ex4-2.htm


    Exhibit
      4.2


     

    WARRANT

     

    THE
      SECURITIES REPRESENTED BY THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE
      SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES
      LAWS.  THE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE
      OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE
      REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933,
      AS
      AMENDED, OR APPLICABLE STATE SECURITIES LAWS, OR AN OPINION OF COUNSEL IN A
      FORM
      REASONABLY SATISFACTORY TO THE ISSUER THAT REGISTRATION IS NOT REQUIRED UNDER
      SAID ACT OR APPLICABLE STATE SECURITIES LAWS OR UNLESS SOLD PURSUANT TO RULE
      144
      UNDER SAID ACT.

     

     

    IR
      BIOSCIENCES HOLDINGS, INC.

     

     

    Warrant
      To Purchase Common Stock

     

    Warrant
      No.:
      IRBO-1-1                                                          Number
      of
      Shares:                                              
7,500,000

                                                                              Warrant
      Exercise Price:        
                                   
$0.25

                                                                              Expiration
      Date:                                 
December 31, 2012

    


    Date
      of
      Issuance: January 3, 2008

    


    IR
      Biosciences Holdings, Inc., a Delaware corporation (the “Company”), hereby
      certifies that, for good and valuable consideration, the receipt and sufficiency
      of which are hereby acknowledged, YA Global Investments, L.P.
      (the “Holder”),
      the registered holder hereof or its permitted assigns, is entitled, subject
      to
      the terms set forth below, to purchase from the Company upon surrender of this
      Warrant, at any time or times on or after the date hereof, but not after
      11:59 P.M. Eastern Time on the Expiration Date (as defined herein)
      7,500,000 fully paid and nonassessable shares of Common Stock (as defined
      herein) of the Company (the “Warrant Shares”) at
      the exercise price per share provided in Section 1(b) below or as
      subsequently adjusted; provided, however, that in no event shall the holder
      be
      entitled to exercise this Warrant for a number of Warrant Shares in excess
      of
      that number of Warrant Shares which, upon giving effect to such exercise, would
      cause the aggregate number of shares of Common Stock beneficially owned by
      the
      holder and its affiliates to exceed 9.99% of the outstanding shares of the
      Common Stock following such exercise, except within sixty (60) days of the
      Expiration Date (however, such restriction may be waived by Holder (but only
      as
      to itself and not to any other holder) upon not less than 65 days prior notice
      to the Company).  For purposes of the foregoing proviso, the aggregate
      number of shares of Common Stock beneficially owned by the holder and its
      affiliates shall include the number of shares of Common Stock issuable upon
      exercise of this Warrant with respect to which the determination of such proviso
      is being made, but shall exclude shares of Common Stock which would be issuable
      upon (i) exercise of the remaining, unexercised Warrants beneficially owned
      by the holder and its affiliates and (ii) exercise or conversion of the
      unexercised or unconverted portion of any other securities of the Company
      beneficially owned by the holder and its affiliates (including, without
      limitation, any convertible notes or preferred stock) subject to a limitation
      on
      conversion or exercise analogous to the limitation contained
      herein.  Except as set forth in the preceding sentence, for purposes
      of this paragraph, beneficial ownership shall be calculated in accordance with
      Section 13(d) of the Securities Exchange Act of 1934, as amended.  For
      purposes of this Warrant, in determining the number of outstanding shares of
      Common Stock a holder may rely on the number of outstanding shares of Common
      Stock as reflected in (1) the Company’s most recent Form 10-QSB or Form 10-KSB,
      as the case may be, (2) a more recent public announcement by the Company or
      (3)
      any other notice by the Company or its transfer agent setting forth the number
      of shares of Common Stock outstanding.  Upon the written request of
      any holder, the Company shall promptly, but in no event later than one (1)
      Business Day following the receipt of such notice, confirm in writing to any
      such holder the number of shares of Common Stock then outstanding.  In
      any case, the number of outstanding shares of Common Stock shall be determined
      after giving effect to the exercise of Warrants (as defined below) by such
      holder and its affiliates since the date as of which such number of outstanding
      shares of Common Stock was reported.

     

    Section
      1. 

     

    (a) This
      Warrant is issued pursuant to the Securities Purchase Agreement (“Securities Purchase
      Agreement”) dated the date hereof between the Company and the Buyers
      listed on Schedule I thereto or issued in exchange or substitution thereafter
      or
      replacement thereof.  Each Capitalized term used, and not otherwise
      defined herein, shall have the meaning ascribed thereto in the Securities
      Purchase Agreement.

     

    (b) Definitions.  The
      following words and terms as used in this Warrant shall have the following
      meanings:

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (i) “Approved
      Stock Plan”
means a stock option plan that has been approved by the Board of Directors
      of
      the Company.

     

    (ii)  “Business
      Day” means
      any day other than Saturday, Sunday or other day on which commercial banks
      in
      the City of New York are authorized or required by law to remain
      closed.

     

    (iii) “Closing
      Bid Price”
means the closing bid price of Common Stock as quoted on the Principal
      Market
      (as reported by Bloomberg Financial Markets (“Bloomberg”) through
      its “Volume at Price” function).

     

    (iv) “Common
      Stock” means
      (i) the Company’s common stock, par value $0.001 per share, and
      (ii) any capital stock into which such Common Stock shall have been changed
      or any capital stock resulting from a reclassification of such Common
      Stock.

     

    (v) “Convertible
      Debentures” means the Convertible Debentures issued in pursuant to the
      Securities Purchase Agreement.

     

    (vi) “Excluded
      Securities”
means, (a) shares issued or deemed to have been issued by the Company
      pursuant
      to an Approved Stock Plan, (b) shares of Common Stock issued or deemed to be
      issued by the Company upon the conversion, exchange or exercise of any right,
      option, obligation or security outstanding on the date prior to date of the
      Securities Purchase Agreement, provided that the terms of such right, option,
      obligation or security are not amended or otherwise modified on or after the
      date of the Securities Purchase Agreement, and provided that the conversion
      price, exchange price, exercise price or other purchase price is not reduced,
      adjusted or otherwise modified and the number of shares of Common Stock issued
      or issuable is not increased (whether by operation of, or in accordance with,
      the relevant governing documents or otherwise) on or after the date of the
      Securities Purchase Agreement,  and (c) the shares of Common
      Stock issued or deemed to be issued by the Company upon conversion of the
      Convertible Debentures or exercise of the Warrants.

     

    (vii) “Expiration
      Date”
means December 31, 2012.

     

    (viii) “Issuance
      Date” means
      the date hereof.

     

    (ix) “Options”
means
      any
      rights, warrants or options to subscribe for or purchase Common Stock or
      Convertible Securities and which are not Excluded Securities.

     

    (x)  “Person”
means
      an
      individual, a limited liability company, a partnership, a joint venture, a
      corporation, a trust, an unincorporated organization and a government or any
      department or agency thereof.

     

    (xi) “Primary
      Market” means
      on any of (a) the American Stock Exchange, (b) New York Stock Exchange, (c)
      the
      Nasdaq Global Select Market, (d) the Nasdaq Global Market, (e) the Nasdaq
      Capital Market, or (e) the Over-the-Counter Bulletin Board (“OTCBB”)

     

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

     

    (xiii) “Warrant”
means
      this
      Warrant and all Warrants issued in exchange, transfer or replacement
      thereof.

     

    (xiv) “Warrant
      Exercise
      Price” shall be $0.25 or as subsequently adjusted as provided in
      Section 8 hereof.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (c) Other
      Definitional Provisions.

     

    (i) Except
      as
      otherwise specified herein, all references herein (A) to the Company shall
      be deemed to include the Company’s successors and (B) to any applicable law
      defined or referred to herein shall be deemed references to such applicable
      law
      as the same may have been or may be amended or supplemented from time to
      time.

     

    (ii) When
      used
      in this Warrant, the words “herein”, “hereof”,
      and “hereunder”
      and words of similar import,
      shall refer to this Warrant as a whole and not to any provision of this Warrant,
      and the words “Section”, “Schedule”,
      and “Exhibit” shall refer
      to Sections of, and Schedules and Exhibits to, this Warrant unless otherwise
      specified.

     

    (iii) Whenever
      the context so requires, the neuter gender includes the masculine or feminine,
      and the singular number includes the plural, and vice versa.

     

    Section
      2. Exercise
      of
      Warrant.

     

    (a) Subject
      to the terms and conditions hereof, this Warrant may be exercised by the holder
      hereof then registered on the books of the Company, pro rata as hereinafter
      provided, at any time on any Business Day on or after the opening of business
      on
      such Business Day, commencing with the first day after the date hereof, and
      prior to 11:59 P.M. Eastern Time on the Expiration Date (i) by delivery of
      a written notice, in the form of the subscription notice attached as Exhibit A hereto (the
      “Exercise
      Notice”), of such holder’s election to exercise this Warrant, which
      notice shall specify the number of Warrant Shares to be purchased, payment
      to the Company of an amount equal to the Warrant Exercise Price(s) applicable
      to
      the Warrant Shares being purchased, multiplied by the number of Warrant
      Shares (at the applicable Warrant Exercise Price) as to which this Warrant
      is being exercised (plus any applicable issue or transfer taxes) (the
“Aggregate Exercise
      Price”) in cash or wire transfer of immediately available funds and the
      surrender of this Warrant (or an indemnification undertaking with respect to
      this Warrant in the case of its loss, theft or destruction) to a common carrier
      for overnight delivery to the Company as soon as practicable following such
      date
      (“Cash Basis”)
      or (ii) if at the time of exercise, the Warrant Shares are not subject to an
      effective registration statement by delivering an Exercise Notice and in lieu
      of
      making payment of the Aggregate Exercise Price in cash or wire transfer, elect
      instead to receive upon such exercise the “Net Number” of shares of Common Stock
      determined according to the following formula (the “Cashless
      Exercise”):

     

    Net
      Number = (A x B) – (A
      x C)

                                          B

    


    For
      purposes of the foregoing
      formula:

    


    A
      = the
      total number of Warrant Shares with respect to which this Warrant is then being
      exercised.

    


    B
      = the
      Closing Bid Price of the Common Stock on the date of exercise of the
      Warrant.

    


    C
      = the
      Warrant Exercise Price then in effect for the applicable Warrant Shares at
      the
      time of such exercise.

    


    In
      the
      event of any exercise of the rights represented by this Warrant in compliance
      with this Section 2, the Company shall on or before the fifth (5th)
      Business Day following the date of receipt of the Exercise Notice, the Aggregate
      Exercise Price and this Warrant (or an indemnification undertaking with respect
      to this Warrant in the case of its loss, theft or destruction) and the receipt
      of the representations of the holder specified in Section 6 hereof, if requested
      by the Company (the “Exercise Delivery
      Documents”), and if the Common Stock is DTC eligible, credit such
      aggregate number of shares of Common Stock to which the holder shall be entitled
      to the holder’s or its designee’s balance account with The Depository Trust
      Company; provided, however, if the holder who submitted the Exercise Notice
      requested physical delivery of any or all of the Warrant Shares, or, if the
      Common Stock is not DTC eligible  then the Company shall, on or before
      the fifth (5th)
      Business Day following receipt of the Exercise Delivery Documents, issue and
      surrender to a common carrier for overnight delivery to the address specified
      in
      the Exercise Notice, a certificate, registered in the name of the holder, for
      the number of shares of Common Stock to which the holder shall be entitled
      pursuant to such request.  Upon delivery of the Exercise Notice and
      Aggregate Exercise Price referred to in clause (i) or (ii) above the holder
      of this Warrant shall be deemed for all corporate purposes to have become the
      holder of record of the Warrant Shares with respect to which this Warrant has
      been exercised.  In the case of a dispute as to the determination of
      the Warrant Exercise Price, the Closing Bid Price or the arithmetic calculation
      of the Warrant Shares, the Company shall promptly issue to the holder the number
      of Warrant Shares that is not disputed and shall submit the disputed
      determinations or arithmetic calculations to the holder via facsimile within
      one
      (1) Business Day of receipt of the holder’s Exercise Notice.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (b) If
      the
      holder and the Company are unable to agree upon the determination of the Warrant
      Exercise Price or arithmetic calculation of the Warrant Shares within one (1)
      day of such disputed determination or arithmetic calculation being submitted
      to
      the holder, then the Company shall immediately submit via facsimile (i) the
      disputed determination of the Warrant Exercise Price or the Closing Bid Price
      to
      an independent, reputable investment banking firm or (ii) the disputed
      arithmetic calculation of the Warrant Shares to its independent, outside
      accountant.  The Company shall cause the investment banking firm or
      the accountant, as the case may be, to perform the determinations or
      calculations and notify the Company and the holder of the results no later
      than
      forty-eight (48) hours from the time it receives the disputed determinations
      or
      calculations.  Such investment banking firm’s or accountant’s
      determination or calculation, as the case may be, shall be deemed conclusive
      absent manifest error.

     

    (c) Unless
      the rights represented by this Warrant shall have expired or shall have been
      fully exercised, the Company shall, as soon as practicable and in no event
      later
      than five (5) Business Days after any exercise and at its own expense, issue
      a
      new Warrant identical in all respects to this Warrant exercised except it shall
      represent rights to purchase the number of Warrant Shares purchasable
      immediately prior to such exercise under this Warrant exercised, less the number
      of Warrant Shares with respect to which such Warrant is exercised.

     

    (d) No
      fractional Warrant Shares are to be issued upon any pro rata exercise of this
      Warrant, but rather the number of Warrant Shares issued upon such exercise
      of
      this Warrant shall be rounded up or down to the nearest whole
      number.

     

    (e) If
      the
      Company or its Transfer Agent shall fail for any reason or for no reason to
      issue to the holder within ten (10) days of receipt of the Exercise
      Delivery Documents, a certificate for the number of Warrant Shares to which
      the
      holder is entitled or to credit the holder’s balance account with The Depository
      Trust Company for such number of Warrant Shares to which the holder is entitled
      upon the holder’s exercise of this Warrant, the Company shall, in addition to
      any other remedies under this Warrant or otherwise available to such holder,
      pay
      as additional damages in cash to such holder on each day the issuance of such
      certificate for Warrant Shares is not timely effected an amount equal to 0.025%
      of the product of (A) the sum of the number of Warrant Shares not issued to
      the
      holder on a timely basis and to which the holder is entitled, and (B) the
      Closing Bid Price of the Common Stock for the trading day immediately preceding
      the last possible date which the Company could have issued such Common Stock
      to
      the holder without violating this Section 2.

     

    (f) If
      within
      ten (10) days after the Company’s receipt of the Exercise Delivery Documents,
      the Company fails to deliver a new Warrant to the holder for the number of
      Warrant Shares to which such holder is entitled pursuant to Section 2 hereof,
      then, in addition to any other available remedies under this Warrant, or
      otherwise available to such holder, the Company shall pay as additional damages
      in cash to such holder on each day after such tenth (10th)
      day
      that such delivery of such new Warrant is not timely effected in an amount
      equal
      to 0.25% of the product of (A) the number of Warrant Shares represented by
      the portion of this Warrant which is not being exercised and (B) the
      Closing Bid Price of the Common Stock for the trading day immediately preceding
      the last possible date which the Company could have issued such Warrant to
      the
      holder without violating this Section 2.

     

    Section
      3. Covenants
      as to Common
      Stock.  The Company hereby covenants and agrees as
      follows:

     

    (a) This
      Warrant is, and any Warrants issued in substitution for or replacement of this
      Warrant will upon issuance be, duly authorized and validly issued.

     

    (b) All
      Warrant Shares which may be issued upon the exercise of the rights represented
      by this Warrant will, upon issuance, be validly issued, fully paid and
      nonassessable and free from all taxes, liens and charges with respect to the
      issue thereof.

     

    (c) During
      the period within which the rights represented by this Warrant may be exercised,
      the Company will at all times have authorized and reserved at least one hundred
      percent (100%) of the number of shares of Common Stock needed to provide for
      the
      exercise of the rights then represented by this Warrant and the par value of
      said shares will at all times be less than or equal to the applicable Warrant
      Exercise Price.  If at any time the Company does not have a sufficient
      number of shares of Common Stock authorized and available, then the Company
      shall call and hold a special meeting of its stockholders within sixty (60)
      days of that time for the sole purpose of increasing the number of authorized
      shares of Common Stock.

     

    (d) If
      at any
      time after the date hereof the Company shall file a registration statement,
      the
      Company shall include the Warrant Shares issuable to the holder, pursuant to
      the
      terms of this Warrant and shall maintain, so long as any other shares of Common
      Stock shall be so listed, such listing of all Warrant Shares from time to time
      issuable upon the exercise of this Warrant; and the Company shall so list on
      each national securities exchange or automated quotation system, as the case
      may
      be, and shall maintain such listing of, any other shares of capital stock of
      the
      Company issuable upon the exercise of this Warrant if and so long as any shares
      of the same class shall be listed on such national securities exchange or
      automated quotation system.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (e) The
      Company will not, by amendment of its Articles of Incorporation or through
      any
      reorganization, transfer of assets, consolidation, merger, dissolution, issue
      or
      sale of securities, or any other voluntary action, avoid or seek to avoid the
      observance or performance of any of the terms to be observed or performed by
      it
      hereunder, but will at all times in good faith assist in the carrying out of
      all
      the provisions of this Warrant and in the taking of all such action as may
      reasonably be requested by the holder of this Warrant in order to protect the
      exercise privilege of the holder of this Warrant against dilution or other
      impairment, consistent with the tenor and purpose of this
      Warrant.  The Company will not increase the par value of any shares of
      Common Stock receivable upon the exercise of this Warrant above the Warrant
      Exercise Price then in effect, and (ii) will take all such actions as may
      be necessary or appropriate in order that the Company may validly and legally
      issue fully paid and nonassessable shares of Common Stock upon the exercise
      of
      this Warrant.

     

    (f) This
      Warrant will be binding upon any entity succeeding to the Company by merger,
      consolidation or acquisition of all or substantially all of the Company’s
      assets.

     

    Section
      4. Taxes.  The
      Company shall pay any and all taxes, except any applicable withholding, which
      may be payable with respect to the issuance and delivery of Warrant Shares
      upon
      exercise of this Warrant.

     

    Section
      5. Warrant
      Holder Not Deemed a
      Stockholder.  Except as otherwise specifically provided herein,
      no holder, as such, of this Warrant shall be entitled to vote or receive
      dividends or be deemed the holder of shares of capital stock of the Company
      for
      any purpose, nor shall anything contained in this Warrant be construed to confer
      upon the holder hereof, as such, any of the rights of a stockholder of the
      Company or any right to vote, give or withhold consent to any corporate action
      (whether any reorganization, issue of stock, reclassification of stock,
      consolidation, merger, conveyance or otherwise), receive notice of meetings,
      receive dividends or subscription rights, or otherwise, prior to the issuance
      to
      the holder of this Warrant of the Warrant Shares which he or she is then
      entitled to receive upon the due exercise of this Warrant.  In
      addition, nothing contained in this Warrant shall be construed as imposing
      any
      liabilities on such holder to purchase any securities (upon exercise of this
      Warrant or otherwise) or as a stockholder of the Company, whether such
      liabilities are asserted by the Company or by creditors of the
      Company.  Notwithstanding this Section 5, the Company will provide the
      holder of this Warrant with copies of the same notices and other information
      given to the stockholders of the Company generally, contemporaneously with
      the
      giving thereof to the stockholders.

     

    Section
      6. Representations
      of
      Holder.  The holder of this Warrant, by the acceptance hereof,
      represents that it is acquiring this Warrant and the Warrant Shares for its
      own
      account for investment only and not with a view towards, or for resale in
      connection with, the public sale or distribution of this Warrant or the Warrant
      Shares, except pursuant to sales registered or exempted under the Securities
      Act; provided, however, that by making the representations herein, the holder
      does not agree to hold this Warrant or any of the Warrant Shares for any minimum
      or other specific term and reserves the right to dispose of this Warrant and
      the
      Warrant Shares at any time in accordance with or pursuant to a registration
      statement or an exemption under the Securities Act.  The holder of
      this Warrant further represents, by acceptance hereof, that, as of this date,
      such holder is an “accredited investor” as such term is defined in
      Rule 501(a)(1) of Regulation D promulgated by the Securities and Exchange
      Commission under the Securities Act (an “Accredited
      Investor”).  Upon exercise of this Warrant  the
      holder shall, if requested by the Company, confirm in writing, in a form
      satisfactory to the Company, that the Warrant Shares so purchased are being
      acquired solely for the holder’s own account and not as a nominee for any other
      party, for investment, and not with a view toward distribution or resale and
      that such holder is an Accredited Investor.  If such holder cannot
      make such representations because they would be factually incorrect, it shall
      be
      a condition to such holder’s exercise of this Warrant that the Company receive
      such other representations as the Company considers reasonably necessary to
      assure the Company that the issuance of its securities upon exercise of this
      Warrant shall not violate any United States or state securities
      laws.

     

    Section
      7. Ownership
      and
      Transfer.

     

    (a) The
      Company shall maintain at its principal executive offices (or such other office
      or agency of the Company as it may designate by notice to the holder hereof),
      a
      register for this Warrant, in which the Company shall record the name and
      address of the person in whose name this Warrant has been issued, as well as
      the
      name and address of each transferee.  The Company may treat the person
      in whose name any Warrant is registered on the register as the owner and holder
      thereof for all purposes, notwithstanding any notice to the contrary, but in
      all
      events recognizing any transfers made in accordance with the terms of this
      Warrant.

     

    Section
      8. Adjustment
      of Warrant
      Exercise Price and Number of Shares.  The Warrant Exercise
      Price and the number of shares of Common Stock issuable upon exercise of this
      Warrant shall be adjusted from time to time as follows:

     

    (a) Adjustment
      of Warrant
      Exercise Price and Number of Shares upon Issuance of Common
      Stock.  If and whenever on or after the Issuance Date of this
      Warrant, the Company issues or sells, or is deemed to have issued or sold,
      any
      shares of Common Stock (other than Excluded Securities) for a consideration
      per share less than a price (the “Applicable Price”)
      equal to the Warrant Exercise Price in effect immediately prior to such issuance
      or sale, then immediately after such issue or sale the Warrant Exercise Price
      then in effect shall be reduced to an amount equal to such consideration per
      share.  Upon each such adjustment of the Warrant Exercise Price
      hereunder, the number of Warrant Shares issuable upon exercise of this Warrant
      shall be adjusted to the number of shares determined by multiplying the Warrant
      Exercise Price in effect immediately prior to such adjustment by the number
      of
      Warrant Shares issuable upon exercise of this Warrant immediately prior to
      such
      adjustment and dividing the product thereof by the Warrant Exercise Price
      resulting from such adjustment.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (b) Effect
      on Warrant Exercise
      Price of Certain Events.  For purposes of determining the
      adjusted Warrant Exercise Price under Section 8(a) above, the following shall
      be
      applicable:

     

    (i) Issuance
      of
      Options.  If after the date hereof, the Company in any manner
      grants any Options and the lowest price per share for which one share of Common
      Stock is issuable upon the exercise of any such Option or upon conversion or
      exchange of any convertible securities issuable upon exercise of any such Option
      is less than the Applicable Price, then such share of Common Stock shall be
      deemed to be outstanding and to have been issued and sold by the Company at
      the
      time of the granting or sale of such Option for such price per
      share.  For purposes of this Section 8(b)(i), the lowest price per
      share for which one share of Common Stock is issuable upon exercise of such
      Options or upon conversion or exchange of such Convertible Securities shall
      be
      equal to the sum of the lowest amounts of consideration (if any) received or
      receivable by the Company with respect to any one share of Common Stock upon
      the
      granting or sale of the Option, upon exercise of the Option or upon conversion
      or exchange of any convertible security issuable upon exercise of such
      Option.  No further adjustment of the Warrant Exercise Price shall be
      made upon the actual issuance of such Common Stock or of such convertible
      securities upon the exercise of such Options or upon the actual issuance of
      such
      Common Stock upon conversion or exchange of such convertible
      securities.

     

    (ii) Issuance
      of Convertible
      Securities.  If the Company in any manner issues or sells any
      convertible securities which are not Excluded Securities and the lowest price
      per share for which one share of Common Stock is issuable upon the conversion
      or
      exchange thereof is less than the Applicable Price, then such share of Common
      Stock shall be deemed to be outstanding and to have been issued and sold by
      the
      Company at the time of the issuance or sale of such convertible securities
      for
      such price per share.  For the purposes of this Section 8(b)(ii),
      the lowest price per share for which one share of Common Stock is issuable
      upon
      such conversion or exchange shall be equal to the sum of the lowest amounts
      of
      consideration (if any) received or receivable by the Company with respect to
      one
      share of Common Stock upon the issuance or sale of the convertible security
      and
      upon conversion or exchange of such convertible security.  No further
      adjustment of the Warrant Exercise Price shall be made upon the actual issuance
      of such Common Stock upon conversion or exchange of such convertible securities,
      and if any such issue or sale of such convertible securities is made upon
      exercise of any Options for which adjustment of the Warrant Exercise Price
      had
      been or are to be made pursuant to other provisions of this Section 8(b), no
      further adjustment of the Warrant Exercise Price shall be made by reason of
      such
      issue or sale.

     

    (iii) Change
      in Option Price or
      Rate of Conversion.  If the purchase price provided for in any
      Options, the additional consideration, if any, payable upon the issue,
      conversion or exchange of any convertible securities, or the rate at which
      any
      convertible securities are convertible into or exchangeable for Common Stock
      changes at any time, the Warrant Exercise Price in effect at the time of such
      change shall be adjusted to the Warrant Exercise Price which would have been
      in
      effect at such time had such Options or convertible securities provided for
      such
      changed purchase price, additional consideration or changed conversion rate,
      as
      the case may be, at the time initially granted, issued or sold and the number
      of
      Warrant Shares issuable upon exercise of this Warrant shall be correspondingly
      readjusted.  For purposes of this Section 8(b)(iii), if the terms of
      any Option or convertible security that was outstanding as of the Issuance
      Date
      of this Warrant are changed in the manner described in the immediately preceding
      sentence, then such Option or convertible security and the Common Stock deemed
      issuable upon exercise, conversion or exchange thereof shall be deemed to have
      been issued as of the date of such change.  No adjustment pursuant to
      this Section 8(b) shall be made if such adjustment would result in an
      increase of the Warrant Exercise Price then in effect.

     

    (iv) Calculation
      of Consideration
      Received.  If any Common Stock, Options or convertible
      securities which are not Excluded Securities are issued or sold or deemed to
      have been issued or sold for cash, the consideration received therefore will
      be
      deemed to be the net amount received by the Company therefore.  If any
      Common Stock, Options or convertible securities which are not Excluded
      Securities are issued or sold for a consideration other than cash, the amount
      of
      such consideration received by the Company will be the fair value of such
      consideration, except where such consideration consists of marketable
      securities, in which case the amount of consideration received by the Company
      will be the market price of such securities on the date of receipt of such
      securities.  If any Common Stock, Options or convertible securities
      which are not Excluded Securities are issued to the owners of the non-surviving
      entity in connection with any merger in which the Company is the surviving
      entity, the amount of consideration therefore will be deemed to be the fair
      value of such portion of the net assets and business of the non-surviving entity
      as is attributable to such Common Stock, Options or convertible securities,
      as
      the case may be.  The fair value of any consideration other than cash
      or securities will be determined jointly by the Company and the holders of
      Warrants representing at least two-thirds (b) of the Warrant Shares issuable
      upon exercise of the Warrants then outstanding.  If such parties are
      unable to reach agreement within ten (10) days after the occurrence of an
      event requiring valuation (the “Valuation Event”),
      the fair value of such consideration will be determined within five (5) Business
      Days after the tenth (10th)
      day
      following the Valuation Event by an independent, reputable appraiser jointly
      selected by the Company and the holders of Warrants representing at least
      two-thirds (b) of the Warrant Shares issuable upon exercise of the Warrants
      then
      outstanding.  The determination of such appraiser shall be final and
      binding upon all parties and the fees and expenses of such appraiser shall
      be
      borne jointly by the Company and the holders of Warrants.

     

    (v) Integrated
      Transactions.  In case any Option is issued in connection with
      the issue or sale of other securities of the Company, together comprising one
      integrated transaction in which no specific consideration is allocated to such
      Options by the parties thereto, the Options will be deemed to have been issued
      for a consideration of $.01.

     

    (vi) Treasury
      Shares.  The number of shares of Common Stock outstanding at
      any given time does not include shares owned or held by or for the account
      of
      the Company, and the disposition of any shares so owned or held will be
      considered an issue or sale of Common Stock.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (vii) Record
      Date.  If the Company takes a record of the holders of Common
      Stock for the purpose of entitling them (1) to receive a dividend or other
      distribution payable in Common Stock, Options or in convertible securities
      or
      (2) to subscribe for or purchase Common Stock, Options or convertible
      securities, then such record date will be deemed to be the date of the issue
      or
      sale of the shares of Common Stock deemed to have been issued or sold upon
      the
      declaration of such dividend or the making of such other distribution or the
      date of the granting of such right of subscription or purchase, as the case
      may
      be.

     

    (c) Adjustment
      of Warrant
      Exercise Price upon Subdivision or Combination of Common
      Stock.  If the Company at any time after the date of issuance
      of this Warrant subdivides (by any stock split, stock dividend, recapitalization
      or otherwise) one or more classes of its outstanding shares of Common Stock
      into
      a greater number of shares, any Warrant Exercise Price in effect immediately
      prior to such subdivision will be proportionately reduced and the number of
      shares of Common Stock obtainable upon exercise of this Warrant will be
      proportionately increased.  If the Company at any time after the date
      of issuance of this Warrant combines (by combination, reverse stock split or
      otherwise) one or more classes of its outstanding shares of Common Stock into
      a
      smaller number of shares, any Warrant Exercise Price in effect immediately
      prior
      to such combination will be proportionately increased and the number of Warrant
      Shares issuable upon exercise of this Warrant will be proportionately
      decreased.  Any adjustment under this Section 8(c) shall become
      effective at the close of business on the date the subdivision or combination
      becomes effective.

     

    (d) Distribution
      of
      Assets.  If the Company shall declare or make any dividend or
      other distribution of its assets (or rights to acquire its assets) to holders
      of
      Common Stock, by way of return of capital or otherwise (including, without
      limitation, any distribution of cash, stock or other securities, property or
      options by way of a dividend, spin off, reclassification, corporate
      rearrangement or other similar transaction) (a “Distribution”), at
      any time after the issuance of this Warrant, then, in each such
      case:

     

    (i) any
      Warrant Exercise Price in effect immediately prior to the close of business
      on
      the record date fixed for the determination of holders of Common Stock
      entitled to receive
      the
      Distribution shall be reduced, effective as of the close of business on such
      record date, to a price determined by multiplying such Warrant Exercise Price
      by
      a fraction of which (A) the numerator shall be the Closing Sale Price of the
      Common Stock on the trading day immediately preceding such record date minus
      the
      value of the Distribution (as determined in good faith by the Company’s Board of
      Directors) applicable to one share of Common Stock, and (B) the denominator
      shall be the Closing Sale Price of the Common Stock on the trading day
      immediately preceding such record date; and

     

    (ii) either
      (A) the number of Warrant Shares obtainable upon exercise of this Warrant shall
      be increased to a number of shares equal to the number of shares of Common
      Stock
      obtainable immediately prior to the close of business on the record date fixed
      for the determination of holders of Common Stock entitled to receive the
      Distribution multiplied by the reciprocal of the fraction set forth in the
      immediately preceding clause (i), or (B) in the event that the Distribution
      is
      of common stock of a company whose common stock is traded on a national
      securities exchange or a national automated quotation system, then the holder
      of
      this Warrant shall receive an additional warrant to purchase Common Stock,
      the
      terms of which shall be identical to those of this Warrant, except that such
      warrant shall be exercisable into the amount of the assets that would have
      been
      payable to the holder of this Warrant pursuant to the Distribution had the
      holder exercised this Warrant immediately prior to such record date and with
      an
      exercise price equal to the amount by which the exercise price of this Warrant
      was decreased with respect to the Distribution pursuant to the terms of the
      immediately preceding clause (i).

     

    (e) Certain
      Events.  If any event occurs of the type contemplated by the
      provisions of this Section 8 but not expressly provided for by such
      provisions (including, without limitation, the granting of stock appreciation
      rights, phantom stock rights or other rights with equity features), then the
      Company’s Board of Directors will make an appropriate adjustment in the Warrant
      Exercise Price and the number of shares of Common Stock obtainable upon exercise
      of this Warrant so as to protect the rights of the holders of the Warrants;
      provided, except as set forth in section 8(c),that no such adjustment pursuant
      to this Section 8(e) will increase the Warrant Exercise Price or decrease the
      number of shares of Common Stock obtainable as otherwise determined pursuant
      to
      this Section 8.

     

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

     

    (g) Adjustment
      Upon Fundamental
      Transaction. If, at any time while this Warrant is outstanding, (A) the
      Company effects any merger or consolidation of the Company with or into another
      Person where the Company is not the surviving entity, (B) the Company effects
      any sale of all or substantially all of its assets in one or a series of related
      transactions, (C) any tender offer or exchange offer (whether by the Company
      or
      another Person) is completed pursuant to which holders of Common Stock are
      permitted to tender or exchange their shares for other securities, cash or
      property, or (D) the Company effects any reclassification of the Common Stock
      or
      any compulsory share exchange pursuant to which the Common Stock is effectively
      converted into or exchanged for other securities, cash or property (in any
      such
      case, a “Fundamental Transaction”), then upon any subsequent exercises of this
      Warrant, the Holder shall have the right to receive, for each Warrant Share
      that
      would have been issuable upon such exercise absent such Fundamental Transaction,
      the same kind and amount of securities, cash or property as it would have been
      entitled to receive upon the occurrence of such Fundamental Transaction if
      it
      had been, immediately prior to such Fundamental Transaction, the holder of
      one
      share of Common Stock (the “Alternate Consideration”).  For purposes
      of any such exercise, the determination of the Warrant Exercise Price shall
      be
      appropriately adjusted to apply to such Alternate Consideration based on the
      amount of Alternate Consideration issuable in respect of one share of Common
      Stock in such Fundamental Transaction, and the Company shall apportion the
      Warrant Exercise Price among the Alternate Consideration in a reasonable manner
      reflecting the relative value of any different components of the Alternate
      Consideration.  If holders of Common Stock are given any choice as to
      the securities, cash or property to be received in a Fundamental Transaction,
      then the Holder shall be given the same choice as to the Alternate Consideration
      it receives upon any conversion of this Warrant following such Fundamental
      Transaction. To the extent necessary to effectuate the foregoing provisions,
      any
      successor to the Company or surviving entity in such Fundamental Transaction
      shall assume the obligations under this Warrant.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (h) Adjustment
      Upon Fundamental
      Transaction.  In the event that the Holder requires the Company
      to redeem the Convertible Debentures pursuant to a Fundamental Change (as set
      forth in Section 5(g) of the Convertible Debenture) than the Warrant Exercise
      Price shall be adjusted (if applicable) in accordance with the terms of Section
      5(g) of the Convertible Debentures.

     

    (i) Notices.

     

    (i) Immediately
      upon any adjustment of the Warrant Exercise Price, the Company will give written
      notice thereof to the holder of this Warrant, setting forth in reasonable
      detail, and certifying, the calculation of such adjustment.

     

    Section
      9. Purchase
      Rights;
      Reorganization, Reclassification, Consolidation, Merger or
      Sale.

     

    (a) In
      addition to any adjustments pursuant to Section 8 above, if at any time the
      Company grants, issues or sells any Options, Convertible Securities or rights
      to
      purchase stock, warrants, securities or other property pro rata to the record
      holders of any class of Common Stock (the “Purchase Rights”),
      then the holder of this Warrant will be entitled to acquire, upon the terms
      applicable to such Purchase Rights, the aggregate Purchase Rights which such
      holder could have acquired if such holder had held the number of shares of
      Common Stock acquirable upon complete exercise of this Warrant immediately
      before the date on which a record is taken for the grant, issuance or sale
      of
      such Purchase Rights, or, if no such record is taken, the date as of which
      the
      record holders of Common Stock are to be determined for the grant, issue or
      sale
      of such Purchase Rights.

     

    (b) Any
      recapitalization, reorganization, reclassification, consolidation, merger,
      sale
      of all or substantially all of the Company’s assets to another Person or other
      transaction in each case which is effected in such a way that holders of Common
      Stock are entitled to receive (either directly or upon subsequent liquidation)
      stock, securities or assets with respect to or in exchange for Common Stock
      is
      referred to herein as an “Organic
      Change.”  Prior to the consummation of any (i) sale of all or
      substantially all of the Company’s assets to an acquiring Person or (ii) other
      Organic Change following which the Company is not a surviving entity, the
      Company will secure from the Person purchasing such assets or the successor
      resulting from such Organic Change (in each case, the “Acquiring Entity”) a
      written agreement (in form and substance satisfactory to the holders of Warrants
      representing at least two-thirds (iii) of the Warrant Shares issuable upon
      exercise of the Warrants then outstanding) to deliver to each holder of Warrants
      in exchange for such Warrants, a security of the Acquiring Entity evidenced
      by a
      written instrument substantially similar in form and substance to this Warrant
      and satisfactory to the holders of the Warrants (including an adjusted warrant
      exercise price equal to the value for the Common Stock reflected by the terms
      of
      such consolidation, merger or sale, and exercisable for a corresponding number
      of shares of Common Stock acquirable and receivable upon exercise of the
      Warrants without regard to any limitations on exercise, if the value so
      reflected is less than any Applicable Warrant Exercise Price immediately prior
      to such consolidation, merger or sale).  Prior to the consummation of
      any other Organic Change, the Company shall make appropriate provision (in
      form
      and substance satisfactory to the holders of Warrants representing a
      majority of the
      Warrant Shares issuable upon exercise of the Warrants then outstanding) to
      insure that each of the holders of the Warrants will thereafter have the right
      to acquire and receive in lieu of or in addition to (as the case may be) the
      Warrant Shares immediately theretofore issuable and receivable upon the exercise
      of such holder’s Warrants (without regard to any limitations on exercise),
      such shares of stock, securities or assets that would have been issued or
      payable in such Organic Change with respect to or in exchange for the number
      of
      Warrant Shares which would have been issuable and receivable upon the exercise
      of such holder’s Warrant as of the date of such Organic Change (without taking
      into account any limitations or restrictions on the exercisability of this
      Warrant).

     

    Section
      10. Lost,
      Stolen, Mutilated or
      Destroyed Warrant.  If this Warrant is lost, stolen, mutilated
      or destroyed, the Company shall promptly, on receipt of an indemnification
      undertaking (or, in the case of a mutilated Warrant, the Warrant), issue a
      new
      Warrant of like denomination and tenor as this Warrant so lost, stolen,
      mutilated or destroyed.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Section
      11. Notice.  Any
      notices, consents, waivers or other communications required or permitted to
      be
      given under the terms of this Warrant must be in writing and will be deemed
      to
      have been delivered:  (i) upon receipt, when delivered
      personally; (ii) upon receipt, when sent by facsimile (provided
      confirmation of receipt is received by the sending party transmission is
      mechanically or electronically generated and kept on file by the sending party);
      or (iii) one Business Day after deposit with a nationally recognized
      overnight delivery service, in each case properly addressed to the party to
      receive the same.  The addresses and facsimile numbers for such
      communications shall be:

     

    
      	
              If
                to Holder:

            	
              YA
                Global Investments, L.P.

            
	 	
              101
                Hudson Street – Suite 3700

            
	 	
              Jersey
                City, NJ  07302

            
	 	
              Attention:                         Mark
                A. Angelo

            
	 	
              Telephone:                        (201)
                985-8300

            
	 	
              Facsimile:                           (201)
                985-8266

            
	 	 
	
              With
                Copy to:

            	
              Troy
                Rillo, Esq.

            
	 	
              101
                Hudson Street – Suite 3700

            
	 	
              Jersey
                City, NJ 07302

            
	 	
              Telephone:                         (201)
                985-8300

            
	 	
              Facsimile:                            (201)
                985-8266

            
	 	 
	 	 
	
              If
                to the Company, to:

            	
              IR
                Biosciences Holdings, Inc.

            
	 	
              8767
                E. Via De Ventura, Suite 190

            
	 	
              Scottsdale,
                AZ 85258

            
	 	
              Attention:  Chief
                Executive Officer

            
	 	
              Telephone:                          (480)
                922-4781

            
	 	
              Facsimile:                             (602)
                684-2677

            
	 	 
	
              With
                a copy to:

            	
              Kirkpatrick
                & Lockhart Preston Gates Ellis, LLP

            
	 	
              10100
                Santa Monica Blvd., 7th
                Floor

            
	 	
              Los
                Angeles, CA 90067

            
	 	
              Attention:                            Thomas
                J. Poletti

            
	 	
              Telephone:                           (310)
                552-5045

            
	 	
              Facsimile:                              (310)
                552-5001

            


    

    


    If
      to a
      holder of this Warrant, to it at the address and facsimile number set forth
      in
      this Section 11, or at such other address and facsimile as shall be delivered
      to
      the Company upon the issuance or transfer of this Warrant.  Each party
      shall provide five days’ prior written notice to the other party of any change
      in address or facsimile number.  Written confirmation of receipt
      (A) given by the recipient of such notice, consent, facsimile, waiver or
      other communication, (or (B) provided by a nationally recognized overnight
      delivery service shall be rebuttable evidence of personal service, receipt
      by
      facsimile or receipt from a nationally recognized overnight delivery service
      in
      accordance with clause (i), (ii) or (iii) above, respectively.

     

    Section
      12. Date.  The
      date of this Warrant is set forth on page 1 hereof.  This Warrant,
      in all events, shall be wholly void and of no effect after the close of
      business on the Expiration Date, except that notwithstanding any other
      provisions hereof, the provisions of Section 8(b) shall continue in full
      force and effect after such date as to any Warrant Shares or other securities
      issued upon the exercise of this Warrant.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Section
      13. Amendment
      and
      Waiver.  Except as otherwise provided herein, the provisions of
      the Warrants may be amended and the Company may take any action herein
      prohibited, or omit to perform any act herein required to be performed by it,
      only if the Company has obtained the written consent of the holders of Warrants
      representing at least two-thirds of the Warrant Shares issuable upon exercise
      of
      the Warrants then outstanding; provided that, except for Section 8(d), no such
      action may increase the Warrant Exercise Price or decrease the number of shares
      or class of stock obtainable upon exercise of any Warrant without the written
      consent of the holder of such Warrant.

     

    Section
      14. Descriptive
      Headings;
      Governing Law.  The descriptive headings of the several
      sections and paragraphs of this Warrant are inserted for convenience only and
      do
      not constitute a part of this Warrant.  The corporate laws of the
      State of Delaware shall govern all issues concerning the relative rights of
      the
      Company and its stockholders.  All other questions concerning the
      construction, validity, enforcement and interpretation of this Agreement shall
      be governed by the internal laws of the State of New Jersey, without giving
      effect to any choice of law or conflict of law provision or rule (whether of
      the
      State of New Jersey or any other jurisdictions) that would cause the application
      of the laws of any jurisdictions other than the State of New
      Jersey.  Each party hereby irrevocably submits to the exclusive
      jurisdiction of the state and federal courts sitting in Hudson County and the
      United States District Court for the District of New Jersey, for the
      adjudication of any dispute hereunder or in connection herewith or therewith,
      or
      with any transaction contemplated hereby or discussed herein, and hereby
      irrevocably waives, and agrees not to assert in any suit, action or proceeding,
      any claim that it is not personally subject to the jurisdiction of any such
      court, that such suit, action or proceeding is brought in an inconvenient forum
      or that the venue of such suit, action or proceeding is
      improper.  Each party hereby irrevocably waives personal service of
      process and consents to process being served in any such suit, action or
      proceeding by mailing a copy thereof to such party at the address for such
      notices to it under this Agreement and agrees that such service shall constitute
      good and sufficient service of process and notice thereof.  Nothing
      contained herein shall be deemed to limit in any way any right to serve process
      in any manner permitted by law.

     

    Section
      15. Waiver
      of Jury
      Trial.  AS A
      MATERIAL INDUCEMENT FOR EACH PARTY HERETO TO ENTER INTO THIS WARRANT, THE
      PARTIES HERETO HEREBY WAIVE ANY RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
      RELATED IN ANY WAY TO THIS WARRANT AND/OR ANY AND ALL OF THE OTHER DOCUMENTS
      ASSOCIATED WITH THIS TRANSACTION.

     

    


    REMAINDER
      OF PAGE INTENTIONALLY LEFT BLANK

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF, the
      Company has caused this Warrant to be signed as of the date first set forth
      above.

     

    
      	 	
              IR
                BIOSCIENCES HOLDINGS, INC.

            
	 	 
	 	
               

            
	 	By:    
              /s/ Michael
              Wilhelm                                    
              
	 	
              Name:     
                Michael Wilhelm  

            
	 	
              Title:       
                President and Chief Executive
                Officer

            


    

     

    
 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
      A TO
      WARRANT

     

     

    EXERCISE
      NOTICE

     

     

    TO
      BE EXECUTED

     

     

    BY
      THE REGISTERED HOLDER TO EXERCISE THIS WARRANT

     

     

    IR
      BIOSCIENCES HOLDINGS, INC.

     

    The
      undersigned holder hereby exercises the right to purchase ______________ of
      the
      shares of Common Stock (“Warrant Shares”) of
      IR Biosciences Holdings, Inc. (the “Company”), evidenced
      by the attached Warrant (the “Warrant”).  Capitalized
      terms used herein and not otherwise defined shall have the respective meanings
      set forth in the Warrant.

     

    Specify
      Method of exercise by check mark:

     

    1.
      ___                      
Cash Exercise

     

    (a)
Payment
      of Warrant Exercise
      Price. The holder shall pay the Aggregate Exercise Price of
      $______________ to the Company in accordance with the terms of the
      Warrant.

     

    (b)
Delivery
      of Warrant
      Shares.  The Company shall deliver to the holder _________
Warrant
      Shares in accordance with the terms of the Warrant.

     

    


     

    2.
      ___                      
Cashless Exercise

     

    (a)
Payment
      of Warrant Exercise
      Price.  In lieu of making payment of the Aggregate Exercise
      Price, the holder elects to receive upon such exercise the Net Number of shares
      of Common Stock determined in accordance with the terms of the
      Warrant.

     

    (b)
Delivery
      of Warrant
      Shares.  The Company shall deliver to the holder _________
Warrant
      Shares in accordance with the terms of the Warrant.

     

    


    Date:
      _______________ __, ______

    


    Name
      of
      Registered Holder

    


    By:                                                      
      

    Name:                                                                
      

    Title:                                                                
      

    


     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    EXHIBIT
      B TO
      WARRANT

     

     

    FORM
      OF WARRANT
      POWER

     

    FOR
      VALUE RECEIVED, the
      undersigned does hereby assign and transfer to ________________, Federal
      Identification No. __________, a warrant to purchase ____________ shares of
      the capital stock of IR Biosciences Holdings, Inc. represented by warrant
      certificate no. _____, standing in the name of the undersigned on the books
      of said corporation.  The undersigned does hereby irrevocably
      constitute and appoint ______________, attorney to transfer the warrants of
      said
      corporation, with full power of substitution in the premises.

     

    
      	
              Dated:

            	 
	 	 
	 	
              By:                                                                
                

            
	 	
              Name:

            
	 	
              Title: