EXHIBIT 10.3
NEITHER THIS WARRANT NOR THE COMMON STOCK ISSUABLE UPON EXERCISE OF THIS WARRANT
HAS BEEN REGISTERED UNDER THE 1933 ACT OF 1933, AS AMENDED, OR APPLICABLE STATE
LAWS AND NEITHER THIS WARRANT NOR THE COMMON STOCK ISSUABLE UPON EXERCISE OF
THIS WARRANT MAY BE TRANSFERRED EXCEPT AS PROVIDED IN SECTION 4 OF THIS WARRANT.
WARRANT
to Purchase Common Stock of
Shepherd Surveillance Solutions, Inc.
Expiring June 28, 2001
This Warrant certifies that Trilon Dominion Partners, L.L.C., a
Delaware limited liability company, or registered assigns (the "Holder"), is
entitled to, subject to the terms set forth below, subscribe for and purchase
from Shepherd Surveillance Solutions, Inc., a Nevada corporation (the
"Company"), 14,226,578 duly authorized, validly issued, fully paid and
nonassessable shares of the Company's common stock, $.001 par value per share
(the common stock, including any stock into which it may be changed,
reclassified, or converted, and as it may be adjusted pursuant to Section 10
below, is herein referred to as the "Common Stock"), at a purchase price per
share equal to $0.01 (the "Exercise Price"). The Warrant may be exercised at any
time, and from time to time, during the period (the "Exercise Period") from the
date hereof and ending on June 28, 2001.
This Warrant is subject to the following provisions, terms and
conditions:
Section 1. Exercise of Warrant.
To exercise this Warrant in whole or in part (but for not less than 100
shares at a time, or such lesser number of shares which may constitute the
maximum number purchasable; such number being subject to adjustment as provided
in Section 10 below), the Holder shall deliver to the Company at its principal
office in Ormond Beach, Florida, (a) a written notice, in substantially the form
of the Subscription Notice appearing at the end of this Warrant, which notice
shall specify the number of shares of Common Stock to be purchased, (b) cash or
a certified check payable
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to the Company, or by cancellation of indebtedness of the Company to the Holder
hereof, if any, at the time of exercise, including any portion of the promissory
note, dated as of the date hereof, bearing interest at the rate of 12.25% per
annum, in a principal amount of $1,298,500, made by the Company in favor of the
Holder, in an amount equal to the aggregate purchase price of the number of
shares of Common Stock being purchased, and (c) this Warrant. The Company shall
as promptly as practicable, and in any event within 15 days thereafter, execute
and deliver or cause to be executed and delivered, in accordance with such
notice, a stock certificate or certificates representing the aggregate number of
shares of Common Stock specified in such notice. The stock certificate or
certificates so delivered shall be in the denomination of 100 shares each or
such lesser or greater denomination as may be specified in such notice and shall
be issued in the name of the Holder or, provided that the Holder complies with
Section 4 hereof applicable to the transfer of this Warrant or Common Stock
purchasable pursuant hereto, such other name as shall be designated in such
notice. Such stock 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 for all purposes to have become a holder of record of such
shares immediately prior to the close of business on the date such notice is
received by the Company as aforesaid. If this Warrant shall have been exercised
only in part, the Company shall, at the time of delivery of said stock
certificate or certificates, deliver to the Holder a new Warrant evidencing the
rights of the Holder to purchase the remaining shares of Common Stock called for
by this Warrant, which new warrant shall in all other respects be identical to
this Warrant, or, at the request of the Holder, appropriate notation may be made
on this Warrant and the same returned to the Holder. The Company shall pay all
expenses, taxes and other charges payable in connection with the preparation,
issue and delivery of such stock certificates and new warrants, except that, in
case such stock certificates or new Warrants shall be registered in a name or
names other than the name of the Holder, funds sufficient to pay all stock
transfer taxes that are payable upon the issuance of such stock certificates or
new Warrants shall be paid by the Holder at the time of delivering the notice of
exercise mentioned above.
All shares of Common Stock issued upon the exercise of this Warrant
shall be validly issued, fully paid and nonassessable and, if the Common Stock
is then listed on a national securities exchange or quoted on an automated
quotation system, shall be duly listed or quoted thereon.
The Company shall not be required upon any exercise of this Warrant to
issue a certificate representing any fraction of a share of Common Stock, but,
in lieu thereof, shall pay to the Holder cash in an amount equal to a
corresponding fraction (calculated to the nearest 1/100 of a share) of the
purchase price of one share of Common Stock as of the date of receipt by the
Company of notice of exercise of this Warrant.
Section 1A. Right to Convert Warrant.
The Holder shall have the right to convert this Warrant (the
"Conversion Right") at any time prior to the expiration of the Exercise Period,
into shares of Common Stock in accordance with this Section 2. Upon exercise of
the Conversion Right, the Company shall deliver to the Holder (without payment
by the Holder of the Exercise Price) that number of shares of Common Stock equal
to the quotient obtained by dividing (x) the value of this Warrant at the time
the Conversion Right is exercised (determined by subtracting the aggregate
Exercise Price for this Warrant (in effect immediately prior to the exercise of
the Conversion Right) from the amount obtained by multiplying the number of
shares of Common Stock issuable upon the exercise of this Warrant by the Closing
Price (as defined below) immediately prior to the exercise of the Conversion
Right) by (y) the Closing Price of one share of Common Stock immediately prior
to the exercise of the Conversion Right.
For purposes hereof, the "Closing Price" shall mean the closing sale
price (or the average of the closing bid and ask prices if there is no closing
sale price reported) of the Common Stock on the date specified on the principal
national securities exchange on which the Common Stock is listed or admitted to
trading, or, if the Common Stock is not listed or admitted to trading on any
national securities exchange on such date, the average of the highest reported
bid and lowest reported asked prices as furnished by the National Association of
Securities Dealers, Inc. through NASDAQ or a similar organization if NASDAQ is
no longer reporting such information. If there is no reported bid and asked
price for the Common Stock, the "Closing Price" shall be the fair market value
of the Common Stock on the date specified, as determined in good faith by the
Company and the Holder, or, if the Company and the Holder cannot agree, by an
independent appraiser mutually selected by the Company and the holder.
The Conversion Right may be exercised by the Holder, at any time or
from time to time, prior to its expiration, on any business day by delivering a
written notice (the "Conversion Notice") to the Company at the offices of the
Company, exercising the Conversion Right and specifying (i) the total number of
shares of Common Stock the Holder will purchase pursuant to the conversion and
(ii) a place and date not less than two nor more than 20 business days from the
date of the Conversion Notice for the closing of such purchase.
At any closing under this Section 2, (i) the Holder will surrender this
Warrant and (ii) the Company will deliver to the Holder a certificate or
certificates for the number of shares of Common Stock issuable upon such
conversion.
Section 2. Right to Convert Warrant.
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The Holder shall have the right to convert this Warrant (the
"Conversion Right") at any time prior to the expiration of the Exercise Period,
into shares of Common Stock in accordance with this Section 2. Upon exercise of
the Conversion Right, the Company shall deliver to the Holder (without payment
by the Holder of the Exercise Price) that number of shares of Common Stock equal
to the quotient obtained by dividing (x) the value of this Warrant at the time
the Conversion Right is exercised (determined by subtracting the aggregate
Exercise Price for this Warrant (in effect immediately prior to the exercise of
the Conversion Right) from the amount obtained by multiplying the number of
shares of Common Stock issuable upon the exercise of this Warrant by the Closing
Price (as defined below) immediately prior to the exercise of the Conversion
Right) by (y) the Closing Price of one share of Common Stock immediately prior
to the exercise of the Conversion Right.
For purposes hereof, the "Closing Price" shall mean the closing sale
price (or the average of the closing bid and ask prices if there is no closing
sale price reported) of the Common Stock on the date specified on the principal
national securities exchange on which the Common Stock is listed or admitted to
trading, or, if the Common Stock is not listed or admitted to trading on any
national securities exchange on such date, the average of the highest reported
bid and lowest reported asked prices as furnished by the National Association of
Securities Dealers, Inc. through NASDAQ or a similar organization if NASDAQ is
no longer reporting such information. If there is no reported bid and asked
price for the Common Stock, the "Closing Price" shall be the fair market value
of the Common Stock on the date specified, as determined in good faith by the
Company's Board of Directors.
The Conversion Right may be exercised by the Holder, at any time or
from time to time, prior to its expiration, on any business day by delivering a
written notice (the "Conversion Notice") to the Company at the offices of the
Company, exercising the Conversion Right and specifying (i) the total number of
shares of Common Stock the Holder will purchase pursuant to the conversion and
(ii) a place and date not less than two nor more than 20 business days from the
date of the Conversion Notice for the closing of such purchase.
At any closing under this Section 2, (i) the Holder will surrender this
Warrant and (ii) the Company will deliver to the Holder a certificate or
certificates for the number of shares of Common Stock issuable upon such
conversion.
Section 3. Transfer, Division and Combination.
The Company agrees to maintain at its principal office in Ormond Beach,
Florida, books for the registration and transfer of this Warrant, and, subject
to the provisions of Section 4 hereof, this Warrant and all rights hereunder are
transferable, in whole or in part, on such books at such office, upon surrender
of this Warrant at such office, together with a written assignment of this
Warrant duly executed by the Holder or his agent or attorney and funds
sufficient to pay
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any stock transfer taxes payable upon the making of such transfer. Upon such
surrender and payment, the Company shall execute and deliver a new Warrant or
Warrants in the name of the assignee or assignees and in the denominations
specified in such instrument of assignment, and this Warrant shall promptly be
canceled. A Warrant may be exercised by a new holder for the purchase of shares
of Common Stock without having a new Warrant issued.
This Warrant may be divided or combined with other Warrants upon
presentation hereof at such principal office in Ormond Beach, Florida, together
with a written notice specifying the names and denominations in which new
Warrants are to be issued, signed by the Holder or his agent or attorney.
Subject to compliance with the preceding paragraph as to any transfer that 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.
Section 4. Restrictions on Exercise and Transfer of Warrants
and Common Stock
The Holder, by acceptance hereof, acknowledges that this Warrant and,
to the extent not registered under the 1933 Act of Securities, as amended (the
"1933 Act"), any Common Stock purchased or acquired pursuant hereto is being or
will be acquired solely for the Holder's own account and not as a nominee for
any other party, and with a current investment intent and not with a view to
distribution thereof.
This Warrant shall be exercisable or convertible (a) only under
circumstances such that the issue of Common Stock issuable upon such exercise or
conversion is exempt from the requirements of registration under the 1933 Act
and any applicable state securities law or (b) upon registration of such Common
Stock in compliance therewith. This Warrant shall be transferable only under
circumstances such that the transfer is exempt from the requirements of
registration under the 1933 Act and any applicable state securities law. By
acceptance hereof, the Holder agrees to comply with such laws.
Before any transfer or attempted transfer of all or any part of this
Warrant or such Common Stock, the Holder shall deliver to the Company written
notice of its intention so to do briefly describing the manner of any such
proposed transfer. Promptly after receiving such written notice, the Company
shall present copies thereof to Company counsel and, if the Company requests the
Holder to designate special counsel therefor, to any special counsel designated
by the Holder that is knowledgeable as to securities matters and reasonably
satisfactory to the Company. If, in the opinion of counsel for the Company and
counsel, if any, for the Holder, the proposed transfer may be effected without
registration under the 1933 Act and any applicable state securities law of any
such securities, the Company, as promptly as practicable, shall notify the
Holder of such opinion, whereupon the securities proposed to be transferred may
be transferred in accordance with the terms of such notice. The
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Company shall not be required to effect any such transfer before the receipt of
such favorable opinion or opinions of the effectiveness of registration.
Section 5. Covenant to Reserve Shares of Common Stock.
The Company covenants and agrees that it will at all times reserve and
set apart and have, free from preemptive rights, a number of shares of
authorized but unissued Common Stock, or other stock or securities deliverable
pursuant to this Warrant, sufficient to enable it at any time to fulfill all its
obligations hereunder.
Section 6. Notices.
In the event that:
(a) the Company proposes to pay any dividend payable in stock
(of any class or classes) or in Convertible Securities, as defined
below, upon its Common Stock or make any distribution (other than
ordinary cash dividends) to the holders of its Common Stock,
(b) the Company proposes to grant to the holders of its Common
Stock generally any rights or options (excluding any options granted to
any employee, director, officer, contractor or consultant of the
Company pursuant to any plan approved by the Board of Directors of the
Company),
(c) the Company proposes to effect any capital reorganization
or reclassification of capital stock of the Company,
(d) the Company proposes to consolidate with, or merge into,
any other corporation or to transfer its property as an entirety or
substantially as an entirety, or
(e) the Company proposes to effect the liquidation,
dissolution or winding up of the Company,
then the Company shall cause notice of any such intended action to be given to
the holder of this Warrant not less than 30 days before date on which the
transfer books of the Company shall close or a record shall be taken for such
stock dividend, distribution or granting of rights or options, or the date when
such capital reorganization, reclassification, consolidation, merger, transfer,
liquidation, dissolution or winding up shall be effective, as the case may be.
Any notice or other document required or permitted to be given or
delivered to the holder of this Warrant shall be delivered by facsimile
transmission, reliable courier or first-class mail postage prepaid to the Holder
at the last address shown on the books of the Company maintained for the
registry and transfer of this Warrant. Any notice or other document required or
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permitted to be given or delivered to holders of record of Common Stock issued
pursuant to this Warrant shall be delivered by facsimile, reliable courier or
first-class mail postage prepaid to Holder at Holder's address as the same
appears on the stock records of the Company. Any notice or other document
required or permitted to be given or delivered to the Company shall be delivered
by facsimile transmission, reliable courier or first-class mail postage prepaid,
to the principal office of the Company in Ormond Beach, Florida or delivered to
the office of one of the Company's executive officers at such address, or such
other address as shall have been furnished by the Company to the holders of
record of such Warrants and the holders of record of such Common Stock.
Section 7. Limitation of Liability; Not Shareholders.
No Provision of this Warrant shall be construed as conferring upon the
Holder the right to vote or to consent or to receive dividends or to receive
notice as a shareholder in respect of meetings of shareholders for the election
of directors of the Company or any other matter whatsoever as shareholders of
the Company. No provision hereof, in the absence of affirmative action by the
Holder to purchase shares of Common Stock, and no mere enumeration herein of the
rights or privileges of the Holder, shall give rise to any liability of Holder
for the purchase price or as a shareholder of the Company, whether such
liability is asserted by the Company, creditors of the Company or others.
Section 8. Loss, Destruction, etc., of Warrant.
Upon receipt of evidence satisfactory to the Company of the loss,
theft, mutilation or destruction of any Warrant, and in the case of any such
loss, theft or destruction upon delivery of a bond of indemnity in such form and
amount as shall be reasonably satisfactory to the Company, or in the event of
such mutilation upon surrender and cancellation of such Warrant, the Company
will make and deliver a new warrant, of like tenor, in lieu of such lost,
stolen, destroyed or mutilated Warrant. Any Warrant issued under the provisions
of this Section 8 in lieu of any Warrant alleged to be lost, destroyed or
stolen, or of any mutilated Warrant, shall constitute an original contractual
obligation on the part of the Company.
Section 9. Exercise and Expiration of Warrant.
This Warrant shall become exercisable immediately upon its issuance to
the initial Holder. The expiration time and date of the Warrant shall be 5:00
p.m. New York, New York time, June . 2001.
Section 10. Adjustment of Number of Shares Issuable Pursuant to
this Warrant.
The number of shares of Common Stock that may be subscribed for and
purchased hereunder shall be subject to adjustment from time to time as follows:
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(a) Effect of "Split-ups" and "Split-downs"; Stock Dividends. If at any
time or from time to time the Company shall subdivide as a whole, by
reclassification, by the issuance of a stock dividend on the Common Stock
payable in Common Stock, or otherwise, the number of shares of Common Stock,
with or without par value, that may be purchased hereunder shall be increased
proportionately as of the effective or record date of such action. The issuance
of such a stock dividend shall be treated as a subdivision of the whole number
of shares of Common Stock outstanding immediately before the record date for
such dividend into a number of shares equal to such whole number of shares so
outstanding plus the number of shares issued as a stock dividend. In case at any
time or from time to time the Company shall combine as a whole, by
reclassification or otherwise, the number of shares of Common Stock then
outstanding into a lesser number of shares of Common Stock, with or without par
value, the number of shares of Common Stock that may be purchased hereunder
shall be reduced proportionately as of the effective date of such action.
(b) Effect of Certain Dividends. If on any date the Company makes a
distribution to holders of its Common Stock (including any such distribution
made in connection with a consolidation or merger in which the Company is the
continuing corporation) of evidences of its indebtedness or assets, the number
of shares of Common Stock purchasable hereunder shall be adjusted as at the
close of business on said date to a number determined by multiplying the number
of shares purchasable hereunder by a fraction, the numerator of which shall be
the Current Price (as defined herein) immediately prior to such distribution,
and the denominator of which shall be such Current Price minus the fair market
value (as determined in good faith by the Board of Directors of the Company,
provided that a majority of the independent directors of the Board shall have
concurred, or upon the failure of such Board of Directors to act in good faith
with respect thereto, by a single qualified appraiser (which shall be either a
national accounting firm or a national or regional major investment bank)
selected by mutual agreement between the Company and the Holder) of the portion
of the assets or evidences of indebtedness so to be distributed to one share of
Common Stock.
(c) Effect of Merger or Consolidation. If the Company shall, while this
Warrant remains outstanding, enter into any consolidation with or merge into any
other corporation wherein the Company is not the continuing corporation, or
wherein cash or securities of a corporation other than the Company are
distributable to holders of Common Stock of the Company, or sell or convey its
property as an entirety or substantially as an entirety, and in connection with
such consolidation, merger, sale or conveyance, shares of stock or cash or other
securities shall be issuable or deliverable in exchange for the Common Stock of
the Company, the Holder shall thereafter be entitled to purchase pursuant to
this Warrant (in lieu of the number of shares of Common Stock that the Holder
would have been entitled to purchase or acquire immediately before the effective
date of such consolidation, merger, sale or conveyance) the shares of stock or
cash or other securities to which such number of shares of Common Stock would
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have been entitled at the time of such consolidation, merger, sale or
conveyance, at an aggregate purchase price equal to that which would have been
payable if such number of shares of Common Stock had been purchased upon
exercise of this Warrant immediately prior thereto. In case of any such
consolidation, merger, sale or conveyance, appropriate provision (as determined
by a resolution of the Board of Directors of the Company) shall be made with
respect to the rights and interests thereafter of the Holder, to the end that
all the provisions of this Warrant (including adjustment provisions) shall
thereafter be applicable as nearly as reasonably practicable, in relation to
such stock or other securities.
(d) Reorganization and Reclassification. In case of any capital
reorganization or any reclassification of the capital stock of the Company
(except as provided in Sections 10(a) and (c) hereof) while this Warrant remains
outstanding, the Holder shall thereafter be entitled to purchase pursuant to
this Warrant (in lieu of the number of shares of Common Stock that the Holder
would have been entitled to purchase immediately before such reorganization or
reclassification) the shares of stock of any class or classes or other
securities or cash or property to which such number of shares of Common Stock
would have been entitled if such shares of Common Stock had been purchased
immediately before such reorganization or reclassification. In case of any such
reorganization or reclassification, appropriate provision (as determined by
resolution of the Board of Directors of the Company) shall be made with respect
to the rights and interests thereafter of the Holder, to the end that all the
provisions of this Warrant (including adjustment provisions) shall thereafter be
applicable, as nearly as reasonably practicable, in relation to such stock or
other securities or property.
(e) Adjustment of Number of Shares after a "Diluting Issue". If on any
date on or after the date of this Warrant any additional shares of Common Stock
(other than shares of Excluded Stock) (hereinafter, "Equity Stock") shall be
issued for a consideration per share (or, in the case of any transactions
contemplated in paragraphs (2) or (3) of this Section 10(e), shall be deemed to
be issued for a Presumed Consideration per share) less than the Current Price on
the date such Common Stock was issued or deemed to have been issued, the number
of shares of Common Stock purchasable hereunder shall be adjusted as at the
close of business on such date to a number equal to the product (computed to the
nearest ten thousandth of a share) resulting from the multiplication of (i) the
total number of shares of Common Stock purchasable hereunder immediately before
such adjustment by (ii) a fraction determined as follows (and in such event, the
number of shares of Common Stock reserved for issuance upon conversion shall be
appropriately and concurrently increased):
(x) the numerator of which shall be the number of shares of
Common Stock outstanding immediately prior to such issuance, plus the
number of shares of Common Stock issued or issuable in connection with
such Equity Stock offering, and
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(y) the denominator of which shall be the number of shares of
Common Stock outstanding immediately prior to such issuance, plus the
number of shares of Common Stock which the aggregate consideration
received by the Company for such Equity Stock so offered would purchase
at the then Current Price.
For the purpose of this Section 10(e), the following provisions shall
be applicable with respect to the issuance of additional shares of Common Stock
and the computation set forth in the immediately preceding paragraph:
(1) Stock Dividends, etc. In case any additional shares of
Common Stock shall be issued as a dividend on Common Stock, the number
of shares of Common Stock purchasable hereunder shall be adjusted as
provided in Section 10(a) hereof.
In case any additional shares of Common Stock shall be issued
as a dividend on any class of stock of the Company other than Common
Stock, or in case any obligations or stock convertible into or
exchangeable for shares of Common Stock (such convertible or
exchangeable obligations or stock being hereinafter called "Convertible
Securities") shall be issued as a dividend on any class of stock of the
Company, such shares of Common Stock or Convertible Securities shall be
deemed to have been issued without consideration on the day next
succeeding the date for the determination of stockholders entitled to
such dividend.
(2) Rights or Options below Current Price. In case the Company
shall on or after the date of this Warrant grant any rights or options
(other than those exercisable for Excluded Stock) to subscribe for or
to purchase additional shares of Common Stock or Convertible
Securities, and the Presumed Consideration per share received and
receivable by the Company for such additional shares under such rights
or options or pursuant to the terms of such Convertible Securities
shall be less than the Current Price in effect immediately prior to the
time of the granting of such rights or options, the maximum number of
additional shares of Common Stock issuable pursuant to such rights or
options or necessary to effect the conversion or exchange of all such
Convertible Securities shall be deemed to have been issued as of the
date of the granting of such rights or options, and the Company shall
be deemed to have received the Presumed Consideration therefor. No
adjustment (except as provided in paragraph (4) of this Section 10(e))
shall be made upon the actual issuance of Common Stock upon the
exercise of rights or options referenced in this paragraph (2) or the
conversion of Convertible Securities referenced in this paragraph (2).
(3) Securities Convertible below Current Price. In case:
(i) the Company shall issue any Convertible
Securities (other than those convertible into Excluded Stock
or
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pursuant to the exercise of rights or options therefor in
respect of which an adjustment shall have theretofore been
made under the foregoing paragraph (2)), and
(ii) the Presumed Consideration per share for
additional shares of Common Stock issuable pursuant to the
terms of such Convertible Securities shall be less than the
Current Price in effect immediately prior to the time of the
issuance of such Convertible Securities,
then the issuance of such Convertible Securities shall be deemed to be
an issuance (as of the date of issuance of such Convertible Securities)
of the maximum number of additional shares of Common Stock necessary to
effect the conversion or exchange of all such Convertible Securities,
and the Company shall be deemed to have received the Presumed
Consideration therefor as of the date of issuance of such Convertible
Securities. No further adjustment, except as provided in paragraph (4)
of this Section 10(e), shall be made upon the actual issuance of Common
Stock upon the conversion of Convertible Securities.
(4) Superseding Adjustment of Number of Shares of Common Stock
Purchasable Hereunder. If, at any time and from time to time after any
adjustment of the shares of Common Stock purchasable hereunder shall
have been made on the basis of shares of Common Stock deemed to be
issued by reason of the provisions of the foregoing paragraphs (2) or
(3) of this Section 10(e) on the basis of the granting of certain
rights or options or the issuance of certain Convertible Securities, or
after any new adjustments of the number of shares of Common Stock
purchasable hereunder shall have been made on the basis of shares of
Common Stock deemed to be issued by reason of the provisions of this
paragraph (4), such rights or options or the right of conversion or
exchange in any such Convertible Securities (for which, or purchased
pursuant to any rights or options for which, such an adjustment shall
previously have been made) shall expire, and a portion of such rights
or options, or the right of conversion or exchange in respect of a
portion of such Convertible Securities, as the case may be, shall not
have been exercised, then such previous adjustment shall be rescinded
and annulled and the shares of Common Stock that 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 such
Convertible Securities on the basis of:
(i) treating the number of additional shares of
Common Stock, if any, theretofore actually issued pursuant to
the exercise of such expired rights or options or such expired
right of conversion or exchange, as having been issued on the
date or dates
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of such exercise for the consideration actually received
therefor (computed as provided in paragraph (6) of this
Section 10(e)); and
(ii) treating the maximum number of additional shares
of Common Stock, if any, thereafter issuable pursuant to the
conversion or exchange of any Convertible Securities actually
issued or issuable pursuant to the previous exercise of such
rights or options as having been issued as of the date of the
granting of such rights or options and treating the Presumed
Consideration therefor as received as of such date;
and, on such basis, such new adjustment, if any, of the number of
shares of Common Stock purchasable hereunder shall be made as may be
required by the first paragraph of this Section 10(e), which new
adjustment shall supersede the previous adjustment so rescinded and
annulled for the Warrant exercised after such new adjustment.
(5) Effect of "Split-up" or "Split-down" on "Deemed Issued"
Shares. Upon the effective or record date for any subdivision or
combination of the Common Stock of the character described in Section
10(a) hereof, including the issuance of a stock dividend which is
treated as such a subdivision under paragraph (1) of this Section
10(e), the number of the shares of Common Stock which are at the time
deemed to have been issued by virtue of paragraphs (2), (3) or (4) of
this Section 10(e), but have not actually been issued, shall be deemed
to be increased or decreased proportionately.
(6) Computation of Consideration and Presumed Consideration.
For the purposes of this Section 10:
(i) The consideration received by the Company upon
the actual issuance of additional shares of Common Stock shall
be deemed to be the sum of the amount of cash and the fair
value of property (as determined in good faith by the Board of
Directors of the Company, provided that a majority of the
independent directors of the Board shall have concurred, or
upon the failure of such Board of Directors to act in good
faith with respect thereto, by a single qualified appraiser
(which shall be either a national accounting firm or a
national or regional major investment bank) selected by mutual
agreement between the Company and the Holder as at the time of
issue or "deemed issue" in the case of the following paragraph
(ii)) received or receivable by the Company as the
consideration or part of the consideration (v) at the time of
issuance of the Common Stock, (w) for the issuance of any
rights or options upon the exercise or conversion of which
such Common Stock was issued, (x) for the issuance of any
rights or options to purchase Convertible Securities upon the
conversion of which such Common Stock was issued, (y) for the
issuance of the Convertible
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Securities upon conversion of which such Common Stock was
issued and (z) at the time of the actual exercise of such
rights, options or conversion privileges upon the exercise or
conversion of which such Common Stock was issued, in each case
without deduction for commissions and expenses incurred by the
Company for any underwriting or, or otherwise in connection
with the issue or sale of, such rights, options, Convertible
Securities or Common Stock, but after deduction of any sums
paid by the Company in cash upon the exercise of, and pursuant
to, such rights, options or conversion privileges in respect
of fractional shares of Common Stock; and
(ii) The consideration deemed to have been received
by the Company for additional shares of Common Stock deemed to
be issued pursuant to rights, options and conversion
privileges by reason of transactions or the character
described in paragraphs (2), (3) and (4)(ii) of this Section
10(e) (herein called the "Presumed Consideration" therefor)
shall be the consideration (determined as provided in the
foregoing paragraph (i)) that would be received or receivable
by the Company at or before the actual issue of such shares of
Common Stock so deemed to be issued, if all rights, options
and conversion privileges necessary to effect the actual issue
of the number of shares deemed to have been issued had been
exercised (successively exercised in the case of rights or
options to purchase Convertible Securities), and the minimum
consideration received or receivable by the Company upon such
exercise had been received; all computed without regard to the
possible future effect of anti-dilution provisions on such
rights, options and/or conversion privileges.
(f) Statement of Adjustment of Number of Shares Purchasable Hereunder
and Current Price. Whenever the number of shares of Common Stock purchasable
hereunder is adjusted pursuant to any of the foregoing provisions of this
Section 10, the Company shall promptly prepare a written statement signed by the
chief executive officer of the Company, setting forth the adjustment in the
number of shares purchasable hereunder, determined as provided in this Section,
and the amount of the then effective Current Price, and in reasonable detail the
facts requiring such adjustment and the calculation thereof. Such statement
shall be filed among the permanent records of the Company and a copy thereof
shall be furnished to the Holder without request and shall at all reasonable
times during business hours be open to inspection by the Holder. The Company
shall also promptly cause a notice, stating that such an adjustment has been
effected and setting forth the increased or decreased number of shares
purchasable and the amount of the then effective Current Price, to be delivered
by facsimile, reliable courier or first-class mail postage prepaid to the
Holder.
-13-
(g) Determination by the Board of Directors. All determinations by the
Board of Directors of the Company under the provisions of this Section 10 shall
be made in good faith with due regard to the interests of the Holder and the
other holders of securities of the Company and in accordance with good financial
practice, and all valuations made by the Board of Directors of the Company under
the terms of this Section 10 must be made with due regard to any market
quotations of securities involved in, or related to, the subject of such
valuation.
(h) Definitions. For all purposes of this Section 10 and this Warrant,
unless the context otherwise requires, the following terms have the following
respective meanings:
"Common Stock": (i) the Company's presently authorized Common
Stock as such class exists on the date of this Warrant; and (ii) stock
of the Company of any class thereafter authorized that ranks, or is
entitled to a participation, as to assets or dividends, substantially
on a parity with Common Stock.
"Company": Shepherd Surveillance Solutions, Inc., a Nevada
corporation, and any other corporation assuming the Company's
obligations with respect to this Warrant pursuant to this Section 10.
"Convertible Securities": the meaning specified in Section
10(e)(1).
"Current Price": per share of Common Stock, the amount equal
to the quotient resulting from dividing (i) the aggregate Exercise
Price herein provided by (ii) the number of shares (including any
fractional share) of Common Stock purchasable hereunder on such date.
The Current Price on the date of the issuance of this Warrant is $0.01
per share of Common Stock.
"Excluded Stock": shares of Common Stock issued (i) upon
exercise of this Warrant, (ii) in respect of which an adjustment is
required to be made pursuant to Section 10(a), (b), (c) or (d) hereof,
(iii) pursuant to the exercise or conversion of any options, warrants,
convertible securities or other securities issued and outstanding on
the date hereof, (iv) to any employee, director, officer, contractor or
consultant of the Company pursuant to an approval of the Board of
Directors of the Company or pursuant to any plan approved by the Board
of Directors of the Company, (v) in connection with an acquisition of a
business by the Company as a result of which the Company owns in excess
of 50% of the voting power with respect to such business or (vi) upon
the closing of an underwritten public offering pursuant to an effective
registration statement under the Securities Act of 1933 (or any
successor statute) covering the offer and sale of Common Stock (or of
any equity security that is part of a unit that includes Common Stock)
for the account of the Company.
-14-
"Presumed Consideration": the meaning specified in Section
10(e)(6)(ii).
Section 11. Registration Rights.
(a) Registrable Stock. As used in this Section 11, the term
"Registrable Stock" shall mean (i) all shares of Common Stock that may be issued
upon exercise of this Warrant (and all shares of Common Stock that may
thereafter be issued in respect of such Warrant) that is from time to time
outstanding.
References in this Warrant to rules, regulations and forms promulgated
by the Securities and Exchange Commission shall include rules, regulations and
forms succeeding to the functions thereof, whether or not bearing the same
designation.
The rights and obligations of the Company and the Holder with respect
to the Registrable Stock set forth in this Section 11 shall supersede any
registration rights and obligations of the Company and the Holder existing prior
to the date hereof with respect to the Registrable Stock.
(b) Request for Registration. If the Company shall receive a written
request (specifying that it is being made pursuant to this Section 11(b)), at
any time from the holders of more than 50% of the Registrable Stock that the
Company file a registration statement under the 1933 Act, or a similar document
pursuant to any other statute then in effect corresponding to the 1933 Act
covering the registration of at least 20% of the Registrable Stock, then the
Company shall promptly notify all other holders of Registrable Stock of such
request and shall use its reasonable best efforts to cause all Registrable Stock
(and any other securities of the Company that such holders may own) that holders
have requested be registered to be registered under the 1933 Act.
Notwithstanding the foregoing, (i) the Company shall not be obligated
to effect a registration pursuant to this Section 11(b) during the period
starting with the date 60 days prior to the Company's estimated date of filing
of, and ending on a date 180 days following the effective date of a registration
statement pertaining to an underwritten public offering or securities for the
account of the Company, provided that no other selling stockholder has the right
to exercise demand registration rights during such time period and the Company
is actively employing in good faith all reasonable efforts to cause such
registration statement to become effective and that the Company's estimate of
the date of filing such registration statement is made in good faith; (ii) if
the Company shall furnish to such holders a certificate signed by the chief
executive officer of the Company stating that in the good faith judgment of the
Board of Directors it would be seriously detrimental to the Company or its
shareholders for a registration statement to be filed in the near future, then
the Company's obligation to use its best efforts to file a registration
statement shall be deferred for a period not to exceed six months, (iii) the
Company shall not be obligated to
-15-
effect a registration pursuant to this Section 11(b) relating to a delayed or
continuous offering under Rule 415 of the 1933 Act (or any successor rule
thereunder); provided, however, that a registration on Form S-3 may be effected
at such time if requested by such holders and if the Company is entitled to use
Form S-3 to register such shares.
The Company shall not be obligated to effect more than three
registrations pursuant to this Section 11(b). The registration statement filed
pursuant to this Section 11(b) may, subject to the provisions hereof, include
other securities of the Company with respect to which registration rights have
been granted, and may include securities of the Company being sold for the
account of the Company.
(c) Company Registration. Subject to Section 11(g), if at any time the
Company proposes to register any of its Common Stock under the 1933 Act in
connection with the public offering of such securities solely for cash on a form
that would also permit the registration of the Registrable Stock, the Company
shall, each such time and without limitation as to the number of times, promptly
give each holder of Registrable Stock written notice of such determination. Upon
the written request of any holder, given within 20 days after mailing of any
such notice by the Company, the Company shall use its reasonable best efforts to
cause to be registered under the 1933 Act all of the Registrable Stock (and any
other securities of the Company that such holders may own) that each such holder
has requested be registered.
(d) Obligations of the Company. Whenever required under Sections 11(b),
11(c) or 11(j) to use its reasonable best efforts to effect the registration of
any Registrable Stock, the Company shall, as expeditiously as reasonably
possible:
(1) prepare and file with the Securities and Exchange
Commission a registration statement with respect to such Registrable
Stock and use its reasonable best efforts to cause such registration
statement to become and remain effective for no more than 180 days at
the Company's expense, provided, however, that the holders of
Registrable Securities may extend the effectiveness of any such
registration statement at their own cost and expense;
(2) prepare and file with the Securities and Exchange
Commission such amendments and supplements to such registration
statement and the prospectus used in connection with such registration
statement as may be necessary to comply with the provisions of the 1933
Act with respect to the disposition of all securities covered by such
registration statement;
(3) furnish to the holders of Registrable Stock such numbers
of copies of a prospectus, including a preliminary prospectus, in
conformity with the requirements of the 1933 Act, and such other
documents as they
-16-
may reasonably request in order to facilitate the disposition of
Registrable Stock owned by them; and
(4) use its reasonable best efforts to register and qualify
the securities covered by such registration statement under such other
securities or Blue Sky Laws of such jurisdictions as shall be
reasonably appropriate for the distribution of the securities covered
by the registration statement; provided, that the Company shall not be
required in connection therewith or as a condition thereto to qualify
to do business or to file a general consent to service of process in
any such states or jurisdictions; and further, provided, that if any
jurisdiction in which the securities shall be qualified shall require
that expenses incurred in connection with the qualification of the
securities in that jurisdiction be borne by selling shareholders, then
such expenses shall be payable by selling shareholders pro rata, to the
extent required by such jurisdiction.
(e) Furnish Information. It shall be a condition precedent to the
obligations of the Company to take any action pursuant to this Section 11 that
the holders of Registrable Stock shall furnish to the Company such information
regarding them, the Registrable Stock held by them and the intended method of
disposition of such securities as the Company shall reasonably request and as
shall be required in connection with the action to be taken by the Company.
(f) Expenses of Registration. All expenses incurred in connection with
a registration pursuant to Sections 11(b) or 11(c) (excluding underwriters'
discounts and commissions), including, without limitation, all registration and
qualification fees, printers, and accounting fees, fees and disbursements of
counsel for the Company and the reasonable fees and disbursements of one counsel
for the selling holders, shall be borne by the Company; provided, however, that
the Company shall not be required to pay for any expenses of any registration
proceeding begun pursuant to Section 11(b) if the registration request is
subsequently withdrawn, unless the holders agree to forfeit their right to
demand registration pursuant to Section 11(b).
(g) Underwriting Requirements. (i) In connection with any offering
initiated by the Company involving an underwriting of shares being issued by the
Company, the Company shall not be required under Section 11(c) to include any of
the holders' Registrable Stock in such underwriting unless they accept the terms
of the underwriting as agreed upon between the Company and the underwriters
selected by it, and then only in such quantity as will not, in the written
opinion of the underwriters, jeopardize the success of the offering by the
Company. If the total amount of securities that all holders request to be
included in such offering exceeds the amount of securities that the underwriters
reasonably believe compatible with the success of the offering, the Company
shall only be required to include in the offering so many of the securities of
the selling holders as the underwriters believe will not jeopardize the success
of the offering, shall so advise all selling holders of Registrable Stock and
the number of shares of securities that are entitled to be included in the
offering
-17-
and underwriting shall be allocated first, to the Company for securities being
sold for its own account, second, among all selling holders of Registrable Stock
and other securities of the Company held by such holders and, third, among all
other selling stockholders, in each case in proportion, as nearly as
practicable, to the respective total amounts of securities owned by said selling
holders of Registrable Stock and other selling stockholders. If any selling
holder of Registrable Stock or any other selling stockholder disapproves of the
terms of any such underwriting, he, she or it may elect to withdraw therefrom by
written notice to the Company and the underwriter.
(ii) In connection with any offering initiated by any holders of
Registrable Stock involving an underwriting of shares being sold by such holders
of Registrable Stock, such holders shall not be required under Section 11(b) to
include any shares being issued by the Company or sold by any other selling
stockholders in such underwriting unless the Company and such other selling
stockholders accept the terms of the underwriting as agreed upon between such
holders of Registrable Stock and the underwriters selected by it and reasonably
acceptable to the Company, and then only in such quantity as will not, in the
written opinion of the underwriters, jeopardize the success of the offering by
such holders. If the total amount of securities that all holders request to be
included in such offering exceeds the amount of securities that the underwriters
reasonably believe compatible with the success of the offering, the holders of
Registrable Stock shall only be required to include in the offering so many of
the securities of the Company as the underwriters believe will not jeopardize
the success of the offering, shall so advise the Company and such other selling
stockholders, and the number of shares of securities that are entitled to be
included in the offering and underwriting shall be allocated first, among all
such selling holders of Registrable Stock and other securities of the Company
held by such holders, second, to the Company for securities being sold for its
own account and, third, among all other selling stockholders, in each case in
proportion, as nearly as practicable, to the respective total amounts of
securities owned by such other selling stockholders. If the Company or any other
selling stockholder disapproves of the terms of any such underwriting, he, she
or it may elect to withdraw therefrom by written notice to the holders of
Registrable Stock and the underwriter.
(h) Delay of Registration. No holders of Registrable Stock shall have
any right to take any action to restrain, enjoin or otherwise delay any
registration as the result of any controversy that might arise with respect to
the interpretation or implementation of this Section 11.
(i) Indemnification. In the event any shares of Registrable Stock are
included in a registration statement under this Section 11:
(1) to the extent permitted by law, the Company will indemnify
and hold harmless each holder of Registrable Stock requesting or
joining in a registration, any underwriter (as defined in the ▇▇▇▇ ▇▇▇)
for it and
-18-
each person, if any, who controls such holder or underwriter within the
meaning of the 1933 Act, against any losses, claims, damages or
liabilities, joint or several, to which they may become subject under
the 1933 Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based
on any untrue or alleged untrue statement of any material fact
contained in such registration statement, including any preliminary
prospectus or final prospectus contained therein or any amendments or
supplements thereto, or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated
therein, or necessary to make the statements therein not misleading or
arise out of any violation by the Company of any rule or regulation
promulgated under the 1933 Act applicable to the Company and relating
to action or inaction required of the Company in connection with any
such registration; and will reimburse each such holder, such
underwriter or controlling person for any legal or other expenses
reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action; provided,
however, that the indemnity agreement contained in this Section
11(i)(1) shall not apply to amounts paid in settlement of any such
loss, claim, damage, liability or action if such settlement is effected
without the consent of the Company (which consent shall not be
unreasonably withheld) nor shall the Company be liable in any such case
for any such loss, claim, damage, liability or action to the extent
that it arises out of or is based upon an untrue statement or alleged
untrue statement or omission or alleged omission made in connection
with such registration statement, preliminary prospectus, final
prospectus, or amendments or supplements thereto, in reliance upon and
in conformity with written information furnished expressly for use in
connection with such registration by any such holder, underwriter or
controlling person;
(2) to the extent permitted by law, each holder requesting or
joining in a registration will indemnify and hold harmless the Company,
each of its directors, each of its officers who have signed the
registration statement, each person, if any, who controls the Company
within the meaning of the 1933 Act and each agent and any underwriter
for the Company (within the meaning of the ▇▇▇▇ ▇▇▇) against any
losses, claims, damages or liabilities to which the Company or any such
director, officer, controlling person, agent or underwriter may become
subject, under the 1933 Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereto) arise
out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in such registration
statement, including any preliminary prospectus or final prospectus
contained therein or any amendments or supplements thereto, or arise
out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, in each case to the extent,
but only to the extent, that such untrue
-19-
statement or alleged untrue statement or omission or alleged omission
was made in such registration statement, preliminary or final
prospectus, or amendments or supplements thereto, in reliance upon and
in conformity with written information furnished by such holder
expressly for use in connection with such registration; and each such
holder will reimburse any legal or other expenses reasonably incurred
by the Company or any such director, officer, controlling person, agent
or underwriter in connection with investigating or defending any such
loss, claim, damage, liability or action; provided, however, that the
indemnity agreement contained in this Section 11(i)(2) shall not apply
to amounts paid in settlement of any such loss, claim, damage,
liability or action if such settlement is effected without the consent
of such holder (which consent shall not be unreasonably withheld); and
(3) promptly after receipt by an indemnified party under this
paragraph of notice of the commencement of any action, such indemnified
party will, if a claim in respect thereof is to be made against any
indemnifying party under this paragraph, notify the indemnifying party
in writing of the commencement thereof and the indemnifying party shall
have the right to participate in, and, to the extent the indemnifying
party so desires, jointly with any other indemnifying party similarly
noticed, to assume the defense thereof with counsel mutually and
reasonably satisfactory to the parties. The failure to notify an
indemnifying party promptly of the commencement of any such action, if
prejudicial to his ability to defend such action, shall relieve such
indemnifying party of any liability to the indemnified party under this
paragraph, but the omission so to notify the indemnifying party will
not relieve him of any liability that he may have to any indemnified
party otherwise than under this paragraph. No indemnifying party, in
the defense of any such claim or litigation, shall, except with the
consent of each indemnified party, consent to entry of any judgment or
enter into any settlement that does not include as an unconditional
term thereof the giving by the claimant or plaintiff to such
indemnified party of a release from all liability in respect to such
claim or litigation. Each indemnified party shall furnish such
information regarding itself or the claim in question as an
indemnifying party may reasonably request in writing and as shall be
reasonably required in connection with defense of such claim and
litigation resulting therefrom.
(4) Notwithstanding the foregoing, to the extent that the
provisions on indemnification and contribution contained in any
underwriting agreement entered into connection with the underwritten
public offering are in conflict with the foregoing provisions, the
provisions in the underwriting agreement shall control.
(j) Registrations on Form S-3.
-20-
(1) If (i) holders of at least 25% of the Registrable Stock
request in writing (specifying that the request is being made pursuant
to this Section 11(j)) that the Company file a registration statement
on Form S-3 under the 1933 Act ("Form S-3") (or any successor form to
Form S-3 regardless of its designation) for a public offering of shares
of the Registrable Stock, the reasonably anticipated aggregate price to
the public of which would exceed $250,000, and (ii) the Company is a
registrant entitled to use Form S-3 to register such shares, then the
Company shall use its reasonable best efforts to cause such shares to
be registered on Form S-3 (or any successor form to Form S-3).
(2) All expenses incurred in connection with a registration
requested pursuant, to Section 11(j)(1) (excluding underwriters'
discounts and commissions), including, without limitation, all
registration, qualification, printing and accounting fees, and
reasonable fees and disbursements of one counsel for the selling holder
or holders and counsel for the Company, shall be borne by the Company.
(3) Holders, rights to registration under this Section 11(j)
shall be unlimited as to number of times exercised, are in addition to,
and not in lieu of, their rights to registration under sections 11(b)
and 11(c) and shall be subject to the provisions of Sections 11(d)
through 11(i).
(k) Reports Under Securities Exchange Act of 1934. With a view to
making available to the holders of Registrable Stock the benefits of Rule 144
promulgated under the 1933 Act and any other rule or regulation of the
Securities and Exchange Commission that may at any time permit a holder to sell
securities of the Company to the public without registration, the Company agrees
to use its reasonable best efforts to:
(1) file with the Securities and Exchange Commission in a
timely manner all reports and other documents required of the Company
under the 1933 Act and the Securities Exchange Act of 1934 ( the "1934
Act"); and
(2) furnish to any holder so long as such holder owns at least
5% of the Registrable Stock forthwith upon request a written statement
by the Company that it has complied with the reporting requirements of
Rule 144, a copy of the most recent annual or quarterly report of the
Company, and such other reports and documents so filed by the Company
as may be reasonably requested in availing any holder of any rule or
regulation of the Securities and Exchange Commission permitting the
selling of any such securities without registration.
(l) Lockup Agreement. In consideration for the Company's agreeing to
its obligations under this Section 11, the holder of Registrable Stock agrees in
connection with any registration of the Company's securities that, upon the
request of the Company or the underwriters managing any underwritten
-21-
offering of the Company's securities, not to, sell, make any short sale of,
loan, grant any option for the purchase of or otherwise dispose of any
Registrable Stock (other than those included in the registration) or other
capital stock in the Company, in transactions taking place during the lockup
period set forth below whereby securities of the Company may come to rest in the
public market, without the prior written consent of the Company or such
underwriters, as the case may be, for such period of time (not to exceed 180
days) from the effective date of such registration as the Company or the
underwriters may specify; provided, however, that all holders of 5% or more of
the Company's securities and all directors and officers shall be subject to the
restrictions set forth in this Section 11(l).
(m) Certain Limitations in Connection with Future Grants of
Registration Rights. From and after the date hereof, the Company shall not enter
into any agreement with any holder or prospective holder of any securities of
the Company providing for the granting to such holder of registration rights
unless such agreement:
(1) includes the equivalent of Section 11(l) as a term;
(2) includes a provision that, in the case of a public
offering involving an underwritten registered offering under Section
11(c), protects the holders of Registrable Stock if marketing factors
require a limitation on the number of securities to be included in the
underwriting in the manner in which the Company is protected under
Section 11(g); and
(3) does not grant to such holder or prospective holder
registration rights more favorable than those granted to the holders of
Registrable Stock under this Section 11.
(n) Transfer of Registration Rights. The registration rights of the
Holder of the Warrant under this Section 11 may be transferred to any transferee
who acquires at least 10% of the Registrable Stock, or the Warrant; provided,
however, that the Company is given written notice by the Holder at the time of
such transfer stating the name and address of the transferee and identifying the
securities with respect to which the rights under this Section 11 are being
assigned.
Section 12. Amendments.
Neither this Warrant nor any term hereof may be changed, waived,
discharged or terminated orally or in writing, provided that any term of this
warrant may be amended or the observance of such term may be waived (either
generally or in a particular instance and either retroactively or prospectively)
with, but only with, the written consent of the Company and the holders of
Warrants that are exercisable for a number of shares of Common Stock that
represent in the aggregate at least a majority of the total number of shares of
-22-
Common Stock for which all Warrants are then exercisable (whether or not the
holder of this warrant consents).
Section 13. Governing Law and Consent to Jurisdiction.
This Warrant shall be governed by the laws of the State of New York
without regard to its conflict of laws principles or rules. This Warrant shall
be deemed to have been executed and delivered at and shall be deemed to have
been made in New York, New York.
Any legal action, suit or proceeding arising out of or relating to this
Warrant may only be instituted in any federal court of the Southern District of
New York or any state court located in New York County, State of New York, and
the Company agrees not to assert, by way of motion, as a defense or otherwise,
in any action, suit or proceeding, any claim that it is not subject personally
to the jurisdiction of such courts, that the action, suit or proceeding if
brought in such courts, would be an inconvenient forum, that the venue of the
action, suit or proceeding, if brought in any of such courts, is improper or
that this Agreement or the subject matter may not be enforced in or by such
courts on jurisdictional grounds.
-23-
IN WITNESS WHEREOF, the Company has caused this Warrant to be signed in
its name by its duly authorized officer.
Dated: June 28, 1996
SHEPHERD SURVEILLANCE SOLUTIONS, INC.
By: /s/ M. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
---------------------------------
Name: M. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: President and CEO
-24-
SUBSCRIPTION NOTICE
The undersigned, the Holder, hereby elects to exercise purchase rights
represented by such Warrant for, and to purchase thereunder, ________________
shares of the Common Stock covered by such Warrant and herewith makes payment in
full therefor of $__________ cash and/or cancellation of $__________ of
indebtedness of the Company to the Holder hereof and requests that certificates
for such shares (and any securities or property deliverable upon such exercise)
be issued in the name of and delivered to________________________________ whose
address is _____________________________________________________ and whose
social security or employer identification number is __________________________.
The undersigned agrees that, in the absence of an effective
registration statement with respect to Common Stock issued upon this exercise,
the undersigned is acquiring such Common Stock for the Holder's own account and
not as a nominee for any other party, for investment and not with a view to
distribution thereof and that the certificate or certificates representing such
Common Stock may bear a legend substantially as follows:
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933 OR QUALIFIED UNDER APPLICABLE STATE SECURITIES LAWS. UNLESS THEY
ARE SOLD PURSUANT To RULE 144 PROMULGATED BY THE SECURITIES AND
EXCHANGE COMMISSION UNDER SAID ACT, THEY MAY NOT BE SOLD OR OTHERWISE
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION AND QUALIFICATION
WITHOUT AN OPINION OF COUNSEL FOR THE HOLDER, REASONABLY SATISFACTORY
TO COUNSEL FOR THE COMPANY, THAT SUCH REGISTRATION AND QUALIFICATION
ARE NOT REQUIRED.
In addition, the undersigned agrees that stop transfer instructions
will be entered on the Company's stock transfer records with respect to Common
Stock issued upon this exercise.
Dated:
------------------------------
Signature guaranteed:
-25-
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto _________________________________________ the rights represented by the
foregoing Warrant of _______________ and appoints ______________ attorney to
transfer said rights on the books of said corporation, with full power of
substitution in the premises.
Dated:
------------------------------
Signature guaranteed:
NOTICE: The signature to 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.