Ex-4.5 Cancelable Warrant Agreement



 





EXHIBIT 4.5




CANCELABLE WARRANT AGREEMENT




     This Cancelable Warrant Agreement (this “Agreement”) is entered into as of
September 8, 2003, by and between SinoFresh HealthCare, Inc., a Delaware
corporation (the “Company”), and Dave Macrae Trust (the “Holder”).



W I T N E S S E T H:




     WHEREAS, the Company proposes to issue to the Holder warrants to purchase
up to an aggregate of six hundred sixty-seven thousand (667,000) shares of
common stock of the Company (a “Warrant” or the “Warrants”); and



     WHEREAS, the Warrants to be issued pursuant to this Agreement shall be
issued in consideration of Eight Hundred Thousand Dollars ($800,000).



     NOW, THEREFORE, in consideration of the premises hereto and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto hereby agree as follows:



     1. Grant. Except as otherwise provided herein, the Holder is hereby
granted the right to purchase, at any time from September 1, 2003 (“Effective
Date”), until 5:30 P.M., Pacific Standard time, on August 31, 2004 (the
“Expiration Date”), up to an aggregate of Six Hundred Sixty-Seven Thousand
(667,000) shares of common stock (the “Warrant Securities”) (subject to
adjustment as provided in Section 8 hereof) at the initial Exercise Price (as
hereinafter defined in Section 6) (subject to the terms and conditions of this
Agreement). Any Warrant that is not exercised on or prior to the Expiration
Date shall be void and all rights hereunder shall cease.




	 	a.	 	Grant Price. Warrants consisting of the right to
purchase 667,000 shares of common stock at $5.00 per share may
be purchased for $800,000 ($1.20 per underlying share of
common stock).
	 
	 	b.	 	Post-Merger Capitalization. The table reflecting
the post-merger capitalization of SinoFresh Corp., a Florida
corporation (“SinoFresh”), is attached hereto as Exhibit B
(the “Post-Merger Capitalization Table”). The Warrants issued
to the Holder pursuant to this Agreement are included in the
Post-Merger Capitalization Table.






	 	(i)	 	Upon the closing of the share
exchange between the Company and SinoFresh (the
“Closing”), the Warrants issued to the Holder pursuant
to this Agreement shall, simultaneously with the
Closing, be converted into warrants to purchase common
stock of SinoFresh on terms identical to those set forth
in this Agreement.






	 	c.	 	2004 Warrant Agreement and Grant Price. In the
event that the Warrants granted pursuant to this Agreement are
not exercised prior to the




 









 







	 	 	 	Expiration Date, on the Expiration Date1, (i) this Agreement
shall be cancelled, and (ii) the Company shall enter into a
new warrant agreement with the Holder, substantially in the
form of the warrant agreement attached hereto as
Exhibit C2
(the “2004 Warrant Agreement”), pursuant to which the Holder
shall be granted the right to purchase 667,000 shares of
common stock of SinoFresh at $5.00 per share in exchange for
$667 ($.001 per underlying share of common stock).





     2. Warrant Certificates. The warrant certificates (the “Warrant
Certificates”) delivered and to be delivered pursuant to this Agreement shall
be in the form set forth in Exhibit A attached hereto and made a part hereof,
with such appropriate insertions, omissions, substitutions and other variations
as required or permitted by this Agreement.



     3. Exercise of Warrant.



          3.1 Method of Exercise. The Warrants are exercisable at the Exercise
Price. Payment of the Exercise Price of the Warrant Shares being purchased
shall be made by cash or by check. Upon surrender of a Warrant Certificate with
a duly executed Election to Purchase (in the form of Annex A to the Warrant
Certificate), Holder shall be entitled to receive a certificate or certificates
for the shares of Warrant Securities so purchased. The purchase rights
represented by each Warrant Certificate are exercisable at the option of the
Holder thereof, in whole or in part (but not as to fractional shares of the
Warrant Securities underlying the Warrants). In the case of the purchase of
less than all the shares of common stock purchasable under any Warrant
Certificate, the Company shall cancel said Warrant Certificate upon the
surrender thereof and shall execute and deliver a new Warrant Certificate of
like tenor for the balance of the Warrants exercisable thereunder. The
difference, if any, may be acquired by third parties in accordance with Section
3.2.



          3.2 Call of Warrants by the Company. In the event that the common stock
of the Company, or the common stock of the entity with which the Company may
exchange its shares or enter into a Change of Control
Transaction3, has an
average closing market price of









	1 This Agreement expires on the Expiration Date (5:30 P.M., Pacific Standard
time, on August 31, 2004).
	 
	2 The 2004 Warrant Agreement shall provide the Holder the right to exercise the
warrant rights granted therein at any time between September 1, 2004 and 5:30
P.M., Pacific Standard time, on August 31, 2008.
	 
	3 “Change of Control
Transaction” shall mean the occurrence of any of the
following events:





     (i)
 
the approval by shareholders of the Company of a merger or consolidation of
the Company with any other corporation, other than a merger or consolidation
which would result in the voting securities of the Company outstanding
immediately prior thereto continuing to represent (either by remaining
outstanding or by being converted into voting securities of the surviving
entity) more than fifty percent (50%) of the total voting power represented by
the voting securities of the Company or such surviving entity outstanding
immediately after such merger or consolidation;



     (ii) 
the approval by the shareholders of the Company of a plan of complete
liquidation of the Company or an agreement for the sale or disposition by the
Company of all or substantially all of the Company’s assets;



     (iii) 
any “person” (as such term is used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended) becoming the
“beneficial owner”
(as defined in Rule 13d-3 under said Act), directly or indirectly, of
securities of the Company representing 50% or more of the total voting power
represented by the Company’s then outstanding voting securities; or



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Seven Dollars and Fifty Cents ($7.50), or greater, for a period of twenty
(20) consecutive trading days (the “Call Terms”), the Company shall have the
right to call 25% of the Warrants and require the Holder to purchase 25% of the
Warrants (the “Initial Call”). Subsequent to the Initial Call, no subsequent
call shall be made prior to the expiration of 90 days (the “90 Day Period”).
Provided the Call Terms are met, upon the expiration of the first 90 Day
Period, the Company may effect a second call (the “Second Call”), and require
the Holder to purchase 25% of the Warrants. Thereafter, upon the expiration of
the second 90 Day Period, provided the Call Terms are met, the Company may
effect a third call (the “Third Call”), and require the Holder to purchase 25%
of the Warrants. Finally, upon the expiration of the third 90 Day Period,
provided the Call Terms are met, the Company may effect the final call (the
“Final Call”), and require the Holder to purchase the final 25% of the
Warrants. The Initial Call, the Second Call, the Third Call and the Final Call
shall be collectively referred to herein as the “Calls”.



Notwithstanding anything in this Agreement to the contrary, the Calls by the
Company shall not be permitted unless and until the Warrant Securities have
been registered pursuant to the Securities Act of 1933 (the “Act”). In the
event of the Initial Call, the Second Call, the Third Call and/or the Final
Call, the Holder shall have the right to purchase up to 25% of the Warrants at
a price of Five Dollars ($5.00) per Warrant Security (the “Call Price”) for
thirty (30)days from the date upon which notice of a Call is sent by the
Company to the Holder (the “Call Date”). Notice of a Call shall be given to
registered Holders of Warrants in the manner provided in Section 12.



     4. Issuance of Certificates. Upon the exercise of the Warrants, the
issuance of certificates for the total number of whole shares of common stock
for which such Warrants were exercised shall be made promptly (and in any event
within five (5) business days thereafter) without charge to the Holder thereof
including, without limitation, any stock transfer or similar tax which may be
payable with respect to the issuance thereof, and such certificates shall
(subject to the provisions of Sections 5 and 7 hereof) be issued in the name
of, or in such names as may be directed by, the Holder thereof; provided,
however, that the Company shall not be required to pay any tax which may be
payable with respect to any transfer involved in the issuance and delivery of
any such certificates in a name other than that of the Holder, and the Company
shall not be required to issue or deliver such certificates unless or until the
person or persons requesting the issuance thereof shall have paid to the
Company the amount of such tax or shall have established to the satisfaction of
the Company that such tax has been paid.



          The Warrant Certificates and the certificates representing the Warrant
Securities underlying the Warrants shall be executed on behalf of the Company
by the manual or facsimile signature of the then present Chairman of the Board
of Directors or Chief Executive Officer of the Company under its corporate seal
reproduced thereon and by the then present Treasurer or Secretary of the
Company. Warranty Certificates shall be dated the date of execution by the
Company upon initial issuance, division, exchange, substitution or transfer.
Certificates



     (iv)
a change in the composition of the Board, as a result of which fewer than a
majority of the directors are Incumbent Directors. “Incumbent Directors” shall
mean directors who either (A) are directors of the Company as of the date
hereof, or (B) are elected, or nominated for election, to the Board with the
affirmative votes of at least a majority of those directors whose election or
nomination was not in connection with any transactions described in subsections
(i), (ii), or (iii) or in connection with an actual or threatened proxy contest
relating to the election of directors of the Company.



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representing the shares of common stock issuable upon exercise of the
Warrants shall be dated the date on which the Company receives the Election to
Purchase, Warrant Certificate and payment of the Exercise Price.



     5. Restriction on Transfer of Warrants. The Warrants may be sold,
transferred, assigned, hypothecated or otherwise disposed of, in whole or in
part. The Warrants may also be transferred by operation of law as a result of
the death or divorce of any transferee to whom the Warrants may have been
transferred. Any assignment shall be effected by a duly executed assignment in
the form of Annex B to the Warrant Certificate.



     6. Exercise Price.



          6.1 Initial and Adjusted Exercise Price. The initial exercise price of
each Warrant shall be Five Dollars ($5.00) per share of common stock. The
adjusted exercise price shall be the price which shall result from time to time
from any and all adjustments of the initial exercise price in accordance with
the provisions of Section 8 hereof.



          6.2 Exercise Price. The term “Exercise Price” herein shall mean the
initial exercise price or the adjusted exercise price, as the case may be.



     7. Registration Rights.



          7.1 Piggyback Registration. The Company shall register the Warrant
Securities underlying the Warrants pursuant to the Securities Act of 1933, as
amended (the “Securities Act”), prior to a Call. The Company shall give written
notice by registered mail at least thirty (30) days prior to the filing of a
registration statement informing the Warrant Securities Holder of its intention
to do so. If the Warrants and Warrant Securities Holder notifies the Company
within twenty (20) business days after receipt of any such notice of its or
their desire to include any of their respective Warrant Securities in such
proposed registration statement, the Company shall afford such Holders of
Warrants and Warrant Securities the opportunity to have any such Warrant
Securities registered under such registration statement.



          7.2 Covenants of the Company with Respect to Registration. In connection
with any registration under Section 7.1 hereof, the Company covenants and
agrees as follows:



               (a) In connection with the Company’s intention to file a registration
statement, the Company shall use its best efforts to have any registration
statement declared effective at the earliest possible time and shall furnish
each Holder desiring to sell Warrant Securities such number of prospectuses as
shall reasonably be requested



               (b) The Company shall pay all costs, fees and expenses in connection with
all registration statements filed pursuant to Sections 7.1 hereof (excluding
fees and expenses of the Holder’s and Holders’ counsel and accountants and any
underwriting or selling commissions) including, without limitation, the
Company’s legal and accounting fees, printing expenses, blue sky fees and
expenses.



               (c) The Company shall furnish without charge to each Holder of Warrant
Securities, promptly after filing thereof with the Commission, at least one (1)
copy of the registration statement filed pursuant to Section 7.1 (a
“Registration Statement”) and each



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amendment thereto or each amendment or supplement to the prospectus
included therein (the “Prospectus”) including all financial statements and
schedules, documents incorporated by reference therein and if the Holder so
requests in writing, all exhibits thereto.



               (d) The Company shall take such action as may be reasonably necessary so
that (i) the Registration Statement and any amendment thereto and any
Prospectus forming a part thereof and any supplement or amendment thereto
complies in all material respects with the Securities Act and the rules and
regulations thereunder, (ii) the Registration Statement and any amendment
thereto (in either case, other than with respect to written information
furnished to the Company by or on behalf of any Holder specifically for
inclusion therein) does not contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to
make any statement therein not misleading and (iii) the Prospectus and any
supplement thereto (in either case, other than with respect to such information
from Holders), does not include an untrue statement of a material fact or omit
to state a material fact necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading.



               (e) The Company shall promptly advise the Holders of Warrant Securities
registered under the Registration Statement (which advice pursuant to clauses
(ii) - (iv) shall be accompanied by an instruction to suspend the use of the
Prospectus until the requisite changes have been made) and, if requested by
such persons, shall confirm such advice in writing:




   (i) when the Registration Statement and any amendment thereto
has been filed with the Commission and when the Registration
Statement or any post-effective amendment thereto has become
effective;




   (ii) of any request by the Commission for amendments to the
Registration Statement or amendments or supplements to the
Prospectus or for additional information relating thereto;




   (iii) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or of
the suspension by any state securities commission of the
qualification of the Warrant Securities for offering or sale in any
jurisdiction, or the initiation of any proceeding for any of the
preceding purposes; and




   (iv) of the happening of any event that requires the making of
any changes in the Prospectus so that, as of such date, the
Prospectus does not contain an untrue statement of a material fact
and does not omit to state a material fact required to be stated
therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading.



               (f) If at any time the Commission shall issue any stop order suspending
the effectiveness of the Registration Statement, or any state securities
commission or other regulatory authority shall issue an order suspending the
qualification or exemption from qualification of the Warrant Securities under
state securities or Blue Sky laws, the Company



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shall use its reasonable best efforts to obtain the withdrawal or lifting
of such order at the earliest possible time.



               (g) The Company shall, during the period the Company is obligated to
maintain the effectiveness of a Registration Statement under Section 7.2
hereof, deliver to each Holder of Warrant Securities included under the
Registration Statement, without charge, such reasonable number of copies of the
Prospectus (including each preliminary prospectus) included in the Registration
Statement and any amendment or supplement thereto as such Holder may reasonably
request to facilitate the public sale or other disposition of the Warrant
Securities by the selling Holder.



               (h) The Company shall cooperate with the Holders of Warrant Securities to
facilitate the timely preparation and delivery of certificates representing
Warrant Securities to be sold under the Registration Statement, free of any
restrictive legends and in such denominations and registered in such names as
the Holders or the Holder(s), if any, may reasonably request in connection with
the sales of Warrant Securities pursuant to the Registration Statement.



               (i) Upon the occurrence of any event contemplated by Section 7.2(e)(ii) -
(iv) hereof or any request by the Commission for any amendments to the
Registration Statement or for additional information relating thereto or the
happening of any event that requires the making of any changes in the
Registration Statement, the Company shall file (and use its reasonable best
efforts to have declared effective as soon as possible) a post-effective
amendment to the Registration Statement or an amendment or supplement to the
Prospectus or file any other required document so that, as thereafter delivered
to the purchasers of Warrant Securities registered under the Registration
Statement, the Prospectus will not contain an untrue statement of a material
fact or omit to state any material fact necessary to make the statements
therein in light of the circumstances under which they were made not
misleading. Each Holder of Warrant Securities registered under the Registration
Statement agrees by acquisition of such Warrant Securities that, upon receipt
of any notice from the Company of the existence of any fact of the kind
described in Section 7.2(e)(ii) - (iv) hereof, such Holder will forthwith
discontinue disposition of Warrant Securities pursuant to the Registration
Statement until such Holder receives copies of the supplemented or amended
Prospectus contemplated by this Section 7.2(j), or until such Holder is advised
in writing by the Company that the use of the Prospectus may be resumed, and
such Holder has received copies of any additional or supplemental filings which
are incorporated by reference in the Prospectus. If so directed by the Company,
each Holder will deliver to the Company (at the Company’s expense) all copies,
other than permanent file copies then in such Holder’s possession, of the
Prospectus covering such Warrant Securities current at the time of receipt of
such notice.



               (j) Nothing contained in this Agreement shall be construed as requiring
the Holders to exercise their Warrants prior to the initial filing of any
registration statement or the effectiveness thereof.



               (k) In addition to Warrant Securities, upon the written request therefor
by any Holders, the Company shall include in the Registration Statement any
other securities of the Company held by such Holders as of the date of filing
of such Registration Statement, including, without limitation, restricted
shares of common stock, options, warrants or securities



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convertible into shares of common stock and shall not be requested by the
Company to provide indemnification except as provided in Section 7.2(q) hereof.



               (1) Indemnification and Contribution.



                    (1) The Company agrees to indemnify and hold harmless each Holder (for
purposes of this Section 7.2(1), “Holder” shall include the officers,
directors, partners, employees and agents, and each person, if any, who
controls any Holder (“controlling person”) within the meaning of Section 15 of
the Securities Act or Section 20(a) of the Exchange Act, from and against any
and all losses, claims, damages, expenses or liabilities, joint or several (and
actions, proceedings, suits and litigation in respect thereof), whatsoever, as
the same are incurred, to which such Holder or any such controlling person may
become subject, under the Securities Act, the Exchange Act or any other statute
or at common law or otherwise insofar as such losses, claims, damages, expenses
or liabilities arise out of or are based upon any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement, or
any preliminary Prospectus or Prospectus (as from time to time amended and
supplemented) or arise out of or are based upon the omission or alleged
omission therefrom of a material fact required to be stated therein or
necessary to make the statements therein (with respect to any preliminary
Prospectus or Prospectus, in the light of the circumstances under which they
were made), not misleading; provided, however, that the Company shall not be
liable in any such case to the extent that any such loss, claim, damage,
expense or liability arises out of or is based upon any untrue statement or
alleged untrue statement or omission or alleged omission made in the
Registration Statement, or any preliminary Prospectus or Prospectus or any such
amendment or supplement in reliance upon and in conformity with written
information furnished to the Company by or on behalf of any Holder specifically
for inclusion therein and provided, further, that the Company shall not be
liable to any such Holder under the indemnity agreement in this subsection (1):
(i) with respect to any preliminary Prospectus or Prospectus (if such
Prospectus has then been amended or supplemented) to the extent that any such
loss, liability, claim, damage or expense of such Holder arises out of a sale
of Warrant Securities by such Holder to a person to whom (a) there was not sent
or given, at or prior to the written confirmation of such sale, a copy of the
Prospectus (or of the Prospectus as then amended or supplemented) if the
Company has previously furnished copies thereof to such Holder a reasonable
time in advance or (b) prior to written confirmation of such sale, such Holder
received notice from the Company pursuant to Section 7.2 to discontinue
disposition pursuant to such Prospectus and, in either case the loss,
liability, claim, damage or expense of such Holder results from an untrue
statement or alleged untrue statement or omission or alleged omission of a
material fact contained in the preliminary Prospectus (or the Prospectus) which
was corrected in the Prospectus (or the Prospectus as amended or supplemented)
or (ii) to the extent that any such loss, claim, damage, expense or liability
arises out of or is based upon any action or failure to act by such Holder that
is found in a final judicial determination (or a settlement tantamount thereto)
to constitute bad faith, willful misconduct or gross negligence on the part of
such Holder, The indemnity agreement in this subsection (1) shall be in
addition to any liability which the Company may have at common law or
otherwise, to the extent not inconsistent therewith.



                    (2) Promptly after receipt by an indemnified party under this Section
7.2(1) of notice of the commencement of any action, suit or proceeding, such
indemnified party shall, if a claim in respect thereof is to be made against
one or more



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indemnifying parties under this Section 7.2(1), notify each party against
whom indemnification is to be sought in writing of the commencement thereof
(but the failure to notify an indemnifying party shall not relieve it from any
liability which it may have under Sections 7.2(l)(l) unless and to the extent
that it has been prejudiced in a material respect by such failure or from the
forfeiture of substantial rights and defenses). In case any such action, suit
or proceeding is brought against any indemnified party, and it notifies an
indemnifying party or parties of the commencement thereof, the indemnifying
party or parties will be entitled to participate therein, and to the extent it
may elect by written notice delivered to the indemnified party promptly after
receiving the aforesaid notice from such indemnified party, to assume the
defense thereof with counsel reasonably satisfactory to such indemnified party,
which may be the same counsel as counsel to the indemnifying party.
Notwithstanding the foregoing, the indemnified party or parties shall have the
right to employ its or their own counsel in any such case but the fees and
expenses of such counsel shall be at the expense of such indemnified party or
parties unless (i) the employment of such counsel shall have been authorized in
writing by the indemnifying parties in connection with the defense of such
action at the expense of the indemnifying party, (ii) the indemnifying parties
shall not have employed counsel reasonably satisfactory to such indemnified
party to take charge of the defense of such action within a reasonable time
after notice of commencement of the action or (iii) such indemnified party or
parties shall have reasonably concluded, after consultation with counsel to
such indemnified party or parties, that a conflict of interest exists which
makes representation by counsel chosen by the indemnifying party not advisable
(in which case the indemnifying parties shall not have the right to direct the
defense of such action on behalf of the indemnified party or parties), in any
of which events such fees and expenses of one additional counsel shall be borne
by the indemnifying parties. In no event shall the indemnifying parties be
liable for fees and expenses of more than one counsel (in addition to any local
counsel) separate from their own counsel for all indemnified parties in
connection with any one action or separate but similar or related actions in
the same jurisdiction arising out of the same general allegations or
circumstances. Anything in this Section 7.2(1) to the contrary notwithstanding,
an indemnifying party shall not be liable for any settlement of any claim or
action effected without its written consent,, which shall not be unreasonably
withheld or delayed.



                    (3) In order to provide for just and equitable contribution in any case in
which (i) an indemnified party makes claim for indemnification pursuant to this
Section 7.2(1), but it is judicially determined (by the entry of a final
judgment or decree by a court of competent jurisdiction and the expiration of
time to appeal or the denial of the last right of appeal) that such
indemnification may not be enforced in such case notwithstanding the fact that
the express provisions of this Section 7.2 (1) provide for indemnification in
such case, or (ii) contribution under the Securities Act may be required, then
each indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid as a result of such losses, claims, damages,
expenses or liabilities (or actions, suits, proceedings or litigation in
respect thereof) in such proportion as is appropriate to reflect the relative
fault of each of the contributing parties, on the one hand, and the party to be
indemnified, on the other hand, in connection with the statements or omissions
that resulted in such losses, claims, damages, expenses or liabilities, as well
as any other relevant equitable considerations. Relative fault shall



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be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information supplied by the Company or by a
Holder, and the parties’ relative intent, knowledge, access to information and
opportunity to correct or prevent such untrue statement or omission. The amount
paid or payable by an indemnified party as a result of the losses, claims,
damages, expenses or liabilities (or actions, suits, proceedings or litigation
in respect thereof) referred to above in this subsection (3) shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating, preparing or defending any such action,
claim, suit, proceeding or litigation. Notwithstanding the provisions of this
subsection (3), no Holder shall be required to contribute any amount in excess
of the amount by which the total price at which the Warrant Securities sold by
such indemnifying party and distributed to the public were offered to the
public exceeds the amount of any damages that such indemnifying party has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 12(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. Any party entitled to contribution will, promptly
after receipt of notice of commencement of any action, suit, proceeding or
litigation against such party in respect to which a claim for contribution may
be made against another party or parties under this subsection (3), notify such
party or parties from whom contribution may be sought, but the omission so to
notify such party or parties shall not relieve the party or parties from whom
contribution may be sought from any obligation it or they may have hereunder or
otherwise than under this subsection (3), or to the extent that such party or
parties were not adversely affected by such omission, The contribution
agreement set forth above shall be in addition to any liabilities which any
indemnifying party may have at common law or otherwise.



               (m) Notwithstanding the foregoing provisions of this Section 7.2, no
registration rights shall be extended pursuant to this Section 7 with respect
to any Warrant Securities (i) which have been sold pursuant to and in
accordance with an effective Registration Statement, (ii) sold in accordance
with Rule 144 under the Securities Act or (iii) eligible for sale under Rule
144(k) under the Securities Act.



     8. Adjustments.



          8.1 The number and kind of securities purchasable upon the exercise of
this Warrant and the Exercise Price therefor shall be subject to adjustment
from time to time upon the occurrence of certain events, as follows:



               (a) Reclassification. In the case of any reclassification or change of
securities of the class issuable upon exercise of this Warrant (other than a
change in par value, or from par value to no par value, or from no par value to
par value, or as a result of a subdivision or combination), or in case of any
merger of the Company with or into another corporation (other than a merger
with another corporation in which the Company is the acquiring and the
surviving corporation and which does not result in any reclassification or
change of outstanding securities issuable upon exercise of this Warrant), or in
case of any sale of all or substantially all of the assets of the Company, the
Company, or such successor or purchasing corporation, as the case may be, shall
duly execute and deliver to the holder of this Warrant a new Warrant (in form
and



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substance reasonably identical to this Warrant), or, at the sole
discretion of the Company, the Company shall make appropriate provision without
the issuance of a new Warrant, so that the holder of this Warrant shall have
the right to receive, at a total purchase price not to exceed that payable upon
the exercise of the unexercised portion of this Warrant, and in lieu of the
shares of common stock theretofore issuable upon exercise of this Warrant, the
kind and amount of shares of stock, other securities, money and property
receivable upon such reclassification, change, merger or sale by a holder of
the number of shares of common stock then purchasable under this Warrant. The
provisions of this subparagraph (a) shall similarly apply to successive
reclassifications, changes, mergers and transfers.



               (b) Stock Splits, Dividends and Combinations. In the event that the
Company shall at any time subdivide the outstanding shares of common stock or
shall issue a stock dividend on its outstanding shares of common stock the
number of Warrant Securities issuable upon exercise of this Warrant immediately
prior to such combination shall be proportionately decreased, and the Exercise
Price shall be proportionately increased, effective at the close of business on
the date of such subdivision, stock dividend or combination, as the case maybe.



          8.2 Notice of Adjustments. Whenever the number of Warrant Securities
purchasable hereunder or the Exercise Price thereof shall be adjusted pursuant
to Section 8 hereof, the Company shall provide notice to the Holder setting
forth, in reasonable detail, the event requiring the adjustment, the amount of
the adjustment, the method by which such adjustment was calculated, and the
number and class of shares which may be purchased thereafter and the Exercise
Price therefor after giving effect to such adjustment.



     9. Exchange and Replacement of Warrant Certificates. Each Warrant
Certificate is exchangeable, without expense, upon the surrender thereof by the
Holder at the principal executive office of the Company, for a new Warrant
Certificate of like tenor and date representing in the aggregate the right to
purchase the same number of Warrant Securities in such denominations as shall
be designated by the Holder thereof at the time of such surrender. Upon receipt
by the Company of evidence reasonably satisfactory to it of the loss, theft,
destruction or mutilation of any Warrant Certificate, and, in case of loss,
theft or destruction, of indemnity or security reasonably satisfactory to it,
and reimbursement to the Company of all reasonable expenses incidental thereto,
and upon surrender and cancellation of such Warrant Certificates, if mutilated,
the Company will make and deliver a new Warrant Certificate of like tenor in
lieu thereof.



     10. Elimination of Fractional Interests. The Company shall not be required
to issue certificates representing fractions of shares of common stock upon the
exercise of the Warrants to purchase common stock, nor shall it be required to
issue scrip or pay cash in lieu of fractional interests, it being the intent of
the parties that all fractional interests shall be eliminated by rounding any
fraction up to the nearest whole number of shares of common stock or other
securities, properties or rights.



     11. Reservation and Listing of Securities. The Company shall at all times
reserve and keep available out of its authorized capital stock, solely for the
purpose of issuance upon the exercise of the Warrants, such number of shares of
common stock or other securities, property or



10









 





rights as shall be issuable upon exercise thereof. The Company covenants
and agrees that, upon exercise of the Warrants and payment of the Exercise
Price therefor, all shares of common stock and other securities issued by the
Company upon such exercise shall be duly and validly issued, fully paid,
non-assessable and not subject to the preemptive rights of any security holder
of the Company. As long as the Warrants shall be outstanding, the Company shall
use its reasonable best efforts to cause the common stock issuable upon the
exercise of the Warrants to be listed (subject to official notice of issuance)
on all securities exchanges on which the common stock may then be listed and/or
quoted by NASDAQ if the common stock issued to the public is so quoted.



     12. Notices. All notices, requests, consents and other communications
hereunder shall be in writing and shall be deemed to have been duly made and
sent when delivered, or mailed by registered or certified mail, return receipt
requested:



               (a) If to a Holder, to the address of such Holder as shown on the books of
the Company; or



               (b) If to the Company, to the address set forth herein or to such other
address as the Company may designate by notice to the Holders.



     13. Supplements and Amendments. The Company and the Holders may from time
to time supplement or amend this Agreement without the approval of any Holders
(other than the Holder) in order to cure any ambiguity, to correct or
supplement any provision contained herein which may be defective or
inconsistent with any provisions herein, or to make any other provisions in
regard to matters or questions arising hereunder which the Company and the
Holder may deem necessary or desirable and which the Company and the Holder
deem shall not adversely affect the interests of the Holders in any material
respect.



     14. Successors. All the covenants and provisions of this Agreement shall
be binding upon and inure to the benefit of the Company, the Holders and their
respective successors and assigns hereunder.



     15. Termination. This Agreement shall terminate at the close of business
on August 31, 2004. Notwithstanding the foregoing, the indemnification
provisions of Section 7 shall survive such termination until the close of
business on August 31, 2013.



     16. GOVERNING LAW; SUBMISSION TO JURISDICTION. THIS AGREEMENT AND EACH
WARRANT CERTIFICATES ISSUED HEREUNDER SHALL BE DEEMED TO BE A CONTRACT MADE
UNDER THE LAWS OF THE STATE OF FLORIDA AND FOR ALL PURPOSES SHALL BE CONSTRUED
IN ACCORDANCE WITH THE LAWS OF SAID STATE WITHOUT GIVING EFFECT TO THE RULES OF
SAID STATE GOVERNING THE CONFLICT OF LAWS.



          The Company and the Holder hereby agree that any action, proceeding or
claim against it arising out of, or relating in any way to, this Agreement
shall be brought and enforced in the courts of the State of Florida or of the
United States of America sitting in Florida, and irrevocably submits to such
jurisdiction, which jurisdiction shall be exclusive. The Company and the Holder
hereby irrevocably waive any objection to such exclusive jurisdiction or



11









 





inconvenient forum and also hereby irrevocably waive any right or claim to
trial by jury in connection with any such action, proceeding or claim. Any such
process or summons to be served upon any of the Company and the Holder (at the
option of the party bringing such action, proceeding or claim) may be served by
transmitting a copy thereof, by registered or certified mail, return receipt
requested, postage prepaid, addressed to it at the address set forth in Section
13 hereof Such mailing shall be deemed personal service and shall be legal and
binding upon the party so served in any action, proceeding or claim.



     17. Entire Agreement; Modification. This Agreement contains the entire
understanding between the parties hereto with respect to the subject matter
hereof. Except as set forth in Section 13 hereof, this Agreement may not be
modified or amended except by a writing duly signed by the Company.



     18. Severability. If any provision of this Agreement shall be held to be
invalid or unenforceable, such invalidity or unenforceability shall not affect
any other provision of this Agreement.



     19. Captions. The caption headings of the Sections of this Agreement are
for convenience of reference only, and are not intended, nor should they be
construed as, a part of this Agreement and shall be given no substantive
effect.



     20. Benefits of this Agreement. Nothing in this Agreement shall be
construed to give to any person, corporation or entity other than the Company
and the Holder of Warrants and/or Warrant Securities any legal or equitable
right, remedy or claim under this Agreement; and this Agreement shall be for
the sole and exclusive benefit of the Company and the Holder of Warrants and/or
Warrant Securities.



     21. Counterparts. This Agreement may be executed in any number of
counterparts and each of such counterparts shall for all purposes be deemed to
be an original and such counterparts shall together constitute but one and the
same instrument.



[signature page follows]




12









 









IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the day and year first above written.



	 	 	 	 	 	 	 
	 	 	SONOFRESH HEALTHCARE, INC.
	 
	 	 	 	 	 	 
	

	 	By:
	 	[Illegible]	 	 
	

	 	 	 	
 	 	 
	

	 	 	 	Name:	 	 
	

	 	 	 	Title:	 	 
	Attest:
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	


	 	 	 	 	 	 
	Name:
	 	 	 	 	 	 
	Title:
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	HOLDER
	 
	 	 	 	 	 	 
	

	 	By:
	 	[Illegible]	 	 
	

	 	 	 	
 	 	 
	

	 	 	 	Name:	 	 







13









 






EXHIBIT A




FORM OF WARRANT CERTIFICATE




THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE HEREOF HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”),
OR ANY STATE SECURITIES OR BLUE SKY LAWS AND MAY NOT BE OFFERED, SOLD,
TRANSFERRED, HYPOTHECATED OR OTHERWISE ASSIGNED EXCEPT (1) PURSUANT TO A
REGISTRATION STATEMENT WITH RESPECT TO SUCH SECURITIES WHICH IS EFFECTIVE UNDER
THE ACT OR (2) PURSUANT TO AN AVAILABLE EXEMPTION FROM REGISTRATION UNDER THE
ACT RELATING TO THE DISPOSITION OF SECURITIES AND (3) IN ACCORDANCE WITH
APPLICABLE STATE SECURITIES AND BLUE SKY LAWS.



THE TRANSFER OR EXCHANGE OF THE WARRANTS REPRESENTED BY THIS CERTIFICATE IS
RESTRICTED IN ACCORDANCE WITH THE WARRANT AGREEMENT REFERRED TO HEREIN.



EXERCISABLE ON OR BEFORE

5:30 P.M., PACIFIC STANDARD TIME, AUGUST 31, 2004




	 	 	 
	No. W-        

	 	667,000 Warrants







WARRANT CERTIFICATE




     This Warrant Certificate certifies that Dave Macrae Trust, or registered
assigns, is the registered holder of 667,000 Warrants to purchase initially, at
any time from September 1, 2003 until 5:30 p.m. Pacific Standard time on August
31, 2004 (the “Expiration Date”), up to six hundred sixty-seven thousand
(667,000) fully paid and nonassessable shares of common stock (the “common
stock”), of SinoFresh HealthCare, Inc., a California corporation (the
“Company”), at the initial exercise price of $5.00 per share, subject to
adjustment in certain events (the “Exercise Price”), upon surrender of this
Warrant Certificate and payment of the Exercise Price, at an office or agency
of the Company, but subject to the conditions set forth herein and in the
Holder’s Warrant Agreement dated as of September 1, 2003 by and between the
Company and Dave Macrae Trust (the “Warrant Agreement”). Payment of the
Exercise Price, shall be made by certified or official bank check in New York
Clearing House funds payable to the order of the Company and by surrender of
this Warrant Certificate.



     No Warrant may be exercised after 5:30 p.m., Pacific Standard Time, on the
Expiration Date, at which time all Warrants evidenced hereby, unless exercised
prior thereto, shall thereafter be void.



     The Warrants evidenced by this Warrant Certificate are part of a duly
authorized issue of Warrants issued pursuant to the Warrant Agreement, which
Warrant Agreement is hereby incorporated by reference in and made a part of
this instrument and is hereby referred to for a



14









 





description of the rights, limitation of rights, obligations, duties and
immunities thereunder of the Company and the holders (the words “holders” or
“holder” meaning the registered holders or registered holder) of the Warrants.



     The Warrant Agreement provides that upon the occurrence of certain events
the Exercise Price and the amount the type and/or number of the Company’s
securities issuable hereunder may, subject to certain conditions, be adjusted.
In such event, the Company will, at the request of the holder, issue a new
Warrant Certificate evidencing the adjustment in the Exercise Price and the
number and/or type of securities issuable upon the exercise of the Warrants;
provided, however, that the failure of the Company to issue such new Warrant
Certificates shall not in any way change, alter or otherwise impair the rights
of the holder as set forth in the Warrant Agreement.



     Upon due presentment for registration of transfer of this Warrant
Certificate at an office or agency of the Company, a new Warrant Certificate or
Warrant Certificates of like tenor and evidencing in the aggregate a like
number of Warrants shall be issued to the transferee(s) in exchange for this
Warrant Certificate, subject to the limitations provided herein and in the
Warrant Agreement, without any charge except for any tax or other governmental
charge imposed in connection with such transfer.



     Upon the exercise of less than all of the Warrants evidenced by this
Warrant Certificate, the Company shall forthwith issue to the holder hereof a
new Warrant Certificate representing such number of unexercised Warrants.



     The Company may deem and treat the registered holder(s) hereof as the
absolute owner(s) of this Warrant Certificate (notwithstanding any notation of
ownership or other writing hereon made by anyone), for the purpose of any
exercise hereof, and of any distribution to the holder(s) hereof, and for all
other purposes, and the Company shall not be affected by any notice to the
contrary.



     All terms used in this Warrant Certificate which are defined in the
Warrant Agreement shall have the meanings assigned to them in the Warrant
Agreement.



[signature page follows]




15









 










IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to be duly
executed under its corporate seal.



Dated as of September 8, 2003.




	 	 	 	 	 	 	 
	 	 	SINOFRESH HEALTHCARE, INC.
	 
	 	 	 	 	 	 
	[SEAL]

	 	By:	 	 	 	 
	

	 	 	 	
 	 	 
	

	 	 	 	Name:	 	 
	

	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	Attest:
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	


	 	 	 	 	 	 
	Name:
	 	 	 	 	 	 
	Title:
	 	 	 	 	 	 







16









 






ANNEX A

TO WARRANT CERTIFICATE




FORM OF ELECTION TO PURCHASE PURSUANT TO SECTION 3




     The undersigned hereby irrevocably elects to exercise the right,
represented by this Warrant Certificate, to purchase                         shares of
common stock and herewith tenders in payment for such securities a certified or
official bank check payable in New York Clearing House Funds to the order of
SinoFresh HealthCare, Inc., in the amount of $                 , all in accordance
with the terms of Section 3 of the Warrant Agreement dated as of September 1,
2003 by and between SinoFresh HealthCare, Inc., and the Holder. The undersigned
requests that a certificate for such securities be registered in the name of
            whose address
is   
   and that such certificate
be delivered to             whose address is
   
   .



	 	 	 	 	 	 
	Date:

	 	__________, 2003
	 	Signature
	

	 	 	 	 	

	

	 	 	 	(Signature must conform in all respects to name of holder as
	

	 	 	 	specified on the face of the Warrant Certificate)
	 
	 	 	 	 
	

	 	 	 	
 
	

	 	 	 	(Social Security Number of Holder)







17









 






ANNEX B

TO WARRANT CERTIFICATE




FORM OF ASSIGNMENT




(To be executed by the registered holder if such holder

desires to transfer the Warrant Certificate.)




     FOR
VALUE RECEIVED             hereby sells, assigns and transfers
unto    

                          (Please print name and address of transferee)

the within Warrant Certificate, together with all right, title and interest
therein, and does hereby irrevocably constitute and appoint
                 Attorney to transfer the within Warrant
Certificate on the books of the within-named Company, with full power of
substitution.



	 	 	 	 
	Dated:
_____

	 	Signature
	 

	 	 	
 
	

	 	(Signature must conform in all respects to name of holder as
	

	 	specified on the face of the Warrant Certificate)
	 
	 	 
	

	 	
 
	

	 	(Insert Social Security or Other Identifying Number of Assignee)







18









 






EXHIBIT B




Post-Merger Capitalization Table





19