Document:

Exhibit
4.9

    

    Warrant
No. [______________]

     

    VENTRUS
BIOSCIENCES, INC.

    COMMON
STOCK WARRANT

     

    THIS
WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE “ACT”), OR
UNDER THE SECURITIES LAWS OF ANY STATE.  THIS WARRANT IS SUBJECT TO
RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD
EXCEPT AS PERMITTED UNDER THE ACT AND THE APPLICABLE STATE SECURITIES LAWS,
PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM.  THE ISSUER OF THIS
WARRANT MAY REQUIRE AN OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO
THE ISSUER TO THE EFFECT THAT ANY PROPOSED TRANSFER OR RESALE IS IN COMPLIANCE
WITH THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS.

     

    This
certifies that [_____________] (the “Holder”), its
designees or permitted assigns, at any time or from time to time up to and
including 5:00 p.m. (Eastern Time) on February 26, 2015 (the “Expiration Date”), is
entitled to purchase from Ventrus Biosciences, Inc., a Delaware corporation (the
“Company”),
that number of fully-paid and nonassessable shares (the “Warrant Shares”) of
the Company’s Common Stock, $0.001 par value per share (the “Common Stock”), equal
to (x) the number of Units purchased by Holder pursuant to the Company’s
Confidential Offering Memorandum dated April __, 2010, as the same may be
amended or supplemented from time to time (the “Memorandum”) multiplied by (y)
the quotient obtained by dividing (i) $12,500 by  (ii) the price at
which securities of the Company are sold in a Qualified IPO (the “IPO Price”).  To exercise this
warrant (the “Warrant”), the Holder must surrender to the Company at its
principal office (or at such other location as the Company may advise the Holder
in writing) this Warrant properly endorsed with the Form of Subscription
attached hereto duly completed and signed and with payment of the aggregate
Exercise Price (as defined below) for the number of Warrant Shares for which
this Warrant is being exercised determined in accordance with the provisions
hereof.  The per share exercise price (the “Exercise Price”) per
Warrant Share issuable pursuant to this Common Stock Warrant shall be equal to
110% of the IPO Price, payable in accordance with Section 1(b) hereof.
Notwithstanding the foregoing, if a Qualified IPO does not occur on or before
February 26, 2012, then, at the sole option of the Holder, (x) this Common Stock
Warrant will be exercisable for that number of Warrant Shares equal to fifty
percent (50%) of the principal amount of the Note purchased by the Holder
pursuant to the Memorandum divided by $1.00 and (y) the Exercise Price shall be
$1.00. The Exercise Price is subject to adjustment as provided in Section 3 of
this Warrant.  Notwithstanding the foregoing, the Company shall have
the right to redeem this Warrant as described in Section 4 hereof.  If
no Qualified IPO has occurred by February 26, 2012 and should the Holder elect
to adjust the Per Share Warrant Price to $1.00 herein, he may do so at any time
relating to any unexercised portion of this Warrant by providing written notice
to the Company of such election.  All capitalized terms not defined
herein shall have the meaning assigned to such terms in that certain Convertible
Promissory Note dated April __, 2010 issued by the Company to the Holder (the
“Note”).

     

    The
Company shall notify the Holder in writing at least five (5) days prior to the
closing of a Qualified IPO, Reverse Merger or Sale of the Company and upon
request of the Holder, upon return to the Company of this Warrant, or lost
warrant affidavit in form and substance reasonably acceptable to the Company in
the event this Warrant shall be lost or destroyed, the Company shall provide
Holder with a new Warrant setting forth the number of Warrant Shares underlying
this Warrant and the Exercise Price thereof.  Notices hereunder shall
be sent by the same means and notices sent pursuant to Section 4(b)
hereof.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    This
Warrant is issued subject to the following terms and conditions:

     

    1.           Exercise, Issuance of
Certificates.  Subject to Section 4 hereof, the Holder may
exercise this Warrant at any time or from time to time after the earlier to
occur of a Qualified IPO or the second anniversary of the Initial Closing, and
on or prior to the Expiration Date for all or any part of the Warrant Shares
(but not for a fraction of a share) that may be purchased hereunder, as that
number may be adjusted pursuant to Section 3 of this Warrant.  The
Company agrees that the Warrant Shares purchased under this Warrant shall be and
are deemed to be issued to the Holder hereof as the record owner of such Warrant
Shares as of the close of business on the date on which this Warrant shall have
been surrendered, properly endorsed, the completed and executed Form of
Subscription delivered, and payment made for such Warrant Shares (such date, a
“Date of
Exercise”).  Certificates for the Warrant Shares so purchased,
together with any other securities or property to which the Holder hereof is
entitled upon such exercise, shall be delivered to the Holder hereof by the
Company at the Company’s expense as soon as practicable after the rights
represented by this Warrant have been so exercised, but in any event not later
than ten (10) business days following the Date of Exercise.  In case
of a purchase of less than all the Warrant Shares which may be purchased under
this Warrant, the Company shall cancel this Warrant and execute and deliver to
the Holder hereof within a reasonable time a new Warrant or Warrants of like
tenor for the balance of the Warrant Shares purchasable under the Warrant
surrendered upon such purchase.  Each stock certificate so delivered
shall be registered in the name of such Holder and issued with a legend in
substantially the form of the legend placed on the front of this
Warrant.

     

    (a)           The
Company’s obligations to issue and deliver Warrant Shares in accordance with the
terms hereof are absolute and unconditional, irrespective of any action or
inaction by the Holder to enforce the same.  Nothing herein shall
limit a Holder’s right to pursue any other remedies available to it hereunder,
at law or in equity including, without limitation, a decree of specific
performance and/or injunctive relief with respect to the Company’s failure to
timely deliver certificates representing shares of Common Stock upon exercise of
the Warrant  as required pursuant to the terms hereof.

     

    (b)           The
Holder shall pay the Exercise Price by delivering immediately available funds to
the Company.

     

    2.           Shares to be Fully Paid;
Reservation of Shares.  The Company covenants and agrees that
all Warrant Shares will, upon issuance and payment of the applicable Exercise
Price, be duly authorized, validly issued, fully paid and nonassessable, and
free of all preemptive rights, liens and encumbrances, except for restrictions
on transfer provided for herein.  The Company shall at all times
reserve and keep available out of its authorized and unissued Common Stock,
solely for the purpose of providing for the exercise of the rights to purchase
all Warrant Shares granted pursuant to this Warrant, such number of shares of
Common Stock as shall, from time to time, be sufficient therefor.

     

    3.           Adjustment of Exercise Price
and Number of Shares.  The Exercise Price and the total number
of Warrant Shares shall be subject to adjustment from time to time upon the
occurrence of certain events described in this Section 3.

     

    (a)           Subdivision or Combination
of Stock.  In the event the outstanding shares of the Company’s
Common Stock shall be increased by a stock dividend payable in Common Stock,
stock split, subdivision, or other similar transaction occurring after the date
hereof into a greater number of shares of Common Stock, the Exercise Price in
effect immediately prior to such subdivision shall be proportionately reduced
and the number of Warrant Shares issuable hereunder proportionately
increased.  Conversely, in the event the outstanding shares of the
Company’s Common Stock shall be decreased by reverse stock split, combination,
consolidation, or other similar transaction occurring after the date hereof into
a lesser number of shares of Common Stock, the Exercise Price in effect
immediately prior to such combination shall be proportionately increased and the
number of Warrant Shares issuable hereunder proportionately
decreased.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (b)           Reclassification.  If
any reclassification of the capital stock of the Company or any reorganization,
consolidation, merger, or any sale, lease, license, exchange or other transfer
(in one transaction or a series of related transactions) of all or substantially
all, of the business and/or assets of the Company (the “Reclassification
Events”) shall be effected in such a way that holders of Common Stock
shall be entitled to receive stock, securities, or other assets or property,
then, as a condition of such Reclassification Event, lawful and adequate
provisions shall be made whereby the Holder hereof shall thereafter have the
right to purchase and receive (in lieu of the shares of Common Stock of the
Company immediately theretofore purchasable and receivable upon the exercise of
the rights represented hereby) such shares of stock, securities, or other assets
or property as may be issued or payable with respect to or in exchange for a
number of outstanding shares of such Common Stock equal to the number of shares
of such stock immediately theretofore purchasable and receivable upon the
exercise of the rights represented hereby.  In any Reclassification
Event, appropriate provision shall be made with respect to the rights and
interests of the Holder of this Warrant to the end that the provisions hereof
(including, without limitation, provisions for adjustments of the Exercise Price
and of the number of Warrant Shares), shall thereafter be applicable, as nearly
as may be, in relation to any shares of stock, securities, or assets thereafter
deliverable upon the exercise hereof.

     

    (c)           Notice of
Adjustment.  Upon any adjustment of the Exercise Price or any
increase or decrease in the number of Warrant Shares, the Company shall give
written notice thereof, by first class mail postage prepaid, addressed to the
registered Holder of this Warrant at the address of such Holder as shown on the
books of the Company.  The notice shall be prepared and signed by the
Company’s Chief Financial Officer and shall state the Exercise Price resulting
from such adjustment and the increase or decrease, if any, in the number of
shares purchasable at such price upon the exercise of this Warrant, setting
forth in reasonable detail the method of calculation and the facts upon which
such calculation is based.

    

    4.           Redemption of
Warrants.

     

    (a)           Redemption.  This
Warrant may be redeemed at the option of the Company, at any time after the date
the Common Stock is traded on the Over-the-Counter Bulletin Board (the “OTCBB”), Small Cap
Market System or on a national securities exchange, following a period of thirty
(30) consecutive calendar days in which the per share average closing sale price
of the Common Stock equals or exceeds an amount that is twice the Exercise Price, on
notice as set forth in Section 4(b) hereof, and at a redemption price equal to
$0.001 (the “Redemption Price”)
for each Warrant Share purchasable under this Warrant; provided, however, that this
Warrant may not be redeemed by the Company unless the resale of the Warrant
Shares purchasable hereunder has been registered under the Securities Act of
1933, as amended (the “Act”) or are
otherwise freely tradable.  For purposes of this Section, the closing
sale price of the Common Stock shall be determined by the closing price as
reported by the OTCBB so long as the Common Stock is quoted on the OTCBB, and if
the Common Stock is hereafter listed or quoted on the SmallCap Market Systems or
a national securities exchange, shall be determined by the last reported sale
price on the primary exchange or market on which the Common Stock is
traded.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (b)           Notice of
Redemption.  In the case of any redemption of this Warrant, the
Company shall give notice of such redemption to the Holder hereof as provided in
this Section 4(b).  Notice of redemption to the Holder of this Warrant
shall be given in person, by recognized overnight courier, mailed by certified
or registered mail, return receipt requested, or by confirmed facsimile
transmission, to the Holder’s last address and/or facsimile of record with the
Company not less than thirty (30) days prior to the date fixed for
redemption.  Any notice which is given in the manner herein provided
shall be conclusively presumed to have been duly given, whether or not the
Holder receives the notice.  Each such notice shall specify the date
fixed for redemption, the place of redemption and the aggregate Redemption
Price, and shall state that payment of the Redemption Price will be made upon
surrender of this Warrant at such place of redemption, and that if not exercised
by the close of business on the date fixed for redemption, the exercise rights
of the Warrant shall expire unless extended by the Company.  Such
notice shall also state the current Exercise Price and the date on which the
right to exercise the Warrant will expire unless extended by the
Company.

     

    (c)           Payment of Redemption
Price.  If notice of redemption shall have been given as
provided in Section 4(b), the Redemption Price shall, unless the Warrant is
theretofore exercised pursuant to the terms hereof, become due and payable on
the date and at the place stated in such notice.  On and after such
date of redemption, the exercise rights of this Warrant shall expire and this
Warrant shall be null and void on presentation and surrender of this Warrant at
such place of payment in such notice specified, this Warrant shall be paid and
redeemed at the Redemption Price per Warrant Share within ten (10) days
thereafter.

     

    5.           No Voting or Dividend
Rights.  Nothing contained in this Warrant shall be construed
as conferring upon the holder hereof the right to vote or to consent to receive
notice as a stockholder of the Company on any other matters or any rights
whatsoever as a shareholder of the Company.  No dividends or interest
shall be payable or accrued in respect of this Warrant or the interest
represented hereby or the shares purchasable hereunder until, and only to the
extent that, this Warrant shall have been exercised.

     

    6.           Compliance with Securities
Act. The Holder of this Warrant, by acceptance hereof, agrees that this
Warrant is being acquired for its own account and not for any other person or
persons, for investment purposes and that it will not offer, sell, or otherwise
dispose of this Warrant except under circumstances which will not result in a
violation of the Act or any applicable state securities laws.

     

    7.           Limited
Transferability.  The Holder represents that by accepting this
Warrant it understands that this Warrant and any securities obtainable upon
exercise of this Warrant have not been registered for sale under Federal or
state securities laws and are being offered and sold to the Holder pursuant to
one or more exemptions from the registration requirements of such securities
laws.  In the absence of an effective registration of such securities
or an exemption therefrom, any certificates for such securities shall bear the
legend set forth on the first page hereof.  The Holder understands
that it must bear the economic risk of its investment in this Warrant and any
securities obtainable upon exercise of this Warrant for an indefinite period of
time, as this Warrant and such securities have not been registered under Federal
or state securities laws and therefore cannot be sold unless subsequently
registered under such laws, unless an exemption from such registration is
available.

     

    8.           Amendment, Waiver,
etc.  Except as expressly provided herein, neither this Warrant
nor any term hereof may be amended, waived, discharged or terminated other than
by a written instrument signed by the party against whom enforcement of any such
amendment, waiver, discharge or termination is sought; provided, however, that
any provisions hereof may be amended, waived, discharged or terminated upon the
written consent of the Company and the Super Majority of the
Holders.  For purposes hereof, “Super Majority of the
Holders” shall mean Holders of more than sixty-six and two-thirds percent (662⁄3%)
of the Warrant Shares then issuable upon exercise of then outstanding
warrants of like tenor to this Warrant issued by the Company in connection with
the issuance of Notes (as defined in the Note).

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    9.           Notices.  Any
notice, request, or other document required or permitted to be given or
delivered to the Holder hereof or the Company shall be delivered as set forth in
the Purchase Agreement.

     

    10.         Governing
Law.  This Warrant shall be construed and enforced in
accordance with, and the rights of the parties shall be governed by, the laws of
the State of Delaware.

     

    11.         Lost or Stolen
Warrant.  Upon receipt of evidence reasonably satisfactory to
the Company of the loss, theft, destruction, or mutilation of this Warrant and,
in the case of any such loss, theft or destruction, upon receipt of an indemnity
reasonably satisfactory to the Company, or in the case of any such mutilation,
upon surrender and cancellation of such Warrant, the Company, at its expense,
will make and deliver a new Warrant, of like tenor, in lieu of the lost, stolen,
destroyed or mutilated Warrant.

     

    12.         Fractional
Shares.  No fractional shares shall be issued upon exercise of
this Warrant.  The Company shall, in lieu of issuing any fractional
share, pay the Holder entitled to such fraction a sum in cash equal to such
fraction (calculated to the nearest 1/100th of a share) multiplied by the then
effective Exercise Price on the date the Form of Subscription is received by the
Company.

     

    13.         Successors and
Assigns.  This Warrant and the rights evidenced hereby shall
inure to the benefit of and be binding upon the successors of the Company and
the successors and assigns of the Holder.  The provisions of this
Warrant are intended to be for the benefit of all Holders from time to time of
this Warrant, and shall be enforceable by any such Holder.

     

    14.         Severability of
Provisions. In case any one or more of the provisions of this Warrant
shall be invalid or unenforceable in any respect, the validity and
enforceability of the remaining terms and provisions of this Warrant shall not
in any way be affected or impaired thereby and the parties will attempt in good
faith to agree upon a valid and enforceable provision which shall be a
commercially reasonable substitute therefor, and upon so agreeing, shall
incorporate such substitute provision in this Warrant.

     

    [Signature
Page Follows]

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    Exhibit
4.9

    

    Warrant
No. [______________]

     

    IN
WITNESS WHEREOF, the Company has caused this Warrant to be duly executed as of
this ___ day of April, 2010.

    

    
      
        
          	 
      	
                  Ventrus
      Biosciences, Inc.

                
	 
      	 
      
	 
      	
                  By:  

                	 
      
	 
      	 
      
	 
      	
                  Name:

                
	 
      	 
      
	 
      	
                  Title:

                

        

      

    

    

    Signature
Page—Common Stock Warrant

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    FORM
OF SUBSCRIPTION

     

    (To be
signed only upon exercise of Warrant)

     

    To:         Ventrus
Biosciences, Inc.

     

    The
undersigned, the holder of the attached Common Stock Warrant, hereby elects to
exercise the purchase right represented by such Warrant for, and to purchase
thereunder,                                    
shares of Common Stock of Ventrus Biosciences, Inc. and such holder herewith
makes payment of $_________ therefor.

     

    The
undersigned requests that certificates for such shares be issued in the name of,
and delivered to: ____________
_____________________________________________________________________________________
whose
address is:
____________________________________________________________.

     

    DATED:
_________________________

    

    
      
        
          
            
              	 
      	 
      
	 
      	
                      (Signature
      must conform in all respects to name of Holder as specified on the face of
      the Warrant)

                    
	 
      	 
      
	 
      	
                      Name: 

                    	 
      
	 
      	 
      	 
      
	 
      	
                      Title:Exhibit
4.10    

    

    THIS
WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF HAVE BEEN ACQUIRED FOR
INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE “ACT”), OR ANY STATE SECURITIES LAW.  THIS WARRANT AND
SUCH SECURITIES MAY NOT BE OFFERED, SOLD OR OTHERWISE PLEDGED, TRANSFERRED OR
HYPOTHECATED IN THE ABSENCE OF SUCH REGISTRATION OR DELIVERY OF AN OPINION OF
COUNSEL IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO THE COMPANY THAT SUCH
OFFER, SALE OR TRANSFER, PLEDGE OR HYPOTHECATION IS IN COMPLIANCE WITH THE ACT
OR UNLESS SOLD IN FULL COMPLIANCE WITH RULE 144 UNDER THE ACT.

    

    VENTRUS BIOSCIENCES,
INC.

    

    Warrant
for the Purchase of Shares of

    Common
Stock

     

    
      
        	
                No. [_]

              	
                [______] Shares

              

      

    

    

                          FOR
VALUE RECEIVED, VENTRUS BIOSCIENCES, INC., a Delaware corporation (the “Company”), hereby certifies
that Paramount BioCapital, Inc. (“Paramount”) or its permitted
assigns is entitled to purchase from the Company, after determination of the Per
Share Warrant Price (as defined below), up to and including 5:00 p.m. (Eastern
Time) on the date that is the seventh (7th) anniversary of [_____],
2007 (to be referred to herein as the “Initial Closing Date” and the
period following the Initial Closing Date up to and including the seven year
anniversary of the Initial Closing Date to be referred to herein as the “Exercise Period”) that number
of shares of Common Stock (as defined below), at the Per Share Warrant Price,
equal to [_________] (which amount is equal to ten percent (10%) of the
aggregate principal amount of the Bridge Notes sold in the Offering) divided by
the Lowest Price Paid (as defined below).  Notwithstanding the
foregoing, if a Qualified Financing (as defined below) does not occur on or
before the second anniversary of the Initial Closing Date, then this Warrant
will be exercisable for that number of shares of Common Stock equal to ten
percent (10%) of the aggregate principal amount of the Bridge Notes sold in the
Offering divided by $1.00.  The “Per Share Warrant Price”
shall, subject to adjustment as set forth herein, be equal to one hundred ten
percent (110%) of the Lowest Price Paid, provided, that, if a
Qualified Financing does not occur on or before the second anniversary of the
Initial Closing Date, then, the Per Share Warrant Price shall, subject to
adjustment as set forth herein, equal $1.00.

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    For purposes of this Warrant, (i)
common stock, $0.001 par value per share, of the Company, is referred to as
“Common Stock”; (ii) the
shares of the Common Stock (subject to adjustment as set forth herein)
purchasable hereunder are referred to as the “Warrant Shares”; (iii) the
aggregate purchase price payable for the Warrant Shares purchasable hereunder is
referred to as the “Aggregate
Warrant Price”; (iv) “Qualified Financing” means the
closing of an equity financing or series of related equity financings by the
Company resulting in aggregate gross cash proceeds (before commissions or other
expenses) to the Company of at least $10,000,000; (v) “Lowest Price Paid” means the
lowest price paid per unit of securities issued to investors in a Qualified
Financing; (vi) this “Warrant” means this agreement
evidencing the Holder’s right to purchase Warrant Shares; (vii) the holder of
this Warrant is referred to as the “Holder”; and (viii) the then
Current Market Price per share of the Common Stock (the “Current Market Price”) shall
be deemed to be the last reported sale price of the Common Stock on the Trading
Day (as defined below) immediately prior to a particular date or, in case no
such reported sales take place on such date, the average of the last reported
bid and asked prices of the Common Stock on such date, in either case on the
principal national securities exchange on which the Common Stock is admitted to
trading or listed, or if not listed or admitted to trading on any such exchange,
the per share sale price for the Common Stock in the over-the-counter market as
reported by the National Quotation Bureau or similar organization, or if not so
available, the fair market value of the Common Stock as determined in good faith
by the Company’s Board of Directors.  A “Trading Day” shall mean any
day on which shares of the Company’s Common Stock are listed or quoted for
trading as reported by Bloomberg L.P.

    

    This
Warrant was originally issued pursuant to a Placement Agency Agreement dated
October 9, 2007 (the “Placement
Agency Agreement”) between the Company and the
Holder in connection with the Offering.
“Bridge Notes” means the
convertible promissory notes sold by the Company pursuant to the transactions
contemplated by the Placement Agency Agreement.

    

    1.           Exercise of
Warrant.

     

    (a)  This
Warrant may be exercised in whole at any time, or in part from time to time, by
the Holder during the Exercise Period:

     

    (i)          by
the surrender of this Warrant (with the subscription form at the end hereof duly
executed) at the address set forth in subsection 9(a) hereof, together with
proper payment of the Aggregate Warrant Price, or the proportionate part thereof
if this Warrant is exercised in part, with payment for the Warrant Shares made
by certified or official bank check payable to the order of, or wire transfer of
immediately available funds to, the Company; or

     

    (ii)         by
the surrender of this Warrant (with the cashless exercise form at the end hereof
duly executed) (a “Cashless
Exercise”) at the address set forth in subsection 9(a)
hereof.  Such presentation and surrender shall be deemed a waiver of
the Holder’s obligation to pay the Aggregate Warrant Price, or the proportionate
part thereof if this Warrant is exercised in part.  In the event of a
Cashless Exercise, the Holder shall exchange its Warrant for a number of Warrant
Shares equal to that number of Warrant Shares equal to the quotient obtained by
dividing [(A-B) (X)] by (A), where:

     

    
      
        	
              	
                (A) = 

              	
                the
      then Current Market Price;

              

      

    

    

    
      
        	
              	
                (B) = 

              	
                the
      Per Share Warrant Price;

              

      

    

    

    
      
        	
              	
                (X) = 

              	
                the
      number of Warrant Shares issuable upon exercise of this Warrant in
      accordance with the terms of this Warrant by means of a cash exercise
      rather than a cashless
exercise.

              

      

    

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    

    (b)  If
this Warrant is exercised in part, this Warrant must be exercised for a number
of whole shares of the Common Stock and the Holder is entitled to receive a new
Warrant covering the Warrant Shares that have not been
exercised.  Upon surrender of this Warrant in connection with the
exercise of this Warrant pursuant to the terms hereof, the Company will (i)
issue a certificate or certificates in the name of the Holder for the largest
number of whole shares of Warrant Shares to which the Holder shall be entitled
upon such exercise and, if this Warrant is exercised in whole, in lieu of any
fractional share of the Common Stock to which the Holder shall be entitled, pay
to the Holder cash in an amount equal to the fair value of such fractional share
(determined in such reasonable manner as the Board of Directors of the Company
shall determine), and (ii) deliver the other securities and properties
receivable upon the exercise of this Warrant, or the proportionate part thereof,
if this Warrant is exercised in part, pursuant to the provisions of this
Warrant.

     

    
      	
              2. 

            	
              Reservation of Warrant
      Shares; Listing.

            

    

     

    The
Company agrees that, prior to the expiration of this Warrant, the Company shall
at all times (a) have authorized and in reserve, and shall keep available,
solely for issuance and delivery upon the exercise of this Warrant, the shares
of the Common Stock and other securities and properties as from time to time
shall be receivable upon the exercise of this Warrant, free and clear of all
restrictions on sale or transfer, other than under Federal or state securities
laws, and free and clear of all preemptive rights and rights of first refusal
and (b) if the Company hereafter lists its Common Stock on any national
securities exchange, use its commercially reasonable efforts to keep the Warrant
Shares authorized for listing on such exchange upon notice of
issuance.  If the Company does not complete a Qualified Financing
prior to the second anniversary of the Initial Closing Date, then the Company
will promptly provide the Holder with written notice of the adjustment of the
Per Share Warrant Price to $1.00.

    

    
      	
              3.

            	
              Certain
      Adjustments.

            

    

     

    (a) If,
at any time or from time to time after the date of this Warrant, the Company
shall issue or distribute to all holders of shares of Common Stock by reason of
their ownership thereof, evidence of its indebtedness, any other securities of
the Company or any cash, property or other assets (excluding a subdivision,
combination or reclassification, or dividend or distribution payable in shares
of Common Stock, referred to in subsection 3(b) (any such non-excluded event
being herein called a “Special
Dividend”)), the Per Share Warrant Price shall be adjusted (effective
immediately prior to such issuance or distribution but after the record date for
such issuance or distribution) by multiplying the Per Share Warrant Price then
in effect by a fraction, the numerator of which shall be the Current Market
Price in effect on the record date for such issuance or distribution less the
fair market value (as determined in good faith by the Company’s Board of
Directors) of the evidence of indebtedness, cash, securities or property, or
other assets issued or distributed in such Special Dividend applicable to one
share of Common Stock and the denominator of which shall be the Current Market
Price in effect on the record date for such issuance or
distribution.  An adjustment made pursuant to this subsection 3(a)
shall become effective immediately prior to the payment date but after the
record date of any such Special Dividend. If such dividend, distribution,
subdivision or combination is not consummated in full, the Per Share Warrant
Price and Warrant Shares shall be readjusted accordingly.

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    (b) In
case the Company shall hereafter (i) pay a dividend or make a distribution on
its Common Stock in shares of Common Stock, (ii) subdivide its outstanding
shares of Common Stock into a greater number of shares, (iii) combine or
reverse-split its outstanding shares of Common Stock into a smaller number of
shares or (iv) issue by reclassification of its Common Stock any shares of
capital stock of the Company, then the Per Share Warrant Price and the number of
Warrant Shares shall forthwith be proportionately decreased and increased,
respectively, in the case of a subdivision, distribution or stock dividend, or
proportionately increased and decreased, respectively, in the case of a
combination or reverse stock split.  Adjustments made pursuant to this
subsection 3(b) shall become effective on the record date in the case of a
dividend or distribution, and shall become effective immediately after the
effective date in the case of a subdivision, combination or
reclassification.  If such dividend, distribution, subdivision or
combination is not consummated in full, the Per Share Warrant Price and Warrant
Shares shall be readjusted accordingly.

     

    (c) In
case of any capital reorganization or reclassification, or any consolidation or
merger to which the Company is a party other than a merger or consolidation in
which the Company is the surviving corporation, or in case of any sale or
conveyance to another entity of all or substantially all of the assets of the
Company, or in the case of any statutory exchange of securities with another
corporation (including any exchange effected in connection with a merger of a
third corporation into the Company but excluding any exchange of securities or
merger with another corporation in which the Company is a surviving corporation
and that does not result in any reclassification of or similar change in the
Common Stock), the Holder of this Warrant shall have the right thereafter to
receive on the exercise of this Warrant the kind and amount of securities, cash
or other property which the Holder would have owned or have been entitled to
receive immediately after such reorganization, reclassification, consolidation,
merger, statutory exchange, sale or conveyance had this Warrant been exercised
immediately prior to the effective date of such reorganization,
reclassification, consolidation, merger, statutory exchange, sale or conveyance
and in any such case, if necessary, appropriate adjustment shall be made in the
application of the provisions set forth in this Section 3 with respect to the
rights and interests thereafter of the Holder of this Warrant to the end that
the provisions set forth in this Section 3 shall thereafter correspondingly be
made applicable, as nearly as may reasonably be, in relation to any shares of
stock or other securities or property thereafter deliverable on the exercise of
this Warrant.  The above provisions of this subsection 3(c) shall
similarly apply to successive reorganizations, reclassifications,
consolidations, mergers, statutory exchanges, sales or
conveyances.  The Company shall require the issuer of any shares of
stock or other securities or property thereafter deliverable on the exercise of
this Warrant to be responsible for all of the agreements and obligations of the
Company hereunder.  Notice of any such reorganization,
reclassification, consolidation, merger, statutory exchange, sale or conveyance
and of said provisions so proposed to be made, shall be mailed to the Holder not
less than twenty (20) days prior to such event.  A sale of all or
substantially all of the assets of the Company for a consideration consisting
primarily of securities shall be deemed a consolidation or merger for the
foregoing purposes.

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    (d) No
adjustment in the Per Share Warrant Price shall be required unless such
adjustment would require an increase or decrease of at least  $0.01
per share of Warrant Shares; provided, however, that any
adjustments which by reason of this subsection 3(d) are not required to be made
shall be carried forward and taken into account in any subsequent adjustment;
provided, further, however,
that adjustments shall be required and made in accordance with the provisions of
this Section 3 (other than this subsection 3(d)) not later than such time as may
be required in order to preserve the tax-free nature of a distribution, if any,
to the Holder of this Warrant or Warrant Shares issuable upon the exercise
hereof.  All calculations under this Section 3 shall be made to the
nearest cent or to the nearest 1/100th of a share, as the case may
be.  Anything in this Section 3 to the contrary notwithstanding, the
Company shall be entitled to make such reductions in the Per Share Warrant
Price, in addition to those required by this Section 3, as it in its discretion
shall deem to be advisable in order that any stock dividend, subdivision of
shares or distribution of rights to purchase stock or securities convertible or
exchangeable for stock hereafter made by the Company to its stockholders shall
not be taxable.

     

    (e) Whenever
the Per Share Warrant Price is adjusted as provided in this Section 3 and upon
any modification of the rights of the Holder in accordance with this Section 3,
the Company shall promptly prepare a brief statement of the facts requiring such
adjustment or modification and the manner of computing the same and cause copies
of such certificate to be mailed to the Holder.  

     

    (f) If
the Board of Directors of the Company shall declare any dividend or other
distribution with respect to the Common Stock, the Company shall mail notice
thereof to the Holder not less than ten (10) days prior to the record date
fixed for determining stockholders entitled to participate in such dividend or
other distribution.

     

    (g) If,
as a result of an adjustment made pursuant to this Section 3, the Holder of any
Warrant thereafter surrendered for exercise shall become entitled to receive
shares of two or more classes of capital stock or shares of Common Stock and
other capital stock of the Company, the Board of Directors (whose determination
shall be conclusive and shall be described in a written notice to the Holder
promptly after such adjustment) shall determine,
in good faith, the allocation of the adjusted Per Share Warrant Price
between or among shares or such classes of capital stock or shares of Common
Stock and other capital stock.

     

    (h) In
case any event shall occur as to which the other provisions of this Section 3
are not strictly applicable but as to which the failure to make any adjustment
would not fairly protect the purchase rights represented by this Warrant in
accordance with the essential intent and principles of the adjustments set forth
in this Section 3 then, in each such case, the Board of Directors of the Company
shall in good faith determine the adjustment, if any, on a basis consistent with
the essential intent and principles established herein, necessary to preserve
the purchase rights represented by the Warrant. Upon such determination, the
Company will promptly mail a copy thereof to the Holder and shall make the
adjustments described therein.

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    (i) Notwithstanding
any other provision of this Warrant, upon a Sale of the Company prior to, but
not in connection with, a Qualified Financing, this Warrant shall be exercisable
for a number of shares of Common Stock equal to 10% of the aggregate principal
amount of the Bridge Notes divided by the Adjusted Sale Consideration Per Share
(as defined herein) from such Sale of the Company, and the Per Share Warrant
Price shall be equal to 110% of the Adjusted Sale Consideration Per
Share.  “Adjusted
Sale Consideration Per Share” shall mean (A) the Sale Proceeds (as
defined herein) minus an amount equal to 10% of the aggregate principal amount
of the Bridge Notes, divided by (B) the number of shares of Common Stock then
outstanding, on a fully diluted basis excluding the warrants issued pursuant to
the Placement Agency Agreement (the “Placement Warrants”) but
including any outstanding options and warrants with exercise prices equal to or
less than the Current Market Price.  For purposes hereof, “Sale of the Company” shall
mean a transaction (or series of related transactions) with one or more
non-affiliates of the Company, pursuant to which such party or parties acquire
(i) capital stock of the Company or the surviving entity possessing the voting
power to elect a majority of the board of directors of the Company or the
surviving entity (whether by merger, consolidation, sale or transfer of the
Company’s capital stock or otherwise) (a “Stock Acquisition”); or (ii)
all or substantially all of the Company’s assets determined on a consolidated
basis (an “Asset Sale”);
provided, however, that notwithstanding anything to the contrary contained
herein, to the extent any transaction (or series of related transactions)
qualifies as a Qualified Financing or a Reverse Merger, such transaction(s)
shall not be deemed to constitute a Sale of the Company.  For purposes
hereof, “Sale Proceeds”
shall mean (i) in the event of a Stock Acquisition, the cash or securities paid
by the acquirer to the Company or the selling stockholders to acquire such
shares; and (ii) in the event of an Asset Sale, the cash or securities legally
available for distribution to the Company’s stockholders, after creation of
adequate reserves for liabilities of the Company.  

     

    (j) Notwithstanding
any other provision of this Warrant, in the event that the Company consummates a
merger, share exchange, or other recapitalization transaction (or series of
related transactions), other than in connection with a Qualified Financing, in
which (i) the Company merges into or otherwise becomes a wholly-owned subsidiary
of a company subject to the public company reporting requirements of the
Securities Exchange Act of 1934, as amended, and (ii) the aggregate
consideration accorded to the Company in such transaction(s) (the “Reverse Merger Consideration”)
is greater than or equal to $10,000,000 (a “Reverse Merger”), this Warrant
shall be exercisable into that number of shares of Common Stock, with a Per
Share Warrant Price in each case determined in accordance with, and on the same
terms and conditions, as provided for in the event of a Qualified Financing,
provided that for purposes thereof, the Lowest Price Paid shall be deemed equal
to the quotient obtained by dividing (i) the Reverse Merger Consideration less
the unpaid principal and interest on the Bridge Notes by (ii) the number of
shares of Common Stock then outstanding, on a fully diluted basis excluding the
Placement Warrants but including all options and warrants outstanding
immediately prior to consummation of the Reverse Merger with exercise price
equal to or less than the Current Market Price.

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    
      	
              4. 

            	
              Fully Paid Stock;
      Taxes.

            

    

     

    The Warrant Shares represented by each
and every certificate for Warrant Shares delivered on the exercise of this
Warrant shall, subject to compliance by the Holder with the terms hereof, at the
time of such delivery, be duly authorized, validly issued and outstanding, fully
paid and nonassessable, and not subject to preemptive rights or rights of first
refusal imposed by any agreement to which the Company is a party, and the
Company will take all such actions as may be necessary to assure that the par
value, if any, per share of Warrant Shares is at all times equal to or less than
the then Per Share Warrant Price.  The Company shall pay, when due and
payable, any and all Federal and state stamp, original issue or similar taxes
which may be payable in respect of the issue of any Warrant Share or any
certificate thereof to the extent required because of the issuance by the
Company of such security.

    

    
      	
              5.

            	
              Registration Under the
      Act.

            

    

     

    (a) The
Holder shall have the right to participate in the registration rights granted to
purchasers in the Offering pursuant to Article V of those certain Note Purchase
Agreements by and between the Company and each such purchaser in the
Offering.

     

    (b) Until
all of the Warrant Shares and any shares of Common Stock issuable thereunder
have been sold under a Registration Statement or pursuant to Rule 144(k), so
long as the Company’s Common Stock remains registered under the Act, the Company
shall use its commercially reasonable efforts to file with the Securities and
Exchange Commission all current reports and the information as may be necessary
to enable the Holder to effect sales of its shares in reliance upon Rule 144(k)
promulgated under the Act.

     

    (c) The
Holder hereby agrees that in the case of an initial offering of the Common Stock
to the public pursuant to an effective registration statement under the
Securities Act (the “IPO”), the Holder will not,
without the prior written consent of the Company, offer, pledge, sell, contract
to sell, grant any option for the sale of, or otherwise dispose of, directly or
indirectly, any shares of Common Stock issuable upon the conversion or exercise
of this Warrant for a period of up to 180 days from the effective date of the
registration statement relating to the IPO and that the Holder will enter into
an agreement with the Company or managing underwriter of the IPO to that
effect.

    

    
      	
              6. 

            	
              Investment Intent;
      Limited Transferability.

            

    

     

    (a) By
accepting this Warrant, the Holder represents to the Company that
it  understands that this Warrant and any securities obtainable upon
exercise of this Warrant have not been registered for sale under Federal or
state securities laws and are being offered and sold to the Holder pursuant to
one or more exemptions from the registration requirements of such securities
laws.  In the absence of an effective registration of such securities
or an exemption therefrom, any certificates for such securities shall bear the
legend set forth on the first page hereof.  The Holder understands
that it must bear the economic risk of its investment in this Warrant and any
securities obtainable upon exercise of this Warrant for an indefinite period of
time, as this Warrant and such securities have not been registered under Federal
or state securities laws and therefore cannot be sold unless subsequently
registered under such laws, unless an exemption from such registration is
available.  The Holder further represents to the Company, by accepting
this Warrant, that it has full power and authority to accept this Warrant and
make the representations set forth herein.

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    (b) The
Holder, by its acceptance of this Warrant, represents to the Company that it is
an “accredited investor” with the meaning of Regulation D under the Act and is
acquiring this Warrant and will acquire any securities obtainable upon exercise
of this Warrant for its own account for investment and not with a view to, or
for sale in connection with, any distribution thereof in violation of the
Act.  The Holder agrees, by acceptance of this Warrant, that this
Warrant and any such securities issuable under
this Warrant will not be sold or otherwise transferred unless (i) a
registration statement with respect to such transfer is effective under the Act
and any applicable state securities laws or (ii) such sale or transfer is made
pursuant to one or more exemptions from the Act.

     

    (c) In
addition to the limitations set forth above and in accordance with the legend on
the first page hereof, this Warrant may not be sold, transferred, assigned or
hypothecated by the Holder except in compliance with the provisions of the Act
and the applicable state securities “blue sky” laws, and is so transferable only
upon the books of the Company which it shall cause to be maintained for such
purpose. The Company may treat the registered Holder of this Warrant as it
appears on the Company’s books at any time as the Holder for all
purposes.  The Company shall permit the Holder or its duly authorized
attorney, upon written request during ordinary business hours, to inspect and
copy or make extracts from its books showing the registered Holder of this
Warrant.  All warrants issued upon the transfer or assignment of this
Warrant will be dated the same date as this Warrant, and all rights of the
holder thereof shall be identical to those of the Holder unless, in each case,
otherwise prohibited by applicable law.

     

    (d) The
Holder has been afforded (i) the opportunity to ask such questions as it has
deemed necessary of, and to receive answers from, representatives of the Company
concerning the terms and conditions of this Warrant or the exercise of this
Warrant; and (ii) the opportunity to request such additional information which
the Company possesses or can acquire without unreasonable effort or
expense.

     

    (e) The
Holder did not (i) receive or review any advertisement, article, notice or other
communication published in a newspaper or magazine or similar media or broadcast
over television or radio, whether closed circuit, or generally available; or
(ii) attend any seminar, meeting or investor or other conference whose attendees
were, to such Holder’s knowledge, invited by any general solicitation or general
advertising.

     

    (f) Either
by reason of such Holder’s business or financial experience or the business or
financial experience of its professional advisors (who are unaffiliated with and
who are not compensated by the Company or any affiliate, finder or selling agent
of the Company, directly or indirectly), such Holder has the capacity to protect
such Holder’s interests in connection with the transactions contemplated by this
Warrant and the Placement Agency
Agreement.  The Holder, by its acceptance of this Warrant,
represents to the Company that it is able to fend for itself, can bear the
economic risk of its investment and has such knowledge and experience in
financial or business matters that it is capable of evaluating the merits and
risks of the investment in this Warrant.  Holder also represents it
has not been organized for the purpose of acquiring this
Warrant.

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    
      	
              7.

            	
              Loss, etc., of
      Warrant.

            

    

     

    Upon
receipt of evidence reasonably satisfactory to the Company of the loss, theft,
destruction or mutilation of this Warrant, and of indemnity reasonably
satisfactory to the Company, if lost, stolen or destroyed, and upon surrender
and cancellation of this Warrant, if mutilated, the Company shall execute and
deliver to the Holder a new Warrant of like date, tenor and
denomination.

    

    
      	
              8.

            	
              Warrant Holder Not
      Stockholder.

            

    

     

    This Warrant does not confer upon the
Holder any right to vote on or consent to or receive notice as a stockholder of
the Company, as such, in respect of any matters whatsoever, nor any other rights
or liabilities as a stockholder, prior to the exercise hereof; this Warrant
does, however, require certain notices to Holder as set forth
herein.

    

    
      	
              9.

            	
              Notice.

            

    

     

    No notice or other communication under
this Warrant shall be effective or deemed to have been given unless, the same is
in writing and is mailed by first-class mail, postage prepaid, or via recognized
overnight courier with confirmed receipt, addressed to:

    

    (a) the
Company at Ventrus Biosciences, Inc., 8400 E. Crescent Pkwy, Suite 600,
Greenwood Village, CO 80111, Attn: President, or other such address as the
Company has designated in writing to the Holder (with a copy to Wyrick Robbins
Yates & Ponton LLP, 4101 Lake Boone Trail, Suite 300, Raleigh, NC
27607-7506, facsimile: (919) 781-4865, Attn: W. David Mannheim, Esq.)
or

     

    (b) the
Holder at c/o Paramount BioCapital, Inc., 787 Seventh Avenue, 48th Floor,
New York, New York 10019, or other such address as the Holder has designated in
writing to the Company.

     

    
      	
              10.

            	
              Headings.

            

    

     

    The headings of this Warrant have been
inserted as a matter of convenience and shall not affect the construction
hereof.

    

    
      	
              11.

            	
              Applicable
      Law.

            

    

     

    This Warrant shall be governed by and
construed in accordance with the law of the State of New York without giving
effect to the principles of conflicts of law thereof.

    

    
      	
              12.

            	
              Amendment, Waiver,
      etc.

            

    

     

    Except as expressly provided herein,
neither this Warrant nor any term hereof may be amended, waived, discharged or
terminated other than by a written instrument signed by the party against whom
enforcement of any such amendment, waiver, discharge or termination is
sought.

    

    *  *  *  *  *

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

               IN WITNESS WHEREOF, the
Company has caused this Warrant to be signed by the undersigned duly authorized
officer, this ___ day of ______________, 200__.

    

    
      
        
          
            	 
      	
                    VENTRUS
      BIOSCIENCES, INC.

                  
	 
      	 
      	 
      
	 
      	
                    By:

                  	 
      
	 
      	 
      	
                    Thomas
      Rowland

                  
	 
      	 
      	
                    President
      and Chief Executive
Officer

                  

          

        

      

    

     

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    SUBSCRIPTION (cash)

    

                          The
undersigned, ___________________, pursuant to the provisions of the foregoing
Warrant, hereby agrees to subscribe for and purchase ____________________ shares
of the Common Stock, par value $0.001 per share, of Ventrus Biosciences, Inc.
covered by said Warrant, and makes payment therefor in full at the price per
share provided by said Warrant.

    

    
      	
              Dated:_______________

            	
              Signature:____________________

            
	 
      	 
      
	 
      	
              Address:______________________

            

    

    

    _________

    

    CASHLESS
EXERCISE

    

                          The
undersigned _____________, pursuant to the provisions of the foregoing Warrant,
hereby elects to exchange its Warrant for ___________________ shares of Common
Stock, par value $0.001 per share, of Ventrus Biosciences, Inc. pursuant to the
Cashless Exercise provisions of the Warrant.

    

    
      	
              Dated:_______________

            	
              Signature:____________________

            
	 
      	 
      
	 
      	
              Address:______________________

            

    

     

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    ASSIGNMENT

    

                          FOR
VALUE RECEIVED _______________ (“Assignor”) hereby sells, assigns and transfers
unto ____________________ (“Transferee”) the foregoing Warrant and all rights
evidenced thereby, and does irrevocably constitute and appoint
_____________________, attorney, to transfer said Warrant on the books of
Ventrus Biosciences, Inc.  By acceptance of the foregoing Warrant,
Transferee shall become a Holder under said Warrant and subject to the rights,
obligations and representations of Holder set forth in said
Warrant.

    

    ASSIGNOR:

    

    
      	
              Dated:_______________

            	
              Signature:____________________

            
	 
      	 
      
	 
      	
              Address:______________________

            

    

    

    TRANSFEREE:

    

    
      	
              Dated:_______________

            	
              Signature:____________________

            
	 
      	 
      
	 
      	
              Address:______________________

            

    

    

    PARTIAL
ASSIGNMENT

    

                          FOR
VALUE RECEIVED _______________ (“Assignor”) hereby assigns and transfers unto
____________________ (“Transferee”) the right to purchase _______ shares of
Common Stock, par value $0.001 per share, of Ventrus Biosciences, Inc. covered
by the foregoing Warrant, and a proportionate part of said Warrant and the
rights evidenced thereby, and does irrevocably constitute and appoint
____________________, attorney, to transfer such part of said Warrant on the
books of Ventrus Biosciences, Inc.  By acceptance of the proportionate
part of foregoing Warrant, Transferee shall become a Holder under said
proportionate part of said Warrant and subject to the rights, obligations and
representations of Holder set forth in said Warrant.

    

    ASSIGNOR:

    

    
      	
              Dated:_______________

            	
              Signature:____________________

            
	 
      	 
      
	 
      	
              Address:______________________

            

    

    

    TRANSFEREE:

    

    
      	
              Dated:_______________

            	
              Signature:____________________

            
	 
      	 
      
	 
      	
              Address:______________________

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