Exhibit 4.2
FORM OF UNDERWRITER'S WARRANT AGREEMENT
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VICON INDUSTRIES, INC.
AND
▇▇▇▇▇▇▇▇▇▇ & CO. INC.
AND
SOUTHEAST RESEARCH PARTNERS, INC.
UNDERWRITERS'
WARRANT AGREEMENT
Dated as of __________, 1998
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UNDERWRITERS' WARRANT AGREEMENT dated as of __________, 1998
between VICON INDUSTRIES, INC., a New York corporation (the "Company"),
▇▇▇▇▇▇▇▇▇▇ & CO. INC. and SOUTHEAST RESEARCH PARTNERS, INC. (each hereinafter
referred to individually as a "Holder" or "Underwriter" and, collectively, as
"Holders" or the "Underwriters").
W I T N E S S E T H :
WHEREAS, the Company proposes to issue to the Underwriters or their
designees warrants ("Warrants") to purchase up to an aggregate of 153,500
shares of common stock, par value $.01 per share, of the Company ("Common
Stock"); and
WHEREAS, the Underwriters have agreed pursuant to the underwriting
agreement (the "Underwriting Agreement") dated as of the date hereof among
the Underwriters, the Company and the Selling Shareholders named therein to
act as Underwriters in connection with the Company's proposed public offering
of up to 1,535,000 shares of Common Stock at a public offering price of $____
per share of Common Stock (the "Public Offering"); and
WHEREAS, the Warrants to be issued pursuant to this Agreement will
be issued on the Closing Date (as such term is defined in the Underwriting
Agreement) by the Company to the Underwriters in consideration for, and as
part of the Underwriters' compensation in connection with the Public Offering;
NOW, THEREFORE, in consideration of the premises, the payment by
the Underwriters to the Company of an aggregate of twenty dollars ($20.00),
the agreements herein set forth and other good and valuable consideration,
hereby acknowledged, the parties hereto agree as follows:
1. Grant. Fahenstock & Co., Inc. is hereby granted the right to
purchase, at any time from __________, 1999, until 5:30 P.M., New York time,
on __________, 2003, up to an aggregate of _______ shares of Common Stock at
an initial exercise price (subject to adjustment as provided in Section 8
hereof) of $_____ per share of Common Stock subject to the terms and
conditions of this Agreement. Southeast Research Partners, Inc. is hereby
granted the right to purchase, at any time from __________, 1999, until 5:30
P.M., New York time, on __________, 2003, up to an aggregate of _______
shares of Common Stock (together with the Common Stock issuable upon exercise
of the Warrants referred to in the preceding sentence, the "Shares") at an
initial exercise price (subject to adjustment as provided in Section 8
hereof) of $_____ per share of Common Stock subject to the terms and
conditions of this Agreement.
2. Warrant Certificates. The warrant certificates (the "Warrant
Certificates") delivered and to be delivered pursuant to this Agreement shall
be in the form set forth in Exhibit A, attached hereto and made a part
hereof, with such appropriate insertions, omissions, substitutions, and other
variations as required or permitted by this Agreement. Except as set forth
herein, the Shares issuable upon exercise of the Warrants are in all respects
identical to the shares of Common Stock being purchased by the Underwriters
for resale to the public pursuant to the terms and provisions of the
Underwriting Agreement.
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3. Exercise of Warrant.
Section 3.1 Method of Exercise. The Warrants initially are
exercisable at an aggregate initial exercise price (subject to adjustment as
provided in Section 8 hereof) per share of Common Stock set forth in Section
1 hereof payable by certified or official bank check in New York Clearing
House funds, subject to adjustment as provided in Section 8 hereof. Upon
surrender of a Warrant Certificate with a duly executed copy of the annexed
Form of Election to Purchase, together with payment of the Exercise Price (as
hereinafter defined) for the shares of Common Stock purchased at the
Company's principal offices in Hauppauge, New York (presently located at ▇▇
▇▇▇▇▇ ▇▇▇▇▇) the registered holder of a Warrant Certificate ("Holder" or
"Holders") shall be entitled to receive a certificate or certificates for the
shares of Common Stock so purchased. The purchase rights represented by each
Warrant Certificate are exercisable at the option of the Holder thereof, in
whole or in part (but not as to fractional shares of the Common Stock
underlying the Warrants). Warrants may be exercised to purchase all or part
of the shares of Common Stock represented thereby. In the case of the
purchase of less than all the shares of Common Stock purchasable under any
Warrant Certificate, the Company shall cancel said Warrant Certificate upon
the surrender thereof and shall execute and deliver a new Warrant Certificate
of like tenor for the balance of the shares of Common Stock purchasable
thereunder.
Section 3.2 Exercise by Surrender of Warrant. In addition to
the method of payment set forth in Section 3.1 and in lieu of any cash
payment required thereunder, a Holder of Warrants shall have the right at any
time and from time to time to exercise the Warrants in full or in part by
surrendering the Warrant Certificate in the manner
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specified in Section 3.1 in exchange for the number of Shares equal to the
product of (x) the number of Shares as to which the Warrants are being
exercised multiplied by (y) a fraction, the numerator of which is the Market
Price (as defined in Section 3.3 below) of the Shares less the Exercise Price
and the denominator of which is such Market Price. Solely for the purposes
of this paragraph, Market Price shall be calculated either (i) on the date
which the form of election attached hereto is deemed to have been sent to the
Company pursuant to Section 12 hereof ("Notice Date") or (ii) as the average
of the Market Prices for each of the five trading days preceding the Notice
Date, whichever of (i) or (ii) is greater.
Section 3.3 Definition of Market Price. As used herein, the
phrase "Market Price" at any date shall be deemed to be the last reported
sale price, or, in case no such reported sale takes place on such day, the
average of the last reported sale prices for the last three (3) trading days,
in either case as officially reported by the principal securities exchange on
which the Common Stock is listed or admitted to trading or by the Nasdaq
National Market ("NNM"), or, if the Common Stock is not listed or admitted to
trading on any national securities exchanged or quoted by NNM, the average
closing bid price as furnished by the NASD through NNM or similar
organization if NNM is no longer reporting such information, or if the Common
Stock is not quoted on NNM, as determined in good faith by resolution of the
Board of Directors of the Company, based on the best information available to
it.
4. Issuance of Certificates. Upon the exercise of the Warrants,
the issuance of certificates for shares of Common Stock and/or other
securities, properties or rights underlying such Warrants, shall be made
forthwith (and in any event within
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three (3) business days thereafter) without charge to the Holder thereof
including, without limitation, any tax which may be payable in respect of the
issuance thereof, and such certificates shall (subject to the provisions of
Sections 5 and 7 hereof) be issued in the name of, or in such names as may be
directed by, the Holder thereof; provided, however, that the Company shall
not be required to pay any tax which may be payable in respect of any
transfer involved in the issuance and delivery of any such certificates in a
name other than that of the Holder, and the Company shall not be required to
issue or deliver such certificates unless or until the person or persons
requesting the issuance thereof shall have paid to the Company the amount of
such tax or shall have established to the satisfaction of the Company that
such tax has been paid.
The Warrant Certificates and the certificates representing the
Shares underlying the Warrants (and/or other securities, property or rights
issuable upon the exercise of the Warrants) shall be executed on behalf of
the Company by the manual or facsimile signature of the then Chairman or Vice
Chairman of the Board of Directors or President or Vice President of the
Company. Warrant Certificates shall be dated the date of execution by the
Company upon initial issuance, division, exchange, substitution or transfer.
5. Restriction On Transfer of Warrants. The Holder of a Warrant
Certificate, by its acceptance thereof, covenants and agrees that the
Warrants are being acquired as an investment and not with a view to the
distribution thereof; that the Warrants may not be sold, transferred,
assigned, hypothecated or otherwise disposed of, in whole or in part, for a
period of one (1) year from the date hereof, except to officers of the
Underwriter.
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6. Exercise Price.
Section 6.1 Initial and Adjusted Exercise Price. Except as
otherwise provided in Section 8 hereof, the initial exercise price of each
Warrant shall be as set forth in Section 1 hereof. The adjusted exercise
price shall be the price which shall result from time to time from any and
all adjustments of the initial exercise price in accordance with the
provisions of Section 8 hereof.
Section 6.2 Exercise Price. The term "Exercise Price" herein
shall mean the initial exercise price or the adjusted exercise price,
depending upon the context.
7. Registration Rights.
Section 7.1 Registration Under the Securities Act of 1933. The
Warrants, the Shares, and any of the other securities issuable upon exercise
of the Warrants have been registered under the Securities Act of 1933, as
amended (the "Act"), pursuant to the Company's Registration Statement on Form
S-2 (Registration No. 333-_____) (the "Registration Statement"). All of the
representations and warranties of the Company contained in the Underwriting
Agreement relating to the Registration Statement, the Preliminary Prospectus
and Prospectus (as such terms are defined in the Underwriting Agreement) and
made as of the dates provided therein, are hereby incorporated by reference.
The Company agrees and covenants promptly to file post-effective amendments
to such Registration Statement as may be necessary in order to maintain its
effectiveness and otherwise to take such action as may be necessary to
maintain the effectiveness of the Registration Statement as long as any
Warrants are outstanding. In the event that, for any reason, whatsoever, the
Company shall fail to maintain the effectiveness of the Registration
Statement, upon exercise, in part or in whole, of the
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Warrants, certificates representing the Shares underlying the Warrants, and
any of the other securities issuable upon exercise of the Warrants
(collectively, the "Warrant Securities") shall bear the following legend:
The securities represented by this certificate have not been
registered under the Securities Act of 1933, as amended ("Act"),
and may not be offered or sold except pursuant to (i) an effective
registration statement under the Act, (ii) to the extent
applicable, Rule 144 under the Act (or any similar rule under such
Act relating to the disposition of securities), or (iii) an opinion
of counsel, if such opinion shall be reasonably satisfactory to
counsel to the issuer, that an exemption from registration under
such Act is available.
Section 7.2 Piggyback Registration. If, at any time commencing
after the date hereof and expiring seven (7) years from the date hereof, the
Company proposes to register any of its securities under the Act (other than
in connection with a merger or pursuant to Form S-8) it will give written
notice by registered mail, at least thirty (30) days prior to the filing of
each such registration statement, to the Holder and to all other Holder(s) of
the Warrants and/or the Warrant Securities, if not previously sold pursuant
to this Section 7, of its intention to do so. If the Underwriters or other
Holder(s) of the Warrants and/or Warrant Securities notify the Company within
twenty-five (25) days after receipt of any such notice of its or their desire
to include any such securities in such proposed registration statement, the
Company shall afford the Underwriters and such Holder(s) of the Warrants
and/or Warrant Securities the opportunity to have any such Warrant Securities
registered under such registration statement (sometimes referred to herein as
the "Piggyback Registration").
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Notwithstanding the provisions of this Section 7.2, the Company
shall have the right at any time after it shall have given written notice
pursuant to this Section 7.2 (irrespective of whether a written request for
inclusion of any such securities shall have been made) to elect not to file
any such proposed registration statement, or to withdraw the same after the
filing but prior to the effective date thereof.
Section 7.3 Demand Registration.
(a) At any time commencing after the date hereof and expiring five
(5) years from the date hereof, the Holder of the Warrants and/or Warrant
Securities representing a "Majority" (as hereinafter defined) of such
securities (assuming the exercise of all of the Warrants), not previously
sold pursuant to this Section 7, shall have the right (which right is in
addition to the registration rights under Section 7.2 hereof), exercisable by
written notice to the Company, to have the Company prepare and file with the
Securities and Exchange Commission (the "Commission"), on one occasion, a
registration statement and such other documents, including a prospectus, as
may be necessary in the opinion of both counsel for the Company and counsel
for the Underwriter and Holder, in order to comply with the provisions of the
Act, so as to permit a public offering and sale of Warrant Securities for the
period necessary for such Holders to effect the proposed sale or other
disposition of the applicable Warrants and/or Warrant Securities.
(b) The Company covenants and agrees to (x) give written notice of
any registration request under this Section 7.3 by any Holder to all other
registered Holder of the Warrants and the Warrant Securities within ten (10)
days from the date of the receipt of any such registration request and (y)
include all the Warrant Securities, not
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previously sold pursuant to this Section 7, in such registration statement
unless it receives notification from a Holder within five (5) days following
the Company's notification of registration that such Holder does not want its
Warrant Securities to be included in the registration statement.
(c) In addition to the registration rights under Section 7.2 and
subsection (a) of this Section 7.3, at any time commencing after the date
hereof and expiring five (5) years thereafter, any Holder of Warrants and/or
Warrant Securities shall have the right, exercisable by written request to
the Company, to have the Company prepare and file, on one occasion, with the
Commission a registration statement so as to permit a public offering and
sale for the period necessary for such Holder to effect the sale or other
disposition of the applicable Warrant Securities provided, however, that the
provisions of Section 7.4(b) hereof shall not apply to any such registration
request and registration and all costs incident thereto shall be at the
expense of the Holder or Holders that participate in such sale or
disposition, including the Company's reasonable legal and accounting fees,
printing expenses and blue sky fees and expenses, making such request.
(d) Notwithstanding anything to the contrary contained herein, if
the Company shall not have filed a registration statement for the Warrant
Securities within the time period specified in Section 7.4(a) hereof pursuant
to the written notice specified in Section 7.3(a) of a Majority of the
Holders of the Warrants and/or Warrant Securities, the Company shall have the
option, upon the written notice of election of a Majority of the Holders of
the Warrants and/or Warrant Securities, to repurchase (i) any and all Warrant
Securities at the higher of the Market Price per share of Common Stock on (x)
the date of the notice sent pursuant to Section 7.3(a) or (y) the expiration
of the period
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specified in Section 7.4(a) and (ii) any and all Warrants at such Market
Price less the Exercise Price of such Warrant. Such repurchase, if elected
by the Company, shall be in immediately available funds and shall close
within two (2) days after the later of (i) the expiration of the period
specified in Section 7.4(a) or (ii) the delivery of the written notice of
election specified in this Section 7.3(d).
Section 7.4 Covenants of the Company With Respect to
Registration. In connection with any registration under Section 7.2 or 7.3
hereof, the Company covenants and agrees as follows:
(a) The Company shall use its best efforts to file a registration
statement within forty-five (45) days of receipt of any demand therefor,
shall use its best efforts to have any registration statements declared
effective at the earliest possible time, and shall furnish each Holder
desiring to sell Warrant Securities such number of prospectuses as shall
reasonably be requested.
(b) The Company shall pay all costs (excluding fees and expenses
of Holder(s)' counsel and any underwriting or selling commissions), fees and
expenses in connection with all registration statements filed pursuant to
Sections 7.2 and 7.3(a) hereof including, without limitation, the Company's
legal and accounting fees, printing expenses and blue sky fees and expenses.
The Holder(s) will pay all costs, fees and expenses, including the Company's
reasonable legal and accounting fees, printing expenses and blue sky fees and
expenses, in connection with any registration statement filed pursuant to
Section 7.3(c). If the Company shall fail to comply with the provisions of
Section 7.4(a), the Company shall, in addition to any other equitable or
other relief
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available to the Holder(s), be liable for any or all incidental or special
damages sustained by the Holder(s) requesting registration of their Warrant
Securities.
(c) The Company will take all necessary action which may be
required in qualifying or registering the Warrant Securities included in a
registration statement for offering and sale under the securities or blue sky
laws of such states as reasonably are requested by the Holder(s), provided
that the Company shall not be obligated to execute or file any general
consent to service of process or to qualify as a foreign corporation to do
business under the laws of any such jurisdiction.
(d) The Company shall indemnify the Holder(s) of the Warrant
Securities to be sold pursuant to any registration statement and each person,
if any, who controls such Holder within the meaning of Section 15 of the Act
or Section 20(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), against all loss, claim, damage, expense or liability
(including all expenses reasonably incurred in investigating, preparing or
defending against any claim whatsoever) to which any of them may become
subject under the Act, the Exchange Act or otherwise, arising from such
registration statement but only to the same extent and with the same effect
as the provisions pursuant to which the Company has agreed to indemnify each
of the Underwriters contained in Section 7 of the Underwriting Agreement.
(e) The Holder(s) of the Warrant Securities to be sold pursuant to
a registration statement, and their successors and assigns, shall severally,
and not jointly, indemnify the Company, its officers and directors and each
person, if any, who controls the Company within the meaning of Section 15 of
the Act or Section 20(a) of the Exchange Act, against all loss, claim, damage
or expense or liability (including all
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expenses reasonably incurred in investigating, preparing or defending against
any claim whatsoever) to which they may become subject under the Act, the
Exchange Act or otherwise, arising from information furnished by or on behalf
of such Holder, or their successors or assigns, for specific inclusion in
such registration statement to the same extent and with the same effect as
the provisions contained in Section 7 of the Underwriting Agreement pursuant
to which the Underwriters have agreed to indemnify the Company.
(f) Nothing contained in this Agreement shall be construed as
requiring the Holder(s) to exercise their Warrants prior to the filing of any
registration statement or the effectiveness thereof.
(g) The Company shall not permit the inclusion of any securities
other than the Warrant Securities to be included in any registration
statement filed pursuant to Section 7.3(c) hereof, or permit any other
registration statement to be or remain effective during the effectiveness of
a registration statement filed pursuant to Section 7.3 (c) hereof, for a
period of thirty (30) days, without the prior written consent of the Holder
of the Warrants and Warrant Securities representing a Majority of such
securities.
(h) The Company shall furnish to each Holder participating in the
offering and to each underwriter, if any, a signed counterpart, addressed to
such Holder or underwriter, of (i) an opinion of counsel to the Company,
dated the effective date of such registration statement (and, if such
registration includes an underwritten public offering, an opinion dated the
date of the closing under the underwriting agreement), and (ii) a "cold
comfort" letter dated the effective date of such registration statement (and,
if such registration includes an underwritten public offering, a letter dated
the date of the
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closing under the underwriting agreement) signed by the independent public
accountants who have issued a report on the Company's financial statements
included in such registration statement, in each case covering substantially
the same matters with respect to such registration statement (and the
prospectus included therein) and, in the case of such accountants' letter,
with respect to events subsequent to the date of such financial statements,
as are customarily covered in opinions of issuer's counsel and in
accountants' letters delivered to underwriters in underwritten public
offerings of securities.
(i) The Company shall as soon as practicable after the effective
date of the registration statement, and in any event within 15 months
thereafter, make "generally available to its security holder" (within the
meaning of Rule 158 under the Act) an earnings statement (which need not be
audited) complying with Section 11(a) of the Act and covering a period of at
least 12 consecutive months beginning after the effective date of the
registration statement.
(j) The Company shall deliver promptly to each Holder
participating in the offering requesting the correspondence and memoranda
described below and to the managing underwriters, copies of all
correspondence between the Commission and the Company and between the
Commission and the Company's counsel or auditors and all reasonable memoranda
relating to discussions with the Commission or its staff with respect to the
registration statement and permit each Holder and underwriters to do such
investigation, upon reasonable advance notice, with respect to information
contained in or omitted from the registration statement as it deems
reasonably necessary to comply with applicable securities laws or rules of
the National Association of Securities Dealers, Inc. ("NASD"). Such
investigation shall include access to books, records and properties
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and opportunities to discuss the business of the Company with its officers
and independent auditors, all to such reasonable extent and at such
reasonable times and as often as any such Holder or underwriter shall
reasonably request.
(k) The Company shall enter into an underwriting agreement with
the managing underwriters selected for such underwriting by Holders holding a
Majority of the Warrant Securities requested to be included in such
underwriting, which may be one or both of the Underwriters. Such agreement
shall be satisfactory in form and substance to the Company, each Holder and
such managing underwriters, and shall contain such representations,
warranties and covenants by the Company and such other terms as are
customarily contained in agreements of that type used by the managing
underwriter. The Holder shall be parties to any underwriting agreement
relating to an underwritten sale of their Warrant Securities and may, at
their option, require that any or all the representations, warranties and
covenants of the Company to or for the benefit of such underwriters shall
also be made to and for the benefit of such Holder. Such Holder shall not be
required to make any representations or warranties to or agreements with the
Company or the underwriters except as they may relate to such Holder and
their intended methods of distribution.
(l) In addition to the Warrant Securities, upon the written
request therefor by any Holder(s), the Company shall include in the
registration statement any other securities of the Company held by such
Holder(s) as of the date of filing of such registration statement, including
without limitation restricted shares of Common Stock, options, warrants or
any other securities convertible into shares of Common Stock.
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(m) For purposes of this Agreement, the term "Majority" in
reference to the Holders of Warrants or Warrant Securities, shall mean a
percentage in excess of fifty percent (50%) of the then outstanding Warrant
Securities (treating all such securities as fully exercised for Shares for
purposes of such calculation) that (i) are not held by the Company, an
affiliate, officer, creditor, employee or agent thereof or any of their
respective affiliates, members of their family, persons acting as nominees or
in conjunction therewith and (ii) have not been resold to the public pursuant
to a registration statement filed with the Commission under the Act.
8. Adjustments to Exercise Price and Number of Securities.
Section 8.1 Subdivision and Combination. In case the Company
shall at any time subdivide or combine the outstanding shares of Common
Stock, the Exercise Price shall forthwith be proportionately decreased in the
case of subdivision or increased in the case of combination.
Section 8.2 Stock Dividends and Distributions. In case the
Company shall pay a dividend in, or make a distribution of, shares of Common
Stock or of the Company's capital stock convertible into Common Stock, the
Exercise Price shall forthwith be proportionately decreased. An adjustment
made pursuant to this Section 8.2 shall be made as of the record date for the
subject stock dividend or distribution.
Section 8.3 Adjustment in Number of Securities. Upon each
adjustment of the Exercise Price pursuant to the provisions of this Section
8, the number of Warrant Securities issuable upon the exercise at the
adjusted exercise price of each Warrant shall be adjusted to the nearest full
amount by multiplying a number equal to the Exercise Price in effect
immediately prior to such adjustment by the number of Warrant Securities
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issuable upon exercise of the Warrants immediately prior to such adjustment
and dividing the product so obtained by the adjusted Exercise Price.
Section 8.4 Definition of Common Stock. For the purpose of this
Agreement, the term "Common Stock" shall mean (i) the class of stock
designated as Common Stock in the Certificate of Incorporation of the Company
as may be amended as of the date hereof, or (ii) any other class of stock
resulting from successive changes or reclassifications of such Common Stock
consisting solely of changes in par value, or from par value to no par value,
or from no par value to par value.
Section 8.5 Merger or Consolidation. In case of any
consolidation of the Company with, or merger of the Company with, or merger
of the Company into, another corporation (other than a consolidation or
merger which does not result in any reclassification or change of the
outstanding Common Stock), the corporation formed by such consolidation or
merger shall execute and deliver to the Holder a supplemental warrant
agreement providing that the holder of each Warrant then outstanding or to be
outstanding shall have the right thereafter (until the expiration of such
Warrant) to receive, upon exercise of such warrant, the kind and amount of
shares of stock and other securities and property receivable upon such
consolidation or merger, by a holder of the number of shares of Common Stock
of the Company for which such warrant might have been exercised immediately
prior to such consolidation, merger, sale or transfer. Such supplemental
warrant agreement shall provide for adjustments which shall be identical to
the adjustments provided in Section 8. The above provision of this
subsection shall similarly apply to successive consolidations or mergers.
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Section 8.6 No Adjustment of Exercise Price in Certain Cases.
No adjustment of the Exercise Price shall be made:
(a) Upon the issuance or sale of the Warrants to the Underwriters
or the shares of Common Stock issued upon the exercise of the Warrants;
(b) If the amount of said adjustment shall be less than two cents
($0.02) per Warrant Security, provided, however, that in such case any
adjustment that would otherwise be required then to be made shall be
carried forward and shall be made at the time of and together with the
next subsequent adjustment which, together with any adjustment so
carried forward, shall amount to at least two cents (2CENTS) per Warrant
Security.
9. Exchange and Replacement of Warrant Certificates. Each
Warrant Certificate is exchangeable without expense, upon the surrender
thereof by the registered Holder at the principal executive office of the
Company, for a new Warrant Certificate of like tenor and date representing in
the aggregate the right to purchase the same number of Warrant Securities in
such denominations as shall be designated by the Holder thereof at the time
of such surrender.
Upon receipt by the Company of evidence reasonably satisfactory to
it of the loss, theft, destruction or mutilation of any Warrant Certificate,
and, in case of loss, theft or destruction, of indemnity or security
reasonably satisfactory to it, and reimbursement to the Company of all
reasonable expenses incidental thereto, and upon surrender and cancellation
of the Warrants, if mutilated, the Company will make and deliver a new
Warrant Certificate of like tenor, in lieu thereof.
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10. Elimination of Fractional Interests. The Company shall not be
required to issue certificates representing fractions of shares of Common
Stock upon the exercise of the Warrants, nor shall it be required to issue
scrip or pay cash in lieu of fractional interests, it being the intent of the
parties that all fractional interests shall be eliminated by rounding any
fraction up to the nearest whole number of shares of Common Stock or other
securities, properties or rights.
11. Reservation and Listing of Securities. The Company shall at
all times reserve and keep available out of its authorized shares of Common
Stock, solely for the purpose of issuance upon the exercise of the Warrants,
such number of shares of Common Stock or other securities, properties or
rights as shall be issuable upon the exercise thereof. The Company covenants
and agrees that, upon exercise of the Warrants and payment of the Exercise
Price therefor, all shares of Common Stock and other securities issuable upon
such exercise shall be duly and validly issued, fully paid, non-assessable
and not subject to the preemptive rights of any stockholder. As long as the
Warrants shall be outstanding, the Company shall use its best efforts to
cause all shares of Common Stock issuable upon the exercise of the Warrants
to be listed (subject to official notice of issuance) on all securities
exchanges on which the Common Stock issued to the public in connection
herewith may then be listed on a National Securities Exchange and/or quoted
on NNM.
12. Notices to Warrant Holder. Nothing contained in this
Agreement shall be construed as conferring upon the Holder the right to vote
or to consent or to receive notice as a stockholder in respect of any
meetings of stockholder for the election of directors or any other matter, or
as having any rights whatsoever as a stockholder of
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the Company. If, however, at any time prior to the expiration of the
Warrants and their exercise, any of the following events shall occur:
(a) the Company shall take a record of the holder of its shares
of Common Stock for the purpose of entitling them to receive a dividend
or distribution payable otherwise than in cash, or a cash dividend or
distribution payable otherwise than out of current or retained earnings,
as indicated by the accounting treatment of such dividend or
distribution on the books of the Company; or
(b) the Company shall offer to all the holder of its Common Stock
any additional shares of capital stock of the Company or securities
convertible into or exchangeable for shares of capital stock of the
Company, or any option, right or warrant to subscribe therefor; or
(c) a dissolution, liquidation or winding up of the Company
(other than in connection with a consolidation or merger) or a sale of
all or substantially all of its property, assets and business as an
entirety shall be proposed;
then, in any one or more of said events, the Company shall give written
notice of such event at least fifteen (15) days prior to the date fixed as a
record date or the date of closing the transfer books for the determination
of the stockholder entitled to such dividend, distribution, convertible or
exchangeable securities or subscription rights, or entitled to vote on such
proposed dissolution, liquidation, winding up or sale. Such notice shall
specify such record date or the date of closing the transfer books, as the
case may be. Failure to give such notice or any defect therein shall not
affect the validity of any action taken in connection with the declaration or
payment of any such dividend, or
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the issuance of any convertible or exchangeable securities, or subscription
rights, options or warrants, or any proposed dissolution, liquidation,
winding up or sale.
13. Notices.
All notices, requests, consents and other communications hereunder
shall be in writing and shall be deemed to have been duly made and sent when
delivered, or mailed by registered or certified mail, return receipt
requested:
(a) If to the registered Holder of Warrants, to the address of such
Holder as shown on the books of the Company; or
(b) If to the Company, to the address set forth in Section 3 hereof
or to such other address as the Company may designate by notice to the
Holder.
14. Supplements and Amendments. The Company and the Underwriters
may from time to time supplement or amend this Agreement without the approval
of any holder of Warrant Certificates (other than the Underwriters) in order
to cure any ambiguity, to correct or supplement any provision contained
herein which may be defective or inconsistent with any provisions herein, or
to make any other provisions in regard to matters or questions arising
hereunder which the Company and the Underwriters may deem necessary or
desirable and which the Company and the Underwriters deem shall not adversely
affect the interests of the Holder of Warrant Certificates.
15. Successors. All the covenants and provisions of this
Agreement shall be binding upon and inure to the benefit of the Company, the
Holder and their respective successors and assigns hereunder.
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16. Termination. This Agreement shall terminate at the close of
business on __________, 2004. Notwithstanding the foregoing, the
indemnification provisions of Section 7 shall survive such termination until
the close of business on __________, 2010.
17. Governing Law; Submission to Jurisdiction. This Agreement and
each Warrant Certificate issued hereunder shall be deemed to be a contract
made under the laws of the State of New York and for all purposes shall be
construed in accordance with the laws of said State without giving effect to
the rules of said State governing the conflicts of laws.
The Company, the Underwriters and the Holders hereby agree that any
action, proceeding or claim against it arising out of, or relating in any way
to, this Agreement shall be brought and enforced in the courts of the State
of New York or of the United States of America for the Southern District of
New York, and irrevocably submits to such jurisdiction, which jurisdiction
shall be exclusive. The Company, the Underwriters and the Holders hereby
irrevocably waive any objection to such exclusive jurisdiction or
inconvenient forum. Any such process or summons to be served upon any of the
Company, the Underwriters and the Holders (at the option of the party
bringing such action, proceeding or claim) may be served by transmitting a
copy thereof, by registered or certified mail, return receipt requested,
postage prepaid, addressed to it at the address set forth in Section 13
hereof. Such mailing shall be deemed personal service and shall be legal and
binding upon the party so served in any action, proceeding or claim. The
Company, the Underwriters and the Holders agree that the prevailing
party(ies) in any such action or proceeding shall be entitled to recover from
the other
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party(ies) all of its/their reasonable legal costs and expenses relating to
such action or proceeding and/or incurred in connection with the preparation
therefor.
18. Entire Agreement; Modification. This Agreement (including the
Underwriting Agreement to the extent portions thereof are referred to herein)
contains the entire understanding between the parties hereto with respect to
the subject matter hereof and may not be modified or amended except by a
writing duly signed by the party against whom enforcement of the modification
or amendment is sought.
19. Severability. If any provision of this Agreement shall be
held to be invalid or unenforceable, such invalidity or unenforceability
shall not affect any other provision of this Agreement.
20. Captions. The caption headings of the Sections of this
Agreement are for convenience of reference only and are not intended, nor
should they be construed as, a part of this Agreement and shall be given no
substantive effect.
21. Benefits of this Agreement. Nothing in this Agreement shall
be construed to give to any person or corporation other than the Company and
the Underwriters and any other registered Holder(s) of the Warrant
Certificates or Warrant Securities any legal or equitable right, remedy or
claim under this Agreement; and this Agreement shall be for the sole benefit
of the Company and the Underwriters and any other registered Holders of
Warrant Certificates or Warrant Securities.
22. Counterparts. This Agreement may be executed in any number of
counterparts and each of such counterparts shall for all purposes be deemed
to be an original, and such counterparts shall together constitute but one
and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed, as of the day and year first above written.
VICON INDUSTRIES, INC.
By:
---------------------------------------
Name:
Title:
Attest:
--------------------------------------
Secretary
▇▇▇▇▇▇▇▇▇▇ & CO. INC.
By:
---------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Senior Vice President
SOUTHEAST RESEARCH PARTNERS, INC.
By:
---------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Senior Vice President
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EXHIBIT A
[FORM OF WARRANT CERTIFICATE]
THE WARRANTS REPRESENTED BY THIS CERTIFICATE AND THE OTHER SECURITIES
ISSUABLE UPON EXERCISE THEREOF MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO
(i) AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"), (ii) TO THE EXTENT APPLICABLE, RULE 144 UNDER THE ACT
(OR ANY SIMILAR RULE UNDER THE ACT RELATING TO THE DISPOSITION OF
SECURITIES), OR (iii) AN OPINION OF COUNSEL, IF SUCH OPINION SHALL BE
REASONABLY SATISFACTORY TO COUNSEL FOR THE ISSUER, THAT AN EXEMPTION FROM
REGISTRATION UNDER THE ACT IS AVAILABLE.
THE TRANSFER OR EXCHANGE OF THE WARRANTS REPRESENTED BY THIS CERTIFICATE IS
RESTRICTED IN ACCORDANCE WITH THE WARRANT AGREEMENT REFERRED TO HEREIN.
EXERCISABLE ON OR BEFORE
5:30 P.M., NEW YORK TIME, ________________ , 2003
No. W-
Warrants to Purchase
___ Shares of Common Stock
WARRANT CERTIFICATE
This Warrant Certificate certifies that , or
registered assigns, is the registered holder of Warrants to purchase
initially, at any time from __________, 1999 until 5:30 p.m. New York time on
__________, 2003 ("Expiration Date"), up to _________ fully-paid and
non-assessable shares of common stock, par value $.01 per share ("Common
Stock") of VICON INDUSTRIES, INC. a New York corporation (the "Company"),
(one share of Common Stock referred to individually as a "Security" and
collectively as the "Securities") at the initial exercise price, subject to
adjustment in certain events (the "Exercise Price"), of $_____ per share of
Common Stock upon surrender of this Warrant Certificate and payment of the
Exercise Price at an office or agency of the Company, but subject to the
conditions set forth herein and in the warrant agreement dated as of
__________, 1998 among the Company, ▇▇▇▇▇▇▇▇▇▇ & CO. INC. and SOUTHEAST
RESEARCH PARTNERS, INC. (the "Warrant Agreement"). Payment of the Exercise
Price shall be made by certified or official bank check in New York Clearing
House funds payable to the order of the Company.
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No Warrant may be exercised after 5:30 p.m., New York time, on the
Expiration Date, at which time all Warrants evidenced hereby, unless
exercised prior thereto, hereby shall thereafter be void.
The Warrants evidenced by this Warrant Certificate are part of a
duly authorized issue of Warrants issued pursuant to the Warrant Agreement,
which Warrant Agreement is hereby incorporated by reference in and made a
part of this instrument and is hereby referred to for a description of the
rights, limitation of rights, obligations, duties and immunities thereunder
of the Company and the holder (the words "holder" or "holders" meaning the
registered holder or registered holders) of the Warrants.
The Warrant Agreement provides that upon the occurrence of certain
events the Exercise Price and the type and/or number of the Company's
securities issuable thereupon may, subject to certain conditions, be
adjusted. In such event, the Company will, at the request of the holder,
issue a new Warrant Certificate evidencing the adjustment in the Exercise
Price and the number and/or type of securities issuable upon the exercise of
the Warrants; provided, however, that the failure of the Company to issue
such new Warrant Certificates shall not in any way change, alter, or
otherwise impair, the rights of the holder as set forth in the Warrant
Agreement.
Upon due presentment for registration of transfer of this Warrant
Certificate at an office or agency of the Company, a new Warrant Certificate
or Warrant Certificates of like tenor and evidencing in the aggregate a like
number of Warrants shall be issued to the transferee(s) in exchange for this
Warrant Certificate, subject to the limitations provided herein and in the
Warrant Agreement, without any charge except for any tax or other
governmental charge imposed in connection with such transfer.
Upon the exercise of less than all of the Warrants evidenced by
this Certificate, the Company shall forthwith issue to the holder hereof a
new Warrant Certificate representing such number of unexercised Warrants.
The Company may deem and treat the registered holder(s) hereof as
the absolute owner(s) of this Warrant Certificate (notwithstanding any
notation of ownership or other writing hereon made by anyone), for the
purpose of any exercise hereof, and of any distribution to the holder(s)
hereof, and for all other purposes, and the Company shall not be affected by
any notice to the contrary.
All terms used in this Warrant Certificate which are defined in the
Warrant Agreement shall have the meanings assigned to them in the Warrant
Agreement.
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IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to be
duly executed under its corporate seal.
Dated as of __________, 1998
VICON INDUSTRIES, INC.
[SEAL] By:
---------------------------------------
Name:
Title:
Attest:
---------------------------------------
Secretary
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[FORM OF ELECTION TO PURCHASE PURSUANT TO SECTION 3.1]
The undersigned hereby irrevocably elects to exercise the right,
represented by this Warrant Certificate, to purchase:
/ / __________ shares of Common Stock;
and herewith tenders in payment for such securities a certified or official
bank check payable in New York Clearing House Funds to the order of Vicon
Industries, Inc. in the amount of $____, all in accordance with the terms of
Section 3.1 of the Underwriters' Warrant Agreement dated as of __________ __,
1998 among Vicon Industries, Inc., ▇▇▇▇▇▇▇▇▇▇ & Co., Inc. and Southeast
Research Partners, Inc.. The undersigned requests that a certificate for
such securities be registered in the name of ______________ __, whose
address is _______________________________ and that such Certificate be
delivered to ________________ whose address is ________________________ .
Dated:
Signature___________________________________________
(Signature must conform in all respects to name of
holder as specified on the face of the Warrant
Certificate.)
______________________________________________________
(Insert Social Security or Other Identifying Number of
Holder)
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[FORM OF ASSIGNMENT]
(To be executed by the registered holder is such holder
desires to transfer the Warrant Certificate.)
FOR VALUE RECEIVED _________________ hereby sells, assigns and
transfer unto
-------------------------------------------------------------------------------
(Please print name and address of transferee)
this Warrant Certificate, together with all right, title and interest
therein, and does hereby irrevocably constitute and appoint ____________
Attorney, to transfer the within Warrant Certificate on the books of the
within-named Company, with full power of substitution.
Dated:________________ Signature:_____________________________________
(Signature must conform in all respects to name
of holder as specified on the face of the Warrant
Certificate.)
_________________________________________________
(Insert Social Security or Other Identifying
Number of Assignor)
[6~
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