Document:

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                                                                     Exhibit 4.3

THIS CONVERTIBLE NOTE AND THE SECURITIES ISSUABLE UPON CONVERSION HEREOF HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE
SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR IN ANY OTHER JURISDICTION.
THE SECURITIES REPRESENTED HEREBY MAY NOT BE OFFERED, SOLD OR TRANSFERRED IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER
APPLICABLE SECURITIES LAWS UNLESS OFFERED, SOLD OR TRANSFERRED PURSUANT TO AN
AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THOSE LAWS.

                                CONVERTIBLE NOTE
                                ----------------
Date: June 15, 2001                                                 $1,000,000

         FOR VALUE RECEIVED, INKINE PHARMACEUTICAL COMPANY, INC., a corporation
organized under the laws of the State of New York (the "Corporation"), hereby
promises to pay to the order of _________________________or any assignee
registered on the books and records of the Corporation (individually, the
"Holder," and collectively with the holders of all other notes of same like and
tenor, the "Holders") the sum of one million dollars ($1,000,000) on the second
anniversary of the date hereof (the "Scheduled Maturity Date"), and to pay
interest on the unpaid principal balance hereof for each year (or portion
thereof) that this Note is outstanding prior to the Scheduled Maturity Date in
an amount equal to five and one half percent (5 1/2%) per annum. Interest shall
accrue on the unpaid principal balance hereof from the date hereof (the "Issue
Date") until the date the same becomes due and payable, whether semi-annually,
at maturity or upon prepayment, repayment or otherwise. Any amounts on this Note
which are not paid when due shall bear interest at the rate equal to the lower
of eighteen percent (18%) per annum and the highest rate permitted by law from
the due date thereof until the same is paid. Interest shall be calculated based
on a 360-day year and shall commence accruing on the Issue Date and, to the
extent not converted in accordance with the provisions hereof, shall be due and
payable by the Corporation semi-annually (with the first interest payment due on
December 12, 2001), and shall be paid to the Holder in Common Stock at the
Conversion Price (as herein defined) then in effect on the date that the
interest becomes due. All payments of principal and interest (to the extent not
converted in accordance with the terms hereof or otherwise paid in Common Stock)
shall be made in, and all references herein to monetary denominations shall
refer to, lawful money of the United States of America. All payments shall be
made at such address as the Holder shall have given or shall hereafter give to
the Corporation by written notice in accordance with the provisions of this
Note.

         This Note is being issued by the Corporation along with similar
convertible term notes (the "Other Notes" and, together with this Note, the
"Notes") pursuant to that certain Securities Purchase Agreement, dated as of the
Issue Date, by and between the Corporation and the other signatory thereto (the
"Securities Purchase Agreement").

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                                   ARTICLE I.

                                   PREPAYMENT

         Upon the occurrence of an Event of Default (as defined below) and the
election by the Holder to require prepayment, this Note shall be prepaid by the
Corporation in accordance with the provisions of Article VI hereof. This Note
may be prepaid at the option of the Corporation at any time in accordance with
the provisions of Article VIII hereof.

                                   ARTICLE II.

                               CERTAIN DEFINITIONS

         The following terms shall have the following meanings:

         A. "Closing Bid Price" means, for any security as of any date, the
closing bid price of such security on the principal United States securities
exchange or trading market where such security is listed or traded as reported
by Bloomberg Financial Markets (or a comparable reporting service of national
reputation selected by the Corporation and reasonably acceptable to Holders of a
majority of the aggregate principal amount represented by the then outstanding
Notes ("Majority Holders") if Bloomberg Financial Markets is not then reporting
closing bid prices of such security) (collectively, "Bloomberg"), or if the
foregoing does not apply, the last reported sale price of such security in the
over-the-counter market on the electronic bulletin board for such security as
reported by Bloomberg, or, if no sale price is reported for such security by
Bloomberg, the average of the bid prices of all market makers for such security
as reported in the "pink sheets" by the National Quotation Bureau, Inc., in each
case for such date or, if such date was not a trading date for such security, on
the next preceding date which was a trading date. If the Closing Bid Price
cannot be calculated for such security as of either of such dates on any of the
foregoing bases, the Closing Bid Price of such security on such date shall be
the fair market value as reasonably determined by an investment banking firm
selected by the Corporation and reasonably acceptable to the Majority Holders,
with the costs of such appraisal to be borne by the Corporation.

         B. "Conversion Amount" means the portion of the principal amount of
this Note being converted plus any accrued and unpaid interest thereon through
the Conversion Date and, at the option of the Holder, any penalties due under
Article V and any Default Amounts due under Article VI hereof, each as specified
in the notice of conversion in the form attached hereto (the "Notice of
Conversion").

         C. "Conversion Date" means, (i) for any Optional Conversion (as defined
below), the date specified in the Notice of Conversion so long as the copy of
the Notice of Conversion is faxed (or delivered by other means resulting in
notice) to the Corporation at or before 11:59 p.m., New York City time, on the
Conversion Date indicated in the Notice of Conversion; provided, however, that
if the Notice of Conversion is not so faxed or otherwise delivered before such
time, then the Conversion Date shall be the date the Holder faxes or otherwise
delivers the Notice of Conversion to the Corporation, and (ii) for any Mandatory
Conversion (as defined below), the date specified in the notice delivered to the
Holder by the Company pursuant to Article III.C.

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         D. "Conversion Price" shall mean $4.52, subject to adjustment as
provided herein.

         E. "Measurement Date" means (i) for purposes of any private offering of
securities under Section 4(2) of the Securities Act of 1933, as amended (the
"Securities Act"), the date that the Company enters into legally binding
definitive agreements for the issuance and sale of such securities and (ii) for
purposes of any other issuance of securities, the date of issuance thereof.

         F. "Common Stock Deemed Outstanding" shall mean the number of shares of
Common Stock actually outstanding (not including shares of Common Stock held in
the treasury of the Company), plus (x) in the case of any adjustment required by
Article VII.E(i) resulting from the issuance of any Options (as defined below),
the maximum total number of shares of Common Stock issuable upon the exercise of
the Options for which the adjustment is required (including any Common Stock
issuable upon the conversion of Convertible Securities (as defined below)
issuable upon the exercise of such Options), and (y) in the case of any
adjustment required by Article VII.E(i) resulting from the issuance of any
Convertible Securities, the maximum total number of shares of Common Stock
issuable upon the exercise, conversion or exchange of the Convertible Securities
for which the adjustment is required, as of the date of issuance of such
Convertible Securities, if any.

         G. "Warrants" shall mean the warrants issued by the Corporation to the
initial Holders pursuant to the Securities Purchase Agreement.

                                  ARTICLE III.

                                   CONVERSION

         A. Conversion at the Option of the Holder. Subject to the limitations
on conversions contained in Paragraph D of this Article III, the Holder may, at
any time and from time to time, convert (an "Optional Conversion") all or any
part of the outstanding principal amount of this Note, plus all accrued interest
thereon through the Conversion Date, into a number of fully paid and
nonassessable shares of the Corporation's common stock, par value $.0001 per
share ("Common Stock"), determined in accordance with the following formula:

                                Conversion Amount

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

                                Conversion Price

         B. Mechanics of Conversion. In order to effect an Optional Conversion,
a Holder shall: (x) fax (or otherwise deliver) a copy of the fully executed
Notice of Conversion to the Corporation and (y) surrender or cause to be
surrendered this Note, duly endorsed, along with a copy of the Notice of
Conversion as soon as practicable thereafter to the Corporation. Upon receipt by
the Corporation of a facsimile copy of a Notice of Conversion from a Holder, the
Corporation shall immediately send, via facsimile, a confirmation to such Holder
stating that the Notice of Conversion has been received, the date upon which the
Corporation expects to deliver the Common Stock issuable upon such conversion
and the name and telephone number of a contact person at the Corporation
regarding the conversion. The Corporation shall not be obligated to issue shares
of Common Stock upon a conversion unless either this Note is delivered to the

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Corporation as provided above, or the Holder notifies the Corporation or the
transfer agent that this Note has been lost, stolen or destroyed and delivers
the documentation to the Corporation required by Article XI.H hereof.

            (i) Delivery of Common Stock Upon Conversion. Upon the surrender of
this Note accompanied by a Notice of Conversion, the Corporation shall, no later
than the later of (a) the third (3rd) business day following the Conversion Date
and (b) the business day following the date of such surrender (or, in the case
of lost, stolen or destroyed certificates, after delivery of the documentation
required by Article XI.H) (the "Delivery Period"), issue and deliver to the
Holder or its nominee (x) that number of shares of Common Stock issuable upon
conversion of the portion of this Note being converted and (y) a new Note in the
form hereof representing the balance of the principal amount hereof not being
converted, if any. If the Corporation's transfer agent is participating in the
Depository Trust Company ("DTC") Fast Automated Securities Transfer program, and
so long as the certificates therefor do not bear a legend and the Holder thereof
is not then required to return such certificate for the placement of a legend
thereon, the Corporation shall cause its transfer agent to electronically
transmit the Common Stock issuable upon conversion to the Holder by crediting
the account of the Holder or its nominee with DTC through its Deposit Withdrawal
Agent Commission system ("DTC Transfer"). If the aforementioned conditions to a
DTC Transfer are not satisfied, the Corporation shall deliver to the Holder
physical certificates representing the Common Stock issuable upon conversion.
Further, a Holder may instruct the Corporation to deliver to the Holder physical
certificates representing the Common Stock issuable upon conversion in lieu of
delivering such shares by way of DTC Transfer.

            (ii) Taxes. The Corporation shall pay any and all taxes that may be
imposed upon it with respect to the issuance and delivery of the shares of
Common Stock upon the conversion of this Note.

            (iii) No Fractional Shares. If any conversion of this Note would
result in the issuance of a fractional share of Common Stock, such fractional
share shall be disregarded and the number of shares of Common Stock issuable
upon conversion of the Notes shall be the nearest whole number of shares.

            (iv) Conversion Disputes. In the case of any dispute with respect to
a conversion, the Corporation shall promptly issue such number of shares of
Common Stock as are not disputed in accordance with subparagraph (i) above. If
such dispute involves the calculation of the Conversion Price or the Conversion
Amount, the Corporation shall submit the disputed calculations to an independent
outside accountant via facsimile within two business days of receipt of the
Notice of Conversion. The accountant, at the Corporation's sole expense, shall
review the calculations and notify the Corporation and the Holder of the results
no later than two business days from the date it receives the disputed
calculations. If after such independent accountant's review the Corporation and
the Holder cannot resolve such dispute, the Corporation and the Holder shall use
their best efforts to resolve such dispute through mediation prior to commencing
litigation. Upon resolution of such dispute (through mediation or otherwise),
the Corporation shall then issue the appropriate number of shares of Common
Stock in accordance with subparagraph (i) above.

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         C. Mandatory Conversion. Subject to the limitations on conversion
contained in paragraph E of this Article III, if at any time all of the Required
Conditions (as defined herein) are satisfied and (i) at any time after 270 days
after the Registration Statement Effective Date (as defined herein), the Closing
Bid Price of the Common Stock is greater than $9.04 (as adjusted to reflect any
stock dividends, distributions, combinations, reclassifications and other
similar transactions effected by the Corporation in respect to its Common Stock)
for at least twenty (20) consecutive Trading Days or (ii) upon the closing of an
underwritten public offering pursuant to an effective registration statement
under the Securities Act, covering the offer and sale of Common Stock for the
account of the Corporation to the public (A) at an offering price per share
(prior to underwriter's commissions and discounts) of not less than $7.91 per
share (as adjusted to reflect any stock dividends, distributions, combinations,
reclassifications and other similar transactions effected by the Corporation in
respect to its Common Stock) and (B) with gross proceeds to the Corporation of
not less than $25,000,000, then, at the option of the Corporation exercisable by
the delivery of written notice to the Holders of the Notes, delivered no more
than ten (10) days before the Conversion Date, convert all or any part of the
outstanding principal amount of this Note, plus all accrued interest thereon
through the Conversion Date, into a number of fully paid and non assessable
shares of Common Stock determined in accordance with the formula set forth in
Paragraph A of this Article III (a "Mandatory Conversion"). Thereafter, the
Corporation and the Holders shall follow the applicable conversion procedures
set forth in Article III.B (including the requirement that the Holder deliver
this Note to the Corporation); provided, however, the Holder shall not be
required to deliver a Notice of Conversion to the Corporation. In this event the
Corporation elects to convert only a portion of the outstanding Notes pursuant
to this Article III.C, the Notes shall be redeemed pro rata among the Holders
based upon the total amount due under the Notes as of the Conversion Date.

            (i) The "Required Conditions" shall consist of the following:

                (1) the Registration Statement required to be filed by the
Corporation pursuant to Section 2(a) of the Registration Rights Agreement, dated
as of the Issue Date, by and between the Corporation and the initial Holders
(the "Registration Rights Agreement") shall have been declared effective by the
Securities and Exchange Commission (the date of such effectiveness hereinafter
referred to as, the "Registration Statement Effective Date")(it being understood
that the Corporation shall comply with its obligations under Article 3 of the
Registration Rights Agreement relating to the effectiveness of the Registration
Statement);

                (2) all shares of Common Stock issuable upon conversion of the
Notes, as interest payments under the Notes and exercise of the Warrants are
then (a) authorized and reserved for issuance, (b) registered under the
Securities Act for resale by the Holders and (c) eligible to be listed or traded
on any of the New York Stock Exchange ("NYSE"), the American Stock Exchange
("AMEX") or the NASDAQ National Market ("NNM") (or the successor to any of
them);

                (3) no Event of Default (as defined in Article VI below) shall
have occurred without having been cured;

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                (4) all amounts, if any, then accrued or payable under this Note
(other than accrued interest that is convertible pursuant to the terms hereof)
or the Registration Rights Agreement shall have been paid.

         D. Limitations on Conversions. The conversion of this Note shall be
subject to the following limitations (each of which limitations shall be applied
independently):

            (i) Cap Amount. The conversion of this Note into shares of Common
Stock shall be subject to the limitations on conversion contained in Section
4(o) of the Securities Purchase Agreement (the "Cap Amount").

            (ii) No Five Percent Holders. In no event shall a Holder of the
Notes or the Corporation have the right to convert any portion of this Note
(whether in an Optional Conversion or a Mandatory Conversion or otherwise) into
shares of Common Stock or to dispose of any portion of this Note to the extent
that such right to effect such conversion or disposition would result in the
Holder or any of its affiliates beneficially owning more than 4.99% of the
outstanding shares of Common Stock. For purposes of this subparagraph,
beneficial ownership shall be determined in accordance with Section 13(d) of the
Securities Exchange Act of 1934, as amended, and Regulation 13 D-G thereunder.
The restriction contained in this subparagraph D shall not be altered, amended,
deleted or changed in any manner whatsoever unless the holders of a majority of
the outstanding shares of Common Stock, the Holder and the Holders of a majority
of the outstanding principal amount of the Notes shall approve, in writing, such
alteration, amendment, deletion or change.

                                  ARTICLE IV.

                      RESERVATION OF SHARES OF COMMON STOCK

         A. Reserved Amount. On the Issue Date, the Corporation shall reserve
2,700,000 shares of the authorized but unissued shares of Common Stock for
issuance upon conversion of the Notes, payment of interest on the Notes and
exercise of the Warrants, and thereafter the Corporation shall take all
necessary action to ensure that the number of authorized but unissued shares of
Common Stock so reserved (the "Reserved Amount") shall be sufficient to provide
for the conversion of the Notes in their entirety (including an amount equal to
the interest that would accrue over a one-year period on the original principal
balance of this Note) at the Conversion Price, taking into account any
adjustments pursuant to Article VII hereof, and to provide for any shares of
Common Stock issued or then issuable as a result of a Conversion Default
hereunder, the occurrence of an Event of Default hereunder, the exercise of the
Warrants or any other payment convertible into shares of Common Stock pursuant
to the terms hereof or the Registration Rights Agreement.

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                                   ARTICLE V.

                         FAILURE TO SATISFY CONVERSIONS

         A. Conversion Defaults; Adjustments to Conversion Price. The following
shall constitute a "Conversion Default": (i) following the submission by a
Holder of a Notice of Conversion, the Corporation fails for any reason (except
for the reasons contemplated in Article III.D.) to deliver, in accordance with
the delivery instructions contained in the Notice of Conversion, on or prior to
the fifth trading day following the expiration of the Delivery Period for such
conversion, such number of freely tradable shares of Common Stock to which such
Holder is entitled upon such conversion or (ii) the Corporation provides notice
(or otherwise indicates) to any Holder at any time of its intention not to issue
freely tradable shares of Common Stock upon exercise by any Holder of its
conversion rights in accordance with the terms of the Notes, or (iii) the
Corporation is prohibited, at any time, from issuing shares of Common Stock upon
conversion of the Notes to any Holder because (a) the Corporation does not have
available a sufficient number of authorized and unissued shares of Common Stock
or (b) if such issuance would exceed the Cap Amount, if applicable. In the case
of a Conversion Default described in clauses (i), (ii) or (iii)(a) above, the
Corporation shall pay to such Holder an amount equal to (A) the outstanding
principal amount of the Notes to be converted by such Holder multiplied by (B)
 .18 multiplied by (C) a fraction, the numerator of which is the number of days
after such Conversion Default until the Default Cure Date (as defined below) and
the denominator of which is 365. In the case of a Conversion Default described
in clause (iii)(b) above, the Corporation shall pay to the Holder an amount
equal to the product of (A) the outstanding amount of principal and interest of
the Note that can not be converted due to the Conversion Default (described in
Section (iii)(b) above) and (B) 1.1. The cash payment described above shall be
made to the Holder within five days following any demand for payment by the
Holder. In addition, upon the occurrence of a Conversion Default and until the
Default Cure Date, the Holder shall be entitled to the remedies set forth in
Article VI.

         B. "Default Cure Date" means (i) with respect to a Conversion Default
described in clause (i) of its definition, the date the Corporation effects the
conversion of all of the outstanding Notes subject to the applicable Notice of
Conversion, (ii) with respect to a Conversion Default described in clause (ii)
of its definition, the date the Corporation issues freely tradable shares of
Common Stock in satisfaction of all conversions of the Notes in accordance with
Article III.A, and (iii) with respect to a Conversion Default described in
clause (iii) of its definition, the date the prohibition ceases.

                                  ARTICLE VI.

                                EVENTS OF DEFAULT

         A. Events of Default. In the event (each of the events described in
clauses (i)-(ix) below after expiration of the applicable cure period (if any)
being an "Event of Default"):

            (i) the Corporation fails to pay the principal hereof or any accrued
and unpaid interest hereon when due, whether at maturity, upon acceleration or
otherwise and such failure continues for a period of five trading days after the
due date thereof;

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            (ii) the Corporation either (a) fails to pay, when due, or within
any applicable grace period, any payment with respect to any indebtedness of the
Corporation in excess of $250,000 due to any third party (including, without
limitation, any of the Other Notes), other than payments contested by the
Corporation in good faith, or otherwise is in breach or violation of any
agreement for monies owed or owing in an amount in excess of $250,000 which
breach or violation permits the other party thereto to declare a default or
otherwise accelerate amounts due thereunder, or (b) suffers to exist any other
default or event of default under any agreement binding the Corporation which
default or event of default would or is likely to have a material adverse effect
on the business, operations, properties, prospects or financial condition of the
Corporation, other than as set forth in Article VI.A(vii);

            (iii) the Common Stock (including any of the shares of Common Stock
issuable upon conversion of the Notes or exercise of the Warrants) is suspended
from trading on any of, or is not listed (and authorized) for trading on at
least one of, the NYSE, the AMEX or NNM for an aggregate of ten trading days in
any nine month period;

            (iv) the Registration Statement referred to in Section 2(a) of the
Registration Rights Agreement has not been declared effective within one hundred
eighty (180) days after the Issue Date or such Registration Statement, after
being declared effective, cannot be utilized by the Holders of the Notes for the
resale of all of their Registrable Securities (as defined in the Registration
Rights Agreement);

            (v) the Corporation fails to remove any restrictive legend on any
certificate or any shares of Common Stock issued to the Holders of the Notes
upon conversion of any of the Notes as and when required by this Note, the
Securities Purchase Agreement or the Registration Rights Agreement (a "Legend
Removal Failure"), and any such failure continues uncured for ten trading days
after the Corporation has been notified thereof in writing by the Holder;

            (vi) the Corporation provides notice (or otherwise indicates) to any
Holder of the Notes, including by way of public announcement, at any time, of
its intention not to issue, or otherwise refuses to issue, shares of Common
Stock to any Holder of the Notes upon conversion in accordance with the terms of
the Notes;

            (vii) the Corporation otherwise shall breach any material term
hereunder (other than as set forth in Article VI.A(i) and including, without
limitation, Article IV hereof) or under the Securities Purchase Agreement, the
Registration Rights Agreement or the Warrants, including, without limitation,
the representations and warranties contained therein and if such breach if
curable, remains uncured for more than 20 days after the Corporation has been
notified thereof in writing by the Holder or the Corporation fails to diligently
pursue the cure of such breach during such 20-day period;

            (viii) the Corporation or any subsidiary of the Corporation shall
make an assignment for the benefit of creditors, or apply for or consent to the
appointment of a receiver or trustee for it or for a substantial part of its
property or business, or such a receiver or trustee shall otherwise be
appointed; or

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            (ix) bankruptcy, insolvency, reorganization or liquidation
proceedings or other proceedings for relief under any bankruptcy law or any law
for the relief of debtors shall be instituted by or against the Corporation or
any subsidiary of the Corporation and if instituted against the Corporation by a
third party, shall not be dismissed within 60 days of their initiation;

then, upon the occurrence of any such Event of Default, at the option of each
Holder, exercisable in whole or in part at any time and from time to time by
delivery of a Default Notice (as defined below) to the Corporation while such
Event of Default continues, the Corporation shall pay such Holder (and upon the
occurrence of an Event of Default specified in subparagraphs (viii) and (ix) of
this Paragraph A, the Corporation shall be required to pay the Holders), in
satisfaction of its obligation to pay the outstanding principal amount of the
Notes and accrued and unpaid interest thereon, an amount equal to the Default
Amount and such Default Amount shall immediately become due and payable, all
without demand, presentment or notice, all of which are hereby expressly waived,
together with all costs, including, without limitation, legal fees and expenses
of collection, and the Holder shall be entitled to exercise all other rights and
remedies available at law or in equity. For the avoidance of doubt, the
occurrence of any event described in clauses (vi), (viii) or (ix) above shall
immediately constitute an Event of Default and there shall be no cure period.

         Following the submission of a Default Notice, the Holder of this Note
shall have the right to continue to submit Notices of Conversion and to convert
this Note until such time (if any) as the Corporation pays to the Holder the
Default Amount.

         Upon the Corporation's receipt of any Default Notice hereunder (other
than during the three trading day period following the Corporation's delivery of
a Default Announcement (as defined below) to all of the Holders in response to
the Corporation's initial receipt of a Default Notice from a Holder of the
Notes), the Corporation shall immediately (and in any event within one trading
day following such receipt) deliver a written notice (a "Default Announcement")
to all Holders of the Notes stating the date upon which the Corporation received
such Default Notice and the amount of the Notes covered thereby. The Corporation
shall not redeem any Notes during the three trading day period following the
delivery of a required Default Announcement hereunder. At any time and from time
to time during such three trading day period, each Holder of the Notes may
request (either orally or in writing) information from the Corporation with
respect to the instant default (including, but not limited to, the aggregate
principal amount outstanding of Notes covered by Default Notices received by the
Corporation) and the Corporation shall furnish (either orally or in writing) as
soon as practicable such requested information to such requesting Holder. In the
event the Corporation is not able to repay all of the outstanding Notes within
five trading days after its receipt of a notice requiring such payment (a
"Default Notice") the Corporation shall repay the outstanding Notes to each
Holder pro rata, based on the total amounts due under the Notes at the time of
repayment included by such Holder in all Default Notices delivered prior to the
date upon which such repayment is to be effected relative to the total amounts
due under all Notes at the time of repayment included in all of the Default
Notices delivered prior to the date upon which such repayment is to be effected;
provided, however, the foregoing shall not constitute a waiver by any Holder of
its rights to payment in full of the total Default Amount due under each such
Holder's Notes.

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         B. Definition of Default Amount. The "Default Amount" with respect to a
Note means an amount equal to:

            V x 110%

where:

         "V" means the aggregate principal amount of the Notes being paid plus
all accrued and unpaid interest thereon through the payment date.

                                  ARTICLE VII.

                       ADJUSTMENTS TO THE CONVERSION PRICE

         The Conversion Price shall be subject to adjustment from time to time
as follows:

         A. Stock Splits, Stock Dividends, Etc. If, at any time on or after the
Issue Date, the number of outstanding shares of Common Stock is increased by a
stock split, stock dividend, combination, or other similar event, the Conversion
Price shall be proportionately reduced, or if the number of outstanding shares
of Common Stock is decreased by a reverse stock split, combination or
reclassification of shares, or other similar event, the Conversion Price shall
be proportionately increased. In such event, the Corporation shall notify the
Corporation's transfer agent of such change on or before the effective date
thereof.

         B. Adjustment Due to Merger, Consolidation, Etc. If there shall be (i)
any reclassification or change of the outstanding shares of Common Stock (other
than a change in par value, or from par value to no par value, or from no par
value to par value, or as a result of a subdivision or combination), (ii) any
consolidation or merger of the Corporation with any other entity (other than a
merger in which the Corporation is the surviving or continuing entity and its
capital stock is unchanged), (iii) any sale or transfer of all or substantially
all of the assets of the Corporation or (iv) any share exchange pursuant to
which all of the outstanding shares of Common Stock are converted into other
securities or property (each of (i) - (iv) above being a "Corporate Change"),
then the Holders of the Notes shall thereafter have the right to receive upon
conversion, in lieu of the shares of Common Stock otherwise issuable, such
shares of stock, securities and/or other property as would have been issued or
payable in such Corporate Change with respect to or in exchange for the number
of shares of Common Stock which would have been issuable upon conversion had
such Corporate Change not taken place, and in any such case, appropriate
provisions (in form and substance reasonably satisfactory to the Holders of a
majority of the principal amount of the Notes then outstanding) shall be made
with respect to the rights and interests of the Holders of the Notes to the end
that the economic value of the Notes are in no way diminished by such Corporate
Change and that the provisions hereof (including, without limitation, in the
case of any such consolidation, merger or sale in which the successor entity or
purchasing entity is not the Corporation, an immediate adjustment to the
Conversion Price so that the Conversion Price immediately after the Corporate
Change reflects the same relative value as compared to the value of the
surviving entity's common stock that existed between the Conversion Price and
the value of the Corporation's Common Stock immediately prior to such Corporate
Change) shall thereafter be applicable, as nearly as may be practicable in

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relation to any shares of stock or securities thereafter deliverable upon the
conversion thereof. The Corporation shall not effect any Corporate Change unless
(i) each Holder of the Notes has received written notice of such transaction at
least 20 days prior to the closing of such Corporate Change, but in no event
later than 20 days prior to the record date for the determination of
shareholders entitled to vote with respect thereto and (ii) the resulting
successor or acquiring entity (if not the Corporation) assumes the obligations
of the Notes. The above provisions shall apply regardless of whether or not
there would have been a sufficient number of shares of Common Stock authorized
and available for issuance upon conversion of the Notes outstanding as of the
date of such transaction, and shall similarly apply to successive
reclassifications, consolidations, mergers, sales, transfers or share exchanges.

         C. Adjustment Due to Distribution. If, at any time after the Issue
Date, the Corporation shall declare or make any distribution of its assets (or
rights to acquire its assets) to holders of Common Stock as a partial
liquidating dividend, by way of return of capital or otherwise (including any
dividend or distribution to the Corporation's shareholders in cash or shares (or
rights to acquire shares) of capital stock of a subsidiary (i.e. a spin-off)) (a
"Distribution"), then the Holders of the Notes shall be entitled, upon any
conversion of the Notes after the date of record for determining shareholders
entitled to such Distribution, to receive the amount of such assets which would
have been payable to the Holder with respect to the shares of Common Stock
issuable upon such conversion had such Holder been the holder of such shares of
Common Stock on the record date for the determination of shareholders entitled
to such Distribution. If the Distribution involves rights, warrants, options or
any other form of convertible securities and the right to exercise or convert
such securities would expire in accordance with its terms prior to the
conversion of this Note, then the terms of such securities shall provide that
such exercise or convertibility right shall remain in effect until 30 days after
the date the Holder of the Notes receive such securities pursuant to the
conversion hereof.

         D. Purchase Rights. If, at any time after the Issue Date, the
Corporation issues any Convertible Securities or rights to purchase stock,
warrants, securities or other property ("Purchase Rights") pro rata to the
record holders of any class of Common Stock, then the Holders of the Notes will
be entitled to acquire, upon the terms applicable to such Purchase Rights, the
aggregate Purchase Rights which such Holder could have acquired if such Holder
had held the number of shares of Common Stock acquirable upon complete
conversion of the Notes (without giving effect to the limitations contained in
Article III.D) immediately before the date on which a record is taken for the
grant, issuance or sale of such Purchase Rights, or, if no such record is taken,
the date as of which the record holders of Common Stock are to be determined for
the grant, issue or sale of such Purchase Rights.

         E. Adjustment of Conversion Price.

            (i) Except as otherwise provided in Paragraphs A and B of this
Article VII, if and whenever after the Issue Date the Company issues or sells,
or in accordance with Article VII.E(ii) hereof is deemed to have issued or sold,
any shares of Common Stock for no consideration or for a consideration per share
less than the Conversion Price on the Measurement Date (as such terms is
hereinafter defined) (a "Dilutive Issuance"), then effective immediately upon
the Dilutive Issuance, the Conversion Price will be adjusted in accordance with
the following formula:

                                       11
<PAGE>

            C'   = C x O + P/C
                       -------
                        CSDO

            where:

            C'   = the adjusted Conversion Price;
            C    = the Conversion Price on the Measurement Date;
            O    = the  number of shares of Common Stock outstanding immediately
                   prior to the Dilutive Issuance;
            P    = the aggregate consideration, calculated as set forth in
                   Article  VII.E(ii) hereof, received by the Company upon such
                   Dilutive Issuance; and
            CSDO = the total number of shares of Common Stock Deemed
                   Outstanding.

Notwithstanding the foregoing, no adjustment shall be made pursuant to this
Paragraph E if such adjustment would result in an increase in the Conversion
Price.

            (ii) Effect on Conversion Price of Certain Events. For purposes of
determining the adjusted Conversion Price under Subsection (i), the following
will be applicable:

                 (1) Issuance of Rights or Options. If the Company in any manner
issues or grants any warrants, rights or options, whether or not immediately
exercisable, to subscribe for or to purchase Common Stock or other securities
exercisable, convertible into or exchangeable for Common Stock ("Convertible
Securities") (such warrants, rights and options to purchase Common Stock or
Convertible Securities are hereinafter referred to as "Options") and the price
per share for which Common Stock is issuable upon the exercise of such Options
is less than the Conversion Price in effect on the Measurement Date ("Below
Conversion Price Options"), then the maximum total number of shares of Common
Stock issuable upon the exercise of all such Below Conversion Price Options
(assuming full exercise, conversion or exchange of Convertible Securities, if
applicable) will, as of the date of the issuance or grant of such Below
Conversion Price Options, be deemed to be outstanding and to have been issued
and sold by the Company for such price per share. For purposes of the preceding
sentence, the "price per share for which Common Stock is issuable upon the
exercise of such Below Conversion Price Options" is determined by dividing (i)
the total amount, if any, received or receivable by the Company as consideration
for the issuance or granting of all such Below Conversion Price Options, plus
the minimum aggregate amount of additional consideration, if any, payable to the
Company upon the exercise of all such Below Conversion Price Options, plus, in
the case of Convertible Securities issuable upon the exercise of such Below
Conversion Price Options, the minimum aggregate amount of additional
consideration payable upon the exercise, conversion or exchange thereof
(determined in accordance with the calculation method set forth in Article
VII.E(ii)(2) below) at the time such Convertible Securities first become
exercisable, convertible or exchangeable, by (ii) the maximum total number of
shares of Common Stock issuable upon the exercise of all such Below Conversion
Price Options (assuming full conversion of Convertible Securities, if
applicable). No further adjustment to the Conversion Price will be made upon the
actual issuance of such Common Stock upon the exercise of such Below Conversion
Price Options or upon the exercise, conversion or exchange of Convertible
Securities issuable upon exercise of such Below Conversion Price Options.

                                       12
<PAGE>

                 (2) Issuance of Convertible Securities.

                     (A) If the Company in any manner issues or sells any
Convertible Securities, which Convertible Securities do not have a fluctuating
conversion or exercise price or exchange ratio, whether or not immediately
convertible (other than where the same are issuable upon the exercise of
Options) and the price per share for which Common Stock is issuable upon such
exercise, conversion or exchange (as determined pursuant to Article
VII.E(ii)(2)(B) if applicable) is less than the Conversion Price in effect on
the Measurement Date, then the maximum total number of shares of Common Stock
issuable upon the exercise, conversion or exchange of all such Convertible
Securities will, as of the date of the issuance of such Convertible Securities,
be deemed to be outstanding and to have been issued and sold by the Company for
such price per share. For the purposes of the preceding sentence, the "price per
share for which Common Stock is issuable upon such exercise, conversion or
exchange" is determined by dividing (i) the total amount, if any, received or
receivable by the Company as consideration for the issuance or sale of all such
Convertible Securities, plus the minimum aggregate amount of additional
consideration, if any, payable to the Company upon the exercise, conversion or
exchange thereof at the time such Convertible Securities first become
exercisable, convertible or exchangeable, by (ii) the maximum total number of
shares of Common Stock issuable upon the exercise, conversion or exchange of all
such Convertible Securities. No further adjustment to the Conversion Price will
be made upon the actual issuance of such Common Stock upon exercise, conversion
or exchange of such Convertible Securities.

                     (B) If the Company in any manner issues or sells any
Convertible Securities with a fluctuating conversion or exercise price or
exchange ratio (a "Variable Rate Convertible Security"), then the "price per
share for which Common Stock is issuable upon such exercise, conversion or
exchange" for purposes of the calculation contemplated by Article
VII.E(ii)(2)(A) shall be deemed to be the lowest price per share which would be
applicable (assuming all holding period and other conditions to any discounts
contained in such Convertible Security have been satisfied) if the Conversion
Price on the Measurement Date of such Convertible Security was 75% of the
Conversion Price on such date (the "Assumed Variable Market Price"). Further, if
the Conversion Price at any time or times thereafter is less than or equal to
the Assumed Variable Market Price last used for making any adjustment under this
Article VII.E with respect to any Variable Rate Convertible Security, the
Conversion Price in effect at such time shall be readjusted to equal the
Conversion Price which would have resulted if the Assumed Variable Market Price
at the time of issuance of the Variable Rate Convertible Security had been 75%
of the Market Price existing at the time of the adjustment required by this
sentence.

                 (3) Change in Option Price or Conversion Rate. If there is a
change at any time in (a) the amount of additional consideration payable to the
Company upon the exercise of any Options; (b) the amount of additional
consideration, if any, payable to the Company upon the exercise, conversion or
exchange of any Convertible Securities; or (c) the rate at which any Convertible
Securities are convertible into or exchangeable for Common Stock (in each such
case, other than under or by reason of provisions designed to protect against
dilution and except when an adjustment is made pursuant to Article
VII.E.(ii)(2)(B) above), the Conversion Price in effect at the time of such
change will be readjusted to the Conversion Price which would have been in
effect at such time had such Options or Convertible Securities still outstanding
provided for such changed additional consideration or changed conversion rate,
as the case may be, at the time initially granted, issued or sold.

                                       13
<PAGE>

                 (4) Calculation of Consideration Received. If any Common Stock,
Options or Convertible Securities are issued, granted or sold for cash, the
consideration received therefor for purposes of this Note will be the amount
received by the Company therefor, after deduction of all underwriting discounts
or allowances in connection with such issuance, grant or sale. In case any
Common Stock, Options or Convertible Securities are issued or sold for a
consideration part or all of which shall be other than cash, including in the
case of a strategic or similar arrangement in which the other entity will
provide services to the Company, purchase services from the Company or otherwise
provide intangible consideration to the Company, the amount of the consideration
other than cash received by the Company (including the net present value of the
consideration expected by the Company for the provided or purchased services)
will be the fair market value of such consideration, except where such
consideration consists of securities, in which case the amount of consideration
received by the Company will be the Market Price thereof as of the date of
receipt. In case any Common Stock, Options or Convertible Securities are issued
in connection with any merger or consolidation in which the Company is the
surviving corporation, the amount of consideration therefor will be deemed to be
the fair market value of such portion of the net assets and business of the
non-surviving corporation as is attributable to such Common Stock, Options or
Convertible Securities, as the case may be. Notwithstanding anything else herein
to the contrary, if Common Stock, Options or Convertible Securities are issued,
granted or sold in conjunction with each other as part of a single transaction
or in a series of related transactions, the holder of this Note may elect to
determine the amount of consideration deemed to be received by the Company
therefor by deducting the fair value of any type of securities (the "Disregarded
Securities") issued, granted or sold in such transaction or series of
transactions. If the holder makes an election pursuant to the immediately
preceding sentence, no adjustment to the Conversion Price shall be made pursuant
to this Article VII.E for the issuance of the Disregarded Securities or upon any
conversion or exercise thereof. For example, if the Company were to issue
convertible notes having a face value of $1,000,000 and warrants to purchase
shares of Common Stock at an exercise price equal to the market price of the
Common Stock on the date of issuance of such warrants in exchange for $1,000,000
of consideration, the fair value of the warrants would be subtracted from the
$1,000,000 of consideration received by the Company for the purposes of
determining whether the shares of Common Stock issuable upon conversion of the
convertible notes shall be deemed to be issued at a price per share below market
price and, if so, for purposes of determining any adjustment to the Conversion
Price hereunder as a result of the issuance of the Convertible Securities. The
Company shall calculate, using standard commercial valuation methods appropriate
for valuing such assets, the fair market value of any consideration other than
cash or securities; provided, however, that if the holder hereof does not agree
to such fair market value calculation within three business days after receipt
thereof from the Company, then such fair market value will be determined in good
faith by an investment banker or other appropriate expert of national reputation
selected by the Company and reasonably acceptable to the holder hereof, with the
costs of such appraisal to be borne by the Company.

                 (5) Issuances Pursuant to Existing Securities. If the Company,
at any time before the Scheduled Maturity Date, issues shares of Common Stock
pursuant to any antidilution or similar adjustments (other than as a result of
stock splits, stock dividends and the like) contained in a security or

                                       14
<PAGE>

instrument outstanding as of the date hereof but not included on Schedule 3(d)
of the Securities Purchase Agreement, then all shares of Common Stock so issued
shall be deemed to have been issued for no consideration.

         F. Exceptions to Adjustment of Conversion Price. No adjustment to the
Conversion Price will be made (i) upon the exercise of any warrants, options or
convertible securities issued and outstanding on the Issue Date and set forth on
Schedule 3(d) of the Securities Purchase Agreement in accordance with the terms
of such securities as of such date; (ii) upon the grant or exercise of any stock
or options to employees, directors or consultants of the Company which may
hereafter be granted or exercised under any stock option or similar benefit plan
of the Company now existing or to be implemented in the future, so long as the
issuance of such stock or options is approved by a majority of the non-employee
members of the Board of Directors of the Company or a majority of the members of
a committee of non-employee directors established for such purpose; or (iii)
upon conversion of the Notes or exercise of the Warrants.

         G. Notice of Adjustments. Upon the occurrence of each adjustment or
readjustment of the Conversion Price pursuant to this Article VII, the
Corporation, at its expense, shall promptly compute such adjustment or
readjustment and prepare and furnish to each Holder of the Notes a certificate
setting forth such adjustment or readjustment and showing in detail the facts
upon which such adjustment or readjustment is based. The Corporation shall, upon
the written request at any time of any Holder of the Notes, furnish to such
Holder a like certificate setting forth (i) such adjustment or readjustment,
(ii) the Conversion Price at the time in effect and (iii) the number of shares
of Common Stock and the amount, if any, of other securities or property which at
the time would be received upon conversion of any Note.

         H. Other Action Affecting Conversion Price. If the Corporation takes
any action affecting the Common Stock after the date hereof that would be
covered by Article VII.A through E, but for the manner in which such action is
taken or structured, which would in any way diminish the value of this Note,
then the Conversion Price shall be adjusted in such manner as the Board of
Directors of the Company shall in good faith determine to be equitable under the
circumstances.

         I. Minimum Adjustment of Conversion Price. No adjustment of the
Conversion Price shall be made in an amount of less than $.01, but any such
lesser adjustment shall be carried forward and shall be made at the time and
together with the next subsequent adjustment which, together with any
adjustments so carried forward, shall amount to not less than $.01.

                                 ARTICLE VIII.

                               OPTIONAL REDEMPTION

         A. Redemption Events. In the event (each of the events described in
clauses (i) - (iii) below being a "Redemption Event", the Corporation shall:

            (i) sell, convey or dispose of all or substantially all of its
assets (the presentation of any such transaction for shareholder approval being
conclusive evidence that such transaction involves the sale of all or
substantially all of the assets of the Corporation);

                                       15
<PAGE>

            (ii) merge, consolidate or engage in any other business combination
with any other entity (other than pursuant to a migratory merger effected solely
for the purpose of changing the jurisdiction of incorporation of the Corporation
and other than pursuant to a merger in which the Corporation is the surviving or
continuing entity and its capital stock is unchanged); or

            (iii) have thirty-five percent (35%) or more of the voting power of
its capital stock owned beneficially by one person, entity or "group" (as such
term is used under Section 13(d) of the Securities Exchange Act of 1934, as
amended);

then, upon the occurrence of any such Redemption Event, at the option of each
Holder, exercisable in whole or in part at any time and from time to time by
delivery of a Redemption Notice (as defined below) to the Corporation, the
Corporation shall redeem the Notes for a redemption price, payable in cash, in
an amount equal to the Redemption Amount (as defined below), plus all other
ancillary amounts payable hereunder, together with all costs, including, without
limitation, legal fees and expenses.

         Upon the Corporation's receipt of any Redemption Notice hereunder
(other than during the three trading day period following the Corporation's
delivery of a Redemption Announcement (as defined below) to all of the Holders
in response to the Corporation's initial receipt of a Redemption Notice from a
Holder of the Notes), the Corporation shall immediately (and in any event within
one trading day following such receipt) deliver a written notice (a "Redemption
Announcement") to all Holders of the Notes stating the date upon which the
Corporation received such Redemption Notice and the amount of the Notes covered
thereby. At any time and from time to time during such three trading day period,
each Holder of the Notes may request (either orally or in writing) information
from the Corporation with respect to the applicable Redemption Event (including,
but not limited to, the aggregate principal amount outstanding of Notes covered
by Redemption Notices received by the Corporation) and the Corporation shall
furnish (either orally or in writing) as soon as practicable such requested
information to such requesting Holder. In the event the Corporation is not able
to redeem all of the outstanding Notes within five trading days after its
receipt of a notice of redemption (a "Redemption Notice") the Corporation shall
repay the outstanding Notes to each Holder pro rata, based on the total amounts
due under the Notes at the time of redemption included by such Holder in all
Redemption Notices delivered prior to the date upon which such redemption is to
be effected relative to the total amounts due under all Notes at the time of
redemption included in all of the Redemption Notices delivered prior to the date
upon which such redemption is to be effected; provided, however, the foregoing
shall not constitute a waiver by any Holder of its rights to payment in full of
the total Redemption Amount due under each such Holder's Notes pursuant to this
Article VIII.

         B. Optional Redemption by Company.

            (i) If at any time no Event of Default exists at the option of the
Corporation exercised by the delivery of written notice (an "Optional Redemption
Notice") to all Holders of the Notes, delivered no more than thirty (30) days
before the date of redemption set forth therein (the "Optional Redemption
Date"), the Corporation shall redeem the Notes, payable in cash, in an amount
equal to the Redemption Amount, plus all other ancillary amounts payable
hereunder.

                                       16
<PAGE>

            (ii) The Company may not deliver to a Holder an Optional Redemption
Notice unless on or prior to the date of delivery of such Optional Redemption
Notice, the Company shall have segregated on the books and records of the
Company an amount of cash sufficient to pay all amounts to which the holders of
the Notes are entitled upon such redemption pursuant to subparagraph (i) of this
Paragraph B. Any Optional Redemption Notice delivered shall be irrevocable and
shall be accompanied by a statement executed by a duly authorized officer of the
Company.

            (iii) The Redemption Amount shall be paid to the Holders being
redeemed within three (3) business days of the Optional Redemption Date;
provided, however, that the Company shall not be obligated to deliver any
portion of the Redemption Amount until either the Notes being redeemed are
delivered to the office of the Company or the escrow agent or the holder
notifies the Company or the transfer agent that such certificates have been
lost, stolen or destroyed and delivers the documentation in accordance with
Article XI.H hereof. Notwithstanding anything herein to the contrary, in the
event that the Notes being redeemed are not delivered to the Company or the
transfer agent prior to the third business day following the Optional Redemption
Date, the redemption of the Notes pursuant to this Article VIII.B shall still be
deemed effective as of the Optional Redemption Date and the Redemption Amount
shall be paid to the Holder being redeemed within five (5) business days of the
date the Notes being redeemed are actually delivered to the Company or the
transfer agent.

            (iv) Notwithstanding the delivery of an Optional Redemption Notice,
a Holder may convert some or a part of the outstanding principal amount of this
Note subject to such Optional Redemption Notice by the delivery prior to the
Optional Redemption Date of a Notice of Conversion to the Corporation pursuant
to the procedures set forth in Article III.B. In the event a Holder would be
precluded from converting any portion of the outstanding principal amount of
this Note subject to an Optional Redemption Notice due to the limitation
contained in Article III.D(ii), the Optional Redemption Date shall automatically
be extended by sixty (60) days.

         C. Definition of Redemption Amount. The "Redemption Amount" with
respect to a Note means an amount equal to:

            V x 110%

where:

         "V" means the aggregate principal amount of the Notes being redeemed
plus all accrued and unpaid interest thereon through the redemption date.

                                  ARTICLE IX.

                                      RANK

         A. The Notes shall rank junior to any indebtedness outstanding as of
the Issue Date as to repayment.

                                       17
<PAGE>

                                   ARTICLE X.

                                 CONSENT RIGHTS

         A. The Company shall not (i) declare or pay any dividends (whether in
cash or stock) or otherwise make any distributions on with respect to the Common
Stock or (ii) create or sell any securities that rank senior to or pari passu
with the Notes without the written consent of the Holders of two-thirds (2/3) of
the principal amount of the Notes.

                                  ARTICLE XI.

                                  MISCELLANEOUS

         A. Failure or Indulgency Not Waiver. No failure or delay on the part of
any Holder in the exercise of any power, right or privilege hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise of any
such power, right or privilege preclude other or further exercise thereof or of
any other right, power or privilege.

         B. Notices. Any notices required or permitted to be given under the
terms of this Note shall be sent by certified or registered mail (return receipt
requested) or delivered personally or by courier or by confirmed telecopy, and
shall be effective five days after being placed in the mail, if mailed, or upon
receipt or refusal of receipt, if delivered personally or by courier or
confirmed telecopy, in each case addressed to a party. The addresses for such
communications shall be:

                     If to the Corporation:

                     InKine Pharmaceutical Company, Inc.
                     1787 Sentry Parkway West
                     Suite 440
                     Blue Bell, PA 19411
                     Telephone:  (215) 283-6850
                     Fax: (215) 283-4602
                     Attn: Chief Executive Officer and Chief Financial Officer

                     with a copy simultaneously transmitted by like means to:

                     Saul Ewing LLP
                     Centre Square West
                     1500 Market Street, 38th Floor
                     Philadelphia, PA 19102-2186
                     Telephone:  (215) 972-7777
                     Fax: (215) 972-7725
                     Attn: Charles C. Zall, Esquire

                                       18
<PAGE>

         If to the Holder, to the address set forth under such Holder's name on
the signature page to the Securities Purchase Agreement executed by such Holder.
Each party shall provide notice to the other parties of any change in address.

         C. Amendment Provision. Except as set forth in Article III.D, this Note
and any provision hereof may only be amended by an instrument in writing signed
by the Corporation and all of the Holders. The term "Note" and all references
thereto, as used throughout this instrument, shall mean this instrument as
originally executed, or if later amended or supplemented, then as so amended or
supplemented.

         D. Assignability; Selling Restrictions. This Note shall be binding upon
the Corporation and its successors and assigns and shall inure to the benefit of
the Holder and its successors and assigns. A Holder may assign its rights
hereunder, in a minimum initial increment of $500,000, to any of its
"affiliates," as that term is defined under the Securities and Exchange Act of
1934, as amended, without the consent of the Company or to any other person or
entity with the consent of the Company, which consent shall not be unreasonably
withheld. In addition, and notwithstanding anything to the contrary contained in
this Note, the Securities Purchase Agreement, the Registration Rights Agreement
or the Warrants, this Note may be pledged and all rights of the Holder under
this Note may be assigned, without further consent of the Company, to a bona
fide pledgee in connection with the Purchasers' margin or brokerage account.

         E. Cost of Collection. If default is made in the payment of this Note,
the Corporation shall pay the Holder hereof costs of collection, including
reasonable attorneys' fees.

         F. Governing Law; Jurisdiction. This Note shall be governed by and
construed in accordance with the laws of the State of New York. The Corporation
irrevocably consents to the jurisdiction of the United States federal courts and
the state courts located in the County of New York, State of New York in any
suit or proceeding based on or arising under this Note and irrevocably agrees
that all claims in respect of such suit or proceeding may be determined in such
courts. The Corporation irrevocably waives the defense of an inconvenient forum
to the maintenance of such suit or proceeding. The Corporation further agrees
that service of process upon the Corporation mailed by first class mail shall be
deemed in every respect effective service of process upon the Corporation in any
such suit or proceeding. Nothing herein shall affect the right of any Holder to
serve process in any other manner permitted by law. The Corporation agrees that
a final non-appealable judgment in any such suit or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on such judgment
or in any other lawful manner.

         G. Denominations. At the request of Holder, upon surrender of this
Note, the Corporation shall promptly issue new Notes in the aggregate
outstanding principal amount hereof, in the form hereof, in such denominations
of at least $250,000 as Holder shall request.

         H. Lost or Stolen Notes. Upon receipt by the Corporation from a Holder
of (i) evidence of the loss, theft, destruction or mutilation of any Note and
(ii) (y) in the case of loss, theft or destruction, of indemnity (without any
bond or other security) reasonably satisfactory to the Corporation, or (z) in
the case of mutilation, upon surrender and cancellation of any Note, the

                                       19
<PAGE>

Corporation shall execute and deliver a new Note of like tenor and date.
However, the Corporation shall not be obligated to reissue such lost or stolen
Note if the Holder contemporaneously requests the Corporation to convert such
Note.

         I. Restrictions on Shares. The shares of Common Stock issuable upon
conversion of this Note or as payment of interest hereunder may not be sold or
transferred unless (i) they first shall have been registered under the
Securities Act and applicable state securities laws, (ii) the Corporation shall
have been furnished with an opinion of legal counsel (in form, substance and
scope customary for opinions in such circumstances and reasonably acceptable to
the Corporation's counsel) to the effect that such sale or transfer is exempt
from the registration requirements of the Securities Act or (iii) they are sold
under Rule 144 under the Act. Except as otherwise provided in the Securities
Purchase Agreement, each certificate for shares of Common Stock issuable upon
conversion of this Note that have not been so registered and that have not been
sold under an exemption that permits removal of the legend, shall bear a legend
substantially in the following form, as appropriate:

            THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
            REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE
            SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR IN ANY OTHER
            JURISDICTION. THE SECURITIES REPRESENTED HEREBY MAY NOT BE OFFERED,
            SOLD OR TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
            STATEMENT FOR THE SECURITIES UNDER APPLICABLE SECURITIES LAWS UNLESS
            OFFERED, SOLD OR TRANSFERRED PURSUANT TO AN AVAILABLE EXEMPTION FROM
            THE REGISTRATION REQUIREMENTS OF THOSE LAWS.

Upon the request of a holder of a certificate representing any shares of Common
Stock issuable upon conversion of this Note or as payment of interest hereunder,
the Corporation shall remove the foregoing legend from the certificate and issue
to such holder a new certificate therefor free of any transfer legend, if (i)
with such request, the Corporation shall have received either (A) an opinion of
counsel, in form, substance and scope customary for opinions in such
circumstances, to the effect that any such legend may be removed from such
certificate, or (B) satisfactory representations from the Holder that the Holder
is eligible to sell such security under Rule 144 or (ii) a registration
statement under the Securities Act covering the resale of such securities is in
effect. Nothing in this Note shall (i) limit the Corporation's obligation under
the Registration Rights Agreement, or (ii) affect in any way the Holder's
obligations to comply with applicable securities laws upon the resale of the
securities referred to herein.

         J. Status as Note Holder. Upon submission of a Notice of Conversion by
a Holder of the Notes, (i) the principal amount of the Notes and the interest
thereon covered thereby (other than any portion of the Notes, if any, which
cannot be converted due to the limitations set forth in Article III.D.) shall be
deemed converted into shares of Common Stock as of the Conversion Date and (ii)
the Holder's rights as a holder of such Notes shall cease and terminate (but
only with respect to that portion of the Notes covered by such conversion),
excepting only the right to receive certificates for such shares of Common Stock

                                       20
<PAGE>

and to any remedies provided herein or otherwise available at law or in equity
to such Holder because of a failure by the Corporation to comply with the terms
of the Notes. Notwithstanding the foregoing, if a Holder has not received
certificates for all shares of Common Stock prior to the tenth trading day after
the expiration of the Delivery Period with respect to a conversion of Notes for
any reason, then (unless the Holder otherwise elects to retain its status as a
holder of Common Stock by so notifying the Corporation within five trading days
after the expiration of such ten trading day period) the portion of the
principal amount and interest thereon subject to such conversion shall be deemed
outstanding under the Notes and the Corporation shall, as soon as practicable,
return the Notes to the Holder. In all cases, the Holder shall retain all of its
rights and remedies for the Corporation's failure to convert the Notes.

         K. Obligation to Cure. If the Corporation is prohibited from issuing
shares of Common Stock to a Holder for any reason, the Corporation shall
immediately notify the Holders of Notes of such occurrence and shall take
immediate action (including, if necessary, seeking the approval of its
shareholders) to eliminate any prohibitions under applicable law or the rules or
regulations of any stock exchange, interdealer quotation system or other
self-regulatory organization with jurisdiction over the Corporation or any of
its securities on the Corporation's ability to issue shares of Common Stock.

         L. Remedies Cumulative. The remedies provided in this Note shall be
cumulative and in addition to all other remedies available under this Note, at
law or in equity (including a decree of specific performance and/or other
injunctive relief), and nothing herein shall limit a Holder's right to pursue
actual damages for any failure by the Corporation to comply with the terms of
this Note. The Corporation acknowledges that a breach by it of its obligations
hereunder will cause irreparable harm to the Holders of the Notes and that the
remedy at law for any such breach may be inadequate. The Corporation therefore
agrees, in the event of any such breach or threatened breach, that the Holders
of the Notes shall be entitled, in addition to all other available remedies, to
an injunction restraining any breach, without the necessity of showing economic
loss and without any bond or other security being required.

         M. Trading Days. For purposes of this Note, the term "trading day"
means any day on which NNM or, if the Common Stock is not then traded on NNM,
the principal United States securities exchange or trading market where the
Common Stock is then listed or traded, is open for trading.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]

                                       21
<PAGE>

         IN WITNESS WHEREOF, the Corporation has caused this Convertible Note to
be executed by its duly authorized officer.

                                             INKINE PHARMACEUTICAL COMPANY, INC.

                                             By:________________________________
                                             Name:
                                             Title:

                                       22
<PAGE>

                                                                       Exhibit 1
                              NOTICE OF CONVERSION

To: InKine Pharmaceutical Company, Inc.
    1787 Sentry Parkway West
    Suite 440
    Blue Bell, PA 19422
    Attn: Chief Executive Officer
    Fax:______________________

The undersigned hereby elects to convert $____________ principal amount of the
Note (the "Conversion"), into shares of common stock ("Common Stock") of InKine
Pharmaceutical Company, Inc. (the "Corporation") according to the conditions of
the Convertible Note dated ____________, 2001 (the "Note"), as of the date
written below. If securities are to be issued in the name of a person other than
the undersigned, the undersigned will pay all transfer taxes payable with
respect thereto. No fee will be charged to the Holder for any conversion, except
for transfer taxes, if any.

The Corporation shall electronically transmit the Common Stock issuable pursuant
to this Notice of Conversion to the account of the undersigned or its nominee
(which is ________________) with DTC through its Deposit Withdrawal Agent
Commission System ("DTC Transfer").

In the event of partial exercise, please reissue an appropriate Note(s) for the
principal balance which shall not have been converted.

Check Box if Applicable:

[ ]  In lieu of receiving the shares of Common Stock issuable pursuant to this
     Notice of Conversion by way of DTC Transfer, the undersigned hereby
     requests that the Corporation issue and deliver to the undersigned or its
     nominee (if applicable) physical certificates representing such shares of
     Common Stock.

 .........   Date of Conversion:_________________________________________________

 .........   Applicable Conversion Price:________________________________________

 .........   Amount of Accrued and Unpaid Interest on the Principal Amount to be
 .........   converted, if any:__________________________________________________

 .........   Default Amount and penalties to be converted, if any:_______________

 .........   Number of Shares of Common Stock to be Issued:______________________

 .........   Signature:__________________________________________________________

 .........   Name:_______________________________________________________________

 .........   Address:____________________________________________________________

                                       23<PAGE>
                                                                     Exhibit 4.4

         VOID AFTER 5:00 P.M., NEW YORK CITY
         TIME, ON JUNE       2003

         THIS WARRANT AND THE SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE
         NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
         "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE OF THE UNITED
         STATES OR ANY OTHER JURISDICTION. THE SECURITIES REPRESENTED HEREBY MAY
         NOT BE OFFERED, SOLD OR TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE
         REGISTRATION STATEMENT FOR THE SECURITIES UNDER APPLICABLE SECURITIES
         LAWS UNLESS OFFERED, SOLD OR TRANSFERRED PURSUANT TO AN AVAILABLE
         EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THOSE LAWS.

                                        Right to Purchase _________ Shares of
                                        Common Stock, par value $.0001 per share

Date:_____________ __, 2001

                       INKINE PHARMACEUTICAL COMPANY, INC.
                             STOCK PURCHASE WARRANT

         THIS CERTIFIES THAT, for value received, __________________, or its
registered assigns, is entitled to purchase from InKine Pharmaceutical Company,
Inc., a corporation organized under the laws of the State of New York (the
"Company"), at any time or from time to time during the period specified in
Section 2 hereof __________ fully paid and nonassessable shares of the Company's
common stock, par value $.0001 per share (the "Common Stock"), at an exercise
price per share (the "Exercise Price") equal to $5.42. The number of shares of
Common Stock purchasable hereunder shall be defined herein as "Warrant Shares".
The Exercise Price is subject to adjustment as provided in Section 4 hereof. The
term "Warrants" means this Warrant and the other warrants of the Company issued
pursuant to that certain Securities Purchase Agreement, dated as of June 15,
2001, by and among the Company and the other signatories thereto (the
"Securities Purchase Agreement").

         This Warrant is subject to the following terms, provisions and
conditions:

         1. Manner of Exercise; Issuance of Certificates; Payment for Shares.
Subject to the provisions hereof, including, without limitation, the limitations
contained in Section 7 hereof, this Warrant may be exercised by the holder
hereof, in whole or in part, by the surrender of this Warrant, together with a
completed exercise agreement in the form attached hereto (the "Exercise
Agreement"), to the Company during normal business hours on any business day at
the Company's principal executive offices (or such other office or agency of the

<PAGE>

Company as it may designate by written notice to the holder hereof), and upon
(i) payment to the Company in cash, by certified or official bank check or by
wire transfer for the account of the Company, of the Exercise Price for the
Warrant Shares specified in the Exercise Agreement or (ii) if the holder is
effectuating a Cashless Exercise (as defined in Section 11(c) hereof) pursuant
to Section 11(c) hereof, delivery to the Company of a written notice of an
election to effect a Cashless Exercise for the Warrant Shares specified in the
Exercise Agreement. The Warrant Shares so purchased shall be deemed to be issued
to the holder hereof or such holder's designee, as the record owner of such
shares, as of the close of business on the date on which this Warrant shall have
been surrendered, the completed Exercise Agreement shall have been delivered,
and payment shall have been made for such shares as set forth above or, if such
date is not a business date, on the next succeeding business date. The Warrant
Shares so purchased, representing the aggregate number of shares specified in
the Exercise Agreement, shall be delivered to the holder hereof within a
reasonable time, not exceeding three (3) business days, after this Warrant shall
have been so exercised (the "Delivery Period"). If the Company's transfer agent
is participating in the Depository Trust Company ("DTC") Fast Automated
Securities Transfer program, and so long as the certificates therefor do not
bear a legend and the holder is not obligated to return such certificate for the
placement of a legend thereon, the Company shall cause its transfer agent to
electronically transmit the Warrant Shares so purchased to the holder by
crediting the account of the holder or its nominee with DTC through its Deposit
Withdrawal Agent Commission system ("DTC Transfer"). If the aforementioned
conditions to a DTC Transfer are not satisfied, the Company shall deliver to the
holder physical certificates representing the Warrant Shares so purchased.
Further, the holder may instruct the Company to deliver to the holder physical
certificates representing the Warrant Shares so purchased in lieu of delivering
such shares by way of DTC Transfer. Any certificates so delivered shall be in
such denominations as may be reasonably requested by the holder hereof, shall be
registered in the name of such holder or such other name as shall be designated
by such holder and, following the date on which the Warrant Shares have been
registered under the Securities Act pursuant to that certain Registration Rights
Agreement, dated as of June 15, 2001, by and between the Company and the other
signatories thereto (the "Registration Rights Agreement") or otherwise may be
sold by the holder pursuant to Rule 144 promulgated under the Securities Act (or
a successor rule), shall not bear any restrictive legend. If this Warrant shall
have been exercised only in part, then the Company shall, at its expense, at the
time of delivery of such certificates, deliver to the holder a new Warrant
representing the number of shares with respect to which this Warrant shall not
then have been exercised.

         If, at any time, a holder of this Warrant submits this Warrant, an
Exercise Agreement and payment to the Company of the Exercise Price for each of
the Warrant Shares specified in the Exercise Agreement (including pursuant to a
Cashless Exercise), and the Company fails for any reason (other than the reasons
contemplated by Sections 7(f) and (g) hereof) to deliver, on or prior to the
fourth business day following the expiration of the Delivery Period for such
exercise, the number of shares of Common Stock to which the holder is entitled
upon such exercise (an "Exercise Default"), then the Company shall pay to the
holder payments ("Exercise Default Payments") for an Exercise Default in the
amount of (a) (N/365), multiplied by (b) the amount by which the Market Price
(as defined in Section 4(l) hereof) on the date the Exercise Agreement giving
rise to the Exercise Default is transmitted in accordance with this Section 1
(the "Exercise Default Date") exceeds the Exercise Price in respect of such
Warrant Shares, multiplied by (c) the number of shares of Common Stock the

                                        2
<PAGE>

Company failed to so deliver in such Exercise Default, multiplied by (d) .18,
where N = the number of days from the Exercise Default Date to the date that the
Company effects the full exercise of this Warrant which gave rise to the
Exercise Default. The accrued Exercise Default Payment for each calendar month
shall be paid in cash which payment shall be made to the holder by the fifth day
of the month following the month in which it has accrued.

            Nothing herein shall limit the holder's right to pursue actual
damages for the Company's failure to maintain a sufficient number of authorized
shares of Common Stock as required pursuant to the terms of Section 3(b) hereof
or to otherwise issue shares of Common Stock upon exercise of this Warrant in
accordance with the terms hereof, and the holder shall have the right to pursue
all remedies available at law or in equity (including a decree of specific
performance and/or injunctive relief).

         2. Period of Exercise. This Warrant is immediately exercisable, at any
time or from time to time on or after the date of initial issuance of this
Warrant (the "Issue Date") and before 5:00 p.m., New York City time, on the
second anniversary of the Issue Date (the "Exercise Period").

         3. Certain Agreements of the Company. The Company hereby covenants and
agrees as follows:

            (a) Shares to be Fully Paid. All Warrant Shares will, upon issuance
in accordance with the terms of this Warrant, be validly issued, fully paid, and
nonassessable and free from all liens, claims and encumbrances.

            (b) Reservation of Shares. During the Exercise Period, the Company
shall at all times have authorized, and reserved for the purpose of issuance
upon exercise of this Warrant, a sufficient number of shares of Common Stock to
provide for the exercise in full of the shares of Common Stock listed on the
face of this Warrant (without giving effect to the limitations on exercise set
forth in Section 7(g) hereof).

            (c) Listing. The Company shall promptly secure the listing of the
shares of Common Stock issuable upon exercise of this Warrant upon each national
securities exchange or automated quotation system, if any, upon which shares of
Common Stock are then listed or become listed (subject to official notice of
issuance upon exercise of this Warrant) and shall maintain, so long as any other
shares of Common Stock shall be so listed, such listing of all shares of Common
Stock from time to time issuable upon the exercise of this Warrant; and the
Company shall so list on each national securities exchange or automated
quotation system, as the case may be, and shall maintain such listing of, any
other shares of capital stock of the Company issuable upon the exercise of this
Warrant if and so long as any shares of the same class shall be listed on such
national securities exchange or automated quotation system.

            (d) Certain Actions Prohibited. The Company will not, by amendment
of its charter or through any reorganization, transfer of assets, consolidation,
merger, dissolution, issue or sale of securities, or any other voluntary action,
avoid or seek to avoid the observance or performance of any of the terms to be
observed or performed by it hereunder, but will at all times in good faith
assist in the carrying out of all the provisions of this Warrant and in the

                                        3
<PAGE>

taking of all such action as may reasonably be requested by the holder of this
Warrant in order to protect the economic benefit inuring to the holder hereof
and the exercise privilege of the holder of this Warrant against dilution or
other impairment, consistent with the tenor and purpose of this Warrant. Without
limiting the generality of the foregoing, the Company (i) will not increase the
par value of any shares of Common Stock receivable upon the exercise of this
Warrant above the Exercise Price then in effect, and (ii) will take all such
actions as may be necessary or appropriate in order that the Company may validly
and legally issue fully paid and nonassessable shares of Common Stock upon the
exercise of this Warrant.

            (e) Successors and Assigns. This Warrant will be binding upon any
entity succeeding to the Company by merger, consolidation, or acquisition of all
or substantially all of the Company's assets.

            (f) Blue Sky Laws. The Company shall, on or before the date of
issuance of any Warrant Shares, take such actions as the Company shall
reasonably determine are necessary to qualify the Warrant Shares for, or obtain
exemption for the Warrant Shares for, sale to the holder of this Warrant upon
the exercise hereof under applicable securities or "blue sky" laws of the states
of the United States, and shall provide evidence of any such action so taken to
the holder of this Warrant prior to such date; provided, however, that the
Company shall not be required in connection therewith or as a condition thereto
to (a) qualify to do business in any jurisdiction where it would not otherwise
be required to qualify but for this Section 3(f), (b) subject itself to general
taxation in any such jurisdiction or (c) file a general consent to service of
process in any such jurisdiction.

         4. Antidilution Provisions. During the Exercise Period, the Exercise
Price hereunder shall be subject to adjustment from time to time as provided in
this Section 4.

         In the event that any adjustment of the Exercise Price as required
herein results in a fraction of a cent, such Exercise Price shall be rounded up
or down to the nearest cent.

            (a) Adjustment of Exercise Price. If pursuant to the Notes issued
pursuant to the Securities Purchase Agreement, there is an adjustment to the
Conversion Price (as such term is defined in the Notes, whether or not such
Notes are still outstanding) pursuant to Article VII thereof, then the Exercise
Price shall be adjusted by an amount equal to 120% of the amount of the
adjustment to the Conversion Price, provided that such adjustment to the
Exercise Price would result in a lower Exercise Price. Such adjustments shall be
made successively whenever required.

            (b) Subdivision or Combination of Common Stock. If the Company, at
any time during the Exercise Period, subdivides (by any stock split, stock
dividend, recapitalization, reorganization, reclassification or otherwise) its
shares of Common Stock into a greater number of shares, then, after the date of
record for effecting such subdivision, the Exercise Price in effect immediately
prior to such subdivision will be proportionately reduced. If the Company, at
any time during the Exercise Period, combines (by reverse stock split,
recapitalization, reorganization, reclassification or otherwise) its shares of
Common Stock into a smaller number of shares, then, after the date of record for
effecting such combination, the Exercise Price in effect immediately prior to
such combination will be proportionately increased.

                                        4
<PAGE>

            (c) Consolidation, Merger or Sale. In case of any consolidation of
the Company with, or merger of the Company into, any other corporation, or in
case of any sale or conveyance of all or substantially all of the assets of the
Company other than in connection with a plan of complete liquidation of the
Company at any time during the Exercise Period, then as a condition of such
consolidation, merger or sale or conveyance, adequate provision will be made
whereby the holder hereof will have the right to acquire and receive upon
exercise of this Warrant in lieu of the shares of Common Stock immediately
theretofore acquirable upon the exercise of this Warrant, such shares of stock,
securities, cash or assets as may be issued or payable with respect to or in
exchange for the number of shares of Common Stock immediately theretofore
acquirable and receivable upon exercise of this Warrant had such consolidation,
merger or sale or conveyance not taken place. In any such case, the Company will
make appropriate provision to insure that the provisions of this Section 4
hereof will thereafter be applicable as nearly as may be in relation to any
shares of stock or securities thereafter deliverable upon the exercise of this
Warrant. The Company will not effect any consolidation, merger or sale or
conveyance unless prior to the consummation thereof, the successor corporation
(if other than the Company) assumes by written instrument the obligations under
this Warrant and the obligations to deliver to the holder hereof such shares of
stock, securities or assets as, in accordance with the foregoing provisions, the
holder may be entitled to acquire. Notwithstanding the foregoing, in the event
of any consolidation of the Company with, or merger of the Company into, any
other corporation, or the sale or conveyance of all or substantially all of the
assets of the Company, at any time during the Exercise Period, where the
consideration consists solely of cash, the holder hereof shall receive, in
connection with such transaction, cash consideration equal to the fair market
value of this Warrant as determined in accordance with customary valuation
methodology used in the investment banking industry.

            (d) Distribution of Assets. In case the Company shall declare or
make any distribution of its assets (or rights to acquire its assets) to holders
of Common Stock as a partial liquidating dividend, stock repurchase by way of
return of capital or otherwise (including any dividend or distribution to the
Company's shareholders of cash or shares (or rights to acquire shares) of
capital stock of a subsidiary) (a "Distribution"), at any time during the
Exercise Period, then the holder hereof shall be entitled upon exercise of this
Warrant for the purchase of any or all of the shares of Common Stock subject
hereto, to receive the amount of such assets (or rights) which would have been
payable to the holder had such holder been the holder of such shares of Common
Stock on the record date for the determination of shareholders entitled to such
Distribution. If the Company distributes rights, warrants, options or any other
form of convertible securities and the right to exercise or convert such
securities would expire in accordance with their terms prior to the expiration
of the Exercise Period, then the terms of such securities shall provide that
such exercise or convertibility right shall remain in effect until 30 days after
the date the holder hereof receives such securities pursuant to the exercise
hereof.

            (e) Notice of Adjustment. Upon the occurrence of any event which
requires any adjustment of the Exercise Price, then, and in each such case, the
Company shall give notice thereof to the holder hereof, which notice shall state
the Exercise Price resulting from such adjustment and the increase or decrease
in the number of Warrant Shares purchasable at such price upon exercise, setting
forth in reasonable detail the method of calculation and the facts upon which
such calculation is based. Such calculation shall be certified by the chief
financial officer of the Company.

                                        5
<PAGE>

            (f) Minimum Adjustment of Exercise Price. No adjustment of the
Exercise Price shall be made in an amount of less than $.01, but any such lesser
adjustment shall be carried forward and shall be made at the time and together
with the next subsequent adjustment which, together with any adjustments so
carried forward, shall amount to not less than $.01.

            (g) No Fractional Shares. No fractional shares of Common Stock are
to be issued upon the exercise of this Warrant, but the Company shall pay a cash
adjustment in respect of any fractional share which would otherwise be issuable
in an amount equal to the same fraction of the Market Price of a share of Common
Stock on the date of such exercise.

            (h) Other Notices. In case at any time:

                (i) the Company shall declare any dividend upon the Common Stock
payable in shares of stock of any class or make any other distribution (other
than dividends or distributions payable in cash out of retained earnings
consistent with the Company's past practices with respect to declaring dividends
and making distributions) to the holders of the Common Stock;

                (ii) the Company shall offer for subscription pro rata to the
holders of the Common Stock any additional shares of stock of any class or other
rights;

                (iii) there shall be any capital reorganization of the Company,
or reclassification of the Common Stock, or consolidation or merger of the
Company with or into, or sale of all or substantially all of its assets to,
another corporation or entity; or

                (iv) there shall be a voluntary or involuntary dissolution,
liquidation or winding up of the Company;

         then, in each such case, the Company shall give to the holder of this
Warrant (a) notice of the date or estimated date on which the books of the
Company shall close or a record shall be taken for determining the holders of
Common Stock entitled to receive any such dividend, distribution, or
subscription rights or for determining the holders of Common Stock entitled to
vote in respect of any such reorganization, reclassification, consolidation,
merger, sale, dissolution, liquidation or winding-up and (b) in the case of any
such reorganization, reclassification, consolidation, merger, sale, dissolution,
liquidation or winding-up, notice of the date (or, if not then known, a
reasonable estimate thereof by the Company) when the same shall take place. Such
notice shall also specify the date on which the holders of Common Stock shall be
entitled to receive such dividend, distribution, or subscription rights or to
exchange their Common Stock for stock or other securities or property
deliverable upon such reorganization, reclassification, consolidation, merger,
sale, dissolution, liquidation, or winding-up, as the case may be. Such notice
shall be given at least thirty (30) days prior to the record date or the date on
which the Company's books are closed in respect thereto. Failure to give any
such notice or any defect therein shall not affect the validity of the
proceedings referred to in clauses (i), (ii), (iii) and (iv) above.
Notwithstanding the foregoing, the Company shall publicly disclose the substance
of any notice delivered hereunder prior to delivery of such notice to the holder
hereof.

            (i) Certain Events. If, at any time during the Exercise Period, any
event occurs of the type contemplated by the adjustment provisions of this

                                        6
<PAGE>

Section 4 but not expressly provided for by such provisions, the Company will
give notice of such event as provided in Section 4(h) hereof, and the Company's
Board of Directors will make an appropriate adjustment in the Exercise Price and
the number of shares of Common Stock acquirable upon exercise of this Warrant at
each such Exercise Price so that the rights of the holder shall be neither
enhanced nor diminished by such event.

         5. Intentionally Omitted.

         6. No Rights or Liabilities as a Shareholder. This Warrant shall not
entitle the holder hereof to any voting rights or other rights as a shareholder
of the Company. No provision of this Warrant, in the absence of affirmative
action by the holder hereof to purchase Warrant Shares, and no mere enumeration
herein of the rights or privileges of the holder hereof, shall give rise to any
liability of such holder for the Exercise Price or as a shareholder of the
Company, whether such liability is asserted by the Company or by creditors of
the Company.

         7. Transfer, Exchange, Redemption and Replacement of Warrant.

            (a) Restriction on Transfer. This Warrant and the rights granted to
the holder hereof are transferable, in whole or in part, upon surrender of this
Warrant, together with a properly executed assignment in the form attached
hereto, at the office or agency of the Company referred to in Section 7(e)
below, provided, however, that any transfer or assignment shall be subject to
the conditions set forth in Sections 7(f) and (g) hereof and to the provisions
of Sections 2(f) and 2(g) of the Securities Purchase Agreement. Each transferee
of this Warrant or any portion thereof shall be bound by the selling
restrictions set forth in Section 4(n) of the Securities Purchase Agreement,
which Section is incorporated herein by reference. Until due presentment for
registration of transfer on the books of the Company, the Company may treat the
registered holder hereof as the owner and holder hereof for all purposes, and
the Company shall not be affected by any notice to the contrary. Notwithstanding
anything to the contrary contained herein, the registration rights described in
Section 8 hereof are assignable only in accordance with the provisions of the
Registration Rights Agreement.

            (b) Warrant Exchangeable for Different Denominations. This Warrant
is exchangeable, upon the surrender hereof by the holder hereof at the office or
agency of the Company referred to in Section 7(e) below, for new Warrants of
like tenor of different denominations representing in the aggregate the right to
purchase the number of shares of Common Stock which may be purchased hereunder,
each of such new Warrants to represent the right to purchase such number of
shares (at the Exercise Price therefor) as shall be designated by the holder
hereof at the time of such surrender.

            (c) Replacement of 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
delivery of an indemnity agreement reasonably satisfactory in form and amount to
the Company, or, in the case of any such mutilation, upon surrender and
cancellation of this Warrant, the Company, at its expense, will execute and
deliver, in lieu thereof, a new Warrant of like tenor.

                                        7
<PAGE>

            (d) Cancellation; Payment of Expenses. Upon the surrender of this
Warrant in connection with any transfer, exchange, or replacement as provided in
this Section 7, this Warrant shall be promptly canceled by the Company. The
Company shall pay all expenses (other than legal expenses, if any, incurred by
the Holder or transferees) and charges payable in connection with the
preparation, execution, and delivery of Warrants pursuant to this Section 7. The
Company shall indemnify and reimburse the holder of this Warrant for all losses
and damages arising as a result of or related to any breach of the terms of this
Warrant, including costs and expenses (including legal fees) incurred by such
holder in connection with the enforcement of its rights hereunder.

            (e) Warrant Register. The Company shall maintain, at its principal
executive offices (or such other office or agency of the Company as it may
designate by notice to the holder hereof), a register for this Warrant, in which
the Company shall record the name and address of the person in whose name this
Warrant has been issued, as well as the name and address of each transferee and
each prior owner of this Warrant.

            (f) Transfer or Exchange Without Registration. If, at the time of
the surrender of this Warrant in connection with any transfer or exchange of
this Warrant, this Warrant (or, in the case of any exercise, the Warrant Shares
issuable hereunder) shall not be registered under the Securities Act and under
applicable state securities or blue sky laws, the Company may require, as a
condition of allowing such transfer or exchange, (i) that the holder or
transferee of this Warrant, as the case may be, furnish to the Company a written
opinion of counsel (which opinion shall be in form, substance and scope
customary for opinions of counsel in comparable transactions) to the effect that
such transfer or exchange may be made without registration under the Securities
Act and under applicable state securities or blue sky laws (the cost of which
shall be borne by the Company if the Company's counsel renders such an opinion),
(ii) that the holder or transferee execute and deliver to the Company an
investment letter in form and substance acceptable to the Company and (iii) that
the transferee be an "accredited investor" as defined in Rule 501(a) promulgated
under the Securities Act; provided that no such opinion, letter, or status as an
"accredited investor" shall be required in connection with a transfer pursuant
to Rule 144 under the Securities Act.

            (g) Additional Restrictions on Exercise or Transfer. In no event
shall the holder hereof have the right to exercise any portion of this Warrant
for shares of Common Stock or to dispose of any portion of this Warrant to the
extent that such right to effect such exercise or disposition would result in
the holder or any of its affiliates beneficially owning more than 4.99% of the
outstanding shares of Common Stock. For purposes of this Section 7(g),
beneficial ownership shall be determined in accordance with Section 13(d) of the
Securities Exchange Act of 1934, as amended, and Regulation 13D-G thereunder.
The restriction contained in this Section 7(g) may not be altered, amended,
deleted or changed in any manner whatsoever unless the holders of a majority of
the outstanding shares of Common Stock and the holder hereof shall approve, in
writing, such alteration, amendment, deletion or change.

         8. Registration Rights. The initial holder of this Warrant (and certain
assignees thereof) is entitled to the benefit of such registration rights in
respect of the Warrant Shares as are set forth in the Registration Rights
Agreement, including the right to assign such rights to certain assignees, as
set forth therein.

                                        8
<PAGE>

         9. Notices. Any notices required or permitted to be given under the
terms of this Warrant shall be sent by certified or registered mail (return
receipt requested) or delivered personally or by courier or by confirmed
telecopy, and shall be effective five days after being placed in the mail, if
mailed, or upon receipt or refusal of receipt, if delivered personally or by
courier, or by confirmed telecopy, in each case addressed to a party. The
addresses for such communications shall be:

                       If to the Company:

                       InKine Pharmaceutical Company, Inc.
                       1787 Sentry Parkway West
                       Building 18, Suite 440
                       Blue Bell, PA  19422
                       Telephone: (215) 283-6850
                       Facsimile:  (215) 283-4600
                       Attn: Chief Executive Officer and Chief Financial Officer

                       with a copy simultaneously transmitted by like means to:

                       Saul Ewing LLP
                       Centre Square West, 38th Floor
                       1500 Market Street
                       Philadelphia, Pennsylvania  19102-2186
                       Telephone: (215) 972-777
                       Facsimile: (215) 972-1934
                       Attn: Charles C. Zall, Esq.

If to the holder, at such address as such holder shall have provided in writing
to the Company, or at such other address as such holder furnishes by notice
given in accordance with this Section 9;

                       with a copy simultaneously transmitted by like means to:

                       Klehr, Harrison, Harvey, Branzburg & Ellers, LLP
                       260 S. Broad Street
                       Philadelphia, Pennsylvania  19102
                       Telephone: (215) 568-6060
                       Facsimile: (215) 568-6630
                       Attn.: Stephen T. Burdumy, Esq.

         10. Governing Law; Jurisdiction. This Warrant shall be governed by and
construed in accordance with the laws of the State of New York. The Company
irrevocably consents to the jurisdiction of the United States federal courts and
state courts located in the County of New York, State of New York in any suit or
proceeding based on or arising under this Warrant and irrevocably agrees that
all claims in respect of such suit or proceeding may be determined in such
courts. The Company irrevocably waives any objection to the laying of venue and

                                        9
<PAGE>

the defense of an inconvenient forum to the maintenance of such suit or
proceeding. The Company further agrees that service of process upon the Company
mailed by certified or registered mail shall be deemed in every respect
effective service of process upon the Company in any such suit or proceeding.
Nothing herein shall affect the holder's right to serve process in any other
manner permitted by law. The Company agrees that a final non-appealable judgment
in any such suit or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on such judgment or in any other lawful manner.

         11. Miscellaneous.

            (a) Amendments. Except as provided in Section 7(g) hereof, this
Warrant and any provision hereof may only be amended by an instrument in writing
signed by the Company and the holder hereof.

            (b) Descriptive Headings. The descriptive headings of the several
Sections of this Warrant are inserted for purposes of reference only, and shall
not affect the meaning or construction of any of the provisions hereof.

            (c) Cashless Exercise. At any time after the first anniversary of
the Issue Date, this Warrant may be exercised at any time during the Exercise
Period by presentation and surrender of this Warrant to the Company at its
principal executive offices with a written notice of the holder's intention to
effect a cashless exercise, including a calculation of the number of shares of
Common Stock to be issued upon such exercise in accordance with the terms hereof
(a "Cashless Exercise"). In the event of a Cashless Exercise, in lieu of paying
the Exercise Price in cash, the holder shall surrender this Warrant for that
number of shares of Common Stock determined by multiplying the number of Warrant
Shares to which it would otherwise be entitled by a fraction, the numerator of
which shall be the difference between the then current Market Price of a share
of the Common Stock on the date of exercise and the Exercise Price, and the
denominator of which shall be the then current Market Price per share of Common
Stock.

            (d) Business Day. For purposes of this Warrant, the term "Business
Day" means any day, other than a Saturday or Sunday or a day on which banking
institutions in the State of New York are authorized or obligated by law,
regulation or executive order to close.

            (e) Limitation on Exercise of Warrant. The exercise of this Warrant
for shares of Common Stock shall be subject to the limitations on exercise
contained in Section 4(o) of the Securities Purchase Agreement. In the event the
holder delivers an Exercise Agreement to the Company that would cause the
Company to be in violation of such limitations, the Company shall issue to the
holder as many shares of Common Stock pursuant to such Exercise Agreement that
it can without violating such limitations and make a cash payment to the holder
within three (3) days of the delivery of such Exercise Agreement equal to the
product of (A)(x) the number of shares of Common Stock that the Company could
not issue to the holder due to such limitations (y) multiplied by the difference
between the Market Price (as defined in the Notes issued pursuant to the
Securities Purchase Agreement) and the Exercise Price and (B) 1.1.

                                       10
<PAGE>

         IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by
its duly authorized officer.

                                                  INKINE PHARMACEUTICAL COMPANY,
                                                  INC.

                                                  By:___________________________
                                                     Name:______________________
                                                     Title:_____________________

                                       11
<PAGE>

                           FORM OF EXERCISE AGREEMENT

         (To be Executed by the Holder in order to Exercise the Warrant)

         To:      InKine Pharmaceutical Company, Inc.
                  1787 Sentry Parkway West
                  Building 18, Suite 440
                  Blue Bell, PA  19422
                  Facsimile:  (215) 283-4600
                  Attn:  Chief Executive Officer

         The undersigned hereby irrevocably exercises the right to purchase
_____________ shares of the Common Stock of InKine Pharmaceutical Company, Inc.,
a corporation organized under the laws of the State of New York (the "Company"),
evidenced by the attached Warrant, and herewith [makes payment of the Exercise
Price with respect to such shares in full][elects to effect a Cashless Exercise
(as defined in Section 11(c) of such Warrant), all in accordance with the
conditions and provisions of said Warrant.

         The undersigned agrees not to offer, sell, transfer or otherwise
dispose of any Common Stock obtained on exercise of the Warrant, except under
circumstances that will not result in a violation of the Securities Act of 1933,
as amended, or any state securities laws.

                  ______ The undersigned requests that the Company cause its
                  transfer agent to electronically transmit the Common Stock
                  issuable pursuant to this Exercise Agreement to the account
                  of the undersigned or its nominee (which is _________________)
                  with DTC through its Deposit Withdrawal Agent Commission
                  System ("DTC Transfer"), provided that such transfer agent
                  participates in the DTC Fast Automated Securities Transfer
                  program.

                  ______ In lieu of receiving the shares of Common Stock
                  issuable pursuant to this Exercise Agreement by way of DTC
                  Transfer, the undersigned hereby requests that the Company
                  cause its transfer agent to issue and deliver to the
                  undersigned physical certificates representing such shares
                  of Common Stock.

         The undersigned requests that a Warrant representing any unexercised
portion hereof be issued, pursuant to the Warrant, in the name of the Holder and
delivered to the undersigned at the address set forth below:

Dated:_________________                    _____________________________________
                                                    Signature of Holder

                                           _____________________________________
                                                   Name of Holder (Print)
                                                   Address:

                                           _____________________________________
                                           _____________________________________

<PAGE>

                                                                   EXHIBIT B
                                                                   to Securities
                                                                        Purchase
                                                                       Agreement

                               FORM OF ASSIGNMENT

         FOR VALUE RECEIVED, the undersigned hereby sells, assigns, and
transfers all the rights of the undersigned under the within Warrant, with
respect to the number of shares of Common Stock covered thereby set forth
hereinbelow, to:

Name of Assignee                    Address                        No. of Shares
----------------                    -------                        -------------

, and hereby irrevocably constitutes and appoints ______________________________
as agent and attorney-in-fact to transfer said Warrant on the books of the
within-named corporation, with full power of substitution in the premises.

Dated: _____________________, ____

In the presence of

__________________

                                     Name:______________________________________

                                     Signature:_________________________________

                                     Title of Signing Officer or Agent (if any):

                                     ___________________________________________

                                      Address:__________________________________
                                              __________________________________
                                              __________________________________

                                      Note: The above signature should
                                            correspond exactly with the name on
                                            the face of the within Warrant.

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