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EXHIBIT 5
THIS WARRANT AND THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER THE SECURITIES OR BLUE
SKY LAWS OF ANY STATE AND MAY NOT BE SOLD, OR OTHERWISE TRANSFERRED, IN THE
ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM UNDER SUCH ACT AND UNDER
ANY SUCH APPLICABLE STATE LAWS, OR IN VIOLATION OF THE PROVISIONS OF THIS
WARRANT.
THIS WARRANT AND THE SECURITIES REPRESENTED HEREBY ARE SUBJECT TO THE TERMS AND
CONDITIONS OF A REGISTRATION RIGHTS AGREEMENT DATED AS OF OCTOBER __, 1997.
WARRANT
To Purchase Common Stock of
CODE ALARM INC.
Issuance Date: ________ __, 199_
Issued To: [Pegasus Partners, L.P.] [Pegasus Related Partners, L.P.]
No. of Shares of Common Stock: _________
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TABLE OF CONTENTS
Page
1. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2. EXERCISE OF WARRANT . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.1. Manner of Exercise . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.2. Payment of Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.3. Fractional Shares . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.4. Continued Validity . . . . . . . . . . . . . . . . . . . . . . . . . 8
3. TRANSFER, DIVISION AND COMBINATION . . . . . . . . . . . . . . . . . . . 8
3.1. Transfer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.2. Division and Combination . . . . . . . . . . . . . . . . . . . . . . 8
3.3. Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.4. Maintenance of Books . . . . . . . . . . . . . . . . . . . . . . . . 9
4. ADJUSTMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
4.1. Stock Dividends, Subdivisions and Combinations . . . . . . . . . . . 9
4.2. Certain Other Distributions . . . . . . . . . . . . . . . . . . . . 9
4.3. Issuance of Additional Shares of Common Stock . . . . . . . . . . 10
4.4. Issuance of Warrants or Other Rights . . . . . . . . . . . . . . . 11
4.5. Issuance of Convertible Securities . . . . . . . . . . . . . . . . 12
4.6. Superseding Adjustment . . . . . . . . . . . . . . . . . . . . . . 13
4.7. Other Provisions Applicable to Adjustments Under This Section . . . 13
4.8. Reorganization, Reclassification, Liquidation, Dissolution, Merger,
Consolidation or Disposition of Assets . . . . . . . . . . . . . . 16
4.9. Other Action Affecting Common Stock . . . . . . . . . . . . . . . 16
4.10. Certain Limitations . . . . . . . . . . . . . . . . . . . . . . . 17
5. NOTICES TO WARRANTHOLDERS . . . . . . . . . . . . . . . . . . . . . . . 17
5.1. Notice of Adjustments . . . . . . . . . . . . . . . . . . . . . . . 17
5.2. Notice of Certain Corporate Action . . . . . . . . . . . . . . . . 17
6. NO IMPAIRMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
7. RESERVATION AND AUTHORIZATION OF COMMON STOCK; REGISTRATION WITH OR APPROVAL
OF ANY GOVERNMENTAL AUTHORITY . . . . . . . . . . . . . . . . . . . . . 18
8. TAKING OF A RECORD; STOCK AND WARRANT TRANSFER BOOKS . . . . . . . . . . 19
9. RESTRICTIONS ON TRANSFERABILITY . . . . . . . . . . . . . . . . . . . . . 19
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Page
9.1. Restrictive Legends . . . . . . . . . . . . . . . . . . . . . . . . 19
9.2. Notice of Proposed Transfers; Requests for Registration . . . . . . 20
9.3. No Transfer to Directed Electronics, Inc . . . . . . . . . . . . . . 20
9.4. Termination of Restrictions . . . . . . . . . . . . . . . . . . . . 20
10. SUPPLYING INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . 21
11. LOSS OR MUTILATION . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
12. OFFICE OF THE COMPANY . . . . . . . . . . . . . . . . . . . . . . . . . . 21
13. REPURCHASE BY THE COMPANY OF WARRANT AND WARRANT STOCK . . . . . . . . . 22
13.1. Obligation to Repurchase Warrant and Warrant Stock . . . . . . . . 22
13.2. Payment of Repurchase Price . . . . . . . . . . . . . . . . . . . . 23
13.3. Right to Repurchase Warrant and Warrant Stock . . . . . . . . . . 23
14. REGISTRATION RIGHTS . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
15. LIMITATION OF LIABILITY . . . . . . . . . . . . . . . . . . . . . . . . . 24
16. DIVIDENDS ON UNDERLYING COMMON STOCK . . . . . . . . . . . . . . . . . . 24
17. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
17.1. Nonwaiver and Expenses . . . . . . . . . . . . . . . . . . . . . . 25
17.2. Notice Generally . . . . . . . . . . . . . . . . . . . . . . . . . 25
17.3. Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . 26
17.4. Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . 26
17.5. Amendment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
17.6. Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
17.7. Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
17.8. Governing Law; Consent to Jurisdiction and Venue. . . . . . . . . 27
17.9. Mutual Waiver of Jury Trial . . . . . . . . . . . . . . . . . . . . 27
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THIS WARRANT AND THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER THE SECURITIES OR BLUE
SKY LAWS OF ANY STATE AND MAY NOT BE SOLD, OR OTHERWISE TRANSFERRED, IN THE
ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM UNDER SUCH ACT AND UNDER
ANY SUCH APPLICABLE STATE LAWS, OR IN VIOLATION OF THE PROVISIONS OF THIS
WARRANT.
THIS WARRANT AND THE SECURITIES REPRESENTED HEREBY ARE SUBJECT TO THE TERMS AND
CONDITIONS OF A REGISTRATION RIGHTS AGREEMENT DATED AS OF OCTOBER __, 1997.
Warrant Number: ___________ Date of Issuance: _______
No. of Shares of Common Stock: ________
WARRANT
To Purchase Common Stock of
CODE ALARM INC.
THIS IS TO CERTIFY THAT [Pegasus Partners, L.P.] [Pegasus Related
Partners, L.P.] or its registered assigns, is entitled, at any time during the
Exercise Period (as hereinafter defined), to purchase from Code Alarm Inc., a
Michigan corporation (the "Company"), _______________________ (______) shares
of Common Stock (as hereinafter defined and subject to adjustment as provided
herein), in whole or in part, including fractional parts, at a purchase price of
$___1 per share (subject to adjustment as set forth herein), all on the terms
and conditions and pursuant to the provisions hereinafter set forth.
1. DEFINITIONS
As used in this Warrant, the following terms have the respective
meanings set forth below:
"Additional Shares of Common Stock" shall mean all shares of
Common Stock issued by the Company after the Closing Date, other than Warrant
Stock, whether now authorized or not.
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(1) $164,731 divided by the number of shares constituting
1% of the outstanding Common Stock of the Company, on a fully-diluted
basis, on the date of issuance of this Warrant.
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"Affiliate" of any Person shall mean a Person that directly or
indirectly, through one or more intermediaries, controls or is controlled by or
is under common control with, such Person.
"Business Day" shall mean any day that is not a Saturday or Sunday or a
day on which banks are required or permitted to be closed in the State of New
York.
"Closing Date" shall mean October __, 1997.
"Commission" shall mean the Securities and Exchange Commission or any
other federal agency then administering the Securities Act and other federal
securities laws.
"Common Stock" shall mean (except where the context otherwise
indicates) the Common Stock, no par value, of the Company as constituted on
the Issuance Date, and any capital stock into which such Common Stock may
thereafter be changed, and shall also include (i) capital stock of the Company
of any other class (regardless of how denominated) issued to the holders of
shares of Common Stock upon any reclassification thereof which is also not
preferred as to dividends or assets over any other class of stock of the Company
and which is not subject to redemption and (ii) shares of common stock of any
successor or acquiring corporation (as defined in Section 4.8) received by or
distributed to the holders of Common Stock of the Company in the circumstances
contemplated by Section 4.8.
"Convertible Securities" shall mean evidences of indebtedness, shares
of stock or other securities which are convertible into or exchangeable, with
or without payment of additional consideration in cash or property, for
Additional Shares of Common Stock, either immediately or upon the occurrence of
a specified date or a specified event.
"Current Market Price" shall mean, in respect of any share of Common
Stock on any date herein specified, the average of the daily market prices for
the 20 consecutive Trading Days immediately preceding such date. The daily
market price for each such Trading Day shall be (i) the last sale price on such
day on the principal stock exchange on which such Common Stock is then listed or
admitted to trading, (ii) if no sale takes place on such day on any such
exchange, the last reported sale price as officially quoted on any such
exchange, (iii) if the Common Stock is not then listed or admitted to trading on
any stock exchange but is traded on the Nasdaq Stock Market, the last reported
sale price as officially quoted on the Nasdaq Stock Market, (iv) if the Common
Stock is not then traded on the Nasdaq Stock Market, the last reported sale
price on the over-the-counter market, as reported by the National Quotation
Bureau Incorporated (or any similar organization or agency succeeding to its
functions of reporting prices), or if such sale price is not available on such
date, the average of the closing bid and asked prices on such date as reported
by the National Quotation Bureau Incorporated (or any similar organization or
agency succeeding to its functions of reporting prices), or (v) if there is no
such organization or agency, as furnished by any member of the NASD selected
mutually by the Majority Holders and the Company or, if they cannot agree upon
such selection, by a member
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selected by two such members of the NASD, one of which shall be selected by the
Majority Holders and one of which shall be selected by the Company.
"Current Warrant Price" shall mean, in respect of a share of Common
Stock at any date herein specified, the price at which a share of Common Stock
may be purchased pursuant to this Warrant on such date. On the Issuance Date,
the Current Warrant Price is $___1 per share of Common Stock, and is subject to
adjustment pursuant to Section 4.
"DEI shall mean Directed Electronics, Inc., a California corporation.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, or any similar federal statute, and the rules and regulations of the
Commission thereunder, all as the same shall be in effect from time to time.
"Exercise Period" shall mean the period beginning on the Issuance Date
and ending at 5:00 P.M., Michigan time, on the seventh anniversary of the
Closing Date.
"Fully Diluted Outstanding" shall mean, when used with reference to
Common Stock, at any date as of which the number of shares thereof is to be
determined, all shares of Common Stock Outstanding at such date and all shares
of Common Stock issuable in respect of this Warrant outstanding on such date and
other options or warrants to purchase, or securities convertible into, shares of
Common Stock outstanding on such date, whether or not such options, warrants or
other securities are presently convertible or exercisable.
"Holder" shall mean, as the context requires, the Person in whose name
this Warrant or one of the other Warrants is registered on the books of the
Company maintained for such purpose and/or the Person holding any Warrant Stock.
"Independent Counsel" shall mean counsel to the Holder reasonably
acceptable to the Company.
"Issuance Date" shall mean ______ __, 199_ [the date of issuance of
this Warrant].
"Majority Holders" shall mean, at any given time, holders of Warrants
and Other Warrants then outstanding who would hold a majority of the Common
Stock purchasable upon exercise of all Warrants and Other Warrants in the
event all Warrants and Other Warrants were so exercised at such time.
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(1) $164,731 divided by the number of shares constituting 1% of the
outstanding Common Stock of the Company, on a fully-diluted basis, on
the date of issuance of this Warrant.
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"NASD" shall mean the National Association of Securities Dealers,
Inc., or any successor corporation thereto.
"New Securities" shall mean any Additional Shares of Common Stock,
and any rights or options to purchase any Additional Shares of Common Stock,
and any Convertible Securities.
"Non-Repurchasable Stock" shall have the meaning set forth in
Section 13.3.
"Other Property" shall have the meaning set forth in Section 4.8.
"Other Warrants" shall mean (i) warrants to purchase Common Stock
issued as part of Units purchased by Pegasus Partners, L.P. or Pegasus
Related Partners, L.P. pursuant to the Unit Purchase Agreement or issued to
Pegasus Partners, L.P., Pegasus Related Partners, L.P. or their successors or
assigns as part of Units issued in payment of dividends on Preferred Shares,
(ii) warrants issued to Pegasus Partners, L.P. or Pegasus Related Partners, L.P.
pursuant to Section 3.01(s) of the Unit Purchase Agreement, and (iii) all
warrants issued upon transfer, division or combination of, or in substitution or
exchange for, any thereof.
"Outstanding" shall mean, when used with reference to Common Stock,
at any date as of which the number of shares thereof is to be determined, all
issued shares of Common Stock, except shares then owned or held by or for the
account of the Company or any Subsidiary, and shall include all shares issuable
in respect of outstanding scrip or any certificates representing fractional
interests in shares of Common Stock.
"Payment Shares" shall have the meaning set forth in Section 2.1.
"Permitted Issuances" shall mean (i) the issuance of shares of Common
Stock pursuant to an underwritten public offering, (ii) the issuance of Other
Warrants, (iii) the issuance of shares of Common Stock upon exercise of the
Warrants or the Other Warrants, (iv) the issuance of up to 280,000 shares of
Common Stock upon the exercise of options issued to management employees of the
Company or its Subsidiaries pursuant to the Company's 1987 Stock Option Plan,
(v) provided that the Charter Amendment (as defined in the Unit Purchase
Agreement) has (1) been approved and adopted by the Company's stockholders, (2)
been filed with the Department of Consumer and Industry Services of the State of
Michigan and (3) become effective, the issuance of up to 1,317,178 shares of
Common Stock or options to acquire such shares to management employees of the
Company or its Subsidiaries pursuant to the Company's 1997 Stock Option Plan,
(vi) the issuance of Preferred Shares and (vii) the issuance to General Electric
Capital Corporation on the Closing Date of warrants to purchase up to 131,718
shares of Common Stock (subject to adjustment as provided therein) and the
issuance of Common Stock upon the exercise thereof.
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"Person" shall mean any individual, sole proprietorship, partnership,
joint venture, trust, incorporated organization, association, corporation,
institution, public benefit corporation, entity or government (whether federal,
state, county, city, municipal or otherwise, including, without limitation, any
instrumentality, division, agency, body or department thereof).
"Preferred Shares" shall mean shares of Series A Preferred Stock of the
Company.
"Registration Rights Agreement" shall mean the Registration Rights
Agreement dated as of the Closing Date among the Company, Pegasus Partners,
L.P., Pegasus Related Partners, L.P. and General Electric Capital Corporation.
"Reorganization" shall have the meaning set forth in Section 4.8.
"Repurchase Price" shall have the meaning set forth in Section 13.2.
"Restricted Common Stock" shall mean shares of Common Stock which are,
or which upon their issuance on the exercise of this warrant would be,
evidenced by a certificate bearing the restrictive legend set forth in Section
9.1(a).
"Restrictions" shall have the meaning set forth in Section 13.1(c).
"Securities Act" shall mean the Securities Act of 1933, as amended, or
any similar federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time.
"Subsidiary" shall mean any corporation of which an aggregate of more
than 50% of the outstanding stock having ordinary voting power to elect a
majority of the board of directors of such corporation (irrespective of
whether, at the time, stock of any other class or classes of such corporation
shall have or might have voting power by reason of the happening of any
contingency) is at the time, directly or indirectly, owned legally or
beneficially by the Company and/or one or more Subsidiaries of the Company.
"Trading Day" shall mean (i) any day on which stock is traded on the
principal stock exchange on which the Common Stock is listed or admitted to
trading, (ii) if the Common Stock is not then listed or admitted to trading on
any stock exchange but is traded on the Nasdaq Stock Market, any day on which
stock is traded on the Nasdaq Stock Market, or (iii) if the Common Stock is not
then traded on the Nasdaq Stock Market, any day on which stock is traded in the
over-the counter market, as reported by the National Quotation Bureau
Incorporated (or any similar organization or agency succeeding to its functions
of reporting prices).
"Transfer" shall mean any disposition of any Warrant or Warrant Stock
or of any interest in either thereof, which would constitute a sale thereof
within the meaning of the Securities Act.
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"Unit Purchase Agreement" shall mean the Unit Purchase Agreement dated
as of the Closing Date, by and among the Company, Pegasus Partners, L.P. and
Pegasus Related Partners, L.P.
"Units" shall mean units consisting of one Preferred Share and one
warrant to purchase 72.2525247 shares of Common Stock, as adjusted from time to
time.
"Warrant Price" shall mean an amount equal to (i) the number of shares
of Common Stock being purchased upon exercise of this Warrant pursuant to
Section 2.1, multiplied by (ii) the Current Warrant Price as of the date of such
exercise.
"Warrant Stock" shall mean the shares of Common Stock purchased by
Holders of the Warrants upon the exercise thereof.
"Warrants" shall mean this warrant and the other warrants issued by the
Company to Pegasus Partners, L.P. or Pegasus Related Partners, L.P. pursuant
to Section 5.04 of the Unit Purchase Agreement, and all warrants issued upon
transfer, division or combination of, or in substitution or exchange for, any
thereof.
2. EXERCISE OF WARRANT
2.1. Manner of Exercise. At any time during the Exercise Period, the
Holder may exercise this Warrant, on any Business Day, for all or any part of
the number of shares of Common Stock purchasable hereunder provided, however,
that the Company shall only be required to issue shares to the extent such
shares are required to be available for issuance pursuant to Section 7; and
provided, further, however, that for all purposes hereunder other than its
direct exercise for shares of Common Stock (including but not limited to for
purposes of Section 4.8 and 16), this Warrant shall be deemed to be exercisable
for the full amount of shares of Common Stock represented by this Warrant,
without regard to the number of shares of Common Stock available or set aside
for issuance upon such exercise..
In order to exercise this Warrant, in whole or in part, the Holder
shall deliver to the Company at its office at 000 Xxxx Xxxxxxxx, Xxxxxxx
Xxxxxxx, Xxxxxxxx 00000, or at the office or agency designated by the Company
pursuant to Section 12, (i) a written notice of the Holder's election to
exercise this Warrant, which notice shall specify the number of shares of Common
Stock to be purchased, (ii) payment of the Warrant Price in the manner provided
below, and (iii) this Warrant. Such notice shall be substantially in the form
of the subscription form appearing at the end of this Warrant as Exhibit A, duly
executed by the Holder or its duly appointed agent or attorney. Upon receipt
thereof, the Company shall, as promptly as practicable, and in any event within
five (5) Business Days thereafter, execute or cause to be executed and deliver
or cause to be delivered to the Holder a certificate or certificates
representing the aggregate number of full shares of Common Stock issuable upon
such exercise, together with cash in lieu of any fraction of a share, as
hereinafter provided. The stock certificate
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or certificates so delivered shall be, to the extent possible, in such
denomination or denominations as the Holder shall request in the notice and
shall be registered in the name of the Holder or, subject to Section 9, such
other name as shall be designated in the notice. This Warrant shall be deemed
to have been exercised and such certificate or certificates shall be deemed to
have been issued, and the Holder or any other Person so designated to be named
therein shall be deemed to have become a holder of record of such shares for
all purposes, as of the date the notice, together with the cash or check or
checks, if any, and this Warrant, are received by the Company as described
above and all taxes required to be paid by the Holder, if any, pursuant to
Section 2.2 prior to the issuance of such shares have been paid. If this
Warrant shall have been exercised in part, the Company shall, at the time of
delivery of the certificate or certificates representing Warrant Stock, deliver
to the Holder a new Warrant evidencing the rights of the Holder to purchase the
unpurchased shares of Common Stock called for by this Warrant, which new
Warrant shall in all other respects be identical with this Warrant, or, at the
request of the Holder, appropriate notation may be made on this Warrant and the
same returned to the Holder. Notwithstanding any provision herein to the
contrary, the Company shall not be required to register shares in the name of
any Person who acquired this Warrant (or part hereof) or any Warrant Stock
otherwise than in accordance with this Warrant.
Payment of the Warrant Price shall be made at the option of the Holder
by (i) cash, (ii) wire transfer to an account in a bank located in the United
States designated for such purpose by the Company, (iii) certified or official
bank check, or (iv) any combination of the foregoing; provided, however, that
the Holder shall have the right, at its election, in lieu of delivering the
Warrant Price in cash, to instruct the Company in the form of Subscription
Notice to retain, in payment of the Warrant Price, a number of shares of Common
Stock (the "Payment Shares") equal to the quotient of the aggregate Warrant
Price of the shares as to which this Warrant is then being exercised divided by
the Current Market Price.
2.2. Payment of Taxes. All shares of Common Stock issuable upon the
exercise of this Warrant pursuant to the terms hereof shall be validly issued,
fully paid and nonassessable and without any preemptive rights. The Company
shall pay all expenses in connection with, and all taxes and other governmental
charges that may be imposed with respect to, the issue or delivery thereof,
unless such tax or charge is imposed by law upon the Holder, in which case such
taxes or charges shall be paid by the Holder. The Company shall not be
required, however, to pay any tax or other charge imposed in connection with any
transfer involved in the issue of any certificate for shares of Common Stock
issuable upon exercise of this Warrant in any name other than that of the
Holder, and in such case the Company shall not be required to issue or deliver
any stock certificate until such tax or other charge has been paid or it has
been established to the satisfaction of the Company that no such tax or other
charge is due.
2.3. Fractional Shares. The Company shall not be required to issue a
fractional share of Common Stock upon exercise of any Warrant. As to any
fraction of a share which the Holder of one or more Warrants, the rights under
which are exercised in the same transaction, would otherwise be entitled to
purchase upon such exercise, the Company shall pay a cash
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adjustment in respect of such final fraction in an amount equal to the same
fraction of the Current Market Price per share of Common Stock on the date of
exercise.
2.4. Continued Validity. A holder of shares of Common Stock issued
upon the exercise of this Warrant, in whole or in part (other than a holder who
acquires such shares after the same have been publicly sold pursuant to a
Registration Statement under the Securities Act or sold pursuant to Rule 144
thereunder), shall continue to be entitled with respect to such shares to all
rights to which it would have been entitled as the Holder under Sections 6, 10,
13, 14, 15 and 17 of this Warrant, subject to the obligations thereunder. The
Company will, at the time of each exercise of this Warrant, in whole or in part,
upon the request of the holder of the shares of Common Stock issued upon such
exercise hereof, acknowledge in writing, in form reasonably satisfactory to such
holder, its continuing obligation to afford to such holder all such rights;
provided, however, that if such holder shall fail to make any such request, such
failure shall not affect the continuing obligation of the Company to afford to
such holder all such rights.
3. TRANSFER, DIVISION AND COMBINATION
3.1. Transfer. Subject to compliance with Section 9, 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 principal office of the Company referred to in Section 2.1
or the office or agency designated by the Company pursuant to Section 12,
together with a written assignment of this Warrant substantially in the form of
Exhibit B hereto duly executed by the Holder or its agent or attorney and if
such transfer is not to be made pursuant to Section 13, funds sufficient to pay
any transfer taxes payable upon the making of such transfer. Upon such
surrender and, if required, such payment, the Company shall, subject to Section
9, execute and deliver a new Warrant or Warrants in the name(s) of the assignee
or assignees and in the denomination(s) specified in such instrument of
assignment, and shall issue to the assignor a new Warrant evidencing the
portion of this Warrant not so assigned, and this Warrant shall promptly be
cancelled. A Warrant, if properly assigned in compliance with Section 9, may
be exercised by a new Holder for the purchase of shares of Common Stock without
having a new Warrant issued. If requested by the Company, a new Holder shall
acknowledge in writing, in form reasonably satisfactory to the Company, such
Holder's continuing obligation under Section 9.
3.2. Division and Combination. Subject to Section 9, this Warrant may
be divided or combined with other Warrants upon presentation hereof at the
aforesaid office or agency of the Company, together with a written notice
specifying the names and denominations in which new Warrants are to be issued,
signed by the Holder or its agent or attorney. Subject to compliance with
Section 3.1 and with Section 9, as to any transfer which may be involved in such
division or combination, the Company shall execute and deliver a new Warrant or
Warrants in exchange for the Warrant or Warrants to be divided or combined in
accordance with such notice.
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3.3. Expenses. The Company shall prepare, issue and deliver at its own
expense (other than transfer taxes) the new Warrant or Warrants under this
Section 3.
3.4. Maintenance of Books. The Company agrees to maintain, at its
aforesaid office or agency, books for the registration and the registration of
transfer of the Warrants.
4. ADJUSTMENTS
The number of shares of Common Stock for which this Warrant is
exercisable, or the price at which such shares may be purchased upon exercise
of this Warrant, shall be subject to adjustment from time to time as set forth
in this Section 4. The Company shall give the Holder notice of any event
described below which requires an adjustment pursuant to this Section 4 at the
time of such event.
4.1. Stock Dividends, Subdivisions and Combinations.If at any time the
Company shall:
(a) take a record of the holders of its Common Stock for the
purpose of entitling them to receive a dividend payable in, or other
distribution of, Additional Shares of Common Stock,
(b) subdivide its outstanding shares of Common Stock into a
larger number of shares of Common Stock, or
(c) combine its outstanding shares of Common Stock into a
smaller number of shares of Common Stock, by a reverse stock split or
otherwise,
then (i) the number of shares of Common Stock for which this Warrant is
exercisable immediately after the occurrence of any such event shall be
adjusted to equal the number of shares of Common Stock which a record holder of
the same number of shares of Common Stock for which this Warrant is exercisable
immediately prior to the occurrence of such event would own or be entitled to
receive after the happening of such event, and (ii) the Current Warrant Price
shall be adjusted to equal (A) the Current Warrant Price multiplied by the
number of shares of Common Stock for which this Warrant is exercisable
immediately prior to the adjustment divided by (B) the number of shares for
which this Warrant is exercisable immediately after such adjustment.
4.2. Certain Other Distributions. If at any time the Company shall
take a record of the holders of its Common Stock for the purpose of entitling
them to receive any dividend or other distribution of:
(a) cash;
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(b) any evidences of its indebtedness, any shares of its stock or
any other securities or property of any nature whatsoever (other than
cash, Convertible Securities or Additional Shares of Common Stock); or
(c) any warrants or other rights to subscribe for or purchase
any evidences of its indebtedness, any shares of its stock or any
other securities or property of any nature whatsoever (other than
cash, Convertible Securities or Additional Shares of Common Stock);
and the Holder of this Warrant has not received a payment on behalf of such
dividend or distribution pursuant to Section 16 hereof, then (i) the number of
shares of Common Stock for which this Warrant is exercisable shall be adjusted
to equal the product obtained by multiplying the number of shares of Common
Stock for which this Warrant is exercisable immediately prior to such
adjustment by a fraction (A) the numerator of which shall be the Current Market
Price per share of Common Stock at the date of taking such record and (B) the
denominator of which shall be such Current Market Price per share of Common
Stock, minus the amount allocable to one share of Common Stock of (x) any such
cash so distributable and (y) the fair value (as determined in good faith by
the Board of Directors of the Company and, if requested by the Holder,
supported by an opinion from an investment banking firm of recognized national
standing reasonably acceptable to the Majority Holders) of any and all such
evidences of indebtedness, shares of stock, other securities or property or
warrants or other subscription or purchase rights so distributable, and (ii)
the Current Warrant Price shall be adjusted to equal (A) the Current Warrant
Price multiplied by the number of shares of Common Stock for which this Warrant
is exercisable immediately prior to the adjustment divided by (B) the number of
shares for which this Warrant is exercisable immediately after such adjustment.
A reclassification of the Common Stock (other than a change in par value, or
from par value to no par value or from no par value to par value) into shares
of Common Stock and shares of any other class of stock shall be deemed a
distribution by the Company to the holders of its Common Stock of such shares
of such other class of stock within the meaning of this Section 4.2 and, if the
outstanding shares of Common Stock shall be changed into a larger or smaller
number of shares of Common Stock as a part of such reclassification, such
change shall be deemed a subdivision or combination, as the case may be, of the
outstanding shares of Common Stock within the meaning of Section 4.1.
4.3. Issuance of Additional Shares of Common Stock. (a) In the event
the Company shall issue or sell any Additional Shares of Common Stock, other
than Permitted Issuances, for a consideration per Additional Share of Common
Stock less than the greater of the Current Warrant Price and the Current Market
Price, then the Current Warrant Price shall be reduced to the lower of the
prices calculated as follows:
(1) by dividing (A) an amount equal to the sum of (x) the number of
Fully Diluted Outstanding shares of Common Stock immediately prior to such
issue or sale multiplied by the then existing Current Warrant Price plus (y) the
aggregate consideration, if any, received
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by the Company upon such issue or sale, by (B) the total number of Fully
Diluted Outstanding shares of Common Stock outstanding immediately after such
issue or sale; and
(2) by multiplying the then existing Current Warrant Price by a
fraction the numerator of which shall be the sum of (x) the number of Fully
Diluted Outstanding shares of Common Stock immediately prior to such issue or
sale multiplied by the Current Market Price per share of Common Stock
immediately prior to such issue or sale plus (y) the consideration received by
the Company upon such issue or sale, and the denominator of which shall be the
total number of Fully Diluted Outstanding shares of Common Stock immediately
after such issue or sale multiplied by the Current Market Price per share of
Common Stock immediately prior to such issue or sale.
For purposes of this subsection (a), the date as of which the Current
Market Price per share of Common Stock shall be computed shall be the earlier
of the date upon which the Company shall (i) enter into a firm contract for the
issuance of such shares or (ii) issue such shares.
Upon any adjustment of the Current Warrant Price as provided in this
Section 4.3(a), the Holder shall thereafter be entitled to purchase, at the
Current Warrant Price resulting from such adjustment, the number of shares of
Common Stock (calculated to the nearest 1/100th of a share) obtained by
multiplying the Current Warrant Price in effect immediately prior to such
adjustment by the number of shares of Common Stock purchasable hereunder
immediately prior to such adjustment and dividing the product thereof by the
Current Warrant Price resulting from such adjustment.
(b) The provisions of this Section 4.3 shall not apply to any issuance
of Additional Shares of Common Stock for which an adjustment is provided under
Section 4.1 or 4.2. No adjustment shall be made under this Section 4.3 upon
the issuance of any Additional Shares of Common Stock which are issued pursuant
to the exercise of any warrants or other subscription or purchase rights or
pursuant to the exercise of any conversion or exchange rights in any Convertible
Securities, if any such adjustment shall previously have been made upon the
issuance of such warrants or other rights or upon the issuance of such
Convertible Securities (or upon the issuance of any warrant or other rights
therefor) pursuant to Section 4.4 or Section 4.5.
4.4. Issuance of Warrants or Other Rights. Except with respect to
Permitted Issuances and distributions on behalf of which a payment is made to
the Holder of this Warrant pursuant to Section 16 hereof, if at any time the
Company shall take a record of the holders of its Common Stock for the
purpose of entitling them to receive a distribution of, or shall in any manner
(whether directly or by assumption in a merger in which the Company is the
surviving corporation) issue or sell, any warrants (other than the Warrants) or
other rights to subscribe for or purchase any Additional Shares of Common Stock
or any Convertible Securities, whether or not the rights to exchange or convert
thereunder are immediately exercisable, and the price per share for which Common
Stock is issuable upon the exercise of such warrants or other rights or
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upon conversion or exchange of such Convertible Securities shall be less than
the greater of the Current Warrant Price and the Current Market Price in effect
immediately prior to the time of such distribution, issue or sale, then the
number of shares of Common Stock for which this Warrant is exercisable and the
Current Warrant Price shall be adjusted as provided in Section 4.3(a) on the
basis that (i) the maximum number of Additional Shares of Common Stock issuable
pursuant to all such warrants or other rights or necessary to effect the
conversion or exchange of all such Convertible Securities shall be deemed to
have been issued and outstanding, (ii) the price per share for such Additional
Shares of Common Stock shall be deemed to be the lowest price per share at
which such Additional Shares of Common Stock are issuable to such holders, and
(iii) the Company shall have received all of the consideration, if any, payable
for such warrants or other rights as of the date of the actual issuance
thereof. No further adjustments of the number of shares of Common Stock for
which this Warrant is exercisable or of the Current Warrant Price shall be made
upon the actual issue of such Common Stock or of such Convertible Securities
upon exercise of such warrants or other rights or upon the actual issue of such
Common Stock upon such conversion or exchange of such Convertible Securities.
4.5. Issuance of Convertible Securities. Except with respect to
Permitted Issuances and distributions on behalf of which a payment is made to
the Holder of this Warrant pursuant to Section 16 hereof, if at any time the
Company shall take a record of the holders of its Common Stock for the purpose
of entitling them to receive a distribution of, or shall in any manner (whether
directly or by assumption in a merger in which the Company is the surviving
corporation) issue or sell, any Convertible Securities, whether or not the
rights to exchange or convert thereunder are immediately exercisable, and the
price per share for which Common Stock is issuable upon such conversion or
exchange shall be less than the greater of the Current Warrant Price and the
Current Market Price in effect immediately prior to the time of such issue or
sale, then the number of shares of Common Stock for which this Warrant is
exercisable and the Current Warrant Price shall be adjusted as provided in
Section 4.3(a) on the basis that (i) the maximum number of Additional Shares of
Common Stock issuable upon the conversion or exchange of all such Convertible
Securities shall be deemed to have been issued and outstanding, (ii) the price
per share of such Additional Shares of Common Stock shall be deemed to be the
lowest possible price in any range of prices at which such Additional Shares of
Common Stock are available to such holders, and (iii) the Company shall have
received all of the consideration payable therefor, if any, as of the date of
actual issuance of such Convertible Securities. No further adjustment of the
number of shares of Common Stock for which this Warrant is exercisable or of the
Current Warrant Price shall be made under this Section 4.5 upon the issuance of
any Convertible Securities which are issued pursuant to the exercise of any
warrants or other subscription or purchase rights therefor, if any such
adjustment shall previously have been made upon the issuance of such warrants or
other rights pursuant to Section 4.4. No further adjustments of the number of
shares of Common Stock for which this Warrant is exercisable or of the Current
Warrant Price shall be made upon the actual issue of such Common Stock upon
conversion or exchange of such Convertible Securities and, if any issue or sale
of such Convertible Securities is made upon exercise of any warrant or other
right to subscribe for or to purchase or any warrant or other right to purchase
any such Convertible Securities for which
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adjustments thereof have been or are to be made pursuant to other provisions of
this Section 4, no further adjustments shall be made by reason of such issue or
sale.
4.6. Superseding Adjustment. If, at any time after any adjustment of
the number of shares of Common Stock for which this Warrant is exercisable
shall have been made pursuant to Section 4.4 or Section 4.5 as the result of any
issuance of warrants, rights or Convertible Securities, and either
(a) such warrants or rights, or the right of conversion or
exchange in such other Convertible Securities, shall expire, and all
or a portion of such warrants or rights, or the right of conversion or
exchange with respect to all or a portion of such other Convertible
Securities, as the case may be, shall not have been exercised, or
(b) the consideration per share for which shares of Common Stock
are issuable pursuant to such warrants or rights, or such other
Convertible Securities, shall be increased or decreased by virtue of
provisions therein contained,
then such previous adjustment shall be rescinded and annulled and the
Additional Shares of Common Stock which were deemed to have been issued by
virtue of the computation made in connection with the adjustment so rescinded
and annulled shall no longer be deemed to have been issued by virtue of such
computation. Thereupon, a recomputation shall be made of the effect of such
rights or options or other Convertible Securities on the then outstanding
Warrants, but not on any then outstanding Warrant Stock, on the basis of
(c) treating the number of Additional Shares of Common Stock or
other property, if any, theretofore actually issued or issuable
pursuant to the previous exercise of any such warrants or rights or any
such right of conversion or exchange, as having been issued on the date
or dates of any such exercise and for the consideration actually
received and receivable therefor, and
(d) treating any such warrants or rights or any such other
Convertible Securities which then remain outstanding as having been
granted or issued immediately after the time of such increase or
decrease of the consideration per share for which shares of Common
Stock or other property are issuable under such warrants or rights or
other Convertible Securities.
4.7. Other Provisions Applicable to Adjustments Under This Section.
The following provisions shall be applicable to the making of adjustments
provided for in this Section 4:
(a) Computation of Consideration. To the extent that any
Additional Shares of Common Stock or any Convertible Securities or any
warrants or other
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rights to subscribe for or purchase any Additional Shares of Common Stock or
any Convertible Securities shall be issued for cash consideration, the
consideration received by the Company therefor shall be the amount of the cash
received by the Company therefor, or, if such Additional Shares of Common
Stock or Convertible Securities are offered by the Company for subscription,
the subscription price, or, if such Additional Shares of Common Stock or
Convertible Securities are sold to underwriters or dealers for public offering
without a subscription offering, the public offering price (in any such case
subtracting any amounts paid or receivable for accrued interest or accrued
dividends, but not subtracting any compensation, discounts or expenses paid or
incurred by the Company for and in the underwriting of, or otherwise in
connection with, the issuance thereof). To the extent that such issuance
shall be for a consideration other than cash, then, except as herein otherwise
expressly provided, the amount of such consideration shall be deemed to be the
fair value of such consideration at the time of such issuance as determined in
good faith by the Board of Directors of the Company. In case any Additional
Shares of Common Stock or any Convertible Securities or any warrants or other
rights to subscribe for or purchase such Additional Shares of Common Stock or
Convertible Securities shall be issued in connection with any merger in which
the Company issues any securities, the amount of consideration therefor shall
be deemed to be the fair value, as determined in good faith by the Board of
Directors of the Company, of such portion of the assets and business of the
nonsurviving corporation as such Board in good faith shall determine to be
attributable to such Additional Shares of Common Stock, Convertible
Securities, warrants or other rights, as the case may be. The consideration
for any Additional Shares of Common Stock issuable pursuant to any warrants or
other rights to subscribe for or purchase the same shall be the consideration
received by the Company for issuing such warrants or other rights plus the
additional consideration payable to the Company upon exercise of such warrants
or other rights. The consideration for any Additional Shares of Common Stock
issuable pursuant to the terms of any Convertible Securities shall be the
consideration, if any, received by the Company for issuing warrants or other
rights to subscribe for or purchase such Convertible Securities, plus the
consideration paid or payable to the Company in respect of the subscription
for or purchase of such Convertible Securities, plus the additional
consideration, if any, payable to the Company upon the exercise of the right
of conversion or exchange in such Convertible Securities. In case of the
issuance at any time of any Additional Shares of Common Stock or Convertible
Securities in payment or satisfaction of any dividends upon any class of stock
other than Common Stock, the Company shall be deemed to have received for such
Additional Shares of Common Stock or Convertible Securities a consideration
equal to the amount of such dividend so paid or satisfied.
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(b) When Adjustments to Be Made. The adjustments required by
this Section 4 shall be made whenever and as often as any specified
event requiring an adjustment shall occur, except that any adjustment
of the number of shares of Common Stock for which this Warrant is
exercisable that would otherwise be required may be postponed (except
in the case of a subdivision or combination of shares of the Common
Stock, as provided for in Section 4.1) up to, but not beyond the date
of exercise if such adjustment either by itself or with other
adjustments not previously made adds or subtracts less than 1% of the
shares of Common Stock for which this Warrant is exercisable
immediately prior to the making of such adjustment. Any adjustment
representing a change of less than such minimum amount (except as
aforesaid) which is postponed shall be carried forward and made upon
the earlier of (i) the date upon which such adjustment, together with
other adjustments required by this Section 4 and not previously made,
would result in a minimum adjustment, and (ii) the date of exercise.
For the purpose of any adjustment, any specified event shall be deemed
to have occurred at the close of business on the date of its
occurrence.
(c) Fractional Interests. In computing adjustments under this
Section 4, fractional interests in Common Stock shall be taken into
account to the nearest 1/10th of a share.
(d) When Adjustment Not Required. If the Company shall take a
record of the holders of its Common Stock for the purpose of entitling
them to receive a dividend or distribution or subscription or purchase
rights and shall, thereafter and before the distribution to
stockholders thereof, legally abandon its plan to pay or deliver such
dividend, distribution, subscription or purchase rights, then
thereafter no adjustment shall be required by reason of the taking of
such record and any such adjustment previously made in respect thereof
shall be rescinded and annulled.
(e) Escrow of Warrant Stock. If after any property becomes
distributable pursuant to this Section 4 by reason of the taking of any
record of the holders of Common Stock, but prior to the occurrence of
the event for which such record is taken, the Holder exercises this
Warrant, any Additional Shares of Common Stock issuable and other
property distributable upon exercise by reason of such adjustment shall
be held in escrow for the Holder by the Company to be issued to the
Holder upon and to the extent that the event actually takes place, upon
payment of the then Current Warrant Price. Notwithstanding any other
provision to the contrary herein, if the event for which such record
was taken fails to occur or is rescinded, then such escrowed shares
shall be cancelled by the Company and escrowed property returned.
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(f) Challenge to Good Faith Determination. Whenever the Board
of Directors of the Company shall be required to make a determination
in good faith of the fair value of any item under this Section 4, such
determination may be challenged in good faith by the Majority Holders,
and any dispute shall be resolved by an investment banking firm of
recognized national standing selected by the Company and acceptable to
the Majority Holders.
4.8. Reorganization, Reclassification, Liquidation, Dissolution,
Merger, Consolidation or Disposition of Assets. In case the Company shall
reorganize its capital, reclassify its capital stock, liquidate its assets,
dissolve, consolidate or merge with or into another corporation (where the
Company is not the surviving corporation or where there is a change in or
distribution with respect to the Common Stock of the Company), or sell, transfer
or otherwise dispose of all or substantially all its property, assets or
business to another corporation or other entity (hereinafter, a
"Reorganization") and, pursuant to the terms of such Reorganization, shares of
common stock of the successor or acquiring corporation, or any cash, shares of
stock or other securities or property of any nature whatsoever (including
warrants or other subscription or purchase rights) in addition to or in lieu of
common stock of the successor or acquiring corporation ("Other Property"), are
to be received by or distributed to the holders of Common Stock of the Company,
then the Holder shall have the right following the effectiveness of such
Reorganization to receive, upon exercise of such Warrant, or, in the case of a
liquidation of assets or a dissolution to receive, upon such liquidation or
dissolution, without taking any further action, the number of shares of common
stock of the successor or acquiring corporation or of the Company, if it is the
surviving corporation, and Other Property receivable upon or as a result of such
Reorganization by a holder of the number of shares of Common Stock for which
this Warrant is exercisable immediately prior to such event (without regard to
the number of shares of Common Stock available or set aside for issuance upon
such exercise). In case of any such Reorganization, the successor or acquiring
corporation (if other than the Company) shall expressly assume the due and
punctual observance and performance of each and every covenant and condition of
this Warrant to be performed and observed by the Company and all the obligations
and liabilities hereunder, subject to such appropriate modifications as are
satisfactory to the Holder in order to provide for adjustments of shares of the
Common Stock for which this Warrant is exercisable which shall be as nearly
equivalent as practicable to the adjustments provided for in this Section 4. For
purposes of this Section 4.8 "common stock of the successor or acquiring
corporation" shall include stock of such corporation of any class which is not
preferred as to dividends or assets over any other class of stock of such
corporation and which is not subject to redemption and shall also include any
evidences of indebtedness, shares of stock or other securities which are
convertible into or exchangeable for any such stock, either immediately or upon
the arrival of a specified date or the happening of a specified event and any
warrants or other rights to subscribe for or purchase any such stock. The
foregoing provisions of this Section 4.8 shall similarly apply to successive
Reorganizations.
4.9. Other Action Affecting Common Stock. In case at any time or from
time to time the Company shall take any action in respect of its Common Stock,
other than any action
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described in this Section 4 for which a specific adjustment is provided, then,
unless such action will not have a materially adverse effect upon the rights
of the Holder, the number of shares of Common Stock or other stock for which
this Warrant is exercisable and/or the purchase price thereof shall be
adjusted in such manner as may be equitable in the circumstances.
4.10. Certain Limitations. Notwithstanding anything herein to the
contrary, the Company agrees not to enter into any transaction which, by
reason of any adjustment hereunder, would cause the Current Warrant Price to be
less than the par value per share of Common Stock.
5. NOTICES TO WARRANTHOLDERS
5.1. Notice of Adjustments. Whenever the number of shares of Common
Stock or the class or type of stock or other property for which this Warrant is
exercisable, or whenever the price at which a share of such Common Stock may be
purchased upon exercise of this Warrant, shall be adjusted pursuant to Section
4, the Company shall forthwith prepare a certificate to be executed by the chief
financial officer of the Company setting forth, in reasonable detail, the event
requiring the adjustment and the method by which such adjustment was calculated
(including a description of the basis on which the Board of Directors of the
Company determined the fair value of any evidences of indebtedness, shares of
stock, other securities or property or warrants or other subscription or
purchase rights referred to in Section 4.2 or 4.7(a)), specifying the number of
shares of Common Stock for which this Warrant is exercisable and (if such
adjustment was made pursuant to Section 4.8 or 4.9) describing the number and
kind of any other shares of stock or Other Property for which this Warrant is
exercisable, and any change in the purchase price or prices thereof, after
giving effect to such adjustment or change. The Company shall promptly cause a
signed copy of such certificate to be delivered to the Holder in accordance with
Section 17.2. The Company shall keep at its office or agency designated
pursuant to Section 12 copies of all such certificates and cause the same to be
available for inspection at said office during normal business hours by the
Holder or any prospective purchaser of a Warrant designated by the Holder.
5.2. Notice of Certain Corporate Action. The Holder shall be entitled
to the same rights to receive notice of corporate action as any holder of
Common Stock.
6. NO IMPAIRMENT
The Company shall not by any action including, without limitation,
amending its certificate 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 actions as may be necessary or appropriate to protect the rights of the
Holder against impairment. Without limiting the generality of the foregoing,
the Company will (a) not increase the par value of any shares of Common Stock
receivable upon the exercise of this Warrant above the Current Warrant
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Price immediately prior to such increase in par value, (b) take all such action
as may be necessary or appropriate 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 necessary to
enable the Company to perform its obligations under this Warrant.
Upon the request of the Holder, the Company will at any time during
the period this Warrant is outstanding acknowledge in writing, in form
satisfactory to the Holder, the continuing validity of this Warrant and the
obligations of the Company hereunder.
7. RESERVATION AND AUTHORIZATION OF COMMON STOCK; REGISTRATION WITH OR
APPROVAL OF ANY GOVERNMENTAL AUTHORITY
From and after the earlier of (i) May 31, 1998 or (ii) the approval by
the shareholders of the Company of an increase in the number of authorized
shares of Common Stock as contemplated in the Unit Purchase Agreement, the
Company shall at all times reserve and keep available for issue upon the
exercise of warrants such number of its authorized but unissued shares
of Common Stock as will be sufficient to permit the exercise in full of all
outstanding Warrants. If at any time from and after the date referred to above
the number of authorized but unissued shares of Common Stock shall not be
sufficient to permit the exercise in full of all outstanding Warrants and Other
Warrants, the Company will take such corporate action as may, in the opinion of
its counsel, be necessary to increase its authorized but unissued shares of
Common Stock to such number of shares as shall be sufficient for such purpose,
including, without limitation, taking appropriate board action, recommending
such an increase to the holders of Common Stock, holding shareholders meetings,
soliciting votes and proxies in favor of such increase to obtain the requisite
shareholder approval and upon such approval, the Company shall reserve and keep
available such additional shares solely for the purpose of permitting the
exercise of Warrants or Other Warrants.
All shares of Common Stock which shall be so issuable, when issued
upon exercise of any Warrant and payment therefor in accordance with the terms
of such Warrant, shall be duly and validly issued, fully paid and
nonassessable and free and clear of any liens, claims and restrictions (other
than as provided herein). Except as provided in this Warrant, no stockholder of
the Company has or shall have any preemptive rights to subscribe for such shares
of Common Stock.
Before taking any action which would result in an adjustment in the
number of shares of Common Stock or the type of consideration for which this
Warrant is exercisable or in the Current Warrant Price, the Company shall obtain
all such authorizations or exemptions thereof, or consents thereto, as may be
necessary from any public regulatory body or bodies having jurisdiction thereof.
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If any shares of Common Stock required to be reserved for issuance upon
exercise of Warrants require registration or qualification with any
governmental authority under any federal or state law (otherwise than as
provided in Section 9) before such shares may be so issued, the Company will in
good faith and as expeditiously as possible and at its expense endeavor to cause
such shares to be duly registered.
8. TAKING OF A RECORD; STOCK AND WARRANT TRANSFER BOOKS
In the case of all dividends or other distributions by the Company to
the holders of its Common Stock with respect to which any provision of Section 4
refers to the taking of a record of such holders, the Company will in each
such case take such a record and will take such record as of the close of
business on a Business Day. The Company will not at any time, except upon
dissolution, liquidation or winding up of the Company, close its stock transfer
books or Warrant transfer books so as to result in preventing or delaying the
exercise or transfer of any Warrant.
9. RESTRICTIONS ON TRANSFERABILITY
The Warrants and the Warrant Stock shall not be transferred,
hypothecated or assigned before satisfaction of the conditions specified in
this Section 9. The Holder, by acceptance of this Warrant, agrees to be bound by
the provisions of this Section 9.
9.1. Restrictive Legends. (a) Except as otherwise provided in this
Section 9, each certificate for Warrant Stock initially issued upon the exercise
of this Warrant, and each certificate for Warrant Stock 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 not been
registered under the Securities Act of 1933, as amended, or under the
securities or blue sky laws of any state and are subject to the
conditions specified in a certain Warrant dated _______ __, 199_,
originally issued by Code Alarm Inc. The shares represented by this
certificate may not be sold, or otherwise transferred, in the absence
of such registration or an exemption therefrom under such Act and under
any such applicable state laws, or in violation of the provisions of
the Warrant. A copy of the form of said Warrant is on file with the
Secretary of Code Alarm Inc. The holder of this certificate, by
acceptance of this certificate, agrees to be bound by the provisions of
such Warrant."
"The shares represented by this certificate are subject to the
terms and conditions of a Registration Rights Agreement, dated as of
October __, 1997."
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(b) Except as otherwise provided in this Section 9, each Warrant
shall be stamped or otherwise imprinted with legends in substantially the
following form:
"This Warrant and the securities represented hereby have not
been registered under the Securities Act of 1933, as amended, or under
the securities or blue sky laws of any state and may not be sold, or
otherwise transferred, in the absence of such registration or an
exemption therefrom under such Act and under any such applicable state
laws, or in violation of the provisions of this Warrant."
"This Warrant and the securities represented hereby are subject
to the terms and conditions of a Registration Rights Agreement, dated
as of October __, 1997."
9.2. Notice of Proposed Transfers; Requests for Registration. Prior
to any Transfer or attempted Transfer of any Warrants or any shares of
Restricted Common Stock, the Holder of such Warrants or Restricted Common Stock
shall deliver to the Company either a written opinion reasonably acceptable to
the Company of Independent Counsel addressed to the Company or a no-action
letter from the Commission to the effect that the proposed Transfer of such
Warrants or such Restricted Common Stock may be effected without registration
under the Securities Act and applicable state securities or blue sky laws. After
delivery of the written opinion or the no-action letter to the Company, such
Holder shall thereupon be entitled to Transfer such Warrants or such Restricted
Common Stock. Each certificate, if any, evidencing such shares of Restricted
Common Stock issued upon such Transfer shall bear the restrictive legend set
forth in Section 9.1(a), and each Warrant issued upon such Transfer shall bear
the restrictive legend set forth in Section 9.1(b), unless in the written
opinion of Independent Counsel addressed to the Company such legend is not
required in order to ensure compliance with the Securities Act.
9.3. No Transfer to Directed Electronics, Inc. The Holder shall not
sell or otherwise transfer any Warrants to DEI, any affiliate of DEI, Mr.
Xxxxxxx Xxxx, the president of DEI, any entity which, to the knowledge of the
Holder, is controlled by Xx. Xxxx, or any person who, to the knowledge of the
Holder, is a member of the immediate family (as such term is defined in Rule
16a-1 promulgated under the Exchange Act) of Xx. Xxxx.
9.4. Termination of Restrictions. Notwithstanding the foregoing
provisions of Section 9, the restrictions imposed by this Section upon the
transferability of the Warrants, the Warrant Stock and the Restricted Common
Stock (or Common Stock issuable upon the exercise of the Warrants) and the
legend requirements of Section 9.1 shall terminate as to any particular Warrant
or share of Warrant Stock or Restricted Common Stock (or Common Stock issuable
upon the exercise of the Warrants) (i) when and so long as such security shall
have been effectively registered under the Securities Act and disposed of
pursuant thereto, or (ii) when the Company shall have delivered to the Holder or
Holders of Warrants, Warrant Stock or Restricted
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Common Stock the written opinion of Independent Counsel stating that such
legend is not required in order to ensure compliance with the Securities Act.
Whenever the restrictions imposed by Section 9 shall terminate as to this
Warrant, as hereinabove provided, the Holder hereof shall be entitled to
receive from the Company, at the expense of the Company, a new Warrant bearing
the following legend in place of the first restrictive legend set forth
hereon:
"THE RESTRICTIONS ON TRANSFERABILITY OF THE WITHIN WARRANT CONTAINED
IN SECTION 9 HEREOF TERMINATED ON ____________, 199_, AND ARE OF NO
FURTHER FORCE AND EFFECT."
All Warrants issued upon registration of transfer, division or
combination of, or in substitution for, any Warrant or Warrants entitled to bear
such legend shall have a similar legend endorsed thereon. Whenever the
restrictions imposed by this Section shall terminate as to any share of
Restricted Common Stock, as hereinabove provided, the Holder thereof shall be
entitled to receive from the Company, at the Company's expense, a new
certificate representing such Common Stock not bearing the restrictive legend
set forth in Section 9.1(a).
10. SUPPLYING INFORMATION
The Company shall cooperate with each Holder of a Warrant and each
Holder of Restricted Common Stock in supplying such information as may be
reasonably requested by such Holder or reasonably necessary for such Holder to
complete and file any information reporting forms presently or hereafter
required by the Commission as a condition to the availability of an exemption
from the Securities Act for the sale of any Warrant or Restricted Common Stock.
11. LOSS OR MUTILATION
Upon receipt by the Company from the Holder of evidence reasonably
satisfactory to it of the ownership of and the loss, theft, destruction or
mutilation of this Warrant and indemnity reasonably satisfactory to it (it
being understood that the written indemnity agreement of Pegasus Partners, L.P.
or Pegasus Related Partners, L.P. shall be sufficient indemnity) and in case of
mutilation upon surrender and cancellation hereof, the Company will execute and
deliver in lieu hereof a new Warrant of like tenor to the Holder; provided, in
the case of mutilation, no indemnity shall be required if this warrant in
identifiable form is surrendered to the Company for cancellation.
12. OFFICE OF THE COMPANY
As long as any of the Warrants remain outstanding, the Company shall
maintain an office or agency (which may be the principal executive offices of
the Company) where the
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warrants may be presented for exercise, registration of transfer, division or
combination as provided in this Warrant.
13. REPURCHASE BY THE COMPANY OF WARRANT AND WARRANT STOCK
13.1. Obligation to Repurchase Warrant and Warrant Stock. (a) At any
time and from time to time, at the election of the Holder, after the date
which is three years and six months after the Closing Date, the Holder may, by
notice to the Company (the "Put Notice"), demand repurchase of this Warrant, in
whole or in part, and/or all or part of the Holder's shares of Warrant Stock
which are Restricted Common Stock. Subject to the provisions of Section 13.2,
the Company shall, on the date (not less than 30 days after the date of the Put
Notice) designated in such Put Notice, repurchase from the Holder all or the
portion of this Warrant and/or the number of shares of such Holder's Warrant
Stock designated in the Put Notice for an amount determined by multiplying (x)
the number of shares of Warrant Stock and/or the Common Stock subject to this
Warrant or portion thereof being repurchased by (y) the Current Market Price per
share of Common Stock determined as of the date of the repurchase demand and, in
the event of repurchase of all or a portion of this Warrant, deducting from the
product thereby obtained the Current Warrant Price times the number of shares of
Common Stock subject to this Warrant (or portion thereof) being repurchased.
(b) Notwithstanding the provisions of Section 13.1(a), if, at any time
during the period between the date on which the Holder shall have delivered a
Put Notice and the date of repurchase by the Company pursuant thereto, a
Reorganization shall occur and the consideration received or receivable by
stockholders in connection with such Reorganization shall consist solely of
cash, then the Holder shall (whether or not the Holder shall have previously
surrendered its Warrant and/or Warrant Stock for repurchase by the Company
pursuant to this Section 13) be entitled to receive, on the date of such
repurchase, the higher of (i) the amount payable to the Holder as determined
pursuant to Section 13.1(a) and (ii) an amount equal to the amount of cash the
Holder would have received upon the occurrence of such Reorganization had the
Holder's Warrant (or the portion thereof being repurchased) been fully exercised
immediately prior thereto less, in the event of a repurchase of all or a portion
of this Warrant, the purchase price payable at such time for the purchase of the
shares of Common Stock then subject to the Holder's Warrant (or the portion
thereof being repurchased).
(c) The Company shall not be obligated under this Section 13.1 to
repurchase any Warrant or portion thereof and/or issued Warrant Stock if the
Company is in default under any agreement or instrument evidencing the Company's
or any of its Subsidiaries' indebtedness for borrowed money, and such default
has not been waived, or if and to the extent such a repurchase (i) would
cause an event of default to exist by reason of such repurchase, which event of
default has not been waived, with respect to any such agreement or would violate
any provision of any such agreement or instrument, or (ii) would be in violation
of applicable law ("Restrictions"), in any such case as determined by an opinion
of counsel to the Company reasonably acceptable to the Holder; provided,
however, that the Company shall use its
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reasonable best efforts to have any such Restriction either waived or
terminated (including, without limitation, by obtaining refinancing for any
such indebtedness). In the event that, following receipt of a Put Notice, the
Company will not repurchase all or any portion of such Warrant and/or Warrant
Stock because of the existence of any Restriction, the Company shall, within
twenty (20) days of receipt of the Put Notice, so notify the Holder in writing,
setting forth the portion of the Warrant and/or Warrant Stock which will not be
repurchased and the Restrictions which apply, and deliver to the Holder a copy
of the opinion referred to in the prior sentence. In addition, in such event,
the Company shall thereafter, upon the request of the Holder, use its best
efforts to register the Warrant Stock and/or the Common Stock subject to this
Warrant, in accordance with the terms of the Registration Rights Agreement.
13.2. Payment of Repurchase Price. The purchase price for any
repurchase pursuant to Section 13.1 (the "Repurchase Price") shall be
determined pursuant to Section 13.1 and shall be payable in cash.
On the date of any repurchase of Warrants and/or Warrant Stock
pursuant to this Section 13, the Holder shall assign to the Company its Warrant
or portion thereof being repurchased and a certificate for the number of shares
of Warrant Stock being repurchased, as the case may be, without any
representation or warranty (other than that the Holder has good and marketable
title thereto, free and clear of liens, encumbrances and restrictions of any
kind), by the surrender of the Holder's Warrant and certificate for Warrant
Stock together with, in the case of Warrant Stock, instruments of transfer
reasonably acceptable to the Company, at the principal office of the Company
referred to in Section 2.1 against payment therefor of the Repurchase Price by,
at the option of the Holder, (i) wire transfer to an account in a bank located
in the United States designated by the Holder for such purpose or (ii) a
certified or official bank check payable to the order of the Holder. If less
than all of the Holder's Warrant is being repurchased, the Company shall,
pursuant to Section 3, cancel such Warrant and issue in the name of, and deliver
to, the Holder a new Warrant for the portion not being repurchased. If less
than all of the shares represented by a certificate for Warrant Stock are being
repurchased, the Company shall cancel such certificate and issue in the name of,
and deliver to, the Holder a new certificate for the number of shares of Warrant
Stock not being repurchased.
13.3. Right to Repurchase Warrant and Warrant Stock. (a) In the event
the Company exercises its rights to repurchase all of the outstanding Units and
the Common Stock for which Attached Warrants (as defined in the Unit Purchase
Agreement) have theretofore been exercised, pursuant to Section 8.01(b) of
the Unit Purchase Agreement, then, simultaneously therewith, the Company, at its
sole option, may repurchase not less than and not more than 95% of the
outstanding Warrants and 95% of the shares of Common Stock for which Warrants
have been exercised (other than shares of Common Stock which have been sold to a
Person that is not an affiliate or associate (as defined in Rule 405 promulgated
under the Securities Act) of the initial Holder ("Non-Repurchasable Stock")),
for an aggregate repurchase price equal to the amount determined by multiplying
(x) the sum of (1) 100% of the number of shares of Common Stock for which the
Warrants are then exercisable and (2) 100% of the number of shares for
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which the Warrants have theretofore been exercised (other than shares of
Non-Repurchasable Stock) by (y) the price per share of Common Stock which the
holders of Units would receive pursuant to Section 8.01(b) of the Unit Purchase
Agreement (assuming exercise of the Attached Warrants which are part of such
Units) and then deducting the aggregate exercise price of the Warrants to be
repurchased.
(b) Notice of repurchase pursuant to this Section 13.3 shall be given
by first class mail, postage prepaid, mailed not less than 10 nor more than 20
days prior to the repurchase date to each Holder's address as the same appears
on the books of the Company. Each such notice shall state: (i) the purchase
date; (ii) the portion of Warrants and the number of shares of Common Stock to
be purchased; (iii) the amount of the purchase price; and (iv) the place or
places where such Warrants and certificates for such shares of Common Stock are
to be surrendered for payment of the purchase price. Upon receipt of
any such notice, the Warrants being repurchased may not be exercised or
transferred and the Common Stock being repurchased may not be transferred,
unless the Company fails to make the repurchases on the terms set forth in its
notice.
(c) In the event only a portion of this Warrant is being repurchased
pursuant to this Section 13.3, the Holder shall surrender this Warrant to
the Company for cancellation on the repurchase date at the place specified in
the repurchase notice, and the Company shall thereupon issue to the Holder a
new Warrant evidencing the portion of this Warrant not so repurchased.
14. REGISTRATION RIGHTS
This Warrant is entitled to the benefits of the registration rights
provisions contained in the Registration Rights Agreement. The Company shall
keep a copy of the Registration Rights Agreement, and any amendments thereto, at
the office or agency designated by the Company pursuant to Section 12 and shall
furnish copies thereof to the Holder upon request.
15. LIMITATION OF LIABILITY
No provision hereof, in the absence of affirmative action by the
Holder to purchase shares of Common Stock, and no enumeration herein of the
rights or privileges of the Holder hereof, shall give rise to any liability of
the Holder for the purchase price of any Common Stock or as a stockholder of
the Company, whether such liability is asserted by the Company or by creditors
of the Company.
16. DIVIDENDS ON UNDERLYING COMMON STOCK
In the event that, at any time before the Charter Amendment (as defined
in the Unit Purchase Agreement) shall have (a) been approved and adopted by the
Company's
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stockholders, (b) been filed with the Department of Consumer and Industry
Services of the State of Michigan and (c) become effective, or at any time
after the Company shall have failed for any reason to issue Common Stock to
the Holder upon exercise of this Warrant or shall have failed to comply with
Section 7 hereof, the Company shall pay a dividend or make any other
distribution with respect to its Common Stock whether in the form of cash,
evidences of indebtedness, securities or other property (other than a Common
Stock dividend subject to the provisions of Section 4.1 or a dividend of
warrants or rights to purchase Common Stock subject to the provisions of
Section 4.2), then the Company shall pay to the Holder of this Warrant on the
date of payment of such dividend or other distribution, an amount in cash
equal to the number of shares of Common Stock issuable upon exercise of this
Warrant in full on the record date for such dividend or other distribution
(without regard to the number of shares of Common Stock available or set aside
for issuance upon such exercise) multiplied by the sum of (i) the amount of
cash and (ii) the fair value of any evidences of indebtedness, securities or
other property distributed with respect to each share of Common Stock. The
"fair value" of any such evidences of indebtedness, securities or other
property shall mean the fair market value thereof, as determined by the Board
of Directors in good faith, which good faith determination may be challenged
by the Holder in accordance with Section 4.7(f).
17. MISCELLANEOUS
17.1. Nonwaiver and Expenses. No course of dealing or any delay or
failure to exercise any right hereunder on the part of the Holder shall operate
as a waiver of such right or otherwise prejudice the Holder's rights, powers
or remedies. If the Company fails to make, when due, any payments provided
for hereunder, or fails to comply with any other provision of this Warrant, the
Company shall pay to the Holder such amounts as shall be sufficient to cover any
costs and expenses including, but not limited to, reasonable attorneys' fees,
including those of appellate proceedings, incurred by the Holder in collecting
any amounts due pursuant hereto or in otherwise enforcing any of its rights,
powers or remedies hereunder.
17.2. Notice Generally. All notices, demands, requests, or other
communications which may be or are required to be given, served, or sent by any
party to any other party pursuant to this Warrant shall be in writing and shall
be mailed by first-class, registered or certified mail, return receipt
requested, postage prepaid, or transmitted by hand delivery (including delivery
by courier), or facsimile transmission, addressed as follows:
(a) If to the Company:
Code Alarm Inc.
000 Xxxx Xxxxxxxx
Xxxxxxx Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxx Xxxxxxx and Xxxxx Xxxxxx
Facsimile: (000) 000-0000
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with a copy to:
Xxxxxx Xxxxxxxx & Xxxxxxx LLP
000 Xxxxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxx, Esq.
Facsimile: (000) 000-0000
(b) If to the Holder, at its last known address appearing on the books
of the Company maintained for such purpose.
Each party may designate by notice in writing a new address to which any
notice, demand, request or communication may thereafter be so given, served or
sent. Each notice, demand, request or communication shall be deemed to have
been duly given five business days after being deposited in the mail, postage
prepaid, if mailed; when delivered by hand, if personally delivered; or upon
receipt, if sent by facsimile (followed by a confirmation copy sent by either
overnight or two (2) day courier).
17.3. Indemnification. The Company agrees to indemnify and hold
harmless the Holder, its officers, directors, employees, agents, and attorneys
from and against any liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, claims, costs, attorneys' fees, expenses and
disbursements of any kind which may be imposed upon, incurred by or asserted
against the Holder relating to or arising out of any litigation to which the
Holder is made a party in its capacity as a stockholder or warrantholder of the
Company; provided, however, that the Company will not be liable hereunder to the
extent that any liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, claims, costs, attorneys' fees, expenses or disbursements are
found in a judgment by a court to have resulted from (i) the Holder's gross
negligence or willful misconduct, (ii) actions or omissions taken or not taken
by the Holder in any capacity other than as a stockholder or warrantholder of
the Company or (iii) actions or omissions taken or not taken by the Holder
solely as a stockholder or warrantholder of the Company and for which
stockholders or warrantholders may be held liable under Michigan law.
17.4. Successors and Assigns. Subject to the provisions of Sections
3.1 and 9, (i) this Warrant and the rights evidenced hereby shall inure to the
benefit of and be binding upon the successors of the Company and the
successors and assigns of the Holder, and (ii) the provisions of this Warrant
are intended to be for the benefit of all Holders from time to time of this
Warrant, and shall be enforceable by any such Holder.
17.5. Amendment. The Warrants may be modified or amended or the
provisions thereof waived with the written consent of the Company and the
Holder.
17.6. Severability. Wherever possible, each provision of this Warrant
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision
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of this Warrant shall be prohibited by or invalid under applicable law, such
provision shall be ineffective to the extent of such prohibition or invalidity,
without invalidating the remainder of such provision or the remaining
provisions of this Warrant.
17.7. Headings. The headings used in this Warrant are for the
convenience of reference only and shall not, for any purpose, be deemed a part
of this Warrant.
17.8. Governing Law; Consent to Jurisdiction and Venue. In all
respects, including all matters of construction, validity and performance,
this Agreement and the obligations arising hereunder shall be governed by, and
construed and enforced in accordance with, the laws of the State of Michigan
applicable to contracts made and performed in such state, without regard to the
principles thereof regarding conflict of laws, and any applicable laws of the
United States of America. EACH OF THE COMPANY AND HOLDER CONSENTS TO PERSONAL
JURISDICTION, WAIVES ANY OBJECTION AS TO JURISDICTION OR VENUE, AND AGREES NOT
TO ASSERT ANY DEFENSE BASED ON LACK OF JURISDICTION OR VENUE, IN XXX XXXX XX XXX
XXXX, XXXXX XX XXX XXXX. Service of process on the Company or the Holder in any
action arising out of or relating to this Agreement shall be effective if mailed
to such party in accordance with the procedures and requirements set forth in
Section 17.2. Nothing herein shall preclude the Holder or the Company from
bringing suit or taking other legal action in any other jurisdiction.
17.9. Mutual Waiver of Jury Trial. BECAUSE DISPUTES ARISING IN
CONNECTION WITH COMPLEX FINANCIAL TRANSACTIONS ARE MOST QUICKLY AND ECONOMICALLY
RESOLVED BY AN EXPERIENCED AND EXPERT PERSON AND THE PARTIES WISH APPLICABLE
STATE AND FEDERAL LAWS TO APPLY (RATHER THAN ARBITRATION RULES), THE PARTIES
DESIRE THAT THEIR DISPUTES BE RESOLVED BY A JUDGE APPLYING SUCH APPLICABLE
LAWS. THEREFORE, TO ACHIEVE THE BEST COMBINATION OF THE BENEFITS OF THE
JUDICIAL SYSTEM AND OF ARBITRATION, THE PARTIES HERETO WAIVE ALL RIGHT TO TRIAL
BY JURY IN ANY ACTION, SUIT OR PROCEEDING BROUGHT TO ENFORCE OR DEFEND ANY
RIGHTS OR REMEDIES UNDER THIS WARRANT.
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IN WITNESS WHEREOF, the Company has caused this Warrant to be
duly executed by its duly authorized officer and its corporate seal to be
impressed hereon and attested by its Secretary or Assistant Secretary.
Dated: October __, 1997
CODE ALARM INC.
By:_______________________
Name:
Title:
Attest:
By:_______________________
Name:
Title:
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EXHIBIT A
SUBSCRIPTION FORM
[To be executed only upon exercise of Warrant]
The undersigned registered owner of this Warrant irrevocably
exercises this Warrant for the purchase of _______ shares of Common Stock of
CODE ALARM INC. and herewith makes payment therefor, all at the price and on
the terms and conditions specified in this Warrant and requests that
certificates for the shares of Common Stock hereby purchased (and any
securities or other property issuable upon such exercise) be issued in the name
of and delivered to __________________ whose address is
___________________________ and, if such shares of Common Stock shall not
include all of the shares of Common Stock issuable as provided in this Warrant,
that a new Warrant of like tenor and date for the balance of the shares of
Common Stock issuable hereunder be delivered to the undersigned.
_____________________________ (Name of Registered Owner)
_____________________________ (Signature of Registered Owner)
_____________________________ (Street Address)
_____________________________ (City) (State) (Zip Code)
NOTICE: The signature on this subscription must correspond with the name as
written upon the face of the within Warrant in every particular,
without alteration or enlargement or any change whatsoever.
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EXHIBIT B
ASSIGNMENT FORM
FOR VALUE RECEIVED the undersigned registered owner of this
Warrant hereby sells, assigns and transfers unto the Assignee named below all
of the rights of the undersigned under this Warrant, with respect to the number
of shares of Common Stock set forth below:
Name and Address of Assignee No. of Shares of Common Stock
and does hereby irrevocably constitute and appoint ______________
attorney-in-fact to register such transfer on the books of Code Alarm Inc.
maintained for the purpose, with full power of substitution in the premises.
Dated: ____________________________
Name: ____________________________
Signature: ________________________
Witness: __________________________
NOTICE: The signature on this assignment must correspond with the name
as written upon the face of the within Warrant in every
particular, without alteration or enlargement or any change
whatsoever.
