible
        facsimile to the relevant person at the following address or facsimile number
        (or such other address or facsimile number as that person may by notice
        designate in writing from time to time to the person giving the
        notice);

       

                      Seller:     Pembroke
        Capital Aircraft (Shannon) Limited

      Address:      Shannon
        Airport House

                      Shannon,
        Co. Clare

      Ireland

      Telephone:     +353
        (61)
        701-600

      Facsimile
        No:     +353
        (61)
        474912

      Attention:     Mr.
        John
        McKechnie

       

                  Purchaser:     AeroCentury
        Corp.

      Address:     1440
        Chapin Ave, Suite 310 

      Burlingame,
        California 94010, USA 

      Telephone:     +1
        650
        340 1880

      Facsimile
        No:     +1
        650
        696 3929

      Attention:     Marc
        J.
        Anderson

      

      16.2 Any
        notice or other communication shall be deemed to have been received by the
        recipient:

       

      (a) in
        the
        case of a letter which is hand delivered, when actually delivered and, in
        the
        case of a letter which is sent by registered post, on the third day after
        posting (or on actual receipt, if earlier); or

       

      (b) in
        the
        case of transmission by legible facsimile, at the time of
        transmission.

       

      16.3 Each
        person making a communication hereunder by facsimile shall promptly confirm
        by
        telephone to the person to whom such communication was addressed each
        communication made by it by facsimile pursuant hereto but the absence of
        such
        confirmation shall not affect the validity of any such
        communication.

       

      16.4 All
        communications and documents delivered pursuant to or otherwise relating
        to this
        Agreement shall either be in English or accompanied by a certified English
        translation prepared by a competent translator.

      

      17. Governing
        Law and Jurisdiction

       

      17.1 This
        Agreement is governed by and shall be construed in accordance with the laws
        of
        the Federal Republic of Germany.

       

      17.2 The
        parties irrevocably agree that the courts of Frankfurt am Main, Federal Republic
        of Germany shall have exclusive jurisdiction to settle any disputes which
        may
        arise out of or in connection with this Agreement and that accordingly any
        suit,
        action or proceedings arising out of or in connection with this Agreement
        ("Proceedings")
        may be
        brought in such courts.

       

      17.3 The
        parties irrevocably waive any objection which they may have now or hereafter
        to
        the laying of any Proceedings in any such court as is referred to in Clause
        17.2
        and any claim that any Proceedings have been brought in an inconvenient forum
        and further irrevocably agree that a judgement in any Proceedings brought
        in any
        court referred to in Clause 17.2 shall be conclusive and binding upon them
        and
        may be enforced in the courts of any other jurisdiction.

       

      17.4 Each
        of
        the parties hereby consents generally in respect of any Proceedings arising
        out
        of or in connection with this Agreement to the giving of any relief or the
        issue
        of any process in connection with such Proceedings including, without
        limitation, the making, enforcement or execution against any property whatsoever
        (irrespective of its use or intended use) of any order or judgment which
        may be
        made or given in such Proceedings.

       

      17.5 In
        respect of any Proceedings between the parties arising out of or in connection
        with this Agreement, the Purchaser hereby appoints: 

      Faegre
        & Benson LLP

      Main
        Tower

      Neue
        Mainzer Strasse 52-58

      60311
        Frankfurt am Main

      Germany
        

      Attention:
        Executive Partner

       

      to
        receive notification as process agent on Purchaser’s behalf in Germany in
        connection with any such Proceedings. In the event such process agent ceases
        to
        so act, the Purchaser will promptly appoint another person as process agent
        and
        inform Seller and Seller's process agent accordingly.

       

      17.6 In
        respect of any Proceedings between the parties arising out of or in connection
        with this Agreement, the Seller hereby appoints:

       

      Schierk
        & Bechtloff 

       

      NeumŸhlen
        23, 

       

      22763
        Hamburg

       

      Germany
        

       

      to
        receive notification as process agent on Seller’s behalf in Germany in
        connection with any such Proceedings. In the event such process agent ceases
        to
        so act, the Seller will promptly appoint another person as process agent
        and
        inform Purchaser and Purchaser's process agent accordingly.

       

      
        	
                17.7

              	
                The
                  parties hereto agree that a copy of any statement of claim ("Klageschrift")
                  sent to the courts of Frankfurt am Main, Germany, shall be sent,
                  on the
                  same day, to such other party named as defendant in that statement
                  of
                  claim at the address for notification set forth in Clause 16.1
                  hereof.

              

      

       

      

       

      IN
        WITNESS
        whereof
        the parties hereto have entered into this Agreement the day and year first
        above
        mentioned.

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      Schedule
        1

      Description
        of Aircraft

      

      

      Manufacturer:             FOKKER

      

      
        	
                Aircraft
                  type:

              	
                One
                  FOKKER model F.28 MK 0100 Aircraft (also described: in the FAA
                  records as
                  - F.28 MK 0100, in the International Registry drop down menu as
                  - FOKKER
                  model F100, and in the International Registry by free text entry
                  as -
                  model F28MK0100 and in the Type Certificate Data Sheet as - FOKKER
                  model
                  F.28 Mark 0100)

              

      

      

          Aircraft
        serial number:        11331

      

          Engine
        manufacturer:     ROLLS
        ROYCE

      

      
        	
                    Engine
                  type:

              	
                Rolls
                  Royce Tay Mark 650-15 (also identified on the International Registry
                  drop
                  down menu as ROLLS ROYCE model
                  TAY650)

              

      

      

          Engine
        serial
        numbers:     17206
        and
        17264

      

          Landing
        Gear
        manufacturer:     Messier-Dowty

      

      Nose:
        Part Number 201071001

      Serial
        Number: XC93107

       

      LH
        Main:
        Part Number 201072013 

      Serial
        Number: M-DG-0261

      

      RH
        Main:
        Part Number 201072014

      Serial
        Number: M-DG-0262     

      

              APU
        manufacturer:    Honeywell

                              Model:
        GTCP
        36-150RR

                              Serial
        Number:
        P-378C

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

      Schedule
        2

      

      Bill
        of Sale

      

      Pembroke
        Capital Aircraft (Shannon) Limited, a company incorporated in Ireland, having
        its registered office at Shannon Airport House, Shannon, Co. Clare, Ireland
        (the
        "Seller") is the owner of the full legal and beneficial title to the following
        described aircraft and engines described below (hereinafter, collectively,
        referred to as the "Aircraft"):

      

      (1)
        one
        FOKKER model F.28 MK 0100 Aircraft (also described: in the FAA records as
        - F.28
        MK 0100, in the International Registry drop down menu as - FOKKER model F100,
        and in the International Registry by free text entry as - model F28MK0100
        and in
        the Type Certificate Data Sheet as - FOKKER model F.28 Mark 0100) airframe
        bearing manufacturer’s serial number 11331;

      

      (2) two
        Rolls
        Royce Tay Mark 650-15 (also identified on the International Registry
        drop down
        menu
        as ROLLS ROYCE model TAY650) engines bearing the following manufacturer’s serial
        numbers: 17206 and 17264;

       

      (3) 
        all
        appliances, parts, accessories, appurtenances, instruments, components and
        other
        items of equipment which are installed or incorporated in or on the aircraft
        and
        engines described in (1) and (2) above; and

      

      (4) the
        Aircraft Documents. 

      

      For
        and
        in consideration of the payment of the Purchase Price under the Aircraft
        Sale
        Agreement dated ___ June 2007 (the "Sale Agreement") between the Seller and
        AeroCentury Corp., a United States, State of Delaware corporation, having
        its
        principal place of business at 1440 Chapin Ave. Suite 310, Burlingame,
        California 94010, USA (the "Purchaser"), the Seller hereby this ___________
        day
        of ___________ 2007 grants, conveys, transfers, assigns, bargains and sells,
        delivers and sets over, all of the Seller's right, title and interest in
        and to
        the Aircraft, unto the Purchaser.

      

      This
        Bill
        of Sale is first executed and delivered to the Purchaser by the Seller and
        then
        countersigned and delivered to the Seller by the Purchaser pursuant to the
        terms
        of the Sale Agreement and capitalized terms not otherwise defined herein
        shall
        be as defined in the Sale Agreement.

      

      The
        Seller hereby warrants to the Purchaser, its successors and assigns, that
        there
        is hereby conveyed to the Purchaser on
        the date hereof,
        all
        legal and beneficial title, and good and marketable title to the Aircraft
        free
        and clear of any Security Interests whatsoever except for Permitted Liens
        but
        including, free and clear of any Lessor Liens; provided, however, Seller
        shall
        have no responsibility for and does not warrant that the Aircraft is free
        of
        Lessor Liens created by Purchaser. The Seller agrees with the Purchaser and
        its
        successors and assigns that Seller will warrant and defend such title forever
        against all claims and demands whatsoever.

      

      Seller
        herewith transfers the title to the Aircraft to the Purchaser and Purchaser
        accepts such transfer of title.

      

      IN
        WITNESS WHEREOF, the Seller and the Purchaser have caused this instrument
        to be
        executed by their duly authorized officers this _______ day of _________
        2007.

      

      
 

      SIGNED
        and DELIVERED

      on
        behalf
        of

      Pembroke
        Capital Aircraft (Shannon) Limited

      

      By: ____________________________

      

      Name: ____________________________

      

      Its: ____________________________

      

      

      Accepted
        and Agreed:

      

      On
        behalf
        of

      AeroCentury
        Corp.

      

      By: ____________________________

      

      Name: ____________________________

      

      Its: _______________________________

      

      

      

       

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      SIGNATURE
        PAGE

      AIRCRAFT
        SALE AGREEMENT

      MSN
        11331

      

      

      SIGNED
        for and
        on behalf of

      Pembroke
        Capital Aircraft (Shannon) Limited

      

      By: ____________________________

      

      Name: ____________________________

      

      Its: ____________________________

      

      

      SIGNED
        for and
        on behalf of

      AeroCentury
        Corp.

      

      By: ____________________________

      

      Name: ____________________________

      

      Its: ____________________________

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