EXHIBIT 2
NO. _______ ____________ SHARES
NAI TECHNOLOGIES, INC.
FORM OF
WARRANT TO PURCHASE COMMON STOCK
VOID AFTER 5:30 P.M., NEW YORK CITY
TIME, ON THE EXPIRATION DATE
THIS WARRANT AND ANY SHARES ACQUIRED UPON THE EXERCISE OF THIS WARRANT HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), AND
MAY NOT BE SOLD, PLEDGED, HYPOTHECATED, DONATED OR OTHERWISE TRANSFERRED WITHOUT
COMPLIANCE WITH THE REGISTRATION OR QUALIFICATION PROVISIONS OF APPLICABLE
FEDERAL AND STATE SECURITIES LAWS OR APPLICABLE EXEMPTIONS THEREFROM.
FOR VALUE RECEIVED, NAI TECHNOLOGIES, INC., a New York corporation (the
"Company"), hereby agrees to sell upon the terms and on the conditions
hereinafter set forth, but no later than 5:30 p.m., New York City time, on the
Expiration Date (as hereinafter defined) to ______________________, or
registered assigns (the "Holder"), under the terms as hereinafter set forth,
_____________________ (__________) fully paid and non-assessable shares of the
Company's Common Stock, par value $.10 per share (the "Warrant Stock"), at a
purchase price per share of Two and 50/100 Dollars ($2.50) (the "Warrant
Price"), pursuant to this warrant (this "Warrant"). The number of shares of
Warrant Stock to be so issued and the Warrant Price are subject to adjustment in
certain events as hereinafter set forth. The term "Common Stock" shall mean,
when used herein, unless the context otherwise requires, the stock and other
securities and property at the time receivable upon the exercise of this
Warrant.
This Warrant is one of a series of the Company's Warrants to purchase
Common Stock (collectively, the "Warrants"), issued pursuant to that certain
Confidential Private Placement Memorandum, dated December 15, 1995, as
supplemented (the "Memorandum"). Capitalized terms used and not otherwise
defined herein shall have the respective meanings attributed thereto in Section
10.
1. Exercise of Warrant.
(a) The Holder may exercise this Warrant according to its terms by
surrendering this Warrant to the Company at the address set forth in Section 11,
the subscription form attached hereto having then been duly executed by the
Holder, accompanied by cash, certified check or bank draft in payment of the
purchase price, in lawful money of the United
States of America, for the number of shares of the Warrant Stock specified in
the subscription form, or as otherwise provided in this Warrant prior to 5:30
p.m., New York City time, on February 15, 2002 (the "Expiration Date").
(b) This Warrant may be exercised in whole or in part so long as any
exercise in part hereof would not involve the issuance of fractional shares of
Warrant Stock. If exercised in part, the Company shall deliver to the Holder a
new Warrant, identical in form, in the name of the Holder, evidencing the right
to purchase the number of shares of Warrant Stock as to which this Warrant has
not been exercised, which new Warrant shall be signed by the Chairman and Chief
Executive Officer or the President and the Secretary or the Assistant Secretary
of the Company. The term Warrant as used herein shall include any subsequent
Warrant issued as provided herein.
(c) No fractional shares or scrip representing fractional shares shall
be issued upon the exercise of this Warrant. The Company shall pay cash in lieu
of fractions with respect to the Warrants based upon the fair market value of
such fractional shares of Common Stock (which shall be the closing price of such
shares on the exchange or market on which the Common Stock is then traded) at
the time of exercise of this Warrant.
(d) In the event of any exercise of the rights represented by this
Warrant, a certificate or certificates for the Warrant Stock so purchased,
registered in the name of the Holder, shall be delivered to the Holder within a
reasonable time after such rights shall have been so exercised. The person or
entity in whose name any certificate for the Warrant Stock is issued upon
exercise of the rights represented by this Warrant shall for all purposes be
deemed to have become the holder of record of such shares immediately prior to
the close of business on the date on which the Warrant was surrendered and
payment of the Warrant Price and any applicable taxes was made, irrespective of
the date of delivery of such certificate, except that, if the date of such
surrender and payment is a date when the stock transfer books of the Company are
closed, such person shall be deemed to have become the holder of such shares at
the opening of business on the next succeeding date on which the stock transfer
books are open. Except as provided in Section 4 hereof, the Company shall pay
any and all documentary stamp or similar issue or transfer taxes payable in
respect of the issue or delivery of shares of Common Stock on exercise of this
Warrant.
2. Disposition of Warrant Stock and Warrant.
(a) The Holder hereby acknowledges that this Warrant and any Warrant
Stock purchased pursuant hereto are not being registered (i) under the Act on
the ground that the issuance of this Warrant is exempt from registration under
Section 4(2) of the Act as not involving any public offering or (ii) under any
applicable state securities law because the issuance of this Warrant does not
involve any public offering; and that the Company's reliance on the Section 4(2)
exemption of the Act and under applicable state securities laws is predicated in
part on the representations hereby made to the Company by the Holder that it is
acquiring this Warrant and will acquire the Warrant Stock for investment for its
own account, with no present
2
intention of dividing its participation with others or reselling or otherwise
distributing the same, subject, nevertheless, to any requirement of law that the
disposition of its property shall at all times be within its control.
The Holder hereby agrees that it will not sell or transfer all or any
part of this Warrant and/or Warrant Stock unless and until it shall first have
given notice to the Company describing such sale or transfer and furnished to
the Company either (i) an opinion, reasonably satisfactory to counsel for the
Company, of counsel (skilled in securities matters, selected by the Holder and
reasonably satisfactory to the Company) to the effect that the proposed sale or
transfer may be made without registration under the Act and without registration
or qualification under any state law, or (ii) an interpretative letter from the
Securities and Exchange Commission to the effect that no enforcement action will
be recommended if the proposed sale or transfer is made without registration
under the Act.
(b) If, at the time of issuance of the shares issuable upon exercise of
this Warrant, no registration statement is in effect with respect to such shares
under applicable provisions of the Act, the Company may at its election require
that the Holder provide the Company with written reconfirmation of the Holder's
investment intent and that any stock certificate delivered to the Holder of a
surrendered Warrant shall bear legends reading substantially as follows:
"TRANSFER OF THE SHARES REPRESENTED BY THIS CERTIFICATE IS
SUBJECT TO CERTAIN RESTRICTIONS SET FORTH IN THE WARRANT
PURSUANT TO WHICH THESE SHARES WERE PURCHASED FROM THE
COMPANY. COPIES OF THOSE RESTRICTIONS ARE ON FILE AT THE
PRINCIPAL OFFICES OF THE COMPANY, AND NO TRANSFER OF SUCH
SHARES OR OF THIS CERTIFICATE, OR OF ANY SHARES OR OTHER
SECURITIES (OR CERTIFICATES THEREFOR) ISSUED IN EXCHANGE FOR
OR IN RESPECT OF SUCH SHARES, SHALL BE EFFECTIVE UNLESS AND
UNTIL THE TERMS AND CONDITIONS THEREIN SET FORTH SHALL HAVE
BEEN COMPLIED WITH."
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AND MAY NOT BE
SOLD, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933 OR AN OPINION OF COUNSEL SATISFACTORY
TO THE ISSUER OF THIS CERTIFICATE THAT REGISTRATION IS NOT
REQUIRED UNDER SAID ACT."
3
In addition, so long as the foregoing legend may remain on any stock certificate
delivered to the Holder, the Company may maintain appropriate "stop transfer"
orders with respect to such certificates and the shares represented thereby on
its books and records and with those to whom it may delegate registrar and
transfer functions.
3. Reservation of Shares. The Company hereby agrees that at all times
there shall be reserved for issuance upon the exercise of this Warrant such
number of shares of its Common Stock as shall be required for issuance upon
exercise of this Warrant. The Company further agrees that all shares which may
be issued upon the exercise of the rights represented by this Warrant will be
duly authorized and will, upon issuance and against payment of the exercise
price, be validly issued, fully paid and non-assessable, free from all taxes,
liens, charges and preemptive rights with respect to the issuance thereof, other
than taxes, if any, in respect of any transfer occurring contemporaneously with
such issuance and other than transfer restrictions imposed by federal and state
securities laws.
4. Exchange, Transfer, Assignment or Loss of Warrant. This Warrant is
exchangeable, without expense, at the option of the Holder, upon presentation
and surrender hereof to the Company or at the office of its stock transfer
agent, if any, for other Warrants of different denominations, entitling the
Holder or Holders thereof to purchase in the aggregate the same number of shares
of Common Stock purchasable hereunder. Upon surrender of this Warrant to the
Company or at the office of its stock transfer agent, if any, with the
Assignment Form annexed hereto duly executed and funds sufficient to pay any
transfer tax, the Company shall, without charge, execute and deliver a new
Warrant in the name of the assignee named in such instrument of assignment and
this Warrant shall promptly be canceled. This Warrant may be divided or combined
with other Warrants that carry the same rights upon presentation hereof at the
office of the Company or at the office of its stock transfer agent, if any,
together with a written notice specifying the names and denominations in which
new Warrants are to be issued and signed by the Holder hereof.
5. Capital Adjustments. This Warrant is subject to the following
further provisions:
(a) Recapitalization, Reclassification and Succession. If any
recapitalization of the Company or reclassification of its Common Stock or
any merger or consolidation of the Company into or with a corporation or
other business entity, or the sale or transfer of all or substantially all
of the Company's assets or of any successor corporation's assets to any
other corporation or business entity (any such corporation or other
business entity being included within the meaning of the term "successor
corporation") shall be effected, at any time while this Warrant remains
outstanding and unexpired, then, as a condition of such recapitalization,
reclassification, merger, consolidation, sale or transfer, lawful and
adequate provision shall be made whereby the Holder of this Warrant
thereafter shall have the right to receive upon the exercise hereof as
provided in Section 1 and in lieu of the shares of Common Stock immediately
theretofore issuable upon the exercise of this Warrant, such shares of
capital stock, securities or other property as may be issued or payable
with respect to or in exchange
4
for a number of outstanding shares of Common Stock equal to the number of
shares of Common Stock immediately theretofore issuable upon the exercise
of this Warrant had such recapitalization, reclassification, merger,
consolidation, sale or transfer not taken place, and in each such case, the
terms of this Warrant shall be applicable to the shares of stock or other
securities or property receivable upon the exercise of this Warrant after
such consummation.
(b) Subdivision or Combination of Shares. If the Company at any time
while this Warrant remains outstanding and unexpired shall subdivide or
combine its Common Stock, the number of shares of Warrant Stock purchasable
upon exercise of this Warrant and the Warrant Price shall be
proportionately adjusted.
(c) Stock Dividends and Distributions. If the Company at any time
while this Warrant is outstanding and unexpired shall issue or pay the
holders of its Common Stock, or take a record of the holders of its Common
Stock for the purpose of entitling them to receive, a dividend payable in,
or other distribution of, Common Stock, then (i) the Warrant Price shall be
adjusted in accordance with Section 5(e) and (ii) the number of shares of
Warrant Stock purchasable upon exercise of this Warrant shall be adjusted
to the number of shares of Common Stock that Holder would have owned
immediately following such action had this Warrant been exercised
immediately prior thereto.
(d) Stock and Rights Offering to Shareholders. If at any time after
the date of issuance of this Warrant, the Company shall issue or sell, or
fix a record date for the purposes of entitling holders of its Common Stock
to receive, (i) Common Stock or (ii) rights, options or warrants entitling
the holders thereof to subscribe for or purchase Common Stock (or
securities convertible or exchangeable into or exercisable for Common
Stock), in any such case, at a price per share (or having a conversion,
exchange or exercise price per share) that is less than the closing price
per share of the Company's Common Stock on the principal national
securities exchange on which the Common Stock is listed or admitted to
trading or, if not listed or traded on any such exchange, on the National
Market System (the "National Market System") of the National Association of
Securities Dealers Automated Quotations System ("Nasdaq"), or if not listed
or traded on any such exchange or system, the average of the bid and asked
price per share on Nasdaq or, if such quotations are not available, the
fair market value per share of the Company's Common Stock as reasonably
determined by the Board of Directors of the Company (the "Closing Price")
on the date of such issuance or sale or on such record date then,
immediately after the date of such issuance or sale or on such record date,
(x) the Warrant Price shall be adjusted in accordance with Section 5(e),
and (y) the number of shares of Warrant Stock purchasable upon exercise of
this Warrant shall be adjusted to that number determined by multiplying the
number of shares of Warrant Stock purchasable upon exercise of this Warrant
immediately before the date of such issuance or sale or such record date by
a fraction, the denominator of which will be the number of shares of Common
Stock outstanding on such date plus the number of shares of Common Stock
that the aggregate offering price of the total number of shares so offered
for subscription or purchase (or the aggregate initial conversion price,
exchange price or exercise price of the convertible securities or
exchangeable securities or rights, options or warrants, as the case may be,
so offered) would purchase at such Closing Price, and
5
the numerator of which will be the number of shares of Common Stock
outstanding on such date plus the number of additional shares of Common
Stock offered for subscription or purchase (or into which the convertible
or exchangeable securities or rights, options or warrants so offered are
initially convertible or exchangeable or exercisable, as the case may be).
If the Company shall at any time after the date of issuance of this
Warrant distribute to all holders of its Common Stock any shares of capital
stock of the Company (other than Common Stock) or evidences of its
indebtedness or assets (excluding cash dividends or distributions paid from
retained earnings or current year's or prior year's earnings of the
Company) or rights or warrants to subscribe for or purchase any of its
securities (excluding those referred to in the immediately preceding
paragraph) (any of the foregoing being hereinafter in this paragraph called
the "Securities"), then in each such case, the Company shall reserve shares
or other units of such securities for distribution to the Holder upon
exercise of this Warrant so that, in addition to the shares of the Common
Stock to which such Holder is entitled, such Holder will receive upon such
exercise the amount and kind of such Securities which such Holder would
have received if the Holder had, immediately prior to the record date for
the distribution of the Securities, exercised this Warrant.
(e) Warrant Price Adjustment. Whenever the number of shares of Warrant
Stock purchasable upon exercise of this Warrant is adjusted, as herein
provided, the Warrant Price payable upon the exercise of this Warrant shall
be adjusted to that price determined by multiplying the Warrant Price
immediately prior to such adjustment by a fraction (i) the numerator of
which shall be the number of shares of Warrant Stock purchasable upon
exercise of this Warrant immediately prior to such adjustment, and (ii) the
denominator of which shall be the number of shares of Warrant Stock
purchasable upon exercise of this Warrant immediately thereafter.
(f) 1996 EBITDA Adjustment. The Warrant Price shall additionally be
adjusted in the following circumstances:
(i) if the Company shall achieve 1996 EBITDA (as such term is
defined in Section 10) in an amount of less than $6,000,000, the
Warrant Price shall be reduced to $2.00 per share; and
(ii) if the Company shall achieve 1996 EBITDA in an amount of
less than $4,750,000 (together with the $6,000,000 amount referred to
above, the "Adjusted Amounts"), the Warrant Price shall be reduced to
$1.50 per share;
provided, however, that in the event the Company sells all of the capital
stock or all or substantially all of the assets of one or more of its
Subsidiaries in 1996, the Adjusted Amounts for 1996 will be reduced by the
amount or amounts set forth in Schedule A hereto in respect of the
Subsidiary or Subsidiaries so involved. In the event any such sale occurs
during 1996, the applicable Adjusted Amount will be reduced by multiplying
it by a fraction, the numerator of
6
which is the number of days of the year remaining after any such sale and
the denominator is 365.
(g) Certain Shares Excluded. The number of shares of Common Stock
outstanding at any given time for purposes of the adjustments set forth in
this Section 5 shall exclude any shares then directly or indirectly held in
the treasury of the Company.
(h) Deferral and Cumulation of De Minimis Adjustments. The Company
shall not be required to make any adjustment pursuant to this Section 5 if
the amount of such adjustment would be less than one percent (1%) of the
Warrant Price in effect immediately before the event that would otherwise
have given rise to such adjustment. In such case, however, any adjustment
that would otherwise have been required to be made shall be made at the
time of and together with the next subsequent adjustment which, together
with any adjustment or adjustments so carried forward, shall amount to not
less than one percent (1%) of the Warrant Price in effect immediately
before the event giving rise to such next subsequent adjustment.
(i) Duration of Adjustment. Following each computation or readjustment
as provided in this Section 5, the new adjusted Warrant Price and number of
shares of Warrant Stock purchasable upon exercise of this Warrant shall
remain in effect until a further computation or readjustment thereof is
required.
6. Notice to Holders.
(a) Notice of Record Date. In case:
(i) the Company shall take a record of the holders of its Common Stock
(or other stock or securities at the time receivable upon the exercise of
this Warrant) for the purpose of entitling them to receive any dividend
(other than a cash dividend payable out of earned surplus of the Company)
or other distribution, or any right to subscribe for or purchase any shares
of stock of any class or any other securities, or to receive any other
right;
(ii) of any capital reorganization of the Company, any
reclassification of the capital stock of the Company, any consolidation
with or merger of the Company into another corporation, or any conveyance
of all or substantially all of the assets of the Company to another
corporation; or
(iii) of any voluntary dissolution, liquidation or winding-up of the
Company;
then, and in each such case, the Company will mail or cause to be mailed to the
Holder hereof at the time outstanding a notice specifying, as the case may be,
(i) the date on which a record is to be taken for the purpose of such dividend,
distribution or right, and stating the amount and
7
character of such dividend, distribution or right, or (ii) the date on which
such reorganization, reclassification, consolidation, merger, conveyance,
dissolution, liquidation or winding-up is to take place, and the time, if any,
is to be fixed, as of which the holders of record of Common Stock (or such stock
or securities at the time receivable upon the exercise of this Warrant) shall be
entitled to exchange their shares of Common Stock (or such other stock or
securities) for securities or other property deliverable upon such
reorganization, reclassification, consolidation, merger, conveyance, dissolution
or winding-up. Such notice shall be mailed at least thirty (30) days prior to
the record date therein specified, or if no record date shall have been
specified therein, at least thirty (30) days prior to such specified date.
(b) Certificate of Adjustment. Whenever any adjustment shall be made
pursuant to Section 5 hereof, the Company shall promptly make a certificate
signed by its Chairman and Chief Executive Officer, its President or a Vice
President and by its Treasurer or Assistant Treasurer or its Secretary or
Assistant Secretary, setting forth in reasonable detail the event requiring the
adjustment, the amount of the adjustment, the method by which such adjustment
was calculated and the Warrant Price and number of shares of Warrant Stock
purchasable upon exercise of this Warrant after giving effect to such
adjustment, and shall promptly cause copies of such certificates to be mailed
(by first class mail, postage prepaid) to the Holder of this Warrant.
7. Loss, Theft, Destruction or Mutilation. Upon receipt by the Company
of evidence satisfactory to it, in the exercise of its reasonable discretion, of
the ownership and the loss, theft, destruction or mutilation of this Warrant
and, in the case of loss, theft or destruction, of indemnity reasonably
satisfactory to the Company and, in the case of mutilation, upon surrender and
cancellation thereof, the Company will execute and deliver in lieu thereof,
without expense to the Holder, a new Warrant of like tenor dated the date
hereof.
8. Warrant Holder Not a Shareholder. The Holder of this Warrant, as
such, shall not be entitled by reason of this Warrant to any rights whatsoever
as a shareholder of the Company.
9. Registration Rights. This Warrant and the shares of Common Stock
issuable upon exercise of this Warrant will be accorded the registration rights
under the Act set forth in that certain Registration Rights Agreement between
the Company and the Holders, a form of which agreement is being furnished
concurrently herewith.
10. Definitions. As used herein, unless the context otherwise requires,
the following terms have the respective meanings:
(a) "Affiliate": with respect to any Person, the following: (i) any
other Person that at such time directly or indirectly through one or more
intermediaries controls, or is controlled by or is under common control
with such first Person or (ii) any Person beneficially owning or holding,
directly or indirectly, 10% or more of any class of voting or equity
interests of the Company or any Subsidiary or any corporation of which the
Company and
8
its Subsidiaries beneficially own or hold, in the aggregate, directly or
indirectly, 10% of more of any class of voting or equity interests. As used
in such definition, "controls", "controlled by" and "under common control",
as used with respect to an Person, shall mean the possession, directly or
indirectly, of the power to direct or cause the direction of the management
policies of such Person, whether through the ownership of voting
securities, by agreement or otherwise.
(b) "Consolidated Net Income": the net income (or deficit) of the
Company and its Subsidiaries for any period (taken as a cumulative whole)
after deducting, without duplication, all operating expenses, provisions
for all taxes and reserves (including reserves for deferred income taxes)
and all other proper deductions, all determined in accordance with GAAP on
a consolidated basis, after eliminating all intercompany items and after
deducting portions of income properly attributable to outside minority
interests, if any, in any Subsidiaries; provided, however, that there shall
be excluded (i) any income or deficit of any other Person accrued prior to
the date it becomes a Subsidiary or merges into or consolidates with the
Company or another Subsidiary of the Company, (ii) the income (or deficit)
of any other Person (other than a Subsidiary of the Company) in which the
Company or any Subsidiary has any ownership interest, except to the extent
that any such income has been actually received by the Company or such
Subsidiary in the form of cash dividends or similar distributions, (iii)
any deferred credit or amortization thereof from the acquisition of any
properties of assets of any other Person, (iv) any aggregate net income
(but not any aggregate net loss) during such period arising from the sale,
exchange or other distribution of capital assets (such term to include all
fixed assets, whether tangible or intangible, all inventory sold in
conjunction with the disposition of fixed assets and all securities), (v)
any income resulting from the write-up of assets after the date hereof,
(vi) any gains properly classified as extraordinary in accordance with
GAAP, (vii) proceeds of life insurance policies to the extent such proceeds
exceed premiums paid to maintain such life insurance policies, (viii) any
income of a Subsidiary which is unavailable for the payment of dividends,
and (ix) any gain arising form the acquisition of securities, or the
extinguishment of any indebtedness of the Company or any of its
Subsidiaries or the termination of an employee benefit plan.
(c) "GAAP": United States generally accepted accounting principles,
consistently applied.
(d) "Indebtedness": at any time and with any respect to any Person,
(i) all indebtedness of such Person for borrowed money, (ii) all
indebtedness of such Person for the deferred purchase price of property or
services (other than property, including inventory, and services purchased,
and expense accruals and deferred compensation items arising, in the
ordinary course of business, provided that the same shall not be overdue
(i.e., the earlier of ninety (90) days from the invoice date or the date
the obligee commences an action to recover such amounts), or if overdue,
are being contested in good faith and by appropriate proceedings), (iii)
all obligations of such Person evidenced by notes, bonds, debentures or
other similar instruments (other than performance, surety and appeal bonds
arising in the ordinary course of business), (iv) all indebtedness of such
Person created or arising under any conditional sale or other title
retention agreement with respect to property acquired by such Person (even
though
9
the rights and remedies of the seller or lender under such agreement in the
event of default are limited to repossession or sale of such property), (v)
all obligations of such Person under leases which have been or should be,
in accordance with GAAP, recorded as capital leases, to the extent required
to be so recorded, (vi) all reimbursement, payment or similar obligations
of such Person, contingent or otherwise, under acceptance, letter of credit
or similar facilities (vii) all Indebtedness referred to in clauses (i)
through (vi) above guaranteed directly or indirectly by such Person
including without limitation through any agreement (A) to pay or purchase
such Indebtedness or to advance or supply funds for the payment or purchase
of such Indebtedness, (B) to purchase, sell or lease (as lessee or lessor)
property, or to purchase or sell services, primarily for the purpose of
enabling the debtor to make payment of such Indebtedness or to assure the
holder of such Indebtedness against loss in respect of such Indebtedness,
(C) to supply funds to or in any other manner invest in the debtor
(including any agreement to pay for property or services irrespective of
whether such property is received or such services are rendered) or (D)
otherwise to assure a creditor against loss in respect of such
Indebtedness, and (viii) all Indebtedness referred to in clauses (i)
through (vii) above secured by (or for which the holder of such
Indebtedness has an existing right, contingent or otherwise, to be secured
by) any Lien upon property (including, without limitation, accounts and
contract rights) owned by such Person, even though such Person has not
assumed or become liable for the payment of such Indebtedness.
(e) "Lien": any mortgage, pledge, security interest, encumbrance, lien
or charge of any kind whatsoever.
(f) "1996 EBITDA": Consolidated Net Income of the Company and its
Subsidiaries, for the fiscal year ended December 31, 1996, plus, to the
extent deducted in determining such Consolidated Net Income and without
duplication, (i) the sum for such period, of (a) the aggregate amount of
all interest (including capitalized interest) accrued or to accrue (whether
or not actually paid) during such period in respect of any Indebtedness of
the Company and its Subsidiaries, (b) any amortized discount in respect of
any such Indebtedness issued at discount, and (c) any fees or commissions
payable in connection with any letters of credit; (ii) current and deferred
taxes on income and profit; (iii) depreciation; and (iv) amortization.
(g) "Person": any natural person, corporation, division of a
corporation, partnership, limited liability company, trust, joint venture,
association, company, estate, unincorporated organization or government or
any agency or political subdivision thereof.
(h) "Subsidiaries": with respect to any Person, any corporation,
association or other business entity (whether now existing or hereafter
organized) of which at least a majority of the securities or other
ownership interests having ordinary voting power for the election of
directors is, at the time as of which any determination is being made,
owned or controlled by such Person or one or more subsidiaries of such
Person.
10
11. Notices. Any notice required or contemplated by this Warrant shall
be deemed to have been duly given if transmitted by registered or certified
mail, return receipt requested, to the Company at 2405 Trade Centre Avenue,
Longmont, Colorado 80503, Attention: President, or to the Holder at the name and
address set forth in the Warrant Register maintained by the Company.
12. Choice of Law. THIS WARRANT IS ISSUED UNDER AND SHALL FOR ALL
PURPOSES BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE
OF NEW YORK.
IN WITNESS WHEREOF, the Company has duly caused this Warrant to be
signed on its behalf, in its corporate name and by its duly authorized officer,
as of this _____ day of February 1996.
NAI TECHNOLOGIES, INC.
By:___________________________
Richard A. Schneider
Executive Vice President,
Treasurer and Secretary
11
Schedule A
Section 5(f) Adjusted Amounts
Wilcom, Inc............................................................................$ 838,000
Codar Technology, Inc..................................................................$2,805,000
NAI Technologies - Systems Division Corporation........................................$ 607,000
Lynwood Scientific Developments Limited................................................$1,833,000
12
SUBSCRIPTION FORM
The undersigned, the Holder of the attached Warrant, hereby irrevocably
elects to exercise purchase rights represented by such Warrant for, and to
purchase thereunder, the following number of shares of Common Stock of NAI
TECHNOLOGIES, INC.:
Number of Shares Purchase Price Per Share
The undersigned herewith makes payment of $
therefor, and requests that certificates for such shares (and any warrants or
other property issuable upon such exercise) be issued in the name of and
delivered to
whose address is
(social security or taxpayer
identification number ) and, if such shares shall not include all of
the shares issuable under such warrant, that a new warrant of like tenor and
date for the balance of the shares issuable thereunder be delivered to the
undersigned.
HOLDER:
-------------------------------------
Signature
-------------------------------------
Signature, if jointly held
-------------------------------------
Date
13
ASSIGNMENT FORM
FOR VALUE RECEIVED,
------------------------------------------------------------
hereby sells, assigns and transfers unto
Name ---------------------------------------------------------------------------
(Please typewrite or print in block letters)
Social Security or Taxpayer Identification Number
-------------------------------
the right to purchase shares of Common Stock of NAI TECHNOLOGIES, INC., a New
York corporation, represented by this Warrant to the extent of shares as to
which such right is exercisable and does hereby irrevocably constitute and
appoint , Attorney, to transfer the same on the books
of the Company with full power of substitution in the premises.
DATED:
--------------------------- ----------------------------------
Signature
----------------------------------
Signature, if jointly held
Witness:
-------------------------
14