Pre-Effective Amendment to Registration of Securities by a Small-Business Issuer — Form SB-2
Filing Table of Contents
Document/Exhibit Description Pages Size
1: SB-2/A Pre-Effective Amendment No. 1 to Form SB-2 114 682K
2: EX-1.1 Underwriting Agreement 37 161K
3: EX-1.2 Form of Underwriter's Warrant 31 82K
4: EX-1.3 Share Deposit Agreement 4 22K
5: EX-1.4 Form of Warrant Agreement 40 102K
6: EX-1.5 Form of Agreement Among Underwriters 10 47K
7: EX-3.1 Articles of Incorporation 9 36K
8: EX-3.2 Bylaws of the Company 34 85K
9: EX-10.1 1996 Stock Option Plan 22 87K
10: EX-10.2 Strategic Alliance Agreement 6 34K
11: EX-10.3 Teaming Agreement 6 33K
12: EX-10.4 Card Access Systems 43 171K
13: EX-10.5 Software Value Added Reseller Agmt. 22 63K
14: EX-10.6 Agreement Bet. Ensec and Port Auth. 119 440K
15: EX-10.7 Agmt. for Purchase and Sale 14 29K
16: EX-10.8 Employment Agreements 11 55K
17: EX-11.1 Statement Regarding Computation 1 10K
18: EX-23.1 Consent of Grant Thornton LLP 1 8K
19: EX-27.1 Financial Data Schedule 2 13K
20: EX-27.2 Financial Data Schedule 2 13K
21: EX-27.3 Financial Data Schedule 2 13K
22: EX-27.4 Financial Data Schedule 2 13K
EX-1.2 — Form of Underwriter’s Warrant
| EX-1.2 | 1st Page of 31 | TOC | ↑Top | Previous | Next | ↓Bottom | Just 1st |
|---|
EXHIBIT 1.2
NO SALE OR TRANSFER OF THIS WARRANT OR THE SECURITIES UNDERLYING THIS
WARRANT MAY BE MADE UNTIL THE EFFECTIVENESS OF A REGISTRATION
STATEMENT OR OF A POST-EFFECTIVE AMENDMENT THERETO UNDER THE
SECURITIES ACT OF 1933 (THE "ACT"), COVERING THIS WARRANT OR THE
SECURITIES UNDERLYING THIS WARRANT, OR UNTIL THE COMPANY RECEIVES AN
OPINION OF COUNSEL SATISFACTORY TO THE COMPANY TO THE EFFECT THAT SUCH
SALE OR TRANSFER IS EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE
ACT. TRANSFER OF THIS WARRANT IS RESTRICTED UNDER PARAGRAPH 2 BELOW.
UNDERWRITERS' WARRANT TO PURCHASE
COMMON STOCK AND REDEEMABLE WARRANTS
ENSEC INTERNATIONAL, INC.
(A FLORIDA CORPORATION)
Dated: , 1996
THIS CERTIFIES THAT, for value received, Rickel & Associates, Inc.
(the "Representative") and Janssen-Meyers Associates, L.P. ("JM") (collectively,
the "Underwriters") or its registered assigns ( the Underwriters and any such
registered assign, a "Holder") are the owners of this warrant (the
"Underwriters' Warrant") to purchase from Ensec International, Inc., a Florida
corporation (the "Company"), during the period and at the prices hereinafter
specified, up to 170,000 shares of the Company's common stock, par value $.01
per share (the "Common
Stock"), and up to 170,000 redeemable common stock purchase warrants (the
"Warrants" and, together with the Common Stock, the "Securities"). JM may
purchase up to a maximum of 27,500 Securities.
This Underwriters' Warrant is issued pursuant to an Underwriting
Agreement dated , 1996 between the Company and the
Underwriters in connection with a public offering through the Underwriters (the
"Public Offering") of (i) 1,700,000 shares of Common Stock and 1,700,000
warrants, and (ii) pursuant to this Underwriters' over-allotment option (the
"Over-allotment Option") , an additional 255,000 shares of Common Stock (of
which Charles N. Finkel may sell 75,000 shares) and 255,000 warrants
(collectively, the warrants to purchase such 1,955,000 shares and the warrants
issuable upon exercisable upon exercise of this Warrant are called the
"Warrants"). The Warrants will be issued pursuant to, and subject to the terms
and conditions set forth in, an agreement between the Company, the Underwriters
and American Stock Transfer & Trust Company (the "Warrant Agreement").
1. Exercise of the Underwriters' Warrant.
-------------------------------------
(a) The rights represented by this Underwriters' Warrant shall be
exercisable at the prices and during the period specified below, upon the terms
and subject to the conditions as set forth herein:
(i) During the period from , 1996 to
, 1997, inclusive, the Holder shall have no right to purchase any Securities
hereunder.
(ii) Between , 1997 and , 2001,
inclusive, the Holder shall have the option to purchase 170,000 shares of Common
Stock and 170,000 Warrants hereunder at a price of $7.00 per share and $.165 per
Warrant, respectively, the purchase price of
2
the Common Stock and the Warrants being 165% of the public offering prices for
the Securities set forth in the Prospectus forming a part of the registration
statement on Form SB-2 (File No. 333-06223) of the Company, as amended (the
"Registration Statement").
(iii) After , 2001, the Holder shall have no
right to purchase any Securities hereunder and this Underwriters' Warrant shall
expire effective at 5:00 p.m., New York time on such date.
(b) The rights represented by this Underwriters' Warrant may be
exercised at any time within the period above specified, in whole or in part, by
(i) the surrender of this Underwriters' Warrant (with the purchase form at the
end hereof properly executed) at the principal executive office of the Company
(or such other office or agency of the Company as it may designate by notice in
writing to the Holder at the address of the Holder appearing on the books of the
Company); (ii) payment to the Company of the exercise price then in effect for
the number of shares of Common Stock and Warrants specified in the above-
mentioned purchase form together with applicable stock transfer taxes, if any;
and (iii) delivery to the Company of a duly executed agreement signed by the
person(s) designated in the purchase form to the effect that such person(s)
agree(s) to be bound by the provisions of Paragraph 5 and subparagraphs (b), (c)
and (d) of Paragraph 6 hereof. This Underwriters' Warrant shall be deemed to
have been exercised, in whole or in part to the extent specified, immediately
prior to the close of business on the date this Underwriters' Warrant is
surrendered and payment is made in accordance with the foregoing provisions of
this Paragraph 1, and the person or persons in whose name or names the
certificates for the Securities shall be issuable upon such exercise shall
become the holder or holders of record of such Common Stock and Warrants at that
time and date. The Common
3
Stock and Warrants so purchased shall be delivered to the Holder within a
reasonable time, not exceeding ten business days, after the rights represented
by this Underwriters' Warrant shall have been so exercised.
2. Restrictions on Transfer. This Underwriters' Warrant shall not
------------------------
be sold, transferred, assigned, pledged or hypothecated for a period of one year
commencing on , 1996, except that it may be transferred to successors
of the Holder, and may be assigned in whole or in part to any person who is an
officer of the Underwriters or a partner, officer of any other member of the
selling group during such period. Any such assignment shall be effected by the
Holder by (i) completing and executing the transfer form at the end hereof and
(ii) surrendering this Underwriters' Warrant with such duly completed and
executed transfer form for cancellation, accompanied by funds sufficient to pay
any transfer tax, at the office or agency of the Company referred to in
Paragraph 1 hereof, accompanied by a certificate (signed by a duly authorized
representative of the Holder) , stating that each transferee is a permitted
transferee under this Paragraph 2; whereupon the Company shall issue, in the
name or names specified by the Holder, a new Underwriters' Warrant or
Underwriters' Warrants of like tenor and representing in the aggregate rights to
purchase the same number of Securities as are then purchasable hereunder. The
Holder acknowledges that this Underwriters' Warrant may not be offered or sold
except pursuant to an effective registration statement under the Act or an
opinion of counsel satisfactory to the Company that an exemption from
registration under the Act is available.
3. Covenants of the Company.
------------------------
(a) The Company covenants and agrees that all Common Stock issuable
upon the exercise of this Underwriters' Warrant will, upon issuance thereof and
payment therefor in
4
accordance with the terms hereof, and all Common Stock issuable upon exercise of
the Warrants underlying this Underwriters' Warrant will, upon the issuance
thereof and payment therefor in accordance with the terms of the Warrant
Agreement, be duly and validly issued, fully paid and nonassessable and no
personal liability will attach to the Holder thereof by reason of being such a
Holder, other than as set forth herein.
(b) The Company covenants and agrees that during the period within
which this Underwriters' Warrant may be exercised, the Company will at all times
have authorized and reserved a sufficient number of shares of Common Stock to
provide for the exercise of this Underwriters' Warrant and the Warrants included
therein.
(c) The Company covenants and agrees that for so long as the
Securities shall be outstanding (unless the Securities shall no longer be
registered under Paragraph 12(b) or 12(g) of the Securities Exchange Act of
1934) the Company shall use its best efforts to cause all shares of Common Stock
issuable upon the exercise of the Underwriters' Warrant and the Warrants
included therein, to be included on the Nasdaq Stock Market or listed on a
national securities exchange.
4. No Rights as Stockholder. This Underwriters' Warrant shall not
------------------------
entitle the Holder to any voting rights or other rights as a stockholder of the
Company, either at law or in equity, and the rights of the Holder are limited to
those expressed in this Underwriters' Warrant and are not enforceable against
the Company except to the extent set forth herein.
5. Registration Rights.
-------------------
(a) During the period of four years from , 1997,
the Company shall advise the Holder, whether the Holder holds this Underwriters'
Warrant or has exercised this
5
Underwriters' Warrant and holds Common Stock and Warrants, or Common Stock
underlying the Warrants (the "Warrant Shares") , by written notice at least 30
days prior to the filing of any post-effective amendment to the Registration
Statement or of any new registration statement or post-effective amendment
thereto under the Act, covering any securities of the Company, for its own
account or for the account of others, and upon the request of the Holder made
during such four-year period, include in any such post-effective amendment or
registration statement such information as may be required to permit a public
offering of any of the Common Stock or Warrants issuable hereunder, and/or the
Warrant Shares (the "Registrable Securities"); provided, that this Paragraph
5(a) shall not apply to any registration statement filed pursuant to Paragraph 5
(b) hereof or to registrations of shares in connection with an employee benefit
plan or a merger, consolidation or other comparable acquisition or solely for
registration of non-convertible debt or preferred equity securities of the
Company; and provided, further, that, notwithstanding the foregoing, the Holder
shall have no right to include any Registrable Securities in any new
registration statement or post-effective amendment thereto unless as of the
effective date thereof the Registration Statement (as it may hereafter be
amended or supplemented) or any new registration statement under which the
Registrable Securities are registered shall have ceased to be effective or the
prospectus contained in such Registration Statement shall have ceased to be
current. The Company shall supply prospectuses in order to facilitate the
public sale or other disposition of the Registrable Securities, use its best
efforts to register and qualify any of the Registrable Securities for sale in
such states in which the Common Stock and Warrants are offered and sold in the
Public Offering as such Holder reasonably designates, furnish indemnification in
the manner provided in Paragraph 6 hereof, and do any and all other acts and
6
things which may be necessary to enable such Holder to consummate the public
sale of the Registrable Securities; provided, that, without limiting the
foregoing, the Company shall not be obligated to execute or file any general
consent to service of process or to qualify as a foreign corporation to do
business under the laws of any such jurisdiction. The Holder shall furnish
information reasonably requested by the Company in accordance with such post-
effective amendments or registration statements, including its intentions with
respect thereto, and shall furnish indemnification as set forth in Paragraph 6.
The Company shall continue to advise the Holders of the Registrable Securities
of its intention to file a registration statement or amendment pursuant to this
Paragraph 5(a) until the earliest of (i) , 2001; or (ii)
such time as all of the Registrable Securities have been registered and sold
under the Act; or (iii) such time as all of the Registrable Securities have been
otherwise transferred, new certificates for them not bearing a legend
restricting further transfer shall have been delivered by the Company and
subsequent public distribution of them shall not require registration or
qualification of them under the Act; or (iv) such time as in the opinion of
legal counsel for the Company, the Registrable Securities may be offered and
sold by the holders thereof without being registered under the Act and such
securities, upon receipt by the purchasers thereof pursuant to such sale, will
not constitute "restricted securities" as such term is defined in Rule 144 under
the Act.
(b) If any 51% holder (as defined below) shall give notice to the
Company at any time during the four-year period beginning one year from
, 1996 to the effect that such Holder desires to register under the Act any
Registrable Securities, under such circumstances that a public distribution
(within the meaning of the Act) of any such Registrable Securities will be
involved (and the Registration Statement or any new registration statement under
which such
7
Registrable Securities are registered shall have ceased to be effective or the
Prospectus contained therein shall have ceased to be current) , then the Company
will as promptly as practicable after receipt of such notice, but not later than
30 days after receipt of such notice, at the Company's option, file a post
effective amendment to the current Registration Statement or a new registration
statement pursuant to the Act to the end that the Registrable Securities may be
publicly sold under the Act as promptly as practicable thereafter and the
Company will use its best efforts to cause such registration to become and
remain effective as provided herein (including the taking of such steps as are
reasonably necessary to obtain the removal of any stop order); provided, that
such 51% holder shall furnish the Company with appropriate information in
connection therewith as the Company may reasonably request; and provided,
further, that the Company shall not be required to file such a post-effective
amendment or registration statement pursuant to this Paragraph 5(b) on more than
two occasions; and provided, further, that the registration rights of the 51%
holder under this Paragraph 5(b) shall be subject to the "piggyback"
registration rights of other holders of securities of the Company to include
such securities in any registration statement or post-effective amendment filed
pursuant to this Paragraph 5(b). The Company will maintain such registration
statement or post-effective amendment current under the Act for a period of at
least nine months from the effective date thereof. The Company shall supply
prospectuses in order to facilitate the public sale of the Registrable
Securities, use its best efforts to register and qualify any of the Registrable
Securities for sale in such states in which the Common Stock and Warrants are
offered and sold in the Public Offering as such holder reasonably designates and
furnish indemnification in the manner provided in Paragraph 6 hereof, provided
that, without limiting the foregoing, the Company shall not be obligated to
execute or file any general consent to service of
8
process or to qualify as a foreign corporation to do business under the laws of
any such jurisdiction.
(c) The Holder may, in accordance with Paragraphs 5(a) or (b), at his
or its option, and subject to the limitations set forth in Paragraph 1(a)
hereof, request the registration of any of the Registrable Securities in a
filing made by the Company prior to the acquisition of the Securities upon
exercise of this Underwriters' Warrant. The Holder may thereafter exercise this
Underwriters' Warrant at any time or from time to time subsequent to the
effectiveness under the Act of the registration statement which relates to the
Common Stock underlying the Underwriters' Warrants and Warrants included
therein.
(d) The term "51% holder," as used in this Paragraph 5, shall include
any owner or combination of owners of Underwriters' Warrants or Registrable
Securities if the aggregate number of shares of Common Stock and Warrant Shares
included in and underlying the Underwriters' Warrants and Registrable Securities
held of record by it or them, would constitute a majority of the aggregate of
such shares of Common Stock and Warrant Shares underlying the Underwriters'
Warrant and Registrable Securities as of the date of the initial issuance of the
Underwriters' Warrant.
(e) The following provisions of this Paragraph 5 shall also be
applicable:
(i) Within ten (10) days after receiving any notice pursuant to
Paragraph 5(b), the Company shall give notice to the other Holders of
Underwriters' Warrants or Registrable Securities, advising that the Company is
proceeding with such post-effective amendment or registration and offering to
include therein the Registrable Securities of such other Holders, provided that
they shall furnish the Company with all information in connection
9
therewith as shall be necessary or appropriate and as the Company shall
reasonably request in writing. Following the effective date of such post-
effective amendment or registration statement, the Company shall, upon the
request of any Holder of Registrable Securities, forthwith supply such number of
prospectuses meeting the requirements of the Act, as shall be reasonably
requested by such Holder. The Company shall use its best efforts to qualify the
Registrable Securities for sale in such states in which the Common Stock and
Warrants are offered and sold in the Public Offering as the 51% holder shall
reasonably designate at such times as the registration statement is effective
under the Act; provided, that, without limiting the foregoing, the Company shall
not be obligated to execute or file any general consent to service of process or
to qualify as a foreign corporation to do business under the laws of any such
jurisdiction.
(ii) The Company shall bear the entire cost and expense of any
registration of securities initiated by it under Paragraph 5(a) hereof
notwithstanding that the Registrable Securities subject to this Underwriters'
Warrant may be included in any such registration. The Company shall also comply
with the one request for registration made by the 51% holder pursuant to
Paragraph 5(b) hereof at the Company's own expense and without charge to any
holder of the Registrable Securities, but the expenses of registration pursuant
to the second request, if any, for registration pursuant to Paragraph 5(b) shall
be borne by the Company and the Holders of Registrable Securities included
therein in proportion to the aggregate offering prices of the securities being
offered by the Company included therein and the aggregate offering price of the
Registrable Securities included therein. Notwithstanding the foregoing, any
Holder whose Registrable Securities are included in any such registration
statement pursuant to this Paragraph 5 shall, however, bear the fees of any
counsel retained by him and any transfer taxes or
10
underwriting discounts or commissions applicable to the Registrable Securities
sold by him pursuant thereto and, in the case of a registration pursuant to
Paragraph 5(a) hereof, any additional registration or "blue sky" or state
securities fees attributable to the registration or qualification of such
Holder's Registrable Securities.
(iii) If the underwriter or managing underwriter in any
underwritten offering made pursuant to Paragraph 5(a) hereof shall advise the
Company that it declines to include a portion or all of the Registrable
Securities requested by the Holders to be included in the registration
statement, then distribution of all or a specified portion of the Registrable
Securities shall be excluded from such registration statement (in case of an
exclusion as to a portion of such Registrable Securities, such portion to be
allocated among such Holders in proportion to the respective numbers of
Registrable Securities requested to be registered by each such Holder). In such
event the Company shall give the Holder prompt notice of the number of
Registrable Securities excluded. Further, in such event the Company shall,
commencing six months after the completion of such underwritten offering, file
and use its best efforts to have declared effective, at its sole expense
(subject to the last sentence of Paragraph 5(a)(ii)), a registration statement
relating to such excluded securities.
(iv) Notwithstanding anything to the contrary contained herein, the
Company shall have the right at any time after it shall have given written
notice pursuant to Paragraph 5(a) or 5(b) (irrespective of whether a written
request for inclusion of any Registrable Securities shall have been made) to
elect not to file or to delay any such proposed registration statement or post
effective amendment thereto, or to withdraw the same after the filing but prior
to the effective date thereof. In addition, the Company may delay the filing of
any registration
11
statement or post effective amendment requested pursuant to Paragraph 5(b)
hereof by not more than 120 days if the Company, prior to the time it would
otherwise have been required to file such registration statement or post-
effective amendment thereto, determines in good faith that the filing of the
registration statement would require the disclosure of non-public material
information that, in its judgment, would be detrimental to the Company if so
disclosed or would otherwise adversely affect a financing, acquisition,
disposition, merger or other material transaction.
(v) If a registration pursuant to Paragraph 5(a) hereof involves an
underwritten offering, the Company shall have the right to select the investment
banker or investment bankers and manager or managers that will serve as
underwriters with respect to the underwritten offering. No Holder of
Registrable Securities may participate in any underwritten offering under this
Agreement unless such Holder completes and executes all questionnaires, powers
of attorney, indemnities, underwriting agreements and other documents required
under the terms of such underwritten offering, in each case, in the form and
upon terms reasonably acceptable to the Company and the underwriters. The
requested registration pursuant to Paragraph 5 (b) hereof shall not involve an
underwritten offering unless the Company shall first give its written approval
of each underwriter that participates in the offering, such approval not to be
unreasonably withheld.
6. Indemnification.
---------------
(a) Whenever pursuant to Paragraph 5, a registration statement
relating to any Registrable Securities is filed under the Act, amended or
supplemented, the Company will indemnify and hold harmless each Holder of the
Registrable Securities covered by such registration statement, amendment or
supplement (such holder hereinafter referred to as the
12
"Distributing Holder"), each person, if any, who controls (within the meaning of
the Act) the Distributing Holder, and each officer, employee, partner or agent
of the Distributing Holder, if the Distributing Holder is a broker or dealer,
and each underwriter (within the meaning of the Act) of such securities and each
person, if any, who controls (within the meaning of the Act) any such
underwriter and each officer, employee, agent or partner of such underwriter
against any losses, claims, damages or liabilities, joint or several, to which
the Distributing Holder, any such underwriter or any other person may become
subject under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained in
any such registration statement or any preliminary prospectus or final
prospectus constituting a part thereof or any amendment or supplement thereto,
or arise out of or are based upon the omission to state therein a material fact
required to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which such statements were made, not
misleading; and will reimburse the Distributing Holder and each such underwriter
or such other person for any legal or other expenses reasonably incurred by the
Distributing Holder, or Underwriters or such other person, in connection with
investigating or defending any such loss, claim, damage, liability or action;
provided, however, that the Company will not be liable in any such case (i) to
the extent that any such loss, claim, damage or liability arises out of or is
based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in such registration statement, such preliminary
prospectus, such final prospectus or such amendment or supplement in reliance
upon and in conformity with written information furnished by such Distributing
Holder, any other Distributing Holder or any such underwriter for use in the
preparation thereof, or (ii) such losses,
13
claims, damages or liabilities arise out of or are based upon any actual or
alleged untrue statement or omission made in or from any preliminary prospectus,
but corrected in the final prospectus, as amended or supplemented.
(b) Whenever pursuant to Paragraph 5 a registration statement relating
to the Registrable Securities is filed under the Act, or is amended or
supplemented, the Distributing Holder will indemnify and hold harmless the
Company, each of its directors, each of its officers who have signed such
registration statement and such amendments and supplements thereto, and each
person, if any, who controls the Company (within the meaning of the Act) against
any losses, claims, damages or liabilities to which the Company or any such
director, officer or controlling person may become subject under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue or alleged untrue
statement of any material fact contained in any such registration statement or
any preliminary prospectus or final prospectus constituting a part thereof, or
any amendment or supplement thereto, or arise out of or are based upon the
omission or the alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, in
each case to the extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission was made in such
registration statement, such preliminary prospectus, such final prospectus or
such amendment or supplement in reliance upon and in conformity with written
information furnished by such Distributing Holder for use in the preparation
thereof; and will reimburse the Company or any such director, officer or
controlling person for any legal or other expenses reasonably incurred by them
in connection with investigating or defending any such loss, claim, damage,
liability or action.
14
(c) Promptly after receipt by an indemnified party under this
Paragraph 6 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against any indemnifying
party, give the indemnifying party notice of the commencement thereof; but the
omission to so notify the indemnifying party will not relieve it from any
liability which it may have to any indemnified party otherwise than under this
Paragraph 6.
(d) In case any such action is brought against any indemnified party,
and it notifies an indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate in, and, to the extent that
it may wish, jointly with any other indemnifying party similarly notified, to
assume the defense thereof 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 will not be liable to such indemnified party under this
Paragraph 6 for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof other than reasonable
costs of investigation.
7. Adjustments of Warrant Price and Number of
------------------------------------------
Shares of Common Stock.
----------------------
(a) Computation of Adjusted Price. Except as hereinafter provided, in
-----------------------------
case the Company shall, at any time after the date of closing of the sale of
securities pursuant to the Public Offering (the "Closing Date"), issue or sell
any shares of Common Stock (other than the issuances or sales referred to in
Paragraph 7(f) hereof), including shares held in the Company's treasury and
shares of Common Stock issued upon the exercise of any options, rights or
warrants to subscribe
15
for shares of Common Stock (other than the issuances or sales of Common Stock
pursuant to rights to subscribe for such Common Stock distributed pursuant to
Paragraph 7(j) hereof) and shares of Common Stock issued upon the direct or
indirect conversion or exchange of securities for shares of Common Stock, for a
consideration per share less than both the "Market Price" (as defined in
Paragraph 7 (a)(vi) hereof) per share of Common Stock on the trading day
immediately preceding such issuance or sale and the Underwriters' Warrant Price
(as defined below) in effect immediately prior to such issuance or sale, or
without consideration, then forthwith upon such issuance or sale, the
Underwriters' Warrant Price in respect of the Common Stock issuable upon
exercise of this Underwriters' Warrant (but not the exercise price of the
Warrants issuable upon exercise of this Underwriters' Warrant, which shall be
adjusted only in accordance with the Warrant Agreement) shall (until another
such issuance or sale) be reduced to the price (calculated to the nearest full
cent) determined by multiplying the Underwriters' Warrant Price in effect
immediately prior to such issuance or sale by a fraction, the numerator of which
shall be the sum of (1) the number of shares of Common Stock outstanding
immediately prior to such issuance or sale multiplied by the Underwriters'
Warrant Price immediately prior to such issuance or sale plus (2) the
consideration received by the Company upon such issuance or sale, and the
denominator of which shall be the product of (x) the total number of shares of
Common Stock outstanding immediately after such issuance or sale, multiplied by
(y) the Underwriters' Warrant Price immediately prior to such issuance or sale;
provided, however, that in no event shall the Underwriters' Warrant Price be
adjusted pursuant to this computation to an amount in excess of the
Underwriters' Warrant Price in effect immediately prior to such computation,
except in the case of a combination of outstanding shares of Common Stock, as
provided by Paragraph 7(c)
16
hereof. For the purposes of this Paragraph 7, the term "Underwriters' Warrant
Price" shall mean the exercise price per share of Common Stock issuable upon
exercise of the Underwriters' Warrant (initially $10.50 per share), as adjusted
from time to time pursuant to the provisions of this Paragraph 7.
For the purposes of any computation to be made in accordance with this
Paragraph 7(a), the following provisions shall be applicable:
(i) In case of the issuance or sale of shares of Common Stock for a
consideration part or all of which shall be cash, the amount of the cash
consideration therefor shall be deemed to be the amount of cash received by the
Company for such shares (or, if shares of Common Stock are offered by the
Company for subscription, the subscription price, or, if such securities shall
be sold to underwriters or dealers for public offering without a subscription
offering, the public offering price) before deducting therefrom any compensation
paid or discount allowed in the sale, underwriting or purchase thereof by
underwriters or dealers or others performing similar services, or any expenses
incurred in connection therewith.
(ii) In case of the issuance or sale (otherwise than as a dividend or
other distribution on any stock of the Company) of shares of Common Stock for a
consideration part or all of which shall be other than cash, the amount of the
consideration therefor other than cash shall be deemed to be the value of such
consideration as determined in good faith by the Board of Directors of the
Company.
(iii) Shares of Common Stock issuable by way of dividend or other
distribution on any stock of the Company shall be deemed to have been issued
immediately after the opening of business on the day following the record date
for the determination of stockholders
17
entitled to receive such dividend or other distribution and shall be deemed to
have been issued without consideration.
(iv) The reclassification of securities of the Company other than
shares of Common Stock into securities including shares of Common Stock shall be
deemed to involve the issuance of such shares of Common Stock for a
consideration other than cash immediately prior to the close of business on the
date fixed for the determination of security holders entitled to receive such
shares, and the value of the consideration allocable to such shares of Common
Stock shall be determined as provided in subparagraph (ii) of this Paragraph
7(a).
(v) The number of shares of Common Stock at any one time outstanding
shall include the aggregate number of shares issued or issuable upon the
exercise of options, rights or warrants and upon the conversion or exchange of
convertible or exchangeable securities.
(vi) As used herein, the phrase "Market Price" at any date shall be
deemed to be the average of the last reported sale price, or, in case no such
reported sale takes place on such day, the average of the last reported sale
prices for the last three trading days, in either case as officially reported by
the principal securities exchange on which the Common Stock is listed or
admitted to trading or as reported in the Nasdaq Stock Market, or, if the Common
Stock is not listed or admitted to trading on any national securities exchange
or quoted on the Nasdaq Stock Market, the closing bid quotation as furnished by
the National Association of Securities Dealers, Inc. through Nasdaq or a similar
organization if Nasdaq is no longer reporting such information, or if the Common
Stock is not quoted on Nasdaq, as determined in good faith by resolution of the
Board of Directors of the Company, based on the best information available
18
to it for the day immediately preceding such issuance or sale, the day of such
issuance or sale and the day immediately after such issuance or sale. If the
Common Stock is listed or admitted to trading on a national securities exchange
and also quoted on the Nasdaq Stock Market, the Market Price shall be determined
as hereinabove provided by reference to the prices reported in the Nasdaq Stock
Market; provided that if the Common Stock is listed or admitted to trading on
the New York Stock Exchange, the Market Price shall be determined as hereinabove
provided by reference to the prices reported by such exchange.
(b) Options, Rights, Warrants and Convertible and Exchangeable
----------------------------------------------------------
Securities. Except in the case of the Company issuing rights to subscribe for
----------
shares of Common Stock distributed pursuant to Paragraph 7(j) hereof, if the
Company shall at any time after the Closing Date issue options, rights or
warrants to subscribe for shares of Common Stock, or issue any securities
convertible into or exchangeable for shares of Common Stock, in each case other
than the issuances or sales referred to in Paragraph 7(f) hereof, (i) for a
consideration per share less than the lesser of (a) the Underwriters' Warrant
Price in effect immediately prior to the issuance of such options, rights or
warrants, or such convertible or exchangeable securities, or (b) the Market
Price on the trading day immediately preceding such issuance, or (ii) without
consideration, the Underwriters' Warrant Price in effect immediately prior to
the issuance of such options, rights or warrants, or such convertible or
exchangeable securities, as the case may be, shall be reduced to a price
determined by making a computation in accordance with the provisions of
Paragraph 7(a) hereof, provided that:
(i) The aggregate maximum number of shares of Common Stock, as the
case may be, issuable under all the outstanding options, rights or warrants
shall be deemed to
19
be issued and outstanding at the time all the outstanding options, rights or
warrants were issued, and for a consideration equal to the minimum purchase
price per share provided for in the options, rights or warrants at the time of
issuance, plus the consideration (determined in the same manner as consideration
received on the issue or sale of shares in accordance with the terms of
Paragraph 7(a) hereof), if any, received by the Company for the options, rights
or warrants, and if no minimum purchase price is provided in the options, rights
or warrants, then the minimum purchase price shall be equal to zero; provided,
however, that upon the expiration or other termination of the options, rights or
warrants, if any thereof shall not have been exercised, the number of shares of
Common Stock deemed to be issued and outstanding pursuant to this subparagraph
(b) (and for the purposes of subparagraph (v) of Paragraph 7(a) hereof) shall be
reduced by such number of shares as to which options, warrants and/or rights
shall have expired or terminated unexercised, and such number of shares shall no
longer be deemed to be issued and outstanding, and the Warrant Price then in
effect shall forthwith be readjusted and thereafter be the price which it would
have been had adjustment been made on the basis of the issuance only of shares
actually issued or issuable upon the exercise of those options, rights or
warrants as to which the exercise rights shall not have expired or terminated
unexercised.
(ii) The aggregate maximum number of shares of Common Stock issuable
upon conversion or exchange of any convertible or exchangeable securities shall
be deemed to be issued and outstanding at the time of issuance of such
securities, and for a consideration equal to the consideration (determined in
the same manner as consideration received on the issue or sale of shares of
Common Stock in accordance with the terms of Paragraph 7 (a) hereof) received by
the Company for such securities, plus the minimum consideration, if any,
20
receivable by the Company upon the conversion or exchange thereof; provided,
however, that upon the expiration or other termination of the right to convert
or exchange such convertible or exchangeable securities (whether by reason of
redemption or otherwise), the number of shares deemed to be issued and
outstanding pursuant to this subparagraph (ii) (and for the purpose of
subparagraph (v) of Paragraph 7(a) hereof) shall be reduced by such number of
shares as to which the conversion or exchange rights shall have expired or
terminated unexercised, and such number of shares shall no longer be deemed to
be issued and outstanding, and the Warrant Price then in effect shall forthwith
be readjusted and thereafter be the price which it would have been had
adjustment been made on the basis of the issuance only of the shares actually
issued or issuable upon the conversion or exchange of those convertible or
exchangeable securities as to which the conversion or exchange rights shall not
have expired or terminated unexercised. No adjustment will be made pursuant to
this subparagraph (ii) upon the issuance by the Company of any convertible or
exchangeable securities pursuant to the exercise of any option, right or warrant
exercisable therefor, to the extent that adjustments in respect of such options,
rights or warrants were previously made pursuant to the provisions of
subparagraph (i) of this subparagraph 7(b).
(iii) If any change shall occur in the price per share provided for in
any of the options, rights or warrants referred to in subparagraph (i) of this
Paragraph 7 (b) , or in the price per share at which the securities referred to
in subparagraph (ii) of this Paragraph 7 (b) are convertible or exchangeable, or
if any such options, rights or warrants are exercised at a price greater than
the minimum purchase price provided for in such options, rights or warrants, or
any such securities are converted or exercised for more than the minimum
consideration receivable by the Company upon such conversion or exchange, the
options, rights or warrants or conversion or
21
exchange rights, as the case may be, shall be deemed to have expired or
terminated on the date when such price change became effective in respect of
shares not theretofore issued pursuant to the exercise or conversion or exchange
thereof, and the Company shall be deemed to have issued upon such date new
options, rights or warrants or convertible or exchangeable securities at the new
price with respect of the number of shares issuable upon the exercise of such
options, rights or warrants or the conversion or exchange of such convertible or
exchangeable securities; provided, however, that no adjustment shall be made
pursuant to this subparagraph (iii) with respect to any change in the price per
share provided for in any of the options, rights or warrants referred to in
subparagraph (i) of this Paragraph 7, or in the price per share at which the
securities referred to in subparagraph (ii) of this Paragraph 7(b) are
convertible or exchangeable, which change results from the application of the
anti-dilution provisions thereof in connection with an event for which, subject
to subparagraph (iv) of Paragraph 7(f), an adjustment to the Warrant Price and
the number of securities issuable upon exercise of the Warrants will be required
to be made pursuant to this Paragraph 7 and the Warrant Agreement, respectively.
(c) Subdivision and Combination. In case the Company shall at any
---------------------------
time after the Closing Date subdivide or combine the outstanding shares of
Common Stock, the Warrant Price shall forthwith be proportionately decreased in
the case of subdivision or increased in the case of combination.
(d) Adjustment in Number of Shares. Upon each adjustment of the
------------------------------
Warrant Price pursuant to the provisions of this Paragraph 7, the number of
shares of Common Stock (but not the number of Warrants, which are subject to
adjustment as set forth in the Warrant Agreement) issuable upon the exercise of
the Underwriters' Warrant shall be adjusted to the
22
nearest full whole number by multiplying a number equal to the Underwriters'
Warrant Price in effect immediately prior to such adjustment by the number of
shares of Common Stock issuable upon exercise of the Underwriters' Warrant
immediately prior to such adjustment and dividing the product so obtained by the
adjusted Underwriters' Warrant Price.
(e) Reclassification, Consolidation, Merger, etc. In case of any
--------------------------------------------
reclassification or change of the outstanding shares of Common Stock (other than
a change in par value to no par value, or from no par value to par value, or as
a result of a subdivision or combination), or in the case of any consolidation
of the Company with, or merger of the Company into, another corporation (other
than a consolidation or merger which does not result in any reclassification or
change of the outstanding shares of Common Stock, except a change as a result of
a subdivision or combination of such shares or a change in par value, as
aforesaid), or in the case of a sale or conveyance to another corporation of the
property of the Company as an entirety, the Holder shall thereafter have the
right to purchase the kind and number of shares of stock and other securities
and property receivable upon such reclassification, change, consolidation,
merger, sale or conveyance as if the Holder were the owner of the shares of
Common Stock underlying the Underwriters' Warrant immediately prior to any such
events (but not the shares of Common Stock issuable upon exercise of any
Warrants underlying the Underwriters' Warrant) at a price equal to the product
of (x) the number of shares issuable upon exercise of the Underwriters' Warrant
(but not the shares of Common Stock issuable upon exercise of any Warrants
underlying the Underwriters' Warrant) and (y) the Warrant Price in effect
immediately prior to the record date for such reclassification, change,
consolidation, merger, sale or conveyance as if such Holder had exercised the
Underwriters' Warrant.
23
(f) No Adjustment of Warrant Price in Certain Cases. Notwithstanding
-----------------------------------------------
anything herein to the contrary, no adjustment of the Warrant Price shall be
made:
(i) Upon the issuance or sale of the Underwriters' Warrant, the shares
of Common Stock or Warrants issuable upon the exercise of the Underwriters'
Warrant or the shares of Common Stock issuable upon exercise of the Warrants
underlying the Underwriters' Warrant; or
(ii) Upon the issuance or sale of (A) the shares of Common Stock or
Warrants issued by the Company in the Public Offering (including pursuant to the
Over-allotment Option) or other shares of Common Stock or warrants issued by the
Company upon consummation of the Public Offering, or (B) the shares of Common
Stock (or other securities) issuable upon exercise of Warrants; or
(iii) Upon (i) the issuance of options pursuant to the Company's
incentive stock option plan in effect on the date hereof or as hereafter amended
in accordance with the terms thereof or any other employee or executive stock
option plan approved by stockholders of the Company or the sale by the Company
of any shares of Common Stock pursuant to the exercise of any such options, or
(ii) the sale by the Company of any shares of Common Stock pursuant to the
exercise of any options or warrants issued and outstanding on the date of
closing of the sale of Common Stock and Warrants pursuant to the Public Offering
or (iii) the issuance or sale by the Company of any shares of Common Stock
pursuant to the Company's restricted stock plan in effect on the date hereof; or
(iv) If the amount of said adjustment shall be less than two cents
(2c) per share of Common Stock.
24
(g) Adjustment of Warrants Underlying Underwriters' Warrant. With
-------------------------------------------------------
respect to the Warrants underlying the Underwriters' Warrant, the exercise price
of such Warrants and the number of shares of Common Stock purchasable pursuant
to such Warrants shall be automatically adjusted in accordance with the
applicable provisions of the Warrant Agreement, upon the occurrence, at any time
after the date hereof, of any of the events described in the Warrant Agreement
requiring such adjustment, with the same force and effect as if such Warrants
had been issued as of this date, whether or not such Warrants shall have been
exercised (or are exercisable) at the time of the occurrence of such event and
whether or not such Warrants shall be issued and outstanding at the time of the
occurrence of such event. Thereafter, such Warrants shall be exercisable at
such Warrant's adjusted exercise price for such adjusted number of shares of
Common Stock or other securities, properties or rights as provided for in the
Warrant Agreement.
(h) Redemption of Underwriters' Warrant. Notwithstanding anything to
-----------------------------------
the contrary contained in this Agreement or elsewhere, the Underwriters Warrant
cannot be redeemed by the Company under any circumstances.
(i) Dividends and Other Distributions with Respect to Outstanding
-------------------------------------------------------------
Securities. In the event that the Company shall at any time after the Closing
----------
Date and prior to the exercise and expiration of the Underwriters' Warrant
declare a dividend (other than a dividend consisting solely of shares of Common
Stock or a cash dividend or distribution payable out of current or retained
earnings) or otherwise distribute to the holders of Common Stock any monies,
assets, property, rights, evidences of indebtedness, securities (other than such
a cash dividend or distribution or dividend consisting solely of shares of
Common Stock), whether issued by the Company or by another person or entity, or
any other thing of value, the Holders of the
25
unexercised Underwriters' Warrant shall thereafter be entitled, in addition to
the shares of Common Stock or other securities receivable upon the exercise
thereof, to receive, upon the exercise of such Underwriters' Warrant, the same
monies, property, assets, rights, evidences of indebtedness, securities or any
other thing of value that they would have been entitled to receive at the time
of such dividend or distribution as if the Holders were the owners of the shares
of Common Stock underlying the Underwriters' Warrant (but not the shares of
Common Stock issuable upon exercise of any Warrants underlying the Underwriters'
Warrant). At the time of any such dividend or distribution, the Company shall
make appropriate reserves to ensure the timely performance of the provisions of
this Paragraph 7(i).
(j) Subscription Rights for Shares of Common Stock or Other
-------------------------------------------------------
Securities. In case the Company or an affiliate of the Company shall at any
time after the date hereof and prior to the exercise of the Underwriters'
Warrant in full issue any rights to subscribe for shares of Common Stock or any
other securities of the Company or of such affiliate to all the holders of
Common Stock, the Holders of the unexercised Underwriters' Warrant shall be
entitled, in addition to the shares of Common Stock or other securities
receivable upon the exercise of the Underwriters' Warrant, to receive such
rights at the time such rights are distributed to the other stockholders of the
Company but only to the extent of the number of shares of Common Stock, if any,
for which the Underwriters' Warrant remains exercisable other than shares of
Common Stock issuable upon exercise of the Warrants underlying Underwriters'
Warrant.
(k) Notice in Event of Dissolution. In case of the dissolution,
------------------------------
liquidation or winding-up of the Company, all rights under the Underwriters'
Warrant shall terminate on a date fixed by the Company, such date to be no
earlier than ten (10) days prior to the effectiveness of
26
such dissolution, liquidation or winding-up and not later than five (5) days
prior to such effectiveness. Notice of such termination of purchase rights
shall be given to the registered Holders of the Underwriters' Warrant, as the
same shall appear on the books and records of the Company, by registered mail at
least thirty (30) days prior to such termination date.
(l) Computations. The Company may retain a firm of independent public
------------
accountants (who may be any such firm regularly employed by the Company) to make
any computation required under this Paragraph, and any certificate setting forth
such computation signed by such firm shall be conclusive evidence of the
correctness of any computation made under this Paragraph 7.
8. Fractional Shares.
-----------------
(a) The Company shall not be required to issue fractions of shares of
Common Stock or fractional Warrants on the exercise of this Underwriters'
Warrant; provided, however, that if the Holder exercises the Underwriters'
Warrant in full, any fractional shares of Common Stock shall be eliminated by
rounding any fraction up to the nearest whole number of shares of Common Stock.
(b) The Holder of this Underwriters' Warrant, by acceptance hereof,
expressly waives his right to receive any fractional share of Common Stock or
fractional Warrant upon exercise of this Underwriters' Warrant.
9. Redemption of Warrants Underlying the Underwriters' Warrant. The
-----------------------------------------------------------
Warrants underlying the Underwriters' Warrant are redeemable by the Company at a
redemption price of $.10 per Warrant, in whole or in part, commencing on the
first anniversary of the date hereof (or earlier with the consent of the
Representative) and prior to their expiration upon not
27
less than thirty (30) days' prior written notice to the holders of the Warrants;
provided, that the average closing bid quotation of the Common Stock as reported
on The Nasdaq Stock Market, if traded thereon, or if not traded thereon, the
average closing sale price if listed on a national securities exchange (or other
reporting system that provides last sales prices), has been at least 150% of the
then current Exercise Price for a period of 20 consecutive trading days ending
on the third day prior to the date on which the Company gives notice of
redemption. Any redemption in part shall be made pro rata to all Warrant
holders. The redemption notice shall be mailed to the holders of the Warrants
at their respective addresses appearing in the Warrant register. Holders of the
Warrants will have exercise rights until the close of business on the day
immediately preceding the date fixed for redemption (at which time this
Underwriters' Warrant shall no longer be exercisable for Warrants).
10. Miscellaneous.
-------------
(a) This Underwriters' Warrant shall be governed by and in accordance
with the laws of the State of New York without regard to the conflicts of law
principles thereof.
(b) All notices, requests, consents and other communications hereunder
shall be made in writing and shall be deemed to have been duly made when
delivered, or mailed by registered or certified mail, return receipt requested:
(i) if to a Holder, to the address of such Holder as shown on the books of the
Company, or (ii) if to the Company, 751 Park of Commerce Drive, Boca Raton,
Florida 33487.
(c) The Company and the Representative may from time to time
supplement or amend this Underwriters' Warrant without the approval of any other
Holders in order to cure any ambiguity, to correct or supplement any provision
contained herein which may be defective or
28
inconsistent with any provisions herein, or to make any other provisions in
regard to matters or questions arising hereunder which the Company and the
Underwriters may deem necessary or desirable and which the Company and the
Underwriters deem not to materially adversely affect the interest of the
Holders.
(d) All the covenants and provisions of this Underwriters' Warrant by
or for the benefit of the Company and the Holders shall bind and inure to the
benefit of their respective successors and assigns hereunder.
(e) Nothing in this Underwriters' Warrant shall be construed to give
to any person or corporation other than the Company and the Underwriters and any
other registered Holder or Holders, any legal or equitable right, and this
Underwriters' Warrant shall be for the sole and exclusive benefit of the Company
and the Underwriters and any other Holder or Holders.
(f) This Underwriters' Warrant may be executed in any number of
counterparts and each of such counterparts shall for all purposes be deemed to
be an original, and such counterparts shall together constitute but one and the
same instrument.
IN WITNESS WHEREOF, the Company has caused this Underwriters' Warrant
to be signed by its duly authorized officer and to be dated ,1996.
ENSEC INTERNATIONAL, INC.
By: _______________________________
Name: Charles N. Finkel
Title: President and Chief Executive Officer
29
PURCHASE FORM
-------------
(To be signed only upon exercise of the Underwriters' Warrant)
The undersigned, the Holder of the foregoing Underwriters' Warrant,
hereby irrevocably elects to exercise the purchase rights represented by such
Underwriters' Warrant for, and to purchase thereunder, _______ shares of Common
Stock and/or _______ Warrants of Ensec International, Inc. and herewith makes
payment of $_______________ therefor, and requests that the certificates for
Common Stock and/or Warrants be issued in the name(s) of, and delivered to
______________________________________________ whose addresses is (are)
______________________________________________________ and whose social security
or taxpayer identification number(s) is (are) _________________________.
Dated: ______________________
____________________________
____________________________
Address
____________________________
Telephone
* Signature must conform in all respects to name of registered Holder.
TRANSFER FORM
-------------
(To be signed only upon transfer of the Underwriters' Warrant)
For value received, the undersigned hereby sells, assigns, and
transfers unto _____________________________ the right to purchase shares of
Common Stock and/or Warrants of Ensec International, Inc. represented by the
foregoing Underwriters' Warrant to the extent of ______________________________
shares of Common Stock and/or ___________ Warrants, and appoints
__________________________, attorney to transfer such rights on the books of
Ensec International, Inc., with full power of substitution in the premises.
Dated: _________________________
_________________________________
(name of holder)
_________________________________
Address
_________________________________
In the presence of:
_________________________________
_________________________________
↑Top
Filing Submission 0000950130-96-003007 – Alternative Formats (Word / Rich Text, HTML, Plain Text, et al.)
Copyright © 2024 Fran Finnegan & Company LLC – All Rights Reserved.
About — Privacy — Redactions — Help —
Mon., May 6, 1:18:12.2am ET 