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EXHIBIT 4.2
WARRANT NO. ________
WARRANT TO PURCHASE A MAXIMUM OF
_____________ SHARES OF THE COMMON STOCK OF
[GREYSTONE DIGITAL TECHNOLOGY, INC.]
(Void after _________, ______ )
This certifies that ___________________________, or its assigns (the
"Holder"), for value received, is entitled to purchase, pursuant to this
Warrant, from [GREYSTONE DIGITAL TECHNOLOGY, INC., A DELAWARE CORPORATION] (the
"Company"), having a place of business at 0000 Xxxxxx Xxxxxx Xxxx, Xxx Xxxxx,
Xxxxxxxxxx, 00000, up to a maximum of _________ fully paid and nonassessable
shares of the Company's Common Stock (the "Stock") for cash at a price of
_________ per share (the "Stock Purchase Price") at any time or from time to
time up to and including 5:00 p.m. (Pacific time) on _________, ______ (the
"Expiration Date") upon surrender to the Company at its principal office (or at
such other location as the Company may advise the Holder in writing) of this
Warrant properly endorsed with the Form of Subscription attached hereto duly
filled in and signed and upon payment in cash or by check of the aggregate Stock
Purchase Price for the number of shares for which this Warrant is being
exercised determined in accordance with the provisions hereof. The Stock
Purchase Price and the number of shares purchasable hereunder are subject to
adjustment as provided in Section 3 of this Warrant.
This Warrant is subject to the following terms and conditions:
1. Exercise; Issuance of Certificates; Payment for Shares. This Warrant
shall be exercisable at the option of the holder of record hereof, at any time
or from time to time, up to the Expiration Date for all or any part of the
shares of Stock (but not for a fraction of a share). Xxxxxx agrees that the
shares of Stock purchased under this Warrant shall be and are deemed to be
issued to Holder hereof as the record owner of such shares as of the close of
business on the date on which this Warrant shall have been surrendered, properly
endorsed, the completed, executed Form of Subscription delivered and payment
made for such shares. Certificates for the shares of Stock so purchased,
together with any other securities or property to which the Holder hereof is
entitled upon such exercise, shall be delivered to the Holder hereof by Seller
at Seller's expense within a reasonable time after the rights represented by
this Warrant have been so exercised. In case of a purchase of less than all the
shares which may be purchased under this Warrant, Seller shall cancel this
Warrant and execute and deliver a new Warrant or Warrants of like tenor for the
balance of the shares purchasable under the Warrant surrendered upon such
purchase to the Holder hereof within a reasonable time. Each stock certificate
so delivered shall be in such denominations of Stock as may be requested by the
Holder hereof and shall be registered in the
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name of such Holder. The minimum number of shares of Stock which Holder may
exercise at any time is 1000 shares.
2. Shares to be Fully Paid; Reservation of Shares. The Company covenants
and agrees that all shares of Stock which may be issued upon the exercise of the
rights represented by this Warrant will, upon issuance, be duly authorized,
validly issued, fully paid and nonassessable and free from all preemptive rights
of any shareholder and free of all taxes, liens and charges with respect to the
issue thereof. The Company further covenants and agrees that during the period
within which the rights represented by this Warrant may be exercised, the
Company will at all times have authorized and reserved, for the purpose of issue
or transfer upon exercise of the subscription rights evidenced by this Warrant,
a sufficient number of shares of authorized but unissued Stock, or other
securities and property, when and as required to provide for the exercise of the
rights represented by this Warrant. The Company will take all such action as may
be necessary to assure that such shares of Stock may be issued as provided
herein without violation of any applicable law or regulation, or of any
requirements of any domestic securities exchange upon which the Stock may be
listed. The Company will not take any action which would result in any
adjustment of the Stock Purchase Price (as defined in Section 3 hereof) if the
total number of shares of Stock issuable after such action upon exercise of all
outstanding warrants, together with all shares of Stock then issuable upon
exercise of all options and upon the conversion of all convertible securities
then outstanding, would exceed the total number of shares of Stock then
authorized by the Company's Certificate of Incorporation.
3. Adjustment of Stock Purchase Price and Number of Shares. The Stock
Purchase Price and the number of shares purchasable upon the exercise of this
Warrant shall be subject to adjustment from time to time upon the occurrence of
certain events described in this Section 3. Upon each adjustment of the Stock
Purchase Price, the Holder of this Warrant shall thereafter be entitled to
purchase, at the Stock Purchase Price resulting from such adjustment, the number
of shares obtained by multiplying the Stock Purchase Price in effect immediately
prior to such adjustment by the number of shares purchasable pursuant hereto
immediately prior to such adjustment, and dividing the product thereof by the
Stock Purchase Price resulting from such adjustment.
3.1 Subdivision or Combination of Stock. In case the Company
shall at any time subdivide its outstanding shares of Stock into a greater
number of shares, the Stock Purchase Price in effect immediately prior to such
subdivision shall be proportionately reduced, and conversely, in case the
outstanding shares of Stock of the Company shall be combined into a smaller
number of shares, the Stock Purchase Price in effect immediately prior to such
combination shall be proportionately increased.
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3.2 Dividends in Stock, Other Stock, Property, Reclassification.
If at any time or from time to time the Holders of Stock (or any shares of stock
or other securities at the time receivable upon the exercise of this Warrant)
shall have received or become entitled to receive, without payment therefor,
(A) Stock or any shares of stock or other securities
which are at any time directly or indirectly convertible into or exchangeable
for Stock, or any rights or options to subscribe for, purchase or otherwise
acquire any of the foregoing by way of dividend or other distribution, or
(B) Stock or additional stock or other securities or
property (including cash) by way of spin-off, split-up, reclassification,
combination of shares or similar corporate rearrangement, (other than shares of
Stock issued as a stock split, adjustments in respect of which shall be covered
by the terms of Section 3.1 above), then and in each such case, the Holder
hereof shall, upon the exercise of this Warrant, be entitled to receive, in
addition to the number of shares of Stock receivable thereupon, and without
payment of any additional consideration therefor, the amount of stock and other
securities and property which such Holder would hold on the date of such
exercise had he been the holder of record of such Stock as of the date on which
holders of Stock received or became entitled to receive such shares or all other
additional stock and other securities and property.
3.3 Reorganization, Reclassification, Consolidation, Merger or
Sale. If any capital reorganization of the capital stock of the Company, or any
consolidation or merger of the Company with another corporation, or the sale of
all or substantially all of its assets to another corporation shall be effected
in such a way that holders of Stock shall be entitled to receive stock,
securities, or other assets or property, then, as a condition of such
reorganization, reclassification, consolidation, merger or sale, lawful and
adequate provisions shall be made whereby the holder hereof shall thereafter
have the right to purchase and receive (in lieu of the shares of the Stock of
the Company immediately theretofore purchasable and receivable upon the exercise
of the rights represented hereby) such shares of stock, securities or other
assets or property as may be issued or payable with respect to or in exchange
for a number of outstanding shares of such Stock equal to the number of shares
of such stock immediately theretofore purchasable and receivable upon the
exercise of the rights represented hereby. In any reorganization described
above, appropriate provision shall be made with respect to the rights and
interests of the Holder of this Warrant to the end that the provisions hereof
(including, without limitation, provisions for adjustments of the Stock Purchase
Price and of the number of shares purchasable and receivable upon the exercise
of this Warrant) shall thereafter be applicable, as nearly as may be, in
relation to any shares of stock, securities or assets thereafter deliverable
upon the exercise hereof.
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3.4 Notice of Adjustment. Upon any adjustment of the Stock
Purchase Price or any increase or decrease in the number of shares purchasable
upon the exercise of this Warrant, the Company shall give written notice
thereof, by first class mail, postage prepaid, addressed to the registered
Holder of this Warrant at the address of such Holder as shown on the books of
the Company. The notice shall be signed by the Company's chief financial officer
and shall state the Stock Purchase Price resulting from such adjustment and the
increase or decrease, if any, in the number of shares purchasable at such price
upon the exercise of this Warrant, setting forth in reasonable detail the method
of calculation and the facts upon which such calculation is based.
3.5 Other Notices. If at any time:
(1) the Company shall declare any cash dividend upon its
Common Stock;
(2) the Company shall declare any dividend upon its
Common Stock payable in stock or make any special dividend or other distribution
to the holders of its Common Stock;
(3) the Company shall offer for subscription pro rata to
the holders of its Common Stock any additional shares of stock of any class or
other rights;
(4) there shall be any capital reorganization or
reclassification of the capital stock of the Company; or consolidation or merger
of the Company with, or sale of all or substantially all of its assets to,
another corporation; or
(5) there shall be a voluntary or involuntary
dissolution, liquidation or winding-up of the Company;
then, in any one or more of said cases, the Company shall give, by first class
mail, postage prepaid, addressed to the Holder of this Warrant at the address of
such Holder as shown on the books of the Company, (a) at least 20 days' prior
written notice of the date on which the books of the Company shall close or a
record shall be taken for such dividend, distribution or subscription rights or
for determining rights to vote in respect of any such reorganization,
reclassification, consolidation, merger, sale, dissolution, liquidation or
winding-up, and (b) in the case of any such reorganization, reclassification,
consolidation, merger, sale, dissolution, liquidation or winding-up, at least 20
days' prior written notice of the date when the same shall take place; provided,
however, that the Holder shall make a best efforts attempt to respond to such
notice as early as possible after the receipt thereof. Any notice given in
accordance with the foregoing
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clause (a) shall also specify, in the case of any such dividend, distribution or
subscription rights, the date on which the holders of Common Stock shall be
entitled thereto. Any notice given in accordance with the foregoing clause (b)
shall also specify the date on which the holders of Stock shall be entitled to
exchange their Stock for securities or other property deliverable upon such
reorganization, reclassification, consolidation, merger, sale, dissolution,
liquidation, winding-up or conversion, as the case may be.
3.6 Certain Events. If any change in the outstanding Common
Stock of the Company or any other event occurs as to which the other provisions
of this Section 3 are not strictly applicable or if strictly applicable would
not fairly protect the purchase rights of the Holder of the Warrant in
accordance with such provisions, then the Board of Directors of the Company
shall make an adjustment in the number and class of shares available under the
Warrant, the Stock Purchase Price or the application of such provisions, so as
to protect such purchase rights as aforesaid. The adjustment shall be such as
will give the Holder of the Warrant upon exercise for the same aggregate Stock
Purchase Price the total number, class and kind of shares as he would have owned
had the Warrant been exercised prior to the event and had he continued to hold
such shares until after the event requiring adjustment.
4. Company Registration.
4.1 (a) If, at any time or from time to time, the Company shall
determine to register any of its securities pursuant to the Act, either for its
own account or the account of a security holder or holders exercising their
respective registration rights, other than a registration relating solely to
employee benefit plans on Form S-8 or similar forms which may be promulgated in
the future or a registration on Form S-4 or similar forms which may be
promulgated in the future relating solely to a Securities and Exchange
Commission Rule 145 or similar transaction, the Company will (i) promptly give
to each Holder written notice thereof and (ii) include in such registration (and
any related qualification or other compliance under blue sky laws), and in any
underwriting involved therein, all shares of Common Stock issued upon the
exercise of this Warrant ("Registrable Securities") of such Holders as specified
in a written request or requests made within 15 days after receipt of such
written notice from the Company.
(b) If the registration of which the Company gives
notice is for a registered public offering involving an underwriting, the
Company shall so indicate in the notice given pursuant to Section 4.1(a). In
such event the right of any Holder to registration pursuant to this Section 4.1
shall be conditioned upon such Xxxxxx's agreeing to participate in such
underwriting and in the inclusion of such Holder's Registrable Securities in the
underwriting to the extent provided herein. All Holders proposing to distribute
their securities through such underwriting shall (together with the Company and
the other holders distributing their securities
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through such underwriting) enter into an underwriting agreement in customary
form with the underwriter or underwriters selected for such underwriting by the
Company or by other holders exercising any demand registration rights.
Notwithstanding any other provision of this Section 4.1, if the underwriter
determines that marketing factors require a limitation of the number of shares
to be underwritten, the underwriter may exclude some or all Registrable
Securities or other securities from such registration and underwriting
(hereinafter an "Underwriter Cutback"). In the event of an Underwriter Cutback,
the Company shall so advise all Holders and the other holders distributing their
securities through such underwriting, and the number of Registrable Securities
and other securities that may be included in the registration and underwriting
shall be allocated among all holders thereof (including the Holders but
excluding those holders who are exercising their demand registration rights) in
proportion, as nearly as practicable, to the respective amounts of Common Stock
of the Company (including shares issuable upon conversion of any shares of
outstanding Preferred Stock) held by such holders at the time of filing the
registration statement. If any Holder disapproves of the terms of any such
underwriting, such Holder may elect to withdraw therefrom by written notice to
the Company and the underwriter. Any securities excluded or withdrawn from such
underwriting shall be withdrawn from such registration.
4.2 Expenses of Registration. All Registration Expenses incurred
in connection with any registration, qualification or compliance pursuant to
Sections 4.1 (exclusive of Selling Expenses but inclusive of the reasonable fees
and expenses of one special counsel to the selling Holders), shall be borne by
the Company.
4.3 Registration Procedures. In the case of each registration,
qualification or compliance effected by the Company pursuant to this Section 4,
the Company will keep each Holder advised in writing as to the initiation of
each registration, qualification and compliance and as to the completion
thereof. At its expense the Company will:
(a) Keep such registration, qualification or compliance
effective for a period of 120 days or until the Holder or Holders have completed
the distribution described in the registration statement relating thereto,
whichever first occurs; and
(b) Furnish such number of prospectuses and other
documents incident thereto as a Holder from time to time may reasonably request.
Notwithstanding any provision to the contrary in this Agreement, the
Company shall not be required in connection with any registration pursuant to
Section 4.1 to qualify shares in any state or jurisdiction which requires the
Company to qualify to do business or to file a general consent to service of
process.
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4.4 Information by and to Holder. The Holder or Holders of
Registrable Securities included in any registration shall furnish to the Company
such information regarding such Holder or Holders and the distribution proposed
by such Holder or Holders as the Company may request in writing and as shall be
required in connection with any registration, qualification or compliance
referred to in this Section 4. The Company will furnish to the Holder such
number of prospectuses or other documents incident to any registration referred
to in this Section 4 as the Holder may from time to time reasonably request.
Notwithstanding any other provision of this Warrant, the Company shall not be
required to file a registration statement to allow trading of this Warrant.
4.5 Termination of Registration Rights. The registration rights
granted pursuant to this Section 4 shall terminate (i) upon the fifth
anniversary of the effective date of the first registration statement filed by
the Company covering an underwritten offering of its securities to the general
public or (ii) as to any individual Holder, at such time after the Company's
initial registered public offering as all Registrable Securities held by such
Holder can be sold without compliance with the registration requirements of the
Securities Act pursuant to Rule 144 (including Rule 144(k)) promulgated
thereunder.
4.6 "Market Stand Off" Agreement. Each Shareholder hereby agrees
that it shall not, to the extent requested by the Company and an underwriter of
Common Stock (or other securities) of the Company, sell or otherwise transfer or
dispose (other than to those who agree to be similarly bound) of any Registrable
Securities during the one hundred eighty (180) day period following the
effective date of a registration statement of the Company filed under the
Securities Act; provided, however, that such agreement shall only be applicable
to the first such registration statement of the Company which covers shares (or
securities) to be sold on its behalf to the public in an underwritten offering.
In order to enforce the foregoing covenant, the Company may impose
stop-transfer instructions with respect to the Registrable Securities of the
Shareholder (and the shares or securities of every other persons subject to the
foregoing restriction) until the end of such one hundred eighty (180) day
period.
5. Issue Tax. The issuance of certificates for shares of Stock upon the
exercise of the Warrant shall be made without charge to the Holder of the
Warrant for any issue tax (other than any applicable income taxes) in respect
thereof; 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 any certificate in a name other than that of the then Holder of the
Warrant being exercised.
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6. Closing of Books. The Company will at no time close its transfer
books against the transfer of any warrant or of any shares of Stock issued or
issuable upon the exercise of any warrant in any manner which interferes with
the timely exercise of this Warrant.
7. No Voting or Dividend Rights; Limitation of Liability. Nothing
contained in this Warrant shall be construed as conferring upon the holder
hereof the right to vote or to consent or to receive notice as a shareholder of
the Company or any other matters or any rights whatsoever as a shareholder of
the Company. No dividends or interest shall be payable or accrued in respect of
this Warrant or the interest represented hereby or the shares purchasable
hereunder until, and only to the extent that, this Warrant shall have ben
exercised. No provisions hereof, in the absence of affirmative action by the
holder to purchase shares of 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 Stock Purchase Price or as a shareholder of the Company, whether
such liability is asserted by the Company or by its creditors.
8. Warrants Transferable. Subject to compliance with applicable federal
and state securities laws, this Warrant and all rights hereunder are
transferable, in whole or in portions not less than 10,000 shares, without
charge to the holder hereof (except for transfer taxes), upon surrender of this
Warrant properly endorsed. Each taker and holder of this Warrant, by taking or
holding the same, consents and agrees that this Warrant, when endorsed in blank,
shall be deemed negotiable, and that the holder hereof, when this Warrant shall
have been so endorsed, may be treated by the Company, at the Company's option,
and all other persons dealing with this Warrant as the absolute owner hereof for
any purpose and as the person entitled to exercise the rights represented by
this Warrant, or to the transfer hereof on the books of the Company any notice
to the contrary notwithstanding, but until such transfer on such books, the
Company may treat the registered owner hereof as the owner for all purposes.
9. Modification and Waiver. This Warrant and any provision hereof may be
changed, waived, discharged or terminated only by an instrument in writing
signed by the Company and the Holder.
10. Notices. Any notice, request or other document required or permitted
to be given or delivered to the holder hereof or the Company shall be delivered
or shall be sent by certified mail, postage prepaid, to each such holder at its
address as shown on the books of the Company or to the Company at the address
indicated therefor in the first paragraph of this Warrant or such other address
as either may from time to time provide to the other.
11. Binding Effect on Successors. This Warrant shall be binding upon any
corporation succeeding the Company by merger, consolidation or acquisition of
all or
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substantially all of the Company's assets. All of the obligations of the Company
relating to the Stock issuable upon the exercise of this Warrant shall survive
the exercise and termination of this Warrant. All of the covenants and
agreements of the Company shall inure to the benefit of the successors and
assigns of the holder hereof.
12. Descriptive Headings and Governing Law. The description headings of
the several sections and paragraphs of this Warrant are inserted for convenience
only and do not constitute a part of this Warrant. This Warrant shall be
construed and enforced in accordance with, and the rights of the parties shall
be governed by, the laws of the State of California.
13. Lost Warrants. The Company represents and warrants to the Holder
hereof that 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 receipt of an indemnity reasonably
satisfactory to the Company, or in the case of any such mutilation upon
surrender and cancellation of such Warrant, the Company, at its expense, will
make and deliver a new Warrant, of like tenor, in lieu of the lost, stolen,
destroyed or mutilated Warrant.
14. Fractional Shares. No fractional shares shall be issued upon
exercise of this Warrant. The Company shall, in lieu of issuing any fractional
share, pay the holder entitled to such fraction a sum in cash equal to such
fraction multiplied by the then effective Stock Purchase Price.
IN WITNESS WHEREOF, the Company has caused this Warrant to be
duly executed by its officers, thereunto duly authorized this ____ day of
__________, 1999 .
[GREYSTONE DIGITAL TECHNOLOGY, INC.]
By:_________________________________
Xxxxxxx X. Xxxxx
Chief Executive Officer
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EXHIBIT A
FORMS OF SUBSCRIPTION
Date:________________, ____
[GREYSTONE DIGITAL TECHNOLOGY, INC.]
0000 Xxxxxx Xxxxxx Xxxx
Xxx Xxxxx, XX 00000
Attn: President
Gentlemen:
The undersigned hereby elects to exercise the warrant number _____
issued to it by [GREYSTONE DIGITAL TECHNOLOGY, INC.] (the "Company") and dated
____________, 19____ (the "Warrant") and to purchase thereunder
_________________ shares of the Common Stock of the Company (the "Shares") at a
purchase price of ________ per Share or an aggregate purchase price of
______________________ Dollars ($_________________) (the "Purchase Price").
Pursuant to the terms of the Warrant the undersigned has delivered the
Purchase Price herewith in full in cash or by certified check or wire transfer.
Very truly yours,
______________________________
By:______________________________
Its:_____________________________
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EXHIBIT B
FORM OF ASSIGNMENT
(To be executed by Xxxxxx upon transfer of the within Warrant.)
GREYSTONE DIGITAL TECHNOLOGY, INC.
FOR VALUE RECEIVED, the undersigned Holder of the within Warrant hereby
sells, assigns and transfers unto ________________________________ the right
represented by such Warrant to purchase _____________________ shares of Common
Stock of GreyStone Digital Technology, Inc., to which such Warrant relates, and
appoints _______________________ Attorney to make such transfer on the books of
GreyStone Digital Technology, Inc., maintained for such purpose, with full power
of substitution in the premises.
Dated:_________________________
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(Signature must conform in all respects to
name of Xxxxxx as specified on the face of
this Warrant.)
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(Street Address)
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(City) (State) (Zip Code)
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