As filed with the Securities and Exchange Commission on March 9, 2000.
Registration No. 333-56083
==============================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT NO. 7
TO
FORM S-3
Registration Statement Under
The Securities Act of 1933
GLOBAL TECHNOVATIONS, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 84-1027821
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
7108 Fairway Drive, Suite 200, Palm Beach Gardens, FL 33418
(561) 775-5756
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
Mr. William C. Willis, Jr., President
GLOBAL TECHNOVATIONS, INC.
7108 Fairway Drive, Suite 200
Palm Beach Gardens, FL 33418
(561) 775-5756
(Name, address, including zip code, and telephone number, including
area code, of agent for service)
Copy to:
Michael D. Harris, Esq.
Michael Harris, P.A.
1645 Palm Beach Lakes Boulevard, Suite 550
West Palm Beach, Florida 33401
(561) 478-7077
Approximation date of commencement of proposed sale to the public: As
soon as practicable after this Registration Statement becomes effective.
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]
<PAGE>
<TABLE>
CALCULATION OF REGISTRATION FEE
<S> <C> <C> <C> <C>
Proposed Proposed
maximum maximum
Title of each class offering aggregate Amount of
of securities Amount to be price per offering registration
to be registered registered share price fee
Common Stock 901,683(1) $1.032 (2) $ $1,245.52(3)
($.001 par value)
TOTAL REGISTRATION FEE $1,245.52(3)
- -----------------------------------------
</TABLE>
(1) Consists of 378,300 shares of common stock issued in connection with the
conversion of 5% Series A Convertible Preferred Stock ("Series A
Preferred"), and 523,383 shares of common stock to be issued upon exercise
of warrants.
(2) Estimated solely for the purpose of computing the registration fee based on
the average of the high and low price of the Registrant's common stock in
the consolidated reporting system on the American Stock Exchange on June 1,
1998.
(3) Previously paid in connection with the initial filing of this registration
statement covering 3,500,000 shares of common stock. Because of the
redemption of the Series A Preferred and sales under Rule 144, the number
of shares of common stock covered by this registration statement has been
reduced even though an additional 273,383 shares of common stock, issuable
upon exercise of additional warrants, have been added.
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 or until the Registration Statement shall become effective on
such date as the Commission, acting pursuant to said Section 8(a), may
determine.
<PAGE>
<TABLE>
GLOBAL TECHNOVATIONS, INC.
CROSS REFERENCE SHEET
<S> <C>
Form S-3 Item Numbers and Caption Heading in Prospectus
1. Forepart of the Registration Statement and
Outside Front Cover of Prospectus.................................... Cover Page of Form S-3 and
Cover Page of Prospectus
2. Inside Front and Outside Back Cover Pages of
Prospectus........................................................... Inside Front and Outside Back
Cover Pages of Prospectus
3. Summary Information, Risk Factors...................................... Not Applicable and
and Ratio of Earning to Fixed Charges.................................. Risk Factors
4. Use of Proceeds........................................................ Cover Page of Prospectus
5. Determination of Offering Price........................................ Cover Page of Prospectus
6. Dilution............................................................... Not Applicable
7. Selling Security Holders............................................... Selling Stockholders
8. Plan of Distribution................................................... Cover Page of Prospectus and
Plan of Distribution
9. Description of Securities to be Registered............................. Documents Incorporated by
Reference and Description of
Warrants
10. Interests of Named Experts and Counsel................................. Legal Matters and Experts
11. Material Changes....................................................... Recent Developments
12. Incorporation of Certain Information By Reference...................... Documents Incorporated by
Reference
13. Disclosure of Commission Position on .................................. Part II
Indemnification for Securities Act Liabilities
14. Other Expenses of Issuance and Distribution............................ Part II
15. Indemnification of Directors and Officers.............................. Part II
16. Exhibits and Financial Statement Schedules............................. Part II
17. Undertakings........................................................... Part II
</TABLE>
<PAGE>
PROSPECTUS
GLOBAL TECHNOVATIONS, INC.
901,683 Shares of Common Stock
This Prospectus relates to an aggregate of 901,683 shares of common stock, $.001
par value per share (the "Common Stock"), of Global Technovations, Inc.,
formerly known as Top Source Technologies, Inc. (the "Company") being offered
for sale by certain stockholders and warrantholders of the Company (the "Selling
Stockholders"). These shares consist of 378,300 shares acquired in connection
with the conversion of the outstanding 5% Series A Convertible Preferred Stock
(the "Series A Preferred"), and 523,383 shares issuable upon the exercise of
three classes of warrants (the "Warrants"). In May 1998, the Company sold to two
foreign purchasers (the "Purchasers"), which are two of the Selling
Stockholders, an aggregate of 1,000 shares of Series A Preferred for $1,000,000
(all of which has been converted or redeemed) and issued Warrants to purchase
250,000 shares of the Company's Common Stock ("Class A Warrants") to the
Purchasers and three other corporations designated by Intercontinental Holding
Company, Ltd., the Placement Agent. The Class A Warrants are exercisable at
$1.10 per share. In December 1998, the Company and the Purchasers modified the
Series A Preferred resulting in the Company issuing an additional 25,000
Warrants exercisable at approximately $.89 per share (the "Class B Warrants").
The Company restructured its outstanding $3,020,000 9% Convertible Notes (the
"Notes") and issued to certain noteholders warrants to purchase shares of the
Company's Common Stock ("Class C Warrants"). The Class C Warrants are
exercisable at approximately $1.78, which price was $1.00 above market on the
date of the agreement. The Series A Preferred and Warrants were issued to
accredited investors pursuant to exemptions from registration under Section 4(2)
of the Securities Act of 1933 (the "Securities Act") and Rule 506 thereunder.
The Company was required to register the underlying shares of Common Stock. See
"Description of Warrants".
As of the date of this Prospectus, the Company's officers and directors
beneficially own approximately 5.61% of the Company's Common Stock. Based upon
information available to the Company, no stockholder beneficially owns 5% or
more of the Company's Common Stock. On March 2, 2000, the closing price of the
Company's Common Stock on the American Stock Exchange was approximately $1.69.
All of the shares of Common Stock are offered for the respective
accounts of the Selling Stockholders as listed in this Prospectus under "Selling
Stockholders". The Company will receive none of the proceeds from the sale of
the shares of Common Stock by the Selling Stockholders. However, the Company
will receive a maximum of approximately $739,372 in connection with the exercise
of the 523,383 Warrants, the underlying shares of which are covered by this
Prospectus. Such proceeds will be used for general corporate purposes. All of
the expenses of this offering, estimated at $50,000 will be borne by the
Company.
The Company has been advised by the Selling Stockholders that the
Common Stock may be offered and sold from time to time by or on behalf of the
Selling Stockholders, in or through transactions or distributions (including
crosses and block transactions) on the American Stock Exchange or in the
over-the-counter market at market prices prevailing at the time of sale, or at
negotiated prices, and in connection therewith commissions may be paid to
brokers. Brokers participating in such transactions may act as agents for the
Selling Stockholders. The Selling Stockholders, and any brokers participating in
this offering may be deemed to be "underwriters" within the meaning of the
Securities Act, and any commissions received by them may be deemed to be
underwriting compensation.
THE SECURITIES OFFERED HEREBY INVOLVE A HIGH DEGREE OF RISK. SEE "RISK FACTORS".
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE COMMISSION OR
ANY STATE SECURITIES 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 March 9, 2000.
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith to files reports, proxy statements and other information
with the Securities and Exchange Commission (the "Commission"). Such reports,
proxy statements and other information concerning the Company can be inspected
and copied at the Public Reference Room maintained by the Commission at Room
1024, 450 Fifth Street, N.W., Washington, D.C. 20549 and at the Commission's
regional offices at 500 West Madison Street, Suite 1400, Chicago, Illinois
60604-2511, and 7 World Trade Center, 13th Floor, New York, New York 10048.
Copies of this material may also be obtained at prescribed rates from the Public
Reference Section of the Commission, 450 Fifth Street N.W., Washington, D.C.
20549. The Commission maintains a World Wide Web site that contains reports,
proxy statements and other information regarding registrants including the
Company that file electronically with the Commission. The address of the site is
http:\\www.sec.gov. Reports, proxy statements and other information concerning
the Company can also be inspected at the offices of the American Stock Exchange,
Inc., 86 Trinity Place, New York, New York 10006.
The Company has filed with the Commission a Registration Statement
under the Securities Act with respect to the Common Stock offered by this
Prospectus. This Prospectus does not contain all the information set forth in
the Registration Statement certain parts of which are omitted in accordance with
the rules of the Commission. For further information with respect to the Company
and the Common Stock offered hereby, reference is made to the Registration
Statement including the exhibits. Statements contained in this Prospectus as to
the contents of any contract or other document are not necessarily complete and,
where the contract or other document has been filed as an exhibit to the
Registration Statement, each such statement is qualified in all respects by
reference to the applicable document filed with the Commission.
The Company will provide without charge to each person, including any
beneficial owner, to whom a copy of this Prospectus is delivered, upon written
or oral request of such person, a copy of any or all of the information that has
been incorporated by reference in this Prospectus (other than exhibits).
Requests should be directed to the Company at its principal executive offices,
7108 Fairway Drive, Suite 200, Palm Beach Gardens, Florida, 33418-3757, (561)
775-5756.
<PAGE>
DOCUMENTS INCORPORATED BY REFERENCE
On October 6, 1992, the Company's change of domicile merger from
Colorado to Delaware became effective. Top Source, Inc., a Colorado corporation
merged into its wholly-owned subsidiary Top Source Technologies, Inc., formerly
known as Top Source, Inc., a Delaware corporation. The specifics of the merger
are described in the Form 8-B filed with the Commission on November 14, 1992,
which is specifically incorporated by reference into this Prospectus. As a
result of the change of domicile merger, the Form 8-A, which is incorporated by
reference herein, was filed with the Commission by the Company's predecessor,
Top Source, Inc., a Colorado corporation.
The following documents filed with the Commission are hereby
specifically incorporated by reference into this Prospectus:
(a) The Company's annual report on Form 10-K, for the fiscal year ended
September 30, 1999;
(b) The Company's quarterly report on Form 10-Q for the quarter ended December
31, 1999;
(c) The Company's proxy statement filed January 28, 2000 pursuant to Section 14
of the Exchange Act;
(d) Report on Form 8-K filed on October 15, 1999, as amended on
December 13, 1999.
(e) The description of the Company's Common Stock filed by the Company
predecessor, Top Source, Inc., a Colorado corporation, which is contained
in the Registration Statement on Form 8-A filed on March 12, 1992, File No.
1-11046, including any amendments or reports filed for the purpose of
updating such description;
(f) The description of the Company's change of domicile merger which is
contained in the Registration Statement on Form 8-B filed on November 14,
1992 and any amendments and reports thereto; and
All other reports filed by the Company pursuant to Section 13(a) or
15(d) of the Exchange Act since the filing of the Form 10-Q for the
quarter ended December 31, 1999.
In addition, all documents subsequently filed by the Company pursuant
to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act prior to the
termination of the offering made by this Prospectus shall be deemed to be
incorporated by reference into this Prospectus. 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 in this Prospectus or in any
other subsequently filed document which also is or is deemed to be incorporated
by reference in this Prospectus or in a supplement hereto 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.
<PAGE>
RISK FACTORS
The shares of Common Stock of the Company involve a high degree of
risk, including, but not necessarily limited to the risk factors described
below. Each prospective investor should carefully consider the following risk
factors inherent in and affecting the business of the Company and this offering
before making an investment decision. All statements, trend analysis and other
information contained in this Prospectus relating to the Company's ability to
complete the development of new products, its ability to consummate any
acquisitions, On-Site Analysis, Inc. ("OSA, Inc."), formerly known as Top Source
Instruments, Inc., future operating results, the ability of the Company to
achieve profitability, marketability of the Company's on-site oil analyzer
("OSA-II"), the strategic alliance formed with Flying J, Inc. ("Flying J"), the
strategic alliance with Speedco, Inc. ("Speedco"), and the potential revenues
which may arise therefrom, the ability of the Company to enter into additional
strategic alliances or develop new technologies and the Company's future
compliance with debt covenants as well as other statements including words such
as "seek", "anticipate", "believe", "plan", "estimate", "expect", "intend" and
other similar expressions constitute forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995. Readers are
cautioned not to place undue reliance on these forward-looking statements, which
speak only as of the date of this Prospectus. Some or all of the results
anticipated by these forward-looking statements may not occur since these
statements are subject to risks and uncertainties that could cause actual
results to differ materially from those contemplated in such forward-looking
statements. Such risks and uncertainties include those identified in this "Risk
Factors" section as well as the following: the Company's ability to market
OSA-IIs and new products it is developing; the acceptance of the OSA-II
technology by the marketplace; a general tendency of large corporations not to
change from known technology to emerging new technology; the reliability of the
OSA-II technology over an extended period of time; the Company's ability to
attract additional strategic partners for OSA-II and its proposed new hair-care
system; and other matters which may increase the Company's current losses.
Historical Losses. Since inception, the Company has never reported
income from operations. As of December 31, 1999, the Company had a retained
earnings deficit of $26,232,043. The Company has provided cash to support its
operations from the income generated by Top Source Automotive, Inc. ("TSA"), the
recent sale of substantially all of the assets of TSA and related assets, the
sale of the assets of United Testing Group, Inc. in 1996, the sale of securities
pursuant to private placements and the exercise of stock options and warrants
and from borrowings from institutional and private lenders. During the last
three years, the Company has shifted its primary focus toward the sale of its
OSA-II, which the Company completed developing about in the summer of 1998.
Previously, the Company generated only limited revenues from the sale and lease
of its first generation on-site oil analyzers ("OSA-Is"). Revenue for OSA, Inc.
for the year ended September 30, 1999 was $1,389,678. The identifiable assets
relating to the oil analysis services segment were approximately $5,683,000,
which includes the net value of the capitalized database of $1,862,000 at
September 30, 1999. In order to achieve profitability, for which no assurances
can be given, the Company is relying upon its ability to market and sell OSA-IIs
in sufficient numbers to pay the Company's substantial fixed and other expenses.
The Company believes that its marketing efforts will be successful. However, if
the Company is unable to meet its goals or to have the necessary resources to
sustain its marketing activities it could have a material adverse effect on the
Company's business, the carrying value of the above listed assets, and the
financial condition of the Company. The Company will continue to evaluate the
success of the new marketing efforts as well as the carrying value of the
related assets. There can be no assurances that the Company will be profitable
from operations in the future.
Reliance on On-Site Oil Analyzer. As the result of the TSA sale, the
Company currently is only generating revenue from the sale of the OSA-II.
Because the Company is relying upon one product, there is a substantially
increased degree of risk to investors with only limited capital and no other
current revenue producing assets beyond the OSA-II. The Company must develop a
profitable business model in order to remain operational over the long term.
Development of OSA-II. The Company completed the development of the new
OSA-II and in August 1998 completed the assembly of and shipped the first seven
OSA-IIs. However, as with the development of any new product, unforeseen delays
occur and problems may be discovered. Sophisticated computer software and
complex machines often encounter developmental difficulties or "bugs" which only
become apparent subsequent to widespread commercial use. For example, as part of
this continued internal improvement of the OSA-II, OSA, Inc. has upgraded the
technology of all OSA-IIs previously sold or leased. The cost to OSA, Inc. was
approximately $150,000. Problems which may arise in the operation of the OSA-IIs
could have a material adverse effect upon the Company's future operations.
Inability to Market OSA-IIs. The Company has devoted substantial
resources and different approaches to marketing the OSA-Is and OSA-IIs. Although
the Company's marketing efforts over the last several years have increased the
number of OSAs being used, the Company has only received orders for tests or
leases of multiple machines from seven companies. Without the receipt of
numerous orders for multiple OSA-IIs and the generation of revenue by end-users
it is not likely that the Company can profitably market and sell OSA-IIs.
Liquidity Considerations. With the recent TSA sale, the Company
believes it has sufficient liquidity until the end of calendar 2000. However,
the Company is currently considering utilizing its existing cash resources in
order to make acquisitions of complimentary technology or enter into business
relationships with third parties that can provide products or services useful to
OSA, Inc.'s existing customer base. To the extent that the Company uses cash for
any proposed acquisitions rather than its securities, this could effect the
Company's future liquidity. In any event, until the Company achieves
profitability or acquires a profitable business it will be dependent upon
obtaining additional financing in order to remain operational. There can be no
assurances that the Company can complete any financing and meet its working
capital needs in the future.
Failure to Make Acquisitions. The Company has recently announced that
it is actively seeking to make one or more acquisitions of profitable businesses
this year. At the present time, the Company has not entered into any letters of
intent to do so, although it is engaged in discussions to acquire a much larger
corporation. Whether the Company will be able to consummate this acquisition or
others in which the Company is currently engaged in preliminary discussions, is
subject to a number of important risks. The Company may not be able to reach an
agreement on business terms with any potential acquisition candidates.
Additionally, there may be due diligence or contractual issues, which arise
which preclude the Company from closing any acquisitions. Because the Company
intends to primarily finance any acquisition of any other businesses rather than
use its common stock in order to minimize dilution, its ability to obtain the
necessary financing will turn in part upon the financial condition of any
targets, the nature of any target's assets, the profitability of any proposed
acquisition targets and the condition of the financing markets at the time. To
the extent that interest rates rise appreciably, this may impair the potential
profitability of a proposed acquisition because of the debt service involved.
There can be no assurances that the Company will successfully complete any
acquisitions.
Difficulties of Absorbing Acquisitions. If the Company is successful in
acquiring any other businesses, it could have difficulty in integrating the
acquired corporation's personnel and operations with its own. In addition, the
key personnel of the acquired business may not be willing to work for the
Company. Regardless of whether the Company is successful in making one or more
acquisitions, the negotiations may disrupt its on-going business, distract its
management and employees, increase its expenses and adversely effects its future
results of operations.
Potential Impact of Conversion of Preferred Stock. The Company has
outstanding $3,500,000 of Series B Convertible Preferred Stock ("Series B
Preferred"). The Series B Preferred converts at a floating rate but not until
January 1, 2001. The beneficial owner of the Series B Preferred is a director of
the Company. The following impact may result from the conversion of Series B
Preferred:
o The lower the price of the Common Stock, the more shares will be
issued upon conversion of the Series B Preferred.
o Conversion and sale of some shares increases the supply available
for sale, which could further depress the market price. This could
have an escalating effect and result in a further depression of
the price of the Common Stock.
o The significant downward pressure on the price of the Common Stock
could encourage short sales by the selling stockholders or others,
which would further depress the market price for the Common Stock.
o The conversion of the Series B Preferred may result in substantial
dilution to existing stockholders since the holders may ultimately
convert their shares into a very large number of shares of Common
Stock if such Common Stock trades at lower prices at the times of
conversion.
Potential Future Dilution. The following tables set forth certain
information if all outstanding Series B Preferred was converted and Warrants
exercised as of March 9, 2000. The times of convertibility and exercisability
vary. See "Recent Developments " and "Description of Warrants" for information
as to the first dates of convertibility and exercisability.
<TABLE>
<S> <C> <C> <C>
- ----------------------------- --------------------------- --------------------------- --------------------------
Amount Outstanding ($ or No. of Shares of Common
No. of Shares) Assumed Bid Price of Stock Issuable
Class of Security Common Stock
- ----------------------------- --------------------------- --------------------------- --------------------------
- ----------------------------- --------------------------- -------------------------- ----------------------------
Series B Preferred $3,500,000 $1.50 2,734,375
$1.00 4,117,647
$.875 4,729,729
$.60 6,862,745
$.40 10,294,117
- ----------------------------- --------------------------- -------------------------- ----------------------------
Class A Warrants 250,000 250,000
Class B Warrants 25,000 N/A 25,000
Class C Warrants 248,383 248,383
Class D Warrants 350,000 350,000
Class E Warrants 50,000 50,000
Class F Warrants 50,000 50,000
Class G Warrants 100,000 100,000
Class H Warrants 250,000 250,000
- ----------------------------- --------------------------- -------------------------- ----------------------------
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C>
- ---------------------------------------------------------------- ----------------------- -----------------------
No. of Shares of Common Stock Issuable Upon
Conversion of
Series B Percentage of
Preferred and Each Assumed Price of Outstanding Shares
Class of Warrants Common Stock
- ---------------------------------------------------------------- ----------------------- -----------------------
- ---------------------------------------------------------------- ----------------------- ------------------------
4,057,758 $1.50 12%
5,441,030 $1.00 15%
6,053,112 $.875 17%
8,186,128 $.60 22%
11,617,500 $.40 28%
- ---------------------------------------------------------------- ----------------------- ------------------------
</TABLE>
Possible Loss of Stock Exchange Listing.
The Company's Common Stock is traded on the American Stock Exchange
(the "Amex"). Section 713 of the Amex Company Guide requires stockholder
approval of any transaction involving the sale or issuance of Common Stock (or
securities convertible into Common Stock) equals 20% or more of outstanding
Common Stock and the price is less than the greater of (i) book value, or (ii)
market value. The Company did not obtain approval of its stockholders to issue
the Series B Preferred. The Company's goal is to redeem the Series B Preferred
prior to the end of calendar 2000 since the Series B Preferred cannot be
converted until January 1, 2001. If the Company cannot meet this objective, the
Company shall use its best efforts to obtain stockholder approval of the
issuance of the Common Stock prior to the conversion. As reflected in the first
chart in the above risk factor, conversion of the Series B Preferred at a price
of approximately $.69, would most likely involve a transaction relating to the
issuance of 20% or more of the Common Stock of the Company. In addition to
Section 713, the Amex has the authority under Section 1003 of the Amex Company
Guide to delist a security. Since they have broad authority, while certain
guidelines are provided, the Amex may delist a security even if none of the
guidelines are violated. Section 1003(f)(v) permits delisting if the Common
Stock has been "selling for a substantial period of time at a low price per
share..." if the Company fails to effect a reverse split. There can be no
assurances that the Amex will not delist the Company's Common Stock. If it does
so, the market will be far less liquid. In turn, this can further depress the
price of the Company's Common Stock.
Changing Technology; Competitive Factors. The OSAs represent a
technological breakthrough affecting the oil analysis industry. Oil analysis is
a 50-year old technology, which is widely used for diagnostic and preventative
maintenance programs for equipment by various industries. Essentially, the OSAs
analyze oil at the end user's location thereby avoiding the need to send
petroleum samples to a central laboratory. The OSAs utilize complex computer
software. In general, the computer industry is subject to rapid and
significantly changing technology including potential introduction of new
products and technologies, which may have a material adverse impact upon the
Company's ability to market and sell OSA-IIs. Although the Company believes that
it has a significant advantage over potential competitors as a result of its
experience over a five-year period with the OSA technology, no assurances can be
given that either a comparable or more advanced on-site oil analyzer will not be
developed in the future by one or more third parties.
Patents and Proprietary Information. Historically, the Company
generated almost all of its revenue from products subject to patents and patent
applications exclusively licensed to the Company. The Company has obtained
patents covering various features of the OSA-Is, which are applicable to the
OSA-IIs. The Company has applied for additional patents covering various
features of the OSA-IIs. In addition, steps have been taken to protect trade
secrets through appropriate confidentiality agreements. There can be no
assurances that the patent applications for the OSA-II will be granted. The
failure by the Company to obtain patents and protect its respective trade
secrets could have a material adverse effect on the Company by increasing the
likelihood of competition. In addition, other companies may independently
develop equivalent or superior technologies and may obtain patent or similar
rights with respect to them. Although the Company believes that the software for
the OSA-Is and OSA-IIs has been independently developed by it, and that such
technology does not infringe on the patents or violate the proprietary rights of
others, there can be no assurances that the Company will not be determined to
infringe upon the patents or proprietary rights of others, or that patents or
proprietary rights of others will not have a material adverse effect on the
ability of the Company to commercialize the OSA-IIs. Patent and technology
disputes are common with high technology products and services.
New Technologies and Other Considerations. In order to expand its
current product line, the Company is introducing and developing new products,
which are based on new technologies. This aspect of the Company's business
involves a number of special risks. Because of these risks, the Company will,
when appropriate, seek capital input and strategic partners to sell equity in
suitable products and technologies to these partners in order to reduce the
risks to investors. Also, the Company will seek to avoid substantial and
long-term expense associated with the necessary research and development. There
is the risk that the new products and technologies will not perform as expected
or be cost effective. Assuming successful research and development, there
remains the risks of being able to market the products and locate industry
partners or others able to manufacture the products according to stringent
quality control standards and in a viable economic manner. There can be no
assurances that the Company will be able to successfully complete development of
and successfully market these new products. Finally, there is the risk that
while the Company is seeking to commercialize a new technology, a competitor
will develop technologies, which are more commercially viable thereby reducing
the viability of the Company's products.
Anti-Takeover Considerations. The Company's Restated Certificate of
Incorporation (the "Certificate Provisions") contains various provisions
designed to deter a third party from launching a hostile takeover for the
Company. In addition, the Company has adopted a Shareholder Rights Plan (the
"Rights Plan"). In this Prospectus, the Certificate Provisions and the Rights
Plan are collectively referred to as the "Anti-Takeover Provisions". The
Certificate Provisions consist of: (i) empowering the Board of Directors (the
"Board"), without further action by the stockholders, to issue up to 5,000,000
shares of Preferred Stock in one or more series, with such designations,
preferences, special rights, qualifications, limitations and restrictions as the
Board may determine; (ii) establishing a classified Board whereby election of
the directors is staggered and each year approximately one-third of the
directors are elected for a three year term; (iii) making it difficult to remove
directors for "cause" by requiring a super-majority vote of either: (1) 75% of
the stockholders, or (2) 66-2/3% of the stockholders and the majority of the
"disinterested directors"; (iv) providing that stockholder action taken by
written consent in lieu of a meeting is prohibited unless such consent is signed
by the holders of at least two-thirds of the stock; and (v) restricting
stockholder nomination of directors to any stockholder with the power to vote at
least 15% of the outstanding voting securities of the Company who timely
complies with specific notice procedures. In connection with the Rights Plan,
the Board declared a dividend of one Preferred Stock Purchase Right (the
"Rights") for each outstanding share of the Company's Common Stock. The Rights
permit the holders (stockholders of the Company) to purchase Series A Junior
Preferred Stock. Holders of Rights have the right to acquire stock of the
Company or an "acquiring entity" at one-half of market value. The Rights only
become exercisable in the event, with certain exceptions, an acquiring party
accumulates 15 percent or more of the Company's voting stock. These Rights may
be redeemed by the Company at $.01 per Right prior to the close of business on
the 15th day after a public announcement that beneficial ownership of ownership
of 15% or more of the Company's voting stock has been accumulated by single
acquirer or group (with certain exceptions), under specified circumstances.
The Anti-Takeover Provisions generally make it more difficult or
discourage a proxy contest or the assumption of control by a holder of a
substantial block of the Company's Common Stock because it is more difficult to
remove the incumbent Board. Thus, the Anti-Takeover Proposals have the affect
of: (i) entrenching incumbent management, and (ii) discouraging a third party
from making a tender offer at a premium over the market price or otherwise
attempting to obtain control of the Company even though such an attempt could be
desired by a substantial member of the Company's stockholders. The Anti-Takeover
Provisions were not intended to prevent a takeover of the Company on terms,
which are beneficial to the stockholders and will not do so. They may, however,
deter an attempt to acquire the Company in a manner or on terms that the Board
determines not to be in the best interest of its stockholders.
Dependence on Key Personnel. The Company is currently dependent
upon the efforts of the key members of its management team consisting of Mr.
William C. Willis, Jr., the Company's President and Chief Executive Officer, and
Mr. David Natan, the Company's Vice President and Chief Financial Officer. In
addition, the Company is dependent upon Dr. John Coates, its Director of
Technology, who is in charge of the group, which developed the OSA-II. In the
event that one or more of these persons ceases to be employed by the Company, it
may have a material adverse effect upon the Company.
Competition. Competition in the oil analysis business is intense. With
regard to the OSA-II, while the Company is not aware of any other business that
markets and sells an on-site oil analysis instrument, the Company's oil analysis
subsidiary, OSA, INC., competes with various oil analysis laboratories located
throughout the United States. These laboratories offer service through Federal
Express or other express delivery couriers and provides facsimile or other rapid
delivery of oil analysis reports to the customers.
RECENT DEVELOPMENTS
The Company recently announced that it is actively seeking to make one
or more acquisitions during the calendar year 2000. The Company's aim is to
acquire profitable businesses, which either have complimentary technology or
otherwise have technological competitive advantages. As of the date of this
Prospectus, the Company has not reached any agreements including letters of
intent to acquire any other business. It is currently engaged in discussion to
acquire a much larger corporation and has had preliminary discussions with a
number of other acquisition targets. No informal or formal agreement has been
reached with any other company. There can be no assurances that the Company will
acquire any businesses in the future. See "Risk Factors."
SELLING STOCKHOLDERS
Table of Selling Stockholders
The following table sets forth information furnished by the Selling
Stockholders, with respect to the number of shares of the Company's Common
Stock, including the shares of Common Stock underlying the Warrants owned by
each Selling Stockholder on the date of this Prospectus, the shares offered
hereby, and the number and percentage of outstanding shares to be owned by each
Selling Stockholder after the offering. No Selling Stockholder has held any
position, office, or had a material relationship with the Company within the
past three years. The beneficial owners of Excalibur Limited Partnership,
Gundyco in Trust for RRSP 550-98866-19, H & H Securities Limited and
Intercontinental Holding Company, Ltd. and San Rafael Consulting Group are
William S. Hechter, Esq., Mark Schoom, William S. Hechter, Esq., and Gerry
Alexander, respectively. The Company believes Charles Ganz of Mellon Bank
exercises discretion to sell the Common Stock offered by the former noteholders.
For further information on the Warrants, See "Description of Warrants".
<PAGE>
<TABLE>
<S> <C> <C> <C> <C>
- --------------------- ------------------ ------------------- ------------------ ------------------- ------------------
Selling Stockholders Ownership Prior Securities Being Ownership After Percentage Owned Percentage Owned
to Offering Offered Offering Before Offering After Offering
- --------------------- ------------------ ------------------- ------------------ ------------------- ------------------
- --------------------- ------------------ ------------------- ------------------ ------------------- ------------------
Excalibur Limited
Partnership 527,050(1) 527,050(1) -0- 1.74% 0%
- --------------------- ------------------ ------------------- ------------------ ------------------- ------------------
- --------------------- ------------------ ------------------- ------------------ ------------------- ------------------
Gundyco in Trust 63,750(2) 63,750(2) -0- * 0%
for RRSP
550-98866-19
- --------------------- ------------------ ------------------- ------------------ ------------------- ------------------
- --------------------- ------------------ ------------------- ------------------ ------------------- ------------------
H & H Securities 20,500(3) 20,500(3) -0- * 0%
Limited
- --------------------- ------------------ ------------------- ------------------ ------------------- ------------------
- --------------------- ------------------ ------------------- ------------------ ------------------- ------------------
Intercontinental 21,000(4) 21,000(4) -0- * 0%
Holding
Company, Ltd.
- --------------------- ------------------ ------------------- ------------------ ------------------- ------------------
- --------------------- ------------------ ------------------- ------------------ ------------------- ------------------
San Rafael 21,000(5) 21,000(5) -0- * 0%
Consulting Group
- --------------------- ------------------ ------------------- ------------------ ------------------- ------------------
- --------------------- ------------------ ------------------- ------------------ ------------------- ------------------
Certain Former
Noteholders 248,383(6) 248,383(6) -0- * 0%
- --------------------- ------------------ ------------------- ------------------ ------------------- ------------------
</TABLE>
* Less than 1%.
(1) Represents 378,300 shares remaining from conversion of Series A Preferred
and as dividends, and 131,250 and 17,500 shares underlying Class A and
Class B Warrants. Previously sold a total of 242,988 shares of Common
Stock under Rule 144 of the Securities Act.
(2) Represents 56,250 and 7,500 shares underlying Class A and Class B
Warrants. A total of 116,266 shares of Common Stock previously included
in a Preliminary Prospectus have been sold under Rule 144 of the
Securities Act.
(3) Represents shares of Common Stock underlying Class A Warrants.
(4) Represents shares of Common Stock underlying Class A Warrants.
(5) Represents shares of Common Stock underlying Class A Warrants.
(6) Represents 248,383 shares of Common Stock underlying Class C Warrants
held by former holders of $745,000 in principal of notes. The Company
redeemed their notes in December 1998 for $496,617 and issued one Class
C Warrant for each dollar of principal cancelled. The identity of the
former noteholders has been withheld in accordance with the policy of
the Commission's staff.
DESCRIPTION OF WARRANTS
This Prospectus covers the public sale of the shares of Common Stock
underlying presently exercisable Class A, Class B and Class C Warrants. In March
2000, the Company voluntarily amended the Class A Warrants to make them all
exercisable. The Company received no consideration for doing so. The Company is
not obligated to and does not intend to file a registration statement covering
the public sale of shares of Common Stock underlying the Class D E, F, G and H
Warrants issued to the Mennen Trusts until January 1, 2001. The terms of the
various classes of Warrants are described below:
<TABLE>
<S> <C> <C> <C>
Class of Warrants Number of Warrants Exercise Price Expiration Date
A 250,000 $1.10 5/7/2001
B 25,000 $ .89 11/16/2003
C 248,383 $1.78 12/29/2003
D 350,000 $1.94 11/17/2008
E 50,000 $1.75 05/01/2009
F 50,000 $2.00 01/13/2008
G(1) 100,000 $.875 8/13/2009
H 250,000 $2.38 10/27/2009
(1) 50,000 are not exercisable until August 13, 2000.
</TABLE>
<PAGE>
15
PLAN OF DISTRIBUTION
All of the shares of Common Stock are offered for sale by the Selling
Stockholders as listed in this Prospectus under "Selling Stockholders". The
Company will receive none of the proceeds from the sale of the shares of Common
Stock by the Selling Stockholders. However, the Company will receive a maximum
of approximately $739,372 in connection with the exercise of up to 250,000 Class
A 25,000 Class B and 248,383 Class C Warrants, the underlying shares of Common
Stock of which are covered by this Prospectus. Such proceeds will be used for
general corporate purposes.
The Company has been advised by the Selling Stockholders that the shares
of Common Stock may be offered and sold from time to time by or on behalf of the
Selling Stockholders, in or through transactions or distributions (including
crosses and block transactions) on the American Stock Exchange, or in the
over-the-counter market at market prices prevailing at the time of sale, or at
negotiated prices, and in connection therewith commissions may be paid to
brokers. Brokers participating in such transactions may act as agents for the
Selling Stockholders. The Selling Stockholders, and any brokers participating in
this offering may be deemed to be "underwriters" within the meaning of the
Securities Act, and any commissions received by them may be deemed to be
underwriting compensation.
LEGAL MATTERS
The legality of the securities to be offered hereby will be passed upon
for the Company by Michael Harris, P.A., 1645 Palm Beach Lakes Boulevard, West
Palm Beach, Florida 33401. Attorneys employed by that law firm are the
beneficial owners of 36,000 shares of Common Stock.
EXPERTS
The financial statements and schedules of Global Technovations, Inc.
incorporated by reference in this Prospectus and elsewhere in the registration
statement have been audited by Arthur Andersen LLP, independent certified public
accountants, as indicated in their report with respect thereto, and are
incorporated by reference herein in reliance upon the authority of said firm as
experts in accounting in giving said report.
<PAGE>
No dealer, salesperson or other person has been authorized to give any
information or to make any representations other than those contained in this
Prospectus, and, if given or made, such information or representations must not
be relied upon as having been authorized by the Company or any of the Selling
Stockholders. This Prospectus does not constitute an offer to sell or a
solicitation of an offer to buy any security other than the securities offered
by this Prospectus, or an offer to sell or a solicitation of an offer to buy any
securities by any person in any jurisdiction in which such offer or solicitation
would be unlawful. Neither the delivery of this Prospectus nor any sale made
hereunder shall, under any circumstances, imply that the information in this
Prospectus is correct as of any time subsequent to the date of this Prospectus.
TABLE OF CONTENTS
Page
Available Information....................... __
Documents Incorporated by
Reference.................................. __
Risk Factors................................ __
Recent Developments......................... __
Selling Stockholders........................ __
Description of Warrants.................... __
Plan of Distribution........................ __
Legal Matters............................... __
Experts..................................... __
================================
================================
GLOBAL TECHNOVATIONS, INC.
901,683 Shares
of
Common Stock
----------------
Prospectus
----------------
, 2000
================================
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The following table sets forth the various expenses in connection with
the issuance and distribution of the securities being registered. All of the
amounts shown are estimates except the Commission registration fee. Such
expenses will be paid by the Company. None of these expenses will be paid by the
Selling Stockholders.
Registration fee ........................................ $ 1,245.52
Printing expenses........................................ $ 100.00
Accounting fees and expenses............................. $20,000.00
Legal fees and expenses (other than Blue Sky)............ $28,000.00
Blue Sky fees and expenses............................... $ .00
Miscellaneous............................................ $ 654.48
Total......................................... $50,000.00
Item 15. Indemnification of Directors and Officers.
The Company's amended and restated certificate of incorporation
provides that the Company shall indemnify its current and former officers and
directors against expenses reasonably incurred by or imposed upon them in
connection with or arising out of any action, suit or proceeding in which they
may be involved or to which they may be made parties by reason of their being or
having been a director or officer of the Company, or at its request, of any
other corporation which it is a stockholder or creditor and from which such
officers and directors are not entitled to be indemnified by (whether or not
they continue to be directors or officers at the time of imposing or incurring
such expense), except in respect of matters as to which they shall be finally
adjudged in such action, suit or proceeding liable for negligence or misconduct.
In the event of settlement of any such action, suit or proceeding,
indemnification shall be provided only in connection with such matters covered
by the settlement as to which the Company is advised by counsel that the persons
to be indemnified did not commit a breach of duty. The foregoing right of
indemnification shall not be exclusive of other rights to which such persons may
be entitled.
In addition, the Company has entered into indemnification agreements
with its executive officers and directors. These agreements provide that the
Company shall indemnify its executive officers and directors, if by reason of
their corporate status, they are or are threatened to be made parties to any
third-party proceedings, to the fullest extent provided by Delaware law. The
agreements provide for indemnification against expenses, judgments, penalties,
fines and amounts paid in settlement, actually and reasonably incurred by them
or on their behalf in connection with such proceeding or any claim, issue or
matter therein if (i) they acted in good faith; (ii) they reasonably believed in
the case of conduct in their official capacity with the Company that their
conduct was in the Company's best interests or in all other cases, that their
conduct was at least not opposed to the Company's best interests; (iii) with
respect to any criminal proceeding, they had no reasonable cause to believe
their conduct was unlawful; and (iv) with respect to an employee benefit plan
they reasonably believed their conduct to be in the best interests of the
participants and/or beneficiaries of the plan. The indemnification agreements
also provide indemnification in direct and derivative actions provided such
officers or directors acted in good faith and in a manner they reasonably
believed to be not opposed to the best interests of the Company. Such officers
or directors are not entitled to indemnification in connection with any
proceeding charging improper personal benefits to such officers or directors,
whether or not involving action in their official capacity, in which they were
judged liable on the basis that personal benefit was improperly received by
them.
INSOFAR AS INDEMNIFICATION FOR LIABILITIES ARISING UNDER THE SECURITIES
ACT OF 1933 MAY BE PERMITTED TO DIRECTORS, OFFICERS OR PERSONS
CONTROLLING THE COMPANY PURSUANT TO THE FOREGOING PROVISIONS, THE
COMPANY HAS BEEN INFORMED THAT IN THE OPINION OF THE SECURITIES AND
EXCHANGE COMMISSION, SUCH INDEMNIFICATION IS AGAINST PUBLIC POLICY AS
EXPRESSED IN THE SECURITIES ACT AND IS THEREFORE UNENFORCEABLE.
<PAGE>
<TABLE>
<S> <C>
Item 16. Exhibits.
4. Form of Common Stock Certificate (1)
4.3 Form of Amended Class A Warrants
4.5 Form of Private Securities Subscription Agreement (2)
4.6 Form of Class B Warrants (3)
4.7 Form of Class C Warrants (4)
4.8 Form of Stock Purchase Agreement (Series B Preferred) (5)
4.9 Third Certificate of Designation (5)
4.10 Form of Class E Warrants
4.11 Form of Class F Warrants (5)
4.12 Amended Form of Class G Warrants
4.13 Form of Class H Warrants
5. Opinion of Michael Harris, P.A. (4)
23.1 Consent of Arthur Andersen LLP
23.2 Consent of Michael Harris, P.A. (7)
99 Speedco, Inc. Long-Term Lease (8)
99.1 Flying J. Inc. Agreement (8)
99.2 Amendment to Note Purchase Agreement (4)
99.3 SPX Agreement (8)
99.4 Staveley, Inc. plc Agreement (8)
99.5 Onkyo America Asset Purchase Agreement (9)
99.6 Mennen Trust Convertible Note (8)
99.7 Agreement with Mennen Trusts (5)
99.8 First Amendment to Lease of On-Site Analysis, Inc. (11)
99.9 Shareholder Rights Plan (12)
99.10 First Amendment to Shareholder Rights Plan (13)
99.11 Second Amendment to Shareholder Rights Plan (14)
99.12 Employment Agreement of David Natan (15)
99.13 Lease of office space, Palm Beach Gardens, FL (16)
99.14 Employment Agreement of William C. Willis, Jr. (17)
99.15 Asset Purchase Agreement - NCT Audio Products, Inc. (18)
99.16 Amendment to Asset Purchase Agreement - NCT Audio Products, Inc. (19)
99.17 Second Amendment to Asset Purchase Agreement - NCT Audio Products, Inc. (3)
99.18 BioTek Environmental, Inc. Agreement (5)
(1) Contained in Registration Statement on Form 8-A filed March 12, 1992.
(2) Contained in Form 10-Q for the period ended March 31, 1998 filed on May 20, 1998 (Item 6,
Exhibit 10.1).
(3) Contained in Registration Statement on Form S-3/A No. 5 filed on May 21, 1999 (Item 16, Exhibit
4.6)
(4) Contained in Registration Statement on Form S-3/A No. 4 filed on January 29, 1999.
(5) Contained in Form 10-K/A No. 1 for the year ended September 30, 1998
(6) Contained in the Form 10-K for the year ended September 30, 1998 (Item 14, Exhibit 10.20).
(7) Contained in Opinion of Michael Harris, P.A.
(8) Contained in Registration Statement on Form S-3/A No. 6 filed on September 3, 1999.
(9) Contained in Form 8-K filed on October 15, 1999.
(10) Confidential Treatment Requested.
(11) Contained in the documents filed with the Securities and Exchange Commission in
conjunction with the 9/30/94 Form 10-K
(12) Contained in Form 8-K dated January 5, 1995.
(13) Contained in the Form 8-K/A dated July 17, 1995.
(14) Contained in the Form 8-K/A No. 2 dated December 5, 1995
(15) Contained in Amendment No. 3 to the Registration Statement on Form S-3 filed September 27, 1995
(16) Contained in documents filed with the Securities and Exchange Commission
in conjunction with the September 30, 1995 Form 10-K.
(17) Contained in documents filed with the Securities and Exchange Commission in
conjunction with the September 30, 1997 Form 10-K/A No. 3
(18) Contained in documents filed with the Securities and Exchange Commission in
conjunction with the June 30, 1998 Form 10-Q.
(19) Contained as an exhibit to the November 6, 1998 Proxy Statement.
</TABLE>
<PAGE>
Item 17. Undertakings.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration
statement:
(i) To include any Prospectus required by section
10(a)(3) of the Securities Act of 1933
(the "Securities Act");
(ii) To reflect in the Prospectus any facts or events
arising after the effective date of the registration
statement (or the most recent post-effective
amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the
information set forth in the registration statement;
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in
the registration statement or any material change to
such information in the registration statement;
Provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if
the information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the Registrant pursuant to Section 13 or Section 15(d) of the
Exchange Act that are incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be
deemed to be a new registration statement relating to the
securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial
bonafide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered, which remain
unsold at the termination of the offering.
(4) That, for purposes of determining any liability under the
Securities Act, each filing of the Registrant's annual report
pursuant to section 13(a) or section 15(d) of the Exchange Act
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.
(5) The undersigned Registrant hereby undertakes to deliver or
cause to be delivered with the Prospectus, to each person to
whom the Prospectus is sent or given, the latest annual report
to security holders that is incorporated by reference in the
Prospectus and furnished pursuant to and meeting the
requirements of Rule 14a-3 or Rule 14c-3 under the Exchange
Act; and, where interim financial information required to be
presented by Article 3 of Regulation S-X are not set forth in
the Prospectus, to deliver, or cause to be delivered to each
person to whom the Prospectus is sent or given, the latest
quarterly report that is specifically incorporated by
reference in the Prospectus to provide such interim financial
information.
(6) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and
controlling persons of the Registrant pursuant to the
foregoing provisions (see Item 15 above), 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 Securities 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 Securities Act and will be governed by the final
adjudication of such issue.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act or 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirement for filing on Form S-3 and has duly caused this Amendment No. 7 to
Registration Statement on Form S-3 to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Palm Beach Gardens, State
of Florida, on this 8th day of March, 2000.
GLOBAL TECHNOVATIONS, INC.
By: /s/William C. Willis, Jr.
William C. Willis, Jr.
Chairman, President and CEO
(Chief Executive Officer)
Pursuant to the requirements of the Securities Act of 1933, this
Amendment No. 7 to Registration Statement on Form S-3 has been signed by the
following persons in the capacities and on the dates indicated.
<TABLE>
<S> <C> <C>
Name Title Date
/s/ William C. Willis, Jr. Director March 9, 2000
William C. Willis, Jr.
/s/ David Natan Vice President and CFO March 9, 2000
David Natan (Principal Financial and
Accounting Officer) and Director
/s/ Ronald Burd Director March 9, 2000
Ronald Burd
/s/ G. Jeff Mennen Director March 9, 2000
G. Jeff Mennen
/s/ L. Kerry Vickar Director March 9, 2000
L. Kerry Vickar
</TABLE>
<PAGE>
<TABLE>
<S> <C>
Exhibit No. EXHIBIT INDEX
4 Form of Common Stock Certificate (1)
4.3 Form of Amended Class A Warrants
4.5 Form of Private Securities Subscription Agreement (2)
4.6 Form of Class B Warrants (3)
4.7 Form of Class C Warrants (4)
4.8 Form of Stock Purchase Agreement (Series B Preferred) (5)
4.9 Third Certificate of Designation (5)
4.10 Form of Class E Warrants
4.11 Form of Class F Warrants (5)
4.12 Amended Form of Class G Warrants
4.13 Form of Class H Warrants
5. Opinion of Michael Harris, P.A. (4)
23.1 Consent of Arthur Andersen LLP
23.2 Consent of Michael Harris, P.A. (7)
99 Speedco, Inc. Long-Term Lease (8)
99.1 Flying J. Inc. Agreement (8)
99.2 Amendment to Note Purchase Agreement (4)
99.3 SPX Agreement (8)
99.4 Staveley, Inc. plc Agreement (8)
99.5 Onkyo America Asset Purchase Agreement (9)
99.6 Mennen Trust Convertible Note (8)
99.7 Agreement with Mennen Trusts (5)
99.8 First Amendment to Lease of On-Site Analysis, Inc. (11)
99.9 Shareholder Rights Plan (12)
99.10 First Amendment to Shareholder Rights Plan (13)
99.11 Second Amendment to Shareholder Rights Plan (14)
99.12 Employment Agreement of David Natan (15)
99.13 Lease of office space, Palm Beach Gardens, FL (16)
99.14 Employment Agreement of William C. Willis, Jr. (17)
99.15 Asset Purchase Agreement - NCT Audio Products, Inc. (18)
99.16 Amendment to Asset Purchase Agreement - NCT Audio Products, Inc. (19)
99.17 Second Amendment to Asset Purchase Agreement - NCT Audio Products, Inc. (3)
99.18 BioTek Environmental, Inc. Agreement (5)
(1) Contained in Registration Statement on Form 8-A filed March 12, 1992.
(2) Contained in Form 10-Q for the period ended March 31, 1998 filed on May 20, 1998 (Item 6,
Exhibit 10.1).
(3) Contained in Registration Statement on Form S-3/A No. 5 filed on May 21, 1999 (Item 16, Exhibit
4.6)
(4) Contained in Registration Statement on Form S-3/A No. 4 filed on January 29, 1999.
(5) Contained in Form 10-K/A No. 1 for the year ended September 30, 1998
(6) Contained in the Form 10-K for the year ended September 30, 1998 (Item 14, Exhibit 10.20).
(7) Contained in Opinion of Michael Harris, P.A.
(8) Contained in Registration Statement on Form S-3/A No. 6 filed on September 3, 1999.
(9) Contained in Form 8-K filed on October 15, 1999.
(10) Confidential Treatment Requested.
(11) Contained in the documents filed with the Securities and Exchange Commission in
conjunction with the 9/30/94 Form 10-K
(12) Contained in Form 8-K dated January 5, 1995.
(13) Contained in the Form 8-K/A dated July 17, 1995.
(14) Contained in the Form 8-K/A No. 2 dated December 5, 1995
(15) Contained in Amendment No. 3 to the Registration Statement on Form S-3 filed
September 27, 1995
(16) Contained in documents filed with the Securities and Exchange
Commission in conjunction with the September 30, 1995 Form
10-K.
(17) Contained in documents filed with the Securities and Exchange Commission in
conjunction with the September 30, 1997 Form 10-K/A No. 3
(18) Contained in documents filed with the Securities and Exchange Commission in
conjunction with the June 30, 1998 Form 10-Q.
(19) Contained as an exhibit to the November 6, 1998 Proxy Statement.
</TABLE>
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
As independent certified public accountants, we hereby consent to the use
of our reports (and to all references to our Firm)included in or made a part of
this registration statement.
ARTHUR ANDERSEN LLP
West Palm Beach, Florida
March 9, 2000.
THIS WARRANT AND THE SECURITIES TO BE ISSUED UPON ITS EXERCISE HAVE NOT BEEN
REGISTERED WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION (THE
"COMMISSION") OR THE SECURITIES COMMISSION OF ANY STATE PURSUANT TO AN EXEMPTION
FROM REGISTRATION UNDER REGULATION D PROMULGATED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "1933 ACT"). THIS WARRANT MAY NOT BE EXERCISED BY OR ON
BEHALF OF ANY U.S. PERSON, UNLESS REGISTERED UNDER THE 1933 ACT, OR AN EXEMPTION
FROM SUCH REGISTRATION IS AVAILABLE. THIS WARRANT SHALL NOT CONSTITUTE AN OFFER
TO SELL NOR A SOLICITATION OF AN OFFER TO BUY THE WARRANT IN ANY JURISDICTION IN
WHICH SUCH OFFER OR SOLICITATION WOULD BE UNLAWFUL.
THIS WARRANT AND THE SECURITIES TO BE ISSUED UPON ITS EXERCISE MAY NOT BE SOLD,
PLEDGED, TRANSFERRED OR ASSIGNED BY OR TO ANY U.S. PERSON EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE 1933 ACT AND UNDER APPLICABLE STATE
SECURITIES LAWS, OR IN A TRANSACTION WHICH IS EXEMPT FROM REGISTRATION UNDER THE
PROVISIONS OF THE 1933 ACT AND UNDER PROVISIONS OF APPLICABLE STATE SECURITIES
LAWS; AND IN THE CASE OF AN EXEMPTION, ONLY IF THE COMPANY HAS RECEIVED AN
OPINION FROM COUNSEL THAT SUCH TRANSACTION DOES NOT REQUIRE REGISTRATION OF THE
SECURITIES.
AMENDED CLASS A STOCK PURCHASE WARRANT
No. A.
TO PURCHASE SHARES OF COMMON STOCK OF
TOP SOURCE TECHNOLOGIES, INC.
THIS CERTIFIES that, for value received,_____________________________ , located
at_________________ (the "Investor"), is entitled, upon the terms and subject to
the conditions hereinafter set forth, at any time on or after March 6, 2000 and
on or prior to May 7, 2001 (theTermination Date") but not thereafter, to
subscribe for and purchase from Global Technovations, Inc.., a corporation
incorporated in the State of Delaware (the "Company"),
____________________________ ( ) shares (the "Warrant Shares") of Common Stock,
$.001 value per share of the Company (the "Common Stock"). The purchase price of
one share of Common Stock (the "Exercise Price") under this Warrant shall be
equal to $1.10. The Exercise Price and the number of shares for which the
Warrant is exercisable shall be subject to adjustment as provided herein. This
Warrant is being issued in connection with the Subscription Agreement dated May
7th, 1998 (the "Agreement") and is subject to its terms and conditions.
1. Title of Warrant. Prior to the expiration hereof and subject to compliance
with applicable laws, this Warrant and all rights hereunder are transferable, in
whole or in part, at the office or agency of the Company by the holder hereof in
person or by duly authorized attorney, upon surrender of this Warrant together
with the Assignment Form annexed hereto properly endorsed.
2. Authorization of Shares. The Company covenants that all shares of Common
Stock which may be issued upon the exercise of rights represented by this
Warrant will, upon exercise of the rights represented by this Warrant and full
payment of the Exercise Price, be duly authorized, validly issued, fully paid
and nonassessable and free from all taxes, liens and charges in respect of the
issue thereof (other than taxes in respect of any transfer occurring
contemporaneously with such issue).
3. Exercise of Warrant. Except as provided in Section 11 herein, exercise of the
purchase rights represented by this Warrant may be made at any time commencing
upon the date on which the Company's registration statement on Form S-3 covering
the shares of Common Stock underlying the Warrants is declared effective by the
Securities and Exchange Commission and ending before the close of business on
the Termination Date, or such earlier date on which this Warrant may terminate
as provided in this Warrant, by the surrender of this Warrant and the Notice of
Exercise Form annexed hereto duly executed, at the office of the Company (or
such other office or agency of the Company as it may designate by notice in
writing to the registered holder hereof at the address of such holder appearing
on the books of the Company) and upon payment of the Exercise Price of the
shares thereby purchased; whereupon the holder of this Warrant shall be entitled
to receive a certificate for the number of shares of Common Stock so purchased.
Certificates for shares purchased hereunder shall be delivered to the holder
hereof within four (4) business days after the date on which this Warrant shall
have been exercised as aforesaid, or be subject to the damages set forth in the
Agreement. Payment of the Exercise Price may be by certified check or cashier's
check or by wire transfer to an account designated by the Company in an amount
equal to the Exercise Price multiplied by the number of Warrant Shares.
4. No Fractional Shares or Script. No fractional shares or scrip representing
fractional shares shall be issued upon the exercise of this Warrant. Fractional
Shares shall be rounded down as provided for in Section 5(g) of the Certificate
of Designation.
5. Charges, Taxes and Expenses. Issuance of certificates for shares of Common
Stock upon the exercise of this Warrant shall be made without charge to the
holder hereof for any issue or transfer tax or other incidental expense in
respect of the issuance of such certificate, all of which taxes and expenses
shall be paid by the Company, and such certificates shall be issued in the name
of the holder of this Warrant or in such name or names as may be directed by the
holder of this Warrant; provided, however, that in the event certificates for
shares of Common Stock are to be issued in a name other than the name of the
holder of this Warrant, this Warrant when surrendered for exercise shall be
accompanied by the Assignment Form attached hereto duly executed by the holder
hereof, and provided further, that upon any transfer involved in the issuance or
delivery of any certificates for shares of Common Stock, the Company may
require, as a condition thereto, the payment of a sum sufficient to reimburse it
for any transfer tax incidental thereto.
6. Closing of Books. Unless otherwise required by law or the principal trading
market for the Company's Common Stock, the Company will not close its
shareholder books or records in any manner which prevents the timely exercise of
this Warrant for a period of time in excess of five (5) trading days per year.
7. No Rights as Shareholder until Exercise. This Warrant does not entitle the
holder hereof to any voting rights or other rights as a shareholder of the
Company prior to the exercise thereof. Upon the surrender of this Warrant and
the payment of the aggregate Exercise Price, the Warrant Shares so purchased
shall be, and be deemed to be, issued to such holder as the record owner of such
shares as of the close of business on the later of the date of such surrender or
payment.
8. Assignment and Transfer of Warrant. This Warrant may be assigned by the
surrender of this Warrant and the Assignment Form annexed hereto duly executed
at the office of the Company (or such other office or agency of the Company as
it may designate by notice in writing to the registered holder hereof at the
address of such holder appearing on the books of the Company); provided,
however, that the Company may require, as a condition thereto, the payment of a
sum sufficient to reimburse it for any expenses of transfer incidental thereto
and that this Warrant may not be resold or otherwise transferred except (I) in a
transaction registered under the Securities Act of 1933 (the "Securities Act"),
or (ii) in a transaction pursuant to an exemption, if available, from such
registration and whereby, if requested by the Company, an opinion of counsel
reasonably satisfactory to counsel for the Company is obtained by the holder of
this Warrant to the effect that the transaction is so exempt.
9. Loss, Theft, Destruction or Mutilation of Warrant. The Company represents and
warrants that upon receipt by the Company of evidence reasonably satisfactory to
it of the loss, theft, destruction or mutilation of this Warrant certificate or
any stock certificate relating to the Warrant Shares, and in case of loss, theft
or destruction, of indemnity or security reasonably satisfactory to it, and upon
reimbursement to the Company of all reasonable expenses incidental thereto, and
upon surrender and cancellation of such Warrant or stock certificate, if
mutilated, the Company will make and deliver a new Warrant or stock certificate
of like tenor and dated as of such cancellation, in lieu of such Warrant or
stock certificate.
10. Saturdays, Sundays, Holidays, etc. If the last or appointed day for the
taking of any action or the expiration of any right required or granted herein
shall be a Saturday, Sunday or a legal holiday in the State of New York, then
such action may be taken or such right may be exercised on the next succeeding
day not a legal holiday.
11. Effect of Certain Events.
(a) If at any time the Company proposes (i) to sell or otherwise convey all or
substantially all of its assets or (ii) to effect a transaction (by merger or
otherwise) in which more than 50% of the voting power of the Company is disposed
of (collectively, a "Sale or Merger Transaction"), in which the consideration to
be received by the Company or its shareholders consists solely of cash, then the
Warrant shall terminate if the Warrant has not been exercised by the effective
date of such Sale or Merger transaction, the Company shall give the holder of
this Warrant thirty (30) days notice of such termination and of the proposed
effective date of the Sale or Merger transaction.
(b) In case the Company shall at any time effect a Sale or Merger Transaction in
which the consideration to be received by the Company or its shareholders
consists in whole or in part of consideration other than cash, the holder of
this Warrant shall have the right thereafter to purchase, by exercise of this
Warrant and payment of the aggregate Exercise Price in effect immediately prior
to such action, the kind and amount of shares and other securities and property
which it would have owned or have been entitled to receive after the happening
of such Sale or Merger transaction had this Warrant been exercised immediately
prior thereto.
(c) "Piggy-Back" Registration.
(i) The holder of this Warrant shall have the right to include all of the
Warrant Shares (the "Registrable Securities") as part of any registration of
securities filed by the Company (other than in connection with a transaction
contemplated by Rule 145(a) promulgated under the Securities Act or pursuant to
Forms S-4 or S-8) and must be notified in writing of such filing. The holder
shall have five (5) business days to notify the Company in writing as to whether
the Company is to include holder's Registrable Securities as part of the
registration; provided, however, that if any registration pursuant to this
Section shall be underwritten, in whole or in part, the Company may require that
the Registrable Securities requested for inclusion pursuant to this Section be
included in the underwriting on the same terms and conditions as the securities
other-wise being sold through the underwriters. If in the good faith judgment of
the underwriter of such offering only a limited number of Registrable Securities
should be included in such offering, or no such shares should be included, the
holder of such Registrable Securities, and any other selling stockholders, shall
be reduced, such reduction to be applied by excluding (on a pro rata basis)
Registrable Securities proposed to be sold by the holder of this Warrant and
shares proposed to be sold by all other persons. Those Registrable Securities
which are not included in an underwritten offering pursuant to the foregoing
provisions of this Section (and all other Registrable Securities held by the
selling stockholders) shall be withheld from the market by the Holders thereof
for a period, not to exceed ninety (90) days, which the underwriter may
reasonably determine-nine is necessary in order to effect such underwritten
offering, and the Holder shall sign any agreement to this effect requested by
such underwriter. Notwithstanding the foregoing provisions, the Company may
withdraw any registration statement without incurring any liability to the
holders of Registrable Securities.
(ii) The registration rights set forth in Section 11(c)(i) shall cease upon the
earliest of (A) the effective registration under the Securities Act of all of
the Registrable Securities and the disposal of such securities pursuant to such
registration, (B) registration under the Securities Act is no longer required
for the immediate public distribution of such security as a result of the
provisions of Rule 144 promulgated under the Securities Act, or (C) such
Registrable Securities cease to be outstanding.
12. Adjustments-of Exercise Price and Number of Warrant Shares. The number and
kind of securities purchasable upon the exercise of this Warrant and the
Exercise Price shall be subject to adjustment from time to time upon the
happening of any of the following.
In case the Company shall (i) declare or pay a dividend in shares of Common
Stock or make a distribution in shares of Common Stock to holders of its
outstanding Common Stock, (ii) subdivide its outstanding shares of Common Stock,
(iii) combine its outstanding shares of Common Stock into a smaller number of
shares of Common Stock or (iv) issue any shares of its capital stock in a
reclassification of the Common Stock, then the number of Warrant Shares
purchasable upon exercise of this Warrant immediately prior thereto shall be
adjusted so that the holder of this Warrant shall be entitled to receive the
kind and number of Warrant Shares or other securities of the Company which he
would have owned or have been entitled to receive had such Warrant been
exercised in advance thereof Upon each such adjustment of the kind and number of
Warrant Shares or other securities of the Company which are purchasable
hereunder, the holder of this Warrant shall thereafter be entitled to purchase
the number of Warrant Shares or other securities resulting from such adjustment
at an Exercise Price per such Warrant Share or other security obtained by
multiplying the Exercise Price in effect immediately prior to such adjustment by
the number of Warrant Shares purchasable pursuant hereto immediately prior to
such adjustment and dividing by the number of Warrant Shares or other securities
of the Company resulting from such adjustment. An adjustment made pursuant to
this paragraph shall become effective immediately after the effective date of
such event retroactive to the record date, if any, for such event.
13. Voluntary Adjustment by the Company. The Company may at any time during the
term of this Warrant, reduce the then current Exercise Price to any amount and
for any period of time deemed appropriate by the Board of Directors of the
Company.
14. Notice of Adjustment. Whenever the number of Warrant Shares or number or
kind of securities or other property purchasable upon the exercise of this
Warrant or the Exercise Price is adjusted, as herein provided, the Company shall
promptly mail by registered or certified mail, return receipt requested, to the
holder of this Warrant notice of such adjustment or adjustments setting forth
the number of Warrant Shares (and other securities or property) purchasable upon
the exercise of this Warrant and the Exercise Price of such Warrant Shares (and
other securities or property) after such adjustment, setting forth a brief
statement of the facts requiring such adjustment and setting forth the
computation by which such adjustment was made. Such notice, in absence of
manifest error, shall be conclusive evidence of the correctness of such
adjustment.
15. Authorized Shares. The Company covenants that during the period the Warrant
is outstanding, it will reserve from its authorized and unissued Common Stock a
sufficient number of shares to provide for the issuance of the Warrant Shares
upon the exercise of any purchase rights under this Warrant. The Company further
covenants that its issuance of this Warrant shall constitute full authority to
its officers who are charged with the duty of executing stock certificates to
execute and issue the necessary certificates for the Warrant Shares upon the
exercise of the purchase rights under this Warrant. The Company will take all
such reasonable action as may be necessary to assure that such Warrant Shares
may be issued as 'provided herein without violation of any applicable law or
regulation, or of any requirements of prove the NASDAQ Stock Market or any
domestic securities exchange upon which the Common Stock may be listed.
16. Miscellaneous.
(a) Issue Date, Jurisdiction. The provisions of this Warrant shall be construed
and shall be given effect in all respects as if it had been issued and delivered
by the Company on the date hereof This Warrant shall be binding upon any
successors or assigns of the Company. This Warrant shall constitute a contract
under the laws of the State of Delaware, without regard to its conflict of law,
principles or rules. This Agreement and any dispute, disagreement, or issue of
construction or interpretation arising hereunder whether relating to its
execution, its validity, the obligations provided herein or performance shall be
governed or interpreted according to the internal laws of the State of Delaware
without regard to choice of law considerations. The courts of the State of
Delaware shall have exclusive jurisdiction over any cause or controversy arising
under the terms of this Agreement or between the parties as the result of any
act taken or failure to act not taken by either party pursuant to this
Agreement.
(b) Restrictions. The holder hereof acknowledges that the Warrant Shares
acquired upon the exercise of this Warrant, if not registered, will have
restrictions upon resale imposed by state and federal securities laws.
(c) Modification and Waiver. This Warrant and any provisions hereof may be
changed, waived, discharged or terminated only by an instrument in writing
signed by the party against which enforcement of the same is sought.
(d) Notices. Any notice, request or other document required or permitted to be
given or delivered to the holders hereof by the Company shall be delivered or
shall be sent by certified or registered mail, postage prepaid, to each such
holder at its address as shown on the Books of the Company or to the Company at
the address set forth in the Agreement.
(e) Capitalized Terms. All capitalized terms not otherwise defined herein shall
have the meaning assigned to them in the Agreement.
(d) Entire Agreement. This Warrant, together with all documents referenced
herein, embody the entire agreement and understanding between the parties hereto
with respect to the subject matter hereof and supersedes all prior oral or
written agreements and understandings relating to the subject matter hereof. No
statement, representation, warranty, covenant or agreement of any kind not
expressly set forth in this Agreement shall affect, or be used to interpret,
change or restrict, the express terms and provisions of this Agreement.
IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its
officer thereunto duly authorized.
Dated: March 6, 2000
GLOBAL TECHNOVATIONS, INC.
By: _____________________________________________
William C. Willis, Jr., President
THE SECURITIES REPRESENTED BY THIS CERTIFICATE AND ISSUABLE UPON EXERCISE
HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR UNDER THE PROVISIONS OF ANY
APPLICABLE STATE SECURITIES LAWS, BUT HAVE BEEN ACQUIRED BY THE
REGISTERED HOLDER HEREOF FOR PURPOSES OF INVESTMENT AND IN RELIANCE ON
STATUTORY EXEMPTIONS UNDER THE SECURITIES ACT, AND UNDER ANY APPLICABLE
STATE SECURITIES LAW. THESE SECURITIES AND THE SECURITIES ISSUED UPON
EXERCISE HEREOF MAY NOT BE SOLD, PLEDGED, TRANSFERRED OR ASSIGNED, NOR
MAY THESE WARRANTS BE EXERCISED, EXCEPT IN ACCORDANCE WITH TERMS SET
FORTH IN THIS CERTIFICATE OR IN A TRANSACTION WHICH IS EXEMPT UNDER
PROVISIONS OF THE SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES
LAWS OR PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT; AND IN THE
CASE OF AN EXEMPTION, ONLY IF THE COMPANY HAS RECEIVED AN OPINION OF
COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH TRANSACTION DOES NOT
REQUIRE REGISTRATION OF ANY SUCH SECURITIES
No. E-__
TOP SOURCE TECHNOLOGIES, INC.
COMMON STOCK PURCHASE WARRANT
TO PURCHASE 50,000 SHARES OF COMMON STOCK
Top Source Technologies, Inc., a Delaware corporation (the "Company"),
hereby certifies that, for value received, ___________________________________
(the "Holder") is entitled, subject to the terms set forth below, to purchase
from the Company 50,000 fully paid and non-assessable shares of common stock
(the "Common Stock") of the Company at the price of $1.75 per share (the
"Purchase Price") at any time on or from time to time for a period of 10 years
commencing May 1, 1999 and expiring April 30, 2009 at 6:00 p.m. New York time .
The number and character of such shares of Common Stock and the Purchase Price
are subject to adjustment as provided herein.
As used herein the following capitalized terms, unless the context
otherwise requires, have the following respective meanings:
(a) The term "Company" includes any corporation
which shall succeed to or assume the obligations of the Company
hereunder.
(b) The term "Common Stock" means the common stock, par value
$0.001 per share, of the Company, together with all stock of any class
or classes (however designated) of the Company, the holders of which
shall have the right, without limitation as to amount, either to all or
to a share of the balance of current dividends and liquidating
dividends after the payment of dividends and distributions on any
shares entitled to preference, and the holders of which shall
ordinarily, in the absence of contingencies, be entitled to vote for
the election of a majority of directors of the Company (even though the
right so to vote has been suspended by the happening of such a
contingency).
(c) The term "Purchase Price per share" shall be the then
applicable purchase price for one share of Common Stock as adjusted
pursuant to Sections 5 and 6 hereof.
(d) The term Registration Statement refers to Form S-3 or
other applicable form in compliance with the Securities Act, as
defined, and rules thereunder to permit the public disposition of
Common Stock issued or issuable upon the exercise of Warrants, and any
post-effective amendments and supplements filed or required to be filed
to permit any such disposition.
(e) The term "Securities Act" means the Securities
Act of 1933 as the same shall be in effect at the time.
(f) The term "Warrants" refers to these Warrants.
1. Registration, etc.
1.1 If the Company files a Registration Statement on or after
January 1, 2001 to cover the public sale of the Common Stock issuable to the
Holder or an affiliate in connection with the conversion of Series B Preferred
Stock or other warrants, it shall include in the Registration Statement the
common stock issuable on exercise of the Warrants at the Company's own expense,
provided, however, the Holder shall cooperate with the Company in the
preparation of such Registration Statement to the extent required to furnish
information concerning the Holder's proposed plan of distribution.
1.2 In connection with the filing of a Registration Statement
pursuant to Section 1.1 hereof, the Company shall:
(a) notify the Holder as to the filing thereof
and of all amendments thereto filed prior to the effective date of
said Registration Statement;
(b) notify the Holder promptly after it shall have
received notice thereof, of the time when the Registration Statement
becomes effective or any supplement to any prospectus forming a part of
the Registration Statement has been filed;
(c) prepare and file without expense to the Holder
the initial Registration Statement and any necessary amendment or
supplement to such Registration Statement or prospectus as may be
necessary to comply with Section 10(a)(3) of the Securities Act or
advisable in connection with the proposed distribution of the Common
Stock by the Holder (but only during such period as the Company is
required to keep the Registration Statement effective);
(d) if the Common Stock, is not a "covered security"
as that term is defined by Section 18(b) of the Securities Act, use its
reasonable best efforts to qualify the Common Stock being so registered
for sale under the securities or blue sky laws in such reasonable
number of states (not to exceed five in the aggregate) as such
registered owners may designate in writing and to register or obtain
the approval of any federal or state authority which may be required in
connection with the proposed distribution, except, in each case, in
jurisdictions in which the Company must either qualify to do business
or file a general consent to service of process as a condition to the
qualification of such securities;
(e) notify the registered owners of the Common
Stock any stop order suspending the effectiveness of the Registration
Statement and use its reasonable best efforts to remove such stop order;
(f) undertake to keep said Registration Statement and
prospectus effective until the earlier of (i) such time as the Common
Stock issued or issuable upon exercise of the Warrants are sold or
become available for public sale without registration under the
Securities Act; and
(g) furnish to the Holder as soon as available,
copies of any such Registration Statement and each preliminary or final
prospectus and any supplement or amendment required to be prepared
pursuant to the foregoing provisions of this Section 1, all in such
quantities as the Holder may from time to time reasonably request. Upon
written request, the Company shall also furnish to each owner, without
cost, one set of the exhibits to such Registration Statement.
1.3 The Holder of the Common Stock being registered under this
Section 1 agrees to pay all of the underwriting discounts and commissions and
its own counsel fees with respect to the securities owned by them and being
registered. The Company agrees that the costs and expenses which it is obligated
to pay in connection with a Registration Statement to be filed pursuant to
Section 1.1 hereof include, but are not limited to, registration fees, the fees
and expenses of counsel for the Company, the fees and expenses of its
accountants and all other costs and expenses incident to the preparation,
printing and filing under the Securities Act of any such Registration Statement,
each prospectus and all amendments and supplements thereto, the costs incurred
in connection with the qualification of such securities for sale in a reasonable
number of states, if applicable, including fees and disbursements of counsel for
the Company or any managing underwriter, and the costs of supplying a reasonable
number of copies of the Registration Statement, each preliminary prospectus,
final prospectus and any supplements or amendments thereto to such Holder.
<PAGE>
1.4 The Company agrees to enter into an appropriate
cross-indemnity agreement with any underwriter (as defined in the Securities
Act) for such registered owners in connection with the filing of a Registration
Statement pursuant to Section 1.1 hereof.
1.5 In the event that the Company shall file any Registration
Statement including therein all or any part of the Common Stock issued or
issuable upon exercise of the Warrants, the Company and each Holder of the
Common Stock shall enter into an appropriate cross-indemnity agreement whereby
the Company shall indemnify and hold harmless the Holder against any losses,
claims, damages or liabilities (or actions in respect thereof) arising out of or
based upon any untrue statement or alleged untrue statement of any material fact
contained in such registration statement, or any omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
statements therein not misleading unless such statement or omission was made in
reliance upon and in conformity with written information furnished or required
to be furnished by any such Holder, and each such Holder shall indemnify and
hold harmless the Company, each of its directors, each of its officers who have
signed the Registration Statement and each person, if any, who controls the
Company within the meaning of the Securities Act against any losses, claims,
damages or liabilities (or actions in respect thereof) arising out of or based
upon any untrue statement or alleged untrue statement of any material fact
contained in such Registration Statement, or any omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
statements therein not misleading, if the statement or omission was made in
reliance upon and in conformity with written information furnished or required
to be furnished by such Holder or such controlling person expressly for use in
such Registration Statement.
1.6 Nothing herein shall be construed to require any Holder
who may desire to include any Common Stock in any Registration Statement
referred to in Section 1.1 hereof to exercise their Warrants prior to the
effective date of any Registration Statement.
2. Sale or Exercise Without Registration. If, at the time of any
exercise, permitted transfer or surrender for exchange of the Warrants or of
Common Stock previously issued upon the exercise of the Warrants, such Warrants
or Common Stock shall not be registered under the Securities Act, the Company
may require, as a condition of allowing such exercise, transfer or exchange,
that the holder or transferee of such Warrants or Common Stock, as the case may
be, furnish to the Company an opinion of counsel reasonably satisfactory to the
Company to the effect that such exercise, transfer or exchange may be made
without registration under the Securities Act, provided that the disposition
thereof shall at all times be within the control of such holder or transferee,
as the case may be, and provided further that nothing contained in this Section
2 shall relieve the Company from complying with any request for registration
pursuant to Section 1 hereof. The Holder of the Warrants represents to the
Company that it is acquiring the Warrants for investment and not with a view to
the distribution thereof.
3. Exercise of Warrants; Partial Exercise.
--------------------------------------
3.1 Exercise in Full or in Part. These Warrants may be
exercised in full or in part by the Holder hereof by surrender of these
Warrants, with the form of subscription attached hereto duly executed by such
holder, to the Company at its principal office, as provided in Section 19
hereof, accompanied by payment by certified or official bank check payable to
the order of the Company, in the amount obtained by multiplying the number of
shares of Common Stock called for on the face of these Warrants (without giving
effect to any adjustment therein) by the Purchase Price.
3.2 Company to Reaffirm Obligations. The Company will, at the
time of any exercise of these Warrants, upon the request of the Holder hereof,
acknowledge in writing its continuing obligation to afford to such Holder any
rights to which such Holder shall continue to be entitled after such exercise in
accordance with the provisions of these Warrants, provided that if the Holder of
these Warrants shall fail to make any such request, such failure shall not
affect the continuing obligation of the Company to afford such Holder any such
rights.
4. Delivery of Stock Certificates, etc., on Exercise. As soon
as practicable after the exercise ----------- of these Warrants in full or
in part, and in any event within two days thereafter, the Company at its expense
(including the payment by it of any applicable issue or transfer taxes) will
cause to be issued in the name of and delivered to the Holder hereof a
certificate or certificates for the number of fully paid and non- assessable
Common Stock or Other Securities to which such Holder shall be entitled upon
such exercise, plus, in lieu of any fractional share to which such holder would
otherwise be entitled, cash equal to such fraction multiplied by the then
current fair market value of one full share (determined by the closing price on
the principal market as of the date of receipt of the Warrants with executed
subscription), together with any other stock or other securities and property
(including cash, where applicable) to which such Holder is entitled upon such
exercise pursuant to Section 5 hereof or otherwise.
5. Anti-Dilution Provisions. If and to the extent that the number of
issued shares of Common Stock of the Company shall be increased, reduced or
changed by change in par value, split up, reclassification, or distribution of a
dividend payable in Common Stock, the number of shares subject to the Warrants
and the exercise price per share shall be proportionately adjusted; provided,
however, that the anti-dilution provision described in this Section 5 does not
apply to sales of Common Stock made by the Company at a price below the Purchase
Price.
6. Reorganization, Consolidation, Merger, etc. In case the Company
shall (a) effect a reorganization, (b) consolidate with or merge with or into
any other entity, or (c) transfer all or substantially all of its properties or
assets to any other entity under any plan or arrangement contemplating the
dissolution of the Company, excluding the sale of assets or securities of Top
Source Automotive, Inc., then, in each such case, the holder of these Warrants,
upon the exercise thereof as provided in Section 3 hereof at any time after the
consummation of such reorganization, consolidation or merger or the effective
date of such dissolution, as the case may be, shall be entitled to receive (and
the Company shall be entitled to deliver), in lieu of the Common Stock issuable
upon such exercise prior to such consummation or such effective date, the stock
and other securities and property (including cash) to which such Holder would
have been entitled upon such consummation or in connection with such
dissolution, as the case may be, if such Holder had so exercised these Warrants
immediately prior thereto, all subject to further adjustment thereafter as
provided in Section 5 hereof.
7. Further Assurances. The Company will take all such action as may be
necessary or appropriate -------- in order that the Company may validly and
legally issue fully paid and non-assessable Common Stock upon the exercise of
all Warrants from time to time outstanding.
8. Officer's Certificate as to Adjustments. In each case of any
adjustment or readjustment in the Common Stock issuable upon the exercise of the
Warrants, the Company at its expense will promptly compute such adjustment or
readjustment in accordance with the terms of the Warrants and prepare a
certificate, executed by its chief financial or accounting officer, setting
forth such adjustment or readjustment and showing in detail the facts upon which
such adjustment or readjustment is based, and the number of Common Stock
outstanding or deemed to be outstanding. The Company will forthwith mail a copy
of each such certificate to each Holder of Warrants.
9. Notices of Record Date, etc. In the event of
----------------------------
(a) any capital reorganization of the Company, any
reclassification or recapitalization of the capital stock of the
Company or any transfer of all or substantially all the assets of the
Company to or consolidation or merger of the Company with or into any
other person; or
(b) any voluntary or involuntary dissolution, liquidation or
winding-up of the Company; And to which Section 6 hereof is applicable,
then and in each such event the Company will mail or
cause to be mailed to each holder of Warrants a notice specifying (i)
The date on which any such record is to be taken for the purpose of such
dividend, distribution or right, and stating the amount and character of
such dividend, distribution or right; and (ii) the date on which any
such reorganization, reclassification, recapitalization, transfer,
consolidation, merger, dissolution, liquidation or winding-up is to take
place, and the time, if any, as of which the holders of record of Common
Stock shall be entitled to exchange their shares of Common Stock for
securities or other property deliverable upon such reorganization,
reclassification, recapitalization, transfer, consolidation, merger,
dissolution, liquidation or winding-up. Such notice shall be mailed at
least 15 days prior to the date therein specified.
10. Reservation of Common Stock, etc., Issuable on Exercise of
Warrants. The Company will at all ---------- times reserve and keep available,
solely for issuance and delivery upon the exercise of the Warrants, all Common
Stock from time to time issuable upon the exercise of the Warrants.
11. Listing on Securities Exchanges; Registration. If the Company at
any time shall list any Common Stock on any national securities exchange, the
Company will, at its expense, simultaneously list on such exchange, upon
official notice of issuance upon exercise of the Warrants, and maintain such
listing of, all Common Stock from time to time issuable upon the exercise of the
Warrants.
12. Exchange of Warrants. Subject to the provisions of Section 2
hereof, upon surrender for exchange of any Warrants, properly endorsed to the
Company, the Company at its own expense will issue and deliver to the holder
thereof new Warrants of like tenor, in the name of such holder calling in the
aggregate on the face or faces thereof for the number of shares of Common Stock
called for on the face of the Warrants so surrendered.
13. Replacement of Warrants. Upon receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of any
Warrants and, in the case of any such loss, theft or destruction, upon delivery
of an indemnity agreement reasonably satisfactory in form and amount to the
Company or, in the case of any such mutilation, upon surrender and cancellation
of such Warrants, the Company at its expense will execute and deliver, in lieu
thereof, new Warrants of like tenor.
14. Warrant Agent. The Company may, by written notice to each Holder of
the Warrants, appoint an agent for the purpose of issuing Common Stock upon the
exercise of the Warrants pursuant to Section 3 hereof, exchanging Warrants
pursuant to Section 12 hereof, and replacing Warrants pursuant to Section 12
hereof, and replacing Warrants pursuant to Section 13 hereof, or any of the
foregoing, and thereafter any such issuance, exchange or replacement, as the
case may be, shall be made at such office by such agent.
15. Legend. Unless the shares of Common Stock have been registered
under the Securities Act, upon exercise of any of the Warrants and the issuance
of any of the Common Stock, pursuant thereto all certificates representing
Common Stock shall bear on the face thereof substantially the following legend:
The securities represented by this certificate have not been
registered under the Securities Act of 1933, as amended, and
may not be sold, offered for sale, assigned, transferred or
otherwise disposed of, unless registered pursuant to the
provisions of that Act or unless a written opinion of counsel
to the Company concludes that such disposition is in
compliance with an available exemption from such registration.
16. Remedies. The Company stipulates that the remedies at law of the
Holder of these Warrants in the event of any default or threatened default by
the Company in the performance of or compliance with any of the terms of these
Warrants are not and will not be adequate, and that such terms may be
specifically enforced by a decree for the specific performance of any agreement
contained herein or by an injunction against a violation of any of the terms
hereof or otherwise.
17. Severability. In the event any parts of these Warrants are
found to be void, the remaining ------------ provisions of these Warrants shall
nevertheless be binding with the same effect as though the void parts were
deleted.
18. Benefit. These Warrants shall be binding upon and inure to
the benefit of the parties hereto ------- and their legal representatives,
successors and assigns.
19. Notices and Addresses. All notices, offers, acceptance and
any other acts under these Warrants ----------- (except delivery of these
Warrants and payment of the Purchase Price) shall be in writing, and shall be
sufficiently given if delivered to the addressees in person, by Federal Express
or similar receipted delivery, by facsimile delivery or, if mailed, postage
prepaid, by certified mail, return receipt requested, as follows: The Company:
Mr. William C. Willis, Jr., President and
Chief Executive Officer
Top Source Technologies, Inc.
7108 Fairway Drive, Suite 200
Palm Beach Gardens, FL 33418-3757
Facsimile: (561) 691-5220
The Holder: _____________________________
or to such other address as any of them, by notice to the others may designate
from time to time. The transmission confirmation receipt from the sender's
facsimile machine shall be conclusive evidence of successful facsimile delivery.
Time shall be counted to, or from, as the case may be, the delivery in person or
by mailing.
20. Attorney's Fees. In the event that there is any controversy or
claim arising out of or relating to these Warrants, or to the interpretation,
breach or enforcement thereof, and any action or proceeding including an
arbitration proceeding is commenced to enforce the provisions of these Warrants,
the prevailing party shall be entitled to an award by the court of reasonable
attorney's fees, costs and expenses.
21. Governing Law. These Warrants and any dispute, disagreement, or
issue of construction or interpretation arising hereunder whether relating to
its execution, its validity, the obligations provided herein or performance
shall be governed or interpreted according to the internal laws of the State of
Delaware without regard to choice of law considerations.
22. Section or Paragraph Headings. Section headings herein have
been inserted for reference only --------- and shall 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 these Warrants.
Dated: August 13, 1999
TOP SOURCE TECHNOLOGIES, INC.
By:
David Natan
Vice President and CFO
<PAGE>
ASSIGNMENT FORM
(To be executed only upon the assignment of Warrants)
FOR VALUE RECEIVED the undersigned registered holder of the within
Warrants hereby sells, assigns and transfers unto ______________, whose address
is ____________________________ all of the rights of the undersigned under the
within Warrants, with respect to ______________ Common Stock of Top Source
Technologies, Inc. and, if such Common Stock do not include all the Common Stock
issuable as provided in the Warrants, that new Warrants of like tenor for the
number of Common Stock not being transferred hereunder be issued in the name of
and delivered to the undersigned, and does hereby irrevocably constitute and
appoint ______________ Attorney to register such transfer on the books of
______________ maintained for the purpose, with full power of substitution in
the premises.
Dated: ______________, ______.
(Signature must conform in all respects to name of
holder as specified on the face of the Warrants)
Signature Guaranteed
Address:
<PAGE>
FORM OF SUBSCRIPTION
(To be signed only upon exercise of Warrants)
To:___________________________
The undersigned, the holder of the within Warrants, hereby irrevocably
elects to exercise the purchase right represented by such Warrants for, and to
purchase thereunder, ______________ Common Stock of Top Source Technologies,
Inc., and herewith makes payment of $______________ therefor, and requests that
the certificates for such shares be issued in the name of, and delivered to, ,
whose address is . If the Common Stock being purchased hereby do not include all
the Common Stock issuable as provided in the Warrants, that new Warrants for the
number of Common Stock not being purchased hereunder be issued in the name of
and delivered to the undersigned.
Dated: ______________, ______.
(Signature must conform in all respects to name of
holder as specified on the face of the Warrants)
Signature Guaranteed
Address:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE AND ISSUABLE UPON EXERCISE
HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR UNDER THE PROVISIONS OF ANY
APPLICABLE STATE SECURITIES LAWS, BUT HAVE BEEN ACQUIRED BY THE
REGISTERED HOLDER HEREOF FOR PURPOSES OF INVESTMENT AND IN RELIANCE ON
STATUTORY EXEMPTIONS UNDER THE SECURITIES ACT, AND UNDER ANY APPLICABLE
STATE SECURITIES LAW. THESE SECURITIES AND THE SECURITIES ISSUED UPON
EXERCISE HEREOF MAY NOT BE SOLD, PLEDGED, TRANSFERRED OR ASSIGNED, NOR
MAY THESE WARRANTS BE EXERCISED, EXCEPT IN ACCORDANCE WITH TERMS SET
FORTH IN THIS CERTIFICATE OR IN A TRANSACTION WHICH IS EXEMPT UNDER
PROVISIONS OF THE SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES
LAWS OR PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT; AND IN THE
CASE OF AN EXEMPTION, ONLY IF THE COMPANY HAS RECEIVED AN OPINION OF
COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH TRANSACTION DOES NOT
REQUIRE REGISTRATION OF ANY SUCH SECURITIES
No. G-__
TOP SOURCE TECHNOLOGIES, INC.
COMMON STOCK PURCHASE WARRANT
TO PURCHASE 100,000 SHARES OF COMMON STOCK
Top Source Technologies, Inc., a Delaware corporation (the "Company"),
hereby certifies that, for value received, ____________________________(the
"Holder") is entitled, subject to the terms set forth below, to purchase from
the Company 100,000 fully paid and non-assessable shares of common stock (the
"Common Stock") of the Company at the price of $.875 per share (the "Purchase
Price"). Of these shares, 50,000 shall be exercisable for 10 years commencing
August 13, 2009 and expiring on August 12, 2009 at 6:00 p.m. New York time (the
"Expiration Date") and 50,000 shall be exercisable for nine years commencing
August 13, 2000 and expiring on the Expiration Date. The number and character of
such shares of Common Stock and the Purchase Price are subject to adjustment as
provided herein.
As used herein the following capitalized terms, unless the context
otherwise requires, have the following respective meanings:
(a) The term "Company" includes any corporation which
shall succeed to or assume the obligations of the Company hereunder.
(b) The term "Common Stock" means the common stock, par value
$0.001 per share, of the Company, together with all stock of any class
or classes (however designated) of the Company, the holders of which
shall have the right, without limitation as to amount, either to all or
to a share of the balance of current dividends and liquidating
dividends after the payment of dividends and distributions on any
shares entitled to preference, and the holders of which shall
ordinarily, in the absence of contingencies, be entitled to vote for
the election of a majority of directors of the Company (even though the
right so to vote has been suspended by the happening of such a
contingency).
(c) The term "Purchase Price per share" shall be the then
applicable purchase price for one share of Common Stock as adjusted
pursuant to Sections 5 and 6 hereof.
(d) The term Registration Statement refers to Form S-3 or
other applicable form in compliance with the Securities Act, as
defined, and rules thereunder to permit the public disposition of
Common Stock issued or issuable upon the exercise of Warrants, and any
post-effective amendments and supplements filed or required to be filed
to permit any such disposition.
(e) The term "Securities Act" means the Securities
Act of 1933 as the same shall be in effect at the time.
(f) The term "Warrants" refers to these Warrants.
1. Registration.
-------------
1.1 If the Company files a Registration Statement on or after
January 1, 2001 to cover the public sale of the Common Stock issuable to the
Holder or an affiliate in connection with the conversion of Series B Preferred
Stock or other warrants, it shall include in the Registration Statement the
common stock issuable on exercise of the Warrants at the Company's own expense,
provided, however, the Holder shall cooperate with the Company in the
preparation of such Registration Statement to the extent required to furnish
information concerning the Holder's proposed plan of distribution.
1.2 In connection with the filing of a Registration Statement
pursuant to Section 1.1 hereof, the Company shall:
(a) notify the Holder as to the filing thereof
and of all amendments thereto filed prior to the effective date of
said Registration Statement;
(b) notify the Holder promptly after it shall have
received notice thereof, of the time when the Registration Statement
becomes effective or any supplement to any prospectus forming a part of
the Registration Statement has been filed;
(c) prepare and file without expense to the Holder
the initial Registration Statement and any necessary amendment or
supplement to such Registration Statement or prospectus as may be
necessary to comply with Section 10(a)(3) of the Securities Act or
advisable in connection with the proposed distribution of the Common
Stock by the Holder (but only during such period as the Company is
required to keep the Registration Statement effective);
(d) if the Common Stock, is not a "covered security"
as that term is defined by Section 18(b) of the Securities Act, use its
reasonable best efforts to qualify the Common Stock being so registered
for sale under the securities or blue sky laws in such reasonable
number of states (not to exceed five in the aggregate) as such
registered owners may designate in writing and to register or obtain
the approval of any federal or state authority which may be required in
connection with the proposed distribution, except, in each case, in
jurisdictions in which the Company must either qualify to do business
or file a general consent to service of process as a condition to the
qualification of such securities;
(e) notify the registered owners of the Common Stock
any stop order suspending the effectiveness of the Registration
Statement and use its reasonable best efforts to remove such stop
order;
(f) undertake to keep said Registration Statement and
prospectus effective until the earlier of (i) such time as the Common
Stock issued or issuable upon exercise of the Warrants are sold or
become available for public sale without registration under the
Securities Act; and
(g) furnish to the Holder as soon as available,
copies of any such Registration Statement and each preliminary or final
prospectus and any supplement or amendment required to be prepared
pursuant to the foregoing provisions of this Section 1, all in such
quantities as the Holder may from time to time reasonably request. Upon
written request, the Company shall also furnish to each owner, without
cost, one set of the exhibits to such Registration Statement.
1.3 The Holder of the Common Stock being registered under this
Section 1 agrees to pay all of the underwriting discounts and commissions and
its own counsel fees with respect to the securities owned by them and being
registered. The Company agrees that the costs and expenses which it is obligated
to pay in connection with a Registration Statement to be filed pursuant to
Section 1.1 hereof include, but are not limited to, registration fees, the fees
and expenses of counsel for the Company, the fees and expenses of its
accountants and all other costs and expenses incident to the preparation,
printing and filing under the Securities Act of any such Registration Statement,
each prospectus and all amendments and supplements thereto, the costs incurred
in connection with the qualification of such securities for sale in a reasonable
number of states, if applicable, including fees and disbursements of counsel for
the Company or any managing underwriter, and the costs of supplying a reasonable
number of copies of the Registration Statement, each preliminary prospectus,
final prospectus and any supplements or amendments thereto to such Holder.
<PAGE>
1.4 The Company agrees to enter into an appropriate
cross-indemnity agreement with any underwriter (as defined in the Securities
Act) for such registered owners in connection with the filing of a Registration
Statement pursuant to Section 1.1 hereof.
1.5 In the event that the Company shall file any Registration
Statement including therein all or any part of the Common Stock issued or
issuable upon exercise of the Warrants, the Company and each Holder of the
Common Stock shall enter into an appropriate cross-indemnity agreement whereby
the Company shall indemnify and hold harmless the Holder against any losses,
claims, damages or liabilities (or actions in respect thereof) arising out of or
based upon any untrue statement or alleged untrue statement of any material fact
contained in such registration statement, or any omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
statements therein not misleading unless such statement or omission was made in
reliance upon and in conformity with written information furnished or required
to be furnished by any such Holder, and each such Holder shall indemnify and
hold harmless the Company, each of its directors, each of its officers who have
signed the Registration Statement and each person, if any, who controls the
Company within the meaning of the Securities Act against any losses, claims,
damages or liabilities (or actions in respect thereof) arising out of or based
upon any untrue statement or alleged untrue statement of any material fact
contained in such Registration Statement, or any omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
statements therein not misleading, if the statement or omission was made in
reliance upon and in conformity with written information furnished or required
to be furnished by such Holder or such controlling person expressly for use in
such Registration Statement.
1.6 Nothing herein shall be construed to require any Holder
who may desire to include any Common Stock in any Registration Statement
referred to in Section 1.1 hereof to exercise their Warrants prior to the
effective date of any Registration Statement.
2. Sale or Exercise Without Registration. If, at the time of any
exercise, permitted transfer or surrender for exchange of the Warrants or of
Common Stock previously issued upon the exercise of the Warrants, such Warrants
or Common Stock shall not be registered under the Securities Act, the Company
may require, as a condition of allowing such exercise, transfer or exchange,
that the holder or transferee of such Warrants or Common Stock, as the case may
be, furnish to the Company an opinion of counsel reasonably satisfactory to the
Company to the effect that such exercise, transfer or exchange may be made
without registration under the Securities Act, provided that the disposition
thereof shall at all times be within the control of such holder or transferee,
as the case may be, and provided further that nothing contained in this Section
2 shall relieve the Company from complying with any request for registration
pursuant to Section 1 hereof. The Holder of the Warrants represents to the
Company that it is acquiring the Warrants for investment and not with a view to
the distribution thereof.
3. Exercise of Warrants; Partial Exercise.
--------------------------------------
3.1 Exercise in Full or in Part. These Warrants may be
exercised in full or in part by the Holder hereof by surrender of these
Warrants, with the form of subscription attached hereto duly executed by such
holder, to the Company at its principal office, as provided in Section 19
hereof, accompanied by payment by certified or official bank check payable to
the order of the Company, in the amount obtained by multiplying the number of
shares of Common Stock called for on the face of these Warrants (without giving
effect to any adjustment therein) by the Purchase Price.
3.2 Company to Reaffirm Obligations. The Company will, at the
time of any exercise of these Warrants, upon the request of the Holder hereof,
acknowledge in writing its continuing obligation to afford to such Holder any
rights to which such Holder shall continue to be entitled after such exercise in
accordance with the provisions of these Warrants, provided that if the Holder of
these Warrants shall fail to make any such request, such failure shall not
affect the continuing obligation of the Company to afford such Holder any such
rights.
4. Delivery of Stock Certificates, etc., on Exercise. As soon
as practicable after the exercise --------- of these Warrants in full or in
part, and in any event within two days thereafter, the Company at its expense
(including the payment by it of any applicable issue or transfer taxes) will
cause to be issued in the name of and delivered to the Holder hereof a
certificate or certificates for the number of fully paid and non-assessable
Common Stock or Other Securities to which such Holder shall be entitled upon
such exercise, plus, in lieu of any fractional share to which such holder would
otherwise be entitled, cash equal to such fraction multiplied by the then
current fair market value of one full share (determined by the closing price on
the principal market as of the date of receipt of the Warrants with executed
subscription), together with any other stock or other securities and property
(including cash, where applicable) to which such Holder is entitled upon such
exercise pursuant to Section 5 hereof or otherwise.
5. Anti-Dilution Provisions. If and to the extent that the number of
issued shares of Common Stock of the Company shall be increased, reduced or
changed by change in par value, split up, reclassification, or distribution of a
dividend payable in Common Stock, the number of shares subject to the Warrants
and the exercise price per share shall be proportionately adjusted; provided,
however, that the anti-dilution provision described in this Section 5 does not
apply to sales of Common Stock made by the Company at a price below the Purchase
Price.
6. Reorganization, Consolidation, Merger, etc. In case the Company
shall (a) effect a reorganization, (b) consolidate with or merge with or into
any other entity, or (c) transfer all or substantially all of its properties or
assets to any other entity under any plan or arrangement contemplating the
dissolution of the Company, excluding the sale of assets or securities of Top
Source Automotive, Inc., then, in each such case, the holder of these Warrants,
upon the exercise thereof as provided in Section 3 hereof at any time after the
consummation of such reorganization, consolidation or merger or the effective
date of such dissolution, as the case may be, shall be entitled to receive (and
the Company shall be entitled to deliver), in lieu of the Common Stock issuable
upon such exercise prior to such consummation or such effective date, the stock
and other securities and property (including cash) to which such Holder would
have been entitled upon such consummation or in connection with such
dissolution, as the case may be, if such Holder had so exercised these Warrants
immediately prior thereto, all subject to further adjustment thereafter as
provided in Section 5 hereof.
7. Further Assurances. The Company will take all such action
as may be necessary or appropriate -------- in order that the Company may
validly and legally issue fully paid and non-assessable Common Stock upon the
exercise of all Warrants from time to time outstanding.
8. Officer's Certificate as to Adjustments. In each case of any
adjustment or readjustment in the Common Stock issuable upon the exercise of the
Warrants, the Company at its expense will promptly compute such adjustment or
readjustment in accordance with the terms of the Warrants and prepare a
certificate, executed by its chief financial or accounting officer, setting
forth such adjustment or readjustment and showing in detail the facts upon which
such adjustment or readjustment is based, and the number of Common Stock
outstanding or deemed to be outstanding. The Company will forthwith mail a copy
of each such certificate to each Holder of Warrants.
9. Notices of Record Date, etc. In the event of
----------------------------
(a) any capital reorganization of the Company, any
reclassification or recapitalization of the capital stock of the
Company or any transfer of all or substantially all the assets of the
Company to or consolidation or merger of the Company with or into any
other person; or
(b) any voluntary or involuntary dissolution, liquidation or
winding-up of the Company;
and to which Section 6 hereof is applicable, then and in each such
event the Company will mail or cause to be mailed to each holder of
Warrants a notice specifying (i) the date on which any such record is
to be taken for the purpose of such dividend, distribution or right,
and stating the amount and character of such dividend, distribution or
right; and (ii) the date on which any such reorganization,
reclassification, recapitalization, transfer, consolidation, merger,
dissolution, liquidation or winding-up is to take place, and the time,
if any, as of which the holders of record of Common Stock shall be
entitled to exchange their shares of Common Stock for securities or
other property deliverable upon such reorganization, reclassification,
recapitalization, transfer, consolidation, merger, dissolution,
liquidation or winding-up. Such notice shall be mailed at least 15 days
prior to the date therein specified.
10. Reservation of Common Stock, etc., Issuable on Exercise of
Warrants. The Company will at all ------------ times reserve and keep available,
solely for issuance and delivery upon the exercise of the Warrants, all Common
Stock from time to time issuable upon the exercise of the Warrants.
11. Listing on Securities Exchanges; Registration. If the Company at
any time shall list any Common Stock on any national securities exchange, the
Company will, at its expense, simultaneously list on such exchange, upon
official notice of issuance upon exercise of the Warrants, and maintain such
listing of, all Common Stock from time to time issuable upon the exercise of the
Warrants.
12. Exchange of Warrants. Subject to the provisions of Section 2
hereof, upon surrender for exchange of any Warrants, properly endorsed to the
Company, the Company at its own expense will issue and deliver to the holder
thereof new Warrants of like tenor, in the name of such holder calling in the
aggregate on the face or faces thereof for the number of shares of Common Stock
called for on the face of the Warrants so surrendered.
13. Replacement of Warrants. Upon receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of any
Warrants and, in the case of any such loss, theft or destruction, upon delivery
of an indemnity agreement reasonably satisfactory in form and amount to the
Company or, in the case of any such mutilation, upon surrender and cancellation
of such Warrants, the Company at its expense will execute and deliver, in lieu
thereof, new Warrants of like tenor.
14. Warrant Agent. The Company may, by written notice to each Holder of
the Warrants, appoint an agent for the purpose of issuing Common Stock upon the
exercise of the Warrants pursuant to Section 3 hereof, exchanging Warrants
pursuant to Section 12 hereof, and replacing Warrants pursuant to Section 12
hereof, and replacing Warrants pursuant to Section 13 hereof, or any of the
foregoing, and thereafter any such issuance, exchange or replacement, as the
case may be, shall be made at such office by such agent.
15. Legend. Unless the shares of Common Stock have been registered
under the Securities Act, upon exercise of any of the Warrants and the issuance
of any of the Common Stock, pursuant thereto all certificates representing
Common Stock shall bear on the face thereof substantially the following legend:
The securities represented by this certificate have not been
registered under the Securities Act of 1933, as amended, and
may not be sold, offered for sale, assigned, transferred or
otherwise disposed of, unless registered pursuant to the
provisions of that Act or unless a written opinion of counsel
to the Company concludes that such disposition is in
compliance with an available exemption from such registration.
16. Remedies. The Company stipulates that the remedies at law of the
Holder of these Warrants in the event of any default or threatened default by
the Company in the performance of or compliance with any of the terms of these
Warrants are not and will not be adequate, and that such terms may be
specifically enforced by a decree for the specific performance of any agreement
contained herein or by an injunction against a violation of any of the terms
hereof or otherwise.
17. Severability. In the event any parts of these Warrants are found to be void,
the remaining ------------ provisions of these Warrants shall nevertheless be
binding with the same effect as though the void parts were deleted.
18. Benefit. These Warrants shall be binding upon and inure to the benefit of
the parties hereto ------- and their legal representatives, successors and
assigns.
19. Notices and Addresses. All notices, offers, acceptance and any other acts
under these Warrants -------- (except delivery of these Warrants and payment of
the Purchase Price) shall be in writing, and shall be sufficiently given if
delivered to the addressees in person, by Federal Express or similar receipted
delivery, by facsimile delivery or, if mailed, postage prepaid, by certified
mail, return receipt requested, as follows:
The Company:
Mr. William C. Willis, Jr., President and
Chief Executive Officer
Top Source Technologies, Inc.
7108 Fairway Drive, Suite 200
Palm Beach Gardens, FL 33418-3757
Facsimile: (561) 691-5220
The Holder: _________________________
or to such other address as any of them, by notice to the others may designate
from time to time. The transmission confirmation receipt from the sender's
facsimile machine shall be conclusive evidence of successful facsimile delivery.
Time shall be counted to, or from, as the case may be, the delivery in person or
by mailing.
20. Attorney's Fees. In the event that there is any controversy or
claim arising out of or relating to these Warrants, or to the interpretation,
breach or enforcement thereof, and any action or proceeding including an
arbitration proceeding is commenced to enforce the provisions of these Warrants,
the prevailing party shall be entitled to an award by the court of reasonable
attorney's fees, costs and expenses.
21. Governing Law. These Warrants and any dispute, disagreement, or
issue of construction or interpretation arising hereunder whether relating to
its execution, its validity, the obligations provided herein or performance
shall be governed or interpreted according to the internal laws of the State of
Delaware without regard to choice of law considerations.
22. Section or Paragraph Headings. Section headings herein
have been inserted for reference only ---------- and shall 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 these Warrants.
Dated: August 13, 1999 TOP SOURCE TECHNOLOGIES, INC.
By:
David Natan
Vice President and CFO
<PAGE>
ASSIGNMENT FORM
(To be executed only upon the assignment of Warrants)
FOR VALUE RECEIVED the undersigned registered holder of the within
Warrants hereby sells, assigns and transfers unto ______________, whose address
is ____________________________ all of the rights of the undersigned under the
within Warrants, with respect to ______________ Common Stock of Top Source
Technologies, Inc. and, if such Common Stock do not include all the Common Stock
issuable as provided in the Warrants, that new Warrants of like tenor for the
number of Common Stock not being transferred hereunder be issued in the name of
and delivered to the undersigned, and does hereby irrevocably constitute and
appoint ______________ Attorney to register such transfer on the books of
______________ maintained for the purpose, with full power of substitution in
the premises.
Dated: ______________, ______.
(Signature must conform in all respects to name of
holder as specified on the face of the Warrants)
Signature Guaranteed
Address:
<PAGE>
FORM OF SUBSCRIPTION
(To be signed only upon exercise of Warrants)
To:___________________________
The undersigned, the holder of the within Warrants, hereby irrevocably
elects to exercise the purchase right represented by such Warrants for, and to
purchase thereunder, ______________ Common Stock of Top Source Technologies,
Inc., and herewith makes payment of $______________ therefor, and requests that
the certificates for such shares be issued in the name of, and delivered to, ,
whose address is . If the Common Stock being purchased hereby do not include all
the Common Stock issuable as provided in the Warrants, that new Warrants for the
number of Common Stock not being purchased hereunder be issued in the name of
and delivered to the undersigned.
Dated: ______________, ______.
(Signature must conform in all respects to name of
holder as specified on the face of the Warrants)
Signature Guaranteed
Address:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE AND ISSUABLE UPON
EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), OR UNDER THE PROVISIONS OF ANY
APPLICABLE STATE SECURITIES LAWS, BUT HAVE BEEN ACQUIRED BY THE
REGISTERED HOLDER HEREOF FOR PURPOSES OF INVESTMENT AND IN RELIANCE ON
STATUTORY EXEMPTIONS UNDER THE SECURITIES ACT, AND UNDER ANY APPLICABLE
STATE SECURITIES LAW. THESE SECURITIES AND THE SECURITIES ISSUED UPON
EXERCISE HEREOF MAY NOT BE SOLD, PLEDGED, TRANSFERRED OR ASSIGNED, NOR
MAY THESE WARRANTS BE EXERCISED, EXCEPT IN ACCORDANCE WITH TERMS SET
FORTH IN THIS CERTIFICATE OR IN A TRANSACTION WHICH IS EXEMPT UNDER
PROVISIONS OF THE SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES
LAWS OR PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT; AND IN THE
CASE OF AN EXEMPTION, ONLY IF THE COMPANY HAS RECEIVED AN OPINION OF
COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH TRANSACTION DOES NOT
REQUIRE REGISTRATION OF ANY SUCH SECURITIES
No. H-__
TOP SOURCE TECHNOLOGIES, INC.
COMMON STOCK PURCHASE WARRANT
TO PURCHASE _______ SHARES OF COMMON STOCK
Top Source Technologies, Inc., a Delaware corporation (the "Company"),
hereby certifies that, for value received, ___________________________________
(the "Holder") is entitled, subject to the terms set forth below, to purchase
from the Company at any time on or from time to time commencing October 27,
1999 and terminating at 6:00 p.m. New York time on October 27, 2009
_____________fully paid and non-assessable shares of common stock (the "Common
Stock") of the Company at the price of $2.375 per share (the "Purchase Price").
The number and character of such shares of Common Stock and the Purchase Price
are subject to adjustment as provided herein.
As used herein the following capitalized terms, unless the context
otherwise requires, have the following respective meanings:
(a) The term "Company" includes any corporation
which shall succeed to or assume the obligations of the Company
hereunder.
(b) The term "Common Stock" means the common stock, par value
$0.001 per share, of the Company, together with all stock of any class
or classes (however designated) of the Company, the holders of which
shall have the right, without limitation as to amount, either to all or
to a share of the balance of current dividends and liquidating
dividends after the payment of dividends and distributions on any
shares entitled to preference, and the holders of which shall
ordinarily, in the absence of contingencies, be entitled to vote for
the election of a majority of directors of the Company (even though the
right so to vote has been suspended by the happening of such a
contingency).
(c) The term "Purchase Price per share" shall be the then
applicable purchase price for one share of Common Stock as adjusted
pursuant to Sections 5 and 6 hereof.
(d) The term Registration Statement refers to Form S-3 or
other applicable form in compliance with the Securities Act, as
defined, and rules thereunder to permit the public disposition of
Common Stock issued or issuable upon the exercise of Warrants, and any
post-effective amendments and supplements filed or required to be filed
to permit any such disposition.
(e) The term "Securities Act" means the Securities
Act of 1933 as the same shall be in effect at the time.
(f) The term "Warrants" refers to these Warrants.
1. Registration, etc.
1.1 If the Company files a Registration Statement on or after
January 1, 2001 to cover the public sale of the Common Stock issuable to the
Holder or an affiliate in connection with the conversion of Series B Preferred
Stock or other warrants, it shall include in the Registration Statement the
common stock issuable on exercise of the Warrants at the Company's own expense,
provided, however, the Holder shall cooperate with the Company in the
preparation of such Registration Statement to the extent required to furnish
information concerning the Holder's proposed plan of distribution.
1.2 In connection with the filing of a Registration Statement
pursuant to Section 1.1 hereof, the Company shall:
(a) notify the Holder as to the filing thereof
and of all amendments thereto filed prior to the effective date of
said Registration Statement;
(b) notify the Holder promptly after it shall have
received notice thereof, of the time when the Registration Statement
becomes effective or any supplement to any prospectus forming a part of
the Registration Statement has been filed;
(c) prepare and file without expense to the Holder
the initial Registration Statement and any necessary amendment or
supplement to such Registration Statement or prospectus as may be
necessary to comply with Section 10(a)(3) of the Securities Act or
advisable in connection with the proposed distribution of the Common
Stock by the Holder (but only during such period as the Company is
required to keep the Registration Statement effective);
(d) if the Common Stock, is not a "covered security"
as that term is defined by Section 18(b) of the Securities Act, use its
reasonable best efforts to qualify the Common Stock being so registered
for sale under the securities or blue sky laws in such reasonable
number of states (not to exceed five in the aggregate) as such
registered owners may designate in writing and to register or obtain
the approval of any federal or state authority which may be required in
connection with the proposed distribution, except, in each case, in
jurisdictions in which the Company must either qualify to do business
or file a general consent to service of process as a condition to the
qualification of such securities;
(e) notify the registered owners of the Common Stock
any stop order suspending the effectiveness of the Registration
Statement and use its reasonable best efforts to remove such stop
order;
(f) undertake to keep said Registration Statement and
prospectus effective until the earlier of (i) such time as the Common
Stock issued or issuable upon exercise of the Warrants are sold or
become available for public sale without registration under the
Securities Act; and
(g) furnish to the Holder as soon as available,
copies of any such Registration Statement and each preliminary or final
prospectus and any supplement or amendment required to be prepared
pursuant to the foregoing provisions of this Section 1, all in such
quantities as the Holder may from time to time reasonably request. Upon
written request, the Company shall also furnish to each owner, without
cost, one set of the exhibits to such Registration Statement.
1.3 The Holder of the Common Stock being registered under this
Section 1 agrees to pay all of the underwriting discounts and commissions and
its own counsel fees with respect to the securities owned by them and being
registered. The Company agrees that the costs and expenses which it is obligated
to pay in connection with a Registration Statement to be filed pursuant to
Section 1.1 hereof include, but are not limited to, registration fees, the fees
and expenses of counsel for the Company, the fees and expenses of its
accountants and all other costs and expenses incident to the preparation,
printing and filing under the Securities Act of any such Registration Statement,
each prospectus and all amendments and supplements thereto, the costs incurred
in connection with the qualification of such securities for sale in a reasonable
number of states, if applicable, including fees and disbursements of counsel for
the Company or any managing underwriter, and the costs of supplying a reasonable
number of copies of the Registration Statement, each preliminary prospectus,
final prospectus and any supplements or amendments thereto to such Holder.
<PAGE>
1.4 The Company agrees to enter into an appropriate
cross-indemnity agreement with any underwriter (as defined in the Securities
Act) for such registered owners in connection with the filing of a Registration
Statement pursuant to Section 1.1 hereof.
1.5 In the event that the Company shall file any Registration
Statement including therein all or any part of the Common Stock issued or
issuable upon exercise of the Warrants, the Company and each Holder of the
Common Stock shall enter into an appropriate cross-indemnity agreement whereby
the Company shall indemnify and hold harmless the Holder against any losses,
claims, damages or liabilities (or actions in respect thereof) arising out of or
based upon any untrue statement or alleged untrue statement of any material fact
contained in such registration statement, or any omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
statements therein not misleading unless such statement or omission was made in
reliance upon and in conformity with written information furnished or required
to be furnished by any such Holder, and each such Holder shall indemnify and
hold harmless the Company, each of its directors, each of its officers who have
signed the Registration Statement and each person, if any, who controls the
Company within the meaning of the Securities Act against any losses, claims,
damages or liabilities (or actions in respect thereof) arising out of or based
upon any untrue statement or alleged untrue statement of any material fact
contained in such Registration Statement, or any omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
statements therein not misleading, if the statement or omission was made in
reliance upon and in conformity with written information furnished or required
to be furnished by such Holder or such controlling person expressly for use in
such Registration Statement.
1.6 Nothing herein shall be construed to require any Holder
who may desire to include any Common Stock in any Registration Statement
referred to in Section 1.1 hereof to exercise their Warrants prior to the
effective date of any Registration Statement.
2. Sale or Exercise Without Registration. If, at the time of any
exercise, permitted transfer or surrender for exchange of the Warrants or of
Common Stock previously issued upon the exercise of the Warrants, such Warrants
or Common Stock shall not be registered under the Securities Act, the Company
may require, as a condition of allowing such exercise, transfer or exchange,
that the holder or transferee of such Warrants or Common Stock, as the case may
be, furnish to the Company an opinion of counsel reasonably satisfactory to the
Company to the effect that such exercise, transfer or exchange may be made
without registration under the Securities Act, provided that the disposition
thereof shall at all times be within the control of such holder or transferee,
as the case may be, and provided further that nothing contained in this Section
2 shall relieve the Company from complying with any request for registration
pursuant to Section 1 hereof. The Holder of the Warrants represents to the
Company that it is acquiring the Warrants for investment and not with a view to
the distribution thereof.
3. Exercise of Warrants; Partial Exercise.
--------------------------------------
3.1 Exercise in Full or in Part. These Warrants may be
exercised in full or in part by the Holder hereof by surrender of these
Warrants, with the form of subscription attached hereto duly executed by such
holder, to the Company at its principal office, as provided in Section 19
hereof, accompanied by payment by certified or official bank check payable to
the order of the Company, in the amount obtained by multiplying the number of
shares of Common Stock called for on the face of these Warrants (without giving
effect to any adjustment therein) by the Purchase Price.
3.2 Company to Reaffirm Obligations. The Company will, at the
time of any exercise of these Warrants, upon the request of the Holder hereof,
acknowledge in writing its continuing obligation to afford to such Holder any
rights to which such Holder shall continue to be entitled after such exercise in
accordance with the provisions of these Warrants, provided that if the Holder of
these Warrants shall fail to make any such request, such failure shall not
affect the continuing obligation of the Company to afford such Holder any such
rights.
4. Delivery of Stock Certificates, etc., on Exercise. As soon as practicable
after the exercise -------- of these Warrants in full or in part, and in any
event within two days thereafter, the Company at its expense (including the
payment by it of any applicable issue or transfer taxes) will cause to be issued
in the name of and delivered to the Holder hereof a certificate or certificates
for the number of fully paid and non-assessable Common Stock or Other Securities
to which such Holder shall be entitled upon such exercise, plus, in lieu of any
fractional share to which such holder would otherwise be entitled, cash equal to
such fraction multiplied by the then current fair market value of one full share
(determined by the closing price on the principal market as of the date of
receipt of the Warrants with executed subscription), together with any other
stock or other securities and property (including cash, where applicable) to
which such Holder is entitled upon such exercise pursuant to Section 5 hereof or
otherwise.
5. Anti-Dilution Provisions. If and to the extent that the number of
issued shares of Common Stock of the Company shall be increased, reduced or
changed by change in par value, split up, reclassification, or distribution of a
dividend payable in Common Stock, the number of shares subject to the Warrants
and the exercise price per share shall be proportionately adjusted; provided,
however, that the anti-dilution provision described in this Section 5 does not
apply to sales of Common Stock made by the Company at a price below the Purchase
Price.
6. Reorganization, Consolidation, Merger, etc. In case the Company
shall (a) effect a reorganization, (b) consolidate with or merge with or into
any other entity, or (c) transfer all or substantially all of its properties or
assets to any other entity under any plan or arrangement contemplating the
dissolution of the Company, excluding the sale of assets or securities of Top
Source Automotive, Inc., then, in each such case, the holder of these Warrants,
upon the exercise thereof as provided in Section 3 hereof at any time after the
consummation of such reorganization, consolidation or merger or the effective
date of such dissolution, as the case may be, shall be entitled to receive (and
the Company shall be entitled to deliver), in lieu of the Common Stock issuable
upon such exercise prior to such consummation or such effective date, the stock
and other securities and property (including cash) to which such Holder would
have been entitled upon such consummation or in connection with such
dissolution, as the case may be, if such Holder had so exercised these Warrants
immediately prior thereto, all subject to further adjustment thereafter as
provided in Section 5 hereof.
7. Further Assurances. The Company will take all such action as may be
necessary or appropriate ------- in order that the Company may validly and
legally issue fully paid and non-assessable Common Stock upon the exercise of
all Warrants from time to time outstanding.
8. Officer's Certificate as to Adjustments. In each case of any
adjustment or readjustment in the Common Stock issuable upon the exercise of the
Warrants, the Company at its expense will promptly compute such adjustment or
readjustment in accordance with the terms of the Warrants and prepare a
certificate, executed by its chief financial or accounting officer, setting
forth such adjustment or readjustment and showing in detail the facts upon which
such adjustment or readjustment is based, and the number of Common Stock
outstanding or deemed to be outstanding. The Company will forthwith mail a copy
of each such certificate to each Holder of Warrants.
9. Notices of Record Date, etc. In the event of
----------------------------
(a) any capital reorganization of the Company, any
reclassification or recapitalization of the capital stock of the
Company or any transfer of all or substantially all the assets of the
Company to or consolidation or merger of the Company with or into any
other person; or
(b) any voluntary or involuntary dissolution, liquidation or
winding-up of the Company;
and to which Section 6 hereof is applicable, then and in each such
event the Company will mail or cause to be mailed to each holder of
Warrants a notice specifying (i) the date on which any such record is
to be taken for the purpose of such dividend, distribution or right,
and stating the amount and character of such dividend, distribution or
right; and (ii) the date on which any such reorganization,
reclassification, recapitalization, transfer, consolidation, merger,
dissolution, liquidation or winding-up is to take place, and the time,
if any, as of which the holders of record of Common Stock shall be
entitled to exchange their shares of Common Stock for securities or
other property deliverable upon such reorganization, reclassification,
recapitalization, transfer, consolidation, merger, dissolution,
liquidation or winding-up. Such notice shall be mailed at least 15 days
prior to the date therein specified.
10. Reservation of Common Stock, etc., Issuable on Exercise of
Warrants. The Company will at all ------- times reserve and keep available,
solely for issuance and delivery upon the exercise of the Warrants, all Common
Stock from time to time issuable upon the exercise of the Warrants.
11. Listing on Securities Exchanges; Registration. If the Company at
any time shall list any Common Stock on any national securities exchange, the
Company will, at its expense, simultaneously list on such exchange, upon
official notice of issuance upon exercise of the Warrants, and maintain such
listing of, all Common Stock from time to time issuable upon the exercise of the
Warrants.
12. Exchange of Warrants. Subject to the provisions of Section 2
hereof, upon surrender for exchange of any Warrants, properly endorsed to the
Company, the Company at its own expense will issue and deliver to the holder
thereof new Warrants of like tenor, in the name of such holder calling in the
aggregate on the face or faces thereof for the number of shares of Common Stock
called for on the face of the Warrants so surrendered.
13. Replacement of Warrants. Upon receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of any
Warrants and, in the case of any such loss, theft or destruction, upon delivery
of an indemnity agreement reasonably satisfactory in form and amount to the
Company or, in the case of any such mutilation, upon surrender and cancellation
of such Warrants, the Company at its expense will execute and deliver, in lieu
thereof, new Warrants of like tenor.
14. Warrant Agent. The Company may, by written notice to each Holder of
the Warrants, appoint an agent for the purpose of issuing Common Stock upon the
exercise of the Warrants pursuant to Section 3 hereof, exchanging Warrants
pursuant to Section 12 hereof, and replacing Warrants pursuant to Section 12
hereof, and replacing Warrants pursuant to Section 13 hereof, or any of the
foregoing, and thereafter any such issuance, exchange or replacement, as the
case may be, shall be made at such office by such agent.
15. Legend. Unless the shares of Common Stock have been registered
under the Securities Act, upon exercise of any of the Warrants and the issuance
of any of the Common Stock, pursuant thereto all certificates representing
Common Stock shall bear on the face thereof substantially the following legend:
The securities represented by this certificate have not been
registered under the Securities Act of 1933, as amended, and
may not be sold, offered for sale, assigned, transferred or
otherwise disposed of, unless registered pursuant to the
provisions of that Act or unless a written opinion of counsel
to the Company concludes that such disposition is in
compliance with an available exemption from such registration.
16. Remedies. The Company stipulates that the remedies at law of the
Holder of these Warrants in the event of any default or threatened default by
the Company in the performance of or compliance with any of the terms of these
Warrants are not and will not be adequate, and that such terms may be
specifically enforced by a decree for the specific performance of any agreement
contained herein or by an injunction against a violation of any of the terms
hereof or otherwise.
17. Severability. In the event any parts of these Warrants are found to
be void, the remaining -------- provisions of these Warrants shall nevertheless
be binding with the same effect as though the void parts were deleted.
18. Benefit. These Warrants shall be binding upon and inure
to the benefit of the parties hereto ------- and their legal representatives,
successors and assigns.
19. Notices and Addresses. All notices, offers, acceptance and any
other acts under these Warrants ------- (except delivery of these Warrants and
payment of the Purchase Price) shall be in writing, and shall be sufficiently
given if delivered to the addressees in person, by Federal Express or similar
receipted delivery, by facsimile delivery or, if mailed, postage prepaid, by
certified mail, return receipt requested, as follows:
The Company: Mr. William C. Willis, Jr., President and
Chief Executive Officer
Top Source Technologies, Inc.
7108 Fairway Drive, Suite 200
Palm Beach Gardens, FL 33418-3757
Facsimile: (561) 691-5220
The Holder: _____________________________
or to such other address as any of them, by notice to the others may designate
from time to time. The transmission confirmation receipt from the sender's
facsimile machine shall be conclusive evidence of successful facsimile delivery.
Time shall be counted to, or from, as the case may be, the delivery in person or
by mailing.
20. Attorney's Fees. In the event that there is any controversy or
claim arising out of or relating to these Warrants, or to the interpretation,
breach or enforcement thereof, and any action or proceeding including an
arbitration proceeding is commenced to enforce the provisions of these Warrants,
the prevailing party shall be entitled to an award by the court of reasonable
attorney's fees, costs and expenses.
21. Governing Law. These Warrants and any dispute, disagreement, or
issue of construction or interpretation arising hereunder whether relating to
its execution, its validity, the obligations provided herein or performance
shall be governed or interpreted according to the internal laws of the State of
Delaware without regard to choice of law considerations.
22. Section or Paragraph Headings. Section headings herein have
been inserted for reference only ----------- and shall 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 these Warrants.
Dated: October 27, 1999 TOP SOURCE TECHNOLOGIES, INC.
By:
David Natan
Vice President and CFO
<PAGE>
ASSIGNMENT FORM
(To be executed only upon the assignment of Warrants)
FOR VALUE RECEIVED the undersigned registered holder of the within
Warrants hereby sells, assigns and transfers unto ______________, whose address
is ____________________________ all of the rights of the undersigned under the
within Warrants, with respect to ______________ Common Stock of Top Source
Technologies, Inc. and, if such Common Stock do not include all the Common Stock
issuable as provided in the Warrants, that new Warrants of like tenor for the
number of Common Stock not being transferred hereunder be issued in the name of
and delivered to the undersigned, and does hereby irrevocably constitute and
appoint ______________ Attorney to register such transfer on the books of
______________ maintained for the purpose, with full power of substitution in
the premises.
Dated: ______________, ______.
(Signature must conform in all respects to name of
holder as specified on the face of the Warrants)
Signature Guaranteed
Address:
<PAGE>
FORM OF SUBSCRIPTION
(To be signed only upon exercise of Warrants)
To:___________________________
The undersigned, the holder of the within Warrants, hereby irrevocably
elects to exercise the purchase right represented by such Warrants for, and to
purchase thereunder, ______________ Common Stock of Top Source Technologies,
Inc., and herewith makes payment of $______________ therefor, and requests that
the certificates for such shares be issued in the name of, and delivered to, ,
whose address is . If the Common Stock being purchased hereby do not include all
the Common Stock issuable as provided in the Warrants, that new Warrants for the
number of Common Stock not being purchased hereunder be issued in the name of
and delivered to the undersigned.
Dated: ______________, ______.
(Signature must conform in all respects to name of
holder as specified on the face of the Warrants)
Signature Guaranteed
Address:
