NOTE AND WARRANT ACQUISITION AGREEMENT
000
Xxxxxxx Xxxxx Xxxxx 000
Xxx
Xxxxxxx, XX 00000
The
undersigned (the “Investor”),
hereby confirms its agreement with you as follows:
1. This
Note
and Warrant Acquisition Agreement (the “Agreement”)
is
made as of the date set forth below between Argyle Security Acquisition
Corporation, a Delaware corporation (the “Company”),
and
the Investor.
2. The
Company is selling notes in the aggregate principal amount of $300,000 (each
a
“Note”)
bearing an interest rate of 4% in the form of Exhibit A hereto and 37,500
warrants in the form of Exhibit B hereto (each a “Warrant”
and,
together with the Notes, the “Securities”),
each
warrant to purchase one share of the common stock of the Company (the
“Common
Stock”),
to
the investors in a private placement (the “Offering”).
3. The
terms
and conditions of Annex I are incorporated by reference into this
Agreement.
4. The
Company will issue to the Investor (i) $25,000 aggregate principal amount of
Notes on the Closing Date, (ii) 3,125 Warrants.
5. All
transferees of the Securities and the Common Stock into which the Securities
are
exercisable shall be bound by the restrictions set forth herein, the Note and
the Warrant.
Please
confirm that the foregoing correctly sets forth the agreement between us by
signing in the space provided below for that purpose.
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Dated
April 16, 2007
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“INVESTOR”
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/s/
Xxxxxx
Xxxxxx
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Print
Name: Xxxxxx
Xxxxxx
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Address:
0000 Xxxxxxxxxxx Xxxxx
Xxxx Xxxxxxxxx, Xxxxxxxxxx 00000
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Facsimile:
______________________________
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AGREED
AND ACCEPTED:
By: /s/
Xxx
Xxxxxx
Print
Name: Xxx Xxxxxx
Title:
Co-Chief Executive Officer
ANNEX
I
1. Waiver
of Liquidation Distributions.
In
connection with the Securities purchased pursuant to this Agreement, the
Investor hereby waives any and all right, title, interest or claim of any kind
in or to any liquidating distributions by the Company in the event of a
liquidation of the Company upon the Company's failure to timely complete a
Business Combination (as defined in the Company’s Second Amended and Restated
Certificate of Incorporation).
2. Lock-Up
Agreement.
The
Investor may not sell, assign, hypothecate, or transfer any of the Securities
purchased pursuant to this Agreement until the earlier of consummation of a
Business Combination or liquidation of the Company.
3. Representations
and Warranties of the Investors.
The
Investor represents and warrants to the Company that:
3.1 The
Investor is an “accredited investor” as that term is defined in Rule 501 of
Regulation D promulgated under the Securities Act of 1933, as amended (the
“Securities Act”).
3.2 The
Securities are being acquired for the Investor’s own account, only for
investment purposes and not with a view to, or for resale in connection with,
any distribution or public offering thereof within the meaning of the Securities
Act.
3.3 The
Investor has the full right, power and authority to enter into this Agreement
and this Agreement is a valid and legally binding obligation of the Investor
enforceable against the Investor in accordance with its terms.
4. Registration
Rights.
4.1 Demand
Registration.
At any
time and from time to time on or after the date on which the Company has
consummated a Business Combination, persons holding a majority-in-interest
of
the shares of Common Stock underlying the Warrants sold on the date hereof
(the
“Registrable Securities”) may make a written demand for registration under the
Securities Act of all or part of their Registrable Securities (a “Demand
Registration”). Any demand for a Demand Registration shall specify the number of
Registrable Securities proposed to be sold. The Company will notify all holders
of Registrable Securities of the demand, and each holder of Registrable
Securities who wishes to include all or a portion of such holder’s Registrable
Securities in the Demand Registration (each such holder including shares of
Registrable Securities in such registration, a “Demanding Holder”) shall so
notify the Company within fifteen (15) days after the receipt by the holder
of
the notice from the Company. Upon any such request, the Demanding Holders shall
be entitled to have their Registrable Securities included in the Demand
Registration.
The
Company shall, as expeditiously as possible and in any event within sixty (60)
days after receipt of a request for a Demand, prepare and file with the SEC
a
registration statement on any form for which the Company then qualifies or
which
counsel for the Company shall deem appropriate and which form shall be available
for the sale of all Registrable Securities to be registered thereunder, and
shall use its best efforts to cause such registration statement to become
effective as promptly as practicable.
The
Company shall not be obligated to effect more than two Demand Registrations
in
respect of the Registrable Securities.
4.2 “Piggyback”
Registration Rights.
Subject
to the last sentence of this Section 4.2, at any time after a Business
Combination, if the Company shall determine to proceed with the actual
preparation and filing of a new registration statement under the Securities
Act
in connection with the proposed offer and sale of any of its securities by
it or
any of its security holders (other than a registration statement on Form X-0,
X-0 or other limited purpose form), the Company will give written notice of
its
determination to the Investor or its nominee. Upon the written request from
a
majority-in-interest of the Registrable Securities, within 15 days after receipt
of any such notice from the Company, the Company will, except as herein
provided, cause all of the Registrable Securities covered by such request (the
“Requested Stock”) held by the Investors making such request (the “Requesting
Holders”) to be included in such registration statement (each, a “Piggy-Back
Registration”), all to the extent requisite to permit the sale or other
disposition by the prospective seller or sellers of the Requested Stock;
provided, further, that nothing herein shall prevent the Company from, at any
time, abandoning or delaying any registration. If any registration pursuant
to
this Section 4.2 shall be underwritten in whole or in part, the Company may
require that the Requested Stock be included in the underwriting on the same
terms and conditions as the securities otherwise being sold through the
underwriters. In such event, the Requesting Holders shall, if requested by
the
underwriters, execute an underwriting agreement containing customary
representations and warranties by selling stockholders and a lock-up on
Registrable Securities not being sold. If in the good faith judgment of the
managing underwriter of such public offering the inclusion of all of the
Requested Stock would reduce the number of shares to be offered by the Company
or interfere with the successful marketing of the shares of stock offered by
the
Company, the number of shares of Requested Stock otherwise to be included in
the
underwritten public offering may be reduced pro rata (by number of shares)
among
the Requesting Holders and all other holders of registration rights who have
requested inclusion of their securities or excluded in their entirety if so
required by the underwriter. To the extent only a portion of the Requested
Stock
is included in the underwritten public offering, those shares of Requested
Stock
which are thus excluded from the underwritten public offering and any other
securities of the Company held by such holders shall be withheld from the market
by the holders thereof for a period, not to exceed 90 days, which the managing
underwriter reasonably determines is necessary in order to effect the
underwritten public offering. At such time as the provisions of the registration
rights agreement filed as an exhibit to the registration statement relating
to
the Company’s initial public offering may be exercised, the exercise and
procedural provisions of such agreement, rather than the provisions of Sections
4.2, 4.3 and 4.4 hereof, shall govern the Registrable Securities with respect
to
Piggy-Back Registrations.
4.3 Registration
Procedures.
To the
extent required by Sections 4.1 or 4.2, the Company will:
(a) prepare
and file with the SEC a registration statement with respect to such securities,
and use its best efforts to cause such registration statement to become and
remain effective until the earlier of the date on which all of the Registrable
Securities included in the registration statement have been disposed of in
accordance with the intended method(s) of distribution set forth in such
registration statement or three years from the effective date;
(b) prepare
and file with the SEC such amendments to such registration statement and
supplements to the prospectus contained therein as may be necessary to keep
such
registration statement effective until the earlier of the date on which all
of
the Registrable Securities included in the registration statement have been
disposed of in accordance with the intended method(s) of distribution set forth
in such registration statement or three years from the effective
date;
(c) furnish
to the holders participating in such registration and to the underwriters of
the
securities being registered such reasonable number of copies of the registration
statement, preliminary prospectus, final prospectus and such other documents
as
such underwriters may reasonably request in order to facilitate the public
offering of such securities;
(d) use
its
best efforts to register or qualify the securities covered by such registration
statement under such state securities or blue sky laws of such jurisdictions
as
the holders may reasonably request in writing within 20 days following the
original filing of such registration statement, except that the Company shall
not for any purpose be required to execute a general consent to service of
process or to qualify to do business as a foreign corporation in any
jurisdiction wherein it is not so qualified;
(e) notify
the holders, promptly after it shall receive notice thereof, of the time when
such registration statement has become effective or a supplement to any
prospectus forming a part of such registration statement has been
filed;
(f) notify
the holders promptly of any request by the SEC for the amending or supplementing
of such registration statement or prospectus or for additional
information;
(g) prepare
and promptly file with the SEC and promptly notify such holders of the filing
of
such amendment or supplement to such registration statement or prospectus as
may
be necessary to correct any statements or omissions if, at the time when a
prospectus relating to such securities is required to be delivered under the
Securities Act, any event shall have occurred as the result of which any such
prospectus or any other prospectus as then in effect would include an untrue
statement of a material fact or omit to state any material fact necessary to
make the statements therein, in the light of the circumstances in which they
were made, not misleading; and
(i) advise
the holders, promptly after it shall receive notice or obtain knowledge thereof,
of the issuance of any stop order by the SEC suspending the effectiveness of
such registration statement or the initiation or threatening of any proceeding
for that purpose and promptly use its best efforts to prevent the issuance
of
any stop order or to obtain its withdrawal if such stop order should be
issued.
The
Investors shall cooperate with the Company in providing the information
necessary to effect the registration of the Registrable Securities, including
completion of customary questionnaires.
4.4 Expenses.
The
Company shall bear all costs and expenses incurred in connection with any Demand
Registration pursuant to Section 4.1, any Piggy-Back Registration pursuant
to
Section 4.2, and all expenses incurred in performing or complying with its
other
obligations under this Agreement, whether or not the registration statement
becomes effective, including, without limitation: (i) all registration and
filing fees; (ii) fees and expenses of compliance with securities or “blue sky”
laws (including fees and disbursements of counsel in connection with blue sky
qualifications of the Registrable Securities); (iii) printing expenses; (iv)
the
Company’s internal expenses (including, without limitation, all salaries and
expenses of its officers and employees); (v) the fees and expenses incurred
in
connection with the exchange listing of the Registrable Securities; (vi)
National Association of Securities Dealers, Inc. fees; (vii) fees and
disbursements of counsel for the Company and fees and expenses for independent
certified public accountants retained by the Company (including the expenses
or
costs associated with the delivery of any opinions or comfort letters); (viii)
the fees and expenses of any special experts retained by the Company in
connection with such registration and (ix) the fees and expenses of one legal
counsel selected by the holders of a majority-in-interest of the Registrable
Securities included in such registration. The Company shall have no obligation
to pay any underwriting discounts or selling commissions attributable to the
Registrable Securities being sold by the holders thereof, which underwriting
discounts or selling commissions shall be borne by such holders. Additionally,
in an underwritten offering, all selling shareholders and the Company shall
bear
the expenses of the underwriter pro rata in proportion to the respective amount
of shares each is selling in such offering.
5. Waiver
and Indemnification.
The
Investor hereby waives any and all rights to assert any present or future
claims, including any right of rescission, against the Company with respect
to
its purchase of Securities, and agrees to indemnify and hold the Company from
all losses, damages or expenses that relate to claims or proceedings brought
against the Company by any transferee of the Securities.
6. Counterparts;
Facsimile.
This
Agreement may be executed in any number of counterparts, each of which when
so
executed shall be deemed to be an original and all of which taken together
shall
constitute one and the same instrument. This Agreement or any counterpart may
be
executed via facsimile transmission, and any such executed facsimile copy shall
be treated as an original.
7.Governing
Law.
This
Agreement shall for all purposes be deemed to be made under and shall be
construed in accordance with the laws of the State of New York. Each of the
parties hereby agrees that any action, proceeding or claim against it arising
out of or relating in any way to this Agreement shall be brought and enforced
in
the courts of the State of New York or the United States District Court for
the
Southern District of New York, and irrevocably submits to such jurisdiction,
which jurisdiction shall be exclusive. Each of the parties hereby waives any
objection to such exclusive jurisdiction and that such courts represent an
inconvenient forum.
