EXHIBIT 4.2
FORM OF SERIES C WARRANT ISSUED TO INVESTORS
THE SECURITIES REPRESENTED HEREBY MAY NOT BE TRANSFERRED UNLESS (I) SUCH
SECURITIES HAVE BEEN REGISTERED FOR SALE PURSUANT TO THE SECURITIES ACT OF 1933,
AS AMENDED OR (II) THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL REASONABLY
SATISFACTORY TO IT THAT SUCH TRANSFER MAY LAWFULLY BE MADE WITHOUT REGISTRATION
UNDER THE SECURITIES ACT OF 1933 OR QUALIFICATION UNDER APPLICABLE STATE
SECURITIES LAWS.
THIS WARRANT SHALL BE VOID AFTER 5:00 P.M. EASTERN TIME ON [_______],
2011 (the "EXPIRATION DATE").
No. C-[____]
CATCHER HOLDINGS, INC.
WARRANT TO PURCHASE [_____] SHARES OF
COMMON STOCK, PAR VALUE $0.001 PER SHARE
For VALUE RECEIVED, [__________] ("Warrantholder"), is entitled to purchase,
subject to the provisions of this Warrant, from Catcher Holdings, Inc., a
Delaware corporation (the "Company"), at any time not later than 5:00 P.M.,
Eastern time, on the Expiration Date (as defined above), at an exercise price
per share equal to $2.50 (the exercise price in effect being herein called the
"Warrant Price"), [_____] shares ("Warrant Shares) of the Company's Common
Stock, par value $0.001 per share ("Common Stock"). The number of Warrant Shares
purchasable upon exercise of this Warrant and the Warrant Price shall be subject
to adjustment from time to time as described herein.
Section 1. REGISTRATION. The Company shall maintain books for the
transfer and registration of the Warrant. Upon the initial issuance of this
Warrant, the Company shall issue and register the Warrant in the name of the
Warrantholder.
Section 2. TRANSFERS. A provided herein, this Warrant may be transferred
only pursuant to a registration statement filed under the Securities Act of
1933, as amended (the "Securities Act"), or an exemption from such registration.
Subject to such restrictions, the Company shall transfer this Warrant from time
to time upon the books to be maintained by the Company for that purpose, upon
surrender thereof for transfer properly endorsed or accompanied by appropriate
instructions for transfer and such other documents as may be reasonably required
by the Company, including, if required by the Company, an opinion of the
Warrantholder's counsel to the effect that such transfer is exempt from the
registration requirements of the Securities Act, to establish that such transfer
is being made in accordance with the terms hereof, and a new Warrant shall be
issued to the transferee and the surrendered Warrant shall be canceled by the
Company.
Section 3. EXERCISE OF WARRANT. Subject to the provisions hereof, the
Warrantholder may exercise the Warrant in whole or in part at any time prior to
its expiration upon surrender of the Warrant, together with delivery of the duly
executed Warrant exercise form attached hereto as Appendix A (the "Exercise
Agreement") and payment by cash, certified check or wire transfer of funds for
the aggregate Warrant Price for that number of Warrant Shares then being
purchased, to the Company during normal business hours on any business day at
the Company's principal executive offices (or such other office or agency of the
Company as it may designate by notice to the Warrantholder). The Warrant Shares
so purchased shall be deemed to be issued to the Warrantholder or the
Warrantholder's designees, as the record owner of such shares, as of the close
of business on the date on which this Warrant shall have been surrendered (or
evidence of loss, theft or destruction thereof and security or indemnity
satisfactory to the Company), the Warrant Price shall have been paid and the
completed Exercise Agreement shall have been delivered. Certificates for the
Warrant Shares so purchased, representing the aggregate number of shares
specified in the Exercise Agreement, shall be delivered to the Warrantholder
within reasonable time, not exceeding five (5) business days, after this Warrant
shall have been so exercised. The certificates so delivered shall be in such
denominations as may be requested by the Warrantholder and shall be registered
in the name of the Warrantholder or such other name as shall be designated by
the Warrantholder. If this Warrant shall have been exercised only in
part, then, unless this Warrant has expired, the Company shall, at its expense,
at the time of delivery of such certificates, deliver to the Warrantholder a new
Warrant representing the number of shares with respect to which the Warrant
shall not then have been exercised. As used herein, "business day" means a day,
other than a Saturday or Sunday, on which banks in New York City are open for
the general transaction of business.
Section 4. WARRANTHOLDER REPRESENTATIONS AND WARRANTIES.
(a) The Warrantholder represents that the Warrantholder is
an "accredited investor" as such term is defined in Rule 501 of
Regulation D ("Regulation D") promulgated under the Securities Act and
that the Warrantholder is able to bear the economic risk of an
investment in the Warrants and the Common Stock.
(b) The Warrantholder understands that the Warrants have not
been registered under the Securities Act by reason of a claimed
exemption under the provisions of the Securities Act that depends, in
part, upon the Warrantholder's investment intention. In this connection,
the Warrantholder hereby represents that the Warrantholder is purchasing
the Warrants for the Warrantholder's own account for investment and not
with a view toward the resale or distribution to others. The
Warrantholder, if an entity, further represents that it was not formed
for the purpose of purchasing the Warrants and the Common Stock.
(c) The Warrantholder consents to the placement of a legend
on any certificate or other document evidencing the securities that such
securities have not been registered under the Securities Act or any
state securities or "blue sky" laws and setting forth or referring to
the restrictions on transferability and sale thereof contained in this
Agreement. The Warrantholder is aware that the Company will make a
notation in its appropriate records with respect to the restrictions on
the transferability of such securities. The legend to be placed on each
certificate shall be in form substantially similar to the legend set
forth on the first page of this Warrant.
Section 5. PAYMENT OF TAXES. The Company will pay any documentary stamp
taxes attributable to the initial issuance of Warrant Shares issuable upon the
exercise of the Warrant; provided, however, that the Company shall not be
required to pay any tax or taxes which may be payable in respect of any transfer
involved in the issuance or delivery of any certificates for Warrant Shares in a
name other than that of the Warrantholder in respect of which such shares are
issued, and in such case, the Company shall not be required to issue or deliver
any certificate for Warrant Shares or any Warrant until the person requesting
the same has paid to the Company the amount of such tax or has established to
the Company's reasonable satisfaction that such tax has been paid. The
Warrantholder shall be responsible for income taxes due under federal, state or
other law, if any such tax is due.
Section 6. MUTILATED OR MISSING WARRANTS. In case this Warrant shall be
mutilated, lost, stolen, or destroyed, the Company shall issue in exchange and
substitution of and upon cancellation of the mutilated Warrant, or in lieu of
and substitution for the Warrant lost, stolen or destroyed, a new Warrant of
like tenor and for the purchase of a like number of Warrant Shares, but only
upon receipt of evidence reasonably satisfactory to the Company of such loss,
theft or destruction of the Warrant, and with respect to a lost, stolen or
destroyed Warrant, reasonable indemnity or bond with respect thereto, if
requested by the Company.
Section 7. RESERVATION OF COMMON STOCK. The Company hereby covenants
that there will be reserved, and the Company shall at all applicable times
thereafter keep reserved until issued (if necessary) as contemplated by this
Section 7, out of the authorized and unissued shares of Common Stock, sufficient
shares to provide for the exercise of the rights of purchase represented by this
Warrant. The Company agrees that all Warrant Shares issued upon due exercise of
the Warrant shall be, at the time of delivery of the certificates for such
Warrant Shares, duly authorized, validly issued, fully paid and non-assessable
shares of Common Stock of the Company.
Section 8. ADJUSTMENTS. Subject and pursuant to the provisions of this
Section 8, unless waived in a particular case by the Warrantholder, the Warrant
Price and number of Warrant Shares subject to this Warrant shall be subject to
adjustment from time to time as set forth hereinafter.
(a) If the Company shall, at any time or from time to time
while this Warrant is outstanding, pay a dividend or make a distribution
on its Common Stock in shares of Common Stock, subdivide its outstanding
shares of Common Stock into a greater number of shares or combine its
outstanding shares of Common Stock into a smaller number of shares or
issue by reclassification of its outstanding shares of Common Stock any
shares of its capital stock (including any such reclassification in
connection with a consolidation or merger in which the Company is
continuing the corporation), then the number of Warrant Shares
purchasable upon exercise of the Warrant and the Warrant Price in effect
immediately prior to the date upon which such change shall become
effective, shall be adjusted by the Company so that the Warrantholder
thereafter exercising the Warrant shall be entitled to receive the
number of shares of Common Stock or other capital stock which the
Warrantholder would have received if the Warrant had been exercised
immediately prior to such event upon payment of the Warrant Price. Such
adjustments shall be made successively whenever any event listed above
shall occur.
(b) Anything herein to the contrary notwithstanding, the
Company shall not be required to make any adjustment to the Warrant
Price in the case of the issuance of (A) capital stock, options or
convertible securities issued to directors, officers, employees or
consultants of the Company in connection with their service as directors
of the Company, their employment by the Company or their retention as
consultants by the Company pursuant to an equity compensation program
approved by the Board of Directors of the Company or the compensation
committee of the Board of Directors of the Company, (B) shares of the
Common Stock issued upon the conversion or exercise of options or
convertible securities issued prior to the date hereof and (C) shares of
Common Stock issued or issuable by reason of a dividend, stock spilt or
other distribution on shares of Common Stock (but only to the extent
that such a dividend, split or distribution results in an adjustment in
the Warrant Price pursuant to the other provisions of this Warrant)
(collectively, "Excluded Issuances").
Section 9. FRACTIONAL INTEREST. The Company shall not be required to
issue fractions of Warrant Shares upon the exercise of this Warrant. If any
fractional share of Common Stock would, except for the provisions of the first
sentence of this Section 9, be deliverable upon such exercise, the Company, in
lieu of delivering such fractional share, shall pay to the exercising
Warrantholder an amount in cash equal to the Market Price of such fractional
share of Common Stock on the date of exercise.
Section 10. BENEFITS. Nothing in this Warrant shall be construed to give
any person, firm or corporation (other than the Company and the Warrantholder)
any legal or equitable right, remedy or claim, it being agreed that this Warrant
shall be for the sole and exclusive benefit of the Company and the
Warrantholder.
Section 11. NOTICES TO WARRANTHOLDER. Upon the happening of any event
requiring an adjustment of the Warrant Price, the Company shall promptly give
written notice thereof to the Warrantholder at the address appearing in the
records of the Company, stating the adjusted Warrant Price and the adjusted
number of Warrant Shares resulting from such event and setting forth in
reasonable detail the method of calculation and the facts upon which such
calculation is based. Failure to give such notice to the Warrantholder or any
defect therein shall not affect the legality or validity of the subject
adjustment.
Section 12. NOTICES. Unless otherwise provided, any notice required or
permitted under this Warrant shall be given in writing and shall be deemed
effectively given as hereinafter described (i) if given by personal delivery,
then such notice shall be deemed given upon such delivery, (ii) if given by
telex or facsimile, then such notice shall be deemed given upon receipt of
confirmation of complete transmittal, (iii) if given by mail, then such notice
shall be deemed given upon the earlier of (A) receipt of such notice by the
recipient or (B) three days after such notice is deposited in first class mail,
postage prepaid, and (iv) if given by an internationally recognized overnight
air courier, then such notice shall be deemed given one business day after
delivery to such carrier. All notices shall be addressed as follows: if to the
Warrantholder, at its address as set forth in the Company's books and records
and, if to the Company, at the address as follows, or at such other address as
the Warrantholder or the Company may designate by ten days' advance written
notice to the other:
If to the Company:
Catcher Holdings, Inc.
39526 Charlestown Pike
Hamilton, VA 20158
Attn: Charles Sander
Fax: (540) 882-4991
With a copy to:
Morrison & Foerster LLP
12531 High Bluff Drive, Suite 100
San Diego, CA 92130
Attn: Jeremy D. Glaser
Fax: (858) 720-5125
Section 13. REGISTRATION RIGHTS. The Common Stock issuable upon exercise
of this Warrant shall be subject to certain registration rights as provided in
that certain Amended and Restated Registration Rights Agreement dated as of
February 2, 2006, as amended from time to time. Any subsequent Warrantholder may
be entitled to such rights.
Section 14. SUCCESSORS. All the covenants and provisions hereof by or
for the benefit of the Warrantholder shall bind and inure to the benefit of its
respective successors and assigns hereunder.
Section 15. GOVERNING LAW; CONSENT TO JURISDICTION; WAIVER OF JURY BY
TRIAL. This Warrant shall be governed by, and construed in accordance with, the
internal laws of the State of California, without reference to the choice of law
provisions thereof. The Company and, by accepting this Warrant, the
Warrantholder, each irrevocably submits to the exclusive jurisdiction of the
courts of the State of California located in San Diego County and the United
States District Court for the Southern District of California for the purpose of
any suit, action or proceeding contemplated hereby. Service of process in
connection with any such suit, action or proceeding may be served on each party
hereto anywhere in the world by the same methods as are specified for the giving
of notices under this Warrant. The Company and, by accepting this Warrant, the
Warrantholder, each irrevocably consents to the jurisdiction of any such court
in any such suit, action or proceeding and to the laying of venue in such court.
The Company and, by accepting this Warrant, the Warrantholder, each irrevocably
waives any objection to the laying of venue of any such suit, action or
proceeding brought in such courts and irrevocably waives any claim that any such
suit, action or proceeding brought in any such court has been brought in an
inconvenient forum. EACH OF THE COMPANY AND, BY ITS ACCEPTANCE HEREOF, THE
WARRANTHOLDER HEREBY WAIVES ANY RIGHT TO REQUEST A TRIAL BY JURY IN ANY
LITIGATION WITH RESPECT TO THIS WARRANT AS REPRESENTS THAT COUNSEL HAS BEEN
CONSULTED SPECIFICALLY AS TO THIS WAIVER.
Section 16. NO RIGHTS AS STOCKHOLDER. Prior to the exercise of this
Warrant, the Warrantholder shall not have or exercise any rights as a
stockholder of the Company by virtue of its ownership of this Warrant.
Section 17. AMENDMENT; WAIVER. This Warrant is one of a class of
Warrants of like tenor issued by the Company and initially covering an aggregate
of [____] shares of Common Stock (collectively the "Company Warrants"). Any term
of this Warrant may be amended or waived upon the written consent of the Company
and the holders of the Company Warrants representing at least 50% of the number
of shares of Common Stock then subject to all outstanding Company Warrants (the
"Majority Holders"); provided, that (x) any such amendment or waiver must apply
to all Company Warrants of the same tenor; and (y) the number of Warrant Shares
subject to this Warrant, the Warrant Price and the Expiration Date may not be
amended, and the right to exercise this Warrant may not be altered or waived,
without the written consent of the Warrantholder.
Section 18. SECTION HEADINGS. The section headings in this Warrant are
for the convenience of the Company and the Warrantholder and in no way alter,
modify, amend, limit or restrict the provisions hereof.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the Company has caused this Warrant to be duly
executed, as of the 2nd day of February, 2006.
CATCHER HOLDINGS, INC.
By: _________________________
Name: Charles Sander
Title: President and Chief Executive Officer
APPENDIX A
CATCHER HOLDINGS, INC.
WARRANT EXERCISE FORM
To: Catcher Holdings, Inc.:
The undersigned hereby irrevocably elects to exercise the right of
purchase represented by the within Warrant ("Warrant") for, and to purchase
thereunder by the payment of the Warrant Price and surrender of the Warrant,
___________ shares of Common Stock ("Warrant Shares") provided for therein, and
requests that certificates for the Warrant Shares be issued as follows:
_____________________________________
Name
_____________________________________
_____________________________________
Address
_____________________________________
Federal Tax ID or Social Security No.
and delivered by (certified mail to the above address, or electronically
(provide DWAC Instructions: ____________________), or (other (specify):
_________________________), and, if the number of Warrant Shares shall not be
all the Warrant Shares purchasable upon exercise of the Warrant, that a new
Warrant for the balance of the Warrant Shares purchasable upon exercise of this
Warrant be registered in the name of the undersigned Warrantholder or the
undersigned's Assignee as below indicated and delivered to the address stated
below.
Dated: _______________, ____
Note: The signature must correspond with the name of the Warrantholder as
written on the first page of the Warrant in every particular, without alteration
or enlargement or any change whatever, unless the Warrant has been assigned.
Warrant Signature: ____________________
Name (please print): ____________________
_____________________________________
_____________________________________
Address
_____________________________________
Federal Identification or
Social Security No.