Document:

Chase
      Packaging Corporation

    

    

    FOR
      IMMEDIATE RELEASE

    

    

    Chase
      Packaging Completes Closing of Private Placement

    

    Fair
      Haven, New Jersey - September 10, 2007
      - Chase
      Packaging Corporation, which trades over-the-counter under the symbol “CPKA,”
today announced the completion of a Private Placement of 13,334 investment
      units
      at a per unit purchase price of $150, for a total subscribed amount of
      $2,000,100. Each investment unit consists of: (1) one share of Series A 10%
      Convertible Preferred Stock, par value $1.00 per share, stated value $100 per
      share; (2) 500 shares of the Company’s $0.10 par value Common Stock; and (3) 500
      Warrants, each of which is exercisable into one share of the Company’s Common
      Stock at $0.15 per share.

    

    The
      Company ceased its prior packaging business operations as of December 31, 1997,
      and since that time the Company has maintained its publicly-held status, but
      does not conduct any substantive business.

    

    The
      net
      proceeds from the recently completed private placement will initially be
      invested in short term U.S. Treasury securities and be used for working capital
      and general corporate purposes while the Company’s Board pursues opportunities
      for a business transaction with an independent operating company. 

    

    

    

    This
      press release includes “forward-looking statements” within the meaning of
      Section 27A of the
      Securities Act of 1933, as amended, and Section 21E of the Securities Exchange
      Act of 1934, as
      amended. These forward looking statements are based on our current expectations
      and projections
      about future events. All statements other than statements of historical fact
      included in this
      press release regarding the Company are forward looking statements. There can
      be
      no assurance
      that those expectations and projections will prove to be
      correct.

    #
      #
      #

    

    CONTACT:

    

    Chase
      Packaging Corporation

    Ann
      C.W. Green (732) 741-1500

    Chief
      Financial Officer

    

    
 

     

     

    

      636
        River Road, Fair Haven, NJ 07704NEITHER
      THESE SECURITIES NOR THE SECURITIES FOR WHICH THESE SECURITIES ARE EXERCISABLE
      HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE
      SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
      REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
      ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
      EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
      AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
      REQUIREMENTS OF THE SECURITIES ACT AND IN COMPLIANCE WITH APPLICABLE STATE
      SECURITIES OR BLUE SKY LAWS. THESE SECURITIES AND THE SECURITIES ISSUABLE UPON
      EXERCISE OF THESE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE
      MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.

    

    
 

    CHASE
      PACKAGING CORPORATION

    

    WARRANT

    

    (Agreement
      and Certificate)

    
      	
               

              Warrant
                No. [   ]

            	
              ____________
                Warrants

            

    

    

    

    Chase
      Packaging Corporation, a Texas corporation (the “Company”),
      hereby certifies that, for value received,
      ______________________________________, or his, her, or its registered assigns
      (the “Holder”),
      is
      the owner of that number of Warrants (the “Warrants”)
      set
      forth above and is entitled to purchase from the Company, for each Warrant
      held,
      one (1) share of common stock, $0.10 par value per share (the “Common
      Stock”),
      of
      the Company (each such share, a “Warrant
      Share”
and
      all
      such shares, the “Warrant
      Shares”)
      at an
      exercise price equal to $0.15 per share (as adjusted from time to time as
      provided in Section
      9,
      the
“Exercise
      Price”),
      at
      any time and from time to time from and after the date hereof and through and
      including the fifth anniversary of the date hereof (the “Expiration
      Date”),
      and
      subject to the following terms and conditions. These Warrants are part of a
      package of securities issued pursuant to that certain Securities Purchase and
      Subscription Agreement (the “Purchase
      Agreement”),
      dated
      as of the date hereof, by and among the Company and the Purchasers identified
      therein. All such warrants are referred to herein, collectively, as the
“Warrants.”

    

    1.
       Definitions.  In addition to the terms
      defined elsewhere in this Warrant Agreement, capitalized terms that are not
      otherwise defined herein have the meanings given to such terms in the Purchase
      Agreement.

    

    2.
       Registration of Warrant.  The Company
      shall register these Warrants, upon records to be maintained by the Company
      for
      that purpose (the “Warrant Register”), in the name of the
      record Holder hereof from time to time. The Company may deem and treat the
      registered Holder of these Warrants as the absolute owner hereof for the purpose
      of any exercise hereof or any distribution to the Holder, and for all other
      purposes, absent actual notice to the contrary.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    3.
       Registration of Transfers.  The Company
      shall register the transfer of any portion of this Warrant Certificate in the
      Warrant Register, upon surrender of this Warrant Certificate, with the Form
      of
      Assignment attached hereto duly completed and signed, to the Transfer Agent
      or
      to the Company at its address specified herein. Upon any such registration
      or
      transfer, a new warrant to purchase Common Stock, in substantially the form
      of
      this Warrant Certificate (any such new warrant, a “New
      Warrant”), evidencing the portion of this Warrant Certificate so
      transferred shall be issued to the transferee, and a New Warrant evidencing
      the
      remaining portion of this Warrant Certificate not so transferred, if any, shall
      be issued to the transferring Holder. The acceptance of the New Warrant by
      the
      transferee thereof shall be deemed the acceptance by such transferee of all
      of
      the rights and obligations of a holder of this Warrant Certificate.

    

    4.
       Exercise and Duration of Warrants.

    

    (a)
       These
      Warrants shall be exercisable by the registered Holder at any time and from
      time
      to time on or after the date hereof to and including the Expiration Date. At
      6:30 P.M., New York City time on the Expiration Date, the portion of this
      Warrant Certificate not exercised prior thereto shall be and become void and
      of
      no value; provided that, if the average of the Closing Prices for the five
      Trading Days immediately prior to (but not including) the Expiration Date
      exceeds the Exercise Price on the Expiration Date, then this Warrant Certificate
      shall be deemed to have been exercised in full (to the extent not previously
      exercised) on a “cashless exercise” basis at 6:30 P.M. New York City time on the
      Expiration Date if a “cashless exercise” may occur at such time pursuant to
      Section 10 below. 

    

    (b)
       A
      Holder
      may exercise this Warrant Certificate by delivering to the Company: (i) an
      exercise notice, in the form attached hereto (the “Exercise
      Notice”),
      appropriately completed and duly signed; and (ii) payment of the Exercise
      Price for the number of Warrant Shares as to which this Warrant Certificate
      is
      being exercised (which may take the form of a “cashless exercise” if so
      indicated in the Exercise Notice and if a “cashless exercise” may occur at such
      time pursuant to Section 10 below), and the date such items are delivered to
      the
      Company (as determined in accordance with the notice provisions hereof) is
      an
“Exercise
      Date.”
The
      Holder shall not be required to deliver the original Warrant Certificate in
      order to effect an exercise hereunder.

    

    5.
       Delivery of Warrant Shares.

    

    (a)
       Upon
      exercise of this Warrant Certificate, the Company shall promptly (but in no
      event later than three Trading Days after the Exercise Date) issue or cause
      to
      be issued, and cause to be delivered to or upon the written order of the Holder
      and in such name or names as the Holder may designate, a certificate for the
      Warrant Shares issuable upon such exercise, free of restrictive legends unless
      a
      registration statement covering the resale of the Warrant Shares and naming
      the
      Holder as a selling stockholder thereunder is not then effective and the Warrant
      Shares are not freely transferable without volume restrictions pursuant to
      Rule
      144 under the Securities Act. The Holder, or any Person so designated by the
      Holder to receive Warrant Shares, shall be deemed to have become the holder
      of
      record of such Warrant Shares as of the Exercise Date.

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    (b)
       This
      Warrant Certificate is exercisable either in its entirety or, from time to
      time,
      for a portion of the number of Warrant Shares. Upon surrender of this Warrant
      Certificate following one or more partial exercises, the Company shall issue
      or
      cause to be issued, at its expense, a New Warrant evidencing the right to
      purchase the remaining number of Warrant Shares.

    

    (c)
       The
      Company’s obligations to issue and deliver Warrant Shares in accordance with the
      terms hereof are absolute and unconditional, irrespective of any action or
      inaction by the Holder to enforce the same, any waiver or consent with respect
      to any provision hereof, the recovery of any judgment against any Person or
      any
      action to enforce the same, or any setoff, counterclaim, recoupment, limitation,
      or termination, or any breach or alleged breach by the Holder or any other
      Person of any obligation to the Company or any violation or alleged violation
      of
      law by the Holder or any other Person, and irrespective of any other
      circumstance which might otherwise limit such obligation of the Company to
      the
      Holder in connection with the issuance of Warrant Shares. Nothing herein shall
      limit a Holder’s right to pursue any other remedies available to him, her, or it
      hereunder, at law or in equity including, without limitation, a decree of
      specific performance and/or injunctive relief with respect to the Company’s
      failure to timely deliver certificates representing shares of Common Stock
      upon
      exercise of the Warrant Certificate as required pursuant to the terms
      hereof.

    

    6.
       Charges, Taxes, and Expenses.  Issuance
      and delivery of certificates for shares of Common Stock upon exercise of this
      Warrant Certificate shall be made without charge to the Holder for any issue
      or
      transfer tax, withholding tax, transfer agent fee, or other incidental tax
      or
      expense in respect of the issuance of such certificates, all of which taxes
      and
      expenses shall be paid by the Company; provided, however, that the Company
      shall
      not be required to pay any tax which may be payable in respect of any transfer
      involved in the registration of any certificates for Warrant Shares or Warrants
      in a name other than that of the Holder or an Affiliate thereof. The Holder
      shall be responsible for all other tax liability that may arise as a result
      of
      holding or transferring this Warrant Certificate or receiving Warrant Shares
      upon exercise hereof.

    

    7.
       Replacement of Warrant Certificate.  If
      this Warrant Certificate is mutilated, lost, stolen, or destroyed, the Company
      shall issue or cause to be issued, in exchange and substitution for and upon
      cancellation hereof or in lieu of and substitution for this Warrant Certificate,
      a New Warrant, but only upon receipt of evidence reasonably satisfactory to
      the
      Company of such loss, theft, or destruction and customary and reasonable bond
      or
      indemnity, if requested. Applicants for a New Warrant under such circumstances
      shall also comply with such other reasonable regulations and procedures and
      pay
      such other reasonable third-party costs as the Company may
      prescribe.

    

    8.
       Reservation of Warrant Shares.  The
      Company covenants that it will at all times reserve and keep available out
      of
      the aggregate of its authorized but unissued and otherwise unreserved Common
      Stock, solely for the purpose of enabling it to issue Warrant Shares upon
      exercise of this Warrant Certificate as herein provided, the number of Warrant
      Shares which are then issuable and deliverable upon the exercise of this entire
      Warrant Certificate, free from preemptive rights or any other contingent
      purchase rights of persons other than the Holder (taking into account the
      adjustments and restrictions of Section 9). The Company covenants that
      all Warrant Shares so issuable and deliverable shall, upon issuance and the
      payment of the applicable Exercise Price in accordance with the terms hereof,
      be
      duly and validly authorized, issued, and fully paid and nonassessable. The
      Company will take all such actions as may be necessary to assure that such
      shares of Common Stock may be issued as provided herein without violation of
      any
      applicable law or regulation or of any requirements of any securities exchange
      or automated quotation system upon which the Common Stock may be
      listed.

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    9.
       Certain Adjustments.  The Exercise Price
      and number of Warrant Shares issuable upon exercise of this Warrant Certificate
      are subject to adjustment from time to time as set forth in this Section
      9.

    

    (a)
       Stock
      Dividends and Splits.  If
      the Company, at any time while this Warrant Certificate is outstanding:
      (i) pays a stock dividend on its Common Stock or otherwise makes a
      distribution on any class of capital stock that is payable in shares of Common
      Stock; (ii) subdivides outstanding shares of Common Stock into a larger
      number of shares; or (iii) combines outstanding shares of Common Stock into
      a smaller number of shares, then in each such case the Exercise Price shall
      be
      multiplied by a fraction of which the numerator shall be the number of shares
      of
      Common Stock outstanding immediately before such event and of which the
      denominator shall be the number of shares of Common Stock outstanding
      immediately after such event. Any adjustment made pursuant to clause (i) of
      this
      paragraph shall become effective immediately after the record date for the
      determination of stockholders entitled to receive such dividend or distribution,
      and any adjustment pursuant to clause (ii) or (iii) of this paragraph shall
      become effective immediately after the effective date of such subdivision or
      combination.

    

    (b)
       Pro
      Rata Distributions.  If
      the Company, at any time while this Warrant Certificate is outstanding,
      distributes to all holders of Common Stock: (i) evidences of its
      indebtedness; (ii) any security (other than a distribution of Common Stock
      covered by the preceding paragraph); (iii) rights or warrants to subscribe
      for or purchase any security; or (iv) any other asset (in each case,
“Distributed
      Property”),
      then
      in each such case the Exercise Price in effect immediately prior to the record
      date fixed for determination of stockholders entitled to receive such
      distribution shall be adjusted (effective on such record date) to equal the
      product of such Exercise Price times a fraction of which the denominator shall
      be the average of the Closing Prices for the five Trading Days immediately
      prior
      to (but not including) such record date and of which the numerator shall be
      such
      average less the then fair market value of the Distributed Property distributed
      in respect of one outstanding share of Common Stock, as determined by the
      Company’s independent certified public accountants that regularly examine the
      financial statements of the Company (an “Appraiser”).
      In
      such event, the Holder, after receipt of the determination by the Appraiser,
      shall have the right to select an additional appraiser (which shall be a
      nationally recognized accounting firm), in which case such fair market value
      shall be deemed to equal the average of the values determined by each of the
      Appraiser and such appraiser. As an alternative to the foregoing adjustment
      to
      the Exercise Price, at the request of the Holder delivered before the 90th
      day
      after such record date the Company will deliver to such Holder, the Distributed
      Property that such Holder would have been entitled to receive in respect of
      the
      Warrant Shares for which this Warrant Certificate could have been exercised
      immediately prior to such record date, upon any exercise of the Warrant
      Certificate that occurs after such record date.

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    (c)
       Fundamental
      Transactions.  If,
      at any time while this Warrant Certificate is outstanding: (i) the Company
      effects any merger or consolidation of the Company with or into another Person;
      (ii) the Company effects any sale of all or substantially all of its assets
      in
      one or a series of related transactions; (iii) any tender offer or exchange
      offer (whether by the Company or another Person) is completed pursuant to which
      holders of Common Stock are permitted to tender or exchange their shares for
      other securities, cash or property; or (iv) the Company effects any
      reclassification of the Common Stock or any compulsory share exchange pursuant
      to which the Common Stock is effectively converted into or exchanged for other
      securities, cash, or property (other than as a result of a subdivision or
      combination of shares of Common Stock covered by Section 9(a) above) (in any
      such case, a “Fundamental
      Transaction”),
      then
      the Holder shall have the right thereafter to receive, upon exercise of this
      Warrant Certificate, the same amount and kind of securities, cash, or property
      as it would have been entitled to receive upon the occurrence of such
      Fundamental Transaction if it had been, immediately prior to such Fundamental
      Transaction, the holder of the number of Warrant Shares then issuable upon
      exercise in full of this Warrant Certificate (the “Alternate
      Consideration”).
      The
      aggregate Exercise Price for this Warrant Certificate will not be affected
      by
      any such Fundamental Transaction, but the Company shall apportion such aggregate
      Exercise Price among the Alternate Consideration in a reasonable manner
      reflecting the relative value of any different components of the Alternate
      Consideration. If holders of Common Stock are given any choice as to the
      securities, cash, or property to be received in a Fundamental Transaction,
      then
      the Holder shall be given the same choice as to the Alternate Consideration
      it
      receives upon any exercise of this Warrant Certificate following such
      Fundamental Transaction. In the event of a Fundamental Transaction, the Company
      or the successor or purchasing Person, as the case may be, shall execute with
      the Holder a written agreement providing that:

    

    (x) this
      Warrant Certificate shall thereafter entitle the Holder to purchase the
      Alternate Consideration in accordance with this section 9(c),

    

    (y) in
      the
      case of any such successor or purchasing Person, upon such consolidation,
      merger, statutory exchange, combination, sale, or conveyance such successor
      or
      purchasing Person shall be jointly and severally liable with the Company for
      the
      performance of all of the Company’s obligations under this Warrant Certificate
      and the Purchase Agreement, and

    

    (z) if
      registration or qualification is required under the Securities Act or applicable
      state law for the public resale by the Holder of shares of stock and other
      securities so issuable upon exercise of this Warrant Certificate, all rights
      applicable to registration of the Common Stock issuable upon exercise of this
      Warrant Certificate shall apply to the Alternate Consideration.

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    If,
      in
      the case of any Fundamental Transaction, the Alternate Consideration includes
      shares of stock, other securities, other property or assets of a Person other
      than the Company or any such successor or purchasing Person, as the case may
      be,
      in such Fundamental Transaction, then such written agreement shall also be
      executed by such other Person and shall contain such additional provisions
      to
      protect the interests of the Holder as the Board of Directors of the Company
      shall reasonably consider necessary by reason of the foregoing. At the Holder’s
      request, any successor to the Company or surviving entity in such Fundamental
      Transaction shall issue to the Holder a new warrant consistent with the
      foregoing provisions and evidencing the Holder’s right to purchase the Alternate
      Consideration for the aggregate Exercise Price upon exercise thereof. The terms
      of any agreement pursuant to which a Fundamental Transaction is effected shall
      include terms requiring any such successor or surviving entity to comply with
      the provisions of this paragraph (c) and insuring that the Warrant Certificate
      (or any such replacement security) will be similarly adjusted upon any
      subsequent transaction analogous to a Fundamental Transaction. If any
      Fundamental Transaction constitutes or results in a Change of Control, then
      at
      the request of the Holder delivered before the 30th
      day
      after such Fundamental Transaction, the Company (or any such successor or
      surviving entity) shall purchase the Warrant from the Holder for a purchase
      price, payable in cash within five Trading Days after such request (or, if
      later, on the effective date of the Fundamental Transaction), equal to the
      Black-Scholes value (calculated in accordance with Bloomberg, L.P. using a
      180
      day historical volatility) of the remaining unexercised portion of this Warrant
      Certificate on the date of such request in the case of a third party tender
      offer, or, in the case of any other Fundamental Transaction, on the date of
      the
      execution of definitive documentation governing such Fundamental
      Transaction.

    

    (d)
       Subsequent
      Equity Sales.

    

    (i) If,
      at
      any time while this Warrant Certificate is outstanding, the Company issues
      additional shares of Common Stock or rights, warrants, options, or other
      securities or debt convertible, exercisable, or exchangeable for shares of
      Common Stock or otherwise entitling any Person to acquire shares of Common
      Stock
      (collectively, “Common
      Stock Equivalents”)
      at an
      effective net price to the Company per share of Common Stock (the “Effective
      Price”)
      less
      than the Exercise Price (as adjusted hereunder to such date), then the Exercise
      Price shall be reduced to equal the Effective Price. For purposes of this
      paragraph, in connection with any issuance of any Common Stock Equivalents:
      (A) the maximum number of shares of Common Stock potentially issuable at
      any time upon conversion, exercise, or exchange of such Common Stock Equivalents
      (the “Deemed
      Number”)
      shall
      be deemed to be outstanding upon issuance of such Common Stock Equivalents;
      (B) the Effective Price applicable to such Common Stock shall equal the
      minimum dollar value of consideration payable to the Company to purchase such
      Common Stock Equivalents and to convert, exercise, or exchange them into Common
      Stock (net of any discounts, fees, commissions, and other expenses), divided
      by
      the Deemed Number; and (C) no further adjustment shall be made to the
      Exercise Price upon the actual issuance of Common Stock upon conversion,
      exercise, or exchange of such Common Stock Equivalents. The Effective Price
      of
      Common Stock or Common Stock Equivalents issued in any transaction in which
      more
      than one type of securities are issued shall give effect to the allocation
      by
      the Company of the aggregate amount paid for such securities issued in such
      transaction.

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    (ii) If,
      at
      any time while this Warrant Certificate is outstanding, the Company issues
      Common Stock Equivalents with an Effective Price or a number of underlying
      shares that floats or resets or otherwise varies or is subject to adjustment
      based (directly or indirectly) on market prices of the Common Stock (a
“Floating
      Price Security”),
      then
      for purposes of applying the preceding paragraph in connection with any
      subsequent exercise, the Effective Price will be determined separately on each
      Exercise Date and will be deemed to equal the lowest Effective Price at which
      any holder of such Floating Price Security is entitled to acquire Common Stock
      on such Exercise Date (regardless of whether any such holder actually acquires
      any shares on such date).

    

    (iii) Notwithstanding
      the foregoing, no adjustment will be made under this paragraph in respect of
      any
      Excluded Stock (see definition contained in the Securities Purchase and
      Subscription Agreement referred to in section 15 hereof).

    

    (e)
       Number
      of Warrant Shares.  Simultaneously
      with any adjustments to the Exercise Price pursuant to paragraphs (a), (b),
      or
      (d) of this Section, the number of Warrant Shares that may be purchased upon
      exercise of this Warrant Certificate shall be increased or decreased
      proportionately, so that after such adjustment the aggregate Exercise Price
      payable hereunder for the increased or decreased number of Warrant Shares shall
      be the same as the aggregate Exercise Price in effect immediately prior to
      such
      adjustment.

    

    (f)
       Calculations.  All
      calculations under this Section
      9
      shall be
      made to the nearest cent or the nearest 1/100th of a share, as applicable.
      The
      number of shares of Common Stock outstanding at any given time shall not include
      shares owned or held by or for the account of the Company, and the disposition
      of any such shares shall be considered an issue or sale of Common
      Stock.

    

    (g)
       Notice
      of Adjustments.  Upon
      the occurrence of each adjustment pursuant to this Section
      9,
      the
      Company at its expense will promptly compute such adjustment in accordance
      with
      the terms of this Warrant Certificate and prepare a certificate setting forth
      such adjustment, including a statement of the adjusted Exercise Price and
      adjusted number or type of Warrant Shares or other securities issuable upon
      exercise of this Warrant Certificate (as applicable), describing the
      transactions giving rise to such adjustments and showing in detail the facts
      upon which such adjustment is based. Upon written request, the Company will
      promptly deliver a copy of each such certificate to the Holder.

    

    (h)
       Notice
      of Corporate Events.  If
      the Company: (i) declares a dividend or any other distribution of cash,
      securities, or other property in respect of its Common Stock, including without
      limitation any granting of rights or warrants to subscribe for or purchase
      any
      capital stock of the Company; (ii) authorizes or approves, enters into any
      agreement contemplating or solicits stockholder approval for any Fundamental
      Transaction; or (iii) authorizes the voluntary dissolution, liquidation, or
      winding up of the affairs of the Company, then the Company shall deliver to
      the
      Holder a notice describing the material terms and conditions of such
      transaction, at least 20 calendar days prior to the applicable record or
      effective date on which a Person would need to hold Common Stock in order to
      participate in, or vote with respect to, such transaction, and the Company
      will
      take all steps reasonably necessary in order to insure that the Holder is given
      the practical opportunity to exercise this Warrant Certificate prior to such
      time so as to participate in or vote with respect to such transaction; provided,
      however, that the failure to deliver such notice or any defect therein shall
      not
      affect the validity of the corporate action required to be described in such
      notice.

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    10.
       Payment of Exercise Price.  The Holder
      shall pay the Exercise Price in immediately available funds; provided, however,
      if at anytime after the Required Filing Date there is no effective Registration
      Statement registering, or no current prospectus available for, the resale of
      the
      Warrant Shares by the Holder, the Holder may satisfy its obligation to pay
      the
      Exercise Price through a “cashless exercise,” in which event the Company shall
      issue to the Holder the number of Warrant Shares determined as
      follows:

     

    
      	 	
              X
                =
                Y [(A-B)/A]

            
	
              where:

            	 
	 	
              X
                =
                the number of Warrant Shares to be issued to the
                Holder.

            
	 	 
	 	
              Y
                =
                the number of Warrant Shares with respect to which this Warrant
                Certificate is being exercised.

            
	 	 
	 	
              A
                =
                the arithmetic average of the Closing Prices for the five Trading
                Days
                immediately prior to (but not including) the Exercise
                Date.

            
	 	 
	 	
              B
                =
                the Exercise Price.

            

    

    

    For
      purposes of Rule 144 promulgated under the Securities Act, it is intended,
      understood, and acknowledged that the Warrant Shares issued in a cashless
      exercise transaction pursuant to this Section 10 shall be deemed to have
      been acquired by the Holder, and the holding period for the Warrant Shares
      shall
      be deemed to have commenced, on the date this Warrant Certificate was originally
      issued pursuant to the Purchase Agreement.

    

    11.
       Fractional Shares.  The Company shall
      not be required to issue or cause to be issued fractional Warrant Shares on
      the
      exercise of this Warrant Certificate. If any fraction of a Warrant Share would,
      except for the provisions of this Section, be issuable upon exercise of this
      Warrant Certificate, the number of Warrant Shares to be issued will be rounded
      up to the nearest whole share.

    

    12.
       Notices.  Any and all notices or other
      communications or deliveries hereunder (including without limitation any
      Exercise Notice) shall be in writing and shall be deemed given and effective
      on
      the earliest of: (i) the date of transmission, if such notice or communication
      is delivered via facsimile at the facsimile number specified in this Section
      prior to 6:30 p.m. (New York City time) on a Trading Day; (ii) the next Trading
      Day after the date of transmission, if such notice or communication is delivered
      via facsimile at the facsimile number specified in this Section on a day that
      is
      not a Trading Day or later than 6:30 p.m. (New York City time) on any Trading
      Day; (iii) the Trading Day following the date of mailing, if sent by nationally
      recognized overnight courier service; or (iv) upon actual receipt by the party
      to whom such notice is required to be given. The address for such notices or
      communications shall be as set forth in the Purchase Agreement.

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

    13.
       Warrant Agent.  The Company shall serve
      as warrant agent under this Warrant Agreement. Upon 30 days’ notice to the
      Holder, the Company may appoint a new warrant agent. Any corporation into which
      the Company or any new warrant agent may be merged or any corporation resulting
      from any consolidation to which the Company or any new warrant agent shall
      be a
      party or any corporation to which the Company or any new warrant agent transfers
      substantially all of its corporate trust or shareholders services business
      shall
      be a successor warrant agent under this Warrant Agreement without any further
      act. Any such successor warrant agent shall promptly cause notice of its
      succession as warrant agent to be mailed (by first class mail, postage prepaid)
      to the Holder at the Holder’s last address as shown on the Warrant
      Register.

    

    14.
       SEC Registration.  These Warrants are
      being initially issued as part of a package of securities comprising certain
      Units being offered and sold by the Company through, and by means of, a Private
      Placement Memorandum. In connection that offering, each Purchaser will enter
      into a Securities Purchase and Subscription Agreement and a Registration Rights
      Agreement with the Company, the latter providing for each investor to have
      certain SEC registration rights for both these Warrants and the other securities
      comprising each Unit. With regard to such SEC registration rights, reference
      is
      hereby made to such Registration Rights Agreement, all of the provisions of
      which are herein incorporated by reference.

    

    15.
       Miscellaneous.

    

    (a)
       Subject
      to the restrictions on transfer set forth on the first page hereof, this Warrant
      Certificate may be assigned by the Holder. This Warrant Certificate may not
      be
      assigned by the Company except to a successor in the event of a Fundamental
      Transaction. This Warrant Certificate shall be binding on, and inure to the
      benefit of, the parties hereto and their respective successors and assigns.
      Subject to the preceding sentence, nothing in this Warrant Certificate shall
      be
      construed to give to any Person other than the Company and the Holder any legal
      or equitable right, remedy, or cause of action under this Warrant Certificate.
      This Warrant Agreement may be amended only in writing signed by the Company
      and
      the Holder or his, her, or its successors and assigns.

    

    (b)
       The
      Company will not, by amendment of its governing documents or through any
      reorganization, transfer of assets, consolidation, merger, dissolution, issue,
      or sale of securities or any other voluntary action, avoid or seek to avoid
      the
      observance or performance of any of the terms of this Warrant Agreement, but
      will at all times in good faith assist in the carrying out of all such terms
      and
      in the taking of all such action as may be necessary or appropriate in order
      to
      protect the rights of the Holder against impairment. Without limiting the
      generality of the foregoing, the Company: (i) will not increase the par value
      of
      any Warrant Shares above the amount payable therefor on such exercise; (ii)
      will
      take all such action as may be reasonably necessary or appropriate in order
      that
      the Company may validly and legally issue fully paid and nonassessable Warrant
      Shares on the exercise of this Warrant Certificate; and (iii) will not close
      its
      shareholder books or records in any manner which interferes with the timely
      exercise of this Warrant Certificate.

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

    (c)
       Governing
      Law; Venue; Waiver Of Jury Trial.  All
      questions concerning the construction, validity, enforcement, and interpretation
      of this Warrant Agreement shall be governed by, and construed and enforced
      in
      accordance with, the internal laws of the State of New York, without regard
      to
      the principles of conflicts of law thereof. Each party agrees that all legal
      proceedings concerning the interpretations, enforcement, and defense of the
      transactions contemplated by any of the Transaction Documents (whether brought
      against a party hereto or his, her, or its respective Affiliates, directors,
      officers, shareholders, employees, or agents) shall be commenced exclusively
      in
      the state and federal courts sitting in the City of New York, Borough of
      Manhattan. Each party hereto hereby irrevocably submits to the exclusive
      jurisdiction of the state and federal courts sitting in the City of New York,
      Borough of Manhattan, for the adjudication of any dispute hereunder or in
      connection herewith or with any transaction contemplated hereby or discussed
      herein (including with respect to the enforcement of any of this Warrant
      Agreement), and hereby irrevocably waives, and agrees not to assert in any
      suit,
      action, or proceeding, any claim that he, she, or it is not personally subject
      to the jurisdiction of any such court or that such suit, action, or proceeding
      is improper. Each party hereto hereby irrevocably waives personal service of
      process and consents to process being served in any such suit, action, or
      proceeding by mailing a copy thereof via registered or certified mail or
      overnight delivery (with evidence of delivery) to such party at the address
      in
      effect for notices to him, her, or it under this Warrant Agreement and agrees
      that such service shall constitute good and sufficient service of process and
      notice thereof. Nothing contained herein shall be deemed to limit in any way
      any
      right to serve process in any manner permitted by law. Each party hereto hereby
      irrevocably waives, to the fullest extent permitted by applicable law, any
      and
      all right to trial by jury in any legal proceeding arising out of or relating
      to
      this Warrant Agreement or any of the Transaction Documents or the transactions
      contemplated hereby or thereby. If either party shall commence an action or
      proceeding to enforce any provisions of this Warrant Agreement or any
      Transaction Document, then the prevailing party in such action or proceeding
      shall be reimbursed by the other party for his, her, or its reasonable attorneys
      fees and other reasonable costs and expenses incurred with the investigation,
      preparation, and prosecution of such action or proceeding.

    

    (d)
       The
      headings herein are for convenience only, do not constitute a part of this
      Warrant Agreement, and shall not be deemed to limit or affect any of the
      provisions hereof.

    

    (e)
       In
      case
      any one or more of the provisions of this Warrant Agreement shall be invalid
      or
      unenforceable in any respect, the validity and enforceability of the remaining
      terms and provisions of this Warrant Agreement shall not in any way be affected
      or impaired thereby, and the parties will attempt in good faith to agree upon
      a
      valid and enforceable provision which shall be a commercially reasonable
      substitute therefor, and upon so agreeing, shall incorporate such substitute
      provision in this Warrant Agreement.

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF,
      the
      Company has caused this Warrant Agreement to be duly executed by its authorized
      officer with an effective date of September 7, 2007.

     

    
      	 	 	 
	 	
              CHASE
                PACKAGING CORPORATION

            
	 
 	 
 	 
 
	
            	By:  	/s/
              HERBERT
              M. GARDNER
	 	
              
Herbert
              M. Gardner,
	 	
              Vice
                President

            

    

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

    FORM
      OF
      EXERCISE NOTICE

    

    (To
      be
      executed by the Holder to exercise the right to purchase shares of Common Stock
      under the foregoing Warrant Certificate)

    

    To:
      Chase
      Packaging Corporation

    

    The
      undersigned is the Holder of Warrant No. _______ (the “Warrant”)
      issued
      by Chase Packaging Corporation, a Texas corporation (the “Company”).
      Capitalized terms used herein and not otherwise defined have the respective
      meanings set forth in the Warrant.

    

    
      	
              1.
                

            	
              The
                Warrant is currently exercisable to purchase a total of ______________
                Warrant Shares.

            

    

    

    
      	
              2.
                

            	
              The
                undersigned Holder hereby exercises his, her, or its right to purchase
                _________________ Warrant Shares pursuant to the Warrant
                Certificate.

            

    

    

    
      	
              3.
                

            	
              The
                Holder intends that payment of the Exercise Price shall be made as
                (check
                one):

            

    

    

    ____ Cash
      Exercise

    

    ____ “Cashless
      Exercise” under Section 10 (if permitted)

    

    
      	
              4.
                

            	
              If
                the holder has elected a Cash Exercise, the holder shall pay the
                sum of
                $____________ to the Company in accordance with the terms of the
                Warrant
                Certificate.

            

    

    

    
      	
              5.
                

            	
              Pursuant
                to this exercise, the Company shall deliver to the holder _______________
                Warrant Shares in accordance with the terms of the Warrant
                Certificate.

            

    

    

    
      	
              6.
                

            	
              Following
                this exercise, the Warrant Certificate shall be exercisable to purchase
                a
                total of ______________ Warrant
                Shares.

            

    

    
      	 	 	 
	 	 	 
	
              Dated:_____________
                ,
                _____ 

            	 	
              Name
                of Holder:

            
	 	 	 
	 	 	
              (Print)
                ____________________________________

            
	 	 	 
	 	 	
              By:_______________________________________

            
	 	 	
              Name:_____________________________________

            
	 	 	
              Title:
                _____________________________________

            
	 	 	 
	 	 	
              (Signature
                must conform in all respects to name of holder

              as
                specified on the face of the Warrant
                Certificate)

            

    

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

    FORM
      OF
      ASSIGNMENT

    

    [To
      be
      completed and signed only upon transfer of Warrant Certificate]

    

    FOR
      VALUE RECEIVED,
      the
      undersigned hereby sells, assigns, and transfers unto
      ________________________________ the right represented by the within Warrant
      Certificate to purchase ____________ shares of Common Stock of Chase Packaging
      Corporation to which the within Warrant Certificate relates and appoints
      ________________ attorney to transfer said right on the books of Chase Packaging
      Corporation with full power of substitution in the premises.

    
      	 	 
	 	 
	
              
                Dated:_____________
                  ,
                  _____ 

              

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

              on
                the face of the Warrant Certificate)

            
	 	 
	 	__________________________________________________ 
	 	
              Address
                of Transferee

            
	 	 
	 	__________________________________________________ 
	 	 
	 	__________________________________________________ 
	 	 
	 	 
	
              In
                the presence of:

            	 
	 	 
	________________________ 	 
	 	 

    

    

    
      
        
        

      

      
        13

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