Atlantic Security, Inc.
Term Sheet
2nd June 2004
Issuer: Atlantic Security, Inc. ("Atlantic" or the "Company"), a corporation
existing under the laws of the state of Florida
Offering Size: US $5,000,000 (five million US dollars).
Type of Security: Common Shares.
Price per Share: Seventy percent (70%) of the average closing bid price
of the stock, as reported by Bloomberg for the ten (10) trading days
immediately preceding the closing day
Minimum Investment: U.S.$1,000,000.
Use of Proceeds: Working capital.
Warrant: As compensation to the investor for the commitment to invest
US $5,000,000, in five(5) tranches of US$1,000,000 the company will issue the
investor a warrant to acquire one million Common Shares on or before
June 30, 2007, exercisable in tranches of 50,000 (fifty thousand) shares at
the lesser of the initial closing price or Seventy percent (70%) of the
average closing bid price of the stock, as reported by Bloomberg for the ten
(10) trading days immediately preceding the exercise day
Investors: "Accredited Investors" as defined under Rule 501(a) of
Regulation D of the Securities Exchange Commission promulgated under the
Securities Act of 1933.
Commencement date. This Offering shall succeed the existing Subscription
Agreement dated 23rd March 2003 between the company and the investor and shall
commence on the fortieth day subsequent to the final closing of the share
purchase contemplated in the agreement of 23rd March 2003
Closings: The Company expects to hold five rolling closings of this
Offering. Each subsequent closing will take place on the first United States
business day that is 42 (forty two) days subsequent to the previous closing,
or in such shorter period as to be mutually agreed by the company and the
investor.
Hold Period: Atlantic is a foreign private issuer under US securities laws.
As such, under Reg S, Rule 903, if Atlantic issues securities to an offshore
investor (not a US Person), under applicable US law, Atlantic must ensure that
steps are taken so that the securities are not resold into the US until the
expiration of a 40 day distribution compliance period. In addition, the laws
of the jurisdiction of residence of the subscriber may impose hold periods
which differ from US requirements.
Citywide Management Ltd.
/s/ Charlotte Artus
EXHIBIT A
- ---------
NONE OF THE SECURITIES TO WHICH THIS PRIVATE PLACEMENT SUBSCRIPTION
AGREEMENT (THE "AGREEMENT") RELATES HAVE BEEN REGISTERED UNDER THE
UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT"),
AND, UNLESS SO REGISTERED, NONE MAY BE OFFERED OR SOLD IN THE UNITED
STATES OR TO U.S. PERSONS (AS DEFINED HEREIN) EXCEPT PURSUANT TO AN
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE 1933 ACT.
PRIVATE PLACEMENT SUBSCRIPTION AGREEMENT
(Outside North America)
Personal & Confidential
TO: Atlantic Security Inc
Purchase of Securities
1. Subscription
1.1 The undersigned (the "Subscriber") hereby irrevocably
subscribes for and agrees to purchase (such subscription and agreement
to purchase being the "Subscription") on the basis of the
representations and warranties and subject to the terms and conditions
set forth herein, that number of common shares (the Shares) being
referred to herein as ("Securities") in the capital of the Company set
out above the Subscriber's name in the delivery instructions at the
price per share that is 70% (seventy percent) of the average closing
bid price of the shares, as reported by Bloomberg, for the preceding
10 (Ten) trading days immediately prior to the closing. (Subscription
Price").
1.2 The Company hereby irrevocably agrees to sell, on the basis
of the representations and warranties and subject to the terms and
conditions set forth herein, to the Subscriber that number of shares
set out above the Subscriber's name as set out in the delivery
instructions, at the Subscription Price.
1.3 Subject to the terms hereof, the Subscription will be
effective upon its acceptance by the Company.
2. Payment
2.1 The Subscription Price shall be paid by certified cheque or
bank draft made payable to the Company in immediately available funds.
Such certified cheque or bank draft must accompany this Subscription
for delivery at Closing, or the Subscription Money may be immediately
wired to the Company according to the wire instructions provided by
the Company.
3. Undertaking and Direction
3.1 The Subscriber must complete, sign and return along with
two (2) executed copies of this Agreement to the Company with respect
to registration and delivery instructions..
3.2 The Subscriber shall complete, sign and return to the
Company as soon as possible on request by the Company any
documents, questionnaires, acknowledgements, notices and
undertakings as may be required by regulatory authorities,
stock exchanges and applicable law.
4. Closing
4.1 Closing of the offering (the "Closing") shall occur no
later than the fortieth day subsequent to the final closing
of the financing agreement dated 23rd March 2003 or on such
other date as may be mutually agreed to by the Subscriber
and the Company (the "Closing Date").
5. Acknowledgements of Subscriber
5.1 The Subscriber acknowledges and agrees that:
(a) the Securities have not been registered under the 1933 Act,
or under any state securities or "blue sky" laws of any
state of the United States, and, unless so registered, may
not be offered or sold in the United States or to U.S.
Persons, as that term is defined in Regulation S
promulgated under the 1933 Act ("Regulation S"), except
pursuant to an exemption from, or in a transaction not
subject to, the registration requirements of the 1933 Act;
(b) the decision to execute this Agreement and purchase the
Securities agreed to be purchased hereunder has not been
based upon any oral or written representation as to fact or
otherwise made by or on behalf of the Company , and such
decision is based entirely upon a review of information
(the receipt of which is hereby acknowledged) which has
been filed by the Company with the United States Securities
and Exchange Commission and in compliance, or intended
compliance, with applicable securities legislation
(collectively, the "Public Record") including the Company's
audited financial statements, together with the related
schedules and notes, for the year ending
___________________;
(c ) the Company is entitled to rely on the representations and
warranties and the statements and answers of the Subscriber
contained in this Agreement and in the questionnaires and
undertakings attached as schedules to this Agreement, and
the Subscriber will hold harmless each of the Agents and the
Company from any loss or damage it or they may suffer as a
result of the Subscriber's failure to correctly complete
this Agreement or such questionnaires and undertakings;
(d) by execution hereof the Subscriber has waived the need for
the Company to communicate the Company's acceptance of the
purchase of the Securities pursuant to this Agreement;
(e) it will indemnify and hold harmless the Company and, where
applicable, their respective directors, officers,
employees, agents, advisors and shareholders from and
against any and all loss, liability, claim, damage and
expense whatsoever (including, but not limited to, any and
all fees, costs and expenses whatsoever reasonably incurred
in investigating, preparing or defending against any claim,
lawsuit, administrative proceeding or investigation whether
commenced or threatened) arising out of or based upon any
representation or warranty of the Subscriber contained
herein or in any document furnished by the Subscriber to
the Company in connection herewith being untrue in any
material respect or any breach or failure by the Subscriber
to comply with any covenant or agreement made by the
Subscriber to the Company in connection therewith;
(f) the issuance and sale of the Securities to the Subscriber
will not be completed if acceptance of the Subscription
would be unlawful or if, in the discretion of the Company,
acting reasonably, acceptance is not in the best interests
of the Company;
(g) it has been advised to consult its own legal, tax and other
advisors with respect to the merits and risks of an
investment in the Securities and with respect to applicable
resale restrictions and it is solely responsible (and
neither the Agents nor the Company is in any way
responsible except with regard to the Company's obligations
arising from section 7 of this Agreement) for compliance
with applicable resale restrictions;
(h) the Securities are not listed on any stock exchange or
subject to quotation except that the Shares currently are
listed on the National Association of Securities Dealers,
Inc. Automated Quotation System OTC Bulletin Board Market,
and no representation has been made to the Subscriber that
the Securities will become listed on any other stock
exchange or subject to quotation on any other quotation
system;
(i) the Subscriber is not resident in Canada nor the United
States and is not purchasing the Securities for such
residents;
(j) no securities commission or similar regulatory authority
has reviewed or passed on the merits of the Securities;
(k) there is no government or other insurance covering the
Securities;
(l) there are risks associated with the purchase of the
Securities;
(m) there are restrictions on the Subscriber's ability to
resell the Securities and it is the responsibility of the
Subscriber to find out what those restrictions are and to
comply with them before selling the Securities;
(n) the Company has advised the Subscriber that the Company is
relying on an exemption from the requirements to provide
the Subscriber with a prospectus and to sell the Securities
through a person registered to sell securities under The
Act
(o) this Agreement is not enforceable by the Subscriber unless
it has been accepted by the Company.
6. Representations, Warranties and Covenants of the Subscriber
6.1 The Subscriber hereby represents and warrants to and
covenants with the Company (which representations,
warranties and covenants shall survive the Closing) that:
(a) the Subscriber and any beneficial purchaser for whom it is
acting are resident in the jurisdiction set out under the
heading "Name and Address of Subscriber" on the delivery
instructions of this Subscription;
(b) the Subscriber has the legal capacity and competence to
enter into and execute this Subscription and to take all
actions required pursuant hereto and, if the Subscriber is
a corporation, it is duly incorporated and validly
subsisting under the laws of its jurisdiction of
incorporation and all necessary approvals by its directors,
shareholders and others have been obtained to authorize
execution and performance of this Subscription on behalf of
the Subscriber;
(c) the entering into of this Subscription and the transactions
contemplated hereby do not result in the violation of any
of the terms and provisions of any law applicable to, or
the constating documents of, the Subscriber or of any
agreement, written or oral, to which the Subscriber may be
a party or by which the Subscriber is or may be bound;
(d) the Subscriber has duly executed and delivered this
Subscription and it constitutes a valid and binding
agreement of the Subscriber enforceable against the
Subscriber;
(e) it understands and agrees that none of the Securities has
been registered under the 1933 Act, and they may not be
sold under U.S. law except as permitted in paragraph 6.1(g)
below;
(f) it is purchasing the Securities for its own account or for
an account with respect to which it exercises sole
investment discretion, and that it or such account is an
accredited investor as that term is defined in Rule 501
under the 1933 Act (an "Institutional Accredited Investor")
acquiring the Securities for investment purposes and not
for distribution;
(g) it understands and agrees (i) that the Securities are being
offered only in a transaction not involving any public
offering within the meaning of the 1933 Act, and under Rule
144 under the 1933 Act ("Rule 144") (ii) that (A) if within
the 40 day period after the date of original issuance of
the Securities, or if within three months after it ceases
to be an affiliate (within the meaning of Rule 144) of the
Company, it decides to resell, pledge or otherwise transfer
any of the Shares on which the legend as set forth below
appears, such Shares may be resold, pledged or transferred
only (1) to the Company, (2) so long as the Shares are
eligible for resale pursuant to Rule 144A under the 1933
Act ("Rule 144A"), to a person whom the seller reasonably
believes is a qualified institutional investor buyer
("QIB") as that term is defined in Rule 144A(a)(1) that
purchases for its own account or for the account of a QIB
to whom notice is given that the resale, pledge or transfer
is being made in reliance on Rule 144A (as indicated by the
box checked by the transferor on the certificate of
transfer on the reverse of the Shares), (3) in an offshore
transaction in accordance with Regulation S (as indicated
by the box checked by the transferor on the certificate of
transfer on the reverse of the Shares), (4) to an
Institutional Accredited Investor (as indicated by the box
checked by the transferor on the certificate of transfer on
the reverse of the Shares) who has certified to the Company
that such transferee is an Institutional Accredited
Investor and is acquiring such security for investment
purposes and not for distribution, (5) pursuant to an
exemption from registration provided by Rule 144 (if
applicable) under the 1933 Act, (6) in a transaction that
does not require registration under the 1933 Act or any
applicable U.S. state laws and regulations governing the
offer and sale of securities, and it has prior to such sale
furnished to the Company an opinion of counsel reasonably
satisfactory to the Company, or (7) pursuant to an
effective registration statement under the 1933 Act, in
each case in accordance with any applicable securities laws
of any state of the United States, (B) the purchaser will,
and each subsequent holder is required to, notify any
purchaser of the Shares from it of the resale restrictions
referred to in clause (A) above, if then applicable, and
(C) with respect to any transfer of the Shares by an
Institutional Accredited Investor, such holder will deliver
to the Company such certificates and other information as
it may reasonably require to confirm that the transfer by
it complies with the restrictions set forth in this
paragraph 6.1(g);
(h) it understands and agrees that the notification requirement
referred to in paragraph 6.1(g) above will be satisfied by
virtue of the fact that the legend set out below will be
placed on the Shares unless otherwise agreed by the
Company.
"THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE
UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE
"1933 ACT"). THE HOLDER HEREOF, BY PURCHASING THIS
SECURITY, AGREES FOR THE BENEFIT OF THE COMPANY THAT
THIS SECURITY MAY NOT BE RESOLD, PLEDGED OR OTHERWISE
TRANSFERRED TO A U.S. PERSON EXCEPT AFTER THE EXPIRY
OF A 40 DAY DISTRIBUTION COMPLIANCE PERIOD AS
PRESCRIBED IN REGULATION S."
(i) it (i) is able to fend for itself in the Subscription; (ii)
has such knowledge and experience in business matters as to
be capable of evaluating the merits and risks of its
prospective investment in the Securities; and (iii) has the
ability to bear the economic risks of its prospective
investment and can afford the complete loss of such
investment;
(j) it understands and agrees that the legend referred to in
paragraph 6.1(i) above shall not be removed from any Shares
purchased by it pursuant to this Subscription unless there
is delivered to the Company such satisfactory evidence,
which may include an opinion of counsel licensed to
practice law in one of the states of the United States of
America, as may be reasonably required by the Company, that
such Shares are not "restricted" within the meaning of Rule
144;
(k) if it is acquiring the Securities as a fiduciary or agent
for one or more investor accounts, it has sole investment
discretion with respect to each such account and it has
full power to make the foregoing acknowledgments,
representations and agreements on behalf of such account;
(l) it understands and agrees that the Company and others will
rely upon the truth and accuracy of the acknowledgments,
representations and agreements contained in sections 5 and
6 hereof and agrees that if any of such acknowledgments,
representations and agreements are no longer accurate or
have been breached, it shall promptly notify the Company;
(m) the Subscriber is not aware of any advertisement of any of
the Securities;
(n) in purchasing the Securities the Subscriber has complied
with all securities laws of its jurisdiction of residence
and warrants that the sale of the Securities by the Company
is in full compliance with such laws, and the Subscriber
will make all filings necessary in such jurisdiction to
ensure the Company complies with securities laws of such
jurisdiction; and
(o) no person has made to the Subscriber any written or oral
representations:
(i) that any person will resell or repurchase any of the
Securities;
(ii) that any person will refund the purchase price of any
of the Securities; or
(iii) as to the future price or value of any of the
Securities.
6.2 In this Subscription, the term "U.S. Person" shall have the
meaning ascribed thereto in Regulation S and for the purpose
of the Subscription includes any person in the United
States.
7. Representations and Warranties of the Company
7.1 The Company acknowledges and agrees that the Subscriber is
entitled to rely upon the representations and warranties of
the Company contained in this Agreement and further
acknowledges that the Subscriber will be relying upon such
representations and warranties in purchasing the Securities.
7.2 The Company warrants that the Public Record fairly
represents the status of the Company as at the dates
indicated in the Public Record.
8. Acknowledgement and Waiver
8.1 The Subscriber has acknowledged that the decision to
purchase the Securities was solely made on the basis of
publicly available information. The Subscriber hereby
waives, to the fullest extent permitted by law, any rights
of withdrawal, rescission or compensation for damages (other
than as expressly described herein).
9. Costs
9.1 The Subscriber acknowledges and agrees that all costs and
expenses incurred by the Subscriber (including any fees and
disbursements of any special counsel retained by the
Subscriber) relating to the purchase of the Shares shall be
borne by the Subscriber.
10. Governing Law
10.1 This Subscription Agreement is governed by the Securities
and Exchange Commission Act of 1933 (As Amended) of 1933
(The Act). The Subscriber, in its personal or corporate
capacity and, if applicable, on behalf of each beneficial
purchaser for whom it is acting, irrevocably attorns to the
jurisdiction of the courts of the state of Florida
11. Survival
11.1 This Subscription, including without limitation the
representations, warranties and covenants contained herein,
shall survive and continue in full force and effect and be
binding upon the parties hereto notwithstanding the
completion of the purchase of the Securities by the
Subscriber pursuant hereto, the completion of the issue of
Securities of the Company and any subsequent disposition by
the Subscriber of the Shares.
12. Assignment
12.1 This Subscription is transferable or assignable.
13. Execution
13.1 The Company shall be entitled to rely on delivery by
facsimile machine of an executed copy of this Subscription
and acceptance by the Company of such facsimile copy shall
be equally effective to create a valid and binding agreement
between the Subscriber and the Company in accordance with
the terms hereof.
14. Severability
14.1 The invalidity or unenforceability of any particular
provision of this Subscription shall not affect or limit the
validity or enforceability of the remaining provisions of
this Subscription.
15. Termination
15.1 If, prior to Closing, the company determine for valid cause
to terminate this Subscription Agreement, this Agreement and
the obligations of the parties hereto are deemed to have
terminated as at the effective date of such termination.
16. Entire Agreement
16.1 Except as expressly provided in this Agreement and in the
agreements, instruments and other documents contemplated or
provided for herein, this Agreement contains the entire
agreement between the parties with respect to the sale of
the Securities and there are no other terms, conditions,
representations or warranties, whether expressed, implied,
oral or written, by statute or common law, by the Company,
the Agents, the Subscriber or by anyone else.
17. Notices and Counterparts
17.1 All notices and other communications hereunder shall be in
writing and shall be deemed to have been duly given if
mailed or transmitted by any standard form of
telecommunication. Notices to the Subscriber shall be
directed to the address on the delivery instructions;
notices to the Company shall be directed to it at
_______________________________________________ , attention
of The President;
17.2 This Agreement may be executed in any number of
counterparts, each of which, when so executed and delivered,
shall constitute an original and all of which together shall
constitute one instrument.
IN WITNESS WHEREOF the Subscriber has duly executed this
Subscription as of the date first above mentioned.
Number of Shares
to be purchased at U.S.$______ each:__________________
Total purchase price: U.S.$ 1,000,000
DELIVERY INSTRUCTIONS
1. Delivery - please deliver the Share certificate(s) to:
________________________________________________________________________
________________________________________________________________________
2. Registration - registration of the Share certificates which are
to be delivered at Closing should be made as follows:
Citywide Management Services
38 Hartford Street, London W1J 7SG. United Kingdom
3. The undersigned hereby acknowledges that it will deliver to the
Company all such additional completed forms in respect of the
Subscriber's purchase of Securities as may be required for filing
with the appropriate securities commissions and regulatory
authorities and stock exchanges.
Citywide Management Ltd
(Name of Subscriber - Please type or print)
Director
(Signature and, if applicable, Office)
556 Hunkins Waterfront Plaza, Nevis, West Indies.
(Address of Subscriber)
A C C E P T A N C E
The above-mentioned Subscription in respect of the Securities is
hereby accepted by
ATLANTIC SECURITY INC.
DATED at ___________________________________________, the _________
day of ___________________, 2001.
ATLANTIC SECURITY INC.
Per: ________________________________
Authorized Signatory
EXHIBIT B
- ---------
THESE SECURITIES HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND
EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN
RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT
BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE
STATE SECURITIES LAWS.
THESE WARRANTS AND THE SECURITIES DELIVERABLE UPON EXERCISE THEREOF
ARE SUBJECT TO A HOLD PERIOD.
WARRANT CERTIFICATE
WARRANT FOR PURCHASE OF COMMON SHARES
THIS WARRANT WILL BE VOID AND OF NO VALUE UNLESS EXERCISED WITHIN THE
LIMITS HEREIN PROVIDED
THIS WARRANT IS NOT TRANSFERABLE
ATLANTIC SECURITY INC.
(Incorporated under the laws of the sate of Florida)
WARRANT CERTIFICATE NO. _____ 1,000,000 WARRANTS
Each such warrant entitling
the holder to purchase one
(1) Common Share at the
Exercise Price of (i)
US$____ per Common Share,
being the lesser of the
initial closing price or
70% (seventy percent)of the
average 10 (ten) day
closing bid price as
reported by Bloomberg for
the ten trading days
immediately preceding the
exercise day. at or before
5:00 p.m. (EST) on June 30,
2006.
DATE OF ISSUANCE: _______, 2005
THIS IS TO CERTIFY THAT Citywide Management Ltd (herein called the
"Holder") is entitled to acquire in the manner herein provided,
subject to the restrictions herein contained, during the period
commencing on the date hereof and ending at 5:00 p.m. (EST) on June
30, 2006 (the "Expiry Date"), the number of fully paid and non-
assessable common shares ("Common Shares") without nominal or par
value of Atlantic Security Inc. ("the Company") as set forth above.
The Warrants are governed by the Terms and Conditions attached.
Any Common Shares issuable on exercise of the Warrants represented by
this Certificate will contain the following legends:
THESE SECURITIES HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND
EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN
RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT
BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE
STATE SECURITIES LAWS.
THE FOLLOWING ARE THE TERMS AND CONDITIONS REFERRED TO IN THIS
WARRANT:
ARTICLE 1
INTERPRETATION
1.1 Definitions
In these Terms and Conditions, unless there is something in the
subject matter or context inconsistent therewith:
(a) "Common Shares" means the common shares in the capital of
the Company as constituted at the date hereof and any
shares resulting from any subdivision or consolidation of
the Common Shares;
(b) "Company" means Atlantic Security Inc. or its successor
corporation as a result of consolidation, amalgamation or
merger with or into any other corporation or corporations,
or as a result of the conveyance or transfer of all or
substantially all of the properties and estates of the
Company as an entirety to any other corporation and
thereafter "Company" will mean such successor corporation;
(c) "Company's Auditors" means an independent firm of
accountants duly appointed as Auditors of the Company;
(d) "herein", "hereby" and similar expressions refer to these
Terms and Conditions as the same may be amended or modified
from time to time; and the expression "Article" and
"Section" followed by a number refer to the specified
Article or Section of these Terms and Conditions;
(e) "person" means an individual, corporation, partnership,
trustee or any unincorporated organization and words
importing persons have a similar meaning;
(f) "Warrant Holders" or "Holders" means the holders of the
Warrants; and
(g) "Warrants" mean share purchase warrants issued by the
Company.
1.2 Gender
Words importing the singular number include the plural and
vice versa and words importing the masculine gender include the
feminine and neuter genders.
1.3 Interpretation Not Affected by Headings
The division of these Terms and Conditions into Articles
and Sections, and the insertion of headings are for convenience of
reference only and will not affect the construction or interpretation
thereof.
1.4 Applicable Law
The Warrants will be construed in accordance with the laws
of__________________________________.
ARTICLE 2
ISSUE OF ADDITIONAL WARRANTS
2.1 Additional Warrants
The Company may at any time and from time to time issue
additional warrants or grant options or similar rights to acquire or
purchase Common Shares.
2.2 Issue in Substitution for Lost Warrants
(a) In case a Warrant becomes mutilated, lost, destroyed or
stolen, the Company, at its discretion, may issue and
deliver a new Warrant of like date and tenor as the one
mutilated, lost, destroyed or stolen, in exchange for and
in place of and upon cancellation of such mutilated
Warrant, or in lieu of, and in substitution for such lost,
destroyed or stolen Warrant and the substituted Warrant
will be entitled to the benefit hereof and rank equally in
accordance with its terms with all other Warrants issued or
to be issued by the Company.
(b) The applicant for the issue of a new Warrant pursuant
hereto will bear the cost of the issue thereof and in case
of loss, destruction or theft furnish to the Company such
evidence of ownership and of loss, destruction, or theft of
the Warrant so lost, destroyed or stolen as will be
satisfactory to the Company in its discretion and such
applicant may also be required to furnish indemnity in
amount and form satisfactory to the Company in its
discretion, and will pay the reasonable charges of the
Company in connection therewith.
2.3 Warrant Holder Not a Shareholder
A Warrant Holder is not a shareholder of the Company, is
not entitled to any rights or interests as a shareholder of the
Company and has only the rights and interests expressly provided
herein.
ARTICLE 3
NOTICE
3.1 Notice to Warrant Holders
Any notice to be given to the Holders will be sent by
prepaid registered post and will be deemed to have been received by
the Holder on the fourth day following the mailing thereof or on the
date of successful facsimile transmission or email. Any such notice
will be addressed to the Holder at the address of the Holder appearing
on the Holder's Warrant or to such other address as the Holder may
advise the Company by notice in writing.
3.2 Notice to the Company
Any notice to be given to the Company may be delivered
personally, or sent by facsimile or other means of electronic
communication providing a printed copy ("Electronic Communication") or
may be forwarded by first class prepaid registered mail to the
addresses set forth below. Any notice delivered or sent by Electronic
Communication shall be deemed to have been given and received at the
time of delivery. Any notice mailed as aforesaid shall be deemed to
have been given and received on expiration of 72 hours after it is
posted, addressed as follows:
Atlantic Security Inc.
________________
________________
Attention: The President
Facsimile No.: __________________
ARTICLE 4
EXERCISE OF WARRANTS
4.1 Method of Exercise of Warrants
The right to acquire Common Shares conferred by the
Warrants may be exercised by the Holder of such Warrant by
surrendering the Warrant Certificate representing same, together with
a duly completed and executed Exercise Form in the form attached
hereto and a bank draft or certified cheque payable to the Company at
its principal office in the_______________________________, for the
purchase price applicable at the time of exercise in respect of the
number of Warrants exercised.
4.2 Effect of Exercise of Warrants
(c) Upon surrender and payment as aforesaid the Common Shares
so subscribed for will be deemed to have been issued and
such person or persons will be deemed to have become the
holder or holders of record of such Common Shares on the
date of such surrender.
(d) Within ten (10) business days after surrender as aforesaid,
the Company will forthwith cause to be delivered to the
person or persons in whose name or names the Common Shares
so subscribed for are to be issued as specified in such
subscription or mailed to him or them at his or their
respective addresses specified in such subscription, a
certificate or certificates for the appropriate number of
Common Shares not exceeding those which the Warrant Holder
is entitled to acquire pursuant to the Warrant surrendered.
4.3 Subscription for Less Than Entitlement
The holder of any Warrant may subscribe for and acquire a
number of Common Shares, less than the number which he is entitled to
acquire pursuant to the surrendered Warrant. In the event of any
acquisition of a number of Common Shares less than the number which
can be acquired pursuant to a Warrant, the holder thereof upon
exercise thereof will in addition be entitled to receive a new Warrant
in respect of the balance of the Common Shares which he was entitled
to acquire pursuant to the surrendered Warrant and which were not then
acquired.
4.4 Warrants for Fractions of Shares
To the extent that the holder of any Warrant is entitled to
receive on the exercise or partial exercise thereof a fraction of a
Common Share, such right may be exercised in respect of such fraction
only in combination with another Warrant or other Warrants which in
the aggregate entitle the holder to receive a whole number of such
Common Shares.
4.5 Expiration of Warrants
After the expiration of the period within which a Warrant
is exercisable, all rights thereunder will wholly cease and terminate
and such Warrant will no longer be valid and of no effect.
4.6 Time of Essence
Time will be of the essence hereof.
4.7 Adjustments
The number of Common Shares deliverable upon the exercise
of the Warrants will be subject to adjustment in the event and in the
manner following:
(e) if and whenever the Common Shares at any time outstanding
are subdivided into a greater or consolidated into a lesser
number of Common Shares the number of Common Shares
deliverable upon the exercise of the Warrants will be
increased or decreased proportionately as the case may be;
(f) (i) in case of any capital reorganization or of any
reclassification of the capital of the Company or in the
case of the consolidation, merger or amalgamation of the
Company with or into any other Company (hereinafter
collectively referred to as a "Reorganization"), each
Warrant will after such Reorganization confer the right to
acquire the number of shares or other securities of the
Company (or of the Company resulting from such
Reorganization) which the Warrant Holder would have been
entitled to upon Reorganization if the Warrant Holder had
been a shareholder at the time of such Reorganization;
(ii) in any such case, if necessary, appropriate
adjustments will be made in the application of the
provisions of this Article 4 relating to the rights and
interest thereafter of the holders of the Warrants so that
the provisions of this Article 4 will be made applicable as
nearly as reasonably possible to any shares or other
securities deliverable after the Reorganization or the
exercise of the Warrants;
(iii) the subdivision or consolidation of Common Shares at
any time outstanding into a greater or lesser number of
Common Shares (whether with or without par value) will not
be deemed to be a Reorganization for the purposes of this
Section 4.7(f);
(g) the adjustments provided for in this Section 4.7 are
cumulative and will become effective immediately after the
record date for or, if a record date is fixed, the
effective date of the event which results in such
adjustments.
4.8 Determination of Adjustments
If any questions will at any time arise with respect to any
adjustment provided for in Section 4.7, such question will be
conclusively determined by the Company's Auditors, or, if they decline
to so act any other firm of chartered accountants, , that the Company
may designate and who will have access to all appropriate records and
such determination will be binding upon the Company and the holders of
the Warrants.
ARTICLE 5
COVENANTS BY THE COMPANY
5.1 Reservation of Shares
The Company will reserve and there will remain unissued out
of its authorized capital a sufficient number of Common Shares to
satisfy the rights provided for herein and in the Warrants should the
holders of all the Warrants from time to time outstanding determine to
exercise such rights in respect of all Common Shares which they are or
may be entitled to acquire pursuant thereto and hereto.
5.2 Company may Purchase
The Company may from time to time offer to purchase and
purchase, for cancellation only, any Warrants in such manner, from
such persons and on such terms and conditions as it determines.
ARTICLE 6
WAIVER OF CERTAIN RIGHTS
6.1 Immunity of Shareholders, Etc.
The Warrant Holder, as part of the consideration for the
issue of the Warrants, waives and releases and will not have any
right, cause of action or remedy now or hereafter existing in any
jurisdiction against any past, present or future incorporator,
shareholder, director or officer (as such) of the Company for the
issue of Common Shares pursuant to any Warrant or on any covenant,
agreement, representation or warranty by the Company herein contained
or in the Warrant.
ARTICLE 7
MODIFICATION OF TERMS, MERGER, SUCCESSORS
7.1 Modification of Terms and Conditions for Certain Purposes
From time to time the Company may, subject to the
provisions of these Terms and Conditions, modify the Terms and
Conditions hereof, for the purpose of correction or rectification of
any ambiguities, defective provisions, errors or omissions herein.
7.2 Transferability
The Warrant and all rights attached to it are not
transferable or assignable.
IN WITNESS WHEREOF ATLANTIC SECURITY INC. has caused this Warrant to
be signed by its duly authorized officers under its corporate seal,
and this Warrant to be dated as of the date of issuance first above
written.
SIGNED BY:
ATLANTIC SECURITY INC.
Per: ______________________________
Authorized Signatory
Per: ______________________________
Authorized Signatory
Date: ______________________________
EXERCISE FORM
TO: Atlantic Security Inc.
The undersigned holder of Warrants hereby exercises the right to
acquire _____________ Common Shares without nominal or par value of
Atlantic Security Inc. (the "Company") (or such number of other
securities or property to which such Warrants entitle the undersigned
in lieu thereof or in addition thereto under the provisions set forth
in the Warrant Certificate) according to the terms set forth in the
Warrant Certificate.
Such securities or property are to be issued as follows:
Name:
____________________________________________________________
Address in Full:
____________________________________________________________
____________________________________________________________
The undersigned acknowledges that the certificates representing the
Common Shares issuable hereunder shall bear such legends as may be
required under applicable securities law.
DATED this ______ day of ______________________, _____.
Signature
(Print full name)
(Print full address)
Instructions:
The registered holder may exercise his right to acquire Common Shares
by completing the above form, surrendering this Warrant Certificate
and providing payment by bank draft, money order or certified check to
the Company at its principal office in_____________________. For the
protection of the holder, it would be prudent to register if
forwarding by mail. Certificates for Common Shares will be delivered
or mailed as soon as practicable after the exercise of the Warrants.
The rights of the registered holder cease if the Warrants are not
exercised prior to 5:00 p.m. (EST) on the Expiry Date