As filed with the Securities and Exchange Commission November 1, 1996
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
under
THE SECURITIES ACT OF 1933
AEROFLEX INCORPORATED
(Exact name of registrant as specified in its charter)
Delaware 11-1974412
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
35 South Service Road Michael Gorin, President
Plainview, New York 11803 Aeroflex Incorporated
(516)694-6700 35 South Service Road
(Address, including zip code and telephone Plainview, New York 11803
number, including area code, of registrant's (516) 694-6700
principal executive offices) (Name address and telephone
number, including area code
of agent for service)
Copy to:
David H. Lieberman, Esq.
Blau, Kramer, Wactlar & Lieberman, P.C.
100 Jericho Quadrangle
Jericho, New York 11753
(516) 822-4820
Approximate date of commencement of proposed sale to public: From time to
time after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box [ ] .
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box [X].
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering [ ].
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration number of the earlier effective registration statement for the same
offering [ ].
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box [ ]
<PAGE>
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
- --------------------------------------------------------------------------------------------
Title of Each Class Proposed Maximum Proposed Maximum Amount of
of Securities to be Amount to be Offering Price Aggregate Registration
Registered Registered Per Share (1) Offering Price (1) Fee
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, par 214,495 shs. $4.125 $884,792 $305
value $.10 per share
reserved for issuance
upon the exercise of
Common Stock Purchase
Warrants
- --------------------------------------------------------------------------------------------
<FN>
(1) Estimated solely for the purpose of calculating the registration fee, based
on the closing price of the Common Stock reported in the consolidated reporting
system on October 25, 1996.
(2) Pursuant to Rule 416, this Registration Statement also covers any
additional shares of Common Stock which may become issuable by virtue of the
anti-dilution provisions of such Warrants.
- -------------------------------------------------------------------------------------------
</FN>
</TABLE>
The Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
<PAGE>
AEROFLEX INCORPORATED
Cross Reference Sheet
Showing location in Prospectus of Information Required by Items on Form S-3
Item No. Prospectus Caption
1. Forepart of the Registration Outside Front Cover
Statement and Outside Front Cover Page Page of Prospectus
of Prospectus
2. Inside Front and Outside Back Cover Inside Front and Outside
Pages of Prospectus Back Cover Pages of
Prospectus
3. Summary Information, Risk Factors and Selected Financial
Ratio of Earnings to Fixed Charges Data
4. Use of Proceeds Use of Proceeds
5. Determination of Offering Price Outside Front Cover Page;
Selling Securityholders
6. Dilution *
7. Selling Security Holders Selling Securityholders
8. Plan of Distribution Outside Front Cover Page;
Plan of Distribution
9. Description of Securities to be *
Registered
10. Interests of Named Experts and Counsel Legal Opinion;
Experts
11. Material Changes *
12. Incorporation of Certain Information Incorporation of
by Reference Certain Documents
By Reference
13. Disclosure of Commission Position on *
Indemnification for Securities Act
Liabilities
*Omitted since answer to item is negative or inapplicable
<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECTED TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
SUBJECT TO COMPLETION
Dated November 1, 1996
AEROFLEX INCORPORATED
214,495 Shares of Common Stock
$.10 par value
The 214,495 shares of Common Stock underlying Common Stock Purchase
Warrants (the "Shares"), par value $.10 per share, of Aeroflex Incorporated (the
"Company") being covered by this Prospectus are being offered for sale from time
to time by or for the account of Value Investing Partners, Inc., certain
transferees thereof, and any pledgees, transferees, donees or other successors
in interest thereof (the "Selling Securityholders"). The Shares may be offered
by the Selling Securityholders from time to time in transactions on the New York
Stock Exchange, in privately negotiated transactions, or by a combination of
such methods of sale, at fixed prices that may be changed, at market prices
prevailing at the time of sale, at prices related to such prevailing market
prices or at negotiated prices. The Selling Securityholders may effect such
transactions by selling the Shares to or through broker-dealers and such
broker-dealers may receive compensation in the form of discounts, concessions or
commissions from the Selling Securityholders or the purchaser of the Shares for
whom such broker-dealers may act as agent or to whom they sell as principal or
both (which compensation to a particular broker-dealer might be in excess of
customary commissions). See "Selling Securityholders" and "Plan of
Distribution."
None of the proceeds from the sale of the Shares by the Selling
Securityholders will be received by the Company, except to the extent that the
Common Stock Purchase Warrants are exercised. If all the Common Stock Purchase
Warrants are exercised at current exercise prices, the net proceeds to the
Company from this offering would be $984,137. The Company will bear the expenses
in connection with the offering, including filing fees and the Company's legal
and accounting fees, estimated at $7,500.
The Company's Common Stock is traded on the New York Stock Exchange
(NYSE Symbol: ARX). On October 25, 1996, the last reported sale price of the
Company's Common Stock as reported by the New York Stock Exchange was $4.125 per
share.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The date of this Prospectus is November __, 1996.
<PAGE>
AVAILABLE INFORMATION
The Company has filed with the Securities and Exchange Commission (the
"Commission"), Washington, D.C., a Registration Statement under the Securities
Act of 1933, as amended (the "Act"), with respect to the Common Stock offered
hereby. This Prospectus does not contain all the information set forth in the
Registration Statement and the exhibits relating thereto. For further
information with respect to the Company and the shares of Common stock offered
by this Prospectus, reference is made to such Registration Statement and the
exhibits thereto. Statements contained in this Prospectus as to the contents of
any contract or other document are not necessarily complete and in each instance
reference is made to the copy of such contract or other document filed as an
exhibit to the Registration Statement for a full statement of the provisions
thereof; each such statement contained herein is qualified in its entirety by
such reference.
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance
therewith, files reports, proxy statements and other information with the
Commission. Such reports, proxy statements and other information can be
inspected and copied at the public reference facilities maintained at the office
of the Commission at Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549
and at the Commission's Regional Offices at Northwestern Atrium Center, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661-2511 and 7 World Trade
Center, New York, New York 10048. Copies of such material can be obtained from
the Public Reference Section of the Commission, Washington, D.C. 20549, at
prescribed rates, and from the Securities and Exchange Commission's Web site at
the address http://www.sec.gov. In addition, the Company's Common Stock is
listed on the New York Stock Exchange, and copies of the foregoing materials and
other information concerning the Company can be inspected at the offices of the
New York Stock Exchange at 20 Broad Street, New York, New York 10005.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents have been filed by the Company with the Commission
(File No. 1-8037) pursuant to the Exchange Act, are incorporated by reference in
this Prospectus and shall be deemed to be a part hereof:
(1) The Company's Annual Report on Form 10-K for the fiscal year ended June
30, 1996.
(2) The description of the class of securities to be offered which is
contained in a Registration Statement filed under Section 12 of the Securities
and Exchange Act of 1934, including any amendment or report filed for the
purpose of updating such description.
All documents filed pursuant to Section 13(a), 13(c), 14 or 15(d) of the
Exchange Act after the date of this Prospectus and prior to the termination of
this offering of Common Stock Purchase Warrants shall be deemed to be
incorporated by reference in this Prospectus and to be part hereof from the date
of filing of such documents. Any statement contained in a document incorporated
or deemed to be incorporated by reference in this Prospectus shall be deemed to
be modified or superseded for purposes of this Prospectus to the extent that a
statement contained herein or in any subsequently filed document that 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 so modified or superseded, to constitute a part of this Prospectus.
The Company will provide without charge to each person to whom a copy of
this Prospectus is delivered, upon the written or oral request of such person, a
copy of any or all of the documents incorporated by reference (except for
exhibits thereto unless specifically incorporated by reference therein).
Requests for such copies should be directed to the Secretary, Aeroflex
Incorporated, 35 South Service Road, Plainview, New York 11803, (516) 694-6700.
<PAGE>
THE COMPANY
Aeroflex Incorporated, through its subsidiaries (collectively, unless the
context requires otherwise, referred to as the "Company" or "Aeroflex") designs
and manufactures advanced electronic systems and components, including
microelectronic circuits and interconnect products, instrument products and
motion control systems, for both the commercial and defense markets. It also
designs and manufactures shock and vibration stabilizing systems used for
commercial, industrial and defense applications. Aeroflex also provides defense
consulting services involving systems analysis, design and engineering primarily
to government contractors and the U.S. Armed Forces. Operations are grouped into
two segments: electronics and isolator products.
As of June 30, 1996, the Company has accounted for certain segments, namely
commercial and custom envelopes (Huxley Envelope Corp.) and telecommunication
systems services (T-CAS Corp.) as discontinued operations. The following
description of the Company's business does not include these discontinued
operations.
Since 1961, the Company has been engaged in the design, development and
production of stabilization tracking devices and systems. These are dynamically
positioned pedestals on or in moving vehicles such as trucks, ships and
aircraft, upon which tracking equipment, such as radar antenna, is mounted. The
pedestal, through the continuous balancing action of gyroscopes and
servo-mechanical stabilizers operating in all three dimensions, enables the
mounted equipment to remain almost perfectly balanced and motionless. The
equipment can then automatically track or focus on a target as accurately as if
it were on solid ground despite the motion of the vehicle. The Company's
stabilization and tracking devices are a part of major surveillance,
reconnaissance and weapon firing control systems and play an important role in
high altitude aircraft as well as in other aircraft, ships and ground vehicles
which require precise, highly stable mounting for cameras, antennae and lasers.
Since 1961, the Company has been engaged in the design, development,
manufacture and sale of severe service shock and vibration isolation systems.
These devices consist of helically-wound steel wire rope contained between
rugged metal retainer bars, and are used to store and dissipate potentially
destructive vibration and shock. The purchasers of helical isolators are
manufacturers or users of equipment sensitive to shock and vibration who need to
reduce shock/vibration to levels compatible with equipment fragility to extend
the useful life of this equipment. Isolators are also used to prevent vibrations
in equipment from causing disturbances to surrounding equipment, structures and
configurations. They are manufactured in a variety of materials and with special
anti-corrosion coatings according to each customer's specifications. In
addition, a line of isolated systems evolved in response to the custom
requirements of customers. Systems capability includes integrated avionics trays
and bases, skids and pallets.
Since 1974, the Company has been engaged in the design, manufacture and
sale of state-of-the-art microelectronic assemblies for the electronics
industry. In January 1994, the Company acquired substantially all of the net
operating assets of the microelectronics division of Marconi Circuit Technology
Corporation, which manufactures a wide variety of microelectronic assemblies.
This acquisition increased the range of products offered and enhanced the
Company's engineering capability.
Since 1975, the Company has been engaged in the development and manufacture
of electro-optical scanning devices used in infra-red night vision systems.
These systems detect temperature differences in the infra-red radiation
emanating from objects in target areas.
In October 1983, the Company acquired Vibration Mountings and Controls,
Inc., which manufactures a line of off-the-shelf noise, shock, vibration and
structureborne noise control devices. These rubber and spring isolators, which
are manufactured in a wide variety of sizes, load ratings and configurations,
are used primarily in commercial applications to protect heavy rotating
equipment, heating, ventilating and air conditioning equipment, and diesel
engines. In December 1986, the Company acquired the operating assets of Korfund
Dynamics Corporation , a manufacturer of an industrial line of heavy duty spring
and rubber shock mounts.
<PAGE>
In November 1989, the Company acquired Comstron Corporation which is now an
operating division of Aeroflex Laboratories Incorporated, a wholly-owned
subsidiary of Aeroflex. Comstron is a leader in radio frequency and microwave
technology used in the manufacture of fast switching frequency synthesizers and
components. Building on technology acquired from Comstron, Aeroflex develops and
manufactures complex communications and guidance systems and subsystems
including HF, VHF and UHF receivers, communications jammer emulators, weather
radar receivers, up/down converters, frequency agile radar local oscillators and
low phase noise frequency sources. It has developed a phase shifter for the U.S.
Air Force's mid-life upgrade F-16 Identification Friend or Foe (IFF) system and
a tunable solid state local oscillator for the U.S. Navy MK-92 fire control
radar.
In January 1995, the Company acquired Lintek Inc. as a wholly owned
subsidiary of Aeroflex. Aeroflex Lintek Corp. is a leader in high speed
instrumentation radar systems and antenna measurement systems. These systems are
used by the Department of Defense and by industry. Lintek Inc. was incorporated
in 1988 for the purpose of developing and selling instrumentation radar systems,
and currently has systems in place with many of the large aerospace companies
and with major government laboratories.
In March 1996, the Company acquired MIC Technology Corporation which
designs, develops, manufactures and markets microelectronics products in the
form of passive thin film circuits and interconnects. Its advanced circuit and
interconnect technology is emerging as a key enabling technology for
miniaturized, high frequency, high performance electronic products for rapidly
growing markets like cellular telephones, personal communication service devices
(PCS) and microwave data links. It continues to be an essential technology in
satellite based communication hardware and leading edge military electronic
products.
The Company's executive offices are located at 35 South Service Road,
Plainview, New York 11803, and its telephone number is (516) 694-6700.
<PAGE>
SELECTED FINANCIAL DATA
The following selected financial data is qualified by reference to, and
should be read in conjunction with, the consolidated financial statements,
related notes thereto and other financial information incorporated by reference
herein. The selected financial data for the five years ended June 30, 1996 have
been derived from the Company's audited consolidated financial statements.
<TABLE>
<CAPTION>
(In thousands except ratios and per share data)
Year ended June 30,
--------------------------------------------------------------------
1996 1995 1994 1993 1992
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Earnings Statement Data (4) (5)
Net Sales $ 74,367 $ 71,113 $65,602 $52,031 $48,109
Income from
Continuing Operations (17,420)(1)(2) 6,587(4)(5) 5,850(6) 1,736 227
Income from
Discontinued Operations -- 462 187 500 635
Extraordinary Item-Tax Benefit
of Loss Carryovers (8) -- -- -- -- 143
Net Income (Loss) (17,420) 7,049 6,037(6) 2,236 1,005
Income (Loss) from Continuing
Operations Per Common Share
and Common Share Equivalent
Primary $ (1.46)(1)(2) $ .53(4)(5) $ .55(6) $.20 $.03
Fully Diluted (3) .52(4)(5) .50(6) .19 .03
Net Income (Loss) Per Common
Share and Common Share Equivalent
Primary (1.46) .57 .57 .26 .12
Fully Diluted (3) .55 .51 .24 .12
Weighted Average Number of
Common Shares and Common
Share Equivalents Outstanding
Primary 11,971 12,352 10,526 8,757 8,661
Fully Diluted (3) 14,249 12,401 10,920 8,661
June 30,
--------------------------------------------------------------------
1996 1995 1994 1993 1992
---- ---- ---- ---- ----
Balance Sheet Data
Working Capital $24,736 $31,533 $ 28,572 $14,982 $15,751
Total Assets 81,169 71,936 71,016 60,185 62,473
Long-Term Debt
(including current portion) 34,577 13,787 18,408 21,871 28,098
Stockholders' Equity 30,472 46,344 39,571 27,208 25,025
Other Statistics (8)
After Tax Profit Margin (Loss)
(from continuing operations) (23.4)%(1)(2) 9.3%(4)(5) 8.9%(6) 3.3% 0.5%
Return on Average Stockholders'
Equity (from continuing operations) (45.4)%(1)(2) 15.3%(4)(5) 17.5%(6) 6.6% 0.9%
Stockholders' Equity
Per Share (9) $ 2.49 $3.95 $3.37 $3.14 $2.87
- ------------
<FN>
(1) Includes $23,200,000 ($1.94 per share) for the year ended June 30,
1996, for the write-off of in process research and development acquired in
connection with the purchase of MIC Technology Corporation in March 1996.
(2) Includes a $437,000 net of tax, or $.04 per share gain on the sale of
securities for the year ended June 30, 1996.
(3) As a result of the loss, all options, warrants and convertible
debentures are anti-dilutive.
(4) Includes $2,000,000 ($.14 per share fully diluted and $.16 primary) of
insurance proceeds received on the death of the former chairman.
(5) Includes a $1,494,000 net of tax restructuring charge ($.10 per share
fully diluted and $.12 primary) for the consolidation of the Company's Puerto
Rican operations into its domestic facilities.
(6) Includes income tax benefit of $1,716,000, or $.14 per share ($.16 per
share primary), relating to the recognition of a portion of the Company's
unrealized net operating loss carryforward in accordance with Statement of
Financial Accounting Standards No. 109.
(7) See Note 4 to the Consolidated Financial Statements for a discussion of
discontinued operations.
(8) In fiscal 1996, 1995, 1994, and 1993 the tax benefit from prior years'
loss carryforwards was presented as a part of the provision for income taxes; in
1992 it was presented as an extraordinary item.
(9) Calculated by dividing stockholders' equity, at the end of the year, by
the number of shares outstanding at the end of the year.
</FN>
</TABLE>
USE OF PROCEEDS
The Company will not receive any proceeds from this offering, except to the
extent that the Common Stock Purchase Warrants are exercised. If all the Common
Stock Purchase Warrants are exercised at current exercise prices, the net
proceeds to the Company from this offering would be $984,137. If such proceeds
are received, the Company intends to use such proceeds for general working
capital.
PRICE RANGE OF COMMON STOCK
The Company's Common Stock is traded on the New York Stock Exchange under
the symbol ARX. The following table sets forth the high and low sales prices of
the Common Stock as reported by the National Quotation Bureau Incorporated for
the calendar periods indicated. See "Dividend Policy". As of October 30, 1996,
there were approximately 1,240 record holders of the Company's Common Stock.
<TABLE>
<CAPTION>
Common Stock
High Low
---- ----
<S> <C> <C>
1994
First Quarter. . . . . . . . . . . . . . $ 5.00 $ 3.75
Second Quarter . . . . . . . . . . . . . 4.75 3.63
Third Quarter. . . . . . . . . . . . . . 4.13 3.63
Fourth Quarter . . . . . . . . . . . . . 4.00 3.50
1995
First Quarter. . . . . . . . . . . . . . $ 4.38 $ 3.50
Second Quarter . . . . . . . . . . . . . 4.88 3.63
Third Quarter . . . . . . . . . . . . . 5.63 4.25
Fourth Quarter . . . . . . . . . . . . . 5.00 3.88
1996
First Quarter. . . . . . . . . . . . . . $ 5.13 $ 3.50
Second Quarter . . . . . . . . . . . . . 6.63 4.38
Third Quarter. . . . . . . . . . . . . . 6.13 4.63
</TABLE>
<PAGE>
DIVIDEND POLICY
The Company has never paid any cash dividends on its Common Stock. There
have been no stock dividends declared or paid by the Company on its Common Stock
during the past three years. Payment of future dividends, if any, will be
dependent upon the earnings and financial position of the Company and such
factors as the Board of Directors shall deem appropriate. In addition, the
Company's Revolving Credit and Term Loan Agreement, as amended, prohibits, and
its 7-1/2% Senior Subordinated Convertible Debenture Indenture Agreement limits,
it from paying cash dividends.
SELLING SECURITY HOLDERS
The Shares being offered by this Prospectus are for the account of the
following Selling Securityholders in the amounts set forth below:
<TABLE>
<CAPTION>
Number of
Securityholder Shares Offered
-------------- --------------
<S> <C>
Value Investing Partners, Inc. 65,975
Alan Dorsey 84,295
Kevin Cotter 7,650
Angus Carlill 18,450
Chris Lobo 12,625
Kevin Greene 21,450
Kevin Flynn 3,000
Rich Wilson 1,050
</TABLE>
The Selling Securityholders currently own an aggregate of 214,495 Common
Stock Purchase Warrants (the "Warrants") issued by the Company in October 1992
and June 1994. One hundred fourteen thousand four hundred ninety-five of these
Warrants are exercisable for shares of Common Stock of the Company at a current
exercise price of $2.70 per share and one hundred thousand of these Warrants are
exercisable for shares of Common Stock of the Company at a current exercise
price of $6.75 per share.
PLAN OF DISTRIBUTION
The Shares are traded on the New York Stock Exchange under the symbol ARX.
The Shares may be sold from time to time directly by the Selling
Securityholders. Alternatively, the Selling Securityholders may from time to
time offer such securities through underwriters, dealers or agents. The
distribution of securities by the Selling Securityholders may be effected in one
or more transactions that may take place on the over-the-counter market,
including ordinary broker's transactions, privately-negotiated transactions or
through sales to one or more broker-dealers for resale of such shares as
principals, at market prices prevailing at the time of sale, at prices related
to such prevailing market prices or at negotiated prices. Usual and customary or
specifically negotiated brokerage fees or commissions may be paid by the Selling
Securityholders in connection with such sales of securities.
At the time a particular offer of securities is made by or on behalf of the
Selling Securityholders, to the extent required, a prospectus will be
distributed which will set forth the number of shares being offered and the
terms of the offering, including the name or names of any underwriters, dealers
or agents, if any, the purchase price paid by any underwriter for shares
purchased from the Selling Securityholders and any discounts, commissions or
concessions allowed or reallowed or paid to dealers, and the proposed selling
price to the public.
<PAGE>
LEGAL OPINION
Certain legal matters in connection with this offering will be passed upon
for the Company by Blau, Kramer, Wactlar & Lieberman, P.C., Jericho, New York
11753. Harvey R. Blau, a member of the firm, is Chairman and Chief Executive
Officer of the Company. Mr. Blau owns 31,311 shares of Common Stock of the
Company and options to purchase 1,015,000 shares of Common Stock of the Company
granted pursuant to certain of the Company's stock option plans. Mr. Blau's wife
owns 62,246 shares of Common Stock of the Company. The Blau, Kramer, Wactlar &
Lieberman, P.C. Profit Sharing Plan owns 3,614 shares of Common Stock of the
Company.
EXPERTS
The consolidated financial statements and the related financial statement
schedule as of and for the years ended June 30, 1996 and 1995 incorporated by
reference in this Prospectus, to the extent and for the periods indicated in
their report, have been audited by KPMG Peat Marwick LLP, independent auditors,
and are included herein in reliance of said firm as experts in accounting
and auditing in giving said report.
The consolidated statement of operations, stockholders' equity and cash
flows and the related financial statement schedule for the year ended June 30,
1994 incorporated in this prospectus by reference from the Company's Annual
Report on Form 10-K for the year ended June 30, 1996 have been audited by
Deloitte & Touche LLP, independent auditors, as stated in their report, which is
incorporated herein by reference, and has been so incorporated in reliance upon
the report of such firm given upon their authority as experts in accounting and
auditing.
<PAGE>
No dealer, salesperson, or other person has been authorized by the Company to
give any information or to make any representations other than those contained
in this Prospectus and, if given or made, such other information or
representations must not be relied upon as having been so authorized by the
Company. This Prospectus does not constitute an offer to sell, or a solicitation
of an offer to buy, any securities other than the securities to which it
relates, or an offer to or solicitation of any person in any jurisdiction in
which such offer or solicitation would be unlawful. Neither delivery of this
Prospectus nor any sale made hereunder shall, under any circumstances, create
any implication that the information herein is correct as of any time subsequent
to the date hereof.
TABLE OF CONTENTS
Page
----
Available Information 2
Incorporation of Certain Documents
by Reference 2
The Company 3
Selected Financial Data 5
Use of Proceeds 6
Price Range of Common Stock 6
Dividend Policy 7
Selling Security Holders 7
Plan of Distribution 7
Legal Opinion 8
Experts 8
<PAGE>
AEROFLEX INCORPORATED
214,495 Common Shares
PROSPECTUS
November __, 1996
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
<TABLE>
<S> <C>
Securities and Exchange Commission
Filing Fee. . . . . . . . . . . . . . . . . $ 305
Legal and Accounting Fees . . . . . . . . . . 6,000
Miscellaneous . . . . . . . . . . . . . . . . 1,195
------
Total . . . . . . . . . . . . . . . . . . . $7,500
======
</TABLE>
The Company will pay all of these expenses.
Item 15. Indemnification of Directors and Officers
Under provisions of the By-Laws of the Company, each person who is or was a
director or officer of the Company may be indemnified by the Company to the full
extent permitted or authorized by the General Corporation Law of Delaware.
Under such law, to the extent that such person is successful on the merits
of defense of a suit or proceeding brought against him by reason of the fact
that he is a director or officer of the Company, he shall be indemnified against
expenses (including attorneys' fees) reasonably incurred in connection with such
action.
If unsuccessful in defense of a third-party civil suit or if a criminal
suit is settled, such a person may be indemnified under such law against both
(1) expenses (including attorneys' fees) and (2) judgements, fines and amounts
paid in settlement if he acted in good faith and in a manner he reasonably
believed to be in, or not opposed to, the best interests of the Company, and
with respect to any criminal action, had no reasonable cause to believe his
conduct was unlawful.
If unsuccessful in defense of a suit brought by or in the right of the
Company, or if such suit is settled, such a person may be indemnified under such
law only against expenses (including attorneys' fees) incurred in the defense or
settlement of such suit if he acted in good faith and in a manner he reasonably
believed to be in, or not opposed to, the best interests of the Company except
that if such a person is adjudged to be liable in such suit for negligence or
misconduct in the performance of his duty to the Company, he cannot be made
whole even for expenses unless the court determines that he is fairly and
reasonably entitled to indemnity for such expenses.
The Company and its officers and directors of the Company are covered by
officers and directors liability insurance. The policy coverage is $20,000,000,
which includes reimbursement for costs and fees. There is a maximum deductible
under the policy of $500,000 for each claim. The Company has entered into
Indemnification Agreements with certain of its officers and directors. The
Agreements provide for reimbursement for all direct and indirect costs of any
type or nature whatsoever (including attorneys' fees and related disbursements)
actually and reasonably incurred in connection with either the investigation,
defense or appeal of a Proceeding, as defined, including amounts paid in
settlement by or on behalf of an Indemnitee.
<PAGE>
Item 16. Exhibits
4.1 Form of Warrant Certificate dated as of July 12, 1994 between the
Company and each of the Selling Securityholders.
4.2 Form of Warrant Certificate dated as of October 27, 1992 between the
Company and each of the Selling Securityholders.
5.1 Opinion of Blau, Kramer, Wactlar & Lieberman, P.C.
23.1 Consent of KPMG Peat Marwick LLP
23.2 Consent of Deloitte & Touche, LLP
24.2 Consent of Blau, Kramer, Wactlar & Lieberman, P.C. (included in
Exhibit 5 hereof)
25 Powers of Attorney (included in the signature pages hereof)
Item 17. Undertakings
(a) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, as amended (the
"Act"), each filing of the registrant's annual report pursuant to section 13(a)
or section 15(d) of the Securities Exchange Act of 1934 (and, where applicable,
each filing of an employee benefit plan's annual report pursuant to Section
15(d) of the Securities Exchange Act of 1934) that is incorporated by reference
in the registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(b) Insofar as indemnification for liabilities arising under the 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 Securities and Exchange 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 by the registrant of expenses incurred
or paid by a 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.
(c) The undersigned Registrant hereby undertakes:
(1) For purposes of determining any liability under the Act, the
information omitted from the form of prospectus filed as part of a registration
statement in reliance upon Rule 430A and contained in a form of prospectus filed
by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Act
shall be deemed to be part of the registration statement as of the time it was
declared effective.
(2) For the purpose of determining any liability under the Act, each
post-effective amendment that contains a form of prospectus shall be deemed to
be a new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
<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 all of the
requirements for filing on Form S-3 and has duly caused this Amendment to the
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in Plainview, New York on the 30th day of October, 1996.
Aeroflex Incorporated
By: /s/ Harvey R. Blau
Harvey R. Blau
Chairman of the Board
POWER OF ATTORNEY
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below on October 30 , 1996 by the
following persons in the capacities indicated. Each person whose signature
appears below also constitutes and appoints Harvey R. Blau and Michael Gorin,
and each of them, his true and lawful attorney-in-fact and agent, with full
power of substitution and resubstitution, for him and in his name, place and
stead, in any and all capacities to sign any and all amendments (including
post-effective amendments) to this Registration Statement, and to file the same,
with all exhibits thereto and all other documents in connection therewith, with
the Commission, granting unto said attorney-in-fact and agent full power and
authority to do and perform each and every act and thing requisite and necessary
to be done, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes may lawfully do or cause to be done by virtue
hereof.
Signature Title
--------- -----
/s/ Harvey R. Blau Chairman of the Board
Harvey R. Blau (Chief Executive Officer)
/s/ Michael Gorin President and Director
Michael Gorin (Chief Financial Officer)
_____________________________ Executive Vice President,
Leonard Borow Secretary and Director
(Chief Operating Officer)
/s/ Robert Bradley, Sr. Director
Robert Bradley, Sr.
/s/ Milton Brenner Director
Milton Brenner
/s/ Ernest E. Courchene, Jr. Director
Ernest E. Courchene, Jr.
/s/ Jerome Fox Director
Jerome Fox
/s/ Donald S. Jones Director
Donald S. Jones
/s/ Eugene Novikoff Director
Eugene Novikoff
/s/ John S. Patton Director
John S. Patton
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, AND MAY BE OFFERED AND SOLD ONLY IF SO REGISTERED OR IF AN EXEMPTION
FROM REGISTRATION IS AVAILABLE. VOID AFTER 5:00 P.M., NEW YORK TIME, ON JUNE 23,
2004 OR IF NOT A BUSINESS DAY, AS DEFINED HEREIN, AT 5:00 P.M., NEW YORK TIME,
ON THE NEXT FOLLOWING BUSINESS DAY.
WARRANT TO PURCHASE
_______ Shares of Common
Stock
No.
WARRANT TO PURCHASE
COMMON STOCK
OF
ARX, INC.
TRANSFER RESTRICTED -- SEE SECTION 6.02
This certifies that, for good and valuable consideration, Value
Investing Partners, Inc., a Delaware corporation, having an address at 1853 Post
Road East, Westport, Connecticut 06880, and its registered, permitted assigns
(collectively, the "Warrantholder"), is entitled to purchase from ARX, Inc. a
Delaware corporation (the "Company"), subject to the terms and conditions
hereof, at any time before 5:00 P.M., New York time, on June 23, 2004, (or, if
such day is not a Business Day, as defined herein, at or before 5:00 P.M., New
York time on the next following Business Day), the number of fully paid and
non-assessable shares of Common Stock, $.10 par value per share, of the Company
(the "Common Stock") stated above at the Exercise Price (as defined herein). The
Exercise Price and the number of shares purchasable hereunder are subject to
adjustment as provided in Article III hereof.
ARTICLE I
Section 1.01: Definition of Terms. As used in this Warrant, the following
capitalized terms shall have the following respective meanings:
(a) Business Day: A day other than a Saturday, Sunday or other day on
which banks in the State of New York are authorized by law to remain closed.
(b) Common Stock: Common Stock, $.10 par value per share, of the
Company.
(c) Common Stock Equivalents: Securities that are convertible
into or exercisable for shares of Common Stock.
<PAGE>
(d) Demand Registration: See Section 7.02.
(e) Exchange Act: Securities Exchange Act of 1934, as amended.
(f) Exercise Price: $6.75 per share.
(g) Expiration Date: 5:00 P.M., New York time, on June
23, 2004.
(h) Holder: A Holder of Registrable Securities.
(i) NASD: National Association of Securities Dealers,
Inc.
(j) Person: An individual, partnership, joint
corporation, trust, unincorporated organization or government or
any department of agency thereof.
(k) Piggyback Registration: See Section 7.01.
(l) Prospectus: Any prospectus included in a Registration Statement,
as amended or supplemented by any prospectus supplement, with respect to the
terms of the offering of any portion of the Registrable Securities covered by
such Registration Statement and all other amendments and supplements to the
Prospectus, including post-effective amendments and all material incorporated by
reference in such Prospectus.
(m) Public Offering: A public offering of any of the
Company's equity or debt securities pursuant to a registration
statement under the Securities Act.
(n) Registration Expenses: Any and all expenses incident to the
performance of or compliance with Article VII, including, without limitation,
(i) all SEC, stock exchange and NASD registration and filing fees; (ii) all fees
and expenses of complying with securities or blue sky laws (including reasonable
fees and disbursements of counsel for the underwriters in connection with blue
sky qualifications of the Registrable Securities); (iii) all printing, mailing,
messenger and delivery expenses; (iv) the fees and disbursements of counsel for
the Company and of its independent certified public accountants, including the
expenses of any special audits and/or "cold comfort" letters required by or
incident to such performance and compliance; and (v) any disbursements of
underwriters customarily paid by issuers or sellers of securities including
liability insurance if the Company so desires, and the reasonable fees and
expenses of any special experts retained in connection with the requested
registration, but excluding underwriting fees, discounts and commissions and
transfer taxes if any.
<PAGE>
(o) Registrable Securities: Any Warrant Shares and/or other securities
that may be or are issued by the Company upon exercise of this Warrant (and
other Warrants as defined below), including those which may thereafter be issued
by the Company in respect of any such securities by means of any stock splits,
stock dividends, recapitalization or the like, and as adjusted pursuant to
Article III hereof; provided, however, that as to any particular security
contained in Registrable Securities, such securities shall cease to be
Registrable Securities when (i) a Registration Statement with respect to the
sale of such securities shall have become effective under the Securities Act and
such securities shall have been disposed of in accordance with such Registration
Statement; or (ii) they shall have been sold pursuant to Rule 144 (or any
successor provision) under the Securities Act; or (iii) they shall have been
sold, assigned or otherwise transferred to any Person other than those Persons
specified in Section 6.02(i) below ("6.02(i) Persons") and other than to any
spouses, lineal descendants or adopted children of a 6.02(i) Person to whom such
securities are transferred upon the death of any 6.02(i) Person by operation of
law or by bequest.
(p) Registration Statement: Any registration statement of the Company
filed or to be filed with the SEC which covers any of the Registrable Securities
pursuant to the provisions of this Agreement, including the Prospectus,
amendments and supplements to such Registration Statement, including
post-effective amendments, all exhibits and all material incorporated by
reference by such registration statement.
(q) SEC: The Securities and Exchange Commission or any other federal
agency at the time administering the Securities Act or the Exchange Act.
(r) Securities Act: Securities Act of 1933, as amended.
(s) Warrants: This Warrant and all other warrants that have been or
may be issued to Value Investing Partners, Inc., or its assignees or
transferees, as additional compensation under a Placement Agency Agreement,
dated June 6, 1994, in its or their place.
(t) Warrantholder: The person(s) or entity(ies) to whom this Warrant
is originally issued, or any successor in interest thereto, or any assignee or
transferee thereof, in whose name this Warrant is registered upon the books to
be maintained by the Company for that purpose.
(u) Warrant Shares: Common Stock purchasable upon
exercise of the Warrants.
<PAGE>
ARTICLE II
Duration and Exercise of Warrant
Section 2.01: Duration of Warrant. Subject to the terms contained herein,
this Warrant may be exercised at any time before 5:00 P.M., New York time, on
the Expiration Date (or, if such day is not a Business Day, at or before 5:00
P.M., New York time, on the next following Business Day). If this Warrant is not
exercised at or before 5:00 P.M., New York time, on the Expiration Date, it
shall become void, and all rights hereunder shall thereupon cease.
Section 2.02: Exercise of Warrant.
(a) (i) The Warrantholder may exercise this Warrant, in whole or in
part, upon surrender of this Warrant with the Subscription Form hereon duly
executed, to the Company at its corporate office at 35 South Service Road,
Plainview, New York 11803, or to such other office as the Company has given due
notice thereof to the Warrantholder, together with the full Exercise Price for
each Warrant Share to be purchased by wire transfer, certified check or bank
draft payable in United States Dollars to the order of the Company, or by
delivering to the Company the number of shares of the Company's Common Stock
having a value on the date of exercise equal to such Exercise Price.
(ii) Notwithstanding this Section 2.02 or any other provision of
this Warrant to the contrary, the Warrantholder may, upon any full or partial
exercise of the Warrants, at its election, pay the Exercise Price applicable to
such exercise by receiving from the Company upon such exercise the number of
shares of Common Stock equal to the number of shares otherwise issuable upon
such exercise, less the number of shares of Common Stock having a value on the
date of exercise equal to such Exercise Price, to the extent permitted under
Delaware law.
(iii) For purposes of this Section 2.02(a), the value of shares of
Common Stock on any date shall be equal to the average of the bid and asked
prices of the Company's Common Stock on the New York Stock Exchange (or the
closing prices on any national securities exchange or market system on which the
Company's Common Stock is then primarily traded) for the thirty (30) trading
days immediately preceding the date of exercise.
(b) Upon receipt of this Warrant with the Subscription Form duly
executed and accompanied by payment of the aggregate Exercise Price for the
Warrant Shares for which this Warrant is then being exercised, the Company shall
cause to be issued certificates for the total number of whole shares of Common
Stock for which this Warrant is being exercised (adjusted to reflect the effect
of the anti-dilution provisions contained in Article III hereof, if any, and as
provided in Section 4.04 hereof) in such denominations in multiples as are
requested by the Warrantholder, and the Company shall promptly deliver such
certificates to the Warrantholder. If at the time this Warrant is exercised, a
registration statement is not in effect to register under the Securities Act the
Warrant Shares issuable upon exercise of this Warrant, the Company may require
the Warrantholder to make such investment intent representations, and may place
such legends on certificates representation the Warrant Shares, as may be
reasonably required in the opinion of counsel to the Company to permit the
Warrant Shares to be issued without such registration.
<PAGE>
(c) In case the Warrantholder shall exercise this Warrant with respect
to less than all of the Warrant Shares that may be purchased under this Warrant,
the Company will execute a warrant in the form and on the terms of this Warrant
for the balance of such Warrant Shares and deliver such new warrant to the
Warrantholder.
(d) The Company covenants and agrees that it will pay when due and
payable any and all stock transfer and similar taxes which may be payable in
respect of the issue of this Warrant or in respect of the issue of any Warrant
Shares. The Company shall not, however, be required to pay any tax imposed on
income or gross receipts or any tax which may be payable in respect of any
transfer involved in the issuance or delivery of this Warrant or at the time of
surrender and, until the payment of such tax, shall not be required to issue
such Warrant Shares.
ARTICLE III
Adjustment of Shares of Common Stock
Purchasable and of Exercise Price
The Exercise Price and the number and kind of Warrant Shares shall be
subject to adjustment from time to time upon the happening of certain events as
provided in this Article III.
Section 3.01: Mechanical Adjustments.
(a) If at any time prior to the full exercise of this Warrant, the
Company shall (i) pay a dividend or make a distribution on its shares of Common
Stock in shares of Common Stock (other than cash dividends or distributions out
of surplus or earnings); (ii) subdivide, reclassify or recapitalize its
outstanding Common Stock into a greater number of shares; or (iii) combine,
reclassify or recapitalize its outstanding Common Stock into a smaller number of
shares, the Exercise Price in effect at the time of the record date of such
subdivision, combination, reclassification or recapitalization shall be
<PAGE>
proportionately adjusted so that the Warrantholder shall be entitled to receive
the aggregate number and kind of shares which, if this Warrant had been
exercised in full immediately prior to such time, he would have owned upon such
exercise and been entitled to receive upon such dividend, subdivision,
combination, reclassification or recapitalization. Such adjustment shall be made
successively whenever any event listed in this paragraph 3.01(a) shall occur.
(b) If the Company shall hereafter issue rights, options or warrants
to all holders of its outstanding Common Stock, without charge to such holders,
entitling them to subscribe for or purchase shares of Common Stock (or Common
Stock Equivalents) at a price (or having a conversion price per share) less than
the lower of the exercise price or the current market price of the Common Stock
(as determined pursuant to paragraph (e) of this Section 3.01) on the record
date described below, the Exercise Price shall be adjusted so that the Exercise
Price shall equal the price determined by multiplying the Exercise Price in
effect immediately prior to the date of such sale or issuance (which date in the
event of distribution to shareholders shall be deemed to be the record date set
by the Company to determine shareholders entitled to participate in such
distribution) by a fraction, the numerator of which shall be (i) the number of
shares of Common Stock outstanding on the date of such sale or issuance, plus
(ii) the number of additional shares of Common Stock which the aggregate
consideration received by the Company upon such issuance or sale (plus the
aggregate of any additional amount to be received by the Company upon the
exercise of such rights or warrants) would purchase at such current market price
per share of the Common Stock; and the denominator of which shall be (i) the
number of shares of Common Stock outstanding on the date of such issuance or
sale, plus (ii) the number of additional shares of Common Stock offered for
subscription or purchase (or into which the Common Stock Equivalents so offered
are convertible). Such adjustments shall be made successively whenever such
warrants or rights are issued. To the extent that shares of Common Stock are not
delivered (or Common Stock Equivalents are not delivered) after the expiration
of such rights or warrants, the Exercise Price shall be readjusted to the
Exercise Price which would then be in effect had the adjustments been made upon
the issuance of such rights or warrants been made upon the basis of delivery of
only the number of shares of Common Stock (or Common Stock Equivalents) actually
delivered.
(c) In case the Company shall hereafter fix a record date for making a
distribution to the holders of Common Stock of assets or evidences of its
indebtedness (excluding cash dividends or distributions out of earnings and
dividends or distributions referred to in paragraph (a) of this Section 3.01) or
Common Stock subscription rights, options or warrants for Common Stock or Common
Stock Equivalents (excluding those referred to in paragraph (b) of this Section
3.01), then in each such case the Exercise Price in effect after such record
date shall be adjusted to the price determined by multiplying the Exercise Price
<PAGE>
in effect immediately prior thereto by a fraction, the numerator of which shall
be the total number of shares of Common Stock outstanding multiplied by the
current market price per share of Common Stock (as defined in paragraph (e) of
this Section 3.01), less the fair market value (as determined by the Company's
Board of Directors) of said assets or evidences of indebtedness so distributed
or of such Common Stock subscription rights, option and warrants or of such
Common Stock Equivalents applicable to one share of Common Stock, and the
denominator of which shall be the total number of shares of Common Stock
outstanding multiplied by such current market price per share of Common Stock.
Such adjustment shall be made successively whenever the record date for such
distribution is fixed and shall become effective immediately after such record
date.
(d) Whenever the Exercise Price payable upon exercise of each Warrant
is adjusted pursuant to paragraphs (a), (b) or (c) of this Section 3.01, the
Warrant Shares shall simultaneously be adjusted by multiplying the number of
Warrant Shares initially issuable upon exercise of each Warrant by the Exercise
Price in effect on the date thereof and dividing the product so obtained by the
Exercise Price, as adjusted.
(e) For the purpose of any computation under this Section 3.01, the
current market price per share of Common Stock at any date shall be deemed to be
the average of the daily closing price for 30 consecutive Business Days
commencing 45 Business Days before such date. The closing price for each day
shall be the last sale price regular way or, in case no such reported sales take
place on such day, the average of the last reported bid and asked prices regular
way, in either case on the principal national securities exchange on which the
Common Stock is admitted to trading or listed, or if not listed or admitted to
trading on such exchange, the representative closing bid price as reported by
NASDAQ (or any stock quotation system on which the Company's Common Stock is
then primarily traded), or if not so available, the fair market price as
determined by the Board of Directors.
(f) No adjustments in the Exercise Price shall be required unless such
adjustment would require an increase or decrease of at least five cents ($.05)
in such price; provided, however, that any adjustments which by reason of this
paragraph (f) are not required to be made shall be carried forward and taken
into account in any subsequent adjustment. All calculations under this Section
3.01 shall be made to the nearest cent or to the nearest one-hundredth of a
share, as the case may be. Notwithstanding anything in this Section 3.01 to the
contrary, the Exercise Price shall not be reduced to less than the then existing
par value of the Common Stock as a result of any adjustment made hereunder.
(g) In the event that at any time, as a result of any adjustment made
pursuant to paragraph (a) of this Section 3.01, the Warrantholder thereafter
shall become entitled to receive any shares of the Company, other than Common
Stock, thereafter the number of such other shares so receivable upon exercise of
any Warrant shall be subject to adjustment from time to time in a manner and on
terms as nearly equivalent as practicable to the provisions with respect to the
Common Stock contained in paragraphs (a) to (f), inclusive, of this Section
3.01.
<PAGE>
Section 3.02: Notice of Adjustment. Whenever the number of Warrant Shares
or the Exercise Price is adjusted as herein provided, the Company shall prepare
and deliver to the Warrantholder a certificate signed by its President, any Vice
President, Treasurer or Secretary, setting forth the adjusted number of shares
purchasable upon the exercise of this Warrant and the Exercise Price of such
shares after such adjustment, setting forth a brief statement of the facts
requiring such adjustment and setting forth the computation by which adjustment
was made.
Section 3.03: No Adjustment for Dividends. Except as provided in Section
3.01 of this Agreement, no adjustment in respect of any cash dividends shall be
made during the term of this Warrant or upon the exercise of this Warrant.
Section 3.04: Form of Warrant After Adjustments. The form of this Warrant
need not be changed because of any adjustments in the Exercise Price or the
number or kind of the Warrant Shares, and Warrants theretofore or thereafter
issued may continue to express the same price and number and kind of shares as
are stated in this Warrant, as initially issued.
Section 3.05: Preservation of Purchase Rights in Certain
Transactions.
(a) In case of any consolidation of the Company with or a merger of
the Company into another corporation or in case of any sale or conveyance to
another corporation of the property of the Company as an entirety or
substantially as an entirety, upon any such consolidation, merger, sale or
conveyance and the surviving entity is a publicly traded company, the Company
agrees that a condition of such transaction will be that the Company or such
successor or purchasing corporation, as the case may be, shall assume the
obligations of the Company hereunder in writing. In the case of any such
consolidation, merger or sale or conveyance, the Warrantholder shall have the
right until the expiration date upon payment of the Exercise Price in effect
immediately prior to such action, to receive the kind and amount of shares and
other securities and/or property which it would have owned or have been entitled
to receive after the happening of such consolidation, merger, sale or conveyance
had this Warrant been exercised immediately prior to such action, subject to
adjustments which shall be as nearly equivalent as may be practicable to the
adjustments provided for in this Article III. The provisions of this Section
3.05 shall similarly apply to successive consolidations, mergers, sales or
conveyances.
(b) In case of any consolidation of the Company with or a merger of
the Company into another corporation or in case of any sale or conveyance to
<PAGE>
another corporation of the property of the Company as an entirety or
substantially as an entirety, upon any such consolidation, merger, sale or
conveyance and the surviving entity is a non-publicly traded company, the
Company agrees that a condition of such transaction will be that the Company
shall mail to the Warrantholder at the earliest applicable time (and, in any
event not less than 20 days before any record date for determining the persons
entitled to receive the consideration payable in such transaction) written
notice of such record date. Such notice shall also set forth facts as shall
indicate the effect of such action (to the extent such effect may be known at
the date of such notice) on the Exercise Price of and the kind and amount of the
shares of stock and other securities and property deliverable upon exercise of
this Warrant.
ARTICLE IV
Other Provisions Relating
to Rights of Warrantholders
Section 4.01: No Rights as Shareholders: Notice to Warrantholders. Nothing
contained in this Warrant shall be construed as conferring upon the
Warrantholder or its transferees the right to vote or to receive dividends or to
consent or to receive notice as a shareholder in respect of any meeting of
shareholders for the election of directors of the Company or of any other matter
or any rights whatsoever as shareholders of the Company, except to the extent
specifically provided for herein.
Section 4.02: Lost, Stolen Mutilated or Destroyed Warrants. If this Warrant
is lost, stolen, mutilated or destroyed, the Company may, on such terms as to
indemnity or otherwise as it may in its discretion impose (which shall, in the
case of a mutilated Warrant, include the surrender thereof), issue a new Warrant
of like denomination and tenor as, and in substitution for, this Warrant.
Section 4.03: Reservation of Shares.
(a) The Company covenants and agrees that at all times it shall
reserve and keep available for the exercise of this Warrant such number of
authorized shares of Common Stock as are sufficient to permit the exercise in
full of this Warrant.
(b) Prior to the issuance of any shares of Common Stock upon exercise
of this Warrant, the Company shall use its best efforts to secure the listing of
such shares of Common Stock upon the securities exchange or automated quotation
system, if any, upon which shares of Common Stock are then listed.
(c) The Company covenants that all shares of Common Stock issued on
exercise of this Warrant will be validly issued, fully paid, non-assessable and
free of preemptive rights.
<PAGE>
Section 4.04: No Fractional Shares. Anything contained herein to the
contrary notwithstanding, the Company shall not be required to issue any
fraction of a share in connection with the exercise of this Warrant, and in any
case where the Warrantholder would, except for the provisions of this Section
4.04, be entitled under the terms of this Warrant to receive a fraction of a
share upon exercise of this Warrant and receipt of the Exercise Price, issue the
larger number of whole shares purchasable upon exercise of this Warrant. The
Company shall not be required to make any cash or other adjustment in respect of
such fraction of a share to which the Warrantholder would otherwise be entitled.
ARTICLE V
Treatment of Warrantholder
Prior to due presentment for registration or transfer of this Warrant, the
Company may deem and treat the Warrantholder as the absolute owner of this
Warrant (notwithstanding any notation of ownership or other writing hereon) for
the purpose of any exercise hereof and for all other purposes of the Company
shall not be affected by any notice to the contrary.
ARTICLE VI
Split-Up, Combination
Exchange and Transfer of Warrants
Section 6.01: Split-Up, Combination, Exchange and Transfer of Warrants.
Subject to and limited by the provisions of Section 6.02 hereof, this Warrant
may be split up, combined or exchanged for another Warrant or Warrants
containing the same terms to purchase a like aggregate number of Warrant Shares.
If the Warrantholder desires to split up, combine or exchange this Warrant, it
shall make such request in writing delivered to the Company and shall surrender
to the Company this Warrant and any other Warrants to be so split up, combined
or exchanged. Upon any such surrender for a split-up, combination or exchange,
the Company shall execute and deliver to the person entitled thereto a Warrant
or Warrants, as the case may be, as so requested. The Company shall not be
required to effect any split-up, combination or exchange which will result in
the issuance of a Warrant entitling the Warrantholder to purchase upon exercise
a fraction of a share of Common Stock or a fractional Warrant. The Company may
require such Warrantholder to pay a sum sufficient to cover any tax or
governmental charge that may be imposed in connection with any split-up,
combination or exchange of Warrants.
Section 6.02: Restrictions on Transfer. This Warrant may not be sold,
hypothecated exercised, assigned or transferred (a "Transfer"), except (i) to
Value Investing Partners, Inc., any successor to the business of such company,
<PAGE>
or any officer, director, stockholder or employee of such company, or a member
of such transferee's immediate family or a trust for the benefit of any such
person, or (ii) to any underwriter in connection with a Public Offering of the
Company's Common Stock, provided (as to (ii)) that this Warrant is exercised
immediately upon such Transfer and the Common Stock issued upon such exercise is
sold by such underwriter as part of such Public Offering and, as to (i) and
(ii), only in accordance with and subject to the provisions of the Securities
Act and the rules and regulations promulgated thereunder. If at the time of such
a Transfer a Registration Statement is not in effect to register this Warrant
under the Securities Act, the Company may require the Warrantholder to make such
representations, and may place such legends on certificates representing this
Warrant, as may be reasonably required in the opinion of counsel to the Company
to permit such a Transfer without such registration.
ARTICLE VII
Registration Under the Securities Act of 1933
Section 7.01: Piggyback Registration.
(a) Right to Include Registrable Securities. If at any time prior to
the Expiration Date the Company proposes to register any class of debt or equity
security or any Common Stock Equivalent under the Securities Act on any form for
the registration of securities under such Act, whether or not for its own
account (other than a registration form relating to (i) a registration of a
stock option, stock purchase or compensation or incentive plan or of stock
issued or issuable pursuant to any such plan, or a dividend investment plan;
(ii) a registration of securities proposed to be issued in exchange for
securities or assets of, or in connection with a merger or consolidation with,
another corporation; or (iii) a registration of securities proposed to be issued
in exchange for other securities of the Company) in a manner which would permit
registration of Registrable Securities for sale to the public under the
Securities Act (a "Piggyback Registration"), it will at such time give prompt
written notice to all Holders of Registrable Securities of its intention to do
so and of such Holders' rights under this Section 7.01. Such rights are referred
to hereinafter as "Piggyback Registration Rights". Upon the written request of
any such Holder made within 20 days after the receipt of any such notice (which
request shall specify the Registrable Securities intended to be disposed of by
such Holder and the intended method of disposition thereof), the Company will
include in the Registration Statement the Registrable Securities which the
Company has been so requested to register by the Holders thereof provided that
the Company need not include any such Registrable Securities in Registration
Statements filed after the Expiration Date.
<PAGE>
(b) Withdrawal of Piggyback Registration by Company. If, any time
after giving written notice of its intention to register any securities in a
Piggyback Registration but prior to the effective date of the related
Registration Statement filed in connection with such Piggyback Registration, the
Company shall determine for any reason not to register such securities, the
Company will give written notice of such determination to each Holder and
thereupon shall be relieved of its obligation to register any Registrable
Securities in connection with such Piggyback Registration. All best efforts
obligations of the Company pursuant to Section 7.02 shall cease if the Company
determines to terminate any registration where Registrable Securities are being
registered pursuant to this Section 7.01.
(c) Piggyback Registration of Underwritten Public Offerings. If a
Piggyback Registration requested pursuant to this Section 7.01 involves an
underwritten offering, then, (i) all Holders requesting to have their
Registrable Securities included in the Company's registration must sell their
Registrable Securities to the underwriters selected by the Company on the same
terms and conditions as apply to other selling shareholders; and (ii) any Holder
requesting to have its Registrable Securities included in such registration may
elect in writing, not later than three (3) Business Days prior to the
effectiveness of the Registration Statement filed in connection with such
registration, not to have its Registrable Securities so included in connection
with such registration.
(d) Payment of Registration Expenses for Piggyback Registration. The
Company will pay all Registration Expenses in connection with each registration
of Registrable Securities requested pursuant to a Piggyback Registration Right
contained in this Section 7.01, except for the fees and disbursements of any
counsel retained by the Holders of the Registrable Securities being so
registered.
(e) Priority in Piggyback Registration. If a Piggyback Registration
involves an underwritten offering and the managing underwriter advises the
Company in writing that, in its opinion, the number or kind of Registrable
Securities requested to be included in such Piggyback Registration would have a
material adverse effect on such offering, including a significant decrease in
the price at which such securities can be sold, then the Registrable Securities
to be offered for the accounts of Holders pursuant to a Piggyback Registration
Right shall be eliminated entirely or reduced pro rata as to all requesting
Holders on the basis of the relative number of Registrable Securities to be
included in such offering to the amount recommended by such managing
underwriter; provided, however, that no securities may be offered in such
registration for the account of persons other than the Company by virtue of
their also having "piggyback" registration rights, or otherwise, unless the
Registrable Securities requested to be included in such registration are so
included on a pro rata basis (by percentage of each class of securities) as to
such other persons holding "piggyback" rights and the Holders requesting
registration.
<PAGE>
(f) Expiration of Piggyback Registration Rights. The Piggyback
Registration Rights shall survive the exercise of the Warrant or the
transactions or events pursuant to which such Registrable Securities were
issued, but all such rights will terminate in all events on the Expiration Date.
The Holders, as a group, shall be limited to three Piggyback Registrations under
this Section 7.01.
Section 7.02: Demand Registration.
(a) Request for Registration. Subject to the limitations set forth
below in this Section 7.02, any Holder or Holders may after June 22, 1995 from
time to time but prior to nine (9) months after the Expiration Date make written
requests for the registration under the Securities Act of their Registrable
Securities (a "Demand Registration") provided the number of Warrant Shares
subject to the request is all Warrant Shares issuable under this Warrant and any
other outstanding Warrants, as well as all warrant shares issuable under
warrants granted to Value Investing Partners, Inc. as additional compensation
under a Placement Agency Agreement, dated September 11, 1992. The Company shall
use its best efforts to effect such Demand Registration. The Holders, as a
group, shall be limited to one Demand Registration, and thereafter may not make
any further written requests for registration under this Section 7.02.
(b) Limitations on Demand Registration. The Company shall not be
required to effect a Demand Registration sooner than (i) for a sixty (60)
day period following the effective date of a registration statement pertaining
to an underwritten Public Offering for the account of the Company; (ii) if the
Company, in its reasonable judgment, determines that registration at the time
requested by the Holders would materially adversely affect the Company, by,
among other things, requiring disclosure of, any litigation or transactions at
an inopportune time, in which case the obligation of the Company to register any
Registrable Securities shall be delayed until the reason for such adverse affect
has ceased to exist; or (iii) if the timing of the Demand Registration is such
that a special audit of the Company would be required in connection with the
preparation of financial statements for the registration.
Section 7.03: Registration Procedures. If and whenever the Company is
required to use its best efforts to effect or cause the registration of any
Registrable Securities under the Securities Act as provided in this Article VII,
the Company will, as expeditiously as practicable:
<PAGE>
(a) notify the selling Holders of Registrable Securities and the
managing underwriters, if any, promptly, and (if requested by any such Person)
confirm such advice in writing, (i) when a Prospectus or any Prospectus
supplement or post-effective amendment has been filed, and, with respect to a
Registration Statement or any post-effective amendment, when the same has become
effective; (ii) of any request by the SEC for amendments or supplements to a
Registration Statement or related Prospectus or for additional information;
(iii) of the issuance by the SEC of any stop order suspending the effectiveness
of a Registration Statement or the initiation of any proceedings for that
purpose; (iv) if at any time the representations and warranties of the Company
contemplated by paragraph (h) below ceases to be true and correct; (v) of the
receipt by the Company of any notification with respect to the suspension of the
qualification of any of the Registrable Securities for sale in any jurisdiction
or the initiation or threatening of any proceeding for such purpose, and (vi) of
the happening of any event that makes any statement made in the Registration
Statement, the Prospectus or any document incorporated therein by reference
untrue or which requires the making of any changes in the Registration Statement
or Prospectus so that they will not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading;
(b) make every reasonable effort to obtain the withdrawal of any order
suspending the effectiveness of a Registration Statement at the earliest
possible moment;
(c) if reasonably requested by the managing underwriters, immediately
incorporate in a Prospectus supplement or post-effective amendment such
information as the managing underwriters believe (on advice of counsel) should
be included therein as required by applicable law relating to such sale of
Registrable Securities, including, without limitation, information with respect
to the purchase price being paid for the Registrable Securities by such
underwriters and with respect to any other terms of the underwritten (or
"best-efforts" underwritten) offering; and make all required filings of such
Prospectus supplement or post-effective amendment as soon as notified of the
matters to be incorporated in such Prospectus supplement or post-effective
amendment;
(d) furnish to each selling Holder of Registrable Securities and each
managing underwriter, without charge, at least one signed copy of the
Registration Statement and any post-effective amendment thereto, including
financial statements and schedules, all documents incorporated therein by all
exhibits (including those incorporated by reference);
<PAGE>
(e) deliver to each selling Holder of Registrable Securities and the
underwriters, if any, without charge, as many copies of the Prospectus or
Prospectuses (including each preliminary Prospectus) and any amendment or
supplement thereto as such Persons may reasonably request; the Company consents
to the use of such Prospectus or any amendment or supplement thereto by each of
the selling Holders of Registrable Securities and the underwriters, if any, in
connection with the offering and sale of the Registrable Securities covered by
such Prospectus or any amendment or supplement thereto;
(f) prior to any public offering of Registrable Securities, cooperate
with the selling Holders of Registrable Securities, the underwriters, if any,
and their respective counsel in connection with the registration or
qualification of such Registrable Securities for offer and sale under the
securities or Blue Sky laws of such jurisdictions within the United States as
any seller or underwriter reasonably requests in writing, use its reasonable
efforts to keep each such registration or qualification effective during the
period such Registration Statement is required to be kept effective and any and
all other acts or things necessary or advisable to enable the disposition in
such jurisdictions of the Registrable Securities covered by the applicable
Registration Statement; provided that the Company will not be required to
qualify generally to do business in any jurisdiction where it is not then so
qualified or to take any action which would subject the Company to general
service of process in any jurisdiction where it is not at the time so subject or
would subject the principal stockholders of the Company to any restrictions on
the resale or transfer of their shares of the Company's Common Stock;
(g) cooperate with the selling Holders of Registrable Securities and
the managing underwriters, if any, to facilitate the timely preparation and
delivery of certificates representing Registrable Securities to be sold and not
bearing any restrictive legends; and enable such Registrable Securities to be in
such denominations and registered in such names as the managing underwriters may
request at least two Business Days prior to any sale of Registrable Securities
to the underwriters;
(h) upon the occurrence of any event contemplated by paragraph (a)(vi)
above, prepare a supplement or post-effective amendment to the applicable
Registration Statement or related Prospectus or any document incorporated
therein by reference or file any other required document so that, as thereafter
delivered to the purchasers of the Registrable Securities being sold thereunder,
such Prospectus will not contain an untrue statement or a material fact or omit
to state any material fact necessary to make the statements therein not
misleading;
(i) with respect to each issue or class of Registrable Securities, use
its best efforts to cause all Registrable Securities covered by the Registration
Statements to be listed on each securities exchange on which similar securities
issued by the Company are listed, if so requested by the Holders of a majority
of such Registrable Securities;
<PAGE>
(j) except as otherwise provided in this Agreement, the Company shall
have sole control in connection with the preparation, filing, withdrawal,
amendment or supplementing of each Registration Statement, the selection of
underwriters, and the distribution of any preliminary prospectus included in the
Registration Statement, and may include within the coverage thereof additional
shares of Common Stock or other securities for its own account or for the
account of one or more of its other security holders;
(k) Holders of Registrable Securities shall have no registration
rights hereunder in respect of any proposed transfer of such securities if, in
the opinion of recognized securities counsel to the Company (A) registration
under the Securities Act is not required for the transfer of the Registrable
Securities in the manner provided by such Holder and that there are no further
Securities Act resale restrictions on the Registrable Securities or (B) a
post-effective amendment to an existing registration statement would be legally
sufficient for such transfer.
Section 7.04: Agreements by Selling Holders.
(a) The Company may require each seller of Registrable Securities as
to which any registration is being effected to furnish to the Company such
information regarding the distribution of such securities and such other
information as may otherwise be required by the Securities Act to be included in
such Registration Statement, as the Company may from time to time reasonably
request in writing.
(b) Each Holder of Registrable Securities agrees by acquisition of
such Registrable Securities that, upon receipt of any notice from the Company of
the happening of any event of the kind described in Section 7.03(a) or (b)
hereof, such Holder will forthwith discontinue disposition of such Registrable
Securities covered by such Registration Statement or Prospectus until such
Holder's receipt of the copies of the supplemented or amended Prospectus
contemplated by Section 7.03(h) hereof, or until it is advised in writing by the
Company that the use of the applicable Prospectus may be resumed, and has
received copies of any additional or supplemental filings which are incorporated
by reference in such Prospectus, and, if so directed by the Company, such holder
will deliver to the Company (at the Company's expense) all copies, other than
permanent file copies then in such Holder's possession, of the Prospectus
covering such Registrable Securities current at the time of receipt of such
notice. Each Holder of Registrable Securities agrees to notify the Company upon
completion of its distribution of such Registrable Securities.
<PAGE>
(c) Each holder of Registrable Securities whose Registrable Securities
are covered by a Registration Statement filed pursuant to Article VII hereof
agrees, if requested by the managing underwriters in any underwritten offering,
not to effect any public sale or distribution of any securities of the Company
of the same class as the securities included in such Registration Statement,
including a sale pursuant to rule 144 under the Securities Act (except as part
of such underwritten registration), during any period during which the officers
and directors of the Company and any other selling shareholders included in such
Registration Statement are similarly restricted in the sale or distribution of
any securities of the Company pursuant to such Registration Statement, to the
extent timely notified in writing by the managing underwriters.
Section 7.05: Indemnification.
(a) Indemnification by Company. The Company agrees to indemnify and
hold harmless, to the full extent permitted by the law, each Holder, its
officers, directors and agents and each Person who controls such Holder or
agents (within the meaning of the Securities Act) against all losses, claims,
damages, liabilities and expenses caused by any untrue or alleged untrue
statement of a material fact contained in any Registration Statement, Prospectus
or preliminary prospectus or any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, except insofar as the same are contained in any
information furnished in writing to the Company by such Holder expressly for use
therein; provided, however, that the Company shall not be liable in any such
case to the extent that any such loss, claim, damage, liability or expense
arises out of or in based upon an untrue statement or alleged untrue statement
or omission or alleged omission made in any preliminary prospectus if (i) such
Holder failed to send or deliver a copy of the Prospectus with or prior to the
delivery of written confirmation of the sale of Registrable Securities and (ii)
the Prospectus would have corrected such untrue statement or omission; and
provided, further, that the Company shall not be liable in any such case to the
extent that any such loss claim, damage, liability or expense arises out of or
is based upon an untrue statement or alleged untrue statement or omission or
alleged omission in the Prospectus, if such untrue statement or untrue
statement, omission or alleged omission is corrected in an amendment or
supplement to the Prospectus and if, having previously been furnished by or on
behalf of the Company with copies of the Prospectus as so amended or
supplemented, such Holder thereafter fails to deliver or cause to be delivered
such Prospectus as so amended or supplemented, prior to or concurrently with the
sale of a Registrable Security to the person asserting such loss, claim, damage,
liability or expense who purchased such Registrable Security from such Holder.
The Company will also indemnify underwriters, selling brokers, dealer managers,
<PAGE>
and similar securities industry professionals participating in the distribution
their officers and directors and each person who controls such Persons (within
the meaning of the Securities Act) to the same extent as provided above with
respect to the indemnification of the Holders of Registrable Securities, if
requested.
(b) Indemnification by Holder of Registrable Securities. In connection
with any registration, each Holder will furnish to the Company in writing such
information and affidavits as the Company reasonably requests for use in
connection with any Registration Statement or Prospectus and agrees to
indemnify, to the same extent as the indemnification provided by the Company in
Section 7.05(a), the Company, its directors and officers and each Person who
controls the Company (within the meaning of the Securities Act) against all
losses, claims, damages, liabilities and expenses caused by any untrue statement
of a material fact or any omission of a material fact required to be stated in
any Registration Statement or Prospectus or preliminary prospectus or necessary
to make the statements therein not misleading, to the extent, but only to the
extent, that such untrue statement or omission is contained in or based upon any
information or affidavit so furnished in writing by such Holder to the Company
specifically for inclusion in such Registration Statement or Prospectus. In no
event shall the liability of any selling Holder of Registrable Securities
hereunder be greater in amount than the dollar amount of the net proceeds
received by such Holder upon the sale of the Registrable Securities giving rise
to such indemnification obligation. The Company shall be entitled to receive
indemnities from underwriters, selling brokers, dealer managers, and similar
securities industry professionals participating in the distribution, to the same
extent as provided above with respect to information so furnished in writing by
such Persons specifically for inclusion in any prospectus or Registration
Statement.
(c) Conduct of Indemnification Procedure. Any party that proposes to
assert the right to be indemnified hereunder 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 an indemnifying party or parties
under this Section, notify each such indemnifying party of the commencement of
such action, suit or proceeding, enclosing a copy of all papers served, No
indemnification provided for hereunder shall be available to any party who shall
fail to give notice as provided in this Section 7.05(c) if the party to whom
notice was not given was unaware of the proceeding to which such notice would
have related and was prejudiced by the failure to give such notice but the
omission so to notify such indemnifying party of any such action, suit or
proceeding shall not relieve it from any liability that it may have to any
indemnified party for contribution or otherwise than under this Section. In case
<PAGE>
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 and the
approval by the indemnifying party to such indemnified party of its election so
to assume the defense thereof and the approval by the indemnified party of such
counsel, the indemnifying party shall not be liable to such indemnified party
for any legal or other expenses, except as provided below and except for the
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 counsel in any such action, but the fees and expenses of
such counsel shall be at the expense of such indemnified party unless (i) the
employment of counsel by such indemnified party has been authorized in writing
by the indemnifying parties, (ii) the indemnified party shall have reasonably
concluded that there may be a conflict of interest between the indemnifying
parties and the indemnified party in the conduct of the defense of such action
(in which case the indemnifying parties shall not have the right to direct the
defense of such action on behalf of the indemnified party) or (iii) the
indemnifying parties shall not have employed counsel to assume the defense of
such action within a reasonable time after notice of the commencement thereof,
in each of which cases the fees and expenses of counsel shall be at the expense
of the indemnifying parties. An indemnifying party shall not be liable for any
settlement of any action, suit, proceeding or claim effected without its written
consent.
ARTICLE VIII
Other Matters
Section 8.01: Expenses of Transfer. The Company will from time to time
promptly pay, subject to the provisions of Section 6.01 and paragraph (d) of
Section 2.02, all taxes and charges that may be imposed upon the Company in
respect to the issuance or delivery of Warrant Shares upon the exercise of this
Warrant by the Warrantholder.
Section 8.02: Successors and Assigns. All the covenants and provisions of
this Warrant by or for the benefit of the Company shall bind and inure to the
benefit of its successors and assigns hereunder.
Section 8.03: Amendments and Waivers. The provisions of this Warrant,
including the provisions of this sentence, may not be amended, modified or
supplemented, and waiver or consents to departures from the provisions hereof
may not be given unless the Company has obtained the written consent of holders
of at least a majority of the outstanding Warrants. Holders shall be bound by
any consent authorized by this Section whether or not certificates representing
such Warrants have been marked to indicate such consent.
<PAGE>
Section 8.04: Counterparts. This Warrant may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
so executed shall be deemed to be an original and all of which taken together
shall constitute one and the same agreement.
Section 8.05: Governing Law. This Warrant shall be governed by and
construed in accordance with the laws of the State of Delaware.
Section 8.06: Severability. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstances, is
held invalid, illegal or unenforceable, the validity, legality and
enforceability of any such provisions in every other respect and of the
remaining provisions contained herein shall not be affected or impaired thereby.
Section 8.07: Integration/Entire Agreement. This Warrant is intended by the
parties as a final expression of their agreement and intended to be a complete
and exclusive statement of the agreement and understanding of the parties hereto
in respect of the subject matter contained herein. This Warrant supersedes all
prior agreements and understandings between the parties with respect to such
subject matter.
Section 8.08: Notices. Notice or demand pursuant to this Warrant to be
given or made by the Warrantholder to or on the Company shall be sufficiently
given or made if sent by first class mail, postage prepaid, to the Warrantholder
or the Holder of Registrable Securities at its last known address as it shall
appear on the books of the Company, and to the Company at 35 South Service Road,
Plainview, New York 11803, or to such other address as may be duly given to such
Holder.
Section 8.09: Headings. The Article headings herein are for
convenience only and are not part of this Warrant and shall not
affect the interpretation thereof.
<PAGE>
IN WITNESS WHEREOF, this Warrant has been duly executed by the Comp
any under its corporate seal as of the 23nd day of June, 1994.
ARX, INC.
By:________________________________
Name: Michael Gorin
Title: President
(Corporate Seal)
ATTEST:
- ------------------------------
_________________, Secretary
<PAGE>
ASSIGNMENT
(To be executed only upon assignment of Warrant Certificate)
For value received, _____________________________ hereby sells, assigns and
transfers unto ______________________________ the within Warrant Certificate,
together with all right, title and interest therein, and does hereby irrevocably
constitute and appoint ______________________ attorney, to transfer said Warrant
Certificate on the books of ARX, Inc. with respect to the number of Warrants set
forth below, with full power of substitution in the premises:
Name(s) of
Assignee(s) Address No. of Warrants
----------- ------- ---------------
And if said number of Warrants shall not be all the Warrants represented by the
Warrant Certificate, a new Warrant Certificate is to be issued in the name of
said undersigned for the balance remaining of the Warrants represented by said
Warrant Certificate.
Dated: ______________ ___, 19__.
-----------------------------------
Note: The above signature should
correspond exactly with the
name on the face of this
Warrant Certificate.
<PAGE>
EXERCISE FORM
(To be executed upon exercise of Warrant)
ARX, Inc.
The undersigned hereby irrevocably elects to exercise the right of purchase
represented by the within Warrant Certificate for, and to purchase thereunder,
_________ shares of Common Stock, as provided for therein, at an aggregate
exercise price of $_____, and tenders herewith payment of the purchase price in
full in the form of a wire transfer, a certified or bank draft in the amount of
$_______, and/or _____ shares of Common Stock of ARX, Inc. having a fair market
value of $_____.
Please issue a certificate or certificates for such Common
Shares in the name of
Name__________________________
(Please Print)
--------------------------
Address
--------------------------
--------------------------
Social Security No.
Signature______________________
Note: The above signature
should correspond
exactly with the
name on the first
page of this Warrant
Dated: _______________ ___, 19__. Certificate.
And if said number of shares shall not be all the shares purchasable under
the within Warrant Certificate, a new Warrant Certificate is to be issued in the
name of the undersigned for the balance remaining of the number of whole shares
purchasable thereunder.
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, AND MAY BE OFFERED AND SOLD ONLY IF SO REGISTERED OR IF AN EXEMPTION
FROM REGISTRATION IS AVAILABLE.
VOID AFTER 5:00 P.M., NEW YORK TIME, ON OCTOBER 6, 2002 OR IF NOT A
BUSINESS DAY, AS DEFINED HEREIN, AT 5:00 P.M., NEW YORK TIME, ON THE NEXT
FOLLOWING BUSINESS DAY.
WARRANT TO PURCHASE
_______ Shares of Common Stock
No. ___
WARRANT TO PURCHASE
COMMON STOCK
OF
ARX, INC.
TRANSFER RESTRICTED -- SEE SECTION 6.02
This certifies that, for good and valuable consideration, Value Investing
Partners, Inc., 60 Broad Street, New York, New York 10004, and its registered,
permitted assigns (collectively, the "Warrantholder"), is entitled to purchase
from ARX, Inc. a corporation incorporated under the laws of the State of
Delaware (the "Company"), subject to the terms and conditions hereof, at any
time before 5:00 P.M., New York time, on October 6, 2002, (or, if such day is
not a Business Day, as defined herein, at or before 5:00 P.M. , New York time on
the next following Business Day), the number of fully paid and non-assessable
shares of Common Stock (par value $.10) of the Company (the "Common Stock")
stated above at the Exercise Price (as defined herein). The Exercise Price and
the number of shares purchasable hereunder are subject to adjustment as provided
in Article III hereof.
ARTICLE I
Section 1.01: Definition of Terms. As used in this Warrant, the following
capitalized terms shall have the following respective meanings:
(a) Business Day: A day other than a Saturday, Sunday or other day on which
banks in the State of New York are authorized by law to remain closed.
<PAGE>
(b) Common Stock: Common Stock, $.10 par value per shares, of the Company.
(c) Common Stock Equivalents: Securities that are convertible into or
exercisable for shares of Common Stock.
(d) Demand Registration: See Section 7.02.
(e) Exchange Act: The Securities Exchange Act of 1934, as amended.
(f) Exercise Price: $2.70 per warrant Share, as such price may be adjusted
from time to time pursuant to Article III hereof.
(g) Expiration Date: 5:00 P.M., New York time, on October 6, 1997.
(h) Holder: A Holder of Registrable Securities.
(i) NASD: National Association of Securities Dealers, Inc.
(j) Person: An individual, partnership, joint venture, corporation, trust,
unincorporated organization or government or any department or agency thereof.
(k) Piggyback Registration: See Section 7.01.
(1) Prospectus: Any prospectus included in any Registration Statement, as
amended or supplemented by any prospectus supplement, with respect to the terms
of the offering of any portion of the Registrable Securities covered by such
Registration Statement and all other amendments and supplements to the
Prospectus, including post-effective amendments and all material incorporated by
reference in such Prospectus.
(m) Public Offering: A public offering of any of the Company's equity or
debt securities pursuant to a registration statement under the Securities Act.
(n) Registration Expenses: Any and all expenses incident to the performance
of or compliance with Article VII, including, without limitation, (i) all SEC,
stock exchange and NASD registration and filing fees; (ii) all fees and expenses
of complying with securities or blue sky laws (including reasonable fees and
<PAGE>
disbursements of counsel for the underwriters in connection with blue sky
qualifications of the Registrable Securities); (iii) all printing, mailing,
messenger and delivery expenses; (iv) the fees and disbursements of counsel for
the Company and of its independent certified public accountants, including the
expenses of any special audits and/or "cold comfort" letters required by or
incident to such performance and compliance; and (v) any disbursements of
underwriters customarily paid by issuers or sellers of securities including
liability insurance if the Company so desires, and the reasonable fees and
expenses of any special experts retained in connection with the requested
registration, but excluding underwriting fees, discounts and commissions and
transfer taxes if any.
(o) Registrable Securities: This Warrant and Warrants in similar form
issued to Value Investing Partners, Inc. and/or its designees or transferees as
permitted under Section 6.02 and any Warrant Shares thereunder and/or other
securities that may be or are issued by the Company upon exercise of such
Warrants, including those which may thereafter be issued by the Company in
respect of any such securities by means of any stock splits, stock dividends,
recapitalizations or the like, and as adjusted pursuant to Article III hereof;
provided, however, that as to any particular security contained in Registrable
Securities, such securities shall cease to be Registrable Securities when (i) a
Registration Statement with respect to the sale of such securities shall have
become effective under the Securities Act and such securities shall have been
disposed of in accordance with such Registration Statement; or (ii) they shall
have been distributed to the public pursuant to Rule 144 (or any successor
provision) under the Securities Act; or (iii) they shall have been sold,
assigned or otherwise transferred to any Person other than those Persons
specified in Section 6.02(i) below ("6.02(i) Persons") and other than to any
spouses, lineal descendants or adopted children of a 6.02(i) Person to whom such
securities are transferred upon the death of any 6.02(i) Person by operation of
law or by bequest.
(p) Registration Statement: Any registration statement of the Company filed
or to be filed with the SEC which covers any of the Registrable Securities
pursuant to the provisions of this Agreement, including the Prospectus,
amendments and supplements to such Registration Statement including
post-effective amendments, all exhibits and all material incorporated by
reference by such registration statement.
<PAGE>
(q) SEC: The Securities and Exchange Commission or any other federal agency
at the time administering the Securities Act or the Exchange Act.
(r) Securities Act: The Securities Act Of 1933, as amended
(s) Warrants: This Warrant, the warrants issued on the date hereof and all
other warrants that may be issued in its or their place (together evidencing the
right to purchase an aggregate of shares of the Company's Common Stock
originally issued as set forth in the definition of Registrable Securities.
(t) Warrantholder: The person(s) or entity(ies) to whom this warrant is
originally issued, or any successor in interest thereto, or any assignee or
transferee thereof, in whose name this Warrant is registered upon the books to
be maintained by the Company for that purpose.
(u) Warrant Shares: Common Stock purchasable upon exercise of the Warrants.
ARTICLE II
Duration and Exercise of Warrant
Section 2.01: Duration of Warrant. Subject to the terms contained herein,
this Warrant may be exercised at any time before 5:00 P.M., New York time, on
the Expiration Date (or, if such day is not a Business Day, at or before 5:00
P.M., New York time, on the next following Business Day). If this Warrant is not
exercised at or before 5: 00 P.M., New York time, on the Expiration Date, it
shall become void, and all rights hereunder shall thereupon cease.
Section 2.02: Exercise of Warrant. (a) The Warrantholder may exercise this
Warrant, in whole or in part, upon surrender of this Warrant with the
Subscription Form hereon duly executed, to the Company at its corporate office
at 35 South Service Road, Plainview, New York 11803, together with the full
Exercise Price for each Warrant Share to be purchased (i) by tendering in lawful
money of the United States, or by certified check or bank draft payable in
United States Dollars to the order of the Company; or (ii) by delivering to the
Company the number of shares of the Company's Common Stock having a value on the
<PAGE>
date of exercise equal to such Exercise Price; or (iii) by delivering to the
Company its 7% convertible Senior Subordinated Debentures due in the principal
amount equal to such Exercise Price and upon compliance with and subject to the
conditions set forth herein.
Notwithstanding this Section 2.02 or any other provision of this Warrant to
the contrary, the Warrantholder may, upon any full or partial exercise of the
Warrants, at its election, pay the Exercise Price applicable to such exercise by
receiving from the Company upon such exercise the number of shares of Common
Stock equal to the number of shares otherwise issuable upon such exercise, less
the number of shares of Common Stock having a value on the date of exercise
equal to such Exercise Price.
For purposes of this Section 2.02, the value of shares of Common Stock on
any date shall be equal to the closing price of the Company's Common Stock on
the New York Stock Exchange (or on such national securities exchange on which
the Company's Common Stock is then primarily traded) on the immediately
preceding trading day.
(b) Upon receipt of this Warrant with the Subscription Form duly executed
and accompanied by payment of the aggregate Exercise Price for the Warrant
Shares for which this warrant is then being exercised, the Company will cause to
be issued certificates for the total number of whole shares of Common Stock for
which this Warrant is being exercised (adjusted to reflect the effect of the
anti-dilution provisions contained in Article III hereof, if any, and as
provided in Section 4.04 hereof) in such denominations as are required for
delivery to the Warrantholder, and the Company shall thereupon deliver such
certificates to the Warrantholder. If at the time this Warrant is exercised, a
registration statement is not in effect to register under the Securities Act the
Warrant Shares issuable upon exercise of this Warrant, the Company may require
the Warrantholder to make such investment intent representations, and may place
such legends on certificates representation the Warrant Shares, as may be
reasonably required in the opinion of counsel to the Company to permit the
Warrant Shares to be issued without such registration.
<PAGE>
(c) In case the Warrantholder shall exercise this Warrant with respect to
less than all of the Warrant Shares that may be purchased under this Warrant,
the Company will execute a new warrant in the form of this Warrant for the
balance of such Warrant Shares and deliver such new warrant to the
Warrantholder.
(d) The Company covenants and agrees that it will pay when due and payable
any and all stock transfer and similar taxes which may be payable in respect of
the issue of this Warrant or in respect of the issue of any Warrant Shares. The
Company shall not, however, be required to pay any tax imposed on income or
gross receipts or any tax which may be payable in respect of any transfer
involved in the issuance or delivery of this Warrant or at the time of surrender
and, until the payment of such tax, shall not be required to issue such Warrant
Shares.
ARTICLE III
Adjustment of Shares of Common Stock
Purchasable and of Exercise Price
The Exercise Price and the number and kind of Warrant Shares shall be
subject to adjustment from time to time upon the happening of certain events as
provided in this Article III.
Section 3.01: Mechanical Adjustments. (a) If at any time prior to the full
exercise of this Warrant, the Company shall (i) pay a dividend or make a
distribution on its shares of Common Stock in shares of Common Stock (other than
cash dividends or distributions out of surplus or earnings); (ii) subdivide,
reclassify or recapitalize its outstanding Common Stock into a greater number of
shares; or (iii) combine, reclassify or recapitalize its outstanding Common
Stock into a smaller number of shares, the Exercise Price in effect at the time
of the record date of such subdivision, combination, reclassification or
recapitalization shall be proportionately adjusted so that the Warrantholder
shall be entitled to receive the aggregate number and kind of shares which, if
this warrant had been exercised in full immediately prior to such time, he would
have owned upon such exercise and been entitled to receive upon such dividend,
subdivision, combination, reclassification or recapitalization. Such adjustment
shall be made successively whenever any event listed in this paragraph 3.01(a)
shall occur.
<PAGE>
(b) If the Company shall hereafter issue rights, options or warrants to all
holders of its outstanding Common Stock, without charge to such holders,
entitling them to subscribe for or purchase shares of Common Stock (or Common
Stock Equivalents) at a price (or having a conversion price per share) less than
the current market price of the Common Stock (as determined pursuant to
paragraph (e) of this Section 3.01) on the record date described below, the
Exercise Price shall be adjusted so that the Exercise Price shall equal the
price determined by multiplying the Exercise Price in effect immediately prior
to the date of such sale or issuance (which date in the event of distribution to
shareholders shall be deemed to be the record date set by the Company to
determine shareholders entitled to participate in such distribution) by a
fraction, the numerator of which shall be (i) the number of shares of Common
Stock outstanding on the date of such sale or issuance, plus (ii) the number of
additional shares of Common Stock which the aggregate consideration received by
the Company upon such issuance or sale (plus the aggregate of any additional
amount to be received by the Company upon the exercise of such rights or
warrants) would purchase at such current market price per share of the Common
Stock; and the denominator of which shall be (i) the number of shares of Common
Stock outstanding on the date of such issuance or sale, plus (ii) the number of
additional shares of Common Stock offered for subscription or purchase (or into
which the Common Stock Equivalents so offered are convertible). Such adjustments
shall be made successively whenever such warrants or rights are issued. To the
extent that shares of Common Stock are not delivered (or Common Stock
Equivalents are not delivered) after the expiration of such rights or warrants,
the Exercise Price shall be readjusted to the Exercise Price which would then be
in effect had the adjustments been made upon the issuance of such rights or
warrants been made upon the basis of delivery of only the number of shares of
Common Stock (or Common Stock Equivalents) actually delivered.
(c) In case the Company shall hereafter fix a record date for making a
distribution to the holders of Common Stock of assets or evidences of its
indebtedness (excluding cash dividends or distributions out of earnings and
dividends or distributions referred to in paragraph (a) of this Section 3.01) or
Common Stock subscription rights, options or warrants for Common Stock or Common
Stock Equivalents (excluding those referred to in paragraph (b) of this Section
3.01), then in each such case the Exercise Price in effect after such record
<PAGE>
date shall be adjusted to the price determined by multiplying the Exercise Price
in effect immediately prior thereto by a fraction, the numerator of which shall
be the total number of shares of Common Stock outstanding multiplied by the
current market price per share of Common Stock (as defined in paragraph (e) of
this Section 3.01), less the fair market value (as determined by the Company's
Board of Directors) of said assets or evidences of indebtedness so distributed
or of such Common Stock subscription rights, option and warrants or of such
Common Stock Equivalents applicable to one share of Common Stock, and the
denominator of which shall be the total number of shares of Common Stock
outstanding multiplied by such current market price per share of Common Stock.
Such adjustment shall be made successively whenever the record date for such
distribution is fixed and shall become effective immediately after such record
date.
(d) Whenever the Exercise Price payable upon exercise of each Warrant is
adjusted pursuant to paragraphs (a), (b) or (c) of this Section 3.01, the
Warrant Shares shall simultaneously be adjusted by multiplying the number of
Warrant Shares initially issuable upon exercise of each Warrant by the Exercise
Price in effect on the date thereof and dividing the product so obtained by the
Exercise Price, as adjusted.
(e) For the purpose of any computation under this Section 3.01, the current
market price per share of Common Stock at any date shall be deemed to be the
average of the daily closing price for 30 consecutive Business Days commencing
45 Business Days before such date. The closing price for each day shall be the
last sale price regular way or, in case no such reported sales take place on
such day, the average of the last reported bid and asked prices regular way, in
either case on the principal national securities exchange on which the Common
Stock is admitted to trading or listed, or if not listed or admitted to trading
on such exchange, the representative closing bid price as reported by NASDAQ, or
other similar organization if NASDAQ is no longer reporting such information, or
if not so available, the fair market price as determined by the Board of
Directors.
<PAGE>
(f) No adjustments in the Exercise Price shall be required unless such
adjustment would require an increase or decrease of at least three cents ($.03)
in such price; provided, however, that any adjustments which by reason of this
paragraph (f) are not required to be made shall be carried forward and taken
into account in any subsequent adjustment. All calculations under this Section
3.01 shall be made to the nearest cent or to the nearest one-hundredth of a
share, as the case may be. Notwithstanding anything in this Section 3.01 to the
contrary, the Exercise Price shall not be reduced to less than the then existing
par value of the Common Stock as a result of any adjustment made hereunder.
(g) In the event that at any time, as a result of any adjustment made
pursuant to paragraph (a) of this Section 3.01, the Warrantholder thereafter
shall become entitled to receive any shares of the Company, other than Common
Stock, thereafter the number of such other shares so receivable upon exercise of
any warrant shall be subject to adjustment from time to time in a manner and on
terms as nearly equivalent as practicable to the provisions with respect to the
Common Stock contained in paragraphs (a) to (g), inclusive, of this Section
3.01.
Section 3.02: Notice of Adjustment. Whenever the number of Warrant Shares
or the Exercise Price is adjusted as herein provided, the Company shall prepare
and deliver to the Warrantholder a certificate signed by its President, any Vice
President, Treasurer or Secretary, setting forth the adjusted number of shares
purchasable upon the exercise of this Warrant and the Exercise Price of such
shares after such adjustment, setting forth a brief statement of the facts
requiring such adjustment and setting forth the computation by which adjustment
was made.
Section 3.03: No Adjustment for Dividends. Except as provided in Section
3.01 of this Agreement, no adjustment in respect of any cash dividends shall be
made during the term of this Warrant or upon the exercise of this Warrant.
Section 3.04: Form of Warrant After Adjustments. The form of this Warrant
need not be changed because of any adjustments in the Exercise Price or the
number or kind of the Warrant Shares, and Warrants theretofore or thereafter
issued may continue to express the same price and number and kind of shares as
are stated in this Warrant, as initially issued.
<PAGE>
Section 3.05: Preservation of Purchase Rights in Certain Transactions.
(a) In case of any consolidation of the Company with or a merger of the
Company into another corporation or in case of any sale or conveyance to another
corporation of the property of the Company as an entirety or substantially as an
entirety, upon any such consolidation, merger, sale or conveyance and the
surviving entity is a publicly traded company, the Company agrees that a
condition of such transaction will be that the Company or such successor or
purchasing corporation, as the case may be, shall execute with the Warrantholder
an agreement granting the Warrantholder the right until the Expiration Date,
upon payment of the Exercise Price in effect immediately prior to such action,
to receive upon exercise of this Warrant the kind. and amount of shares and
other securities and property which he would have owned or have been entitled to
receive after the happening of such consolidation, merger, sale or conveyance
had this Warrant been exercised immediately prior to such action. Such agreement
shall provide for adjustments, which shall be as nearly equivalent as may be
practicable to the adjustments provided for in this Article Ill. The provisions
of this Section 3.05 shall similarly apply to successive consolidations,
mergers, sales or conveyances.
(b) In case of any consolidation of the Company with or a merger of the
Company into another corporation or in case of any sale or conveyance to another
corporation of the property of the Company as an entirety or substantially as an
entirety, upon any such consolidation, merger, sale or conveyance and the
surviving entity is a non-publicly traded company, the Company agrees that a
condition of such transaction will be that the Company shall mail to the
Warrantholders at the earliest applicable time (and, in any event not less than
20 days before any record date or other date set for definitive action) written
notice of the record date for such transaction to take place. Such notice shall
also set forth facts as shall indicate the effect of such action (to the extent
such effect may be known at the date of such notice) on the Exercise Price of
and the kind and amount of the shares of stock and other securities and property
deliverable upon exercise of this Warrant.
ARTICLE IV
Other Provisions Relating
to Rights of Warrantholders
Section 4.01: No Rights as Shareholders: Notice to Warrantholders. Nothing
contained in this Warrant shall be construed as conferring upon the
Warrantholder or his or its transferees the right to vote or to receive
dividends or to consent or to receive notice as a shareholder in respect of any
meeting of shareholders for the election of directors of the Company or of any
other matter or any rights whatsoever as shareholders of the Company.
Section 4.02: Lost, Stolen, Mutiliated or Destroyed Warrants.. If this
Warrant is lost, stolen, mutilated or destroyed, the Company may, on such terms
as to indemnity or otherwise as it may in its discretion impose (which shall, in
the case of a mutilated Warrant, include the surrender thereof), issue a new
Warrant of like denomination and tenor as, and in substitution for, this
Warrant.
<PAGE>
Section 4.03: Reservation of Shares.
(a) The Company covenants and agrees that at all times it shall reserve and
keep available for the exercise of this Warrant such number of authorized shares
of Common Stock as are sufficient to permit the exercise in full of this
Warrant.
(b) Prior to the issuance of any shares of Common Stock upon exercise of
this Warrant, the Company shall use its best efforts to secure the listing of
such shares of Common Stock upon the securities exchange or automated quotation
system, if any, upon which shares of Common Stock are then listed.
(c) The Company covenants that all shares of Common Stock issued on
exercise of this Warrant will be validly issued, fully paid, non-assessable and
free of preemptive rights.
Section 4.04: No Fractional Shares. Anything contained herein to the
contrary notwithstanding, the Company shall not be required to issue any
fraction of a share in connection with the exercise of this warrant, and in any
case where the Warrantholder would, except for the provisions of this Section
4.04, be entitled under the terms of this Warrant to receive a fraction of a
share upon exercise of this Warrant and receipt of the Exercise Price, issue the
larger number of whole shares purchasable upon exercise of this Warrant. The
Company shall not be required to make any cash or other adjustment in respect of
such fraction of a share to which the Warrantholder would otherwise be entitled.
<PAGE>
ARTICLE V
Treatment of Warrantholder
Prior to due presentment for registration or transfer of this Warrant, the
Company may deem and treat the Warrantholder as the absolute owner of this
Warrant (notwithstanding any notation of ownership or other writing hereon) for
the purpose of any exercise hereof and for all other purposes of the Company
shall not be affected by any notice to the contrary.
ARTICLE VI
Split-Up, Combination
Exchange and Transfer of Warrants
Section 6.01: Split-up, Combination, Exchange and Transfer of Warrants.
Subject to and limited by the provisions of Section 6.02 hereof, this Warrant
may be split up, combined or exchanged for another Warrant or Warrants
containing the same terms to purchase a like aggregate number of Warrant Shares.
If the Warrantholder desires to split up, combine or exchange this Warrant, he
or it shall make such request in writing delivered to the Company and shall
surrender to the Company this Warrant and any other Warrants to be so split up,
combined or exchanged. Upon any such surrender for a split-up, combination or
exchange, the Company shall execute and deliver to the person entitled thereto a
Warrant or Warrants, as the case may be, as so requested. The Company shall not
be required to effect any split-up, combination or exchange which will result in
the issuance of a warrant entitling the warrantholder to purchase upon exercise
a fraction of a share of Common Stock or a fractional Warrant. The Company may
require such Warrantholder to pay a sum sufficient to cover any tax or
governmental charge that may be imposed in connection with any split-up,
combination or exchange of Warrants.
<PAGE>
Section 6.02: Restrictions on Transfer. This Warrant may not be sold,
hypothecated exercised, assigned or transferred (a "Transfer'*), except (i) to
Value Investing Partners, Inc., any successor to the business of such company,
or any officer or employee of such company, or (ii) to any underwriter in
connection with a Public Offering of the Company's Common Stock, provided (as to
(ii)) that this Warrant is exercised immediately upon such Transfer and the
Common Stock issued upon such exercise is sold by such underwriter as part of
such Public Offering and, as to (i) and (ii), only in accordance with and
subject to the provisions of the Securities Act and the rules and regulations
promulgated thereunder. if at the time of such a Transfer a Registration
Statement is not in effect to register this Warrant under the Securities Act,
the Company may. require the Warrantholder to make such representations, and may
place such legends on certif icates representing this Warrant, as may be
reasonably required in the opinion of counsel to the Company to permit such a
Transfer without such registration.
ARTICLE VII
Registration Under the Securities Act of 1.933
Section 7.01: Piggyback Registration.
(a) Right to Include Registrable Securities. If at any time prior to the
Expiration Date the Company proposes to register any class of debt or equity
security or any Common Stock Equivalent under the Securities Act on any form for
the registration of securities under such Act, whether or not for its own
account (other than a registration form relating to (i) a registration of a
stock option, stock purchase or compensation or incentive plan or of stock
issued or issuable pursuant to any such plan, or a dividend investment plan;
(ii) a registration of securities proposed to be issued in exchange for
securities or assets of, or in connection with a merger or consolidation with,
another corporation; or (iii) a registration of securities proposed to be issued
in exchange for other securities of the Company) in a manner which would permit
<PAGE>
registration of Registrable Securities for sale to the public under the
Securities Act (a "Piggyback Registration"), it will at such time give prompt
written notice to all Holders of Registrable Securities of its intention to do
so and of such Holders' rights under this Section 7.01. Such rights are referred
to hereinafter as "Piggyback Registration Rights". Upon the written request of
any such Holder made within 20 days after the giving of any such notice (which
request shall specify the Registrable Securities intended to be disposed of by
such Holder and the intended method of disposition thereof), the Company will
include in the Registration Statement the Registrable Securities which the
Company has been so requested to register by the Holders thereof provided that
the Company need not include any such Registrable Securities in Registration
Statements filed after the Expiration Date.
(b) Withdrawal of Piggyback Registration by Company. If, any time after
giving written notice 'of its intention to register any securities in a
Piggyback Registration but prior to the effective date of the related
Registration Statement filed in connection with such Piggyback Registration, the
Company shall determine for any reason not to register such securities, the
Company will give written notice of such determination to each Holder and
thereupon shall be relieved of its obligation to register any Registrable
Securities in connection with such Piggyback Registration. All best efforts
obligations of the Company pursuant to Section 7.02 shall cease if the Company
determines to terminate any registration where Registrable Securities are being
registered pursuant to this Section 7.01.
(c) Piggyback Registration of Underwritten Public Offering. If a Piggyback
Registration requested pursuant to this Section 7.01 involves an underwritten
offering, then, (i) all Holders requesting to have their Registrable Securities
included in the Company's registration must sell their Registrable Securities to
the underwriters selected by the Company on the same terms and conditions as
apply to other selling shareholders; and (ii) any Holder requesting to have his
or its Registrable Securities included in such registration may elect in
writing, not later than 3 Business Days prior to the effectiveness of the
Registration Statement filed in connection with such registration, not to have
his or its Registrable Securities so included in connection with such
registration.
(d) Payment of Registration Expenses for Piggyback Registration. The
Company will pay all Registration Expenses in connection with each registration
of Registrable Securities requested pursuant to a Piggyback Registration Right
contained in this Section 7.01, except for the fees and disbursements of any
counsel retained by the Holders of the Registrable Securities being so
registered.
<PAGE>
(e) Priority in Piggyback Registration. if a Piggyback Registration
involves an underwritten offering and the managing underwriter advises the
Company in writing that, in its opinion, the number or kind of Registrable
Securities requested to be included in such Piggyback Registration would have a
material adverse effect on such offering, including a significant decrease in
the price at which such securities can be sold, then the Registrable Securities
to be offered for the accounts of Holders pursuant to a Piggyback Registration
Right shall be eliminated entirely or reduced pro rata as to all requesting
Holders on the basis of the relative number of Registrable Securities to be
included in such offering to the amount recommended by such managing
underwriter; provided, however, that no securities may be offered in such
registration for the account of persons other than the Company by virtue of
their also having "piggyback" registration rights, or otherwise, unless the
Registrable Securities requested to be included in such registration are so
included on a pro rata basis (by percentage of each class of securities) as to
such other persons holding "piggyback" rights and the Holders requesting
registration.
(f) Expiration of Piggyback Registration Rights. The Piggyback
Registration Rights shall survive the -exercise o the Warrant or the
transactions or events pursuant to which such Registrable Securities were
issued, but all such rights will terminate in all events on the Expiration Date.
Section 7.02: Demand Registration.
(a) Request for Registration. Subject to the limitations set forth below in
this Section 7.02, any Holder or Holders who hold in the aggregate 25% or more
of the then outstanding Registrable Securities may after October 6, 1993 from
time to time but prior to nine (9) months after the Expiration Date make written
requests for the registration under the Securities Act of all or part of their
Registrable Securities (a "Demand Registration") and the Company shall use its
best efforts to effect such Demand Registration. The Holders, as a group, shall
be limited to one Demand Registration and thereafter may not make any further
written requests for registration.
<PAGE>
(b) Limitations on Demand Registration. The Company shall not be required
to effect a Demand Registration sooner than (i) for a 120 day period
following the effective date of a registration statement pertaining to an
underwritten Public Offering for the account of the Company; (ii) if the
Company, in its reasonable judgment, determines that registration at the time
requested by the Holders would materially adversely affect the Company, by,
among other things, requiring disclosure of, any litigation or transactions at
an inopportune time, in which case the obligation of the Company to register any
Registrable Securities shall be delayed until the reason for such adverse affect
has ceased to exist; or (iii) if the timing of the Demand Registration is such
that a special audit of the Company would be required in connection with the
preparation of financial statements for the registration.
Section 7.03 Registration Procedures. If and whenever the Company is
required to use its best efforts to effect or cause the registration of any
Registrable Securities under the Securities Act as provided in this Article VII,
the Company will, as expeditiously as practicable:
(a) notify the selling Holders of Registrable Securities and the managing
underwriters, if any, promptly, and (if requested by any such Person) confirm
such- advice in writing, (i) when a Prospectus or any Prospectus supplement or
post-effective amendment has been filed, and, with respect to a Registration
Statement or any post-effective amendment, when the same has become effective;
(ii) of any request by the SEC for amendments or supplements to a Registration
Statement or related Prospectus or for additional information; (iii) of the
issuance by the SEC of any stop order suspending the effectiveness of a
Registration Statement or the initiation of any proceedings for that purpose;
(iv) if at any time the representations and warranties of the Company
contemplated by paragraph (n) below ceases to be true and correct; (v) of the
receipt by the Company of any notification with respect to the suspension of the
qualification of any of the Registrable Securities for sale in any jurisdiction
or the initiation or threatening of any proceeding for such purpose, and (vi) of
the happening of any event that makes any statement made in the Registration
Statement, the Prospectus or any document incorporated therein by reference
untrue or which requires the making of any changes in the Registration Statement
or Prospectus so that they will not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading;
<PAGE>
(b) make every reasonable effort to obtain the withdrawal of any order
suspending the effectiveness of a Registration Statement at the earliest
possible moment;
(c) if reasonably requested by the managing underwriters, immediately
incorporate in a Prospectus supplement or post-effective amendment such
information as the managing underwriters believe (on advice of counsel) should
be included therein as required by applicable law relating to such sale of
Registrable Securities, including, without limitation, information with respect
to the purchase price being paid for the Registrable Securities by such
underwriters and with respect to any other terms of the underwritten (or
"best-efforts" underwritten) offering; and make all required filings of such
Prospectus supplement or post-effective amendment as soon as notified of the
matters to be incorporated in such Prospectus supplement or post-effective
amendment;
(d) furnish to each selling Holder of Registrable Securities and each
managing underwriter, without charge, at least one signed copy of the
Registration Statement and any post-effective amendment thereto, including
financial statements and schedules, all documents incorporated therein by
reference and all exhibits (including those incorporated by reference);
(e) deliver to each selling Holder of Registrable Securities and the
underwriters, if any, without charge, as many copies of the Prospectus or
Prospectuses (including each preliminary Prospectus) and any amendment or
supplement thereto as such Persons may reasonably request; the Company consents
to the use of such Prospectus of any amendment or supplement thereto by each of
the selling Holders of Registrable Securities and the underwriters, if any, in
connection with the offering and sale of the Registrable Securities covered by
such Prospectus or any amendment or supplement thereto;
(f) prior to any public offering of Registrable securities, cooperate with
the selling Holders of Registrable Securities, the underwriters, if any, and
their respective counsel in connection with the registration or qualification of
such Registrable Securities for offer and sale under the securities or Blue Sky
laws of such jurisdictions within the United States as any seller or underwriter
reasonably requests in writing, keep each such registration or qualification
<PAGE>
effective during the period such Registration Statement is required to be kept
effective and to any and all other acts or things necessary or advisable to
enable the disposition in such jurisdictions of the Registrable Securities
covered by the applicable Registration Statement; Provided that the Company will
not be required to qualify generally to do business in any jurisdiction where it
is not then so qualified or to take any action which would subject the Company
to general service of process in any jurisdiction where it is not at the time so
subject;
(g) cooperate with the selling Holders of Registrable Securities and the
managing underwriters, if any, to facilitate the timely preparation and delivery
of certificates representing Registrable Securities to be sold and not bearing
any restrictive legends; and enable such Registrable Securities to be in such
denominations and registered in such names as the managing underwriters may
request at least two Business Days prior to any sale of Registrable Securities
to the underwriters;
(h) use its best efforts to cause the Registrable Securities covered by the
applicable Registration Statement to be registered with or approved by such
other governmental agencies or authorities within the United States as may be
necessary to enable the seller or sellers thereof or the underwriters, if any,
to consummate the disposition of such Registrable Securities.
(i) upon the occurrence of any event contemplated by paragraph (c)(vi)
above, prepare a supplement or post-effective amendment to the applicable
Registration Statement or related Prospectus or any document incorporated
therein by reference or file any other required document so that, as thereafter
delivered to the purchasers of the Registrable Securities being sold thereunder,
such Prospectus will not contain an untrue statement or a material fact or omit
to state any material fact necessary to make the statements therein not
misleading;
(j) with respect to each issue or class of Registrable Securities, use its
best efforts to cause all Registrable Securities covered by the Registration
Statements to be listed on each securities exchange, if any, on which similar
securities issued by the Company are then listed if requested by the Holders of
a majority of such issue or class of Registrable Securities;
<PAGE>
(k) except as otherwise provided in this Agreement, the Company shall have
sole control in connection with the Preparation, filing, withdrawal, amendment
or supplementing of each Registration Statement, the selection of underwriters,
and the distribution of any preliminary prospectus included in the Registration
Statement, and may include within the coverage thereof additional shares of
Common Stock or other securities for its own account or for the account of one
or more of its other security holders;
(1) Holders of Registrable Securities shall have no registration rights
hereunder in respect of any proposed transfer of such securities if, in the
opinion of recognized securities counsel to the Company (A) registration under
the Securities Act is not required for the transfer of the Registrable
Securities in the manner provided by such Holder and that there are no further
Securities Act resale restrictions on the Registrable Securities or (B) a
post-effective amendment to an existing registration statement would be legally
sufficient for such transfer.
The Company may require each seller of Registrable Securities as to which
any registration is being effected to furnish to the Company such information
regarding the distribution of such securities and such other information as may
otherwise be required by the Securities Act to be included in such Registration
Statement, as the Company may from time to time reasonably request in writing.
Each Holder of Registrable Securities agrees by acquisition of such
Registrable Securities that, upon receipt of any notice from the Company of the
happening of any event of the kind described in paragraphs (a) or (b) hereof,
such Holder will forthwith discontinue disposition of such Registrable
Securities covered by such Registration Statement or Prospectus until such
Holder's receipt of the copies of the supplemented or amended Prospectus
contemplated by paragraph (i) hereof, or until it is advised in writing by the
Company that the use of the applicable Prospectus may be resumed, and has
received copies of any additional or supplemental filings which are incorporated
by reference in such Prospectus, and, if so directed by the Company, such holder
will deliver to the Company (at the Company's expense) all copies, other than
permanent file copies then in such Holder's possession, of the Prospectus
covering such Registrable Securities current at the time of receipt of such
notice.
<PAGE>
Section 7.04: Indemnification.
(a) Indemnification by Company. The Company agrees to indemnify and hold
harmless, to the full extent permitted by the law, each Holder, its officers,
directors and agents and each Person who controls such Holder or agents (within
the meaning of the Securities Act) against all losses, claims, damages,
liabilities and expenses caused by any untrue or alleged untrue statement of a
material fact contained in any Registration Statement, Prospectus or preliminary
prospectus or any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, except insofar as the same are contained in any information
furnished in writing to the Company by such Holder expressly for use therein; vi
however, that the Company shall not be liable in any such case to the extent
that any such loss, claim, damage, liability or expense arises out of or in
based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in any preliminary prospectus if (i) such Holder failed to
send or deliver a copy of the Prospectus with or prior to the delivery of
written confirmation of the sale of Registrable Securities and (ii) the
Prospectus would have corrected such untrue statement or omission; and provided,
further, that the Company shall not be liable in any such case to the extent
that any such loss claim, damage, liability or expense arises out of or is based
upon an untrue statement or alleged untrue statement or omission or alleged
omission in the Prospectus, if such untrue statement or untrue statement,
omission or alleged omission is corrected in an amendment or supplement to the
Prospectus and if, having previously been furnished by or on behalf of the
Company with copies of the Prospectus as so amended or supplemented, such Holder
thereafter fails to deliver or cause to be delivered such Prospectus as so
amended or supplemented, prior to or concurrently with the sale of a Registrable
Security to the person asserting such loss, claim, damage, liability or expense
who purchased such Registrable Security from such Holder. The Company will also
indemnify underwriters, selling brokers, dealer managers, and similar securities
industry professionals participating in the distribution their officers and
directors and each person who controls such Persons (within the meaning of the
Securities Act) to the same extent as provided above with respect to the
indemnification of the Holders of Registrable Securities, if requested.
<PAGE>
(b) Indemnification by Holder of Registrable Securities. In connection with
any registration, each Holder will furnish to the Company in writing such
information and affidavits as the Company reasonably requests for use in
connection with any Registration Statement or Prospectus and agrees to
indemnify, to the same extent as the indemnification provided by the Company in
Section 7.04(a), the Company, its directors and officers and each Person who
controls the Company (within the meaning of the Securities Act) against all
losses, claims, damages, liabilities and expenses caused by any untrue statement
of a material fact or any omission of a material fact required to be stated in
any Registration Statement or Prospectus or preliminary prospectus or necessary
to make the statements therein not misleading, to the extent, but only to the
extent, that such untrue statement or omission is contained in or based upon any
information or affidavit so furnished in writing by such Holder to the Company
specifically for inclusion in such Registration Statement or Prospectus. In no
event shall the liability of any selling Holder of Registrable Securities
hereunder be greater in amount than the dollar amount of the net proceeds
received by such Holder upon the sale of the Registrable Securities giving rise
to such indemnification obligation. The Company shall be entitled to receive
indemnities from underwriters, selling brokers, dealer managers, and similar
securities industry professionals participating in the distribution, to the same
extent as provided above with respect to information so furnished in writing by
such Persons specifically for inclusion in any. prospectus or Registration
Statement.
(c) Conduct of Indemnification Procedure. Any party that proposes to assert
the right to be indemnified hereunder 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 an indemnifying party or parties under this
Section, notify each such indemnifying party of the commencement of such action,
suit or proceeding, enclosing a copy of all papers served, No indemnification
provided for hereunder shall be available to any party who shall fail to give
notice as provided in this Section 7.04(c) if the party to whom notice was not
given was unaware of the proceeding to which such notice would have related and
was prejudiced by the failure to give such notice but the omission so to notify
such indemnifying party of any such action, suit or proceeding shall not relieve
it from any liability that it may have to any indemnified party for contribution
<PAGE>
or otherwise than under this Section. 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 and the approval by the indemnifying party to such
indemnified party of its election so to assume the defense thereof and the
approval by the indemnified party of such counsel, the indemnifying party shall
not be liable to such indemnified party for any legal or other expenses, except
as provided below and except for the 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 counsel in any
such action, but the fees and expenses of such counsel shall be at the expense
of such indemnified party unless (i) the employment of counsel by such
indemnified party has been authorized in writing by the indemnifying parties,
(ii) the indemnified party shall have reasonably concluded that there may be a
conflict of interest between the indemnifying parties and the indemnified party
in the conduct of the defense of such action' (in which case the indemnifying
parties shall not have the right to direct the defense of such action on behalf
of the indemnified party) or (iii) the indemnifying parties shall not have
employed counsel to assume the defense of such action within a reasonable time
after notice of the commencement thereof, in each of which cases the fees and
expenses of counsel shall be at the expense of the indemnifying parties. An
indemnifying party shall not be liable for any settlement of any action, suit,
proceeding or claim effected without its written consent.
Section 7.05: Restrictions on Public Sale by Holder of Registrable
Securities. Each holder of Registrable Securities whose Registrable Securities
are covered by a Registration Statement filed pursuant to Article VII hereof
agrees, if requested by the managing underwriters in any underwritten
offering, not to effect any public sale or distribution of any securities of
the Company of the same class as the securities included in such Registration
Statement, including a sale pursuant to rule 144 under the Securities Act
<PAGE>
(except as part of such underwritten registration) , during the ten-day period
prior to, and during the period the officers and directors of the Company are
similarly restricted in the sale or distribution of any securities of the
Company pursuant to such Registration Statement, to the extent timely
notified in writing by the managing underwriters.
The foregoing provisions shall not apply to any Holder if such Holder is
prevented by applicable statute or regulation from entering any such agreement.
However, any such Holder shall undertake, in its request to participate in any
such underwritten offering, not to effect any public sale or distribution of the
applicable Registrable Securities unless it has provided 45 days prior written
notice of such sale or distribution to the underwriter or underwriters.
ARTICLE VIII
Other Matters
Section 8.01: Expenses of Transfer. The Company will from time to time
promptly pay, subject to the provisions of Section 6.01 and paragraph (d) of
Section 2.02, all taxes and charges that may be imposed upon the Company in
respect to the issuance or delivery of Warrant Shares upon the exercise of this
Warrant by the Warrantholder.
Section 8.02: Successors and Assigns. All the covenants and provisions of
this Warrant by or for the benefit of the Company shall bind and inure to the
benefit of its successors and assigns hereunder.
Section 8.03: No Inconsistent Agreements. The Company will not on or after
the date of this Warrant enter into any agreement with respect to its securities
which is inconsistent with the rights granted to the Holders in this Warrant or
otherwise conflicts with the provisions hereof. The Company has not previously
entered into any agreement with respect to its securities granting any
registration rights to any Person, except for the holders of the shares issued
upon the acquisition of Comstron Corporation. The rights granted to the Holders
hereunder do not in any way conflict with and are not inconsistent with the
rights granted to the holders of the Company's securities under said agreement
<PAGE>
Section 8.04: Amendments and Waivers. The provisions of this Warrant,
including the provisions of this sentence, may not be amended, modified or
supplemented, and waiver or consents to departures from the provisions hereof
may not be given unless the Company has obtained the written consent of holders
of at least a majority of the outstanding Registrable Securities. Holders shall
be bound by any consent authorized by this Section whether or not certificates
representing such Registrable Securities have been marked to indicate such
consent.
Section 8.05: Counterparts. This Warrant may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
so executed shall be deemed to be an original and all of , which taken together
shall constitute one and the same agreement.
Section 8.06: Governing Law. This Warrant shall be governed by and
construed in accordance with the laws of the State of New York.
Section 8.07: Severability. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstances, is
held invalid, illegal or unenforceable, the validity, legality and
enforceability of any such provisions in every other respect and of the
remaining provisions contained herein shall not be affected or impaired thereby.
Section 8.08: Integration/Entire Agreement. Warrant is intended by the
parties as a final expression of their agreement and intended to be a complete
and exclusive statement of the agreement and understanding of the parties hereto
in respect of the subject matter contained herein. There are no restrictions,
promises, warranties or undertakings, other than those set forth or referred to
herein with respect to the registration rights granted by the Company with
respect to the warrants sold pursuant to the Warrant. This Warrant supersedes
all prior agreements and understandings between the parties with respect to such
subject matter.
Section 8.09: Attorney's Fees. In any action or proceeding brought to
enforce any provisions of this Warrant to purchase, or where any provisions
hereof or thereof is validly asserted as a defense, the successful party shall
be entitled to recover reasonable attorneys' fees and disbursements in addition
to its costs and expenses and any other available remedy.
<PAGE>
Section 8.10: Computations of Consent. Whenever the consent or approval of
Holders of a specified percentage of Registrable Securities is required
hereunder, Registrable Securities held by the Company or its affiliates (other
than the Warrantholder or subsequent Holders if they are deemed to be such
affiliates solely by reason of their holdings of such Registrable Securities)
shall not be counted in determining whether such consent or approval was given
by the Holders of such required percentage.
Section 8.11: Notices. Notice or demand pursuant to this Warrant to be
given or made by the Warrantholder to or on the Company shall be sufficiently
given or made if sent by first class mail, postage prepaid, to the Warrantholder
or the Holder of Registrable Securities at his or its last known address as it
shall appear on the books of the Company.
Section 8.12: Headings. The Article headings herein are for convenience
only and are not part of this Warrant and shall not affect the interpretation
thereof.
IN WITNESS WHEREOF, this Warrant has been duly executed by the Company
under its corporate seal as of the lst day of December, 1992.
ARX, INC.
By:_________________________
Michael Gorin, President
(Corporate Seal)
ATTEST:
__________________________
Richard G. Satin, Secretary
<PAGE>
ASSIGNMENT
(To be executed only upon assignment of Warrant Certificate)
For value received, hereby sells, assigns and transfers unto the within
Warrant Certificate, together with all right, title and interest therein, and
does hereby irrevocably constitute and appoint attorney, to transfer said
Warrant Certificate on the books of the within-named Company with respect to the
number of Warrants set forth below, with full power of substitution in the
premises:
Name(s) of
Assignee(s) Address No. of Warrants
------------- -------- -----------------
And if said number of Warrants shall not be all the Warrants represented by the
Warrant Certificate, a new Warrant Certificate is to be issued in the name of
said undersigned for the balance remaining of the Warrants represented by said
Warrant Certificate.
Dated:
-----------------------------------
Note: The above signature should
correspond exactly with the
name on the face of this
Warrant Certificate.
<PAGE>
SUBSCRIPTION FORM
(To be executed upon exercise of Warrant) ARX, Inc.
The undersigned hereby irrevocably elects to exercise the right of purchase
represented by the within Warrant Certificate for, and to purchase thereunder,
shares of Common Stock, as provided for therein, and tenders herewith payment of
the purchase price in full in the form of cash or a certified or official bank
check in the amount of $
Please issue a certificate or certificates for such common Shares in the
name of, and pay any cash for any fractional share to:
Name___________________________________
(Please Print Name, Address
and Social Security No.)
Signature______________________________
Note: The above signature
should correspond
exactly with the
name on the first
page of this Warrant Certificate
or with the name of the assignee
appearing in the assignment form below.
And if said number of shares shall not be all the shares purchasable under
the within Warrant Certificate, a new Warrant Certificate is to be issued in the
name of said undersigned for the balance remaining of the shares purchasable
thereunder less any fraction of a share paid in cash.
October 30, 1996
Securities and Exchange Commission
450 Fifth Avenue
Washington, D.C. 20549
Re: Aeroflex Incorporated
Registration Statement on Form S-3
Gentlemen:
Reference is made to the filing by Aeroflex Incorporated (the "Company") of
a Registration Statement on Form S-3 (the "Registration Statement") with the
Securities and Exchange Commission pursuant to the provisions of the Securities
Act of 1933, as amended, covering the registration of 214,495 shares of Common
Stock of the Company, par value $.10 per share (the "Common Stock") obtainable
upon the exercise of Common Stock Purchase Warrants (the "Warrants").
As counsel for the Company, we have examined its corporate records,
including its Certificate of Incorporation, By-Laws, its corporate minutes, the
form of its Common Stock certificate and Warrants and such other documents as we
have deemed necessary or relevant under the circumstances.
Based upon our examination, we are of the opinion that:
1. The Company is duly organized and validly existing under the laws of the
State of Delaware.
2. The shares of Common Stock subject to the Registration Statement have
been duly authorized and, when issued in accordance with the terms of the
Warrants and the related Warrant Certificates, as more fully described in the
Registration Statement, will be validly issued, fully paid and non-assessable.
We hereby consent to be named in the Registration Statement and in the
prospectus which constitutes a part thereof as counsel to the Company, and we
hereby consent to the filing of this opinion as Exhibit 5.1 to the Registration
Statement.
Very truly yours,
/s/
BLAU, KRAMER, WACTLAR
& LIEBERMAN, P.C.
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
Board of Directors
Aeroflex Incorporated and Subsidiaries:
We consent to the incorporation by reference in this Registration Statement on
Form S-3 of our report dated August 12, 1996, relating to the consolidated
balance sheets of Aeroflex Incorporated and Subsidiaries as of June 30, 1996 and
1995 and the related consolidated statements of operations, stockholders' equity
and cash flows and related schedule for the years then ended which report
appears in the June 30, 1996 annual report on Form 10-K of Aeroflex
Incorporated, and to the reference to our firm under the caption "Experts" in
this Registration Statement.
KPMG Peat Marwick LLP
Jericho, New York
October 30, 1996
EXHIBIT 23.2
INDEPENDENT AUDITORS' CONSENT
Aeroflex Incorporated and Subsidiaries
We consent to the incorporation by reference in this Registration Statement
of Aeroflex Incorporated on Form S-3 of our report dated August 12, 1994 on the
consolidated statements of operations, stockholders' equity and cash flows and
financial statement schedule for the year ended June 30, 1994, appearing in the
Annual Report on Form 10-K of Aeroflex Incorporated for the year ended June 30,
1996 and to the reference to us under the heading "Experts" in such Prospectus,
which is part of this Registration Statement.
DELOITTE & TOUCHE LLP
Jericho, New York
October 30, 1996
