EXHIBIT 4.2
October 25,
2005
COMMON STOCK PURCHASE WARRANT
AGREEMENT
This COMMON STOCK PURCHASE WARRANT
AGREEMENT (this “Warrant Agreement” or
“Agreement”), dated as of October 25, 2005,
is between GrayMark Productions, Inc. (the
“Company”) and
(the
“Warrant Holder” and with the Company sometimes
referred to as “parties” collectively and as
“party” individually.
W I T N E S S E T
H:
WHEREAS, this Warrant Agreement is
executed by the Company pursuant to the Convertible Loan Note on
the date of this Agreement (the “Convertible Note”) and
delivered with Convertible Note to the Warrant Holder;
NOW, THEREFORE, in consideration of
the premises and other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties
hereto agree as follows:
1.
Grant and Period
. The above recitals are true
and correct. This Agreement is executed and delivered
pursuant to the Convertible Note issued by the Company.
Pursuant to this Agreement, the Warrant Holder is hereby granted
the right to purchase from the Company, at any time during the
period commencing on the date of this Agreement and ending on
October 25, 2010 (the “Expiration Time”), 250,000
shares of the Company’s common stock, $.0001 par value (the
“Shares” or “Warrant Securities”)) at an
initial exercise price (subject to adjustment as provided in
Article 8 hereof) of $2.00 per share (the “Exercise
Price” or “Purchase Price”), subject to the terms
and conditions of this Agreement (the
“Warrant”).
Except as specifically otherwise
provided herein, the Shares shall have the same terms and
conditions as such securities are outstanding and as designated in
the Company’s Certificate of Incorporation and any amendments
thereto, and the Warrant Holder shall have registration rights
under the Securities Act of 1933, as amended, covering the Warrant
Securities, as more fully described in Section 7 of this
Agreement.
2.
Warrant Certificate
. The Warrant Holder’s
rights pursuant to this Agreement shall only be evidenced by this
Agreement and will not be certificated.
3.
Exercise of Warrant
.
3.1
Exercise . The Warrant Holder may effect a cash
exercise of the Warrant by surrendering to the Company this
Agreement, together with a Subscription in the form of
Exhibit ”A” attached to this Agreement, duly
executed by the Warrant Holder, at any time prior to the Expiration
Time, at the Company’s principal office, accompanied by
payment in cash or by certified or official bank check payable to
the order of the Company in the amount of the aggregate purchase
price (the “Aggregate Price”), subject to any
adjustments provided for in this Agreement. The Aggregate
Price shall be equal to the exercise price as set forth in
Section 6 of this Agreement multiplied by the number of
Warrant Securities for which the Warrant shall be exercised (as
adjusted as provided in this Agreement).
3.2
Partial Exercise
. In the event the Warrant
shall be exercised in part and not in whole, the Company, at its
expense, will forthwith issue to the Warrant Holder a new warrant
agreement of like tenor exercisable for the number of Warrant
Securities (as constituted as of the date hereof) for which this
Warrant Agreement shall not have been exercised, issued in the name
of the Warrant Holder or as the Warrant Holder (upon payment by the
Warrant Holder of any applicable transfer taxes) may
direct.
4.
Issuance of Certificates
Evidencing the Warrant Securities . Upon the exercise of the Warrants, the
issuance of certificates for the Warrant Securities shall be made
as soon as reasonably practicable thereafter without charge to the
Warrant Holder including, without limitation, any tax which may be
payable in respect of the issuance thereof, and such certificates
shall (subject to the provisions of Sections 5 and 7 of this
Agreement) be issued in the name of, or in such names as may be
directed by, the Holder thereof; provided, however, that the
Company shall not be required to pay any tax that may be payable in
respect of any transfer involved in the issuance and delivery of
any
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such certificates in a name other
than that of the Warrant Holder, and the Company shall not be
required to issue or deliver such certificates unless or 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.
The Warrant Certificates and the
certificates representing the Warrant Securities shall be executed
on behalf of the Company by the manual or facsimile signature of
the then present Chairman or Vice Chairman of the Board of
Directors or Chief Executive Officer, President or Vice President
of the Company, attested to by the manual or facsimile signature of
the then present Secretary or Assistant Secretary of the
Company. Warrant Certificates shall be dated the date of
execution by the Company upon initial issuance, division, exchange,
substitution or transfer.
5.
Restriction On Transfer of
Warrants . This
Warrant Agreement may be assigned or transferred, in whole or in
part, as provided herein so long as such assignment or transfer is
in accordance with and subject to the provisions of the Securities
Act of 1933, as amended, and the rules and regulations
promulgated thereunder (said Act and such rules and
Regulations being hereinafter collectively referred to as the
“Securities Act”). Any purported transfer or
assignment made other than in accordance with this Section 5
shall be null and void and of no force and effect. Any
assignment permitted under this Agreement shall be made by
surrender of this Agreement to the Company with the Assignment
Form attached to this Agreement as
Exhibit ”C” duly executed and funds sufficient to
pay any transfer tax. In such event the Company shall,
without charge, execute and deliver a new warrant agreement in the
name of the assignee named in the Assignment Form and
designate the assignee as the warrant holder under the new warrant
agreement and this Agreement shall promptly be canceled. This
Agreement may be divided or combined with other warrant agreement
that carry the same rights by presentation of this Agreement to the
Company together with the Assignment Form signed by the
Warrant Holder, specifying the names and denominations in which the
new warrant agreements are to be issued.
6.
Exercise Price
.
6.1
Initial and Adjusted Exercise
Prices . The
initial exercise price of each Common Stock Warrant shall be $2.00
per Share. The adjusted exercise price shall be the price
which shall result from time to time from any and all adjustments
of the initial exercise price in accordance with the provisions of
Section 8 of this Agreement. The term “Exercise
Price” herein shall mean the initial exercise price or the
adjusted exercise price, depending upon the context.
7.
Registration Rights
.
7.1
Registration Under the Securities
Act of 1933 .
The Warrant and the Warrant
Securities have not been registered under the Securities Act.
Upon exercise, in part or in whole, of the Warrant, certificates
representing the Warrant Securities shall bear the following legend
in the event there is no current registration statement effective
with the U. S. Securities and Exchange Commission (the
“Commission”) at such time as to such
securities:
The securities represented by this
certificate may not be offered or sold except pursuant to
(i) an effective registration statement under the Act,
(ii) to the extent applicable, Rule 144 under the Act (or
any similar rule under such Act relating to the disposition of
securities), or (iii) an opinion of counsel, if such opinion
shall be reasonably satisfactory to counsel to the issuer, that an
exemption from registration under such Act and applicable state
securities laws is available.
7.2
Piggyback Registration
.
If, at any time commencing after
October 25, 2005 and expiring October 25, 2010, the
Company prepares and files an amendment to a registration
statement, or a new registration statement under the Act, or files
a Notification on Form 1-A or otherwise registers securities
under the Act, or files a similar disclosure document with the
Commission (collectively the “Registration Documents”)
as to any of its securities under the Securities Act
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(other than under a Registration
Statement pursuant to Form S-8 or Form S-4), the Company
will give written notice by registered mail, at least thirty (30)
days prior to the filing of each such Registration Document, to the
Warrant Holder and holders of the Warrant Securities of the
Company’s intention to do so. If the Warrant Holder or
any holder of the Warrant Securities notifies the Company within 20
days after receipt of any such notice of its desire to include any
Warrant Securities in such proposed Registration Documents, the
Company shall afford the Warrant Holder or holder of the Warrant
Securities the opportunity to have any Warrant Securities
registered under such Registration Documents or any other available
Registration Document.
Notwithstanding the provisions of
this Section 7.2, the Company shall have the right at any time
after it shall have given written notice pursuant to this
Section 7.2 (irrespective of whether a written request for
inclusion of any such securities shall have been made) to elect not
to file any such proposed amendment or registration statement, or
to withdraw the same after the filing but prior to the effective
date of the Registration Document.
7.3
Demand Registration
. Omitted.
7.4
Covenants of the Company With
Respect to Registration . In connection with the filing of any
Registration Document by the Company, the Company covenants and
agrees as follows:
(a)
The Company shall use its best
efforts to file the Registration Document on the date indicated in
the notice delivered to the Warrant Holder and the holders of the
Warrant Securities pursuant to Section 7.2 or as soon as
reasonably practicable thereafter and shall use its best efforts to
have any such Registration Document declared effective at the
earliest practicable time. The Company will promptly notify
each of the Warrant Holder and holder of Warrant Securities
electing to include Warrant Securities in the Registration Document
(collectively the “Selling Securities Holders”) and
confirm in writing, (i) when such Registration Document
becomes effective, (ii) when any post-effective amendment to
such Registration Document becomes effective and (iii) of any
request by the SEC for any amendment or supplement to such
Registration Document or any prospectus relating thereto or for
additional information.
The Company shall furnish to each
Selling Securities Holder such number of copies of such
Registration Document (or prospectus contained therein) and of each
such amendment and supplement thereto (in each case including each
preliminary prospectus and summary prospectus) in conformity with
the requirements of the Securities Act, and such other documents as
the Selling Securities Holders may reasonably request in order to
facilitate the disposition of the Warrant Securities included in
the Registration Document.
(b)
The Company shall pay all costs
(excluding transfer taxes, if any, and fees and expenses of
Holder(s)’ counsel and the Holder’s
pro-rata portion of the selling discount or commissions), fees and
expenses in connection with all Registration Documents filed
pursuant to Sections 7.2 hereof including, without limitation, the
Company’s legal and accounting fees, printing expenses, blue
sky fees and expenses. If the Company shall fail to comply
with the provisions of Section 7.4(a), the Company shall, in
addition to any other equitable or other relief available to the
Selling Securities Holders, be liable for any or all special and
consequential damages sustained by the Selling Securities
Holders.
(c)
The Company shall prepare and file
with the SEC such amendments and supplements to such Registration
Document and the prospectus used in connection therewith as may be
reasonably necessary to keep such Registration Document effective
for at least nine months (or such longer period as permitted by the
Act), and to comply with the provisions of the Act with respect to
the disposition of all securities covered by such Registration
Document during such period in accordance with the intended methods
of disposition by the Selling Securities Holders of the Warrant
Securities set forth in such Registration Document. If at any
time the SEC should institute or threaten to institute any
proceedings for the purpose of issuing a stop order suspending the
effectiveness of any such Registration Document, the Company shall
promptly notify each Selling Securities Holder and will use all
reasonable efforts to prevent the issuance of any such stop order
or to obtain the withdrawal thereof as soon as possible. The
Company will use its good faith reasonable efforts and take all
reasonably necessary action which may be required in qualifying or
registering the Warrant Securities included in the Registration
Document for offering and sale under the securities or blue sky
laws of such states as reasonably are required by the Selling
Securities Holders; provided that the Company shall not be
obligated to execute or file any general consent to
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service of process or to qualify as
a foreign corporation to do business under the laws of any such
jurisdiction, nor shall the officers, directors and five percent
(5%) or greater shareholder be required to deposit in escrow and
securities of the Company owned by them or subject such securities
to any form of lockup arrangement in connection with such
registration. The Company shall use its good faith reasonable
efforts to cause the Warrant Securities covered by such
Registration Document to be registered with or approved by such
other governmental
