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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. )*
INTERNATIONAL NURSING SERVICES, INC.
(Name of Issuer)
Common Stock, $.001 par value
(Title of Class of Securities)
460093404
(CUSIP Number)
David Klugmann
701 North Lake Drive, Lakewood, NJ 08701
908-905-9206
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
July 18, 1996
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement of Schedule 13G
to report the acquisition which is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13d-I(b)(3) or (4), check the following
box [ ]
Check the following box if a fee is being paid with the statement. [X]
(A fee is not required only if the reporting person: (1) has a previous
statement on file reporting beneficial ownership of more than five percent of
the class of securities described in Item 1; and (2) has filed no amendment
subsequent thereto reporting beneficial ownership of five percent or less of
such class.) (See Rule 13d-7)
NOTE: Six copies of this statement, including all exhibits should be
filed with the Commission. See Rule 13d-1(a) for other parties to whom copies
are to be sent.
(Continued on following pages)
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not
be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 ("Act") or otherwise subject to the liabilities of that section of
the Act but shall be subject to all other provisions of the Act (however, see
the Notes).
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Schedule 13D
CUSIP No. 460093404 13D
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
David Klugmann
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [x]
3. SEC USE ONLY
4. SOURCE OF FUNDS*
PF
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) [ ]
6. CITIZENSHIP OR PLACE OF ORGANIZATION
U.S.A.
7. SOLE VOTING POWER
N/A
8. SHARED VOTING POWER
N/A
9. SOLE DISPOSITIVE POWER
388,000
10. SHARED DISPOSITIVE POWER
N/A
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
388,000
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* [ ]
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
8.13%
14. TYPE OF REPORTING PERSON*
IN
*SEE INSTRUCTIONS BEFORE FILLING OUT
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Schedule 13D
CUSIP No. 460093404 13D
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
David Klugmann Money Purchase Plan
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [x]
3. SEC USE ONLY
4. SOURCE OF FUNDS*
WC
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) [x]
6. CITIZENSHIP OR PLACE OF ORGANIZATION
New York
7. SOLE VOTING POWER
N/A
8. SHARED VOTING POWER
N/A
9. SOLE DISPOSITIVE POWER
160,000
10. SHARED DISPOSITIVE POWER
N/A
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
160,000
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* [ ]
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
3.52%
14. TYPE OF REPORTING PERSON*
EP
*SEE INSTRUCTIONS BEFORE FILLING OUT
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Item 1. Security and Issuer
This statement relates to Common Stock, $.001 par value per share (the
"Common Stock"), of International Nursing Services, Inc. (the "Company"). The
address of the principal executive office of the Company is 360 South Garfield
Street, Suite 640, Denver, Colorado 80209.
Item 2. Identity and Background
(a) This statement is filed on behalf of David Klugmann and the David
Klugmann Money Purchase Plan (the "Plan"), of which David Klugmann is a trustee
(collectively the "Reporting Persons").
(b) The business address for all Reporting Persons is 701 North Lake
Drive, Lakewood, NJ 08701.
(c) Mr. Klugmann's principal occupation is actuarial and insurance
consulting. The Plan is a money purchase retirement plan. All Reporting Persons
conduct their respective businesses primarily at the address above.
(d) During the last five years, neither David Klugmann nor the Plan has
been convicted in a criminal proceeding.
(e) During the last five years, none of the Reporting Persons has been
a party to a civil proceeding of a judicial or administrative body of competent
jurisdiction relating to the violation of any federal or state securities law.
(f) David Klugmann is a US citizen.
Item 3. Source and Amount of Funds or other Consideration
All of the funds used in the acquisition of the securities came from
personal or internal investment capital of the Reporting Persons. Mr. Klugmann
purchased nine Units for $90,000. The Plan purchased five Units for $50,000.
Item 4. Purpose of Transaction
All securities listed under Item 5 below have been acquired for
investment. None of the Reporting Persons has any plans with respect to any of
such securities which is referred to in Items 4(a)-4(j) of Schedule 13D.
Item 5. Interest in Securities of the Issuer.
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(a) The following table shows the beneficial ownership of each of the
Reporting Persons in the Company's Common Stock, the basis of such ownership,
and the percentage of the total number of outstanding shares of Common Stock as
of July 22, 1996. The table assumes that the Conversion Price (as defined below)
as of the date of this filing is $1.25. As set forth in subsection (c) hereof,
this number may be subject to adjustment based on fluctuations in the market
price of the Common Stock which may affect the Conversion Price. The table
assumes further that all Preferred Stock and Warrants (as hereinafter defined)
were converted and exercised, as the case may be, and that the total number of
outstanding shares of the Company's Common Stock is 4,382,403 prior to such
conversion and exercise.
Number of Shares Percentage of
Name Beneficially Owned Outstanding Shares
- ---- ------------------ ------------------
David Klugmann Money
Purchase Plan (1) 160,000 3.52%
David Klugmann (2) 388,000 8.13%
(1) Consists of 80,000 shares issuable upon conversion of Preferred Stock
and 80,000 shares issuable upon exercise of Warrants.
(2) Consists of 144,000 shares issuable upon conversion of Preferred
Stock, 144,000 shares issuable upon exercise of Warrants and 100,000
shares issuable upon exercise of finders fee warrants (see Item 6
below). Does not include shares and Warrants owned by the Plan.
(b) Mr. Klugmann disclaims beneficial ownership in the Common Stock
that is owned by the Plan and that is reported herewith. The Plan disclaims
beneficial ownership in the Common Stock owned by Mr. Klugmann. There is no
written arrangement respecting voting and dispositive powers with respect to
the Common Stock.
(c) Pursuant to a private placement (the "Placement"), on July 18,
1996, Mr. Klugmann purchased nine units ("Units") from the Company at $10,000
per Unit. Each Unit consists of one share of 1996 Convertible Preferred Stock
("Preferred Stock") having a conversion value of $10,000 and warrants
("Warrants") to purchase 8,000 shares of Common Stock at $2.50 per share for a
period of three years. The expiration date of the Warrants will be extended by
one day for each day after February 1, 1997 on which a registration statement
(the "Registration Statement") with
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respect to the Common Stock underlying the Preferred Stock and the Warrants
which the Company has undertaken to file is not in effect. For a period of
three years, the Preferred Stock will at the option of the holder be
convertible into shares of Common Stock at the lesser of $1.25 per share or 75%
of the average closing sales price of the Common Stock as quoted on the Nasdaq
during the last five trading days prior to conversion (the "Conversion Price").
On the same date, the Plan purchased five Units from the Company. In addition,
Reporting Persons were granted an option (the "Option") to purchase up to an
additional number of Units equal to the number of Units purchased in the
Placement at $10,000 per Unit. The expiration date of the Option is December
31, 1997, or, if earlier, the 30th day of the effectiveness of the Registration
Statement.
Item 6. Contracts, Arrangements, Understandings or Relationships
with Respect to Securities of the Issuer
See the disclosures under Items 2 and 5(b). The Company has paid Mr.
Klugmann a finders fee in connection with the Placement. The fee consists of a
cash portion and warrants to purchase 100,000 shares of Common Stock at $2.00
per share for a period of three years. The expiration date will be extended by
one day for each day after February 1, 1997 on which the Registration is not in
effect. The cash portion equals 5% of the first $2,000,000 of any and all
amounts ("Proceeds") paid to the Company by subscribers of the Placement, for
Units, Option Units or as the exercise price of Warrants included in the Units
or the Option Units, 4% of the next $2,000,000 of aggregate Proceeds, 3% of the
next $2,000,000 in aggregate Proceeds, 2% of the next $2,000,000 of aggregate
Proceeds, and 1% of any additional aggregate Proceeds.
Item 7. Material to be Filed as Exhibits
(1) Agreement among Reporting Persons to Joint Filing of Schedule 13D.
(2) Finders Fee agreement between the Company and David Klugmann
dated July 18, 1996.
(3) Subscription Agreement between the Company and David Klugmann
dated July 18, 1996.
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SIGNATURES
After reasonable inquiry and to the best of the undersigned's knowledge
and belief, the undersigned certify that the information set forth in this
statement is true, complete and correct.
Dated: August 26, 1996
DAVID KLUGMANN MONEY PUURCHASE PLAN
By: /s/ David Klugmann
-------------------------
Title: Trustee
/s/ David Klugmann
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David Klugmann
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EXHIBIT 1
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Agreement
Joint Filing of Schedule 13D
The undersigned hereby agree to jointly prepare and file a Schedule 13D
and any future amendments thereto reporting each of the undersigned's ownership
of securities of International Nursing Services, Inc. and hereby affirm that
such Schedule 13D is being filed on behalf of each of the undersigned.
Dated: August 26, 1996
DAVID KLUGMANN MONEY PURCHASE PLAN
By: /s/ David Klugmann
-------------------------------
Title: Trustee
/s/ David Klugmann
- ----------------------------------
David Klugmann
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EXHIBIT 2
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International Nursing Services, Inc.
360 South Garfield Street, Suite 640
Denver, Colorado 80209
David Klugmann July 18, 1996
Lakewood, New Jersey
Gentlemen:
You have acted as a finder for our company (the "Company") in
connection with the placement of the Units referred to in the form of a
subscription agreements (each, an "Agreement") dated on or about this date. All
capitalized terms used herein have the meanings attributed thereto in the
Agreement.
In consideration for your services to date, and for other good and
valuable consideration, you shall be entitled to a fee equal to 100,000 warrants
(in the form of Exhibit A), payable the Formula Percentage (as hereinafter
defined) of any and all amounts ("Proceeds") from time to time paid to the
Company by any Subscribers, or by the representatives or assigns of any
Subscribers, for Units, or for option Units, or as the exercise price of
Warrants included in the Units or the Option Units. The "Formula Percentage"
means 5% of the first $2,000,000 in aggregate Proceeds, 4% of the next
$2,000,000 of aggregate Proceeds, 3% of the next $2,000,000 of aggregate
Proceeds, 2% of the next $2,000,000 of aggregate Proceeds, and 1% of any
additional aggregate Proceeds.
You shall have the same registration rights for your warrants as apply
to the Warrants. The cash portion of your fee shall be payable in cash forthwith
upon each receipt by the Company of any consideration for which your fee is due
hereunder. Without limiting your other rights or remedies, your fee shall accrue
interest, payable on demand, at 15% per annum, or if less, at the highest rate
permitted by law. You shall be entitled to recover the reasonable costs of
collecting your fee. You need perform no additional services for the Company in
order to be entitled to any fee, nor do you have any obligations to the Company
whatsoever. The Company will not assert any defense, offset or counterclaim
against your right to receive a fee hereunder for any matter or thing, it being
understood that any offset or counterclaim which the Company may wish to assert
against you will be asserted in separate proceeding.
Your fee shall be in full settlement and release of all claims and
rights you may now have against the Company, including any claims for services
you have rendered to it, as a broker, finder or otherwise in any capacity. You
are not entitled to any fee for any transaction which fails to close for
whatever reason, notwithstanding that the Company was ready, willing and able to
close.
By _/s/_____________________
Accepted
1
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_/s/_______________________
David Klugmann
Date___________________
2
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Exhibit A
Neither this Warrant nor the shares of Common Stock issuable on exercise of this
Warrant have been registered under the Securities Act of 1933. None of such
securities may be transferred in the absence of registration under such Act and
registration or qualification under applicable state securities laws or an
opinion of counsel to the effect that such registrations or qualifications are
not required.
INTERNATIONAL NURSING SERVICES, INC.
WARRANT
DATED: July 18, 1996
Number of Shares: 100,000
Holder: David Klugmann
Address:
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THIS CERTIFIES THAT the holder of this Warrant ("Holder") is entitled to
purchase from INTERNATIONAL NURSING SERVICES, INC., a Colorado corporation
(hereinafter called the "Company"), at $2.00 per share the number of shares of
the Company's common stock set forth above ("Common Stock"). This Warrant shall
expire on the third anniversary of the date of the date of issuance of this
Warrant, but such expiration shall be extended by one day for each day after
February 1, 1997 on which the registration statement referred to in an agreement
of even date herewith is not in effect with respect to the shares purchasable
under the Warrant.
1. This Warrant and the Common Stock issuable on exercise of this
Warrant (the "Underlying Shares") may be transferred, sold, assigned or
hypothecated, only if registered by the Company under the Securities Act of 1933
(the "Act") and registered or qualified under any applicable state securities
laws, or if the Company has received from counsel to the Holder who is
reasonably satisfactory to the Company a written opinion which is reasonably
satisfactory to the Company to the effect that registration of the Warrant or
the Underlying Shares is not necessary in connection with such transfer, sale,
assignment or hypothecation. The Warrant and the Underlying Shares shall be
appropriately legended to reflect this restriction and stop transfer
instructions shall apply.
2. The Holder is entitled to certain registration rights under an
agreement of even date herewith.
3. (a) Any permitted assignment of this Warrant shall be effected by
the Holder by (i) executing the form of assignment at the end hereof, (ii)
surrendering the Warrant for cancellation at the office of the Company,
accompanied by the opinion of counsel to the Holder referred to above; and (iii)
unless in connection with an effective registration statement which covers the
sale of this Warrant and or the shares underlying the Warrant, delivery to the
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Company of a statement by the transferee (in a form acceptable to the Company
and its counsel) that such Warrant is being acquired by the transferee for
investment and not with a view to its distribution or resale; whereupon the
Company shall issue, in the name or names specified by the Holder (including the
Holder) new Warrants representing in the aggregate rights to purchase the same
number of Shares as are purchasable under the Warrant surrendered. Such Warrants
shall be exercisable immediately upon any such assignment of the number of
Warrants assigned. The transferor will pay all relevant transfer taxes.
Replacement warrants shall bear the same legend as is borne by this Warrant.
4. The term "Holder" should be deemed to include any permitted record
transferee of this Warrant.
5. The Company covenants and agrees that all shares of Common Stock
which may be issued upon exercise hereof will, upon issuance, be duly and
validly issued, fully paid and non-assessable and no personal liability will
attach to the holder thereof. The Company further covenants and agrees that,
during the periods within which this Warrant may be exercised, the Company will
at all times have authorized and reserved a sufficient number of shares of
Common Stock for issuance upon exercise of this Warrant and all other Warrants.
6. This Warrant shall not entitle the Holder to any voting rights
or other rights as a stockholder of the Company.
7. In the event that as a result of reorganization, merger,
consolidation, liquidation, recapitalization, stock split, combination of shares
or stock dividends payable with respect to such Common Stock, the outstanding
shares of Common Stock of the Company are at any time increased or decreased or
changed into or exchanged for a different number or kind of share or other
security of the Company or of another corporation, then appropriate adjustments
in the number and kind of such securities then subject to this Warrant and/or
the exercise price of this Warrant shall be made effective as of the date of
such occurrence so that both the position of the Holder upon exercise and the
total exercise price payable on such exercise will be the same as they would
have been had Holder owned immediately prior to the occurrence of such events
the Common Stock subject to this Warrant. Such adjustment shall be made
successively whenever any event listed above shall occur and the Company will
notify the Holder of the Warrant of each such adjustment. Any fraction of a
share resulting from any adjustment shall be eliminated and the price per share
of the remaining shares subject to this Warrant adjusted accordingly.
8. The rights represented by this Warrant may be exercised at any time
within the period above specified by (i) surrender of this Warrant at the
principal executive office of the Company (or such other office or agency of the
Company as it may designate by notice in writing to the Holder at the address of
the Holder appearing on the books of the Company); (ii) payment to the Company
of the exercise price for the number of Shares specified in the above-mentioned
purchase form together with applicable stock transfer taxes, if any; and (iii)
unless in connection with an effective registration statement which covers the
sale of the shares underlying the Warrant, the delivery to the Company of a
statement by the Holder (in a form acceptable to the Company and its counsel)
that such Shares are being acquired by the Holder for investment and not with a
view to their distribution or resale.
The certificates for the Common Stock so purchased shall be delivered
to the Holder within a reasonable time, not exceeding three business days after
all requisite documentation has been provided, after the rights represented by
this Warrant shall have been so exercised, and shall
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bear a restrictive legend with respect to any applicable securities laws.
9. This Warrant shall be governed by and construed in accordance with
the laws of the State of Colorado. The Colorado courts shall have exclusive
jurisdiction over this instrument and the enforcement thereof. Service of
process shall be effective if by certified mail, return receipt requested. All
notices shall be in writing and shall be deemed given upon receipt by the party
to whom addressed. This instrument shall be enforceable by decrees of specific
performances well as other remedies.
IN WITNESS WHEREOF, INTERNATIONAL NURSING SERVICES, INC. has caused
this Warrant to be signed by its duly authorized officers under Its corporate
seal, and to be dated as of the date set forth above.
INTERNATIONAL NURSING SERVICES, INC.
By________________________________
Title:____________________________
In the presence of:
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EXHIBIT 3
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July 18, 1996
International Nursing Services, Inc.
360 South Garfield Street, Suite 640
Denver Colorado 80209
Gentlemen:
1. At a closing to occur at the offices of your company (the "Company")
simultaneously herewith, the undersigned ("Subscriber") will for $10,000 per
Unit (as defined below) purchase from you, and you will sell, the number of
Units set forth opposite Subscriber's name below. Such purchase by Subscriber is
part of an offering in which an aggregate of 189 Units will be sold
simultaneously with such sale to Subscriber. Each Unit consists of one share of
the Company's 1996 Convertible Preferred Stock with a conversion value of
$10,000 (the "Preferred") and 8,000 warrants to purchase a share of common stock
of the Company at $2.50 per share (each, a "Warrant" and, collectively, the
"Warrants"). The purchase price for these Units is being paid to the Company, in
cash, concurrently herewith.
2. (a) The Certificate of Designation for the Preferred shall be in the form of
Exhibit A. The Preferred and any accrued but unpaid dividends thereon shall, at
the option of the holder and subject to the provisions of Section (b), be
convertible at any time prior to the third anniversary of the date of issue into
common stock of the Company ("Common Stock") at the lesser of $1.25 per share or
75% of the average closing sales price of the common stock on NASDAQ (or such
other securities exchange where the common stock may then be listed) during the
last five trading days prior to conversion. Dividends shall accrue on the
Preferred Stock from the date of issuance at 10% per annum, provided that such
rate shall be increased to 18% per annum during the period (if any) after the
180th day after the date of this Agreement and prior to the effectiveness of the
Registration Statement (as defined below). Dividends shall be payable on the
last day of each calendar quarter in cash. At the option of the Subscriber and
in addition to Subscriber's other remedies, the Company shall redeem the
Preferred at conversion value, together with accrued dividends, on the second
anniversary of the date of this Agreement if the Company's common stock is not
then trading on a national securities exchange (including the NASDAQ National
Market System or the NASDAQ Small Cap Market or the New York Stock Exchange or
the American Stock Exchange, but excluding the NASDAQ Bulletin Board or other
NASDAQ or other listings) or if the Registration Statement (as defined below)
has not theretofore been declared effective. The Preferred shall also be
entitled to priority over the common stock in liquidation.
(b) The Preferred shall be convertible at less than $0.875 only to the
extent that authorized but unissued shares of Common Stock are available for
such conversion taking into account unissued shares reserved for issuance
pursuant to outstanding warrants, options, or other convertible securities, if
any. The Company shall at its annual meeting initially called for August 1996,
which meeting shall in fact be held in September 1996, seek approval of an
amendment of the Certificate of Incorporation of the Company to authorize
10,000,000 additional shares of
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Common Stock, the directors of the Company shall recommend to the stockholders
that they vote in favor of such amendment and such increased number of
authorized shares shall be reserved for issuance on conversion of the Preferred
and exercise of the Warrants. If at any time or times thereafter there are
nevertheless not a sufficient number of authorized but unissued shares of
Common Stock available for the then conversion of the Preferred and exercise of
the Warrants, the Company shall forthwith call a special stockholders' meeting
to approve the amendment of the Certificate of Incorporation of the Company to
authorize such additional shares of Common Stock as shall be required for such
conversion and exercise, the directors of the Company shall recommend to the
stockholders that they vote in favor of such amendment and such increased
number of authorized shares shall be reserved for issuance on conversion of the
Preferred and exercise of the Warrants. By separate agreement, John Yeros has
agreed to vote his shares in favor of each such amendment. The period during
which the Preferred shall be convertible and during which the Registration
Statement is required to be effective shall each be extended by one day for
each day on which the Preferred shall not be convertible by reason of the
operation of this Section (b) and by an additional day for each day after
February 1, 1997 that the Registration Statement shall not be effective.
(c) The Warrants shall be in the form of Exhibit B.
3. Subscriber is hereby granted the option (the "Option"), exercisable by notice
to the Company given at any time or times before the expiration date set forth
below, to purchase from the Company a number of additional Units ("Option
Units") equal in the aggregate to not more than the number of Units for which
Subscriber subscribes in this Agreement. The purchase price for each Option Unit
shall be $10,000, and shall accompany Subscriber's notice of exercise. The
expiration date of the Option shall be December 31, 1997 or, if later, the 30th
day of the effectiveness of the Registration Statement. Each Option Unit shall
in all respects be identical to the non-Escrow Units subscribed for herein,
provided that the date of issuance of the Option Units shall be the date on
which the Option was exercised with respect thereto.
3a. The Company will on or before the 120th day after the date of this Agreement
file a registration statement on Form S-3 or, if Form S-3 is not then available,
on such other SEC form as the Company may select (the "Registration Statement")
for the public sale by the holders of the shares of common stock of the Company
which are issuable on conversion of the Preferred or upon exercise of the
Warrants (including any shares which were theretofore issued or which may
thereafter be issued on conversion of Preferred or exercise of Warrants which
were theretofore issued upon exercise of the Option or which may thereafter be
issued should Subscriber thereafter exercise the Option). The Company shall use
its best efforts to cause the Registration Statement to become effective not
later than 90 days after the date of filing, and to remain effective for three
years. The registration shall be accompanied by blue sky clearances in such
states as the holders may reasonably request. The Company shall pay all expenses
of the registration hereunder, other than the holders' underwriting discounts.
Registration rights may be assigned to assignees of the Preferred, the Warrants
or the underlying stock.
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4. (A) Subscriber represents and warrants that it is purchasing the Units, and
will purchase any Option Units, solely for investment solely for its own account
and not with a view to or for the resale or distribution thereof. Subscriber
acknowledges receipt of a description attached hereto as Exhibit C of certain
risk factors concerning the Company and the Units, and copies of the following
information filed with the United States Securities and Exchange Commission: (i)
Annual Report on Form 10-KSB for the fiscal year of the Company ended December
31, 1995, (ii) Quarterly Report on Form 10-QSB for the quarterly period ended
March 31, 1996, and (iii) Special Reports on Form 8-K dated December 28, 1995,
January 10, 1996, January 15, 1996, April 15, 1996 and April 19, 1996
(B) Subscriber understands that it may sell or otherwise transfer the
Units, the Preferred, the Warrants or the shares of Common Stock issuable on
conversion or exercise of the Preferred or the Warrants only if such transaction
is duly registered under the Securities Act of 1933, as amended, under the
Registration Statement or otherwise, and is duly registered or qualified under
any applicable state securities laws, or if Subscriber shall have received the
favorable opinion of counsel to the holder, which counsel and opinion shall be
reasonably satisfactory to counsel to the Company, to the effect that such sale
or other transfer may be made in the absence of registration under the
Securities Act of 1933, as amended, and in the absence of registration or
qualification under applicable state securities laws. The certificates
representing the aforesaid securities will be legended to reflect these
restrictions, and stop transfer instructions will apply. Subscriber realizes
that the Units are not a liquid investment.
5. (A) Subscriber has not relied upon the advice of a "Purchaser Representative"
(as defined in Regulation D of the Securities Act) in evaluating the risks and
merits of this investment. Subscriber has the knowledge and experience to
evaluate the Company and the risks and merits relating thereto.
(B) Subscriber represents and warrants that Subscriber is an
"accredited investor" as such term is defined in Rule 501 of Regulation D
promulgated pursuant to the Securities Act of 1933, as amended, and shall be
such on the date any shares are issued to the holder; Subscriber acknowledges
that Subscriber is able to bear the economic risk of losing Subscriber's entire
investment in the shares and understands that an investment in the Company
involves substantial risks; Subscriber has the power and authority to enter into
this agreement, and the execution and delivery of, and performance under this
agreement shall not conflict with any rule, regulation, judgment or agreement
applicable to the Subscriber; and Subscriber has invested in previous
transactions involving restricted securities.
6. This Agreement may not be changed or terminated except by written agreement.
It shall be binding on the parties and on their personal representatives and
permitted assigns. It sets forth all agreements of the parties. It shall be
enforceable by decrees of specific performance (without posting bond or other
security) as well as by other available remedies.
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Subscriber: INTERNATIONAL NURSING SERVICES, INC.
_________________________
By:_____________________________
Title:
Number of Units: _____________
4
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EXHIBIT A
CERTIFICATE OF DESIGNATION
OF
1996 CONVERTIBLE PREFERRED STOCK
OF INTERNATIONAL NURSING SERVICES, INC.
INTERNATIONAL NURSING SERVICES, INC., a corporation organized under the
laws of the State of Colorado (the "Company") hereby designates a class of
Preferred Stock as follows:
I. Designation and Amount.
360 shares of the authorized shares of Preferred Stock of the Company
are hereby designated "1996 Convertible Preferred Stock" (the "1996 Convertible
Preferred Stock"). All shares of 1996 Convertible Preferred Stock shall rank
prior, as to both payment of dividends and as to distribution of assets upon the
voluntary or involuntary liquidation, dissolution or winding up of the Company
to all of the Company's now or hereafter issued common stock (the "Common
Stock"), and any other series of capital stock of the Company, other than the
12% Cumulative Convertible Preferred Stock, that is not, by its terms, senior to
or pari passu with the 1996 Convertible Preferred Stock, and shall rank junior
to the 12% Cumulative Convertible Preferred Stock of the Company.
II. Dividends.
(1) Except as specifically described herein, the registered owners of
1996 Convertible Preferred Stock shall not be entitled to receive any dividends.
If no registration statement under the Securities Act of 19933 (the "Act")
registering the shares of Common Stock of the Company into which the 1996
Convertible Preferred Stock is convertible is effective on the date 180 days
after the date of issuance of the first shares of 1996 Convertible Preferred
Stock to be issued (the "Original Issuance Date") or if any such registration
statement ceases to be effective at any time prior to the third anniversary of
the date on which such registration statement first becomes effective, the
registered owners of 1996 Convertible Preferred Stock shall be entitled to
receive out of assets of the Company legally available therefor, dividends for
any period, if any, following the Original Issuance Date during which such
registration statement is not effective at the rate of 10% per annum for the
first 90 days during which such registration statement is not effective and at
the rate of 18% per annum for each additional day during which such registration
statement is not effective. Dividends shall accrue without interest and be
cumulative and shall be payable to the registered owners of 1996 Convertible
Preferred Stock out of assets of the Company legally available therefore,
quarterly in arrears on the last day of each fiscal quarter of the Company.
Dividends shall be payable to shareholders of record on such record dates not
exceeding 30 days preceding each such dividend payment date, as shall be fixed
for that purpose by the Board of Directors in advance of such dividend payment
date.
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(2) So long as any share of 1996 Convertible Preferred Stock is
outstanding, the Company shall not (a) declare or pay any dividend or make any
other distribution (other than dividends payable solely in Common Stock or other
capital stock ranking junior as to dividend rights to the 1996 Convertible
Preferred Stock) on the Common Stock or any other class or series of capital
stock of the Company ranking, as to dividends, junior to the 1996 Convertible
Preferred Stock, or set funds aside therefor, or (b) purchase, redeem or
otherwise acquire, any of the Common Stock, or any other class of capital stock
of the Company ranking junior as to dividends to the 1996 Convertible Preferred
Stock (other than in exchange for Common Stock or other class of capital stock
ranking junior as to dividends to the 1996 Convertible Preferred Stock) or set
funds aside therefor.
(3) If at any time any dividend on any capital stock of the Company
ranking senior as to dividends to the 1996 Convertible Preferred Stock ("Senior
Dividend Stock") shall be in default, in whole or in part, then no dividend
shall be paid or declared and set apart for payment on the 1996 Convertible
Preferred Stock unless and until all accrued and unpaid dividends with respect
to the Senior Dividend Stock shall have been paid or declared and set apart for
payment. No dividends shall be paid or declared and set apart for payment on the
1996 Convertible Preferred Stock or on any capital stock ranking pari passu with
the 1996 Convertible Preferred Stock in the payment of dividends (the "Parity
Dividend Stock") for any period unless a pro rata dividend has been, or
contemporaneously is, paid or declared and set apart for payment on the Parity
Divided Stock or the 1996 Convertible Preferred Stock, as the case may be, so
that the amount of dividends paid or declared and set aside for payment per
share on the 1996 Convertible Preferred Stock and the Parity Dividend Stock
shall in all cases bear to each other the sam ratio that accrued and unpaid
dividend per share on the shares of 1996 Convertible Preferred Stock and the
Parity Dividend Stock bear to each other.
(4) Subject to the foregoing provisions, the holders of Common Stock,
the Parity Dividend Stock and each other class of capital stock of the Company
which is junior as to dividends to the 1996 Convertible Preferred Stock shall be
entitled to receive, as and when declared by the Board of Directors out of the
remaining assets of the Company legally available therefor, such dividends
(payable in cash, capital shares or otherwise) as the Board of Directors may
from time to time determine.
(5) Any reference to "distribution" contained in this Section II shall
not be deemed to include any distribution made in connection with any
liquidation, dissolution, or winding up of the Company.
III. Liquidation.
(1) In the event of any liquidation, dissolution or winding up of the
Company, whether voluntary or involuntary, then out of the assets of the Company
before any distribution or payment to the holders of the Common Stock or any
other class of capital stock of the Company ranking junior as to liquidation
preferences to the 1996 Convertible Preferred Stock, but after distribution to
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and subject to the rights of holders of capital stock of the Company ranking
senior as to liquidation rights to the Preferred Stock, the holders of the 1996
Convertible Preferred Stock shall be paid the Liquidation Value of the 1996
Convertible Preferred Stock then outstanding and the holders of the 1996
Convertible Preferred Stock shall be entitled to no other or further
distribution.
(2) The Liquidation Value of the 1996 Convertible Preferred Stock shall
be $10,000 per share plus the amount of any dividends which have accrued thereon
to the close of business on the date of such liquidation, dissolution or winding
up and remain unpaid, whether or not such dividends have been earned or
declared.
(3) After payment in full to the holders of (a) any capital stock
ranking senior as to liquidation rights to the 1996 Convertible Preferred Stock,
(b) the 1996 Convertible Preferred Stock and (c) any class of stock hereafter
issued that ranks on a parity as to liquidation rights with the 1996 Convertible
Preferred Stock, of the sums which such holders are entitled to receive in such
case, the remaining assets of the Company shall be distributed among and paid to
the holders of the Common Stock and any other class of capital stock of the
Company ranking junior to the 1996 Convertible Preferred Stock.
(4) If the assets of the Company available for distribution to its
shareholders shall be insufficient to permit payment in full to the holders of
the 1996 Convertible Preferred Stock and all other series of preferred shares
ranking equally as to liquidation preferences with the 1996 Convertible
Preferred Stock of sums which such holders are entitled to receive, then all of
the assets available for distribution to such holders shall be distributed among
and paid to such holders ratably in proportion to the respective amounts that
would be payable per share if such assets were sufficient to permit payment in
full.
(5) The consolidation or merger of the Company with any other
corporation or corporations or a sale of all or substantially all of the assets
of the Company shall not be deemed a liquidation, dissolution or winding up of
the Company within the meaning of this Section III.
IV. Redemption.
(1) If on July 1, 1998 (a) a registration statement under the Act
registering the Common Stock of the Company into which the 1996 Convertible
Preferred Stock is convertible is not effective or (b) the Common Stock of the
Company is not then traded on NASDAQ or another national securities exchange,
the Company shall, at the written election of the holder of any outstanding
shares of 1996 Convertible Preferred Stock received on or before July 31, 1998,
redeem such shares of 1996 Convertible Preferred Stock at the redemption price
per share of $10,000 plus any accrued and unpaid paid dividends thereon, whether
or not declared, to June 30, 1998.
(2) The redemption price for any shares of 1996 Convertible Preferred
Stock to be redeemed hereunder shall be payable in cash, out of funds legally
available therefore, as soon as
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practicable after July 31, 1998. If the Company has insufficient funds legally
available to pay the redemption price of all of the shares of 1996 Convertible
Preferred Stock tendered for redemption, the Company shall redeem as many
shares as it has funds legally available therefore pro rata among the
shareholders tendering 1996 Convertible Preferred Stock for redemption and
shall continue to be obligated to redeem the remaining shares tendered for
redemption when and as funds become legally available therefore, subject to the
right of any tendering shareholder to withdraw its election to have such shares
redeemed. Any election to have any shares of 1996 Convertible Preferred Stock
redeemed pursuant hereto shall be accompanied with the certificates
representing the shares being tendered for redemption.
V. Voting Rights.
The holders of the 1996 Convertible Preferred Stock shall have no
voting rights except as required by law.
VI. Conversion; Anti-dilution Provisions.
(1) Subject to the provisions of this Section VI, each share of 1996
Convertible Preferred Stock may be converted at the option of the holder thereof
at any time after issuance thereof through and including the third anniversary
of the issuance thereof into fully paid and non-assessable shares of Common
Stock of the Company, in the manner and upon the terms and conditions
hereinafter set forth in paragraphs (2) and (3) of this Section VI.
(2) The holder of each share of 1996 Convertible Preferred Stock may
convert such share of 1996 Convertible Preferred Stock into the number of shares
of Common Stock determined by dividing $10,000, plus any accrued but unpaid
dividends on such share of 1996 Convertible Preferred Stock, by the lesser of
(i) $1.25 or (ii) 80% of the average of the closing bid price of one share of
Common Stock during the five trading days immediately prior to the date of such
conversion as determined pursuant to subsection (3) of this Section IV of such
conversion.
(3) In order to convert the 1996 Convertible Preferred Stock into
Common Stock, the holder thereof shall surrender at the principal office of the
Company (or at such other place as the Board of Directors of the Corporation
shall have reasonably designated for the purpose) the certificate or
certificates for such 1996 Convertible Preferred Stock properly endorsed in
blank for transfer or accompanied by a proper instrument of assignment or
transfer in blank, together with a written request for conversion stating the
name or names in which such holder wishes the certificate or certificates for
such Common Stock to be issued and, if the certificate or certificates are to be
issued in a name or names other than such holder, payment by such holder of all
applicable transfer taxes. The Company shall, as soon as practicable thereafter,
issue and deliver to such holder, or to the nominee or nominees of such holder,
a certificate or certificates for the number of shares of Common Stock to which
such holder shall be entitled as aforesaid. The 1996 Convertible Preferred Stock
shall be deemed to be converted, and the person or persons in whose name or
names any certificate or certificates for Common Stock shall be issuable upon
such conversion shall be
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deemed to have become for all purposes a holder or holders of record of such
Common Stock, at the close of business on the date upon which the Company
receives the written request for conversion covering such shares (which may be
delivered by facsimile transmission). The Company will pay all issue taxes, if
any, incurred upon the issue of common Stock upon conversion of the 1996
Convertible Preferred Stock, provided that the Company will not pay any
transfer or other taxes incurred by reason of the issue of such Common Stock in
a name or names other than that in which such 1996 Convertible Preferred Stock
so converted were registered. No fractional shares shall be issued upon
conversion, and the Company shall pay cash in lieu of issuing fractional shares
based upon the closing bid price of one share of Common Stock on the business
day immediately preceding the date of conversion. If more than one certificate
representing shares of 1996 Convertible Preferred Stock shall be surrendered
for conversion at one time by the same holder, the number of full shares
issuable upon conversion thereof shall be computed on the basis of the
aggregate number of shares of 1996 Convertible Preferred Stock represented by
such certificates, or the specified portions thereof to be converted, so
surrendered. All 1996 Convertible Preferred Stock which shall have been
converted as provided in this Section VI shall no longer be deemed to be
outstanding and all rights with respect to such 1996 Convertible Preferred
Stock shall forthwith cease and terminate except for the right of the holders
thereof to receive Common Stock. Any 1996 Convertible Preferred Stock
surrendered for conversion shall be cancelled, retired and thereafter not
reissued.
(4) Protection Against Dilution.
(A) If at any time or from time to time after the date of
issuance of 1996 Convertible Preferred Stock, the Company determines to
distribute to the holders of the Common Stock (i) securities other than Common
Stock, or (ii) property other than cash, without payment therefor, then, in each
such case, the Company shall provide written notice to each holder of the 1996
Convertible Preferred Stock at least 30 days prior to the effective date of any
such distribution. During such 30 day period, the holder of the 1996 Convertible
Preferred Stock may, at its election, convert the 1996 Convertible Preferred
Stock into Common Stock of the Company and, if so converted, the holders shall
be entitled to receive such securities or property, other than cash, which are
distributable upon the Common Stock of the Company at the effective date.
(B) In case the Company shall, after the date of issuance of
any 1996 Convertible Preferred Stock, (i) pay a dividend or make a distribution
on its capital shares in Common Stock in capital stock or securities convertible
into capital stock, (ii) subdivide its outstanding shares of Common Stock into a
greater number of shares, (iii) combine its outstanding shares of Common Stock
into a smaller number of shares, or (iv) issue by reclassification of its Common
Stock any shares of capital stock of the Company, the number of shares of Common
Stock into which the 1996 Convertible Preferred Stock may be converted in effect
immediately prior thereto shall be adjusted so that the holder of any 1996
Convertible Preferred Stock surrendered for conversion immediately thereafter
would be entitled to receive the number of shares of Common Stock or other
capital shares of the Company which he would have owned immediately following
such action had such 1996 Convertible Preferred Stock been converted immediately
prior
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thereto. An adjustment made pursuant to this subsection shall become effective
immediately after the record date of such transaction. If, as a result of an
adjustment made pursuant to this subsection, the holder of any 1996 Convertible
Preferred Stock thereafter surrendered for conversion shall become entitled to
receive two or more classes of capital shares of the Company, the Board of
Directors shall determine the allocation of the adjustment between or among
such classes of capital shares.
(C) Whenever the number of shares of Common Stock into which
the 1996 Convertible Preferred Stock may be converted is adjusted as provided in
this Section VI and upon any modification of the rights of a holder of 1996
Convertible Preferred Stock in accordance with this Section VI, the Company
shall promptly mail to the holders of the 1996 Convertible Preferred Stock a
certificate of the chief financial officer or secretary of the Company setting
forth the number of shares of Common Stock into which the 1996 Convertible
Preferred Stock is convertible after such adjustment or the effect of such
modification, a brief statement of the facts requiring such adjustment or
modification and the manner of computing such adjustment or modification.
(D) In case of any consolidation or merger to which the
Company is a party other than a merger or consolidation in which the Company is
the continuing corporation, or in case of any sale or conveyance to another
entity of the property of the Company as an entirety or substantially as an
entirety, or in the case of any statutory exchange of securities with another
corporation (including any exchange effected in connection with a merger of a
third corporation into the Company), the holders of 1996 Convertible Preferred
Stock shall have the right thereafter to convert such 1996 Convertible Preferred
Stock into the kind and amount of securities, cash or other property which such
holders would have owned or have been entitled to receive immediately after such
consolidation, merger, statutory exchange, sale or conveyance had such 1996
Convertible Preferred Stock been converted immediately prior to the effective
date of such consolidation, merger, statutory exchange, sale or conveyance, and
effective provision shall be made in the Articles of Incorporation of the
resulting or surviving corporation or otherwise so that the provisions set forth
in this paragraph (D) of Section VI for the protection of the conversion rights
of the 1996 Convertible Preferred Stock shall thereafter be applicable, as
nearly as reasonably may be, to any such shares and other securities and
property deliverable upon conversion of the 1996 Convertible Preferred Stock
remaining outstanding or other convertible securities received by the holders in
place thereof, and any such resulting or surviving corporation shall expressly
assume the obligation to deliver, upon the exercise of the conversion privilege,
such shares, securities or property as the holders of the 1996 Convertible
Preferred Stock, or other convertible securities receive in place thereof, shall
be entitled to receive pursuant to the provisions hereof, and to make provisions
for the protection of the conversion right as above provided. The provisions of
this subsection (D) shall similarly apply to successive consolidation, merger,
statutory exchanges, sales or conveyances. Notice of any such consolidations,
mergers, statutory exchanges, sales or conveyances and of said provisions so
proposed to be made, shall be mailed to the holders of 1996 Convertible
Preferred Stock not less than 30 days prior to such event. A sale of all or
substantially all of the assets of the Company for consideration consisting
primarily of securities shall be deemed a consolidation or merger for the
foregoing purposes.
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(5) Reservation. The Company shall at all times reserve and
keep available out of its authorized but unissued Common Stock, solely for the
purpose of effecting the conversion of 1996 Convertible Preferred Stock, the
number of shares of Common Stock from time to time issuable upon the conversion
of 1996 Convertible Preferred Stock then outstanding and shall take all such
action and obtain all such permits or orders as may be necessary to enable the
Company lawfully to issue Common Stock upon the conversion of 1996 Convertible
Preferred Stock. In addition, the Company shall also reserve and keep available
such other securities and property as may from time to time be deliverable upon
conversion of the 1996 Convertible Preferred Stock and shall take all such
action and obtain all such permits or orders as may be necessary to enable the
Company lawfully to deliver such other securities and property upon the
conversion of such 1996 Convertible Preferred Stock. So long as any 1996
Convertible Preferred Stock shall be outstanding, the Company will use its best
efforts to take all corporate action necessary in order that the Company may
validly and lawfully issue fully paid and nonassessable Common Stock upon
conversion of the 1996 Convertible Preferred Stock, including, without
limitation, the calling of a special shareholders meeting for the purpose of
increasing the number of authorized but unissued shares of Common Stock of the
Company as may be necessary.
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Exhibit B
Neither this Warrant nor the shares of Common Stock issuable on exercise of this
Warrant have been registered under the Securities Act of 1933. None of such
securities may be transferred in the absence of registration under such Act and
registration or qualification under applicable state securities laws or an
opinion of counsel to the effect that such registrations or qualifications are
not required.
INTERNATIONAL NURSING SERVICES, INC.
WARRANT
DATED: July __, 1996
Number of Shares:
Holder:
Address:
- -------------------------------
THIS CERTIFIES THAT the holder of this Warrant ("Holder") is entitled to
purchase from INTERNATIONAL NURSING SERVICES, INC., a Colorado corporation
(hereinafter called the "Company"), at $2.50 per share the number of shares of
the Company's common stock set forth above ("Common Stock"). This Warrant shall
expire on the third anniversary of the date of the date of issuance of this
Warrant, but such expiration shall be extended by one day for each day after
February 1, 1997 on which the registration statement referred to in an agreement
of even date herewith is not in effect with respect to the shares purchasable
under the Warrant.
1. This Warrant and the Common Stock issuable on exercise of this
Warrant (the "Underlying Shares") may be transferred, sold, assigned or
hypothecated, only if registered by the Company under the Securities Act of 1933
(the "Act") and registered or qualified under any applicable state securities
laws, or if the Company has received from counsel to the Holder who is
reasonably satisfactory to the Company a written opinion which is reasonably
satisfactory to the Company to the effect that registration of the Warrant or
the Underlying Shares is not necessary in connection with such transfer, sale,
assignment or hypothecation. The Warrant and the Underlying Shares shall be
appropriately legended to reflect this restriction and stop transfer
instructions shall apply.
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2. The Holder is entitled to certain registration rights under
an agreement of even date herewith.
3. (A) Any permitted assignment of this Warrant shall be effected by
the Holder by (i) executing the form of assignment at the end hereof, (ii)
surrendering the Warrant for cancellation at the office of the Company,
accompanied by the opinion of counsel to the Holder referred to above; and (iii)
unless in connection with an effective registration statement which covers the
sale of this Warrant and or the shares underlying the Warrant, delivery to the
Company of a statement by the transferee (in a form acceptable to the Company
and its counsel) that such Warrant is being acquired by the transferee for
investment and not with a view to its distribution or resale; whereupon the
Company shall issue, in the name or names specified by the Holder (including the
Holder) new Warrants representing in the aggregate rights to purchase the same
number of Shares as are purchasable under the Warrant surrendered. Such Warrants
shall be exercisable immediately upon any such assignment of the number of
Warrants assigned. The transferor will pay all relevant transfer taxes.
Replacement warrants shall bear the same legend as is borne by this Warrant.
4. The term "Holder" should be deemed to include any permitted record
transferee of this Warrant.
5. The Company covenants and agrees that all shares of Common Stock
which may be issued upon exercise hereof will, upon issuance, be duly and
validly issued, fully paid and non-assessable and no personal liability will
attach to the holder thereof. The Company further covenants and agrees that,
during the periods within which this Warrant may be exercised, the Company will
at all times have authorized and reserved a sufficient number of shares of
Common Stock for issuance upon exercise of this Warrant and all other Warrants.
6. This Warrant shall not entitle the Holder to any voting rights
or other rights as a stockholder of the Company.
7. In the event that as a result of reorganization, merger,
consolidation, liquidation, recapitalization, stock split, combination of shares
or stock dividends payable with respect to such Common Stock, the outstanding
shares of Common Stock of the Company are at any time increased or decreased or
changed into or exchanged for a different number or kind of share or other
security of the Company or of another corporation, then appropriate adjustments
in the number and kind of such securities then subject to this Warrant and/or
the exercise price of this Warrant shall be made effective as of the date of
such occurrence so that both the position of the Holder upon exercise and the
total exercise price payable on such exercise will be the same as they would
have been had Holder owned immediately prior to the occurrence of such events
the Common Stock subject to this Warrant. Such adjustment shall be made
successively whenever any event listed above shall occur and the Company will
notify the Holder of the Warrant of each such adjustment. Any fraction of a
share resulting from any adjustment shall be eliminated and the price per share
of the remaining shares subject to this Warrant adjusted accordingly.
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8. The rights represented by this Warrant may be exercised at any time
within the period above specified by (i) surrender of this Warrant at the
principal executive office of the Company (or such other office or agency of the
Company as it may designate by notice in writing to the Holder at the address of
the Holder appearing on the books of the Company); (ii) payment to the Company
of the exercise price for the number of Shares specified in the above-mentioned
purchase form together with applicable stock transfer taxes, if any; and (iii)
unless in connection with an effective registration statement which covers the
sale of the shares underlying the Warrant, the delivery to the Company of a
statement by the Holder (in a form acceptable to the Company and its counsel)
that such Shares are being acquired by the Holder for investment and not with a
view to their distribution or resale.
The certificates for the Common Stock so purchased shall be delivered
to the Holder within a reasonable time, not exceeding three business days after
all requisite documentation has been provided, after the rights represented by
this Warrant shall have been so exercised, and shall bear a restrictive legend
with respect to any applicable securities laws.
9. This Warrant shall be governed by and construed in accordance with
the laws of the State of Colorado. The Colorado courts shall have exclusive
jurisdiction over this instrument and the enforcement thereof. Service of
process shall be effective if by certified mail, return receipt requested. All
notices shall be in writing and shall be deemed given upon receipt by the party
to whom addressed. This instrument shall be enforceable by decrees of specific
performances well as other remedies.
IN WITNESS WHEREOF, INTERNATIONAL NURSING SERVICES, INC. has caused
this Warrant to be signed by its duly authorized officers under Its corporate
seal, and to be dated as of the date set forth above.
INTERNATIONAL NURSING SERVICES, INC.
By________________________________
Title:____________________________
In the presence of:
