EXHIBIT 4.2
THIS WARRANT AND THE SECURITIES ISSUABLE UPON
EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, OR UNDER ANY APPLICABLE STATE SECURITIES LAWS,
AND MAY NOT BE SOLD OR OFFERED FOR SALE OR OTHERWISE
TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER SAID ACT AND ANY APPLICABLE STATE SECURITIES LAWS OR AN
OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE ISSUER THAT SUCH
REGISTRATION IS NOT REQUIRED.
WARRANT
TO PURCHASE
SHARES OF COMMON STOCK OF
TRI-S SECURITY
CORPORATION
Issue Date:
THIS CERTIFIES THAT
, for value received,
or (subject to the restrictions on transfer contained herein) its
registered assigns (the “ Holder ”) is entitled
to purchase from Tri-S Security Corporation, a Georgia corporation
(the “ Company ”), at any time or from time to
time after 9:00 a.m., Atlanta, Georgia time, after the date on
which Shareholder Approval (as hereinafter defined) is obtained and
prior to 5:00 p.m., Atlanta, Georgia time, on the date which
is the third anniversary of the Issue Date set forth above (the
“ Expiration Date ”), at the place where the
Warrant Agency (as hereinafter defined) is located, at the Exercise
Price (as hereinafter defined), the number of shares of common
stock, $0.001 par value per share (the “ Common Stock
”), of the Company specified above, all subject to adjustment
and upon the terms and conditions as hereinafter
provided.
Capitalized terms used and not
otherwise defined in this Warrant shall have the meanings set forth
in Article V hereof.
ARTICLE I
EXERCISE OF
WARRANTS
1.1.
Method of Exercise
. To exercise this Warrant in
whole or in part, after the date on which Shareholder Approval is
obtained, the Holder shall deliver to the Company at the Warrant
Agency: (a) this Warrant; (b) a written notice,
substantially in the form of the subscription notice attached
hereto as Annex 1 (the “ Subscription Notice
”), of such Holder’s election to exercise this Warrant,
which notice shall specify the number of shares of Common Stock to
be purchased, the denominations of the share certificate or
certificates desired and the name or names of the Eligible
Holder(s) in which such certificates are to be registered; and
(c) payment of the Exercise Price with respect to such shares
of Common Stock. Such payment may be made, at the option of
the Holder, by cash, money order, certified or bank cashier’s
check or wire transfer.
The Company shall, as promptly as
practicable and in any event within five (5) Business Days
thereafter, execute and deliver or cause to be executed and
delivered, in accordance with such subscription notice, a
certificate or certificates representing the aggregate number of
shares of Common Stock specified in said notice. The share
certificate or certificates so delivered shall be in such
denominations as may be specified in such notice (or, if such
notice shall not specify denominations, one certificate shall be
issued) and shall be issued in the name of the Holder or such other
name or names of Eligible Holder(s) as shall be designated in such
notice. Such certificate or certificates shall be deemed to
have been issued, and such Holder or any other person so designated
to be named therein shall be deemed for all purposes to have become
holders of record of such shares, as of the date the aforementioned
notice is received by the Company. If this Warrant shall have
been exercised only in part, the Company shall, at the time of
delivery of the certificate or certificates, deliver to the Holder
a new Warrant evidencing the right to purchase the remaining shares
of Common Stock called for by this Warrant, which new Warrant shall
in all other respects be identical with this Warrant. The
Company shall pay all expenses payable in connection with the
preparation, issuance and delivery of share certificates and new
Warrants as contemplated by Section 2.6 below (other than
transfer or similar taxes in connection with the transfer of
securities), except that, if share certificates or new Warrants
shall be registered in a name or names other than the name of the
Holder, funds sufficient to pay all transfer taxes payable as a
result of such transfer shall be paid by the Holder at the time of
delivering the aforementioned notice or promptly upon receipt of a
written request of the Company for payment.
If this Warrant shall be surrendered
for exercise within any period during which the transfer books for
shares of the Common Stock of the Company or other securities
purchasable upon the exercise of this Warrant are closed for any
purpose, the Company shall not be required to make delivery of
certificates for the securities purchasable upon such exercise
until the date of the reopening of said transfer books.
1.2.
Shares To Be Fully Paid and
Nonassessable . All
shares of Common Stock issued upon the exercise of this Warrant
shall be validly issued, fully paid and nonassessable.
1.3.
No Fractional Shares To Be
Issued . The
Company shall not be required to issue fractions of shares of
Common Stock upon exercise of this Warrant. If any fraction
of a share would, but for this Section, be issuable upon any
exercise of this Warrant, in lieu of such fractional share the
Company shall issue to the Holder a whole share of Common
Stock.
1.4.
Securities Laws; Share
Legend . The
Holder, by acceptance of this Warrant, agrees that this Warrant and
all shares of Common Stock issuable upon exercise of this Warrant
will be disposed of only in accordance with the Securities Act of
1933, as amended (the “ Securities Act ”) and
the rules and regulations of the Securities and Exchange
Commission (the “ Commission ”) promulgated
thereunder. In addition to any other legend which the Company
may deem advisable under the Securities Act and applicable state
securities laws, all certificates representing shares of Common
Stock (as well as any other securities issued hereunder in respect
of any such shares) issued upon exercise of this Warrant shall be
endorsed as follows:
2
THE SECURITIES REPRESENTED BY THIS
CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR UNDER ANY APPLICABLE STATE SECURITIES LAWS,
AND MAY NOT BE SOLD OR OFFERED FOR SALE OR OTHERWISE
TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER SAID ACT AND ANY APPLICABLE STATE SECURITIES LAWS OR AN
OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE ISSUER THAT SUCH
REGISTRATION IS NOT REQUIRED.
Any certificate issued at any time
in exchange or substitution for any certificate bearing such legend
(except a new certificate issued upon completion of a public
distribution pursuant to a registration statement under the
Securities Act) shall also bear such legend unless, in the opinion
of counsel (in form and substance reasonably satisfactory to the
Company) selected by the Holder of such certificate and reasonably
acceptable to the Company, the securities represented thereby need
no longer be subject to restrictions on resale under the Securities
Act.
ARTICLE II
WARRANT AGENCY; TRANSFER,
EXCHANGE AND
REPLACEMENT OF WARRANT
2.1.
Warrant Agency
. Until such time, if any, as
an independent agency shall be appointed by the Company to perform
services described herein with respect to this Warrant (the “
Warrant Agency ”), the Company shall perform the
obligations of the Warrant Agency provided herein at its principal
office address or such other address as the Company shall specify
by prior written notice to the Holder.
2.2.
Ownership of Warrant
. The Company may deem and
treat the person in whose name this Warrant is registered as the
holder and owner hereof (notwithstanding any notations of ownership
or writing hereon made by any person other than the Company) for
all purposes and shall not be affected by any notice to the
contrary, until presentation of this Warrant for registration of
transfer as provided in this Article II.
2.3.
Transfer of Warrant
. This Warrant may only be
transferred to a purchaser subject to and in accordance with this
Section 2.3, and any attempted transfer which is not in
accordance with this Section 2.3 shall be null and void and
the transferee shall not be entitled to exercise any of the rights
of the holder of this Warrant. The Company agrees to maintain
at the Warrant Agency books for the registration of such transfers
of Warrants, and transfer of this Warrant and all rights hereunder
shall be registered, in whole or in part, on such books, upon
surrender of this Warrant at the Warrant Agency in accordance with
this Section 2.3, together with: (i) a written assignment
of this Warrant, substantially in the form of the assignment
attached hereto as Annex 2 , duly executed by the
Holder or its duly authorized agent or attorney-in-fact, with
signatures guaranteed by a bank or trust company or a broker or
dealer registered with the NASD, and funds sufficient to pay any
transfer taxes payable upon such transfer; and (ii) an
investment representation letter, in form and substance acceptable
to the Company, executed by the assignee or assignees of this
Warrant. Upon surrender of this Warrant in accordance with
this Section 2.3, the Company (subject to being satisfied that
such transfer is in compliance with
3
Section 1.4) shall execute and deliver a
new Warrant or Warrants of like tenor and representing in the
aggregate the right to purchase the same number of shares of Common
Stock in the name of the assignee or assignees and in the
denominations specified in the instrument of assignment, and this
Warrant shall promptly be canceled. Notwithstanding the
foregoing, a Warrant may be exercised by a new Holder without
having a new Warrant issued. The Company shall not be
required to pay any Federal or state transfer tax or charge that
may be payable in respect of any transfer of this Warrant or the
issuance or delivery of certificates for Common Stock in a name
other than that of the registered Holder of this
Warrant.
2.4.
Division or Combination of
Warrants . This
Warrant may be divided or combined with other Warrants, in
connection with the partial exercise of this Warrant, upon
surrender hereof and of any Warrant or Warrants with which this
Warrant is to be combined at the Warrant Agency, together with a
written notice specifying the names and denominations in which the
new Warrant or Warrants are to be issued, signed by the Holders
hereof and thereof or their respective duly authorized agents or
attorneys-in-fact. Subject to compliance with
Section 2.3 as to any transfer which may be involved in the
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.
2.5.
Loss, Theft, Destruction of
Warrant Certificates . Upon receipt by the Company of evidence
reasonably satisfactory to the Company of the loss, theft,
destruction or mutilation of this Warrant and, in the case of any
such loss, theft or destruction, upon receipt of indemnity or
security (in customary form) reasonably satisfactory to the
Company, or, in the case of any such mutilation, upon surrender and
cancellation of such Warrant and upon reimbursement of the
Company’s reasonable incidental expenses, the Company will
make and deliver, in lieu of such lost, stolen, destroyed or
mutilated Warrant, a new Warrant of like tenor and representing the
right to purchase the same aggregate number of shares of Common
Stock.
2.6.
Expenses of Delivery of
Warrants . Except
as otherwise expressly provided herein, the Company shall pay all
expenses (other than transfer taxes as described in
Section 2.3) and other charges payable in connection with the
preparation, issuance and delivery of Warrants hereunder and shares
of Common Stock upon the exercise hereof.
ARTICLE III
LIMITATIONS ON EXERCISE;
ADJUSTMENT PROVISIONS
3.1
Shareholder Approval
. In no event shall the
Hol
