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EXHIBIT 4.2
THE WARRANTS REPRESENTED BY THIS CERTIFICATE AND THE SECURITIES ISSUABLE UPON
EXERCISE THEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"), AND MAY NOT BE OFFERED OR SOLD EXCEPT: (I) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT, (II) THE EXTENT APPLICABLE
PURSUANT TO RULE 144 UNDER SUCH ACT (OR ANY SIMILAR RULE UNDER SUCH ACT RELATING
TO THE DISPOSITION OF SECURITIES), OR (III) UPON THE DELIVERY BY THE HOLDER TO
THE COMPANY OF AN OPINION OF COUNSEL, REASONABLY SATISFACTORY TO COUNSEL FOR THE
COMPANY, STATING THAT AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT IS AVAILABLE
THE WIDECOM GROUP INC.
COMMON STOCK PURCHASE WARRANT
Expiration Date: May 19, 2000
Warrant to Purchase 50,000 Issued as of May 19, 1997
Shares of Common Stock
For value received, GLOBAL BERMUDA LIMITED PARTNERSHIP, a
Bermuda limited partnership with an office at 601 Carlson Parkway, Suite 200,
Minnetonka, Minnesota, USA 55305, or registered assigns, is entitled to
subscribe for and purchase from THE WIDECOM GROUP Inc., an Ontario corporation
(hereinafter called the "Company"), at the price of US$4.00 per share (the
"Warrant Purchase Price"), at any time from the date hereof until 5:00 p.m.
Toronto time on May 19, 2000 (the "Expiration Date,"), up to that number of
fully paid and non-assessable shares of the Company's common stock, no par value
(the "Common Stock") as is specified, above subject, however, to the provisions
and upon the terms and conditions hereinafter set forth.
1. Exercise of Warrant. The rights represented by this Warrant may be
exercised by the holder hereof, in whole or in part but not as to a fractional
share of Common Stock), by the surrender of this Warrant properly endorsed if
required) at the office of any duly appointed transfer agent for the Common
Stock or at the office of the Company at 55 City Centre Drive, Suite 500,
Mississauga, Ontario, Canada, L5B 1M3, and upon payment to the Company, or for
the account of the Company, by cash or by certified check or bank draft, of the
Warrant Purchase Price for such shares. The Company agrees that the shares so
purchased shall be and be deemed to be issued to the 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 and payment made for such shares as
aforesaid Certificates for the shares so purchased shall be delivered to the
holder hereof within a reasonable time, not exceeding 10 days, after the rights
represented by this Warrant shall have been so exercised, and, unless this
Warrant has expired, a new Warrant representing the number of shares, if any,
with respect to which this Warrant shall not then have been exercised shall also
be issued to the holder hereof within such time.
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2. Shares to be Issued; Reservation of Shares. The Company covenants
and agrees that all shares may be issued upon the exercise of the rights
represented by this Warrant will, upon issuance, be validly authorized, duly
issued and outstanding, fully paid and non-assessable and free from all taxes,
liens and charges with respect to the issue thereof. The Company further
covenants and warrants that it will from time to time take all action required
to assure that the par value per share of the Common Stock Is at all times equal
to or less than the effective Warrant Purchase Price. 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 times have authorized and
reserved a sufficient number of shares of its Common Stock to provide for the
exercise of the rights represented by this Warrant.
3. Adjustments
(a) Adjustments for Consolidations, Split-Ups. If the Company
shall at any time prior to the expiration of this Warrant subdivide its
outstanding securities for which this Warrant is exercisable, by or otherwise,
or combine or consolidate by reclassification, reverse split or otherwise such
outstanding securities or issue additional shares of such securities, the amount
of securities issuable on the exercise of the unexercised portion of this
warrant shall forthwith be proportionately increased in the case of a
subdivision or stock dividend, or proportionately decreased in the case of a
combination or consolidation, and the Warrant Purchase Price then applicable to
securities covered by the unexercised portion of this Warrant shall forthwith be
proportionately decreased in the case of a subdivision or stock dividend, or
proportionately increased in the case of a combination or consolidation.
(b) Reorganizations. If any capital reorganization or
reclassification of the capital stock of the Company, or 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, then, as a condition of
such reorganization, reclassification, consolidation, merger or sale, 1awful and
adequate provision shall be made whereby the holder hereof shall thereafter have
the right to purchase and receive upon the basis and upon the terms and
conditions specified herein and in lieu of the shares of the Common Stock of the
Company immediately theretofore issuable upon exercise of the rights represented
hereby, such shares of stock, securities or assets as may be issued or payable
with respect to or in exchange for a number of outstanding shares of such Common
Stock equal to the number of shares of such Common stock immediately theretofore
issuable upon exercise of the rights represented hereby had such reorganization,
reclassification, consolidation, merger or sale not taken place; and in any such
case appropriate provisions shall be made with respect to the rights and
interests of each holder hereof to the end that the provisions hereof (including
without limitation provisions for adjustment of the Warrant Purchase Price and
of the number of shares issuable 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. The
Company shall not effect any such consolidation, merger or sale unless prior to
or simultaneously with the consummation thereof the corporation (if other than
the Company) resulting from such consolidation or merger or the corporation
purchasing such assets shall assume (by a written instrument executed and mailed
by registered
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mail or delivered to each registered holder hereof at the last address of such
holder appearing on the books of the Company) the obligation of the Company to
deliver to such holder such shares of stock, securities or assets as, in
accordance with the foregoing provisions, such holder may be entitled to
purchase.
(c) Notice of Adjustment. Upon each adjustment of the aforementioned
adjustments, the Company shall give prompt written notice thereof addressed to
the registered holder hereof at the address of such holder as shown on the
records of the Company, which notice shall state the change, if any, in the
Warrant Purchase Price resulting from such adjustment and the increase or
decrease, if any, in the number of shares of Common Stock (or, other securities
or assets) issuable upon the exercise of this Warrant, setting forth in
reasonable detail the method of calculation and the facts upon which such
calculation is based.
4. Notice of Capital Changes. In case at any time: (a) the Company
shall pay any dividend payable in stock upon its Common Stock or make any
distribution to the holders of its Common Stock; (1) 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; (c) 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 (d) there shall be a voluntary or
involuntary dissolution, liquidation or winding up of the Company; then, in any
one or more of such cases, the Company shall give to the holder of this Warrant:
(i) at least 10 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 (ii) 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. Such notice in accordance with the foregoing clause (i) 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,
and such notice in accordance with the foregoing clause (ii) shall also specify
the date on which the holders of Common Stock shall be entitled to exchange
their Common Stock for securities or other property deliverable upon such
reorganization, reclassification, consolidation, merger, sale, dissolution,
liquidation or winding up, as the case may be. Each such written notice shall be
given 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.
5. Common Stock. As used herein in the term "Common Stock" shall mean
and include the Company's Common Stock authorized on the date of the original
issue of the Warrants and shall also include any capital stock of any class of
the Company thereafter authorized which shall not be limited to a fixed sum or
percentage in respect of the rights of the holders thereof to participate in
dividends and in the distribution of assets upon the voluntary or involuntary
liquidation, dissolution or winding up of the Company; provided that the shares
which may be purchased pursuant to this Warrant shall include only shares of the
class of Common Stock, no
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par value referred to at the beginning of this agreement or, in the case of any
reorganization, reclassification, consolidation, merger or sale of assets of the
character referred to in subparagraph 3(b) hereof, the stock, securities or
assets provided for in such subparagraph.
6. Transfer. Subject to the provisions of the Agreement, this Warrant
and all rights hereunder are transferable, in whole or in part, at the offices
referred to in paragraph 1 hereof by the holder hereof in person or by duly
authorized attorney, 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 for transfer by the attachment of stock
powers or otherwise, shall be deemed negotiable and that when this Warrant is so
endorsed, the holder hereof may be treated by the Company and all other persons
dealing with this Warrant as the absolute owner hereof for any purposes 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 each transfer on such books the Company in may treat
the registered holder hereof as the owner hereof for all purposes.
7. Exchange. This Warrant is exchangeable, upon its surrender at the
offices referred to in paragraph I for new Warrants of like tenor representing
in the aggregate the right to subscribe for arid purchase the number of shares
which may be subscribed for and purchased hereunder, each of such new Warrants
to represent the right to subscribe for and purchase such number of shares as
shall be designated by the holder hereof at the dine of such surrender. Upon
receipt of evidence 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 delivery of a bond of indemnity satisfactory to the Company,
or, in the case of any such mutilation, upon surrender or cancellation of this
Warrant, the Company will issue to the holder hereof a new warrant of like
tenor, in lieu of this Warrant, representing the right to subscribe for and
purchase the number of shares which may be subscribed for and purchased
hereunder.
IN WITNESS WHEREOF, The WideCom Group Inc. has caused this Warrant to
be signed by its duly authorized officer as of the date first written above.
THE WIDECOM GROUP INC.
By: __________________________
Raja S. Tuji, President
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