Document:

================================================================================

                          DEBENTURE PURCHASE AGREEMENT,

                                     between

                               Aphton Corporation

                                       and

                          Aventis Pharmaceuticals Inc.,

                         dated as of December 19, 2002,
                                    regarding

                         Series A Convertible Debenture
                              Due December 19, 2007

                                       of

                               Aphton Corporation

================================================================================
<PAGE>

          DEBENTURE PURCHASE AGREEMENT (as amended, supplemented or otherwise
modified from time to time, this "Agreement"), dated as of December 19, 2002, by
between Aphton Corporation, a Delaware corporation (the "Company"), and Aventis
Pharmaceuticals Inc., a Delaware corporation (the "Purchaser").

                              W I T N E S S E T H:

          In consideration of the mutual covenants and agreements set forth in
this Agreement, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:

                                    ARTICLE I

                                   DEFINITIONS

          1.1 Definitions. As used in this Agreement, the following defined
terms shall have the meanings indicated below:

          "Affiliate" means, as applied to any Person, any other Person directly
or indirectly controlling, controlled by or under common control with, that
Person. For the purposes of this definition, "control" (including with
correlative meanings, the terms "controlling", "controlled by", and "under
common control with") as applied to any Person, means the possession, directly
or indirectly, of the power to direct or cause the direction of the management
and policies of that Person, whether through ownership of voting securities or
by contract or otherwise.

          "Agreement" has the meaning ascribed to it in the forepart of this
Agreement.

          "Balance Sheet" has the meaning ascribed to it in Section 3.9.

          "Business Day" means a day other than Saturday, Sunday or any day on
which banks located in the State of New Jersey, the State of New York or the
State of Florida are authorized or obligated to close.

          "Closing" means the closing of the transactions contemplated by
Section 2.2.

          "Closing Date" means December 19, 2002 or such other date on which the
Closing actually occurs.

          "Common Stock" means Common Stock, par value $.001 per share, of the
Company.

          "Company" has the meaning ascribed to it in the forepart of this
Agreement.

          "Company Securities" means the Debenture and the Common Stock obtained
upon conversion of the Debenture.
<PAGE>

          "Confidential Information" shall mean, with respect to a party, any
financial, technical, business, marketing and other non-public information
concerning such party's business, which information is held by such party in
confidence and identified in writing or orally to the receiving party as
confidential or is of the type customarily understood to be confidential.

          "Contract" means any agreement (including licenses with
non-governmental Persons), lease, evidence of Indebtedness, mortgage, indenture,
security agreement or other instrument or contract.

          "Debenture" has the meaning ascribed to it in Section 2.1(b).

          "Disposition" has the meaning ascribed to it in Section 4.5.

          "Encumbrance" means any security interest, lien, pledge, claim,
charge, escrow, encumbrance, option, right of first offer, right of first
refusal, preemptive right, mortgage, indenture, security agreement or other
similar agreement, arrangement, contract, commitment, understanding or
obligation, whether or not relating in any way to credit or the borrowing of
money.

          "Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations of the SEC thereunder.

          "Exchange Reports" has the meaning ascribed to it in Section 3.8(a).

          "Financial Statements" has the meaning ascribed to it in Section
3.8(b).

          "GAAP" has the meaning ascribed to it in Section 3.8(b).

          "Governmental or Regulatory Authority" means any court, tribunal,
arbitrator, authority, agency, commission, official or other instrumentality of
the United States, any foreign country or any domestic or foreign state, county,
city or other political subdivision.

          "Indebtedness" means (a) all indebtedness of the Company, including
the principal of, and premium, if any, and interest (including interest accruing
after the filing of a petition initiating any proceeding under any state,
federal or foreign bankruptcy laws, whether or not allowable as a claim in such
proceeding) on, all indebtedness, whether outstanding currently or hereafter
created (i) for borrowed money, (ii) for money borrowed by others and
guaranteed, directly or indirectly, by the Company, (iii) for money borrowed by
others for which the Company provides security, (iv) constituting purchase money
indebtedness the payment of which the Company is directly or contingently
liable, (v) constituting reimbursement obligations under bank letters of credit,
(vi) under interest rate and currency swaps, caps, floors, collars or similar
agreements or arrangements intended to protect the Company against fluctuations
in interest or currency exchange rates, (vii) under any lease of any real or
personal property, which obligations are capitalized on the Company's books in
accordance with generally accepted accounting principles, or (viii) under any
other arrangement under which obligations are recorded as indebtedness on the
Company's books in accordance with generally accepted accounting principles, and
(b) any modifications, refundings, deferrals, renewals or extensions of any such

                                       2
<PAGE>

Indebtedness, or securities, note or other evidences of indebtedness issued in
exchange for such Indebtedness.

          "Law" or "Laws" means all laws, statutes, rules, regulations,
ordinances and other pronouncements having the effect of law of the United
States, any foreign country or any domestic or foreign state, county, city or
other political subdivision or of any Governmental or Regulatory Authority.

          "Losses" has the meaning ascribed to it in Section 5.5(a).

          "Material Adverse Effect" means a material adverse effect on the
business, results of operations, prospects or financial position of a Person and
such Person's Subsidiaries, taken as a whole.

          "Other Registrable Securities" has the meaning ascribed to it in
Section 6.1(d).

          "Permitted Encumbrances" has the meaning ascribed to it in Section
3.11.

          "Person" means any natural person, corporation, general partnership,
limited partnership, limited liability company or partnership, proprietorship,
other business organization, trust, union, association or Governmental or
Regulatory Authority.

          "Purchaser" has the meaning ascribed to it in the forepart of this
Agreement.

          "Purchaser's Affiliates" has the meaning ascribed to it in Section
4.3(h).

          "Purchaser's Counsel" has the meaning ascribed to it in Section 6.3.

          "Registrable Securities" means shares of Common Stock issued or
issuable to the Purchaser upon conversion of the Debenture.

          "Registration Demand" has the meaning ascribed to it in Section
6.1(a).

          "Representatives" has the meaning ascribed to it in Section 5.6(a).

          "SEC" means the Securities and Exchange Commission.

          "SEC Reports" has the meaning ascribed to it in Section 3.8(a).

          "Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations of the SEC thereunder.

          "Subsidiary" means, as applied to any Person, any Person in which such
Person, directly or indirectly through Subsidiaries or otherwise, beneficially
owns more than 50% of either the equity interest in, or the voting control of,
such Person, whether or not existing on the date hereof.

                                       3
<PAGE>

          "Transfer" means, directly or indirectly, any sale, transfer,
assignment, hypothecation, pledge or other disposition of any Company Securities
or any interests therein.

          "Transition Report" has the meaning ascribed to it in Section 3.8(a).

                                   ARTICLE II

                     SALE AND PURCHASE OF DEBENTURE; CLOSING

          2.1 Sale and Purchase of Debenture.

          (a) Subject to the terms and conditions hereof and in reliance upon
the representations and warranties of the Purchaser and the Company contained
herein or made pursuant hereto, the Company agrees to sell to the Purchaser, and
the Purchaser agrees to purchase from the Company, on the Closing Date, the
Debenture in the aggregate principal amount of $3,000,000.00. The aggregate
principal purchase price to be paid to the Company by the Purchaser for the
Debenture is $3,000,000.00.

          (b) As used herein, "Debenture" means the Company's Series A
Convertible Debenture Due December 19, 2007 issued pursuant to this Agreement,
together with all debentures issued in exchange therefor or replacement thereof.
The Debenture will be substantially in the form of the Debenture set forth as
Exhibit A hereto. The Debenture will be convertible into shares of Common Stock
at the conversion price and in the manner determined under the terms of the
Debenture.

          2.2 The Closing.

          (a) Subject to the terms and conditions hereof, the closing (the
"Closing") of the purchase and sale of the Debenture to be purchased by the
Purchaser will take place at the offices of Morgan, Lewis & Bockius LLP, 101
Park Avenue, New York, New York, or at such other place as the Company and the
Purchaser shall mutually agree, at 10:00 A.M., New York City time, on the
Closing Date.

          (b) Subject to the terms and conditions hereof, on the Closing Date
(i) the Company will deliver to the Purchaser (A) the Debenture payable to the
Purchaser, and dated the Closing Date, in the aggregate principal amount of
$3,000,000.00, (B) the opinion of White & Case LLP, counsel to the Company,
dated the Closing Date, addressed to the Purchaser substantially in the form
attached hereto as Exhibit B, and (C) a certificate, dated the Closing Date and
executed by the secretary or assistant secretary of the Company, as to the
certificate of incorporation and bylaws of the Company, resolutions authorizing
the transactions contemplated hereby and the incumbency of any officer executing
documents on behalf of the Company; and (ii) the Purchaser will deliver to the
Company, by wire transfer to an account designated by the Company, an amount
equal to the purchase price for the Debenture in federal or other immediately
available funds.

                                       4
<PAGE>

                                   ARTICLE III

                  REPRESENTATIONS AND WARRANTIES OF THE COMPANY

          The Company hereby represents and warrants to the Purchaser as
follows:

          3.1 Organization and Qualification. The Company is a corporation duly
organized, validly existing and in good standing under the Laws of the State of
Delaware. The Company is duly qualified and is authorized to do business and is
in good standing as a foreign corporation in each state or jurisdiction where
the nature of its business or the ownership of property make such qualification
necessary, except where the failure of the Company to be so qualified would not
have a Material Adverse Effect on the Company.

          3.2 Authority. The Company has full power and authority to execute and
deliver this Agreement and the Debenture, to perform its obligations hereunder
and under the Debenture and to consummate the transactions contemplated hereby
and thereby (including, for the sake of clarity, the issuance of the Common
Stock upon conversion of the Debenture) subject to the necessary shareholder
approvals as required by the Nasdaq National Market or such other domestic
securities exchange or quotation system upon which shares of the Common Stock
may be listed. The execution, delivery and performance by the Company of this
Agreement and the Debenture and the consummation by it of the transactions
contemplated hereby and thereby have been duly and validly authorized by all
necessary action by its Board of Directors, and no other action is necessary to
authorize the execution, delivery and performance of this Agreement and the
Debenture and the consummation by the Company of the transactions contemplated
hereby and thereby. This Agreement and the Debenture have been, duly and validly
executed and delivered by the Company and this Agreement and the Debenture
constitute the legal, valid and binding obligations of the Company enforceable
against the Company in accordance with their respective terms, except as the
enforceability thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws relating to the enforcement of creditors'
rights generally and by general principles of equity.

          3.3 No Conflicts. The execution and delivery by the Company of this
Agreement and the Debenture, the performance by the Company of its obligations
under this Agreement and the Debenture and the consummation of the transactions
contemplated hereby and thereby do not and will not (i) conflict with, or
constitute a default under, or result in the acceleration or termination of, any
Contract to which the Company or any of its Subsidiaries is a party, the result
of which could have a Material Adverse Effect on the Company or impair or
restrict its power to perform its obligations hereunder or under the Debenture,
(ii) result in a violation of or default under the Company's Certificate of
Incorporation or Bylaws, or any order, judgment or decree of any court or
Governmental or Regulatory Authority having jurisdiction over the Company or any
of its assets or properties, the result of which could have a Material Adverse
Effect on the Company or impair or restrict its power to perform its obligations
hereunder and under the Debenture, or (iii) result in, or require, the creation
or imposition of any Encumbrance upon any of the assets or properties of the
Company or any of its Subsidiaries, the result of which could have a Material
Adverse Effect on the Company or impair or restrict its power to perform its
obligations hereunder and under the Debenture.

                                        5
<PAGE>

          3.4 Brokers. No agent, broker, finder, investment banker, financial
advisor or other similar Person will be entitled to any fee, commission or other
compensation in connection with the transactions contemplated by this Agreement
on the basis of any act or statement made or alleged to have been made by the
Company or any of its Affiliates.

          3.5 Exemption from Registration. Assuming the accuracy on the date
hereof and on the Closing Date of the representations and warranties of the
Purchaser set forth in Section 4.3 below, the issuance and the sale of the
Debenture to the Purchaser hereunder are, and the issuance of the Common Stock
upon conversion of the Debenture will be, exempt from the registration
requirements of the Securities Act.

          3.6 Litigation. There are no actions, suits, proceedings or
investigations pending, or to the knowledge of the Company, threatened, against
or affecting the Company or any of its Subsidiaries. The Company is not in
default with respect to any order, writ, injunction, judgment, decree or rule of
any Governmental or Regulatory Authority.

          3.7 No Defaults. No event has occurred and no condition exists which
would, upon or after the execution and delivery of this Agreement or the
Debenture or the performance by the Company of its obligations hereunder or
thereunder or the consummation of the transactions contemplated herein or
therein, constitute an Event of Default (as such term is defined in the
Debenture). Neither the Company nor any of its Subsidiaries is in default, and
no event has occurred and no condition exists which constitutes, or which with
the passage of time or the giving of notice or both would constitute, a default
in the payment of any material Indebtedness.

          3.8 SEC Reports and Financial Statements.

          (a) The Company has filed all forms, reports and documents required to
be filed by it pursuant to Section 13 or Section 15(d) of the Exchange Act
within the last 12 months (the "Exchange Reports") on a timely basis or has
received a valid extension of time for filing. The Company has made available to
the Purchaser the Company's Report on Form 10-K for the eleven month period
ended December 31, 2001, and all amendments thereto (the "Transition Report",
and together with the Exchange Reports, the "SEC Reports"). The SEC Reports
complied as to form in all material respects with the rules and regulations of
the SEC under the Exchange Act on the date of filing and as of such date (or if
amended or superseded by a filing prior to the date of this Agreement, on the
date of such filing) did not contain any untrue statement of a material fact
required to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading.

          (b) Each of the financial statements (including, in each case, any
related notes thereto) (the "Financial Statements") contained in the SEC Reports
(i) was prepared in accordance with generally accepted accounting principles
("GAAP") applied on a consistent basis throughout the periods involved (except
as may be expressly described in the notes thereto) and (ii) fairly presents in
all material respects the financial position of the Company as at the respective
dates thereof and the results of its operations and cash flows for the periods
indicated.

                                       6
<PAGE>

          3.9 Events Subsequent to the Date of the Last Financial Statement.
Since the date of the last audited Financial Statements, except as contemplated
by this Agreement or as reflected on the balance sheet contained in the
Transition Report (the "Balance Sheet"), neither the Company nor any of its
Subsidiaries has (i) sold, assigned, transferred or granted any license with
respect to any patent, trademark, trade name, service mark, copyright, trade
secret or other intangible asset licensed to or owned by the Company or any of
its Subsidiaries, (ii) suffered any loss of property that had a Material Adverse
Effect on the Company and its Subsidiaries taken as a whole or waived any right
of substantial value to the Company or any of its Subsidiaries, or (iii) entered
into any commitment, obligation, understanding or other arrangement, contingent
or otherwise, to effect, directly or indirectly, any of the foregoing. Except as
set forth in the Company's Form 10-Q for the Quarter ended September 30, 2002,
since December 31, 2001, no events have occurred which individually or
collectively have had or could reasonably be expected to have a Material Adverse
Effect on the Company and its Subsidiaries taken as a whole.

          3.10 Absence of Undisclosed Liabilities. Since December 31, 2001,
neither the Company nor any of its Subsidiaries has had any loss contingency (as
defined in Statement of Financial Accounting Standards No. 5), whether matured
or unmatured, fixed or contingent, that has had or could reasonably by expected
to have a Material Adverse Effect on the Company and its Subsidiaries taken as a
whole.

          3.11 Title to Assets, Properties and Rights. Each of the Company and
its Subsidiaries has good and marketable title (or a valid leasehold interest)
to all of the assets (whether real, personal or mixed) necessary for the conduct
of its business substantially as now conducted, free and clear of all
Encumbrances, except for (i) liens for current taxes, assessments and other
governmental charges not yet due and payable for which reserves have been
established as required by GAAP; (ii) easements, covenants, conditions and
restrictions (whether or not of record) as to which no material violation or
encroachment exists or, if such violation or encroachment exists, as to which
the cure of such violation or encroachment would not materially interfere with
the conduct of the Company's business; (iii) any zoning or other governmentally
established restrictions or encumbrances; (iv) workers or unemployment
compensation liens arising in the ordinary course of business; or (v)
mechanic's, materialman's, supplier's, vendor's or similar liens arising in the
ordinary course of business securing amounts which are not delinquent. (The
matters set forth in the foregoing clauses (i) through (v) being referred to
herein as the "Permitted Encumbrances"). Such assets are in such operating
condition and repair as is suitable for the uses for which they are used in the
Company's or its Subsidiaries' business, as applicable, are not subject to any
condition which materially interferes with the use thereof by the Company or any
of its Subsidiaries, as applicable, and constitute all assets, properties,
interests in properties and rights necessary to permit the Company and its
Subsidiaries to carry on business after the Closing substantially as conducted
by them prior thereto.

          3.12 Patents, Trademarks, Copyrights and Licenses. Each of the Company
and its Subsidiaries owns or possesses all the patents, trademarks, service
marks, trade names, copyrights and licenses therefor necessary for the conduct
of its business substantially as now conducted. Neither the Company nor and of
its Subsidiaries has interfered with, infringed upon or misappropriated any
intellectual property rights of any Person or committed any acts of unfair

                                       7
<PAGE>

competition with respect to the operation of its business, and has not received
from any Person any notice, charge, complaint, claim or assertion thereof, and
no such claim is impliedly threatened by an offer to license from another Person
under a claim of use. No activity, service or procedure currently conducted by
the Company or any of its Subsidiaries violates in any material respect any
Contract of the Company or any of its Subsidiaries, on the one hand, and any
third Person, on the other hand, relating to any intellectual property rights.

          3.13 Governmental Consents. Each of the Company and its Subsidiaries
has, and is in good standing with respect to, all governmental consents,
approvals, licenses, authorizations, permits, certificates, inspections and
franchises necessary to continue to conduct its business substantially as now
conducted and to own or lease and operate the assets and properties necessary
for the conduct by the Company of its business substantially as now conducted
except for such failures that could not reasonably be expected to have either
individually or in the aggregate a Material Adverse Effect on the Company and
its Subsidiaries taken as a whole.

          3.14 No Consent or Approval Required. No consent, approval or
authorization of, or declaration to or filing with, any Person is required by
the Company for the valid authorization, execution and delivery by the Company
of this Agreement or the Debenture or its consummation of the transactions
contemplated hereby and thereby other than filings, if any, pursuant to
applicable state securities laws.

          3.15 Compliance with Laws. Except as set forth in Section 3.15 of the
Disclosure Schedule, each of the Company and its Subsidiaries has duly complied
with, and the assets and properties, business operations and leaseholds used in
connection with its business are in compliance with, the provisions of all laws
applicable to the Company and its Subsidiaries, their respective assets and
properties or their respective conduct of businesses and there have been no
citations, notices or orders of noncompliance issued to the Company, under any
such law, rule or regulation, except for such noncompliance which could not
reasonably be expected to have either individually or in the aggregate a
Material Adverse Effect on the Company and its Subsidiaries taken as a whole.

          3.16 Capitalization. The authorized capital stock of the Company
consists of 30,000,000 shares of Common Stock, of which 24,201,639 shares are
outstanding on the date hereof. All of the outstanding shares of Common Stock
have been duly authorized and validly issued and are fully paid and
non-assessable. The Company is not a party to any agreement granting
registration rights to any person with respect to any shares of its capital
stock. The Company is not a party to, and it has no knowledge of, any agreement
restricting the voting or transfer of any shares of its capital stock.

          3.17 Subsidiaries. The Company's only Subsidiary is Aphton (BVI)
Corporation. Aphton (BVI) Corporation is a corporation duly organized, validly
existing and in good standing under the Laws of the British Virgin Islands.
Aphton (BVI) Corporation is duly qualified and is authorized to do business and
is in good standing as a foreign corporation in each state or jurisdiction where
the nature of its business or the ownership of property make such

                                       8
<PAGE>

qualification necessary, except where the failure of Aphton (BVI) Corporation to
be so qualified would not have a Material Adverse Effect on Aphton (BVI)
Corporation.

          3.18 Labor Relations. The employees of the Company are not subject to
any collective bargaining agreement. There are no material grievances, disputes
or controversies with any union or any other organization of the Company's
employees, or threats of strikes, work stoppages or any asserted pending demands
for collective bargaining by any union or organization.

                                   ARTICLE IV

                 REPRESENTATIONS AND WARRANTIES OF THE PURCHASER

          The Purchaser hereby represents and warrants to the Company as
follows:

          4.1 Organization; Power and Authority. It is duly organized, validly
existing and in good standing under the laws of the state of Delaware, and has
full power and authority to execute and deliver this Agreement and to perform
its obligations hereunder and under the Debenture and to consummate the
transactions contemplated hereby. The execution and delivery by the Purchaser of
this Agreement and the performance by the Purchaser of its obligations
hereunder, have been duly and validly authorized by the Purchaser. This
Agreement has been duly and validly executed and delivered by the Purchaser and
constitutes the legal, valid and binding obligation of the Purchaser enforceable
against it in accordance with its terms, except as the enforceability thereof
may be limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws relating to the enforcement of creditors' rights generally and by
general principles of equity.

          4.2 No Conflicts. The execution, delivery and performance of this
Agreement and the consummation by the Purchaser of the transactions contemplated
hereby will not conflict with, or constitute a default under, or result in the
acceleration or termination of, any Contract to which the Purchaser is a party,
or result in a violation of or default under the Purchaser's organizational
documents or any order, judgment or decree of any court or Governmental or
Regulatory Authority having jurisdiction over the Purchaser or any of its
properties and, no consent, authorization or order of, or filing or registration
with, any Governmental or Regulatory Authority is required by the Purchaser for
the execution, delivery and performance of this Agreement.

          4.3 Investor Representations.

          (a) The Purchaser is an "accredited investor" within the meaning of
Rule 501(a) (1), (2), (3) or (7) under the Securities Act.

          (b) The Purchaser understands that the Debenture and the Registrable
Securities have not been registered under the Securities Act and are being
offered and sold pursuant to an exemption from registration contained in the
Securities Act based upon the representations of the Purchaser contained herein.

                                       9
<PAGE>

          (c) The Purchaser knows of no public solicitation or advertisement of
an offer in connection with the proposed issuance and sale of the Debenture or
the Registrable Securities.

          (d) The Purchaser is acquiring the Debenture and the Registrable
Securities, if any, for its own account for investment and not as a nominee and
not with a view to the distribution thereof. The Purchaser understands that it
must bear the economic risk of this investment indefinitely and that the Company
has no present intention of registering the Debenture or the Registrable
Securities. The Purchaser further understands that there is no assurance that
any exemption from the Securities Act will be available or, if available, that
such exemption will allow the Purchaser to dispose of or otherwise transfer any
or all of the Debenture or the Registrable Securities under the circumstances,
in the amounts or at the times the Purchaser might propose.

          (e) By reason of its business or financial experience, or that of its
professional advisor, the Purchaser has the capacity to protect its own
interests in connection with the purchase of the Debenture and the Registrable
Securities hereunder and has the ability to bear the economic risk (including
the risk of total loss) of its investment.

          (f) The Purchaser acknowledges that it is aware of Rule 144
promulgated under the Securities Act, which permits limited public resales of
securities acquired in a non-public offering, subject to the satisfaction of
certain conditions. The Purchaser understands that under Rule 144, except as
otherwise provided by section (k) of that Rule, the conditions include, among
other things: the availability of certain current public information about the
issuer, the resale occurring not less than one year after the party has
purchased and paid for the securities to be sold and limitations on the amount
of securities to be sold and the manner of sale. The Purchaser acknowledges and
understands that notwithstanding the Company's current reporting obligations
under the Exchange Act, the Company may not be satisfying the current public
information requirement of Rule 144 at the time it wishes to sell the Debenture
or the Registrable Securities received on conversion thereof, and that, in such
event, it may be precluded from selling such stock under such Rule, even if the
one year minimum holding period of such Rule has been satisfied.

          (g) The Purchaser acknowledges that in the event all of the
requirements of Rule 144 are not met, registration under the Securities Act or
an exemption from registration will be required for any disposition of the
Debenture or the Registrable Securities. The Purchaser understands that although
Rule 144 is not exclusive, the SEC has expressed its opinion that persons
proposing to sell restricted securities received in a private offering other
than in a registered offering or pursuant to Rule 144 will have a substantial
burden of proof in establishing that an exemption from registration is available
for such offers or sales and that such persons and the brokers who participate
in the transactions do so at their own risk.

          (h) All voting securities of the Company that the Purchaser, together
with its ultimate parent entity and all entities controlled by the same ultimate
parent as the Purchaser (such entities, including the Purchaser, hereinafter
collectively referred to as the "Purchaser's Affiliates") will hold, directly or
indirectly, as of the Closing Date, will be held solely for the purpose of
investment such that these securities will be held by the Purchaser's Affiliates
with no intention on the part of any of them to participate in the formulation,
determination or direction of the basic business decisions of the Company.

                                       10
<PAGE>

          (i) The Purchaser understands and acknowledges that (i) the
Registrable Securities if and when issued will be issued to it without
registration under the Securities Act and is exempt from the registration
provisions of the Securities Act and (ii) the availability of such exemption
depends in part on, and the Company will rely upon the accuracy and truthfulness
of, the foregoing representations and the Purchaser hereby consents to such
reliance.

          (j) The Purchaser has been given access to all information regarding
the Company and the business, condition and operations of the Company that the
Purchaser has requested in order to evaluate its investment in the Debenture and
the Common Stock. The Purchaser has been given the opportunity to ask questions
of, and to receive answers from, representatives of the Company concerning the
terms and conditions of the offering of the Debenture and other matters
pertaining to the Purchaser's investment in the Debenture. In evaluating the
suitability of the purchase of the Debenture hereunder, the Purchaser has not
relied upon any representations or other information (whether oral or written)
other than as set forth in the SEC Reports or as contained herein.

          (k) The Purchaser understands that the Debenture (and any Common Stock
into which the Debenture may be converted) will bear the following legend (and a
stop-transfer order may be placed against transfer of the certificates for the
Registrable Securities):

         "THIS DEBENTURE AND ANY SHARES ISSUABLE UPON THE EXERCISE OF THIS
         DEBENTURE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
         AMENDED (THE "ACT"), NOR UNDER ANY STATE SECURITIES LAW AND SUCH
         SECURITIES MAY NOT BE PLEDGED, SOLD, ASSIGNED, HYPOTHECATED, OR
         OTHERWISE TRANSFERRED EXCEPT AS PERMITTED BY THE PROVISIONS OF
         REGULATION S UNDER THE ACT OR PURSUANT TO REGISTRATION UNDER THE ACT OR
         AN AVAILABLE EXEMPTION FROM REGISTRATION. THE TRANSFER OF THIS
         DEBENTURE AND THE SHARES ISSUABLE UPON THE EXERCISE HEREOF ARE
         RESTRICTED AS DESCRIBED IN SECTION 7 HEREOF AND AS OTHERWISE DESCRIBED
         HEREIN."

          4.4 Brokers. No agent, broker, finder, investment banker, financial
advisor or other similar Person will be entitled to any fee, commission or other
compensation in connection with any of the transactions contemplated by this
Agreement on the basis of any act or statement made by the Purchaser.

          4.5 Restrictions on Sale. The Purchaser will not, prior to the date on
which a registration statement referred to in Article VI hereof is first
declared effective by the SEC, if then prohibited by law or regulation, sell,
offer to sell, solicit offers to buy, dispose of, loan, pledge or grant any
right with respect to (collectively, a "Disposition"), the Registrable
Securities, nor will the Purchaser engage in any hedging or other transaction
which is designed or could reasonably be expected to lead to or result in a
Disposition of the Registrable Securities by the Purchaser or any person or
entity. Such prohibited hedging or other transaction would include, without
limitation, effecting any short sale or having in effect a short position
(whether such short sale or position is

                                       11
<PAGE>

against the box and regardless of when such position was entered into) or any
purchase, sale or grant of any right (including, without limitation, any put or
call option) with respect to the Registrable Securities or with respect to any
security (other than a broad-based market basket or index) that includes or
derives any significant part of its value from the Registrable Securities.

                                   ARTICLE V

                                CERTAIN COVENANTS

          The Company covenants and agrees with the Purchaser that, for so long
as the Debenture remains outstanding:

          5.1 Access to Company Information. The Company will (a) promptly
provide, or cause to be promptly provided, all material information with respect
to the ongoing viability of the Company (including, but not limited to,
financial and business plans) as may be reasonably requested by the Purchaser,
but no more than once per calendar quarter; provided, that the Purchaser shall
not be entitled to undertake or have undertaken on its behalf a financial audit
of the Company and (b) permit representatives of the Purchaser, from time to
time, to discuss with the officers of the Company such information contemplated
by clause (a) above.

          5.2 Maintenance of Books and Records; Financial Statements; Report;
Etc. The Company will keep adequate records and books of account with respect to
its business activities in which proper entries are made in accordance with GAAP
reflecting all of its financial transactions. Furnish to the Purchaser promptly
after the sending or filing thereof, as the case may be, copies of any proxy
statements, financial statements or reports which the Company has made available
to its shareholders and copies of any regular, periodic and special reports or
registration statements which the Company files with the SEC or any Governmental
or Regulatory Authority which may be substituted therefor, or any national
securities exchange.

          5.3 Insurance. The Company will at all times maintain with financially
sound and reputable insurers insurance with respect to its assets and properties
and businesses against loss or damage of the kind customarily insured against by
companies engaged in the same or similar businesses and similarly situated, of
such types and in such amounts as are customarily carried under similar
circumstances by such companies.

          5.4 Indemnification.

          (a) The Company hereby agrees to indemnify and hold harmless the
Purchaser and its Affiliates, and their respective directors and officers, and
the successors and assigns of all of the foregoing persons, from and against any
and all liabilities, judgments, claims, settlements, losses, damages, reasonable
fees (including attorneys' and other experts' fees and disbursements), liens,
taxes, penalties, obligations and expenses (collectively, "Losses") incurred or
suffered by any such Person arising from, by reason of or in connection with any
breach of any representation, warranty or covenant of the Company contained in
this Agreement; provided, however, that:

                                       12
<PAGE>

        (i)         the Company shall have no obligation to indemnify the
               Purchaser hereunder with respect to breaches of representations
               and warranties unless and until the aggregate amount of Losses
               arising as a result of the breach of representations and
               warranties shall exceed $100,000 and then the Company shall be
               liable for the entire amount of Losses;

        (ii)        the Company shall have no obligation to indemnify the
               Purchaser hereunder for Losses arising as a result of the breach
               of representations and warranties in excess of $3,000,000; and

        (iii)       the Company's obligation under this Section 5.4 with respect
               to representations and warranties shall terminate on the third
               anniversary of the Closing Date (except with respect to claims
               made prior to such date).

(b) The Purchaser hereby agrees to indemnify and hold harmless the Company and
its Affiliates, and their respective directors and officers, and the successors
and assigns of all of the foregoing persons, from and against any and all Losses
incurred or suffered by any such Person arising from, by reason of or in
connection with any breach of any representation, warranty or covenant of the
Purchaser contained in this Agreement; provided, however, that:

        (i)         the Purchaser shall have no obligation to indemnify the
               Company hereunder with respect to breaches of representations and
               warranties unless and until the aggregate amount of Losses
               arising as a result of the breach of representations and
               warranties shall exceed $100,000 and then the Purchaser shall be
               liable for the entire amount of Losses;

        (ii)        the Purchaser shall have no obligation to indemnify the
               Company hereunder for Losses arising as a result of the breach of
               representations and warranties in excess of $3,000,000; and

        (iii)       the Purchaser's obligation under this Section 5.4 with
               respect to representations and warranties shall terminate on the
               third anniversary of the Closing Date (except with respect to
               claims made prior to such date).

          (c) Promptly upon receipt by a party indemnified under this Section
5.4 of notice of the commencement of any action against such indemnified party
in respect of which indemnity or reimbursement may be sought against the
indemnifying party, such indemnified party shall notify the indemnifying party
in writing of the commencement of such action, but the failure so to notify the
indemnifying party shall not relieve it of any liability which it may have to
any indemnified party under this Section 5.4 unless such failure materially
adversely affects the defense of such action. In case notice of commencement of
any such action shall be given to the indemnifying party as above provided, the
indemnifying party shall be entitled to participate in and to assume the defense
of such action at its own expense, with counsel chosen by it, if the
indemnifying party acknowledges to the indemnified party in writing its
obligation to indemnify the indemnified party with respect to such action. The
indemnifying party shall be liable for the fees and expenses of counsel for the
indemnified party for any period during which the

                                       13
<PAGE>

indemnifying party has not assumed the defense thereof (other than during any
period in which the indemnified party shall have failed to give notice of the
action as provided above). If the indemnifying party assumes the defense of an
action, the indemnified party shall agree to any settlement, compromise or
discharge of such action that the indemnifying party may recommend and that by
its terms obligates the indemnifying party to pay the full amount of the
liability in connection with such action, and which releases the indemnified
party completely in connection with such action; provided that, the indemnifying
party shall not agree, without the prior written consent of the indemnified
party, to the entry of any judgment or settlement, compromise or decree that
provides for injunctive or other nonmonetary relief affecting the indemnified
party. The indemnified party shall have the right to employ separate counsel in
any such action and participate in the defense thereof, but the fees and
expenses of such counsel shall be paid by the indemnified party unless (i) the
indemnifying party fails to assume the defense of such action in a timely manner
and in accordance with the foregoing or (ii) the indemnified party has been
advised in writing by counsel that representation of such indemnified party and
the indemnifying party by the same counsel would be inappropriate under
applicable standards of professional conduct (in which case the indemnifying
party shall not have the right to assume the defense of such action on behalf of
such indemnified party). In the foregoing circumstances, the indemnified parties
shall be entitled to engage, and the indemnifying party shall pay the reasonable
costs and expenses of, one counsel (plus any necessary local counsel) for all
indemnified parties. The indemnifying party shall not be liable for any
settlement entered into without its prior written consent (which consent shall
not be unreasonably withheld or delayed).

          5.5 Shares Issuable Upon Conversion. The Company shall at all times
reserve and keep available, out of its authorized and unissued stock, solely for
the purpose of effecting the conversion of the Debenture, the full number of
shares of Common Stock as shall from time to time be sufficient to effect the
conversion of the entire amount of the Debenture from time to time outstanding.
The Company shall from time to time, in accordance with the laws of the State of
Delaware, increase the authorized number of shares of Common Stock if at any
time the number of shares of Common Stock authorized and not then outstanding
shall be insufficient to permit the conversion of the entire amount of the
Debenture then outstanding.

          5.6 Confidentiality.

          (a) Each of the Company and the Purchaser acknowledges that all of the
Confidential Information made available to it by the other party is confidential
and proprietary to the disclosing party and, accordingly, agrees to maintain
such information in confidence for a period of three (3) years after disclosure
thereof. The receiving party further covenants that it shall not disclose any
such information to a third party except to its employees, agents,
representatives, (including, but not limited to, legal advisors, financial
advisors and auditors) or any other person under its authorization
("Representatives"), on a need to know basis, provided such Representatives are
made aware of and agree to abide by the foregoing obligations of the receiving
party.

          (b) Notwithstanding anything above to the contrary, the term
"Confidential Information" shall not apply to information that is (i) in the
public domain, (ii) received by the receiving party on an unrestricted basis
where the receiving party has no duty of confidentiality to

                                       14
<PAGE>

the party providing such information or (iii) required to be disclosed to a
governmental or other regulatory authority or pursuant to legal process, in
which case the receiving party shall promptly notify the other party of such
disclosure.

          (c) Each party acknowledges that damages for disclosure of
Confidential Information in violation of this Section 5.6 would be an inadequate
remedy and that in the event of any such disclosure, the other party shall be
entitled to seek injunctive relief or other equitable relief in addition to any
and all remedies available at law or in equity.

          5.7 Notification. The Purchaser will notify the Company promptly of
the sale of any of the Registrable Securities, other than sales pursuant to a
registration statement contemplated in ARTICLE VI hereof, and the Purchaser will
furnish any information reasonably requested by the Company (including, if so
requested, a legal opinion in form and substance reasonably satisfactory to the
Company and its counsel) to evidence the exemption from the registration
requirements of the Securities Act, and the state securities laws, in reliance
upon which such sales have been made.

                                   ARTICLE VI

                               REGISTRATION RIGHTS

          6.1 Demand Registration.

          (a) The Company agrees that upon receipt of written notice from the
Purchaser, on or after the conversion of the Debenture, requesting registration
of Registrable Securities (a "Registration Demand"), the Company shall with
reasonable promptness, and in any case not later than one hundred twenty (120)
days after receipt by the Company of the Registration Demand, file a
registration statement with the SEC relating to the Registrable Securities as to
which registration is requested in the Registration Demand. The Company shall
use its reasonable best efforts to make such registration statement become
effective and to qualify the same under the Blue Sky laws of such states as may
be requested; provided, however, that with respect to compliance with Blue Sky
laws, the Company shall not be obligated to qualify as a foreign corporation or
as a dealer in securities or to execute or file any general consent to service
of process under the laws of any such state where it is not so subject and would
not otherwise be required to so qualify but for this sentence. The Company shall
not be obligated to effect more than two registrations (whether on Form S-3 (or
any successor or similar form) if the Company is so eligible to use such form or
on Form S-1 (or any successor or similar form) if the Company is not so eligible
to use such Form S-3) under this Section 6.1(a). The Company shall not be
obligated to effect a registration hereunder at any time when the Purchaser
could sell all Registrable Securities within 90 days pursuant to Rule 144 under
the Securities Act. The Company shall not be deemed to have complied with its
obligations under this Section 6.1(a) to effect a registration of Registrable
Securities unless and until the applicable registration statement has been
declared effective by the SEC under the Securities Act and, in the event such
registration statement is not so declared effective, the Purchaser's right to
such demand registration statement pursuant to this Section 6.1(a) shall be
reinstated.

                                       15
<PAGE>

          (b) Notwithstanding the foregoing, the Company shall not be obligated
to file a registration statement pursuant to this Section 6.1 if it has filed a
registration statement for any purpose within the preceding six month period.
The Company shall be entitled to postpone for a reasonable period of time, not
to exceed one hundred twenty (120) days (and only once can this right be
invoked), the filing of any registration statement otherwise required to be
filed by it, if the Board of Directors of the Company determines, in its
reasonable good faith judgment, that such registration statement would be
detrimental to the Company and its stockholders and the Company gives to the
Purchaser written notice of such determination in which event the Company shall
have the right to defer such filing for a period of not more than one hundred
twenty (120) days after receipt of such request by the Purchaser in accordance
with Section 6.1(a). In such event, the Purchaser shall have the right to
withdraw the request for registration by giving written notice to the Company
within sixty (60) days after receipt of the notice of postponement and, in such
event, the Purchaser's right to such demand registration statement pursuant to
this Section 6.1 shall be reinstated.

          (c) Any Registration Demand pursuant to this Section 6.1 shall:

        (i)         specify the number of shares of Registrable Securities
               intended to be offered, state the firm intention of the Purchaser
               to offer such securities for sale and describe the intended
               method of distribution;

        (ii)        contain an undertaking on the part of the Purchaser to
               provide all such information and materials concerning the
               Purchaser and take all such action as may be required to permit
               the Company to comply with all applicable requirements of the SEC
               in connection with such registration statement; and

        (iii)       contain an undertaking on the part of the Purchaser to enter
               into an underwriting agreement in customary form.

          (d) Neither the Company nor any other Person (other than the Purchaser
and its transferees) shall be entitled to have Common Stock ("Other Registrable
Securities") registered in connection with the registration of Registrable
Securities pursuant to this Section 6.1 unless the Company or such other Person
shall agree for the benefit of the Purchaser that the number of shares of Other
Registrable Securities to be included in such registration may be reduced (pro
rata among all Persons holding Other Registrable Securities), or that all of
such Other Registrable Securities may be excluded from any such registration, if
the Company or the Purchaser is advised in writing by the managing underwriter
that such reduction or exclusion is necessary to avoid materially adversely
affecting the public offering of the securities being offered by the Purchaser.
At any time before the registration statement covering Registrable Shares
pursuant to this Section 6.1 becomes effective, the Purchaser may request the
Company to withdraw or not to file the registration statement. In that event, if
such request of withdrawal shall not have been caused by, or made in response
to, a Material Adverse Effect on the Company, the Purchaser shall have used one
of its Registration Demand rights under this Section 6.1 unless the Purchaser
shall pay to the Company the Purchaser's pro rata expenses incurred by the
Company (based on the number of shares of the Purchaser being registered to the
total number of shares being registered) through the date of such request.

                                       16
<PAGE>

          6.2 Piggyback Rights.

          (a) If the Company proposes to file a registration statement under the
Securities Act on behalf of the Company or otherwise, the Company shall give
written notice of such registration no later than seven (7) business days before
its filing with the SEC to the Purchaser regardless of whether the Purchaser is
holding the Debenture or Registrable Securities; provided, that registrations
relating solely to securities to be issued by the Company in connection with any
acquisition, employee stock option or employee stock purchase or savings plan on
Form S-4 or S-8 (or successor Forms) under the Securities Act shall not be
subject to this Section 6.2. If the Purchaser so request in writing within seven
(7) business days after delivery of such notice by the Company, the Company
shall include in any such registration statement any Common Stock obtained (or
to be obtained) by the Purchaser upon conversion of the Debenture held by the
Purchaser and requested to be included in such registration. Any such written
request by the Purchaser shall contain an undertaking on the part of the
Purchaser to provide all such information and materials concerning the Purchaser
and take such action as may be required to permit the Company to comply with all
applicable requirements of the SEC in connection with such registration.
Notwithstanding Section 7.1, for purposes of this Section 6.2(a), any and all
notices by the Company to the Purchaser shall be in writing and will be deemed
to have been duly given only if delivered by facsimile transmission against
facsimile and telephonic confirmation.

          (b) The Company may require that the number of shares of Registrable
Securities to be included in such registration be reduced (pro rata among the
Purchaser and any other Person exercising "piggy-back" registration rights), or
that all of such shares be excluded from any such registration, if the Company
is advised in writing by the managing underwriter of the offering that such
reduction or exclusion is necessary to avoid materially adversely affecting the
public offering of the securities being offered by the Company. In the event
that (i) the Purchaser converts all or less than all of the remaining principal
amount of the Debenture together with all accrued and unpaid interest in order
to participate in such registration and (ii) the number of shares of Registrable
Securities to be included in such registration are reduced as contemplated
above, then an amount equal to the number of shares that the Purchaser is
cutback multiplied by the applicable Conversion Price shall be added back to the
outstanding principal amount of the Debenture.

          6.3 Expenses. In the event that the Purchaser participates in a
registration under this Article VI, the Purchaser shall be responsible for the
underwriting discounts and selling commissions applicable to the Registrable
Securities sold by the Purchaser and any expenses incurred by the Purchaser in
connection therewith, in proportion to the number of securities sold by all
holders thereunder, except that the Company shall pay the reasonable costs and
expenses of the Purchaser's counsel ("Purchaser's Counsel") for each
registration in which the Purchaser participates in an amount not to exceed
$20,000 (per registration); provided, however, that the Purchaser shall pay the
reasonable costs and expenses of the Purchaser's Counsel for each registration
after the Purchaser has used one of its Registration Demand rights under Section
6.1. Except as otherwise specifically provided in this Article VI, the costs and
expenses of any registration and qualification pursuant to Article VI hereof
shall be borne by the Company. Such costs and expenses shall include the fees
and expenses of counsel for the

                                       17
<PAGE>

Company and of its accountants, all other costs, reasonable fees and expenses of
the Company incident to the preparation, printing and filing under the
Securities Act of the registration statement and all amendments and supplements
thereto, the cost of furnishing copies of each preliminary prospectus, each
final prospectus and each amendment or supplement thereto to underwriters,
dealers and the Purchaser and the costs and expenses (including fees and
disbursements of counsel) incurred in connection with the qualification under
the Blue Sky laws of various jurisdictions.

          6.4 Procedures.

          (a) In connection with any registration pursuant to this Article VI,
the Company may require that the Purchaser effect the offer and sale of
Registrable Securities pursuant to an underwritten offering with underwriters
reasonably acceptable to the Company.

          (b) In the case of each registration or qualification pursuant to
Article VI, the Company will keep the Purchaser and Purchaser's Counsel advised
as to the initiation of proceedings for such registration and qualification and
as to the completion thereof, and will advise the Purchaser and Purchaser's
Counsel, upon request, of the progress of such proceeding. The Company will give
the Purchaser and Purchaser's Counsel the opportunity to review any registration
statement prepared pursuant to this Article VI, each prospectus included
therein, and each amendment thereto or supplement thereto, before the same is
filed with the SEC, and will give the Purchaser and Purchaser's Counsel such
access to its books and records and such opportunities to discuss the business
of the Company with its officers, counsel and the independent auditors who have
certified its financial statements, as shall be reasonably necessary in order to
allow the Purchaser and Purchaser's Counsel to conduct a reasonable and diligent
investigation within the meaning of the Securities Act. The Company will notify
the Purchaser upon the happening of any event as a result of which any
prospectus included in a registration statement, as then in effect, includes an
untrue statement of a material fact or omits to state a material fact required
to be stated therein or necessary to make the statements therein not misleading
in the light of the circumstances then existing.

          (c) At the Company's expense, the Company will keep each registration
and qualification involving an underwritten offering under this Article VI
effective (and in compliance with the Securities Act) by such action as may be
necessary or appropriate for a period of one-hundred twenty (120) days after the
effective date of such registration statement (or until all the securities
registered pursuant thereto have been sold), including, without limitation, the
filing of post-effective amendments and supplements to any registration
statement or prospectus necessary to keep the registration statement current and
the further qualification under any applicable Blue Sky or other state
securities laws to permit such sale or distribution, all as requested by the
Purchaser.

          (d) In connection with any registration under this Article VI, the
Company shall cause the Registrable Securities being registered to be listed on
such securities exchange or eligible for trading on such over-the-counter market
as other securities of the Company of the same class are traded, in each case
not later than the effective date of such registration statement.

                                       18
<PAGE>

          (e) The Company shall use its reasonable best efforts to obtain from
its independent auditors "cold comfort" letters in customary form and at
customary times and covering matters of the type customarily covered by cold
comfort letters, addressed to the underwriters.

          (f) The Company shall use its reasonable best efforts to obtain from
its counsel an opinion or opinions in customary form, addressed to the
underwriters and the Purchaser selling Registrable Securities.

          6.5 Provision of Documents. The Company will, at its expense, furnish
to the Purchaser and Purchaser's Counsel such number of registration statements,
prospectuses, and other documents incident to any registration or qualification
referred to in this Article VI as may be reasonably requested.

          6.6 Indemnification.

          (a) The Company will indemnify and hold harmless the Purchaser and any
underwriters (as defined in the Securities Act) for the Purchaser and each
person, if any, who controls the Purchaser or such underwriters within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act
against any losses, claims, damages or liabilities, joint or several, and
expenses (including reasonable attorneys' fees and expenses and reasonable costs
of investigation) to which the Purchaser or such underwriters or such
controlling person may be subject, under the Securities Act or otherwise,
insofar as any thereof arise out of or are based upon (i) any untrue statement
(or alleged untrue statement) of a material fact contained in any registration
statement under which Registrable Securities were registered under the
Securities Act pursuant to this Article VI, any prospectus contained therein, or
any amendment or supplement thereto, or (ii) the omission (or alleged omission)
to state in any item referred to in the preceding clause (i) a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading, except
insofar as such losses, claims, damages, liabilities or expenses arise out of or
are based upon any untrue statement or alleged untrue statement or omission or
alleged omission based upon information furnished to the Company by the
Purchaser (or by any underwriter on behalf of and at the specific direction of
the Purchaser) in writing specifically for use therein (with respect to which
information the Purchaser shall so indemnify and hold harmless the Company, any
underwriters for the Company and each person, if any, who controls the Company
or such underwriters within the meaning of the Securities Act; provided,
however, that the maximum liability of the Purchaser or such underwriter under
this indemnity shall be limited to the amount of the net proceeds received by
the Purchaser or such underwriter from the sale of such Registrable Securities
to which such indemnification relates). The indemnity contained in this Section
6.6(a) shall not inure to the benefit of an indemnified party to the extent that
the loss, claim, damage, liability or expense results from an untrue statement
in or omission from a preliminary prospectus, a copy of which was made available
to the indemnified party, and (i) such untrue statement in or omission from the
preliminary prospectus was corrected in the final prospectus, a copy of which
was made available to the indemnified party, and (ii) the indemnified party
failed to cause a copy of such final prospectus to be delivered to the person

                                       19
<PAGE>

asserting such claim at or prior to the written confirmation of the sale of
securities to such person.

          (b) Promptly upon receipt by a party indemnified under this Section
6.6 of notice of the commencement of any action against such indemnified party
in respect of which indemnity or reimbursement may be sought against any
indemnifying party under this Section 6.6, such indemnified party shall notify
the indemnifying party in writing of the commencement of such action, but the
failure so to notify the indemnifying party shall not relieve it of any
liability which it may have to any indemnified party under this Section 6.6
unless such failure materially adversely affects the defense of such action. In
case notice of commencement of any such action shall be given to the
indemnifying party as above provided, the indemnifying party shall be entitled
to participate in and, to the extent it may wish, jointly with any other
indemnifying party similarly notified, to assume the defense of such action at
its own expense, with counsel chosen by it, if the indemnifying party
acknowledges to the indemnified party in writing its obligation to indemnify the
indemnified party with respect to such action. The indemnifying party shall be
liable for the fees and expenses of counsel for the indemnified party for any
period during which the indemnifying party has not assumed the defense thereof
(other than during any period in which the indemnified party shall have failed
to give notice of the action as provided above). If the indemnifying party
assumes the defense of an action, the indemnified party shall agree to any
settlement, compromise or discharge of such action that the indemnifying party
may recommend and that by its terms obligates the indemnifying party to pay the
full amount of the liability in connection with such action, and which releases
the indemnified party completely in connection with such action; provided that,
the indemnifying party shall not agree, without the prior written consent of the
indemnified party, to the entry of any judgment or settlement, compromise or
decree that provides for injunctive or other nonmonetary relief affecting the
indemnified party. The indemnified party shall have the right to employ separate
counsel in any such action and participate in the defense thereof, but the fees
and expenses of such counsel shall be paid by the indemnified party unless (i)
the indemnifying party fails to assume the defense of such action in a timely
manner and in accordance with the foregoing or (ii) the indemnified party has
been advised in writing by counsel that representation of such indemnified party
and the indemnifying party by the same counsel would be inappropriate under
applicable standards of professional conduct (in which case the indemnifying
party shall not have the right to assume the defense of such action on behalf of
such indemnified party). In the foregoing circumstances, the indemnified party
shall be entitled to engage, and the indemnifying party shall pay the reasonable
costs and expenses of, one counsel (plus any necessary local counsel) for the
indemnified party. No indemnifying party shall be liable for any settlement
entered into without its prior written consent, which consent shall not be
unreasonably withheld or delayed.

          (c) If the indemnification provided for in this Section 6.6 is
unavailable or insufficient to hold harmless an indemnified party in respect of
any losses, claims, damages, liabilities, expenses or actions in respect thereof
referred to in this Section 6.6, then the indemnifying party shall in lieu of
indemnifying such indemnified party contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages, liabilities,
expenses or actions in such proportion as is appropriate to reflect the relative
fault of the Company, on the one hand, and the Purchaser (and its underwriters)
on the other, in connection

                                       20
<PAGE>

with the statements or omissions which resulted in such losses, claims, damages,
liabilities, expenses or actions as well as any other relevant equitable
considerations, including the failure to give the notice required hereunder. The
relative fault shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact relates to information
supplied by the Company, on the one hand, or the Purchaser (and its underwriters
at the specific direction of the Purchaser), on the other hand, and the parties
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The Company and the Purchaser agree that it
would not be just and equitable if contribution pursuant to this Section 6.6
were determined by pro rata allocation or by any other method of allocation
which did not take account of the equitable considerations referred to above.
The amount paid or payable by the indemnified party as a result of the losses,
claims, damages, liabilities or actions in respect thereof referred to above
shall be deemed to include any legal or other expenses reasonably incurred by
such indemnified party in connection with investigating or defending any such
action or claim; provided, however, that the maximum liability of the Purchaser
or underwriter hereunder shall be limited to the amount of the net proceeds
received by the Purchaser or underwriter from the sale of Registrable Securities
to which such contribution relates. No person guilty of fraudulent
misrepresentations (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who is not guilty of such
fraudulent misrepresentation.

                                   ARTICLE VII

                                  MISCELLANEOUS

          7.1 Notices. All notices, requests and other communications hereunder
must be in writing and will be deemed to have been duly given only if delivered
personally against written receipt or by facsimile transmission against
facsimile confirmation or mailed by prepaid first class certified mail, return
receipt requested, or mailed by nationally recognized overnight courier prepaid,
to the parties at the following addresses or facsimile numbers:

        (i) If to the Company, to:

                                       21
<PAGE>

                                Aphton Corporation
                                80 SW 8th Street
                                Miami, FL  33130
                                Facsimile No.:
                                Attn:  [______________]

                           with a copy to:

                                White & Case LLP
                                1155 Avenue of the Americas
                                New York, NY  10036
                                Facsimile No.:  (212) 354-8113
                                Attn:  Jonathan E. Kahn, Esq.

                           and

        (ii) If to the Purchaser, to:

                                [Aventis Pharmaceuticals Inc.]
                                200 Crossing Boulevard
                                P.O. Box 6890
                                Bridgewater, NJ 08807-0890
                                Facsimile No.:
                                Attn:  [______________]

                           with a copy to:

                                Morgan Lewis & Bockius, LLP
                                101 Park Avenue
                                New York, NY  10178
                                Facsimile No.:  (212) 309-6273
                                Attn:  Randy Sunberg, Esq.

All such notices, requests and other communications will (i) if delivered
personally against written receipt to the address as provided in this Section,
be deemed given upon delivery, (ii) if delivered by facsimile transmission to
the facsimile number as provided for in this Section, be deemed given upon
facsimile confirmation, (iii) if delivered by mail in the manner described above
to the address as provided for in this Section, be deemed given on the earlier
of the third Business Day following mailing or upon receipt and (iv) if
delivered by nationally recognized overnight courier to the address as provided
in this Section, be deemed given on the earlier of the first Business Day
following the date sent by such overnight courier or upon receipt (in each case
regardless of whether such notice, request or other communication is received by
any other

                                       22
<PAGE>

Person to whom a copy of such notice is to be delivered pursuant to
this Section). Any party from time to time may change its address, facsimile
number or other information for the purpose of notices to that party by giving
notice specifying such change to the other parties hereto.

          7.2 Reserved.

          7.3 Entire Agreement. This Agreement and the Debenture supersede all
prior discussions and agreements between the parties with respect to the subject
matter hereof and thereof and contain the sole and entire agreement between the
parties hereto with respect to the subject matter hereof and thereof.

          7.4 Survival. The representations, warranties, covenants and
agreements of the Company and the Purchaser contained in this Agreement will
survive the Closing.

          7.5 Further Assurances; Post-Closing Cooperation. At any time or from
time to time after the Closing, the Company shall at its own cost and expense
execute and deliver to the Purchaser such other documents and instruments,
provide such materials and information and take such other actions as the
Purchaser may reasonably request to consummate the transactions contemplated by
this Agreement and otherwise to cause the Company to fulfill its obligations
under this Agreement.

          7.6 Waiver. Any term or condition of this Agreement may be waived at
any time by the party that is entitled to the benefit thereof, but no such
waiver shall be effective unless set forth in a written instrument duly executed
by or on behalf of the party waiving such term or condition. No waiver by any
party of any term or condition of this Agreement, in any one or more instances,
shall be deemed to be or construed as a waiver of the same or any other term or
condition of this Agreement on any future occasion. All remedies, either under
this Agreement or by Law or otherwise afforded, will be cumulative and not
alternative.

          7.7 Amendment. This Agreement may be amended, supplemented or modified
only by a written instrument duly executed by or on behalf of each party hereto.

          7.8 Right to Rely. Notwithstanding any right of any party (whether or
not exercised) to investigate the affairs of any other party contained in this
Agreement, each party has the right to rely fully upon the representations,
warranties, covenants and agreements contained in this Agreement.

          7.9 Third Party Beneficiaries. The terms and provisions of this
Agreement are intended solely for the benefit of each party hereto and their
respective successors and assigns, and it is not the intention of the parties to
confer third-party beneficiary rights, and this Agreement does not confer any
such rights, upon any other Person other than any Person entitled to indemnity
under Article V or VI.

          7.10 No Assignment; Binding Effect. Neither this Agreement nor any
right, interest or obligation hereunder may be assigned (by operation of law or
otherwise) by the Company without the prior written consent of the Purchaser, or
by the Purchaser without the prior written consent of the Company, and any
attempt to do so will be void; provided, however, that the Purchaser shall have
the right to assign this Agreement or any such right, interest or obligation to
any Person described in subsection (a) of the definition of Affiliate without
such consent of the Company. Subject to the preceding sentence, this Agreement
is binding upon, inures to the benefit of and is enforceable by the parties
hereto and their respective successors and assigns.

                                       23
<PAGE>

          7.11 Headings. The headings used in this Agreement have been inserted
for convenience of reference only and do not define or limit the provisions
hereof.

          7.12 Invalid Provisions. If any provision of this Agreement is held to
be illegal, invalid or unenforceable under any present or future law, and if the
rights or obligations of any party hereto under this Agreement will not be
materially and adversely affected thereby, (a) such provision will be fully
severable, (b) this Agreement will be construed and enforced as if such illegal,
invalid or unenforceable provision had never comprised a part hereof, (c) the
remaining provisions of this Agreement will remain in full force and effect and
will not be affected by the illegal, invalid or unenforceable provision or by
its severance therefrom and (d) in lieu of such illegal, invalid or
unenforceable provision, there will be added automatically as a part of this
Agreement a legal, valid and enforceable provision as similar in terms to such
illegal, invalid or unenforceable provision as may be possible.

          7.13 Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York, without giving effect to
the rules governing the conflicts of laws. The parties hereby irrevocably
consent to the jurisdiction of the courts of the State of New York and of any
federal court located in such state in connection with any action or proceeding
arising out of or relating to this Agreement.

          7.14 Waiver of Jury Trial. BECAUSE DISPUTES ARISING IN CONNECTION WITH
COMPLEX FINANCIAL TRANSACTIONS ARE MOST QUICKLY AND ECONOMICALLY RESOLVED BY AN
EXPERIENCED AND EXPERT PERSON AND THE PARTIES WISH APPLICABLE STATE AND FEDERAL
LAWS TO APPLY (RATHER THAN ARBITRATION RULES), THE PARTIES DESIRE THAT THEIR
DISPUTES BE RESOLVED BY A JUDGE APPLYING SUCH APPLICABLE LAWS. THEREFORE, TO
ACHIEVE THE BEST COMBINATION OF THE BENEFITS OF THE JUDICIAL SYSTEM AND OF
ARBITRATION, THE PARTIES HERETO WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION,
SUIT OR PROCEEDING BROUGHT TO ENFORCE OR DEFEND ANY RIGHTS OR REMEDIES UNDER
THIS AGREEMENT, THE TRANSACTION DOCUMENTS OR ANY DOCUMENTS RELATED HERETO.

          7.15 Construction. The parties hereto agree that this Agreement is the
product of negotiation between sophisticated parties and individuals, all of
whom were represented by counsel, and each of whom had an opportunity to
participate in and did participate in, the drafting of each provision hereof.
Accordingly, ambiguities in this Agreement, if any, shall not be construed
strictly or in favor of or against any party hereto but rather shall be given a
fair and reasonable construction without regard to the rule of contra
proferentum.

                                       24
<PAGE>

          7.16 Counterparts. This Agreement may be executed in any number of
counterparts, each of which will be deemed an original, but all of which
together will constitute one and the same instrument.

                           [signature page to follow]

                                       25
<PAGE>

          IN WITNESS WHEREOF, this Debenture Purchase Agreement has been duly
executed and delivered by the duly authorized representative of each party
hereto as of the date first above written.

                                        Aphton Corporation

                                        By: /s/ Philip C. Gevas
                                           -------------------------------------
                                           Name:  Philip C. Gevas
                                           Title:  Chief Executive Officer

                                        Aventis Pharmaceuticals Inc.

                                        By:  /s/ Michael A. Yeomans
                                           -------------------------------------
                                           Name:  Michael Yeomans
                                           Title:  Vice President, Global
                                                   Business Development
<PAGE>

                                                                       Exhibit A

                         SERIES A CONVERTIBLE DEBENTURE
<PAGE>

                                                                       Exhibit B

                        OPINION OF THE COMPANY'S COUNSEL
<PAGE>

                                TABLE OF CONTENTS

                            ARTICLE I DEFINITIONS 1

        1.1      Definitions                                                  1

                                   ARTICLE II
                     SALE AND PURCHASE OF DEBENTURE; CLOSING

        2.1      Sale and Purchase of Debenture                               4
        2.2      The Closing                                                  4

                                   ARTICLE III

                  REPRESENTATIONS AND WARRANTIES OF THE COMPANY

        3.1       Organization and Qualification                              5
        3.2       Authority                                                   5
        3.3       No Conflicts                                                5
        3.4       Brokers                                                     5
        3.5       Exemption from Registration                                 6
        3.6       Litigation                                                  6
        3.7       No Defaults                                                 6
        3.8       SEC Reports and Financial                                   6
                   Statements
        3.9       Events Subsequent to the                                    6
                  Date of the Last Financial
                   Statement
        3.10      Absence of Undisclosed                                      7
                   Liabilities
        3.11      Title to Assets, Properties                                 7
                   and Rights
        3.12      Patents, Trademarks,                                        7
                  Copyrights and Licenses
        3.13      Governmental Consents                                       8
        3.14      No Consent or Approval                                      8
                   Required
        3.15      Compliance with Laws                                        8
        3.16      Capitalization                                              8
        3.17      Subsidiaries                                                8
        3.18      Labor Relations.                                            8

                                   ARTICLE IV

                 REPRESENTATIONS AND WARRANTIES OF THE PURCHASER

        4.1       Organization; Power and                                     9
                   Authority
        4.2       No Conflicts                                                9
        4.3       Investor Representations                                    9
        4.4       Brokers                                                    11
        4.5       Restrictions on Sale.                                      11

                                    ARTICLE V

                                CERTAIN COVENANTS

        5.1       Visits and Inspections.                                    12
        5.2       Maintenance of Books and                                   12
                   Records; Financial
                   Statements; Report; Etc.
        5.3       Insurance.                                                 12
        5.4       Indemnification                                            12
        5.5       Shares Issuable Upon                                       14
                   Conversion
        5.6       Notification                                               14

                                   ARTICLE VI

                              REGISTRATION RIGHTS

        6.1       Demand Registration                                        14
        6.2       Piggyback Rights                                           16
        6.3       Expenses                                                   17
        6.4       Procedures                                                 17
        6.5       Provision of Documents                                     18
        6.6       Indemnification                                            18

                                  ARTICLE VII

                                 MISCELLANEOUS

        7.1       Notices                                                    20
        7.2       Reserved.                                                  22
        7.3       Entire Agreement                                           22
        7.4       Survival                                                   22
        7.5       Further Assurances;                                        22
                   Post-Closing Cooperation
        7.6       Waiver                                                     22
        7.7       Amendment                                                  22
        7.8       Right to Rely                                              22
        7.9       Third Party Beneficiaries                                  22
        7.10      No Assignment; Binding                                     22
                   Effect
        7.11      Headings                                                   23
        7.12      Invalid Provisions                                         23
        7.13      Governing Law.                                             23
        7.14      Waiver of Jury Trial                                       23
        7.15      Construction                                               23
        7.16      Counterparts                                               24DEBENTURE

THIS DEBENTURE AND ANY SHARES  ISSUABLE UPON THE EXERCISE OF THIS DEBENTURE HAVE
NOT BEEN  REGISTERED  UNDER THE  SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"),
NOR UNDER ANY STATE SECURITIES LAW AND SUCH SECURITIES MAY NOT BE PLEDGED, SOLD,
ASSIGNED,  HYPOTHECATED,  OR  OTHERWISE  TRANSFERRED  EXCEPT AS PERMITTED BY THE
PROVISIONS OF REGULATION S UNDER THE ACT OR PURSUANT TO  REGISTRATION  UNDER THE
ACT OR AN AVAILABLE EXEMPTION FROM REGISTRATION.  THE TRANSFER OF THIS DEBENTURE
AND THE SHARES  ISSUABLE UPON THE EXERCISE HEREOF ARE RESTRICTED AS DESCRIBED IN
SECTION 7 HEREOF AND AS OTHERWISE DESCRIBED HEREIN.

No. D-01                                                            US$3,000,000

                               APHTON CORPORATION

              SERIES A CONVERTIBLE DEBENTURE DUE DECEMBER 19, 2007

     THIS  DEBENTURE  is a  duly  authorized  issue  of  APHTON  CORPORATION,  a
corporation  organized and existing under the laws of the State of Delaware (the
"Company")  designated as its Series A Convertible  Debenture due 2007. The date
on which this  Debenture  is issued is referred  to herein as the "Issue  Date."
This  Debenture  is issued by the  Company  pursuant to the  Debenture  Purchase
Agreement,  dated as of  December  __,  2002,  regarding  Series  A  Convertible
Debenture due 2007 of the Company (as such agreement may be amended from time to
time, the "Debenture Purchase Agreement").

     FOR VALUE RECEIVED, the Company promises to pay to [Aventis Pharmaceuticals
Inc.], a [Delaware]  corporation,  the registered  holder hereof (the "Holder"),
the principal sum of $3,000,000  (the "Face Amount") plus all accrued and unpaid
interest on December 19, 2007 (the  "Maturity  Date").  Interest shall accrue on
this Debenture as set forth herein.

     This Debenture is subject to the following additional provisions:

     1. INTEREST.  This Debenture shall bear interest at a rate of 11% per annum
on the unpaid Face Amount from the Issue Date until the Maturity  Date,  payable
in cash annually on January 5th of each year.  Interest will accrue daily on the
unpaid  principal  amount of this Debenture.  Upon the occurrence and during the
continuance of an Event of Default, interest will accrue on the unpaid principal
amount of this Debenture,  all accrued and unpaid interest on this Debenture and
any other amounts payable hereunder,  to the extent permitted by applicable law,
at 13% per annum.  In no event shall any interest  payable under this  Debenture
exceed the maximum rate of interest permissible under any applicable usury law.
<PAGE>

     2.  CONVERSION.  (a) The Holder is  entitled,  at its option after the date
that is 90 days after the date hereof,  subject to the  following  provisions of
this Section 2 and the necessary shareholder approvals as required by the Nasdaq
National Market or such other domestic  securities  exchange or quotation system
upon which shares of Common Stock,  par value $.001 per share ("Common  Stock"),
may be listed,  to  convert  all or a portion of this  Debenture  including  the
accrued and unpaid interest hereon (the "Conversion")  into unregistered  shares
of Common  Stock of the  Company,  at any time  until the  Maturity  Date,  at a
conversion price for each share of Common Stock (the  "Conversion  Price") equal
to the average closing price of Common Stock on the Nasdaq National Market,  the
Nasdaq  SmallCap  Market or the OTC Bulletin  Board, as the case may be, for the
five (5) trading days prior to the Conversion Date (as defined below);  provided
that (i) the principal amount being converted is at least US$100,000.00  (unless
if at the  time of  such  election  to  convert  the  principal  amount  of this
Debenture is less than US  $100,000.00,  then the whole amount thereof) and (ii)
the number of shares of Common  Stock  issuable  upon such  election to convert,
together  with any Common  Stock  already  owned by the Holder or any  affiliate
thereof, does not exceed 19.9% of the Common Stock outstanding as of the date of
the  Conversion  Date (the "19.9%  Cap").  The number of shares of Common  Stock
issuable upon exercise of this  Debenture (the  "Conversion  Shares") into which
this Debenture are convertible shall be determined by dividing (a) the principal
amount of this  Debenture to be converted,  together with all accrued and unpaid
interest hereon,  by (b) the Conversion Price then in effect.  In the event that
the number of Conversion  Shares exceeds the 19.9% Cap, the Company will pay the
remaining  principal  balance  of this  Debenture  plus all  accrued  and unpaid
interest hereon on the Maturity Date.

     (b) In order to convert  the  principal  amount of this  Debenture,  or any
portion thereof  (including any accrued and unpaid interest hereon),  the Holder
shall send by facsimile transmission (and confirm such transmission by telephone
or voicemail message) a notice of conversion (the "Notice of Conversion") to the
Company and the Company shall notify its transfer  agent,  U.S.  Stock  Transfer
Corporation,  located at 1745 Gardena Avenue, Glendale, California 91204-2991 or
any successor  thereto (the  "Transfer  Agent"),  stating  either (i) the dollar
amount or (ii) the  remaining  principal  amount  (and any  accrued  and  unpaid
interest hereon), to be converted and the applicable Conversion Price, and prior
to  Conversion,  the Holder must  physically  surrender  this  Debenture  to the
Company. In the event that the Holder converts less than the remaining principal
amount under this Debenture,  the amount to be converted shall first be deducted
from the accrued  and unpaid  interest,  and then the balance  shall be deducted
from the remaining principal amount.

     (c) No fractional shares of Common Stock or scrip representing fractions of
shares will be issued on conversion,  but the number of shares issuable shall be
rounded  down to the  nearest  whole  share.  The date on which  the  Notice  of
Conversion  is given (the  "Conversion  Date") shall be deemed to be the date on
which  the  Holder  faxes  or  otherwise  delivers  the  Notice  of  Conversion,
substantially  in the form annexed  hereto as Exhibit A, duly  executed,  to the
Company,  provided  that the Holder  shall  deliver to the Company the  original
Debenture being  converted  within five (5) business days thereafter (and if not
so delivered  within such time, the

                                      -2-
<PAGE>

Conversion Date shall be the date on which the later of the Notice of Conversion
and  the  original  Debenture  being  converted  is  received  by the  Company).
Facsimile  delivery of the Notice of Conversion shall be accepted by the Company
at facsimile number (305) 374-7615;  Attn: Chief Executive  Officer,  or at such
other  facsimile  number as the Company may provide to the Holder.  In the event
that (i) the entire  remaining  principal  amount  together with all accrued and
unpaid  interest under this Debenture is being converted in accordance with this
Section  2, such  fraction  shall be paid to the Holder "in cash" on the date of
such  conversion  and (ii)  less  than the  entire  remaining  principal  amount
together  with all accrued and unpaid  interest  under this  Debenture  is being
converted in accordance  with this Section 2, such fraction  shall be added back
to the principal amount remaining under this Debenture.

     3. REDEMPTION. (a) The Company is entitled, at its option at any time after
the date  hereof,  subject to the  following  provisions  of this  Section 3, to
redeem by payment to the Holder in cash or Conversion Shares or a combination of
both,  at the  Holder's  option,  the  principal  amount and  accrued and unpaid
interest of this Debenture as of the date of such redemption.

     (b) If (i) the  Company  and the  Holder  fail to  execute a  collaboration
agreement  between  the Company and the Holder by March 31, 2003 and (ii)(A) the
Company sells, licenses,  assigns,  pledges or otherwise transfers its rights to
the  Projects  (as  defined in the Letter of Intent  between the Company and the
Holder,  dated December __, 2002) or any other Company product to an entity that
is not the Holder or an  affiliate  thereof  or (B) a Change of Control  occurs,
then any portion of this  Debenture  that  remains  outstanding  as of that date
shall be, unless  otherwise  designated  by the Holder,  redeemed by the Company
within thirty (30) days by payment to the Holder in cash or Conversion Shares or
a combination  of both,  at the Holder's  option,  of the  principal  amount and
accrued and unpaid interest of this Debenture as of the date of such redemption.
"Change of Control" means the sale of the Company either by way of (i) a sale or
other  disposition of all or  substantially  all of the assets of the Company to
another  person or entity or (ii)  merger,  consolidation,  issuance  of shares,
reorganization,   share   exchange  or  any  other   transaction  or  series  of
transactions  to,  with or into  another  person or persons or entity in which a
single person or group of affiliated persons obtains ownership or control of 50%
or more of (A) the  voting  power or (B) any  class of equity  interests  of the
Company.

     (c)  If,  at  any  time  while  any  portion  of  this  Debenture   remains
outstanding,  the  Company  shall sell,  license,  assign,  pledge or  otherwise
transfer its rights to any of the Projects or any other  Company  product or any
other  rights  related  thereto  to any  entity  other  than the  Holder  or its
affiliates  or  subsidiaries,  then any portion of this  Debenture  that remains
outstanding  as of the  date  of  such  sale,  license,  assignment,  pledge  or
transfer,  shall be, unless otherwise designated by the Holder,  redeemed by the
Company  within  thirty (30) days by payment to the Holder in cash or Conversion
Shares or a combination of both, at the Holder's option, of the principal amount
and accrued and unpaid  interest of this  Debenture as of the date of such sale,
license, assignment, pledge or transfer.

     (d) Any  portion  of this  Debenture  that  remains  outstanding  as of the
Maturity Date shall be, unless otherwise  designated by the Holder,  redeemed by
the  Company  by  payment  to the

                                      -3-
<PAGE>

Holder in cash or Conversion  Shares or a  combination  of both, at the Holder's
option, of the principal amount of this Debenture  together with any accrued and
unpaid interest hereon on the Maturity Date.

     4. ADJUSTMENTS TO CONVERSION PRICE. (a) The number of Conversion Shares and
the  Conversion  Price  shall be  subject  to  adjustment  from  time to time as
provided in this Section 4. There shall be no adjustment  hereunder with respect
to (A) the  issuance  or sale of shares or  options  to  purchase  shares of the
Common Stock to employees,  officers,  directors and  consultants of the Company
and its  subsidiaries  (as such number of shares is  appropriately  adjusted for
subsequent   stock   splits,    stock   combinations,    stock   dividends   and
recapitalizations)  pursuant to plans or arrangements  approved by the Company's
Board  of  Directors;  (B) the  issue or sale to other  entities  or the  owners
thereof for acquisition  purposes;  and (C) the issue and sale to banks, savings
and loan associations,  equipment lessors or other similar lending  institutions
in connection with such entities  providing working capital credit facilities or
equipment financing to the Company.

     (b) The reclassification of Common Stock into securities (other than Common
Stock)  and/or  cash  and/or  other  consideration  shall be deemed to involve a
subdivision  or  combination,  as the case may be,  of the  number  of shares of
Common Stock  outstanding  immediately prior to such  reclassification  into the
number  or  amount  of  securities   and/or  cash  and/or  other   consideration
outstanding   immediately   thereafter,   and   the   effective   date  of  such
reclassification  shall be deemed  to be "the day upon  which  such  subdivision
becomes effective" or "the day upon which such combination  becomes  effective,"
as the case may be, within the meaning of Section 4(c).

     (c) In the  event  of  any  capital  reorganization  of  the  Company,  any
reclassification  of the stock of the Company  (other than a change in par value
or from par  value to no par  value  or from no par  value to par  value or as a
result of a stock dividend or  subdivision,  split-up or combination of shares),
any sale or transfer to another  person or entity of the property of the Company
as an entirety or substantially as an entirety,  or any  consolidation or merger
of the Company  with or into another  corporation  (where the Company is not the
surviving corporation or where there is a change in or distribution with respect
to  the  Common  Stock),   this  Debenture  shall  after  such   reorganization,
reclassification,  consolidation, transfer or merger be exercisable for the kind
and number of shares of stock or other  securities or property of the Company or
of the successor  corporation  resulting  from such  consolidation,  transfer or
surviving  such  merger,  if any, to which the holder of the number of shares of
Common Stock deliverable  (immediately prior to the time of such reorganization,
reclassification, consolidation or merger) upon exercise of this Debenture would
have been entitled upon such  reorganization,  reclassification,  consolidation,
transfer or merger.  The  provisions  of this clause  shall  similarly  apply to
successive  reorganizations,  reclassifications,  consolidations,  transfers, or
mergers.

     5.  GOVERNING  LAW.  This  Debenture  shall be governed by and construed in
accordance with the laws of the State of New York,  without giving effect to the
rules governing the conflicts of laws. The parties hereby irrevocably consent to
the jurisdiction of the courts of

                                      -4-
<PAGE>

the  State  of New  York  and of any  federal  court  located  in such  state in
connection  with any action or  proceeding  arising  out of or  relating to this
Debenture.

     6. EVENTS OF DEFAULT. The following shall constitute an "Event of Default":

     (a) The Company  fails to make any payment of principal or interest on this
Debenture as required  pursuant to this  Debenture and same shall continue for a
period of five (5) days; or

     (b) The Company  fails to issue  shares of Common Stock to the Holder or to
cause its Transfer  Agent to issue  shares of Common Stock upon  exercise by the
Holder of the  conversion  rights of the Holder in accordance  with the terms of
this Debenture, fails to transfer or to cause its Transfer Agent to transfer any
certificate  for shares of Common Stock issued to the Holder upon  conversion of
this  Debenture  and when  required  by this  Debenture,  and such  transfer  is
otherwise  lawful,  or fails to remove  any  restrictive  legend or to cause its
Transfer Agent to transfer any  certificate or any shares of Common Stock issued
to the Holder upon  conversion  of this  Debenture as and when  required by this
Debenture  and such legend  removal is  otherwise  lawful,  and any such failure
shall  continue  uncured for thirty (30) business days after written notice from
the Holder of such failure; or

     (c) The  Company  fails to redeem or cause to be redeemed  the  outstanding
portion of this  Debenture as and when required by the  provisions  set forth in
Section 3 and any such failure shall  continue  uncured for twenty (20) business
days after written notice from the Holder of such failure; or

     (d) The Company shall (1) make an  assignment  for the benefit of creditors
or commence proceedings for its dissolution;  or (2) apply for or consent to the
appointment  of a trustee,  liquidator  or receiver for its or for a substantial
part of its property or business; or

     (e) A trustee, liquidator or receiver shall be appointed for the Company or
for a substantial part of its property or business without its consent and shall
not be discharged within sixty (60) days after such appointment; or

     (f) Any governmental  agency or any court of competent  jurisdiction at the
instance of any governmental agency shall assume custody or control of the whole
or any substantial  portion of the properties or assets of the Company and shall
not be dismissed within sixty (60) days thereafter; or

     (g) Bankruptcy,  reorganization,  insolvency or liquidation  proceedings or
other  proceedings for relief under any bankruptcy law or any law for the relief
of debtors  shall be  instituted  by or against the Company  and, if  instituted
against the Company,  shall not be  dismissed  within sixty (60) days after such
institution or the Company shall by any action or answer approve of, consent to,
or acquiesce in any such  proceedings or admit the material  allegations  of, or
default in answering a petition filed in any such proceeding; or

                                      -5-
<PAGE>

     (h) The Company is delisted from the Nasdaq  National  Market or the Nasdaq
SmallCap Market and is not quoted on the over-the-counter (OTC) market.

     Then, or at any time  thereafter  (i.e. the grace periods set forth above),
and in each and every such case,  unless  such Event of Default  shall have been
waived in writing by the Holder of this  Debenture  (which  waiver  shall not be
deemed to be a waiver of any subsequent default) at the option of the Holder and
in the discretion of the Holder, the Holder may

     (A) without notice or demand to the Company  declare all obligations of the
Company to the to be immediately due and payable;

     (B)  perform any  warranty,  covenant  or  agreement  which the Company has
failed to perform under this Agreement; and

     (C) pursue any available remedy to collect the principal of and interest on
this Debenture or to enforce the performance of any provision of this Debenture.

     7.  RESTRICTIONS  ON TRANSFER.  This Debenture shall also be subject to the
restrictions  on  transfer  set forth in Section 4.3 of the  Debenture  Purchase
Agreement.

     8. MISCELLANEOUS.  (a) Except as contemplated in the next sentence, nothing
contained in this Debenture shall be construed as conferring upon the Holder the
right to vote or to receive  dividends  or to  consent  or  receive  notice as a
stockholder in respect of any meeting of stockholders  or any rights  whatsoever
as a  stockholder  of  the  Company,  unless  and  to the  extent  converted  in
accordance  with the terms  hereof.  In the event the Company shall fix a record
date for the making of a distribution to holders of its Common Stock  (including
any such distribution made in connection with a consolidation or merger in which
the Company is the continuing  corporation),  of (i) assets (other than (A) cash
dividends or cash distributions or (B) dividends payable in Common Stock),  (ii)
evidences of indebtedness or other  securities  (except for Common Stock) of the
Company or of any entity other than the Company,  or (iii) subscription  rights,
options or warrants  to  purchase  any of the  foregoing  assets or  securities,
whether or not such rights, options or warrants are immediately exercisable (all
such distributions  referred to in clauses (i), (ii) and (iii) being hereinafter
collectively referred to as "Distributions on Common Stock"),  then, in any such
case,  the Company shall set aside,  in an escrow  reasonably  acceptable to the
Holder of this Debenture,  the Distributions on Common Stock to which the Holder
would have been entitled if the Holder had converted  this  Debenture for Common
Stock,  immediately  prior to the record  date for the  purpose  of  determining
stockholders entitled to receive such Distributions on Common Stock and any such
Distributions  on Common Stock (together with any earnings while escrowed) shall
thereafter  be  distributed  from time to time out of such  escrow to the Holder
upon  conversion of this Debenture or within five (5) business days  thereafter.
Upon the  payment  of this  Debenture  in cash on the  Maturity  Date,  any such
Distributions  on Common Stock set aside in escrow pursuant to this Section 8(a)
relating to this  Debenture or the portion  thereof being paid shall be released
and returned to the Company.

     (b) No  recourse  shall be had for the  payment  of the  principal  of this
Debenture,  or for

                                      -6-
<PAGE>

any  claim  based  hereon,   or  otherwise  in  respect   hereof,   against  any
incorporator,  stockholder or employee, as such, past, present or future, of the
Company or any successor Company, whether by virtue of any constitution, statute
or rule of law, or by the enforcement of any assessment or penalty or otherwise,
all  such  liability  being,  by  the  acceptance  hereof  and  as  part  of the
consideration for the issue hereof, expressly waived and released.

     (c) All payments  contemplated hereby to be made "in cash" shall be made in
immediately  available  good funds in such coin or currency of the United States
of America as at the time of payment is legal  tender for  payment of public and
private debts.  All payments of cash and each delivery of shares of Common Stock
issuable to the Holder as contemplated hereby shall be made to the Holder at the
address last appearing on this  Debenture or as otherwise  designated in writing
by the Holder from time to time; except that the Holder can designate, by notice
to the  Company,  a  different  delivery  address  for any one or more  specific
payments or deliveries.

     (e) Upon receipt by the Company of evidence of the loss, theft, destruction
or mutilation of this Debenture, and (in the case of loss, theft or destruction)
of  indemnity  or security  reasonably  satisfactory  to the  Company,  and upon
surrender and  cancellation of this Debenture,  if mutilated,  the Company shall
execute and deliver to the Holder a new  debenture  identical in all respects to
this Debenture.

     (f) No delay on the part of any party in  exercising  any  right,  power or
privilege  hereunder shall operate as a waiver thereof,  nor shall any waiver on
the part of any party of any right,  power or privilege  hereunder  preclude any
other or further exercise  thereof or the exercise of any other right,  power or
privilege hereunder.

     (g) All the  covenants,  stipulations,  promises  and  agreements  by or on
behalf of the Company  contained  in this  Debenture  shall be binding  upon the
Company's successors and assigns whether or not so expressed.

     (h) If any  provision  of this  Debenture  is found by a court of competent
jurisdiction to be invalid,  illegal or  unenforceable,  all other provisions of
this Debenture shall remain in effect,  and if any provision is in applicable to
any person or circumstances, such provision shall nevertheless remain applicable
to all other persons and circumstances.

     (i) The headings used in this  Debenture are for  convenience  of reference
only and do not define or limit the provisions hereof.

     (j) All notices,  requests and other  communications  hereunder  must be in
writing and will be deemed to have been duly given only if delivered  personally
against written receipt or by facsimile  transmission or mailed by prepaid first
class  certified  mail,  return  receipt  requested,  or  mailed  by  nationally
recognized  overnight courier prepaid, to the parties at the following addresses
or facsimile numbers:

                                      -7-
<PAGE>

                           If to the Registered Holder, to:

                           [Aventis Pharmaceuticals Inc.]
                           200 Crossing Boulevard
                           P.O. Box 6890
                           Bridgewater, NJ 08807-0890
                           Facsimile No.:
                           Attn:  [______________]

                           with a copy to:

                           Morgan, Lewis & Bockius LLP
                           101 Park Avenue
                           New York, NY  10178
                           Facsimile No.:  (212) 309-6273
                           Attn:  Randy Sunberg, Esq.

                           If to the Company, to:

                           Aphton Corporation
                           80 SW Eighth Street
                           Miami, FL  33130
                           Facsimile No.:
                           Attn:

                           with a copy to:

                           White & Case LLP
                           1155 Avenue of the Americas
                           New York, NY  10036
                           Facsimile No.:  (212) 354-8113
                           Attn:  Jonathan E. Kahn, Esq.

     All such notices,  requests and other  communications will (i) if delivered
personally  to the  address as provided in this  Section,  be deemed  given upon
delivery, (ii) if delivered by facsimile transmission to the facsimile number as
provided in this Section,  be deemed given upon  receipt,  (iii) if delivered by
mail in the manner  described  above to the address as provided in this Section,
be deemed given upon the earlier of the third business day following  mailing or
upon receipt and (iv) if delivered by nationally recognized overnight courier to
the address as provided in this  Section,  be deemed given on the earlier of the
first  business day  following the date sent by such  overnight  courier or upon
receipt  (in each case  regardless  of  whether  such  notice,  request or other
communication  is received by any other  person to whom a copy of such notice is
to be  delivered  pursuant  to this  Section).  Any party  from time to time may
change its address,  facsimile  number

                                      -8-
<PAGE>

or other  information  for the purpose of notices to that party by giving notice
specifying such change to the other party hereto.

     (k) All shares of Common Stock which are issuable  upon  conversion of this
Debenture  shall,  when  issued,  be duly and  validly  issued,  fully  paid and
nonassessable.  The Company  shall take all such  actions as may be necessary to
ensure that all such shares of Common Stock may be so issued  without  violation
of any  applicable law or  governmental  regulation or any  requirements  of any
domestic  securities  exchange or  quotation  system upon which shares of Common
Stock may be listed  (except  for  official  notice of  issuance  which shall be
immediately delivered by the Company upon each such issuance).

     (l) The  Company  shall  within  twelve  months  from the Issue Date hold a
meeting of its shareholders at which it shall seek shareholder  approval for the
issuance of the Common Stock issuable upon conversion of this Debenture.

                                      -9-
<PAGE>

     IN WITNESS  WHEREOF,  the  Company has caused  this  instrument  to be duly
executed by AN officer thereunto duly authorized.

Dated:  December ____, 2002

                                            APHTON CORPORATION

                                        By:  /s/ Philip C. Gevas
                                           -------------------------------------
                                            Name:  Philip C. Gevas
                                            Title:  Chief Executive Officer

ACKNOWLEDGED AND AGREED

By:  Aventis Pharmaceuticals Inc.

By:  /s/ Michael A. Yeomans
   --------------------------------
    Name:  Michael Yeomans
    Title:  President, Global
            Business Development
<PAGE>

                                                                       EXHIBIT A

                              NOTICE OF CONVERSION

   (To be Executed by the Registered Holder in order to Convert the Debenture)

     The undersigned hereby irrevocably elects to convert [$ ________________ of
the above Debenture No. ___] [the remaining principal amount,  together with all
accrued and unpaid interest thereon of the above Debenture No. ___,] into shares
of  Common  Stock  of  APHTON  CORPORATION  (the  "Company")  according  to  the
conditions hereof, as of the date written below.

Conversion Date*: _______________________

Applicable Conversion Price: _________________

Signature: _____________________
           [Name]

Address: _____________________

         _____________________

* This original Debenture must be received by the Company or its transfer agent
by the fifth business date following the Conversion Date.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00049-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00049-of-00352.parquet"}]]