TII INDUSTRIES, INC.
SUBSCRIPTION AGREEMENT
AND
INVESTOR INFORMATION STATEMENT
INSTRUCTIONS
IMPORTANT: PLEASE READ CAREFULLY BEFORE SIGNING.
SIGNIFICANT REPRESENTATIONS ARE CONTAINED IN THIS DOCUMENT.
THERE ARE TWO AGREEMENTS ATTACHED. BOTH AGREEMENTS
NEED TO BE REVIEWED, COMPLETED AND EXECUTED AS FOLLOWS:
1. Fill in the missing information on Page 1.
2. Individual Investors must complete and sign Question 7.7 on
Page 4 and complete and sign the signature page on Page 8.
3. Entity Investors must complete Question 7.8 on Page 5 and sign
the signature page on Page 9 (certain persons affiliated with
the entity may be required to complete Question 7.7 and, if
so, copies of Page 4 should be added, completed and signed by
those persons).
DELIVER THE EXECUTED AGREEMENTS TO:
M.H. MEYERSON & CO., INC.
525 WASHINGTON BOULEVARD
34TH FLOOR
JERSEY CITY, NJ 07310
ATTENTION: MS. TRACY R. CEPEDA (800) 444-4114
<PAGE>
Print Name of Subscriber ___________________________
SUBSCRIPTION AGREEMENT AND INVESTOR INFORMATION STATEMENT
IMPORTANT: PLEASE REFER TO SCHEDULE 1 COMMENCING ON PAGE 10 WHEN REVIEWING THIS
DOCUMENT. THE SCHEDULE IS INCORPORATED HEREIN AND MADE A PART HEREOF.
The Company and the Investor hereby agree as follows:
1. SUBSCRIPTION FOR SECURITIES. I (sometimes referred to herein as the
"Investor") hereby subscribe for and agree to purchase $________________ of the
securities being offered by the Company described on SCHEDULE 1 hereto
("Securities") upon the terms and conditions set forth in this Agreement and
SCHEDULE 1. M.H. Meyerson & Co., Inc. ("M.H. Meyerson") is acting as exclusive
placement agent for the offering.
2. OFFERING PERIOD. The Securities are currently being offered by the
Company through the date set forth on SCHEDULE 1 ("Termination Date").
3. INVESTOR DELIVERY OF DOCUMENTS AND PAYMENT. I hereby tender to M.H.
Meyerson, as placement agent for the Company (i) the full purchase price for all
Securities subscribed for by me by check or wire in accordance with the
instructions set forth on SCHEDULE 1, and (ii) two manually executed copies of
this Subscription Agreement. Prior to the earlier of a Closing (as defined in
Section 5 hereof) or the Termination Date, my wire transfer will be held by M.H.
Meyerson in a non-interest bearing bank, segregated bank account subject to the
terms and conditions herein. If the Company does not receive and accept the
minimum subscriptions required to have a Closing as set forth on SCHEDULE 1 by
the Termination Date, my payment will be returned to me without interest or
deduction.
4. ACCEPTANCE OR REJECTION OF SUBSCRIPTION. The Company and M.H.
Meyerson have the right to reject this subscription for the Securities, in whole
or in part, for any reason and at any time prior to the Closing, notwithstanding
prior receipt by me of notice of acceptance of my subscription. In the event of
the rejection of this subscription, my payment will be returned promptly to me
without interest or deduction and, if my subscription is rejected in whole, this
Subscription Agreement will have no force or effect. The Securities subscribed
for herein will not be deemed issued to or owned by me until two copies of this
Subscription Agreement have been executed by me and countersigned by the Company
and the Closing with respect to my subscription has occurred.
5. CLOSING AND DELIVERY OF SECURITIES. A closing ("Closing") may occur
at the office of Graubard Mollen & Miller at such time as determined jointly by
the Company and M.H. Meyerson provided that M.H. Meyerson has received and the
Company has accepted subscriptions for the minimum amount of Securities as set
forth on SCHEDULE 1. In the event my subscription is accepted and there is a
Closing, my payment will be released to the Company and the certificates
representing the Securities will be delivered promptly to me along with a fully
executed version of this Agreement.
6. OFFERING TO ACCREDITED INVESTORS. This offering is limited to
accredited investors as defined in Rule 501(a) of Regulation D promulgated under
the Securities Act of 1933, as amended ("Securities Act"), and is being made
without registration under the Securities Act in reliance upon the exemptions
contained in Section 4(2) of the Securities Act and applicable state
<PAGE>
securities laws. As indicated by my responses on page 7 or 8 hereof, I am an
"accredited investor" within the meaning of Rule 501 promulgated thereunder. 1.
7. INVESTOR REPRESENTATIONS AND WARRANTIES. I acknowledge, represent
and warrant to the Company and M.H. Meyerson as follows:
7.1 Obligations of the Company and the Investor. The Company has no
obligation to me other than as set forth in this Agreement, including but not
limited to the obligations described in Section 7.1 of SCHEDULE 1. I have read
and agree to the restrictions set forth in Section 7.1 of SCHEDULE 1. I am aware
that, except for any rescission rights that may be provided under applicable
laws, I am not entitled to cancel, terminate or revoke this subscription, and
any agreements made in connection herewith will survive my death or disability.
In order to induce the Company to issue and sell the Securities to me, I
represent and warrant that the information relating to me stated herein is true
and complete as of the date hereof and will be true and complete as of the date
on which my purchase of Securities becomes effective. If, prior to the final
consummation of the offer and sale of the Securities, there should be any change
in such information or any of such information becomes incorrect or incomplete,
I agree to notify the Company and supply the Company promptly with corrective
information.
7.2 Information About the Company.
(1) I have read the confidential private placement memorandum
relating to this offering ("Memorandum") and all exhibits listed
therein and fully understand the Memorandum, including the Section
entitled "Risk Factors" and the Memorandum's exhibits. I have been
given access to full and complete information regarding the Company and
have utilized such access to my satisfaction for the purpose of
verifying the information included in the Memorandum and exhibits
thereto, and I have either met with or been given reasonable
opportunity to meet with officers of the Company for the purpose of
asking reasonable questions of such officers concerning the terms and
conditions of the offering of the Securities and the business and
operations of the Company and all such questions have been answered to
my full satisfaction. I have also been given an opportunity to obtain
any additional relevant information to the extent reasonably available
to the Company. I have received all information and materials regarding
the Company that I have reasonably requested. After my reading of the
materials about the Company, I understand that there is no assurance as
to the future performance of the Company.
(2) I have received no representation or warranty from the
Company or M.H. Meyerson or any of their respective officers,
directors, employees or agents in respect of my investment in the
Company. I (i) have not seen any advertisement, article, notice or
other communication published in any newspaper, magazine or similar
media or broadcast over television, radio or the Internet and (ii) have
not participated in any seminar or meeting whose attendees have been
invited by any general solicitation or general advertising.
<PAGE>
7.3 Speculative Investment. I am aware that the Securities are a
speculative investment that involves a high degree of risk including, but not
limited to, the risk of losses from operations of the Company and the total loss
of my investment. I have such knowledge and experience in financial and business
matters as to be capable of evaluating the merits and risks of an investment in
the Securities and have obtained, in my judgment, sufficient information from
the Company to evaluate the merits and risks of an investment in the Company. I
have either used a purchaser representative (as defined in Regulation D) or I do
not require any person to serve as my purchaser representative (as defined in
Regulation D) in connection with evaluating such merits and risks as I am
capable of relying on my own investigation in making a decision to invest in the
Company. I have been advised to seek independent advice from my professional
advisors relating to the suitability of an investment in the Company in view of
my overall financial needs and with respect to the legal and tax implications of
such investment. I believe that the investment in the Securities is suitable for
me based upon my investment objectives and financial needs, and I have adequate
means for providing for my current financial needs and contingencies and have no
need for liquidity with respect to my investment in the Company. The investment
in the Company will not constitute a substantial part of my investment
portfolio.
7.4 Restrictions on Transfer. I understand that (i) the Securities
have not been registered under the Securities Act or the securities laws of
certain states in reliance on specific exemptions from registration, (ii) no
securities administrator of any state or the federal government has recommended
or endorsed this offering or made any finding or determination relating to the
fairness of an investment in the Company, and (iii) the Company is relying on my
representations and agreements for the purpose of determining whether this
transaction meets the requirements of the exemptions afforded by the Securities
Act and applicable state securities laws. I acknowledge that there is no
assurance that the Company will file any Registration Statement for the
Securities I am purchasing, that such Registration Statement, if filed, will be
declared effective or, if declared effective, that the Company will be able to
keep it effective until I sell the securities registered thereon.
7.5 No Market for Securities. I am purchasing the Securities for my
own account for investment and not with a view to, or for sale in connection
with, any subsequent distribution of the Securities, nor with any present
intention of selling or otherwise disposing of all or any part of the
Securities. I understand that, although there is a public market for the Common
Stock included in the Securities, there is no assurance that such market will
continue and there is no market at present for the Units themselves or the
Warrants included in the Securities and it is unlikely that a market will ever
develop for these two securities in the future (the term Securities will be
deemed hereinafter to include the underlying securities). I agree that (i) the
purchase of the Securities is a long-term investment, (ii) I may have to bear
the economic risk of investment for an indefinite period of time because the
Securities have not been registered under the Securities Act and may never be
registered and, cannot be resold, pledged, assigned or otherwise disposed of
unless they are subsequently registered under the Securities Act and under
applicable securities laws of certain states, or an exemption from such
registration is available. I understand that the Company is under no obligation
to register the Securities, except as may be set forth in Section 7.1 of
SCHEDULE 1, or to assist me in complying with any exemption from such
registration under the Securities Act or any state securities laws. I hereby
authorize the Company to place a legend denoting the restrictions on the
certificates representing the Securities and corresponding "stop transfer"
instructions with respect to the Securities.
7.6 Entity Authority. If the Investor is a corporation, limited
liability company, partnership, company, trust, employee benefit plan,
individual retirement account, Keogh Plan or other tax-exempt entity, it is
authorized and qualified to become an investor in the Company and the person
signing this Subscription Agreement on behalf of such entity has been duly
authorized
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by such entity to do so and to carry out such subscriber's obligations under the
Subscription Agreement, including making such entity's representations and
warranties made hereby.
4
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7.7 ACCREDITED INVESTOR STATUS FOR INDIVIDUALS. (INVESTORS THAT ARE
CORPORATIONS, LIMITED LIABILITY COMPANIES, PARTNERSHIPS, REVOCABLE TRUSTS,
IRREVOCABLE TRUSTS, EMPLOYEE BENEFIT PLAN TRUSTS AND INDIVIDUAL RETIREMENT
ACCOUNTS SHOULD IGNORE THE FOLLOWING QUESTIONS AND PROCEED TO SECTION 7.8).
(a) I am an accredited investor within the meaning of Section
2(15) of the Securities Act and Rule 501 promulgated thereunder because (check
any boxes that apply):
My individual annual income during each of the two most recent
[ ] years exceeded $200,000 and I expect my annual income during
the current year will exceed $200,000.
If I am married, my joint annual income with my spouse during
[ ] each of the two most recent years exceeded $300,000 and I
expect my joint annual income with my spouse during the
current year will exceed $300,000.
[ ] My individual or joint (together with my spouse) net worth
(including my home, home furnishings and automobiles) exceeds
$1,000,000.
(b) The aggregate value of my assets is approximately
$___________.
(c) My aggregate liabilities are approximately $___________.
(d) My current and expected income is:
<TABLE>
<CAPTION>
--------------------------------------- -------------------------------
YEAR INCOME
--------------------------------------- -------------------------------
<S> <C>
2000 (estimated) $
--------------------------------------- -------------------------------
1999 (Actual) $
--------------------------------------- -------------------------------
1998 (Actual) $
--------------------------------------- -------------------------------
</TABLE>
I hereby confirm the answers to Section 7.7 are true and
correct in all respects as of the date hereof and will be on
the date of the purchase of Securities.
Executed this ____ day of ________, 2000.
Signature:
Print Name:
INDIVIDUAL INVESTORS MAY SKIP TO SECTION 7.9 ON PAGE 6. EACH PERSON
ASSOCIATED WITH AN ENTITY INVESTOR WHO IS REQUIRED UNDER SECTION 7.8 TO
SEPARATELY COMPLETE THE QUESTIONS IN THIS SECTION 7.7 MUST COMPLETE THIS SECTION
7.7 AND SIGN THE ABOVE CONFIRMATION.
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<PAGE>
7.8 ACCREDITED INVESTOR STATUS FOR ENTITIES. (INVESTORS WHO ARE
INDIVIDUALS SHOULD IGNORE THESE QUESTIONS.)
(a) The entity is a (check applicable box):
|_| Corporation
|_| Limited Liability Company
|_| Partnership
|_| Revocable Trust
|_| Irrevocable Trust (if the Investor is an Irrevocable Trust, a
supplemental questionnaire must be completed by the person directing
the decision for the trust. Please contact M.H. Meyerson for a copy of
such supplemental questionnaire. Its address and telephone number are
on SCHEDULE 1.)
|_| Employee Benefit Plan Trust
|_| Individual Retirement Account (If you are an IRA, skip (b))
(b) Check all boxes which apply:
|_| The Entity was NOT formed for the specific purpose of investing in the
Company
|_| The Entity has total assets in excess of $5 million dollars
|_| For Employee Benefit Plan Trusts Only: The decision to invest in the
Company was made by a plan fiduciary, as defined in Section 3(21) of
ERISA, who is either a bank, insurance company or registered investment
advisor.
(c) If you did not check the first two of the three boxes in
Question (b) OR if the Entity is an Individual Retirement Account, a
Self-directed Employee Benefit Plan Trust or an Irrevocable Trust, list the name
of each person who:
(i) owns an equity interest in the Entity (i.e., each
shareholder if the Entity is a corporation, each member if the
Entity is a limited liability company and each partner if the
Entity is a partnership); or
(ii) is a grantor for the revocable trust or Individual
Retirement Account; or
(iii) is the person making the investment decision for a
self-directed Employee Benefit Plan Trust; or
(iv) is the person making the investment decisions for an
Irrevocable Trust.
--------------------------- --------------------------
--------------------------- --------------------------
EACH PERSON LISTED ABOVE MUST SEPARATELY COMPLETE AND SUBMIT
TO THE COMPANY THE ANSWERS TO QUESTION 7.7 AND SIGN THE
WRITTEN CONFIRMATION AT THE END OF SECTION 7.7.
<PAGE>
7.9 No Offer Until Determination of Suitability. I acknowledge that
any delivery to me of the documents relating to the offering of the Securities
prior to the determination by the Company of my suitability will not constitute
an offer of the Securities until such determination of suitability is made.
7.10 For Florida Residents. The Securities have not been registered
under the Securities Act of 1933, as amended, or the Florida Securities Act, by
reason of specific exemptions thereunder relating to the limited availability of
the Offering. The Securities cannot be sold, transferred or otherwise disposed
of to any person or entity unless subsequently registered under the Securities
Act of 1933, as amended, or the Securities Act of Florida, if such registration
is required. Pursuant to Section 517.061(11) of the Florida Securities Act, when
sales are made to five (5) or more persons in Florida, any sale made pursuant to
Subsection 517.061(11) of the Florida Securities Act will be voidable by such
Florida purchaser either within three days after the first tender of
consideration is made by the purchaser to the issuer, an agent of the issuer, or
an escrow agent, or within three days after the availability of the privilege is
communicated to such purchaser, whichever occurs later. This constitutes such
communication. In addition, as required by Section 517.061(11) (a)(3), Florida
Statutes and by Rule 3-500.05(a) thereunder, if I am a Florida resident I have
had, at the offices of the Company, at any reasonable hour, after reasonable
notice, access to the materials set forth in the Rule that the Company can
obtain without unreasonable effort or expense.
8. INDEMNIFICATION. I hereby agree to indemnify and hold harmless the
Company and M.H. Meyerson, their respective officers, directors, stockholders,
employees, agents, and attorneys against any and all losses, claims, demands,
liabilities, and expenses (including reasonable legal or other expenses incurred
by each such person in connection with defending or investigating any such
claims or liabilities, whether or not resulting in any liability to such person
or whether incurred by the indemnified party in any action or proceeding between
the indemnitor and indemnified party or between the indemnified party and any
third party) to which any such indemnified party may become subject, insofar as
such losses, claims, demands, liabilities and expenses (a) arise out of or are
based upon any untrue statement or alleged untrue statement of a material fact
made by me and contained herein or omission to make a statement made herein not
misleading, or (b) arise out of or are based upon any breach by me of any
representation, warranty, or agreement made by me contained herein. M.H.
Meyerson is a third-party beneficiary of this Section and this Section may not
be modified or amended without the prior written agreement of M.H. Meyerson.
9. SEVERABILITY; REMEDIES. In the event any parts of this Subscription
Agreement are found to be void, the remaining provisions of this Subscription
Agreement are nevertheless binding with the same effect as though the void parts
were deleted.
10. GOVERNING LAW AND JURISDICTION. This Subscription Agreement will be
deemed to have been made and delivered in New York City and will be governed as
to validity, interpretation, construction, effect and in all other respects by
the internal laws of the State of New York. Each of the Company and the Investor
hereby (i) agrees that any legal suit, action or proceeding arising out of or
relating to this Subscription Agreement will be instituted exclusively in New
York State Supreme Court, County of New York, or in the United States District
Court for the Southern District of New York, (ii) waives any objection to the
venue of any such suit, action or proceeding and the right to assert that such
forum is not a convenient forum for such suit, action or proceeding, (iii)
irrevocably consents to the jurisdiction of the New York State Supreme Court,
County of New York, and the United States District Court for the Southern
District of New York in any such suit, action or proceeding, (iv) agrees to
accept and acknowledge service of any and all process that may be served in any
such suit, action or proceeding in New York State Supreme Court, County of New
York or in the United States District Court for the Southern District of New
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York and (v) agrees that service of process upon the Investor may be made by
certified mail to the Investor's address set forth on the signature page will be
deemed in every respect effective service of process upon it in any suit, action
or proceeding.
11. COUNTERPARTS. This Subscription Agreement may be executed in one or
more counterparts, each of which will be deemed an original but all of which
together will constitute one and the same instrument. The execution of this
Subscription Agreement may be by actual or facsimile signature.
12. BENEFIT. This Subscription Agreement is binding upon and inures to
the benefit of the parties hereto (and M.H. Meyerson to the extent it is a
third-party beneficiary hereof) and their respective heirs, executors, personal
representatives, successors and assigns. M.H. Meyerson is a third-party
beneficiary with respect to any sections hereof that so state or that otherwise
indicate that M.H. Meyerson would be entitled to rely on the representations,
warranties or covenants made by me therein.
13. NOTICES. All notices, offers, acceptance and any other acts under
this Subscription Agreement (except payment) must be in writing, and is
sufficiently given if sent to the addressees in person, by overnight courier
service, or, if mailed, postage prepaid, by certified mail (return receipt
requested), and will be effective three days after being placed in the mail if
mailed, or upon receipt or refusal of receipt, if delivered personally or by
courier or confirmed telecopy, in each case addressed to a party. All
communications to me should be sent to my preferred address on the signature
page hereto. All communications to the Company should be sent to the addresses
set forth on SCHEDULE 1. Each party may designate another address by notice to
the other parties.
14. ORAL EVIDENCE. This Subscription Agreement constitutes the entire
agreement between the parties with respect to the subject matter hereof and
supersedes all prior oral and written agreements between the parties hereto with
respect to the subject matter hereof. This Subscription Agreement may not be
changed, waived, discharged, or terminated orally, but rather, only by a
statement in writing signed by the party or parties against which enforcement or
the change, waiver, discharge or termination is sought.
15. SECTION HEADINGS. Section headings herein have been inserted for
reference only and will not be deemed to limit or otherwise affect, in any
matter, or be deemed to interpret in whole or in part, any of the terms or
provisions of this Subscription Agreement.
16. SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS. The
representations, warranties and agreements contained herein will survive the
delivery of, and the payment for, the Securities.
17. ACCEPTANCE OF SUBSCRIPTION. The Company may accept this
Subscription Agreement at any time on or before the Termination Date for all or
any portion of the Securities subscribed for by executing a copy hereof as
provided and notifying me within a reasonable time thereafter.
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SIGNATURE PAGE FOR INDIVIDUAL INVESTORS - COMPLETE ALL INFORMATION
---------------------------------------
Name: ____________________ Name of Joint Investor (if any): ___________________
Residence Address: ____________________________________________________________
Telephone: (H) ___________________ (W) _____________________ Fax ______________
Occupation: _________________________ Employer: ______________________________
Business Address: _____________________________________________________________
Send communications to: |_| Home |_| Office
Age: _______________
Social Security Number: ____________________
Check Manner in which securities are to be held:
[ ] [ ] [ ]
Individual Tenants in Joint Tenants with
Ownership common Right of Survivorship
(both parties must
sign)
[ ]
Community [ ]
Property Other (please
indicate)
ALL INVESTORS MUST SIGN AND PRINT NAME BELOW
Signature: _______________________________
Print Name: _______________________________
Signature: _______________________________
Print Name: _______________________________
The foregoing subscription is accepted as to _________________ Units and the
Company hereby agrees to be bound by its terms.
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TII INDUSTRIES, INC.
Dated: ______________________ By:_____________________________
Name: Paul G. Sebetic
Title: Vice President - Financial
SIGNATURE PAGE FOR ENTITY INVESTORS - COMPLETE ALL INFORMATION
-----------------------------------
Name of Entity: ________________________________________________________________
Address of Principal Office: __________________________________________________
Telephone: ___________________ Fax: ___________________
Taxpayer Identification Number: ______________________
Check type of Entity:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
[ ] [ ] [ ] [ ]
Individual Retirement
Employee Benefit Limited General Account
Plan Trust Partnership Partnership
[ ] [ ] [ ] [ ]
Limited Trust Corporation Other (please indicate)
Liability __________________
Company
Date of Formation or incorporation: ___________ State of Formation or incorporation: __________
</TABLE>
Describe the business of the Entity: ___________________________________________
------------------------------------------------------------------------------
List the names and positions of the executive officers, managing members,
partners or trustees authorized to act with respect to investments by the Entity
generally and specify who has the authority to act with respect to this
investment.
<TABLE>
<CAPTION>
------------------------------------------------- ------------------------------------- ------------------------------
Authority for this
Name Position investment (yes or no)
------------------------------------------------- ------------------------------------- ------------------------------
<S> <C> <C>
------------------------------------------------- ------------------------------------- ------------------------------
------------------------------------------------- ------------------------------------- ------------------------------
------------------------------------------------- ------------------------------------- ------------------------------
------------------------------------------------- ------------------------------------- ------------------------------
</TABLE>
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<TABLE>
<CAPTION>
--------------------------------------------------- ------------------------------------------------------------
<S> <C>
INVESTOR: The foregoing subscription is accepted as to ____________
Units and the Company hereby agrees to be bound by its
terms.
TII INDUSTRIES, INC.
---------------------------
Signature of Authorized Signatory
By: _____________________________
Name: Name: Paul G. Sebetic
Title: Title: Vice President - Financial
--------------------------------------------------- ------------------------------------------------------------
</TABLE>
SCHEDULE 1
1. Subscription. TII INDUSTRIES, INC. is offering a minimum of 1,300,000
and a maximum of 1,800,000 Units, each consisting of one share of the
Company's Common Stock, par value $0.01 per share ("Common Stock"), and
one Redeemable Common Stock Purchase Warrant ("Warrant"). The per-Unit
offering price shall be equal to 75% of the average of the mean between
the closing bid and closing asked prices for the Common Stock for the
five consecutive trading days ending on the last trading day prior to
the closing of the Offering (100% of such average being referred to as
the "Market Price"), with a minimum offering price of $1.75 and maximum
offering price of $3.00. Each investor must subscribe for a minimum of
$50,000, although a lower amount may be accepted in the discretion of
the Company and M.H. Meyerson. The actual number of Units each Investor
will receive will be based upon the actual per-Unit offering price. Any
monies deposited by an Investor in excess of such Investor's actual
accepted investment will be promptly returned without interest or
deduction following the Closing. The form of the Warrant is attached as
Exhibit B to the Memorandum.
2. Offering Period. The Company is offering the Securities until the
earlier of (i) the date by which 1,800,000 Units are sold, or (ii) June
29, 2000, unless such newer date is extended, which may be without
notice, to the Investor, by the mutual consent of M.H. Meyerson and the
Company to a date not later than August 14, 2000 ("Termination Date").
3. Purchase. You must remit payment of the amount subscribed for as
follows:
PNC Bank, NA
Pittsburgh, PA
ABA #: 031-207-607
Account Name: M.H. Meyerson & Co., Inc. - TII Industries Special Account
Account #: 8013-62-0715
4. Not applicable.
5. Closing. In order to close this Offering, the Company must receive and
accept subscriptions for a minimum of 1,300,000 Units on or before the
Termination Date. A Closing (the "Closing") will be held promptly
following the earlier of the
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acceptance of subscriptions for 1,800,000 Units and, provided at least
1,300,000 Units are sold, the Termination Date.
6. Not applicable
7.1 Obligations of the Company and the Investor.
1. Registration Rights.
(a) Mandatory Registration. The Company shall file, within 45
days after the Closing, a Registration Statement ("Registration
Statement") under the Securities Act and make appropriate filings under
"blue sky" laws in such states as M.H. Meyerson shall reasonably
specify, registering for resale the Common Stock and Warrants included
in the Units and the "Extra Warrants" referred to below and the Common
Stock underlying the Warrants and the Extra Warrants, and, to the
extent permitted, registering the issuance of such Common Stock upon
the exercise of the Warrants and Extra Warrants, as the case may be
(collectively, the "Registrable Securities"). The Company shall use its
best efforts to have the Registration Statement declared effective by
the 180th day after the Closing ("Target Date"). If the Registration
Statement is not declared effective by the SEC by the Target Date, then
on the Target Date and on each monthly anniversary of the Target Date
thereafter until the earlier of the effective date of the Registration
Statement ("Effective Date") or the nineteenth monthly anniversary of
the Target Date, the Company shall issue to each purchaser of Units in
the Offering, Warrants ("Extra Warrants") to purchase a number of
shares of Common Stock equal to 5% of the number of Warrants purchased
by him in the Offering. The Extra Warrants shall have the same terms as
the Warrants included in the Units sold in the Offering. The Company
shall keep the Registration Statement current and effective until all
the securities registered thereunder are sold or can be sold freely
under an appropriate exemption under the Securities Act and the "blue
sky" laws of the states reasonably specified by M.H. Meyerson, without
limitation. The Company shall bear all fees and expenses incurred by
the Company in connection with the preparation of the Registration
Statement and filing it with the SEC and the NASD, including the fees
(no more than $15,000) and disbursement of one special counsel for all
of the holders of the Registrable Securities in connection with the
registration of the Registration Securities and the preparation,
filing, modifying and amending of the Registration Statement. M.H.
Meyerson has selected Graubard Mollen & Miller as such special counsel
and the investor acknowledges and agrees to this selection.
(b) "Piggy-back" Registration. If at any time commencing 180
days after the Closing, if the Registration Statement referred to in
7.1 (a) above shall not be effective, and the Company shall file a
registration statement (excluding registration statements on Forms S-4
and S-8), the holders of the Registrable Securities shall have the
right to include the Registrable Securities in such registration
statement. If the registration statement is filed in connection with an
underwritten offering on behalf of the Company, and the managing
underwriters advise the Company in writing that, in their good faith
opinion, the number of securities requested to be included in such
registration statement exceeds the number which can be sold in such
offering, the Company will include in such registration statement the
Registrable Securities provided that such holders agree not to sell any
of such Registrable Securities for a period of 90 days from the
effective date of such Registration Statement without the prior consent
of such managing underwriter. The Company shall keep the Registration
Statement
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effective and current until the earlier of the date by which all the
securities registered thereunder have been sold or can be sold freely
under an appropriate exemption under the Securities Act.
(c) Indemnification by Company. The Company shall indemnify
the Holders of the Registrable Securities to be sold pursuant to any
registration statement hereunder, the officers and directors of each
Holder and each person, if any, who controls such Holders within the
meaning of Section 15 of the Securities Act or Section 20(a) of the
Securities Exchange Act of 1934, as amended ("Exchange Act"), or any
state securities law or regulation, against all loss, claim, damage,
expense or liability (including all reasonable attorneys' fees and
other expenses reasonably incurred in investigating, preparing or
defending against any claim whatsoever incurred by the indemnified
party in any action or proceeding between the indemnitor and
indemnified party or between the indemnified party and any third party
or otherwise) to which any of them may become subject under the
Securities Act, the Exchange Act or any other statute or at common law,
arising from such registration statement or based upon any untrue
statement or alleged untrue statement of a material fact contained in
(i) any preliminary prospectus, the registration statement or
prospectus (as from time to time each may be amended and supplemented);
(ii) any post-effective amendment or amendments or any new registration
statement and prospectus in which is included the Underlying Common
Shares; or (iii) any application or other document or written
communication (collectively called "application") executed by the
Company or based upon written information furnished by the Company in
any jurisdiction in order to qualify the Underlying Common Shares under
the securities laws thereof or filed with the Securities and Exchange
Commission, any state securities commission or agency, Nasdaq or any
securities exchange; or the omission or alleged omission therefrom of a
material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were
made, not misleading, unless such statement or omission is made in
reliance upon, and in conformity with, written information furnished to
the Company by and with respect to such registered holders ("Purchaser
Information") expressly for use in any preliminary prospectus, the
registration statement or prospectus (including any new registration
and prospectus), or any amendment (including any post-effective
amendment) or supplement thereof, or in any application, as the case
may be, or unless the indemnities failed to deliver a final prospectus
in which the material misstatement or omission was corrected. The
Company agrees promptly to notify such Holders of the commencement of
any litigation or proceedings against the Company or any of its
officers, directors or controlling persons in connection with the issue
and sale or resale of the Underlying Common Shares or in connection
with the registration statement or prospectus.
(d) Successors and Assigns. The registration rights granted to
the holders of the Registrable Securities inure to the benefit of all
the holders' successors, heirs, pledges, assignees, transferees and
purchasers of any of the Registrable Securities.
(e) Permissible Delays and Exceptions
(i) The Company shall be entitled to postpone the filing of
any Registration Statement otherwise required to be prepared and filed
by it (other than the Registration Statement required under Section
7.1.1(a) of this Schedule 1) or suspend keeping any Registration
Statement or
13
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prospectus current and/or effective without suspending such
effectiveness by instructing the holders of Registrable Securities not
to sell any Registrable Securities included in any such Registration
Statement for a period not to exceed 15 calendar days in any
consecutive 120-day period and not to exceed 23 calendar days in any
consecutive 365-day period, if the Company would be required to
disclose in such Registration Statement any material business
situation, transaction or negotiation not otherwise disclosed as to
which the Company's Board of Directors has determined, in good faith,
that valid, significant and material business reasons exist that
warrant that such information not be disclosed and, in the opinion of
counsel to the Company, such disclosure would be required in the
Registration Statement to keep the corresponding prospectus current.
Nothing in this Section 7.1.1(e) shall relieve the Company of its
obligation to issue Extra Warrants pursuant to Section 7.1.1(a) of this
Schedule 1.
(ii) The Company shall not be obligated to include in any
Registration Statement the Registrable Securities held by any holder
thereof unless such holder has furnished to the Company in writing the
information regarding such holder required by law to be disclosed in
such Registration Statement pursuant to Sections 507 and 508 of
Regulation S-K promulgated under the Securities Act.
8.-12. Not Applicable.
13. Notices. All communications to the Company should be sent to:
TII Industries, Inc.
1385 Akron Street
Copiague, New York 11726
Attention: Chief Financial Officer
(631) 789-5000 (phone)
(631) 789-2228 (fax)
with copies to:
1. Parker Chapin LLP
The Chrysler Building
405 Lexington Avenue
New York, New York 10174
Attention: Richard A. Rubin, Esq.
(212) 704-6130 (phone)
(212) 704-6288 (fax)
M.H. Meyerson & Co., Inc.
525 Washington Boulevard
34th Floor
Jersey City, New Jersey 07310
Attention: Ronald J. Heller
(800) 444-4114 (phone)
(201) 459-9458 (fax)
and
Graubard Mollen & Miller
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600 Third Avenue
New York, New York 10016
Attention: David Alan Miller, Esq.
(212) 818-8661 (phone)
(212) 818-8881 (fax)
14. - 17. Not applicable
15
