[EXHIBIT 10.12]
THIS WARRANT AND THE SHARES ISSUABLE UPON THE EXERCISE
OF THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED. EXCEPT AS
OTHERWISE SET FORTH HEREIN OR IN A SECURITIES PURCHASE
AGREEMENT DATED AS OF MARCH 30, 2005, NEITHER THIS
WARRANT NOR ANY OF SUCH SHARES MAY BE SOLD, TRANSFERRED
OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT FOR SUCH SECURITIES UNDER SAID ACT OR, AN
OPINION OF COUNSEL, IN FORM, SUBSTANCE AND SCOPE,
CUSTOMARY FOR OPINIONS OF COUNSEL IN COMPARABLE
TRANSACTIONS, THAT REGISTRATION IS NOT REQUIRED UNDER
SUCH ACT OR UNLESS SOLD PURSUANT TO RULE 144 OR
REGULATION S UNDER SUCH ACT.
Right to
Purchase
14,800
Shares of
Common
Stock, par
value
$.001 per
share
STOCK PURCHASE WARRANT
THIS CERTIFIES THAT, for value received, NEW MILLENNIUM
CAPITAL PARTNERS II, LLC or its registered assigns, is entitled
to purchase from Med Gen, Inc., a Nevada corporation (the
"Company"), at any time or from time to time during the period
specified in Paragraph 2 hereof, FOURTEEN THOUSAND EIGHT HUNDRED
(14,800) fully paid and nonassessable shares of the Company's
Common Stock, par value $.001 per share (the "Common Stock"), at
an exercise price per share equal to $.085 (the "Exercise
Price"). The term "Warrant Shares," as used herein, refers to
the shares of Common Stock purchasable hereunder. The Warrant
Shares and the Exercise Price are subject to adjustment as
provided in Paragraph 4 hereof. The term "Warrants" means this
Warrant and the other warrants issued pursuant to that certain
Securities Purchase Agreement, dated March 30, 2005, by and among
the Company and the Buyers listed on the execution page thereof
(the "Securities Purchase Agreement"), including any additional
warrants issuable pursuant to Section 4(l) thereof.
This Warrant is subject to the following terms, provisions,
and conditions:
1. Manner of Exercise; Issuance of Certificates; Payment for
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Shares.
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Subject to the provisions hereof, this Warrant may be exercised by the
holder hereof, in whole or in part, by the surrender of this
Warrant, together with a completed exercise agreement in the form
attached hereto (the "Exercise Agreement"), to the Company during
normal business hours on any business day at the Company's
principal executive offices (or such other office or agency of
the Company as it may designate by notice to the holder hereof),
and upon (i) payment to the Company in cash, by certified or offi
cial bank check or by wire transfer for the account of the
Company of the Exercise Price for the Warrant Shares specified in
the Exercise Agreement or (ii) if the resale of the Warrant
Shares by the holder is not then registered pursuant to an
effective registration statement under the Securities Act of
1933, as amended (the "Securities Act"), delivery to the Company
of a written notice of an election to effect a "Cashless
Exercise" (as defined in Section 11(c) below) for the Warrant
Shares specified in the Exercise Agreement. The Warrant Shares
so purchased shall be deemed to be issued to the holder hereof or
such holder's designee, as the record owner of such shares, as of
the close of business on the date on which this Warrant shall
have been surrendered, the completed Exercise Agreement shall
have been delivered, and payment shall have been made for such
shares as set forth above. Certificates for the Warrant Shares
so purchased, representing the aggregate number of shares
specified in the Exercise Agreement, shall be delivered to the
holder hereof within a reasonable time, not exceeding three (3)
business days, after this Warrant shall have been so exercised.
The certificates so delivered shall be in such denominations as
may be requested by the holder hereof and shall be registered in
the name of such holder or such other name as shall be designated
by such holder. If this Warrant shall have been exercised only
in part, then, unless this Warrant has expired, the Company
shall, at its expense, at the time of delivery of such
certificates, deliver to the holder a new Warrant representing
the number of shares with respect to which this Warrant shall not
then have been exercised. In addition to all other available
remedies at law or in equity, if the Company fails to deliver
certificates for the Warrant Shares within three (3) business
days after this Warrant is exercised, then the Company shall pay
to the holder in cash a penalty (the "Penalty") equal to 2% of
the number of Warrant Shares that the holder is entitled to
multiplied by the Market Price (as hereinafter defined) for each
day that the Company fails to deliver certificates for the
Warrant Shares. For example, if the holder is entitled to
100,000 Warrant Shares and the Market Price is $2.00, then the
Company shall pay to the holder $4,000 for each day that the
Company fails to deliver certificates for the Warrant Shares.
The Penalty shall be paid to the holder by the fifth day of the
month following the month in which it has accrued.
Notwithstanding anything in this Warrant to the
contrary, in no event shall the holder of this Warrant be
entitled to exercise a number of Warrants (or portions thereof)
in excess of the number of Warrants (or portions thereof) upon
exercise of which the sum of (i) the number of shares of Common
Stock beneficially owned by the holder and its affiliates (other
than shares of Common Stock which may be deemed beneficially
owned through the ownership of the unexercised Warrants and the
unexercised or unconverted portion of any other securities of the
Company (including the Notes (as defined in the Securities
Purchase Agreement)) subject to a limitation on conversion or
exercise analogous to the limitation contained herein) and (ii)
the number of shares of Common Stock issuable upon exercise of
the Warrants (or portions thereof) with respect to which the
determination described herein is being made, would result in
beneficial ownership by the holder and its affiliates of more
than 4.9% of the outstanding shares of Common Stock. For
purposes of the immediately preceding sentence, beneficial
ownership shall be determined in accordance with Section 13(d) of
the Securities Exchange Act of 1934, as amended, and Regulation
13D-G thereunder, except as otherwise provided in clause (i) of
the preceding sentence. Notwithstanding anything to the contrary
contained herein, the limitation on exercise of this Warrant set
forth herein may not be amended without (i) the written consent
of the holder hereof and the Company and (ii) the approval of a
majority of shareholders of the Company.
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2. Period of Exercise.
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This Warrant is exercisable at any time or from time to time on or
after the date on which this Warrant is issued and delivered
pursuant to the terms of the Securities Purchase Agreement and
before 6:00 p.m., New York, New York time on the fifth (5th)
anniversary of the date of issuance (the "Exercise Period").
3. Certain Agreements of the Company.
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The Company hereby covenants and agrees as follows:
(a) Shares to be Fully Paid. All Warrant Shares will, upon
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issuance in accordance with the terms of this Warrant, be validly
issued, fully paid, and nonassessable and free from all taxes,
liens, and charges with respect to the issue thereof.
(b) Reservation of Shares. During the Exercise Period,
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the Company shall at all times have authorized, and reserved for the
purpose of issuance upon exercise of this Warrant, a sufficient
number of shares of Common Stock to provide for the exercise of
this Warrant.
(c) Listing. The Company shall promptly secure the listing
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of the shares of Common Stock issuable upon exercise of the Warrant
upon each national securities exchange or automated quotation
system, if any, upon which shares of Common Stock are then listed
(subject to official notice of issuance upon exercise of this
Warrant) and shall maintain, so long as any other shares of
Common Stock shall be so listed, such listing of all shares of
Common Stock from time to time issuable upon the exercise of this
Warrant; and the Company shall so list on each national
securities exchange or automated quotation system, as the case
may be, and shall maintain such listing of, any other shares of
capital stock of the Company issuable upon the exercise of this
Warrant if and so long as any shares of the same class shall be
listed on such national securities exchange or automated
quotation system.
(d) Certain Actions Prohibited. The Company will not, by
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amendment of its charter or through any reorganization, transfer
of assets, consolidation, merger, dissolution, issue or sale of
securities, or any other voluntary action, avoid or seek to avoid
the observance or performance of any of the terms to be observed
or performed by it hereunder, but will at all times in good faith
assist in the carrying out of all the provisions of this Warrant
and in the taking of all such action as may reasonably be
requested by the holder of this Warrant in order to protect the
exercise privilege of the holder of this Warrant against dilution
or other impairment, consistent with the tenor and purpose of
this Warrant. Without limiting the generality of the foregoing,
the Company (i) will not increase the par value of any shares of
Common Stock receivable upon the exercise of this Warrant above
the Exercise Price then in effect, and (ii) will take all such
actions as may be necessary or appropriate in order that the
Company may validly and legally issue fully paid and
nonassessable shares of Common Stock upon the exercise of this
Warrant.
(e) Successors and Assigns. This Warrant will be binding
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upon any entity succeeding to the Company by merger, consolidation,
or acquisition of all or substantially all the Company's assets.
4. Antidilution Provisions.
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During the Exercise Period, the Exercise Price and the number of
Warrant Shares shall be subject to adjustment from time to time
as provided in this Paragraph 4.
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In the event that any adjustment of the Exercise Price as
required herein results in a fraction of a cent, such Exercise
Price shall be rounded up to the nearest cent.
(a) Adjustment of Exercise Price and Number of Shares upon
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Issuance of Common Stock. Except as otherwise provided in
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Paragraphs 4(c) and 4(e) hereof, if and whenever on or after the
date of issuance of this Warrant, the Company issues or sells, or
in accordance with Paragraph 4(b) hereof is deemed to have issued
or sold, any shares of Common Stock for no consideration or for a
consideration per share (before deduction of reasonable expenses
or commissions or underwriting discounts or allowances in
connection therewith) less than the Market Price on the date of
issuance (a "Dilutive Issuance"), then immediately upon the
Dilutive Issuance, the Exercise Price will be reduced to a price
determined by multiplying the Exercise Price in effect
immediately prior to the Dilutive Issuance by a fraction, (i) the
numerator of which is an amount equal to the sum of (x) the
number of shares of Common Stock actually outstanding immediately
prior to the Dilutive Issuance, plus (y) the quotient of the
aggregate consideration, calculated as set forth in Paragraph
4(b) hereof, received by the Company upon such Dilutive Issuance
divided by the Market Price in effect immediately prior to the
Dilutive Issuance, and (ii) the denominator of which is the total
number of shares of Common Stock Deemed Outstanding (as defined
below) immediately after the Dilutive Issuance.
(b) Effect on Exercise Price of Certain Events. For
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purposes of determining the adjusted Exercise Price under Paragraph
4(a) hereof, the following will be applicable:
(i) Issuance of Rights or Options. If the Company
in any manner issues or grants any warrants, rights or options,
whether or not immediately exercisable, to subscribe for or to
purchase Common Stock or other securities convertible into or
exchangeable for Common Stock ("Convertible Securities") (such
warrants, rights and options to purchase Common Stock or Convertible
Securities are hereinafter referred to as "Options") and the price
per share for which Common Stock is issuable upon the exercise of
such Options is less than the Market Price on the date of issuance
or grant of such Options, then the maximum total number of shares
of Common Stock issuable upon the exercise of all such Options will,
as of the date of the issuance or grant of such Options, be
deemed to be outstanding and to have been issued and sold by the
Company for such price per share. For purposes of the preceding
sentence, the "price per share for which Common Stock is issuable
upon the exercise of such Options" is determined by dividing (i)
the total amount, if any, received or receivable by the Company
as consideration for the issuance or granting of all such
Options, plus the minimum aggregate amount of additional
consideration, if any, payable to the Company upon the exercise
of all such Options, plus, in the case of Convertible Securities
issuable upon the exercise of such Options, the minimum aggregate
amount of additional consideration payable upon the conversion or
exchange thereof at the time such Convertible Securities first
become convertible or exchangeable, by (ii) the maximum total
number of shares of Common Stock issuable upon the exercise of
all such Options (assuming full conversion of Convertible
Securities, if applicable). No further adjustment to the
Exercise Price will be made upon the actual issuance of such
Common Stock upon the exercise of such Options or upon the
conversion or exchange of Convertible Securities issuable upon
exercise of such Options.
(ii) Issuance of Convertible Securities. If the
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Company in any manner issues or sells any Convertible Securities,
whether or not immediately convertible (other than where the same
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are issuable upon the exercise of Options) and the price per share
for which Common Stock is issuable upon such conversion or exchange
is less than the Market Price on the date of issuance, then the
maximum total number of shares of Common Stock issuable upon the
conversion or exchange of all such Convertible Securities will,
as of the date of the issuance of such Convertible Securities, be
deemed to be outstanding and to have been issued and sold by the
Company for such price per share. For the purposes of the
preceding sentence, the "price per share for which Common Stock
is issuable upon such conversion or exchange" is determined by
dividing (i) the total amount, if any, received or receivable by
the Company as consideration for the issuance or sale of all such
Convertible Securities, plus the minimum aggregate amount of
additional consideration, if any, payable to the Company upon the
conversion or exchange thereof at the time such Convertible
Securities first become convertible or exchangeable, by (ii) the
maximum total number of shares of Common Stock issuable upon the
conversion or exchange of all such Convertible Securities. No
further adjustment to the Exercise Price will be made upon the
actual issuance of such Common Stock upon conversion or exchange
of such Convertible Securities.
(iii) Change in Option Price or Conversion Rate.
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If there is a change at any time in (i) the amount of additional
consideration payable to the Company upon the exercise of any
Options; (ii) the amount of additional consideration, if any,
payable to the Company upon the conversion or exchange of any
Convertible Securities; or (iii) the rate at which any
Convertible Securities are convertible into or exchangeable for
Common Stock (other than under or by reason of provisions
designed to protect against dilution), the Exercise Price in
effect at the time of such change will be readjusted to the
Exercise Price which would have been in effect at such time had
such Options or Convertible Securities still outstanding provided
for such changed additional consideration or changed conversion
rate, as the case may be, at the time initially granted, issued
or sold.
(iv) Treatment of Expired Options and Unexercised
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Convertible Securities. If, in any case, the total number of
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shares of Common Stock issuable upon exercise of any Option or upon
conversion or exchange of any Convertible Securities is not, in
fact, issued and the rights to exercise such Option or to convert
or exchange such Convertible Securities shall have expired or
terminated, the Exercise Price then in effect will be readjusted
to the Exercise Price which would have been in effect at the time
of such expiration or termination had such Option or Convertible
Securities, to the extent outstanding immediately prior to such
expiration or termination (other than in respect of the actual
number of shares of Common Stock issued upon exercise or
conversion thereof), never been issued.
(v) Calculation of Consideration Received. If any
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Common Stock, Options or Convertible Securities are issued, granted
or sold for cash, the consideration received therefor for purposes
of this Warrant will be the amount received by the Company therefor,
before deduction of reasonable commissions, underwriting
discounts or allowances or other reasonable expenses paid or
incurred by the Company in connection with such issuance, grant
or sale. In case any Common Stock, Options or Convertible
Securities are issued or sold for a consideration part or all of
which shall be other than cash, the amount of the consideration
other than cash received by the Company will be the fair value of
such consideration, except where such consideration consists of
securities, in which case the amount of consideration received by
the Company will be the Market Price thereof as of the date of
receipt. In case any Common Stock, Options or Convertible
Securities are issued in connection with any acquisition, merger
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or consolidation in which the Company is the surviving
corporation, the amount of consideration therefor will be deemed
to be the fair value of such portion of the net assets and
business of the non-surviving corporation as is attributable to
such Common Stock, Options or Convertible Securities, as the case
may be. The fair value of any consideration other than cash or
securities will be determined in good faith by the Board of
Directors of the Company.
(vi) Exceptions to Adjustment of Exercise Price. No
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adjustment to the Exercise Price will be made (i) upon the exercise
of any warrants, options or convertible securities granted, issued and
outstanding on the date of issuance of this Warrant; (ii) upon
the grant or exercise of any stock or options which may hereafter
be granted or exercised under any employee benefit plan, stock
option plan or restricted stock plan of the Company now existing
or to be implemented in the future, so long as the issuance of
such stock or options is approved by a majority of the
independent members of the Board of Directors of the Company or a
majority of the members of a committee of independent directors
established for such purpose; or (iii) upon the exercise of the
Warrants.
(c) Subdivision or Combination of Common Stock. If the
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Company at any time subdivides (by any stock split, stock dividend,
recapitalization, reorganization, reclassification or otherwise)
the shares of Common Stock acquirable hereunder into a greater
number of shares, then, after the date of record for effecting
such subdivision, the Exercise Price in effect immediately prior
to such subdivision will be proportionately reduced. If the
Company at any time combines (by reverse stock split,
recapitalization, reorganization, reclassification or otherwise)
the shares of Common Stock acquirable hereunder into a smaller
number of shares, then, after the date of record for effecting
such combination, the Exercise Price in effect immediately prior
to such combination will be proportionately increased.
(d) Adjustment in Number of Shares. Upon each adjustment
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of the Exercise Price pursuant to the provisions of this Paragraph 4,
the number of shares of Common Stock issuable upon exercise of
this Warrant shall be adjusted by multiplying a number equal to
the Exercise Price in effect immediately prior to such adjustment
by the number of shares of Common Stock issuable upon exercise of
this Warrant immediately prior to such adjustment and dividing
the product so obtained by the adjusted Exercise Price.
(e) Consolidation, Merger or Sale. In case of any
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consolidation of the Company with, or merger of the Company into any
other corporation, or in case of any sale or conveyance of all or
substantially all of the assets of the Company other than in
connection with a plan of complete liquidation of the Company,
then as a condition of such consolidation, merger or sale or
conveyance, adequate provision will be made whereby the holder of
this Warrant will have the right to acquire and receive upon
exercise of this Warrant in lieu of the shares of Common Stock
immediately theretofore acquirable upon the exercise of this
Warrant, such shares of stock, securities or assets as may be
issued or payable with respect to or in exchange for the number
of shares of Common Stock immediately theretofore acquirable and
receivable upon exercise of this Warrant had such consolidation,
merger or sale or conveyance not taken place. In any such case,
the Company will make appropriate provision to insure that the
provisions of this Paragraph 4 hereof will thereafter be
applicable as nearly as may be in relation to any shares of stock
or securities thereafter deliverable upon the exercise of this
Warrant. The Company will not effect any consolidation, merger
or sale or conveyance unless prior to the consummation thereof,
the successor corporation (if other than the Company) assumes by
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written instrument the obligations under this Paragraph 4 and the
obligations to deliver to the holder of this Warrant such shares
of stock, securities or assets as, in accordance with the
foregoing provisions, the holder may be entitled to acquire.
(f) Distribution of Assets. In case the Company shall
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declare or make any distribution of its assets (including cash) to
holders of Common Stock as a partial liquidating dividend, by way
of return of capital or otherwise, then, after the date of record
for determining shareholders entitled to such distribution, but
prior to the date of distribution, the holder of this Warrant
shall be entitled upon exercise of this Warrant for the purchase
of any or all of the shares of Common Stock subject hereto, to
receive the amount of such assets which would have been payable
to the holder had such holder been the holder of such shares of
Common Stock on the record date for the determination of
shareholders entitled to such distribution.
(g) Notice of Adjustment. Upon the occurrence of any
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event which requires any adjustment of the Exercise Price, then, and
in each such case, the Company shall give notice thereof to the
holder of this Warrant, which notice shall state the Exercise
Price resulting from such adjustment and the increase or decrease
in the number of Warrant Shares purchasable at such price upon
exercise, setting forth in reasonable detail the method of
calculation and the facts upon which such calculation is based.
Such calculation shall be certified by the Chief Financial
Officer of the Company.
(h) Minimum Adjustment of Exercise Price. No adjustment
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of the Exercise Price shall be made in an amount of less than 1% of
the Exercise Price in effect at the time such adjustment is otherwise
required to be made, but any such lesser adjustment shall be
carried forward and shall be made at the time and together with
the next subsequent adjustment which, together with any
adjustments so carried forward, shall amount to not less than 1%
of such Exercise Price.
(i) No Fractional Shares. No fractional shares of Common
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Stock are to be issued upon the exercise of this Warrant, but the
Company shall pay a cash adjustment in respect of any fractional
share which would otherwise be issuable in an amount equal to the
same fraction of the Market Price of a share of Common Stock on
the date of such exercise.
(j) Other Notices. In case at any time:
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(i) the Company shall declare any dividend upon the
Common Stock payable in shares of stock of any class or make any other
distribution (including dividends or distributions payable in
cash out of retained earnings) to the holders of the Common
Stock;
(ii) the Company shall offer for subscription pro rata
to the holders of the Common Stock any additional shares of stock of
any class or other rights;
(iii) there shall be any capital reorganization of the
Company, or reclassification of the Common Stock, or
consolidation or merger of the Company with or into, or sale of
all or substantially all its assets to, another corporation or
entity; or
(iv) there shall be a voluntary or involuntary
dissolution, liquidation or winding up of the Company;
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then, in each such case, the Company shall give to the holder of
this Warrant (a) notice of the date on which the books of the
Company shall close or a record shall be taken for determining
the holders of Common Stock entitled to receive any such divi
dend, distribution, or subscription rights or for determining the
holders of Common Stock entitled to vote in respect of any such
reorganization, reclassification, consolidation, merger, sale,
dissolution, liquidation or winding-up and (b) in the case of any
such reorganization, reclassification, consolidation, merger,
sale, dissolution, liquidation or winding-up, notice of the date
(or, if not then known, a reasonable approximation thereof by the
Company) when the same shall take place. Such notice shall also
specify the date on which the holders of Common Stock shall be
entitled to receive such dividend, distribution, or subscription
rights or to exchange their Common Stock for stock or other
securities or property deliverable upon such reorganization, re
classification, consolidation, merger, sale, dissolution,
liquidation, or winding-up, as the case may be. Such notice
shall be given at least 30 days prior to the record date or the
date on which the Company's books are closed in respect thereto.
Failure to give any such notice or any defect therein shall not
affect the validity of the proceedings referred to in clauses
(i), (ii), (iii) and (iv) above.
(k) Certain Events. If any event occurs of the type
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contemplated by the adjustment provisions of this Paragraph 4 but
not expressly provided for by such provisions, the Company will
give notice of such event as provided in Paragraph 4(g) hereof,
and the Company's Board of Directors will make an appropriate
adjustment in the Exercise Price and the number of shares of
Common Stock acquirable upon exercise of this Warrant so that the
rights of the holder shall be neither enhanced nor diminished by
such event.
(l) Certain Definitions.
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(i) "Common Stock Deemed Outstanding" shall mean
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the number of shares of Common Stock actually outstanding (not
including shares of Common Stock held in the treasury of the Company),
plus (x) pursuant to Paragraph 4(b)(i) hereof, the maximum total
number of shares of Common Stock issuable upon the exercise of
Options, as of the date of such issuance or grant of such Options, if
any, and (y) pursuant to Paragraph 4(b)(ii) hereof, the maximum total
number of shares of Common Stock issuable upon conversion or
exchange of Convertible Securities, as of the date of issuance of
such Convertible Securities, if any.
(ii) "Market Price," as of any date, (i) means the
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average of the last reported sale prices for the shares of Common
Stock on the OTCBB for the five (5) Trading Days immediately
preceding such date as reported by Bloomberg, or (ii) if the OTCBB
is not the principal trading market for the shares of Common Stock, the
average of the last reported sale prices on the principal trading
market for the Common Stock during the same period as reported by
Bloomberg, or (iii) if market value cannot be calculated as of
such date on any of the foregoing bases, the Market Price shall
be the fair market value as reasonably determined in good faith
by (a) the Board of Directors of the Company or, at the option of
a majority-in-interest of the holders of the outstanding Warrants
by (b) an independent investment bank of nationally recognized
standing in the valuation of businesses similar to the business
of the corporation. The manner of determining the Market Price of
the Common Stock set forth in the foregoing definition shall
apply with respect to any other security in respect of which a
determination as to market value must be made hereunder.
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(iii) "Common Stock," for purposes of this Paragraph
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4, includes the Common Stock, par value $.001 per share, and any
additional class of stock of the Company having no preference as
to dividends or distributions on liquidation, provided that the
shares purchasable pursuant to this Warrant shall include only
shares of Common Stock, par value $.001 per share, in respect of
which this Warrant is exercisable, or shares resulting from any
subdivision or combination of such Common Stock, or in the case
of any reorganization, reclassification, consolidation, merger,
or sale of the character referred to in Paragraph 4(e) hereof,
the stock or other securities or property provided for in such
Paragraph.
5. Issue Tax.
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The issuance of certificates for Warrant Shares upon the exercise of
this Warrant shall be made without charge to the holder of this
Warrant or such shares for any issuance tax or other costs in
respect thereof, provided that the Company shall not be required
to pay any tax which may be payable in respect of any transfer
involved in the issuance and delivery of any certificate in a
name other than the holder of this Warrant.
6. No Rights or Liabilities as a Shareholder.
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This Warrant shall not entitle the holder hereof to any voting
rights or other rights as a shareholder of the Company. No
provision of this Warrant, in the absence of affirmative action
by the holder hereof to purchase Warrant Shares, and no mere
enumeration herein of the rights or privileges of the holder
hereof, shall give rise to any liability of such holder for the
Exercise Price or as a shareholder of the Company, whether such
liability is asserted by the Company or by creditors of the
Company.
7. Transfer, Exchange, and Replacement of Warrant.
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(a) Restriction on Transfer. This Warrant and the rights
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granted to the holder hereof are transferable, in whole or in
part, upon surrender of this Warrant, together with a properly
executed assignment in the form attached hereto, at the office or
agency of the Company referred to in Paragraph 7(e) below, pro
vided, however, that any transfer or assignment shall be subject
to the conditions set forth in Paragraph 7(f) hereof and to the
applicable provisions of the Securities Purchase Agreement.
Until due presentment for registration of transfer on the books
of the Company, the Company may treat the registered holder
hereof as the owner and holder hereof for all purposes, and the
Company shall not be affected by any notice to the contrary.
Notwithstanding anything to the contrary contained herein, the
registration rights described in Paragraph 8 are assignable only
in accordance with the provisions of that certain Registration
Rights Agreement, dated March 30, 2005, by and among the Company
and the other signatories thereto (the "Registration Rights
Agreement").
(b) Warrant Exchangeable for Different Denominations. This
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Warrant is exchangeable, upon the surrender hereof by the holder
hereof at the office or agency of the Company referred to in
Paragraph 7(e) below, for new Warrants of like tenor representing
in the aggregate the right to purchase the number of shares of
Common Stock which may be purchased hereunder, each of such new
Warrants to represent the right to purchase such number of shares
as shall be designated by the holder hereof at the time of such
surrender.
(c) Replacement of Warrant. Upon receipt of evidence
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reasonably satisfactory to the Company of the loss, theft, destruction,
or mutilation of this Warrant and, in the case of any such loss,
theft, or destruction, upon delivery of an indemnity agreement
reasonably satisfactory in form and amount to the Company, or, in
the case of any such mutilation, upon surrender and cancellation
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of this Warrant, the Company, at its expense, will execute and
deliver, in lieu thereof, a new Warrant of like tenor.
(d) Cancellation; Payment of Expenses. Upon the surrender
---------------------------------
of this Warrant in connection with any transfer, exchange, or
replacement as provided in this Paragraph 7, this Warrant shall
be promptly canceled by the Company. The Company shall pay all
taxes (other than securities transfer taxes) and all other
expenses (other than legal expenses, if any, incurred by the
holder or transferees) and charges payable in connection with the
preparation, execution, and delivery of Warrants pursuant to this
Paragraph 7.
(e) Register. The Company shall maintain, at its principal
--------
executive offices (or such other office or agency of the Company
as it may designate by notice to the holder hereof), a register
for this Warrant, in which the Company shall record the name and
address of the person in whose name this Warrant has been issued,
as well as the name and address of each transferee and each prior
owner of this Warrant.
(f) Exercise or Transfer Without Registration. If, at
-----------------------------------------
the time of the surrender of this Warrant in connection with any
exercise, transfer, or exchange of this Warrant, this Warrant (or, in
the case of any exercise, the Warrant Shares issuable hereunder),
shall not be registered under the Securities Act of 1933, as
amended (the "Securities Act") and under applicable state
securities or blue sky laws, the Company may require, as a
condition of allowing such exercise, transfer, or exchange, (i)
that the holder or transferee of this Warrant, as the case may
be, furnish to the Company a written opinion of counsel, which
opinion and counsel are acceptable to the Company, to the effect
that such exercise, transfer, or exchange may be made without
registration under said 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) promulgated under
the Securities Act; provided that no such opinion, letter or
status as an "accredited investor" shall be required in
connection with a transfer pursuant to Rule 144 under the
Securities Act. The first holder of this Warrant, by taking and
holding the same, represents to the Company that such holder is
acquiring this Warrant for investment and not with a view to the
distribution thereof.
8. Registration Rights.
-------------------
The initial holder of this Warrant (and certain assignees thereof) is
entitled to the benefit of such registration rights in respect of
the Warrant Shares as are set forth in Section 2 of the
Registration Rights Agreement.
9. Notices.
-------
All notices, requests, and other communications required or
permitted to be given or delivered hereunder to the holder of
this Warrant shall be in writing, and shall be personally
delivered, or shall be sent by certified or registered mail or by
recognized overnight mail courier, postage prepaid and addressed,
to such holder at the address shown for such holder on the books
of the Company, or at such other address as shall have been
furnished to the Company by notice from such holder. All
notices, requests, and other communications required or permitted
to be given or delivered hereunder to the Company shall be in
writing, and shall be personally delivered, or shall be sent by
certified or registered mail or by recognized overnight mail
courier, postage prepaid and addressed, to the office of the
Company at 0000 Xxxxxxxx Xxxx Xxxx, Xxxxx 000, Xxxx Xxxxx, XX
00000, Attention: Chief Executive Officer, or at such other
address as shall have been furnished to the holder of this
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Warrant by notice from the Company. Any such notice, request, or
other communication may be sent by facsimile, but shall in such
case be subsequently confirmed by a writing personally delivered
or sent by certified or registered mail or by recognized
overnight mail courier as provided above. All notices, requests,
and other communications shall be deemed to have been given
either at the time of the receipt thereof by the person entitled
to receive such notice at the address of such person for purposes
of this Paragraph 9, or, if mailed by registered or certified
mail or with a recognized overnight mail courier upon deposit
with the United States Post Office or such overnight mail
courier, if postage is prepaid and the mailing is properly
addressed, as the case may be.
10. Governing Law.
-------------
THIS WARRANT SHALL BE ENFORCED, GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE,
WITHOUT REGARD TO THE PRINCIPLES OF CONFLICT OF LAWS. THE
PARTIES HERETO HEREBY SUBMIT TO THE EXCLUSIVE JURISDICTION OF THE
UNITED STATES FEDERAL COURTS LOCATED IN NEW YORK, NEW YORK WITH
RESPECT TO ANY DISPUTE ARISING UNDER THIS WARRANT, THE AGREEMENTS
ENTERED INTO IN CONNECTION HEREWITH OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY. BOTH PARTIES IRREVOCABLY WAIVE
THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH
SUIT OR PROCEEDING. BOTH PARTIES FURTHER AGREE THAT SERVICE OF
PROCESS UPON A PARTY MAILED BY FIRST CLASS MAIL SHALL BE DEEMED
IN EVERY RESPECT EFFECTIVE SERVICE OF PROCESS UPON THE PARTY IN
ANY SUCH SUIT OR PROCEEDING. NOTHING HEREIN SHALL AFFECT EITHER
PARTY'S RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY
LAW. BOTH PARTIES AGREE THAT A FINAL NON-APPEALABLE JUDGMENT IN
ANY SUCH SUIT OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE
ENFORCED IN OTHER JURISDICTIONS BY SUIT ON SUCH JUDGMENT OR IN
ANY OTHER LAWFUL MANNER. THE PARTY WHICH DOES NOT PREVAIL IN ANY
DISPUTE ARISING UNDER THIS WARRANT SHALL BE RESPONSIBLE FOR ALL
FEES AND EXPENSES, INCLUDING ATTORNEYS' FEES, INCURRED BY THE
PREVAILING PARTY IN CONNECTION WITH SUCH DISPUTE.
11. Miscellaneous.
-------------
(a) Amendments. This Warrant and any provision hereof
----------
may only be amended by an instrument in writing signed by the Company
and the holder hereof.
(b) Descriptive Headings. The descriptive headings of the
--------------------
several paragraphs of this Warrant are inserted for purposes of
reference only, and shall not affect the meaning or construction
of any of the provisions hereof.
(c) Cashless Exercise. Notwithstanding anything to the
-----------------
contrary contained in this Warrant, if the resale of the Warrant
Shares by the holder is not then registered pursuant to an effective
registration statement under the Securities Act, this Warrant may
be exercised by presentation and surrender of this Warrant to the
Company at its principal executive offices with a written notice
of the holder's intention to effect a cashless exercise,
including a calculation of the number of shares of Common Stock
to be issued upon such exercise in accordance with the terms
hereof (a "Cashless Exercise"). In the event of a Cashless
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Exercise, in lieu of paying the Exercise Price in cash, the
holder shall surrender this Warrant for that number of shares of
Common Stock determined by multiplying the number of Warrant
Shares to which it would otherwise be entitled by a fraction, the
numerator of which shall be the difference between the then
current Market Price per share of the Common Stock and the
Exercise Price, and the denominator of which shall be the then
current Market Price per share of Common Stock. For example, if
the holder is exercising 100,000 Warrants with a per Warrant
exercise price of $0.75 per share through a cashless exercise
when the Common Stock's current Market Price per share is $2.00
per share, then upon such Cashless Exercise the holder will
receive 62,500 shares of Common Stock.
(d) Remedies. The Company acknowledges that a breach by
--------
it of its obligations hereunder will cause irreparable harm to the
holder, by vitiating the intent and purpose of the transaction
contemplated hereby. Accordingly, the Company acknowledges that
the remedy at law for a breach of its obligations under this
Warrant will be inadequate and agrees, in the event of a breach
or threatened breach by the Company of the provisions of this
Warrant, that the holder shall be entitled, in addition to all
other available remedies at law or in equity, and in addition to
the penalties assessable herein, to an injunction or injunctions
restraining, preventing or curing any breach of this Warrant and
to enforce specifically the terms and provisions thereof, without
the necessity of showing economic loss and without any bond or
other security being required.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the Company has caused this Warrant
to be signed by its duly authorized officer.
MED GEN, INC.
By:
_______________________________
Xxxx X. Xxxxxxx
Chairman and Chief Executive
Officer
Dated as of March 30, 2005
FORM OF EXERCISE AGREEMENT
Dated: ________ __, 200_
To: ______________________
The undersigned, pursuant to the provisions set forth in the
within Warrant, hereby agrees to purchase ________ shares of
Common Stock covered by such Warrant, and makes payment herewith
in full therefor at the price per share provided by such Warrant
in cash or by certified or official bank check in the amount of,
or, if the resale of such Common Stock by the undersigned is not
currently registered pursuant to an effective registration
statement under the Securities Act of 1933, as amended, by
surrender of securities issued by the Company (including a
portion of the Warrant) having a market value (in the case of a
portion of this Warrant, determined in accordance with Section
11(c) of the Warrant) equal to $_________. Please issue a
certificate or certificates for such shares of Common Stock in
the name of and pay any cash for any fractional share to:
Name:
______________________________
Signature:
Address:______________________
______________________________
Note: The above signature
should correspond
exactly with the
name on the face of
the within Warrant,
if applicable.
and, if said number of shares of Common Stock shall not be all
the shares purchasable under the within Warrant, a new Warrant is
to be issued in the name of said undersigned covering the balance
of the shares purchasable thereunder less any fraction of a share
paid in cash.
FORM OF ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sells, assigns,
and transfers all the rights of the undersigned under the within
Warrant, with respect to the number of shares of Common Stock
covered thereby set forth hereinbelow, to:
Name of Assignee Address No of Shares
---------------- ------- ------------
, and hereby irrevocably constitutes and appoints
___________________________________ as agent and attorney-in-fact
to transfer said Warrant on the books of the within-named
corporation, with full power of substitution in the premises.
Dated: ________ __, 200_
In the presence of: ___________________________________
Name:______________________________
Signature:_________________________
Title of Signing Officer or Agent
(if any):
___________________________________
Address:
___________________________________
___________________________________
Note: The above signature
should correspond exactly
with the name on the face
of the within Warrant, if
applicable.
