-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Lw8XoHtmyqeJmWKV6jTIRH0gRsJlxqvbPDD/JKEvyv04oMBxIKyUqdKM3Bql6Zym 0B9Xz82Jc+5Qcny5crhqzA== 0000910680-96-000256.txt : 19960927 0000910680-96-000256.hdr.sgml : 19960927 ACCESSION NUMBER: 0000910680-96-000256 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 3 FILED AS OF DATE: 19960926 SROS: NASD SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: MICROFRAME INC CENTRAL INDEX KEY: 0000754813 STANDARD INDUSTRIAL CLASSIFICATION: COMPUTER PERIPHERAL EQUIPMENT, NEC [3577] IRS NUMBER: 222413505 STATE OF INCORPORATION: NJ FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-37321 FILM NUMBER: 96634529 BUSINESS ADDRESS: STREET 1: 21 MERIDIAN RD CITY: EDISON STATE: NJ ZIP: 08820 BUSINESS PHONE: 2014944440 MAIL ADDRESS: STREET 1: 21 MERIDIAN RD CITY: EDISON STATE: NJ ZIP: 08820 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: ROMA STEPHEN P CENTRAL INDEX KEY: 0000906126 STANDARD INDUSTRIAL CLASSIFICATION: [] FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: C/O MICROFRAME INC STREET 2: 21 MERIDIAN ROAD CITY: EDISON STATE: NJ ZIP: 08820 MAIL ADDRESS: STREET 1: C/O MICROFRAME INC STREET 2: 21 MERIDIAN ROAD CITY: EDISON STATE: NJ ZIP: 08820 SC 13D/A 1 STEPHEN ROMA SCHED. 13D/A SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 13D Under the Securities Exchange Act of 1934 (Amendment No. 4) MicroFrame, Inc. ------------------------------------------------------- (Name of issuer) Common Stock, $.001 par value ------------------------------------------------------- (Title of Class of Securities) 594915-10-0 (pre-split); 594915-20-9 (post-split) ------------------------------------------------------- (CUSIP Number) James Alterbaum, Esq. Parker Chapin Flattau & Klimpl, LLP 1211 Avenue of the Americas New York, New York 10036 (212) 704- 6272 ------------------------------------------------------- (Name, address and telephone number of person authorized to receive notices and communications) June 10, 1996 ------------------------------------------------------- (Date of event which requires filing of this statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(b)(3) or (4), check the following box [_] Check the following box if a fee is being paid with the statement [_]. (A fee is not required only if the reporting person: (1) has a previous statement on file reporting beneficial ownership of more than five percent of the class of securities described in Item 1; and (2) has filed no amendment subsequent thereto reporting beneficial ownership of five percent or less of such class.) (See Rule 13d-7.) Page 1 of 17 Pages Page 2 of 17 Pages CUSIP Nos.594915-10-0/594915-20-9 Response to Question 1: Stephen P. Roma Response to Question 2: N/A Response to Question 3: SEC USE ONLY Response to Question 4: PF Response to Question 5: N/A Response to Question 6: United States Response to Question 7: 466,899 Response to Question 8: 0 Response to Question 9: 466,899 Response to Question 10: 0 Response to Question 11: 466,899 Response to Question 12: N/A Response to Question 13: 9.5% Response to Question 14: IN Page 3 of 17 Pages CUSIP Nos.594915-10-0/594915-20-9 INTRODUCTION This amendment to the Schedule 13D (the "Statement") is being filed by Stephen M. Deixler. This Statement restates (except for previously filed paper exhibits) the entire text of the Schedule 13D, but omits information no longer applicable and reflects transactions after the Original Schedule 13D even if not required to be reported on this or previously filed amendments. In September 1993, MicroFrame, Inc., a New Jersey corporation (the "Company"), the issuer of the security to which this Statement pertains effected a 1 for 5 reverse stock split of the Company's Common Stock. All disclosures in this Statement regarding stock ownership and per share price amounts reflect post-split numbers. ITEM 1. SECURITY AND ISSUER. This Statement relates to the common stock, $.001 par value per share ("Common Stock"), of the Company. The principal executive offices of the Company are located at 21 Meridian Road, Edison, New Jersey 08820. ITEM 2. IDENTITY AND BACKGROUND. (a) This Statement is being filed by Stephen P. Roma. (b) The business address of Mr. Roma is c/o MicroFrame, Inc., 21 Meridian Road, Edison, New Jersey 08820. (c) The principal occupation or employment of Mr. Roma is the President and Chief Executive Officer of Family Health and Fitness Center. Mr. Roma is also a director of the Company. The Company designs, develops and markets a broad range of security, network management and remote maintenance products for voice and data communications network. (d) During the last five years, Mr. Roma has not been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors). (e) During the last five years, Mr. Roma has not been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is to subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws. (f) Mr. Roma is a citizen of the United States. Page 4 of 17 Pages CUSIP Nos.594915-10-0/594915-20-9 ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION. (a) In the original 13D dated June 11, 1991 ("Original 13D"), Mr. Roma reported that on June 11, 1991, Steve Associates, a general partnership (the "Partnership"), the landlord on the Company's current lease, owned by Mr. Deixler and Mr. Roma equally as general partners agreed to convert certain long-term debt (arising from lease arrears of the Company) in the amount of $445,066 owed to it by agreeing to accept a total of 296,711 shares of Common Stock at a conversion price of $1.50 per share. On June 19, 1991, Mr. Roma purchased 16,000 shares of Common Stock in a private purchase at a price of $1.25 per share for an aggregate purchase price of $20,000. In addition, on April 2, 1991, Mr. Roma purchased 5,000 shares of Common Stock in a private purchase at a price of $1.25 per share for an aggregate purchase price of $6,250. The funds used by Mr. Roma to purchase such shares of Common Stock were the personal funds of Mr. Roma. Mr. Roma previously obtained beneficial ownership of 101,200 shares of Common Stock pursuant to private purchases of 99,600 shares of Common Stock and the acquisition of an option to acquire 1,600 shares of Common Stock (which option has expired). (b) In Amendment No. 1 to the Original 13D dated August 1, 1991 ("Amendment No. 1"), Mr. Roma reported that on August 1, 1991, he expended $45,000 from personal funds to purchase 30,405 shares of Common Stock at $1.48 per share. (c) In Amendment No. 2 to the Original 13D dated January 7, 1992 ("Amendment No.2"), Mr. Roma reported that on January 7, 1992 the Partnership distributed 296,711 shares of Common Stock to its two partners, Stephen M. Deixler and Stephen P. Roma. Pursuant to such distribution, Mr. Roma received 86,075 shares of Common Stock and Mr. Deixler received 210,636 shares of Common Stock which he immediately transferred, in equal amounts, to his three adult children as a gift. As a result of the distribution, the Partnership's ownership of Common Stock decreased from 376,711 to 80,000 shares. On August 31, 1991, pursuant to the Put Option, Mr. Roma purchased 30,405 shares of Common Stock from the Company at a purchase price of $1.48 per share for an aggregate purchase price of $45,000. All of the shares of Common Stock purchased by Mr. Deixler pursuant to the Put Option were purchased with the personal funds of Mr. Deixler. On February 10, 1992, pursuant to a put option (the "Put Option") exercised by the Company, Mr. Roma purchased 30,405 shares of Common Stock from the Company at a purchase price of $1.48 per shares for an aggregate purchase price of $45,000. The Put Option was originally scheduled to expire on September 30, 1991 and was extended by agreement until February 29, 1992. Page 5 of 17 Pages CUSIP Nos.594915-10-0/594915-20-9 (d) In Amendment No. 3 to the Original 13D dated May 11, 1993 ("Amendment No. 3"), Mr. Roma reported that on May 11, 1993, Mr. Roma purchased 90,000 shares of Common Stock from the Company pursuant to a private placement by the Company of an aggregate of 800,000 shares at a purchase price of $1.25 per share (the "Private Placement"). Mr. Roma agreed to pay an aggregate purchase price of $112,500. All of the shares of Common Stock purchased by Mr. Roma were purchased with a promissory note of Mr. Roma payable June 2, 1993. (e) On August 26, 1994, the Partnership distributed 45,000 shares of Common Stock to its two partners Stephen M. Deixler and Stephen P. Roma. Pursuant to such distribution, Mr. Roma received 19,320 shares of Common Stock and Mr. Deixler received 25,680 shares of Common Stock. (f) On June 10, 1996, Mr. Roma expended from personal funds a total of $33,331 to purchase 26,665 Units in the Company's 1996 Private Placement at a purchase price of $1.25 per Unit, each Unit consisting of one share of Common Stock and one Class A and one Class B Warrant, each exercisable into one share of Common Stock at an exercise price of $1.50 and $2.00, respectively. The remaining securities acquired by Mr. Roma were acquired in transactions described in paragraph (c) of Item 5 of this Statement and did not require the expenditure of funds by Mr. Roma. ITEM 4. PURPOSE OF TRANSACTION. The securities of the Company held by Mr. Roma were acquired and are being held, as an investment. Mr. Roma has no present plans or proposals which relate to or would result in: (a) the acquisition or disposition by any person of additional securities of the Company (although Mr. Roma retains the right to exercise at any time and from time to time in his discretion the warrants and the stock options to acquire additional shares of Common Stock described in Item 5 or to purchase or sell equity securities of the Company owned by him in open market or in privately negotiated transactions as circumstances warrant), (b) an extraordinary corporate transaction, such as a merger, reorganization or liquidation involving the Company or any of its subsidiaries, (c) a sale or transfer of a material amount of assets of the Company or any of its subsidiaries, (d) any change, in the present board of directors or management of the Company, including any plans or proposals to change the number or term of directors or to fill any existing vacancies on the board, (e) any material change in the present capitalization or dividend policy of the Company, (f) any other material change in the Company's business or corporate structure, (g) any change in the Company's charter, by-laws or instruments corresponding thereto or other actions which may impede the acquisition of control of the Company by any person, (h) causing a class of securities of the Company to be delisted from a national securities exchange or cease being authorized to be quoted in an inter-dealer quotation system of a registered national securities association, (i) a class of equity securities of the Company becoming eligible for termination of registration pursuant to Section 12(g)(4) of the Securities Exchange Act of 1934 or (j) any action similar to any of those enumerated above. Page 6 of 17 Pages CUSIP Nos.594915-10-0/594915-20-9 ITEM 5. INTEREST IN SECURITY OF THE ISSUER. (a) & (b) The following table sets forth the separate beneficial ownership (and information concerning voting and dispositive power) of Stephen M. Deixler as of September 16, 1996: Number of Percent Name Shares (1) of Class (2) - ---- ---------- ------------ Stephen P. Roma 466,899 (3) 9.5% - -------------------- (1) Stephen P. Roma has sole voting and dispositive power with respect to the shares owned by him. (2) Percent of Class assumes the issuance of the Common Stock upon the exercise of stock options and warrants (to the extent exercisable on or within 60 days after September 16, 1996) deemed beneficially owned by Mr. Roma, but by no other person or entity. (3) Includes 47,877 shares of Common Stock held by Donaldson, Lufkin & Jenrette Securities Corporation custodian f/b/o Stephen P. Roma, IRA. Includes 8,400 shares of Common Stock held by Mr. Roma and his wife as joint tenants. Also includes 10,000 shares of Common Stock which may be acquired pursuant to currently exercisable non-employee director options under the 1994 Plan. Also includes 53,330 shares issuable upon exercise of currently exercisable Class A and Class B Warrants of the 1996 Private Placement. Does not include 1,200 shares of Common Stock held by Mr. Roma as custodian for his son or 29,108 shares owned by Mr. Roma's wife, some of which are held in Mrs. Roma's individual retirement account, as to which shares Mr. Roma disclaims beneficial ownership. (c) On September 19, 1995, Mr. Roma was granted a Non-Employee Director Option under the Company's 1994 Stock Option Plan to purchase 10,000 shares of Common Stock at an exercise price of $3.125 per share, which option became exercisable as to 2,500 shares on each of December 19, 1995, March 19, 1996, June 19, 1996 and shall become exercisable as to 2,500 shares on September 19, 1996, provided that Mr. Roma serves as a Non-Employee Director on such dates. (d) Not applicable. ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE COMPANY. (a) Mr. Roma holds options granted under the 1994 Stock Option Plan to purchase 10,000 shares of Common Stock at an exercise price of $3.125, which option is presently exercisable in full and expires on September 18, 2000. Page 7 of 17 Pages CUSIP Nos.594915-10-0/594915-20-9 (d) Mr. Roma holds 26,665 Class A and Class B Warrants, which were included in the Units he purchased in the Company's 1996 Private Placement. The Class A Warrants are presently exercisable in full at an exercise price of $1.50 per share and the Class B Warrants are presently exercisable in full at an exercise price of $2.00 per share. Both Class A and Class B Warrants expire on June 10, 2000. ITEM 7. MATERIAL TO BE FILED AS EXHIBITS. The following are exhibits to this Statement: 1(a) Promissory Note of Stephen P. Roma due June 2, 1993 for $112,500 payable to the Company.* 1(b) Non-Employee Director Stock Option Contract dated September 19, 1995 between the Company and Mr. Roma. 1(c) Form of Class A and Class B Warrants. - -------------------------------------- * Previously filed Page 8 of 17 Pages CUSIP Nos.594915-10-0/594915-20-9 Signatures After reasonable inquiry and to the best of the knowledge and belief of the undersigned, the undersigned certify that the information set forth in this Statement is true, complete and correct. Dated: September 19, 1996 /s/ Stephen P. Roma ---------------------------- Stephen P. Roma EX-99 2 EX.EX.1(B) NON-EMPL. STOCK OPTION CONTRACT 1994 STOCK OPTION PLAN NON-EMPLOYEE DIRECTOR STOCK OPTION CONTRACT ------------------------------------------- THIS NON-EMPLOYEE DIRECTOR STOCK OPTION CONTRACT entered into as of September 19, 1995 between MICROFRAME, INC., a New Jersey corporation (the "Company"), and Stephen P. Roma (the "Optionee"). W I T N E S S E T H: 1. The Company, in accordance with the allotment made by the Compensation/Stock Option Committee (the "Committee") and subject to the terms and conditions of the 1994 Stock Option Plan of the Company, as amended (the "Plan"), grants on the date hereof to the Optionee an option to purchase an aggregate of 10,000 shares of the common stock, $.001 par value per share, of the Company ("Common Stock") at an exercise price of $3.125 per share, being at least equal to the fair market value of such shares of Common Stock on the date hereof. This option is a nonqualified stock option and is not intended to constitute an incentive stock option within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the "Code"). 2. The term of this option shall be 5 years from the date hereof, subject to earlier termination as provided in the Plan. However, this option shall not be exercisable until three months from the date hereof, at which time it shall become exercisable as to one-quarter of the total number of shares of Common Stock subject hereto, and as to an additional one-quarter of such shares on each of the next three three-month anniversaries of the date of grant, provided that the Optionee continues to serve as a Non-Employee Director (as defined in the Plan) on such dates. The right to purchase shares of Common Stock under this option shall be cumulative, so that if the full number of shares purchasable in a period shall not be purchased, the balance may be purchased at any time or from time to time thereafter, but not after the expiration of the option. Notwithstanding any of the foregoing, in no event may a fraction of a share of Common Stock be exercised or purchased under this option. 3. This option shall be exercised by giving written notice to the Company at its principal office, presently located at 21 Meridian Road, Edison, New Jersey 08820, Attention: Compensation/Stock Option Committee, stating that the Optionee is exercising the option hereunder, specifying the number of shares being purchased and accompanied by payment in full of the aggregate purchase price therefor (a) in cash or by certified check, (b) with previously acquired shares of Common Stock which have been held by the Optionee for at least six months having a fair market value equal to the aggregate exercise price, or (c) a combination of the foregoing. 4. The Company may withhold cash and/or shares of Common Stock to be issued to the Optionee in the amount which the Company determines is necessary to satisfy its obligation, if any, to withhold taxes or other amounts incurred by reason of the grant or exercise of this option or the disposition of the underlying shares of Common Stock. Alternatively, the Company may require the Optionee to pay the Company such amount in cash promptly upon demand. 5. Notwithstanding the foregoing, this option shall not be exercisable by the Optionee unless (a) a Registration Statement under the Securities Act of 1933, as amended (the "Securities Act") with respect to the shares of Common Stock to be received upon the exercise of this option shall be effective and current at the time of exercise or (b) there is an exemption from registration under the Securities Act for the issuance of the shares of Common Stock upon such exercise. The Optionee hereby represents and warrants to the Company that, unless such a Registration Statement is effective and current at the time of exercise of this option, the shares of Common Stock to be issued upon the exercise of this option will be acquired by the Optionee for his own account, for investment only and not with a view to the resale or distribution thereof. In any event, the Optionee shall notify the Company of any proposed resale of the shares of Common Stock issued to him upon exercise of this option. Any subsequent resale or distribution of shares of Common Stock by the Optionee shall be made only pursuant to (x) a Registration Statement under the Securities Act which is effective and current with respect to the sale of shares of Common Stock being sold, or (y) a specific exemption from the registration requirements of the Securities Act, but in claiming such exemption, the Optionee shall, prior to any offer of sale or sale of such shares of Common Stock, provide the Company (unless waived by the Company) with a favorable written opinion of counsel, in form and substance satisfactory to the Company, as to the applicability of such exemption to the proposed sale or distribution. Such representations and warranties shall also be deemed to be made by the Optionee upon each exercise of this option. Nothing herein shall be construed as requiring the Company to register the shares subject to this option under the Securities Act. 6. Notwithstanding anything herein to the contrary, if at any time the Committee shall determine, in its discretion, that the listing or qualification of the shares of Common Stock subject to this option on any securities exchange or under any applicable law, or the consent or approval of any governmental regulatory body, is necessary or desirable as a condition to, or in connection with, the granting of an option or the issue of shares of Common Stock hereunder, this option may not be exercised in whole or in part unless such listing, qualification, consent or approval shall have been effected or obtained free of any conditions not acceptable to the Committee. 7. The Company may affix appropriate legends upon the certificates for shares of Common Stock issued upon exercise of this option and may issue such "stop transfer" instructions to its transfer agent in respect of such shares as it determines, in its discretion, to be necessary or appropriate to (a) prevent a violation of, or to perfect an exemption from, the registration requirements of the Securities Act, or (b) implement the provisions of the Plan or this Contract or -2- any other agreement between the Company and the Optionee with respect to such shares of Common Stock. 8. Nothing in the Plan or herein shall confer upon the Optionee any right to continue as a director of the Company, its parent or any of its subsidiaries, or interfere in any way with any right to terminate such directorship at any time for any reason whatsoever without liability to the Company, its parent or any of its subsidiaries or any shareholder of the Company, its parent or any of its subsidiaries. 9. The Company and the Optionee agree that they will both be subject to and bound by all of the terms and conditions of the Plan, a copy of which is attached hereto and made a part hereof. Any capitalized term not defined herein shall have the meaning ascribed to it in the Plan. In the event of a conflict between the terms of this Contract and the terms of the Plan, the terms of the Plan shall govern. 10. The Optionee represents and agrees that he will comply with all applicable laws relating to the Plan and the grant and exercise of this option and the disposition of the shares of Common Stock acquired upon exercise of the option, including without limitation, federal and state securities and "blue sky" laws. 11. This option is not transferable by the Optionee otherwise than by will or the laws of descent and distribution and may be exercised, during the lifetime of the Optionee, only by the Optionee or the Optionee's legal representatives. 12. This Contract shall be binding upon and inure to the benefit of any successor or assign of the Company and to any heir, distributee, executor, administrator or legal representative entitled by law to the Optionee's rights hereunder. 13. This Contract shall be governed by, and construed and enforced in accordance with, the laws of the State of New Jersey, without regard to the conflicts of law rules thereof. 14. The invalidity, illegality or unenforceability of any provision herein shall not affect the validity, legality or enforceability of any other provision. -3- 15. The Optionee agrees that the Company may amend the Plan and the options granted to the Optionee under the Plan, subject to the limitations contained in the Plan. IN WITNESS WHEREOF, the parties hereto have executed this Contract as of the day and year first above written. MICROFRAME INC. By: /s/ Stephen B. Gray ------------------------- /s/ Stephen P. Roma ------------------------- Stephen P. Roma, Optionee 91 Durand Drive Marlboro, NJ 07746 ------------------------- Address Address 21610-1 9/19/96 -4- EX-99 3 EX.1(C) - FORM OF CLASS A&B WARRANTS This Warrant and the Common Stock issuable on exercise of this Warrant (the "Underlying Shares") may be transferred, sold, assigned or hypothecated, only if registered by the Company under the Securities Act of 1933 (the "Act") and if registered or qualified in every applicable state or other jurisdiction, or if the Company has recieved the favorable opinion of counsel to the Holder, which opinion and counsel shall be satisfactory to the counsel to the Company, to the effect that such registration or qualification of the Warrant or the Underlying Shares is not necessary in connection with such transfer, sale, assignment or hypothecation. MICROFRAME, INC. [CLASS A WARRANT] [CLASS B WARRANT] DATED: as of _____________ Number of Shares: Holder: Address: _____________________________________ THIS CERTIFIES THAT the Holder is entitled to purchase from MicroFrame, Inc., a New Jersey corporation (hereinafter called the "Company"), at [$1.50 per share for Class A] [$2.00 per share for Class B] the number of shares of the Company's common stock set forth above ("Common Stock"). 1. (a) All rights granted under this Warrant shall expire at 5:00 p.m., New York City time, on [the fourth anniversary of the date of grant], and no such shares of Common Stock may be acquired under this Warrant from and after such date. 2. This Warrant and the Common Stock issuable on exercise of this Warrant (the "Underlying Shares") may be transferred, sold, assigned or hypothecated, only if registered by the Company under the Act and registered and qualified in every applicable state or other jurisdiction or it the Company has received the favorable opinion of counsel to the holder, which opinion and counsel shall be satisfactory to counsel to the Company, to the effect that registration of the Warrant or the Underlying Shares and registration and qualification in every applicable state is not necessary in connection with such transfer, sale, assignment or hypothecation. The Underlying Shares shall be appropriately legended to reflect this restriction and stop transfer instructions shall apply. The restriction on transfer contained in this Section shall apply to all successive transfers. 3. The Common Stock underlying this Warrant is entitled to registration rights under a separate agreement with Holder. 4. Any permitted assignment of this Warrant shall be effected by the Holder by (i) executing an appropriate form of assignment; (ii) surrendering the Warrant for cancellation at the office of the Company, accompanied by the opinion of the counsel referred to above; and (iii) unless in connection with an effective registration statement which covers the sale of this Warrant (it being understood that no registration rights have been granted for the sale of this Warrant, as distinguished from the sale of the Shares underlying this Warrant) and or the Shares underlying the Warrant, delivery to the Company of the statement by the Holder (in a form acceptable to the Company and its counsel) that such Warrant is being acquired by the Holder for investment and not with a view to its distribution or resale; whereupon the Company shall issue, in the name or names specified by the Holder (including the Holder) new Warrants representing in the aggregate rights to purchase the same number of Shares as are purchasable under the Warrant surrendered. Such Warrants shall be exercisable immediately upon any such assignment of the number of Warrants assigned. 5. The term "Holder" should be deemed to include any transferee Holder of this Warrant. 6. The Company covenants and agrees that all shares of Common Stock which may be issued upon exercise hereof will, upon issuance, be duly and validly issued, fully paid and non-assessable and no personal liability will attach to the Holder thereof. 7. This Warrant shall not entitle the Holder to any voting rights or other rights as a stockholder of the Company. 8. In the event that while this Warrant is outstanding, the outstanding shares of Common Stock of the Company are at any time increased or decreased or changed into or exchanged for a different number or kind of share or other security of the Company or of another Corporation through reorganization, merger, consolidation, liquidation, recapitalization, stock split, combination of shares or stock dividends payable with respect to such Common Stock, appropriate adjustments in the number and kind of such securities then subject to this Warrant shall be made effective as of the date of such occurrence so that the position of the Holder upon exercise will be the same as it would have been had he owned immediately prior to the occurrence of such events the Common Stock subject to this Warrant. Such adjustment shall be made successively whenever any event listed above shall occur and the Company will notify the Holder of the Warrant of each such adjustment. Any fraction of a share resulting from any adjustment shall be eliminated and the price per share of the remaining shares subject to this Warrant adjusted accordingly. 9. The rights represented by this Warrant may be exercised at any time within the period above specified by (i) surrender of this Warrant (with the purchase for at the end hereof properly execute) at the principal executive office of the Company (or such other office or agency of the Company as it may designate by notice in writing to the Holder at the address of the Holder appearing on the books of the Company); (ii) payment to the Company of the exercise price for the number of Shares specified in the above-mentioned purchase form together with applicable stock transfer taxes, if any; and (iii) unless in connection with an effective registration statement which covers the sale of the shares underlying the Warrant, the delivery to the Company of a statement by the Holder (in a form -2- acceptable to the Company and its counsel) that such Shares are bing acquired by the Holder for investment and not with a view to their distribution or resale. The certificates for the Common Stock so purchased shall be delivered to the Holder within a reasonable time, not exceeding ten (10) business days after all requisite documentation has been provided, after the rights represented by this Warrant shall have been so exercised, and shall bear a restrictive legend with respect to any applicable securities laws. 10. This Warrant shall be governed by and construed in accordance with the local laws of the State of New Jersey. The New Jersey courts shall have exclusive jurisdiction over this instrument and the enforcement thereof. Service of process shall be effective if by certified mail, return receipt requested. All notices shall be in writing and shall be deemed given upon receipt by the party to whom addressed. This instrument shall be enforceable by decrees of specific performances well as other remedies. IN WITNESS WHEREOF, MicroFrame, Inc. has caused this Warrant to be signed by its duly authorized officers under its corporate seal, and to be dated as of the date set forth above. MICROFRAME, INC. By: ______________________________ -3- PURCHASE FORM (To be signed only upon exercise of Warrant) The undersigned, the holder of the foregoing Warrant, hereby irrevocably elects to exercise the purchase rights represented by such Warrant for, and to purchase thereunder, _____ shares of no par value Common Stock and herewith make payment of $__________ thereof, and requests that the certificates for shares of Common Stock be issued in the name(s) of, and delivered to _____________ whose address(es) is (are) __________________________________________________________. Dated: ________________, 19___ ______________________________ ______________________________ Address -4- TRANSFER FORM (To be signed only upon transfer of the Warrant) For value recieved, the undersigned hereby sells, assigns, and transfers unto ______________ the right to purchase shares of Common Stock represented by the foregoing Warrant to the extent of __________ shares of Common Stock, and appoints ___________________________ attorney to transfer such rights on the books of __________________________, with full power of substitution in the premises. Dated: ________________, 19___ ______________________________ Holder ______________________________ Address In the presence of: -5- -----END PRIVACY-ENHANCED MESSAGE-----