Unassociated Document


    THIS
      WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF THIS WARRANT
      HAVE BEEN ACQUIRED FOR INVESTMENT PURPOSES ONLY AND MAY NOT BE TRANSFERRED
      UNTIL
      (i) A REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, AS AMENDED
      (THE “1933
      ACT”)
      SHALL
      HAVE BECOME EFFECTIVE WITH RESPECT THERETO OR (ii) RECEIPT BY THE COMPANY
      OF AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY TO THE EFFECT
      THAT REGISTRATION UNDER THE 1933 ACT IS NOT REQUIRED IN CONNECTION WITH SUCH
      PROPOSED TRANSFER NOR IS SUCH TRANSFER IN VIOLATION OF ANY APPLICABLE STATE
      SECURITIES LAWS. THIS LEGEND SHALL BE ENDORSED UPON ANY WARRANT ISSUED IN
      EXCHANGE FOR THIS WARRANT OR ANY SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE
      OF THIS WARRANT.

     

    WARRANT
      TO PURCHASE COMMON STOCK

     

    OF

     

    ARGYLE
      SECURITY ACQUISITION CORPORATION

     

    W04122007-7

     

    This
      is
      to Certify That, FOR VALUE RECEIVED, Ron
      Chaimovski or
      its
      assigns (“Holder”),
      is
      entitled to purchase, subject to the provisions of this Warrant, from Argyle
      Security Acquisition Corporation, a Delaware corporation (the “Company”),
      5,187
      shares of fully paid, validly issued and nonassessable shares of the common
      stock of the Company (“Common
      Stock”)
      at a
      price of $5.50 per share. The number of shares of Common Stock to be received
      upon the exercise of this Warrant and the price to be paid for each share of
      Common Stock may be adjusted from time to time as hereinafter set forth. The
      shares of Common Stock deliverable upon such exercise, and as adjusted from
      time
      to time, are hereinafter sometimes referred to as “Warrant
      Shares”
and
      the
      exercise price of a share Common Stock in effect at any time and as adjusted
      from time to time is hereinafter sometimes referred to as the “Exercise
      Price.”
      

     

    (a) EXERCISE
      OF WARRANT.

     

    (1) This
      Warrant may be exercised in whole or in part at any time or from time to time
      from
      the
      date the Company consummates a Business Combination (as defined in the Company
      ’s certificate of incorporation) up
      to and
      including January 24, 2011 (the “Exercise
      Period”);
      provided, however, that (i) if either such day is a day on which banking
      institutions in the State of New York are authorized by law to close, then
      on
      the next succeeding day which shall not be such a day, and (ii) in the
      event of any merger, consolidation or sale of substantially all the assets
      of
      the Company as an entirety, resulting in any distribution to the Company’s
      stockholders, prior to termination of the Exercise Period, the Holder shall
      have
      the right to exercise this Warrant commencing at such time through the
      termination of the Exercise Period into the kind and amount of shares of stock
      and other securities and property (including cash) receivable by a holder of
      the
      number of shares of Common Stock into which this Warrant might have been
      exercisable immediately prior thereto. This Warrant may be exercised by
      presentation and surrender hereof to the Company at its principal office with
      the Purchase Form annexed hereto duly executed and accompanied by payment of
      the
      Exercise Price for the number of Warrant Shares specified in such form. As
      soon
      as practicable after each such exercise of this Warrant, but not later than
      seven (7) days following the receipt of good and available funds, the Company
      shall issue and deliver to the Holder a certificate or certificates for the
      Warrant Shares issuable upon such exercise, registered in the name of the Holder
      or its designee. If this Warrant should be exercised in part only, the Company
      shall, upon surrender of this Warrant for cancellation, execute and deliver
      a
      new Warrant evidencing the rights of the Holder thereof to purchase the balance
      of the Warrant Shares purchasable hereunder. As of the end of business on the
      date of receipt by the Company of this Warrant at its office in proper form
      for
      exercise, the Holder shall be deemed to be the holder of record of the shares
      of
      Common Stock issuable upon such exercise, notwithstanding that the stock
      transfer books of the Company shall then be closed or that certificates
      representing such shares shall not then be physically delivered to the
      Holder.

     


    
      
         

      

      
         

        
          

        

      

      
         

      

    


    (2) At
      any
      time during the Exercise Period, the Holder may, at its option, exercise this
      Warrant on a cashless basis by exchanging this Warrant, in whole or in part
      (a
“Warrant
      Exchange”),
      into
      the number of Warrant Shares determined in accordance with this
      Section (a)(2), by surrendering this Warrant at the principal office of the
      Company or at the office of its stock transfer agent, accompanied by a notice
      stating such Holder’s intent to effect such exchange, the number of Warrant
      Shares to be exchanged and the date on which the Holder requests that such
      Warrant Exchange occur (the “Notice
      of Exchange”).
      The
      Warrant Exchange shall take place on the date specified in the Notice of
      Exchange or, if later, the date the Notice of Exchange is received by the
      Company (the “Exchange
      Date”).
      Certificates for the shares issuable upon such Warrant Exchange and, if this
      Warrant should be exercised in part only, a new Warrant evidencing the rights
      of
      the Holder thereof to purchase the balance of the Warrant Shares purchasable
      hereunder, shall be issued as of the Exchange Date and delivered to the Holder
      within seven (7) days following the Exchange Date. In connection with any
      Warrant Exchange, this Warrant shall represent the right to subscribe for and
      acquire the number of Warrant Shares equal to (i) the number of Warrant
      Shares specified by the Holder in its Notice of Exchange (the “Total
      Number”)
      less
      (ii) the number of Warrant Shares equal to the quotient obtained by
      dividing (A) the product of the Total Number and the existing Exercise
      Price by (B) the current market value of a share of Common Stock. Current
      market value shall means the average closing sales price for a share of the
      Common Stock for the five trading days immediately preceding the date of the
      Notice of Exchange.

     

    (b) RESERVATION
      OF SHARES. The Company shall at all times reserve for issuance and/or delivery
      upon exercise of the this Warrant such number of shares of Common Stock as
      shall
      be required for issuance and delivery upon exercise of this Warrant.


     

    (c) FRACTIONAL
      SHARES. No fractional shares or scrips representing fractional shares shall
      be
      issued upon the exercise of this Warrant. With respect to any fraction of a
      share called for upon any exercise hereof, the Company shall pay to the Holder
      an amount in cash equal to such fraction multiplied by the current market value
      of a share of Common Stock, as defined in Section (a)(2) above.

     

    (d) LOSS
      OR
      DESTRUCTION OF WARRANT. Upon receipt by the Company of evidence satisfactory
      to
      it of the loss, theft, destruction or mutilation of this Warrant, and (in the
      case of loss, theft or destruction) of reasonably satisfactory indemnification,
      and upon surrender and cancellation of this Warrant, if mutilated, the Company
      will execute and deliver a new Warrant of like tenor and date. Any such new
      Warrant executed and delivered shall constitute an additional contractual
      obligation on the part of the Company, whether or not this Warrant so lost,
      stolen, destroyed, or mutilated shall be at any time enforceable by
      anyone.

     

    (e) RIGHTS
      OF
      THE HOLDER. The Holder shall not, by virtue hereof, be entitled to any rights
      of
      a shareholder in the Company, either at law or equity, and the rights of the
      Holder are limited to those expressed in this Warrant and are not enforceable
      against the Company except to the extent set forth herein.

     

    (f) ANTI-DILUTION
      PROVISIONS. In case the Company shall hereafter (i) declare a dividend or make
      a
      distribution on its outstanding Common Stock in shares of Common Stock, (ii)
      subdivide or reclassify its outstanding Common Stock into a greater number
      of
      shares, or (iii) combine or reclassify its outstanding Common Stock into a
      smaller number of shares, the Exercise Price in effect at the time of the record
      date for such dividend or distribution or of the effective date of such
      subdivision, combination or reclassification shall be adjusted so that it shall
      equal the price determined by multiplying the Exercise Price by a fraction,
      the
      denominator of which shall be the number of shares of Common Stock outstanding
      after giving effect to such action, and the numerator of which shall be the
      number of shares of Common Stock outstanding immediately prior to such action.
      The
      number of shares of Common Stock that the Holder shall thereafter, on the
      exercise hereof, be entitled to receive shall be adjusted to a number determined
      by multiplying the number of shares of Common Stock that would otherwise (but
      for the provisions of this -Section (f)) be issuable on such exercise by a
      fraction of which (a) the numerator is the Exercise Price that would otherwise
      (but for the provisions of this Section (f)) be in effect, and (b) the
      denominator is the Exercise Price in effect on the date of such exercise (taking
      into account the provisions of this Section (f)). Notwithstanding the foregoing,
      in no event shall the Exercise Price be less than the par value of the Common
      Stock. Adjustment
      pursuant to this Section shall be made successively whenever any event listed
      above shall occur. 

     


    
      
         

      

      
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    (g) NOTICES
      TO WARRANT HOLDERS. So long as this Warrant shall be outstanding, (i) if
      the Company shall pay any dividend or make any distribution upon the Common
      Stock or (ii) if the Company shall offer to the holders of Common Stock for
      subscription or purchase by them any share of any class or any other rights
      or
      (iii) if any capital reorganization of the Company, reclassification of the
      capital stock of the Company, consolidation or merger of the Company with or
      into another corporation, sale, lease or transfer of all or substantially all
      of
      the property and assets of the Company to another corporation, or voluntary
      or
      involuntary dissolution, liquidation or winding up of the Company shall be
      effected, then in any such case, the Company shall cause to be mailed by
      certified mail to the Holder, at least fifteen days prior the date specified
      in
      (x) or (y) below, as the case may be, a notice containing a brief
      description of the proposed action and stating the date on which (x) a
      record is to be taken for the purpose of such dividend, distribution or rights,
      or (y) such reclassification, reorganization, consolidation, merger,
      conveyance, lease, dissolution, liquidation or winding up is to take place
      and
      the date, if any is to be fixed, as of which the holders of Common Stock or
      other securities shall receive cash or other property deliverable upon such
      reclassification, reorganization, consolidation, merger, conveyance,
      dissolution, liquidation or winding up.

     

    (h) RECLASSIFICATION,
      REORGANIZATION OR MERGER. In case of any reclassification, capital
      reorganization or other change of outstanding Common Stock of the Company,
      or in
      case of any consolidation or merger of the Company with or into another
      corporation (other than a merger with a subsidiary in which merger the Company
      is the continuing corporation and which does not result in any reclassification,
      capital reorganization or other change of outstanding Common Stock of the class
      issuable upon exercise of this Warrant) or in case of any sale, lease or
      conveyance to another corporation of the property of the Company as an entirety,
      the Company shall, as a condition precedent to such transaction, cause effective
      provisions to be made so that the Holder shall have the right thereafter by
      exercising this Warrant at any time prior to the expiration of the Warrant,
      to
      purchase the kind and amount of shares of stock and other securities and
      property receivable upon such reclassification, capital reorganization and
      other
      change, consolidation, merger, sale or conveyance by a holder of the number
      of
      shares of Common Stock that might have been purchased upon exercise of this
      Warrant immediately prior to such reclassification, change, consolidation,
      merger, sale or conveyance. Any such provision shall include provision for
      adjustments which shall be as nearly equivalent as may be practicable to the
      adjustments provided for in this Warrant. The foregoing provisions of this
      Section (h) shall similarly apply to successive reclassifications, capital
      reorganizations and changes of Common Stock and to successive consolidations,
      mergers, sales or conveyances. In the event that in connection with any such
      capital reorganization or reclassification, consolidation, merger, sale or
      conveyance, additional shares of Common Stock shall be issued in exchange,
      conversion, substitution or payment, in whole or in part, for a security of
      the
      Company other than Common Stock, any such issue shall be treated as an issue
      of
      Common Stock covered by the provisions of Section (f) hereof.

     


    
      
         

      

      
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    (i) No
      Net-Cash Settlement.
      In
      no
      event will the Holder be entitled to receive a net-cash settlement or other
      consideration in lieu of physical settlement in securities.

     

    (j) MODIFICATION
      OF AGREEMENT. The provisions of this Warrant may from time to time be amended,
      modified or waived, by the Company and the holder of this Warrant.

     

    Dated:
      April 16, 2007

     

    
      	 	 	
                ARGYLE
                  SECURITY ACQUISITION CORPORATION

              
	 	 	 	 
	 	 	
                By:

              	
                /s/
                  Bob Marbut

              
	 	 	 	
                Name:
                  Bob Marbut

              
	 	 	 	
                Title:  
                  Co-Chief Executive Officer

              
	 	 	 	 
	
                Holder:

              	 	 	 
	 	 	 	 
	 	 	 	 
	
                
                  /s/
                    Ron Chaimovski

                

              	 	 	 
	
                Ron Chaimovski

              	 	 	 


    


    
      
         

      

      
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    PURCHASE
      FORM

     

    
      
        	 	Dated
                ____________________


      

    

     

    (1)
      The
      undersigned hereby irrevocably elects to exercise the within Warrant to the
      extent of purchasing shares of Common Stock of Argyle Security Acquisition
      Corporation (or such number of shares of Common Stock or other securities or
      property to which the undersigned is entitled in lieu thereof or in addition
      thereto under the provisions of the Warrant).

     

    (2)
      The
      undersigned hereby elects to make payment (Please check one):

     

    ___
      on a
      cashless basis pursuant to the provisions of Section (a)(2) of the
      Warrant.

     

    ___
      with
      the enclosed bank draft, certified check or money order payable to the Company
      in payment of the exercise price determined under, and on the terms specified
      in, the Warrant.

     

    (3)
      The
      undersigned hereby irrevocably directs that the said shares be issued and
      delivered as follows: 

     

    
      	
              Name(s)
                in Full

            	 	
              Address(es)

            	 	
              Number
                of Shares 

            	 	
              S.S.
                or IRS #

            
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 


    

     

     

     

    _____________________________

    Signature
      of Holder

     

    _____________________________

    Print
      Name

     

    
      
         

      

      
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