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Securities Subscription Agreement

SECURITIES SUBSCRIPTION AGREEMENT

This Securities Subscription Agreement (this ?Agreement?) is dated as of July 11, 2006, among Marshall Edwards, 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 and Rule 506 promulgated thereunder, the Company desires to issue and sell to each Purchaser, and each Purchaser, severally and not jointly, desires to subscribe to and 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.

?Agreement? shall have the meaning ascribed to such term in the preamble.

?Agency Agreement? means the letter agreement dated May 22, 2006 between the Company and the Placement Agent.

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

?Closing Date? means the date of the Closing, which shall be a Trading Day within three business days of the date hereof, or on such later date or at such different location as the parties shall agree in writing.

?Commission? means the Securities and Exchange Commission.

?Common Stock? means the common stock of the Company, par value $0.00000002, and any other class of securities into which such shares may hereafter have been reclassified or changed.

?Common Stock Equivalents? means any securities of the Company which would entitle the holder thereof to acquire Common Stock at any time, including, without limitation, any debt, preferred shares, 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? shall have the meaning ascribed to such term in the preamble to this Agreement.

?Company Counsel? means Morgan Lewis & Bockius LLP.

?Discussion Time? shall have the meaning ascribed to such term in Section 3.2(f).

?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.

?Escrow Agreement? means the Escrow Agreement dated the date hereof between the Company, the Placement Agent and the Escrow Agent.

?Escrow Agent? means Janney Montgomery Scott LLC.

?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) Common Stock or options to employees, officers, directors or consultants of the Company pursuant to any share or option plan in existence on the date hereof or 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, (b) securities upon the exercise or exchange of or conversion of any Securities issued hereunder and/or securities exercisable or exchangeable for or convertible into Common Stock 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, except pursuant to antidilution provisions of such securities, (c) securities issued pursuant to acquisitions or strategic transactions, any such issuance shall only be to a Person which is, itself or through its subsidiaries, an operating company in a business synergistic with the business of the Company and in which the Company receives benefits in addition to the investment of funds, but shall not include a transaction in which the Company is issuing securities primarily for the purpose of raising capital or to an entity whose primary business is investing in securities, and (d) securities issued pursuant to an up to $15 million equity line of credit that may be entered into by the Company; provided that

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