Document:

fs1ex4xix_iaso.htm

    Exhibit
4.19

     

    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 ________________ (the “Holder”), its
designees or permitted assigns, subject to the terms and conditions set forth
herein, at any time after the Commencement Date (as hereinafter defined) and
prior to the Expiration Date (as 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) seventy percent (70%) of the principal amount of that certain Convertible
Promissory Note dated the date hereof in the principal amount of $__________,
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 price at which shares of Common Stock are sold in a
Qualified IPO (as defined below) (the “IPO Price”), 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.  For purposes hereof,
“Qualified IPO” means the consummation of an underwritten initial public
offering by the Company of units consisting of shares of Common Stock and
warrants to purchase Common Stock resulting in aggregate gross cash proceeds
(before commissions or other expenses) to the Company of at least
$10,000,000.  The exercise price (the “Exercise Price”) per
Warrant Share issuable pursuant to this Common Stock Warrant shall be equal to
the exercise price of the warrants issued in a Qualified IPO, payable in
accordance with Section 1(b) hereof.

     

    Notwithstanding
the foregoing, if a Qualified IPO does not occur on or before February 9, 2012
(the “Commencement
Date”), then this Warrant will be exercisable for that number of Warrant
Shares equal to seventy percent (70%) 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 Section 3(d) hereof, the Holder may
exercise this Warrant, at any time or from time to time, during the period (a)
commencing on the earlier to occur of (i) the consummation of a Qualified IPO
and (ii) the Commencement Date, and (b) expiring at 5:00 p.m. (Eastern Time) on
February 9, 2015 (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.

     

    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.

     

    
      
         

      

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

     

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

    

    (d) Termination Upon a Sale of
the Company.  Notwithstanding any other provision of this
Section 3, upon the consummation by the Company (in one or a series of related
transactions) of a merger, consolidation, sale or transfer of more than fifty
percent (50%) of the Company’s capital stock or all or substantially all of the
Company’s assets determined on a consolidated basis, this Warrant shall
terminate ninety (90) days following such consummation; provided that the Holder
has the right to exercise this Warrant pursuant to its terms during such 90-day
period.

    

    4. 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.

     

    
      
         

      

      
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    5. 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.

     

    6. 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.

     

    7. Amendment, Waiver,
etc.  Except as expressly provided herein, neither this Warrant
nor any term hereof may be amended, waived, discharged or terminated other than
by a written instrument signed by the party against whom enforcement of any such
amendment, waiver, discharge or termination is sought; provided, however, that
any provisions hereof may be amended, waived, discharged or terminated upon the
written consent of the Company and the holders of not less than sixty-six and
two-thirds percent (66 2⁄3%), in the aggregate, of the Warrant Shares then
issuable upon exercise of then outstanding warrants of like tenor to this
Warrant issued by the Company in connection with the issuance of Bridge Notes
(as defined in the Note).

     

    8. 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.

     

    9. 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.

     

    10. 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.

     

    11. 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.

     

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

     

    13. 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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    IN
WITNESS WHEREOF, the Company has caused this Warrant to be duly executed by its
officer, thereunto duly authorized as of this ___ day of _____________,
20__.

     

     

    
      	 	PACIFIC BEACH
      BIOSCIENCES, INC.
	 	 
	 	By: ______________________________________________________  
	 	Name:
	 	Title:

    

     

     

     

     

     

     

     

     

    Signature Page - Common Stock Warrant

     

     

     

     

     

    
      
         

      

      
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    FORM
OF SUBSCRIPTION

     

    (To be
signed only upon exercise of Warrant)

     

    To:           Pacific
Beach BioSciences, Inc.

     

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

     

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

     

    whose
address
is:______________________________________________________________________________________________ .

     

    DATED:_________________________________________                                                      

     

     

    
      
        	 	 	(Signature
      must conform in all respects to name 

                of
      Holder as specified on the face of the Warrant)

              
	 	 	 
	 	 	Name:_________________________________________________________   
	 	 	 
	 	 	Title: __________________________________________________________fs1ex4xx_iaso.htm

    Exhibit
4.20

    

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

    

    PACIFIC BEACH BIOSCIENCES,
INC.

     

    Warrant
for the Purchase of Shares of

    Common
Stock

    

    No.

    

     FOR
VALUE RECEIVED, PACIFIC BEACH BIOSCIENCES, INC., a Delaware corporation (the
“Company”), hereby
certifies that Paramount BioCapital, Inc. (“Paramount”) or its permitted
assigns is entitled to purchase from the Company, after determination of the Per
Share Warrant Price (as defined below), up to and including 5:00 p.m. (Eastern
Time) on the date that is the seventh (7th) anniversary of December
14, 2007 (to be referred to herein as the “Initial Closing Date” and the
period following the Initial Closing Date up to and including the seven year
anniversary of the Initial Closing Date to be referred to herein as the “Exercise Period”) that number
of shares of Common Stock (as defined below), at the Per Share Warrant Price,
equal to ten percent (10%) of the aggregate principal amount of the Bridge Notes
sold in the Offering (less any amounts used to repay (i) any Future Advance
Promissory Note or similar instrument between the Company and Paramount
BioSciences, LLC (“PBS”)
or (ii) any Future Advance Promissory Note or similar instrument between the
Company and certain trusts established for the benefit of certain family members
of Dr. Lindsay A. Rosenwald (together, the “Existing Notes”); any amounts
of Existing Notes converted into Bridge Notes sold in the Offering; or amounts
due to Paramount, PBS, or their affiliates as finder’s fees, for services
rendered, or under similar agreements that are repaid in connection with the
Offering (all such deductions, the “Related Party Deductions”))
divided by the Lowest Price Paid (as defined below).  Notwithstanding
the foregoing, if a Qualified Financing (as defined below) does not occur on or
before the second anniversary of the Initial Closing Date, then this Warrant
will be exercisable for that number of shares of Common Stock equal to ten
percent (10%) of the aggregate principal amount of the Bridge Notes sold in the
Offering (less Related Party Deductions) divided by $1.00.  The “Per Share Warrant Price”
shall, subject to adjustment as set forth herein, be equal to one hundred ten
percent (110%) of the Lowest Price Paid, provided, that, if a
Qualified Financing does not occur on or before the second anniversary of the
Initial Closing Date, then, the Per Share Warrant Price shall, subject to
adjustment as set forth herein, equal $1.00.

     

    
      
         

      

      
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    For
purposes of this Warrant, (i) common stock, $0.001 par value per share, of the
Company, is referred to as “Common Stock”; (ii) the shares
of the Common Stock (subject to adjustment as set forth herein) purchasable
hereunder are referred to as the “Warrant Shares”; (iii) the
aggregate purchase price payable for the Warrant Shares purchasable hereunder is
referred to as the “Aggregate
Warrant Price”; (iv) “Qualified Financing” means the
closing of an equity financing or series of related equity financings by the
Company resulting in aggregate gross cash proceeds (before commissions or other
expenses) to the Company of at least $10,000,000; (v) “Lowest Price Paid” means the
lowest price paid per unit of securities issued to investors in a Qualified
Financing; (vi) this “Warrant” means this agreement
evidencing the Holder’s right to purchase Warrant Shares; (vii) the holder of
this Warrant is referred to as the “Holder”; and (viii) the then
Current Market Price per share of the Common Stock (the “Current Market Price”) shall
be deemed to be the last reported sale price of the Common Stock on the Trading
Day (as defined below) immediately prior to a particular date or, in case no
such reported sales take place on such date, the average of the last reported
bid and asked prices of the Common Stock on such date, in either case on the
principal national securities exchange on which the Common Stock is admitted to
trading or listed, or if not listed or admitted to trading on any such exchange,
the per share sale price for the Common Stock in the over-the-counter market as
reported by the National Quotation Bureau or similar organization, or if not so
available, the fair market value of the Common Stock as determined in good faith
by the Company’s Board of Directors.  A “Trading Day” shall mean any
day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time) on
which shares of the Company’s Common Stock are listed or quoted for trading as
reported by Bloomberg L.P.

     

    This
Warrant was originally issued pursuant to an Placement Agency Agreement dated
September 18, 2007 (the “Placement Agency
Agreement”)
between the Company and the Holder in connection with the Offering.

    

    1. Exercise of
Warrant.

     

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

     

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

     

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

     

    
      
         

      

      
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      (A) = the
then Current Market Price;

    

    

    
      (B) = the
Per Share Warrant Price;

         

        
          
            	
                    (
      X) =

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

                  

          

        

      

    

     

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

     

    2. Reservation of Warrant
Shares; Listing.

     

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

     

    
      
         

      

      
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    3. Certain
Adjustments.

     

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

     

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

     

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

     

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

     

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

     

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

     

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

     

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

     

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

     

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

     

    (i) Notwithstanding
any other provision of this Warrant, upon a Sale of the Company (as such term is
defined in the Note) prior to, but not in connection with, a Qualified
Financing, this Warrant shall be exercisable for a number of shares of Common
Stock equal to 10% of the aggregate principal amount of the Bridge Notes (less
Related Party Deductions) divided by the Adjusted Sale Consideration Per Share
(as defined herein) from such Sale of the Company, and the Per Share Warrant
Price shall be equal to 110% of the Adjusted Sale Consideration Per
Share.  “Adjusted
Sale Consideration Per Share” shall mean (A) the Sale Proceeds (as
defined herein) minus an amount equal to 10% of the aggregate principal amount
of the Bridge Notes (less Related Party Deductions), divided by (B) the number
of shares of Common Stock then outstanding, on a fully diluted basis excluding
the Warrant but including any outstanding options and warrants (except for any
options and warrants with regard to which no Sale Proceeds are being distributed
in the Sale).  “Sale
Proceeds” shall mean (i) in the event of a Stock Acquisition (as defined
herein), the cash or securities paid by the acquirer to the Company or the
selling stockholders to acquire such shares; and (ii) in the event of an Asset
Sale (as defined herein), the cash or securities legally available for
distribution to the Company’s stockholders, after creation of adequate reserves
for liabilities of the Company.  “Stock Acquisition” shall mean
a transaction (or series of related transactions) with one or more
non-affiliates, pursuant to which such party or parties acquire 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), and “Asset
Sale” shall mean a transaction (or series of related transactions) with
one or more non-affiliates, pursuant to which such party or parties acquire all
or substantially all of the Company’s assets determined on a consolidated
basis.

     

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

     

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

     

    4. Fully Paid Stock;
Taxes.

     

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

    

    5. Registration Under the
Act.

     

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

     

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

     

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

     

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

     

    6. Investment Intent; Limited
Transferability.

     

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

     

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

     

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

     

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

     

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

     

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

     

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

     

    7. Loss, etc., of
Warrant.

     

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

    

    8. Warrant Holder Not
Stockholder.

     

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

    

    9. Notice.

     

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

    

    (a) the
Company at Pacific Beach Biosciences, Inc., 8910 University Center Lane, Suite
620, San Diego, CA 92121, Attn: President, or other such address as the Company
has designated in writing to the Holder (with a copy to Ellen Corenswet, Esq.,
Covington & Burling LLP, 620 Eighth Avenue, New York, NY 10018, fax: (646)
441-9256) or

     

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

     

    10. Headings.

     

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

     

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

    

    11. Applicable
Law.

     

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

    

    12. Amendment, Waiver,
etc.

     

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

     

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

     

               IN WITNESS WHEREOF, the
Company has caused this Warrant to be signed by the undersigned duly authorized
officer, this 14th day
of December, 2007.

     

    
      	 	PACIFIC BEACH BIOSCIENCES,
      INC.	 
	 	 	 	 
	
               

            	
              By:
      

            	
              /s/
      Matthew Wikler, M.D.

            	 
	 	 	
              Matthew
      Wikler, M.D.

            	 
	 	 	
              President
      and Chief Executive Officer

            	 
	 	 	 	 

    

     

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

     

    SUBSCRIPTION
(cash)

    

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

     

    
      	 Dated:________________________	 	Signature:____________________________
	 	 	Address:_____________________________

    

     

    CASHLESS
EXERCISE

     

    

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

     

    
      	 Dated:________________________	 	Signature:____________________________
	 	 	Address:_____________________________

    

    

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

     

    ASSIGNMENT

    

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

    

    ASSIGNOR:

     

    
      	 Dated:________________________	 	Signature:____________________________
	 	 	Address:_____________________________

    

     

    TRANSFEREE:

     

    
      	 Dated:________________________	 	Signature:____________________________
	 	 	Address:_____________________________

    

     

    PARTIAL
ASSIGNMENT

    

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

    

    ASSIGNOR:

     

    
      	 Dated:________________________	 	Signature:____________________________
	 	 	Address:_____________________________

    

     

    TRANSFEREE:

     

    
      	 Dated:________________________	 	Signature:____________________________
	 	 	Address:_____________________________

    

    

      
        
           

        

        
          13

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