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Unassociated Document

     

    SECURITIES
      PURCHASE AND SHAREHOLDERS AGREEMENT

    

    THIS
      SECURITIES PURCHASE AND SHAREHOLDERS AGREEMENT (this “Agreement”) is made and
      entered into as of April 20, 2007,
      by
      and between
      Shaanxi Xindongxin Medicine Limited Company
      (the
“Company”), a Chinese corporation having its registered address at
      Apartment B-2402, Oujin Garden Community, #34
      Keji Road, Yanta District, Xi’an Shaanxi Province P.R.China.
      Its
      legal representative is HongLei
      Gao ,
      Chinese
      nationalityô
      and
Gardner
      Court Industries Inc. (“Purchaser”),
      a America
      corporation,
      having its registered address at
      2503
      W GARDNER CT .
      Its
      legal representative is Jing
      Yu , Norway
      nationality.

    

     

    For
      good
      and valuable consideration, the receipt and sufficiency of which

     

    are
      hereby acknowledged, the parties hereto agree as follows:

     

    1.
      Agreement
      to Sell and Purchase.æPurchaser
      has agreed to
      subscribe 1
      million
      shares of the Company, to take
      100
%
      of the
      equity interest in the Company for a purchase price of US$178,089
      .
      

     

    The
      Company has agreed to sell the 
      1
million
      Shares
      to Purchaser for US$178,089
      .

     

    The
      Company has agreed with Purchaser to undertake certain obligations and covenants
      during such time as Purchaser owns the Shares.

     

    2.
      Delivery and Paymentæthe
      Company shall submit documents to obtain the Business License of Foreign
      Investor Enterprise (FIE) and register with necessary governmental departments
      and Purchaser shall deliver to the Company, by wire transfer, US$178,089
      within
      fourteen (14) days whenever the Business License of FIE is
      obtained.

     

    3.
      Due
      Diligence: Purchaser’s obligation to close the transactions contemplated hereby
      shall be subject to Purchaser having completed to its satisfaction its due
      diligence investigation of the Company on or before Jan 31, 2007 subject that
      the Company provides necessary documents as required by the Purchaser on or
      before Jan 15, 2007.

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

    

     

    4.
      Representations and Warranties of the Company: The Company hereby jointly and
      severally represents and warrants to Purchaser as follows:

     

    4.1
      Organization, Good Standing and Qualification: The Company is a corporation
      duly
      organized, validly existing and in good standing under the laws of its
      jurisdiction of organization. The Company has the corporate power and authority
      to own and operate its properties and assets, to execute and deliver
this
      Agreement. 

     

    4.2
      Capitalization;
      Voting Rights:

     

    (a)
      The
      total shares of the Company is 1 million, Honglei Gao holds 51%, Gen Chen holds
      49%. 

     

    (b)
      There
      are no outstanding options, warrants, proxy or stockholder agreements, or
      arrangements or agreements of any kind for the purchase or acquisition from
      the
      Company of any of its securities.

     

    4.3
      Financial Statements: The Company has delivered to Purchaser a balance sheet
      and
      income statement at and as of Sep. 30, 2006 and has also delivered the
      audited financial report of the first three quarter of 2006. Said financial
      statements (a) accurately reflect the transactions set forth in the books
      and records of the Company; (b) were prepared in accordance with the
      Accounting Standard for Enterprise of the Peoples Republic of China;
      (c) fairly present the Company’s financial condition and the results of
      operations as of the relevant dates thereof and for the periods covered thereby;
      (d) contain and reflect all necessary adjustments and accruals for a fair
      presentation of the Company’s financial condition and the results of its
      operations for the periods covered by said financial statements;
      (e) contain and reflect adequate provisions for all reasonably anticipated
      liabilities for all taxes with respect to the period then ended and all prior
      periods; and (f) with respect to contracts and commitments for the sale of
      goods or the provision of services by the Company, contain and reflect adequate
      reserves for all reasonably anticipated material losses and costs and expenses
      in excess of expected receipts. The Company’s financial statements described
      above do not contain any untrue statement of a material fact or omit to state
      a
      material fact required to be stated therein or necessary to make the statements
      therein, in light of the circumstances under which they were made, not
      misleading.

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    

     

    4.4
      Liabilities: The Company has no material contingent liabilities, except current
      liabilities incurred in the ordinary course of business. The financial
      statements provided by the Company are true and complete.

     

    4.5
      Changes: Since September 30, 2006, there has not been:

     

    (a)  Any
      change in the business, assets, liabilities, condition (financial or otherwise),
      properties, operations or prospects of the Company, which individually or in
      the
      aggregate has had or could reasonably be expected to have a material adverse
      effect on the business or financial condition of the Company (a “Material
      Adverse Effect);

     

    (b)  Any
      resignation or termination of any officer, key employee or group of employees
      of
      the Company.
      

     

    (c)  Any
      material change, except in the ordinary course of business, in the contingent
      obligations of the Company by way of guaranty, endorsement, indemnity, warranty
      or otherwise;

     

    (d)  Any
      damage, destruction or loss, whether or not covered by insurance, which has
      had,
      or could reasonably be expected to have, individually or in the aggregate,
      a
      Material Adverse Effect;

     

    (e)  Any
      waiver by the Company of a valuable right or of a material debt owed to
      it;

     

    (f)  Any
      direct or indirect material loans made by the Company to any stockholder,
      employee, officer or director of the Company, other than advances made in the
      ordinary course of business;

     

    (g)  Any
      material change in any compensation arrangement or agreement with any employee,
      officer, director or stockholder; of the Company;

     

    (h)  Any
      declaration of or payment of any dividend or other distribution of the assets
      of
      the Company;

     

    (i)  Any
      debt,
      obligation or liability incurred, assumed or guaranteed by the Company, except
      those for immaterial amounts and for current liabilities incurred in the
      ordinary course of business;

     

    (j)  Any
      other
      event or condition of any character that, either individually or in the
      aggregate, has had, or could reasonably be expected to have, individually or
      in
      the aggregate, a Material Adverse Effect.

     

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    4.6
      Agreements
      with Related Parties: There are no agreements from the Company with or
      obligations of the Company to, officers, directors, managers, stockholders,
      members, partners or employees of the Company or their respective affiliates
      other than:

     

     (a)
      for
      payment of salary for services rendered;

     

    (b)
      reimbursement for reasonable expenses incurred on behalf of the Company;
      and

     

     (c)
      obligations
      listed in the Company’s financial statements.

     

    None
      of
      the officers, directors or, to the best of the Company’s knowledge, key
      employees or stockholders of the Company are indebted to the
      Company.

     

    4.7
      Litigation:
      There is no action, suit, proceeding or investigation pending or, to the
      Company’s knowledge, currently threatened against the Company that prevents the
      Company from entering into this Agreement, or from consummating the transactions
      contemplated hereby or thereby, or which has had, or could reasonably be
      expected to have, a Material Adverse Effect, or any change in the current equity
      ownership of the Company, nor is the Company aware that there is any basis
      to
      assert any of the foregoing. The Company is not a party or subject to the
      provisions of any order, writ, injunction, judgment or decree of any court
      or
      government agency or instrumentality. There is no action, suit, proceeding
      or
      investigation by the Company currently pending or which the Company intends
      to
      initiate.
      Otherwise, all action, suit, proceeding, investigation pending or arbitral
      proceeding for any disputes or litigations and all pre-transaction liabilities
      in connection with the Company shall be borne and solved by the Company except
      the Purchaser. And all these shall not be damaged to the Purchaser and shall
      not
      affect the business operation of the Company.

     

    4.8
      Tax
      Returns and Payments: The Company has timely filed all tax returns required
      to
      be filed by it. All taxes shown to be due and payable on such returns, any
      assessments imposed, and all other taxes due and payable by the Company on
      or
      before the Closing, have been paid or will be paid prior to the time they become
      delinquent. No any penalty to the Company from the tax office of the government
      since the Company was incorporated.

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    

     

    4.9
      Compliance
      with Laws; Permits: The Company is not in violation of any applicable statute,
      rule, regulation, order or restriction of any domestic or foreign government
      or
      any instrumentality or agency thereof in respect of the conduct of its business
      or the ownership of its properties which has had, or could reasonably be
      expected to have, either individually or in the aggregate, a Material Adverse
      Effect. The
      Company has all material franchises, permits, licenses and any similar authority
      necessary for the conduct of its business as now being conducted by it, the
      lack
      of which could, either individually or in the aggregate, reasonably be expected
      to have a Material Adverse Effect.

     

    4.10
      Environmental and Safety Laws: The Company is not, and has never been, in
      violation of any applicable statute, law or regulation relating to the
      environment or occupational health and safety, and to its knowledge, no material
      expenditures are or will be required in order to comply with any such existing
      statute, law or regulation.

     

    4.11
      Insurance: The Company has general and necessary commercial insurance, which
      are
      customary for companies similarly situated to the Company in the same or similar
      business.

     

    4.12
      Employee and Labor Matters: The Company has complied with all applicable PRC
      laws and regulations relating to the employment of its employees, including
      without limitation laws and regulations pertaining to welfare funds, housing
      funds, social benefits, medical benefits, insurance, retirement benefits,
      pensions or the like.

     

    4.13
       Full
      Disclosure: Documents provided as described in the List of Legal Due Diligence,
      nor any other document delivered by the Company to Purchaser or its attorneys
      or
      agents in connection herewith or therewith or with the transactions contemplated
      hereby or thereby, contain any untrue statement of a material fact nor omit
      to
      state a material fact necessary in order to make the statements contained herein
      or therein, in light of the circumstances in which they are made, not
      misleading.

     

    5. Penalties
      of Non-payment

     

    The
      Purchaser agrees to pay the penalty US$ f zero point zero two percent (0.02%)
      of
      unpaid amount per day in case it does not wire the payment on time as in Article
      2 of the Contract. 

     

    6. Arbitration

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    

     

    6.1 If
      any
      dispute with regard to the Agreement is not resolved through friendly
      consultation, either Party may submit the dispute to the China International
      Economic and Trade Arbitration Commission (CIETAC) for arbitration which shall
      be conducted in accordance with the Commission’s arbitration rules in effect at
      the time of application for the arbitration.

     

    6.2 The
      Parties hereto agree that any arbitral award shall 

     

    be
      final
      and binding to the Parties.

     

    7.
      Miscellaneous 

     

    7.1Governing
      Law: The formation, validity, interpretation,

     

    implementation,
      modification, termination, and settlement of disputes respecting this Agreement
      shall be governed by the laws of the People’s Republic of China. 

     

    7.2 Amendment
      and Waiver: This Agreement may be amended or modified only upon the written
      consent of the parties hereto.

     

    7.3 Facsimile
      Signatures; Counterparts: This Agreement may be executed by facsimile signatures
      and in any number of counterparts, each of which shall be an original, but
      all
      of which together shall constitute one instrument.

     

    7.4 Language.
      This Agreement shall be executed in four original Chinese copies and four
      original English copies. Both language versions shall be equally authentic
      and
      shall be given equal weight.

     

    This
      Agreement will not be effective unless the Resolution of Shareholders’ Meeting
      of the Company is made in favor of this acquisition.

     

    The
      CompanyæShaanxi
      Xindongxin Medicine Limited Company

     

    Legal
      Representativeæ

     

    Dateæ

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    

     

    Purchaseræ
      Gardner
      Court Industries Inc.

     

    Legal
      RepresentativeæYu,
      Jing

     

    Dateæ

     

    
      
        
        

      

      
        7Exhibit
      4.1

    

    SYNUTRA
      INTERNATIONAL, INC.,

    

    THE
      BANK OF NEW YORK,

    as
      Warrant Agent

    

    and

    

    ABN
      AMRO BANK N.V., Hong Kong Branch

    as
      Initial Holder

    

     

    
      

      

    

    Warrant
      Agreement

    

    Dated
      as of April 19, 2007

    

    Warrants
      to Purchase

    Shares
      of Common Stock

    

    
      

      

    

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    TABLE
      OF CONTENTS

    

    PAGE

    

    
      	
              ARTICLE
                I

            	
              DEFINITIONS

            	
              1

            
	
               

            	 	
               

            
	
              Section
                1.01

            	
              Definitions

            	
              1

            
	
              Section
                1.02

            	
              Rules
                of Construction

            	
              5

            
	
               

            	 	
               

            
	
              ARTICLE
                II

            	
              APPOINTMENT
                OF WARRANT AGENT

            	
              5

            
	
               

            	 	
               

            
	
              Section
                2.01

            	
              Appointment
                of Warrant Agent

            	
              5

            
	
               

            	 	
               

            
	
              ARTICLE
                III

            	
              THE
                WARRANTS

            	
              5

            
	
               

            	 	
               

            
	
              Section
                3.01

            	
              Issuance

            	
              5

            
	
              Section
                3.02

            	
              Form
                and Dating; Legends

            	
              5

            
	
              Section
                3.03

            	
              Execution
                and Countersignature.

            	
              6

            
	
              Section
                3.04

            	
              Warrant
                Registrar

            	
              7

            
	
              Section
                3.05

            	
              Replacement
                Warrants

            	
              7

            
	
              Section
                3.06

            	
              Outstanding
                Warrants.

            	
              7

            
	
              Section
                3.07

            	
              Cancellation

            	
              7

            
	
              Section
                3.08

            	
              Registration,
                Transfer and Exchange.

            	
              8

            
	
              Section
                3.09

            	
              Restrictions
                on Transfer and Exchange.

            	
              9

            
	
              Section
                3.10

            	
              Representations
                and Covenants of the Initial Holder

            	
              9

            
	
               

            	 	
               

            
	
              ARTICLE
                IV

            	
              EXPIRATION
                OF WARRANTS; TERMS OF WARRANTS; EXERCISE OF WARRANTS

            	
              10

            
	
               

            	 	
               

            
	
              Section
                4.01

            	
              Expiration
                of Warrants; Terms of Warrants; Exercise of Warrants.

            	
              10

            
	
               

            	 	
               

            
	
              ARTICLE
                V

            	
              REPRESENTATIONS
                AND COVENANTS OF THE COMPANY

            	
              12

            
	
               

            	 	
               

            
	
              Section
                5.01

            	
              Maintenance
                of Office or Agency.

            	
              12

            
	
              Section
                5.02

            	
              Payment
                of Taxes

            	
              13

            
	
              Section
                5.03

            	
              Reports.

            	
              13

            
	
              Section
                5.04

            	
              Reservation
                of Warrant Shares.

            	
              14

            
	
              Section
                5.05

            	
              Obtaining
                Stock Exchange Listings

            	
              14

            
	
              Section
                5.06

            	
              Listing

            	
              14

            
	
              Section
                5.07

            	
              Compliance

            	
              15

            
	
              Section
                5.08

            	
              Opinions

            	
              15

            
	
              Section
                5.09

            	
              Outstanding
                Shares of Common Stock

            	
              15

            

    

     

    
      
         

      

      
        -
          i -

        
          

        

      

      
         

      

       

      
        TABLE
          OF CONTENTS

        

        PAGE

      

    

    
      	
               

            	 	
               

            
	
              ARTICLE
                VI

            	
              ADJUSTMENT
                OF EXERCISE PRICE AND NUMBER OF WARRANT SHARES ISSUABLE

            	
              15

            
	
               

            	 	
               

            
	
              Section
                6.01

            	
              Adjustment
                of Exercise Price and Number of Warrant Shares Issuable

            	
              15

            
	
              Section
                6.02

            	
              Fractional
                Interests

            	
              24

            
	
              Section
                6.03

            	
              Notices
                to Warrant Holders.

            	
              24

            
	
              Section
                6.04

            	
              No
                Rights as Stockholders

            	
              25

            
	
               

            	 	
               

            
	
              ARTICLE
                VII

            	
              WARRANT
                AGENT

            	
              26

            
	
               

            	 	
               

            
	
              Section
                7.01

            	
              Warrant
                Agent

            	
              26

            
	
              Section
                7.02

            	
              Compensation;
                Indemnity.

            	
              27

            
	
              Section
                7.03

            	
              Individual
                Rights of Warrant Agent

            	
              28

            
	
              Section
                7.04

            	
              Replacement
                of Warrant Agent.

            	
              28

            
	
              Section
                7.05

            	
              Successor
                Warrant Agent by Merger.

            	
              29

            
	
              Section
                7.06

            	
              Eligibility

            	
              29

            
	
              Section
                7.07

            	
              Holder
                Lists

            	
              29

            
	
               

            	 	
               

            
	
              ARTICLE
                VIII

            	
              MISCELLANEOUS

            	
              30

            
	
               

            	 	
               

            
	
              Section
                8.01

            	
              Warrantholder
                Actions.

            	
              30

            
	
              Section
                8.02

            	
              Notices.

            	
              30

            
	
              Section
                8.03

            	
              Supplements
                and Amendments.

            	
              31

            
	
              Section
                8.04

            	
              Governing
                Law.

            	
              33

            
	
              Section
                8.05

            	
              Waiver
                of Right to Trial by Jury

            	
              33

            
	
              Section
                8.06

            	
              New
                York Process Agent

            	
              34

            
	
              Section
                8.07

            	
              No
                Adverse Interpretation of Other Agreements

            	
              34

            
	
              Section
                8.08

            	
              Successors

            	
              34

            
	
              Section
                8.09

            	
              Duplicate
                Originals

            	
              34

            
	
              Section
                8.10

            	
              Separability

            	
              34

            
	
              Section
                8.11

            	
              Table
                of Contents and Headings

            	
              34

            
	
              Section
                8.12

            	
              Benefits
                of This Agreement

            	
              34

            
	
              Section
                8.13

            	
              Limitation
                of Liability

            	
              34

            

    

    

    EXHIBITS

     

    
      
        	
                Exhibit
                  A

              	
                Form
                  of Warrant

              
	
                Exhibit
                  B

              	
                Restricted
                  Legend

              
	
                Exhibit
                  C

              	
                Form
                  of U.S. Counsel Opinion

              

      

      
        
           

        

        
          -
            ii -

          
            

          

        

        
           

        

         

      

    

    WARRANT
      AGREEMENT dated as of April 19, 2007, between SYNUTRA INTERNATIONAL, INC.,
      a company organized under the laws of the State of Delaware (as further defined
      below, the “Company”),
      the
      Bank of New York, as warrant agent (the “Warrant
      Agent”)
      and
      ABN AMRO BANK N.V., Hong Kong Branch, as initial holder (the “Initial
      Holder”).

    

    WHEREAS,
      the Company proposes to issue the Warrants (as defined below) to purchase shares
      of Common Stock, par value US$0.0001 per share (the “Common
      Stock”),
      of
      the Company (the Common Stock issuable on exercise of the Warrants being
      referred to herein as the “Warrant
      Shares”)
      in
      order to induce ABN AMRO Bank N.V., Hong Kong Branch to enter into the Loan
      Agreement dated as of the date hereof among the Company, Liang Zhang, Xiuqing
      Meng and ABN AMRO Bank N.V., Hong Kong Branch as Lender and Collateral Agent
      (the “Loan
      Agreement”).

    

    WHEREAS,
      the Company desires the Warrant Agent to act on behalf of the Company, and
      the
      Warrant Agent is willing so to act in connection with the issuance of the
      Warrants and the other matters as provided herein.

    

    WHEREAS
      the Company has authorized and obtained all required corporate and shareholder
      approvals, and taken all necessary action required by law or securities exchange
      regulation for or in connection with (a) the execution and performance of
      this Agreement, (b) the issuance of the Warrants and (c) the issuance
      of the Warrant Shares. 

    

    NOW,
      THEREFORE, in consideration of the premises and the mutual agreements herein
      set
      forth, the parties hereto agree as follows:

    

    ARTICLE
      I

    DEFINITIONS

     

    Section
      1.01 Definitions.
      As used
      in this Agreement, the following terms shall have the following respective
      meanings:

    

    “act”
has
      the
      meaning assigned to such term in Section 8.01.

    

    “Affiliate”
means,
      with respect to any Person, another Person that directly, or indirectly through
      one or more intermediaries, Controls or is Controlled by or is under common
      Control with the Person specified. “Control”
means
      the possession, directly or indirectly, of the power to direct or cause the
      direction of the management or policies of a Person, whether through the ability
      to exercise voting power, by contract or otherwise. “Controlling”
and
      “Controlled”
have
      meanings correlative thereto. In any event, Mr. Liang Zhang and
      Ms. Xiuqing Meng and their respective Affiliates shall be deemed Affiliates
      of the Company.

    

    “Agreement”
means
      this Warrant Agreement, as amended or supplemented from time to
      time.

    

    “Board
      of Directors”
means
      the board of directors or comparable governing body of the Company, or any
      committee thereof duly authorized to act on its behalf.

    

    
      
         

      

      
        -
          1 -

        
          

        

      

      
         

      

       

    

    “Board
      Resolution”
means
      a
      resolution duly adopted by the Board of Directors which is certified by the
      Secretary or an Assistant Secretary of the Company and remains in full force
      and
      effect as of the date of its certification.

    

    “Business
      Day”
means
      any day except a Saturday, Sunday or other day on which commercial banks in
      New
      York City, Hong Kong, Singapore or in the city where the Corporate Trust Office
      of the Warrant Agent is located are authorized by law to close.

    

    “Certificated
      Warrant”
means
      a
      Warrant in registered definitive form.

    

    “Closing
      Date”
means
      April 19, 2007.

    

    “Commission”
means
      the United States Securities and Exchange Commission.

    

    “Common
      Stock”
has
      the
      meaning specified in the second paragraph of this Agreement.

    

    “Company”
means
      the party named as such in the first paragraph of this Agreement or any
      successor to the Company under this Agreement and the Warrants pursuant to
      Section 6.01(k).

    

    “Corporate
      Trust Office”
means
      the office of the Warrant Agent at which the corporate trust business of the
      Warrant Agent is principally administered, which at the Closing Date, is located
      at The Bank of New York, 101 Barclay Street, 21st Floor, New York, NY 10286,
      United States of America.

    

    “Daily
      Price”
means
      (a) if the shares of Common Stock then are listed and traded on the NASDAQ
      GM, the closing price on such day as reported by the NASDAQ GM; (b) if the
      shares of Common Stock then are not listed and traded on the NASDAQ GM, the
      closing price on such day as reported by any principal national securities
      exchange on which the shares are listed and traded; and (c) if the shares
      of such class of Common Stock then are not listed and traded on any such
      securities exchange, the last reported sale price on such day on the OTC
      Bulletin Board. If on any determination date the shares of Common Stock are
      not
      quoted by any such organization, the Daily Price per share of Common Stock
      shall
      be the Fair Value of such share on such determination date as determined
      pursuant to Section 6.01(g) when the Common Stock is not listed on the
      NASDAQ GM.

    

    “Disinterested
      Director”
means,
      in connection with any issuance or distribution of securities or assets that
      gives rise to a determination of the Fair Value thereof, each member of the
      Board of Directors who is not an officer, employee, director, family member
      or
      other Affiliate of the party to whom the Company is proposing to issue or
      distribute the securities or assets giving rise to such
      determination.

    

    “Exchange
      Act”
means
      the United States Securities Exchange Act of 1934, as amended.

    

    “Exercise
      Price”
means
      (a) at any time prior to a Qualified Public Offering, the US Dollar amount
      equal to 75% of the volume weighted average of the closing prices per share
      of
      the Common Stock on the OTC Bulletin Board or the NASDAQ GM, as applicable,
      for
      the 30 trading days immediately preceding and including the Closing Date and
      (b) on the date of the Qualified Public Offering and at any time
      thereafter, the lower of (i) the Exercise Price calculated in accordance
      with clause (a), as adjusted and in effect on the day immediately prior to
      the date of the Qualified Public Offering and (ii) the US Dollar amount
      equal to 75% of the Qualified Public Offering Price; provided that the Exercise
      Price shall be adjusted from time to time in accordance with the provisions
      of
      this Agreement.

    

    
      
         

      

      
        -
          2 -

        
          

        

      

      
         

      

       

    

    “Expiration
      Date”
means
      the third anniversary of the completion of a Qualified Public
      Offering.

    

    “Fair
      Value”
has
      the
      meaning set forth in Section 6.01(g).

    

    “GAAP”
means
      generally accepted accounting principles in the United States that are
      applicable to the circumstances as of the date of determination, consistently
      applied. 

    

    “Holder”
or
      “Warrantholder”
means
      the registered holder of any Warrant.

    

    “Initial
      Holder”
means
      the party named as such in the first paragraph of this Agreement.

    

    “Loan
      Agreement”
has
      the
      meaning assigned to such term in the second paragraph of this
      Agreement.

    

    “NASDAQ
      GM”
means
      NASDAQ Global Market.

    

    “Officers’
      Certificate”
means
      a
      certificate signed in the name of the Company by a Responsible
      Officer.

    

    “Opinion
      of Counsel”
means
      a
      written opinion signed by outside legal counsel to the Company, satisfactory
      to
      the Warrant Agent.

    

    “Person”
means
      an individual, a corporation, a partnership, a limited liability company, an
      association, a trust or any other entity, including a government or political
      subdivision or an agency or instrumentality thereof.

    

    “Qualified
      Public Offering”
means
      a
      registered public offering and sale (whether primary or secondary) of Common
      Stock listed on the NASDAQ GM or any other “national securities exchange” (as
      such term is defined in Section 6 of the Exchange Act) resulting in a
      public float of not less than 20% of the outstanding Common Stock of the Company
      (not including any treasury shares) that is held by no fewer than 300 holders
      immediately following such offering or listing.

    

    “Qualified
      Public Offering Price”
means
      the purchase price per share of Common Stock paid by investors in the Qualified
      Public Offering which, for the avoidance of doubt only, shall be the price
      per
      share received by the Company plus any underwriting or placement fees or
      discounts.

    

    “Register”
has
      the
      meaning assigned to such term in Section 3.08.

    

    “Registrar”
means
      a
      Person engaged by the Company to maintain the Register.

    

    
      
         

      

      
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          3 -

        
          

        

      

      
         

      

       

    

    “Registration
      Rights Agreement”
means
      the Registration Rights Agreement dated as of the date hereof between the
      Company and ABN AMRO Bank N.V., Hong Kong Branch.

    

    “Responsible
      Officer”
means
      the chairman of the Board of Directors, the president or chief executive
      officer, any vice president, the chief financial officer, or the secretary
      of
      the Company.

    

    “Restricted
      Legend”
means
      the legend set forth in Exhibit B.

    

    “Rule 144”
means
      Rule 144 promulgated under the Securities Act.

    

    “Securities
      Act”
means
      the United States Securities Act of 1933, as amended.

    

    “Tranche A
      Issue Date”
means
      the date of signing of this Agreement.

    

    “Tranche A
      Warrants”
means
      200,000 warrants, which shall be substantially in the form of Exhibit A, to
      be issued on the Tranche A Issue Date to purchase shares of Common Stock,
      against payment of the Exercise Price, as adjusted in accordance with this
      Agreement, per share of Common Stock; provided that each warrant shall initially
      be exercisable for one share of Common Stock.

    

    “Tranche B
      Issue Date”
means
      the earlier of (i) the date of the closing of a privately placed notes
      offering by or of a loan to the Company in an amount sufficient to repay all
      amounts outstanding under any Loan (as defined in the Loan Agreement) and
      (ii) the 6-months anniversary of the Tranche A Issue
      Date.

    

    “Tranche B
      Warrants”
means
      200,000 warrants, which shall be substantially in the form of Exhibit A, to
      be issued on the Tranche B Issue Date to purchase shares of Common Stock,
      against payment of the Exercise Price, as adjusted in accordance with this
      Agreement, per share of Common Stock; provided that each Tranche B Warrant
      shall initially be exercisable for a number of shares of Common Stock equal
      to
      the number of shares of Common Stock for which a Tranche A Warrant would be
      exercisable at the close of business on the Tranche B Issue Date, as
      adjusted in accordance with this Agreement.

    

    “Transfer
      Agent”
has
      the
      meaning assigned to such term in Section 5.04.

    

    “US
      Dollar”
means
      lawful money of the United States.

    

    “Warrant”
means
      any of the Tranche A Warrants or any of the Tranche B Warrants and
“Warrants”
means
      the Tranche A Warrants and the Tranche B Warrants,
      collectively.

    

    “Warrant
      Agent”
means
      the party named as such in the first paragraph of this Agreement or any
      successor Warrant Agent appointed pursuant to Article 7.

    

    “Warrant
      Certificate”
means
      a
      certificate substantially in the form of Exhibit A.

    

    “Warrant
      Shareholder”
means
      a
      holder of Warrant Shares issued upon exercise of the Warrants.

    

    
      
         

      

      
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          4 -

        
          

        

      

      
         

      

       

    

    “Warrant
      Shares”
has
      the
      meaning assigned to such term in the second paragraph of this
      Agreement.

     

    Section
      1.02 Rules
      of Construction.
      Unless
      the context otherwise requires or except as otherwise expressly
      provided,

    

    (i) an
      accounting term not otherwise defined has the meaning assigned to it in
      accordance with GAAP;

    

    (ii) “herein,”
      “hereof”
and
      other words of similar import refer to this Agreement as a whole and not to
      any
      particular Section, Article or other subdivision; 

    

    (iii) all
      references to Sections or Articles or Exhibits refer to Sections or Articles
      or
      Exhibits of or to this Agreement unless otherwise indicated;

    

    (iv) references
      to agreements or instruments, or to statutes or regulations, are to such
      agreements or instruments, or statutes or regulations, as amended from time
      to
      time (or to successor statutes and regulations); and

    

    (v) references
      to “him”
or
      “he”
or
      “his”
shall
      also refer to the opposite gender.

    

    ARTICLE
      II

    APPOINTMENT
      OF WARRANT AGENT

     

    Section
      2.01 Appointment
      of Warrant Agent.
      The
      Company hereby appoints the Warrant Agent to act as agent for the Company in
      accordance with the instructions set forth herein and the Warrant Agent hereby
      accepts such appointment.

    

    ARTICLE
      III

    THE
      WARRANTS

     

    Section
      3.01 Issuance.
      The
      Company will issue the Tranche A Warrants on the Tranche A Issue Date
      and the Tranche B Warrants on the Tranche B Issue Date to the Initial
      Holder.

     

    Section
      3.02 Form
      and Dating; Legends

    

    (a) The
      Warrants will be substantially in the form attached as Exhibit A with a
      legend in the form attached as Exhibit B, if applicable. The terms and
      provisions contained in the form of the Warrants annexed as Exhibit A
      constitute, and are hereby expressly made, a part of the Warrant Agreement.
      The
      Warrants may also have such additional notations, legends or endorsements
      required by law, rules of or agreements with national securities exchanges
      to
      which the Company is subject, or common usage. Each Warrant will be dated the
      date of its countersignature by the Warrant Agent.

    

    (b) Except
      as
      otherwise provided in paragraph (c) or Section 3.09(b), each Warrant
      will bear the Restricted Legend.

    

    
      
         

      

      
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          5 -

        
          

        

      

      
         

      

       

    

    (c) (i) If
      the
      Company or the Initial Holder determines (upon the advice of counsel and such
      other certifications and evidence as the Company may reasonably require) that
      a
      Warrant is eligible for resale pursuant to Rule 144 under the Securities
      Act (or any successor provision) and that the Restricted Legend is no longer
      necessary or appropriate in order to ensure that subsequent transfers of the
      Warrant (or a beneficial interest therein) are effected in compliance with
      the
      Securities Act; or 

    

    (ii) after
      a
      Warrant is sold pursuant to an effective registration statement under the
      Securities Act;

    

    the
      Company or the Initial Holder with written consent from the Company (which
      shall
      not be unreasonably withheld) may instruct the Warrant Agent to cancel the
      Warrant and issue to the Holder thereof (or to its transferee) a new Warrant
      of
      like tenor, registered in the name of the Holder thereof (or its transferee),
      that does not bear the Restricted Legend, and the Warrant Agent will comply
      with
      such instruction.

    

    (d) By
      its
      acceptance of any Warrant bearing the Restricted Legend (or any beneficial
      interest in such a Warrant), each Holder thereof and each owner of a beneficial
      interest therein acknowledges the restrictions on transfer of such Warrant
      (and
      any such beneficial interest) set forth in this Agreement and in the Restricted
      Legend and agrees that it will transfer such Warrant (and any such beneficial
      interest) only in accordance with this Agreement and such legend.

     

    Section
      3.03 Execution
      and Countersignature.

    

    (a) A
      Responsible Officer shall execute the Warrants for the Company by facsimile
      or
      manual signature in the name and on behalf of the Company. If a Responsible
      Officer whose signature is on a Warrant no longer holds that office at the
      time
      the Warrant is countersigned or exercised, the Warrant will still be
      valid.

    

    (b) A
      Warrant
      will not be valid until the Warrant Agent manually countersigns the Warrant,
      with the signature conclusive evidence that the Warrant has been countersigned
      under this Agreement. At any time and from time to time after the execution
      and
      delivery of this Agreement, the Company may deliver Warrants executed by the
      Company to the Warrant Agent for countersignature. The Warrant Agent will
      countersign and deliver a number of Warrants for original issue convertible
      into
      an aggregate of Warrant Shares not to exceed 400,000 (except as may be adjusted
      pursuant to Article 6) after receipt by the Warrant Agent of an Officers’
Certificate specifying:

    

    (i) the
      number of Warrants to be countersigned and the date on which the Warrants are
      to
      be countersigned; and

    

    (ii) other
      information the Company may with the Initial Holder’s consent determine to
      include or the Warrant Agent may reasonably request.

    

    The
      Company will supply the Warrant Agent with an adequate supply of Warrant
      Certificates.

     

    
      
         

      

      
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          6 -

        
          

        

      

      
         

      

       

    

    Section
      3.04 Warrant
      Registrar.
      The
      Company may appoint one or more Registrars in respect of the Warrants, in which
      case each reference in this Agreement to the Warrant Agent in respect of the
      obligations of the Warrant Agent to be performed by the Registrar will be deemed
      to be references to the Registrar. Although the Company may act as Registrar,
      the Company initially appoints the Warrant Agent as Registrar.

     

    Section
      3.05 Replacement
      Warrants.
      If a
      mutilated or defaced Warrant is surrendered to the Warrant Agent or if a Holder
      claims that its Warrant has been lost, destroyed or wrongfully taken, the
      Company will issue and the Warrant Agent will countersign a replacement Warrant.
      Every replacement Warrant is an additional obligation of the Company and
      entitled to the benefits of the Warrant Agreement. If required by the Warrant
      Agent or the Company, an indemnity must be furnished that is sufficient in
      the
      reasonable judgment of both the Warrant Agent and the Company to protect the
      Company and the Warrant Agent from any loss they may suffer if a Warrant is
      replaced. The Company may charge the Holder for the reasonable expenses of
      the
      Company and the Warrant Agent in replacing a Warrant.

     

    Section
      3.06 Outstanding
      Warrants.

    

    (a) Warrants
      outstanding at any time are all Warrants that have been countersigned by the
      Warrant Agent except for:

    

    (i) Warrants
      cancelled by the Warrant Agent or delivered to it for cancellation;

    

    (ii) Warrants
      exercised by the Holder thereof; and

    

    (iii) any
      Warrant which has been replaced pursuant to Section 3.05 unless and until
      the Warrant Agent and the Company receive proof satisfactory to them that the
      replaced Warrant is held by a bona fide purchaser.

    

    (b) Prior
      to
      cancellation of a Warrant pursuant to Section 3.07, a Warrant does not
      cease to be outstanding because the Company or one of its Affiliates holds
      the
      Warrant; provided that in determining whether the Holders of the requisite
      number of the outstanding Warrants have given or taken any request, demand,
      authorization, direction, notice, consent, waiver or other action hereunder,
      Warrants owned by the Company or any Affiliate of the Company will be
      disregarded and deemed not to be outstanding (it being understood that in
      determining whether the Warrant Agent is protected in relying upon any such
      request, demand, authorization, direction, notice, consent, waiver or other
      action, only Warrants which the Warrant Agent knows to be so owned will be
      so
      disregarded).

     

    Section
      3.07 Cancellation.
      The
      Company will deliver to the Warrant Agent for cancellation any Warrants
      previously countersigned and delivered hereunder which the Company may have
      acquired (to the extent that the Company may be permitted under applicable
      law
      or its constitutive documents) in any manner whatsoever, and will deliver to
      the
      Warrant Agent for cancellation any Warrants previously countersigned hereunder
      which the Company has not issued and sold. The Company will procure that any
      Warrant purchased by an Affiliate shall be delivered to the Warrant Agent for
      cancellation. Any Registrar will forward to the Warrant Agent any Warrants
      surrendered to it for transfer, exchange or exercise. The Warrant Agent will
      cancel all Warrants surrendered for transfer, exchange, exercise or cancellation
      and dispose of them in accordance with the written instructions of the Company.
      The Company may not issue new Warrants to replace Warrants that have been
      exercised or delivered to the Warrant Agent for cancellation.

     

    
      
         

      

      
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          7 -

        
          

        

      

      
         

      

       

    

    Section
      3.08 Registration,
      Transfer and Exchange.

    

    (a) The
      Warrants will be issued in registered form only, and the Company shall cause
      the
      Registrar to maintain a register (the “Register”)
      of the
      Warrants, for registering the record ownership of the Warrants by the Holders
      and transfers and exchanges of the Warrants.

    

    (b) Each
      Certificated Warrant will be registered in the name of the holder thereof or
      its
      nominee.

    

    (c) A
      Holder
      may transfer a Warrant (or a beneficial interest therein) to another Person
      or
      exchange a Warrant (or a beneficial interest therein) for another Warrant by
      presenting to the Warrant Agent a written request therefor stating the name
      of
      the proposed transferee or requesting such an exchange, which shall be
      substantially in the form of the Warrant Transfer Notice attached to
      Exhibit A, accompanied by any certification, opinion or other document
      required by this Agreement. The Warrant Agent will promptly register any
      transfer or exchange that meets the requirements of this Section 3.08 and
      Section 3.09 by noting the same in the Register maintained by the Registrar
      for the purpose; provided that no transfer or exchange will be effective until
      it is registered in such Register. Prior to the registration of any transfer,
      the Company, the Warrant Agent and their agents will treat the Person in whose
      name the Warrant is registered as the owner and Holder thereof for all purposes,
      and will not be affected by notice to the contrary.

    

    From
      time
      to time the Company may execute and the Warrant Agent may countersign additional
      Warrants as may be necessary in order to permit the registration of a transfer
      or exchange in accordance with this Section 3.08. All Warrants issued upon
      transfer or exchange shall be the duly authorized, executed and delivered
      Warrants of the Company entitled to the benefits of this Agreement.

    

    No
      service charge will be imposed in connection with any transfer or exchange
      of
      any Warrant, but the Company may require payment of a sum sufficient to cover
      any documentary, stamp or similar issue or transfer taxes in connection
      therewith. 

    

    (d) If
      a
      Certificated Warrant is transferred or exchanged for another Certificated
      Warrant, the Warrant Agent will (x) cancel the Certificated Warrant being
      transferred or exchanged, (y) deliver one or more new Certificated Warrants
      for
      an aggregate number of Warrants equal to the number of Warrants being
      transferred or exchanged to the transferee (in the case of a transfer) or the
      Holder of the cancelled Certificated Warrant (in the case of an exchange),
      registered in the name of such transferee or Holder, as applicable, and (z)
      if
      such transfer or exchange involves less than the entire amount of the cancelled
      Certificated Warrant, deliver to the Holder thereof one or more Certificated
      Warrants having an aggregate amount of Warrants equal to the untransferred
      or
      unexchanged portion of the cancelled Certificated Warrant, registered in the
      name of the Holder thereof. In the event that a Certificated Warrant that does
      not bear the Restricted Legend is surrendered for transfer or exchange, upon
      transfer or exchange the Warrant Agent will deliver a Certificated Warrant
      that
      does not bear the Restricted Legend.

     

    
      
         

      

      
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          8 -

        
          

        

      

      
         

      

       

    

    Section
      3.09 Restrictions
      on Transfer and Exchange.

    

    (a) The
      transfer or exchange of any Warrant (or a beneficial interest therein) may
      only
      be made in accordance with this Section 3.09 and
      Section 3.08.

    

    (b) By
      its
      acceptance of any Warrant bearing the Restricted Legend, each Holder thereof
      acknowledges the restrictions on transfer of such Warrant set forth in this
      Agreement and in the Restricted Legend and agrees that it will transfer such
      Warrant only in accordance with such restrictions. In connection with any
      transfer of Warrants, each Holder agrees by its acceptance of the Warrants
      to
      furnish the Warrant Agent or the Company such certifications, legal opinions
      or
      other information as either of them may reasonably require to confirm that
      such
      transfer is being made pursuant to an exemption from, or a transaction not
      subject to, the registration requirements of the Securities Act, including
      the
      Warrant Transfer Notice attached to Exhibit A, if applicable; provided that
      the Warrant Agent shall not be required to determine (but may rely on a
      determination made by the Company with respect to) the sufficiency of any such
      certifications, legal opinions or other information. Upon delivery by a Holder
      of a certificate satisfactory to the Warrant Agent and the Company certifying
      that, with respect to a Certificated Warrant bearing the Restricted Legend,
      all
      conditions have been met to qualify for exemption from registration requirements
      under the Securities Act pursuant to Rule 144(k), together with the
      Company’s written consent (which shall not be unreasonably withheld), the
      Warrant Agent will exchange such Certificated Warrant for a Certificated Warrant
      not bearing the Restricted Legend.

    

    (c) The
      Warrant Agent shall keep copies of all certificates, opinions and other
      documents received in connection with the transfer or exchange of a Warrant
      (or
      a beneficial interest therein), available for inspection or copying by the
      Company or any Holder during normal business hours at the Corporate Trust
      Office.

     

    Section
      3.10 Representations
      and Covenants of the Initial Holder.
      The
      Initial Holder hereby represents and warrants to the Company as follows,
      provided, however, that nothing set forth in this Section 3.10 shall limit
      or modify the provisions in Section 3.01 to Section 3.09.

    

    (a) Acquisition
      for Own Account.

    

    The
      Warrants are being acquired, and the Warrant Shares will be acquired, for the
      Initial Holder’s own account, not as a nominee or agent, and not with a view to
      the public resale or distribution thereof without registration under the
      Securities Act or an exemption therefrom.

    

    (b) Accredited
      Investor Status.
      

    

    The
      Initial Holder is an “accredited investor” within the meaning of
      Regulation D promulgated under the Securities Act.

    

    
      
         

      

      
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          9 -

        
          

        

      

      
         

      

       

    

    (c) Restricted
      Securities.
      

    

    The
      Initial Holder understands that the Warrants to be issued to the Initial Holder
      hereunder and the Warrant Shares issuable upon exercise thereof are “restricted
      securities” under the Securities Act inasmuch as they are being acquired or will
      be acquired from the Company in a transaction not involving a public offering
      and that, under the Securities Act and applicable regulations thereunder, such
      securities may be transferred without registration under the Securities Act
      only
      in certain limited circumstances. The Initial Holder is familiar with
      Rule 144 of the Commission, as presently in effect, and understands the
      transfer limitations imposed thereby and by the Securities Act.

    

    ARTICLE
      IV

    EXPIRATION
      OF WARRANTS; TERMS OF WARRANTS;

    EXERCISE
      OF WARRANTS

     

    Section
      4.01 Expiration
      of Warrants; Terms of Warrants; Exercise of Warrants.

    

    (a) Each
      Warrant not exercised prior to 5:00 p.m., New York City time, on the Expiration
      Date shall become void and all rights thereunder and all rights in respect
      thereof under this Agreement shall cease as of such time. The Company will
      give
      notice of expiration to each of the Holders at its last known address as set
      forth in the Register not less than 30 nor more than 60 days prior to the
      Expiration Date. If the Company fails to give such notice, the Warrants will
      nonetheless expire and become void on the Expiration Date. 

    

    (b) Subject
      to the terms of this Agreement, the Warrants shall be exercisable, at the
      election of the Holders thereof, either in full or from time to time in part
      during the period commencing at the opening of business on the Tranche A
      Issue Date or Tranche B Issue Date, as applicable, and until 5:00 p.m.,
      Singapore time on the Expiration Date, and shall entitle any Holder thereof
      to
      receive from the Company the number of fully paid and nonassessable Warrant
      Shares which the Holder may at the time be entitled to receive on exercise
      of
      such Warrants and payment of the Exercise Price per share in cash, by wire
      transfer or by certified or official check payable to the order of the Company,
      in each case, equal to the Exercise Price then in effect for such Warrant
      Shares. The Company and the Holders agree, that Holders shall exercise their
      Warrants only if the exercise of such Warrants is exempt from, or in compliance
      with, the registration requirements of the Securities Act and such securities
      are qualified for sale or exempt from qualification under the applicable
      securities laws of the states in which the various holders of the Warrants
      or
      other persons to whom it is proposed that the Warrant Shares be issued on
      exercise of the Warrants reside; provided that an exercise of any Warrant
      pursuant to Section 4.01(d) shall be deemed to be an exempt transaction
      under the Securities Act. No adjustments as to dividends will be made upon
      exercise of the Warrants. In no event shall the Exercise Price payable be lower
      than the par value of the Common Stock; provided, however, solely for purposes
      of calculating the adjustment of Exercise Price and number of Warrant Shares
      issuable upon the exercise of each Warrant under Article 6, such Exercise
      Price as calculated (but not the amount payable) may be lower than the par
      value
      of the Common Stock.

    

    (c) Any
      transaction fees incurred in connection with the exercise of the Warrants shall
      be borne by the Company.

    

    
      
         

      

      
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          10 -

        
          

        

      

      
         

      

       

    

    (d) Subject
      to the terms of this Agreement, to the extent that Warrants are exercisable
      pursuant to Section 4.01(b), a Holder may also elect to convert Warrants
      into Common Stock through a cashless exercise, in which event, in consideration
      of the Holder agreeing to reduce the number of shares of Common Stock the Holder
      would otherwise be entitled to receive under Section 4.01(b) the Company
      will calculate and issue to the Holder the number of shares of Common Stock
      equal to the result obtained as set forth in the following equation by
      (i) subtracting B from A, (ii) dividing the result by A, and
      (iii) multiplying the result by C:

     

    
      	
              X
                =

            	
              (A
                - B)

            	
              x
                C

            
	 	
              A

            	 

    

     

    where:

     

    
      	
              X

            	
              =

            	
              the
                number of shares of Common Stock issuable upon exercise pursuant
                to this
                paragraph (d).

            
	 	 	 
	
              A

            	
              =

            	
              the
                Daily Price on the day immediately preceding the date on which the
                Holder
                delivers written notice to the Company pursuant to
                paragraph (e).

            
	 	 	 
	
              B

            	
              =

            	
              the
                Exercise Price.

            
	 	 	 
	
              C

            	
              =

            	
              the
                number of shares of Common Stock as to which the Warrants are then
                being
                exercised (prior to payment of the Exercise
                Price).

            

    

     

    If
      the
      foregoing calculation results in a negative number, then no shares of Common
      Stock shall be issued upon exercise pursuant to this
      Section 4.01(d).

    

    (e) In
      order
      to exercise all or any of the Warrants, the Holder thereof must deliver to
      the
      Warrant Agent at its Corporate Trust Office (i) such Warrants,
      (ii) the form of election to purchase on the reverse thereof duly filled in
      and signed and (iii) evidence of any applicable payment to the Company of
      the then-current Exercise Price (in the manner set forth in paragraphs (b)
      or (d) above) for the number of Warrant Shares in respect of which the Warrants
      are being exercised. If any of these items (i), (ii) or (iii) are not
      received by the Warrant Agent, the Warrant Agent shall reject such exercise.
      The
      Company shall bear all of its own expenses and the expenses of the Warrant
      Agent
      in respect of the exercise of any Warrant.

    

    (f) Upon
      compliance with the provisions of this Section 4.01 set forth above, the
      Warrant Agent shall request from the Company and the Company shall promptly
      deliver or cause to be delivered, to or upon the written order of the Holder
      and
      subject to any applicable transfer restrictions contained herein, in such name
      or names as the Holder may designate, a certificate or certificates for the
      number of whole Warrant Shares issuable upon the exercise of such Warrants
      or
      other securities or property to which such Holder is entitled, together with
      cash in lieu of fractional shares as provided in Section 6.02. The Company
      shall calculate the number of Warrant Shares that the Holder shall be entitled
      to receive upon such exercise, which determination, absent manifest error or
      bad
      faith, shall be final and conclusive. Any such certificate or certificates
      or
      other securities or property shall be deemed to have been issued, and any person
      so designated to be named therein shall be deemed to have become a holder of
      record of such Warrant Shares or other securities or property, as of the date
      of
      the surrender of such Warrants and payment of the corresponding Exercise Price,
      notwithstanding that the stock transfer books of the Company shall then be
      closed or the Warrant Certificates have not yet been delivered.

    

    
      
         

      

      
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          11 -

        
          

        

      

      
         

      

       

    

    (g) If
      less
      than all the Warrants represented by a Warrant Certificate are exercised, such
      Warrant Certificate shall be surrendered and a new Warrant Certificate of the
      same tenor and for the number of Warrants which were not exercised shall be
      executed by the Company and delivered to the Warrant Agent and the Warrant
      Agent
      shall countersign the new Warrant Certificate, registered in such name or names
      as may be directed in writing by the Holder, and shall deliver the new Warrant
      Certificate to the Person or Persons entitled to receive the same.

    

    (h) All
      Warrant Certificates surrendered upon exercise of Warrants shall be cancelled
      by
      the Warrant Agent. Such cancelled Warrant Certificates shall then be disposed
      of
      by the Warrant Agent as instructed in writing by the Company. The Warrant Agent
      shall account promptly to the Company with respect to Warrants exercised and
      concurrently pay to the Company all US Dollar amounts (if any) received by
      the
      Warrant Agent for the purchase of the Warrant Shares through the exercise of
      such Warrants.

    

    (i) The
      Warrant Agent shall keep copies of this Agreement and any notices given or
      received hereunder available for inspection by the Holders during normal
      business hours at its Corporate Trust Office.

    

    (j) Certificates
      representing Warrant Shares shall bear a Restricted Legend (with all references
      to Warrants therein replaced by references to Common Stock, and with such other
      changes thereto as the Company may deem appropriate) if (i) the Warrants
      for which they were issued carried a Restricted Legend, or (ii) the Warrant
      Shares are issued in a transaction exempt from registration under the Securities
      Act (other than the exemption provided by Section 3(a)(9) of the Securities
      Act, provided that the Warrants were then not restricted securities); provided
      that, in each case, the Warrant Shares shall not bear the Restricted Legend
      (and
      any existing Restricted Legend shall be removed) if the circumstances of
      Section 3.02(c) apply to such Warrant Shares.

    

    ARTICLE
      V

    REPRESENTATIONS
      AND COVENANTS OF THE COMPANY

     

    Section
      5.01 Maintenance
      of Office or Agency.

    

    (a) The
      Company at all time will maintain in the Borough of Manhattan, the City of
      New
      York, an office or agency where Warrants may be surrendered for registration
      of
      transfer or exchange or for presentation for exercise. The Company hereby
      initially (1) designates the Corporate Trust Office of the Warrant Agent as
      such office of the Company where the Warrants may be presented for exercise
      and
      (2) designates the office of the Registrar where the Warrants may be
      surrendered for registration of transfer or exchange. The Company will give
      prompt written notice to the Warrant Agent of the location, and any change
      in
      the location, of such office or agency, if the Corporate Trust Office is not
      the
      designated office. If at any time the Company fails to maintain any such
      required office or agency or fails to furnish the Warrant Agent with the address
      thereof, such presentations, surrenders, notices and demands may be made or
      served to the Warrant Agent.

    

    
      
         

      

      
        -
          12 -

        
          

        

      

      
         

      

       

    

    (b) The
      Company may also from time to time designate one or more other offices or
      agencies where the Warrants may be surrendered or presented for any of such
      purposes and may from time to time rescind such designations. The Company hereby
      initially designates the Corporate Trust Office of the Warrant Agent as such
      office. The Company will give prompt written notice to the Warrant Agent of
      any
      such designation or rescission and of any change in the location of any such
      other office or agency, if the Corporate Trust Office is not the designated
      office. 

     

    Section
      5.02 Payment
      of Taxes.
      The
      Company will pay all documentary, stamp or similar issue or transfer taxes
      in
      respect of the issuance or delivery of Warrant Shares upon the exercise of
      Warrants; provided that the Company shall not be required to pay any tax or
      taxes which may be payable in respect of any transfer involved in the issue
      of
      any Warrants or any Warrant Shares in a name other than that of the registered
      holder of a Warrant surrendered upon exercise, and the Company shall not be
      required to issue or deliver such Warrant unless or until the person or persons
      requesting the issuance thereof shall have paid to the Company the amount of
      such tax or shall have established to the satisfaction of the Company that
      such
      tax has been paid.

     

    Section
      5.03 Reports.

    

    (a) Whether
      or not the Company is subject to the reporting requirements of Section 13
      or 15(d) of the Exchange Act, the Company must provide the Warrant Agent and
      Holders with 

    

    (i) all
      quarterly and annual financial information that would be required to be
      contained in a filing with the Commission on Forms 10 Q and 10 K if
      the Company were required to file such forms, including a “Management’s
      Discussion and Analysis of Financial Condition and Results of Operations” and,
      with respect to annual information only, a report thereon by the Company’s
      certified independent accountants, and

    

    (ii) all
      current reports that would be required to be filed with the Commission on
      Form 8-K if the Company were required to file such reports.

    

    In
      addition, whether or not required by the Commission, the Company will, if the
      Commission will accept the filing, file a copy of all of the information and
      reports referred to in clauses (i) and (ii) with the Commission for public
      availability.

    

    (b) For
      so
      long as any of the Warrants or Warrant Shares remain outstanding and constitute
      “restricted securities” under Rule 144, the Company will furnish to the
      Holders and prospective investors, upon their request, the information required
      to be delivered pursuant to Rule 144(c) under the Securities
      Act.

     

    
      
         

      

      
        -
          13 -

        
          

        

      

      
         

      

       

    

    Section
      5.04 Reservation
      of Warrant Shares.

    

    (a) The
      Company will at all times reserve and keep available for issuance and delivery,
      free and clear of all liens, security interests, charges and other encumbrances
      or restrictions on sale and free and clear of all preemptive rights, such number
      of its authorized but unissued Common Stock or other securities of the Company
      from time to time issuable upon exercise of the Warrants as will be sufficient
      to permit the exercise in full of all outstanding Warrants.

    

    (b) The
      Company or, if appointed, the transfer agent for the Common Stock (the
“Transfer
      Agent”)
      and
      every subsequent transfer agent for any securities of the Company issuable
      upon
      the exercise of the Warrants will be irrevocably authorized and directed at
      all
      times to reserve such number of authorized securities as shall be required
      for
      such purpose. The Company will keep a copy of this Agreement on file with the
      Transfer Agent and with every subsequent transfer agent for any of the Company’s
      securities issuable upon the exercise of the Warrants. The Warrant Agent is
      hereby irrevocably authorized to requisition from time to time from such
      Transfer Agent the certificates for securities of the Company required to honor
      outstanding Warrants upon exercise thereof in accordance with the terms of
      this
      Agreement. The Company will supply such Transfer Agent with duly executed
      certificates for such purposes and will provide or otherwise make available
      any
      cash which may be payable as provided in Section 6.02. The Company will
      furnish such Transfer Agent a copy of all notices of adjustments, and
      certificates related thereto, transmitted to each Holder pursuant to
      Section 6.03.

    

    (c) Before
      taking any action which would cause an adjustment pursuant to Section 6.01
      to reduce the Exercise Price below the then par value of the Warrant Shares,
      the
      Company will take such corporate action in accordance with applicable law to
      validly and legally issue fully paid and nonassessable Warrant Shares at the
      Exercise Price as so adjusted, or otherwise give effect to such Exercise Price
      adjustment. The Company will deliver or cause to be delivered any certificate
      or
      notice required by Section 6.03.

    

    (d) The
      Company covenants that all Warrant Shares which may be issued upon exercise
      of
      Warrants will, upon issue, be fully paid, nonassessable, free of preemptive
      rights and free from all taxes, liens, charges and security interests with
      respect thereto.

     

    Section
      5.05 Obtaining
      Stock Exchange Listings.
      The
      Company will from time to time take all action which may be necessary so that
      the Warrant Shares, immediately upon their issuance upon the exercise of
      Warrants, will be listed on the principal securities exchanges, automated
      quotation systems or other markets within the United States of America, if
      any,
      on which the other shares of Common Stock are then listed, if any. At any time
      when the shares of Common Stock are not listed on the NASDAQ GM or any other
      national securities exchange, the Company will use its reasonable commercial
      efforts to have the shares of Common Stock quoted on the OTC Bulletin
      Board.

     

    Section
      5.06 Listing.
      The
      Company will not permit any of its subsidiaries to list its equity securities
      on
      a stock exchange.

     

    
      
         

      

      
        -
          14 -

        
          

        

      

      
         

      

       

    

    Section
      5.07 Compliance.
      The
      Company will, at all times, comply with any corporate governance requirements
      required by law or any applicable securities exchange regulations in connection
      with the issuance of the Warrants.

     

    Section
      5.08 Opinions.
      The
      Company will, k) concurrently with the execution of this Agreement by the
      Company and l) on the Tranche B Issue Date, deliver to the Warrant Agent
      and the Initial Holder legal opinions of O’Melveny & Myers LLP, U.S. counsel
      to the Company addressed to the Warrant Agent and the Initial Holder,
      substantially in the form set forth in Exhibit C hereto and such other
      matters as the Warrant Agent or the Initial Holder may reasonably request,
      in
      form and substance satisfactory to the Warrant Agent and the Initial
      Holder.

     

    Section
      5.09 Outstanding
      Shares of Common Stock.
      The
      Company represents that as of the Closing Date the total number of outstanding
      shares of Common Stock equals 50,000,713.

    

    ARTICLE
      VI

    ADJUSTMENT
      OF EXERCISE PRICE AND 

    NUMBER
      OF WARRANT SHARES ISSUABLE

     

    Section
      6.01 Adjustment
      of Exercise Price and Number of Warrant Shares Issuable.
      The
      Exercise Price and the number of Warrant Shares issuable upon the exercise
      of
      each Warrant are subject to adjustment from time to time upon the occurrence
      of
      the events enumerated in this Section 6.01. For purposes of this
      Section 6.01, “Common
      Stock”
means
      shares now or hereafter authorized of any class of common stock of the Company
      and any other capital stock of the Company, however designated, that has the
      right (subject to any prior rights of any class or series of preferred stock)
      to
      participate in any distribution of the assets or earnings of the Company without
      limit as to per share amount.

    

    In
      the
      event that, at any time as a result of the provisions of this Section 6.01,
      the Holders of the Warrants shall become entitled upon subsequent exercise
      to
      receive any shares of capital stock of the Company other than Common Stock,
      the
      number of such other shares so receivable upon exercise of this Warrant shall
      thereafter be subject to adjustment from time to time in a manner and on terms
      as nearly equivalent as practicable to the provisions contained
      herein.

    

    (a) Adjustment
      for Change in Capital Stock.

    

    If
      the
      Company (1) pays a dividend or makes a distribution on its Common Stock in
      shares of its Common Stock, (2) subdivides its outstanding shares of Common
      Stock into a greater number of shares, (3) combines its outstanding shares
      of Common Stock into a smaller number of shares, (4) makes a distribution
      on its Common Stock in shares of its capital stock other than Common Stock
      or
      (5) issues by reclassification of its Common Stock any shares of its
      capital stock, then the Exercise Price in effect immediately prior to such
      action shall be proportionately adjusted so that the holder of any Warrant
      thereafter exercised may receive the aggregate number and kind of shares of
      capital stock of the Company which he would have owned immediately following
      such action if such Warrant had been exercised immediately prior to such
      action.

    

    
      
         

      

      
        -
          15 -

        
          

        

      

      
         

      

       

    

    The
      adjustment shall become effective immediately after the record date in the
      case
      of a dividend or distribution and immediately after the effective date in the
      case of a subdivision, combination or reclassification. If, after an adjustment,
      a holder of a Warrant upon exercise of it may receive shares of two or more
      classes of capital stock of the Company, the Company shall determine, in good
      faith, the allocation of the adjusted Exercise Price between the classes of
      capital stock. After such allocation, the exercise privilege and the Exercise
      Price of each class of capital stock shall thereafter be subject to adjustment
      on terms comparable to those applicable to Common Stock in this
      Section 6.01. Such adjustment shall be made successively whenever any event
      listed above shall occur.

    

    (b) Adjustment
      for Rights Issue.

    

    If
      the
      Company distributes any rights, options or warrants to all holders of its Common
      Stock entitling them to purchase shares of Common Stock or securities
      convertible into, or exercisable or exchangeable for, Common Stock, at a price
      per share less than the Fair Value per share on that record date, the Exercise
      Price shall be adjusted in accordance with the formula:

    

    
      	 	
              O +

            	
              N x P

            
	
              E’ =

            	
              E  x

            	 	
              M

            
	 	 	
              O + N

            

    

    

    where:

     

    
      	
              E’

            	
              =

            	
              the
                adjusted Exercise Price.

            
	 	 	 
	
              E

            	
              =

            	
              the
                then current Exercise Price.

            
	 	 	 
	
              O

            	
              =

            	
              the
                number of shares of Common Stock outstanding on the record
                date.

            
	 	 	 
	
              N

            	
              =

            	
              the
                number of additional shares of Common Stock issuable pursuant to
                such
                rights, options or warrants.

            
	 	 	 
	
              P

            	
              =

            	
              the
                aggregate price per share of the additional shares.

            
	 	 	 
	
              M

            	
              =

            	
              the
                Fair Value per share of Common Stock on the record
                date.

            

    

     

    The
      adjustment shall be made successively whenever any such rights, options or
      warrants are issued and shall become effective immediately after the record
      date
      for the determination of stockholders entitled to receive the rights, options
      or
      warrants; provided that no further adjustment shall be made upon the subsequent
      issue or sale of Common Stock pursuant to such rights, options or warrants.
      If
      at the end of the period during which such rights, options or warrants are
      exercisable, not all rights, options or warrants shall have been exercised,
      the
      Exercise Price shall be immediately readjusted to what it would have been if
      “N”
in
      the
      above formula had been the number of shares actually issued.

    

    
      
         

      

      
        -
          16 -

        
          

        

      

      
         

      

       

    

    (c) Adjustment
      for Other Distributions.

    

    If
      the
      Company distributes to all holders of its Common Stock any of its assets
      (including cash dividends) or debt securities or any rights or warrants to
      purchase debt securities of the Company, the Exercise Price shall be adjusted
      in
      accordance with the formula:

     

    
      	
              E’
                =

            	
              E
                x

            	
              M
                -
                F

            
	 	 	
              M

            

    

    

    where:

     

    
      	
              E’

            	
              =

            	
              the
                adjusted Exercise Price.

            
	 	 	 
	
              E

            	
              =

            	
              the
                then current Exercise Price.

            
	 	 	 
	
              M

            	
              =

            	
              the
                Fair Value per share of Common Stock on the record date mentioned
                below.

            
	 	 	 
	
              F

            	
              =

            	
              the
                fair market value on the record date of the assets, securities, rights
                or
                warrants to be distributed in respect of one share of Common Stock
                as
                determined in good faith by the Board of
                Directors.

            

    

     

    The
      adjustment shall be made successively whenever any such distribution is made
      and
      shall become effective immediately after the record date for the determination
      of stockholders entitled to receive the distribution.

    

    This
      subsection (c) does not apply to (i) any of the transactions described
      in subsections (a) or (b) of this Section 6.01 or (ii) dividends
      in cash paid in the ordinary course in an amount that during any rolling
      twelve-month period does not exceed 3.0% of the Company’s market capitalization
      measured on the declaration date of each such dividend. Market capitalization
      shall, for purposes of the preceding sentence, be calculated based on the
      product of the total number of shares of Common Stock outstanding (not including
      any treasury shares) and the Daily Price per share, in each case as of the
      date
      of declaration of such dividend.

    

    (d) Adjustment
      for Common Stock Issue.

    

    If
      the
      Company issues shares of Common Stock for a consideration per share less than
      the Fair Value per share on the date the Company fixes the offering price of
      such additional shares, the Exercise Price shall be adjusted in accordance
      with
      the formula:

     

    
      	 	 	
              P

            
	
              E’ =

            	
              E  x

            	
              O
                +

            	
              M

            
	 	 	
              A

            

    

     

    
      
         

      

      
        -
          17 -

        
          

        

      

      
         

      

       

    

    where:

     

    
      	
              E’

            	
              =

            	
              the
                adjusted Exercise Price.

            
	 	 	 
	
              E

            	
              =

            	
              the
                then current Exercise Price.

            
	 	 	 
	
              O

            	
              =

            	
              the
                number of shares outstanding immediately prior to the issuance of
                such
                additional shares.

            
	 	 	 
	
              P

            	
              =

            	
              the
                aggregate consideration received for the issuance of such additional
                shares.

            
	 	 	 
	
              M

            	
              =

            	
              the
                Fair Value per share on the date of issuance of such additional
                shares.

            
	 	 	 
	
              A

            	
              =

            	
              the
                number of shares outstanding immediately after the issuance of such
                additional shares.

            

    

     

    The
      adjustment shall be made successively whenever any such issuance is made, and
      shall become effective immediately after such issuance.

    

    This
      subsection (d) does not apply to:

    

    (i) any
      of
      the transactions described in subsections (a), (b) and (c) of this
      Section 6.01, 

    

    (ii) the
      exercise of Warrants, or the conversion or exchange of other securities
      convertible or exchangeable for Common Stock the issuance of which caused an
      adjustment to be made under Section 6.01(e),

    

    (iii) Common
      Stock issued to shareholders of any Person which merges into the Company, or
      with a subsidiary of the Company, in proportion to their stock holdings of
      such
      Person immediately prior to such merger, upon such merger; provided that if
      such
      Person is an Affiliate of the Company, the Board of Directors shall have
      obtained a fairness opinion from an internationally recognized investment
      banking, appraisal or valuation firm, which is not an Affiliate of the Company,
      stating that the consideration received in such merger is fair to the Company
      from a financial point of view, or

    

    (iv) the
      issuance of Common Stock upon the exercise of options granted pursuant to the
      Company’s employee incentive plan (provided that, during any rolling
      twelve-month period, the number of shares of Common Stock issued in reliance
      on
      this clause (d)(iv) does not exceed, together with any Common Stock
      issuable pursuant to clause (e)(ii) below, 2.0% of the number of shares of
      Common Stock outstanding on the Closing Date, subject to any applicable
      anti-dilution adjustment).

    

    
      
         

      

      
        -
          18 -

        
          

        

      

      
         

      

       

    

    (e) Adjustment
      for Convertible Securities, Warrants or Options Issue.

    

    If
      the
      Company issues any securities convertible into, exercisable for or exchangeable
      for Common Stock (other than securities issued in transactions described in
      subsections (b) and (c) of this Section 6.01) for a consideration per
      share of Common Stock initially deliverable upon conversion, exercise or
      exchange of such securities less than the Fair Value per share on the date
      the
      Company fixes the offering price of such securities, the Exercise Price shall
      be
      adjusted in accordance with this formula:

     

    
      	 	 	
              P

            
	
              E’ =

            	
              E  x

            	
              O   
                +

            	
              M

            
	 	 	
              O  
                 +

            	
              D

            

    

    

    where:

     

    
      	
              E’

            	
              =

            	
              the
                adjusted Exercise Price.

            
	 	 	 
	
              E

            	
              =

            	
              the
                then current Exercise Price.

            
	 	 	 
	
              O

            	
              =

            	
              the
                number of shares outstanding immediately prior to the issuance of
                such
                securities.

            
	 	 	 
	
              P

            	
              =

            	
              the
                aggregate consideration received for the issuance of such
                securities.

            
	 	 	 
	
              M

            	
              =

            	
              the
                Fair Value per share on the date of issuance of such
                securities.

            
	 	 	 
	
              D

            	
              =

            	
              the
                maximum number of shares deliverable upon conversion or in exchange
                for
                such securities at the initial conversion or exchange
                rate.

            

    

     

    The
      adjustment shall be made successively whenever any such issuance is made, and
      shall become effective immediately after such issuance.

    

    If
      all of
      the Common Stock deliverable upon conversion, exercise or exchange of such
      securities have not been issued when such securities are no longer outstanding,
      then the Exercise Price shall promptly be readjusted to the Exercise Price
      which
      would then be in effect had the adjustment upon the issuance of such securities
      been made on the basis of the actual number of shares of Common Stock issued
      upon conversion, exercise or exchange of such securities.

    

    This
      subsection (e) does not apply to:

    

    (i) convertible
      securities issued to shareholders of any Person which merges into the Company,
      or with a subsidiary of the Company, in proportion to their stock holdings
      of
      such Person immediately prior to such merger, upon such merger; provided that
      if
      such Person is an Affiliate of the Company, the Board of Directors shall have
      obtained a fairness opinion from an internationally recognized investment
      banking, appraisal or valuation firm, which is not an Affiliate of the Company,
      stating that the consideration received in such merger is fair to the Company
      from a financial point of view, or

    

    
      
         

      

      
        -
          19 -

        
          

        

      

      
         

      

       

    

    (ii) the
      issuance of convertible securities pursuant to the Company’s employee incentive
      plan (provided that, during any rolling twelve-month period, the aggregate
      number of shares of Common Stock issuable upon conversion thereof does not
      exceed, together with shares issued pursuant to clause (d)(iv) above, 2.0%
      of the number of shares of Common Stock outstanding on the Closing Date, subject
      to any applicable anti-dilution adjustment).

    

    (iii) the
      issuance of the Warrants.

    

    (f) Consideration
      Received.

    

    For
      purposes of any computation in respect of consideration received pursuant to
      subsections (d) and (e) of this Section 6.01, the following shall
      apply:

    

    (i) in
      the
      case of the issuance of shares of Common Stock for cash, the consideration
      shall
      be the amount of such cash; provided that in no case shall any deduction be
      made
      for any commissions, discounts or other expenses incurred by the Company for
      any
      underwriting of the issue or otherwise incurred or paid in connection
      therewith;

    

    (ii) in
      the
      case of the issuance of shares of Common Stock for a consideration in whole
      or
      in part other than cash, the consideration other than cash shall be deemed
      to be
      the fair market value thereof as determined in good faith by the Board of
      Directors and described in a Board Resolution (and, if such issuance is to
      an
      Affiliate of the Company, confirmed by a written opinion of an internationally
      recognized investment banking, appraisal or valuation firm that is not an
      Affiliate of the Company);

    

    (iii) in
      the
      case of the issuance of securities convertible into or exchangeable for shares
      of Common Stock, the aggregate consideration received therefor shall be deemed
      to be the consideration received by the Company for the issuance of such
      securities plus the additional minimum consideration, if any, to be received
      by
      the Company upon the conversion or exchange thereof (the consideration in each
      case to be determined in the same manner as provided in clauses (i) and
      (ii) of this subsection); and

    

    (iv) in
      the
      case of the issuance of shares of Common Stock pursuant to rights, options
      or
      warrants which rights, options or warrants were originally issued together
      with
      one or more other securities as part of a unit at a price per unit, the
      consideration shall be deemed to be the fair value of such rights, options
      or
      warrants at the time of issuance thereof as determined in good faith by the
      Board of Directors in accordance with GAAP whose determination shall be
      described in a Board Resolution (and, if such issuance is to an Affiliate of
      the
      Company, confirmed by a written opinion of an internationally recognized
      investment banking, appraisal of valuation firm that is not an Affiliate of
      the
      Company) plus the additional minimum consideration, if any, to be received
      by
      the Company upon the exercise, conversion or exchange thereof (as determined
      in
      the same manner as provided in clauses (i) and (ii) of this
      subsection).

    

    
      
         

      

      
        -
          20 -

        
          

        

      

      
         

      

       

    

    (g) Fair
      Value.

    

    (i) Fair
      Value Determination in Respect of Section 6.01(d) and (e).
      In
      Section 6.01(d) and (e), the “Fair
      Value”
per
      share of Common Stock at any date of determination shall be

    

    1. at
      a time
      when the Common Stock is not listed on the NASDAQ GM, (A) in connection
      with a sale by the Company to a party that is not an Affiliate of the Company
      in
      an arm’s length transaction (a “Non
      Affiliate Sale”),
      the
      price per share of Common Stock at which such security is sold and (B) in
      connection with any sale by the Company to an Affiliate of the Company,
      (1) the last price per share of Common Stock at which such security was
      sold in a Non Affiliate Sale within the three month period preceding such date
      of determination or (2) if clause (1) is not applicable, the fair
      market value of such security determined in good faith by (x) a majority of
      the
      Board of Directors, including a majority of the Disinterested Directors, and
      approved in a Board Resolution delivered to the Warrant Agent along with an
      Officer’s Certificate indicating that such Board Resolution was approved by a
      majority of the Disinterested Directors or (y) an internationally recognized
      investment banking, appraisal or valuation firm, which is not an Affiliate
      of
      the Company, in each case, taking into account, among all other factors deemed
      relevant by the Board of Directors or such investment banking, appraisal or
      valuation firm, the trading price and volume of such security on any national
      securities exchange or automated quotation system on which such security is
      traded; and

    

    2. at
      a time
      when the Common Stock is listed on the NASDAQ GM, the average (weighted by
      daily
      trading volume) of the Daily Prices per share of the Common Stock for the 20
      consecutive trading days immediately prior to such date.

    

    (ii) Fair
      Value Determination in Respect of Section 6.01(b) and (c).
      In
      Section 6.01(b) and (c) and the definition of Daily Price, the
“Fair
      Value”
per
      share of Common Stock at any date of determination shall be,

    

    1. at
      a time
      when the Common Stock is not listed on the NASDAQ GM (A) the last price per
      security at which such share of Common Stock was sold by the Company in a Non
      Affiliate Sale within the three month period preceding such date of
      determination or (B) if clause (A) is not applicable, the fair market
      value of such security determined in good faith by (x) a majority of the Board
      of Directors, including a majority of the Disinterested Directors, and approved
      in a Board Resolution delivered to the Warrant Agent along with an Officer’s
      Certificate indicating that such Board Resolution was approved by a majority
      of
      the Disinterested Directors or (y) an internationally recognized investment
      banking, appraisal or valuation firm, which is not an Affiliate of the Company,
      in each case, taking into account, among all other factors deemed relevant
      by
      the Board of Directors or such investment banking, appraisal or valuation firm,
      the trading price and volume of such security on any national securities
      exchange or automated quotation system on which such security is traded;
      and

    

    2. at
      a time
      when the Common Stock is listed on the NASDAQ GM, the average (weighted by
      daily
      trading volume) of the Daily Prices per share of the Common Stock for the 20
      consecutive trading days immediately prior to such date.

    

    
      
         

      

      
        -
          21 -

        
          

        

      

      
         

      

       

    

    (h) When
      De Minimis Adjustment May Be Deferred.

    

    No
      adjustment in the Exercise Price need be made unless the adjustment would
      require an increase or decrease of at least 1% in the Exercise Price. Any
      adjustments that are not made shall be carried forward and taken into account
      in
      any subsequent adjustment. All calculations under this Section 6.01 shall
      be made to the nearest whole U.S. cent or to the nearest 1/100th of a share,
      as
      the case may be, it being understood that no such rounding shall be made under
      Section 6.01(n) (and, in calculations made pursuant to such paragraph, the
      adjusted Exercise Price shall refer to such adjusted price before
      rounding).

    

    (i) When
      No Adjustment Required.

    

    No
      adjustment need be made for a transaction referred to in Section 6.01(a),
      (b), (c), (d) or (e), if Holders are to participate (without being required
      to
      exercise their Warrants) in the transaction on a basis and with notice that
      the
      Board of Directors determines to be fair and appropriate (taking into account
      the basis and notice on which the holders of Common Stock may participate in
      the
      transaction). No adjustment need be made for (8) rights to purchase Common
      Stock
      pursuant to a Company plan for reinvestment of dividends or interest, or (9)
      a
      change in the par value or no par value of the Common Stock. To the extent
      the
      Warrants become convertible into cash, no adjustment need be made thereafter
      as
      to the cash. Interest will not accrue on the cash.

    

    (j) Notice
      of Adjustment.

    

    Whenever
      the Exercise Price is adjusted, the Company shall perform the calculations
      required under this Article 6 in good faith and provide the notices to the
      Warrant Agent and the Holders required by Section 6.03.

    

    (k) Reorganization
      of Company.

    

    (i) If
      the
      Company consolidates or merges with or into, or sells, transfers or leases
      all
      or substantially all its assets to, any Person, upon consummation of such
      transaction the Warrants shall automatically become exercisable for the kind
      and
      amount of securities, cash or other assets which the Holder of a Warrant would
      have owned immediately after the consolidation, merger, transfer or lease if
      the
      Holder had exercised the Warrant immediately before the effective date of the
      transaction. Concurrently with and as a condition to the consummation of such
      transaction, the Person formed by or surviving any such consolidation or merger
      if other than the Company, or the Person to which such transfer or lease shall
      have been made, shall enter into (10) a supplemental agreement to this Agreement
      so providing and further providing for adjustments which shall be as nearly
      equivalent as may be practical to the adjustments provided for in this
      Section 6.01 and (11) a supplement agreement to the Registration
      Rights Agreement providing for the assumption of the Company’s obligations
      thereunder. The successor Company shall mail to Warrant Holders a notice
      describing the supplemental agreements to this Agreement and the Registration
      Rights Agreement. If the issuer of securities deliverable upon exercise of
      Warrants under the supplemental agreement to this Agreement is an Affiliate
      of
      the formed, surviving, transferee or lessee Person, that issuer shall join
      in
      the supplemental agreement to this Agreement and the Registration Rights
      Agreement. If this Section 6.01(k) applies to a transaction,
      Section 6.01(a), (b), (c), (d) and (e) do not apply.

    

    
      
         

      

      
        -
          22 -

        
          

        

      

      
         

      

       

    

    (ii) Notwithstanding
      subclause (i) above, if (12) the Company consolidates or merges with or
      into, or sells, transfers or leases all or substantially all its assets to,
      any
      Person and in connection therewith, the consideration payable to holders of
      Common Stock in exchange for their Common Stock is payable solely in cash or
      (13) proceedings commence for the voluntary or involuntary dissolution,
      liquidation or winding up of the Company, then the Warrants shall automatically
      be exercised into such number of Warrant Shares as is determined pursuant to
      the
      provisions of Section 4.01(d), and the Warrant certificate representing
      such Warrants shall be deemed cancelled. As a result of such conversion, each
      holder of Warrant Shares shall be entitled to receive distributions on an equal
      basis with the holders of the Common Stock. If this Section 6.01(k) applies
      to a transaction, Sections 6.01(a), (b), (c), (d) and (e) do not
      apply.

    

    (l) Company
      Determination Final.

    

    Any
      determination that the Company or the Board of Directors must make pursuant
      to
      Section 6.01(a) through (i) is conclusive in the absence of manifest
      error or bad faith; provided that the Company or the Board of Directors complies
      with the requirements set forth in the definition of Fair Value. 

    

    (m) When
      Issuance or Payment May Be Deferred.

    

    In
      any
      case in which this Section 6.01 shall require that an adjustment in the
      Exercise Price be made effective as of a record date for a specified event,
      the
      Company may elect to defer until the occurrence of such event (14) issuing
      to
      the holder of any Warrant exercised after such record date the Warrant Shares
      and other capital stock of the Company, if any, issuable upon such exercise
      over
      and above the Warrant Shares and other capital stock of the Company, if any,
      issuable upon such exercise on the basis of the Exercise Price and (15) paying
      to such holder any amount in cash in lieu of a fractional share pursuant to
      Section 6.02; provided that the Company shall deliver to such holder a due
      bill or other appropriate instrument evidencing such holder’s right to receive
      such additional Warrant Shares, other capital stock and cash upon the occurrence
      of the event requiring such adjustment.

    

    (n) Adjustment
      in Number of Shares.

    

    Upon
      each
      adjustment of the Exercise Price pursuant to this Section 6.01, each
      Warrant outstanding prior to the making of the adjustment in the Exercise Price
      shall thereafter evidence the right to receive upon payment of the adjusted
      Exercise Price that number of shares of Common Stock (calculated to the nearest
      hundredth) obtained from the following formula:

     

    
      
         

      

      
        -
          23 -

        
          

        

      

      
         

      

       

    

    
      	
              N’
                =

            	
              N
                x

            	
              E

            
	 	 	
              E’

            

    

    where:

     

    
      	
              N’

            	
              =

            	
              the
                adjusted number of Warrant Shares issuable upon exercise of a Warrant
                by
                payment of the adjusted Exercise Price.

            
	 	 	 
	
              N

            	
              =

            	
              the
                number of Warrant Shares previously issuable upon exercise of a Warrant
                by
                payment of the Exercise Price prior to adjustment.

            
	 	 	 
	
              E’

            	
              =

            	
              the
                adjusted Exercise Price.

            
	 	 	 
	
              E

            	
              =

            	
              the
                Exercise Price prior to adjustment.

            

    

     

    (o) Form
      of Warrants.

    

    Irrespective
      of any adjustments in the Exercise Price or the number or kind of shares
      purchasable upon the exercise of the Warrants, Warrants theretofore or
      thereafter issued may continue to express the same price and number and kind
      of
      shares as are stated in the Warrants initially issuable pursuant to this
      Agreement.

     

    Section
      6.02 Fractional
      Interests.
      The
      Company shall not be required to issue fractional Warrant Shares or scrip
      representing fractional shares on the exercise of Warrants. If more than one
      Warrant shall be presented for exercise in full at the same time by the same
      Holder, the number of full Warrant Shares which shall be issuable upon the
      exercise thereof shall be computed on the basis of the aggregate number of
      Warrant Shares purchasable on exercise of the Warrants so presented. If any
      fraction of a Warrant Share would, except for the provisions of this
      Section 6.02, be issuable on the exercise of any Warrants (or specified
      portion thereof), the Company shall pay an amount in cash equal to the Fair
      Value per Warrant Share, as determined on the New York business day immediately
      preceding the date the Warrant is presented for exercise, multiplied by such
      fraction, computed to the nearest whole U.S. cent.

     

    Section
      6.03 Notices
      to Warrant Holders.

    

    (a) Upon
      any
      adjustment of the Exercise Price pursuant to Section 6.01, the Company
      shall promptly thereafter (1) cause to be filed with the Warrant Agent a
      certificate of a firm of independent public accountants of internationally
      recognized standing selected by the Board of Directors (who may be the regular
      auditors of the Company) setting forth the Exercise Price after such adjustment
      and setting forth in reasonable detail the method of calculation and the facts
      upon which such calculations are based and setting forth the number of Warrant
      Shares (or portion thereof) or other securities or property issuable after
      any
      adjustment in the Exercise Price, upon exercise of a warrant any payment of
      the
      adjusted Exercise Price which certificate shall be conclusive evidence of the
      correctness of the matters set forth therein, and (2) cause to be given to
      each of the Holders written notice of such adjustments by first class mail,
      postage prepaid. Where appropriate, such notice may be given in advance and
      included as a part of the notice required to be mailed under the other
      provisions of this Section 6.03.

    

    
      
         

      

      
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          24 -

        
          

        

      

      
         

      

       

    

    (b) In
      case:

    

    (i) the
      Company shall authorize the issuance to all holders of shares of Common Stock
      of
      rights, options or warrants to subscribe for or purchase shares of Common Stock
      or of any other subscription rights or warrants;

    

    (ii) the
      Company shall authorize the distribution to all holders of shares of Common
      Stock of evidences of its indebtedness or assets (other than dividends or
      distributions referred to in Section 6.01(a));

    

    (iii) of
      any
      consolidation or merger to which the Company is a party, or of the transfer
      or
      lease of all or substantially all assets of the Company, or of any
      reclassification or change of Common Stock issuable upon exercise of the
      Warrants (other than a change in par value, or as a result of a subdivision
      or
      combination), or a tender offer or exchange offer for shares of Common
      Stock;

    

    (iv) of
      the
      voluntary or involuntary dissolution, liquidation or winding up of the
      Company;

    

    (v) a
      tender
      offer or exchange offer for Common Stock; filing of a registration statement
      in
      respect of a registered public offering; listing of Common Shares on any United
      States or foreign securities exchange; or

    

    (vi) the
      Company proposes to take any action which would require an adjustment of the
      Exercise Price pursuant to Section 6.01;

    

    then
      the
      Company shall cause to be filed with the Warrant Agent and shall cause to be
      given to each of the Holders, at least 20 days (or 10 days in any case specified
      in clauses (i) or (ii) above) prior to the applicable record date
      hereinafter specified, or promptly in the case of events for which there is
      no
      record date, by first-class mail, postage prepaid, a written notice stating
      (x)
      the date as of which the holders of record of shares of Common Stock to be
      entitled to receive any such rights, options, warrants or distribution are
      to be
      determined, (y) the initial expiration date set forth in any tender offer or
      exchange offer for shares of Common Stock, or (z) the date on which any such
      consolidation, merger, conveyance, transfer, dissolution, liquidation, winding
      up, tender offer or exchange offer or public offering is expected to become
      effective or consummated, and the date as of which it is expected that holders
      of record of shares of Common Stock shall be entitled to exchange such shares
      for securities or other property, if any, deliverable upon such
      reclassification, consolidation, merger, conveyance, transfer, dissolution,
      liquidation, winding up, tender offer or exchange offer or public offering.
      The
      failure to give the notice required by this Section 6.03 or any defect
      therein shall not affect the legality or validity of any distribution, right,
      option, warrant, consolidation, merger, conveyance, transfer, dissolution,
      liquidation, winding up, tender offer or exchange offer or public offering
      or
      the vote upon any action.

     

    Section
      6.04 No
      Rights as Stockholders.
      Nothing
      contained in this Agreement or the Warrants shall be construed as conferring
      upon the holders of Warrants the right to vote or to consent or to receive
      notice as stockholders in respect of the meetings of stockholders or the
      election of directors of the Company or any other matter, or any rights
      whatsoever, including the right to receive dividends, as stockholders of the
      Company.

    

    
      
         

      

      
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          25 -

        
          

        

      

      
         

      

       

    

    ARTICLE
      VII

    WARRANT
      AGENT

     

    Section
      7.01 Warrant
      Agent.
      The
      Warrant Agent undertakes the duties and obligations imposed by this Agreement
      upon the following terms and conditions, by all of which the Company and the
      holders of Warrants, by their acceptance thereof, shall be bound:

    

    (a) The
      statements contained herein and in the Warrants shall be taken as statements
      of
      the Company and the Warrant Agent assumes no responsibility for the correctness
      and accuracy of any of the same except such as describe the Warrant Agent or
      action taken or to be taken by it. The Warrant Agent assumes no responsibility
      with respect to the distribution of the Warrants except as herein otherwise
      provided.

    

    (b) The
      Warrant Agent has no duty to determine when an adjustment under Article 6
      should be made, how it should be made or what it should be or to perform any
      calculations under Article 6. The Warrant Agent has no duty to determine
      whether any provisions of a supplemental agreement under Section 6.01(k)
      are correct and accurate. The Warrant Agent makes no representation as to the
      validity or value of any securities or assets issued upon exercise of Warrants.
      The Warrant Agent is entitled to conclusively rely on the accuracy of any
      certificate or notice delivered pursuant to Section 6.03 as to the amount
      of Warrant Shares due in connection with the exercise of a Warrant following
      any
      adjustments or change pursuant to Article 6 and shall not be deemed to be
      aware of any such adjustment or change until it receives such certificate or
      notice.

    

    (c) The
      Warrant Agent shall not be accountable with respect to the validity or value
      or
      the kind or amount of any Warrant Shares or of any securities or property which
      may at any time be issued or delivered upon the exercise of any Warrant or
      with
      respect to whether any such Warrant Shares or other securities will, when
      issued, be validly issued and fully paid and nonassessable, and makes no
      representation with respect thereto.

    

    (d) The
      Warrant Agent shall not be responsible for any failure of the Company to comply
      with any of the covenants contained in this Agreement or in the
      Warrants.

    

    (e) In
      the
      absence of gross negligence or bad faith on its part, the Warrant Agent may
      rely, and will be protected in acting or refraining from acting, upon any
      resolution, certificate, statement, instrument, opinion, report, notice,
      request, direction, consent, order, bond, debenture, note, other evidence of
      indebtedness or other paper or document believed by it to be genuine and to
      have
      been signed or presented by the proper Person. The Warrant Agent need not
      investigate any fact or matter stated in the document, but, in the case of
      any
      document which is specifically required to be furnished to the Warrant Agent
      pursuant to any provision hereof, the Warrant Agent shall examine the document
      to determine whether it conforms to the requirements of this Agreement (but
      need
      not confirm or investigate the accuracy of mathematical calculations or other
      facts stated therein). The Warrant Agent, in its discretion, may make further
      inquiry or investigation into such facts or matters as it sees fit.

    

    
      
         

      

      
        -
          26 -

        
          

        

      

      
         

      

       

    

    (f) The
      Warrant Agent may act through its attorneys and agents and will not be
      responsible for the misconduct or negligence of any agent appointed with due
      care.

    

    (g) The
      Warrant Agent will be under no obligation to exercise any of the rights or
      powers vested in it by this Agreement at the request or direction of any of
      the
      Holders, unless such Holders have offered to the Warrant Agent reasonable
      security or indemnity against the costs, expenses and liabilities that might
      be
      incurred by it in compliance with such request or direction. All rights of
      action under this Agreement or under any of the Warrants may be enforced by
      the
      Warrant Agent without the possession of any of the Warrants or the production
      thereof at any trial or other proceeding relative thereto, and any such action,
      suit or proceeding instituted by the Warrant Agent shall be brought in its
      name
      as Warrant Agent and any recovery of judgment shall be for the ratable benefit
      of the Holders of the Warrants, as their respective rights or interests may
      appear.

    

    (h) The
      Warrant Agent may consult with counsel, and the written advice of such counsel
      or any Opinion of Counsel will be full and complete authorization and protection
      in respect of any action taken, suffered or omitted by it hereunder in good
      faith and in reliance thereon.

    

    (i) No
      provision of this Agreement will require the Warrant Agent to expend or risk
      its
      own funds or otherwise incur any financial liability in the performance of
      its
      duties hereunder, or in the exercise of its rights or powers, unless it receives
      indemnity satisfactory to it against any loss, liability or
      expense.

    

    (j) The
      Warrant Agent will not be liable for interest on any money received by it except
      as the Warrant Agent may agree in writing with the Company.

    

    (k) The
      Warrant Agent shall act hereunder solely as agent for the Company, and its
      duties shall be determined solely by the provisions hereof. No provision of
      this
      Agreement shall be construed to relieve the Warrant Agent from liability for
      its
      own action, its own failure to act or its own willful misconduct.

     

    Section
      7.02 Compensation;
      Indemnity.

    

    (a) The
      Company will pay the Warrant Agent compensation as agreed upon in writing for
      its services. The Company will reimburse the Warrant Agent promptly upon request
      for all out-of-pocket expenses, disbursements and advances incurred or made
      by
      the Warrant Agent, including the compensation, expenses of and disbursements
      incurred by the Warrant Agent’s agents and counsel and other Persons not
      regularly within its employ.

    

    (b) The
      Company will indemnify the Warrant Agent for, or any predecessor Warrant Agent
      and their agents, employees, officers and directors for, and hold it harmless
      against, any loss or liability or expense incurred by it without gross
      negligence or willful misconduct on its part arising out of or in connection
      with the acceptance or administration of this Agreement and its duties under
      this Agreement and the Warrants, including (i) the costs and expenses of
      defending itself against any claim or liability and of complying with any
      process served upon it or any of its officers in connection with the exercise
      or
      performance of any of its powers or duties under this Agreement and the
      Warrants, except to the extent any such loss, liability or expense may be
      attributable to its action, its own failure to act or its own willful misconduct
      and (ii) the compensation, expenses and disbursements properly incurred of
      the Warrant Agent’s agents and counsel and other Persons not regularly within
      the Warrant Agent’s employ. The Warrant Agent shall notify the Company promptly
      of any claim for which it may seek indemnity. Failure by the Warrant Agent
      to so
      notify the Company shall not relieve the Company of its obligations hereunder.
      At the Warrant Agent’s sole discretion, the Company shall defend the claim and
      the Warrant Agent shall cooperate in the defense at the Company’s expense. The
      Warrant Agent may have separate counsel and the Company shall pay the reasonable
      fees and expenses of such counsel. The Company need not pay for any settlement
      made without its consent, which consent shall not be unreasonably
      withheld. This ‎Section 7.02 shall survive any termination or resignation
      of the Warrant Agent from this Agreement and the termination of this
      Agreement.

     

    
      
         

      

      
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          27 -

        
          

        

      

      
         

      

       

    

    Section
      7.03 Individual
      Rights of Warrant Agent.
      The
      Warrant Agent, and any stockholder, director, officer or employee of it, may
      buy, sell or deal in any of the Warrants or other securities of the Company
      or
      become pecuniarily interested in any transaction in which the Company may be
      interested, or contract with or lend money to the Company or otherwise act
      as
      fully and freely as though it were not Warrant Agent under this Agreement.
      Nothing herein shall preclude the Warrant Agent from acting in any other
      capacity for the Company or for any other legal entity.

    Section
      7.04 Replacement
      of Warrant Agent.

    

    (a) The
      Warrant Agent:

    

    (i) may
      resign at any time by written notice to the Company;

    

    (ii) may
      be
      removed at any time by the Holders of a majority of the outstanding Warrants
      by
      written notice to the Warrant Agent;

    

    (iii) shall,
      if
      no longer eligible under Section 7.06, be subject to removal upon the
      request of any Holder to the Company; or

    

    (iv) may
      be
      removed by the Company if: (1) the Warrant Agent is no longer eligible
      under Section 7.06; (2) the Warrant Agent is adjudged a bankrupt or an
      insolvent; (3) a receiver or other public officer takes charge of the
      Warrant Agent or its property; or (4) the Warrant Agent becomes incapable
      of acting.

    

    A
      resignation or removal of the Warrant Agent and appointment of a successor
      Warrant Agent will become effective only upon the successor Warrant Agent’s
      acceptance of appointment as provided in this Section 7.04 and payment in
      full of all amounts due and owing to the Warrant Agent under this Agreement.
      

    

    (b) If
      the
      Warrant Agent has been removed by the Holders, Holders of a majority of the
      Warrants may appoint a successor Warrant Agent with the consent of the Company,
      which shall not to be unreasonably withheld. Otherwise, if the Warrant Agent
      resigns or is removed, or if a vacancy exists in the office of Warrant Agent
      for
      any reason, the Company will promptly appoint a successor Warrant Agent. If
      the
      successor Warrant Agent does not deliver its written acceptance within 30 days
      after the retiring Warrant Agent resigns or is removed, the retiring Warrant
      Agent, the Company, the Warrant Agent or the Holders of a majority of the
      outstanding Warrants may petition any court of competent jurisdiction for the
      appointment of a successor Warrant Agent.

    

    
      
         

      

      
        -
          28 -

        
          

        

      

      
         

      

       

    

    (c) Upon
      delivery by the successor Warrant Agent of a written acceptance of its
      appointment to the retiring Warrant Agent and to the Company, (i) the
      retiring Warrant Agent will transfer all property held by it as Warrant Agent
      to
      the successor Warrant Agent, (ii) the resignation or removal of the
      retiring Warrant Agent will become effective and (iii) the successor
      Warrant Agent will have all the rights, powers and duties of the Warrant Agent
      under this Agreement. Upon request of any successor Warrant Agent, the Company
      will execute any and all instruments for fully transferring and vesting in
      and
      confirming to the successor Warrant Agent all such rights, powers and trusts.
      The Company will give notice of any resignation and any removal of the Warrant
      Agent and each appointment of a successor Warrant Agent to all Holders, and
      include in the notice the name of the successor Warrant Agent and the address
      of
      its Corporate Trust Office.

    

    (d) Notwithstanding
      replacement of the Warrant Agent pursuant to this Section 7.04, the
      Company’s obligations under Section 7.02 will continue for the benefit of
      the retiring Warrant Agent.

     

    Section
      7.05 Successor
      Warrant Agent by Merger.

    

    (a) If
      the
      Warrant Agent consolidates with, merges or converts into, or transfers all
      or
      substantially all of its corporate trust business to, another corporation or
      national banking association, the resulting, surviving or transferee corporation
      or national banking association without any further act will be the successor
      Warrant Agent with the same effect as if the successor Warrant Agent had been
      named as the Warrant Agent in this Agreement.

    

    (b) If,
      at
      the time such successor to the Warrant Agent shall succeed to the agency created
      by this Agreement, any of the Warrants have been countersigned but not
      delivered, the successor Warrant Agent may adopt the countersignature of the
      original Warrant Agent; and if any of the Warrants shall not have been
      countersigned, the successor Warrant Agent may countersign such Warrants, and
      in
      all such cases such Warrants shall have the full force and effect provided
      in
      the Warrants and in this Agreement.

     

    Section
      7.06 Eligibility.
      This
      Agreement must always have a Warrant Agent that has a combined capital and
      surplus of at least US$50,000,000 as set forth in its most recent published
      annual report of condition and satisfies the eligibility requirements set forth
      in Section 310(a) of the United States Trust Indenture Act of 1939, as
      amended.

     

    Section
      7.07 Holder
      Lists.
      The
      Warrant Agent shall preserve in as current a form as is reasonably practicable
      the most recent list available to it of the names and addresses of all Holders.
      If the Warrant Agent is not the Registrar, the Company shall promptly furnish
      to
      the Warrant Agent at such times as the Warrant Agent may request in writing,
      a
      list in such form and as of such date as the Warrant Agent may reasonably
      require of the names and addresses of the Holders.

    

    
      
         

      

      
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    ARTICLE
      VIII

    MISCELLANEOUS

     

    Section
      8.01 Warrantholder
      Actions.

    

    (a) Any
      request, demand, authorization, direction, notice, consent to amendment,
      supplement or waiver or other action provided by this Agreement to be given
      or
      taken by a Holder (an “act”)
      may be
      evidenced by an instrument signed by the Holder delivered to the Warrant Agent.
      The fact and date of the execution of the instrument, or the authority of the
      person executing it, may be proved in any manner that the Warrant Agent deems
      sufficient.

    

    (b) The
      Warrant Agent may make reasonable rules for action by or at a meeting of
      Holders, which will be binding on all the Holders.

    

    (c) Any
      act
      by the Holder of any Warrant binds that Holder and every subsequent Holder,
      even
      if no notation thereof appears on the Warrant. Subject to subparagraph (d)
      below, a Holder may revoke an act as to its Warrants, but only if the Warrant
      Agent receives the notice of revocation before the date the amendment or waiver
      or other consequence of the act becomes effective.

    

    (d) The
      Company may, but is not obligated to, fix a record date for the purpose of
      determining the Holders entitled to act with respect to any amendment or waiver
      or in any other regard. If a record date is fixed, those Persons that were
      Holders at such record date and only those Persons will be entitled to act,
      or
      to revoke any previous act, whether or not those Persons continue to be Holders
      after the record date. No act will be valid or effective for more than 90 days
      after the record date.

    Section
      8.02 Notices.

    

    (a) All
      communications and notices hereunder shall be in writing. Any notice or
      communication to the Company will be deemed given if in writing (1) when
      delivered in person or (2) five days after mailing when mailed by first
      class mail, postage paid or (3) when sent by facsimile transmission, with
      transmission confirmed. Any notice to the Warrant Agent or the Initial Holder
      will be effective only upon receipt. In each case the notice or communication
      should be addressed as follows:

     

    
      	
              if
                to the Company: 

            	
              SYNUTRA
                INTERNATIONAL, INC.

              2275
                Research Blvd., Suite 500

              Rockville,
                Maryland 20850

              United
                States

              Atttn:
                Weiguo Zhang

              Facsimile:
                +1-301-987-2346

            
	 	 
	
              if
                to the Warrant Agent:

            	
              The
                Bank of New York

              101
                Barclay Street, 21st Floor

              New
                York, NY 10286

              United
                States of America

            

    

     

    
      
         

      

      
        -
          30 -

        
          

        

      

      
         

      

       

    

    
      	 	 
	 	
              cc:  
                The
                Bank of New York

              Global
                Corporate Trust

              One
                Temasek Avenue

              #02-01
                Millennia Tower 

              Singapore
                039192

              Attn:
                Valerie Wong / Chong Wan Lin

              Facsimile:
                +65-6883-0338

            
	 	 
	
              if
                to the Initial Holder:

            	
              ABN
                AMRO BANK N.V., Hong Kong Branch

              38/F,
                Cheung Kong Centre

              2
                Queen’s Road Central

              Hong
                Kong

              Attn:
                Bert Grisel / Helena Tse

              Facsimile:
                +85-2-2700-5935

            

    

     

    The
      Company, the Initial Holder or the Warrant Agent by notice to the other parties
      hereto may designate additional or different addresses for subsequent notices
      or
      communications. 

    

    (b) Except
      as
      otherwise expressly provided with respect to published notices, any notice
      or
      communication to a Holder other than the Initial Holder will be deemed given
      when mailed to the Holder at its address as it appears on the Register by first
      class mail, postage paid. Copies of any notice or communication to a Holder,
      if
      given by the Company, will be mailed to the Warrant Agent at the same time.
      Defect in mailing a notice or communication to any particular Holder will not
      affect its sufficiency with respect to other Holders. 

    

    (c) Where
      this Agreement provides for notice, the notice may be waived in writing by
      the
      Person entitled to receive such notice, either before or after the event, and
      the waiver will be the equivalent of the notice. Waivers of notice by Holders
      must be filed with the Warrant Agent, but such filing is not a condition
      precedent to the validity of any action taken in reliance upon such
      waivers.

     

    Section
      8.03 Supplements
      and Amendments.

    

    (a) The
      Company, the Initial Holder and the Warrant Agent may amend or supplement this
      Agreement or the Warrants without notice to (or the consent of) any Holder
      (other than the Initial Holder):

    

    (i) to
      cure
      any ambiguity, defect or inconsistency in this Agreement or the
      Warrants;

    

    (ii) to
      comply
      with Section 6.01(k);

    

    (iii) to
      evidence and provide for the acceptance of an appointment hereunder by a
      successor Warrant Agent; 

    

    (iv) to
      make
      any other change that does not materially and adversely affect the rights of
      any
      Holder; or

    

    
      
         

      

      
        -
          31 -

        
          

        

      

      
         

      

       

    

    (v) to
      give
      effect to one or more provisions of this Agreement.

    

    (b) Except
      as
      otherwise provided in subparagraphs (a) or (c), the Company, the Initial
      Holder and the Warrant Agent may amend this Agreement and the Warrants with
      the
      written consent of the Holders of a majority of the outstanding Warrants, and
      the Holders of a majority of the outstanding Warrants by written notice to
      the
      Warrant Agent may waive future compliance by the Company with any provision
      of
      this Agreement or the Warrants.

    

    (c) Notwithstanding
      the provisions of subparagraph (b), without the consent of each Holder
      affected, an amendment or waiver may not

    

    (i) increase
      the Exercise Price; or

    

    (ii) decrease
      the number of shares of Common Stock or other securities or property issuable
      upon exercise of the Warrants

    

    except,
      in each case, for adjustments provided for in this Agreement.

    

    (d) It
      is not
      necessary for Holders to approve the particular form of any proposed amendment,
      supplement or waiver, but is sufficient if their consent approves the substance
      thereof.

    

    (e) An
      amendment, supplement or waiver under this Section 8.03 will become
      effective on receipt by the Warrant Agent of written consents from the Holders
      of the requisite percentage of the outstanding Warrants. After an amendment,
      supplement or waiver under this Section 8.03 becomes effective, the Company
      will send to the Holders affected thereby a notice briefly describing the
      amendment, supplement or waiver. Any failure of the Company to send such notice,
      or any defect therein, will not, however, in any way impair or affect the
      validity of any such amendment, supplement or waiver.

    

    (f) After
      an
      amendment, supplement or waiver becomes effective, it will bind every Holder
      unless it is of the type requiring the consent of each Holder affected. If
      the
      amendment, supplement or waiver is of the type requiring the consent of each
      Holder affected, the amendment, supplement or waiver will bind each Holder
      that
      has consented to it and every subsequent Holder of a Warrant with respect to
      which consent was granted.

    

    (g) If
      an
      amendment, supplement or waiver changes the terms of a Warrant, the Warrant
      Agent may require the Holder to deliver it to the Warrant Agent so that the
      Warrant Agent may place an appropriate notation of the changed terms on the
      Warrant and return it to the Holder, or exchange it for a new Warrant that
      reflects the changed terms. The Warrant Agent may also place an appropriate
      notation on any Warrant thereafter countersigned. However, the effectiveness
      of
      the amendment, supplement or waiver is not affected by any failure to annotate
      or exchange Warrants in this fashion.

    

    (h) The
      Warrant Agent is entitled to receive, and will be fully protected in relying
      upon, an Opinion of Counsel stating that the execution of any amendment,
      supplement or waiver authorized pursuant to this section is authorized or
      permitted by this Agreement and constitutes the legal, valid and binding
      obligation of the Company. If the Warrant Agent has received such an Opinion
      of
      Counsel, it shall sign the amendment, supplement or waiver so long as the same
      does not adversely affect the rights of the Warrant Agent. The Warrant Agent
      may, but is not obligated to, execute any amendment, supplement or waiver that
      affects the Warrant Agent’s own rights, duties or immunities under this
      Agreement.

     

    
      
         

      

      
        -
          32 -

        
          

        

      

      
         

      

       

    

    Section
      8.04 Governing
      Law. 

    

    (a) THIS
      AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF
      THE
      STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY
      WITHIN SUCH STATE.

    

    (b) ANY
      LEGAL
      ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT MAY BE BROUGHT IN THE COURTS
      OF THE STATE OF NEW YORK SITTING IN THE BOROUGH OF MANHATTAN, NEW YORK CITY
      OR
      OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF SUCH STATE, AND BY EXECUTION
      AND DELIVERY OF THIS AGREEMENT, EACH PARTY TO THIS AGREEMENT CONSENTS, FOR
      ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE NON EXCLUSIVE JURISDICTION OF
      THOSE COURTS. EACH PARTY TO THIS AGREEMENT IRREVOCABLY WAIVES ANY OBJECTION,
      INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM
      NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION
      OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF THIS AGREEMENT OR OTHER
      DOCUMENT RELATED THERETO. EACH PARTY TO THIS AGREEMENT WAIVES PERSONAL SERVICE
      OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE BY ANY OTHER
      MEANS
      PERMITTED BY THE LAW OF SUCH STATE. EACH PARTY HERETO AGREES THAT A FINAL
      JUDGMENT IN ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A COURT SHALL
      BE
      CONCLUSIVE AND BINDING UPON IT AND WILL BE GIVEN EFFECT IN ANY OTHER
      JURISDICTION TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW AND MAY BE
      ENFORCED IN ANY COURT TO THE JURISDICTION OF WHICH SUCH PARTY HERETO IS OR
      MAY
      BE SUBJECT BY A SUIT UPON SUCH JUDGMENT; PROVIDED THAT SERVICE OF PROCESS IS
      EFFECTED UPON IT IN ONE OF THE MANNERS SPECIFIED HEREIN OR AS OTHERWISE
      PERMITTED BY LAW.

     

    Section
      8.05 Waiver
      of Right to Trial by Jury.
      EACH
      PARTY TO THIS AGREEMENT HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY
      OF
      ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING UNDER ANY LOAN DOCUMENT
      OR
      IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE
      PARTIES HERETO OR ANY OF THEM WITH RESPECT TO THIS AGREEMENT, OR THE
      TRANSACTIONS RELATED THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER
      ARISING, AND WHETHER FOUNDED IN CONTRACT OR TORT OR OTHERWISE; AND EACH PARTY
      HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF
      ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO
      THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH
      ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE SIGNATORIES HERETO TO THE
      WAIVER OF THEIR RIGHT TO TRIAL BY JURY.

     

    
      
         

      

      
        -
          33 -

        
          

        

      

      
         

      

       

    

    Section
      8.06 New
      York Process Agent.
      Without
      prejudice to any other mode of service allowed under any relevant law of the
      Company:

    

    (a) irrevocably
      appoints CT Corporation System, located at 111 Eighth Avenue, New York, NY
      10011
      as its agent for service of process in relation to any proceedings before the
      courts of the State of New York sitting in the Borough of Manhattan, New York
      City or of the United States for the Southern District of such State in
      connection with this Agreement; and

    

    (b) agrees
      that failure by a process agent to notify the Company of the process will not
      invalidate the proceedings concerned.

     

    Section
      8.07 No
      Adverse Interpretation of Other Agreements.
      This
      Agreement may not be used to interpret another agreement of the Company and
      no
      such agreement may be used to interpret this Agreement.

     

    Section
      8.08 Successors.
      All
      agreements of the Company in this Agreement and the Warrants will bind its
      successors. All agreements of the Warrant Agent in this Agreement will bind
      its
      successors.

     

    Section
      8.09 Duplicate
      Originals.
      The
      parties may sign any number of copies of this Agreement. Each signed copy shall
      be an original, but all of them together represent the same
      agreement.

     

    Section
      8.10 Separability.
      In case
      any provision in this Agreement or in the Warrants is invalid, illegal or
      unenforceable, the validity, legality and enforceability of the remaining
      provisions will not in any way be affected or impaired thereby.

     

    Section
      8.11 Table
      of Contents and Headings.
      The
      Table of Contents and headings of the Articles and Sections of this Agreement
      have been inserted for convenience of reference only, are not to be considered
      a
      part of this Agreement and in no way modify or restrict any of the terms and
      provisions of the Indenture.

     

    Section
      8.12 Benefits
      of This Agreement.
      Nothing
      in this Agreement shall be construed to give to any person or corporation other
      than the Company, the Warrant Agent and the other registered holders of Warrants
      any legal or equitable right, remedy or claim under this Agreement; but this
      Agreement shall be for the sole and exclusive benefit of the Company, the
      Warrant Agent, the Initial Holder and the other registered Holders from time
      to
      time of Warrants.

     

    Section
      8.13 Limitation
      of Liability.
      No
      provision hereof, in the absence of affirmative action on the part of a Holder
      to purchase Warrant Shares shall give rise to any liability of such Holder
      to
      pay the exercise price for the Warrant Shares other than pursuant to an exercise
      under this Warrant Agreement, or any liability as a stockholder of the Company,
      whether such liability is asserted by the Company or any creditors of the
      Company.

    

    
      
         

      

      
        -
          34 -

        
          

        

      

      
         

      

    

    

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

     

    
      	 	
              SYNUTRA
                INTERNATIONAL, INC.

               

               

              By:
                ___________________________________

              Name:

              Title:

            
	 	 
	 	 
	 	
              THE
                BANK OF NEW YORK, as Warrant Agent

               

               

              By:
                ___________________________________

              Name:

              Title:

            
	 	 
	 	 
	 	
              ABN
                AMRO BANK N.V., HONG KONG BRANCH, as Initial Holder

               

               

              By:
                ___________________________________

              Name:

              Title:

            

    

    

      —
        Signature Page to Warrant Agreement —

    

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    EXHIBIT
      A

     

    FORM
      OF WARRANT

    

    [Face
      of Warrant Certificate]

    

    [Insert
      appropriate legend]

    

    SYNUTRA
      INTERNATIONAL, INC.

     

    
      	
              No.
                ____________

            	
              ____Warrants

            

    

    

    WARRANT
      CERTIFICATE

    

    This
      Warrant Certificate certifies that ABN AMRO Bank N.V., Hong Kong Branch (the
      “Initial
      Holder”),
      or
      its registered assigns, is the registered holder of Warrants (the “Warrants”)
      to
      purchase Common Stock, par value US$.0001 (the “Common
      Stock”),
      of
      Synutra International, Inc., a Delaware corporation (the “Company”).
      Each
      Warrant entitles the registered holder upon exercise at any time from 9:00
      a.m.
      on the date hereof set forth below until 5:00 p.m. Singapore time on the third
      anniversary of the completion of the Qualified Public Offering (as defined
      in
      the Warrant Agreement) (the “Expiration
      Date”),
      to
      receive from the Company [______] fully paid and nonassessable share of Common
      Stock (the “Warrant
      Shares”)
      at an
      initial exercise price of (a) at any time prior to a Qualified Public
      Offering, the US Dollar amount equal to 75% of the volume weighted average
      of
      the closing prices per share of the Common Stock on the OTC Bulletin Board
      or
      the NASDAQ Global Market, as applicable, for the 30 trading days immediately
      preceding and including the Closing Date (as defined in the Warrant Agreement)
      and (b) on the date of the Qualified Public Offering and at any time
      thereafter, the lower of (i) the exercise price calculated in accordance
      with clause (a), as adjusted and in effect on the day immediately prior to
      the date of the Qualified Public Offering and (ii) the US dollar amount
      equal to 75% of the Qualified Public Offering Price (the “Exercise
      Price”)
      per
      share payable upon surrender of this Warrant Certificate at the office or agency
      of the Company, subject to the conditions set forth herein and in the Warrant
      Agreement referred to on the reverse hereof; provided that the Exercise Price
      shall be adjusted from time to time in accordance with the provisions of the
      Warrant Agreement. The Exercise Price and number of Warrant Shares issuable
      upon
      exercise of the Warrants are subject to adjustment upon the occurrence of
      certain events set forth in the Warrant Agreement.

    

    Reference
      is hereby made to the further provisions of this Warrant Certificate set forth
      on the reverse hereof and such further provisions shall for all purposes have
      the same effect as though fully set forth at this place.

    

    
      
         

      

      
        A-1

        
          

        

      

      
         

      

       

    

    IN
      WITNESS WHEREOF, the Company has caused this Warrant Certificate to be signed
      below manually or by facsimile by its duly authorized officer.

     

    
      	 	
              SYNUTRA
                INTERNATIONAL, INC.

               

               

              By:
                ___________________________________

              Name:

              Title:

            

    

    

    Countersigned
      pursuant to Section 3.03 of the Warrant Agreement:

     

    
      	
              Dated:
                [______]

               

              THE
                BANK OF NEW YORK

              as
                Warrant Agent

               

               

              By:
                ___________________________________

              Authorized
                Signatory

            	 

    

    

    
      
         

      

      
        A-2

        
          

        

      

      
         

      

    

    [Reverse
      of Warrant Certificate]

    

    SYNUTRA
      INTERNATIONAL, INC.

    

    
      	 	
              1.

            	
              Warrant
                Agreement.

            

    

    

    The
      Warrants evidenced by this Warrant Certificate are part of a duly authorized
      issue of Warrants issued or to be issued pursuant to a Warrant Agreement dated
      as of April 19, 2007 (the “Warrant
      Agreement”),
      between the Company, the Initial Holder and The Bank of New York, as warrant
      agent (the “Warrant
      Agent”),
      which
      Warrant Agreement is hereby incorporated by reference in and made a part of
      this
      instrument and is hereby referred to for a description of the rights, limitation
      of rights, obligations, duties and immunities thereunder of the Warrant Agent,
      the Company, Initial Holder and the holders (the words “holders”
or
      “holder”
meaning
      the registered holders or registered holder) of the Warrants. To the extent
      permitted by law, in the event of an inconsistency or conflict between the
      terms
      of this Warrant and the Warrant Agreement, the terms of the Warrant Agreement
      will prevail.

    

    
      	 	
              2.

            	
              Exercise.

            

    

    

    Warrants
      may be exercised at any time on or after the date hereof and on or before 5:00
      p.m. Singapore time on the Expiration Date; provided that holders shall be
      able
      to exercise their Warrants only if the exercise of such Warrants is then exempt
      from, or being effected in compliance with, the registration requirements of
      the
      United States Securities Act of 1933, as amended (the “Securities
      Act”),
      and
      such securities are qualified for sale or exempt from qualification under the
      applicable securities laws of the states in which the various holders of the
      Warrants or other persons to whom it is proposed that the Warrant Shares be
      issued on exercise of the Warrants reside. In order to exercise all or any
      of
      the Warrants represented by this Warrant Certificate, the holder must deliver
      to
      the Warrant Agent at its Corporate Trust Office set forth in the Warrant
      Agreement this Warrant Certificate and the form of election to purchase on
      the
      reverse hereof duly completed and payment to the Company of the Exercise Price
      in the manner set forth in the Warrant Agreement for the number of Warrant
      Shares in respect of which such Warrants are then exercised.

    

    
      	 	
              3.

            	
              Adjustments.

            

    

    

    The
      Warrant Agreement provides that, upon the occurrence of certain events, the
      Exercise Price set forth on the face hereof may, subject to certain conditions,
      be adjusted. The Warrant Agreement also provides that the number of shares
      of
      Common Stock issuable upon the exercise of each Warrant shall be adjusted in
      certain events.

    

    
      	 	
              4.

            	
              No
                Fractional Shares.

            

    

    

    No
      fractions of a share of Common Stock will be issued upon the exercise of any
      Warrant, but the Company will pay the cash value thereof determined as provided
      in the Warrant Agreement. 

    

    
      
         

      

      
        A-3

        
          

        

      

      
         

      

       

    

    
      	 	
              5.

            	
              Registered
                Form; Transfer and Exchange.

            

    

    

    The
      Warrants are in registered form. Warrant Certificates, when surrendered at
      the
      office of the Warrant Agent by the registered holder thereof in person or by
      legal representative or attorney duly authorized in writing, may be exchanged,
      in the manner and subject to the limitations provided in the Warrant Agreement,
      but without payment of any service charge (except as specified in the Warrant
      Agreement), for another Warrant Certificate or Warrant Certificates of like
      tenor evidencing in the aggregate a like number of Warrants. 

    

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

    

    The
      Company and the Warrant Agent may deem and treat the registered holder(s)
      thereof as the absolute owner(s) of this Warrant Certificate (notwithstanding
      any notation of ownership or other writing hereon made by anyone), for the
      purpose of any exercise hereof, of any distribution to the holder(s) hereof,
      and
      for all other purposes, and neither the Company nor the Warrant Agent shall
      be
      affected by any notice to the contrary. Neither the Warrants nor this Warrant
      Certificate entitles any holder hereof to any rights of a stockholder of the
      Company.

    

    
      	 	
              6.

            	
              Countersignature.

            

    

    

    This
      Warrant Certificate shall not be valid unless countersigned by the Warrant
      Agent.

    

    
      	 	
              7.

            	
              Governing
                Law.

            

    

    

    This
      Warrant shall be governed by, and construed in accordance with, the law of
      the
      State of New York applicable to agreements made and to be performed entirely
      within such state.

    

    
      	 	
              8.

            	
              Abbreviations.

            

    

    

    Customary
      abbreviations may be used in the name of a Holder or an assignee, such as:
      TEN
      COM (= tenants in common), TEN ENT (= tenants by the entireties), JT TEN (=
      joint tenants with right of survivorship and not as tenants in common), CUST
      (=
      Custodian) and U/G/M/A/ (= Uniform Gifts to Minors Act).

    

    A
      copy of
      the Warrant Agreement may be obtained by the holder hereof upon written request
      to the Company.

    

    
      
         

      

      
        A-4

        
          

        

      

      
         

      

    

    FORM
      OF ELECTION TO PURCHASE

    

    (To
      Be
      Executed Upon Exercise Of Warrant)

    

    The
      undersigned hereby irrevocably elects to exercise [____] of the Warrants
      represented by this Warrant Certificate and purchase the whole number of Warrant
      Shares issuable upon exercise of such Warrants and herewith tenders payment
      for
      such Warrant Shares as follows:

    

    US$
      [____] in cash or by certified bank check; 

    

    OR

    The
      undersigned hereby irrevocably elects to convert [______] of the Warrants
      represented by this Warrant Certificate into ___________ shares of Common Stock
      (by giving effect to the cashless exercise provisions set forth in
      Section 4.01(d)) and herewith agrees to make payment therefor through a
      cashless exercise, all on the terms and the conditions specified in the Warrant
      Certificate and the Warrant Agreement.

    

    The
      undersigned requests that a certificate for such shares be registered in the
      name of _______________, whose address is __________________ and that such
      shares be delivered to ___________, whose address is
      ____________________________. If said number of shares is less than all of
      the
      shares of Common Stock purchasable hereunder, the undersigned requests that
      a
      new Warrant Certificate representing the remaining balance of such shares be
      registered in the name of ______________________, whose address is
      ____________________, and that such Warrant Certificate be delivered to
      ___________ whose address is ____________________. Any cash payments to be
      paid
      in lieu of a fractional share should be made to ________________________ whose
      address is ________________________ and the check representing payment thereof
      should be delivered to ________________________ whose address
      is________________________.

     

    
      	 	
              [NAME
                OF HOLDER]

               

               

              By:
                ___________________________________

              Name:

              Title:

               

              Date:
                __________________________________

            

    

    

    
      
         

      

      
        A-5

        
          

        

      

      
         

      

    

    [FORM
      OF WARRANT TRANSFER NOTICE]

    

    FOR
      VALUE
      RECEIVED the undersigned registered holder hereby sell(s), assign(s)
      and

    

    transfer(s)
      unto _____________________________ (the “Assignee”)
      

    (Please
      type or print block letters)

     

     

      
        

      

    

    (Please
      print or typewrite name and address including zip code of assignee)

    
 

    
      
        

      

    

    the
      within Warrant and all rights thereunder, hereby irrevocably constituting and
      appointing

    

    

    
      
        

      

    

    attorney
      to transfer said Warrant on the books of the Company with full power of
      substitution in the premises.

    

    [THE
      FOLLOWING PROVISION TO BE INCLUDED ON ALL WARRANT CERTIFICATES BEARING A
      RESTRICTED LEGEND]

    

    In
      connection with any transfer of this Warrant occurring prior to the second
      anniversary of the date set forth on the face of this Warrant, the undersigned
      confirms that (x) such transfer is being made without utilizing any general
      solicitation or general advertising and by means of a transaction exempt from
      the registration and prospectus delivery requirements of the United States
      Securities Act of 1933, as amended and (y) the transferee has agreed to comply
      with the provisions set forth in the Restricted Legend in respect of any further
      transfers.

     

    
      	 	
              [NAME
                OF TRANSFEROR]

               

               

              By:
                ___________________________________

              Name:

              Title:

               

              Date:
                __________________________________

            

    

    

    NOTICE:
      The signature to this assignment must correspond with the name as written upon
      the face of the within mentioned instrument in every particular, without
      alteration or any change whatsoever.

    

    
      
         

      

      
        A-6

        
          

        

      

      
         

      

    

    EXHIBIT
      B

     

    RESTRICTED
      LEGEND

    

    THE
      SECURITIES REPRESENTED HEREBY AND THE UNDERLYING COMMON STOCK ISSUABLE UPON
      THEIR EXERCISE (COLLECTIVELY, THE “SECURITIES”)
      HAVE
      NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“ACT”),
      OR
      UNDER THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE TRANSFERRED, SOLD, PLEDGED
      OR OTHERWISE TRANSFERRED OR CONVEYED EXCEPT AS PERMITTED UNDER THE ACT AND
      APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION
      THEREFROM. THE ISSUER (THE “COMPANY”)
      OF
      THESE SECURITIES MAY REQUIRE AN OPINION OF COUNSEL IN FORM AND SUBSTANCE
      SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY PROPOSED TRANSFER OR RESALE
      IS
      IN COMPLIANCE WITH THE ACT AND ANY APPLICABLE STATE SECURITIES
      LAWS.

    

    THE
      SECURITIES ARE SUBJECT TO COVENANTS IN THAT CERTAIN WARRANT AGREEMENT (THE
      “WARRANT
      AGREEMENT”)
      DATED
      AS OF APRIL 19, 2007 BY AND BETWEEN THE COMPANY, THE WARRANT AGENT AND THE
      CERTAIN INITIAL REGISTERED HOLDER NAMED THEREIN CONTAINING, AMONG OTHER THINGS,
      RESTRICTIONS ON THE SALE, TRANSFER OR OTHER DISPOSITION OF SUCH SECURITIES,
      AND
      TO THE TERMS OF THE ARTICLES OF INCORPORATION OF THE COMPANY, AS THE SAME MAY
      BE
      AMENDED OR MODIFIED, INCLUDING ANY AMENDMENT AND RESTATEMENT, FROM TIME TO
      TIME.
      THE COMPANY RESERVES THE RIGHT TO REFUSE THE TRANSFER OF THE SHARES REPRESENTED
      BY THIS CERTIFICATE UNLESS AND UNTIL ALL CONDITIONS TO TRANSFER SET FORTH IN
      THE
      WARRANT AGREEMENT OF INCORPORATION HAVE BEEN FULFILLED. A COPY OF THE WARRANT
      AGREEMENT AND THE ARTICLES OF INCORPORATION MAY BE OBTAINED FROM THE SECRETARY
      OF THE COMPANY WITHOUT CHARGE UPON WRITTEN REQUEST. 

    

    
      
         

      

      
        B-1

        
          

        

      

      
         

      

    

    EXHIBIT
      C

     

    FORM
      OF U.S. COUNSEL OPINION

    

    April 19,
      2007

    

    To
      the
      Warrant Holder and 

    the
      Initial Holder party to the 

    Warrant
      Agreement 

    referred
      to below

    

    
      	 	
              Re:

            	
              Synutra
                International Inc. - Warrants

            

    

    

    Ladies
      and Gentlemen:

    

    We
      have
      acted as special New York counsel for Synutra International Inc., a Delaware
      corporation (the “Company”)
      in
      connection with (1) the Warrant Agreement dated as of April 19, 2007
      among the Company, The Bank of New York, as warrant agent (the “Warrant
      Agent”)
      and
      ABN AMRO Bank N.V., Hong Kong Branch, as the initial holder (“ABN
      AMRO”)
      (the
“Warrant
      Agreement”),
      (2) the Registration Rights Agreement dated April 19, 2007, between
      the Company and ABN AMRO in respect of the Warrants among the parties thereto
      (the “Registration
      Rights Agreement”)
      and
      (3) the USD Facility Side Letter Agreement dated April 19, 2007
      between the Company and ABN AMRO (the “USD
      Facility Side Letter Agreement”).
      Under
      the terms of the Warrant Agreement, the Company will issue warrants on the
      date
      hereof (the “Warrants”)
      representing the right, upon exercise, to require the Company to issue shares
      of
      its common stock, par value $0.0001 per share (the “Common
      Stock”).
      We
      are providing this opinion to you at the request of the Company pursuant to
      Section 5.08 of the Warrant Agreement. 

    

    In
      our
      capacity as such counsel, we have examined originals or copies of those
      corporate and other records and documents we considered appropriate, including
      the following (the documents listed in clauses (c) through (e) below
      collectively being referred to herein as the “Related
      Documents”):

    

    
      	 	
              (a)

            	
              the
                Warrants;

            

    

    

    
      	 	
              (b)

            	
              copies
                of the Company’s certificate of incorporation (“Certificate
                of Incorporation”),
                bylaws (“Bylaws”)
                and resolutions authorizing the transactions contemplated by the
                Related
                Documents (the “Resolutions”),
                each as certified by an officer of the Company as in full force and
                effect;

            

    

    

    
      	 	
              (c)

            	
              the
                Warrant Agreement; 

            

    

    

    
      	 	
              (d)

            	
              the
                Registration Rights Agreement; and

            

    

    

    
      	 	
              (e)

            	
              the
                USD Facility Side Letter Agreement.

            

    

    

    As
      to
      relevant factual matters, we have relied upon, among other things, the Company’s
      factual representations in its certificate (the “Opinion
      Certificate”)
      and in
      the Warrants and the Related Documents. In addition, we have obtained and relied
      upon those certificates of public officials we considered appropriate.

    

    
      
         

      

      
        C-1

        
          

        

      

      
         

      

       

    

    We
      have
      assumed the genuineness of all signatures, the authenticity of all documents
      submitted to us as originals and the conformity with originals of all documents
      submitted to us as copies. We have assumed that each natural person who is
      a
      party to the transaction has sufficient legal capacity to enter into and carry
      out his or her obligations under the Agreement. To the extent the Company’s
      obligations depend on the enforceability of the Related Documents against other
      parties to the Related Documents, we have assumed that the Related Documents
      are
      enforceable against such other parties.

    

    On
      the
      basis of such examination, our reliance upon the assumptions in this opinion
      and
      our consideration of those questions of law we considered relevant, and subject
      to the limitations and qualifications in this opinion, we are of the opinion
      that:

    

    1. The
      Company is a corporation validly existing in good standing under the laws of
      the
      State of Delaware with corporate power to issue the Warrants, to enter into
      the
      Related Documents and to perform its obligation under the Warrants and the
      Related Documents. 

    

    2. The
      execution, delivery and performance of the Warrants and the Related Documents
      have been duly authorized by all necessary corporate action on the part of
      the
      Company, and the Warrants and Related Documents have been duly executed and
      delivered by the Company.

    

    3. Assuming
      the due authorization, execution and delivery by each of the other parties
      to
      the Related Documents, and assuming each of such Related Documents constitute
      the legally valid and binding obligation of each the other parties and upon
      the
      counter signature by the Warrant Agent of the Warrants, each of the Warrants
      and
      the Related Documents constitutes the legally valid and binding obligation
      of
      the Company, enforceable against the Company in accordance with its terms,
      except as may be limited by bankruptcy, insolvency, reorganization, moratorium
      or similar laws relating to or affecting creditors’ rights generally (including,
      without limitation, fraudulent conveyance laws), and by general principles
      of
      equity, including, without limitation, concepts of materiality, reasonableness,
      good faith and fair dealing and the possible unavailability of specific
      performance or injunctive relief, regardless of whether considered in a
      proceeding in equity or at law.

    

    4. The
      execution and delivery by the Company of the Warrants and the Related Documents
      do not, and the Company’s performance of its obligations under the Warrants and
      Related Documents will not (i) violate the Company’s certificate of
      incorporation or bylaws or other constitutive documents of the Company,
      (ii) violate, breach, or result in a default under, any existing obligation
      of or restriction on the Company under any other agreement (the “Other
      Agreements”)
      identified in Schedule I attached hereto, or (iii) breach or otherwise
      violate any existing obligation of or restriction on the Company under any
      order, judgment or decree of any New York or federal court or governmental
      authority binding on the Company identified in the Opinion Certificate. If
      an
      Other Agreement is governed by the laws of a jurisdiction other than New York,
      we have assumed such Other Agreement is governed by the laws of the State of
      New
      York.

    

    
      
         

      

      
        C-2

        
          

        

      

      
         

      

       

    

    5. The
      execution and delivery by the Company of the Warrants and the Related Documents
      do not, and the Company’s performance of its obligations under the Related
      Documents will not, violate the Delaware General Corporation Law or any current
      New York or federal statute, rule or regulation that we have, in the exercise
      of
      customary professional diligence, recognized as applicable to the Company or
      to
      transactions of the type contemplated by the Warrants and the Related
      Documents.

    

    6. The
      Common Stock issuable upon exercise of the Warrants in accordance with the
      terms
      thereof and the Warrant Agreement (the “Warrant
      Shares”)
      have
      been duly authorized and reserved for issuance by all necessary corporate action
      on the part of the Company and, upon exercise of the Warrants and surrender
      of
      the Warrants and payment of the exercise price set forth therein, and delivery
      of the Warrant Shares in accordance with the Warrant Agreement, the Warrant
      Shares will be validly issued, fully paid and non-assessable and shall not
      be
      subject to any preemptive rights under the Company’s Certificate of
      Incorporation, Bylaws or the Delaware General Corporation Law.

    

    7. No
      order,
      consent, permit, registration, qualification or approval of any New York or
      federal governmental authority that we have, in the exercise of customary
      professional diligence, recognized as applicable to the Company or to
      transactions of the type contemplated by the Warrants and the Related Documents
      is required on the part of the Company for the execution and delivery of, the
      Related Documents or for the issuance and sale of the Warrants and the Warrant
      Shares, except such as may be required under the Related Documents and
      applicable securities laws.

    

    8. It
      is not
      necessary in connection with the issuance and delivery of the Warrants to ABN
      AMRO or the issuance and delivery of the Warrant Shares upon exercise of the
      Warrants to the Warrantholders to register the Warrants or the Warrant Shares
      under the Securities Act, it being understood that no opinion is expressed
      as to
      any subsequent resale of any Warrant or Warrant Share. 

    

    Our
      opinion in paragraph 3 above as to the enforceability of the Related
      Documents is subject to: 

    

    
      	 	
              (i)

            	
              public
                policy considerations, statutes or court decisions that may limit
                the
                rights of a party to obtain indemnification against its own negligence,
                willful misconduct or unlawful
                conduct;

            

    

    

    
      	 	
              (ii)

            	
              the
                unenforceability under certain circumstances of broadly or vaguely
                stated
                waivers or waivers of rights granted by law where the waivers are
                against
                public policy or prohibited by law;

            

    

    

    
      	 	
              (iii)

            	
              the
                unenforceability under certain circumstances of provisions imposing
                penalties, liquidated damages or other economic remedies;
                and

            

    

    

    
      	 	
              (iv)

            	
              the
                unenforceability under certain circumstances of provisions appointing
                one
                party as trustee for an adverse party or provisions for the appointment
                of
                a receiver.

            

    

    

    
      
         

      

      
        C-3

        
          

        

      

      
         

      

       

    

    We
      express no opinion as to the effect of subsequent issuances of securities of
      the
      Company to the extent that such issuances may result in the Company not having
      enough remaining authorized but unissued shares of Warrant Shares for the
      exercise of the Warrants. We also advise you that, as a result of the operation
      of the antidilution or adjustment provisions of the Warrants, the Warrants
      may
      become exercisable into more shares of Warrant Shares than remain authorized
      but
      unissued.

    

    Our
      opinion in paragraph 3 is subject to the qualification that certain rights,
      remedies, waivers and other provisions of the Warrants and the Related Documents
      may not be enforceable, but such unenforceability will not, subject to the
      other
      exceptions, qualifications and limitations set forth herein, render the Warrants
      or the Related Documents invalid as a whole or substantially interfere with
      the
      substantial realization of the principal benefits or security, or both, that
      the
      Warrants or the Related Documents purports to provide (except for the economic
      consequences of procedural or other delay).

    

    For
      purposes of the opinions expressed in paragraphs 4, 5 and 6, we have
      assumed that the Company will not in the future take any discretionary action
      (including a decision not to act) permitted by the Related Documents that would
      cause the performance of the Related Documents to violate any organizational
      document of the Company, the Delaware General Corporation Law or any New York
      or
      federal statute, rule or regulation, or require an order, consent, permit or
      approval to be obtained from a New York or federal governmental
      authority.

    

    We
      express no opinion as to the effect of non-compliance by you with any state
      or
      federal laws or regulations applicable to the transactions contemplated by
      the
      Related Documents because of the nature of your business.

    

    We
      express no opinion as to any provision of the Warrants or the Related Documents
      insofar as it purports to grant a right of setoff in respect of Company’s assets
      to any person other than a creditor of the Company.

    

    We
      advise
      you that Section 8.04 of the Warrant Agreement, which provides for
      non-exclusive jurisdiction of the courts of the State of New York and federal
      courts sitting in the State of New York, may not be binding on the federal
      courts sitting in the State of New York (or any federal appellate
      court).

    

    We
      advise
      you that if an action based on the Warrants or the Related Documents were
      commenced in a federal or state court in New York, a judgment for money relating
      to the Warrants or the Related Documents ordinarily would be enforced only
      in
      United States dollars. The method used to determine the rate of conversion
      of
      foreign currency into United States dollars will depend on various
      factors.

    

    We
      express no opinion concerning (i) federal or state securities laws or
      regulations, or (ii) the foreign assets control regulations of the Trading
      with the Enemy Act, as amended, the United States Treasury Department, the
      Uniting and Strengthening America by Providing Appropriate Tools Required to
      Intercept and Obstruct Terrorism (USA PATRIOT Act) Act of 2001, as amended,
      Executive Order No. 13,224 of September 24, 2001, Blocking Property and
      Prohibiting Transactions with Persons Who Commit, Threaten to Commit or Support
      Terrorism, as amended, and any enabling legislation, rules, regulations or
      executive orders relating thereto.

    

    
      
         

      

      
        C-4

        
          

        

      

      
         

      

       

    

    The
      law
      covered by this opinion is limited to the present federal law of the United
      States, the present law of the State of New York and the present Delaware
      General Corporation Law, in each case, as in effect on the date hereof. We
      express no opinion as to the laws of any other jurisdiction and no opinion
      regarding the statutes, administrative decisions, rules, regulations or
      requirements of any county, municipality, subdivision or local authority of
      any
      jurisdiction.

    

    This
      opinion is furnished by us as special New York counsel for Company and may
      be
      relied upon by you only in connection with the Warrants and the Related
      Documents. It may not be used or relied upon by you for any other purpose or
      by
      any other person, nor may copies be delivered to any other person, without
      in
      each instance our prior written consent. This opinion is expressly limited
      to
      the matters set forth above, and we render no opinion, whether by implication
      or
      otherwise, as to any other matters. This letter speaks only as of the date
      hereof and we assume no obligation to update or supplement this opinion to
      reflect any facts or circumstances that arise after the date of this opinion
      and
      come to our attention, or any future changes in laws.

    

    Respectfully
      submitted,

    

    
      
         

      

      
        C-5

        
          

        

      

      
         

      

    

    Schedule I

    Other
      Agreements

    

    

    

    
      
         

      

      
        C-6

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