As filed with the Securities and Exchange Commission on April 14, 2000
Registration No. 33-06835
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-8
Registration Statement Under The Securities Act of 1933
HIDENET SECURE ARCHITECTURES, INC.
(formerly known as Savin Electronics, Inc.)
(Exact name of registrant as specified in its charter)
New Jersey 22-3061278
- -------------------------- -----------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
103 Medinat Hayehudim Street
P.O. Box 837
Herzliya, Israel 46733
----------------------
(Address of principal executive offices)
Common Stock Purchase Warrant
(Full title of the Plan)
The Corporation Trust Company
820 Bear Tavern Road
Trenton, New Jersey 08628
-------------------------
(Name and address of agent for service of process)
(609) 538-1818
--------------
(Telephone number, including area code, of agent for service)
Please send copies of all communications to:
Cohen Tauber Spievack & Wagner LLP
1350 Avenue of the Americas
New York, New York 10019
Attn: Lawrence Tauber, Esq.
(212) 519-5195
CALCULATION OF REGISTRATION FEE
- -------------------------- ------------- --------- ------------- ----------
Proposed
Maximum Proposed Amount
Title of Amount To Offering Maximum of
Securities To Be Be Price Aggregate Registration
Registered Registered Per Offering Fee
Share Price
Common Stock, par value 500,000 $0.125 $ 62,500.00 $16.50
$.025 per share shares (1) (2)
- -------------------------- ------------- --------- ------------- ----------
(1) Represents the number of shares of common stock of the Registrant issued to
the holder of a Warrant upon exercise of such Warrant.
(2) Based on the exercise price of the Warrant.
<PAGE>
This Registration Statement includes a form of prospectus to be used by a
person who may be deemed to be an affiliate of Hidenet Secure Architectures,
Inc. in connection with the resale of shares of its common stock received by
such person pursuant to the exercise of the Common Stock Purchase Warrant.
PROSPECTUS
HIDENET SECURE ARCHITECTURES, INC.
500,000 Shares of Common Stock
We have prepared this Prospectus so that one of our officers and directors
may resale his shares of common stock acquired upon exercise of the Common Stock
Purchase Warrant.
Our Common Stock is not listed on a national securities exchange or on the
Nasdaq Stock Market. There is limited trading of our Common Stock. To the extent
that trading has taken place such transactions have been limited to the
over-the-counter market by broker-dealer(s) making a market in the National
Quotation Data Service ("pink sheets") and/or in the Electronic Over-the-Counter
Bulletin Board (the latter under the symbol "SVPS").
OUR COMMON STOCK IS A SPECULATIVE INVESTMENT AND INVOLVES A HIGH DEGREE OF
RISK. YOU SHOULD READ THE DESCRIPTION OF CERTAIN RISKS UNDER THE CAPTION "RISK
FACTORS" BEGINNING ON PAGE 2 BEFORE PURCHASING OUR COMMON STOCK.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE
ADEQUACY OR ACCURACY OF THE PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
We have filed a Registration Statement on Form S-8, with the Securities
and Exchange Commission (the "SEC") under the Securities Act of 1933, as amended
(the "Securities Act"), to register the shares issued under the Common Stock
Purchase Warrant. This Prospectus is a part of that Registration Statement. This
Prospectus does not contain all of the information you can find in the
Registration Statement and the exhibits and schedules to the Registration
Statement, certain parts of which are omitted in accordance with the rules and
regulations of the Commission. We distribute to our shareholders annual reports
containing audited financial statements.
The date of this Prospectus is April 14, 2000.
<PAGE>
We file annual, quarterly and special reports, proxy statements and other
information with the SEC. You may read and copy any reports, statements or other
information we file at the SEC's Public Reference Room at 450 Fifth Street,
N.W., Washington, D.C. 20549. You may call the SEC at 1-800-SEC-0330 for further
information on the Public Reference Room. Our SEC filings are also available to
the public from commercial document retrieval services and at the web site
maintained by the SEC at www.sec.gov.
RISK FACTORS
Investing in the Company's Common Stock is very risky. You should
carefully consider the following factors and other information in this
Prospectus before deciding to buy our Common Stock. If you are not in a
financial position to bear a complete loss of your investment, you should not
purchase any of the shares. Some of the information in this prospectus and the
documents we incorporate by reference may contain forward-looking statements.
These statements can be identified by the use of forward-looking terminology
such as "may," "will," "expect," "believe," "intend," "anticipate," "estimate,"
"continue" or similar words. They discuss future expectations, estimate the
happening of future events, anticipate our future financial condition or state
other "forward-looking" information. When considering such forward-looking
statements, you should keep in mind the risk factors and other cautionary
statements in this prospectus and the documents that we incorporate by
reference. The risk factors provided in this prospectus and other factors noted
throughout this prospectus and the documents that we incorporate by reference,
including certain risks and uncertainties, could cause our actual results to
differ materially from those contained in any forward-looking statement.
We have never had any revenues since our inception and we have no current
operations.
We currently intend to develop and market products in the field of network
data security through our wholly-owned subsidiary Hidenet Secure Architecture,
Ltd., an Israeli corporation. We are still in the development stage of a
marketable product. Said subsidiary is working on a compact, comprehensive and
easy-to-use security software for personal and corporate markets. Even if the
products are brought to market, there is no likelihood that the sale of the
products will be sufficient to cover our operations. We estimate that sale of
our products will begin in the middle of 2000, but there is no assurance that
the products will be ready for market at that time or that we will be able to
secure customers.
<PAGE>
Competition in the network data security business is intense. Some of the
companies in the network data security business have significantly greater
financial, product development, manufacturing and marketing resources than ours
and may be able to devote greater resources to the development, promotion and
sale of their products. They may also develop network data security systems and
technologies that are superior to or have greater market acceptance than ours
and they may also engage in more extensive research and development, undertake
more extensive marketing campaigns, and adopt more aggressive pricing policies
than we may be able to do. All of these factors would make it more difficult to
market our products effectively and to become profitable.
Our failure to obtain additional financing, to develop a product which is
marketable, rapid technological changes in the environment, frequent new product
introductions by others in the industry with greater resources, competition in
the marketplace and evolving industry standards and customer preferences which
are difficult to predict, the introduction of products embodying new
technologies and the emergence of new industry standards could render the
Company's product, if it is even developed, as well as any potential new
products, obsolete and unmarketable. Such constant technological changes also
make accurate market predictions difficult.
If we are unable to attract, train and retain key management, technical,
manufacturing, sales and support personnel, development and introduction of the
products will be delayed and our personnel costs will increase.
If we are unable to obtain and subsequently protect our patent rights,
know-how and trade secrets, we may not succeed as a business. In developing our
products, we will use patented technology. We will rely on patents to protect us
against competitors using the same technology in their products. However, other
companies could violate, challenge the validity of, or attempt to circumvent our
patent rights. They could also assert patent infringement claims against us.
Confidentiality agreements that we require our employees to sign may not deter
them from disclosing our unpatented know-how and other trade secrets to our
competitors or from using that intellectual property themselves to compete
against us. In any of those cases, we could be required to spend significant
financial and management resources to protect or defend our rights, and we might
not have adequate resources to undertake a defense.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The SEC allows us to "incorporate by reference" information into this
Prospectus, which means that we can disclose important information to you be
referring you to another document filed separately with the SEC. The information
incorporated by reference is deemed to be part of this Prospectus, except for
any information superseded by information in, or incorporated by reference in,
this Prospectus. This Prospectus incorporates by reference the following
documents that we have previously filed with the SEC. These documents contain
important information about our company and its finances.
1. The Annual Report on Form 10-KSB for the fiscal year ended December
31, 1998.
2. All other reports filed pursuant to Section 13(a) or 15(d) of the
Exchange Act since the end of the fiscal year covered by the annual
report referred to in (1) above.
<PAGE>
You may request a copy of these filings or all of the documents which we
incorporate by reference in this Prospectus (other than exhibits to such
documents, unless such exhibits are specifically incorporated by reference into
such documents) at no cost by writing or calling us at Hidenet Secure
Architectures, Inc., 103 Medinat Hayehudim Street, P.O. Box 837, Herzliya,
Israel 46733. Telephone: 011-972-9-957-9795.
USE OF PROCEEDS
We will not receive any of the proceeds from the common stock, but will
receive the exercise price of approximately $62,500 upon the exercise of the
Common Stock Purchase Warrant. We expect to use the proceeds for working capital
and general corporate purposes.
SELLING STOCKHOLDER
The following table sets forth (i) the name of the Selling Stockholder,
(ii) the nature of any position, office, or other material relationship which
the Selling Stockholder has had with the Company or any of its affiliates within
the last three years, (iii) the number of shares of Common Stock owned by the
Selling Stockholder prior to the offering, (iv) the number of shares of Common
Stock offered for the Selling Stockholder's account, and (v) the number of
shares of Common Stock and the percentage owned by the Selling Stockholder after
completion of the offering.
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<TABLE>
<CAPTION>
Percentage
Number of Number Number of Owned
Selling Relationship Shares Owned of Shares Owned After
Stockholder to Company Prior to Shares After Offering Offering(1)
Offering to be Sold
- ----------------- --------------- -------------- ----------- ---------------- -----------
<S> <C> <C> <C> <C> <C>
Ron Fussman President, 3,521,986(2)(3)(4) 500,000 4,021,986(2)(3)(4) 62.53%
Secretary and
Director
</TABLE>
(1) Computed on the basis of 4,639,600 shares of Common Stock outstanding
as of April 14, 2000.
(2) Includes 1,100 which are owned of record by Universal Eagle Ltd., a
firm under the control of Mr. Fussman by virtue of the fact that he is
President of such corporation. Accordingly, Mr. Fussman may be
considered to be the beneficial owner of such securities.
(3) Includes 3,000,000 shares owned by IBDH, LLC, a Delaware limited
liability company, over which Mr. Fussman has sole voting power.
(4) Includes 520,886 shares owned by Royce Investment Group which is
controlled by Mr. Fussman and accordingly, Mr. Fussman may be
considered to be the beneficial owner of such shares.
Ron Fussman was President, Secretary, Treasurer and a Director of the
Company from March, 1996 until his resignation in April, 1996 and thereafter
served as an independent business consultant to the Company until assuming his
current positions with the Company in May of 1997. Mr. Fussman also serves as
President and control person of Universal Eagle which was founded by him in 1988
for purposes of providing business and financial consulting services.
<PAGE>
PLAN OF DISTRIBUTION
The Selling Stockholder may sell shares from time to time in public
transactions, at prevailing market prices or at privately negotiated prices,
including but not limited to, one or any combination of the following types of
transactions: ordinary brokers' transactions, transactions involving cross or
block trades, purchases by brokers, dealers or underwriters as principal and
resale by such purchasers for their own accounts pursuant to this Prospectus,
"at the market" to or through market makers or into an existing market for the
Common Stock, in other ways not involving market makers or established trading
markets, including direct sales to purchasers or sales effected through agents,
through transactions in options, swaps or other derivatives (whether
exchange-listed or otherwise), in privately negotiated transactions, or to cover
short sales.
In effecting sales, brokers or dealers engaged by the Selling Stockholder
may arrange for other brokers or dealers to participate in the resales. The
Selling Stockholder may enter into hedging transactions with broker-dealers, and
in connection with those transactions, broker-dealers may engage in short sales
of the shares. The Selling Stockholder also may sell shares short and deliver
the shares to close out such short positions. The selling stockholders also may
enter into option or other transactions with broker-dealers that require the
delivery to the broker-dealer of the shares, which the broker-dealer may resell
pursuant to this Prospectus. The Selling Stockholder also may pledge the shares
to a broker or dealer, and upon a default, the broker or dealer may effect sales
of the pledged shares pursuant to this Prospectus.
Brokers, dealers or agents may receive compensation in the form of
commissions, discounts or concessions from Selling Stockholder in amounts to be
negotiated in connection with the sale. The Selling Stockholder and any
participating brokers or dealers may be deemed to be "underwriters" within the
meaning of the Securities Act in connection with such sales and any such
commission, discount or concession may be deemed to be underwriting
compensation.
Information as to whether underwriters who the Selling Stockholder may
select, or any other broker-dealer, is acting as principal or agent for the
Selling Stockholder, the compensation to be received by underwriters that the
Selling Stockholder may select or by any broker-dealer acting as principal or
agent for the Selling Stockholder, and the compensation to be paid to other
broker-dealers, in the event the compensation of such other broker-dealers is in
excess of usual and customary commissions, will, to the extent required, be set
forth in a supplement to this prospectus. Any dealer or broker participating in
any distribution of the shares may be required to deliver a copy of this
prospectus, including a prospectus supplement, if any, to any person who
purchases any of the shares from or through such dealer or broker.
<PAGE>
We have advised the Selling Stockholder that during such time as he may be
engaged in a distribution of the shares he is required to comply with Regulation
M promulgated under the Securities Exchange Act. With certain exceptions,
Regulation M precludes any selling stockholder, any affiliated purchasers and
any broker-dealer or other person who participates in such distribution from
bidding for or purchasing, or attempting to induce any person to bid for or
purchase any security that is the subject of the distribution until the entire
distribution is complete. Regulation M also prohibits any bids or purchases made
in order to stabilize the price of a security in connection with the
distribution of that security. All of the foregoing may affect the marketability
of the Common Stock.
LEGAL MATTERS
The validity of the shares of Common Stock offered by this Prospectus has
been passed upon for us by, Cohen Tauber Spievack & Wagner LLP, 1350 Avenue of
the Americas, New York, New York 10019
EXPERTS
Our consolidated financial statements and schedules for each of the years
in the two-year period ended December 31, 1998, have been incorporated by
reference herein in reliance upon the report of Kost Forer & Gabbay, a member of
Ernst & Young International, independent certified public accountants, and upon
the authority of said firm as experts in accounting and auditing.
COMMISSION POSITION ON THE INDEMNIFICATION FOR SECURITIES
ACT LIABILITIES
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted for our directors, officers and controlling persons
pursuant to the foregoing provisions or otherwise, we have been advised that, in
the opinion of the Securities and Exchange Commission, such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable.
<PAGE>
Part II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents filed by the Registrant with the Security and
Exchange Commission (the "Commission") are incorporated by reference herein:
(1) The Registrant's Annual Report on Form 10-KSB, for the fiscal year ended
December 31, 1998.
(2) All reports and other documents filed by the Registrant pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act") subsequent to the date of this Registration Statement and
prior to the filing of a post-effective amendment to this Registration Statement
which indicate that all securities offered hereby have been sold or which
deregisters all securities then remaining unsold, shall be deemed to be
incorporated by reference in and made a part of this Registration Statement from
the date of filing of such documents.
(3) All reports and other documents hereafter filed by the Registrant pursuant
to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act prior to the filing of
a post-effective amendment which indicates that all securities offered hereby
have been sold or which deregisters; all securities then remaining unsold, shall
hereby be deemed to be incorporated in and to be a part of this registration
statement by reference from the date of filing of such documents. Any statement
contained herein or in a document or report incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for all purposes to the extent that a statement contained herein or in any
subsequently filed document which also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any statement so
modified or superseded shall not be deemed, except as modified or superseded, to
constitute a part of this registration statement.
(4) The Registrant hereby undertakes to provide without charge to each person to
whom a copy of this Prospectus has been delivered upon the written or oral
request of any such person, a copy of any or all of the documents that have been
or may be incorporated by reference into this Prospectus, other than exhibits to
such documents (unless such exhibits are specifically incorporated by reference
in such documents). Requests for such copies should be directed to Corporate
Secretary, Hidenet Service Architectures, Inc., 103 Medinat Hayehudim Street,
P.O. Box 837, Herzliya, 46733 Israel.
Item 4. Description of Securities.
Not applicable.
<PAGE>
Item 5. Interests of Named Experts and Counsel.
Not applicable.
Item 6. Indemnification of Directors and Officers.
The Registrant's Articles of Incorporation provides that directors and
officers are indemnified to the fullest extent permitted by Section 14A:3-5 of
the New Jersey Business Corporation Act (the "NJBCA"). Generally, the NJBCA
provides that directors and officers of New Jersey corporations are entitled,
under certain circumstances to be indemnified against all expenses and
liabilities (including attorneys' fees) incurred by them as a result of any suit
brought against them in their capacity as a director or officer if such director
or officer acted in good faith and in a manner reasonably believed to be in or
not opposed to the best interests of the corporation, and, with respect to any
criminal action or proceeding, if they had no reasonable cause to believe their
conduct was unlawful.
The Registrant's Articles of Incorporation further provides that the
personal liability of its directors be limited to the fullest extent permitted
by Section 14A:2-7(3) of the NJBCA, which generally provides that its directors
shall not be personally liable for damages for breach of duty owed to the
Registrant and its shareholders except that such provision shall not relieve a
director from liability for breach of duty based upon a breach of such
director's duty of loyalty to the Registrant or its shareholders not in good
faith or involving a knowing violation of the law or improper personal benefit
to the director.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933, as amended (the "Securities Act") may be permitted to directors,
officers or persons controlling the Registrant pursuant to the foregoing
provisions or otherwise, the Registrant has been informed that in the opinion of
the Commission such indemnification is against public policy as expressed in the
Securities Act and is therefore unenforceable.
Item 7. Exemption From Registration Claimed.
Not applicable.
Item 8. Exhibits.
4.1 Articles of Incorporation (filed as Exhibit 3.1 to the
Registrant's Registration Statement on Form S-18 (No. 33-36670)
filed on August 30, 1990 and incorporated herein by reference)
4.2 Bylaws (filed as Exhibit 3.2 to the Registrant's Registration
Statement on Form S-18 (No. 33-36670) filed August 30, 1990 and
incorporated herein by reference)
4.3 Certificate of Amendment to the Certificate of Incorporation of
Savin Electronics Ltd. filed March 18, 1996
<PAGE>
4.5 Common Stock Purchase Warrant
5.1 Opinion of Consent of Cohen Tauber Spievack & Wagner LLP
23.1 Consent of Consent of Cohen Tauber Spievack & Wagner LLP
(included in Exhibit 5.1)
23.2 Consent of Kost Forer & Gabbay, a member of Ernst & Young
International
Item 9. Undertakings.
(1) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement:
(1) to include any prospectus required by Section 10(a)(3) of the
Securities Act, unless the information required to be included in
such post-effective amendment is contained in a periodic report
required to be filed by the Registrant or plan pursuant to
Section 13 or 15(d) of the Exchange Act that is incorporated
herein by reference;
(2) to reflect in the prospectus any facts or events arising after
the effective date of the Registration Statement (or the most
recent post-effective amendment thereof) which, individually or
in the aggregate, represent a fundamental change in the
information set forth in the Registration Statement, unless the
information required to be included in such post-effective
amendment is contained in a periodic report filed by the
Registrant or plan pursuant to Section 13 or 15(d) of the
Exchange Act that is incorporated herein by reference;
(3) to include any material information with respect to the plan of
distribution not previously disclosed in the Registration
Statement or any material change to such information in the
Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to
be a new Registration Statement related to the securities offered
therein, and the offering of such securities at the time shall be
deemed to be the initial bona fide offering thereof and, where
applicable, each filing of any employee benefit plan's annual report
pursuant to Section 15(d) of the Exchange Act that is incorporated by
reference in this Registration Statement shall be deemed to be a new
Registration Statement relating to the securities offered herein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
<PAGE>
(2) Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers, and controlling persons of the
Registrant pursuant to the foregoing provisions or otherwise, the
Registrant has been advised that in the opinion of the Commission, such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment of the Registrant of
expenses incurred or paid by the director, officer or controlling person of
the Registrant in the successful defense of any action, suit, or
proceeding) is asserted by such director, officer, or controlling person in
connection with the securities being registered, the Registrant will,
unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets the
requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the city of Herzliya, State of Israel, on April 14, 2000. HIDENET
SECURE ARCHITECTURES, INC.
By: /s/ Ron Fussman
-------------------------
Ron Fussman, President
By: /s/ Avrum Savran
-------------------------
Avrum Savran, Chairman and Treasurer
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Registration Statement has been signed below on April 14, 2000, by the following
persons in the capacities indicated.
SIGNATURE TITLE
/s/ Avrum Savran Chairman, Treasurer
- ------------------
Avrum Savran
/s/ Ron Fussman Director, President, Secretary
- ------------------
Ron Fussman
<PAGE>
EXHIBITS INDEX
Exhibit No. Description of Exhibit
4.1 Articles of Incorporation (filed as Exhibit 3.1 to the Registrant's
Registration Statement on Form S-18 (No. 33-36670) filed on August 30,
1990 and incorporated herein by reference)
4.2 Bylaws (filed as Exhibit 3.2 to the Registrant's Registration
Statement on Form S-18 (No. 33-36670) filed August 30, 1990 and
incorporated herein by reference)
*4.3 Certificate of Amendment to the Certificate of Incorporation of Savin
Electronics Ltd. filed March 18, 1996
*4.5 Common Stock Purchase Warrant
*5.1 Opinion of Cohen Tauber Spievack & Wagner LLP
23.1 Consent of Cohen Tauber Spievack & Wagner LLP (included in Exhibit
5.1)
*23.2 Consent of Kost Forer & Gabbay, a member of Ernst & Young
International
- ----------
*Filed herewith
<PAGE>
TABLE OF CONTENTS
PAGE
RISK FACTORS.................................................................2
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE..............................3
USE OF PROCEEDS..............................................................4
SELLING STOCKHOLDER..........................................................4
PLAN OF DISTRIBUTION.........................................................5
LEGAL MATTERS................................................................6
EXPERTS......................................................................6
MATERIAL CHANGES.............................................................6
COMMISSION POSITION ON THE INDEMNIFICATION FOR SECURITIES ACT LIABILITIES....6
CERTIFICATE OF AMENDMENT TO THE
CERTIFICATE OF INCORPORATION OF
SAVIN ELECTRONICS LTD.
To: The Secretary of State
State of New Jersey
Pursuant to the provisions of Section 14A:9-2(4) and Section 14A:9-4(3),
Corporations, General, of the New Jersey Statutes, the undersigned corporation
executed the following Certificate of Amendment to its Certificate of
Incorporation:
1. The name of the corporation is Savin Electronics Ltd.
2. The following amendment to the Certificate of Incorporation was
approved by the directors and thereafter duly adopted by the shareholders of the
corporation on the 13th day of March, 1996.
RESOLVED, that Articles FIRST, SECOND, FOURTH and NINTH of the
Certificate of Incorporation be amended to read as follows:
FIRST: The name of the corporation is Savin Electronics Inc.
SECOND: The name and address of the registered agent in this
state is The Corporation Trust Company, 820 Bear Tavern Road,
West Trenton, New Jersey 08628.
FOURTH: The total number of shares of stock which the Corporation
shall have authority to issue is Fifteen Million (15,000,000).
The Par value of each of such shares is $.0001. All such shares
are of one class and are shares of common stock.
NINTH: The shareholders shall not have any cumulative voting
rights and any pre-emptive rights.
4. The number of shares entitled to vote upon the amendment was
455,000.
5. That in lieu of a meeting and vote of the shareholders and in
accordance with the provisions of Section 14A:5-6, the amendment was
adopted by the shareholders without a meeting pursuant to the written
consents of the shareholders and the number of shares represented by
such consents is 450,000 shares.
6. The effective date of this Amendment to the Certificate of
Incorporation shall be March 13, 1996 or as soon thereafter as
possible.
Dated this 13th day of March, 1996.
SAVIN ELECTRONICS LTD.
By: /s/ Ron Fussman
-----------------
Ron Fussman, President
THIS COMMON STOCK PURCHASE WARRANT AND THE SECURITIES REPRESENTED HEREBY HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE
TRANSFERRED IN VIOLATION OF SUCH ACT, THE RULES AND REGULATIONS THEREUNDER OR
THE PROVISIONS OF THIS COMMON STOCK PURCHASE WARRANT.
Number of Shares of Common Stock: 500,000
COMMON STOCK PURCHASE WARRANT
To Purchase Common Stock of
HIDENET SECURE ARCHITECTURES, INC.
THIS IS TO CERTIFY THAT Royce Investment Group ("RIG"), or its
designees or assigns, is entitled, at any time from and after June 11, 1999 to
the Expiration Date (as hereinafter defined), to purchase from Hidenet Secure
Architectures, Inc., a New Jersey corporation (the "Company"), 500,000 shares of
Common Stock (as hereinafter defined and subject to adjustment as provided
herein), in whole or in part at a purchase price equal to $.125 per share, all
on the terms and conditions and pursuant to the provisions hereinafter set
forth. This warrant is the warrant referred to in Section 5.3 of the Agreement
dated June 11, 1999 between the Company, RIG, Uriel Ginzburg, Jonathan Levin and
John Federman.
1. DEFINITIONS
As used in this Common Stock Purchase Warrant (this "Warrant"), the
following terms have the respective meanings set forth below:
"Additional Shares of Common Stock" shall mean all shares of Common
Stock issued by the Company after the date hereof, other than Warrant Shares.
"Business Day" shall mean any day that is not a Saturday or Sunday
or a day on which banks are required or permitted to be closed in the State of
New York.
"Commission" shall mean the Securities and Exchange Commission or
any other federal agency then administering the Securities Act and other federal
securities laws.
"Common Stock" shall mean (except where the context otherwise
indicates) the Common Stock of the Company, and any capital stock into which
such Common Stock may thereafter be changed, and shall also include (i) capital
stock of the Company of any other class (regardless of how denominated) issued
to the holders of shares of Common Stock upon any reclassification thereof which
is also not preferred as to dividends or assets over any other class of stock of
the Company and which is not subject to redemption and (ii) shares of common
stock of any successor or acquiring corporation received by or distributed to
the holders of Common Stock of the Company in the circumstances contemplated by
Section 4.4.
<PAGE>
"Current Warrant Price" shall mean, in respect of a share of Common
Stock at any date herein specified, the price at which a share of Common Stock
may be purchased pursuant to this Warrant on such date.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, or any successor federal statute, and the rules and regulations of the
Commission thereunder, all as the same shall be in effect from time to time.
"Exercise Period" shall mean the period during which this Warrant is
exercisable pursuant to Section 2.1.
"Expiration Date" shall mean the date which is the earlier of (i)
three years from and after the consummation of the sale by the Company of
1,000,000 shares of Common Stock for net cash consideration of at least
$100,000, or (ii) October 9, 2002.
"Holder" shall mean the Person in whose name the Warrant or Warrant
Shares set forth herein is registered on the books of the Company maintained for
such purpose.
"Other Property" shall have the meaning set forth in Section 4.4.
"Outstanding" shall mean, when used with reference to Common Stock,
at any date as of which the number of shares thereof is to be determined, all
issued shares of Common Stock, except shares then owned or held by or for the
account of the Company or any subsidiary thereof, and shall include all shares
issuable in respect of outstanding scrip or any certificates representing
fractional interests in shares of Common Stock.
"Person" shall mean any individual, sole proprietorship,
partnership, joint venture, trust, incorporated organization, association,
corporation, institution, public benefit corporation, entity or government
(whether federal, state, county, city, municipal or otherwise, including,
without limitation, any instrumentality, division, agency, body or department
thereof).
"Securities Act" shall mean the Securities Act of 1933, as amended,
or any successor federal statute, and the rules and regulations of the
Commission thereunder, all as the same shall be in effect at the time.
"Warrants" shall mean this Warrant and all warrants issued upon
transfer, division or combination of, or in substitution for, any thereof. All
Warrants shall at all times be identical as to terms and conditions and date,
except as to the number of shares of Common Stock for which they may be
exercised.
"Warrant Price" shall mean an amount equal to (i) the number of
shares of Common Stock being purchased upon exercise of this Warrant pursuant to
Section 2.1, multiplied by (ii) the Current Warrant Price as of the date of such
exercise.
"Warrant Shares" shall mean the shares of Common Stock purchased by
the holders of the Warrants upon the exercise thereof.
<PAGE>
2. EXERCISE OF WARRANT
2.1 Manner of Exercise. From and after the date hereof and until 5:00
P.M., New York City time, on the Expiration Date, Holder may exercise this
Warrant, on any Business Day, in whole or in increments of 10,000 shares of
Common Stock purchasable hereunder.
In order to exercise this Warrant, in whole or in part, Holder shall
deliver to the Company at its principal office at 103 Medinat Hayehudim Street,
POB837, Herzliya, Israel 46733, or at the office or agency designated by the
Company pursuant to Section 12, (i) a written notice of Holder's election to
exercise this Warrant, which notice shall specify the number of shares of Common
Stock to be purchased, (ii) payment of the Warrant Price in cash or by wire
transfer or cashier's check drawn on a United States bank and (iii) this
Warrant. Such notice shall be substantially in the form of the subscription form
appearing at the end of this Warrant as Exhibit A, duly executed by Holder or
its agent or attorney. Upon receipt of the items referred to in clauses (i),
(ii) and (iii) above, the Company shall, as promptly as practicable, and in any
event within ten (10) Business Days thereafter, execute or cause to be executed
and deliver or cause to be delivered to Holder a certificate or certificates
representing the aggregate number of full shares of Common Stock issuable upon
such exercise, together with cash in lieu of any fraction of a share, as
hereinafter provided. The stock certificate or certificates so delivered shall
be, to the extent possible, in such denomination or denominations as Holder
shall request in the notice and shall be registered in the name of Holder or,
subject to Section 9, such other name as shall be designated in the notice. This
Warrant shall be deemed to have been exercised and such certificate or
certificates shall be deemed to have been issued, and Holder or any other Person
so designated to be named therein shall be deemed to have become a holder of
record of such shares for all purposes, as of the date the notice, together with
the cash or check or checks and this Warrant, is received by the Company as
described above and all taxes required to be paid by Holder, if any, pursuant to
Section 2.2 prior to the issuance of such shares have been paid. If this Warrant
shall have been exercised in part, the Company shall, at the time of delivery of
the certificate or certificates representing Warrant Shares, deliver to Holder a
new Warrant evidencing the rights of Holder to purchase the unpurchased shares
of Common Stock called for by this Warrant, which new Warrant shall in all other
respects be identical with this Warrant, or, at the request of Holder,
appropriate notation may be made on this Warrant and the same returned to
Holder. Notwithstanding any provision herein to the contrary, the Company shall
not be required to register shares in the name of any Person who acquired this
Warrant (or part hereof) or any Warrant Shares otherwise than in accordance with
this Warrant.
2.2 Payment of Taxes and Charges. All shares of Common Stock issuable upon
the exercise of this Warrant pursuant to the terms hereof shall be validly
issued, fully paid and nonassessable. The Company shall pay all expenses in
connection with, and all taxes and other governmental charges (excluding income
and related taxes) that may be imposed with respect to, the issue or delivery
thereof, unless such tax or charge is imposed by law upon Holder, in which case
such taxes or charges shall be paid by Holder. The Company shall not be
required, however, to pay any tax or other charge imposed in connection with any
transfer involved in the issue of any certificate for shares of Common Stock
issuable upon exercise of this Warrant in any name other than that of Holder,
and in such case the Company shall not be required to issue or deliver any stock
certificate until such tax or other charge has been paid or it has been
established to the satisfaction of the Company that no such tax or other charge
is due.
<PAGE>
2.3 Fractional Shares. The Company shall not be required to issue a
fractional share of Common Stock upon exercise of any Warrant. As to any
fraction of a share which Holder would otherwise be entitled to purchase upon
such exercise, the Company shall pay a cash adjustment in respect of such final
fraction in an amount equal to the same fraction of the Market Price per share
of Common Stock as of the date of exercise.
2.4 Continued Validity. A holder of shares of Common Stock issued upon the
exercise of this Warrant, in whole or in part (other than a holder who acquires
such shares after the same have been publicly sold pursuant to a Registration
Statement under the Securities Act or sold pursuant to Rule 144 thereunder),
shall continue to be entitled with respect to such shares to all rights to which
it would have been entitled as Holder under Sections 10 and 13 of this Warrant.
The Company will, at the time of exercise of this Warrant, in whole or in part,
upon the request of Holder, acknowledge in writing, in form reasonably
satisfactory to Holder, its continuing obligation to afford Holder all such
rights; provided, however, that if Holder shall fail to make any such request,
such failure shall not affect the continuing obligation of the Company to afford
to Holder all such rights.
3. TRANSFER, DIVISION AND COMBINATION
3.1 Transfer. Transfer of this Warrant and all rights hereunder, in whole
or in part, shall be registered on the books of the Company to be maintained for
such purpose, upon surrender of this Warrant at the principal office of the
Company referred to in Section 2.1 or the office or agency designated by the
Company pursuant to Section 11, together with a written assignment of this
Warrant substantially in the form of Exhibit B hereto duly executed by Holder or
its agent or attorney and funds sufficient to pay any transfer taxes payable
upon the making of such transfer. Upon such surrender and, if required, such
payment, the Company shall execute and deliver a new Warrant or Warrants in the
name of the assignee or assignees and in the denomination specified in such
instrument of assignment, and shall issue to the assignor a new Warrant
evidencing the portion of this Warrant not so assigned, and this Warrant shall
promptly be cancelled. A Warrant may be exercised by a new Holder for the
purchase of shares of Common Stock without having a new warrant issued.
3.2 Division and Combination. Subject to Section 3.1, this Warrant may be
divided or combined with other Warrants upon presentation hereof at the
aforesaid office or agency of the Company, together with a written notice
specifying the names and denominations in which new Warrants are to be issued,
signed by Holder or its agent or attorney. Subject to compliance with Section
3.1, as to any transfer which may be involved in such division or combination,
the Company shall execute and deliver a new Warrant or Warrants in exchange for
the Warrant or Warrants to be divided or combined in accordance with such
notice.
3.3 Expenses. The Company shall prepare, issue and deliver at its own
expense (other than transfer taxes) the new Warrant or Warrants under this
Section 3.
3.4 Maintenance of Books. The Company agrees to maintain, at its aforesaid
office or agency, books for the registration and the registration of transfer of
the Warrants.
<PAGE>
4. ADJUSTMENTS
The number of shares of Common Stock for which this Warrant is
exercisable, or the price at which such shares may be purchased upon exercise of
this Warrant, shall be subject to adjustment from time to time as set forth in
this Section 4. The Company shall give Holder notice of any event described
below which requires an adjustment pursuant to this Section 4 at the time of
such event.
4.1 Stock Dividends, Subdivisions and Combinations. If at any time
the Company shall:
(a) take a record of the holders of its Common Stock for the purpose
of entitling them to receive a dividend payable in, or other distribution
of, Additional Shares of Common Stock,
(b) subdivide its outstanding shares of Common Stock into a
larger number of shares of Common Stock, or
(c) combine its outstanding shares of Common Stock into a
smaller number of shares of Common Stock,
then (i) the number of shares of Common Stock for which this Warrant is
exercisable immediately after the occurrence of any such event shall be adjusted
to equal the number of shares of Common Stock which a record holder of the same
number of shares of Common Stock for which this Warrant is exercisable
immediately prior to the occurrence of such event would own or be entitled to
receive after the happening of such event, and (ii) the Current Warrant Price
shall be adjusted to equal (A) the Current Warrant Price multiplied by the
number of shares of Common Stock for which this Warrant is exercisable
immediately prior to the adjustment divided by (B) the number of shares for
which this Warrant is exercisable immediately after such adjustment.
4.2 Certain Other Distributions. If at any time the Company shall
take a record of the holders of its Common Stock for the purpose of entitling
them to receive any dividend or other distribution of:
(a) cash,
(b) any evidences of its indebtedness, any shares of its stock or
any other securities or property of any nature whatsoever (other than
cash, Convertible Securities or Additional Shares of Common Stock), or
(c) any warrants or other rights to subscribe for or purchase any
evidences of its indebtedness, any shares of its stock or any other
securities or property of any nature whatsoever (other than cash,
Convertible Securities or Additional Shares of Common Stock),
<PAGE>
then Holder shall be entitled to receive such dividend or distribution as if
Holder had exercised this Warrant. A reclassification of the Common Stock (other
than a change in par value, or from par value to no par value or from no par
value to par value) into shares of Common Stock and shares of any other class of
stock shall be deemed a distribution by the Company to the holders of its Common
Stock of such shares of such other class of stock within the meaning of this
Section 4.2 and, if the outstanding shares of Common Stock shall be changed into
a larger or smaller number of shares of Common Stock as a part of such
reclassification, such change shall be deemed a subdivision or combination, as
the case may be, of the outstanding shares of Common Stock within the meaning of
Section 4.1.
4.3 Other Provisions Applicable to Adjustments under this Section. The
following provisions shall be applicable to the making of adjustments of the
number of shares of Common Stock for which this Warrant is exercisable and the
Current Warrant Price provided for in this Section 4:
(a) When Adjustments to Be Made. The adjustments required by this
Section 4 shall be made whenever and as often as any specified event
requiring an adjustment shall occur. For the purpose of any adjustment,
any specified event shall be deemed to have occurred at the close of
business on the date of its occurrence.
(b) Fractional Interests. In computing adjustments under this
Section 4, fractional interests in Common Stock shall be taken into
account to the nearest 1/10th of a share.
(c) When Adjustment Not Required. If the Company shall take a record
of the holders of its Common Stock for the purpose of entitling them to
receive a dividend or distribution or subscription or purchase rights and
shall, thereafter and before the distribution to stockholders thereof,
legally abandon its plan to pay or deliver such dividend, distribution,
subscription or purchase rights, then thereafter no adjustment shall be
required by reason of the taking of such record and any such adjustment
previously made in respect thereof shall be rescinded and annulled.
(d) Challenge to Good Faith Determination. Whenever the Board of
Directors of the Company shall be required to make a determination in good
faith of the fair value of any item under this Section 4, such
determination may be challenged in good faith by the Holder, and any
dispute shall be resolved by an investment banking firm of recognized
national standing selected by the Company and reasonably acceptable to the
Holder.
<PAGE>
4.4 Reorganization, Reclassification, Merger, Consolidation or Disposition
of Assets. If the Company shall reorganize its capital, reclassify its capital
stock, consolidate or merge with or into another corporation (where the Company
is not the surviving corporation or where there is a change in or distribution
with respect to the Common Stock of the Company), or sell, transfer or otherwise
dispose of all or substantially all of its property, assets or business to
another corporation and, pursuant to the terms of such reorganization,
reclassification, merger, consolidation or disposition of assets, shares of
common stock of the successor or acquiring corporation, or any cash, shares of
stock or other securities or property of any nature whatsoever (including
warrants or other subscription or purchase rights) in addition to or in lieu of
common stock of the successor or acquiring corporation ("Other Property"), are
to be received by or distributed to the holders of Common Stock of the Company,
then Holder shall have the right thereafter to receive, upon exercise of the
Warrant within ten (10) business days following the Company's notice of such
event, the number of shares of common stock of the successor or acquiring
corporation or of the Company, if it is the surviving corporation, and Other
Property receivable upon or as a result of such reorganization,
reclassification, merger, consolidation or disposition of assets by a holder of
the number of shares of Common Stock for which this Warrant is exercisable
immediately prior to such event. In the case of any such reorganization,
reclassification, merger, consolidation or disposition of assets, the successor
or acquiring corporation (if other than the Company) shall expressly assume the
due and punctual observance and performance of each and every covenant and
condition of this Warrant to be performed and observed by the Company and all
the obligations and liabilities hereunder, subject to such modifications as may
be deemed appropriate (as determined by resolution of the Board of Directors of
the Company) in order to provide for adjustments of shares of Common Stock for
which this Warrant is exercisable which shall be as nearly equivalent as
practicable to the adjustments provided for in this Section 4. For purposes of
this Section 4.4, "common stock of the successor or acquiring corporation" shall
include stock of such corporation of any class which is not preferred as to
dividends or assets over any other class of stock of such corporation and which
is not subject to redemption and shall also include any evidences of
indebtedness, shares of stock or other securities which are convertible into or
exchangeable for any such stock, either immediately or upon the arrival of a
specified date or the happening of a specified event and any warrants or other
rights to subscribe for or purchase any such stock. The foregoing provisions of
this Section 4.4 shall similarly apply to successive reorganizations,
reclassifications, mergers, consolidations or disposition of assets.
4.5 Other Action Affecting Common Stock. If at any time or from time to
time the Company shall take any action in respect of its Common Stock, other
than any action described in this Section 4, which would have a materially
adverse effect upon the rights of the Holder, the number of shares of Common
Stock and/or the purchase price thereof shall be adjusted in such manner as may
be equitable in the circumstances, as determined in good faith by the Board of
Directors of the Company.
4.6 Certain Limitations. Notwithstanding anything herein to the contrary,
the Company agrees not to enter into any transaction which, by reason of any
adjustment hereunder, would cause the Current Warrant Price to be less than the
par value per share of Common Stock.
<PAGE>
5. NOTICES TO HOLDER
5.1 Notice of Adjustments. Whenever the number of shares of Common Stock
for which this Warrant is exercisable, or whenever the price at which a share of
such Common Stock may be purchased upon exercise of the Warrants, shall be
adjusted pursuant to Section 4, the Company shall forthwith prepare a
certificate to be executed by the chief financial officer of the Company setting
forth, in reasonable detail, the event requiring the adjustment and the method
by which such adjustment was calculated (including a description of the basis on
which the Board of Directors of the Company determined the fair value of any
evidences of indebtedness, shares of stock, other securities or property or
warrants or other subscription or purchase rights referred to in Section 4.2),
specifying the number of shares of Common Stock for which this Warrant is
exercisable and (if such adjustment was made pursuant to Section 4.4 or 4.5)
describing the number and kind of any other shares of stock or Other Property
for which this warrant is exercisable, and any change in the purchase price or
prices thereof, after giving effect to such adjustment or change. The Company
shall promptly cause a signed copy of such certificate to be delivered to the
Holder in accordance with Section 13.2. The Company shall keep at its office or
agency designated pursuant to Section 11 copies of all such certificates and
cause the same to be available for inspection at said office during normal
business hours by the Holder or any prospective purchaser of a Warrant
designated by the Holder.
5.2 Notice of Corporate Action. If at any time
(a) the Company shall take a record of the holders of its Common
Stock for the purpose of entitling them to receive a dividend or other
distribution, or any right to subscribe for or purchase any evidences of
its indebtedness, any shares of stock of any class or any other securities
or property, or to receive any other right, or
(b) there shall be any capital reorganization of the Company, any
reclassification or recapitalization of the capital stock of the Company
or any consolidation or merger of the Company with, or any sale, transfer
or other disposition of all or substantially all the property, assets or
business of the Company to, another corporation, or
(c) there shall be a voluntary or involuntary dissolution,
liquidation or winding up of the Company;
then, in any one or more of such cases, the Company shall give to Holder (i) at
least ten 10 business days' prior written notice of the date on which a record
date shall be selected for such dividend, distribution or right or for
determining rights to vote in respect of any such reorganization,
reclassification, merger, consolidation, sale, transfer, disposition,
dissolution, liquidation or winding up, and (ii) in the case of any such
reorganization, reclassification, merger, consolidation, sale, transfer,
disposition, dissolution, liquidation or winding up, at least ten (10) business
days' prior written notice of the date when the same shall take place. Such
notice in accordance with the foregoing clause also shall specify (i) the date
on which any such record is to be taken for the purpose of such dividend,
distribution or right, the date on which the holders of Common Stock shall be
entitled to any such dividend, distribution or right, and the amount and
character thereof, and (ii) the date on which any such reorganization,
reclassification, merger, consolidation, sale, transfer, disposition,
dissolution, liquidation or winding up is to take place and the time, if any
such time is to be fixed, as of which the holders of Common Stock shall be
entitled to exchange their shares of Common Stock for securities or other
property deliverable upon such reorganization, reclassification, merger,
consolidation, sale, transfer, disposition, dissolution, liquidation or winding
up. Each such written notice shall be sufficiently given if addressed to Holder
at the last address of Holder appearing on the books of the Company and
delivered in accordance with Section 13.2.
<PAGE>
6. NO IMPAIRMENT
(a) The Company shall not by any action, including, without limitation,
amending its certificate of incorporation or through any reorganization,
transfer of assets, consolidation, merger, dissolution, issue or sale of
securities or any other voluntary action, avoid or seek to avoid the observance
or performance of any of the terms of this Warrant, but will at all times in
good faith assist in the carrying out of all such terms and in the taking of all
such actions as may be necessary or appropriate to protect the rights of Holder
against impairment. Without limiting the generality of the foregoing, the
Company will (i) not increase the par value of any shares of Common Stock
receivable upon the exercise of this Warrant above the amount payable therefor
upon such exercise immediately prior to such increase in par value, (ii) take
all such action as may be necessary or appropriate in order that the Company may
validly and legally issue fully paid and nonassessable shares of Common Stock
upon the exercise of this warrant, and (iii) use its best efforts to obtain all
such authorizations, exemptions or consents from any public regulatory body
having jurisdiction thereof as may be necessary to enable the Company to perform
its obligations under this Warrant.
(b) Upon the request of Holder, the Company will at any time during the
period this Warrant is outstanding acknowledge in writing, in form satisfactory
to Holder, the continuing validity of this Warrant and the obligations of the
Company hereunder.
7. RESERVATION AND AUTHORIZATION OF COMMON STOCK
(a) From and after the date hereof, the Company shall at all times reserve
and keep available for issue upon the exercise of Warrants such number of its
authorized but unissued shares of Common Stock as will be sufficient to permit
the exercise in full of all outstanding Warrants. All shares of Common Stock
which shall be so issuable, when issued upon exercise of any Warrant and payment
therefor in accordance with the terms of such Warrant, shall be duly and validly
issued and fully paid and nonassessable, and not subject to preemptive rights.
(b) Before taking any action which would cause an adjustment reducing the
Current Warrant Price below the then par value, if any, of the shares of Common
Stock issuable upon exercise of the Warrants, the Company shall take any
corporate action which may be necessary in order that the Company may validly
and legally issue fully paid and non-assessable shares of such Common Stock at
such adjusted Current Warrant Price.
(c) Before taking any action which would result in an adjustment in the
number of shares of Common Stock for which this Warrant is exercisable or in the
Current Warrant Price, the Company shall obtain all such authorizations or
exemptions thereof, or consents thereto, as may be necessary from any public
regulatory body or bodies having jurisdiction thereof.
8. TAKING OF RECORD; STOCK AND WARRANT TRANSFER BOOKS
In the case of all dividends or other distributions by the Company to the
holders of its Common Stock with respect to which any provision of Section 4
refers to the taking of a record of such holders, the Company will in each such
case take such a record and will take such record as of the close of business on
a Business Day. The Company will not at any time, except upon dissolution,
liquidation or winding up of the Company, close its stock transfer books or
Warrant transfer books so as to result in preventing or delaying the exercise or
transfer of any Warrant.
9. SUPPLYING INFORMATION
<PAGE>
The Company shall cooperate with Holder in supplying such information as
may be reasonably necessary for Holder to complete and file any information
reporting forms presently or hereafter required by the Commission as a condition
to the availability of an exemption from the Securities Act for the sale of any
Warrant or Restricted Common Stock.
10. LOSS OR MUTILATION
Upon receipt by the Company from Holder of evidence reasonably
satisfactory to it of the ownership of and the loss, theft, destruction or
mutilation of this Warrant and indemnity reasonably satisfactory to it (it being
understood that the written agreement of the Holder shall be sufficient
indemnity), and in case of mutilation upon surrender and cancellation hereof,
the Company will execute and deliver in lieu hereof a new Warrant of like tenor
to Holder; provided, in the case of mutilation, no indemnity shall be required
if this Warrant in identifiable form is surrendered to the Company for
cancellation.
11. OFFICE OF THE COMPANY
As long as any of the Warrants remain outstanding, the Company shall
maintain an office or agency (which may be the principal executive offices of
the Company) where the Warrants may be presented for exercise, registration of
transfer, division or combination as provided in this Warrant.
12. LIMITATION OF LIABILITY
No provision hereof, in the absence of affirmative action by Holder to
purchase shares of Common Stock, and no enumeration herein of the rights or
privileges of Holder hereof, shall give rise to any liability of Holder for the
purchase price of any Common Stock or as a stockholder of the Company, whether
such liability is asserted by the Company or by creditors of the Company.
13. MISCELLANEOUS
13.1 Nonwaiver and Expenses. No course of dealing or any delay or failure
to exercise any right hereunder on the part of Holder shall operate as a waiver
of such right or otherwise prejudice Holder's rights, powers or remedies. If the
Company fails to make, when due, any payments provided for hereunder, or fails
to comply with any other provision of this Warrant, the Company shall pay to
Holder such amounts as shall be sufficient to cover any reasonable costs and
expenses including, but not limited to, reasonable attorneys' fees, including
those of appellate proceedings, incurred by Holder in collecting any amounts due
pursuant hereto or in otherwise enforcing any of its rights, powers or remedies
hereunder.
<PAGE>
13.2 Notice Generally. Except as may be otherwise provided herein, any
notice or other communication or delivery required or permitted hereunder shall
be in writing and shall be delivered personally, by first class mail, postage
prepaid, return receipt requested or sent by a nationally recognized overnight
courier service, and shall be deemed given when so delivered personally,
deposited with the United States postal service or upon delivery by overnight
courier service, as follows:
(1) if to the Company, to:
HIDENET SECURE ARCHITECTURES, INC.
103 Medinat Hayehudim Street
Herzliya, Israel 46733
Attention: Ron Fussman
(2) if to the Holder, to
ROYCE INVESTMENT GROUP
===========================
The Company or the Holder may change the foregoing address by notice given
pursuant to this Section 13.2.
13.3 Indemnification. The Company agrees to indemnify and hold harmless
Holder from and against any liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, claims, costs, attorneys' fees, expenses
and disbursements of any kind which may be imposed upon, incurred by or asserted
against Holder in any manner relating to or arising out of any failure by the
Company to perform or observe in any material respect any of its covenants,
agreements, undertakings or obligations set forth in this Warrant; provided,
however, that the Company will not be liable hereunder to the extent that any
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
claims, costs, attorneys' fees, expenses or disbursements are found in a final
non-appealable judgment by a court to have resulted from Holder's gross
negligence, bad faith or willful misconduct in its capacity as a stockholder or
warrantholder of the Company.
13.4 Successors and Assigns. Subject to the provisions of Section 3.1,
this Warrant and the rights evidenced hereby shall inure to the benefit of and
be binding upon the successors of the Company and the successors and assigns of
Holder. The provisions of this Warrant are intended to be for the benefit of RIG
or any of its assignes or designees and shall be enforceable by any such Holder
or holder of Warrant Shares.
13.5 Amendment. This Warrant and all other Warrants may be modified or
amended or the provisions hereof waived with the written consent of the Company
and the Holder.
13.6 Severability. Wherever possible, each provision of this Warrant shall
be interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Warrant shall be prohibited by or invalid under
applicable law, such provision shall be ineffective to the extent of such
prohibition or invalidity, without invalidating the remainder of such provision
or the remaining provisions of this Warrant.
<PAGE>
13.7 Headings. The headings used in this Warrant are for the convenience
of reference only and shall not, for any purpose, be deemed a part of this
Warrant.
13.8 Governing Law. This Warrant shall be governed by the laws of the
State of New Jersey, without regard to the provisions thereof relating to
conflict of laws.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Warrant to be duly
executed and its corporate seal to be impressed hereon and attested by its
Secretary or an Assistant Secretary.
Dated: As of June 11, 1999
HIDENET SECURE ARCHITECTURES, INC.
By: /s/ Ron Fussman
----------------------
Name: Ron Fussman
Title:President
[SEAL]
<PAGE>
EXHIBIT A
SUBSCRIPTION FORM
[To be executed only upon exercise of Warrant]
The undersigned registered owner of this Warrant irrevocably
exercises this warrant for the purchase of Shares of Common Stock of Hidenet
Secure Architectures, Inc. and herewith makes payment therefor, all at the price
and on the terms and conditions specified in this Warrant and requests that
certificates for the shares of Common Stock hereby purchased (and any securities
or other property issuable upon such exercise) be issued in the name of and
delivered to
whose address is and, if such shares of Common Stock shall not include all of
the shares of Common Stock issuable as provided in this Warrant, that a new
Warrant of like tenor and date for the balance of the shares of Common Stock
issuable hereunder be delivered to the undersigned.
(Name of Registered owner)
(Signature of Registered Owner)
(Street Address)
(city) (State)
(Zip Code)
NOTICE: The signature on this subscription must correspond with the name as
written upon the face of the within Warrant in every particular,
without alteration or enlargement or any change whatsoever.
<PAGE>
EXHIBIT B
ASSIGNMENT FORM
FOR VALUE RECEIVED the undersigned registered owner of this Warrant
hereby sells, assigns and transfers unto the Assignee named below all of the
rights of the undersigned under this Warrant, with respect to the number of
shares of Common Stock set forth below:
No. of Shares of
Name and Address of Assignee Common Stock
and does hereby irrevocably constitute and appoint
attorney-in-fact to register such transfer on the books of
maintained for the purpose, with full power of substitution in the premises.
Dated: Print Name:
------------------
Signature:
Witness:
NOTICE: The signature on this assignment must correspond with the name as
written upon the face of the within Warrant in every particular,
without alteration or enlargement or any change whatsoever.
<PAGE>
ASSIGNMENT FORM
FOR VALUE RECEIVED the undersigned registered owner of this Warrant
hereby sells, assigns and transfers unto the Assignee named below all of the
rights of the undersigned under this Warrant, with respect to the number of
shares of Common Stock set forth below:
No. of Shares of
Name and Address of Assignee Common Stock
- ---------------------------- ------------
Ron Fussman 500,000
Dated: Print Name: Royce Investment Group
------------------
Signature:
Witness:
NOTICE: The signature on this assignment must correspond with the name as
written upon the face of the within Warrant in every particular,
without alteration or enlargement or any change whatsoever.
COHEN TAUBER SPIEVACK & WAGNER LLP
ATTORNEYS-AT-LAW
26TH Floor
1350 Avenue of the Americas
New York, New York 10019
E-Mail: [email protected]
(212) 519-5195
Fax (212) 262-1766
April 14, 2000
Hidenet Secure Architectures, Inc.
103 Medinat Hayehudim Street
P.O.B. 837
Herzliya, Israel 46733
Gentlemen:
We are counsel to Hidenet Secure Architectures, Inc., a New
Jersey corporation (the "Company"), in connection with the filing by the Company
with the Securities and Exchange Commission pursuant to the Securities Act of
1933, as amended (the "Securities Act"), of a registration statement on Form S-8
(the "Registration Statement") relating to 500,000 shares (the "Shares") of the
Company's common stock (the "Common Stock"), issuable upon the exercise of a
Common Stock Purchase Warrant (the "Warrant") initially issued to Royce
Investment Group which has been assigned to Ron Fussman.
We have examined and are familiar with originals or copies,
certified or otherwise identified to our satisfaction, of the Articles of
Incorporation and By-Laws of the Company, as each is currently in effect, the
Registration Statement, the Warrant, the Assignment of the Warrant to Ron
Fussman, subscription for exercise of the Warrant, resolutions of the Board of
Directors of the Company relating to the issuance of the Warrant and the
proposed registration and issuance of the Shares, the certificate of the
Chairman and Treasurer of the Company and such other corporate documents and
records and other certificates, and we have made such investigations of law as
we have deemed necessary or appropriate in order to render the opinions
hereinafter set forth.
<PAGE>
In our examination, we have assumed the genuineness of all
signatures, the legal capacity of all persons, the authenticity of all documents
submitted to us as originals, the conformity to original documents of all
documents submitted to us as certified or photostatic copies and the
authenticity of the originals of such latter documents. As to any facts material
to the opinions expressed herein which were not independently established or
verified, we have relied upon statements and representations of Ron Fussman and
officers and other representatives of the Company and others.
Based upon and subject to the foregoing, we are of the opinion
that the Shares to be issued upon exercise of the Warrant have been duly and
validly authorized and, when the Shares have been paid for in accordance with
the terms of the Warrant and certificates therefore have been duly executed and
delivered, such Shares will be duly and validly issued, fully paid and
non-assessable.
This Opinion Letter is governed by, and shall be interpreted
in accordance with, the Legal Opinion Accord (the "Accord") of the ABA Section
of Business Law (1991). The law covered by the opinions expressed herein is
limited to the law of the State of New Jersey.
We hereby consent to the filing of this opinion as an exhibit
to the Registration Statement and to the reference to our firm under the caption
"Legal Matters" in the resale prospectus filed with the Registration Statement.
Very truly yours,
COHEN TAUBER SPIEVACK & WAGNER LLP
Consent of Cohen Tauber Spievack & Wagner LLP (refer to Exhibit 5.1)
CONSENT
We consent to the incorporation by reference in the registration statement of
Hidenet Secure Architectures, Inc. on Form S-8 of our report dated August 15,
1999, on our audits of the financial statements of Hidenet Secure Architectures,
Inc. as of December 31, 1998 and 1997 and for each of the years ended December
31, 1998 and December 31, 1997 which report is included in the Company's Annual
Report on Form 10-KSB for the year ended December 31, 1998. We also consent to
the reference to our Firm under the caption "Experts".
/s/Kost Forer & Gabbay
Kost Forer & Gabbay
Tel Aviv, Israel
April 14, 2000
