Document:

154

                                  EXHIBIT 10.11
                                  -------------

           This is an Exhibit to the Form 20-F of Sinovac Biotech Ltd.
           -----------------------------------------------------------

                     Attached find the following materials:

        Corporate Services Agreement entered into between the Company and
        -----------------------------------------------------------------
          Segue Ventures LLC, dated for reference effective May 1, 2005
          -------------------------------------------------------------

<PAGE>

                                       155

                               CORPORATE SERVICES
                               ------------------
                                    AGREEMENT
                                    ---------

       THIS  CORPORATE  SERVICES  AGREEMENT  is made  and  dated  for  reference
       ------------------------------------
effective (the "Effective Date") as of the 1st day of May, 2005.

BETWEEN:
-------

              SEGUE  VENTURES  LLC.  having its address for delivery and service
              ---------------------
              located at 203 Windsor Avenue, Melrose Park, PA 19027-3510

              (the "Consultant");

                                                               OF THE FIRST PART
                                                               -----------------

AND:
---

              SINOVAC BIOTECH LTD. a company duly incorporated under the laws of
              --------------------
              Antigua and having an address for delivery and service  located at
              No. 39 Shangdi Xi Road, Haidian District, Beijing, P.R.C 100085

              (the "Company");

                                                              OF THE SECOND PART
                                                              ------------------

              (the Consultant and the Company being hereinafter  singularly also
              referred  to as a  "Party"  and  collectively  referred  to as the
              "Parties" as the context so requires)

WHEREAS:
-------

A.     The Company is in the medical business (the "Business") of developing and
marketing vaccines in China and is listed on the AMEX;

B.     The Company retains the Consultant under this agreement (the "Agreement")
to act  as  the  Company's  Investment  Relations  Manager.  Its  purpose  is to
establish  and execute an effective,  combined IR - PR strategy that  powerfully
communicates Sinovac's qualities and potential to the investment community.  The
Consultant's goal is to help achieve and maintain  favorable market  valuations,
stable stock price and relations with the investment and media communities.

       NOW THEREFORE THIS AGREEMENT  WITNESSETH THAT THE PARTIES HERETO AGREE AS
       -------------------------------------------------------------------------
FOLLOWS:
-------

<PAGE>

                                       156

                                    Article I
                                    ---------

                 SERVICES AND RESPONSIBILITIES OF THE CONSULTANT
                 -----------------------------------------------

1.1    Consultant  Services.   The Consultant will provide to the Company, as an
       --------------------
independent consultant,  on a non-exclusive basis, the services ("Services") set
forth below together with such reasonable additions and modifications thereto as
the Company may request from time-to-time:

       A.     Investor Relations - Conduct day-to-day  investor relations ("IR")
              operations for the Company including:

              a.     Manage a toll free investor relations  information line and
                     provide   response   services  in  a  professional   manner
                     compliant  with SEC and  stock  exchange  regulations  that
                     Sinovac is a member of;
              b.     Draft  Company  press  releases  for  approval  by  Company
                     management;
              c.     Assist  in the  preparation  and  distribution  of  Company
                     information brochures and other media material;
              d.     Prepare for Company  approval  strategic  IR plans for cost
                     effective  and  market  effective  news  dissemination  and
                     public  awareness  programs and programs to enhance Company
                     stockholder base and distribution;
              e.     Coordinate conference calls & web-casts for North America;
              f.     Prepare for Company approval,  an investment awareness plan
                     that identifies contacts at investment  institutions likely
                     to find Sinovac interesting and develop media material that
                     introduces potential investment and financial  institutions
                     to Sinovac. ;
              g.     Provide   shareholders   with   latest   news  and  Company
                     information releases;
              h.     Provide strategic counsel on investor  relations' issues to
                     senior management  including  feed-back on investor Company
                     knowledge;
              i.     Track market and Sinovac  shareholder  activity and prepare
                     analysis concerning trends and significance to the Company;
                     and
              j.     Assist in preparing statements and commentary for SEC forms
                     and reports.

       B.     Website Management - Assist Sinovac with its website as follows:

              a.     Prepare basic website content,  monitor website for content
                     currency and update as necessary;
              b.     Prepare  for  website  -  annual  reports,  news  releases,
                     Frequently  Asked Questions  (FAQs) section,  links section
                     and other published content;

       C.     Strategic Media Relations

              a.     Establish and maintain  contacts  with suitable  reporters,
                     editors, key journalists and other media;
              b.     Provide analysis of media coverage, journalist profiling;
              c.     Provide  strategy-driven   corporate  media  communications
                     programs; and
              d.     Cultivate investor relations networks.

       D.     Cultivate Capital Markets and Shareholder Relations

<PAGE>

                                       157

              a.     Produce  targeted  programs  to identify  and connect  with
                     qualified  institutional  investors. Be prepared to provide
                     personal  and  telephone  briefings  to  the  institutional
                     investment  community  in order to  present  the  Company's
                     benefits to investors and to establish positive  productive
                     business relationships;
              b.     Assist  the  Company  with   preparation   of   information
                     presentations    and   documents    appropriate   for   the
                     institutional    investment    community    and   financial
                     institutions to become knowledgeable about the Company;
              c.     Establish and enhance channels of communication between the
                     Company  and   institutional   investors,   market  makers,
                     registered  representatives,  buy-and  sell-side  financial
                     analysts, and portfolio managers; but
              d.     Consultant's    responsibilities   do   not   include   the
                     solicitation or sales of securities.

       E.     Road Show Public Relations / Promotion

              a.     Prepare  and present  multimedia  briefing  strategies  and
                     assist in planning speaking agendas and venues; and
              b.     Provide  coaching and  assistance  to Sinovac  officers for
                     public speaking.

       F.     Opinion  Research - conduct  polls and  targeted  interviews  with
              investors  and the  investment  community to  determine  Company's
              message penetration and effectiveness.

       G.     Support Business Plan Development and Execution

              a.     Marketing   and  business   plans  -  assist  in  providing
                     information,  validating and improving ideas, trouble shoot
                     logic flaws and provide research support;
              b.     Corporate  Governance - facilitate  informing the public of
                     the Company's corporate  governance programs and events and
                     develop and execute an information disclosure program;
              c.     Message  Development - develop a systematic message process
                     to help the  Company  focus  its  strategic  communications
                     objectives  and frame  effective  messages to achieve them;
                     and
              d.     Executive Coaching:

                     i.     Media  Coaching  to  improve  individual  skills  in
                            dealing  with the news media and for general  public
                            communication; and
                     ii.    Presentation Skills to help develop skills in speech
                            delivery and conducting meetings.

(such above-referenced services being, collectively, also called the "Consulting
Services").

1.2    Reporting By Consultant.   The Consultant will report to the Company on a
       -----------------------
timely basis as to its activities and performance in its conduct of the Services
and any issues which arise.  The  Consultant  shall report as soon as reasonably
possible in respect to material  matters and shall  render  summary  reports not
less than monthly.

<PAGE>

                                       158

                                   Article II
                                   ----------

                    INFORMATION TO BE PROVIDED BY THE COMPANY
                    -----------------------------------------

2.1    Information to be made available.    The Company agrees to make available
       --------------------------------
to the Consultant all corporate,  financial and operating  information  which is
reasonably  necessary  and  sufficient  to allow the  Consultant  to perform the
Consulting Services.  The Company agrees to make all such information  available
to  the  Consultant  and  hereby  authorizes  the  Consultant  to  provide  such
information to investors, potential investors, registered representatives, legal
and  accounting  advisers,  and  other  persons,   subject  to  such  reasonable
conditions and  restrictions  as the Company deems  necessary or appropriate and
subject to insider  information rules and restrictions.  The Consultant will use
such  information only for the purposes set out herein and for no competitive or
other purpose whatsoever.

2.2    Accuracy of the information.   The Company  agrees that it will bear sole
       ---------------------------
responsibility for the accuracy and completeness of the information  provided to
the  Consultant,  information  created by the  Consultant  and  approved  by the
Company,  but not for information created and released by the Consultant without
the approval of the Company.

2.3    Material  change  in  information.   The Company  agrees  to  advise  the
       ---------------------------------
Consultant  promptly of any material  change in the affairs of the Company or in
any  information  provided  to the  Consultant  from  the  date  at  which  such
information is given.

                                   Article III
                                   -----------

                              COMPLIANCE WITH LAWS
                              --------------------

3.1    Consultant Compliance Issues and Insurance.   The Consultant shall comply
       ------------------------------------------
with all laws, whether federal or state,  applicable to the Consulting  Services
and, when  requested by the Company,  will advise the Company of any  particular
compliance  issues  affecting any Consulting  Services or transactions for which
the Consultant's  services have been engaged.  The Consultant will engage in its
own name liability  insurance  coverage for its activities which will be charged
as an expense to the  Company,  subject to Company  approval  which shall not be
unreasonably with held. It is presently contemplated that the Consultant will be
able to acquire  insurance  of  $1,000,000,  with a $10,000  deductible,  for an
estimated  annual  premium of  approximately  $9500,  which is acceptable to the
Company.

3.2    Professionals.   The fees and disbursements of counsel and accountants in
       -------------
regard to the  Consulting  Services  will be paid for by the Company  subject to
prior approval by the Company.

3.3    Company Information Security.   The  Consultant  shall effect  and comply
       ----------------------------
with all reasonable  endeavors to ensure that it affords security to information
of the Company and that the Consultant,  or any persons with whom the Consultant
works or with  whom the  Consultant  deals,  do not  employ  information  of the
Company in any manner contrary to law or fiduciary obligations.

3.4    Company  Compliance Issues.   The  Company  shall  comply  with all laws,
       --------------------------
whether federal or state, applicable to the Consulting Services and the Company.

<PAGE>

                                       159

The Company shall effect  commercially  reasonable best efforts to continue as a
reporting  issuer  in good  standing  in the US on the  AMEX or  another  public
exchange.

3.5    Trading.  In the event that the  Consultant,  or any person with whom the
       -------
Consultant  works or with whom the  Consultant  deals,  trades in the  Company's
market then the Consultant shall employ  reasonable  prudence as to such trading
and shall effect such in compliance with law. Any trading shall be effected in a
manner  which  does  not  damage  market  stability  and  orderliness  and is in
compliance with insider knowledge laws.

                                   Article IV
                                   ----------

                                      TERM
                                      ----

4.1    Term.   The initial term of this Agreement is from the Effective  Date to
       ----
July 30, 2005 (the "Initial  Term").  After the Initial Term,  and provided that
neither Party gives notice of  termination  by July 30, 2005 this Agreement will
renew for a one year period  ending July 30,  2006 unless  terminated  by either
Party, without any requirement for the giving of any cause for such termination,
upon 60 days'  prior  written  notice (the entire  period of this  Agreement  to
termination being the "Term").

                                    Article V
                                    ---------

                         COMPENSATION OF THE CONSULTANT
                         ------------------------------

5.1    Compensation to the Consultant.   The Consultant shall be compensated for
       ------------------------------
the Consulting Services and its costs as follows:

       (a)    $10,000.00  per month,  payable  on the 1st day of the  month,  in
              advance; and

       (b)    subject to the Term continuing  (effective July 30th, 2005) 15,000
              restricted  shares  awarded on August  1st,  2005 and  options for
              28,000 shares of stock with an exercise  price of $2.40 per share,
              vesting on August 1st, 2005 and expiring July 31st, 2010.

5.2    Reimbursement  of Expenses.   During the Term the Company shall reimburse
       --------------------------
the Consultant for all invoiced and substantiated expenses properly incurred for
the  Consulting  Services  within 15 days of invoice.  The Company  shall not be
responsible for expenses unless it has given approval as follows:

       (i)    Any single expense in excess of $500; and

       (ii)   Any month in which it is anticipated that aggregate  expenses will
              exceed $2000.

5.3    Ownership of  Clientele.   The Consultant  agrees that all work  product,
       -----------------------
market data,  investor leads and  identities,  institutional  data and all other
information  generated  by the  Consultant  for the  purposes of the  Consulting
Services and all data acquired from the Company  (collectively the "Confidential
Information")  are the  property of the  Company and shall be kept  confidential
except as permitted or required by this  Agreement or as otherwise  permitted in
writing. Such Confidential Information shall remain confidential and not used by
the  Consultant  until the same has become  public as to Company  data and for a

<PAGE>

                                       160

period  of  one  (1)  year  as  to  investor  or  institutional  data  following
termination  of  this  Agreement,  subject  to  any  extension  of a  continuing
transaction  right  in  regard  to  incomplete   transactions  completing  after
termination  of this  Agreement,  as  elsewhere  herein  provided.  This  within
provision is a perpetuating guarantee, for the period stated, and applies to any
and all transactions entertained by the Parties, including subsequent follow-up,
repeat transactions,  extended or renegotiated  transactions,  as well as to the
initial  transaction,  regardless of the success of the project.  This provision
does not prejudice the  Consultant or the Company from  continuing  relations or
business  with  parties  to whom they have been  introduced  during the Term and
conducting  business with such parties for their own account but the  Consultant
shall not make the Company's Confidential Information available to third parties
or distract the investors in a manner which may compete with or damage the value
of  the   Company's   Confidential   Information   or  its   finance  or  market
possibilities.

                                   Article VI
                                   ----------

                       INFORMATION AND ADVICE CONFIDENTIAL
                       -----------------------------------

6.1    Confidential   Information.   No  information   furnished   hereunder  in
       --------------------------
connection with any transaction or the Consulting Services shall be published by
any Party without the prior written consent of the other Party, but such consent
in respect of the reporting of factual data shall not be unreasonably  withheld,
and shall not be  withheld  in respect of  information  required  to be publicly
disclosed pursuant to applicable securities or other applicable laws.

                                   Article VII
                                   -----------

                      INDEMNIFICATION AND LEGAL PROCEEDINGS
                      -------------------------------------

7.1    Indemnification.   Subject to section  7.2  below,  each Party  agrees to
       ---------------
indemnify and save the other,  its  affiliates and their  respective  directors,
officers,  employees and agents (each an "Indemnified  Party") harmless from and
against  any and all  losses,  claims,  actions,  suits,  proceedings,  damages,
liabilities   or  expenses  of   whatsoever   nature  or  kind,   including  any
investigation   expenses  incurred  by  any  Indemnified   Party,  to  which  an
Indemnified Party may become subject by reason of breach of this Agreement or of
law by the defaulting Party.

7.2    Consultant  Liability.   The Consultant shall not be liable in respect of
       ---------------------
any act or omission committed by it, and the Company or its personnel shall have
no claim against the Consultant,  of any nature whatsoever  whether in contract,
tort or  otherwise  in  respect  of any  act or  omission  arising  out of or in
connection  with the  provision  of the  Services  except where such arises as a
consequence of willful wrongs or gross negligence.  Except for willful wrongs or
gross  negligence,  the  Consultant  shall not be liable to the  Company  or its
personnel for:

       (a)    Any loss or damage  (except death or personal  injury arising from
              the negligence of the Consultant)  arising from any  inaccuracies,
              omissions,  data  loss,  faults  or  delays  arising  out  of  the
              Consultant   Services,   no  matter  how  such   faults,   delays,
              inaccuracies, omissions or losses may arise or

<PAGE>

                                       161

       (b)    Any loss or failure to perform any obligation under this agreement
              due to causes beyond its reasonable control including,  industrial
              disputes,  supplier  failure,  fire,  power or  telecommunications
              failure.

In no circumstance, subject to section 7.2 above, shall the Consultant be liable
for any direct or indirect  financial loss, or consequential loss or damage with
respect to the Consultant Services.

                                  Article VIII
                                  ------------

                                  FORCE MAJEURE
                                  -------------

8.1    Events.   If either Party  hereto is at any time  during  this  Agreement
       ------
prevented  or delayed in  complying  with any  provisions  of this  Agreement by
reason of strikes,  walk-outs,  labour shortages, power shortages,  fires, wars,
acts of God, earthquakes,  storms, floods,  explosions,  accidents,  protests or
demonstrations  by  environmental  lobbyists or native rights groups,  delays in
transportation,  breakdown of machinery, inability to obtain necessary materials
in the  open  market,  unavailability  of  equipment,  governmental  regulations
restricting  normal  operations,  shipping delays or any other reason or reasons
beyond the control of that Party,  then the time limited for the  performance by
that Party of its  obligations  hereunder  shall be extended by a period of time
equal in length to the period of each prevention or delay.

8.2    Notice.   A Party shall within seven calendar days give written notice to
       ------
the other Party of each event of force majeure  under  section 8.1  hereinabove,
and upon  cessation  of such event shall  furnish the other Party with notice of
that  event  together  with  particulars  of the  number  of days by  which  the
obligations  of that Party  hereunder have been extended by virtue of such event
of force majeure and all preceding events of force majeure.

                                   Article IX
                                   ----------

                             DEFAULT AND TERMINATION
                             -----------------------

9.1    Default.   If either of the Parties is in default with  respect to any of
       -------
the provisions of this  Agreement  (hereinafter  referred to as the  "Defaulting
Party"),   the   non-defaulting   Party   (hereinafter   referred   to  as   the
"Non-Defaulting  Party") shall give notice to the Defaulting  Party  designating
such  default,  and within  fifteen (15) business days after its receipt of such
notice, the Defaulting Party shall either:

       (a)    cure such default, or diligently commence proceedings to cure such
              default and prosecute the same to completion  without undue delay,
              with notice to the  Non-Defaulting  Party of the procedures it has
              instigated to cure; or

       (b)    give the  Non-Defaulting  Party  notice  that it denies  that such
              default has  occurred  and that it is  submitting  the question to
              arbitration  in  accordance  with  the  arbitration  rules  of the
              American Arbitration  Association.  Arbitration shall be conducted
              by a single  arbitrator  selected mutually by the Parties (failing
              which they shall each  select one and decide  which acts by a flip
              of a coin),  the arbitrator  shall  determine rules of conduct and
              all  decisions  of  the  arbitrator   shall  be  final,   binding,
              unappealable and may be entered by the winning Party in court as a

<PAGE>

                                       162

              judgement, and each Party shall bear their own legal costs and pay
              50% of the arbitration costs.

9.2    Termination.  If  default  is not  addressed  appropriately  in the  form
       -----------
required by 9.1(a) above, or cured within 15 days of an arbitrator's  finding of
default of 9.1(b), then the Non-Defaulting Party may terminate this Agreement at
any time,  without  prejudice  to any  claims it may have for an  accounting  or
damages.

                                    Article X
                                    ---------

                                     NOTICE
                                     ------

10.1   Notice.  Each notice, demand or other communication required or permitted
       ------
to be given under this  Agreement  shall be in writing and shall be delivered to
the other  Party,  at the address for such Party  specified  above.  The date of
receipt of such written notice,  demand or other communication shall be the date
of delivery  thereof.  Notice  shall be sent via major  international  overnight
carrier service (eg. FedEx, UPS, DHL) to the following addresses:

SEGUE VENTURES, LLC
C/O MR. CRAIG H. BIRD
203 WINDSOR AVE
MELROSE PARK, PA 19027-3510

COURTESY COPY TO LEGAL COUNSEL OF MR. BIRD:
ATTN: CHARLES BASCH ESQ.
400 GREENWOOD AVE
WYNCOTE, PA 19095

SINOVAC BIOTECH LTD.
C/O DR. WEI DONG YIN
NO. 39 SHANGDI XI ROAD,
HAIDIAN DISTRICT, BEIJING, P.R.C 100085

<PAGE>

                                       163

COURTESY COPY TO LEGAL COUNSEL OF SINOVAC BIOTECH LTD:
ATTN: PETER JENSEN
DEVLIN JENSEN, LAWYERS
2550-555 WEST HASTINGS STREET,
VANCOUVER, BC V6B 4N5

10.2   Change  of  Address.  Either  Party may at any time and from time to time
       -------------------
notify the other  Party in writing of a change of address and the new address to
which notice shall be given to it thereafter until further change.

                                   Article XI
                                   ----------

                               GENERAL PROVISIONS
                               ------------------

11.1   Entire Agreement.    This  Agreement  constitutes  the  entire  agreement
       ----------------
between  the Parties  hereto in respect to this  subject  matter and  supersedes
every  previous   agreement,   expectation,   negotiation,   representation   or
understanding,  whether  oral or  written,  express  or  implied,  statutory  or
otherwise,  between  the  Parties  with  respect to the  subject  matter of this
Agreement.

11.2   Enurement and Assignment.   This  Agreement will enure  to the benefit of
       ------------------------
and will be  binding  upon  the  Parties,  their  respective  heirs,  executors,
administrators and permitted  assigns.  This Agreement may not be assigned as to
any part by any Party without the permission in writing of the other Party, such
permission not to be unreasonably withheld.

11.3   Time of the Essence.   Time will be of the essence of this Agreement.
       -------------------

11.4   Applicable  Law.   The situs  of this  Agreement  is  Vancouver,  British
       ---------------
Columbia,  and for all purposes this Agreement  will be governed  exclusively by
and construed and enforced in accordance with the laws of such Province,  except
that the Pennsylvania Limited Liability Company Law shall apply.

11.5   Currency.   Unless otherwise  stated, all references in this Agreement to
       --------
currency shall be United States currency.

11.6   Severability and Construction.   Each  Article,  section, paragraph, term
       -----------------------------
and provision of this Agreement,  and any portion  thereof,  shall be considered
severable,  and if, for any reason,  any portion of this Agreement is determined
to be invalid,  contrary to or in conflict with any applicable present or future
law,  rule or  regulation  in a final  unappealable  ruling issued by any Court,
agency or tribunal  with valid  jurisdiction  in a proceeding to which any Party
hereto is a party,  that ruling shall not impair the  operation  of, or have any
other effect upon, such other portions of this Agreement as may remain otherwise
intelligible  (all of which shall remain  binding on the Parties and continue to
be given full  force and  effect as of the date upon  which the  ruling  becomes
final).

11.7   Counterparts.   This Agreement may be signed by the Parties  hereto in as
       ------------
many  counterparts as may be necessary,  each of which so signed shall be deemed

<PAGE>

                                       164

to be an original,  and such counterparts  together shall constitute one and the
same instrument and notwithstanding the date of execution will be deemed to bear
the execution date as set forth on the front page of this Agreement.

11.08  No Partnership or Agency.  The Parties have not created a partnership and
       ------------------------
nothing  contained in this Agreement shall in any manner  whatsoever  constitute
any Party the partner,  agent or legal  representative  of the other Party,  nor
create any fiduciary  relationship  between them for any purpose whatsoever.  No
Party  shall have any  authority  to act for,  or to assume any  obligations  or
responsibility  on behalf of,  the other  Party  except as may be,  from time to
time,  agreed  upon in writing  between the  Parties or as  otherwise  expressly
provided.

11.09  Consents and Waivers. No consent or waiver expressed or implied by either
       --------------------
Party in respect of any  breach or  default by the other in the  performance  by
such other of its obligations hereunder shall:

       (a)    be valid  unless it is in  writing  and  stated to be a consent or
              waiver pursuant to this section;

       (b)    be relied  upon as a consent  to or waiver of any other  breach or
              default of the same or any other obligation;

       (c)    constitute a general waiver under this Agreement; or

       (d)    eliminate  or modify  the need for a  specific  consent  or waiver
              pursuant to this section in any other or subsequent instance.

       IN WITNESS  WHEREOF the Parties  hereto have hereunto set their hands and
       -------------------
seals in the presence of their duly authorized  signatories  effective as at the
date first above written.

SINOVAC BIOTECH LTD                         )
--------------------                        )
by its authorized signatory                 )
                                            )
                                            )
         /s/ Weidong Yin                    )
--------------------------------------------)
Authorized Signatory                        )

SEGUE VENTURES LLC.                         )
-------------------                         )
by its authorized signatory:                )
                                            )
                                            )
         /s/ Craig Bird                     )
--------------------------------------------)
Authorized Signatory                        )

                              End of Exhibit 10.11

                                   ----------Exhibit
4.1

 

FORM
OF CLASS D WARRANT

 

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

NOVADEL
PHARMA INC.

 

Class
D Warrant for the Purchase of Shares of Common Stock

 

	No.
      D-[         
    ]	
      ________
  Shares

     

THIS
COMMON STOCK PURCHASE WARRANT (this “Warrant”)
certifies that, for value received, _____________ (the “Holder”), is
entitled, upon the terms and subject to the limitations on exercise and the
conditions hereinafter set forth, at any time on or after the six month
anniversary of the date of the Purchase Agreement (the “Initial
Exercise Date”) and on
or prior to the close of business on the fifth anniversary of the Initial
Exercise Date (the “Termination
Date”) but
not thereafter, to subscribe for and purchase from NovaDel Pharma Inc., a
Delaware corporation (the “Company”), up to
______ shares (the “Warrant
Shares”) of
common stock, par value $0.001 per share, of the Company (the “Common
Stock”). The
purchase price of one share of Common Stock under this Warrant shall be equal to
the Exercise Price, as defined in Section 2(b).

 

Section
1.  Definitions.
Capitalized terms used and not otherwise defined herein shall have the meanings
set forth in that certain Securities Purchase Agreement (the “Purchase
Agreement”), dated
May 26, 2005, among the Company and the purchasers signatory
thereto.

 

Section
2.  Exercise.

 

(a)  Exercise
of Warrant.
Exercise of the purchase rights represented by this Warrant may be made, in
whole or in part, at any time or times on or after the Initial Exercise Date and
on or before the Termination Date by delivery to the Company of a duly executed
facsimile copy of the Notice of Exercise Form annexed hereto (or such other
office or agency of the Company as it may designate by notice in writing to the
registered Holder at the address of such Holder appearing on the books of the
Company); provided,
however, within
five (5) Trading Days of the date said Notice of Exercise is delivered to the
Company, the Holder shall have surrendered this Warrant to the Company and the
Company shall have received payment of the aggregate Exercise Price of the
shares thereby purchased by wire transfer or cashier’s check drawn on a United
States bank. 

 

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(b)  Exercise
Price. The
exercise price of the Common Stock under this Warrant shall be $1.30, subject to
adjustment hereunder (the “Exercise
Price”).

 

(c)  Cashless
Exercise. This
Warrant may also be exercised at any time by means of a “cashless exercise” in
which the Holder shall be entitled to receive a certificate for the number of
Warrant Shares equal to the quotient obtained by dividing [(A-B) (X)] by (A),
where:

 

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

 

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

 

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

(d)  Mechanics
of Exercise.

 

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

 

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

 

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(iii)  Delivery
of New Warrants Upon Exercise. If this
Warrant shall have been exercised in part, the Company shall, within five
Trading Days after the time of delivery of the certificate or certificates
representing Warrant Shares, deliver to the Holder a new Warrant evidencing the
rights of the Holder to purchase the unpurchased Warrant Shares called for by
this Warrant, which new Warrant shall in all other respects be identical with
this Warrant.

 

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

 

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

 

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

 

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

 

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

 

Section
3.  Certain
Adjustments.

 

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

 

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(b)  Pro
Rata Distributions. If the
Company, at any time prior to the Termination Date, shall distribute to all
holders of Common Stock (and not to Holders of the Warrants) evidences of its
indebtedness or assets (including cash and cash dividends) or rights or warrants
to subscribe for or purchase any security other than the Common Stock (which
shall be subject to Section 3(b)), then in each such case the Exercise Price
shall be adjusted by multiplying the Exercise Price in effect immediately prior
to the record date fixed for determination of stockholders entitled to receive
such distribution by a fraction of which the denominator shall be the Closing
Price determined as of the record date or effective date, as the case may be,
mentioned in Section 3(a), and of which the numerator shall be such Closing
Price on such date less the then per share fair market value at such date of the
portion of such assets or evidence of indebtedness so distributed applicable to
one outstanding share of the Common Stock (determined by dividing the amount
distributed by the then issued and outstanding shares of Common Stock) as
determined by the Board of Directors in good faith. In either case the
adjustments shall be described in a statement provided to the Holders of the
portion of assets or evidences of indebtedness so distributed or such
subscription rights applicable to one share of Common Stock. Such adjustment
shall be made whenever any such distribution is made and shall become effective
immediately after the record date mentioned above.

 

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

 

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(d)  Calculations. All
calculations under this Section 3 shall be made to the nearest cent or the
nearest 1/100th of a share, as the case may be. For purposes of this Section 3,
the number of shares of Common Stock deemed to be issued and outstanding as of a
given date shall be the sum of the number of shares of Common Stock (excluding
treasury shares, if any) issued and outstanding at the close of the Trading Day
on or, if not applicable, most recently preceding, such given date.

 

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

 

(f)  Minimum
Adjustment.
Notwithstanding anything in this Warrant to the contrary, no adjustment in the
Exercise Price shall be required unless such adjustment would require an
increase or decrease of at least $0.01 per share of Common Stock; provided,
however, that
any adjustments which by reason of this Subsection 3(f) are not required to be
made shall be carried forward and taken into account in any subsequent
adjustment; provided,
further,
however, that adjustments shall be required and made in accordance with the
provisions of this Section 3 (other than this Subsection 3(f)) not later than
such time as may be required in order to preserve the tax-free nature of a
distribution, if any, to the Holder of this Warrant or the Warrant Shares.
Notwithstanding anything in this Section 3 to the contrary, the Company shall be
entitled to make such reductions in the Exercise Price, in addition to those
required by this Section 3, as it in its discretion shall deem to be advisable
in order that any stock dividend, subdivision of shares or distribution of
rights to purchase stock or securities convertible or exchangeable for stock
hereafter made by the Company to its stockholders shall not be
taxable.

 

(g)  Notice
to Holders.

 

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

 

(ii)  Notice
to Allow Exercise by Holder. If: (A)
the Company shall declare a dividend (or any other distribution) on the Common
Stock; (B) the Company shall declare a special nonrecurring cash dividend on or
a redemption of the Common Stock; (C) the Company shall authorize the granting
to all holders of the Common Stock rights or warrants to subscribe for or
purchase any shares of capital stock of any class or of any rights; (D) the
approval of any stockholders of the Company shall be required in connection with
any reclassification of the Common Stock, any consolidation or merger to which
the Company is a party, any sale or transfer of all or substantially all of the
assets of the Company, of any compulsory share exchange whereby the Common Stock
is converted into other securities, cash or property; (E) the Company shall
authorize the voluntary or involuntary dissolution, liquidation or winding up of
the affairs of the Company; then, in each case, the Company shall cause to be
mailed to the Holder at its last address as it shall appear upon the Warrant
Register (defined below) of the Company, at least 20 calendar days prior to the
applicable record or effective date hereinafter specified, a notice stating (x)
the record date established for the purpose of such dividend, distribution,
redemption, rights or warrants, or if a record is not to be taken, the date as
of which the holders of the Common Stock of record to be entitled to such
dividend, distributions, redemption, rights or warrants are to be determined or
(y) the record date established for such reclassification, consolidation,
merger, sale, transfer or share exchange is expected to become effective or
close, and the date as of which it is expected that holders of the Common Stock
of record shall be entitled to exchange their shares of the Common Stock for
securities, cash or other property deliverable upon such reclassification,
consolidation, merger, sale, transfer or share exchange; provided, that
the failure to mail such notice or any defect therein or in the mailing thereof
shall not affect the validity of the corporate action required to be specified
in such notice. Subject to applicable law, the Holder is entitled to exercise
this Warrant during the 20-day period commencing on the date of such notice to
the effective date of the event triggering such notice. Notwithstanding the
foregoing, the delivery of the notice described in this Section 3(h) is not
intended to and shall not bestow upon the Holder any voting rights whatsoever
with respect to outstanding unexercised Warrants.

 

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Section
4.  Transfer
of Warrant.

 

(a)  Transferability. Subject
to compliance with any applicable securities laws and the conditions set forth
in Sections 6(a) and 4(d) hereof and to the provisions of Section 4.1 of the
Purchase Agreement, this Warrant and all rights hereunder are transferable, in
whole or in part, upon surrender of this Warrant at the principal office of the
Company, together with a written assignment of this Warrant substantially in the
form attached hereto duly executed by the Holder or its agent or attorney and
funds sufficient to pay any transfer taxes payable upon the making of such
transfer. Upon such surrender and, if required, such payment, the Company shall
execute and deliver a new Warrant or Warrants dated the same date as this
Warrant in the name of the assignee or assignees and in the denomination or
denominations specified in such instrument of assignment, and shall issue to the
assignor a new Warrant evidencing the portion, if any, of this Warrant not so
assigned, and this Warrant shall promptly be cancelled. A Warrant, if properly
assigned, may be exercised by a new holder for the purchase of Warrant Shares
without having a new Warrant issued. 

 

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

 

(c)  Warrant
Register. The
Company shall register this Warrant, upon records to be maintained by the
Company for that purpose (the “Warrant
Register”), in
the name of the record Holder hereof from time to time. The Company may deem and
treat the registered Holder of this Warrant as the absolute owner hereof for the
purpose of any exercise hereof or any distribution to the Holder, and for all
other purposes, absent actual notice to the contrary. The Company shall permit
any Holder of a Warrant or its duly authorized attorney, upon written request
during ordinary business hours, to inspect and copy or make extracts from its
books showing the registered Holders of Warrants.

 

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

 

Section
5.  Investment
Intent; Limited Transferability.

 

(a)  By
accepting this Warrant, the Holder represents to the Company that it understands
that this Warrant has not been, and any securities obtainable upon exercise of
this Warrant may not have not been registered for sale under the Securities Act
or any state securities or “blue sky” laws and are being offered and sold to the
Holder pursuant to one or more exemptions from the registration requirements of
the Securities Act and applicable State securities or “blue sky” laws. In the
absence of an effective registration of such securities or an exemption
therefrom, any certificates for such securities shall bear a legend
substantially similar to the legend set forth in the Purchase Agreement. The
Holder understands that it may have to bear the economic risk of its investment
in this Warrant and any securities obtainable upon exercise of this Warrant for
an indefinite period of time, until such securities have been registered under
the Securities Act and any applicable state securities or “blue sky” laws and
therefore cannot be sold unless subsequently registered under such laws, or an
exemption from such registration is available. The Holder further represents to
the Company, by accepting this Warrant, that it has full power and authority to
accept this Warrant and make the representations set forth herein.

 

(b)  The
Holder agrees, by acceptance of this Warrant, that (i) this Warrant will not be
sold or otherwise transferred prior to the six-month anniversary of the date
hereof, and only pursuant to one or more exemptions from the Securities Act and
any applicable state securities or “blue sky” laws and (ii) the Warrant Shares
and any other shares of Common Stock issued to the Holder in connection with the
Warrant or the Warrant Shares will not be sold or otherwise transferred prior to
the six-month anniversary of the date hereof, and only pursuant to (A) an
effective registration statement under the Securities Act and any applicable
state securities or “blue sky” laws which registers such shares or (B) one or
more exemptions from the Securities Act and any applicable state securities or
“blue sky” laws.

 

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(c)  The
Holder agrees and acknowledges that this
Warrant may not be sold, transferred, assigned or hypothecated by the Holder
except in compliance with the provisions of the Securities Act and any
applicable State securities or “blue sky” laws.

 

Section
6.  Miscellaneous.

 

(a)  Title
to Warrant. Prior
to the Termination Date and subject to compliance with applicable laws and
Section 4 of this Warrant, this Warrant and all rights hereunder are
transferable, in whole or in part, at the office or agency of the Company by the
Holder in person or by duly authorized attorney, upon surrender of this Warrant
together with the Assignment Form annexed hereto properly endorsed and the legal
opinion required under Section 4(d). The transferee shall sign an investment
letter in form and substance reasonably satisfactory to the
Company.

 

(b)  No
Rights as Shareholder Until Exercise. This
Warrant does not entitle the Holder to any voting rights or other rights as a
shareholder of the Company prior to the exercise hereof. Upon the surrender of
this Warrant and the payment of the aggregate Exercise Price (or by means of a
cashless exercise), the Warrant Shares so purchased shall be and be deemed to be
issued to such Holder as the record owner of such shares as of the close of
business on the later of the date of such surrender and payment.

 

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

 

(d)  Saturdays,
Sundays, Holidays, etc. If the
last or appointed day for the taking of any action or the expiration of any
right required or granted herein shall be a Saturday, Sunday or a legal holiday,
then such action may be taken or such right may be exercised on the next
succeeding day not a Saturday, Sunday or legal holiday.

 

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

 

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

 

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

 

(f)  Jurisdiction. All
questions concerning the construction, validity, enforcement and interpretation
of this Warrant shall be determined in accordance with the governing law
provisions set forth in the Purchase Agreement.

 

(g)  Restrictions. The
Holder acknowledges that the Warrant Shares acquired upon the exercise of this
Warrant, if not registered, will have restrictions upon resale imposed by state
and federal securities laws and will contain a restrictive legend substantially
in the following form:

 

THESE
SECURITIES HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION
OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), AND,
ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES OR “BLUE SKY” LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE
TRANSFEROR REASONABLY ACCEPTABLE TO THE COMPANY TO SUCH EFFECT, THE SUBSTANCE OF
WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY. THESE SECURITIES MAY BE
PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY
SUCH SECURITIES.

 

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

 

(i)  Notices. Unless
otherwise specifically set forth herein, any notice, request or other document
required or permitted to be given or delivered to the Holder by the Company
shall be delivered in accordance with the notice provisions of the Purchase
Agreement.

 

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

 

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

 

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

 

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

 

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

 

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

 

- 11
-

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

 

	 	 	 
	 	NOVADEL PHARMA
      INC.
	 
 	 
 	 
 
	Dated: _____________,
    2005	By:  	
	 	
      

    
	 	
      Name:

      Title: 

 

 

 

- 12
-

NOTICE
OF EXERCISE

TO: NOVADEL
PHARMA INC.

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

 

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

 

[  ]
in lawful money of the United States; or

 

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

 

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

 

_______________________________

The
Warrant Shares shall be delivered to the following:

_______________________________

 

_______________________________

 

_______________________________

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

[SIGNATURE
OF HOLDER]

 

Name of
Investing Entity:
___________________________________________________________________________________

 

Signature
of Authorized Signatory of Investing Entity:
_____________________________________________________________

 

Social
Security or Tax ID#, if applicable:
_________________________________________________________________________

 

Name of
Authorized Signatory:
________________________________________________________________________________

 

Title of
Authorized Signatory:
_________________________________________________________________________________

 

Date:____________________________________________________________________________________________________

 

ASSIGNMENT
FORM

 

(To
assign the foregoing warrant, execute

this form
and supply required information. 

Do not
use this form to exercise the warrant.)

FOR VALUE
RECEIVED _______________ hereby sells, assigns and transfers unto
____________________ the foregoing Warrant and all rights evidenced thereby, and
does irrevocably constitute and appoint _____________________, attorney, to
transfer said Warrant on the books of NovaDel Pharma Inc. (the “Company”). As a
condition to this assignment, the Holder acknowledges that its assignee must
deliver a written instrument to the Company complying with the provisions of
Section 4(d) of the Warrant.

	Dated:	  	 	Signature:	  	 
	 	 	 	Address:	  	 
	 	 	 	 	  	 

        

     

PARTIAL
ASSIGNMENT

FOR VALUE
RECEIVED _______________ hereby assigns and transfers unto ____________________
the right to purchase _______ shares of the common stock, par value $.001 per
share, of NovaDel Pharma Inc. (the “Company”), as
set forth in the foregoing Warrant, and a proportionate part of said Warrant and
the rights evidenced thereby, and does irrevocably constitute and appoint
____________________, attorney, to transfer that part of said Warrant on the
books of the Company. As a condition to this assignment, the Holder acknowledges
that its assignee must deliver a written instrument to the Company complying
with the provisions of Section 4(d) of the Warrant.

	Dated:	  	 	Signature:	  	 
	 	 	 	Address:	  	 
	 	 	 	 	  	 

        

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

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