FORM OF FIRST CLOSING WARRANT
THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF THIS
WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
OR ANY STATE SECURITIES LAWS. THIS WARRANT AND THE COMMON STOCK ISSUABLE UPON
EXERCISE OF THIS WARRANT MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR
HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THIS
WARRANT UNDER SAID ACT AND ANY APPLICABLE STATE SECURITIES LAWS OR AN OPINION OF
COUNSEL REASONABLY SATISFACTORY TO GENERAL DEVICES, INC. THAT SUCH REGISTRATION
IS NOT REQUIRED.
GENERAL DEVICES, INC.
COMMON STOCK WARRANT
No. __ Issue Date:
GENERAL DEVICES, INC., a corporation organized under the laws of the State of
Delaware, hereby certifies that, for value received, _________________, or
assigns (the "Holder"), is entitled, subject to the terms set forth below, to
purchase from the Company (as defined herein) from and after the date hereof and
at any time or from time to time before 5:00 p.m., New York time, through the
close of business (New York time) on September 30, 2012 (the "Expiration Date"),
up to _______ fully paid and nonassessable shares of Common Stock of the
Company, par value $0.0001 per share ("Common Stock") at an exercise price of
$0.37883 per share, subject to adjustment hereunder (such exercise price, as
adjusted from time to time, the "Exercise Price"). As used herein the following
terms, unless the context otherwise requires, have the following respective
meanings:
(a) The term "Company" shall include General Devices, Inc. and any corporation
which shall succeed, or assume the obligations of, General Devices, Inc.
hereunder.
(b) The term "Common Stock" includes (a) the Company's Common Stock, par value
$0.0001 per share, and
(b) any other securities into which or for which any of the securities described
in clause (a) may be converted or exchanged pursuant to a plan of
recapitalization, reorganization, merger, sale of assets or otherwise.
(c) The term "Other Securities" refers to any stock (other than Common Stock)
and other securities of the Company or any other person (corporate or otherwise)
which the holder of the Warrant at any time shall be entitled to receive, or
shall have received, on the exercise of the Warrant, in lieu of or in addition
to Common Stock, or which at any time shall be issuable or shall have been
issued in exchange for or in replacement of Common Stock or Other Securities
pursuant to Section 3 or 4 or otherwise.
1. Exercise of Warrant.
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1.1 Number of Shares Issuable upon Exercise. From and after the date hereof
through and including the Expiration Date, the Holder shall be entitled to
receive, upon exercise of this Warrant in whole or in part, by delivery of an
original or fax copy of an exercise notice in the form attached hereto as
Exhibit A (the "Exercise Notice"), up to _______ shares of Common Stock of the
Company, subject to adjustment pursuant to Sections 4 and 5 (such number of
shares of Common Stock, as adjusted from time to time, the "Warrant Shares
Number").
1.2 Company Acknowledgment. The Company will, at the time of the exercise
of the Warrant, upon the request of the Holder hereof acknowledge in writing its
continuing obligation to afford to such Holder any rights to which such Holder
shall continue to be entitled after such exercise in accordance with the
provisions of this Warrant. If the Holder shall fail to make any such request,
such failure shall not affect the continuing obligation of the Company to afford
to such Holder any such rights.
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2. Procedure for Exercise.
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2.1 Delivery of Stock Certificates, etc. on Exercise. The Company agrees
that the shares of Common Stock purchased upon exercise of this Warrant shall be
deemed to be issued to the Holder as the record owner of such shares as of the
close of business on the date on which this Warrant shall have been surrendered
and payment made for such shares in accordance herewith. As soon as practicable
after the exercise of this Warrant in full or in part, and in any event within
three (3) business days thereafter, the Company at its expense (including the
payment by it of any applicable issue taxes) will cause to be issued in the name
of and delivered to the Holder, or as such Holder (upon payment by such Holder
of any applicable transfer taxes) may direct in compliance with applicable
securities laws, a certificate or certificates for the number of duly and
validly issued, fully paid and nonassessable shares of Common Stock (or Other
Securities) to which such Holder shall be entitled on such exercise.
2.2 Cash Exercise. Payment shall be made in cash or by certified or
official bank check payable to the order of the Company equal to the applicable
aggregate Exercise Price, for the number of shares of Common Stock (or Other
Securities) specified in such Exercise Notice (as such exercise number shall be
adjusted to reflect any adjustment in the total number of shares of Common Stock
(or Other Securities) issuable to the Holder per the terms of this Warrant) and
the Holder shall thereupon be entitled to receive the number of duly authorized,
validly issued, fully-paid and non-assessable shares of Common Stock (or Other
Securities) determined as provided herein.
2.3 Cashless Exercise. In lieu of payment of the Exercise Price as provided
above, the Holder may elect a cashless net exercise. In the case of such
cashless net exercise, the Holder shall surrender this Warrant for cancellation
and receive in exchange therefor the full number of duly authorized, validly
issued, fully paid and nonassessable shares of Common Stock (or Other
Securities) as is computed using the following formula:
X = Y * (A - B)
-----------
A
where:
X = the number of shares of Common Stock (or Other Securities) to be issued to
the Holder upon cashless exercise of this Warrant
Y = the total number of shares Common Stock (or Other Securities) covered by
this Warrant which the Holder has surrendered at such time for cashless exercise
(including both shares to be issued to the Holder upon cashless exercise of this
Warrant and shares to be cancelled as payment therefor)
A = the Current Market Value as of the business day on which the Holder
surrenders this Warrant to the Company
B = the Exercise Price then in effect under this Warrant at the time at which
the Holder surrenders this Warrant to the Company
For purposes of Rule 144 promulgated under the Securities Act of 1933, as
amended (the "Securities Act"), it is intended, understood and acknowledged that
the Common Stock (or Other Securities) issued in a cashless exercise transaction
shall be deemed to have been acquired by the Holder, and the holding period for
the Common Stock (or Other Securities) shall be deemed to have commenced, on the
date this Warrant was originally issued.
2.4 Limitation on Exercise. Notwithstanding anything herein to the
contrary, from and after the date on which the Company shall have registered the
Common Stock (or Other Securities) under the Securities Act, in no event shall
the Holder be entitled to exercise any portion of this Warrant in excess of that
portion of this Warrant upon exercise of which the sum of (i) the number of
shares of Common Stock (or Other Securities) beneficially owned by the Holder
and its Affiliates (other than shares of Common Stock (or Other Securities)
which may be deemed beneficially owned through the ownership of the unexercised
portion of the Warrant or the unexercised or unconverted portion of any other
security of the Holder subject to a limitation on conversion analogous to the
limitations contained herein) and (ii) the number of shares of Common Stock (or
Other Securities) issuable upon the exercise of the portion of this Warrant with
respect to which the determination of this proviso is
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being made, would result in beneficial ownership by the Holder and its
Affiliates of more than 4.99% of the then outstanding shares of Common Stock (or
Other Securities). As used herein, the term "Affiliate" means any person or
entity that, directly or indirectly through one or more intermediaries, controls
or is controlled by or is under common control with a person or entity, as such
terms are used in and construed under Rule 144 under the Securities Act. For
purposes of the proviso to the immediately preceding sentence, beneficial
ownership shall be determined in accordance with Section 13(d) of the Securities
Exchange Act of 1934, as amended, and Regulations 13D-G thereunder, except as
otherwise provided in clause (1) of such proviso. The Holder may waive the
limitations set forth herein by sixty-one (61) days written notice to the
Company.
3. Effect of Merger or Reorganization, etc.; Adjustment of Exercise Price.
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3.1 Adjustment for Merger or Reorganization, etc. If there shall occur any
reorganization, recapitalization, reclassification, consolidation or merger
involving the Company in which the Common Stock is converted into or exchanged
for securities, cash or other property, then, following any such reorganization,
recapitalization, reclassification, consolidation or merger, this Warrant shall
thereafter be exercisable in lieu of the Common Stock into which it was
exercisable prior to such event into the kind and amount of securities, cash or
other property which a holder of the number of shares of Common Stock of the
Company issuable upon exercise of this Warrant immediately prior to such
reorganization, recapitalization, reclassification, consolidation or merger
would have been entitled to receive pursuant to such transaction; and, in such
case, appropriate adjustment (as determined in good faith by the board of
directors of the Company (the "Board")) shall be made in the application of the
provisions of Section 3, 4 and 5 with respect to the rights and interests
thereafter of the Holders of this Warrant, to the end that the provisions set
forth in Section 3, 4 and 5 (including provisions with respect to changes in and
other adjustments of the Exercise Price) shall thereafter be applicable, as
nearly as reasonably may be, in relation to any securities or other property
thereafter deliverable upon the exercise of this Warrant.
3.2 Dissolution. In the event of any dissolution of the Company following
the transfer of all or substantially all of its properties or assets, the
Company, concurrently with any distributions made to holders of its Common
Stock, shall at its expense deliver or cause to be delivered to the Holder the
stock and other securities and property (including cash, where applicable)
receivable by the Holder of the Warrant pursuant to Section 3.1.
3.3 Continuation of Terms. Upon any reorganization, consolidation, merger
or transfer (and any dissolution following any transfer) referred to in this
Section 3, this Warrant shall continue in full force and effect and the terms
hereof shall be applicable to the shares of stock and other securities and
property receivable on the exercise of this Warrant after the consummation of
such reorganization, consolidation or merger or the effective date of
dissolution following any such transfer, as the case may be, and shall be
binding upon the issuer of any such stock or other securities, including, in the
case of any such transfer, the person acquiring all or substantially all of the
properties or assets of the Company, whether or not such person shall have
expressly assumed the terms of this Warrant. In the event this Warrant does not
continue in full force and effect after the consummation of the transactions
described in this Section 3, then the Company's securities and property
(including cash, where applicable) receivable by the Holders of the Warrant will
be delivered to Holder.
4. Extraordinary Events Regarding Common Stock.
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4.1 Adjustment for Stock Splits and Combinations. If the Company shall at any
time or from time to time effect a subdivision of the outstanding Common Stock
(or Other Securities), the Exercise Price then in effect immediately before that
subdivision shall be proportionately decreased. If the Company shall at any time
or from time to time combine the outstanding shares of Common Stock (or Other
Securities), the Exercise Price then in effect immediately before the
combination shall be proportionately increased. Any adjustment under this clause
shall become effective at the close of business on the date the subdivision or
combination becomes effective.
4.2 Adjustment for Certain Dividends and Distributions. In the event the Company
at any time or from time to time shall make or issue, or fix a record date for
the determination of holders of Common Stock (or Other Securities) entitled to
receive, a dividend or other distribution payable in additional shares of Common
Stock (or Other Securities), then and in each such event the Exercise Price then
in effect shall be decreased as of the time of such issuance or, in the event
such a record date shall have been fixed, as of the close of business on such
record date, by multiplying the Exercise Price then in effect by a fraction:
(i) the numerator of which shall be the total number of shares of Common Stock
(or Other Securities) issued and outstanding immediately prior to the time of
such issuance or the close of business on such record date, and
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(ii) the denominator of which shall be the total number of shares of Common
Stock (or Other Securities) issued and outstanding immediately prior to the time
of such issuance or the close of business on such record date plus the number of
shares of Common Stock (or Other Securities) issuable in payment of such
dividend or distribution; provided, however, if such record date shall have been
fixed and such dividend is not fully paid or if such distribution is not fully
made on the date fixed therefor, the Exercise Price shall be recomputed
accordingly as of the close of business on such record date and thereafter the
Exercise Price shall be adjusted pursuant to this clause as of the time of
actual payment of such dividends or distributions.
4.3 Adjustments for Other Dividends and Distributions. In the event the Company
at any time or from time to time shall make or issue, or fix a record date for
the determination of holders of Common Stock (or Other Securities) entitled to
receive, a dividend or other distribution payable in securities of the Company
other than shares of Common Stock (or Other Securities), then and in each such
event provision shall be made so that the Holder shall receive upon exercise of
this Warrant in addition to the number of shares of Common Stock (or Other
Securities) receivable thereupon, the amount of securities of the Company that
it would have received had this Warrant been exercised into Common Stock (or
Other Securities) on the date of such event and had they thereafter, during the
period from the date of such event to and including the exercise date, retained
such securities receivable by them as aforesaid during such period, giving
application to all adjustments called for during such period with respect to the
rights of the Holder.
4.4 Adjustment for Reclassification, Exchange, or Substitution. If the Common
Stock (or Other Securities) issuable upon the exercise of this Warrant shall be
changed into the same or a different number of shares of any class or classes of
stock, whether by capital reorganization, reclassification, or otherwise (other
than a subdivision or combination of shares or stock dividend provided for
above, or a reorganization, merger, consolidation, or sale of assets provided
for below), then and in each such event the Holder shall have the right
thereafter to exercise this Warrant into the kind and amount of shares of stock
and other securities and property receivable upon such reorganization,
reclassification, or other change, by holders of the number of shares of Common
Stock (or Other Securities) into which this Warrant might have been exercised
immediately prior to such reorganization, reclassification, or change, all
subject to further adjustment as provided herein.
4.5 Certificate as to Adjustments. Upon the occurrence of each adjustment or
readjustment of the Exercise Price pursuant to this Section 4, the Company at
its expense shall promptly compute such adjustment or readjustment in accordance
with the terms hereof and furnish to the Holder a certificate setting forth such
adjustment or readjustment and showing in detail the facts upon which such
adjustment or readjustment is based. The Company shall, upon the written request
at any time of the Holder, furnish or cause to be furnished to such holder a
similar certificate setting forth (i) such adjustments and readjustments, (ii)
the Exercise Price then in effect, and (iii) the Warrant Shares Number and the
amount, if any, of other property which then would be received upon the exercise
of this Warrant.
4.6 Warrant Shares Number. If any event shall occur that results in any
adjustment to the Exercise Price pursuant to this Section 4, then the Warrant
Shares Number, as in effect immediately prior to such event, shall be adjusted
such that the product of (a) the Exercise Price (as adjusted), times (b) the
Warrant Shares Number (as adjusted), in each case in effect immediately
following such event shall equal the product of (i) the Exercise Price, times
(b) the Warrant Shares Number, in each case in effect immediately prior to such
event.
5. Dilutive Issuances.
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5.1 Deemed Issue of Additional Shares of Common Stock.
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(i) If the Company at any time or from time to time after the date of the
issuance of this Warrant shall issue any Options or Convertible Securities or
shall fix a record date for the determination of holders of any class of
securities entitled to receive any such Options or Convertible Securities, then
the maximum number of shares of Common Stock (or Other Securities) (as set forth
in the instrument relating thereto, assuming the satisfaction of any conditions
to exercisability, convertibility or exchangeability but without regard to any
provision contained therein for a subsequent adjustment of such number) issuable
upon the exercise of such Options or, in the case of Convertible Securities and
Options therefor, the conversion or exchange of such Convertible Securities,
shall be deemed to be Additional Shares of Common Stock issued as of the time of
such issue or, in case such a record date shall have been fixed, as of the close
of business on such record date.
(ii) If the terms of any Option or Convertible Security, the issuance of which
resulted in an adjustment to the Exercise Price pursuant to the terms of Section
5.2 below, are revised (either automatically pursuant to the provisions
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contained therein or as a result of an amendment to such terms) to provide for
either (1) any increase or decrease in the number of shares of Common Stock (or
Other Securities) issuable upon the exercise, conversion or exchange of any such
Option or Convertible Security or (2) any increase or decrease in the
consideration payable to the Company upon such exercise, conversion or exchange,
then, effective upon such increase or decrease becoming effective, the Exercise
Price computed upon the original issue of such Option or Convertible Security
(or upon the occurrence of a record date with respect thereto) shall be
readjusted to such Exercise Price as would have obtained had such revised terms
been in effect upon the original date of issuance of such Option or Convertible
Security. Notwithstanding the foregoing, no adjustment pursuant to this clause
(ii) shall have the effect of increasing the Exercise Price to an amount which
exceeds the lower of (i) the Exercise Price on the original adjustment date, or
(ii) the Exercise Price that would have resulted from any issuances of
Additional Shares of Common Stock between the original adjustment date and such
readjustment date.
(iii) If the terms of any Option or Convertible Security, the issuance of which
did not result in an adjustment to the Exercise Price pursuant to the terms of
Section 5.2 below (either because the consideration per share of the Additional
Shares of Common Stock subject thereto was equal to or greater than the Exercise
Price then in effect, or because such Option or Convertible Security was issued
before the issuance of this Warrant), are revised after the issuance of this
Warrant (either automatically pursuant to the provisions contained therein or as
a result of an amendment to such terms) to provide for either (1) any increase
or decrease in the number of shares of Common Stock (or Other Securities)
issuable upon the exercise, conversion or exchange of any such Option or
Convertible Security or (2) any increase or decrease in the consideration
payable to the Company upon such exercise, conversion or exchange, then such
Option or Convertible Security, as so amended, and the Additional Shares of
Common Stock subject thereto shall be deemed to have been issued effective upon
such increase or decrease becoming effective.
(iv) Upon the expiration or termination of any unexercised Option or unconverted
or unexchanged Convertible Security which resulted (either upon its original
issuance or upon a revision of its terms) in an adjustment to the Exercise Price
pursuant to the terms of Section 5.2 below, the Exercise Price shall be
readjusted to such Exercise Price as would have obtained had such Option or
Convertible Security never been issued.
5.2 Adjustment of Exercise Price Upon Issuance of Additional Shares of Common
Stock. In the event the Company shall at any time after the issuance of this
Warrant issue Additional Shares of Common Stock (including Additional Shares of
Common Stock deemed to be issued pursuant to Section 5.1), without consideration
or for a consideration per share less than the applicable Exercise Price in
effect immediately prior to such issue, then the Exercise Price shall be
reduced, concurrently with such issue, to a price (calculated to the nearest
one-hundredth of a cent) determined in accordance with the following formula:
EP2 = EP1 * (A + B) / (A + C)
For purposes of the foregoing formula, the following definitions shall apply:
"EP2" shall mean the Exercise Price in effect immediately after such issue of
Additional Shares of Common Stock;
"EP1" shall mean the Exercise Price in effect immediately prior to such issue of
Additional Shares of Common Stock;
"A" shall mean the number of shares of Common Stock (or Other Securities)
outstanding and deemed outstanding immediately prior to such issue of Additional
Shares of Common Stock (treating for this purpose as outstanding all shares of
Common Stock (or Other Securities) issuable upon exercise of Options outstanding
immediately prior to such issue or upon conversion of Convertible Securities
outstanding immediately prior to such issue);
"B" shall mean the number of shares of Common Stock (or Other Securities) that
would have been issued if such Additional Shares of Common Stock had been issued
at a price per share equal to EP1 (determined by dividing the aggregate
consideration received by the Company in respect of such issue by EP1); and
"C" shall mean the number of such Additional Shares of Common Stock issued in
such transaction.
5.3 Determination of Consideration. For purposes of this Section 5, the
consideration received by the Company for the issue of any Additional Shares of
Common Stock shall be computed as follows:
(i) Cash and Property: Such consideration shall:
(A) insofar as it consists of cash, be computed at the aggregate amount of cash
received by the Company, excluding amounts paid or payable for accrued interest;
(B) insofar as it consists of property other than cash, be computed at the fair
market value thereof at the time of such issue, as determined in good faith by
the Board; and
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(C) in the event Additional Shares of Common Stock are issued together with
other shares or securities or other assets of the Company for consideration
which covers both, be the proportion of such consideration so received, computed
as provided in clauses (A) and (B) above, as determined in good faith by the
Board.
(ii) Options and Convertible Securities. The consideration per share received by
the Company for Additional Shares of Common Stock deemed to have been issued
pursuant to Section 5.1, relating to Options and Convertible Securities, shall
be determined by dividing:
(A) the total amount, if any, received or receivable by the Company as
consideration for the issue of such Options or Convertible Securities, plus the
minimum aggregate amount of additional consideration (as set forth in the
instruments relating thereto, without regard to any provision contained therein
for a subsequent adjustment of such consideration) payable to the Company upon
the exercise of such Options or the conversion or exchange of such Convertible
Securities, or in the case of Options for Convertible Securities, the exercise
of such Options for Convertible Securities and the conversion or exchange of
such Convertible Securities, by
(B) the maximum number of shares of Common Stock (as set forth in the
instruments relating thereto, without regard to any provision contained therein
for a subsequent adjustment of such number) issuable upon the exercise of such
Options or the conversion or exchange of such Convertible Securities.
5.4 Multiple Closing Dates. In the event the Company shall issue on more than
one date Additional Shares of Common Stock that are a part of one transaction or
a series of related transactions and that would result in an adjustment to the
Exercise Price pursuant to the terms of Section 5.2 above then, upon the final
such issuance, the Exercise Price shall be readjusted to give effect to all such
issuances as if they occurred on the date of the first such issuance (and
without additional giving effect to any adjustments as a result of any
subsequent issuances within such period).
5.5 Certificate as to Adjustments. Upon the occurrence of each adjustment or
readjustment of the Exercise Price pursuant to this Section 5, the Company at
its expense shall promptly compute such adjustment or readjustment in accordance
with the terms hereof and furnish to the Holder a certificate setting forth such
adjustment or readjustment and showing in detail the facts upon which such
adjustment or readjustment is based. The Company shall, upon the written request
at any time of the Holder, furnish or cause to be furnished to such holder a
similar certificate setting forth (i) such adjustments and readjustments, (ii)
the Exercise Price then in effect, and (iii) the Warrant Shares Number and the
amount, if any, of other property which then would be received upon the exercise
of this Warrant.
5.6 Warrant Shares Number. If any event shall occur that results in any
adjustment to the Exercise Price pursuant to this Section 5, then the Warrant
Shares Number, as in effect immediately prior to such event, shall be adjusted
such that the product of (a) the Exercise Price (as adjusted), times (b) the
Warrant Shares Number (as adjusted), in each case in effect immediately
following such event shall equal the product of (i) the Exercise Price, times
(b) the Warrant Shares Number, in each case in effect immediately prior to such
event.
6. Reservation of Stock, etc. Issuable on Exercise of Warrant. The Company will
at all times reserve and keep available, solely for issuance and delivery on the
exercise of the Warrant, shares of Common Stock (or Other Securities) from time
to time issuable on the exercise of the Warrant. The Company will not, by
amendment of its charter or through 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. Without limiting the generality of the foregoing, the
Company will (a) not increase the par value of any shares of Common Stock (or
Other Securities) obtainable upon the exercise of this Warrant and (b) take all
such actions as may be necessary or appropriate in order that the Company may
validly and legally issue fully paid and nonassessable shares of Common Stock
(or Other Securities) upon the exercise of this Warrant.
7. Assignment; Exchange of Warrant. Subject to compliance with applicable
securities laws, this Warrant, and the rights evidenced hereby, may be
transferred by any registered holder hereof (a "Transferor") in whole or in
part. On the surrender for exchange of this Warrant, with the Transferor's
endorsement in the form of Exhibit B attached hereto (the "Transferor
Endorsement Form") and together with evidence reasonably satisfactory to the
Company demonstrating compliance with applicable securities laws, which shall
include, without limitation, a legal opinion from the Transferor's counsel that
such transfer is exempt from the registration requirements of applicable
securities laws, the Company at its expense but with payment by the Transferor
of any applicable transfer taxes) will issue and deliver to or on the order of
the Transferor thereof a new Warrant of like tenor, in the name of the
Transferor and/or
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the transferee(s) specified in such Transferor Endorsement Form (each a
"Transferee"), calling in the aggregate on the face or faces thereof for the
number of shares of Common Stock called for on the face or faces of the Warrant
so surrendered by the Transferor.
8. Replacement of Warrant. On receipt of evidence reasonably satisfactory to the
Company of the loss, theft, destruction or mutilation of this Warrant and, in
the case of any such loss, theft or destruction of this Warrant, on delivery of
an indemnity agreement or security reasonably satisfactory in form and amount to
the Company or, in the case of any such mutilation, on surrender and
cancellation of this Warrant, the Company at its expense will execute and
deliver, in lieu thereof, a new Warrant of like tenor.
9. Warrant Agent. The Company may, by written notice to the Holder of the
Warrant, appoint an agent for the purpose of issuing Common Stock (or Other
Securities) on the exercise of this Warrant pursuant to Section 1, exchanging
this Warrant pursuant to Section 7, and replacing this Warrant pursuant to
Section 8, or any of the foregoing, and thereafter any such issuance, exchange
or replacement, as the case may be, shall be made at such office by such agent.
10. Transfer on the Company's Books. Until this Warrant is transferred on the
books of the Company, the Company may treat the registered holder hereof as the
absolute owner hereof for all purposes, notwithstanding any notice to the
contrary.
11. Notices, etc. All notices and other communications from the Company to the
Holder of this Warrant shall be mailed by first class registered or certified
mail, postage prepaid, at such address as may have been furnished to the Company
in writing by such Holder or, until any such Holder furnishes to the Company an
address, then to, and at the address of, the last Holder of this Warrant who has
so furnished an address to the Company.
12. Definitions. For purposes of this Warrant, the following definitions shall
apply:
"Additional Shares of Common Stock" shall mean all shares of Common Stock (or
Other Securities) issued (or deemed to be issued pursuant to Section 5) by the
Company after the date of issuance of this Warrant, but shall not include up to
4,211,799 shares of Common Stock issuable upon exercise of options granted by
the Company pursuant to a statutory employee benefit plan approved in accordance
with Section 7 of the Company's Series A Certificate of Designations.
"Convertible Securities" shall mean any evidences of indebtedness, shares or
other securities directly or indirectly convertible into or exchangeable for
Common Stock (or Other Securities), but excluding Options.
"Current Market Value" means the fair market value of the shares of Common Stock
(or Other Securities), as determined as follows:
(i) if the Common Stock (or Other Securities) is traded on a securities exchange
or the NASDAQ Stock Market, the value shall be deemed to be the average of the
closing prices of the Common Stock (or Other Securities) on such exchange or
market over the five (5) trading day period ending three (3) days prior to the
date of determination;
(ii) if the Common Stock (or Other Securities) is actively traded
over-the-counter, the value shall be deemed to be the average of the closing bid
prices over the five (5) trading day period ending three (3) days prior to the
date of determination; or
(iii) if there is no active public market for the Common Stock (or Other
Securities), the value shall be the fair market value thereof, as determined in
good faith by the Board.
(d) "Option" shall mean rights, options or warrants to subscribe for, purchase
or otherwise acquire Common Stock (or Other Securities) or Convertible
Securities, but shall not include options to purchase up to 4,211,799 shares of
Common Stock granted by the Company pursuant to a statutory employee benefit
plan approved in accordance with Section 7 of the Company's Series A Certificate
of Designations.
13. Miscellaneous. This Warrant and any term hereof may be changed, waived,
discharged or terminated only by an instrument in writing signed by the party
against which enforcement of such change, waiver, discharge or termination is
sought. This Warrant shall be governed by and construed in accordance with the
laws of State of New York without regard to principles of conflicts of laws. In
the event that any provision of this Warrant is invalid or unenforceable under
any applicable statute or rule of law, then such provision shall be deemed
inoperative to the
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extent that it may conflict therewith and shall be deemed modified to conform
with such statute or rule of law. Any such provision which may prove invalid or
unenforceable under any law shall not affect the validity or enforceability of
any other provision of this Warrant. The headings in this Warrant are for
purposes of reference only, and shall not limit or otherwise affect any of the
terms hereof. The invalidity or unenforceability of any provision hereof shall
in no way affect the validity or enforceability of any other provision.
[Signature page to follow]
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IN WITNESS WHEREOF, the Company has executed this Warrant as of the date first
written above.
GENERAL DEVICES, INC.
By:
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Name:
Title:
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