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Unassociated Document

    

      EXHIBIT
        C   

       

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

      

      COMMON
        STOCK PURCHASE WARRANT

      

      To
        Purchase __________ Shares of Common Stock of

       

      LEV
        PHARMACEUTICALS, INC.

       

      THIS
        COMMON STOCK PURCHASE WARRANT (the “Warrant”)
        certifies that, for value received, _____________ (the “Holder”),
        is
        entitled, upon the terms and subject to the limitations on exercise and the
        conditions hereinafter set forth, at any time on or after [the date hereof
        (the
“Initial
        Exercise Date”)
        and on
        or prior to the close of business on the [_____ anniversary of the Initial
        Exercise Date (the “Termination
        Date”)
        but
        not thereafter, to subscribe for and purchase from LEV PHARMACEUTICALS, INC.,
        a
        Delaware corporation (the “Company”),
        up to
        ______ shares (the “Warrant
        Shares”)
        of
        Common Stock, par value $[_________ per share, of the Company (the “Common
        Stock”).
        The
        purchase price of one share of Common Stock under this Warrant shall be equal
        to
        the Exercise Price, as defined in Section 2(b). 

       

      Section
        1.    Definitions.
        Capitalized terms used and not otherwise defined herein shall have the meanings
        set forth in that certain Securities Purchase Agreement (the “Purchase
        Agreement”),
        dated
        October __, 2006, among the Company and the purchasers signatory
        thereto.

       

      Section
        2.    Exercise.

       

      a)  Exercise
        of Warrant.
        Exercise of the purchase rights represented by this Warrant may be made,
        in
        whole or in part, at any time or times on or after the Initial Exercise Date
        and
        on or before the Termination Date by delivery to the Company of a duly executed
        facsimile copy of the Notice of Exercise Form annexed hereto (or such other
        office or agency of the Company as it may designate by notice in writing
        to the
        registered Holder at the address of such Holder appearing on the books of
        the
        Company); and, within 3 Trading Days of the date said Notice of Exercise
        is
        delivered to the Company, the Company shall have received payment of the
        aggregate Exercise Price of the shares thereby purchased by wire transfer
        or
        cashier’s check drawn on a United States bank. Notwithstanding anything herein
        to the contrary, the Holder shall not be required to physically surrender
        this
        Warrant to the Company until the Holder has purchased all of the Warrant
        Shares
        available hereunder and the Warrant has been exercised in full, in which
        case,
        the Holder shall surrender this Warrant to the Company for cancellation within
        3
        Trading Days of the date the final Notice of Exercise is delivered to the
        Company. Partial exercises of this Warrant resulting in purchases of a portion
        of the total number of Warrant Shares available hereunder shall have the
        effect
        of lowering the outstanding number of Warrant Shares purchasable hereunder
        in an
        amount equal to the applicable number of Warrant Shares purchased. The Holder
        and the Company shall maintain records showing the number of Warrant Shares
        purchased and the date of such purchases. The Company shall deliver any
        objection to any Notice of Exercise Form within 2 Business Days of receipt
        of
        such notice. In the event of any dispute or discrepancy, the records of the
        Holder shall be controlling and determinative in the absence of manifest
        error.
        The Holder and any assignee, by acceptance of this Warrant, acknowledge and
        agree that, by reason of the provisions of this paragraph, following the
        purchase of a portion of the Warrant Shares hereunder, the number of Warrant
        Shares available for purchase hereunder at any given time may be less than
        the
        amount stated on the face hereof.

       

      
        
          
          

        

        
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      b)  Exercise
        Price.
        The
        exercise price per share of the Common Stock under this Warrant shall be
        $__,
        subject to adjustment hereunder (the “Exercise
        Price”).

       

      c)  Cashless
        Exercise.
        If at
        any time after one year from the date of issuance of this Warrant there is
        no
        effective Registration Statement registering, or no current prospectus available
        for, the resale of the Warrant Shares by the Holder, then this Warrant may
        also
        be exercised at such time by means of a “cashless exercise” in which the Holder
        shall be entitled to receive a certificate for the number of Warrant Shares
        equal to the quotient obtained by dividing [(A-B) (X)] by (A),
        where:

       

      (A)
        = the
        VWAP on the Trading Day immediately preceding the date of such
        election;

      

      (B)
        = the
        Exercise Price of this Warrant, as adjusted; and 

      

      (X)
        = the
        number of Warrant Shares issuable upon exercise of this Warrant in accordance
        with the terms of this Warrant by means of a cash exercise rather than a
        cashless exercise.

       

      
        
          
          

        

        
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      d)  Exercise
        Limitations.
        

       

      	i.  	
              Holder’s
                Restrictions.
                The Company shall not effect any exercise of this Warrant, and a
                Holder
                shall not have the right to exercise any portion of this Warrant,
                pursuant
                to Section 2(c) or otherwise, to the extent that after giving effect
                to
                such issuance after exercise as set forth on the applicable Notice
                of
                Exercise, such Holder (together with such Holder’s Affiliates, and any
                other person or entity acting as a group together with such Holder
                or any
                of such Holder’s Affiliates), as set forth on the applicable Notice of
                Exercise, would beneficially own in excess of the Beneficial Ownership
                Limitation (as defined below).  For purposes of the foregoing
                sentence, the number of shares of Common Stock beneficially owned
                by such
                Holder and its Affiliates shall include the number of shares of Common
                Stock issuable upon exercise of this Warrant with respect to which
                such
                determination is being made, but shall exclude the number of shares
                of
                Common Stock which would be issuable upon (A) exercise of the remaining,
                nonexercised portion of this Warrant beneficially owned by such Holder
                or
                any of its Affiliates and (B) exercise or conversion of the unexercised
                or
                nonconverted portion of any other securities of the Company (including,
                without limitation, any other [Preferred Stock or Warrants) subject
                to a
                limitation on conversion or exercise analogous to the limitation
                contained
                herein beneficially owned by such Holder or any of its affiliates. 
                Except as set forth in the preceding sentence, for purposes of this
                Section 2(d)(i), beneficial ownership shall be calculated in accordance
                with Section 13(d) of the Exchange Act and the rules and regulations
                promulgated thereunder, it being acknowledged by a Holder that the
                Company
                is not representing to such Holder that such calculation is in compliance
                with Section 13(d) of the Exchange Act and such Holder is solely
                responsible for any schedules required to be filed in accordance
                therewith. To the extent that the limitation contained in this Section
                2(d) applies, the determination of whether this Warrant is exercisable
                (in
                relation to other securities owned by such Holder together with any
                Affiliates) and of which a portion of this Warrant is exercisable
                shall be
                in the sole discretion of a Holder, and the submission of a Notice
                of
                Exercise shall be deemed to be each Holder’s determination of whether this
                Warrant is exercisable (in relation to other securities owned by
                such
                Holder together with any Affiliates) and of which portion of this
                Warrant
                is exercisable, in each case subject to such aggregate percentage
                limitation, and the Company shall have no obligation to verify or
                confirm
                the accuracy of such determination. In addition, a determination
                as to any
                group status as contemplated above shall be determined in accordance
                with
                Section 13(d) of the Exchange Act and the rules and regulations
                promulgated thereunder. For purposes of this Section 2(d), in determining
                the number of outstanding shares of Common Stock, a Holder may rely
                on the
                number of outstanding shares of Common Stock as reflected in (x)
                the
                Company’s most recent Form 10-QSB or Form 10-KSB, as the case may be, (y)
                a more recent public announcement by the Company or (z) any other
                notice
                by the Company or the Company’s Transfer Agent setting forth the number of
                shares of Common Stock outstanding.  Upon the written or oral request
                of a Holder, the Company shall within two Trading Days confirm orally
                and
                in writing to such Holder the number of shares of Common Stock then
                outstanding.  In any case, the number of outstanding shares of Common
                Stock shall be determined after giving effect to the conversion or
                exercise of securities of the Company, including this Warrant, by
                such
                Holder or its Affiliates since the date as of which such number of
                outstanding shares of Common Stock was reported. The “Beneficial Ownership
                Limitation” shall be 4.99% of the number of shares of the Common Stock
                outstanding immediately after giving effect to the issuance of shares
                of
                Common Stock issuable upon exercise of this Warrant. The Beneficial
                Ownership Limitation provisions of this Section 2(d)(i) may be waived
                by
                such Holder, at the election of such Holder, upon not less than 61
                days’
                prior notice to the Company to change the Beneficial Ownership Limitation
                to 9.99% of the number of shares of the Common Stock outstanding
                immediately after giving effect to the issuance of shares of Common
                Stock
                upon exercise of this Warrant, and the provisions of this Section
                2(d)
                shall continue to apply. Upon such a change by a Holder of the Beneficial
                Ownership Limitation from such 4.99% limitation to such 9.99% limitation,
                the Beneficial Ownership Limitation may not be further waived by
                such
                Holder. The provisions of this paragraph shall be construed and
                implemented in a manner otherwise than in strict conformity with
                the terms
                of this Section 2(d)(i) to correct this paragraph (or any portion
                hereof)
                which may be defective or inconsistent with the intended Beneficial
                Ownership Limitation herein contained or to make changes or supplements
                necessary or desirable to properly give effect to such limitation.
                The
                limitations contained in this paragraph shall apply to a successor
                holder
                of this Warrant.

            

       

      
        
          
          

        

        
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      e)  Mechanics
        of Exercise.
        

       

      i.  Authorization
        of Warrant Shares.
        The
        Company covenants that all Warrant Shares which may be issued upon the exercise
        of the purchase rights represented by this Warrant will, upon exercise of
        the
        purchase rights represented by this Warrant, be duly authorized, validly
        issued,
        fully paid and nonassessable and free from all taxes, liens and charges created
        by the Company in respect of the issue thereof (other than taxes in respect
        of
        any transfer occurring contemporaneously with such issue). 

       

      ii.  Delivery
        of Certificates Upon Exercise.
        Certificates for shares purchased hereunder shall be transmitted by the transfer
        agent of the Company to the Holder by crediting the account of the Holder’s
        prime broker with the Depository Trust Company through its Deposit Withdrawal
        Agent Commission (“DWAC”)
        system
        if the Company is a participant in such system, and otherwise by physical
        delivery to the address specified by the Holder in the Notice of Exercise
        within
        3 Trading Days from the delivery to the Company of the Notice of Exercise
        Form,
        surrender of this Warrant (if required) and payment of the aggregate Exercise
        Price as set forth above (“Warrant
        Share Delivery Date”).
        This
        Warrant shall be deemed to have been exercised on the date the Exercise Price
        is
        received by the Company. The Warrant Shares shall be deemed to have been
        issued,
        and Holder or any other person so designated to be named therein shall be
        deemed
        to have become a holder of record of such shares for all purposes, as of
        the
        date the Warrant has been exercised by payment to the Company of the Exercise
        Price (or by cashless exercise, if permitted) and all taxes required to be
        paid
        by the Holder, if any, pursuant to Section 2(e)(vii) prior to the issuance
        of
        such shares, have been paid. 

       

      iii.  Delivery
        of New Warrants Upon Exercise.
        If this
        Warrant shall have been exercised in part, the Company shall, at the request
        of
        a Holder and upon surrender of this Warrant certificate, at the time of delivery
        of the certificate or certificates representing Warrant Shares, deliver to
        Holder a new Warrant evidencing the rights of Holder to purchase the unpurchased
        Warrant Shares called for by this Warrant, which new Warrant shall in all
        other
        respects be identical with this Warrant.

       

      iv.  Rescission
        Rights.
        If the
        Company fails to cause its transfer agent to transmit to the Holder a
        certificate or certificates representing the Warrant Shares pursuant to this
        Section 2(e) by the Warrant Share Delivery Date, then the Holder will have
        the
        right to rescind such exercise.

       

      
        
          
          

        

        
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      v.  Compensation
        for Buy-In on Failure to Timely Deliver Certificates Upon
        Exercise.
        In
        addition to any other rights available to the Holder, if the Company fails
        to
        cause its transfer agent to transmit to the Holder a certificate or certificates
        representing the Warrant Shares pursuant to an exercise on or before the
        Warrant
        Share Delivery Date, and if after such date the Holder is required by its
        broker
        to purchase (in an open market transaction or otherwise) shares of Common
        Stock
        to deliver in satisfaction of a sale by the Holder of the Warrant Shares
        which
        the Holder anticipated receiving upon such exercise (a “Buy-In”),
        then
        the Company shall (1) pay in cash to the Holder the amount by which (x) the
        Holder’s total purchase price (including brokerage commissions, if any) for the
        shares of Common Stock so purchased exceeds (y) the amount obtained by
        multiplying (A) the number of Warrant Shares that the Company was required
        to
        deliver to the Holder in connection with the exercise at issue times (B)
        the
        price at which the sell order giving rise to such purchase obligation was
        executed, and (2) at the option of the Holder, either reinstate the portion
        of
        the Warrant and equivalent number of Warrant Shares for which such exercise
        was
        not honored or deliver to the Holder the number of shares of Common Stock
        that
        would have been issued had the Company timely complied with its exercise
        and
        delivery obligations hereunder. For example, if the Holder purchases Common
        Stock having a total purchase price of $11,000 to cover a Buy-In with respect
        to
        an attempted exercise of shares of Common Stock with an aggregate sale price
        giving rise to such purchase obligation of $10,000, under clause (1) of the
        immediately preceding sentence the Company shall be required to pay the Holder
        $1,000. The Holder shall provide the Company written notice indicating the
        amounts payable to the Holder in respect of the Buy-In and, upon request
        of the
        Company, evidence of the amount of such loss. Nothing herein shall limit
        a
        Holder’s right to pursue any other remedies available to it hereunder, at law or
        in equity including, without limitation, a decree of specific performance
        and/or
        injunctive relief with respect to the Company’s failure to timely deliver
        certificates representing shares of Common Stock upon exercise of the Warrant
        as
        required pursuant to the terms hereof.

       

      vi.  No
        Fractional Shares or Scrip.
        No
        fractional shares or scrip representing fractional shares shall be issued
        upon
        the exercise of this Warrant. As to any fraction of a share which Holder
        would
        otherwise be entitled to purchase upon such exercise, the Company shall at
        its
        election, either pay a cash adjustment in respect of such final fraction
        in an
        amount equal to such fraction multiplied by the Exercise Price or round up
        to
        the next whole share.

       

      vii.  Charges,
        Taxes and Expenses.
        Issuance of certificates for Warrant Shares shall be made without charge
        to the
        Holder for any issue or transfer tax or other incidental expense in respect
        of
        the issuance of such certificate, all of which taxes and expenses shall be
        paid
        by the Company, and such certificates shall be issued in the name of the
        Holder
        or in such name or names as may be directed by the Holder; provided,
        however,
        that in
        the event certificates for Warrant Shares are to be issued in a name other
        than
        the name of the Holder, this Warrant when surrendered for exercise shall
        be
        accompanied by the Assignment Form attached hereto duly executed by the Holder;
        and the Company may require, as a condition thereto, the payment of a sum
        sufficient to reimburse it for any transfer tax incidental thereto.

       

      
        
          
          

        

        
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      viii.  Closing
        of Books.
        The
        Company will not close its stockholder books or records in any manner which
        prevents the timely exercise of this Warrant, pursuant to the terms
        hereof.

       

      Section
        3.    Certain Adjustments.

       

      a)  Stock
        Dividends and Splits.
        If the
        Company, at any time while this Warrant is outstanding: (A) pays a stock
        dividend or otherwise make a distribution or distributions on shares of its
        Common Stock or any other equity or equity equivalent securities payable
        in
        shares of Common Stock (which, for avoidance of doubt, shall not include
        any
        shares of Common Stock issued by the Company upon exercise of this Warrant),
        (B)
        subdivides outstanding shares of Common Stock into a larger number of shares,
        (C) combines (including by way of reverse stock split) outstanding shares
        of
        Common Stock into a smaller number of shares, or (D) issues by reclassification
        of shares of the Common Stock any shares of capital stock of the Company,
        then
        in each case the Exercise Price shall be multiplied by a fraction of which
        the
        numerator shall be the number of shares of Common Stock (excluding treasury
        shares, if any) outstanding immediately before such event and of which the
        denominator shall be the number of shares of Common Stock outstanding
        immediately after such event and the number of shares issuable upon exercise
        of
        this Warrant shall be proportionately adjusted. Any adjustment made pursuant
        to
        this Section 3(a) shall become effective immediately after the record date
        for
        the determination of stockholders entitled to receive such dividend or
        distribution and shall become effective immediately after the effective date
        in
        the case of a subdivision, combination or re-classification.

       

      b)  Intentionally
        Omitted.

       

      c)  Subsequent
        Rights Offerings.
        If the
        Company, at any time while the Warrant is outstanding, shall issue rights,
        options or warrants to all holders of Common Stock (and not to Holders)
        entitling them to subscribe for or purchase shares of Common Stock at a price
        per share less than the VWAP at the record date mentioned below, then the
        Exercise Price shall be multiplied by a fraction, of which the denominator
        shall
        be the number of shares of the Common Stock outstanding on the date of issuance
        of such rights or warrants plus the number of additional shares of Common
        Stock
        offered for subscription or purchase, and of which the numerator shall be
        the
        number of shares of the Common Stock outstanding on the date of issuance
        of such
        rights or warrants plus the number of shares which the aggregate offering
        price
        of the total number of shares so offered (assuming receipt by the Company
        in
        full of all consideration payable upon exercise of such rights, options or
        warrants) would purchase at such VWAP. Such adjustment shall be made whenever
        such rights or warrants are issued, and shall become effective immediately
        after
        the record date for the determination of stockholders entitled to receive
        such
        rights, options or warrants. Notwithstanding the foregoing, no adjustments
        shall
        be made, paid or issued under this Section 3(c) in respect of an Exempt
        Issuance.

       

      
        
          
          

        

        
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      d)  Pro
        Rata Distributions.
        If the
        Company, at any time prior to the Termination Date, shall distribute to all
        holders of Common Stock (and not to Holders of the Warrants) evidences of
        its
        indebtedness or assets (including cash and cash dividends) or rights or warrants
        to subscribe for or purchase any security other than the Common Stock (which
        shall be subject to Section 3(b)) (collectively, “Distributed
        Property”),
        then,
        upon any exercise of this Warrant that occurs after the record date fixed
        for
        determination of stockholders entitled to receive such distribution, the
        Holder
        shall be entitled to receive, in addition to the Warrant Shares otherwise
        issuable upon such exercise (if applicable), the Distributed Property that
        such
        Holder would have been entitled to receive in respect of such number of Warrant
        Shares had the Holder been the record holder of such Warrant Shares immediately
        prior to such record date.   

       

      e)  Fundamental
        Transaction.
        If, at
        any time while this Warrant is outstanding, (A) the Company effects any merger
        or consolidation of the Company with or into another Person, (B) the Company
        effects any sale of all or substantially all of its assets in one or a series
        of
        related transactions, (C) any tender offer or exchange offer (whether by
        the
        Company or another Person) is completed pursuant to which holders of Common
        Stock are permitted to tender or exchange their shares for other securities,
        cash or property, or (D) the Company effects any reclassification of the
        Common
        Stock or any compulsory share exchange pursuant to which the Common Stock
        is
        effectively converted into or exchanged for other securities, cash or property
        (in any such case, a “Fundamental
        Transaction”),
        then,
        upon any subsequent exercise of this Warrant, the Holder shall have the right
        to
        receive, for each Warrant Share that would have been issuable upon such exercise
        immediately prior to the occurrence of such Fundamental Transaction, upon
        exercise of this Warrant, the number of shares of Common Stock of the successor
        or acquiring corporation or of the Company, if it is the surviving corporation,
        and any additional consideration (the “Alternate
        Consideration”)
        receivable upon or as a result of such reorganization, reclassification,
        merger,
        consolidation or disposition of assets by a Holder of the number of shares
        of
        Common Stock for which this Warrant is exercisable immediately prior to such
        event. For purposes of any such exercise, the determination of the Exercise
        Price shall be appropriately adjusted to apply to such Alternate Consideration
        based on the amount of Alternate Consideration issuable in respect of one
        share
        of Common Stock in such Fundamental Transaction, and the Company shall apportion
        the Exercise Price among the Alternate Consideration in a reasonable manner
        reflecting the relative value of any different components of the Alternate
        Consideration. If holders of Common Stock are given any choice as to the
        securities, cash or property to be received in a Fundamental Transaction,
        then
        the Holder shall be given the same choice as to the Alternate Consideration
        it
        receives upon any exercise of this Warrant following such Fundamental
        Transaction. To the extent necessary to effectuate the foregoing provisions,
        any
        successor to the Company or surviving entity in such Fundamental Transaction
        shall issue to the Holder a new warrant consistent with the foregoing provisions
        and evidencing the Holder’s right to exercise such warrant into Alternate
        Consideration. The terms of any agreement pursuant to which a Fundamental
        Transaction is effected shall include terms requiring any such successor
        or
        surviving entity to comply with the provisions of this Section 3(e) and insuring
        that this Warrant (or any such replacement security) will be similarly adjusted
        upon any subsequent transaction analogous to a Fundamental
        Transaction.

       

      
        
          
          

        

        
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      f)  Calculations.
        All
        calculations under this Section 3 shall be made to the nearest cent or the
        nearest 1/100th of a share, as the case may be. For purposes of this Section
        3,
        the number of shares of Common Stock deemed to be issued and outstanding
        as of a
        given date shall be the sum of the number of shares of Common Stock (excluding
        treasury shares, if any) issued and outstanding.

       

      g)  Voluntary
        Adjustment By Company.
        The
        Company may at any time during the term of this Warrant reduce the then current
        Exercise Price to any amount and for any period of time deemed appropriate
        by
        the Board of Directors of the Company.

       

      h)  Notice
        to Holders.
        

       

      i.  Adjustment
        to Exercise Price.
        Whenever the Exercise Price is adjusted pursuant to any provision of this
        Section 3, the Company shall promptly mail to each Holder a notice setting
        forth
        the Exercise Price after such adjustment and setting forth a brief statement
        of
        the facts requiring such adjustment. 

       

      ii.  Notice
        to Allow Exercise by Holder.
        If (A)
        the Company shall declare a dividend (or any other distribution in whatever
        form) on the Common Stock; (B) the Company shall declare a special nonrecurring
        cash dividend on or a redemption of the Common Stock; (C) the Company shall
        authorize the granting to all holders of the Common Stock rights or warrants
        to
        subscribe for or purchase any shares of capital stock of any class or of
        any
        rights; (D) the approval of any stockholders of the Company shall be required
        in
        connection with any reclassification of the Common Stock, any consolidation
        or
        merger to which the Company is a party, any sale or transfer of all or
        substantially all of the assets of the Company, of any compulsory share exchange
        whereby the Common Stock is converted into other securities, cash or property;
        (E) the Company shall authorize the voluntary or involuntary dissolution,
        liquidation or winding up of the affairs of the Company; then, in each case,
        the
        Company shall cause to be mailed to the Holder at its last address as it
        shall
        appear upon the Warrant Register of the Company, at least 20 calendar days
        prior
        to the applicable record or effective date hereinafter specified, a notice
        stating (x) the date on which a record is to be taken for the purpose of
        such
        dividend, distribution, redemption, rights or warrants, or if a record is
        not to
        be taken, the date as of which the holders of the Common Stock of record
        to be
        entitled to such dividend, distributions, redemption, rights or warrants
        are to
        be determined or (y) the date on which such reclassification, consolidation,
        merger, sale, transfer or share exchange is expected to become effective
        or
        close, and the date as of which it is expected that holders of the Common
        Stock
        of record shall be entitled to exchange their shares of the Common Stock
        for
        securities, cash or other property deliverable upon such reclassification,
        consolidation, merger, sale, transfer or share exchange; provided that the
        failure to mail such notice or any defect therein or in the mailing thereof
        shall not affect the validity of the corporate action required to be specified
        in such notice. The Holder is entitled to exercise this Warrant during the
        20-day period commencing on the date of such notice to the effective date
        of the
        event triggering such notice.

       

      
        
          
          

        

        
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      Section
        4.    Transfer
        of Warrant.

       

      a)  Transferability.
        Subject
        to compliance with any applicable securities laws and the conditions set
        forth
        in Section 4(d) hereof and to the provisions of Section 4.1 of the Purchase
        Agreement, this Warrant and all rights hereunder (including, without limitation,
        any registration rights) are transferable, in whole or in part, upon surrender
        of this Warrant at the principal office of the Company or its designated
        agent,
        together with a written assignment of this Warrant substantially in the form
        attached hereto duly executed by the Holder or its agent or attorney and
        funds
        sufficient to pay any transfer taxes payable upon the making of such transfer.
        Upon such surrender and, if required, such payment, the Company shall execute
        and deliver a new Warrant or Warrants in the name of the assignee or assignees
        and in the denomination or denominations specified in such instrument of
        assignment, and shall issue to the assignor a new Warrant evidencing the
        portion
        of this Warrant not so assigned, and this Warrant shall promptly be cancelled.
        A
        Warrant, if properly assigned, may be exercised by a new holder for the purchase
        of Warrant Shares without having a new Warrant issued. 

       

      b)  New
        Warrants.
        This
        Warrant may be divided or combined with other Warrants upon presentation
        hereof
        at the aforesaid office of the Company, together with a written notice
        specifying the names and denominations in which new Warrants are to be issued,
        signed by the Holder or its agent or attorney. Subject to compliance with
        Section 4(a), as to any transfer which may be involved in such division or
        combination, the Company shall execute and deliver a new Warrant or Warrants
        in
        exchange for the Warrant or Warrants to be divided or combined in accordance
        with such notice.

       

      c)  Warrant
        Register.
        The
        Company shall register this Warrant, upon records to be maintained by the
        Company for that purpose (the “Warrant
        Register”),
        in
        the name of the record Holder hereof from time to time. The Company may deem
        and
        treat the registered Holder of this Warrant as the absolute owner hereof
        for the
        purpose of any exercise hereof or any distribution to the Holder, and for
        all
        other purposes, absent actual notice to the contrary.

       

      d)  Transfer
        Restrictions.
        If,
        at the
time
        of
        the surrender of this Warrant in connection with any transfer of this Warrant,
        the transfer of this Warrant shall not be registered pursuant to an effective
        registration
        statement under the Securities Act
        and
under
        applicable state securities or blue sky laws, the Company may require, as
        a
        condition of allowing such transfer (i) that the Holder or transferee of
        this
        Warrant, as the case may be, furnish to the Company a written opinion of
        counsel
        (which opinion shall be in form, substance and scope customary for opinions
        of
        counsel in comparable transactions) to the effect that such transfer may
        be made
        without
        registration under
        the
        Securities Act and under applicable state securities or blue sky laws, (ii)
        that
        the holder or transferee execute and deliver to the Company an investment
        letter
        in form and substance acceptable to the Company and (iii) that the transferee
        be
        an “accredited
        investor” as defined in Rule 501(a)(1), (a)(2), (a)(3), (a)(7), or (a)(8)
        promulgated under the Securities Act or a “qualified institutional buyer” as
        defined in Rule 144A(a) under the Securities Act.

       

      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      

       

      Section
        5.    Miscellaneous.

       

      a)  No
        Rights as Shareholder Until Exercise.
        This
        Warrant does not entitle the Holder to any voting rights or other rights
        as a
        shareholder of the Company prior to the exercise hereof as set forth in Section
        2(e)(ii). 

       

      b)  Loss,
        Theft, Destruction or Mutilation of Warrant.
        The
        Company covenants that upon receipt by the Company of evidence reasonably
        satisfactory to it of the loss, theft, destruction or mutilation of this
        Warrant
        or any stock certificate relating to the Warrant Shares, and in case of loss,
        theft or destruction, of indemnity or security reasonably satisfactory to
        it
        (which, in the case of the Warrant, shall not include the posting of any
        bond),
        and upon surrender and cancellation of such Warrant or stock certificate,
        if
        mutilated, the Company will make and deliver a new Warrant or stock certificate
        of like tenor and dated as of such cancellation, in lieu of such Warrant
        or
        stock certificate.

       

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

       

      d)  Authorized
        Shares.
        

       

      The
        Company covenants that during the period the Warrant is outstanding, it will
        reserve from its authorized and unissued Common Stock a sufficient number
        of
        shares to provide for the issuance of the Warrant Shares upon the exercise
        of
        any purchase rights under this Warrant. The Company further covenants that
        its
        issuance of this Warrant shall constitute full authority to its officers
        who are
        charged with the duty of executing stock certificates to execute and issue
        the
        necessary certificates for the Warrant Shares upon the exercise of the purchase
        rights under this Warrant. The Company will take all such reasonable action
        as
        may be necessary to assure that such Warrant Shares may be issued as provided
        herein without violation of any applicable law or regulation, or of any
        requirements of the Trading Market upon which the Common Stock may be listed.
        

       

      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

      

       

      Except
        and to the extent as waived or consented to by the Holder, the Company shall
        not
        by any action, including, without limitation, amending its certificate of
        incorporation or through any reorganization, transfer of assets, consolidation,
        merger, dissolution, issue or sale of securities or any other voluntary action,
        avoid or seek to avoid the observance or performance of any of the terms
        of this
        Warrant, but will at all times in good faith assist in the carrying out of
        all
        such terms and in the taking of all such actions as may be necessary or
        appropriate to protect the rights of Holder as set forth in this Warrant
        against
        impairment. Without limiting the generality of the foregoing, the Company
        will
        (a) not increase the par value of any Warrant Shares above the amount payable
        therefor upon such exercise immediately prior to such increase in par value,
        (b)
        take all such action as may be necessary or appropriate in order that the
        Company may validly and legally issue fully paid and nonassessable Warrant
        Shares upon the exercise of this Warrant, and (c) use commercially reasonable
        efforts to obtain all such authorizations, exemptions or consents from any
        public regulatory body having jurisdiction thereof as may be necessary to
        enable
        the Company to perform its obligations under this Warrant.

       

      Before
        taking any action which would result in an adjustment in the number of Warrant
        Shares for which this Warrant is exercisable or in the Exercise Price, the
        Company shall obtain all such authorizations or exemptions thereof, or consents
        thereto, as may be necessary from any public regulatory body or bodies having
        jurisdiction thereof.

       

      e)  Jurisdiction.
        All
        questions concerning the construction, validity, enforcement and interpretation
        of this Warrant shall be determined in accordance with the provisions of
        the
        Purchase Agreement.

       

      f)  Restrictions.
        The
        Holder acknowledges that the Warrant Shares acquired upon the exercise of
        this
        Warrant, if not registered, will have restrictions upon resale imposed by
        state
        and federal securities laws.

       

      g)  Nonwaiver
        and Expenses.
        No
        course of dealing or any delay or failure to exercise any right hereunder
        on the
        part of Holder shall operate as a waiver of such right or otherwise prejudice
        the Company’s or the Holder’s rights, powers or remedies, notwithstanding the
        fact that all rights hereunder terminate on the Termination Date. If the
        Company
        or a Holder willfully and knowingly fails to comply with any provision of
        this
        Warrant, which results in any material damages to the Holder or Company (as
        the
        case may be), the breaching party shall pay to the other party such amounts
        as
        shall be sufficient to cover any costs and expenses including, but not limited
        to, reasonable attorneys’ fees, including those of appellate proceedings,
        incurred by the non-breaching party in collecting any amounts due pursuant
        hereto or in otherwise enforcing any of its rights, powers or remedies
        hereunder.

       

      h)  Notices.
        Any
        notice, request or other document required or permitted to be given or delivered
        to the Holder by the Company shall be delivered in accordance with the notice
        provisions of the Purchase Agreement.

       

      
        
          
          

        

        
          11

          
            

          

        

        
          
          

        

      

       

      i)  Limitation
        of Liability.
        No
        provision hereof, in the absence of any affirmative action by Holder to exercise
        this Warrant to purchase Warrant Shares, and no enumeration herein of the
        rights
        or privileges of Holder, shall give rise to any liability of Holder for the
        purchase price of any Common Stock or as a stockholder of the Company, whether
        such liability is asserted by the Company or by creditors of the
        Company.

       

      j)  Remedies.
        Holder,
        in addition to being entitled to exercise all rights granted by law, including
        recovery of damages, will be entitled to seek specific performance of its
        rights
        under this Warrant. The Company agrees that monetary damages would not be
        adequate compensation for any loss incurred by reason of a breach by it of
        the
        provisions of this Warrant and hereby agrees to waive and not to assert the
        defense in any action for specific performance that a remedy at law would
        be
        adequate.

       

      k)  Successors
        and Assigns.
        Subject
        to applicable securities laws, this Warrant and the rights and obligations
        evidenced hereby shall inure to the benefit of and be binding upon the
        successors of the Company and the successors and permitted assigns of Holder.
        The provisions of this Warrant are intended to be for the benefit of all
        Holders
        from time to time of this Warrant and shall be enforceable by any such Holder
        or
        holder of Warrant Shares.

       

      l)  Amendment.
        This
        Warrant may be modified or amended or the provisions hereof waived with the
        written consent of the Company and the Holder..

       

      m)  Severability.
        Wherever possible, each provision of this Warrant shall be interpreted in
        such
        manner as to be effective and valid under applicable law, but if any provision
        of this Warrant shall be prohibited by or invalid under applicable law, such
        provision shall be ineffective to the extent of such prohibition or invalidity,
        without invalidating the remainder of such provisions or the remaining
        provisions of this Warrant.

       

      n)  Headings.
        The
        headings used in this Warrant are for the convenience of reference only and
        shall not, for any purpose, be deemed a part of this Warrant.

       

      

      ********************

       

      
        
          
          

        

        
          12

          
            

          

        

        
          
          

        

      

      

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

       

      

      Dated:
        October __, 2006

      
        	 	 	 
	 	
                LEV
                  PHARMACEUTICALS, INC.

              
	 
 	 
 	 
 
	Date: 	By:  	 
	 	
                
Name:
	 	Title:

      

      

      
        
          
          

        

        
          13

          
            

          

        

        
          
          

        

      

       

      NOTICE
        OF EXERCISE

      

      TO: [_______________________

      

      (1)  The
        undersigned hereby elects to purchase ________ Warrant Shares of the Company
        pursuant to the terms of the attached Warrant (only if exercised in full),
        and
        tenders herewith payment of the exercise price in full, together with all
        applicable transfer taxes, if any.

       

      (2)  Payment
        shall take the form of (check applicable box):

       

      [
        ] in
        lawful money of the United States; or

       

      [
        ] [if
        permitted] the cancellation of such number of Warrant Shares as is necessary,
        in
        accordance with the formula set forth in subsection 2(c), to exercise this
        Warrant with respect to the maximum number of Warrant Shares purchasable
        pursuant to the cashless exercise procedure set forth in subsection
        2(c).

       

      (3)  Please
        issue a certificate or certificates representing said Warrant Shares in the
        name
        of the undersigned or in such other name as is specified below:

       

      _______________________________

       

      

      The
        Warrant Shares shall be delivered to the following DWAC Account Number or
        by
        physical delivery of a certificate to:

      

      _______________________________

       

      _______________________________

       

      _______________________________

      

      (4)
        Accredited
        Investor.
        The
        undersigned is an “accredited investor” as defined in Regulation D promulgated
        under the Securities Act of 1933, as amended.

      

      [SIGNATURE
        OF HOLDER]

       

       

      
        	Name
                of Investing Entity:	                             
                
	Signature
                of Authorized Signatory of Investing Entity:
                	                                            
                
	Name
                of Authorized Signatory:	                                             
                
	Title
                of Authorized Signatory: 	                                             
                
	Date:	                                                    
                

      

       

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      ASSIGNMENT
        FORM

      

      (To
        assign the foregoing warrant, execute

      this
        form
        and supply required information. 

      Do
        not
        use this form to exercise the warrant.)

      

      

      

      FOR
        VALUE
        RECEIVED, [____] all of or [_______] shares of the foregoing Warrant and
        all
        rights evidenced thereby are hereby assigned to

       

      

      _______________________________________________
        whose address is

      

      _______________________________________________________________.

       

      
 

      _______________________________________________________________

       

      
        	 	 	Dated: ______________, _______	 

      

      

      
        	 	Holder’s
                Signature:	                                   
                	 
	 	Holder’s
                Address:	                             
                	 
	 	 	                                      
                	 

      

      
 

      Signature
        Guaranteed: ___________________________________________

      

      

      NOTE:
        The
        signature to this Assignment Form must correspond with the name as it appears
        on
        the face of the Warrant, without alteration or enlargement or any change
        whatsoever, and must be guaranteed by a bank or trust company. Officers of
        corporations and those acting in a fiduciary or other representative capacity
        should file proper evidence of authority to assign the foregoing
        Warrant.SECURITIES
      PURCHASE AGREEMENT

     

    This
      Securities Purchase Agreement (this “Agreement”)
      is
      dated as of October 16, 2006, among Lev Pharmaceuticals, Inc., a Delaware
      corporation (the “Company”),
      and
      each purchaser identified on the signature pages hereto (each, including its
      successors and assigns, a “Purchaser”
and
      collectively the “Purchasers”).

     

    WHEREAS,
      subject to the terms and conditions set forth in this Agreement and pursuant
      to
      Section 4(2) of the Securities Act of 1933, as amended (the “Securities Act”)
      and Rule 506 promulgated thereunder, the Company desires to issue and sell
      to
      each Purchaser, and each Purchaser, severally and not jointly, desires to
      purchase from the Company, securities of the Company as more fully described
      in
      this Agreement.

     

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

     

    ARTICLE
      I.

    DEFINITIONS

     

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

     

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

     

    “Affiliate”
means
      any Person that, directly or indirectly through one or more intermediaries,
      controls or is controlled by or is under common control with a Person as such
      terms are used in and construed under Rule 144 under the Securities Act. With
      respect to a Purchaser, any investment fund or managed account that is managed
      on a discretionary basis by the same investment manager as such Purchaser will
      be deemed to be an Affiliate of such Purchaser.

     

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

     

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

     

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

     

    “Commission”
means
      the Securities and Exchange Commission.

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

    “Common
      Stock”
means
      the common stock of the Company, par value $0.01 per share, and any other class
      of securities into which such securities may hereafter be reclassified or
      changed into. 

     

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

     

    “Company
      Counsel”
means
      Goldstein & DiGioia, LLP.

     

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

     

    “Effective
      Date”
means
      the date that the initial Registration Statement filed by the Company pursuant
      to the Registration Rights Agreement is first declared effective by the
      Commission.

     

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

     

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

    

    “Exempt
      Issuance”
means
      the issuance of (a) shares of Common Stock or options to employees, officers
      or
      directors of the Company pursuant to any stock or option plan duly adopted
      by a
      majority of the non-employee members of the Board of Directors of the Company
      or
      a majority of the members of a committee of non-employee directors established
      for such purpose (for purposes of clarity, the issuance of shares of Common
      Stock upon exercise of options granted pursuant to a Company plan subsequent
      to
      the date hereof shall also be an Exempt Issuance), (b) securities upon the
      exercise or exchange of or conversion of (i) any Securities issued hereunder
      or
      (ii) securities to a registered broker-dealer in connection with the
      transactions contemplated by this Agreement; and/or (iii) other securities
      or
      rights exercisable or exchangeable for or convertible into shares of Common
      Stock which are issued and outstanding on the date of this Agreement, provided
      that such securities have not been amended since the date of this Agreement
      to
      increase the number of such securities or to decrease the exercise, exchange
      or
      conversion price of any such securities, (c) shares of Common Stock (or
      securities convertible into or exercisable or exchangeable for shares of Common
      Stock) which may be issued to consultants, vendors, lessors, distributors or
      similar persons, to the Company as consideration for services or assets provided
      to the Company (and the shares of Common Stock which may be issued upon exercise
      or conversion of convertible securities issued to the class persons specified
      in
      this clause), (d) securities issued pursuant to acquisitions or strategic
      transactions approved by a majority of the disinterested directors, provided
      any
      such issuance shall only be to a Person which is, itself or through its
      subsidiaries, an operating company in a business synergistic with the business
      of the Company and in which the Company receives benefits in addition to the
      investment of funds, but shall not include a transaction in which the Company
      is
      issuing securities primarily for the purpose of raising capital or to an entity
      whose primary business is investing in securities, and (e) shares of Common
      Stock or other securities issued in connection with any stock split, stock
      dividend or recapitalization of the Company (subject to Section 4.18
      hereof).

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

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

     

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

     

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

     

    “Legend
      Removal Date”
shall
      have the meaning ascribed to such term in Section 4.1(c). 

     

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

     

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

     

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

     

    “Participation
      Maximum”
shall
      have the meaning ascribed to such term in Section 4.13. 

     

    “Per
      Share Purchase Price”
equals
      $0.65, subject to adjustment for reverse and forward stock splits, stock
      dividends, stock combinations and other similar transactions of the Common
      Stock
      that occur after the date of this Agreement.

     

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

     

    “Pre-Notice”
shall
      have the meaning ascribed to such term in Section 4.13. 

     

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

     

    “Purchaser
      Party”
shall
      have the meaning ascribed to such term in Section 4.9.

     

    “Registration
      Rights Agreement”
means
      the Registration Rights Agreement, dated the date hereof, among the Company
      and
      the Purchasers, in the form of Exhibit
      A
      attached
      hereto.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

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

     

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

     

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

     

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

     

    “Securities”
means
      the Shares, the Warrants and the Warrant Shares.

     

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

     

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

     

    “Short
      Sales”
shall
      include all “short sales” as defined in Rule 200 of Regulation SHO under the
      Exchange Act (but
      shall not be deemed to include the location and/or reservation of borrowable
      shares of Common Stock). 

     

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

     

    “Subsequent
      Financing”
shall
      have the meaning ascribed to such term in Section 4.13.

     

    “Subsequent
      Financing Notice”
shall
      have the meaning ascribed to such term in Section 4.13. 

     

    “Subsidiary”
means
      any subsidiary of the Company as set forth on Schedule
      3.1(a).

     

    “Trading
      Day”
means
      a
      day on which the Common Stock is traded on a Trading Market.

     

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

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

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

     

    “VWAP”
means,
      for any date, the price determined by the first of the following clauses that
      applies: (a) if the Common Stock is then listed or quoted on a Trading Market,
      the daily volume weighted average price of the Common Stock for such date (or
      the nearest preceding date) on the Trading Market on which the Common Stock
      is
      then listed or quoted for trading as reported by Bloomberg Financial L.P. (based
      on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York
      City
      time); (b)  if the OTC Bulletin Board is not a Trading Market, the volume
      weighted average price of the Common Stock for such date (or the nearest
      preceding date) on the OTC Bulletin Board; (c) if the Common Stock is not then
      quoted for trading on the OTC Bulletin Board and if prices for the Common Stock
      are then reported in the “Pink Sheets” published by Pink Sheets, LLC (or a
      similar organization or agency succeeding to its functions of reporting prices),
      the most recent bid price per share of the Common Stock so reported; or
      (d) in all other cases, the fair market value of a share of Common Stock as
      determined by an independent appraiser selected in good faith by the Holder
      and
      reasonably acceptable to the Company. 

     

    “Warrants”
means
      collectively the Common Stock purchase warrants, in the form of Exhibit
      C
      delivered to the Purchasers at the Closing in accordance with Section 2.2(a)
      hereof, which Warrants shall be exercisable immediately and have a term of
      exercise equal to five years.

     

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

     

    ARTICLE
      II.

    PURCHASE
      AND SALE

     

    2.1  Closing.
      On each
      of the initial Closing Date and any subsequent Closing Date held prior to the
      date specified in Section 5.1, upon the terms and subject to the conditions
      set
      forth herein, substantially concurrent with the execution and delivery of this
      Agreement by the parties hereto, the Company agrees to sell, and each Purchaser
      agrees to purchase in the aggregate, severally and not jointly, up to [$________
      ] of Shares and Warrants at one or more Closings held prior to the date
      specified in Section 5.1. Each Purchaser shall deliver to the Company via wire
      transfer or a certified check immediately available funds equal to its
      Subscription Amount and the Company shall deliver to each Purchaser their
      respective Shares and Warrants as determined pursuant to Section 2.2(a) and
      the
      other items set forth in Section 2.2 issuable at each Closing. Upon satisfaction
      of the conditions set forth in Sections 2.2 and 2.3, each Closing shall occur
      at
      the offices of FWS, or such other location as the parties shall mutually
      agree.

     

    2.2  Deliveries.

     

    
      
        
        

      

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

     

    (i)  this
      Agreement duly executed by the Company;

     

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

     

    (iii)  a
      copy of
      the irrevocable instructions to the Company’s transfer agent instructing the
      transfer agent to deliver, on an expedited basis, a certificate evidencing
      a
      number of Shares equal to such Purchaser’s Subscription Amount divided by the
      Per Share Purchase Price, registered in the name of such Purchaser;

     

    (iv)  a
      Warrant
      registered in the name of such Purchaser to purchase such number of shares
      of
      Common Stock as is equal to 30% of such Purchaser’s Subscription Amount with an
      exercise price equal to 110% of the volume weighted average Closing Price of
      the
      Common Stock for the 5 Trading Days immediately preceding the second Closing
      Date, subject to adjustment as provided therein; and

     

    (v)  the
      Registration Rights Agreement duly executed by the Company.

     

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

     

    (i)  this
      Agreement duly executed by such Purchaser;

     

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

     

    (iii)  the
      Registration Rights Agreement duly executed by such Purchaser (along with the
      fully completed and executed questionnaire annexed thereto).

     

    2.3  Closing
      Conditions. 

     

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

     

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

     

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

     

    
      
        
        

      

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

     

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

     

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

     

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

     

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

     

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

     

    (v)  from
      the
      date hereof to each Closing Date, the Common Stock shall not have been de-listed
      and trading in the Common Stock shall not have been suspended by the Commission
      or the Company’s principal Trading Market (except for any suspension of trading
      of limited duration agreed to by the Company, which suspension shall be
      terminated prior to the Closing), and, at any time prior to each Closing Date,
      trading in securities generally as reported by Bloomberg Financial Markets
      shall
      not have been suspended or limited, nor shall a banking moratorium have been
      declared either by the United States or New York State authorities.

     

    ARTICLE
      III.

    REPRESENTATIONS
      AND WARRANTIES

     

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

     

    (a)  Subsidiaries.
      All of
      the direct and indirect subsidiaries of the Company are set forth on
Schedule
      3.1(a).
      The
      Company owns, directly or indirectly, all of the capital stock or other equity
      interests of each Subsidiary free and clear of any Liens, and all the issued
      and
      outstanding shares of capital stock of each Subsidiary are validly issued and
      are fully paid, non-assessable and free of preemptive and similar rights to
      subscribe for or purchase securities. If the Company has no subsidiaries, then
      all other references in the Transaction Documents to the Subsidiaries or any
      of
      them will be disregarded.

     

    (b)  Organization
      and Qualification.
      The
      Company and each of the Subsidiaries is an entity duly incorporated or otherwise
      organized, validly existing and in good standing under the laws of the
      jurisdiction of its incorporation or organization (as applicable), with the
      requisite power and authority to own and use its properties and assets and
      to
      carry on its business as currently conducted. Neither the Company nor any
      Subsidiary is in violation or default of any of the provisions of its respective
      certificate or articles of incorporation, bylaws or other organizational or
      charter documents. Each of the Company and the Subsidiaries is duly qualified
      to
      conduct business and is in good standing as a foreign corporation or other
      entity in each jurisdiction in which the nature of the business conducted or
      property owned by it makes such qualification necessary, except where the
      failure to be so qualified or in good standing, as the case may be, could not
      have or reasonably be expected to result in (i) a material adverse effect on
      the
      legality, validity or enforceability of any Transaction Document, (ii) a
      material adverse effect on the results of operations, assets, business,
      prospects or condition (financial or otherwise) of the Company and the
      Subsidiaries, taken as a whole, or (iii) a material adverse effect on the
      Company’s ability to perform in any material respect on a timely basis its
      obligations under any Transaction Document (any of (i), (ii) or (iii), a
“Material
      Adverse Effect”)
      and no
      Proceeding has been instituted in any such jurisdiction revoking, limiting
      or
      curtailing or seeking to revoke, limit or curtail such power and authority
      or
      qualification.

     

    
      
        
        

      

      
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    (c)  Authorization;
      Enforcement.
      The
      Company has the requisite corporate power and authority to enter into and to
      consummate the transactions contemplated by each of the Transaction Documents
      and otherwise to carry out its obligations hereunder and thereunder. The
      execution and delivery of each of the Transaction Documents by the Company
      and
      the consummation by it of the transactions contemplated hereby and thereby
      have
      been duly authorized by all necessary action on the part of the Company and
      no
      further action is required by the Company, its board of directors or its
      stockholders in connection therewith other than in connection with the Required
      Approvals. Each Transaction Document has been (or upon delivery will have been)
      duly executed by the Company and, when delivered in accordance with the terms
      hereof and thereof, will constitute the valid and binding obligation of the
      Company enforceable against the Company in accordance with its terms except
      (i)
      as limited by general equitable principles and applicable bankruptcy,
      insolvency, reorganization, moratorium and other laws of general application
      affecting enforcement of creditors’ rights generally, (ii) as limited by laws
      relating to the availability of specific performance, injunctive relief or
      other
      equitable remedies and (iii) insofar as indemnification and contribution
      provisions may be limited by applicable law.

     

    (d)  No
      Conflicts.
      The
      execution, delivery and performance of the Transaction Documents by the Company,
      the issuance and sale of the Shares and the consummation by the Company of
      the
      other transactions contemplated hereby and thereby do not and will not (i)
      conflict with or violate any provision of the Company’s or any Subsidiary’s
      certificate or articles of incorporation, bylaws or other organizational or
      charter documents, or (ii) conflict with, or constitute a default (or an event
      that with notice or lapse of time or both would become a default) under, result
      in the creation of any Lien upon any of the properties or assets of the Company
      or any Subsidiary, or give to others any rights of termination, amendment,
      acceleration or cancellation (with or without notice, lapse of time or both)
      of,
      any agreement, credit facility, debt or other instrument (evidencing a Company
      or Subsidiary debt or otherwise) or other understanding to which the Company
      or
      any Subsidiary is a party or by which any property or asset of the Company
      or
      any Subsidiary is bound or affected, or (iii) subject to the Required Approvals,
      conflict with or result in a violation of any law, rule, regulation, order,
      judgment, injunction, decree or other restriction of any court or governmental
      authority to which the Company or a Subsidiary is subject (including federal
      and
      state securities laws and regulations), or by which any property or asset of
      the
      Company or a Subsidiary is bound or affected; except in the case of each of
      clauses (ii) and (iii), such as could not have or reasonably be expected to
      result in a Material Adverse Effect.

     

    
      
        
        

      

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

     

    (f)  Issuance
      of the Securities.
      The
      Securities are duly authorized and, when issued and paid for in accordance
      with
      the applicable Transaction Documents, will be duly and validly issued, fully
      paid and nonassessable, free and clear of all Liens imposed by the Company
      other
      than restrictions on transfer provided for in the Transaction Documents. The
      Warrant Shares, when issued in accordance with the terms of the Transaction
      Documents, will be validly issued, fully paid and nonassessable, free and clear
      of all Liens imposed by the Company. The Company has reserved from its duly
      authorized capital stock the maximum number of shares of Common Stock issuable
      pursuant to this Agreement and the Warrants.

     

    (g)  Capitalization.
      The
      capitalization of the Company is as set forth on Schedule
      3.1(g).
      The
      Company has not issued any capital stock since its most
      recently filed periodic report under the Exchange Act, other
      than pursuant to the exercise of employee stock options under the Company’s
      stock option plans, the issuance of shares of Common Stock to employees pursuant
      to the Company’s employee stock purchase plan and pursuant to the conversion or
      exercise of Common Stock Equivalents outstanding as of the date of the most
      recently filed periodic report under the Exchange Act. Except as disclosed
      on
Schedule
      3.1(g),
      no
      Person has any right of first refusal, preemptive right, right of participation,
      or any similar right to participate in the transactions contemplated by the
      Transaction Documents. Except as disclosed on Schedule
      3.1(g)
      or as a
      result of the purchase and sale of the Securities, there are no outstanding
      options, warrants, script rights to subscribe to, calls or commitments of any
      character whatsoever relating to, or securities, rights or obligations
      convertible into or exercisable or exchangeable for, or giving any Person any
      right to subscribe for or acquire, any shares of Common Stock, or contracts,
      commitments, understandings or arrangements by which the Company or any
      Subsidiary is or may become bound to issue additional shares of Common Stock
      or
      Common Stock Equivalents. Except as disclosed on Schedule
      3.1(g),
      the
      issuance and sale of the Securities will not obligate the Company to issue
      shares of Common Stock or other securities to any Person (other than the
      Purchasers) and will not result in a right of any holder of Company securities
      to adjust the exercise, conversion, exchange or reset price under any of such
      securities. All of the outstanding shares of capital stock of the Company are
      validly issued, fully paid and nonassessable, have been issued in compliance
      with all federal and state securities laws, and none of such outstanding shares
      was issued in violation of any preemptive rights or similar rights to subscribe
      for or purchase securities. No further approval or authorization of any
      stockholder, the Board of Directors of the Company or others is required for
      the
      issuance and sale of the Securities. Except as disclosed on Schedule
      3.1(g),
      there
      are no stockholders agreements, voting agreements or other similar agreements
      with respect to the Company’s capital stock to which the Company is a party or,
      to the knowledge of the Company, between or among any of the Company’s
      stockholders.

     

    
      
        
        

      

      
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    (h)  SEC
      Reports; Financial Statements.
      The
      Company has filed all reports, schedules, forms, statements and other documents
      required to be filed by it under the Securities Act and the Exchange Act,
      including pursuant to Section 13(a) or 15(d) thereof, for the two years
      preceding the date hereof (or such shorter period as the Company was required
      by
      law or regulation to file such material) (the foregoing materials, including
      the
      exhibits thereto and documents incorporated by reference therein, being
      collectively referred to herein as the “SEC
      Reports”
and
      together with the Disclosure Schedule to this Agreement, the “Disclosure
      Materials”)
      on a
      timely basis or has received a valid extension of such time of filing and has
      filed any such SEC Reports prior to the expiration of any such extension. As
      of
      their respective dates, the SEC Reports filed by the Company subsequent to
      the
      closing of the merger transaction between Fun City Popcorn, Inc. and Lev
      Pharmaceuticals, Inc., complied in all material respects with the requirements
      of the Securities Act and the Exchange Act, as applicable, and none of the
      SEC
      Reports, when filed, contained any untrue statement of a material fact or
      omitted to state a material fact required to be stated therein or necessary
      in
      order to make the statements therein, in the light of the circumstances under
      which they were made, not misleading. The financial statements of the Company
      included in the SEC Reports comply in all material respects with applicable
      accounting requirements and the rules and regulations of the Commission with
      respect thereto as in effect at the time of filing. Such financial statements
      have been prepared in accordance with United States generally accepted
      accounting principles applied on a consistent basis during the periods involved
      (“GAAP”),
      except as may be otherwise specified in such financial statements or the notes
      thereto and except that unaudited financial statements may not contain all
      footnotes required by GAAP, and fairly present in all material respects the
      financial position of the Company and its consolidated subsidiaries as of and
      for the dates thereof and the results of operations and cash flows for the
      periods then ended, subject, in the case of unaudited statements, to normal,
      immaterial (individually or in the aggregate), year-end audit adjustments.
      All
      material agreements to which the Company or any Subsidiary is a party or to
      which the property or assets of the Company or any Subsidiary are subject are
      filed as exhibits to or specifically identified in the SEC Reports to the extent
      required by the rules and regulations of the Commission as in effect at the
      time
      of filing.

     

    
      
        
        

      

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

     

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

     

    (k)  Labor
      Relations.
      No
      material labor dispute exists or, to the knowledge of the Company, is imminent
      with respect to any of the employees of the Company which could reasonably
      be
      expected to result in a Material Adverse Effect. None of the Company’s or its
      Subsidiaries’ employees is a member of a union that relates to such employee’s
      relationship with the Company, and neither the Company or any of its
      Subsidiaries is a party to a collective bargaining agreement, and the Company
      and its Subsidiaries believe that their relationships with their employees
      are
      good. No executive officer, to the knowledge of the Company, is, or is now
      expected to be, in violation of any material term of any employment contract,
      confidentiality, disclosure or proprietary information agreement or
      non-competition agreement, or any other contract or agreement or any restrictive
      covenant, and the continued employment of each such executive officer does
      not
      subject the Company or any of its Subsidiaries to any liability with respect
      to
      any of the foregoing matters. The Company and its Subsidiaries are, to their
      knowledge, in compliance with all U.S. federal, state, local and foreign laws
      and regulations relating to employment and employment practices, terms and
      conditions of employment and wages and hours, except where the failure to be
      in
      compliance could not, individually or in the aggregate, reasonably be expected
      to have a Material Adverse Effect.

     

    
      
        
        

      

      
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    (l)  Compliance.
      Neither
      the Company nor any Subsidiary (i) is in default under or in violation of (and
      no event has occurred that has not been waived that, with notice or lapse of
      time or both, would result in a default by the Company or any Subsidiary under),
      nor has the Company or any Subsidiary received notice of a claim that it is
      in
      default under or that it is in violation of, any indenture, loan or credit
      agreement or any other agreement or instrument to which it is a party or by
      which it or any of its properties is bound (whether or not such default or
      violation has been waived), (ii) is in violation of any order of any court,
      arbitrator or governmental body, or (iii) is or has been in violation of any
      statute, rule or regulation of any governmental authority, including without
      limitation all foreign, federal, state and local laws applicable to its business
      and all such laws that affect the environment, except in each case as could
      not
      have or reasonably be expected to result in a Material Adverse
      Effect.

     

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

     

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

     

    
      
        
        

      

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

     

    (p)  Insurance.
      The
      Company and the Subsidiaries are insured by insurers of recognized financial
      responsibility against such losses and risks and in such amounts as are prudent
      and customary in the businesses in which the Company and the Subsidiaries are
      engaged, including, but not limited to, directors and officers insurance
      coverage at least equal to the aggregate Subscription Amount. Neither the
      Company nor any Subsidiary has any reason to believe that it will not be able
      to
      renew its existing insurance coverage as and when such coverage expires or
      to
      obtain similar coverage from similar insurers as may be necessary to continue
      its business without a significant increase in cost.

     

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

     

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

     

    
      
        
        

      

      
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    (s)  Certain
      Fees.
      Except
      for such fees as disclosed on Schedule
      3.1(s),
      for
      which the Company will be solely liable and which will be fully paid at Closing,
      no brokerage or finder’s fees or commissions are or will be payable by the
      Company to any broker, financial advisor or consultant, finder, placement agent,
      investment banker, bank or other Person with respect to the transactions
      contemplated by the Transaction Documents. The Purchasers shall have no
      obligation with respect to any fees or with respect to any claims made by or
      on
      behalf of other Persons for fees of a type contemplated in this Section that
      may
      be due in connection with the transactions contemplated by the Transaction
      Documents.

     

    (t)  Private
      Placement.
      Assuming the accuracy of the Purchasers representations and warranties set
      forth
      in Section 3.2, no registration under the Securities Act is required for the
      offer and sale of the Securities by the Company to the Purchasers as
      contemplated hereby. The issuance and sale of the Securities hereunder does
      not
      contravene the rules and regulations of the Trading Market. 

     

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

     

     

    (v)  Registration
      Rights.
      Except
      as disclosed in Section
      3.1(v)
      of the
      Disclosure Schedule, other than each of the Purchasers and any registered
      broker-dealer receiving compensation in the form of equity in connection with
      the transactions contemplated by this Agreement, no Person has any right to
      cause the Company to effect the registration under the Securities Act of any
      securities of the Company.

     

    
      
        
        

      

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

     

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

     

    (y)  Disclosure.
      Except
      with respect to the material terms and conditions of the transactions
      contemplated by the Transaction Documents, the Company confirms that, neither
      it
      nor any other Person acting on its behalf has provided any of the Purchasers
      or
      their agents or counsel with any information that it believes constitutes or
      might constitute material, non-public information. The Company understands
      and
      confirms that the Purchasers will rely on the foregoing representation in
      effecting transactions in securities of the Company. All disclosure furnished
      by
      or on behalf of the Company to the Purchasers regarding the Company, its
      business and the transactions contemplated hereby, including the Disclosure
      Schedules to this Agreement, with respect to the representations and warranties
      made herein are true and correct with respect to such representations and
      warranties and do not contain any untrue statement of a material fact or omit
      to
      state any material fact necessary in order to make the statements made therein,
      in light of the circumstances under which they were made, not misleading. The
      press releases disseminated by the Company during the twelve months preceding
      the date of this Agreement taken as a whole do not contain any untrue statement
      of a material fact or omit to state a material fact required to be stated
      therein or necessary in order to make the statements, in light of the
      circumstances under which they were made and when made, not misleading. The
      Company acknowledges and agrees that no Purchaser makes or has made any
      representations or warranties with respect to the transactions contemplated
      hereby other than those specifically set forth in Section 3.2
      hereof.

     

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

     

    
      
        
        

      

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

     

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

     

    (cc)  No
      General Solicitation.
      Neither
      the Company nor any person acting on behalf of the Company has offered or sold
      any of the Securities by any form of general solicitation or general
      advertising. The Company has offered the Securities for sale only to the
      Purchasers and certain other “accredited investors” within the meaning of Rule
      501 under the Securities Act.

     

    
      
        
        

      

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

     

    (ee)  Accountants.
      The
      Company’s accountants are Eisner LLP. To the knowledge of the Company, such
      accountants, who the Company expects will express their opinion with respect
      to
      the financial statements to be included in the Company’s Annual Report on Form
      10-KSB for the year ending December 31, 2005, are a registered public accounting
      firm as required by the Exchange Act.

     

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

     

    (gg)  Acknowledgement
      Regarding Purchasers’ Trading Activity.
      Anything in this Agreement or elsewhere herein to the contrary notwithstanding
      (except for Sections 3.2(f) and 4.15 hereof), it is understood and acknowledged
      by the Company (i) that none of the Purchasers have been asked to agree, nor
      has
      any Purchaser agreed, to hold the Securities for any specified term; (ii) that
      past or future open market or other transactions by any Purchaser, including
      Short Sales, and specifically including, without limitation, Short Sales or
      “derivative” transactions executed in compliance with applicable federal law,
      may negatively impact the market price of the Company’s publicly-traded
      securities; (iii) that any Purchaser, and counter-parties in “derivative”
transactions to which any such Purchaser is a party, directly or indirectly,
      presently may have a “short” position in the Common Stock, and (iv) that each
      Purchaser shall not be deemed to have any affiliation with or control over
      any
      arm’s length, unaffiliated, counter-party in any “derivative” transaction.
The
      Company further understands and acknowledges that (a) one or more Purchasers
      may
      engage in hedging activities at various times during the period that the
      Securities are outstanding, including, without limitation, during the periods
      that the value of the Warrant Shares deliverable with respect to Securities
      are
      being determined and (b) such hedging activities (if any) could reduce the
      value
      of the existing stockholders' equity interests in the Company at and after
      the
      time that the hedging activities are being conducted.  The Company
      acknowledges that such aforementioned hedging activities do not constitute
      a
      breach of any of the Transaction Documents.

     

    
      
        
        

      

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

     

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

     

    (a)  Organization;
      Authority.
      Such
      Purchaser is an entity duly organized, validly existing and in good standing
      under the laws of the jurisdiction of its organization with full right,
      corporate or partnership power and authority to enter into and to consummate
      the
      transactions contemplated by the Transaction Documents and otherwise to carry
      out its obligations hereunder and thereunder. The execution, delivery and
      performance by such Purchaser of the transactions contemplated by this Agreement
      have been duly authorized by all necessary corporate or similar action on the
      part of such Purchaser. Each Transaction Document to which it is a party has
      been duly executed by such Purchaser, and when delivered by such Purchaser
      in
      accordance with the terms hereof, will constitute the valid and legally binding
      obligation of such Purchaser, enforceable against it in accordance with its
      terms, except (i) as limited by general equitable principles and applicable
      bankruptcy, insolvency, reorganization, moratorium and other laws of general
      application affecting enforcement of creditors’ rights generally, (ii) as
      limited by laws relating to the availability of specific performance, injunctive
      relief or other equitable remedies and (iii) insofar as indemnification and
      contribution provisions may be limited by applicable law.

     

    (b)  Own
      Account.
      Such
      Purchaser understands that the Securities are “restricted securities” and have
      not been registered under the Securities Act or any applicable state securities
      law and is acquiring the Securities as principal for its own account and not
      with a view to or for distributing such Securities or any part thereof in
      violation of the Securities Act or any applicable state securities law, has
      no
      present intention of distributing any of such Securities in violation of the
      Securities Act or any applicable state securities law and has no direct or
      indirect arrangement or understandings with any other persons to distribute
      or
      regarding the distribution of such Securities (this representation and warranty
      not limiting such Purchaser’s right to sell the Securities pursuant to the
      Registration Statement or otherwise without prejudice, however, to such
      Purchaser’s right, subject to the provisions of this Agreement, at all times to
      sell or otherwise dispose of all or any part of such Securities pursuant to
      an
      effective registration statement under the Securities Act or under an exemption
      from such registration and in compliance with applicable federal and state
      securities laws) in violation of the Securities Act or any applicable state
      securities law. Such Purchaser is acquiring the Securities hereunder in the
      ordinary course of its business. Nothing contained herein shall be deemed a
      representation or warranty by such Purchaser to hold Securities for any period
      of time. Such Purchaser does not have any agreement or understanding, directly
      or indirectly, with any Person to distribute any of the Securities.

     

    
      
        
        

      

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

     

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

     

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

     

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

     

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

     

    (g)  Access
      to Information.
      Each
      Purchaser acknowledges that it has reviewed the Disclosure Materials and has
      been afforded (i) the opportunity to ask such questions as it has deemed
      necessary of, and to receive answers from, representatives of the Company
      concerning the terms and conditions of the offering of the Securities and the
      merits and risks of investing in the Securities; (ii) access to information
      about the Company and the Subsidiaries and their respective financial condition,
      results of operations, business, properties, management and prospects sufficient
      to enable it to evaluate its investment; and (iii) the opportunity to obtain
      such additional information that the Company possesses or can acquire without
      unreasonable effort or expense that is necessary to make an informed investment
      decision with respect to the investment. Neither such inquiries nor any other
      investigation conducted by or on behalf of each Purchaser or its representatives
      or counsel shall modify, amend or affect such Purchaser’s right to rely on the
      truth, accuracy and completeness of the Disclosure Materials and the Company’s
      representations and warranties contained in the Transaction
      Documents.

     

    (h)  Independent
      Investment Decision.
      Each
      Purchaser has independently evaluated the merits of its decision to purchase
      Securities pursuant to this Agreement, such decision has been independently made
      by such Purchaser and such Purchaser confirms that it has only relied on the
      advice of its own business and/or legal counsel and not on the advice of any
      other Purchaser’s business and/or legal counsel, or the Company’s legal counsel,
      in making such decision. Each Purchaser has not relied on the truth, accuracy
      or
      completeness of the statements contained in any research report concerning
      the
      Company that was prepared by an investment banking firm. 

     

    (i)  Reliance.
      Each
      Purchaser understands and acknowledges that: (i) the Securities are being
      offered and sold to it without registration under the Securities Act in a
      private placement that 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 such Investor hereby consents to such reliance.

     

    ARTICLE
      IV.

    OTHER
      AGREEMENTS OF THE PARTIES

     

    4.1  Transfer
      Restrictions.
      

     

    (a)  The
      Securities may only be disposed of in compliance with state and federal
      securities laws. In connection with any transfer of Securities other than
      pursuant to an effective registration statement or Rule 144, to the Company
      or
      to an affiliate of a Purchaser or in connection with a pledge as contemplated
      in
      Section 4.1(b), the Company may require the transferor thereof to provide to
      the
      Company an opinion of counsel selected by the transferor and reasonably
      acceptable to the Company, the form and substance of which opinion shall be
      reasonably satisfactory to the Company, to the effect that such transfer does
      not require registration of such transferred Securities under the Securities
      Act. As a condition of transfer, any such transferee shall agree in writing
      to
      be bound by the terms of this Agreement and shall have the rights of a Purchaser
      under this Agreement and the Registration Rights Agreement. Notwithstanding
      the
      foregoing, the Company hereby consents to and agrees to register on the books
      of
      the Company and with its transfer agent, any transfer of Company Shares by
      a
      Purchaser to an Affiliate of such Purchaser, provided that the transferee
      certifies to the Company that it is an “accredited investor” as defined in Rule
      501(a) under the Securities Act.

     

    
      
        
        

      

      
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    (b)  The
      Purchasers agree to the imprinting, so long as is required by this Section
      4.1,
      of a legend on any of the Securities in the following form:

     

    THESE
      SECURITIES HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION
      OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
      REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
      ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
      EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
      AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
      REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
      SECURITIES LAWS AS EVIDENCED BY AN OPINION OF COUNSEL TO THE TRANSFEROR TO
      SUCH
      EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY.
      NOTWITHSTANDING THE FOREGOING, (I) THESE SECURITIES MAY BE TRANSFERRED TO AN
      AFFILIATE (AS SUCH TERM IS USED IN RULE 144 UNDER THE SECURITIES ACT) PROVIDED
      SUCH AFFILIATE IS AN “ACCREDITED INVESTOR” (AS SUCH TERM IS DEFINED IN THE RULES
      AND REGULATIONS PROMULGATED UNDER THE SECURITIES ACT), AND (II) THESE SECURITIES
      MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT WITH A REGISTERED
      BROKER-DEALER OR OTHER LOAN WITH A FINANCIAL INSTITUTION THAT IS AN “ACCREDITED
      INVESTOR” AS DEFINED IN RULE 501(a) UNDER THE SECURITIES ACT OR OTHER LOAN
      SECURED BY SUCH SECURITIES.

     

    The
      Company acknowledges and agrees that a Purchaser may from time to time pledge
      pursuant to a bona fide margin agreement with a registered broker-dealer or
      grant a security interest in some or all of the Securities to a financial
      institution that is an “accredited investor” as defined in Rule 501(a) under the
      Securities Act and who agrees to be bound by the provisions of this Agreement
      and the Registration Rights Agreement and, if required under the terms of such
      arrangement, such Purchaser may transfer pledged or secured Securities to the
      pledgees or secured parties. Such a pledge or transfer would not be subject
      to
      approval of the Company and no legal opinion of legal counsel of the pledgee,
      secured party or pledgor shall be required in connection therewith, but such
      legal opinion shall be required in connection with a subsequent transfer or
      foreclosure following default by the Purchaser transferee of the pledge.
      Further, no notice shall be required of such pledge but Purchaser’s transferee
      shall promptly notify the Company of the pledge. At the appropriate Purchaser’s
      expense, the Company will execute and deliver such reasonable documentation
      as a
      pledgee or secured party of Securities may reasonably request in connection
      with
      a pledge or transfer of the Securities, including, if the Securities are subject
      to registration pursuant to the Registration Rights Agreement, the preparation
      and filing of any required prospectus supplement under Rule 424(b)(3) under
      the
      Securities Act or other applicable provision of the Securities Act to
      appropriately amend the list of Selling Stockholders thereunder. Each Purchaser
      acknowledges that the Company shall not be responsible for any pledges relating
      to, or the grant of any security interest in, any of the Securities or for
      any
      agreement, understanding or arrangement between any Purchaser and its pledgee
      or
      secured party. The Company’s indemnification obligations pursuant to this
      Agreement shall not extend to any Proceeding or Losses arising out of or related
      to this Section
      4.1(b).

     

    
      
        
        

      

      
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    (c)  Certificates
      evidencing the Shares and Warrant Shares shall not contain any legend (including
      the legend set forth in Section 4.1(b)), (i) while a registration statement
      (including the Registration Statement) covering the resale of such security
      is
      effective under the Securities Act, or (ii) following any sale of such Shares
      or
      Warrant Shares pursuant to Rule 144, or (iii) if such Shares or Warrant Shares
      are eligible for sale under Rule 144(k) (to the extent that the applicable
      Purchaser provides a certification or legal opinion to the Company to that
      effect), or (iv) if such legend is not required under applicable requirements
      of
      the Securities Act (including judicial interpretations and pronouncements issued
      by the staff of the Commission). The Company shall cause its counsel to issue
      a
      legal opinion to the Company’s transfer agent promptly after the Effective Date
      if required by the Company’s transfer agent to effect the removal of the legend
      hereunder. If all or any portion of a Warrant is exercised at a time when there
      is an effective registration statement to cover the resale of the Warrant
      Shares, such Warrant Shares shall be issued free of all legends, provided the
      Purchaser complies with its prospectus delivery obligations and the Plan of
      Distribution. The Company agrees that following the Effective Date or at such
      time as such legend is no longer required under this Section 4.1(c), it will,
      no
      later than three Trading Days following the delivery by a Purchaser to the
      Company or the Company’s transfer agent of a certificate representing Shares or
      Warrant Shares, as the case may be, issued with a restrictive legend (endorsed
      or with stock powers attached, signatures guaranteed, and otherwise in form
      necessary to affect the reissuance and/or transfer) (such third Trading Day,
      the
“Legend
      Removal Date”),
      deliver or cause to be delivered to such Purchaser a certificate representing
      such shares that is free from all restrictive and other legends. The Company
      may
      not make any notation on its records or give instructions to any transfer agent
      of the Company that enlarge the restrictions on transfer set forth in this
      Section. Certificates for Securities subject to legend removal hereunder shall
      be transmitted by the transfer agent of the Company to the Purchasers by
      crediting the account of the Purchaser’s prime broker with the Depository Trust
      Company System, if practicable.

    

    (d) Each
      Purchaser, severally and not jointly with the other Purchasers, agrees that
      the
      removal of the restrictive legend from certificates representing Securities
      as
      set forth in this Section 4.1 is predicated upon the Company’s reliance that the
      Purchaser will sell any Securities pursuant to either the registration
      requirements of the Securities Act, including any applicable prospectus delivery
      requirements, or an exemption therefrom, and that if Securities are sold
      pursuant to a Registration Statement, they will be sold in compliance with
      the
      plan of distribution set forth therein. To provide further assurance in
      connection with de-legending, each Purchaser hereunder commits that it will
      continue to hold the shares in its own name, and not in the name of a nominee,
      until such time as the shares are duly and properly sold in compliance with
      all
      relevant securities laws. Both the Company and its transfer agent, and their
      respective directors, officers, employees and agents, may rely on this
      subsection (d) and each Purchaser hereunder will indemnify and hold harmless
      each of such persons from any breaches or violations of this paragraph.

     

    
      
        
        

      

      
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    4.2  Furnishing
      of Information.
      As long
      as any Purchaser owns Securities, the Company covenants to timely file (or
      obtain extensions in respect thereof and file within the applicable grace
      period) all reports required to be filed by the Company after the date hereof
      pursuant to the Exchange Act. As long as any Purchaser owns Securities, if
      the
      Company is not required to file reports pursuant to the Exchange Act, it will
      prepare and furnish to the Purchasers and make publicly available in accordance
      with Rule 144(c) such information as is required for the Purchasers to sell
      the
      Securities under Rule 144. The Company further covenants that it will use its
      commercially reasonable efforts to take such further action as any holder of
      Securities may reasonably request, to the extent required from time to time
      to
      enable such Person to sell such Securities without registration under the
      Securities Act within the requirements of the exemption provided by Rule
      144.

     

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

     

    4.4  Securities
      Laws Disclosure; Publicity.
      The
      Company shall, no later than 9:00 a.m. Eastern time on the fourth Trading Day
      immediately following the date hereof, issue a Current Report on Form 8-K,
      disclosing the material terms of the transactions contemplated hereby, and
      shall
      attach the Transaction Documents thereto. The Company and each Purchaser shall
      consult with each other in issuing any other press releases with respect to
      the
      transactions contemplated hereby, and neither the Company nor any Purchaser
      shall issue any such press release or otherwise make any such public statement
      without the prior consent of the Company, with respect to any press release
      of
      any Purchaser, or without the prior consent of each Purchaser, with respect
      to
      any press release of the Company, which consent shall not unreasonably be
      withheld or delayed, except if such disclosure is required by law, in which
      case
      the disclosing party shall promptly provide the other party with prior notice
      of
      such public statement or communication. Notwithstanding the foregoing, the
      Company shall not publicly disclose the name of any Purchaser, or include the
      name of any Purchaser in any filing with the Commission or any regulatory agency
      or Trading Market, without the prior written consent of such Purchaser, except
      (i) as required by federal securities law in connection with (A) any
      registration statement contemplated by the Registration Rights Agreement and
      (B)
      the filing of final Transaction Documents (including signature pages thereto)
      with the Commission and (ii) to the extent such disclosure is required by law
      or
      Trading Market regulations, in which case the Company shall provide the
      Purchasers with prior notice of such disclosure permitted under this subclause
      (ii).

     

    
      
        
        

      

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

     

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

     

    4.7  Use
      of
      Proceeds. Except as set forth on Schedule 4.7 attached hereto, the Company
      shall use the net proceeds from the sale of the Securities hereunder for working
      capital purposes and not for the satisfaction of any portion of the Company’s
      debt (other than payment of trade payables in the ordinary course of the
      Company’s business and prior practices), to redeem any Common Stock or Common
      Stock Equivalents or to settle any outstanding litigation.

     

    4.8  Indemnification
      of Purchasers. Subject to the provisions of this Section 4.9, the Company
      will indemnify and hold each Purchaser and its directors, officers,
      shareholders, members, partners, employees and agents (and any other Persons
      with a functionally equivalent role of a Person holding such titles
      notwithstanding a lack of such title or any other title), each Person who
      controls such Purchaser (within the meaning of Section 15 of the Securities
      Act
      and Section 20 of the Exchange Act), and the directors, officers, shareholders,
      agents, members, partners or employees (and any other Persons with a
      functionally equivalent role of a Person holding such titles notwithstanding
      a
      lack of such title or any other title) of such controlling persons (each, a
      “Purchaser Party”) harmless from any and all losses, liabilities, obligations,
      claims, contingencies, damages, costs and expenses, including all judgments,
      amounts paid in settlements, court costs and reasonable attorneys’ fees and
      costs of investigation that any such Purchaser Party may suffer or incur as
      a
      result of or relating to (a) any breach of any of the representations,
      warranties, covenants or agreements made by the Company in this Agreement or
      in
      the other Transaction Documents or (b) any action instituted against a
      Purchaser, or any of them or their respective Affiliates, by any stockholder
      of
      the Company who is not an Affiliate of such Purchaser, with respect to any
      of
      the transactions contemplated by the Transaction Documents (unless such action
      is based upon a breach of such Purchaser’s representation, warranties or
      covenants under the Transaction Documents or any agreements or understandings
      such Purchaser may have with any such stockholder or any violations by the
      Purchaser of state or federal securities laws or any conduct by such Purchaser
      which constitutes fraud, gross negligence, willful misconduct or malfeasance).
      If any action shall be brought against any Purchaser Party in respect of which
      indemnity may be sought pursuant to this Agreement, such Purchaser Party shall
      promptly notify the Company in writing, and the Company shall have the right
      to
      assume the defense thereof with counsel of its own choosing reasonably
      acceptable to the Purchaser Party. Any Purchaser Party shall have the right
      to
      employ separate counsel in any such action and participate in the defense
      thereof, but the fees and expenses of such counsel shall be at the expense
      of
      such Purchaser Party except to the extent that (i) the employment thereof has
      been specifically authorized by the Company in writing, (ii) the Company has
      failed after a reasonable period of time to assume such defense and to employ
      counsel or (iii) in such action there is, in the reasonable opinion of such
      separate counsel, a material conflict on any material issue between the position
      of the Company and the position of such Purchaser Party, in which case the
      Company shall be responsible for the reasonable fees and expenses of no more
      than one such separate counsel. The Company will not be liable to any Purchaser
      Party under this Agreement (i) for any settlement by a Purchaser Party effected
      without the Company’s prior written consent, which shall not be unreasonably
      withheld or delayed; or (ii) to the extent, but only to the extent that a loss,
      claim, damage or liability is attributable to any Purchaser Party’s breach of
      any of the representations, warranties, covenants or agreements made by such
      Purchaser Party in this Agreement or in the other Transaction
      Documents.

     

    
      
        
        

      

      
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    4.9  Reservation
      of Common Stock.
      As of
      the date hereof, the Company has reserved and the Company shall continue to
      reserve and keep available at all times, free of preemptive rights, a sufficient
      number of shares of Common Stock for the purpose of enabling the Company to
      issue Shares pursuant to this Agreement and Warrant Shares pursuant to any
      exercise of the Warrants. 

     

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

     

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

     

    4.12  Participation
      in Future Financing. 

     

    (a)  From
      the
      date hereof until the date that is the six month anniversary of the Effective
      Date, upon any issuance by the Company or any of its Subsidiaries of Common
      Stock or Common Stock Equivalents (a “Subsequent
      Financing”),
      the
      Purchasers shall have the right to participate in up to an amount of the
      Subsequent Financing equal to 25% of the Subsequent Financing (the “Participation
      Maximum”)
      on the
      same terms, conditions and price provided for in the Subsequent
      Financing. 

     

    
      
        
        

      

      
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    (b)  At
      least
      5 Trading Days prior to the closing of the Subsequent Financing, the Company
      shall deliver to each Purchaser a written notice of its intention to effect
      a
      Subsequent Financing (“Pre-Notice”),
      which
      Pre-Notice shall ask such Purchaser if it wants to review the details of such
      financing (such additional notice, a “Subsequent
      Financing Notice”). 
      Upon the request of a Purchaser, and only upon a request by such Purchaser,
      for
      a Subsequent Financing Notice, the Company shall promptly, but no later than
      2
      Trading Days after such request, deliver a Subsequent Financing Notice to such
      Purchaser.  The Subsequent Financing Notice shall describe in reasonable
      detail the proposed terms of such Subsequent Financing, the amount of proceeds
      intended to be raised thereunder, the Person or Persons through or with whom
      such Subsequent Financing is proposed to be effected, and attached to which
      shall be a term sheet or similar document relating
      thereto.   

     

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

     

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

     

    (e)  If
      by
      5:30 p.m. (New York City time) on the 5th
      Trading
      Day after all of the Purchasers have received the Pre-Notice, the Company
      receives responses to a Subsequent Financing Notice from Purchasers seeking
      to
      purchase more than the aggregate amount of the Participation Maximum, each
      such
      Purchaser shall have the right to purchase the greater of (a) their Pro Rata
      Portion (as defined below) of the Participation Maximum and (b) the difference
      between the Participation Maximum and the aggregate amount of participation
      by
      all other Purchasers.  “Pro
      Rata Portion”
is
      the
      ratio of (x) the Subscription Amount of Securities purchased on the Closing
      Date
      by a Purchaser participating under this Section 4.12 and (y) the sum of the
      aggregate Subscription Amounts of Securities purchased on the Closing Date
      by
      all Purchasers participating under this Section 4.12.

     

    
      
        
        

      

      
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    (f)  The
      Company must provide the Purchasers with a second Subsequent Financing Notice,
      and the Purchasers will again have the right of participation set forth above
      in
      this Section 4.12, if the Subsequent Financing subject to the initial Subsequent
      Financing Notice is not consummated for any reason on the terms set forth in
      such Subsequent Financing Notice within 60 Trading Days after the date of the
      initial Subsequent Financing Notice.

     

    (g)  Notwithstanding
      the foregoing, this Section 4.12 shall not apply in respect of an Exempt
      Issuance or to a registered primary public offering.

     

    4.13  Subsequent
      Equity Sales.
      

     

    (a)  From
      the
      date hereof until 30 days after the Effective Date, neither the Company nor
      any
      Subsidiary shall issue shares of Common Stock or Common Stock Equivalents;
      provided, however, the 30 day period set forth in this Section 4.14 shall be
      extended for the number of Trading Days during such period in which (i) trading
      in the Common Stock is suspended by any Trading Market, or (ii) following the
      Effective Date, the Registration Statement is not effective or the prospectus
      included in the Registration Statement may not be used by the Purchasers for
      the
      resale of the Shares and Warrant Shares. 

     

    (b)  From
      the
      date hereof until 18 months from the Effective Date, the Company shall be
      prohibited from effecting or entering into an agreement to effect any Subsequent
      Financing involving a “Variable Rate Transaction.” The term “Variable
      Rate Transaction”
shall
      mean a transaction in which the Company issues or sells (i) any debt or equity
      securities that are convertible into, exchangeable or exercisable for, or
      include the right to receive additional shares of Common Stock either (A) at
      a
      conversion, exercise or exchange rate or other price that is based upon and/or
      varies with the trading prices of or quotations for the shares of Common Stock
      at any time after the initial issuance of such debt or equity securities, or
      (B)
      with a conversion, exercise or exchange price that is subject to being reset
      at
      some future date after the initial issuance of such debt or equity security
      or
      upon the occurrence of specified or contingent events directly or indirectly
      related to the business of the Company or the market for the Common Stock or
      (ii) enters into any agreement, including, but not limited to, an equity line
      of
      credit, whereby the Company may sell securities at a future determined price.
      Any Purchaser shall be entitled to obtain injunctive relief against the Company
      to preclude any such issuance, which remedy shall be in addition to any right
      to
      collect damages. 

     

    (c)  Notwithstanding
      the foregoing, this Section 4.14 shall not apply in respect of an Exempt
      Issuance, except that no Variable Rate Transaction shall be an Exempt
      Issuance.

     

    4.14  Short
      Sales
      and
      Confidentiality After The Date Hereof. Each
      Purchaser severally and not jointly with the other Purchasers covenants that
      neither it nor any Affiliate acting on its behalf or pursuant to any
      understanding with it will engage, directly or indirectly, in any transactions
      in the securities of the Company (including, without limitation, any Short
      Sales
      involving the Company’s securities) during the period commencing at the
      Discussion Time and until such time as (i) the transactions contemplated by
      this
      Agreement are first publicly announced as described in Section 4.4 or (ii)
      this
      Agreement is terminated in full pursuant to Section 5.1. Each
      Purchaser, severally and not jointly with the other Purchasers, covenants that
      until such time as the transactions contemplated by this Agreement are publicly
      disclosed by the Company as described in Section 4.4, such Purchaser will
      maintain the confidentiality of all disclosures made to it in connection with
      this transaction (including the existence and terms of this transaction). Each
      Purchaser understands and acknowledges, severally and not jointly with any
      other
      Purchaser, that the Commission currently takes the position that coverage of
      short sales of shares of the Common Stock “against the box” prior to the
      Effective Date of the Registration Statement with the Securities is a violation
      of Section 5 of the Securities Act, as set forth in Item 65, Section A, of
      the
      Manual of Publicly Available Telephone Interpretations, dated July 1997,
      compiled by the Office of Chief Counsel, Division of Corporation Finance.
Except
      in
      compliance with the Securities Act and the rules and regulations promulgated
      thereunder and applicable state securities laws, the Purchaser will not engage
      in any Short Sales that result in the disposition of the Securities (including
      the Warrant Shares) acquired hereunder by the Purchaser.  Notwithstanding
      the foregoing, in the case of a Purchaser that is a multi-managed investment
      vehicle whereby separate portfolio managers manage separate portions of such
      Purchaser's assets and the portfolio managers have no direct knowledge of the
      investment decisions made by the portfolio managers managing other portions
      of
      such Purchaser's assets, the covenant set forth above shall only apply with
      respect to the portion of assets managed by the portfolio manager that made
      the
      investment decision to purchase the Securities covered by this
      Agreement.

     

    
      
        
        

      

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

     

    4.16  Form
      D;
      Blue Sky Filings. The Company agrees to timely file a Form D with respect to
      the
      Securities as required under Regulation D and to provide a copy thereof,
      promptly upon request of any Purchaser. The Company shall take such action
      as
      the Company shall reasonably determine is necessary in order to obtain an
      exemption for, or to qualify the Securities for, sale to the Purchasers at
      the
      Closing under applicable securities or “Blue Sky” laws of the states of the
      United States, and shall provide evidence of such actions promptly upon request
      of any Purchaser.

     

    4.17  AMEX
      Listing. At such point as the Company’s management determines in good faith that
      it would be appropriate, the Company will use its commercially reasonable
      efforts to list all of its Common Stock, including without limitation the Shares
      and Warrant Shares, for trading on the American Stock Exchange. 

     

    ARTICLE
      V.

    MISCELLANEOUS

     

    5.1  Termination. 
      This Agreement may be terminated by any Purchaser, as to such Purchaser’s
      obligations hereunder only and without any effect whatsoever on the obligations
      between the Company and the other Purchasers, by written notice to the other
      parties, if the Closing has not been consummated on or before October 30, 2006;
      provided, however, that no such termination will affect the right of any party
      to sue for any breach by the other party (or parties).

     

    
      
        
        

      

      
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    5.2  Fees
      and Expenses. At the initial Closing, the Company has agreed to reimburse
      Southpoint Master Fund, LP the non-accountable sum of $20,000, for its legal
      fees and expenses. The Company shall deliver, prior to the Closing, a completed
      and executed copy of the Closing Statement, attached hereto as Annex A. Except
      as expressly set forth in the Transaction Documents to the contrary, each party
      shall pay the fees and expenses of its advisers, counsel, accountants and other
      experts, if any, and all other expenses incurred by such party incident to
      the
      negotiation, preparation, execution, delivery and performance of this Agreement.
      The Company shall pay all transfer agent fees, stamp taxes and other taxes
      and
      duties levied in connection with the delivery of any Securities to the
      Purchasers.

     

    5.3  Entire
      Agreement. The Transaction Documents, together with the exhibits and
      schedules thereto, contain the entire understanding of the parties with respect
      to the subject matter hereof and supersede all prior agreements and
      understandings, oral or written, with respect to such matters, which the parties
      acknowledge have been merged into such documents, exhibits and schedules. At
      or
      after each Closing, and without further consideration, each party hereto will
      execute and deliver to any other party hereto such further documents as may
      be
      reasonably requested in order to give practical effect to the intention of
      the
      parties under the Transaction Documents.

     

    5.4  Notices.
      Any and all notices or other communications or deliveries required or permitted
      to be provided hereunder shall be in writing and shall be deemed given and
      effective on the earliest of (a) the date of transmission, if such notice or
      communication is delivered via facsimile at the facsimile number set forth
      on
      the signature pages attached hereto prior to 5:30 p.m. (New York City time)
      on a
      Trading Day, (b) the next Trading Day after the date of transmission, if such
      notice or communication is delivered via facsimile at the facsimile number
      set
      forth on the signature pages attached hereto on a day that is not a Trading
      Day
      or later than 5:30 p.m. (New York City time) on any Trading Day, (c) the
      2nd
      Trading
      Day following the date of mailing, if sent by U.S. nationally recognized
      overnight courier service, or (d) upon actual receipt by the party to whom
      such
      notice is required to be given. The address for such notices and communications
      shall be as set forth on the signature pages attached hereto.

     

    5.5  Amendments;
      Waivers. No provision of this Agreement may be waived or amended except in a
      written instrument signed, in the case of an amendment, by the Company and
      Purchasers subscribing for at least 50% of the Securities or, in the case of
      a
      waiver, by the party against whom enforcement of any such waived provision
      is
      sought. No waiver of any default with respect to any provision, condition or
      requirement of this Agreement shall be deemed to be a continuing waiver in
      the
      future or a waiver of any subsequent default or a waiver of any other provision,
      condition or requirement hereof, nor shall any delay or omission of any party
      to
      exercise any right hereunder in any manner impair the exercise of any such
      right.

     

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

     

    5.7  Successors
      and Assigns. This Agreement shall be binding upon and inure to the benefit
      of the parties and their successors and permitted assigns. The Company may
      not
      assign this Agreement or any rights or obligations hereunder without the prior
      written consent of each Purchaser (other than by merger). Any Purchaser may
      assign any or all of its rights under this Agreement to any Person to whom
      such
      Purchaser assigns or transfers any Securities, provided such transferee agrees
      in writing to be bound, with respect to the transferred Securities, by the
      provisions of the Transaction Documents that apply to the “Purchasers.”
Notwithstanding anything to the contrary herein, Securities may be assigned
      to
      any Person in connection with a bona fide margin account or other loan or
      financing arrangement secured by such Securities, provided such Person is an
      “accredited investor” as such term is defined in the rules and regulations under
      the Securities Act. 

     

    
      
        
        

      

      
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    5.8  No
      Third-Party Beneficiaries. This Agreement is intended for the benefit of the
      parties hereto and their respective successors and permitted assigns and is
      not
      for the benefit of, nor may any provision hereof be enforced by, any other
      Person, except as otherwise set forth in Section 4.9.

     

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

     

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

     

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

     

    
      
        
        

      

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

     

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

     

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

     

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

     

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

     

    
      
        
        

      

      
        31

        
          

        

      

      
        
        

      

    

     

    5.17  Independent
      Nature of Purchasers’ Obligations and Rights. The obligations of each
      Purchaser under any Transaction Document are several and not joint with the
      obligations of any other Purchaser, and no Purchaser shall be responsible in
      any
      way for the performance or non-performance of the obligations of any other
      Purchaser under any Transaction Document. Nothing contained herein or in any
      other Transaction Document, and no action taken by any Purchaser pursuant
      thereto, shall be deemed to constitute the Purchasers as a partnership, an
      association, a joint venture or any other kind of entity, or create a
      presumption that the Purchasers are in any way acting in concert or as a group
      with respect to such obligations or the transactions contemplated by the
      Transaction Documents. Each Purchaser shall be entitled to independently protect
      and enforce its rights, including without limitation, the rights arising out
      of
      this Agreement or out of the other Transaction Documents, and it shall not
      be
      necessary for any other Purchaser to be joined as an additional party in any
      proceeding for such purpose. Each Purchaser has been represented by its own
      separate legal counsel in their review and negotiation of the Transaction
      Documents. For reasons of administrative convenience only, Purchasers and their
      respective counsel have chosen to communicate with the Company through FWS.
      FWS
      does not represent all of the Purchasers but only Rodman & Renshaw, LLC, who
      has acted as placement agent to the transaction. The Company has elected to
      provide all Purchasers with the same terms and Transaction Documents for the
      convenience of the Company and not because it was required or requested to
      do so
      by the Purchasers.

     

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

     

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

     

    (Signature
      Pages Follow)

     

    
      
        
        

      

      
        32

        
          

        

      

      
        
        

      

    

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

     

    

    
      	
              LEV
                PHARMACEUTICALS, INC.

               

            	
              Address
                for Notice:

               

              Lev
                Pharmaceuticals, Inc.

              122
                East 42nd Street, Suite 2606

              New
                York, New York 10168

            
	
              By:__________________________________________

              Name:

              Title:

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

               

              Michael
                A. Goldstein, Esq.

              Goldstein
                & DiGioia, LLP

              45
                Broadway, 11th
                Floor 

              New
                York, NY 10006

            	 

    

    

    

    

    [REMAINDER
      OF PAGE INTENTIONALLY LEFT BLANK

    SIGNATURE
      PAGE FOR PURCHASER FOLLOWS]

     

    
      
        
        

      

      
        33

        
          

        

      

      
        
        

      

    

    [PURCHASER
      SIGNATURE PAGES TO SECURITIES PURCHASE AGREEMENT]

    

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

     

     

    
      	Name
              of
              Purchaser:	                                    
              
	Signature
              of Authorized Signatory of Purchaser:
              	                                           
              
	Name
              of
              Authorized Signatory: 	                                   
              
	Title
              of
              Authorized Signatory: 	                                 
              
	Email
              Address of Purchaser: 	                                 
              
	Fax
              Number of Purchaser:	                                     
              
	Address
              for Notice of Purchaser:	                                    
              

    

     

    

    

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

    

    

    Subscription
      Amount:

    Shares:

    Warrant
      Shares:

    EIN
      Number: [PROVIDE
      THIS UNDER SEPARATE COVER]

    

    

    [SIGNATURE
      PAGES CONTINUE]

    
      
        
        

      

      
        34

        
          

        

      

      
        
        

      

    

    Annex
      A 

    

    CLOSING
      STATEMENT

    

    Pursuant
      to the attached Securities Purchase Agreement, dated as of the date hereto,
      the
      purchasers shall purchase up to [$________ ] of Common Stock and Warrants from
      Lev Pharmaceuticals, Inc. (the “Company”).
      All
      funds will be wired into a trust account maintained by _______________, counsel
      to the Company. All funds will be disbursed in accordance with this Closing
      Statement. 

    

    Final
      Disbursement Date:

     

      
        

      

    

     

    
      	I.
              PURCHASE PRICE	 	 	 
	
              Gross
                Proceeds to be Received in Trust

            	 	
              $

            	
                     
                

            	 
	 	 	 	 	 
	
              II. DISBURSEMENTS

            	 	 	 	 
	
                   
                

            	 	 	 	 
	
                   
                

            	 	
              $

            	
                 
                

            	 

    

     

    
      	
            	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	
              Total
                Amount Disbursed:

            	 	 	 	 
	
            	 	 	 	 
	 	 	 	 	 
	
            	 	 	 	 
	
              WIRE
                INSTRUCTIONS:

            	 	 	 	 
	 	 	 	 	 
	AS
              PROVIDED BY RESPECTIVE PARTIES	 	 	 	 
	
              To:
                _____________________________________

            	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	
              To:
                _____________________________________

            	 	 	 	 

    

    

    
      
        
        

      

      
        35

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