August 21, 1995
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington DC, 20549
Re: Form 10-Q of Barringer Technologies Inc.
Dear Sir or Madam:
Attached for filing, pursuant to the Securities Exchange Act of
1934, is the quarterly report on Form 10-Q for Barringer Technologies Inc.
for the period ended June 30, 1995.
If you have any questions or comments regarding the attached
document, please contact the undersigned.
Very truly yours,
/s/Lynn L. Abraham
Lynn L. Abraham
Enclosures
cc: Mr. Richard Rosenfeld
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
(Mark One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1995
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ________ to __________
Commission file number 0-3207
Barringer Technologies Inc.
(Exact name of registrant as specified in its charter)
Delaware 84-0720473
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
219 South Street, New Providence, New Jersey 07974
(Address of principal executive offices)
(Zip Code)
(908) 665-8200
(Registrant's telephone number, including area code)
N/A
(Former name, former address and former fiscal year, if changed since last
report)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days.
Yes [X] No ______
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all documents
and reports required to be filed by Sections 12, 13 or 15(d) of the
Securities Exchange Act of 1934 subsequent to the distribution of
securities under a plan confirmed by a court. Yes ____ No ______
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
Outstanding as of August 5, 1995
Common Stock, $.01 par value 13,646,286 shares
BARRINGER TECHNOLOGIES INC. AND SUBSIDIARIES
TABLE OF CONTENTS
Page
PART I -- FINANCIAL INFORMATION
Item 1. Financial Statements. 3
- Consolidated Balance Sheets as of June
30, 1995 (unaudited) and December 31,
1994 3
- Consolidated Statements of Operations
(unaudited) for the six months and
three months ended June 30, 1995 and
1994 5
- Consolidated Statement of Shareholders'
Equity for the six months ended June
30, 1995 6
- Consolidated Statements of Cash Flows
(unaudited) for the six months and
three months ended June 30, 1995 and
1994 7
- Notes to Consolidated Financial
Statements 9
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations. 12
PART II -- OTHER INFORMATION
Item 6 Exhibits and Reports on Form 8-K 20
PART I -- FINANCIAL INFORMATION
Item 1. Financial Statements.
BARRINGER TECHNOLOGIES INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
June 30, 1995 (unaudited) December 31, 1994
ASSETS
Current assets:
Cash $ 326 $ 267
Trade receivables, less
allowance for doubtful
accounts of $445 and $539 2,438 2,565
Inventories 1,509 1,790
Deferred tax asset (note 2) 225 225
Net assets held for sale (note 4) 854 -
Prepaid expenses and other 180 220
Total current assets 5,532 5,067
Property and equipment, net 643 1,364
Other assets 103 361
Total assets $ 6,278 $ 6,792
See notes to consolidated financial statements.
BARRINGER TECHNOLOGIES INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
June 30, 1995 December 31, 1994
(unaudited)
LIABILITIES AND EQUITY
Current liabilities:
Bank indebtedness and
other notes (note 6) $ 1,357 $ 1,160
Accounts payable 1,112 1,632
Accrued liabilities 1,154 1,393
Liabilities to operation held for sale 470 -
Current portion of long-term debt 300 230
Total current liabilities 4,393 4,415
Long-term debt, net of current portion - 451
Total liabilities 4,393 4,866
Minority Interest - 740
Shareholders' Equity (notes 5 & 7):
Convertible preferred stock,
$1.25 par value, 1,000
shares authorized, 0 and
444 shares, respectively
outstanding - 555
Class A convertible preferred
stock, $2.00 par value, 1,000
shares authorized, and 82
shares, respectively outstanding
less discount of $65 101 101
Class B convertible preferred
stock, $2.00 par value, 730
shares authorized, 318 and 318
shares, respectively outstanding 635 635
Common stock, $.01 par value,
20,000 shares authorized, 13,646
and 11,486 shares,
respectively outstanding 136 115
Additional paid-in capital 17,440 15,950
Accumulated deficit (15,985) (15,633)
Cumulative foreign currency
translation adjustments (429) (524)
Less: common stock in treasury at cost;
124 shares (13) (524)
Total shareholders' equity 1,885 1,186
Total Liabilities and Equity $ 6,278 $ 6,792
See notes to consolidated financial statements.
BARRINGER TECHNOLOGIES INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
IN THOUSANDS EXCEPT PER SHARE DATA
(UNAUDITED)
Three months ended Six months ended
June 30, June 30,
1995 1994 1995 1994
(4) (Restated)
Revenues from operations $ 1,782 $ 1,226 $ 3,110 $ 3,706
Cost of sales 925 739 1,892 2,135
Gross profit 857 487 1,218 1,571
Operating expenses:
Selling, general and
administrative 671 758 1,300 1,397
Unfunded research and
development 70 108 104 174
741 866 1,404 1,571
Operating income (loss)
116 (379) (186) -
Other income (expense):
Interest (60) (49) (122) (95)
Other (43) 89 (48) 106
(103) 40 (170) 11
Income (loss) from continuing
operations 13 (339) (356) 11
Operation held for sale (note 4) 54 (36) 55 (19)
Net income (loss) for the period 67 (375) (301) (8)
Preferred stock dividends (24) (27) (51) (54)
Net income (loss) attributable
to common shareholders $ 43 $ (402) $ (352) $ (62)
Per Share Data (note 3):
Continuing operations $ * $ (.04) $ (.03) $ (.01)
Held for sale * - - -
Net income (loss) $ * $ (.04) $ (.03) $ (.01)
Weighted average shares
outstanding 12,269 11,302 12,240 11,197
*less than $0.01 per share.
See notes to consolidated financial statements.
BARRINGER TECHNOLOGIES INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
FOR THE SIX MONTHS ENDED JUNE 30, 1995
(IN THOUSANDS (UNAUDITED)
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
Class A Class B Foreign
Conv. Conv. Conv. Currency
Common Paid-in Pref. Pref. Pref. Transl.
Stock Capital Stock Stock Stock Deficit Adjust.
Balance -- January 1, 1995 $115 $15,950* $555 $101 $635 $(15,633) $(524)
1995 dividend on preferred
shares 1 50 (51)
Sale of securities, net
of expenses 15 890
Conversion of preferred stock 5 550 (555)
Current period adjustment 95
Net loss ___ ___ ____ ____ ____ (301) ____
Balance --
June 30, 1995 $ 136 $17,440* - $101 $635 $(15,985) $(429)
</TABLE>
______________________
* Net of receivable from sale of stock of $275
See notes to consolidated financial statements.
BARRINGER TECHNOLOGIES INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS) (UNAUDITED)
Three months ended Six months ended
June 30, June 30,
1995 1994 1995 1994
Operating Activities
Net income (loss) for
the period $ 67 $ (375) $ (301) $ (8)
Items not affecting cash:
Depreciation/amortization 77 239 309 397
Minority interest - 41 - 22
(Income) from operation
held for sale (54) - (55) -
Other 72 (273) 81 (323)
Decrease (increase) in non-cash
working capital balances
related to:
Continuing operations (582) 258 (663) (999)
Operation held for sale - - 352 -
Cash used in operating
activities (420) (110) (277) (911)
Investing Activities
Release of cash held in escrow - 225 - 225
Purchase of equipment and other (80) (175) (262) (157)
Increase in investment in
operation held for sale (133) - (133) -
Operation held for sale - - 10 -
Cash provided by (used in)
investing activities (213) 50 (385) 68
Financing Activities
Reduction in long-term debt - (16) (64) (94)
Increase in bank debt and other 34 161 274 495
Proceeds on issuance of
securities and other 905 134 905 243
Operation held for sale - - (394) -
Cash provided by financing
activities 939 279 721 644
Increase (decrease) in cash and
cash equivalents 306 219 59 (199)
Cash at beginning of period 20 68 267 486
Cash at end of period $ 326 $ 287 $ 326 $ 287
See notes to consolidated financial statements.
BARRINGER TECHNOLOGIES INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS) (UNAUDITED)
(CONTINUED)
Three months ended Six months ended
June 30, June 30,
1995 1994 1995 1994
Changes in components of
non-cash working capital
balances related to
continuing operations:
Receivables $ 40 $ 1,105 $ (757) $ 325
Inventory 185 (492) 281 (1,137)
Other current assets (38) 18 (8) (37)
Accounts payable and
accrued expenses (769) (330) (179) (150)
Other current liabilities - (43) - -
Decrease (increase) in non-cash
working capital balances $ (582) $ 258 $ (663) $ (999)
Cash paid during the period
for interest $ 105 $ 61 $ 150 $ 92
Cash paid during the period
for income taxes $ - $ 7 $ - $ 7
See notes to consolidated financial statements.
BARRINGER TECHNOLOGIES INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. In the opinion of the Company, the unaudited consolidated financial
statements contain all adjustments (consisting of only normal recurring
accruals) necessary to present fairly the consolidated financial position
of the Company as of June 30, 1995 and the results of its operations and
its cash flows for the three months and six months ended June 30, 1995 and
1994, respectively. The accounting policies followed by the Company are
set forth in the Notes to Consolidated Financial Statements in the audited
consolidated financial statements of Barringer Technologies Inc. and
Subsidiaries included in its Annual Report on Form 10-K for the year ended
December 31, 1994. This report should be read in conjunction therewith.
The results of operations for the interim periods are not necessarily
indicative of the results to be expected for the full year.
2. As a result of the Company's history of losses, a valuation allowance
has been provided for all U.S. deferred tax assets and for substantially
all of the Canadian deferred tax assets. The net deferred tax asset
relates to the Company's Canadian subsidiary, which has available tax
credits and loss carryforwards. The Canadian subsidiary has a history of
profitability, despite the consolidated losses of the Company. Based on
this history and estimated 1995 earnings, which includes earnings from
certain contracts, as well as available tax planning strategies, management
considers realization of the unreserved deferred tax asset more likely than
not.
3. Per share data is based on the weighted average number of common
shares outstanding.
4. The Company maintains voting control of more than 50% of the common
stock of Barringer Laboratories Inc. ("Labco") through an irrevocable
agreement with another Labco shareholder, which requires such shareholder,
for as long as it is a shareholder of Labco, to vote its 83,000 shares of
Labco common stock in the manner designated by the Company. The agreement
also gives the Company the right to bid on such shares of Labco should the
record holder wish to sell them.
The Company is actively seeking a purchaser for its 47% interest in
Labco. Accordingly, the financial statements reflect Labco as an asset
held for sale. Management believes it will ultimately dispose of Labco at a
gain. Labco is currently operating profitably and management anticipates
that Labco will continue to do so for the remainder of 1995. However,
management will reevaluate this estimate quarterly.
Where appropriate, the Company's Consolidated Statement of Operations
and Statement of Cash Flows have been reclassified to reflect Labco as an
operation held for sale.
The following are the condensed results of operations and condensed
balance sheet for Labco.
Condensed Results of Operations
(In Thousands)
Three months ended Six months ended
June 30, June 30,
1995 1994 1995 1994
Revenues $1,647 $1,278 $3,089 $2,830
Less costs and expenses:
Cost of revenues 1,141 1,114 2,222 2,271
Expenses 391 240 749 599
1,532 1,354 2,971 2,870
Operating income (loss) 115 (76) 118 (40)
Minority interest (61) 40 (63) 21
Net income (loss) $ 54 $ (36) $ 55 $ (19)
Condensed Balance Sheet
As of June 30, 1995
(In Thousands)
Current assets $1,164
Property and equipment 697
Other assets 536
Total assets 2,397
Current liabilities 873
Long-term debt 99
Equity 1,425
Total liabilities and equity $2,397
5. On May 9, 1995, the Company completed the private placement of its
securities to two institutional investors. The private placement consisted
of 125 units priced at $6,000 each for an aggregate sales price of
$750,000. Each unit consists of 10,000 shares of the Company's common
stock and a five year warrant to purchase 10,000 shares of the Company's
common stock at $.50 per share. In addition, in order to induce the
institutional investors to enter into this transaction, an additional three
year warrant to acquire 150,000 shares of the Company's common stock at
$.50 per share was issued. The Company has allocated a portion of the
proceeds for working capital purposes and has used a portion of the
proceeds to repay indebtedness owed by its wholly owned subsidiary, Barringer
Research Limited, ("BRL") to its bank, Toronto Dominion Bank (the
"Bank").
On June 30, 1995, the Company completed an additional private
placement. It sold an additional 28 units, including 22 units to 7 members
of senior management and the Company's Board of Directors, for proceeds
aggregating $168,000. This private placement did not include the
additional three year warrant.
6. At June 30, 1995, amounts outstanding under BRL's line of credit
with the Bank exceeded the amount available thereunder. The Company has
sought an extension of time from the Bank in which to come into compliance
with the applicable borrowing formulas and has had a number of discussions
with the Bank in this regard. However, no agreement has been reached with
the Bank as of the date hereof as to the terms of any such extension. The
Company believes that any such extension will be conditioned upon, among
other things, the granting of additional collateral to the Bank to further
secure the obligations owed to the Bank. The line of credit is currently
guaranteed by the Company and Barringer Instruments Inc. ("BII").
No assurance can be given that the Company will obtain an extension
of time from the Bank or as to the terms of any such extension.
7. Effective June 30, 1995, the Company, pursuant to the terms of its
Certificate of Incorporation, as amended, converted all of the outstanding
shares of the Company's convertible preferred stock, par value $1.25 per
share, into shares of the Company's common stock, par value $.01 per share,
at a conversion ratio of 1.2867 shares of common stock for each outstanding
share of convertible preferred stock. As a result, effective June 30,
1995, the Company issued 490,364 shares of common stock in exchange for
381,099 shares of the convertible preferred stock.
8. During the three months ended June 30, 1995, the Company was
successful in renegotiating amounts due to certain entities that have
provided various professional services. Accordingly, the Company was able
to reduce its liability to such entities by approximately $142,000.
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
In order to devote its full resources to its instrument business, primarily
the further development, marketing and production of its new Model 400
IONSCAN and the Company's newly introduced consumer product the Barringer
DrugAlert System, the Company has decided to sell its 47% ownership in
Labco. The Company currently plans to use a portion of the proceeds of a
sale of Labco to repay indebtedness to Labco. Labco is an analytical services
company, principally engaged in environmental monitoring, geochemical
analysis and image processing for the hydrocarbon, and mineral exploration
industries. Since such a sale would represent the disposal of a separate
and distinct business segment, the Company's financial statements, where
appropriate, have been reclassified to reflect Labco as an operation held
for sale. The remaining business segment develops, manufactures and
markets specialty analytical instruments for security, law enforcement,
exploration and environmental monitoring applications. Accordingly,
management's discussion and analysis of financial condition and results of
operations is presented on that basis.
CONTINUING OPERATIONS
Quarter Ended June 30, 1995 Compared to Quarter Ended June 30, 1994
Instrument sales for the quarter ended June 30, 1995 increased by $449,000
or 38.6%, over the same period last year. The increase was the result of
increased unit sales in the quarter made possible by the availability of
the new Model 400. The Company relies upon sales to governmental agencies,
which are subject to mandated procurement processes and budgetary
constraints. As a result, the selling cycle for its products often extends
over long periods, which can result in significant variations in quarterly
sales.
Sales of the research and development business for the quarter ended June
30, 1995 increased by $107,000, or 170%, compared to the same quarter last
year. The improvement was the result of continued work on the Cdn.
$1,967,000 contract awarded to the Company in late 1994. The contract was
for the design and construction of an airborne laser-fluorosensor system to
precisely monitor the proliferation of oil spills in order to enhance
environmental clean-up efforts. It is anticipated that the first unit will
be completed in 1997.
Gross profit for the Instrument and Research and Development Businesses as
a percentage of sales for the quarter ended June 30, 1995 increased from
39.7% to 48.1% compared to the same quarter last year. The gross profit
percentage on research and development for the quarter ended June 30, 1995
increased from a negative 130.2% to 5.3% compared to the same quarter last
year. The gross profit percentage on instrument sales for the quarter
ended June 30, 1995 increased from 48.9% to 52.6% compared to the same
quarter last year. The improvement in the gross profit in the instrument's
segment was due primarily to an overall increase in unit sales of the
Company's Model 400 Ionscan and continued sales of its Model 350 Ionscan.
The Model 350 Ionscan inventory had been partially written down in 1994.
Selling, general and administrative expenses for the quarter ended June 30,
1995 decreased by $87,000, or 11.5%, over the comparable period last year.
Selling and marketing expenses increased by $70,000 or 19.0% due to
increased commissions on higher unit sales and costs associated with the
Barringer DrugAlert System marketing program. General and administrative
expenses decreased by $157,000 or 40.3% due primarily to the settlement of
legal expenses with the Company's prior outside legal counsel. The Company
continues to closely monitor its expenses.
Unfunded research and development expense, primarily applied to the
Company's IONSCAN[r] technology, decreased by $38,000 or 35.2%. As resources
are required for funded projects, unfunded research and development can
fluctuate quarter to quarter.
Interest expense increased by $11,000 due to higher levels of borrowings
and increased interest rates.
Other expense, net of income, in the quarter ended June 30, 1995 was
$43,000 as compared to other income, net of expense, of $89,000 for the
same period last year. The major reason for the $132,000 unfavorable
variance was due to a foreign exchange gain of $90,000 for the quarter
ended June 30, 1994 against a foreign exchange loss of $50,000 for the
comparable quarter this year.
Income (loss) from continuing operations was a profit of $13,000 for the
quarter ended June 30, 1995 as compared to a loss of $339,000 for the
comparable quarter last year. Increased unit sales in the instrument
business, as well as increased sales and improved margins in the research
and development business and the favorable adjustment of legal fees all
contributed to the improved results.
Income from operations held for sale for the quarter ended June 30, 1995 of
$54,000 is compared to a loss from operations held for sale of $36,000 for
the comparable quarter last year. The improvement was due to the increased
volume of sales.
Six Months Ended June 30, 1995 Compared to Six Months Ended June 30, 1994
This analysis should be read in conjunction with the analysis of the second
quarter appearing above which contains additional information.
Instrument sales for the six months ended June 30, 1995 decreased by
$1,195,000 or 33.3%, over the same period last year. During this period
last year, the Company was completing work on its Eurotunnel contract,
which contributed greatly to sales. The Company substantially completed
the Eurotunnel contract in April 1995.
Sales of the research and development business for the six months ended
June 30, 1995 increased by $599,000, or 521%, compared to the same period
last year. The increase was the result of commencing work on a Cdn.
$1,967,000 contract that was awarded to the Company in late 1994. The
contract was for the design and construction of an airborne laser-
fluorosensor system to precisely monitor the proliferation of oil spills in
order to enhance environmental clean-up efforts. It is anticipated that
the first unit will be completed in 1997.
Gross profit for the Instrument and Research and Development Businesses as
a percentage of sales for the six months ended June 30, 1995 decreased from
42.4% to 39.2% compared to the same period last year. The gross profit
percentage on research and development for the six months ended June 30,
1995 increased from a negative 69.6% to 4.8% compared to the same period
last year. The gross profit percentage on instrument sales for the six
months ended June 30, 1995 increased from 46.0% to 49.4% compared to the
same period last year. The improvement in the gross profit in the
instrument's segment was due primarily to increased unit sales and
maintaining higher sales prices on the discontinued Model 350 which was
partially written down in 1994.
Selling, general and administrative expenses for the six months ended June
30, 1995 decreased by $97,000, or 6.9%, over the comparable period last
year. Selling and marketing expenses increased by $90,000 or 13.7% due to
increased commissions on higher unit sales and costs associated with the
Barringer DrugAlert System marketing program. General and administrative
expenses decreased by $187,000 or 25.3% due primarily to the settlement of
legal expenses with the Company's prior outside legal counsel. The Company
continues to closely monitor its expenses.
Unfunded research and development, primarily applied to IONSCAN[r]
technology, decreased by $70,000 or 40.2%. As resources are required for
funded projects, unfunded research and development can fluctuate period to
period.
Interest expense increased by $27,000 due to higher levels of borrowings
and increased interest rates.
Other expense, net of income, for the six months ended June 30, 1995 was
$48,000 as compared to other income, net of expense, of $106,000 for the
same period last year. The major reason for the $154,000 unfavorable
variance was due to a foreign exchange gain of $112,000 for the six months
ended June 30, 1994 against a foreign exchange loss of $55,000 for the
comparable period this year.
Income (loss) from continuing operations was a loss of $356,000 for the six
months ended June 30, 1995 as compared to a profit of $11,000 for the
comparable period last year. The poor performance in the first quarter of
1995 due to reduced unit sales, coupled with the large swing from foreign
exchange gains to losses, were the contributing factors to the loss for
this six month period.
Income from operations held for sale for the six months ended June 30, 1995
of $55,000 is compared to a loss from operations held for sale of $19,000
for the comparable period last year. The improvement was due to the
increased volume of sales.
Capital Resources and Liquidity
Operating Activities
The Company's reduced level of sales activity during the year ended
December 31, 1994 and the first quarter of 1995 and the resultant losses of
$2,565,000 and $368,000, respectively, resulted in a severe cash shortage
during the last half of 1994 and during the first quarter of 1995. The
Company has cut operating expenses and restructured its payments to
suppliers to conserve cash. The return to profitability for the three
month period ended June 30, 1995 was not sufficient to eliminate the
problem. Accordingly, the Company continues to monitor its expenses and
restructure payments to suppliers.
On March 28, 1995, the Company introduced a new consumer product, an in-
home drug detection and identification system available to consumers, that
will allow them to determine the presence of illicit drugs from the sampled
areas. The Company has received a substantial number of requests from
individuals wishing to market the product on behalf of the Company. The
Company is presently evaluating those requests and has hired a product
manager to assist in that effort as well as to develop and execute a
marketing plan. In addition, the Company has prepared a 60 second
commercial which it anticipates airing in certain markets commencing late
in the third quarter of 1995. However, no assurances can be given that
markets for this product will, in fact, develop or as to the timing
thereof.
Financing Activities
The Company has issued an interest bearing note to Labco in the amount of
$452,000, which is currently due December 31, 1995 (the "Labco Note"). At
December 31, 1994, the Company was in arrears on its interest payments
pursuant to the Labco Note in the approximate amount of $18,000. In early
1995, Labco agreed to extend the due date on the Labco Note from May 31,
1995 to December 31, 1995, in exchange for which, on April 7, 1995, the
Company issued to Labco a warrant which currently represents the right to
purchase 25,000 shares of Common Stock at $1.00 per share, which warrant
expires on April 6, 1997. At that time, the Company agreed that it would,
on June 30, 1995, pay to Labco the accrued interest, including past due
amounts on the Labco Note, which amounts have been paid in full. The
Company intends to repay the principal of the Labco Note on or before the
amended due date from the sale of its 47% interest in Labco and/or the
proceeds from sales of the Company's securities. If the Company is unable
to pay to Labco the principal amount of the Labco Note when due, the
Company presently intends to negotiate an extension of time during which to
pay such principal. If the Company is unable to repay such principal when
due and is unsuccessful in obtaining an extension of time during which to
pay the principal, the Company could lose its investment in Labco.
Pursuant to the terms of the line of credit arrangement Labco entered into
with a commercial lender, Labco is prohibited from transferring funds to
the Company in the form of dividends, loans or advances or repayments.
At June 30, 1995, the amounts outstanding under BRL's line of credit with the
Bank exceeded the amount available thereunder. The Company has sought an
extension of time from the Bank in which to come into compliance with the
applicable borrowing formulas and has had a number of discussions with the
Bank in this regard. However, no agreement has been reached with the
Bank as of the date hereof as to the terms of any such extension. The
Company believes that any such extension will be conditioned upon, among
other things, the granting of additional collateral to the Bank to further
secure the obligations owed to the Bank. The line of credit is currently
guaranteed by the Company and BII. No assurance can be given that the
Company will obtain an extension of time from the Bank (or as to the terms
of any such extension) or as to what actions the Bank may take as a result
of the Company's failure to comply with the terms of the line of credit.
On May 9, 1995, the Company completed a private placement of its securities
to two institutional investors. The private placement consisted of 125
units priced at $6,000 each for an aggregate sales price of $750,000. Each
unit (a "Unit") consists of 10,000 shares of the Company's common stock and
a five year warrant to purchase 10,000 shares of the Company's common stock
at $.50 per share. In addition, in order to induce the institutional
investors to enter into this transaction, an additional three year warrant
to acquire 150,000 shares of the Company's common stock at $.50 per share
was issued. In another private placement on June 30, 1995, the Company
sold an additional 22 Units to seven of its Officers and Directors for
aggregate proceeds of $132,000 and sold an additional six Units to two
other private investors for aggregate proceeds of $36,000. The additional
Units did not contain the additional three year warrant contained in the
May 9, 1995 private placement. The Company has allocated a portion of the
proceeds for working capital purposes, principally for manufacturing the
Company's new Model 400 IONSCAN[r] and related sales and promotional
expenses, including up to $150,000 to develop a sales, marketing and
operational infrastructure to support sales of its new in-home drug
detection and identification system. The Company has used an additional
portion of the proceeds to repay the indebtedness to its bank described
below.
Investment Activities
Purchases of fixed assets for the six months ended June 30, 1995 were
approximately $216,000. The Company anticipates that for the balance of
1995 it will require approximately $100,000 in capital additions. The
funds required for this equipment would be provided by financing or
investment activities. The Company has no additional major commitments for
capital purchases at this time.
The Company's Canadian subsidiary has determined that its current facility
is no longer adequate for its purpose and accordingly has, as of July 29,
1995, signed a lease for a new, more modern, facility. Pursuant to the
terms of the new lease, as an incentive to enter into the lease, the
landlord will provide reimbursement for substantially all the expenses
incurred in the relocation. The new facility is in the same general
location as its existing facility. The lease on its existing facility,
which expires August 31, 1995, has been extended through September 1995.
The annual operating expenses under the new lease are substantially the
same as they would have been under a renewal of the existing lease.
Inflation
Inflation was not a material factor in either the sales or the operating
expenses of the Company during the periods presented herein.
OPERATION HELD FOR SALE
Quarter Ended June 30, 1995 Compared to Quarter Ended June 30, 1994
Sales of services for the three months ended June 30, 1995 of $1,647,000
represents an increase of $369,000 (28.9%) from the same period in 1994.
Labco's Environmental Division (the "Environmental Division") experienced
an increase in sales of $510,000 (88.8%) due to volume increases of
$295,000 from existing customers requesting radiochemical analysis and an
existing customer's special project which generated sales of $99,000 for
the three months ended June 30, 1995. Additional increases were due to
another customer's large project, which generated $56,000 in the three
months ended June 30, 1995 and volume increases of $60,000 from other
existing customers. Labco's Mineral Division (the "Mineral Division"),
which includes Mexico, experienced a decrease of $141,000 (70.2%) due to
customer volume decreases caused by severe wet weather in the Sierra
Mountains of California and Nevada in April and May 1995. Additionally,
there were 1995 volume decreases relating to non-recurring 1994 sales of
$105,000 from two special projects. These decreases were offset by sales
in Mexico of $156,000 for the three months ended June 30, 1995, compared to
no sales in Mexico for the same period in 1994. Mineral Division sales
continue to increase, but are still below 1994 levels.
Gross profit as a percentage of sales for the three months ended June 30,
1995 was 30.7%, as compared to 12.8% for the same period in 1994. This
increase was primarily due to a higher level of Environmental Division
sales resulting in greater production efficiencies and fixed costs
allocated over a larger sales base.
Selling and general and administrative expenses for the three months ended
June 30, 1995 of $339,000 increased by $18,000 (5.6%) from the same period
in 1994 primarily due to higher expenses for travel, director fees and
professional fees.
Other expenses for the three months ended June 30, 1995 was $52,000 as
compared to other income of $81,000 for the same period in 1994. In the
1994 period, there was a net recovery from a contingency reserve relating
to the prior sale of Labco's Canadian subsidiary. The 1995 expenses were
primarily related to foreign exchange losses on the Mexican operation and a
non-recurring charge due to hazardous waste disposal.
The net income (including transactions with the Company) for the three
months ended June 30, 1995 was $115,000 as compared to a net loss of
$76,000 for the same period last year. This increase of $191,000 was
primarily due to a higher level of Environmental Division sales, production
efficiencies, and fixed costs allocated over a larger sales base, offset by
higher general and administrative expenses, and the non-recurring other
expense.
Six Months Ended June 30, 1995 Compared to Six Months Ended June 30, 1994
Sales of services for the six months ended June 30, 1995 of $3,089,000
represents an increase of $259,000 (9.2%) from the same period in 1994.
The Environmental Division experienced an increase of $603,000 (40.8%) due
to volume increases of $251,000 from existing customers and an existing
customer's large project which generated sales of $254,000 for the six
month period ended June 30, 1995. Additionally, there was another
customer's special project, which generated $102,000 for the six months
ended June 30, 1995. The Mineral Division, which includes Mexico,
experienced a decrease of $344,000 (25.5%) due to customer volume decreases
in the first five months of 1995 caused by severe weather in their
operating area. Additionally, there were 1995 volume decreases related to
non-recurring 1994 sales of $193,000 from two special one time projects.
These decreases were offset by sales in Mexico of $220,000 for the six
months ended June 30, 1995 compared to no sales in Mexico for the same
period in 1994.
Gross profit as a percentage of sales for the six months ended June 30,
1995 was 28.1% as compared to 19.8% for the same period in 1994. This
increase was primarily due to a higher level of Environmental Division
sales, production efficiencies and fixed costs allocated over a larger
sales base.
Operating expenses for the six months ended June 30, 1995 of $689,000
increased by $26,000 (3.9%) from the same period in 1994 primarily due to
higher general and administrative expenses (travel, director fees and
professional fees).
Other expense for the six months ended June 30, 1995 was $60,000 as
compared to other income of $64,000 for the same period in 1994. In the
1994 period, there was a net recovery from a contingency reserve relating
to the prior sale of Labco's Canadian subsidiary. The 1995 expenses were
primarily related to foreign exchange losses on the Mexican operation and a
non-recurring charge due to hazardous waste disposal.
Net income (including transactions with the Company) for the six months
ended June 30, 1995 was $118,000 as compared to a net loss of $40,000 for
the same period in 1994. This increase of $158,000 was primarily due to a
higher level of Environmental Division sales, production efficiencies, and
fixed costs allocated over a larger sales base, offset by higher general
and administrative expenses, and the non-recurring other expense.
Capital Resources and Liquidity
Cash totaled $92,000 at June 30, 1995, compared with $39,000 at December
31, 1994. The $53,000 increase in cash resulted from cash provided by
operating activities of $199,000, which was offset by cash used in
investing activities of $78,000 and net cash used in financing activities
of $68,000 primarily for the reduction of long-term debt.
Cash used for purchase of property and equipment consisted of $78,000 for
lab equipment.
Labco has a working line of credit from a lending institution. This line
of credit is equal to 80% of Labco's eligible accounts receivable. This
line of credit funds Labco's current working capital requirements and has
also been used to guarantee a $150,000 letter of credit required by the
Colorado Department of Health to increase the level of Labco's
Radiochemistry License. This increase in the license gives Labco the
ability to increase the radiochemistry analytical business. Labco's
management believes that the existing line of credit agreement is adequate
to meet Labco's working capital requirements for the next 12 months.
Inflation
Inflation was not a material factor during the periods presented.
PART II -- OTHER INFORMATION
Item 6 Exhibits and Reports on Form 8-K
(a) Exhibits.
4.17 Unit Purchase Agreement and Forms of
Warrant Agreements by and between the
Company, Special Situations Fund III,
L.P. and Special Situations Cayman
Fund, L.P. dated May 9, 1995.
4.18 Form of Warrant Agreement by and
between the Company and Ontario
Development Corporation.
4.19 Form of Subscription Agreement and
Form of Warrant Agreement by and
between the Company and each of
Stanley S. Binder, John H. Davies,
Richard S. Rosenfeld, Helene Hollub,
Adam Street Joint Venture, Richard D.
Condon, John J. Harte, John D.
Abernathy and James C. McGrath.
4.20 Form of Warrant Agreement by and
between the Company and Barringer
Laboratories, Inc.
10.37 * Credit Facility between the Company
and the Toronto Dominion Bank
_________________
* Incorporated by reference to Exhibit 10.36 to the Company's Annual
Report on Form 10-K/A-1 for the fiscal year ended December 31, 1994,
File No. 0-3207.
(b) Reports on Form 8-K.
None.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.
BARRINGER TECHNOLOGIES INC.
(Registrant)
/s/ Stanley S. Binder
Stanley S. Binder
President
/s/ Richard S. Rosenfeld
Richard S. Rosenfeld
Vice President Finance, Chief Financial
Officer and Treasurer (Principal
Accounting and Principal Financial
Officer)
Date: August 21, 1995
INDEX TO EXHIBITS
Exhibit Number Page No.
4.17 Unit Purchase Agreement and Forms of
Warrant Agreements by and between the Company,
Special Situations Fund III, L.P. and Special
Situations Cayman Fund, L.P. dated
May 9, 1995.
4.18 Warrant Agreement by and between the
Company and Ontario Development
Corporation, dated as of September 20,
1994.
4.19 Form of Subscription Agreement and
Form of Warrant Agreement by and
between the Company and each of
Stanley S. Binder, John H. Davies,
Richard S. Rosenfeld, Helene Hollub,
Adam Street Joint Venture, Richard D.
Condon, John J. Harte, John D.
Abernathy and James C. McGrath.
4.20 Warrant Agreement by and between the
Company and Barringer Laboratories,
Inc. dated as of April 7, 1995.
EXHIBIT 4.17
UNIT PURCHASE AGREEMENT
THIS AGREEMENT, dated as of May 9, 1995, by and among BARRINGER
TECHNOLOGIES INC., a Delaware corporation (the "Company"), SPECIAL
SITUATIONS FUND III, L.P. (the "Fund") and SPECIAL SITUATIONS CAYMAN FUND,
L.P. (the "Cayman Fund" and collectively with the Fund, the "Purchasers",
and each, individually, a "Purchaser").
W I T N E S S E T H:
WHEREAS, in reliance upon the respective representations,
warranties, terms and conditions hereinafter set forth, the Purchasers
desire to purchase from the Company, and the Company desires to sell to the
Purchasers, an aggregate of 125 units (the "Units"), each Unit consisting
of 10,000 shares (collectively, the "Shares") of Common Stock, par value
$.01 per share ("Common Stock"), and a warrant (collectively, the
"Warrants") exercisable at any time prior to May 9, 2000 to purchase 10,000
shares of Common Stock (collectively, the "Warrant Shares") at an exercise
price (subject to adjustment as provided in the Warrants) of $.50 per
share, as hereinafter set forth.
NOW THEREFORE, in consideration of the foregoing and the
respective covenants hereinafter set forth, the Company and the Purchaser
hereby agree as follows:
1. Sale and Purchase of the Units.
(a) Subject to the terms and conditions of this
Agreement, the Company agrees to issue and sell to the Purchasers, and the
Purchasers agree to purchase from the Company at the Closing (as
hereinafter defined), 125 Units at a purchase price of $6000.00 per Unit,
for a total purchase price of $750,000 (the "Purchase Price"). 91.6667 of
such Units shall be purchased by the Fund for an aggregate Purchase Price
of $550,000.20 and 33.33 of such Units shall be purchased by the Cayman
Fund for an aggregate Purchase Price of $199,999.80.
(b) Subject to the terms and conditions of this
Agreement, as an inducement to enter into this transaction and purchase the
Units and for no additional payment by the Fund, the Company hereby issues
to the Fund and Cayman Fund the warrant (the "Special Warrant"),
exercisable at any time prior to May 9, 1998, to purchase 10,000 and 40,000
shares of Common Stock respectively at an exercise price (subject to the
adjustment as provided in the Special Warrant) of $.50 per share, in the
form attached as Exhibit D hereto. For purposes of Sections 3, 4, and 5 of
this Agreement, unless the context otherwise requires, the terms "Warrants"
and "Warrant Shares" shall be deemed to include the Special Warrant and the
Common Stock issued pursuant thereto, respectively.
(c) The sale and purchase of the Units shall take place
at the Company's offices at 219 South Street, New Providence, New Jersey
07974 at 10:00 a.m. on May 9, 1995, or at such other time and place as the
Company and the Purchasers shall agree (the "Closing").
2. Payment. At the Closing, the Purchasers shall make
payment for the Units in next-day funds by check or wire transfer to an
account previously designated by the Company. The Company shall deliver to
the Purchasers certificates representing the Shares and the Warrants
purchased by the Purchasers at the Closing. The Warrants shall be in
substantially the form attached hereto as Exhibit A.
3. Representations and Warranties of the Company. The
Company hereby represents and warrants to the Purchasers as follows:
(a) The Company has been duly organized, is validly
existing and is in good standing under the laws of the State of Delaware.
(b) The authorized capital of the Company consists of
20,000,000 shares of Common Stock, 1,000,000 shares of Convertible
Preferred Stock, par value $1.25 per share ("Convertible Preferred Stock"),
and 1,0000,000 shares of Preferred Stock, par value $2.00 per share, of
which 270,000 shares are designated as Class A Convertible Preferred Stock
("Class A Preferred Stock") and 730,000 shares are designated as Class B
Convertible Preferred Stock. There are 11,486,828 shares of Common Stock,
444,099 shares of Convertible Preferred Stock, 82,497 shares of Class A
Preferred Stock and 317,500 shares of Class B Preferred Stock presently
outstanding. In addition, there are warrants outstanding to purchase an
aggregate of 1,045,277 shares of Common Stock at exercise prices of between
$1.3125 and $4.37 per share, which warrants are exercisable at various
dates through January 12, 1999. All of the issued and outstanding shares
of the Company's capital stock are duly authorized, validly issued, fully
paid and nonassessable. All of such shares were offered, issued, sold and
delivered by the Company in compliance with all applicable state and
federal laws concerning the issuance of securities. None of such shares
were issued in violation of any pre-emptive or subscription rights of any
person.
(c) The Company has the full right, power and authority
to enter into this Agreement and to perform the transactions contemplated
herein. This Agreement has been duly executed by the Company and this
Agreement and the transactions contemplated herein have been duly
authorized by all necessary corporate action. This Agreement constitutes
the legal, valid and binding obligation of the Company, enforceable in
accordance with its terms, subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights and to general
equity principles.
(d) Issuance of the Shares has been duly authorized
and, when issued in accordance with the terms of this Agreement, the Shares
will be validly issued, fully paid and nonassessable.
(e) The Warrants have been duly authorized and, when
issued in accordance with the terms hereof, will have been duly executed,
issued and delivered and will constitute valid and legally binding
obligations of the Company, enforceable in accordance with their terms,
subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or
affecting creditors' rights and to general equity principles. The Company
has sufficient authorized and unissued shares of Common Stock reserved for
issuance upon the exercise of the Warrants in accordance with their terms.
Upon the due exercise of the Warrants, and the payment in full of the
exercise price therefor, the Warrant Shares will be duly authorized,
validly issued, fully paid and non-assessable.
(f) The Company is subject to the informational
requirements of the Securities Exchange Act of 1934, as amended, and the
applicable rules and regulations promulgated thereunder (the "Exchange
Act") and, in accordance therewith, files, reports and other information
with the Securities and Exchange Commission (the "Commission"). The
Company has filed with the Commission on a current and timely basis all
reports required to be filed by it under the Exchange Act, including the
Annual Report on Form 10-K for the year ended December 31, 1994 (as
amended, modified or supplemented as of the date hereof, the "Disclosure
Documents"). The information contained in the Disclosure Documents
described in all material respects the business and financial condition of
the Company as of their respective dates, and such documents did not, as of
their respective dates, contain 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. The accuracy and completeness
of the Disclosure Documents constitutes a material inducement to Purchasers
to purchase the Units.
(g) There has been no material adverse change in the
business, financial condition or earnings of the Company since December 31,
1994, except as described in the Disclosure Documents.
(h) The Company will use the net proceeds of the sale
of the Units for working capital purposes, principally for manufacturing
the Company's new Model 400 IONSCAN, and related sales and promotional
expenses. The Purchasers acknowledge that the Company currently intends to
use approximately $150,000 of such net proceeds to develop a sales,
marketing and operational infrastructure to support sales of its new in-
home drug detection and identification kit.
4. Representations and Warranties of the Purchasers.
The Fund and the Cayman Fund hereby jointly and severally
represent and warrant to the Company as follows:
(a) Each Purchaser is a limited partnership which is
duly organized, is validly existing and is in good standing under the laws
of the jurisdiction of its organization.
(b) Each Purchaser has the full right, power and
authority to enter into this Agreement and to carry out and consummate the
transactions contemplated herein. The Agreement has been duly executed by
each Purchaser and this Agreement and the transactions contemplated herein
have been duly authorized by all necessary partnership action. This
Agreement constitutes the legal, valid and binding obligation of each
Purchaser, enforceable in accordance with its terms, subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and similar
laws of general applicability relating to or affecting creditors' rights
and to general equity principles.
(c) Each Purchaser acknowledges that it has received
and reviewed the Disclosure Documents and has had an opportunity to meet
with and ask questions of and receive answers from the management of the
Company and its consultants, attorney and accountants regarding the
business and affairs of the Company, its financial condition and prospects
(financial and other) and the terms and conditions of the offering of the
Units.
(d) Each Purchaser is an Accredited Investor within the
meaning of Rule 501 of the rules and regulations of the Commission
promulgated under the Securities Act of 1933, as amended (the "Securities
Act"), has the financial ability to bear the economic risk of its
investment, can afford to sustain a complete loss of such investment and
has adequate means of providing for its current fiscal needs, has no need
for liquidity in its investment in the Company, and the amount invested in
the Company by such Purchaser does not constitute a substantial portion of
its net worth. Each Purchaser understands that in order to be treated as
an accredited investor it must meet one of the tests described in Exhibit B
to this Agreement, and each Purchaser represents and warrants to the
Company that it meets one of the tests indicated on said Exhibit B.
(e) Each Purchaser is acquiring the Shares and Warrants
constituting the Units for investment and not with a view to the sale or
distribution thereof, and is acquiring the Shares and Warrants constituting
the Units for its own account and not on behalf of others and has not
granted any other person any right or option or any participation or
beneficial interest in any of the Shares and Warrants constituting the
Units. Each Purchaser acknowledges its understanding that the Shares and
Warrants constituting the Units constitute restricted securities within the
meaning of Rule 144 promulgated under the Securities Act, and that none of
the Shares and Warrants constituting the Units may be sold except pursuant
to an effective registration statement under the Securities Act or in a
transaction exempt from registration under the Securities Act, and
acknowledges that it understands the meaning and effect of such
restriction. Each Purchaser has sufficient knowledge and experience in
financial and business affairs to evaluate the merits of the purchase of
the Shares and Warrants constituting the Units. Each Purchaser has
completed and executed a Confidential Purchaser Questionnaire, a copy of
which is attached hereto as Exhibit C which Questionnaire is true and
complete. EACH PURCHASER UNDERSTANDS THAT AN INVESTMENT IN THE UNITS BEING
PURCHASED BY IT INVOLVES A HIGH DEGREE OF RISK, INCLUDING WITHOUT
LIMITATION, RISKS RELATING TO THE COMPANY'S ABILITY TO CONTINUE AS A GOING
CONCERN, THE COMPANY'S CONTINUING OPERATING LOSSES, THE COMPANY'S NEED FOR
ADDITIONAL CAPITAL, THE COMPANY'S NEED FOR LIQUIDITY, THE EFFECTS OF THE
FAILURE OF THE COMPANY TO CONSUMMATE THE SALE OF ITS SUBSIDIARY, BARRINGER
LABORATORIES, INC., THE EFFECTS OF COMPETITION, THE COMPANY'S RELIANCE ON
KEY PERSONNEL, THE COMPANY'S DEPENDENCE ON TECHNOLOGY AND TECHNOLOGICAL
INNOVATION, THE LONG LEAD-TIMES ASSOCIATED WITH THE PURCHASING PRACTICES OF
GOVERNMENTAL AGENCIES WHICH ARE SUBSTANTIAL CUSTOMERS OF THE COMPANY, THE
RESTRICTIONS ON TRANSFER OF THE SHARES AND WARRANTS COMPRISING THE UNITS,
AS WELL AS SIMILAR RESTRICTIONS ON TRANSFERS OF THE WARRANT SHARES,
POTENTIAL CONFLICTS OF INTEREST AND RELATED PARTY TRANSACTIONS INVOLVING
THE COMPANY AND THE DIRECTORS AND OFFICERS OF THE COMPANY, AND THE
SUCCESSFUL CONSUMMATION OF THE COMPANY'S BUSINESS AND OPERATING STRATEGY.
(f) No Purchaser has been furnished any offering
literature, by the Company or otherwise, other than this Agreement and the
Disclosure Documents. Each Purchaser has relied only on the information
contained in the Disclosure Documents and this Agreement in its decision to
enter into this Agreement. Each Purchaser acknowledges and represents that
no representations or warranties have been made to it by the Company or its
directors, officers or any agents or representatives with respect to the
business of the Company, the financial condition or results of operations
of the Company and/or the economic, tax or any-other aspects or
consequences of the purchase of the Securities, and each Purchaser has not
relied upon any information concerning the Company, written or oral, other
than that contained in the Disclosure Documents and this Agreement.
(g) Each exercise of a Warrant by a Purchaser shall
constitute an affirmation by such Purchaser that the representations and
warranties contained herein are also true and correct with respect to the
Warrant Shares to be acquired by it upon the exercise of the related
Warrant.
5. Restrictions on Transferability; Compliance with
Securities Act.
(a) Transferability. The Shares and Warrants
constituting the Units and the Warrant Shares issuable upon the exercise of
the Warrants shall not be transferable except upon the conditions specified
in this Paragraph 5, which conditions are intended to insure compliance
with the provisions of the Securities Act in respect of the transfer of any
of such securities.
(b) Restrictive Legend. Any certificates or other
instrument representing the Shares, the Warrants or the Warrant Shares
shall (unless otherwise permitted by the provisions of Paragraph 5(c)
below) be stamped or otherwise imprinted with the following legend:
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR THE
SECURITIES LAWS OF ANY STATE AND CANNOT BE SOLD OR
TRANSFERRED UNLESS AND UNTIL THEY ARE SO
REGISTERED OR UNLESS AN EXEMPTION UNDER SUCH ACT OR
LAWS IS AVAILABLE. THE TRANSFERABILITY OF THESE
SECURITIES IS FURTHER SUBJECT TO THE PROVISIONS OF
A UNIT PURCHASE AGREEMENT DATED AS OF MAY ___, 1995
AMONG THE COMPANY, SPECIAL SITUATIONS FUND III,
L.P. AND SPECIAL SITUATIONS CAYMAN FUND, L.P.
For purposes of this Paragraph 5, any references to "Shares" "Warrants" or
"Warrant Shares" shall include any other securities issued in respect of
any of such securities.
(c) Restrictions on Transfer. The Shares, the Warrants
and the Warrant Shares shall not be transferred, and the Company shall not
be required to register any transfer thereof on the books of the Company,
unless such transfer is made pursuant to an effective registration
statement, in compliance with Rule 144, or pursuant to another exemption
under the Securities Act; provided, however, that the company shall not be
required to register any transfer in the event any securities are offered
or sold otherwise than pursuant to an effective registration statement or
pursuant to Rule 144 unless the Company shall have received an opinion of
counsel to the Purchasers, satisfactory in form and substance to the
Company in its sole discretion, that such transfer does not require
registration under the Securities Act or applicable state securities laws.
(d) The Company shall file a registration statement
with the Commission under the Securities Act by [90 days after date of the
Agreement] covering the Shares and the Warrant Shares, and use its best
efforts to cause such registration statement to become effective and to
keep such registration statement effective for a period of five years from
the date it is declared effective by the Commission. The Company shall not
be obligated to cause to become effective more than one registration
statement pursuant to which the Shares and the Warrant Shares may be sold
under this Paragraph 5(d). At any time and from time to time, each
Purchaser agrees, without further consideration, to take such actions and
to execute and deliver such documents as may be reasonably requested by the
Company in order to effectuate the purposes of this Paragraph 5, including,
without limitation, supplying information with respect to such Purchaser
that may be necessary or required for inclusion in the registration
statement. In the event that such information or other material requested
by the Company is not provided to the Company within a reasonable period of
time following delivery of written notice requesting such information, then
the Company's obligations under this Paragraph 5 shall be suspended until a
reasonable period of time after the Purchaser complies with such request.
(e) Additional Shares; Incidental Registration. The
provisions of Paragraph 5(d) notwithstanding, if at any time following the
issuance of the Units the Company proposes to register any of its equity
securities under the Securities Act on Form S-1, S-2, S-3, S-18 or any
other registration form at the time available on which the Shares and/or
Warrant Shares could be registered for sale (other than a registration
statement covering securities issuable pursuant to an employee benefit or
dividend reinvestment plan and other than a registration statement covering
securities issuable in a Rule 145 transaction), the Company shall on such
occasion give written notice to the Purchasers of its intention to do so.
Such written notice shall be given as promptly as possible after the
Company determines to file such a registration but in no event shall such
notice be given less than four weeks prior to the date of the filing of
such registration statement. Upon written request of any Purchaser given
within 15 days after receipt of any such notice (which request shall state
the intended method of disposition of the Shares and/or Warrant Shares by
such Purchaser), the Company will use its best efforts to cause the Shares
and/or Warrant Shares which such Purchaser has requested be registered, to
be registered under the Securities Act and under the same registration
statement proposed to be filed by the Company, all to the extent required
to permit the sale or the disposition (in accordance with the written
request of such Purchaser as aforesaid), by such Purchaser of the Shares
and/or Warrant Shares so registered; provided, however, that no such notice
shall be given and no Purchaser shall be entitled to have the Shares and/or
Warrant Shares included in such registration in the event that any
underwriter with respect to the offering which is the subject of such
registration statement determines, in its sole discretion, that the
inclusion of the Shares and/or Warrant Shares in the registration will be
detrimental to such offering.
(f) The Company will pay all expenses incurred in
complying with Paragraphs 5(d) and 5(e) hereof, including, without
limitation, all registration and filing fees (including all expenses
incident to filing with the National Association of Securities Dealers,
Inc.), printing expenses, reasonable fees and disbursements of counsel to
the Company, securities law and blue sky fees and expenses and the expenses
of any regular and special audits incident to or required by any such
registration. All underwriting discounts and selling commissions
applicable to the sales of the Shares and/or Warrant Shares, and any state
or federal transfer taxes payable with respect to the sales of the Shares
and/or Warrant Shares and all fees and disbursements of counsel for the
Purchasers, if any, in each case arising in connection with registration of
the Shares and/or Warrant Shares under Paragraphs 5(d) and 5(e) hereof,
shall be payable by the Purchasers.
(g) Indemnification. (i) In the event of any
registration under the Securities Act of the Shares and/or the Warrant
Shares pursuant to this Paragraph 5, the Company will indemnify and hold
harmless the Purchasers from and against all losses, claims, damages,
expenses or liabilities, joint or several, to which they may become subject
under the Securities Act, the Exchange Act and state securities and blue
sky laws, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue
statement of any material fact contained in any registration statement or
alleged untrue statement, under which such securities were registered under
the Securities Act, any preliminary prospectus or final prospectus
contained therein, 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 made therein in light
of the circumstances under which they are made, not misleading; or any
violation by the Company of the Securities Act, the Exchange Act or state
securities or blue sky laws applicable to the Company and relating to
action or inaction required of the Company in connection with such
registration or qualification under such state securities or blue sky laws;
and will reimburse the Purchasers for any legal or any other expenses
reasonably incurred by it 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 to any Purchaser to the extent
that any such loss, claim, damage or liability arises out of or is based
upon an untrue statement or omission made in such registration statement,
said preliminary prospectus or said final prospectus or said amendment or
supplement or any document incident thereto in reliance upon and in
conformity with written information furnished to the Company by or on
behalf of the Purchasers.
(ii) In the event of any registration of any of the
Shares and/or Warrant Shares under the Securities Act pursuant to this
Paragraph 5, the Purchasers will, jointly and severally, indemnify and hold
harmless the Company and each person, if any, who controls the Company
within the meaning of the Securities Act or the Exchange Act, each officer
of the Company who signs the registration statement and each director of
the Company from and against any and all such losses, claims, damages or
liabilities arising from any untrue statement in, or omission from, any
such registration statement, preliminary or final prospectus, amendment or
supplement or document incident thereto if the statement or omission in
respect of which such loss, claim, damage or liability is asserted was made
in reliance upon and in conformity with information furnished in writing to
the Company by or on behalf of any Purchaser for use in connection with the
preparation of such registration statement or prospectus or such amendment
or supplement thereof.
(iii) The reimbursements required by this Paragraph 5(g)
shall be made by periodic payments during the course of the investigation
or defense as and when bills are received or expenses incurred; provided,
however, that to the extent that an indemnified party receives periodic
payments for legal or other expenses during the course of an investigation
or defense, and such party subsequently received payment for such expenses
from any other parties to the proceeding, such payments shall be used by
the indemnified party to reimburse the indemnifying party for such periodic
payments. Any party which proposes to assert the right to be indemnified
under this Paragraph 5(g) will, promptly after receipt of notice of
commencement of any action, suit or proceeding against such party in
respect of which a claim is to be made against any indemnified party under
this paragraph 5(g), notify each such indemnifying party of the
commencement of such action, suit or proceeding, enclosing a copy of all
papers served, but the failure to so notify such indemnifying party of any
such action, suit or proceeding shall not relieve the indemnifying party
from any obligation which it may have to any indemnified party hereunder
unless and only to the extent that the indemnifying party is prejudiced by
said lack of notice. In case any such action, suit or proceeding shall be
brought against any indemnified party and it shall notify the indemnifying
party of the commencement thereof, the indemnifying party shall be entitled
to participate in and, to the extent that it shall wish, jointly with any
other indemnifying party similarly notified, to assume the defense thereof,
with counsel 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 expense, other than
reasonable costs of investigation subsequently incurred by such indemnified
party in connection with the defense thereof. The indemnified party shall
have the right to employ its own counsel in any such action, but the
reasonable fees and expenses of such counsel shall be at the expense of
such indemnified party, when and as incurred, unless (A) the employment of
counsel by such indemnified party has been authorized by the indemnifying
party, (B) the indemnified party has reasonably concluded (based on advice
of counsel), that there may be legal defenses available to it that are
different from or in addition to those available to the indemnifying party
(C) the indemnified party shall have reasonably concluded (based on advice
of counsel) that there may be a conflict of interest between the
indemnifying party and the indemnified party in the conduct of defense of
such action (in which case the indemnifying party shall not have the right
to direct the defense of such action on behalf of the indemnified party),
or (D) the indemnifying party shall not in fact have employed counsel to
assume the defense of such action. An indemnifying party shall not be
liable for any settlement or any action or claim effected without its
consent.
(h) Contribution. (i) If the indemnification provided
for in this Section 5 from the indemnifying party is unavailable to any
indemnified party hereunder in respect of any losses, claims, damages,
liabilities or expenses referred to therein, then the 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
losses, claims, damages, liabilities or expenses in such proportion as is
appropriate to reflect the relative fault of the indemnifying party and
indemnified parties in connection with the actions that resulted in such
losses, claims, damages, liabilities or expenses, as well as any other
relevant equitable considerations. The relative fault of such indemnifying
party and indemnified parties shall be determined by reference to, among
other things, whether any action in question, including any untrue or
alleged untrue statement of a material fact or omission or alleged omission
to state a material fact, has been made by, or relates to information
supplied by, such indemnifying party or indemnified parties, and the
parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such action. The amount paid or payable by a party
as a result of the losses, claims, damages, liabilities and expenses
referred to above shall be deemed to include, subject to the limitations
set forth in Section 5(g), any legal or other fees or expenses reasonably
incurred by such party in connection with any investigation or proceeding.
(ii) The parties hereto agree that it would not be just and
equitable if contribution pursuant to this Section 5(h) were determined by
pro rata allocation or by any other method of allocation that does not take
account of the equitable considerations referred to in the immediately
preceding paragraph. Notwithstanding any other provision hereof, in no
event shall the contribution obligation of any Purchaser be greater in
amount than the excess of (A) the dollar amount of the proceeds received by
such Purchaser upon the sale of the securities giving rise to such
contribution obligation over (B) the dollar amount of any damages that such
Purchaser has otherwise been required to pay by reason of the untrue or
alleged untrue statement or omission or alleged omission giving rise to
such obligation. No Person guilty or 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.
6. Board Representation. (a) So long as the Purchasers
continue to beneficially own an aggregate of at least 5% of the issued and
outstanding shares of Common Stock, the Purchasers shall have the right to
designate one individual to serve on the Board of Directors of the Company;
provided, however, that if the Purchasers cease at any time to beneficially
own an aggregate of at least 5% of the issued and outstanding shares of
Common Stock, the rights set forth in this Section 6 shall immediately
terminate and shall not re-vest if at any time thereafter the Purchasers
beneficially own an aggregate of 5% or more of the issued and outstanding
shares of Common Stock. After the Closing, promptly upon receipt of a
request by the Fund on behalf of the Purchasers, the Company shall take all
action necessary to increase the size of the Board of Directors by one
director and to appoint the person designated by the Purchasers to fill the
vacancy caused by such increase in the size of the Board of Directors. The
term of such designee shall continue until the next succeeding annual
meeting of shareholders of the Company and until his successor is duly
elected and qualified. Thereafter, so long as the Purchasers continue to
have the right to designate a member of the Company's Board of Directors
pursuant to this Section 6(a), the Company shall use its best efforts to
cause their designee or such other person designated by the Fund on behalf
of the Purchasers from time to time (who shall be reasonably satisfactory
to the Company) (the "Purchaser Representative") to be elected to the Board
of Directors of the Company at any succeeding annual meeting of the
shareholders of the Company or, if the election of directors occurs other
than pursuant to a meeting of shareholders, to otherwise effect the
election of the Purchaser Representative as a director.
(b) In the event that the Purchaser Representative
resigns, is unable to serve as a director or is removed, with or without
cause, the Fund on behalf of the Purchasers shall give written notice to
the Secretary of the Company designating a replacement Purchaser
Representative. Promptly upon receipt of such notice, the Company shall
use its best efforts to fill the resulting vacancy by causing the person
designated in the notice to be appointed to fill such vacancy.
(c) In the event that the Purchasers shall, at any
time, cease to beneficially own an aggregate of at least 5% of the issued
and outstanding Common Stock, the Purchaser Representative shall be deemed
to have resigned as a director effective as of the date the Purchasers'
aggregate beneficial ownership of Common Stock first falls below 5% and
shall cease to be a member of the Board of Directors; provided, that such
person's participation in the deliberations of the Board of Directors
subsequent to the date of his termination as a director shall not affect in
any respect any corporate action which has been approved by a majority of
the remaining members of the Board of Directors, whether at a meeting at
which a quorum of the Board of Directors (excluding the Purchaser
Representative for this purpose) was present or pursuant to a written
consent signed by the remaining directors
(d) As used herein, the term "beneficial owner" (and,
with correlative meanings, "beneficially own" and "beneficial ownership")
of any interest means a person or entity who, together with his or its
affiliates, is or may be deemed a beneficial owner of such interest for
purposes of Rule 13d-3 or 13d-5 under the Exchange Act or who, together
with his or its affiliates, has the right to become such a beneficial owner
of such interest (whether such right is exercisable immediately or only
after the passage of time) pursuant to any agreement, arrangement or
understanding, or upon the exercise, conversion or exchange of any warrant,
right or other instrument, or otherwise.
7. Shareholder Resolution. Unless otherwise consented to by
the Purchasers, the Company shall use its best efforts to cause the Board
of Directors of the Company to adopt a resolution recommending that the
shareholders of the Company approve a reverse stock split for the Common
Stock of at least one-for-four. The Company shall cause the resolution to
be submitted to a vote of the shareholders at the next annual meeting of
the shareholders of the Company, which shall be called and held no later
than September 30, 1995.
8. Brokerage. The Company represents and warrants to the
Purchasers that no broker, dealer or agent has been engaged in connection
with the transactions contemplated by this Agreement and the Company will
indemnify and save harmless the Purchasers from and against any and all
claims, expenses, liabilities or obligations with respect to brokerage or
finders' fees or commissions, or consulting fees in connection with the
transactions contemplated by this Agreement, asserted by any person on the
basis of any statement or representation alleged to have been made by the
Company.
9. Notices. All notices provided for in this Agreement shall
be in writing, signed by the party giving such notice, and delivered
personally or sent by overnight courier or messenger against receipt
thereof or sent by registered mail (air mail or overseas), return receipt
requested, or by telex, facsimile transmission, telegram or similar means
of communication. Notices shall be deemed to have been received on the
date of personal delivery, or if sent by certified or registered mail,
return receipt requested, shall be deemed to be delivered on the third
business day after the date of mailing. Notices shall be sent to the
following addresses.
If the Company:
Barringer Technologies Inc.
219 South Street
New Providence, N.J. 07974
Attention: Mr. Stanley S. Binder
Telephone: (908) 665-8200
Telecopier: (908) 665-8298
with a copy to:
Lowenstein, Sandler, Kohl, Fisher & Boylan
65 Livingston Avenue
Roseland; N.J. 07068
Attention: John D. Hogoboom, Esq.
Telephone: (201) 992-8700
Telecopier: (201) 992-5820
If to the Purchasers:
153 East 53rd Street, 51st Floor
New York, New York 10022
Attention: Mr. Austin Marxe
Telephone: (212) 832-5300
or to such other address as any party shall designate in the manner
provided in this Paragraph 9.
10. Miscellaneous.
(a) This Agreement shall be governed by and construed
in accordance with the laws of the State of New York, without giving effect
to its conflict of laws rules. Each of the parties hereto irrevocably
submits to the non-exclusive jurisdiction of the courts of the State of New
York and the United States District Court for the Southern District of New
York for the purpose of any suit, action, proceeding or judgment relating
to or arising out of this Agreement and the transactions contemplated
hereby. Service of process in connection with any such suit, action or
proceeding may be served on each party hereto anywhere in the world by the
same methods as are specified for the giving of notices under this
Agreement. Each of the parties hereto irrevocably consents to the
jurisdiction of any such court in any such suit, action or proceeding and
to the laying of venue in such court. Each party hereto irrevocably waives
any objection to the laying of venue of any such suit, action or proceeding
brought in such courts and irrevocably waives any claim that any such suit,
action or proceeding brought in any such court has been brought in an
inconvenient forum.
(b) This Agreement shall be binding upon and inure to
the benefit of the parties hereto, and their respective heirs, executors,
legal representatives, successors and permitted assigns.
(c) This Agreement represents the entire agreement
between the parties relating to the subject matter hereof, superseding any
and all prior or contemporaneous oral and prior written agreements,
understandings and letters of intent. This Agreement may not be modified
or amended nor may any right be waived except by a writing which expressly
refers to this Agreement, states that it is a modification, amendment or
waiver and is signed by all parties with respect to a modification or
amendment or the party granting the waiver with respect to a waiver. No
course of conduct or dealing and no trade, custom or usage shall modify any
provisions of this Agreement.
(d) The captions and headings contained herein are
solely for convenience of reference and do not constitute a part of this
Agreement.
(e) Unless the context otherwise requires, all
references to any gender Shall be deemed to include the masculine, feminine
or neuter gender, the singular shall include the plural and the plural
shall include the singular.
(f) In the event that any provision of this Agreement
becomes or is declared a court of competent jurisdiction to be illegal,
unenforceable or void, this Agreement shall continue in full force and
effect without said provision; provided, however, that no such severability
shall be effective if it materially changes the economic benefits of this
Agreement to any party.
(g) This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instruction.
IN WITNESS WHEREOF, the parties have executed this Agreement as
of the date and year first written above.
BARRINGER TECHNOLOGIES INC.
By: /s/ Stanley Binder
Stanley S. Binder
President
SPECIAL SITUATIONS FUND III, L.P.
By: /s/ Austin Marxe
Austin Marxe
Individual Managing Partner
SPECIAL SITUATIONS CAYMAN III, L.P.
By: AWM Investment Company.
Investment Adviser
By: /s/ Austin Marxe
Austin Marxe
President
FORM OF WARRANT AGREEMENT
EXHIBIT D
THE WARRANT REPRESENTED HEREBY AND THE SHARES OF COMMON STOCK
ISSUABLE UPON THE EXERCISE HEREOF HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR
THE SECURITIES LAWS OF ANY STATE AND CANNOT BE SOLD OR
TRANSFERRED UNLESS AND UNTIL THEY ARE SO REGISTERED OR UNLESS
AN EXEMPTION UNDER SUCH ACT OR LAWS IS AVAILABLE. THE
TRANSFERABILITY OF THE WARRANT REPRESENTED HEREBY AND THE
SHARES OF COMMON STOCK ISSUABLE UPON THE EXERCISE HEREOF IS
FURTHER SUBJECT TO THE PROVISIONS OF A STOCK PURCHASE AGREEMENT
DATED AS OF MAY __, 1995 AMONG THE COMPANY AND SPECIAL
SITUATIONS FUND III, L.P. AND SPECIAL SITUATIONS CAYMAN FUND,
L.P.
Warrant to
Purchase
_______ Shares
VOID AFTER MAY __, 1998
WARRANT TO PURCHASE
COMMON STOCK
OF
BARRINGER TECHNOLOGIES, INC.,
Incorporated Under the Laws of the State of Delaware
THIS IS TO CERTIFY that Special Situations Fund III, L.P. (the
"Warrantholder"), or its registered assigns, is entitled, subject to the
provisions of Section 4 hereof, upon the due exercise hereof and subject to
the terms and conditions hereof, as to the total number of shares
thereafter, until the close of business on May __, 1998, to purchase from
Barringer Technologies, Inc., a Delaware corporation (the "Company"), all
or any part of one hundred fifty thousand (150,000) fully paid and
nonassessable shares of Common Stock, par value $.01 per share ("Common
Stock"), of the Company, upon surrender hereof with the subscription form
attached hereto as Appendix "A", duly completed, at the office of the
Company or any transfer agent for the Company's Common Stock, and
simultaneous payment therefor in cash or by certified or official bank
check payable to the order of the Company in New York Clearing House funds,
at the purchase price of $0.50 per share (the "Warrant Purchase Price").
1. Term. Unless this Warrant is surrendered and payment made as
herein provided before the close of business on May __, 1998 (the
"Expiration Date"), this Warrant will become wholly void and all rights
evidenced hereby will terminated on the Expiration Date.
2. Warrant Exchange. This Warrant may be exchanged for a number
of Warrants of the same tenor as this Warrant for the purchase in the
aggregate of the same number of shares of Common Stock as are purchasable
upon the exercise of this Warrant, upon surrender hereof at the office of
the Company with written instructions as to the denominations of the
Warrants to be issued in exchange. If this Warrant is exercised for less
than all the shares purchasable upon the exercise hereof, the holder shall
be entitled to receive a new Warrant or Warrants of the same tenor as this
Warrant for the purchase in the aggregate of the number of shares in
respect of which this Warrant shall not have been exercised.
3. Anti-Dilution. The Warrant Purchase Price of $0.50 per share
will be subject to adjustment from time to time as hereinafter provided:
(a) General. In the event that the Company shall, at
any time or from time to time after the date hereof, issue any shares of
Common Stock or options, warrants, convertible securities or other rights
to acquire Common Stock other than pursuant to (i) the exercise of options,
warrants, convertible securities or other rights to acquire Common Stock
outstanding on the date hereof, (ii) a subdivision, consolidation or
reclassification of shares of Common Stock under subparagraph 3(b) hereof,
(iii) a merger or consolidation under subparagraph 3(c) hereof, (iv) a
dividend or other distribution on any class of stock under subparagraph
3(d) hereof, or (v) employee stock options outstanding on the date hereof
or issued hereafter pursuant to stock option plans of the Company or stock
purchase warrants outstanding on the date hereof, without consideration or
for a consideration per share less than the lesser of (x) the Warrant
Purchase Price in effect immediately prior to such issuance, or (y) the
then-fair market value per share of the Common Stock (as determined in good
faith by the Board of Directors of the Company), then, and thereafter
successively upon each such issuance, the Warrant Purchase Price in effect
immediately prior to the issuance of such shares shall forthwith be reduced
to a price (calculated to the nearest full cent) determined by dividing (a)
an amount equal to (i) the total number of shares of Common Stock
outstanding immediately prior to such issuance multiplied by the Warrant
Purchase Price in effect immediately prior to such issuance, plus (ii) the
consideration, if any, received by the Company upon such issuance by (b)
the total number of shares of Common Stock outstanding immediately after
such issuance. Upon any such adjustment of the Warrant Exercise Price as
provided above, this Warrant shall evidence the right to purchase that
number of shares of Common Stock (rounded to the nearest whole share)
obtained by multiplying the number of shares of Common Stock purchasable
immediately prior to such adjustment upon exercise of this Warrant by the
Warrant Exercise Price in effect immediately prior to such adjustment and
dividing the product so obtained by the Warrant Exercise Price in effect
immediately after such adjustment.
1. In case of the issuance of shares of Common Stock
or other securities of the Company for cash, the consideration
received by the Company therefor shall be deemed to be the cash
proceeds received by the Company therefor less any commissions or
other expenses paid or incurred by the Company for any underwriting
of, or otherwise in connection with, the issuance thereof.
2. In case of the issuance of shares of Common Stock
or other securities of the Company for a consideration other than
cash, or a consideration a part of which shall be other than cash,
the amount of the consideration received by the Company therefor
shall be deemed to be the cash proceeds, if any, received by the
Company plus the fair value of the consideration other than cash, as
determined by the Board of Directors of the Company less any
commissions or other expenses paid or incurred by the Company for any
underwriting of, or otherwise in connection with, such issuance,
provided, however that the amount of such consideration other than
cash shall in no event exceed the cost thereof as recorded on the
books of the Company.
3. In case of the issuance by the Company of (a) any
security that is convertible into or exchangeable for shares of
Common Stock or (b) any rights, warrants or options to purchase
shares of Common Stock, the Company shall be deemed to have issued
the maximum number of shares of Common Stock into which such
convertible or exchangeable securities may be converted or exchanged
or the maximum number of shares of Common Stock deliverable upon the
exercise of such rights, warrants or options, as the case may be, for
the consideration (determined as provided in subparagraph 1 and 2
above) received by the Company for such convertible or exchangeable
securities or for such rights or options, as the case may be, plus
the minimum aggregate consideration or adjustment payment to be
received by the Company in connection with the conversion or exchange
of such convertible or exchangeable securities, or the minimum
aggregate price at which shares of Common Stock are to be delivered
upon the exercise of such rights, warrants or options, as the case
may be. On the expiration of such rights, warrants or options or the
termination of such right to convert or exchange, the Warrant
Purchase Price hereunder shall be readjusted to such Warrant Purchase
Price as would have obtained had the adjustments made upon the
issuance of such rights, warrant or options, or convertible or
exchangeable securities, been made upon the basis of the delivery of,
and receipt of the consideration or adjustment payment, if any,
actually paid for, only the number of shares of Common Stock actually
delivered upon the exercise of such rights, warrants or options or
upon the conversion or exchange of such securities. Except as
provided in the next preceding sentence, no further adjustment of the
Warrant Purchase Price shall be made as a result of the actual
issuance of shares of Common Stock referred to in this subparagraph
C.
4. The consideration for any securities issued as a
stock dividend shall be deemed to be zero.
5. Irrespective of any adjustment or change in the
Warrant Purchase Price or the number of shares of Common Stock
actually purchasable under this or any other Warrant of like tenor,
the Warrants theretofore and thereafter issued may continue to
express the Warrant Purchase Price per share and the number of shares
purchasable thereunder as the Warrant Purchase Price per share and
the number of shares purchasable that were expressed upon the Warrant
when initially issued.
(b) Subdivision, Combination or Reclassification. If at any
time or from time to time the Company shall by subdivision, combination or
reclassification of shares, or otherwise change as a whole the outstanding
shares of Common Stock into a different number or class of shares, then in
each case the Warrant Exercise Price in effect immediately after the
effective date of such subdivision, combination or reclassification shall
be adjusted so that it shall equal the price determined by multiplying the
Warrant Exercise Price in effect immediately prior thereto by a fraction,
of which the numerator shall be the number of shares of Common Stock
outstanding immediately before such subdivision, combination or
reclassification, and of which the denominator shall be the number of
shares of Common Stock outstanding immediately after such subdivision,
combination or reclassification. Thereafter, this Warrant shall thereupon
evidence the right to purchase that number of shares of Common Stock
(rounded to the nearest whole share) obtained by multiplying the number of
shares of Common Stock purchasable immediately prior to such adjustment
upon exercise of this Warrant by the Warrant Exercise Price in effect
immediately prior to such adjustment and dividing the product so obtained
by the Warrant Exercise Price in effect immediately after such adjustment.
(c) Merger. If at any time while this Warrant is
outstanding, the Company shall consolidate with or merge into another
corporation, the holder hereof shall thereafter be entitled upon exercise
hereof to purchase, with respect to each share of Common Stock purchasable
hereunder (immediately prior to the date upon which such consolidation or
merger shall become affective), the securities or property to which a
holder of one share of Common Stock would have been entitled upon such
consolidation or merger immediately prior to the date upon which such
consolidation or merger became effective, without any change in, or payment
in addition to, the Warrant Purchase Price in effect immediately prior to
such merger or consolidation, and the Company shall take such steps in
connection with such consolidation or merger as may be necessary to assure
that all of the provisions of this Warrant shall thereafter be applicable,
as nearly as reasonably may be, in relation to any securities or property
thereafter deliverable upon the exercise of this Warrant. The Company
shall not effect any such consolidation or merger unless prior to the
consummation thereof the successor corporation (if other than the Company)
resulting therefrom shall assume by written instrument executed and mailed
to the registered holder hereof at the address of such holder shown on the
books of the Company, the obligation to deliver to such holder such
securities or property as in accordance with the foregoing provisions such
holder shall be entitled to purchase. A sale of all or substantially all
of the assets of the Company for a consideration (apart from the assumption
of obligations) consisting primarily of securities shall be deemed a
consolidation or merger for the foregoing purposes.
(d) Distributions. If the Company shall at any time or from
time to time (i) distribute (otherwise than as a dividend in cash) to the
holders of Common Stock, or grant any rights to such holders to acquire
assets without any consideration paid or to be paid by them or for a
consideration less than the fair market value of such assets, as determined
by the Board of Directors of the Company, or (ii) declare a dividend upon
the Common Stock (to the extent payable otherwise than in cash and out of
earnings or earned surplus, as indicated by the accounting treatment of
such dividend in the books of the Company), the Company shall reserve and
the holder of this Warrant shall thereafter upon exercise hereof be
entitled to receive, for each share of Common Stock purchasable hereunder
on the record date established by the Company for the determination of
holders of Common Stock entitled to receive such distribution, right or
dividend (or if no such record date shall have been established, on the
date of such distribution, grant of such right or payment of such
dividend), and without increase in (except in respect of the consideration,
if any, paid for such assets by shareholders), or payment in addition to,
the then current Warrant Exercise Price per share, (A) the amount of such
assets to which such right would have been granted to the holder hereof, or
(B) the amount of such dividend (to the extent thereof above stated) which
such holder would have received had he been a holder of one share of Common
Stock on such record (or other) date.
(e) Notice of Change. Upon the happening of any event
requiring an adjustment of the Warrant Purchase Price hereunder, the
Company shall forthwith give written notice thereof to the registered
holder of this Warrant stating the adjusted Warrant Purchase Price
resulting from such event and the number of shares of Common Stock (or
other securities and property) issuable upon the exercise of this Warrant,
setting forth in reasonable detail the method of calculation and the facts
upon which such calculation is based. In case any voluntary or involuntary
dissolution, liquidation or winding up of the Company shall at any time be
proposed, the Company shall give at least 20 days prior written notice
thereof to the registered holder hereof stating the date on which such
event is to take place and the date (which shall be at least 20 days after
the giving of such notice) as of which the holders of Common Stock of
record shall be entitled to exchange their Common Stock for securities or
other property deliverable upon such dissolution, liquidation or winding up
(on which date, in the event of such dissolution, liquidation or winding up
shall actually take place, this Warrant and all rights with respect hereto,
shall terminate). Notice pursuant to this paragraph shall be given by
first class mail, postage prepaid, addressed to the registered holder of
this Warrant at the address of such holder appearing in the records of the
Company.
(f) Definition of Common Stock. For the purpose of the
foregoing paragraphs (a) through (e), the term "Common Stock" shall include
all shares of Common Stock authorized by the Company's Certificate of
Incorporation, as from time to time amended, which are not limited to a
fixed sum or percentage of the par value in respect of the right of holders
thereof to participate in dividends or in the distribution of assets upon
the voluntary or involuntary dissolution or winding up of the Company;
provided, that the shares purchasable pursuant to this Warrant shall
include only shares of such class referred to in the first paragraph hereof
designated in the Company's Certificate of Incorporation as Common Stock on
the date of the original issue of this Warrant and shall not, in case of
any reorganization, reclassification, consolidation, merger or sale of
assets of the character referred to in subparagraph 3(b) or 3(c) hereof,
the stock, securities or assets provided for in such subparagraphs.
4. No Stockholder Rights. The holder of this Warrant shall not be
entitled to any rights of a stockholder of the Company in respect of any
shares purchasable upon the exercise hereof until such shares have been
paid for in full and issued to such holder. As soon as practicable after
such exercise, and in any event within 10 days thereafter, the Company
shall deliver a certificate or certificates for the number of all shares of
Common Shares issuable upon such exercise, all of which shall be validly
issued, fully paid and non-assessable, and free of all taxes, liens and
charges with respect to the issue thereof, to the person or persons
entitled to receive the same, provided, however, that unless the Company
shall receive an opinion of counsel satisfactory to it that such a legend
is not required in order to assure compliance with the Securities Act of
1933, as amended, such certificate delivered to the holder of the
surrendered Warrant shall bear a legend reading substantially as follows:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"ACT"), OR THE SECURITIES LAWS OF ANY STATE. THE SHARES HAVE
BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE SOLD OR TRANSFERRED
IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE
SHARES UNDER THE SECURITIES ACT OF 1933 OR AN OPINION OF
COUNSEL TO THE COMPANY THAT REGISTRATION IS NOT REQUIRED UNDER
SAID ACT.
5. Registration Under Securities Act. The holder of this Warrant
will be entitled to certain registration rights as set forth in a separate
agreement on file at the Company's principal offices.
6. Reservation of Stock Issuable Upon Exercise. The Company shall
at all times reserve and keep available out of its authorized but unissued
shares of Common Stock solely for the purpose of effecting the issuance of
the shares upon exercise of the Warrant, such number of its shares of
Common Stock as shall from time to time be sufficient to provide for the
exercise of this Warrant, and if at any time the number of authorized but
unissued shares of Common Stock shall not be sufficient to provide for the
exercise of this Warrant, the Company will, subject to the requirements of
applicable state law, take such corporate action as may, in the opinion of
its counsel, be necessary to increase its authorized but unissued shares of
Common Stock to such number of shares of Common Stock as shall be
sufficient for such purposes.
BARRINGER TECHNOLOGIES, INC.
By:
Dated: Title:________________________
ATTEST:
APPENDIX "A"
(To be executed by the registered holder
to exercise the right to purchase
Common Stock evidenced by the within Warrant)
To Barringer Technologies, Inc.:
The undersigned hereby irrevocably subscribes for _____________ shares of
your Common Stock pursuant to and in accordance with the terms and
conditions of this Warrant, and herewith makes payment of $________________,
therefor, and requests that a certificate for such shares be issued in
the name of the undersigned and be delivered to the undersigned at the
address stated below, and if said number of shares shall not be all of
the shares purchasable hereunder, that a new Warrant of like
tenor for the balance of the remaining shares purchasable hereunder be
delivered to the undersigned at the address stated below.
Dated: Signed:
Address:
FORM OF WARRANT AGREEMENT
THE WARRANT REPRESENTED HEREBY AND THE SHARES OF COMMON STOCK
ISSUABLE UPON THE EXERCISE HEREOF HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR
THE SECURITIES LAWS OF ANY STATE AND CANNOT BE SOLD OR
TRANSFERRED UNLESS AND UNTIL THEY ARE SO REGISTERED OR UNLESS
AN EXEMPTION UNDER SUCH ACT OR LAWS IS AVAILABLE. THE
TRANSFERABILITY OF THE WARRANT REPRESENTED HEREBY AND THE
SHARES OF COMMON STOCK ISSUABLE UPON THE EXERCISE HEREOF IS
FURTHER SUBJECT TO THE PROVISIONS OF A STOCK PURCHASE AGREEMENT
DATED AS OF MAY __, 1995 AMONG THE COMPANY AND SPECIAL
SITUATIONS FUND III, L.P. AND SPECIAL SITUATIONS CAYMAN FUND,
L.P.
Warrant to
Purchase
_______ Shares
VOID AFTER MAY __, 2000
WARRANT TO PURCHASE
COMMON STOCK
OF
BARRINGER TECHNOLOGIES, INC.,
Incorporated Under the Laws of the State of Delaware
THIS IS TO CERTIFY that _______________________ (the
"Warrantholder"), or its registered assigns, is entitled, subject to the
provisions of Section 4 hereof, upon the due exercise hereof and subject to
the terms and conditions hereof, as to the total number of shares
thereafter, until the close of business on May __, 2000, to purchase from
Barringer Technologies, Inc., a Delaware corporation (the "Company"), all
or any part of _______________ (_______) fully paid and nonassessable
shares of Common Stock, par value $.01 per share ("Common Stock"), of the
Company, upon surrender hereof with the subscription form attached hereto
as Appendix "A", duly completed, at the office of the Company or any
transfer agent for the Company's Common Stock, and simultaneous payment
therefor in cash or by certified or official bank check payable to the
order of the Company in New York Clearing House funds, at the purchase
price of $0.50 per share (the "Warrant Purchase Price").
1. Term. Unless this Warrant is surrendered and payment made as
herein provided before the close of business on May __, 2000 (the
"Expiration Date"), this Warrant will become wholly void and all rights
evidenced hereby will terminated on the Expiration Date.
2. Warrant Exchange. This Warrant may be exchanged for a number
of Warrants of the same tenor as this Warrant for the purchase in the
aggregate of the same number of shares of Common Stock as are purchasable
upon the exercise of this Warrant, upon surrender hereof at the office of
the Company with written instructions as to the denominations of the
Warrants to be issued in exchange. If this Warrant is exercised for less
than all the shares purchasable upon the exercise hereof, the holder shall
be entitled to receive a new Warrant or Warrants of the same tenor as this
Warrant for the purchase in the aggregate of the number of shares in
respect of which this Warrant shall not have been exercised.
3. Anti-Dilution. The Warrant Purchase Price of $0.50 per share
will be subject to adjustment from time to time as hereinafter provided:
(a) General. In the event that the Company shall, at
any time or from time to time after the date hereof, issue any shares of
Common Stock or options, warrants, convertible securities or other rights
to acquire Common Stock other than pursuant to (i) the exercise of options,
warrants, convertible securities or other rights to acquire Common Stock
outstanding on the date hereof, (ii) a subdivision, consolidation or
reclassification of shares of Common Stock under subparagraph 3(b) hereof,
(iii) a merger or consolidation under subparagraph 3(c) hereof, (iv) a
dividend or other distribution on any class of stock under subparagraph
3(d) hereof, or (v) employee stock options outstanding on the date hereof
or issued hereafter pursuant to stock option plans of the Company or stock
purchase warrants outstanding on the date hereof, without consideration or
for a consideration per share less than the lesser of (x) the Warrant
Purchase Price in effect immediately prior to such issuance, or (y) the
then-fair market value per share of the Common Stock (as determined in good
faith by the Board of Directors of the Company), then, and thereafter
successively upon each such issuance, the Warrant Purchase Price in effect
immediately prior to the issuance of such shares shall forthwith be reduced
to a price (calculated to the nearest full cent) determined by dividing (a)
an amount equal to (i) the total number of shares of Common Stock
outstanding immediately prior to such issuance multiplied by the Warrant
Purchase Price in effect immediately prior to such issuance, plus (ii) the
consideration, if any, received by the Company upon such issuance by (b)
the total number of shares of Common Stock outstanding immediately after
such issuance. Upon any such adjustment of the Warrant Exercise Price as
provided above, this Warrant shall evidence the right to purchase that
number of shares of Common Stock (rounded to the nearest whole share)
obtained by multiplying the number of shares of Common Stock purchasable
immediately prior to such adjustment upon exercise of this Warrant by the
Warrant Exercise Price in effect immediately prior to such adjustment and
dividing the product so obtained by the Warrant Exercise Price in effect
immediately after such adjustment.
1. In case of the issuance of shares of Common Stock
or other securities of the Company for cash, the consideration
received by the Company therefor shall be deemed to be the cash
proceeds received by the Company therefor less any commissions or
other expenses paid or incurred by the Company for any underwriting
of, or otherwise in connection with, the issuance thereof.
2. In case of the issuance of shares of Common Stock
or other securities of the Company for a consideration other than
cash, or a consideration a part of which shall be other than cash,
the amount of the consideration received by the Company therefor
shall be deemed to be the cash proceeds, if any, received by the
Company plus the fair value of the consideration other than cash, as
determined by the Board of Directors of the Company less any
commissions or other expenses paid or incurred by the Company for any
underwriting of, or otherwise in connection with, such issuance,
provided, however that the amount of such consideration other than
cash shall in no event exceed the cost thereof as recorded on the
books of the Company.
3. In case of the issuance by the Company of (a) any
security that is convertible into or exchangeable for shares of
Common Stock or (b) any rights, warrants or options to purchase
shares of Common Stock, the Company shall be deemed to have issued
the maximum number of shares of Common Stock into which such
convertible or exchangeable securities may be converted or exchanged
or the maximum number of shares of Common Stock deliverable upon the
exercise of such rights, warrants or options, as the case may be, for
the consideration (determined as provided in subparagraph 1 and 2
above) received by the Company for such convertible or exchangeable
securities or for such rights or options, as the case may be, plus
the minimum aggregate consideration or adjustment payment to be
received by the Company in connection with the conversion or exchange
of such convertible or exchangeable securities, or the minimum
aggregate price at which shares of Common Stock are to be delivered
upon the exercise of such rights, warrants or options, as the case
may be. On the expiration of such rights, warrants or options or the
termination of such right to convert or exchange, the Warrant
Purchase Price hereunder shall be readjusted to such Warrant Purchase
Price as would have obtained had the adjustments made upon the
issuance of such rights, warrant or options, or convertible or
exchangeable securities, been made upon the basis of the delivery of,
and receipt of the consideration or adjustment payment, if any,
actually paid for, only the number of shares of Common Stock actually
delivered upon the exercise of such rights, warrants or options or
upon the conversion or exchange of such securities. Except as
provided in the next preceding sentence, no further adjustment of the
Warrant Purchase Price shall be made as a result of the actual
issuance of shares of Common Stock referred to in this subparagraph
C.
4. The consideration for any securities issued as a
stock dividend shall be deemed to be zero.
5. Irrespective of any adjustment or change in the
Warrant Purchase Price or the number of shares of Common Stock
actually purchasable under this or any other Warrant of like tenor,
the Warrants theretofore and thereafter issued may continue to
express the Warrant Purchase Price per share and the number of shares
purchasable thereunder as the Warrant Purchase Price per share and
the number of shares purchasable that were expressed upon the Warrant
when initially issued.
(b) Subdivision, Combination or Reclassification. If at any
time or from time to time the Company shall by subdivision, combination or
reclassification of shares, or otherwise change as a whole the outstanding
shares of Common Stock into a different number or class of shares, then in
each case the Warrant Exercise Price in effect immediately after the
effective date of such subdivision, combination or reclassification shall
be adjusted so that it shall equal the price determined by multiplying the
Warrant Exercise Price in effect immediately prior thereto by a fraction,
of which the numerator shall be the number of shares of Common Stock
outstanding immediately before such subdivision, combination or
reclassification, and of which the denominator shall be the number of
shares of Common Stock outstanding immediately after such subdivision,
combination or reclassification. Thereafter, this Warrant shall thereupon
evidence the right to purchase that number of shares of Common Stock
(rounded to the nearest whole share) obtained by multiplying the number of
shares of Common Stock purchasable immediately prior to such adjustment
upon exercise of this Warrant by the Warrant Exercise Price in effect
immediately prior to such adjustment and dividing the product so obtained
by the Warrant Exercise Price in effect immediately after such adjustment.
(c) Merger. If at any time while this Warrant is
outstanding, the Company shall consolidate with or merge into another
corporation, the holder hereof shall thereafter be entitled upon exercise
hereof to purchase, with respect to each share of Common Stock purchasable
hereunder (immediately prior to the date upon which such consolidation or
merger shall become affective), the securities or property to which a
holder of one share of Common Stock would have been entitled upon such
consolidation or merger immediately prior to the date upon which such
consolidation or merger became effective, without any change in, or payment
in addition to, the Warrant Purchase Price in effect immediately prior to
such merger or consolidation, and the Company shall take such steps in
connection with such consolidation or merger as may be necessary to assure
that all of the provisions of this Warrant shall thereafter be applicable,
as nearly as reasonably may be, in relation to any securities or property
thereafter deliverable upon the exercise of this Warrant. The Company
shall not effect any such consolidation or merger unless prior to the
consummation thereof the successor corporation (if other than the Company)
resulting therefrom shall assume by written instrument executed and mailed
to the registered holder hereof at the address of such holder shown on the
books of the Company, the obligation to deliver to such holder such
securities or property as in accordance with the foregoing provisions such
holder shall be entitled to purchase. A sale of all or substantially all
of the assets of the Company for a consideration (apart from the assumption
of obligations) consisting primarily of securities shall be deemed a
consolidation or merger for the foregoing purposes.
(d) Distributions. If the Company shall at any time or from
time to time (i) distribute (otherwise than as a dividend in cash) to the
holders of Common Stock, or grant any rights to such holders to acquire
assets without any consideration paid or to be paid by them or for a
consideration less than the fair market value of such assets, as determined
by the Board of Directors of the Company, or (ii) declare a dividend upon
the Common Stock (to the extent payable otherwise than in cash and out of
earnings or earned surplus, as indicated by the accounting treatment of
such dividend in the books of the Company), the Company shall reserve and
the holder of this Warrant shall thereafter upon exercise hereof be
entitled to receive, for each share of Common Stock purchasable hereunder
on the record date established by the Company for the determination of
holders of Common Stock entitled to receive such distribution, right or
dividend (or if no such record date shall have been established, on the
date of such distribution, grant of such right or payment of such
dividend), and without increase in (except in respect of the consideration,
if any, paid for such assets by shareholders), or payment in addition to,
the then current Warrant Exercise Price per share, (A) the amount of such
assets to which such right would have been granted to the holder hereof, or
(B) the amount of such dividend (to the extent thereof above stated) which
such holder would have received had he been a holder of one share of Common
Stock on such record (or other) date.
(e) Notice of Change. Upon the happening of any event
requiring an adjustment of the Warrant Purchase Price hereunder, the
Company shall forthwith give written notice thereof to the registered
holder of this Warrant stating the adjusted Warrant Purchase Price
resulting from such event and the number of shares of Common Stock (or
other securities and property) issuable upon the exercise of this Warrant,
setting forth in reasonable detail the method of calculation and the facts
upon which such calculation is based. In case any voluntary or involuntary
dissolution, liquidation or winding up of the Company shall at any time be
proposed, the Company shall give at least 20 days prior written notice
thereof to the registered holder hereof stating the date on which such
event is to take place and the date (which shall be at least 20 days after
the giving of such notice) as of which the holders of Common Stock of
record shall be entitled to exchange their Common Stock for securities or
other property deliverable upon such dissolution, liquidation or winding up
(on which date, in the event of such dissolution, liquidation or winding up
shall actually take place, this Warrant and all rights with respect hereto,
shall terminate). Notice pursuant to this paragraph shall be given by
first class mail, postage prepaid, addressed to the registered holder of
this Warrant at the address of such holder appearing in the records of the
Company.
(f) Definition of Common Stock. For the purpose of the
foregoing paragraphs (a) through (e), the term "Common Stock" shall include
all shares of Common Stock authorized by the Company's Certificate of
Incorporation, as from time to time amended, which are not limited to a
fixed sum or percentage of the par value in respect of the right of holders
thereof to participate in dividends or in the distribution of assets upon
the voluntary or involuntary dissolution or winding up of the Company;
provided, that the shares purchasable pursuant to this Warrant shall
include only shares of such class referred to in the first paragraph hereof
designated in the Company's Certificate of Incorporation as Common Stock on
the date of the original issue of this Warrant and shall not, in case of
any reorganization, reclassification, consolidation, merger or sale of
assets of the character referred to in subparagraph 3(b) or 3(c) hereof,
the stock, securities or assets provided for in such subparagraphs.
4. No Stockholder Rights. The holder of this Warrant shall not be
entitled to any rights of a stockholder of the Company in respect of any
shares purchasable upon the exercise hereof until such shares have been
paid for in full and issued to such holder. As soon as practicable after
such exercise, and in any event within 10 days thereafter, the Company
shall deliver a certificate or certificates for the number of all shares of
Common Shares issuable upon such exercise, all of which shall be validly
issued, fully paid and non-assessable, and free of all taxes, liens and
charges with respect to the issue thereof, to the person or persons
entitled to receive the same, provided, however, that unless the Company
shall receive an opinion of counsel satisfactory to it that such a legend
is not required in order to assure compliance with the Securities Act of
1933, as amended, such certificate delivered to the holder of the
surrendered Warrant shall bear a legend reading substantially as follows:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"ACT"), OR THE SECURITIES LAWS OF ANY STATE. THE SHARES HAVE
BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE SOLD OR TRANSFERRED
IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE
SHARES UNDER THE SECURITIES ACT OF 1933 OR AN OPINION OF
COUNSEL TO THE COMPANY THAT REGISTRATION IS NOT REQUIRED UNDER
SAID ACT.
5. Registration Under Securities Act. The holder of this Warrant
will be entitled to certain registration rights as set forth in a separate
agreement on file at the Company's principal offices.
6. Reservation of Stock Issuable Upon Exercise. The Company shall
at all times reserve and keep available out of its authorized but unissued
shares of Common Stock solely for the purpose of effecting the issuance of
the shares upon exercise of the Warrant, such number of its shares of
Common Stock as shall from time to time be sufficient to provide for the
exercise of this Warrant, and if at any time the number of authorized but
unissued shares of Common Stock shall not be sufficient to provide for the
exercise of this Warrant, the Company will, subject to the requirements of
applicable state law, take such corporate action as may, in the opinion of
its counsel, be necessary to increase its authorized but unissued shares of
Common Stock to such number of shares of Common Stock as shall be
sufficient for such purposes.
BARRINGER TECHNOLOGIES, INC.
By:
Dated: Title:________________________
ATTEST:
APPENDIX "A"
(To be executed by the registered holder
to exercise the right to purchase
Common Stock evidenced by the within Warrant)
To Barringer Technologies, Inc.:
The undersigned hereby irrevocably subscribes for _____________ shares of
your Common Stock pursuant to and in accordance with the terms and
conditions of this Warrant, and herewith makes payment of
$______________________, therefor, and requests that a certificate for such
shares be issued in the name of the undersigned and be delivered to the
undersigned at the address stated below, and if said number of shares shall
not be all of the shares purchasable hereunder, that a new Warrant of like
tenor for the balance of the remaining shares purchasable hereunder be
delivered to the undersigned at the address stated below.
Dated: Signed:
Address:
EXHIBIT 4.18
The Warrant represented hereby and the shares of Common Stock issuable upon
the exercise hereof have not been registered under the securities Act of
1933, as amended (the "Act") or the securities laws of any state and cannot
be sold or transferred unless and until they are so registered or unless an
exemption under the Act and such laws is available.
Warrant to Purchase:
25,000 Shares of Common
Stock, $.01 par value
ODC-1
WARRANT TO PURCHASE
COMMON STOCK
OF
BARRINGER TECHNOLOGIES INC.
THIS IS TO CERTIFY that the ONTARIO DEVELOPMENT CORPORATION (the
"Warrantholder"), or its assigns, is entitled, upon the due exercise hereof
and subject to the terms and conditions hereof, to purchase from Barringer
Technologies Inc., a Delaware corporation (the "Company"), all or any part
of twenty-five thousand (25,000) fully paid and nonassessable shares of
Common Stock, par value $.01 per share, of the Company ("Common Stock"),
upon presentation and surrender of the Warrant together with the
subscription form attached hereto as Appendix "A", duly completed and duly
executed, at the principal office of the Company, 219 South Street, New
Providence, New Jersey 07974, Att: Chief Financial Officer, and
simultaneous payment therefor in cash or by certified or official bank
check payable to the order of the Company at the purchase price of One
dollar and thirty-one and one-quarter cents (US$1.3125) per share (the
"Warrant Purchase Price").
1. Term. Unless this Warrant is surrendered and payment made as
herein provided before the earlier of 90 days after repayment of all
amounts owing pursuant to the loan agreement between Barringer Research Ltd
and Ontario Development Corporation dated September 20, 1994, or three
years from September 20, 1994 (both dates hereinafter referred to as the
"Expiration Date"), the Warrant will become wholly void and all rights
evidenced hereby will terminate on the Expiration Date.
2. Warrant Exchange. This Warrant may be exchanged for a number of
Warrants of the same tenor as this Warrant for the purchase in the
aggregate of the same number of shares of Common Stock as are purchasable
upon the exercise of this Warrant, upon surrender hereof at the office of
the Company with written instructions as to the denominations of the
Warrants to be issued in exchange. If this Warrant is exercised for less
than all the shares purchasable upon the exercise hereof, the holder shall
be entitled to receive within 10 days of the surrender of the warrant, a
new Warrant or Warrants of the same tenor as this Warrant for the purchase
in the aggregate of the number of shares in respect of which this Warrant
shall not have been exercised.
3. (a) Subdivision, Consolidation, Reclassification If at any time
or from time to time the Company shall by subdivision, consolidation or
reclassification of shares, or otherwise change as a whole the outstanding
shares of Common Stock into a different number or class of shares, the
number and class of shares as so changed shall, for the purpose of this
Warrant and the terms and conditions hereof, replace the shares outstanding
immediately prior to such change and the Warrant purchase Price in effect,
and the number of shares purchasable under this Purchase Warrant,
immediately prior to the date on which such change shall become effective,
shall be proportionately adjusted.
(b) Merger. If at any time while this Warrant is outstanding
the Company shall consolidate with or merge into another corporation, the
holder hereof shall thereafter be entitled upon exercise hereof to
purchase, with respect to each share of Common Stock purchasable hereunder
(immediately prior to the date upon which such consolidation or merger
shall become effective), the securities or property to which a holder of
one share of Common Stock would have been entitled upon such consolidation
or merger immediately prior to the date upon which such consolidation or
merger became effective, without any change in, or payment in addition to,
the Warrant Purchase Price in effect immediately prior to such merger or
consolidation, and the Company shall take such steps in connection with
such consolidation or merger as may be necessary to assure that all of the
provisions of this Warrant shall thereafter be applicable, as nearly as
reasonably may be, in relation to any securities or property thereafter
deliverable upon the exercise of this Warrant. The Company shall not
effect any such consolidation or merger unless prior to the consummation
thereof the successor corporation (if other than the Company) resulting
therefrom shall assume by written instrument executed and mailed to the
registered holder hereof at the address of such holder shown on the books
of the Company, the obligation to deliver to such holder such securities or
property as in accordance with the foregoing provisions such holder shall
be entitled to purchase. A sale of all or substantially all of the assets
of the Company for a consideration (apart from the assumption or
obligations) consisting primarily of securities shall be deemed a
consolidation or merger for the foregoing purposes.
(c) Distributions. If the Company shall at any time or from
time to time (a) distribute (otherwise than as a dividend in cash) to the
holders of Common Stock, or grant any rights to such holders to acquire
assets without any consideration paid or to be paid by them or for a
consideration less than the fair market value of such assets, as determined
by the Board of Directors of the Company, or (b) declare a dividend upon
the Common Stock (to the extent payable otherwise than in cash and out of
earnings or earned surplus, as indicated by the accounting treatment of
such dividend in the books of the Company), the Company shall reserve and
the holder of the Warrant shall thereafter upon exercise hereof, be
entitled to receive, for each share of Common Stock purchasable hereunder
on the record date established by the Company for the determination of
holders of Common Stock entitled to receive such distribution, right or
dividend (or if no such record date shall have been established, on the
date of such distribution, grant of such right or payment of such
dividend), and without increase in (except in respect of the consideration,
if any, paid for such assets by shareholders), or payment in addition to,
the then current Warrant purchase price per share, (i) the amount of such
assets to which such right would have been granted to the holder hereof, or
(ii) the amount of such dividend (to the extent thereof above stated) which
such holder would have received had he been a holder of one share of Common
Stock on such record (or other) date.
(d) Notice of Change. Upon the happening of any event
requiring an adjustment of the Warrant Purchase Price hereunder, the
Company shall forthwith give written notice thereof to the registered
holder of this Warrant stating the adjusted Warrant Purchase Price
resulting from such event and setting forth in reasonable detail the method
of calculation and the facts upon which such calculation is based. In case
any voluntary or involuntary dissolution, liquidation or winding up of the
Company shall at any time be proposed, the Company shall give at least
twenty (20) days prior written notice thereof to the registered holder
hereof stating the date on which such event is to take place and the date
(which shall be at least twenty (20) days after the giving of such notice)
as of which the holders of Common Stock of record shall be entitled to
exchange their Common Stock for securities or other property deliverable
upon such dissolution, liquidation or winding up (on which date, in the
event of such dissolution, liquidation or winding up shall actually take
place, this Warrant and all rights with respect hereto, shall terminate).
Notice pursuant to this paragraph shall be given by first class mail.
postage prepaid, addressed to the registered holder of this Warrant at the
address of such holder appearing in the records of the Company.
(e) For the purpose of the foregoing paragraphs (a) through
(d) the term "Common Stock" shall include all shares of Common Stock
authorized by the Company's Certificate of Incorporation, as from time to
time amended, which are not limited to a fixed sum or percentage of the par
value in respect of the right of holders thereof to participate in
dividends or in the distribution of assets upon the voluntary or
involuntary dissolution or winding up of the Company; provided, that the
shares purchasable pursuant to this Warrant shall include only shares of
such class referred to in the first paragraph hereof designated in the
Company's Certificate of Incorporation as Common Stock on the date of the
original issue of this Warrant and shall not, in the case of any
reorganization, reclassification, consolidation, merger or sale of assets
of the character referred to in subparagraph 3(a) or 3(b) hereof, the
stock, securities or assets provided for in such subparagraph
4. No Stockholder Rights. No holder of this Warrant shall be
entitled to any rights of a stockholder of the Company in respect of any
shares purchasable upon the exercise hereof until such shares have been
paid for in full and issued to such holder. As soon as practicable after
such exercise, and in any event within ten (10) days thereafter, the
Company shall deliver a certificate or certificates for the number of all
shares of Common Shares issuable upon such exercise, all of which shall be
validly issued, fully paid and non-assessable, and free of all taxes, liens
and charges with respect to the issue thereof, to the person or persons
entitled to receive the same, provided, however, that unless the Company
shall receive an opinion of counsel satisfactory to it that such a legend
is not required in order to assure compliance with the Securities Act of
1933, such certificate delivered to the holder of the surrendered Warrant
shall bear a legend reading substantially as follows:
"The shares represented by this certificate
have not been registered under the Securities
Act of 1933. The Shares have been acquired
for investment and may not be sold or
transferred in the absence of an effective
Registration Statement for the shares under
the Securities Act or an opinion of counsel
to the Company that registration is not
required under said Act."
5. Registration Under Securities Act. In the event the Company
determines to register any shares of Common Stock under the Securities Act
of 1933 (the "Act") (whether in connection with a public offering of
securities by the Company, a public offering of securities by stockholders
or warrantholders of the Company, or both, but not in connection with a
registration effected solely to implement a compensation plan or a
transaction to which Rule 145 under the Act or any successor provision if
applicable or which is otherwise effected on Form S-4 or any successor
thereto) the Company will use its best efforts to effect the registration
under the Act of all of the shares of Common Stock issuable upon exercise
of this Warrant, provided, however, that in the case of a registration of
Common Stock by the Company in an underwritten public offering said shares
of Common Stock shall not be registered in the event that the managing
underwriter of such offering shall advise the Company in writing that, in
the reasonable opinion of such managing underwriter, marketing factors
require a limitation on the number of shares of Common Stock to be included
in such offering. This limitation, however, shall be applied on a pro-rata
basis with all other security holders requesting inclusion in the said
registration. In connection with the filing of any such Registration
Statement, and as a condition to the inclusion therein of Common stock
issuable upon exercise of this Warrant, the holder or holders hereof shall
enter into such underwriting or indemnification agreement, in customary
form, as the Company shall request.
The Company will give the warrantholder 60 days notice of its intent to
file a registration statement.
All direct costs associated with the registration shall be at the Company's
expense.
The rights set out in this section 5 shall survive any exercise of the
Warrant and shall accrue to the holder(s) of any Common Stock issued
pursuant to such exercise.
6. Reservation of Stock Issuable upon Exercise. The Company shall
at all times reserve and keep available out of its authorized but unissued
shares of Common Stock, solely for the purpose of effecting the issuance
of the Shares upon exercise of the Warrant, such number of its shares of
Common Stock as shall from time to time be sufficient to provide for the
exercise of this Warrant, and if at any time the number of authorized but
unissued shares of Common Stock shall not be sufficient to provide for the
exercise of this Warrant, the Company will, subject to the requirements of
applicable state law, take such corporate action as may, in the option of
its counsel, be necessary to increase its authorized but unissued shares of
Common Stock to such number of shares of Common Stock as shall be
sufficient for such purposes.
7. Assignment. This warrant shall be assignable in whole or in
part without restrictions or limitations.
Barringer Technologies Inc.
By: ----------------------
Stanley S. Binder
President
Dated: , 1994
ATTEST;
--------------------------
Kenneth S. Wood, Secretary
APPENDIX "A"
(To be executed by the registered holder to
exercise the right to purchase
Common Stock evidenced by the within Warrant)
To Barringer Technologies Inc.
The undersigned hereby irrevocably subscribes for share of
your Common Stock pursuant to and in accordance with the terms and
conditions of this Warrant, and herewith makes payment of US$
therefore, and requests that a certificate for such shares be issued in the
name of the undersigned and be delivered to the undersigned at the address
stated below, and if said number of shares shall not be all of the shares
purchasable
hereunder, that a new Warrant of like tenor for the balance of the
remaining shares purchasable hereunder be delivered to the undersigned at
the address stated below.
Dated: Signed:
Address:
EXHIBIT 4.19
BARRINGER TECHNOLOGIES INC.
SUBSCRIPTION AGREEMENT
Barringer Technologies Inc.
219 South Street
New Providence, New Jersey 07974
Gentlemen:
The undersigned desires to purchase Units (the "Units") from
Barringer Technologies Inc. (the "Company"), each unit consisting of 10,000
shares (collectively, the "Shares") of Common Stock, par value $.01 per
share ("Common Stock"), and a warrant (collectively, the "Warrants")
exercisable at any time prior to June 28, 2000 to purchase 10,000 shares of
Common Stock (collectively, the "Issuable Shares") at an exercise price of
$.50 per share, (subject to adjustment as provided in the Warrants), to be
in substantially the form of Exhibit A hereto, and hereby irrevocably
subscribes for ________ Units at a purchase price of $6,000 per unit.
In connection with this offer to purchase, the undersigned represents
and acknowledges as follows:
Section 1. Access to Information
The Company has provided to the undersigned and any investment
advisor, attorney, accountant and/or other purchaser representative acting
on behalf of the undersigned (all of whom are hereinafter collectively
referred to as purchaser representatives.) A copy of the Company's Annual
Report on Form 10-K for the year ended December 31, 1994 and a copy of the
Company's Quarterly Report on Form 10-Q for the quarter ended March 31,
1995. In addition, the undersigned and its purchaser representatives, if
any, have had an opportunity to ask questions and receive answers from
repesentatives of the Company concerning the business of the Company, its
financial condition and prospects (financial and other) and the terms and
conditions of the offering of the Units, and the Company or such
representatives, have provided to the undersigned and the undersigned's
purchaser representatives, if any, an opportunity to obtain any and all
additional information necessary to verify the accuracy of the information
which has been furnished. All written information regarding the Company
provided to the undersigned and its purchaser representatives, if any, is
referred to herein as the Placement Materials. Other than the Placement
Materials, neither the undersigned not any purchaser representative of the
undersigned has been furnished any offering literature by the Company or
otherwise.
Section 2. Investor Qualifications
The undersigned has carefully reviewed the definition of Accredited
Investor contained in Section 2(15) of the Securities Act of 1933, as
amended (the Act) and Rule 501 of Regulation D promulgated under the Act,
copies of which are attached hereto as Exhibit B and hereby represents and
warrants to the Company that the subscriber is an Accredited Investor as so
defined.
Section 3. Reliance on Own Knowledge and Experience or Purchaser
Representative
The undersigned represents that it has had prior investment
experience, including investments in unregistered securities, and/or the
undersigned has employed the services of a purchaser representative who has
read and reviewed the Placement Materials and the other documentation and
information furnished by the Company and who is qualified by training and
experience in business and financial matters to evaluate the merits and
risks of an investment such as the purchase of the Units offered by the
Company. If applicable, the information concerning the undersigned's
purchaser representative is as follows:
(a) The name of the undersigned's purchaser representative
is__________________________________________________________________
___________________________.
He or she is affiliated
with___________________________________________________________.
(b) The undersigned has been advised by its purchaser
representative that (I) he or she is not an affiliate, director, officer or
other employee of the Company, (ii) he or she is not the beneficial owner
of 10 percent or more of any class of the Company's equity securities or 10
percent or more of the equity interest in the Company, and (iii) neither he
or she nor any of his or her affiliates has any material relationship with
the Company or its affiliates, nor has any such material relationship
existed for at least the past two (2) years, nor will any compensation be
paid to such purchaser representative, except as disclosed below:
____________________________________________________________________
____________________________________________________________________
____________________________________________________________________
Section 4. Subscriber's Acknowledgments
The Company has disclosed to the undersigned and the undersigned
understands that:
(a) There is no present public market for Shares and the
Warrants and it is unlikely that a public market for any of them will
develop in the future.
(b) Due to the absence of a public market for the Shares and
the Warrants:
(I) the undersigned may not be able to liquidate this investment in the
event of an unexpected need for cash; (ii) transferability of the Units or
the Warrants is extremely limited; and (iii) in the event of a disposition
of the Units or the Warrants the undersigned could sustain a loss.
(c) The Shares and the Warrants and the Issuable Shares have
not been registered under the Act of State securities laws and, therefore,
they cannot be resold or transferred unless they are subsequently
registered under the Act and applicable State securities or Blue Sky laws
or exemptions from such registration are available.
(d) A legend summarizing the restrictions on the transfer of
the Shares and the Warrants will be made on the certificates representing
the Shares and the Warrants to be purchased by me and stop transfer
instructions will be given to the Company's registrar and transfer agent to
prohibit any transfer or attempted transfer in violation of such
restrictions. The legend will be as stated in Section 9(a) below.
(e) The Shares and the Warrants and the Issuable Shares have
not been registered under the Act in reliance upon an exemption under the
provisions of the Act which depends, in part, upon the investment intention
of the purchaser. In this connection, the undersigned understands that it
is the position of the Securities and Exchange Commission (the "SEC") that
the statutory basis for such exemption would not be present if the
representation of the purchaser merely meant that its present intention was
to hold such Shares, Warrants and Issuable Shares for a short period, such
as the capital gains period of the Internal Revenue Code, for a deferred
sale, for a market rise, or for a sale if the market does not rise
(assuming that a market develops) for a year, or for any other fixed
period. The undersigned realizes that, in the view of the SEC, a purchase
now with an intent to resell would represent a purchase with an intent
inconsistent with this investment representation, and the SEC might regard
such a sale or disposition as a deferred sale to which the exemption is not
available. This may result in the Company's being exposed to substantial
liabilities for which the undersigned would be responsible.
(f) AN INVESTMENT IN THE COMPANY INVOLVES CONSIDERABLE RISKS
NOT ASSOCIATED WITH OTHER INVESTMENTS, INCLUDING WITHOUT LIMITATION, RISKS
RELATING TO THE COMPANY'S CONTINUING OPERATING LOSSES, COMPETITION, THE
COMPANY'S RELIANCE ON KEY PERSONNEL, THE COMPANY'S DEPENDENCE ON TECHNOLOGY
AND TECHNOLOGICAL INNOVATION, THE LONG LEAD-TIMES ASSOCIATED WITH THE
PURCHASING PRACTICES OF GOVERNMENTAL AGENCIES WHICH ARE SUBSTANTIAL
CUSTOMERS OF THE COMPANY, THE COMPANY'S CONTINUING NEED FOR LIQUIDITY, THE
FAILURE OF THE COMPANY TO CONSUMMATE THE SALE OF ITS SUBSIDIARY, BARRINGER
LABORATORIES, INC., THE RESTRICTIONS ON TRANSFER OF THE UNITS, THE WARRANTS
AND THE ISSUABLE SHARES AND THE LACK OF A TRADING MARKET THEREFOR,
POTENTIAL CONFLICTS OF INTEREST AND RELATED PARTY TRANSACTIONS, THE RISKS
ASSOCIATED WITH ITS NEW CONSUMER PRODUCT MARKETED UNDER THE NAME BARRINGER
DRUGALERT SYSTEM AND THE SUCCESSFUL CONSUMMATION OF THE COMPANY'S BUSINESS
AND OPERATING STRATEGY.
(g) No Federal or State agency has made any findings or
determination as to the fairness of the investment, nor have they made any
recommendation or endorsement concerning the Units.
(h) This Subscription Agreement is not revocable by the
undersigned and the undersigned is submitting this Subscription Agreement
intending to be legally bound thereby.
(i) The undersigned acknowledges that he has received and
reviewed a copy of the Placement Materials. The undersigned has had an
opportunity to ask questions of and has received answers from the Company
concerning any of the information contained in the Placement Materials and
any other information requested by the undersigned regarding the business
and operations of the Company.
(j) The undersigned acknowledges that it is not entitled to
any pre-emptive rights with respect to any securities of the Company, any
options, warrants or other rights to subscribe for any securities of the
Company or any security convertible into or exchangeable for any securities
of the Company and that his investment in the Units, the Warrants and the
Issuable Shares could be subject to significant dilution.
Section 5. Subscriber Representations
The undersigned represents and warrants as follows:
(a) The undersigned is acquiring the Units for its own
account for investment only and not for or with a view to resale or
distribute. The undersigned has not entered into any contract,
undertaking, agreement or arrangement with any person to sell, transfer or
pledge to such person or anyone else the Units and/or the Warrants
constituting a part thereof, which it is subscribing to purchase and the
undersigned has no present plans or intentions to enter into any such
contract, undertaking, agreement or arrangement.
(b) The undersigned can bear the economic risk of losing its
entire investment in the Units. The undersigned is prepared to bear the
economic risk of this investment for an indefinite time.
(c) The overall commitment of the undersigned to investments
which are not readily marketable is not disproportionate to its net worth,
and an investment in the Units will not cause such overall commitment to
become excessive. The undersigned's need for diversification in its
investment portfolio will not be impaired by an investment in the Company.
(d) The undersigned has adequate means of satisfying its
short term needs for cash and has no present need for liquidity which would
require it to sell its Units or the Warrants constituting a part thereof.
(e) The undersigned has substantial experience in making
investment decisions of this type and/or is relying on its own advisors in
making this investment decision and therefore, either alone or together
with its advisors, it has such knowledge and experience in financial and
business matters that it is capable of evaluating the merits and risks of
an investment in the Company.
(f) The principal business address of the undersigned, or if
the undersigned is an individual, his principal residence, is in the state
indicated in the address beneath its signature at the end of this
Agreement. Unless otherwise indicated, all communications, contacts and
discussions relating to the offering of the Units occurred in the state in
which the undersigned maintains its office, or if the undersigned is an
individual, in the state in which he maintains his residence.
Section 6. Reliance on Representations
The undersigned represents and warrants that:
(a) If the undersigned subscriber is a corporation,
partnership, trust or other entity, the undersigned represents and warrants
that it is duly incorporated or organized, validly existing and in good
standing in its state of incorporation or organization and in all other
jurisdictions in which the character of its business makes such
qualifications necessary.
(b) The undersigned has full power and authority to enter
into, deliver and perform this Subscription Agreement and it has taken all
action required to authorize the execution and delivery of this Agreement
and to consummate the transactions contemplated hereby. This Agreement is
the valid and binding obligations of the subscriber, enforceable against it
in accordance with its terms and the person signing such documents on
behalf of the subscriber has been duly authorized to act on behalf of and
to bind the subscriber.
(c) The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby will not violate any
provision of the certificate of incorporation and by-laws or the
partnership agreement or trust agreement, if applicable, or any agreement
or contract to which the subscriber is a party or by which it is bound, or
any applicable law, ordinance, rule or regulation of any governmental body
having jurisdiction over the subscriber or its business or any order,
judgment or decree applicable to the subscriber.
Section 7. Indemnification
The undersigned subscriber agrees to indemnify and hold harmless the
Company and each director, officer, employee, agent or representative
thereof from and against any and all loss, damage or liability and all
related costs and expenses (including but not limited to, reasonable
attorney's fees and costs of investigation) due to or arising out of a
breach of any covenant, representation or warranty made by it in this
Agreement.
Section 8. Representations and Warranties of the Company
The Company hereby represents and warrants that as of June 20, 1995:
(a) The Company has been duly organized, is validly existing
and is in good standing under the laws of the State of Delaware.
(b) The authorized capital of the Company consists of
20,000,000 shares of Common Stock, 1,000,000 shares of Convertible
Preferred Stock, par value $1.25 per share (Convertible Preferred), and
1,000,000 shares of Preferred Stock, par value $2.00 (Preferred Stock) of
which 12,806,996 shares of Common Stock are outstanding, 381,099 shares of
said Convertible Preferred are outstanding and 399,994 shares of said
Preferred Stock are presently outstanding of which 82,494 shares are
presently outstanding designated as Class A Convertible Preferred Stock and
317,500 shares of Preferred Stock are presently outstanding designated as
Class B Convertible Preferred Stock. There are warrants and options
outstanding to purchase 3,503,525 shares of Common Stock at exercise prices
of between $.50 and $3.69, which warrants are exercisable through May 9,
2000.
(c) The Company has the full right, power and authority to
enter into this Subscription Agreement and to perform the transactions
contemplated herein. This Subscription Agreement has been duly executed by
the Company and this Subscription Agreement and the transactions
contemplated herein have been duly authorized by all necessary corporate
action. This Subscription Agreement constitutes the legal, valid and
binding obligation of the Company, enforceable in accordance with its
terms.
(d) Issuance of the Shares has been duly authorized and, when
issued in accordance with the terms of this Subscription Agreement, the
Shares will be validly issued, fully paid and nonassessable.
(e) The Warrants have been duly authorized and, when issued
in accordance with the terms of this Subscription Agreement, the Warrants
will have been duly executed, issued and delivered and will constitute
valid and legally binding obligations of the Company, enforceable in
accordance with their terms. The Company has sufficient authorized and
unissued shares of Common Stock reserved for issuance upon the exercise of
the Warrants in accordance with their terms. Upon the due exercise of the
Warrants and upon the payment in full of the exercise price specified
therein, the shares of Common Stock issuable upon the exercise of the
Warrants will be duly authorized, validly issued, fully paid and
nonassessable.
(f) The Company is subject to the informational requirements
of the Securities Exchange Act of 1934, as amended, and the applicable
rules and regulations promulgated thereunder (the "Exchange Act") and, in
accordance therewith, files, reports and other information with the
Securities and Exchange Commission (the "Commission"). The Company has
filed with the Commission all reports required to be filed by it under the
Exchange Act, including its Annual Report on Form 10-K for the year ended
December 31, 1994 (the "Form 10-K"), and its Quarterly Report on Form 10-Q
for the quarter ended March 31, 1995 (the "Form 10-Q"). As of its date,
the Form 10-K described in all material respects the business and financial
condition of the Company, and, as of such date, the Form 10-K did not
contain an untrue statement of a material fact or omit to state a material
fact required to be stated or necessary to make the statements therein not
misleading.
(g) Since December 31, 1994, other than as disclosed in the
Placement Materials or as otherwise disclosed to the undersigned, there has
been no material adverse change in the results of operations, financial
condition or business of the Company, taken as a whole.
(h) The Company will use the net proceeds of the sale of the
Units for working capital purposes.
Section 9. Registration Rights
(a) Restrictive Legend. Any certificates or other instrument
representing the Shares, the Warrants or the Issuable Shares shall be
stamped or otherwise imprinted with the following legend:
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR THE
SECURITIES LAWS OF ANY STATE AND CANNOT BE SOLD OR
TRANSFERRED UNLESS AND UNTIL THEY ARE SO REGISTERED
OR UNLESS AN EXEMPTION UNDER SUCH ACT AND LAWS IS
AVAILABLE. THE TRANSFERABILITY OF THESE SECURITIES
IS FURTHER SUBJECT TO THE PROVISIONS OF A
SUBSCRIPTION AGREEMENT DATED AS OF JUNE ________,
1995, BETWEEN THE COMPANY AND
_____________________.
For purposes of this Section 9, any references to "Shares", "Warrants" or
"Issuable Shares" shall include any other securities issued in respect of
any of such securities.
(b) The Company shall file a registration statement with the
Commission under the Securities Act by August 7, 1995 covering the Shares
and the Issuable Shares, and use its best efforts to cause such
registration statement to become effective and to keep such registration
statement effective for a period of five years from the date it is declared
effective by the Commission. The Company shall not be obligated to cause
to become effective more than one registration statement pursuant to which
the Shares and the Issuable Shares may be sold under this Section 9(b). At
any time and from time to time, the Purchaser agrees, without further
consideration, to take such actions and to execute and deliver such
documents as may be reasonably requested by the Company in order to
effectuate the purposes of this Section 9, including without limitation,
supplying information with respect to such Purchaser that may be necessary
or required for inclusion in the registration statement. In the event that
such information or other material requested by the Company is not provided
to the Company within a reasonable period of time following delivery of
written notice requesting such information, then the Company's obligations
under this Paragraph 5 shall be suspended until a reasonable period of time
after the Purchaser complies with such request.
(c) Additional Shares; Incidental Registration. The
provisions of Section 9(b) notwithstanding, if at any time following the
issuance of the Units the Company proposes to register any of its equity
securities under the Securities Act on Form S-1, S-2, S-3, S-18 or any
other registration form at the time available on which the Shares and/or
Issuable Shares could be registered for sale (other than a registration
statement covering securities issuable pursuant to an employee benefit or
dividend reinvestment plan and other than a registration statement covering
securities issuable in a Rule 145 transaction), the Company shall on such
occasion give written notice to the Purchaser of its intention to do so.
Such written notice shall be given as promptly as possible after the
Company determines to file such a registration but in no event shall such
notice be given less than four weeks prior to the date of the filing of
such registration statement. Upon written request of any Purchaser given
within 15 days after receipt of any such notice (which request shall state
the intended method of disposition of the Shares and/or Issuable Shares by
the Purchaser), the Company will use its best efforts to cause the Shares
and/or Issuable Shares which the Purchaser has requested be registered, to
be registered under the Securities Act and under the same registration
statement proposed to be filed by the Company, all to the extent required
to permit the sale or the disposition (in accordance with the written
request of the Purchaser as aforesaid), by the Purchaser of the Shares
and/or Issuable Shares so registered; provided, however, that, no such
notice shall be given and the Purchaser shall not be entitled to have the
Shares and/or Issuable Shares included in such registration in the event
that any underwriter with respect to the offering which is the subject of
such registration statement determines, in its sole discretion, that the
inclusion of the Shares and/or Issuable Shares in the registration will be
detrimental to such offering.
(d) The Company will pay all expenses incurred in complying
with Sections 9(b) and 9(c) hereof, including, without limitation, all
registration and filing fees (including all expenses incident to filing
with the National Association of Securities Dealers, Inc.), printing
expenses, reasonable fees and disbursements of counsel to the Company,
securities law and blue sky fees and expenses and the expenses of any
regular and special audits incident to or required by any such
registration. All underwriting discounts and selling commissions
applicable to the sales of the Shares and/or Issuable Shares, and any state
or federal transfer taxes payable with respect to the sales of the Shares
and/or Issuable Shares and all fees and disbursements of counsel for the
Purchaser, if any, in each case arising in connection with registration of
the Shares and/or Issuable Shares under Paragraphs 9(b) and 9(c) hereof,
shall be payable by the Purchaser.
(e) Indemnification. (i) In the event of any registration
under the Securities Act of the Shares and/or the Issuable Shares pursuant
to this Section 9, the Company will indemnify and hold harmless the
Undersigned from and against all losses, claims, damages, expenses or
liabilities, joint or several, to which they may become subject under the
Securities Act, the Exchange Act and state securities and blue sky laws,
insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue statement of
any material fact contained in any registration statement or alleged untrue
statement, under which such securities were registered under the Securities
Act, any preliminary prospectus or final prospectus contained therein, 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 made therein in light of the circumstances
under which they are made, not misleading; or any violation by the Company
of the Securities Act, the Exchange Act or state securities or blue sky
laws applicable to the Company and relating to action or inaction required
of the Company in connection with such registration or qualification under
such state securities or blue sky laws; and will reimburse the Undersigned
for any legal or any other expenses reasonably incurred by it 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 to the Undersigned to the extent that any such loss, claim, damage or
liability arises out of or is based upon an untrue statement or omission
made in such registration statement, said preliminary prospectus or said
final prospectus or said amendment or supplement or any document incident
thereto in reliance upon and in conformity with written information
furnished to the Company by or on behalf of the Undersigned.
(ii) In the event of any registration of any of the
Shares and/or Issuable Shares under the Securities Act pursuant to this
Section 9, the Undersigned will, jointly and severally, indemnify and hold
harmless the Company and each person, if any, who controls the Company
within the meaning of the Securities Act or the Exchange Act, each officer
of the Company who signs the registration statement and each director of
the Company from and against any and all such losses, claims, damages or
liabilities arising from any untrue statement in, or omission from, any
such registration statement, preliminary or final prospectus, amendment or
supplement or document incident thereto if the statement or omission in
respect of which such loss, claim, damage or liability is asserted was made
in reliance upon and in conformity with information furnished in writing to
the Company by or on behalf of the Undersigned for use in connection with
the preparation of such registration statement or prospectus or such
amendment or supplement thereof.
(iii) The reimbursements required by this Section 9(e)
shall be made by periodic payments during the course of the investigation
or defense as and when bills are received or expenses incurred; provided,
however, that, to the extent that an indemnified party receives periodic
payments for legal or other expenses during the course of an investigation
or defense, and such party subsequently received payment for such expenses
from any other parties to the proceeding, such payments shall be used by
the indemnified party to reimburse the indemnifying party for such period
payments. Any party which proposes to assert the right to be indemnified
under this Section 9(e) will, promptly after receipt of notice of
commencement of any action, suit or proceeding against such party in
respect of which a claim is to be made against any indemnified party under
this Section 9(e), notify each such indemnifying party of the commencement
of such action, suit or proceeding, enclosing a copy of all papers served,
but the failure to so notify such indemnifying party of any such action,
suit or proceeding shall not relieve the indemnifying party from any
obligation which it may have to any indemnified party hereunder unless and
only to the extent that the indemnifying party is prejudiced by said lack
of notice. In case any such action, suit or proceeding shall be brought
against any indemnified party and it shall notify the indemnifying party of
the commencement thereof, the indemnifying party shall be entitled to
participate in and, to the extent that it shall wish, jointly with any
other indemnifying party similarly notified, to assume the defense thereof,
with counsel 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 expense, other than
reasonable costs of investigation subsequently incurred by such indemnified
party in connection with the defense thereof. The indemnified party shall
have the right to employ its own counsel in any such action, but the
reasonable fees and expenses of such counsel shall be at the expense of
such indemnified party, when and as incurred, unless (A) the employment of
counsel by such indemnified party has been authorized by the indemnifying
party, (B) the indemnified party has reasonably concluded (based on advice
of counsel), that there may be legal defenses available to it that are
different from or in addition to those available to the indemnifying party
the indemnified party shall have reasonably concluded (based on advice of
counsel) that there may be a conflict of interest between the indemnifying
party and the indemnified party in the conduct of defense of such action
(in which case the indemnifying party shall not have the right to direct
the defense of such action on behalf of the indemnified party), or (D) the
indemnifying party shall not in fact have employed counsel to assume the
defense of such action. An indemnifying party shall not be liable for any
settlement or any action or claim effected without its consent.
(f) Contribution. (i) If the indemnification provided for in
this Section 9 from the indemnifying party is unavailable to any
indemnified party hereunder in respect of any losses, claims, damages,
liabilities or expenses referred to therein, then the 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
losses, claims, damages, liabilities or expenses in such proportion as is
appropriate to reflect the relative fault of the indemnifying party and
indemnified parties in connection with the actions that resulted in such
losses, claims, damages, liabilities or expenses, as well as any other
relevant equitable considerations. The relative fault of such indemnifying
party and indemnified parties shall be determined by reference to, among
other things, whether any action in question, including any untrue or
alleged untrue statement of a material fact or omission or alleged omission
to state a material fact, has been made by, or relates to information
supplied by, such indemnifying party or indemnified parties, and the
parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such action. The amount paid or payable by a party
as a result of the losses, claims, damages, liabilities and expenses
referred to above shall be deemed to include, subject to the limitations
set forth in Section 9(e), any legal or other fees or expenses reasonably
incurred by such party in connection with any investigation or proceeding.
(ii) The parties hereto agree that it would not be just and
equitable if contribution pursuant to this Section 9(f) were determined by
pro rata allocation or by any other method of allocation that does not take
account of the equitable considerations referred to in the immediately
preceding paragraph. Notwithstanding any other provision hereof, in no
event shall the contribution obligation of the Undersigned be greater in
amount than the excess of (A) the dollar amount of the proceeds received by
the Undersigned upon the sale of the securities giving rise to such
contribution obligation over (B) the dollar amount of any damages that the
Undersigned has otherwise been required to pay by reason of the untrue or
alleged untrue statement or omission or alleged omission giving rise to
such obligation. No Person guilty or 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.
Section 10. Miscellaneous
(a) All notices or other communications given or made
hereunder shall be in writing and shall be delivered or mailed by
registered or certified mail, return receipt requested, postage prepaid to
the undersigned at the address set forth below and to the Company at the
following address: 219 South Street, Providence, NJ 07974, att: Chief
Financial Officer (fax 908-665-8298) and to the Company's counsel at
Lowenstein Sandler, 65 Livingston Ave, Roseland, NJ 07068, att: Jack
Hogoboom (fax 201-992-5820).
(b) Each of the parties hereto submits irrevocably to the
personal jurisdiction of the State and Federal courts located in New Jersey
for the purpose of any suit, action, proceeding or judgement relating to or
arising out of this Agreement and the transactions contemplated hereby.
Service of process in connection with any such suit, action or proceeding
may be served on each party hereto anywhere in the world by the same
methods as are specified for the giving of notices under this Agreement.
Each party hereto consents irrevocably to the jurisdiction of any such
court in any such suit, action, proceeding and to the laying of venue in
such court. Each party hereto waives irrevocably any objection to the
laying of venue of any such suit, action or proceeding brought in such
courts and waives irrevocably any claim that any such suit, action or
proceeding brought in any such court has been brought in an inconvenient
form.
(c) This Agreement (including the Exhibits hereto)
constitutes the entire agreement between the parties hereto with respect to
the subject matter hereof and may be amended only by a writing executed by
all parties.
(d) Whenever required by the context hereof, the singular
shall include the plural and vice-versa; the masculine shall include the
feminine and neuter genders, and vice-versa; and the word person shall
include an individual, corporation, partnership, trust, estate or other
entity.
Section 11. Foreign person (check one)
___ The undersigned hereby certifies that it is not a foreign
person within the meaning of Section 7701(a)(30) of the Internal Revenue
Code and agrees to notify the Company prior to becoming a foreign person as
so defined. A foreign person is a person who is not a citizen or resident
of the United States.
___ The undersigned hereby certifies that it is a foreign
person within the meaning of Section 7701(a)(30) of the Internal Revenue
Code.
Section 12. Subscription
The undersigned hereby subscribes for ________ Units at an
aggregate price indicated below:
Purchase Price: $_______________________
The undersigned hereby pays for its Units by the following
means (Please fill in as appropriate):
Check in the amount of $______________ payable to the Company,
or wire transfer or delivery to the account of the Company, accompanies or
has been made concurrently with the delivery of this Agreement.
and/or
By applying $________________ of director meeting fees and or
director retainer fees owed to the undersigned by the Company.
and/or
By applying $________________ of earned but unpaid employee
wages owed to the undersigned by the Company.
NAME AND ADDRESS OF SUBSCRIBER: __________________________________
_______________________________________________________________________
_____________________________ ___________________________________
Telephone Number Signature, if individual
_____________________________ By:________________________________
Social Security Number
or Taxpayer I.D. No.
___________________________________
TITLE, if applicable
If you would like any correspondence to be sent to a different
address than that set forth above, please specify the other address here:
____________________________________
____________________________________
[ ] Check this box if you want correspondence to be sent to both
addresses listed.
Acknowledgment of Subscriber's Signature:
STATE OF _________________________
S.S.
COUNTY OF _______________________
The foregoing instrument was acknowledged before me this
_______ day of ___________, 199_, by _________________________.
My commission expires: _______________________________.
_____________________________________
NOTARY PUBLIC
Company Acceptance:
Accepted on ___________________, 199_
BARRINGER TECHNOLOGIES INC.
By:________________________________________
Title:
NAME AND ADDRESS OF SUBSCRIBER: __________________________________
_______________________________________________________________________
_____________________________ ___________________________________
Telephone Number Signature, if individual
_____________________________ By:________________________________
Social Security Number
or Taxpayer I.D. No.
___________________________________
TITLE, if applicable
If you would like any correspondence to be sent to a different
address than that set forth above, please specify the other address here:
____________________________________
____________________________________
[ ] Check this box if you want correspondence to be sent to both
addresses listed.
Acknowledgment of Subscriber's Signature:
STATE OF _________________________
S.S.
COUNTY OF _______________________
The foregoing instrument was acknowledged before me this
_______ day of ___________, 199_, by _________________________.
My commission expires: _______________________________.
_____________________________________
NOTARY PUBLIC
Company Acceptance:
Accepted on ___________________, 199_
BARRINGER TECHNOLOGIES INC.
By:________________________________________
Title:
[Counterpart Signature Page To Be Returned to Subscriber Following the
Company's Acceptance]
The Warrant represented hereby and the shares of Common Stock
issuable upon the exercise hereof have not been registered under the
Securities Act of 1933, as amended (the "Act"), or the securities
laws of any state and cannot be sold or transferred unless and unto
they are so registered or unless an exemption under such Act or laws
is available. THE TRANSFERABILITY OF THE WARRANT REPRESENTED HEREBY
AND THE SHARES OF COMMON STOCK ISSUABLE UPON THE EXERCISE HEREOF IS
FURTHER SUBJECT TO THE PROVISIONS OF A SUBSCRIPTION AGREEMENT DATED
AS OF JUNE 30,1995 AMONG THE COMPANY AND ____.
Warrant
to
Purchase
___ Shares
VOID AFTER JUNE 29, 2000
WARRANT TO PURCHASE
COMMON STOCK
OF
BARRINGER TECHNOLOGIES, INC.,
Incorporated Under the Laws of the State of Delaware
THIS IS TO CERTIFY that __________ (the "Warrantholder"), or its registered
assigns, is entitled, subject to the provisions of Section 4 hereof, upon
the due exercise hereof and subject to the terms and conditions hereof as
to the total number of shares thereafter, until the close of business on
June 29, 2000, to purchase from Barringer Technologies, Inc., a Delaware
corporation (the "Company"), all or any part of ___________ ( )
fully paid and nonassessable shares of Common Stock, par value $.01 per
share ("Common Stock"), of the Company, upon surrender hereof with the
subscription form attached hereto as Appendix "A", duly completed, at the
office of the Company or any transfer agent for the Company's Common Stock,
and simultaneous payment therefor in cash or by certified or official bank
check payable to the order of the Company in New York Clearing House funds,
at the purchase price of $0.50 per share (the "Warrant Purchase Price").
1. Term. Unless this Warrant is surrendered and payment made
as herein provided before the close of business on June 29, 2000 (the
"Expiration Date"), this Warrant will become wholly void and all rights
evidenced hereby will terminated on the Expiration Date.
2. Warrant Exchange. This Warrant may be exchanged for a
number of Warrants of the same tenor as this Warrant for the purchase in
the aggregate of the same number of shares of Common Stock as are
purchasable upon the exercise of this Warrant, upon surrender hereof at the
office of the Company with written instructions as to the denominations of
the Warrants to be issued in exchange. If this Warrant is exercised for
less than all the shares purchasable upon the exercise hereof, the holder
shall be entitled to receive a new Warrant or Warrants of the same tenor as
this Warrant for the purchase in the aggregate of the number of shares in
respect of which this Warrant shall not have been exercised.
3. Anti-Dilution. The Warrant Purchase Price of $0.50 per
share will be subject to adjustment from time to time as hereinafter
provided:
(a) General. In the event that the Company shall, at
any time or from time to time after the date hereof, issue any shares of
Common Stock or options, warrants, convertible securities or other rights
to acquire Common Stock other than pursuant to (i) the exercise of options,
warrants, convertible securities or other rights to acquire Common Stock
outstanding on the date hereof, (ii) a subdivision, consolidation or
reclassification of shares of Common Stock under subparagraph 3(b) hereof,
(iii) a merger or consolidation under subparagraph 3(c) hereof, (iv) a
dividend or other distribution on any class of stock under subparagraph
3(d) hereof, or (v) employee stock options outstanding on the date hereof
or issued hereafter pursuant to stock option plans of the Company or stock
purchase warrants outstanding on the date hereof, without consideration or
for a consideration per share less than the lesser of (x) the Warrant
Purchase Price in effect immediately prior to such issuance, or (y) the
then-fair market value per share of the Common Stock (as determined in good
faith by the Board of Directors of the Company), then, and thereafter
successively upon each such issuance, the Warrant Purchase Price in effect
immediately prior to the issuance of such shares shall forthwith be reduced
to a price (calculated to the nearest full cent) determined by dividing (a)
an amount equal to (i) the total number of shares of Common Stock
outstanding immediately prior to such issuance multiplied by the Warrant
Purchase Price in effect immediately prior to such issuance, plus (h) the
consideration, if any, received by the Company upon such issuance by (b)
the total number of shares of Common Stock outstanding immediately after
such issuance. Upon any such adjustment of the Warrant Exercise Price as
provided above, this Warrant shall evidence the right to purchase that
number of shares of Common Stock (rounded to the nearest whole share)
obtained by multiplying the number of shares of Common Stock purchasable
immediately prior to such adjustment upon exercise of this Warrant by the
Warrant Exercise Price in effect immediately prior to such adjustment and
dividing the product so obtained by the Warrant Exercise Price in effect
immediately after such adjustment.
1. In case of the issuance of shares of Common Stock or
other securities of the Company for cash, the consideration received
by the Company therefor shall be deemed to be the cash proceeds
received by the Company therefor less any commissions or other
expenses paid or incurred by the Company for any underwriting of, or
otherwise in connection with, the issuance thereof.
2. In case of the issuance of shares of Common Stock or
other securities of the Company for a consideration other than cash,
or a consideration a part of which shall be other than cash, the
amount of the consideration received by the Company therefor shall be
deemed to be the cash proceeds, if any, received by the Company plus
the fair value of the consideration other than cash, as determined by
the Board of Directors of the Company less any commissions or other
expenses paid or incurred by the Company for any underwriting of, or
otherwise in connection with, such issuance, provided, however that
the amount of such consideration other than cash shall in no event
exceed the cost thereof as recorded on the books of the Company.
3. In case of the issuance by the Company of (a) any
security that is convertible into or exchangeable for shares of
Common Stock or (b) any rights, warrants or options to purchase
shares of Common Stock, the Company shall be deemed to have issued
the maximum number of shares of Common Stock into which such
convertible or exchangeable securities may be converted or exchanged
or the maximum number of shares of Common Stock deliverable upon the
exercise of such rights, warrants or options, as the case may be, for
the consideration (determined as provided in subparagraph 1 and 2
above) received by the Company for such convertible or exchangeable
securities or for such rights or options, as the case may be, plus
the minimum aggregate consideration or adjustment payment to be
received by the Company in connection with the conversion or exchange
of such convertible or exchangeable securities, or the minimum
aggregate price at which shares of Common Stock are to be delivered
upon the exercise of such rights, warrants or options, as the case
may be. On the expiration of such rights, warrants or options or the
termination of such right to convert or exchange, the Warrant
Purchase Price hereunder shall be readjusted to such Warrant Purchase
Price as would have obtained had the adjustments made upon the
issuance of such rights, warrant or options, or convertible or
exchangeable securities, been made upon the basis of the delivery of,
and receipt of the consideration or adjustment payment, if any,
actually paid for, only the number of shares of Common Stock actually
delivered upon the exercise of such rights, warrants or options or
upon the conversion or exchange of such securities. Except as
provided in the next preceding sentence, no further adjustment of the
Warrant Purchase Price shall be made as a result of the actual
issuance of shares of Common Stock referred to in this subparagraph
C.
4. The consideration for any securities issued as a
stock dividend shall be deemed to be zero.
5. Irrespective of any adjustment or change in the Warrant Purchase
Price or the number of shares of Common Stock actually purchasable under
this or any other Warrant of like tenor, the Warrants theretofore and
thereafter issued may continue to express the Warrant Purchase Price per
share and the number of shares purchasable thereunder as the Warrant
Purchase Price per share and the number of shares purchasable that were
expressed upon the Warrant when initially issued.
(b) Subdivision, Combination or Reclassification. If at any
time or from time to time the Company shall by subdivision, combination or
reclassification of shares, or otherwise change as a whole the outstanding
shares of Common Stock into a different number or class of shares, then in
each case the Warrant Exercise Price in effect immediately after the
effective date of such subdivision, combination or reclassification shall
be adjusted so that it shall equal the price determined by multiplying the
Warrant Exercise Price in effect immediately prior thereto by a fraction,
of which the numerator shall be the number of shares of Common Stock
outstanding immediately before such subdivision, combination or
reclassification, and of which the denominator shall be the number of
shares of Common Stock outstanding immediately after such subdivision,
combination or reclassification. Thereafter, this Warrant shall thereupon
evidence the right to purchase that number of shares of Common Stock
(rounded to the nearest whole share) obtained by multiplying the number of
shares of Common Stock purchasable immediately prior to such adjustment
upon exercise of this Warrant by the Warrant Exercise Price in effect
immediately prior to such adjustment and dividing the product so obtained
by the Warrant Exercise Price in effect immediately after such adjustment.
(c) Merger. If at any time while this Warrant is
outstanding, the Company shall consolidate with or merge into another
corporation, the holder hereof shall thereafter be entitled upon exercise
hereof to purchase, with respect to each share of Common Stock purchasable
hereunder (immediately prior to the date upon which such consolidation or
merger shall become affective), the securities or property to which a
holder of one share of Common Stock would have been entitled upon such
consolidation or merger immediately prior to the date upon which such
consolidation or merger became effective, without any change in, or payment
in addition to, the Warrant Purchase Price in effect immediately prior to
such merger or consolidation, and the Company shall take such steps in
connection with such consolidation or merger as may be necessary to assure
that all of the provisions of this Warrant shall thereafter be applicable,
as nearly as reasonably may be, in relation to any securities or property
thereafter deliverable upon the exercise of this Warrant. The Company
shall not effect any such consolidation or merger unless prior to the
consummation thereof the successor corporation (if other than the Company)
resulting therefrom shall assume by written instrument executed and mailed
to the registered holder hereof at the address of such holder shown on the
books of the Company, the obligation to deliver to such holder such
securities or property as in accordance with the foregoing provisions such
holder shall be entitled to purchase. A sale of all or substantially all
of the assets of the Company for a consideration (apart from the assumption
of obligations) consisting primarily of securities shall be deemed a
consolidation or merger for the foregoing purposes.
(d) Distributions. If the Company shall at any time or
from time to time (i) distribute (otherwise than as a dividend in cash) to
the holders of Common Stock, or grant any rights to such holders to acquire
assets without any consideration paid or to be paid by them or for a
consideration less than the fair market value of such assets, as determined
by the Board of Directors of the Company, or (h) declare a dividend upon
the Common Stock (to the extent payable otherwise than in cash and out of
earnings or earned surplus, as indicated by the accounting treatment of
such dividend in the books of the Company), the Company shall reserve and
the holder of this Warrant shall thereafter upon exercise hereof be
entitled to receive, for each share of Common Stock purchasable hereunder
on the record date established by the Company for the determination of
holders of Common Stock entitled to receive such distribution, right or
dividend (or if no such record date shall have been established, on the
date of such distribution, grant of such right or payment of such
dividend), and without increase in (except in respect of the consideration,
if any, paid for such assets by shareholders), or payment in addition to,
the then current Warrant Exercise Price per share, (A) the amount of such
assets to which such right would have been granted to the holder hereof, or
(B) the amount of such dividend (to the extent thereof above stated) which
such holder would have received had he been a holder of one share of Common
Stock on such record (or other) date.
(e) Notice of Change. Upon the happening of any event
requiring an adjustment of the Warrant Purchase Price hereunder, the
Company shall forthwith give written notice thereof to the registered
holder of this Warrant stating the adjusted Warrant Purchase Price
resulting from such event and the number of shares of Common Stock (or
other securities and property) issuable upon the exercise of this Warrant,
setting forth in reasonable detail the method of calculation and the facts
upon which such calculation is based. In case any voluntary or involuntary
dissolution, liquidation or winding up of the Company shall at any time be
proposed, the Company shall give at least 20 days prior written notice
thereof to the registered holder hereof stating the date on which such
event is to take place and the date (which shall be at least 20 days after
the giving of such notice) as of which the holders of Common Stock of
record shall be entitled to exchange their Common Stock for securities or
other property deliverable upon such dissolution, liquidation or winding up
(on which date, in the event of such dissolution, liquidation or winding up
shall actually take place, this Warrant and all rights with respect hereto,
shall terminate). Notice pursuant to this paragraph shall be given by
first class mail postage prepaid, addressed to the registered holder of
this Warrant at the address of such holder appearing in the records of the
Company.
(f) Definition of Common Stock. For the purpose of the
foregoing paragraphs (a) through (e), the term "Common Stock" shall include
all shares of Common Stock authorized by the Company's Certificate of
Incorporation, as from time to time amended, which are not limited to a
fixed sum or percentage of the par value in respect of the right of holders
thereof to participate in dividends or in the distribution of assets upon
the voluntary or involuntary dissolution or winding up of the Company;
provided, that the shares purchasable pursuant to this Warrant shall
include only shares of such class referred to in the first paragraph hereof
designated in the Company's Certificate of Incorporation as Common Stock on
the date of the original issue of this Warrant and shall not, in case of
any reorganization, reclassification, consolidation, merger or sale of
assets of the character referred to in subparagraph 3(b) or 3(c) hereof,
the stock, securities or assets provided for in such subparagraphs.
4. No Stockholder Rights. The holder of this Warrant shall
not be entitled to any rights of a stockholder of the Company in respect of
any shares purchasable upon the exercise hereof until such shares have been
paid for in full and issued to such holder. As soon as practicable after
such exercise, and in any event within 10 days thereafter, the Company
shall deliver a certificate or certificates for the number of all shares of
Common Shares issuable upon such exercise, all of which shall be validly
issued, fully paid and non-assessable, and free of all taxes, liens and
charges with respect to the issue thereof to the person or persons entitled
to receive the same, provided, however, that unless the Company shall
receive an opinion of counsel satisfactory to it that such a legend is not
required in order to assure compliance with the Securities Act of 1933, as
amended, such certificate delivered to the holder of the surrendered
Warrant shall bear a legend reading substantially as follows:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "ACT"), OR THE SECURITIES LAWS OF ANY STATE. THE
SHARES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE
SOLD OR TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT FOR THE SHARES UNDER THE
SECURITIES ACT OF 1933 OR AN OPINION OF COUNSEL TO THE
COMPANY THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT.
5. Registration Under Securities Act. The holder of this
Warrant will be entitled to certain registration rights as set forth in a
separate agreement on file at the Company's principal offices.
6. Reservation of Stock Issuable Upon Exercise. The Company
shall at all times reserve and keep available out of its authorized but
unissued shares of Common Stock solely for the purpose of effecting the
issuance of the shares upon exercise of the Warrant, such number of its
shares of Common Stock as shall from time to time be sufficient to provide
for the exercise of this Warrant, and if at any time the number of
authorized but unissued shares of Common Stock shall not be sufficient to
provide for the exercise of tills Warrant, the Company will, subject to the
requirements of applicable state law, take such corporate action as may, in
the opinion of its counsel, be necessary to increase its authorized but
unissued shares of Common Stock to such number of shares of Common Stock as
shall be sufficient for such purposes.
BARRINGER TECHNOLOGIES, INC.
By:
Dated: Title: President and CEO
ATTEST: _____________________
APPENDIX "A"
(To be executed by the registered holder
to exercise the right to purchase
Common Stock evidenced by the within Warrant)
To Barringer Technologies, Inc.:
The undersigned hereby irrevocably subscribes for _________ shares of your
Common Stock pursuant to and in accordance with the terms and conditions of
this Warrant, and herewith makes payment of $___________, therefor, and
requests that a certificate for such shares be issued in the name of the
undersigned and be delivered to the undersigned at the address stated
below, and if said number of shares shall not be all of the shares
purchasable hereunder, that a new Warrant of like tenor for the balance of
the remaining shares purchasable hereunder be derivered to the undersigned
at the address stated below.
Dated: Signed:
</PAGE>
EXHIBIT 4.20
The Warrant represented hereby and the shares of Common Stock issuable upon
the exercise hereof have not been registered under the securities Act of
1933, as amended (the "Act") or the securities laws of any state and cannot
be sold or transferred unless and until they are so registered or unless an
exemption under the Act and such laws is available.
Warrant to Purchase:
25,000 Shares of Common
Stock, $.01 par value
BLI - 1
WARRANT TO PURCHASE
COMMON STOCK
OF
BARRINGER TECHNOLOGIES INC.
THIS IS TO CERTIFY that the BARRINGER LABORATORIES, INC. (the
"Warrantholder"), or its assigns, is entitled, upon the due exercise
hereof, to purchase from Barringer Technologies Inc., a Delaware
corporation (the "Company"), all or any part of twenty-five thousand
(25,000) fully paid and nonassessable shares of Common Stock, par value
$.01 per share, of the Company ("Common Stock"), upon presentation and
surrender of the Warrant together with the subscription form attached
hereto as Appendix "A", duly completed and duly executed, at the principal
office of the Company, 219 South Street, New Providence, New Jersey 07974,
Att: Chief Financial Officer, and simultaneous payment therefor in cash or
by certified or official bank check payable to the order of the Company at
the purchase price of One dollar and no cents ($1.00) per share (the
"Warrant Purchase Price").
1. Term. Unless this Warrant is surrendered and payment made
as herein provided before April 1, 1997 (hereinafter referred to as the
"Expiration Date"), the Warrant will become wholly void and all rights
evidenced hereby will terminate on the Expiration Date.
2. Warrant Exchange. This Warrant may be exchanged for a
number of Warrants of the same tenor as this Warrant for the purchase in
the aggregate of the same number of shares of Common Stock as are
purchasable upon the exercise of this Warrant, upon surrender hereof at the
office of the Company with written instructions as to the demoninations of
the Warrants to be issued in exchange. If this Warrant is exercised for
less than all the shares purchasable upon the exercise hereof, the holder
shall be entitled to receive within 10 days of the surrender of the
warrant, a new Warrant or Warrants of the same tenor as this Warrant for
the purchase in the aggregate of the number of shares in respect of which
this Warrant shall not have been exercised.
3. (a) Subdivision, Consolidation, Reclassification. If at
any time or from time to time the Company shall be subdivision,
consolidation or reclassification of shares, or otherwise change a whole
the outstanding share of Common Stock into a different number or class of
shares, the number and class of shares as so changed shall, for the purpose
of this Warrant and the terms and conditions hereof, replace the shares
outstanding immediately prior to such changes and the Warrant purchase
Price in effect, and the number of shares purchasable under this Purchase
Warrant, immediately prior to the date on which such change shall become
effective, shall be proportionately adjusted.
(b) Merger. If at any time while this Warrante is outstanding
the Company shall consolidate with or merge into another corporation, the
holder hereof shall thereafter be entitled upon exercise hereof to
purchase, with respect to each share of Common Stock purchasable hereunder
(immediately prior to the date upon whcih such consolidation or merger
shgall become effective), the securities or property to which a holder of
one share of Common Stock would have been entitled upon such consolidation
or merger immediately prior to the date upon which such consolidation or
merger became effective. Without any change in, or payment in addition to,
the Warrant Purchase Price in effect immediately prior to, such merger or
consolidation, and the Company shall take to such steps in connection with
such consolidation or merger as may be necessary to assure that all of the
provisions of this Warrant shall thereafter be applicable, as nearly as
reasonably may be, in relation to any securities or porperty thereafter
deliverable upon the exercise of this Warrant. The Company shall not
effect any such consolidation or merger unless prior to the consummation
thereof the successor corporation (if other than the Company) resulting
therefrom shall assume by written instrument executed and mailed to the
registered holder hereof at the address of such holder shown on the books
of the Company, the obligation to deliver to such holder such securities or
property as in accordance with the foregoing provisions such holder shall
be entitled to purchase. A sale of all or substantially all of the assets
of the Company for a consolidation (apart from the assumption or
obligations) consisting primarily of securities shall be deemed a
consolidation or merger for the foregoing purposes.
(c) Distributions. If the Company shall at any time or from
time to time (a) distribute (otherwise than as a dividend in cash) to the
holders of Common Stock, or grant any rights to such holders to acquire
assets without any consideration paid or to be paid by them or for a
consideration less than the fair market value of such assets, as determined
by the Board of Directors of the Company, or (b) declare a dividend upon
the Common Stock (to the extent paybale otherwise than in cas and out of
earnings or earned surplus, as indicated by the accounting treatment of
such dividend in the books of the Company), the Company shall reserve and
the holder of the Warrant shall thereafter upon exercise hereof, be
entitled to receive, for each share of Common Stock purchasable hereunder
on the record date established by the Company for the determination of
holders of Common Stock entitled to receive such distribution, right or
dividend (or if no such record date shall have been established, on the
date of such distribution, grant of such right or payment of such
dividend), and without increase in (except in respect of the consideration,
if any, paid for such assets by shareholders), or payment in addition to,
the then current Warrant purchase price per share, (i) the amount of such
assets to which such right would have been granted to the holder hereof or
(ii) the amount of such dividend (to the extent thereof above stated) which
such holder would have received had be been a holder of one share of Common
Stock on such record (or other) date.
(d) Notice of Change. Upon the happening of any event
requiring an adjustment of the Warrant Purchase Price hereunder, the
Company shall forthwith give written otice thereof to the registered holder
of this Warrant stating the adjusted Warrant Purchase Price resulting from
such event and setting forth in reasonable detail the method of calculation
and the facts upon which such calculation is based. In case any voluntary
or involuntary dissolution, liquidation or winding up of the Company shall
at any time be proposed, the Company shall give at least twenty (20) days
prior written notice thereof to the registered holder hereof stating the
date on which such event is to take place and the date (which shall be at
least twenty (20) days after the giving of such notice) as of which the
holders of Common Stock for securities or other property deliverable upon
such dissolution, liqidation or winding up (on which date, in the event of
such dissolution, liquidation or winding up shall actually take place, this
Warrant and all rights with respect hereto, shall terminate). Notice
pursuant to this paragraph shall be given by first class mail, postage
prepaid, addressed to the registered holder of this Warrant at the address
of such holder appearing in the records of the company.
(e) For the purpose of the foregoing paragraphs (a) through (d) the
term "Common Stock" shall include all shares of Common Stock authorized by
the Company's Certificate of Incorporation, as from time to time amended,
which are not limited to a fixed sum or percentage of the par value in
respect of the right of holders thereof to participate in dividends or in
the distribution of assets upon the voluntary or involuntary dissolution or
winding up of the Company; provided, that the shares purchasable pursuant
to this Warrant shall include only shares of such class referred to in the
first paragraph hereof designated in the Company's Certificate of
Incorporation as Common Stock on the date of the original issue of this
Warrant and shall not, in the case of any reorganization, reclassification,
consolidation, merger or sale of assets of the character referred to in
subparagraph 3(a) or 3(b) hereof, the stock, securities or assets provided
for in such subparagraph
4. No Stockholder Rights. No holder of this Warrant shall be
entitled to any rights of a stockholder of the Company in respect of any
shares purchasable upon the exercise hereof until such shares have been
paid for in full and issued to such holder. As soon as practicable after
such exercise, and in any event within ten (10) days thereafter, the
Company shall deliver a certificate or certificates for the number of all
shares of Common Shares issuable upon such exercise, all of which shall be
validly issued, fully paid and non-assessable, and free of all taxes, lien
and charges with respect to the issue thereof, to the person or persons
entitled to receive the same, provided, however, that unless the Company
shall receive an opinion of counsel satisfactory to it that such a legend
is not required in order to assure compliance with the Securities Act of
1933, such certificate delivered to the holder of the surrendered Warrant
shall bear a legend reading substantially as follows:
"The shares represented by this certificate have
not been registered under the Securities Act of
1933. The Shares have been acquired for investment
and may not be sold or transferred in the absence
of an effective Registration Statement for the
shares under the Securities Act or an opinion of
counsel to the Company that registration is not
required under said Act."
5. Registration Under Securities Act. In the event the Company
determines to register any shares of Common Stock under the Securities Act
of 1933 (the "Act") (whether in connection with a public offering of
securities by the Company, a public offering of securities by stockholders
or warrantholders of the Company, or both, but not in connection with a
registration effected solely to implement a compensation plan or a
transaction to which Rule 145 under the Act or any successor provision if
applicable or which is otherwise effected on Form S-4 or any successor
thereto) the Company will use its best efforts to effect the registration
under the Act of all of the shares of Common Stock issuable upon exercise
of this Warrant, provided, however, that in the case of a registration of
Common Stock by the Company in an underwritten public offering said shares
of Common Stock shall not be registered in the event that the managing
underwriter of such offering shall advise the Company in writing that, in
the reasonable opinion of such managing underwriter, marketing factors
require a limitation on the number of shares of Common Stock to be included
in such offering. This limitation, however, shall be applied on a pro-rata
basis with all other security holders requesting inclusion in the said
registration. In connection with the filing of any such Registration
Statement, and as a condition to the inclusion therein of Common stock
issuable upon exercise of this Warrant, the holder or holders hereof shall
enter into such underwriting or indemnification agreement, in customary
form, as the Company shall request.
All direct costs associated with the registration shall be at the Company's
expense.
The rights set out in this section 5 shall survive any exercise of the
Warrant and shall accrue to the holder(s) of any Common Stock issued
pursuant to such exercise.
6. Reservation of Stock Issuable Upon Exercise. The Company shall
at all times reserve and keep available out of its authorized but unissued
shares of Common Stock, solely for the purpose of effecting the issuance of
the Shares upon exercise of the Warrant, such number of its shares of
Common Stock as shall from time to time be sufficient to provide for the
exercise of this Warrant, and if at any time the number of authorized but
unissued shares of Common Stock shall not be sufficient to provide for the
exercise of this Warrant, the Company will, subject to the requirements of
applicable state law, take such corporate action as may, in the option of
its counsel, be necessary to increase its authorized but unissued shares of
Common Stock to such number of shares of Common Stock as shall be
sufficient for such purposes.
7. Assignment. This warrant shall be assignable in whole or in
part without restrictions or limitations.
Barringer Technologies Inc.
By:______________________________
Stanley S. Binder
President
Dated: April 7, 1995
ATTEST:
__________________________
Kenneth S. Wood, Secretary
APPENDIX "A"
(To be executed by the registered
holder to exercise the right to
purchase Common Stock evidenced by the
within Warrant)
To Barringer Technologies Inc.
The undersigned hereby irrevocably subscribes for _________ shares of
your Common Stock pursuant to and in accordance with the terms and
conditions of this Warrant, and herewith makes payment of US $ ____________
therefore, and requests that a certificate for such be issued in the name
of the undersigned and be delivered to the undersigned at the address
stated below, and if said number of shares shall not be all of the shares
purchasable hereunder, that a new Warrant of like tenor for the balance of
the remaining shares purchasable hereunder be delivered of the remaining
shares purchasable hereunder be delivered to the undersigned at the address
stated below.
Dated: ____________________ Signed: ___________________________
Address: ___________________________
___________________________
