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EXHIBIT 10.55
[EXECUTION COPY]
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WARRANT PURCHASE AGREEMENT
dated as of
October 24, 1997
between
CODE-ALARM, INC.
and
GENERAL ELECTRIC CAPITAL CORPORATION
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TABLE OF CONTENTS
Page
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SECTION 1. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 2. ISSUE AND SALE OF WARRANT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.01. Sale of Warrant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.02. Allocated Purchase Price. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 3. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
3.01. Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
3.02. Brokers and Finders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
3.03. Securities Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
SECTION 4. REPRESENTATIONS AND WARRANTIES OF THE COMPANY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
4.01. Organization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
4.02. Capitalization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
4.03. Valid Issuance of Warrant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
4.04. Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
4.05. No Conflict . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
4.06. Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
4.07. Compliance With Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
4.08. Brokers and Finders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
4.09. Securities Law Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
4.10. Transfer Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
4.11. Full Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
SECTION 5. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
5.01. Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
5.02. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
5.03. Survival . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
5.04. Amendment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
5.05. Successors and Assigns. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
5.06. Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
5.07. Captions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
5.08. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
5.09. Waiver of Jury Trial . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
5.10. Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
5.11. Attorneys' Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
5.12. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Schedule A -- Schedule of Capital Stock
Schedule B -- Schedule of Persons Owning More Than 5% of Any
Schedule C -- Schedule of Outstanding Convertible
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WARRANT PURCHASE AGREEMENT
THIS WARRANT PURCHASE AGREEMENT (this "Agreement") dated as of
October 24, 1997, by and between CODE-ALARM, INC., a Michigan corporation (the
"Company"), and GENERAL ELECTRIC CAPITAL CORPORATION (the "Purchaser").
W I T N E S S E T H:
WHEREAS, pursuant to that certain Credit Agreement of even
date herewith among the Company, the Purchaser as Agent and Lender and the
other Credit Parties and Lenders named therein (the "Credit Agreement"), the
Purchaser is extending certain credit facilities to the Company;
WHEREAS, in order to induce the Purchaser to enter into the
Credit Agreement, the Company has agreed to issue and sell to the Purchaser a
Warrant initially exercisable for 131,718 shares of the Common Stock of the
Company;
NOW, THEREFORE, in consideration of the mutual promises,
representations, warranties, covenants and conditions set forth in this
Agreement, and for other good and valuable consideration the receipt and
adequacy of which is hereby acknowledged, the parties mutually agree as
follows:
SECTION 1. DEFINITIONS.
The terms hereinafter set forth when used herein shall have
the following meanings, and any terms not otherwise defined herein that are
defined in the Credit Agreement shall have the respective meanings specified in
the Credit Agreement:
"Code" shall mean the Internal Revenue Code of 1986, as
amended, or any successor statute.
"Common Stock" shall mean the common stock, without par value,
of the Company.
"Commission" shall mean the Securities and Exchange
Commission, or any other federal agency then administering the Securities Act.
"Contractual Obligation" shall mean, with respect to any
person, any provision of any mortgage or security issued by such person or of
any lease, franchise, agreement, guaranty, instrument or undertaking to which
such person is a party or by which it or any of its properties is bound.
"Governmental Authority" shall mean any nation or government,
any state or other political subdivision thereof, and
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any entity exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government.
"Pegasus Warrants" means the warrants to purchase shares of
Common Stock issued pursuant to the Unit Purchase Agreement of even date
herewith among the Company, Pegasus Partners, L.P. and Pegasus Related
Partners, L.P. or the Certificate of Designation referred to therein.
"Requirement of Law" shall mean any applicable law, statute,
treaty, rule, regulation, arbitration award, judgment, decree, order or other
determination of any Governmental Authority.
"Securities Act" shall mean the Securities Act of 1933, as
amended, or any similar Federal statute, and the rules and regulations of the
Commission promulgated thereunder, all as the same shall be in effect at the
time.
"Warrant" shall have the meaning assigned in Section 2.01
hereof.
SECTION 2. ISSUE AND SALE OF WARRANT.
2.01. Sale of Warrant. Concurrently with the execution and
delivery hereof, the Company is issuing and selling to the Purchaser, and the
Purchaser is purchasing from the Company, Warrant No. A-1 (the "Warrant")
initially exercisable for the purchase of 131,718 shares of Common Stock.
2.02. Allocated Purchase Price. The Company and the
Purchaser hereby acknowledge that for the purposes of Section 1273(c)(2) of the
Code, the Warrant is a part of an investment unit with the loans being made by
the Purchaser to the Company under the Credit Agreement, and that the allocated
purchase price of the Warrant for such purposes is $1,317. The Company and the
Purchaser agree to use the foregoing allocated purchase price as the purchase
price of the Warrant for all income tax purposes.
SECTION 3. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER.
The Purchaser hereby respectively represents and warrants to
the Company as follows:
3.01. Authority. The Purchaser has full legal right, power
and authority to enter into and perform this Agreement, and the execution and
delivery of this Agreement by it and the consummation of the transactions
contemplated hereby have been duly authorized by all necessary corporate
action. This Agreement constitutes the legal, valid and binding obligation of
the
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Purchaser, enforceable against it in accordance with its terms, except as may
be limited by bankruptcy, insolvency, reorganization or similar laws affecting
creditors' rights generally and subject to general principles of equity.
3.02. Brokers and Finders. No brokerage or finder's
commissions or fees are payable in connection with the transactions
contemplated by this Agreement on account of any action taken by the Purchaser
or its representatives, and the Purchaser will indemnify the Company against
and hold the Company harmless from any liability, loss or expense (including,
without limitation, reasonable attorneys' fees) arising in connection with any
claim for any such commissions or fees.
3.03. Securities Laws. The Purchaser is an "accredited
investor" within the meaning of Rule 501 promulgated under the Securities Act.
The Warrant is being acquired for the Purchaser's own account for the purpose
of investment and not with a present view to, or for sale in connection with,
any distribution thereof; provided that the disposition of Purchaser's property
shall at all times remain within its control. The Purchaser understands that
the Warrant and the shares of Common Stock for which the Warrant is exercisable
(collectively, the "Securities") have not been registered under the Securities
Act, that the Securities must be held indefinitely unless a subsequent
disposition thereof is registered under the Securities Act or an exemption from
registration is available under applicable securities laws then in effect and
the Securities will bear a restrictive legend in the form prescribed in Section
8.2 of the Warrant.
SECTION 4. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to the Purchaser as
follows:
4.01. Organization. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Michigan, with all requisite power to own its properties and assets and to
conduct its business as now conducted, and is duly qualified as a foreign
corporation and is in good standing in all other jurisdictions in which such
qualification is required.
4.02. Capitalization. (a) Schedule A hereto sets forth as of
the day hereof the Company's authorized capital stock, indicating the number of
shares issued, outstanding and reserved for issuance. All of the outstanding
shares of capital stock of the Company have been duly authorized and validly
issued, are fully paid and nonassessable, free of preemptive rights and have
been offered and issued without violation of the Securities Act or any
applicable state securities or blue sky law
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or any preemptive rights of any person. Schedule B hereto accurately sets
forth, as of the date hereof, the number of issued and outstanding shares of
Common Stock held by each person known by the Company to own beneficially or of
record more than 5% of any class of the Company's outstanding capital stock.
(b) Except for the Pegasus Warrants and except as disclosed
on Schedule C hereto: (i) there are no issued or outstanding securities that
are convertible into or exchangeable for shares of the Company's capital stock
("Convertible Securities"); (ii) there are no issued or outstanding
subscriptions, options, warrants or other rights to purchase or acquire any
shares of the capital stock of the Company or any Convertible Securities
("Option Rights") other than the Warrant; (iii) the Company is not a party to
any agreement or understanding pursuant to which it is obligated to purchase or
redeem any shares of its capital stock or any Convertible Securities or Option
Rights and is not otherwise under any obligation to repurchase, redeem or
otherwise acquire any shares of its capital stock or any Convertible Securities
or Option Rights; (iv) the Company is not a party to any agreement or
understanding pursuant to which it is obligated to register any shares of its
capital stock or other securities under the Securities Act or any state
securities laws; (v) to the best knowledge of the Company, no securities holder
of the Company is a party to any voting agreement, voting trust, irrevocable
proxy or other agreement affecting the voting rights of any shares of the
Company's capital stock or any agreement providing for any call or put option,
right of first refusal or offer or other right to acquire or dispose of any
shares of the Company's capital stock or any Convertible Securities or Option
Rights; (vi) there are not outstanding debt securities of the Company that
provide the holders thereof with voting rights; and (vii) no shares of Common
Stock are issuable upon the exercise of any outstanding Convertible Securities
or Option Rights of the Company and no additional shares of Common Stock will
become issuable upon exercise of such Convertible Securities or Option Rights
on account of the issuance of the Warrants.
4.03. Valid Issuance of Warrant. (a) The Warrant has been
duly executed and delivered by the Company, has been duly authorized and
validly issued free and clear of all liens, encumbrances, equities and claims,
is fully paid and non-assessable, and constitutes the legal, valid and binding
obligation of the Company, enforceable in accordance with its terms, except as
may be limited by bankruptcy, insolvency, reorganization or similar laws
affecting creditors' rights generally and subject to general principles of
equity and except that only 131, 718 shares of Common Stock have been have been
reserved for issuance upon exercise of the Warrant.
(b) The 131,718 shares of Common Stock initially issuable
upon exercise of the Warrant have been duly authorized
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and reserved for issuance and, when issued in accordance with the terms of the
Warrant, will be validly issued, fully paid and non-assessable, free and clear
of all liens, encumbrances, equities and claims and without violation of any
preemptive rights.
4.04. Authority. The Company has full legal right, power and
authority (i) to enter into and perform this Agreement and (ii) to issue the
Warrant and to perform all its obligations relating thereto; provided that only
131,718 shares of Common Stock have been reserved for issuance upon exercise of
the Warrant, and to the extent that any additional shares become issuable upon
exercise of the Warrant, there may not be sufficient authorized and unreserved
shares of Common Stock for such issuance. The execution and delivery of this
Agreement, the issuance of the Warrant by the Company and the consummation of
the transactions contemplated hereby and thereby have all been duly authorized
by the Board of Directors of the Company and, where required, the shareholders
of the Company; provided that to the extent that the Warrant becomes
exercisable for more than 131,718 shares of Common Stock, the shareholders may
be required to approve an amendment to the Articles of Incorporation of the
Company increasing the number of shares of authorized Common Stock. No
consent, waiver or authorization of, or filing with any other Person (including
without limitation, any Governmental Authority) is required by the Company in
connection with any of the foregoing or with the validity or enforceability
against the Company of this Agreement or the Warrants, except for the filing of
the amendment to the Company's Articles of Incorporation referred to above, any
securities laws filings required in connection with any transfer of the Warrant
or of shares of Common Stock issued upon exercise thereof, the reporting
obligations of the Company under the Securities Exchange Act of 1934, as
amended. This Agreement has been duly executed and delivered by the Company and
constitutes the legal, valid and binding obligation of the Company, enforceable
in accordance with its terms, except as may be limited by bankruptcy,
insolvency, reorganization or similar laws affecting creditors' rights
generally and subject to general principles of equity.
4.05. No Conflict. The execution, delivery and performance
of this Agreement and the Warrants and the consummation of the transactions
contemplated hereby and thereby do not and will not, with or without the
passage of time or the giving of notice or both, (i) conflict with or violate
any provision of the Company's Articles of Incorporation (except to the extent
that more than 131,718 shares of Common Stock become issuable upon exercise of
the Warrant, in which case an amendment to the Articles of Incorporation may be
required to increase the number of authorized shares of Common Stock) or
By-laws, (ii) conflict with or violate any Requirement of Law or Contractual
Obligation applicable to the Company, (iii) result in, or require, the creation
or imposition of any Lien on any of its properties or revenues pursuant to any
Requirement of Law or
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Contractual Obligation or (iv) require any action by or in respect of, or
filing with, any governmental body, agency or official other than as described
in the third sentence of Section 4.04 above.
4.06. Litigation. No action, suit, claim, litigation,
investigation or proceeding (formal or informal) of or before any arbitrator or
Governmental Authority is pending or (to the best of the Company's knowledge)
threatened by or against the Company or against any of its properties or
revenues with respect to this Agreement or the Warrant or any of the
transactions contemplated hereby or thereby.
4.07. Compliance With Laws. The Company is in compliance, in
all material respects, with all laws, ordinances, governmental rules and
regulations to which it is subject, where the failure to so comply would have
an adverse effect on the enforceability against the Company of this Agreement
or the Warrant or the ability of the Company to perform its obligations
hereunder and thereunder.
4.08. Brokers and Finders. Except as disclosed in the Credit
Agreement and the schedules thereto, no brokerage or finder's commissions or
fees are payable in connection with the transactions contemplated by this
Agreement on account of any action taken by the Company, its affiliates or
their representatives, and the Company will indemnify the Purchaser against and
hold the Purchaser harmless from any liability, loss or expense (including,
without limitation, reasonable attorneys' fees) arising in connection with any
claim for any such commissions or fees.
4.09. Securities Law Compliance. The offer and sale of the
Warrants hereunder is exempt from the registration and prospectus delivery
requirements of the Securities Act, and the rules and regulations thereunder,
and all applicable state securities laws. The Company has not offered the
Warrant to anyone other than the Purchaser.
4.10. Transfer Taxes. Except as have been paid by the
Company prior to the date hereof, no fees, taxes, charges or other amounts
imposed by any federal, state or local taxing or other Governmental Authority
are or will become payable by the Company or the Purchaser as a consequence of
the offer, sale or issuance of the Warrant.
4.11. Full Disclosure. This Agreement, together with the
Credit Agreement and the exhibits, schedules, attachments, documents,
certificates and other written items and materials prepared and supplied to the
Purchaser by or on behalf of the Company with respect to the transactions
contemplated hereby and thereby, taken as a whole, do not and will not, as the
case may be, contain any untrue statement of a material fact or omit to
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state any material fact necessary to make the statements contained therein not
misleading in the context made. There is no fact known to the Company which
the Company has not disclosed to the Purchaser in writing and which is
reasonably likely to have a material adverse effect on the business,
operations, property, prospects or condition (financial or otherwise) of the
Company or would have an adverse effect on the enforceability against the
Company of this Agreement or the Warrant or the ability of the Company to
perform its obligations hereunder or thereunder.
SECTION 5. MISCELLANEOUS.
5.01. Expenses. The Company agrees to pay, and save the
Purchaser harmless against liability for the payment of, all reasonable
out-of-pocket expenses arising in connection with the transactions contemplated
by this Agreement or by the Warrant, including, without limitation, any stamp
or similar taxes (including interest and penalties, if any) which may be
determined to be payable in respect of the execution, delivery, issue and sale
of the Warrant, the reasonable fees and expenses of counsel to the Purchaser in
connection with the preparation of this Agreement and the issuance of the
Warrant, including any modifications, amendments or consents to such
agreements, the expense of preparing and issuing the Warrant, the cost of
delivering the Warrant to such place as the Purchaser shall determine, insured
to their satisfaction, and the costs and expenses incurred in the preparation
of all certificates and letters on behalf of the Company and of the performance
by the Company of and compliance with all agreements and conditions contained
herein to be performed or complied with.
5.02. Notices.
(a) All communications under this Agreement shall be in
writing and shall be given by delivery in person (including delivery by
courier), by telecopy or by registered or certified or first class mail,
postage prepaid, addressed as follows:
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(1) if to the Purchaser, to:
General Electric Capital Corporation
10 South La Salle Street - Suite 2800
Chicago, Illinois 60603
Attention: Account Manager
Telecopier No.: (312) 419-5957
Telephone No.: (312) 419-0985
with a copy to:
Sidley & Austin
One First National Plaza
Chicago, Illinois, 60603
Attention: H. Bruce Bernstein
Telecopier No.: (312) 853-7000
Telephone No.: (312) 853-7036
and:
General Electric Capital Corporation
201 High Ridge Road
Stamford, Connecticut 06927-5100
Attention: Corporate Counsel
Telecopier No.: (203) 316-7889
Telephone No.: (203) 316-7552
or at such other address as such Purchaser may have furnished the Company in
writing, or
(2) if to the Company, to:
Code-Alarm, Inc.
950 East Whitcomb
Madison Heights, Michigan 48071
Attention: President and Chief Financial Officer
Telecopier No.: (248) 585-4799
Telephone No.: (248) 583-9620
with a copy to:
Pepper, Hamilton & Scheetz LLP
100 Renaissance Center
Detroit, Michigan 48243
Attention: Dennis S. Kayes
Telecopier No.: (313) 259-7926
Telephone No.: (313) 393-7458
or at such other address as the Company may have furnished to the Purchaser in
writing.
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(b) Any notice so addressed and delivered by registered
or certified mail shall be deemed to have been given five business days after
being deposited in the mail, if mailed; when delivered by hand, if personally
delivered; or upon receipt, if sent by telecopier (followed by confirmation
copy sent by overnight or two-day courier).
5.03. Survival. All warranties, representations, and
covenants made herein or in any certificate or other instrument delivered by
the parties hereto or on their behalf under this Agreement shall be considered
to have been relied upon and shall survive the delivery of the Warrant and
payment therefor, regardless of any investigation made by any such party or on
their behalf. All statements in any such certificate or other instrument shall
constitute warranties and representations by such party hereunder.
5.04. Amendment. This Agreement may be amended only by a
written instrument signed by the Purchaser and the Company.
5.05. Successors and Assigns. This Agreement shall be
binding upon and shall inure to the benefit of the parties hereto and their
respective successors and assigns. Any transfer of any Warrant shall be deemed
to constitute an automatic assignment of the rights of the transferor hereunder
to the transferee.
5.06. Severability. Should any part of this Agreement for
any reason be declared invalid, such decision shall not affect the validity of
any remaining portion, which remaining portion shall remain in full force and
effect as if this Agreement had been executed with the invalid portion thereof
eliminated and it is hereby declared the intention of the parties hereto that
they would have executed the remaining portion of this Agreement without
including therein any such part or parts which may, for any reason, be
hereafter declared invalid.
5.07. Captions. The descriptive headings of the various
Sections or parts of this Agreement are for convenience only and shall not
affect the meaning or construction of any of the provisions hereof.
5.08. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF MICHIGAN, WITHOUT REGARD
TO THE CONFLICTS OF LAW RULES THEREOF.
5.09. Waiver of Jury Trial. The Company and the Purchaser
each hereby expressly acknowledges that any dispute arising out of, connected
with, or incidental to the relationships established between them in connection
with, this Agreement, will be a highly complex commercial matter inappropriate
for resolution by a jury. The Company and the Purchaser each hereby waives any
right to have a jury participate in resolving any such dispute, whether
sounding in contract, tort or other-
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wise. Instead, any disputes resolved in court will be resolved in a bench trial
without a jury.
5.10. Entire Agreement. This Agreement, together with the
Credit Agreement, the Warrant and the Registration Rights Agreement of even
date herewith among the Company, the Purchaser, Pegasus Partners, L.P. and
Pegasus Related Partners, L.P. are intended by the parties as a final
expression of their agreement and intended to be a complete and exclusive
statement of the agreement and understanding of the parties hereto in respect
of the subject matter contained herein and therein. This Agreement, together
with the Credit Agreement, the Warrant and such Registration Rights Agreement,
supersede all prior agreements and understandings between the parties with
respect to such subject matter.
5.11. Attorneys' Fees. In any action or proceeding brought
to enforce any provision of this Agreement or the Warrant, or where any
provision hereof or thereof is validly asserted as a defense, the successful
party shall be entitled to recover reasonable attorneys' fees in addition to
any other available remedy.
5.12. Counterparts. This Agreement may be executed in any
number of counterparts, each executed counterpart constituting an original but
all together only one agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the day and year first above written.
CODE-ALARM, INC.
By: /s/ Rand Mueller
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GENERAL ELECTRIC CAPITAL
CORPORATION
By: /s/ Timothy S. Van Kirk
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