Exhibit 4.2
NEITHER THIS WARRANT NOR THE SHARES OF STOCK ISSUABLE UPON EXERCISE
HEREOF HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED. NO SALE, TRANSFER OR OTHER DISPOSITION OF THIS WARRANT OR
SAID SHARES MAY BE EFFECTED WITHOUT (I) AN EFFECTIVE REGISTRATION
STATEMENT RELATED THERETO, (II) AN OPINION OF COUNSEL FOR THE HOLDER
THAT SUCH REGISTRATION IS NOT REQUIRED OR (III) RECEIPT OF A NO-ACTION
LETTER FROM THE SECURITIES AND EXCHANGE COMMISSION TO THE EFFECT THAT
REGISTRATION UNDER THE ACT IS NOT REQUIRED.
Number of Shares Issuable Upon Exercise: __________
WARRANT TO PURCHASE
SHARES OF COMMON STOCK
Expires: March 31, 2007
THIS CERTIFIES THAT, for value received, ________________, a[n]
_____________ whose address is ______________________________, is entitled to
subscribe for and purchase __________ shares of the Common Stock of CompuPrint,
Inc., a North Carolina corporation (the "Company"), at a price per share of
$.01, subject to the provisions and upon the terms and conditions hereinafter
set forth. As used herein, the term "Shares" shall mean the Company's presently
authorized Common Stock, and the term "Grant Date" shall mean March 31, 2002.
1. TERM. This Warrant is exercisable, in whole or in part, at any time
and from time to time from and after the Grant Date and prior to the fifth
anniversary of the Grant Date, March 31, 2007.
2. METHOD OF EXERCISE; NET ISSUE EXERCISE.
2.1 METHOD OF EXERCISE; PAYMENT; ISSUANCE OF NEW WARRANT. This
Warrant may be exercised by the holder hereof, in whole or in part and from time
to time, by the surrender of this Warrant (with the Notice of Exercise form
attached hereto as Exhibit A-1 duly executed) at the principal office of the
Company and by the payment to the Company, by cash, check or cancellation of
indebtedness, of an amount equal to the Exercise Price per share multiplied by
the number of Shares then being purchased. The person or persons in whose
name(s) any certificate(s) representing Shares shall be issuable upon exercise
of this Warrant shall be deemed to have become the holder(s) of record of, and
shall be treated for all purposes as the record holder(s) of, the Shares
represented thereby (and such Shares shall be deemed to have been issued)
immediately prior to the close of business on the date or dates upon which this
Warrant is exercised. In the event of any exercise of this Warrant, certificates
for the Shares so purchased shall be delivered to the holder hereof as soon as
possible and in any event within twenty (20) days of receipt of such notice and,
unless this Warrant has been fully exercised or expired, a new Warrant
representing the portion of the Shares, if any, with respect to which this
Warrant shall not then have been exercised shall also be issued to the holder
hereof as soon as possible thereafter.
2.2 AUTOMATIC EXERCISE. To the extent this Warrant is not previously
exercised, and if the fair market value of one share of the Company's Common
Stock is greater than the Exercise Price, this Warrant shall be deemed
automatically exercised pursuant to Section 2.3 below (even if not surrendered)
immediately before its expiration. For purposes of such automatic exercise, the
fair market value of one share of the Company's Common Stock upon such
expiration shall be determined pursuant to Section 2.3(b) below. To the extent
this Warrant or any portion thereof is deemed automatically exercised pursuant
to this Section 2.2, the Company agrees to promptly notify the holder hereof of
the number of Shares, if any, the holder hereof is to receive by reason of such
automatic exercise.
2.3 RIGHT TO CONVERT WARRANT INTO STOCK; NET ISSUANCE.
(a) In addition to and without limiting the rights of the holder
under the terms of this Warrant, the holder may elect to convert this Warrant or
any portion thereof (the "Conversion Right") into shares of Common Stock, the
aggregate value of which shares shall be equal to the value of this Warrant or
the portion thereof being converted. The Conversion Right may be exercised by
the holder by surrender of this Warrant at the principal office of the Company
together with notice of the holder's intention to exercise the Conversion Right,
in which event the Company shall issue to the holder a number of shares of the
Company's Common Stock computed using the following formula:
Y(A-B)
X = --------
A
Where: X = The number of shares of Common Stock to be issued to the holder.
Y = The number of shares of Common Stock purchasable under this
Warrant subject to the exercise election.
A = The fair market value of one share of the Company's Common Stock.
B = Exercise Price.
(b) For purposes of this Section 2.3, the "fair market value" per
share of the Company's Common Stock shall mean:
(i) If the Conversion Right is exercised in connection with
and contingent upon the Company's initial public offering, and if the Company's
registration statement relating to such offering has been declared effective by
the Securities and Exchange Commission, then the initial "Price to Public"
specified in the final prospectus with respect to such offering; or
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(ii) If the Conversion Right is not exercised in connection
with and contingent upon the Company's initial public offering, then as follows:
(A) If the Common Stock is traded on a national
securities exchange or admitted to unlisted trading privileges on such an
exchange, or is listed on the Nasdaq National Market (the "National Market
System"), the fair market value shall be the average of the last reported
sale prices of the Common Stock on such exchange or on the Nasdaq National
Market on the last ten (10) trading days (or all such trading days such
Common Stock has been traded if fewer than 10 trading days) before the
effective date of exercise of the Conversion Right or if no such sale is
made on any such day, the mean of the closing bid and asked prices for such
day on such exchange or on the Nasdaq National Market;
(B) If the Common Stock is not so listed or admitted to
unlisted trading privileges, the fair market value shall be the average of
the means of the last bid and asked prices reported on the last ten (10)
trading days (or all such trading days such Common Stock has been traded if
fewer than 10 trading days) before the date of the election (1) by the
Nasdaq Stock Market or (2) if reports are unavailable under clause (1)
above, by the National Quotation Bureau Incorporated; and
(C) If the Common Stock is not so listed or admitted to
unlisted trading privileges and bid and asked prices are not reported, the
fair market value shall be the price per share which the Company could
obtain from a willing buyer for shares sold by the Company from authorized
but unissued shares, as such price shall be determined by mutual agreement
of the Company and the holder of this Warrant.
3. STOCK FULLY PAID; RESERVATION OF SHARES. All Shares that may be issued
upon the exercise of this Warrant shall, upon issuance, be validly issued, fully
paid and nonassessable, and free from all taxes, liens and charges with respect
to the issue thereof. During the period within which this Warrant may be
exercised, the Company will at all times have duly authorized and reserved, for
the purpose of issuance upon exercise of this Warrant, a sufficient number of
shares of Common Stock issuable upon exercise thereof).
4. NOTICES OF RECORD DATE. In the event of any taking by the Company of a
record of its shareholders for the purpose of determining shareholders who are
entitled to receive payment of any dividend or other distribution, any right to
subscribe for, purchase or otherwise acquire any share of any class or any other
securities or property, or to receive any other right, or for the purpose of
determining shareholders who are entitled to vote in connection with any
proposed merger or consolidation of the Company with or into any other
corporation, or any proposed sale, lease or conveyance of all or substantially
all of the assets of the Company, or any proposed liquidation, dissolution or
winding up of the Company, then, in connection with each such event, the Company
shall mail to the holder of this Warrant at least twenty (20) days prior written
notice of the date on which any such record is to be taken for the purpose of
such dividend, distribution, right(s) or vote of the shareholders. Each such
written notice shall specify the amount and character of any such dividend,
distribution or right(s), and shall set forth, in reasonable detail, the matter
requiring any such vote of the shareholders.
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5. FRACTIONAL SHARES. No fractional shares of Common Stock will be issued
in connection with any exercise hereunder, but in lieu of such fractional shares
the Company shall round up to the nearest full share.
6. COMPLIANCE WITH SECURITIES ACT; DISPOSITION OF WARRANT OR SHARES OF
COMMON STOCK.
(a) COMPLIANCE WITH SECURITIES ACT. The holder of this Warrant, by
acceptance hereof, agrees that this Warrant and the Shares to be issued upon
exercise hereof are being acquired for investment and that such holder will not
offer, sell or otherwise dispose of this Warrant or any Shares to be issued upon
exercise hereof except under circumstances which will not result in a violation
of the Securities Act. This Warrant and all Shares issued upon exercise of this
Warrant (unless registered under the Securities Act) shall be stamped or
imprinted with a legend in substantially the following form:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED. NO SALE OR DISPOSITION MAY BE EFFECTED WITHOUT (I)
AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO, (II) AN OPINION
OF COUNSEL FOR THE HOLDER THAT SUCH REGISTRATION IS NOT REQUIRED OR
(III) RECEIPT OF A NO-ACTION LETTER FROM THE SECURITIES AND EXCHANGE
COMMISSION TO THE EFFECT THAT REGISTRATION UNDER THE ACT IS NOT
REQUIRED.
(b) DISPOSITION OF WARRANT AND SHARES. With respect to any offer, sale
or other disposition of this Warrant or any Shares acquired pursuant to the
exercise of this Warrant prior to registration thereof, the holder hereof and
each subsequent holder of this Warrant agrees to give written notice to the
Company prior thereto, describing briefly the manner thereof, together with a
written opinion of such holder's counsel, if reasonably requested by the
Company, to the effect that such offer, sale or other disposition may be
effected without registration or qualification (under the Securities Act as then
in effect or any federal or state law then in effect) of this Warrant or such
Shares and indicating whether or not under the Securities Act certificates for
this Warrant or such Shares to be sold or otherwise disposed of require any
restrictive legend as to applicable restrictions on transferability in order to
insure compliance with the Securities Act. Each certificate representing this
Warrant or the Shares or Common Stock thus transferred (except a transfer
pursuant to Rule 144) shall bear a legend as to the applicable restrictions on
transferability in order to insure compliance with the Securities Act unless, in
the aforesaid opinion of counsel for the holder, such legend is not required in
order to insure compliance with the Securities Act. Nothing herein shall
restrict the transfer of this Warrant or any portion hereof by the initial
holder hereof to any partnership affiliated with the initial holder, or to any
partner of any such partnership provided such transfer may be made in compliance
with applicable federal and state securities laws. The Company may issue stop
transfer instructions to its transfer agent in connection with the foregoing
restrictions.
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7. RIGHTS AS SHAREHOLDERS; INFORMATION.
7.1 SHAREHOLDER RIGHTS. Except as set forth herein, no holder of this
Warrant, as such, shall be entitled to vote upon any matter submitted to
shareholders at any meeting thereof, or to receive notice of meetings, or be
deemed the holder of Common Stock until this Warrant shall have been exercised
and the Shares purchasable upon such exercise shall have become deliverable, as
provided herein.
8. REPRESENTATIONS AND WARRANTIES. This Warrant is issued and delivered
on the basis of the following:
(a) This Warrant has been duly authorized, executed and delivered by
the Company and constitutes the valid and binding obligation of the Company,
enforceable in accordance with its terms;
(b) The Shares have been duly authorized and reserved for issuance by
the Company and, when issued in accordance with the terms hereof, will be
validly issued, fully paid and nonassessable;
(c) The execution and delivery of this Warrant, the issuance of the
Shares upon exercise of this Warrant in accordance with the terms hereof and the
compliance by the Company with the provisions hereof (i) are not and will not be
inconsistent with the Company's Charter or Bylaws, (ii) do not and will not
contravene any law, governmental rule or regulation, judgment or order
applicable to the Company, and (iii) do not and will not contravene any
provision of, or constitute a default under, any indenture, mortgage, contract
or other instrument of which the Company is a party or by which it is bound or
require the consent or approval of, the giving of notice to, the registration
with or the taking of any action in respect of or by, any Federal, state or
local government authority or agency or other person.
9. MODIFICATION AND WAIVER. This Warrant and any provision hereof may be
changed, waived, discharged or terminated only by an instrument in writing
signed by the party against which enforcement of the same is sought.
10. NOTICES. Any notice, request or other document required or permitted
to be given or delivered to the holder hereof or the Company shall be delivered
or sent to each such holder at its address as shown on the books of the Company
or to the Company at the address indicated therefor on the signature page of
this Warrant and shall be deemed received by the holder upon the earlier of
actual receipt or, if sent by certified mail (postage prepaid), five (5) days
after deposit in the U.S. mail.
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11. BINDING EFFECT ON SUCCESSORS. This Warrant shall be binding upon any
corporation succeeding the Company by merger, consolidation or acquisition of
all or substantially all of the Company's assets. All of the obligations of the
Company relating to the Shares shall survive the exercise and termination of
this Warrant. All of the covenants and agreements of the Company shall inure to
the benefit of the successors and assigns of the holder hereof. The Company
will, at the time of the exercise of this Warrant, in whole or in part, upon
request of the holder hereof but at the Company's expense, acknowledge in
writing its continuing obligation to the holder hereof in respect of any rights
to which the holder hereof shall continue to be entitled after such exercise in
accordance with this Warrant; provided, that the failure of the holder hereof to
make any such request shall not affect the continuing obligation of the Company
to the holder hereof in respect of such rights.
12. LOST WARRANTS OR STOCK CERTIFICATES. The Company covenants to the
holder hereof that upon receipt of evidence reasonably satisfactory to the
Company of the loss, theft, destruction, or mutilation of this Warrant or any
stock certificate issued upon exercise thereof and, in the case of any such
loss, theft or destruction, upon receipt of an indemnity reasonably satisfactory
to the Company, or in the case of any such mutilation upon surrender and
cancellation of such Warrant or stock certificate, the Company shall make and
deliver a new Warrant or stock certificate in lieu of the lost, stolen,
destroyed or mutilated Warrant or stock certificate.
13. NO IMPAIRMENT. The Company will not, by amendment of its Charter or
through any reorganization, recapitalization, transfer of assets, consolidation,
merger, dissolution, issue or sale of securities or any other voluntary action,
avoid or seek to avoid the observance or performance of any of the terms to be
observed or performed hereunder by the Company, but will at all times in good
faith assist in the carrying out of all the provisions of this Warrant and in
the taking of all such action as may be necessary or appropriate in order to
protect the rights of the holder of this Warrant against impairment.
14. DESCRIPTIVE HEADINGS. The descriptive headings of the several
paragraphs of this Warrant are inserted for convenience only and do not
constitute a part of this Warrant.
15. RECOVERY OF LITIGATION COSTS. If any legal action or other proceeding
is brought for the enforcement of this Warrant, or because of an alleged
dispute, breach, default, or misrepresentation in connection with any of the
provisions of this Warrant, the successful or prevailing party or parties shall
be entitled to recover reasonable attorneys' fees and other costs incurred in
that action or proceeding, in addition to any other relief to which it or they
may be entitled.
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16. GOVERNING LAW. THIS WARRANT SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY, THE LAWS OF
THE STATE OF NEW YORK.
Date: March 31, 2002 CompuPrint, Inc.,
a North Carolina corporation
By:
------------------------------------
David R. Allison
President
2457 Industrial Park Road
Lincolnton, North Carolina 28092
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EXHIBIT A-1
NOTICE OF EXERCISE
To: CompuPrint, Inc.
1. The undersigned hereby:
[ ] elects to purchase _______________ shares of Common Stock of
CompuPrint, Inc. pursuant to the terms of the attached Warrant,
and tenders herewith payment of the purchase price of such shares
in full; or
[ ] elects to exercise its net issuance rights pursuant to Section
2.3 of the attached Warrant with respect to ______________ shares
of Common Stock of CompuPrint, Inc.
2. Please issue a certificate or certificates representing said shares in
the name of the undersigned or in such other name or names as are specified
below:
__________________________________________________
(NAME)
__________________________________________________
(ADDRESS)
__________________________________________________
(ADDRESS)
3. The undersigned represents that the aforesaid shares are being
acquired for the account of the undersigned for investment and not with a view
to, or for resale in connection with, the distribution thereof and that the
undersigned has no present intention of distributing or reselling such shares.
________________________
(DATE)
________________________________________
(SIGNATURE)