DIGITAL ANGEL CORP
EX-10.4
<DOCUMENT>
<TYPE>EX-10.4
<SEQUENCE>5
<FILENAME>a03-1904_1ex10d4.htm
<DESCRIPTION>EX-10.4
<TEXT>
<html>

<head>



</head>

<body>

<div style="font-family:'Times New Roman';">

<p align="right" style="margin:0in 0in .0001pt;text-align:right;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Exhibit
10.4</font></b></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">THIS WARRANT AND THE
SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THIS WARRANT AND THE
COMMON STOCK ISSUABLE UPON EXERCISE OF THIS WARRANT MAY&nbsp;NOT BE SOLD,
OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT AS TO THIS WARRANT UNDER SAID ACT OR AN OPINION OF
COUNSEL REASONABLY SATISFACTORY TO DIGITAL ANGEL CORPORATION THAT SUCH
REGISTRATION IS NOT REQUIRED.</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<table border="0" cellspacing="0" cellpadding="0" width="100%" style="border-collapse:collapse;width:100.0%;">
 <tr>
  <td width="53%" valign="top" style="padding:0in 0in 0in 0in;width:53.7%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="2%" valign="top" style="padding:0in 0in 0in 0in;width:2.76%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="43%" valign="top" style="padding:0in 0in 0in 0in;width:43.54%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Right
  to Purchase 125,000 Shares of Common Stock of Digital Angel Corporation
  (subject to adjustment as provided herein)</font></p>
  </td>
 </tr>
</table>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-weight:bold;margin:0in 0in .0001pt;page-break-after:auto;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">COMMON STOCK PURCHASE WARRANT</font></b></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<table border="0" cellspacing="0" cellpadding="0" width="100%" style="border-collapse:collapse;width:100.0%;">
 <tr>
  <td width="32%" valign="top" style="padding:0in .7pt 0in .7pt;width:32.98%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">No. 2003-1</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0in .7pt 0in .7pt;width:2.7%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="64%" valign="top" style="padding:0in .7pt 0in .7pt;width:64.3%;">
  <p align="right" style="margin:0in 0in .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Issue Date:&#160;
  July&nbsp;31, 2003</font></p>
  </td>
 </tr>
</table>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:1.0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">DIGITAL ANGEL
CORPORATION, a corporation organized under the laws of the State of Delaware
(the &#147;Company&#148;), hereby certifies that, for value received, LAURUS MASTER FUND,
LTD., or its assigns (the &#147;Holder&#148;), is entitled, subject to the terms set
forth below, to purchase from the Company from and after the Issue Date of this
Warrant and at any time or from time to time before 5:00 p.m., New York time,
through five (5) years after such date (the &#147;Expiration Date&#148;), up to 125,000
fully paid and nonassessable shares of Common Stock (as hereinafter defined),
$.005 par value, of the Company, at the Exercise Price (as defined below). The
number and character of such shares of Common Stock and the Exercise Price are
subject to adjustment as provided herein.</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:1.0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">As used herein the
following terms, unless the context otherwise requires, have the following
respective meanings:</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt;text-indent:1.0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(a)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>The
term &#147;Company&#148; shall include Digital Angel Corporation and any corporation
which shall succeed or assume the obligations of Digital Angel Corporation
hereunder.</p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt;text-indent:1.0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(b)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>The
term &#147;Common Stock&#148; includes (a) the Company&#146;s Common Stock, par value $.005
per share, and (b) any other securities into which or for which any of the
securities described in (a) may be converted or exchanged pursuant to a plan of
recapitalization, reorganization, merger, sale of assets or otherwise.</p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt;text-indent:1.0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(c)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>The
term &#147;Other Securities&#148; refers to any stock (other than Common Stock) and other
securities of the Company or any other person (corporate or otherwise) which
the holder of the Warrant at any time shall be entitled to receive, or shall
have received, on the exercise of the Warrant, in lieu of or in addition to
Common Stock, or which at any time shall be issuable or shall have been issued
in exchange for or in replacement of Common Stock or Other Securities pursuant
to Section 4 or otherwise.</p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt;text-indent:1.0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(d)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>The
term &#147;Exercise Price&#148; shall be as follows:</p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>


<div style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">

<hr size="2" width="100%" noshade color="gray" align="left">

</font></div>

<font size="2" face="Times New Roman" style="font-size:10.0pt;">
<!-- SEQ.=1,FOLIO='',FILE='C:\jms\jrollag\03-1904-1\task9693\1904-1-kg.htm',USER='jrollag',CD='Aug  7 11:06 2003' -->
<br clear="all" style="page-break-before:always;">
</font>

<p align="center" style="font-size:10.0pt;margin:0in 0in .0001pt;text-align:center;">&nbsp;</p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt 2.0in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">a.</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>75,000
shares at $2.68 per share;</p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt 2.0in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">b.</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>35,000
shares at $2.91 per share; and</p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt 2.0in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">c.</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>15,000
shares at $3.38 per share.</p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<h1 style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">1.</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><b><font style="font-weight:bold;">Exercise of
Warrant</font></b>.</h1>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<h2 style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-indent:1.0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">1.1</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><u>Number
of Shares Issuable upon Exercise</u>.&#160;
From and after the date hereof and through and including the Expiration
Date, the Holder shall be entitled to receive, upon exercise of this Warrant,
in whole or in part, by delivery of an original or fax copy of the exercise
notice attached hereto as Exhibit A (the &#147;Exercise Notice&#148;), shares of Common
Stock of the Company, subject to adjustment pursuant to Section 4.</h2>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<h2 style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-indent:1.0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">1.2</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><u>Fair
Market Value</u>.&#160; Fair Market Value of
a share of Common Stock as of a particular date (the &#147;Determination Date&#148;)
shall mean:</h2>

<h2 style="font-weight:normal;margin:0in 0in .0001pt;text-indent:1.0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></h2>

<h4 style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-indent:1.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(a)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>If
the Company&#146;s Common Stock is traded on an exchange or is quoted on the
National or SmallCap Market of The Nasdaq Stock Market, Inc. (&#147;Nasdaq&#148;), then
the closing or last sale price, respectively, reported for the last business
day immediately preceding the Determination Date.</h4>

<h4 style="font-weight:normal;margin:0in 0in .0001pt;text-indent:1.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></h4>

<h4 style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-indent:1.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(b)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>If
the Company&#146;s Common Stock is not traded on an exchange or on the Nasdaq but is
traded on the NASD OTC Bulletin Board or BBX Exchange, then the mean of the
average of the closing bid and asked prices reported for the last business day
immediately preceding the Determination Date.</h4>

<h4 style="font-weight:normal;margin:0in 0in .0001pt;text-indent:1.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></h4>

<h4 style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-indent:1.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(c)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Except
as provided in clause (d) below, if the Company&#146;s Common Stock is not publicly
traded, then as the Holder and the Company agree or in the absence of agreement
by arbitration in accordance with the rules then in effect of the American
Arbitration Association, before a single arbitrator to be chosen from a panel
of persons qualified by education and training to pass on the matter to be
decided.</h4>

<h4 style="font-weight:normal;margin:0in 0in .0001pt;text-indent:1.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></h4>

<h4 style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-indent:1.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(d)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>If
the Determination Date is the date of a liquidation, dissolution or winding up,
or any event deemed to be a liquidation, dissolution or winding up pursuant to
the Company&#146;s charter, then all amounts to be payable per share to holders of
the Common Stock pursuant to the charter in the event of such liquidation,
dissolution or winding up, plus all other amounts to be payable per share in
respect of the Common Stock in liquidation under the charter, assuming for the
purposes of this clause (d) that all of the shares of Common Stock then
issuable upon exercise of the Warrant are outstanding at the Determination
Date.</h4>

<h4 style="font-weight:normal;margin:0in 0in .0001pt;text-indent:1.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></h4>

<h1 style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">2.</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><b><font style="font-weight:bold;">Procedure
for Exercise</font></b>.</h1>

<h1 style="font-weight:normal;margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></h1>

<h2 style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-indent:1.0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">2.1</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><u>Delivery
of Stock Certificates, etc. on Exercise</u>. The Company agrees that the shares
of Common Stock purchased upon exercise of this Warrant shall be deemed to be
issued to the Holder as the record owner of such shares as of the close of
business on the date on which this Warrant shall have been surrendered and
payment made for such shares as aforesaid. As soon as practicable after the
exercise of this Warrant in whole or in part, and in any event</h2>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">2</font></p>


<div style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">

<hr size="2" width="100%" noshade color="gray" align="left">

</font></div>

<font size="2" face="Times New Roman" style="font-size:10.0pt;">
<!-- SEQ.=1,FOLIO='2',FILE='C:\jms\jrollag\03-1904-1\task9693\1904-1-kg.htm',USER='jrollag',CD='Aug  7 11:06 2003' -->
<br clear="all" style="page-break-before:always;">
</font>

<p align="center" style="font-size:10.0pt;margin:0in 0in .0001pt;text-align:center;">&nbsp;</p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">within 3 business days thereafter, the Company at its expense
(including the payment by it of any applicable issue taxes) will cause to be
issued in the name of and delivered to the Holder, or as such Holder (upon
payment by such holder of any applicable transfer taxes) may direct in
compliance with applicable securities laws, a certificate or certificates for
the number of duly and validly issued, fully paid and nonassessable shares of
Common Stock (or Other Securities) to which such Holder shall be entitled on
such exercise, plus, in lieu of any fractional share to which such holder would
otherwise be entitled, cash equal to such fraction multiplied by the then Fair
Market Value of one full share, together with any other stock or other
securities and property (including cash, where applicable) to which such Holder
is entitled upon such exercise pursuant to Section 1 or otherwise.</font></p>

<h2 style="font-weight:normal;margin:0in 0in .0001pt;text-indent:1.0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></h2>

<h2 style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-indent:1.0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">2.2</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><u>Exercise</u>.</h2>

<h2 style="font-weight:normal;margin:0in 0in .0001pt;text-indent:1.0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></h2>

<h4 style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-indent:1.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(a)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Payment
may be made either in (i) cash or by certified or official bank check payable
to the order of the Company equal to the applicable aggregate Exercise Price,
(ii) by delivery of the Warrant, Common Stock and/or Common Stock receivable
upon exercise of the Warrant in accordance with Section (b) below, or (iii) by
a combination of any of the foregoing methods, for the number of Common Shares
specified in such form (as such exercise number shall be adjusted to reflect
any adjustment in the total number of shares of Common Stock issuable to the
holder per the terms of this Warrant), and the Holder shall thereupon be
entitled to receive the number of duly authorized, validly issued, fully-paid
and non-assessable shares of Common Stock (or Other Securities) determined as provided
herein.</h4>

<h4 style="font-weight:normal;margin:0in 0in .0001pt;text-indent:1.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></h4>

<h4 style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-indent:1.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(b)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Notwithstanding
any provisions herein to the contrary, if the Fair Market Value of one share of
Common Stock is greater than the Exercise Price (at the date of calculation as
set forth below), in lieu of exercising this Warrant for cash, the Holder may
elect to receive shares equal to the value (as determined below) of this
Warrant (or the portion thereof being exercised) by surrender of this Warrant
at the principal office of the Company together with the properly endorsed
Exercise Notice in which event the Company shall issue to the Holder a number
of shares of Common Stock computed using the following formula:</h4>

<h4 style="font-weight:normal;margin:0in 0in .0001pt;text-indent:1.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></h4>

<table border="0" cellspacing="0" cellpadding="0" width="20%" style="border-collapse:collapse;margin-left:1.0in;width:20.0%;">
 <tr>
  <td width="100%" colspan="2" valign="top" style="padding:0in 0in 0in 0in;width:100.0%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">X=Y&nbsp;<u>(A-B)</u></font></p>
  </td>
 </tr>
 <tr>
  <td width="35%" valign="top" style="padding:0in 0in 0in 0in;width:35.5%;">
  <p style="margin:0in 0in .0001pt 40.0pt;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">A</font></p>
  </td>
  <td width="64%" valign="top" style="padding:0in 0in 0in 0in;width:64.5%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt 40.0pt;text-indent:-10.0pt;">&nbsp;</p>
  </td>
 </tr>
</table>

<p style="margin:0in 0in .0001pt 1.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<table border="0" cellspacing="0" cellpadding="0" width="90%" style="border-collapse:collapse;margin-left:35.4pt;width:90.1%;">
 <tr>
  <td width="8%" valign="top" style="padding:0in 0in 0in 0in;width:8.22%;">
  <p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Where X</font></p>
  </td>
  <td width="5%" valign="top" style="padding:0in 0in 0in 0in;width:5.14%;">
  <p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">=</font></p>
  </td>
  <td width="86%" colspan="3" valign="top" style="padding:0in 0in 0in 0in;width:86.66%;">
  <p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">the number of
  shares of Common Stock to be issued to the Holder</font></p>
  </td>
 </tr>
 <tr>
  <td width="8%" valign="top" style="padding:0in 0in 0in 0in;width:8.22%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;text-indent:0in;">&nbsp;</p>
  </td>
  <td width="5%" valign="top" style="padding:0in 0in 0in 0in;width:5.14%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;text-indent:0in;">&nbsp;</p>
  </td>
  <td width="35%" valign="top" style="padding:0in 0in 0in 0in;width:35.92%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;text-indent:0in;">&nbsp;</p>
  </td>
  <td width="2%" valign="bottom" style="padding:0in 0in 0in 0in;width:2.66%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;text-indent:0in;">&nbsp;</p>
  </td>
  <td width="48%" valign="top" style="padding:0in 0in 0in 0in;width:48.08%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;text-indent:0in;">&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width="8%" valign="top" style="padding:0in 0in 0in 0in;width:8.22%;">
  <p style="margin:0in 0in .0001pt 40.0pt;text-indent:-15.15pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Y</font></p>
  </td>
  <td width="5%" valign="top" style="padding:0in 0in 0in 0in;width:5.14%;">
  <p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">=</font></p>
  </td>
  <td width="86%" colspan="3" valign="top" style="padding:0in 0in 0in 0in;width:86.66%;">
  <p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">the number of
  shares of Common Stock purchasable under the Warrant or, if only a portion of
  the Warrant is being exercised, the portion of the Warrant being exercised
  (at the date of such calculation)</font></p>
  </td>
 </tr>
 <tr>
  <td width="8%" valign="top" style="padding:0in 0in 0in 0in;width:8.22%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;text-indent:0in;">&nbsp;</p>
  </td>
  <td width="5%" valign="top" style="padding:0in 0in 0in 0in;width:5.14%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;text-indent:0in;">&nbsp;</p>
  </td>
  <td width="35%" valign="top" style="padding:0in 0in 0in 0in;width:35.92%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;text-indent:0in;">&nbsp;</p>
  </td>
  <td width="2%" valign="bottom" style="padding:0in 0in 0in 0in;width:2.66%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;text-indent:0in;">&nbsp;</p>
  </td>
  <td width="48%" valign="top" style="padding:0in 0in 0in 0in;width:48.08%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;text-indent:0in;">&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width="8%" valign="top" style="padding:0in 0in 0in 0in;width:8.22%;">
  <p style="margin:0in 0in .0001pt 40.0pt;text-indent:-15.15pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">A</font></p>
  </td>
  <td width="5%" valign="top" style="padding:0in 0in 0in 0in;width:5.14%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">=</font></p>
  </td>
  <td width="86%" colspan="3" valign="top" style="padding:0in 0in 0in 0in;width:86.66%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">the Fair Market Value
  of one share of the Company&#146;s Common Stock (at the date of such calculation)</font></p>
  </td>
 </tr>
 <tr>
  <td width="8%" valign="top" style="padding:0in 0in 0in 0in;width:8.22%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt 40.0pt;text-indent:-15.15pt;">&nbsp;</p>
  </td>
  <td width="5%" valign="top" style="padding:0in 0in 0in 0in;width:5.14%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="35%" valign="top" style="padding:0in 0in 0in 0in;width:35.92%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="2%" valign="bottom" style="padding:0in 0in 0in 0in;width:2.66%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="48%" valign="top" style="padding:0in 0in 0in 0in;width:48.08%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width="8%" valign="top" style="padding:0in 0in 0in 0in;width:8.22%;">
  <p style="margin:0in 0in .0001pt 40.0pt;text-indent:-15.15pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">B</font></p>
  </td>
  <td width="5%" valign="top" style="padding:0in 0in 0in 0in;width:5.14%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">=</font></p>
  </td>
  <td width="86%" colspan="3" valign="top" style="padding:0in 0in 0in 0in;width:86.66%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Exercise Price (as
  adjusted to the date of such calculation)</font></p>
  </td>
 </tr>
</table>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">3</font></p>


<div style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">

<hr size="2" width="100%" noshade color="gray" align="left">

</font></div>

<font size="2" face="Times New Roman" style="font-size:10.0pt;">
<!-- SEQ.=1,FOLIO='3',FILE='C:\jms\jrollag\03-1904-1\task9693\1904-1-kg.htm',USER='jrollag',CD='Aug  7 11:06 2003' -->
<br clear="all" style="page-break-before:always;">
</font>

<p align="center" style="font-size:10.0pt;margin:0in 0in .0001pt;text-align:center;">&nbsp;</p>

<h1 style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">3.</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><b><font style="font-weight:bold;">Effect of
Reorganization, etc.; Adjustment of Exercise Price</font></b>.</h1>

<h1 style="font-weight:normal;margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></h1>

<h2 style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-indent:1.0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">3.1</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><u>Reorganization,
Consolidation, Merger, etc.</u>&#160; In case
at any time or from time to time, the Company shall (a) effect a
reorganization, (b) consolidate with or merge into any other person, or (c)
transfer all or substantially all of its properties or assets to any other
person under any plan or arrangement contemplating the dissolution of the
Company, then, in each such case, as a condition to the consummation of such a
transaction, proper and adequate provision shall be made by the Company whereby
the Holder of this Warrant, on the exercise hereof as provided in Section 1 at
any time after the consummation of such reorganization, consolidation or merger
or the effective date of such dissolution, as the case may be, shall receive,
in lieu of the Common Stock (or Other Securities) issuable on such exercise
prior to such consummation or such effective date, the stock and other
securities and property (including cash) to which such Holder would have been
entitled upon such consummation or in connection with such dissolution, as the
case may be, if such Holder had so exercised this Warrant, immediately prior
thereto, all subject to further adjustment thereafter as provided in Section 4.</h2>

<h2 style="font-weight:normal;margin:0in 0in .0001pt;text-indent:1.0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></h2>

<h2 style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-indent:1.0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">3.2</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><u>Dissolution</u>.&#160; In the event of any dissolution of the
Company following the transfer of all or substantially all of its properties or
assets, the Company, prior to such dissolution, shall at its expense deliver or
cause to be delivered the stock and other securities and property (including
cash, where applicable) receivable by the Holder of the Warrant after the
effective date of such dissolution pursuant to Section 3.1 to a bank or trust
company having its principal office in New York, NY, as trustee for the Holder
of the Warrant.</h2>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<h2 style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-indent:1.0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">3.3</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><u>Continuation
of Terms</u>.&#160; Upon any reorganization,
consolidation, merger or transfer (and any dissolution following any transfer)
referred to in this Section 3, this Warrant shall continue in full force and
effect and the terms hereof shall be applicable to the shares of stock and
other securities and property receivable on the exercise of this Warrant after
the consummation of such reorganization, consolidation or merger or the
effective date of dissolution following any such transfer, as the case may be,
and shall be binding upon the issuer of any such stock or other securities, including,
in the case of any such transfer, the person acquiring all or substantially all
of the properties or assets of the Company, whether or not such person shall
have expressly assumed the terms of this Warrant as provided in Section 4.&#160; In the event this Warrant does not continue
in full force and effect after the consummation of the transactions described
in this Section 3, then only in such event will the Company&#146;s securities and
property (including cash, where applicable) receivable by the holders of the
Warrant be delivered to the Trustee as contemplated by Section 3.2.</h2>

<h2 style="font-weight:normal;margin:0in 0in .0001pt;text-indent:1.0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></h2>

<h1 style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">4.</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><b><font style="font-weight:bold;">Extraordinary
Events Regarding Common Stock</font></b>.&#160;
In the event that the Company shall (a) issue additional shares of the
Common Stock as a dividend or other distribution on outstanding Common Stock,
(b) subdivide its outstanding shares of Common Stock, or (c) combine its
outstanding shares of the Common Stock into a smaller number of shares of the
Common Stock, then, in each such event, the Exercise Price shall,
simultaneously with the happening of such event, be adjusted by multiplying the
then Exercise Price by a fraction, the numerator of which shall be the number
of shares of Common Stock outstanding immediately prior to such event and the
denominator of which shall be the number of shares of Common Stock outstanding
immediately after such event, and the product so obtained shall thereafter be
the Exercise Price then in effect. The Exercise Price, as so adjusted, shall be
</h1>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">4</font></p>


<div style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">

<hr size="2" width="100%" noshade color="gray" align="left">

</font></div>

<font size="2" face="Times New Roman" style="font-size:10.0pt;">
<!-- SEQ.=1,FOLIO='4',FILE='C:\jms\jrollag\03-1904-1\task9693\1904-1-kg.htm',USER='jrollag',CD='Aug  7 11:06 2003' -->
<br clear="all" style="page-break-before:always;">
</font>

<p align="center" style="font-size:10.0pt;margin:0in 0in .0001pt;text-align:center;">&nbsp;</p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">readjusted in the same manner upon the happening of any successive
event or events described herein in this Section 4. The number of shares of
Common Stock that the holder of this Warrant shall thereafter, on the exercise
hereof as provided in Section 1, be entitled to receive shall be increased to a
number determined by multiplying the number of shares of Common Stock that
would otherwise (but for the provisions of this Section 4) be issuable on such
exercise by a fraction of which (a) the numerator is the Exercise Price that
would otherwise (but for the provisions of this Section 4) be in effect, and
(b) the denominator is the Exercise Price in effect on the date of such
exercise.</font></p>

<h1 style="font-weight:normal;margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></h1>

<h1 style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">5.</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><b><font style="font-weight:bold;">Certificate
as to Adjustments</font></b>.&#160; In each
case of any adjustment or readjustment in the shares of Common Stock (or Other
Securities) issuable on the exercise of the Warrant, the Company at its expense
will promptly cause its Chief Financial Officer or other appropriate designee
to compute such adjustment or readjustment in accordance with the terms of the
Warrant and prepare a certificate setting forth such adjustment or readjustment
and showing in detail the facts upon which such adjustment or readjustment is
based, including a statement of (a) the consideration received or receivable by
the Company for any additional shares of Common Stock (or Other Securities)
issued or sold or deemed to have been issued or sold, (b) the number of shares
of Common Stock (or Other Securities) outstanding or deemed to be outstanding,
and (c) the Exercise Price and the number of shares of Common Stock to be
received upon exercise of this Warrant, in effect immediately prior to such
adjustment or readjustment and as adjusted or readjusted as provided in this
Warrant. The Company will forthwith mail a copy of each such certificate to the
holder of the Warrant and any Warrant agent of the Company (appointed pursuant
to Section 11 hereof).</h1>

<h1 style="font-weight:normal;margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></h1>

<h1 style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">6.</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><b><font style="font-weight:bold;">Reservation
of Stock, etc. Issuable on Exercise of Warrant</font></b>.&#160; The Company will at all times reserve and
keep available, solely for issuance and delivery on the exercise of the
Warrant, shares of Common Stock (or Other Securities) from time to time
issuable on the exercise of the Warrant.</h1>

<h1 style="font-weight:normal;margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></h1>

<h1 style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">7.</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><b><font style="font-weight:bold;">Assignment;
Exchange of Warrant</font></b>.&#160; Subject
to compliance with applicable securities laws, this Warrant, and the rights
evidenced hereby, may be transferred by any registered holder hereof (a
&#147;Transferor&#148;) with respect to any or all of the Shares. On the surrender for
exchange of this Warrant, with the Transferor&#146;s endorsement in the form of
Exhibit B attached hereto (the &#147;Transferor Endorsement Form&#148;) and together with
evidence reasonably satisfactory to the Company demonstrating compliance with
applicable securities laws, which shall include, without limitation, a legal
opinion from the Transferor&#146;s counsel that such transfer is exempt from the
registration requirements of applicable securities laws, the Company at its
expense but with payment by the Transferor of any applicable transfer taxes)
will issue and deliver to or on the order of the Transferor thereof a new
Warrant of like tenor, in the name of the Transferor and/or the transferee(s)
specified in such Transferor Endorsement Form (each a &#147;Transferee&#148;), calling in
the aggregate on the face or faces thereof for the number of shares of Common
Stock called for on the face or faces of the Warrant so surrendered by the
Transferor.</h1>

<h1 style="font-weight:normal;margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></h1>

<h1 style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">8.</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><b><font style="font-weight:bold;">Replacement
of Warrant</font></b>.&#160; On receipt of
evidence reasonably satisfactory to the Company of the loss, theft, destruction
or mutilation of this Warrant and, in the case of any such loss, theft or
destruction of this Warrant, on delivery of an indemnity agreement or security
reasonably satisfactory in form and amount to the Company or, in the case of
any such</h1>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">5</font></p>


<div style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">

<hr size="2" width="100%" noshade color="gray" align="left">

</font></div>

<font size="2" face="Times New Roman" style="font-size:10.0pt;">
<!-- SEQ.=1,FOLIO='5',FILE='C:\jms\jrollag\03-1904-1\task9693\1904-1-kg.htm',USER='jrollag',CD='Aug  7 11:06 2003' -->
<br clear="all" style="page-break-before:always;">
</font>

<p align="center" style="font-size:10.0pt;margin:0in 0in .0001pt;text-align:center;">&nbsp;</p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">mutilation, on surrender and cancellation of this Warrant, the Company
at its expense will execute and deliver, in lieu thereof, a new Warrant of like
tenor.</font></p>

<h1 style="font-weight:normal;margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></h1>

<h1 style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">9.</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><b><font style="font-weight:bold;">Registration
Rights</font></b>.&#160; The Holder of this
Warrant has been granted certain registration rights by the Company.&#160; These registration rights are set forth in a
Registration Rights Agreement entered into by the Company and Purchaser of the
Company&#146;s Convertible Note (the &#147;Note&#148;) at or prior to the issue date of this
Warrant.</h1>

<h1 style="font-weight:normal;margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></h1>

<h1 style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">10.</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><b><font style="font-weight:bold;">Maximum
Exercise</font></b>.&#160; The Holder shall
not be entitled to exercise this Warrant on an exercise date, in connection
with that number of shares of Common Stock which would be in excess of the sum
of (i) the number of shares of Common Stock beneficially owned by the Holder
and its affiliates on an exercise date, and (ii) the number of shares of Common
Stock issuable upon the exercise of this Warrant with respect to which the
determination of this proviso is being made on an exercise date, which would
result in beneficial ownership by the Holder and its affiliates of more than
4.99% of the outstanding shares of Common Stock of the Company on such
date.&#160; For the purposes of the proviso
to the immediately preceding sentence, beneficial ownership shall be determined
in accordance with Section 13(d) of the Securities Exchange Act of 1934, as
amended, and Regulation 13d-3 thereunder.&#160;
Subject to the foregoing, the Holder shall not be limited to aggregate
exercises which would result in the issuance of more than 4.99%.&#160; The restriction described in this paragraph
may be revoked upon 75 days&#146; prior notice from the Holder to the Company and is
automatically null and void upon an Event of Default under the Note.</h1>

<h1 style="font-weight:normal;margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></h1>

<h1 style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">11.</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><b><font style="font-weight:bold;">Warrant
Agent</font></b>.&#160; The Company may, by
written notice to the each holder of the Warrant, appoint an agent for the
purpose of issuing Common Stock (or Other Securities) on the exercise of this
Warrant pursuant to Section 1, exchanging this Warrant pursuant to Section 7,
and replacing this Warrant pursuant to Section 8, or any of the foregoing, and
thereafter any such issuance, exchange or replacement, as the case may be,
shall be made at such office by such agent.</h1>

<h1 style="font-weight:normal;margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></h1>

<h1 style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">12.</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><b><font style="font-weight:bold;">Transfer on
the Company&#146;s Books</font></b>.&#160; Until
this Warrant is transferred on the books of the Company, the Company may treat
the registered holder hereof as the absolute owner hereof for all purposes,
notwithstanding any notice to the contrary.</h1>

<h1 style="font-weight:normal;margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></h1>

<h1 style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">13.</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><b><font style="font-weight:bold;">Notices, etc</font></b>.&#160; All notices and other communications from
the Company to the Holder of this Warrant shall be mailed by first class registered
or certified mail, postage prepaid, at such address as may have been furnished
to the Company in writing by such holder or, until any such Holder furnishes to
the Company an address, then to, and at the address of, the last Holder of this
Warrant who has so furnished an address to the Company.</h1>

<h1 style="font-weight:normal;margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></h1>

<h1 style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">14.</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><b><font style="font-weight:bold;">Voluntary
Adjustment by the Company</font></b>.&#160;
The Company may at any time during the term of this Warrant reduce the
then current Exercise Price to any amount and for any period of time deemed
appropriate by the Board of Directors of the Company.</h1>

<h1 style="font-weight:normal;margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></h1>

<h1 style="font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">15.</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><b><font style="font-weight:bold;">Miscellaneous</font></b>.&#160; This Warrant and any term hereof may be
changed, waived, discharged or terminated only by an instrument in writing
signed by the party against which enforcement of such change, waiver, discharge
or termination is sought.&#160; This Warrant
shall be</h1>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">6</font></p>


<div style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">

<hr size="2" width="100%" noshade color="gray" align="left">

</font></div>

<font size="2" face="Times New Roman" style="font-size:10.0pt;">
<!-- SEQ.=1,FOLIO='6',FILE='C:\jms\jrollag\03-1904-1\task9693\1904-1-kg.htm',USER='jrollag',CD='Aug  7 11:06 2003' -->
<br clear="all" style="page-break-before:always;">
</font>

<p align="center" style="font-size:10.0pt;margin:0in 0in .0001pt;text-align:center;">&nbsp;</p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">governed by and construed in accordance with the laws of State of New
York without regard to principles of conflicts of laws.&#160; Any action brought by either party concerning
the transactions contemplated by this Warrant shall be brought only in the
state courts of New York or in the federal courts located in the state of New
York.&#160; The individuals executing this
Warrant on behalf of the Company agree to submit to the jurisdiction of such
courts and waive trial by jury.&#160; The
prevailing party shall be entitled to recover from the other party its
reasonable attorney&#146;s fees and costs.&#160;
In the event that any provision of this Warrant is invalid or
unenforceable under any applicable statute or rule of law, then such provision
shall be deemed inoperative to the extent that it may conflict therewith and
shall be deemed modified to conform with such statute or rule of law.&#160; Any such provision which may prove invalid
or unenforceable under any law shall not affect the validity or enforceability
of any other provision of this Warrant. The headings in this Warrant are for
purposes of reference only, and shall not limit or otherwise affect any of the
terms hereof.&#160; The invalidity or
unenforceability of any provision hereof shall in no way affect the validity or
enforceability of any other provision.&#160;
The Company acknowledges that legal counsel participated in the
preparation of this Warrant and, therefore, stipulates that the rule of
construction that ambiguities are to be resolved against the drafting party
shall not be applied in the interpretation of this Warrant to favor any party
against the other party.</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:1.0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">IN WITNESS WHEREOF, the
Company has executed this Warrant under seal as of the date first written
above.</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<table border="0" cellspacing="0" cellpadding="0" width="100%" style="border-collapse:collapse;width:100.0%;">
 <tr>
  <td width="32%" valign="top" style="padding:0in 0in 0in 0in;width:32.44%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="17%" valign="top" style="padding:0in 0in 0in 0in;width:17.58%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="39%" colspan="4" valign="top" style="padding:0in 0in 0in 0in;width:39.7%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">DIGITAL
  ANGEL CORPORATION</font></p>
  </td>
  <td width="10%" valign="top" style="padding:0in 0in 0in 0in;width:10.28%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width="32%" valign="top" style="padding:0in 0in 0in 0in;width:32.44%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="17%" valign="top" style="padding:0in 0in 0in 0in;width:17.58%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="3%" valign="top" style="padding:0in 0in 0in 0in;width:3.48%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="36%" colspan="3" valign="top" style="padding:0in 0in 0in 0in;width:36.22%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="10%" valign="top" style="padding:0in 0in 0in 0in;width:10.28%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width="32%" valign="top" style="padding:0in 0in 0in 0in;width:32.44%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="17%" valign="top" style="padding:0in 0in 0in 0in;width:17.58%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="3%" valign="top" style="padding:0in 0in 0in 0in;width:3.48%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="36%" colspan="3" valign="top" style="padding:0in 0in 0in 0in;width:36.22%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="10%" valign="top" style="padding:0in 0in 0in 0in;width:10.28%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width="32%" valign="top" style="padding:0in 0in 0in 0in;width:32.44%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="17%" valign="top" style="padding:0in 0in 0in 0in;width:17.58%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="3%" valign="top" style="padding:0in 0in 0in 0in;width:3.48%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">By:</font></p>
  </td>
  <td width="36%" colspan="3" valign="top" style="border:none;border-bottom:solid windowtext .5pt;padding:0in 0in 0in 0in;width:36.22%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="10%" valign="top" style="padding:0in 0in 0in 0in;width:10.28%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width="32%" valign="top" style="padding:0in 0in 0in 0in;width:32.44%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="17%" valign="top" style="padding:0in 0in 0in 0in;width:17.58%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="3%" valign="top" style="padding:0in 0in 0in 0in;width:3.48%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="11%" valign="top" style="border:none;padding:0in 0in 0in 0in;width:11.64%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="11%" valign="top" style="border:none;border-top:solid windowtext .5pt;padding:0in 0in 0in 0in;width:11.64%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="12%" valign="top" style="border:none;border-top:solid windowtext .5pt;padding:0in 0in 0in 0in;width:12.94%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="10%" valign="top" style="padding:0in 0in 0in 0in;width:10.28%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width="32%" valign="top" style="padding:0in 0in 0in 0in;width:32.44%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="17%" valign="top" style="padding:0in 0in 0in 0in;width:17.58%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="3%" valign="top" style="padding:0in 0in 0in 0in;width:3.48%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="11%" valign="top" style="padding:0in 0in 0in 0in;width:11.64%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="11%" valign="top" style="padding:0in 0in 0in 0in;width:11.64%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="12%" valign="top" style="padding:0in 0in 0in 0in;width:12.94%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="10%" valign="top" style="padding:0in 0in 0in 0in;width:10.28%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width="32%" valign="top" style="padding:0in 0in 0in 0in;width:32.44%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Witness:</font></p>
  </td>
  <td width="17%" valign="top" style="padding:0in 0in 0in 0in;width:17.58%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="3%" valign="top" style="padding:0in 0in 0in 0in;width:3.48%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="11%" valign="top" style="padding:0in 0in 0in 0in;width:11.64%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="11%" valign="top" style="padding:0in 0in 0in 0in;width:11.64%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="12%" valign="top" style="padding:0in 0in 0in 0in;width:12.94%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="10%" valign="top" style="padding:0in 0in 0in 0in;width:10.28%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width="32%" valign="top" style="padding:0in 0in 0in 0in;width:32.44%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="17%" valign="top" style="padding:0in 0in 0in 0in;width:17.58%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="3%" valign="top" style="padding:0in 0in 0in 0in;width:3.48%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="11%" valign="top" style="padding:0in 0in 0in 0in;width:11.64%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="11%" valign="top" style="padding:0in 0in 0in 0in;width:11.64%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="12%" valign="top" style="padding:0in 0in 0in 0in;width:12.94%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="10%" valign="top" style="padding:0in 0in 0in 0in;width:10.28%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width="32%" valign="top" style="border:none;border-bottom:solid windowtext .5pt;padding:0in 0in 0in 0in;width:32.44%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="17%" valign="top" style="padding:0in 0in 0in 0in;width:17.58%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="3%" valign="top" style="padding:0in 0in 0in 0in;width:3.48%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="11%" valign="top" style="padding:0in 0in 0in 0in;width:11.64%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="11%" valign="top" style="padding:0in 0in 0in 0in;width:11.64%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="12%" valign="top" style="padding:0in 0in 0in 0in;width:12.94%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="10%" valign="top" style="padding:0in 0in 0in 0in;width:10.28%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
 </tr>
</table>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">7</font></p>


<div style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">

<hr size="2" width="100%" noshade color="gray" align="left">

</font></div>

<font size="2" face="Times New Roman" style="font-size:10.0pt;">
<!-- SEQ.=1,FOLIO='7',FILE='C:\jms\jrollag\03-1904-1\task9693\1904-1-kg.htm',USER='jrollag',CD='Aug  7 11:06 2003' -->
<br clear="all" style="page-break-before:always;">
</font>

<p align="center" style="font-size:10.0pt;margin:0in 0in .0001pt;text-align:center;">&nbsp;</p>

<p align="right" style="margin:0in 0in .0001pt;text-align:right;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Exhibit
A</font></b></p>

<p align="right" style="margin:0in 0in .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;page-break-after:auto;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">FORM
OF SUBSCRIPTION</font></p>

<p style="margin:0in 0in .0001pt;page-break-after:auto;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;page-break-after:auto;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(To be
signed only on exercise of Warrant)</font></p>

<p style="margin:0in 0in .0001pt;page-break-after:auto;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">TO:</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Digital
Angel Corporation</p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The undersigned, pursuant
to the provisions set forth in the attached Warrant
(No.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;), hereby irrevocably
elects to purchase (check applicable box):</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt;"><font size="2" face="Wingdings" style="font-family:Wingdings;font-size:10.0pt;">o</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; shares
of the Common Stock covered by such Warrant; or</p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt;"><font size="2" face="Wingdings" style="font-family:Wingdings;font-size:10.0pt;">o</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; the maximum number of shares of
Common Stock covered by such Warrant pursuant to the cashless exercise
procedure set forth in Section 2.</p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The undersigned herewith
makes payment of the full Exercise Price for such shares at the price per share
provided for in such Warrant, which is
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;.&#160; Such payment takes the form of (check
applicable box or boxes):</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt;"><font size="2" face="Wingdings" style="font-family:Wingdings;font-size:10.0pt;">o</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
in lawful money of the United States; and/or</p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt;"><font size="2" face="Wingdings" style="font-family:Wingdings;font-size:10.0pt;">o</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; the cancellation of such portion of
the attached Warrant as is exercisable for a total of
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
shares of Common Stock (using a Fair Market Value of
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; per
share for purposes of this calculation); and/or</p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt;"><font size="2" face="Wingdings" style="font-family:Wingdings;font-size:10.0pt;">o</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; the cancellation of such number of
shares of Common Stock as is necessary, in accordance with the formula set
forth in Section 2, to exercise this Warrant with respect to the maximum number
of shares of Common Stock purchaseable pursuant to the cashless exercise
procedure set forth in Section 2.</p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<table border="0" cellspacing="0" cellpadding="0" width="100%" style="border-collapse:collapse;width:100.0%;">
 <tr>
  <td width="77%" colspan="2" valign="top" style="padding:0in .7pt 0in .7pt;width:77.7%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The undersigned
  requests that the certificates for such shares be issued in the name of, and
  delivered to</font></p>
  </td>
  <td width="22%" valign="top" style="border:none;border-bottom:solid windowtext .5pt;padding:0in .7pt 0in .7pt;width:22.3%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width="13%" valign="top" style="padding:0in .7pt 0in .7pt;width:13.98%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">whose address is</font></p>
  </td>
  <td width="86%" colspan="2" valign="top" style="border:none;border-bottom:solid windowtext .5pt;padding:0in .7pt 0in .7pt;width:86.02%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width="100%" colspan="3" valign="top" style="border:none;border-bottom:solid windowtext .5pt;padding:0in .7pt 0in .7pt;width:100.0%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
 </tr>
 <tr height="0">
  <td width="101" style="border:none;"></td>
  <td width="460" style="border:none;"></td>
  <td width="161" style="border:none;"></td>
 </tr>
</table>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The undersigned
represents and warrants that all offers and sales by the undersigned of the
securities issuable upon exercise of the within Warrant shall be made pursuant
to registration of the Common Stock under the Securities Act of 1933, as
amended (the &#147;Securities Act&#148;) or pursuant to an exemption from registration
under the Securities Act.</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<table border="0" cellspacing="0" cellpadding="0" width="100%" style="border-collapse:collapse;width:100.0%;">
 <tr>
  <td width="28%" colspan="3" valign="top" style="padding:0in 0in 0in 0in;width:28.72%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="16%" valign="top" style="padding:0in 0in 0in 0in;width:16.66%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="44%" valign="top" style="padding:0in 0in 0in 0in;width:44.38%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="10%" valign="top" style="padding:0in 0in 0in 0in;width:10.24%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width="5%" valign="top" style="padding:0in 0in 0in 0in;width:5.62%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Dated:</font></p>
  </td>
  <td width="22%" valign="top" style="border:none;border-bottom:solid windowtext .5pt;padding:0in 0in 0in 0in;width:22.18%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="0%" valign="top" style="padding:0in 0in 0in 0in;width:.92%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="16%" valign="top" style="padding:0in 0in 0in 0in;width:16.66%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="44%" valign="top" style="border:none;border-bottom:solid windowtext .5pt;padding:0in 0in 0in 0in;width:44.38%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="10%" valign="top" style="padding:0in 0in 0in 0in;width:10.24%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width="28%" colspan="3" valign="top" style="padding:0in 0in 0in 0in;width:28.72%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="16%" valign="top" style="padding:0in 0in 0in 0in;width:16.66%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="44%" valign="top" style="border:none;padding:0in 0in 0in 0in;width:44.38%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(Signature must conform
  to name of holder as specified on the face of the Warrant)</font></p>
  </td>
  <td width="10%" valign="top" style="padding:0in 0in 0in 0in;width:10.24%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width="28%" colspan="3" valign="top" style="padding:0in 0in 0in 0in;width:28.72%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="16%" valign="top" style="padding:0in 0in 0in 0in;width:16.66%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="44%" valign="top" style="padding:0in 0in 0in 0in;width:44.38%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="10%" valign="top" style="padding:0in 0in 0in 0in;width:10.24%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width="28%" colspan="3" valign="top" style="padding:0in 0in 0in 0in;width:28.72%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="16%" valign="top" style="padding:0in 0in 0in 0in;width:16.66%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="44%" valign="top" style="padding:0in 0in 0in 0in;width:44.38%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="10%" valign="top" style="padding:0in 0in 0in 0in;width:10.24%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width="28%" colspan="3" valign="top" style="padding:0in 0in 0in 0in;width:28.72%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="16%" valign="top" style="padding:0in 0in 0in 0in;width:16.66%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="44%" valign="top" style="border:none;border-bottom:solid windowtext .5pt;padding:0in 0in 0in 0in;width:44.38%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="10%" valign="top" style="padding:0in 0in 0in 0in;width:10.24%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width="28%" colspan="3" valign="top" style="padding:0in 0in 0in 0in;width:28.72%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="16%" valign="top" style="padding:0in 0in 0in 0in;width:16.66%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="44%" valign="top" style="padding:0in 0in 0in 0in;width:44.38%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(Address)</font></p>
  </td>
  <td width="10%" valign="top" style="padding:0in 0in 0in 0in;width:10.24%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
 </tr>
 <tr height="0">
  <td width="40" style="border:none;"></td>
  <td width="160" style="border:none;"></td>
  <td width="7" style="border:none;"></td>
  <td width="120" style="border:none;"></td>
  <td width="320" style="border:none;"></td>
  <td width="74" style="border:none;"></td>
 </tr>
</table>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">8</font></p>


<div style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">

<hr size="2" width="100%" noshade color="gray" align="left">

</font></div>

<font size="2" face="Times New Roman" style="font-size:10.0pt;">
<!-- SEQ.=1,FOLIO='8',FILE='C:\jms\jrollag\03-1904-1\task9693\1904-1-kg.htm',USER='jrollag',CD='Aug  7 11:06 2003' -->
<br clear="all" style="page-break-before:always;">
</font>

<p align="center" style="font-size:10.0pt;margin:0in 0in .0001pt;text-align:center;">&nbsp;</p>

<p align="right" style="margin:0in 0in .0001pt;text-align:right;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Exhibit
B</font></b></p>

<p align="right" style="margin:0in 0in .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;page-break-after:auto;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">FORM
OF TRANSFEROR ENDORSEMENT<br>
(To be signed only on transfer of Warrant)</font></p>

<p style="margin:0in 0in .0001pt;page-break-after:auto;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:1.0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">For value received, the
undersigned hereby sells, assigns, and transfers unto the person(s) named below
under the heading &#147;Transferees&#148; the right represented by the within Warrant to
purchase the percentage and number of shares of Common Stock of Digital Angel
Corporation to which the within Warrant relates specified under the headings
&#147;Percentage Transferred&#148; and &#147;Number Transferred,&#148; respectively, opposite the
name(s) of such person(s) and appoints each such person Attorney to transfer
its respective right on the books of Digital Angel Corporation with full power
of substitution in the premises.</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<table border="0" cellspacing="0" cellpadding="0" width="100%" style="border-collapse:collapse;width:100.0%;">
 <tr>
  <td width="21%" valign="top" style="border:none;border-bottom:solid windowtext .5pt;padding:0in .7pt 0in .7pt;width:21.74%;">
  <p style="margin:0in 0in .0001pt;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;font-weight:bold;">Transferees</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0in .7pt 0in .7pt;width:2.64%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="37%" valign="top" style="border:none;border-bottom:solid windowtext .5pt;padding:0in .7pt 0in .7pt;width:37.84%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;font-weight:bold;">Percentage
  Transferred</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0in .7pt 0in .7pt;width:2.64%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="35%" valign="top" style="border:none;border-bottom:solid windowtext .5pt;padding:0in .7pt 0in .7pt;width:35.14%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;font-weight:bold;">Number
  Transferrred</font></b></p>
  </td>
 </tr>
 <tr>
  <td width="21%" valign="top" bgcolor="#cceeff" style="background:#CCEEFF;border:none;padding:0in .7pt 0in .7pt;width:21.74%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="2%" valign="bottom" bgcolor="#cceeff" style="background:#CCEEFF;padding:0in .7pt 0in .7pt;width:2.64%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="37%" valign="top" bgcolor="#cceeff" style="background:#CCEEFF;border:none;padding:0in .7pt 0in .7pt;width:37.84%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="2%" valign="bottom" bgcolor="#cceeff" style="background:#CCEEFF;padding:0in .7pt 0in .7pt;width:2.64%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="35%" valign="top" bgcolor="#cceeff" style="background:#CCEEFF;border:none;padding:0in .7pt 0in .7pt;width:35.14%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width="21%" valign="top" style="padding:0in .7pt 0in .7pt;width:21.74%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="2%" valign="bottom" style="padding:0in .7pt 0in .7pt;width:2.64%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="37%" valign="top" style="padding:0in .7pt 0in .7pt;width:37.84%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="2%" valign="bottom" style="padding:0in .7pt 0in .7pt;width:2.64%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="35%" valign="top" style="padding:0in .7pt 0in .7pt;width:35.14%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width="21%" valign="top" bgcolor="#cceeff" style="background:#CCEEFF;padding:0in .7pt 0in .7pt;width:21.74%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="2%" valign="bottom" bgcolor="#cceeff" style="background:#CCEEFF;padding:0in .7pt 0in .7pt;width:2.64%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="37%" valign="top" bgcolor="#cceeff" style="background:#CCEEFF;padding:0in .7pt 0in .7pt;width:37.84%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="2%" valign="bottom" bgcolor="#cceeff" style="background:#CCEEFF;padding:0in .7pt 0in .7pt;width:2.64%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="35%" valign="top" bgcolor="#cceeff" style="background:#CCEEFF;padding:0in .7pt 0in .7pt;width:35.14%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width="21%" valign="top" style="padding:0in .7pt 0in .7pt;width:21.74%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="2%" valign="bottom" style="padding:0in .7pt 0in .7pt;width:2.64%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="37%" valign="top" style="padding:0in .7pt 0in .7pt;width:37.84%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="2%" valign="bottom" style="padding:0in .7pt 0in .7pt;width:2.64%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="35%" valign="top" style="padding:0in .7pt 0in .7pt;width:35.14%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width="21%" valign="top" bgcolor="#cceeff" style="background:#CCEEFF;padding:0in .7pt 0in .7pt;width:21.74%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="2%" valign="bottom" bgcolor="#cceeff" style="background:#CCEEFF;padding:0in .7pt 0in .7pt;width:2.64%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="37%" valign="top" bgcolor="#cceeff" style="background:#CCEEFF;padding:0in .7pt 0in .7pt;width:37.84%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="2%" valign="bottom" bgcolor="#cceeff" style="background:#CCEEFF;padding:0in .7pt 0in .7pt;width:2.64%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="35%" valign="top" bgcolor="#cceeff" style="background:#CCEEFF;padding:0in .7pt 0in .7pt;width:35.14%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
 </tr>
</table>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<table border="0" cellspacing="0" cellpadding="0" width="100%" style="border-collapse:collapse;width:100.0%;">
 <tr>
  <td width="35%" colspan="3" valign="top" style="padding:0in 0in 0in 0in;width:35.2%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="14%" valign="top" style="padding:0in 0in 0in 0in;width:14.8%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="41%" valign="top" style="padding:0in 0in 0in 0in;width:41.6%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="8%" valign="top" style="padding:0in 0in 0in 0in;width:8.4%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width="5%" valign="top" style="padding:0in 0in 0in 0in;width:5.62%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Dated:</font></p>
  </td>
  <td width="22%" valign="top" style="border:none;border-bottom:solid windowtext .5pt;padding:0in 0in 0in 0in;width:22.18%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="7%" valign="top" style="padding:0in 0in 0in 0in;width:7.4%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="14%" valign="top" style="padding:0in 0in 0in 0in;width:14.8%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="41%" valign="top" style="border:none;border-bottom:solid windowtext .5pt;padding:0in 0in 0in 0in;width:41.6%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="8%" valign="top" style="padding:0in 0in 0in 0in;width:8.4%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width="35%" colspan="3" valign="top" style="padding:0in 0in 0in 0in;width:35.2%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="14%" valign="top" style="padding:0in 0in 0in 0in;width:14.8%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="41%" valign="top" style="border:none;padding:0in 0in 0in 0in;width:41.6%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(Signature must conform
  to name of holder as specified on the face of the Warrant)</font></p>
  </td>
  <td width="8%" valign="top" style="padding:0in 0in 0in 0in;width:8.4%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width="35%" colspan="3" valign="top" style="padding:0in 0in 0in 0in;width:35.2%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="14%" valign="top" style="padding:0in 0in 0in 0in;width:14.8%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="41%" valign="top" style="padding:0in 0in 0in 0in;width:41.6%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="8%" valign="top" style="padding:0in 0in 0in 0in;width:8.4%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width="35%" colspan="3" valign="top" style="padding:0in 0in 0in 0in;width:35.2%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Signed in the presence
  of:</font></p>
  </td>
  <td width="14%" valign="top" style="padding:0in 0in 0in 0in;width:14.8%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="41%" valign="top" style="padding:0in 0in 0in 0in;width:41.6%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="8%" valign="top" style="padding:0in 0in 0in 0in;width:8.4%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width="35%" colspan="3" valign="top" style="padding:0in 0in 0in 0in;width:35.2%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="14%" valign="top" style="padding:0in 0in 0in 0in;width:14.8%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="41%" valign="top" style="padding:0in 0in 0in 0in;width:41.6%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="8%" valign="top" style="padding:0in 0in 0in 0in;width:8.4%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width="35%" colspan="3" valign="top" style="border:none;border-bottom:solid windowtext .5pt;padding:0in 0in 0in 0in;width:35.2%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="14%" valign="top" style="padding:0in 0in 0in 0in;width:14.8%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="41%" valign="top" style="border:none;border-bottom:solid windowtext .5pt;padding:0in 0in 0in 0in;width:41.6%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="8%" valign="top" style="padding:0in 0in 0in 0in;width:8.4%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width="35%" colspan="3" valign="top" style="border:none;padding:0in 0in 0in 0in;width:35.2%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(Name)</font></p>
  </td>
  <td width="14%" valign="top" style="padding:0in 0in 0in 0in;width:14.8%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="41%" valign="top" style="border:none;padding:0in 0in 0in 0in;width:41.6%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(address)</font></p>
  </td>
  <td width="8%" valign="top" style="padding:0in 0in 0in 0in;width:8.4%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width="35%" colspan="3" valign="top" style="padding:0in 0in 0in 0in;width:35.2%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="14%" valign="top" style="padding:0in 0in 0in 0in;width:14.8%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="41%" valign="top" style="padding:0in 0in 0in 0in;width:41.6%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="8%" valign="top" style="padding:0in 0in 0in 0in;width:8.4%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width="35%" colspan="3" valign="top" style="padding:0in 0in 0in 0in;width:35.2%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">ACCEPTED AND AGREED:</font></p>
  </td>
  <td width="14%" valign="top" style="padding:0in 0in 0in 0in;width:14.8%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="41%" valign="top" style="border:none;border-bottom:solid windowtext .5pt;padding:0in 0in 0in 0in;width:41.6%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="8%" valign="top" style="padding:0in 0in 0in 0in;width:8.4%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width="35%" colspan="3" valign="top" style="padding:0in 0in 0in 0in;width:35.2%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">[TRANSFEREE]</font></p>
  </td>
  <td width="14%" valign="top" style="padding:0in 0in 0in 0in;width:14.8%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="41%" valign="top" style="border:none;padding:0in 0in 0in 0in;width:41.6%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(address)</font></p>
  </td>
  <td width="8%" valign="top" style="padding:0in 0in 0in 0in;width:8.4%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width="35%" colspan="3" valign="top" style="padding:0in 0in 0in 0in;width:35.2%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="14%" valign="top" style="padding:0in 0in 0in 0in;width:14.8%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="41%" valign="top" style="padding:0in 0in 0in 0in;width:41.6%;">
  <p align="center" style="font-size:10.0pt;margin:0in 0in .0001pt;text-align:center;">&nbsp;</p>
  </td>
  <td width="8%" valign="top" style="padding:0in 0in 0in 0in;width:8.4%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width="35%" colspan="3" valign="top" style="border:none;border-bottom:solid windowtext .5pt;padding:0in 0in 0in 0in;width:35.2%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="14%" valign="top" style="padding:0in 0in 0in 0in;width:14.8%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="41%" valign="top" style="padding:0in 0in 0in 0in;width:41.6%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="8%" valign="top" style="padding:0in 0in 0in 0in;width:8.4%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width="35%" colspan="3" valign="top" style="border:none;padding:0in 0in 0in 0in;width:35.2%;">
  <p style="margin:0in 0in .0001pt 40.0pt;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(Name)</font></p>
  </td>
  <td width="14%" valign="top" style="padding:0in 0in 0in 0in;width:14.8%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="41%" valign="top" style="padding:0in 0in 0in 0in;width:41.6%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="8%" valign="top" style="padding:0in 0in 0in 0in;width:8.4%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
 </tr>
 <tr height="0">
  <td width="41" style="border:none;"></td>
  <td width="160" style="border:none;"></td>
  <td width="53" style="border:none;"></td>
  <td width="107" style="border:none;"></td>
  <td width="300" style="border:none;"></td>
  <td width="61" style="border:none;"></td>
 </tr>
</table>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">9</font></p>


<div style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">

<hr size="2" width="100%" noshade color="gray" align="left">

</font></div>

</div>


<!-- SEQ.=1,FOLIO='9',FILE='C:\jms\jrollag\03-1904-1\task9693\1904-1-kg.htm',USER='jrollag',CD='Aug  7 11:06 2003' -->
</body>

</html>

</TEXT>
</DOCUMENT>
