EXHIBIT
4.2
THE WARRANT
REPRESENTED
BY THIS CERTIFICATE AND THE SHARES ISSUABLE UPON
EXERCISE HEREOF HAVE
NOT BEEN REGISTERED
UNDER THE SECURITIES
ACT OF 1933, AS
AMENDED (THE "ACT"),
OR ANY STATE
SECURITIES LAWS AND
NEITHER SUCH SECURITIES
NOR ANY INTEREST THEREIN MAY BE OFFERED, SOLD, PLEDGED, ASSIGNED OR OTHERWISE
TRANSFERRED UNLESS
(1) A REGISTRATION STATEMENT WITH RESPECT THERETO IS
EFFECTIVE UNDER THE
ACT AND ANY APPLICABLE
STATE SECURITIES
LAWS, OR (2) THE
COMPANY RECEIVES AN OPINION OF COUNSEL TO THE HOLDER OF SUCH
SECURITIES,
WHICH
COUNSEL AND OPINION
ARE REASONABLY SATISFACTORY TO THE COMPANY, THAT SUCH
SECURITIES MAY BE OFFERED, SOLD, PLEDGED, ASSIGNED OR TRANSFERRED IN THE
MANNER
CONTEMPLATED WITHOUT
AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR
APPLICABLE STATE SECURITIES LAWS.
THE TRANSFER OF THIS WARRANT IS
RESTRICTED AS DESCRIBED HEREIN.
OVATION PRODUCTS CORPORATION
Warrant for the Purchase of Shares of Common Stock,
$.01 par value per share
THIS WARRANT EXPIRES ON _____________, 2015
__________ Shares
THIS CERTIFIES
that, for value received, _________________ with an address
at___________________________. (in its individual capacity, "________" and,
including any
transferee,
the "Holder"), is entitled to subscribe for and
purchase from
Ovation Products Corporation, a Delaware corporation (the
"Company"), upon the
terms and conditions set forth herein, at any time or from
time to time before 5:00 P.M. on _____________ 2015, Boston time (the
"Exercise
Period"), ___________
shares of the
Company's Common Stock, $.01 par value per
share ("Common
Stock"), at a price equal to $1.67 per share,
subject to the
adjustments as set forth herein and in the registration rights
agreement between
the Company and the Holder (the "Exercise Price").
This Warrant is issued to Holder as compensation for acting as a consultant to
the Company in
connection
with a financing
by the Company of $500,000 (the
"financing"), pursuant
to a Confidential
Private Placement
Memorandum, dated
June 10, 2005,
together with all Exhibits and Appendices thereto as it may be
amended or
supplemented
(the "Memorandum"). 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.
The number of shares of Common Stock issuable upon exercise of this
Warrant (the
"Warrant Shares") and
the Exercise Price may
be adjusted from time
to time as
hereinafter set forth.
1. (a) This Warrant may be exercised during the Exercise Period, as
to the whole
or any lesser number of whole Warrant Shares, by the surrender of this
Warrant
(with the election at the end hereof duly executed) to the Company
at its office
at Ovation Products Corporation, 395 East Dunstable Road, Nashua,
New Hampshire
03062 or at such other place as is designated in writing by the
Company. Subject
to Section 1(b) hereof, such executed election must be accompanied
by payment in
an amount equal to the Exercise Price multiplied by the number of
Warrant Shares
for which this Warrant is being exercised. Such payment may be made
by certified
or bank cashier's
check payable to the order of the
Company, or as
otherwise
provided in Section 1(b) hereof.
<PAGE>
(b) In lieu of
exercising this Warrant via cash payment, the Holder may elect
to receive shares
equal to the value of
this Warrant (or the
portion thereof
being canceled) by
surrender of this
Warrant at the
principal office of the
Company together with
notice of election to exercise by means of a net issuance
exercise, in which
event the Company shall issue to the Holder a number of
shares of Common Stock of the Company computed using the following
formula:
X = Y (A - B)
--------
A
Where
X =
the number of shares of Common Stock to be issued to
the Holder.
Y =
the number of shares of Common Stock purchasable
under this Warrant or, if only a portion of the
Warrant is being exercised, the portion of the
Warrant being cancelled (at the date of such
calculation).
A =
the Fair Market
Value (as defined
below) of one
share of Common Stock
(at the date of such
calculation).
B =
the Exercise Price (as adjusted to the date of such
calculation).
"Fair
Market Value" shall mean (i) if traded on a
securities
exchange or
though the Nasdaq
National Market or NASDAQ Small Cap, the average of the
closing prices of the securities on such quotation system over the ten (10) day
period ending
three (3) days prior
to the exercise of
such Warrant;
(ii) if
actively traded over-the-counter, the average of the closing bid
for sale prices
(whichever is
applicable)
over the ten (10) day
period ending three
(3) days
prior to the exercise of such Warrant; and (iii) if there is no active
public
market, the value shall be the fair market value thereof,
as determined in
good
faith by the Board of Directors of the Company.
If the above
calculation
results in a negative number, then no shares of
Common Stock shall be issued or issuable upon conversion of this
Warrant.
2. Upon each exercise of the Holder's rights to purchase Warrant Shares, the
Holder shall be deemed to be the holder of record of the Warrant
Shares issuable
upon such exercise, notwithstanding that the transfer books of the
Company shall
then be closed or certificates representing such Warrant Shares shall not
then
have been actually
delivered to the Holder. As soon as practicable
after each
such exercise of this Warrant, the Company shall issue and deliver
to the Holder
a certificate
or certificates for the Warrant Shares issuable upon such
exercise, registered
in the name of the Holder or its designee. If this Warrant
should be exercised in
part only, the Company
shall, upon surrender of this
Warrant for cancellation, execute and deliver a new Warrant
evidencing the right
of the Holder to
purchase the
balance of the Warrant Shares (or portions
thereof) subject to purchase hereunder.
3. (a) Any Warrants issued upon the transfer or exercise in part of
this Warrant
shall be numbered
and shall be
registered
in a Warrant
Register as they
are
issued. 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 or transfer of Warrants which are registered or 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 or
transfer, or with the
knowledge of such facts
that its participation
therein amounts to bad faith. This Warrant shall be
transferable only on
the books of the Company 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, executor, administrator,
guardian, or other legal representative, duly authenticated evidence of his or
its authority shall be produced. Upon any registration of transfer,
the Company
shall deliver a new
Warrant or Warrants to the person entitled thereto. This
Warrant 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
Warrant
Shares (or
portions thereof), 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, in
the opinion of counsel to the Company, such transfer does not comply with the
provisions of the Securities Act of 1933, as amended (the "Act"),
and the rules
and regulations thereunder.
Warrant CS-35
2
Confidential
<PAGE>
(b) The Holder
acknowledges
that it has been
advised by the
Company that
neither this Warrant nor the Warrant Shares have been registered
under the Act,
that this Warrant
is being or has been
issued and the
Warrant Shares may be
issued on the basis of the statutory exemption provided by Section 4(2) of
the
Act or Regulation D promulgated thereunder, or both, relating to
transactions by
an issuer not involving any public offering. The Holder
acknowledges that it has
been informed by the Company of, or is otherwise familiar with, the nature of
the limitations
imposed by the Act and the rules and regulations thereunder on
the transfer of
securities.
In particular, the Holder agrees that no sale,
assignment or transfer
of this Warrant or the Warrant
Shares issuable upon
exercise hereof
shall be valid or
effective,
and the Company shall not be
required to give any effect to any such sale, assignment or
transfer, unless (i)
the sale, assignment
or transfer
of this Warrant or such Warrant Shares is
registered under the Act, it being understood that neither this
Warrant nor such
Warrant Shares are
currently registered for sale and that the Company has
no
obligation or
intention to so
register this
Warrant or such
Warrant Shares
except as specifically
provided herein or in
a registration rights
agreement
between the Company,
the Holder and the
other parties
thereto, or (ii) this
Warrant or such Warrant Shares are sold, assigned or transferred in
accordance
with all the
requirements and
limitations of Rule
144 under the Act, it being
understood that Rule
144 is not available at the time of the original issuance
of this Warrant for
the sale of this
Warrant or such
Warrant Shares and
that
there can be no
assurance that Rule 144 sales will be available at any
subsequent time, or (iii) such sale, assignment, or transfer is
otherwise exempt
from registration under the Act.
(c) Following
any assignment or other transfer resulting in the issuance of
warrants to purchase
Warrant Shares purchasable hereunder to more than one
person or entity,
all elections that may be made by the
Holders under such
warrants shall be made
by written
notice of Holders representing rights to
purchase a majority of
the Warrant
Shares for which such warrants are then
exercisable.
4. The Company
shall at all times reserve and keep available out of its
authorized and
unissued Common Stock,
solely for the purpose
of providing for
the exercise of the rights to purchase all Warrant Shares granted pursuant to
this Warrant, such number of shares of Common Stock as shall, from
time to time,
be sufficient
therefor. The Company
covenants that all
shares of Common Stock
are validly authorized and, if and when this Warrant is exercised
in whole or in
part or any lesser
extent in accordance
with the terms hereof,
the shares of
Common Stock issued upon such exercise, upon receipt by the Company of the
full
Exercise Price
therefor, shall be
validly issued, fully
paid,
nonassessable,
without any personal liability attaching to the ownership thereof,
and will not
be issued in violation of any preemptive or other rights of
stockholders.
5. The Exercise Price is subject to adjustment from time to time as
follows:
(a) If the
number of shares of Common Stock outstanding is at any time
increased by a stock
dividend payable in shares
