EXHIBIT 4.2
MAC FILMWORKS, INC.
FORM OF WARRANT AGREEMENT
__________, 2002
[NAME OF INVESTOR]
[ADDRESS OF INVESTOR]
Dear _________________:
Mac Filmworks, Inc., a Delaware corporation (the "Company"), for value
received, hereby agrees to issue a Class ___ warrant entitling you to
purchase ______________ shares of the Company's common stock (the "Common
Stock"). Such warrants are evidenced by warrant certificates in the form
attached hereto as Exhibit A (each such instrument being hereinafter
referred to as a "Warrant," and each Warrant and all instruments hereafter
issued in replacement, substitution, combination or subdivision thereof
being hereinafter collectively referred to as the "Warrants"). The Warrants
will be issued in consideration of an investment in the Company by you. The
number of shares of Common Stock purchasable upon exercise of the Warrants
is subject to adjustment as provided in Section 5 below. The Warrants will
be exercisable by each you or any other Warrant holder (as defined below) as
to all or any lesser number of shares of Common Stock covered thereby, at an
initial Purchase Price of $____ per share, subject to adjustment as provided
in Section 5 below, for the exercise period defined in Section 3(a) below.
The term "Warrant holder" refers to each person whose name appears on the
signature page of this agreement and any transferee or transferees of any of
them permitted by Section 2(a) below. Such term, when used in this Warrant
Agreement in reference to or in the context of a person who holds or owns
shares of Common Stock issued upon exercise of a Warrant, refers where
appropriate to such person who holds or owns such shares of Common Stock.
1. Representations and Warranties.
The Company represents and warrants to you as follows:
(a) Corporate and Other Action. The Company has all requisite power
and authority (corporate and other), and has taken all necessary corporate
action, to authorize, execute, deliver and perform this Warrant Agreement,
to execute, issue, sell and deliver the Warrants and a certificate or
certificates evidencing the Warrants, to authorize and reserve for issue
and, upon payment from time to time of the Purchase Price, to issue, sell
and deliver, the shares of the Common Stock issuable upon exercise of the
Warrants (the "Shares"), and to perform all of its obligations under this
Warrant Agreement and the Warrants. The Shares, when issued in accordance
with this Agreement, will be duly authorized and validly issued and
outstanding, fully paid and nonassessable and free of all liens, claims,
encumbrances and preemptive rights. This Warrant Agreement and, when
issued, each Warrant issued pursuant hereto, has been or will be duly
executed and delivered by the Company and is or will be a legal, valid and
binding agreement of the Company, enforceable in accordance with its terms.
No authorization, approval, consent or other order of any governmental
entity, regulatory authority or other third party is required for such
authorization, execution, delivery, performance, issue or sale.
(b) No Violation. The execution and delivery of this Warrant
Agreement, the consummation of the transactions herein contemplated and the
compliance with the terms and provisions of this Warrant Agreement and of
the Warrants will not conflict with, or result in a breach of, or constitute
a default or an event permitting acceleration under, any statute, the
Certificate of Incorporation or Bylaws of the Company or any indenture,
mortgage, deed of trust, note, bank loan, credit agreement, franchise,
license, lease, permit, or any other agreement, understanding, instrument,
judgment, decree, order, statute, rule or regulation to which the Company is
a party or by which it is or may be bound.
2. Transfer.
(a) Transferability of Warrants. You agree that the Warrants are
being acquired as an investment and not with a view to distribution thereof
and that the Warrants may not be transferred, sold, assigned or hypothecated
except as provided herein and in compliance with all applicable securities
and other laws.
(b) Registration of Shares. You agree not to make any sale or other
disposition of the Shares except pursuant to a registration statement which
has become effective under the Securities Act of 1933, as amended (the
"Act"), setting forth the terms of such offering, the underwriting discount
and commissions and any other pertinent data with respect thereto, unless
you have provided the Company with an opinion of counsel reasonably
acceptable to the Company that such registration is not required.
Certificates representing the Shares, which are not registered as provided
in Section 2, shall bear an appropriate legend and be subject to a "stop-
transfer" order.
3. Exercise of Warrants, Partial Exercise.
(a) Exercise Period. This Warrant is exercisable from the date hereof
and expires three years from the date of issuance.
(b) Exercise in Full. Subject to Section 3(a), Warrants may be
exercised in full by the Warrant holder by surrender of the Warrants, with
the form of subscription at the end thereof duly executed by such Warrant
holder, to the Company at its principal office at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇
▇-▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Chief Executive Officer,
accompanied by payment, in cash or by certified or bank cashier's check
payable to the order of the Company, in the amount obtained by multiplying
the number of shares of the Common Stock represented by the respective
Warrant or Warrants by the Purchase Price per share (after giving effect to
any adjustments as provided in Section 5 below).
(c) Partial Exercise. Subject to Section 3(a), each Warrant may be
exercised in part by the Warrant holder by surrender of the Warrant, with
the form of subscription at the end thereof duly executed by such Warrant
holder, in the manner and at the place provided in Section 3(b) above,
accompanied by payment, in cash or by certified or bank cashier's check
payable to the order of the Company, in amount obtained by multiplying the
number of shares of the Common Stock designated by the Warrant holder in the
form of subscription attached to the Warrant by the Purchase Price per share
(after giving effect to any adjustments as provided in Section 5 below).
Upon any such partial exercise, the Company at its expense will forthwith
issue and deliver to or upon the order of the Warrant holder a new Warrant
of like tenor, in the name of the Warrant holder thereof or as the Warrant
holder (upon payment by such Warrant holder of any applicable transfer
taxes) may request, subject to Section 2(a), calling in the aggregate for
the purchase of the number of shares of the Common Stock equal to the number
of such shares called for on the face of the respective Warrant (after
giving effect to any adjustment herein as provided in Section 5 below) minus
the number of such shares designated by the Warrant holder in the
aforementioned form of subscription.
(d) Company to Reaffirm Obligations. The Company will, at the time of
any exercise of any Warrant, upon the request of the Warrant holder,
acknowledge in writing its continuing obligation to afford to such Warrant
holder any rights to which such Warrant holder shall continue to be entitled
after such exercise in accordance with the provisions of this Warrant
Agreement; provided, however, that if the Warrant holder shall fail to make
any such request, such failure shall not affect the continuing obligation of
the Company to afford to such Warrant holder any such right.
4. Delivery of Stock Certificates on Exercise.
Any exercise of the Warrants pursuant to Section 3 shall be deemed to
have been effected immediately prior to the close of business on the date on
which the Warrants together with the subscription form and the payment for
the aggregate Purchase Price shall have been received by the Company. At
such time, the person or persons in whose name or names any certificate or
certificates representing the Shares or Other Securities (as defined below)
shall be issuable upon such exercise shall be deemed to have become the
holder or holders of record of the Shares or Other Securities so purchased.
As soon as practicable after the exercise of any Warrant in full or in part,
and in any event within 10 days thereafter, the Company at its expense
(including the payment by it of any applicable issue taxes) will cause to be
issued in the name of, and delivered to the purchasing Warrant holder, a
certificate or certificates representing the number of fully paid and
nonassessable shares of Common Stock or Other Securities to which such
Warrant holder shall be entitled upon such exercise, plus in lieu of any
fractional share to which such Warrant holder would otherwise be entitled,
cash in an amount determined pursuant to Section 6(h), together with any
other stock or other securities and property (including cash, where
applicable). The term "Other Securities" refers to any stock (other than
Common Stock), other securities or assets (including cash) of the Company or
any other person (corporate or otherwise) which the holders of the Warrants
at any time shall be entitled to receive, or shall have received, upon the
exercise of the Warrants, in lieu of or in addition to Common Stock, or
which at any time shall be issuable or shall have been issued in exchange
for or in replacement of Common Stock or Other Securities pursuant to
Section 5 below or otherwise.
5. Adjustment of Purchase Price and Number of Shares Purchasable.
The Purchase Price and the number of Shares are subject to adjustment
from time to time as set forth in this Section 5.
(a) In case the Company shall at any time after the date of this
Agreement (i) declare a dividend on the Common Stock in shares of its
capital stock, (ii) subdivide the outstanding Shares, (iii) combine the
outstanding Common Stock into a smaller number of Common Stock, or (iv)
issue any shares of its capital stock by reclassification of the Common
Stock (including any such reclassification in connection with a
consolidation or merger in which the Company is the continuing corporation),
then in each case the Purchase Price, and the number and kind of Shares
receivable upon exercise, in effect at the time of the record date for such
dividend or of the effective date of such subdivision, combination, or
reclassification shall be proportionately adjusted so that the holder of any
Warrant exercised after such time shall be entitled to receive the aggregate
number and kind of Shares which, if such Warrant had been exercised
immediately prior to such time, he would have owned upon such exercise and
been entitled to receive by virtue of such dividend, subdivision,
combination, or reclassification. Such adjustment shall be made
successively whenever any event listed above shall occur.
(b) No adjustment in the Purchase Price shall be required if such
adjustment is less than $.05; provided, however, that any adjustments which
by reason of this subsection (h) are not required to be made shall be
carried forward and taken into account in any subsequent adjustment. All
calculations under this Section 5 shall be made to the nearest cent or to
the nearest one-thousandth of a share, as the case may be.
(c) Upon each adjustment of the Purchase Price as a result of the
calculations made in any of subsection (a) of this Section 5, each Warrant
outstanding prior to the making of the adjustment in the Purchase Price
shall thereafter evidence the right to purchase, at the adjusted Purchase
Price, that number of Shares (calculated to the nearest thousandth) obtained
by (i) multiplying the number of Shares purchasable upon exercise of a
Warrant immediately prior to adjustment of the number of Shares by the
Purchase Price in effect prior to adjustment of the Purchase Price and (ii)
dividing the product so obtained by the Purchase Price in effect immediately
after such adjustment of the Purchase Price.
(d) In case of any capital reorganization of the Company, or of any
reclassification of the Common Stock (other than a reclassification of the
Common Stock referred to in subsection (a) of this Section 5), or in the
case of the consolidation of the Company with or the merger of the Company
into any other corporation or of the sale, transfer, or lease of the
properties and assets of the Company as, or substantially as, an entirety to
any other corporation, each Warrant shall after such capital reorganization,
reclassification of the Common Stock, consolidation, merger, sale, transfer,
or lease be exercisable, upon the terms and conditions specified in this
Agreement, for the number of shares of stock or other securities, assets, or
cash to which a holder of the number of shares of Common Stock purchasable
(at the time of such capital reorganization, reclassification of shares,
consolidation, merger, sale, transfer, or lease) upon exercise of such
Warrant would have been entitled upon such capital reorganization,
reclassification of the Common Stock, consolidation, merger, sale, transfer,
or lease; and in any such case, if necessary, the provisions set forth in
this Section 5 with respect to the rights and interests thereafter of the
holders of the Warrants shall be appropriately adjusted so as to be
applicable, as nearly as may reasonably be, to any shares of stock or other
securities, assets, or cash thereafter deliverable upon the exercise of the
Warrants. The subdivision or combination of the Common Stock at any time
outstanding into a greater or lesser number of shares shall not be deemed to
be a reclassification of the Common Stock for the purposes of this
paragraph. The Company shall not effect any such consolidation, merger,
transfer, or lease, unless prior to or simultaneously with the consummation
thereof, the successor corporation (if other than the Company) resulting
from such consolidation or merger or the corporation purchasing, receiving,
or leasing such assets or other appropriate corporation or entity shall
assume, by written instrument executed and delivered to the Warrant holder,
the obligation to deliver to the Warrant holder such shares of stock,
securities, or assets as, in accordance with the foregoing provisions, such
holders may be entitled to purchase, and to perform the other obligations of
the Company under this Warrant Agreement.
6. Further Covenants of the Company.
(a) Dilution or Impairments. The Company will not, by amendment of
its certificate or articles of incorporation or through any reorganization,
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 of the Warrants or of this
Warrant Agreement, but will at all times in good faith assist in the
carrying out of all such terms and in the taking of all such action as may
be necessary or appropriate in order to protect the rights of the Warrant
holders against dilution or other impairment. Without limiting the
generality of the foregoing, the Company:
(i) shall at all times reserve and keep available, solely for
issuance and delivery upon the exercise of the Warrants, all shares of
Common Stock (or Other Securities) from time to time issuable upon the
exercise of the Warrants and shall take all necessary actions to ensure
that the par value per share, if any, of the Common Stock (or Other
Securities) is at all times equal to or less than the then effective
Purchase Price per share;
(ii) will take all such action as may be necessary or appropriate
in order that the Company may validly and legally issue fully paid and
nonassessable shares of Common Stock or Other Securities upon the
exercise of the Warrants from time to time outstanding;
(iii) will not issue any capital stock of any class which is
preferred as to dividends or as to the distribution of assets upon
voluntary or involuntary dissolution, liquidation or winding-up, unless
the rights of the holders thereof shall be limited to a fixed sum or
percentage of par value in respect of participation in dividends and in
any such distribution of assets; and
(iv) will not transfer all or substantially all of its properties
and assets to any person (corporate or otherwise), or consolidate with
or merge into any other person or permit any such person to consolidate
with or merge into the Company (if the Company is not the surviving
corporation), unless such other person shall expressly assume in writing
and will be bound by all the terms of this Warrant Agreement and the
Warrants.
(b) Title to Stock. All shares of Common Stock delivered upon the
exercise of the Warrants shall be validly issued, fully paid and
nonassessable; each Warrant holder shall, upon such delivery, receive good
and marketable title to the Shares, free and clear of all voting and other
trust arrangements, liens, encumbrances, equities and claims whatsoever; and
the Company shall have paid all taxes, if any, in respect of the issuance
thereof.
(c) Remedies. The Company stipulates that the remedies at law of the
Warrant holder or any holder of Shares 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 Agreement or the Warrants 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 in the
Warrants or by an injunction against a violation of any of the terms hereof
or thereof or otherwise.
(d) Exchange of Warrants. Subject to Section 2(a) hereof, upon
surrender for exchange of any Warrant to the Company, the Company at its
expense will promptly issue and deliver to or upon the order of the holder
thereof a new Warrant or like tenor, in the name of such holder or as such
holder (upon payment by such Warrant holder of any applicable transfer
taxes) may direct, calling in the aggregate for the purchase of the number
of shares of the Common Stock called for on the face or faces of the Warrant
or Warrants so surrendered. The Warrants and all rights thereunder are
transferable in whole or in part upon the books of the Company by the
registered holder thereof, subject to the provisions of Section 2(a), in
person or by duly authorized attorney, upon surrender of the Warrant, duly
endorsed, at the principal office of the Company.
(e) Replacement of Warrants. Upon receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of
any Warrant and, in the case of any such loss, theft or destruction, upon
delivery of an indemnity agreement reasonably satisfactory in form and
amount to the Company or, in the case of any such mutilation, upon surrender
and cancellation of such Warrant, the Company, at the expense of the Warrant
holder, will execute and deliver, in lieu thereof, a new Warrant of like
tenor.
(f) Reporting by the Company. The Company agrees that during the term
of the Warrants it will use its best efforts to keep current in the filing
of all forms and other materials, if any, which it may be required to file
with the appropriate regulatory authority pursuant to the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and all other forms
and reports required to be filed with any regulatory authority having
jurisdiction over the Company.
(g) Fractional Shares. No fractional Shares are to be issued upon the
exercise of any Warrant, but the Company shall pay a cash adjustment in
respect of any fraction of a share which would otherwise be issuable in an
amount equal to such fraction multiplied by the closing price which shall be
the last reported sales price regular way or, in case no such reported sales
takes place on such day, the average of the closing bid and asked prices
regular way, on the principal national securities exchange in the United
States on which the Common Stock is listed or admitted to trading, or if the
Common Stock is not listed or admitted to trading on any such national
securities exchange, the average of the highest reported bid and lowest
reported asked price as furnished by the National Association of Securities
Dealers, Inc. through its automated quotation system ("Nasdaq") or a similar
organization if Nasdaq is no longer reporting such information.
7. Other Warrant Holders: Holders of Shares.
The Warrants are issued upon the following terms, to all of which each
Warrant holder by the taking thereof consents and agrees: (a) any person who
shall become a transferee, within the limitations on transfer imposed by
Section 2(a) hereof, of a Warrant properly endorsed shall take such Warrant
subject to the provisions of Section 2(a) hereof and thereupon shall be
authorized to represent himself as absolute owner thereof and, subject to
the restrictions contained in this Warrant Agreement, shall be empowered to
transfer absolute title by endorsement and delivery thereof to a permitted
bona fide purchaser for value; (b) any person who shall become a holder or
owner of Shares shall take such shares subject to the provisions of Section
2(b) hereof; (c) each prior taker or owner waives and renounces all of his
equities or rights in such Warrant in favor of each such permitted bona fide
purchaser, and each such permitted bona fide purchaser shall acquire
absolute title thereto and to all rights presented thereby; and (d) until
such time as the respective Warrant is transferred on the books of the
Company, the Company may treat the registered holder thereof as the absolute
owner thereof for all purposes, notwithstanding any notice to the contrary.
8. Miscellaneous.
All notices, certificates and other communications from or at the
request of the Company to any Warrant holder shall be mailed by first class,
registered or certified mail, postage prepaid, to such address as may have
been furnished to the Company in writing by such Warrant holder, or, until
an address is so furnished, to the address of the last holder of such
Warrant who has so furnished an address to the Company, except as otherwise
provided herein. This Warrant Agreement and any of the terms hereof may be
changed, waived, discharged or terminated only by an instrument in writing
signed by the party against which enforcement of such change, waiver,
discharge or termination is sought. This Warrant Agreement shall be
construed and enforced in accordance with and governed by the laws of the
State of Texas. The headings in this Warrant Agreement are for purposes of
reference only and shall not limit or otherwise affect any of the terms
hereof. This Warrant Agreement, together with the forms of instruments
annexed hereto as exhibits, constitutes the full and complete agreement of
the parties hereto with respect to the subject matter hereof.
IN WITNESS WHEREOF, the Company has caused this Warrant Agreement to be
executed on this the ______ day of ______, 2002, in Shreveport, Louisiana,
by its proper corporate officers, thereunto duly authorized.
MAC FILMWORKS, INC.
By________________________________________
▇▇▇ ▇▇▇▇▇▇▇▇▇▇, SR.
Chief Executive Officer
The above Warrant Agreement is confirmed
as of this ____ day of _______, 2002.
____________________________________
By:_________________________________
Printed Name: ________________________
Title:________________________________
Exhibit A
[FORM OF FACE OF CLASS ____ WARRANT CERTIFICATE]
Class ___ Warrant No. ____ To Purchase
____________ Shares of
Common Stock
CLASS _____ WARRANT CERTIFICATE
FOR PURCHASE OF COMMON STOCK
MAC FILMWORKS, INC.
Incorporated Under the Laws of Delaware
This certifies that, for value received, the hereafter named registered
owner is entitled, subject to the terms and conditions of this Warrant,
until the expiration date, to purchase the number of shares set forth above
of the common stock (the "Common Stock"), of Mac Filmworks, Inc. (the
"Corporation") from the Corporation at the purchase price per share
hereafter set forth, on delivery of this Warrant to the Corporation with the
exercise form duly executed and payment of the purchase price (in cash or by
certified or bank cashier's check payable to the order of the Corporation)
for each share purchased. This Warrant is subject to the terms of the
Warrant Agreement between the parties thereto dated as of ___________, 2002,
the terms of which are hereby incorporated herein. Reference is hereby made
to such Warrant Agreement for a further statement of the rights of the
holder of this Warrant.
Registered Owner: _______________________ Date: ____________, 2002
_______________________
Purchase Price
Per Share: $_______
Expiration Date: Subject to Section 3(a) of the Warrant Agreement,
________, 2002.
WITNESS the signature of the Corporation's authorized officer:
MAC FILMWORKS, INC.
By________________________________
▇▇▇ ▇▇▇▇▇▇▇▇▇▇, SR.
Chief Executive Officer
[FORM OF REVERSE OF CLASS A WARRANT CERTIFICATE]
FORM OF SUBSCRIPTION
(To be signed only upon exercise of Warrant)
To Mac Filmworks, Inc.:
The undersigned, the holder of the enclosed Warrant, hereby irrevocably
elects to exercise the purchase right represented by such Warrant for, and
to purchase thereunder, _________* shares of Common Stock of Mac Filmworks,
Inc. and herewith makes payment of $_______________ therefor, and requests
that the certificate or certificates for such shares be issued in the name
of and delivered to the undersigned.
Dated:______________
____________________________________________
(Signature must conform in all respects to
name of holder as specified on the face of
the enclosed Warrant)
____________________________________________
(Address)
___________________________
(*) Insert here the number of shares called for on the face of the Warrant
or, in the case of a partial exercise, the portion thereof as to which the
Warrant is being exercised, in either case without making any adjustment for
additional Common Stock or any other stock or other securities or property
or cash which, pursuant to the adjustment provisions of the Warrant
Agreement pursuant to which the Warrant was granted, may be delivered upon
exercise.
ASSIGNMENT
For value received, the undersigned hereby sells, assigns and transfers unto
Name:
Address:
City/State:
SSN:
the right represented by the enclosed Warrant to purchase _________________
shares of Common Stock of Mac Filmworks, Inc. to which the enclosed Warrant
relates, and appoints _____________________ Attorney to transfer such right
on the books of Mac Filmworks, Inc. with full power of substitution in the
premises.
The undersigned represents and warrants that the transfer of the
enclosed Warrant is permitted by the terms of the Warrant Agreement pursuant
to which the enclosed Warrant has been issued, and the transferee hereof, by
his acceptance of this Agreement, represents and warrants that he is
familiar with the terms of said Warrant Agreement and agrees to be bound by
the terms thereof with the same force and effect as if a signatory thereto.
Dated:____________________ ______________________________________
(Signature must conform in all respects to
name of holder as specified on the face of
the enclosed Warrant)
Signed in the presence of:
____________________________________