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Exhibit 10.24
Neither this Warrant, the shares of Convertible Preferred
Stock issuable upon exercise of this Warrant nor the shares of
Common Stock that can be purchased upon exercise of the
conversion privileges of the Convertible Preferred Stock (the
"Conversion Stock") have been registered under the Securities
Act of 1933, and may not be sold or otherwise transferred
unless a compliance with the registration provisions of such
Act has been made or unless availability of an exemption from
such registration provisions has been established, or unless
sold pursuant to Rule 144 under the Securities Act of 1933.
SECURITY ASSOCIATES INTERNATIONAL, INC.
CONVERTIBLE PREFERRED STOCK PURCHASE WARRANT
EXPIRING DECEMBER 31, 2003
Issued: Effective as of December 31, 1996
No. 1
WARRANTHOLDER: TJS Partner, L.P.
NAME: TJS Partners, L.P.
ADDRESS: 00 Xxxxxxxxxx Xxxxxx
0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
No. of Shares of Convertible Preferred Stock to be issued upon exercise in full:
15,000
For Value Received, Security Associates International, Inc., a Delaware
corporation (the "Corporation"), promises to issue to the holder of this Warrant
("Warrantholder"), its nominees, successors or assigns the nonassessable shares
(the "Shares") of the Convertible Preferred Stock (as hereinafter defined),
$10.00 par value, of the Corporation at any time from December 31, 1996 to
December 31, 2003 (the "Expiration Date") upon the payment by the Warrantholder
to the Corporation of the purchase price per share set forth in Section 2.2
hereof (the "Purchase Price") and to deliver to the Warrantholder a certificate
or certificates representing the Shares purchased. The Warrants are initially
exercisable at a price of $250.00 per share, payable in cash or by check to the
order of the Corporation, or any combination of cash or checks, subject to
adjustment as provided in Section 2.2 below. The Warrantholder shall have the
right to exercise this Warrant in whole or in part at any time or times on or
prior to the Expiration Date. Subject to the conditions hereinafter set forth,
the Warrantholder may sell, assign and transfer this Warrant, in whole or in
part, and, in the event of any such sale, assignment and transfer, the
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Corporation agrees to reissue a Warrant or Warrants of like tenor for the
unexercised portion hereof. The number of Shares purchasable upon exercise of
this Warrant and the Purchase Price per Share shall be subject to adjustment
from time to time as set forth herein.
1. Covenants of the Corporation. The Corporation will at all times reserve
and keep available out of its authorized shares of Convertible Preferred Stock
and Common Stock or its treasury shares, solely for the purpose of issuance upon
the exercise of this Warrant as herein provided and of the conversion privileges
of the Convertible Preferred Stock, such number of shares of Convertible
Preferred Stock and Common Stock as shall then be issuable upon the exercise of
this Warrant and the conversion privileges of the Convertible Preferred Stock,
respectively. The Corporation covenants that all shares of Convertible Stock and
Common Stock which shall be so issued shall be duly and validly issued and fully
paid and nonassessable and free from all taxes, liens and charges with respect
to the issuance thereof. The Corporation will take all such action as may be
necessary to assure that all such shares of Convertible Preferred Stock and
Common Stock may be so issued without violation of any applicable requirements
of any federal or state securities laws. The Corporation will not take any
corporate action which would result in any adjustment of the Purchase Price as
provided below if by virtue of such adjustment the total number of shares of
Convertible Preferred Stock or Common Stock issuable after such action upon
exercise of this Warrant or the conversion privileges of the Convertible
Preferred Stock would exceed the total number of shares of Convertible Preferred
Stock or Common Stock then authorized by the Corporation's Certificate of
Incorporation. No corporate action may be taken which would have the effect of
terminating or restricting the exercise of this Warrant except with the written
consent of the holder of this Warrant.
2. Exercise of Warrant.
2.1 Dividends. No payment or adjustment shall be made upon any
exercise of this Warrant on account of any previous cash dividends.
2.2 Purchase Price. The Purchase Price shall be $250.00 per share
or, in case an adjustment of such price has taken place pursuant to the
provisions of this paragraph 2, then the Purchase Price shall be the price as
last adjusted and in effect at the date this Warrant (or any part hereof) is
surrendered for exercise.
2.3 Adjustment of Purchase Price. Upon each adjustment of the
Purchase Price, the Warrantholder shall thereafter be entitled to purchase at
the adjusted Purchase Price, the number of shares of Convertible Preferred Stock
obtained by multiplying the Purchase Price in effect immediately prior to such
adjustment by the number of shares of Convertible Preferred Stock purchasable
immediately prior to such adjustment and dividing the product by the Purchase
Price as adjusted. No adjustment of the Purchase Price shall be made in an
amount less than $.01 per share, but any such lesser adjustment shall be carried
forward and shall be made at the time and together with the next subsequent
adjustment which together with any adjustments so carried forward shall amount
to $.01 per share or more.
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2.4 Subdivision or Combination of Stock.
(a) In case the Corporation shall at any time subdivide its
outstanding shares of Convertible Preferred Stock into a greater number of
shares or declare a dividend or make any other distribution upon the Convertible
Preferred Stock of the Corporation payable in Convertible Preferred Stock, the
Purchase Price in effect immediately prior to such subdivision, dividend or
distribution shall be proportionately reduced, and conversely, in case the
outstanding shares of Convertible Preferred Stock of the Corporation shall be
combined into a smaller number of shares, the Purchase Price in effect
immediately prior to such combination shall be proportionately increased.
(b) Record Date. In case the Corporation shall take a record
of the holders of its Convertible Preferred Stock for the purpose of entitling
them to receive a dividend or other distribution payable in Convertible
Preferred Stock, then such record date shall be deemed to be the date of the
issue or sale of the shares of Convertible Preferred Stock deemed to have been
issued or sold upon the declaration of such dividend or the making of such other
distribution, as the case may be.
2.5 Reorganization, Reclassification, Consolidation, Merger or Sale.
(a) Any capital reorganization, reclassification,
consolidation, merger or sale of all or substantially all of the Corporation's
assets to another person or entity which is effected in such a way that holders
of Common Stock are entitled to receive (either directly or upon subsequent
liquidation) stock, securities or assets with respect to or in exchange for
Common Stock is referred to herein as an "ORGANIC CHANGE." Prior to the
consummation of any Organic Change, the Corporation will make appropriate
provisions to insure that each holder of Warrants will thereafter have the right
to acquire and receive such shares of stock, securities or assets as such holder
would have received if such holder had exercised this Warrant and converted the
Convertible Preferred Stock immediately prior to such Organic Change. In any
such Organic Change, the Corporation will make appropriate provisions to insure
that the provisions of this Section 2.5 will thereafter be applicable as nearly
as may be to the Warrants. The Corporation will not effect any consolidation,
merger or sale, unless prior to the consummation thereof, the successor
corporation resulting from consolidation or merger or the corporation purchasing
such assets assumes the obligation to deliver to such holder of Warrants such
shares of stock, securities or assets as, in accordance with the foregoing
provisions, such holder may be entitled to acquire.
(b) If a purchase, tender or exchange offer is made to and
accepted by the holders of more than 50% of the outstanding shares of Common
Stock of the Corporation, the Corporation shall not effect any consolidation,
merger or sale with the person having made such offer or with any affiliate of
such person, unless prior to the consummation of such consolidation, merger or
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sale the holder hereof shall have been given a reasonable opportunity to then
elect to receive, upon exercise of this Warrant and exercise of the conversion
privileges of the Convertible Preferred Stock, either the stock, securities or
assets then issuable with respect to the Common Stock of the Corporation or the
stock, securities or assets, or the equivalent, issued to previous holders of
the Common Stock in accordance with such offer.
2.6 Notice of Adjustment. Upon any adjustment of the Purchase Price,
then and in each such case the Corporation shall give written notice thereof to
the Warrantholder, which notice shall state the Purchase Price resulting from
such adjustment, setting forth in reasonable detail the method of calculation
and the facts upon which such calculation is based.
2.7 Other Notices. In case at any time:
(a) the Corporation shall offer for subscription pro rata to
the holders of its Convertible Preferred Stock or Common Stock any additional
shares of stock of any class or other rights;
(b) the Corporation shall offer for subscription pro rata to
the holders of its Convertible Preferred Stock or Common Stock any additional
shares of stock of any class or other rights;
(c) there shall be any capital reorganization, or
reclassification of the capital stock of the Corporation, or consolidation or
merger of the Corporation with, or sale of all or substantially all of its
assets to, another corporation; or
(d) there shall be a voluntary dissolution, liquidation or
winding up of the Corporation; then, in any one or more of said cases, the
Corporation shall give to the Warrantholder, (i) at least 20 days prior written
notice of the date on which the books of the Corporation shall close or a record
shall be taken for such dividend, distribution or subscription rights or for
determining rights to vote in respect of any such reorganization,
reclassification, consolidation, merger, sale, dissolution, liquidation or
winding up, and (ii) in the case of any such reorganization, reclassification,
consolidation, merger, sale, dissolution, liquidation or winding up ,at least 20
days prior written notice of the date when the same shall take place. Such
notice in accordance with the foregoing clause (i) shall also specify, in the
case of any such dividend, distribution or subscription rights, the date on
which the holders of Convertible Preferred Stock or Common Stock shall be
entitled thereto, and such notice in accordance with the foregoing clause (ii)
shall also specify the date on which the holders of Convertible Preferred Stock
or Common Stock shall
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be entitled to exchange their Convertible Preferred Stock or Common Stock for
securities or other property deliverable upon such reorganization,
reclassification, consolidation, merger, sale, dissolution, liquidation or
winding up, as the case may be.
2.8 Redemption. Intentionally omitted.
2.9 Definitions of Convertible Preferred Stock and Common Stock. As
used in this Paragraph 2, the term "Convertible Preferred Stock" shall mean the
Corporation's Convertible Preferred Stock, $10.00 par value, having the
designations, rights , preferences and limitations set forth in the Certificate
of Designations, Preferences, Rights and Limitations of Convertible Preferred
Stock, attached hereto as Exhibit "A", and "Common Stock" shall mean the
Corporation's Common Stock, $.001 par value, of any class as constituted on the
effective date hereof, and shall also include any capital stock of any class of
the Corporation (other than the Convertible Preferred Stock) thereafter
authorized which shall not be limited to a fixed sum or percentage of par value
in respect of the rights of the holders thereof to participate in dividends or
in the distribution of assets upon the voluntary or involuntary liquidation,
dissolution or winding up of the Corporation.
2.10 Issue Tax. The issuance of certificates for shares of
Convertible Preferred Stock upon exercise of this Warrant shall be made without
charge to the holder hereof for any issuance tax in respect thereof, provided
that the Corporation shall not be required to pay any tax which may be payable
in respect of any transfer involved in the issuance and delivery of any
certificate in a name other than that of the holder of this Warrant.
2.11 Closing of Books. The Corporation will not close its books
against the transfer of any shares of Convertible Preferred Stock issued or
issuable upon the exercise of this Warrant.
2.12 Transferability and Registration Under Securities Act. The
provisions of the Common Stock Subscription and Purchase Agreement dated
September 5, 1996 entered into by the Corporation in connection with the initial
issuance of Common Stock to TJS Partners, L.P., a New York limited partnership
pertaining to the transferability and the rights to registration of the Common
Stock purchased pursuant to that agreement under the Securities Act of 1933, as
amended, are hereby incorporated herein by reference and made a part hereof and
shall be deemed to apply to the transferability of this Warrant (and any shares
of Convertible Preferred Stock and Common Stock or other securities acquired
upon exercise hereof and thereof ) and to the registration of the shares of
Common Stock (or other securities) which the Warrantholder may acquire upon
exercise of the Convertible Preferred Stock.
2.13 Notice. Any notice or other document required or permitted to be
given or delivered to the Warrantholder(s) and holder(s) of shares issued upon
exercise of this Warrant or the Convertible Preferred Stock shall be sent by
certified or registered mail, return receipt requested, to the Warrantholder at
the address now shown on this Warrant or at such other address as the holder(s)
shall
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furnish to the Corporation in writing. Any notice or other document required or
permitted to be given or delivered to the Corporation at 0000 Xxxxx Xxxxxxxxx
Xxxxxxx Xxxx, Xxxxxxxxx Xxxxxxx, Xxxxxxxx 00000 or such other address as shall
have been furnished to the Warrantholder(s) and holder(s) of Shares by the
Corporation.
2.14 Exercise of Warrant. In order to exercise this Warrant, the
Warrantholder shall deliver to the Corporation (i) a written notice of such
holder's election to exercise this Warrant specifying the number of shares of
Convertible Preferred Stock to be purchased, and (ii) payment in cash or by
check of the per share Purchase Price multiplied by the number of shares
purchased. By acceptance of this Warrant the Warrantholder represents and
warrants to the Corporation that, unless a registration statement is in effect
with respect to the Shares, the Warrantholder shall acquire the Shares for its
own account and not with a view to the distribution thereof. Upon receipt of
written notice, the Corporation shall within ten (10) business days execute or
cause to be executed and delivered to such holder a certificate or certificates
representing the aggregate number of Shares purchased. If this Warrant shall
have been exercised only in part, the Corporation shall also deliver a new
Warrant of like tenor evidencing the rights of such holder to purchase the
remaining Shares called for by this Warrant.
2.15 Limitation on Exercise of Warrant. The holder of this Warrant
agrees that if any exercise of this Warrant would result in a significant
diminution of the ability of the Corporation to advantageously utilize its net
operating loss carryforwards ("NOLS") for federal income tax purposes, in the
judgment of the Corporation's certified public accountants, its right to
exercise this Warrant will be limited to the right to purchase the maximum
number of Shares that can be purchased without the Corporation losing its
ability to utilize its NOLS. The Corporation shall promptly notify the holder of
this Warrant in writing of any determination by its certified public accountants
that all or part of any remaining portion of this Warrant may be exercised
without jeopardizing SAI's ability to use its NOLS. The time period for the
exercise of any portion of this Warrant (or any part thereof) the exercise of
which was previously prohibited pursuant to the provisions of this Section shall
be extended for a period of sixty (60) days following the receipt of written
notice from SAI that the conditions that gave rise to the prohibition on
exercise no longer apply.
2.16 Limitation of Liability. No provisions hereof, in the absence of
affirmative action by the Warrantholder to purchase Shares hereunder, and no
mere enumeration herein of the rights or privileges of the Warrantholder shall
give rise to any liability of such holder for the Purchase Price or as a
shareholder of the Corporation (whether such liability is asserted by the
Corporation or creditors of the Corporation).
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IN WITNESS WHEREOF, the Corporation has caused this Warrant to be
executed by its President or a Vice President, thereunto duly authorized, the
execution hereof to be attested by its Secretary or an Assistant Secretary; and
the affixing of its corporate seal effective as of the 31st day of December,
1996.
SECURITY ASSOCIATES INTERNATIONAL, INC.
ATTEST:
By: /s/ Xxxxxxx Xxxxx By: /s/ Xxxxx X. Xxxxxxx
----------------------------- ------------------------
Secretary President
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[FORM OF ELECTION TO PURCHASE]
The undersigned hereby irrevocably elects to exercise the right,
represented by this Warrant Certificate, to purchase ______ Shares and herewith
tenders in payment for such Shares cash or a check or a wire transfer of funds
payable to the order of Security Associates International, Inc. in the amount of
$______________, all in accordance with the terms hereof. The undersigned
requests that a certificate for such Shares be registered in the name of
____________________, whose address is_______________________________________
_______________________, and that such Certificate be delivered to
__________________________, whose address is ______________________________.
Dated: Signature:____________________
(Signature must conform in all respects to name
of holder as specified on the face of the
Warrant Certificate.)
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(Insert Social Security or Other
Identifying Number of Holder)
s
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[FORM OF ASSIGNMENT]
[To be executed by the registered holder if such holder
desires to transfer the Warrant Certificate.)
FOR VALUE RECEIVED _______________________________ hereby sells, assigns
and transfers unto ___________________________________________________________
___________________________________(Please print name and address of transferee)
this Warrant Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint _________________________,
Attorney, to transfer the Warrant Certificate on the books of the within-named
Company, with full power of substitution.
Dated: Signature:____________________
(Signature must conform in all respects to name
of holder as specified on the face of the
Warrant Certificate.)
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(Insert Social Security or Other
Identifying Number of Assignee)
Neither this Warrant, the shares of Convertible Preferred Stock issuable upon
exercise of this Warrant nor the shares of Common Stock that can be purchased
upon exercise of the conversion privileges of the Convertible Preferred Stock
(the "Conversion Stock") have been registered under the Securities Act of 1933,
and may not be sold or otherwise transferred unless a compliance with the
registration provisions of such Act has been made or unless availability of an
exemption from such registration provisions has been established, or unless sold
pursuant to Rule 144 under the Securities Act of 1933.
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