<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-KSB
[x] ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended June 30, 1995
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
Commission File No. 0-16117
UNSI Corporation
(Name of small business issuer in its charter)
Delaware 22-2661940
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification Number)
c/o Forstmann-Leff Associates, Inc.,
55 East 52nd Street, New York, New York 10055
(Address of principal executive offices) Zip Code
Issuer's telephone number, including area code: 212-407-9450
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, par value $.01 per share
(Title of Class)
Check whether the issuer (1) has filed all reports required to be
filed by Section 13 or 15 (d) of the Exchange Act during the past 12
months (or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
X Yes No
Check if there is no disclosure of delinquent filers in response to
Item 405 of Regulation S-B not contained in this form, and no
disclosure will be contained, to the best of registrant's knowledge,
in definitive proxy or information statements incorporated by
reference in Part III of this Form 10-KSB or any amendment to this
Form 10-KSB. [ ]
As of September 29, 1995, 2,210,000 shares of Common Stock were
outstanding. The aggregate market value of the shares held by
non-affiliates of the issuer is not determinable.
The issuer's revenues for its most recent fiscal year were $895,401.
DOCUMENTS INCORPORATED BY REFERENCE
Items 9, 10, 11 and 12 are hereby incorporated by reference to the
issuer's definitive proxy statement to be filed with the Securities
and Exchange Commission not later than October 28, 1995.
<PAGE>
PART I
Item 1. Description of Business.
Pursuant to the terms of an Assets Purchase Agreement
among Investor's Fiduciary Services, Inc. ("IFSI"), UNSI
Corporation (the "Company"), Peter Lusk and CDA Investment
Technologies, Inc. ("CDA"), dated as of September 5, 1995 (the
"Agreement"), IFSI, a wholly owned subsidiary of UNSI
Corporation, sold substantially all of its assets to CDA,
including the right to utilize the name "Investors' Fiduciary
Services, Inc." in connection with the proxy research, advisory,
voting services, consulting and analysis business (the "Purchased
Assets"). The purchase price for the Purchased Assets, subject
to post-closing adjustments, was $2,249,600, consisting of
$358,600 in the assumption of IFSI liabilities and a cash balance
of $1,691,000. CDA deposited $200,000 of the cash proceeds into
an escrow account to meet IFSI's potential indemnification
obligations under the Agreement, and to provide security for the
collection of IFSI accounts receivable included in the Purchased
Assets. The Escrow Agreement provides for the release of the
escrowed funds in stages over an 18 month period. The Agreement
provides for the receipt by IFSI of two additional payments of
$375,000, as additional consideration for the Purchased Assets,
in the event that certain earnings levels are achieved by CDA
from IFSI clients and IFSI products currently under development
at the date of the Agreement. These payments are due to be paid,
if at all, in October, 1996 and March, 1999 respectively. No
assurance can be given that the Company will receive such
additional payments. See Notes A and B of Notes to the Company's
consolidated financial statements.
As a result of this transaction, the Company is no
longer engaged in any operating activities (and it has no
employees) other than the investment of its cash and the search
for possible merger or acquisition opportunities. No such
opportunities have been definitively identified at this time and
there can be no assurance that such opportunities will be
identified or that such transactions, if and when effected, will
benefit the Company.
Employees
At June 30, 1995, the Company had approximately 30
employees, including 27 full time employees. Management believes
that its relationship with its employees was satisfactory. Since
the sale by IFSI of its assets, as described above, the Company
has had no employees.
Item 2. Description of Property.
The Company's principal executive office is located at:
c/o Forstmann-Leff Associates, Inc., 55 East 52nd Street, New
York, New York 10055. The Company does not pay rent for the use
of this facility.
-2-
<PAGE>
Item 3. Legal Proceedings.
Not Applicable.
Item 4. Submission of Matters to a Vote of Security Holders.
Not Applicable.
PART II
Item 5. Market for Common Equity and Related Stockholder
Matters.
There has been no established trading market for the
Company's Common Stock from the third calendar quarter of 1993 to
the present.
As of September 29, 1995, there were approximately 35
record holders of the Company's Common Stock and an indeterminate
number of beneficial stockholders.
The Company has not paid any cash dividends on its
Common Stock since its inception, and it does not anticipate
paying any cash dividends thereon in the foreseeable future.
Item 6. Management's Discussion and Analysis or Plan of
Operation
Results of operations
During the years ended June 30, 1995 and 1994, revenue
from operations was $872,901 and $796,006, respectively. Revenue
from operations for fiscal 1995 increased by approximately 9.7%
from the corresponding period in the prior year primarily because
of an increase in the number of clients served. During the years
ended June 30, 1995 and 1994, the Company incurred direct costs
of services of $1,492,509 and $931,842, respectively. Direct
costs of services increased in 1995 by approximately 60% over the
prior year as a result of increased staff and costs of financial
information services. Selling, general and administrative
expenses for the years ended June 30, 1995 and 1994 were $943,334
and $676,345, respectively. These expenses increased in 1995 by
approximately 40% over the prior year as a result of additional
rent associated with enlarged office facilities and the
incurrence of approximately $230,000 of bad debt expense
associated with non-trade receivables. See Note D of Notes to
the Company's consolidated financial statements. Interest
expenses of $203,044 in fiscal 1995 represented an increase of
approximately 388% over the fiscal 1994 total of $41,609. The
increase in interest expense was associated with the short term
loans made during fiscal 1995 and the 7% subordinated debentures
which were issued late in fiscal 1994. Approximately $78,000 of
the interest expense related to the debentures was paid through
the issuance of additional debentures.
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<PAGE>
The net loss in the year ended June 30, 1995, increased
by approximately 104% over the prior year as a result of the
factors reported above.
Liquidity and Capital Resources
As of June 30, 1995, the Company had total current
assets of $218,681 and a working capital deficit of ($1,844,396).
On a pro forma basis, after giving effect to the sale of the
Purchased Assets, the Company had total current assets of
$964,536 and working capital of $193,786. The Company's cash
position at the end of fiscal 1995 had decreased by $626,589 from
the prior year because the net cash of $1,023,910 used in
operating activities and net cash of $282,441 used in investing
activities far exceeded net cash of $679,762 received from
financing activities.
The Company currently engages in no operating
activities other than the investment of its cash and the search
for possible merger or acquisition opportunities. Accordingly,
the Company's expenditures will consist primarily of legal and
accounting fees. The Company's working capital is sufficient to
meet its present and anticipated near term operating needs. The
Company has no commitments for any material capital expenditures.
Item 7. Financial Statements.
Page No.
Index to Consolidated Financial Statements 4
Report of Independent Certified Public Accountants F-1
Consolidated Balance Sheet, June 30, 1995 and 1994 F-2
Consolidated Statements of Operations, years
ended June 30, 1995 and 1994 F-4
Consolidated Statements of Stockholders' Deficiency, years
ended June 30, 1995 and 1994 F-5
Consolidated Statements of Cash Flows, years
ended June 30, 1995 and 1994 F-6
Notes to Consolidated Financial Statements, years
ended June 30, 1995 and 1994 F-8
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<PAGE>
FINANCIAL STATEMENTS AND REPORT OF
INDEPENDENT CERTIFIED PUBLIC
ACCOUNTANTS
UNSI CORPORATION AND SUBSIDIARY
June 30, 1995 and 1994
<PAGE>
Report of Independent Certified Public Accountants
Board of Directors and Stockholders
UNSI Corporation
We have audited the accompanying consolidated balance sheets of UNSI
Corporation (a Delaware corporation) and Subsidiary as of June 30, 1995 and
1994, and the related consolidated statements of operations, stockholders'
deficiency and cash flows for each of the two years in the period ended June 30,
1995. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
As described at Note B in the accompanying consolidated financial
statements, on September 5, 1995, the Company entered into an agreement for the
sale of all of its operating assets and the assumption of most of its operating
liabilities. Accordingly, as at September 5, 1995 the Company ceased
operations. The Company has no plans for the resumption of operations at this
time. The bases of the assets sold and liabilities transferred have not been
modified from the historical cost basis of accounting to reflect this
transaction, which resulted in a gain to the Company.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the consolidated financial position of UNSI
Corporation and Subsidiary as of June 30, 1995 and 1994, and the consolidated
results of their operations and their consolidated cash flows for each of the
two years in the period ended June 30, 1995, in conformity with generally
accepted accounting principles.
Atlanta, Georgia
September 29, 1995
F-1
<PAGE>
UNSI Corporation and Subsidiary
CONSOLIDATED BALANCE SHEET
June 30,
ASSETS (Note B)
<TABLE>
<CAPTION>
(Unaudited)
Pro Forma
(Note B)
June 30, 1995 1995 1994
<S> <C> <C> <C>
CURRENT ASSETS
Cash and cash equivalents $964,536 $100,035 $ 726,624
Accounts receivable - 115,346 115,786
Other current assets (Note N) - 3,300 25,364
Total current assets 964,536 218,681 867,774
PROPERTY AND EQUIPMENT, at cost,
less accumulated depreciation (Note E) - 284,036 147,340
OTHER ASSETS
Notes and advances receivable - - 149,717
Escrowed sale proceeds (Note B) 200,000 - -
Other 31,500 39,358 9,786
$1,196,036 $542,075 $ 1,174,617
</TABLE>
The accompanying notes are an integral part of these statements.
F-2
<PAGE>
LIABILITIES AND STOCKHOLDERS' DEFICIENCY (Note B)
<TABLE>
<CAPTION>
(Unaudited)
Pro Forma
(Note B)
June 30, 1995 1995 1994
<S> <C> <C> <C>
CURRENT LIABILITIES
Accounts payable $ 32,626 $ 292,265 $ 53,930
Unearned revenue - 194,587 226,138
Accrued expenses (Note N) 162,153 221,114 74,789
Marketing commissions payable (Note J) 84,700 84,700 84,700
Capitalized lease obligations,
current portion (Note H) - 580 9,805
Note payable to bank (Note I) - - 250,000
Notes and advances payable to
related parties (Note F) 491,321 1,292,321 89,496
Total current liabilities 770,800 2,085,567 788,858
LONG-TERM OBLIGATIONS,
LESS CURRENT PORTION
Capitalized lease obligations (Note H) - - 353
Notes payable to stockholder (Note F) - - 438,825
7% pay-in-kind convertible debentures (Note G) 1,193,413 1,193,413 940,000
5% subordinated convertible debenture (Note F) 331,250 331,250 331,250
1,524,663 1,524,663 1,710,428
COMMITMENTS AND CONTINGENCIES
(Notes B, C, J and K) - - -
STOCKHOLDERS' DEFICIENCY (Notes B, C and K)
Preferred stock, $.01 par value; 1,000,000 shares
authorized; no shares issued or outstanding - - -
Common stock, $.01 par value; 10,000,000 shares
authorized; 2,210,000 shares issued
and outstanding 22,100 22,100 22,100
Additional contributed capital 369,932 369,932 369,932
Accumulated deficit (1,491,459) (3,460,187) (1,716,701)
Total stockholders' deficiency (1,099,427) (3,068,155) (1,324,669)
$1,196,036 $ 542,075 $ 1,174,617
</TABLE>
F-3
<PAGE>
UNSI Corporation and Subsidiary
CONSOLIDATED STATEMENTS OF OPERATIONS
Years ended June 30,
(Note B)
<TABLE>
<CAPTION>
1995 1994
<S> <C> <C>
Revenue - professional fees $ 872,901 $ 796,006
Other 22,500 -
895,401 796,006
Costs and expenses
Direct costs of service 1,492,509 931,842
Selling, general and administrative expenses (Note J) 943,334 676,345
Interest (Note N) 203,044 41,609
2,638,887 1,649,796
NET LOSS $ (1,743,486) $ (853,790)
Loss per common and common equivalent
share (Note L) $ (.79) $ (.39)
</TABLE>
The accompanying notes are an integral part of these statements.
F-4
<PAGE>
UNSI Corporation and Subsidiary
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIENCY
Years ended June 30, 1995 and 1994
<TABLE>
<CAPTION>
Investors Fiduciary Services, Inc. UNSI Corporation
Class A Common stock Additional
Preferred stock Common stock (Note J) contributed Accumulated
Shares Par value Shares Par value Shares Par value capital deficit Total
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Balance, June 30, 1993 400 $ 4 60,000 $ 600 - $ - $200,000 $(862,911) $ (662,307)
Recapitalization of
Investors' Fiduciary
Services, Inc.("IFSI"),
with IFSI as the
acquirer (Note C) (400) (4) (60,000) (600) 2,210,000 22,100 169,932 - 191,428
Net loss for the year - - - - - - - (853,790) (853,790)
Balance, June 30, 1994 - - - - 2,210,000 22,100 369,932 (1,716,701) (1,324,669)
Net loss for the year - - - - - - - (1,743,486) (1,743,486)
Balance, June 30, 1995 - $ - $ - $ - 2,210,000 $22,100 $369,932 $(3,460,187) $(3,068,155)
Pro forma gain on sale
of IFSI assets (Note B) - - - - - - - 1,968,728 1,968,728
Pro forma balance,
June 30, 1995 - $ - $ - $ - 2,210,000 $22,100 $369,932 $(1,491,459) $(1,099,427)
</TABLE>
The accompanying notes are an integral part of these statements.
F-5
<PAGE>
UNSI Corporation and Subsidiary
CONSOLIDATED STATEMENTS OF CASH FLOWS
Years ended June 30,
<TABLE>
<CAPTION>
1995 1994
<S> <C> <C>
Cash flows from operating activities:
Cash received from customers $ 841,350 $ 860,866
Cash paid to suppliers and employees (1,865,260) (1,625,607)
Net cash used in operating activities (1,023,910) (764,741)
Cash flows from investing activities:
Capital expenditures (218,638) (99,239)
Proceeds from sale of equipment 5,822 -
Advances to affiliated entities (69,625) (10,000)
Cash received on recapitalization (Note B) - 14,612
Net cash used in investing activities (282,441) (94,627)
Cash flows from financing activities:
Principal payments under capital lease obligations (9,578) (13,134)
Proceeds from (payments on) note payable to bank (250,000) 250,000
Proceeds from issuance of notes payable to debenture holders 700,000 -
Net advances from principal stockholder 64,000 404,144
Proceeds from issuance of 7% pay-in-kind convertible debentures 175,340 900,000
Net cash provided by financing activities 679,762 1,541,010
Net (decrease) increase in cash and cash equivalents (626,589) 681,642
Cash and cash equivalents, beginning of year 726,624 44,982
Cash and cash equivalents, end of year $ 100,035 $ 726,624
</TABLE>
The accompanying notes are an integral part of these statements.
F-6
<PAGE>
UNSI Corporation and Subsidiary
CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED
Years ended June 30,
<TABLE>
<CAPTION>
1995 1994
<S> <C> <C>
Reconciliation of net loss to net cash used
in operating activities:
Net loss $ (1,743,486) $ (853,790)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation 66,901 31,123
Expenses paid through issuance of pay-in-kind
debentures 78,073 40,000
Bad debt expense 230,805 -
Loss on sale of equipment 9,219 -
Changes in assets and liabilities net of
effects of recapitalization in 1994:
Decrease (increase) in accounts receivable 440 (51,255)
Decrease (increase) in other current
assets 22,064 (26,316)
Increase in interest due from affiliated
entities and an individual (11,463) (7,545)
Increase in other assets (29,572) (2,190)
Increase (decrease) in accounts payable 238,335 (22,884)
(Decrease) increase in unearned revenue (31,551) 116,115
Increase in accrued expenses 146,325 12,001
Total adjustments 719,576 89,049
Net cash used in operating activities $ (1,023,910) $ (764,741)
</TABLE>
Noncash Investing and Financing Activities:
As part of the Company's recapitalization in 1994 (Note C) the Company
recorded the net assets of UNSI Corporation as an addition to its balance sheet,
with a corresponding increase in contributed capital. These net assets,
totaling $191,428, were comprised of total assets, inclusive of $14,612 cash, of
$585,860. In this same transaction, liabilities of $394,432 were assumed by the
Company.
Pay-in-kind debentures totaling $40,000 were issued in 1994 as
consideration for the provision of certain professional services. These
services have been reflected as a component of the Company's general and
administrative expenses for the year ended June 30, 1994.
Pay-in-kind debentures totaling $78,073 were issued in 1995 in lieu of
payment of interest on the then outstanding 7% pay-in-kind debentures.
The Company incurred capital lease obligations of $2,600 to finance new
equipment during the year ended June 30, 1994.
F-7
<PAGE>
UNSI Corporation and Subsidiary
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years ended June 30, 1995 and 1994
A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
1. Description of Business
UNSI Corporation and its wholly owned subsidiary, Investors' Fiduciary
Services, Inc. (hereinafter collectively referred to as the "Company"),
provided, until September 5, 1995, proxy advisory and related services to
institutional investors and fund managers (see Note B).
2. Recapitalization and Principles of Consolidation
As described more fully at Note C, UNSI Corporation acquired all of the
outstanding common and preferred stock of Investors' Fiduciary Services, Inc.
("IFSI") on January 3, 1994. For accounting purposes the acquisition has been
treated as a recapitalization of IFSI, with IFSI as the acquirer (a reverse
acquisition). The historical financial statements prior to January 3, 1994, are
those of IFSI. The Company's consolidated financial statements for the year
ended June 30, 1994, include the accounts of IFSI for the year then ended, and
the accounts of UNSI Corporation from January 3, 1994, through June 30, 1994.
All significant intercompany transactions and balances have been eliminated.
3. Cash and Cash Equivalents
For purposes of the consolidated statement of cash flows, the Company
considers all highly liquid debt instruments, purchased with a maturity of three
months or less, to be cash equivalents. The Company maintains a high percentage
of its cash balances in one financial institution located in New York City, New
York. These balances are insured by the Federal Deposit Insurance Corporation
up to $100,000. All amounts held at this financial institution in excess of
$100,000 are uninsured.
4. Revenue Recognition
Professional fees consist primarily of fees collected for the provision of
ongoing proxy analysis services and for the processing of specific proxies for
institutional investors and fund managers. A large portion of these fees are
collected in advance. The Company defers unearned fees and recognizes them as
revenue in the period in which it performs the services.
F-8
<PAGE>
UNSI Corporation and Subsidiary
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
Years ended June 30, 1995 and 1994
NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued
5. Property and Equipment
Depreciation and amortization are provided for in amounts sufficient to
relate the cost of depreciable assets to operations over their estimated service
lives. Leasehold improvements are amortized over the lives of the respective
leases, or the service lives of the improvements, whichever is less. Leased
property under capital leases is amortized over the lives of the respective
leases, or the service lives of those leases which substantially transfer
ownership. The straight-line method of depreciation is followed for
substantially all assets for financial reporting purposes, but accelerated
methods are used for tax purposes.
6. Income Taxes
The Company accounts for income taxes under the liability method as
provided for in Statement of Financial Accounting Standards (SFAS) No. 109,
ACCOUNTING FOR INCOME TAXES. Under the liability method, deferred tax assets
and liabilities are determined based on the difference between the financial
statement and tax bases of assets and liabilities, as measured by the enacted
tax rates which will be in effect when these differences reverse. Deferred tax
expense is the result of changes in deferred tax assets and liabilities. The
principal types of differences between assets and liabilities for financial
statement and tax return purposes are accumulated depreciation and unearned
revenue.
7. Pro Forma Presentation (Unaudited)
The unaudited pro forma presentation of the balance sheet has been prepared
assuming that the sale of assets and assumption of liabilities as discussed in
Note B occurred as of June 30, 1995.
NOTE B - SALE OF ASSETS AND CERTAIN LIABILITIES OF IFSI (UNAUDITED)
On September 5, 1995, the Company sold all of its operating assets, with
concomitant assumption by CDA Investment Technologies, Inc. of essentially all
liabilities associated with IFSIis operating activities. The base purchase
price of $2,249,600 was comprised of assumption of liabilities of the Company of
approximately $358,600 and payment of cash to the Company of approximately
$1,691,000. Additionally, the purchaser placed $200,000 of the sales proceeds
in an escrow account. This $200,000 will be paid to the Company by the escrow
agent over the next eighteen months, subject to payment from this account of any
unrecorded liabilities related to pre-transaction date activity which arise.
The Company does not believe there are any material liabilities to be paid from
these escrow funds and has recorded this escrow account as an asset as of the
date of the sale transaction.
F-9
<PAGE>
UNSI Corporation and Subsidiary
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
Years ended June 30, 1995 and 1994
NOTE B - SALE OF ASSETS AND CERTAIN LIABILITIES OF IFSI (UNAUDITED) -
Continued
Following is a pro forma presentation of the computation of the gain on the
sale of IFSI assets, had the sale occurred on June 30, 1995:
Net book value of assets sold $ 425,459
Unearned revenue recorded for which future
services from the Company are not required (194,587)
Net book value of IFSI assets sold 230,872
Consideration received, inclusive of the
assumption of $320,448 of liabilities and net of an
estimated $50,000 in legal and other sale related costs 2,199,600
Pro forma gain on sale of IFSI assets, had the
sale
occurred on June 30, 1995 $1,968,728
Additionally, the Company could receive up to an additional $750,000 on the
sale of the aforementioned operating assets, subject to the achievement by the
buyer of certain customer retention and product development goals set forth in
the sale agreement. This contingent consideration has not been recorded as part
of the sale price, and would be recognized by the Company prospectively as
achievement against such customer retention and product development goals is
determined.
NOTE C - RECAPITALIZATION
On January 3, 1994, UNSI Corporation acquired, through a reverse subsidiary
merger, all of the outstanding common and preferred stock of IFSI. The
transaction has been accounted for as a reverse acquisition, with
recapitalization of IFSI occurring as of January 3, 1994. The net assets of
UNSI Corporation of $191,428 have been recorded as an increase in additional
contributed capital.
F-10
<PAGE>
UNSI Corporation and Subsidiary
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
Years ended June 30, 1995 and 1994
NOTE C - RECAPITALIZATION - Continued
The agreement and plan of merger between the parties, which were controlled
prior and subsequent to the merger by UNSI Corporation's principal stockholder,
provided for: (a) the exchange of all outstanding shares of IFSI's common stock
(60,000 shares) for warrants to purchase 3,750,001 shares of UNSI common stock;
and (b) the exchange of all outstanding shares of IFSI's preferred stock (400
shares) for a 5% subordinated convertible debenture (convertible into 1,650,000
shares of UNSI common stock and 1,000,000 shares of UNSI Series B preferred
stock).
NOTE D - AMOUNTS DUE FROM OTHER ENTITIES AND INDIVIDUALS
During 1995, the Company determined a total of $230,805 in non-trade notes
receivable, advances, and accrued interest to be of doubtful collectibility,
based on past payment patterns. These amounts, which totaled $147,340 at June
30, 1994 and were increased in 1995 by a net amount of $83,465, were charged to
expense in the year ended June 30, 1995. These notes and advances are all due
on demand and continue to bear interest at approximately 6% per annum.
NOTE E - PROPERTY AND EQUIPMENT
The property and equipment balances at June 30,1995, were as follows:
Estimated
service
lives
(in years)
Computer equipment 5 $ 127,214
Office equipment 5 66,237
Furniture and fixtures 7 115,731
Leasehold improvements 3-4 90,742
399,924
Less accumulated depreciation
and amortization (115,888)
$ 284,036
F-11
<PAGE>
UNSI Corporation and Subsidiary
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
Years ended June 30, 1995 and 1994
NOTE F - OBLIGATIONS TO RELATED PARTIES
1. Notes and Advances Payable to Principal Stockholder
Notes and advances payable to the Company's principal stockholder totaled
$592,321 at June 30, 1995. These amounts bear interest at 5% per annum and are
currently due, based on the conditions for repayment set forth in the note
payable agreements and presumed in the advances. In connection with the issuance
of certain of these advances and notes payable during 1995, the Company issued
to the principal stockholder Series C and Series D warrants for the purchase of
312,150 shares, subject to adjustment as provided for therein, of the Companyis
common stock. (see Note K-5). The principal stockholder has agreed to defer
payment of $438,250 of the amounts due him until such time as the Companyis pay-
in-kind debentures have been converted or redeemed.
2. Short-Term Notes Payable to Debenture Holder
Short-term notes payable of $700,000 were outstanding at June 30, 1995 to
an entity which holds a significant portion of the Companyis 7% pay-in-kind
debentures. These notes payable, which bore interest at 24.5% per annum, were
repaid subsequent to year-end. Accrued interest on these notes payable, which
totaled $48,732 at June 30, 1995, was also paid subsequent to year-end. In
connection with the issuance of certain of these notes payable during 1995, the
Company issued to the debenture holder Series C and Series D warrants for the
purchase of 2,185,049 shares, subject to adjustment as provided for therein, of
the Companyis common stock (see Note K-5).
3. Subordinated Convertible Debenture
The Company issued a 5% subordinated convertible debenture, with an
outstanding balance at June 30, 1995 and 1994, of $331,250, to the principal
stockholder as part of the recapitalization (Note C). The 5% subordinated
convertible debenture, due January 2, 1999, is convertible into 1,650,000 shares
of common stock of the Company and 1,000,000 shares of the Company's Series B
preferred stock, with antidilution provisions applicable. It cannot be
converted in part. The Company has not paid the interest due on this debenture.
However, the principal stockholder has waived the applicable provision of the
debenture related to this previous non-payment and has agreed to payment of
principal as originally set forth in the debenture, with prior and current
interest due on the next interest due date.
F-12
<PAGE>
UNSI Corporation and Subsidiary
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
Years ended June 30, 1995 and 1994
NOTE G - PAY-IN-KIND CONVERTIBLE DEBENTURES
The 7% pay-in-kind convertible debentures, which have an outstanding
balance at June 30, 1995 and 1994, of $1,193,413 and $940,000, respectively, and
are due May 31, 1999, are convertible into shares of common stock of the Company
at the rate of one share of common stock for each $.4524 principal amount of
debenture, with antidilution provisions applicable. Interest on these
debentures can, at the option of the Company, be paid in the form of additional
issuance of similar convertible debentures, provided that no additional pay-in-
kind convertible debentures can be issued to satisfy interest requirements
subsequent to November 30, 1998. The debentures will bear interest at the
greater of 7% or the applicable annually compounded federal rate for debt
instruments (6.125% at June 30, 1995).
These debentures can be converted into common stock at the option of the
debenture holder at any time prior to May 31, 1999, but are subject to mandatory
conversion into shares of the Company's common stock upon the achievement by the
Company of "profitability" as defined in the merger agreement. Generally, the
agreement defines profitability to be equal to the achievement of revenues in
excess of $1,500,000 in any twelve month period (provided that within that
twelve month period, a three month period shall show positive net earnings).
NOTE H - LEASES
1. Capitalized Lease Obligations
The Company leases certain of its operating equipment under leases which
have been capitalized. The leases, which are noncancelable and expire in 1996,
were assumed by the buyer in the sale of IFSI assets, as described more fully at
Note B.
2. Operating Leases
Additionally, the Company leases office space under agreements expiring
through December 1996. These leases, which have been classified for accounting
purposes as operating leases, are subject to customary escalation clauses for
executory costs and operating expenses. As part of the asset sale agreement
discussed more fully at Note B, all obligations associated with these leases
were transferred to the buyer. As of the date of closing, the Company has no
further obligation with respect to these operating leases.
F-13
<PAGE>
UNSI Corporation and Subsidiary
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
Years ended June 30, 1995 and 1994
NOTE I - NOTE PAYABLE TO BANK
The note payable to bank, which had an outstanding balance of $250,000 at
June 30, 1994, was a short-term obligation bearing interest at 7.25%, due on
demand. The note payable to bank was repaid during 1995.
NOTE J - MARKETING COMMISSIONS PAYABLE
The Company had previously entered into a marketing partnership with
another firm, whereby that firm was paid a percentage of the first year revenues
accruing to IFSI from clients referred by the other firm. Additionally, the
other firm owned 30,000 shares of common stock of IFSI, representing 50% of the
total shares of common stock outstanding at the time the marketing partnership
was terminated. The Company has reached an agreement with the other firm to
settle outstanding commissions to be paid under this arrangement, which ceased
in fiscal year 1993, totaling $84,700. Pursuant to this settlement, the
Company's principal stockholder and key members of management of IFSI purchased
the other firm's outstanding shares prior to the recapitalization of the
Company. While final payment of these accrued marketing commissions payable has
not been made, management believes that settlement, as will actually be
concluded, will not materially vary from the amount recorded at June 30, 1995.
NOTE K - STOCKHOLDERS' EQUITY
1. Series B Convertible Preferred Stock
As of December 31, 1993, the Company authorized 1,000,000 shares of Series
B convertible preferred stock. Each of these shares is convertible into one
share of the Company's common stock, at the option of the future holder. No
shares of Series B convertible preferred stock were issued or outstanding at
June 30, 1995.
2. Common Stock
At June 30, 1995, a total of 12,135,158 shares of common stock should have
been reserved for conversion of 5% subordinated and 7% pay-in-kind debentures,
stock options, stock warrants, and the possible future conversion of the
unissued Series B preferred stock. At June 30, 1995, a total of 4,335,158
shares of common stock which should have been reserved were not, as they were
not yet authorized by the Company's Board of Directors.
F-14
<PAGE>
UNSI Corporation and Subsidiary
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
Years ended June 30, 1995 and 1994
NOTE K - STOCKHOLDERS' EQUITY - Continued
3. Stock Options
At January 3, 1994, a total of 500,000 shares of common stock was reserved
under UNSI Corporation's stock option plan. This plan became the Company's plan
upon the Company's recapitalization which occurred on that date. At January 3,
1994, options for 155,000 shares were outstanding and the balance of 345,000
shares was available for future grants. No options were granted in the period
from January 3, 1994 to June 30, 1994. A total of 20,000 options were granted
in the year ended June 30, 1995. No options were exercised or canceled in the
period from January 3, 1994 to June 30, 1995. At June 30, 1995, options for
175,000 shares were outstanding, and the balance of 325,000 shares was available
for future grant.
Option prices range from $.12 to $1.00 per share, the equivalent of not
less than 100% of the fair market value at the date of grant. Upon the exercise
of options, the proceeds are credited to the common stock account to the extent
of the par value of the shares issued, and the proceeds in excess of par value
are credited to the additional contributed capital account.
4. Series A and B Warrants to Purchase Common Shares
During 1994, the Company issued a Series A warrant to one of its directors
for the purchase of 100,000 shares of the Company's common stock. The Series A
warrant, which is exercisable at the option of the holder, expires on December
31, 1998, and carries an exercise price of $.25 per share, with antidilution
provisions applicable. Additionally, the Company reserved 3,750,001 shares of
common stock for issuance upon exercise of three Series B warrants issued in
connection with the Company's recapitalization (see Note C) at June 30, 1994 and
1995. The Series B warrants expire on December 31, 2005, and carry an exercise
price of $.125 per share, with antidilution provisions applicable.
5. Series C and D Warrants to Purchase Common Shares
During 1995, the Company issued Series C and Series D warrants to its
principal stockholder and a debenture holder in consideration for certain notes
and advances payable as described at Note F. The Series C and D warrants
provide for the purchase of 1,617,199 and 880,000 shares, respectively, of the
Company's common stock at an exercise price of $.10 per share. The exercise
price and number of shares of common stock issuable upon exercise of these
warrants is subject to adjustment as more fully described therein. The Series C
and Series D warrants are exercisable at the option of the holder in the period
from January 4, 1995 through January 19, 2000.
F-15
<PAGE>
UNSI Corporation and Subsidiary
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
Years ended June 30, 1995 and 1994
NOTE L - LOSS PER SHARE
Loss per common share is based on the average number of shares of common
stock outstanding, after considering the recapitalization of the Company at
January 3, 1994 (Note C). The exercise of stock options and warrants (Note K)
would be antidilutive.
NOTE M - INCOME TAXES
The Company recognized no income tax expense in 1995 or 1994 due to the
losses it sustained. The statutory federal tax rate was 35% for the year ended
June 30, 1995 and 1994. The Company's effective tax rate was zero in both of
those years due to the net operating losses it experienced. At June 30, 1995,
an operating loss carryforward of approximately $3,590,000, expiring through
2010, is available to offset future taxable income for financial reporting
purposes. Tax regulations limit the utilization of net operating loss
carryforwards. Therefore, the Company may be required to pay income taxes in
future years even though significant carryforward benefits exist.
Deferred tax assets and liabilities at June 30, 1995 and 1994, consisted of
the following:
<TABLE>
<CAPTION>
1995 1994
<S> <C> <C>
Deferred tax assets:
Unearned revenue $ 75,889 $ 88,194
Net operating loss carryforwards 1,400,885 727,701
1,476,774 815,896
Less valuation allowance (1,458,375) (805,326)
Deferred tax liabilities - excess of tax
depreciation
over depreciation recognition for
financial
statement purposes (18,394) (10,569)
Total $ - $ -
</TABLE>
F-16
<PAGE>
UNSI Corporation and Subsidiary
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
Years ended June 30, 1995 and 1994
NOTE M - INCOME TAXES - Continued
The valuation allowance was increased by $653,049 during 1995, based on
management's reevaluation of the likelihood of realization.
The Federal income tax returns of the Company have not been examined in
recent years. Management believes adequate provision has been made for any
adjustments which might be assessed at some future date.
NOTE N - RELATED PARTY TRANSACTIONS
A summary of outstanding amounts due to and from related parties at June
30, 1995 and 1994 is as follows:
<TABLE>
<CAPTION>
1995 1994
<S> <C> <C>
Notes and advances payable to principal stockholder 592,321 528,321
Short-term notes payable to debenture holder 700,000 -
Accrued interest due to related parties 83,643 11,000
5% subordinated convertible debenture due to
principal stockholder 331,250 331,250
</TABLE>
A summary of related party transactions during each of the years in the two-
year period ended June 30, 1995 is as follows:
1995 1994
Interest expense on related party indebtedness 77,854 25,846
NOTE O - LINE OF BUSINESS AND SALES TO MAJOR CUSTOMERS
The Company is engaged in one line of business: the provision of proxy
advisory services. The Company's current client base is geographically
dispersed, but is limited to a relatively small number of institutional
investors and fund managers. No single client represented in excess of 10% of
revenues in 1995 or 1994 (see Note B).
F-17
<PAGE>
Item 8. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure.
On July 5, 1994, the Company engaged Grant Thornton as
its independent auditor, and terminated its relationship with its
former auditor, Abrams & Sprung (the "Former Auditor"). The
foregoing decisions were approved by the Board of Directors of
the Company.
The Former Auditor's reports on the financial
statements for fiscal 1992 and 1993 did not contain an adverse
opinion or a disclaimer of opinion, nor were they qualified or
modified as to uncertainty, audit scope, or accounting
principles. During fiscal 1992 and 1993 and the subsequent
interim period preceding July 5, 1994, there were no
disagreements with the Former Auditor on any matter of accounting
principles or practices, financial statement disclosure, or
auditing scope or procedure, which disagreements, if not resolved
to the satisfaction of the Former Auditor, would have caused it
to make reference to the subject matter of the disagreements in
connection with its report.
Item 9. Directors and Executive Officers of the Registrant.
The information called for by this item is incorporated
herein by reference to the Company's definitive proxy statement
to be filed with the Securities and Exchange Commission not later
than October 28, 1995.
Item 10. Executive Compensation
The information called for by this item is incorporated
herein by reference to the Company's definitive proxy statement
to be filed with the Securities and Exchange Commission not later
than October 28, 1995.
Item 11. Security Ownership of Certain Beneficial Owners and
Management.
The information called for by this item is incorporated
herein by reference to the Company's definitive proxy statement
to be filed with the Securities and Exchange Commission not later
than October 28, 1995.
Item 12. Certain Relationships and Related Transactions
The information called for by this item is incorporated
herein by reference to the Company's definitive proxy statement
to be filed with the Securities and Exchange Commission not later
than October 28, 1995.
-5-
<PAGE>
Item 13. Exhibits and Reports on Form 8-K.
<TABLE>
<CAPTION>
Sequential
Page No.
<S> <C>
(a)Exhibit Index
2.1 - Agreement and Plan of Merger dated as of January 3,
1994 by and among UNSI Corporation, IFSI Acquisition,
Inc. and Investors' Fiduciary Services, Inc. ("IFSI") (1)
2.2 - Agreement of Purchase and Sale dated as of September 5,
1995 by and among Investors' Fiduciary Services, Inc.,
UNSI Corporation, Peter Lusk and CDA Investment Technologies,
Inc. (7)
3.1 - Restated Certificate of Incorporation. (2)
3.2 - By laws of the Registrant. (3)
3.3 - Certificate of Amendment to the Company's Restated Certificate
of Incorporation (4)
4.1 - Series A Warrant. (1)
4.2 - Form of Series B Warrant (including exhibits A through D
thereto). (1)
4.3 - 5% Subordinated Convertible Debenture Due January 2, 1999. (1)
4.4 - Certificate of Designations, Preferences and Rights of the
Company in respect of Series B Preferred Stock. (1)
4.5 - 5% Promissory Note issued by Investors' Fiduciary Services, Inc.
to Peter Lusk (the "IFSI Note"). (1)
4.6 - Guaranty of the IFSI Note. (1)
4.7 - Form of 7% Pay-in-Kind Convertible Debenture due May 31, 1999. (8)
4.8 - Registrant's Series C Warrant (WC-4).
4.9 - Registrant's Series C Warrant (WC-5).
4.10 - Registrant's Series D Warrant (WD-4).
4.11 - Registrant's Series D Warrant (WD-5).
10.1 - Consulting Agreement and Option Agreement between the Company
and David Bondon. (5)
10.2 - 1986 Stock Option Plan, as amended. (6)
10.6 - Demand note issued by Registrant to United States Trust Company
of New York. (8)
21.1 - Subsidiaries of the Registrant. (8)
</TABLE>
(b) Reports on Form 8-K. No reports on Form 8-K were filed
during the last quarter of the period covered by this report.
A Current Report on Form 8-K dated September 5, 1995 was filed
with respect to the sale by the Company's operating subsidiary
of substantially all its assets.
(1) Incorporated by reference to the corresponding exhibit of the
Registrant's Current Report on Form 8-K for January 3, 1994.
(2) Incorporated by reference to exhibit 3(a) of the Registrant's
Registration Statement on Form S-18 (File No. 33-11874).
(3) Incorporated by reference to the exhibit 3(b) of Registrant's
Annual Report on Form 10-K for the fiscal year ended June 30, 1988.
(4) Incorporated by reference to exhibit 3.3 of the Registrant's
Current Report on Form 8-K for May 29, 1991.
(5) Incorporated by reference to exhibit 10(e) of the Registrant's
Registration Statement on Form S-18 (File No. 33-11874).
(6) Incorporated by reference to exhibit 10(j) of the Registrant's
Annual Report on Form 10-K for the year ended June 30, 1988.
(7) Incorporated by reference to exhibit 2.1 of the Registrant's
Current Report on Form 8-K dated September 5, 1995.
(8) Incorporated by reference to the corresponding exhibit of the
Registrant's Annual Report on Form 10-KSB for the
fiscal year ending June 30, 1994.
-6-
<PAGE>
SIGNATURES
In accordance with Section 13 or 15 (d) of the Exchange
Act, the registrant caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
Date: October 11, 1995
UNSI CORPORATION
By: /s/Peter Lusk
Peter Lusk, Chairman of the Board
In accordance with the Exchange Act, this report has
been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
By:/s/Peter Lusk
Peter Lusk, Chairman of the Board of Directors
(Principal Executive Officer and Principal
Financial and Accounting Officer)
Date: October 11, 1995
By:/s/Fred Katz
Fred Katz, Director
Date: October 11, 1995
By:/s/Kenneth L. Dowd, Jr.
Kenneth L. Dowd, Jr., Director
Date: October 11, 1995
-7-
SECURITIES AND EXCHANGE COMMISSION
UNSI CORPORATION
Exhibits to the Annual Report on Form 10-KSB
for the fiscal year ended June 30, 1995
Commission File No. 0-16117
<PAGE>
Exhibit Sequential
Number Description Page No.
4.8 Registrant's Series C Warrant (WC-4).
4.9 Registrant's Series C Warrant (WC-5).
4.10 Registrant's Series D Warrant (WD-4).
4.11 Registrant's Series D Warrant (WD-5).
<PAGE>
Exhibit 4.8
WC-4
NEITHER THIS WARRANT NOR THE SHARES OF COMMON STOCK ISSUABLE UPON
EXERCISE OF THIS WARRANT HAVE BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 (THE "ACT"), AND NEITHER THIS WARRANT NOR
SUCH SHARES MAY BE SOLD, ENCUMBERED OR OTHERWISE TRANSFERRED
EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH
ACT OR AN EXEMPTION FROM SUCH REGISTRATION REQUIREMENT, AND, IF
AN EXEMPTION SHALL BE APPLICABLE, THE HOLDER SHALL HAVE DELIVERED
AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY THAT SUCH
REGISTRATION IS NOT REQUIRED.
Void after 5:00 p.m. New York City time, on January 19, 2000.
Subject to early termination as provided in Section 8(d) herein.
SERIES C WARRANT TO PURCHASE COMMON STOCK
OF
UNSI CORPORATION
This is to certify that, FOR VALUE RECEIVED, M&A Investments,
Inc. or assigns ("Holder") , is entitled to purchase, subject to
the provisions of this Warrant, from UNSI Corporation, a Delaware
corporation (the "Company"), at an exercise price per share of
ten cents ($.10), 1,415,049 shares (subject to adjustment as set
forth in the next sentence and as otherwise set forth herein) of
common stock, par value $.01 per share, of the Company (the
"Common Stock") at any time during the period (the "Exercise
Period") commencing after January 4, 1997 and prior to 5:00 p.m.
New York City time, on January 19, 2000; provided, however, that
if such date is a day on which banking institutions in the State
of New York are authorized by law to close, then on the next
succeeding day which shall not be such a day. In the event that
one or more of the Company's Series B Warrants and/or 7% PIK
Debentures due 1999 (the "PIK Debentures") are not retired,
redeemed, cancelled, satisfied or otherwise terminated prior to
the exercise of this Warrant, the number of shares issuable upon
exercise of this Warrant shall be adjusted so that this Warrant
shall be exercisable to acquire 21.02% of the UNSI Common Stock
outstanding as of the date hereof on a fully diluted basis. The
term "fully diluted basis" means after giving effect to the
exercise or conversion of all UNSI securities outstanding as of
the date hereof (other than the Series B Warrants and/or PIK
Debentures that are retired, redeemed, satisfied, cancelled or
otherwise terminated prior to the exercise of this Warrant and
the Series C Warrant denominated WC-5 and the Series D Redeemable
Warrant to Purchase Common Stock of UNSI Corporation) convertible
or exercisable into UNSI Common Stock. Notwithstanding anything
to the contrary herein, this Warrant may be exercised after
December 18, 1995, in the event that
-1-
<PAGE>
the Company shall have received prior to the date of
exercise an opinion of its counsel to the effect that such
exercise will not adversely effect the Company's ability to
use its net operating losses. The number of shares of Common
Stock to be received upon the exercise of this Warrant and
the price to be paid for a share of Common Stock may be
adjusted from time to time as hereinafter set forth. The
shares of Common Stock deliverable upon such exercise, and
as adjusted from time to time, are hereinafter sometimes
referred to as "Warrant Shares," and the exercise price for
the purchase of a share of Common Stock pursuant to this
Warrant in effect at any time and as adjusted from time to
time is hereby referred to as the "Exercise Price".
1. EXERCISE OF WARRANT. This Warrant may be
exercised in whole at any time or in part from time to time
during the Exercise Period by presentation and surrender hereof
to the Company at its principal office, or at the office of its
stock transfer agent, if any, with the Purchase Form annexed
hereto as Exhibit A duly executed and accompanied by payment of
the Exercise Price for the number of shares specified in such
form. If this Warrant should be exercised in part only, the
Company shall, upon surrender of this Warrant for cancellation,
execute and deliver a new Warrant evidencing the rights of the
Holder hereof to purchase the balance of the shares purchasable
hereunder. Upon receipt by the Company of this Warrant at its
office, or by the stock transfer agent of the Company at its
office, in proper form for exercise, the Holder shall be deemed
to be the holder of record of the shares of Common Stock issuable
upon such exercise, notwithstanding that the stock transfer books
of the Company shall then be closed or that certificates
representing such shares of Common Stock shall not then be
actually delivered to the Holder.
2. RESERVATION OF SHARES. The Company hereby agrees
that at all times there shall be reserved for issuance and/or
delivery upon exercise of this Warrant such number of shares of
its Common Stock as shall be required for issuance and delivery
upon exercise of this Warrant.
3. FRACTIONAL SHARES. No fractional shares or script
representing fractional shares shall be issued upon the exercise
of this Warrant.
4. EXCHANGE, TRANSFER, ASSIGNMENT OR LOSS OF WARRANT.
This Warrant is exchangeable, without expense, at the option of
the Holder, upon presentation and surrender hereof to the Company
or at the office of its stock transfer agent, if any, for other
warrants of different denominations entitling the holder thereof
to purchase in the aggregate the same number of shares of Common
Stock purchasable hereunder. Subject to the provisions of
Section 9 of this Warrant, upon surrender of this Warrant to the
Company or at the office of its stock transfer agent, if any,
with the Assignment Form annexed hereto as Exhibit A duly
executed and funds sufficient
-2-
<PAGE>
to pay any transfer tax, the Company shall, without
charge, execute and deliver a new Warrant in the name of
the assignee named in such instrument of assignment and
this Warrant shall promptly be cancelled. This Warrant
may be divided or combined with other Warrants which carry
the same rights upon presentation hereof at the office of
the Company or at the office of its stock transfer agent, if
any, together with a written notice specifying the
names and denominations in which new Warrants are to be
issued and signed by the Holder hereof. The term "Warrant"
as used herein includes any Warrants into which this Warrant
may be divided or exchanged. Upon receipt by the Company of
evidence satisfactory to it of the loss, theft, destruction
or mutilation of this Warrant, and (in the case of loss,
theft or destruction) of reasonably satisfactory
indemnification, and upon surrender and cancellation of this
Warrant, if mutilated, the Company will execute and
deliver a new Warrant of like tenor and date.
5. RIGHTS OF THE HOLDER. The Holder shall not, by
virtue of this Warrant, be entitled to any rights of a
stockholder in the Company, either at law or equity, and the
rights of the Holder are limited to those expressed in the
Warrant and are not enforceable against the Company except to the
extent set forth herein.
6. ADJUSTMENT OF EXERCISE PRICE. In case the Company
shall, (a) pay a dividend or make a distribution on its shares of
Common Stock in shares of Common Stock (b) subdivide or
reclassify its outstanding Common Stock into a greater number of
shares, or (c) combine or reclassify its outstanding Common Stock
into a smaller number of shares, the Exercise Price in effect at
the time of the record date for such dividend or distribution or
of the effective date of such subdivision, combination or
reclassification shall be proportionately adjusted so that the
Holder of this Warrant exercised after such date shall be
entitled to receive the aggregate number and kind of shares
which, if this Warrant had been exercised immediately prior to
such time, he would have owned upon such exercise and been
entitled to receive upon such dividend, subdivision, combination
or reclassification. Such adjustment shall be made successively
whenever any event listed in this Section 6 shall occur. All
calculations under this Section 6 shall be made to the nearest
cent or to the nearest share, as the case may be.
7. RECLASSIFICATION, REORGANIZATION OR MERGER. If
any capital reorganization or reclassification of the capital
stock of the Company or any consolidation or merger of the
Company with another corporation, or the sale of all or
substantially all of its assets to another corporation shall be
effected in such a way (including, without limitation, by way of
consolidation or merger) that holders of Common Stock shall be
entitled to receive stock, securities or assets with respect to
or in exchange for Common Stock, then, as a condition of such
reorganization,
-3-
<PAGE>
reclassification, consolidation, merger or sale, adequate
provision shall be made whereby the Holder of this
Warrant shall thereafter have the right to receive, upon
the basis and upon the terms and conditions specified herein
and in lieu of the shares of Common Stock of the Company then
receivable upon the exercise of this Warrant, such
shares of stock, securities or assets as may be issued or
payable with respect to or in exchange for a number of
outstanding shares of such Common Stock equal to the number
of shares of such stock then receivable had such
reorganization, reclassification, consolidation, merger or
sale not taken place, and in any such case appropriate
provision shall be made with respect to the rights and
interests of such holder to the end that the provisions
hereof shall thereafter be applicable, as nearly
practicable, in relation to any shares of stock, securities
or assets thereafter deliverable upon the exercise of this
Warrant. In the event of a merger or consolidation of the
Company as a result of which a greater or lesser number of
shares of common stock of the surviving corporation is
issuable to holders of Common Stock of the Company outstanding
immediately prior to such merger or consolidation, the
Exercise Price in effect immediately prior to such merger or
consolidation shall be adjusted in the same manner as
though there were a subdivision or combination of the
outstanding shares of Common Stock of the Company.
8. REGISTRATION UNDER THE SECURITIES ACT OF 1933.
(a) For the four year period commencing after
January 19, 1996 (subject to Section 8(f)), the Company shall
advise the Holder of Warrants or the Warrant Shares or any then
holder of the Warrants or Warrant Shares (such persons being
collectively referred to herein as "holders") by written notice
at least thirty (30) days prior to the filing of any registration
statement under the Act (other than a registration statement on
Form S-4, Form S-8 or subsequent similar forms) covering
securities of the Company and will upon the request of any such
holder, include in any such registration statement such
information as may be required to permit a public offering of the
Warrant Shares; provided, however, that if the registration
statement relates to a public offering by the Company of its
securities and the managing underwriters advise the holder that
the inclusion in the offering of securities being sold by the
holder would adversely affect the ability of the Company to
complete the public offering (and other selling stockholders, if
any, are similarly advised), then the holder will agree to reduce
the number of Warrant Shares to be registered to a number of
shares which shall be not less than ten percent (10%) of the
number of shares being offered by the Company and the holder will
further agree not to make any sales of the securities so included
for a period of one hundred eighty (180) days from the effective
date of such registration statement. The Company shall keep such
registration statement current for a period of up to nine (9)
months from the conclusion of such one hundred eighty (180) day
period; provided, however, that the Company shall
-4-
<PAGE>
not be required to keep the registration statement
effective beyond the date after which the registration
statement must be amended to include updated audited
financial statements. The Company shall supply prospectuses,
qualify the Warrants and the Warrant Shares for sale in
such states as any such holder reasonably designates and
furnish indemnification in the manner as set forth in
Section 8(b)(ii). Such holders shall furnish information
and provide indemnification as set forth in Section 8(b)(ii).
(b) The following provisions shall also be
applicable:
(i) The Company shall bear the entire cost
and expense of any registration of securities initiated by it
under Section 8 of this Warrant. Any holder whose Warrant Shares
are included in any such registration statement pursuant to this
Section 8 shall, however, bear the fees of his own counsel and
accountants and any transfer taxes or underwriting discounts or
commissions applicable to the Warrant Shares sold by him pursuant
thereto.
(ii) The Company shall indemnify and hold
harmless each such holder and each underwriter, within the
meaning of the Act, who may purchase from or sell for any such
holder any Warrants and/or Warrant Shares from and against any
and any losses, claims, damages and liabilities caused by any
untrue statement of a material fact contained in the Registration
Statement or any post-effective amendment thereto or any
registration statement under the Act or any prospectus included
therein required to be filed or furnished by reason of this
Section 8 or any application or other filing under any state
securities law caused by any omission to state therein a material
fact required to be stated therein or necessary to make the
statements therein not misleading to which such holder or any
such underwriter or any of them may become subject under the Act,
the Securities Exchange Act of 1934, as amended, or other Federal
or state statutory law or regulation, except insofar as such
losses, claims, damages or liabilities are caused by any such
untrue statement or omission based upon information furnished or
required to be furnished to the Company by any such holder or
underwriter expressly for use therein, which indemnification
shall include each person, if any, who controls any such
underwriter within the meaning of such Act; provided, however,
that any such holder or underwriter shall at the same time
indemnify the Company, its directors, each officer signing the
related registration statement, each person, if any, who controls
the Company within the meaning of such Act and each other Holder,
from and against any and all losses, claims, damages and
liabilities caused by any untrue statement of a material fact
contained in any registration statement or any prospectus
required to be filed or furnished by reason of this Section 8 or
caused by any omission to state therein a material fact required
to be stated therein or necessary to make the statements therein
not misleading,
-5-
<PAGE>
insofar as such losses, claims, damages or liabilities
are caused by any untrue statement or omission is based
upon information furnished to the Company by any such
holder or underwriter expressly for use therein.
(c) The Company's agreements with respect to
Warrants or Warrant Shares in this Section 8 shall continue in
effect regardless of the exercise and surrender of this Warrant.
(d) Notwithstanding any contrary provisions of
this Section 8 the holder of this Warrant may, at its election,
include this Warrant as well as the Warrant Shares issuable upon
exercise of this Warrant in any registration statement filed
pursuant to this Section 8; provided, however, that in the event
that both (i) this Warrant shall be included in any such
registration statement and (ii) this Warrant shall be transferred
at a time subsequent to the effective date of such registration
statement at which time the registration statement is current,
then this Warrant shall cease to be exercisable after 5:00 P. M.,
New York City time on the thirtieth (30th) day after the date of
such transfer or, if such thirtieth (30th) day shall be a day on
which banking institutions in the State of New York are
authorized by law to close, then on the next succeeding day which
shall not be such a day. In the event that any registration
statement referred to in the preceding sentence shall cease to be
current during the thirty (30) day period referred to above,
then, notwithstanding the preceding sentence, the exerciseability
of this Warrant shall not be affected by the transfer of this
Warrant. Nothing in this Warrant shall be construed in any
manner to require the Company to take steps to create or provide
for a public market for the Warrants.
9. TRANSFER TO COMPLY WITH THE SECURITIES ACT OF
1933. This Warrant or the Warrant Shares or any other security
issued or issuable upon exercise of this Warrant may not be sold
or otherwise disposed of except as follows:
(a) To a person who, in the opinion of counsel
for the Company, is a person to whom this Warrant or Warrant
Shares may legally be transferred without registration and
without the delivery of a current prospectus under the Act with
respect thereto against receipt of an agreement of such person to
comply with the provisions of this Section 9 with respect to any
resale or other disposition of such securities which agreement
shall be reasonably satisfactory in form and substance to the
Company and its counsel; or
-6-
<PAGE>
(b) to any person upon delivery of a prospectus
then meeting the requirements of the Act relating to such
securities and the offering thereof for such sale or disposition.
Dated: June 28, 1995
UNSI CORPORATION
By:________________________________
Peter A. Lusk
Chairman of the Board
-7-
<PAGE>
Exhibit A
PURCHASE FORM
Dated , 19
The undersigned hereby irrevocably elects to exercise the
within Warrant to the extent of purchasing
shares of Common Stock and hereby makes payment of
in payment of the actual exercise price thereof.
INSTRUCTIONS FOR REGISTRATION OF STOCK
Name
(Please typewrite or print in block letters)
Signature
ASSIGNMENT FORM
FOR VALUE RECEIVED,
hereby sells, assigns and transfer unto
Name
(Please typewrite or print in block letters)
Address
Social Security or Employer Identification No.
the right to purchase Common Stock represented by this Warrant to
the extent of shares as to which such right is
exercisable and does hereby irrevocably constitute and appoint
Attorney, to transfer the same on the
books of the Company with full power of substitution in the
premises.
Dated: , 19
Signature
Signature Guaranteed
-8-
<PAGE>
Exhibit 4.9
WC-5
NEITHER THIS WARRANT NOR THE SHARES OF COMMON STOCK ISSUABLE UPON
EXERCISE OF THIS WARRANT HAVE BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 (THE "ACT"), AND NEITHER THIS WARRANT NOR
SUCH SHARES MAY BE SOLD, ENCUMBERED OR OTHERWISE TRANSFERRED
EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH
ACT OR AN EXEMPTION FROM SUCH REGISTRATION REQUIREMENT, AND, IF
AN EXEMPTION SHALL BE APPLICABLE, THE HOLDER SHALL HAVE DELIVERED
AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY THAT SUCH
REGISTRATION IS NOT REQUIRED.
Void after 5:00 p.m. New York City time, on January 19, 2000.
Subject to early termination as provided in Section 8(d) herein.
SERIES C WARRANT TO PURCHASE COMMON STOCK
OF
UNSI CORPORATION
This is to certify that, FOR VALUE RECEIVED, Peter Lusk or
assigns ("Holder") , is entitled to purchase, subject to the
provisions of this Warrant, from UNSI Corporation, a Delaware
corporation (the "Company"), at an exercise price per share of
ten cents ($.10), 202,150 shares (subject to adjustment as set
forth in the next sentence and as otherwise set forth herein) of
common stock, par value $.01 per share, of the Company (the
"Common Stock") at any time during the period (the "Exercise
Period") commencing after January 4, 1997 and prior to 5:00 p.m.
New York City time, on January 19, 2000; provided, however, that
if such date is a day on which banking institutions in the State
of New York are authorized by law to close, then on the next
succeeding day which shall not be such a day. In the event that
one or more of the Company's Series B Warrants and/or 7% PIK
Debentures due 1999 (the "PIK Debentures") are not retired,
redeemed, cancelled, satisfied or otherwise terminated prior to
the exercise of this Warrant, the number of shares issuable upon
exercise of this Warrant shall be adjusted so that this Warrant
shall be exercisable to acquire 3.00% of the UNSI Common Stock
outstanding as of the date hereof on a fully diluted basis. The
term "fully diluted basis" means after giving effect to the
exercise or conversion of all UNSI securities outstanding as of
the date hereof (other than the Series B Warrants and/or PIK
Debentures that are retired, redeemed, satisfied, cancelled or
otherwise terminated prior to the exercise of this Warrant and
the Series C Warrant denominated WC-4 and the Series D Redeemable
Warrant to Purchase Common Stock of UNSI Corporation) convertible
or exercisable into UNSI Common Stock. Notwithstanding anything
to the contrary herein, this Warrant may be exercised after
December 18, 1995, in the event that the Company shall have
received prior
-1-
<PAGE>
to the date of exercise an opinion of its counsel to the
effect that such exercise will not adversely effect the
Company's ability to use its net operating losses. The number
of shares of Common Stock to be received upon the exercise
of this Warrant and the price to be paid for a share of
Common Stock may be adjusted from time to time as
hereinafter set forth. The shares of Common Stock
deliverable upon such exercise, and as adjusted from time to
time, are hereinafter sometimes referred to as "Warrant
Shares," and the exercise price for the purchase of a share of
Common Stock pursuant to this Warrant in effect at any time
and as adjusted from time to time is hereby referred to as
the "Exercise Price".
1. EXERCISE OF WARRANT. This Warrant may be
exercised in whole at any time or in part from time to time
during the Exercise Period by presentation and surrender hereof
to the Company at its principal office, or at the office of its
stock transfer agent, if any, with the Purchase Form annexed
hereto as Exhibit A duly executed and accompanied by payment of
the Exercise Price for the number of shares specified in such
form. If this Warrant should be exercised in part only, the
Company shall, upon surrender of this Warrant for cancellation,
execute and deliver a new Warrant evidencing the rights of the
Holder hereof to purchase the balance of the shares purchasable
hereunder. Upon receipt by the Company of this Warrant at its
office, or by the stock transfer agent of the Company at its
office, in proper form for exercise, the Holder shall be deemed
to be the holder of record of the shares of Common Stock issuable
upon such exercise, notwithstanding that the stock transfer books
of the Company shall then be closed or that certificates
representing such shares of Common Stock shall not then be
actually delivered to the Holder.
2. RESERVATION OF SHARES. The Company hereby agrees
that at all times there shall be reserved for issuance and/or
delivery upon exercise of this Warrant such number of shares of
its Common Stock as shall be required for issuance and delivery
upon exercise of this Warrant.
3. FRACTIONAL SHARES. No fractional shares or script
representing fractional shares shall be issued upon the exercise
of this Warrant.
4. EXCHANGE, TRANSFER, ASSIGNMENT OR LOSS OF WARRANT.
This Warrant is exchangeable, without expense, at the option of
the Holder, upon presentation and surrender hereof to the Company
or at the office of its stock transfer agent, if any, for other
warrants of different denominations entitling the holder thereof
to purchase in the aggregate the same number of shares of Common
Stock purchasable hereunder. Subject to the provisions of
Section 9 of this Warrant, upon surrender of this Warrant to the
Company or at the office of its stock transfer agent, if any,
with the Assignment Form annexed hereto as Exhibit A duly
executed and funds sufficient to pay any transfer tax, the
Company shall, without charge, execute
-2-
<PAGE>
and deliver a new Warrant in the name of the assignee
named in such instrument of assignment and this Warrant
shall promptly be cancelled. This Warrant may be divided
or combined with other Warrants which carry the same rights
upon presentation hereof at the office of the Company or at
the office of its stock transfer agent, if any, together with
a written notice specifying the names and denominations
in which new Warrants are to be issued and signed by the
Holder hereof. The term "Warrant" as used herein includes any
Warrants into which this Warrant may be divided or exchanged.
Upon receipt by the Company of evidence satisfactory to it of
the loss, theft, destruction or mutilation of this Warrant,
and (in the case of loss, theft or destruction) of
reasonably satisfactory indemnification, and upon surrender
and cancellation of this Warrant, if mutilated, the
Company will execute and deliver a new Warrant of like tenor
and date.
5. RIGHTS OF THE HOLDER. The Holder shall not, by
virtue of this Warrant, be entitled to any rights of a
stockholder in the Company, either at law or equity, and the
rights of the Holder are limited to those expressed in the
Warrant and are not enforceable against the Company except to the
extent set forth herein.
6. ADJUSTMENT OF EXERCISE PRICE. In case the Company
shall, (a) pay a dividend or make a distribution on its shares of
Common Stock in shares of Common Stock (b) subdivide or
reclassify its outstanding Common Stock into a greater number of
shares, or (c) combine or reclassify its outstanding Common Stock
into a smaller number of shares, the Exercise Price in effect at
the time of the record date for such dividend or distribution or
of the effective date of such subdivision, combination or
reclassification shall be proportionately adjusted so that the
Holder of this Warrant exercised after such date shall be
entitled to receive the aggregate number and kind of shares
which, if this Warrant had been exercised immediately prior to
such time, he would have owned upon such exercise and been
entitled to receive upon such dividend, subdivision, combination
or reclassification. Such adjustment shall be made successively
whenever any event listed in this Section 6 shall occur. All
calculations under this Section 6 shall be made to the nearest
cent or to the nearest share, as the case may be.
7. RECLASSIFICATION, REORGANIZATION OR MERGER. If
any capital reorganization or reclassification of the capital
stock of the Company or any consolidation or merger of the
Company with another corporation, or the sale of all or
substantially all of its assets to another corporation shall be
effected in such a way (including, without limitation, by way of
consolidation or merger) that holders of Common Stock shall be
entitled to receive stock, securities or assets with respect to
or in exchange for Common Stock, then, as a condition of such
reorganization, reclassification, consolidation, merger or sale,
adequate provision
-3-
<PAGE>
shall be made whereby the Holder of this Warrant shall
thereafter have the right to receive, upon the basis and
upon the terms and conditions specified herein and in lieu
of the shares of Common Stock of the Company then receivable
upon the exercise of this Warrant, such shares of
stock, securities or assets as may be issued or payable with
respect to or in exchange for a number of outstanding shares
of such Common Stock equal to the number of shares of such
stock then receivable had such reorganization,
reclassification, consolidation, merger or sale not taken
place, and in any such case appropriate provision shall
be made with respect to the rights and interests of such
holder to the end that the provisions hereof shall
thereafter be applicable, as nearly practicable, in relation
to any shares of stock, securities or assets thereafter
deliverable upon the exercise of this Warrant. In the event
of a merger or consolidation of the Company as a result of
which a greater or lesser number of shares of common
stock of the surviving corporation is issuable to holders
of Common Stock of the Company outstanding immediately prior
to such merger or consolidation, the Exercise Price in
effect immediately prior to such merger or consolidation
shall be adjusted in the same manner as though there were
a subdivision or combination of the outstanding shares of
Common Stock of the Company.
8. REGISTRATION UNDER THE SECURITIES ACT OF 1933.
(a) For the four year period commencing after
January 19, 1996 (subject to Section 8(f)), the Company shall
advise the Holder of Warrants or the Warrant Shares or any then
holder of the Warrants or Warrant Shares (such persons being
collectively referred to herein as "holders") by written notice
at least thirty (30) days prior to the filing of any registration
statement under the Act (other than a registration statement on
Form S-4, Form S-8 or subsequent similar forms) covering
securities of the Company and will upon the request of any such
holder, include in any such registration statement such
information as may be required to permit a public offering of the
Warrant Shares; provided, however, that if the registration
statement relates to a public offering by the Company of its
securities and the managing underwriters advise the holder that
the inclusion in the offering of securities being sold by the
holder would adversely affect the ability of the Company to
complete the public offering (and other selling stockholders, if
any, are similarly advised), then the holder will agree to reduce
the number of Warrant Shares to be registered to a number of
shares which shall be not less than ten percent (10%) of the
number of shares being offered by the Company and the holder will
further agree not to make any sales of the securities so included
for a period of one hundred eighty (180) days from the effective
date of such registration statement. The Company shall keep such
registration statement current for a period of up to nine (9)
months from the conclusion of such one hundred eighty (180) day
period; provided, however, that the Company shall not be required
to keep the registration statement effective beyond
-4-
<PAGE>
the date after which the registration statement must be
amended to include updated audited financial statements. The
Company shall supply prospectuses, qualify the Warrants and
the Warrant Shares for sale in such states as any such
holder reasonably designates and furnish indemnification in
the manner as set forth in Section 8(b)(ii). Such
holders shall furnish information and provide
indemnification as set forth in Section 8(b)(ii).
(b) The following provisions shall also be
applicable:
(i) The Company shall bear the entire cost
and expense of any registration of securities initiated by it
under Section 8 of this Warrant. Any holder whose Warrant Shares
are included in any such registration statement pursuant to this
Section 8 shall, however, bear the fees of his own counsel and
accountants and any transfer taxes or underwriting discounts or
commissions applicable to the Warrant Shares sold by him pursuant
thereto.
(ii) The Company shall indemnify and hold
harmless each such holder and each underwriter, within the
meaning of the Act, who may purchase from or sell for any such
holder any Warrants and/or Warrant Shares from and against any
and any losses, claims, damages and liabilities caused by any
untrue statement of a material fact contained in the Registration
Statement or any post-effective amendment thereto or any
registration statement under the Act or any prospectus included
therein required to be filed or furnished by reason of this
Section 8 or any application or other filing under any state
securities law caused by any omission to state therein a material
fact required to be stated therein or necessary to make the
statements therein not misleading to which such holder or any
such underwriter or any of them may become subject under the Act,
the Securities Exchange Act of 1934, as amended, or other Federal
or state statutory law or regulation, except insofar as such
losses, claims, damages or liabilities are caused by any such
untrue statement or omission based upon information furnished or
required to be furnished to the Company by any such holder or
underwriter expressly for use therein, which indemnification
shall include each person, if any, who controls any such
underwriter within the meaning of such Act; provided, however,
that any such holder or underwriter shall at the same time
indemnify the Company, its directors, each officer signing the
related registration statement, each person, if any, who controls
the Company within the meaning of such Act and each other Holder,
from and against any and all losses, claims, damages and
liabilities caused by any untrue statement of a material
fact contained in any registration statement or any
prospectus required to be filed or furnished by reason of
this Section 8 or caused by any omission to state therein a
material fact required to be stated therein or necessary to
make the statements therein not misleading, insofar as
such losses, claims, damages or liabilities are caused
-5-
<PAGE>
by any untrue statement or omission is based upon
information furnished to the Company by any such holder or
underwriter expressly for use therein.
(c) The Company's agreements with respect to
Warrants or Warrant Shares in this Section 8 shall continue in
effect regardless of the exercise and surrender of this Warrant.
(d) Notwithstanding any contrary provisions of
this Section 8 the holder of this Warrant may, at its election,
include this Warrant as well as the Warrant Shares issuable upon
exercise of this Warrant in any registration statement filed
pursuant to this Section 8; provided, however, that in the event
that both (i) this Warrant shall be included in any such
registration statement and (ii) this Warrant shall be transferred
at a time subsequent to the effective date of such registration
statement at which time the registration statement is current,
then this Warrant shall cease to be exercisable after 5:00 P. M.,
New York City time on the thirtieth (30th) day after the date of
such transfer or, if such thirtieth (30th) day shall be a day on
which banking institutions in the State of New York are
authorized by law to close, then on the next succeeding day which
shall not be such a day. In the event that any registration
statement referred to in the preceding sentence shall cease to be
current during the thirty (30) day period referred to above,
then, notwithstanding the preceding sentence, the exerciseability
of this Warrant shall not be affected by the transfer of this
Warrant. Nothing in this Warrant shall be construed in any
manner to require the Company to take steps to create or provide
for a public market for the Warrants.
9. TRANSFER TO COMPLY WITH THE SECURITIES ACT OF
1933. This Warrant or the Warrant Shares or any other security
issued or issuable upon exercise of this Warrant may not be sold
or otherwise disposed of except as follows:
(a) To a person who, in the opinion of counsel
for the Company, is a person to whom this Warrant or Warrant
Shares may legally be transferred without registration and
without the delivery of a current prospectus under the Act with
respect thereto against receipt of an agreement of such person to
comply with the provisions of this Section 9 with respect to any
resale or other disposition of such securities which agreement
shall be reasonably satisfactory in form and substance to the
Company and its counsel; or
-6-
<PAGE>
(b) to any person upon delivery of a prospectus
then meeting the requirements of the Act relating to such
securities and the offering thereof for such sale or disposition.
Dated: June 28, 1995
UNSI CORPORATION
By:________________________________
Peter A. Lusk
Chairman of the Board
-7-
<PAGE>
Exhibit A
PURCHASE FORM
Dated , 19
The undersigned hereby irrevocably elects to exercise the
within Warrant to the extent of purchasing
shares of Common Stock and hereby makes payment of
in payment of the actual exercise price thereof.
INSTRUCTIONS FOR REGISTRATION OF STOCK
Name
(Please typewrite or print in block letters)
Signature
ASSIGNMENT FORM
FOR VALUE RECEIVED,
hereby sells, assigns and transfer unto
Name
(Please typewrite or print in block letters)
Address
Social Security or Employer Identification No.
the right to purchase Common Stock represented by this Warrant to
the extent of shares as to which such right is
exercisable and does hereby irrevocably constitute and appoint
Attorney, to transfer the same on the
books of the Company with full power of substitution in the
premises.
Dated: , 19
Signature
Signature Guaranteed
-8-
<PAGE>
Exhibit 4.10
WD-4
NEITHER THIS WARRANT NOR THE SHARES OF COMMON STOCK ISSUABLE UPON
EXERCISE OF THIS WARRANT HAVE BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 (THE "ACT"), AND NEITHER THIS WARRANT NOR
SUCH SHARES MAY BE SOLD, ENCUMBERED OR OTHERWISE TRANSFERRED
EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH
ACT OR AN EXEMPTION FROM SUCH REGISTRATION REQUIREMENT, AND, IF
AN EXEMPTION SHALL BE APPLICABLE, THE HOLDER SHALL HAVE DELIVERED
AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY THAT SUCH
REGISTRATION IS NOT REQUIRED.
Void after 5:00 p.m. New York City time, on January 19, 2000.
Subject to early termination as provided in Sections 8(d) and 10
herein.
SERIES D REDEEMABLE WARRANT TO PURCHASE COMMON STOCK
OF
UNSI CORPORATION
This is to certify that, FOR VALUE RECEIVED, M&A Investments,
Inc. or assigns ("Holder") , is entitled to purchase, subject to
the provisions of this Warrant, from UNSI Corporation, a Delaware
corporation (the "Company"), at an exercise price per share of
ten cents ($.10), 770,000 shares (subject to adjustment as set
forth in the next sentence and as otherwise set forth herein) of
common stock, par value $.01 per share, of the Company (the
"Common Stock") at any time during the period (the "Exercise
Period") commencing after January 4, 1997 and prior to 5:00 p.m.
New York City time, on January 19, 2000; provided, however, that
if such date is a day on which banking institutions in the State
of New York are authorized by law to close, then on the next
succeeding day which shall not be such a day. In the event that
one or more of the Company's Series B Warrants and/or 7% PIK
Debentures due 1999 (the "PIK Debentures") are not retired,
redeemed, cancelled or otherwise terminated prior to the exercise
of this Warrant, the number of shares issuable upon exercise of
this Warrant shall be adjusted so that this Warrant shall be
exercisable to acquire 10.12% of the UNSI Common Stock
outstanding as of the date hereof on a fully diluted basis. The
term "fully diluted basis" means after giving effect to the
exercise or conversion of all UNSI securities outstanding as of
the date hereof (other than the Company's Series B Warrants
and/or PIK Debentures that are retired, redeemed, cancelled or
otherwise terminated prior to the date of exercise of this
Warrant and the Series D Redeemable Warrant (denominated WD-5))
convertible or exercisable into UNSI Common Stock.
Notwithstanding anything to the contrary herein, this Warrant may
be exercised after December 18, 1995, in the event that
-1-
the Company shall have received prior to the date of
exercise an opinion of its counsel to the effect that such
exercise will not adversely effect the Company's ability to
use its net operating losses. The number of shares of Common
Stock to be received upon the exercise of this Warrant and the
price to be paid for a share of Common Stock may be adjusted
from time to time as hereinafter set forth. The shares of
Common Stock deliverable upon such exercise, and as
adjusted from time to time, are hereinafter sometimes
referred to as "Warrant Shares," and the exercise price for
the purchase of a share of Common Stock pursuant to this
Warrant in effect at any time and as adjusted from time to
time is hereby referred to as the "Exercise Price".
1. EXERCISE OF WARRANT. This Warrant may be
exercised in whole at any time or in part from time to time
during the Exercise Period by presentation and surrender hereof
to the Company at its principal office, or at the office of its
stock transfer agent, if any, with the Purchase Form annexed
hereto as Exhibit A duly executed and accompanied by payment of
the Exercise Price for the number of shares specified in such
form. If this Warrant should be exercised in part only, the
Company shall, upon surrender of this Warrant for cancellation,
execute and deliver a new Warrant evidencing the rights of the
Holder hereof to purchase the balance of the shares purchasable
hereunder. Upon receipt by the Company of this Warrant at its
office, or by the stock transfer agent of the Company at its
office, in proper form for exercise, the Holder shall be deemed
to be the holder of record of the shares of Common Stock issuable
upon such exercise, notwithstanding that the stock transfer books
of the Company shall then be closed or that certificates
representing such shares of Common Stock shall not then be
actually delivered to the Holder.
2. RESERVATION OF SHARES. The Company hereby agrees
that at all times there shall be reserved for issuance and/or
delivery upon exercise of this Warrant such number of shares of
its Common Stock as shall be required for issuance and delivery
upon exercise of this Warrant.
3. FRACTIONAL SHARES. No fractional shares or script
representing fractional shares shall be issued upon the exercise
of this Warrant.
4. EXCHANGE, TRANSFER, ASSIGNMENT OR LOSS OF WARRANT.
This Warrant is exchangeable, without expense, at the option of
the Holder, upon presentation and surrender hereof to the Company
or at the office of its stock transfer agent, if any, for other
warrants of different denominations entitling the holder thereof
to purchase in the aggregate the same number of shares of Common
Stock purchasable hereunder. Subject to the provisions of
Section 9 of this Warrant, upon surrender of this Warrant to the
Company or at the office of its stock transfer agent, if any,
with the Assignment Form annexed hereto as Exhibit A duly
executed and funds sufficient
-2-
<PAGE>
to pay any transfer tax, the Company shall, without
charge, execute and deliver a new Warrant in the name of
the assignee named in such instrument of assignment and
this Warrant shall promptly be cancelled. This Warrant
may be divided or combined with other Warrants which carry
the same rights upon presentation hereof at the office of
the Company or at the office of its stock transfer agent, if
any, together with a written notice specifying the
names and denominations in which new Warrants are to be
issued and signed by the Holder hereof. The term "Warrant"
as used herein includes any Warrants into which this Warrant
may be divided or exchanged. Upon receipt by the Company of
evidence satisfactory to it of the loss, theft, destruction
or mutilation of this Warrant, and (in the case of loss,
theft or destruction) of reasonably satisfactory
indemnification, and upon surrender and cancellation of this
Warrant, if mutilated, the Company will execute and
deliver a new Warrant of like tenor and date.
5. RIGHTS OF THE HOLDER. The Holder shall not, by
virtue of this Warrant, be entitled to any rights of a
stockholder in the Company, either at law or equity, and the
rights of the Holder are limited to those expressed in the
Warrant and are not enforceable against the Company except to the
extent set forth herein.
6. ADJUSTMENT OF EXERCISE PRICE. In case the Company
shall, (a) pay a dividend or make a distribution on its shares of
Common Stock in shares of Common Stock (b) subdivide or
reclassify its outstanding Common Stock into a greater number of
shares, or (c) combine or reclassify its outstanding Common Stock
into a smaller number of shares, the Exercise Price in effect at
the time of the record date for such dividend or distribution or
of the effective date of such subdivision, combination or
reclassification shall be proportionately adjusted so that the
Holder of this Warrant exercised after such date shall be
entitled to receive the aggregate number and kind of shares
which, if this Warrant had been exercised immediately prior to
such time, he would have owned upon such exercise and been
entitled to receive upon such dividend, subdivision, combination
or reclassification. Such adjustment shall be made successively
whenever any event listed in this Section 6 shall occur. All
calculations under this Section 6 shall be made to the nearest
cent or to the nearest share, as the case may be.
7. RECLASSIFICATION, REORGANIZATION OR MERGER. If
any capital reorganization or reclassification of the capital
stock of the Company or any consolidation or merger of the
Company with another corporation, or the sale of all or
substantially all of its assets to another corporation shall be
effected in such a way (including, without limitation, by way of
consolidation or merger) that holders of Common Stock shall be
entitled to receive stock, securities or assets with respect to
or in exchange for Common Stock, then, as a condition of such
reorganization,
-3-
<PAGE>
reclassification, consolidation, merger or sale, adequate
provision shall be made whereby the Holder of this
Warrant shall thereafter have the right to receive, upon
the basis and upon the terms and conditions specified herein
and in lieu of the shares of Common Stock of the Company then
receivable upon the exercise of this Warrant, such
shares of stock, securities or assets as may be issued or
payable with respect to or in exchange for a number of
outstanding shares of such Common Stock equal to the number
of shares of such stock then receivable had such
reorganization, reclassification, consolidation, merger or
sale not taken place, and in any such case appropriate
provision shall be made with respect to the rights and
interests of such holder to the end that the provisions
hereof shall thereafter be applicable, as nearly
practicable, in relation to any shares of stock, securities
or assets thereafter deliverable upon the exercise of this
Warrant. In the event of a merger or consolidation of the
Company as a result of which a greater or lesser number of
shares of common stock of the surviving corporation is
issuable to holders of Common Stock of the Company outstanding
immediately prior to such merger or consolidation, the
Exercise Price in effect immediately prior to such merger or
consolidation shall be adjusted in the same manner as
though there were a subdivision or combination of the
outstanding shares of Common Stock of the Company.
8. REGISTRATION UNDER THE SECURITIES ACT OF 1933.
(a) For the four year period commencing after
January 19, 1996 (subject to Section 8(f)), the Company shall
advise the Holder of Warrants or the Warrant Shares or any then
holder of the Warrants or Warrant Shares (such persons being
collectively referred to herein as "holders") by written notice
at least thirty (30) days prior to the filing of any registration
statement under the Act (other than a registration statement on
Form S-4, Form S-8 or subsequent similar forms) covering
securities of the Company and will upon the request of any such
holder, include in any such registration statement such
information as may be required to permit a public offering of the
Warrant Shares; provided, however, that if the registration
statement relates to a public offering by the Company of its
securities and the managing underwriters advise the holder that
the inclusion in the offering of securities being sold by the
holder would adversely affect the ability of the Company to
complete the public offering (and other selling stockholders, if
any, are similarly advised), then the holder will agree to reduce
the number of Warrant Shares to be registered to a number of
shares which shall be not less than ten percent (10%) of the
number of shares being offered by the Company and the holder will
further agree not to make any sales of the securities so included
for a period of one hundred eighty (180) days from the effective
date of such registration statement. The Company shall keep such
registration statement current for a period of up to nine (9)
months from the conclusion of such one hundred eighty (180) day
period; provided, however, that the Company shall
-4-
<PAGE>
not be required to keep the registration statement
effective beyond the date after which the registration
statement must be amended to include updated audited
financial statements. The Company shall supply prospectuses,
qualify the Warrants and the Warrant Shares for sale in
such states as any such holder reasonably designates and
furnish indemnification in the manner as set forth in
Section 8(b)(ii). Such holders shall furnish information
and provide indemnification as set forth in Section 8(b)(ii).
(b) The following provisions shall also be
applicable:
(i) The Company shall bear the entire cost
and expense of any registration of securities initiated by it
under Section 8 of this Warrant. Any holder whose Warrant Shares
are included in any such registration statement pursuant to this
Section 8 shall, however, bear the fees of his own counsel and
accountants and any transfer taxes or underwriting discounts or
commissions applicable to the Warrant Shares sold by him pursuant
thereto.
(ii) The Company shall indemnify and hold
harmless each such holder and each underwriter, within the
meaning of the Act, who may purchase from or sell for any such
holder any Warrants and/or Warrant Shares from and against any
and any losses, claims, damages and liabilities caused by any
untrue statement of a material fact contained in the Registration
Statement or any post-effective amendment thereto or any
registration statement under the Act or any prospectus included
therein required to be filed or furnished by reason of this
Section 8 or any application or other filing under any state
securities law caused by any omission to state therein a material
fact required to be stated therein or necessary to make the
statements therein not misleading to which such holder or any
such underwriter or any of them may become subject under the Act,
the Securities Exchange Act of 1934, as amended, or other Federal
or state statutory law or regulation, except insofar as such
losses, claims, damages or liabilities are caused by any such
untrue statement or omission based upon information furnished or
required to be furnished to the Company by any such holder or
underwriter expressly for use therein, which indemnification
shall include each person, if any, who controls any such
underwriter within the meaning of such Act; provided, however,
that any such holder or underwriter shall at the same time
indemnify the Company, its directors, each officer signing the
related registration statement, each person, if any, who controls
the Company within the meaning of such Act and each other Holder,
from and against any and all losses, claims, damages and
liabilities caused by any untrue statement of a material fact
contained in any registration statement or any prospectus
required to be filed or furnished by reason of this Section 8 or
caused by any omission to state therein a material fact required
to be stated therein or necessary to make the statements therein
not misleading,
-5-
<PAGE>
insofar as such losses, claims, damages or liabilities
are caused by any untrue statement or omission is based
upon information furnished to the Company by any such
holder or underwriter expressly for use therein.
(c) The Company's agreements with respect to
Warrants or Warrant Shares in this Section 8 shall continue in
effect regardless of the exercise and surrender of this Warrant.
(d) Notwithstanding any contrary provisions of
this Section 8 the holder of this Warrant may, at its election,
include this Warrant as well as the Warrant Shares issuable upon
exercise of this Warrant in any registration statement filed
pursuant to this Section 8; provided, however, that in the event
that both (i) this Warrant shall be included in any such
registration statement and (ii) this Warrant shall be transferred
at a time subsequent to the effective date of such registration
statement at which time the registration statement is current,
then this Warrant shall cease to be exercisable after 5:00 P. M.,
New York City time on the thirtieth (30th) day after the date of
such transfer or, if such thirtieth (30th) day shall be a day on
which banking institutions in the State of New York are
authorized by law to close, then on the next succeeding day which
shall not be such a day. In the event that any registration
statement referred to in the preceding sentence shall cease to be
current during the thirty (30) day period referred to above,
then, notwithstanding the preceding sentence, the exerciseability
of this Warrant shall not be affected by the transfer of this
Warrant. Nothing in this Warrant shall be construed in any
manner to require the Company to take steps to create or provide
for a public market for the Warrants.
9. TRANSFER TO COMPLY WITH THE SECURITIES ACT OF
1933. This Warrant or the Warrant Shares or any other security
issued or issuable upon exercise of this Warrant may not be sold
or otherwise disposed of except as follows:
(a) To a person who, in the opinion of counsel
for the Company, is a person to whom this Warrant or Warrant
Shares may legally be transferred without registration and
without the delivery of a current prospectus under the Act with
respect thereto against receipt of an agreement of such person to
comply with the provisions of this Section 9 with respect to any
resale or other disposition of such securities which agreement
shall be reasonably satisfactory in form and substance to the
Company and its counsel; or
(b) to any person upon delivery of a prospectus
then meeting the requirements of the Act relating to such
securities and the offering thereof for such sale or disposition.
10. REDEMPTION OF WARRANT. The Company may, at its
option, at any time prior to the close of business on December
18,
-6-
<PAGE>
1995 (the "Final Date"), redeem all of the Series D Warrants
upon notice and in the manner set forth below. The Company may
redeem all the Warrants by mailing or otherwise delivering a
notice of such redemption prior to the Final Date to the holder
of Warrants to be redeemed at M&A Investments, Inc., 1220 Senlac
Drive, Carrollton, Texas 75006 or at such other address as the
holder of this Warrant shall designate in writing to the Company.
Such notice of redemption shall be accompanied by a certified
check payable to the holder of this Warrant in the amount of
$77,000. Such Warrant shall be deemed to be redeemed on the date
such notice (accompanied by such payment) is given. (For the
purposes of this Warrant, the term "business day" shall mean any
day other than a Saturday or Sunday or a day on which banking
institutions in the City of New York are authorized or obligated
to close).
Dated: June 28, 1995
UNSI CORPORATION
By:________________________________
Peter A. Lusk
Chairman of the Board
-7-
<PAGE>
Exhibit A
PURCHASE FORM
Dated , 19
The undersigned hereby irrevocably elects to exercise the
within Warrant to the extent of purchasing
shares of Common Stock and hereby makes payment of
in payment of the actual exercise price thereof.
INSTRUCTIONS FOR REGISTRATION OF STOCK
Name
(Please typewrite or print in block letters)
Signature
ASSIGNMENT FORM
FOR VALUE RECEIVED,
hereby sells, assigns and transfer unto
Name
(Please typewrite or print in block letters)
Address
Social Security or Employer Identification No.
the right to purchase Common Stock represented by this Warrant to
the extent of shares as to which such right is
exercisable and does hereby irrevocably constitute and appoint
Attorney, to transfer the same on the
books of the Company with full power of substitution in the
premises.
Dated: , 19
Signature
Signature Guaranteed
-8-
<PAGE>
Exhibit 4.11
WD-5
NEITHER THIS WARRANT NOR THE SHARES OF COMMON STOCK ISSUABLE UPON
EXERCISE OF THIS WARRANT HAVE BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 (THE "ACT"), AND NEITHER THIS WARRANT NOR
SUCH SHARES MAY BE SOLD, ENCUMBERED OR OTHERWISE TRANSFERRED
EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH
ACT OR AN EXEMPTION FROM SUCH REGISTRATION REQUIREMENT, AND, IF
AN EXEMPTION SHALL BE APPLICABLE, THE HOLDER SHALL HAVE DELIVERED
AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY THAT SUCH
REGISTRATION IS NOT REQUIRED.
Void after 5:00 p.m. New York City time, on January 19, 2000.
Subject to early termination as provided in Sections 8(d) and 10
herein.
SERIES D REDEEMABLE WARRANT TO PURCHASE COMMON STOCK
OF
UNSI CORPORATION
This is to certify that, FOR VALUE RECEIVED, Peter A. Lusk or
assigns ("Holder") , is entitled to purchase, subject to the
provisions of this Warrant, from UNSI Corporation, a Delaware
corporation (the "Company"), at an exercise price per share of
ten cents ($.10), 110,000 shares (subject to adjustment as set
forth in the next sentence and as otherwise set forth herein) of
common stock, par value $.01 per share, of the Company (the
"Common Stock") at any time during the period (the "Exercise
Period") commencing after January 4, 1997 and prior to 5:00 p.m.
New York City time, on January 19, 2000; provided, however, that
if such date is a day on which banking institutions in the State
of New York are authorized by law to close, then on the next
succeeding day which shall not be such a day. In the event that
one or more of the Company's Series B Warrants and/or 7% PIK
Debentures due 1999 (the "PIK Debentures") are not retired,
redeemed, cancelled or otherwise terminated prior to the exercise
of this Warrant, the number of shares issuable upon exercise of
this Warrant shall be adjusted so that this Warrant shall be
exercisable to acquire 1.45% of the UNSI Common Stock outstanding
as of the date hereof on a fully diluted basis. The term "fully
diluted basis" means after giving effect to the exercise or
conversion of all UNSI securities outstanding as of the date
hereof (other than the Company's Series B Warrants and/or PIK
Debentures that are retired, redeemed, cancelled or otherwise
terminated prior to the date of exercise of this Warrant and the
Series D Redeemable Warrant (denominated WD-4)) convertible or
exercisable into UNSI Common Stock. Notwithstanding anything to
the contrary herein, this Warrant may be exercised after December
18, 1995, in the event that the Company
-1-
<PAGE>
shall have received prior to the date of exercise an opinion
of its counsel to the effect that such exercise will not
adversely effect the Company's ability to use its net
operating losses. The number of shares of Common Stock to be
received upon the exercise of this Warrant and the price to be
paid for a share of Common Stock may be adjusted from time to
time as hereinafter set forth. The shares of Common Stock
deliverable upon such exercise, and as adjusted from time to
time, are hereinafter sometimes referred to as "Warrant
Shares," and the exercise price for the purchase of a share
of Common Stock pursuant to this Warrant in effect at any
time and as adjusted from time to time is hereby referred
to as the "Exercise Price".
1. EXERCISE OF WARRANT. This Warrant may be
exercised in whole at any time or in part from time to time
during the Exercise Period by presentation and surrender hereof
to the Company at its principal office, or at the office of its
stock transfer agent, if any, with the Purchase Form annexed
hereto as Exhibit A duly executed and accompanied by payment of
the Exercise Price for the number of shares specified in such
form. If this Warrant should be exercised in part only, the
Company shall, upon surrender of this Warrant for cancellation,
execute and deliver a new Warrant evidencing the rights of the
Holder hereof to purchase the balance of the shares purchasable
hereunder. Upon receipt by the Company of this Warrant at its
office, or by the stock transfer agent of the Company at its
office, in proper form for exercise, the Holder shall be deemed
to be the holder of record of the shares of Common Stock issuable
upon such exercise, notwithstanding that the stock transfer books
of the Company shall then be closed or that certificates
representing such shares of Common Stock shall not then be
actually delivered to the Holder.
2. RESERVATION OF SHARES. The Company hereby agrees
that at all times there shall be reserved for issuance and/or
delivery upon exercise of this Warrant such number of shares of
its Common Stock as shall be required for issuance and delivery
upon exercise of this Warrant.
3. FRACTIONAL SHARES. No fractional shares or script
representing fractional shares shall be issued upon the exercise
of this Warrant.
4. EXCHANGE, TRANSFER, ASSIGNMENT OR LOSS OF WARRANT.
This Warrant is exchangeable, without expense, at the option of
the Holder, upon presentation and surrender hereof to the Company
or at the office of its stock transfer agent, if any, for other
warrants of different denominations entitling the holder thereof
to purchase in the aggregate the same number of shares of Common
Stock purchasable hereunder. Subject to the provisions of
Section 9 of this Warrant, upon surrender of this Warrant to the
Company or at the office of its stock transfer agent, if any,
with the Assignment Form annexed hereto as Exhibit A duly
executed and funds sufficient
-2-
<PAGE>
to pay any transfer tax, the Company shall, without
charge, execute and deliver a new Warrant in the name of
the assignee named in such instrument of assignment and
this Warrant shall promptly be cancelled. This Warrant
may be divided or combined with other Warrants which carry
the same rights upon presentation hereof at the office of
the Company or at the office of its stock transfer agent, if
any, together with a written notice specifying the
names and denominations in which new Warrants are to be
issued and signed by the Holder hereof. The term "Warrant"
as used herein includes any Warrants into which this Warrant
may be divided or exchanged. Upon receipt by the Company of
evidence satisfactory to it of the loss, theft, destruction
or mutilation of this Warrant, and (in the case of loss,
theft or destruction) of reasonably satisfactory
indemnification, and upon surrender and cancellation of this
Warrant, if mutilated, the Company will execute and
deliver a new Warrant of like tenor and date.
5. RIGHTS OF THE HOLDER. The Holder shall not, by
virtue of this Warrant, be entitled to any rights of a
stockholder in the Company, either at law or equity, and the
rights of the Holder are limited to those expressed in the
Warrant and are not enforceable against the Company except to the
extent set forth herein.
6. ADJUSTMENT OF EXERCISE PRICE. In case the Company
shall, (a) pay a dividend or make a distribution on its shares of
Common Stock in shares of Common Stock (b) subdivide or
reclassify its outstanding Common Stock into a greater number of
shares, or (c) combine or reclassify its outstanding Common Stock
into a smaller number of shares, the Exercise Price in effect at
the time of the record date for such dividend or distribution or
of the effective date of such subdivision, combination or
reclassification shall be proportionately adjusted so that the
Holder of this Warrant exercised after such date shall be
entitled to receive the aggregate number and kind of shares
which, if this Warrant had been exercised immediately prior to
such time, he would have owned upon such exercise and been
entitled to receive upon such dividend, subdivision, combination
or reclassification. Such adjustment shall be made successively
whenever any event listed in this Section 6 shall occur. All
calculations under this Section 6 shall be made to the nearest
cent or to the nearest share, as the case may be.
7. RECLASSIFICATION, REORGANIZATION OR MERGER. If
any capital reorganization or reclassification of the capital
stock of the Company or any consolidation or merger of the
Company with another corporation, or the sale of all or
substantially all of its assets to another corporation shall be
effected in such a way (including, without limitation, by way of
consolidation or merger) that holders of Common Stock shall be
entitled to receive stock, securities or assets with respect to
or in exchange for Common Stock, then, as a condition of such
reorganization,
-3-
<PAGE>
reclassification, consolidation, merger or sale, adequate
provision shall be made whereby the Holder of this
Warrant shall thereafter have the right to receive, upon
the basis and upon the terms and conditions specified herein
and in lieu of the shares of Common Stock of the Company then
receivable upon the exercise of this Warrant, such
shares of stock, securities or assets as may be issued or
payable with respect to or in exchange for a number of
outstanding shares of such Common Stock equal to the number
of shares of such stock then receivable had such
reorganization, reclassification, consolidation, merger or
sale not taken place, and in any such case appropriate
provision shall be made with respect to the rights and
interests of such holder to the end that the provisions
hereof shall thereafter be applicable, as nearly
practicable, in relation to any shares of stock, securities
or assets thereafter deliverable upon the exercise of this
Warrant. In the event of a merger or consolidation of the
Company as a result of which a greater or lesser number of
shares of common stock of the surviving corporation is
issuable to holders of Common Stock of the Company outstanding
immediately prior to such merger or consolidation, the
Exercise Price in effect immediately prior to such merger or
consolidation shall be adjusted in the same manner as
though there were a subdivision or combination of the
outstanding shares of Common Stock of the Company.
8. REGISTRATION UNDER THE SECURITIES ACT OF 1933.
(a) For the four year period commencing after
January 19, 1996 (subject to Section 8(f)), the Company shall
advise the Holder of Warrants or the Warrant Shares or any then
holder of the Warrants or Warrant Shares (such persons being
collectively referred to herein as "holders") by written notice
at least thirty (30) days prior to the filing of any registration
statement under the Act (other than a registration statement on
Form S-4, Form S-8 or subsequent similar forms) covering
securities of the Company and will upon the request of any such
holder, include in any such registration statement such
information as may be required to permit a public offering of the
Warrant Shares; provided, however, that if the registration
statement relates to a public offering by the Company of its
securities and the managing underwriters advise the holder that
the inclusion in the offering of securities being sold by the
holder would adversely affect the ability of the Company to
complete the public offering (and other selling stockholders, if
any, are similarly advised), then the holder will agree to reduce
the number of Warrant Shares to be registered to a number of
shares which shall be not less than ten percent (10%) of the
number of shares being offered by the Company and the holder will
further agree not to make any sales of the securities so included
for a period of one hundred eighty (180) days from the effective
date of such registration statement. The Company shall keep such
registration statement current for a period of up to nine (9)
months from the conclusion of such one hundred eighty (180) day
period; provided, however, that the Company shall
-4-
<PAGE>
not be required to keep the registration statement
effective beyond the date after which the registration
statement must be amended to include updated audited
financial statements. The Company shall supply prospectuses,
qualify the Warrants and the Warrant Shares for sale in
such states as any such holder reasonably designates and
furnish indemnification in the manner as set forth in
Section 8(b)(ii). Such holders shall furnish information
and provide indemnification as set forth in Section 8(b)(ii).
(b) The following provisions shall also be
applicable:
(i) The Company shall bear the entire cost
and expense of any registration of securities initiated by it
under Section 8 of this Warrant. Any holder whose Warrant Shares
are included in any such registration statement pursuant to this
Section 8 shall, however, bear the fees of his own counsel and
accountants and any transfer taxes or underwriting discounts or
commissions applicable to the Warrant Shares sold by him pursuant
thereto.
(ii) The Company shall indemnify and hold
harmless each such holder and each underwriter, within the
meaning of the Act, who may purchase from or sell for any such
holder any Warrants and/or Warrant Shares from and against any
and any losses, claims, damages and liabilities caused by any
untrue statement of a material fact contained in the Registration
Statement or any post-effective amendment thereto or any
registration statement under the Act or any prospectus included
therein required to be filed or furnished by reason of this
Section 8 or any application or other filing under any state
securities law caused by any omission to state therein a material
fact required to be stated therein or necessary to make the
statements therein not misleading to which such holder or any
such underwriter or any of them may become subject under the Act,
the Securities Exchange Act of 1934, as amended, or other Federal
or state statutory law or regulation, except insofar as such
losses, claims, damages or liabilities are caused by any such
untrue statement or omission based upon information furnished or
required to be furnished to the Company by any such holder or
underwriter expressly for use therein, which indemnification
shall include each person, if any, who controls any such
underwriter within the meaning of such Act; provided, however,
that any such holder or underwriter shall at the same time
indemnify the Company, its directors, each officer signing the
related registration statement, each person, if any, who controls
the Company within the meaning of such Act and each other Holder,
from and against any and all losses, claims, damages and
liabilities caused by any untrue statement of a material fact
contained in any registration statement or any prospectus
required to be filed or furnished by reason of this Section 8 or
caused by any omission to state therein a material fact required
to be stated therein or necessary to make the statements therein
not misleading,
-5-
<PAGE>
insofar as such losses, claims, damages or liabilities
are caused by any untrue statement or omission is based
upon information furnished to the Company by any such
holder or underwriter expressly for use therein.
(c) The Company's agreements with respect to
Warrants or Warrant Shares in this Section 8 shall continue in
effect regardless of the exercise and surrender of this Warrant.
(d) Notwithstanding any contrary provisions of
this Section 8 the holder of this Warrant may, at its election,
include this Warrant as well as the Warrant Shares issuable upon
exercise of this Warrant in any registration statement filed
pursuant to this Section 8; provided, however, that in the event
that both (i) this Warrant shall be included in any such
registration statement and (ii) this Warrant shall be transferred
at a time subsequent to the effective date of such registration
statement at which time the registration statement is current,
then this Warrant shall cease to be exercisable after 5:00 P. M.,
New York City time on the thirtieth (30th) day after the date of
such transfer or, if such thirtieth (30th) day shall be a day on
which banking institutions in the State of New York are
authorized by law to close, then on the next succeeding day which
shall not be such a day. In the event that any registration
statement referred to in the preceding sentence shall cease to be
current during the thirty (30) day period referred to above,
then, notwithstanding the preceding sentence, the exerciseability
of this Warrant shall not be affected by the transfer of this
Warrant. Nothing in this Warrant shall be construed in any
manner to require the Company to take steps to create or provide
for a public market for the Warrants.
9. TRANSFER TO COMPLY WITH THE SECURITIES ACT OF
1933. This Warrant or the Warrant Shares or any other security
issued or issuable upon exercise of this Warrant may not be sold
or otherwise disposed of except as follows:
(a) To a person who, in the opinion of counsel
for the Company, is a person to whom this Warrant or Warrant
Shares may legally be transferred without registration and
without the delivery of a current prospectus under the Act with
respect thereto against receipt of an agreement of such person to
comply with the provisions of this Section 9 with respect to any
resale or other disposition of such securities which agreement
shall be reasonably satisfactory in form and substance to the
Company and its counsel; or
(b) to any person upon delivery of a prospectus
then meeting the requirements of the Act relating to such
securities and the offering thereof for such sale or disposition.
10. REDEMPTION OF WARRANT. The Company may, at its
option, at any time prior to the close of business on December
18,
-6-
<PAGE>
1995 (the "Final Date"), redeem all of the Series D Warrants
upon notice and in the manner set forth below. The Company may
redeem all the Warrants by mailing or otherwise delivering a
notice of such redemption prior to the Final Date to the holder
of Warrants to be redeemed at M&A Investments, Inc., 1220 Senlac
Drive, Carrollton, Texas 75006 or at such other address as the
holder of this Warrant shall designate in writing to the Company.
Such notice of redemption shall be accompanied by a certified
check payable to the holder of this Warrant in the amount of
$11,000. Such Warrant shall be deemed to be redeemed on the date
such notice (accompanied by such payment) is given. (For the
purposes of this Warrant, the term "business day" shall mean any
day other than a Saturday or Sunday or a day on which banking
institutions in the City of New York are authorized or obligated
to close).
Dated: June 28, 1995
UNSI CORPORATION
By:________________________________
Peter A. Lusk
Chairman of the Board
-7-
<PAGE>
Exhibit A
PURCHASE FORM
Dated , 19
The undersigned hereby irrevocably elects to exercise the
within Warrant to the extent of purchasing
shares of Common Stock and hereby makes payment of
in payment of the actual exercise price thereof.
INSTRUCTIONS FOR REGISTRATION OF STOCK
Name
(Please typewrite or print in block letters)
Signature
ASSIGNMENT FORM
FOR VALUE RECEIVED,
hereby sells, assigns and transfer unto
Name
(Please typewrite or print in block letters)
Address
Social Security or Employer Identification No.
the right to purchase Common Stock represented by this Warrant to
the extent of shares as to which such right is
exercisable and does hereby irrevocably constitute and appoint
Attorney, to transfer the same on the
books of the Company with full power of substitution in the
premises.
Dated: , 19
Signature
Signature Guaranteed
-8-
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JUN-30-1995
<PERIOD-END> JUN-30-1995
<CASH> 100,035
<SECURITIES> 0
<RECEIVABLES> 115,346
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 218,681
<PP&E> 399,924
<DEPRECIATION> 115,888
<TOTAL-ASSETS> 542,075
<CURRENT-LIABILITIES> 2,085,567
<BONDS> 1,292,321
<COMMON> 22,100
0
0
<OTHER-SE> (3,090,255)
<TOTAL-LIABILITY-AND-EQUITY> 542,075
<SALES> 872,901
<TOTAL-REVENUES> 895,401
<CGS> 1,492,509
<TOTAL-COSTS> 1,492,509
<OTHER-EXPENSES> 943,334
<LOSS-PROVISION> 230,805
<INTEREST-EXPENSE> 203,044
<INCOME-PRETAX> (1,743,486)
<INCOME-TAX> 0
<INCOME-CONTINUING> (1,743,468)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,743,486)
<EPS-PRIMARY> (.79)
<EPS-DILUTED> (.79)
</TABLE>
