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EXHIBIT 4.3
NEITHER THIS WARRANT NOR THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF
THIS WARRANT HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "ACT"), AND MAY NOT BE SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.
THE TRANSFERABILITY OF THIS WARRANT IS
RESTRICTED AS PROVIDED IN SECTION 2
No. W-134 January 12, 1999
DIGITAL SOLUTIONS, INC.
COMMON STOCK PURCHASE WARRANT
For good and valuable consideration, the receipt of which is hereby
acknowledged by Digital Solutions, Inc., a New Jersey corporation (the
"Company"), SR Capital Partners, LLC is hereby granted the right to purchase,
at any time from the date hereof until 5:00 P.M., New York City time, on
January 12, 2004, up to 75,000 (Seventy-Five Thousand) fully paid and
non-assessable shares of the Company's Common Stock, $.001 par value per share
("Common Stock").
This Warrant is exercisable at a per share price of $1.50 (the
"Exercise Price") payable in cash or by certified or official bank check in New
York Clearing House funds, subject to adjustment as provided in Section l
hereof. Upon surrender of this Warrant with the annexed Subscription Form duly
executed, together with payment of the Exercise Price for the shares of Common
Stock purchased at the Company's principal executive offices (presently located
at 000 Xxxxxx Xxxxx, Xxxxxxxx, Xxx Xxxxxx 00000) the registered holder of the
Warrant ("holder") shall be entitled to receive a certificate or certificates
for the shares of Common Stock so purchased.
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1. Exercise of Warrant
1.1 The purchase rights represented by this Warrant are exercisable
at the option of the Holder hereof, in whole or in part (but not as to
fractional shares of the Common Stock) during any period in which this Warrant
may be exercised as set forth above. In the case of the purchase of less than
all the shares of Common Stock purchasable under this Warrant, the Company
shall cancel this Warrant upon the surrender thereof and shall execute and
deliver a new Warrant of like tenor for the balance of the shares of Common
Stock purchasable hereunder.
1.2 The issuance of certificates for shares of Common Stock upon the
exercise of this Warrant shall be made without charge to the Holder hereof
including, without limitation, any tax which may be payable in respect of the
issuance thereof, and such certificates shall be issued in the name of, or in
such names as may be directed by, the Holder hereof; provided, however, 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 such
certificate in a name other than that of the Holder and the Company shall not
be required to issue or deliver such certificates unless or until the person or
persons requesting the issuance thereof shall have paid to the Company the
amount of such tax or shall have established to the satisfaction of the Company
that such tax has been paid.
1.3 In case at any time or from time to time the Company shall
subdivide as a whole, split its Common Stock or issue a dividend payable in
shares or otherwise, the number of shares of Common Stock then outstanding into
a greater or lesser number of shares, the Warrant Price then in effect shall be
increased or reduced proportionately, and the number of shares issuable upon
exercise of this Warrant shall accordingly be increased or reduced
proportionately.
1.4 In case of any reclassification or change of outstanding shares
of Common Stock issuable upon exercise of this Warrant (other
than change in par value, or from par value to no par value, or from no par
value to par value, or as a result or a subdivision or combination), 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 or change of
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outstanding shares of Common Stock, other than a change in number of the shares
issuable upon exercise of the Warrant) or in case of any sale or conveyance to
another corporation of the property of the Company as an entirety or
substantially as an entirety, the Holder of this Warrant shall have the right
thereafter to exercise this Warrant into the kind and amount of shares of stock
and other securities and property receivable upon such reclassification,
change, consolidation, merger, sale or conveyance by a Holder of the number of
shares of Common Stock of the Company for which the Warrant might have been
exercised immediately prior to such reclassification, change, consolidation,
merger, sale or conveyance. The above provisions of this Section l.4 shall
similarly apply to successive reclassifications and changes of shares of Common
Stock and to successive consolidations, mergers, sales or conveyances.
1.5 The Company covenants that it will at all times reserve and keep
available out of its authorized Common Stock, solely for the purpose of
issuance upon exercise of this Warrant as herein provided, such number of
shares of Common Stock as shall then be issuable upon the exercise of this
Warrant. The Company covenants that all shares of Common Stock which shall be
so issuable shall be duly and validly issued and fully-paid and non-assessable.
1.6 Cashless Exercise. At any time during the Warrant Exercise
Term, the Holder may, at its option, exchange the Warrants represented by such
Holder's Warrant Certificate, in whole or in part (a "Warrant Exchange"), into
the number of fully paid and non-assessable Warrant Shares determined in
accordance with this Section 1.6, by surrendering such Warrant Certificate at
the principal office of the Company or at the office of its transfer agent,
accompanied by a notice stating such Holder's intent to effect such exchange,
the number of Warrants (the "Total Share Number") to be exchanged and the date
on which the Holder requests that such Warrant Exchange occur (the "Notice of
Exchange"). The Warrant Exchange shall take place on the date specified in the
Notice of Exchange, or, if later, the date the Notice of Exchange is received
by the Company (the "Exchange Date"). Certificates for the Warrant Shares
issuable upon such Warrant Exchange and, if applicable, a new Warrant
Certificate of like tenor evidencing the balance of the Warrant Shares
remaining subject to the Holder's Warrant certificate, shall be issued as of
the Exchange Date and delivered to the Holder within three (3) days following
the
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Exchange Date. In connection with any Warrant Exchange, the Holder's
Warrant certificate shall represent the right to subscribe for and acquire (1)
the number of Warrant Shares (rounded to the next highest integer) equal to (A)
the Total Share Number less (B) the number of Warrant Shares equal to the
quotient obtained by dividing (i) the product of the Total Share Number and the
then current Exercise Price per Warrant Share by (ii) the current Market Price
(as hereafter defined) of a share of Common Stock.
As used herein, the phrase "Market Price" at any date shall be deemed
to be the last reported sale price, or, in case no such reported sale takes
place on such day, the average of the last reported sale prices for the
preceding three trading days, in either case as officially reported by the
principal securities exchange on which the Common Stock is listed or admitted
to trading or as reported in the Nasdaq National Market System, or, if the
Common Stock is not listed or admitted to trading on any national securities
exchange or quoted on the Nasdaq National Market System, the last reported sale
price as furnished by the National Association of Securities Dealers, Inc.
through Nasdaq or similar organization if Nasdaq is no longer reporting such
information, or if the Common Stock is not quoted on Nasdaq, as determined in
good faith by resolution of the Board of Directors of the Company, based on the
best information available to it for the two days immediately preceding the
Exchange Date.
2. Restrictions on Transfer
The Holder acknowledges that he has been advised by the Company that
this Warrant and the shares of Common Stock (the "Warrant Shares") issuable
upon exercise thereof (collectively the "Securities") have not been registered
under the Securities Act of l933, as amended (the "Securities Act"), that the
Warrant is being issued, and the shares issuable upon exercise of the Warrant
will be issued, on the basis of the statutory exemption provided by section
4(2) of the Securities Act relating to transactions by an issuer not involving
any public offering, and that the Company's reliance upon this statutory
exemption is based in part upon the representations made by the Holder
contained herein. The Holder acknowledges that he has been informed by the
Company of, or is otherwise familiar with, the nature of the limitations
imposed by the Securities Act and the rules and regulations thereunder on the
transfer of securities. In particular, the Holder agrees that no sale,
assignment or transfer of the Securities shall be valid or
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effective, and the Company shall not be required to give any effect to any such
sale, assignment or transfer, unless (i) the sale, assignment or transfer of
the Securities is registered under the Securities Act, and the Company has no
obligations or intention to so register the Securities except as may otherwise
be provided herein, or (ii) the Securities are sold, assigned or transferred in
accordance with all the requirements and limitations of Rule l44 under the
Securities Act or such sale, assignment, or transfer is otherwise exempt from
registration under the Securities Act. The Holder represents and warrants that
he has acquired this Warrant and will acquire the Securities for his own
account for investment and not with a view to the sale or distribution thereof
or the granting of any participation therein, and that he has no present
intention of distributing or selling to others any of such interest or granting
any participation therein. The Holder acknowledges that the securities shall
bear the following legend:
"These securities have not been registered under the Securities Act
of l933. Such securities may not be sold or offered for sale,
transferred, hypothecated or otherwise assigned in the absence of an
effective registration statement with respect thereto under such Act
or an opinion of counsel to the Company that an exemption from
registration for such sale, offer, transfer, hypothecation or other
assignment is available under such Act."
3. Registration Rights
3.1 The Company shall advise the Holder of this Warrant or of the
Warrant Shares or any then Holder of Warrants or Warrant Shares (such persons
being collectively referred to herein as "Holders") by written notice at least
30 days prior to the filing by the Company with the Securities and Exchange
Commission of any registration statement under the Securities Act of l933 (the
"Act") covering securities of the Company, except on Forms S-4 or S-8 (or
similar successor form), and upon the request of any such Holder within ten
days after the date of such invoice, include in any such registration statement
such information as may be required to permit a public offering of the Warrant
Shares. The Company shall supply such number of prospectuses and other
documents as the Holder may reasonably request in order to facilitate the
public
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sale or other disposition of the Warrant Shares, qualify the Warrant Shares for
sale in such states as any such Holder reasonably designates and do any and all
other acts and things which may be necessary or desirable to enable such
Holders to consummate the public sale or other disposition of the Warrant
Shares, and furnish indemnification in the manner as set forth in Subsection
3.2 of this Section 3. Such Holders shall furnish information and
indemnification as set forth in Subsection 3.2 of this Section 3. For the
purpose of the foregoing, inclusion of the Warrant Shares by the Holder in a
Registration Statement pursuant to this sub-paragraph 3.l under a condition
that the offer and/or sale of such Warrant Shares not commence until a date not
to exceed 90 days from the effective date of such registration statement shall
be deemed to be in compliance with this sub-paragraph 3.l.
3.2 The following provisions of this Section 3 shall also be
applicable to the exercise of the registration rights granted under this
Section 3.l:
(A) The foregoing registration rights shall be contingent on the
Holders furnishing the Company with such appropriate information (relating to
the intentions of such Holders) as the Company shall reasonably request in
writing. Following the effective date of such registration, the Company shall
upon the request of any owner of Warrants and/or Warrant Shares forthwith
supply such number of prospectuses meeting the requirements of the Act as shall
be requested by such owner to permit such Holder to make a public offering of
all Warrant Shares from time to time offered or sold to such Holder, provided
that such Holder shall from time to time furnish the Company with such
appropriate information (relating to the intentions of such Holder) as the
Company shall request in writing. The Company shall also use its best efforts
to qualify the Warrant Shares for sale in such states as such Holder shall
reasonably designate.
(B) The Company shall bear the entire cost and expense of any
registration of securities initiated by it under Subsection 3.l of this Section
3 notwithstanding that Warrant Shares subject to this Warrant may be included
in any such registration. Any Holder whose Warrant Shares are included in any
such registration statement pursuant to this Section 3 shall, however, bear the
fees of his own counsel and any registration fees, transfer taxes or
underwriting discounts or commissions applicable to the Warrant Shares sold by
him pursuant thereto.
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(C) The Company shall indemnify and hold harmless each such
Holder and each underwriter, if any, within the meaning of the Act, who may
purchase from or sell for any such Holder any Warrant Shares from and against
any and all losses, claims, damages and liabilities caused by any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement or any post-effective amendment thereto or any
registration statement under the Act or any prospectus included therein
required to be filed or furnished by reason of this Section 3 or caused by any
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading
except insofar as such losses, claims, damages or liabilities are caused by any
such untrue statement or alleged untrue statement or omission or alleged
omission based upon information furnished or required to be furnished in
writing to the Company by such Holder or underwriter expressly for use therein,
which indemnification shall include each person, if any, who controls any such
underwriter within the meaning of such Act; provided, however, that the Company
shall not be obliged so to indemnify any such Holder or underwriter or
controlling person unless such Holder or underwriter shall at the same time
agree to indemnify the Company, its directors, each officer signing the related
registration statement and each person, if any, who controls the Company within
the meaning of such Act, from and against any and all losses, claims, damages
and liabilities caused by any untrue statement or alleged untrue statement of a
material fact contained in any registration statement or any prospectus
required to be filed or furnished by reason of this Section 3 or caused by any
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading insofar as such losses,
claims, damages or liabilities are caused by any untrue statement or alleged
untrue statement or omission based upon information furnished in writing to the
Company by any such Holder or underwriter expressly for use therein.
(D) The Company may withdraw the registration at any time.
4. Miscellaneous
4.1 All the covenants and agreements made by the Company in this
Warrant shall bind its successors and assigns.
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4.2 No recourse shall be had for any claim based hereon or otherwise
in any manner in respect hereof, against any incorporator, stockholder, officer
or director, past, present or future, of the Company or of any predecessor
corporation, whether by virtue of any constitutional provision or statute or
rule of law, or by the enforcement of any assessment or penalty or in any other
manner, all such liability being expressly waived and released by the
acceptance hereof and as part of the consideration for the issue hereof.
4.3 No course of dealing between the Company and the Holder hereof
shall operate as a waiver of any right of any Holder hereof, and no delay on
the part of the Holder in exercising any right hereunder shall so operate.
4.4 This Warrant may be amended only by a written instrument
executed by the Company and the Holder hereof. Any amendment shall be endorsed
upon this Warrant, and all future Holders shall be bound thereby.
4.5 All communications provided for herein shall be sent, except as
may be otherwise specifically provided, by registered or certified mail: if to
the Holder of this Warrant, to the address shown on the books of the Company;
and if to the Company, to Digital Solutions, Inc.,300 Xxxxxx Xxxxx, Xxxxxxxx,
Xxx Xxxxxx 00000, attention: Office of the President, or to such other address
as the Company may advise the Holder of this Warrant in writing. Notices shall
be deemed given when mailed.
4.6 The provisions of this Warrant shall in all respects be
constructed according to, and the rights and liabilities of the parties hereto
shall in all respects be governed by, the laws of the State of New Jersey. This
Warrant shall be deemed a contract made under the laws of the State of New
Jersey and the validity of this Warrant and all rights and liabilities
hereunder shall be determined under the laws of said State.
4.7 The headings of the Sections of this Warrant are inserted for
convenience only and shall not be deemed to constitute a part of this Warrant.
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IN WITNESS WHEREOF, DIGITAL SOLUTIONS, INC. has caused this Warrant
to be executed in its corporate name by its officer, and its seal to be affixed
hereto.
Dated: January 12, 1999
DIGITAL SOLUTIONS, INC.
By: /s/XXXXXX X. XXXXXXX
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Xxxxxx X. Xxxxxxx
President
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SUBSCRIPTION FORM
TO: Digital Solutions, Inc.
000 Xxxxxx Xxxxx
Xxxxxxxx, Xxx Xxxxxx 00000
The undersigned holder hereby irrevocably elects to exercise the
right to purchase shares of Common Stock covered by this Warrant according to
the conditions hereof and herewith makes full payment of the Exercise Price of
such shares.
Kindly deliver to the undersigned a certificate representing the Shares.
INSTRUCTIONS FOR DELIVERY
Name:
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(please typewrite or print in block letters)
Address:
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Dated:
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Signature
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