THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 (THE "ACT") OR APPLICABLE STATE LAW AND MAY NOT BE
OFFERED, SOLD, OR OTHERWISE TRANSFERRED, PLEDGED, OR HYPOTHECATED UNLESS
AND UNTIL REGISTERED UNDER THE ACT OR STATE LAW OR, IN THE OPINION OF
COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER OF THE SECURITIES,
SUCH OFFER, SALE, OR TRANSFER, PLEDGE, OR HYPOTHECATION IS IN COMPLIANCE
THEREWITH.
Void after 5:00 p.m., Pacific Standard Time
on May 27, 2007
WARRANT
This certifies that, for value received, Healthcare Enterprise Group, Inc.,
a Delaware corporation, or registered assigns (the "Holder"), is entitled to
purchase at a price of ($0.00384615384615) per share (the "Exercise Price"),
subject to the provisions of this Warrant, from Cancer Therapeutics,
Incorporated, a Tennessee corporation (the "Company"), Six Million, Five Hundred
Thousand (6,500,000) shares of the unregistered Common Stock of the Company. The
shares of common stock issuable from the exercise of the Warrant are hereafter
referred to as the "Warrant Stock".
1. Exercise of Warrant. This Warrant may be exercised in whole or in part at any
time or from time to time on or after January 1, 2005, but not later than 5:00
p.m., Pacific Daylight Time, on May 27, 2007, or if such date is a day on which
federal or state chartered banking institutions are authorized by law to close,
then on the next succeeding day which shall not be such a day, by presentation
and surrender thereof to the Company at its principal office, with the Purchase
Form annexed hereto duly executed and accompanied by payment, in cash or by
certified or official bank check, payable to the order of the Company, of the
Exercise Price for the number of shares of Warrant Stock specified in such form,
together with all taxes applicable upon such exercise. 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 of the same tenor evidencing the
right of the Holder to purchase the balance of the shares of Warrant Stock
purchasable hereunder upon the same terms and conditions as herein set forth.
2. Fractional Shares. No fractional shares or stock representing fractional
shares shall be provided by the Company upon the exercise of this Warrant. In
lieu of any fractional shares which would otherwise be issuable, the Company
shall pay cash equal to the product of such fraction multiplied by the fair
market value of one share of the Warrant Stock on the date of exercise, as
determined in good faith by the Company.
3. Transfer, Exchange, Assignment or Loss of Warrant.
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3.1 This Warrant may not be assigned or transferred except as provided
herein and in accordance with and subject to the provisions of the Securities
Act of 1933 and the Rules and Regulations promulgated thereunder (said Act and
such Rules and Regulations being hereinafter collectively referred to as the
"Act"). Any purported transfer or assignment made other than in accordance with
this Section 3 and Section 7 hereof shall be null and void and of no force and
effect.
3.2 This Warrant may be transferred or assigned only with the written
consent of the Company, which shall not be unreasonably withheld. In addition,
this Warrant shall be transferable only upon the opinion of counsel satisfactory
to the Company, which may be counsel to the Company, that (i) the transferee is
a person to whom the Warrant may be legally transferred without registration
under the Act; and (ii) such transfer will not violate any applicable law or
governmental rule or regulation including, without limitation, any applicable
federal or state securities law, as further referenced in Section 7 below. Prior
to the transfer or assignment, the assignor or transferor shall reimburse the
Company for its reasonable expenses, including attorneys' fees, incurred in
connection with the transfer or assignment.
3.3 Any assignment permitted hereunder shall be made by surrender of this
Warrant to the Company at its principal office with the Assignment Form annexed
hereto duly executed and funds sufficient to pay any transfer tax. In such event
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 cancelled. This Warrant may be divided or combined with other
Warrants which carry the same rights upon presentation thereof at the principal
office of the Company together with a written notice signed by the Holder
thereof, specifying the names and denominations in which new Warrants are to be
issued. The terms "Warrant" and "Warrants" as used herein includes any Warrants
in substitution for or replacement of this Warrant, or into which this Warrant
may be divided or exchanged.
3.4 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 and date and any such lost,
stolen, destroyed or mutilated Warrant shall thereupon become void. Any such new
Warrant executed and delivered shall constitute an additional contractual
obligation on the part of the Company, whether or not the Warrant so lost,
stolen, destroyed or mutilated shall be at any time enforceable by anyone.
3.5 Each Holder of this Warrant, the shares of Warrant Stock issued
hereunder or any other security issued or issuable upon the exercise of this
Warrant shall indemnify and hold harmless the Company, its directors and
officers, and each person, if any, who controls the Company, against any losses,
claims, damages or liabilities, joint or several, to which the Company or any
such director, officer or any such person may become subject under the Act or
statute or common law, insofar as such losses, claims, damages or liabilities,
or actions in respect thereof, arise out of or are based upon the disposition by
such Holder of the Warrant, the shares of Warrant Stock acquired under the
Warrant, or other such securities in violation of this Warrant.
4. Rights of the Holder. The Holder shall not, by virtue hereof, be entitled to
any rights of a shareholder in the Company, either at law or equity, and the
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rights of the Holder are limited to those expressed in this Warrant and are not
enforceable against the Company except to the extent set forth herein.
5. Demand Registration Rights.
5.1 Demand Registration.
(a) If the Company shall receive, at any time during the two (2) year
period commencing January 1, 2005, a written request from the Holder that
the Company file a registration statement under the Act covering the
registration of the Warrant Stock, then as soon as practicable thereafter,
and subject to the limitations and restrictions contained in this Section
5, the Company shall use its reasonable best efforts to effect the
registration of all of the shares of Warrant Stock which the Holder
requests to be registered.
(b) The Company is obligated to effect only one (1) demand
registration pursuant to this Section 5.
5.2 Obligations of the Company. Whenever required under Section 5 to
use its reasonable best efforts to effect the registration of any Warrant
Stock, the Company shall do the following as expeditiously as possible:
(a) Prepare and file with the SEC a registration statement with
respect to such Warrant Stock and use its reasonable best efforts to cause
such registration statement to become and remain effective.
(b) Prepare and file with the SEC such amendments and supplements to
such registration statements and the prospectus used in connection
therewith to comply with the requirements of the Act.
(c) Furnish to the Holder such number of copies of a prospectus
(including a preliminary prospectus), in conformity with the requirements
of the Act, and such other documents as the Holder may reasonably request
in order to facilitate the disposition of the Warrant Stock to be sold
under the registration statement.
(d) Use its reasonable best efforts to register and qualify the
securities covered by such registration statements under the securities
laws of such states of the United States as shall be reasonably appropriate
for the distribution of the securities covered by such registration
statement.
5.3 Expenses of Registration. All expenses incurred in connection with any
registration, qualification, or compliance pursuant to Section 5 of this Warrant
shall be borne by the Company.
5.4 Rule 144 Reporting. With a view to making available the benefits of
certain rules and regulations of the SEC which may permit the sale of any
outstanding shares to the public without registration, the Company agrees after
any registration to use its best efforts to:
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(a) make and keep public information available, as those terms are
understood and defined in Rule 144 under the Securities Act, at all times;
and
(b) file with the SEC in a timely manner all reports and other
documents required of the Company under the Act and the Securities Exchange
Act of 1934, as amended, as long as it is subject to such reporting
requirements.
5.5 No Transfer of Registration Rights. The rights to cause the Company to
register the Warrant Stock under this Warrant may not be assigned by the Holder
without the written consent of the Company.
6. Adjustment of Exercise Price and Number of Shares. The number and kind of
securities issuable upon the exercise of this Warrant and the Exercise Price of
such securities shall be subject to adjustment from time to time upon the
happening of certain events as follows:
6.1 Adjustment for Dividends in Stock. In case at any time or from time to
time on or after the date hereof the holders of the Common Stock of the Company
(or any shares of stock or other securities at the time receivable upon the
exercise of this Warrant) shall have received, or, on or after the record date
fixed for the determination of eligible stockholders, shall have become entitled
to receive without payment therefor, other or additional stock of the Company by
way of dividend, then and in each case, the Holder of this Warrant shall, upon
the exercise hereof be entitled to receive, in addition to the number of shares
of Warrant Stock receivable thereupon, and without payment of any additional
consideration therefor, the amount of such other or additional stock of Company
which such Holder would hold on the date of such exercise had it been the holder
of record of such shares of Warrant Stock on the date hereof and had thereafter,
during the period from the date hereof to and including the additional stock
receivable by it as aforesaid during such period, giving effect to all
adjustments called for during such period by paragraphs (a) and (b) of this
Section 6.
6.2 Adjustment for Reclassification, Reorganization or Merger. In case of
any reclassification or change of the outstanding securities of the Company or
of any reorganization of the Company (or any other corporation the stock or
securities of which are at the time receivable upon the exercise of this
Warrant) on or after the date hereof, or in case, after such date, the Company
(or any such other corporation) shall merge with or into another corporation or
convey all or substantially all of its assets to another corporation, then and
in each such case the Holder of this Warrant, upon the exercise hereof at any
time after the consummation of such reclassification, change, reorganization,
merger or conveyance, shall be entitled to receive, in lieu of the stock or
other securities and property receivable upon the exercise hereof prior to such
consummation, the stock or other securities or property which such Holder would
have been entitled upon such consummation if such Holder had exercised this
Warrant immediately prior thereto. In each such case, the terms of this Section
6 shall be applicable to the shares of stock or other securities properly
receivable upon the exercise of this Warrant after such consummation.
6.3 Stock Splits and Reverse Stock Splits. If at any time on or after the
date hereof the Company shall subdivide its outstanding shares of Warrant Stock
into a greater number of shares, the Exercise Price in effect immediately prior
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to such subdivision shall thereby be proportionately reduced and the number of
shares of Warrant Stock receivable upon exercise of the Warrant shall thereby be
proportionately increased; and, conversely, if at any time on or after the date
hereof the outstanding number of shares of Warrant Stock shall be combined into
a smaller number of shares, the Exercise Price in effect immediately prior to
such combination shall thereby be proportionately increased and the number of
shares of Warrant Stock receivable upon exercise of the Warrant shall thereby be
proportionately decreased.
7. Transfer to Comply with the Securities Act of 1933.
7.1 Unless registered under the Act pursuant to Section 5 herein, this
Warrant and the shares of Warrant Stock issued hereunder or any other security
issued or issuable upon exercise of this Warrant may not be sold, transferred or
otherwise disposed of, except to a person who, in the opinion of counsel
reasonably satisfactory to the Company, is a person to whom this Warrant or such
shares of Warrant Stock may legally be transferred pursuant to Section 3 hereof
without registration and without the delivery of a current prospectus under the
Act with respect thereto and then only against receipt of an agreement of such
person to comply with the provision of this Section 7 with respect to any resale
or other disposition of such securities unless, in the opinion of such counsel,
such agreement is not required.
7.2 Unless registered under the Act pursuant to Section 5 herein, the
Company may cause the following legend to be set forth on each certificate
representing shares of Warrant Stock acquired under this Warrant or any other
security issued or issuable upon exercise of this Warrant, unless counsel for
the Company is of the opinion as to any such certificate that such legend is
unnecessary:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 (THE "ACT") OR APPLICABLE STATE LAW AND MAY NOT BE
OFFERED, SOLD, OR OTHERWISE TRANSFERRED, PLEDGED, OR HYPOTHECATED UNLESS
AND UNTIL REGISTERED UNDER THE ACT OR STATE LAW OR, IN THE OPINION OF
COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER OF THE SECURITIES,
SUCH OFFER, SALE, OR TRANSFER, PLEDGE, OR HYPOTHECATION IS IN COMPLIANCE
THEREWITH.
7.3 Governing Law. This Warrant shall be governed by, and construed in
accordance with, the laws of the State of California excluding that body of law
pertaining to conflicts of law.
7.4 Notice. Notices and other communications to be given to the Holder of
the Warrants evidenced by this certificate shall be delivered by hand or mailed,
postage prepaid, to or such other address as the Holder shall have designated by
written notice to the Company as provided herein. Notices or other
communications to the Company shall be deemed to have been sufficiently given if
delivered by hand or mailed postage prepaid to the Company at 412 Chelsa Cove,
Franklin, Tennessee 37064, attn: Robert K. Oldham, or such other address as the
Company shall have designated by written notice to such registered owner as
herein provided. Notice by mail shall be deemed given when deposited in the
United States mail, postage prepaid, as herein provided.
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IN WITNESS WHEREOF, the authorized officer of the Company has executed
this Warrant to be effective as of the date first set forth above.
Cancer Therapeutics, Incorporated
a Tennessee corporation
By:
-----------------------------------------
Robert K. Oldham, President
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PURCHASE FORM
The undersigned hereby irrevocably elects to exercise the within
Warrant to the extent of purchasing _________ shares of Warrant Stock, and
hereby makes payment of $________ in payment of the actual exercise price
thereof.
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Signature
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ASSIGNMENT FORM
FOR VALUE RECEIVED, ----------------------- hereby sells, assigns and transfers
(please type or print)
unto
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(please type or print)
- -------------------------------------------------------------------------------
(address)
the right to purchase shares of Warrant Stock represented by this Warrant to the
extent of __________ shares as to which such right is exercisable, and does
hereby irrevocably constitute and appoint the Company and/or its transfer agent
as attorney to transfer the same on the books of the Company with full power of
substitution in the premises.
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Signature
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