Void after 5:30 P.M. New York City time on November 7, 2010 SERIES A COMMON STOCK PURCHASE WARRANT OF GENESIS PHARMACEUTICALS ENTERPRISES, INC.
Exhibit
4.2
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WA-1
|
Warrant
to Purchase
**10,000,000**
Shares
of Common Stock
|
THIS
WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF THIS WARRANT
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY
STATE SECURITIES LAWS. NEITHER THIS WARRANT NOR SUCH SHARES OF COMMON STOCK
MAY
BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION STATEMENT UNDER SUCH SECURITIES ACT AND ANY APPLICABLE
STATE SECURITIES LAW OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE
ISSUING CORPORATION THAT SUCH REGISTRATION IS NOT
REQUIRED.
Void
after 5:30 P.M. New York City time on November 7, 2010
SERIES
A COMMON STOCK PURCHASE WARRANT
OF
This
is
to certify that, FOR VALUE RECEIVED, ▇▇▇▇ Investments, LLC, a Delaware limited
liability company, or registered assigns (“Holder”), is entitled to purchase, on
the terms and subject to the provisions of this Warrant, from Genesis
Pharmaceuticals Enterprises, Inc., a Florida corporation (the “Company”), at an
exercise price (the “Exercise Price”) of thirty two cents ($0.32) per share, ten
million (10,000,000) shares of common stock, par value $.001 per share (“Common
Stock”), of the Company at any time during the period (the “Exercise Period”)
commencing on the date of this Warrant and ending at 5:30 P.M. New York City
time, on November 7, 2010; provided, however, that if such date is a day on
which banking institutions in the State of New York are authorized by law to
close, then on the next succeeding day which such banks are not authorized
to
close. The number of shares of Common Stock to be issued upon the exercise
or
conversion of this Warrant and the price to be paid for a share of Common Stock
may be adjusted from time to time in the manner set forth in this Warrant.
The
shares of Common Stock deliverable upon such exercise or conversion, and as
adjusted from time to time, are hereinafter sometimes referred to as “Warrant
Shares,” and the exercise price for the purchase of a share of Common Stock
pursuant to this Warrant in effect at any time, as the same may be adjusted
from
time to time, is hereinafter sometimes referred to as the “Exercise Price.” This
Warrant was issued pursuant to a Securities Purchase Agreement (the “Purchase
Agreement”) dated November 6, 2007, between the Company, the initial holder of
this Warrant and the other investors named therein, and the holder of this
Warrant is entitled to the benefits of the Purchase Agreement and the
Registration Rights Agreement, as defined in the Purchase Agreement. The date
of
the initial issuance of this Warrant is the Closing Date under the Purchase
Agreement. Reference in this Warrant to “all of the Warrants” or words of like
import shall relate to all of the Series A Common Stock Purchase Warrants issued
pursuant to the Purchase Agreement.
1. Exercise
of Warrant.
This
Warrant may be exercised in whole at any time or in part from time to time
during the Exercise Period by presentation and surrender hereof to the Company
at its principal office, or at the office of its stock transfer agent, if any,
with the Purchase Form annexed hereto duly executed and accompanied by payment
of the Exercise Price for the number of shares of Common Stock specified in
such
form. Payment of the Exercise Price may be made either by check (subject to
collection) or wire transfer in the amount of the Exercise Price. If this
Warrant should be exercised in part only, the Company shall, upon surrender
of
this Warrant for cancellation, execute and deliver a new Warrant evidencing
the
rights of the Holder hereof to purchase the balance of the shares of Common
Stock purchasable hereunder. Notwithstanding the foregoing, the holder of this
Warrant shall not be required to physically deliver this Warrant upon exercise
of this Warrant pursuant to this Section 1(a). Upon receipt by the Company
of
this Warrant at its office, or by the stock transfer agent of the Company at
its
office, in proper form for exercise, or upon delivery of the notice of exercise
without delivery of this Warrant, the Holder shall be deemed to be the holder
of
record of the shares of Common Stock issuable upon such exercise,
notwithstanding that the stock transfer books of the Company shall then be
closed or that certificates representing such shares of Common Stock shall
not
then be actually delivered to the Holder.
2. Reservation
and Delivery of Shares.
(a) The
Company hereby agrees that at all times there shall be reserved for issuance
upon exercise of this Warrant such number of shares of Common Stock as shall
be
required for issuance and delivery upon exercise or conversion of this Warrant
and that it shall not increase the par value of the Common Stock.
(b) Except
as
otherwise set forth herein, upon delivery of a completed Purchase Form
accompanied, if the exercise is not a cashless exercise, by payment of the
Exercise Price, not later than three (3) business days after the Exercise Date
(such third day being the “Delivery Date”), the Company shall deliver to the
Holder a certificate or certificates which, after the effective date of a
registration statement covering the shares of Common Stock issuable upon
exercise of this Warrant (the “Effective Date”), shall be free of restrictive
legends and trading restrictions (other than those required by the Securities
Act) representing the number of shares of Common Stock being acquired upon
such
exercise. If in the case of any exercise of this Warrant such certificate or
certificates are not delivered to or as directed by the applicable Holder by
the
second day after the Delivery Date, the Holder shall be entitled to elect by
written notice to the Company at any time on or before its receipt of such
certificate or certificates thereafter, to rescind such conversion, in which
event the conversion shall be deemed void ab initio.
(c) The
Company’s obligations to issue and deliver the Common Stock upon exercise of
this Warrant in accordance with the terms hereof are absolute and unconditional,
irrespective of any action or inaction by the Holder to enforce the same, any
waiver or consent with respect to any provision hereof, the recovery of any
judgment against any Person or any action to enforce the same, or any setoff,
counterclaim, recoupment, limitation or termination, or any breach or alleged
breach by the Holder or any other Person of any obligation to the Company or
any
violation or alleged violation of law by the Holder or any other Person, and
irrespective of any other circumstance which might otherwise limit such
obligation of the Company to the Holder in connection with the issuance of
such
shares. In the event the Holder shall elect to exercise this Warrant in whole
or
in part, the Company may not refuse to effect such exercise based on any claim
that the Holder or any one associated or affiliated with the Holder of has
been
engaged in any violation of law, agreement or for any other reason unless an
injunction from a court, on notice, restraining and or enjoining such exercise
shall have been sought and obtained and the Company posts a surety bond for
the
benefit of the Holder in the amount of 150% of the Value, which is subject
to
the injunction, which bond shall remain in effect until the completion of
arbitration or litigation of the dispute and the proceeds of which shall be
payable to the Holder to the extent it obtains judgment. In the absence of
an
injunction precluding the same, the Company shall issue the Common Stock upon
a
properly executed Purchase Form.
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(d) If
the
Company fails to deliver to the Holder such certificate or certificates pursuant
to this Section 2(b) by the Delivery Date, and if after such Delivery Date
the
Holder purchases (in an open market transaction or otherwise) Common Stock
to
deliver in satisfaction of a sale by such Holder of the Common Stock which
the
Holder was entitled to receive upon the exercise relating to such Delivery
Date
(a “Buy-In”),
then
the Company shall pay in cash to the Holder the amount by which (a) the Holder’s
total purchase price (including brokerage commissions, if any) for the Common
Stock so purchased exceeds (i) the product of (x) the aggregate number of shares
of Common Stock that such Holder was entitled to receive from the exercise
at
issue multiplied by (y) the price at which the sell order giving rise to such
purchase obligation was executed. 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 this Warrant with respect to which the aggregate sale
price giving rise to such purchase obligation is $10,000, under 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, together with applicable confirmations
and other evidence reasonably requested by the Borrowers. Nothing in this
Section 2(d) 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 this Warrant pursuant to its terms.
3. Fractional
Shares.
No
fractional shares or script representing fractional shares shall be issued
upon
the exercise of this Warrant. All fractional shares shall be carried forward
and
any fractional shares which remain after the Holder exercises this Warrant
in
full shall be dropped and eliminated.
4. Exchange,
Transfer, Assignment or Loss of Warrant.
This
Warrant is exchangeable, without expense, at the option of the Holder, upon
presentation and surrender hereof to the Company or at the office of its stock
transfer agent, if any, for other Warrants of different denominations entitling
the holder thereof to purchase in the aggregate the same number of shares of
Common Stock purchasable hereunder. Subject to the provisions of Section 10
of
this Warrant, upon surrender of this Warrant to the Company or at the office
of
its stock transfer agent, if any, with the Assignment Form annexed hereto duly
executed and funds sufficient to pay any transfer tax, the Company shall,
without charge, execute and deliver a new Warrant in the name of the assignee
named in such instrument of assignment and this Warrant shall promptly be
canceled. This Warrant may be divided or combined with other Warrants which
carry the same rights upon presentation hereof at the office of the Company
or
at the office of its stock transfer agent, if any, together with a written
notice specifying the names and denominations in which new Warrants are to
be
issued and signed by the Holder hereof. The term “Warrant” as used herein
includes any Warrants into which this Warrant may be divided or exchanged.
Upon
receipt by the Company of evidence satisfactory to it of the loss, theft,
destruction or mutilation of this Warrant, and (in the case of loss, theft
or
destruction) of reasonably satisfactory indemnification, and upon surrender
and
cancellation of this Warrant, if mutilated, the Company will execute and deliver
a new Warrant of like tenor. Any such new Warrant executed and delivered shall
constitute an additional contractual obligation on the part of the Company,
whether or not this Warrant so lost, stolen, destroyed, or mutilated shall
be at
any time enforceable by anyone.
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5. Rights
of the Holder.
The
Holder shall not, by virtue of this Warrant, be entitled to any rights of a
stockholder in the Company, either at law or equity, and the rights of the
Holder are limited to those expressed in the Warrant, the Purchase Agreement
and
the Registration Rights Agreement and are not enforceable against the Company
except to the extent set forth herein and therein.
6. Adjustments
To Exercise Price.
The
Exercise Price in effect at any time and the number and kind of securities
purchasable upon exercise of each Warrant shall be subject to adjustment as
follows:
(a) In
case
the Company shall, subsequent to the date of the initial issuance of this
Warrant, (i) pay a dividend or make a distribution on its shares of Common
Stock
in shares of Common Stock, (ii) subdivide or reclassify its outstanding Common
Stock into a greater number of shares or otherwise effect a stock split or
distribution, or (iii) combine or reclassify its outstanding Common Stock into
a
smaller number of shares or otherwise effect a reverse split, then,
in
each such event, the Exercise Price shall, simultaneously with the happening
of
such event, be adjusted by multiplying the then Exercise Price by a fraction,
the numerator of which shall be the number of shares of Common Stock outstanding
immediately prior to such event and the denominator of which shall be the number
of shares of Common Stock outstanding immediately after such event, and the
product so obtained shall thereafter be the Exercise Price then in effect.
The
Exercise Price, as so adjusted, shall be readjusted in the same manner upon
the
happening of any successive event or events described herein in this
Section 6.
(b) From
and
after the Closing Date and as long as this Warrant is outstanding, except for
(a) Exempt Issuances, as defined in the Purchase Agreement, (b) issuances
covered by this Section 6(b), or (c) an issuance of Common Stock upon exercise
or upon conversion of warrants, options or other convertible securities for
which an adjustment has already been made pursuant to this Section 6(b), as
to
all of which this Section 6(b) does not apply, if the Company closes on the
sale
or issuance of Common Stock at a price, or issues Convertible Securities with
a
Exercise Price or exercise price per share which is less than the Exercise
Price
then in effect (such lower sales price, conversion or exercise price, as the
case may be, being referred to as the “Lower Price”), the Exercise Price shall
be reduced to the Lower Price. For purpose of determining the exercise price
of
warrants issued by the Company, the price, if any, paid per share for the
warrants shall be added to the exercise price of the warrants.
(c) The
number of shares of Common Stock that the Holder of this Warrant shall
thereafter, on the exercise hereof as provided in Section 1, be entitled to
receive shall be adjusted to a number determined by multiplying the number
of
shares of Common Stock theretofore be issuable on such exercise by a fraction
of
which (a) the numerator is the old Exercise Price and (b) the
denominator is the Exercise Price as adjusted. In
no
event shall the Exercise Price per share be less than the par value per share,
and, if any adjustment made pursuant to said Section 6 would result in an
Exercise Price which would be less than the par value per share, then, in such
event, the Exercise Price per share shall be the par value per share; provided,
however, that the limitation contained in this sentence shall not affect the
number of shares of Common Stock issuable upon exercise or conversion of this
Warrant.
(d) In
the
event that at any time, as a result of an adjustment made pursuant to this
Section 6, the Holder of any Warrant thereafter shall become entitled to receive
any shares of the Company, other than 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 Common Stock contained in
this
Section 6.
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(e) Irrespective
of any adjustments in the Exercise Price or the number or kind of shares
purchasable upon exercise of Warrants, Warrants theretofore or thereafter issued
may continue to express the same price and number and kind of shares as are
stated in this and similar Warrants initially issued by the
Company.
7. Officer’s
Certificate.
Whenever the Exercise Price shall be adjusted as required by the provisions
of
Section 6 of this Warrant, the Company shall forthwith file in the custody
of
its Secretary or an Assistant Secretary at its principal office and with its
stock transfer agent, if any, an officer’s certificate showing the adjusted
Exercise Price and the adjusted number of shares of Common Stock issuable upon
exercise of each Warrant, determined as herein provided, setting forth in
reasonable detail the facts requiring such adjustment, including a statement
of
the number of additional shares of Common Stock, if any, and such other facts
as
shall be necessary to show the reason for and the manner of computing such
adjustment. Each such officer’s certificate shall be made available at all
reasonable times for inspection by the Holder, and the Company shall, forthwith
after each such adjustment, mail, by certified mail, return receipt requested
and by telecopier and e-mail, a copy of such certificate to the Holder at the
Holder’s address set forth in the Company’s Warrant Register.
8. Notices
To Warrant Holders.
So long
as this Warrant shall be outstanding, (a) if the Company shall pay any dividend
or make any distribution upon Common Stock (other than a regular cash dividend
payable out of retained earnings) or (b) if the Company shall offer to the
holders of Common Stock for subscription or purchase by them any share of any
class or any other rights or (c) if any capital reorganization of the Company,
reclassification of the capital stock of the Company, consolidation or merger
of
the Company with or into another corporation, sale, lease or transfer of all
or
substantially all of the property and assets of the Company to another
corporation, or voluntary or involuntary dissolution, liquidation or winding
up
of the Company shall be effected, then in any such case, the Company shall
cause
to be mailed by certified mail, return receipt requested, to the Holder, at
least fifteen days prior to the date specified in clauses (i) and (ii), as
the
case may be, of this Section 8 a notice containing a brief description of the
proposed action and stating the date on which (i) a record is to be taken for
the purpose of such dividend, distribution or rights, or (ii) such
reclassification, reorganization, consolidation, merger, conveyance, lease,
dissolution, liquidation or winding up is to take place and the date, if any
is
to be fixed, as of which the holders of Common Stock or other securities shall
receive cash or other property deliverable upon such reclassification,
reorganization, consolidation, merger, conveyance, dissolution, liquidation
or
winding up.
9. Reclassification,
Reorganization or Merger.
In case
of any reclassification, capital reorganization or other change of outstanding
shares of Common Stock of the Company, or in case of any consolidation or merger
of the Company with or into another corporation (other than a merger in which
the Company is the continuing corporation and which does not result in any
reclassification, capital reorganization or other change of outstanding shares
of Common Stock of the class issuable upon exercise of this Warrant) or in
case
of any sale, lease or conveyance to another corporation of the property of
the
Company as an entirety, the Company shall, as a condition precedent to such
transaction, cause effective provisions to be made so that the Holder shall
have
the right thereafter by exercising this Warrant, to purchase the kind and amount
of shares of stock and other securities and property receivable upon such
reclassification, capital reorganization and other change, consolidation,
merger, sale or conveyance by a holder of the number of shares of Common Stock
which might have been purchased upon exercise of this Warrant immediately prior
to such reclassification, change, consolidation, merger, sale or conveyance.
Any
such provision shall include provision for adjustments which shall be as nearly
equivalent as may be practicable to the adjustments provided for in this
Warrant. The foregoing provisions of this Section 9 shall similarly apply to
successive reclassifications, capital reorganizations and changes of shares
of
Common Stock and to successive consolidations, mergers, sales or conveyances.
Notwithstanding the foregoing, in the event that, as a result of any merger,
consolidation, sale of assets or similar transaction, all of the holders of
Common Stock receive and are entitled to receive no consideration other than
cash in respect of their shares of Common Stock, then, at the effective time
of
the transaction, the rights to purchase Common Stock pursuant to the Warrants
shall terminate, and the holders of the Warrants shall, notwithstanding any
other provisions of this Warrant, receive in respect of each Warrant to purchase
one (1) share of Common Stock, upon presentation of the Warrant Certificate,
the
amount by which the consideration per share of Common Stock payable to the
holders of Common Stock at such effective time exceeds the Exercise Price in
effect on such effective date, without giving effect to the transaction;
provided, however, that if such transaction would, but for this Section 9,
result in a reduction in the Exercise Price pursuant to Section 6(c) of this
Warrant, the Exercise Price shall be reduced to reflect that transaction. In
the
event that, in such a transaction, the value of the consideration to be received
per share of Common Stock is equal to or less than the Exercise Price, the
Warrants shall automatically terminate and no consideration will be paid with
respect thereof.
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10. Transfer
to Company with the Securities Act.
(a) The
Holder of this Warrant shall be entitled to the benefits of the Registration
Rights Agreement.
(b) This
Warrant or the Warrant Shares or any other security issued or issuable upon
exercise of this Warrant may not be sold or otherwise disposed of except
pursuant to an effective registration statement under the Securities Act, or
an
exemption from the registration requirements of such Act.
| Dated as of November 7, 2007 | GENESIS PHARMACEUTICALS ENTERPRISES, INC. | |
| |
|
|
|
|
By: | /s/ ▇▇▇ ▇▇▇▇ |
|
Name: ▇▇▇ ▇▇▇▇ |
||
| Title:Chief Executive Officer | ||
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PURCHASE
FORM
Dated:
, 20
| _____ |
The
undersigned hereby irrevocably exercises this Warrant to the extent
of
purchasing _______ shares of Common Stock and hereby makes payment
of
$____________ in payment of the Exercise Price
therefor.
|
INSTRUCTIONS
FOR REGISTRATION OF STOCK
Name:______________________________________________________________________________
(Please
typewrite or print in block letters)
Signature:___________________________________________
Social
Security or Employer Identification No.________________________
ASSIGNMENT
FORM
FOR
VALUE
RECEIVED,_______________________________________________________
hereby
sells, assigns and transfer unto
Name_________________________________________________________________________
(Please
typewrite or print in block letters)
Address________________________________________________________________________
Social
Security or Employer Identification No._______________________
The
right
to purchase Common Stock represented by this Warrant to the extent of
_________shares as to which such right is exercisable and does hereby
irrevocably constitute and appoint __________________ attorney to transfer
the
same on the books of the Company with full power of substitution.
Dated:
, 20
Signature_________________________________________
Signature
Medallion Guaranteed:
_________________________________________________
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