THIS WARRANT AND THE UNDERLYING SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY OTHER SECURITIES LAWS, HAVE BEEN TAKEN FOR INVESTMENT, AND MAY NOT BE SOLD OR TRANSFERRED OR OFFERED FOR...
Exhibit
10.5
THIS
WARRANT AND THE UNDERLYING SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY OTHER
SECURITIES LAWS, HAVE BEEN TAKEN FOR INVESTMENT, AND MAY NOT BE SOLD OR
TRANSFERRED OR OFFERED FOR SALE OR TRANSFER UNLESS A REGISTRATION STATEMENT
UNDER THE SECURITIES ACT AND OTHER APPLICABLE SECURITIES LAWS WITH RESPECT
TO
SUCH SECURITIES IS THEN IN EFFECT, OR IN THE OPINION OF COUNSEL (WHICH OPINION
IS REASONABLY SATISFACTORY TO THE ISSUER OF THESE SECURITIES), SUCH REGISTRATION
UNDER THE SECURITIES ACT AND OTHER APPLICABLE SECURITIES LAWS IS NOT
REQUIRED.
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Date:
April 17, 2008
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Warrant
to Purchase
***3,000,000***
Shares
|
(Incorporated
under the laws of the State of Nevada)
WARRANT
FOR THE PURCHASE OF SHARES OF
COMMON
STOCK
Warrant
Price: $0.10 per share, subject to adjustment as provided below.
THIS
IS
TO CERTIFY that, for value received, Xxxxxx Xxxxxxxxxx and its assigns
(collectively, the “Holder”), is entitled to purchase, subject to the terms and
conditions hereinafter set forth, up to ***3,000,000*** shares of the common
stock, par value $0.001 per share (“Common Stock”), of GenMed Holding Corp., a
Nevada corporation (the “Company”), and to receive certificate(s) for the Common
Stock so purchased.
1. Exercise
Period and Vesting.
The
exercise period is the period beginning on the date of this Warrant (the
“Issuance Date”) and ending at 5:00 p.m., Pacific Standard Time, seven years
from the Issuance Date (the “Exercise Period”). This Warrant is vested in full
as of the Issuance Date and is immediately exercisable by Holder. This Warrant
will terminate automatically and immediately upon the expiration of the Exercise
Period. The Issuance Date is April 17, 2008.
2. Exercise
of Warrant; Cashless Exercise.
This
Warrant may be exercised, in whole or in part, at any time and from time to
time
during the Exercise Period. Such exercise shall be accomplished by tender to
the
Company of the purchase price set forth above as the warrant price (the “Warrant
Price”), either (a) in cash, by wire transfer or by certified check or bank
cashier’s check, payable to the order of the Company, or (b) by surrendering
such number of shares of Common Stock received upon exercise of this Warrant
with a current market price equal to the Warrant Price (a “Cashless Exercise”),
together with presentation and surrender to the Company of this Warrant with
an
executed subscription in substantially the form attached hereto as Exhibit
A
(the
“Subscription”). Upon receipt of the foregoing, the Company will deliver to the
Holder, as promptly as possible, a certificate or certificates representing
the
shares of Common Stock so purchased, registered in the name of the Holder or
its
transferee (as permitted under Section 3 below). With respect to any exercise
of
this Warrant, the Holder will for all purposes be deemed to have become the
holder of record of the number of shares of Common Stock purchased hereunder
on
the date this Warrant, a properly executed Subscription and payment of the
Warrant Price is received by the Company (the “Exercise Date”), irrespective of
the date of delivery of the certificate evidencing such shares, except that,
if
the date of such receipt is a date on which the stock transfer books of the
Company are closed, such person will be deemed to have become the holder of
such
shares at the close of business on the next succeeding date on which the stock
transfer books are open. Fractional shares of Common Stock will not be issued
upon the exercise of this Warrant. In lieu of any fractional shares that would
have been issued but for the immediately preceding sentence, the Holder will
be
entitled to receive cash equal to the current market price of such fraction
of a
share of Common Stock on the trading day immediately preceding the Exercise
Date. In the event this Warrant is exercised in part, the Company shall issue
a
new Warrant to the Holder covering the aggregate number of shares of Common
Stock as to which this Warrant remains exercisable for.
1
If
the
Holder elects to conduct a Cashless Exercise, the Company shall cause to be
delivered to the Holder a certificate or certificates representing the number
of
shares of Common Stock computed using the following formula:
|
X
=
Y (A-B)
A
Where:
X = the
number of shares of Common Stock to be issued to Holder;
Y = the
portion of the Warrant (in number of shares of Common Stock)
being exercised by Holder (at the date of such calculation);
A = the
fair market value of one share of Common Stock on the Exercise
Date (as calculated below); and
B = Warrant
Price (as adjusted to the date of such
calculation).
|
For
purposes of the foregoing calculation, “fair market value of one share of Common
Stock on the Exercise Date” shall mean: (i) if the principal trading market for
such securities is a national or regional securities exchange, the closing
price
on such exchange for the day immediately prior to such Exercise Date; (ii)
if
sales prices for shares of Common Stock are reported by the Nasdaq National
Market System or Nasdaq Small Cap Market (or a similar system then in use),
the
last reported sales price for the day immediately prior to such Exercise Date;
or (iii) if neither (i) nor (ii) above are applicable, and if bid and ask prices
for shares of Common Stock are reported in the over-the-counter market by Nasdaq
(or, if not so reported, by the National Quotation Bureau), the average of
the
high bid and low ask prices so reported for the ten (10) trading days
immediately prior to such Exercise Date. Additionally, in the case of (i) or
(ii) above, at the sole and exclusive election of the Holder, in any of the
foregoing calculations of the “fair market value of one share of Common Stock on
the Exercise Date”, the Holder may elect to use either: (a) the closing price or
last reported sales price, as the case may be, for the day immediately prior
to
the exercise date, OR (b) the arithmetic mean average of the closing prices
or
last reported sales prices, as the case may be, over the last ten (10) business
days. The Holder’s election shall be used in calculating “the fair market value
of one share of Common Stock on the Exercise Date” in the above calculation.
Notwithstanding (i), (ii), and (iii) above, if there is no reported closing
price, last reported sales price, or bid and ask prices, as the case may be,
for
the period in question, then the current market price shall be determined as
of
the latest ten (10) day period prior to such day for which such closing price,
last reported sales price, or bid and ask prices, as the case may be, are
available, unless such securities have not been traded on an exchange or in
the
over-the-counter market for 30 or more days immediately prior to the day in
question, in which case the current market price shall be determined in good
faith by, and reflected in a formal resolution of, the Board of Directors of
the
Company. The Company acknowledges and agrees that this Warrant was issued on
the
Issuance Date.
2
3. Transferability
and Exchange.
(a) This
Warrant, and the Common Stock issuable upon the exercise hereof, may not be
sold, transferred, pledged or hypothecated unless the Company shall have been
provided with an opinion of counsel, or other evidence reasonably satisfactory
to it, that such transfer is not in violation of the Securities Act, and any
applicable state securities laws. Subject to the satisfaction of the aforesaid
condition, this Warrant and the underlying shares of Common Stock shall be
transferable from time to time by the Holder upon written notice to the Company.
If this Warrant is transferred, in whole or in part, the Company shall, upon
surrender of this Warrant to the Company, deliver to each transferee a Warrant
evidencing the rights of such transferee to purchase the number of shares of
Common Stock that such transferee is entitled to purchase pursuant to such
transfer. The Company may place a legend similar to the legend at the top of
this Warrant on any replacement Warrant and on each certificate representing
shares issuable upon exercise of this Warrant or any replacement Warrants.
Only
a registered Holder may enforce the provisions of this Warrant against the
Company. A transferee of the original registered Holder becomes a registered
Holder only upon delivery to the Company of the original Warrant and an original
Assignment, substantially in the form set forth in Exhibit
B
attached
hereto.
(b) This
Warrant is exchangeable upon its surrender by the Holder to the Company for
new
Warrants of like tenor and date representing in the aggregate the right to
purchase the number of shares purchasable hereunder, each of such new Warrants
to represent the right to purchase such number of shares as may be designated
by
the Holder at the time of such surrender.
4. Adjustments
to Warrant Price and Number of Shares Subject to Warrant.
The
Warrant Price and the number of shares of Common Stock purchasable upon the
exercise of this Warrant are subject to adjustment from time to time upon the
occurrence of any of the events specified in this Section 4. For the purpose
of
this Section 4, “Common Stock” means shares now or hereafter authorized of any
class of common stock of the Company and any other stock of the Company, however
designated, that has the right to participate in any distribution of the assets
or earnings of the Company without limit as to per share amount (excluding,
and
subject to any prior rights of, any class or series of preferred
stock).
3
(a) In
case
the Company shall (i) pay a dividend or make a distribution in shares of Common
Stock or other securities, (ii) subdivide its outstanding shares of Common
Stock
into a greater number of shares, (iii) combine its outstanding shares of Common
Stock into a smaller number of shares, or (iv) issue by reclassification of
its
shares of Common Stock other securities of the Company, then the Warrant Price
in effect at the time of the record date for such dividend or on the effective
date of such subdivision, combination or reclassification, and/or the number
and
kind of securities issuable on such date, shall be proportionately adjusted
so
that the Holder of any Warrant thereafter exercised shall be entitled to receive
the aggregate number and kind of shares of Common Stock (or such other
securities other than Common Stock) of the Company, at the same aggregate
Warrant Price, that, if such Warrant had been exercised immediately prior to
such date, the Holder would have owned upon such exercise and been entitled
to
receive by virtue of such dividend, distribution, subdivision, combination
or
reclassification. Such adjustment shall be made successively whenever any event
listed above shall occur.
(b) In
case
the Company shall fix a record date for the making of a distribution to all
holders of Common Stock (including any such distribution made in connection
with
a consolidation or merger in which the Company is the surviving corporation)
of
cash, evidences of indebtedness or assets, or subscription rights or warrants,
the Warrant Price to be in effect after such record date shall be determined
by
multiplying the Warrant Price in effect immediately prior to such record date
by
a fraction, the numerator of which shall be the current market price per share
of Common Stock on such record date, less the amount of cash so to be
distributed (or the fair market value (as determined in good faith by, and
reflected in a formal resolution of, the Board of Directors of the Company)
of
the portion of the assets or evidences of indebtedness so to be distributed,
or
of such subscription rights or warrants, applicable to one share of Common
Stock, and the denominator of which shall be such current market price per
share
of Common Stock. Such adjustment shall be made successively whenever such a
record date is fixed; and in the event that such distribution is not so made,
the Warrant Price shall again be adjusted to be the Warrant Price which would
then be in effect if such record date had not been fixed.
(c) For
the
purpose of any computation under any subsection of this Section 4, the “current
market price” per share of Common Stock on any date shall be the per share price
of the Common Stock on the trading day immediately prior to the event requiring
an adjustment hereunder and shall be: (i) if the principal trading market for
such securities is a national or regional securities exchange, the closing
price
on such exchange on such day; or (ii) if sales prices for shares of Common Stock
are reported by the Nasdaq National Market System or Small Cap Market System
(or
a similar system then in use), the last reported sales price so reported on
such
day; or (iii) if neither (i) nor (ii) above are applicable, and if bid and
ask
prices for shares of Common Stock are reported in the over-the-counter market
by
Nasdaq (or, if not so reported, by the National Quotation Bureau), the average
of the high bid and low ask prices so reported on such day. Notwithstanding
the
foregoing, if there is no reported closing price, last reported sales price,
or
bid and ask prices, as the case may be, for the day in question, then the
current market price shall be determined as of the latest date prior to such
day
for which such closing price, last reported sales price, or bid and ask prices,
as the case may be, are available, unless such securities have not been traded
on an exchange or in the over-the-counter market for 30 or more days immediately
prior to the day in question, in which case the current market price shall
be
determined in good faith by, and reflected in a formal resolution of, the Board
of Directors of the Company.
4
(d) Notwithstanding
any provision herein to the contrary, no adjustment in the Warrant Price shall
be required unless such adjustment would require an increase or decrease of
at
least 1% in the Warrant Price; provided, however, that any adjustments which
by
reason of this subsection (d) are not required to be made shall be carried
forward and taken into account in any subsequent adjustment. All calculations
under this Section 4 shall be made to the nearest cent or the nearest
one-hundredth of a share, as the case may be.
(e) In
the
event that at any time, as a result of an adjustment made pursuant to subsection
(a) above, the Holder of any Warrant thereafter exercised shall become entitled
to receive any shares of capital stock of the Company other than shares of
Common Stock, thereafter the number of such other shares so receivable upon
exercise of any Warrant shall be subject to adjustment from time to time in
a
manner and on terms as nearly equivalent as practicable to the provisions with
respect to the shares of Common Stock contained in this Section 4, and the
other
provisions of this Warrant shall apply on like terms to any such other
shares.
(f) If
the
Company merges or consolidates into or with another corporation or entity,
or if
another corporation or entity merges into or with the Company (excluding such
a
merger in which the Company is the surviving or continuing corporation and
which
does not result in any reclassification, conversion, exchange, or cancellation
of the outstanding shares of Common Stock), or if all or substantially all
of
the assets or business of the Company are sold or transferred to another
corporation, entity, or person, then, as a condition to such consolidation,
merger, or sale (a “Transaction”), lawful and adequate provision shall be made
whereby the Holder shall have the right from and after the Transaction to
receive, upon exercise of this Warrant and upon the terms and conditions
specified herein and in lieu of the shares of the Common Stock that would have
been issuable if this Warrant had been exercised immediately before the
Transaction, such shares of stock, securities, or assets as the Holder would
have owned immediately after the Transaction if the Holder had exercised this
Warrant immediately before the effective date of the Transaction.
5. Registration
Rights.
The
Company hereby grants to Holder, with respect to the shares of Common Stock
underlying this Warrant, the Company shall include such shares on any
registration statement it files after the date hereof, except any registration
statement on Form S-8 or any similar form; it being specifically agreed and
understood that the shares of Common Stock underlying this Warrant will be
included in any registration statement filed by the Company which includes
shares of Common Stock, or shares of Common Stock underlying any securities.
5
6. Reservation
of Shares.
The
Company agrees at all times to reserve and hold available out of its authorized
but unissued shares of Common Stock the number of shares of Common Stock
issuable upon the full exercise of this Warrant. The Company further covenants
and agrees that all shares of Common Stock that may be delivered upon the
exercise of this Warrant will, upon delivery, be fully paid and nonassessable
and free from all taxes, liens and charges with respect to the purchase thereof
hereunder.
7. Notices
to Holder.
Upon
any adjustment of the Warrant Price (or number of shares of Common Stock
purchasable upon the exercise of this Warrant) pursuant to Section 4, the
Company shall promptly thereafter cause to be given to the Holder written notice
of such adjustment. Such notice shall include the Warrant Price (and/or the
number of shares of Common Stock purchasable upon the exercise of this Warrant)
after such adjustment, and shall set forth in reasonable detail the Company’s
method of calculation and the facts upon which such calculations were based.
Where appropriate, such notice shall be given in advance and included as a
part
of any notice required to be given under the other provisions of this Section
7.
In
the
event of (a) any fixing by the Company of a record date with respect to the
holders of any class of securities of the Company for the purpose of determining
which of such holders are entitled to dividends or other distributions, or
any
rights to subscribe for, purchase or otherwise acquire any shares of capital
stock of any class or any other securities or property, or to receive any other
right, (b) any capital reorganization of the Company, or reclassification or
recapitalization of the capital stock of the Company or any transfer of all
or
substantially all of the assets or business of the Company to, or consolidation
or merger of the Company with or into, any other entity or person, or (c) any
voluntary or involuntary dissolution or winding up of the Company, then and
in
each such event the Company will give the Holder a written notice specifying,
as
the case may be (i) the record date for the purpose of such dividend,
distribution, or right, and stating the amount and character of such dividend,
distribution, or right; or (ii) the date on which any such reorganization,
reclassification, recapitalization, transfer, consolidation, merger, conveyance,
dissolution, liquidation, or winding up is to take place and the time, if any
is
to be fixed, as of which the holders of record of Common Stock (or such capital
stock or securities receivable upon the exercise of this Warrant) shall be
entitled to exchange their shares of Common Stock (or such other stock
securities) for securities or other property deliverable upon such event. Any
such notice shall be given at least 10 days prior to the earliest date therein
specified.
8. No
Rights as a Stockholder.
This
Warrant does not entitle the Holder to any voting rights or other rights as
a
stockholder of the Company, nor to any other rights whatsoever except the rights
herein set forth.
9. Additional
Covenants of the Company.
For so
long as the Common Stock is listed for trading on any regional or national
securities exchange or Nasdaq (National Market or Small Cap System), the Company
shall, upon issuance of any shares for which this Warrant is exercisable, at
its
expense, promptly obtain and maintain the listing of such shares. The Company
shall also comply with the reporting requirements of Sections 13 and 15(d)
of
the Exchange Act for so long as and to the extent that such requirements apply
to the Company.
6
The
Company shall not, by amendment of its Articles 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. Without limiting
the generality of the foregoing, the Company (a) will at all times reserve
and
keep available, solely for issuance and delivery upon exercise of this Warrant,
shares of Common Stock issuable from time to time upon exercise of this Warrant,
(b) will not increase the par value of any shares of capital stock receivable
upon exercise of this Warrant above the amount payable therefor upon such
exercise, and (c) will take all such actions as may be necessary or appropriate
in order that the Company may validly and legally issue fully paid and
nonassessable stock.
10. Successors
and Assigns.
This
Agreement shall be binding upon and inure to the benefit of the Company, the
Holder and their respective successors and permitted assigns.
11. Notices.
The
Company agrees to maintain a ledger of the ownership of this Warrant (the
“Ledger”). Any notice hereunder shall be given by registered or certified mail
if to the Company, at its principal executive office and, if to the Holder,
to
its address shown in the Ledger of the Company; provided, however, that the
Holder may at any time on three (3) days written notice to the Company designate
or substitute another address where notice is to be given. Notice shall be
deemed given and received after a certified or registered letter, properly
addressed with postage prepaid, is deposited in the U.S. mail.
12. Severability.
Every
provision of this Warrant is intended to be severable. If any term or provision
hereof is illegal or invalid for any reason whatsoever, such illegality or
invalidity shall not affect the remainder of this Warrant.
13. Governing
Law.
This
Warrant shall be governed by and construed in accordance with the laws of the
State of Texas without giving effect to the principles of choice of laws
thereof.
14. Attorneys’
Fees.
In any
action or proceeding brought to enforce any provision of this Warrant, the
prevailing party shall be entitled to recover reasonable attorneys’ fees in
addition to its costs and expenses and any other available remedy.
15. Entire
Agreement.
This
Warrant (including the Exhibits attached hereto) constitutes the entire
understanding between the Company and the Holder with respect to the subject
matter hereof, and supersedes all prior negotiations, discussions, agreements
and understandings relating to such subject matter.
IN
WITNESS WHEREOF, the Company has caused this Warrant to be executed by its
duly
authorized officer as of the date first set forth above.
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By:
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|
Title:
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7
Exhibit
A
SUBSCRIPTION
FORM
(To
be
Executed by the Holder to Exercise the Rights To Purchase Common Stock Evidenced
by the Within Warrant)
The
undersigned hereby irrevocably subscribes for _______ shares (the “Stock”) of
the Common Stock of GenMed Holding Corp. (the “Company”) pursuant to and in
accordance with the terms and conditions of the attached Warrant (the
“Warrant”), and hereby makes payment of $_______ therefor by [tendering cash,
wire transferring or delivering a certified check or bank cashier’s check,
payable to the order of the Company] [surrendering _______ shares of Common
Stock received upon exercise of the Warrant, which shares have a current market
price equal to such payment as required in Section 2 of the Warrant]. The
undersigned requests that a certificate for the Stock be issued in the name
of
the undersigned and be delivered to the undersigned at the address stated below.
If the Stock is not all of the shares purchasable pursuant to the Warrant,
the
undersigned requests that a new Warrant of like tenor for the balance of the
remaining shares purchasable thereunder be delivered to the undersigned at
the
address stated below.
In
connection with the issuance of the Stock, I hereby represent to the Company
that I am acquiring the Stock for my own account for investment and not with
a
view to, or for resale in connection with, a distribution of the shares within
the meaning of the Securities Act of 1933, as amended (the “Securities Act”).
I
understand that because the Stock has not been registered under the Securities
Act, I must hold such Stock indefinitely unless the Stock is subsequently
registered and qualified under the Securities Act or is exempt from such
registration and qualification. I shall make no transfer or disposition of
the
Stock unless (a) such transfer or disposition can be made without registration
under the Securities Act by reason of a specific exemption from such
registration and such qualification, or (b) a registration statement has been
filed pursuant to the Securities Act and has been declared effective with
respect to such disposition. I agree that each certificate representing the
Stock delivered to me shall bear substantially the same as set forth on the
front page of the Warrant.
I
agree
that each certificate representing the Stock delivered to me shall bear
substantially the same legend as set forth on the front page of the
Warrant.
I
further
agree that the Company may place stop orders on the certificates evidencing
the
Stock with the transfer agent, if any, to the same effect as the above legend.
The legend and stop transfer notice referred to above shall be removed only
upon
my furnishing to the Company of an opinion of counsel (reasonably satisfactory
to the Company) to the effect that such legend may be removed.
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Date:
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Signed:
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||||
|
Address:
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|||||
A-1
Exhibit
B
ASSIGNMENT
(To
be
Executed by the Holder to Effect Transfer of the Attached Warrant)
For
Value
Received __________________________ hereby sells, assigns and transfers to
_________________________ the Warrant attached hereto and the rights represented
thereby to purchase _________ shares of Common Stock in accordance with the
terms and conditions hereof, and does hereby irrevocably constitute and appoint
_________________________ as attorney to transfer such Warrant on the books
of
the Company with full power of substitution.
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Dated:
|
|
Signed:
|
|
Please
print or typewrite
name
and address of
assignee:
|
Please
insert Social Security
or
other Tax Identification
Number
of Assignee:
|
||
2
