Unassociated Document
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington, D.C.
20549
FORM
8-K
CURRENT
REPORT
Pursuant to Section 13 or
15(d) of the Securities Exchange Act of 1934
Date of
Report (Date of earliest event reported): September 17, 2010
GENESIS
BIOPHARMA, INC.
(Exact
name of registrant as specified in its charter)
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|
|
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Nevada
(State
or other jurisdiction
of
incorporation)
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000-53127
(Commission
File Number)
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75-3254381
(IRS
Employer
Identification
No.)
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1601
N. Sepulveda Blvd., #632
Manhattan
Beach, California
(Address
of principal executive offices)
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90266
(Zip
Code)
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Registrant’s
telephone number, including area code: (866) 963-2220
Not
applicable
(Former
name or former address, if changed since last report.)
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see General Instruction A.2 below):
¨ Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
¨ Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
¨ Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
¨ Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
ITEM
1.01
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ENTRY
INTO A MATERIAL DEFINITIVE
AGREEMENT.
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On September 17, 2010, Genesis
Biopharma, Inc. (the “Company”) closed a private placement offering pursuant to
which it entered into Private Placement Subscription Agreements (the
“Subscription Agreements”) with accredited investors providing for the issuance
and sale, for an aggregate purchase price of $700,000.50, of (i) an aggregate of
933,341 shares of the Company’s common stock (the “Shares”), (ii) Series A
Common Stock Purchase Warrants (the “Series A Warrants”) to purchase an
aggregate of 466,674 shares of the Company’s common stock at an exercise price
of $1.00 per share and (iii) Series B Common Stock Purchase Warrants (together
with the Series A Warrants, the “Warrants”) to purchase an aggregate of 466,674
shares of the Company’s common stock at an exercise price of $1.25 per share.
The Subscription Agreements granted the investors “piggy-back” registration
rights with respect to the Shares and the common stock underlying the Warrants,
pursuant to which the Company agreed, with specified exceptions, to register the
Shares and the common stock underlying the Warrants in the event the Company
determines to register its common stock with the Securities and Exchange
Commission.
The
foregoing description of the Subscription Agreements and the Warrants does not
purport to be complete and is qualified in its entirety by the form of
Subscription Agreement attached hereto as Exhibit 10.1 and the forms of Warrants
attached hereto as Exhibits 4.1 and 4.2, each of which is incorporated herein by
reference.
ITEM
3.02
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UNREGISTERED
SALES OF EQUITY SECURITIES.
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The
information called for by this item is contained in Item 1.01, which is
incorporated herein by reference. The common stock and warrants issued in
connection with the Subscription Agreements were issued in reliance on the
exemptions from registration contained in Section 4(2) of the Securities Act of
1933, as amended, and Regulation S and Rule 506 of Regulation D promulgated
thereunder. Each purchaser represented to the Company that such
purchaser was an “accredited investor” as such term is defined under Regulation
D, and the offering did not involve any form of general solicitation or general
advertising. Each issuance made in reliance on Regulation S was made in an
offshore transaction without directed selling efforts in the United States and
otherwise in compliance with Regulation S.
ITEM
9.01
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FINANCIAL
STATEMENTS AND EXHIBITS.
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(d)
EXHIBITS
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EXHIBIT
NO.
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DESCRIPTION
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4.1
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Form
of Series A Common Stock Purchase Warrant
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4.2
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Form
of Series B Common Stock Purchase Warrant
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10.1
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Form
of Private Placement Subscription
Agreement
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SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
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GENESIS
BIOPHARMA, INC.
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By:
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/s/ Robert Brooke
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Robert
Brooke
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Dated:
September 23, 2010
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Chief
Executive Officer
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EXHIBIT
INDEX
EXHIBIT
NO.
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DESCRIPTION
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4.1
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Form
of Series A Common Stock Purchase Warrant
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4.2
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Form
of Series B Common Stock Purchase Warrant
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10.1
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Form
of Private Placement Subscription
Agreement
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NEITHER
THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS EXERCISABLE HAVE
BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES
COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY,
MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM,
OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS
EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE
SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE
COMPANY. THIS SECURITY AND THE SECURITIES ISSUABLE UPON EXERCISE OF
THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR
OTHER LOAN SECURED BY SUCH SECURITIES.
COMMON
STOCK PURCHASE WARRANT
SERIES
A WARRANT
GENESIS
BIOPHARMA, INC.
Warrant
Shares: ____________
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Initial
Exercise Date: _______________
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THIS
COMMON STOCK PURCHASE WARRANT (the “Warrant”) certifies
that, for value received, _______________________________ (the “Holder”), is
entitled, upon the terms and subject to the limitations on exercise and the
conditions hereinafter set forth, at any time on or after
_________________________ (the “Initial Exercise
Date”) and on or prior to the close of business on
_______________________, 2015 (the “Termination Date”)
but not thereafter, to subscribe for and purchase from Genesis Biopharma, a
_____________ corporation (the “Company”), up to
_______________ shares (the “Warrant Shares”) of
common stock, par value $__________ per share, of the Company (the “Common
Stock”). The purchase price of one share of Common Stock under
this Warrant shall be equal to the Exercise Price, as defined in Section
2(b).
Section
1. Definitions. Capitalized
terms are defined herein.
Section
2. Exercise.
a) Exercise of
Warrant. Exercise of the purchase rights represented by this
Warrant may be made, in whole or in part, at any time or times on or after the
Initial Exercise Date and on or before the Termination Date by delivery to the
Company of a duly executed facsimile copy of the Notice of Exercise Form
annexed hereto (or such other office or agency of the Company as it
may designate by notice in writing to the registered Holder at the address of
such Holder appearing on the books of the Company); and, within 3 Trading Days
of the date said Notice of Exercise is delivered to the Company, the Company
shall have received payment of the aggregate Exercise Price of the
shares thereby purchased by wire transfer or cashier’s check drawn on a United
States bank. Notwithstanding anything herein to the contrary, the
Holder shall not be required to physically surrender this Warrant to the Company
until the Holder has purchased all of the Warrant Shares available hereunder and
the Warrant has been exercised in full, in which case, the Holder shall
surrender this Warrant to the Company for cancellation within 3 Trading Days of
the date the final Notice of Exercise is delivered to the
Company. Partial exercises of this Warrant resulting in purchases of
a portion of the total number of Warrant Shares available hereunder shall have
the effect of lowering the outstanding number of Warrant Shares purchasable
hereunder in an amount equal to the applicable number of Warrant Shares
purchased. The Holder and the Company shall maintain records showing
the number of Warrant Shares purchased and the date of such
purchases. The Company shall deliver any objection to any Notice of
Exercise Form within 1 Business Day of receipt of such notice. In the
event of any dispute or discrepancy, the records of the Holder shall be
controlling and determinative in the absence of manifest error. The Holder and
any assignee, by acceptance of this Warrant, acknowledge and agree that, by
reason of the provisions of this paragraph, following the purchase of a portion
of the Warrant Shares hereunder, the number of Warrant Shares available for
purchase hereunder at any given time may be less than the amount stated on the
face hereof.
b) Exercise
Price. The exercise price per share of the Common Stock under
this Warrant shall be $1.00, subject to adjustment
hereunder (the “Exercise
Price”).
c) Cashless
Exercise. This Warrant may also be exercised at such time by
means of a “cashless exercise” in which the Holder shall be entitled to receive
a certificate for the number of Warrant Shares equal to the quotient obtained by
dividing [(A-B) (X)] by (A), where:
(A)
= the VWAP on the Trading Day immediately preceding the date of such
election;
(B)
= the Exercise Price of this Warrant, as adjusted;
and
(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.
Notwithstanding
anything herein to the contrary, (i) on the Termination Date, this Warrant shall
be automatically exercised via cashless exercise pursuant to this Section 2(c)
and (ii) this Warrant may be exercised via a cashless exercise during the 30
Trading Days immediately prior to the Termination Date if there is no effective
Registration Statement registering, or no current prospectus available for, the
resale of the Warrant Shares by the Holder.
d) Exercise
Limitations The Company shall not effect any exercise of this
Warrant, and a Holder shall not have the right to exercise any
portion of this Warrant, pursuant to Section 2(c) or otherwise, to the extent
that after giving effect to such issuance after exercise as set forth on the
applicable Notice of Exercise, such Holder (together with such Holder’s
Affiliates, and any other person or entity acting as a group together with such
Holder or any of such Holder’s Affiliates), as set forth on the applicable
Notice of Exercise, would beneficially own in excess of the Beneficial Ownership
Limitation (as defined below). For purposes of the foregoing sentence, the
number of shares of Common Stock beneficially owned by such Holder and its
Affiliates shall include the number of shares of Common Stock issuable upon
exercise of this Warrant with respect to which such determination is being made,
but shall exclude the number of shares of Common Stock which would be issuable
upon (A) exercise of the remaining, nonexercised portion of this Warrant
beneficially owned by such Holder or any of its Affiliates and (B) exercise or
conversion of the unexercised or nonconverted portion of any other securities of
the Company (including, without limitation, any other Debentures or Warrants)
subject to a limitation on conversion or exercise analogous to the limitation
contained herein beneficially owned by such Holder or any of its
affiliates. Except as set forth in the preceding sentence, for purposes of
this Section 2(d)(i), beneficial ownership shall be calculated in accordance
with Section 13(d) of the Exchange Act and the rules and regulations promulgated
thereunder, it being acknowledged by a Holder that the Company is not
representing to such Holder that such calculation is in compliance with Section
13(d) of the Exchange Act and such Holder is solely responsible for any
schedules required to be filed in accordance therewith. To the
extent that the limitation contained in this Section 2(d)(i) applies, the
determination of whether this Warrant is exercisable (in relation to other
securities owned by such Holder together with any Affiliates) and of which a
portion of this Warrant is exercisable shall be in the sole discretion of a
Holder, and the submission of a Notice of Exercise shall be deemed to be each
Holder’s determination of whether this Warrant is exercisable (in relation to
other securities owned by such Holder together with any Affiliates) and of which
portion of this Warrant is exercisable, in each case subject to such aggregate
percentage limitation, and the Company shall have no obligation to verify or
confirm the accuracy of such determination. In addition, a
determination as to any group status as contemplated above shall be determined
in accordance with Section 13(d) of the Exchange Act and the rules and
regulations promulgated thereunder. For purposes of this Section
2(d)(i), in determining the number of outstanding shares of Common Stock, a
Holder may rely on the number of outstanding shares of Common Stock as reflected
in (x) the Company’s most recent Form 10-Q or Form 10-K, as the case may be, (y)
a more recent public announcement by the Company or (z) any other notice by the
Company or the Company’s Transfer Agent setting forth the number of shares of
Common Stock outstanding. Upon the written or oral request of a Holder,
the Company shall within two Trading Days confirm orally and in writing to such
Holder the number of shares of Common Stock then outstanding. In any case,
the number of outstanding shares of Common Stock shall be determined after
giving effect to the conversion or exercise of securities of the Company,
including this Warrant, by such Holder or its Affiliates since the date as of
which such number of outstanding shares of Common Stock was
reported. The “Beneficial Ownership
Limitation” shall be 4.99% of the number of shares of the Common Stock
outstanding immediately after giving effect to the issuance of shares of Common
Stock issuable upon exercise of this Warrant. The Beneficial
Ownership Limitation provisions of this Section 2(d)(i) may be waived by such
Holder, at the election of such Holder, upon not less than 61 days’ prior notice
to the Company to change the Beneficial Ownership Limitation to 9.99% of the
number of shares of the Common Stock outstanding immediately after giving effect
to the issuance of shares of Common Stock upon exercise of this Warrant, and the
provisions of this Section 2(d) shall continue to apply. Upon such a
change by a Holder of the Beneficial Ownership Limitation from such 4.99%
limitation to such 9.99% limitation, the Beneficial Ownership Limitation may not
be further waived by such Holder. The provisions of this paragraph
shall be construed and implemented in a manner otherwise than in strict
conformity with the terms of this Section 2(d)(i) to correct this paragraph (or
any portion hereof) which may be defective or inconsistent with the intended
Beneficial Ownership Limitation herein contained or to make changes or
supplements necessary or desirable to properly give effect to such limitation.
The limitations contained in this paragraph shall apply to a successor holder of
this Warrant.
e) Mechanics of
Exercise.
i. Authorization of Warrant
Shares. The Company covenants that all Warrant Shares which
may be issued upon the exercise of the purchase rights represented by this
Warrant will, upon exercise of the purchase rights represented by this Warrant,
be duly authorized, validly issued, fully paid and nonassessable and free from
all taxes, liens and charges created by the Company in respect of the issue
thereof (other than taxes in respect of any transfer occurring contemporaneously
with such issue).
ii. Delivery of Certificates
Upon Exercise. Certificates for shares purchased hereunder
shall be transmitted by the transfer agent of the Company to the Holder by
crediting the account of the Holder’s prime broker with the Depository Trust
Company through its Deposit Withdrawal Agent Commission (“DWAC”) system if the
Company is a participant in such system, and otherwise by physical delivery to
the address specified by the Holder in the Notice of Exercise within 3 Trading
Days from the delivery to the Company of the Notice of Exercise Form, surrender
of this Warrant (if required) and payment of the aggregate Exercise Price as set
forth above (“Warrant
Share Delivery Date”). This Warrant shall be deemed to have
been exercised on the date the Exercise Price is received by the
Company. The Warrant Shares shall be deemed to have been issued, and
Holder or any other person so designated to be named therein shall be deemed to
have become a holder of record of such shares for all purposes, as of the date
the Warrant has been exercised by payment to the Company of the Exercise Price
(or by cashless exercise, if permitted) and all taxes required to be paid by the
Holder, if any, pursuant to Section 2(e)(vii) prior to the issuance of such
shares, have been paid.
iii. Delivery of New Warrants
Upon Exercise. If this Warrant shall have been exercised in
part, the Company shall, at the request of a Holder and upon surrender of this
Warrant certificate, at the time of delivery of the certificate or certificates
representing Warrant Shares, deliver to Holder a new Warrant evidencing the
rights of Holder to purchase the unpurchased Warrant Shares called for by this
Warrant, which new Warrant shall in all other respects be identical with this
Warrant.
iv. Rescission
Rights. If the Company fails to cause its transfer agent to
transmit to the Holder a certificate or certificates representing the Warrant
Shares pursuant to this Section 2(e)(iv) by the Warrant Share Delivery Date,
then the Holder will have the right to rescind such exercise.
v. Compensation for Buy-In on
Failure to Timely Deliver Certificates Upon Exercise. In
addition to any other rights available to the Holder, if the Company fails to
cause its transfer agent to transmit to the Holder a certificate or certificates
representing the Warrant Shares pursuant to an exercise on or before the Warrant
Share Delivery Date, and if after such date the Holder is required by its broker
to purchase (in an open market transaction or otherwise) or the Holder’s
brokerage firm otherwise purchases, shares of Common Stock to deliver in
satisfaction of a sale by the Holder of the Warrant Shares which the Holder
anticipated receiving upon such exercise (a “Buy-In”), then the
Company shall (1) pay in cash to the Holder the amount by which (x) the Holder’s
total purchase price (including brokerage commissions, if any) for the shares of
Common Stock so purchased exceeds (y) the amount obtained by multiplying (A) the
number of Warrant Shares that the Company was required to deliver to the Holder
in connection with the exercise at issue times (B) the price at which the sell
order giving rise to such purchase obligation was executed, and (2) at the
option of the Holder, either reinstate the portion of the Warrant and equivalent
number of Warrant Shares for which such exercise was not honored or deliver to
the Holder the number of shares of Common Stock that would have been issued had
the Company timely complied with its exercise and delivery obligations
hereunder. For example, if the Holder purchases Common Stock having a
total purchase price of $11,000 to cover a Buy-In with respect to an attempted
exercise of shares of Common Stock with an aggregate sale price giving rise to
such purchase obligation of $10,000, under clause (1) of the immediately
preceding sentence the Company shall be required to pay the Holder $1,000. The
Holder shall provide the Company written notice indicating the amounts payable
to the Holder in respect of the Buy-In and, upon request of the Company,
evidence of the amount of such loss. 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.
vi. No Fractional Shares or
Scrip. No fractional shares or scrip representing fractional
shares shall be issued upon the exercise of this Warrant. As to any
fraction of a share which Holder would otherwise be entitled to purchase upon
such exercise, the Company shall at its election, either pay a cash adjustment
in respect of such final fraction in an amount equal to such fraction multiplied
by the Exercise Price or round up to the next whole share.
vii. Charges, Taxes and
Expenses. Issuance of certificates for Warrant Shares shall be
made without charge to the Holder for any issue or transfer tax or other
incidental expense in respect of the issuance of such certificate, all of which
taxes and expenses shall be paid by the Company, and such certificates shall be
issued in the name of the Holder or in such name or names as may be directed by
the Holder; provided, however, that in the
event certificates for Warrant Shares are to be issued in a name other than the
name of the Holder, this Warrant when surrendered for exercise shall be
accompanied by the Assignment Form attached hereto duly executed by the Holder;
and the Company may require, as a condition thereto, the payment of a sum
sufficient to reimburse it for any transfer tax incidental thereto.
viii. Closing of
Books. The Company will not close its stockholder books or
records in any manner which prevents the timely exercise of this Warrant,
pursuant to the terms hereof.
Section
3.
Certain Adjustments.
a) Stock Dividends and
Splits. If the Company, at any time while this Warrant is outstanding:
(A) pays a stock dividend or otherwise make a distribution or distributions on
shares of its Common Stock or any other equity or equity equivalent securities
payable in shares of Common Stock (which, for avoidance of doubt, shall not
include any shares of Common Stock issued by the Company upon exercise of this
Warrant), (B) subdivides outstanding shares of Common Stock into a larger number
of shares, (C) combines (including by way of reverse stock split) outstanding
shares of Common Stock into a smaller number of shares, or (D) issues by
reclassification of shares of the Common Stock any shares of capital stock of
the Company, then in each case the Exercise Price shall be multiplied by a
fraction of which the numerator shall be the number of shares of Common Stock
(excluding treasury shares, if any) outstanding immediately before such event
and of which the denominator shall be the number of shares of Common Stock
outstanding immediately after such event and the number of shares issuable upon
exercise of this Warrant shall be proportionately adjusted. Any
adjustment made pursuant to this Section 3(a) shall become effective immediately
after the record date for the determination of stockholders entitled to receive
such dividend or distribution and shall become effective immediately after the
effective date in the case of a subdivision, combination or
re-classification.
b) Subsequent Equity
Sales. If the Company or any Subsidiary thereof, as applicable, at any
time while this Warrant is outstanding, shall sell or grant any option to
purchase or sell or grant any right to reprice its securities, or otherwise
dispose of or issue (or announce any offer, sale, grant or any option to
purchase or other disposition) any Common Stock or Common Stock Equivalents
entitling any Person to acquire shares of Common Stock, at an effective price
per share less than the then Exercise Price (such lower price, the “Base Share Price” and
such issuances collectively, a “Dilutive Issuance”)
(if the holder of the Common Stock or Common Stock Equivalents so issued shall
at any time, whether by operation of purchase price adjustments, reset
provisions, floating conversion, exercise or exchange prices or otherwise, or
due to warrants, options or rights per share which are issued in connection with
such issuance, be entitled to receive shares of Common Stock at an effective
price per share which is less than the Exercise Price, such issuance shall be
deemed to have occurred for less than the Exercise Price on such date of the
Dilutive Issuance), then the Exercise Price shall be reduced and only reduced to
equal the Base Share Price and the number of Warrant Shares issuable hereunder
shall be increased such that the aggregate Exercise Price payable hereunder,
after taking into account the decrease in the Exercise Price, shall be equal to
the aggregate Exercise Price prior to such adjustment, provided however
that this Exercise Price may not be adjusted below
$0.01. Such adjustment shall be made whenever such Common Stock or
Common Stock Equivalents are issued. Notwithstanding the foregoing,
no adjustments shall be made, paid or issued under this Section 3(b) in respect
of an Exempt Issuance as defined herein. “Exempt Issuance” shall mean
the issuance of up to four million (4,000,000) shares of Common Stock or Common
Stock Equivalents issued or issuable to employees, directors, and/or consultants
pursuant to an equity compensation or similar plan. The Company shall
notify the Holder in writing, no later than the Trading Day following the
issuance of any Common Stock or Common Stock Equivalents subject to this
section, indicating therein the applicable issuance price, or applicable reset
price, exchange price, conversion price and other pricing terms (such notice the
“Dilutive Issuance
Notice”). For purposes of clarification, whether or not the
Company provides a Dilutive Issuance Notice pursuant to this Section 3(b), upon
the occurrence of any Dilutive Issuance, after the date of such Dilutive
Issuance the Holder is entitled to receive a number of Warrant Shares based upon
the Base Share Price regardless of whether the Holder accurately refers to the
Base Share Price in the Notice of Exercise.
c) Subsequent Rights
Offerings. If the Company, at any time while the Warrant is
outstanding, shall issue rights, options or warrants to all holders of Common
Stock (and not to Holders) entitling them to subscribe for or purchase shares of
Common Stock at a price per share less than the VWAP at the record date
mentioned below, then the Exercise Price shall be multiplied by a fraction, of
which the denominator shall be the number of shares of the Common Stock
outstanding on the date of issuance of such rights or warrants plus the number
of additional shares of Common Stock offered for subscription or purchase, and
of which the numerator shall be the number of shares of the Common Stock
outstanding on the date of issuance of such rights or warrants plus the number
of shares which the aggregate offering price of the total number of shares so
offered (assuming receipt by the Company in full of all consideration payable
upon exercise of such rights, options or warrants) would purchase at such
VWAP. Such adjustment shall be made whenever such rights or warrants
are issued, and shall become effective immediately after the record date for the
determination of stockholders entitled to receive such rights, options or
warrants.
d) Pro Rata
Distributions. If the Company, at any time prior to the
Termination Date, shall distribute to all holders of Common Stock (and not to
Holders of the Warrants) evidences of its indebtedness or assets (including cash
and cash dividends) or rights or warrants to subscribe for or purchase any
security other than the Common Stock (which shall be subject to Section 3(b)),
then in each such case the Exercise Price shall be adjusted by multiplying the
Exercise Price in effect immediately prior to the record date fixed for
determination of stockholders entitled to receive such distribution by a
fraction of which the denominator shall be the VWAP determined as of the record
date mentioned above, and of which the numerator shall be such VWAP on such
record date less the then per share fair market value at such record date of the
portion of such assets or evidence of indebtedness so distributed applicable to
one outstanding share of the Common Stock as determined by the Board of
Directors in good faith. In either case the adjustments shall be
described in a statement provided to the Holder of the portion of assets or
evidences of indebtedness so distributed or such subscription rights applicable
to one share of Common Stock. Such adjustment shall be made whenever
any such distribution is made and shall become effective immediately after the
record date mentioned above.
e) Fundamental
Transaction. If, at any time while this Warrant is outstanding, (A) the
Company effects any merger or consolidation of the Company with or into another
Person, (B) the Company effects any sale of all or substantially all of its
assets in one or a series of related transactions, (C) any tender offer or
exchange offer (whether by the Company or another Person) is completed pursuant
to which holders of Common Stock are permitted to tender or exchange their
shares for other securities, cash or property, or (D) the Company effects any
reclassification of the Common Stock or any compulsory share exchange pursuant
to which the Common Stock is effectively converted into or exchanged for other
securities, cash or property (in any such case, a “Fundamental
Transaction”), then, upon any subsequent exercise of this Warrant, the
Holder shall have the right to receive, for each Warrant Share that would have
been issuable upon such exercise immediately prior to the occurrence of such
Fundamental Transaction, at the option of the Holder, (a) upon exercise of this
Warrant, the number of shares of Common Stock of the successor or acquiring
corporation or of the Company, if it is the surviving corporation, and any
additional consideration (the “Alternate
Consideration”) receivable upon or as a result of such reorganization,
reclassification, merger, consolidation or disposition of assets by a Holder of
the number of shares of Common Stock for which this Warrant is exercisable
immediately prior to such event or (b) if the Company is acquired in an all cash
transaction, cash equal to the value of this Warrant as determined in accordance
with the Black-Scholes option pricing formula. For purposes of any
such exercise, the determination of the Exercise Price shall be appropriately
adjusted to apply to such Alternate Consideration based on the amount of
Alternate Consideration issuable in respect of one share of Common Stock in such
Fundamental Transaction, and the Company shall apportion the Exercise Price
among the Alternate Consideration in a reasonable manner reflecting the relative
value of any different components of the Alternate Consideration. If
holders of Common Stock are given any choice as to the securities, cash or
property to be received in a Fundamental Transaction, then the Holder shall be
given the same choice as to the Alternate Consideration it receives upon any
exercise of this Warrant following such Fundamental Transaction. To
the extent necessary to effectuate the foregoing provisions, any successor to
the Company or surviving entity in such Fundamental Transaction shall issue to
the Holder a new warrant consistent with the foregoing provisions and evidencing
the Holder’s right to exercise such warrant into Alternate Consideration. The
terms of any agreement pursuant to which a Fundamental Transaction is effected
shall include terms requiring any such successor or surviving entity to comply
with the provisions of this Section 3(e) and insuring that this Warrant (or any
such replacement security) will be similarly adjusted upon any subsequent
transaction analogous to a Fundamental Transaction.
f)
Calculations. All
calculations under this Section 3 shall be made to the nearest cent or the
nearest 1/100th of a share, as the case may be. For purposes of this Section 3,
the number of shares of Common Stock deemed to be issued and outstanding as of a
given date shall be the sum of the number of shares of Common Stock (excluding
treasury shares, if any) issued and outstanding.
g) Voluntary Adjustment By
Company. The Company may at any time during the term of this Warrant
reduce the then current Exercise Price to any amount and for any period of time
deemed appropriate by the Board of Directors of the Company.
h) Notice to
Holder.
i. Adjustment to Exercise
Price. Whenever the Exercise Price is adjusted pursuant to any provision
of this Section 3, the Company shall promptly mail to the Holder a notice
setting forth the Exercise Price after such adjustment and setting forth a brief
statement of the facts requiring such adjustment. If the Company issues a
variable rate security, the Company shall be deemed to have issued Common Stock
or Common Stock Equivalents at the lowest possible conversion or exercise price
at which such securities may be converted or exercised in the case of any
transaction in which securities are issued at a variable price.
ii. Notice to Allow Exercise by
Holder. If (A) the Company shall declare a dividend (or any other
distribution in whatever form) on the Common Stock; (B) the Company shall
declare a special nonrecurring cash dividend on or a redemption of the Common
Stock; (C) the Company shall authorize the granting to all holders of the Common
Stock rights or warrants to subscribe for or purchase any shares of capital
stock of any class or of any rights; (D) the approval of any stockholders of the
Company shall be required in connection with any reclassification of the Common
Stock, any consolidation or merger to which the Company is a party, any sale or
transfer of all or substantially all of the assets of the Company, of any
compulsory share exchange whereby the Common Stock is converted into other
securities, cash or property; (E) the Company shall authorize the voluntary or
involuntary dissolution, liquidation or winding up of the affairs of the
Company; then, in each case, the Company shall cause to be mailed to the Holder
at its last address as it shall appear upon the Warrant Register of the Company,
at least 20 calendar days prior to the applicable record or effective date
hereinafter specified, a notice stating (x) the date on which a record is to be
taken for the purpose of such dividend, distribution, redemption, rights or
warrants, or if a record is not to be taken, the date as of which the holders of
the Common Stock of record to be entitled to such dividend, distributions,
redemption, rights or warrants are to be determined or (y) the date on which
such reclassification, consolidation, merger, sale, transfer or share exchange
is expected to become effective or close, and the date as of which it is
expected that holders of the Common Stock of record shall be entitled to
exchange their shares of the Common Stock for securities, cash or other property
deliverable upon such reclassification, consolidation, merger, sale, transfer or
share exchange; provided that the failure to mail such notice or any defect
therein or in the mailing thereof shall not affect the validity of the corporate
action required to be specified in such notice. The Holder is
entitled to exercise this Warrant during the 20-day period commencing on the
date of such notice to the effective date of the event triggering such
notice.
Section
4. Transfer of
Warrant.
a) Transferability. Subject
to compliance with any applicable securities laws and the conditions set forth
in Section 4(d) hereof, this Warrant and all rights hereunder (including,
without limitation, any registration rights) are transferable, in whole or in
part, upon surrender of this Warrant at the principal office of the Company or
its designated agent, together with a written assignment of this Warrant
substantially in the form attached hereto duly executed by the Holder or its
agent or attorney and funds sufficient to pay any transfer taxes payable upon
the making of such transfer. Upon such surrender and, if required,
such payment, the Company shall execute and deliver a new Warrant or Warrants in
the name of the assignee or assignees and in the denomination or denominations
specified in such instrument of assignment, and shall issue to the assignor a
new Warrant evidencing the portion of this Warrant not so assigned, and this
Warrant shall promptly be cancelled. A Warrant, if properly assigned,
may be exercised by a new holder for the purchase of Warrant Shares without
having a new Warrant issued.
b) New Warrants. This
Warrant may be divided or combined with other Warrants upon presentation hereof
at the aforesaid office of the Company, together with a written notice
specifying the names and denominations in which new Warrants are to be issued,
signed by the Holder or its agent or attorney. Subject to compliance
with Section 4(a), as to any transfer which may be involved in such division or
combination, the Company shall execute and deliver a new Warrant or Warrants in
exchange for the Warrant or Warrants to be divided or combined in accordance
with such notice.
c) Warrant Register. The
Company shall register this Warrant, upon records to be maintained by the
Company for that purpose (the “Warrant Register”),
in the name of the record Holder hereof from time to time. The
Company may deem and treat the registered Holder of this Warrant as the absolute
owner hereof for the purpose of any exercise hereof or any distribution to the
Holder, and for all other purposes, absent actual notice to the
contrary.
d) Transfer
Restrictions. If, at the time of the surrender of this Warrant in connection with
any transfer of this Warrant, the transfer of this Warrant shall not be
registered pursuant to an effective registration statement under the Securities Act and under applicable state securities or blue sky laws, the
Company may require, as a condition of allowing such transfer (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 may be made without registration under the Securities Act and under applicable state securities
or blue sky laws, (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)(1), (a)(2), (a)(3), (a)(7),
or (a)(8) promulgated under the Securities Act or a “qualified
institutional buyer” as defined in Rule 144A(a) under the Securities
Act.
Section
5. Miscellaneous.
a) No Rights as Shareholder
Until Exercise. This Warrant does not entitle the Holder to
any voting rights or other rights as a shareholder of the Company prior to the
exercise hereof as set forth in Section 2(e)(ii).
b) Loss, Theft, Destruction or
Mutilation of Warrant. The Company covenants that upon receipt by the
Company of evidence reasonably satisfactory to it of the loss, theft,
destruction or mutilation of this Warrant or any stock certificate relating to
the Warrant Shares, and in case of loss, theft or destruction, of indemnity or
security reasonably satisfactory to it (which, in the case of the Warrant, shall
not include the posting of any bond), and upon surrender and cancellation of
such Warrant or stock certificate, if mutilated, the Company will make and
deliver a new Warrant or stock certificate of like tenor and dated as of such
cancellation, in lieu of such Warrant or stock certificate.
c) Saturdays, Sundays,
Holidays, etc. If the last or appointed day for the taking of
any action or the expiration of any right required or granted herein shall not
be a Business Day, then such action may be taken or such right may be exercised
on the next succeeding Business Day.
d) Authorized
Shares.
The
Company covenants that during the period the Warrant is outstanding, it will
reserve from its authorized and unissued Common Stock a sufficient number of
shares to provide for the issuance of the Warrant Shares upon the exercise of
any purchase rights under this Warrant. The Company further covenants
that its issuance of this Warrant shall constitute full authority to its
officers who are charged with the duty of executing stock certificates to
execute and issue the necessary certificates for the Warrant Shares upon the
exercise of the purchase rights under this Warrant. The Company will
take all such reasonable action as may be necessary to assure that such Warrant
Shares may be issued as provided herein without violation of any applicable law
or regulation, or of any requirements of the Trading Market upon which the
Common Stock may be listed.
Except
and to the extent as waived or consented to by the Holder, the Company shall not
by any action, including, without limitation, amending its certificate of
incorporation 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 of this
Warrant, but will at all times in good faith assist in the carrying out of all
such terms and in the taking of all such actions as may be necessary or
appropriate to protect the rights of Holder as set forth in this Warrant against
impairment. Without limiting the generality of the foregoing, the
Company will (a) not increase the par value of any Warrant Shares above the
amount payable therefor upon such exercise immediately prior to such increase in
par value, (b) take all such action as may be necessary or appropriate in order
that the Company may validly and legally issue fully paid and nonassessable
Warrant Shares upon the exercise of this Warrant, and (c) use commercially
reasonable efforts to obtain all such authorizations, exemptions or consents
from any public regulatory body having jurisdiction thereof as may be necessary
to enable the Company to perform its obligations under this
Warrant.
Before
taking any action which would result in an adjustment in the number of Warrant
Shares for which this Warrant is exercisable or in the Exercise Price, the
Company shall obtain all such authorizations or exemptions thereof, or consents
thereto, as may be necessary from any public regulatory body or bodies having
jurisdiction thereof.
e) Jurisdiction. All
questions concerning the construction, validity, enforcement and interpretation
of this Warrant shall be determined in accordance with the provisions of the
Note.
f)
Restrictions. The
Holder acknowledges that the Warrant Shares acquired upon the exercise of this
Warrant, if not registered, will have restrictions upon resale imposed by state
and federal securities laws.
g) Nonwaiver and
Expenses. No course of dealing or any delay or failure to
exercise any right hereunder on the part of Holder shall operate as a waiver of
such right or otherwise prejudice Holder’s rights, powers or remedies,
notwithstanding the fact that all rights hereunder terminate on the Termination
Date. If the Company willfully and knowingly fails to comply with any
provision of this Warrant, which results in any material damages to the Holder,
the Company shall pay to Holder such amounts as shall be sufficient to cover any
costs and expenses including, but not limited to, reasonable attorneys’ fees,
including those of appellate proceedings, incurred by Holder in collecting any
amounts due pursuant hereto or in otherwise enforcing any of its rights, powers
or remedies hereunder.
h) Notices. Any
notice, request or other document required or permitted to be given or delivered
to the Holder by the Company shall be delivered in accordance with the notice
provisions of the Note.
i)
Limitation of
Liability. No provision hereof, in the absence of any
affirmative action by Holder to exercise this Warrant to purchase Warrant
Shares, and no enumeration herein of the rights or privileges of Holder, shall
give rise to any liability of Holder for the purchase price of any Common Stock
or as a stockholder of the Company, whether such liability is asserted by the
Company or by creditors of the Company.
j)
Remedies. Holder,
in addition to being entitled to exercise all rights granted by law, including
recovery of damages, will be entitled to specific performance of its rights
under this Warrant. The Company agrees that monetary damages would
not be adequate compensation for any loss incurred by reason of a breach by it
of the provisions of this Warrant and hereby agrees to waive and not to assert
the defense in any action for specific performance that a remedy at law would be
adequate.
k) Successors and
Assigns. Subject to applicable securities laws, this Warrant
and the rights and obligations evidenced hereby shall inure to the benefit of
and be binding upon the successors of the Company and the successors and
permitted assigns of 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 or holder of Warrant
Shares.
l)
Amendment. This
Warrant may be modified or amended or the provisions hereof waived with the
written consent of the Company and the Holder.
m) Severability. Wherever
possible, each provision of this Warrant shall be interpreted in such manner as
to be effective and valid under applicable law, but if any provision of this
Warrant shall be prohibited by or invalid under applicable law, such provision
shall be ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provisions or the remaining provisions of
this Warrant.
n) Headings. The
headings used in this Warrant are for the convenience of reference only and
shall not, for any purpose, be deemed a part of this Warrant.
********************
IN
WITNESS WHEREOF, the Company has caused this Warrant to be executed by its
officer thereunto duly authorized as of the date first above
indicated.
GENESIS
BIOPHARMA, INC
|
|
|
By:
|
|
|
Name:
Robert Brooke
|
|
Title:
Chief Executive Officer
|
NOTICE
OF EXERCISE
TO: GENESIS
BIOPHARMA, INC
(1) The
undersigned hereby elects to purchase ________ Warrant Shares of the Company
pursuant to the terms of the attached Warrant (only if exercised in full), and
tenders herewith payment of the exercise price in full, together with all
applicable transfer taxes, if any.
(2) Payment
shall take the form of (check applicable box):
¨ in
lawful money of the United States; or
¨ [if
permitted] the cancellation of such number of Warrant Shares as is necessary, in
accordance with the formula set forth in subsection 2(c), to exercise this
Warrant with respect to the maximum number of Warrant Shares purchasable
pursuant to the cashless exercise procedure set forth in subsection
2(c).
(3) Please
issue a certificate or certificates representing said Warrant Shares in the name
of the undersigned or in such other name as is specified below:
_______________________________
The
Warrant Shares shall be delivered to the following DWAC Account Number or by
physical delivery of a certificate to:
_______________________________
_______________________________
_______________________________
(4) Accredited
Investor. The undersigned is an “accredited investor” as
defined in Regulation D promulgated under the Securities Act of 1933, as
amended.
[SIGNATURE
OF HOLDER]
Name of
Investing Entity:
___________________________________________________________________________
Signature of Authorized Signatory of
Investing Entity:
_____________________________________________________
Name of
Authorized Signatory:
_______________________________________________________________________
Title of
Authorized Signatory:
________________________________________________________________________
Date:
___________________________________________________________________________________________
ASSIGNMENT
FORM
(To
assign the foregoing warrant, execute
this form
and supply required information.
Do not
use this form to exercise the warrant.)
FOR VALUE
RECEIVED, [____] all of or [_______] shares of the foregoing Warrant and all
rights evidenced thereby are hereby assigned to
_______________________________________________
whose address is
_______________________________________________________________.
_______________________________________________________________
Dated: ______________,
_______
Holder’s
Signature: _____________________________
Holder’s
Address:
_____________________________
_____________________________
Signature
Guaranteed: ___________________________________________
NOTE: The
signature to this Assignment Form must correspond with the name as it appears on
the face of the Warrant, without alteration or enlargement or any change
whatsoever, and must be guaranteed by a bank or trust
company. Officers of corporations and those acting in a fiduciary or
other representative capacity should file proper evidence of authority to assign
the foregoing Warrant.
NEITHER
THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS EXERCISABLE HAVE
BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES
COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY,
MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM,
OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS
EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE
SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE
COMPANY. THIS SECURITY AND THE SECURITIES ISSUABLE UPON EXERCISE OF
THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR
OTHER LOAN SECURED BY SUCH SECURITIES.
COMMON
STOCK PURCHASE WARRANT
SERIES B
WARRANT
GENESIS
BIOPHARMA, INC.
Warrant
Shares: ____________
|
Initial
Exercise Date: _______________
|
THIS
COMMON STOCK PURCHASE WARRANT (the “Warrant”) certifies
that, for value received, _______________________________ (the “Holder”), is
entitled, upon the terms and subject to the limitations on exercise and the
conditions hereinafter set forth, at any time on or after
_________________________ (the “Initial Exercise
Date”) and on or prior to the close of business on
_______________________, 2015 (the “Termination Date”)
but not thereafter, to subscribe for and purchase from Genesis Biopharma, a
_____________ corporation (the “Company”), up to
_______________ shares (the “Warrant Shares”) of
common stock, par value $__________ per share, of the Company (the “Common
Stock”). The purchase price of one share of Common Stock under
this Warrant shall be equal to the Exercise Price, as defined in Section
2(b).
Section
1. Definitions. Capitalized
terms are defined herein.
Section
2. Exercise.
a) Exercise of
Warrant. Exercise of the purchase rights represented by this
Warrant may be made, in whole or in part, at any time or times on or after the
Initial Exercise Date and on or before the Termination Date by delivery to the
Company of a duly executed facsimile copy of the Notice of Exercise Form
annexed hereto (or such other office or agency of the Company as it
may designate by notice in writing to the registered Holder at the address of
such Holder appearing on the books of the Company); and, within 3 Trading Days
of the date said Notice of Exercise is delivered to the Company, the Company
shall have received payment of the aggregate Exercise Price of the
shares thereby purchased by wire transfer or cashier’s check drawn on a United
States bank. Notwithstanding anything herein to the contrary, the
Holder shall not be required to physically surrender this Warrant to the Company
until the Holder has purchased all of the Warrant Shares available hereunder and
the Warrant has been exercised in full, in which case, the Holder shall
surrender this Warrant to the Company for cancellation within 3 Trading Days of
the date the final Notice of Exercise is delivered to the
Company. Partial exercises of this Warrant resulting in purchases of
a portion of the total number of Warrant Shares available hereunder shall have
the effect of lowering the outstanding number of Warrant Shares purchasable
hereunder in an amount equal to the applicable number of Warrant Shares
purchased. The Holder and the Company shall maintain records showing
the number of Warrant Shares purchased and the date of such
purchases. The Company shall deliver any objection to any Notice of
Exercise Form within 1 Business Day of receipt of such notice. In the
event of any dispute or discrepancy, the records of the Holder shall be
controlling and determinative in the absence of manifest error. The Holder and
any assignee, by acceptance of this Warrant, acknowledge and agree that, by
reason of the provisions of this paragraph, following the purchase of a portion
of the Warrant Shares hereunder, the number of Warrant Shares available for
purchase hereunder at any given time may be less than the amount stated on the
face hereof.
b) Exercise
Price. The exercise price per share of the Common Stock under
this Warrant shall be $1.25, subject to adjustment
hereunder (the “Exercise
Price”).
c) Cashless
Exercise. This Warrant may also be exercised at such time by
means of a “cashless exercise” in which the Holder shall be entitled to receive
a certificate for the number of Warrant Shares equal to the quotient obtained by
dividing [(A-B) (X)] by (A), where:
(A)
= the VWAP on the Trading Day immediately preceding the date of such
election;
(B)
= the Exercise Price of this Warrant, as adjusted;
and
(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.
Notwithstanding
anything herein to the contrary, (i) on the Termination Date, this Warrant shall
be automatically exercised via cashless exercise pursuant to this Section 2(c)
and (ii) this Warrant may be exercised via a cashless exercise during the 30
Trading Days immediately prior to the Termination Date if there is no effective
Registration Statement registering, or no current prospectus available for, the
resale of the Warrant Shares by the Holder.
d) Exercise
Limitations The Company shall not effect any exercise of this
Warrant, and a Holder shall not have the right to exercise any
portion of this Warrant, pursuant to Section 2(c) or otherwise, to the extent
that after giving effect to such issuance after exercise as set forth on the
applicable Notice of Exercise, such Holder (together with such Holder’s
Affiliates, and any other person or entity acting as a group together with such
Holder or any of such Holder’s Affiliates), as set forth on the applicable
Notice of Exercise, would beneficially own in excess of the Beneficial Ownership
Limitation (as defined below). For purposes of the foregoing sentence, the
number of shares of Common Stock beneficially owned by such Holder and its
Affiliates shall include the number of shares of Common Stock issuable upon
exercise of this Warrant with respect to which such determination is being made,
but shall exclude the number of shares of Common Stock which would be issuable
upon (A) exercise of the remaining, nonexercised portion of this Warrant
beneficially owned by such Holder or any of its Affiliates and (B) exercise or
conversion of the unexercised or nonconverted portion of any other securities of
the Company (including, without limitation, any other Debentures or Warrants)
subject to a limitation on conversion or exercise analogous to the limitation
contained herein beneficially owned by such Holder or any of its
affiliates. Except as set forth in the preceding sentence, for purposes of
this Section 2(d)(i), beneficial ownership shall be calculated in accordance
with Section 13(d) of the Exchange Act and the rules and regulations promulgated
thereunder, it being acknowledged by a Holder that the Company is not
representing to such Holder that such calculation is in compliance with Section
13(d) of the Exchange Act and such Holder is solely responsible for any
schedules required to be filed in accordance therewith. To the
extent that the limitation contained in this Section 2(d)(i) applies, the
determination of whether this Warrant is exercisable (in relation to other
securities owned by such Holder together with any Affiliates) and of which a
portion of this Warrant is exercisable shall be in the sole discretion of a
Holder, and the submission of a Notice of Exercise shall be deemed to be each
Holder’s determination of whether this Warrant is exercisable (in relation to
other securities owned by such Holder together with any Affiliates) and of which
portion of this Warrant is exercisable, in each case subject to such aggregate
percentage limitation, and the Company shall have no obligation to verify or
confirm the accuracy of such determination. In addition, a
determination as to any group status as contemplated above shall be determined
in accordance with Section 13(d) of the Exchange Act and the rules and
regulations promulgated thereunder. For purposes of this Section
2(d)(i), in determining the number of outstanding shares of Common Stock, a
Holder may rely on the number of outstanding shares of Common Stock as reflected
in (x) the Company’s most recent Form 10-Q or Form 10-K, as the case may be, (y)
a more recent public announcement by the Company or (z) any other notice by the
Company or the Company’s Transfer Agent setting forth the number of shares of
Common Stock outstanding. Upon the written or oral request of a Holder,
the Company shall within two Trading Days confirm orally and in writing to such
Holder the number of shares of Common Stock then outstanding. In any case,
the number of outstanding shares of Common Stock shall be determined after
giving effect to the conversion or exercise of securities of the Company,
including this Warrant, by such Holder or its Affiliates since the date as of
which such number of outstanding shares of Common Stock was
reported. The “Beneficial Ownership
Limitation” shall be 4.99% of the number of shares of the Common Stock
outstanding immediately after giving effect to the issuance of shares of Common
Stock issuable upon exercise of this Warrant. The Beneficial
Ownership Limitation provisions of this Section 2(d)(i) may be waived by such
Holder, at the election of such Holder, upon not less than 61 days’ prior notice
to the Company to change the Beneficial Ownership Limitation to 9.99% of the
number of shares of the Common Stock outstanding immediately after giving effect
to the issuance of shares of Common Stock upon exercise of this Warrant, and the
provisions of this Section 2(d) shall continue to apply. Upon such a
change by a Holder of the Beneficial Ownership Limitation from such 4.99%
limitation to such 9.99% limitation, the Beneficial Ownership Limitation may not
be further waived by such Holder. The provisions of this paragraph
shall be construed and implemented in a manner otherwise than in strict
conformity with the terms of this Section 2(d)(i) to correct this paragraph (or
any portion hereof) which may be defective or inconsistent with the intended
Beneficial Ownership Limitation herein contained or to make changes or
supplements necessary or desirable to properly give effect to such limitation.
The limitations contained in this paragraph shall apply to a successor holder of
this Warrant.
e) Mechanics of
Exercise.
i. Authorization of Warrant
Shares. The Company covenants that all Warrant Shares which
may be issued upon the exercise of the purchase rights represented by this
Warrant will, upon exercise of the purchase rights represented by this Warrant,
be duly authorized, validly issued, fully paid and nonassessable and free from
all taxes, liens and charges created by the Company in respect of the issue
thereof (other than taxes in respect of any transfer occurring contemporaneously
with such issue).
ii. Delivery of Certificates
Upon Exercise. Certificates for shares purchased hereunder
shall be transmitted by the transfer agent of the Company to the Holder by
crediting the account of the Holder’s prime broker with the Depository Trust
Company through its Deposit Withdrawal Agent Commission (“DWAC”) system if the
Company is a participant in such system, and otherwise by physical delivery to
the address specified by the Holder in the Notice of Exercise within 3 Trading
Days from the delivery to the Company of the Notice of Exercise Form, surrender
of this Warrant (if required) and payment of the aggregate Exercise Price as set
forth above (“Warrant
Share Delivery Date”). This Warrant shall be deemed to have
been exercised on the date the Exercise Price is received by the
Company. The Warrant Shares shall be deemed to have been issued, and
Holder or any other person so designated to be named therein shall be deemed to
have become a holder of record of such shares for all purposes, as of the date
the Warrant has been exercised by payment to the Company of the Exercise Price
(or by cashless exercise, if permitted) and all taxes required to be paid by the
Holder, if any, pursuant to Section 2(e)(vii) prior to the issuance of such
shares, have been paid.
iii. Delivery of New Warrants
Upon Exercise. If this Warrant shall have been exercised in
part, the Company shall, at the request of a Holder and upon surrender of this
Warrant certificate, at the time of delivery of the certificate or certificates
representing Warrant Shares, deliver to Holder a new Warrant evidencing the
rights of Holder to purchase the unpurchased Warrant Shares called for by this
Warrant, which new Warrant shall in all other respects be identical with this
Warrant.
iv. Rescission
Rights. If the Company fails to cause its transfer agent to
transmit to the Holder a certificate or certificates representing the Warrant
Shares pursuant to this Section 2(e)(iv) by the Warrant Share Delivery Date,
then the Holder will have the right to rescind such exercise.
v. Compensation for Buy-In on
Failure to Timely Deliver Certificates Upon Exercise. In
addition to any other rights available to the Holder, if the Company fails to
cause its transfer agent to transmit to the Holder a certificate or certificates
representing the Warrant Shares pursuant to an exercise on or before the Warrant
Share Delivery Date, and if after such date the Holder is required by its broker
to purchase (in an open market transaction or otherwise) or the Holder’s
brokerage firm otherwise purchases, shares of Common Stock to deliver in
satisfaction of a sale by the Holder of the Warrant Shares which the Holder
anticipated receiving upon such exercise (a “Buy-In”), then the
Company shall (1) pay in cash to the Holder the amount by which (x) the Holder’s
total purchase price (including brokerage commissions, if any) for the shares of
Common Stock so purchased exceeds (y) the amount obtained by multiplying (A) the
number of Warrant Shares that the Company was required to deliver to the Holder
in connection with the exercise at issue times (B) the price at which the sell
order giving rise to such purchase obligation was executed, and (2) at the
option of the Holder, either reinstate the portion of the Warrant and equivalent
number of Warrant Shares for which such exercise was not honored or deliver to
the Holder the number of shares of Common Stock that would have been issued had
the Company timely complied with its exercise and delivery obligations
hereunder. For example, if the Holder purchases Common Stock having a
total purchase price of $11,000 to cover a Buy-In with respect to an attempted
exercise of shares of Common Stock with an aggregate sale price giving rise to
such purchase obligation of $10,000, under clause (1) of the immediately
preceding sentence the Company shall be required to pay the Holder $1,000. The
Holder shall provide the Company written notice indicating the amounts payable
to the Holder in respect of the Buy-In and, upon request of the Company,
evidence of the amount of such loss. 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.
vi. No Fractional Shares or
Scrip. No fractional shares or scrip representing fractional
shares shall be issued upon the exercise of this Warrant. As to any
fraction of a share which Holder would otherwise be entitled to purchase upon
such exercise, the Company shall at its election, either pay a cash adjustment
in respect of such final fraction in an amount equal to such fraction multiplied
by the Exercise Price or round up to the next whole share.
vii. Charges, Taxes and
Expenses. Issuance of certificates for Warrant Shares shall be
made without charge to the Holder for any issue or transfer tax or other
incidental expense in respect of the issuance of such certificate, all of which
taxes and expenses shall be paid by the Company, and such certificates shall be
issued in the name of the Holder or in such name or names as may be directed by
the Holder; provided, however, that in the
event certificates for Warrant Shares are to be issued in a name other than the
name of the Holder, this Warrant when surrendered for exercise shall be
accompanied by the Assignment Form attached hereto duly executed by the Holder;
and the Company may require, as a condition thereto, the payment of a sum
sufficient to reimburse it for any transfer tax incidental thereto.
viii. Closing of
Books. The Company will not close its stockholder books or
records in any manner which prevents the timely exercise of this Warrant,
pursuant to the terms hereof.
Section
3.
Certain Adjustments.
a) Stock Dividends and
Splits. If the Company, at any time while this Warrant is outstanding:
(A) pays a stock dividend or otherwise make a distribution or distributions on
shares of its Common Stock or any other equity or equity equivalent securities
payable in shares of Common Stock (which, for avoidance of doubt, shall not
include any shares of Common Stock issued by the Company upon exercise of this
Warrant), (B) subdivides outstanding shares of Common Stock into a larger number
of shares, (C) combines (including by way of reverse stock split) outstanding
shares of Common Stock into a smaller number of shares, or (D) issues by
reclassification of shares of the Common Stock any shares of capital stock of
the Company, then in each case the Exercise Price shall be multiplied by a
fraction of which the numerator shall be the number of shares of Common Stock
(excluding treasury shares, if any) outstanding immediately before such event
and of which the denominator shall be the number of shares of Common Stock
outstanding immediately after such event and the number of shares issuable upon
exercise of this Warrant shall be proportionately adjusted. Any
adjustment made pursuant to this Section 3(a) shall become effective immediately
after the record date for the determination of stockholders entitled to receive
such dividend or distribution and shall become effective immediately after the
effective date in the case of a subdivision, combination or
re-classification.
b) Subsequent Equity
Sales. If the Company or any Subsidiary thereof, as applicable, at any
time while this Warrant is outstanding, shall sell or grant any option to
purchase or sell or grant any right to reprice its securities, or otherwise
dispose of or issue (or announce any offer, sale, grant or any option to
purchase or other disposition) any Common Stock or Common Stock Equivalents
entitling any Person to acquire shares of Common Stock, at an effective price
per share less than the then Exercise Price (such lower price, the “Base Share Price” and
such issuances collectively, a “Dilutive Issuance”)
(if the holder of the Common Stock or Common Stock Equivalents so issued shall
at any time, whether by operation of purchase price adjustments, reset
provisions, floating conversion, exercise or exchange prices or otherwise, or
due to warrants, options or rights per share which are issued in connection with
such issuance, be entitled to receive shares of Common Stock at an effective
price per share which is less than the Exercise Price, such issuance shall be
deemed to have occurred for less than the Exercise Price on such date of the
Dilutive Issuance), then the Exercise Price shall be reduced and only reduced to
equal the Base Share Price and the number of Warrant Shares issuable hereunder
shall be increased such that the aggregate Exercise Price payable hereunder,
after taking into account the decrease in the Exercise Price, shall be equal to
the aggregate Exercise Price prior to such adjustment, provided however
that this Exercise Price may not be adjusted below
$0.01. Such adjustment shall be made whenever such Common Stock or
Common Stock Equivalents are issued. Notwithstanding the foregoing,
no adjustments shall be made, paid or issued under this Section 3(b) in respect
of an Exempt Issuance as defined herein. “Exempt Issuance” shall mean
the issuance of up to four million (4,000,000) shares of Common Stock or Common
Stock Equivalents issued or issuable to employees, directors, and/or consultants
pursuant to an equity compensation or similar plan. The Company shall
notify the Holder in writing, no later than the Trading Day following the
issuance of any Common Stock or Common Stock Equivalents subject to this
section, indicating therein the applicable issuance price, or applicable reset
price, exchange price, conversion price and other pricing terms (such notice the
“Dilutive Issuance
Notice”). For purposes of clarification, whether or not the
Company provides a Dilutive Issuance Notice pursuant to this Section 3(b), upon
the occurrence of any Dilutive Issuance, after the date of such Dilutive
Issuance the Holder is entitled to receive a number of Warrant Shares based upon
the Base Share Price regardless of whether the Holder accurately refers to the
Base Share Price in the Notice of Exercise.
c) Subsequent Rights
Offerings. If the Company, at any time while the Warrant is
outstanding, shall issue rights, options or warrants to all holders of Common
Stock (and not to Holders) entitling them to subscribe for or purchase shares of
Common Stock at a price per share less than the VWAP at the record date
mentioned below, then the Exercise Price shall be multiplied by a fraction, of
which the denominator shall be the number of shares of the Common Stock
outstanding on the date of issuance of such rights or warrants plus the number
of additional shares of Common Stock offered for subscription or purchase, and
of which the numerator shall be the number of shares of the Common Stock
outstanding on the date of issuance of such rights or warrants plus the number
of shares which the aggregate offering price of the total number of shares so
offered (assuming receipt by the Company in full of all consideration payable
upon exercise of such rights, options or warrants) would purchase at such
VWAP. Such adjustment shall be made whenever such rights or warrants
are issued, and shall become effective immediately after the record date for the
determination of stockholders entitled to receive such rights, options or
warrants.
d) Pro Rata
Distributions. If the Company, at any time prior to the
Termination Date, shall distribute to all holders of Common Stock (and not to
Holders of the Warrants) evidences of its indebtedness or assets (including cash
and cash dividends) or rights or warrants to subscribe for or purchase any
security other than the Common Stock (which shall be subject to Section 3(b)),
then in each such case the Exercise Price shall be adjusted by multiplying the
Exercise Price in effect immediately prior to the record date fixed for
determination of stockholders entitled to receive such distribution by a
fraction of which the denominator shall be the VWAP determined as of the record
date mentioned above, and of which the numerator shall be such VWAP on such
record date less the then per share fair market value at such record date of the
portion of such assets or evidence of indebtedness so distributed applicable to
one outstanding share of the Common Stock as determined by the Board of
Directors in good faith. In either case the adjustments shall be
described in a statement provided to the Holder of the portion of assets or
evidences of indebtedness so distributed or such subscription rights applicable
to one share of Common Stock. Such adjustment shall be made whenever
any such distribution is made and shall become effective immediately after the
record date mentioned above.
e) Fundamental
Transaction. If, at any time while this Warrant is outstanding, (A) the
Company effects any merger or consolidation of the Company with or into another
Person, (B) the Company effects any sale of all or substantially all of its
assets in one or a series of related transactions, (C) any tender offer or
exchange offer (whether by the Company or another Person) is completed pursuant
to which holders of Common Stock are permitted to tender or exchange their
shares for other securities, cash or property, or (D) the Company effects any
reclassification of the Common Stock or any compulsory share exchange pursuant
to which the Common Stock is effectively converted into or exchanged for other
securities, cash or property (in any such case, a “Fundamental
Transaction”), then, upon any subsequent exercise of this Warrant, the
Holder shall have the right to receive, for each Warrant Share that would have
been issuable upon such exercise immediately prior to the occurrence of such
Fundamental Transaction, at the option of the Holder, (a) upon exercise of this
Warrant, the number of shares of Common Stock of the successor or acquiring
corporation or of the Company, if it is the surviving corporation, and any
additional consideration (the “Alternate
Consideration”) receivable upon or as a result of such reorganization,
reclassification, merger, consolidation or disposition of assets by a Holder of
the number of shares of Common Stock for which this Warrant is exercisable
immediately prior to such event or (b) if the Company is acquired in an all cash
transaction, cash equal to the value of this Warrant as determined in accordance
with the Black-Scholes option pricing formula. For purposes of any
such exercise, the determination of the Exercise Price shall be appropriately
adjusted to apply to such Alternate Consideration based on the amount of
Alternate Consideration issuable in respect of one share of Common Stock in such
Fundamental Transaction, and the Company shall apportion the Exercise Price
among the Alternate Consideration in a reasonable manner reflecting the relative
value of any different components of the Alternate Consideration. If
holders of Common Stock are given any choice as to the securities, cash or
property to be received in a Fundamental Transaction, then the Holder shall be
given the same choice as to the Alternate Consideration it receives upon any
exercise of this Warrant following such Fundamental Transaction. To
the extent necessary to effectuate the foregoing provisions, any successor to
the Company or surviving entity in such Fundamental Transaction shall issue to
the Holder a new warrant consistent with the foregoing provisions and evidencing
the Holder’s right to exercise such warrant into Alternate Consideration. The
terms of any agreement pursuant to which a Fundamental Transaction is effected
shall include terms requiring any such successor or surviving entity to comply
with the provisions of this Section 3(e) and insuring that this Warrant (or any
such replacement security) will be similarly adjusted upon any subsequent
transaction analogous to a Fundamental Transaction.
f)
Calculations. All
calculations under this Section 3 shall be made to the nearest cent or the
nearest 1/100th of a share, as the case may be. For purposes of this Section 3,
the number of shares of Common Stock deemed to be issued and outstanding as of a
given date shall be the sum of the number of shares of Common Stock (excluding
treasury shares, if any) issued and outstanding.
g) Voluntary Adjustment By
Company. The Company may at any time during the term of this Warrant
reduce the then current Exercise Price to any amount and for any period of time
deemed appropriate by the Board of Directors of the Company.
h) Notice to
Holder.
i. Adjustment to Exercise
Price. Whenever the Exercise Price is adjusted pursuant to any provision
of this Section 3, the Company shall promptly mail to the Holder a notice
setting forth the Exercise Price after such adjustment and setting forth a brief
statement of the facts requiring such adjustment. If the Company issues a
variable rate security, the Company shall be deemed to have issued Common Stock
or Common Stock Equivalents at the lowest possible conversion or exercise price
at which such securities may be converted or exercised in the case of any
transaction in which securities are issued at a variable price.
ii. Notice to Allow Exercise by
Holder. If (A) the Company shall declare a dividend (or any other
distribution in whatever form) on the Common Stock; (B) the Company shall
declare a special nonrecurring cash dividend on or a redemption of the Common
Stock; (C) the Company shall authorize the granting to all holders of the Common
Stock rights or warrants to subscribe for or purchase any shares of capital
stock of any class or of any rights; (D) the approval of any stockholders of the
Company shall be required in connection with any reclassification of the Common
Stock, any consolidation or merger to which the Company is a party, any sale or
transfer of all or substantially all of the assets of the Company, of any
compulsory share exchange whereby the Common Stock is converted into other
securities, cash or property; (E) the Company shall authorize the voluntary or
involuntary dissolution, liquidation or winding up of the affairs of the
Company; then, in each case, the Company shall cause to be mailed to the Holder
at its last address as it shall appear upon the Warrant Register of the Company,
at least 20 calendar days prior to the applicable record or effective date
hereinafter specified, a notice stating (x) the date on which a record is to be
taken for the purpose of such dividend, distribution, redemption, rights or
warrants, or if a record is not to be taken, the date as of which the holders of
the Common Stock of record to be entitled to such dividend, distributions,
redemption, rights or warrants are to be determined or (y) the date on which
such reclassification, consolidation, merger, sale, transfer or share exchange
is expected to become effective or close, and the date as of which it is
expected that holders of the Common Stock of record shall be entitled to
exchange their shares of the Common Stock for securities, cash or other property
deliverable upon such reclassification, consolidation, merger, sale, transfer or
share exchange; provided that the failure to mail such notice or any defect
therein or in the mailing thereof shall not affect the validity of the corporate
action required to be specified in such notice. The Holder is
entitled to exercise this Warrant during the 20-day period commencing on the
date of such notice to the effective date of the event triggering such
notice.
Section
4. Transfer of
Warrant.
a) Transferability. Subject
to compliance with any applicable securities laws and the conditions set forth
in Section 4(d) hereof, this Warrant and all rights hereunder (including,
without limitation, any registration rights) are transferable, in whole or in
part, upon surrender of this Warrant at the principal office of the Company or
its designated agent, together with a written assignment of this Warrant
substantially in the form attached hereto duly executed by the Holder or its
agent or attorney and funds sufficient to pay any transfer taxes payable upon
the making of such transfer. Upon such surrender and, if required,
such payment, the Company shall execute and deliver a new Warrant or Warrants in
the name of the assignee or assignees and in the denomination or denominations
specified in such instrument of assignment, and shall issue to the assignor a
new Warrant evidencing the portion of this Warrant not so assigned, and this
Warrant shall promptly be cancelled. A Warrant, if properly assigned,
may be exercised by a new holder for the purchase of Warrant Shares without
having a new Warrant issued.
b) New Warrants. This
Warrant may be divided or combined with other Warrants upon presentation hereof
at the aforesaid office of the Company, together with a written notice
specifying the names and denominations in which new Warrants are to be issued,
signed by the Holder or its agent or attorney. Subject to compliance
with Section 4(a), as to any transfer which may be involved in such division or
combination, the Company shall execute and deliver a new Warrant or Warrants in
exchange for the Warrant or Warrants to be divided or combined in accordance
with such notice.
c) Warrant Register. The
Company shall register this Warrant, upon records to be maintained by the
Company for that purpose (the “Warrant Register”),
in the name of the record Holder hereof from time to time. The
Company may deem and treat the registered Holder of this Warrant as the absolute
owner hereof for the purpose of any exercise hereof or any distribution to the
Holder, and for all other purposes, absent actual notice to the
contrary.
d) Transfer
Restrictions. If, at the time of the surrender of this Warrant in connection with
any transfer of this Warrant, the transfer of this Warrant shall not be
registered pursuant to an effective registration statement under the Securities Act and under applicable state securities or blue sky laws, the
Company may require, as a condition of allowing such transfer (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 may be made without registration under the Securities Act and under applicable state securities
or blue sky laws, (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)(1), (a)(2), (a)(3), (a)(7),
or (a)(8) promulgated under the Securities Act or a “qualified
institutional buyer” as defined in Rule 144A(a) under the Securities
Act.
Section
5. Miscellaneous.
a) No Rights as Shareholder
Until Exercise. This Warrant does not entitle the Holder to
any voting rights or other rights as a shareholder of the Company prior to the
exercise hereof as set forth in Section 2(e)(ii).
b) Loss, Theft, Destruction or
Mutilation of Warrant. The Company covenants that upon receipt by the
Company of evidence reasonably satisfactory to it of the loss, theft,
destruction or mutilation of this Warrant or any stock certificate relating to
the Warrant Shares, and in case of loss, theft or destruction, of indemnity or
security reasonably satisfactory to it (which, in the case of the Warrant, shall
not include the posting of any bond), and upon surrender and cancellation of
such Warrant or stock certificate, if mutilated, the Company will make and
deliver a new Warrant or stock certificate of like tenor and dated as of such
cancellation, in lieu of such Warrant or stock certificate.
c) Saturdays, Sundays,
Holidays, etc. If the last or appointed day for the taking of
any action or the expiration of any right required or granted herein shall not
be a Business Day, then such action may be taken or such right may be exercised
on the next succeeding Business Day.
d) Authorized
Shares.
The
Company covenants that during the period the Warrant is outstanding, it will
reserve from its authorized and unissued Common Stock a sufficient number of
shares to provide for the issuance of the Warrant Shares upon the exercise of
any purchase rights under this Warrant. The Company further covenants
that its issuance of this Warrant shall constitute full authority to its
officers who are charged with the duty of executing stock certificates to
execute and issue the necessary certificates for the Warrant Shares upon the
exercise of the purchase rights under this Warrant. The Company will
take all such reasonable action as may be necessary to assure that such Warrant
Shares may be issued as provided herein without violation of any applicable law
or regulation, or of any requirements of the Trading Market upon which the
Common Stock may be listed.
Except
and to the extent as waived or consented to by the Holder, the Company shall not
by any action, including, without limitation, amending its certificate of
incorporation 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 of this
Warrant, but will at all times in good faith assist in the carrying out of all
such terms and in the taking of all such actions as may be necessary or
appropriate to protect the rights of Holder as set forth in this Warrant against
impairment. Without limiting the generality of the foregoing, the
Company will (a) not increase the par value of any Warrant Shares above the
amount payable therefor upon such exercise immediately prior to such increase in
par value, (b) take all such action as may be necessary or appropriate in order
that the Company may validly and legally issue fully paid and nonassessable
Warrant Shares upon the exercise of this Warrant, and (c) use commercially
reasonable efforts to obtain all such authorizations, exemptions or consents
from any public regulatory body having jurisdiction thereof as may be necessary
to enable the Company to perform its obligations under this
Warrant.
Before
taking any action which would result in an adjustment in the number of Warrant
Shares for which this Warrant is exercisable or in the Exercise Price, the
Company shall obtain all such authorizations or exemptions thereof, or consents
thereto, as may be necessary from any public regulatory body or bodies having
jurisdiction thereof.
e) Jurisdiction. All
questions concerning the construction, validity, enforcement and interpretation
of this Warrant shall be determined in accordance with the provisions of the
Note.
f)
Restrictions. The
Holder acknowledges that the Warrant Shares acquired upon the exercise of this
Warrant, if not registered, will have restrictions upon resale imposed by state
and federal securities laws.
g) Nonwaiver and
Expenses. No course of dealing or any delay or failure to
exercise any right hereunder on the part of Holder shall operate as a waiver of
such right or otherwise prejudice Holder’s rights, powers or remedies,
notwithstanding the fact that all rights hereunder terminate on the Termination
Date. If the Company willfully and knowingly fails to comply with any
provision of this Warrant, which results in any material damages to the Holder,
the Company shall pay to Holder such amounts as shall be sufficient to cover any
costs and expenses including, but not limited to, reasonable attorneys’ fees,
including those of appellate proceedings, incurred by Holder in collecting any
amounts due pursuant hereto or in otherwise enforcing any of its rights, powers
or remedies hereunder.
h) Notices. Any
notice, request or other document required or permitted to be given or delivered
to the Holder by the Company shall be delivered in accordance with the notice
provisions of the Note.
i)
Limitation of
Liability. No provision hereof, in the absence of any
affirmative action by Holder to exercise this Warrant to purchase Warrant
Shares, and no enumeration herein of the rights or privileges of Holder, shall
give rise to any liability of Holder for the purchase price of any Common Stock
or as a stockholder of the Company, whether such liability is asserted by the
Company or by creditors of the Company.
j)
Remedies. Holder,
in addition to being entitled to exercise all rights granted by law, including
recovery of damages, will be entitled to specific performance of its rights
under this Warrant. The Company agrees that monetary damages would
not be adequate compensation for any loss incurred by reason of a breach by it
of the provisions of this Warrant and hereby agrees to waive and not to assert
the defense in any action for specific performance that a remedy at law would be
adequate.
k) Successors and
Assigns. Subject to applicable securities laws, this Warrant
and the rights and obligations evidenced hereby shall inure to the benefit of
and be binding upon the successors of the Company and the successors and
permitted assigns of 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 or holder of Warrant
Shares.
l)
Amendment. This
Warrant may be modified or amended or the provisions hereof waived with the
written consent of the Company and the Holder.
m) Severability. Wherever
possible, each provision of this Warrant shall be interpreted in such manner as
to be effective and valid under applicable law, but if any provision of this
Warrant shall be prohibited by or invalid under applicable law, such provision
shall be ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provisions or the remaining provisions of
this Warrant.
n) Headings. The
headings used in this Warrant are for the convenience of reference only and
shall not, for any purpose, be deemed a part of this Warrant.
********************
IN
WITNESS WHEREOF, the Company has caused this Warrant to be executed by its
officer thereunto duly authorized as of the date first above
indicated.
GENESIS
BIOPHARMA, INC
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By:
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Name:
Robert Brooke
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Title:
Chief Executive Officer
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NOTICE
OF EXERCISE
TO: GENESIS
BIOPHARMA, INC
(1) The
undersigned hereby elects to purchase ________ Warrant Shares of the Company
pursuant to the terms of the attached Warrant (only if exercised in full), and
tenders herewith payment of the exercise price in full, together with all
applicable transfer taxes, if any.
(2) Payment
shall take the form of (check applicable box):
¨ in
lawful money of the United States; or
¨ [if
permitted] the cancellation of such number of Warrant Shares as is necessary, in
accordance with the formula set forth in subsection 2(c), to exercise this
Warrant with respect to the maximum number of Warrant Shares purchasable
pursuant to the cashless exercise procedure set forth in subsection
2(c).
(3) Please
issue a certificate or certificates representing said Warrant Shares in the name
of the undersigned or in such other name as is specified below:
_______________________________
The
Warrant Shares shall be delivered to the following DWAC Account Number or by
physical delivery of a certificate to:
_______________________________
_______________________________
_______________________________
(4) Accredited
Investor. The undersigned is an “accredited investor” as
defined in Regulation D promulgated under the Securities Act of 1933, as
amended.
[SIGNATURE
OF HOLDER]
Name of
Investing Entity:
___________________________________________________________________________
Signature of Authorized Signatory of
Investing Entity:
_____________________________________________________
Name of
Authorized Signatory:
_______________________________________________________________________
Title of
Authorized Signatory:
________________________________________________________________________
Date:
___________________________________________________________________________________________
ASSIGNMENT
FORM
(To
assign the foregoing warrant, execute
this form
and supply required information.
Do not
use this form to exercise the warrant.)
FOR VALUE
RECEIVED, [____] all of or [_______] shares of the foregoing Warrant and all
rights evidenced thereby are hereby assigned to
_______________________________________________
whose address is
_______________________________________________________________.
_______________________________________________________________
Dated: ______________,
_______
Holder’s
Signature: _____________________________
Holder’s
Address:
_____________________________
_____________________________
Signature
Guaranteed: ___________________________________________
NOTE: The
signature to this Assignment Form must correspond with the name as it appears on
the face of the Warrant, without alteration or enlargement or any change
whatsoever, and must be guaranteed by a bank or trust
company. Officers of corporations and those acting in a fiduciary or
other representative capacity should file proper evidence of authority to assign
the foregoing Warrant.
Unassociated Document
NONE
OF THE SECURITIES TO WHICH THIS SUBSCRIPTION AGREEMENT RELATES HAVE BEEN
REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”), OR ANY U.S. STATE SECURITIES LAWS, AND, UNLESS SO REGISTERED,
NONE MAY BE OFFERED OR SOLD, DIRECTLY OR INDIRECTLY, IN THE UNITED STATES OR TO
U.S. PERSONS (AS DEFINED HEREIN) EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF
REGULATION S UNDER THE SECURITIES ACT, PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT, OR PURSUANT TO AN AVAILABLE EXEMPTION FROM,
OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT AND IN EACH CASE ONLY IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS. IN ADDITION, HEDGING TRANSACTIONS INVOLVING THE SECURITIES MAY
NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE SECURITIES ACT.
PRIVATE
PLACEMENT SUBSCRIPTION AGREEMENT
TO:
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GENESIS
BIOPHARMA, INC.
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(FORMERLY
FREIGHT MANAGEMENT CORP.)
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Purchase of Common
Stock
1.1 The
undersigned (the “Subscriber”) hereby irrevocably subscribes for and agrees to
purchase Securities, consisting of 1 share of common stock of Genesis Biopharma,
Inc., a Nevada corporation (the “Company” ) (the “Shares”) and, for every 2
shares purchased, one Series A Warrant under the terms of the Series A Warrant
attached hereto and one Series B Warrant under the terms of the Series B Warrant
attached hereto ( the Series A Warrants and Series B Warrants are collectively
referred to as the “Warrants” and the Shares and Warrants are collectively
referred to as the “Securities”), at a purchase price of $0.75 per share ), at a
subscription price of $0.75 per Share, for a total purchase price of US$___________
(the “Subscription Proceeds”), which is tendered herewith, on the basis of the
representations and warranties and subject to the terms and conditions set forth
herein (such subscription and agreement to purchase being the
“Subscription”).
1.2 The
Subscription may be rejected in whole or in part by the Company, in its sole and
absolute discretion for any cause or for no cause. Subject to the
terms hereof, the Subscription will be effective upon its acceptance by the
Company.
1.3 Unless
otherwise provided, all dollar amounts referred to in this Subscription
Agreement are in lawful money of the United States of America.
1.4 The
Subscriber acknowledges that the offering of Shares and Warrants contemplated
hereby is part of a private placement by the Company of up to an aggregate
subscription level of $700,000 (the “Offering”). Notwithstanding the
foregoing, the Company reserves the right to increase the subscription
level.
2.1 The
Subscription Proceeds must accompany this Subscription and shall be wired
directly to the Company in accordance with the wire instructions attached hereto
as Schedule
A.
2.2 In
the event that this Subscription Agreement is not accepted by the Company for
whatever reason within 30 days of the delivery of an executed Subscription
Agreement by the Subscriber, this Subscription Agreement, the Subscription
Proceeds and any other documents delivered in connection herewith will be
returned to the Subscriber at the address of the Subscriber as set forth in this
Subscription Agreement.
3.
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DOCUMENTS REQUIRED
FROM SUBSCRIBER
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3.1 The
Subscriber must complete, sign and return to the Company or its legal counsel,
as directed by the Company, an executed copy of this Subscription
Agreement.
3.2 The
Subscriber shall complete, sign and return to the Company as soon as possible,
on request by the Company, any documents, questionnaires, notices and
undertakings as the Company may require to comply with applicable securities
laws or any regulatory authorities.
4.1 Closing
of the offering of the Shares and Warrants (the “Closing”) shall occur on or
before September 15th, 2010,
or on such other date as may be determined by the Company (the “Closing Date”),
and may occur in multiple closings as the Company may determine.
5.
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REPRESENTATIONS AND
WARRANTIES OF THE
SUBSCRIBER
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5.1 The
Subscriber hereby makes the following representations and warranties to the
Company:
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(a)
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The
Subscriber understands that the Shares the Warrants and the common stock
issuable upon exercise of the Warrants (the “Securities”) have not been
registered under the Securities Act, or any state securities laws, in
reliance upon exemptions from regulation for non-public
offerings. The Subscriber understands that the Shares or any
interest therein may not be, and agrees that the Securities or any
interest therein will not be, resold or otherwise disposed of by the
undersigned unless the Securities are subsequently registered under the
Securities Act and under appropriate state securities laws or unless the
Company receives an opinion of counsel satisfactory to it that an
exemption from registration is
available;
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(b)
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The
Subscriber is acquiring the Securities for investment for its own account,
not as a nominee or agent, and not with the view to, or for resale in
connection with, any distribution thereof, and that such Investor has no
present intention of selling, granting any participation in, or otherwise
distributing the same. The Subscriber further represents that
it does not have any contract, undertaking, agreement or arrangement with
any person or entity to sell, transfer or grant participation to such
person or entity or to any third person or entity with respect to any of
the Securities;
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(c)
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The
Subscriber, or its purchaser representative, within the meaning of
Regulation D, Rule 501(h), promulgated by the Securities and Exchange
Commission (its “Purchaser Representative”), has substantial experience in
evaluating and investing in private placement transactions of securities
in companies similar to the Company and acknowledges that the Subscriber
or its Purchaser Representative, can protect its own
interests. The Subscriber or its Purchaser Representative has
such knowledge and experience in financial and business matters so that
the Subscriber or its Purchaser Representative is capable of evaluating
the merits and risks of its investment in the
Company;
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(d)
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The
Subscriber understands and acknowledges that an investment in the Company
is highly speculative and involves substantial risks. The
Subscriber can bear the economic risk of the Subscriber’s investment and
is able, without impairing the Subscriber’s financial condition, to hold
the Securities for an indefinite period of time and to suffer a complete
loss of such Investor’s investment;
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(e)
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The
Subscriber has had an opportunity to ask questions of, and receive answers
from, the officers of the Company concerning the Subscription Agreement,
the exhibits and schedules attached hereto and thereto and the
transactions contemplated by the Subscription Agreement, as well as the
Company’s business, management and financial affairs, which questions were
answered to its satisfaction. The Subscriber believes that it
has received all the information such Investor considers necessary or
appropriate for deciding whether to purchase the
Securities. The Subscriber understands that such discussions,
as well as any information issued by the Company, were intended to
describe certain aspects of the Company’s business and prospects, but were
not necessarily a thorough or exhaustive description. The
Subscriber acknowledges that any business plans prepared by the Company
have been, and continue to be, subject to change and that any projections
included in such business plans or otherwise are necessarily speculative
in nature, and it can be expected that some or all of the assumptions
underlying the projections will not materialize or will vary significantly
from actual results. The Subscriber also acknowledges that it
is relying solely on its own counsel and not on any statements or
representations of the Company or its agents for legal advice with respect
to this investment;
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(f)
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The
Subscriber is an “accredited investor” within the meaning of Regulation D,
Rule 501(a), promulgated by the Securities and Exchange Commission under
the Securities Act and shall submit to the Company such further assurances
of such status as may be reasonably requested by the
Company.;
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(g)
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The
residency of the Subscriber (or, in the case of a partnership or
corporation, such entity’s principal place of business) is correctly set
forth on the Subscriber’s signature page to this Subscription
Agreement;
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(h)
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The
Subscriber has all requisite power and authority to execute and deliver
the Subscription Agreement, to purchase the Securities hereunder and to
carry out and perform its obligations under the terms of the Subscription
Agreement. All action on the part of the Subscriber necessary
for the authorization, execution, delivery and performance of the
Subscription Agreement, and the performance of all of the Subscriber’s
obligations under the Subscription Agreement, has been taken or will be
taken prior to the Closing;
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(i)
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The
Agreement, when executed and delivered by the Subscriber, will constitute
valid and legally binding obligations of the Subscriber, enforceable in
accordance with their terms except: (i) to the extent that any
indemnification provisions contained herein may be limited by applicable
law and principles of public policy, (ii) as limited by applicable
bankruptcy, insolvency, reorganization, moratorium and other laws of
general application affecting enforcement of creditors’ rights generally,
and (iii) as limited by laws relating to the availability of specific
performance, injunctive relief or other equitable remedies or by general
principles of equity;
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(j)
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No
consent, approval, authorization, order, filing, registration or
qualification of or with any court, governmental authority or third person
is required to be obtained by the Subscriber in connection with the
execution and delivery of the Subscription Agreement by the Subscriber or
the performance of the Subscriber’s obligations
hereunder;
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(k)
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The
Subscriber has reviewed with its own tax advisors the U.S. federal, state,
local and foreign tax consequences of this investment and the transactions
contemplated by the Subscription Agreement. With respect to
such matters, the Subscriber relies solely on such advisors and not on any
statements or representations of the Company or any of its agents, written
or oral. The Subscriber understands that it (and not the
Company) shall be responsible for its own tax liability that may arise as
a result of this investment or the transactions contemplated by the
Subscription Agreement;
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(l)
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the
Subscriber is not aware of any advertisement of any of the Securities and
is not acquiring the Securities as a result of any form of general
solicitation or general advertising including advertisements, articles,
notices or other communications published in any newspaper, magazine or
similar media or broadcast over radio or television, or any seminar or
meeting whose attendees have been invited by general solicitation or
general advertising; and
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(m)
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The
Subscriber has been informed of and understands the
following:
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(i)
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There
are substantial restrictions on the transferability of the
Securities;
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(ii)
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No
federal or state agency has made any finding or determination as to the
fairness for public investment, nor any recommendation nor endorsement, of
the Securities;
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(n)
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None
of the following information has ever been represented, guaranteed, or
warranted to the Subscriber, expressly or by implication by any broker,
the Company, or agent or employee of the foregoing, or by any other
person:
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(i)
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The
approximate or exact length of time that the Subscriber will be required
to remain a holder of the
Securities;
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(ii)
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The
amount of consideration, profit, or loss to be realized, if any, as a
result of an investment in the
Company;
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(iii)
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That
the past performance or experience of the Company, its officers,
directors, associates, agents, affiliates, or employees or any other
person will in any way indicate or predict economic results in connection
with the plan of operations of the Company or the return on the
investment;
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(o)
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The
Subscriber has not distributed any information relating to this investment
to anyone other than his purchaser representative, if any, and no other
person except such personal representative and the
Subscriber has used this
information;
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5.2 Each
Subscriber who is a Non-U.S. person (as defined herein) hereby represents and
warrants to the Company as follows:
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(a)
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This
Agreement is made by the Company with such Subscriber who is a Non-U.S.
person in reliance upon such Non-U.S. person’s representations, warranties
and covenants made in this Section
5.2;
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(b)
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Such
Non-U.S. person has been advised and acknowledges
that:
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(i)
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the
Securities have not been registered under the Securities Act, the
securities laws of any state of the United States or the securities laws
of any other country;
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(ii)
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in
issuing and selling the Securities to such Non-U.S. person pursuant
hereto, the Company is relying upon the “safe harbor” provided by
Regulation S and/or on Section 4(2) under the Securities
Act;
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(iii)
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it
is a condition to the availability of the Regulation S “safe harbor” that
the Securities not be offered or sold in the United States or to a U.S.
person until the expiration of a period of one year following the Closing
Date; notwithstanding the foregoing, prior to the expiration of one year
after the Closing (the “Restricted Period”), the Securities may be offered
and sold by the holder thereof only if such offer and sale is made in
compliance with the terms of this Agreement and either: (A) if
the offer or sale is within the United States or to or for the account of
a U.S. person (as such terms are defined in Regulation S), the securities
are offered and sold pursuant to an effective registration statement or
pursuant to Rule 144 under the Securities Act or pursuant to an exemption
from the registration requirements of the Securities Act; or (B) the offer
and sale is outside the United States and to other than a U.S.
person;
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(iv)
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As
used herein, the term “United States” means and includes the United States
of America, its territories and possessions, any State of the United
States, and the District of Columbia, and the term “U.S. person” (as
defined in Regulation S) means:
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A.
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a
natural person resident in the United
States;
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B.
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any
partnership or corporation organized or incorporated under the laws of the
United States;
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C.
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any
estate of which any executor or administrator is a U.S.
person;
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D.
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any
trust of which any trustee is a U.S.
person;
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E.
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any
agency or branch of a foreign entity located in the United
States;
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F.
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any
nondiscretionary account or similar account (other than an estate or
trust) held by a dealer or other fiduciary for the benefit or account of a
U.S. person;
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G.
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any
discretionary account or similar account (other than an estate or trust)
held by a dealer or other fiduciary organized, incorporated and (if an
individual) resident in the United States;
and
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H.
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a
corporation or partnership organized under the laws of any foreign
jurisdiction and formed by a U.S. person principally for the purpose of
investing in securities not registered under the Securities Act, unless it
is organized or incorporated, and owned, by accredited investors (as
defined in Rule 501(a) under the Securities Act) who are not natural
persons, estates or trusts.
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As used
herein, the term “Non-U.S. person” means any person who is not a U.S. person or
is deemed not to be a U.S. person under Rule 902(k)(2) of the Securities
Act.
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(c)
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Such
Non-U.S. person agrees that with respect to the Securities until the
expiration of the Restricted
Period:
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(i)
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such
Non-U.S. person, its agents or its representatives have not and will not
solicit offers to buy, offer for sale or sell any of the Securities or any
beneficial interest therein in the United States or to or for the account
of a U.S. person during the Restricted Period; notwithstanding the
foregoing, prior to the expiration of the Restricted Period, the
Securities may be offered and sold by the holder thereof only if such
offer and sale is made in compliance with the terms of this Agreement and
either: (A) if the offer or sale is within the United States or
to or for the account of a U.S. person (as such terms are defined in
Regulation S), the securities are offered and sold pursuant to an
effective registration statement or pursuant to Rule 144 under the
Securities Act or pursuant to an exemption from the registration
requirements of the Securities Act; or (B) the offer and sale is outside
the United States and to other than a U.S. person;
and
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(ii)
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such
Non-U.S. person shall not engage in hedging transactions with regard to
the Securities unless in compliance with the Securities
Act.
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The
foregoing restrictions are binding upon subsequent transferees of the
Securities, except for transferees pursuant to an effective registration
statement. Such Non-U.S. person agrees that after the Restricted
Period, the Securities may be offered or sold within the United States or to or
for the account of a U.S. person only pursuant to applicable securities
laws.
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(d)
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Such
Non-U.S. person has not engaged, nor is it aware that any party has
engaged, and such Non-U.S. person will not engage or cause any third party
to engage, in any directed selling efforts (as such term is defined in
Regulation S) in the United States with respect to the
Securities.
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(e)
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Such
Non-U.S. person: (i) is domiciled and has its principal place
of business outside the United States; (ii) certifies it is not a U.S.
person and is not acquiring the Securities for the account or benefit of
any U.S. person; and (iii) at the time of the Closing Date, the Non-U.S.
person or persons acting on Non-U.S. person’s behalf in connection
therewith will be located outside the United
States.
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(f)
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At
the time of offering to such Non-U.S. person and communication of such
Non-U.S. person’s order to purchase the Securities and at the time of such
Non-U.S. Person’s execution of this Agreement, the Non-U.S. person or
persons acting on Non-U.S. person’s behalf in connection therewith were
located outside the United States.
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(g)
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Such
Non-U.S. person is not a “distributor” (as defined in Regulation S) or a
“dealer” (as defined in the Securities
Act).
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(h)
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Such
Non-U.S. person acknowledges that the Company shall make a notation in its
stock books regarding the restrictions on transfer set forth in this
Section 5.2 and shall transfer such shares on the books of the Company
only to the extent consistent
therewith.
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(i)
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If
the Subscriber is not a United States person, such Subscriber hereby
represents that such Subscriber is satisfied as to the full observance of
the laws of such Subscriber’s jurisdiction in connection with any
invitation to subscribe for the Securities, including (i) the legal
requirements within such Subscriber’s jurisdiction for the purchase of
securities, (ii) any foreign exchange restrictions applicable to such
purchase, (iii) any governmental or other consents that may need to be
obtained and (iv) the income tax and other tax consequences, if any, that
may be relevant to the purchase, holding, redemption, sale or transfer of
such securities. Such Subscriber’s subscription and payment
for, and such Subscriber’s continued beneficial ownership of, the
Securities, will not violate any applicable securities or other laws of
such Subscriber’s jurisdiction.
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6.
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REPRESENTATIONS AND
WARRANTIES WILL BE RELIED UPON BY THE
COMPANY
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6.1 The
Subscriber acknowledges that the representations and warranties contained herein
are made by it with the intention that such representations and warranties may
be relied upon by the Company and its legal counsel in determining the
Subscriber’s eligibility to purchase the Securities under applicable securities
legislation, or (if applicable) the eligibility of others on whose behalf it is
contracting hereunder to purchase the Securities under applicable securities
legislation. The Subscriber further agrees that by accepting delivery of the
certificates representing the Securities on the Closing Date, it will be
representing and warranting that the representations and warranties contained
herein are true and correct as at the Closing Date with the same force and
effect as if they had been made by the Subscriber on the Closing Date and that
they will survive the purchase by the Subscriber of the Securities and will
continue in full force and effect notwithstanding any subsequent disposition by
the Subscriber of such Securities.
7.
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LEGENDING OF SUBJECT
SHARES
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7.1 The
Subscriber hereby acknowledges that a legend may be placed on the certificates
representing any of the Shares to the effect that the Shares represented by such
certificates are subject to a hold period and may not be traded until the expiry
of such hold period except as permitted by applicable securities
legislation.
7.2 The
Subscriber hereby acknowledges and agrees to the Company making a notation on
its records or giving instructions to the registrar and transfer agent of the
Company in order to implement the restrictions on transfer set forth and
described in this Subscription Agreement.
8.
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COLLECTION OF PERSONAL
INFORMATION
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8.1 The
Subscriber acknowledges and consents to the fact that the Company is collecting
the Subscriber’s personal information for the purpose of fulfilling this
Subscription Agreement and completing the Offering. The Subscriber’s
personal information (and, if applicable, the personal information of those on
whose behalf the Subscriber is contracting hereunder) may be disclosed by the
Company to (a) stock exchanges or securities regulatory authorities, (b) the
Company’s registrar and transfer agent, (c) regulatory authorities and (d) any
of the other parties involved in the Offering, including legal counsel, and may
be included in record books in connection with the Offering. By
executing this Subscription Agreement, the Subscriber is deemed to be consenting
to the foregoing collection, use and disclosure of the Subscriber’s personal
information (and, if applicable, the personal information of those on whose
behalf the Subscriber is contracting hereunder) and to the retention of such
personal information for as long as permitted or required by law or business
practice. Notwithstanding that the Subscriber may be purchasing Securities as
agent on behalf of an undisclosed principal, the Subscriber agrees to provide,
on request, particulars as to the identity of such undisclosed principal as may
be required by the Company in order to comply with the foregoing.
9.
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"PIGGYBACK"
REGISTRATION
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9.1 If
at any time the Company shall determine to register any of its common stock
other than pursuant to (A) a registration relating solely to the sale of
securities to participants in a Company employee benefits plan, (B) a
registration on any form which does not include substantially the same
information as would be required to be included in a registration statement
covering the sale of the Securities issued pursuant to this Subscription
Agreement (such shares of the Company’s common stock, for purposes of this
Section 9 only, "Registrable Shares"), (C) a registration relating to securities
issued in connection with an acquisition by the Company, or (D) a registration
in which the only the Company’s common stock being registered is common stock
issuable upon conversion of debt securities which are also being registered), it
shall send to the Subscriber written notice of such determination and, if within
twenty (20) days after receipt of such notice, the Subscriber shall so request
in writing, the Company shall use its commercially reasonable best efforts to
include in such registration all or any part of the Registrable Shares that the
Subscriber requests to be registered.
9.2 If
such registration involves an underwritten public offering and the managing
underwriter determines in its sole discretion that marketing factors require a
limitation on the number of shares that may be included in the registration, the
number of shares to be included in such registration shall be apportioned as
follows: First, the common stock held by officers and directors of the Company
shall be excluded to the extent required by such limitation. Second, the
Registrable Shares requested to be registered by the Subscriber and other
subscribers in this private placement shall be excluded to the extent required
by such limitation. Third, the Company’s common stock requested to be registered
by selling stockholders with registration rights other than under this
Subscription Agreement shall be excluded to the extent required by such
limitation. If the Subscriber disapproves of the terms of such underwriting, he
may elect to withdraw therefrom by written notice to the Company and the
underwriter.
9.3 The
Subscriber hereby agrees that he will not sell or otherwise transfer or dispose
of (other than to donees who agree to be similarly bound) any Registrable Shares
during a period not to exceed 90 days following the effective date of a
registration statement in connection with an underwritten public offering of the
Company if so requested by the Company or any representative of its
underwriters, and the Subscriber shall enter into such underwriter's standard
form of "lockup" or "market standoff' agreement in a form satisfactory to the
Company and such underwriter. In order to enforce the foregoing covenant, the
Company may impose stock transfer restrictions with respect to the Registrable
Shares of the Subscriber until the end of the lockup period.
9.4 The
obligations of the Company to register any of the Subscriber’s Registrable
Shares pursuant to this Section 9 shall terminate on the earlier of (i) the sale
of such Registrable Shares pursuant to an effective registration statement under
the Securities Act, and (ii) if the Subscriber is eligible to sell all of the
Subscriber’s Registrable Securities under Rule 144 of the Securities Act within
any three month period without volume limitations.
9.1 The
Subscriber acknowledges and agrees that all costs and expenses incurred by the
Subscriber (including any fees and disbursements of any special counsel retained
by the Subscriber) relating to the purchase of the Securities shall be borne by
the Subscriber.
10.1 This
Subscription Agreement is governed by the laws of the State of Nevada and the
federal laws applicable therein.
11.1 In
the event that any suit or action is instituted to enforce any provisions in
this Agreement, the prevailing party in such dispute shall be entitled to
recover from the losing party all fees, costs and expenses of enforcing any
right of such prevailing party under or with respect to this Agreement,
including without limitation, all fees, costs and expenses of
appeals.
12.1 This
Subscription Agreement, including without limitation the representations,
warranties and covenants contained herein, shall survive and continue in full
force and effect and be binding upon the parties hereto notwithstanding the
completion of the purchase of the Securities by the Subscriber pursuant
hereto.
13.1 This
Subscription Agreement is not transferable or assignable.
14.1 The
Company shall be entitled to rely on delivery by facsimile machine of an
executed copy of this Subscription Agreement and acceptance by the Company of
such facsimile copy shall be equally effective to create a valid and binding
agreement between the Subscriber and the Company in accordance with the terms
hereof.
15.1 The
invalidity or unenforceability of any particular provision of this Subscription
Agreement shall not affect or limit the validity or enforceability of the
remaining provisions of this Subscription Agreement.
16.1 Except
as expressly provided in this Subscription Agreement and in the agreements,
instruments and other documents contemplated or provided for herein, this
Subscription Agreement contains the entire agreement between the parties with
respect to the sale of the Securities and there are no other terms, conditions,
representations or warranties, whether expressed, implied, oral or written, by
statute or common law, by the Company or by anyone else.
17.1 All
notices and other communications hereunder shall be in writing and shall be
deemed to have been duly given if mailed or transmitted by any standard form of
telecommunication. Notices to the Subscriber and the Company shall be directed
to it at the respective addresses set forth in this Subscription Agreement and
the signature pages hereto.
18.1 This
Subscription Agreement may be executed in any number of counterparts, each of
which, when so executed and delivered, shall constitute an original and all of
which together shall constitute one instrument.
[Signature
Pages Follow]
IN WITNESS WHEREOF the
Subscriber has duly executed this Subscription Agreement as of the date of
acceptance by the Company.
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(Name
of Subscriber - Please type or print)
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(Signature
and, if applicable, Office)
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(Address
of Subscriber)
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(City,
State or Province, Postal Code of Subscriber)
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(Country
of
Subscriber)
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[SIGNATURE
PAGE TO SUBSCRIPTION AGREEMENT]
ACCEPTANCE
The
above-mentioned Subscription Agreement for the purchase and sale of the
Securities to _________________
is hereby accepted by GENESIS BIOPHARMA, INC.
DATED the
____ day of ___________________, 2010.
GENESIS
BIOPHARMA, INC.
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By:
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Name:
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Title:
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