SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
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Date of Report (Date of earliest event reported): August 1,
1997
Saf T Lok Incorporated
(Exact name of registrant as specified in its charter)
Florida 1-11968 65-0142837
(State of (Commission (IRS Employer
Iden-
Incorporation) File Number) tification
No.)
18245 S.E. Federal Highway, Tequesta, Florida 33469
(Address of principal executive offices)
Registrant's telephone number, including area code: 561-743-
5625
Item 9: Sales of Securities Pursuant to Regulation S.
On August 1, 1997, Saf T Lok, Incorporated (the "Company")
completed a sale of convertible debentures in the principal
amount of $75,000 to foreign purchasers pursuant to
Regulation S promulgated under the Securities Act of 1933.
The convertible debentures have a term of five years with 8%
interest per year with the interest payable in shares of the
Company's common stock. The holders of the convertible
debentures have the right to convert the principal amount
and accrued interest on the debentures at any time from the
41st day after the issuance of the debenture at the
conversion price equal to 70% of the average closing bid
price of the Company's common stock during the last five
trading days prior to the effective date of the conversion.
The number of shares of common stock which would be issuable
upon conversion of the principal amount assuming a
conversion price of $0.74 (based on an average closing bid
price of $1.06) is 101,351 shares. The Company has the
right to pre-pay the principal amount of the debentures in
cash (and the accrued interest in shares of the Company's
common stock), provided the Company follows the procedure
set forth in the debentures. The form of each convertible
debenture is attached hereto as Exhibit 4.1.
In connection with the placement of this sale of convertible
debentures to the foreign purchasers, the investment banking
firm of Alexander, Wescott & Co., Inc. received compensation
consisting of a cash commission of 10% of the offering price
of the debentures sold to investors, a 3% non-accountable
expense allowance, and a stock purchase warrant for shares
of common stock equal to 10% of the aggregate number of the
shares received by the holders of the debentures upon the
conversion of such debentures at an exercise price equal to
120% of the conversion price per share, calculated for each
instance in which the conversion of a debenture takes place.
The stock purchase warrant is attached hereto as Exhibit
99.1.
EXHIBITS
Exhibit Number Exhibit Table
4.1 Form of Convertible Debenture
99.1 Stock PurchaseWarrant
SIGNATURES
Pursuant to the requirements of the
Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.Saf T Lok, Incorporated
Date: August 19, 1997
By:_/s/John L. Gardner_______________
John Gardner, President and
Chief Executive Officer
<PAGE>
INDEX TO EXHIBITS
Exhibit Description
99.1 Form of Convertible Debenture
99.2 Stock Purchase Warrant
<PAGE>
EXHIBIT 4.1 8% CONVERTIBLE DEBENTURE
Number $
THIS DEBENTURE AND THE COMMON STOCK UNDERLYING THIS
DEBENTURE HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"). THEY MAY
NOT BE SOLD OR OFFERED FOR SALE WITHIN THE UNITED STATES OR
TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS (I) AS
PART OF THEIR DISTRIBUTION AT ANY TIME OR (II) OTHERWISE
UNTIL AT LEAST FORTY DAYS AFTER____________, 1997, EXCEPT IN
EITHER CASE IN ACCORDANCE WITH REGULATION S UNDER THE ACT.
TERMS USED IN THIS LEGEND HAVE THE MEANING GIVEN TO THEM BY
REGULATION S.
SAF T LOK, INCORPORATED
Tequesta, Florida
June ___,1997
Saf T Lok, Incorporated, a Florida corporation (the
"Company"), for value received, promises to pay to
_____________of ____________.(address), or registered
assigns, the principal sum of ________________ Dollars
($________) on June 31, 2002 (the "Maturity Date"), which
principal sum shall be payable in such coin or currency of
the United States of America which at the time of payment is
legal tender for public and private debts. Interest on such
principal sum shall accrue at the rate of eight percent (8%)
per year from the date hereof, and shall be payable in the
form of shares of common stock of the Company when (and not
before) payment of such principal sum has been made or upon
the conversion of this Debenture into shares of common stock
of the Company as elsewhere provided herein. Payment of
principal and interest shall be made at the offices of the
Company in Tequesta, Florida. The number of shares of
common stock shall be determined as provided below. Such
shares shall be mailed to the registered owner of this
Debenture at the address appearing on the books of the
Company.
This Debenture is one of a duly authorized issue of the
Company's debentures in the aggregate amount of up to Two
Million Dollars ($2,000,000.00) issued in minimum
denominations of One Thousand Dollars ($1,000.00) all of
like tenure and maturity, except variations necessary to
express the number and payee of each debenture.
1. Equal Rank. All debentures of this issue rank
equally and ratably without priority over one another.2.
Conversion of Debentures and Payment of Interest. The
holder of this Debenture may at any time from the forty-
first (41st) day after the issuance of this Debenture
convert the principal amount and accrued interest on this
Debenture into the Company's common stock at the conversion
price equal to seventy percent (70%) of the average closing
bid price of the Company's common stock during the last five
(5) trading days prior to the effective date of the
conversion, as reported on the NASDAQ Small Cap Issues
market and/or other market on which the principal public
trading takes place for the Company's common stock (the
"Conversion Price"). The number of shares to be received
upon such conversion shall be determined by dividing the
principal and accrued interest on this Debenture through the
effective date of the conversion by the Conversion Price.
To convert this Debenture, the holder hereof must surrender
this Debenture at the office of the Company, together with a
written Notice of Conversion in the form annexed to this
Debenture, properly filled out and executed by the holder
hereof. If shares of common stock issuable upon such
conversion are to be registered in the name of anyone other
than the registered holder of this Debenture, such Notice of
Conversion shall be accompanied by a written instrument of
transfer in a form satisfactory to the Company, properly
completed and executed. Facsimile copies of such documents
will be accepted by the Company, provided that the
originally executed documents are provided to the Company
within five (5) business days after the Company has received
such facsimile copies.
If any interest shall be payable on the Debenture when such
Debenture is not being converted pursuant to the terms
hereof, such interest shall be payable in shares of the
Company's common stock, at a per-share price computed at 70%
of the average bid price as set forth above in the Paragraph
2, except that such average bid price shall be calculated
for the last five trading days prior to the date such
interest payment is due.
3. Right of Repayment. At any time commencing one year
after the date of issuance of this Debenture, the Company
shall have the right to pre-pay this Debenture, along with
all other outstanding debentures in this issue, by following
the procedure set forth in this paragraph. Upon electing to
prepay all, and not less than all, of the outstanding
debentures in this issue, the Company shall notify each
debenture holder in writing of this election. This notice
shall state (a) the Company has elected to pre-pay all of
the outstanding debentures on this issue; (b) the date such
prepayment will occur which shall be not less than 60 days
from the date of the notice (the "Prepayment Date"); (c)
that the holder has the right to convert this Debenture
prior to the Prepayment Date by notifying the Company
pursuant to the provisions of paragraph 2, provided the
Company receives such notice at least one day prior to the
Prepayment Date and (d) that the Company has the financial
capability to prepay all of the outstanding debentures in
this issue along with an explanation for such prepayment.
If the Debenture has not been converted by the Prepayment
Date, (a) the holder of this Debenture shall promptly tender
this Debenture to the Company upon receipt of the principal
of this Debenture in cash and the accrued interest on this
Debenture in common stock as provided above and (b) this
Debenture shall, on the Prepayment date, convert to the
right to receive such prepayment only.
4. Adjustments to Conversion. If the Company is
recapitalized, consolidated with or merged into any other
company, or sells or conveys to any other company all or
substantially all of its assets as an entity, provisions
shall be made as part of the terms of the recapitalization,
consolidation, merger, sale or conveyance so that the holder
of this Debenture may receive, in lieu of the common stock
otherwise issuable to the holder upon conversion or payment
of this Debenture, at the same conversion ratio, the same
kind and amount of securities or assets as may be
distributable upon the recapitalization, consolidation,
merger, sale or conveyance with respect to the common stock
into which this Debenture is convertible.
5. Registration Rights. For a three-year period
following the issuance of this Debenture, the holder of this
Debenture shall have the right to require the Company to
include in any registration statement filed with the
Securities and Exchange Commission for the sale of shares of
common stock in the Company the common stock underlying this
Debenture; provided that if the registration statement
pertains to an underwritten offering, the inclusion of any
such shares shall be subject to an underwriter's cutback if
the underwriter determines, in good faith, that the
inclusion of any such shares will adversely affect the
offering by the Company with such cutback to be accomplished
on a pro rata basis among all selling shareholders. In the
event that the holder of this Debenture (or the holder of
common stock underlying this Debenture) owns less than one
percent (1%) of the Company's outstanding shares of common
stock and such holder is then able to sell all of such
shares of common stock pursuant to Rule 144, the holder
shall not have the right to require the Company to include
any of the shares of common stock underlying this Debenture
in such registration statement.
Commencing ninety (90) days after the issuance of this
Debenture, the holders of more than twenty-five percent
(25%) of the outstanding principal amounts of the debentures
in this issue, or the holders of at least thirty percent
(30%) of the shares of common stock into which the
debentures are convertible, may, upon written demand,
require the Company to file and to use its best efforts to
make effective, a registration statement pertaining to the
shares underlying the debentures, or the common stock held
as the result of the conversion of such debentures, with the
Securities and Exchange Commission for resale of said
shares. This right may not be exercised during any period
in which the Company is in the process of preparing and
filing a registration statement for the sale of shares of
common stock by the Company or for sixty (60) days following
the effectiveness of such registration statement. This
registration right shall not be exercisable unless one or
more of the holders of debentures (or holders of common
stock through the conversion of debentures) making such
demand in the aggregate holds more than one percent (1%) of
the outstanding shares of common stock in the Company at the
time demand is made for this registration.
In the event that the Company files a registration statement
pursuant to this provision or which will include shares
underlying the debentures pursuant to this provision, all
expenses associated with the preparation and filing of such
registration statement, including legal and accounting fees
for the Company, shall be paid by the Company. Such
expenses shall not include any underwriting fee or selling
commission payable with respect to the underlying shares
included in such registration.
6. Fractional Shares. In lieu of issuing any fraction
of a share upon the conversion of this Debenture, the
Company shall pay to the holder of this Debenture, for any
fraction of a share otherwise issuable upon the conversion,
cash equal to the same fraction of the then current per
share Conversion Price.
7. Covenants of Company. The Company covenants and
agrees that, so long as this Debenture shall be outstanding,
it will:
(i) Promptly pay and discharge all lawful taxes,
assessments, and governmental charges or levies imposed upon
the Company or upon its income and profits, or upon any of
its property, before the same shall become in default, as
well as all lawful claims for labor, materials and supplies
which, if unpaid, might become a lien or charge upon such
properties or any part thereof; provided, however, that the
Company shall not be required to pay and discharge any such
tax, assessment, charge, levy or claim so long as the
validity thereof shall be contested in good faith by
appropriate proceedings, and the Company shall set aside on
its books adequate reserves with respect to any such tax,
assessment, charge, levy or claim so contested;
(ii) Do or cause to be done all things necessary to
preserve and keep in full force and effect its corporate
existence, rights and franchises and comply with all laws
applicable to the Company as its counsel may advise;(iii)
At all times maintain, preserve, protect and keep its
property used or useful in the conduct of its business in
good repair, working order and condition, and from time to
time make all needful and proper repairs, renewals,
replacements, betterments and improvements thereto, so that
the business carried on in connection therewith may be
properly and advantageously conducted at all times;
(iv) Keep adequately insured, by financially sound
reputable insurers, all property of a character usually
insured by similar corporations and carry such other
insurance as is usually carried by similar corporations;(v)
At all times keep true and correct books, records and
accounts;
(vi) At all times reserve for issuance and delivery upon
any conversion of this Debenture and the payment of interest
thereon all shares of the Company's Common Stock receivable
by the Holder upon any such conversion and payment; and(vii)
In the event of any occurrences requiring an adjustment,
adjust the shares of Common Stock issuable upon any
conversion of this Debenture in an appropriate and fair
manner in accordance with the provisions of this Debenture.
8. No Short Selling. By holding this Debenture, the
holder agrees that so long as this Debenture is held by the
holder and for a period of thirty (30) days following the
conversion of this Debenture, the holder will not engage in
short selling of the Company's common stock, directly or
indirectly, and will not enter into any form of agreement,
oral or written, whereby the holder agrees to allow a person
or entity to borrow shares of common stock underlying this
Debenture for the purpose of short selling such shares. The
holder also agrees not to sell this Debenture to any person
or entity who has the intention of utilizing the shares
underlying this Debenture to effectuate a short sale or to
cover a short sale of the Company's common stock.
9. Events of Default.
Payment of the principal and interest due under this
Debenture shall become and be due and payable upon written
demand made by the Holder hereof if one or more of the
following events, herein called events of default, shall
happen and be continuing:
(i) Default in the payment of the principal and accrued
interest on this Debenture when and as the same shall become
due and payable, whether by acceleration or otherwise;
(ii) Default in the due observance or performance of any
covenant, condition or agreement on the part of the Company
to be observed or performed pursuant to the terms hereof, if
such default shall continue uncured for 30 days after
written notice, specifying such default, shall be given to
the Company by the Holder of the Debenture;
(iii) Application for, or consent to, the appointment of
a receiver, trustee or liquidator of the Company or of its
property;
(iv) Admission in writing of the Company's inability to
pay its debts as they mature;
(v) General assignment by the Company for the benefit of
creditors;
(vi) Filing by the Company of a voluntary petition in
bankruptcy or a petition or an answer seeking
reorganization, or an arrangement with creditors; or
(vii) Entering against the Company of a court order
approving a petition filed against it under the Federal
bankruptcy laws, which order shall not have been vacated or
set aside or otherwise terminated within 120 days.
The Company agrees that the notice of the occurrence of any
event of default will be promptly given to the Holder at his
or her registered address by Certified Mail. In case any
one or more of the events of default specified above shall
happen and be continuing, the Holder may proceed to enforce
the payment of this Debenture or to enforce any other legal
or equitable rights as such Holder may deem appropriate.
10. Registered Owner. The Company may treat the person
or persons whose name or names appear on this Debenture as
the absolute owner or owners of this Debenture for the
purpose of receiving payment of the principal and interest
due on this Debenture and for all other purposes.
11. This Debenture Is Unsecured and Is an Obligation of
the Company. This Debenture constitutes an unsecured
obligation of the Company and is an obligation of the
Company only. No recourse shall be had for payment of any
principal or interest hereon against any shareholder,
officer, director or employee of the Company, either
directly or through the Company.
12. Securities Laws. The holder of this Debenture
understands that this Debenture and the shares of underlying
this debenture are not registered under the Securities Act
of 1933, as amended, or any state securities laws. The
holder of this Debenture agrees not to sell this Debenture
in the United States of America except pursuant to an
effective registration pertaining to the Debenture or the
shares of common stock or pursuant to an exemption from
registration under such laws, including any exemption
afforded under Regulation S of the Securities and Exchange
Commission.
13. Miscellaneous.
(i) No remedy herein enumerated is intended to be exclusive
of any other remedy allowed by law, but each and every
remedy shall be cumulative and in addition to every other
remedy herein enumerated or allowed by law.
(ii) No failure or delay to exercise any right or power or
any partial exercise, accruing upon any default hereunder
shall impair any such right or power or be construed to be a
waiver of any such default or any acquiescence therein.
(iii) This Debenture and all rights, benefits, powers, and
obligations hereof shall inure to the benefit and shall
bind, respectively, the successors and assigns of the Holder
and the Company.
(iv) In the event any part or parts of this Debenture shall
be invalid or unenforceable for any reason, then such
invalid or unenforceable part or parts shall be deemed and
held to be separate and severable, and the remainder of this
Debenture shall continue in full force and effect.
(v) The Company agrees to pay and to save the Holder
harmless from all cost, liability or expense, including
reasonable counsel fees and expenses, in connection with the
enforcement of the Holder's rights under this Debenture.
(vi) Upon receipt by the Company of evidence reasonably
satisfactory to it of the loss, theft or destruction of the
Debenture, and in the case of loss, destruction or
mutilation upon receipt by the Company of a reasonably
satisfactory indemnification, and upon surrender and
cancellation of the Debenture, if mutilated, the Company
shall execute and deliver a new Debenture of like tenor and
date. Any such new Debenture executed and delivered shall
constitute an additional contractual obligation on the part
of the Company, and the Debenture so lost, stolen,
destroyed, or mutilated shall not be at any time enforceable
by anyone. Upon the request of the Holder, this Debenture
may be replaced by Debentures of other denominations (of at
least $1,000 principal amount each) totalling, in aggregate
principal amount, the principal amount of this Debenture,
provided that this Debenture shall be surrendered and
cancelled at the time of issuance of such replacement
Debentures.
IN WITNESS WHEREOF, the Company has signed this Debenture
this ______ day of August, 1997.
SAF T LOK, INCORPORATED
By:____________________________________________
\s\ John L. Gardner, President
ATTEST:
By: ____________________________________________
Secretary
NOTICE OF CONVERSION
The undersigned, the holder of Debenture No.
, issued by Saf T Lok, Incorporated, hereby elects to
convert the Debenture and all accrued interest into shares
of common stock effective as of the date the Company
receives thus Notice pursuant to Paragraph 2 (Conversion) of
such Debenture.
Please send a certificate for the appropriate number of
shares of common stock in the Company to the undersigned
at__________________________________________________________
____________________________________________________________
_____________________________________
__________________________
Print Name of Holder
_________________________
Signature of Authorized Person
Date:___________________________
PLEASE SEND THIS FORM BY FACSIMILE TRANSMISSION TO THE
COMPANY AT (561) 745-6601 WITH THE ORIGINALLY SIGNED FORM
SENT BY U.S. MAIL TO THE COMPANY. THE EFFECTIVE DATE FOR
CONVERSION SHALL BE THE DATE ON WHICH THE COMPANY RECEIVES
EITHER THE FACSIMILE COPY OR THE ORIGINAL FORM, WHICHEVER IS
RECEIVED FIRST.
EXHIBIT 99.1
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "1933
ACT") AND MAY NOT BE SOLD, OFFERED FOR SALE, ASSIGNED,
TRANSFERRED OR OTHERWISE DISPOSED OF, UNLESS REGISTERED
PURSUANT TO THE PROVISIONS OF THAT ACT OR AN OPINION OF
COUNSEL IS OBTAINED STATING THAT SUCH DISPOSITION IS IN
COMPLIANCE WITH AN AVAILABLE EXEMPTION FROM SUCH
REGISTRATION.
VOID AFTER 5:00 P.M. EASTERN TIME ON JULY 15, 2002
SAF T LOK, INCORPORATED
(Incorporated under the laws of the State of
Florida )
Warrant Agreement for the Purchase of
Shares of Common Stock
No. AWC - 1
FOR VALUE RECEIVED, SAF T LOK, INCORPORATED (the "Company"),
a Florida corporation, hereby certifies that Alexander,
Wescott & Co., Inc. or its permitted assigns (collectively
referred to as the "Holder") is entitled, subject to the
provisions of this Warrant, to purchase from the Company,
during the period commencing on the date of this Warrant and
expiring at 5:00 p.m. Eastern Time on July 15, 2002 (the
"Expiration Date") the number of fully paid and non-
assessable shares of the Company's Common Stock (the
"Warrant Shares"), in an amount to be determined as set
forth below, at an exercise price per share (the "Exercise
Price") to be determined as set forth below.
The term "Common Stock" means, unless the context otherwise
indicates, the Common Stock of the Company as constituted on
the date hereof (the "Base Date"), together with any other
equity securities that may be issued by the Company in
addition thereto or in substitution therefore. The number
of shares of Common Stock to be received upon the exercise
of this Warrant, and the Exercise Price, may be subject to
adjustment from time to time as hereinafter set forth. The
term "Company" means, unless the context otherwise
indicates, and includes the corporation named above as well
as (i) any immediate or more remote successor corporation
resulting from the merger or consolidation of the Company
(or any immediate or more remote successor corporation of
the Company) with another corporation, or (ii) any
corporation to which the Company (or any immediate or more
remote successor corporation of the Company) has transferred
its property or assets as an entirety or substantially as an
entirety.
The Holder agrees with the Company that this Warrant is
issued, and all the rights hereunder shall be held subject
to, all of the conditions, limitations and provisions set
forth herein.
1. Calculation of Warrant Shares. The number of
Warrant Shares purchasable hereunder shall be equal to ten
percent (10%) of the aggregate number of all shares of
Common Stock received by the holders of the Company's 8%
Convertible Debentures issued in June and July 1997
("Debentures") upon the conversion of such Debentures into
shares of Common Stock in accordance with the terms of such
Debentures. The Company shall promptly notify the Holder
upon each conversion of such Debentures, specifying the date
and amount of such conversion, the conversion price per
share as calculated in accordance with the terms of the
Debentures, and the number of shares of Common Stock issued
in each instance.
2. Determination of Exercise Price. The Exercise Price
shall be equal to one hundred twenty percent (120%) of the
conversion price per share, calculated for each instance in
which the conversion of the Debentures takes place as set
forth in Section 1 above. The Company shall promptly notify
the Holder of the Exercise Price, in the same manner and at
the same time as is provided in Section 1 with respect to
the number of Warrant Shares.3. Expiration of Warrant.
The Warrant shall expire at 5:00 p.m. Eastern Time on the
Expiration Date or, if such day is a day on which banking
institutions in New York are authorized by law to close,
then on the next succeeding day that shall not be such a
day.4. Exercise of Warrant. This Warrant may be
exercised in whole or in part at any time after the date
hereof or at any other time as specifically provided for
herein, by presentation and surrender of this Warrant to the
Company at its principal office, or at the office of its
stock transfer agent, if any, with the Warrant Exercise Form
attached hereto duly executed and accompanied by payment
(either in cash or by certified or official bank check,
payable to the order of the Company) of the Exercise Price
for the number of shares specified in such form, together
with instruments of transfer, if appropriate, duly executed
by the Holder or his or her duly authorized attorney. 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, subject to all of the
conditions, limitations, and provisions set forth herein,
evidencing the rights of the Holder thereof to purchase the
balance of the shares purchasable hereunder. Upon receipt
by the Company of this Warrant, together with payment of the
Exercise Price, 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. The Holder shall pay any
and all documentary stamp or similar issue or transfer taxes
payable in respect of the issue or delivery of shares of
Common Stock on exercise of this Warrant.
5. Reservation of Shares. The Company will at all times
reserve for issuance and delivery upon exercise of this
Warrant all shares of Common Stock or other shares of
capital stock of the Company (and other securities) from
time to time receivable upon exercise of this Warrant. All
such shares (and other securities) shall be duly authorized
and, when issued upon such exercise, shall be validly
issued, fully paid and non-assessable and free of all
preemptive rights.6. Fractional Shares. No fractional
shares or scrip representing fractional shares shall be
issued upon the exercise of this Warrant, but, if the Holder
is entitled to any fractional share upon such exercise, the
Company shall pay the Holder an amount equal to the fair
market value of such fractional share of Common Stock, in
lieu of each fraction of a share otherwise called for upon
any exercise of this Warrant, as determined by the Company's
Board of Directors. 7. 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 or Holders
thereof to purchase in the aggregate the same number of
shares of Common Stock purchasable hereunder. 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 duly executed and funds sufficient to pay any
transfer tax, the Company shall, without charge (but subject
to the restrictions on transfer set forth in Sections 11 and
12 below) 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 that 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.
8. Rights of the Holder. The Holder shall not, by virtue
hereof, be entitled to any rights of a stockholder in the
company, either at law or in equity, and the rights of the
Holder are limited to those expressed in this Warrant.9.
Adjustment Provisions.
a. If the Company, at any time after the Base Date and
prior to exercise of this Warrant, shall have subdivided
its outstanding shares of Common Stock (or other securities
at the time receivable upon the exercise of the Warrant) by
recapitalization, reclassification or split-up thereof, or
if the Company shall have declared a stock dividend or
distributed shares of Common Stock to its stockholders, the
number of Warrant Shares purchasable under this Warrant
immediately prior to such exercise shall be proportionately
increased, and if the Company, prior to such exercise, shall
have at any time combined the outstanding shares of Common
Stock by recapitalization, reclassification or combination
thereof, the number of Warrant Shares subject to this
Warrant immediately prior to exercise shall be
proportionately decreased.
b. In case of any reorganization of the Company (or any
other corporation, the securities of which are at the time
receivable on the exercise of this Warrant) after the Base
Date, or in case after such Base Date the Company (or any
such other corporation) shall consolidate with or merge into
another corporation or convey all or substantially all of
its assets to another corporation, then, and in each such
case, the Holder of this Warrant upon the exercise thereof
as provided in Section 4 above, at any time after the
consummation of such reorganization, consolidation, merger
or conveyance, shall be entitled to receive the securities
or property to which such Holder would have been entitled
upon such consummation if such Holder had exercised this
Warrant immediately prior thereto.
c. In case the Company shall, after the Base Date, issue
shares of its Common Stock to any of its employees,
officers, directors, or consultants at a price less than the
then fair market value of such shares determined by the
Company's directors acting in good faith (except for
issuance of shares under a Company incentive stock option
plan approved by the Company's directors and stockholders
and not exceeding in authorization up to Ten (10%) Percent
of the Company's then outstanding shares), or shall issue
rights, warrants, options, or convertible securities (other
than in conneciton with the securities offering to which
this Warrant relates) permitting the holders thereof to
acquire shares of the Common Stock at less than the fair
market value thereof (as of the date of the issuance of such
rights, warrants, options or convertible securities), the
number of Warrant Shares and the Exercise Price shall be
proportionately adjusted so that the holder of this Warrant,
upon the exercise thereof, shall not receive any lesser
percentage ownership of the Common Stock of the Company in
return for payment of the Exercise Price than he would have
received in the absence of the issuances referred to in this
paragraph.
d. Whenever the number of Warrant Shares purchasable upon
the exercise of this Warrant is required to be subject to
adjustment, the Exercise Price shall be adjusted by
multiplying the Exercise Price in effect immediately prior
to such adjustment by a fraction (x) the numerator of which
shall be the amount of Warrant Shares which would be
purchasable upon exercise immediately prior to such
adjustment and (y) the denominator of which shall be the
number of Warrant Shares so purchasable immediately after
such adjustment.
e. The Company will not, by amendment of its Articles of
Incorporation or through reorganization, consolidation,
merger, dissolution, issue or sale of securities, sale of
assets or any other voluntary action, avoid or seek to avoid
the observance or performance of any of the terms of the
Warrant, but will at all times in good faith assist in the
carrying out of all such terms and in the taking of all such
action as may be necessary or appropriate in order to
protect the rights of the Holder of this Warrant. Without
limiting the generality of the foregoing, while any Warrant
is outstanding, the Company:
i. will not permit the par value, if any, of the shares of
stock receivable upon the exercise of this Warrant to be
above the amount payable therefor upon such exercise; and
ii. will take all such action as may be necessary or
appropriate in order that the Company may validly and
legally issue or sell fully paid and non-assessable stock
upon the exercise of all Warrants at the time outstanding.f.
In case:
i. the Company shall take a record of the holders of its
Common Stock (or other securities at the time receivable
upon the exercise of the Warrant) for the purpose of
entitling them to receive any dividend (other than a cash
dividend at the same rate as the rate of the last cash
dividend theretofore paid) or other distribution, or any
right to subscribe for, purchase or otherwise acquire any
shares of stock of any class or any other securities, or to
receive any other right; or
ii. of any capital reorganization of the Company, any
reclassification of the capital stock of the Company, any
consolidation or merger of the Company with or into another
corporation, or any conveyance of all or substantially all
of the assets of the Company to another corporation; or
iii. of any voluntary or involuntary dissolution,
liquidation or winding up of the Company; or iv.
any other event specified in this Section 9 requiring the
taking of such a record,
Then, and in each such case, the Company shall mail or cause
to be mailed to each holder of any Warrant at the time
outstanding a notice specifying, as the case may be, the
date on which a record is to be taken for the purpose of
such dividend, distribution or right, and stating the amount
and character of such dividend, distribution or right; or
the date on which such reorganization, reclassification,
consolidation, merger, conveyance, dissolution, liquidation
or winding up is to take place, and the time, if any, to be
fixed, as to which the holders of record of Common Stock (or
such other securities at the time receivable upon the
exercise of the Warrant) shall be entitled to exchange their
shares of Common Stock (or such other securities) for
securities or other property deliverable upon such
reorganization, reclassification, consolidation, merger,
conveyance, dissolution, liquidation or winding up. Such
notice shall be mailed at least twenty days prior to the
record date therein specified and this Warrant may then be
exercised prior to said record date during the term of the
Warrant and without regard to any waiting period which may
be set forth under any other provision of this Warrant.
10. Registration Rights.a. If the Company proposes, at
any time prior to the Expiration Date, to file a
registration statement with the Securities and Exchange
Commission (the Commission") on a general form for
registration under the 1933 Act and relating to securities
issued or to be issued by it, then it shall give written
notice of such proposed filing to the Holder. If, within
thirty days after the giving of such notice, the Holder
shall request in writing that all or any of the Warrant
Shares be included in such proposed registration, the
Company will also register such shares as shall have been
requested in writing. If all such Warrant Shares have been
so registered, the rights described in Section 10 (b) below
shall be of no force or effect.
b. In addition (and not as an alternative) if the Holder
shall give notice to the Company at any time prior to the
Expiration Date to the effect that such Holder desires to
register, for sale under the 1933 Act, any Warrant Shares,
then the Company will promptly, on one occasion only, no
later than 60 days after receipt of such notice, file a post-
effective amendment to any current registration statement or
a new registration statement, to the end that the Warrant
Shares designated in such notice may be publicly sold under
the 1933 Act as promptly as practicable thereafter, and the
Company will use its best effort to cause such registration
statement to become and remain effective (including the
taking of such steps as are necessary to obtain the removal
of any stop order); provided, that the Holder shall furnish
the Company with such appropriate information in connection
therewith as the Company may reasonably request in writing,
and provided further that, if such notice is received more
than four weeks before the Company is required to file its
current financial statements with the Commission, the
Company may delay filing the registration statement until
the date on which such financial statements are required to
be filed with the Commission.
c. The Holder may give the notice requiring the filing of a
registration statement under the Act as set forth in
Subsection b above on not more than one occasion prior to
the Expiration Date.
d. In connection with the filing of a registration
statement pursuant to this Section 10, the Company shall:
i. notify such Holder as to the filing and status thereof
and of all amendments thereto filed prior to the effective
date of said registration statement;ii. notify such
Holder promptly after it shall have received notice of the
time when the registration statement becomes effective or
any supplement to any prospectus forming a part of the
registration statement has been filed;
iii. prepare and file without expense to such Holder any
necessary amendment or supplement to such registration
statement or prospectus as may be necessary to comply with
the 1933 Act or advisable in connection with the proposed
distribution of the securities by such Holder;iv. take
all reasonable steps to qualify the Warrant Shares for sale
under the securities or blue sky laws of such reasonable
number of states as such Holder may designate in writing and
to register or obtain the approval of any federal or state
authority which may be required in connection with the
proposed distribution, except, in each case, in
jurisdictions in which the Company must either qualify to do
business or file a general consent to service of process as
a condition of the qualification of such securities;
v. notify such Holder of any stop order suspending the
effectiveness of the registration statement and use its
reasonable best efforts to remove such stop order;
vi. undertake to keep such registration statement and
prospectus effective for a period of nine months after its
effective date;vii. furnish to such Holder as soon as
available, copies of any such registration statement and
each preliminary or final prospectus and any supplement or
amendment required to be prepared pursuant to the foregoing
provisions of this Section, all in such quantities as such
Holder may from time to time reasonably request.
e. The Holder agrees to pay any underwriting discounts
and commissions, transfer taxes, registration fees and the
Holder's own counsel fees with respect to the Warrant Shares
being registered. The Company will pay all other costs and
expenses in connection with a registration statement to be
filed pursuant to this Section 10, including, without
limitation, the fees and expenses of counsel for the
Company, the fees and expenses of its accountants, and all
other costs and expenses incident to the preparation,
printing and filing under the Act of any such registration
statement, each prospectus and all amendments and
supplements thereto, the costs incurred in connection with
the qualification of such securities for sale in such
reasonable number of states as the Holder have designated,
including fees and disbursements of counsel for the Company,
and the costs of supplying a reasonable number of copies of
the registration statement, each preliminary prospectus,
final prospectus and any supplements or amendments thereto
to such Holder.
f. The Company agrees to enter into an appropriate cross-
indemnity agreement with any underwriter (as defined in the
1933 Act) for such Holder in connection with the filing of a
registration statement pursuant to this Section.
g. If the Company shall file any registration statement
including therein all or any part of the shares of the
Company's Common Stock held by the Holder, the Company and
each Holder shall enter into an appropriate cross-indemnity
agreement whereby the Company shall indemnify and hold
harmless the Holder against any losses, claims, damages or
liabilities (or actions in respect thereof) arising out of
or based upon any untrue statement or alleged untrue
statement of any material fact contained in such
registration statement, or any omission or alleged omission
to state therein a material fact required to be stated
therein or necessary to make statements therein not
misleading unless such statement or omission was made in
reliance upon and in conformity with written information
furnished or required to be furnished by any such Holder,
and each such Holder shall indemnify and hold harmless the
Company, each of its directors and officers who have signed
the registration statement and each person, if any, who
controls the Company, within the meaning of the 1933 Act
against any losses, claims, damages or liabilities (or
actions in respect thereof) arising out of or based upon any
untrue statement or alleged untrue statement of any material
fact contained in such registration statement, or any
omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make
statements therein not misleading, if the statement or
omission was made in reliance upon and in conformity with
written information furnished or required to be furnished by
such Holder expressly for use in such registration
statement.
h. Anything to the contrary herein notwithstanding, if
the shares of the Company's Common Stock held by the Holder
may be sold by the Holder thereof in a transaction pursuant
to Rule 144 promulgated under the 1933 Act, the Holder shall
not be entitled to require the Company to register such
securities pursuant to any registration statement filed
under the 1933 Act.
I. For a period of one year after the effective date of
the registration statement filed pursuant to this Section
10, the Company at its expense will file such post-effective
amendments as may be necessary to make available for use a
prospectus meeting the requirements of the 1933 Act. The
Company will cause copies of such prospectus to be delivered
to any person selling the shares of Common Stock as may be
required by the 1933 Act and the rules and regulations of
the Commission.
j. If a managing underwriter acting in good faith
determines that the inclusion of all or any part of the
Warrant Shares in a registration statement would adversely
affect the marketing of securities intended to be
underwritten, the amount of such Warrant Shares to be
registered shall be reduced or limited to the amount which
the underwriter, in its discretion, reasonably exercised in
good faith, determines would not adversely affect the
successful marketing of the underwritten securities.
11. Transfers to Comply with the 1933 Act; etc. This
Warrant and any Warrant Shares may not be sold, assigned,
transferred, pledged, hypothecated or otherwise disposed of
except as follows: (1) to a person who, in the opinion of
counsel to the company, is a person to whom this Warrant or
the Warrant Shares may legally be transferred without
registration and without the delivery of a current
prospectus under the 1933 Act with respect thereto and then
only against receipt of an agreement of such person to
comply with the provisions of this Section 11 with respect
to any resale or other disposition of such securities; or
(2) to any person upon delivery of a prospectus then meeting
the requirements of the 1933 Act relating to such securities
and the offering thereof for such sale or disposition, and
thereafter to all successive assignees. In addition, for a
period of one year after the Base Date, this Warrant shall
not be transferable except to any holding company or
affiliate controlling or controlled by the Holder, to any
successor to the Holder's business, to the Holder's
officers, directors or employees, or to other agents or
selected dealers of the Holder who participated in the
securities offering in which this Warrant was issued.
12. Legend. Unless the Warrant Shares have been
registered under the 1933 Act, upon exercise of the Warrant
and the issuance of any of the Warrant Shares, all
certificates representing such shares shall bear on the face
thereof substantially the following legend: The securities
represented by this certificate have not been registered
under the Securities Act of 1933, as amended, and may not be
sold, offered for sale, assigned, transferred or otherwise
disposed of, unless registered pursuant to the provisions of
that Act or unless an opinion of counsel to the Corporation
is obtained stating that such disposition is in compliance
with an available exemption from such registration.
13. Notices. All notices required hereunder shall be in
writing and shall be deemed given when facsimilied (with
verified receipt), delivered personally or mailed by
certified or registered mail, return receipt requested, to
the Company or Holder, as the case may be, for whom such
notice is intended, to the address of such party of which
the Company or Holder has been advised by written notice.
14. Applicable Law. The Warrant is issued under and
shall for all purposes be governed by and construed in
accordance with the laws of the State of Florida. 15.
Loss of Warrant Certificate: Upon receipt by the Company of
evidence reasonably 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 shall execute and deliver
a new Warrant of like tenor and date. Any such new Warrant
executed and delivered shall constitute an additional
contractual obligation on the part of the Company, whether
or not this Warrant so lost, stolen, destroyed or mutilated
shall be at any time enforceable by anyone.
IN WITNESS WHEREOF, the Company has caused this Warrant to
be signed on its
behalf, in its corporate name , by its duly authorized
officer, all as of the day and year first above written.
Dated: July 15,1997 SAF T LOK,
INCORPORATED
a Florida corporation
By_________________________________
President
WARRANT EXERCISE FORM
The undersigned hereby irrevocably elects to exercise the
within Warrant to the extent of purchasing ______________
shares of Common Stock of Saf T Lok, Incorporated and hereby
makes payment of $ ____________ representing the aggregate
Exercise Price required in connection therewith. The
undersigned also surrenders the Warrant certificate to be
processed in accordance with the terms set forth therein.
______________________________
Signature
______________________________
Signature, if jointly held
______________________________
Print Name or Names
______________________________
Date
INSTRUCTIONS FOR ISSUANCE OF STOCK
(if other than to the registered holder of the within
Warrant)
Name
____________________________________________________________
_
(Please typewrite or print in block letters)
Address
________________________________________________________
________________________________________________________
Social Security or Taxpayer
Identification Number
___________________________________________
ASSIGNMENT FORM
FOR VALUE RECEIVED, _______________________________________
hereby sells,
assigns and transfers unto
Name _________________________________________
(Please typewrite or print in block letters)
Address
____________________________________________________________
_____
the right to purchase Common Stock of Saf T Lok,
Incorporated, 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: __________________________, _______.
____________________________
Signature
____________________________
Signature, if jointly held
