Document:

EXECUTION
        VERSION

      SECURITIES
        SUBSCRIPTION AGREEMENT

       

      This
        Securities Subscription Agreement (this “Agreement”)
        is
        dated as of October 3, 2005, among Gentium S.p.A., an Italian corporation
        (the
“Company”),
        and
        each purchaser identified on the signature pages hereto (each, including
        its
        successors and assigns, a “Purchaser”
and
        collectively the “Purchasers”).

       

      WHEREAS,
        subject to the terms and conditions set forth in this Agreement and pursuant
        to
        Section 4(2) of the Securities Act of 1933, as amended (the “Securities
        Act”)
        and
        Rule 506 promulgated thereunder, the Company desires to issue and sell to
        each
        Purchaser, and each Purchaser, severally and not jointly, desires to subscribe
        to and purchase from the Company, securities of the Company as more fully
        described in this Agreement.

       

      NOW,
        THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Agreement,
        and for other good and valuable consideration the receipt and adequacy of
        which
        are hereby acknowledged, the Company and each Purchaser agree as
        follows:

       

      ARTICLE
        I.

      DEFINITIONS

       

      1.1  Definitions

       

      .
        In
        addition to the terms defined elsewhere in this Agreement, for all purposes
        of
        this Agreement, the following terms have the meanings indicated in this Section
        1.1:

       

      “Action”
shall
        have the meaning ascribed to such term in Section 3.1(j).

       

      “ADRs”
means
        American Depository Receipts issued pursuant to the terms of the Deposit
        Agreement.

       

      “Affiliate”
means
        any Person that, directly or indirectly through one or more intermediaries,
        controls or is controlled by or is under common control with a Person as
        such
        terms are used in and construed under Rule 144 under the Securities Act.
        With
        respect to a Purchaser, any investment fund or managed account that is managed
        on a discretionary basis by the same investment manager as such Purchaser
        will
        be deemed to be an Affiliate of such Purchaser.

       

      “ADSs”
means
        American Depository Shares, each representing one share of Common Stock
        deposited with The Bank of New York pursuant to the Deposit Agreement, issued
        pursuant to the terms of the Deposit Agreement.

       

      “Closing”
means
        the closing of the purchase and sale of the Securities pursuant to Section
        2.1.

       

      “Closing
        Date”
means
        the date of the Closing, which shall be a Trading Day.

       

      “Closing
        Payment”
means
        for each Purchaser an amount equal to its Subscription Amount minus its Holdback
        Amount.

       

      “Commission”
means
        the Securities and Exchange Commission.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      “Common
        Stock”
means
        the common stock of the Company, par value €1.00 per share, and any other class
        of securities into which such stock may hereafter have been reclassified
        or
        changed.

       

      “Common
        Stock Equivalents”
means
        any securities of the Company or the Subsidiaries which would entitle the
        holder
        thereof to acquire at any time Common Stock, including, without limitation,
        any
        debt, preferred stock, rights, options, warrants or other instrument that
        is at
        any time convertible into or exercisable or exchangeable for, or otherwise
        entitles the holder thereof to receive, Common Stock.

       

      “Company
        Italian Counsel”
means
        Orrick, Herrington & Sutcliffe.

       

      “Company
        U.S. Counsel”
means
        Orrick, Herrington & Sutcliffe LLP.

       

      “Deposit
        Agreement”
means
        the Deposit Agreement, dated as of June 15, 2005, among the Company, The
        Bank of
        New York, as depositary, and the owners and beneficial owners of ADRs issued
        thereunder.

       

      "Depositary"
        means
        Depositary under the Deposit Agreement.

       

      "Depositary
        Counsel"
        means
        Emmet, Marvin & Martin LLP, counsel to the Bank of New York.

       

      “Disclosure
        Schedules”
means
        the Disclosure Schedules of the Company delivered concurrently herewith.
        

       

      “Discussion
        Time”
shall
        have the meaning ascribed to such term in Section 3.2(f).

       

      “Effective
        Date”
means
        the date that the initial Registration Statement filed by the Company pursuant
        to the Registration Rights Agreement is first declared effective by the
        Commission.

       

      “Escrow
        Agent”
shall
        mean The Bank of New York.

       

      “Escrow
        Agreement”
shall
        mean the escrow agreement in the form of Exhibit
        D
        attached
        hereto.

       

      “Evaluation
        Date”
shall
        have the meaning ascribed to such term in Section 3.1(r). 

       

      “Exchange
        Act”
means
        the Securities Exchange Act of 1934, as amended, and the rules and regulations
        promulgated thereunder.

      

      “Exempt
        Issuance”
means
        the issuance of (a) shares of Common Stock or options to employees, officers
        or
        directors of the Company pursuant to any stock or option plan in existence
        on
        the date hereof or duly adopted by a majority of the non-employee members
        of the
        Board of Directors of the Company or a majority of the members of a committee
        of
        non-employee directors established for such purpose, (b) securities upon
        the
        exercise or exchange of or conversion of any Securities issued hereunder
        and/or
        securities exercisable or exchangeable for or convertible into shares of
        Common
        Stock issued and outstanding on the date of this Agreement, provided that
        such
        securities have not been amended since the date of this Agreement to increase
        the number of such securities or to decrease the exercise, exchange or
        conversion price of any such securities, and (c) securities issued pursuant
        to
        acquisitions or strategic transactions, provided any such issuance shall
        only be
        to a Person which is, itself or through its subsidiaries, an operating company
        in a business synergistic with the business of the Company and in which the
        Company receives benefits in addition to the investment of funds, but shall
        not
        include a transaction in which the Company is issuing securities primarily
        for
        the purpose of raising capital or to an entity whose primary business is
        investing in securities.

      

      
        
          
          

        

        
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      “FW”
means
        Feldman Weinstein LLP with offices located at 420 Lexington Avenue, Suite
        2620,
        New York, New York 10170-0002.

       

      “GAAP”
shall
        have the meaning ascribed to such term in Section 3.1(h).

       

      “Holdback
        Amount”
means,
        as to each Purchaser, an amount equal to Twenty Percent (20%) of such
        Purchaser's Subscription Amount.

       

      “Intellectual
        Property Rights”
shall
        have the meaning ascribed to such term in Section 3.1(o).

       

      “Legend
        Removal Date”
shall
        have the meaning ascribed to such term in Section 4.1(c). 

       

      “Liens”
means
        a
        lien, charge, security interest, encumbrance, right of first refusal, preemptive
        right or other restriction.

       

      “Material
        Adverse Effect”
shall
        have the meaning assigned to such term in Section 3.1(b).

       

      “Material
        Permits”
shall
        have the meaning ascribed to such term in Section 3.1(m).

       

      “Participation
        Maximum”
shall
        have the meaning ascribed to such term in Section 4.13. 

       

      “Per
        Unit Purchase Price”
equals
        $7.05, subject to adjustment for reverse and forward stock splits, stock
        dividends, stock combinations and other similar transactions of the Common
        Stock
        that occur after the date of this Agreement.

       

      “Person”
means
        an individual or corporation, partnership, trust, incorporated or unincorporated
        association, joint venture, limited liability company, joint stock company,
        government (or an agency or subdivision thereof) or other entity of any
        kind.

       

      “Pre-Notice”
shall
        have the meaning ascribed to such term in Section 4.13. 

       

      
        
          
          

        

        
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      “Proceeding”
means
        an action, claim, suit, investigation or proceeding (including, without
        limitation, an investigation or partial proceeding, such as a deposition),
        whether commenced or threatened.

       

      “Proxy”
means,
        for each Purchaser, its proxy to vote as a shareholder of the Company given
        to a
        third party pursuant to the Voting Agreement.

       

      “Purchaser
        Party”
shall
        have the meaning ascribed to such term in Section 4.9.

       

      “Registration
        Rights Agreement”
means
        the Registration Rights Agreement, dated the date hereof, among the Company
        and
        the Purchasers, in the form of Exhibit
        A
        attached
        hereto.

       

      “Registration
        Statement”
means
        a
        registration statement filed with the Commission pursuant to the Registration
        Rights Agreement and covering the resale by the Purchasers of the Shares
        and the
        Warrant Shares. 

       

      “Required
        Approvals”
shall
        have the meaning ascribed to such term in Section 3.1(e).

       

      “Rule
        144”
means
        Rule 144 promulgated by the Commission pursuant to the Securities Act, as
        such
        Rule may be amended from time to time, or any similar rule or regulation
        hereafter adopted by the Commission having substantially the same effect
        as such
        Rule. 

       

      “SEC
        Reports”
shall
        have the meaning ascribed to such term in Section 3.1(h).

       

      “Securities”
means
        the Shares, the Warrants and the Warrant Shares.

       

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

       

      “Shareholder
        Approval”
means
        the approval by the shareholders of the Company of the Company’s issuance of the
        Warrants and/or the Warrant Shares, as applicable, free of the statutory
        preemptive rights that would otherwise attach to the issuance of those
        securities under Italian law or the Company's organizational
        documents.

       

      “Shares”
means
        the ADSs representing the shares of Common Stock issued or issuable to each
        Purchaser pursuant to this Agreement.

       

      “Short
        Sales”
shall
        include all “short sales” as defined in Rule 200 of Regulation SHO under the
        Exchange Act. 

       

      “Subscription
        Amount”
means,
        as to each Purchaser, the aggregate amount to be paid for the Units purchased
        hereunder as specified below such Purchaser’s name on the signature page of this
        Agreement and next to the heading “Subscription Amount”.

       

      “Subsequent
        Financing”
shall
        have the meaning ascribed to such term in Section 4.13.

       

      
        
          
          

        

        
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      “Subsequent
        Financing Notice”
shall
        have the meaning ascribed to such term in Section 4.13. 

       

      “Subsidiary”
means
        any subsidiary of the Company as set forth on Schedule
        3.1(a).

       

      “Trading
        Day”
means
        a
        day on which the ADSs are traded on a Trading Market; provided,
        however,
        that
        any day on which banks are not open in the Republic of Italy shall not be
        a
        Trading Day.

       

      “Trading
        Market”
means
        the following markets or exchanges on which the Common Stock is listed or
        quoted
        for trading on the date in question: the Nasdaq SmallCap Market, the American
        Stock Exchange, the New York Stock Exchange and the Nasdaq National
        Market.

       

      “Transaction
        Documents”
means
        this Agreement, the Warrants, the Registration Rights Agreement, the Escrow
        Agreement, the Deposit Agreement, the Voting Agreement and the Proxy and
        any
        other documents or agreements executed in connection with the transactions
        contemplated hereunder.

       

      "Unit"
        means,
        for each Unit, one Share and 0.4 Warrants.

       

      “Voting
        Agreement”
means
        the Voting Agreement, in the form of Exhibit
        E,
        by and
        among the Purchasers and FinSirton S.p.A., an Italian corporation (“FinSirton”),
        that
        will, together with the Purchasers, own a majority of the issued and outstanding
        stock after the Closing, pursuant to which the Purchasers and FinSirton shall
        agree to: (i) vote in favor of the approval of the Warrants, the Warrant
        Shares
        and the Common Stock underlying the Warrant Shares and to exempt the Warrants,
        the Warrant Shares and the Common Stock underlying the Warrant Shares from
        any
        preemptive rights applicable under Italian law;(ii) vote to amend Article
        19 of
        the Company's Bylaws to increase the number of directors of the Company;
        (iii)
        nominate and vote to elect to the Company's Board of Directors one person
        designated by Great Point Partners, LLC ("Great
        Point");
        and
        (iv) vote in favor of such designee's removal or replacement at the request
        of
        Great Point, during the time set forth in the Voting Agreement.

       

      “VWAP”
means,
        for any date, the price determined by the first of the following clauses
        that
        applies: (a) if the ADSs are then listed or quoted on a Trading Market, the
        daily volume weighted average price of an ADS for such date (or the nearest
        preceding date) on the Trading Market on which the ADSs are then listed or
        quoted as reported by Bloomberg Financial L.P. (based on a Trading Day from
        9:30
        a.m. Eastern Time to 4:02 p.m. Eastern Time); (b) if the ADSs are not then
        listed or quoted on a Trading Market and if prices for the ADSs are then
        quoted
        on the OTC Bulletin Board, the volume weighted average price of the ADSs
        for
        such date (or the nearest preceding date) on the OTC Bulletin Board; (c)
        if the
        Common Stock is not then listed or quoted on the OTC Bulletin Board and if
        prices for the ADSs are then reported in the “Pink Sheets” published by the Pink
        Sheets, LLC (or a similar organization or agency succeeding to its functions
        of
        reporting prices), the most recent bid price per share of the ADSs so reported;
        or (d) in all other cases, the fair market value of an ADS as determined
        by an
        independent appraiser selected in good faith by the Purchasers and reasonably
        acceptable to the Company.

      

      
        
          
          

        

        
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      “Warrants”
means
        collectively the ADS purchase warrants, in the form of Exhibit
        C,
        delivered to the Escrow Agent at the Closing in accordance with Section 2.2(a)
        hereof and in accordance with the Escrow Agreement, which, upon Shareholder
        Approval, such Warrants shall be delivered to the Purchasers and shall be
        exercisable beginning 6 months from the date hereof and have a term of exercise
        equal to 5 years.

       

      “Warrant
        Issue Date”
means
        the Trading Day that is five Trading Days subsequent to the date of Shareholder
        Approval.

       

      “Warrant
        Shares”
means
        the ADSs representing shares of Common Stock issuable upon exercise of the
        Warrants.

       

      ARTICLE
        II.

      PURCHASE
        AND SALE

       

      2.1  Closing.
        Upon
        the terms and subject to the conditions set forth herein, concurrent with
        the
        execution and delivery of this Agreement by the parties hereto, the Company
        agrees to issue and sell, and each Purchaser agrees to subscribe and purchase
        in
        the aggregate, severally and not jointly, 1,551,125 Shares on the Closing
        Date,
        and, subject to Shareholder Approval, Warrants for the purchase of up to
        620,450
        Warrant Shares on the Warrant Issue Date. On the Closing Date, (x) each
        Purchaser shall deliver to the Company via wire transfer or a certified check
        immediately available funds in United States Dollars equal to its Closing
        Payment and shall deliver to the Escrow Agent via wire transfer or a certified
        check in immediately available funds in United States Dollars equal to its
        Holdback Amount, and shall deliver the other items set forth in Section 2.2(b)
        for delivery at the Closing as specified in Section 2.2(b), and (y) the Company
        shall deliver to each Purchaser its respective Shares, and to the Escrow
        Agent
        each Purchaser’s respective Warrants as determined pursuant to Section 2.2(a),
        and shall deliver the other items set forth in Section 2.2(a) for delivery
        at
        the Closing. Upon satisfaction of the conditions set forth in Sections 2.2
        and
        2.3, the Closing shall occur at the offices of FW, or such other location
        as the
        parties shall mutually agree.

       

      2.2  Deliveries.

       

      (a)  On
        the
        Closing Date, the Company shall deliver or cause to be delivered to each
        Purchaser (unless otherwise set forth below) or the following:

       

      (i)  this
        Agreement duly executed by the Company;

       

      (ii)  a
        legal
        opinion of the Company U.S. Counsel, in the form of Exhibit
        B-1
        attached
        hereto; 

       

      (iii)  a
        legal
        opinion of the Company Italian Counsel, in the form of Exhibit
        B-2
        attached
        hereto;

       

      
        
          
          

        

        
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      (iv)  a
        legal
        opinion of the Depositary Counsel, in the form of Exhibit
        B-3 attached
        hereto;

       

      (v)  an
        ADR
        evidencing a number of Shares equal to such Purchaser’s Subscription Amount
        divided by the Per Unit Purchase Price, registered in the name of such
        Purchaser;

       

      (vi)  to
        the
        Escrow Agent, a Warrant registered in the name of such Purchaser to purchase
        up
        to a number of Warrant Shares equal to 40% of the Shares purchased by such
        Purchaser hereunder, with an exercise price equal to $9.69, subject to
        adjustment therein;

       

      (vii)  the
        Escrow Agreement, duly executed by the Company and the Escrow
        Agent;

       

      (viii)  the
        Voting Agreement, duly executed by FinSirton; and

       

      (ix)  the
        Registration Rights Agreement duly executed by the Company.

       

      (b)  On
        the
        Closing Date, each Purchaser shall deliver or cause to be delivered to the
        Company the following:

       

      (i)  this
        Agreement duly executed by such Purchaser;

       

      (ii)  such
        Purchaser’s Closing Payment by wire transfer to the account as specified in
        writing by the Company;

       

      (iii)  to
        the
        Escrow Agent, such Purchaser’s Holdback Amount by wire transfer to the account
        as specified according to the Escrow Agreement;

       

      (iv)  the
        Voting Agreement duly executed by such Purchaser;

       

      (v)  the
        Proxy
        duly executed by such Purchaser; and

       

      (vi)  the
        Registration Rights Agreement duly executed by such Purchaser.

       

      2.3  Closing
        Conditions. 

       

      (a) The
        obligations of the Company hereunder in connection with the Closing are subject
        to the following conditions being met:

       

      (i)  the
        accuracy in all material respects when made and on the Closing Date (as if
        made
        on and as of the Closing Date) of the representations and warranties of the
        Purchasers contained herein; 

       

      (ii)  all
        obligations, covenants and agreements of the Purchasers required to be performed
        at or prior to the Closing Date shall have been performed; 

       

      
        
          
          

        

        
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      (iii)  the
        delivery by the Purchasers of the items set forth in Section 2.2(b) of this
        Agreement; and

       

      (iv)  the
        aggregate Closing Payments divided by the total number of Shares to be issued
        to
        all the Purchasers shall equal or exceed that
        amount of U.S. Dollars equivalent to €4.50 (based on the US$/€ exchange rate in
        effect as of the Closing Date).

       

      (b)  The
        respective obligations of the Purchasers hereunder in connection with the
        Closing are subject to the following conditions being met:

       

      (i)  the
        accuracy in all material respects when made and on the Closing Date (as if
        made
        on and as of the Closing Date) of the representations and warranties of the
        Company contained herein;

       

      (ii)  all
        obligations, covenants and agreements of the Company required to be performed
        at
        or prior to the Closing Date shall have been performed; 

       

      (iii)  the
        delivery by the Company of the items set forth in Section 2.2(a) of this
        Agreement; 

       

      (iv)  there
        shall have been no Material Adverse Effect with respect to the Company since
        the
        date hereof;

       

      (v)  the
        aggregate Closing Payments divided by the total number of shares to be issued
        to
        all Purchasers shall equal or exceed that amount of U.S. Dollars equivalent
        to
€4.50
        (based on the US$/€ exchange rate in effect as of the Closing Date); and

       

      (vi)  from
        the
        date hereof to the Closing Date, trading in the ADSs shall not have been
        suspended by the Commission or the Trading Market (except for any suspension
        of
        trading of limited duration agreed to by the Company, which suspension shall
        be
        terminated prior to the Closing), and, at any time prior to the Closing Date,
        trading in securities generally as reported by Bloomberg Financial Markets
        shall
        not have been suspended or limited, or minimum prices shall not have been
        established on securities whose trades are reported by such service, or on
        any
        Trading Market, nor shall a banking moratorium have been declared either
        by the
        United States or New York State authorities nor shall there have occurred
        any
        material outbreak or escalation of hostilities or other national or
        international calamity of such magnitude in its effect on, or any material
        adverse change in, any financial market which, in each case, in the reasonable
        judgment of each Purchaser, makes it impracticable or inadvisable to purchase
        the Shares at the Closing.

       

      
        
          
          

        

        
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      ARTICLE
        III.

      REPRESENTATIONS
        AND WARRANTIES

       

      3.1  Representations
        and Warranties of the Company.
        

       

      Except
        as
        set forth in the Disclosure Schedules, which Disclosure Schedules shall be
        deemed a part hereof, the Company hereby makes the representations and
        warranties set forth below to each Purchaser:

       

      (a)  Subsidiaries.
        All of
        the direct and indirect subsidiaries of the Company are set forth on
Schedule
        3.1(a).
        The
        Company owns, directly or indirectly, all of the capital stock or other equity
        interests of each Subsidiary free and clear of any Liens, and all the issued
        and
        outstanding shares of capital stock of each Subsidiary are validly issued
        and
        are fully paid, non-assessable and free of preemptive and similar rights
        to
        subscribe for or purchase securities. If the Company has no subsidiaries,
        then
        references in the Transaction Documents to the Subsidiaries will be
        disregarded.

       

      (b)  Organization
        and Qualification.
        The
        Company and each of the Subsidiaries is an entity duly incorporated or otherwise
        organized, validly existing and in good standing under the laws of the
        jurisdiction of its incorporation or organization (as applicable), with the
        requisite power and authority to own and use its properties and assets and
        to
        carry on its business as currently conducted. Neither the Company nor any
        Subsidiary is in violation or default of any of the provisions of its respective
        certificate or articles of incorporation, bylaws or other organizational
        or
        charter documents. Each of the Company and the Subsidiaries is duly qualified
        to
        conduct business and is in good standing as a foreign corporation or other
        entity in each jurisdiction in which the nature of the business conducted
        or
        property owned by it makes such qualification necessary, except where the
        failure to be so qualified or in good standing, as the case may be, could
        not
        have or reasonably be expected to result in (i) an adverse effect on the
        legality, validity or enforceability of any Transaction Document, (ii) a
        material adverse effect on the results of operations, assets, business,
        prospects or condition (financial or otherwise) of the Company and the
        Subsidiaries, taken as a whole, or (iii) an adverse effect on the Company’s
        ability to perform in any material respect on a timely basis its obligations
        under any Transaction Document (any of (i), (ii) or (iii), a “Material
        Adverse Effect”)
        and no
        Proceeding has been instituted in any such jurisdiction revoking, limiting
        or
        curtailing or seeking to revoke, limit or curtail such power and authority
        or
        qualification.

       

      (c)  Authorization;
        Enforcement.
        The
        Company has the requisite corporate power and authority to enter into and
        to
        consummate the transactions contemplated by each of the Transaction Documents
        and otherwise to carry out its obligations hereunder and thereunder. The
        execution and delivery of each of the Transaction Documents by the Company
        and
        the consummation by it of the transactions contemplated thereby have been
        duly
        authorized by all necessary action on the part of the Company and no further
        action is required by the Company, its board of directors or its stockholders
        in
        connection therewith other than in connection with the Required Approvals.
        Each
        Transaction Document has been (or upon delivery will have been) duly executed
        by
        the Company and, when delivered in accordance with the terms hereof and thereof,
        will constitute the valid and binding obligation of the Company enforceable
        against the Company in accordance with its terms except (i) as limited by
        applicable bankruptcy, insolvency, reorganization, moratorium and other laws
        of
        general application affecting enforcement of creditors’ rights generally and
        (ii) as limited by laws relating to the availability of specific performance,
        injunctive relief or other equitable remedies.

       

      
        
          
          

        

        
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      (d)  No
        Conflicts.
        The
        execution, delivery and performance of the Transaction Documents by the Company,
        the issuance and sale of the Common Stock represented by the Shares and
        represented by the ADRs and the consummation by the Company of the other
        transactions contemplated hereby and thereby do not and will not (i) conflict
        with or violate any provision of the Company’s or any Subsidiary’s certificate
        or articles of incorporation, bylaws or other organizational or charter
        documents, or (ii) conflict with, or constitute a default (or an event that
        with
        notice or lapse of time or both would become a default) under, result in
        the
        creation of any Lien upon any of the properties or assets of the Company
        or any
        Subsidiary, or give to others any rights of termination, amendment, acceleration
        or cancellation (with or without notice, lapse of time or both) of, any
        agreement, credit facility, debt or other instrument (evidencing a Company
        or
        Subsidiary debt or otherwise) or other understanding to which the Company
        or any
        Subsidiary is a party or by which any property or asset of the Company or
        any
        Subsidiary is bound or affected, or (iii) subject to the Required Approvals,
        conflict with or result in a violation of any law, rule, regulation, order,
        judgment, injunction, decree or other restriction of any court or governmental
        authority to which the Company or a Subsidiary is subject (including federal
        and
        state securities laws and regulations), or by which any property or asset
        of the
        Company or a Subsidiary is bound or affected; except in the case of each
        of
        clauses (ii) and (iii), such as could not have or reasonably be expected
        to
        result in a Material Adverse Effect.

       

      (e)  Filings,
        Consents and Approvals.
        The
        Company is not required to obtain any consent, waiver, authorization or order
        of, give any notice to, or make any filing or registration with, any court
        or
        other federal, state, local or other governmental authority or other Person
        in
        connection with the execution, delivery and performance by the Company of
        the
        Transaction Documents, other than (i) filings required pursuant to Section
        4.4
        of this Agreement, (ii) the filing with the Commission of the Registration
        Statement, (iii) application(s) to each applicable Trading Market for the
        listing of the Shares and Warrant Shares represented by the ADSs for trading
        thereon in the time and manner required thereby, and (iv) the filing of Form
        D
        with the Commission and such filings as are required to be made under applicable
        state securities laws (collectively, the “Required
        Approvals”).

       

      (f)  Issuance
        of the Securities.
        The
        Securities and the Common Stock underlying the Securities are duly authorized
        and, when issued and paid for in accordance with the applicable Transaction
        Documents, will be duly and validly issued, fully paid and nonassessable,
        free
        and clear of all Liens, other than any Liens imposed by the Purchasers and
        restrictions on transfer provided for in the Transaction Documents. The Warrant
        Shares and the Common Stock underlying the Warrant Shares, when issued in
        accordance with the terms of the Transaction Documents, will be validly issued,
        fully paid and nonassessable, free and clear of all Liens other than those
        imposed by the Purchasers. The Company has reserved from its duly authorized
        capital stock the maximum number of shares of Common Stock (including the
        associated ADSs) issuable pursuant to this Agreement and the Warrants. Upon
        the
        issuance by the Bank of New York, as Depositary, of ADRs representing ADSs
        that
        are Shares and Warrant Shares against the deposit of shares of Common Stock
        in
        accordance with the Deposit Agreement, such ADRs representing such ADSs will
        be
        duly and validly issued under the Deposit Agreement and the persons in whose
        names such ADRs representing such ADSs are registered will be entitled to
        the
        rights of the registered holders of ADRs representing ADSs specified therein
        and
        in the Deposit Agreement.

       

      
        
          
          

        

        
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      (g)  Capitalization.
        The
        capitalization of the Company is as set forth on Schedule
        3.1(g).
        The
        Company has not issued any capital stock or Common Stock Equivalents (including
        ADSs) since its most
        recently filed periodic report under the Exchange Act, other
        than pursuant to the exercise of employee stock options under the Company’s
        stock option plans, the issuance of shares of Common Stock to employees pursuant
        to the Company’s employee stock purchase plan and pursuant to the conversion or
        exercise of outstanding Common Stock Equivalents. No Person has any right
        of
        first refusal, preemptive right, right of participation, or any similar right
        to
        participate in the transactions contemplated by the Transaction Documents
        or
        otherwise in connection with the issuance and sale of the Securities. Except
        as
        a result of the purchase and sale of the Securities, there are no outstanding
        options, warrants, script rights to subscribe to, calls or commitments of
        any
        character whatsoever relating to, or securities, rights or obligations
        convertible into or exercisable or exchangeable for, or giving any Person
        any
        right to subscribe for or acquire, any shares of Common Stock or Common Stock
        Equivalents (including ADSs), or contracts, commitments, understandings or
        arrangements by which the Company or any Subsidiary is or may become bound
        to
        issue additional shares of Common Stock (including ADSs) or Common Stock
        Equivalents. The issuance and sale of the Securities will not obligate the
        Company to issue shares of Common Stock (including ADSs) or other securities
        to
        any Person (other than the Purchasers) and will not result in a right of
        any
        holder of Company securities or Common Stock Equivalents (including ADSs)
        to
        adjust the exercise, conversion, exchange or reset price under such securities.
        All of the outstanding shares of capital stock of the Company are validly
        issued, fully paid and nonassessable, have been issued in compliance with
        all
        federal and state securities laws, and none of such outstanding shares was
        issued in violation of any preemptive rights or similar rights to subscribe
        for
        or purchase securities. No further approval or authorization of any stockholder,
        the Board of Directors of the Company or others is required for the issuance
        and
        sale of the Securities. There are no stockholders agreements, voting agreements
        or other similar agreements with respect to the Company’s capital stock
        (including ADSs) to which the Company is a party or, to the knowledge of
        the
        Company, between or among any of the Company’s stockholders.

       

      (h)  SEC
        Reports; Financial Statements.
        The
        Company has filed all reports, schedules, forms, statements and other documents
        required to be filed by it under the Securities Act and the Exchange Act,
        including pursuant to Section 13(a) or 15(d) thereof, for the two years
        preceding the date hereof (or such shorter period as the Company was required
        by
        law to file such material) (the foregoing materials filed through the date
        hereof, including the exhibits thereto and documents incorporated by reference
        therein, being collectively referred to herein as the “SEC
        Reports”)
        on a
        timely basis or has received a valid extension of such time of filing and
        has
        filed any such SEC Reports prior to the expiration of any such extension.
        As of
        their respective dates, the SEC Reports complied in all material respects
        with
        the requirements of the Securities Act and the Exchange Act and the rules
        and
        regulations of the Commission promulgated thereunder, and none of the SEC
        Reports, when filed, contained any untrue statement of a material fact or
        omitted to state a material fact required to be stated therein or necessary
        in
        order to make the statements therein, in the light of the circumstances under
        which they were made, not misleading. The financial statements of the Company
        included in the SEC Reports comply in all material respects with applicable
        accounting requirements and the rules and regulations of the Commission with
        respect thereto as in effect at the time of filing. Such financial statements
        have been prepared in accordance with United States generally accepted
        accounting principles applied on a consistent basis during the periods involved
        (“GAAP”),
        except as may be otherwise specified in such financial statements or the
        notes
        thereto and except that unaudited financial statements may not contain all
        footnotes required by GAAP, and fairly present in all material respects the
        financial position of the Company and its consolidated subsidiaries as of
        and
        for the dates thereof and the results of operations and cash flows for the
        periods then ended, subject, in the case of unaudited statements, to normal,
        immaterial, year-end audit adjustments.

       

      
        
          
          

        

        
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      (i)  Material
        Changes.
        Since
        the date of the latest audited financial statements included within the SEC
        Reports, except as specifically disclosed in the SEC Reports, (i) there has
        been
        no event, occurrence or development that has had or that could reasonably
        be
        expected to result in a Material Adverse Effect, (ii) the Company has not
        incurred any liabilities (contingent or otherwise) other than trade payables
        and
        accrued expenses incurred in the ordinary course of business consistent with
        past practice, (iii) the Company has not altered its method of accounting,
        (iv)
        the Company has not declared or made any dividend or distribution of cash
        or
        other property (or its securities) to its stockholders or purchased, redeemed
        or
        made any agreements to purchase or redeem any shares of its capital stock
        and
        (v) the Company has not issued any equity securities to or Common Stock
        Equivalents to any Person (including to any officer, director or Affiliate),
        except pursuant to existing Company stock option plans. The Company does
        not
        have pending before the Commission any request for confidential treatment
        of
        information.

       

      (j)  Litigation.
        There
        is no action, suit, inquiry, notice of violation, proceeding or investigation
        pending or, to the knowledge of the Company, threatened against or affecting
        the
        Company, any Subsidiary or any of their respective properties before or by
        any
        court, arbitrator, governmental or administrative agency or regulatory authority
        (federal, state, county, local or foreign) (collectively, an “Action”)
        which
        (i) adversely affects or challenges the legality, validity or enforceability
        of
        any of the Transaction Documents or the Securities or (ii) could, if there
        were
        an unfavorable decision, have or reasonably be expected to result in a Material
        Adverse Effect. Neither the Company nor any Subsidiary, nor any director
        or
        officer thereof, is or has been the subject of any Action involving a claim
        of
        violation of or liability under federal or state securities laws or a claim
        of
        breach of fiduciary duty. There has not been, and to the knowledge of the
        Company, there is not pending or contemplated, any investigation by the
        Commission involving the Company or any current or former director or officer
        of
        the Company. The Commission has not issued any stop order or other order
        suspending the effectiveness of any registration statement filed by the Company
        or any Subsidiary under the Exchange Act or the Securities Act.

       

      
        
          
          

        

        
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      (k)  Labor
        Relations.
        No
        material labor dispute exists or, to the knowledge of the Company, is imminent
        with respect to any of the employees of the Company which could reasonably
        be
        expected to result in a Material Adverse Effect.

       

      (l)  Compliance.
        Neither
        the Company nor any Subsidiary is in default under or in violation of (and
        no
        event has occurred that has not been waived that, with notice or lapse of
        time
        or both, would result in a default by the Company or any Subsidiary under),
        nor
        has the Company or any Subsidiary received notice of a claim that it is in
        default under or that it is in violation of, (i) its articles of incorporation,
        articles of association, by-laws, or other organizational document, (ii)
        any
        indenture, loan or credit agreement or any other agreement or instrument
        to
        which it is a party or by which it or any of its properties is bound (whether
        or
        not such default or violation has been waived), (iii) any court, arbitrator
        or
        governmental body, or (iv) any statute, rule or regulation of any governmental
        authority, including without limitation all foreign, federal, state and local
        laws applicable to its business except in the case of (ii), (iii) or (iv)
        as
        could not have a Material Adverse Effect.

       

      (m)  Regulatory
        Permits.
        The
        Company and the Subsidiaries possess all certificates, authorizations and
        permits issued by the appropriate federal, state, local or foreign regulatory
        authorities necessary to conduct their respective businesses as described
        in the
        SEC Reports, except where the failure to possess such permits could not have
        or
        reasonably be expected to result in a Material Adverse Effect (“Material
        Permits”),
        and
        neither the Company nor any Subsidiary has received any notice of proceedings
        relating to the revocation or modification of any Material Permit.

       

      (n)  Title
        to Assets.
        The
        Company and the Subsidiaries have good and marketable title in fee simple
        to all
        real property owned by them that is material to the business of the Company
        and
        the Subsidiaries and good and marketable title in all personal property owned
        by
        them that is material to the business of the Company and the Subsidiaries,
        in
        each case free and clear of all Liens, except for Liens as do not materially
        affect the value of such property and do not materially interfere with the
        use
        made and proposed to be made of such property by the Company and the
        Subsidiaries and Liens for the payment of federal, state or other taxes,
        the
        payment of which is neither delinquent nor subject to penalties. Any real
        property and facilities held under lease by the Company and the Subsidiaries
        are
        held by them under valid, subsisting and enforceable leases with which the
        Company and the Subsidiaries are in compliance.

       

      (o)  Patents
        and Trademarks.
        The
        Company and the Subsidiaries have, or have rights to use, all patents, patent
        applications, trademarks, trademark applications, service marks, trade names,
        copyrights, licenses and other similar rights necessary or material for use
        in
        connection with their respective businesses and which the failure to so have
        could have a Material Adverse Effect (collectively, the “Intellectual
        Property Rights”).
        Neither the Company nor any Subsidiary has received a written notice that
        the
        Intellectual Property Rights used by the Company or any Subsidiary violates
        or
        infringes upon the rights of any Person. To the knowledge of the Company,
        all
        such Intellectual Property Rights are enforceable and there is no existing
        infringement by another Person of any of the Intellectual Property Rights
        of
        others.

       

      
        
          
          

        

        
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      (p)  Insurance.
        The
        Company and the Subsidiaries are insured by insurers of recognized financial
        responsibility against such losses and risks and in such amounts as are prudent
        and customary in the businesses in which the Company and the Subsidiaries
        are
        engaged, including, but not limited to, directors and officers insurance
        coverage at least equal to the aggregate Subscription Amount. To the best
        knowledge of the Company, such insurance contracts and policies are accurate
        and
        complete. Neither the Company nor any Subsidiary has any reason to believe
        that
        it will not be able to renew its existing insurance coverage as and when
        such
        coverage expires or to obtain similar coverage from similar insurers as may
        be
        necessary to continue its business without a significant increase in
        cost.

       

      (q)  Transactions
        With Affiliates and Employees.
        Except
        as set forth in the SEC Reports, none of the Affiliates, officers or directors
        of the Company and none of the employees of the Company is presently a party
        to
        any transaction with the Company or any Subsidiary (other than for services
        as
        employees, officers and directors), including any contract, agreement or
        other
        arrangement providing for the furnishing of services to or by, providing
        for
        rental of real or personal property to or from, or otherwise requiring payments
        to or from any Affiliate, officer, director or such employee or, to the
        knowledge of the Company, any entity in which any Affiliate, officer, director,
        or any such employee has a substantial interest or is an officer, director,
        trustee or partner, in each case in excess of $60,000 other than (i) for
        payment
        of salary or consulting fees for services rendered, (ii) reimbursement for
        expenses incurred on behalf of the Company and (iii) for other employee
        benefits, including stock option agreements under any stock option plan of
        the
        Company.

       

      (r)  Sarbanes-Oxley;
        Internal Accounting Controls. The
        Company is in material compliance with all provisions of the Sarbanes-Oxley
        Act
        of 2002 which are applicable to it as a foreign private issuer.

       

      (s)  Certain
        Fees.
        No
        brokerage or finder’s fees or commissions are or will be payable by the Company
        to any broker, financial advisor or consultant, finder, placement agent,
        investment banker, bank or other Person with respect to the transactions
        contemplated by the Transaction Documents. The Purchasers shall have no
        obligation with respect to any fees or with respect to any claims made by
        or on
        behalf of other Persons for fees of a type contemplated in this Section that
        may
        be due in connection with the transactions contemplated by the Transaction
        Documents.

       

      (t)  Private
        Placement.
        Assuming the accuracy of the Purchasers representations and warranties set
        forth
        in Section 3.2, no registration under the Securities Act is required for
        the
        offer and sale of the Securities by the Company to the Purchasers as
        contemplated hereby. The issuance and sale of the Securities hereunder does
        not
        contravene the rules and regulations of the Trading Market.

       

      
        
          
          

        

        
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      (u)  Investment
        Company.
        The
        Company is not, and is not an Affiliate of, and immediately after receipt
        of
        payment for the Securities, will not be or be an Affiliate of, an “investment
        company” within the meaning of the Investment Company Act of 1940, as amended.
        The Company shall conduct its business in a manner so that it will not become
        subject to the Investment Company Act.

       

      (v)  Registration
        Rights.
        Other
        than each of the Purchasers, no Person has any right to cause the Company
        to
        effect the registration under the Securities Act of any securities of the
        Company.

       

      (w)  Listing
        and Maintenance Requirements.
        The
        ADSs are registered pursuant to Section 12(g) of the Exchange Act and listed
        on
        the Trading Market, and the Company has taken no action designed to, or which
        to
        its knowledge is likely to have the effect of, terminating the registration
        of
        the ADSs under the Exchange Act or de-listing or suspending from trading
        the
        ADSs on the Trading Market nor has the Company received any notification
        that
        the Commission is contemplating terminating such registration. The Company
        has
        not, in the 12 months preceding the date hereof, received notice from any
        Trading Market on which the ADSs are or have been listed or quoted to the
        effect
        that the Company is not in compliance with the listing or maintenance
        requirements of such Trading Market. The Company is, and has no reason to
        believe that it will not in the foreseeable future continue to be, in compliance
        with all such listing and maintenance requirements.

       

      (x)  Application
        of Takeover Protections.
        The
        Company and its Board of Directors have taken all necessary action, if any,
        in
        order to render inapplicable any control share acquisition, business
        combination, poison pill (including any distribution under a rights agreement)
        or other similar anti-takeover provision under the Company’s Certificate of
        Incorporation (or similar charter documents) or the laws of its state of
        incorporation that is or could become applicable to the Purchasers as a result
        of the Purchasers and the Company fulfilling their obligations or exercising
        their rights under the Transaction Documents, including without limitation
        as a
        result of the Company’s issuance of the Securities and the Purchasers’ ownership
        of the Securities.

       

      (y)  Disclosure.
        The
        Company confirms that, to the knowledge of the Company, neither it nor any
        other
        Person acting on its behalf has provided any of the Purchasers or their agents
        or counsel with any information that constitutes or might constitute material,
        non-public information. The Company understands and confirms that the Purchasers
        will rely on the foregoing representations and covenants in effecting
        transactions in securities of the Company. All disclosure provided to the
        Purchasers regarding the Company, its business and the transactions contemplated
        hereby, including the Disclosure Schedules to this Agreement, furnished by
        or on
        behalf of the Company with respect to the representations and warranties
        made
        herein are true and correct with respect to such representations and warranties
        and do not contain any untrue statement of a material fact or omit to state
        any
        material fact necessary in order to make the statements made therein, in
        light
        of the circumstances under which they were made, not misleading. The Company
        acknowledges and agrees that no Purchaser makes or has made any representations
        or warranties with respect to the transactions contemplated hereby other
        than
        those specifically set forth in Section 3.2 hereof.

       

      
        
          
          

        

        
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      (z)  No
        Integrated Offering.
        Assuming
        the accuracy of the Purchasers’ representations and warranties set forth in
        Section 3.2, neither the Company, nor any of its affiliates, nor any Person
        acting on its or their behalf has, directly or indirectly, made any offers
        or
        sales of any security or solicited any offers to buy any security, under
        circumstances that would cause this offering of the Securities to be integrated
        with prior offerings by the Company for purposes of the Securities Act or
        any
        applicable shareholder approval provisions, including, without limitation,
        under
        the rules and regulations of any Trading Market on which any of the securities
        of the Company are listed or designated. 

       

      (aa)  Solvency.
        Based
        on the financial condition of the Company as of the Closing Date after giving
        effect to the receipt by the Company of the Closing Payments, (i) the Company’s
        fair saleable value of its assets exceeds the amount that will be required
        to be
        paid on or in respect of the Company’s existing debts and other liabilities
        (including known contingent liabilities) as they mature; (ii) the Company’s
        assets do not constitute unreasonably small capital to carry on its business
        for
        the current fiscal year as now conducted and as proposed to be conducted
        including its capital needs taking into account the particular capital
        requirements of the business conducted by the Company, and projected capital
        requirements and capital availability thereof; and (iii) the current cash
        flow
        of the Company, together with the proceeds the Company would receive, were
        it to
        liquidate all of its assets, after taking into account all anticipated uses
        of
        the cash, would be sufficient to pay all amounts on or in respect of its
        debt
        when such amounts are required to be paid. The Company does not intend to
        incur
        debts beyond its ability to pay such debts as they mature (taking into account
        the timing and amounts of cash to be payable on or in respect of its debt).
        The
        Company has no knowledge of any facts or circumstances which lead it to believe
        that it will file for reorganization or liquidation under the bankruptcy
        or
        reorganization laws of any jurisdiction within one year from the Closing
        Date.
        The SEC Reports set forth as of the dates thereof all outstanding secured
        and
        unsecured Indebtedness of the Company or any Subsidiary, or for which the
        Company or any Subsidiary has commitments. For the purposes of this Agreement,
        “Indebtedness”
shall
        mean (a) any liabilities for borrowed money or amounts owed in excess of
        $50,000
        (other than trade accounts payable incurred in the ordinary course of business),
        (b) all guaranties, endorsements and other contingent obligations in respect
        of
        Indebtedness of others, whether or not the same are or should be reflected
        in
        the Company’s balance sheet (or the notes thereto), except guaranties by
        endorsement of negotiable instruments for deposit or collection or similar
        transactions in the ordinary course of business; and (c) the present value
        of
        any lease payments
        in excess of $50,000 due under leases required to be capitalized in accordance
        with GAAP. Neither
        the Company nor any Subsidiary is in default with respect to any
        Indebtedness.

       

      (bb)  [Reserved]

       

      (cc)  Tax
        Status.
        Except
        for matters that would not, individually or in the aggregate, have or reasonably
        be expected to result in a Material Adverse Effect, the Company and each
        Subsidiary has filed all necessary federal, state and foreign income and
        franchise tax returns and has paid or accrued all taxes shown as due thereon,
        and the Company has no knowledge of a tax deficiency which has been asserted
        or
        threatened against the Company or any Subsidiary.

       

      
        
          
          

        

        
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      (dd)  No
        General Solicitation.
        Neither
        the Company nor any person acting on behalf of the Company has offered or
        sold
        any of the Securities by any form of general solicitation or general
        advertising. The Company has offered the Securities for sale only to the
        Purchasers and certain other “accredited investors” within the meaning of Rule
        501 under the Securities Act.

       

      (ee)  Foreign
        Corrupt Practices.
        Neither
        the Company, nor to the knowledge of the Company, any director, officer,
        employee, agent or other person acting on behalf of the Company, has (i)
        directly or indirectly, used any funds for unlawful contributions, gifts,
        entertainment or other unlawful expenses related to foreign or domestic
        political activity, (ii) made any unlawful payment to foreign or domestic
        government officials or employees or to any foreign or domestic political
        parties or campaigns from corporate funds, (iii) failed to disclose fully
        any
        contribution made by the Company (or made by any person acting on its behalf
        of
        which the Company is aware) which is in violation of law, or (iv) violated
        in
        any material respect any provision of the Foreign Corrupt Practices Act of
        1977,
        as amended.

       

      (ff)  Accountants.
        The
        Company’s accountants are set forth on Schedule
        3.1(ff)
        of the
        Disclosure Schedule. To the knowledge of the Company, such accountants, who
        the
        Company expects will express their opinion with respect to the financial
        statements to be included in the Company’s Annual Report on Form 20-F for the
        year ending December 31, 2005, are a registered public accounting firm as
        required by the Securities Act.

       

      (gg)  Acknowledgment
        Regarding Purchasers’ Subscription to Securities.
        The
        Company acknowledges and agrees that each of the Purchasers is acting solely
        in
        the capacity of an arm’s length purchaser with respect to the Transaction
        Documents and the transactions contemplated hereby. The Company further
        acknowledges that no Purchaser is acting as a financial advisor or fiduciary
        of
        the Company (or in any similar capacity) with respect to this Agreement and
        the
        transactions contemplated hereby and any advice given by any Purchaser or
        any of
        their respective representatives or agents in connection with this Agreement
        and
        the transactions contemplated hereby is merely incidental to the Purchasers’
purchase of the Securities. The Company further represents to each Purchaser
        that the Company’s decision to enter into this Agreement has been based solely
        on the independent evaluation of the transactions contemplated hereby by
        the
        Company and its representatives.

       

      (hh)  Acknowledgement
        Regarding Purchasers’ Trading Activity.
        Anything in this Agreement or elsewhere herein to the contrary notwithstanding
        (except for Sections 3.2(f) and 4.14 hereof), it is understood and agreed
        by the
        Company (i) that none of the Purchasers have been asked to agree, nor has
        any
        Purchaser agreed, to desist from purchasing or selling, long and/or short,
        securities of the Company (including the ADSs), or “derivative” securities based
        on securities issued by the Company or to hold the Securities for any specified
        term; (ii) that past or future open market or other transactions by any
        Purchaser, including Short Sales, and specifically including, without
        limitation, Short Sales or “derivative” transactions, before or after the
        closing of this or future private placement transactions, may negatively
        impact
        the market price of the Company’s publicly-traded securities (including the
        ADSs); (iii) that any Purchaser, and counter parties in “derivative”
transactions to which any such Purchaser is a party, directly or indirectly,
        presently may have a “short” position in the ADSs, and (iv) that each Purchaser
        shall not be deemed to have any affiliation with or control over any arm’s
        length counter-party in any “derivative” transaction. The
        Company further understands and acknowledges that (a) one or more Purchasers
        may
        engage in hedging activities at various times during the period that the
        Securities are outstanding and (b) such hedging activities (if any) could
        reduce
        the value of the existing stockholders' equity interests in the Company at
        and
        after the time that the hedging activities are being conducted.  The
        Company acknowledges that such aforementioned hedging activities do not
        constitute a breach of any of the Transaction Documents.

       

      
        
          
          

        

        
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      (ii)  Manipulation
        of Price. 
        The Company has not, and to its knowledge no one acting on its behalf has,
        (i)
        taken, directly or indirectly, any action designed to cause or to result
        in the
        stabilization or manipulation of the price of any security of the Company
        (including the ADSs) to facilitate the sale or resale of any of the Securities,
        (ii) sold, bid for, purchased, or, paid any compensation for soliciting
        purchases of, any of the Securities (other than for the placement agent’s
        placement of the Securities), or (iii) paid or agreed to pay to any person
        any
        compensation for soliciting another to purchase any other securities of the
        Company (including the ADSs).

       

      (jj)  Foreign
        Private Issuer.
        The
        Company qualifies as a “foreign private issuer” as such term is defined in the
        Securities Act.

       

      3.2  Representations
        and Warranties of the Purchasers.
        Each
        Purchaser hereby, for itself and for no other Purchaser, represents and warrants
        as of the date hereof and as of the Closing Date to the Company as
        follows:

       

      (a)  Organization;
        Authority.
        Such
        Purchaser is an entity duly organized, validly existing and in good standing
        under the laws of the jurisdiction of its organization with full right,
        corporate or partnership power and authority to enter into and to consummate
        the
        transactions contemplated by the Transaction Documents and otherwise to carry
        out its obligations hereunder and thereunder. The execution, delivery and
        performance by such Purchaser of the transactions contemplated by this Agreement
        have been duly authorized by all necessary corporate or similar action on
        the
        part of such Purchaser. Each Transaction Document to which it is a party
        has
        been duly executed by such Purchaser, and when delivered by such Purchaser
        in
        accordance with the terms hereof, will constitute the valid and legally binding
        obligation of such Purchaser, enforceable against it in accordance with its
        terms, except (i) as limited by general equitable principles and applicable
        bankruptcy, insolvency, reorganization, moratorium and other laws of general
        application affecting enforcement of creditors’ rights generally, (ii) as
        limited by laws relating to the availability of specific performance, injunctive
        relief or other equitable remedies and (iii) insofar as indemnification and
        contribution provisions may be limited by applicable law.

       

      
        
          
          

        

        
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      (b)  Own
        Account.
        Such
        Purchaser understands that the Securities are “restricted securities” and have
        not been registered under the Securities Act or any applicable state securities
        law and is acquiring the Securities as principal for its own account and
        not
        with a view to or for distributing or reselling such Securities or any part
        thereof in violation of the Securities Act or any applicable state securities
        law, has no present intention of distributing any of such Securities in
        violation of the Securities Act or any applicable state securities law and
        has
        no arrangement or understanding with any other persons regarding the
        distribution of such Securities (this representation and warranty not limiting
        such Purchaser’s right to sell the Securities pursuant to the Registration
        Statement or otherwise in compliance with applicable federal and state
        securities laws) in violation of the Securities Act or any applicable state
        securities law. Such Purchaser is acquiring the Securities hereunder in the
        ordinary course of its business. Such Purchaser does not have any agreement
        or
        understanding, directly or indirectly, with any Person to distribute any
        of the
        Securities.

       

      (c)  Purchaser
        Status.
        At the
        time such Purchaser was offered the Securities, it was, and at the date hereof
        it is, and on each date on which it exercises any Warrants, it will be either:
        (i) an “accredited investor” as defined in Rule 501(a)(1), (a)(2), (a)(3),
        (a)(7) or (a)(8) under the Securities Act or (ii) a “qualified institutional
        buyer” as defined in Rule 144A(a) under the Securities Act. Such Purchaser is
        not required to be registered as a broker-dealer under Section 15 of the
        Exchange Act. 

       

      (d)  Experience
        of Such Purchaser.
        Such
        Purchaser, either alone or together with its representatives, has such
        knowledge, sophistication and experience in business and financial matters
        so as
        to be capable of evaluating the merits and risks of the prospective investment
        in the Securities, and has so evaluated the merits and risks of such investment.
        Such Purchaser is able to bear the economic risk of an investment in the
        Securities and, at the present time, is able to afford a complete loss of
        such
        investment.

       

      (e)  General
        Solicitation.
        Such
        Purchaser is not purchasing the Securities as a result of any advertisement,
        article, notice or other communication regarding the Securities published
        in any
        newspaper, magazine or similar media or broadcast over television or radio
        or
        presented at any seminar or any other general solicitation or general
        advertisement.

       

      (f)  Short
        Sales and Confidentiality Prior To The Date Hereof.
        Other
        than the transaction contemplated hereunder, such Purchaser has not directly
        or
        indirectly, nor has any Person acting on behalf of or pursuant to any
        understanding with such Purchaser, executed any disposition, including Short
        Sales (but not including the location and/or reservation of borrowable shares
        of
        Common Stock represented by the ADSs), in the securities of the Company
        during the period commencing from September 19, 2005 until
        the
        date hereof (“Discussion
        Time”).
        Notwithstanding the foregoing, in the case of a Purchaser that is a
        multi-managed investment vehicle whereby separate portfolio managers manage
        separate portions of such Purchaser's assets and the portfolio managers have
        no
        direct knowledge of the investment decisions made by the portfolio managers
        managing other portions of such Purchaser's assets, the representation set
        forth
        above shall only apply with respect to the portion of assets managed by the
        portfolio manager that made the investment decision to purchase the Securities
        covered by this Agreement. Other than to other Persons party to this Agreement,
        such Purchaser has maintained the confidentiality of all disclosures made
        to it
        in connection with this transaction (including the existence and terms of
        this
        transaction).

       

      
        
          
          

        

        
          19

          
            

          

        

        
          
          

        

      

      The
        Company acknowledges and agrees that each Purchaser does not make or has
        not
        made any representations or warranties with respect to the transactions
        contemplated hereby other than those specifically set forth in this Section
        3.2.

       

      ARTICLE
        IV.

      OTHER
        AGREEMENTS OF THE PARTIES

       

      4.1  Transfer
        Restrictions.
        

       

      (a)  The
        Securities may only be disposed of in compliance with state and federal
        securities laws. In connection with any transfer of Securities other than
        pursuant to an effective registration statement or Rule 144, to the Company
        or
        to an affiliate of a Purchaser or in connection with a pledge as contemplated
        in
        Section 4.1(b), the Company and the Depositary may require the transferor
        thereof to provide to the Company and the Depositary an opinion of counsel
        selected by the transferor and reasonably acceptable to the Company and the
        Depositary, the form and substance of which opinion shall be reasonably
        satisfactory to the Company and the Depositary, to the effect that such transfer
        does not require registration of such transferred Securities under the
        Securities Act. As a condition of transfer, any such transferee shall agree
        in
        writing to be bound by the terms of this Agreement and shall have the rights
        of
        a Purchaser under this Agreement and the Registration Rights
        Agreement.

       

      (b)  The
        Purchasers agree to the imprinting, so long as is required by this Section
        4.1(b), of a legend on any of the Securities in the following form:

       

      THESE
        SECURITIES HAVE
        NOT
        BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES
        COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER
        THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY,
        MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
        STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION
        FROM,
        OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE
        SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES
        LAWS.

       

      The
        Company acknowledges and agrees that a Purchaser may from time to time pledge
        pursuant to a bona fide margin agreement with a registered broker-dealer
        or
        grant a security interest in some or all of the Securities to a financial
        institution that is an “accredited investor” as defined in Rule 501(a) under the
        Securities Act and who agrees to be bound by the provisions of this Agreement
        and the Registration Rights Agreement and, if required under the terms of
        such
        arrangement, such Purchaser may transfer pledged or secured Securities to
        the
        pledgees or secured parties. Such a pledge or transfer would not be subject
        to
        approval of the Company and no legal opinion of legal counsel of the pledgee,
        secured party or pledgor shall be required in connection therewith. Further,
        no
        notice shall be required of such pledge. At the appropriate Purchaser’s expense,
        the Company will execute and deliver such reasonable documentation as a pledgee
        or secured party of Securities may reasonably request in connection with
        a
        pledge or transfer of the Securities, including, if the Securities are subject
        to registration pursuant to the Registration Rights Agreement, the preparation
        and filing of any required prospectus supplement under Rule 424(b)(3) under
        the
        Securities Act or other applicable provision of the Securities Act to
        appropriately amend the list of Selling Stockholders thereunder.

       

      
        
          
          

        

        
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      (c)  ADRs
        evidencing the Shares and Warrant Shares shall not contain any legend (including
        the legend set forth in Section 4.1(b)), (i) while a registration statement
        (including the Registration Statement) covering the resale of such security
        is
        effective under the Securities Act, or (ii) following any sale of such Shares
        or
        Warrant Shares pursuant to Rule 144, or (iii) if such Shares or Warrant Shares
        are eligible for sale under Rule 144(k), or (iv) if such legend is not required
        under applicable requirements of the Securities Act (including judicial
        interpretations and pronouncements issued by the staff of the Commission).
        The
        Company shall cause its counsel to issue a legal opinion to the Company’s
        transfer agent promptly after the Effective Date if required by the Company’s
        transfer agent or the The Depositary of the Company, currently The Bank of
        New
        York, to effect the removal of the legend hereunder. If all or any portion
        of a
        Warrant is exercised at a time when there is an effective registration statement
        to cover the resale of the Warrant Shares, such Warrant Shares shall be issued
        free of all legends. The Company agrees that following the Effective Date
        or at
        such time as such legend is no longer required under this Section 4.1(c),
        it
        will, no later than three Trading Days following the delivery by a Purchaser
        to
        the Company or the Company’s transfer agent of a certificate representing Shares
        or Warrant Shares, as the case may be, issued with a restrictive legend (such
        third Trading Day, the “Legend
        Removal Date”),
        deliver or cause to be delivered to such Purchaser a certificate representing
        such shares that is free from all restrictive and other legends. The Company
        may
        not make any notation on its records or give instructions to any transfer
        agent
        or The Depositary of the Company that enlarge the restrictions on transfer
        set
        forth in this Section. Certificates for Securities subject to legend removal
        hereunder shall be transmitted by the transfer agent or The Depositary of
        the
        Company to the Purchasers by crediting the account of the Purchaser’s prime
        broker with the Depository Trust Company System.

       

      (d)  In
        addition to such Purchaser’s other available remedies, the Company shall pay to
        a Purchaser, in cash, as partial liquidated damages and not as a penalty,
        for
        each $1,000 of Shares or Warrant Shares (based on the VWAP of the ADSs on
        the
        date such Securities are submitted to the Company’s transfer agent) delivered
        for removal of the restrictive legend and subject to Section 4.1(c), $10
        per
        Trading Day (increasing to $20 per Trading Day five (5) Trading Days after
        such
        damages have begun to accrue) for each Trading Day after the Legend Removal
        Date
        until such certificate is delivered without a legend. Nothing herein shall
        limit
        such Purchaser’s right to pursue actual damages for the Company’s failure to
        deliver certificates representing any Securities as required by the Transaction
        Documents, and such Purchaser shall have the right to pursue all remedies
        available to it at law or in equity including, without limitation, a decree
        of
        specific performance and/or injunctive relief.

       

      
        
          
          

        

        
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      (e)  Each
        Purchaser, severally and not jointly with the other Purchasers, agrees that
        the
        removal of the restrictive legend from certificates representing Securities
        as
        set forth in this Section 4.1 is predicated upon the Company’s reliance that the
        Purchaser will sell any Securities pursuant to either the registration
        requirements of the Securities Act, including any applicable prospectus delivery
        requirements, or an exemption therefrom.

       

      (f)  Until
        the
        one year anniversary of the Effective Date, the Company shall not undertake
        a
        reverse or forward stock split or reclassification of the Common Stock
        (including the ADSs) without the prior written consent of the Purchasers
        holding
        a majority in interest of the Shares.

       

      4.2  Furnishing
        of Information.
        As long
        as any Purchaser owns Securities, the Company covenants to timely file (or
        obtain extensions in respect thereof and file within the applicable grace
        period) all reports required to be filed by the Company after the date hereof
        pursuant to the Exchange Act. As long as any Purchaser owns Securities, if
        the
        Company is not required to file reports pursuant to the Exchange Act, it
        will
        prepare and furnish to the Purchasers and make publicly available in accordance
        with Rule 144(c) such information as is required for the Purchasers to sell
        the
        Securities under Rule 144. The Company further covenants that it will take
        such
        further action as any holder of Securities may reasonably request, all to
        the
        extent required from time to time to enable such Person to sell such Securities
        without registration under the Securities Act within the limitation of the
        exemptions provided by Rule 144.

       

      4.3  Integration.
        The
        Company shall not sell, offer for sale or solicit offers to buy or otherwise
        negotiate in respect of any security (as defined in Section 2 of the Securities
        Act) that would be integrated with the offer or sale of the Securities in
        a
        manner that would require the registration under the Securities Act of the
        sale
        of the Securities to the Purchasers or that would be integrated with the
        offer
        or sale of the Securities for purposes of the rules and regulations of any
        Trading Market such that it would require shareholder approval prior to the
        closing of such other transaction unless shareholder approval is obtained
        before
        the closing of such subsequent transaction.

       

      4.4  Securities
        Laws Disclosure; Publicity.
        The
        Company shall, by 8:30 a.m. Eastern time on the Trading Day following the
        date
        hereof, issue a Current Report on Form 6-K, reasonably acceptable to each
        Purchaser disclosing the material terms of the transactions contemplated
        hereby,
        and shall attach the Transaction Documents thereto. The Company and each
        Purchaser shall consult with each other in issuing any other press releases
        with
        respect to the transactions contemplated hereby, and neither the Company
        nor any
        Purchaser shall issue any such press release or otherwise make any such public
        statement without the prior consent of the Company, with respect to any press
        release of any Purchaser, or without the prior consent of each Purchaser,
        with
        respect to any press release of the Company, which consent shall not
        unreasonably be withheld, except if such disclosure is required by law, in
        which
        case the disclosing party shall promptly provide the other party with prior
        notice of such public statement or communication. Notwithstanding the foregoing,
        the Company shall not publicly disclose the name of any Purchaser, or include
        the name of any Purchaser in any filing with the Commission or any regulatory
        agency or Trading Market, without the prior written consent of such Purchaser,
        except (i) as required by federal securities law in connection with the
        registration statement contemplated by the Registration Rights Agreement
        and
        (ii) to the extent such disclosure is required by law or Trading Market
        regulations, in which case the Company shall provide the Purchasers with
        prior
        notice of such disclosure permitted under subclause (i) or (ii).

       

      
        
          
          

        

        
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      4.5  Shareholder
        Rights Plan. No claim will be made or enforced by the Company or, to the
        knowledge of the Company, any other Person that any Purchaser is an “Acquiring
        Person” under any shareholder rights plan or similar plan or arrangement in
        effect or hereafter adopted by the Company, or that any Purchaser could be
        deemed to trigger the provisions of any such plan or arrangement, by virtue
        of
        receiving Securities under the Transaction Documents or under any other
        agreement between the Company and the Purchasers. The Company shall conduct
        its
        business in a manner so that it will not become subject to the Investment
        Company Act.

       

      4.6  Non-Public
        Information. The Company covenants and agrees that neither it nor any other
        Person acting on its behalf will provide any Purchaser or its agents or counsel
        with any information that the Company believes constitutes material non-public
        information, unless prior thereto such Purchaser shall have executed a written
        agreement regarding the confidentiality and use of such information. The
        Company
        understands and confirms that each Purchaser shall be relying on the foregoing
        representations in effecting transactions in securities of the
        Company.

       

      4.7  Use
        of
        Proceeds. Except as set forth on Schedule 4.7 attached hereto, the Company
        shall use the net proceeds from the sale of the Securities hereunder first
        for
        working capital purposes in connection with its development of Defribrotide
        and
        then for general working capital purposes and not for the satisfaction of
        any
        portion of the Company’s debt (other than payment of trade payables in the
        ordinary course of the Company’s business and prior practices), to redeem any
        Common Stock or Common Stock Equivalents or to settle any outstanding
        litigation.

       

      4.8  Reimbursement.
        If any Purchaser becomes involved in any capacity in any Proceeding by or
        against any Person who is a stockholder of the Company (except as a result
        of
        sales, pledges, margin sales and similar transactions by such Purchaser to
        or
        with any current stockholder), solely as a result of such Purchaser’s
        acquisition of the Securities under this Agreement, the Company will reimburse
        such Purchaser for its reasonable legal and other expenses (including the
        cost
        of any investigation preparation and travel in connection therewith) incurred
        in
        connection therewith, as such expenses are incurred. The reimbursement
        obligations of the Company under this paragraph shall be in addition to any
        liability which the Company may otherwise have, shall extend upon the same
        terms
        and conditions to any Affiliates of the Purchasers who are actually named
        in
        such action, proceeding or investigation, and partners, directors, agents,
        employees and controlling persons (if any), as the case may be, of the
        Purchasers and any such Affiliate, and shall be binding upon and inure to
        the
        benefit of any successors, assigns, heirs and personal representatives of
        the
        Company, the Purchasers and any such Affiliate and any such Person. The Company
        also agrees that neither the Purchasers nor any such Affiliates, partners,
        directors, agents, employees or controlling persons shall have any liability
        to
        the Company or any Person asserting claims on behalf of or in right of the
        Company solely as a result of acquiring the Securities under this
        Agreement.

       

      
        
          
          

        

        
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      4.9  Indemnification
        of Purchasers. Subject to the provisions of this Section 4.9, the Company
        will indemnify and hold the Purchasers and their directors, officers,
        shareholders, members, partners, employees and agents (each, a “Purchaser
        Party”) harmless from any and all losses, liabilities, obligations, claims,
        contingencies, damages, costs and expenses, including all judgments, amounts
        paid in settlements, court costs and reasonable attorneys’ fees and costs of
        investigation that any such Purchaser Party may suffer or incur as a result
        of
        or relating to (a) any breach of any of the representations, warranties,
        covenants or agreements made by the Company in this Agreement or in the other
        Transaction Documents or (b) any action instituted against a Purchaser, or
        any
        of them or their respective Affiliates, by any stockholder of the Company
        who is
        not an Affiliate of such Purchaser, with respect to any of the transactions
        contemplated by the Transaction Documents (unless such action is based upon
        a
        breach of such Purchaser’s representations, warranties or covenants under the
        Transaction Documents or any agreements or understandings such Purchaser
        may
        have with any such stockholder or any violations by the Purchaser of state
        or
        federal securities laws or any conduct by such Purchaser which constitutes
        fraud, gross negligence, willful misconduct or malfeasance). If any action
        shall
        be brought against any Purchaser Party in respect of which indemnity may
        be
        sought pursuant to this Agreement, such Purchaser Party shall promptly notify
        the Company in writing, and the Company shall have the right to assume the
        defense thereof with counsel of its own choosing. Any Purchaser Party shall
        have
        the right to employ separate counsel in any such action and participate in
        the
        defense thereof, but the fees and expenses of such counsel shall be at the
        expense of such Purchaser Party except to the extent that (i) the employment
        thereof has been specifically authorized by the Company in writing, (ii)
        the
        Company has failed after a reasonable period of time to assume such defense
        and
        to employ counsel or (iii) in such action there is, in the reasonable opinion
        of
        such separate counsel, a material conflict on any material issue between
        the
        position of the Company and the position of such Purchaser Party. The Company
        will not be liable to any Purchaser Party under this Agreement (i) for
        obligations pursuant to any settlement by a Purchaser Party effected without
        the
        Company’s prior written consent, which shall not be unreasonably withheld or
        delayed; or (ii) to the extent, but only to the extent that a loss, claim,
        damage or liability is attributable to any Purchaser Party’s breach of any of
        the representations, warranties, covenants or agreements made by the Purchasers
        in this Agreement or in the other Transaction Documents.

       

      4.10  Reservation
        of Common Stock.
        Upon the
        Warrant Issue Date, the Company will have reserved, and shall continue to
        reserve and keep available at all times, free of all preemptive or preferential
        rights, a sufficient number of shares of Common Stock for the purpose of
        enabling the Company to issue Warrant Shares pursuant to any exercise of
        the
        Warrants. 

       

      4.11  Listing
        of ADSs.
        The
        Company hereby agrees to use best efforts to maintain the listing of the
        ADSs on
        a Trading Market, and as soon as reasonably practicable following the Closing
        (but not later than the Effective Date) to list all of the ADSs constituting
        the
        Shares and Warrant Shares on such Trading Market. The Company further agrees,
        if
        the Company applies to have the Common Stock or other securities, represented
        by
        ADSs or otherwise, traded on any other Trading Market, it will include in
        such
        application all of the Shares and Warrant Shares, and will take such other
        action as is necessary to cause all of the Shares and Warrant Shares to be
        listed on such other Trading Market as promptly as possible. The Company
        will
        take all action reasonably necessary to continue the listing and trading
        of the
        ADSs representing its Common Stock on a Trading Market and will comply in
        all
        respects with the Company’s reporting, filing and other obligations under the
        bylaws or rules of the Trading Market.

       

      
        
          
          

        

        
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      4.12  Equal
        Treatment of Purchasers. No consideration shall be offered or paid to any
        person to amend or consent to a waiver or modification of any provision of
        any
        of the Transaction Documents unless the same consideration is also offered
        to
        all of the parties to the Transaction Documents. For clarification purposes,
        this provision constitutes a separate right granted to each Purchaser by
        the
        Company and negotiated separately by each Purchaser, and is intended to treat
        for the Company the Purchasers as a class and shall not in any way be construed
        as the Purchasers acting in concert or as a group with respect to the purchase,
        disposition or voting of Securities or otherwise.

       

      4.13  Subsequent
        Equity Sales. 

       

      (a)  Without
        the prior written consent of the Purchasers holding a majority in interest
        of
        the Shares, from the date hereof until 90 days after the Effective Date,
        neither
        the Company nor any Subsidiary shall issue shares of Common Stock or Common
        Stock Equivalents; provided, however, the 90 day period set forth in this
        Section 4.13 shall be extended for the number of Trading Days during such
        period
        in which (i) trading in the Common Stock or ADSs is suspended by any Trading
        Market, or (ii) following the Effective Date, the Registration Statement
        is not
        effective or the prospectus included in the Registration Statement may not
        be
        used by the Purchasers for the resale of the Shares and Warrant Shares.

       

      (b)  From
        the
        date hereof until such time as no Purchaser holds any of the Securities,
        the
        Company shall be prohibited from effecting or entering into an agreement
        to
        effect any Subsequent Financing involving a “Variable Rate Transaction”. The
        term “Variable
        Rate Transaction”
shall
        mean a transaction in which the Company issues or sells (i) any debt or equity
        securities that are convertible into, exchangeable or exercisable for, or
        include the right to receive additional shares of Common Stock either (A)
        at a
        conversion, exercise or exchange rate or other price that is based upon and/or
        varies with the trading prices of or quotations for the shares of ADSs at
        any
        time after the initial issuance of such debt or equity securities, or (B)
        with a
        conversion, exercise or exchange price that is subject to being reset at
        some
        future date after the initial issuance of such debt or equity security or
        upon
        the occurrence of specified or contingent events directly or indirectly related
        to the business of the Company or the market for the Common Stock or (ii)
        enters
        into any agreement, including, but not limited to, an equity line of credit,
        whereby the Company may sell securities at a future determined price. Any
        Purchaser shall be entitled to obtain injunctive relief against the Company
        to
        preclude any such issuance, which remedy shall be in addition to any right
        to
        collect damages. 

       

      (c)  Notwithstanding
        the foregoing, this Section 4.13 shall not apply in respect of an Exempt
        Issuance, except that no Variable Rate Transaction shall be an Exempt
        Issuance.

       

      
        
          
          

        

        
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      4.14  Short
        Sales and Confidentiality After The Date Hereof.
        Each
        Purchaser severally and not jointly with the other Purchasers covenants that
        neither it nor any affiliates acting on its behalf or pursuant to any
        understanding with it will execute any Short Sales during the period after
        the
        Discussion Time and ending at the time that the transactions contemplated
        by
        this Agreement are first publicly announced as described
        in
        Section 4.4. Each
        Purchaser, severally and not jointly with the other Purchasers, covenants
        that
        until such time as the transactions contemplated by this Agreement are publicly
        disclosed by the Company as described in Section 4.4, such Purchaser will
        maintain, the confidentiality of all disclosures made to it in connection
        with
        this transaction (including the existence and terms of this transaction).
        Each
        Purchaser understands and acknowledges, severally and not jointly with any
        other
        Purchaser, that the Commission currently takes the position that coverage
        of
        short sales of shares of the Common Stock “against the box” prior to the
        Effective Date of the Registration Statement with the Securities is a violation
        of Section 5 of the Securities Act, as set forth in Item 65, Section 5 under
        Section A, of the Manual of Publicly Available Telephone Interpretations,
        dated
        July 1997, compiled by the Office of Chief Counsel, Division of Corporation
        Finance. Notwithstanding
        the foregoing, no Purchaser makes any representation, warranty or covenant
        hereby that it will not engage in Short Sales in the securities of the Company
        (including the ADSs) after the time that the transactions contemplated by
        this
        Agreement are first publicly announced as described in Section 4.4. Notwithstanding
        the foregoing, in the case of a Purchaser that is a multi-managed investment
        vehicle whereby separate portfolio managers manage separate portions of such
        Purchaser's assets and the portfolio managers have no direct knowledge of
        the
        investment decisions made by the portfolio managers managing other portions
        of
        such Purchaser's assets, the covenant set forth above shall only apply with
        respect to the portion of assets managed by the portfolio manager that made
        the
        investment decision to purchase the Securities covered by this
        Agreement.

       

      4.15  [Reserved]

       

      4.16  Board
        Membership. The Company agrees to include in the agenda of a to-be-called
        general shareholders meeting, the election of one person designate by Great
        Point who is duly nominated according to the Voting Agreement as director,
        and,
        pursuant to Voting Agreement, Great Point shall continue to have the right
        to
        designate such a nominee director so long as Great Point and the investment
        funds it manages own ADSs purchased hereunder representing at least Five
        Percent
        (5%) of the Company's issued and outstanding Common Stock, and shall also
        have
        the right to remove and replace its designee during such time. FinSirton
        (the
        Ferro family holding company and a 46% shareholder of the Company’s Common
        Stock) will agree in writing to vote in favor of such board designee and
        his
        removal/replacement as requested by Great Point.

       

      ARTICLE
        V.

      MISCELLANEOUS

       

      5.1  Termination. 
        This Agreement may be terminated by any Purchaser, as to such Purchaser’s
        obligations hereunder only and without any effect whatsoever on the obligations
        between the Company and the other Purchasers, by written notice to the other
        parties, if the Closing has not been consummated on or before October 14,
        2005;
        provided, however, that no such termination will affect the right of any
        party
        to sue for any breach by the other party (or parties).

       

      
        
          
          

        

        
          26

          
            

          

        

        
          
          

        

      

      5.2  Fees
        and Expenses. Except for consulting, legal and other reasonable
        out-of-pocket expenses of Great Point related to its investment hereunder,
        including due diligence expenses (such amount not to exceed US$35,000; provided,
        however, that such amount may be increased by the mutual agreement of Great
        Point and the Company) or as otherwise expressly set forth in the Transaction
        Documents to the contrary, each party shall pay the fees and expenses of
        its
        advisers, counsel, accountants and other experts, if any, and all other expenses
        incurred by such party incident to the negotiation, preparation, execution,
        delivery and performance of this Agreement. The Company shall pay all transfer
        agent and fees and expenses of the Depositary, escrow fees, stamp taxes and
        other taxes and duties levied in connection with the delivery of any
        Securities.

       

      5.3  Entire
        Agreement. The Transaction Documents, together with the exhibits and
        schedules thereto, contain the entire understanding of the parties with respect
        to the subject matter hereof and supersede all prior agreements and
        understandings, oral or written, with respect to such matters, which the
        parties
        acknowledge have been merged into such documents, exhibits and
        schedules.

       

      5.4  Notices.
        Any and all notices or other communications or deliveries required or permitted
        to be provided hereunder shall be in writing and shall be deemed given and
        effective on the earliest of (a) the date of transmission, if such notice
        or
        communication is delivered via facsimile at the facsimile number set forth
        on
        the signature pages attached hereto prior to 5:30 p.m. (New York City time)
        on a
        Trading Day, (b) the next Trading Day after the date of transmission, if
        such
        notice or communication is delivered via facsimile at the facsimile number
        set
        forth on the signature pages attached hereto on a day that is not a Trading
        Day
        or later than 5:30 p.m. (New York City time) on any Trading Day, (c) the
        2nd
        Trading
        Day following the date of mailing, if sent by U.S. nationally recognized
        overnight courier service, or (d) upon actual receipt by the party to whom
        such
        notice is required to be given. The address for such notices and communications
        shall be as set forth on the signature pages attached hereto.

       

      5.5  Amendments;
        Waivers. No provision of this Agreement may be waived or amended except in a
        written instrument signed, in the case of an amendment, by the Company and
        each
        Purchaser or, in the case of a waiver, by the party against whom enforcement
        of
        any such waiver is sought. No waiver of any default with respect to any
        provision, condition or requirement of this Agreement shall be deemed to
        be a
        continuing waiver in the future or a waiver of any subsequent default or
        a
        waiver of any other provision, condition or requirement hereof, nor shall
        any
        delay or omission of either party to exercise any right hereunder in any
        manner
        impair the exercise of any such right.

       

      5.6  Headings.
        The headings herein are for convenience only, do not constitute a part of
        this
        Agreement and shall not be deemed to limit or affect any of the provisions
        hereof. The language used in this Agreement will be deemed to be the language
        chosen by the parties to express their mutual intent, and no rules of strict
        construction will be applied against any party.

       

      
        
          
          

        

        
          27

          
            

          

        

        
          
          

        

      

      5.7  Successors
        and Assigns. This Agreement shall be binding upon and inure to the benefit
        of the parties and their successors and permitted assigns. The Company may
        not
        assign this Agreement or any rights or obligations hereunder without the
        prior
        written consent of each Purchaser. Any Purchaser may assign any or all of
        its
        rights under this Agreement to any Person to whom such Purchaser assigns
        or
        transfers any Securities, provided such transferee agrees in writing to be
        bound, with respect to the transferred Securities, by the provisions hereof
        that
        apply to the “Purchasers”.

       

      5.8  No
        Third-Party Beneficiaries. This Agreement is intended for the benefit of the
        parties hereto and their respective successors and permitted assigns and
        is not
        for the benefit of, nor may any provision hereof be enforced by, any other
        Person, except as otherwise set forth in Section 4.9.

       

      5.9  Governing
        Law; Jurisdiction. All questions concerning the construction, validity,
        enforcement and interpretation of the Transaction Documents 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 this Agreement
        and
        any other Transaction Documents (whether brought against a party hereto 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. Each party 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 the Transaction
        Documents), and hereby irrevocably waives, and agrees not to assert in any
        suit,
        action or proceeding, any claim that it is not personally subject to the
        jurisdiction of any such court, that such suit, action or proceeding is improper
        or inconvenient venue for such proceeding. Each party 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 it under this 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. The parties hereby waive
        all
        rights to a trial by jury. If either party shall commence an action or
        proceeding to enforce any provisions of the Transaction Documents, then the
        prevailing party in such action or proceeding shall be reimbursed by the
        other
        party for its attorneys’ fees and other costs and expenses incurred with the
        investigation, preparation and prosecution of such action or proceeding.
        The
        Company hereby irrevocably appoints CT Corporation System, 111th 13th Avenue,
        New York, NY 10011, as its agent for the receipt of service of process in
        the
        United States. The Company agrees that any document may be effectively served
        on
        it in connection with any action, suit or proceeding in the United States
        by
        service on such agent.

       

      5.10  Survival.
        The representations and warranties contained herein shall survive the Closing
        and the delivery of the Shares and Warrant Shares.

       

      
        
          
          

        

        
          28

          
            

          

        

        
          
          

        

      

      5.11  Execution.
        This Agreement may be executed in two or more counterparts, all of which
        when
        taken together shall be considered one and the same agreement and shall become
        effective when counterparts have been signed by each party and delivered
        to the
        other party, it being understood that both parties need not sign the same
        counterpart. In the event that any signature is delivered by facsimile
        transmission, such signature shall create a valid and binding obligation
        of the
        party executing (or on whose behalf such signature is executed) with the
        same
        force and effect as if such facsimile signature page were an original
        thereof.

       

      5.12  Severability.
        If any provision of this Agreement is held to be invalid or unenforceable
        in any
        respect, the validity and enforceability of the remaining terms and provisions
        of this Agreement shall not in any way be affected or impaired thereby and
        the
        parties will attempt to agree upon a valid and enforceable provision that
        is a
        reasonable substitute therefor, and upon so agreeing, shall incorporate such
        substitute provision in this Agreement.

       

      5.13  Rescission
        and Withdrawal Right. Notwithstanding anything to the contrary contained in
        (and without limiting any similar provisions of) the Transaction Documents,
        whenever any Purchaser exercises a right, election, demand or option under
        a
        Transaction Document and the Company does not timely perform its related
        obligations within the periods therein provided, then such Purchaser may
        rescind
        or withdraw, in its sole discretion from time to time upon written notice
        to the
        Company, any relevant notice, demand or election in whole or in part without
        prejudice to its future actions and rights.

       

      5.14  Replacement
        of Securities. If any certificate or instrument evidencing any Securities is
        mutilated, lost, stolen or destroyed, the Company shall issue or cause to
        be
        issued in exchange and substitution for and upon cancellation thereof, or
        in
        lieu of and substitution therefor, a new certificate or instrument, but only
        upon receipt of evidence reasonably satisfactory to the Company of such loss,
        theft or destruction and customary and reasonable indemnity, if requested.
        The
        applicants for a new certificate or instrument under such circumstances shall
        also pay any reasonable third-party costs associated with the issuance of
        such
        replacement Securities.

       

      5.15  Remedies.
        In addition to being entitled to exercise all rights provided herein or granted
        by law, including recovery of damages, each of the Purchasers and the Company
        will be entitled to specific performance under the Transaction Documents.
        The
        parties agree that monetary damages may not be adequate compensation for
        any
        loss incurred by reason of any breach of obligations described in the foregoing
        sentence and hereby agrees to waive in any action for specific performance
        of
        any such obligation the defense that a remedy at law would be
        adequate.

       

      5.16  Payment
        Set Aside. To the extent that the Company makes a payment or payments to any
        Purchaser pursuant to any Transaction Document or a Purchaser enforces or
        exercises its rights thereunder, and such payment or payments or the proceeds
        of
        such enforcement or exercise or any part thereof are subsequently invalidated,
        declared to be fraudulent or preferential, set aside, recovered from, disgorged
        by or are required to be refunded, repaid or otherwise restored to the Company,
        a trustee, receiver or any other person under any law (including, without
        limitation, any bankruptcy law, state or federal law, common law or equitable
        cause of action), then to the extent of any such restoration the obligation
        or
        part thereof originally intended to be satisfied shall be revived and continued
        in full force and effect as if such payment had not been made or such
        enforcement or setoff had not occurred.

       

      
        
          
          

        

        
          29

          
            

          

        

        
          
          

        

      

      5.17  Independent
        Nature of Purchasers’ Obligations and Rights. The obligations of each
        Purchaser under any Transaction Document are several and not joint with the
        obligations of any other Purchaser, and no Purchaser shall be responsible
        in any
        way for the performance of the obligations of any other Purchaser under any
        Transaction Document. Nothing contained herein or in any Transaction Document,
        and no action taken by any Purchaser pursuant thereto, shall be deemed to
        constitute the Purchasers as a partnership, an association, a joint venture
        or
        any other kind of entity, or create a presumption that the Purchasers are
        in any
        way acting in concert or as a group with respect to such obligations or the
        transactions contemplated by the Transaction Documents. Each Purchaser shall
        be
        entitled to independently protect and enforce its rights, including without
        limitation, the rights arising out of this Agreement or out of the other
        Transaction Documents, and it shall not be necessary for any other Purchaser
        to
        be joined as an additional party in any proceeding for such purpose. Each
        Purchaser has been represented by its own separate legal counsel in their
        review
        and negotiation of the Transaction Documents. For reasons of administrative
        convenience only, Purchasers and their respective counsel have chosen to
        communicate with the Company through FW. FW does not represent the Purchasers
        but only Rodmen & Renshaw, LLC, who has acted as placement agent to the
        transaction. The Company has elected to provide all Purchasers with the same
        terms and Transaction Documents for the convenience of the Company and not
        because it was required or requested to do so by the Purchasers.

       

      5.18  Liquidated
        Damages. The Company’s obligations to pay any partial liquidated damages or
        other amounts owing under the Transaction Documents is a continuing obligation
        of the Company and shall not terminate until all unpaid partial liquidated
        damages and other amounts have been paid notwithstanding the fact that the
        instrument or security pursuant to which such partial liquidated damages
        or
        other amounts are due and payable shall have been canceled.

       

      5.19  Construction.
        The parties agree that each of them and/or their respective counsel has reviewed
        and had an opportunity to revise the Transaction Documents and, therefore,
        the
        normal rule of construction to the effect that any ambiguities are to be
        resolved against the drafting party shall not be employed in the interpretation
        of the Transaction Documents or any amendments hereto.

       

      (Signature
        Pages Follow)

       

      
        
          
          

        

        
          30

          
            

          

        

        
          
          

        

      

      IN
        WITNESS WHEREOF, the parties hereto have caused this Securities Subscription
        Agreement to be duly executed by their respective authorized signatories
        as of
        the date first indicated above.

       

      
        	GENTIUM S.p.A.	 	 	
                Address
                  for Notice:

              
	 	 	 	 	 
	 	 	 	 	 
	By:	/s/ Laura
                Ferro	 	 	 
	 	
                

                Name:
                  Laura Ferro

                Title:
                  Chief Executive Officer and President

              	 	 	
                Gentium
                  S.p.A. 

                ATTN:
                  Dr. Laura Ferro, 

                Chief
                  Executive Officer

                Piazze
                  XX Septembre, 2

                22079
                  Villa Guardia

                Como,
                  Italy

              
	 	 	 	 	 
	With a copy to (which
                shall not
                constitute notice):	 	 	
                Cary
                  Grossman

                9821
                  Katy Freeway, Suite 500

                Houston,
                  TX 77024

              

      

       

      
        
          
          

        

        
          31

          
            

          

        

        
          
          

        

      

      [REMAINDER
        OF PAGE INTENTIONALLY LEFT BLANK

      SIGNATURE
        PAGE FOR PURCHASER FOLLOWS]

      [PURCHASER
        SIGNATURE PAGES TO GNT SECURITIES SUBSCRIPTION AGREEMENT]

      

      IN
        WITNESS WHEREOF, the undersigned have caused this Securities Subscription
        Agreement to be duly executed by their respective authorized signatories
        as of
        the date first indicated above.

       

      Name
        of
        Purchaser: ________________________________________________________

      Signature
        of Authorized Signatory of Purchaser:
        _________________________________

      Name
        of
        Authorized Signatory:
        _______________________________________________

      Title
        of
        Authorized Signatory:
        ________________________________________________

      Email
        Address of
        Purchaser:__________________________________________________

      

      Address
        for Notice of Purchaser:

      

      Address
        for Delivery of Securities for Purchaser (if not same as above):

      

      

      Subscription
        Amount:

      Shares:

      Warrant
        Shares:

      EIN
        Number: [PROVIDE
        THIS UNDER SEPARATE COVER]

      

      [SIGNATURE
        PAGES CONTINUE]

       

      
        
          
          

        

        
          32NEITHER
        THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS EXERCISABLE
        HAVE
        BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES
        COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER
        THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY,
        MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
        STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION
        FROM,
        OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE
        SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES
        LAWS.

      

      

      AMERICAN
        DEPOSITARY SHARES PURCHASE WARRANT

      

      To
        Purchase __________ American Depositary Shares,

       

      each
        representing one share of Common Stock of

       

      GENTIUM
        S.p.A.

       

      THIS
        AMERICAN DEPOSITARY SHARE PURCHASE WARRANT (the “Warrant”)
        certifies that, for value received, _____________ (the “Holder”),
        is
        entitled, upon the terms and subject to the limitations on exercise and the
        conditions hereinafter set forth, at any time on or after March ___, 2006
        (the
“Initial
        Exercise Date”)
        and on
        or prior to the close of business on the five-year anniversary of the Initial
        Exercise Date (the “Termination
        Date”)
        but
        not thereafter, to subscribe for and purchase from Gentium S.p.A., an Italian
        corporation (the “Company”),
        up to
        ______ American Depositary Shares, (the “Warrant
        Shares”)
        each
        representing one share of Common Stock, par value €1.00 per share, of the
        Company (the “Common
        Stock”),
        which
        American Depositary Shares (“ADSs”)
        will
        be issued pursuant to the Deposit Agreement, dated June 15, 2005, with Bank
        of
        New York, as Depositary. The Warrant Shares shall be evidenced by American
        Depositary Receipts (“ADRs”).
        Each
        ADS shall represent one share of Common Stock, and such ratio shall be deemed
        to
        be maintained for all purposes hereunder, and to the extent such ratio is
        not
        maintained, the adjustments pursuant to Section 3 hereof shall be adjusted
        to
        take into account any such change to such ratio. The purchase price of one
        ADS
        under this Warrant shall be equal to the Exercise Price, as defined in Section
        2(b). This Warrant shall only be effective upon the Shareholder Approval.
        Not
        withstanding the foregoing, all time periods measured hereunder shall begin
        at
        the Closing Date. 

       

       

      Section
        1.     
        Definitions.
        Capitalized terms used and not otherwise defined herein shall have the meanings
        set forth in that certain Securities Subscription Agreement (the “Purchase
        Agreement”),
        dated
        October 2, 2005, among the Company and the purchasers signatory
        thereto.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      Section
        2.     
        Exercise.

       

      a)  Exercise
        of Warrant.
        Exercise of the purchase rights represented by this Warrant may be made,
        in
        whole or in part (provided that the exercise is for at least that number
        of
        shares of Common Stock represented by one ADS), at any time or times on or
        after
        the Initial Exercise Date and on or before the Termination Date by delivery
        to
        the Company’s agent in the United States, currently ____________________, of a
        duly executed facsimile copy of the Notice of Exercise Form annexed hereto
        (or
        such other office or agency of the Company in the United States as it may
        designate by notice in writing to the registered Holder at the address of
        such
        Holder appearing on the books of the Company); provided,
        however,
        within
        5 Trading Days of the date said Notice of Exercise is delivered to the Company,
        if this Warrant is exercised in full, the Holder shall have surrendered this
        Warrant to the Company and the Company shall have received payment of the
        aggregate Exercise Price of the shares thereby purchased by wire transfer
        or
        cashier’s check drawn on a United States bank. Notwithstanding anything herein
        to the contrary, the Holder shall not be required to physically surrender
        this
        Warrant to the Company’s agent until the Holder has purchased all of the Warrant
        Shares available hereunder and the Warrant has been exercised in full. Partial
        exercises of this Warrant resulting in purchases of a portion of the total
        number of Warrant Shares available hereunder shall have the effect of lowering
        the outstanding number of Warrant Shares purchasable hereunder in an amount
        equal to the applicable number of Warrant Shares purchased. The Holder and
        the
        Company shall maintain records showing the number of Warrant Shares purchased
        and the date of such purchases. The Company shall deliver any objection to
        any
        Notice of Exercise Form within 1 Trading Day of receipt of such notice. In
        the
        event of any dispute or discrepancy, the records of the Holder shall be
        controlling and determinative in the absence of manifest error. The Holder
        and
        any assignee, by acceptance of this Warrant, acknowledge and agree that,
        by
        reason of the provisions of this paragraph, following the purchase of a portion
        of the Warrant Shares hereunder, the number of Warrant Shares available for
        purchase hereunder at any given time may be less than the amount stated on
        the
        face hereof.

       

      b)  Exercise
        Price.
        The
        exercise price under this Warrant shall be $9.69, subject to adjustment
        hereunder (the “Exercise
        Price”).

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      c)  [Holder’s
        Restrictions.
        The
        Company shall not effect any exercise of this Warrant, and a 
        Holder
        shall not have the right to exercise any portion of this Warrant, to the
        extent
        that after giving effect to such issuance after exercise, such Holder (together
        with such Holder’s affiliates, and any other person or entity acting as a group
        together with such Holder or any of such Holder’s affiliates), as set forth on
        the applicable Notice of Exercise, would beneficially own in excess of 4.99%
        of
        the number of shares of the Common Stock outstanding immediately after giving
        effect to such issuance.  For purposes of the foregoing sentence, the
        number of shares of Common Stock beneficially owned by such Holder and its
        affiliates shall include the number of shares of Common Stock issuable upon
        exercise of this Warrant with respect to which the determination of such
        sentence is being made, but shall exclude the number of shares of Common
        Stock
        which would be issuable upon (A) exercise of the remaining, nonexercised
        portion
        of this Warrant beneficially owned by such Holder or any of its affiliates
        and
        (B) exercise or conversion of the unexercised or nonconverted portion of
        any
        other securities of the Company (including, without limitation, any other
        Preferred Stock or Warrants) subject to a limitation on conversion or exercise
        analogous to the limitation contained herein beneficially owned by such Holder
        or any of its affiliates.  Except as set forth in the preceding sentence,
        for purposes of this Section 2(c)(i), beneficial ownership shall be calculated
        in accordance with Section 13(d) of the Exchange Act and the rules and
        regulations promulgated thereunder, it being acknowledged by a Holder that
        the
        Company is not representing to such Holder that such calculation is in
        compliance with Section 13(d) of the Exchange Act and such Holder is solely
        responsible for any schedules required to be filed in accordance therewith.
        To
        the extent that the limitation contained in this Section 2(c) applies, the
        determination of whether this Warrant is exercisable (in relation to other
        securities owned by such Holder) and of which a portion of this Warrant is
        exercisable shall be in the sole discretion of a Holder, and the submission
        of a
        Notice of Exercise shall be deemed to be each Holder’s determination of whether
        this Warrant is exercisable (in relation to other securities owned by such
        Holder) and of which portion of this Warrant is exercisable, in each case
        subject to such aggregate percentage limitation, and the Company shall have
        no
        obligation to verify or confirm the accuracy of such determination. In addition,
        a determination as to any group status as contemplated above shall be determined
        in accordance with Section 13(d) of the Exchange Act and the rules and
        regulations promulgated thereunder. For purposes of this Section 2(c), in
        determining the number of outstanding shares of Common Stock, a Holder may
        rely
        on the number of outstanding shares of Common Stock as reflected in (x) the
        Company’s Form F-1, as amended, (y) a more recent public announcement by the
        Company or (z) any other notice by the Company or the Company’s Transfer Agent
        setting forth the number of shares of Common Stock outstanding.  Upon the
        written or oral request of a Holder, the Company shall within two Trading
        Days
        confirm orally and in writing to such Holder the number of shares of Common
        Stock then outstanding.  In any case, the number of outstanding shares of
        Common Stock shall be determined after giving effect to the conversion or
        exercise of securities of the Company, including this Warrant, by such Holder
        or
        its affiliates since the date as of which such number of outstanding shares
        of
        Common Stock was reported. The
        provisions of this paragraph shall be implemented in a manner otherwise than
        in
        strict conformity with the terms of this Section 2(c) to correct this paragraph
        (or any portion hereof) which may be defective or inconsistent with the intended
        4.99% beneficial ownership limitation herein contained or to make changes
        or
        supplements necessary or desirable to properly give effect to such 4.99%
        limitation. The limitations contained in this paragraph shall apply to a
        successor holder of this Warrant. The holders of Common Stock of the Company
        shall be third party beneficiaries of this Section 2(c) and the Company may
        not
        waive this Section 2(c) without the consent of holders of a majority of its
        Common Stock.][NOTE:
        This Section 2(c) may be excluded at the option of each
        Purchaser]  

       

      d)  Mechanics
        of Exercise.
        

       

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

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      ii.  Delivery
        of Certificates Upon Exercise.
        ADSs
        representing shares purchased hereunder shall be transmitted to the Holder
        by
        crediting the account of the Holder’s prime broker with the Depository Trust
        Company through its Deposit Withdrawal Agent Commission (“DWAC”)
        system, if available, and otherwise by physical delivery of the ADRs
        representing such Warrant Shares to the address specified by the Holder in
        the
        Notice of Exercise within 3 Trading Days from the delivery to the Company
        of the
        Notice of Exercise Form, surrender of this Warrant (if required) and payment
        of
        the aggregate Exercise Price as set forth above (“Warrant
        Share Delivery Date”).
        This
        Warrant shall be deemed to have been exercised on the date the Exercise Price
        is
        received by the Company. The Warrant Shares (represented by the ADRs) shall
        be
        deemed to have been issued, and Holder or any other person so designated
        to be
        named therein shall be deemed to have become a holder of record of such shares
        for all purposes, as of the date the Warrant has been exercised by payment
        to
        the Company of the Exercise Price and all taxes required to be paid by the
        Holder, if any, pursuant to Section 2(d)(vii) prior to the issuance of such
        shares, have been paid. 

       

      iii.  Delivery
        of New Warrants Upon Exercise.
        If this
        Warrant shall have been exercised in part, the Company shall, at the request
        of
        a Holder and upon surrender of this Warrant certificate, at the time of delivery
        of the certificate or certificates representing Warrant Shares, deliver to
        Holder a new Warrant evidencing the rights of Holder to purchase the unpurchased
        Warrant Shares called for by this Warrant, which new Warrant shall in all
        other
        respects be identical with this Warrant.

       

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

       

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

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

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

       

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

       

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

       

      e)  Call
        Provision.
        Subject
        to the provisions of Section 2(c) and this Section 2(e), if, after the Effective
        Date (i) the VWAP for each of 30 consecutive Trading Days (the “Measurement
        Period”,
        which
        30 Trading Day period shall not have commenced until after the Effective
        Date)
        exceeds $21.00 (subject to adjustment for forward and reverse stock splits,
        recapitalizations, stock dividends and the like after the Initial Exercise
        Date)
        (the “Threshold
        Price”)
        and
        (ii) the average daily volume for any Threshold Period, which Threshold Period
        shall have commenced only after the Effective Date, exceeds 50,000 ADSs per
        Trading Day (subject to adjustment for forward and reverse stock splits,
        recapitalizations, stock dividends and the like after the Initial Exercise
        Date), then the Company may, within five Trading Days of the end of such
        period,
        elect to effect a mandatory exercise of all or any portion of this Warrant
        for
        which a Notice of Exercise has not yet been delivered (such right, a
“Call”).
        To
        exercise this right, the Company must deliver to the Holder an irrevocable
        written notice (a “Call
        Notice”),
        indicating therein the portion of unexercised portion of this Warrant to
        which
        such notice applies. Upon delivery of such Call Notice, all or any unexercised
        portion of this Warrant shall be deemed converted into Warrant Shares at
        6:30
        p.m. (New York City time) on the tenth Trading Day after the date the Call
        Notice is received by the Holder (such date, the “Call
        Date”).
        

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      Section
        3.     
        Certain Adjustments.
        

       

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

       

      b)  Subsequent
        Equity Sales.
        If the
        Company or any Subsidiary thereof, as applicable, at any time while this
        Warrant
        is outstanding, shall offer, sell, grant any option to purchase or offer,
        sell
        or grant any right to reprice its securities, or otherwise dispose of or
        issue
        (or announce any offer, sale, grant or any option to purchase or other
        disposition) any Common Stock or Common Stock Equivalents entitling any Person
        to acquire shares of Common Stock, at an effective price per share less than
        the
        then Exercise Price (such lower price, the “Base
        Share Price”
and
        such issuances collectively, a “Dilutive
        Issuance”),
        as
        adjusted hereunder (if the holder of the Common Stock or Common Stock
        Equivalents so issued shall at any time, whether by operation of purchase
        price
        adjustments, reset provisions, floating conversion, exercise or exchange
        prices
        or otherwise, or due to warrants, options or rights per share which is issued
        in
        connection with such issuance, be entitled to receive shares of Common Stock
        at
        an effective price per share which is less than the Exercise Price, such
        issuance shall be deemed to have occurred for less than the Exercise Price
        on
        such date of the Dilutive Issuance), then the Exercise Price shall be reduced
        and only reduced to equal the Base Share Price and the number of Warrant
        Shares
        issuable hereunder shall be increased such that the aggregate Exercise Price
        payable hereunder, after taking into account the decrease in the Exercise
        Price,
        shall be equal to the aggregate Exercise Price prior to such adjustment;
        provided,
        however,
        the
        Exercise Price shall not be adjusted pursuant to this Section 3(b) to less
        than
        $____1,
        subject
        to adjustment for reverse and forward stock splits, stock dividends, stock
        combinations and other similar transactions of the Common Stock that occur
        after
        the date of this Agreement. Such adjustment shall be made whenever such Common
        Stock or Common Stock Equivalents are issued. Notwithstanding the foregoing,
        no
        adjustments shall be made, paid or issued under this Section 3(b) in respect
        of
        an Exempt Issuance. The Company shall notify the Holder in writing, no later
        than the Trading Day following the issuance of any Common Stock or Common
        Stock
        Equivalents subject to this section, indicating therein the applicable issuance
        price, or of applicable reset price, exchange price, conversion price and
        other
        pricing terms (such notice the “Dilutive
        Issuance Notice”).
        For
        purposes of clarification, whether or not the Company provides a Dilutive
        Issuance Notice pursuant to this Section 3(b), upon the occurrence of any
        Dilutive Issuance, after the date of such Dilutive Issuance the Holder is
        entitled to receive a number of Warrant Shares based upon the Base Share
        Price
        regardless of whether the Holder accurately refers to the Base Share Price
        in
        the Notice of Exercise. 

       

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

       

      
        
          

        

      

      
        1
          One
          percent above the closing bid price of the ADSs on AMEX immediately prior
          to the
          date of the Purchase Agreement.

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

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

       

      e)  Calculations.
        All
        calculations under this Section 3 shall be made to the nearest cent or the
        nearest 1/100th of a share, as the case may be. For purposes of this Section
        3,
        the number of shares of Common Stock deemed to be issued and outstanding
        as of a
        given date shall be the sum of the number of shares of Common Stock (excluding
        treasury shares, if any) issued and outstanding.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

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

       

      g)  Notice
        to Holders.
        

       

      i.  Adjustment
        to Exercise Price.
        Whenever the Exercise Price is adjusted pursuant to this Section 3, the Company
        shall promptly mail to each Holder a notice setting forth the Exercise Price
        after such adjustment and setting forth a brief statement of the facts requiring
        such adjustment. If the Company issues a variable rate security, despite
        the
        prohibition thereon in the Purchase Agreement, the Company shall be deemed
        to
        have issued Common Stock or Common Stock Equivalents at the lowest possible
        conversion or exercise price at which such securities may be converted or
        exercised in the case of a Variable Rate Transaction.

       

      ii.  Notice
        to Allow Exercise by Holder.
        If (A)
        the Company shall declare a dividend (or any other distribution) on the Common
        Stock; (B) the Company shall declare a special nonrecurring cash dividend
        on or
        a redemption of the Common Stock; (C) the Company shall authorize the granting
        to all holders of the Common Stock rights or warrants to subscribe for or
        purchase any shares of capital stock of any class or of any rights; (D) the
        approval of any stockholders of the Company shall be required in connection
        with
        any reclassification of the Common Stock, any consolidation or merger to
        which
        the Company is a party, any sale or transfer of all or substantially all
        of the
        assets of the Company, of any compulsory share exchange whereby the Common
        Stock
        is converted into other securities, cash or property; (E) the Company shall
        authorize the voluntary or involuntary dissolution, liquidation or winding
        up of
        the affairs of the Company; then, in each case, the Company shall cause to
        be
        mailed to the Holder at its last address as it shall appear upon the Warrant
        Register of the Company, at least 30 calendar days prior to the applicable
        record or effective date hereinafter specified, a notice stating (x) the
        date on
        which a record is to be taken for the purpose of such dividend, distribution,
        redemption, rights or warrants, or if a record is not to be taken, the date
        as
        of which the holders of the Common Stock of record to be entitled to such
        dividend, distributions, redemption, rights or warrants are to be determined
        or
        (y) the date on which such reclassification, consolidation, merger, sale,
        transfer or share exchange is expected to become effective or close, and
        the
        date as of which it is expected that holders of the Common Stock of record
        shall
        be entitled to exchange their shares of the Common Stock for securities,
        cash or
        other property deliverable upon such reclassification, consolidation, merger,
        sale, transfer or share exchange; provided,
        that
        the failure to mail such notice or any defect therein or in the mailing thereof
        shall not affect the validity of the corporate action required to be specified
        in such notice. The Holder is entitled to exercise this Warrant during the
        30
        day period commencing on the date of such notice to the effective date of
        the
        event triggering such notice.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      Section
        4.     
        Transfer
        of Warrant.

       

      a)  Transferability.
        Subject
        to compliance with any applicable securities laws and the conditions set
        forth
        in Sections 5(a) and 4(d) hereof and to the provisions of Section 4.1 of
        the
        Purchase Agreement, this Warrant and all rights hereunder are transferable,
        in
        whole or in part, upon surrender of this Warrant at the principal office
        of the
        Company, together with a written assignment of this Warrant substantially
        in the
        form attached hereto duly executed by the Holder or its agent or attorney
        and
        funds sufficient to pay any transfer taxes payable upon the making of such
        transfer. Upon such surrender and, if required, such payment, the Company
        shall
        execute and deliver a new Warrant or Warrants in the name of the assignee
        or
        assignees and in the denomination or denominations specified in such instrument
        of assignment, and shall issue to the assignor a new Warrant evidencing the
        portion of this Warrant not so assigned, and this Warrant shall promptly
        be
        cancelled. A Warrant, if properly assigned, may be exercised by a new holder
        for
        the purchase of Warrant Shares without having a new Warrant issued.

       

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

       

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

       

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

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      Section
        5.     
        Miscellaneous.

       

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

       

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

       

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

       

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

       

      e)  Authorized
        Shares.
        

       

      The
        Company covenants that during the period the Warrant is outstanding, it will
        reserve from its authorized and unissued Common Stock a sufficient number
        of
        shares (including the ADSs) to provide for the issuance of the Warrant Shares
        upon the exercise of any purchase rights under this Warrant. The Company
        further
        covenants that its issuance of this Warrant shall constitute full authority
        to
        its officers who are charged with the duty of executing stock certificates
        to
        execute and issue the necessary certificates for the Warrant Shares upon
        the
        exercise of the purchase rights under this Warrant. The Company will take
        all
        such reasonable action as may be necessary to assure that such Warrant Shares
        may be issued as provided herein without violation of any applicable law
        or
        regulation, or of any requirements of the Trading Market upon which the Common
        Stock may be listed. For so long as the Warrant is outstanding, the Company
        shall maintain the Deposit Agreement, and shall neither terminate the Deposit
        Agreement nor allow it to lapse due to the Company's failure to appoint a
        successor Depositary upon the resignation of the Depositary under Section
        21 of
        the Depositary Agreement. 

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

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

       

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

       

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

       

      g)  Restrictions.
        The
        Holder acknowledges that the Warrant Shares acquired upon the exercise of
        this
        Warrant, if not registered, will have restrictions upon resale imposed by
        state
        and federal securities laws.

       

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

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      i)  Notices.
        Any
        notice, request or other document required or permitted to be given or delivered
        to the Holder by the Company shall be delivered in accordance with the notice
        provisions of the Purchase Agreement.

       

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

       

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

       

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

       

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

       

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

       

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

       

      p)  Identity
        of Transfer Agent.
        The
        Transfer Agent for the Common Stock as represented by the ADSs is
        ________________ and the contact information for the Transfer Agent
        is ____________________________________,
        Attention: ______________. Upon the appointment of any subsequent transfer
        agent
        or American depositary agent for the ADSs or other securities issuable upon
        the
        exercise of the rights of purchase represented by the Warrant, the Company
        will
        mail to the Holder a statement setting forth the name and address of such
        transfer agent or American depositary agent.

       

      ********************

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

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

       

      

      Dated:
        October __, 2005

      
        	 	 	 
	 	
                GENTIUM
                  S.p.A.

              
	 
 	 
 	 
 
	 	By:  	 
	 	
                
Name:
	 	Title:

      

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      NOTICE
        OF EXERCISE

      

      TO: _______________________

      

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

       

      (2)  Payment
        shall take the form of in lawful money of the United States.

       

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

       

      _______________________________

      

      The
        Warrant Shares shall be delivered to the following:

      

      _______________________________

      _______________________________

      _______________________________

      

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

      

      [SIGNATURE
        OF HOLDER]

       

      Name
        of
        Investing Entity:
        ________________________________________________________________________

      Signature
        of Authorized Signatory of Investing Entity:
        _________________________________________________

      Name
        of
        Authorized Signatory:
        ___________________________________________________________________

      Title
        of
        Authorized Signatory:
        ____________________________________________________________________

      Date:
        ________________________________________________________________________________________

      

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

       

      ASSIGNMENT
        FORM

      

      (To
        assign the foregoing warrant, execute

      this
        form
        and supply required information. 

      Do
        not
        use this form to exercise the warrant.)

       

      FOR
        VALUE
        RECEIVED, the foregoing Warrant and all rights evidenced thereby are hereby
        assigned to

       

       

      _______________________________________________
        whose address is

      

      _______________________________________________________________.

      

       

      _______________________________________________________________

      

        
          	 	 	Dated:
                  ______________,
                  _______

        

      

      
 

      
        
          	
                  Holder’s
                    Signature:

                	
                  

                	 
	 	
                  
 	 
	 	
                  
 	 

        

      

      

      Signature
        Guaranteed: ___________________________________________

      

      

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

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