EXHIBIT 10.33
WARRANT
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NEITHER THIS WARRANT NOR THE SECURITIES UNDERLYING THIS WARRANT HAVE
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"ACT") OR ANY STATE SECURITIES LAWS AND EACH OF THIS WARRANT AND SUCH
SECURITIES ARE OFFERED IN RELIANCE UPON EXEMPTIONS THEREFROM. NEITHER
THIS WARRANT NOR THE SECURITIES UNDERLYING THIS WARRANT MAY BE RESOLD
OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO A REGISTRATION UNDER THE
ACT AND APPLICABLE STATE SECURITIES LAWS OR AN EXEMPTION THEREFROM.
WARRANT TO PURCHASE
701 SHARES OF COMMON STOCK, PAR VALUE $0.01 PER SHARE
SPECIALTY CATALOG CORP.
A Delaware Corporation
VOID AFTER 5:00 P.M. EASTERN TIME ON SEPTEMBER 30, 1999
This certifies that, for value received, Xxxxxx X. Xxxxxxxx (the
"Warrant Holder"), is entitled, subject to the terms and conditions hereof, to
purchase from Specialty Catalog Corp. (the "Company"), at any time or from time
to time, but in any event, on or before September 30, 1999, up to Two Hundred
Twenty-Eight Thousand One Hundred Eighty-Eight (228,188) fully paid and non-
assessable shares (the "Shares") of common stock, par value $0.01 per share, of
the Company (the "Common Stock"), and to receive a certificate or certificates
for the Common Stock so purchased pursuant to and subject to the terms and
conditions set forth below. This Warrant is one of a series of Warrants
("Warrants") to purchase an aggregate of 815.12 shares of Common Stock.
1. This Warrant may be exercised in whole or in part at any time
starting upon the closing of an initial public offering of the Company's common
stock, or the common stock of SC Corporation, a wholly-owned subsidiary of the
Company (the "Closing Date"), and ending on the earlier of (x) the third
anniversary of the Closing Date or (y) September 30, 1999, ("Expiration Date"),
by delivery and surrender to the Company at the offices of the Company at 00
Xxxxxxx Xxxxx, Xxxxx Xxxxxx, Xxxxxxxxxxxxx 00000, subject to Section 3 below, of
this Warrant and a subscription form substantially similar to that attached to
this Warrant as Exhibit A duly executed by the Warrant Holder accompanied by
payment in full, in lawful money of the United States, or by certified or bank
check, wire transfer or postal or express money order payable in United States
dollars to the order of the Company, of the Exercise Price (as defined in
Section 2 herein) for each share of Common Stock as to which this Warrant is
being exercised on or before 5:00 P.M. Eastern time on the Expiration Date,
after which time this Warrant shall be void. Notwithstanding anything to the
contrary contained herein, should the Closing Date not have occurred on or prior
to June 30, 1999, this Warrant shall be void.
2. Subject to adjustment as hereinafter provided, the purchase price
per Share of Common Stock as to which this Warrant is exercised (the "Exercise
Price") shall be $1.88.
3. (a) Upon the exercise of this Warrant, in full, the Company
shall, or shall direct its transfer agent to, issue to the Warrant Holder
certificates for the total number of Shares of Common Stock issuable on the date
of such exercise pursuant to the terms of this Warrant in such denominations as
are required by the Warrant Holder, and the Company shall, or shall direct its
transfer agent to, thereupon deliver such certificates to or in accordance with
the instructions of the Warrant Holder.
(b) In the event that the Warrant Holder shall exercise this Warrant
with respect to less than all of the Shares of Common Stock that may be
purchased under the terms hereof, the Company shall, or shall direct its
transfer agent to, issue to the Warrant Holder certificates for the Shares of
Common Stock for which this Warrant is being exercised in such denominations as
are required for delivery to the Warrant Holder, and the Company shall, or shall
direct its transfer agent to, thereupon deliver such certificates to or in
accordance with the instructions of the Warrant Holder, and the Company shall
issue to the Warrant Holder a new Warrant, duly executed by the Company, in form
and substance identical to this Warrant for the balance of Shares of Common
Stock then issuable pursuant to the terms of this Warrant.
(c) Notwithstanding anything to the contrary contained herein,
neither the Company nor its transfer agent shall be required to issue any
fraction of a Share of Common Stock in connection with the exercise of this
Warrant, and the Company shall, upon exercise of this Warrant in whole or in
part, issue the largest number of whole Shares of Common Stock to which this
Warrant is entitled upon such full or partial exercise and shall return to the
Warrant Holder the amount of the Exercise Price paid by the Warrant Holder in
respect of any fractional Share.
4. The Warrant Holder, as such, shall not be entitled to vote or
receive dividends or be deemed the holder of Shares of Common Stock for any
purpose, nor shall anything contained in this Warrant be construed to confer
upon the Warrant Holder, as such, any of the rights of a shareholder of the
Company including, without limitation, any right to vote, give or withhold
consent to any action by the Company (whether upon the recapitalization, issue
of stock, reclassification of stock, consolidation, merger, conveyance or
otherwise), receive notice of meetings or other action affecting shareholders,
receive dividends or subscription rights, or otherwise, until this Warrant shall
have been exercised; provided, however, that any exercise of this Warrant, in
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whole or in part, on any date when the stock transfer books of the Company shall
be closed shall constitute the person or persons in whose name or names the
certificate or certificates for such shares of Common Stock are to be issued as
the record holder or holders thereof for all purposes at the opening of business
on the next succeeding day on which such stock transfer books are open, and this
Warrant shall not be deemed to have been exercised, in whole or in part, as the
case may be, until that date for the purpose of determining entitlement
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to dividends on the Common Stock, and that exercise shall be at the actual
Exercise Price in effect at such date.
5. The Exercise Price shall be subject to adjustment as follows:
(a) In case the Company shall, after the date hereof, (i) pay a stock
dividend or make a distribution in shares of its capital stock in respect of the
Common Stock (whether shares of its Common Stock or of capital stock of any
other class), (ii) subdivide its outstanding shares of Common Stock, (iii)
combine its outstanding shares of Common Stock into a smaller number of shares,
or (iv) issue by reclassification of its shares of Common Stock any shares of
capital stock of the Company, the Exercise Price in effect immediately prior to
such action shall be adjusted so that the holder of this Warrant thereafter
surrendered for exercise shall be entitled to receive an equivalent number of
shares of capital stock of the Company which he would have owned immediately
following such action had this Warrant been exercised immediately prior thereto.
Any adjustment made pursuant to this subsection (a) shall become effective
immediately after the record date in the case of a dividend or distribution and
shall become effective immediately after the effective date in the case of a
subdivision, combination or reclassification.
(b) No adjustment in the Exercise Price shall be required to be made
unless such adjustment would require an increase or decrease of at least one
percent (1%) in such price; provided, however, that any adjustments which by
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reason of this subsection (b) are not required to be made shall be carried
forward and taken into account in any subsequent adjustment. All calculations
under this Section 5 shall be made to the nearest cent.
(c) Whenever the Exercise Price is adjusted as provided in Section
5(a) herein, the Company will promptly mail to the Warrant Holder a certificate
of the Company's Treasurer or Chief Financial Officer setting forth the Exercise
Price as so adjusted and a brief statement of facts accounting for such
adjustment.
(d) Irrespective of any adjustment or change in the Exercise Price and
the number of Shares actually purchasable under this Warrant, this Warrant may
continue to express the Exercise Price per Share and the number of Shares
purchasable hereunder as the Exercise Price per Share and the number of Shares
purchasable as expressed upon this Warrant when initially issued.
6. If the Company or SC Corporation, shall at any time consolidate
or merge with or into another corporation, (a) the Company shall give at least
twenty (20) days prior written notice to the Warrant Holder of such
consolidation or merger and the terms thereof, and (b) the Warrant Holder shall
at his exclusive option: (i) exercise his warrant in whole or in part
irrespective if the condition precedent for the exercise of this Warrant in
Paragraph 1(a) has been met; or (ii) thereafter be entitled to receive, upon the
exercise thereof, the securities or property
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to which a holder of the number of Shares then deliverable upon the exercise
thereof would have been entitled upon such consolidation or merger, and the
Company shall take such steps in connection with such consolidation or merger as
may be necessary to assure the Warrant Holder that the provisions of this
Warrant shall thereafter be applicable, as nearly as reasonably may be, in
relation to any securities or property thereafter deliverable upon the exercise
of this Warrant including, but not limited to, obtaining a written
acknowledgement from the continuing corporation or other appropriate corporation
of its obligation to supply such securities or property upon such exercise. A
sale of all or substantially all the assets of the Company or its wholly owned
subsidiary, SC Direct Inc., shall be deemed a consolidation or merger for the
foregoing purposes.
7. Following the Closing Date the Company will permit any authorized
representatives designated by the Warrant Holder, so long as this Warrant is
outstanding, without expense to the Company, to visit and inspect the properties
of the Company or any of its subsidiaries, and to discuss its and their affairs
and finances with its and their officers at such reasonable times as may be
reasonably requested. The Warrant Holder agrees to keep all of such information
confidential and not to divulge it to any third party without the prior written
consent of the Company unless and until such information becomes generally known
to the public from a source other than the Warrant Holder or the holder of any
of the other Warrants.
8. The Company and each subsidiary will maintain its books and
records in accordance with generally accepted accounting principles, and so long
as this Warrant shall remain outstanding, the Company will deliver to the
Warrant Holder:
(a) as soon as practicable, and in any event within 90 days
after the close of each fiscal year of the Company, (i) a consolidated
balance sheet of the Company and its subsidiaries as of the end of
such fiscal year-end (ii) consolidated statements of income, cash flow
and common stock and other stockholders' equity of the Company and its
subsidiaries for such fiscal year, in each case setting forth in
comparative form the corresponding figures for the preceding fiscal
year and to be in reasonable detail and certified without material
exception by the Company's independent public accountants; provided,
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however, that in the event the Company becomes a public company,
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delivery pursuant to clause (c) below of copies of the Annual Report
on Form 10-K or Form 10-KSB of the Company for such fiscal year timely
filed with the Securities and Exchange Commission (together with
copies of the financial statements required to be included therein)
shall be deemed to satisfy the requirements of this clause (a);
(b) as soon as practicable, and in any event within 45 days
after the close of each of the first three fiscal quarters of the
Company during such fiscal year (i) a consolidated balance sheet of
the Company and its subsidiaries as of the end of such fiscal quarter
and (ii) consolidated statements of income, cash flow and
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common stock and other stockholders' equity of the Company and its
subsidiaries for the portion of the fiscal year ended with the end of
such quarter, in each case setting forth in comparative form the
corresponding figures for the comparable period of the preceding
fiscal year; provided, however, that in the event the Company becomes
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a public company, delivery pursuant to clause (c) below of copies of
the Quarterly Report on Form 10-Q or Form 10-QSB of the Company for
such quarterly period timely filed with the Securities and Commission
shall be deemed to satisfy the requirements of this clause (b);
(c) as soon as practicable, copies of all financial statements,
proxy materials or reports sent to the Company's stockholders and of
all reports or final registration statements filed with the Securities
and Exchange Commission pursuant to the Securities Act of 1993, as
amended ("Act"), or the Securities Exchange Act of 1934, as amended
("Exchange Act"), if applicable.
9. If this Warrant is lost, stolen or destroyed, the Company shall,
subject to such reasonable terms as to indemnity as are commonly imposed in
respect of warrants which are not registered pursuant to the Act, issue a new
Warrant of like denomination and tenor as, and in substitution for, the Warrant
so lost, stolen or destroyed, and in the event this Warrant shall be mutilated,
the Company shall, upon the surrender hereof, issue a new Warrant of like
denomination and tenor as, and in substitution for, the Warrant so mutilated.
10. (a) The Warrant Holder acknowledges that this Warrant and the
Shares issuable upon exercise of the Warrant have not been registered under the
Act and shall bear a conspicuous legend in customary form restricting their
transfer until registered under the Act or, in the opinion of counsel
satisfactory to the Company, an exemption from such registration is available.
The Warrant Holder agrees that this Warrant and the Shares of Common Stock
underlying this Warrant may not be sold, assigned or transferred at any time, in
any manner or by any person or entity unless the Warrant and/or the Shares, as
the case may be, are registered pursuant to the Act and under applicable state
securities laws or, in the opinion of counsel satisfactory to the Company, an
exemption from the Act and such state securities laws is available in respect of
the Warrant and the Shares for such sale, assignment or transfer, as the case
may be. The Warrant Holder agrees that, unless and until the Warrant and the
Shares issuable upon exercise of the Warrant have been registered under the Act
and applicable state securities laws, no sale, assignment or transfer shall
occur without obtaining the prior written consent of the Company.
(b) The Company shall, at least thirty (30) days prior to the filing
of any Registration Statement under the Act (other than a Registration Statement
on Form S-4 or S-8 or any successor forms) relating to the public offering of
any class of its equity securities by the Company, give written notice of such
proposed filing and of the proposed date thereof to the Warrant Holder and if,
on or before the tenth (10th) day following the date on which such notice
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is given, the Company shall receive a written request from the Warrant Holder
requesting that the Company include among the securities covered by such
Registration Statement some or all of the Shares issuable upon exercise of the
Warrant, the Company shall include such Shares in such Registration Statement,
if filed. Shares issuable upon exercise of the Warrant will be registered by
the Company and offered to the public on the same terms and subject to the same
conditions applicable to the piggyback registration of shares of Common Stock to
be sold by the Company or by other persons registering shares of Common Stock in
such registration statement pursuant to piggyback rights granted to such persons
pursuant to a certain Registration Rights Agreement dated November 30, 1994, as
amended by Registration Rights Agreement dated as of August 16, 1995, or as may
be further amended or superseded from time to time by the Company and the
parties thereto (including without limitation, an Amended and Restated
Registration Rights Agreement substantially in the form of draft dated October
3, 1996 (collectively as so amended from time to time, the "Registration Rights
Agreement"). The Warrant Holder agrees to be bound by the terms and provisions
of the Registration Rights Agreement as though he were a signatory thereto with
respect to the piggyback rights granted to the Warrant Holder hereunder. The
Company shall be under no obligation to complete any offering of its securities
it proposes to make under this subparagraph (b) and shall incur no liability to
the Warrant Holder to participate therein in accordance with this Section. In
connection with any registration covered by this subparagraph (b) involving any
underwriting of securities, the Company shall not be required to include the
Warrant Holder's Shares in such registration unless such Warrant Holder accepts
the terms of the underwriting as agreed upon between the Company (or other
persons who have the right to agree upon the underwriting terms relating to such
offering) and the underwriters, provided, however, that nothing contained herein
shall be construed to give the Warrant Holder less piggy back rights than are
granted to the persons signing the amended and Restated Registration Rights
agreement.
11. The validity, interpretation and performance of this Warrant
shall be governed by the laws of the State of Delaware.
12. This Warrant cannot be amended, supplemented or changed, and no
provision hereof can be waived, except by a written instrument making specific
reference to this Warrant and signed by the party against whom enforcement of
any such amendment, supplement, modification or waiver is sought. The Exhibit
to this Warrant is incorporated herein by reference to the same extent as if set
forth herein in full. A waiver of any right derived hereunder by the Warrant
Holder shall not be deemed a waiver of any other right derived hereunder.
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13. This Warrant shall be binding upon and shall inure to the benefit
of the Company and the Warrant Holder, and their respective heirs, successors
and permitted assigns.
14. All notices to the Warrant Holder shall be sent to:
BEC Group
000 Xxxxxxxx Xxxxx Xxxxxx
Xxxxx X000
Xxx, Xxx Xxxx 00000
(000) 000-0000
Dated: August 12, 1996.
SPECIALTY CATALOG CORP.
By:______________________________
Xxxxxx X. Xxxx
Chief Executive Officer
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EXHIBIT A
SUBSCRIPTION FORM
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(To be executed by the Warrant Holder to exercise the Warrant in whole or
in part)
TO: SPECIALTY CATALOG CORP.
The undersigned, whose Social Security or Tax Identification Number is
________________, hereby irrevocably elects the right of purchase represented by
the within Warrant for, and to purchase thereunder, shares of Common Stock
provided for therein and tenders payment herewith to the order of Specialty
Catalog Corp. in the amount of $____________________________. The undersigned
requests that certificates for such shares of Common Stock be issued in the name
of the undersigned Warrant Holder as follows:
Name:
Address:
Deliver to:
Address:
and, if said number of shares of Common Stock shall not be all the shares of the
Common Stock purchasable thereunder, then a new Warrant for the balance of the
remaining shares of Common Stock purchasable under the within Warrant be
registered in the name of, and delivered to, the undersigned at the address
stated below.
Address:
Dated:
Warrant Holder: Signature Guaranteed:
By:_______________________ _________________________
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