Exhibit 4.2
FORM OF WARRANT
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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. 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 UNDER SUCH ACT.
Right to Purchase _______________ Shares
SHARE PURCHASE WARRANT
THIS CERTIFIES THAT, for value received, ______________________________,
or its registered assigns (the "HOLDER"), is entitled to purchase from Enthrust
Financial Services, Inc., a Delaware corporation (the "COMPANY"), at any time or
from time to time during the period specified in Section 2 hereof,
_______________________ (__________) shares of the Common Stock, par value $.001
per share of the Company ("COMMON STOCK") at an exercise price per Share equal
to $7.00 (the "INITIAL EXERCISE PRICE") The term "WARRANT SHARES," as used
herein, refers to the Shares purchasable hereunder. The Warrant Shares and the
Initial Exercise Price are subject to adjustment as provided in Section 4
hereof. The term "WARRANT" means this Warrant.
This Warrant is subject to the following terms, provisions, and
conditions:
1. WARRANT EXERCISE.
(a) MANNER OF EXERCISE; ISSUANCE OF CERTIFICATES; PAYMENT FOR
SHARES. Subject to the provisions hereof, this Warrant may be exercised by the
Holder hereof, in whole or in part, by the delivery of 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 at 1270 Avenue of the Xxxxxxxx, 00xx Xxxxx, Xxx Xxxx, XX 00000
and upon payment to the Company in cash, by certified or official 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. The Holder shall not be
required to deliver the original Warrant in order to effect an exercise
hereunder unless such exercise is being made with respect to all of the
underlying Warrant Shares. Execution and delivery of an Exercise Agreement with
respect to less than all of the Warrant Shares shall have the same effect as
cancellation of the original Warrant and issuance of a new Warrant evidencing
the right to purchase the remaining number of Warrant Shares. 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 (if such surrender is
required hereunder), 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 by the
Company to the Holder hereof within a reasonable time, not exceeding ten (10)
business days, after this Warrant shall have been so exercised. If this Warrant
shall have been exercised only in part, then, upon the request of the Holder,
the
Company shall, at Company's 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.
2. PERIOD OF EXERCISE. This Warrant is exercisable at any time or
from time to time on or after the date on which this Warrant is issued and on or
prior to 5:00 pm New York time on March 1, 2010 (the "EXERCISE PERIOD").
3. CERTAIN AGREEMENTS OF THE COMPANY. The Company hereby covenants
and agrees that this Warrant will be binding upon any entity succeeding to the
Company by merger, consolidation, or acquisition of all or substantially all the
Company's assets.
4. ANTIDILUTION PROVISIONS. During the Exercise Period, the Initial
Exercise Price, (in this section, the "EXERCISE PRICE") and the number of
Warrant Shares shall be subject to adjustment from time to time as provided in
this Section 4. 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) DIVIDENDS, ETC. In case the Company shall: (a) declare
or make a distribution on its outstanding Common Stock in shares of Common
Stock, (b) subdivide or reclassify its outstanding Common Stock into a greater
number of shares of Common Stock, or (c) combine or reclassify its outstanding
Common Stock into a smaller number of shares of Common Stock; then, the Exercise
Price in effect at the time of occurrence such distribution or of the effective
date of such subdivision, combination or reclassification shall be adjusted so
that it shall equal the price determined by multiplying the Exercise Price by a
fraction, the numerator of which shall be the number of shares of Common Stock
outstanding immediately prior to such action and the denominator of which shall
be the number of shares of Common Stock outstanding after giving effect to such
action. Such adjustment shall be made successively whenever any of the foregoing
events shall occur.
(b) ISSUANCES, ETC. If the Company shall, at any time or
from time to time after the date hereof and on or before the exercise of this
Warrant, issue any shares of Common Stock or other securities convertible into,
or exchangeable or exercisable for, shares of Common Stock (the "ADDITIONAL
SHARES") for a consideration per share less than the applicable Exercise Price
in effect immediately prior to the issuance of such Additional Shares, the
Exercise Price for shares of Common Stock issuable upon exercise of this Warrant
in effect immediately prior to each such issuance shall automatically (except as
otherwise provided herein) be lowered to that price equal to (a) the Exercise
Price times (b) a fraction, the numerator of which shall be the sum of (1) the
number of shares of Common Stock outstanding immediately prior to the issuance
of such Additional Shares plus (2) the number of shares of Common Stock which
the aggregate consideration paid for such Additional Shares would purchase at
the Exercise Price, and the denominator of which shall be the number of shares
of Common Stock outstanding immediately after the issuance of such Additional
Shares. For the purposes of any adjustment of the Exercise Price pursuant to
this Section 4(b) the following provisions shall be applicable:
(i) In the case of the issuance of shares of Common
Stock in whole or in part for cash, the consideration shall be deemed to
be the gross amount of cash paid therefor plus the value of any property
other than cash received by the Company, determined as provided in
subsection 4(b)(ii) hereof.
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(ii) In the case of the issuance of Common Stock for
consideration other than cash, the value of such consideration other
than cash shall be deemed to be the fair market value of such
consideration as determined in good faith by the Board, irrespective of
any accounting treatment.
(c) OPTIONS, ETC. In the case of the issuance of options or
other rights to purchase or subscribe for Common Stock, securities by their
terms convertible into or exchangeable for Common Stock or options to purchase
or other rights to subscribe for such convertible or exchangeable securities:
(i) the aggregate maximum number of shares of Common
Stock deliverable upon exercise of such options to purchase or rights to
subscribe for Common Stock shall be deemed to have been issued at the
time such options or rights were issued and for a consideration equal to
the consideration (determined in the manner provided in subsection
4(b)(i) and (ii) hereof), if any, received by the Company upon the
issuance of such options or rights plus the minimum purchase price
provided in such options or rights for the Common Stock covered thereby
(the consideration in each case to be determined in the manner provided
in subsection 4(b)(i) and (ii) hereof);
(ii) the aggregate maximum number of shares of Common
Stock deliverable upon conversion of, or in exchange for, any such
convertible or exchangeable securities or upon the exercise of options
to purchase or rights to subscribe for such convertible or exchangeable
securities and subsequent conversion or exchange thereof shall be deemed
to have been issued at the time such securities were issued or such
options or rights were issued and for a consideration equal to the
consideration received by the Company for any such securities and
related options or rights (excluding any cash received on account of
accrued interest or accrued dividends), plus the minimum additional
consideration, if any, to be received by the Company upon the conversion
or exchange of such securities or the exercise of any related options or
rights (the consideration in each case to be determined in the manner
provided in subsection 4(b)(i) and (ii) hereof), provided that in making
the foregoing calculations such convertible or exchangeable securities
shall be deemed to have been converted or redeemed;
(iii) if there is any change in the exercise price of,
or number of shares deliverable upon exercise of, any such options or
rights or upon the conversion or exchange of any such convertible or
exchangeable securities (other than a change resulting from the
antidilution provisions thereof), then the Exercise Price shall
automatically be readjusted in proportion to such change; and
(iv) upon the expiration of any such options or
rights or the termination of any such rights to convert or exchange such
convertible or exchangeable securities, the Exercise Price shall be
automatically readjusted to the Exercise Price that would have obtained
had such options, rights or convertible or exchangeable securities not
been issued.
(d) NOTICE OF ADJUSTMENTS/CERTAIN EVENTS. Upon the
occurrence of each adjustment or readjustment of the Exercise Price as a result
of the events described in this Section 4, the Company, at its expense, shall
promptly compute such adjustment or readjustment and prepare and furnish to the
Holder of a certificate setting forth such adjustment or readjustment and
showing in detail the facts upon which such adjustment or readjustment is based.
The Company
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shall, upon the written request at any time of the Holder, furnish to such
Holder a like certificate setting forth: (i) such adjustment or readjustment,
(ii) the Exercise Price at the time in effect, and (iii) the number of shares of
Common Stock and the amount, if any, of other securities or property which at
the time would be received upon exercise of the Warrant. The Company will give
also written notice to the Holder at least ten (10) days prior to the date on
which the Company determines to make (A) any dividend or distribution upon the
Common Stock or (B) any pro rata subscription offer to holders of Common Stock.
(e) EXCEPTIONS TO ADJUSTMENT OF EXERCISE PRICE. No
adjustment to the Exercise Price will be made upon the grant or exercise of any
options or other rights to purchase shares of Common Stock issuable to
employees, consultants, officers or directors of the Company.
(f) ADJUSTMENT IN NUMBER OF SHARES. Upon each adjustment of
the Exercise Price pursuant to the provisions of this Section 4, the number of
Shares 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.
(g) CONSOLIDATION, MERGER OR SALE. In case of any
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,
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 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 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 Section 4(i) 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.
(j) NO FRACTIONAL SHARES. No fractional Shares 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 value of a share of Common Stock
(as reasonably determined by the Board of Directors) on the date of such
exercise.
5. ISSUE TAX. 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 STOCKHOLDER. This Warrant shall
not entitle the Holder hereof to any voting rights or other rights as
stockholder 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
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liability of such Holder for the Exercise Price or as a stockholder of the
Company, whether such liability is asserted by the Company or by creditors of
the Company.
7. TRANSFER, EXCHANGE, AND REPLACEMENT OF WARRANT.
(a) RESTRICTION ON TRANSFER. This Warrant and the rights
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
Section 7(d) below, provided, however, that any transfer or assignment shall be
subject to the conditions set forth in Section 7(e) hereof. 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.
(b) REPLACEMENT OF WARRANT. Upon receipt of evidence
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 of this Warrant, the Company, at its expense, will
execute and deliver, in lieu thereof, a new Warrant of like tenor.
(c) CANCELLATION; PAYMENT OF EXPENSES. Upon the surrender of
this Warrant in connection with any transfer, exchange, or replacement as
provided in this Section 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 Section 7.
(d) 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.
(e) 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.
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8. NOTICES. Any notice herein required or permitted to be given
shall be in writing and may be personally served or delivered by courier or sent
by United States mail and shall be deemed to have been given upon receipt if
personally served (which shall include telephone line facsimile transmission) or
sent by courier or three (3) days after being deposited in the United States
mail, certified, with postage pre-paid and properly addressed, if sent by mail.
For the purposes hereof, the address of the Holder shall be as shown on the
records of the Company; and the address of the Company shall be 0000 Xxxxxx xx
xxx Xxxxxxxx, 00xx Xxxxx, Xxx Xxxx, XX 00000, Attn: Xxxxxx Xxxxx and copy to
Morse, Zelnick, Rose & Lander LLP, 000 Xxxx Xxxxxx Xxx Xxxx, XX 00000 Attn:
Xxxxxxx X. Xxxx, Esq. Both the Holder and the Company may change the address for
service by service of written notice to the other as herein provided.
9. CHOICE OF LAW; CONSENT TO JURISDICTION. This Warrant shall be
enforced, governed and construed in accordance with the internal laws (without
giving effect to the conflicts of law principles) of the State of New York. Each
of the parties hereto submits to the exclusive jurisdiction of any state or
federal court sitting in the Borough of Manhattan, County of New York, in any
action or proceeding arising out of or relating to this Agreement, agrees that
all claims in respect of the action or proceeding may be heard and determined in
any such court and agrees not to bring any action or proceeding arising out of
or relating to this Agreement in any other court. Each of the parties waives any
defense of inconvenient forum to the maintenance of any action or proceeding so
brought and waives any bond, surety or other security that might be required of
any other party with respect thereto. Any party may make service on any other
party hereto by sending or delivering a copy of the process to the party to be
served at the address for each respective party provided for herein. Nothing in
this Section, however, shall affect the right of any party to serve legal
process in any other manner permitted by law. Each party agrees that a final
judgment in any action or proceeding so brought shall be conclusive and may be
enforced by suit on the judgment or in any other manner provided by law.
10. 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.
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IN WITNESS WHEREOF, the Company has caused this Warrant to be
signed by its duly authorized officer.
ENTHRUST FINANCIAL SERVICES, INC.
By:
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Xxxx X. Xxxxx, III
Chief Executive Officer
Dated: July __, 2007
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FORM OF EXERCISE AGREEMENT
Dated: ________ __, 200_
To: Enthrust Financial Services, Inc.
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 $_________. 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:
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Signature:
Address:
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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 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.
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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
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, 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.
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