Contract
Exhibit 4.2
NEITHER THIS WARRANT NOR THE SHARES UNDERLYING THIS WARRANT HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (“ACT”), OR APPLICABLE STATE LAW. THIS WARRANT AND THE SHARES UNDERLYING IT MAY NOT BE PLEDGED, SOLD, ASSIGNED OR TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT WITH RESPECT THERETO UNDER THE ACT AND ANY APPLICABLE STATE SECURITIES LAW, OR UNLESS THE COMPANY RECEIVES AN OPINION OF COUNSEL, SATISFACTORY TO THE COMPANY, THAT SUCH REGISTRATION IS NOT REQUIRED.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE RESTRICTIONS CONTAINED IN A SUBSCRIPTION AGREEMENT BETWEEN THE COMPANY AND THE INVESTOR, A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE COMPANY.
VOID AFTER 5:00 P.M. EASTERN TIME, AUGUST 26, 2007
WARRANT
For the Purchase of
______Shares of Common Stock
of
VIDEO NETWORK COMMUNICATIONS, INC.
THIS CERTIFIES THAT, in consideration for purchasing a $______ in original principal amount unsecured 9% promissory note (“Note”) from Video Network Communications, Inc. (“Company”), ______ (“Holder”), as registered owner of this Warrant, is entitled, at any time or from time to time at or after August 26, 2002 (“Commencement Date”), and at or before 5:00 p.m., Eastern Time on August 26, 2007 (“Expiration Date”), but not thereafter, to subscribe for, purchase and receive, in whole or in part, up to ______(______) shares of the common stock of the Company (“Common Stock”). If the Expiration Date is a day on which banking institutions are authorized by law to close, then this Warrant may be exercised on the next succeeding day that is not such a day in accordance with the terms herein. During the period ending on the Expiration Date, the Company agrees not to take any action that would terminate the Warrant. This Warrant is being issued together with Warrants of like tenor and Notes in a private offering of Notes and Warrants by the Company (“Offering”).
“The shares represented by this certificate have not been registered under the Securities Act of 1933, as amended (“Act”) or applicable state law. The shares may not be pledged, sold, assigned or transferred in the absence of an effective registration statement with respect thereto under the Act and any applicable state securities law, or unless the Company receives an opinion of counsel, satisfactory to the Company, that such registration is not required.” | |
“The shares represented by this certificate are subject to the restrictions contained in the Subscription Agreement between the Company and the Holder, a copy of which is on file with the Secretary of the Company.” |
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applicable state law, the availability of which is established to the reasonable satisfaction of the Company, or (ii) a registration statement relating to such securities has been filed by the Company and declared effective by the Securities and Exchange Commission (“Commission”) and compliance with applicable state law.
4. New Warrants to be Issued.
4.1 Partial Exercise or Transfer. Subject to the restrictions in Section 3 hereof, this Warrant may be exercised or assigned in whole or in part. In the event of the exercise or assignment hereof in part only, upon surrender of this Warrant for cancellation, together with the duly executed exercise or assignment form and funds (or conversion equivalent) sufficient to pay any Exercise Price multiplied by the number of shares of Common Stock for which this Warrant is exercised and/or transfer tax, the Company shall cause to be delivered to the Holder without charge a new Warrant of like tenor to this Warrant in the name of the Holder evidencing the right of the Holder to purchase the aggregate number of shares of Common Stock as to which this Warrant has not then been exercised or assigned.
4.2 Lost Certificate. Upon receipt by the Company of evidence satisfactory to it of the loss, theft, destruction or mutilation of this Warrant and of reasonably satisfactory indemnification, the Company shall execute and deliver a new Warrant of like tenor and date. Any such new Warrant executed and delivered as a result of such loss, theft, mutilation or destruction shall constitute a substitute contractual obligation on the part of the Company.
(A) | If at any time after the date on which this Warrant is first issued (the “Issuance Date”), the Company shall issue (i) any Additional Stock (as hereinafter defined) without consideration or for a consideration per share less than the Exercise Price in effect immediately prior to the issuance of such Additional Stock, and/or (ii) any Additional Stock, including any additional Warrants, with a per share conversion or exercise price less than the Exercise Price of this Warrant in effect immediately prior to the issuance of such Additional Stock, then the Exercise Price of this Warrant in effect immediately prior to each such |
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issuance shall forthwith, respectively, be reduced to
an amount equal to such lower purchase price for such
Additional Stock (or in the case of options and similar
securities, the sum of the consideration received for
the option and the consideration to be received upon
exercise of such option), or, if for no consideration,
$.01. |
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(B) |
If at any time after the Issuance
Date, the Company shall issue additional Warrants solely
in connection with the Offering at an exercise price
different than the Exercise Price of this Warrant, then
the Exercise Price of this Warrant shall be increased or
decreased to match the exercise price of such
subsequently issued Warrant. |
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(C) |
“Additional Stock” as used herein
shall mean any shares of Common Stock issued (or deemed
to have been issued) or rights, warrants, options or
other securities convertible into or exchangeable for
Common Stock (including shares of Common Stock held in
the Company’s treasury) by the Company after the date
hereof, other than Common Stock issuable upon exercise
or conversion of options, warrants, preferred stock and
other rights and convertible securities outstanding as
of the Issuance Date. |
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(D) |
No adjustment of the Exercise Price
pursuant to this paragraph 6.1.3. shall have the effect
of increasing the Exercise Price above the Exercise
Price in effect immediately prior to such adjustment. |
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(E) |
In the case of the issuance of Common
Stock for a consideration in whole or in part other than
cash, the consideration other than cash shall be deemed
to be the fair value thereof as determined in good faith
by the Board. |
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(F) | In the case of the issuance of options to purchase or rights to subscribe for Common Stock, securities by their terms convertible into or exchangeable for Common Stock or options to purchase or rights to subscribe for such convertible or exchangeable securities, the following provisions shall apply for all purposes of this Section: |
(1) |
The aggregate maximum
number of shares of Common Stock deliverable upon
exercise (assuming the satisfaction of any
conditions to exercisability including, without
limitation, the passage of time, but without
taking into account potential antidilution
adjustments) 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, if any, received by the
Company upon the issuance of such options or
rights plus the minimum exercise price provided in
such options or rights (without taking into
account potential antidilution adjustments) for
the Common Stock covered thereby. |
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(2) | The aggregate maximum number of shares of Common Stock deliverable upon conversion of or in exchange (assuming the satisfaction of any conditions to convertibility or exchangeability including, without limitation, the passage of time, but without taking into account potential antidilution adjustments) 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 |
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such options or rights were issued and for a
consideration equal to the consideration, if any,
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 (without taking into account potential
antidilution adjustments) upon the conversion or
exchange of such securities or the exercise of
any related options or rights. |
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(3) |
In the event of any
change in the number of shares of Common Stock
deliverable or in the consideration payable to the
Company upon exercise of such options or rights or
upon conversion of or in exchange for such
convertible or exchangeable securities (excluding
a change resulting solely from the antidilution
provisions thereof if such change results from an
event which gives rise to an antidilution
adjustment under this paragraph), the Exercise
Price, to the extent in any way affected by or
computed using such options, rights or securities,
shall be recomputed to reflect such change;
provided, however, that the Exercise Price shall
not be increased from the Exercise Price in effect
immediately prior to such change, but no further
adjustment shall be made for the actual issuance
of Common Stock or any payment of such
consideration upon the exercise of any such
options or rights or the conversion or exchange of
such securities. |
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(4) | Common Stock for purposes of this Section shall be deemed to include securities ordinarily having the right to vote in the election of directors (apart from rights accruing under special circumstances); provided, however, that the number of shares of Common Stock deemed issued shall be the number that equals the number of shares of such security multiplied by a fraction, the numerator of which is the number of votes each share of such security has in votes for the election of directors and the denominator of which is the number of votes each share of Common Stock has in votes for the election of directors; such number of shares of Common Stock deemed issued shall be recomputed to reflect any change in the number of votes that either each share of such other security or the Common Stock has in votes for the election of directors. |
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which solely affects the par value of such shares of Common Stock, or in the case of any merger or consolidation of the Company with or into another corporation (other than a consolidation or merger in which the Company is the continuing corporation and which does not result in any reclassification or reorganization of the outstanding shares of Common Stock), or in the case of any sale or conveyance to another corporation or entity of the property of the Company as an entirety or substantially as an entirety in connection with which the Company is dissolved, the Holder of this Warrant shall have the right thereafter (until the expiration of the right of exercise of this Warrant) to receive upon the exercise hereof, for the same aggregate Exercise Price payable hereunder immediately prior to such event, the kind and amount of shares of stock or other securities or property (including cash) receivable upon such reclassification, reorganization, merger or consolidation, or upon a dissolution following any such sale or other transfer, by a Holder of the number of shares of Common Stock of the Company obtainable upon exercise of this Warrant immediately prior to such event. The provisions of this Section 6.1. shall similarly apply to successive reclassifications, reorganizations, mergers or consolidations, sales or other transfers.
8. Certain Notice Requirements.
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shares of Common Stock for the purpose of entitling them to receive a dividend or distribution, (ii) the Company shall offer to all the holders of its Common Stock any additional shares of capital stock of the Company or securities convertible into or exchangeable for shares of capital stock of the Company, or any option, right or warrant to subscribe therefor, (iii) the signing of a merger or reorganization agreement pursuant to which the Company is not the surviving party or (iv) a dissolution, liquidation or winding up of the Company (other than in connection with a consolidation or merger) or a sale of all or substantially all of its property, assets and business shall be proposed.
9.4 Governing Law; Submission to Jurisdiction. This Warrant will be deemed to have been made and delivered in New York City and will be governed as to validity, interpretation, construction, effect and in all other respects by the internal laws of the State of New York. Each of the Company and the Holder hereby (i) agrees that any legal suit, action or proceeding arising out of or relating to this Warrant will be instituted exclusively in New York State Supreme Court, County of New York, or in the United States District Court for the Southern District of New York, (ii) waives any objection to the venue of any such suit, action or proceeding and the right to assert that such forum is not a convenient forum for such suit, action or proceeding, (iii) irrevocably consents to the jurisdiction of the New York State Supreme Court, County of New York, and the United States District Court for the Southern District of New York in any such suit, action or proceeding, (iv) agrees to accept and acknowledge service of any and all process that may be served in any such suit, action or proceeding in New York State Supreme Court, County of New York or in the United States District Court for the Southern District of New York and (v) agrees that service of process upon it mailed by certified mail to its address set forth in Section 8.3 hereof will be deemed in every respect effective service of process upon it in any suit, action or proceeding.
VIDEO NETWORK COMMUNICATIONS, INC. |
By:________________________ Name: Xxxxxx X. Xxxxx Title: Chief Financial Officer |
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Form to be used to exercise Warrant:
____________________________
____________________________
____________________________
Date: ______, 200______
The undersigned hereby elects irrevocably to exercise the within Warrant and to purchase ______shares of Common Stock of Video Network Communications, Inc. and hereby makes payment of $______(at the rate of $ per share of Common Stock) in payment of the Exercise Price pursuant thereto. Please issue the Common Stock as to which this Warrant is exercised in accordance with the instructions given below.
or
The undersigned hereby elects irrevocably to exercise the within Warrant to purchase ______shares of Common Stock of Video Network Communications, Inc. by surrender of the unexercised portion of the within Warrant. Please issue the shares of Common Stock in accordance with the instructions given below.
and
As of the date of exercise of this Warrant, the undersigned hereby represents and warrants to the Company that it is an “Accredited Investor” within the meaning of the Securities Act of 1933, as amended (the “Act”), and is acquiring these securities for its own account and not with a view to, or for sale in connection with, any distribution thereof, nor with any present intention of distributing or selling the same. The undersigned further represents that it does not have any contract, agreement, understanding or arrangement with any person to sell, transfer or grant the shares of Common Stock issuable under the Warrant. The undersigned understands that the shares it will be receiving are “restricted securities” under Federal securities laws inasmuch as they are being acquired from Video Network Communications, Inc., in transactions not including any public offering and that under such laws such shares may be sold without registration under the Act only in limited circumstances. The undersigned is familiar with Rule 144 promulgated under the Act, as presently in effect, and understands the resale limitations imposed thereby and by the Act. The undersigned is a resident of or has its principal place of business and executive offices located in the State of ______. The undersigned understands and acknowledges that the Company will rely on the accuracy of these representations and warranties in issuing the securities underlying the Warrant.
__________________
Signature
NOTICE: The signature to this form must correspond with the name as written upon the face of the within Warrant in every particular without alteration or enlargement or any change whatsoever.
INSTRUCTIONS FOR REGISTRATION OF SECURITIES
Name __________________________________________
(Print in Block Letters)
Address ____________________________
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Form to be used to assign Warrant:
ASSIGNMENT
(To be executed by the registered Holder to effect a transfer of the within Warrant):
FOR VALUE RECEIVED, ______does hereby sell, assign and transfer unto ______the right to purchase ______shares of Common Stock of Video Network Communications, Inc. (“Company”) evidenced by the within Warrant and does hereby authorize the Company to transfer such right on the books of the Company.
Dated:______, 200______
______________________________ Signature |
NOTICE: The signature to this form must correspond with the name as written upon the face of the within Warrant in every particular without alteration or enlargement or any change whatsoever.
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