EXHIBIT 4.2
THE SECURITIES REPRESENTED BY THESE WARRANTS AND THE COMMON STOCK ISSUABLE
THEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR ANY OTHER APPLICABLE SECURITIES LAW. THE
SECURITIES REPRESENTED BY THESE WARRANTS MAY NOT BE TRANSFERRED, EXCEPT
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER, OR IN A TRANSACTION
EXEMPT FROM REGISTRATION UNDER, THE SECURITIES ACT AND IN ACCORDANCE WITH
ANY OTHER APPLICABLE SECURITIES LAWS.
WARRANTS
to Purchase Common Stock of
VPGI Corp.
Expiring on November 10, 2009
Warrant No. 2004-J-02
This Common Stock Purchase Warrant (the "Warrant") certifies that for
value received, Trident Growth Fund, LP (the "Holder") or its assigns, is
entitled to subscribe for and purchase from the Company (as hereinafter
defined), in whole or in part, 760,000 shares of duly authorized, validly
issued, fully paid and nonassessable shares of Common Stock (as hereinafter
defined) at an initial Exercise Price as hereinafter defined, subject,
however, to the provisions and upon the terms and conditions hereinafter set
forth. The number of Warrants (as hereinafter defined), the number of
shares of Common Stock purchasable hereunder, and the Exercise Price
therefore are subject to adjustment as hereinafter set forth. These
Warrants and all rights hereunder shall expire on November 10, 2009 (the
"Expiration Date").
ARTICLE I
Definitions
As used herein, the following terms shall have the meanings set forth
below:
I.1 "Company" shall mean VPGI Corp. a Texas corporation, and shall
also include any successor thereto with respect to the obligations
hereunder, by merger, consolidation or otherwise.
I.2 "Common Stock" shall mean and include the Company's common stock,
$.001 par value per share, authorized on the date of the original issue of
this Warrant and shall also include (i) in case of any reorganization,
reclassification, consolidation, merger, share exchange or sale, transfer or
other disposition of assets, the stock or other securities provided for
herein, and (ii) any other shares of common stock of the Company into which
such shares of Common Stock may be converted.
I.3 "Exercise Price" shall be $.10 per share of Common Stock payable
upon exercise of the Warrants subject to adjustment at the times, and in
accordance with the provisions set forth herein with respect to same.
I.4 "Market Price" for any day, when used with reference to Common
Stock, shall mean the price of said Common Stock determined by reference to
the last reported sale price for the Common Stock on such day on the
principal securities exchange on which the Common Stock is listed or
admitted to trading or if no such sale takes place on such date, the average
of the closing bid and asked prices thereof as officially reported, or, if
not so listed or admitted to trading on any securities exchange, the last
sale price for the Common Stock on the National Association of Securities
Dealers national market system on such date, or, if there shall have been no
trading on such date or if the Common Stock shall not be listed on such
system, the average of the closing bid and asked prices in the over-the-
counter market as furnished by any NASD member firm selected from time to
time by the Company for such purpose or, if the Common Stock is not traded,
then such price as is reasonably determined by the Company's Board of
Directors.
I.5 "Warrant" shall mean the right upon exercise to purchase one
Warrant Share.
I.6 "Warrant Shares" shall mean the shares of Common Stock purchased
or purchasable by the holder hereof upon the exercise of the Warrants.
ARTICLE II
Exercise of Warrants
II.1 Method of Exercise. The Warrants represented hereby may be
exercised by the holder hereof, in whole or in part, at any time and from
time to time on or after the date hereof until 5:00 p.m., Houston, Texas
time, on the Expiration Date. To exercise the Warrants, the holder hereof
shall deliver to the Company, at the Warrant Office designated herein, (i) a
written notice in the form of the Subscription Notice attached as an exhibit
hereto, stating therein the election of such holder to exercise the Warrants
in the manner provided in the Subscription Notice; (ii) payment in full of
the Exercise Price (A) in cash or by bank check for all Warrant Shares
purchased hereunder, or (B) through a "cashless" or "net-issue" exercise of
each such Warrant ("Cashless Exercise"); the holder shall exchange each
Warrant subject to a Cashless Exercise for that number of Warrant Shares
determined by multiplying the number of Warrant Shares issuable hereunder by
a fraction, the numerator of which shall be the difference between (x) the
Market Price and (y) the Exercise Price for each such Warrant, and the
denominator of which shall be the Market Price; the Subscription Notice
shall set forth the calculation upon which the Cashless Exercise is based,
or (C) a combination of (A) and (B) above; and (iii) these Warrants. The
Warrants shall be deemed to be exercised on the date of receipt by the
Company of the Subscription Notice, accompanied by payment for the Warrant
Shares and surrender of these Warrants, as aforesaid, and such date is
referred to herein as the "Exercise Date". Upon such exercise, the Company
shall, as promptly as practicable and in any event within five business
days, issue and deliver to such holder a certificate or certificates for the
full number of the Warrant Shares purchased by such holder hereunder, and
shall, unless the Warrants have expired, deliver to the holder hereof a new
Warrant representing the number of Warrants, if any, that shall not have
been exercised, in all other respects identical to these Warrants. As
permitted by applicable law, the person in whose name the certificates for
Common Stock are to be issued shall be deemed to have become a holder of
record of such Common Stock on the Exercise Date and shall be entitled to
all of the benefits of such holder on the Exercise Date, including without
limitation the right to receive dividends and other distributions for which
the record date falls on or after the Exercise Date and to exercise voting
rights.
II.2 Expenses and Taxes. The Company shall pay all expenses and taxes
(including, without limitation, all documentary, stamp, transfer or other
transactional taxes) other than income taxes attributable to the
preparation, issuance or delivery of the Warrants and of the shares of
Common Stock issuable upon exercise of the Warrants.
II.3 Reservation of Shares. Company shall reserve at all times so long
as the Warrants remain outstanding, free from preemptive rights, out of its
authorized but unissued shares of Common Stock, solely for the purpose of
effecting the exercise of the Warrants, a sufficient number of shares of
Common Stock to provide for the exercise of the Warrants.
II.4 Valid Issuance. All shares of Common Stock that may be issued
upon exercise of the Warrants will, upon issuance by the Company, be duly
and validly issued, fully paid and nonassessable and free from all taxes,
liens and charges with respect to the issuance thereof and, without limiting
the generality of the foregoing, the Company shall take no action or fail to
take any action which will cause a contrary result (including, without
limitation, any action that would cause the Exercise Price to be less than
the par value, if any, of the Common Stock).
II.5 Loan Agreement. The Warrants represented hereby were issued on
conjunction with a Loan Agreement dated on or about November 10, 2004 (the
"Loan Agreement") between the Company and the Holder. The Holder shall be
entitled to the rights to registration under the Securities Act and any
applicable state securities or blue sky laws to the extent set forth in the
registration rights provision found in the Loan Agreement. The terms of the
registration rights provisions are hereby incorporated herein for all
purposes and shall be considered a part of this Warrant as if they had been
fully set forth herein.
II.6 Acknowledgment of Rights. At the time of the exercise of the
Warrants in accordance with the terms hereof and upon the written request of
the holder hereof, the Company will acknowledge in writing its continuing
obligation to afford to such holder any rights (including, without
limitation, any right to registration of the Warrant Shares) to which such
holder shall continue to be entitled after such exercise in accordance with
the provisions of these Warrants; provided, however, that if the Holder
hereof shall fail to make any such request, such failure shall not affect
the continuing obligation of the Company to afford to such Holder any such
rights.
II.7 No Fractional Shares. The Company shall not be required to issue
fractional shares of Common Stock on the exercise of these Warrants. If
more than one Warrant shall be presented for exercise at the same time by
the same holder, the number of full shares of Common Stock which shall be
issuable upon such exercise shall be computed on the basis of the aggregate
number of whole shares of Common Stock purchasable on exercise of the
Warrants so presented. If any fraction of a share of Common Stock would,
except for the provisions of this Section, be issuable on the exercise of
this Warrant, the Company shall pay an amount in cash calculated by it to be
equal to the Market Price of one share of Common Stock at the time of such
exercise multiplied by such fraction computed to the nearest whole cent.
ARTICLE III
Transfer
III.1 Warrant Office. The Company shall maintain an office for
ertain purposes specified herein (the "Warrant Office"), which office shall
nitially be the Company's offices at P.O. Box 802808, Dallas, Texas 75380
nd may subsequently be such other office of the Company or of any transfer
gent of the Common Stock in the continental United States as to which
xxxxxx notice has previously been given to the Holder. The Company shall
aintain, at the Warrant Office, a register for the Warrants in which the
ompany shall record the name and address of the Person in whose name these
xxxxxxx has been issued, as well as the name and address of each permitted
ssignee of the rights of the registered owner hereof.
III.2 Ownership of Warrants. The Company may deem and treat the
Person in whose name the Warrants are registered as the holder and owner
hereof until provided with notice to the contrary. The Warrants may be
exercised by an assignee for the purchase of Warrant Shares without having
new Warrants issued.
III.3 Restrictions on Transfer of Warrants. These Warrants may be
transferred, in whole or in part, by the Holder. The Company agrees to
maintain at the Warrant Office books for the registration and transfer of
the Warrants. The Company, from time to time, shall register the transfer
of the Warrants in such books upon surrender of this Warrant at the Warrant
Office properly endorsed or accompanied by appropriate instruments of
transfer and written instructions for transfer. Upon any such transfer and
upon payment by the holder or its transferee of any applicable transfer
taxes, new Warrants shall be issued to the transferee and the transferor (as
their respective interests may appear) and the surrendered Warrants shall be
cancelled by the Company. The Company shall pay all taxes (other than
securities transfer taxes or income taxes) and all other expenses and
charges payable in connection with the transfer of the Warrants pursuant to
this Section.
III.4 Compliance with Securities Laws. Subject to the terms of
the Registration Rights Agreement and notwithstanding any other provisions
contained in these Warrants, the Holder understands and agrees that the
following restrictions and limitations shall be applicable to all Warrant
Shares and to all resales or other transfers thereof pursuant to the
Securities Act:
III.4.1 The holder hereof agrees that the Warrant Shares may not be
sold or otherwise transferred unless the Warrant Shares are registered under
the Securities Act and applicable state securities or blue sky laws or are
exempt therefrom.
III.4.2 A legend in substantially the following form will be placed
on the certificate(s) evidencing the Warrant Shares:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), OR ANY OTHER APPLICABLE SECURITIES LAW AND,
ACCORDINGLY, THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY
NOT BE RESOLD, PLEDGED, OR OTHERWISE TRANSFERRED, EXCEPT PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER, OR IN A TRANSACTION
EXEMPT FROM REGISTRATION UNDER, THE SECURITIES ACT AND IN
ACCORDANCE WITH ANY OTHER APPLICABLE SECURITIES LAWS."
ARTICLE IV
Anti-Dilution
IV.1 If and whenever any Additional Common Stock (as herein
defined) shares shall be issued by the Company (the "Stock Issue Date") for
a consideration per share less than the Exercise Price, then in each such
case the initial Exercise Price shall be reduced to a new Exercise Price in
an amount equal to the consideration per share received by the Company for
the additional shares of Common Stock then issued and the number of shares
issuable to Holder upon conversion shall be proportionately increased; and,
in the case of shares issued without consideration, the initial Exercise
Price shall be reduced in amount and the number of shares issued upon
conversion shall be increased in an amount so as to maintain for the Holder
the right to exercise into shares equal in amount to the same percentage
interest in the Common Stock of the Company as existed for the Holder
immediately preceding the Stock Issue Date.
IV.2 Consideration for Shares: In case of the issuance of Additional
Common Stock for a consideration part or all of which shall be cash, the
amount of the cash consideration therefore shall be deemed to be the amount
of the cash received by Company for such shares, after any compensation or
discount in the sale, underwriting or purchase thereof by underwriters or
dealers or others performing similar services or for any expenses incurred
in connection therewith. In case of the issuance of any shares of
Additional Common Stock for a consideration part or all of which shall be
other than cash, the amount of the consideration therefore, other than cash,
shall be deemed to be the then fair market value of the property received as
determined by an investment banking firm selected by Xxxxxx.
IV.3 Reclassification of Shares: In case of the reclassification of
securities into shares of Common Stock, the shares of Common Stock issued in
such reclassification shall be deemed to have been issued for a
consideration other than cash. Shares of Additional Common Stock issued by
way of dividend or other distribution on any class of stock of the Company
shall be deemed to have been issued without consideration.
IV.4 Split up or Combination of Shares: In case issued and outstanding
shares of Common Stock shall be subdivided or split up into a greater number
of shares of the Common Stock, the Exercise Price shall be proportionately
decreased, and in case issued and outstanding shares of Common Stock shall
be combined into a smaller number of shares of Common Stock, the Exercise
Price shall be proportionately increased, such increase or decrease, as the
case may be, becoming effective at the time of record of the split-up or
combination, as the case may be.
IV.5 The term "Additional Common Stock" herein shall mean in the most
broadest sense all shares of Common Stock hereafter issued by the Company
(including, but not limited to Common Stock held in the treasury of the
Company and common stock purchasable via derivative security or option on
the date of such grant), except Common Stock issued upon the exercise of
this warrant or the Convertible Notes.
IV.6 In the event of distribution to all Common Stock holders of any
stock, indebtedness of the Company or assets or other rights to purchase
securities or assets, then, after such event, the Exercise Price reduced to
so as to entitle the Holder to the economic interest he had immediately
prior to the occurrence of such event.
IV.7 In case of any capital reorganization, reclassification of the
stock of the Company (other than a change in par value or as a result of a
stock dividend, subdivision, split up or combination of shares), the
Exercise Price reduced to so as to entitle the Holder to the economic
interest he had immediately prior to the occurrence of such event. The
provisions of the foregoing sentence shall similarly apply to successive
reorganizations, reclassifications, consolidations, exchanges, leases,
transfers or other dispositions or other share exchanges.
IV.8 Notice of Adjustment. (A) In the event the Company shall propose
to take any action which shall result in an adjustment in the Exercise
Price, the Company shall give notice to the Holder, which notice shall
specify the record date, if any, with respect to such action and the date on
which such action is to take place. Such notice shall be given on or before
the earlier of 10 days before the record date or the date which such action
shall be taken. Such notice shall also set forth all facts (to the extent
known) material to the effect of such action on the Exercise Price and the
number, kind or class of shares or other securities or property which shall
be deliverable or purchasable upon the occurrence of such action or
deliverable upon exercise of this warrant (B) Following completion of an
event wherein the Exercise Price shall be adjusted, the Company shall
furnish to the Holder a statement, signed by an authorized officer of the
Company of the facts creating such adjustment and specifying the resultant
adjusted Exercise Price then in effect.
ARTICLE V
Miscellaneous
V.1 Entire Agreement. These Warrants, together wit the Loan
Agreement, contain the entire agreement between the holder hereof and the
Company with respect to the Warrant Shares purchasable upon exercise hereof
and the related transactions and supersedes all prior arrangements or
understandings with respect thereto.
V.2 Governing Law. This warrant shall be governed by and construed in
accordance with the laws of the State of Texas in the courts located in
Dallas, Texas.
V.3 Waiver and Amendment. Any term or provision of these Warrants may
be waived at any time by the party which is entitled to the benefits thereof
and any term or provision of these Warrants may be amended or supplemented
at any time by agreement of the holder hereof and the Company, except that
any waiver of any term or condition, or any amendment or supplementation, of
these Warrants shall be in writing. A waiver of any breach or failure to
enforce any of the terms or conditions of these Warrants shall not in any
way effect, limit or waive a party's rights hereunder at any time to enforce
strict compliance thereafter with every term or condition of these Warrants.
V.4 Illegality. In the event that any one or more of the provisions
contained in this Warrant shall be determined to be invalid, illegal or
unenforceable in any respect for any reason, the validity, legality and
enforceability of any such provision in any other respect and the remaining
provisions of these Warrants shall not, at the election of the party for
whom the benefit of the provision exists, be in any way impaired.
V.5 Copy of Warrant. A copy of these Warrants shall be filed among
the records of the Company.
V.6 Notice. Any notice or other document required or permitted to be
given or delivered to the holder hereof shall be in writing and delivered
at, or sent by certified or registered mail to such holder at, the last
address shown on the books of the Company maintained at the Warrant Office
for the registration of these Warrants or at any more recent address of
which the holder hereof shall have notified the Company in writing.
V.7 Limitation of Liability; Not Stockholders. No provision of these
Warrants shall be construed as conferring upon the holder hereof the right
to vote, consent, receive dividends or receive notices (other than as herein
expressly provided) in respect of meetings of stockholders for the election
of directors of the Company or any other matter whatsoever as a stockholder
of the Company. No provision hereof, in the absence of affirmative action
by the holder hereof to purchase shares of Common Stock, 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 purchase price of any
shares of Common Stock or as a stockholder of the Company, whether such
liability is asserted by the Company or by creditors of the Company.
V.8 Exchange, Loss, Destruction, etc. of Warrant. Upon receipt of
evidence reasonably satisfactory to the Company of the loss, theft,
mutilation or destruction of these Warrants, and in the case of any such
loss, theft or destruction upon delivery of an appropriate affidavit in such
form as shall be reasonably satisfactory to the Company and include
reasonable indemnification of the Company, or in the event of such
mutilation upon surrender and cancellation of these Warrants, the Company
will make and deliver new Warrants of like tenor, in lieu of such lost,
stolen, destroyed or mutilated Warrants. Any Warrants issued under the
provisions of this Section in lieu of any Warrants alleged to be lost,
destroyed or stolen, or in lieu of any mutilated Warrants, shall constitute
an original contractual obligation on the part of the Company. These
Warrants shall be promptly canceled by the Company upon the surrender hereof
in connection with any exchange or replacement. The Company shall pay all
taxes (other than securities transfer taxes or income taxes) and all other
expenses and charges payable in connection with the preparation, execution
and delivery of Warrants pursuant to this Section.
V.9 Headings. The Article and Section and other headings herein are
for convenience only and are not a part of this Warrant and shall not affect
the interpretation thereof.
IN WITNESS WHEREOF, the Company has caused this Warrant to be signed in
its name dated November 10, 2004
VPGI Corp.
/s/ Xxxxxxx X. Xxxxxx
---------------------
Xxxxxxx X. Xxxxxx
Title: President
