Exhibit 4.2
NEITHER THIS WARRANT NOR THE SECURITIES ISSUABLE UPON EXERCISE HEREOF
HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"1933 ACT") OR ANY STATE SECURITIES LAWS. THEY MAY NOT BE SOLD OR
OFFERED FOR SALE EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT AS TO THE SECURITIES UNDER SAID ACT AND ANY APPLICABLE STATE
SECURITIES LAWS OR AN APPLICABLE EXEMPTION FROM SUCH REGISTRATION
REQUIREMENTS.
Right to Purchase Shares of Common Stock of The Panda Project, Inc.
_______________________________________
Common Stock Purchase Warrant
The Panda Project, Inc., a Florida corporation having an
address at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ (the "Company"),
hereby certifies that for good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, ---------
having an address at ------------- ("Purchaser"), or any other Warrant
Holder is entitled, on the terms and conditions set forth below, to
purchase from the Company at any time after the date hereof (subject
to the provisions of Section 2 hereof) and ending on the date which is
sixty (60) months after the date hereof (the "Exercise Period") up to
---------- fully paid and nonassessable shares of Common Stock, par
value $0.01, of the Company (the "Common Stock") at the Purchase Price
(hereinafter defined), as the same may be adjusted pursuant to Section
5 herein.
This Warrant is one of the warrants (collectively, including
any warrants issued upon the exercise or transfer of any such warrants
in whole or in part, the "Warrants") issued pursuant to the
Subscription Agreement (the "Agreement") by and among the Company and
the purchasers (the "Subscribers") of the original issue of the
Warrants, pursuant to which the Company has agreed to issue and sell
its Series A Convertible Preferred Stock (the "Preferred Shares") and,
in connection with such sale, such Subscribers shall receive warrants
to purchase shares of Common Stock. As used herein the term "this
Warrant" shall mean and include this Warrant and any Warrant or
Warrants hereafter issued as a consequence of the exercise or transfer
of this Warrant in whole or in part.
1. DEFINITIONS.
(a) the term "Warrant Holder" shall mean the Purchaser or
any assignee of all or any portion of this Warrant at any
given time who, at the time of assignment, acquired the
right to purchase at least 1000 Warrant Shares (such number
being subject to adjustment after the date hereof pursuant
to Section 5 hereof).
(b) the term "Warrant Shares" shall mean the shares of
Common Stock or other securities issuable upon exercise of
this Warrant.
(c) the term "Purchase Price" shall mean 115% of the
average of the closing bid price per share of Common Stock
for the five (5) trading days immediately preceding the
applicable issuance date of this Warrant.
(d) other terms used herein which are defined in the
Agreement or the Registration Rights Agreement, dated as of
February __, 1998 (the "Registration Rights Agreement"),
shall have the same meanings herein as therein.
2. EXERCISE OF WARRANT.
This Warrant may be exercised by Warrant Holder, in whole or
in part, at any time and from time to time during the Exercise Period,
by surrender of this Warrant, together with the Purchase Price (as
defined in Section 1) for each share of Common Stock as to which the
Warrant is exercised, and the form of warrant exercise attached hereto
as Exhibit A duly executed by Warrant Holder, to the Company at its
principal office. In the event that this Warrant is not exercised in
full, the number of Warrant Shares shall be reduced by the number of
such Warrant Shares for which this Warrant is exercised, and the
Company, at its expense, shall 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 or as the Warrant Holder (upon payment by
the Warrant Holder of any applicable transfer taxes) may request,
reflecting such adjusted Warrant Shares.
3. DELIVERY OF STOCK CERTIFICATES.
(a) Subject to the terms and conditions of this Warrant,
as soon as practicable after the exercise of this Warrant in
full or in part, and in any event within three (3) trading
days thereafter, the Company at its expense (including,
without limitation, the payment by it of any applicable
issue taxes) will cause to be issued in the name of and
delivered to the Warrant Holder, or as the Warrant Holder
(upon payment by the Warrant Holder of any applicable
transfer taxes) may lawfully direct, a certificate or
certificates (registered in the name of the Warrant Holder
or its designee) for the number of fully paid and non-
assessable shares of Common Stock to which the Warrant
Holder shall be entitled on such exercise, together with any
other stock or other securities or property (including cash,
where applicable) to which the Warrant Holder is entitled
upon such exercise.
(b) This Warrant may not be exercised as to fractional
shares of Common Stock. In the event that the exercise of
this Warrant, in full or in part, would result in the
issuance of any fractional share of Common Stock, then in
such event the Warrant Holder shall be entitled to cash
equal to the Fair Market Value of such fractional share.
For purposes of this Warrant, Fair Market Value equals the
closing sale price of the Common Stock on the Principal
Market on the date of determination or, if the Common Stock
is not listed or admitted to trading on any national
securities exchange or quoted in the Nasdaq National Market,
the average of the closing bid and asked prices on the over-
the-counter market as furnished by any New York Stock
Exchange member firm that makes a market in the Common Stock
reasonably selected from time to time by the Company for
that purpose, or, if the Common Stock is not listed or
admitted to trading on any national securities exchange or
quoted on the Nasdaq National Market or traded over-the-
counter and the average price cannot be determined as
contemplated above, the Fair Market Value of the Common
Stock shall be as reasonably determined in good faith by the
Company's Board of Directors.
(c) Notwithstanding any provision of this Section 3, as
of any date prior to the date of exercise of this Warrant,
or any portion thereof, the aggregate number of shares of
Common Stock into which this Warrant, all other warrants and
all other securities convertible into or exchangeable for
Common Stock held by the Warrant Holder and its affiliates
shall be convertible or exchangeable, together with the
shares of Common Stock then beneficially owned (as such term
is defined in the 1934 Act) by such Warrant Holder and its
affiliates, shall not exceed 4.9% of the total outstanding
shares of Common Stock as of such date. This Warrant shall
not be exercisable on any date to the extent that such
exercise would limit the ability of the Investor to purchase
shares of Common Stock as a result of a Put Share Notice (as
such terms are defined in the Agreement) pursuant to Section
1(c) of the Agreement.
4. COVENANTS OF THE COMPANY.
(a) The Company shall use its reasonable best efforts to
insure that a Registration Statement under the Securities
Act covering the resale or other disposition thereof of the
Warrant Shares by the Warrant Holder is effective to the
extent provided in the Registration Rights Agreement.
(b) The Company shall take all necessary actions and
proceedings as may be required and permitted by applicable
law, rule and regulation, including, without limitation, the
notification and approval of the Principal Market, for the
legal and valid issuance of this Warrant and the Warrant
Shares to the Warrant Holder under this Warrant.
(c) During the Exercise Period, the Company shall take
all steps reasonably necessary and within its control to
insure that the Common Stock remains listed on the Principal
Market and shall not amend its Articles of Incorporation or
By-laws so as to constitute a breach of the Company's
obligations hereunder or so as to adversely affect any
rights of the Warrant Holder under this Warrant.
(d) The Company shall at all times reserve and keep
available out of its authorized and unissued Common Stock,
solely for issuance and delivery as Warrant Shares
hereunder, such shares of Common Stock as shall from time to
time be issuable as Warrant Shares.
(e) The Warrant Shares, when issued in accordance with
the terms hereof, will be duly authorized and, when paid for
or issued in accordance with the terms hereof, shall be
validly issued, fully paid, non-assessable and free of
preemptive rights. The Company has authorized and reserved
for issuance to the Warrant Holder the requisite number of
shares of Common Stock to be issued pursuant to this
Warrant.
(f) With a view to making available to the Warrant Holder
the benefits of Rule 144 promulgated under the 1933 Act, any
other rule or regulation of the SEC that may at any time
permit the Warrant Holder to sell securities of the Company
to the public without registration, the Company agrees to
use its reasonable best efforts to:
(i) make and keep public information available, as
those terms are understood and defined in Rule 144, at
all times;
(ii) file with the SEC in a timely manner all
reports and other documents required of the Company
under the 1933 Act and 1934 Act; and
(iii) furnish to any Warrant Holder forthwith upon
request a written statement by the Company that it has
complied with the reporting requirements of Rule 144
and of the 1934 Act, a copy of the most recent annual
or quarterly report of the Company, and such other
reports and documents so filed by the Company as may be
reasonably requested to permit any such Warrant Holder
to take advantage of any rule or regulation of the SEC
permitting the selling of any such securities without
registration.
5. ADJUSTMENT OF PURCHASE PRICE AND NUMBER OF SHARES.
The number of, and kind of, securities purchasable upon
exercise of this Warrant and the Purchase Price shall be subject to
adjustment from time to time as follows:
(a) SUBDIVISIONS, COMBINATIONS AND OTHER ISSUANCES.
If the Company shall at any time during the Exercise
Period subdivide its outstanding securities as to which
purchase rights under this Warrant exist, by split-up,
spin-off or otherwise, or combine its outstanding
securities as to which purchase rights under this Warrant
exist, the number of Warrant Shares as to which this
Warrant is exercisable as of the date of such subdivision,
split-up, spin-off or combination shall forthwith be
proportionately increased in the case of a subdivision, or
proportionately decreased in the case of a combination.
Appropriate adjustments shall also be made to the Purchase
Price payable per share, but the aggregate purchase price
payable for the total number of Warrant Shares purchasable
under this Warrant as of such date shall remain the same.
Such adjustments shall be made successively whenever any
event listed above shall occur.
(b) STOCK DIVIDEND. If at any time during the Exercise
Period the Company declares a dividend or other
distribution on Common Stock payable in Common Stock or
other securities or rights convertible into Common Stock
("Common Stock Equivalents") without payment of any
consideration by holders of Common Stock for the additional
shares of Common Stock or the Common Stock Equivalents
(including the additional shares of Common Stock issuable
upon exercise or conversion thereof), then the number of
shares of Common Stock for which this Warrant may be
exercised shall be increased as of the record date (or the
date of such dividend distribution if no record date is
set) for determining which holders of Common Stock shall be
entitled to receive such dividends, 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, and the Purchase Price per
share shall be adjusted so that the aggregate amount
payable for the purchase of all the Warrant Shares issuable
hereunder immediately after the record date (or on the date
of such distribution, if applicable), for such dividend
shall equal the aggregate amount so payable immediately
before such record date (or on the date of such
distribution, if applicable).
(c) OTHER DISTRIBUTIONS. If at any time during the
Exercise Period the Company distributes to holders of its
Common Stock, other than as part of its dissolution,
liquidation or the winding up of its affairs, any shares of
its capital stock, any evidence of indebtedness or any of
its assets (other than cash, Common Stock or securities
convertible into or exchangeable for Common Stock), then
the Company shall decrease the per share Purchase Price of
this Warrant by an appropriate amount based upon the value
distributed on each share of Common Stock as determined in
good faith by the Company's Board of Directors.
(d) MERGER, ETC. If at any time during the Exercise
Period there shall be a merger or consolidation of the
Company with or into, or a transfer of all or substantially
all of the assets of the Company to, another entity, then
the Warrant Holder shall be entitled to receive upon
payment of the aggregate Purchase Price then in effect, the
number of shares or other securities or property of the
Company or of the successor corporation resulting from such
merger or consolidation which would have been received by
Warrant Holder for the shares of stock subject to this
Warrant had this Warrant been exercised immediately prior
to such transfer, merger or consolidation becoming
effective or to the applicable record date thereof, as the
case may be. The provisions of this Section 5(d) shall
similarly apply to successive mergers or consolidations.
(e) RECLASSIFICATION, ETC. If at any time during the
Exercise Period there shall be a reorganization or
reclassification of the securities as to which purchase
rights under this Warrant exist into the same or a
different number of securities of any other class or
classes, then the Warrant Holder shall thereafter be
entitled to receive upon exercise of this Warrant, during
the period specified herein and upon payment of the
Purchase Price then in effect, the number of shares or
other securities or property resulting from such
reorganization or reclassification which would have been
received by the Warrant Holder for the shares of stock
subject to this Warrant had this Warrant at such time been
exercised. The provisions of this Section 5(e) shall
similarly apply to successive reorganizations and
reclassifications.
(f) ADJUSTMENTS: ADDITIONAL SHARES, SECURITIES OR
ASSETS. In the event that at any time, as a result of an
adjustment made pursuant to this Section 5, the Warrant
Holder shall, upon exercise of this Warrant, become
entitled to receive shares and/or other securities (other
than Common Stock) then, wherever appropriate, all
references herein to shares of Common Stock shall be deemed
to refer to and include such shares and/or other securities
or assets; and thereafter the number of such shares and/or
other securities or assets shall be subject to adjustment
from time to time in a manner and upon terms as nearly
equivalent as practicable to the provisions of this Section
5.
6. NO IMPAIRMENT.
The Company will not, by amendment of its 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 this Warrant, 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 Holder against impairment.
Without limiting the generality of the foregoing, the Company (a) will
not increase the par value of any Warrant Share above the amount
payable therefor on such exercise, and (b) will take all such action
as may be reasonably necessary or appropriate in order that the
Company may validly and legally issue fully paid and nonassessable
Warrant Shares on the exercise of this Warrant. By acceptance hereof,
the Warrant Holder acknowledges and agrees that the transactions
specified in Section 2(i) and (ii) hereof shall not constitute an
impairment of the rights of the Warrant Holder hereunder.
7. NOTICE OF ADJUSTMENTS.
Whenever the Purchase Price or number of Warrant Shares
purchasable hereunder shall be adjusted pursuant to Section 5 hereof,
the Company shall execute and deliver to the Warrant Holder a
certificate setting forth, in reasonable detail, the event requiring
the adjustment, the amount of the adjustment, the method by which such
adjustment was calculated and the Purchase Price and number of shares
purchasable hereunder after giving effect to such adjustment, and
shall cause a copy of such certificate to be mailed (by first class
mail, postage prepaid) to the Warrant Holder.
8. RIGHTS AS STOCKHOLDER.
Prior to exercise of this Warrant, the Warrant Holder shall
not be entitled to any rights as a stockholder of the Company with
respect to the Warrant Shares, including (without limitation) the
right to vote such shares, receive dividends or other distributions
thereon or be notified of stockholder meetings. However, in the event
of any taking by the Company of a record of the holders of any class
of securities for the purpose of determining the holders thereof who
are entitled to receive any dividend (other than a cash dividend) or
other distribution, any right to subscribe for, purchase or otherwise
acquire any shares of stock of any class or any other securities or
property, or to receive any other right, the Company shall mail to
each Warrant Holder, at least ten (10) days prior to the date
specified therein, a notice specifying the date on which any such
record is to be taken for the purpose of such dividend, distribution
or right, the date on which such dividend, distribution or right shall
become effective and the amount and character of such dividend,
distribution or right.
9. REPLACEMENT OF WARRANT.
Upon receipt of evidence reasonably satisfactory to the
Company of the loss, theft, destruction or mutilation of this Warrant
and, in the case of any such loss, theft or destruction of this
Warrant, on delivery of an indemnity agreement or security reasonably
satisfactory in form and amount to the Company or, in the case of any
such mutilation, on surrender and cancellation of such Warrant, the
Company at its expense will execute and deliver, in lieu thereof, a
new Warrant of like tenor to the registered owner in lieu of the
Warrant so lost, stolen, destroyed or mutilated.
10. TAXES.
The issuance of any shares of Common Stock or other
securities upon the exercise of this Warrant, and the delivery of
certificates or other securities, shall be made without charge to the
Warrant Holder for any tax or other charge in respect of such
issuance.
11. SPECIFIC ENFORCEMENT; CONSENT TO JURISDICTION; WAIVER
OF JURY TRIAL.
(a) The Company and the Warrant Holder acknowledge and
agree that irreparable damage would occur in the event that
any of the provisions of this Warrant were not performed in
accordance with their specific terms or were otherwise
breached. It is accordingly agreed that the parties shall
be entitled to an injunction or injunctions to prevent or
cure breaches of the provisions of this Warrant and to
enforce specifically the terms and provisions hereof, this
being in addition to any other remedy to which either of
them may be entitled by law or equity.
(b) Each of the Company and the Warrant Holder hereby (i)
agree that all actions or proceedings arising directly or
indirectly from or in connection with this Warrant shall be
litigated only in the Supreme Court of the Sate of New York
or the United States District Court for the Southern
District of New York located in New York County, New York
and (ii) to the extent permitted by applicable law, consent
to the jurisdiction and venue of the foregoing courts and
consent that any process or notice of motion or other
application to either of said courts or a judge thereof may
be served inside or outside the State of New York or the
Southern District of New York by registered mail, return
receipt requested, directed to the such party at its
address, set forth in this Warrant (and service so made
shall be deemed complete five (5) days after the same has
been posted as aforesaid) or by personal service or in such
other manner as may be permissible under the rules of said
courts. The parties hereby waive any right to a jury trial
in connection with any litigation pursuant to this Warrant.
12. ENTIRE AGREEMENT; AMENDMENTS.
This Warrant, the Exhibits hereto and the provisions
contained in the Agreement or the Registration Rights Agreement and
incorporated into this Warrant and the Warrant Shares contain the
entire understanding of the parties with respect to the matters
covered hereby and thereby except as specifically set forth herein and
therein. This Warrant and any term 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.
12. RESTRICTED SECURITIES.
Section 5 of the Agreement is incorporated herein by
reference and hereby made a part hereof, to the extent relating to the
Warrant Shares.
13. NOTICES.
Any notice or other communication required or permitted to
be given hereunder shall be in writing and shall be effective (a) upon
hand delivery or delivery by telex (with correction answer back
received), telecopy or facsimile at the address or number designated
below (if delivered on a business day during normal business hours
where such notice is to be received), or the first business day
following such delivery (if delivered other than on a business day
during normal business hours where such notice is to be received) or
(b) on the second business day following the date of mailing by
express courier service, fully prepaid, addressed to such address, or
upon actual receipt of such mailing, whichever shall first occur. The
addresses for such communications shall be:
If to the Company:
The Panda Project, Inc.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
With a copy to:
▇▇▇▇ and ▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
to the Warrant Holder:
___________________
___________________
___________________
___________________
with copies to:
___________________
___________________
___________________
___________________
Each of the Company and the Warrant Holder may from time to time
change its address for notices under this Section 13 by giving at
least 10 days' prior written notice of such changed address to the
other.
14. MISCELLANEOUS.
This Warrant shall be construed and enforced in accordance
with and governed by the laws of the State of New York without
reference to principles of conflict of laws. The headings in this
Warrant are for purposes of reference only, and shall not limit or
otherwise affect any of the terms hereof. The invalidity or
unenforceability of any provision hereof shall in no way affect the
validity or enforceability of any other provisions.
15. EXPIRATION.
The right to exercise this Warrant shall expire sixty (60)
months after the date of original issuance.
Dated: February __, 1998
THE PANDA PROJECT, INC.
By:___________________________
Title:
(CORPORATE SEAL)
Attest:
By:_______________________
Title:
EXHIBIT A
FORM OF WARRANT EXERCISE
TO:_______________
The undersigned, the holder of the within Warrant, hereby
irrevocably elects to exercise this Warrant for, and to purchase
thereunder, ______________ shares of Common Stock of The Panda
Project, Inc., a Florida corporation (the "Company"), and herewith
makes payment of $___________ therefor, and requests that the
certificates for such shares be issued in the name of, and delivered
to ______________________________________, whose address is
__________________________________________________.
Dated:
____________________________
(Signature must conform to
name of holder as specified on
the face of the Warrant)
______________________________
(Address)
EXHIBIT B
FORM OF ASSIGNMENT
--------------------
(To be signed only on transfer of Warrant)
For value received, the undersigned hereby sells, assigns
and transfers unto ____________________________ the right represented
by the within Warrant to purchase __________ shares of Common Stock of
The Panda Project, Inc., a Florida corporation (the "Company"), to
which the within Warrant relates, and appoints __________________,
Attorney, to transfer such right on the books of the Company, with
full power of substitution the premises.
Dated:
______________________________
(Signature must conform to name
of holder as specified on the
face of the Warrant)
______________________________
(Address)
Signed in the presence of:
_________________________
