ENCORIUM GROUP INC
FORM OF WARRANT
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<TYPE>EX-10.3
<SEQUENCE>4
<FILENAME>dex103.htm
<DESCRIPTION>FORM OF WARRANT
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<TITLE>Form of Warrant</TITLE>
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 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2"><B>Exhibit 10.3 </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px"><FONT FACE="Times New Roman"
SIZE="2"><B>NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE
SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I)&nbsp;IN THE ABSENCE OF (A)&nbsp;AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B)&nbsp;AN
OPINION OF COUNSEL (WHICH COUNSEL SHALL BE <U>REASONABLY ACCEPTABLE TO ISSUER</U>), IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT.
NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES. </B></FONT></P> <P STYLE="margin-top:24px;margin-bottom:0px"
ALIGN="center"><FONT FACE="Times New Roman" SIZE="2"><B>ENCORIUM GROUP, INC. </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2"><B>W<SMALL>ARRANT</SMALL> T<SMALL>O</SMALL>
P<SMALL>URCHASE</SMALL> C<SMALL>OMMON</SMALL> S<SMALL>TOCK</SMALL></B><SMALL></SMALL> </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">Warrant No.:
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">Number of Shares of Common
Stock: <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">Date of Issuance:
May&nbsp;9, 2007 (&#147;<B>Issuance Date</B>&#148;) </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">ENCORIUM GROUP, INC., a Delaware corporation (the &#147;<B>Company</B>&#148;), hereby
certifies that, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged,
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>, the registered holder hereof or its permitted
assigns (the &#147;<B>Holder</B>&#148;), is entitled, subject to the terms set forth below, to purchase from the Company, at the Exercise Price (as defined below) then in effect, upon surrender of this Warrant to Purchase Common Stock (including any
Warrants to Purchase Common Stock issued in exchange, transfer or replacement hereof, the &#147;<B>Warrant</B>&#148;), at any time or times on or after the six month anniversary of the date hereof (the &#147;Exercisability Date&#148;), but not after
11:59 p.m., New York time, on the Expiration Date (as defined below),
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> fully paid nonassessable shares of Common Stock
(as defined below) (the &#147;<B>Warrant Shares</B>&#148;). Except as otherwise defined herein, capitalized terms in this Warrant shall have the meanings set forth in Section&nbsp;15. This Warrant is one of the Warrants to purchase Common Stock (the
&#147;<B>SPA Warrants</B>&#148;) issued pursuant to Section&nbsp;1 of that certain Securities Purchase Agreement, dated as of May&nbsp;8, 2007 (the &#147;<B>Subscription Date</B>&#148;), by and among the Company and the investors (the
&#147;<B>Buyers</B>&#148;) referred to therein (the &#147;<B>Securities Purchase Agreement</B>&#148;). </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">1. <U>EXERCISE OF WARRANT.</U>
</FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2">(a) <U>Mechanics of Exercise</U>. Subject to the terms and conditions hereof (including, without limitation, the limitations set forth in
Section&nbsp;1(f)), this Warrant may be exercised by the Holder on any day on or after the Exercisability Date, in whole or in part, by (i)&nbsp;delivery of a written notice, in the form attached hereto as <U>Exhibit A</U> (the &#147;<B>Exercise
Notice</B>&#148;), </FONT>
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<FONT FACE="Times New Roman" SIZE="2">of the Holder&#146;s election to exercise this Warrant and (ii)&nbsp;(A)&nbsp;payment to the Company of an amount equal to the applicable Exercise Price
multiplied by the number of Warrant Shares as to which this Warrant is being exercised (the &#147;<B>Aggregate Exercise Price</B>&#148;) in cash or by wire transfer of immediately available funds or (B)&nbsp;by notifying the Company that this
Warrant is being exercised pursuant to a Cashless Exercise (as defined in Section&nbsp;1(d)). The Holder shall not be required to deliver the original Warrant in order to effect an exercise hereunder, but shall deliver the original Warrant to the
Company promptly following such exercise. Execution and delivery of the Exercise Notice with respect to less than all of the Warrant Shares shall have the same effect as cancellation of the original Warrant and issuance of a new Warrant evidencing
the right to purchase the remaining number of Warrant Shares. On or before the first (1</FONT><FONT FACE="Times New Roman" SIZE="1" COLOR="#000000"><SUP>st</SUP></FONT><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">)&nbsp;Business Day
following the date on which the Company has received each of the Exercise Notice and the Aggregate Exercise Price (or notice of a Cashless Exercise) (the &#147;<B>Exercise Delivery Documents</B>&#148;), the Company shall transmit by facsimile an
acknowledgment of confirmation of receipt of the Exercise Delivery Documents to the Holder and the Company&#146;s transfer agent (the &#147;<B>Transfer Agent</B>&#148;). On or before the third (3</FONT><FONT FACE="Times New Roman" SIZE="1"
COLOR="#000000"><SUP>rd</SUP></FONT><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">)&nbsp;Business Day following the date on which the Company has received all of the Exercise Delivery Documents (the &#147;<B>Share Delivery Date</B>&#148;),
the Company shall (X)&nbsp;provided that the Transfer Agent is participating in The Depository Trust Company (&#147;<B>DTC</B>&#148;) Fast Automated Securities Transfer Program, upon the request of the Holder, credit such aggregate number of Warrant
Shares to which the Holder is entitled pursuant to such exercise to the Holder&#146;s or its designee&#146;s balance account with DTC through its Deposit Withdrawal Agent Commission system, or (Y)&nbsp;if the Transfer Agent is not participating in
the DTC Fast Automated Securities Transfer Program, issue and dispatch by overnight courier to the address as specified in the Exercise Notice, a certificate, registered in the Company&#146;s share register in the name of the Holder or its designee,
for the number of shares of Common Stock to which the Holder is entitled pursuant to such exercise. Upon delivery of the Exercise Delivery Documents, the Holder shall be deemed for all corporate purposes to have become the holder of record of the
Warrant Shares with respect to which this Warrant has been exercised, irrespective of the date such Warrant Shares are credited to the Holder&#146;s DTC account or the date of delivery of the certificates evidencing such Warrant Shares, as the case
may be. If this Warrant is submitted in connection with any exercise pursuant to this Section&nbsp;1(a) and the number of Warrant Shares represented by this Warrant submitted for exercise is greater than the number of Warrant Shares being acquired
upon an exercise, then the Company shall as soon as practicable and in no event later than three Business Days after any exercise and at its own expense, issue a new Warrant (in accordance with Section&nbsp;7(d)) representing the right to purchase
the number of Warrant Shares purchasable immediately prior to such exercise under this Warrant, less the number of Warrant Shares with respect to which this Warrant is exercised. No fractional shares of Common Stock are to be issued upon the
exercise of this Warrant, but rather the number of shares of Common Stock to be issued shall be rounded up to the nearest whole number. The Company shall pay any and all taxes which may be payable with respect to the issuance and delivery of Warrant
Shares upon exercise of this Warrant. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2">(b) <U>Exercise Price</U>. For purposes of this Warrant, &#147;<B>Exercise Price</B>&#148; means
$4.12, subject to adjustment as provided herein. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2">(c) <U>Company&#146;s Failure to Timely Deliver Securities</U>. If the Company shall
fail for any reason or for no reason to issue to the Holder within three (3)&nbsp;Business Days of receipt of the Exercise Delivery Documents, a certificate for the number of shares of Common </FONT>
</P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
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<FONT FACE="Times New Roman" SIZE="2">Stock to which the Holder is entitled and register such shares of Common Stock on the Company&#146;s share register or to credit the Holder&#146;s balance
account with DTC for such number of shares of Common Stock to which the Holder is entitled upon the Holder&#146;s exercise of this Warrant, then, in addition to all other remedies available to the Holder, the Company shall pay in cash to the Holder
on each day after such third Business Day that the issuance of such shares of Common Stock is not timely effected an amount equal to 1.5% of the product of (A)&nbsp;the sum of the number of shares of Common Stock not issued to the Holder on a timely
basis and to which the Holder is entitled and (B)&nbsp;the Closing Sale Price of the shares of Common Stock on the Trading Day immediately preceding the last possible date which the Company could have issued such shares of Common Stock to the Holder
without violating Section&nbsp;1(a). In addition to the foregoing, if within three (3)&nbsp;Trading Days after the Company&#146;s receipt of the facsimile copy of a Exercise Notice the Company shall fail to issue and deliver a certificate to the
Holder and register such shares of Common Stock on the Company&#146;s share register or credit the Holder&#146;s balance account with DTC for the number of shares of Common Stock to which the Holder is entitled upon the Holder&#146;s exercise
hereunder, and if on or after such Trading Day the Holder purchases (in an open market transaction or otherwise) shares of Common Stock to deliver in satisfaction of a sale by the Holder of shares of Common Stock issuable upon such exercise that the
Holder anticipated receiving from the Company (a <B>&#147;Buy-In&#148;</B>), then the Company shall, within three (3)&nbsp;Business Days after the Holder&#146;s request and in the Holder&#146;s discretion, either (i)&nbsp;pay cash to the Holder in
an amount equal to the Holder&#146;s total purchase price (including brokerage commissions, if any) for the shares of Common Stock so purchased (the <B>&#147;Buy-In Price&#148;</B>), at which point the Company&#146;s obligation to deliver such
certificate (and to issue such Warrant Shares) shall terminate, or (ii)&nbsp;promptly honor its obligation to deliver to the Holder a certificate or certificates representing such Warrant Shares and pay cash to the Holder in an amount equal to the
excess (if any) of the Buy-In Price over the product of (A)&nbsp;such number of shares of Common Stock, times (B)&nbsp;the Closing Bid Price on the date of exercise. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:13%"><FONT
FACE="Times New Roman" SIZE="2">(d) <U>Cashless Exercise</U>. Notwithstanding anything contained herein to the contrary, if a Registration Statement (as defined in the Registration Rights Agreement) covering the Warrant Shares that are the subject
of the Exercise Notice (the &#147;<B>Unavailable Warrant Shares</B>&#148;) is not available for the resale of such Unavailable Warrant Shares, the Holder may, in its sole discretion, exercise this Warrant in whole or in part and, in lieu of making
the cash payment otherwise contemplated to be made to the Company upon such exercise in payment of the Aggregate Exercise Price, elect instead to receive upon such exercise the &#147;Net Number&#148; of shares of Common Stock determined according to
the following formula (a &#147;<B>Cashless Exercise</B>&#148;): </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2">Net Number = <U>(A &times; B) - (A &times; C)</U> </FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman"
SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;B </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2">For purposes of the foregoing formula: </FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">A=</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">the total number of shares with respect to which this Warrant is then being exercised.</FONT></TD></TR>
</TABLE> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
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<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">B=</FONT></TD>
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<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">the Weighted Average Price of the shares of Common Stock (as reported by Bloomberg) for the five (5)&nbsp;consecutive Trading Days ending on the date immediately preceding the date of the
Exercise Notice.</FONT></TD></TR>
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<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">C=</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">the Exercise Price then in effect for the applicable Warrant Shares at the time of such exercise.</FONT></TD></TR>
</TABLE> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2">(e) <U>Disputes</U>. In the case of a dispute as to the determination of the Exercise Price or
the arithmetic calculation of the Warrant Shares, the Company shall promptly issue to the Holder the number of Warrant Shares that are not disputed and resolve such dispute in accordance with Section&nbsp;12. </FONT></P> <P
STYLE="margin-top:18px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2">(f) <U>Limitations on Exercises.</U> </FONT></P> <P
STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:13%;padding-bottom:3px;line-height:95%; vertical-align:top"><FONT FACE="Times New Roman" SIZE="2">(1) <U>Beneficial Ownership</U>. The Company shall not effect the exercise of this
Warrant, and the Holder shall not have the right to exercise this Warrant, to the extent that after giving effect to such exercise, such Person (together with such Person&#146;s affiliates) would beneficially own in excess of 4.99% of the shares of
Common Stock outstanding immediately after giving effect to such exercise. For purposes of the foregoing sentence, the aggregate number of shares of Common Stock beneficially owned by such Person and its affiliates shall include the number of shares
of Common Stock issuable upon exercise of this Warrant with respect to which the determination of such sentence is being made, but shall exclude shares of Common Stock which would be issuable upon (i)&nbsp;exercise of the remaining, unexercised
portion of this Warrant beneficially owned by such Person and its affiliates and (ii)&nbsp;exercise or conversion of the unexercised or unconverted portion of any other securities of the Company beneficially owned by such Person and its affiliates
(including, without limitation, any convertible notes or convertible preferred stock or warrants) subject to a limitation on conversion or exercise analogous to the limitation contained herein. Except as set forth in the preceding sentence, for
purposes of this paragraph, beneficial ownership shall be calculated in accordance with Section&nbsp;13(d) of the Securities Exchange Act of 1934, as amended. For purposes of this Warrant, in determining the number of outstanding shares of Common
Stock, the Holder may rely on the number of outstanding shares of Common Stock as reflected in (1)&nbsp;the Company&#146;s most recent Form 10-K, Form 10-Q, Current Report on Form 8-K or other public filing with the Securities and Exchange
Commission, as the case may be, (2)&nbsp;a more recent public announcement by the Company or (3)&nbsp;any other notice by the Company or the Transfer Agent setting forth the number of shares of Common Stock outstanding. For any reason at any time,
upon the written or oral request of the Holder, the Company shall within one Business Day confirm orally and in writing to the Holder the number of shares of Common Stock then outstanding. In any case, the number of outstanding shares of Common
Stock shall be determined after giving effect to the conversion or exercise of securities of the Company, including the SPA Warrants, by the Holder and its affiliates since the date as of which such number of outstanding shares of Common Stock was
reported. By written notice to the Company, the Holder may from time to time increase or decrease the Maximum Percentage to any other percentage not in excess of 9.99% specified in such notice; provided that (i)&nbsp;any such increase will not be
effective until the sixty-first (61</FONT><FONT FACE="Times New Roman" SIZE="1" COLOR="#000000"><SUP>st</SUP></FONT><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">)&nbsp;day after such notice is delivered to the Company, and (ii)&nbsp;any
such increase or decrease will apply only to the Holder and not to any other holder of SPA Warrants. </FONT>
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 <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:4%; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2">(2) <U>Principal Market Regulation</U>. The Company shall not be obligated to issue any
shares of Common Stock upon exercise of this Warrant and no Buyer shall be entitled to receive any shares of Common Stock if the issuance of such shares of Common Stock would exceed that number of shares of Common Stock which the Company may issue
upon exercise of the SPA Warrants or otherwise without breaching the Company&#146;s obligations under any applicable rules or regulations of any applicable Eligible Market (the &#147;<B>Exchange Cap</B>&#148;), except that such limitation shall not
apply in the event that the Company (A)&nbsp;obtains the approval of its stockholders as required by the applicable rules of the Eligible Market for issuances of shares of Common Stock in excess of such amount or (B)&nbsp;obtains a written opinion
from outside counsel to the Company that such approval is not required, which opinion shall be reasonably satisfactory to the Required Holders. Until such approval or written opinion is obtained, no Buyer shall be issued in the aggregate, upon
exercise of any SPA Warrants, shares of Common Stock in an amount greater than the product of the Exchange Cap multiplied by a fraction, the numerator of which is the total number of shares of Common Stock underlying the SPA Warrants issued to such
Buyer pursuant to the Securities Purchase Agreement on the Issuance Date and the denominator of which is the aggregate number of shares of Common Stock underlying the SPA Warrants issued to the Buyers pursuant to the Securities Purchase Agreement on
the Issuance Date (with respect to each Buyer, the &#147;<B>Exchange Cap Allocation</B>&#148;). In the event that any Buyer shall sell or otherwise transfer any of such Buyer&#146;s SPA Warrants, the transferee shall be allocated a pro rata portion
of such Buyer&#146;s Exchange Cap Allocation, and the restrictions of the prior sentence shall apply to such transferee with respect to the portion of the Exchange Cap Allocation allocated to such transferee. In the event that any holder of SPA
Warrants shall exercise all of such holder&#146;s SPA Warrants into a number of shares of Common Stock which, in the aggregate, is less than such holder&#146;s Exchange Cap Allocation, then the difference between such holder&#146;s Exchange Cap
Allocation and the number of shares of Common Stock actually issued to such holder shall be allocated to the respective Exchange Cap Allocations of the remaining holders of SPA Warrants on a pro rata basis in proportion to the shares of Common Stock
underlying the SPA Warrants then held by each such holder. In the event that the Company is prohibited from issuing any Warrant Shares for which an Exercise Notice has been received as a result of the operation of this Section&nbsp;1(f)(ii), the
Company shall pay cash in exchange for cancellation of such Warrant Shares, at a price per Warrant Share equal to the difference between the Weighted Average Price and the Exercise Price as of the date of the attempted exercise. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2">(g) <U>Insufficient Authorized Shares</U>. If at any time while any of the Warrants remain outstanding the Company does not have a sufficient number of
authorized and unreserved shares of Common Stock to satisfy its obligation to reserve for issuance upon exercise of the Warrants at least a number of shares of Common Stock equal to (the &#147;<B>Required Reserve Amount</B>&#148;) the number of
shares of Common Stock as shall from time to time be necessary to effect the exercise of all of the Warrants then outstanding (an &#147;<B>Authorized Share</B> </FONT>
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<FONT FACE="Times New Roman" SIZE="2"><B>Failure</B>&#148;), then the Company shall immediately take all action necessary to increase the Company&#146;s authorized shares of Common Stock to an
amount sufficient to allow the Company to reserve the Required Reserve Amount for the Warrants then outstanding. Without limiting the generality of the foregoing sentence, as soon as practicable after the date of the occurrence of an Authorized
Share Failure, but in no event later than sixty (60)&nbsp;days after the occurrence of such Authorized Share Failure, the Company shall hold a meeting of its stockholders for the approval of an increase in the number of authorized shares of Common
Stock. In connection with such meeting, the Company shall provide each stockholder with a proxy statement and shall use its best efforts to solicit its stockholders&#146; approval of such increase in authorized shares of Common Stock and to cause
its board of directors to recommend to the stockholders that they approve such proposal. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">2. <U>ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF
WARRANT SHARES</U>. The Exercise Price and the number of Warrant Shares shall be adjusted from time to time as follows: </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2">(a) <U>Adjustment
upon Issuance of shares of Common Stock</U>. If and whenever on or after the Subscription Date the Company issues or sells, or in accordance with this Section&nbsp;2 is deemed to have issued or sold, any shares of Common Stock (including the
issuance or sale of shares of Common Stock owned or held by or for the account of the Company, but excluding shares of Common Stock deemed to have been issued by the Company in connection with any Excluded Securities (as defined in the Securities
Purchase Agreement) for a consideration per share (the &#147;<B>New Issuance Price</B>&#148;) less than a price (the &#147;<B>Applicable Price</B>&#148;) equal to the Exercise Price in effect immediately prior to such issue or sale or deemed
issuance or sale (the foregoing a <B>&#147;Dilutive Issuance&#148;</B>), then immediately after such Dilutive Issuance, the Exercise Price then in effect shall be reduced to an amount equal to the New Issuance Price. Upon each such adjustment of the
Exercise Price hereunder, the number of Warrant Shares shall be adjusted to the number of shares of Common Stock determined by multiplying the Exercise Price in effect immediately prior to such adjustment by the number of Warrant Shares acquirable
upon exercise of this Warrant immediately prior to such adjustment and dividing the product thereof by the Exercise Price resulting from such adjustment. For purposes of determining the adjusted Exercise Price under this Section&nbsp;2(a), the
following shall be applicable: </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:13%"><FONT FACE="Times New Roman" SIZE="2">(i) <U>Issuance of Options</U>. If the Company in any manner grants any Options and the lowest price per
share for which one share of Common Stock is issuable upon the exercise of any such Option or upon conversion, exercise or exchange of any Convertible Securities issuable upon exercise of any such Option is less than the Applicable Price, then such
share of Common Stock shall be deemed to be outstanding and to have been issued and sold by the Company at the time of the granting or sale of such Option for such price per share. For purposes of this Section&nbsp;2(a)(i), the &#147;lowest price
per share for which one share of Common Stock is issuable upon exercise of such Options or upon conversion, exercise or exchange of such Convertible Securities issuable upon exercise of any such Option&#148; shall be equal to the sum of the lowest
amounts of consideration (if any) received or receivable by the Company with respect </FONT>
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<FONT FACE="Times New Roman" SIZE="2">to any one share of Common Stock upon the granting or sale of the Option, upon exercise of the Option and upon conversion, exercise or exchange of any
Convertible Security issuable upon exercise of such Option. No further adjustment of the Exercise Price or number of Warrant Shares shall be made upon the actual issuance of such shares of Common Stock or of such Convertible Securities upon the
exercise of such Options or upon the actual issuance of such shares of Common Stock upon conversion, exercise or exchange of such Convertible Securities. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:13%"><FONT
FACE="Times New Roman" SIZE="2">(ii) <U>Issuance of Convertible Securities</U>. If the Company in any manner issues or sells any Convertible Securities and the lowest price per share for which one share of Common Stock is issuable upon the
conversion, exercise or exchange thereof is less than the Applicable Price, then such share of Common Stock shall be deemed to be outstanding and to have been issued and sold by the Company at the time of the issuance or sale of such Convertible
Securities for such price per share. For the purposes of this Section&nbsp;2(a)(ii), the &#147;lowest price per share for which one share of Common Stock is issuable upon the conversion, exercise or exchange thereof&#148; shall be equal to the sum
of the lowest amounts of consideration (if any) received or receivable by the Company with respect to one share of Common Stock upon the issuance or sale of the Convertible Security and upon conversion, exercise or exchange of such Convertible
Security. No further adjustment of the Exercise Price or number of Warrant Shares shall be made upon the actual issuance of such shares of Common Stock upon conversion, exercise or exchange of such Convertible Securities, and if any such issue or
sale of such Convertible Securities is made upon exercise of any Options for which adjustment of this Warrant has been or is to be made pursuant to other provisions of this Section&nbsp;2(a), no further adjustment of the Exercise Price or number of
Warrant Shares shall be made by reason of such issue or sale. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:13%"><FONT FACE="Times New Roman" SIZE="2">(iii) <U>Change in Option Price or Rate of Conversion.</U> If the purchase
price provided for in any Options, the additional consideration, if any, payable upon the issue, conversion, exercise or exchange of any Convertible Securities, or the rate at which any Convertible Securities are convertible into or exercisable or
exchangeable for shares of Common Stock increases or decreases at any time, the Exercise Price and the number of Warrant Shares in effect at the time of such increase or decrease shall be adjusted to the Exercise Price and the number of Warrant
Shares which would have been in effect at such time had such Options or Convertible Securities provided for such increased or decreased purchase price, additional consideration or increased or decreased conversion rate, as the case may be, at the
time initially granted, issued or sold. For purposes of this Section&nbsp;2(a)(iii), if the terms of any Option or Convertible Security that was outstanding as of the date of issuance of this Warrant are increased or decreased in the manner
described in the immediately preceding sentence, then such Option or Convertible Security and the </FONT>
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<FONT FACE="Times New Roman" SIZE="2">shares of Common Stock deemed issuable upon exercise, conversion or exchange thereof shall be deemed to have been issued as of the date of such increase or
decrease. No adjustment pursuant to this Section&nbsp;2(a) shall be made if such adjustment would result in an increase of the Exercise Price then in effect or a decrease in the number of Warrant Shares. </FONT></P> <P
STYLE="margin-top:6px;margin-bottom:0px; margin-left:13%;padding-bottom:3px;line-height:95%; vertical-align:top"><FONT FACE="Times New Roman" SIZE="2">(iv) <U>Calculation of Consideration Received</U>. In case any Option is issued in connection with
the issue or sale of other securities of the Company, together comprising one integrated transaction, (x)&nbsp;the Options will be deemed to have been issued for the fair market value of such Options and (y)&nbsp;the other securities issued or sold
in such integrated transaction shall be deemed to have been issued for the difference of (I)&nbsp;the aggregate consideration received by the Company, less (II) the fair market value of such Options. If any shares of Common Stock, Options or
Convertible Securities are issued or sold or deemed to have been issued or sold for cash, the consideration received therefor will be deemed to be the net amount received by the Company therefor. If any shares of Common Stock, Options or Convertible
Securities are issued or sold for a consideration other than cash, the amount of such consideration received by the Company will be the fair value of such consideration, except where such consideration consists of securities, in which case the
amount of consideration received by the Company will be the Closing Sale Price of such security on the date of receipt. If any shares of Common Stock, Options or Convertible Securities are issued to the owners of the non-surviving entity in
connection with any merger in which the Company is the surviving entity, the amount of consideration therefor will be deemed to be the fair value of such portion of the net assets and business of the non-surviving entity as is attributable to such
shares of Common Stock, Options or Convertible Securities, as the case may be. The fair value of any consideration other than cash or securities will be determined jointly by the Company and the Required Holders. If such parties are unable to reach
agreement within ten (10)&nbsp;days after the occurrence of an event requiring valuation (the &#147;<B>Valuation Event</B>&#148;), the fair value of such consideration will be determined within five (5)&nbsp;Business Days after the tenth
(10</FONT><FONT FACE="Times New Roman" SIZE="1" COLOR="#000000"><SUP>th</SUP></FONT><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">)&nbsp;day following the Valuation Event by an independent, reputable appraiser jointly selected by the Company
and the Required Holders. The determination of such appraiser shall be final and binding upon all parties absent manifest error and the fees and expenses of such appraiser shall be borne by the Company. </FONT></P> <P
STYLE="margin-top:6px;margin-bottom:0px; margin-left:13%"><FONT FACE="Times New Roman" SIZE="2">(v) <U>Record Date</U>. If the Company takes a record of the holders of shares of Common Stock for the purpose of entitling them (A)&nbsp;to receive a
dividend or other distribution payable in shares of Common Stock, Options or in Convertible Securities or (B)&nbsp;to subscribe for or purchase shares of Common Stock, Options or Convertible Securities, then such record date will be deemed to be the
date of the issue or sale of the shares </FONT>
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<FONT FACE="Times New Roman" SIZE="2">of Common Stock deemed to have been issued or sold upon the declaration of such dividend or the making of such other distribution or the date of the granting
of such right of subscription or purchase, as the case may be. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2">(b) <U>Adjustment upon Subdivision or Combination of Common Stock</U>. If
the Company at any time on or after the Subscription Date subdivides (by any stock split, stock dividend, recapitalization or otherwise) one or more classes of its outstanding shares of Common Stock into a greater number of shares, the Exercise
Price in effect immediately prior to such subdivision will be proportionately reduced and the number of Warrant Shares will be proportionately increased. If the Company at any time on or after the Subscription Date combines (by combination, reverse
stock split or otherwise) one or more classes of its outstanding shares of Common Stock into a smaller number of shares, the Exercise Price in effect immediately prior to such combination will be proportionately increased and the number of Warrant
Shares will be proportionately decreased. Any adjustment under this Section&nbsp;2(b) shall become effective at the close of business on the date the subdivision or combination becomes effective. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2">(c) <U>Other Events</U>. If any event occurs of the type contemplated by the provisions of this Section&nbsp;2 but not expressly provided for by such
provisions (including, without limitation, the granting of stock appreciation rights, phantom stock rights or other rights with equity features), then the Company&#146;s Board of Directors will make an appropriate adjustment in the Exercise Price
and the number of Warrant Shares so as to protect the rights of the Holder; provided that no such adjustment pursuant to this Section&nbsp;2(c) will increase the Exercise Price or decrease the number of Warrant Shares as otherwise determined
pursuant to this Section&nbsp;2. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">3. <U>RIGHTS UPON DISTRIBUTION OF ASSETS</U>. If the Company shall declare or make any dividend or other
distribution of its assets (or rights to acquire its assets) to holders of shares of Common Stock, by way of return of capital or otherwise (including, without limitation, any distribution of cash, stock or other securities, property or options by
way of a dividend, spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction) (a &#147;<B>Distribution</B>&#148;), at any time after the issuance of this Warrant, then, in each such case: </FONT></P> <P
STYLE="margin-top:6px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2">(a) any Exercise Price in effect immediately prior to the close of business on the record date fixed for the determination of holders of shares of Common
Stock entitled to receive the Distribution shall be reduced, effective as of the close of business on such record date, to a price determined by multiplying such Exercise Price by a fraction of which (i)&nbsp;the numerator shall be the Closing Bid
Price of the shares of Common Stock on the Trading Day immediately preceding such record date minus the value of the Distribution (as determined in good faith by the Company&#146;s Board of Directors) applicable to one share of shares of Common
Stock, and (ii)&nbsp;the denominator shall be the Closing Bid Price of the shares of Common Stock on the Trading Day immediately preceding such record date; and </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:13%"><FONT
FACE="Times New Roman" SIZE="2">(b) the number of Warrant Shares shall be increased to a number of shares equal to the number of shares of Common Stock obtainable immediately prior to the close of business on the record date fixed for the
determination of holders of shares of Common Stock </FONT>
</P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
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<FONT FACE="Times New Roman" SIZE="2">entitled to receive the Distribution multiplied by the reciprocal of the fraction set forth in the immediately preceding paragraph (a); provided that in the
event that the Distribution is of shares of Common Stock (or common stock) (&#147;<B>Other Shares of Common Stock</B>&#148;) of a company whose common shares are traded on a national securities exchange or a national automated quotation system, then
the Holder may elect to receive a warrant to purchase Other Shares of Common Stock in lieu of an increase in the number of Warrant Shares, the terms of which shall be identical to those of this Warrant, except that such warrant shall be exercisable
into the number of shares of Other Shares of Common Stock that would have been payable to the Holder pursuant to the Distribution had the Holder exercised this Warrant immediately prior to such record date and with an aggregate exercise price equal
to the product of the amount by which the exercise price of this Warrant was decreased with respect to the Distribution pursuant to the terms of the immediately preceding paragraph (a)&nbsp;and the number of Warrant Shares calculated in accordance
with the first part of this paragraph (b). </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">4. <U>PURCHASE RIGHTS; FUNDAMENTAL TRANSACTIONS</U>. </FONT></P> <P
STYLE="margin-top:6px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2">(a) <U>Purchase Rights</U>. In addition to any adjustments pursuant to Section&nbsp;2 above, if at any time the Company grants, issues or sells any
Options, Convertible Securities or rights to purchase stock, warrants, securities or other property pro rata to the record holders of any class of shares of Common Stock (the &#147;<B>Purchase Rights</B>&#148;), then the Holder will be entitled to
acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder could have acquired if the Holder had held the number of shares of Common Stock acquirable upon complete exercise of this Warrant (without
regard to any limitations on the exercise of this Warrant) immediately before the date on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which the record holders of
shares of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2">(b) <U>Fundamental Transactions</U>.
The Company shall not enter into or be party to a Fundamental Transaction unless either (i)&nbsp;(A)&nbsp;the Successor Entity assumes in writing all of the obligations of the Company under this Warrant and the other Transaction Documents in
accordance with the provisions of this Section (4)(b)&nbsp;pursuant to written agreements in form and substance reasonably satisfactory to the Required Holders and approved by the Required Holders (such approval not to be unreasonably withheld)
prior to such Fundamental Transaction, including agreements to deliver to each holder of Warrants in exchange for such Warrants a security of the Successor Entity evidenced by a written instrument substantially similar in form and substance to this
Warrant, including, without limitation, an adjusted exercise price equal to the value for the shares of Common Stock reflected by the terms of such Fundamental Transaction, and exercisable for a corresponding number of shares of capital stock
equivalent to the shares of Common Stock acquirable and receivable upon exercise of this Warrant (without regard to any limitations on the exercise of this Warrant) prior to such Fundamental Transaction, and satisfactory to the Required Holders and
(B)&nbsp;the Successor Entity (including its Parent Entity) is a publicly traded corporation whose common stock is quoted on or listed for trading on an Eligible Market (a &#147;Successor Public Company&#148;) or (ii)&nbsp;the Holder is given the
rights set forth in Section&nbsp;4(c) below. Upon the occurrence of any Fundamental Transaction with respect to which Section&nbsp;4(b)(i) is applicable, the Successor Entity shall succeed to, and be substituted for (so that from and after the date
of such Fundamental Transaction, the provisions of this Warrant </FONT>
</P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
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<FONT FACE="Times New Roman" SIZE="2">referring to the &#147;Company&#148; shall refer instead to the Successor Entity), and may exercise every right and power of the Company and shall assume all
of the obligations of the Company under this Warrant with the same effect as if such Successor Entity had been named as the Company herein. Upon consummation of the Fundamental Transaction with respect to which Section&nbsp;4(b)(i) is applicable,
the Successor Entity shall deliver to the Holder confirmation that there shall be issued upon exercise of this Warrant at any time after the consummation of the Fundamental Transaction, in lieu of the shares of the Common Stock (or other securities,
cash, assets or other property) purchasable upon the exercise of the Warrant prior to such Fundamental Transaction, such shares of the publicly traded Common Stock (or its equivalent) of the Successor Entity (including its Parent Entity) which the
Holder would have been entitled to receive upon the happening of such Fundamental Transaction had this Warrant been converted immediately prior to such Fundamental Transaction, as adjusted in accordance with the provisions of this Warrant. In
addition to and not in substitution for any other rights hereunder, prior to the consummation of any Fundamental Transaction pursuant to which holders of shares of Common Stock are entitled to receive securities or other assets with respect to or in
exchange for shares of Common Stock (a &#147;<B>Corporate Event</B>&#148;), the Company shall make appropriate provision to insure that the Holder will thereafter have the right to receive upon an exercise of this Warrant at any time after the
consummation of the Fundamental Transaction but prior to the Expiration Date, in lieu of the shares of the Common Stock (or other securities, cash, assets or other property) purchasable upon the exercise of the Warrant prior to such Fundamental
Transaction, such shares of stock, securities, cash, assets or any other property whatsoever (including warrants or other purchase or subscription rights) which the Holder would have been entitled to receive upon the happening of such Fundamental
Transaction had the Warrant been exercised immediately prior to such Fundamental Transaction. Provision made pursuant to the preceding sentence shall be in a form and substance reasonably satisfactory to the Required Holders. The provisions of this
Section shall apply similarly and equally to successive Fundamental Transactions and Corporate Events and shall be applied without regard to any limitations on the exercise of this Warrant. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2">(c) Notwithstanding the foregoing, in the event of a Fundamental Transaction where (i)&nbsp;the Successor Entity has not assumed the Warrant in
accordance with Section&nbsp;4(b)(i) above, or (ii)&nbsp;the Successor Entity is not a Successor Public Company, or (iii)&nbsp;the consideration payable in connection with such Fundamental Transaction consists of all or substantially all cash, at
the request of the Holder delivered before the 90th day after such Fundamental Transaction, the Company (or the Successor Entity) shall purchase this Warrant from the Holder by paying to the Holder, within five Business Days after such request (or,
if later, on the effective date of the Fundamental Transaction), cash in an amount equal to the Black Scholes Value of the remaining unexercised portion of this Warrant on the date of such Fundamental Transaction. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">5. <U>NONCIRCUMVENTION</U>. The Company hereby covenants and agrees that the Company will not, by amendment of its Certificate of Incorporation, Bylaws
or through any reorganization, transfer of assets, consolidation, merger, scheme of arrangement, dissolution, issue or sale of securities, or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of
this Warrant, and will at all times in good faith carry out all the provisions of this Warrant and take all action as may be required to protect the rights of the Holder. Without limiting the generality of the foregoing, the Company (i)&nbsp;shall
not increase the par value of any shares of Common Stock receivable upon the exercise of this Warrant above the </FONT>
</P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
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<FONT FACE="Times New Roman" SIZE="2">Exercise Price then in effect, (ii)&nbsp;shall take all such actions as may be necessary or appropriate in order that the Company may validly and legally
issue fully paid and nonassessable shares of Common Stock upon the exercise of this Warrant, and (iii)&nbsp;shall, so long as any of the SPA Warrants are outstanding, take all action necessary to reserve and keep available out of its authorized and
unissued shares of Common Stock, solely for the purpose of effecting the exercise of the SPA Warrants, the number of shares of Common Stock as shall from time to time be necessary to effect the exercise of the SPA Warrants then outstanding (without
regard to any limitations on exercise). </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">6. <U>WARRANT HOLDER NOT DEEMED A STOCKHOLDER</U>. Except as otherwise specifically provided
herein, the Holder, solely in such Person&#146;s capacity as a holder of this Warrant, shall not be entitled to vote or receive dividends or be deemed the holder of share capital of the Company for any purpose, nor shall anything contained in this
Warrant be construed to confer upon the Holder, solely in such Person&#146;s capacity as the Holder of this Warrant, any of the rights of a stockholder of the Company or any right to vote, give or withhold consent to any corporate action (whether
any reorganization, issue of stock, reclassification of stock, consolidation, merger, conveyance or otherwise), receive notice of meetings, receive dividends or subscription rights, or otherwise, prior to the issuance to the Holder of the Warrant
Shares which such Person is then entitled to receive upon the due exercise of this Warrant. In addition, nothing contained in this Warrant shall be construed as imposing any liabilities on the Holder to purchase any securities (upon exercise of this
Warrant or otherwise) or as a stockholder of the Company, whether such liabilities are asserted by the Company or by creditors of the Company. Notwithstanding this Section&nbsp;6, the Company shall provide the Holder with copies of the same notices
and other information given to the stockholders of the Company generally, contemporaneously with the giving thereof to the stockholders. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman"
SIZE="2">7. <U>REISSUANCE OF WARRANTS</U>. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2">(a) <U>Transfer of Warrant</U>. If this Warrant is to be transferred, the Holder shall
surrender this Warrant to the Company, whereupon the Company will forthwith issue and deliver upon the order of the Holder a new Warrant (in accordance with Section&nbsp;7(d)), registered as the Holder may request, representing the right to purchase
the number of Warrant Shares being transferred by the Holder and, if less then the total number of Warrant Shares then underlying this Warrant is being transferred, a new Warrant (in accordance with Section&nbsp;7(d)) to the Holder representing the
right to purchase the number of Warrant Shares not being transferred. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2">(b) <U>Lost, Stolen or Mutilated Warrant</U>. Upon receipt by the
Company of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Warrant, and, in the case of loss, theft or destruction, of any indemnification undertaking by the Holder to the Company in customary
form and, in the case of mutilation, upon surrender and cancellation of this Warrant, the Company shall execute and deliver to the Holder a new Warrant (in accordance with Section&nbsp;7(d)) representing the right to purchase the Warrant Shares then
underlying this Warrant. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2">(c) <U>Exchangeable for Multiple Warrants</U>. This Warrant is exchangeable, upon the surrender hereof by the
Holder at the principal office of the Company, for a new </FONT>
</P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
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<FONT FACE="Times New Roman" SIZE="2">Warrant or Warrants (in accordance with Section&nbsp;7(d)) representing in the aggregate the right to purchase the number of Warrant Shares then underlying
this Warrant, and each such new Warrant will represent the right to purchase such portion of such Warrant Shares as is designated by the Holder at the time of such surrender; provided, however, that no Warrants for fractional shares of Common Stock
shall be given. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2">(d) <U>Issuance of New Warrants</U>. Whenever the Company is required to issue a new Warrant pursuant to the terms of
this Warrant, such new Warrant (i)&nbsp;shall be of like tenor with this Warrant, (ii)&nbsp;shall represent, as indicated on the face of such new Warrant, the right to purchase the Warrant Shares then underlying this Warrant (or in the case of a new
Warrant being issued pursuant to Section&nbsp;7(a) or Section&nbsp;7(c), the Warrant Shares designated by the Holder which, when added to the number of shares of Common Stock underlying the other new Warrants issued in connection with such issuance,
does not exceed the number of Warrant Shares then underlying this Warrant), (iii)&nbsp;shall have an issuance date, as indicated on the face of such new Warrant which is the same as the Issuance Date, and (iv)&nbsp;shall have the same rights and
conditions as this Warrant. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">8. <U>NOTICES</U>. Whenever notice is required to be given under this Warrant, unless otherwise provided
herein, such notice shall be given in accordance with Section&nbsp;9(f) of the Securities Purchase Agreement. The Company shall provide the Holder with prompt written notice of all actions taken pursuant to this Warrant, including in reasonable
detail a description of such action and the reason therefore. Without limiting the generality of the foregoing, the Company will give written notice to the Holder (i)&nbsp;immediately upon any adjustment of the Exercise Price, setting forth in
reasonable detail, and certifying, the calculation of such adjustment and (ii)&nbsp;at least fifteen (15)&nbsp;days prior to the date on which the Company closes its books or takes a record (A)&nbsp;with respect to any dividend or distribution upon
the shares of Common Stock, (B)&nbsp;with respect to any grants, issuances or sales of any Options, Convertible Securities or rights to purchase stock, warrants, securities or other property to holders of shares of Common Stock or (C)&nbsp;for
determining rights to vote with respect to any Fundamental Transaction, dissolution or liquidation, provided in each case that such information shall be made known to the public prior to or in conjunction with such notice being provided to the
Holder. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">9. <U>AMENDMENT AND WAIVER</U>. Except as otherwise provided herein, the provisions of this Warrant may be amended and the Company
may take any action herein prohibited, or omit to perform any act herein required to be performed by it, only if the Company has obtained the written consent of the Required Holders; provided that no such action may increase the exercise price of
any SPA Warrant or decrease the number of shares or class of stock obtainable upon exercise of any SPA Warrant without the written consent of the Holder. No such amendment shall be effective to the extent that it applies to less than all of the
holders of the SPA Warrants then outstanding. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">10. <U>GOVERNING LAW</U>. This Warrant shall be governed by and construed and enforced in
accordance with, and all questions concerning the construction, validity, interpretation and performance of this Warrant shall be governed by, the internal laws of the State of New York, without giving effect to any choice of law or conflict of law
provision or rule (whether of the State of New York or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of New York. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT
SIZE="1">&nbsp;</FONT></P>
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 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">11. <U>CONSTRUCTION; HEADINGS</U>. This Warrant shall be deemed to be jointly drafted by the Company and
all the Buyers and shall not be construed against any person as the drafter hereof. The headings of this Warrant are for convenience of reference and shall not form part of, or affect the interpretation of, this Warrant. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">12. <U>DISPUTE RESOLUTION</U>. In the case of a dispute as to the determination of the Exercise Price or the arithmetic calculation of the Warrant
Shares, the Company shall submit the disputed determinations or arithmetic calculations via facsimile within two (2)&nbsp;Business Days of receipt of the Exercise Notice giving rise to such dispute, as the case may be, to the Holder. If the Holder
and the Company are unable to agree upon such determination or calculation of the Exercise Price or the Warrant Shares within three (3)&nbsp;Business Days of such disputed determination or arithmetic calculation being submitted to the Holder, then
the Company shall, within two (2)&nbsp;Business Days submit via facsimile (a)&nbsp;the disputed determination of the Exercise Price to an independent, reputable investment bank selected by the Company and approved by the Holder or (b)&nbsp;the
disputed arithmetic calculation of the Warrant Shares to the Company&#146;s independent, outside accountant. The Company shall cause at its expense the investment bank or the accountant, as the case may be, to perform the determinations or
calculations and notify the Company and the Holder of the results no later than ten Business Days from the time it receives the disputed determinations or calculations. Such investment bank&#146;s or accountant&#146;s determination or calculation,
as the case may be, shall be binding upon all parties absent demonstrable error. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">13. <U>REMEDIES, OTHER OBLIGATIONS, BREACHES AND
INJUNCTIVE RELIEF</U>. The remedies provided in this Warrant shall be cumulative and in addition to all other remedies available under this Warrant and the other Transaction Documents, at law or in equity (including a decree of specific performance
and/or other injunctive relief), and nothing herein shall limit the right of the Holder to pursue actual damages for any failure by the Company to comply with the terms of this Warrant. The Company acknowledges that a breach by it of its obligations
hereunder will cause irreparable harm to the Holder and that the remedy at law for any such breach may be inadequate. The Company therefore agrees that, in the event of any such breach or threatened breach, the holder of this Warrant shall be
entitled, in addition to all other available remedies, to an injunction restraining any breach, without the necessity of showing economic loss and without any bond or other security being required. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">14. <U>TRANSFER</U>. This Warrant may be offered for sale, sold, transferred or assigned without the consent of the Company, except as may otherwise be
required by Section&nbsp;2(f) of the Securities Purchase Agreement. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">15. <U>CERTAIN DEFINITIONS</U>. For purposes of this Warrant, the
following terms shall have the following meanings: </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2">(a) &#147;<B>Black Scholes Value</B>&#148; means the value of this Warrant based on the
Black and Scholes Option Pricing Model obtained from the &#147;OV&#148; function on Bloomberg determined as of the day immediately following the public announcement of the applicable Fundamental Transaction and reflecting (i)&nbsp;a risk-free
interest rate corresponding to the U.S. Treasury rate for a period equal to the remaining term of this Warrant as of such date of request and (ii)&nbsp;an expected volatility equal to the greater of 80% and the 100 day volatility obtained from the
HVT function on Bloomberg. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">- 14 - </FONT></P>


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 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2">(b) &#147;<B>Bloomberg</B>&#148; means Bloomberg Financial Markets. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2">(c) &#147;<B>Business Day</B>&#148; means any day other than Saturday, Sunday or other day on which commercial banks in The City of New York are
authorized or required by law to remain closed. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2">(d) &#147;<B>Closing Bid Price</B>&#148; and &#147;<B>Closing Sale Price</B>&#148; means,
for any security as of any date, the last closing bid price and last closing trade price, respectively, for such security on the Principal Market, as reported by Bloomberg, or, if the Principal Market begins to operate on an extended hours basis and
does not designate the closing bid price or the closing trade price, as the case may be, then the last bid price or the last trade price, respectively, of such security prior to 4:00:00 p.m., New York time, as reported by Bloomberg, or, if the
Principal Market is not the principal securities exchange or trading market for such security, the last closing bid price or last trade price, respectively, of such security on the principal securities exchange or trading market where such security
is listed or traded as reported by Bloomberg, or if the foregoing do not apply, the last closing bid price or last trade price, respectively, of such security in the over-the-counter market on the electronic bulletin board for such security as
reported by Bloomberg, or, if no closing bid price or last trade price, respectively, is reported for such security by Bloomberg, the average of the bid prices, or the ask prices, respectively, of any market makers for such security as reported in
the &#147;pink sheets&#148; by Pink Sheets LLC (formerly the National Quotation Bureau, Inc.). If the Closing Bid Price or the Closing Sale Price cannot be calculated for a security on a particular date on any of the foregoing bases, the Closing Bid
Price or the Closing Sale Price, as the case may be, of such security on such date shall be the fair market value as mutually determined by the Company and the Holder. If the Company and the Holder are unable to agree upon the fair market value of
such security, then such dispute shall be resolved pursuant to Section&nbsp;12. All such determinations to be appropriately adjusted for any stock dividend, stock split, stock combination or other similar transaction during the applicable
calculation period. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2">(e) &#147;<B>Common Stock</B>&#148; means (i)&nbsp;the Company&#146;s shares of Common Stock, par value $0.01 per
share, and (ii)&nbsp;any share capital into which such Common Stock shall have been changed or any share capital resulting from a reclassification of such Common Stock. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:13%"><FONT
FACE="Times New Roman" SIZE="2">(f) <B>&#147;Common Stock Deemed Outstanding</B>&#148; means, at any given time, the number of shares of Common Stock actually outstanding at such time, plus the number of shares of Common Stock deemed to be
outstanding pursuant to Sections 2(a)(i) and 2(a)(ii) hereof regardless of whether the Options or Convertible Securities are actually exercisable at such time, but excluding any shares of Common Stock owned or held by or for the account of the
Company or issuable upon exercise of the SPA Warrants. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2">(g) &#147;<B>Convertible Securities</B>&#148; means any stock or securities (other
than Options) directly or indirectly convertible into or exercisable or exchangeable for shares of Common Stock. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">- 15 - </FONT></P>


<p Style='page-break-before:always'>
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 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2">(h) &#147;<B>Eligible Market</B>&#148; means the Principal Market, The New York Stock Exchange, Inc.,
The NASDAQ Global Market, The NASDAQ Global Select Market or The American Stock Exchange. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2">(i) &#147;<B>Expiration Date</B>&#148; means
the date sixty (60)&nbsp;months after the Exercisability Date or, if such date falls on a day other than a Business Day or on which trading does not take place on the Principal Market (a &#147;<B>Holiday</B>&#148;), the next date that is not a
Holiday. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2">(j) &#147;<B>Fundamental Transaction</B>&#148; means that the Company shall, directly or indirectly, in one or more related
transactions, (i)&nbsp;consolidate or merge with or into (whether or not the Company is the surviving corporation) another Person, or (ii)&nbsp;sell, assign, transfer, convey or otherwise dispose of all or substantially all of the properties or
assets of the Company to another Person, or (iii)&nbsp;allow another Person to make a purchase, tender or exchange offer that is accepted by the holders of more than the 50% of the outstanding shares of Common Stock (not including any shares of
Common Stock held by the Person or Persons making or party to, or associated or affiliated with the Persons making or party to, such purchase, tender or exchange offer), or (iv)&nbsp;consummate a stock purchase agreement or other business
combination (including, without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement) with another Person whereby such other Person acquires more than the 50% of the outstanding shares of Common Stock (not including any
shares of Common Stock held by the other Person or other Persons making or party to, or associated or affiliated with the other Persons making or party to, such stock purchase agreement or other business combination), (v)&nbsp;reorganize,
recapitalize or reclassify its Common Stock, or (vi)&nbsp;any &#147;person&#148; or &#147;group&#148; (as these terms are used for purposes of Sections 13(d) and 14(d) of the Exchange Act) is or shall become the &#147;beneficial owner&#148; (as
defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of 50% of the aggregate ordinary voting power represented by issued and outstanding Common Stock.. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:13%"><FONT
FACE="Times New Roman" SIZE="2">(k) &#147;<B>Options</B>&#148; means any rights, warrants or options to subscribe for or purchase shares of Common Stock or Convertible Securities. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2">(l) &#147;<B>Parent Entity</B>&#148; of a Person means an entity that, directly or indirectly, controls the applicable Person and whose common stock or
equivalent equity security is quoted or listed on an Eligible Market, or, if there is more than one such Person or Parent Entity, the Person or Parent Entity with the largest public market capitalization as of the date of consummation of the
Fundamental Transaction. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2">(m) &#147;<B>Person</B>&#148; means an individual, a limited liability company, a partnership, a joint venture,
a corporation, a trust, an unincorporated organization, any other entity and a government or any department or agency thereof. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2">(n)
&#147;<B>Principal Market</B>&#148; means The Nasdaq Capital Market. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2">(o) &#147;<B>Registration Rights Agreement</B>&#148; means that
certain registration rights agreement by and among the Company and the Buyers. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2">(p) &#147;<B>Required Holders</B>&#148; means the holders
of the SPA Warrants representing at least a majority of shares of Common Stock underlying the SPA Warrants then outstanding. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">- 16 - </FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">
 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2">(q) &#147;<B>Successor Entity</B>&#148; means the Person (or, if so elected by the Required Holders, the
Parent Entity) formed by, resulting from or surviving any Fundamental Transaction or the Person (or, if so elected by the Required Holders, the Parent Entity) with which such Fundamental Transaction shall have been entered into. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2">(r) &#147;<B>Trading Day</B>&#148; means any day on which the Common Stock are traded on the Principal Market, or, if the Principal Market is not the
principal trading market for the Common Stock, then on the principal securities exchange or securities market on which the Common Stock are then traded; provided that &#147;Trading Day&#148; shall not include any day on which the Common Stock are
scheduled to trade on such exchange or market for less than 4.5 hours or any day that the Common Stock are suspended from trading during the final hour of trading on such exchange or market (or if such exchange or market does not designate in
advance the closing time of trading on such exchange or market, then during the hour ending at 4:00:00 p.m., New York time). </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2">(s)
&#147;<B>Weighted Average Price</B>&#148; means, for any security as of any date, the dollar volume-weighted average price for such security on the Principal Market during the period beginning at 9:30:01 a.m., New York City time, and ending at
4:00:00 p.m., New York City time, as reported by Bloomberg through its &#147;Volume at Price&#148; function or, if the foregoing does not apply, the dollar volume-weighted average price of such security in the over-the-counter market on the
electronic bulletin board for such security during the period beginning at 9:30:01 a.m., New York City time, and ending at 4:00:00 p.m., New York City time, as reported by Bloomberg, or, if no dollar volume-weighted average price is reported for
such security by Bloomberg for such hours, the average of the highest closing bid price and the lowest closing ask price of any of the market makers for such security as reported in the &#147;pink sheets&#148; by Pink Sheets LLC (formerly the
National Quotation Bureau, Inc.). If the Weighted Average Price cannot be calculated for such security on such date on any of the foregoing bases, the Weighted Average Price of such security on such date shall be the fair market value as mutually
determined by the Company and the Required Holders. If the Company and the Required Holders are unable to agree upon the fair market value of the such security, then such dispute shall be resolved pursuant to Section&nbsp;12 with the term
&#147;Weighted Average Price&#148; being substituted for the term &#147;Exercise Price.&#148; All such determinations shall be appropriately adjusted for any share dividend, share split or other similar transaction during such period. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2"><B>[Signature Page Follows] </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">- 17 - </FONT></P>


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 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2"><B>IN WITNESS WHEREOF,</B> the Company has caused this Warrant to Purchase Common Stock to be duly
executed as of the Issuance Date set out above. </FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P><DIV ALIGN="right">
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<TD WIDTH="87%"></TD></TR>
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<TD VALIGN="top" COLSPAN="3"><FONT FACE="Times New Roman" SIZE="2"><B>ENCORIUM GROUP, INC.</B></FONT></TD></TR>
<TR>
<TD HEIGHT="16"></TD>
<TD HEIGHT="16" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">By:</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000">&nbsp;</P></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Name:</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Title:</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD></TR>
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 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2"><B>EXHIBIT A </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="center"><FONT
FACE="Times New Roman" SIZE="2"><B>EXERCISE NOTICE </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2"><B>TO BE EXECUTED BY THE REGISTERED HOLDER TO EXERCISE THIS </B></FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2"><B>WARRANT TO PURCHASE COMMON STOCK </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman"
SIZE="2"><B>ENCORIUM GROUP, INC. </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">The undersigned holder hereby exercises the right to purchase
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> of the shares of Common Stock (&#147;<B>Warrant Shares</B>&#148;) of ENCORIUM GROUP, INC.., a Delaware corporation (the
&#147;<B>Company</B>&#148;), evidenced by the attached Warrant to Purchase Common Stock (the &#147;<B>Warrant</B>&#148;). Capitalized terms used herein and not otherwise defined shall have the respective meanings set forth in the Warrant.
</FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">1. Form of Exercise Price. The Holder intends that payment of the Exercise Price shall be made as: </FONT></P> <P
STYLE="margin-top:6px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2"><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> a &#147;<U>Cash
Exercise&#148;</U> with respect to <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Warrant Shares; and/or </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2"><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> a <U>&#147;Cashless
Exercise&#148;</U> with respect to <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Warrant Shares. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">2. Payment of Exercise Price. In the event that the holder has elected a Cash Exercise with respect to some or all of the Warrant Shares to be issued
pursuant hereto, the holder shall pay the Aggregate Exercise Price in the sum of $<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> to the Company in accordance with the
terms of the Warrant. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">3. Delivery of Warrant Shares. The Company shall deliver to the holder
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Warrant Shares in accordance with the terms of the Warrant. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">Date: <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U><U>&nbsp;&nbsp;&nbsp;&nbsp;</U>
<U>&nbsp;&nbsp;&nbsp;&nbsp;</U>, <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> </FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Name of Registered Holder</FONT></P></TD></TR>
</TABLE> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">By:</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000">&nbsp;</P></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Name:</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Title:</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD></TR>
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 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2"><B>ACKNOWLEDGMENT </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
FACE="Times New Roman" SIZE="2">The Company hereby acknowledges this Exercise Notice and hereby directs [INSERT NAME OF TRANSFER AGENT] to issue the above indicated number of shares of Common Stock in accordance with the Transfer Agent Instructions
dated May [<U>&nbsp;&nbsp;&nbsp;&nbsp;</U>], 2007 from the Company and acknowledged and agreed to by [INSERT NAME OF TRANSFER AGENT]. </FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P><DIV ALIGN="right">
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<TD VALIGN="top" COLSPAN="3"><FONT FACE="Times New Roman" SIZE="2"><B>ENCORIUM GROUP, INC.</B></FONT></TD></TR>
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<TD HEIGHT="16"></TD>
<TD HEIGHT="16" COLSPAN="2"></TD></TR>
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<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">By:</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000">&nbsp;</P></TD></TR>
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<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Name:</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Title:</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD></TR>
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