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Exhibit A
WARRANT CERTIFICATE
NEITHER THE WARRANT REPRESENTED BY THIS CERTIFICATE NOR THE COMMON STOCK
ISSUABLE UPON THE EXERCISE HEREOF HAS BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS, AND NEITHER MAY BE
SOLD OR OTHERWISE TRANSFERRED WITHOUT REGISTRATION UNDER SUCH ACT AND ANY
APPLICABLE STATE SECURITIES LAW UNLESS AN EXEMPTION FROM REGISTRATION IS THEN
AVAILABLE.
WARRANT TO PURCHASE COMMON STOCK
OF
VISUAL EDGE SYSTEMS INC.
Date: February __, 1997
This is to certify that, FOR VALUE RECEIVED, the registered
holder hereof, ____________________ (the "Holder" or the "Holders"), is
entitled to purchase, subject to the provisions of this Warrant Certificate,
from VISUAL EDGE SYSTEMS INC., a Delaware corporation (the "Company"), up to
_______ shares (as such number may be adjusted in accordance with Section 5
hereof) of the Company's Common Stock, par value $.01 per share (such class of
stock, together with any capital stock of the Company into which such class of
stock shall be converted, being referred to herein as "Stock"), at $10.00 per
share (as such number may be adjusted in accordance with Section 5 hereof) (the
"Exercise Price"). The number of shares of Stock to be received upon the
exercise of this Warrant and the Exercise Price shall be adjusted from time to
time as hereinafter set forth. The shares of Stock or other securities or
property deliverable upon such exercise, as adjusted from time to time, are
hereinafter sometimes referred to as "Warrant Shares."
This Warrant Certificate is one of the Warrant Certificates
(the "Warrants", which term includes all Warrants
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issued in substitution therefor) originally issued in connection with the issue
and sale by the Company of_________ shares of its Common Stock. The Warrants
and the Common Stock have been issued pursuant to the Share and Warrant
Purchase Agreements, dated as of February 27, 1997 (the "Purchase Agreements"),
between the Company and the investors named therein (the "Purchasers"). The
Warrants originally so issued evidence rights to purchase an aggregate of
________ Warrant Shares at the Exercise Price. The Purchase Agreement under
which this Warrant was originally issued is herein referred to as the "Purchase
Agreement." This Warrant is subject to the provisions, and is entitled to the
benefits, of the Purchase Agreement.
Section 1. Exercise of Warrant.
1.1. Manner of Exercise. (a) This Warrant may be
exercised by the Holder, in whole or in part, at any time or from time to time
through and including the fifth (5th) anniversary of the date hereof (the
"Expiration Date") during normal business hours on any Business Day (as defined
in the Purchase Agreement) by surrender of this Warrant, together with the form
of subscription duly executed by such Holder in substantially the form attached
as Annex A hereto, to the Company at its office designated pursuant to Section
16 of the Purchase Agreement.
(b) Payment of the Exercise Price for the Warrant Shares
shall be made by certified or bank check or wire transfer payable to the order
of the Company, in any case, in an amount equal to (A) the number of Warrant
Shares specified in such form of subscription, multiplied by (B) the then
current Exercise Price. The Holder shall thereupon be entitled to receive the
number of Warrant Shares specified in such form of subscription (plus cash in
lieu of any fractional share as provided in Section 1.3 hereof).
1.2. Effective Date. Each exercise of this Warrant
pursuant to Section 1.1 hereof shall be deemed to have been effected
immediately prior to the close of business on the Business Day on which this
Warrant is surrendered to the Company as provided in Section 1.1 hereof (except
that if such exercise is in connection with an underwritten public offering of
Warrant Shares subject to this Warrant, then such exercise shall be
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deemed to have been effected upon such surrender of this Warrant). On each
such day that an exercise of this Warrant is deemed effected, the person or
persons in whose name or names any certificate or certificates for Warrant
Shares are issuable upon such exercise (as provided in Section 1.3 hereof)
shall be deemed to have become the Holder or Holders of record thereof.
1.3. Warrant Share Certificates, Cash for Fractional
Warrant Shares and Reissuance of Warrants. As promptly as practicable after
the exercise of this Warrant, in whole or in part, and in any event within five
(5) Business Days thereafter (unless such exercise shall be in connection with
a public offering of Warrant Shares subject to this Warrant, in which event
concurrently with such exercise), the Company at its expense (including the
payment by it of any applicable issue, stamp or other taxes) will cause to be
issued in the name of and delivered to the Holder:
(a) a certificate or certificates for the number of
Warrant Shares to which the Holder shall be entitled upon such
exercise plus, in lieu of any fractional share to which the Holder
would otherwise be entitled, cash in an amount equal to the same
fraction of the Market Price (as defined in Section 5.1 hereof) per
Warrant Share on the effective date of such exercise; and
(b) in case such exercise is in part only, a new Warrant
or Warrants, substantially identical hereto, representing the rights
formerly represented by this Warrant which have not expired or been
exercised.
1.4. Acknowledgment of Obligation. The Company will, at
the time of or at any time after each exercise of this Warrant, upon the
request of the Holder hereof or of any Warrant Shares issued upon such
exercise, acknowledge in writing its continuing obligation to afford to such
Holder all rights to which such Holder shall continue to be entitled under this
Warrant Certificate and the Purchase Agreement; provided, that if any such
Holder shall fail to make any such request, the failure shall not affect the
continuing obligation of the Company to afford such rights to such Holder.
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1.5. Conditional Exercise. Notwithstanding any other
provision hereof, if any exercise of any portion of this Warrant is to be made
in connection with a public offering of Warrant Shares or any transaction
described in Section 5.8 hereof, the exercise of any portion of this Warrant
may, at the election of the Holder, be conditioned upon the consummation of the
public offering or such transaction, in which case such exercise shall not be
deemed to be effective until the consummation of such public offering or
transaction.
Section 2. Reservation of Shares.
The Company shall at all times after the date hereof and until
the Expiration Date reserve for issuance and delivery upon exercise of this
Warrant the number of Warrant Shares as shall be required for issuance and
delivery upon exercise in full of this Warrant.
Section 3. Transfer, Exchange, Assignment or Loss of Warrant.
3.1. Transfer. This Warrant may be assigned in whole or in
part or transferred in whole or in part; subject, however, to compliance with
the provisions of the Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder (the "Act").
3.2. Procedure for Assignment or Transfer. Any assignment or
transfer hereunder shall be made by surrender of this Warrant to the Company at
its office designated pursuant to Section 15 of the Purchase Agreement,
together with the form of assignment duly executed by the Holder in
substantially the form attached as Annex B hereto and funds sufficient to pay
any required transfer tax. In such event the Company shall, without charge,
execute and deliver a new Warrant or Warrants substantially identical hereto in
the name of the assignee or assignees named in such instrument of assignment
and designate the assignee or assignees as the registered holder or holders on
the Company's records and this Warrant shall promptly be canceled. This
Warrant may be divided or combined with other Warrants which carry the same
rights upon presentation thereof at the principal office of the Company
together with a written
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notice signed by the holder thereof, specifying the names and denominations in
which new Warrants are to be issued.
3.3. Loss, Theft, Destruction or Mutilation. Upon receipt by
the Company of evidence satisfactory to it of the loss, theft, destruction or
mutilation of this Warrant, and (in the case of loss, theft or destruction) of
reasonably satisfactory indemnification to the Company or (in the case of
mutilation) presentation of this Warrant for surrender and cancellation, the
Company will execute and deliver a new Warrant identical hereto and any such
lost, stolen, destroyed or mutilated Warrant shall thereupon become void.
Section 4. Warrant Certificate Holder Not Deemed a
Stockholder.
Except as otherwise provided herein, the Holders shall not,
solely because of holding this Warrant, be entitled to vote, receive dividends
or be deemed the holder of Stock or any other securities of the Company which
may at any time be issuable on the exercise of the Warrant for any purpose
whatsoever, nor shall anything contained herein be construed to confer upon the
Holders, as such, any of the rights of a stockholder of the Company or any
right to vote for the election of directors or upon any matters submitted to
stockholders at any meeting thereof, or to give or withhold consent to any
corporate action (whether upon any recapitalization, issuance of stock,
reclassification of stock, change of par value or change of stock to no par
value, consolidation, merger, conveyance or otherwise), or to receive notice of
meetings or other actions affecting stockholders, or to receive dividend or
subscription rights, or otherwise, until this Warrant shall have been exercised
in accordance with the provisions hereof.
Section 5. Anti-Dilution.
The number of Warrant Shares for which this Warrant is
exercisable and/or the Exercise Price at which such Warrant Shares may be
purchased upon exercise of this Warrant shall be subject to adjustment from
time to time as set forth in this Section 5. The Company shall give the
Holders notice of any event described below which requires an adjustment
pursuant to this Section 5 at the time of such event.
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5.1. Special Definitions. For purposes of this Section 5
the following terms shall have the following meanings:
"Additional Shares of Stock" shall mean all shares of Stock
issued by the Company after the date hereof, other than (i) the Stock to be
issued upon exercise of the Warrants, (ii) redeemable warrants to purchase
1,300,000 shares of Common Stock issued pursuant to the Warrant Agreement,
dated as of July 24, 1996, among the Company, Whale Securities Co., L.P.
("Whale") and American Stock Transfer & Trust Company, (iii) the Stock to be
issued upon exercise of the warrants for shares of Stock issued to Whale, (iv)
shares of Stock to be issued pursuant to the Company's 1996 Stock Option Plan
and (vi) 130,000 shares of Stock to be issued to certain executives upon the
exercise of outstanding stock options held by such persons.
"Convertible Securities" shall mean evidences of indebtedness,
shares of preferred stock or other securities which are convertible into or
exchangeable, with or without payment of additional consideration in cash or
property, for Additional Shares of Stock, either immediately or upon the
occurrence of a specified date or a specified event.
5.2. Stock Dividends, Subdivisions and Combinations. If
at any time the Company shall:
(i) take a record of the holders of its Stock for the
purpose of entitling them to receive a dividend payable in, or other
distribution of, Additional Shares of Stock,
(ii) subdivide its outstanding shares of Stock into a
larger number of shares of Stock, or
(iii) combine its outstanding shares of Stock into a
smaller number of shares of Stock,
then (I) the Warrant Shares for which this Warrant is exercisable immediately
after the occurrence of any such event shall be adjusted to equal the number of
shares of Stock which a record holder of the same number of shares of Stock for
which this Warrant is exercisable immediately prior to the occurrence of such
event would own or be entitled to receive after the
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happening of such event, and (II) the Exercise Price shall be adjusted to equal
(x) the Exercise Price multiplied by the Warrant Shares for which this Warrant
is exercisable immediately prior to the adjustment divided by (y) the Warrant
Shares for which this Warrant is exercisable immediately after such adjustment.
5.3. Certain other Distributions. If at any time the
Company shall take a record of the holders of its Stock for the purpose of
entitling them to receive any dividend or other distribution of:
(i) cash,
(ii) any evidences of its indebtedness, any shares of its
Stock or any other securities or property of any nature whatsoever
(other than cash or Additional Shares of Stock), or
(iii) any warrants or other rights to subscribe for or
purchase any evidences of its indebtedness, any share of its Stock or
any other securities or property of any nature whatsoever (other than
cash or Additional Shares of Stock),
then, (I) the Warrant Shares for which this Warrant is exercisable shall be
adjusted to equal the product of the Warrant Shares for which this Warrant is
exercisable immediately prior to such adjustment by a fraction (x) the
numerator of which shall be the Exercise Price at the date of taking such
record and (y) the denominator of which shall be such Exercise Price per share
of Stock minus the amount allocable to one share of Stock of any such cash so
distributable and of the fair value (as determined in good faith by the Board
of Directors of the Company) of any and all such evidences of indebtedness,
shares of stock, other securities or property or warrants or other subscription
or purchase rights so distributable, and (II) the Exercise Price shall be
adjusted to equal (x) the Exercise Price multiplied by the Warrant Shares for
which this Warrant is exercisable immediately prior to the adjustment divided
by (y) the Warrant Shares for which this Warrant is exercisable immediately
after such adjustment. A reclassification of the Stock (other than a change in
par value, or from par value to no par value or from no par value to par value)
into shares of Stock and shares of any
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other class of stock shall be deemed a distribution by the Company to the
Holders of its Stock of such shares of such other class of stock within the
meaning of this Section 5.3 and, if the outstanding shares of the Stock shall
be changed into a larger or smaller number of shares of the Stock as part of
such reclassification, such change shall be deemed a subdivision or
combination, as the case may be, of the outstanding shares of the Stock within
the meaning of Section 5.2.
5.4. Issuance of Additional Shares of Stock. If at any
time the Company shall (except as hereinafter provided) issue or sell any
Additional Shares of Stock in exchange for consideration in an amount per
Additional Share of Stock less than the Exercise Price in effect immediately
prior to such issuance or sale of Additional Shares of Stock, then the Exercise
Price as to the Warrant Shares for which this Warrant is exercisable
immediately prior to such adjustment shall be adjusted to equal the price
determined by multiplying the Exercise Price by a fraction, of which
(x) the numerator shall be (1) the number of shares
of Stock outstanding immediately prior to such issuance or
sale of Additional Shares of Stock plus (2) the number of
shares of Stock which the aggregate amount of consideration,
if any, received by the Company for the total number of such
Additional Shares of Stock so issued or sold would purchase at
the Exercise Price in effect immediately prior to such
issuance or sale of Additional Shares of Stock, and
(y) the denominator shall be the number of shares of
Stock outstanding immediately after such issuance or sale of
Additional Shares of Stock.
The provisions of this Section 5.4 shall not apply to any issuance of
Additional Shares of Common Stock for which an adjustment is provided under
Section 5.2 or 5.3.
5.5. Issuance of Warrants or Other Rights. If at any time
the Company shall take a record of the holders of its Stock for the purpose of
entitling them to receive a distribution of, or shall in any manner (whether
directly or by assumption in a merger in which the Company is the surviving
corporation) issue
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or sell, any warrants or other rights to subscribe for or purchase any
Additional Shares of Stock or any Convertible Securities, whether or not the
rights to exchange or convert thereunder are immediately exercisable, and the
consideration received for such warrants or other rights or such Convertible
Securities shall be less than the Exercise Price in effect immediately prior to
the time of such issue or sale, then the Exercise Price shall be adjusted as
provided in Section 5.4. No further adjustments of the Exercise Price shall be
made upon the actual issue of such Stock or of such Convertible Securities upon
exercise of such warrants or other rights or upon the actual issue of such
Stock upon such conversion or exchange of such Convertible Securities.
5.6. Issuance of Convertible Securities. If at any time
the Company shall take a record of the holders of its Stock for the purpose of
entitling them to receive a distribution of, or shall in any manner (whether
directly or by assumption in a merger in which the Company is the surviving
corporation) issue or sell, any Convertible Securities, whether or not the
rights to convert thereunder are immediately exercisable, and the consideration
received for such stock shall be less than the Exercise Price in effect
immediately prior to the time of such issue or sale, then the Exercise Price
shall be adjusted as provided in Section 5.4. No adjustment of the Exercise
Price shall be made under this Section 5.6 upon the issuance of any Convertible
Securities which are issued pursuant to the exercise of any warrants or other
subscription or purchase rights therefor, if any such adjustment shall
previously have been made upon the issuance of such warrants or other rights
pursuant to Section 5.5. No further adjustments of the Exercise Price shall be
made upon the actual issue of such Stock upon conversion of such Convertible
Securities and, if any issue or sale of such Convertible Securities is made
upon exercise of any warrant or other right to subscribe for or to purchase any
such Convertible Securities for which adjustments of the Exercise Price have
been or are to be made pursuant to other provisions of this Section 5, no
further adjustments of the Exercise Price shall be made by reason of such issue
or sale.
5.7. Other Provisions Applicable to Adjustments under this
Section. The following provisions shall be applicable to the making of
adjustments of the Warrant Shares for which this
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Warrant is exercisable and the Exercise Price at which such Warrant Shares may
be purchased upon exercise of this Warrant provided for in this Section 5:
(a) Computation of Consideration. To the extent that any
Additional Shares of Stock or any Convertible Securities or any
warrants or other rights to subscribe for or purchase any Additional
Shares of Stock or any Convertible Securities shall be issued for cash
consideration, the consideration received by the Company therefor
shall be the amount of the cash received by the Company therefor, or,
if such Additional Shares of Stock or Convertible Securities are
offered by the Company for subscription, the subscription price, or,
if such Additional Shares of Stock or Convertible Securities are sold
to underwriters or dealers for public offering without a subscription
offering, the public offering price (in any such case subtracting any
amounts paid or receivable for accrued interest or accrued dividends
and any compensation, discounts or expenses paid or incurred by the
Company for and in the underwriting of, or otherwise in connection
with, the issuance thereof). To the extent that such issuance shall
be for a consideration other than cash, then except as herein
otherwise expressly provided, the amount of such consideration shall
be deemed to be the fair value of such consideration at the time of
such issuance as determined in good faith by the Board of Directors of
the Company. In case any Additional Shares of Stock or any
Convertible Securities or any warrants or other rights to subscribe
for or purchase such Additional Shares of Stock or Convertible
Securities shall be issued in connection with any merger in which the
Company issues any securities, the amount of consideration therefor
shall be deemed to be the fair value, as determined in good faith by
the Board of Directors of the Company, of such portion of the assets
and business of the nonsurviving corporation as such Board in good
faith shall determine to be attributable to such Additional Shares of
Stock, Convertible Securities, warrants or other rights, as the case
may be. The consideration for any Additional Shares of Stock issuable
pursuant to any warrants or other rights to subscribe for or purchase
the same shall be the consideration received by the Company for
issuing such warrants or other rights plus the additional
consideration payable to the Company upon
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exercise of such warrants or other rights. The consideration for any
Additional Shares of Stock issuable pursuant to the terms of any
Convertible Securities shall be the consideration received by the
Company for issuing warrants or other rights to subscribe for or
purchase such Convertible Securities, plus the consideration paid or
payable to the Company in respect of the subscription for or purchase
of such Convertible Securities, plus the additional consideration, if
any, payable to the Company upon the exercise of the right of
conversion or exchange in such Convertible Securities. In case of the
issuance at any time of any Additional Shares of Stock or Convertible
Securities in payment or satisfaction of any dividends upon any class
of stock other than Stock, the Company shall be deemed to have
received for such Additional Shares of Stock or Convertible Securities
a consideration equal to the amount of such dividend so paid or
satisfied.
(b) When Adjustments to Be Made. The adjustments
required by this Section 5 shall be made whenever and as often as any
event requiring an adjustment shall occur, except that any adjustment
of the Warrant Shares for which this Warrant is exercisable that would
otherwise be required may be postponed (except in the case of a
subdivision or combination of shares of the Stock, as provided for in
Section 5.2) up to, but not beyond the date of exercise if such
adjustment either by itself or with other adjustments not previously
made adds or subtracts less than 1% of the shares of the Stock for
which this Warrant is exercisable immediately prior to the making of
such adjustment. Any adjustment representing a change of less than
such minimum amount (except as aforesaid) which is postponed shall be
carried forward and made as soon as such adjustment, together with
other adjustments required by this Section 5 and not previously made,
would result in a minimum adjustment or on the date of exercise. For
the purpose of any adjustment, any event shall be deemed to have
occurred at the close of business on the date of its occurrence.
(c) Fractional Interests. In computing adjustments under
this Section 5, fractional interests in the Stock shall be taken into
account to the nearest 1/10th of a share.
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(d) When Adjustment Not Required. If the Company shall
take a record of the holders of the Stock for the purpose of entitling
them to receive a dividend or distribution or subscription or purchase
rights and shall, thereafter and before the distribution to
stockholders thereof, legally abandon its plan to pay or deliver such
dividend, distribution, subscription or purchase rights, then
thereafter no adjustment shall be required by reason of the taking of
such record and any such adjustment previously made in respect thereof
shall be rescinded and annulled.
(e) Challenge to Good Faith Determination. Whenever the
Board of Directors of the Company shall be required to make a
determination in good faith of the fair value of any item under this
Section 5, such determination may be challenged in good faith by a
Holder and any dispute shall be resolved by an investment banking firm
of recognized national standing selected by the Company and acceptable
to such Holder. The fees of such investment banker shall be borne by
the Holder if the Company's calculation is determined to be correct
and otherwise by the Company.
5.8. Reorganization, Reclassification, Merger or
Consolidation. If the Company shall at any time reorganize or reclassify the
outstanding shares of Stock (other than a change in par value, or from no par
value to par value, or from par value to no par value, or as a result of a
subdivision or combination) or consolidate with or merge into another
corporation (where the Company is not the continuing corporation after such
merger or consolidation), the Holders shall thereafter be entitled to receive
upon exercise of this Warrant in whole or in part, the same kind and number of
shares of stock and other securities, cash or other property (and upon the same
terms and with the same rights) as would have been distributed to the Holder
upon such reorganization, reclassification, consolidation or merger had the
Holder exercised this Warrant immediately prior to such reorganization,
reclassification, consolidation or merger (subject to subsequent adjustments
under Section 5 hereof). The Holders shall pay upon such exercise the Exercise
Price that otherwise would have been payable pursuant to the terms of this
Warrant. If any such reorganization, reclassification, consolidation or merger
results in a cash distribution in excess
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of the Exercise Price provided by this Warrant, a Holder may, at the Holder's
option, exercise this Warrant without making payment of the Exercise Price, and
in such case the Company shall, upon distribution to the Holder, consider the
Exercise Price to have been paid in full, and in making settlement to the
Holder, shall deduct an amount equal to the Exercise Price from the amount
payable to the Holder. Notwithstanding anything herein to the contrary, the
Company will not effect any such reorganization, reclassification, merger or
consolidation unless prior to the consummation thereof, the corporation who may
be required to deliver any stock, securities or other assets upon the exercise
of this Warrant shall agree by an instrument in writing to deliver such stock,
cash, securities or other assets to the Holder. A sale, transfer or lease of
all or substantially all of the assets of the Company to another person shall
be deemed a reorganization, reclassification, consolidation or merger for the
foregoing purposes.
5.9. Chief Financial Officer's Opinion. Upon each adjustment
of the Exercise Price and upon each change in the Warrant Shares issuable upon
the exercise of this Warrant, and in the event of any change in the rights of a
Holder by reason of other events herein set forth, then and in each such case,
the Company will promptly obtain an opinion of the chief financial officer of
the Company, stating the adjusted Exercise Price and the new Warrant Shares so
issuable, or specifying the other shares of the Stock, securities or assets and
the amount thereof receivable as a result of such change in rights, and setting
forth in reasonable detail the method of calculation and the facts upon which
such calculation is based. The Company will promptly mail a copy of such
opinion to the Holders. If a Holder disagrees with such calculation, the
Company agrees to obtain within thirty (30) business days an opinion of a firm
of independent certified public accountants selected by the Company's Board of
Directors and acceptable to such Holder to review such calculation and the
opinion of such firm of independent certified public accountants shall be final
and binding on the parties and shall be conclusive evidence of the correctness
of the computation with respect to any such adjustment of the Exercise Price
and any such change in the number of Warrant Shares so issuable. The fees of
such accountants shall be borne by the Holder if the Company's
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calculation is determined by such accountants to be correct and otherwise by
the Company.
5.10. Company to Prevent Dilution. In case at any time or
from time to time conditions arise by reason of action taken by the Company,
which in the good faith opinion of its Board of Directors or a majority of the
Holders are not adequately covered by the provisions of this Section 5, and
which might materially and adversely affect the exercise rights of the Holders,
the Board of Directors of the Company shall appoint such firm of independent
certified public accountants acceptable to a majority of the Holders, which
shall give their opinion upon the adjustment, if any, on a basis consistent
with the standards established in the other provisions of this Section 5,
necessary with respect to the Exercise Price, so as to preserve, without
dilution (other than as specifically contemplated by this Warrant), the
exercise rights of the Holders. Upon receipt of such opinion, the Board of
Directors of the Company shall forthwith make the adjustments described
therein.
Section 6. Character of Shares of Stock.
All shares of the Stock issuable upon the exercise of this
Warrant shall, when issued to a Holder, be duly authorized, validly issued,
fully paid and nonassessable, free and clear of any lien or encumbrance and
without any preemptive rights.
Section 7. Notice to Holder.
So long as this Warrant shall be outstanding, (i) if the
Company shall pay any dividend or make any distribution upon the Stock
otherwise than in cash, (ii) if the Company shall offer to the holders of
Stock, for subscription or purchase by them, any shares of any class of stock
of the Company or any other rights or (iii) if there shall be any capital
reorganization of the Company, reclassification of the capital stock of the
Company, consolidation or merger of the Company with or into another
corporation, sale, lease or transfer of all or substantially all of the
property and assets of the Company, voluntary or involuntary dissolution,
liquidation or winding up of the Company, then in any such event, the Company
shall cause to be mailed by certified mail to each Holder, at least 30 days
prior to the relevant date of the event described above, a notice
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containing a brief description of the proposed action and stating the date or
expected date on which a record is to be taken for the purpose of such
dividend, distribution or rights, or the date or expected date such
reclassification, reorganization, consolidation, merger, conveyance, lease or
transfer, dissolution, liquidation or winding up shall take place or be voted
upon by holders of the Stock of record, and the date or expected date as of
which the holders of Stock of record shall be entitled to exchange their shares
of Stock for securities or other property deliverable upon any such event.
Section 8. Disposition of Warrant Shares.
The stock certificates of the Company that will evidence the
Warrant Shares or any other security issued or issuable upon exercise of this
Warrant will be imprinted with a conspicuous legend in substantially the
following form:
The securities represented by this certificate have not been
registered under the Securities Act of 1933 (the "Act") or any
applicable state securities laws and may not be sold, pledged,
hypothecated, donated or otherwise transferred (whether or not for
consideration) unless registered under the Act and any applicable
state securities laws or in a transaction exempt from such
registrations.
Except as provided in the Purchase Agreements, the Company has not agreed to
register any of the Warrant Shares for distribution in accordance with the
provisions of the Act or any applicable state securities laws, and the Company
has not agreed to comply with any exemption from registration under the Act or
any applicable state securities laws for the resale of the Warrant Shares.
Hence, it is the understanding of the Holder that by virtue of the provisions
of certain rules respecting "restricted securities" promulgated by the
Securities and Exchange Commission, the Warrant Shares may be required to be
held indefinitely, unless and until registered under the Act and any applicable
state securities laws unless an exemption from such registration is available,
in which case the Holders may still be limited as to the number of Warrant
Shares that may be sold.
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Section 9. Governing Law.
This Warrant shall be construed in accordance with the laws of
the State of New York applicable to contracts executed and to be performed
wholly within such state without regard to any conflicts of laws principles.
Section 10. Notice.
Any notice, demand, document or other communication given or
delivered hereunder shall be in writing, and may be (i) personally delivered,
(ii) given or made by United States registered or certified mail, return
receipt requested, postage prepaid, or (iii) given or made by overnight
courier, delivery charges prepaid, addressed as follows:
If to the Company: Visual Edge Systems Inc.
2424 North Federal Highway
Suite 100
Boca Raton, Florida 33431
Attention: Chief Executive Officer
With a Copy to: Morgan, Lewis & Bockius LLP
101 Park Avenue
New York, New York 10178
Attention: David W. Pollak, Esq.
If to Holder:
The Company and the Holder shall each have the right to designate a different
address for itself by notice similarly given. All such notices, demands,
documents or other communication will be deemed to be delivered (i) upon
receipt, if personally delivered, (ii) on the third full Business Day following
the day of mailing, if sent by United States registered or certified mail and
(iii) on the Business Day following the date it was sent, if sent by overnight
courier.
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Section 11. Remedies.
The Company stipulates that the remedies at law of the Holder
in the event of any default or threatened default by the Company in the
performance of or compliance with any of the terms of this Warrant are not and
will not be adequate, and that such terms may be specifically enforced by a
decree for the specific performance of any agreement contained herein or by an
injunction against a violation of any of the terms hereof or otherwise, in
addition to any other remedies which may be available at law or in equity.
Section 12. Successors and Assigns.
This Warrant and the rights evidenced hereby shall inure to
the benefit of and be binding upon the successors of the Company and the
successors and assigns of the Holders hereof. The provisions of this Warrant
are intended to be for the benefit of all Holders from time to time of this
Warrant and shall be enforceable by any such Holder.
Section 13. Amendment.
This Warrant Certificate may be modified or amended and any
provision hereof may be waived by a writing executed by the Company and holders
of Warrants representing a majority of the Warrant Shares obtainable upon
exercise of the Warrants.
Section 14. Headings.
Section headings in this Warrant are for reference only and
shall not affect the meaning or construction of any of the provisions hereof.
17
18
IN WITNESS WHEREOF, the Company has executed this Warrant as
of the date first written above.
VISUAL EDGE SYSTEMS INC.
By:
------------------------------
Name: Earl Takefman
Title: Chief Executive Officer
18
19
ANNEX A
FORM OF SUBSCRIPTION
(To be executed only upon exercise of the Warrant
in whole or in part)
To VISUAL EDGE SYSTEMS INC.
The undersigned registered holder of the accompanying Warrant
hereby irrevocably exercises such Warrant or portion thereof for, and purchases
thereunder, _______(1) Warrant Shares (as defined in such Warrant) and herewith
makes payment therefor of $_______. The undersigned requests that the
certificates for such Warrant Shares be issued in the name of, and delivered
to, ____________________________, whose address is ___________________________
______________________________________.
Dated:
------------------------------------
(Name must conform to name of holder
as specified on the face of the
Warrant)
------------------------------------
(Street Address)
------------------------------------
(City) (State) (Zip Code)
- --------------------
(1) Insert the number of Warrant Shares as to which this Warrant is being
exercised. In the case of a partial exercise, a new Warrant or Warrants
will be issued and delivered, representing the unexercised portion of this
Warrant, to the holder surrendering the same.
20
ANNEX B
FORM OF ASSIGNMENT
(To be signed only on transfer of Warrant)
For value received, the undersigned hereby sells, assigns and
transfers unto ____________________________ [Name] of _____________ [Address]
the right represented by the within Warrant to purchase ________ shares of
Common Stock of VISUAL EDGE SYSTEMS INC. to which the within Warrant relates,
and appoints ____________________ Attorney to transfer such right on the books
of VISUAL EDGE SYSTEMS INC., with full power of substitution in the premises.
Dated:
--------------
------------------------------------
(Name must conform to name of holder
as specified on the face of the
Warrant)
------------------------------------
(Street Address)
------------------------------------
(City) (State) (Zip Code)
Signed in the presence of:
- -------------------------------