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Exhibit 4.2
THIS
WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE HEREUNDER HAVE
NOT
BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), IN RELIANCE ON EXEMPTIONS CONTAINED THEREIN
OR
QUALIFIED OR REGISTERED UNDER ANY APPLICABLE STATE SECURITIES LAWS
(THE
"STATE LAWS"). SUCH SECURITIES MAY NOT BE SOLD, TRANSFERRED OR
OTHERWISE
DISPOSED OF EXCEPT IN A TRANSACTION (a) REGISTERED UNDER THE
SECURITIES
ACT
OR EXEMPT FROM REGISTRATION THEREUNDER AND QUALIFIED OR
REGISTERED
UNDER THE STATE LAWS OR EXEMPT FROM QUALIFICATION OR
REGISTRATION
THEREUNDER OR (b) OTHERWISE IN COMPLIANCE WITH THE SECURITIES ACT
AND THE
STATE LAWS. THE OFFERING OF THIS WARRANT AND THE SHARES OF COMMON
STOCK
ISSUABLE UPON EXERCISE HEREOF HAS NOT BEEN REVIEWED OR APPROVED BY
ANY
STATE'S SECURITIES ADMINISTRATOR.
Warrant No. 1, Augusta, Georgia
WARRANT TO PURCHASE
SHARES OF COMMON STOCK
OF
R WIRELESS, INC.
July 21, 2005
Expires June 30, 2010
FOR VALUE RECEIVED, R Wireless, Inc., a Georgia corporation
(together
with its successors and assigns, the "Company"), hereby certifies
that Baker,
Johnston & Wilson LLP or its registered assigns is entitled to
subscribe for and
purchase, during the period specified in this Warrant, up to
1,434,088 shares
(subject to adjustment as hereinafter provided) of the duly
authorized, validly
issued, fully paid and nonassessable Common Stock, at an exercise
price per
share equal to the Warrant Price then in effect, subject, however,
to the
provisions and upon the terms and conditions hereinafter set forth.
Capitalized
terms used in this Warrant and not otherwise defined herein shall
have the
respective meanings specified in Section 7 hereof.
SECTION 1.
TERM.
The right to subscribe for and purchase shares of Warrant Stock
represented hereby shall commence on January 1, 2006 and shall
expire at 5:00
p.m., Eastern Time time, on June 30, 2010 (such period being the
"Term"). Prior
to the end of the Term, the Company will not take any action which
would
terminate the Warrants.
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SECTION 2.
EXERCISE, REGISTRATION, TRANSFER, EXCHANGE, COMPLIANCE WITH
SECURITIES LAWS AND CONTINUING RIGHTS.
2.1 RIGHT OF EXERCISE. The purchase rights represented by this
Warrant
may be exercised in whole or in part at any time and from time to
time during
the Term.
2.2 METHOD OF EXERCISE. The Holder hereof may exercise this
Warrant, in
whole or in part, by the surrender of this Warrant (with the
Subscription Form
attached hereto duly executed) at the principal office of the
Company, and by
the payment to the Company of an amount of consideration equal to
the Warrant
Price in effect on the date of such exercise multiplied by the
number of shares
of Warrant Stock with respect to which this Warrant is then being
exercised,
payable at such Holder's election by certified or official bank
check or by
canceling Indebtedness to the extent of such exercise.
2.3 ISSUANCE OF STOCK CERTIFICATES. In the event of any exercise of
the
rights represented by this Warrant in accordance with and subject
to the terms
and conditions hereof, (a) certificates for the shares of Warrant
Stock so
purchased shall be dated the date of such exercise and delivered to
the Holder
hereof within a reasonable time, not exceeding five Trading Days
after such
exercise, at the Company's expense, and the Holder hereof shall be
deemed for
all purposes to be the Holder of the shares of Warrant Stock so
purchased as of
the date of such exercise, and (b) unless this Warrant has expired,
a new
Warrant representing the number of shares of Warrant Stock, if any,
with respect
to which this Warrant shall not then have been exercised shall also
be issued to
the Holder hereof at the Company's expense within such time.
2.4 WARRANT REGISTER. The Warrants shall be numbered and shall
be
registered in a Warrant register (the "Warrant Register"). The
Company shall be
entitled to treat the registered holder of any Warrant on the
Warrant Register
as the owner in fact thereof for all purposes and shall not be
bound to
recognize any equitable or other claim to or interest in such
Warrant on the
part of any other Person, and shall not be liable for any
registration of
transfer of Warrants which are registered or are to be registered
in the name of
a fiduciary or the nominee of a fiduciary unless made with the
actual knowledge
that a fiduciary or nominee is committing a breach of trust in
requesting such
registration of transfer, or with such knowledge of such facts that
its
participation therein amounts to bad faith. The Warrants shall be
registered
initially in the name of the Holder as set forth in the first
sentence of this
Warrant in such denominations as the Holder may request in writing
to the
Company.
2.5 TRANSFER OF WARRANT. The Warrants will not be sold,
transferred,
assigned or hypothecated, in part or in whole (other than to the
individual
partners of Baker, Johnston & Wilson LLP or by will or pursuant
to the laws of
descent and distribution), except to registered assigns of the
Holder and
thereafter only upon delivery thereof duly endorsed by the Holder
or by his duly
authorized attorney or representative, or accompanied by proper
evidence of
succession, assignment or authority to transfer. In all cases of
transfer by an
attorney, the original power of attorney, duly approved, or an
official copy
thereof, duly certified, shall be deposited with the Company. In
case of
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transfer by executors, administrators, guardians or other legal
representatives,
duly authenticated evidence of their authority shall be produced,
and may be
required to be deposited with the Company in its discretion. Upon
any
registration of transfer, the Company shall deliver a new Warrant
or Warrants to
the persons entitled thereto. The Warrants may be exchanged at the
option of the
Holder thereof for another Warrant, or other Warrants, of
different
denominations, of like tenor and representing in the aggregate the
right to
purchase a like number of shares of Common Stock upon surrender to
the Company
or its duly authorized agent. Notwithstanding the foregoing, the
Company shall
have no obligation to cause Warrants to be transferred on its books
to any
person if such transfer would violate the Securities Act.
2.6 COMPLIANCE WITH SECURITIES LAWS.
(a) The holder of this Warrant, by acceptance hereof,
acknowledges that this Warrant and the Warrant Stock to be issued
upon exercise
hereof are being acquired solely for the Holder's own account
(which for the
initial Holder, Baker, Johnston & Wilson LLP, includes the
account of each of
its partners, who are David R. Baker and J. Brooke Johnston, Jr.
and, if he is
still a partner, James C. Wilson, Jr.) and not as a nominee for any
other party,
and for investment, and that the Holder will not offer, sell or
otherwise
dispose of this Warrant or any Warrant Stock except pursuant to an
effective
registration statement, or an exemption from registration, under
the Securities
Act and any applicable state securities laws.
(b) Except as provided in Section 2.6(c) below, this Warrant
and all certificates representing Warrant Stock issued upon
exercise hereof
shall be stamped or imprinted with a legend in substantially the
following form:
THE
SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED
UNDER THE SCURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
IN
RELIANCE ON EXEMPTIONS CONTAINED THEREIN OR QUALIFIED OR REGISTERED
UNDER
ANY
APPLICABLE STATE SECURITIES LAWS (THE "STATE LAWS"). SUCH
SECURITIES
MAY
NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF EXCEPT IN A
TRANSACTION (a) REGISTERED UNDER THE SECURITIES ACT OR EXEMPT
FROM
REGISTRATION THEREUNDER AND QUALIFIED OR REGISTERED UNDER THE STATE
LAWS
OR
EXEMPT FROM QUALIFICATION OR REGISTRATION THEREUNDER, OR (b)
OTHERWISE
IN
COMPLIANCE WITH THE SECURITIES ACT AND THE STATE LAWS.
(c) The restrictions imposed by this Section 2.6 upon the
transfer of this Warrant and the shares of Warrant Stock to be
purchased upon
exercise hereof shall terminate (i) when such securities shall have
been
effectively registered under the Securities Act, (ii) upon the
Company's receipt
of an opinion of counsel, in form and substance reasonably
satisfactory to the
Company, addressed to the Company to the effect that such
restrictions are no
longer required to ensure compliance with the Securities Act or
(iii) upon the
Company's receipt of other evidence reasonably satisfactory to the
Company that
such registration is not required. Whenever such restrictions shall
terminate as
to any such securities, the Holder thereof shall be entitled to
receive from the
Company (or its transfer agent and registrar), without expense
(other than
applicable transfer taxes, if any), new Warrants (or, in the case
of shares of
Warrant Stock, new stock certificates) of like tenor not bearing
the applicable
legends required by Section 2.6(b) relating to the Securities Act
and state
securities laws.
2.7 CONTINUING RIGHTS OF HOLDER. The Company will, at the time of,
or
at any time after, each exercise of this Warrant, upon the request
of the Holder
hereof or of any shares of Warrant Stock issued upon such exercise,
acknowledge
in writing the extent, if any, of its continuing obligation to
afford to such
Holder all rights to which such Holder shall continue to be
entitled after such
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exercise in accordance with the terms of this Warrant, provided
that if any such
Holder shall fail to make any such request, the failure shall not
affect the
continuing obligation of the Company to afford such rights to such
Holder.
SECTION 3.
COVENANTS OF THE COMPANY.
3.1 STOCK FULLY PAID. The Company represents, warrants, covenants
and
agrees that all shares of Warrant Stock which may be issued upon
the exercise of
this Warrant or otherwise hereunder will, upon issuance, be duly
authorized,
validly issued, fully paid and nonassessable and free from all
taxes, liens and
charges created by or through the Company. The Company further
covenants and
agrees that during the Term, the Company will at all times have
authorized and
reserved for the purpose of the issue upon exercise of this Warrant
a sufficient
number of shares of Common Stock to provide for the exercise of
this Warrant.
3.2 PAYMENT OF TAXES. The Company will pay all documentary stamp
taxes,
if any, attributable to the issuance of Warrant Stock; provided,
however, that
the Company shall not be required to pay any tax or taxes which may
be payable
in respect of any transfer involved in the issue or delivery of any
certificates
for Warrant Stock in a name other than that of the Holder of
Warrants in respect
of which such Warrant Stock is issued.
3.3 RESERVATION. If any shares of Common Stock required to be
reserved
for issuance upon exercise of this Warrant or as otherwise provided
hereunder
require registration or qualification with any governmental
authority under any
federal or state law before such shares may be so issued, the
Company will in
good faith use its best efforts as expeditiously as possible at its
expense to
cause such shares to be duly registered or qualified. The transfer
agent for the
Common Stock (the "Transfer Agent"), and every subsequent transfer
agent, if
any, for the Warrant Stock will be irrevocably authorized and
directed at all
times until the end of the Term to reserve such number of
authorized and
unissued shares of Common Stock as shall be required for such
purpose. The
Company will keep a copy of this Warrant on file with the Transfer
Agent and
with every subsequent transfer agent for of the Company's
securities issuable
upon the exercise of the Warrants. The Company will supply the
Transfer Agent or
any subsequent transfer agent with duly executed certificates for
such purpose
and will itself provide or otherwise make available any cash which
may be
distributable as provided in Section 6 of this Warrant. All
Warrants surrendered
in the exercise of the rights thereby evidenced shall be canceled,
and such
canceled Warrants shall constitute sufficient evidence of the
number of Shares
that have been issued upon the exercise of such Warrants. No shares
of Common
Stock shall be subject to reservation in respect of unexercised
Warrants
subsequent to the end of the Term. If the Company shall list any
shares of
Common Stock on any securities exchange or market it will, at its
expense, list
thereon, maintain and increase when necessary, such listing of all
shares of
Warrant Stock from time to time issued upon exercise of this
Warrant or as
otherwise provided hereunder, and, to the extent permissible under
the
applicable securities exchange rules, all unissued shares of
Warrant Stock which
are at any time issuable hereunder, so long as any shares of Common
Stock shall
be so listed. The Company will also so list on each securities
exchange or
market, and will maintain such listing of, any other securities
which the Holder
of this Warrant shall be entitled to receive upon the exercise of
this Warrant
if at the time any securities of the same class shall be listed on
such
securities exchange or market by the Company.
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3.4 DILUTION. The Company shall not by any action including,
without
limitation, amending the Certificate of Incorporation or the Bylaws
of the
Company, or through any reorganization, transfer of assets,
consolidation,
merger, dissolution, issue or sale of securities or any other
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 actions as may be necessary or
appropriate to
protect the rights of the Holder hereof against dilution (to the
extent
specifically provided herein) or impairment. Without limiting the
generality of
the foregoing, the Company will (a) not amend or modify any
provision of the
Certificate of Incorporation or Bylaws of the Company in any manner
that would
adversely affect in any way the powers, preferences or relative
participating,
optional or other special rights of the Common Stock or which would
adversely
affect the rights of the Holders of the Warrants, (b) take all such
action as
may be reasonably necessary in order that the Company may validly
and legally
issue fully paid and nonassessable shares of Common Stock, free and
clear of any
liens, claims, encumbrances and restrictions (other than as
provided herein)
upon the exercise of this Warrant, and (c) use its best efforts to
obtain all
such authorizations, exemptions or consents from any public
regulatory body
having jurisdiction thereof as may be reasonably necessary to
enable the Company
to perform its obligations under this Warrant.
3.5 LOSS, THEFT, DESTRUCTION OR MUTILATION OF WARRANTS. Upon
receipt of
evidence satisfactory to the Company of the ownership of and the
loss, theft,
destruction or mutilation of any Warrant and, in the case of any
such loss,
theft or destruction, upon receipt of indemnity and/or security
satisfactory to
the Company or, in the case of any such mutilation, upon surrender
and
cancellation of such Warrant, the Company will make and deliver, in
lieu of such
lost, stolen, destroyed or mutilated Warrant, a new Warrant of like
tenor and
representing the right to purchase the same number of shares of
Common Stock.
SECTION 4.
ADJUSTMENT OF WARRANT PRICE AND WARRANT SHARE NUMBER.
The number and kind of Securities purchasable upon the exercise of
this
Warrant and the Warrant Price shall be subject to adjustment from
time to time
upon the happening of certain events as follows:
4.1 RECAPITALIZATION, REORGANIZATION, RECLASSIFICATION,
CONSOLIDATION,
MERGER OR SALE.
(a) In case the Company after the Original Issue Date shall do
any of the following (each, a "Triggering Event"): (i) consolidate
with or merge
into any other Person when the Company shall not be the continuing
or surviving
corporation of such consolidation or merger, (ii) permit any other
Person to
consolidate with or merge into the Company when the Company shall
be the
continuing or surviving Person but, in connection with such
consolidation or
merger, any Capital Stock of the Company shall be changed into or
exchanged for
Securities of any other Person or cash or any other property, (iii)
transfer all
or substantially all of its properties or assets to any other
Person, or (iv)
effect a capital reorganization or reclassification of its Capital
Stock, then,
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and in the case of each such Triggering Event, proper provision
shall be made so
that, upon the basis and the terms and in the manner provided in
this Warrant,
the Holder of this Warrant shall be entitled upon the exercise
hereof at any
time after the consummation of such Triggering Event, to the extent
this Warrant
is not exercised prior to such Triggering Event, to receive at the
Warrant Price
in effect at the time immediately prior to the consummation of such
Triggering
Event in lieu of the Common Stock issuable upon such exercise of
this Warrant
prior to such Triggering Event, the Securities, cash and property
to which such
Holder would have been entitled upon the consummation of such
Triggering Event
if such Holder had exercised the rights represented by this Warrant
immediately
prior thereto, subject to adjustments and increases (subseq
