Exhibit 4.2
SERIES "A" WARRANT
FOR THE PURCHASE OF SHARES OF COMMON STOCK
This STOCK PURCHASE WARRANT ("Warrant") is issued this _____ of
____________________, 200__, by VEQUITY CORPORATION, a Colorado corporation (the
"Company") to____________________________(print), who is an advertiser and
shareholder of the Company, ("Holder"). This Warrant has been issued by the
Company to the Holder pursuant to a Registration Statement dated ____________,
2000.
1. Issuance of Warrant.For value received, the Company hereby grants to Holder,
subject to the provisions set forth herein, the right to purchase an aggregate
of _____ Shares ( ) common stock, $.001 par value per share, ("Shares"), subject
to adjustment as set forth herein at an exercise price per share of $6.25 (the
"Warrant Exercise Price") subject to adjustments as set forth herein.The holder
agrees with the Company that this Warrant is issued, and all the rights
hereunder shall be held subject to, all of the conditions, limitations and
provisions set forth herein.
2. Exercise of Warrant. This Warrant may be exercised by Holder as to all or any
part of the Shares covered hereby at any time during the period (the "Exercise
Period") commencing on the date of the first annual renewal of the holders
website advertisement with Vequity, in the manner and within the time period set
forth in paragraph 3 below, and ending on the expiration of thirty days
thereafter. Such renewal of the holders website advertisement is a condition
precedent to the exercise of this Warrant. This Warrant, if not exercised, will
expire and become null and void upon the expiration of the Exercise Period for
this Warrant. If, however, the final day for exercise of this Warrant is on a
Saturday, Sunday, or a U.S. federal or Colorado state holiday observed by the
closure of banks in Colorado, then this Warrant may be exercised on the next
succeeding business day. This Warrant is subject to (i) redemption by the
Company pursuant to the occurrence of the conditions set forth in paragraph 12
hereof; and (ii) earlier termination upon the occurrence of the conditions set
forth in paragraph 8 hereof. This Warrant will be exercised upon mailing of the
completed and executed Exercise Form attached hereto, for the numbers of Shares
purchased, together with this Warrant and a certified or cashier's check payable
to the order of the Company for the aggregate purchase price of the Shares so
purchased, addressed to Vequity c/o Xxxxxx X. Xxxxx, 0000 Xxxx Xxxxxxxx Xxxx,
Xxxxx 000, Xxxxxxxxx, Xxxxxxxx 00000 or at such other address as the Company
shall designate in writing to Holder. Delivery shall be deemed accomplished as
of the date such items are placed in the U.S. Mail (or any other mail delivery
service), postage prepaid, addressed as set forth above. The following are
additional items related to the exercise of this Warrant:
(a) Upon the exercise of this Warrant as aforesaid, the Company shall as
promptly as practicable, and in any event within fifteen (15) days
thereafter, execute and deliver to holder a certificate or
certificates in the name of holder for the total number of whole
Shares for which this Warrant is being exercised. Upon receipt by the
Company of: (i) a properly completed Exercise Form, (ii) this original
Warrant, and (iii) the funds required for the Exercise price, the
Holder shall be deemed to be the Holder of record of the Shares to be
issued upon such exercise, notwithstanding that the stock transfer
books of the Company shall then be closed or that certificates
representing such Common Shares shall not then be actually delivered
to the holder.
(b) If this Warrant shall be exercised with respect to less than all of
the Shares, holder shall be entitled to receive a similar warrant of
like tenor and date covering the number of Shares in respect of which
this Warrant shall not have been exercised.
(c) This Warrant shall lapse and shall be null and void, if not exercised
by holder during the Exercise Period, unless terminated sooner
pursuant to the provisions of paragraph 8 or 12 hereof.
3. First Annual Renewal of Website Advertisement. The first annual renewal of
the Holder's website advertisement may be accomplished after the Holder's
initial purchase of website advertising from the Company and at any time during
the period of thirteen (13) months thereafter. The first annual renewal of the
Holder's website will be deemed complete upon the Company's receipt of payment
for a second year of website advertising from the Holder.
4. Covenants of Company. The Company covenants and agrees that all the Shares
which may be issued upon the exercise of this Warrant will, upon issuance, be
fully paid and non-assessable and free from all taxes, liens and charges with
respect to the issuance thereof (other than taxes in respect of any transfer
occurring contemporaneously with such issue).The Company further covenants and
agrees that during the period within which this Warrant may be exercised, the
Company will at all times have authorized and reserved, a sufficient number of
Shares to provide for the exercise of this Warrant and the delivery of the
Shares upon such exercise.
5. Legend and Restrictions on Transfer. Any Shares issued as a result of the
exercise of this Warrant will be restricted as to their transferability and will
bear a restrictive legend as set forth herein. There is no established trading
market or price for the company's Shares. The Company does not currently intend
to register with the Nasdaq National Market or any other exchange or market
until the Company's Management in its sole discretion determines to remove the
legend and make application for inclusion in a national market. The company's
transfer agent will not transfer these Shares unless approved by the company
after consultation with counsel to determine that the transfer is in compliance
with this agreement or that the legend may be removed and that the Shares may be
transferred in compliance with the provisions of the Securities Act.
(a) No Shares issued as a result of the exercise of this Warrant may be
transferred except as set forth below:
Any recipient of Shares issued as a result of the exercise of this
Warranty may transfer its interest to immediate family members by
transfer or inheritance. Immediate family members shall mean the
spouse or children of a shareholder. In addition, a shareholder may
transfer its interest to an LLC, partnership, corporation, trust or
other entity controlled by such shareholder or such shareholder's
immediate family members. All Holders agree to the restrictions on
transfers specified herein.
(b) The following legend will appear on the Shares issued as a result of
the exercise of this Warrant:
"The Shares evidenced by this certificate are subject to the transfer
restrictions set forth in the "Warrant For The Purchase of Shares of
Common Stock" pursuant to which these Shares were issued. These
securities may not be offered or sold or transferred unless or until
the transfer is approved by the Company after consultation with
counsel to determine that the transfer is in compliance with the terms
of this Warrant or until this legend is removed by the Company's
Management, in its sole discretion."
6. Adjustments of Warrant Exercise Price and Number of Shares. The Warrant
Exercise Price and number of Shares purchasable pursuant to this Warrant shall
be subject to adjustment from time to time as follows:
(a) In the event the Company shall at any time after the issuance of this
Warrant, and prior to its exercise or expiration, issue or sell any
Shares through a registered public offering (excluding any Shares
issued or sold pursuant to the Company's Registration Statement dated
*, 2000 and any Shares issued pursuant to outstanding options,
conversion rights or redemption rights) for a consideration per share
less than the Warrant Exercise Price in effect immediately prior to
the issuance or sale of such Shares, then, and thereafter successively
upon each such issuance or sale, the Warrant Exercise Price in effect
immediately prior to the issuance or sale of such Shares shall
forthwith be reduced to a Warrant Exercise Price (calculated to the
nearest full cent) equal to the price at which such Shares were issued
or sold. For the purposes of any computation to be made in accordance
with the provisions of this paragraph the following provisions shall
be applicable.
2
(i) In the event of the issuance or sale of Shares for cash, the
consideration received by the Company therefore shall be deemed
to be the net cash proceeds received by the Company for such
Shares, after deducting commissions or other expenses paid or
incurred by the Company for any underwriting of, or otherwise in
connection with, the issuance or sale of such Shares.
(ii) In the event of the issuance or sale of Shares for consideration
other than cash or consideration a part of which shall be other
than cash, the amount of the consideration other than cash
received by the Company for such Shares shall be deemed to be the
fair market value of such consideration as determined by the
Board of Directors of the Company, irrespective of any accounting
treatment thereof.
(iii) In the event of the issuance of Shares as a dividend, the Shares
shall be deemed to have been issued for consideration equal to
the Warrant Exercise Price at the close of business on the
dividend record date. If no dividend record date is fixed, the
date on which the resolution of the Board of Directors of the
Company declaring such dividend is adopted shall be treated as
the record date.
(b.) In the event the Company shall at any time exchange as a whole, by
subdivision or consolidation in any manner or by effecting a stock
dividend, the number of Shares, then outstanding into a different
number of Shares, with or without par value, then, thereafter, the
number of Shares which Holder shall have the right to purchase
(calculated immediately prior to such change), shall be increased or
decreased, as the case may be, in direct proportion to the increase or
decrease in the number of Shares of the Company issued and outstanding
by reasons of such change, and the Warrant Exercise Price of the
Shares after such change shall, in the event of an increase in the
number of Shares be proportionately reduced and in the event of a
decrease in the number of Shares, be proportionately increased.
7. Survival of Mergers and Reorganizations. In the event of the reclassification
of, or change in the outstanding Shares (other than a change in the number of
Shares outstanding as a result of the sale or issuance of Shares and other than
a change in par value, or from par value to no par value, or from no par value
to par value, or as a result of a subdivision, combination or stock dividend),
or in the event of any consolidation or merger of the Company into, another
corporation, the Company, or such successor Company, as the case may be, shall
provide that Holder shall thereafter be entitled to purchase the kind and amount
of Shares of stock and other securities and property receivable upon such
reclassification, change, consolidation, or merger by a Holder of the number of
Shares which this Warrant entitled the Holder thereof to purchase immediately
prior to such reclassification, change, consolidation or merger. Such Company,
which thereafter shall be deemed to be the Company for purposes of this Warrant,
shall provide for adjustments, which shall be as nearly equivalent as may be
practicable to the adjustments provided for in paragraph 6 hereof.
8. Sale of Assets, Dissolution. In the event of the sale of all or substantially
all the assets of the Company, or in the event of any distribution of all or
substantially all of its assets in dissolution or liquidation, the Company shall
mail notice thereof by certified mail to Holder, at the Holder's address on the
books and records of the Company and shall make no distribution to the
Shareholders of the Company until the expiration of thirty (30) days from the
date of mailing of the aforesaid notice; provided, however, that in any such
event if Holder shall not exercise this Warrant at or before the thirtieth
(30th) day after the date of mailing such notice, this Warrant automatically
becomes null and void. The Company shall not, however, be prevented from
consummating any such sale without awaiting the expiration of such thirty (30)
day period, it being the intent and purpose hereof to enable Holder, upon
exercise of this Warrant, to participate in the distribution of the
consideration to be received by the Company upon any such sale or in the
distribution of assets upon any dissolution or liquidation.
3
9. No Fractional Shares. The number of Shares subject to issuance upon the
exercise of this Warrant shall be rounded down to the nearest whole number of
Shares so that no fractional Share or scrip shall be issued upon the exercise of
this Warrant. Holder shall not be entitled to receive any compensation or
property in lieu of such fractional Share that it may have been entitled to in
the absence of this provision. It is the intent of the Company that all
fractional interests shall be eliminated.
10. Notices. If there shall be any adjustment as provided in paragraph 6 hereof,
or if securities or property other than Shares of the Company shall become
purchasable in lieu of Shares upon exercise of this Warrant, the Company shall
forthwith cause written notice thereof to be sent by registered mail, postage
prepaid, to Holder at its address shown on the books of the Company, which
notice shall be accompanied by a certificate of either independent public
accountants of recognized standing or the Chief Financial Officer of the
Company, setting forth in reasonable detail the basis for the adjusted Warrant
Exercise Price or the facts requiring any such adjustment.
11. Taxes. The issuance of any stock or other certificate upon the exercise of
this Warrant shall be made without charge to Holder for any tax in respect of
the issuance of such certificate. The Company shall not, however, be required to
pay any tax which may be payable in respect of any transfer involved in the
issuance and delivery of any certificate in a name other than that of Holder, as
the registered Holder of this Warrant, and the Company shall not be required to
issue or deliver any such certificate unless and until the person or persons
requesting the issuance thereof shall have paid to the Company the amount of
such tax or shall have established to the satisfaction of the Company that such
tax has been paid.
4
12. Redemption. The Company may redeem (repurchase) this Warrant from the Holder
for $1.00 per share at any time after its issuance and prior to its exercise or
expiration by giving thirty (30) days prior written notice to the Holder by
certified mail, return receipt requested at the Holder's address shown on the
books of the Company. Notwithstanding the foregoing, upon receipt of a notice of
the Company's intent to redeem this Warrant for $1.00 per share, the Holder may
exercise this Warrant and purchase the Shares at the Warrant Exercise Price at
any time within thirty (30) days from the date of the redemption notice in which
event the Company shall not have the right the redeem the Warrant. If the Holder
does not exercise this Warrant within such thirty (30) day period, then the
Company will redeem (repurchase) this Warrant for the $1.00 per share redemption
price. On and after the date and time fixed for any such redemption, Holder
shall have no rights with respect to this Warrant except to receive the
redemption price per share upon the surrender of this Warrant.
13. Limitations on Transferability of Warrant: This Warrant may not be
transferred except to the Holder's immediate family members by transfer or
inheritance. Immediate family members shall mean the spouse or children of a
Warrant Holder. In addition, a Holder may transfer this Warrant to an LLC,
partnership, corporation, trust or other entity controlled by such Holder or
such Xxxxxx's immediate family members. Xxxxxx agrees to the restrictions on
transfers specified herein. In the event this Holder elects to transfer or
assign this Warrant, in whole or in part to a permitted transferee, it shall do
so by completing, executing and delivering a copy of the appropriate Warrant
Transfer Form that is attached hereto to the permitted assignee(s) and the
Company. If this Warrant is transferred, in whole or in part, to a permitted
transferee, this Warrant shall be surrendered at our principal office, or such
other office as we shall notify the Holder hereof in writing, along with the
appropriate completed and executed Warrant Transfer Form attached hereto, and
thereupon, a new Warrant(s) will be issued to the permitted transferee (and the
Holder in the event of a partial assignment) for the number of Shares covered by
such Warrant(s) as appropriate. Upon the transfer of this Warrant by Holder in
compliance with the applicable provisions hereof to our satisfaction and that of
our counsel, (i) the designated permitted transferee(s) shall have the same
rights and privileges and be subject to the same obligations as originally
granted hereunder to Holder to the extent of such assignment, and (ii) all
references to this Warrant to Holder shall be deemed, and shall upon delivery of
a new Warrant to the permitted transferee be changed, to the permitted
transferee.
14. Warrant Holder Not Shareholder. This Warrant does not confer upon Holder any
right to vote or to consent or to receive notice as a shareholder of the Company
in respect of any matters whatsoever, or any other rights or liabilities as a
Shareholder, prior to the exercise thereof as provided herein.
15. Lost Warrants. In case any Warrant shall be mutilated, lost, stolen or
destroyed, the Company may issue a new Warrant of like date, tenor and
denomination and deliver the same in exchange and substitution for and upon
surrender and cancellation of any mutilated Warrant, or in lieu of any Warrant
lost, stolen or destroyed, upon receipt of evidence satisfactory to the Company
of the loss, theft or destruction of such Warrant, and upon receipt of indemnity
satisfactory to the Company.
16. Indemnification by Xxxxxx. Holder, by acceptance hereof, agrees to indemnify
and hold harmless the Company, its directors and officers, and each other
person, if any, who controls the Company, against any losses, claims, damages,
or liabilities, joint or several, to which the Company or any such director or
officer or any such person may become subject under the Act, or any other
statute or at common law, insofar as such losses, claims, damages or liabilities
(or actions in respect thereof) arise out of or are based upon the disposition
by Holder of this Warrant or the Shares issuable upon the exercise hereof in
violation of the provisions of this Warrant.
IN WITNESS WHEREOF, the Company has caused this Warrant to be issued and
Xxxxxx has approved and accepted the same as of the day and year first above
written.
Vequity Corporation
By:
-------------------------------------
Xxxxxx X. Xxxxx, President
HOLDER
By: _______________________
Name: ____________________
Title: ____________________
5
WARRANT EXERCISE FORM
The Holder named below hereby exercises this Series "A" Warrant for the
purchase of the number of Common Shares indicated in the Warrant that is
attached hereto. Enclosed herewith is:
(a) my certified or cashiers' check for the Warrant Exercise Price made
payable to Vequity Corporation, and
(b) the Series "A" Warrant.
Xxxxxx agrees that Xxxxxx issued as a result of the exercise of this Warrant may
only be transferred in accordance with the terms set forth in the Warrant
Agreement.
1. Name and Address of holder: _____________________________________
_____________________________________
_____________________________________
2. SIGNATURES
Authorized signature: _______________________________________
Authorized signature of Co-Owner: ___________________________
Date:___________________________
Mail to:
Vequity Corporation
%Xxxxxx X. Xxxxx
0000 Xxxx Xxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxxx 00000
For office use only:
Date Received: ___________________________
Date Accepted: ___________________________
Date Rejected: ___________________________
Holder's Check Amount: ___________________
Check No.: ____________ Check Date: _____________
Deposited: _______________________________
6
