EXHIBIT 4.2
EXHIBIT C
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FORM OF COMMON STOCK PURCHASE WARRANT
THIS COMMON STOCK PURCHASE WARRANT HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"). THE HOLDER
HEREOF, BY PURCHASING THIS COMMON STOCK PURCHASE WARRANT, AGREES FOR THE
BENEFIT OF THE COMPANY THAT SUCH SECURITIES MAY BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED ONLY (A) TO THE COMPANY, (B) PURSUANT TO AN EXEMPTION
FROM REGISTRATION UNDER THE SECURITIES ACT, OR (C) IF REGISTERED UNDER THE
SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAWS. IN ADDITION, A
SECURITIES PURCHASE AGREEMENT ("PURCHASE AGREEMENT"), DATED NOVEMBER 8,
2002, A COPY OF WHICH MAY BE OBTAINED FROM THE COMPANY AT ITS PRINCIPAL
EXECUTIVE OFFICE, CONTAINS CERTAIN ADDITIONAL AGREEMENTS AMONG THE PARTIES,
INCLUDING, WITHOUT LIMITATION, PROVISIONS WHICH LIMIT THE EXERCISE RIGHTS OF
THE HOLDER AND SPECIFY MANDATORY REDEMPTION OBLIGATIONS OF THE COMPANY.
_______________________________________
DIAL-THRU INTERNATIONAL CORPORATION
COMMON STOCK PURCHASE WARRANT
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No. 4
Number of shares: 500,000 Holder: Global Capital Funding Group L.P.
000 Xxxxxx Xxxx Xxxxx
Expiration Date: June 1, 0000 Xxxxx 000
Xxxxxxx, XX 00000
Purchase Price Per Share: $0.38
For identification only. The governing terms of this Warrant
are set forth below.
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Dial-Thru International Corporation, a Delaware corporation (the "Company"),
hereby certifies that, for value received, Global Capital Funding Group,
L.P. or assigns ("Holder"), is entitled, subject to the terms set forth
below, to purchase from the Company at any time or from time to time after
the date hereof and prior to the fifth anniversary hereof (the "Exercise
Period"), at the Purchase Price hereinafter set forth, Five Hundred Thousand
(500,000) shares of the fully paid and nonassessable shares of Common Stock.
The number and character of such shares of Common Stock and the Purchase
Price are subject to adjustment as provided herein.
The purchase price per share of Common Stock issuable upon exercise of
this Warrant (the "Purchase Price") shall initially be $0.38, provided,
however, that the Purchase Price shall be adjusted from time to time as
provided herein.
1. Certain Defined Terms. Capitalized terms used herein not otherwise
defined shall have the meanings ascribed thereto in the Purchase Agreement.
As used herein the following terms, unless the context otherwise requires,
have the following respective meanings:
(a) The term "Company" shall include Dial-Thru International
Corporation and any corporation that shall succeed or assume the
obligations of such corporation hereunder.
(b) The term "Common Stock" includes (a) the Company's common
stock, $0.001 par value per share, (b) any other capital stock of any
class or classes (however designated) of the Company, authorized on or
after such date, the holders of which shall have the right, without
limitation as to amount, either to all or to a share of the balance of
current dividends and liquidating dividends after the payment of
dividends and distributions on any shares entitled to preference, and
the holders of which shall ordinarily, in the absence of contingencies,
be entitled to vote for the election of a majority of directors of the
Company (even though the right so to vote has been suspended by the
happening of such a contingency) and (c) any other securities into
which or for which any of the securities described in (a) or (b) may be
converted or exchanged pursuant to a plan of recapitalization,
reorganization, merger, sale of assets or otherwise.
(c) The term "Other Securities" refers to any stock (other than
Common Stock) and other securities of the Company or any other person
(corporate or otherwise) that the Holder of this Warrant at any time
shall be entitled to receive, or shall have received, on the exercise
of this Warrant, in lieu of or in addition to Common Stock, or that at
any time shall be issuable or shall have been issued in exchange for or
in replacement of Common Stock or Other Securities pursuant to Section
4 or otherwise.
2. Exercise of Warrant.
2.1 Method of Exercise.
(a) This warrant may be exercised in whole or in part (but not as
to a fractional share of Common Stock), at any time and from time to
time during the Exercise Period by the Holder hereof by delivery of a
notice of exercise (a "Notice of Exercise") substantially in the form
attached hereto as Exhibit A via facsimile to the Company. Promptly
thereafter the Holder shall surrender this Warrant to the Company at
its principal office, accompanied by payment of the Purchase Price
multiplied by the number of shares of Common Stock for which this
Warrant is being exercised (the "Exercise Price"). Payment of the
Exercise Price shall be made, at the option of the Holder, (i) by check
or bank draft payable to the order of the Company, or (ii) by wire
transfer to the account of the Company.
(b) In addition to the foregoing, at the option of Holder, this
Warrant may be exercised, at any time or from time to time, in the
following "cashless exercise" transactions:
(i) Upon written notice of exercise from the
Holder to the Company that the Holder is exercising this Warrant
in whole or in part and as consideration of such exercise is
authorizing the Company to withhold from issuance a number of
shares of Common Stock issuable upon exercise of this Warrant, the
Company shall deliver to the Holder (without payment by the Holder
of the aggregate Purchase Price) that number of shares of Common
Stock equal to the quotient obtained by dividing (x) the Spread
Value by (y) the Fair Market Value of one share of Common Stock
immediately prior to the exercise of the Conversion Right. The
shares withheld by the Company shall no longer be issuable under
this Warrant.
(ii) Fair Market Value of a share of Warrant
Shares as of a particular date (the "Determination Date") shall
mean:
(A) If the Warrant Shares are traded on
an exchange or are quoted on the Nasdaq National Market or
the Nasdaq SmallCap Market ("Nasdaq"), then the average of
the closing or last sale price, respectively, reported for
the five trading days immediately preceding the Determination
Date.
(B) If the Warrant Shares are not traded
on an exchange or on Nasdaq but are traded in the over-the-
counter market or other similar organization (including the
OTC Bulletin Board), then the average of the closing bid and
ask prices reported for the five trading days immediately
preceding the Determination Date.
(C) If the Warrant Shares are not traded
as provided above, then the price determined in good faith by
the Board of Directors of the Company, provided that (i) the
basis or bases of each such determination shall be set forth
in the corporate records of the Company pertaining to
meetings and other actions of such board, and (ii) such
records are available to the Holder for inspection during
normal business hours of the Company upon the giving of
reasonable prior notice.
(D) If the Determination Date is the
date of a liquidation, dissolution or winding up, or any
event deemed to be a liquidation, dissolution or winding up
pursuant to the Company's certificate of incorporation, then
all amounts to be payable per share to Holders of the
securities then comprising Warrant Shares pursuant to the
charter in the event of such liquidation, dissolution or
winding up, plus all other amounts to be payable per share in
respect of the Warrant Shares in liquidation under the
certificate of incorporation, assuming for the purposes of
this clause (D) that all of the shares of Warrant Shares then
issuable upon exercise of all of the Warrants are outstanding
at the Determination Date.
(iii) The term "Spread Value" shall mean (i) the
number of shares exercised at a given time multiplied by the Fair
Market Value of one share of Common Stock, less (ii) aggregate
applicable Exercise Price.
(c) Upon exercise, the Holder shall be entitled to receive,
promptly after payment in full, one or more certificates, issued in the
Holder's name or in such name or names as the Holder may direct,
subject to the limitations on transfer contained herein, for the number
of shares of Common Stock so purchased. The shares of Common Stock so
purchased shall be deemed to be issued as of the close of business on
the date on which the Company shall have received from the Holder
payment in full of the Exercise Price (the "Exercise Date").
(d) Notwithstanding anything to the contrary set forth herein,
upon exercise of all or a portion of this Warrant in accordance with
the terms hereof, the Holder shall not be required to physically
surrender this Warrant to the Company. Rather, records showing the
amount so exercised and the date of exercise shall be maintained on a
ledger substantially in the form of Annex B attached hereto (a copy of
which shall be delivered to the Company or transfer agent with each
Notice of Exercise). It is specifically contemplated that the Holder
hereof shall act as the calculation agent for all exercises of this
Warrant. In the event of any dispute or discrepancies, such records
maintained by the Holders shall be controlling and determinative in the
absence of manifest error. The Holder and any assignee, by acceptance
of this Warrant, acknowledge and agree that, by reason of the
provisions of this paragraph, following an exercise of a portion of
this Warrant, the number of shares of Common Stock represented by this
Warrant will be the amount indicated on Annex B attached hereto (which
may be less than the amount stated on the face hereof).
2.2 Regulation D Restrictions. The Holder hereof represents and
warrants to the Company that it has acquired this Warrant and anticipates
acquiring the shares of Common Stock issuable upon exercise of the Warrant
solely for its own account for investment purposes and not with a view to or
for resale of such securities unless such resale has been registered with
the Commission or an applicable exemption is available therefore. At the
time this Warrant is exercised, the Company may require the Holder to state
in the Notice of Exercise such representations concerning the Holder as are
necessary or appropriate to assure compliance by the Holder with the
Securities Act.
2.3 Company Acknowledgment. The Company will, at the time of the
exercise of this Warrant, upon request of the Holder hereof, acknowledge in
writing its continuing obligation to afford to such Holder the registration
rights to which such Holder shall continue to be entitled after such
exercise in accordance with the provisions of a Registration Rights
Agreement dated the date hereof (the "Registration Rights Agreement"). If
the Holder shall fail to make any such request, such failure shall not
affect the continuing obligation of the Company to afford such Holder any
such rights.
2.4 Limitation on Exercise. Notwithstanding the rights of the
Holder to exercise all or a portion of this Warrant as described herein,
such exercise rights shall be limited, solely to the extent set forth in the
Purchase Agreement as if such provisions were specifically set forth herein.
3. Delivery of Stock Certificates, etc., on Exercise. As soon as
practicable after the exercise of this Warrant, and in any event within
three (3) business days thereafter, the Company at its expense (including
the payment by it of any applicable issue, stamp or transfer taxes) will use
its best efforts to cause to be issued in the name of and delivered to the
Holder thereof, or, to the extent permissible hereunder, to such other
person as such Holder may direct, a certificate or certificates for the
number of fully paid and nonassessable shares of Common Stock (or Other
Securities) to which such Holder shall be entitled on such exercise, plus,
in lieu of any fractional share to which such Holder would otherwise be
entitled, cash equal to such fraction multiplied by the then applicable
Purchase Price, together with any other stock or other securities and
property (including cash, where applicable) to which such Holder is entitled
upon such exercise pursuant to Section 2 or otherwise.
4. Adjustment for Extraordinary Events. The Purchase Price to be
paid by the Holder upon exercise of this Warrant, and the consideration to
be received upon exercise of this Warrant, shall be adjusted in case at any
time or from time to time pursuant to Article XI of the Purchase Agreement
as if such provisions were specifically set forth herein.
5. No Impairment. The Company will not, by amendment of its
Certificate of Incorporation or through any reorganization, transfer of
assets, consolidation, merger, dissolution, issue or sale of securities or
any other voluntary action, avoid or seek to avoid the observance or
performance of any of the terms of this Warrant, but will at all times in
good faith assist in the carrying out of all such terms and in the taking of
all such action as may be necessary or appropriate in order to protect the
rights of the Holder of this Warrant against impairment. Without limiting
the generality of the foregoing, the Company (a) will not increase the par
value of any shares of stock receivable on the exercise of this Warrant
above the amount payable therefor on such exercise, (b) will take all such
action as may be necessary or appropriate in order that the Company may
validly and legally issue fully paid and unassessable shares of stock on the
exercise of this Warrant, and (c) will not transfer all or substantially all
of its properties and assets to any other person (corporate or otherwise),
or consolidate with or merge into any other person or permit any such person
to consolidate with or merge into the Company (if the Company is not the
surviving person), unless such other person shall expressly assume in
writing and will be bound by all the terms of this Warrant.
6. Accountant's Certificate as to Adjustments. In each case of any
adjustment or readjustment in the shares of Common Stock (or Other
Securities) issuable on the exercise of this Warrant, the Company at its
expense will promptly cause independent certified public accountants of
national standing selected by the Company to compute such adjustment or
readjustment in accordance with the terms of this Warrant, which accountants
can be the Company's regular auditors, and prepare a certificate setting
forth such adjustment or readjustment and showing in detail the facts upon
which such adjustment or readjustment is based, including a statement of (a)
the consideration received or receivable by the Company for any additional
shares of Common Stock (or Other Securities) issued or sold or deemed to
have been issued or sold, if appropriate in the context of such adjustment,
(b) the number of shares of Common Stock (or Other Securities) outstanding
or deemed to be outstanding, and (c) the Purchase Price and the number of
shares of Common Stock to be received upon exercise of this Warrant, in
effect immediately prior to such issue or sale and as adjusted and
readjusted as provided in this Warrant. The Company will forthwith mail a
copy of each such certificate to the Holder of this Warrant, and will, on
the written request at any time of the Holder of this Warrant, furnish to
such Holder a like certificate setting forth the Purchase Price at the time
in effect and showing how it was calculated.
7. Notices of Record Date, etc. In the event of
(a) any taking by the Company of a record of the holders of
any class or securities for the purpose of determining the holders thereof
who are entitled to receive any dividend or other distribution, or any right
to subscribe for, purchase or otherwise acquire any shares of stock of any
class or any other securities or property, or to receive any other right, or
(b) any capital reorganization of the Company, any
reclassification or recapitalization of the capital stock of the Company or
any transfer of all or substantially all the assets of the Company to or
consolidation or merger of the Company with or into any other person, or
(c) any voluntary or involuntary dissolution, liquidation or
winding-up of the Company,
then and in each such event the Company will mail or cause to be mailed to
the Holder of this Warrant a notice specifying (i) the date on which any
such record is to be taken for the purpose of such dividend, distribution
or right, and stating the amount and character of such dividend,
distribution or right, and (ii) the date on which any such reorganization,
reclassification, recapitalization, transfer, consolidation, merger,
dissolution, liquidation or winding-up is to take place, and the time, if
any, as of which the holders of record of Common Stock (or Other Securities)
shall be entitled to exchange their shares of Common Stock (or Other
Securities) for then and in each such event the Company will mail or cause
to be mailed to the Holder of this Warrant a notice specifying (i) the date
on which any such record is to be taken for the purpose of such dividend,
distribution or right, and stating the amount of character of such dividend,
distribution or right, and (ii) the date on which any such reorganization,
reclassification, recapitalization, transfer, consolidation, merger,
dissolution, liquidation or winding-up is to take place, and the time, if
any, as of which the holders of record of Common Stock (or Other Securities)
shall be entitled to exchange their shares of Common Stock (or Other
Securities) for securities or other property deliverable on such
reorganization, reclassification, recapitalization, transfer, consolidation,
merger, dissolution, liquidation or winding-up. Such notice shall be mailed
at least 20 days prior to the date specified in such notice on which any
action is to be taken.
8. Reservation of Stock, etc. Issuable on Exercise of Warrant. The
Company will at all times reserve and keep available, solely for issuance
and delivery on the exercise of this Warrant, all shares of Common Stock (or
Other Securities) from time to time issuable on the exercise of this
Warrant.
9. Exchange of Warrant.
(a) On surrender for exchange of this Warrant, properly endorsed
and in compliance with the restrictions on transfer set forth in the legend
on the face of this Warrant, to the Company, the Company at its expense will
issue and deliver to or on the order of the Holder thereof a new Warrant of
like tenor, in the name of such Holder or as such Holder (on payment by such
Holder of any applicable transfer taxes) may direct, calling in the
aggregate on the face or faces thereof for the number of shares of Common
Stock called for on the face of the Warrant so surrendered.
(b) Upon written notice from the Purchasers that the Purchasers
have elected to transfer amongst each other a portion of this Warrant, and
on surrender for amendment and restatement of this Warrant, the Company at
its expense will issue and deliver to or on the order of the Holder thereof
a new Warrant of like tenor, in the name of such Holder as the Purchasers
(on payment by such Holder of any applicable transfer taxes) may direct,
calling in the aggregate on the face or faces thereof for the number of
shares of Common Stock as set forth in such notice reflecting such transfer.
10. Replacement of Warrant. On 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 of this
Warrant, on delivery of an indemnity agreement or security reasonably
satisfactory in form and amount to the Company or, in the case of any such
mutilation, on surrender and cancellation of this Warrant, the Company at
its expense will execute and deliver, in lieu thereof, a new Warrant of like
tenor.
11. Remedies. The Company stipulates that the remedies at law of the
Holder of this Warrant in the event of any default or threatened default by
the Company in the performance of or compliance with any of the terms of
this Warrant are not and will not be adequate, and that such terms may be
specifically enforced by a decree for the specific performance of any
agreement contained herein or by an injunction against a violation of any of
the terms hereof or otherwise.
12. Negotiability, etc.. This Warrant is issued upon the following
terms, to all of which each Holder or owner hereof by the taking hereof
consents and agrees:
(a) title to this Warrant may be transferred by endorsement and
delivery in the same manner as in the case of a negotiable instrument
transferable by endorsement and delivery.
(b) any person in possession of this Warrant properly endorsed is
authorized to represent himself as absolute owner hereof and is empowered to
transfer absolute title hereto by endorsement and delivery hereof to a bona
fide purchaser hereof for value; each prior taker or owner waives and
renounces all of his equities or rights in this Warrant in favor of such
bona fide purchaser, and each such bona fide purchaser shall acquire
absolute title hereto and to all rights represented hereby;
(c) until this Warrant is transferred on the books of the
Company, the Company may treat the registered Holder hereof as the absolute
owner hereof for all purposes, notwithstanding any notice to the contrary;
and
(d) notwithstanding the foregoing, this Warrant may not be sold,
transferred or assigned except pursuant to an effective registration
statement under the Securities Act or pursuant to an applicable exemption
therefrom.
13. Registration Rights. Intentionally omitted.
14. Warrant Redemption. Upon (i) occurrence of the events described
in Sections 3.4 and 10.4(c) of the Purchase Agreement, and (ii) at the
option of the Company at any time before the 360th day following the Closing
Date, the Company may be required or elect, as the case may be, to redeem
(and pay any applicable liquidated damages) all outstanding Warrants that
remain unexercised at a redemption price equal to the greater of (x) an
appraised value of the Warrants, as determined by Black Xxxxxx, on the date
they are called for redemption and (y) the number of Warrants being redeemed
multiplied by the excess of (A) the average Closing Bid Price of the Common
Stock for the five Trading Days immediately prior to the date that the
Warrants are called for redemption over (B) the exercise price of the
Warrants.
15. Notices, etc.. All notices and other communications from the
Company to the Holder of this Warrant shall be mailed by first class
registered or certified mail, postage prepaid, at such address as may have
been furnished to the Company in writing by such Holder or, until any such
Holder furnishes to the Company any address, then to, and at the address of,
the last Holder of this Warrant who has so furnished an address to the
Company.
16. Miscellaneous. This Warrant and any term hereof may be changed,
waived, discharged or terminated only by an instrument in writing signed by
the party against which enforcement of such change, waiver, discharge or
termination is sought. This Warrant shall be construed and enforced in
accordance with and governed by the internal laws of the State of Delaware.
The headings in this Warrant are for the purposes of reference only, and
shall not limit or otherwise affect any of the terms hereof. The invalidity
or unenforceability of any provision hereof shall in no way affect the
validity or enforceability of any other provision.
[Signature Page Follows]
DATED as of June 1, 2005
Dial-Thru International Corporation
By: ____________________________
Name: ____________________________
Title: ____________________________
[Corporate Seal]
Attest:
By: ____________________________
Secretary
EXHIBIT A
FORM OF NOTICE EXERCISE - WARRANT
(To be executed only upon exercise
of the Warrant in whole or in part)
To ____________________________________________
The undersigned registered Holder of the accompanying Warrant, hereby
exercises such Warrant or portion thereof for, and purchases thereunder,
__________1 shares of Common Stock (as defined in such Warrant) and herewith
makes payment therefor in the amount and manner set forth below, as of the
date written below. The undersigned requests that the certificates for such
shares of Common Stock be issued in the name of, and delivered to,
whose address is ______________________________.
The Exercise Price is paid as follows:
[ ] Bank draft payable to the Company in the amount of $_____________.
[ ] Wire transfer to the account of the Company in the amount of
$___________.
Upon exercise pursuant to this Notice of Exercise, the Holder will be
in compliance with the Limitation on Exercise (as defined in the Securities
Purchase Agreement pursuant to which this Warrant was issued).
Date: _________________
(Name must conform to name of Holder as
specified on the face of the Warrant)
By: ____________________________________
Name: _____________________________
Title: _____________________________
Address of Holder:
_______________________________________
_______________________________________
Date of exercise: ____________________________
1 Insert the number of shares of Common Stock as to which the accompanying
Warrant is being exercised. In the case of a partial exercise, a new
Warrant or Warrants will be issued and delivered, representing the
unexercised portion of the accompanying Warrant, to the Holder surrendering
the same.
ANNEX B
WARRANT EXERCISE LEDGER
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Original Exercise New Balance
Number of Warrants Price of Issuer Holder
Date Warrants Exercised Paid Warrants Initials Initials
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