Pre-Effective Amendment to Registration of Securities by a Small-Business Issuer — Form SB-2
Filing Table of Contents
Document/Exhibit Description Pages Size
1: SB-2/A Pre-Effective Amendment to Registration of HTML 574K
Securities by a Small-Business Issuer
2: EX-4.2 Instrument Defining the Rights of Security Holders 2 9K
3: EX-4.4 Instrument Defining the Rights of Security Holders 3 13K
4: EX-4.5 Instrument Defining the Rights of Security Holders 16 66K
5: EX-10.15 Material Contract 2 13K
6: EX-10.16 Material Contract 4 23K
7: EX-10.17 Material Contract 3 15K
8: EX-10.18 Material Contract 1 8K
9: EX-23.2 Consent of Experts or Counsel 1 5K
EX-4.5 — Instrument Defining the Rights of Security Holders
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Exhibit 4.5
WARRANT AND UNIT AGREEMENT
TASER International, Inc., 7860 E. McClain Drive, Suite 2, Scottsdale, Arizona
85260, a Delaware corporation ("Company"), and US Stock Transfer Corporation,
_________________________, Glendale, California, a _________ corporation
("Transfer Agent"), agree as follows:
1. PURPOSE. The Company proposes to publicly offer and issue in an initial
public offering (the "Offering") ____________ units ("Units"). Each Unit will
entitle the registered holder of a Unit ("Unit Holder") to (i) one (1) share of
the Company's $0.00001 par value common stock ("Share") and (ii) one (1) warrant
permitting the purchase of one (1) Share ("Warrant").
2. WARRANTS. Each Warrant will entitle the registered holder of a Warrant
("Warrant Holder") to purchase from the Company one (1) Share at one hundred
fifty percent (150%) of the Initial Public Offering price of the Units
("Exercise Price"). A Warrant Holder may exercise all or any number of Warrants
resulting in the purchase of a whole number of Shares.
3. EXERCISE PERIOD. The Warrants may be exercised at any time during the
period commencing thirty (30) days after the effective date ("Offering Date") of
the Offering ("Exercise Date") and ending at 3:00 p.m., Denver Colorado time on
the fifth (5th) anniversary date of the closing of the Offering ("Expiration
Date") except as changed by Section 15 of this Agreement.
4. NON-DETACHABILITY. A Warrant Certificate (as defined below) may not be
detached from a Share certificate contained in a Unit for at least thirty (30)
days following the Offering Date. Until such time, a Warrant Certificate may be
split up, combined, exchanged or transferred on the books of the Transfer Agent
only together with a Share certificate. Paulson Investment Company, Inc. will
then determine when the Units separate, after which the Shares and Warrants will
trade separately.
5. CERTIFICATES. The Warrant certificates shall be in registered form only
and shall be substantially in the form set forth in Exhibit A attached to this
Agreement ("Warrant Certificate"). The Unit certificates shall be in registered
form only and shall be substantially in the form set forth in Exhibit B attached
to this Agreement ("Unit Certificate"). Warrant and Unit Certificates shall be
signed by, or shall bear the facsimile signature of, the Chief Executive
Officer, President or a Vice President of the Company and the Secretary or an
Assistant Secretary of the Company. If any person, whose facsimile signature has
been placed upon any Warrant or Unit Certificate or the signature of an officer
of the Company, shall have ceased to be such officer before such Warrant or Unit
Certificate is countersigned, issued and delivered, such Warrant or Unit
Certificate shall be countersigned, issued and delivered with the same effect as
if such person had not ceased to be such officer. Any Warrant or Unit
Certificate may be signed by, or made to bear the facsimile signature of, any
person who at the actual date of the preparation of such Warrant or Unit
Certificate shall be a proper officer of the Company to sign such Warrant or
Unit Certificate, even though such person was not such an officer upon the date
of this Agreement.
6. ISSUANCE OF NEW CERTIFICATES. Notwithstanding any of the provisions of
his Agreement or the several Warrant or Unit Certificates to the contrary, the
Company may, at its
1-WARRANT AND UNIT AGREEMENT
option, issue new Warrant or Unit Certificates in such form as may be approved
by its Board of Directors to reflect any adjustment or change in the Exercise
Price or the number or kind of shares purchasable under the several Warrant or
Unit Certificates made in accordance with the provisions of this Agreement.
7. COUNTERSIGNING. Warrant and Unit Certificates shall be manually
countersigned by the Transfer Agent and shall not be valid for any purpose
unless so countersigned. The Transfer Agent hereby is authorized to countersign
and deliver to, or in accordance with the instructions of, any Warrant or Unit
Holder any Warrant or Unit Certificate, respectively, which is properly issued.
8. REGISTRATION OF TRANSFER AND EXCHANGES. The Transfer Agent will keep or
cause to be kept books for registration of ownership or transfer of Warrant and
Unit Certificates issued hereunder. Such registers shall show the names and
addresses of the respective holders of the Warrant and Unit Certificates and the
number of Warrants and Units evidenced by each such Warrant or Unit Certificate.
Subject to the provisions of Section 4, the Transfer Agent shall from time to
time register the transfer of any outstanding Warrant or Unit Certificate upon
records maintained by the Transfer Agent for such purpose upon surrender of such
Warrant or Unit Certificate to the Transfer Agent for transfer, accompanied by
appropriate instruments of transfer in form satisfactory to the Company and the
Transfer Agent and duly executed by the Warrant or Unit Holder or a duly
authorized attorney. Upon any such registration of transfer, a new Warrant or
Unit Certificate shall be issued in the name of and to the transferee and the
surrendered Warrant or Unit Certificate shall be cancelled.
9. EXERCISE OF WARRANTS.
a. Any one Warrant or any multiple of one Warrant evidenced by any
Warrant Certificate may be exercised on or after the Exercise Date and on or
before the Expiration Date. A Warrant shall be exercised by the Warrant Holder
by surrendering to the Transfer Agent the Warrant Certificate evidencing such
Warrant with the exercise form on the reverse of such Warrant Certificate duly
completed and executed and delivering to the Transfer Agent, by good check or
bank draft payable to the order of the Company, the Exercise Price for each
Share to be purchased.
b. Upon receipt of a Warrant Certificate with the exercise form thereon
duly executed together with payment in full of the Exercise Price (and an amount
equal to any applicable taxes or government charges) for the Shares for which
Warrants are then being exercised, the Transfer Agent shall requisition from any
transfer agent for the Shares, and upon receipt shall make delivery of,
certificates evidencing the total number of whole Shares for which Warrants are
then being exercised in such names and denominations as are required for
delivery to, or in accordance with the instructions of, the Warrant Holder. Such
certificates for the Shares shall be deemed to be issued, and the person to whom
such Shares are issued of record shall be deemed to have become a holder of
record of such Shares, as of the date of the surrender of such Warrant
Certificate and payment of the Exercise Price (and an amount equal to any
applicable taxes or government charges), whichever shall last occur, provided
that if the books of the Company with respect to the Shares shall be deemed to
be closed, the person to whom such Shares are issued of record shall be deemed
to have become a record holder of such Shares as of the date on which such books
shall next be open (whether before, on or after the Expiration Date). The
Company covenants and agrees
2-WARRANT AND UNIT AGREEMENT
that it shall not cause its stock transfer books to be closed for a period of
more than twenty (20) consecutive business days except upon consolidation,
merger, sale of all of its assets, dissolution or liquidation or as otherwise
provided by law.
c. In addition, if it is required by law and upon instruction by the
Company, the Transfer Agent will deliver to each Warrant Holder a prospectus
that complies with the provisions of Section 5 of the Securities Act, as
amended, and the Company agrees to supply the Transfer Agent with a sufficient
number of prospectuses to effectuate that purpose.
d. Any Warrant Certificate or Certificates may be exchanged at the
option of the holder thereof for another Warrant Certificate or Certificates of
different denominations, of like tenor and representing in the aggregate the
same number of Warrants, upon surrender of such Warrant Certificate or
Certificates, with the Form of Assignment duly filled in and executed, to the
Transfer Agent, at any time or from time-to-time after the close of business on
the date hereof and prior to the close of business on the Expiration Date. The
Transfer Agent shall promptly cancel the surrendered Warrant Certificate or
Certificates and deliver the new Warrant Certificate or Certificates pursuant to
the provisions of this Section.
e. If less than all the Warrants evidenced by a Warrant Certificate are
exercised upon a single occasion, a new Warrant Certificate for the balance of
the Warrants not so exercised shall be issued and delivered to, or in accordance
with, transfer instructions properly given by the Warrant Holder until the
Expiration Date.
f. All Warrant Certificates surrendered upon exercise of the Warrants
shall be cancelled.
g. Upon the exercise, or conversion of any Warrant, the Transfer Agent
shall account promptly to the Company with respect to Warrants exercised and
concurrently pay to the Company all moneys received by the Transfer Agent for
the purchase of securities or other property through the exercise of such
Warrants.
h. Expenses incurred by the Transfer Agent while acting in the capacity
as Transfer Agent, in accordance with this Agreement, will be paid by the
Company. A detailed accounting statement relating to the number of shares
exercised, names of registered Warrant Holder(s) and the net amount of exercise
funds remitted will be given to the Company with the payment of each exercise
amount.
10. REDEMPTION. Following three (3) months after the closing of the
Offering, the Warrants outstanding at the time of a redemption may be redeemed
at the option of the Company, in whole or in part on a pro-rata basis, at any
time if, at the time notice of such redemption is given by the Company as
provided in subsection a., below, the Daily Price has exceeded two hundred
percent (200%) of the Initial Public Offering Price for the ten (10) consecutive
trading days immediately preceding the date of such notice, at a price of $0.25
per Warrant (the "Redemption Price"). For the purpose of the foregoing sentence,
the term "Daily Price" shall mean, for any relevant day, the closing bid price
on that day as reported by the principal exchange or quotation system on which
prices for the Common Stock are reported. On the redemption date (the
"Redemption Date"), the
3-WARRANT AND UNIT AGREEMENT
holders of record of redeemed Warrants shall be entitled to payment of the
Redemption Price upon surrender of such redeemed Warrants to the Company at the
principal office of the Transfer Agent in Glendale, California.
a. Notice of redemption of Warrants shall be given at least thirty (30)
days prior to the Redemption Date by mailing, by registered or certified mail,
return receipt requested, a copy of such notice to the Transfer Agent and by
first class mail to all of the holders of record of Warrants at their respective
addresses appearing on the books or transfer records of the Company or such
other address designated in writing by the holder of record to the Transfer
Agent not less than forty (40) days prior to the Redemption Date.
b. From and after the Redemption Date, all rights of the Warrant
Holders (except the right to receive the Redemption Price) shall terminate, but
only if (i) no later than one day prior to the Redemption Date the Company shall
have irrevocably deposited with the Transfer Agent as paying agent a sufficient
amount to pay on the Redemption Date the Redemption Price for all Warrants
called for redemption and (ii) the notice of redemption shall have stated the
name and address of the Transfer Agent and the intention of the Company to
deposit such amount with the Transfer Agent no later than one day prior to the
Redemption Date.
c. The Transfer Agent shall pay to the holders of record of redeemed
Warrants all monies received by the Transfer Agent for the redemption of
Warrants to which the holders of record of such redeemed Warrants who shall have
surrendered their Warrants are entitled.
d. Any amounts deposited with the Transfer Agent that shall be
unclaimed after six (6) months after the Redemption Date may be withdrawn by the
Company, and thereafter the holders of the Warrants called for redemption for
which such funds were deposited shall look solely to the Company for payment.
The Company shall be entitled to the interest, if any, on funds deposited with
the Transfer Agent and the holders of redeemed Warrants shall have no right to
any such interest.
e. If the Company fails to make a sufficient deposit with the Transfer
Agent as provided above, the holder of any Warrants called for redemption may at
the option of the holder (i) by notice to the Company declare the notice of
redemption a nullity as to such holder, or (ii) maintain an action against the
Company for the Redemption Price. If the holder brings such an action, the
Company will pay reasonable attorneys' fees of the holder. If the holder fails
to bring an action against the Company for the Redemption Price within sixty
(60) days after the Redemption Date, the holder shall be deemed to have elected
to declare the notice of redemption to be a nullity as to such holder and such
notice shall be without any force or effect as to such holder. Except as
otherwise specifically provided in this subsection e., a notice of redemption,
once mailed by the Company, as provided in subsection a., shall be irrevocable.
11. TAXES. The Company will pay all taxes attributable to the initial
issuance of Shares upon exercise of Warrants. The Company shall not, however, be
required to pay any tax which may be payable in respect of any transfer involved
in any issue of Warrant or Unit Certificates or in the issue of any certificates
of Shares in the name other than that of the Warrant or Unit Holder upon the
exercise of any Warrant or Unit, as the case may be.
4-WARRANT AND UNIT AGREEMENT
12. MUTILATED OR MISSING CERTIFICATES. If any Warrant or Unit Certificate
is mutilated, lost, stolen or destroyed, the Company and the Transfer Agent may,
on such terms as to indemnity or otherwise as they may in their discretion
impose (which shall, in the case of a mutilated Warrant or Unit Certificate,
include the surrender thereof), and upon receipt of evidence satisfactory to the
Company and the Transfer Agent of such mutilation, loss, theft or destruction,
issue a substitute Warrant or Unit Certificate, respectively, of like
denomination or tenor as the Warrant or Unit Certificate so mutilated, lost,
stolen or destroyed. Applicants for substitute Warrant or Unit Certificates
shall comply with such other reasonable regulations and pay any reasonable
charges as the Company or the Transfer Agent may prescribe.
13. SUBSEQUENT ISSUE OF CERTIFICATES. Subsequent to their original
issuance, no Warrant or Unit Certificates shall be reissued except (i) such
Certificates issued upon transfer thereof in accordance with Section 8 hereof,
(ii) such Certificates issued upon any combination, split-up or exchange of
Warrant or Unit Certificates pursuant to Section 8 hereof, (iii) such
Certificates issued in replacement of mutilated, destroyed, lost or stolen
Warrant or Unit Certificates pursuant to Section 12 hereof, (iv) Warrant
Certificates issued upon the partial exercise of Warrant Certificates pursuant
to Section 9 hereof, and (v) Warrant Certificates issued to reflect any
adjustment or change in the Exercise Price or the number or kind of shares
purchasable thereunder pursuant to Section 6 hereof. The Transfer Agent is
hereby irrevocably authorized to countersign and deliver, in accordance with the
provisions of said Sections 6, 8, 9 and 12, the new Warrant or Unit
Certificates, as the case may be, required for purposes thereof, and the
Company, whenever required by the Transfer Agent, will supply the Transfer Agent
with Warrant and Unit Certificates duly executed on behalf of the Company for
such purposes.
14. RESERVATION OF SHARES. For the purpose of enabling the Company to
satisfy all obligations to issue Shares upon exercise of Warrants, the Company
will at all times reserve and keep available free from preemptive rights, out of
the aggregate of its authorized but unissued shares, the full number of Shares
which may be issued upon the exercise of the Warrants. The Company covenants all
shares which shall be so issuable, will upon issue be fully paid and
nonassessable by the Company and free from all taxes, liens, charges and
security interests with respect to the issue thereof. In the case of a Warrant
exercisable solely for securities listed on a securities exchange or for which
there are at least two (2) independent market makers, the Company may elect to
redeem Warrants submitted to the Transfer Agent for exercise for a price equal
to the difference between the aggregate low asked price, or closing price, as
the case may be, of the securities for which such Warrant is exercisable on the
date of such submission and the Exercise Price of such Warrants; in the event of
such redemption, the Company will pay to the holder of such Warrants the
above-described redemption price in cash within ten (10) business days after
receipt of notice from the Transfer Agent that such Warrants have been submitted
for exercise.
15. GOVERNMENTAL RESTRICTIONS. If any Shares issuable upon the exercise of
Warrants require registration or approval of any governmental authority, the
Company will use commercially reasonable efforts to secure such registration or
approval and, to the extent practicable, take action in anticipation of and
prior to the exercise of the Warrants necessary to permit a public offering of
the securities underlying the Warrants during the term of this Agreement;
provided that in no event shall such Shares be issued, and the Company shall
have the
5-WARRANT AND UNIT AGREEMENT
authority to suspend the exercise of all Warrants, until such registration or
approval shall have been obtained; but all Warrants, the exercise of which is
requested during any such suspension, shall be exercisable at the Exercise
Price. If any such period of suspension continues past the Expiration Date, all
Warrants, the exercise of which have been requested on or prior to the
Expiration Date, shall be exercisable upon the removal of such suspension until
the close of business on the business day immediately following the expiration
of such suspension.
16. ADJUSTMENTS OF NUMBER AND KIND OF SHARES PURCHASABLE AND EXERCISE
PRICE. The number and kind of securities or other property purchasable upon
exercise of a Warrant shall be subject to adjustment from time to time upon the
occurrence, after the date hereof, of any of the following events:
a. In case the Company shall (i) pay a dividend in, or make a
distribution of, shares of capital stock on its outstanding Common Stock, (ii)
subdivide its outstanding shares of Common Stock into a greater number of such
shares or (iii) combine its outstanding shares of Common Stock into a smaller
number of such shares, the total number of shares of Common Stock purchasable
upon the exercise of each Warrant outstanding immediately prior thereto shall be
adjusted so that the holder of any Warrant Certificate thereafter surrendered
for exercise shall be entitled to receive at the same aggregate Exercise Price
the number of shares of capital stock (of one or more classes) which such holder
would have owned or have been entitled to receive immediately following the
happening of any of the events described above had such Warrant been exercised
in full immediately prior to the record date with respect to such event. Any
adjustment made pursuant to this subsection shall, in the case of a stock
dividend or distribution, become effective as of the record date therefor and,
in the case of a subdivision or combination, be made as of the effective date
thereof. If, as a result of an adjustment made pursuant to this subsection, the
holder of any Warrant Certificate thereafter surrendered for exercise shall
become entitled to receive shares of two or more classes of capital stock of the
Company, the Board of Directors of the Company, (whose determination shall be
conclusive and shall be evidenced by a Board resolution filed with the Transfer
Agent) shall determine the allocation of the adjusted Exercise Price between or
among shares of such classes of capital stock.
b. In the event of a capital reorganization or a reclassification of
the Common Stock (except as provided in subsection a. above or subsection e.
below), any Warrant Holder, upon exercise of Warrants, shall be entitled to
receive, in substitution for the Common Stock to which he would have become
entitled upon exercise immediately prior to such reorganization or
reclassification, the shares (of any class or classes) or other securities or
property of the Company (or cash) that he would have been entitled to receive at
the same aggregate Exercise Price upon such reorganization or reclassification
if such Warrants had been exercised immediately prior to the record date with
respect to such event; and in any such case, appropriate provision (as
determined by the Board of Directors of the Company, whose determination shall
be conclusive and shall be evidenced by a certified Board resolution filed with
the Transfer Agent) shall be made for the application of this Section with
respect to the rights and interests thereafter of the Warrant Holders (including
but not limited to the allocation of the Exercise Price between or among shares
of classes of capital stock), to the end that this Section (including the
adjustments of the number of shares of Common Stock or other securities
purchasable and the Exercise Price thereof) shall thereafter be reflected, as
nearly as reasonably practicable, in all subsequent exercises of the Warrants
for any
6-WARRANT AND UNIT AGREEMENT
shares or securities or other property (or cash) thereafter deliverable upon the
exercise of the Warrants.
c. Whenever the number of shares of Common Stock or other securities
purchasable upon exercise of a Warrant is adjusted as provided in this Section,
the Company will promptly file with the Transfer Agent a certificate signed by a
Chairman of the Board or the Chief Executive Officer, the President or a Vice
President of the Company and by the Secretary or an Assistant Secretary of the
Company setting forth the number and kind of securities or other property
purchasable upon exercise of a Warrant, as so adjusted, stating that such
adjustments in the number or kind of shares or other securities or property
conform to the requirements of this Section, and setting forth a brief statement
of the facts accounting for such adjustments. Promptly after receipt of such
certificate, the Company, or the Transfer Agent at the Company's request, will
deliver, by first-class, postage prepaid mail, a brief summary thereof (to be
supplied by the Company) to the registered holders of the outstanding Warrant
Certificates; provided, however, that failure to file or to give any notice
required under this subsection, or any defect therein, shall not affect the
legality or validity of any such adjustments under this Section; and provided,
further, that, where appropriate, such notice may be given in advance and
included as part of the notice required to be given pursuant to Section 18
hereof.
d. In case of any consolidation of the Company with, or merger of the
Company into, another corporation (other than a consolidation or merger which
does not result in any reclassification or change of the outstanding Common
Stock), or in case of any sale or conveyance to another corporation of the
property of the Company as an entirety or substantially as an entirety, the
corporation formed by such consolidation or merger or the corporation which
shall have acquired such assets, as the case may be, shall execute and deliver
to the Transfer Agent a supplemental warrant agreement providing that the holder
of each Warrant then outstanding shall have the right thereafter (until the
expiration of such Warrant) to receive, upon exercise of such Warrant, solely
the kind and amount of shares of stock and other securities and property (or
cash) receivable upon such consolidation, merger, sale or transfer by a holder
of the number of shares of Common Stock of the Company for which such Warrant
might have been exercised immediately prior to such consolidation, merger, sale
or transfer. Such supplemental warrant agreement shall provide for adjustments
which shall be as nearly equivalent as may be practicable to the adjustments
provided in this Section. The above provision of this subsection shall similarly
apply to successive consolidations, mergers, sales or transfers.
The Transfer Agent shall not have any responsibility to determine the
correctness of any provision contained in any such supplemental warrant
agreement relating to either the kind or amount of shares of stock or securities
or property (or cash) purchasable by holders of Warrant Certificates upon the
exercise of their Warrants after any such consolidation, merger, sale or
transfer or of any adjustment to be made with respect thereto, but subject to
the provisions of Section 23 hereof, may accept as conclusive evidence of the
correctness of any such provisions, and shall be protected in relying upon, a
certificate of a firm of independent certified public accountants (who may be
the accountants regularly employed by the Company) with respect thereto.
e. Irrespective of any adjustments in the number or kind of shares
issuable upon exercise of Warrants, Warrant Certificates theretofore or
thereafter issued may continue to express
7-WARRANT AND UNIT AGREEMENT
the same price and number and kind of shares as are stated in the similar
Warrant Certificates initially issuable pursuant to this Agreement.
f. The Company may retain a firm of independent public accountants of
recognized standing, which may be the firm regularly retained by the Company,
selected by the Board of Directors of the Company or the Executive Committee of
said Board, and not disapproved by the Transfer Agent, to make any computation
required under this Section, and a certificate signed by such firm shall, in the
absence of fraud or gross negligence, be conclusive evidence of the correctness
of any computation made under this Section.
g. For the purpose of this Section, the term "Common Stock" shall mean
(i) the Common Stock or (ii) any other class of stock resulting from successive
changes or reclassifications of such Common Stock consisting solely of changes
in par value, or from par value to no par value, or from no par value to par
value. In the event that at any time as a result of an adjustment made pursuant
to this Section, the holder of any Warrant thereafter surrendered for exercise
shall become entitled to receive any shares of capital stock of the Company
other than shares of Common Stock, thereafter the number of such other shares so
receivable upon exercise of any Warrant shall be subject to adjustment from time
to time in a manner and on terms as nearly equivalent as practicable to the
provisions with respect to the Common Stock contained in this Section, and all
other provisions of this Agreement, with respect to the Common Stock, shall
apply on like terms to any such other shares.
h. The Company may, from time to time and to the extent permitted by
law, reduce the exercise price of the Warrants by any amount for a period of not
less than twenty (20) days. If the Company so reduces the exercise price of the
Warrants, it will give not less than fifteen (15) days' notice of such decrease,
which notice may be in the form of a press release, and shall take such other
steps as may be required under applicable law in connection with any offers or
sales of securities at the reduced price.
17. REDUCTION OF EXERCISE PRICE BELOW PAR VALUE. Before taking any action
that would cause an adjustment pursuant to Section 16 hereof reducing the
portion of the Exercise Price required to purchase one share of capital stock
below the then par value (if any) of a share of such capital stock, the Company
will use its best efforts to take any corporate action which, in the opinion of
its counsel, may be necessary in order that the Company may validly and legally
issue fully paid and non-assessable shares of such capital stock.
18. NOTICE TO WARRANT HOLDERS. In case the Company after the date hereof
shall propose (i) to offer to the holders of Common Stock, generally, rights to
subscribe to or purchase any additional shares of any class of its capital
stock, any evidences of its indebtedness or assets, or any other rights or
options or (ii) to effect any reclassification of Common Stock (other than a
reclassification involving merely the subdivision or combination of outstanding
shares of Common Stock) or any capital reorganization, or any consolidation or
merger to which the Company is a party and for which approval of any
stockholders of the Company is required, or any sale, transfer or other
disposition of its property and assets substantially as an entirety, or the
liquidation, voluntary or involuntary dissolution or winding-up of the Company,
then, in each such case, the Company shall file with the Transfer Agent and the
Company, or the Transfer Agent on its behalf,
8-WARRANT AND UNIT AGREEMENT
shall mail (by first-class, postage prepaid mail) to all registered holders of
the Warrant Certificates notice of such proposed action, which notice shall
specify the date on which the books of the Company shall close or a record be
taken for such offer of rights or options, or the date on which such
reclassification, reorganization, consolidation, merger, sale, transfer, other
disposition, liquidation, voluntary or involuntary dissolution or winding-up
shall take place or commence, as the case may be, and which shall also specify
any record date for determination of holders of Common Stock entitled to vote
thereon or participate therein and shall set forth such facts with respect
thereto as shall be reasonably necessary to indicate any adjustments in the
Exercise Price and the number or kind of shares or other securities purchasable
upon exercise of Warrants which will be required as a result of such action.
Such notice shall be filed and mailed in the case of any action covered by
clause (i) above, at least ten (10) days prior to the record date for
determining holders of the Common Stock for purposes of such action or, if a
record is not to be taken, the date as of which the holders of shares of Common
Stock of record are to be entitled to such offering; and, in the case of any
action covered by clause (ii) above, at least twenty (20) days prior to the
earlier of the date on which such reclassification, reorganization,
consolidation, merger, sale, transfer, other disposition, liquidation, voluntary
or involuntary dissolution or winding-up is expected to become effective and the
date on which it is expected that holders of shares of Common Stock of record on
such date shall be entitled to exchange their shares for securities or other
property deliverable upon such reclassification, reorganization, consolidation,
merger, sale, transfer, other disposition, liquidation, voluntary or involuntary
dissolution or winding-up. Failure to give any such notice or any defect therein
shall not affect the legality or validity of any transaction listed in this
Section.
19. NO FRACTIONAL WARRANTS, UNITS OR SHARES. The Company shall not be
required to issue fractions of Warrants or Units upon the reissue of Warrants or
Units, any adjustments as described in Section 16 or otherwise; but the Company
in lieu of issuing any such fractional interest, shall adjust the fractional
interest by payment to the Warrant or Unit Holder an amount, in cash, equal to
the current market value of any such fraction or interest. If the total Warrants
or Units surrendered by exercise would result in the issuance of a fractional
Share, the Company shall not be required to issue a fractional Share but rather
the resulting fractional interest shall be adjusted by payment in an amount, in
cash, equal to the current market value of such fractional interest.
20. RIGHTS OF WARRANT HOLDERS. No Warrant Holder, as such, shall have any
rights of a shareholder of the Company, either at law or equity, and the rights
of the Warrant Holders, as such, are limited to those rights expressly provided
in this Agreement or in the Warrant Certificates. The Company and the Transfer
Agent may treat the registered Warrant Holder in respect of any Warrant
Certificates as the absolute owner thereof for all purposes notwithstanding any
notice to the contrary.
21. RIGHT OF ACTION. All rights of action in respect to this Agreement are
vested in the respective registered holders of the Warrant and Unit
Certificates; and any registered holder of any Warrant or Unit Certificate,
without the consent of the Transfer Agent or of any other holder of a Warrant or
Unit Certificate, may, in his own behalf for his own benefit, enforce, and may
institute and maintain any suit, action or proceeding against the Company
suitable to enforce, or otherwise in respect of, his right to exercise the
Warrants evidenced by such Warrant Certificate, for the
9-WARRANT AND UNIT AGREEMENT
purchase of shares of the Common Stock in the manner provided in the Warrant
Certificate and in this Agreement.
22. AGREEMENT OF WARRANT AND UNIT HOLDERS. Every holder of a Warrant or
Unit Certificate by accepting the same consents and agrees with the Company, the
Transfer Agent and with every other holder of a Warrant or Unit Certificate,
respectively, that:
a. The Warrant and Unit Certificates are transferable on the registry
books of the Transfer Agent only upon the terms and conditions set forth in this
Agreement; and
b. The Company and the Transfer Agent may deem and treat the person in
whose name the Warrant or Unit Certificate is registered as the absolute owner
of the Warrant or Unit, as the case may be, (notwithstanding any notation of
ownership or other writing thereon made by anyone other than the Company or the
Transfer Agent) for all purposes whatever and neither the Company nor the
Transfer Agent shall be affected by any notice to the contrary.
23. TRANSFER AGENT. The Company hereby appoints the Transfer Agent to act
as the agent of the Company and the Transfer Agent hereby accepts such
appointment upon the following terms and conditions by all of which the Company
and every Warrant and Unit Holder, by acceptance of his Warrants or Units, shall
be bound:
a. Statements contained in this Agreement and in the Warrant and Unit
Certificates shall be taken as statements of the Company. The Transfer Agent
assumes no responsibility for the correctness of any of the same except such as
describes the Transfer Agent or for action taken or to be taken by the Transfer
Agent.
b. The Transfer Agent shall not be responsible for any failure of the
Company to comply with any of the Company's covenants contained in this
Agreement or in the Warrant or Unit Certificates.
c. The Transfer Agent may consult at any time with counsel satisfactory
to it (who may be counsel for the Company) and the Transfer Agent shall incur no
liability or responsibility to the Company or to any Warrant or Unit Holder in
respect of any action taken, suffered or omitted by it hereunder in good faith
and in accordance with the opinion or the advice of such counsel, provided the
Transfer Agent shall have exercised reasonable care in the selection and
continued employment of such counsel.
d. The Transfer Agent shall incur no liability or responsibility to the
Company or to any Warrant or Unit Holder for any action taken in reliance upon
any notice, resolution, waiver, consent, order, certificate or other paper,
document or instrument believed by it to be genuine and to have been signed,
sent or presented by the proper party or parties.
e. The Company agrees to pay to the Transfer Agent reasonable
compensation for all services rendered by the Transfer Agent in the execution of
this Agreement, to reimburse the Transfer Agent for all expenses, taxes and
governmental charges and all other charges of any kind or nature incurred by the
Transfer Agent in the execution of this Agreement and to indemnify the
10-WARRANT AND UNIT AGREEMENT
Transfer Agent and save it harmless against any and all liabilities, including
judgments, costs and counsel fees, arising from the Transfer Agent's engagement
under this Agreement except as a result of the Transfer Agent's negligence, bad
faith or willful misconduct.
f. The Transfer Agent shall be under no obligation to institute any
action, suit or legal proceeding or to take any other action likely to involve
expense unless the Company or one or more Warrant or Unit Holders shall furnish
the Transfer Agent with reasonable security and indemnity for any costs and
expenses which may be incurred in connection with such action, suit or legal
proceeding, but this provision shall not affect the power of the Transfer Agent
to take such action as the Transfer Agent may consider proper, whether with or
without any such security or indemnity. All rights of action under this
Agreement or under any of the Warrants or Units may be enforced by the Transfer
Agent without the possession of any of the Warrant or Unit Certificates or the
production thereof at any trial or other proceeding relative thereto, and any
such action, suit or proceeding instituted by the Transfer Agent shall be
brought in its name as Transfer Agent, and any recovery of judgement shall be
for the ratable benefit of the Warrant or Unit Holders as their respective
rights or interest may appear.
g. The Transfer Agent and any shareholder, director, officer or
employee of the Transfer Agent may buy, sell or deal in any of the Warrants,
Units or other securities of the Company or become pecuniarily interested in any
transaction in which the Company may be interested, or contract with or lend
money to the Company or otherwise act as fully and freely as though it were not
Transfer Agent under this Agreement. Nothing herein shall preclude the Transfer
Agent from acting in any other capacity for the Company or for any other legal
entity.
24. SUCCESSOR TRANSFER AGENT. Any legal entity into which the Transfer
Agent may be merged or converted or with which it may be consolidated, or any
legal entity resulting from any merger, conversion or consolidation to which the
Transfer Agent shall be a party, or any legal entity succeeding to the corporate
trust business of the Transfer Agent, shall be the successor to the Transfer
Agent hereunder without the execution or filing of any paper or any further act
of a party or the parties hereto provided such legal entity is eligible to be
appointed under Section 25 below. In any such event or if the name of the
Transfer Agent is changed, the Transfer Agent or such successor may adopt the
countersignature of the original Transfer Agent and may countersign such Warrant
or Unit Certificates either in the name of the predecessor Transfer Agent or in
the name of the successor Transfer Agent.
25. CHANGE OF TRANSFER AGENT. The Transfer Agent may resign or be
discharged by the Company from its duties under this Agreement by the Transfer
Agent or the Company, as the case may be, giving notice in writing to the other,
and by giving a date when such resignation or discharge shall take effect, which
notice shall be sent at least thirty (30) days prior to the date so specified.
If the Transfer Agent shall resign, be discharged or shall otherwise become
incapable of acting, the Company shall appoint a successor to the Transfer
Agent. If the Company shall fail to make such appointment within a period of
thirty (30) days after it has been notified in writing of such resignation or
incapacity by the resigning or incapacitated Transfer Agent or by any Warrant or
Unit Holder or after discharging the Transfer Agent, then the Company agrees to
perform the duties of the Transfer Agent hereunder until a successor Transfer
Agent is appointed. Any successor Transfer Agent shall be a bank or a trust
company, in good standing, organized under the
11-WARRANT AND UNIT AGREEMENT
laws of any state of the United States of America, having a combined capital and
surplus of at least $4,000,000 at the time of its appointment as Transfer Agent.
After appointment, the successor Transfer Agent shall be vested with the same
powers, rights, duties and responsibilities as if it had been originally named
as Transfer Agent without further act or deed, and the former Transfer Agent
shall deliver and transfer to the successor Transfer Agent any property at the
time held by it hereunder, and execute and deliver any further assurance,
conveyance, act or deed necessary for effecting the delivery or transfer.
Failure to give any notice provided for in this Section, however, or any defect
therein, shall not affect the legality or validity of the resignation or removal
of the Transfer Agent or the appointment of the successor Transfer Agent, as the
case may be.
26. NOTICES. Any notice or demand authorized by this Agreement to be given
or made by the Transfer Agent or by any Warrant or Unit Holder to or on the
Company shall be sufficiently given or made if sent by mail, first class,
certified or registered, postage prepaid, addressed (until another address is
filed in writing by the Company with the Transfer Agent), as follows:
TASER International, Inc.
7860 E. McClain Drive, Suite 2
Scottsdale, Arizona 85260
Any notice or demand authorized by this Agreement to be given or made
by any Warrant or Unit Holder or by the Company to or on the Transfer Agent
shall be sufficiently given or made if sent by mail, first class, certified or
registered, postage prepaid, addressed (until another address is filed in
writing by the Transfer Agent with the Company), as follows:
US Stock Transfer Corporation
--------------------------
Glendale, California
-------
Any distribution, notice or demand required or authorized by this
Agreement to be given or made by the Company or the Transfer Agent to or on the
Warrant or Unit Holders shall be sufficiently given or made if sent by mail,
first class, certified or registered, postage prepaid, addressed to the Warrant
or Unit Holders at their last known addresses as they shall appear on the
registration books for the Warrant or Unit Certificates maintained by the
Transfer Agent.
27. SUPPLEMENTS AND AMENDMENTS. The Company and the Transfer Agent may from
time to time supplement or amend this Agreement without the approval of any
Warrant or Unit Holders in order to cure any ambiguity or to correct or
supplement any provision contained herein which may be defective or inconsistent
with any other provisions herein, or to make any other provisions in regard to
matters or questions arising hereunder which the Company and the Transfer Agent
may deem necessary or desirable.
28. SUCCESSORS. All the covenants and provisions of this Agreement by or
for the benefit of the Company or the Transfer Agent shall bind and inure to the
benefit of their respective successors and assigns hereunder.
12-WARRANT AND UNIT AGREEMENT
29. TERMINATION. This Agreement shall terminate at the close of business on
the Expiration Date or such earlier date upon which all Warrants have been
exercised; provided, however, that if exercise of the Warrants is suspended
pursuant to Section 15 and such suspension continues past the Expiration Date,
this Agreement shall terminate at the close of business on the business day
immediately following expiration of such suspension. The provisions of Section
23 shall survive such termination.
30. GOVERNING LAW. This Agreement and each Warrant and Unit Certificate
issued hereunder shall be deemed to be a contract made under the laws of the
State of [California] and for all purposes shall be construed in accordance with
the laws of said State.
31. BENEFITS OF THIS AGREEMENT. Nothing in this Agreement shall be
construed to give any person or corporation other than the Company, the Transfer
Agent and the Warrant and Unit Holders any legal or equitable right, remedy or
claim under this Agreement, and this Agreement shall be for the sole and
exclusive benefit of the Company, the Transfer Agent and the Warrant and Unit
Holders.
32. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of such counterparts shall for all purposes be deemed to be
an original and all such counterparts shall together constitute but one and the
same instrument.
33. INTEGRATION. As of the date hereof, this Agreement contains the entire
and only agreement, understanding, representation, condition, warranty or
covenant between the parties hereto with respect to the matters herein,
supersedes any and all other agreements between the parties hereto relating to
such matters, and may be modified or amended only by a written agreement signed
by both parties hereto pursuant to the authority granted by Section 27.
34. DESCRIPTIVE HEADINGS. The descriptive headings of the Sections of this
Agreement are inserted for convenience only and shall not control or affect the
meaning or construction of any of the provisions hereof.
Date: , 2001
---------------
TASER International, Inc.,
a Delaware corporation
By:
-----------------------------------------
Its Chief Executive Officer
SEAL
ATTEST:
13-WARRANT AND UNIT AGREEMENT
-----------------------------------
Its Secretary
US Stock Transfer Corporation,
a corporation
------------
By:
--------------------------------
Its Vice President
SEAL
ATTEST:
-----------------------------------
Its Secretary
14-WARRANT AND UNIT AGREEMENT
EXHIBIT A
[WARRANT CERTIFICATE]
15-WARRANT AND UNIT AGREEMENT
EXHIBIT B
[UNIT CERTIFICATE]
16-WARRANT AND UNIT AGREEMENT
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