EXHIBIT 4.2
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS AND NEITHER THE
SECURITIES NOR ANY INTEREST THEREIN MAY BE OFFERED, SOLD, TRANSFERRED, PLEDGED
OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER SUCH ACT OR SUCH LAWS OR AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT AND
SUCH LAWS WHICH, IN THE OPINION OF COUNSEL FOR THE HOLDER, WHICH COUNSEL AND
OPINION ARE REASONABLY SATISFACTORY TO COUNSEL FOR THIS CORPORATION, IS
AVAILABLE.
Warrant to Purchase
100,000 Shares of
Common Stock
As Herein Described
WARRANT TO PURCHASE COMMON STOCK OF
HELISYS, INC.
This is to certify that, for value received, Walter W. Cruttenden, III, or
registered assigns (in each case, the "Holder"), is entitled to purchase,
subject to the provisions of this Warrant (the "Warrant"), from Helisys, Inc., a
Delaware corporation (the "Company"), having its principal place of business at
24015 Garnier Street, Torrance, California 90505, at any time during the period
from the date hereof (the "Commencement Date") to 5:00 p.m., California time,
until November __, 2002 (the "Expiration Date"), at which time this Warrant
shall expire and become void, One Hundred Thousand (100,000) shares ("Warrant
Shares") of the Company's Common Stock (the "Common Stock"). This Warrant shall
be exercisable at $1.75 per share (the "Exercise Price"). The number of shares
of Common Stock to be received upon exercise of this Warrant and the Exercise
Price shall be adjusted from time to time as set forth below. This Warrant also
is subject to the following terms and conditions:
1. Exercise of Warrant. This Warrant may be exercised in full at any time
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from and after the date hereof and before the Expiration Date, but if such date
is a day on which federal or state chartered banking institutions located in the
State of California are authorized to close, then on the next succeeding day
which shall not be such a day. Exercise shall be by presentation and surrender
to the Company at its principal office, or at the office of any transfer agent
designated by the Company, of (i) this Warrant, (ii) the attached exercise form
properly executed, and (iii) a bank check for the Exercise Price for the number
of Warrant Shares specified in the exercise form. If this Warrant is exercised
in part only, the Company or its transfer agent shall, upon surrender of the
Warrant, execute and deliver a new Warrant evidencing the rights of the Holder
to purchase the remaining number of Warrant Shares purchasable hereunder. Upon
receipt by the Company of this Warrant in proper form for exercise, accompanied
by payment as aforesaid, the Holder shall be deemed to be the holder of record
of the Common Stock issuable upon such exercise, notwithstanding that the stock
transfer books of the Company shall then be closed or that certificates
representing such Warrant Shares shall not then be actually delivered by the
Holder.
2. Reservation of Shares. The Company shall, at all times until the
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expiration of this Warrant, reserve for issuance and delivery upon exercise of
this Warrant the number of Warrant Shares which shall be required for issuance
and delivery upon exercise of this Warrant. The
Company covenants that the shares of Common Stock issuable on exercise of the
Warrant shall be duly and validly issued and fully paid and non-assessable and
free of liens, charges and all taxes with respect to the issue thereof, and that
at such time as the Warrant Shares may be sold, without registration, pursuant
to the provisions of Rule 144 of the Securities Act of 1933, as amended (the
"Securities Act"), such shares shall be listed on each national securities
exchange and/or NASDAQ, if any, on which the other shares of outstanding Common
Stock of the Company are then listed.
3. Fractional Interests. The Company shall not issue any fractional shares
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or scrip representing fractional shares upon the exercise or exchange of this
Warrant. With respect to any fraction of a share resulting from the exercise or
exchange hereof, the Company shall pay to the Holder an amount in cash equal to
such fraction multiplied by the current fair market value per share of Common
Stock (herein, the "Market Price Per Share"), determined as follows:
3.1 If the Common Stock is listed on a national securities exchange or
admitted to unlisted trading privileges on such an exchange or is listed on the
National Association of Securities Dealers Automated Quotation System
("NASDAQ"), the current fair market value shall be the last reported sale price
of the Common Stock on such exchange or NASDAQ on the last business day prior to
the date of exercise of this Warrant, or if no such sale is made on such day,
the mean of the closing bid and asked prices for such day on such exchange or
NASDAQ;
3.2 If the Common Stock is not so listed or admitted to unlisted trading
privileges or quoted on NASDAQ, the current fair market value shall be the mean
of the last bid and asked prices reported on the last business day prior to the
date of the exercise of this Warrant (i) by NASDAQ, or (ii) if reports are
unavailable under clause (i) above, by the National Quotation Bureau
Incorporated; or
3.3 If the Common Stock is not so listed or admitted to unlisted trading
privileges and bid and asked prices are not so reported, the current fair market
value shall be an amount, not less than book value, determined in such
reasonable manner as may be prescribed by the Company's Board of Directors in
good faith.
4. No Rights as Stockholders. This Warrant shall not entitle the Holder to
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any rights as a stockholder of the Company, either at law or in equity. The
rights of the Holder are limited to those expressed in this Warrant and are not
enforceable against the Company except to the extent set forth herein.
5. Adjustments.
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5.1 Subdivision or Combination of Shares. If the Company is recapitalized
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through the subdivision or combination of its outstanding shares of Common Stock
into a larger or smaller number of shares, the number of Warrant Shares shall be
increased or reduced, as of the record date for such recapitalization, in the
same proportion as the increase or decrease in the outstanding shares of Common
Stock, and the Exercise Price shall be adjusted so that the aggregate amount
payable for the purchase of all of the Warrant Shares issuable hereunder
immediately after the record date for such recapitalization shall equal the
aggregate amount so payable immediately before such record date.
5.2 Dividends in Common Stock or Securities Convertible into Common Stock.
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If the Company declares a dividend or distribution on Common Stock payable in
Common Stock or securities convertible into Common Stock, the number of shares
of Common Stock for which this Warrant may be exercised shall be increased, as
of the record date for determining which
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holders of Common Stock shall be entitled to receive such dividend, in
proportion to the increase in the number of outstanding shares (and shares of
Common Stock issuable upon conversion of all such securities convertible into
Common Stock) of Common Stock as a result of such dividend or distribution, and
the Exercise Price shall be adjusted so that the aggregate amount payable for
the purchase of all the Warrant Shares issuable hereunder immediately after the
record date for such dividend or distribution shall equal the aggregate amount
so payable immediately before such record date.
5.3 Distributions of Other Securities or Property.
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(a) Other Securities. If the Company distributes to holders of its
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Common Stock, other than as part of its dissolution or liquidation or the
winding up of its affairs, any of its securities (other than Common Stock or
securities convertible into Common Stock) or any evidence of indebtedness, then
in each case, the number of Warrant Shares thereafter purchasable upon exercise
of this Warrant shall be determined by multiplying the number of Warrant Shares
theretofore purchasable by a fraction, of which the numerator shall be the then
Market Price Per Share of Common Stock (as determined pursuant to Section 3) on
the record date mentioned below in this Section 5.3(a), and of which the
denominator shall be the then Market Price Per Share of Common Stock on such
record date, less the then fair value (as determined by the Board of Directors
of the Company in good faith) of the portion of the shares of the Company's
capital stock or evidences of indebtedness distributable with respect to each
share of Common Stock. Such adjustment shall be made whenever any such
distribution is made, and shall become effective retroactively as of the record
date for the determination of stockholders entitled to receive such
distribution.
(b) Property. If the Company distributes to the holders of its Common
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Stock, other than as a part of its dissolution or liquidation or the winding up
of its affairs, any of its assets (including cash), the Exercise Price per
Warrant Share shall be reduced, without any further action by the parties
hereto, by the Per Share Value (as hereinafter defined) of the dividend or
distribution. For the purposes of this Section 5.3(b), the "Per Share Value" of
any dividend or distribution other than cash shall be equal to the fair market
value of such non-cash distribution on each share of Common Stock as determined
in good faith by the Board of Directors of the Company; for dividends or
distributions of cash, the Per Share Value thereof shall be the cash distributed
per share of Common Stock.
5.4 Rights Offering. If the Company offers rights or warrants to persons
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which entitle them to subscribe to or purchase Common Stock or securities
convertible into Common Stock then:
(a) If the price per share (together with the value of the
consideration, if any, paid for such rights or warrants) is lower on the record
date referred to below than the then Market Price Per Share of Common Stock, the
number of Warrant Shares thereafter purchasable upon the exercise of the Warrant
shall be determined by multiplying the number of Warrant Shares immediately
theretofore purchasable upon exercise of the Warrant by a fraction, of which the
numerator shall be the number of shares of Common Stock outstanding on such
record date plus the number of additional shares of Common Stock offered for
subscription or purchase, and of which the denominator shall be the number of
shares of Common Stock outstanding on such record date plus the number of shares
which the aggregate offering price of the total number of shares of Common Stock
so offered would purchase at the then Market Price Per Share of Common Stock.
Such adjustment shall be made whenever such rights or warrants are issued, and
shall become effective retroactively as of the record date for the determination
of stockholders entitled to receive such rights or warrants.
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(b) If, however, the price per share (together with the value of the
consideration, if any, paid for such rights or warrants) is not lower on such
record date than the then Market Price Per Share of Common Stock, the Company
shall give written notice of any such proposed offering to the Holder at least
fifteen days prior to the proposed record date in order to permit the Holder to
exercise this Warrant on or before such record date. There shall be no
adjustment in the number of shares of Common Stock for which this Warrant may be
exercised, or in the Exercise Price, by virtue of any such distribution pursuant
to this Section 5.4(b).
5.5 Merger, Sale of Assets. If at any time while this Warrant, or any
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portion thereof, is outstanding and unexpired there shall be (i) a
reorganization (other than a combination, reclassification, exchange or
subdivision of shares otherwise provided for herein), (ii) a merger or
consolidation of the Company with or into another corporation in which the
Company is not the surviving entity, or a reverse triangular merger in which the
Company is the surviving entity but the shares of the Company's capital stock
outstanding immediately prior to the merger are converted by virtue of the
merger into other property, whether in the form of securities, cash, or
otherwise, or (iii) a sale or transfer of the Company's properties and assets
as, or substantially as, an entirety to any other person, then, as a part of
such reorganization, merger, consolidation, sale or transfer (except in the
event that the Holder has exercised the "Put" pursuant to the provisions of
Section 7 below), lawful provision shall be made so that the holder of this
Warrant shall thereafter be entitled to receive upon exercise of this Warrant,
during the period specified herein and upon payment of the Exercise Price then
in effect, the number of shares of stock or other securities or property of the
successor corporation resulting from such reorganization, merger, consolidation,
sale or transfer that a holder of the shares deliverable upon exercise of this
Warrant would have been entitled to receive in such reorganization,
consolidation, merger, sale or transfer if this Warrant had been exercised
immediately before such reorganization, merger, consolidation, sale or transfer,
all subject to further adjustment as provided in this Section 5. The foregoing
provisions of this Section 5.5 shall similarly apply to successive
reorganizations, consolidations, mergers, sales and transfers and to the stock
or securities of any other corporation that are at the time receivable upon the
exercise of this Warrant. In all events, appropriate adjustment (as determined
in good faith by the Company's Board of Directors) shall be made in the
application of the provisions of this Warrant with respect to the rights and
interests of the Holder after the transaction, to the end that the provisions of
this Warrant shall be applicable after that event, as near as reasonably may be,
in relation to any shares or other property deliverable after that event upon
exercise of this Warrant.
5.6 Reclassification. If the Company, at any time while this Warrant, or
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any portion thereof, remains outstanding and unexpired, shall change any of the
securities as to which purchase rights under this Warrant exist, by
reclassification of securities or otherwise, into the same or a different number
of securities of any other class or classes, this Warrant shall thereafter
represent the right to acquire such number and kind of securities as would have
been issuable as the result of such change with respect to the securities that
were subject to the purchase rights under this Warrant immediately prior to such
reclassification or other change and the Exercise Price therefor shall be
appropriately adjusted, all subject to further adjustment as provided in this
Section 5.
5.7 Liquidation, etc. If the Company shall, at any time before the
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expiration of this Warrant, dissolve, liquidate or wind up its affairs, or
otherwise declare a dividend, or make a distribution to the holders of its
Common Stock generally, whether in cash, property or assets of any kind,
including any dividend payable in stock or securities of any other issuer owned
by the Company (excluding regularly payable cash dividends declared from time to
time by the Company's Board of Directors or any dividend or distribution
referred to in Section 5.2 or Section 5.3), the Exercise Price shall be reduced,
without any further action by the parties hereto, by the
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Per Share Value (as hereinafter defined) of the dividend. For purposes of this
Section 5.7, the "Per Share Value" of a cash dividend or other distribution
shall be the dollar amount of the distribution on each share of Common Stock and
the "Per Share Value" of any dividend or distribution other than cash shall be
equal to the fair market value of such non-cash distribution on each share of
Common Stock as determined in good faith by the Board of Directors of the
Company.
5.8 Adjustment for Change in Market Price per Share. The Exercise Price
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shall be adjusted in the event that, at any time during the period from the date
of this Warrant until the Warrant is exercised or repurchased pursuant to the
provisions of Section 6 below, the average of the mean of the closing bid and
asked prices of the Company's Common Stock, over a consecutive seven (7) day
period, falls below $1.75 per share, in which case the Exercise Price shall be
reduced to equal the lowest average of the mean of the closing bid and asked
prices of the Company's Common Stock, over a consecutive seven (7) day period,
at any time during the period from the date of this Warrant until the Warrant is
exercised or repurchased pursuant to the provisions of Section 6 below.
5.9 Adjustment of Exercise Price. Whenever the number of Warrant Shares
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purchasable upon the exercise of the Warrant is adjusted, the Exercise Price
with respect to the Warrant Shares shall be adjusted by multiplying such
Exercise Price immediately prior to such adjustment by a fraction, of which the
numerator shall be the number of Warrant Shares purchasable upon the exercise of
the Warrant immediately prior to such adjustment, and of which the denominator
shall be the number of Warrant Shares so purchasable immediately thereafter.
5.10 Notice of Adjustment. Whenever the number of Warrant Shares
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purchasable upon the exercise of the Warrant or the Exercise Price of the
Warrant Shares is adjusted as provided herein, the Company shall mail to the
Holder a notice of such adjustment or adjustments, prepared and signed by the
Chief Financial Officer or Secretary of the Company, which sets forth the number
of Warrant Shares purchasable upon the exercise of the Warrant and the Exercise
Price of such Warrant Shares after such adjustment, a brief statement of the
facts requiring such adjustment, and the computation by which such adjustment
was made.
6. Put Agreement.
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6.1 The Company hereby irrevocably grants and issues to Holder the right
and option to sell to the Company (the "Put") this Warrant during the Put
Exercise Period (as defined below), at a purchase price equal to $1.50 per each
unissued Warrant Share hereunder (the "Purchase Price").
6.2 The "Put Exercise Period" shall mean the five (5) day period
immediately following the earlier of (i) such time as the Company no longer has
a class of securities registered pursuant to either Section 12(b) or Section
12(g) of the Securities Exchange Act of 1934 and (ii) consummation of (A) a
merger or consolidation of the Company with or into another corporation in which
the Company is not the surviving entity, or a reverse triangular merger in which
the Company is the surviving entity but the shares of the Company's capital
stock outstanding immediately prior to the merger are converted by virtue of the
merger into other property, whether in the form of securities, cash, or
otherwise, or (B) a sale or transfer of the Company's properties and assets as,
or substantially as, an entirety to any other person.
6.3 The Company shall pay to the Holder, in cash or cashier's check, the
Purchase Price in exchange for the delivery to the Company of this Warrant by
the Holder within thirty (30) days of the receipt of written notice, addressed
as set forth in Section 10 hereto, from
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the Holder of its intention to exercise the Put, provided that such notice is
delivered to the Company within the Put Exercise Period. Notwithstanding the
foregoing, in the event that the Company is prohibited from paying the Purchase
Price as provided above, by virtue of the provisions of Chapter 5 of the
California Corporations Code or otherwise, the Company shall be entitled to pay
the Purchase Price by delivery of a promissory note to the Holder, which
promissory note shall state that the Company shall only be obligated to make
payments thereunder at such time and to the extent that it is able to do so
under applicable law.
7. Notices to Holder. So long as this Warrant shall be outstanding (a) if
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the Company shall pay any dividends or make any distribution upon the Common
Stock otherwise than in cash or (b) if the Company shall offer generally to the
holders of Common Stock the right to subscribe to or purchase any shares of any
class of Common Stock or securities convertible into Common Stock or any similar
rights or (c) if there shall be any capital reorganization of the Company in
which the Company is not the surviving entity, recapitalization of the capital
stock of the Company, consolidation or merger of the Company with or into
another corporation, sale, lease or other transfer of all or substantially all
of the property and assets of the Company, or voluntary or involuntary
dissolution, liquidation or winding up of the Company, then in such event, the
Company shall cause to be mailed to the Holder, at least twenty days prior to
the relevant date described below (or such shorter period as is reasonably
possible if twenty days is not reasonably possible), a notice containing a
description of the proposed action and stating the date or expected date on
which a record of the Company's stockholders is to be taken for the purpose of
any such dividend, distribution of rights, or such reclassification,
reorganization, consolidation, merger, conveyance, lease or transfer,
dissolution, liquidation or winding up is to take place, the effect of the
action, to the extent such effect may be known on the date of such notice, on
the Exercise Price and the kind and amount of shares of stock or other
securities or property deliverable on the exercise of the Warrant, and the date
or expected date, if any is to be fixed, as of which the holders of Common Stock
of record shall be entitled to exchange their shares of Common Stock for
securities or other property deliverable upon such event. All such notices shall
be deemed to have been received (i) in the case of personal delivery, on the
date of such delivery, and (ii) in the case of mailing, on the third business
day following the date of such mailing.
8. Transfer or Loss of Warrant.
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8.1 Transfer. This Warrant may be transferred, exercised, exchanged or
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assigned ("transferred"), in whole or in part, subject to the provisions of this
Section 8.1. The Holder shall have the right to transfer all or a part of this
Warrant and all or part of the Warrant Shares. The Company shall register on
its books any transfer of the Warrant, upon surrender of same to the Company
with a written instrument of transfer duly executed by the registered Holder or
by a duly authorized attorney. Upon any such registration of a transfer, new
Warrant(s) shall be issued to the transferee(s) and the surrendered Warrant
shall be cancelled by the Company. A Warrant may also be exchanged, at the
option of the Holder, for one or more new Warrants representing the aggregate
number of Warrant Shares evidenced by the Warrant surrendered. This Warrant and
the Warrant Shares or any other securities ("Other Securities") received upon
exercise of this Warrant or the conversion of the Warrant Shares shall be
subject to restrictions on transferability unless registered under the
Securities Act, or unless an exemption from registration is available. Until
this Warrant and the Warrant Shares are so registered, this Warrant and any
certificate for Warrant Shares issued or issuable upon exercise of this Warrant
shall contain a legend on the face thereof, in form and substance satisfactory
to counsel for the Company, stating that this Warrant or the Warrant Shares may
not be sold, transferred or otherwise disposed of unless, in the opinion of
counsel satisfactory to the Company, which may be counsel to the Company, that
the Warrant or the Warrant Shares may be transferred without such registration.
This Warrant and the Warrant Shares may also be subject to restrictions on
transferability under
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applicable state securities or blue sky laws. Until the Warrant and the Warrant
Shares are registered under the Securities Act, the Holder shall reimburse the
Company for its expenses, including attorneys' fees, incurred in connection with
any transfer or assignment, in whole or in part, of this Warrant or any Warrant
Shares.
8.2 Compliance with Laws. Until this Warrant or the Warrant Shares are
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registered under the Securities Act, the Company may require, as a condition of
transfer of this Warrant or the Warrant Shares that the transferee (who may be
the Holder in the case of an exchange) represent that the securities being
transferred are being acquired for investment purposes and for the transferee's
own account and not with a view to or for sale in connection with any
distribution of the security. The Company may also require that the transferee
provide written information adequate to establish that the transferee is an
"accredited investor" within the meaning of Regulation D issued under the
Securities Act, or otherwise meets all qualifications necessary to comply with
exemptions to the Securities Act, all as determined by counsel to the Company.
8.3 Loss of Warrant. Upon receipt by the Company of evidence reasonably
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satisfactory to it of loss, theft, destruction or mutilation of this Warrant
and, in the case of loss, theft or destruction, of reasonable satisfactory
indemnification, or, in the case of mutilation, upon surrender of this Warrant,
the Company will execute and deliver, or instruct its transfer agent to execute
and deliver, a new Warrant of like tenor and date, any such lost, stolen or
destroyed Warrant thereupon shall become void.
9. No Impairment. The Company will not, by amendment of its Certificate of
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Incorporation or otherwise, avoid or seek to avoid the observance or performance
of any of the terms of this Warrant, but will at all times, in good faith, take
all such action as may be necessary or appropriate in order to protect the
rights of the Holder against impairment.
10. Notices. Notices and other communications to be given to the Holder
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shall be deemed sufficiently given if delivered by hand, or three (3) business
days after mailing if mailed by registered or certified mail, postage prepaid,
addressed in the name and at the address of such Holder appearing on the records
of the Company. Notices or other communications to the Company shall be deemed
to have been sufficiently given if delivered by hand or three (3) business days
after mailing if mailed by registered or certified mail, postage prepaid, to the
Company at:
Helisys, Inc.
24015 Garnier Street
Torrance, California 90505
Either party may change the address to which notices shall be given by notice
pursuant to this Section 10.
11. Governing Law. This Warrant shall be governed by and construed in
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accordance with the laws of the State of Delaware.
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IN WITNESS WHEREOF, the Company has executed this Warrant as of November 18,
1997.
HELISYS, INC.,
a Delaware corporation
By: /s/ MICHAEL FEYGIN
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Michael Feygin
Its: President and Chief Executive Officer
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Annex A
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[FORM OF EXERCISE]
(To be executed upon exercise of Warrant)
The undersigned hereby irrevocably elects to exercise the right,
represented by this Warrant Certificate, to purchase __________ shares of Common
Stock and herewith tenders payment for such shares of Common Stock in the amount
of $ ____________ by bank check made payable to "Helisys, Inc." The undersigned
requests that a certificate for such shares of Common Stock be registered in the
name of _________________________, whose address is ___________________________.
If such number of shares of Common Stock is less than all of the shares of
Common Stock purchasable hereunder, the undersigned requests that a new Warrant
Certificate representing the remaining balance of the shares of Common Stock be
registered in the name of __________________________, whose address is _________
________________________________, and that such Warrant Certificate be delivered
to _____________________, whose address is ____________________________________.
Dated:
Signature:________________________________________
(Signature must conform in all respects to name of
Holder as specified on the face of the Warrant
Certificate.)
__________________________
(Insert Social Security or
Taxpayer Identification
Number of Holder.)