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EXHIBIT 4.2
THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT
AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933. SUCH SECURITIES
MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN
EXEMPTION THEREFROM UNDER SAID ACT. COPIES OF THE AGREEMENT COVERING THE
PURCHASE OF THESE SECURITIES AND RESTRICTING THEIR TRANSFER MAY BE OBTAINED AT
NO COST BY WRITTEN REQUEST MADE BY THE HOLDER OF RECORD OF THIS CERTIFICATE TO
THE SECRETARY OF THE CORPORATION AT ITS PRINCIPAL EXECUTIVE OFFICE.
WA - Warrant Number
RASTER GRAPHICS, INC.
COMMON STOCK PURCHASE WARRANT
1. Number and Price of Shares Subject to Warrant. Subject to the terms
and conditions herein set forth, Shareholder Name (the "PURCHASER"), is entitled
to purchase from Raster Graphics, Inc., a California corporation (the
"COMPANY"), at any time on or before the earliest to occur of the following: (i)
Date, (ii) the closing of the Company's initial firm commitment underwritten
public offering covering the offer and sale of Common Stock for the account of
the Company to the public at an aggregate offering price of not less than
$10,000,000 and at least at $5.00 per share (the "INITIAL PUBLIC OFFERING") or
(iii) the closing of the Company's sale of all or substantially all of its
assets or the acquisition of the Company by another entity by means of merger or
other transaction as a result of which shareholders of the Company immediately
prior to such acquisition possess a minority of the voting power of the
acquiring entity immediately following such acquisition (the "ACQUISITION"),
Number of Shares (which number of shares is subject to adjustment as described
below) of fully paid and nonassessable Common Stock of the Company (the
"SHARES") upon surrender hereof at the principal office of the Company, and upon
payment of the purchase price at said office in cash, by check, by wire transfer
or by cancellation of indebtedness. The Company shall give notice to the
Purchaser of an Initial Public Offering or an Acquisition at least thirty (30)
days prior to the closing of such Initial Public Offering or an Acquisition.
Subject to adjustment as hereinafter provided, the exercise price for one share
of Common Stock (or such securities as may be substituted for one share of
Common Stock pursuant to the provisions hereinafter set forth) shall be $0.30.
The exercise price for one share of Common Stock (or such securities as may be
substituted for one share of Common Stock pursuant to the provisions hereinafter
set forth) payable from time to time upon the exercise of this Warrant (whether
such price be the price specified above or an adjusted price determined as
hereinafter provided) is referred to herein as the "WARRANT PRICE".
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2. Adjustment of Warrant Price and Number of Shares. The number and
kind of securities issuable upon the exercise of this Warrant shall be subject
to adjustment from time to time and the Company agrees to provide notice upon
the happening of certain events as follows:
(a) Adjustment for Dividends in Stock. In case at any time or
from time to time on or after the date hereof the holders of the Common Stock of
the Company (or any shares of stock or other securities at the time receivable
upon the exercise of this Warrant) shall have received, or, on or after the
record date fixed for the determination of eligible stockholders, shall have
become entitled to receive, without payment therefor, other or additional
securities or other property of the Company by way of dividend or distribution,
then and in each case, the holder of this Warrant shall, upon the exercise
hereof, be entitled to receive, in addition to the number of shares of Common
Stock receivable thereupon, and without payment of any additional consideration
therefor, the amount of such other or additional securities or other property of
the Company which such holder would hold on the date of such exercise had it
been the holder of record of such Common Stock on the date hereof and had
thereafter, during the period from the date hereof to and including the date of
such exercise, retained such shares and/or all other additional securities or
other property receivable by it as aforesaid during such period, giving effect
to all adjustments called for during such period by this paragraph (a) and
paragraphs (b) and (c) of this paragraph 2.
(b) Adjustment for Reclassification or Reorganization. In case
of any reclassification or change of the outstanding securities of the Company
or of any reorganization of the Company (or any other corporation the stock or
securities of which are at the time receivable upon the exercise of this
Warrant) on or after the date hereof, then and in each such case the Company
shall give the holder of this Warrant at least thirty (30) days notice of the
proposed effective date of such transaction, and the holder of this Warrant,
upon the exercise hereof at any time after the consummation of such
reclassification, change or reorganization, shall be entitled to receive, in
lieu of the stock or other securities and property receivable upon the exercise
hereof prior to such consummation, the stock or other securities or property to
which such holder would have been entitled upon such consummation if such holder
had exercised this Warrant immediately prior thereto, all subject to further
adjustment as provided in paragraphs (a) and (c).
(c) Stock Splits and Reverse Stock Splits. If at any time on
or after the date hereof the Company shall subdivide its outstanding shares of
Common Stock into a greater number of shares, the Warrant Price in effect
immediately prior to such subdivision shall thereby be proportionately reduced
and the number of shares receivable upon exercise of the Warrant shall thereby
be proportionately increased; and, conversely, if at any time on or after the
date hereof the outstanding number of shares of Common Stock shall be combined
into a smaller number of shares, the Warrant Price in effect immediately prior
to such combination shall
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thereby be proportionately increased and the number of shares receivable upon
exercise of this Warrant shall thereby be proportionately decreased.
3. No Fractional Shares. No fractional shares of Common Stock will be
issued in connection with any subscription hereunder. In lieu of any fractional
shares which would otherwise be issuable, the Company shall pay cash equal to
the product of such fraction multiplied by the fair market value of one share of
Common Stock on the date of exercise, as determined in good faith by the
Company's Board of Directors.
4. No Stockholder Rights. This Warrant as such shall not entitle its
holder to any of the rights of a stockholder of the Company until the holder has
exercised this Warrant in accordance with Section 6 hereof.
5. Reservation of Stock. The Company covenants that during the period
this Warrant is exercisable, the Company will reserve from its authorized and
unissued Common Stock a sufficient number of shares to provide for the issuance
of Common Stock upon the exercise of this Warrant. The Company agrees that its
issuance of this Warrant shall constitute full authority to its officers who are
charged with the duty of executing stock certificates to execute and issue the
necessary certificates for shares of Common Stock upon the exercise of this
Warrant.
6. Exercise of Warrant.
(a) This Warrant may be exercised by Purchaser by the
surrender of this Warrant at the principal office of the Company, accompanied by
payment in full of the purchase price of the Shares purchased thereby, as
described above. This Warrant shall be deemed to have been exercised immediately
prior to the close of business on the date of its surrender for exercise as
provided above, and the person entitled to receive the Shares or other
securities issuable upon such exercise shall be treated for all purposes as the
holder of such shares of record as of the close of business on such date. As
promptly as practicable, the Company shall issue and deliver to the person or
persons entitled to receive the same a certificate or certificates for the
number of full shares of Common Stock issuable upon such exercise, together with
cash in lieu of any fraction of a share as provided above.
7. Right to Convert Warrant for Common Stock.
(a) Right to Convert. In addition to and without limiting the
rights of the Holder under the terms of this Warrant, the Holder shall have the
right to convert this Warrant or any portion hereof (the "CONVERSION RIGHT")
into shares of Common Stock as provided in this Section 7 immediately prior to
its expiration after the Company has given the Purchaser notice pursuant to
Section 1 of an Initial Public Offering or an Acquisition, subject to the
restrictions set forth in subsection (c) hereof. Upon exercise of the Conversion
Right with respect to a particular
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number of shares subject to this Warrant (the "CONVERTED WARRANT SHARES"), the
Company shall deliver to the Holder (without payment by the Holder of any cash
or other consideration) that number of shares of Common Stock equal to the
quotient obtained by dividing (x) the value of this Warrant (or the specified
portion hereof) on the Conversion Date (as defined in subsection (b) hereof),
which value shall be determined by subtracting (A) the aggregate Warrant Price
of the Converted Warrant Shares immediately prior to the exercise of the
Conversion Right from (B) the aggregate fair market value of the Converted
Warrant Shares issuable upon exercise of this Warrant (or the specified portion
hereof) on the Conversion Date (as herein defined) by (y) the fair market value
of one share of Common Stock on the Conversion Date (as herein defined). No
fractional shares shall be issuable upon exercise of the Conversion Right, and
if the number of shares to be issued determined in accordance with the foregoing
formula is other than a whole number, the Company shall pay to the Holder an
amount in cash equal to the fair market value of the resulting fractional share
on the Conversion Date (as herein defined).
(b) Method of Exercise. The Conversion Right may be exercised
by the Holder by the surrender of this Warrant prior to its expiration and after
the Company shall have given the Purchaser notice pursuant to Section 1 of an
Initial Public Offering or an Acquisition, at the principal office of the
Company together with a written statement specifying that the Holder thereby
intends to exercise the Conversion Right immediately prior to the expiration of
this Warrant and indicating the number of shares subject to this Warrant which
are being surrendered (referred to in subsection (a) hereof as the Converted
Warrant Shares) in exercise of the Conversion Right. Such conversion shall be
effective immediately prior to the expiration of this Warrant (the "CONVERSION
DATE"). Certificates for the shares of Common Stock issuable upon exercise of
the Conversion Right (or any other securities deliverable in lieu thereof under
Section 2 (b)) shall be issued as of the Conversion Date and shall be delivered
to the Holder immediately following the Conversion Date.
(c) Restrictions on Conversion Right. In the event that the
Conversion Right contained herein would, at any time this Warrant remains
outstanding, be deemed by the Company's independent certified public accountants
to trigger a charge to the Company's earnings for financial reporting purposes,
then the Conversion Right shall automatically terminate upon the Company's
written notice to the Holder of such adverse accounting treatment.
(d) Determination of Fair Market Value. For purposes of this
Section 7, fair market value of a share of Common Stock as of a particular date
(the "DETERMINATION DATE") shall mean:
(i) In the case of an Initial Public Offering, the
initial "Price to Public" specified in the final prospectus with respect to such
offering.
(ii) In the case of an Acquisition, the effective per
share consideration to be received in an Acquisition by holders of the Common
Stock, which price shall be as
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specified in the agreement entered into with respect to such Acquisition and
determined assuming receipt of the aggregate exercise price of all outstanding
warrants to purchase Common Stock (the "OUTSTANDING WARRANTS"), or if no such
price is set forth in the agreement concerning the Acquisition, then as
determined in good faith by the Company's Board of Directors upon a review of
relevant factors, including the aggregate exercise price of all Outstanding
Warrants.
8. Certificate of Adjustment. Whenever the Warrant Price or number or
type of securities issuable upon exercise of this Warrant is adjusted, as herein
provided, the Company shall promptly deliver to the record holder of this
Warrant a certificate of an officer of the Company setting forth the nature of
such adjustment and a brief statement of the facts requiring such adjustment.
9. Notice of Proposed Transfers. Prior to any proposed transfer of this
Warrant or the shares of Common Stock received on the exercise of this Warrant
(the "SECURITIES"), unless there is in effect a registration statement under the
Securities Act of 1933, as amended (the "SECURITIES ACT"), covering the proposed
transfer, the Holder thereof shall give written notice to the Company of such
Holder's intention to effect such transfer. Each such notice shall describe the
manner and circumstances of the proposed transfer in sufficient detail, and
shall, if the Company so requests, be accompanied (except in transactions in
compliance with Rule 144) by either (i) an unqualified written opinion of legal
counsel who shall be reasonably satisfactory to the Company addressed to the
Company and reasonable satisfactory in form and substance to the Company's
counsel, to the effect that the proposed transfer of the Securities may be
effected without registration under the Securities Act, or (ii) a "no action"
letter from the Commission to the effect that the transfer of such securities
without registration will not result in a recommendation by the staff of the
Commission that action be taken with respect thereto, whereupon the Holder of
the Securities shall be entitled to transfer the Securities in accordance with
the terms of the notice delivered by the Holder to the Company; provided,
however, no such registration statement or opinion of counsel shall be necessary
for a transfer by a Holder to any affiliate of such Holder, or a transfer by a
Holder which is a corporation to a shareholder of such corporation, or a
transfer by a Holder which is a partnership to a partner of such partnership or
a retired partner of such partnership who retires after the date hereof, or to
the estate of any such partner or retired partner or the transfer by gift, will
or intestate succession of any partner to his spouse or lineal descendants or
ancestors, if the transferee agrees in writing to be subject to the terms hereof
to the same extent as if such transferee were the original Holder hereunder.
Each certificate evidencing the Securities transferred as above provided shall
bear the appropriate restrictive legend set forth above, except that such
certificate shall not bear such restrictive legend if in the opinion of counsel
for the Company such legend is not required in order to establish compliance
with any provisions of the Securities Act.
10. Miscellaneous. This Warrant shall be governed by the laws of the
State of California. The headings in this Warrant are for purposes of
convenience of reference only, and shall not be deemed to constitute a part
hereof. Neither this Warrant nor any term hereof may be changed, waived,
discharged or terminated orally but only by an instrument in writing signed by
the Company and the registered holder hereof. All notices and other
communications from the Company to the holder of this Warrant shall be delivered
personally or mailed by first class mail, postage prepaid, to the address
furnished to the Company in writing by the last holder of this Warrant who shall
have furnished an address to the Company in writing, and if mailed shall be
deemed given three days after deposit in the U.S. Mail.
11. Taxes. The Company shall pay all taxes and other governmental
charges that may be imposed in respect of the issuance or delivery of the Shares
or any portion thereof.
ISSUED this Day day of Month, Year.
RASTER GRAPHICS, INC.,
a California corporation
By:_____________________________________
Rak Kumar, President
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