Company may deem and treat the registered Holder of this Warrant as the absolute owner hereoffor the purpose of any exercise hereof or any distribution to the Holder, and for all otherpurposes, absent actual notice to the contrary.     3. List of Transfers; Restrictions on Transfer.     (a) This Warrant may be offered for sale, sold, transferred or assigned without the consent ofthe Company, except as may otherwise be required by Section 2(g) of the Purchase Agreement.     (b) The Company shall register any such transfer of all or any portion of this Warrant in theWarrant Register, upon surrender of this Warrant, with the Form of Assignment attached hereto dulycompleted and signed, to the Company at its address specified herein. Upon any such registrationor transfer, a new Warrant to purchase Common Stock, in substantially the form of this Warrant (inaccordance with Section 3(e)), evidencing the portion of this Warrant so transferred shall beissued to the transferee and a new Warrant evidencing the remaining portion of this Warrant not sotransferred, if any, shall be issued to the transferring Holder. The acceptance of the new Warrantby the transferee thereof shall be deemed the acceptance by such transferee of all of the rightsand obligations in respect of the new Warrant that the Holder has in respect of this Warrant.     (c) This Warrant is exchangeable, upon the surrender hereof by the Holder at the principaloffice of the Company, for a new Warrant or Warrants (in accordance with Section 3(e)) representingin the aggregate the right to purchase the number of Warrant Shares then underlying this Warrant,and each such new Warrant will represent the right to purchase such portion of such Warrant Sharesas is designated by the Holder at the time of such surrender; provided, however, no warrants forfractional shares of Common Stock shall be given.     (d) If, at the time of the surrender of this Warrant in connection with any transfer of thisWarrant, transfer of this Warrant shall not be registered pursuant to an effective registrationstatement under the Securities Act and under applicable state securities or blue sky laws, theCompany may require, as a condition of allowing such transfer (i) that the Holder or transferee ofthis Warrant, as the case may be, furnish to the Company a written opinion of counsel (whichopinion shall be in form, substance and scope customary for opinions of counsel in comparabletransactions) to the effect that such transfer may be made without registration under theSecurities Act and under applicable state securities or blue sky laws, (ii) that the holder ortransferee execute and deliver to the Company an investment letter in form and substance acceptableto the Company and (iii) that the transferee be an “accredited investor” as defined in Rule 501(a)promulgated under the Securities Act.     (e) Whenever the Company is required to issue a new Warrant pursuant to the terms of thisWarrant, such new Warrant (i) shall be of like tenor with this Warrant, (ii) shall represent, asindicated on the face of such new Warrant, the right to purchase the Warrant Shares then underlyingthis Warrant (or in the case of a new Warrant being issued pursuant to this Section 3 or Section 7,the Warrant Shares designated by the Holder which, when added to the number of shares of CommonStock underlying the other new Warrants issued in connection with such issuance, does not exceedthe number of Warrant Shares then underlying this Warrant), (iii) shall
2

 
have an issuance date, as indicated on the face of such new Warrant which is the same as theOriginal Issue Date, and (iv) shall have the same rights and conditions as this Warrant.     4. Exercise and Duration of Warrants.     (a) All or any part of this Warrant shall be exercisable by the registered Holder in anymanner permitted by Section 4 of this Warrant at any time and from time to time on or after theOriginal Issue Date and through and including the Expiration Date. Subject to Section 11 hereof,at 5:00 p.m., New York City time, on the Expiration Date, the portion of this Warrant not exercisedprior thereto shall be and become void and of no value and this Warrant shall be terminated and nolonger outstanding. In addition, if cashless exercise would be permitted under Section 4(c) ofthis Warrant, then all or part of this Warrant may be exercised by the registered Holder utilizingsuch cashless exercise provisions at any time, or from time to time, on or after the Original IssueDate and through and including the Expiration Date.     (b) The Holder may exercise this Warrant by delivering to the Company an exercise notice, inthe form attached hereto (the “**Exercise Notice**”), completed and duly signed. If suchHolder is not utilizing the cashless exercise provisions set forth in this Warrant, within one (1)Trading Day following an exercise of this Warrant as aforesaid, the Holder shall deliver payment tothe Company of an amount equal to the Exercise Price for the number of Warrant Shares as to whichthis Warrant is being exercised (the “**Aggregate Exercise Price**”). The date the ExerciseNotice is delivered to the Company (as determined in accordance with the notice provisions hereof)is an “**Exercise Date**.” The Holder shall not be required to deliver the original Warrant inorder to effect an exercise hereunder. Execution and delivery of the Exercise Notice shall havethe same effect as cancellation of the original Warrant and issuance of a New Warrant evidencingthe right to purchase the remaining number of Warrant Shares. Additionally, at the request of theHolder, if this Warrant shall have been exercised in part and the Holder shall have surrenderedthis Warrant certificate, the Company shall, at the time of delivery of the certificate orcertificates representing Warrant Shares, deliver to Holder a new Warrant evidencing the rights ofHolder to purchase the unpurchased Warrant Shares called for by this Warrant, which new Warrantshall in all other respects be identical with this Warrant.     (c) Notwithstanding anything contained herein to the contrary (other than Section 11 below),if at the time of exercise hereof, but not prior to six months after the Original Issue Date, aRegistration Statement (as defined in the Registration Rights Agreement (as defined in the PurchaseAgreement)) is not effective (or the prospectus contained therein is not available for use) for theresale by the Holder of all of the Warrant Shares, then the Holder may, in its sole discretion,exercise this Warrant in whole or in part and, in lieu of making the cash payment otherwisecontemplated to be made to the Company upon such exercise in payment of the Aggregate ExercisePrice, elect instead to receive upon such exercise the “Net Number” of shares of Common Stockdetermined according to the following formula (a “**Cashless Exercise**”):     Net Number = (A x B) - (A x C)         B  
3

 
               For purposes of the foregoing formula: A=   the total number of shares with respect to which this Warrantis then being exercised.  B=   as applicable: (i) the Closing Sale Price of the Common Stockon the Trading Day immediately preceding the date of the applicable ExerciseNotice if such Exercise Notice is (1) both executed and delivered pursuant toSection 4 hereof on a day that is not a Trading Day or (2) both executed anddelivered pursuant to Section 4 hereof on a Trading Day prior to the opening of“regular trading hours” (as defined in Rule 600(b)(64) of Regulation NMSpromulgated under the federal securities laws) on such Trading Day, (ii) theBid Price of the Common Stock as of the time of the Holder’s execution of theapplicable Exercise Notice if such Exercise Notice is executed during “regulartrading hours” on a Trading Day and is delivered within two (2) hoursthereafter pursuant to Section 4 hereof and (iii) the Closing Sale Price of theCommon Stock on the date of the applicable Exercise Notice if the date of suchExercise Notice is a Trading Day and such Exercise Notice is both executed anddelivered pursuant to Section 4 hereof after the close of “regular tradinghours” on such Trading Day.  C=   the Exercise Price then in effect for the applicable WarrantShares at the time of such exercise.     (d) In the case of a dispute as to the determination of the Exercise Price or the arithmeticcalculation of the number of Warrant Shares to be issued pursuant to the terms hereof, the Companyshall promptly issue to the Holder the number of Warrant Shares that are not disputed and resolvesuch dispute in accordance with Section 16.     5. Delivery of Warrant Shares.     (a) On or before the first (1st) Trading Day following the date on which theCompany has received an Exercise Notice, the Company shall transmit by facsimile or electronic mailan acknowledgment of confirmation of receipt of such Exercise Notice, to the Holder and theCompany’s transfer agent (the “**Transfer Agent**”). On or before the third (3rd)Trading Day following the date on which the Company has received such Exercise Notice, the Companyshall (X) provided that the Transfer Agent is participating in The Depository Trust Company(“**DTC**”) Fast Automated Securities Transfer Program and the Warrant Shares can be issuedwithout restrictive legends, upon the request of the Holder, credit such aggregate number of sharesof Common Stock to which the Holder is entitled pursuant to such exercise to the Holder’s or itsdesignee’s balance account with DTC through its Deposit/Withdrawal at Custodian system, or (Y) ifthe Transfer Agent is not participating in the DTC Fast Automated Securities Transfer Program orthe Warrant Shares cannot be issued without restrictive legends, issue and deliver to the Holderor, at the Holder’s instruction pursuant to the Exercise Notice, the Holder’s agent or designee, ineach case, sent by reputable overnight courier to the address as specified in the applicableExercise Notice, a certificate, registered in the Company’s share register in the name
4

 
of the Holder or its designee (as indicated in the applicable Exercise Notice), for the numberof shares of Common Stock to which the Holder is entitled pursuant to such exercise. Upon deliveryof an Exercise Notice, the Holder shall be deemed for all corporate purposes to have become theholder of record of the Warrant Shares with respect to which this Warrant has been exercised,irrespective of the date such Warrant Shares are credited to the Holder’s DTC account or the dateof delivery of the certificates evidencing such Warrant Shares (as the case may be). The Holder,or any Person permissibly so designated by the Holder to receive Warrant Shares, shall be deemed tohave become the holder of record of such Warrant Shares as of the Exercise Date. Notwithstandingthe foregoing, except in the case where an exercise of this Warrant is validly made pursuant to acashless exercise, the Company’s failure to deliver Warrant Shares to the Holder on or prior to thelater of (x) the close of the third Trading Day after delivery of an Exercise Notice and (y) theTrading Day in which the Company’s receives the Aggregate Exercise Price (such later date, the“**Share Delivery Deadline**”) shall not be deemed to be a breach of this Warrant.     (b) If by the Share Delivery Deadline, the Company fails to deliver to the Holder acertificate representing the required number of Warrant Shares in the manner required pursuant toSection 5(a), and if after such third Trading Day and prior to the receipt of such Warrant Shares,the Holder purchases (in an open market transaction or otherwise) shares of Common Stock to deliverin satisfaction of a sale by the Holder of the Warrant Shares which the Holder anticipatedreceiving upon such exercise (a “**Buy-In**”), then the Company shall, within three TradingDays after the Holder’s request and in the Holder’s sole discretion, either (i) pay in cash to theHolder an amount equal to the Holder’s total purchase price (including brokerage commissions, ifany) for the shares of Common Stock so purchased (the “**Buy-In Price**”), at which point theCompany’s obligation to deliver such certificate (and to issue such Warrant Shares) shall terminateor (ii) promptly honor its obligation to deliver to the Holder a certificate or certificatesrepresenting such shares of Common Stock or credit the Holder’s balance account with DTC for thenumber of shares of Common Stock to which the Holder is entitled upon the Holder’s exercisehereunder (as the case may be) and pay cash to the Holder in an amount equal to the excess (if any)of the Buy-In Price over the product of (A) such number of shares of Common Stock times (B) theClosing Sale Price of the Common Stock on the Trading Day immediately preceding the date of theapplicable Exercise Notice.     (c) To the extent permitted by law, the Company’s obligations to issue and deliver WarrantShares in accordance with the terms hereof are absolute and unconditional, irrespective of anyaction or inaction by the Holder to enforce the same, any waiver or consent with respect to anyprovision hereof, the recovery of any judgment against any Person or any action to enforce thesame, or any setoff, counterclaim, recoupment, limitation or termination, or any breach or allegedbreach by the Holder or any other Person of any obligation to the Company or any violation oralleged violation of law by the Holder or any other Person, and irrespective of any othercircumstance that might otherwise limit such obligation of the Company to the Holder in connectionwith the issuance of Warrant Shares. Nothing herein shall limit a Holder’s right to pursue anyother remedies available to it hereunder, at law or in equity including, without limitation, adecree of specific performance and/or injunctive relief with respect to the Company’s failure totimely deliver certificates representing shares of Common Stock upon exercise of the Warrant asrequired pursuant to the terms hereof.
5

 
     6. Charges, Taxes and Expenses. Issuance and delivery of certificates for shares ofCommon Stock upon exercise of this Warrant shall be made without charge to the Holder for any issueor transfer tax, withholding tax, transfer agent fee or other incidental tax or expense in respectof the issuance of such certificates, all of which taxes and expenses shall be paid by the Company;*provided, however*, that the Company shall not be required to pay any tax that may be payable inrespect of any transfer involved in the registration of any certificates for Warrant Shares orWarrants in a name other than that of the Holder. The Holder shall be responsible for all othertax liability that may arise as a result of holding or transferring this Warrant or receivingWarrant Shares upon exercise hereof.     7. Replacement of Warrant. If this Warrant is mutilated, lost, stolen or destroyed,the Company shall issue or cause to be issued in exchange and substitution for and uponcancellation hereof, or in lieu of and substitution for this Warrant, a new Warrant (in accordancewith Section 3(e)), but only upon receipt of evidence reasonably satisfactory to the Company ofsuch loss, theft or destruction and customary and reasonable indemnity (which shall not include asurety bond), if requested. Applicants for a new Warrant under such circumstances shall alsocomply with such other reasonable regulations and procedures and pay such other reasonablethird-party costs as the Company may prescribe. If a new Warrant is requested as a result of amutilation of this Warrant, then the Holder shall deliver such mutilated Warrant to the Company asa condition precedent to the Company’s obligation to issue the new Warrant.     8. Reservation of Warrant Shares. The Company covenants that it will at all timesreserve and keep available out of the aggregate of its authorized but unissued and otherwiseunreserved Common Stock, solely for the purpose of enabling it to issue Warrant Shares uponexercise of this Warrant as herein provided, the number of Warrant Shares that are then issuableand deliverable upon the exercise of this entire Warrant, free from preemptive rights or any othercontingent purchase rights of persons other than the Holder (taking into account the adjustmentsand restrictions of Section 9). The Company covenants that all Warrant Shares so issuable anddeliverable shall, upon issuance and the payment of the applicable Exercise Price in accordancewith the terms hereof, be duly and validly authorized, issued and fully paid and nonassessable. If,notwithstanding the foregoing, and not in limitation thereof, at any time while any of the Warrantsremain outstanding the Company does not have a sufficient number of authorized and unreservedshares of Common Stock to satisfy its obligation to reserve for issuance upon exercise of theWarrants at least a number of shares of Common Stock equal to the number of shares of Common Stockas shall from time to time be necessary to effect the exercise of all of the Warrants thenoutstanding (the “**Required Reserve Amount**”, and such reservation failure, an“**Authorized Share Failure**”), then the Company shall promptly take all action necessary toincrease the Company’s authorized shares of Common Stock to an amount sufficient to allow theCompany to reserve the Required Reserve Amount for all the Warrants then outstanding. Withoutlimiting the generality of the foregoing sentence, as soon as practicable after the date of theoccurrence of an Authorized Share Failure, but in no event later than sixty (60) days after theoccurrence of such Authorized Share Failure, the Company shall hold a meeting of its stockholdersfor the approval of an increase in the number of authorized shares of Common Stock. In connectionwith such meeting, the Company shall provide each stockholder with a proxy statement and shall useits best efforts to solicit its stockholders’ approval of such increase in authorized shares ofCommon Stock and to cause its board of directors to recommend to the stockholders that they approvesuch proposal.
6

 
     9. Certain Adjustments. The Exercise Price and number of Warrant Shares issuable uponexercise of this Warrant are subject to adjustment from time to time as set forth in this Section9.     (a) Stock Dividends and Splits. If the Company, at any time while this Warrant isoutstanding, (i) pays a stock dividend on its Common Stock or otherwise makes a distribution on anyclass of capital stock that is payable in shares of Common Stock, (ii) subdivides (by any stocksplit, stock dividend, recapitalization or otherwise) outstanding shares of Common Stock into alarger number of shares, or (iii) combines (by combination, reverse stock split or otherwise)outstanding shares of Common Stock into a smaller number of shares, then in each such case theExercise Price shall be multiplied by a fraction of which the numerator shall be the number ofshares of Common Stock outstanding immediately before such event and of which the denominator shallbe the number of shares of Common Stock outstanding immediately after such event. Any adjustmentmade pursuant to clause (i) of this paragraph shall become effective immediately after the recorddate for the determination of stockholders entitled to receive such dividend or distribution, andany adjustment pursuant to clause (ii) or (iii) of this paragraph shall become effectiveimmediately after the effective date of such subdivision or combination. If any event requiring anadjustment under this paragraph occurs during the period that an Exercise Price is calculatedhereunder, then the calculation of such Exercise Price shall be adjusted appropriately to reflectsuch event.     (b) Pro Rata Distributions. If the Company, at any time while this Warrant isoutstanding, distributes to all holders of Common Stock for no consideration (i) evidences of itsindebtedness, (ii) any security (other than a distribution of Common Stock covered by Section9(a)), (iii) rights or warrants to subscribe for or purchase any security, or (iv) any other asset(in each case, “**Distributed Property**”), then, upon any exercise of this Warrant that occursafter the record date fixed for determination of stockholders entitled to receive suchdistribution, the Holder shall be entitled to receive, in addition to the Warrant Shares otherwiseissuable upon such exercise (if applicable) (without regard to any limitations on exercise hereof,including without limitation, the Maximum Percentage), the Distributed Property that such Holderwould have been entitled to receive in respect of such number of Warrant Shares had the Holder beenthe record holder of such Warrant Shares immediately prior to such record date (provided, however,to the extent that the issuance of any Distributed Property would result in the Holder exceedingthe Maximum Percentage, then the Holder shall not be entitled to receive such Distributed Propertyto such extent (or the beneficial ownership of any such shares of Common Stock as a result ofissuance of Distributed Property to such extent) and the Holder’s right to receive such DistributedProperty to such extent shall be held in abeyance for the benefit of the Holder until such time, ifever, as its right thereto would not result in the Holder exceeding the Maximum Percentage).     (c) Fundamental Transactions. If, at any time while this Warrant is outstanding (i)the Company effects any merger or consolidation of the Company with or into another Person, inwhich the shareholders of the Company as of immediately prior to the transaction own less than amajority of the outstanding stock of the surviving entity, (ii) the Company effects any sale of allor substantially all of its assets in one or a series of related transactions, (iii) any tenderoffer or exchange offer (whether by the Company or another Person) is completed pursuant to whichholders of Common Stock are permitted to tender or exchange their shares for other securities,
7

 
cash or property, or (iv) the Company effects any reclassification of the Common Stock or anycompulsory share exchange pursuant to which the Common Stock is effectively converted into orexchanged for other securities, cash or property (each, a “**Fundamental Transaction**”), thenthe Holder shall have the right thereafter to receive, upon exercise of this Warrant, the sameamount and kind of securities, cash or property as it would have been entitled to receive upon theoccurrence of such Fundamental Transaction if it had been, immediately prior to such FundamentalTransaction, the holder of the number of Warrant Shares then issuable upon exercise in full of thisWarrant (the “**Alternate Consideration**”). The Company shall not effect any such FundamentalTransaction unless prior to or simultaneously with the consummation thereof, any successor to theCompany, surviving entity or the corporation purchasing or otherwise acquiring such assets or otherappropriate corporation or entity shall assume the obligation to deliver to the Holder, suchAlternate Consideration as, in accordance with the foregoing provisions, the Holder may be entitledto purchase, and the other obligations under this Warrant. The provisions of this paragraph (c)shall similarly apply to subsequent transactions analogous to a Fundamental Transaction.     (d) Number of Warrant Shares. Simultaneously with any adjustment to the ExercisePrice pursuant to paragraphs (a) and (b) of this Section 9, the number of Warrant Shares that maybe purchased upon exercise of this Warrant shall be increased or decreased proportionately, so thatafter such adjustment the aggregate Exercise Price payable hereunder for the adjusted number ofWarrant Shares shall be the same as the aggregate Exercise Price in effect immediately prior tosuch adjustment.     (e) Calculations. All calculations under this Section 9 shall be made to the nearestcent or the nearest 1/100th of a share, as applicable. The number of shares of Common Stockoutstanding at any given time shall not include shares owned or held by or for the account of theCompany, and the disposition of any such shares shall be considered an issue or sale of CommonStock.     (f) Notice of Adjustments. Upon the occurrence of each adjustment pursuant to thisSection 9, the Company at its expense will, at the written request of the Holder, promptly computesuch adjustment in accordance with the terms of this Warrant and prepare a certificate settingforth such adjustment, including a statement of the adjusted Exercise Price and adjusted number ortype of Warrant Shares or other securities issuable upon exercise of this Warrant (as applicable),describing the transactions giving rise to such adjustments and showing in detail the facts uponwhich such adjustment is based. Upon written request, the Company will promptly deliver a copy ofeach such certificate to the Holder and to the Company’s Transfer Agent.     (g) Notice of Events. The Company will give written notice to the Holder at least two(2) days prior to the date on which the Company closes its books or takes a record (A) with respectto any dividend or distribution upon the shares of Common Stock, or (B) for determining rights tovote with respect to any Fundamental Transaction, dissolution or liquidation. Notwithstanding theforegoing, the failure deliver such notice or any defect therein shall not affect the validity ofthe corporate action required to be described in such notice. To the extent that any noticeprovided hereunder constitutes, or contains, material, non-public information regarding the Company(including its subsidiaries), the Company shall simultaneously file such notice with the SEC (asdefined in the Purchase Agreement) pursuant to a Current Report on
8

 
Form 8-K. It is expressly understood and agreed that the time of execution specified by theHolder in each Exercise Notice shall be definitive and may not be disputed or challenged by theCompany.     10. Payment of Exercise Price. The Holder shall pay the Exercise Price by deliveringimmediately available funds to the Company unless the Holder has specified a “Cashless Exercise” inthe applicable Exercise Notice.     11. Limitations on Exercise. Notwithstanding anything to the contrary contained inthis Warrant, this Warrant shall not be exercisable by the Holder (other than Bai Feng) hereof tothe extent (but only to the extent) that such Holder or any of its affiliates would beneficiallyown in excess of 4.9% (the “**Maximum Percentage**”) of the Common Stock. To the extent the abovelimitation applies, the determination of whether this Warrant shall be exercisable (vis-à-vis otherconvertible, exercisable or exchangeable securities owned by the Holder or any of its affiliates)and of which such securities shall be exercisable (as among all such securities owned by theHolder) shall, subject to such Maximum Percentage limitation, be determined on the basis of thefirst submission to the Company for conversion, exercise or exchange (as the case may be). No priorinability to exercise this Warrant pursuant to this paragraph shall have any effect on theapplicability of the provisions of this paragraph with respect to any subsequent determination ofexercisability. For the purposes of this paragraph, beneficial ownership and all determinations andcalculations (including, without limitation, with respect to calculations of percentage ownership)shall be determined in accordance with Section 13(d) of the 1934 Act (as defined in the PurchaseAgreement) and the rules and regulations promulgated thereunder. The provisions of this paragraphshall be implemented in a manner otherwise than in strict conformity with the terms of thisparagraph to correct this paragraph (or any portion hereof) which may be defective or inconsistentwith the intended Maximum Percentage beneficial ownership limitation herein contained or to makechanges or supplements necessary or desirable to properly give effect to such Maximum Percentagelimitation. The limitations contained in this paragraph shall apply to a successor Holder of thisWarrant. The holders of Common Stock shall be third party beneficiaries of this paragraph and theCompany may not waive this paragraph without the consent of holders of a majority of its CommonStock. For any reason at any time, upon the written or oral request of the Holder, the Companyshall within one (1) Business Day confirm orally and in writing to the Holder the number of sharesof Common Stock then outstanding, including by virtue of any prior conversion or exercise ofconvertible or exercisable securities into Common Stock, including, without limitation, pursuant tothis Warrant or securities issued pursuant to the Purchase Agreement. For any reason at any time,upon the written or oral request of the Holder, the Company shall within one (1) Business Dayconfirm orally and in writing to the Holder the number of shares of Common Stock then outstanding,including by virtue of any prior conversion or exercise of convertible or exercisable securitiesinto Common Stock, including, without limitation, pursuant to this Warrant or securities issuedpursuant to the Purchase Agreement.     12. No Fractional Shares. No fractional Warrant Shares will be issued in connectionwith any exercise of this Warrant. In lieu of any fractional shares that would otherwise beissuable, the Company shall pay cash equal to the product of such fraction multiplied by theClosing Bid Price of one Warrant Share on the applicable Exercise Date.
9

 
     13. Notices. Any and all notices or other communications or deliveries hereunder(including, without limitation, any Exercise Notice) shall be in writing and shall be deemed givenand effective on the earliest of (i) upon confirmation of receipt, if such notice or communicationis delivered via facsimile or electronic mail at the facsimile number or e-mail address specifiedin this Section at or prior to 5:00 p.m. (New York City time) on a Trading Day (providedconfirmation of transmission is mechanically or electronically generated and kept on file by thesending party), (ii) the next Trading Day after the date of confirmation of receipt, if such noticeor communication is delivered via facsimile or electronic mail at the facsimile number or e-mailaddress specified in this Section on a day that is not a Trading Day or later than 5:00 p.m. (NewYork City time) on any Trading Day (provided confirmation of transmission is mechanically orelectronically generated and kept on file by the sending party), (iii) the Trading Day followingthe date of mailing, if sent by nationally recognized overnight courier service, or (iv) uponactual receipt by the party to whom such notice is required to be given. The addresses for suchnotices or communications shall be: if to the Company, to Emisphere Technologies, Inc., 240 CedarKnolls Road, Suite 200, Cedar Knolls, New Jersey 07927. Attention: Chief Financial Officer,Facsimile No.: (973) 532-8121, e-mail address: mgarone@emisphere.com (or such other address as theCompany shall indicate in writing in accordance with this Section) or (ii) if to the Holder, to theaddress, facsimile number or e-mail address appearing on the Warrant Register (or such otheraddress as the Company shall indicate in writing in accordance with this Section).     14. Warrant Agent. The Company shall serve as warrant agent under this Warrant. Upon30 days’ notice to the Holder, the Company may appoint a new warrant agent. Any corporation intowhich the Company or any new warrant agent may be merged or any corporation resulting from anyconsolidation to which the Company or any new warrant agent shall be a party or any corporation towhich the Company or any new warrant agent transfers substantially all of its corporate trust orshareholders services business shall be a successor warrant agent under this Warrant without anyfurther act. Any such successor warrant agent shall promptly cause notice of its succession aswarrant agent to be mailed (by first class mail, postage prepaid) to the Holder at the Holder’slast address as shown on the Warrant Register.     15. Noncircumvention. The Company hereby covenants and agrees that the Company willnot, by amendment of its Articles of Incorporation, as amended, its Bylaws as amended or throughany reorganization, transfer of assets, consolidation, merger, scheme of arrangement, dissolution,issue or sale of securities, or any other voluntary action, avoid or seek to avoid the observanceor performance of any of the terms of this Warrant, and will at all times in good faith carry outall the provisions of this Warrant and take all action as may be required to protect the rights ofthe Holder. Without limiting the generality of the foregoing, the Company (i) shall not increasethe par value of any shares of Common Stock receivable upon the exercise of this Warrant above theExercise Price then in effect, (ii) shall take all such actions as may be necessary or appropriatein order that the Company may validly and legally issue fully paid and nonassessable shares ofCommon Stock upon the exercise of this Warrant, and (iii) shall, so long as any of the Warrants areoutstanding, take all action necessary to reserve and keep available out of its authorized andunissued shares of Common Stock, solely for the purpose of effecting the exercise of the Warrants,the maximum number of shares of Common Stock as shall from time to time be necessary to effect theexercise of the Warrants then outstanding (without regard to any limitations on exercise).
10

 
     16. Dispute Resolution. In the case of a dispute as to the determination of theExercise Price, the Closing Bid Price, the Closing Sale Price, the Bid Price or fair market valueor the arithmetic calculation of the number of Warrant Shares (as the case may be), the Company orthe Holder (as the case may be) shall submit the disputed determinations or arithmetic calculations(as the case may be) via facsimile (i) within two (2) Business Days after receipt of the applicablenotice giving rise to such dispute to the Company or the Holder (as the case may be) or (ii) if nonotice gave rise to such dispute, at any time after the Holder learned of the circumstances givingrise to such dispute. If the Holder and the Company are unable to agree upon such determination orcalculation (as the case may be) of the Exercise Price, the Closing Bid Price, the Closing SalePrice, the Bid Price or fair market value or the number of Warrant Shares (as the case may be)within three (3) Business Days of such disputed determination or arithmetic calculation beingsubmitted to the Company or the Holder (as the case may be), then the Company shall, within two (2)Business Days submit via facsimile (a) the disputed determination of the Exercise Price, theClosing Bid Price, the Closing Sale Price, the Bid Price or fair market value (as the case may be)to an independent, reputable investment bank selected by the Company and approved by the Holder or(b) the disputed arithmetic calculation of the number of Warrant Shares to the Company’sindependent, outside accountant. The Company shall cause the investment bank or the accountant (asthe case may be) to perform the determinations or calculations (as the case may be) and notify theCompany and the Holder of the results no later than ten (10) Business Days from the time itreceives such disputed determinations or calculations (as the case may be). Such investment bank’sor accountant’s determination or calculation (as the case may be) shall be binding upon all partiesabsent demonstrable error. If a disputed determination or arithmetic calculation is submitted tothe investment bank or the accountant (as the case may be) pursuant to this Section 16, then theprevailing party in such determination or calculation shall be reimbursed by the other party forits costs and expenses (including any and all fees and expenses charged by the investment back oraccountant) incurred in connection with the determination or calculation (as the case may be).     17. Remedies, Characterization, Other Obligations, Breaches and Injunctive Relief. Theremedies provided in this Warrant shall be cumulative and in addition to all other remediesavailable under this Warrant and the other Transaction Documents, at law or in equity (including adecree of specific performance and/or other injunctive relief), and nothing herein shall limit theright of the Holder to pursue actual damages for any failure by the Company to comply with theterms of this Warrant. The Company covenants to the Holder that there shall be no characterizationconcerning this instrument other than as expressly provided herein. Amounts set forth or providedfor herein with respect to payments, exercises and the like (and the computation thereof) shall bethe amounts to be received by the Holder and shall not, except as expressly provided herein, besubject to any other obligation of the Company (or the performance thereof). The Companyacknowledges that a breach by it of its obligations hereunder will cause irreparable harm to theHolder and that the remedy at law for any such breach may be inadequate. The Company thereforeagrees that, in the event of any such breach or threatened breach, the holder of this Warrant shallbe entitled, in addition to all other available remedies, to an injunction restraining any breach,without the necessity of showing economic loss and without any bond or other security beingrequired. The Company shall provide all information and documentation to the Holder that isrequested by the Holder that is reasonably necessary to enable the Holder to confirm the Company’scompliance with the terms and conditions of this Warrant. The issuance of shares and certificatesfor shares as contemplated
11

 
hereby upon the exercise of this Warrant shall be made without charge to the Holder or suchshares for any issuance tax or other costs in respect thereof, provided that the Company shall notbe required to pay any tax which may be payable in respect of any transfer involved in the issuanceand delivery of any certificate in a name other than the Holder or its agent on its behalf.     18. Miscellaneous.     (a) This Warrant shall be binding on and inure to the benefit of the parties hereto and theirrespective successors and assigns. Subject to the preceding sentence, nothing in this Warrantshall be construed to give to any Person other than the Company and the Holder any legal orequitable right, remedy or cause of action under this Warrant. This Warrant may be amended only inwriting signed by the Company and the Holder, or their successors and assigns. No waiver shall beeffective unless it is in writing and signed by an authorized representative of the waiving party.     (b) This Warrant shall be governed by and construed and enforced in accordance with, and allquestions concerning the construction, validity, interpretation and performance of this Warrantshall be governed by, the internal laws of the State of New York, without giving effect to anychoice of law or conflict of law provision or rule (whether of the State of New York or any otherjurisdictions) that would cause the application of the laws of any jurisdictions other than theState of New York. The parties hereby irrevocably submits to the exclusive jurisdiction of thestate and federal courts sitting in The City of New York, Borough of Manhattan, for theadjudication of any dispute hereunder or in connection herewith or with any transactioncontemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert inany suit, action or proceeding, any claim that it is not personally subject to the jurisdiction ofany such court, that such suit, action or proceeding is brought in an inconvenient forum or thatthe venue of such suit, action or proceeding is improper. Nothing contained herein shall be deemedto limit in any way any right to serve process in any manner permitted by law. **THE PARTIES HEREBYIRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THEADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS WARRANT OR ANYTRANSACTION CONTEMPLATED HEREBY.**     (c) If any provision of this Warrant is prohibited by law or otherwise determined to beinvalid or unenforceable by a court of competent jurisdiction, the provision that would otherwisebe prohibited, invalid or unenforceable shall be deemed amended to apply to the broadest extentthat it would be valid and enforceable, and the invalidity or unenforceability of such provisionshall not affect the validity of the remaining provisions of this Warrant so long as this Warrantas so modified continues to express, without material change, the original intentions of theparties as to the subject matter hereof and the prohibited nature, invalidity or unenforceabilityof the provision(s) in question does not substantially impair the respective expectations orreciprocal obligations of the parties or the practical realization of the benefits that wouldotherwise be conferred upon the parties. The parties will endeavor in good faith negotiations toreplace the prohibited, invalid or unenforceable provision(s) with a valid provision(s), the effectof which comes as close as possible to that of the prohibited, invalid or unenforceableprovision(s).
12

 
     (d) The headings herein are for convenience only, do not constitute a part of this Warrant andshall not be deemed to limit or affect any of the provisions hereof.     (e) In case any one or more of the provisions of this Warrant shall be invalid orunenforceable in any respect, the validity and enforceability of the remaining terms and provisionsof this Warrant shall not in any way be affected or impaired thereby and the parties will attemptin good faith to agree upon a valid and enforceable provision which shall be a commerciallyreasonable substitute therefore, and upon so agreeing, shall incorporate such substitute provisionin this Warrant.     (f) Prior to exercise of this Warrant, the Holder hereof shall not, by reason of by being aHolder, be entitled to any rights of a stockholder with respect to the Warrant Shares.     19. Certain Definitions. For purposes of this Warrant, the following terms shall havethe following meanings:     (a) “**Bid Price**” means, for any security as of the particular time of determination, the bidprice for such security on the Principal Market as reported by Bloomberg as of such time ofdetermination, or, if the Principal Market is not the principal securities exchange or tradingmarket for such security, the bid price of such security on the principal securities exchange ortrading market where such security is listed or traded as reported by Bloomberg as of such time ofdetermination, or if the foregoing does not apply, the bid price of such security in theover-the-counter market on the electronic bulletin board for such security as reported by Bloombergas of such time of determination, or, if no bid price is reported for such security by Bloomberg asof such time of determination, the average of the bid prices of any market makers for such securityas reported in the “pink sheets” by Pink Sheets LLC (formerly the National Quotation Bureau, Inc.)as of such time of determination. If the Bid Price cannot be calculated for a security as of theparticular time of determination on any of the foregoing bases, the Bid Price of such security asof such time of determination shall be the fair market value as mutually determined by the Companyand the Holder. If the Company and the Holder are unable to agree upon the fair market value ofsuch security, then such dispute shall be resolved in accordance with the procedures in Section 16.All such determinations shall be appropriately adjusted for any stock dividend, stock split, stockcombination or other similar transaction during such period.     (b) “**Bloomberg**” means Bloomberg, L.P.     (c) “**Business Day**” means any day other than Saturday, Sunday or other day on which commercialbanks in The City of New York are authorized or required by law to remain closed.     (d) “**Closing Bid Price**” and “**Closing Sale Price**” means, for any security as of any date, thelast closing bid price and last closing trade price, respectively, for such security on thePrincipal Market, as reported by Bloomberg, or, if the Principal Market begins to operate on anextended hours basis and does not designate the closing bid price or the closing trade price (asthe case may be) then the last bid price or last trade price, respectively, of such security priorto 4:00:00 p.m., New York time, as reported by Bloomberg, or, if the Principal Market is not theprincipal securities exchange or trading market for such security, the last closing bid price orlast
13

 
trade price, respectively, of such security on the principal securities exchange or tradingmarket where such security is listed or traded as reported by Bloomberg, or if the foregoing do notapply, the last closing bid price or last trade price, respectively, of such security in theover-the-counter market on the electronic bulletin board for such security as reported byBloomberg, or, if no closing bid price or last trade price, respectively, is reported for suchsecurity by Bloomberg, the average of the bid prices, or the ask prices, respectively, of anymarket makers for such security as reported in the “pink sheets” by Pink Sheets LLC (formerly theNational Quotation Bureau, Inc.). If the Closing Bid Price or the Closing Sale Price cannot becalculated for a security on a particular date on any of the foregoing bases, the Closing Bid Priceor the Closing Sale Price (as the case may be) of such security on such date shall be the fairmarket value as mutually determined by the Company and the Holder. If the Company and the Holderare unable to agree upon the fair market value of such security, then such dispute shall beresolved in accordance with the procedures in Section 16. All such determinations shall beappropriately adjusted for any stock dividend, stock split, stock combination or other similartransaction during such period.     (e) “**Common Stock**” means (i) the Company’s shares of common stock, $0.01 par value per share,and (ii) any capital stock into which such common stock shall have been changed or any sharecapital resulting from a reclassification of such common stock.     (f) “**Eligible Market**” means The New York Stock Exchange, the NYSE Amex, the Nasdaq GlobalSelect Market, the Nasdaq Global Market, the Nasdaq Capital Market, the Principal Market.     (g) “**Expiration Date**” means the date that is the fifth (5th) anniversary of theOriginal Issue Date or, if such date falls on a day other than a Business Day or on which tradingdoes not take place on the Principal Market (a “**Holiday**”), the next date that is not a Holiday.     (h) “**Parent Entity**” of a Person means an entity that, directly or indirectly, controls theapplicable Person and whose common stock or equivalent equity security is quoted or listed on anEligible Market, or, if there is more than one such Person or Parent Entity, the Person or ParentEntity with the largest public market capitalization as of the date of consummation of theFundamental Transaction.     (i) “**Person**” means an individual, a limited liability company, a partnership, a joint venture,a corporation, a trust, an unincorporated organization, any other entity or a government or anydepartment or agency thereof.     (j) “**Principal Market**” means the OTC Bulletin Board.     (k) “**Successor Entity**” means the Person (or, if so elected by the Holder, the Parent Entity)formed by, resulting from or surviving any Fundamental Transaction or the Person (or, if so electedby the Holder, the Parent Entity) with which such Fundamental Transaction shall have been enteredinto.     (l) “**Trading Day**” means any day on which the Common Stock is traded on the Principal Market,or, if the Principal Market is not the principal trading market for the Common Stock, then on theprincipal securities exchange or securities market on which the Common
14

 
Stock is then traded, provided that “Trading Day” shall not include any day on which theCommon Stock is scheduled to trade on such exchange or market for less than 4.5 hours or any daythat the Common Stock is suspended from trading during the final hour of trading on such exchangeor market (or if such exchange or market does not designate in advance the closing time of tradingon such exchange or market, then during the hour ending at 4:00:00 p.m., New York time) unless suchday is otherwise designated as a Trading Day in writing by the Holder and the Company.     (m) “**Voting Stock**” of a Person means capital stock of such Person of the class or classespursuant to which the holders thereof have the general voting power to elect, or the general powerto appoint, at least a majority of the board of directors, managers or trustees of such Person(irrespective of whether or not at the time capital stock of any other class or classes shall haveor might have voting power by reason of the happening of any contingency).[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK,