Document:

Exhibit
      10.7

    SUBSCRIPTION
      AGREEMENT

    

    

    SUBSCRIPTION
      AGREEMENT (this “Agreement”) made as of the last date set forth on the signature
      page hereof between Ziopharm, Inc. (the “Company”), and the undersigned (the
“Subscriber”).

    

    W
      I T N E
      S S E T H:

    

    WHEREAS,
      the Company has retained Paramount BioCapital, Inc. (“Paramount”) to act as
      exclusive placement agent, on a “best efforts” basis, in a private offering (the
“Offering”) consisting of shares of Series A Convertible Preferred Stock, par
      value $.001 per share, stated value $2.16 per share (the “Preferred Stock” or
      the Shares) of the Company, and in connection therewith has authorized Paramount
      to engage one or more other firms to assist in finding qualified subscribers
      for
      the Preferred Stock (such other firms, if any, together with Paramount, the
      “Placement Agent”);

    

    WHEREAS,
      the Company desires to issue a minimum of 6,944,445 shares of Preferred Stock
      (the “Minimum Offering”) and a maximum of 11,574,075 shares of Preferred Stock
      (the “Maximum Offering”) with an option in favor of Paramount to offer up to an
      additional 2,314,815 shares of Preferred Stock to cover over-allotments (the
      “Increased Maximum Offering”). The minimum investment is $100,001.52 (46,297
      shares of Preferred Stock), although the Company and the Placement Agent, in
      their sole discretion, may allow sales of a fewer number of Shares. Each share
      of Preferred Stock is initially convertible at the option of the holder thereof
      into one (1) share of common stock, par value $.001 per share, of the Company
      (the "Common Stock"), subject to adjustment as provided in the form of
      Certificate of Designations attached as Appendix B to the Confidential Private
      Placement Memorandum dated January 18, 2005 (such memorandum, together with
      all
      amendments thereof and supplements and appendices thereto, the
“Memorandum”);

    

    WHEREAS,
      the Subscriber desires to purchase that number of shares of Preferred Stock
      set
      forth on the signature page hereof on the terms and conditions hereinafter
      set
      forth;

    

    NOW,
      THEREFORE, in consideration of the premises and the mutual representations
      and
      covenants hereinafter set forth, the parties hereto do hereby agree as
      follows:

     

    
      

      
        	
                I.

              	
                SUBSCRIPTION
                  FOR PREFERRED SHARES AND REPRESENTATIONS BY
                  SUBSCRIBER

              

      

       

      1.1 Subject
        to the terms and conditions hereinafter set forth and in the Memorandum,
        the
        Subscriber hereby irrevocably subscribes for and agrees to purchase from
        the
        Company such number of shares of Preferred Stock and the Company agrees to
        sell
        to the Subscriber such number of shares of Preferred Stock, as is set forth
        on
        the signature page hereof (the “Preferred Shares”) at a per share price equal to
        $2.16 (the “Per Share Price”). The purchase price is payable by personal or
        business check or money order made payable to “US Bank Trust National
        Association as Escrow Agent for Paramount/Ziopharm” contemporaneously with the
        execution and delivery of this Agreement by the Subscriber. Subscribers may
        also
        pay the subscription amount by, wire transfer of immediately available funds
        to:

    

    

    

    

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      CONTINUED ON NEXT PAGE -

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    

    

    US
      BANK TRUST N.A.

    ST.
      PAUL MN

    ABA
      Routing #: 

    Further
      Credit to Account Name:

    Account
      Number: 

    Financial
      Beneficiary Recipient/Sub acct: of Paramount Cap/Ziopharm
      Inc.

    SEI/Sub
      acct #: 

    Attention:
      

    Phone:
      

    

    The
      Subscriber understands, however, that the purchase and sale of the Preferred
      Shares is contingent upon the Company making sales of the Minimum Offering
      amount prior to the Offering Termination Date (as defined below). 

    

    1.2 The
      Subscriber recognizes that the purchase of the Preferred Shares involves a
      high
      degree of risk including, but not limited to, the following: (a) the Company
      remains a development stage business with limited operating history and requires
      substantial funds in addition to the proceeds of the Offering; (b) an investment
      in the Company is highly speculative, and only investors who can afford the
      loss
      of their entire investment should consider investing in the Company and the
      Preferred Shares; (c) the Subscriber may not be able to liquidate its
      investment; (d) transferability of the Preferred Shares and the shares of Common
      Stock issuable upon conversion of the Preferred Shares (sometimes hereinafter
      collectively referred to as the “Securities”) is extremely limited; (e) in the
      event of a disposition, the Subscriber could sustain the loss of its entire
      investment; and (f) the Company has not paid any dividends since its inception
      and does not anticipate paying any dividends, even if declared by the Board
      of
      Directors pursuant to the terms of the Preferred Stock. Without limiting the
      generality of the representations set forth in Section 1.5 below, the Subscriber
      represents that the Subscriber has carefully reviewed the section of the
      Memorandum captioned "Risk Factors." 

    

    1.3 The
      Subscriber represents that the Subscriber is an “accredited investor” as such
      term is defined in Rule 501 of Regulation D (“Regulation D”) promulgated under
      the Securities Act of 1933, as amended (the “Securities Act”), as indicated by
      the Subscriber’s responses to the questions contained in Article VII hereof, and
      that the Subscriber is able to bear the economic risk of an investment in the
      Preferred Shares.

    

    1.4 The
      Subscriber hereby acknowledges and represents that (a) the Subscriber has
      knowledge and experience in business and financial matters, prior investment
      experience, including investment in securities that are non-listed, unregistered
      and/or not traded on a national securities exchange nor on the National
      Association of Securities Dealers, Inc. (the “NASD”) automated quotation system
      (“NASDAQ”), or the Subscriber has employed the services of a “purchaser
      representative” (as defined in Rule 501 of Regulation D), attorney and/or
      accountant to read all of the documents furnished or made available by the
      Company both to the Subscriber and to all other prospective investors in the
      Preferred Stock to evaluate the merits and risks of such an investment on the
      Subscriber's behalf; (b) the Subscriber recognizes the highly speculative nature
      of this investment; and (c) the Subscriber is able to bear the economic risk
      that the Subscriber hereby assumes.

    

    1.5 The
      Subscriber hereby acknowledges receipt and careful review of this Agreement,
      the
      form of Certificate of Designations attached to the Memorandum as Appendix
      B,
      the Memorandum (which includes the Risk Factors ), including all appendices
      thereto, and any documents which may have been made available upon request
      as
      reflected therein (collectively referred to as the “Offering Materials”) and
      hereby represents that the Subscriber has been furnished by the Company during
      the course of the Offering with all information regarding the Company, the
      terms
      and conditions of the Offering and any additional information that the
      Subscriber has requested or desired to know, and has been afforded the
      opportunity to ask questions of and receive answers from duly authorized
      officers or other representatives of the Company concerning the Company and
      the
      terms and conditions of the Offering.

    

    
      
        
        

      

      
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    1.6 (a) In
      making
      the decision to invest in the Preferred Shares the Subscriber has relied solely
      upon the information provided by the Company in the Offering Materials. To
      the
      extent necessary, the Subscriber has retained, at its own expense, and relied
      upon appropriate professional advice regarding the investment, tax and legal
      merits and consequences of this Agreement and the purchase of the Preferred
      Shares hereunder. The Subscriber disclaims reliance on any statements made
      or
      information provided by any person or entity in the course of Subscriber’s
      consideration of an investment in the Preferred Shares other than the Offering
      Materials. The Subscriber acknowledges and agrees that (i) the Company has
      prepared the Offering Materials and that no other person, including without
      limitation, the Placement Agent, has supplied any information for inclusion
      in
      the Offering Materials other than information furnished in writing to the
      Company by the Placement Agent specifically for inclusion in those parts of
      the
      Offering Materials relating specifically to the Placement Agent, (ii) the
      Placement Agent has no responsibility for the accuracy or completeness of the
      Offering Materials and (iii) the Subscriber has not relied upon the independent
      investigation or verification, if any, that may have been undertaken by the
      Placement Agent.

    

    (b) The
      Subscriber represents that (i) the Subscriber was contacted regarding the sale
      of the Preferred Shares by the Company or the Placement Agent (or an authorized
      agent or representative of the Company or the Placement Agent) with whom the
      Subscriber had a prior substantial pre-existing relationship and (ii) no shares
      of Preferred Stock were offered or sold to it by means of any form of general
      solicitation or general advertising, and in connection therewith, the Subscriber
      did not (A) receive or review any advertisement, article, notice or other
      communication published in a newspaper or magazine or similar media or broadcast
      over television or radio, whether closed circuit, or generally available; or
      (B)
      attend any seminar meeting or industry investor conference whose attendees
      were
      invited by any general solicitation or general advertising.

    

    1.7 The
      Subscriber hereby represents that the Subscriber, either by reason of the
      Subscriber's business or financial experience or the business or financial
      experience of the Subscriber's professional advisors (who are unaffiliated
      with
      and not compensated by the Company or any affiliate or selling agent of the
      Company, including the Placement Agent, directly or indirectly), has the
      capacity to protect the Subscriber's own interests in connection with the
      transaction contemplated hereby. 

    

    1.8 The
      Subscriber hereby acknowledges that the Offering has not been reviewed by the
      United States Securities and Exchange Commission (the “SEC”) nor any state
      regulatory authority since the Offering is intended to be exempt from the
      registration requirements of Section 5 of the Securities Act pursuant to
      Regulation D promulgated thereunder. The Subscriber understands that the
      Securities have not been registered under the Securities Act or under any state
      securities or “blue sky” laws and agrees not to sell, pledge, assign or
      otherwise transfer or dispose of the Securities unless they are registered
      under
      the Securities Act and under any applicable state securities or “blue sky” laws
      or unless an exemption from such registration is available.

    

    1.9 The
      Subscriber understands that the Securities comprising the Preferred Shares
      have
      not been registered under the Securities Act by reason of a claimed exemption
      under the provisions of the Securities Act that depends, in part, upon the
      Subscriber's investment intention. In this connection, the Subscriber hereby
      represents that the Subscriber is purchasing the Securities for the Subscriber's
      own account for investment and not with a view toward the resale or distribution
      to others. The Subscriber, if an entity, further represents that it was not
      formed for the purpose of purchasing the Securities.

    

    
      
        
        

      

      
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    1.10 The
      Subscriber understands that there is no public market for the Preferred Shares
      nor the shares of Common Stock issuable upon conversion of the Preferred Shares
      and that no market may develop for any of such Securities. The Subscriber
      understands that even if a public market develops for such Securities, Rule
      144
      (“Rule 144”) promulgated under the Securities Act requires for non-affiliates,
      among other conditions, a one-year holding period prior to the resale (in
      limited amounts) of securities acquired in a non-public offering without having
      to satisfy the registration requirements under the Securities Act. The
      Subscriber understands and hereby acknowledges that the Company is under no
      obligation to register any of the Preferred Shares or any of the shares of
      Common Stock issuable upon conversion of the Preferred Shares under the
      Securities Act or any state securities or “blue sky” laws other than as set
      forth in Article V. 

    

    1.11 The
      Subscriber consents to the placement of a legend on any certificate or other
      document evidencing the Securities that such Securities have not been registered
      under the Securities Act or any state securities or “blue sky” laws and setting
      forth or referring to the restrictions on transferability and sale thereof
      contained in this Agreement. The Subscriber is aware that the Company will
      make
      a notation in its appropriate records with respect to the restrictions on the
      transferability of such Securities. The legend to be placed on each certificate
      shall be in form substantially similar to the following:

    

    "THE
      SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES
      SECURITIES ACT OF 1933, AS AMENDED (THE "ACT") OR ANY STATE SECURITIES OR "BLUE
      SKY LAWS", AND MAY NOT BE OFFERED, SOLD, TRANSFERRED, ASSIGNED, PLEDGED OR
      HYPOTHECATED ABSENT AN EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT OR
      COMPLIANCE WITH RULE 144 PROMULGATED UNDER SUCH ACT, OR UNLESS THE COMPANY
      HAS
      RECEIVED AN OPINION OF COUNSEL, REASONABLY SATISFACTORY TO THE COMPANY AND
      ITS
      COUNSEL, THAT SUCH REGISTRATION IS NOT REQUIRED."

    

    1.12 The
      Subscriber understands that the Placement Agent and/or the Company will review
      this Agreement and are hereby given authority by the Subscriber to call
      Subscriber's bank or place of employment or otherwise review the financial
      standing of the Subscriber; and it is further agreed that the Placement Agent
      and the Company, each at their sole discretion, reserve the unrestricted right,
      without further documentation or agreement on the part of the Subscriber, to
      reject or limit any subscription and to close the Offering to the Subscriber
      at
      any time and that the Company will issue stop transfer instructions to its
      transfer agent with respect to such Securities. No subscriptions for fractional
      shares of Preferred Stock will be accepted.

    

    1.13 The
      Subscriber hereby represents that the address of the Subscriber furnished by
      Subscriber on the signature page hereof is the Subscriber's principal residence
      if Subscriber is an individual or its principal business address if it is a
      corporation or other entity.

    

    1.14 The
      Subscriber represents that the Subscriber has full power and authority
      (corporate, statutory and otherwise) to execute and deliver this Agreement
      and
      to purchase the Preferred Shares and the shares of Common Stock issuable upon
      conversion of the Preferred Shares. This Agreement constitutes the legal, valid
      and binding obligation of the Subscriber, enforceable against the Subscriber
      in
      accordance with its terms.

    

    
      
        
        

      

      
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    1.15 If
      the
      Subscriber is a corporation, partnership, limited liability company, trust,
      employee benefit plan, individual retirement account, Keogh Plan, or other
      tax-exempt entity, it is authorized and qualified to invest in the Company
      and
      the person signing this Agreement on behalf of such entity has been duly
      authorized by such entity to do so.

    

    1.16 The
      Subscriber acknowledges that if he or she is a Registered Representative of
      an
      NASD member firm, he or she must give such firm the notice required by the
      NASD’s Rules of Fair Practice, receipt of which must be acknowledged by such
      firm in Section 7.4 below.

    

    1.17 The
      Subscriber acknowledges that at such time, if ever, as the Securities are
      registered (as such term is defined in Article V hereof), sales of the
      Securities will be subject to state securities laws.

    

    1.18      
       (a) Subject
      to the provision below and Section 1.18(b), the Subscriber hereby agrees that
      from the earlier to occur of (i) the date of the initial offering of the Common
      Stock to the public pursuant to a registration statement under the Securities
      Act (the “IPO”) or (ii) the first date (the “Trading Date”) on which the Common
      Stock (or securities received in exchange for Common Stock) trades on a national
      securities exchange or on the NASDAQ, including the Over the Counter Bulletin
      Board (a “Trading Event”) and continuing for a period of 180 days thereafter or
      such longer period as may be requested by the underwriter or underwriters,
      in
      the case of an IPO (the “Lock-Up Period”), the Subscriber will not, without the
      prior written consent of the Company, offer, pledge, sell, contract to sell,
      grant any option for the sale of, or otherwise dispose of, directly or
      indirectly, the Registrable Securities (as defined in Section 5.1) purchased
      or
      acquired by the Subscriber. In addition, the Subscriber agrees that during
      the
      period from the date that Subscriber was first contacted with respect to the
      potential purchase of the Preferred Shares through the last date upon which
      Subscriber holds any Securities or Registrable Securities, the Subscriber will
      not directly or indirectly, through related parties, affiliates or otherwise
      sell “short” or “short against the box” (as those terms are generally
      understood) any equity security of the Company.

    

    (b) In
      connection with any subsequent public offering of the Company's securities,
      the
      Holder hereby agrees to be subject to a lock-up for a period of 60 days or
      such
      longer period following such public offering as and if required by the
      underwriter or underwriters of such public offering. The foregoing lock-ups
      shall be applicable regardless of whether the Securities are then registered
      for
      re-sale under the Securities Act. This Section 1.18 shall be binding upon any
      transferee of the Securities. 

    

    (c) In
      order
      to enforce the foregoing covenant, the Company may impose stop-transfer
      instructions with respect to the Registrable Securities (as defined below)
      of
      each Holder (as defined below) (and the shares or securities of every other
      person subject to the foregoing restriction) until the end of such
      period.

    

    1.19      
       (a) The
      Subscriber agrees not to issue any public statement with respect to the
      Subscriber’s investment or proposed investment in the Company or the terms of
      any agreement or covenant between them and the Company without the Company's
      prior written consent, except such disclosures as may be required under
      applicable law or under any applicable order, rule or regulation.

    

    
      
        
        

      

      
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    (b) The
      Company agrees not to disclose the names, addresses or any other information
      about the Subscribers, except as required by law; provided, that the Company
      may
      use the name (but not the address) of the Subscriber in any registration
      statement filed pursuant to Article V in which the Subscriber’s shares are
      included.

    

    1.20 The
      Subscriber represents and warrants that it has not engaged, consented to or
      authorized any broker, finder or intermediary to act on its behalf, directly
      or
      indirectly, as a broker, finder or intermediary in connection with the
      transactions contemplated by this Agreement. The Subscriber hereby agrees to
      indemnify and hold harmless the Company from and against all fees, commissions
      or other payments owing to any such person or firm acting on behalf of such
      Subscriber hereunder.

    

    1.21 The
      Subscriber agrees to hold the Company and its directors, officers, employees,
      affiliates, controlling persons and agents (including the Placement Agent and
      their officers, directors, employees, counsel, controlling persons and agents)
      and their respective heirs, representatives, successors and assigns harmless
      and
      to indemnify them against all liabilities, costs and expenses incurred by them
      as a result of (a) any sale or distribution of the Securities by the Subscriber
      in violation of the Securities Act or any applicable state securities or “blue
      sky” laws; or (b) any false representation or warranty or any breach or failure
      by the Subscriber to comply with any covenant made by the Subscriber in this
      Agreement (including the Confidential Investor Questionnaire contained in
      Article VII herein) or any other document furnished by the Subscriber to any
      of
      the foregoing in connection with this transaction.

    

    
      	
              II.

            	
              REPRESENTATIONS
                BY AND COVENANTS OF THE COMPANY 

            

    

    

    The
      Company hereby represents and warrants to the Subscriber that:

    

    2.1 Organization,
      Good Standing and Qualification.
      The
      Company is a corporation duly organized, validly existing and in good standing
      under the laws of the State of Delaware and has full corporate power and
      authority to conduct its business.

    

    2.2 Capitalization
      and Voting Rights.
      The
      authorized, issued and outstanding capital stock of the Company is as set forth
      in the Memorandum and
      all
      issued and outstanding shares of the Company are validly issued, fully paid
      and
      nonassessable. Except as set forth in the Memorandum, there are no outstanding
      options, warrants, agreements, convertible securities, preemptive rights or
      other rights to subscribe for or to purchase any shares of capital stock of
      the
      Company. Except as set forth in the Memorandum and
      as
      otherwise required by law, there are no restrictions upon the voting or transfer
      of any of the shares of capital stock of the Company pursuant to the Company's
      Amended Certificate of Incorporation (the “Certificate of Incorporation”),
      By-Laws or other governing documents or any agreement or other instruments
      to
      which the Company is a party or by which the Company is bound.

    

    2.3 Authorization;
      Enforceability.
      The
      Company has all corporate right, power and authority to enter into this
      Agreement and to consummate the transactions contemplated hereby. All corporate
      action on the part of the Company, its directors and stockholders necessary
      for
      the (i) authorization execution, delivery and performance of this Agreement
      by
      the Company; and (ii) authorization, sale, issuance and delivery of the
      Securities contemplated hereby and the performance of the Company's obligations
      hereunder has been taken. This Agreement has been duly executed and delivered
      by
      the Company and constitutes a legal, valid and binding obligation of the
      Company, enforceable against the Company in accordance with its terms, subject
      to laws of general application relating to bankruptcy, insolvency and the relief
      of debtors and rules of law governing specific performance, injunctive relief
      or
      other equitable remedies, and to limitations of public policy. The Preferred
      Shares, when issued and fully paid for in accordance with the terms of this
      Agreement, will be validly issued, fully paid and nonassessable. The Company
      shall, at all times when any of the Preferred Shares remain outstanding, have
      authorized and reserved for issuance a sufficient number of shares of Common
      Stock to provide for conversion of the Preferred Stock. Upon the issuance and
      delivery of the shares of Common Stock issuable upon conversion of the Preferred
      Shares, such shares of Common Stock will be validly issued, fully paid and
      nonassessable. The issuance and sale of the Preferred Shares contemplated hereby
      and the issuance and sale of the Common Stock underlying the Preferred Stock,
      will not give rise to any preemptive rights or rights of first refusal on behalf
      of any person which have not been waived in connection with this
      offering.

    

    
      
        
        

      

      
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    2.4 Terms
      of Preferred Stock.
      The
      Preferred Stock has all of the rights, preferences and privileges as set forth
      in the form of the Certificate of Designations attached as Appendix B to the
      Memorandum.

    

    2.5 No
      Conflict; Governmental Consents.

    

    (a) The
      execution and delivery by the Company of this Agreement and the consummation
      of
      the transactions contemplated hereby will not result in the violation of any
      material law, statute, rule, regulation, order, writ, injunction, judgment
      or
      decree of any court or governmental authority to or by which the Company is
      bound, or of any provision of the Certificate of Incorporation or By-Laws of
      the
      Company, and will not conflict with, or result in a material breach or violation
      of, any of the terms or provisions of, or constitute (with due notice or lapse
      of time or both) a default under, any lease, loan agreement, mortgage, security
      agreement, trust indenture or other agreement or instrument to which the Company
      is a party or by which it is bound or to which any of its properties or assets
      is subject, nor result in the creation or imposition of any lien upon any of
      the
      properties or assets of the Company.

    

    (b) No
      consent, approval, authorization or other order of any governmental authority
      is
      required to be obtained by the Company in connection with the authorization,
      execution and delivery of this Agreement or with the authorization, issue and
      sale of the Preferred Shares or the Securities comprising the Preferred Shares,
      except such filings as may be required to be made with the SEC, NASD, NASDAQ
      and
      with any state or foreign blue sky or securities regulatory
      authority.

    

    2.6 Licenses.
      Except
      as otherwise set forth in the Memorandum, the Company has sufficient licenses,
      permits and other governmental authorizations currently required for the conduct
      of its business or ownership of properties and is in all material respects
      complying therewith.

    

    2.7 Litigation.
      Except
      as otherwise set forth in the Memorandum, the Company knows of no pending or
      threatened legal or governmental proceedings against the Company which could
      materially adversely affect the business, property, financial condition or
      operations of the Company or which materially and adversely questions the
      validity of this Agreement or any agreements related to the transactions
      contemplated hereby or the right of the Company to enter into any of such
      agreements, or to consummate the transactions contemplated hereby or thereby.
      The Company is not a party or subject to the provisions of any order, writ,
      injunction, judgment or decree of any court or government agency or
      instrumentality which could materially adversely affect the business, property,
      financial condition or operations of the Company. Except as otherwise set forth
      in the Memorandum, there is no action, suit, proceeding or investigation by
      the
      Company currently pending in any court or before any arbitrator or that the
      Company intends to initiate.

    

    
      
        
        

      

      
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    2.8 Disclosure.
      The
      information set forth in the Offering Materials as of the date hereof contains
      no untrue statement of a material fact nor omits to state a material fact
      necessary in order to make the statements contained therein, in light of the
      circumstances under which they were made, not misleading.

    

    2.9 Investment
      Company
      The
      Company is not an “investment company” within the meaning of such term under the
      Investment Company Act of 1940, as amended, and the rules and regulations of
      the
      SEC thereunder.

    

    2.10 Placement
      Agent.
      The
      Company has engaged, consented to and authorized the Placement Agent to act
      as
      agent of the Company solely in connection with the transactions contemplated
      by
      this Agreement. The Company will pay the Placement Agent a commission in the
      form of both cash and warrants (the “Introduction Warrants”) and a
      non-accountable expense allowance of $50,000.00, and the Company agrees to
      indemnify and hold harmless the Subscribers from and against all fees,
      commissions or other payments owing by the Company to Paramount or any other
      person or firm acting on behalf of the Company hereunder.

    

    2.11 Financial
      Statements.
      The
      financial statements of the Company included in the Memorandum (the "Financial
      Statements") fairly present in all material respects the financial condition
      and
      position of the Company at the dates and for the periods indicated; and have
      been prepared in conformity with generally accepted accounting principles,
      consistently applied throughout the periods covered thereby. Since the date
      of
      the most recent balance sheet included as part of the Financial Statements,
      there has not been to the Company’s knowledge: (i) any change in the assets,
      liabilities, financial condition or
      operations of the Company from that reflected in the Financial Statements,
      other
      than changes in the ordinary course of business, none of which individually
      or
      in the aggregate has had or is reasonably expected to have a material adverse
      effect on such assets, liabilities, financial condition or operations; or (ii)
      any other event or condition of any character that, either individually or
      cumulatively, has materially and adversely affected the business, assets,
      liabilities, financial condition or
      operations of the Company (a “Material Adverse Effect”), except for the expenses
      incurred in connection with the transactions contemplated by this
      Agreement.

    

    2.12 Intellectual
      Property.
      Except
      as would not reasonably be expected to have a Material Adverse Effect, (a)
      to
      its knowledge, the Company owns or possesses sufficient legal rights to all
      patents, trademarks, service marks, trade names, copyrights, trade secrets,
      licenses, information and other proprietary rights and processes necessary
      for
      its business as now conducted and as presently proposed to be conducted, without
      any known infringement of the rights of others; (b) except as disclosed in
      the
      Memorandum, there are no material outstanding options, licenses or agreements
      of
      any kind relating to the foregoing proprietary rights, nor is the Company bound
      by or a party to any material options, licenses or agreements of any kind with
      respect to the patents, trade secrets, licenses, and other proprietary rights
      and processes of any other person or entity; (c) the Company has not received
      any written communications from a third party alleging that the Company has
      violated or, by conducting its business as presently proposed to be conducted,
      would violate any of the patents or other proprietary rights of any other person
      or entity. 

    

    2.13 Title
      to Properties and Assets; Liens, Etc.
      To its
      knowledge, the Company has good and marketable title to its properties and
      assets, including the properties and assets reflected in the most recent balance
      sheet included in the Financial Statements, and good title to its leasehold
      estates, in each case subject to no mortgage, pledge, lien, lease, encumbrance
      or charge, other than (a) those resulting from taxes which have not yet become
      delinquent; (b) liens and encumbrances which do not materially detract from
      the
      value of the property subject thereto or materially impair the operations of
      the
      Company; and (c) those that have otherwise arisen in the ordinary course of
      business. The Company is in compliance with all material terms of each lease
      to
      which it is a party or is otherwise bound.

    

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

    

    

    

    2.14 Obligations
      to Related Parties.
      Except
      as disclosed in the Memorandum or as would not reasonably be expected to have
      a
      Material Adverse Effect, there are no obligations of the Company to officers,
      directors, stockholders, or employees of the Company other than (a) for payment
      of salary or other compensation for services rendered, (b) reimbursement for
      reasonable expenses incurred on behalf of the Company and (c) for other standard
      employee benefits made generally available to all employees (including stock
      option agreements outstanding under any stock option plan approved by the Board
      of Directors of the Company). Except as may be disclosed in the Financial
      Statements, the Company is not a guarantor or indemnitor of any indebtedness
      of
      any other person, firm or corporation.

     

    
      
        	
                III.

              	
                TERMS
                  OF SUBSCRIPTION

              

      

          

      
        3.1 The
          minimum investment that may be made by any prospective investor in the
          Preferred
          Stock is $100,001.52 (46,297 shares of Preferred Stock). Subscriptions
          for
          investment below the minimum investment may be accepted at the discretion
          of the
          Placement Agent and the Company.

         

        3.2 Pending
          the sale of the Preferred Shares, all funds paid hereunder shall be deposited
          by
          the Company in escrow with US Bank Trust, having a branch at 100 Wall Street,
          Suite 1600, New York, New York 10005. If the Company shall not have obtained
          subscriptions (including this subscription) for purchases of the Minimum
          Offering amount on or before February 15, 2005, (subject to extension without
          notice to subscribers by the Placement Agent) (such date, as it may be
          so
          extended, the “Offering Termination Date”), then this subscription shall be void
          and all funds paid hereunder by the Subscriber, without interest, shall
          be
          promptly returned to the Subscriber. The Subscriber hereby authorizes and
          directs the Company and the Placement Agent to direct the Escrow Agent
          to return
          any funds for unaccepted subscriptions to the same account from which the
          funds
          were drawn, without interest, including any customer account maintained
          with the
          Placement Agent.

      

    

    

    3.3 Upon
      receipt of the Minimum Offering amount on or prior to the Offering Termination
      Date, the Company may conduct a closing of the purchase and sale of Preferred
      Stock (a “Closing”) and may conduct subsequent Closings on an interim basis
      until the Maximum Offering amount (or Increased Maximum Offering amount, if
      applicable) has been obtained or until the Offering Termination Date, as
      extended, if at all. 

    

    3.4 Certificates
      representing the Preferred Shares purchased by the Subscriber pursuant to this
      Agreement will be prepared for delivery to the Subscriber within 15 business
      days following the Closing at which such purchase takes place. The Subscriber
      hereby authorizes and directs the Company to deliver the certificates
      representing the Preferred Shares purchased by the Subscriber pursuant to this
      Agreement directly to the Subscriber's account maintained by Paramount, if
      any,
      or, if no such account exists, to the residential or business address indicated
      on the signature page hereto. 

    

    3.5
       Placement
      of the shares of Preferred Stock will be made by the Company who will remit
      certain compensation to the Placement Agent for introduction to investors and
      other services.

    

    
      
        	IV.	
                CONDITIONS
                  TO OBLIGATIONS OF THE
                  SUBSCRIBERS

              

      

    

    

    4.1 The
      Subscriber’s obligation to purchase the Preferred Shares at the Closing at which
      such purchase is to be consummated is subject to the fulfillment on or prior
      to
      such Closing of the following conditions, which conditions may be waived at
      the
      option of each Subscriber to the extent permitted by law:

    

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

    

    

    (a) Representations
      and Warranties Correct.
      The
      representations and warranties made by the Company in Article II hereof shall
      be
      true and correct in all material respects.

    

    (b) Covenants.
      All
      covenants, agreements and conditions contained in this Agreement to be performed
      by the Company on or prior to the date of such Closing shall have been performed
      or complied with in all material respects.

    

    (c) No
      Legal Order Pending.
      There
      shall not then be in effect any legal or other order enjoining or restraining
      the transactions contemplated by this Agreement.

    

    (d) No
      Law
      Prohibiting or Restricting Such Sale.
      There
      shall not be in effect any law, rule or regulation prohibiting or restricting
      such sale or requiring any consent or approval of any person, which shall not
      have been obtained, to issue the Securities (except as otherwise provided in
      this Agreement).

    

    
      	V.	
              REGISTRATION
                RIGHTS

            

    

    

    5.1  Definitions. As
      used
      in this Agreement, the following terms shall have the following
      meanings.

    

    (a) The
      term
“Holder” shall mean any holder of Registrable Securities.

    

    (b) The
      terms
“register”, “registered” and “registration” refer to a registration effected by
      preparing and filing a registration statement or similar document in compliance
      with the Securities Act, and the declaration or order of effectiveness of such
      registration statement or document.

    

    (c) The
      term
“Registrable Securities” shall mean (i) the shares of Common Stock issuable upon
      conversion of the shares of Preferred Stock sold in the Offering; (ii) the
      shares of Common Stock issuable upon conversion of the shares of Preferred
      Stock
      underlying the Placement Warrants; and (iii) any shares of Common Stock issuable
      (or issuable upon the conversion or exercise of any warrant, right or other
      security that is issued) pursuant to a dividend or other distribution with
      respect to or in replacement of any Securities; provided, however, that
      securities shall only be treated as Registrable Securities if and only for
      so
      long as they (A) have not been disposed of pursuant to a registration statement
      declared effective by the SEC; (B) have not been sold in a transaction exempt
      from the registration and prospectus delivery requirements of the Securities
      Act
      so that all transfer restrictions and restrictive legends with respect thereto
      are removed upon the consummation of such sale; (C) are held by a Holder or
      a
      permitted transferee of a Holder pursuant to Section 5.11; and (D) may not
      be
      disposed of under Rule 144(k) under the Securities Act without restriction.
      

    

    5.2 Piggyback
      Registration.
      

    

    (a) The
      Company agrees that if, at any time, and from time to time, after the earlier
      to
      occur of (i) an IPO and (ii) a Trading Event, the Board of Directors of the
      Company (the “Board”) shall authorize the filing of a registration statement
      under the Securities Act (other than the IPO or a registration statement on
      Form
      S-8, Form S-4 or any other form that does not include substantially the same
      information as would be required in a form for the general registration of
      securities) in connection with the proposed offer of any of its securities
      by it
      or any of its stockholders, the Company shall: (A) promptly notify each Holder
      that such registration statement will be filed and that the Registrable
      Securities then held by such Holder will be included in such registration
      statement at such Holder’s request; (B) cause such registration statement to
      cover all of such Registrable Securities issued to such Holder for which such
      Holder requests inclusion; (C) use best efforts to cause such registration
      statement to become effective as soon as practicable; and (D) take all other
      reasonable action necessary under any Federal or state law or regulation of
      any
      governmental authority to permit all such Registrable Securities that have
      been
      issued to such Holder to be sold or otherwise disposed of, and will maintain
      such compliance with each such Federal and state law and regulation of any
      governmental authority for the period necessary for such Holder to promptly
      effect the proposed sale or other disposition.

    

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

    

    

    

    (b) Notwithstanding
      any other provision of this Section 5.2, the Company may at any time, abandon
      or
      delay any registration commenced by the Company. In the event of such an
      abandonment by the Company, the Company shall not be required to continue
      registration of shares requested by the Holder for inclusion, the Holder shall
      retain the right to request inclusion of shares as set forth above and the
      withdrawn registration shall not be deemed to be a registration request for
      the
      purposes of Section 5.2(c) below.

    

    (c) Each
      Holder shall have the right to request inclusion of any of its Registrable
      Securities in a registration statement as described in this Section 5.2, up
      to
      three times.

    

    5.3 Demand
      Registration.

    

    (a) Registration
      on Request.
      

    

    (i) The
      Company agrees that if, at any time, and from time to time, but at least 180
      days after the earlier to occur of (i) an IPO and (ii) a Trading Event, and
      ending on the date that is five years from the final Closing, one or more of
      the
      Holders desire to effect the registration under the Securities Act of
      outstanding Registrable Securities, such Holders may make a written request
      that
      the Company effect such registration; provided
      that
      such registration covers at least 51% of the Registrable Securities owned by
      all
      the Holders at such time; and provided,
      further,
      that the
      Holders shall be entitled to no more than one such demand registration.

    

    (ii) The
      Company further agrees that if, at any time, and from time to time, after the
      Company has qualified for the use of Form S-3 or any successor form, and ending
      on the date that is five years from the final Closing, one or more of the
      Holders desire to effect the registration under the Securities Act on Form
      S-3
      or any successor form (“Short-Form Registration”) of outstanding Registrable
      Securities, such Holders may make a written request that the Company effect
      a
      Short-Form Registration; provided
      that the
      aggregate price to the public of the shares as to which such registration is
      requested (based on the then current market price and before deducting
      underwriting discounts and commissions) would equal or exceed $5,000,000. It
      is
      understood and agreed that the Holders may make good faith requests for
      Short-Form Registrations on an unlimited number of occasions; provided that,
      the
      Company shall not be required to effect more than one Short Form Registration
      in
      any 12 month period.

    

    (iii) Each
      request made by one or more of the Holders pursuant to subsections (i) or (ii)
      above (the “Initiating Holders”) will specify the number of shares of
      Registrable Securities proposed to be sold and will also specify the intended
      method of disposition thereof. Following receipt of any such request, the
      Company shall immediately notify all Holders other than the Initiating Holders
      of receipt of such request and the Company shall use best efforts to file,
      within 60 days of such request, the registration under the Securities Act of
      the
      Registrable Securities which the Company has been so requested to register
      in
      the request by the Initiating Holders (and in all notices received by the
      Company from such other Holders within 30 days after the giving of such notice
      by the Company), to the extent necessary to permit the disposition (in
      accordance with the intended methods thereof as aforesaid) of the Registrable
      Securities to be registered. If such method of disposition shall be an
      underwritten public offering, the Holders of a majority of the shares of
      Registrable Securities to be sold in such offering may designate the managing
      underwriter of such offering, subject to the approval of the Company, which
      approval shall not be unreasonably withheld or delayed. The Holders will be
      permitted to withdraw Registrable Securities from a registration at any time
      prior to the effective date of such registration; provided
      the
      remaining number of shares of Registrable Securities subject to a requested
      registration is not less than the minimum amount required pursuant to this
      Section 5.3.

    

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

    

    

    

    (b) Limitations
      on Demand Registration.
      Notwithstanding Section 5.3(a),

    

    (i) the
      Company shall not be obligated to file a registration statement relating to
      a
      registration request pursuant to this Section 5.3 at any time during the 180-day
      period immediately following the effective date of a registration statement
      filed by the Company covering a firm commitment underwritten public offering
      of
      securities of the Company; and if the Board determines, in its good faith
      judgment, that the Company should not file any registration statement otherwise
      required to be filed pursuant to Section 5.3 or should withdraw any such
      previously filed registration statement because the Company is engaged in or
      in
      good faith plans to engage in any financing, acquisition or other material
      transaction which would be adversely affected by the filing or maintenance
      of a
      registration statement otherwise required to be filed or maintained pursuant
      to
      Section 5.3, or that the Company is in the possession of material nonpublic
      information required to be disclosed in such registration statement or an
      amendment or supplement thereto, the disclosure of which in such registration
      statement would be materially disadvantageous to the Company (a “Disadvantageous
      Condition”),
      the
      Company shall be entitled to postpone for the shortest reasonable period of
      time
      (but not exceeding 180 days from the date of the determination), the filing
      of
      such registration statement or, if such registration statement has already
      been
      filed, may withdraw such registration statement and shall promptly give the
      Holders written notice of such determination, containing a general statement
      of
      the reasons for such postponement and an approximation of the anticipated delay.
      If the Company shall so postpone the filing or effect the withdrawal of the
      registration statement, the Holders who made the request for registration shall
      have the right to withdraw the request for registration by giving written notice
      to the Company within 30 days after receipt of the notice of postponement.
      Upon
      the receipt of any such notice, such Holders shall forthwith discontinue use
      of
      the prospectus contained in such registration statement and, if so directed
      by
      the Company, shall deliver to the Company all copies of the prospectus then
      covering such Registrable Securities current at the time of receipt of such
      notice (or, if no registration statement has yet been filed, all drafts of
      the
      prospectus covering such Registrable Securities). If any Disadvantageous
      Condition shall cease to exist, the Company shall promptly notify the Holders
      to
      such effect. If any registration statement shall have been withdrawn, the
      Company shall, at such time as it is possible or, if earlier, at the end of
      the
      180-day period following such withdrawal, file a new registration statement
      covering the Registrable Securities that were covered by such withdrawn
      registration statement, and the effectiveness of such registration statement
      shall be maintained for such time as may be necessary so that the period of
      effectiveness of such new registration statement, when aggregated with the
      period during which such withdrawn registration statement was effective, if
      any,
      shall be such time as may be otherwise required by this Agreement. The Company’s
      right to delay a request for registration or to withdraw a registration
      statement pursuant to this Section 5.3 may not be exercised more than once
      in
      any one-year period.

    

    5.4 Registration
      Procedures.
      Whenever required under this Article V to include Registrable Securities in
      a
      Company registration statement, the Company shall, as expeditiously as
      reasonably possible:

    

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

    

    

    (a) Use
      best
      efforts to (i) cause such registration statement to become effective, and (ii)
      cause such registration statement to remain effective until the earliest to
      occur of (A) such date as the sellers of Registrable Securities (the “Selling
      Holders”) have completed the distribution described in the registration
      statement and (B) such time that all of such Registrable Securities are no
      longer, by reason of Rule 144(k) under the Act, required to be registered for
      the sale thereof by such Holders. The Company will also use its best efforts
      to,
      during the period that such registration statement is required to be maintained
      hereunder, file such post-effective amendments and supplements thereto as may
      be
      required by the Securities Act and the rules and regulations thereunder or
      otherwise to ensure that the registration statement does not contain any untrue
      statement of material fact or omit to state a fact required to be stated therein
      or necessary to make the statements contained therein, in light of the
      circumstances under which they are made, not misleading; provided, however,
      that
      if applicable rules under the Securities Act governing the obligation to file
      a
      post-effective amendment permits, in lieu of filing a post-effective amendment
      that (i) includes any prospectus required by Section 10(a)(3) of the Securities
      Act or (ii) reflects facts or events representing a material or fundamental
      change in the information set forth in the registration statement, the Company
      may incorporate by reference information required to be included in (i) and
      (ii)
      above to the extent such information is contained in periodic reports filed
      pursuant to Section 13 or 15(d) of the Exchange Act in the registration
      statement. In the event that the Company becomes qualified for the use of Form
      S-3 or any successor form at a time when any registration statement on any
      other
      Form which includes Registrable Securities is required to be maintained
      hereunder, the Company shall, upon the request of any Selling Holder, subject
      to
      Section 5.5, (i) as expeditiously as reasonably possible, use best efforts
      to
      cause a Short-Form Registration covering such Registrable Securities to become
      effective and (ii) comply with each of the other requirements of this Section
      5.4 which may applicable thereto. Upon the effectiveness of such Short-Form
      Registration, the Company shall be relieved of its obligations hereunder to
      keep
      in effect the registration statement which initially covered the Registrable
      Securities included in such Short-Form Registration. 

    

    (b) Prepare
      and file with the SEC such amendments and supplements to such registration
      statement, and the prospectus used in connection with such registration
      statement, as may be necessary to comply with the provisions of the Securities
      Act with respect to the disposition of all securities covered by such
      registration statement.

    

    (c) Make
      available for inspection upon reasonable notice during the Company’s regular
      business hours by each Selling Holder, any underwriter participating in any
      distribution pursuant to such registration statement, and any attorney,
      accountant or other agent retained by such Selling Holder or underwriter, all
      financial and other records, pertinent corporate documents and properties of
      the
      Company, and cause the Company’s officers, directors and employees to supply all
      information reasonably requested by any such Selling Holder, underwriter,
      attorney, accountant or agent in connection with such registration
      statement.

    

    (d) Furnish
      to the Selling Holders such numbers of copies of a prospectus, including a
      preliminary prospectus as amended or supplemented from time to time, in
      conformity with the requirements of the Securities Act, and such other documents
      as they may reasonably request in order to facilitate the disposition of
      Registrable Securities owned by them.

    

    (e) Use
      best
      efforts to register and qualify the securities covered by such registration
      statement under such other federal or state securities laws of such
      jurisdictions as shall be reasonably requested by the Selling Holders; provided,
      however, that the Company shall not be required in connection therewith or
      as a
      condition thereto to qualify to do business or to file a general consent to
      service of process in any such states or jurisdictions, unless the Company
      is
      already subject to service in such jurisdiction and except as may be required
      by
      the Securities Act.

    

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

    

    

    

    (f) In
      the
      event of any underwritten public offering, enter into and perform its
      obligations under an underwriting agreement, in usual and customary form, with
      the managing underwriter of such offering. Each Selling Holder participating
      in
      such underwriting shall also enter into and perform its obligations under such
      an agreement.

    

    (g) Notify
      each Holder of Registrable Securities covered by such registration statement,
      at
      any time when a prospectus relating thereto is required to be delivered under
      the Securities Act, (i) when the registration statement or any post-effective
      amendment and supplement thereto has become effective; (ii) of the issuance
      by
      the SEC of any stop order or the initiation of proceedings for that purpose
      (in
      which event the Company shall make every effort to obtain the withdrawal of
      any
      order suspending effectiveness of the registration statement at the earliest
      possible time or prevent the entry thereof); (iii) of the receipt by the Company
      of any notification with respect to the suspension of the qualification of
      the
      Registrable Securities for sale in any jurisdiction or the initiation of any
      proceeding for such purpose; and (iv) of the happening of any event as a result
      of which the prospectus included in such registration statement, as then in
      effect, includes an untrue statement of a material fact or omits to state a
      material fact required to be stated therein or necessary to make the statements
      therein not misleading in the light of the circumstances then
      existing.

    

    (h) Cause
      all
      such Registrable Securities registered hereunder to be listed on each securities
      exchange or quotation service on which similar securities issued by the Company
      are then listed or quoted or, if no such similar securities are listed or quoted
      on a securities exchange or quotation service, apply for qualification and
      use
      best efforts to qualify such Registrable Securities for inclusion on the New
      York Stock Exchange or listing on a quotation system of the National Association
      of Securities Dealers, Inc.

    

    (i) Provide
      a
      transfer agent and registrar for all Registrable Securities registered pursuant
      hereunder and CUSIP number for all such Registrable Securities, in each case
      not
      later than the effective date of such registration.

    

    (j) Cooperate
      with the Selling Holders and the managing underwriters, if any, to facilitate
      the timely preparation and delivery of certificates representing the Registrable
      Securities to be sold, which certificates will not bear any restrictive legends;
      and enable such Registrable Securities to be in such denominations and
      registered in such names as the managing underwriters, if any, shall request
      at
      least two business days prior to any sale of the Registrable Securities to
      the
      underwriters.

     

    5.5 Furnish
      Information. It
      shall
      be a condition precedent to the obligation of the Company to take any action
      pursuant to this Article V with respect to the Registrable Securities of any
      Selling Holder that such Holder shall furnish to the Company such information
      regarding the Holder, the Registrable Securities held by the Holder, and the
      intended method of disposition of such securities as shall be reasonably
      required by the Company to effect the registration of such Holder's Registrable
      Securities.

     

    

    5.6 Registration
      Expenses.
      

    

    (a) Expenses
      of Demand Registration.
      The
      Company shall bear and pay all expenses incurred in connection with any
      registration, filing or qualification of Registrable Securities with respect
      to
      registrations pursuant to Section 5.3 for each Holder, including (without
      limitation) all registration, filing, and qualification fees, printers and
      accounting fees relating or apportionable thereto (“Registration Expenses”), but
      excluding underwriting discounts and commissions relating to Registrable
      Securities and excluding any professional fees or costs of accounting, financial
      or legal advisors to any of the Holders.

    

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

    

    

    (b) Expenses
      of Company Registration.
      The
      Company shall bear and pay all Registration Expenses incurred in connection
      with
      any registration, filing or qualification of Registrable Securities with respect
      to registrations pursuant to Section 5.2 for each Holder, but excluding
      underwriting discounts and commissions relating to Registrable Securities and
      excluding any professional fees or costs of accounting, financial or legal
      advisors to any of the Holders.

    

    5.7 Underwriting
      Requirements.
      In
      connection with any offering involving an underwriting of shares of the
      Company's capital stock, the Company shall not be required under Section 5.2
      to
      include any of the Holders' Registrable Securities in such underwriting unless
      they accept the terms of the underwriting as agreed upon between the Company
      and
      the underwriters selected by it (or by other persons entitled to select the
      underwriters), and then only in such quantity as the underwriters determine
      in
      their sole discretion will not jeopardize the success of the offering by the
      Company. If the total amount of securities, including Registrable Securities,
      requested by stockholders to be included in such offering exceeds the amount
      of
      securities sold other than by the Company that the underwriters determine in
      their sole discretion is compatible with the success of the offering, then
      the
      Company shall be required to include in the offering only that number of such
      securities, including Registrable Securities, which the underwriters determine
      in their sole discretion will not jeopardize the success of the offering (the
      securities so included to be apportioned pro rata among the selling stockholders
      according to the total amount of securities entitled to be included therein
      owned by each selling stockholder or in such other proportions as shall mutually
      be agreed to by such selling stockholders). For purposes of the preceding
      parenthetical concerning apportionment, for any selling stockholder who is
      a
      holder of Registrable Securities and is a partnership or corporation, the
      partners, retired partners and stockholders of such holder, or the estates
      and
      family members of any such partners and retired partners and any trusts for
      the
      benefit of any of the foregoing persons shall be deemed to be a single “selling
      stockholder”, and any pro-rata reduction with respect to such “selling
      stockholder” shall be based upon the aggregate amount of shares carrying
      registration rights owned by all entities and individuals included in such
      “selling stockholder”, as defined in this sentence.

    

    5.8 Delay
      of Registration.
      No
      Holder shall have any right to obtain or seek an injunction restraining or
      otherwise delaying any such registration as the result of any controversy that
      might arise with respect to the interpretation or implementation of this
      Article. 

    

    5.9 Indemnification.
      In the
      event that any Registrable Securities are included in a registration statement
      under this Article V:

    

    (a) To
      the
      extent permitted by law, the Company will indemnify and hold harmless each
      Holder, any underwriter (as defined in the Securities Act) for such Holder
      and
      each person, if any, who controls such Holder or underwriter within the meaning
      of the Securities Act or the Exchange Act, against any losses, claims, damages,
      or liabilities (joint or several) to which they may become subject under the
      Securities Act, or the Exchange Act, insofar as such losses, claims, damages,
      or
      liabilities (or actions in respect thereof) arise out of or are based upon
      any
      of the following statements, omissions or violations (collectively a
“Violation”): (i) any untrue statement or alleged untrue statement of a material
      fact contained in such registration statement, including any preliminary
      prospectus or final prospectus contained therein or any amendments or
      supplements thereto, (ii) the omission or alleged omission to state therein
      a
      material fact required to be stated therein, or necessary to make the statements
      therein not misleading, or (iii) any violation or alleged violation by the
      Company of the Securities Act, the Exchange Act, or any rule or regulation
      promulgated under the Securities Act, or the Exchange Act, and the Company
      will
      pay to each such Holder, underwriter or controlling person, as incurred, any
      legal or other expenses reasonably incurred by them in connection with
      investigating or defending any such loss, claim, damage, liability, or action;
      provided, however, that the indemnity agreement contained in this Section 5.9(a)
      shall not apply to amounts paid in settlement of any such loss, claim, damage,
      liability, or action if such settlement is effected without the consent of
      the
      Company (which consent shall not be unreasonably withheld), nor shall the
      Company be liable in any such case for any such loss, claim, damage, liability,
      or action to the extent that it arises out of or is based upon a Violation
      which
      occurs in reliance upon and in conformity with written information furnished
      expressly for use in connection with such registration by any such Holder,
      underwriter or controlling person.

    

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

    

    

    

    (b) To
      the
      extent permitted by law, each Selling Holder will indemnify and hold harmless
      the Company, each of its directors, each of its officers, each person, if any,
      who controls the Company within the meaning of the Securities Act, any
      underwriter, any other Holder selling securities in such registration statement
      and any controlling person of any such underwriter or other Holder, against
      any
      losses, claims, damages, or liabilities (joint or several) to which any of
      the
      foregoing persons may become subject, under the Securities Act, or the Exchange
      Act, insofar as such losses, claims, damages, or liabilities (or actions in
      respect thereto) arise out of or are based upon any Violation, in each case
      to
      the extent (and only to the extent) that such Violation occurs in reliance
      upon
      and in conformity with written information furnished by such Holder expressly
      for use in connection with such registration; and each such Holder will pay,
      as
      incurred, any legal or other expenses reasonably incurred by any person intended
      to be indemnified pursuant to this Section 5.9(b), in connection with
      investigating or defending any such loss, claim, damage, liability, or action;
      provided,
      however,
      that
      the indemnity agreement contained in this Section 5.9(b) shall not apply to
      amounts paid in settlement of any such loss, claim, damage, liability or action
      if such settlement is effected without the consent of the Holder, which consent
      shall not be unreasonably withheld; provided,
      further,
      that, in
      no event shall any indemnity under this Section 5.9(b) exceed such Holder’s
      investment pursuant to this Agreement as set forth on the signature page
      attached hereto.

    

    (c) Promptly
      after receipt by an indemnified party under this Section 5.9 of notice of the
      commencement of any action (including any governmental action), such indemnified
      party shall, if a claim in respect thereof is to be made against any
      indemnifying party under this Section 5.9, deliver to the indemnifying party
      a
      written notice of the commencement thereof and the indemnifying party shall
      have
      the right to participate in, and, to the extent the indemnifying party so
      desires, jointly with any other indemnifying party similarly notified, to assume
      the defense thereof with counsel selected by the indemnifying party and approved
      by the indemnified party (whose approval shall not be unreasonably withheld);
      provided, however, that an indemnified party (together with all other
      indemnified parties which may be represented without conflict by one counsel)
      shall have the right to retain one separate counsel, with the fees and expenses
      to be paid by the indemnifying party, if representation of such indemnified
      party by the counsel retained by the indemnifying party would be inappropriate
      due to actual or potential differing interests between such indemnified party
      and any other party represented by such counsel in such proceeding. The failure
      to deliver written notice to the indemnifying party within a reasonable time
      of
      the commencement of any such action, if prejudicial to its ability to defend
      such action, shall relieve such indemnifying party of any liability to the
      indemnified party under this Section 5.9, but the omission so to deliver written
      notice to the indemnifying party will not relieve it of any liability that
      it
      may have to any indemnified party otherwise than under this Section
      5.9.

    

    (d) If
      the
      indemnification provided for in this Section 5.9 is held by a court of competent
      jurisdiction to be unavailable to an indemnified party with respect to any
      loss,
      liability, claim, damage, or expense referred to therein, then the indemnifying
      party, in lieu of indemnifying such indemnified party hereunder, shall
      contribute to the amount paid or payable by such indemnified party as a result
      of such loss, liability, claim, damage, or expense in such proportion as is
      appropriate to reflect the relative fault of the indemnifying party on the
      one
      hand and of the indemnified party on the other in connection with the statements
      or omissions that resulted in such loss, liability, claim, damage, or expense
      as
      well as any other relevant equitable considerations. The relative fault of
      the
      indemnifying party and of the indemnified party shall be determined by reference
      to, among other things, whether the untrue or alleged untrue statement of a
      material fact or the alleged omission to state a material fact relates to
      information supplied by the indemnifying party or by the indemnified party
      and
      the parties' relative intent, knowledge, access to information, and opportunity
      to correct or prevent such statement or omission.

    

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

    

    

    (e) Notwithstanding
      the foregoing, to the extent that the provisions on indemnification and
      contribution contained in the underwriting agreement entered into in connection
      with the underwritten public offering are in conflict with the foregoing
      provisions, the provisions in the underwriting agreement shall
      control.

    

    (f) The
      obligations of the Company and Holders under this Section 5.9 shall survive
      the
      completion of any offering of Registrable Securities in a registration statement
      under this Article V, and otherwise.

    

    5.10 Reports
      Under Securities Exchange Act of 1934.
      With a
      view to making available to the Holders the benefits of Rule 144 and any other
      rule or regulation of the SEC that may at any time permit a Holder to sell
      securities of the Company to the public without registration or pursuant to
      a
      registration on Form S-3, the Company agrees to:

    

    (a) make
      and
      keep public information available, as those terms are understood and defined
      in
      Rule 144, at all times after 90 days after the effective date of the
      registration statement filed in connection with an IPO or Trading Event by
      the
      Company;

    

    (b) file
      with
      the SEC in a timely manner all reports and other documents required of the
      Company under the Securities Act and the Exchange Act; and

    

    (c) furnish
      to any Holder, so long as the Holder owns any Registrable Securities, forthwith
      upon request (i) a copy of the most recent annual or quarterly report of the
      Company and such other reports and documents so filed by the Company, and (ii)
      such other information as may be reasonably requested in availing any Holder
      of
      any rule or regulation of the SEC which permits the selling of any such
      securities without registration or pursuant to such form.

    

    5.11 Permitted
      Transferees.
      The
      rights to cause the Company to register Registrable Securities granted to the
      Holders by the Company under this Article V may be assigned in full by a Holder
      in connection with a transfer by such Holder of its Registrable Securities
      if:
      (a) such Holder gives prior written notice to the Company; (b) such transferee
      agrees to comply with the terms and provisions of this Agreement; (c) such
      transfer is otherwise in compliance with this Agreement; (d) such transfer
      is
      otherwise effected in accordance with applicable securities laws; and (e) such
      Holder transfers at lease 10,000 shares of Registrable Securities to the
      transferee. Except as specifically permitted by this Section 5.11, the rights
      of
      a Holder with respect to Registrable Securities as set out herein shall not
      be
      transferable to any other Person, and any attempted transfer shall cause all
      rights of such Holder therein to be forfeited. 

    

    5.12 Termination
      of Registration Rights
      The
      right of any Holder to request or demand inclusion in any registration pursuant
      to Section 5.2 and Section 5.3 shall terminate if all shares of Registrable
      Securities held by such Holder may immediately be sold under Rule
      144(k). 

    

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

    

    

    

    
      	VI.	
              MISCELLANEOUS

            

    

    

    6.1 Any
      notice or other communication given hereunder shall be deemed sufficient if
      in
      writing and sent by registered or certified mail, return receipt requested,
      or
      delivered by hand against written receipt therefor, addressed as
      follows:

    

    if
      to the
      Company, to it at:

    

    Ziopharm,
      Inc.

    300
      George Street,

    New
      Haven, Connecticut 06511

    

    Attn:
      Jonathan Lewis, M.D., Ph.D.

    Chief
      Executive Officer

    

    With
      a
      copy to:

    

    Paramount
      BioCapital, Inc.

    787
      Seventh Avenue, 48th
      Floor

    New
      York,
      New York 10019

    Attn:
      Basil Christakos 

    

    if
      to the
      Subscriber, to the Subscriber’s address indicated on the signature page of this
      Agreement. 

    

    Notices
      shall be deemed to have been given or delivered on the date of mailing, except
      notices of change of address, which shall be deemed to have been given or
      delivered when received.

    

    6.2 Except
      as
      otherwise provided herein, this Agreement shall not be changed, modified or
      amended except by a writing signed by the parties to be charged, and this
      Agreement may not be discharged except by performance in accordance with its
      terms or by a writing signed by the party to be charged.

    

    6.3 Subject
      to the provisions of Section 5.11, this Agreement shall be binding upon and
      inure to the benefit of the parties hereto and to their respective heirs, legal
      representatives, successors and assigns. This Agreement sets forth the entire
      agreement and understanding between the parties as to the subject matter hereof
      and merges and supersedes all prior discussions, agreements and understandings
      of any and every nature among them.

    

    6.4 Upon
      the
      execution and delivery of this Agreement by the Subscriber, this Agreement
      shall
      become a binding obligation of the Subscriber with respect to the purchase
      of
      Preferred Shares as herein provided, subject, however, to the right hereby
      reserved by the Company to enter into the same agreements with other subscribers
      and to add and/or delete other persons as subscribers. 

    

    6.5 NOTWITHSTANDING
      THE PLACE WHERE THIS AGREEMENT MAY BE EXECUTED BY ANY OF THE PARTIES HERETO,
      THE
      PARTIES EXPRESSLY AGREE THAT ALL THE TERMS AND PROVISIONS HEREOF SHALL BE
      CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF DELAWARE
      WITHOUT REGARD TO SUCH STATE’S PRINCIPLES OF CONFLICTS OF LAW. IN THE EVENT THAT
      A JUDICIAL PROCEEDING IS NECESSARY, THE SOLE FORUM FOR RESOLVING DISPUTES
      ARISING OUT OF OR RELATING TO THIS AGREEMENT IS THE STATE AND FEDERAL COURTS
      LOCATED IN THE STATE OF DELAWARE. THE PARTIES HEREBY IRREVOCABLY CONSENT TO
      THE
      JURISDICTION OF SUCH COURTS AND AGREE TO SAID VENUE. 

    

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

    

    

    

    6.6 In
      order
      to discourage frivolous claims the parties agree that unless a claimant in
      any
      proceeding arising out of this Agreement succeeds in establishing his claim
      and
      recovering a judgment against another party (regardless of whether such claimant
      succeeds against one of the other parties to the action), then the other party
      shall be entitled to recover from such claimant all of its/their reasonable
      legal costs and expenses relating to such proceeding and/or incurred in
      preparation therefor.

    

    6.7 The
      holding of any provision of this Agreement to be invalid or unenforceable by
      a
      court of competent jurisdiction shall not affect any other provision of this
      Agreement, which shall remain in full force and effect. If any provision of
      this
      Agreement shall be declared by a court of competent jurisdiction to be invalid,
      illegal or incapable of being enforced in whole or in part, such provision
      shall
      be interpreted so as to remain enforceable to the maximum extent permissible
      consistent with applicable law and the remaining conditions and provisions
      or
      portions thereof shall nevertheless remain in full force and effect and
      enforceable to the extent they are valid, legal and enforceable, and no
      provisions shall be deemed dependent upon any other covenant or provision unless
      so expressed herein.

    

    6.8 It
      is
      agreed that a waiver by either party of a breach of any provision of this
      Agreement shall not operate, or be construed, as a waiver of any subsequent
      breach by that same party.

    

    6.9 The
      parties agree to execute and deliver all such further documents, agreements
      and
      instruments and take such other and further action as may be necessary or
      appropriate to carry out the purposes and intent of this Agreement.

    

    6.10 This
      Agreement may be executed in two or more counterparts each of which shall be
      deemed an original, but all of which shall together constitute one and the
      same
      instrument.

    

    6.11 Nothing
      in this Agreement shall create or be deemed to create any rights in any person
      or entity not a party to this Agreement, except (a) for the holders of
      Registrable Securities, (b) for the Placement Agent pursuant to Sections 1.6(a)
      and 2.10 hereof, (c) for the indemnified parties (including without limitation
      the Placement Agent and its sub agents, if any) pursuant to Section1.21 hereof,
      and (d) that the Placement Agent may rely upon the representation and
      acknowledgements of the Subscriber in Articles I and VII hereof.

    

    

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        19

        
          

        

      

      
        
        

      

    

    

    
      	VII.	
              CONFIDENTIAL
                INVESTOR QUESTIONNAIRE

            

    

    

    7.1 The
      Subscriber represents and warrants that he, she or it comes within one category
      marked below, and that for any category marked, he, she or it has truthfully
      set
      forth, where applicable, the factual basis or reason the Subscriber comes within
      that category. ALL INFORMATION IN RESPONSE TO THIS SECTION WILL BE KEPT STRICTLY
      CONFIDENTIAL. The undersigned agrees to furnish any additional information
      which
      the Company deems necessary in order to verify the answers set forth
      below.

    

    
      	Category
              A __	
              The
                undersigned is an individual (not a partnership, corporation, etc.)
                whose
                individual net worth, or joint net worth with his or her spouse,
                presently
                exceeds $1,000,000.

            

    

    

    Explanation.
      In calculating net worth you may include equity in personal property and real
      estate, including your principal residence, cash, short-term investments, stock
      and securities. Equity in personal property and real estate should be based
      on
      the fair market value of such property less debt secured by such
      property.

    

    
      	Category
              B __	
              The
                undersigned is an individual (not a partnership, corporation, etc.)
                who
                had an income in excess of $200,000 in each of the two most recent
                years,
                or joint income with his or her spouse in excess of $300,000 in each
                of
                those years (in each case including foreign income, tax exempt income
                and
                full amount of capital gains and losses but excluding any income
                of other
                family members and any unrealized capital appreciation) and has a
                reasonable expectation of reaching the same income level in the current
                year.

            

    

    

    
      	Category
              C __	
              The
                undersigned is a director or executive officer of the Company which
                is
                issuing and selling the Preferred
                Shares.

            

    

    

    
      	CategoryD__	
              The
                undersigned is a bank; a savings and loan association; insurance
                company;
                registered investment company; registered business development company;
                licensed small business investment company ("SBIC"); or employee
                benefit
                plan within the meaning of Title 1 of ERISA and (a) the investment
                decision is made by a plan fiduciary which is either a bank, savings
                and
                loan association, insurance company or registered investment advisor,
                or
                (b) the plan has total assets in excess of $5,000,000 or (c) is a
                self
                directed plan with investment decisions made solely by persons that
                are
                accredited investors. (describe
                entity)

            

    

    
       

      
        
          

        

      

      
        
          

        

      

       

    

    
      	Category
              E __	
              The
                undersigned is a private business development company as defined
                in
                section 202(a)(22) of the Investment Advisors Act of 1940. (describe
                entity) 

            

    

    

    
      
        

      

    

    
      
        

      

    

    

    
      	Category
              F __	
              The
                undersigned is either a corporation, partnership, Massachusetts business
                trust, or non-profit organization within the meaning of Section 501(c)(3)
                of the Internal Revenue Code, in each case not formed for the specific
                purpose of acquiring the Preferred Shares and with total assets in
                excess
                of $5,000,000. (describe entity)

            

    

     

     

    
      
        

      

    

    
      
        

      

    

    

    
      
        
        

      

      
        20

        
          

        

      

      
        
        

      

    

    

    

    
      	Category
              G __	
              The
                undersigned is a trust with total assets in excess of $5,000,000,
                not
                formed for the specific purpose of acquiring the Preferred Shares,
                where
                the purchase is directed by a "sophisticated investor" as defined
                in
                Regulation 506(b)(2)(ii) under the
                Act.

            

    

    

    
      	Category
              H __	
              The
                undersigned is an entity (other than a trust) in which all of the
                equity
                owners are "accredited investors" within one or more of the above
                categories. If relying upon this Category alone, each equity owner
                must
                complete a separate copy of this Agreement. (describe
                entity)

            

    

    
       

      
        
          

        

      
 

    
      	Category
              I __	
              The
                undersigned is not within any of the categories above and is therefore
                not
                an accredited investor.

            

    

    

    The
      undersigned agrees that the undersigned will notify the Company at any time
      on
      or prior to the Closing Date in the event that the representations and
      warranties in this Agreement shall cease to be true, accurate and
      complete.

    

    7.2 SUITABILITY
      (please
      answer each question)

      

    (a)
      For
      an individual Subscriber, please describe your current employment, including
      the
      company by which you are employed and its principal business:

     
      

    
      
        

      

    

    
      
        

      

    

    
      
        

      

    

    
      
        

      

    

       

    (b)
      For
      an individual Subscriber, please describe any college or graduate degrees held
      by you:

    
       
        

      
        
          

        

      

      
        
          

        

      

      
        
          

        

      

      
        
          

        

           

      

    

    (c)
      For
      all Subscribers, please list types of prior investments: 

    
       
        

      
        
          

        

      

      
        
          

        

      

      
        
          

        

      

      
        
          

        

      

       

      

      (d)
        For
        all Subscribers, please state whether you have you participated in other
        private
        placements
        before:

      

      YES_______   NO_______

    

    
      

    

    
      
        
        

      

      
        21

        
          

        

      

      
        
        

      

    

    

    

    (e)
      If
      your answer to question (d) above was “YES”, please indicate frequency of such
      prior participation in private
      placements
      of:

     

    

      
        	 	
                Public
                  

                Companies

              	 	
                Private

                Companies

              	 	
                Public
                  or Private

                Biotechnology
                  Companies

              
	 	 	 	 	 	 
	
                Frequently

              	 	 	 	 	 
	
                Occasionally

              	 	 	 	 	 
	
                Never

              	
                 

              	 	
                 

              	 	
                 

              

      
   

     
      

     

    (f)
      For
      individual Subscribers, do you expect your current level of income to
      significantly decrease in the foreseeable future:

    

    YES_______   NO_______

    

    (g)
      For
      trust, corporate, partnership and other institutional Subscribers, do you expect
      your total assets to significantly decrease in the foreseeable future:

    

    YES_______   NO_______

    

    (h)
      For
      all Subscribers, do you have any other investments or contingent liabilities
      which you reasonably anticipate could cause you to need sudden cash requirements
      in excess of cash readily available to you: 

    

    YES_______   NO_______

    

    (i)
      For
      all Subscribers, are you familiar with the risk aspects and the non-liquidity
      of
      investments such as the securities for which you seek to subscribe?

    

    YES_______   NO_______

    

    (j)
      For
      all Subscribers, do you understand that there is no guarantee of financial
      return on this investment and that you run the risk of losing your entire
      investment?

    

    YES_______   NO_______

    

    7.3 MANNER
      IN WHICH TITLE IS TO BE HELD.
      (circle
      one)

    

    (a) Individual
      Ownership

    (b) Community
      Property

    
      
        	
              	(c)	
                 
                  Joint Tenant with Right of Survivorship
                  (both parties must
                  sign)

              

      

    

    (d) Partnership*

    (e) Tenants
      in Common

    (f) Company*

    (g) Trust*

    (h) Other

    

    
      
        
        

      

      
        22

        
          

        

      

      
        
        

      

    

    

    

    *If
      Preferred Shares are being subscribed for by an entity, the attached Certificate
      of Signatory must also be completed.

    

    7.4 NASD
      AFFILIATION.

    

    Are
      you
      affiliated or associated with an NASD member firm (please check
      one):

    

    Yes
      _________  No
      __________

    

    If
      Yes,
      please describe:

    _________________________________________________________

    _________________________________________________________

    _________________________________________________________

    

    *If
      Subscriber is a Registered Representative with an NASD member firm, have the
      following acknowledgment signed by the appropriate party:

    

    The
      undersigned NASD member firm acknowledges receipt of the notice required by
      Article 3, Sections 28(a) and (b) of the Rules of Fair Practice.

    

    _________________________________

    Name
      of
      NASD Member Firm

    

    By:
      ______________________________

    Authorized
      Officer

    

    Date:
      ____________________________

    

    7.5 The
      undersigned is informed of the significance to the Company of the foregoing
      representations and answers contained in the Confidential Investor Questionnaire
      contained in this Article VII and such answers have been provided under the
      assumption that the Company will rely on them.

    

    

    

    

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        23

        
          

        

      

      
        
        

      

    

    

    NUMBER
      OF PREFERRED SHARES                    
       X
      Per Share Price
      =                     
      (the "Purchase Price") 

     

    

      
        	 	 	 
	
                Signature

              	 	
                Signature
                  (if purchasing jointly)

              
	 	 	 
	
                Name
                  Typed or Printed

              	 	
                Name
                  Typed or Printed

              
	 	 	 
	 	 	 
	
                Entity
                  Name

              	 	
                Entity
                  Name

              
	 	 	 
	
                Address

              	 	
                Address

              
	 	 	 
	
                City,
                  State and Zip Code

              	 	
                City,
                  State and Zip Code

              
	 	 	 
	
                Telephone-Business

              	 	
                Telephone-Business

              
	 	 	 
	
                Telephone-Residence

              	 	
                Telephone-Residence

              
	 	 	 
	
                Facsimile-Business

              	 	
                Facsimile-Business

              
	 	 	 
	
                Facsimile-Residence

              	 	
                Facsimile-Residence

              
	 	 	 
	 	 	 
	
                Tax
                  ID # or Social Security #

              	 	
                Tax
                  ID # or Social Security # 

              
	 	 	 
	
                Name
                  in which securities should be issued:

              	 	 

      

      Dated:
        __________ , 2005

    

     

    

    This
      Subscription Agreement is agreed to and accepted as of
      _________________ ,
      2005. 

     

    
      	 	 	 
	 	ZIOPHARM,
              INC.
	 
 	 
 	 
 
	Date: 	By:  	 
	 	
              
Name:
              Dr. Jonathan Lewis, MD, Ph.D.
	 	Title: Chief
              Executive Officer

    

    

    
 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    CERTIFICATE
      OF SIGNATORY

    

    (To
      be
      completed if Preferred Shares are

    being
      subscribed for by an entity)

    

    

    I,____________________________,
      am the ____________________________ of
      __________________________________________ (the "Entity").

    

    I
      certify
      that I am empowered and duly authorized by the Entity to execute and carry
      out
      the terms of the Subscription Agreement and to purchase and hold the Preferred
      Shares, and certify further that the Subscription Agreement has been duly and
      validly executed on behalf of the Entity and constitutes a legal and binding
      obligation of the Entity.

    

    IN
      WITNESS WHEREOF, I have set my hand this _____ day of _________________,
      2005.

    

    

    
      
        

      
(Signature)Unassociated Document

    

       

      WARRANT
        AGREEMENT

       

      This
        Warrant Agreement (this “Agreement”) made as of _________ ___, 2005, by and
        between Everest Acquisition Corporation, a Delaware corporation, with offices
        at
        15/F, The Hong Kong Club Building, 3A Chater Road Central, Hong Kong
        (“Company”), and Continental Stock Transfer & Trust Company, a New York
        corporation, with offices at 17 Battery Place, New York, New York
        10004
        (“Warrant Agent”).

       

      WHEREAS,
        the Company is engaged in a public offering (“Public Offering”) of Units
        (“Units”) and, in connection therewith, has determined to issue and deliver up
        to 36,800,000 warrants (“Public Warrants”) to the public investors, each of such
        Public Warrants evidencing the right of the holder thereof to purchase one
        share
        of common stock, par value $.0001 per share, of the Company’s Common Stock
        (“Common Stock”) for $5.00, subject to adjustment as described herein;

       

      WHEREAS,
        Jesup & Lamont Securities Corporation (“Jesup & Lamont”), which is
        acting as the representative of the underwriters in the IPO, has agreed that
        during the 45-day trading period beginning after separate trading of the
        Public
        Warrants commences, it will purchase, in the aggregate, 1,250,000 Public
        Warrants at prices not to exceed $0.70 per warrant; and

       

      WHEREAS,
        the Company has determined to issue and deliver up to 800,000 warrants
        (“Underwriters’ Warrants”) to Jesup & Lamont or its designees, each of such
        Underwriters’ Warrants evidencing the right of the holder thereof to purchase
        one share of Common Stock for $6.25, subject to adjustment as described herein
        (the Underwriters’ Warrants together with the Public Warrants, being referred to
        herein as the “Warrants”),

       

      WHEREAS,
        the Company has filed with the Securities and Exchange Commission a Registration
        Statement, No. 333-______ on Form S-1 (“Registration Statement”) for the
        registration under the Securities Act of 1933, as amended (“Act”) of, among
        other securities, the Warrants and the Common Stock issuable upon exercise
        of
        the Warrants; and

       

      WHEREAS,
        the Company desires the Warrant Agent to act on behalf of the Company, and
        the
        Warrant Agent is willing to so act, in connection with the issuance,
        registration, transfer, exchange, redemption and exercise of the Warrants;
        and

       

      WHEREAS,
        the Company desires to provide for the form and provisions of the Warrants,
        the
        terms upon which they shall be issued and exercised, and the respective rights,
        limitation of rights, and immunities of the Company, the Warrant Agent, and
        the
        holders of the Warrants; and

       

      WHEREAS,
        all acts and things have been done and performed which are necessary to make
        the
        Warrants, when executed on behalf of the Company and countersigned by or
        on
        behalf of the Warrant Agent, as provided herein, the valid, binding and legal
        obligations of the Company, and to authorize the execution and delivery of
        this
        Agreement.

       

      NOW,
        THEREFORE, in consideration of the mutual agreements herein contained, the
        parties hereto agree as follows:

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      1. 
Appointment
        of Warrant Agent.
        The
        Company hereby appoints the Warrant Agent to act as agent for the Company
        for
        the Warrants, and the Warrant Agent hereby accepts such appointment and agrees
        to perform the same in accordance with the terms and conditions set forth
        in
        this Agreement.

       

      2.
         
        Warrants.

       

      2.1 
Form
        of Warrant.
        Each
        Public Warrant and Underwriters’ Warrants shall be issued in registered form
        only, shall be in substantially the forms of Exhibit A and Exhibit B hereto,
        respectively, the provisions of which are incorporated herein and shall be
        signed by, or bear the facsimile signature of, the Chairman of the Board
        or
        Chief Executive Officer and Treasurer, Secretary or Assistant Secretary of
        the
        Company and shall bear a facsimile of the Company’s seal. In the event the
        person whose facsimile signature has been placed upon any Warrant shall have
        ceased to serve in the capacity in which such person signed the Warrant before
        such Warrant is issued, it may be issued with the same effect as if he or
        she
        had not ceased to be such at the date of issuance.

       

      2.2 
Effect
        of Countersignature.
        Unless
        and until countersigned by the Warrant Agent pursuant to this Agreement,
        a
        Warrant shall be invalid and of no effect and may not be exercised by the
        holder
        thereof.

       

      2.3 
Registration.
        

       

      2.3.1 
Warrant
        Register.
        The
        Warrant Agent shall maintain books (“Warrant Register”) for the registration of
        original issuance and the registration of transfer of the Warrants. Upon
        the
        initial issuance of the Warrants, the Warrant Agent shall issue and register
        the
        Warrants in the names of the respective holders thereof in such denominations
        and otherwise in accordance with instructions delivered to the Warrant Agent
        by
        the Company.

       

      2.3.2 
Registered
        Holder.
        Prior
        to due presentment for registration of transfer of any Warrant, the Company
        and
        the Warrant Agent may deem and treat the person in whose name such Warrant
        shall
        be registered upon the Warrant Register (“registered holder”), as the absolute
        owner of such Warrant and of each Warrant represented thereby (notwithstanding
        any notation of ownership or other writing on the Warrant Certificate made
        by
        anyone other than the Company or the Warrant Agent), for the purpose of any
        exercise thereof, and for all other purposes, and neither the Company nor
        the
        Warrant Agent shall be affected by any notice to the contrary.

      
      

      2.4 
Detachability
        of Warrants.
        The
        securities comprising the Units will not be separately transferable until
        20
        trading days following the earlier to occur of the expiration to occur of
        the
        expiration of Jesup & Lamont’s over-allotment option or its exercise in
        full, but in no event will Jesup & Lamont allow separate trading of the
        securities comprising the Units until the Company files a Current Report
        on Form
        8-K, which includes an audited balance sheet reflecting the receipt by the
        Company of the gross proceeds of the Public Offering including the proceeds
        received by the Company from the exercise of the Underwriter's over-allotment
        option, if the over-allotment option is exercised prior to the filing of
        the
        Form 8-K.

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

       

      2.5 
Public
        Warrants and Underwriters’ Warrants.
        Except
        for the exercise price, the Underwriters’ Warrants shall have the same terms and
        be in the same form as the Public Warrants.

       

      3. 
Terms
        and Exercise of Warrants.

       

      3.1 
Warrant
        Price.
        Each
        Public Warrant shall, when countersigned by the Warrant Agent, entitle the
        registered holder thereof, subject to the provisions of such Public Warrant
        and
        of this Warrant Agreement, to purchase from the Company the number of shares
        of
        Common Stock stated therein, at the price of $5.00 per whole share, subject
        to
        the adjustments provided in Section 4 hereof and in the last sentence of
        this
        Section 3.1. Each Underwriters’ Warrant shall, when countersigned by the Warrant
        Agent, entitle the registered holder thereof, subject to the provisions of
        such
        Underwriters’ Warrant and of this Warrant Agreement, to purchase from the
        Company the number of shares of Common Stock stated therein, at the price
        of
        $6.25 per whole share, subject to the adjustments provided in Section 4 hereof
        and in the last sentence of this Section 3.1. The term “Warrant Price” as used
        in this Warrant Agreement refers to the price per share at which Common Stock
        may be purchased at the time a Warrant is exercised. The Company in its sole
        discretion may lower the Warrant Price at any time prior to the Expiration
        Date;
        provided that any such reduction shall be identical in percentage terms among
        all of the Warrants. 

       

      3.2 
Duration
        of Warrants.
        A
        Warrant may be exercised only during the period (“Exercise Period”) commencing
        on the later of the consummation by the Company of a merger, capital stock
        exchange, asset acquisition or other similar business combination (“Business
        Combination”) (as described more fully in the Company’s Registration Statement)
        or _________ ___, 2006, and terminating at 5:00 p.m., New York City time
        on the
        earlier to occur of (i) ________ ___, 2009 or (ii) the date fixed
        for
        redemption of the Warrants as provided in Section 6 of this Agreement
        (“Expiration Date”). Except with respect to the right to receive the Redemption
        Price (as set forth in Section 6 hereunder), each Warrant not exercised on
        or
        before the Expiration Date shall become void, and all rights thereunder and
        all
        rights in respect thereof under this Agreement shall cease at the close of
        business on the Expiration Date. The Company in its sole discretion may extend
        the duration of the Warrants by delaying the Expiration Date; provided that
        any
        such extension shall be identical in duration among all of the Warrants.
        

       

      3.3 
Exercise
        of Warrants.

       

      3.3.1 
Payment.
        Subject
        to the provisions of the Warrant and this Warrant Agreement, a Warrant, when
        countersigned by the Warrant Agent, may be exercised by the registered holder
        thereof by surrendering it, at the office of the Warrant Agent, or at the
        office
        of its successor as Warrant Agent, in the Borough of Manhattan, City and
        State
        of New York, with the subscription form, as set forth in the Warrant, duly
        executed, and by paying in full, in lawful money of the United States, in
        cash,
        good certified check or good bank draft payable to the order of the Company,
        the
        Warrant Price for each full share of Common Stock as to which the Warrant
        is
        exercised and any and all applicable taxes due in connection with the exercise
        of the Warrant, the exchange of the Warrant for the Common Stock, and the
        issuance of the Common Stock.

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

       

      3.3.2 
Issuance
        of Certificates.
        As soon
        as practicable after the exercise of any Warrant and the clearance of the
        funds
        in payment of the Warrant Price, the Company shall issue to the registered
        holder of such Warrant a certificate or certificates for the number of full
        shares of Common Stock to which he is entitled, registered in such name or
        names
        as may be directed by him, and if such Warrant shall not have been exercised
        in
        full, a new countersigned Warrant for the number of shares as to which such
        Warrant shall not have been exercised. Notwithstanding the foregoing, the
        Company shall not be obligated to deliver any securities pursuant to the
        exercise of a Warrant unless (i) a registration statement under the Act with
        respect to the Common Stock is effective or (ii) in the opinion of counsel
        to
        the Company, the exercise of the Warrants is exempt from the registration
        requirements of the Act and such securities are qualified for sale or exempt
        from qualification under applicable securities laws of the states or other
        jurisdictions in which the registered holders reside. Warrants may not be
        exercised by, or securities issued to, any registered holder in any state
        in
        which such exercise would be unlawful. 

       

      3.3.3 
Valid
        Issuance.
        All
        shares of Common Stock issued upon the proper exercise of a Warrant in
        conformity with this Agreement shall be validly issued, fully paid and
        nonassessable.

       

      3.3.4 
Date
        of Issuance.
        Each
        person in whose name any such certificate for shares of Common Stock is issued
        shall for all purposes be deemed to have become the holder of record of such
        shares on the date on which the Warrant was surrendered and payment of the
        Warrant Price was made, irrespective of the date of delivery of such
        certificate, except that, if the date of such surrender and payment is a
        date
        when the stock transfer books of the Company are closed, such person shall
        be
        deemed to have become the holder of such shares at the close of business
        on the
        next succeeding date on which the stock transfer books are open.

       

      4. 
Adjustments.

       

      4.1 
Stock
        Dividends Split Ups.
        If
        after the date hereof, and subject to the provisions of Section 4.6, the
        number
        of outstanding shares of Common Stock is increased by a stock dividend payable
        in shares of Common Stock, or by a split up of shares of Common Stock, or
        other
        similar event, then, on the effective date of such stock dividend, split
        up or
        similar event, the number of shares issuable on exercise of each Warrant
        shall
        be increased in proportion to such increase in outstanding shares.

       

      4.2 
Aggregation
        of Shares.
        If
        after the date hereof, and subject to the provisions of Section 4.6, the
        number
        of outstanding shares of Common Stock is decreased by a consolidation,
        combination, reverse stock split or reclassification of shares of Common
        Stock
        or other similar event, then, on the effective date of such consolidation,
        combination, reverse stock split, reclassification or similar event, the
        number
        of shares issuable on exercise of each Warrant shall be decreased in proportion
        to such decrease in outstanding shares.

       

      4.3 
Adjustments
        in Exercise Price.
        Whenever the number of shares of Common Stock purchasable upon the exercise
        of
        the Warrants is adjusted, as provided in Section 4.1 and 4.2 above, the Warrant
        Price shall be adjusted (to the nearest cent) by multiplying such Warrant
        Price
        immediately prior to such adjustment by a fraction (x) the numerator of which
        shall be the number of shares of Common Stock purchasable upon the exercise
        of
        the Warrants immediately prior to such adjustment, and (y) the denominator
        of
        which shall be the number of shares of Common Stock so purchasable immediately
        thereafter.

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

       

       

      4.4 
Replacement
        of Securities upon Reorganization, etc.
        In case
        of any reclassification or reorganization of the outstanding shares of Common
        Stock (other than a change covered by Section 4.1 or 4.2 hereof or that solely
        affects the par value of such shares of Common Stock), or in the case of
        any
        merger or consolidation of the Company with or into another corporation (other
        than a consolidation or merger in which the Company is the continuing
        corporation and that does not result in any reclassification or reorganization
        of the outstanding shares of Common Stock), or in the case of any sale or
        conveyance to another corporation or entity of the assets or other property
        of
        the Company as an entirety or substantially as an entirety in connection
        with
        which the Company is dissolved, the Warrant holders shall thereafter have
        the
        right to purchase and receive, upon the basis and upon the terms and conditions
        specified in the Warrants and in lieu of the shares of Common Stock of the
        Company immediately theretofore purchasable and receivable upon the exercise
        of
        the rights represented thereby, the kind and amount of shares of stock or
        other
        securities or property (including cash) receivable upon such reclassification,
        reorganization, merger or consolidation, or upon a dissolution following
        any
        such sale or transfer, by a Warrant holder of the number of shares of Common
        Stock of the Company obtainable upon exercise of the Warrants immediately
        prior
        to such event; and if any reclassification also results in a change in shares
        of
        Common Stock covered by Section 4.1 or 4.2, then such adjustment shall be
        made
        pursuant to Sections 4.1, 4.2, 4.3 and this Section 4.4. The provisions
        of
        this Section 4.4 shall similarly apply to successive reclassifications,
        reorganizations, mergers or consolidations, sales or other
        transfers.

       

      4.5 
Notices
        of Changes in Warrant.
        Upon
        every adjustment of the Warrant Price or the number of shares issuable on
        exercise of a Warrant, the Company shall give written notice thereof to the
        Warrant Agent, which notice shall state the Warrant Price resulting from
        such
        adjustment and the increase or decrease, if any, in the number of shares
        purchasable at such price upon the exercise of a Warrant, setting forth in
        reasonable detail the method of calculation and the facts upon which such
        calculation is based. Upon the occurrence of any event specified in Sections
        4.1, 4.2, 4.3 or 4.4, then, in any such event, the Company shall give written
        notice to the Warrant holder, at the last address set forth for such holder
        in
        the warrant register, of the record date or the effective date of the event.
        Failure to give such notice, or any defect therein, shall not affect the
        legality or validity of such event.

       

      4.6 
No
        Fractional Shares.
        Notwithstanding any provision contained in this Warrant Agreement to the
        contrary, the Company shall not issue fractional shares upon exercise of
        Warrants. If, by reason of any adjustment made pursuant to this Section 4,
        the
        holder of any Warrant would be entitled, upon the exercise of such Warrant,
        to
        receive a fractional interest in a share, the Company shall, upon such exercise,
        round up to the nearest whole number the number of the shares of Common Stock
        to
        be issued to the Warrant holder.

       

      4.7 
Form
        of Warrant.
        The
        forms of Public Warrant and Underwriters’ Warrant need not be changed because of
        any adjustment pursuant to this Section 4, and Warrants issued after such
        adjustment may state the same Warrant Price and the same number of shares
        as is
        stated in the Warrants initially issued pursuant to this Agreement. However,
        the
        Company may at any time in its sole discretion make any change in the form
        of
        Warrant that the Company may deem appropriate and that does not affect the
        substance thereof, and any Warrant thereafter issued or countersigned, whether
        in exchange or substitution for an outstanding Warrant or otherwise, may
        be in
        the form as so changed.

      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

       

       

      4.8 
Notice
        of Certain Transactions.
        In the
        event that the Company shall propose to (a) offer the holders of its Common
        Stock rights to subscribe for or to purchase any securities convertible into
        shares of Common Stock or shares of stock of any class or any other securities,
        rights or options, (b) issue any rights, options or warrants entitling the
        holders of Common Stock to subscribe for shares of Common Stock or (c) make
        a
        tender offer or exchange offer with respect to the Common Stock, the Company
        shall send to the Warrant holders a notice of such proposed action or offer.
        Such notice shall be mailed to the registered holders at their addresses
        as they
        appear in the Warrant Register, which shall specify the record date for the
        purposes of such dividend, distribution or rights, or the date such issuance
        or
        event is to take place and the date of participation therein by the holders
        of
        Common Stock, if any such date is to be fixed, and shall briefly indicate
        the
        effect of such action on the Common Stock and on the number and kind of any
        other shares of stock and on other property, if any, and the number of shares
        of
        Common Stock and other property, if any, issuable upon exercise of each Warrant
        and the Warrant Price after giving effect to any adjustment pursuant to this
        Article 4 which would be required as a result of such action. Such notice
        shall
        be given as promptly as practicable after the Board of Directors of the Company
        (the “Board”) has determined to take any such action and (x) in the case of any
        action covered by clause (a) or (b) above at least 10 days prior to the record
        date for determining the holders of the Common Stock for purposes of such
        action
        or (y) in the case of any other such action at least 20 days prior to the
        date
        of the taking of such proposed action or the date of participation therein
        by
        the holders of Common Stock, whichever shall be the earlier.

       

      4.9 
Other
        Events.
        If any
        event occurs as to which the foregoing provisions of this Article 4 are not
        strictly applicable or, if strictly applicable, would not, in the good faith
        judgment of the Board, fairly and adequately protect the purchase rights
        of the
        registered holders of the Warrants in accordance with the essential intent
        and
        principles of such provisions, then the Board shall make such adjustments
        in the
        application of such provisions, in accordance with such essential intent
        and
        principles, as shall be reasonably necessary, in the good faith opinion of
        the
        Board, to protect such purchase rights as aforesaid.

       

      5. 
Transfer
        and Exchange of Warrants.

       

      5.1 
Registration
        of Transfer.
        The
        Warrant Agent shall register the transfer, from time to time, of any outstanding
        Warrant upon the Warrant Register, upon surrender of such Warrant for transfer,
        properly endorsed with signatures properly guaranteed and accompanied by
        appropriate instructions for transfer. Upon any such transfer, a new Warrant
        representing an equal aggregate number of Warrants shall be issued and the
        old
        Warrant shall be cancelled by the Warrant Agent. The Warrants so cancelled
        shall
        be delivered by the Warrant Agent to the Company from time to time upon
        request.

      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

       

       

      5.2 
Procedure
        for Surrender of Warrants.
        Warrants may be surrendered to the Warrant Agent, together with a written
        request for exchange or transfer, and thereupon the Warrant Agent shall issue
        in
        exchange therefor one or more new Warrants as requested by the registered
        holder
        of the Warrants so surrendered, representing an equal aggregate number of
        Warrants; provided, however, that in the event that a Warrant surrendered
        for
        transfer bears a restrictive legend, the Warrant Agent shall not cancel such
        Warrant and issue new Warrants in exchange therefor until the Warrant Agent
        has
        received an opinion of counsel for the Company stating that such transfer
        may be
        made and indicating whether the new Warrants must also bear a restrictive
        legend.

       

      5.3 
Fractional
        Warrants.
        The
        Warrant Agent shall not be required to effect any registration of transfer
        or
        exchange which will result in the issuance of a warrant certificate for a
        fraction of a warrant.

       

      5.4 
Service
        Charges.
        No
        service charge shall be made for any exchange or registration of transfer
        of
        Warrants.

       

      5.5 
Warrant
        Execution and Countersignature.
        The
        Warrant Agent is hereby authorized to countersign and to deliver, in accordance
        with the terms of this Agreement, the Warrants required to be issued pursuant
        to
        the provisions of this Section 5, and the Company, whenever required by the
        Warrant Agent, will supply the Warrant Agent with Warrants duly executed
        on
        behalf of the Company for such purpose. 

       

      6. 
Redemption.

       

      6.1 
Redemption.
        Subject
        to Section 6.4 hereof, not less than all of the outstanding Warrants may
        be
        redeemed, at the option of the Company, at any time after they become
        exercisable and prior to their expiration, at the office of the Warrant Agent,
        upon the notice referred to in Section 6.2, at the price of $.01 per Warrant
        (“Redemption Price”), provided that the last sales price of the Common Stock has
        been equal to or greater than $8.50 per share, on each of twenty (20) trading
        days within any thirty (30) trading day period ending on the third business
        day
        prior to the date on which notice of redemption is given. The provisions
        of this
        Section 6.1 may not be modified, amended or deleted without the prior written
        consent of Jesup & Lamont.

       

      6.2 
Date
        Fixed for, and Notice of, Redemption.
        In the
        event the Company shall elect to redeem all of the Warrants, the Company
        shall
        fix a date for the redemption. Notice of redemption shall be mailed by first
        class mail, postage prepaid, by the Company not less than 30 days prior to
        the
        date fixed for redemption to the registered holders of the Warrants to be
        redeemed at their last addresses as they shall appear on the registration
        books.
        Any notice mailed in the manner herein provided shall be conclusively presumed
        to have been duly given whether or not the registered holder received such
        notice.

       

      6.3 
Exercise
        After Notice of Redemption.
        The
        Warrants may be exercised in accordance with Section 3 of this Agreement
        at any
        time after notice of redemption shall have been given by the Company pursuant
        to
        Section 6.2 hereof and prior to the time and date fixed for redemption. On
        and
        after the redemption date, the record holder of the Warrants shall have no
        further rights except to receive, upon surrender of the Warrants, the Redemption
        Price.

      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

      

      
      

       

      6.4 
Outstanding
        Warrants Only.
        The
        Company understands that the redemption rights provided for by this Section
        6
        apply only to outstanding Warrants. To the extent a person holds rights to
        purchase Warrants, such purchase rights shall not be extinguished by redemption.
        However, once such purchase rights are exercised, the Company may redeem
        the
        Warrants issued upon such exercise provided that the criteria for redemption
        is
        met, including the opportunity of the Warrant holder to exercise prior to
        redemption pursuant to Section 6.3. The provisions of this Section 6.4 may
        not
        be modified, amended or deleted without the prior written consent of Jesup
&
        Lamont.

       

      7. 
Other
        Provisions Relating to Rights of Holders of Warrants.

       

      7.1 
No
        Rights as Stockholder.
        A
        Warrant does not entitle the registered holder thereof to any of the rights
        of a
        stockholder of the Company, including, without limitation, the right to receive
        dividends, or other distributions, exercise any preemptive rights to vote
        or to
        consent or to receive notice as stockholders in respect of the meetings of
        stockholders or the election of directors of the Company or any other
        matter.

       

      7.2 
Lost,
        Stolen, Mutilated, or Destroyed Warrants.
        If any
        Warrant is lost, stolen, mutilated, or destroyed, the Company and the Warrant
        Agent may on such terms as to indemnity or otherwise as they may in their
        discretion impose (which shall, in the case of a mutilated Warrant, include
        the
        surrender thereof), issue a new Warrant of like denomination, tenor, and
        date as
        the Warrant so lost, stolen, mutilated, or destroyed. Any such new Warrant
        shall
        constitute a substitute contractual obligation of the Company, whether or
        not
        the allegedly lost, stolen, mutilated, or destroyed Warrant shall be at any
        time
        enforceable by anyone.

       

      7.3 
Reservation
        of Common Stock.
        The
        Company shall at all times reserve and keep available a number of its authorized
        but unissued shares of Common Stock that will be sufficient to permit the
        exercise in full of all outstanding Warrants issued pursuant to this
        Agreement.

       

      7.4 
Registration
        of Common Stock.
        The
        Company agrees that prior to the commencement of the Exercise Period, it
        shall
        file with the Securities and Exchange Commission a post-effective amendment
        to
        the Registration Statement, or a new registration statement, for the
        registration, under the Act, of, and it shall take such action as is necessary
        to qualify for sale, in those states in which the Warrants were initially
        offered by the Company, the Common Stock issuable upon exercise of the Warrants.
        In either case, the Company will use its best efforts to cause the same to
        become effective on or prior to the commencement of the Exercise Period and
        to
        maintain the effectiveness of such registration statement until the expiration
        of the Public Warrants and Underwriters’ Warrants in accordance with the
        provisions of this Agreement. The provisions of this Section 7.4 may not
        be
        modified, amended or deleted without the prior written consent of Jesup &
        Lamont.

       

      8. 
Concerning
        the Warrant Agent and Other Matters.

       

      8.1 
Payment
        of Taxes.
        The
        Company will from time to time promptly pay all taxes and charges that may
        be
        imposed upon the Company or the Warrant Agent in respect of the issuance
        or
        delivery of shares of Common Stock upon the exercise of Warrants, but the
        Company shall not be obligated to pay any transfer taxes in respect of the
        Warrants or such shares.

      
        
          
          

        

        
          8

          
            

          

        

        
          
          

        

      

       

       

      8.2 
Resignation,
        Consolidation, or Merger of Warrant Agent.

       

      8.2.1 
Appointment
        of Successor Warrant Agent.
        The
        Warrant Agent, or any successor to it hereafter appointed, may resign its
        duties
        and be discharged from all further duties and liabilities hereunder after
        giving
        sixty (60) days’ notice in writing to the Company. If the office of the Warrant
        Agent becomes vacant by resignation or incapacity to act or otherwise, the
        Company shall appoint in writing a successor Warrant Agent in place of the
        Warrant Agent. If the Company shall fail to make such appointment within
        a
        period of 30 days after it has been notified in writing of such resignation
        or
        incapacity by the Warrant Agent or by the holder of the Warrant (who shall,
        with
        such notice, submit his Warrant for inspection by the Company), then the
        holder
        of any Warrant may apply to the Supreme Court of the State of New York for
        the
        County of New York for the appointment of a successor Warrant Agent. Any
        successor Warrant Agent, whether appointed by the Company or by such court,
        shall be a corporation organized and existing under the laws of the State
        of New
        York, in good standing and having its principal office in the Borough of
        Manhattan, City and State of New York, and authorized under such laws to
        exercise corporate trust powers and subject to supervision or examination
        by
        federal or state authority. After appointment, any successor Warrant Agent
        shall
        be vested with all the authority, powers, rights, immunities, duties, and
        obligations of its predecessor Warrant Agent with like effect as if originally
        named as Warrant Agent hereunder, without any further act or deed; but if
        for
        any reason it becomes necessary or appropriate, the predecessor Warrant Agent
        shall execute and deliver, at the expense of the Company, an instrument
        transferring to such successor Warrant Agent all the authority, powers, and
        rights of such predecessor Warrant Agent hereunder; and upon request of any
        successor Warrant Agent the Company shall make, execute, acknowledge, and
        deliver any and all instruments in writing for more fully and effectually
        vesting in and confirming to such successor Warrant Agent all such authority,
        powers, rights, immunities, duties, and obligations.

       

      8.2.2 
Notice
        of Successor Warrant Agent.
        In the
        event a successor Warrant Agent shall be appointed, the Company shall give
        notice thereof to the predecessor Warrant Agent and the transfer agent for
        the
        Common Stock not later than the effective date of any such
        appointment.

       

      8.2.3 
Merger
        or Consolidation of Warrant Agent.
        Any
        corporation into which the Warrant Agent may be merged or with which it may
        be
        consolidated or any corporation resulting from any merger or consolidation
        to
        which the Warrant Agent shall be a party shall be the successor Warrant Agent
        under this Agreement without any further act.

       

      8.3 
Fees
        and Expenses of Warrant Agent.

       

      8.3.1 
Remuneration.
        The
        Company agrees to pay the Warrant Agent reasonable remuneration for its services
        as such Warrant Agent hereunder and will reimburse the Warrant Agent upon
        demand
        for all expenditures that the Warrant Agent may reasonably incur in the
        execution of its duties hereunder.

      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      

      

       

      8.3.2 
Further
        Assurances.
        The
        Company agrees to perform, execute, acknowledge, and deliver or cause to
        be
        performed, executed, acknowledged, and delivered all such further and other
        acts, instruments, and assurances as may reasonably be required by the Warrant
        Agent for the carrying out or performing of the provisions of this
        Agreement.

       

      8.4 
Liability
        of Warrant Agent.

       

      8.4.1 
Reliance
        on Company Statement.
        Whenever in the performance of its duties under this Warrant Agreement, the
        Warrant Agent shall deem it necessary or desirable that any fact or matter
        be
        proved or established by the Company prior to taking or suffering any action
        hereunder, such fact or matter (unless other evidence in respect thereof
        be
        herein specifically prescribed) may be deemed to be conclusively proved and
        established by a statement signed by the President or Chairman of the Board
        of
        the Company and delivered to the Warrant Agent. The Warrant Agent may rely
        upon
        such statement for any action taken or suffered in good faith by it pursuant
        to
        the provisions of this Agreement.

       

      8.4.2 
Indemnity.
        The
        Warrant Agent shall be liable hereunder only for its own negligence, willful
        misconduct or bad faith. The Company agrees to indemnify the Warrant Agent
        and
        save it harmless against any and all liabilities, including judgments, costs
        and
        reasonable counsel fees, for anything done or omitted by the Warrant Agent
        in
        the execution of this Agreement except as a result of the Warrant Agent’s
        negligence, willful misconduct, or bad faith.

       

      8.4.3 
Exclusions.
        The
        Warrant Agent shall have no responsibility with respect to the validity of
        this
        Agreement or with respect to the validity or execution of any Warrant (except
        its countersignature thereof); nor shall it be responsible for any breach
        by the
        Company of any covenant or condition contained in this Agreement or in any
        Warrant; nor shall it be responsible to make any adjustments required under
        the
        provisions of Section 4 hereof or responsible for the manner, method, or
        amount
        of any such adjustment or the ascertaining of the existence of facts that
        would
        require any such adjustment; nor shall it by any act hereunder be deemed
        to make
        any representation or warranty as to the authorization or reservation of
        any
        shares of Common Stock to be issued pursuant to this Agreement or any Warrant
        or
        as to whether any shares of Common Stock will when issued be valid and fully
        paid and nonassessable. 

       

      8.5 
Acceptance
        of Agency.
        The
        Warrant Agent hereby accepts the agency established by this Agreement and
        agrees
        to perform the same upon the terms and conditions herein set forth and among
        other things, shall account promptly to the Company with respect to Warrants
        exercised and concurrently account for, and pay to the Company, all moneys
        received by the Warrant Agent for the purchase of shares of the Company’s Common
        Stock through the exercise of Warrants.

       

      9. 
Miscellaneous
        Provisions.

       

      9.1 
Successors.
        All the
        covenants and provisions of this Agreement by or for the benefit of the Company
        or the Warrant Agent shall bind and inure to the benefit of their respective
        successors and assigns.

      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

      

       

       

      9.2 
Notices.
        Any
        notice, statement or demand authorized by this Warrant Agreement to be given
        or
        made by the Warrant Agent or by the holder of any Warrant to or on the Company
        shall be sufficiently given when so delivered if by hand or overnight delivery
        or if sent by certified mail or private courier service five days after deposit
        of such notice, postage prepaid, addressed (until another address is filed
        in
        writing by the Company with the Warrant Agent), as follows:

       

      Everest
        Acquisition Corporation

      15/F,
        The
        Hong Kong Club Building 

      3A
        Chater
        Road Central 

      Hong
        Kong

      Attn: Ashok
        S.
        Kothari, Chief Executive Officer

       

      Any
        notice, statement or demand authorized by this Agreement to be given or made
        by
        the holder of any Warrant or by the Company to or on the Warrant Agent shall
        be
        sufficiently given when so delivered if by hand or overnight delivery or
        if sent
        by certified mail or private courier service five days after deposit of such
        notice, postage prepaid, addressed (until another address is filed in writing
        by
        the Warrant Agent with the Company), as follows:

       

      Continental
        Stock Transfer & Trust Company

      17
        Battery Place

      New
        York,
        New York 10004

      Attn: Compliance
        Department

       

      with
        a
        copy in each case to:

       

      Greenberg
        Traurig LLP

      MetLife
        Building

      200
        Park
        Avenue

      New
        York,
        New York 10166

      Attn: Alan
        I.
        Annex, Esq.

       

      and

      Kirkpatrick
        & Lockhart Nicholson Graham LLP 

      
        599
          Lexington Avenue
New
          York,
          NY 10022

        Attn:
          Robert S. Matlin, Esq.

         

      

      and

       

      Jesup
        & Lamont Securities Corporation

      650
        Fifth
        Avenue

      New
        York,
        New York 10019

      Attn:
        David Rozinov

      
        
          
          

        

        
          11

          
            

          

        

        
          
          

        

      

      

      9.3 
Applicable
        law.
        The
        validity, interpretation, and performance of this Agreement and of the Warrants
        shall be governed in all respects by the laws of the State of New York, without
        giving effect to conflict of laws. The Company hereby agrees that any action,
        proceeding or claim against it arising out of or relating in any way to this
        Agreement shall be brought and enforced in the courts of the State of New
        York
        or the United States District Court for the Southern District of New York,
        and
        irrevocably submits to such jurisdiction, which jurisdiction shall be exclusive.
        The Company hereby waives any objection to such exclusive jurisdiction and
        that
        such courts represent an inconvenience forum. Any such process or summons
        to be
        served upon the Company may be served by transmitting a copy thereof by
        registered or certified mail, return receipt requested, postage prepaid,
        addressed to it at the address set forth in Section 9.2 hereof. Such mailing
        shall be deemed personal service and shall be legal and binding upon the
        Company
        in any action, proceeding or claim.

       

      9.4 
Persons
        Having Rights under this Agreement.
        Nothing
        in this Agreement expressed and nothing that may be implied from any of the
        provisions hereof is intended, or shall be construed, to confer upon, or
        give
        to, any person or corporation other than the parties hereto and the registered
        holders of the Warrants and, for the purposes of Sections 2.5, 6.1, 6.4,
        7.4,
        9.2 and 9.8 hereof, Jesup & Lamont, any right, remedy, or claim under or by
        reason of this Warrant Agreement or of any covenant, condition, stipulation,
        promise, or agreement hereof. Jesup & Lamont shall be deemed to be a
        third-party beneficiary of this Agreement with respect to Sections 2.5, 6.1,
        6.4, 7.4, 9.2 and 9.8 hereof. All covenants, conditions, stipulations, promises,
        and agreements contained in this Warrant Agreement shall be for the sole
        and
        exclusive benefit of the parties hereto (and Jesup & Lamont with respect to
        the Sections 2.5, 6.1, 6.4, 7.4, 9.2 and 9.8 hereof) and their successors
        and
        assigns and of the registered holders of the Warrants.

       

      9.5 
Examination
        of the Warrant Agreement.
        A copy
        of this Agreement shall be available at all reasonable times at the office
        of
        the Warrant Agent in the Borough of Manhattan, City and State of New York,
        for
        inspection by the registered holder of any Warrant. The Warrant Agent may
        require any such holder to submit his Warrant for inspection by it.

       

      9.6 
Counterparts.
        This
        Agreement may be executed in any number of counterparts and each of such
        counterparts shall for all purposes be deemed to be an original, and all
        such
        counterparts shall together constitute but one and the same
        instrument.

       

      9.7 
Effect
        of Headings.
        The
        Section headings herein are for convenience only and are not part of this
        Warrant Agreement and shall not affect the interpretation thereof.

       

      9.8 
Amendments.
        This
        Agreement may be amended by the parties hereto without the consent of any
        registered holder for the purpose of curing any ambiguity, or of curing,
        correcting or supplementing any defective provision contained herein or adding
        or changing any other provisions with respect to matters or questions arising
        under this Agreement as the parties may deem necessary or desirable and that
        the
        parties deem shall not adversely affect the interest of the registered holders.
        All other modifications or amendments, including any amendment to increase
        the
        Warrant Price or shorten the Exercise Period, shall require the written consent
        of each of Jesup & Lamont and the registered holders of a majority of the
        then outstanding Warrants. Notwithstanding the foregoing, the Company may
        lower
        the Warrant Price or extend the duration of the Exercise Period in accordance
        with Sections 3.1 and 3.2, respectively, without such consent.

      
        
          
          

        

        
          12

          
            

          

        

        
          
          

        

      

      9.9 
Severability.
        This
        Agreement shall be deemed severable, and the invalidity or unenforceability
        of
        any term or provision hereof shall not affect the validity or enforceability
        of
        this Agreement or of any other term or provision hereof. Furthermore, in
        lieu of
        any such invalid or unenforceable term or provision, the parties hereto intend
        that there shall be added as a part of this Agreement a provision as similar
        in
        terms to such invalid or unenforceable provision as may be possible and be
        valid
        and enforceable.

       

      IN
        WITNESS WHEREOF, this Agreement has been duly executed by the parties hereto
        as
        of the day and year first above written.

       

      
        	 	 	 
	Attest:	EVEREST
                ACQUISITION CORPORATION
	 
 	 
 	 
 
	 	By:  	 
	 	
                
Ashok
                S. Kothari, Chief Executive Officer 
	 	 

      

       

      
        	 	 	 
	Attest:
                	CONTINENTAL
                STOCK TRANSFER & TRUST COMPANY
	 
 	 
 	 
 
	 	By:  	 
	 	
                
Steven
                G. Nelson, Chairman of the Board
	 	 

      

       

       

      
        
          
          

        

        
          13

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