WARRANT TO PURCHASE
50,000 Units
RETROSPETTIVA, INC.
REPRESENTATIVE'S WARRANT
Dated: July ___, 1997
THIS CERTIFIES that Kensington Securities, Inc. (herein sometimes called
the "Holder" and/or the "Representative") is entitled to purchase from
Retrospettiva, Inc., a California corporation (the "Company"), at the price and
during the period as hereinafter specified, up to 50,000 Units of the Company's
securities with each Unit (the "Representative's Warrant Unit") consisting of
two (2) shares of the Company's no par value per share Common Stock (the
"Warrant Unit Shares") and one Redeemable Warrant (the "Underlying Warrant")
entitling the holder thereof to purchase for $7.50 (the "Underlying Warrant
Exercise Price"), one share of Common Stock (the "Underlying Warrant Shares")
for a term of five (5) years from the effective date of the Registration
Statement described below. The Warrant Unit Shares and the Underlying Warrant
Shares are sometimes referred to herein collectively as the "Warrant Shares."
This representative's Warrant (the "Representative's Warrant") is issued
pursuant to an Underwriting Agreement between the Company and the Underwriters
named in Schedule I to the Underwriting Agreement, for which the Holder is
acting as Representative, in connection with a public offering, through the
Underwriters, of 500,000 Units (the "Units") as more fully described in the
Underwriting Agreement, (and up to 75,000 additional Units covered by an
over-allotment option granted by the Company to the Underwriters) pursuant to a
Registration Statement on Form SB-2 (the "Registration Statement") under the
Securities Act of 1933, as amended (the "1933 Act"), and in consideration of
$100 received by the Company for the Representative's Warrant.
1. The rights represented by the Representative's Warrant shall be
exercised at the price, subject to adjustment in accordance with Sections 9
and 10 hereof (the "Exercise Price") and during the periods as follows:
(a) The Representative's Warrant shall be numbered and shall be registered
in a warrant register. The Company shall be entitled to treat the registered
owner of any Representative's Warrant (the "Warrantholder") as the owner in fact
thereof for all purposes and shall not be bound to recognize any equitable or
other claim to or interest in such Representative's Warrant on the part of any
other person, and shall not be liable for any registration or transfer of
Representative's Warrants which are registered or to be registered in the name
of a fiduciary or the nominee of a fiduciary unless made with the actual
knowledge that a fiduciary or nominee is committing a breach of trust in
requesting such registration or transfer,
or with such knowledge of such facts that its participation therein amounts
to gross negligence or bad faith.
(b) During the 12 month period from the Effective Date of the Registration
Statement (the "First Anniversary Date"), the Warrantholder shall have no right
to purchase any Representative's Warrant Units hereunder, except that in the
event of any merger, consolidation or sale of substantially all the assets of
the Company as an entirety prior to the First Anniversary Date, the
Warrantholder shall have the right to exercise the Representative's Warrant at
such time and into the kind and amount of Representative's Warrant Units and
other securities and property (including cash) receivable by a holder of the
number of Representative's Warrant Units into which the Representative's Warrant
would have been convertible or exercisable immediately prior thereto.
(c) Between July ___, 1998 and 2002 (five years from the Effective Date,
i.e. the "Expiration Date") inclusive, the Warrantholder shall have the option
to purchase Representative's Warrant Units hereunder at a price ("Exercise
Price") of $14.40 per Representative's Warrant Unit.
(d) Between July ___, 1998 and 2002 (five years from the Effective Date)
inclusive, the holders of the Underlying Warrants shall have the option to
purchase the number of fully paid and nonassessable Underlying Warrant Shares
which the holder of the Underlying Warrant may at that time be entitled to
purchase on the same terms and conditions as the Redeemable Warrants offered and
sold to the public. The Underlying Warrants are redeemable by the Company on
the same terms and conditions as the Redeemable Warrants offered and sold to the
public. Holders of the Representative's Warrants and the Underlying Warrants
are sometimes herein referred to collectively as "Warrantholders."
(e) After the Expiration Date, the Warrantholder shall have no right to
purchase any Representative's Warrant Units hereunder.
2. The rights represented by the Representative's Warrant or Underlying
Warrant may be exercised at any time within the periods above specified, in
whole or in part, by (i) the surrender of the Representative's Warrant or
Underlying Warrant (with the purchase form at the end hereof properly executed)
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 Warrantholder at
the address of the Warrantholder appearing on the books of the Company); (ii)
payment to the Company of the Exercise Price then in effect for the number of
Representative's Warrant Units or Underlying Warrant Shares, as the case may be,
specified in the above-mentioned purchase form together with applicable transfer
taxes, if any; and (iii) delivery to the Company of a duly executed agreement
signed by the person(s) designated in the purchase form to the effect that such
person(s) agree(s) to be bound by the provisions of paragraph 7 and
subparagraphs (b), (c) and (d) of paragraph 8 hereof. The Representative's
Warrant or Underlying Warrant shall be deemed to have been exercised, in whole
or in part to the extent specified, immediately prior to the close of business
on the date the Representative's Warrant
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or Underlying Warrant is surrendered and payment is made in accordance with
the foregoing provisions of this paragraph 2.
3. Upon such surrender of an Representative's Warrant or Underlying
Warrant and payment of the Exercise Price or Underlying Warrant Exercise Price,
as applicable, the Company shall issue and cause to be delivered with all
reasonable dispatch to or upon the written order of the Warrantholder exercising
such Warrant or Underlying Warrant and in such name or names as such
Warrantholder may designate, a certificate or certificates for the number of
Warrant Units Shares or Underlying Warrant Shares or Underlying Warrants, as the
case may be, so purchased upon the exercise of such Representative's Warrant or
Underlying Warrant; and in the case of a fractional Warrant Share and/or
Underlying Warrant, such fraction shall be rounded to the nearest whole Warrant
Share and/or Underlying Warrant otherwise issuable upon such surrender. Such
certificate, certificates or Underlying Warrants shall be deemed to have been
issued and any person so designated to be named therein shall be deemed to have
become a holder of record of such Warrant Unit Shares, Underlying Warrants
and/or Underlying Warrant Shares, as the case may be, as of the date of receipt
by the Company or the warrant agent, if any, of such Warrant or Underlying
Warrant and payment of the applicable Exercise Price or Underlying Warrant
Exercise Price; provided, however, that if, at the date of surrender of such
Warrant or Underlying Warrant and payment of the applicable Exercise Price or
Underlying Warrant Exercise Price therefor, the transfer books for the Common
Stock or other class of stock purchasable upon the exercise of such
Representative's Warrants or Underlying Warrants shall be closed, the
certificates for the components of the Representative's Warrant Units or
Underlying Warrant Shares, as the case may be, in respect of which such
Representative's Warrant or Underlying Warrant is then exercised shall be
issuable as of the date on which such books shall next be opened (whether before
or after the date the Representative's Warrant or Underlying Warrants would
otherwise terminate (the "Termination Date")) and until such date the Company
shall be under no duty to deliver any Warrant Shares or Underlying Warrants.
The rights of purchase represented by the Representative's Warrants and
Underlying Warrants shall be exercisable, at the election of the Warrantholders
thereof, either in full or from time to time in part and, in the event that an
Representative's Warrant or Underlying Warrant is exercised in respect of less
than all of the Representative's Warrant Units or Underlying Warrant Shares
purchasable on such exercise at any time prior to the Termination Date, a new
Warrant and/or Underlying Warrant evidencing the remaining Representative's
Warrants and/or Underlying Warrants will be issued; and the Company shall
deliver, or the warrant agent, if any, is hereby irrevocably authorized to
countersign and to deliver the required new Warrant and/or Underlying Warrant
pursuant to the provisions of this Section; and the Company whenever required by
the warrant agent, if any, and will supply the warrant agent with
Representative's Warrant or Underlying Warrant duly executed on behalf of the
Company for such purpose.
4. The Representative's Warrant shall not be transferred, sold, assigned,
or hypothecated for a period of one year commencing on the Effective Date except
that it may be transferred to successors of the Warrantholder, and may be
assigned in whole or in part to any person who is an officer of the
Warrantholder or to any member of the selling group and/or the
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officers or partners thereof during such period. Any such assignment shall
be effected by the Warrantholder by (i) executing the form of assignment at
the end hereof and (ii) surrendering the Representative's Warrant for
cancellation at the office or agency of the Company referred to in paragraph
2 hereof, accompanied by a certificate (signed by an officer of the
Warrantholder if the Warrantholder is a corporation), stating that each
transferee is a permitted transferee under this paragraph 4; whereupon the
Company shall issue, in the name or names specified by the Warrantholder
(including the Warrantholder) a new Representative's Warrant or Warrants of
like tenor and representing in the aggregate rights to purchase the same
number of Representative's Warrant Units as are purchasable hereunder. Such
transfers shall be made in compliance with the rules and regulations of the
National Association of Securities Dealers ("NASD") as well as the 1933 Act,
the Exchange Act of 1934, as amended, and the respective rules and
regulations promulgated thereunder.
5. The Company covenants and agrees that all Warrant Unit Shares and
Underlying Warrant Shares issued hereunder will, upon issuance, be duly and
validly issued, fully paid and nonassessable, and no personal liability will
attach to the holder thereof. The Company further covenants and agrees that,
during the periods within which the Representative's Warrant and the Underlying
Warrant may be exercised, the Company will at all times have authorized and
reserved a sufficient number of Shares.
6. The Representative's Warrant and the Underlying Warrants shall not
entitle the Warrantholder to any voting rights or other rights as a shareholder
of the Company.
7. (a) If at any time for a period of four (4) years commencing one (1)
year from the Effective Date, the Company files a registration statement under
the 1933 Act which relates to a current offering of securities of the Company
(except a Registration Statement on Form S-4, S-8 or any other inappropriate
form), such registration statement and the prospectus included therein shall
also, at the written request of the Company by any of the then owners of the
Representative's Warrants, Warrant Units, Underlying Warrants or Warrant Shares
(the "Owners"), include and relate to the Underlying Warrants and/or Warrant
Shares issuable upon exercise of such Representative's Warrants and/or
Underlying Warrants so as to permit the public sale thereof in compliance with
the 1933 Act. The Company shall give written notice to the Owners of its
intention to file a registration statement under the 1933 Act relating to a
current offering of the securities of the Company, at least 30 days prior to the
filing of such registration statement, and the written request provided for in
the first sentence of this subsection shall be made by the Owners at least 10
days prior to the date specified in the notice as the date on which the Company
intends to file such registration statement. Neither the delivery of such
notice by the Company nor of such request by the Owners shall in any way
obligate the Company to file such registration statement and, notwithstanding
the filing of such registration statement, the Company may, at any time prior to
the effective date thereof, determine not to offer those securities to which
such registration statement relates, without liability to the Owners, except
that the Company shall pay such expenses incurred in connection with the
preparation and filing of such registration statement and as otherwise set forth
in subsection (d) hereof.
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(b) In addition, for a period of four (4) years commencing one (1) year
from the Effective Date, upon written notice at any time from a Majority Holder
(as such term is defined in subsection (f) of this Section 7) that he, she or it
contemplates the transfer of all or any part of his, her or its Underlying
Warrants or Warrant Shares under such circumstances that a public offering
thereof would be involved within the meaning of the 1933 Act, the Company, as
promptly as possible after the receipt of such notice, shall file, at its
expense, a post-effective amendment or a new registration statement with respect
to the offering, sale or other disposition of the Underlying Warrants and/or
Warrant Shares as to which the Company shall have received such notice. Within
10 days after receiving any such notice, the Company shall give notice to the
other Owners advising them that the Company is proceeding with such
post-effective amendment or new registration statement and offering to
include therein the Underlying Warrants and/or Warrant Shares of such Owners.
The Company shall not be obligated to any such other Owner unless such other
Owner shall accept such offer by written notice to the Company within 30 days
of the Company's notice. The Owners will bear the expense of fees of counsel
for the Owners and any sales commissions for the Underlying Warrants and/or
Warrant Shares sold by the Owners. In no event shall the Company be required
to file a post-effective amendment or a new registration statement pursuant
to the requirements of this subsection (b) more than once.
(c) In any exercise of the registration rights afforded pursuant to
subsection (a) and (b) of this Section 7, the Company shall:
(i) Supply to the Owner or its designee, as representative of the
Owners intending to make a public distribution of their Underlying
Warrants and/or Warrant Shares (the holder of the Representative's
Warrant by his, her or its receipt of the Representative's Warrant
and/or Underlying Warrant thereby acknowledging his, her or its
appointment of the Owners' representative or its designee as his, her
or its representative for purposes of this Agreement), four executed
copies of each post-effective amendment or registration statement and
as many copies of the preliminary and final prospectus which shall
have been prepared in conformity with the requirements of the 1933 Act
and the rules and regulations promulgated thereunder and such other
documents as the representative of the Owners shall reasonably
request;
(ii) Cooperate in taking such action as may be necessary to register
or qualify the Underlying Warrants and/or Warrant Shares under the
securities acts or blue sky laws of such jurisdictions as the
representative of the Owners shall reasonably request and the Company
shall do any and all other acts and things which may be necessary or
advisable to enable the Owners to consummate such proposed sale or
other disposition of the Underlying Warrants and/or Warrant Shares in
any such jurisdiction; provided, however, that in no event shall the
Company be obligated, in connection therewith, to qualify to do
business or to file a general consent to service of process in any
jurisdiction where it shall not then be so qualified; and
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(iii) Use its best efforts to cause any such post-effective
amendment or new registration statement to become effective and remain
effective for a period of not less than 12 months after the initial
effectiveness thereof. The Company shall cooperate in taking such
other action as may be necessary to permit the public sale or other
disposition of the Underlying Warrants and/or Warrant Shares by the
Owners.
(d) The Company shall comply with the requirements of subsections (a) and
(b) of this Section (including the related requirements of subsection (c) of
this Section), at its own expense, including the costs to register/qualify the
securities under the securities laws of those states as the Owners shall
reasonably request; but excluding underwriting commissions, transfer taxes and
Representative's expense allowance attributable to the securities being offered
by the Owners.
(e) The term "Majority Holder" as used in this Section shall include any
owner or combination of owners of Representative's Warrants, Underlying Warrants
and/or Warrant Shares, in any combination, if the aggregate amount of:
A. the Warrant Unit Shares and/or Underlying Warrant Shares then
held by him, her, it or among them, plus
B. the Warrant Unit Shares and/or Underlying Warrant Shares then
issuable upon exercise of the Representative's Warrants and/or Underlying
Warrants then held by him, her, it or among them would constitute more than
fifty percent of the Representative's Warrant Unit Shares and/or Underlying
Warrant Shares originally issuable upon exercise of all of the Representative's
Warrants and Underlying Warrants.
(f) The provisions contained herein shall continue in effect regardless of
the exercise or surrender of any of the Warrants. Notwithstanding anything in
this Section 7 to the contrary, the Company shall not be obligated to register
any Underlying Warrants or Underlying Warrant Shares if the Underlying Warrants
shall have expired unexercised or if the Underlying Warrants shall have been
redeemed by the Company; and the Underlying Warrant Shares shall not be used to
calculate a Majority Holder if the Underlying Warrants shall have expired
unexercised or shall have been redeemed by the Company.
8. (a) Whenever pursuant to paragraph 7 a registration statement
relating to the Underlying Warrants and/or Warrant Shares is filed under the
1933 Act, amended or supplemented, the Company will indemnify and hold harmless
each holder of the securities covered by such registration statement, amendment
or supplement (such holder being hereinafter called the "Distributing Holder"),
and each person, if any, who controls (within the meaning of the 1933 Act) the
Distributing Holder, and each underwriter (within the meaning of the 1933 Act)
of such securities and each person, if any, who controls (within the meaning of
the 1933 Act) any such underwriter, against any losses, claims, damages or
liabilities, joint or several, to which the Distributing Holder, any such
controlling person or any such underwriter may become subject, under the 1933
Act or otherwise, insofar as such losses, claims, damages or
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liabilities, or actions in respect thereof, arise out of or are based upon
any untrue statement or alleged untrue statement of any material fact
contained in any such registration statement or any preliminary prospectus or
final prospectus constituting a part thereof or any amendment or supplement
thereto, or arise out of or are based upon the omission or the alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading and will reimburse
the Distributing Holder or such controlling person or underwriter in
connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that the Company will not be liable
in any such case to the extent that any such loss, claim, damage or liability
arises out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission made in said registration
statement, said preliminary prospectus, said final prospectus or said
amendment or supplement in reliance upon and in conformity with written
information furnished by such Distributing Holder or any other Distributing
Holder for use in the preparation thereof.
(b) The Distributing Holder will indemnify and hold harmless the Company,
each of its directors, each of its officers who have signed said registration
statement and such amendments and supplements thereto, and each person, if any,
who controls the Company (within the meaning of the 1933 Act) against any
losses, claims, damages or liabilities, joint or several, to which the Company
or any such director, officer or controlling person may become subject, under
the 1933 Act or otherwise, insofar as such losses, claims, damages or
liabilities, or actions in respect thereof, arise out of or are based upon any
untrue or alleged untrue statement of any material fact contained in said
registration statement, said preliminary prospectus, said final prospectus, or
said amendment or supplement, or arise out of or are based upon the omission or
the alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, in each case
to the extent, but only to the extent, that such loss, claim, damage or
liability arises out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission made in said registration statement,
said preliminary prospectus, said final prospectus or said amendment or
supplement in reliance upon and in conformity with written information furnished
by such Distributing Holder for use in the preparation thereof; and will
reimburse the Company or any such director, officer or controlling person for
any legal or other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage, liability or action.
(c) Promptly after receipt by an indemnified party under this paragraph 8
of notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against any indemnifying party, give the
indemnifying party notice of the commencement thereof, but the omission so to
notify the indemnifying party will not relieve it from any liability which it
may have to any indemnified party otherwise than under this paragraph 7.
(d) In case any such action is brought against any indemnified party, and
it notifies an indemnifying party of the commencement thereof, the indemnifying
party will be entitled to participate in and, to the extent that it may wish,
jointly with any other indemnifying party
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similarly notified, to assume the defense thereof, with counsel reasonably
satisfactory to such indemnified party, and after notice from the
indemnifying party to such indemnified party of its election so to assume the
defense thereof, the indemnifying party will not be liable to such
indemnified party under this paragraph 8 for any legal or other expenses
subsequently incurred by such indemnified party in connection with the
defense thereof other than reasonable costs of investigation. No settlement
shall be made without the consent of the indemnifying party.
9. In case of any reclassification, capital reorganization or other
change of outstanding Shares of Common Stock, or in case of any consolidation or
merger of the Company with or into another corporation (other than a
consolidation or merger in which the Company is the continuing corporation and
which does not result in any reclassification, capital, reorganization or other
change of outstanding Shares of Common Stock), or in case of any sale or
conveyance to another corporation of the property of the Company as, or
substantially as, an entirety (other than a sale/leaseback, mortgage or other
financing transaction), the Company shall cause effective provision to be made
so that each holder of this Warrant shall have the right thereafter, by
exercising such Warrant, to purchase the kind and number of Shares of stock or
other securities or property (including cash) receivable upon such
reclassification, capital reorganization or other change, consolidation, merger,
sale or conveyance by a holder of the number of Shares of Common Stock that
might have been purchased upon exercise of such Warrant, immediately prior to
such reclassification, capital reorganization or other change, consolidation,
merger, sale or conveyance. The foregoing provision shall similarly apply to
successive reclassifications, capital reorganizations and other changes of
outstanding Shares of Common Stock and to successive consolidations, mergers,
sales or conveyances.
10. If, prior to the expiration of this Warrant by exercise or by its
terms the Company shall issue any of its shares of Common Stock as a share
dividend or subdivide the number of outstanding shares of Common Stock into a
greater number of shares, then, in either such case, the Exercise Price per
Representative's Warrant Unit shall be proportionately reduced, and the number
of Representative's Warrant Units at the time purchasable pursuant to this
Warrant shall be proportionately increased; and conversely, if the Company shall
contract the number of outstanding shares of Common Stock by combining such
shares into a smaller number of shares, then, in such case, the Exercise Price
per Representative's Warrant Unit in effect at the time of such action shall be
proportionately increased and the number of Representative's Warrant Units at
that time purchasable pursuant to this Warrant shall be proportionately
decreased. If the Company shall, at any time during the life of this Warrant
declare a dividend payable in cash on its shares of Common Stock and shall at
substantially the same time offer to its shareholders a right to purchase new
shares of Common Stock from the proceeds of such dividend or for an amount
substantially equal to the dividend, all shares of Common Stock so issued shall,
for the purpose of this Warrant, be deemed to have been issued as a share
dividend. Any dividend paid or distributed upon the shares of Common Stock in
shares of any other class of securities convertible into shares of Common Stock
shall be treated as a dividend paid in shares of Common Stock to the extent that
shares of Common Stock are issuable upon the conversion thereof.
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11. This Agreement shall be governed by and construed in accordance with
the internal substantive laws of the State of California, without regard for the
conflict of laws.
IN WITNESS WHEREOF, Retrospettiva, Inc. has caused this Representative's
Warrant to be signed by its duly authorized officers under its corporate seal
and this Representative's Warrant to be dated ____________________, 1997.
RETROSPETTIVA, INC.
By
-------------------------------------
President
Attest:
--------------------------------
Secretary
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PURCHASE FORM
(To be signed only upon exercise of Representative's Warrant)
The undersigned, the holder of the foregoing Representative's Warrant,
hereby irrevocably elects to exercise the purchase rights represented by such
Representative's Warrant for, and to purchase thereunder, ____________ Units
("Unit") of Retrospettiva, Inc. with each Unit comprised of two (2) shares of
Retrospettiva, Inc. no par value common stock and one (1) warrant to purchase an
additional share of such common stock at $7.50 per share and herewith makes
payment of $__________ therefor and requests that the certificates for Units be
issued in the name(s) of, and delivered to ______________________________, whose
address(es) is (are): ____________
____________________.
Dated: __________________, 19__
By:
------------------------------------
TRANSFER FORM
(To be signed only upon transfer of Warrant)
For value received, the undersigned hereby sells, assigns, and transfers
unto _____________________ the right to purchase Shares represented by the
foregoing Representative's Warrant to the extent of ___________ Units and
appoints ____________________________________ attorney to transfer such rights
on the books of Retrospettiva, Inc., with full power of substitution in the
premises.
Dated: _________________, 19__
By:
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