Document:

WARRANT
      TO PURCHASE COMMON STOCK

    
      
 

      THIS
        WARRANT AND THE SECURITIES ISSUABLE HEREUNDER HAVE NOT BEEN REGISTERED UNDER
        THE
        SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS. THEY MAY
        NOT
        BE SOLD, OFFERED FOR SALE, PLEDGED OR OTHERWISE TRANSFERRED IN THE ABSENCE
        OF AN
        EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT AND ANY APPLICABLE STATE
        SECURITIES LAWS OR THE AVAILABILITY OF AN EXEMPTION FROM REGISTRATION UNDER
        SUCH
        ACT AND ANY APPLICABLE STATE SECURITIES LAWS. 

       

      WARRANT
        TO PURCHASE COMMON STOCK

       

      
        	
                Number
                  of Shares:

              	
                Up
                  to _____________ shares (subject to adjustment)

              
	 	 
	
                Warrant
                  Price:

              	
                $0.01
                  per share

              
	 	 
	
                Issuance
                  Date:

              	
                October
                  17, 2007

              
	 	 
	
                Expiration
                  Date:

              	
                October
                  17, 2017

              

      

      

      

      THIS
        WARRANT CERTIFIES THAT
        for
        value received, _________________________, or its registered assigns
        (hereinafter called the “Holder”)
        is
        entitled to purchase from Medical Discoveris, Inc., a Utah corporation
        (hereinafter called the “Company”),
        the
        above referenced number of fully paid and nonassessable shares (the
“Shares”)
        of
        common stock, no par value (the “Common
        Stock”)
        of
        Company, at the Warrant Price per Share referenced above; the number of shares
        purchasable upon exercise of this Warrant referenced above being subject
        to
        adjustment from time to time as described herein. This Warrant is issued
        in
        connection with that certain Release and Settlement Agreement dated as of
        October 17, 2007, by and among the Company, Holder and the other parties
        therein
        named (the “Settlement
        Agreement”).
        The
        exercise of this Warrant shall be subject to the provisions, limitations
        and
        restrictions contained herein.

       

      1.  Term
        and Exercise.

       

      1.1  Term.
        This
        Warrant is exercisable in whole or in part (but not as to any fractional
        share
        of Common Stock), at any time and from time to time after the date hereof
        prior
        to 6:00 p.m. on the Expiration Date set forth above. 

       

      1.2  Warrant
        Price.
        The
        Warrant shall be exercisable at the Warrant Price described above.

       

      1.3  Maximum
        Number of Shares.
        The
        maximum number of Shares of Common Stock exercisable pursuant to this Warrant
        is
        ____________ Shares. However, notwithstanding anything herein to the contrary,
        in no event shall the Holder be permitted to exercise this Warrant for a
        number
        of Shares greater than the number that would cause the aggregate beneficial
        ownership of the Company’s Common Stock (calculated pursuant to Rule 13d-3 of
        the Securities Exchange Act of 1934, as amended) of the Holder and all persons
        affiliated with the Holder to equal 9.99% of
        the
        Company’s Common Stock then outstanding. 

       

      1.4  Procedure
        for Exercise of Warrant.
        Holder
        may exercise this Warrant by delivering the following to the principal office
        of
        the Company in accordance with Section 5.1 hereof: (i) a duly executed
        Notice of Exercise in substantially the form attached as Schedule A,
        (ii) payment of the Warrant Price then in effect for each of the Shares
        being purchased, as designated in the Notice of Exercise, and (iii) this
        Warrant. Payment of the Warrant Price may be in cash, certified or official
        bank
        check payable to the order of the Company, wire transfer of funds to the
        Company’s account (or any combination of any of the foregoing) in the amount of
        the Warrant Price for each share being purchased, or as set forth in Section
        1.8
        hereof. 

       

      1.5  Delivery
        of Certificate and New Warrant.
        In the
        event of any exercise of the rights represented by this Warrant, a certificate
        or certificates for the shares of Common Stock so purchased, registered in
        the
        name of the Holder or such other name or names as may be designated by the
        Holder, together with any other securities or other property which the Holder
        is
        entitled to receive upon exercise of this Warrant, shall be delivered to
        the
        Holder hereof, at the Company’s expense, within a reasonable time, not exceeding
        fifteen (15) calendar days, after the rights represented by this Warrant
        shall
        have been so exercised; and, unless this Warrant has expired, a new Warrant
        representing the number of Shares (except a remaining fractional share),
        if any,
        with respect to which this Warrant shall not then have been exercised shall
        also
        be issued to the Holder hereof within such time. The person in whose name
        any
        certificate for shares of Common Stock is issued upon exercise of this Warrant
        shall for all purposes be deemed to have become the holder of record of such
        shares on the date on which the Warrant was surrendered and payment of the
        Warrant Price was received by the Company, irrespective of the date of delivery
        of such certificate, except that, if the date of such surrender and payment
        is
        on a date when the stock transfer books of the Company are closed, such person
        shall be deemed to have become the holder of such Shares at the close of
        business on the next succeeding date on which the stock transfer books are
        open.

       

      1.6  Restrictive
        Legend.
        Each
        certificate for Shares shall bear a restrictive legend in substantially the
        form
        as follows, together with any additional legend required by (i) any
        applicable state securities laws and (ii) any securities exchange upon
        which such Shares may, at the time of such exercise, be listed:

       

      “The
        shares of stock evidenced by this certificate have not been registered under
        the
        U.S. Securities Act of 1933, as amended, and may not be offered, sold, pledged
        or otherwise transferred ("transferred") in the absence of such registration
        or
        an applicable exemption therefrom. In the absence of such registration, such
        shares may not be transferred unless, if the Company requests, the Company
        has
        received a written opinion from counsel in form and substance satisfactory
        to
        the Company stating that such transfer is being made in compliance with all
        applicable federal and state securities laws.”

       

      Any
        certificate issued at any time in exchange or substitution for any certificate
        bearing such legend shall also bear such legend unless, in the opinion of
        counsel for the Holder thereof (which counsel shall be reasonably satisfactory
        to the Company), the securities represented thereby are not, at such time,
        required by law to bear such legend.

       

      1.7  Fractional
        Shares.
        No
        fractional Shares shall be issuable upon exercise or conversion of the Warrant
        and the number of Shares to be issued shall be rounded down to the nearest
        whole
        Share. If a fractional share interest arises upon any exercise or conversion
        of
        the Warrant, the Company shall eliminate such fractional share interest by
        paying to Holder an amount computed by multiplying the fractional interest
        by
        the Warrant Price of a full Share then in effect.

       

      
        
          
          

        

        
          1

          
            

          

        

        
          
          

        

      

       

      1.8  Cashless
        Exercise.

       

      (a)  Holder
        may, at its option, in lieu of paying the Warrant Price upon exercise of
        this
        Warrant pursuant to Section 1.4 hereof, elect to instead to receive a number
        of
        Shares computed using the following formula:

       

      X=Y(A-B)

      A

      

      Where
        X=
        the number of Shares issuable to Holder upon exercise of this Warrant under
        this
        Section 1.8, Y=the number of Shares issuable to Holder upon exercise of this
        Warrant under Section 1.4 herof, A=the Fair Market Value (as defined below)
        of
        one Share of Common Stock as of the exercise date; and B=the Warrant Price
        of
        one Share of Common Stock.

       

      (b)  For
        purposes of this Section 1.8, "Fair
        Market Value"
        of one
        Share of Common Stock as of a particular date shall be determined as follows:
        (i) if traded on a national securities exchange or through the Nasdaq Stock
        Market, the Fair Market Value shall be deemed to be the volume weighted average
        closing price of the Common Stock on such exchange as of five business days
        immediately prior to such date (or if no reported sales took place on such
        day,
        the last date on which any such sales took place prior to the date of exercise);
        (ii) if traded over-the-counter or the Pink Sheets but not on the Nasdaq
        Stock
        Market, the "Fair Market Value" shall be deemed to be the average of the
        closing
        price as of five business days immediately prior to such date; and (iii)
        if
        there is no active market public market, the "Fair Market Value' shall the
        fair
        market, as mutually determined by the Holder and the Company or, if the Holder
        and the Company are unable to reach such agreement, as determined by a
        nationally recognized independent investment banker or valuation consultant
        (which has not been retained by the Company or any of its affiliates for
        the
        past two years preceding such determination) mutually acceptable to Holder
        and
        Company.

       

      2.  Representations,
        Warranties and Covenants.

       

      2.1 
Representations
        and Warranties.

       

      (a)  The
        Company is a corporation duly organized, validly existing and in good standing
        under the laws of its state of incorporation and has all necessary power
        and
        authority to perform its obligations under this Warrant;

       

      (b)  The
        execution, delivery and performance of this Warrant has been duly authorized
        by
        all necessary actions on the part of the Company and constitutes the legal,
        valid and binding obligation of the Company, enforceable against the Company
        in
        accordance with its terms; and

       

      (c)  This
        Warrant does not violate and is not in conflict with any of the provisions
        of
        the Company’s Articles of Incorporation, Bylaws and any resolutions of the
        Company’s Board of Directors or stockholders, or any agreement of the Company,
        and no event has occurred and no condition or circumstance exists that might
        (with or without notice or lapse of time) constitute or result directly or
        indirectly in such a violation or conflict.

       

      2.2  Issuance
        of Shares.
        The
        Company covenants and agrees that all shares of Common Stock that may be
        issued
        upon the exercise of the rights represented by this Warrant will, upon issuance,
        be validly issued, fully paid and nonassessable, and free from all taxes,
        liens
        and charges with respect to the issue thereof. The Company further covenants
        and
        agrees that it will pay when due and payable any and all federal and state
        taxes
        which may be payable in respect of the issue of this Warrant or any Common
        Stock
        or certificates therefor issuable upon the exercise of this Warrant excluding
        the Holder's income and other taxes not directly relating to the issuance
        of the
        Warrant or Common Stock. The Company further covenants and agrees that the
        Company will at all times have authorized and reserved, free from preemptive
        rights, a sufficient number of shares of Common Stock to provide for the
        exercise in full of the rights represented by this Warrant. If at any time
        the
        number of authorized but unissued shares of Common Stock of the Company shall
        not be sufficient to effect the exercise of the Warrant in full, subject
        to the
        limitations set forth in Section 1.3 hereto, then the Company will take all
        such
        corporate action as may, in the opinion of counsel to the Company, be necessary
        or advisable to increase the number of its authorized shares of Common Stock
        as
        shall be sufficient to permit the exercise of the Warrant in full, subject
        to
        the limitations set forth in Section 1.3 hereto, including without limitation,
        using its best efforts to obtain any necessary stockholder approval of such
        increase. The Company further covenants and agrees that if any shares of
        capital
        stock to be reserved for the purpose of the issuance of shares upon the exercise
        of this Warrant require registration with or approval of any governmental
        authority under any federal or state law before such shares may be validly
        issued or delivered upon exercise, then the Company will in good faith and
        as
        expeditiously as possible endeavor to secure such registration or approval,
        as
        the case may be. If and so long as the Common Stock issuable upon the exercise
        of this Warrant is listed on any national securities exchange or the Nasdaq
        Stock Market, the Company will, if permitted by the rules of such exchange
        or
        market, list and keep listed on such exchange or market, upon official notice
        of
        issuance, all shares of such Common Stock issuable upon exercise of this
        Warrant.

       

      3.  Other
        Adjustments.

       

      3.1  Subdivision
        or Combination of Shares.
        In case
        the Company shall at any time subdivide its outstanding Common Stock into
        a
        greater number of shares, the Warrant Price in effect immediately prior to
        such
        subdivision shall be proportionately reduced, and the number of Shares subject
        to this Warrant shall be proportionately increased, and conversely, in case
        the
        outstanding Common Stock of the Company shall be combined into a smaller
        number
        of shares, the Warrant Price in effect immediately prior to such combination
        shall be proportionately increased, and the number of Shares subject to this
        Warrant shall be proportionately decreased.

       

      3.2  Dividends
        in Common Stock, Other Stock or Property.
        If at
        any time or from time to time the holders of Common Stock (or any shares
        of
        stock or other securities at the time receivable upon the exercise of this
        Warrant) shall have received or become entitled to receive, without payment
        therefor:

       

      (a)  Common
        Stock, Options or any shares or other securities which are at any time directly
        or indirectly convertible into or exchangeable for Common Stock, or any rights
        or options to subscribe for, purchase or otherwise acquire any of the foregoing
        by way of dividend or other distribution;

       

      (b)  any
        cash paid or payable otherwise than as a regular cash dividend; or

       

      (c)  Common
        Stock or additional shares or other securities or property (including cash)
        by
        way of spin-off, split-up, reclassification, combination of shares or similar
        corporate rearrangement (other than Common Stock issued as a stock split
        or
        adjustments in respect of which shall be covered by the terms of Section
        3.1
        above) or additional shares, other securities or property issued in connection
        with a Change (as defined below) (which shall be covered by the terms of
        Section
        3.3 below), then and in each such case, the Holder hereof shall, upon the
        exercise of this Warrant, be entitled to receive, in addition to the number
        of
        shares of Common Stock receivable thereupon, and without payment of any
        additional consideration therefor, the amount of stock and other securities
        and
        property (including cash in the cases referred to in clause (b) above and
        this
        clause (c)) which such Holder would hold on the date of such exercise had
        such
        Holder been the holder of record of such Common Stock as of the date on which
        holders of Common Stock received or became entitled to receive such shares
        or
        all other additional stock and other securities and property.

       

      3.3  Reorganization,
        Reclassification, Consolidation, Merger or Sale.
        If
        any
        recapitalization, reclassification or reorganization of the share capital
        of the
        Company, or any consolidation or merger of the Company with another corporation,
        or the sale of all or substantially all of its shares and/or assets or other
        transaction (including, without limitation, a sale of substantially all of
        its
        assets followed by a liquidation) shall be effected in such a way that holders
        of Common Stock shall be entitled to receive shares, securities or other
        assets
        or property (a “Change”),
        then,
        as a condition of such Change, lawful and adequate provisions shall be made
        by
        the Company whereby the Holder hereof shall thereafter have the right to
        purchase and receive (in lieu of the Common Stock of the Company immediately
        theretofore purchasable and receivable upon the exercise of the rights
        represented hereby) such shares, securities or other assets or property as
        may
        be issued or payable with respect to or in exchange for the number of
        outstanding Common Stock which such Holder would have been entitled to receive
        had such Holder exercised this Warrant immediately prior to the consummation
        of
        such Change. The Company or its successor shall promptly issue to Holder
        a new
        Warrant for such new securities or other property. The new Warrant shall
        provide
        for adjustments which shall be as nearly equivalent as may be practicable
        to
        give effect to the adjustments provided for in this Section 3 including,
        without
        limitation, adjustments to the Warrant Price and to the number of securities
        or
        property issuable upon exercise of the new Warrant. The provisions of this
        Section 3.3 shall similarly apply to successive Changes.

       

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

       

      4.  Ownership
        and Transfer.

       

      4.1  Ownership
        of This Warrant.
        The
        Company may deem and treat the person in whose name this Warrant is registered
        as the holder and owner hereof (notwithstanding any notations of ownership
        or
        writing hereon made by anyone other than the Company) for all purposes and
        shall
        not be affected by any notice to the contrary until presentation of this
        Warrant
        for registration of transfer as provided in this Section 4.

       

      4.2  Transfer
        and Replacement.
        This
        Warrant and all rights hereunder are transferable in whole or in part upon
        the
        books of the Company by the Holder hereof in person or by duly authorized
        attorney, and a new Warrant or Warrants, of the same tenor as this Warrant
        but
        registered in the name of the transferee or transferees (and in the name
        of the
        Holder, if a partial transfer is effected) shall be made and delivered by
        the
        Company upon surrender of this Warrant duly endorsed, at the office of the
        Company in accordance with Section 5.1 hereof. Upon receipt by the Company
        of
        evidence reasonably satisfactory to it of the loss, theft or destruction,
        and,
        in such case, of indemnity or security reasonably satisfactory to it, and
        upon
        surrender of this Warrant if mutilated, the Company will make and deliver
        a new
        Warrant of like tenor, in lieu of this Warrant; provided that if the Holder
        hereof is an instrumentality of a state or local government or an institutional
        holder or a nominee for such an instrumentality or institutional holder an
        irrevocable agreement of indemnity by such Holder shall be sufficient for
        all
        purposes of this Warrant, and no evidence of loss or theft or destruction
        shall
        be necessary. This Warrant shall be promptly cancelled by the Company upon
        the
        surrender hereof in connection with any transfer or replacement. Except as
        otherwise provided above, in the case of the loss, theft or destruction of
        a
        Warrant, the Company shall pay all expenses, taxes and other charges payable
        in
        connection with any transfer or replacement of this Warrant, other than income
        taxes and stock transfer taxes (if any) payable in connection with a transfer
        of
        this Warrant, which shall be payable by the Holder. Holder will not transfer
        this Warrant and the rights hereunder except in compliance with federal and
        state securities laws and except after providing evidence of such compliance
        reasonably satisfactory to the Company.

       

      5.  Miscellaneous
        Provisions.

       

      5.1  Notices.
        Any
        notice or other document required or permitted to be given or delivered to
        the
        Holder shall be delivered or forwarded to the Holder at c/o M.A.G. Capital,
        LLC,
        555 South Flower Street, Suite 4200, Los Angeles, California 90071, Attention:
        David F. Firestone (Facsimile No. 213/553-8285), or to such other address
        or number as shall have been furnished to the Company in writing by the Holder,
        with a copy to Paula Winner Barnett, Esq., 17967 Boris Drive, Encino, CA
        91316
        (Facsimile No. 818/743-7491). Any notice or other document required or permitted
        to be given or delivered to the Company shall be delivered or forwarded to
        the
        Company at Medical Discoveries, Inc. c/o Sunhaven Farms 30103 West Gwinn
        Road,
        Prosser, WA 99350 (Facsimile No. 509/786-2010), or to such other address
        or
        number as shall have been furnished to Holder in writing by the Company or
        to
        the Company by Holder, with copy to Troy Gould PC, 1801 Century Park East,
        Suite
        1600, Los Angeles, CA 90067, Attention: Istvan Benko, Esq. (Facsimile No.
        310/789-1426).

       

      5.2  All
        notices, requests and approvals required by this Warrant shall be in writing
        and
        shall be conclusively deemed to be given (i) when hand-delivered to the other
        party, (ii) when received if sent by facsimile at the address and number
        set
        forth above; provided that notices given by facsimile shall not be effective,
        unless either (a) a duplicate copy of such facsimile notice is promptly given
        by
        depositing the same in the mail, postage prepaid and addressed to the party
        as
        set forth below or (b) the receiving party delivers a written confirmation
        of
        receipt for such notice by any other method permitted under this paragraph;
        and
        further provided that any notice given by facsimile received after 5:00 p.m.
        (recipient’s time) or on a non-business day shall be deemed received on the next
        business day; (iii) five (5) business days after deposit in the United States
        mail, certified, return receipt requested, postage prepaid, and addressed
        to the
        party as set forth below; or (iv) the next business day after deposit with
        an
        international overnight delivery service, postage prepaid, addressed to the
        party as set forth below with next business day delivery guaranteed; provided
        that the sending party receives confirmation of delivery from the delivery
        service provider.

       

      5.3  No
        Rights as Shareholder; Limitation of Liability.
        This
        Warrant shall not entitle the Holder to any of the rights of a shareholder
        of
        the Company except upon exercise in accordance with the terms hereof. No
        provision hereof, in the absence of affirmative action by the Holder to purchase
        shares of Common Stock, and no mere enumeration herein of the rights or
        privileges of the Holder, shall give rise to any liability of the Holder
        for the
        Warrant Price hereunder or as a shareholder of the Company, whether such
        liability is asserted by the Company or by creditors of the
        Company.

       

      5.4  Governing
        Law.
        This
        Warrant shall be governed by and construed in accordance with the laws of
        the
        State of California as applied to agreements among California residents made
        and
        to be performed entirely within the State of California, without giving effect
        to the conflict of law principles thereof.

       

      5.5  Binding
        Effect on Successors.
        This
        Warrant shall be binding upon any corporation succeeding the Company by merger,
        consolidation or acquisition of all or substantially all of the Company’s assets
        and/or securities. All of the obligations of the Company relating to the
        Shares
        issuable upon the exercise of this Warrant shall survive the exercise and
        termination of this Warrant. All of the covenants and agreements of the Company
        shall inure to the benefit of the successors and assigns of the
        Holder.

       

      5.6  Waiver,
        Amendments and Headings.
        This
        Warrant and any provision hereof may be changed, waived, discharged or
        terminated only by an instrument in writing signed by both parties (either
        generally or in a particular instance and either retroactively or
        prospectively). The headings in this Warrant are for purposes of reference
        only
        and shall not affect the meaning or construction of any of the provisions
        hereof. 

       

      5.7  Jurisdiction.
        Each of
        the parties irrevocably agrees that any and all suits or proceedings based
        on or
        arising under this Agreement may be brought only in and shall be resolved
        in the
        federal or state courts located in the City of Los Angeles, California and
        consents to the jurisdiction of such courts for such purpose. Each of the
        parties irrevocably waives the defense of an inconvenient forum to the
        maintenance of such suit or proceeding in any such court. Each of the parties
        further agrees that service of process upon such party mailed by first class
        mail to the address set forth in Section 5.1 shall be deemed in every respect
        effective service of process upon such party in any such suit or proceeding.
        Nothing herein shall affect the right of a Holder to serve process in any
        other
        manner permitted by law. Each of the parties agrees that a final non-appealable
        judgment in any such suit or proceeding shall be conclusive and may be enforced
        in other jurisdictions by suit on such judgment or in any other lawful
        manner.

       

      5.8  Attorneys'
        Fees and Disbursements.
        If any
        action at law or in equity is necessary to enforce or interpret the terms
        of
        this Agreement, the prevailing party or parties shall be entitled to receive
        from the other party or parties reasonable attorneys’ fees and disbursements in
        addition to any other relief to which the prevailing party or parties may
        be
        entitled. 

      

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

       

      IN
        WITNESS WHEREOF,
        the
        Company has caused this Warrant to be signed by its duly authorized officer
        this
        17th
        day of
        October, 2007.

       

      
        	 	 	 
	
                COMPANY:

              	MEDICAL
                DISCOVERIES, INC. 
	 
 	 
 	 
 
	 	By:  	 
	 	 	
                

              
	 	Print Name: David
                R.
                Walker
	 	 
	 	
                Title:
                  Chairman of the Board of
                  Directors

              

      

    

     

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    
       

      SCHEDULE
        A

      
        

        FORM
          OF NOTICE OF EXERCISE

        

        [To
          be signed only upon exercise of the Warrant]

        

        TO
          BE EXECUTED BY THE REGISTERED HOLDER

        TO
          EXERCISE THE WITHIN WARRANT

        

        

        The
          undersigned hereby elects to purchase _______ shares of Common Stock (the
          “Shares”) of Medical Discoveries, Inc. under the Warrant to Purchase Common
          Stock dated October 17, 2007, which the undersigned is entitled to purchase
          pursuant to the terms of such Warrant, and [check one]:

         

        
          	
                  o

                	
                  Cash
                    Exercise.
                    The undersigned has delivered $_______, the aggregate Warrant
                    Price for
                    _____ Shares purchased herewith, in full in cash or by certified
                    or
                    official bank check or wire
                    transfer;

                

        

        

        
          	
                  o

                	
                  Net
                    Exercise.
                    In exchange for the issuance of _______ Shares, the undersigned
                    hereby
                    agrees to surrender the right to purchase _______ shares of Common
                    Stock
                    pursuant to the net exercise provisions set forth in Section
                    1.8 of the
                    Warrant.

                

        

        

        Please
          issue a certificate or certificates representing such shares of Common
          Stock in
          the name of the undersigned or in such other name as is specified below
          and in
          the denominations as is set forth below:

         

        
          	 	   
                  	 

        

        [Type
          Name of Holder as it should appear on the stock certificate]

         

        
           

          
            	 	   
                    	 

          

        

        [Requested
          Denominations - if no denomination is specified, a single certificate will
          be
          issued]

         

        The
          initial address of such Holder to be entered on the books of Company shall
          be:

         

        
          	 	      	 
	 	     	 
	 	      	 

        

         

        The
          undersigned hereby represents and warrants that the undersigned is acquiring
          such shares for his own account for investment purposes only, and not for
          resale
          or with a view to distribution of such shares or any part thereof.

         

        

        
          	 	By:	  

	 	 	 
	 	Print
                  Name:	   
                  
	 	 	 
	 	Title:	  

	 	 	 
	 	Dated:	  
                  

        

         

        
          
            
            

          

          
            5

            
              

            

          

          
            
            

          

        

         

      

      FORM
        OF ASSIGNMENT

      (ENTIRE)

      

      [To
        be signed only upon transfer of entire Warrant]

      

      TO
        BE EXECUTED BY THE REGISTERED HOLDER

      TO
        TRANSFER THE WITHIN WARRANT

      

      

       

      FOR
        VALUE RECEIVED
        ___________________________ hereby sells, assigns and transfers unto
        _______________________________ all rights of the undersigned under and pursuant
        to the within Warrant, and the undersigned does hereby irrevocably constitute
        and appoint _____________________ Attorney to transfer the said Warrant on
        the
        books of ________ _________, with full power of substitution.

      

       

       

      
        	      	 

      

      [Type
        Name of Holder]

       

      

       

      
        	By:	   	 
	Title:
                	   
                	 
	 	 	 
	 	 	 
	 	 	 
	Dated:  	   
                	 

      

        

       

       

      

      NOTICE

      The
        signature to the foregoing Assignment must correspond exactly to the name
        as
        written upon the face of the within Warrant, without alteration or enlargement
        or any change whatsoever.

       

      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

       

      FORM
        OF ASSIGNMENT

      (PARTIAL)

       

      [To
        be signed only upon partial transfer of Warrant]

       

      TO
        BE EXECUTED BY THE REGISTERED HOLDER

      TO
        TRANSFER THE WITHIN WARRANT

       

       

      FOR
        VALUE
        RECEIVED ___________________________ hereby sells, assigns and transfers
        unto
        ____________________________ (i) the rights of the undersigned to purchase
        ____________________ shares of Common Stock under and pursuant to the within
        Warrant, and (ii) on a non-exclusive basis, all other rights of the
        undersigned under and pursuant to the within Warrant, it being understood
        that
        the undersigned shall retain, severally (and not jointly) with the transferee(s)
        named herein, all rights assigned on such non-exclusive basis.  The
        undersigned does hereby irrevocably constitute and appoint
        __________________________ Attorney to transfer the said Warrant on the books
        of
        Rentech, Inc.,  with full power of substitution.

      
         

         

        
          	      	 

        

        [Type
          Name of Holder]

         

        

         

        
          	By:	  
	 	     
	Title:
                  	   
                  	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	Dated:  	   
                  	 	 

        

          

      

       

       

      NOTICE

      The
        signature to the foregoing Assignment must correspond exactly to the name
        as
        written upon the face of the within Warrant, without alteration or enlargement
        or any change whatsoever.

      

      
        
          
          

        

        
          7SETTLEMENT
      AGREEMENT

     

    This
      Agreement (this “Agreement”)
      is
      made and entered into as of October 24, 2007, by and between Kensey Nash
      Corporation (the “Company”),
      and
      each of the entities and natural persons listed on Schedule
      A
      hereto
      (such entities and natural persons and any Ramius Nominee that executes a
      joinder to this Agreement, collectively, the “Ramius
      Group”)
      (each
      of the Company and the Ramius Group, a “Party”
to
      this
      Agreement, and collectively, the “Parties”).

     

    RECITALS

     

    A. The
      Ramius Group beneficially owns in the aggregate the number of shares of the
      Company’s outstanding common stock, par value $.001 per share (the “Common
      Stock”),
      set
      forth on Schedule
      A;

     

    B. Pursuant
      to a nomination letter duly submitted on October 5th
      in
      accordance with the Company’s Second Amended and Restated Bylaws (the
“Nomination
      Letter”),
      Starboard Value and Opportunity Master Fund Ltd., a member of the Ramius Group,
      has nominated a slate of three candidates for election to the Board of Directors
      of the Company (the “Board”)
      at the
      Company’s next Annual Meeting of Stockholders (including any adjournment or
      postponement thereof, the “2007
      Annual Meeting”),
      which
      is currently scheduled to be held on December 5, 2007;

     

    C. The
      Parties have agreed that Starboard
      Value and Opportunity Master Fund Ltd. shall
      withdraw its Nomination Letter and that the Ramius Group will not present any
      nominees or proposals at the 2007 Annual Meeting;

     

    D. The
      Governance and Nominating Committee of the Board (the “Nominating
      Committee”)
      has
      reviewed the qualifications of Jeffrey Smith and Ceasar Anquillare
      (collectively, the “Ramius
      Nominees”)
      to
      serve as members of the Board and has conducted inquiries into their respective
      backgrounds, skills and qualifications, including reviews of the Ramius
      Nominees’ responses to questionnaires, interviews of the Ramius Nominees and
      professional background investigations of the Ramius Nominees; and the
      Nominating Committee has evaluated the independence of the Ramius Nominees,
      the
      qualifications of Jeffrey Smith to serve as a member of the Nominating Committee
      of the Board and the qualifications of Ceasar Anquillare to serve as a member
      of
      the Audit Committee;

     

    E. The
      Nominating Committee has recommended to the entire Board that (i) the Board
      nominate the Ramius Nominees for election to the Board at the 2007 Annual
      Meeting, (ii) the Board determine that the Ramius Nominees are independent
      directors under the listing standards of The NASDAQ Stock Market (“NASDAQ”),
      and
      (iii) following their respective elections to the Board, Jeffrey Smith be
      appointed to the Nominating Committee of the Board and Ceasar Anquillare be
      appointed to the Audit Committee.

     

    F. The
      Board
      considered the recommendations of the Nominating Committee and after conducting
      such reviews of the Ramius Nominees as it has deemed appropriate, (i) has
      determined that neither Ramius Nominee has any relationship with the Company
      (either directly or as a partner, equity holder or officer of an organization
      that has a relationship with the Company) that would interfere with his exercise
      of independent judgment in carrying out the responsibilities of a member of
      the
      Board or any of its committees and that both Ramius Nominees are independent
      directors as defined under the rules of NASDAQ, and (ii) has determined
      that it is in the best interests of the stockholders of the Company to nominate
      the Ramius Nominees for election to the Board at the 2007 Annual Meeting, to
      serve for a term of three years expiring at the Company’s 2010 Annual Meeting of
      Stockholders, in place of two current members of the Company’s Board to be
      determined by the Company’s Board, and each of whose current terms will expire
      at the 2007 Annual Meeting, and to recommend the Ramius Nominees for election
      to
      the Board;

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

    G. The
      Ramius Group has determined to vote its shares of Common Stock in favor of
      the
      Ramius Nominees and one incumbent director whose current term of office expires
      in 2007 nominated by the Board to be elected as members of the Board at the
      2007
      Annual Meeting (such incumbent director, together with the Ramius Nominees,
      the
“2007
      Nominees”);

     

    H. The
      Ramius Group has agreed to certain restrictions on its actions, including
      restrictions relating to its acquisition of additional shares of Common Stock,
      from the date here of until and including the earlier of the day after the
      date
      of the Company’s 2008 Annual Meeting of Stockholders (the “2008
      Annual Meeting”)
      or the
      date that is thirty (30) days after the one-year anniversary date of the 2007
      Annual Meeting;

     

    I. The
      Company and the Ramius Group desire, in connection with the nomination of the
      Ramius Nominees to the Board, to make certain covenants and agreements with
      one
      another pursuant to this Agreement.

     

    NOW
      THEREFORE, in consideration of the covenants and premises set forth herein,
      and
      for other good and valuable consideration, the receipt and sufficiency of which
      are hereby acknowledged, the Parties hereto hereby agree as
      follows:

     

    1. Starboard
      Value and Opportunity Master Fund Ltd. hereby withdraws its Nomination
      Letter.

     

    2. The
      Board
      has agreed to nominate the Ramius Nominees to be elected as members of the
      Board
      at the 2007 Annual Meeting to serve for a term of three years expiring at the
      Company’s 2010 Annual Meeting of Stockholders and will recommend a vote “for”
the Ramius Nominees at the 2007 Annual Meeting and solicit proxies from all
      stockholders to vote all shares of Common Stock in favor of the election to
      the
      Board of the Ramius Nominees. At the 2007 Annual Meeting, the Ramius Group
      shall
      appear in person or by proxy and vote all shares of Common Stock beneficially
      owned by it and its Affiliates in favor of the election to the Board of the
      2007
      Nominees. The Ramius Group shall cause to be executed proxies for the 2007
      Nominees (in the form utilized by the Company to solicit proxies for all
      stockholders) so as to vote all shares of Common Stock beneficially owned by
      it
      and its Affiliates (as defined below) in favor of the election to the Board
      of
      the 2007 Nominees. The Ramius Group shall not withdraw or modify any such
      proxies.

     

    By
      execution of this Agreement, each of the Ramius Nominees hereby consents to
      be
      nominated for election to the Board at the 2007 Annual Meeting.

     

    3. In
      accordance with Article IV of the Company’s Second Amended and Restated Bylaws
      (the “Bylaws”),
      the
      Company shall take all action necessary in furtherance of:

     

    a. no
      later
      than seven (7) days following the election of the Ramius Nominees to the Board,
      the appointment of (i) Jeffrey Smith as a member of the Nominating
      Committee of the Board, and (ii) Ceasar Anquillare as a member of the Audit
      Committee of the Board;

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    b. the
      establishment of a strategic planning committee of the Board in connection
      with
      its strategic planning, and the appointment of Jeffrey Smith as a member of
      such
      committee; and

     

    c. the
      appointment of Jeffrey Smith as a member of any special committee of the Board
      that may be established.

     

    4. The
      Ramius Group and each member of the Ramius Group shall not (i) nominate any
      person for election at the 2007 Annual Meeting or (ii) submit any proposal
      for consideration at, or bring any other business before, the 2007 Annual
      Meeting, directly or indirectly. The Ramius Group shall not enter into any
      agreement, understanding or arrangement with the purpose or effect to cause
      or
      further any of the foregoing or otherwise engage in any activities with the
      purpose or effect to cause or further any of the foregoing. 

     

    The
      Company acknowledges that the only matters that shall be presented for
      consideration at the 2007 Annual Meeting include the election of the 2007
      Nominees, an amendment to the Company’s Fifth Amended and Restated Employee
      Incentive Compensation Plan to increase by up to 350,000 the
      number of shares of Common Stock authorized for issuance under it and the
      ratification of the Company’s independent registered public accounting
      firm.

     

    5. From
      the
      date hereof through the 2007 Annual Meeting, each of the Company, the Ramius
      Group and each member of the Ramius Group shall not directly or indirectly
      engage in any activities in opposition to the election of the 2007 Nominees
      at
      the 2007 Annual Meeting and shall not enter into any agreement, understanding
      or
      arrangement with the purpose or effect to cause or further any of the
      foregoing.

     

    6. The
      2007
      Annual Meeting shall be held on December 5, 2007 or within 30 days thereafter,
      at the time and place indicated in the notice of annual meeting to be sent
      to
      the stockholders of the Company in connection with the 2007 Annual
      Meeting.

     

    7. For
      a
      period commencing with the date hereof and ending on the earlier to occur of
      (i) the day after the date of the 2008 Annual Meeting or (ii) that
      date that is thirty (30) days after the one-year anniversary date of the 2007
      Annual Meeting (such period, the “Standstill
      Period”),
      neither the Ramius Group (nor Mr. Anquillare, individually, if he is no longer
      a
      member of a Section 13(d) group with RCG Starboard Advisors, LLC and its
      Affiliates) nor any of its members or any of their Affiliates shall, without
      the
      prior written consent of the Board, specifically expressed in a written
      resolution adopted by a majority vote of the entire Board:

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    a. acquire
      or agree to acquire, or publicly offer or propose to acquire, directly or
      indirectly, by purchase or otherwise, any voting securities or direct or
      indirect rights or options to acquire any voting securities of the Company
      or
      any subsidiary thereof, or of any successor to or person in control of the
      Company, such that, following any such acquisition, the Ramius Group, including
      its Affiliates, would hold, beneficially own or control in the aggregate in
      excess of 2,804,146 shares of Common Stock (the “Standstill
      Limit”);
      provided,
      however,
      (i) in the event that the share repurchase program (the “Repurchase
      Program”)
      announced by the Company on September 24, 2007 has not been completed (which
      completion, for this purpose, shall mean that shares have been purchased under
      the Repurchase Program for the maximum aggregate price for which shares may
      be
      repurchased under the Repurchase Program and all such shares shall have been
      canceled or shall be held in treasury) by the date that is eight (8) months
      from
      the date hereof (“Repurchase
      Date”),
      the
      Standstill Limit shall be that number of shares of Common Stock that is equal
      to
      the greatest of (A) 2,804,146, (B) such number of shares of Common Stock
      resulting from an increase in the Standstill Limit pursuant to clause (ii)
      below, and (C) 24.9% of the outstanding shares of Common Stock as of the
      Repurchase Date (the number of outstanding shares of Common Stock as of the
      Repurchase Date shall be communicated by the Company to Ramius Capital on behalf
      of the Ramius Group, within 2 business days of the Repurchase Date), (ii) in
      the
      event between the date hereof and the Repurchase Date the number of outstanding
      shares of Common Stock (as reported by the Company) increases above 11,945,621
      shares, the Standstill Limit shall increase by a number of shares equal to
      25%
      of the number of outstanding shares of Common Stock in excess of 11,945,621
      shares and any such increase as of the Repurchase Date shall survive the
      Repurchase Date, (iii) in the event that, as of any date after the Repurchase
      Date and prior to the termination hereof (any such date, a “Reset
      Date”),
      the
      Standstill Limit represents less than 23% of the outstanding shares of Common
      Stock as a result of the issuance by the Company after the Repurchase Date
      of a
      number of shares of Common Stock in excess of the number of shares repurchased
      by, and/or forfeited to, the Company after the Repurchase Date, then the
      Standstill Limit shall increase to that number of shares of Common Stock that
      is
      equal to 24.9% of the outstanding shares of Common Stock of the Company as
      of
      the applicable Reset Date, (iv) for purposes of the Standstill Limit, any shares
      of Common Stock (whether or not restricted) and options to purchase shares
      of
      Common Stock issued or granted to Mr. Smith in his capacity as a director of
      the
      Company shall not be deemed to be held, beneficially owned or controlled by
      the
      Ramius Group, and such shares shall not be deemed to be outstanding shares
      of
      Common Stock, and (v) for purposes of the Standstill Limit, any shares of Common
      Stock (whether or not restricted) and options to purchase shares of Common
      Stock
      issued or granted to Mr. Anquillare after the date hereof in his capacity as
      a
      director, and up to 10,000 shares of Common Stock otherwise acquired by Mr.
      Anquillare in his individual capacity, shall not be deemed to be held,
      beneficially owned or controlled by the Ramius Group, and such shares shall
      not
      be deemed to be outstanding shares of Common Stock; provided,
      further,
      that
      nothing herein shall limit the ability of any member of the Ramius Group to
      transfer any voting securities of the Company or direct or indirect rights
      or
      options to acquire any voting securities of the Company to any other member
      of
      the Ramius Group; and provided,
      further,
      that
      Affiliates of the Ramius Group that execute a joinder to this Agreement in
      a
      form reasonably acceptable to the Company shall become members of the Ramius
      Group at the time of such execution;

     

    b. except
      as
      provided in Section 8 hereof
      or
      as otherwise expressly provided in this Agreement, (i) initiate, propose,
      induce or attempt to induce any other person to initiate any stockholder
      proposal, nominate any person to be elected as a member of the Board or make
      any
      attempt to call a special meeting of stockholders of the Company,
      (ii) submit any proposal for consideration at, or bring any other business
      before, any meeting of stockholders of the Company, or request that the Company
      include any proposals or nominees for election as members of the Board in any
      Company proxy statement, (iii) engage, or in any way participate, directly
      or indirectly, in any “solicitation” (as such term is defined in Rule 14a-1(l)
      promulgated by the SEC under the Exchange Act) of proxies or consents (whether
      or not relating to the election or removal of directors), seek to advise,
      encourage or influence any Person with respect to the voting of any Company
      securities (except in support of Board-approved proposals), or
      (iv) otherwise communicate with the Company’s stockholders or others
      pursuant to Rule 14a-1(l)(2)(iv) under the Exchange Act; provided,
      however,
      that
      nothing herein shall limit the ability of the Ramius Group to vote its voting
      securities on any matter submitted to a vote of the stockholders of the Company
      or announce its opposition to any Board-approved proposals not supported by
      Mr.
      Smith or limit the ability of the Ramius Nominees to exercise their rights
      as
      members of the Board while serving as members of the Board;

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    c. make
      any
      public announcement with respect to, or publicly offer to effect, seek or
      propose (with or without conditions), any merger, acquisition, consolidation,
      other business combination, restructuring, recapitalization, tender offer,
      exchange offer or other extraordinary transaction with or involving the Company
      or any of its subsidiaries or any of its or their securities or assets;
provided,
      however,
      that
      nothing herein shall limit the ability of the Ramius Group to issue any
      communication contemplated by Rule 14a-1(l)(2)(iv) stating how they intend
      to
      vote and the reasons therefor with respect to any extraordinary transaction
      of
      any kind or nature between the Company and any third party unaffiliated with
      the
      Ramius Group; provided
      further,
      that
      nothing contained herein shall limit the ability of the Ramius Group to file
      an
      amendment or amendments to its Schedule 13D regarding the Common Stock of
      the Company as required by law or to make other securities or tax filings as
      required by law so long as the Ramius Group does not enter into any contract,
      arrangement, understanding or relationship (legal or otherwise) with respect
      to
      the Company’s voting securities, or otherwise take any action, in violation of
      clauses (a)-(f) of Section 7 hereof;

     

    d. (i)
      form,
      join or in any way participate in a “group” as defined in Section 13(d)(3) of
      the Securities Exchange Act of 1934, as amended, and the rules and regulations
      promulgated thereunder, other than a “group” that includes all or some lesser
      number of persons identified as members of the Ramius Group, but does not
      include any other members who are not currently identified as members of the
      Ramius Group, (ii) enter into any negotiation, contract, arrangement,
      understanding or relationship (legal or otherwise) with any third parties,
      other
      than members of the Ramius Group solely with respect to the members of the
      Ramius Group, in connection with any of the foregoing or with respect to the
      voting of any voting securities of the Company, (iii) or otherwise deposit
      any
      voting securities of the Company in any voting trust or subject any voting
      securities of the Company to any arrangement or agreement with respect to the
      voting of any voting securities of the Company, except as expressly set forth
      in
      this Agreement; 

     

    e. publicly
      seek or publicly request permission to do any of the foregoing or to amend
      or
      waive any provision of Section 7 hereof (including any of clauses (a)-(f)
      hereof), or make any public announcement with respect to any of the foregoing;
      or

     

    f. take,
      or
      cause others to take, any actions inconsistent with Section 7 hereof (including
      any of clauses (a)-(f) hereof).

     

    8. a. Notwithstanding
      the foregoing, on and after the date that is 30 days prior to the last date
      on
      which a stockholder of the Company may nominate, in accordance with the
      applicable procedures set forth in the Company’s Bylaws (which pursuant to the
      Bylaws, as in effect as of the date of this Agreement, is the date that is
      sixty
      (60) days prior to the meeting of stockholders at which a member of the Board
      will be elected), a person for election as a member of the Board at the 2008
      Annual Meeting (such date, the “2008 Nomination
      Deadline Date”),
      the
      Ramius Group shall not be prohibited from (i) nominating up to two persons
      for election at the 2008 Annual Meeting to serve for a term of three years
      expiring at the Company’s 2011 Annual Meeting of Stockholders in accordance with
      the Company’s procedures set forth in its Bylaws for stockholders to nominate
      persons for election to the Board, (ii) soliciting proxies with respect to
      the voting securities of the Company with respect to such nominees, or
      (iii) taking any actions in connection with the nomination of persons in
      connection with the 2008 Annual Meeting, including requesting a stockholder
      list
      and related information, filing an amendment or amendments to its
      Schedule 13D regarding the Common Stock of the Company as required by law
      or taking any other action related to the solicitation of proxies or written
      consents or making any public filings or announcements in furtherance thereof;
      provided, however, in the event that either Mr. Smith or Mr. Anquillare is
      no
      longer a member of the Board at the time the Ramius Group nominates persons
      for
      election in connection with the 2008 Annual Meeting, then the Ramius Group
      shall
      be permitted to nominate up to three persons for election at the 2008 Annual
      Meeting; provided further, in the event that the size of the Board is increased
      beyond nine members, the Ramius Group shall be permitted to nominate a number
      of
      persons for election at the 2008 Annual Meeting that is equal to the number
      of
      directors up for election at the 2008 Annual Meeting.

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    a. The
      Company shall provide RCG Starboard Advisors, LLC, a Delaware limited liability
      company (“RCG
      Starboard”)
      notice
      (i) of the date of the 2008 Annual Meeting not less than 45 days prior to
      the 2008 Nomination Deadline Date, and (ii) any amendment of the Company’s
      Bylaws that changes the time period during which or procedures by which a
      stockholder may, in accordance with the applicable procedures set forth in
      the
      Company’s Bylaws, nominate a person for election as a member of the Board at an
      annual meeting of stockholders, within not more than four (4) business days
      after such amendment (the “Bylaw
      Amendment Notice”).
      In
      the event that any such amendment of the Company’s Bylaws results in a deadline
      for either nomination of directors that is a date prior to the date of receipt
      of the Bylaw Amendment Notice by RCG Starboard, then RCG Starboard shall have
      ten (10) days from the date of its receipt of the Bylaw Amendment Notice to
      nominate persons for election as members of the Board at the 2008 Annual
      Meeting.

     

    9. Following
      the execution of this Agreement, the Company shall issue the press release
      announcing the terms of this Agreement, in the form attached hereto as
      Exhibit A (the “Press
      Release”),
      and
      shall file a Current Report on Form 8-K with the SEC disclosing the terms of
      this Agreement and attaching as exhibits this Agreement and the Press Release.
      None of the Parties hereto will make any other public statements (including
      in
      any filing with the SEC or any other regulatory or governmental agency,
      including any stock exchange) that are inconsistent with, or otherwise contrary
      to, the statements in the Press Release. Neither the Ramius Group nor any of
      its
      members shall make any public statements (including in any filing with the
      SEC
      or any other regulatory or governmental agency, including any stock exchange),
      except that it may amend its Schedule 13D regarding the Common Stock (as
      amended, the “Schedule
      13D”)
      as
      required by law and in a manner consistent with this Agreement and not
      inconsistent with, or otherwise contrary to, the statements in the Press
      Release.

     

    10. The
      Company shall reimburse the Ramius Group for its reasonable, documented
      out-of-pocket fees and expenses incurred (including legal expenses) in
      connection with the Schedule 13D, matters related to the 2007 Annual
      Meeting and the negotiation and execution of this Agreement, provided that
      such
      reimbursement shall not exceed $37,500 in the aggregate.

     

    11. The
      Ramius Group shall cause its Affiliates to comply with the terms of this
      Agreement. Each member of the Ramius Group listed herein, on behalf of himself
      or itself, as applicable, represents and warrants to the Company that (a) as
      of
      the date hereof, the Ramius Group and each member of the Ramius Group
      beneficially owns the number of shares of Common Stock as described opposite
      his
      or its name on Schedule A and Schedule A includes all Affiliates of any members
      of the Ramius Group that own any securities of the Company beneficially or
      of
      record, (b) this Agreement has been duly and validly authorized, executed and
      delivered by such member, and constitutes a valid and binding obligation and
      agreement of such member, enforceable against such member in accordance with
      its
      terms, (c) each signatory to this Agreement by any member of the Ramius Group
      has the authority to execute the Agreement on behalf of himself and the
      applicable member of the Ramius Group associated with that signatory’s name, and
      to bind such member of the Ramius Group to the terms hereof, (d) no member
      of
      the Ramius Group is party to any agreements regarding the voting of disposition
      of shares of Common Stock, (e) the execution, delivery and performance of this
      Agreement by each member of the Ramius Group does not and will not violate
      or
      conflict with (i) any law, rule, regulation, order, judgment or decree
      applicable to it, or (ii) result in any breach or violation of or
      constitute a default (or an event which with notice or lapse of time or both
      could become a default) under or pursuant to, or result in the loss of a
      material benefit under, or give any right of termination, amendment,
      acceleration or cancellation of, any organizational document, agreement,
      contract, commitment, understanding or arrangement to which such member is
      a
      party or by which it is bound, and (f) no consent, approval, authorization,
      license or clearance of, or filing or registration with, or notification to,
      any
      court, legislative, executive or regulatory authority or agency is required
      in
      order to permit any member of the Ramius Group to perform such member’s
      obligations under this Agreement, except for such as have been
      obtained.

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    The
      Company represents and warrants to the Ramius Group that (a) the Company has
      the
      corporate power and authority to execute the Agreement and to bind it thereto,
      (b) this Agreement has been duly and validly authorized, executed and delivered
      by the Company, constitutes a valid and binding obligation and agreement of
      the
      Company, and is enforceable against the Company in accordance with its terms,
      (c) the execution, delivery and performance of this Agreement by the Company
      does not and will not violate or conflict with (i) any law, rule,
      regulation, order, judgment or decree applicable to it, or (ii) result in
      any breach or violation of or constitute a default (or an event which with
      notice or lapse of time or both could become a default) under or pursuant to,
      or
      result in the loss of a material benefit under, or give any right of
      termination, amendment, acceleration or cancellation of, any organizational
      document, agreement, contract, commitment, understanding or arrangement to
      which
      the Company is a party or by which it is bound and (d) no consent, approval,
      authorization, license or clearance of, or filing or registration with, or
      notification to, any court, legislative, executive or regulatory authority
      or
      agency is required in order to permit the Company to perform its obligations
      under this Agreement, except for such as have been obtained.

     

    12. This
      Agreement constitutes the entire agreement between the Parties with respect
      to
      the subject matter hereof and supersedes all prior agreements understandings,
      both written and oral, among the Parties with respect to the subject matter
      hereof. No amendment or other modification of this Agreement may be made except
      in writing signed by an authorized representative of each of the Company and
      RCG
      Starboard.

     

    13. If
      at any
      time subsequent to the date hereof, any provision of this Agreement shall be
      held by any court of competent jurisdiction to be illegal, void or
      unenforceable, such provision shall be of no force and effect, but the
      illegality or unenforceability of such provision shall have no effect upon
      the
      legality or enforceability of any other provision of this
      Agreement.

     

    14. Each
      of
      the Ramius Group and the Company acknowledges and agrees that irreparable injury
      to the other would occur in the event any its obligations under this Agreement
      were not performed in accordance with the specific terms hereof or it otherwise
      breached this Agreement and that such injury would not be adequately compensable
      in damages. It is accordingly agreed by each of the Parties that a Party so
      moving (the “Moving
      Party”)
      shall
      each be entitled to specific enforcement of (without the necessity of posting
      a
      bond or other security or proving actual damages), and injunctive relief to
      prevent any violation of (without the necessity of posting a bond or other
      security or proving actual damages), the terms of this Agreement and the other
      Parties hereto will not take action, directly or indirectly, in opposition
      to
      the Moving Party seeking such relief on the grounds that any other remedy or
      relief is available at law or in equity. This Section 13 shall not in any way
      affect a Party’s right to exercise its rights at law.

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    15. Certain
      of the Parties have agreed to execute a confidentiality agreement simultaneous
      with the execution of this Agreement regarding material nonpublic information
      shared with the Ramius Group (the “Confidentiality
      Agreement”).
      Under
      the terms of the Confidentiality Agreement, the Company has agreed that prior
      to
      the 2007 Annual Meeting it will not take any action that the Board considers
      material without first advising a Ramius Nominee regarding such
      action.

     

    16. Each
      member of the Ramius Group hereby irrevocably appoints RCG Starboard Advisors,
      LLC as such member’s attorney-in-fact and representative (the “Ramius
      Representative”),
      in
      such member’s place and stead, to do any and all things and to execute any and
      all agreements, instruments and other documents and any amendments,
      modifications and waivers hereto and thereto and to give and receive any and
      all
      notices or instructions in connection with this Agreement and the transactions
      contemplated hereby and thereby. The Company shall be entitled to rely, as
      being
      binding on each member of the Ramius Group, upon any action taken by the Ramius
      Representative or upon any document, notice, instruction or other writing given
      or executed by the Ramius Representative. Each member of the Ramius Group
      acknowledges and agrees that each agreement, covenant or other obligation of
      the
      Ramius Group hereunder shall be binding on such member of the Ramius
      Group.

     

    17. This
      Agreement shall be governed by and construed and enforced in accordance with
      the
      laws of the State of Delaware without reference to the conflict of laws
      principles thereof. Each of the Parties hereto irrevocably agrees that any
      legal
      action or proceeding with respect to this Agreement and the rights and
      obligations arising hereunder, or for recognition and enforcement of any
      judgment in respect of this Agreement and the rights and obligations arising
      hereunder brought by the other party hereto or its successors or assigns, shall
      be brought and determined exclusively in the Delaware Court of Chancery and
      any
      state appellate court therefrom within the State of Delaware (or, if the
      Delaware Court of Chancery declines to accept, or determines that it does not
      have, jurisdiction over a particular matter, any state or federal court within
      the State of Delaware). Each of the Parties hereto hereby irrevocably submits
      with regard to any such action or proceeding for itself and in respect of its
      property, generally and unconditionally, to the personal jurisdiction of the
      aforesaid courts and agrees that it will not bring any action relating to this
      Agreement in any court other than the aforesaid courts. Each of the parties
      hereto hereby irrevocably waives, and agrees not to assert in any action or
      proceeding with respect to this Agreement, (i) any claim that it is not
      personally subject to the jurisdiction of the above-named courts for any reason,
      (ii) any claim that it or its property is exempt or immune from
      jurisdiction of any such court or from any legal process commenced in such
      courts (whether through service of notice, attachment prior to judgment,
      attachment in aid of execution of judgment, execution of judgment or otherwise)
      and (iii) to the fullest extent permitted by applicable legal requirements,
      any claim that (A) the suit, action or proceeding in such court is brought
      in an
      inconvenient forum, (B) the venue of such suit, action or proceeding is improper
      or (C) this Agreement, or the subject mater hereof, may not be enforced in
      or by
      such courts.

     

    18. This
      Agreement and any amendments hereto may be executed and delivered in one or
      more
      counterparts, and by the different parties hereto in separate counterparts,
      each
      of which when executed shall be deemed to be an original, but all of which
      taken
      together shall constitute one and the same agreement, and shall become effective
      when counterparts have been signed by each party hereto and delivered to the
      other parties hereto, it being understood that all parties need not sign the
      same counterpart. In the event that any signature to this Agreement or any
      amendment hereto is delivered by facsimile transmission or by e-mail delivery
      of
      a “.pdf” format data file, such signature shall create a valid and binding
      obligation of the party executing (or on whose behalf such signature is
      executed) with the same force and effect as if such facsimile or “.pdf”
signature page were an original thereof. At the request of any party each other
      party shall promptly re-execute an original form of this Agreement or any
      amendment hereto and deliver the same to the other party. No party hereto shall
      raise the use of a facsimile machine or e-mail delivery of a “.pdf” format data
      file to deliver a signature to this Agreement or any amendment hereto or the
      fact that such signature was transmitted or communicated through the use of
      a
      facsimile machine or e-mail delivery of a “.pdf” format data file as a defense
      to the formation or enforceability of a contract, and each party hereto forever
      waives any such defense.

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

    19. Any
      notices, consents, determinations, waivers or other communications required
      or
      permitted to be given under the terms of this Agreement must be in writing
      and
      will be deemed to have been delivered: (i) upon receipt, when delivered
      personally; (ii) upon receipt, when sent by facsimile (provided
      confirmation of transmission is mechanically or electronically generated and
      kept on file by the sending party); or (iii) one (1) Business Day after
      deposit with a nationally recognized overnight delivery service, in each case
      properly addressed to the party to receive the same. The addresses and facsimile
      numbers for such communications shall be:

     

    If
      to the
      Company:

     

    Kensey
      Nash Corporation

    735
      Pennsylvania Drive

    Exton,
      Pennsylvania 19341

    Attention:
      Joseph Kaufman

    Facsimile:
      484-713-2901

     

    With
      a
      copy to:

     

    Katten
      Muchin Rosenman LLP

    525
      W.
      Monroe Street 

    Chicago,
      Illinois 60661-3693 

    Attention:
      David Shevitz, Esq. and Mark D. Wood, Esq.

    Facsimile:
      312-902-1061

     

    If
      to the
      Ramius Group or any member of the Ramius Group:

     

    RCG
      Starboard Advisors, LLC

    c/o
      Ramius Capital Group, L.L.C.

    666
      Third
      Avenue, 26th
      Floor

    New
      York,
      New York 10017

    Attention:
      Jeffrey Smith

    Facsimile:
      212-201-4802

    

    With
      a
      copy to:

     

    Olshan
      Grundman Frome Rosenzweig & Wolosky LLP

    Park
      Avenue Tower

    65
      East
      55th
      Street

    New
      York,
      New York 10022

    Attention:
      Steven Wolosky, Esq.

    Facsimile:
      (212) 451-2222

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

    20. This
      Agreement shall be binding upon and inure to the benefit of the Parties and
      their respective successors and assigns. No Party shall assign this Agreement
      or
      any rights or obligations hereunder without, with respect to any member of
      the
      Ramius Group, the prior written consent of the Company, and with respect to
      the
      Company, the prior written consent of RCG Starboard.

     

    21. The
      language used in this Agreement will be deemed to be the language chosen by
      the
      parties to express their mutual intent, and no rules of strict construction
      will
      be applied against any party. Unless the context otherwise requires, (a) all
      references to Sections or Schedules are to Sections or Schedules contained
      in or
      attached to this Agreement, (b) words in the singular or plural include the
      singular and plural and pronouns stated in either the masculine, the feminine
      or
      neuter gender shall include the masculine, feminine and neuter, and (c) the
      use
      of the word “including” in this Agreement shall be by way of example rather than
      limitation.

     

    [
      The
      remainder of this page intentionally left blank ]

     

     

     

     

    
 

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the
      day
      and year first above written.

     

    
      	 	 	
              KENSEY
                NASH CORPORATION

            
	 	 	 
	 	 	
              By:

            	 
	 	 	 	
              Name:

            	
              Joseph
                W. Kaufmann

            
	 	 	 	
              Title:

            	
              Chief
                Executive Officer,

              President,
                Secretary

            

    

    

    

    
      	
              PARCHE,
                LLC

            	
              RCG
                STARBOARD ADVISORS, LLC

            
	 	 
	
              By:

            	
              RCG
                Starboard Advisors, LLC, its managing member

            	
              By:

            	
              Ramius
                Capital Group, L.L.C., its sole
                member

            

    

    

    

    
      	
              STARBOARD
                VALUE AND OPPORTUNITY MASTER FUND LTD.

            	
              RAMIUS
                CAPITAL GROUP, L.L.C.

               

              By:
                C4S & Co., L.L.C.,

                    
as
                managing member

            
	 	 
	
              By:

            	
              RCG
                Starboard Advisors, LLC, its

              investment
                manager

            	
               

              C4S
                & CO., L.L.C.

            

    

    

    

    
      	
              By:

            	  

	 	
              Name:

            	
              Jeffrey
                M. Solomon

            
	 	
              Title:

            	
              Authorized
                Signatory

            

    

    

    

    
      	 	 	 
	
              JEFFREY
                M. SOLOMON

            	 	
              PETER
                A. FELD

            
	 	 	 
	
              Individually
                and as attorney-in-fact for Peter A. Cohen, Morgan B. Stark and Thomas
                W.
                Strauss

            	 	 

    

    

    

    
      	 	 	 
	
              JEFFREY
                C. SMITH

            	 	 
	 	 	 
	
              Individually
                and as attorney-in-fact for Ceasar Anquillare

            	 	 

    

    

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    
      	
               

              By:
                Starboard Value and Opportunity Master Fund Ltd.

              

              By:
                ________________________________ 

              Name:
                Jeffrey M. Solomon

              Title:
                Authorized Signatory

              

              By:
                Parche, LLC 

              

              By:
                ________________________________ 

              Name:
                Jeffrey M. Solomon

              Title:
                Authorized Signatory

              

              By:
                RCG Enterprise, Ltd

              

              By:
                ________________________________ 

              Name:
                Jeffrey M. Solomon

              Title:
                Authorized Signatory

               

              By:
                RCG Starboard Advisors, LLC 

              

              By:
                ________________________________ 

              Name:
                Jeffrey M. Solomon

              Title:
                Authorized Signatory     

              

              By:
                Ramius Capital Group, L.L.C. 

               

              By:
                ________________________________

              Name:
                Jeffrey M. Solomon 

              Title:
                Authorized Signatory

              

              By:
                C4S & CO., L.L.C.

              

              By:
                ________________________________ 

              Name:
                Jeffrey M. Solomon

              Title:
                Authorized Signatory

              

            

    

     

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

    SCHEDULE
      A

     

    The
      Ramius Group

     

    
      	
              Parche,
                LLC

            	
              397,720

            
	
              Starboard
                Value and Opportunity Master Fund Ltd.

            	
              2,088,020

            
	
              RGC
                Starboard Advisors, LLC

            	
              2,485,740

            
	
              Ramius
                Capital Group, L.L.C.

            	
              2,485,740

            
	
              C4S
                & CO., LLC

            	
              2,485,740

            
	
              RCG
                Enterprise, Ltd 

            	
              0

            
	
              Peter
                A. Cohen

            	
              2,485,740

            
	
              Morgan
                B. Stark

            	
              2,485,740

            
	
              Jeffrey
                M. Solomon

            	
              2,485,740

            
	
              Thomas
                W. Strauss

            	
              2,485,740

            
	
              Ceasar
                Anquillare

            	
              0

            
	
              Peter
                A. Feld

            	
              0

            
	
              Jeffrey
                C. Smith

            	
              0

            

    

     

    
 

    
      
        
        

      

      
        13

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