Document:

SUBSCRIPTION
      AGREEMENT

     

    

     

    SUBSCRIPTION
      AGREEMENT
      made as
      of this ___ day of ____________, 2008, between Transdel Pharmaceuticals, Inc.,
      a
      Delaware corporation (the “Company”),
      and
      the undersigned (the “Subscriber”).

     

    WHEREAS,
      the
      Company is offering in a private placement to accredited investors Units at
      a
      purchase price of $110,000 per Unit for an aggregate purchase price of
      $4,000,000 (the “Offering”).
      Each
      Unit consists of 50,000 shares of the Company’s common stock, par value $0.001
      per share (the “Common
      Stock”),
      and a
      five-year, redeemable warrant to purchase 6,250 shares of Common Stock at a
      cash
      exercise price of $4.40 per share and a cashless exercise price of $5.50 per
      share (the “Warrants”).
      As
      used herein, the term “Units” means such Units, and all Common Stock and
      Warrants underlying the Units), and

     

    WHEREAS,
      the
      Subscriber desires to subscribe for the number of Units set forth on the
      signature page hereof, on the terms and conditions hereinafter set
      forth.

     

    NOW,
      THEREFORE,
      for and
      in consideration of the premises and the mutual covenants hereinafter set forth,
      the parties hereto do hereby agree as follows:

     

    
      	 	
              I.

            	
              SUBSCRIPTION
                FOR AND REPRESENTATIONS AND COVENANTS OF
                SUBSCRIBER

            

    

     

    1.1 Subject
      to the terms and conditions hereinafter set forth, the Subscriber hereby
      subscribes for and agrees to purchase from the Company such number of Units
      set
      forth upon the signature page hereof, at a price equal to $110,000 per Unit,
      and
      the Company agrees to sell such to the Subscriber for said purchase price,
      subject to the Company’s right to sell to the Subscriber such lesser number of
      (or no) Units as the Company may, in its sole discretion, deem necessary or
      desirable. The purchase price is payable by wire transfer of immediately
      available funds, pursuant to the wire instructions attached as Exhibit
      A
      to this
      Subscription Agreement.

     

    1.2 The
      Subscriber recognizes that the purchase of Units involves a high degree of
      risk
      in that (i) an investment in the Company is highly speculative and only
      investors who can afford the loss of their entire investment should consider
      investing in the Company and the Units; (ii) the Units are not registered under
      the Securities Act of 1933, as amended (the “Act”),
      or
      any state securities law; (iii) there is no trading market for the Units, none
      is likely ever to develop, and the Subscriber may not be able to liquidate
      his,
      her or its investment; (iv) transferability of the Units is extremely limited;
      and (v) an investor could suffer the loss of his, her or its entire
      investment.

     

    1.3 The
      Subscriber is an “accredited investor,” as such term in defined in Rule 501 of
      Regulation D promulgated under the Act, and the Subscriber is able to bear
      the
      economic risk of an investment in the Units.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

     

    1.4 The
      Subscriber has prior investment experience (including investment in non-listed
      and non-registered securities), and has read and evaluated, or has employed
      the
      services of an investment advisor, attorney or accountant to read and evaluate,
      all of the documents furnished or made available by the Company to the
      Subscriber and to all other prospective investors in the Units, as well as
      the
      merits and risks of such an investment by the Subscriber. The Subscriber’s
      overall commitment to investments which are not readily marketable is not
      disproportionate to the Subscriber’s net worth, and the Subscriber’s investment
      in the Units will not cause such overall commitment to become excessive. The
      Subscriber, if an individual, has adequate means of providing for his or her
      current needs and personal and family contingencies and has no need for
      liquidity in his or her investment in the Units. The Subscriber is financially
      able to bear the economic risk of this investment, including the ability to
      afford holding the Units for an indefinite period or a complete loss of this
      investment.

     

    1.5 The
      Subscriber acknowledges receipt and careful review of all documents furnished
      in
      connection with this transaction by the Company (collectively, the “Offering
      Documents”)
      and
      has been furnished or made available by the Company during the course of this
      transaction with all public information regarding the Company which the
      Subscriber has requested or desires to know; and the Subscriber has been
      afforded the opportunity to ask questions of and receive answers from duly
      authorized officers or other representatives of the Company concerning the
      terms
      and conditions of the Offering, and any additional information which the
      Subscriber has requested.

     

    1.6 The
      Subscriber acknowledges that the purchase of the Units may involve tax
      consequences to the Subscriber and that the contents of the Offering Documents
      do not contain tax advice. The Subscriber acknowledges that the Subscriber
      must
      retain his, her or its own professional advisors to evaluate the tax and other
      consequences to the Subscriber of an investment in the Units. The Subscriber
      acknowledges that it is the responsibility of the Subscriber to determine the
      appropriateness and the merits of a corporate entity to own the Subscriber’s
      Units and the corporate structure of such entity.

     

    1.7 The
      Subscriber acknowledges that this Offering has not been reviewed by the
      Securities and Exchange Commission (the “SEC”)
      or any
      state securities commission, and that no federal or state agency has made any
      finding or determination regarding the fairness or merits of the Offering.
      The
      Subscriber represents that the Units are being purchased for his, her or its
      own
      account, for investment only, and not with a view toward distribution or resale
      to others. The Subscriber agrees that he, she or it will not sell or otherwise
      transfer the Units unless they are registered under the Act or unless an
      exemption from such registration is available.

     

    1.8 The
      Subscriber understands that the provisions of Rule 144 under the Act are not
      available for at least six (6) months to permit resales of the Units or the
      Common Stock and Warrants comprising the Units and even though the Company
      will
      use its best efforts to comply with the conditions for compliance with Rule
      144,
      there can be no assurance that the conditions necessary to permit such sales
      under Rule 144 will be satisfied. The Subscriber understands that, except as
      set
      forth in the immediately preceding sentence, the Company is under no obligation
      to comply with the conditions of Rule 144 or take any other action necessary
      in
      order to make available any exemption from registration for the sale of the
      Units or the Common Stock and Warrants comprising the Units.

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    

     

    1.9 The
      Subscriber understands that the Units have not been registered under the Act
      by
      reason of a claimed exemption under the provisions of the Act which depends,
      in
      part, upon his, her or its investment intention. In this connection, the
      Subscriber understands that it is the position of the SEC that the statutory
      basis for such exemption would not be present if his, her or its representation
      merely meant that his, her or its present intention was to hold such securities
      for a short period, such as the capital gains period of tax statutes, for a
      deferred sale, for a market rise or for any other fixed period. The Subscriber
      realizes that, in the view of the SEC, a purchase now with an intent to resell
      would represent a purchase with an intent inconsistent with his, her or its
      representation to the Company and the SEC might regard such a sale or
      disposition as a deferred sale, for which such exemption is not
      available.

     

    1.10 The
      Subscriber agrees to indemnify and hold the Company, its directors, officers
      and
      controlling persons and their respective heirs, representatives, successors
      and
      assigns harmless against all liabilities, costs and expenses incurred by them
      as
      a result of any misrepresentation made by the Subscriber contained herein or
      any
      sale or distribution by the Subscriber in violation of the Act (including,
      without limitation, the rules promulgated thereunder), any state securities
      laws, or the Company’s Certificate of Incorporation or By-laws, as amended from
      time to time.

     

    1.11 The
      Subscriber consents to the placement of a legend on any certificate or other
      document evidencing the Common Stock or the Warrants stating that such
      securities have not been registered under the Act and setting forth or referring
      to the restrictions on transferability and sale thereof. Assuming the Company
      is
      in compliance with its obligations under Rule 144 (and the Subscriber is in
      compliance with its obligations under Rule 144) after the 6 month period noted
      in Section 1.8, the Company will coordinate to have a legal opinion issued
      that
      will facilitate the removal of the restrictive legend on the securities to
      allow
      for the transferability and sale of the securities.

     

    1.12 The
      Subscriber understands that the Company will review and rely on this
      Subscription Agreement without making any independent investigation; and it
      is
      agreed that the Company reserves the unrestricted right to reject or limit
      any
      subscription and to withdraw the Offering at any time.

     

    1.13 The
      Subscriber hereby represents that the address of the Subscriber furnished at
      the
      end of this Subscription Agreement is the undersigned’s principal residence, if
      the Subscriber is an individual, or its principal business address if it is
      a
      corporation or other entity.

     

    1.14 The
      Subscriber acknowledges that if the Subscriber is a Registered Representative
      of
      a National Association of Securities Dealers, Inc. (“NASD”)
      member
      firm, the Subscriber must give such firm the notice required by the NASD’s
      Conduct Rules, receipt of which must be acknowledged by such firm on the
      signature page hereof.

     

    1.15 The
      Subscriber hereby acknowledges that neither the Company nor any persons
      associated with the Company who may provide assistance or advice in connection
      with the Offering (other than the placement agent, if one is engaged by the
      Company) are or are expected to be members or associated persons of members
      of
      the NASD or registered broker-dealers under any federal or state securities
      laws.

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    

     

    1.16 The
      Subscriber hereby represents that, except as expressly set forth in the Offering
      Documents, no representations or warranties have been made to the Subscriber
      by
      the Company or any agent, employee or affiliate of the Company and, in entering
      into this transaction, the Subscriber is not relying on any information other
      than that contained in the Offering Documents and the results of independent
      investigation by the Subscriber.

     

    1.17 All
      information provided by the Subscriber in the Investor Questionnaire attached
      as
Exhibit
      B
      to this
      Subscription Agreement is true and accurate in all respects, and the Subscriber
      acknowledges that the Company will be relying on such information to its
      possible detriment in deciding whether the Company can sell these securities
      to
      the Subscriber without giving rise to the loss of the exemption from
      registration under applicable securities laws.

     

    
      	 	
              II.

            	
              REPRESENTATIONS
                BY
                THE COMPANY

            

    

     

    The
      Company represents and warrants to the Subscriber that as of the date of the
      closing of this Offering (the “Closing
      Date”):

     

    (a) The
      Company is a corporation duly incorporated, validly existing and in good
      standing under the laws of the State of Delaware and has the corporate power
      to
      conduct the business which it conducts and proposes to conduct.

     

    (b) The
      execution, delivery and performance of this Subscription Agreement by the
      Company have been duly authorized by the Company and all other corporate action
      required to authorize and consummate the offer and sale of the Units has been
      duly taken and approved.

     

    (c) The
      Units
      and the underlying Common Stock have been duly and validly authorized and
      issued.

     

    (d) The
      Company is not in violation of or default under, nor will the execution and
      delivery of this Subscription Agreement or the issuance of the Common Stock,
      or
      the consummation of the transactions herein contemplated, result in a violation
      of, or constitute a default under, the Company’s Certificate of Incorporation or
      By-laws, any material obligations, agreements, covenants or conditions contained
      in any bond, debenture, note or other evidence of indebtedness or in any
      material contract, indenture, mortgage, loan agreement, lease, joint venture
      or
      other agreement or instrument to which the Company is a party or by which it
      or
      any of its properties may be bound or any material order, rule, regulation,
      writ, injunction, or decree of any government, governmental instrumentality
      or
      court, domestic or foreign.

     

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    

     

    (e) The
      Company is subject to, and in full compliance with, the reporting requirements
      of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended (the
      “Exchange
      Act”).
      The
      Company has made available to each Subscriber through the EDGAR system true
      and
      complete copies of the Company’s Annual and Quarterly Reports on Form 10-KSB and
      10-QSB, respectively, and each of the Company’s Current Reports on Form 8-K
      (collectively, the “SEC
      Filings”),
      and
      all such SEC Filings are incorporated herein by reference. The SEC Filings,
      including the financial statements included therein, when they were filed with
      the SEC (or, if any amendment with respect to any such document was filed,
      when
      such amendment was filed), complied in all material respects with the applicable
      requirements of the Exchange Act and the rules and regulations thereunder and
      did not, as of such date, contain an untrue statement of a material fact or
      omit
      to state a material fact required to be stated therein or necessary in order
      to
      make the statements therein, in the light of the circumstances under which
      they
      were made, not misleading. 

     

    
      	 	
              III.

            	
              TERMS
                OF SUBSCRIPTION

            

    

     

    3.1 The
      Subscriber has effected a wire transfer in the full amount of the purchase
      price
      for the Units to the Company in accordance with the wire instructions attached
      as Exhibit
      A
      to this
      Subscription Agreement.

     

    3.2 The
      Subscriber hereby authorizes and directs the Company to deliver any certificates
      or other written instruments representing the Units to be issued to such
      Subscriber pursuant to this Subscription Agreement to the address indicated
      on
      the signature page hereof.

     

    3.3 If
      the
      Subscriber is not a United States person, such Subscriber shall immediately
      notify the Company and the Subscriber hereby represents that the Subscriber
      is
      satisfied as to the full observance of the laws of its jurisdiction in
      connection with any invitation to subscribe for the Units or any use of this
      Subscription Agreement, including (i) the legal requirements within its
      jurisdiction for the purchase of the Units, (ii) any foreign exchange
      restrictions applicable to such purchase, (iii) any governmental or other
      consents that may need to be obtained, and (iv) the income tax and other tax
      consequences, if any, that may be relevant to the purchase, holding, redemption,
      sale or transfer of the Units. Such Subscriber’s subscription and payment for,
      and continued beneficial ownership of, the Units will not violate any applicable
      securities or other laws of the Subscriber’s jurisdiction.

     

    
      	 	
              IV.

            	
              MISCELLANEOUS

            

    

     

    4.1 Any
      notice or other communication given hereunder shall be deemed sufficient if
      in
      writing and sent by reputable overnight courier, facsimile (with receipt of
      confirmation) or registered or certified mail, return receipt requested,
      addressed to the Company, 4225 Executive Square, Suite 460, La Jolla,
      California, 92037, Attention: Chief Financial Officer, facsimile: (858)
      457-5308, and to the Subscriber at the address or facsimile number indicated
      on
      the signature page hereof. Notices shall be deemed to have been given on the
      date when mailed or sent by facsimile transmission or overnight courier, except
      notices of change of address, which shall be deemed to have been given when
      received.

     

    4.2 This
      Subscription Agreement shall not be changed, modified or amended except by
      a
      writing signed by both (a) the Company and (b) subscribers in the Offering
      holding a majority of the Units issued in the Offering.

     

    4.3 This
      Subscription Agreement shall be binding upon and inure to the benefit of the
      parties hereto and to their respective heirs, legal representatives, successors
      and assigns. This Subscription Agreement sets forth the entire agreement and
      understanding between the parties as to the subject matter hereof and merges
      and
      supersedes all prior discussions, agreements and understandings of any and
      every
      nature among them.

     

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    

     

    4.4 Notwithstanding
      the place where this Subscription Agreement may be executed by any of the
      parties hereto, the parties expressly agree that all the terms and provisions
      hereof shall be construed in accordance with and governed by the laws of the
      State of Delaware. The parties hereby agree that any dispute which may arise
      between them arising out of or in connection with this Subscription Agreement
      shall be adjudicated only before a Federal court located in Kent County, State
      of Delaware and they hereby submit to the exclusive jurisdiction of the federal
      courts located in Kent County, State of Delaware with respect to any action
      or
      legal proceeding commenced by any party, and irrevocably waive any objection
      they now or hereafter may have respecting the venue of any such action or
      proceeding brought in such a court or respecting the fact that such court is
      an
      inconvenient forum, relating to or arising out of this Subscription Agreement
      or
      any acts or omissions relating to the sale of the securities hereunder, and
      consent to the service of process in any such action or legal proceeding by
      means of registered or certified mail, return receipt requested, in care of
      the
      address set forth below or such other address as the undersigned shall furnish
      in writing to the other. The parties further agree that in the event of any
      dispute, action, suit or other proceeding arising out of or in connection with
      this Subscription Agreement or other matters related to this subscription
      brought by a Subscriber (or transferee), the Company (and each other defendant)
      shall recover all of such party’s attorneys’ fees and costs incurred in each and
      every action, suit or other proceeding, including any and all appeals or
      petitions therefrom. As used herein, attorney’s fees shall be deemed to mean the
      full and actual costs of any investigation and of legal services actually
      performed in connection with the matters involved, calculated on the basis
      of
      the usual fee charged by the attorneys performing such services.

     

    4.5 This
      Subscription Agreement may be executed in counterparts. Upon the execution
      and
      delivery of this Subscription Agreement by the Subscriber, this Subscription
      Agreement shall become a binding obligation of the Subscriber with respect
      to
      the purchase of Units as herein provided; subject, however, to the right hereby
      reserved by the Company to (i) enter into the same agreements with other
      subscribers, (ii) add and/or delete other persons as subscribers and (iii)
      reduce the amount of or reject any subscription.

     

    4.6 The
      holding of any provision of this Subscription Agreement to be invalid or
      unenforceable by a court of competent jurisdiction shall not affect any other
      provision of this Subscription Agreement, which shall remain in full force
      and
      effect.

     

    4.7 It
      is
      agreed that a waiver by either party of a breach of any provision of this
      Subscription Agreement shall not operate or be construed as a waiver of any
      subsequent breach by that same party.

     

    4.8 The
      parties agree to execute and deliver all such further documents, agreements
      and
      instruments and take such other and further actions as may be necessary or
      appropriate to carry out the purposes and intent of this Subscription
      Agreement.

     

    [Signature
      Pages Follow]

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

    IN
      WITNESS WHEREOF,
      the
      parties have executed this Subscription Agreement as of the day and year first
      written above.

     

    

    
      	
              __________________________

            	
              X
                $110,000 for each Unit

            	
              =
                $_____________________.

            
	
              Number
                of Units subscribed for

            	 	
              Aggregate
                Purchase Price

            

    

    

    Manner
      in which Title is to be held (Please Check One):

     

    
      	
              1.

            	
              ___

            	
              Individual

            	
              7.

            	
              ___

            	
              Trust/Estate/Pension
                or Profit Sharing Plan

              Date
                  Opened:______________

            
	
              2.

            	
              ___

            	
              Joint
                Tenants with Right of Survivorship

            	
              8.

            	
              ___

            	
              As
                a Custodian for

              ________________________________

              Under
                the Uniform Gift to Minors Act of the State of

              ________________________________

            
	
              3.

            	
              ___

            	
              Community
                Property

            	
              9.

            	
              ___

            	
              Married
                with Separate Property

            
	
              4.

            	
              ___

            	
              Tenants
                in Common

            	
              10.

            	
              ___

            	
              Keogh

            
	
              5.

            	
              ___

            	
              Corporation/Partnership/
                Limited Liability Company

            	
              11.

            	
              ___

            	
              Tenants
                by the Entirety

            
	
              6.

            	
              ___

            	
              IRA

            	
              12.

            	
              ___

            	
              Foundation
                described in Section 501(c)(3) of the Internal Revenue Code of 1986,
                as
                amended.

            

    

    

    IF
      MORE THAN ONE SUBSCRIBER,
      EACH SUBSCRIBER MUST SIGN:

     

    · INDIVIDUAL
      SUBSCRIBERS MUST COMPLETE PAGE 8

     

    · SUBSCRIBERS
      WHICH ARE ENTITIES MUST COMPLETE PAGE 9

     

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

    EXECUTION
      BY NATURAL PERSONS

     

    
      	
               

              _____________________________________________________________________________

              Exact
                Name in Which Title is to be Held

            
	
            	 	 
	
              Name
                (Please Print)

               

               

            	 	
              Name
                of Additional Subscriber

               

            
	
              Residence:
                Number and Street

            	 	
              Address
                of Additional Subscriber

               

               

            
	
              City,
                State and Zip Code

               

               

            	 	
              City,
                State and Zip Code

            
	
              Social
                Security Number

               

               

            	 	
              Social
                Security Number

            
	
              Telephone
                Number

            	 	
              Telephone
                Number

               

               

            
	
              Fax
                Number (if available)

            	 	
              Fax
                Number (if available)

               

               

            
	
              E-Mail
                (if available)

            	 	
              E-Mail
                (if available)

               

               

            
	
              (Signature)

            	 	
              (Signature
                of Additional Subscriber)

               

               

            
	 	 	 
	 	
              ACCEPTED
                this ___ day of _________ 2008, on behalf of Transdel Pharmaceuticals,
                Inc.

            
	 
	 	
              By:_______________________

              Name:
                Juliet Singh, Ph.D.

              Title:
                Chief Executive Officer

            

    

    

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

    EXECUTION
      BY SUBSCRIBER WHICH IS AN ENTITY

     

    (Corporation,
      Partnership, Trust, Etc.)

     

    
      	
              ____________________________________________________________________________

              Name
                of Entity (Please Print)

            
	
              Date
                of Incorporation or Organization:

            
	
              State
                of Principal Office:

            
	
              Federal
                Taxpayer Identification Number:         

               

               

              ____________________________________________

              Office
                Address

              ____________________________________________

              City,
                State and Zip Code

              ____________________________________________

              Telephone
                Number

              ____________________________________________

              Fax
                Number (if available)

              ____________________________________________

              E-Mail
                (if available)

            
	
               

              [seal]

               

              Attest:                                                           

              (If
                Entity is a Corporation)

            	
               

              By: _______________________     

              Name:

              Title:

            
	 	 
	
              *If
                Subscriber is a Registered Representative with an NASD member firm,
                have
                the following acknowledgement signed by the appropriate
                party:

            	 
	
              The
                undersigned NASD member firm acknowledges receipt of the
                notice

              required
                by Rule 3050 of the NASD

              Conduct
                Rules

            	 
	 
	
               

               

              Name
                of NASD Firm

            	
              ACCEPTED
                this ____ day of __________ 2008, on behalf of Transdel Pharmaceuticals,
                Inc.

            
	
               

              By:
                _______________________      

              Name:

              Title:

            	
               

              By:
                _______________________      

              Name:
                Juliet Singh, Ph.D.

              Title:
                Chief Executive Officer

            

    

    

    
      
         

      

      
        9WARRANT

            	 
	
              NO.
                TPIX - ___

            	
              TRANSDEL
                PHARMACEUTICALS, INC. 

            	
              ________
                Shares

            
	 	 	 

    

    WARRANT
      TO PURCHASE COMMON STOCK

     

    VOID
      AFTER 5:30 P.M., EASTERN 

    TIME,
      ON THE EXPIRATION DATE

     

    THIS
      WARRANT AND ANY SHARES ACQUIRED UPON THE EXERCISE OF THIS WARRANT HAVE NOT
      BEEN
      REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), AND MAY NOT
      BE SOLD, PLEDGED, HYPOTHECATED, DONATED OR OTHERWISE TRANSFERRED WITHOUT
      COMPLIANCE WITH THE REGISTRATION OR QUALIFICATION PROVISIONS OF APPLICABLE
      FEDERAL AND STATE SECURITIES LAWS OR APPLICABLE EXEMPTIONS
      THEREFROM.

     

    FOR
      VALUE
      RECEIVED, TRANSDEL PHARMACEUTICALS, INC., a Delaware corporation (the
“Company”),
      hereby agrees to sell upon the terms and on the conditions hereinafter set
      forth, but no later than 5:30 p.m., Eastern Time, on the Expiration Date (as
      hereinafter defined) to ________________
      or
      registered assigns (the “Holder”),
      under
      the terms as hereinafter set forth, __________________
      (_____________)
      fully
      paid and non-assessable shares of the Company’s Common Stock, par value $0.001
      per share (the “Warrant
      Stock”),
      at a
      cash purchase price of FOUR DOLLARS AND FORTY CENTS ($4.40) per share (the
      “Cash
      Warrant Price”)
      or a
      cashless purchase price of FIVE DOLLARS AND FIFTY CENTS ($5.50) per share (the
      “Cashless
      Warrant Price”),
      pursuant to this warrant (this “Warrant”).
      The
      number of shares of Warrant Stock to be so issued and each Warrant Price are
      subject to adjustment in certain events as hereinafter set forth. The term
      “Common
      Stock”
shall
      mean, when used herein, unless the context otherwise requires, the stock and
      other securities and property at the time receivable upon the exercise of this
      Warrant.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

     

    1. Exercise
      of Warrant.

     

    a. The
      Holder may exercise this Warrant according to its terms by (i) surrendering
      this
      Warrant, properly endorsed, to the Company at the address set forth in Section
      10, (ii) delivering the subscription form attached hereto to the Company, duly
      executed by the Holder, and (iii) payment of the purchase price being made
      to
      the Company for the number of shares of the Warrant Stock specified in the
      subscription form, or as otherwise provided in this Warrant, prior to 5:30
      p.m.,
      Eastern Time, on __________________, 2013 (the
      “Expiration
      Date”).
      Such
      exercise shall be effected by the surrender of the Warrant, together with a
      duly
      executed copy of the Form of Exercise attached hereto, to Company at its
      principal office and (i) the payment to the Company of an amount equal to the
      aggregate Cash Warrant Price for the number of shares of Warrant Stock being
      purchased in cash, certified check or bank draft or (ii) by surrendering such
      number of shares of Warrant Stock received upon exercise of this Warrant with
      a
      Fair Market Value (as defined below) equal to the aggregate Cashless Warrant
      Price for the Warrant Stock being purchased (a “Cashless
      Exercise”).

     

      b. If
        the
        Holder elects the Cashless Exercise method of payment, the Company shall
        issue
        to the Holder a number of shares of Warrant Stock determined in accordance
        with
        the following formula:

     

    

      X
         = Y(A
        -
        B)

      A

    

      with: X
        =
 the
        number of shares of Warrant Stock to be issued to the Holder;

    

      Y
        = the
        number of shares of Warrant Stock with respect to which the Warrant is being
        exercised;

    

      A
        = the
        fair
        value per share of Common
        Stock on
        the
        date of exercise of this Warrant;
        and

    

      B
        = the
        then-current Cashless Warrant Price of
        the
        Warrant

    

      For
        the
        purposes of this Section 1, “Fair Market Value” per share of Common Stock shall
        mean (A) the average of the closing sales prices, as quoted on the primary
        national or regional stock exchange on which the Common Stock is listed,
        or,
        if not
        listed,
        the OTC
        Bulletin Board if quoted thereon, on the ten
        (10)
        trading
        days immediately preceding the date on which the notice of exercise is deemed
        to
        have been sent to the Company, or (B) if the Common Stock is not publicly
        traded
        as set forth above, as reasonably and in good faith determined by the Board
        of
        Directors of the Company as of the date which the notice of exercise is deemed
        to have been sent to the Company.

    

    c. This
      Warrant may be exercised in whole or in part so long as any exercise in part
      hereof would not involve the issuance of fractional shares of Warrant Stock.
      If
      exercised in part, the Company shall deliver to the Holder a new Warrant,
      identical in form, in the name of the Holder, evidencing the right to purchase
      the number of shares of Warrant Stock as to which this Warrant has not been
      exercised, which new Warrant shall be signed by the Chairman, Chief Executive
      Officer or President of the Company. The term Warrant as used herein shall
      include any subsequent Warrant issued as provided herein.

     

    d. No
      fractional shares or scrip representing fractional shares shall be issued upon
      the exercise of this Warrant. The Company shall pay cash in lieu of fractions
      with respect to the Warrants based upon the fair market value of such fractional
      shares of Common Stock (which shall be the closing price of such shares on
      the
      exchange or market on which the Common Stock is then traded) at the time of
      exercise of this Warrant.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    

     

    e. In
      the
      event of any exercise of the rights represented by this Warrant, a certificate
      or certificates for the Warrant Stock so purchased, registered in the name
      of
      the Holder, shall be delivered to the Holder within a reasonable time after
      such
      rights shall have been so exercised. The person or entity in whose name any
      certificate for the Warrant Stock is issued upon exercise of the rights
      represented by this Warrant shall for all purposes be deemed to have become
      the
      holder of record of such shares immediately prior to the close of business
      on
      the date on which the Warrant was surrendered and payment of the Cash Warrant
      Price or the Cashless Warrant Price, as the case may be, and any applicable
      taxes was made, irrespective of the date of delivery of such certificate, except
      that, if the date of such surrender and payment is a date when the stock
      transfer books of the Company are closed, such person shall be deemed to have
      become the holder of such shares at the opening of business on the next
      succeeding date on which the stock transfer books are open. The Company shall
      pay any and all documentary stamp or similar issue or transfer taxes payable
      in
      respect of the issue or delivery of shares of Common Stock on exercise of this
      Warrant.

     

    2. Disposition
      of Warrant Stock and Warrant.

     

    a. The
      Holder hereby acknowledges that this Warrant and any Warrant Stock purchased
      pursuant hereto are, as of the date hereof, not registered: (i) under the
      Securities Act of 1933, as amended (the “Act”),
      on
      the ground that the issuance of this Warrant is exempt from registration under
      Section 4(2) of the Act as not involving any public offering or (ii) under
      any
      applicable state securities law because the issuance of this Warrant does not
      involve any public offering; and that the Company’s reliance on the Section 4(2)
      exemption of the Act and under applicable state securities laws is predicated
      in
      part on the representations hereby made to the Company by the Holder that it
      is
      acquiring this Warrant and will acquire the Warrant Stock for investment for
      its
      own account, with no present intention of dividing its participation with others
      or reselling or otherwise distributing the same, subject, nevertheless, to
      any
      requirement of law that the disposition of its property shall at all times
      be
      within its control.

     

    The
      Holder hereby agrees that it will not sell or transfer all or any part of this
      Warrant and/or Warrant Stock unless and until it shall first have given notice
      to the Company describing such sale or transfer and furnished to the Company
      either (i) an opinion, reasonably satisfactory to counsel for the Company,
      of
      counsel (skilled in securities matters, selected by the Holder and reasonably
      satisfactory to the Company) to the effect that the proposed sale or transfer
      may be made without registration under the Act and without registration or
      qualification under any state law, or (ii) an interpretative letter from the
      Securities and Exchange Commission to the effect that no enforcement action
      will
      be recommended if the proposed sale or transfer is made without registration
      under the Act.

     

    b. If,
      at
      the time of issuance of the shares issuable upon exercise of this Warrant,
      no
      registration statement is in effect with respect to such shares under applicable
      provisions of the Act, the Company may at its election require that the Holder
      provide the Company with written reconfirmation of the Holder’s investment
      intent and that any stock certificate delivered to the Holder of a surrendered
      Warrant shall bear legends reading substantially as follows:

     

    “THE
      SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
      SECURITIES ACT OF 1933, AND MAY NOT BE SOLD, TRANSFERRED, PLEDGED OR OTHERWISE
      DISPOSED OF IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
      SECURITIES ACT OF 1933 OR AN OPINION OF COUNSEL SATISFACTORY TO THE ISSUER
      OF
      THIS CERTIFICATE THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT.”

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    

     

    In
      addition, so long as the foregoing legend may remain on any stock certificate
      delivered to the Holder, the Company may maintain appropriate “stop transfer”
orders with respect to such certificates and the shares represented thereby
      on
      its books and records and with those to whom it may delegate registrar and
      transfer functions.

     

    3. Reservation
      of Shares.
      The
      Company hereby agrees that at all times there shall be reserved for issuance
      upon the exercise of this Warrant such number of shares of its Common Stock
      as
      shall be required for issuance upon exercise of this Warrant. The Company
      further agrees that all shares which may be issued upon the exercise of the
      rights represented by this Warrant will be duly authorized and will, upon
      issuance and against payment of the exercise price, be validly issued, fully
      paid and non-assessable, free from all taxes, liens, charges and preemptive
      rights with respect to the issuance thereof, other than taxes, if any, in
      respect of any transfer occurring contemporaneously with such issuance and
      other
      than transfer restrictions imposed by federal and state securities
      laws.

     

    4. Exchange,
      Transfer or Assignment of Warrant.
      This
      Warrant is exchangeable, without expense, at the option of the Holder, upon
      presentation and surrender hereof to the Company or at the office of its stock
      transfer agent, if any, for other Warrants of different denominations, entitling
      the Holder or Holders thereof to purchase in the aggregate the same number
      of
      shares of Common Stock purchasable hereunder. Upon surrender of this Warrant
      to
      the Company or at the office of its stock transfer agent, if any, with the
      Assignment Form annexed hereto duly executed and funds sufficient to pay any
      transfer tax, the Company shall, without charge, execute and deliver a new
      Warrant in the name of the assignee named in such instrument of assignment
      and
      this Warrant shall promptly be canceled. This Warrant may be divided or combined
      with other Warrants that carry the same rights upon presentation hereof at
      the
      office of the Company or at the office of its stock transfer agent, if any,
      together with a written notice specifying the names and denominations in which
      new Warrants are to be issued and signed by the Holder hereof.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    

     

    5. Capital
      Adjustments.
      This
      Warrant is subject to the following further provisions:

     

    a. If
      any
      recapitalization of the Company or reclassification of its Common Stock or
      any merger or consolidation of the Company into or with a corporation or other
      business entity, or the sale or transfer of all or substantially all of the
      Company’s assets or of any successor corporation’s assets to any other
      corporation or business entity (any such corporation or other business entity
      being included within the meaning of the term “successor corporation”) shall be
      effected, at any time while this Warrant remains outstanding and unexpired,
      then, as a condition of such recapitalization, reclassification, merger,
      consolidation, sale or transfer, lawful and adequate provision shall be made
      whereby the Holder of this Warrant thereafter shall have the right to receive
      upon the exercise hereof as provided in Section 1 and in lieu of the shares
      of
      Common Stock immediately theretofore issuable upon the exercise of this Warrant,
      such shares of capital stock, securities or other property as may be issued
      or
      payable with respect to or in exchange for a number of outstanding shares of
      Common Stock equal to the number of shares of Common Stock immediately
      theretofore issuable upon the exercise of this Warrant had such
      recapitalization, reclassification, merger, consolidation, sale or transfer
      not
      taken place, and in each such case, the terms of this Warrant shall be
      applicable to the shares of stock or other securities or property receivable
      upon the exercise of this Warrant after such consummation.

     

    b. If
      the
      Company at any time while this Warrant remains outstanding and unexpired shall
      subdivide or combine its Common Stock, the number of shares of Warrant Stock
      purchasable upon exercise of this Warrant and each Warrant Price shall be
      proportionately adjusted.

     

    c. If
      the
      Company at any time while this Warrant is outstanding and unexpired shall issue
      or pay the holders of its Common Stock, or take a record of the holders of
      its
      Common Stock for the purpose of entitling them to receive, a dividend payable
      in, or other distribution of, Common Stock, then (i) each Warrant Price shall
      be
      adjusted in accordance with Section 5(e) and (ii) the number of shares of
      Warrant Stock purchasable upon exercise of this Warrant shall be adjusted to
      the
      number of shares of Common Stock that the Holder would have owned immediately
      following such action had this Warrant been exercised immediately prior
      thereto.

     

    d. If
      the
      Company shall at any time after the date of issuance of this Warrant distribute
      to all holders of its Common Stock any shares of capital stock of the Company
      (other than Common Stock) or evidences of its indebtedness or assets (excluding
      cash dividends or distributions paid from retained earnings or current year’s or
      prior year’s earnings of the Company) or rights or warrants to subscribe for or
      purchase any of its securities (excluding those referred to in the immediately
      preceding paragraph) (any of the foregoing being hereinafter in this paragraph
      called the “Securities”),
      then
      in each such case, the Company shall reserve shares or other units of such
      securities for distribution to the Holder upon exercise of this Warrant so
      that,
      in addition to the shares of the Common Stock to which such Holder is entitled,
      such Holder will receive upon such exercise the amount and kind of such
      Securities which such Holder would have received if the Holder had, immediately
      prior to the record date for the distribution of the Securities, exercised
      this
      Warrant.

     

    e. Except
      as
      otherwise provided herein, whenever the number of shares of Warrant Stock
      purchasable upon exercise of this Warrant is adjusted, as herein provided,
      each
      Warrant Price payable upon the exercise of this Warrant shall be adjusted to
      that price determined by multiplying such Warrant Price immediately prior to
      such adjustment by a fraction (i) the numerator of which shall be the number
      of
      shares of Warrant Stock purchasable upon exercise of this Warrant immediately
      prior to such adjustment, and (ii) the denominator of which shall be the number
      of shares of Warrant Stock purchasable upon exercise of this Warrant immediately
      thereafter.

     

    f. The
      number of shares of Common Stock outstanding at any given time for purposes
      of
      the adjustments set forth in this Section 5 shall exclude any shares then
      directly or indirectly held in the treasury of the Company.

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    

     

    g. The
      Company shall not be required to make any adjustment pursuant to this Section
      5
      if the amount of such adjustment would be less than one percent (1%) of both
      Warrant Prices in effect immediately before the event that would otherwise
      have
      given rise to such adjustment. In such case, however, any adjustment that would
      otherwise have been required to be made shall be made at the time of and
      together with the next subsequent adjustment which, together with any adjustment
      or adjustments so carried forward, shall amount to not less than one percent
      (1%) of both Warrant Prices in effect immediately before the event giving rise
      to such next subsequent adjustment.

     

    h. Following
      each computation or readjustment as provided in this Section 5, each new
      adjusted Warrant Price and number of shares of Warrant Stock purchasable upon
      exercise of this Warrant shall remain in effect until a further computation
      or
      readjustment thereof is required.

     

    6. Redemption.
      This
      Warrant may be redeemed prior to the Expiration Date, at the option of the
      Company, at a price of $0.001 per share of Warrant Stock (“Redemption
      Price”),
      upon
      not less than 10 days prior written notice (“Redemption
      Period”)
      to
      Holder notifying Holder of the Company’s intent to exercise such right and
      setting forth a time and date for such redemption; provided,
      however,
      that no
      redemption under this Section 6 may occur unless (i) the Company’s Common Stock
      has had a closing sales price greater than $7.50 per share for twenty (20)
      consecutive trading days and (ii) at the date of redemption notice and during
      the entire Redemption Period there is an effective registration statement
      covering the resale of the Warrant Stock. This Warrant may be exercised by
      Holder, for cash, at any time after notice of redemption has been given by
      the
      Company and prior to the time and date fixed for redemption. On and after the
      redemption date, the Holder shall have no further rights except to receive,
      upon
      surrender of this Warrant, the Redemption Price.

     

    7. Notice
      to Holders.

     

    a. In
      case:

     

    (i) the
      Company shall take a record of the holders of its Common Stock (or other stock
      or securities at the time receivable upon the exercise of this Warrant) for
      the
      purpose of entitling them to receive any dividend (other than a cash dividend
      payable out of earned surplus of the Company) or other distribution, or any
      right to subscribe for or purchase any shares of stock of any class or any
      other
      securities, or to receive any other right;

     

    (ii) of
      any
      capital reorganization of the Company, any reclassification of the capital
      stock
      of the Company, any consolidation with or merger of the Company into another
      corporation, or any conveyance of all or substantially all of the assets of
      the
      Company to another corporation; or

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    

     

    (iii) of
      any
      voluntary dissolution, liquidation or winding-up of the Company;

     

    then,
      and
      in each such case, the Company will mail or cause to be mailed to the Holder
      hereof at the time outstanding a notice specifying, as the case may be, (i)
      the
      date on which a record is to be taken for the purpose of such dividend,
      distribution or right, and stating the amount and character of such dividend,
      distribution or right, or (ii) the date on which such reorganization,
      reclassification, consolidation, merger, conveyance, dissolution, liquidation
      or
      winding-up is to take place, and the time, if any, is to be fixed, as of which
      the holders of record of Common Stock (or such stock or securities at the
      time receivable upon the exercise of this Warrant) shall be entitled to exchange
      their shares of Common Stock (or such other stock or securities) for securities
      or other property deliverable upon such reorganization, reclassification,
      consolidation, merger, conveyance, dissolution or winding-up. Such notice shall
      be mailed at least thirty (30) days prior to the record date therein specified,
      or if no record date shall have been specified therein, at least thirty (30)
      days prior to such specified date, provided, however, failure to provide any
      such notice shall not affect the validity of such transaction.

     

    b. Whenever
      any adjustment shall be made pursuant to Section 5 hereof, the Company shall
      promptly make a certificate signed by its Chairman, Chief Executive Officer,
      President, Vice President, Chief Financial Officer or Treasurer, setting forth
      in reasonable detail the event requiring the adjustment, the amount of the
      adjustment, the method by which such adjustment was calculated and each Warrant
      Price and number of shares of Warrant Stock purchasable upon exercise of
      this Warrant after giving effect to such adjustment, and shall promptly cause
      copies of such certificates to be mailed (by first class mail, postage prepaid)
      to the Holder of this Warrant.

     

    8. Loss,
      Theft, Destruction or Mutilation.
      Upon
      receipt by the Company of evidence satisfactory to it, in the exercise of its
      reasonable discretion, of the ownership and the loss, theft, destruction or
      mutilation of this Warrant and, in the case of loss, theft or destruction,
      of
      indemnity reasonably satisfactory to the Company and, in the case of mutilation,
      upon surrender and cancellation thereof, the Company will execute and deliver
      in
      lieu thereof, without expense to the Holder, a new Warrant of like tenor dated
      the date hereof.

     

    9. Warrant
      Holder Not a Stockholder.
      The
      Holder of this Warrant, as such, shall not be entitled by reason of this Warrant
      to any rights whatsoever as a stockholder of the Company.

     

    10. Notices.
      Any
      notice required or contemplated by this Warrant shall be deemed to have been
      duly given if transmitted by registered or certified mail, return receipt
      requested, or nationally recognized overnight delivery service,
      to
      the
      Company at its principal executive offices located at 4225 Executive Square,
      Suite 460, La Jolla, California 92037, Attention: Chief Financial Officer,
      or to
      the Holder at the name and address set forth in the Warrant Register maintained
      by the Company.

     

    11. Choice
      of Law.
      THIS
      WARRANT IS ISSUED UNDER AND SHALL FOR ALL PURPOSES BE GOVERNED BY AND CONSTRUED
      IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF DELAWARE, WITHOUT GIVING
      EFFECT TO PRINCIPLES OF CONFLICTS OF LAW.

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    

     

    12. Jurisdiction
      and Venue.
      The
      Company and Holder hereby agree that any dispute which may arise between them
      arising out of or in connection with this Warrant shall be adjudicated before
      a
      court located in Kent County, Delaware and they hereby submit to the exclusive
      jurisdiction of the federal and state courts of the State of Delaware located
      in
      Kent County with respect to any action or legal proceeding commenced by any
      party, and irrevocably waive any objection they now or hereafter may have
      respecting the venue of any such action or proceeding brought in such a court
      or
      respecting the fact that such court is an inconvenient forum, relating to or
      arising out of this Warrant or any acts or omissions relating to the sale of
      the
      securities hereunder, and consent to the service of process in any such action
      or legal proceeding by means of registered or certified mail, return receipt
      requested, in care of the address set forth herein or such other address as
      either party shall furnish in writing to the other.

     

    

     

    [REMAINDER
      OF PAGE INTENTIONALLY LEFT BLANK]

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF, the Company has duly caused this Warrant to be signed on its
      behalf, in its corporate name and by its duly authorized officers, as of this
      __
      day of May, 2008.

     

    
      	 	 	 
	 	TRANSDEL
              PHARMACEUTICALS,
              INC.
	 
 	 
 	 
 
	 	By:  	 
	 	
              
Name:
              Juliet Singh, Ph.D.
	 	Title:
              Chief Executive Officer 

    

     

     

     

     

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

    FORM
      OF
      EXERCISE

     

    (to
      be
      executed by the registered holder hereof)

     

     

     

    The
      undersigned hereby exercises the right to purchase _________ shares of common
      stock, par value $0.001 per share (“Common Stock”), of Transdel
      Pharmaceuticals,
      Inc.
      evidenced by the within Warrant Certificate for a Cash Warrant Price of $4.40
      per share or a Cashless Warrant Price of $5.50 per share and herewith makes
      payment of the purchase price in full of (i) $__________ in cash or (ii) shares
      of Common Stock (pursuant to a Cashless Exercise in accordance with Section
      1b.). Kindly issue certificates for shares of Common Stock (and for the
      unexercised balance of the Warrants evidenced by the within Warrant Certificate,
      if any) in accordance with the instructions given below.

     

     

     

    Dated:____________________
      , 20___ .

     

    

    

    ______________________________

    

    Instructions
      for registration of stock

    

    

    _____________________________

      Name
      (Please Print)

    

    Social
      Security or other identifying Number:

    

    Address:__________________________________

       City/State
      and Zip Code

     

    

    Instructions
      for registration of certificate representing 

    the
      unexercised balance of Warrants (if any)

     

    

    _____________________________
      

    Name
      (Please Print)

     

    Social
      Security or other identifying Number: ___________

    

    Address:____________________________________

       City,
      State and Zip Code

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

    FORM
      OF ASSIGNMENT

    (To
      be
      signed only on transfer of Warrant)

    

    For
      value
      received, the undersigned hereby sells, assigns, and transfers unto
      _____________________ the right represented by the within Warrant to purchase
      _________ shares of Common Stock of Transdel Pharmaceuticals, Inc. to which
      the
      within Warrant relates, and appoints _____________________ to transfer such
      right on the books of Transdel Pharmaceuticals, Inc. with full power of
      substitution in the premises.

    

    Dated:
      ____________________  ______________________________

    (Signature
      must conform to name

    of
      holder
      as specified on the

    face
      of
      the Warrant)

    

    _______________________________

    (Address)

    Signed
      in
      the presence of:

    

    __________________________

    

    

    

     

    

     

    

     

    

     

    

     

    

    
      
        
        

      

      
        11

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