Prepared and filed by St Ives Burrups





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EXHIBIT 4.1

    

VOID AFTER 5:00 P.M., NEW YORK
  CITY

  TIME, ON MARCH 31, 2008

   (UNLESS EXTENDED PURSUANT
  TO SECTION 2 HEREOF)
  

  THIS WARRANT AND THE SHARES ISSUABLE UPON EXERCISE
    OF THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
    AS AMENDED (THE “SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY
    STATE OF THE UNITED STATES OR ANY OTHER JURISDICTION. THE SECURITIES REPRESENTED
    HEREBY MAY NOT BE OFFERED, SOLD OR TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE
    REGISTRATION STATEMENT FOR THE SECURITIES UNDER APPLICABLE SECURITIES LAWS
    UNLESS OFFERED, SOLD OR TRANSFERRED PURSUANT TO AN AVAILABLE EXEMPTION FROM
    THE REGISTRATION REQUIREMENTS OF THOSE LAWS.


 

Right to Purchase 2,666,667 Shares
  of

  Common Stock, par value $.001 per share

Date: March 31, 2003

ORCHID BIOSCIENCES, INC.

  STOCK PURCHASE WARRANT

THIS CERTIFIES THAT, for value received, SDS Merchant Fund,
LP, or its
registered assigns, is entitled to purchase from Orchid BioSciences, Inc., a
corporation organized under the laws of the State of Delaware
(the “Company”), at any time or from time to time
during the period specified in Section 2 hereof, 2,666,667 fully paid and
 nonassessable shares of the Company’s common stock, par value $.001
 per share (the “Common Stock”), at an exercise price per
 share (the “Exercise Price”) equal to $0.45.
 The number of shares of Common Stock purchasable hereunder (the
 “Warrant Shares”) and the Exercise Price are
  subject to adjustment as provided in Section 4 hereof.  The
   term “Warrants” means this Warrant and the
   other warrants of the Company issued pursuant to that certain Securities
    Purchase Agreement, dated as of March 31, 2003, by and among the
Company and the other signatories thereto (the “Securities
Purchase Agreement”).









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  This Warrant is subject to the following terms, provisions and conditions:
  

  1. Manner of Exercise; Issuance of Certificates;
    Payment for Shares. Subject to the provisions hereof, including, without
    limitation, the limitations contained in Section 7 hereof, this Warrant may
    be exercised by the holder hereof, in whole or in part, by the surrender of
    this Warrant, together with a completed exercise agreement in the form attached
    hereto (the “Exercise Agreement”), to the Company during
    normal business hours on any business day at the Company’s principal
    executive offices (or such other office or agency of the Company as it may
    designate by notice to the holder hereof), and (i) payment to the Company
    in cash, by certified or offi­cial bank check or by wire transfer for
    the account of the Company, of the Exercise Price for the Warrant Shares specified
    in the Exercise Agreement or (ii) if the holder is effectuating a Cashless
    Exercise (as defined in Section 11(c) hereof) pursuant to Section 11(c) hereof,
    delivery to the Company of a written notice of an election to effect a Cashless
    Exercise for the Warrant Shares specified in the Exercise Agreement. The Warrant
    Shares so purchased shall be deemed to be issued to the holder hereof or such
    holder’s designee, as the record owner of such shares, as of the close
    of business on the date on which this Warrant shall have been surrendered,
    the completed Exercise Agreement shall have been delivered, and payment shall
    have been made for such shares as set forth above or, if such date is not
    a business date, on the next succeeding business date. The Warrant Shares
    so purchased, representing the aggregate number of shares specified in the
    Exercise Agreement, shall (by the Company or through its transfer agent) be
    delivered (i.e., deposited with a nationally-recognized overnight courier
    service postage prepaid) to the holder hereof within a reasonable time, not
    exceeding two business days, after this Warrant shall have been so exercised
    (the “Delivery Period”). If the Company’s transfer agent
    is participating in the Depository Trust Company (“DTC”)
    Fast Automated Securities Transfer program, and so long as the certificates
    therefor do not bear a legend (pursuant to the terms of the Securities Purchase
    Agreement) and the holder is not obligated to return such certificate for
    the placement of a legend thereon (pursuant to the terms of the Securities
    Purchase Agreement), the Company shall cause its transfer agent to electronically
    transmit the Warrant Shares so purchased to the holder by crediting the account
    of the holder or its nominee with DTC through its Deposit Withdrawal Agent
    Commission system (“DTC Transfer”). If the aforementioned
    conditions to a DTC Transfer are not satisfied, the Company shall deliver
    as provided herein to the holder physical certificates representing the Warrant
    Shares so purchased. Further, the holder may instruct the Company to deliver
    to the holder physical certificates representing the Warrant Shares so purchased
    in lieu of delivering such shares by way of DTC Transfer. Any certificates
    so delivered shall be in such denominations as may be reasonably requested
    by the holder hereof, shall be registered in the name of such holder or such
    other name as shall be designated by such holder and, following the date on
    which the Warrant Shares have been registered under the Securities Act pursuant
    to that certain Registration Rights Agreement, dated as of March 31, 2003,
    by and between the Company and the other signatories thereto (the “Registration
    Rights Agreement”) or otherwise may be sold by the holder pursuant
    to Rule 144(k) promulgated under the Securities Act (or a successor rule),
    shall not bear any restrictive legend. If this Warrant shall have been exercised
    only in part, then the Company shall, at its expense, at the time of delivery
    of such certificates, deliver to the holder a new Warrant representing the
    number of shares with respect to which this Warrant shall not then have been
    exercised.

  If, at any time, a holder of this Warrant submits
    this Warrant, an Exercise Agreement and payment to the Company of the Exercise
    Price for each of the Warrant Shares specified in the Exercise Agreement (including
    pursuant to a Cashless Exercise), and the Company fails for any reason to
    deliver, on or prior to the fourth business day following the expiration of
    the Delivery Period for such exercise, the number of shares of Common Stock
    to which the holder is entitled upon such exercise (an “Exercise
    Default”), then the Company shall pay to the holder payments (“Exercise
    Default Payments”) for an Exercise Default in the amount of (a)
    (N/365), multiplied by (b) the amount by which the Market Price (as defined
    in Section 4(j) hereof) on the date the Exercise Agreement giving rise to
    the Exercise Default is delivered and payment shall have been made in accordance
    with this Section 1 (the “Exercise Default Date”) exceeds
    the Market Price in respect of such Warrant Shares on the date that the Company
    effects full exercise of the Warrant in accordance with the previously-transmitted
    Exercise Agreement, multiplied by (c) the number of shares of Common Stock
    the Company failed to so deliver in such Exercise Default, multiplied by (d)
    .15. For these purposes, N = the number of days from the Exercise Default
    Date on the date that the Company effects the full exercise of this Warrant
    which gave rise to the Exercise Default. The accrued Exercise Default Payment
    for each calendar month shall be paid in cash and shall be made to holder
    by the fifth day of the month following the month in which it has accrued.
    Nothing herein shall limit the holder’s right to pursue actual damages
    for the Company’s failure to maintain a sufficient number of authorized
    shares of Common Stock as required pursuant to the terms of Section 3(b) hereof
    or to otherwise issue shares of Common Stock upon exercise of this Warrant
    in accordance with the terms hereof, and the holder shall have the right to
    pursue all remedies available at law or in equity (including a decree of specific
    performance and/or injunctive relief).



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2.   Period of Exercise.  This Warrant shall be exercisable
 at any time or from time to time during the period beginning on the date (the “Commencement
 Date”) one year from the date of initial issuance of this Warrant (the “Issue
  Date”) and ending at 5:00 p.m., New York City time, on the fourth anniversary of the
  Commencement Date (the “Exercise Period”).  The Exercise Period shall
  automatically be extended by one (1) day for each day during the Exercise Period (or any
  extension thereof) on which the Company does not have a number of shares of Common Stock
  reserved for issuance upon exercise hereof at least equal to the number of shares of Common
   Stock issuable upon exercise hereof.


3.   Certain Agreements of the Company.  The Company hereby
 covenants and agrees as follows:




(a)   Shares to be Fully Paid.  All Warrant Shares will,
 upon issuance in accordance with the terms of this Warrant, be validly issued, fully paid,
  and nonassessable and free from all taxes, liens, claims and encumbrances.


(b)   Reservation of Shares.
During the Exercise Period, the Company shall at all times have authorized, and reserved
for the purpose of issuance upon exercise of this Warrant, a sufficient number of shares
of Common Stock to provide for the exercise in full of this Warrant (without giving effect
 to the limitations on exercise set forth in Section 7(g) hereof).


(c)   Listing.  The Company shall have filed
 a Notification Form: Listing of Additional Shares with respect to the Common Shares and the Warrant
 Shares with the Nasdaq National Market (“NNM”) on or before the Closing
 (as defined in the Securities Purchase Agreement), and shall maintain, so long as any other
 shares of Common Stock shall be so listed, such listing of all shares of Common Stock from
 time to time issuable upon the exercise of this Warrant; and the Company shall so list on
  each national securities exchange or automated quotation system, as the case may be, and
  shall maintain such listing of, any other shares of capital stock of the Company issuable
  upon the exercise of this Warrant if and so long as any shares of the same class shall be
  listed on such national securities exchange or automated quotation system.




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(d)   Certain Actions Prohibited.
 The Company will not, by amendment of its charter 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 to be observed or performed by it hereunder, but will at all times in good faith
  assist in the carrying out of all the provisions of this Warrant and in the taking of all
   such action as may reasonably be requested by the holder of this Warrant in order to protect
    the economic benefit inuring to the holder hereof and the exercise privilege of the holder
 of this Warrant against dilu­tion or other impairment, consistent with the tenor and
 purpose of this Warrant.  Without limiting the general­ity of the foregoing, the
 Company (i) will not increase the par value of any shares of Common Stock receivable
 upon the exercise of this Warrant above the Exercise Price then in effect, and (ii)
  will take all such actions as may be necessary or appropriate in order that the
   Company may validly and legally issue fully paid and nonassessable shares of
   Common Stock upon the exercise of this Warrant.


(e)   Successors and Assigns.  This Warrant
will be binding upon any entity succeeding to the Company by merger, consolidation,
 or acquisition of all or sub­stantially all of the Company’s assets.


(f)   Blue Sky Laws.  The Company shall,
on or before the date of issuance of any Warrant Shares, take such actions as the Company shall
reasonably determine are necessary to qualify the Warrant Shares for, or obtain exemption for the
Warrant Shares for, sale to the holder of this Warrant upon the exercise hereof under applicable
securities or “blue sky” laws of the states of the United States, and shall provide
evidence of any such action so taken to the holder of this Warrant prior to such date if requested
 by the holder hereof; provided, however, that the Company shall not be required in connection
 therewith or as a condition thereto to (a) qualify to do business in any jurisdiction where it
  would not otherwise be required to qualify but for this Section 3(f), (b) subject itself to
   general taxation in any such jurisdiction or (c) file a general consent to service of process
   in any such jurisdiction.



4.    Antidilution Provisions.  During
the Exercise Period, the Exercise Price and the number of Warrant Shares issuable hereunder
shall be subject to adjustment from time to time as provided in this Section 4.

In the event that any adjustment
 of the Exercise Price as required herein results in a fraction of a cent, such Exercise Price
 shall be rounded up or down to the nearest cent.



(a)   Subdivision or
 Combination of Common Stock.  If the Company, at any time during the Exercise Period, subdivides
 (by any stock split, stock dividend, recapitalization, reorganization, reclassification or otherwise)
  its shares of Common Stock into a greater number of shares, then, after the date of record for
   effecting such subdivision, the Exercise Price in effect immediately prior to such subdivision
   will be proportionately reduced.  If the Company, at any time during the Exercise Period,
   combines (by reverse stock split, recapitalization, reorganization, reclassification or otherwise)
   its shares of Common Stock into a smaller number of shares, then, after the date of record for
    effecting such combination, the Exercise Price in effect immediately prior to such combination
will be proportionately increased.

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(b)    Adjustment in Number of Shares.
Upon each adjustment of the Exercise Price pursuant to the provisions of this Section 4, the number
of shares of Common Stock issuable upon exercise of this Warrant at each such Exercise Price shall
be adjusted by multiplying a number equal to the Exercise Price in effect immediately prior to such
 adjustment by the number of shares of Common Stock issuable upon exercise of this Warrant at such
 Exercise Price immediately prior to such adjustment and dividing the product so obtained by the
 adjusted Exercise Price.


(c)    Consolidation, Merger or Sale.  In case of any consolidation of the Company with, or merger of the Company into, any other corporation, or in case of any sale or conveyance of all or substantially all of the assets of the Company other than in connection with a plan of complete liquidation of the Company at any time during the Exercise Period, then as a condition of such consolidation, merger or sale or conveyance, adequate provision will be made whereby the holder hereof will have the right to acquire and receive upon exercise of this Warrant in lieu of the shares of Common Stock immediately theretofore acquirable upon the exercise of this Warrant, such shares of stock, securities, cash or assets as may be issued or payable with respect to or in exchange for the number of shares of Common Stock immediately theretofore acquirable and receivable upon exercise of this Warrant had such consolidation, merger or sale or conveyance not taken place.  In an

y such case, the Company will make appropriate provision to insure that the provisions of
 this Section 4 hereof will thereafter be applicable as nearly as may be in relation to
 any shares of stock or securities thereafter deliverable upon the exercise of this Warrant.
  The Company will not effect any consolidation, merger or sale or conveyance unless prior
   to the consummation thereof, the successor corporation (if other than the Company)
    assumes by written instrument the obligations under this Warrant and the obligations
to deliver to the holder hereof such shares of stock, securities or assets as, in
 accordance with the foregoing provisions, the holder may be entitled to acquire.


(d)    Distribution of Assets.  In case the Company shall declare or make any distribution of its assets (or rights to acquire its assets) to holders of Common Stock as a partial liquidating dividend, stock repurchase by way of return of capital or otherwise (including any dividend or distribution to the Company’s stockholders of cash or shares (or rights to acquire shares) of capital stock of a subsidiary) (a “Distribution”), at any time during the Exercise Period, then the holder hereof shall be entitled upon exercise of this Warrant for the purchase of any or all of the shares of Common Stock subject hereto, to receive the amount of such assets (or rights) which would have been payable to the holder had such holder been the holder of such shares of Common Stock on the record date for the determination of stockholders entitled to such Distribution.  If the Company distributes rights, warrants, options or any other form of convertible se
curities and the right to exercise or convert such securities would expire in accordance
 with their terms prior to the expiration of the Exercise Period, then the terms of such
 securities shall provide that such exercise or convertibility right shall remain in effect
  until 30 days after the date the holder hereof receives such securities pursuant to the
   exercise hereof.


(e)    Notice of Adjustment.  Upon the occurrence
 of any event which requires any adjustment of the Exercise Price, then, and in each such case,
  the Company shall give notice thereof to the holder hereof, which notice shall state the Exercise
   Price resulting from such adjustment and the increase or decrease in the number of Warrant
   Shares purchasable at such price upon exercise, setting forth in reasonable detail the method
   of calculation and the facts upon which such calculation is based.  Such calculation shall be
    certified by the chief financial officer of the Company.



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(f)    Minimum Adjustment of Exercise Price.
 No adjustment of the Exercise Price shall be made in an amount of less than $.01, but any such
 lesser adjustment shall be carried forward and shall be made at the time and together with the
 next subsequent adjustment which, together with any adjustments so carried forward, shall amount
 to not less than $.01.


(g)    No Fractional Shares.
No fractional shares of Common Stock are to be issued upon the exercise of this Warrant,
 but the Company shall pay a cash adjustment in respect of any fractional share which would
 otherwise be issuable in an amount equal to the same fraction of the Market Price of a share
 of Common Stock on the date of such exercise.


(h)    Other Notices.  In case
at any time:



(i)    the Company shall declare any
 dividend upon the Common Stock payable in shares of stock of any class or make any other
  distribution (other than dividends or distributions payable in cash out of retained earnings
   consistent with the Company’s past practices with respect to declaring dividends and
    making distributions) to the holders of the Common Stock;


(ii)    the Company shall offer for
subscription pro rata to the holders of the Common Stock any additional shares of
stock of any class or other rights;


(iii)    there shall be any capital
reorganiza­tion of the Company, or reclassification of the Common Stock, or consolidation
or merger of the Company with or into, or sale of all or substantially all of its assets to,
another corporation or entity; or


(iv)    there shall be a voluntary or
involuntary dissolution, liquidation or winding-up of the Company;



then, in each such case, the Company shall give
  to the holder of this Warrant (a) notice of the date or estimated date on which
  the books of the Company shall close or a record shall be taken for determining
  the holders of Common Stock entitled to receive any such dividend, distribution,
  or subscription rights or for determining the holders of Common Stock entitled
  to vote in respect of any such reorganization, reclassification, consolidation,
  merger, sale, dissolution, liquidation or winding-up and (b) in the case
  of any such reorganization, reclassification, consolidation, merger, sale, dissolution,
  liquidation or winding-up, notice of the date (or, if not then known, a
  reasonable estimate thereof by the Company) when the same shall take place.
  Such notice shall also specify the date on which the holders of Common Stock
  shall be entitled to receive such dividend, distribution, or subscription rights
  or to exchange their Common Stock for stock or other securities or property
  deliverable upon such reorganization, reclassification, consolidation, merger,
  sale, dissolution, liqui­dation, or winding-up, as the case may be.
  Such notice shall be given at least ten (10) days prior to the record date or
  the date on which the Company’s books are closed in respect thereto. Failure
  to give any such notice or any defect therein shall not affect the validity
  of the proceedings referred to in clauses (i), (ii), (iii) and (iv) above. Notwithstanding
  the foregoing, the Company shall publicly disclose the substance of any notice
  delivered hereunder prior to delivery of such notice to the holder hereof.

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(i)    Certain Events.  If, at any time during the Exercise Period, any event occurs of the type contemplated by the adjustment provisions of this Section 4 but not expressly provided for by such provisions, the Company will give notice of such event as provided in Section 4(e) hereof, and an appropriate adjustment in the Exercise Price and the number of shares of Common Stock acquirable upon exercise of this Warrant at each such Exercise Price shall be made so that the rights of the holder shall be neither enhanced nor
 diminished by such event.


(j)    Certain Definitions.  



(i)    “Certificate of Designation” means
that certain Certificate of Designations, Preferences and Rights relating to the Series A
Convertible Preferred Stock of the Company, filed with the Secretary of State of the State
of Delaware as of the date hereof.


(ii)    “Common Stock,” for purposes
of this Section 4, includes the Common Stock and any additional class of stock of the Company
having no preference as to dividends or distributions on liquidation, provided that the shares
 purchasable pursuant to this Warrant shall include only Common Stock in respect of which this
  Warrant is exercisable, or shares resulting from any subdivision or combination of such Common
   Stock, or in the case of any reorganization, reclassification, consolidation, merger, or
   sale of the character referred to in Section 4(c) hereof, the stock or other securities
   or property provided for in such Section.


(iii)    “Market Price,” as of any date, (i) means the average of the closing sales prices for the shares of Common Stock on the Nasdaq National Market or other trading market where such security is listed or traded as reported by Bloomberg Financial Markets (or a comparable reporting service of national reputation selected by the Company and reasonably acceptable to the holders if Bloomberg Financial Markets is not then reporting sales prices of such security)(collectively, “Bloomberg”) for the five (5) consecutive trading days immediately preceding such date, or (ii) if the Nasdaq National Market is not the principal trading market for the shares of Common Stock, the average of the reported sales prices reported by Bloomberg on the principal trading market for the Common Stock during the same period, or, if there is no sales price for such period, the last sales price reported by Bloomberg for such period, or (iii) if the foregoing do no
t apply, the last sales price of such security in the over-the-counter market on the pink
 sheets or bulletin board for such security as reported by Bloomberg, or if no sales price is
 so reported for such security, the last bid price of such security as reported by Bloomberg,
  or (iv) if market value cannot be calculated as of such date on any of the foregoing bases,
   the Market Price shall be the average fair market value as reasonably determined by an
    investment banking firm selected by the Company and reasonably acceptable to the holder,
 with the costs of the appraisal to be borne by the Company.  The manner of determining
 the Market Price of the Common Stock set forth in the foregoing definition shall apply
 with respect to any other security in respect of which a determination as to market value
  must be made hereunder.



5.    Issue Tax.  The issuance of
certificates for Warrant Shares upon the exercise of this Warrant shall be made without charge
to the holder of this Warrant or such shares for any issuance tax or other costs in respect thereof,
 provided that the Company shall not be required to pay any tax which may be payable in respect of
  any transfer involved in the issuance and delivery of any certificate in a name other than the holder
   of this Warrant.



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6.    No Rights or Liabilities as a Stockholder.  This Warrant shall not entitle the holder hereof to any voting rights or other rights as a stockholder of the Company.  No provision of this Warrant, in the absence of affirmative action by the holder hereof to purchase Warrant Shares, and no mere enumeration herein of the rights or privileges of the holder hereof, shall give rise to any liability of such holder for the Exercise Price or as a stockholder of the Company, whether such liability is asserted by the Company or by creditors of the Company.


7.    Transfer, Exchange and Replacement of Warrant.



(a)    Restriction on Transfer.  This Warrant and the rights granted to the holder hereof are transferable, in whole or in part, upon surrender of this Warrant, together with a properly executed assignment in the form attached hereto, at the office or agency of the Company referred to in Section 7(e) below, pro­vided, however, that any transfer or assignment shall be subject to the conditions set forth in Sections 7(f) and (g) hereof and to the provisions of Sections 2(f) and 2(g) of the Securities Purchase Agreement, provided further, that this Warrant and the rights granted to the holder hereof are not transferable to direct competitors of the Company or persons or entities that have announced plans to compete directly with the Company.  Until due presentment for registration of transfer on the books of the Company, the Company may treat the registered holder hereof as the owner and holder hereof for all purposes, a

nd the Company shall not be affected by any notice to the con­trary.  Notwithstanding anything to the contrary contained herein, the registration rights described in Section 8 hereof are assignable only in accordance with the provisions of the Registration Rights Agreement. 


(b)    Warrant Exchangeable for Different Denomina­tions.  This Warrant is exchange­able, upon the surrender hereof by the holder hereof at the office or agency of the Company referred to in Section 7(e) below, for new warrants of like tenor of different denominations representing in the aggregate the right to purchase the number of shares of Common Stock which may be purchased hereunder, each of such new warrants to represent the right to purchase such number of shares (at the Exercise Price therefor) as shall be designated by the holder hereof at the time of such surrender, and all such warrants thereafter constituting the Warrant referenced herein.  Notwithstanding the foregoing, in no event shall the Company be required to issue new warrants pursuant to this Section 7(b) for the right to purchase less than 1,000 shares of Common Stock.


(c)    Replacement of Warrant.  Upon receipt of evi­dence reasonably satisfactory to the Company of the loss, theft, destruction, or mutilation of this Warrant and, in the case of any such loss, theft, or destruc­tion, upon delivery of an indemnity agreement reason­ably satisfactory in form and amount to the Company, or, in the case of any such mutilation, upon surrender and cancellation of this Warrant, the Company, at its expense, will execute and deliver, in lieu thereof, a new Warrant of like tenor.


(d)    Cancellation; Payment of Expenses.  Upon the surrender of this Warrant in connection with any trans­fer, exchange, or replacement as provided in this Section 7, this Warrant shall be promptly canceled by the Company.  The Company shall pay all taxes (other than securities transfer taxes) and all other expenses (other than legal expenses, if any, incurred by the Holder or transferees) and charges payable in connection with the preparation, execution, and delivery of any Warrant pursuant to
this Section 7.

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(e)    Warrant Register.  The Company shall maintain, at its principal executive offices (or such other office or agency of the Company as it may designate by notice to the holder hereof), a register for this Warrant, in which the Company shall record the name and address of the person in whose name this Warrant has been issued, as well as the name and address of each transferee and each prior owner of this Warrant.


(f)    Exercise or Transfer Without Registration.  If, at the time of the surrender of this Warrant in connection with any exercise, transfer, or exchange of this Warrant, this Warrant (or, in the case of any exercise, the Warrant Shares issuable hereunder), shall not be registered under the Securities Act and under applicable state securities or blue sky laws, the Com­pany may require, as a condition of allowing such exercise, transfer, or exchange, (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 and reasonably acceptable to the Company) to the effect that such exercise, transfer, or exchange 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) promulgated under the Securities Act; provided that no such opinion, letter, or status as an “accredited investor” shall be required in connection with a transfer pursuant to Rule 144 under the Securities Act. 


(g)    Additional Restrictions on Exercise or Transfer.  In no event shall the holder hereof have the right to exercise any portion of this Warrant for shares of Common Stock or to dispose of any portion of this Warrant to the extent that such right to effect such exercise or disposition would result in the holder or any of its affiliates together beneficially owning more than the greater of (a) 4.99% of the outstanding shares of Common Stock or (b) that percentage of the outstanding shares of Common Stock held by such holder and its affiliates immediately prior to the Issue Date (including in such calculation any shares of Common Stock underlying warrants to purchase Common Stock (other than this Warrant) held by such holder immediately prior to the Issue Date).  For purposes of this Section 7(g), beneficial ownership shall be determined in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended, and Regulation 13D-G thereunder.

The restriction contained in this Section 7(g) may not be altered, amended, deleted or changed in any manner whatsoever unless the holders of a majority of the outstanding shares of Common Stock and the holder hereof shall approve, in writing, such alteration, amendment, deletion or change.



8.    Registration Rights.  The initial holder of this Warrant (and certain assignees thereof) is entitled to the benefit of such registration rights in respect of the Warrant Shares as are set forth in the Registration Rights Agreement, including the right to assign such rights to certain assignees, as set forth therein.


9.    Notices.  Any notices required or permitted to be given under the terms of this Warrant shall be sent by certified or registered mail (return receipt requested) or delivered personally or by courier or by confirmed telecopy, and shall be effective five days after being placed in the mail, if mailed, or upon receipt or refusal of receipt, if delivered personally or by courier, or by confirmed telecopy, in each case addressed to a party.
 The addresses for such communications shall be:


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If to the Company:

  

  Orchid BioSciences, Inc.

 4390 US Route One North

  Princeton, NJ 08540

  Telephone: (609) 750-2200

  Fax: (609) 750-6400

  Attn: Chief Financial Officer

  


with a copy simultaneously transmitted by like means to:

Mintz, Levin, Cohn, Ferris, Glovsky and Popeo,
  P.C.

 One Financial Center

 Boston, MA 02111

 Telephone: (617) 542-6000

 Fax: (617) 542-2241

 Attn: John J. Cheney, III, Esq.



If to the holder, at such address as such holder shall have provided in writing to the Company, or at such other address as such holder furnishes by notice given in accordance with this Section 9.


  10.    Governing Law; Jurisdiction.
    This Warrant shall be governed by and construed in accordance with the laws
    of the State of Delaware. Each of the Company and the holder hereof irrevocably
    consents to the jurisdiction of the United States federal courts and state
    courts located in the State of Delaware in any suit or proceeding based on
    or arising under this Warrant and irrevocably agrees that all claims in respect
    of such suit or proceeding may be determined in such courts. Each of the Company
    and the holder hereof irrevocably waives any objection to the laying of venue
    and the defense of an inconvenient forum to the maintenance of such suit or
    proceeding. Each of the Company and the holder hereof further agrees that
    service of process mailed by certified or registered mail shall be deemed
    in every respect effective service of process in any such suit or proceeding.
    Nothing herein shall affect the Company’s or the holder’s right
    to serve process in any other manner permitted by law. Each of the Company
    and the holder hereof agrees that a final non-appealable judgment in any such
    suit or proceeding shall be conclusive and may be enforced in other jurisdictions
    by suit on such judgment or in any other lawful manner.


11.    Miscellaneous.



(a)    Amendments.  Except as provided in Section 7(g) hereof, this Warrant and any provision hereof may only be amended by an instrument in writing signed by the Company and
the holder hereof.

(b)    Descriptive Headings.  The descriptive head­ings of the several Sections
of this Warrant are inserted for purposes of reference only, and shall not affect the meaning or
construction of any of the provisions hereof.


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(c)    Cashless Exercise.  This Warrant may be exercised at any time after the first anniversary of the Commencement Date and before the expiration of the Exercise Period by presentation and surrender of this Warrant to the Company at its principal executive offices with a written notice of the holder’s intention to effect a cashless exercise, including a calculation of the number of shares of Common Stock to be issued upon such exercise in accordance with the terms hereof (a “Cashless Exercise”).  In the event of a Cashless Exercise, in lieu of paying the Exercise Price in cash, the holder shall surrender this Warrant for that number of shares of Common Stock determined by multiplying the number of Warrant Shares to which it would otherwise be entitled by a fraction, the numerator of which shall be the difference between the then current Market Price of a share of the Common Stock on the date of exerci
se and the Exercise Price, and the denominator of which shall be the then current Market Price per share of Common Stock.


(d)    Trading Day.  For purposes of this Warrant, the term “trading day” means any day on which the principal United States securities exchange or trading market where the Common Stock is then listed is open for trading. 


(e)    Redemption of Warrant by Company.  



(i)    Provided that (x) all shares of Common Stock issuable upon exercise of the Warrants are then (A) authorized and reserved for issuance, (B) registered under the Securities Act of 1933, as amended, for resale by the holders of the Warrants, and (C) eligible to be traded on a National Securities Market (as defined in the Certificate of Designation), (y) all of the Required Conditions (as defined in the Certificate of Designation) are satisfied, and (z) the Company has undergone a Change of Control Event (as defined in the Certificate of Designation) within the 30-day period immediately prior to the delivery by the Company of a Redemption Notice (as defined below), the Company, or if the Company is not the surviving entity in such Change of Control Event, such other entity that has assumed the obligations hereunder (for purposes of this Section 11(e) only, the (“Company”) may elect, upon delivery of at least thirty (30)
 days’ prior written notice (the “Redemption Notice”) to the holder hereof,
to redeem all of the Warrant for a redemption amount equal to the number
of Warrant Shares issuable upon the exercise of all of this Warrant multiplied
by a value per warrant using the Black-Scholes model of valuation, using,
the Exercise Price, 50% volatility, and an interest rate of 5%
(the “Redemption Amount”).


(ii)    The Company may not deliver a Notice
 of Redemption unless on or prior to the date of delivery of a Notice of Redemption, the
 Company shall have segregated on the books and records of the Company an amount of cash
 sufficient to pay all amounts to which holders of the Warrants that are being redeemed are
 entitled pursuant to Section 11(e)(i).  Any Notice of Redemption delivered shall be irrevocable
 and shall be accompanied by a statement executed by a duly authorized officer of the Company.


(iii)    The Redemption Amount shall be paid to
the holder within three (3) business days of the date of redemption set forth in the Notice
of Redemption; provided, however, that the Company shall not be obligated to deliver any portion
of the Redemption Amount until either this Warrant is delivered to the Company or the holder
notifies the Company that the Warrant has been lost, stolen or destroyed and delivers the
documentation in accordance with Section 7(c) hereof.  In the event only a portion of this
Warrant is being redeemed, the Company shall issue , at its expense, a new Warrant representing
the number of shares with respect to which this Warrant shall not then have been redeemed or
exercised.



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(iv)    Notwithstanding the delivery of a Redemption
Notice, the holder may exercise all or a portion of this Warrant subject to such Redemption Notice
 by the delivery prior to the date of redemption set forth in such notice of an Exercise Agreement
 pursuant to the procedures set forth in Section 1.



(f)    Indemnification by Company.


(i)    The Company shall hold harmless and indemnify
the holder of this Warrant from and against, and shall compensate and reimburse such holder for,
any damages which are directly or indirectly suffered or incurred by such holder or to which such
holder may otherwise become subject (regardless of whether or not such damages relate to any
third-party claim) and which arise from or as a result of, or are directly or indirectly
connected with any breach of any of the Company’s covenants set forth herein.


(ii)    In the event of the assertion or commencement by any person of any claim or legal proceeding with respect to which the holder may have indemnification rights pursuant to this Section 11(f)(i), the holder shall promptly notify the Company thereof in writing, but the failure to so notify the Company will not limit the holder’s rights to indemnification hereunder, except to the extent the Company demonstrates that the defense of such action is prejudiced by the failure to so give such notice.   Within a reasonable time of receipt of such notice, the Company may at its election participate at its own expense in the defense of such claim or assume the defense of any such claim with counsel chosen by the Company; provided, however, that if the defendants in any such action include such holder and the Company and the holder shall have been advised by its counsel that there may be legal defenses available to the holder which are different from or add
itional to and in conflict with or present a potential conflict with those available to the Company,
 such holder shall have the right to employ its own counsel in such action, and in such event the
 reasonable fees and expenses of such counsel shall be borne by the Company.  If the Company assumes
  the defense of such claim and no conflict exists permitting the holder to retain separate counsel
   pursuant to the immediately preceding sentence, the Company shall have no obligation to pay any
    fees or expenses of any counsel retained the holder or any other person entitled to
indemnification hereunder in connection with such a claim.  The holder shall not settle
any claim in respect of which indemnification shall be sought hereunder without the
 prior written consent of the Company. The Company shall not be liable for any settlement
 of any action, claim, suit or proceeding (or for any related losses, damages, liabilities,
 costs or expenses) if such settlement is effectuated without its written consent, which
 shall not be unreasonably withheld.



[Remainder of page left blank.]

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


    

	 	 ORCHID BIOSCIENCES, INC.
	 	 	 	 
	 	 	 	 
	 	By:	
	

	 	 	Name:	Andrew P. Savadelis
	 	 	Title:	Sr. Vice President, Finance and Chief
	 	 	 	 Financial Officer



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FORM
  OF EXERCISE AGREEMENT

(To
  be Executed by the Holder in order to Exercise the Warrant)



  

	To: 	Orchid BioSciences, Inc. 
	 	 
	 	 
	 	 Telephone: (609) 750-2200

	 	Attn: Chief Financial Officer



  The undersigned hereby irrevocably exercises the right to
    purchase _____________ shares of the Common Stock of Orchid BioSciences, Inc.,
    a corporation organized under the laws of the State of Delaware (the “Company”),
    evidenced by the attached Warrant, and herewith [makes payment of the Exercise
    Price with respect to such shares in full][elects to effect a Cashless Exercise
    (as defined in Section 11(c) of such Warrant], all in accordance with the
    conditions and provisions of said Warrant.




  The undersigned agrees not to offer, sell, transfer
    or otherwise dispose of any Common Stock obtained on exercise of the Warrant,
    except under circumstances that will not result in a violation of the Securities
    Act of 1933, as amended, or any state securities laws. The undersigned represents
    that it is an “accredited investor” as that term is defined in
    Rule 501(a) of Regulation D under the Securities Act of 1933, as amended.
    



		 The undersigned requests that the Company
      cause its transfer agent to electronically transmit the Common Stock issuable
      pursuant to this Exercise Agreement to the account of the undersigned or
      its nominee (which is _________________) with DTC through its Deposit Withdrawal
      Agent Commission System (“DTC Transfer”), provided that
      such transfer agent participates in the DTC Fast Automated Securities Transfer
      program.
	 	 
		In lieu of receiving the shares of Common
      Stock issuable pursuant to this Exercise Agreement by way of DTC Transfer,
      the undersigned hereby requests that the Company cause its transfer agent
      to issue and deliver to the undersigned physical certificates representing
      such shares of Common Stock.



  The undersigned requests that a Warrant representing any unexercised
    portion hereof be issued, pursuant to the Warrant, in the name of the Holder
    and delivered to the undersigned at the address set forth below:



	Dated: 
        

      
	

	 	Signature of
        Holder

	 	 
	 	 
	 	

	 	Name of Holder
        (Print)

	 	 
	 	 
	 	

	 	Address:

	 	 
	 	

	 	

	 	



 







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FORM OF ASSIGNMENT


  FOR VALUE RECEIVED, the undersigned hereby sells,
    assigns, and transfers all the rights of the undersigned under the within
    Warrant, with respect to the number of shares of Common Stock covered thereby
    set forth hereinbelow, to:



	Name of Assignee	Address	No. of Shares


 



, and hereby irrevocably constitutes and appoints _____________________________________ as agent and attorney-in-fact to trans­fer said Warrant on the books of the within-named corporation, with full power of substitution in the premises.

	Dated:	 	 
	
	, 	

	In the presence of	 	 
	 	 	 
	
	 	 



  	Name:
	




  




  	Signature: 
         

	
          

        

	Title of Signing Officer or Agent (if any):
	 

	
          

        

	Address: 
        

	
          

        

	 
	
          

        

	 





	Note:	 The above signature should correspond exactly

        with the name on the face of the within Warrant.





 






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Schedule of Other Investors to Whom
  this Form of

  Warrant was Issued (per Instruction 2
  to Item 601 of Reg. S-K)

 

	Investor	 Number of Shares for

        which Warrant is exercisable

	BayStar Capital II, L.P.	2,000,000

	DMG Legacy Fund LLC	300,000

	DMG Legacy Institutional Fund LLC	2,790,000

	DMG Legacy International Ltd.	2,910,000

	SCO Capital Partners LLC	300,000

	Paul A. Scharfer	200,000