Exhibit 4.2(a)
NEITHER THIS WARRANT NOR ANY OF THE
SECURITIES ISSUABLE UPON EXERCISE HEREOF HAVE BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE “1933
ACT”), OR THE SECURITIES LAWS OF ANY STATE, AND MAY NOT BE
SOLD, TRANSFERRED, ASSIGNED OR HYPOTHECATED UNLESS PURSUANT TO SEC
RULE 144 OR UNLESS THERE IS AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE 1933 ACT AND THE SECURITIES LAWS OF THE APPLICABLE STATES
COVERING SUCH SECURITIES OR THE COMPANY RECEIVES AN OPINION OF
COUNSEL FOR THE HOLDER OF THE SECURITIES REASONABLY SATISFACTORY TO
THE COMPANY, STATING THAT SUCH SALE, TRANSFER, ASSIGNMENT OR
HYPOTHECATION IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS
DELIVERY REQUIREMENTS OF THE 1933 ACT AND THE SECURITIES LAWS OF
THE STATES.
WARRANT NO.
, [DATE]
COMMON STOCK PURCHASE
WARRANT
Tully’s Coffee Corporation, a
Washington corporation (the “Company”), hereby grants
to
or their registered assigns or transferees (each being referred to
herein as a “holder” and collectively as the
“holders”) the right to purchase, at any time and from
time to time on and after the date hereof until the Expiration Date
(as defined below), up to
fully paid and non-assessable shares of Common Stock of the Company
(the “Common Stock”) , on the terms and subject to the
conditions set forth below
1. EXERCISE, VESTING AND EXPIRATION
OF WARRANT.
1.1 EXERCISE. Subject to adjustment
as hereinafter provided, the rights represented by this Warrant are
exercisable on and after the date hereof (the “Exercise
Date”) until the Expiration Date, at a price per share (the
“Exercise Price”) of the Common Stock issuable
hereunder (hereinafter, “Warrant Shares”) of
Thirty-three cents ($0.33) per Warrant Share. The total
Exercise
Price shall be payable in cash by certified or
official bank check or immediately available funds. Alternatively,
as provided in Section 8, the Holder hereof may surrender this
certificate (with the form of Notice of Exercise duly executed) and
direct the Company to issue the net number of Warrant Shares
issuable pursuant to a Net Exercise (as defined in Section 8)
of this Warrant,
in whole or in part from time to
time.
1.2 PROCEDURE. Upon surrender of
this Warrant with a duly executed Notice of Exercise in the form of
Annex A attached hereto, together with payment of the total
Exercise Price for the Warrant Shares purchased (or, if applicable,
instructions with respect to a Net Exercise in accordance with
Section 8), at the Company’s principal executive offices
presently located at 2010 Airport Way South, Seattle, WA, 98134, or
at such other address as the Company shall have advised the holder
in writing (the “Designated Office”), the holder shall
be entitled to receive a certificate or certificates for the
Warrant Shares so purchased. The Company agrees that the Warrant
Shares shall be deemed to have been issued to the holder as of the
close of business on the date on which this Warrant shall have been
surrendered together with
the Notice of Exercise and payment for such
Warrant Shares.
1.3 VESTING. This Warrant is fully
vested and is not callable or redeemable by the Company.
1.4 TERM OF WARRANT. This Stock
Purchase Warrant (hereinafter, this “Warrant”) shall
expire and be of no further force or effect upon the earlier
of:
(a) the tenth
(10th) anniversary of the date hereof (the “Expiration
Date”); or
(b) the completion by the Company of
a “Qualified Public Offering” (as defined herein)
provided, that the Company shall deliver to the Holder notice of
the Qualified Public Offering, and the Holder’s right to
exercise the Warrants, no less than thirty (30) days before
the date scheduled for the effectiveness of the Registration
Statement relating thereto. For purposes of this subsection 1.4(b),
“Qualified Public Offering” shall mean the consummation
of the Corporation’s first sale of its Common Stock to the
public pursuant to a registration statement on Form S-1 or Form
SB-2 (or any successor form) under the Securities Act of 1933, as
amended, at an aggregate price to the public of at least $15
million and a per share price to the public of at least $5 (as
adjusted for stock splits, combinations, recapitalizations and the
like).
2. TRANSFER; ISSUANCE OF STOCK
CERTIFICATES: RESTRICTIVE LEGENDS.
2.1 RESTRICTIONS ON TRANSFER. These
Warrants were issued as part of certain “investment
units” consisting of the Warrants and shares of the
Company’s Series A Convertible Preferred Stock (the
“Preferred Stock”). The Warrants are non-detachable
from the shares of Preferred Stock forming the other part of the
Units and may not be sold, transferred or hypothecated except in
conjunction a simultaneous transfer of the shares of Preferred
Stock to which the Warrants are attached.
2.2 TRANSFER. Subject to compliance
with the restrictions on transfer set forth in this Section 2
and the legends set forth below, each transfer of this Warrant and
all rights hereunder, in whole or in part, shall be registered on
the books of the Company to be maintained for such purpose, upon
surrender of this Warrant at the Designated Office, together with a
written assignment of this Warrant in the form of Annex B attached
hereto duly executed by the holder or its agent or attorney. Upon
such surrender and delivery, the Company shall execute and deliver
a new Warrant or Warrants in the name of the assignee or assignees
and in the denominations specified in such instrument of
assignment, and shall issue to the assignor a new Warrant
evidencing the portion of this Warrant not so assigned, if any. A
Warrant, if properly assigned in compliance with the provisions
hereof, may be exercised by the new holder for the purchase of
Warrant Shares without having a new Warrant issued. Prior to due
presentment for registration of transfer thereof, the Company may
deem and treat the registered holder of this Warrant as the
absolute owner hereof (notwithstanding any notations of ownership
or writing thereon made by anyone other than a duly authorized
officer of the Company) for all purposes and shall not be affected
by any notice to the contrary. All Warrants issued upon any
assignment of Warrants shall be the valid obligations of the
Company, evidencing the same rights, and
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entitled to the same benefits as the Warrants
surrendered upon such registration of transfer or
exchange.
2.3 STOCK CERTIFICATES. Certificates
for the Warrant Shares shall be delivered to the holder within a
reasonable time after the rights represented by this Warrant shall
have been exercised pursuant to Section 1 (but in any event no
later than twenty (20) business days thereafter), and a new
Warrant representing the shares of Common Stock, if any, with
respect to which this
Warrant shall not then have been exercised shall
also be issued to the holder within such time period. The issuance
of certificates for Warrant Shares upon the exercise of this
Warrant shall be made without charge to the holder hereof
including, without limitation, any documentary, stamp or similar
tax that may be payable in respect thereof; provided, however, that
the Company shall not be
required to pay any income tax to which the
holder hereof may be subject in connection with the issuance of
this Warrant or the Warrant Shares.
2.4 RESTRICTIVE LEGENDS.
2.4.1 SHARE LEGENDS. Except as
otherwise provided in this Section 2, each certificate for Warrant
Shares initially issued upon the exercise of this Warrant, and each
certificate for Warrant Shares issued to any subsequent transferee
of any such certificate, shall be stamped or otherwise imprinted
with legends in substantially the following form:
THE SHARES REPRESENTED BY THIS
CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED OR THE
SECURITIES LAWS OF ANY STATE. THESE SHARES MAY NOT BE SOLD OR
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR EXEMPTION
THEREFROM UNDER SAID ACT AND LAWS.
2.4.2 WARRANT LEGENDS. Except as
otherwise provided in this Section 2, each Warrant issued upon
transfer shall be stamped or otherwise imprinted with legends in
substantially the following forms:
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(a)
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NEITHER THIS
WARRANT NOR ANY OF THE SECURITIES ISSUABLE UPON EXERCISE HEREOF
HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE “1933 ACT”), OR THE SECURITIES LAWS OF ANY STATE,
AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED OR HYPOTHECATED UNLESS
PURSUANT TO SEC RULE 144 OR UNLESS THERE IS AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE 1933 ACT AND THE SECURITIES LAWS
OF THE APPLICABLE STATES COVERING SUCH SECURITIES OR THE COMPANY
RECEIVES AN OPINION OF COUNSEL FOR THE HOLDER OF THE SECURITIES
REASONABLY SATISFACTORY TO THE COMPANY, STATING THAT SUCH SALE,
TRANSFER, ASSIGNMENT OR HYPOTHECATION IS EXEMPT FROM THE
REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF THE 1933
ACT
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AND THE SECURITIES LAWS OF THE
STATES.
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(b)
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NOTICE IS
HEREBY GIVEN THAT THIS WARRANT WAS ISSUED BY THE COMPANY AS PART OF
AN “INVESTMENT UNIT” CONSISTING OF THE WARRANT AND
SHARES OF THE COMPANY’S SERIES A CONVERTIBLE PREFERRED STOCK,
THAT THE WARRANT IS NON-DETACHABLE FROM SUCH SHARES OF SERIES A
CONVERTIBLE PREFERRED STOCK AND THEREFORE THE WARRANT MAY NOT BE
SOLD, TRANSFERRED, ASSIGNED OR HYPOTHECATED EXCEPT IN CONJUNCTION
WITH A SIMULTANEOUS TRANSFER, SALE, ASSIGNMENT OR HYPOTHECATION OF
THE SHARES OF SERIES A CONVERTIBLE PREFERRED STOCK TO WHICH THE
WARRANT IS ATTACHED. ANY OTHER TRANSFER SHALL BE DEEMED BY THE
COMPANY TO BE NULL AND VOID.
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2.4.3 REMOVAL OF LEGENDS.
Notwithstanding the foregoing, the legend requirements of Sections
2.4.1(a) and 2.4.2(a) shall terminate as to any particular Warrant
or Warrant Share when the Company shall have received from the
holder thereof an opinion of counsel in form and substance
satisfactory to the Company that such legend is not required in
order to ensure compliance with the Securities Act. Whenever the
restrictions imposed by this Section 2 shall terminate, the
holder hereof or of Warrant Shares, as the case may be, shall be
entitled to receive from the Company, without cost to such holder,
a new Warrant or certificate for Warrant Shares of like tenor, as
the case may be, without such restrictive legend.
3. ADJUSTMENT OF NUMBER OF SHARES;
EXERCISE PRICE: NATURE OF SECURITIES ISSUABLE UPON EXERCISE OF
WARRANTS.
3.1 EXERCISE PR