-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, B05HdqzKKa+jBzc0mk13OpXFdB8w/21YLQw/sfNY45Sek56SUfIN1CtF8B0Uph9w j4DxdHzW2j7GAhIiGnJiQw== 0000950172-96-000374.txt : 19960712 0000950172-96-000374.hdr.sgml : 19960712 ACCESSION NUMBER: 0000950172-96-000374 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 3 FILED AS OF DATE: 19960711 SROS: NYSE SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: ADT LIMITED CENTRAL INDEX KEY: 0000833444 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-MISCELLANEOUS BUSINESS SERVICES [7380] IRS NUMBER: 000000000 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D SEC ACT: 1934 Act SEC FILE NUMBER: 005-43685 FILM NUMBER: 96593568 BUSINESS ADDRESS: STREET 1: CEDAR HOUSE 41 CEDAR AVE CITY: HAMILTON HM 12 BERMU STATE: D0 BUSINESS PHONE: 8092952244 MAIL ADDRESS: STREET 1: 2255 GLADES RD STE 421A CITY: BOCA RATON STATE: FL ZIP: 334310835 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: REPUBLIC INDUSTRIES INC CENTRAL INDEX KEY: 0000350698 STANDARD INDUSTRIAL CLASSIFICATION: REFUSE SYSTEMS [4953] IRS NUMBER: 731105145 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: 200 E LAS OLAS BLVD STREET 2: STE 1400 CITY: FT. LAUDERDALE STATE: FL ZIP: 33301 BUSINESS PHONE: 3057618333 MAIL ADDRESS: STREET 1: 200 EAST LAS OLAS BLVD STREET 2: SUITE 1400 CITY: FT. LAUDERDALE STATE: FL ZIP: 33301 FORMER COMPANY: FORMER CONFORMED NAME: REPUBLIC WASTE INDUSTRIES INC DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: REPUBLIC RESOURCES CORP DATE OF NAME CHANGE: 19900226 SC 13D 1 SCHEDULE 13D SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 13D Under the Securities Exchange Act of 1934 ADT Limited (Name of Issuer) Common Shares, Par Value $.10 Per Share (Title of Class and Securities) 000915306 (CUSIP Number of Class of Securities) Richard L. Handley Senior Vice President and General Counsel Republic Industries, Inc. 200 East Las Olas Boulevard, Suite 1400 Fort Lauderdale, FL 33301 Telephone: (954) 627-6000 _____________________________________________________________ (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) Copy to: Stephen F. Arcano Skadden, Arps, Slate, Meagher & Flom 919 Third Avenue New York, New York 10022 (212) 735-3000 July 1, 1996 (Date of Event which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Statement because of Rule 13d-1(b)(3) or (4), check the following: ( ) Check the following box if a fee is being paid with this Statement: (X) SCHEDULE 13D CUSIP No. 000915306 Page 2 of 13 Pages _________________________________________________________________ (1) NAMES OF REPORTING PERSONS S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS Republic Industries, Inc. _________________________________________________________________ (2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (a) ( ) (b) (x) _________________________________________________________________ (3) SEC USE ONLY _________________________________________________________________ (4) SOURCE OF FUNDS OO _________________________________________________________________ (5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) ( ) __________________________________________________________________ (6) CITIZENSHIP OR PLACE OF ORGANIZATION Delaware _________________________________________________________________ (7) SOLE VOTING POWER NUMBER OF 15,000,000* SHARES ___________________________________ BENEFICIALLY (8) SHARED VOTING POWER OWNED BY EACH ___________________________________ REPORTING (9) SOLE DISPOSITIVE POWER PERSON 15,000,000* WITH ___________________________________ (10) SHARED DISPOSITIVE POWER _________________________________________________________________ (11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 15,000,000* _________________________________________________________________ (12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11 EXCLUDES CERTAIN SHARES (x) _________________________________________________________________ (13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11 10.1% _________________________________________________________________ (14) TYPE OF REPORTING PERSON CO _________________________________________________________________ _________________ * Beneficial ownership of 15,000,000 shares of ADT Limited's Common Shares reported hereunder is being reported solely as a result of the Common Share Purchase Warrant described in Item 4 hereof. However, Republic Industries, Inc. expressly disclaims any beneficial ownership of the 15,000,000 shares of ADT Limited Common Shares which are obtainable upon exercise of the Warrant, because the Warrant is exercisable only in the circumstances set forth in Item 4, none of which has occurred as of the date hereof. ITEM 1. SECURITY AND ISSUER. This statement relates to the common shares, par value $.10 per share (the "Common Shares"), of ADT Limited, a corporation organized under the laws of Bermuda ("ADT"). The principal executive offices of ADT are located at Cedar House, 41 Cedar Avenue, Hamilton HM12, Bermuda. ITEM 2. IDENTITY AND BACKGROUND. This statement is filed by Republic Industries, Inc., a Delaware Corporation ("Republic"). Republic is a diversified services company, which, through its subsidiaries, provides integrated solid waste disposal, collection and recycling services and electronic security services. The principal executive offices of Republic are located at 200 East Las Olas Boulevard, Suite 1400, Fort Lauderdale, Florida, 33301. Schedule I attached hereto sets forth certain additional information with respect to each director and executive officer of Republic. To Republic's knowledge, during the last five years neither Republic nor any of its directors or executive officers has been (i) convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or (ii) a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgement, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violations with respect to such laws. ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION. No amounts were paid by Republic to ADT in connection with the issuance of the Warrant. As more fully described in Item 4 below, pursuant to the terms of the Warrant (as defined below), Republic will have the right, for a six-month period commencing upon the termination of the Amalgamation Agreement (as defined below), to purchase from ADT 15,000,000 Common Shares at an exercise price of $20 per share, subject to adjustment, on the terms and subject to the conditions of the Warrant. Should Republic purchase such Common Shares pursuant to the Warrant, Republic may determine to finance such purchase from cash on hand, from cash generated by subsidiaries, by borrowings or from other sources. ITEM 4. PURPOSE OF THE TRANSACTION Republic, R.I./TRIANGLE, LTD., a wholly owned subsidiary of Republic ("Acquisition") and ADT, have entered into an Agreement and Plan of Amalgamation dated as of July 1, 1996 (the "Amalgamation Agreement") providing, among other things, for the amalgamation of Acquisition with and into ADT (the "Amalgamation"). Following the Amalgamation ADT will be a wholly owned subsidiary of Republic. A copy of the Amalgamation Agreement is attached hereto as Exhibit A and is incorporated herein by reference. Pursuant to the Amalgamation Agreement, at the effective time of the Amalgamation (the "Effective Time") (i) each common share, $1.00 par value, of Acquisition issued and outstanding immediately prior to the Effective Time will be converted into one Common Share of the surviving company and (ii) each Common Share of ADT issued and outstanding immediately prior to the Effective Time (other than ADT Common Shares held in the treasury of ADT, held by any of ADT's subsidiaries or held by Republic or its subsidiaries, which shall be cancelled) shall be converted into and represent the right to receive .92857 shares of common stock, par value $.01 per share ("Common Stock") of Republic. No fractional shares of Republic Common Stock will be issued in the Amalgamation, and ADT Shareholders who otherwise would be entitled to receive a fractional share of Republic Common Stock will receive a cash payment in lieu thereof. Consummation of the Amalgamation is subject to certain conditions, including, among others: (i) expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the receipt of other material governmental approvals; (ii) authorization of the issuance of shares of Republic Common Stock in connection with the Amalgamation by the requisite vote of the holders of Republic Common Stock; (iii) authorization of the Amalgamation and the transactions contemplated thereby by the requisite vote of the holders of ADT Common Shares; (iv) the effectiveness of a registration statement filed under the Securities Act of 1933, as amended, for the shares of Republic Common Stock to be issued in the Amalgamation; and (v) receipt of legal opinions as to the tax-free status of the Amalgamation and of accountants' letters as to the availability of pooling of interests accounting treatment for the Amalgamation. The Amalgamation Agreement may be terminated: (i) by mutual consent of Republic and ADT; (ii) by either Republic or ADT, if any permanent injunction or other order or decree of a competent governmental authority preventing the consummation of the Amalgamation shall have become final and nonappealable; (iii) by either Republic or ADT, if the Effective Time shall not have occurred before December 31, 1996; (iv) by Republic or ADT, if the requisite vote of ADT Shareholders to approve the Amalgamation, the Amalgamation Agreement and the transactions contemplated thereby shall not have been obtained or the requisite vote of the Republic Stockholders to approve the issuance of Republic Common Stock in the Amalgamation shall not have been obtained; (v) by Republic or ADT, if there has been a material breach of any of the covenants or agreements or any of the representations or warranties set forth in the Amalgamation Agreement on the part of the other party, which breach is not cured within thirty days following written notice or cannot be cured prior to the Closing; (vi) by Republic, if the holders of more than five percent of the outstanding ADT Common Shares have complied with the procedures set forth in Section 106 of the Bermuda Companies Act with respect to appraisal rights; (vii) by ADT, in order to accept a proposal for a competing transaction that the Board of Directors of ADT has determined in good faith, based on a written opinion of an internationally recognized investment banking firm, is more favorable to ADT Shareholders, from a financial point of view, than the Amalgamation (including any adjustment to the terms and conditions of the Amalgamation proposed by Republic in response to such proposal for a competing transaction), provided that ADT has given Republic written notice of such proposal at least twenty-four hours prior to such termination, setting forth in reasonable detail the material terms and provisions (including price) of such competing transaction; (viii) by Republic, if ADT's Board of Directors has (a) withdrawn or modified in a manner adverse to Republic its recommendation that ADT Shareholders approve the Bye-Law Amendment(as defined below), the Amalgamation, the Amalgamation Agreement and the transactions thereby or (b) recommended a competing transaction; or (ix) by ADT, if Republic's Board of Directors has withdrawn or modified in a manner adverse to ADT its recommendation that Republic Stockholders approve the issuance of shares of Republic Common Stock in the Amalgamation. In connection with the Amalgamation Agreement, the Board of Directors of ADT has approved and agreed to submit to a vote of ADT shareholders an amendment to the Company's Bye-laws to provide that the vote of holders of capital shares of ADT required to approve an amalgamation shall be a simple majority of the votes cast at a general meeting and a simple majority of the votes cast by holders of shares of any class of capital shares of the Company entitled to vote as a class, if a class meeting is required (the "Bye-Law Amendment"). The Amalgamation Agreement also contains certain customary restrictions on the conduct of the business of ADT pending the Amalgamation. On July 1, 1996, in order to induce Republic to enter into the Amalgamation Agreement, ADT issued to Republic a Common Share Purchase Warrant (the "Warrant"), a copy of which is attached hereto as Exhibit B and is incorporated herein by reference. Pursuant to the Warrant, ADT granted Republic the right to purchase from ADT 15,000,000 Common Shares of ADT at an exercise price of $20 per share, subject to adjustment. The Warrant will become exercisable for a six-month period commencing upon termination of the Amalgamation Agreement in accordance with its terms (the "Exercise Period"). Any Common Shares (or other securities) issued upon exercise of the Warrant and held by Republic or its affiliates and nominees will be subject for a two-year period following commencement of the Exercise Period to a proxy in favor of the Chairman of ADT to vote such Common Shares (or other securities) with respect to any matter which shall be voted upon by the shareholders of ADT. Such proxy shall automatically be revoked with respect to any Common Shares (or other securities) at such time as such shares or other securities are no longer held by Republic, its affiliates or nominees thereof. In addition, the Warrant provides that Republic will, and will cause its affiliates or nominees, to tender any Common Shares (or other securities) received upon exercise of the Warrant in any tender offer in which the Board of Directors of ADT recommends that ADT shareholders tender their shares. The Warrant may only be transferred with the consent of ADT, which, in the case of a transfer to an institutional investor may not be unreasonably withheld or delayed. Shares issued under the Warrant may not be sold to any single purchaser in an amount greater than five million shares. The Warrant contains registration rights on customary terms for three demand registrations and unlimited "piggyback" registrations. The foregoing summary of the Amalgamation Agreement and the Warrant does not purport to be complete and is qualified in its entirety by reference to the Amalgamation Agreement and the Warrant, which are attached as Exhibit A and Exhibit B, respectively. As a result of the Amalgamation, ADT Common Shares would be delisted from the London Stock Exchange and The New York Stock Exchange, Inc., and ADT will be eligible to seek termination of registration under Section 12(g)(4) of the Exchange Act. Except as set forth in this Item 4, neither Republic nor, to the best of Republic's knowledge, any of the individuals named in Schedule I hereto, has any plans or proposals which relate to or which would result in any of the actions specified in clauses (a) through (j) of Item 4 of Schedule 13D. ITEM 5. INTEREST IN SECURITIES OF THE ISSUER. (a)-(b) By reason of the issuance of the Warrant, Republic may be deemed to have sole voting and dispositive power with respect to the ADT Common shares subject to the Warrant and, accordingly, may be deemed to beneficially own 15,000,000 Common Shares of ADT, or approximately 10.1% of the ADT Common Shares outstanding on July 1, 1996, assuming exercise of the Warrant. Because the Warrant is exercisable only upon the termination of the Amalgamation Agreement in accordance with its terms, Republic expressly disclaims any beneficial ownership of the 15,000,000 Common Shares of ADT which are obtainable by Republic upon exercise of the Warrant. Michael G. DeGroote, Vice Chairman and a Director of Republic, indirectly through Westbury (Bermuda) Ltd., a Bermuda corporation controlled by Mr. DeGroote, may be deemed to beneficially own 421,300 Common Shares of ADT, which is less than one percent of the ADT Common Shares outstanding on July 1, 1996. Republic expressly disclaims any beneficial ownership of the 421,300 Common Shares of ADT held by Westbury (Bermuda) Ltd. Except as set forth above, neither Republic nor, to the best of Republic's knowledge, any of the individuals named in Schedule I hereto, beneficially owns any Common Shares of ADT. (c) Except as set forth in Item 4, neither Republic nor, to the best of Republic's knowledge, any of the individuals named in Schedule I hereto, has effected any transaction in the Common Shares of ADT during the past 60 days. (d) Republic does not have the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, any ADT Common Shares until such time as the Warrant has been exercised. (e) Inapplicable. ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER. In connection with the execution of the Amalgamation Agreement, (i) Michael A. Ashcroft, Chairman and Chief Executive Officer of ADT, agreed to vote his ADT Common Shares in favor of the Amalgamation, the Amalgamation Agreement and the transactions contemplated thereby, including the Bye-Law Amendment and (ii) H. Wayne Huizenga, Chairman and Chief Executive Officer of Republic, and Michael G. DeGroote, director of Republic, agreed to vote their Republic stock in favor of the issuance of Republic Common Stock in the Amalgamation. Except as provided in the Amalgamation Agreement, the Warrant, or as set forth or incorporated by reference in this Item 6 and Item 4 hereof, neither Republic nor, to the best of Republic's knowledge, any of the individuals named in Schedule I hereto, has any contracts, arrangements, understandings or relationships (legal or otherwise), with any person either with respect to any securities of ADT, including, but not limited to, transfer or voting of any securities, finder's fees, joint ventures, loan or option arrangements, puts or calls, guarantees of profits, division of profits or losses, or the giving or withholding of proxies. ITEM 7. MATERIALS TO BE FILED AS EXHIBITS. Exhibit A -- Agreement and Plan of Amalgamation among Republic Industries, Inc., R.I./TRIANGLE, LTD. and ADT Limited, dated as of July 1, 1996. Exhibit B -- ADT Limited Common Share Purchase Warrant, dated as of July 1, 1996. SIGNATURE After reasonable inquiry and to the best of its knowledge and belief, the undersigned certifies that the information set forth in this statement is true, complete and correct. Dated: July 11, 1996 Republic Industries, Inc. By: /s/ Richard L. Handley Richard L. Handley Senior Vice President and General Counsel SCHEDULE I DIRECTORS AND EXECUTIVE OFFICERS OF REPUBLIC INDUSTRIES, INC. Set forth below is the name, current business address, and the present principal occupation or employment of each director and executive officer of Republic. Unless otherwise indicated each person identified below is employed by Republic. The principal address of Republic and, unless otherwise indicated below, the current business address for each individual listed below is Republic Industries, Inc., 200 East Las Olas Boulevard, Suite 1400, Fort Lauderdale, Florida 33301. Each such person is a citizen of the United States, except for Michael G. DeGroote who is a citizen of Bermuda. Name and Address Present Principal Occupation or Employment H. Wayne Huizenga Chairman of the Board and Chief Executive Officer. Michael G. DeGroote Vice Chairman and a Director. Harris W. Hudson President and a Director. J. P. Bryan Director. Mr. Bryan is President Gulf Canada, Inc. and Chief Executive Officer of Gulf 401 9th Avenue, S.W. Canada, which is engaged in oil Calgary, Alberta, Canada and gas exploration and production. Mr. Bryan also serves on the Board of Directors of Bellweather Exploration Company. Rick L. Burdick Director. Mr. Burdick is the sole Akin, Gump, Strauss, shareholder of a professional Hauer & Feld, L.L.P. corporation which is a partner in the 711 Louisiana Street law firm of Akin, Gump, Strauss, Hauer Suite 1900 & Feld, L.L.P., a limited liability Houston, TX 77002 partnership including professional corporations. Mr. Burdick also serves as a Director of J. Ray McDermott, S.A. George D. Johnson, Jr. Director. Mr. Johnson is President, Extended Stay America Chief Executive Officer and a Director Suite 950 of ESA. Mr. Johnson is also a Director 500 East Broward Boulevard of Duke Power Company and of Viacom. Fort Lauderdale, FL 33374 John J. Melk Director. Mr. Melk is Chairman and H20 Plus, Inc. Chief Executive Officer of H20 Plus 676 North Michigan Avenue Inc. a bath and skin care product 39th Floor manufacturer and retail distributor. Chicago, IL 60611 Mr. Melk is a private investor in various businesses. Mr. Melk also serves as a Director of Psychemedics Corporation. Donald E. Koogler Executive Vice President. J. Ronald Castell Senior Vice President. Robert A. Guerin President-Republic Security Services Division Richard L. Handley Senior Vice President and General Counsel. Thomas W. Hawkins Senior Vice President. Robert J. Henninger, Jr. Senior Vice President. EXHIBIT INDEX Exhibit Description A Agreement and Plan of Amalgamation among Republic Industries, Inc., R.I./TRIANGLE, LTD. and ADT Limited, dated as of July 1, 1996. B ADT Limited Common Share Purchase Warrant, dated as of July 1996. EX-99 2 EXHIBIT A - AGREEMENT AND PLAN OF AMALGAMATION [CONFORMED COPY] EXHIBIT A AGREEMENT AND PLAN OF AMALGAMATION among REPUBLIC INDUSTRIES, INC. ("Parent"), R.I./TRIANGLE, LTD. a wholly owned direct subsidiary of Parent ("Acquisition"), and ADT LIMITED (the "Company") Dated as of July 1, 1996 AGREEMENT AND PLAN OF AMALGAMATION TABLE OF CONTENTS PAGE ARTICLE I THE AMALGAMATION . . . . . . . . . . . . . . . . . . . . . . . 2 1.1 The Amalgamation . . . . . . . . . . . . . . . . . . 2 1.2 Effective Time . . . . . . . . . . . . . . . . . . . 2 1.3 Effects of the Amalgamation . . . . . . . . . . . . . 2 1.4 Memorandum of Association and Bye-Laws . . . . . . . 2 1.5 Directors and Officers . . . . . . . . . . . . . . . 2 1.6 Additional Actions . . . . . . . . . . . . . . . . . 2 ARTICLE II CONVERSION OF SECURITIES . . . . . . . . . . . . . . . . . . . 3 2.1 Conversion of Share Capital . . . . . . . . . . . . . 3 2.2 Fractional Shares; Adjustment of Exchange Ratio . . . 3 2.3 Exchange of Certificates . . . . . . . . . . . . . . 4 2.4 Treatment of Stock Options . . . . . . . . . . . . . 6 2.5 Dissenters' Rights . . . . . . . . . . . . . . . . . 6 ARTICLE III REPRESENTATIONS AND WARRANTIES OF PARENT AND ACQUISITION . . . 7 3.1 Organization and Standing . . . . . . . . . . . . . . 7 3.2 Subsidiaries . . . . . . . . . . . . . . . . . . . . 7 3.3 Corporate Power and Authority . . . . . . . . . . . . 8 3.4 Capitalization of Parent . . . . . . . . . . . . . . 8 3.5 No Conflicts; Consents and Approvals . . . . . . . . 9 3.6 Parent SEC Documents . . . . . . . . . . . . . . . 10 3.7 Absence of Certain Changes . . . . . . . . . . . . 10 3.8 Undisclosed Liabilities . . . . . . . . . . . . . . 11 3.9 Taxes . . . . . . . . . . . . . . . . . . . . . . . 11 3.10 Litigation . . . . . . . . . . . . . . . . . . . . 12 3.11 Registration Statement . . . . . . . . . . . . . . 12 3.12 Accounting Matters . . . . . . . . . . . . . . . . 13 3.13 Employee Benefit Plans . . . . . . . . . . . . . . 13 3.14 Contracts . . . . . . . . . . . . . . . . . . . . 13 3.15 Environmental Matters. . . . . . . . . . . . . . . 14 3.16 Company Stock Ownership . . . . . . . . . . . . . 14 3.17 Brokerage and Finder's Fees . . . . . . . . . . . 14 ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE COMPANY . . . . . . . . 15 4.1 Organization and Standing . . . . . . . . . . . . . 15 4.2 Subsidiaries . . . . . . . . . . . . . . . . . . . 15 4.3 Corporate Power and Authority . . . . . . . . . . . 16 4.4 Capitalization of the Company . . . . . . . . . . . 16 4.5 No Conflicts . . . . . . . . . . . . . . . . . . . 17 4.6 Company SEC Documents . . . . . . . . . . . . . . . 17 4.7 Absence of Certain Changes . . . . . . . . . . . . 18 4.8 Undisclosed Liabilities . . . . . . . . . . . . . . 18 4.9 Taxes . . . . . . . . . . . . . . . . . . . . . . . 19 4.10 Litigation; Compliance with Law . . . . . . . . . 19 4.11 Registration Statement . . . . . . . . . . . . . . 20 4.12 Accounting Matters . . . . . . . . . . . . . . . . 20 4.13 Employee Benefit Plans . . . . . . . . . . . . . . 20 4.14 Contracts . . . . . . . . . . . . . . . . . . . . 21 4.15 Environmental Matters . . . . . . . . . . . . . . 21 4.16 Parent Stock Ownership . . . . . . . . . . . . . . 22 4.17 Board Action . . . . . . . . . . . . . . . . . . . 22 4.18 Takeover Laws . . . . . . . . . . . . . . . . . . 22 4.19 Brokerage and Finder's Fees; Expenses . . . . . . 22 ARTICLE V COVENANTS OF THE PARTIES . . . . . . . . . . . . . . . . . . 22 5.1 Mutual Covenants . . . . . . . . . . . . . . . . . 23 5.2 Covenants of Parent . . . . . . . . . . . . . . . . 24 5.3 Covenants of the Company . . . . . . . . . . . . . 27 ARTICLE VI CONDITIONS . . . . . . . . . . . . . . . . . . . . . . . . . 30 6.1 Mutual Conditions . . . . . . . . . . . . . . . . . 30 6.2 Additional Conditions to Obligations of the Company 31 6.3 Additional Conditions to Obligations of Parent and Acquisition . . . . . . . . . . . . . . . . . . . . 33 ARTICLE VII TERMINATION AND AMENDMENT . . . . . . . . . . . . . . . . . . 34 7.1 Termination . . . . . . . . . . . . . . . . . . . . 34 7.2 Effect of Termination . . . . . . . . . . . . . . . 35 7.3 Amendment . . . . . . . . . . . . . . . . . . . . . 36 7.4 Extension; Waiver . . . . . . . . . . . . . . . . . 36 ARTICLE VIII MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . 36 8.1 Survival of Representations and Warranties . . . . 36 8.2 Notices . . . . . . . . . . . . . . . . . . . . . . 36 8.3 Interpretation . . . . . . . . . . . . . . . . . . 37 8.4 Counterparts . . . . . . . . . . . . . . . . . . . 37 8.5 Entire Agreement . . . . . . . . . . . . . . . . . 38 8.6 No Third Party Beneficiaries . . . . . . . . . . . 38 8.7 Governing Law . . . . . . . . . . . . . . . . . . . 38 8.8 Specific Performance . . . . . . . . . . . . . . . 38 8.10 Expenses . . . . . . . . . . . . . . . . . . . . . 38 8.11 Severability . . . . . . . . . . . . . . . . . . . 38 8.12 Jurisdiction . . . . . . . . . . . . . . . . . . . 38 8.13 Joinder by Acquisition . . . . . . . . . . . . . . 39 SCHEDULES Schedule A: Initial Directors of the Surviving Company AGREEMENT AND PLAN OF AMALGAMATION This Agreement and Plan of Amalgamation (this "Agreement") is made and entered into as of the first day of July, 1996, by and among Republic Industries, Inc., a Delaware corporation ("Parent"), R.I./TRIANGLE, Ltd., a Bermuda company limited by shares and a wholly owned subsidiary of Parent ("Acquisition"), and ADT Limited, a Bermuda company limited by shares (the "Company"). PRELIMINARY STATEMENTS A. The respective Boards of Directors of the Company, Parent and Acquisition consider it advisable and in the best interests of their respective shareholders to effect the amalgamation of Acquisition and the Company (the "Amalgamation") pursuant to this Agreement. B. The parties intend that the Amalgamation constitute a tax-free "reorganization" within the meaning of Section 368(a) of the United States Internal Revenue Code of 1986, as amended (the "Code"). C. The parties intend that the Amalgamation be accounted for as a pooling-of-interests for financial reporting purposes. D. The respective Boards of Directors of Parent, Acquisition and the Company, by resolutions duly adopted, have approved and adopted this Agreement. E. Concurrently herewith, in order to induce Parent and Acquisition to enter into this Agreement, the Company has granted a warrant to Parent (the "Warrant"). Now, therefore, in consideration of the premises and the representations and warranties, covenants and other agreements hereinafter set forth, the parties hereto, intending to be legally bound hereby, agree as follows: ARTICLE I THE AMALGAMATION 1.1 The Amalgamation. Upon the terms and subject to the conditions hereof, and in accordance with the provisions of The Companies Act 1981, as amended (the "Companies Act"), Acquisition shall be amalgamated with and into the Company as soon as practicable following the satisfaction or waiver of the conditions set forth in Article VI. Upon the Amalgamation, the separate corporate existence of Acquisition shall cease and the Company shall continue as the amalgamated company and operate under the name "ADT Limited" under the laws of Bermuda. The amalgamated company is hereinafter sometimes referred to as the "Surviving Company." 1.2 Effective Time. The Amalgamation shall be consummated by filing with the Registrar of Companies of Bermuda (the "Registrar") a duly executed and verified application for registration of the Surviving Company and such other documents as are required by the Companies Act, all in accordance with Sections 104 and 108 of the Companies Act. The Amalgamation shall become effective (the "Effective Time") at the time and on the date set forth in the certificate of amalgamation issued by the Registrar. Prior to the filing referred to in this Section 1.2, a closing (the "Closing") shall be held at the offices of Parent, or such other place as the parties may agree on the date (the "Closing Date") specified by the parties, which date shall be as soon as practicable, but in any event within two business days, following the date upon which all conditions set forth in Article VI hereof have been satisfied or waived, to the extent permitted by Applicable Laws (as defined below), or such other time as the parties may mutually agree. 1.3 Effects of the Amalgamation. The Amalgamation shall have the effects set forth in Section 109 of the Companies Act. 1.4 Memorandum of Association and Bye-Laws. At the Effective Time (i) the Memorandum of Association of the Company as in effect immediately prior to the Effective Time shall be the Memorandum of Association of the Surviving Company and (ii) the Bye-Laws of the Company in effect immediately prior to the Effective Time shall be the Bye-Laws of the Surviving Company; in each case until amended in accordance with applicable law. 1.5 Directors and Officers. From and after the Effective Time, the officers of the Company shall be the officers of the Surviving Company and the directors of Acquisition shall be the directors of the Surviving Company, in each case until their respective successors are duly elected and qualified. The name and address of each initial director of the Surviving Company is set forth on Schedule A hereto. 1.6 Additional Actions. If, at any time after the Effective Time, the Surviving Company shall consider or be advised that any further deeds, assignments or assurances in law or any other acts are necessary or desirable to carry out the provisions of this Agreement, the proper officers and directors of Parent and the Surviving Company shall take all such necessary action. ARTICLE II CONVERSION OF SECURITIES 2.1 Conversion of Share Capital. At the Effective Time, by virtue of the Amalgamation and without any action on the part of Parent, Acquisition, the Company or any holder thereof: (a) Each common share, $1.00 par value, of Acquisition issued and outstanding immediately prior to the Effective Time shall be cancelled and cease to exist and shall be converted into one common share, $.10 par value, of the Surviving Company. Such newly issued shares shall thereafter constitute all of the issued and outstanding shares of the Surviving Company. (b) Each Company Common Share (other than shares to be cancelled in accordance with Section 2.1(c)) issued and outstanding immediately prior to the Effective Time shall be cancelled and cease to exist and shall be converted into and represent the right to receive .92857 shares of Parent Common Stock (the "Exchange Ratio"). (c) All share capital of the Company held in the treasury of the Company, held by any of Company's subsidiaries or held by Parent or any of its subsidiaries shall be cancelled and cease to exist and no payment shall be made in respect thereof. 2.2 Fractional Shares; Adjustment of Exchange Ratio. No certificates for fractional shares of Parent Common Stock shall be issued as a result of the conversions provided for in Section 2.1(b); no dividend or other distribution by Parent and no stock split, combination or reclassification with respect to Parent Common Stock shall relate to any such fractional share; and no such fractional share shall entitle the record or beneficial owner thereof to vote or to any other rights of a stockholder of Parent. In lieu of any such fractional share, to the extent that a holder of an outstanding Company Common Share would otherwise be entitled to receive a fractional share of Parent Common Stock, such holder, upon presentation of appropriate certificates for Company Common Shares to the Exchange Agent pursuant to Section 2.3, shall be entitled to receive a cash payment therefor in an amount equal to the value (determined with reference to the closing price of Parent Common Stock on the Nasdaq National Market on the last full trading day immediately prior to the Effective Time) of such fractional share. Such payment with respect to fractional shares is merely intended to provide a mechanical rounding off of, and is not a separately bargained for, consideration. If more than one certificate representing Company Common Shares shall be surrendered for the account of the same holder, the number of shares of Parent Common Stock for which certificates have been surrendered shall be computed on the basis of the aggregate number of shares represented by the certificates so surrendered. In the event that prior to the Effective Time Parent shall declare a stock dividend or other distribution on its capital stock payable in shares of Parent Common Stock or securities convertible into shares of Parent Common Stock, or effect a stock split, reclassification or combination with respect to Parent Common Stock, the Exchange Ratio set forth in Section 2.1(b) shall be appropriately adjusted to reflect such dividend, distribution, stock split, reclassification or combination. 2.3 Exchange of Certificates. (a) Exchange Agent. At or prior to the Effective Time, Parent shall deposit with an exchange agent designated by Parent and reasonably acceptable to the Company (the "Exchange Agent"), for the benefit of holders of Company Common Shares ("Company Shareholders"), for exchange in accordance with this Section 2.3, certificates representing shares of Parent Common Stock issuable pursuant to Section 2.1 in exchange for outstanding Company Common Shares and shall from time-to-time deposit cash in an amount reasonably expected to be paid pursuant to Section 2.2 (such shares of Parent Common Stock and cash, together with any dividends or distributions with respect thereto, being hereinafter referred to as the "Exchange Fund"). (b) Exchange Procedures. Promptly and, in any event, within three (3) business days after the Effective Time, Parent shall cause the Exchange Agent to mail to each holder of record of a certificate or certificates (the "Certificates") which immediately prior to the Effective Time represented outstanding Company Common Shares whose shares were converted into the right to receive shares of Parent Common Stock pursuant to Section 2.1(b), (i) a letter of transmittal (which shall specify that delivery shall be effected, and risk of loss and title to the Certificates shall pass, only upon delivery of the Certificates to the Exchange Agent and shall be in such form and have such other provisions as Parent may reasonably specify) and (ii) instructions for effecting the surrender of the Certificates in exchange for certificates representing shares of Parent Common Stock. Upon surrender of a Certificate for cancellation to the Exchange Agent, together with a duly executed letter of transmittal, the holder of such Certificate shall be entitled to receive in exchange therefor (x) a certificate representing that number of shares of Parent Common Stock which such holder has the right to receive pursuant to Section 2.1 and (y) a check representing the amount of cash in lieu of fractional shares, if any, and unpaid dividends and distributions, if any, which such holder has the right to receive pursuant to the provisions of this Article II, after giving effect to any required withholding tax, and the shares formerly represented by the Certificate so surrendered shall forthwith be cancelled. No interest will be paid or accrued on the cash in lieu of fractional shares, if any, and unpaid dividends and distributions, if any, payable to holders of Company Common Shares. In the event of a transfer of ownership of Company Common Shares which is not registered on the transfer records of the Company, a certificate representing the proper number of shares of Parent Common Stock, together with a check for the cash to be paid in lieu of fractional shares, if any, and unpaid dividends and distributions, if any, may be issued to such transferee if the Certificate representing such Company Common Shares held by such transferee is presented to the Exchange Agent, accompanied by all documents which in the reasonable judgment of the Exchange Agent are required to evidence and effect such transfer and to evidence that any applicable stock transfer taxes have been paid. Until surrendered as contemplated by this Section 2.3, each Certificate shall be deemed at any time after the Effective Time to represent only the right to receive upon surrender a certificate representing shares of Parent Common Stock and cash in lieu of fractional shares, if any, and unpaid dividends and distributions, if any, as provided in this Article II. (c) Distributions with Respect to Unexchanged Shares. Notwithstanding any other provisions of this Agreement, no dividends or other distributions declared or made after the Effective Time with respect to shares of Parent Common Stock having a record date after the Effective Time shall be paid to the holder of any unsurrendered Certificate, and no cash payment in lieu of fractional shares shall be paid to any such holder, until the holder shall surrender such Certificate as provided in this Section 2.3. Subject to the effect of Applicable Laws (as defined in Section 3.10), following surrender of any such Certificate, there shall be paid to the holder of the certificates representing whole shares of Parent Common Stock issued in exchange therefor, without interest, (i) at the time of such surrender, the amount of dividends or other distributions with a record date after the Effective Time theretofore payable with respect to such whole shares of Parent Common Stock and not paid, less the amount of any withholding taxes which may be required thereon, and (ii) at the appropriate payment date subsequent to surrender, the amount of dividends or other distributions with a record date after the Effective Time but prior to surrender and a payment date subsequent to surrender payable with respect to such whole shares of Parent Common Stock, less the amount of any withholding taxes which may be required thereon. (d) No Further Ownership Rights in Company Common Shares. All shares of Parent Common Stock issued upon surrender of Certificates in accordance with the terms hereof (including any cash paid pursuant to this Article II) shall be deemed to have been issued in full satisfaction of all rights pertaining to such Company Common Shares represented thereby, and from and after the Effective Time there shall be no further registration of transfers on the share transfer books of the Company of Company Common Shares. If, after the Effective Time, Certificates are presented to the Surviving Company for any reason, they shall be cancelled and exchanged as provided in this Section 2.3. (e) Termination of Exchange Fund. Any portion of the Exchange Fund which remains undistributed to Company Shareholders for six months after the Effective Time shall be delivered to Parent or the Surviving Company, upon demand thereby, and Company Shareholders who have not theretofore complied with this Section 2.3 shall thereafter look only to Parent for payment of any claim to shares of Parent Common Stock, cash in lieu of fractional shares thereof, or dividends or distributions, if any, in respect thereof. (f) No Liability. None of Parent, the Surviving Company or the Exchange Agent shall be liable to any person in respect of any Company Common Shares (or, dividends or distributions with respect thereto) or cash from the Exchange Fund delivered to a public official pursuant to any applicable abandoned property, escheat or similar law. If any Certificates shall not have been surrendered prior to seven years after the Effective Time of the Amalgamation (or immediately prior to such earlier date on which any cash, any cash in lieu of fractional shares or any dividends or distributions with respect to whole shares of Company Common Shares in respect of such Certificate would otherwise escheat to or become the property of any Governmental Authority (as defined in Section 3.5)), any such cash, dividends or distributions in respect of such Certificate shall, to the extent permitted by Applicable Law, become the property of Parent, free and clear of all claims or interest of any person previously entitled thereto. 2.4 Treatment of Stock Options. Prior to the Effective Time, Parent and the Company shall take all such actions as may be necessary, including the solicitation of necessary consents, to cause each unexpired and unexercised option outstanding under stock option plans of the Company (each, a "Company Option") to be automatically converted at the Effective Time into an option (a "Parent Exchange Option") to purchase that number of shares of Parent Common Stock equal to the number of Company Common Shares issuable immediately prior to the Effective Time upon exercise of the Company Option (without regard to actual restrictions on exercisability) multiplied by the Exchange Ratio, with an exercise price equal to the exercise price which existed under the corresponding Company Option divided by the Exchange Ratio, and with other terms and conditions that are substantially similar to the terms and conditions of such Company Option immediately before the Effective Time. Parent agrees with the Company for the benefit of itself and as trustee for the holders of Parent Exchange Options that as promptly as practicable following the Effective Time, Parent shall use its reasonable best efforts to cause to become effective a registration statement on Form S-8 to effect the registration of the shares of Parent Common Stock underlying the Parent Exchange Option under the Securities Act (as defined below). 2.5 Dissenters' Rights. Notwithstanding anything in this Agreement to the contrary, Company Common Shares outstanding immediately prior to the Effective Time and held by a holder who has complied with the provisions set forth in Section 106 of the Companies Act relating to appraisal rights, shall be converted into shares of Parent Common Stock pursuant to Section 2.1, subject to the rights of such holder under Section 106 of the Companies Act relating to appraisal rights. In the event such holder fails to perfect or effectively withdraws or otherwise loses his right to appraisal and payment under the Companies Act, such holder shall no longer have any right to appraisal thereunder. The Company shall give Parent prompt notice of any application to the courts in Bermuda filed by a holder of Company Common Shares to appraise the fair value of his Company Common Shares, and Parent shall have the right to participate in all negotiations and proceedings with respect to such applications. The Company shall not, except with the prior written consent of Parent, make any offer to settle any such proceedings. ARTICLE III REPRESENTATIONS AND WARRANTIES OF PARENT AND ACQUISITION Parent and Acquisition hereby represent and warrant to the Company as follows: 3.1 Organization and Standing. Each of Parent and its subsidiaries is a corporation duly organized, validly existing and in good standing under the laws of its jurisdiction of incorporation with full power and authority (corporate and other) to own, lease, use and operate its properties and to conduct its business as and where now owned, leased, used, operated and conducted. Each of Parent and its subsidiaries is duly qualified to do business and in good standing in each jurisdiction in which the nature of the business conducted by it or the property it owns, leases or operates makes such qualification necessary, except where the failure to be so qualified or in good standing in such jurisdiction would not have a "material adverse effect" on Parent. For the purposes of this Agreement, a "material adverse effect" with respect to any party shall mean a material adverse effect on the assets, liabilities, results of operations, business or financial condition of such party and its subsidiaries, taken as a whole. Neither Parent nor any of its subsidiaries is in default in the performance, observance or fulfillment of any provision of, in the case of Parent, its Certificate of Incorporation, or By-Laws, or, in the case of any subsidiary of Parent, its Certificate of Incorporation, By-Laws or other organizational documents. As used in this Agreement, the word "subsidiary" when used with respect to any party means any corporation or other organization, whether incorporated or unincorporated, (i) of which such party directly or indirectly owns or controls at least a majority of the securities or other interests having by their terms ordinary voting power to elect a majority of the board of directors or others performing similar functions with respect to such corporation or other organization, or any organization of which such party is a general partner and (ii) for purposes of Articles III and IV hereof, that would constitute a "significant subsidiary" of such party within the meaning of Rule 1-02 of Regulation S-X promulgated by the United States Securities and Exchange Commission (the "Commission"). 3.2 Subsidiaries. As of the date hereof, other than immaterial interests, Parent does not own, directly or indirectly, any equity or other ownership interest in any corporation, partnership, joint venture or other entity or enterprise, except as set forth in Section 3.2 to the disclosure schedule (the "Parent Disclosure Schedule") delivered by Parent to the Company and dated the date hereof. Section 3.2 of the Parent Disclosure Schedule sets forth as to each subsidiary of Parent: (i) its name and jurisdiction of incorporation or organization and (ii) the percentage of securities owned by its immediate parent. Each of the outstanding shares of capital stock of each of Parent's subsidiaries is duly authorized, validly issued, fully paid and nonassessable, and is owned, directly or indirectly, by Parent free and clear of all liens, pledges, security interests, claims or other encumbrances, other than liens imposed by law which could not reasonably be expected to have, in the aggregate, a material adverse effect on Parent. Other than as set forth in Section 3.2 of the Parent Disclosure Schedule, there are no outstanding subscriptions, options, warrants, puts, calls, agreements, understandings, claims or other commitments or rights of any type relating to the issuance, sale or transfer of any securities of any subsidiary of Parent, nor are there outstanding any securities which are convertible into or exchangeable for any shares of capital stock of any subsidiary of Parent. 3.3 Corporate Power and Authority. Each of Parent and Acquisition has all requisite corporate power and authority to enter into this Agreement and, subject to authorization of the issuance of shares of Parent Common Stock in the Amalgamation by the holders of Parent Common Stock ("Parent Stockholders"), to consummate the transactions contemplated by this Agreement. The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have been duly authorized by all necessary corporate action on the part of each of Parent and Acquisition, subject to authorization of the issuance of shares of Parent Common Stock in the Amalgamation. This Agreement has been duly executed and delivered by each of Parent and Acquisition, and constitutes the legal, valid and binding obligation of each of Acquisition and Parent enforceable against each of them in accordance with its terms. 3.4 Capitalization of Parent. As of June 19, 1996, Parent's authorized capital stock consisted solely of (a) 500,000,000 shares of common stock, $0.01 par value per share ("Parent Common Stock"), of which (i) 184,023,886 shares were issued and outstanding, (ii) no shares were issued and held in treasury and (iii) 50,589,094 shares were reserved for issuance upon the exercise or conversion of options, warrants or convertible securities granted or issuable by Parent, and (b) 5,000,000 shares of preferred stock, $0.01 par value per share, none of which was issued and outstanding or reserved for issuance. Each outstanding share of Parent capital stock is, and all shares of Parent Common Stock to be issued in connection with the Amalgamation will be, duly authorized and validly issued, fully paid and nonassessable, and each outstanding share of Parent capital stock has not been, and all shares of Parent Common Stock to be issued in connection with the Amalgamation will not be, issued in violation of any preemptive or similar rights. As of the date hereof, other than as set forth in the first sentence hereof, in the Parent SEC Documents (as defined in Section 3.6) filed with the Commission prior to the date hereof or in Section 3.4 of the Parent Disclosure Schedule, there are no outstanding subscriptions, options, warrants, puts, calls, agreements, understandings, claims or other commitments or rights of any type relating to the issuance, sale or transfer by Parent of any securities of Parent, nor are there outstanding any securities which are convertible into or exchangeable for any shares of capital stock of Parent; and Parent has no obligation of any kind to issue any additional securities or to pay for, repurchase, redeem or otherwise acquire securities of Parent or any predecessor. Parent has no outstanding bonds, debentures, notes or other similar obligations the holders of which have the right to vote generally with holders of Parent Common Stock. 3.5 No Conflicts; Consents and Approvals. Neither the execution and delivery of this Agreement by Parent or Acquisition nor the consummation of the transactions contemplated hereby will: (a) conflict with, or result in a breach of any provision of the Certificate of Incorporation or By-Laws of Parent or the Memorandum of Association or Bye-Laws of Acquisition; (b) violate any order, writ, injunction, decree, statute, rule or regulation, applicable to or binding upon Parent or any of its subsidiaries or their respective properties or assets; (c) violate, or conflict with, or result in a breach of any provision of, or constitute a default (or an event which, with the giving of notice, the passage of time or otherwise, would constitute a default) under, or entitle any party (with the giving of notice, the passage of time or otherwise) to terminate, accelerate, modify or call a default under, or result in the termination, acceleration or cancellation of, or result in the creation of any lien, security interest, charge or encumbrance upon any of the properties or assets of Parent or any of its subsidiaries or result in any right of conversion or redemption under, or result in the loss of any benefit under, any of the terms, conditions or provisions of any note, bond, mortgage, indenture, deed of trust, license, contract, undertaking, agreement, lease or other instrument or obligation to which Parent or any of its subsidiaries is a party; or (d) require any action or consent or approval of, or review by, or registration or filing by Parent or any of its affiliates with any third party or any United States or non- United States court, arbitral tribunal, administrative agency or commission or other governmental or regulatory body, agency, instrumentality or authority (a "Governmental Authority"), other than (i) authorization of the issuance of shares of Parent Common Stock pursuant to this Agreement by Parent Stockholders, (ii) authorization for inclusion of the shares of Parent Common Stock to be issued in the Amalgamation on the Nasdaq National Market, (iii) actions required by the United States Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the rules and regulations promulgated thereunder (the "HSR Act") and non- United States laws intended to prohibit, restrict or regulate actions having the purpose or effect of monopolization or restraint of trade ("Competition Laws"), (iv) the filing of the application to register the Amalgamation pursuant to the Companies Act and the consent of the Minister of Finance of Bermuda (the "Minister") to the Amalgamation and (v) registrations or other actions required under United States federal and state securities laws as are contemplated by this Agreement; except, in the case of (c) and (d), (i) as set forth in Section 3.5 of the Parent Disclosure Schedule or (ii) for any of the foregoing that would not, individually or in the aggregate, have or reasonably be expected to have a material adverse effect on Parent or materially impair or delay the consummation of the transactions contemplated hereby. 3.6 Parent SEC Documents. Each of Parent and its subsidiaries has timely filed with the Commission all forms, reports, schedules, statements, exhibits and other documents required to be filed by it since January 1, 1995 under the United States Securities Exchange Act of 1934, as amended (together with the rules and regulations thereunder, the "Exchange Act") or the United States Securities Act of 1933, as amended (together with the rules and regulations thereunder, the "Securities Act") (such documents, as supplemented and amended since the time of filing, collectively, the "Parent SEC Documents") and has heretofore made available to the Company, in the form filed with the Commission, (i) its Annual Report on Form 10-K for the year ended December 31, 1995, (ii) its Quarterly Report on Form 10-Q for the period ended March 31, 1996, (iii) all proxy statements relating to the Company's meetings of stockholders (whether annual or special) held since January 1, 1995 and (iv) all other forms, reports and registration statements (other than Quarterly Reports on Form 10- Q and preliminary materials) filed by Parent with the Commission since December 31, 1994. The Parent SEC Documents, including, without limitation, any financial statements or schedules included therein, at the time filed (and, in the case of registration statements and proxy statements, on the dates of effectiveness and the dates of mailing, respectively) (a) did not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading, and (b) complied in all material respects with the applicable requirements of the Exchange Act and the Securities Act, as the case may be. The financial statements of Parent included in the Parent SEC Documents at the time filed (and, in the case of registration statements and proxy statements, on the date of effectiveness and the date of mailing, respectively) complied as to form in all material respects with applicable accounting requirements and with the published rules and regulations of the Commission with respect thereto, were prepared in accordance with United States generally accepted accounting principles ("GAAP") applied on a consistent basis during the periods involved (except as may be indicated in the notes thereto), and fairly present (subject in the case of unaudited statements to normal, recurring and year-end audit adjustments and any other adjustments described therein that are not expected to be materially adverse to Parent and its subsidiaries taken as a whole) in all material respects the consolidated financial position of Parent as at the dates thereof and the consolidated results of its operations and cash flows for the periods then ended. 3.7 Absence of Certain Changes. Except as disclosed in the Parent SEC Documents filed with the Commission prior to the date hereof or as set forth in Section 3.7 of the Parent Disclosure Schedule, since January 1, 1996, each of Parent and its subsidiaries has conducted its business in the ordinary course, and there has been no (i) material adverse change in the assets, liabilities, results of operations, business or financial condition of Parent and its subsidiaries taken as a whole, (ii) material adverse effect on the ability of Parent to consummate the transactions contemplated hereby, (iii) declaration, setting aside or payment of any dividend or other distribution with respect to its capital stock, or (iv) change in its accounting principles, practices or methods except as required by GAAP. 3.8 Undisclosed Liabilities. Except (i) as and to the extent disclosed or reserved against on the consolidated balance sheet of Parent as of March 31, 1996 or the notes thereto included in the Parent SEC Documents filed with the Commission prior to the date hereof, (ii) as incurred after the date thereof in the ordinary course of business and not prohibited by this Agreement or (iii) as set forth in Section 3.8 of the Parent Disclosure Schedule, neither Parent nor any of its subsidiaries have any liabilities or obligations of any nature, whether known or unknown, absolute, accrued, contingent or otherwise and whether due or to become due, that, individually or in the aggregate, (i) have or would reasonably be expected to have a material adverse effect on Parent or (ii) are required to be reflected or reserved against on a consolidated balance sheet of Parent and its subsidiaries (including the notes thereto) prepared in accordance with GAAP. 3.9 Taxes. Except as set forth in Section 3.9 of the Parent Disclosure Schedule, (i) Parent and its subsidiaries have duly filed all United States federal, state and local and non- United States income, franchise, excise, real and personal property and other tax returns and reports (including, but not limited to, those filed on a consolidated, combined or unitary basis) required to have been filed by Parent or its subsidiaries with relevant tax authorities prior to the date hereof, except those as to which the failure to file would not have or would not reasonably be expected to have a material adverse effect on Parent, (ii) all of the foregoing returns and reports are true, complete and correct in all material respects, and Parent and its subsidiaries have paid or, prior to the Effective Time, will pay all taxes required to be paid in respect of the periods covered by such returns or reports to any United States federal, state and local or non-United States taxing authority, except those as to which the failure to pay would not have or would not reasonably be expected to have a material adverse effect on Parent, (iii) Parent has paid or made adequate provision (in accordance with GAAP) in the financial statements of Parent included in the Parent SEC Documents filed with the Commission prior to the date hereof for all taxes payable in respect of all periods ending on or prior to December 31, 1995, except those as to which the failure to pay would not have or would not reasonably be expected to have a material adverse effect on Parent, (iv) neither Parent nor any of its subsidiaries will have any material liability for any taxes in excess of the amounts so paid or reserves so established and neither Parent nor any of its subsidiaries is delinquent in the payment of any material tax, assessment or governmental charge and none of them has requested any extension of time within which to file any returns in respect of any fiscal year which have not since been filed, (v) no deficiencies for any tax, assessment or governmental charge have been proposed in writing, asserted or assessed (tentatively or definitely), in each case, by any taxing authority, against Parent or any of its subsidiaries for which there are not adequate reserves (in accordance with GAAP), and (vi) as of the date of this Agreement, there are no pending requests for waivers of the time to assess any such tax, other than those made in the ordinary course and for which payment has been made or there are adequate reserves (in accordance with GAAP). For purposes of this Agreement, the term "tax" shall include all United States federal, state and local and non-United States taxes including interest and penalties thereon. 3.10 Litigation; Compliance with Law. Except as disclosed in the Parent SEC Documents filed with the Commission prior to the date hereof or as set forth in Section 3.10 of the Parent Disclosure Schedule, there is no suit, claim, action, proceeding or investigation (an "Action") pending or, to the knowledge of Parent, threatened against Parent or any of its subsidiaries which, individually or in the aggregate, would have or reasonably be expected to have a material adverse effect on Parent or a material adverse effect on the ability of Parent to consummate the transactions contemplated hereby. Neither Parent nor any of its subsidiaries is subject to any outstanding order, writ, injunction or decree which, individually or in the aggregate, would have or reasonably be expected to have a material adverse effect on Parent or materially impair or delay the ability of Parent to consummate the transactions contemplated hereby. Each of Parent and its subsidiaries is in compliance with, and at all times since January 1, 1995 has been in compliance with, all applicable United States or non-United States laws, statutes, orders, rules, regulations, policies or guidelines promulgated, or judgments, decisions or orders entered by any Governmental Authority (collectively, "Applicable Laws") relating to it or its business or properties, except for any such failures to be in compliance therewith which, individually or in the aggregate, would not have or reasonably be expected to have a material adverse effect on Parent. Each of Parent and its subsidiaries is in possession of all franchises, grants, authorizations, licenses, permits, easements, variances, exemptions, consents, certificates, approvals and orders (collectively, "Permits") necessary to own, lease and operate its properties and to carry on its business as it is now being conducted, except for any such Permits the failure of which to possess, individually or in the aggregate, would not have or reasonably be expected to have a material adverse effect on Parent. 3.11 Registration Statement. None of the information provided by Parent or any of its subsidiaries for inclusion in the registration statement on Form S-4 to be filed with the Commission by Parent under the Securities Act, including the prospectus (as amended, supplemented or modified, the "Prospectus") relating to shares of Parent Common Stock to be issued in the Amalgamation and the joint proxy statement and form of proxies relating to the vote of the Company Shareholders with respect to the Amalgamation and the vote of Parent Stockholders with respect to the Parent Common Stock to be issued in the Amalgamation (collectively and as amended, supplemented or modified, the "Joint Proxy Statement") contained therein (such registration statement as amended, supplemented or modified, the "Registration Statement"), at the time the Registration Statement becomes effective or, in the case of the Joint Proxy Statement, at the date of mailing, will contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they are made, not misleading. The Registration Statement and Joint Proxy Statement will each comply as to form in all material respects with the provisions of the Securities Act and the Exchange Act. No representation or warranty is made by Parent in this Section with respect to statements made or incorporated by reference in, or omitted from, the Registration Statement or the Joint Proxy Statement based on information supplied by the Company specifically for inclusion or incorporation by reference therein. 3.12 Accounting Matters. To the best knowledge of Parent, neither Parent nor any of its affiliates has taken or agreed to take any action that (without giving effect to any actions taken or agreed to be taken by the Company or any of its affiliates) would prevent Parent from accounting for the business combination to be effected by the Amalgamation as a pooling-of- interests for financial reporting purposes in accordance with Accounting Principles Board Opinion No. 16, the interpretative releases issued pursuant thereto, and the pronouncements of the Commission thereon. 3.13 Employee Benefit Plans. Neither Parent nor any of its ERISA Affiliates has any liabilities with respect to any Parent Plan, including without limitation, any liabilities under the United States Employee Retirement Income Security Act of 1974, as amended ("ERISA"), except for liabilities which would not have or reasonably be expected to have a material adverse effect on Parent. As used herein: (i) "Parent Plan" means a "pension plan" (as defined in Section 3(2) of ERISA, other than a Parent Multiemployer Plan) or a "welfare plan" (as defined in Section 3(1) of ERISA) established or maintained by Parent or any of its ERISA Affiliates or to which Parent or any of its ERISA Affiliates has contributed or otherwise may have any liability; (ii) "Parent Multiemployer Plan" means a "multiemployer plan" (as defined in Section 4001(a)(3) of ERISA) to which Parent or any of its ERISA Affiliates is or has been obligated to contribute or otherwise may have any liability; and (iii) with respect to any person, "ERISA Affiliate" means any trade or business (whether or not incorporated) which is under common control or would be considered a single employer with such person pursuant to Section 414(b), (c), (m) or (o) of the Code and the regulations promulgated thereunder or pursuant to Section 4001(b) of ERISA and the regulations promulgated thereunder. 3.14 Contracts. None of Parent, any of its subsidiaries, or, to the knowledge of Parent, any other party thereto is in violation of or in default in respect of, nor has there occurred an event or condition which with the passage of time or giving of notice (or both) would constitute a default by Parent under, any contract, agreement, guarantee, lease or executory commitment (each a "Contract") to which it is a party, except such violations or defaults under such Contracts which, individually or in the aggregate, would not have a material adverse effect on Parent. Each contract to which Parent or any of its subsidiaries is a party is valid, binding and enforceable and in full force and effect, except where failure to be valid, binding and enforceable and in full force and effect would not have a material adverse effect on Parent or its subsidiaries. Neither Parent nor its subsidiaries is a party to any Contract that expressly limits the ability of Parent or any subsidiary to compete in or conduct the electronic security services business. 3.15 Environmental Matters. (a) As used herein, the term "Environmental Laws" means all laws relating to pollution or protection of human health or the environment (including, without limitation, ambient air, ionizing or non-ionizing radiation, surface water, groundwater, land surface, subsurface strata, living organisms and the eco-systems of which they form part), including, without limitation, laws relating to emissions, discharges, releases or threatened releases of chemicals, pollutants, contaminants, or industrial, toxic or hazardous substances, energy or wastes or other substances capable of causing harm to the environment (collectively, "Hazardous Materials") into the environment, or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Hazardous Materials, as well as all authorizations, codes, decrees, demands or demand letters, injunctions, judgments, licenses, notices or notice letters, orders, permits, plans or regulations issued, entered, promulgated or approved thereunder. (b) Except as disclosed in the Parent SEC Documents filed with the Commission prior to the date hereof or as set forth in Section 3.15(b) of the Parent Disclosure Schedule, there are, with respect to Parent, its subsidiaries or any predecessor of the foregoing, no past or present violations of Environmental Laws, other than those which, individually or in the aggregate, would not reasonably be expected to have a material adverse effect on Parent, and none of Parent and its subsidiaries has received any notice with respect to any of the foregoing, nor is any Action pending or threatened in connection with any of the foregoing, in each case, other than those which, individually or in the aggregate, would not reasonably be expected to have a material adverse effect on Parent. (c) Except as disclosed in the Parent SEC Documents filed with the Commission prior to the date hereof or set forth in Section 3.15(c) of the Parent Disclosure Schedule, no Hazardous Materials are contained on or about any real property currently owned, leased or used by Parent or any of its subsidiaries and no Hazardous Materials were released on or about any real property previously owned, leased or used by Parent or any of its subsidiaries during the period the property was so owned, leased or used, other than those which, individually or in the aggregate, would not have or reasonably be expected to have a material adverse effect on Parent. 3.16 Company Stock Ownership. Other than the Warrant, neither Parent nor any of its subsidiaries owns any Company Common Shares or other securities exercisable for, or convertible into, Company Common Shares. 3.17 Brokerage and Finder's Fees. Except for Parent's obligations to Allen & Company, Incorporated, Parent has not incurred and will not incur, directly or indirectly, any brokerage, finder's or similar fee in connection with the transactions contemplated by this Agreement. Other than the foregoing obligation, Parent is not aware of any claim for payment of any finder's fees, brokerage or agent's commissions or other like payments in connection with the negotiation of this Agreement or in connection with the transactions contemplated hereby. ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE COMPANY The Company hereby represents and warrants to Parent and Acquisition as follows: 4.1 Organization and Standing. Each of the Company and its subsidiaries is a corporation duly organized, validly existing and in good standing under the laws of its jurisdiction of incorporation with full power and authority (corporate and other) to own, lease, use and operate its properties and to conduct its business as and where now owned, leased, used, operated and conducted. Each of the Company and its subsidiaries is duly qualified to do business and in good standing in each jurisdiction in which the nature of the business conducted by it or the property it owns, leases or operates makes such qualification necessary, except where the failure to be so qualified or in good standing in such jurisdiction would not have a material adverse effect on the Company. Neither the Company nor any of its subsidiaries is in default in the performance, observance or fulfillment of any provision of, in the case of the Company, its Memorandum of Association, as altered, or Bye-Laws, or, in the case of any subsidiary of the Company, its Certificate of Incorporation, Bylaws or other organizational documents. The Company has heretofore made available to Parent accurate and complete copies of the Memorandum of Association and Bye-Laws as currently in effect of the Company and of similar constitutional documents of its subsidiaries. 4.2 Subsidiaries. As of the date hereof, other than immaterial interests, the Company does not own, directly or indirectly, any equity or other ownership interest in any corporation, partnership, joint venture or other entity or enterprise, except as set forth in Section 4.2 to the disclosure schedule (the "Company Disclosure Schedule") delivered by the Company to Parent and dated the date hereof. Section 4.2 of the Company Disclosure Schedule sets forth as to each subsidiary of the Company: (i) its name and jurisdiction of incorporation or organization and (ii) the percentage of securities owned by its immediate parent. Each of the outstanding shares of capital stock of each of the Company's subsidiaries is duly authorized, validly issued, fully paid and nonassessable, and is owned, directly or indirectly, by the Company free and clear of all liens, pledges, security interests, claims or other encumbrances, other than liens imposed by law which could not reasonably be expected to have, in the aggregate, a material adverse effect on the Company. Other than as set forth in Section 4.2 to the Company Disclosure Schedule, there are no outstanding subscriptions, options, warrants, puts, calls, agreements, understandings, claims or other commitments or rights of any type relating to the issuance, sale or transfer of any securities of any subsidiary of the Company, nor are there outstanding any securities which are convertible into or exchangeable for any shares of capital stock of any subsidiary of the Company; and no subsidiary of the Company has any obligation of any kind to issue any additional securities or to pay for, repurchase, redeem or otherwise acquire securities of any subsidiary of the Company or any predecessor thereof. 4.3 Corporate Power and Authority. The Company has all requisite corporate power and authority to enter into this Agreement and, subject to authorization of the Amalgamation and the transactions contemplated hereby by Company Shareholders, to consummate the transactions contemplated by this Agreement. The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have been duly authorized by all necessary corporate action on the part of the Company, subject to authorization of the Amalgamation, this Agreement and the transactions contemplated hereby by Company Shareholders. This Agreement has been duly executed and delivered by the Company and constitutes the legal, valid and binding obligation of the Company enforceable against it in accordance with its terms. 4.4 Capitalization of the Company. As of the date hereof, the Company's authorized share capital consisted solely of (a) 220,000,000 common shares, $.10 par value per share ("Company Common Shares"), of which (i) 133,492,146 shares were issued and outstanding, of which 3,182,787 are held by a subsidiary of the Company and (ii) 20,681,832 shares were reserved for issuance upon the exercise or conversion of outstanding options, warrants or convertible securities granted or issued by the Company, (b) 850,000,000 convertible cumulative redeemable preference shares, $1.00 par value per share divided into three classes (the "Company Preference Shares"), 4,936 of which were issued and outstanding and (c) 25,000 exchangeable cumulative redeemable preference shares, $1.00 par value per share, none of which were issued and outstanding. All outstanding share capital is duly authorized and validly issued, fully paid and nonassessable, and has not been issued in violation of any preemptive or similar rights. Section 4.4 of the Company Disclosure Schedule sets forth each plan, arrangement or agreement pursuant to which options with respect to Company Common Shares may be granted or under which such options have been granted and are outstanding and in the aggregate by plan, arrangement or agreement the number of options outstanding, their grant price, the date such options were granted and the number of Company Common Shares reserved for issuance pursuant to the plan, arrangement or agreement, together with the name of each holder of an option outstanding under any such plan, arrangement or agreement, a description of the exercise or purchase prices and numbers of Company Common Shares subject to each such option, together with a listing of all options which by their terms shall vest at the Effective Time as a result of the Amalgamation. As of the date hereof, other than as set forth in Section 4.4 of the Company Disclosure Schedule, there are no outstanding subscriptions, options, stock appreciation rights, warrants, puts, calls, agreements, understandings, claims or other commitments or rights of any type relating to the issuance, sale or transfer by the Company of any securities of the Company, nor are there outstanding any securities which are convertible into or exchangeable for any capital shares of the Company; and the Company has no obligation of any kind to issue any additional securities or to pay for, repurchase, redeem or otherwise acquire securities of the Company or any predecessor. The Company has no outstanding bonds, debentures, notes or other similar obligations the holders of which have the right to vote generally with holders of Company Common Shares. There are no voting trusts or other agreements or understandings to which the Company or any of its subsidiaries is a party with respect to voting of Company Common Shares. 4.5 No Conflicts; Consents and Approvals. Neither the execution and delivery of this Agreement by the Company, nor the consummation of the transactions contemplated hereby will: (a) conflict with, or result in a breach of any provision of the Memorandum of Association, as altered, or Bye-Laws of the Company; (b) violate any order, writ, injunction, decree, statute, rule or regulation applicable to or binding upon the Company or any of its subsidiaries or any of their respective properties or assets; (c) violate, or conflict with, or result in a breach of any provision of, or constitute a default (or an event which, with the giving of notice, the passage of time or otherwise, would constitute a default) under, or entitle any party (with the giving of notice, the passage of time or otherwise) to terminate, accelerate, modify or call a default under, or result in the termination, acceleration or cancellation of, or result in the creation of any lien, security interest, charge or encumbrance upon any of the properties or assets of the Company or any of its subsidiaries or result in any right of conversion or redemption under, or result in the loss of any benefit under, any of the terms, conditions or provisions of any note, bond, mortgage, indenture, deed of trust, license, contract, undertaking, agreement, lease or other instrument or obligation to which the Company or any of its subsidiaries is a party; or (d) require any action or consent or approval of, or review by, or registration or filing by the Company or any of its affiliates with any third party or any Governmental Authority, other than (i) authorization of the Amalgamation and the transactions contemplated hereby by Company Shareholders, (ii) actions required by the HSR Act and Competition Laws, (iii) the filing of the application to register the Amalgamation pursuant to the Companies Act and the consent of the Minister to the Amalgamation and (iv) registrations or other actions required under United States federal and state securities laws as are contemplated by this Agreement; except, in the case of (c) and (d), (i) as set forth in Section 4.5 of the Company Disclosure Schedule or (ii) for any of the foregoing that would not, individually or in the aggregate, have or reasonably be expected to have a material adverse effect on the Company or materially impair or delay the consummation of the transactions contemplated hereby. 4.6 Company SEC Documents. Each of the Company and its subsidiaries has timely filed with the Commission all forms, reports, schedules, statements, exhibits and other documents required to be filed by it since January 1, 1993 under the Exchange Act or the Securities Act (such documents, as supplemented and amended since the time of filing, collectively, the "Company SEC Documents") and has heretofore made available to Parent, in the form filed with the Commission, (i) its Annual Reports on Form 10-K for the years ended December 31, 1995, 1994 and 1993, respectively, (ii) its Quarterly Report on Form 10-Q for the period ended March 31, 1996, (iii) all proxy statements relating to Parent's meetings of stockholders (whether annual or special) held since January 1, 1993 and (iv) all other forms, reports and registration statements (other than Quarterly Reports on Form 10-Q and preliminary materials) filed by the Company with the Commission since December 31, 1992. The Company SEC Documents, including, without limitation, any financial statements or schedules included therein, at the time filed (and, in the case of registration statements and proxy statements, on the dates of effectiveness and the dates of mailing, respectively) (a) did not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading, and (b) complied in all material respects with the applicable requirements of the Exchange Act and the Securities Act, as the case may be. The financial statements of the Company included in the Company SEC Documents at the time filed (and, in the case of registration statements and proxy statements, on the date of effectiveness and the date of mailing, respectively) complied as to form in all material respects with applicable accounting requirements and with the published rules and regulations of the Commission with respect thereto, were prepared in accordance with GAAP applied on a consistent basis during the periods involved (except as may be indicated in the notes thereto), and fairly present (subject in the case of unaudited statements to normal, recurring and year-end audit adjustments and any other adjustments described therein that are not expected to be materially adverse to the Company and its subsidiaries taken as a whole) in all material respects the consolidated financial position of the Company as at the dates thereof and the consolidated results of its operations and cash flows for the periods then ended. 4.7 Absence of Certain Changes. Except as disclosed in the Company SEC Documents filed with the Commission prior to the date hereof or as set forth in Section 4.7 of the Company Disclosure Schedule, since January 1, 1996, each of the Company and its subsidiaries has conducted its business in the ordinary course, and there has been no (i) material adverse change in the assets, liabilities, results of operations, business or financial condition of the Company and its subsidiaries taken as a whole, (ii) material adverse effect on the ability of the Company to consummate the transactions contemplated hereby, (iii) declaration, setting aside or payment of any dividend or other distribution with respect to its share capital, or (iv) change in its accounting principles, practices or methods, except as required by GAAP. 4.8 Undisclosed Liabilities. Except (i) as and to the extent disclosed or reserved against on the consolidated balance sheet of the Company as of March 31, 1996 or the notes thereto included in the Company SEC Documents filed with the Commission prior to the date hereof or (ii) as incurred after the date thereof in the ordinary course of business and not prohibited by this Agreement, neither the Company nor any of its subsidiaries have any liabilities or obligations of any nature, whether known or unknown, absolute, accrued, contingent or otherwise and whether due or to become due, that, individually or in the aggregate, (i) have or would reasonably be expected to have a material adverse effect on the Company or (ii) are required to be reflected or reserved against on a consolidated balance sheet of the Company and its subsidiaries (including the notes thereto) prepared in accordance with GAAP. 4.9 Taxes. Except as set forth in Section 4.9 of the Company Disclosure Schedule, (i) the Company and its subsidiaries have duly filed all Bermuda, United States federal, state and local and non-United States income, franchise, excise, real and personal property and other tax returns and reports (including, but not limited to, those filed on a consolidated, combined or unitary basis) required to have been filed by the Company or its subsidiaries with relevant tax authorities prior to the date hereof, except those as to which the failure to file would not have or would not reasonably be expected to have a material adverse effect on the Company, (ii) all of the foregoing returns and reports are true, complete and correct in all material respects, and the Company and its subsidiaries have paid or, prior to the Effective Time, will pay all taxes required to be paid in respect of the periods covered by such returns or reports to any Bermuda, United States federal, state and local or non- United States taxing authority, except those as to which the failure to pay would not reasonably be expected to have a material adverse effect on the Company, (iii) the Company has paid or made adequate provision (in accordance with GAAP) in the financial statements of the Company included in the Company SEC Documents filed with the Commission prior to the date hereof for all taxes payable in respect of all periods ending on or prior to December 31, 1995, except those as to which the failure to pay would not reasonably be expected to have a material adverse effect on the Company, (iv) neither the Company nor any of its subsidiaries will have any material liability for any taxes in excess of the amounts so paid or reserves so established and neither the Company nor any of its subsidiaries is delinquent in the payment of any material tax, assessment or governmental charge, (v) no deficiencies for any tax, assessment or governmental charge have been proposed in writing, asserted or assessed (tentatively or definitely), in each case, by any taxing authority, against the Company or any of its subsidiaries for which there are not adequate reserves (in accordance with GAAP) and (vi) as of the date of this Agreement, there are no pending requests for waivers of the time to assess any such tax, other than those made in the ordinary course and for which payment has been made or there are adequate reserves (in accordance with GAAP). 4.10 Litigation; Compliance with Law. Except as disclosed in the Company SEC Documents filed prior to the date hereof or as set forth in Section 4.10 of the Company Disclosure Schedule, there is no Action pending or, to the knowledge of the Company, threatened against the Company or any of its subsidiaries which, individually or in the aggregate, would have or reasonably be expected to have a material adverse effect on the Company or a material adverse effect on the ability of the Company to consummate the transactions contemplated hereby. Neither the Company nor any of its subsidiaries is subject to any outstanding order, writ, injunction or decree which, individually or in the aggregate, would have or reasonably be expected to have a material adverse effect on the Company materially impair or delay the ability of the Company to consummate the transactions contemplated hereby. Each of the Company and its subsidiaries is in compliance with, and at all times since January 1, 1995 has been in compliance with, all Applicable Laws relating to it or its business or properties, except for any such failures to be in compliance therewith which, individually or in the aggregate, would not have a material adverse effect on the Company. Each of the Company and its subsidiaries is in possession of all Permits necessary to own, lease and operate its properties and to carry on its business as it is now being conducted, except for any such Permits the failure of which to possess, individually or in the aggregate, would not have or reasonably be expected to have a material adverse effect on the Company. 4.11 Registration Statement. None of the information provided by the Company or any of its subsidiaries for inclusion in the Registration Statement at the time it becomes effective or, in the case of the Joint Proxy Statement, at the date of mailing, will contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. The Joint Proxy Statement will comply as to form in all material respects with the provisions of the Exchange Act. No representation or warranty is made by the Company in this Section with respect to statements made or incorporated by reference in, or omitted from, the Registration Statement or the Joint Proxy Statement based on information supplied by Parent specifically for inclusion or incorporation by reference therein. 4.12 Accounting Matters. To the best knowledge of the Company, neither the Company nor any of its affiliates has taken or agreed to take any action that (without giving effect to any actions taken or agreed to be taken by Parent or any of its affiliates) would prevent Parent from accounting for the business combination to be effected by the Amalgamation as a pooling-of- interests for financial reporting purposes in accordance with Accounting Principles Board Opinion No. 16, the interpretative releases issued pursuant thereto, and the pronouncements of the Commission thereon. 4.13 Employee Benefit Plans. Section 4.13 of the Company Disclosure Schedule sets forth the name of each Company Plan and sets forth each employment, severance, termination, option, benefit, consulting or retirement plan or agreement which contains any special provision becoming effective upon the occurrence of a change in control of the Company, copies of which have heretofore been made available to Parent. Neither the Company nor any of its ERISA Affiliates has any liabilities with respect to any Company Plan, including without limitation, any liabilities under ERISA, except for liabilities which would not have or reasonably be expected to have a material adverse effect on the Company. All Company Plans that are intended to be qualified under Section 401(a) of the Code have received a favorable determination letter as to such qualification from the Internal Revenue Service, and no event has occurred, either by reason of any action or failure to act, which would cause the loss of any such qualification. As used herein: (i) "Company Plan" means a "pension plan" (as defined in Section 3(2) of ERISA, other than a Company Multiemployer Plan) or a "welfare plan" (as defined in Section 3(1) of ERISA) established or maintained by the Company or any of its ERISA Affiliates or to which the Company or any of its ERISA Affiliates has contributed or otherwise may have any liability; and (ii) "Company Multiemployer Plan" means a "multiemployer plan" (as defined in Section 4001 (a)(3) of ERISA) to which the Company or any of its ERISA Affiliates is or has been obligated to contribute or otherwise may have any liability. 4.14 Contracts. None of the Company, any of its subsidiaries, or, to the knowledge of the Company, any other party thereto is in violation of or in default in respect of, nor has there occurred an event or condition which with the passage of time or giving of notice (or both) would constitute a default by the Company under, any Contract to which it is a party, except such violations or defaults under such Contracts which, individually or in the aggregate, would not have a material adverse effect on the Company. Each contract to which the Company or any of its subsidiaries is a party is valid, binding and enforceable and in full force and effect, except where failure to be valid, binding and enforceable and in full force and effect would not have a material adverse effect on the Company. Except as disclosed in the Company SEC Documents filed with the Commission prior to the date hereof or as set forth in Section 4.14 of the Company Disclosure Schedule, neither the Company nor its subsidiaries is a party to any Contract that expressly limits the ability of the Company or any subsidiary to compete in or conduct any line of business or compete with any person or in any geographic area or during any period of time. 4.15 Environmental Matters. (a) Except as disclosed in the Company SEC Documents filed with the Commission prior to the date hereof or as set forth in Section 4.15(a) of the Company Disclosure Schedule, there are, with respect to the Company, its subsidiaries or any predecessor of the foregoing, no past or present violations of Environmental Laws, releases of any material into the environment, actions, omissions, activities, circumstances, conditions, events, incidents, or contractual obligations which may give rise to any common law environmental liability or any liability under Environmental Laws or otherwise may require remedial action in order to protect human health or the environment, other than those which, individually or in the aggregate, would not reasonably be expected to have a material adverse effect on the Company, and none of the Company and its subsidiaries has received any notice with respect to any of the foregoing, nor is any Action pending or threatened in connection with any of the foregoing, in each case, other than those which, individually or in the aggregate, would not reasonably be expected to have a material adverse effect on the Company. (b) Except as set forth in Section 4.15(b) of the Company Disclosure Schedule, no Hazardous Materials are contained on or about any real property currently owned, leased or used by the Company or any of its subsidiaries and no Hazardous Materials were released on or about any real property previously owned, leased or used by the Company or any of its subsidiaries during the period the property was so owned, leased or used, other than those which, individually or in the aggregate, would not reasonably be expected to have a material adverse effect on the Company. 4.16 Parent Stock Ownership. Neither the Company nor any of its subsidiaries owns any shares of Parent Common Stock or other securities exercisable for, or convertible into, Parent Common Stock. 4.17 Board Action. The Board of Directors of the Company, at a meeting duly called and held, has duly adopted, subject to confirmation by the Company Shareholders, an amendment to the Company s Bye-Laws (the "Bye-Law Amendment") to provide that the vote of holders of capital shares of the Company required to approve an amalgamation shall be a simple majority of the votes cast at a general meeting and a simple majority of the votes cast by holders of shares of any class of capital shares of the Company entitled to vote as a class, if a class meeting is required. 4.18 Takeover Laws. Prior to the date hereof, the Board of Directors of the Company has taken all action necessary to exempt under or make not subject to any "fair price," "moratorium," "control share acquisition" or similar anti- takeover statute or regulation enacted under any Bermuda law or any other law that purports to limit or restrict business combinations or the ability to acquire or vote shares: (i) the execution of this Agreement, (ii) the Amalgamation and (iii) the transactions contemplated hereby. 4.19 Brokerage and Finder's Fees; Expenses. Except for the Company's obligation to an internationally recognized investment banking firm (a copy of the written agreement relating to such obligation having previously been provided to Parent), the Company has not incurred and will not incur, directly or indirectly, any brokerage, finder's or similar fee in connection with the transactions contemplated by this Agreement. Other than the foregoing obligation, the Company is not aware of any claim for payment of any finder's fees, brokerage or agent's commissions or other like payments in connection with the negotiation of this Agreement or in connection with the transactions contemplated hereby. ARTICLE V COVENANTS OF THE PARTIES The parties hereto agree as follows with respect to the period from and after the execution of this Agreement: 5.1 Mutual Covenants. (a) General; HSR Act. Each of the parties hereto shall (i) make promptly its respective filings, and thereafter make any other required submissions under the HSR Act and Competition Laws with respect to the transactions contemplated hereby, (ii) use its reasonable best efforts to take, or cause to be taken, all appropriate action, and to do, or cause to be done, all things necessary, proper or advisable under applicable laws and regulations to consummate and make effective the transactions contemplated herein, including, without limitation, using its reasonable best efforts to obtain all licenses, permits, consents, approvals, authorizations, qualifications and orders of Governmental Authorities and parties to Contracts with such party or its subsidiaries as are necessary for the consummation of the transactions contemplated herein and (iii) use its reasonable best efforts to comply with the Securities Act, the Exchange Act and applicable non-United States securities laws. Each party shall use its reasonable best efforts not to take any action, or enter into any transaction, which would cause any of its representations or warranties contained in this Agreement to be untrue or result in a breach of any covenant made by it in this Agreement. (b) Pooling-of-Interests. Each of the parties shall not take any action that would prevent the Amalgamation from qualifying for, and shall use its reasonable best efforts to cause the Amalgamation to qualify for, pooling-of-interests accounting treatment for financial reporting purposes. (c) Tax-Free Treatment. Each of the parties shall not take any action that would prevent the Amalgamation from constituting, and shall use its reasonable best efforts to cause the Amalgamation to constitute, a tax-free "reorganization" under Section 368(a) of the Code and to permit the legal counsel referred to in Sections 6.2(e) and (f) and 6.3(g) and (h) to issue their respective opinions provided for therein. (d) Public Announcements. Unless otherwise required by Applicable Laws or requirements of the National Association of Securities Dealers, the New York Stock Exchange, Inc. or the London Stock Exchange, as applicable (and in such events only if time does not permit), at all times prior to the earlier of the Effective Time or termination of this Agreement pursuant to Section 7.1, Parent and the Company shall consult with each other before issuing any press release with respect to the Amalgamation and shall not issue any such press release prior to such consultation. (e) Access. From and after the date of this Agreement until the Effective Time (or the termination of this Agreement), Parent and the Company shall permit representatives of the other to have appropriate access at all reasonable times to the other's premises, properties, books, records, contracts, tax records and documents. Information obtained by Parent and the Company pursuant to this Section 5.1(e) shall be subject to the provisions of the confidentiality agreement between them dated June 28, 1996 (the "Confidentiality Agreement"), the terms of which are incorporated herein by reference. (f) Notification of Certain Matters. Each party shall give prompt notice to the other parties of (i) the occurrence or non-occurrence of any event the occurrence or non-occurrence of which would cause any representation or warranty of such party contained in this Agreement to be untrue or inaccurate at or prior to the Effective Time and (ii) any material failure of such party to comply with or satisfy any covenant, condition or agreement to be complied with or satisfied by it hereunder; provided, however, that the delivery of any notice pursuant to this Section 5.1(f) shall not limit or otherwise affect the remedies available hereunder to the other parties. Each of the parties shall promptly advise the others of (i) any notice or communication from any person alleging that the consent of such person may be required in connection with the transactions contemplated by this Agreement and (ii) any notice or communication received from any Governmental Authority in connection with the transactions contemplated by this Agreement. (g) Cooperation. Parent and the Company shall together, or pursuant to an allocation of responsibility to be agreed upon between them, coordinate and cooperate (i) with respect to the timing of the Parent Meeting and the Company Meeting (each as defined below), (ii) in determining whether any action by or in respect of, or filing with, any Governmental Authority is required, or any actions, consents, approvals or waivers are required to be obtained from parties to any material Contracts, in connection with the consummation of the transactions contemplated by this Agreement, (iii) in seeking any such actions, consents, approvals or waivers or making any such filings, furnishing information required in connection therewith and timely seeking to obtain any such actions, consents, approvals or waivers, (iv) in assisting Parent in planning to structure its holding of the Surviving Company and its subsidiaries after the Amalgamation, and (v) in seeking to satisfy the conditions set forth in Article VI, including by providing information to the Company s financial advisor in order to enable it to render the opinion referred to in Section 5.3(a). 5.2 Covenants of Parent. (a) Parent Stockholders Meeting. Parent shall take all action in accordance with Applicable Laws and its Certificate of Incorporation and By-Laws necessary to convene a meeting of Parent Stockholders (the "Parent Meeting") as promptly as practicable to consider and vote upon the approval of the issuance of shares of Parent Common Stock in the Amalgamation, and subject to its directors' fiduciary duties, the Joint Proxy Statement shall contain the recommendation of the Board of Directors of Parent that Parent Stockholders vote in favor of such issuance. (b) Preparation of Joint Proxy Statement. Parent shall cooperate with the Company to, and shall, as soon as is reasonably practicable, prepare and file the Joint Proxy Statement with the Commission on a confidential basis. Parent shall cooperate with the Company to, and shall, prepare and file the Registration Statement with the Commission as soon as is reasonably practicable following clearance of the Joint Proxy Statement by the Commission and shall cooperate with the Company to, and shall, use all reasonable efforts to have the Registration Statement declared effective by the Commission as promptly as practicable and to maintain the effectiveness of the Registration Statement through the Effective Time. Parent shall use all reasonable efforts to mail at the earliest practicable date to Parent Stockholders the Joint Proxy Statement, which shall include all information required under Applicable Laws to be furnished to Parent Stockholders in connection with the Amalgamation and the transactions contemplated thereby. Parent shall advise the Company promptly after it receives notice of (i) the Registration Statement being declared effective or any supplement or amendment thereto being filed with the Commission, (ii) the issuance of any stop order in respect of the Registration Statement, and (iii) the receipt of any correspondence, comments or requests from the Commission in respect of the Registration Statement. Parent also shall cooperate with the Company to, and shall, take such other reasonable actions (other than qualifying to do business in any jurisdiction in which it is not so qualified) required to be taken under any applicable securities laws in connection with the issuance of shares of Parent Common Stock in the Amalgamation. (c) Indemnification. Parent agrees with the Company for the benefit of itself and as trustee for the present and former directors and officers of the Company and its subsidiaries, that for a period of six years from and after the Effective Time, Parent shall cause the Surviving Company to indemnify and hold harmless to the fullest extent permitted under Applicable Law each person who is now, or has been at any time prior to the Effective Time, an officer or director of the Company or any of its subsidiaries (individually, an "Indemnified Party" and collectively, the "Indemnified Parties"), against all losses, claims, damages, liabilities, costs or expenses (including attorneys' fees), judgments, fines, penalties and amounts paid in settlement in connection with any actual or threatened claim, action, suit, proceeding or investigation arising out of or pertaining to acts or omissions, or alleged acts or omissions, by them in their capacities as such, provided, however, that the Surviving Company shall not be liable for any settlement effected without its written consent (which consent shall not be unreasonably withheld). For a period of six years from and after the Effective Time, Parent shall cause the Surviving Company to keep in effect the Company's current provisions in its Memorandum of Association and Bye-Laws providing for exculpation of director and officer liability and indemnification of the Indemnified Parties to the fullest extent permitted under the Companies Act, which provisions shall not be amended except as required by Applicable Law or except to make changes permitted by law that would enlarge the Indemnified Parties' right of indemnification. (d) Directors' and Officers' Insurance. Parent agrees with the Company for the benefit of itself and as trustee for the present and former directors and officers of the Company and its subsidiaries, to use its reasonable efforts to cause the Surviving Company to maintain in effect for not less than six years after the Effective Time the current policies of directors' and officers' liability insurance maintained by the Company with respect to matters occurring prior to the Effective Time; provided, however, that (i) the Surviving Company may substitute therefor policies of at least the same coverage containing terms and conditions which are no less advantageous to the covered officers and directors and (ii) the Surviving Company shall not be required to pay an annual premium for such insurance coverage in excess of one hundred-fifty percent of the current annual premium paid by the Company for its existing coverage, but in such case shall purchase as much coverage as possible for such amount. (e) Listing Application. Parent shall, as soon as practicable following the date hereof, prepare and submit to the National Association of Securities Dealers a listing application covering the shares of Parent Common Stock issuable in the Amalgamation, and shall use its reasonable best efforts to obtain, prior to the Effective Time, approval for the inclusion of such shares of Parent Common Stock on the Nasdaq National Market. (f) Affiliates of Parent. Parent shall use its reasonable best efforts to cause each such person who may be at the Effective Time or was on the date hereof an "affiliate" of Parent within the meaning of Rule 145 under the Securities Act, to execute and deliver to Parent not less than 35 days prior to the date of the Parent Meeting written undertakings in form reasonably acceptable to Parent. (g) Parent Board. Immediately after the Effective Time, Parent will take such action as may be necessary to cause Michael A. Ashcroft to be elected to Parent's Board of Directors. (h) Reservation of Shares. At or before the Effective Time, Parent will reserve for issuance the number of shares of Parent Common Stock then issuable upon exercise or conversion of any securities options or warrants of the Company or its subsidiaries which by their terms shall after the Effective Time be exercisable for, or convertible into, Parent Common Stock. (i) ASH Transaction. Parent will cooperate with the Company with respect to completion of the Company s recently announced proposed acquisition of Automated Security (Holdings) PLC. (j) Conduct of Parent's Operations. During the period from the date of this Agreement to the Effective Time, Parent shall conduct its operations in the ordinary course except as expressly permitted by this Agreement and shall use its reasonable efforts to maintain and preserve its business organization and its material rights and franchises and to retain the services of its officers and key employees and maintain relationships with customers, suppliers and other third parties to the end that their goodwill and ongoing business shall not be impaired in any material respect, it being understood that the foregoing shall not restrict Parent from making acquisitions of companies in its existing lines of business (which for purposes hereof consists of electronic security services, solid waste services, outdoor advertising services, and automotive retailing and related services), (i) in the case of publicly-traded companies, with the consent of the Company (which consent shall not unreasonably be withheld) and (ii) in the case of privately- held companies, in which the consideration payable by Parent does not exceed $50,000,000 for any individual acquisition or $500,000,000 in the aggregate for all such acquisitions. (k) No Solicitation. Parent agrees that, during the term of this Agreement, it shall not, and shall not authorize or permit any of its subsidiaries or any of its or its subsidiaries' directors, officers, employees, agents or representatives, directly or indirectly, to (i) solicit, initiate, encourage or facilitate, or furnish access or provide information in furtherance of, any inquiries or the making of any proposal with respect to any amalgamation, recapitalization, merger, consolidation or other business combination involving Parent, or acquisition of any share capital or any material portion of the assets of Parent, or any combination of the foregoing (a "Parent Competing Transaction"), or (ii) negotiate, otherwise engage in discussions with any person (other than the Company or its directors, officers, employees, agents and representatives) with respect to any Parent Competing Transaction; provided that the Parent may (i) furnish information to, negotiate or otherwise engage in discussions with, any party which delivers a written proposal for a Parent Competing Transaction if and so long as (A) the Board of Directors of Parent determines in good faith, based upon advice of its outside legal counsel, that such action is necessary to comply with its fiduciary duties under Applicable Law and (B) prior to furnishing non-public information to such person, Parent receives from such person an executed confidentiality agreement with terms no less favorable to Parent than those contained in the Confidentiality Agreement and (ii) take a position with respect to the Amalgamation or a Parent Competing Transaction or amend or withdraw such position, in compliance with Rule 14d-9 or Rule 14e-2 promulgated under the Exchange Act. From and after the execution of this Agreement, Parent shall promptly advise the Company in writing of the receipt, directly or indirectly, of any inquiries, discussions, negotiations, or proposals relating to any Parent Competing Transaction (including the status thereof). (l) London Stock Exchange Listing. If requested by the Company, Parent shall use its reasonable best efforts to cause the Parent Common Stock to be listed on the London Stock Exchange. 5.3 Covenants of the Company. (a) Opinion of Financial Advisor. The Company shall use its reasonable best efforts to cause an internationally recognized investment banking firm to render, as promptly as practicable, an opinion (the "Fairness Opinion") as to the fairness, from a financial point of view, to the Company Shareholders of the consideration to be received by the Company Shareholders pursuant to the Amalgamation. (b) Company Shareholders Meeting. The Company shall take all action in accordance with Applicable Laws and its Memorandum of Association, as altered, and Bye-Laws, necessary to convene a meeting of Company Shareholders (the Company Meeting ) as promptly as practicable to consider and vote upon the Bye-Law Amendment, the approval of the Amalgamation, this Agreement and the transactions contemplated hereby and, subject to its directors' fiduciary duties, the Joint Proxy Statement shall contain the recommendation of the Board of Directors of the Company that the Company Shareholders vote in favor of the Bye- Law Amendment, the Amalgamation, this Agreement and the transactions contemplated by this Agreement. (c) Information for the Registration Statement and Preparation of Joint Proxy Statement. The Company shall promptly furnish Parent with all information concerning it as may be required for inclusion in the Registration Statement. The Company shall cooperate with Parent in the preparation of the Registration Statement in a timely fashion and shall use all reasonable efforts to have the Registration Statement declared effective by the Commission as promptly as practicable. If at any time prior to the Effective Time, any information pertaining to the Company contained in or omitted from the Registration Statement makes such statements contained in the Registration Statement false or misleading, the Company shall promptly so inform Parent and provide Parent with the information necessary to make statements contained therein not false and misleading. The Company shall use all reasonable efforts to cooperate with Parent in the preparation and filing of the Joint Proxy Statement with the Commission on a confidential basis. The Company shall use all reasonable efforts to mail at the earliest practicable date to Company Shareholders the Joint Proxy Statement, which shall include all information required under Applicable Laws to be furnished to Company Shareholders in connection with the Amalgamation and the transactions contemplated thereby. (d) Conduct of the Company's Operations. During the period from the date of this Agreement to the Effective Time, the Company shall conduct its operations in the ordinary course except as expressly permitted by this Agreement and shall use its reasonable efforts to maintain and preserve its business organization and its material rights and franchises and to retain the services of its officers and key employees and maintain relationships with customers, suppliers and other third parties to the end that their goodwill and ongoing business shall not be impaired in any material respect. Without limiting the generality of the foregoing, during the period from the date of this Agreement to the Effective Time or the earlier termination of this Agreement pursuant to Section 7.1, the Company shall not, except as otherwise expressly permitted by this Agreement, without the prior written consent of Parent: (i) do or effect any of the following actions with respect to its securities: (A) adjust, split, combine or reclassify its share capital, (B) make, declare or pay any dividend or distribution on, or directly or indirectly redeem, purchase or otherwise acquire, any share capital or any securities or obligations convertible into or exchangeable for any share capital, (C) grant any person (other than Parent) any right or option to acquire any share capital, (D) issue, deliver or sell or agree to issue, deliver or sell any additional share capital or any securities or obligations convertible into or exchangeable or exercisable for any share capital or such securities (except pursuant to the exercise of options outstanding on the date hereof), or (E) enter into any agreement, understanding or arrangement with respect to the sale or voting of its share capital; (ii) make or propose any changes in its Memorandum of Association, as altered, or Bye-Laws or other organizational documents; (iii) make any acquisitions, except for acquisitions of companies in its existing lines of business (which for purposes hereof consist of electronic security services and automotive auction services), (a) in the case of publicly-traded companies, with the consent of Parent (which consent shall not unreasonably be withheld) and (b) in the case of privately-held companies, in which the consideration payable by the Company does not exceed $50,000,000 for any individual acquisition or $500,000,000 in the aggregate for all such acquisitions; (iv) enter into or modify any employment, severance, termination or similar agreements or arrangements with, or grant any bonuses, salary increases, severance or termination pay to, any officer, director, consultant or employee other than in the ordinary course of business consistent with past practice or otherwise increase the compensation or benefits provided to any officer, director, consultant or employee other than in the ordinary course of business consistent with past practice, except as may be required by Applicable Law, any applicable collective bargaining agreement or a binding written contract in effect on the date of this Agreement (it being understood that no changes may be made to the compensation and benefit arrangements currently in effect for Michael A. Ashcroft or Stephen J. Ruzika); (v) change any method or principle of accounting in a manner that is inconsistent with past practice (except as may be required to conform with GAAP); (vi) permit or cause any subsidiary to do any of the foregoing or agree or commit to do any of the foregoing; provided, that the foregoing shall not prohibit payment of dividends by any subsidiary to the Company or wholly-owned subsidiary of the Company; or (vii) agree in writing or otherwise to take any of the foregoing actions. (e) No Solicitation. The Company agrees that, during the term of this Agreement, it shall not, and shall not authorize or permit any of its subsidiaries or any of its or its subsidiaries' directors, officers, employees, agents or representatives, directly or indirectly, to (i) solicit, initiate, encourage or facilitate, or furnish access or provide information in furtherance of, any inquiries or the making of any proposal with respect to any amalgamation, recapitalization, merger, consolidation or other business combination involving the Company, or acquisition of any share capital or any material portion of the assets of the Company, or any combination of the foregoing (a "Company Competing Transaction"), or (ii) negotiate, or otherwise engage in discussions with, any person (other than Parent or its directors, officers, employees, agents and representatives) with respect to any Company Competing Transaction; provided that the Company may (i) furnish information to, negotiate or otherwise engage in discussions with, any party which delivers a written proposal for a Company Competing Transaction if and so long as (A) the Board of Directors of the Company determines in good faith, based upon advice of its outside legal counsel, that such action is necessary to comply with its fiduciary duties under Applicable Law and (B) prior to furnishing non-public information to such person, the Company receives from such person an executed confidentiality agreement with terms no less favorable to the Company than those contained in the Confidentiality Agreement and (ii) take a position with respect to the Amalgamation or a Company Competing Transaction or amend or withdraw such position, in compliance with Rule 14d-9 or Rule 14e-2 promulgated under the Exchange Act. The Company shall immediately cease all existing activities, discussions and negotiations with any parties relating to any of the foregoing. From and after the execution of this Agreement, the Company shall promptly advise Parent in writing of the receipt, directly or indirectly, of any inquiries, discussions, negotiations, or proposals relating to any Company Competing Transaction (including the status thereof). (f) Redemption of Company Preference Shares. The Company shall as promptly as practicable after the date hereof call for redemption all outstanding Company Preference Shares so that such shares shall have been redeemed and shall not be outstanding as of the record date for the Company Meeting. (g) Affiliates of the Company. The Company shall use its reasonable best efforts to cause each such person who may be at the Effective Time or was on the date hereof an "affiliate" of the Company within the meaning of Rule 145 under the Securities Act, to execute and deliver to Parent no less than 35 days prior to the date of the Company Meeting written undertakings in the form reasonably acceptable to Parent. ARTICLE VI CONDITIONS 6.1 Mutual Conditions. The obligations of the parties hereto to consummate the Amalgamation shall be subject to fulfillment of the following conditions: (a) No temporary restraining order, preliminary or permanent injunction or other order or decree which prevents the consummation of the Amalgamation or the other transactions contemplated by this Agreement shall have been issued and remain in effect, and no statute, rule or regulation shall have been enacted by any Governmental Authority which makes the Amalgamation or such other transactions illegal. (b) The Minister shall have consented to the Amalgamation. (c) All waiting periods applicable to the consummation of the Amalgamation under the HSR Act shall have expired or been terminated and all other material consents, approvals, permits or authorizations required to be obtained prior to the Effective Time from any Governmental Authority in connection with the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby shall have been obtained. (d) The Amalgamation, this Agreement and the transactions contemplated hereby shall have been duly approved by the Company Shareholders and the issuance of shares of Parent Common Stock in the Amalgamation shall have been duly approved by Parent Stockholders. (e) The Commission shall have declared the Registration Statement effective and no stop order or similar restraining order shall have been threatened by the Commission or entered by the Commission or any state securities administrator. (f) No Action shall be instituted by any Governmental Authority which seeks to prevent consummation of the Amalgamation or which seeks material damages in connection with the transactions contemplated hereby which continues to be outstanding. (g) The shares of Parent Common Stock to be issued in the Amalgamation shall have been authorized for inclusion on the Nasdaq National Market. (h) Parent shall have received a letter, in form and substance reasonably satisfactory to Parent, from Arthur Andersen LLP dated the date of the Joint Proxy Statement and confirmed in writing at the Effective Time, stating that (i) to their knowledge after due and diligent inquiry of management, there have been no transactions or events with respect to Parent which would, and the ownership structure and attributes of Parent and its shareholders would not, proscribe the transactions contemplated hereby, if consummated, from being considered as a pooling of interests business combination and (ii) the Amalgamation will qualify as a pooling of interests transaction under Opinion 16 of the Accounting Principles Board. (i) The Company shall have received a letter, in form and substance reasonably satisfactory to the Company and Parent, from Coopers & Lybrand (or another internationally recognized accounting firm reasonably acceptable to Parent), dated the date of the Joint Proxy Statement and confirmed in writing at the Effective Time, stating that to their knowledge after due and diligent inquiry of management, there have been no transactions or events with respect to the Company which would, and the ownership structure and attributes of the Company and its shareholders would not, proscribe the transactions contemplated hereby, if consummated, from being considered as a pooling of interests business combination. 6.2 Additional Conditions to Obligations of the Company. The obligations of the Company to consummate the Amalgamation and the transactions contemplated hereby shall be further subject to the fulfillment of the following conditions unless waived by the Company: (a) The representations and warranties of each of Parent and Acquisition set forth in Article III shall be true and correct on the date hereof and on and as of the Closing Date as though made on and as of the Closing Date (except for representations and warranties made as of a specified date, which need be true and correct only as of the specified date), except for such inaccuracies which, individually or in the aggregate, have not had and would not reasonably be expected to have a material adverse effect on Parent. (b) Each of Parent and Acquisition shall have performed in all material respects each obligation and agreement and shall have complied in all material respects with each covenant to be performed and complied with by it hereunder at or prior to the Effective Time. (c) Each of Parent and Acquisition shall have furnished the Company with a certificate dated the Closing Date signed on behalf of it by the Chairman, President or any Vice President to the effect that the conditions set forth in Sections 6.2(a) and (b) have been satisfied. (d) There shall have been no material adverse change in, and no event, occurrence or development in the business of Parent or its subsidiaries that, individually, or in the aggregate, would have or would reasonably be expected to have a material adverse effect on Parent. (e) The Company shall have received an opinion of reputable Bermuda counsel substantially to the effect that, under Applicable Laws, for Bermuda tax purposes, the Amalgamation will not be taxable to Parent, Acquisition, the Company or Company Shareholders. (f) The Company shall have received an opinion of Weinberg & Green (or other counsel reasonably acceptable to the Company) substantially to the effect that, on the basis of the facts, representations and assumptions set forth in such opinion which are consistent with the state of the facts then existing, under Applicable Law, for United States federal income tax purposes, the Amalgamation will constitute a reorganization under Section 368 (a) of the Code and that no gain, loss or income will be recognized by Parent, Acquisition, the Company or Company Shareholders (other than in respect of cash received for fractional shares). In rendering such opinion, Weinberg & Green (or such other counsel) may require and rely on representations contained in certificates of the Company and others, as they deem reasonably appropriate. (g) The Company shall have received a favorable Fairness Opinion. 6.3 Additional Conditions to Obligations of Parent and Acquisition. The obligations of Acquisition to consummate the Amalgamation and the other transactions contemplated hereby shall be further subject to the fulfillment of the following conditions unless waived by each of Parent and Acquisition: (a) The representations and warranties of the Company set forth in Article IV shall be true and correct on the date hereof and on and as of the Closing Date as though made on and as of the Closing Date (except for representations and warranties made as of a specified date, which need be true and correct only as of the specified date), except for such inaccuracies which, individually or in the aggregate, have not had and would not reasonably be expected to have a material adverse effect on the Company. (b) The Company shall have performed in all material respects each obligation and agreement and shall have complied in all material respects with each covenant to be performed and complied with by it hereunder at or prior to the Effective Time. (c) The Company shall have furnished Parent with a certificate dated the Closing Date signed on its behalf by its Chairman, President or any Vice President to the effect that the conditions set forth in Sections 6.3(a) and (b) have been satisfied. (d) Each person who may be at the Effective Time or was on the date of this Agreement an "affiliate" of the Company within the meaning of Rule 145 under the Securities Act, shall have executed and delivered to Parent at least 35 days prior to the date of the Company Meeting written undertakings in the form reasonably acceptable to Parent. (e) The holders of not more than five percent of the outstanding Company Common Shares shall have complied with the procedures set forth in Section 106 of the Companies Act with respect to appraisal rights. (f) There shall have been no material adverse change in, and no event, occurrence or development in the business of the Company or its subsidiaries that, individually or in the aggregate, would have or would reasonably be expected to have a material adverse effect on the Company. (g) Parent shall have received an opinion of reputable Bermuda counsel and the Company shall have received an opinion of reputable Bermuda counsel (reasonably acceptable to Parent), substantially to the effect that, under Applicable Law, for Bermuda tax purposes, the Amalgamation will not be taxable to Parent, Acquisition, the Company or Company Shareholders. (h) Parent shall have received an opinion of Skadden, Arps, Slate, Meagher & Flom and the Company shall have received an opinion of Weinberg & Green (or other counsel to the Company reasonably acceptable to Parent) substantially to the effect that, on the basis of the facts, representations and assumptions set forth in such opinion which are consistent with the state of the facts then existing, under Applicable Law, for United States federal income tax purposes, the Amalgamation will constitute a reorganization under Section 368(a) of the Code and that no gain, loss or income will be recognized by Parent, Acquisition, the Company or Company Shareholders (other than in respect of cash received for fractional shares). In rendering such opinions, Skadden, Arps, Slate, Meagher & Flom and Weinberg & Green (or such other counsel) may require and rely on representations contained in certificates of Parent, the Company, Acquisition and others, as they deem reasonably appropriate. ARTICLE VII TERMINATION AND AMENDMENT 7.1 Termination. This Agreement may be terminated at any time prior to the Effective Time, whether before or after approval and adoption of this Agreement by Company Shareholders and Parent Stockholders: (a) by mutual consent of Parent and the Company; (b) by either Parent or the Company, if any permanent injunction or other order or decree of a court or other competent Governmental Authority preventing the consummation of the Amalgamation shall have become final and nonappealable, provided that the party seeking to terminate this Agreement under this Section 7.1(b) shall have used its reasonable efforts to remove such injunction, order or decree; (c) by either Parent or the Company, if the Effective Time shall not have occurred before December 31, 1996, unless extended by the Boards of Directors of both Parent and the Company (provided that the right to terminate this Agreement under this Section 7.1(c) shall not be available to any party whose failure or whose affiliate's failure to perform any material covenant or obligation under this Agreement has been the cause of or resulted in the failure of the Amalgamation to occur on or before such date); (d) by Parent or the Company, if at the Company Meeting (including any adjournment or postponement thereof) the requisite vote of the Company Shareholders to approve the Amalgamation, this Agreement and the transactions contemplated hereby shall not have been obtained; (e) by Parent or the Company, if at the Parent Meeting (including any adjournment or postponement thereof) the requisite vote of the Parent Stockholders to approve the issuance of Parent Common Stock in the Amalgamation shall not have been obtained; (f) by Parent or the Company (provided that the terminating party is not then in material breach of any representation, warranty, covenant or other agreement contained herein), if there shall have been a material breach of any of the covenants or agreements or any of the representations or warranties set forth in this Agreement on the part of the other party, which breach is not cured within thirty days following written notice given by the terminating party to the party committing such breach, or which breach, by its nature, cannot be cured prior to the Closing; (g) by Parent or the Company at any time at or before the opening of business on July 17, 1996 if the Company shall not have received a favorable Fairness Opinion on or before the opening of business on July 15, 1996; (h) by Parent, if the holders of more than five percent of the outstanding Company Common Shares shall have complied with the procedures set forth in Section 106 of the Companies Act with respect to appraisal rights; (i) by the Company, in order to accept a proposal for a Company Competing Transaction that the Board of Directors of the Company has determined in good faith, based on a written opinion of an internationally recognized investment banking firm, is more favorable to the Company Shareholders, from a financial point of view, than the Amalgamation contemplated by this Agreement (including any adjustment to the terms and conditions of the Amalgamation proposed by Parent in response to such proposal for a Company Competing Transaction), provided that the Company shall have given Parent written notice of such proposal at least twenty-four hours prior to such termination, setting forth in reasonable detail the material terms and provisions (including price) of such Company Competing Transaction; (j) by Parent, if the Company s Board of Directors shall have (a) withdrawn or modified in a manner adverse to Parent its recommendation that Company Shareholders approve the Bye-Law Amendment, the Amalgamation, this Agreement and the transactions contemplated hereby or (b) recommended a Company Competing Transaction; or (k) by the Company, if Parent's Board of Directors shall have withdrawn or modified in a manner adverse to the Company its recommendation that Parent Stockholders approve the issuance of shares of Parent Common Stock in the Amalgamation. 7.2 Effect of Termination. In the event of the termination of this Agreement pursuant to Section 7.1, this Agreement, except for the provisions of the last sentence of Section 5.1(e) and the provisions of this Section 7.2 and Section 8.10, shall become void and have no effect, without any liability on the part of any party or its directors, officers or stockholders. Notwithstanding the foregoing, nothing in this Section 7.2 shall relieve any party to this Agreement of liability for a material breach of any provision of this Agreement. 7.3 Amendment. This Agreement may be amended by the parties hereto, by action taken or authorized by their respective Boards of Directors, at any time before or after adoption of this Agreement by Company Shareholders or authorization of issuance of shares of Parent Common Stock in the Amalgamation by Parent Stockholders, but after each such approval or authorization, no amendment shall be made which by law requires further approval or authorization by the Company Shareholders or Parent Stockholders, as the case may be, without such further approval or authorization. Notwithstanding the foregoing, this Agreement may not be amended except by an instrument in writing signed on behalf of each of the parties hereto. 7.4 Extension; Waiver. At any time prior to the Effective Time, Parent (with respect to the Company) and the Company (with respect to Parent and Acquisition) by action taken or authorized by their respective Boards of Directors, may, to the extent legally allowed, (a) extend the time for the performance of any of the obligations or other acts of such party, (b) waive any inaccuracies in the representations and warranties contained herein or in any document delivered pursuant hereto and (c) waive compliance with any of the agreements or conditions contained herein. Any agreement on the part of a party hereto to any such extension or waiver shall be valid only if set forth in a written instrument signed on behalf of such party. ARTICLE VIII MISCELLANEOUS 8.1 Survival of Representations and Warranties. The representations, warranties and covenants made herein by the parties hereto shall not survive the Effective Time, except those covenants and agreements of the parties hereto which by their terms expressly contemplate performance after the Effective Time, which shall survive for the periods set forth therein 8.2 Notices. All notices and other communications hereunder shall be in writing and shall be deemed given if delivered personally, telecopied (which is confirmed) or dispatched by a nationally recognized overnight courier service to the parties at the following addresses (or at such other address for a party as shall be specified by like notice): (a) if to Parent or Acquisition: Republic Industries, Inc. 200 East Las Olas Boulevard Suite 1400 Fort Lauderdale, FL 33301 Attention: Richard L. Handley, Esq. Telecopy No.: 954-522-8219 with a copy to Roger S. Aaron, Esq. Skadden, Arps, Slate, Meagher & Flom 919 Third Avenue New York, New York 10022 Telecopy No.: 212-735-2000 (b) if to the Company: ADT Limited Cedar House 41 Cedar Avenue Hamilton HM 12 Bermuda Attention: John D. Campbell, Esq. Telecopy No.: 441-292-8666 with a copy to J.J. McCarthy, Esq. Davis Polk & Wardwell 450 Lexington Avenue New York, New York 10007 Telecopy No.: 212-450-5648 8.3 Interpretation. When a reference is made in this Agreement to an Article or Section, such reference shall be to an Article or Section of this Agreement unless otherwise indicated. The headings and the table of contents contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. 8.4 Counterparts. This Agreement may be executed in counterparts, which together shall constitute one and the same Agreement. The parties may execute more than one copy of the Agreement, each of which shall constitute an original. 8.5 Entire Agreement. This Agreement (including the documents and the instruments referred to herein), the Warrant and the Confidentiality Agreement constitute the entire agreement among the parties and supersede all prior agreements and understandings, agreements or representations by or among the parties, written and oral, with respect to the subject matter hereof and thereof. 8.6 No Third Party Beneficiaries. Nothing in this Agreement, express or implied, is intended to or shall confer upon any person any right, benefit or remedy of any nature whatsoever under or by reason of this Agreement. 8.7 Governing Law. This Agreement shall be governed and construed in accordance with the laws of Bermuda without regard to principles of conflicts of law. 8.8 Specific Performance. The transactions contemplated by this Agreement are unique. Accordingly, each of the parties acknowledges and agrees that, in addition to all other remedies to which it may be entitled, each of the parties hereto is entitled to a decree of specific performance, provided that such party is not in material default hereunder. 8.9 Assignment. Neither this Agreement nor any of the rights, interests or obligations hereunder shall be assigned by any of the parties hereto (whether by operation of law or otherwise) without the prior written consent of the other parties. 8.10 Expenses. Parent and the Company shall pay their own costs and expenses associated with the transactions contemplated by this Agreement, except that the Company and Parent shall share equally (i) the filing fees in connection with the filing of the Joint Proxy Statement and Registration Statement with the Commission, and (ii) the expenses incurred in connection with printing and mailing the Joint Proxy Statement to the Parent Stockholders and the Company Shareholders. 8.11 Severability. Any term or provision of this Agreement which is invalid or unenforceable in any jurisdiction shall, as to that jurisdiction, be ineffective to the extent of such invalidity or unenforceability without rendering invalid or unenforceable the remaining terms and provisions of this Agreement or affecting the validity or enforceability of any of the terms or provisions of this Agreement in any other jurisdiction. If any provision of this Agreement is so broad as to be unenforceable, the provision shall be interpreted to be only so broad as is enforceable. 8.12 Jurisdiction. Any suit, action or proceeding seeking to enforce any provision of, or based on any matter arising out of or in connection with, this Agreement or the transactions contemplated by this Agreement may be brought against any of the parties in the courts of Bermuda, and each of the parties hereto hereby consents to the jurisdiction of such courts (and of the appropriate appellate courts) in any such suit, action or proceeding and waives any objection to venue laid therein. 8.13 Joinder by Acquisition. Parent and the Company acknowledge that as of the date hereof Acquisition has not yet been formed. As promptly as practicable after the date hereof, Parent shall cause Acquisition to be formed and to become a party to this Agreement by execution of this Agreement. Upon execution of this Agreement, Acquisition shall be a party to this Agreement for all purposes as if it had executed this Agreement as of the date hereof. Prior to such execution of this Agreement by Acquisition, (i) no representation or warranty, covenant or other agreement of Acquisition shall be of any force and no representation or warranty of Parent relating to Acquisition shall be of any force or effect and (ii) this Agreement shall be the valid and binding agreement of Parent and the Company. IN WITNESS WHEREOF, the undersigned parties hereto have executed this Agreement as of the date first written above. REPUBLIC INDUSTRIES, INC. By: /s/ H. Wayne Huizenga Name: H. Wayne Huizenga Title: Chief Executive Officer [SEAL] R.I./TRIANGLE, LTD. By: /s/ Thomas Clements Name: Thomas Clements Title: Vice President [SEAL] ADT LIMITED By: /s/ Michael A. Ashcroft Name: Michael A. Ashcroft Title: Director [SEAL] SCHEDULE A Initial Directors of the Surviving Company Ernest A. Morrison Hallet, Whitney & Patton The Corner House 20 Parliament Street Hamilton, MM 12 Bermuda Helen C. Adderley Hallet, Whitney & Patton The Corner House 20 Parliament Street Hamilton, MM 12 Bermuda EX-99 3 EXHIBIT B EXHIBIT B ADT LIMITED Common Share Purchase Warrant No. W-1 July 1, 1996 ADT Limited (the "Company"), a Bermuda company limited by shares, for value received, hereby certifies that Republic Industries, Inc., a Delaware corporation ("Parent Co."), or registered assigns, is entitled to purchase from the Company 15,000,000 duly authorized, validly issued, fully paid and nonassessable Common Shares, nominal value $0.10 per share (the "Common Stock") of the Company at the purchase price per share of $20, during the Exercise Period, subject to the terms, conditions and adjustments set forth below in this Warrant. This Warrant was issued in connection with the Agreement and Plan of Amalgamation (the "Amalgamation Agreement"), dated July 1, 1996, by and among Parent Co., Acquisition, a Bermuda company limited by shares and a wholly owned subsidiary of Parent Co., and the Company. As used herein, the term "Warrant" shall refer, as appli- cable, to such Warrant, as initially granted to Parent Co., or to any Warrants issued in substitution therefor or in connection with a transfer thereof. The Warrant originally so issued evidences rights to purchase an aggregate of 15,000,000 shares of Common Stock subject to adjustment as provided herein. Certain capitalized terms used in this Warrant are defined in section 14; referenc- es to an "Exhibit" are, unless otherwise specified, to one of the Exhibits attached to this Warrant and refer- ences to a "section" are, unless otherwise specified, to one of the sections of this Warrant. 1. Exercise of Warrant. 1.1. Manner of Exercise. During the Exercise Period, this Warrant may be exercised by the holder hereof, in whole but not in part, during normal business hours on any Business Day, by surrender of this Warrant to the Company, accompanied by a subscription in substantially the form attached to this Warrant (or a reasonable facsimile thereof) duly executed by such holder and accompanied by payment, in cash, by wire transfer of immediately available funds or by certified or official bank check payable to the order of the Company, in the amount obtained by multiplying (a) the number of shares of Common Stock (without giving effect to any adjustment thereof) designated in such subscription by (b) $20, and such holder shall thereupon be entitled to receive the number of duly authorized, validly issued, fully paid and nonassessable shares of Common Stock (or Other Securities) determined as provided in sections 2 through 4. 1.2. When Exercise Effective. The exercise of this Warrant shall be deemed to have been effected imme- diately prior to the close of business on the Business Day on which this Warrant shall have been surrendered to the Company as provided in section 1.1, and at such time the Person or Persons in whose name or names any certifi- cate or certificates for shares of Common Stock (or Other Securities) shall be issuable upon such exercise as provided in section 1.3 shall be deemed to have been entered in the register of members of the Company and to have become the holder or holders of record thereof. 1.3. Delivery of Stock Certificates, etc. As soon as practicable after the exercise of this Warrant, and in any event within three Business Days thereafter, the Company at its expense (including the payment by it of any applicable issue taxes) will cause to be issued in the name of and delivered to the holder hereof or, as such holder (upon payment by such holder of any applica- ble transfer taxes) may direct, a certificate or certifi- cates for the number of duly authorized, validly issued, fully paid and nonassessable shares of Common Stock (or Other Securities) to which such holder shall be entitled upon such exercise plus, in lieu of any fractional share to which such holder would otherwise be entitled, cash in an amount equal to the same fraction of the Market Price per share on the Business Day next preceding the date of such exercise. 1.4. Company to Reaffirm Obligations. The Company will, at the time of the exercise of this War- rant, upon the request of the holder hereof, acknowledge in writing its continuing obligation to afford to such holder all rights (including, without limitation, any rights to registration under the Securities Act of the shares of Common Stock or Other Securities issued upon such exercise) to which such holder shall continue to be entitled after such exercise in accordance with the terms of this Warrant, provided that if the holder of this Warrant shall fail to make any such request, such failure shall not affect the continuing obligation of the Company to afford such rights to such holder. 1.5. Conditions to Exercise of Warrant. This Warrant shall become exercisable from and after the termination of the Amalgamation Agreement in accordance with its terms. 1.6. Grant of Proxy. (a) Upon the exercise of this Warrant, the holder shall grant to the Chairman of the Company, a proxy, irrevocable for a term of two years following the commencement of the Exercise Period, to vote, at any meeting of the shareholders of the Company, any shares of Common Stock (or Other Securities) issued upon exercise of this Warrant with respect to any matter which shall be voted upon by the shareholders of the Company. Notwith- standing the foregoing, such proxy shall automatically be revoked with respect to any shares of Common Stock (or Other Securities) at such time as such shares or Other Securities are no longer held by Parent Co., its Affili- ates or nominees thereof. (b) Parent shall, and shall cause its Affiliates or nominees, to tender any shares of Common Stock (or Other Securities) received by Parent or such Person upon exercise of the Warrant and then owned by Parent or such Person in any tender offer in respect of which the Board of Directors of the Company shall have recommended that shareholders of the Company tender their shares. 2. Adjustment of Common Stock Issuable Upon Exercise. 2.1. General; Warrant Price. The number of shares of Common Stock which the holder of this Warrant shall be entitled to receive upon the exercise hereof shall be determined by multiplying the number of shares of Common Stock which would otherwise (but for the provi- sions of this section 2) be issuable upon such exercise, as designated by the holder hereof pursuant to section 1.1, by the fraction of which (a) the numerator is $20.00 and (b) the denominator is the Warrant Price in effect on the date of such exercise. The "Warrant Price" shall initially be $20.00 per share, shall be adjusted and readjusted from time to time as provided in this section 2 and, as so adjusted or readjusted, shall remain in effect until a further adjustment or readjustment thereof is required by this section 2. 2.2. Adjustment of Warrant Price. 2.2.1 Issuance of Additional Shares of Common Stock. In case the Company at any time or from time to time after the date hereof shall issue or sell Additional Shares of Common Stock (including Additional Shares of Common Stock deemed to be issued pursuant to section 2.3 or 2.4) without consideration or for a consideration per share less than the greater of the Current Market Price and the Warrant Price in effect immediately prior to such issue or sale, other than any shares of Common Stock issued in connection with the acquisition by the Company of Automated Security (Holdings) PLC ( ASH ), then, and in each such case, subject to section 2.8, such Warrant Price shall be reduced, concurrently with such issue or sale, to a price (calculated to the nearest $.001) determined by multiplying such Warrant Price by a fraction (a) the numerator of which shall be (i) the number of shares of Common Stock outstanding immediately prior to such issue or sale plus (ii) the number of shares of Common Stock which the aggregate consideration received by the Company for the total number of such Additional Shares of Common Stock so issued or sold would purchase at the greater of such Current Market Price and such Warrant Price, and (b) the denominator of which shall be the number of shares of Common Stock outstanding immediately after such issue or sale, provided that, for the purposes of this section 2.2.1, (x) immediately after any Additional Shares of Common Stock are deemed to have been issued pursuant to section 2.3 or 2.4, such Additional Shares shall be deemed to be outstanding, and (y) treasury shares shall not be deemed to be outstanding. 2.2.2 Extraordinary Dividends and Distributions. In case the Company at any time or from time to time after the date hereof shall declare, order, pay or make a dividend or other distribution (including, without limitation, any distribution of other or additional stock or other securities or property or Options by way of dividend or spin-off, reclassification, recapitalization or similar corporate rearrangement) on the Common Stock, other than (a) a dividend payable in Additional Shares of Common Stock, or (b) a regular periodic dividend payable in cash out of earned surplus at a rate not in excess of the last regular periodic cash dividend theretofore paid, then, subject to section 2.8, the Warrant Price in effect immediately prior to the close of business on the record date fixed for the determination of holders of any class of securities entitled to receive such dividend or distribution shall be reduced, effective as of the close of business on such record date, to a price (calculated to the nearest .001 of a cent) determined by multiplying such Warrant Price by a fraction (x) the numerator of which shall be the Current Market Price in effect on such record date or, if the Common Stock trades on an ex-dividend basis, on the date prior to the commencement of ex- dividend trading, less the amount of such dividend or distribution (as determined in good faith by the Board of Directors of the Company) applicable to one share of Common Stock, and (y) the denominator of which shall be such Current Market Price. , provided that, in the event that the amount of such dividend as so determined is equal to or greater than 50% of such Current Market Price, in lieu of the foregoing adjustment, adequate provision shall be made so that the holder of this Warrant shall receive a pro rata share of such dividend based upon the maximum number of shares of Common Stock at the time issuable to such holder (determined without regard to whether the Warrant is exercisable at such time). 2.3. Treatment of Options and Convertible Securities. In case the Company at any time or from time to time after the date hereof shall issue, sell, grant or assume, or shall fix a record date for the determination of holders of any class of securities entitled to receive, any Options or Convertible Securities, other than any such securities issued in connection with the acquisition by the Company of ASH then, and in each such case, for the purposes of the adjustment pursuant to Section 2.2.1, the maximum number of Additional Shares of Common Stock (as set forth in the instrument relating thereto, without regard to any provisions contained therein for a subsequent adjustment of such number) issuable upon the exercise of such Options or, in the case of Convertible Securities and Options therefor, the conversion or exchange of such Convertible Securities, shall be deemed to be Additional Shares of Common Stock issued as of the time of such issue, sale, grant or assumption or, in case such a record date shall have been fixed, as of the close of business on such record date (or, if the Common Stock trades on an ex-dividend basis, on the date prior to the commencement of ex-dividend trading), provided that such Additional Shares of Common Stock shall not be deemed to have been issued unless the consideration per share (determined pursuant to section 2.5) of such shares would be less than the greater of the Current Market Price and the Warrant Price in effect on the date of and immediately prior to such issue, sale, grant or assumption or immediately prior to the close of business on such record date (or, if the Common Stock trades on an ex-dividend basis, on the date prior to the commencement of ex-dividend trading), as the case may be, and provided, further, that in any such case in which Additional Shares of Common Stock are deemed to be issued (a) no further adjustment of the Warrant Price shall be made upon the subsequent issue or sale of Convertible Securities or shares of Common Stock upon the exercise of such Options or the conversion or exchange of such Convertible Securities, except in the case of any such Options or Convertible Securities which contain provisions requiring an adjustment, subsequent to the date of the issue or sale thereof, of the number of Additional Shares of Common Stock issuable upon the exercise of such Options or the conversion or exchange of such Convertible Securities by reason of (x) a change of control of the Company, (y) the acquisition by any Person or group of Persons of any specified number or percentage of the Voting Securities of the Company or (z) any similar event or occurrence, each such case to be deemed hereunder to involve a separate issuance of Additional Shares of Common Stock, Options or Convertible Securities, as the case may be; (b) if such Options or Convertible Securities by their terms provide, with the passage of time or otherwise, for any increase (or decrease) in the consideration payable to the Company, or decrease (or increase) in the number of Additional Shares of Common Stock issuable, upon the exercise, conversion or exchange thereof (by change of rate or otherwise), the Warrant Price computed upon the original issue, sale, grant or assumption thereof (or upon the occurrence of the record date, or date prior to the commencement of ex-dividend trading, as the case may be, with respect thereto), and any subsequent adjustments based thereon, shall, upon any such increase or decrease becoming effective, be recomputed to reflect such increase or decrease insofar as it affects such Options, or the rights of conversion or exchange under such Convertible Securities, which are outstanding at such time; (c) upon the expiration (or purchase by the Company and cancellation or retirement) of any such Options which shall not have been exercised or the expiration of any rights of conversion or exchange under any such Convertible Securities which (or purchase by the Company and cancellation or retirement of any such Convertible Securities the rights of conversion or exchange under which) shall not have been exercised, the Warrant Price computed upon the original issue, sale, grant or assumption thereof (or upon the occurrence of the record date, or date prior to the commencement of ex-dividend trading, as the case may be, with respect thereto), and any subsequent adjustments based thereon, shall, upon such expiration (or such cancellation or retirement, as the case may be), be recomputed as if: (i) in the case of Options for Common Stock or Convertible Securities, the only Additional Shares of Common Stock issued or sold were the Additional Shares of Common Stock, if any, actually issued or sold upon the exercise of such Options or the conversion or exchange of such Convertible Securities and the consideration received therefor was the consideration actually received by the Company for the issue, sale, grant or assumption of all such Options, whether or not exercised, plus the consideration actually received by the Company upon such exercise, or for the issue or sale of all such Convertible Securities which were actually converted or exchanged, plus the additional consideration, if any, actually received by the Company upon such conversion or exchange, and (ii) in the case of Options for Convertible Securities, only the Convertible Securities, if any, actually issued or sold upon the exercise of such Options were issued at the time of the issue, sale, grant or assumption of such Options, and the consideration received by the Company for the Additional Shares of Common Stock deemed to have then been issued was the consideration actually received by the Company for the issue, sale, grant or assumption of all such Options, whether or not exercised, plus the consideration deemed to have been received by the Company (pursuant to section 2.5) upon the issue or sale of such Convertible Securities with respect to which such Options were actually exercised; (d) no readjustment pursuant to subdivision (b) or (c) above shall have the effect of increasing the Warrant Price by an amount in excess of the amount of the adjustment thereof originally made in respect of the issue, sale, grant or assumption of such Options or Convertible Securities; and (e) in the case of any such Options which expire by their terms not more than 30 days after the date of issue, sale, grant or assumption thereof, no adjustment of the Warrant Price shall be made until the expiration or exercise of all such Options, whereupon such adjustment shall be made in the manner provided in subdivision (c) above. 2.4. Treatment of Stock Dividends, Stock Splits, etc. In case the Company at any time or from time to time after the date hereof shall declare or pay any dividend on the Common Stock payable in Common Stock, or shall effect a subdivision of the outstanding shares of Common Stock into a greater number of shares of Common Stock (by reclassification or otherwise than by payment of a dividend in Common Stock), then, and in each such case, Additional Shares of Common Stock shall be deemed to have been issued (a) in the case of any such dividend, immediately after the close of business on the record date for the determination of holders of any class of securities entitled to receive such dividend, or (b) in the case of any such subdivision, at the close of business on the day immediately prior to the day upon which such corporate action becomes effective. 2.5. Computation of Consideration. For the purposes of this section 2, (a) the consideration for the issue or sale of any Additional Shares of Common Stock shall, irrespective of the accounting treatment of such consideration, (i) insofar as it consists of cash, be computed at the net amount of cash received by the Company without deducting any expenses paid or incurred by the Company or any commissions or compensations paid or concessions or discounts allowed to underwriters, dealers or other Persons performing similar services in connection with such issue or sale, (ii) insofar as it consists of property (including securities) other than cash, be computed at the fair value thereof at the time of such issue or sale, as determined in good faith by the Board of Directors of the Company, and (iii) in case Additional Shares of Common Stock are issued or sold together with other stock or securities or other assets of the Company for a consideration which covers both, be the portion of such consideration so received, computed as provided in clauses (i) and (ii) above, allocable to such Additional Shares of Common Stock, all as determined in good faith by the Board of Directors of the Company; (b) Additional Shares of Common Stock deemed to have been issued pursuant to section 2.3, relating to Options and Convertible Securities, shall be deemed to have been issued for a consideration per share determined by dividing (i) the total amount, if any, received and receivable by the Company as consideration for the issue, sale, grant or assumption of the Options or Convertible Securities in question, plus the minimum aggregate amount of additional consideration (as set forth in the instruments relating thereto, without regard to any provision contained therein for a subsequent adjustment of such consideration to protect against dilution) payable to the Company upon the exercise in full of such Options or the conversion or exchange of such Convertible Securities or, in the case of Options for Convertible Securities, the exercise of such Options for Convertible Securities and the conversion or exchange of such Convertible Securities, in each case computing such consideration as provided in the foregoing subdivision (a), by (ii) the maximum number of shares of Common Stock (as set forth in the instruments relating thereto, without regard to any provision contained therein for a subsequent adjustment of such number to protect against dilution) issuable upon the exercise of such Options or the conversion or exchange of such Convertible Securities; and (c) Additional Shares of Common Stock deemed to have been issued pursuant to section 2.4, relating to stock dividends, stock splits, etc., shall be deemed to have been issued for no consideration. 2.6. Adjustments for Combinations, etc. In case the outstanding shares of Common Stock shall be combined or consolidated, by reclassification or otherwise, into a lesser number of shares of Common Stock, the Warrant Price in effect immediately prior to such combination or consolidation shall, concurrently with the effectiveness of such combination or consolidation, be proportionately increased. 2.7. Dilution in Case of Other Securities. In case any Other Securities shall be issued or sold or shall become subject to issue or sale upon the conversion or exchange of any stock (or Other Securities) of the Company (or any issuer of Other Securities or any other Person referred to in section 3) or to subscription, purchase or other acquisition pursuant to any Options issued or granted by the Company (or any such other issuer or Person) for a consideration such as to dilute, on a basis consistent with the standards established in the other provisions of this section 2, the purchase rights granted by this Warrant, then, and in each such case, the computations, adjustments and readjustments provided for in this section 2 with respect to the Warrant Price shall be made as nearly as possible in the manner so provided and applied to determine the amount of Other Securities from time to time receivable upon the exercise of the Warrants, so as to protect the holder of the Warrants against the effect of such dilution. 2.8. Minimum Adjustment of Warrant Price. If the amount of any adjustment of the Warrant Price required pursuant to this section 2 would be less than one half (1/2) of one percent (1%) of the Warrant Price in effect at the time such adjustment is otherwise so required to be made, such amount shall be carried forward and adjustment with respect thereto made at the time of and together with any subsequent adjustment which, together with such amount and any other amount or amounts so carried forward, shall aggregate at least one half (1/2) of one percent (1%) of such Warrant Price. 2.9. No Adjustments. No adjustments shall be made pursuant to this Section 2 in connection with (a) the exercise, conversion or exchange into or for shares of Common Stock of any of the Securities of the Company or (b) the redemption of any of its preference shares, in each case outstanding as of the date hereof. 3. Consolidation, Merger, etc. 3.1. Adjustments for Consolidation, Merger, Sale of Assets, Reorganization, etc. In case the Company after the date hereof (a) shall consolidate with or merge into any other Person and shall not be the continuing or surviving corporation of such consolidation or merger, or (b) shall permit any other Person to consolidate with or merge into the Company and the Company shall be the continuing or surviving Person but, in connection with such consolidation or merger, the Common Stock or Other Securities shall be changed into or exchanged for stock or other securities of any other Person or cash or any other property, or (c) shall transfer all or substantially all of its properties or assets to any other Person, or (d) shall effect a capital reorganization or reclassification of the Common Stock or Other Securities (other than a capital reorganization or reclassification resulting in the issue of Additional Shares of Common Stock for which adjustment in the Warrant Price is provided in section 2.2.1 or 2.2.2), then, and in the case of each such transaction, proper provision shall be made so that, upon the basis and the terms and in the manner provided in this Warrant, the holder of this Warrant, upon the exercise hereof at any time after the consummation of such transaction, shall be entitled to receive (at the aggregate Warrant Price in effect at the time of such consummation for all Common Stock or Other Securities issuable upon such exercise immediately prior to such consummation), in lieu of the Common Stock or Other Securities issuable upon such exercise prior to such consummation, the highest amount of securities, cash or other property to which such holder would actually have been entitled as a shareholder upon such consummation if such holder had exercised the rights represented by this Warrant immediately prior thereto, subject to adjustments (subsequent to such consummation) as nearly equivalent as possible to the adjustments provided for in sections 2 through 4, provided that if a purchase, tender or exchange offer shall have been made to and accepted by the holders of more than 50% of the outstanding shares of Common Stock, and if the holder of such Warrants so designates in a notice given to the Company on or before the date immediately preceding the date of the consummation of such transaction, the holder of such Warrants shall be entitled to receive the highest amount of securities, cash or other property to which such holder would actually have been entitled as a shareholder if the holder of such Warrants had exercised such Warrants prior to the expiration of such purchase, tender or exchange offer and accepted such offer, subject to adjustments (from and after the consummation of such purchase, tender or exchange offer) as nearly equivalent as possible to the adjustments provided for in sections 2 through 4. 3.2. Assumption of Obligations. Notwithstanding anything contained in the Warrants or in the Amalgamation Agreement to the contrary, the Company will not effect any of the transactions described in clauses (a) through (d) of section 3.1 unless, prior to the consummation thereof, each Person (other than the Company) which may be required to deliver any stock, securities, cash or property upon the exercise of this Warrant as provided herein shall assume, by written instrument delivered to, and reasonably satisfactory to, the holder of this Warrant, (a) the obligations of the Company under this Warrant (and if the Company shall survive the consummation of such transaction, such assumption shall be in addition to, and shall not release the Company from, any continuing obligations of the Company under this Warrant) and (b) the obligation to deliver to such holder such shares of stock, securities, cash or property as, in accordance with the foregoing provisions of this section 3, such holder may be entitled to receive, and such Person shall have similarly delivered to such holder an opinion of counsel for such Person, which counsel shall be reasonably satisfactory to such holder, stating that this Warrant shall thereafter continue in full force and effect and the terms hereof (including, without limitation, all of the provisions of this section 3) shall be applicable to the stock, securities, cash or property which such Person may be required to deliver upon any exercise of this Warrant or the exercise of any rights pursuant hereto. Nothing in this section 3 shall be deemed to authorize the Company to enter into any transaction not otherwise permitted by the Amalgamation Agreement. 4. Other Dilutive Events. In case any event shall occur as to which the provisions of section 2 or section 3 are not strictly applicable but the failure to make any adjustment would not fairly protect the purchase rights represented by this Warrant in accordance with the essential intent and principles of such sections, then, in each such case, the Company shall appoint a firm of independent certified public accountants of recognized international standing (which may be the regular auditors of the Company), which shall give their opinion upon the adjustment, if any, on a basis consistent with the essential intent and principles established in sections 2 and 3, necessary to preserve, without dilution, the purchase rights represented by this Warrant. Upon receipt of such opinion, the Company will promptly mail a copy thereof to the holder of this Warrant and shall make the adjustments described therein. 5. No Dilution or Impairment. The Company will not, by amendment of its certificate of incorporation or through any consolidation, merger, reorganization, transfer of assets, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such action as may be necessary or appropriate in order to protect the rights of the holder of this Warrant against dilution or other impairment. Without limiting the generality of the foregoing, the Company (a) will not permit the par value of any shares of stock receivable upon the exercise of this Warrant to exceed the amount payable therefor upon such exercise, (b) will take all such action as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable shares of stock on the exercise of the Warrants from time to time outstanding, (c) will not take any action which results in any adjustment of the Warrant Price if the total number of shares of Common Stock (or Other Securities) issuable after the action upon the exercise of all of the Warrants would exceed the total number of shares of Common Stock (or Other Securities) then authorized by the Company's certificate of incorporation and available for the purpose of issue upon such exercise, and (d) will not issue any capital stock of any class which is preferred as to dividends or as to the distribution of assets upon voluntary or involuntary dissolution, liquidation or winding-up, unless the rights of the holders thereof shall be limited to a fixed sum or percentage of par value or a sum determined by reference to a formula based on a published index of interest rates, an interest rate publicly announced by a financial institution or a similar indicator of interest rates in respect of participation in dividends and to a fixed sum or percentage of par value in any such distribution of assets. 6. Accountants' Report as to Adjustments. In each case of any adjustment or readjustment in the shares of Common Stock (or Other Securities) issuable upon the exercise of this Warrant, the Company at its expense will promptly compute such adjustment or readjustment in accordance with the terms of this Warrant and cause independent certified public accountants of recognized international standing (which may be the regular auditors of the Company) selected by the Company to verify such computation (other than any computation of the fair value of property as determined in good faith by the Board of Directors of the Company) and prepare a report setting forth such adjustment or readjustment and showing in reasonable detail the method of calculation thereof and the facts upon which such adjustment or readjustment is based, including a statement of (a) the consideration received or to be received by the Company for any Additional Shares of Common Stock issued or sold or deemed to have been issued, (b) the number of shares of Common Stock outstanding or deemed to be outstanding, and (c) the Warrant Price in effect immediately prior to such issue or sale and as adjusted and readjusted (if required by section 2) on account thereof. The Company will forthwith mail a copy of each such report to the holder of the Warrant and will, upon the written request at any time of the holder of the Warrant, furnish to such holder a like report setting forth the Warrant Price at the time in effect and showing in reasonable detail how it was calculated. The Company will also keep copies of all such reports at its principal office and will cause the same to be available for inspection at such office during normal business hours by the holder of the Warrant or any prospective purchaser of the Warrant designated by the holder thereof. 7. Notices of Corporate Action. In the event of (a) any taking by the Company of a record of the holders of any class of securities for the purpose of determining the holders thereof who are entitled to receive any dividend (other than a regular periodic dividend payable in cash out of earned surplus in an amount not exceeding the amount of the immediately preceding cash dividend for such period) or other distribution, or any right to subscribe for, purchase or otherwise acquire any shares of stock of any class or any other securities or property, or to receive any other right, or (b) any capital reorganization of the Company, any reclassification or recapitalization of the capital share of the Company or any consolidation or merger involving the Company and any other Person or any transfer of all or substantially all the assets of the Company to any other Person, or (c) any voluntary or involuntary dissolution, liquidation or winding-up of the Company, the Company will mail to the holder of the Warrant a notice specifying (i) the date or expected date on which any such record is to be taken for the purpose of such dividend, distribution or right, and the amount and character of such dividend, distribution or right, and (ii) the date or expected date on which any such reorganization, reclassification, recapitalization, consolidation, merger, transfer, dissolution, liquidation or winding-up is to take place and the time, if any such time is to be fixed, as of which the holders of record of Common Stock (or Other Securities) shall be entitled to exchange their shares of Common Stock (or Other Securities) for the securities or other property deliverable upon such reorganization, reclassification, recapitalization, consolidation, merger, transfer, dissolution, liquidation or winding-up. Such notice shall be mailed at least 30 days prior to the date therein specified. 8. Registration of Common Stock. If any shares of Common Stock required to be reserved for purposes of exercise of this Warrant require registration with or approval of any governmental authority under any federal or state law (other than the Securities Act) before such shares may be issued upon exercise, the Company will, at its expense and as promptly as practicable, use its reasonable best efforts to cause such shares to be duly registered or approved, as the case may be. At any such time as Common Stock is listed on any national securities exchange in the United States, the Company will, at its expense, obtain promptly and maintain the approval for listing on each such exchange, upon official notice of issuance, the shares of Common Stock issuable upon exercise of the then outstanding Warrants and maintain the listing of such shares after their issuance; and the Company will also list on such national securities exchange, will register under the Exchange Act and will maintain such listing of, any Other Securities that at any time are issuable upon exercise of the Warrants, if and at the time that any securities of the same class shall be listed on such national securities exchange by the Company. 9. Restrictions on Transfer. 9.1. Restrictive Legends. Except as otherwise permitted by this section 9, the Warrant (including any Warrant issued upon the transfer of the Warrant) shall be stamped or otherwise imprinted with a legend in substantially the following form: "This Warrant and any shares acquired upon the exercise of this Warrant have not been registered under the Securities Act of 1933, as amended, and may not be transferred, sold or otherwise disposed of except while a registration under such Act is in effect or pursuant to an exemption therefrom under such Act. This Warrant and such shares may be transferred only in compliance with the conditions specified in this Warrant." Except as otherwise permitted by this section 9, each certificate for Common Stock (or Other Securities) issued upon the exercise of the Warrant, and each certificate issued upon the transfer of any such Common Stock (or Other Securities), shall be stamped or otherwise imprinted with a legend in substantially the following form: "The shares represented by this certificate have not been registered under the Securities Act of 1933 and may not be transferred in the absence of such registration statement or an exemption therefrom under such Act. Such shares may be transferred only in compliance with the conditions specified in a certain Common Stock Purchase Warrant issued by ADT Limited (the "Company"), dated July 1, 1996. A complete and correct copy of the form of such Warrant is available for inspection at the principal office of Company or at the office or agency maintained by Company as provided in such Warrant and will be furnished to the holder of such shares upon written request and without charge." 9.2. Notice of Proposed Transfer; Opinions of Counsel. Prior to any transfer of any Restricted Securities which are not registered under an effective registration statement under the Securities Act, the holder thereof will give written notice to the Company of such holder's intention to effect such transfer and to comply in all other respects with this section 9.2. Each such notice (a) shall describe the manner and circumstances of the proposed transfer in sufficient detail to enable counsel to render the opinions referred to below, and (b) shall designate counsel for the holder giving such notice (who may be house counsel for such holder). The holder giving such notice will submit a copy thereof to the counsel designated in such notice and the Company will promptly submit a copy thereof to its counsel. The following provisions shall then apply: (i) If (A) in the opinion of such counsel for the holder the proposed transfer may be effected without registration of such Restricted Securities under the Securities Act, and (B) counsel for the Company shall not have rendered an opinion within 15 days after the receipt by the Company of such written notice that such registration is required, such holder shall thereupon be entitled to transfer such securities in accordance with the terms of the notice delivered by such holder to the Company. Each warrant or certificate, if any, representing such securities issued upon or in connection with such transfer shall bear the appropriate restrictive legend required by section 9.1, unless in the opinion of each such counsel such legend is no longer required to insure compliance with the Securities Act. If for any reason counsel for the Company (after having been furnished with the information required to be furnished by clause (a) of this section 9.2) shall fail to deliver an opinion to the Company as aforesaid, then for all purposes of this Warrant the opinion of counsel for the Company shall be deemed to be the same as the opinion of counsel for such holders. (ii) If in the opinion of either of or both such counsel the proposed transfer may not legally be effected without registration of such Restricted Securities under the Securities Act (such opinion or opinions to state the basis of the legal conclusions reached therein), the Company will promptly so notify the holder thereof and thereafter such holder shall not be entitled to transfer such Restricted Securities until either (x) receipt by the Company of a further notice from such holder pursuant to the foregoing provisions of this section 9.2 and fulfillment of the provisions of clause (i) above or (y) such shares have been effectively registered under the Securities Act. Notwithstanding the foregoing provisions of this section 9.2(ii), the holder of a Warrant shall be permitted to transfer any Restricted Securities to a limited number of institutional investors, provided that (A) each such investor represents in writing that it will only transfer or otherwise dispose of such securities in compliance with the Securities Act (subject, however, to any requirement of law that the disposition thereof shall at all times be within the control of such transferee), (B) each such investor agrees in writing to be bound by all the restrictions on transfer of such Restricted Securities contained in this section 9.2 and (C) the holder of such Warrant delivers to the Company an opinion of counsel reasonably satisfactory to the Company, stating that such transfer may be effected without registration under the Securities Act. The Company will pay the reasonable fees and disbursements of counsel (other than house counsel) for any holder of Restricted Securities and of counsel for the Company in connection with all opinions rendered by them pursuant to this section 9.2 and pursuant to section 9.3. 9.3. Termination of Restrictions. The restrictions imposed by this section 9 upon the transferability of Restricted Securities shall cease and terminate as to any particular Restricted Securities (a) when a registration statement under the Securities Act in relation to such securities shall have become effective, or (b) when, in the opinions of both counsel for the holder thereof and counsel for the Company, such restrictions are no longer required in order to insure compliance with the Securities Act. Whenever such restrictions shall cease and terminate as to any Restricted Securities, the holder thereof shall be entitled to receive from the Company, without expense (other than applicable transfer taxes, if any), new securities of like tenor not bearing the applicable legends required by section 9.1. 9.4. Additional Restrictions. Subject to the restrictions set forth in section 9.1, the Warrant may not be sold, assigned or otherwise transferred without the prior written consent of the Company, which consent shall not be unreasonably withheld or delayed in the event that the proposed transferee is an institutional investor. Any Common Stock issued upon the exercise of this Warrant shall be freely transferable, provided, however, that Parent Co. shall not sell in excess of 5,000,000 shares (subject to adjustment if the number of shares obtained upon exercise of the Warrant is adjusted) of such Common Stock to any single Person or Affiliates of such Person in one or a series of related transactions. 10. Availability of Information. So long as the Company shall not have filed a registration statement pursuant to section 12 of the Exchange Act or a registration statement pursuant to the requirements of the Securities Act, the Company shall, at any time and from time to time, upon the request of any holder of Registrable Securities and upon the request of any Person designated by such holder as a prospective purchaser of any Registrable Securities, furnish in writing to such holder or such prospective purchaser, as the case may be, a statement as of a date not earlier than 12 months prior to the date of such request of the nature of the business of the Company and the products and services it offers and copies of the Company's most recent balance sheet and profit and loss and retained earnings statements, together with similar financial statements for such part of the two preceding fiscal years as the Company shall have been in operation, all such financial statements to be audited to the extent audited statements are reasonably available, provided that, in any event the most recent financial statements so furnished shall include a balance sheet as of a date less than 16 months prior to the date of such request, statements of profit and loss and retained earnings for the 12 months preceding the date of such balance sheet, and, if such balance sheet is not as of a date less than 6 months prior to the date of such request, additional statements of profit and loss and retained earnings for the period from the date of such balance sheet to a date less than 6 months prior to the date of such request. If the Company shall have filed a registration statement pursuant to the requirements of section 12 of the Exchange Act or a registration statement pursuant to the requirements of the Securities Act, the Company shall timely file the reports required to be filed by it under the Securities Act and the Exchange Act (including but not limited to the reports under sections 13 and 15(d) of the Exchange Act referred to in subparagraph (c) of Rule 144 adopted by the Commission under the Securities Act) and the rules and regulations adopted by the Commission thereunder (or, if the Company is not required to file such reports, will, upon the request of any holder of Registrable Securities, make publicly available other information) and will take such further action as any holder of Registrable Securities may reasonably request, all to the extent required from time to time to enable such holder to sell Registrable Securities without registration under the Securities Act within the limitation of the exemptions provided by (a) Rule 144 under the Securities Act, as such Rule may be amended from time to time, or (b) any similar rule or regulation hereafter adopted by the Commission. Upon the request of any holder of Registrable Securities, the Company will deliver to such holder a written statement as to whether it has complied with the requirements of this section 10. 11. Reservation of Stock, etc. The Company will at all times reserve and keep available, solely for issuance and delivery upon exercise of the Warrants, the number of shares of Common Stock (or Other Securities) from time to time issuable upon exercise of all Warrants at the time outstanding. All shares of Common Stock (or Other Securities) issuable upon exercise of any Warrants shall be duly authorized and, when issued upon such exercise, shall be validly issued and, in the case of shares, fully paid and nonassessable with no liability on the part of the holders thereof. 12. Registration and Transfer of Warrants, etc. 12.1. Warrant Register; Ownership of Warrants. The Company will keep at its principal office a register in which the Company will provide for the registration of Warrants and the registration of transfers of Warrants. The Company may treat the Person in whose name any Warrant is registered on such register as the owner thereof for all other purposes, and the Company shall not be affected by any notice to the contrary, except that, if and when any Warrant is properly assigned in blank, the Company may (but shall not be obligated to) treat the bearer thereof as the owner of such Warrant for all purposes. Subject to section 9, a Warrant, if properly assigned, may be exercised by a new holder without a new Warrant first having been issued. 12.2. Transfer and Exchange of Warrants. Upon surrender of any Warrant for registration of transfer or for exchange to the Company at its principal office, the Company at its expense will (subject to compliance with section 9, if applicable) execute and deliver in exchange therefor a new Warrant or Warrants of like tenor, in the name of such holder or as such holder (upon payment by such holder of any applicable transfer taxes) may direct, calling in the aggregate on the face or faces thereof for the number of shares of Common Stock called for on the face or faces of the Warrant or Warrants so surrendered. 12.3. Replacement of Warrants. Upon receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of any Warrant and, in the case of any such loss, theft or destruction of any Warrant, upon delivery of an indemnity bond in such reasonable amount as the Company may determine (or, in the case of any Warrant held by any Institutional Holder or its nominee, of an indemnity agreement from such Institutional Holder reasonably satisfactory to the Company), or, in the case of any such mutilation, upon the surrender of such Warrant for cancellation to the Company at its principal office, the Company at its expense will execute and deliver, in lieu thereof, a new Warrant of like tenor. 13. Registration under Securities Act, etc. 13.1. Registration on Request. (a) Request. Upon the written request of one or more Initiating Holders, requesting that the Company effect the registration under the Securities Act of all or part of such Initiating Holders' Registrable Securities and specifying the intended method of disposition thereof, the Company will, subject to the terms of this Warrant, promptly give written notice of such requested registration to all registered holders of Registrable Securities, and thereupon the Company will effect the registration under the Securities Act of (i) the Registrable Securities which the Company has been so requested to register by such Initiating Holders for disposition in accordance with the intended method of disposition stated in such request; (ii) all other Registrable Securities the holders of which shall have made a written request to the Company for registration thereof within 30 days after the giving of such written notice by the Company (which request shall specify the intended method of disposition of such Registrable Securities); and (iii) all shares of Common Stock which the Company may elect to register in connection with the offering of Registrable Securities pursuant to this section 13.1; in each case, to the extent required to permit the disposition (in accordance with the intended methods thereof as aforesaid) of the Registrable Securities and the additional shares of Common Stock, if any so to be registered. Initiating Holders shall be entitled to only three registrations pursuant to this section 13.1, and the Company shall not be obligated to effect any registration unless the number of shares requested to be included in such registration statement shall exceed 3,000,000. (b) Registration Statement Form. Registrations under this section 13.1 shall be on such appropriate registration form of the Commission (i) as shall be selected by the Company and as shall be reasonably acceptable to the holders of more than 50% (by number of shares) of the Registrable Securities so to be registered and (ii) as shall permit the disposition of such Registrable Securities in accordance with the intended method or methods of disposition specified in their request for such registration. The Company agrees to include in any such registration statement all information which holders of Registrable Securities being registered shall reasonably request. (c) Expenses. Subject to applicable law, the Company will pay all Registration Expenses in connection with any registration requested pursuant to this section 13.1 by any Initiating Holders of Registrable Securities prior to the time at which three such registrations shall have been effected pursuant to this section 13.1. The Registration Expenses (and underwriting discounts and commissions and transfer taxes, if any) in connection with each other registration requested under this section 13.1 shall be allocated pro rata among all Persons on whose behalf securities of the Company are included in such registration, on the basis of the respective amounts of the securities then being registered on their behalf. (d) Effective Registration Statement. A registration requested pursuant to this section 13.1 shall not be deemed to have been effected (i) unless a registration statement with respect thereto has become effective, provided that a registration which does not become effective after the Company has filed a registration statement with respect thereto solely by reason of the refusal to proceed of the Initiating Holders (other than a refusal to proceed based upon the advice of counsel relating to a matter with respect to the Company) shall be deemed to have been effected by the Company at the request of such Initiating Holders unless the Initiating Holders shall have elected to pay all Registration Expenses in connection with such registration, (ii) if, after it has become effective, such registration becomes subject to any stop order, injunction or other order or requirement of the Commission or other governmental agency or court for any reason, or (iii) the conditions to closing specified in the purchase agreement or underwriting agreement entered into in connection with such registration are not satisfied, other than by reason of some act or omission by such Initiating Holders. (e) Selection of Underwriters. If a requested registration pursuant to this section 13.1 involves an underwritten offering, the managing or lead underwriter or underwriters thereof shall be selected, after consultation with the Company, by the holders of at least a majority (by number of shares) of the Registrable Securities as to which registration has been requested and shall be acceptable to the Company, which shall not unreasonably withhold its acceptance of any such underwriters. (f) Priority in Requested Registrations. If a requested registration pursuant to this section 13.1 involves an underwritten offering, and the managing underwriter shall advise the Company in writing (with a copy to each holder of Registrable Securities requesting registration) that, in its opinion, the number of securities requested to be included in such registration (including securities of the Company which are not Registrable Securities) exceeds the number which can be sold in such offering within a price range acceptable to the holders of a majority of the Registrable Securities requested to be included in such registration, the Company will include in such registration, to the extent of the number which the Company is so advised can be sold in such offering, (i) first, Registrable Securities requested to be included in such registration by the holder or holders of Registrable Securities, pro rata among the holders thereof requesting such registration on the basis of the number of such securities requested to be included by such holders and (ii) second, securities the Company proposes to sell and other securities of the Company included in such registration by the holders thereof. In connection with any such registration, no securities other than Registrable Securities or securities sold by the Company for its own account shall be covered by such registration. 13.2. Incidental Registration. (a) Right to Include Registrable Securities. If the Company at any time proposes to register any of its securities under the Securities Act (other than by a registration on Form S-4 or S-8 or any successor or similar forms and other than pursuant to section 13.1), whether or not for sale for its own account, it will each such time give prompt written notice to all holders of Registrable Securities of its intention to do so and of such holders' rights under this section 13.2. Upon the written request of any such holder made within 20 days after the receipt of any such notice (which request shall specify the Registrable Securities intended to be disposed of by such holder and the intended method of disposition thereof), the Company will, subject to the terms of this Agreement, effect the registration under the Securities Act of all Registrable Securities which the Company has been so requested to register by the holders thereof, to the extent requisite to permit the disposition (in accordance with the intended methods thereof as aforesaid) of the Registrable Securities so to be registered, by inclusion of such Registrable Securities in the registration statement which covers the securities which the Company proposes to register, provided that if, at any time after giving written notice of its intention to register any securities and prior to the effective date of the registration statement filed in connection with such registration, the Company shall determine for any reason either not to register or to delay registration of such securities, the Company may, at its election, give written notice of such determination to each holder of Registrable Securities and, thereupon, (i) in the case of a determination not to register, shall be relieved of its obligation to register any Registrable Securities in connection with such registration (but not from its obligation to pay the Registration Expenses in connection therewith), without prejudice, however, to the rights of any holder or holders of Registrable Securities entitled to do so to request that such registration be effected as a registration under section 13.1, and (ii) in the case of a determination to delay registering, shall be permitted to delay registering any Registrable Securities, for the same period as the delay in registering such other securities. No registration effected under this section 13.2 shall relieve the Company of its obligation to effect any registration upon request under section 13.1 nor shall any such registration hereunder be deemed to have been effected pursuant to section 13.1. The Company will pay all Registration Expenses in connection with each registration of Registrable Securities requested pursuant to this section 13.2. (b) Priority in Incidental Registrations. If (i) a registration pursuant to this section 13.2 involves an underwritten offering of the securities so being registered, whether or not for sale for the account of the Company, to be distributed (on a firm commitment basis) by or through one or more underwriters of recognized standing under underwriting terms appropriate for such a transaction, (ii) the Registrable Securities so requested to be registered for sale for the account of holders of Registrable Securities are not also to be included in such underwritten offering (either because the Company has not been requested so to include such Registrable Securities pursuant to section 13.4(b) or, if requested to do so, is not obligated to do so under section 13.4(b)), and (iii) the managing underwriter of such underwritten offering shall inform the Company and holders of the Registrable Securities requesting such registration by letter of its belief that the distribution of all or a specified number of such Registrable Securities concurrently with the securities being distributed by such underwriters would interfere with the successful marketing of the securities being distributed by such underwriters (such writing to state the basis of such belief and the approximate number of such Registrable Securities which may be distributed without such effect), then the Company may, upon written notice to all holders of such Registrable Securities, reduce pro rata (if and to the extent stated by such managing underwriter to be necessary to eliminate such effect) the number of such Registrable Securities the registration of which shall have been requested by each holder of Registrable Securities so that the resultant aggregate number of such Registrable Securities so included in such registration shall be equal to the number of shares stated in such managing underwriter's letter. 13.3. Registration Procedures. If and whenever the Company is required to use its best efforts to effect the registration of any Registrable Securities under the Securities Act as provided in sections 13.1 and 13.2, the Company shall, as expeditiously as possible: (i) prepare and (within 30 days after the end of the period within which requests for registration may be given to the Company or in any event as soon thereafter as possible) file with the Commission the requisite registration statement to effect such registration (including such audited financial statements as may be required by the Securities Act or the rules and regulations promulgated thereunder) and thereafter use its reasonable best efforts to cause such registration statement to become and remain effective, provided, however, that the Company may (x) postpone filing of any registration statement otherwise required to be filed by the Company pursuant to the provisions of Section 13.1 or suspend the use of any effective registration statement for a reasonable period of time not to exceed 75 days in any 12-month period, if the Chairman of the Company determines in his good-faith reasonable judgement that such registration or distribution would be materially detrimental to the Company or because the Company is in possession of material non-public information the disclosure of which would be materially detrimental to the Company and (y) discontinue any registration of its securities which are not Registrable Securities (and, under the circumstances specified in section 13.2(a), its securities which are Registrable Securities) at any time prior to the effective date of the registration statement relating thereto; (ii) prepare and file with the Commission such amendments and supplements to such registration statement and the prospectus used in connection therewith as may be necessary to keep such registration statement effective and to comply with the provisions of the Securities Act with respect to the disposition of all securities covered by such registration statement until the earlier of such time as all of such securities have been disposed of in accordance with the intended methods of disposition by the seller or sellers thereof set forth in such registration statement or (i) in the case of a registration pursuant to section 13.1, the expiration of 120 days after such registration statement becomes effective, or (ii) in the case of a registration pursuant to section 13.2, the expiration of 75 days after such registration statement becomes effective; (iii) furnish to each seller of Registrable Securities covered by such registration statement, each underwriter, if any, of the securities being sold by such seller, such number of conformed copies of such registration statement and of each such amendment and supplement thereto (in each case including all exhibits), such number of copies of the prospectus contained in such registration statement (including each preliminary prospectus and any summary prospectus) and any other prospectus filed under Rule 424 under the Securities Act, in conformity with the requirements of the Securities Act, and such other documents, as such seller or underwriter, if any, may reasonably request in order to facilitate the public sale or other disposition of the Registrable Securities owned by such seller; (iv) use its reasonable best efforts to register or qualify all Registrable Securities and other securities covered by such registration statement under such other securities laws or blue sky laws of such jurisdictions as any seller thereof or any underwriter of the securities being sold by such seller shall reasonably request, to keep such registrations or qualifications in effect for so long as such registration statement remains in effect, and take any other action which may be reasonably necessary or advisable to enable such seller or underwriter to consummate the disposition in such jurisdictions of the securities owned by such seller, except that the Company shall not for any such purpose be required to qualify generally to do business as a foreign corporation in any jurisdiction wherein it would not but for the requirements of this subdivision (iv) be obligated to be so qualified, to subject itself to taxation in any such jurisdiction, or to consent to general service of process in any such jurisdiction; (v) use its reasonable best efforts to cause all Registrable Securities covered by such registration statement to be registered with or approved by such other governmental agencies or authorities as may be necessary to enable the seller or sellers thereof to consummate the disposition of such Registrable Securities; (vi) furnish to each seller of Registrable Securities a signed counterpart, addressed to such seller and the underwriters, if any of (x) an opinion of counsel for the Company, dated the effective date of such registration statement (or, if such registration includes an underwritten public offering, an opinion dated the date of the closing under the underwriting agreement), reasonably satisfactory in form and substance to such seller, and (y) a "comfort" letter (or, in the case of such Person which does not satisfy the conditions for receipt of a "comfort" letter specified in Statement on Auditing Standards No. 72, an "agreed upon procedures" letter), dated the effective date of such registration statement (and, if such registration includes an underwritten public offering, a letter dated the date of the closing under the underwriting agreement), signed by the independent public accountants who have certified the Company's financial statements included in such registration statement, covering substantially the same matters with respect to such registration statement (and the prospectus included therein) and, in the case of the accountants' letter, with respect to events subsequent to the date of such financial statements, as are customarily covered in opinions of issuer's counsel and in accountants' letters delivered to the underwriters in underwritten public offerings of securities (with, in the case of an "agreed upon procedures" letter, such modifications or deletions as may be required under Statement on Auditing Standards No. 35) and, in the case of the accountants' letter, such other financial matters, and, in the case of the legal opinion, such other legal matters, as such seller or the underwriters, if any, may reasonably request; (vii) notify the holders of Registrable Securities and the managing underwriter or underwriters, if any, promptly and confirm such advice in writing promptly thereafter: (v) when the registration statement, the prospectus or any prospectus supplement related thereto or post-effective amendment to the registration statement has been filed, and, with respect to the registration statement or any post-effective amendment thereto, when the same has become effective; (w) of any request by the Commission for amendments or supplements to the registration statement or the prospectus or for additional information; (x) of the issuance by the Commission of any stop order suspending the effectiveness of the registration statement or the initiation of any proceedings by any Person for that purpose; (y) if at any time the representations and warranties of the Company made as contemplated by section 13.4 below cease to be true and correct; (z) of the receipt by the Company of any notification with respect to the suspension of the qualification of any Registrable Securities for sale under the securities or blue sky laws of any jurisdiction or the initiation or threat of any proceeding for such purpose; (viii) notify each seller of Registrable Securities covered by such registration statement, at any time when a prospectus relating thereto is required to be delivered under the Securities Act, upon the discovery that, or upon the happening of any event as a result of which, the prospectus included in such registration statement, as then in effect, includes an untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances then existing or under which they were made, and at the request of any such seller promptly prepare and furnish to such seller and each underwriter, if any, a reasonable number of copies of a supplement to or an amendment of such prospectus as may be necessary so that, as thereafter delivered to the purchasers of such securities, such prospectus shall not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances then existing or under which they were made; (ix) otherwise use its best efforts to comply with all applicable rules and regulations of the Commission, and make available to its security holders, as soon as reasonably practicable, an earnings statement covering the period of at least twelve months, but not more than eighteen months, beginning with the first full quarter after the effective date of such registration statement, which earnings statement shall satisfy the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder, and will furnish to each such seller and at least five business days prior to the filing thereof a copy of any amendment or supplement to such registration statement or prospectus and shall not file any thereof to which any such seller shall have reasonably objected on the grounds that such amendment or supplement does not comply in all material respects with the requirements of the Securities Act or of the rules or regulations thereunder; (x) make available for inspection by a representative or representatives of the holders of Registrable Securities, any underwriter participating in any disposition pursuant to the registration statement and any attorney or accountant retained by such selling holders or underwriter (each, an "Inspector"), all financial and other records, pertinent corporate documents and properties of the Company (the "Records"), and cause the Company's officers, directors and employees to supply all information reasonably requested by any such Inspector in connection with such registration in order to permit a reasonable investigation within the meaning of Section 11 of the Securities Act; (xi) provide and cause to be maintained a transfer agent and registrar for all Registrable Securities covered by such registration statement from and after a date not later than the effective date of such registration statement; (xii) enter into such agreements, including any underwriting agreements contemplated by section 13.4, and take such other actions as sellers of such Registrable Securities holding 51% of the shares so to be sold shall reasonably request in order to permit the disposition of such Registrable Securities; (xiii) use its reasonable best efforts to list all Registrable Securities covered by such registration statement on any securities exchange on which any of the securities of the same class as the Registrable Securities are then listed; and (xiv) use its reasonable best efforts to provide a CUSIP number for the Registrable Securities, not later than the effective date of the registration statement. The Company may require each seller of Registrable Securities as to which any registration is being effected to furnish the Company such information regarding such seller and the distribution of such securities as the Company may from time to time reasonably request in writing. Each holder of Registrable Securities agrees by acquisition of such Registrable Securities that, upon receipt of any notice from the Company of the occurrence of any event of the kind described in subdivision (viii) of this section 13.3, such holder will forthwith discontinue such holder's disposition of Registrable Securities pursuant to the registration statement relating to such Registrable Securities until such holder's receipt of the copies of the supplemented or amended prospectus contemplated by subdivision (viii) of this section 13.3 and, if so directed by the Company, will deliver to the Company (at the Company's expense) all copies, other than permanent file copies, then in such holder's possession of the prospectus relating to such Registrable Securities current at the time of receipt of such notice. In the event the Company shall give any such notice, the period mentioned in paragraph (ii) of this section 13.3 shall be extended by the length of the period from and including the date when each seller of any Registrable Securities covered by such registration statement shall have received such notice to the date on which each such seller has received the copies of the supplemented or amended prospectus contemplated by paragraph (viii) of this section 13.3. 13.4. Underwritten Offerings. (a) Requested Underwritten Offerings. If requested by the underwriters for any underwritten offering by holders of Registrable Securities pursuant to a registration requested under section 13.1, the Company will enter into an underwriting agreement with such underwriters for such offering, such agreement to be reasonably satisfactory in substance and form to the Company, each such holder and the underwriters, and to contain such representations and warranties by the Company and such other terms as are generally prevailing in agreements of this type, including, without limitation, indemnities to the effect and to the extent provided in section 13.6. The holders of the Registrable Securities will cooperate with the Company in the negotiation of the underwriting agreement and will give consideration to the reasonable suggestions of the Company regarding the form thereof, provided that nothing herein contained shall diminish the foregoing obligations of the Company. The holders of Registrable Securities to be distributed by such underwriters shall be parties to such underwriting agreement and may, at their option, require that any or all of the representations and warranties by, and the other agreements on the part of, the Company to and for the benefit of such underwriters shall also be made to and for the benefit of such holders of Registrable Securities and that any or all of the conditions precedent to the obligations of such underwriters under such underwriting agreement be conditions precedent to the obligations of such holders of Registrable Securities. Any such holder of Registrable Securities shall not be required to make any representations or warranties other than representations and warranties or agreements regarding such holder, such holder's Registrable Securities and such holder's intended method of distribution and any other representation required by law. (b) Incidental Underwritten Offerings. If the Company at any time proposes to register any of its securities under the Securities Act as contemplated by section 13.2 and such securities are to be distributed by or through one or more underwriters, the Company will, if requested by any holder of Registrable Securities as provided in section 13.2 and subject to the provisions of section 13.2(b), use its best efforts to arrange for such underwriters to include all the Registrable Securities to be offered and sold by such holder among the securities to be distributed by such underwriters. (c) Holdback Agreements. (i) Each holder of Registrable Securities agrees by acquisition of such Registrable Securities, if so required by the managing underwriter, not to sell, make any short sale of, loan, grant any option for the purchase of, effect any public sale or distribution of or otherwise dispose of any equity securities of the Company, during the seven days prior to and the 90 days after any underwritten registration pursuant to section 13.1 or 13.2 has become effective, except as part of such underwritten registration. Notwithstanding the foregoing sentence, each holder of Registrable Securities subject to the foregoing sentence shall be entitled to sell during the foregoing period securities in a private sale. (ii) The Company agrees (x) if so required by the managing underwriter, not to sell, make any short sale of, loan, grant any option for the purchase of, effect any public sale or distribution of or otherwise dispose of its equity securities or securities convertible into or exchangeable or exercisable for any of such securities during the seven days prior to and the 90 days after any underwritten registration pursuant to section 13.1 or 13.2 has become effective, except as part of such underwritten registration and except pursuant to registrations on Form S-4, S-8 or any successor or similar forms thereto, and (y) to the extent reasonably practicable to cause each holder of its equity securities or any securities convertible into or exchangeable or exercisable for any of such securities, in each case purchased from the Company at any time after the date of this Agreement (other than in a public offering) to agree not to sell, make any short sale of, loan, grant any option for the purchase of, effect any such public sale or distribution of or otherwise dispose of such securities during such period except as part of such underwritten registration. (d) Participation in Underwritten Offerings. No Person may participate in any underwritten offering hereunder unless such Person (i) agrees to sell such Person's securities on the basis provided in any underwriting arrangements approved, subject to the terms and conditions hereof, by the Company and the holders of a majority of Registrable Securities to be included in such underwritten offering and (ii) completes and executes all questionnaires, indemnities, underwriting agreements and other documents (other than powers of attorney) required under the terms of such underwriting arrangements. Notwithstanding the foregoing, no underwriting agreement (or other agreement in connection with such offering) shall require any holder of Registrable Securities to make any representations or warranties to or agreements with the Company or the underwriters other than representations and warranties contained in writing furnished by such holder expressly for use in the related registration statement or agreements regarding such holder, such holder's Registrable Securities and such holder's intended method of distribution and any other representation required by law. 13.5. Preparation; Reasonable Investigation. In connection with the preparation and filing of each registration statement under the Securities Act pursuant to this Agreement, the Company will give the holders of Registrable Securities registered under such registration statement, their underwriters, if any, and their respective counsel and accountants, the opportunity to participate in the preparation of such registration statement, each prospectus included therein or filed with the Commission, and each amendment thereof or supplement thereto, and will give each of them such access to its books and records and such opportunities to discuss the business of the Company with its officers and the independent public accountants who have certified its financial statements as shall be necessary, in the opinion of such holders' and such underwriters' respective counsel, to conduct a reasonable investigation within the meaning of the Securities Act. 13.6. Indemnification. (a) Indemnification by the Company. In the event of any registration of any securities of the Company under the Securities Act, the Company will, and hereby does, indemnify and hold harmless in the case of any registration statement filed pursuant to section 13.1 or 13.2, the holder of any Registrable Securities covered by such registration statement, its directors and officers, each other Person who participates as an underwriter in the offering or sale of such securities and each other Person, if any, who controls such holder or any such underwriter within the meaning of the Securities Act, against any losses, claims, damages or liabilities, joint or several, to which such holder or any such director or officer or underwriter or controlling person may become subject under the Securities Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions or proceedings, whether commenced or threatened, in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in any registration statement under which such securities were registered under the Securities Act, any preliminary prospectus, final prospectus or summary prospectus contained therein, or any amendment or supplement thereto, or any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and the Company will reimburse such holder, and each such director, officer, underwriter and controlling person for any legal or any other expenses reasonably incurred by them in connection with investigating or defending any such loss, claim, liability, action or proceeding, provided that the Company shall not be liable in any such case to the extent that any such loss, claim, damage, liability (or action or proceeding in respect thereof) or expense arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission made in such registration statement, any such preliminary prospectus, final prospectus, summary prospectus, amendment or supplement in reliance upon and in conformity with written information furnished to the Company through an instrument duly executed by such holder specifically stating that it is for use in the preparation thereof. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of such holder or any such director, officer, underwriter or controlling person and shall survive the transfer of such securities by such holder. (b) Indemnification by the Sellers. The Company may require, as a condition to including any Registrable Securities in any registration statement filed pursuant to section 13.3, that the Company shall have received an undertaking satisfactory to it from the prospective seller of such Registrable Securities, to indemnify and hold harmless (in the same manner and to the same extent as set forth in subdivision (a) of this section 13.6) the Company, each director of the Company, each officer of the Company and each other person, if any, who controls the Company within the meaning of the Securities Act, with respect to any statement or alleged statement in or omission or alleged omission from such registration statement, any preliminary prospectus, final prospectus or summary prospectus contained therein, or any amendment or supplement thereto, if such statement or alleged statement or omission or alleged omission was made in reliance upon and in conformity with written information furnished to the Company through an instrument duly executed by such seller specifically stating that it is for use in the preparation of such registration statement, preliminary prospectus, final prospectus, summary prospectus, amendment or supplement. Any such indemnity shall remain in full force and effect, regardless of any investigation made by or on behalf of the Company or any such director, officer or controlling person and shall survive the transfer of such securities by such seller. (c) Notices of Claims, etc. Promptly after receipt by an indemnified party of notice of the commencement of any action or proceeding involving a claim referred to in the preceding subdivisions of this section 13.6, such indemnified party will, if a claim in respect thereof is to be made against an indemnifying party, give written notice to the latter of the commencement of such action, provided that the failure of any indemnified party to give notice as provided herein shall not relieve the indemnifying party of its obligations under this section 13.6, except to the extent that the indemnifying party is actually prejudiced by such failure to give notice. In case any such action is brought against an indemnified party, unless in such indemnified party's reasonable judgment a conflict of interest between such indemnified and indemnifying parties may exist in respect of such claim, the indemnifying party shall be entitled to participate in and to assume the defense thereof, jointly with any other indemnifying party similarly notified, to the extent that the indemnifying party may wish, with counsel reasonably satisfactory to such indemnified party, and after notice from the indemnifying party to such indemnified party of its election so to assume the defense thereof, the indemnifying party shall not be liable to such indemnified party for any legal or other expenses subsequently incurred by the latter in connection with the defense thereof other than reasonable costs of investigation. No indemnifying party shall, without the consent of the indemnified party, consent to entry of any judgment or enter into any settlement of any such action which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such indemnified party of a release from all liability in respect to such claim or litigation. No indemnified party shall consent to entry of any judgment or enter into any settlement of any such action the defense of which has been assumed by an indemnifying party without the consent of such indemnifying party. (d) Other Indemnification. Indemnification similar to that specified in the preceding subdivisions of this section 13.6 (with appropriate modifications) shall be given by the Company and each seller of Registrable Securities with respect to any required registration or other qualification of securities under any Federal or state law or regulation of any governmental authority, other than the Securities Act. (e) Indemnification Payments. The indemnification required by this section 13.6 shall be made by periodic payments of the amount thereof during the course of the investigation or defense, as and when bills are received or expense, loss, damage or liability is incurred. (f) Contribution. If the indemnification provided for in the preceding subdivisions of this section 13.6 is unavailable to an indemnified party in respect of any expense, loss, claim, damage or liability referred to therein, then each indemnifying party, in lieu of indemnifying such indemnified party, shall contribute to the amount paid or payable by such indemnified party as a result of such expense, loss, claim, damage or liability (i) in such proportion as is appropriate to reflect the relative benefits received by the Company on the one hand and the holder or underwriter, as the case may be, on the other from the distribution of the Registrable Securities or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the Company on the one hand and of the holder or underwriter, as the case may be, on the other in connection with the statements or omissions which resulted in such expense, loss, damage or liability, as well as any other relevant equitable considerations. The relative benefits received by the Company on the one hand and the holder or underwriter, as the case may be, on the other in connection with the distribution of the Registrable Securities shall be deemed to be in the same proportion as the total net proceeds received by the Company from the initial sale of the Registrable Securities by the Company to bear to the gain, if any, realized by the selling holder or the underwriting discounts and commissions received by the underwriter, as the case may be. The relative fault of the Company on the one hand and of the holder or underwriter, as the case may be, on the other shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or omission to state a material fact relates to information supplied by the Company, by the holder or by the underwriter and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission, provided that the foregoing contribution agreement shall not inure to the benefit of any indemnified party if indemnification would be unavailable to such indemnified party by reason of the provisions contained in the first sentence of subdivision (a) of this section 13.6, and in no event shall the obligation of any indemnifying party to contribute under this subdivision (f) exceed the amount that such indemnifying party would have been obligated to pay by way of indemnification if the indemnification provided for under subdivisions (a) or (b) of this section 13.6 had been available under the circumstances. The Company and the holders of Registrable Securities agree that it would not be just and equitable if contribution pursuant to this subdivision (f) were determined by pro rata allocation (even if the holders and any underwriters were treated as one entity for such purpose) or by any other method of allocation that does not take account of the equitable considerations referred to in the immediately preceding paragraph. The amount paid or payable by an indemnified party as a result of the losses, claims, damages and liabilities referred to in the immediately preceding paragraph shall be deemed to include, subject to the limitations set forth in the preceding sentence and subdivision (c) of this section 13.7, any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this subdivision (f), no holder of Registrable Securities or underwriter shall be required to contribute any amount in excess of the amount by which (i) in the case of any such holder, the net proceeds received by such holder from the sale of Registrable Securities or (ii) in the case of an underwriter, the total price at which the Registrable Securities purchased by it and distributed to the public were offered to the public exceeds, in any such case, the amount of any damages that such holder or underwriter has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission. No Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. (g) The provisions of this Section 13.6 shall be subject to applicable law. 14. Definitions. As used herein, unless the context otherwise requires, the following terms have the following respective meanings: Additional Shares of Common Stock: All shares (including treasury shares) of Common Stock issued or sold (or, pursuant to section 2.3 or 2.4, deemed to be issued) by the Company after the date hereof, whether or not subsequently reacquired or retired by the Company, other than (a) shares issued upon the exercise of the Warrants, (b) shares (as constituted on such date) issued upon the exercise of options granted under the Company's stock option plans as in effect on the date hereof or under any other employee stock option or purchase plan, (c) such additional number of shares as may become issuable upon the exercise of any of the securities referred to in the foregoing clauses (a) and (b) by reason of adjustments required pursuant to anti-dilution provisions applicable to such securities as in effect on the date hereof, but only if and to the extent that such adjustments are required as the result of the original issuance of the Warrants, and (d) such additional number of shares as may become issuable upon the exercise of any of the securities referred to in the foregoing clauses (a) and (b) by reason of adjustments required pursuant to anti-dilution provisions applicable to such securities as in effect on the date hereof, in order to reflect any subdivision or combination of Common Stock, by reclassification or otherwise, or any dividend on Common Stock payable in Common Stock. Affiliate: of any specified Person means any other Person directly or indirectly controlling or controlled by or under common control with such specified Person. For the purpose of this definition, "control" (including with correlative meanings, the terms "controlling", "controlled by" and "under common control with") as used with respect to any Person, shall mean the possession, directly or indirectly, of the power to direct or cause the direction of management or policies of such Person, whether through ownership of voting securities, agreement or otherwise. Amalgamation: As defined in the Amalgamation Agreement. Amalgamation Agreement: As defined in the introduction to this Warrant. Business Day: Any day other than a Saturday or a Sunday or a day on which commercial banking institutions in the City of New York are authorized by law to be closed. Any reference to "days" (unless Business Days are specified) shall mean calendar days. Closing: As defined in the Amalgamation Agreement. Commission: The Securities and Exchange Commission or any other federal agency at the time administering the Securities Act. Common Stock: As defined in the introduction to this Warrant, such term to include any shares into which such Common Stock shall have been changed or any shares resulting from any reclassification of such Common Stock, and all other shares of any class or classes (however designated) of the Company the holders of which have the right, without limitation as to amount, either to all or to a share of the balance of current dividends and liquidating dividends after the payment of dividends and distributions on any shares entitled to preference. Company: As defined in the introduction to this Warrant, such term to include any corporation which shall succeed to or assume the obligations of the Company hereunder in compliance with section 3. Convertible Securities: Any evidences of indebtedness, shares of stock (other than Common Stock) or other securities directly or indirectly convertible into or exchangeable for Additional Shares of Common Stock. Current Market Price: On any date specified herein, the average daily Market Price during the period of the most recent 20 days, ending on such date, on which the national securities exchanges were open for trading, except that if no Common Stock is then listed or admitted to trading on any national securities exchange or quoted in the over-the-counter market, the Current Market Price shall be the Market Price on such date. Exercise Period: The period set forth in Section 19 hereof during which this Warrant shall be exercisable. Exchange Act: The Securities Exchange Act of 1934, or any similar federal statute, and the rules and regulations of the Commission thereunder, all as the same shall be in effect at the time. Initiating Holders: Any holder or holders of Registrable Securities holding at least at any time thereafter, 20% of the Registrable Securities (by number of shares at the time issued and outstanding), and initiating a request pursuant to section 13.1 for the registration of all or part of such holder's or holders' Registrable Securities. Institutional Holder: Any original purchaser of any Warrant, any insurance company, pension fund, mutual fund, investment company, bank, savings bank, savings and loan association, broker-dealer, investment adviser, investment banking company, trust company or any finance or credit company, any portfolio or any investment fund managed by any of the foregoing, any other institutional investor and any nominee of any of the foregoing. Market Price: On any date specified herein, the amount per share of the Common Stock, equal to (a) the last sale price of such Common Stock, regular way, on such date or, if no such sale takes place on such date, the average of the closing bid and asked prices thereof on such date, in each case as officially reported on the principal national securities exchange on which such Common Stock is then listed or admitted to trading, or (b) if such Common Stock is not then listed or admitted to trading on any national securities exchange but is designated as a national market system security by the NASD, the last trading price of the Common Stock on such date, or (c) if there shall have been no trading on such date or if the Common Stock is not so designated, the average of the closing bid and asked prices of the Common Stock on such date as shown by the NASD automated quotation system, or (d) if such Common Stock is not then listed or admitted to trading on any national exchange or quoted in the over-the-counter market, the higher of (x) the book value thereof as determined by any firm of independent public accountants of recognized standing selected by the Board of Directors of the Company as of the last day of any month ending within 60 days preceding the date as of which the determination is to be made or (y) the fair value thereof determined in good faith by the Board of Directors of the Company as of a date which is within 18 days of the date as of which the determination is to be made. NASD: The National Association of Securities Dealers, Inc. Options: Rights, options or warrants to subscribe for, purchase or otherwise acquire either Additional Shares of Common Stock or Convertible Securities. Other Securities: Any stock (other than Common Stock) and other securities of the Company or any other Person (corporate or otherwise) which the holders of the Warrants at any time shall be entitled to receive, or shall have received, upon the exercise of the Warrants, in lieu of or in addition to Common Stock, or which at any time shall be issuable or shall have been issued in exchange for or in replacement of Common Stock or Other Securities pursuant to section 3 or otherwise. Parent: As to any Acquiring Person any corporation which (a) controls the Acquiring Person directly or indirectly through one or more intermediaries, (b) is required to include the Acquiring Person in the consolidated financial statements contained in such Parent's Annual Report on Form 10-K and (c) is not itself included in the consolidated financial statements of any other person (other than its consolidated subsidiaries). Person: A corporation, an association, a partnership, an organization, a business, an individual, a government or political subdivision thereof or a governmental agency. Registrable Securities: (a) Any shares of Common Stock or Other Securities issued or issuable upon exercise of this Warrant and (b) any securities issued or issuable with respect to any securities referred to in the foregoing subdivision by way of stock dividend or stock split or in connection with a combination of shares, recapitalization, merger, consolidation or other reorganization or otherwise. As to any particular Registrable Securities, once issued such securities shall cease to be Registrable Securities when (a) a registration statement with respect to the sale of such securities shall have become effective under the Securities Act and such securities shall have been disposed of in accordance with such registration statement, (b) they shall have been distributed to the public pursuant to Rule 144 (or any successor provision) under the Securities Act, (c) they shall have been otherwise transferred, new certificates for them not bearing a legend restricting further transfer shall have been delivered by the Company and subsequent disposition of them shall not require registration or qualification of them under the Securities Act or any similar state law then in force, or (d) they shall have ceased to be outstanding. Registration Expenses: All expenses incident to the Company's performance of or compliance with section 13, including, without limitation, all registration, filing and NASD fees, all fees and expenses of complying with securities or blue sky laws, all word processing, duplicating and printing expenses, messenger and delivery expenses, the fees and disbursements of counsel for the Company and of its independent public accountants, including the expenses of any special audits or "cold comfort" letters required by or incident to such performance and compliance, the fees and disbursements of any a single counsel and accountants retained by the holder or holders of more than 20% of the Registrable Securities being registered, premiums and other costs of policies of insurance against liabilities arising out of the public offering of the Registrable Securities being registered and any fees and disbursements of underwriters customarily paid by issuers or sellers of securities, but excluding underwriting discounts and commissions and transfer taxes, if any, provided that, in any case where Registration Expenses are not to be borne by the Company, such expenses shall not include salaries of Company personnel or general overhead expenses of the Company, auditing fees, premiums or other expenses relating to liability insurance required by underwriters of the Company or other expenses for the preparation of financial statements or other data normally prepared by the Company in the ordinary course of its business or which the Company would have incurred in any event. Restricted Securities: (a) any Warrants bearing the applicable legend set forth in section 9.2, (b) any shares of Common Stock (or Other Securities) issued upon the exercise of Warrants which are evidenced by a certificate or certificates bearing the applicable legend set forth in such section, (c) any shares of Common Stock (or Other Securities) issued subsequent to the exercise of any of the Warrants as a dividend or other distribution with respect to, or resulting from a subdivision of the outstanding shares of Common Stock (or Other Securities) into a greater number of shares by reclassification, stock splits or otherwise, or in exchange for or in replacement of the Common Stock (or Other Securities) issued upon such exercise, which are evidenced by a certificate or certificates bearing the applicable legend set forth in such section, and (d) unless the context otherwise requires, any shares of Common Stock (or Other Securities) issuable upon the exercise of Warrants, which, when so issued, will be evidenced by a certificate or certificates bearing the applicable legend set forth in such section. Securities Act: The Securities Act of 1933, or any similar federal statute, and the rules and regulations of the Commission thereunder, all as the same shall be in effect at the time. Transfer: Any sale, assignment, pledge or other disposition of any security, or of any interest therein, which could constitute a "sale" as that term is defined in section 2(3) of the Securities Act. Voting Securities: Stock of any class or classes (or equivalent interests), if the holders of the stock of such class or classes (or equivalent interests) are ordinarily, in the absence of contingencies, entitled to vote for the election of the directors (or persons performing similar functions) of such business entity, even though the right so to vote has been suspended by the happening of such a contingency. Warrant Price: As defined in section 2.1. Warrants: As defined in the introduction to this Warrant. Weighted Average Warrant Price: As to any holder of Restricted Securities, the price determined by dividing (a) the sum of the aggregate consideration previously paid by such holder upon the exercise of Warrants plus the consideration payable upon the exercise of all Warrants held by such holder by (b) the sum of (i) the aggregate number of shares previously received by such holder upon the exercise of Warrants plus (ii) the number of shares which would be received by such holder upon the exercise of all Warrants held by such holder, based upon the Warrant Price in effect on the effective date of the registration statement in respect of which the Weighted Average Warrant Price is being determined. 15. Remedies. The Company stipulates that the remedies at law of the holder of this Warrant in the event of any default or threatened default by the Company in the performance of or compliance with any of the terms of this Warrant are not and will not be adequate and that, to the fullest extent permitted by law, such terms may be specifically enforced by a decree for the specific performance of any agreement contained herein or by an injunction against a violation of any of the terms hereof or otherwise. 16. No Rights or Liabilities as Stockholder. Nothing contained in this Warrant shall be construed as conferring upon the holder hereof any rights as a stockholder of the Company or as imposing any obligation on such holder to purchase any securities or as imposing any liabilities on such holder as a stockholder of the Company, whether such obligation or liabilities are asserted by the Company or by creditors of the Company. 17. Notices. All notices and other communications under this Warrant shall be in writing and shall be delivered, or mailed by registered or certified mail, return receipt requested, by a nationally recognized overnight courier, postage prepaid, addressed (a) if to any holder of any Warrant, at the registered address of such holder as set forth in the register kept at the principal office of the Company, or (b) if to the Company, to the attention of its President at its principal office, provided that the exercise of any Warrant shall be effective in the manner provided in section 1. 18. Amendments. This Warrant and any term hereof may be changed, waived, discharged or terminated only by an instrument in writing signed by the party against which enforcement of such change, waiver, discharge or termination is sought. 19. Exercise Period; Expiration. (a) This Warrant shall be exercisable by the holder from and after the date determined in accordance with section 1.5 and shall cease to be exercisable at 5:00 p.m., New York City time, on the 180th day after the date the Warrant initially became exercisable, or if such 180th day shall not be a Business Day, at such time on the next Business Day thereafter. (b) This Warrant shall expire upon the Effective Time (as defined in the Amalgamation Agreement). 20. Descriptive Headings. The headings in this Warrant are for purposes of reference only and shall not limit or otherwise affect the meaning hereof. 21. GOVERNING LAW. THIS WARRANT SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY, THE LAW OF BERMUDA, WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAWS. 22. Representations and Warranties. The Company hereby represents and warranties that: (i) it is a Bermuda company limited by shares and has all necessary right, power and authority to execute and deliver this Warrant and to perform its obligation hereunder, (ii) this Warrant has been properly authorized and (iii) this Warrant is a valid and binding obligation of the Company enforceable against the Company in accordance with its terms. 23. Judicial Proceedings. Any judicial proceeding brought against the Company with respect to this Warrant may be brought in any court of competent jurisdiction in Bermuda. ADT LIMITED By: /s/ S.J. Ruzika Name: S.J. Ruzika Title: Director [SEAL] /s/ M. Ashcroft FORM OF SUBSCRIPTION [To be executed only upon exercise of Warrant] To ADT Limited The undersigned registered holder of the within Warrant hereby irrevocably exercises such Warrant for, and purchases thereunder, 15 million* shares of Common Stock of ADT Limited and herewith makes payment of $ therefor, and requests that the certificates for such shares be issued in the name of, and delivered to , whose address is . Dated: (Signature must conform in all respects to name of holder as specified on the face of Warrant) (Street Address) (City)(State)(Zip Code) * Represents the number of shares called for on the face of this Warrant without making any adjustment for Additional Shares of Common Stock or any other stock or other securities or property or cash which, pursuant to the adjustment provisions of this Warrant, may be delivered upon exercise. FORM OF ASSIGNMENT [To be executed only upon transfer of Warrant] For value received, the undersigned registered holder of the within Warrant hereby sells, assigns and transfers unto the Warrants and appoints attorney to make such transfer on the books of ADT Limited maintained for such purpose, with full power of substitution in the premises. Dated: (Signature must conform in all respects to name of holder as specified on the face of Warrant) (Street Address) (City)(State)(Zip Code) Signed in the presence of: [CONFORMED COPY] ________________________________________________________ ADT Limited Common Share Purchase Warrant Dated as of July 1, 1996 _________________________________________________________ THIS WARRANT AND ANY SHARES ACQUIRED UPON THE EXERCISE OF THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF EXCEPT WHILE A REGISTRATION STATEMENT UNDER SUCH ACT IS IN EFFECT OR PURSUANT TO AN EXEMPTION THEREFROM UNDER SUCH ACT. THIS WARRANT AND SUCH SHARES MAY BE TRANSFERRED ONLY IN COMPLIANCE WITH THE CONDITIONS SPECIFIED IN THIS WARRANT. TABLE OF CONTENTS 1. Exercise of Warrant . . . . . . . . . . . . . . . . 1 1.1. Manner of Exercise . . . . . . . . . . . . . 1 1.2. When Exercise Effective . . . . . . . . . . 1 1.3. Delivery of Stock Certificates, etc. . . . . 1 1.4. Company to Reaffirm Obligations . . . . . . 2 1.5. Conditions to Exercise of Warrant . . . . . 2 1.6. Grant of Proxy . . . . . . . . . . . . . . . 2 2. Adjustment of Common Stock Issuable Upon Exercise . 4 2.1. General; Warrant Price . . . . . . . . . . . 4 2.2. Adjustment of Warrant Price . . . . . . . . 4 2.2.1 Issuance of Additional Shares of Common Stock . . . . . . . . . . . . . . . . 4 2.2.2 Extraordinary Dividends and Distributions . . . . . . . . . . . . 5 2.3. Treatment of Options and Convertible Securities 7 2.4. Treatment of Stock Dividends, Stock Splits, etc. . . . . . . . . . . . . . . . . . . . 10 2.5. Computation of Consideration . . . . . . . 11 2.6. Adjustments for Combinations, etc. . . . . 13 2.7. Dilution in Case of Other Securities . . . 13 2.8. Minimum Adjustment of Warrant Price . . . . 13 2.9. No Adjustments . . . . . . . . . . . . . . 14 3. Consolidation, Merger, etc . . . . . . . . . . . 14 3.1. Adjustments for Consolidation, Merger, Sale of Assets, Reorganization, etc. . . . . . . . 14 3.2. Assumption of Obligations . . . . . . . . . 15 4. Other Dilutive Events . . . . . . . . . . . . . . 16 5. No Dilution or Impairment . . . . . . . . . . . . 16 6. Accountants' Report as to Adjustments . . . . . . 17 7. Notices of Corporate Action . . . . . . . . . . . 18 8. Registration of Common Stock . . . . . . . . . . 19 9. Restrictions on Transfer . . . . . . . . . . . . 20 9.1. Restrictive Legends . . . . . . . . . . . . 20 9.2. Notice of Proposed Transfer; Opinions of Counsel . . . . . . . . . . . . . . . . . . 21 9.3. Termination of Restrictions . . . . . . . . 23 9.4. Additional Restrictions . . . . . . . . . . 24 10. Availability of Information . . . . . . . . . . 24 11. Reservation of Stock, etc. . . . . . . . . . . . 26 12. Registration and Transfer of Warrants, etc. . . 26 12.1. Warrant Register; Ownership of Warrants . 26 12.2. Transfer and Exchange of Warrants . . . . 26 12.3. Replacement of Warrants . . . . . . . . . 27 13. Registration under Securities Act, etc. . . . . 27 13.1. Registration on Request. . . . . . . . . 27 13.2. Incidental Registration. . . . . . . . . 31 13.3. Registration Procedures . . . . . . . . . 33 13.4. Underwritten Offerings . . . . . . . . . 41 13.5. Preparation; Reasonable Investigation . . 44 13.6. Indemnification . . . . . . . . . . . . . 45 14. Definitions . . . . . . . . . . . . . . . . . . 51 15. Remedies . . . . . . . . . . . . . . . . . . . . 59 16. No Rights or Liabilities as Stockholder. . . . 59 17. Notices . . . . . . . . . . . . . . . . . . . . 59 18. Amendments . . . . . . . . . . . . . . . . . . . 59 19. Exercise Period; Expiration . . . . . . . . . . 60 20. Descriptive Headings . . . . . . . . . . . . . . 60 21. GOVERNING LAW . . . . . . . . . . . . . . . . . 60 22. Representations and Warranties . . . . . . . . . 60 23. Judicial Proceedings . . . . . . . . . . . . . . 61 FORM OF SUBSCRIPTION . . . . . . . . . . . . . . . . 62 FORM OF ASSIGNMENT . . . . . . . . . . . . . . . . . 63 -----END PRIVACY-ENHANCED MESSAGE-----