fs1ex4x_iaso.htm


    Exhibit
4.10

     

    Warrant
No. 

     

    PACIFIC
BEACH BIOSCIENCES, INC. 

    COMMON
STOCK WARRANT

     

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

     

    This
certifies that PARAMOUNT CREDIT
PARTNERS, LLC (the "Holder"), its
designees or permitted assigns, subject to the terms and conditions set forth
herein, at any time after the Commencement Date and prior to the Expiration Date
(as such terms are defined below), is entitled to purchase from PACIFIC BEACH BIOSCIENCES, INC.,
a Delaware corporation (the "Company"), that number of fully-paid and
non-assessable shares (subject to adjustment as provided herein) (the "Warrant Shares") of
the Company's Common Stock, $0.001 par value per share (the "Common Stock"), equal
to (i) forty percent (40%) of the principal amount of that certain Senior 10%
Promissory Note dated the date hereof in the principal amount of $2,750,000,
issued by the Company to the Holder (the "Note") pursuant to
that certain Note and Warrant Purchase Agreement dated the date hereof between
the Company and the Holder (the "Purchase Agreement"),
divided by (ii) the lowest price at which equity securities of the Company are
sold in the first Qualified Financing (as defined in the Note) following the
date hereof (the "Lowest Price Paid"),
upon surrender to the Company at its principal office (or at such other location
as the Company may advise the Holder in writing) of this Warrant properly
endorsed with the Form of Subscription attached hereto duly completed and signed
and upon payment of the aggregate Exercise Price (as defined below) for the
number of Warrant Shares for which this Warrant is being exercised determined in
accordance with the provisions hereof. The exercise price (the "Exercise Price") per
Warrant Share issuable pursuant to this Common Stock Warrant shall be equal to
110% of the Lowest Price Paid, payable in accordance with Section 1(b)
hereof.

     

    Notwithstanding
the foregoing, in the event that the Company consummates a merger, share
exchange, or other transaction (or series of related transactions), other than
in connection with a Qualified Financing, in which (i) the Company merges into
or otherwise becomes a wholly-owned subsidiary of a company subject to the
public company reporting requirements of the Securities Exchange Act of 1934, as
amended, and (ii) the aggregate consideration accorded to the Company in such
transaction(s) (the "Reverse Merger
Consideration") is greater than or equal to $10,000,000 (a "Reverse Merger"),
then this Warrant shall be exercisable immediately prior to the Reverse Merger
(and subject to Section 3 hereof following the Reverse Merger) for that number
of Warrant Shares, with an Exercise Price, in each case determined in accordance
with, and on the same terms and conditions, as provided for in the event of a
Qualified Financing above, provided that for purposes thereof, the Lowest Price
Paid shall be deemed equal to the quotient obtained by dividing the (i) Reverse
Merger Consideration less the amount of unpaid principal and accrued interest
under the Note by
(ii) the number of shares of Common Stock outstanding immediately prior to such
Reverse Merger, on a fully diluted basis, but without giving effect to the
conversion of the Notes or any other senior promissory notes of the Company or
any placement warrants that have been issued by the Company issued to the
Placement Agent (as defined in the Purchase Agreement). If any Reverse Merger
Consideration is other than cash, its value will be deemed to be its fair market
value as determined, in good faith, by the Board of Directors of the
Company.

     

    
      
        
        

      

      
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    Notwithstanding
the foregoing, if neither a Qualified Financing nor a Reverse Merger occur on or
before January 15, 2011, then this Warrant will be exercisable for that number
of Warrant Shares equal to forty percent (40%) of the principal amount of the
Note purchased by the original holder divided by $1.00, at a per share exercise
price of $1.00.

     

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

     

    
      1.           Exercise, Issuance of
Certificates.  Subject to Sections 3(d) and 4 hereof, the Holder may
exercise this Warrant, at any time or from time to time, during the period (a)
commencing on the consummation of a Qualified Financing or a Reverse Merger (the
"Commencement
Date"), and (b) expiring at 5:00 p.m. (Eastern Time) on January 15, 2014
(the "Expiration
Date"). The Holder may exercise this Warrant on or prior to the
Expiration Date for all or any part of the Warrant Shares (but not for a
fraction of a share) that may be purchased hereunder, as that number may be
adjusted pursuant to Section 3 of this Warrant. The Company agrees that the
Warrant Shares purchased under this Warrant shall be and are deemed to be issued
to the Holder hereof as the record owner of such Warrant Shares as of the close
of business on the date on which this Warrant shall have been surrendered,
properly endorsed, the completed and executed Form of Subscription delivered,
and payment made for such Warrant Shares (such date, a "Date of Exercise").
Certificates for the Warrant Shares so purchased, together with any other
securities or property to which the Holder hereof is entitled upon such
exercise, shall be delivered to the Holder hereof by the Company at the
Company's expense as soon as practicable after the rights represented by this
Warrant have been so exercised, but in any event not later than ten (10)
business days following the Date of Exercise. In case of a purchase of less than
all the Warrant Shares which may be purchased under this Warrant, the Company
shall cancel this Warrant and execute and deliver to the Holder hereof within a
reasonable time a new Warrant or Warrants of like tenor for the balance of the
Warrant Shares purchasable under the Warrant surrendered upon such purchase.
Each stock certificate so delivered shall be registered in the name of such
Holder and issued with a legend in substantially the form of the legend placed
on the front of this Warrant.

    

     

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

     

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

     

    
      
        
        

      

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

     

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

     

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

     

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

     

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

     

    
      
        
        

      

      
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    (d)  Termination Upon a Sale of
the Company. Notwithstanding any other provision of this Section 3, upon
the consummation of a Sale of the Company (as defined in the Note) prior to, but
not in connection with, a Qualified Financing or Reverse Merger, this Warrant
shall terminate immediately upon such consummation without the opportunity for
exercise. "Sale of the Company" shall mean a transaction (or series of related
transactions) with one or more non-affiliates, pursuant to which such party or
parties acquire (x) capital stock of the Company or the surviving entity
possessing the voting power to elect a majority of the Board of Directors of the
Company or the surviving entity (whether by merger, consolidation, sale or
transfer of the Company's capital stock or otherwise); or (y) all or
substantially all of the Company's assets determined on a consolidated
basis.

     

    4.       Redemption of
Warrants.

     

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

     

    (b) Notice of Redemption.
In the case of any redemption of this Warrant, the Company shall give notice of
such redemption to the Holder hereof as provided in this Section 4(b). Notice of
redemption to the Holder of this Warrant shall be given in person, by recognized
overnight courier, mailed by certified or registered mail, return receipt
requested, or by confirmed facsimile transmission, to the Holder's last address
and/or facsimile of record with the Company not less than twenty (20) days prior
to the date fixed for redemption. Any notice which is given in the manner herein
provided shall be conclusively presumed to have been duly given, whether or not
the Holder receives the notice. Each such notice shall specify the date fixed
for redemption, the place of redemption and the aggregate Redemption Price, and
shall state that payment of the Redemption Price will be made upon surrender of
this Warrant at such place of redemption, and that if not exercised by the close
of business on the date fixed for redemption, the exercise rights of the Warrant
shall expire unless extended by the Company. Such notice shall also state the
current Exercise Price and the date on which the right to exercise the Warrant
will expire unless extended by the Company.

     

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

     

    
      
        
        

      

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

     

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

     

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

     

    8.      
Amendment, Waiver,
etc. Except as expressly provided herein, neither this Warrant nor any
term hereof may be amended, waived, discharged or terminated other than by a
written instrument signed by the party against whom enforcement of any such
amendment, waiver, discharge or termination is sought.

     

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

     

    10.     
Governing Law. This
Warrant shall be construed and enforced in accordance with, and the rights of
the parties shall be governed by, the laws of the State of New York without
regard to the conflicts of laws provisions thereof.

     

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

     

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

     

    
      
        
        

      

      
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    13.     
Successors and
Assigns. This Warrant and the rights evidenced hereby shall inure to the
benefit of and be binding upon the successors of the Company and the successors
and assigns of the Holder.

     

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

     

    Remainder
of Page Intentionally Left Blank; Signature Page Follows

     

    
      
        
        

      

      
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    FORM
OF SUBSCRIPTION

     

    (To be
signed only upon exercise of Warrant)

     

    To:     [COMPANY
NAME]

     

    The
undersigned, the holder of the attached Common Stock Warrant, hereby elects to
exercise the purchase right represented by such Warrant for, and to purchase
thereunder,___________________shares of
Common Stock of [COMPANY NAME] and such holder herewith makes
payment of $____________________________therefor.

    


    The
undersigned requests that certificates for such shares be issued in the name of,
and delivered
to: _____________________

     

           whose address
is: ____________________________________________________________________________________

     

    DATED:_________________________________

     

    _________________________________________________

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

     

    Name:___________________________________________


     

    Title:____________________________________________   

     

    
      
        
        

      

      
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           IN WITNESS WHEREOF,
the Company has caused this Warrant to be duly executed by its
officer,
thereunto duly authorized as of this 15th day of January,
2009.

    


     

    
      
        	 	
                PACIFIC
      BEACH BIOSCIENCES, INC.

              	 
	 	 	 	 
	
                 

              	
                By:
      

              	/s/ J.
      Jay Lobell	 
	 	 	Name:
      J. Jay Lobell	 
	 	 	Title:  	 
	 	 	 	 


      

    

     

    Signature
Page—Common Stock Warrant

     

    
      
        
        

      

      
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