Exhibit 10.3

 

NEITHER THIS SECURITY NOR THE SECURITY INTO WHICH THIS SECURITY IS EXERCISABLE
HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE
SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND, ACCORDINGLY,
MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM,
OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS
EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE
SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY.

 

Warrant No. W-May07-1

 

250,000 Warrants

 

Void after 5:00 p.m., Eastern Standard Time on May 30, 2012

 

COMMON STOCK

PURCHASE WARRANT

 

OF

 

VIRIUM PHARMACEUTICALS INC.

 

VIRIUM PHARMACEUTICALS INC., A NEW YORK CORPORATION (THE “COMPANY”), HEREBY
CERTIFIES THAT, FOR VALUE RECEIVED, STRATEGIC CAPITAL RESOURCES, INC. (THE
“WARRANT HOLDER”) IS THE OWNER OF THE NUMBER OF COMMON STOCK PURCHASE WARRANTS
(“WARRANTS”) SPECIFIED ABOVE, EACH OF WHICH ENTITLES THE HOLDER THEREOF TO
PURCHASE, AT ANY TIME DURING THE PERIOD COMMENCING ON THE COMMENCEMENT DATE (AS
DEFINED HEREIN) AND ENDING ON THE EXPIRATION DATE (AS DEFINED HEREIN), ONE FULLY
PAID AND NON-ASSESSABLE SHARE OF COMMON STOCK, PAR VALUE $0.001 PER SHARE, OF
THE COMPANY (THE “COMMON STOCK”) AT A PURCHASE PRICE EQUAL TO THE EXERCISE PRICE
(AS DEFINED BELOW) IN LAWFUL MONEY OF THE UNITED STATES OF AMERICA IN CASH,
SUBJECT TO ADJUSTMENT AS HEREINAFTER PROVIDED.

 

1.             WARRANT; EXERCISE PRICE.

 

1.1           THIS WARRANT IS ISSUED PURSUANT TO A SUBSCRIPTION AGREEMENT DATED
AS OF THE DATE HEREOF, BY AND AMONG THE COMPANY AND THE SUBSCRIBERS SET FORTH
THEREIN (THE “SUBSCRIPTION AGREEMENT”).

 

1.2           EACH WARRANT SHALL ENTITLE THE WARRANT HOLDER TO PURCHASE ONE
SHARE OF COMMON STOCK OF THE COMPANY (INDIVIDUALLY, A “WARRANT SHARE” SEVERALLY,
THE “WARRANT SHARES”).

 

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1.3           THE PURCHASE PRICE PAYABLE UPON EXERCISE OF EACH WARRANT
(“EXERCISE PRICE”) SHALL INITIALLY BE $1.00. THE EXERCISE PRICE AND NUMBER OF
WARRANT SHARES PURCHASABLE PURSUANT TO EACH WARRANT ARE SUBJECT TO ADJUSTMENT AS
PROVIDED IN SECTION 8.

 

2.             EXERCISE OF  WARRANT; EXPIRATION DATE.

 

2.1           THIS WARRANT IS EXERCISABLE AT ANY TIME AND FROM TIME TO TIME
COMMENCING THE DATE HEREOF (“COMMENCEMENT DATE”) AND ENDING AT 5:00 P.M.,
EASTERN TIME ON MAY 30, 2012 (THE “EXPIRATION DATE”), IN WHOLE OR FROM TIME TO
TIME IN PART, AT THE OPTION OF THE WARRANT HOLDER, UPON SURRENDER OF THIS
WARRANT TO THE COMPANY TOGETHER WITH A DULY COMPLETED NOTICE OF EXERCISE IN THE
FORM ATTACHED HERETO AND PAYMENT OF AN AMOUNT EQUAL TO THE THEN APPLICABLE
EXERCISE PRICE MULTIPLIED BY THE NUMBER OF WARRANT SHARES THEN BEING PURCHASED
UPON SUCH EXERCISE.

 

2.2           EACH EXERCISE OF THIS WARRANT SHALL BE DEEMED TO HAVE BEEN
EFFECTED IMMEDIATELY PRIOR TO THE CLOSE OF BUSINESS ON THE DAY ON WHICH THIS
WARRANT SHALL HAVE BEEN SURRENDERED TO THE COMPANY AS PROVIDED IN SECTION 2.1. 
AT SUCH TIME, THE PERSON OR PERSONS IN WHOSE NAME OR NAMES ANY CERTIFICATES FOR
WARRANT SHARES SHALL BE ISSUABLE UPON SUCH EXERCISE AS PROVIDED IN SECTION 2.3
BELOW SHALL BE DEEMED TO HAVE BECOME THE HOLDER OR HOLDERS OF RECORD OF THE
WARRANT SHARES REPRESENTED BY SUCH CERTIFICATES.

 

2.3           WITHIN THREE BUSINESS DAYS AFTER THE EXERCISE OF THE PURCHASE
RIGHT REPRESENTED BY THIS WARRANT, THE COMPANY AT ITS EXPENSE WILL USE ITS
REASONABLE BEST EFFORTS TO CAUSE TO BE ISSUED IN THE NAME OF, AND DELIVERED TO,
THE WARRANT HOLDER, OR, SUBJECT TO THE TERMS AND CONDITIONS HEREOF, TO SUCH
OTHER INDIVIDUAL OR ENTITY AS SUCH WARRANT HOLDER (UPON PAYMENT BY SUCH WARRANT
HOLDER OF ANY APPLICABLE TRANSFER TAXES) MAY DIRECT:

 

(A)           A CERTIFICATE OR CERTIFICATES FOR THE NUMBER OF FULL WARRANT
SHARES TO WHICH SUCH WARRANT HOLDER SHALL BE ENTITLED UPON SUCH EXERCISE PLUS,
IN LIEU OF ANY FRACTIONAL SHARE TO WHICH SUCH WARRANT HOLDER WOULD OTHERWISE BE
ENTITLED, CASH IN AN AMOUNT DETERMINED PURSUANT TO SECTION 2.4 HEREOF, AND

 

(B)           IN CASE SUCH EXERCISE IS IN PART ONLY, A NEW WARRANT OR WARRANTS
(DATED THE DATE HEREOF) OF LIKE TENOR, STATING ON THE FACE OR FACES THEREOF THE
NUMBER OF SHARES CURRENTLY STATED ON THE FACE OF THIS WARRANT MINUS THE NUMBER
OF SUCH SHARES PURCHASED BY THE WARRANT HOLDER UPON SUCH EXERCISE AS PROVIDED IN
SECTION 2.2 (IN EACH CASE PRIOR TO ANY ADJUSTMENTS MADE THERETO PURSUANT TO THE
PROVISIONS OF THIS WARRANT).

 

2.4           THE COMPANY SHALL NOT BE REQUIRED UPON THE EXERCISE OF THIS
WARRANT TO ISSUE ANY FRACTIONAL SHARES, BUT SHALL MAKE AN ADJUSTMENT THEREOF IN
CASH ON THE BASIS OF THE “LAST SALE PRICE” (AS DEFINED BELOW) OF THE COMPANY’S
COMMON STOCK ON THE TRADING DAY IMMEDIATELY PRIOR TO THE DATE OF EXERCISE.  FOR
PURPOSES OF THIS SECTION 2.4, “LAST SALE PRICE” SHALL MEAN (I) IF THE COMMON
STOCK IS LISTED ON AN EXCHANGE OR QUOTED ON THE NASDAQ MARKETS OR NASD OTC
BULLETIN BOARD (OR SUCCESSOR SUCH AS THE BULLETIN BOARD EXCHANGE), THE LAST SALE
PRICE OF THE COMMON STOCK IN THE PRINCIPAL TRADING MARKET FOR THE COMMON STOCK
AS REPORTED BY THE EXCHANGE, NASDAQ OR THE NASD, AS THE CASE MAY BE; (II) IF THE
COMMON STOCK IS NOT LISTED ON AN

 

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EXCHANGE OR QUOTED ON THE NASDAQ MARKETS, OR THE NASD OTC BULLETIN BOARD (OR
SUCCESSOR SUCH AS THE BULLETIN BOARD EXCHANGE), BUT IS TRADED IN THE
OVER-THE-COUNTER MARKET, THE CLOSING BID PRICE FOR THE COMMON STOCK ON THE LAST
TRADING DAY PRECEDING THE DATE IN QUESTION FOR WHICH SUCH QUOTATIONS ARE
REPORTED BY THE PINK SHEETS, LLC OR SIMILAR PUBLISHER OF SUCH QUOTATIONS; AND
(III) IF THE FAIR MARKET VALUE OF THE COMMON STOCK CANNOT BE DETERMINED PURSUANT
TO CLAUSE (I) OR (II) ABOVE, SUCH PRICE AS THE BOARD OF DIRECTORS OF THE COMPANY
SHALL DETERMINE, IN GOOD FAITH, IN THE BOARD’S SOLE DISCRETION.

 

3.             REGISTRATION AND TRANSFER ON COMPANY BOOKS.

 

3.1           THE COMPANY (OR AN AGENT OF THE COMPANY) WILL MAINTAIN A REGISTER
CONTAINING THE NAMES AND ADDRESSES OF THE WARRANT HOLDERS.  ANY WARRANT HOLDER
MAY CHANGE ITS, HIS OR HER ADDRESS AS SHOWN ON THE WARRANT REGISTER BY WRITTEN
NOTICE TO THE COMPANY REQUESTING SUCH CHANGE.

 

3.2           THE COMPANY SHALL REGISTER UPON ITS BOOKS ANY TRANSFER OF A
WARRANT UPON SURRENDER OF SAME AS PROVIDED IN SECTION 5.

 

4.             RESERVATION OF SHARES.  THE COMPANY WILL AT ALL TIMES RESERVE AND
KEEP AVAILABLE, SOLELY FOR ISSUANCE AND DELIVERY UPON THE EXERCISE OF THIS
WARRANT, SUCH WARRANT SHARES AND OTHER STOCK, SECURITIES AND PROPERTY, AS FROM
TIME TO TIME SHALL BE ISSUABLE UPON THE EXERCISE OF THIS WARRANT.  AS LONG AS
THE WARRANT SHALL BE OUTSTANDING, THE COMPANY SHALL USE ITS COMMERCIALLY
REASONABLE EFFORTS TO CAUSE ALL WARRANT SHARES ISSUABLE UPON EXERCISE OF THE
WARRANTS TO BE LISTED (SUBJECT TO OFFICIAL NOTICE OF ISSUANCE) ON EACH EXCHANGE
(OR, IF APPLICABLE ON NASDAQ, NASD OTC BULLETIN BOARD OR PINK SHEETS, LLC OR ANY
SUCCESSOR ELECTRONIC QUOTATION SERVICE AND TRADING MARKET) ON WHICH THE COMMON
STOCK IS THEN LISTED AND/OR QUOTED, IF ANY.

 

5.             EXCHANGE, TRANSFER, ASSIGNMENT OR LOSS OR MUTILATION OF 
WARRANTS.  THIS WARRANT IS EXCHANGEABLE, WITHOUT EXPENSE, AT THE OPTION OF THE
WARRANT HOLDER, UPON PRESENTATION AND SURRENDER HEREOF TO THE COMPANY FOR OTHER
WARRANTS OF DIFFERENT DENOMINATIONS ENTITLING THE HOLDER THEREOF TO PURCHASE IN
THE AGGREGATE THE SAME NUMBER OF SHARES OF COMMON STOCK PURCHASABLE HEREUNDER. 
SUBJECT TO THE TERMS OF SECTIONS 6 AND 7, UPON SURRENDER OF THIS WARRANT TO THE
COMPANY AT ITS PRINCIPAL OFFICE OR AT THE OFFICE OF ITS TRANSFER AGENT, IF ANY,
WITH THE ASSIGNMENT FORM ANNEXED HERETO DULY EXECUTED AND FUNDS SUFFICIENT TO
PAY ANY TRANSFER TAX, THE COMPANY SHALL, WITHOUT CHARGE, EXECUTE AND DELIVER A
NEW WARRANT IN THE NAME OF THE ASSIGNEE NAMED IN SUCH INSTRUMENT OF ASSIGNMENT
AND THIS WARRANT SHALL BE PROMPTLY CANCELED.  SUBJECT TO THE TERMS OF SECTIONS 6
AND 7, THIS WARRANT MAY BE DIVIDED OR COMBINED WITH OTHER WARRANTS WHICH CARRY
THE SAME RIGHTS UPON PRESENTATION HEREOF AT THE PRINCIPAL OFFICE OF THE COMPANY
TOGETHER WITH A WRITTEN NOTICE SPECIFYING THE NAMES AND DENOMINATIONS IN WHICH
NEW WARRANTS ARE TO BE ISSUED AND SIGNED BY THE WARRANT HOLDER HEREOF.  THE TERM
“WARRANT” AS USED HEREIN INCLUDES ANY WARRANTS INTO WHICH THIS WARRANT MAY BE
DIVIDED OR EXCHANGED.  UPON RECEIPT BY THE COMPANY OF REASONABLE EVIDENCE OF THE
OWNERSHIP OF AND THE LOSS, THEFT, DESTRUCTION OR MUTILATION OF THIS WARRANT AND,
IN THE CASE OF LOSS, THEFT OR DESTRUCTION, OF INDEMNITY REASONABLY SATISFACTORY
TO THE COMPANY, OR, IN THE CASE OF MUTILATION,

 

3

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UPON SURRENDER AND CANCELLATION OF THE MUTILATED WARRANT, THE COMPANY SHALL
EXECUTE AND DELIVER IN LIEU THEREOF A NEW WARRANT OF LIKE TENOR AND DATE
REPRESENTING AN EQUAL NUMBER OF WARRANTS.

 

6.             LIMITATION ON EXERCISE AND SALES.

 

(A)           EACH HOLDER OF THIS WARRANT ACKNOWLEDGES THAT THIS WARRANT AND THE
WARRANT SHARES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT, AS OF THE DATE
OF ISSUANCE HEREOF.  THIS WARRANT ONLY MAY BE TRANSFERRED IN COMPLIANCE WITH
THIS SECTION 6 AND SECTION 7. THE COMPANY SHALL BE UNDER NO OBLIGATION TO ISSUE
THE SHARES COVERED BY SUCH EXERCISE UNLESS AND UNTIL THE WARRANT HOLDER SHALL
HAVE EXECUTED THE FORM OF EXERCISE ANNEXED HERETO THAT STATES THAT AT THE TIME
OF SUCH EXERCISE THAT IT IS THEN AN “ACCREDITED INVESTOR” WITHIN THE MEANING OF
RULE 501 OF REGULATION D, IS ACQUIRING SUCH SHARES FOR ITS OWN ACCOUNT, AND WILL
NOT TRANSFER THE WARRANT SHARES UNLESS PURSUANT TO AN EFFECTIVE AND CURRENT
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR AN EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND ANY OTHER APPLICABLE
RESTRICTIONS, IN WHICH EVENT THE WARRANT HOLDER SHALL BE BOUND BY THE PROVISIONS
OF A LEGEND OR LEGENDS TO SUCH EFFECT THAT SHALL BE ENDORSED UPON THE
CERTIFICATE(S) REPRESENTING THE WARRANT SHARES ISSUED PURSUANT TO SUCH
EXERCISE.  IN SUCH EVENT, THE WARRANT SHARES ISSUED UPON EXERCISE HEREOF SHALL
BE IMPRINTED WITH A LEGEND IN SUBSTANTIALLY THE FORM PROVIDED IN SECTION 7(B).

 

(b)           Warrant Holder represents and warrants that it is acquiring this
Warrant for its own account, for purposes of investment, and not with a view to,
or for sale in connection with, any distribution thereof within the meaning of
the Securities Act and the rules and regulations promulgated thereunder. 
Warrant Holder represents, warrants and agrees that it will not sell, exercise,
transfer or otherwise dispose of this Warrant (or any interest therein) or any
of the Common Stock purchasable upon exercise hereof, except pursuant to (i) an
effective registration statement under the Securities Act and applicable state
securities laws or (ii) an opinion of counsel, satisfactory to Company, that an
exemption from registration under the Securities Act and such laws is
available.  Warrant Holder further acknowledges and agrees that Company is not
required, legally or contractually, so to register or qualify the Warrant or
such Common Stock or to take any action to make such an exemption available. 
Warrant Holder understands that Company will be relying upon the truth and
accuracy of the representations and warranties contained in this Section 6 in
issuing this Warrant and such Common Stock without first registering the
issuance thereof under the Securities Act or qualifying or registering the
issuance thereof under any state securities laws that may be applicable.

 

(c)           Warrant Holder acknowledges that (i) there is not now, and there
may not be in the future, any public market for the Warrant, (ii) although there
currently is not a public trading market for the Common Stock, there can be no
assurance that any such market will be created and sustained, and (iii) there
can be no assurance that Warrant Holder will be able to liquidate its investment
in Company.  Warrant Holder represents and warrants that it is familiar with and
understands the terms and conditions of Rule 144 promulgated under the
Securities Act.

 

(d)           Warrant Holder represents and warrants to Company that (i) it has
such knowledge and experience in financial and business matters as is necessary
to enable it to evaluate the merits and risks of any investments in Company and
is not utilizing any other person to be a purchaser representative in connection
with evaluation of such merits and risks; and (ii) it

 

4

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has no need for liquidity in an investment in Company and is able to bear the
risk of that investment for an indefinite period and to afford a complete loss
thereof.

 

(e)           Warrant Holder represents and warrants that it has had access to,
and has been furnished with, all of the information it has requested from
Company and has had an opportunity to review the books and records of Company
and to discuss with management and members of the board of directors of Company
the business and financial affairs of Company.

 

(f)            Warrant Holder agrees that at the time of each exercise of this
Warrant, unless the issuance of shares of Common Stock issuable thereupon is
pursuant to an effective registration statement under the Securities Act and
under applicable state blue sky laws, Warrant Holder will provide Company with a
letter embodying the representations and warranties set forth in subsections
(b) through (e), in form and substance satisfactory to Company, and agrees that
the certificate(s) representing any shares issued to it upon any exercise of
this Warrant may bear such restrictive legend as Company may deem necessary to
reflect the restricted status of such shares under the Securities Act unless
Company shall have received from Warrant Holder an opinion of counsel to Warrant
Holder, reasonably satisfactory in form and substance to Company and its
counsel, that such restrictive legend is not required.

 

7.             TRANSFER RESTRICTIONS.

 

(a)           If, at the time of the surrender of this Warrant in connection
with any transfer of this Warrant, the transfer of this Warrant shall not be
registered pursuant to an effective registration statement under the Securities
Act and under applicable state securities or blue sky laws, the Company may
require, as a condition of allowing such transfer (i) that the Warrant Holder or
transferee of this Warrant, as the case may be, furnish to the Company a written
opinion of counsel (which opinion shall be in form, substance and scope
customary for opinions of counsel in comparable transactions and reasonably
satisfactory to counsel for the Company) to the effect that such transfer may be
made without registration under the Securities Act and under applicable state
securities or blue sky laws, (ii) that the holder or transferee execute and
deliver to the Company an investment letter in form and substance acceptable to
the Company, (iii) that transferee agree in writing with the Company to be bound
by the terms and conditions of this Warrant applicable to the Warrant Holder and
(iv) that the transferee be an “accredited investor” as defined in Regulation D
promulgated under the Securities Act.

 

(b)           The Common Stock issuable on the exercise of the Warrant shall
bear the following legend:

 

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

 

5

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AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL
OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH
SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY.

 

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

 

8.             ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF SHARES DELIVERABLE.
 THE EXERCISE PRICE AND THE NUMBER OF WARRANT SHARES PURCHASABLE PURSUANT TO
EACH WARRANT SHALL BE SUBJECT TO ADJUSTMENT FROM TIME TO TIME AS HEREINAFTER SET
FORTH IN THIS SECTION 8:

 

(A)           IN CASE, PRIOR TO THE EXPIRATION OF THIS WARRANT BY EXERCISE OR BY
ITS TERMS, THE COMPANY SHALL ISSUE ANY SHARES OF ITS COMMON STOCK AS A STOCK
DIVIDEND OR SUBDIVIDE THE NUMBER OF OUTSTANDING SHARES OF ITS COMMON STOCK INTO
A GREATER NUMBER OF SHARES, THEN IN EITHER OF SUCH CASES, THE THEN APPLICABLE
EXERCISE PRICE PER WARRANT SHARE PURCHASABLE PURSUANT TO THIS WARRANT IN EFFECT
AT THE TIME OF SUCH ACTION SHALL BE PROPORTIONATELY REDUCED AND THE NUMBER OF
WARRANT SHARES AT THAT TIME PURCHASABLE PURSUANT TO THIS WARRANT SHALL BE
PROPORTIONATELY INCREASED; AND CONVERSELY, IN THE EVENT THE COMPANY SHALL REDUCE
THE NUMBER OF OUTSTANDING SHARES OF COMMON STOCK BY COMBINING SUCH SHARES INTO A
SMALLER NUMBER OF SHARES, THEN, IN SUCH CASE, THE THEN APPLICABLE EXERCISE PRICE
PER WARRANT SHARE PURCHASABLE PURSUANT TO THIS WARRANT IN EFFECT AT THE TIME OF
SUCH ACTION SHALL BE PROPORTIONATELY INCREASED AND THE NUMBER OF WARRANT SHARES
AT THAT TIME PURCHASABLE PURSUANT TO THIS WARRANT SHALL BE PROPORTIONATELY
DECREASED.  IF THE COMPANY SHALL, AT ANY TIME DURING THE LIFE OF THIS WARRANT,
DECLARE A DIVIDEND PAYABLE IN CASH ON ITS COMMON STOCK AND SHALL AT
SUBSTANTIALLY THE SAME TIME OFFER TO ITS STOCKHOLDERS A RIGHT TO PURCHASE NEW
COMMON STOCK FROM THE PROCEEDS OF SUCH DIVIDEND OR FOR AN AMOUNT SUBSTANTIALLY
EQUAL TO THE DIVIDEND, ALL COMMON STOCK SO ISSUED SHALL, FOR THE PURPOSE OF THIS
WARRANT, BE DEEMED TO HAVE BEEN ISSUED AS A STOCK DIVIDEND.  ANY DIVIDEND PAID
OR DISTRIBUTED UPON THE COMMON STOCK IN STOCK OF ANY OTHER CLASS OF SECURITIES
CONVERTIBLE INTO SHARES OF COMMON STOCK SHALL BE TREATED AS A DIVIDEND PAID IN
COMMON STOCK TO THE EXTENT THAT SHARES OF COMMON STOCK ARE ISSUABLE UPON
CONVERSION THEREOF.

 

(B)           IN CASE, PRIOR TO THE EXPIRATION OF THIS WARRANT BY EXERCISE OR BY
ITS TERMS, THE COMPANY SHALL BE RECAPITALIZED BY RECLASSIFYING ITS OUTSTANDING
COMMON STOCK, (OTHER THAN A CHANGE IN PAR VALUE TO NO PAR VALUE), OR THE
CORPORATION OR A SUCCESSOR CORPORATION SHALL CONSOLIDATE OR MERGE WITH OR CONVEY
ALL OR SUBSTANTIALLY ALL OF ITS OR OF ANY SUCCESSOR CORPORATION’S PROPERTY AND
ASSETS TO ANY OTHER CORPORATION OR CORPORATIONS (ANY SUCH OTHER CORPORATIONS
BEING INCLUDED WITHIN THE MEANING OF THE TERM “SUCCESSOR CORPORATION”
HEREINBEFORE USED IN THE EVENT OF ANY CONSOLIDATION OR MERGER OF ANY SUCH OTHER
CORPORATION WITH, OR THE SALE OF ALL OR SUBSTANTIALLY ALL OF THE PROPERTY OF ANY
SUCH OTHER CORPORATION TO, ANOTHER CORPORATION OR CORPORATIONS), THEN, AS A
CONDITION OF SUCH RECAPITALIZATION, CONSOLIDATION, MERGER OR CONVEYANCE, LAWFUL
AND ADEQUATE PROVISION SHALL BE MADE WHEREBY THE HOLDER OF THIS WARRANT SHALL
THEREAFTER HAVE THE RIGHT TO PURCHASE, UPON THE BASIS AND ON THE TERMS AND
CONDITIONS SPECIFIED IN THIS WARRANT, IN LIEU OF THE WARRANT SHARES THERETOFORE
PURCHASABLE UPON THE EXERCISE OF THIS WARRANT,

 

6

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SUCH SHARES OF STOCK, SECURITIES OR ASSETS AS MAY BE ISSUED OR PAYABLE WITH
RESPECT TO, OR IN EXCHANGE FOR, THE NUMBER OF WARRANT SHARES THERETOFORE
PURCHASABLE UPON THE EXERCISE OF THIS WARRANT HAD SUCH RECAPITALIZATION,
CONSOLIDATION, MERGER, OR CONVEYANCE NOT TAKEN PLACE; AND IN ANY SUCH EVENT, THE
RIGHTS OF THE WARRANT HOLDER TO ANY ADJUSTMENT IN THE NUMBER OF WARRANT SHARES
PURCHASABLE UPON THE EXERCISE OF THIS WARRANT, AS HEREIN PROVIDED, SHALL
CONTINUE AND BE PRESERVED IN RESPECT OF ANY STOCK WHICH THE WARRANT HOLDER
BECOMES ENTITLED TO PURCHASE.

 

(C)           IN CASE THE COMPANY AT ANY TIME WHILE THIS WARRANT SHALL REMAIN
UNEXPIRED AND UNEXERCISED SHALL SELL ALL OR SUBSTANTIALLY ALL OF ITS PROPERTY OR
DISSOLVE, LIQUIDATE, OR WIND UP ITS AFFAIRS, LAWFUL PROVISION SHALL BE MADE AS
PART OF THE TERMS OF ANY SUCH SALE, DISSOLUTION, LIQUIDATION OR WINDING UP, SO
THAT THE HOLDER OF THIS WARRANT MAY THEREAFTER RECEIVE UPON EXERCISE HEREOF IN
LIEU OF EACH WARRANT SHARE THAT IT WOULD HAVE BEEN ENTITLED TO RECEIVE, THE SAME
KIND AND AMOUNT OF ANY SECURITIES OR ASSETS AS MAY BE ISSUABLE, DISTRIBUTABLE OR
PAYABLE UPON ANY SUCH SALE, DISSOLUTION, LIQUIDATION OR WINDING UP WITH RESPECT
TO EACH SHARE OF COMMON STOCK OF THE COMPANY, PROVIDED, HOWEVER, THAT IN ANY
CASE OF ANY SUCH SALE OR OF DISSOLUTION, LIQUIDATION OR WINDING UP, THE RIGHT TO
EXERCISE THIS WARRANT SHALL TERMINATE ON A DATE FIXED BY THE COMPANY; SUCH DATE
SO FIXED TO BE NOT EARLIER THAN 5:00 P.M., EASTERN TIME, ON THE FORTY-FIFTH DAY
NEXT SUCCEEDING THE DATE ON WHICH NOTICE OF SUCH TERMINATION OF THE RIGHT TO
EXERCISE THIS WARRANT HAS BEEN GIVEN BY MAIL TO THE REGISTERED HOLDER OF THIS
WARRANT AT ITS ADDRESS AS IT APPEARS ON THE BOOKS OF THE COMPANY.

 

9.             VOLUNTARY ADJUSTMENT BY THE COMPANY.  THE COMPANY MAY, AT ITS
OPTION, AT ANY TIME DURING THE TERM OF THE WARRANTS, REDUCE THE THEN CURRENT
EXERCISE PRICE TO ANY AMOUNT DEEMED APPROPRIATE BY THE BOARD OF DIRECTORS OF THE
COMPANY AND/OR EXTEND THE DATE OF THE EXPIRATION OF THE WARRANTS.

 

10.           RIGHTS OF THE HOLDER. THE WARRANT HOLDER SHALL NOT, BY VIRTUE
HEREOF, BE ENTITLED TO ANY RIGHTS OF A STOCKHOLDER IN THE COMPANY, EITHER AT LAW
OR EQUITY, AND THE RIGHTS OF THE WARRANT HOLDER ARE LIMITED TO THOSE EXPRESSED
IN THIS WARRANT AND ARE NOT ENFORCEABLE AGAINST THE COMPANY EXCEPT TO THE EXTENT
SET FORTH HEREIN. THIS WARRANT DOES NOT ENTITLE THE HOLDER TO ANY VOTING RIGHTS
OR OTHER RIGHTS AS A SHAREHOLDER OF THE COMPANY PRIOR TO THE EXERCISE DATE AND
THEN ONLY WITH RESPECT TO THE WARRANT SHARES TO BE ISSUED WITH RESPECT THERETO.

 

11.           NOTICES OF RECORD DATE.  IN CASE:

 

(A)           THE COMPANY SHALL TAKE A RECORD OF THE HOLDERS OF ITS COMMON STOCK
(OR OTHER STOCK OR SECURITIES AT THE TIME DELIVERABLE UPON THE EXERCISE OF THIS
WARRANT) FOR THE PURPOSE OF ENTITLING OR ENABLING THEM TO RECEIVE ANY DIVIDEND
OR OTHER DISTRIBUTION, OR TO RECEIVE ANY RIGHT TO SUBSCRIBE FOR OR PURCHASE ANY
SHARES OF ANY CLASS OR ANY OTHER SECURITIES, OR TO RECEIVE ANY OTHER RIGHT, OR

 

(B)           OF ANY CAPITAL REORGANIZATION OF THE COMPANY, ANY RECLASSIFICATION
OF THE CAPITAL STOCK OF THE COMPANY, ANY CONSOLIDATION OR MERGER OF THE COMPANY
WITH OR INTO ANOTHER CORPORATION (OTHER THAN A CONSOLIDATION OR MERGER IN WHICH
THE COMPANY IS THE SURVIVING ENTITY), OR ANY TRANSFER OF ALL OR SUBSTANTIALLY
ALL OF THE ASSETS OF THE COMPANY, OR

 

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(C)           OF THE VOLUNTARY OR INVOLUNTARY DISSOLUTION, LIQUIDATION OR
WINDING-UP OF THE COMPANY,

 

THEN, AND IN EACH SUCH CASE, THE COMPANY WILL MAIL OR CAUSE TO BE MAILED TO THE
WARRANT HOLDER A NOTICE SPECIFYING, AS THE CASE MAY BE, (I) THE DATE ON WHICH A
RECORD IS TO BE TAKEN FOR THE PURPOSE OF SUCH DIVIDEND, DISTRIBUTION OR RIGHT,
AND STATING THE AMOUNT AND CHARACTER OF SUCH DIVIDEND, DISTRIBUTION OR RIGHT, OR
(II) THE EFFECTIVE DATE ON WHICH SUCH REORGANIZATION, RECLASSIFICATION,
CONSOLIDATION, MERGER, TRANSFER, DISSOLUTION, LIQUIDATION OR WINDING-UP IS TO
TAKE PLACE, AND THE TIME, IF ANY IS TO BE FIXED, AS OF WHICH THE HOLDERS OF
RECORD OF COMMON STOCK (OR SUCH OTHER STOCK OR SECURITIES AT THE TIME
DELIVERABLE UPON THE EXERCISE OF THIS  WARRANT) SHALL BE ENTITLED TO EXCHANGE
THEIR SHARES OF COMMON STOCK (OR SUCH OTHER STOCK OR SECURITIES) FOR SECURITIES
OR OTHER PROPERTY DELIVERABLE UPON SUCH REORGANIZATION, RECLASSIFICATION,
CONSOLIDATION, MERGER, TRANSFER, DISSOLUTION, LIQUIDATION OR WINDING-UP.  SUCH
NOTICE SHALL BE MAILED AT LEAST TEN DAYS PRIOR TO THE RECORD DATE OR EFFECTIVE
DATE FOR THE EVENT SPECIFIED IN SUCH NOTICE, PROVIDED THAT THE FAILURE TO MAIL
SUCH NOTICE SHALL NOT AFFECT THE LEGALITY OR VALIDITY OF ANY SUCH ACTION.  THE
COMPANY SHALL NOT BE REQUIRED TO DELIVER ANY SUCH NOTICE WITH RESPECT TO THE
TRANSACTIONS CONTEMPLATED BY THE AGREEMENT AND PLAN OF MERGER, DATED AS OF THE
DATE HEREOF, BY AND AMONG THE COMPANY, REIT AMERICAS, INC., A MARYLAND
CORPORATION, VIRIUM PHARMACEUTICALS, INC., A DELAWARE CORPORATION AND VIRIUM
MERGER SUB, INC., A DELAWARE CORPORATION.

 

12.           SUCCESSORS.  THE RIGHTS AND OBLIGATIONS OF THE PARTIES TO THIS
WARRANT WILL INURE TO THE BENEFIT OF AND BE BINDING UPON THE PARTIES HERETO AND
THEIR RESPECTIVE HEIRS, SUCCESSORS, ASSIGNS, PLEDGEES, TRANSFEREES AND
PURCHASERS.

 

13.           CHANGE OR WAIVER.  ANY TERM OF THIS WARRANT MAY BE CHANGED OR
WAIVED ONLY BY AN INSTRUMENT IN WRITING SIGNED BY THE PARTY AGAINST WHOM
ENFORCEMENT OF THE CHANGE OR WAIVER IS SOUGHT.

 

14.           HEADINGS.  THE HEADINGS IN THIS WARRANT ARE FOR PURPOSES OF
REFERENCE ONLY AND SHALL NOT LIMIT OR OTHERWISE AFFECT THE MEANING OF ANY
PROVISION OF THIS WARRANT. WHEREVER POSSIBLE, EACH PROVISION OF THIS WARRANT
SHALL BE INTERPRETED IN SUCH MANNER AS TO BE EFFECTIVE AND VALID UNDER
APPLICABLE LAW, BUT IF ANY PROVISION OF THIS WARRANT SHALL BE PROHIBITED BY OR
INVALID UNDER APPLICABLE LAW, SUCH PROVISION SHALL BE INEFFECTIVE TO THE EXTENT
OF SUCH PROHIBITION OR INVALIDITY, WITHOUT INVALIDATING THE REMAINDER OF SUCH
PROVISIONS OR THE REMAINING PROVISIONS OF THIS WARRANT.

 

15.           GOVERNING LAW.  THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.  ANY ACTION BROUGHT BY EITHER
PARTY AGAINST THE OTHER CONCERNING THE TRANSACTIONS CONTEMPLATED BY THIS NOTE
SHALL BE BROUGHT ONLY IN THE STATE COURTS OF FLORIDA OR IN THE FEDERAL COURTS
LOCATED IN THE STATE OF FLORIDA.  THE PREVAILING PARTY SHALL BE ENTITLED TO
RECOVER FROM THE OTHER PARTY ITS REASONABLE ATTORNEY’S FEES AND COSTS.

 

16.           MAILING OF NOTICES, ETC.  ALL NOTICES AND OTHER COMMUNICATIONS
REQUIRED OR PERMITTED HEREUNDER SHALL BE IN WRITING AND SHALL BE DEEMED TO HAVE
BEEN DULY GIVEN ONE (1) BUSINESS DAY AFTER DELIVERY TO AN OVERNIGHT CARRIER WITH
INSTRUCTIONS TO DELIVER TO THE APPLICABLE

 

8

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ADDRESS SET FORTH BELOW, OR, IF SENT BY FACSIMILE, UPON RECEIPT OF A
CONFIRMATION OF DELIVERY:

 

 

REGISTERED HOLDER:

TO HIS OR HER LAST KNOWN ADDRESS AS INDICATED ON THE COMPANY’S BOOKS AND
RECORDS.

 

 

 

 

THE COMPANY:

VIRIUM PHARMACEUTICALS INC.

 

 

116 Village Blvd.

 

 

Suite 200

 

 

Princeton, NJ 08540

 

 

Attention: President

 

 

Fax: (908) 292-1096

 

[Signature Page Follows]

 

9

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IN WITNESS WHEREOF, THE COMPANY HAS CAUSED THIS WARRANT TO BE SIGNED BY ITS DULY
AUTHORIZED OFFICER AS OF MAY 30, 2007

 

 

 

VIRIUM PHARMACEUTICALS INC.

 

 

 

 

 

BY:

/S/ JAMES M. PACHENCE

 

NAME:   JAMES M. PACHENCE

 

TITLE:   PRESIDENT AND CHIEF EXECUTIVE OFFICER

 

10

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NOTICE OF EXERCISE

TO BE EXECUTED BY THE WARRANT HOLDER

IN ORDER TO EXERCISE WARRANTS

 

TO:   Virium Pharmaceuticals Inc.

 

The undersigned hereby: (1) irrevocably subscribes for and offers to purchase
               shares of the common stock, par value $.001 per share (“Common
Stock”), of Virium Pharmaceuticals Inc., pursuant to Warrant No.       
heretofore issued to                                        on May 30, 2007 and
(2) encloses a cash payment of $                     representing the aggregate
exercise price for such shares.

 

The undersigned hereby represents and warrants to the Company that it is an
“Accredited Investor” within the meaning of Rule 501 of Regulation D promulgated
under the Securities Act of 1933, as amended (the “Securities Act”), and is
acquiring these securities for its own account and not with a view to, or for
sale in connection with, any distribution thereof, nor with any present
intention of distributing or selling the same.  The undersigned further
represents that it does not have any contract, agreement, understanding or
arrangement with any person to sell, transfer or grant the shares of Common
Stock issuable under this Warrant.  The undersigned understands that the shares
it will be receiving are “restricted securities” under Federal securities laws
inasmuch as they are being acquired from Virium Pharmaceuticals Inc., in
transactions not including any public offering and that under such laws, such
shares may only be sold pursuant to an effective and current registration
statement under the Securities Act or an exemption from the registration
requirements of the Securities Act and any other applicable restrictions, in
which event a legend or legends will be placed upon the
certificate(s) representing the Common Stock issuable under this Warrant
denoting such restrictions.  The undersigned understands and acknowledges that
the Company will rely on the accuracy of these representations and warranties in
issuing the securities underlying the Warrant.

 

[warrant notice of exercise signature page to follow]

 

11

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[warrant notice of exercise signature page]

 

Date:

 

 

Warrant Holder Name:

 

 

Taxpayer Identification Number:

 

 

By:

 

 

Printed Name:

 

 

Title:

 

 

Address:

 

 

Note: The above signature should correspond exactly with the name on the face of
this Warrant or with the name of assignee appearing in assignment form below.

 

AND, if said number of shares shall be less than the total number of shares
purchasable under the Warrant, a new Warrant is to be issued in the name of said
undersigned for the balance remaining of the shares purchasable thereunder less
any fraction of a share paid in cash and delivered to the address stated above.

 

--------------------------------------------------------------------------------

 

ASSIGNMENT FORM

TO BE EXECUTED BY THE WARRANT HOLDER

IN ORDER TO ASSIGN WARRANTS

 

FOR VALUE
RECEIVED,                                                                        
HEREBY SELL, ASSIGNS AND TRANSFER UNTO

 

PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER

 

 

 

 

 

 

 

(Please print or type name and address)

 

                                             OF THE WARRANTS REPRESENTED BY THIS
WARRANT, AND HEREBY IRREVOCABLY CONSTITUTES AND APPOINTS
                                                 ATTORNEY TO TRANSFER THIS
WARRANT ON THE BOOKS OF THE COMPANY, WITH FULL POWER OF SUBSTITUTION IN THE
PREMISES.

 

DATED:

 

 

 

 

 

 

(SIGNATURE OF REGISTERED HOLDER)

 

 

In addition to executing this Assignment Form, the Warrant Holder and the
transferee must comply with the other requirements for transfer set forth in
Sections 6 and 7 of the Warrant.

 

CERTIFICATION OF STATUS OF TRANSFEREE

TO BE EXECUTED BY THE TRANSFEREE OF THIS WARRANT

 

THE UNDERSIGNED TRANSFEREE HEREBY CERTIFIES TO THE REGISTERED HOLDER OF THIS
WARRANT AND TO VIRIUM PHARMACEUTICALS INC. THAT THE TRANSFEREE IS AN “ACCREDITED
INVESTOR” WITHIN THE MEANING OF RULE 501 OF REGULATION D PROMULGATED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED.

 

DATED:

 

 

 

 

 

 

 

(SIGNATURE OF TRANSFEREE)

 

13

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