EXHIBIT 1.04
THE REGISTERED HOLDER OF THIS PURCHASE OPTION, BY ITS ACCEPTANCE HEREOF, AGREES
THAT IT WILL NOT SELL, TRANSFER OR ASSIGN THIS PURCHASE OPTION EXCEPT AS HEREIN
PROVIDED.
NOT EXERCISABLE PRIOR TO OCTOBER __, 1997. VOID AFTER 5:00 P.M. EASTERN TIME,
OCTOBER __, 2001.
PURCHASE OPTION
FOR THE PURCHASE OF
_______ SHARES OF COMMON STOCK
OF
SPECIALTY CATALOG CORP.
(A DELAWARE CORPORATION)
1. Purchase Option.
---------------
THIS CERTIFIES THAT, in consideration of $___ duly paid by or on behalf of
GKN Securities Corp. ("Holder"), as registered owner of this Purchase Option, to
Specialty Catalog Corp. ("Company"), Holder is entitled, at any time or from
time to time at or after October __, 1997 ("Commencement Date"), and at or
before 5:00 p.m., Eastern Time, October __, 2001 ("Expiration Date"), but not
thereafter, to subscribe for, purchase and receive, in whole or in part, up to
_______ shares of Common Stock of the Company, $.01 par value ("Common Stock").
The shares of Common Stock are sometimes collectively referred to herein as the
"Securities." If the Expiration Date is a day on which banking institutions are
authorized by law to close, then this Purchase Option may be exercised on the
next succeeding day which is not such a day in accordance with the terms herein.
During the period ending on the Expiration Date, the Company agrees not to take
any action that would terminate the Purchase Option. This Purchase Option is
initially exercisable at $______ per share of Common Stock purchased; provided,
however, that upon the occurrence of any of the events specified in Section 6
hereof, the rights granted by this Purchase Option, including the exercise price
and the number of shares of Common Stock to be received upon such exercise,
shall be adjusted as therein specified. The term "Exercise Price" shall mean
the initial exercise price or the adjusted exercise price, depending on the
context, of a share of Common Stock.
2. Exercise.
--------
2.1 Exercise Form. In order to exercise this Purchase Option, the
-------------
exercise form attached hereto must be duly executed and completed and delivered
to the Company, together with this Purchase Option and payment of the Exercise
Price in cash or by certified check or official bank check for the Securities
being purchased. If the subscription rights represented hereby shall not be
exercised at or before 5:00 p.m., Eastern time, on the Expiration Date this
Purchase Option shall become and be void without further force or effect, and
all rights represented hereby shall cease and expire.
2.2 Legend. Each certificate for Securities purchased under this Purchase
------
Option shall bear a legend as follows unless such Securities have been
registered under the Securities Act of 1933, as amended:
"The securities represented by this certificate have not been registered under
the Securities Act of 1933, as amended ("Act"), or applicable state law. The
securities may not be offered for sale, sold or otherwise transferred except
pursuant to an effective registration statement under the Act, or pursuant to an
exemption from registration under the Act and applicable state law."
2.3 Cashless Exercise.
-----------------
2.3.1 Determination of Amount. In lieu of the payment of the Exercise
-----------------------
Price in the manner required by Section 2.1, the Holder shall have the right
(but not the obligation) to pay the Exercise Price for the Securities being
purchased with this Purchase Option upon exercise by the surrender to the
Company of any exercisable but unexercised portion of this Purchase Option
having a "Value" (as defined below), at the close of trading on the last trading
day immediately preceding the exercise of this Purchase Option, equal to the
Exercise Price multiplied by the number of shares of Common Stock being
purchased upon exercise ("Cashless Exercise Right"). The sum of (a) the number
of shares of Common Stock being purchased upon exercise of the non-surrendered
portion of this Purchase Option pursuant to this Cashless Exercise Right and (b)
the number of shares of Common Stock underlying the portion of this Purchase
Option being surrendered, shall not in any event be greater than the total
number of shares of Common Stock purchasable upon the complete exercise of this
Purchase Option if the Exercise Price were paid in cash. The "Value" of the
portion of the Purchase Option being surrendered shall equal the remainder
derived from subtracting (a) the Exercise Price multiplied by the number of
shares of Common Stock underlying the portion of this Purchase Option being
surrendered from (b) the Market Price of the shares of Common Stock multiplied
by the number of shares of Common Stock underlying the portion of this Purchase
Option being surrendered. As used herein, the term "Market Price" at any date
shall be deemed to be the last reported sale price of the Common Stock on such
date, or, in case no such reported sale takes place on such day, the average of
the last reported sale prices for the immediately preceding three trading days,
in either case as officially reported by the principal securities exchange on
which the Common Stock is listed or admitted to trading, or, if the Common Stock
is not listed or admitted to trading on any national securities exchange or if
any such exchange on which the Common Stock is listed is not its principal
trading market, the last reported sale price as furnished by the NASD through
the Nasdaq National Market or SmallCap Market, or, if applicable, the OTC
Bulletin Board, or if the Common Stock is not listed or admitted to trading on
the Nasdaq National Market or SmallCap Market or OTC Bulletin Board or similar
organization, as determined in good faith by resolution of the Board of
Directors of the Company, based on the best information available to it.
2.3.2 Mechanics of Cashless Exercise. The Cashless Exercise Right may be
------------------------------
exercised by the Holder on any business day on or after the Commencement Date
and not later than the Expiration Date by delivering the Purchase Option with a
duly executed exercise form attached hereto with the cashless exercise section
completed to the Company, exercising the Cashless Exercise Right and specifying
the total number of shares of Common Stock the Holder will purchase pursuant to
such Cashless Exercise Right.
2
3. Transfer.
--------
3.1 General Restrictions. Subject to Section 3.2, the registered Holder
--------------------
of this Purchase Option, by its acceptance hereof, agrees that it will not sell,
transfer or assign or hypothecate this Purchase Option prior to the Commencement
Date to anyone other than (i) an officer or partner of such Holder, (ii) an
officer of GKN Securities Corp. ("Underwriter") or an officer or partner of any
Selected Dealer or member of the underwriting syndicate in connection with the
Company's public offering with respect to which this Purchase Option has been
issued, or (iii) any Selected Dealer. On and after the Commencement Date,
transfers to others may be made in accordance with the terms of this Purchase
Option subject to compliance with or exemptions from applicable securities laws.
In order to make any permitted assignment, subject to Section 3.2 hereof, the
Holder must deliver to the Company the assignment form attached hereto duly
executed and completed, together with the Purchase Option and payment of all
transfer taxes, if any, payable in connection therewith. Unless the Company can
show that the transfer may not be effected in accordance with applicable
securities laws, the Company shall immediately transfer this Purchase Option on
the books of the Company and shall execute and deliver a new Purchase Option or
Purchase Options of like tenor to the appropriate assignee(s) expressly
evidencing the right to purchase the aggregate number of shares of Common Stock
purchasable hereunder or such portion of such number as shall be contemplated by
any such assignment.
3.2 Restrictions Imposed by the Act. This Purchase Option and the
-------------------------------
Securities underlying this Purchase Option shall not be transferred unless and
until (i) the Company has received the opinion of counsel for the Holder that
this Purchase Option or the Securities, as the case may be, may be transferred
pursuant to an exemption from registration under the Act and applicable state
law, the availability of which is established to the reasonable satisfaction of
the Company (the Company hereby agreeing that the opinion of Graubard Xxxxxx &
Xxxxxx shall be deemed satisfactory evidence of the availability of an
exemption), or (ii) a registration statement relating to such Purchase Option or
Securities, as the case may be, has been filed by the Company and declared
effective by the Securities and Exchange Commission and in compliance with
applicable state law.
4. New Purchase Options to be Issued.
---------------------------------
4.1 Partial Exercise or Transfer. Subject to the restrictions in Section
----------------------------
3 hereof, this Purchase Option may be exercised or assigned in whole or in part.
In the event of the exercise or assignment hereof in part only, upon surrender
of this Purchase Option for cancellation, together with the duly executed
exercise or assignment form and funds sufficient to pay any Exercise Price
and/or transfer tax, the Company shall cause to be delivered to the Holder
without charge a new Purchase Option of like tenor to this Purchase Option in
the name of the Holder evidencing the right of the Holder to purchase the
aggregate number of shares of Common Stock purchasable hereunder as to which
this Purchase Option has not been exercised or assigned.
4.2 Lost Certificate. Upon receipt by the Company of evidence
----------------
satisfactory to it of the loss, theft, destruction or mutilation of this
Purchase Option and of reasonably satisfactory indemnification, the Company
shall execute and deliver a new Purchase Option of like tenor and date. Any
such new Purchase Option executed and delivered as a result of such loss, theft,
mutilation or destruction shall constitute a substitute contractual obligation
on the part of the Company.
3
5. Registration Rights.
-------------------
5.1 Demand Registration.
-------------------
5.1.1 Grant of Right. The Company, upon written demand ("Initial Demand
--------------
Notice") of the Holder(s) of at least 51% of the Purchase Options and/or the
underlying shares of Common Stock ("Majority Holders"), agrees to register on
one occasion, all or any portion of the Purchase Options requested by the
Majority Holders in the Initial Demand Notice and all of the Common Stock
underlying the Purchase Options (collectively the "Registrable Securities"). On
such occasion, the Company will file a Registration Statement covering the
Registrable Securities within sixty days after receipt of the Initial Demand
Notice and use its best efforts to have such registration statement declared
effective promptly thereafter. Should this registration or the effectiveness
thereof be delayed by the Company, the exercisability of the Purchase Options
shall be extended for a period of time equal to the delay in registering the
Registrable Securities provided, however, that such extension date shall not
extend beyond five years from the Effective Date. Moreover, if the Company
fails to comply with the provisions of this Section 5.1.1, the Company shall, in
addition to any other equitable or other relief available to the Holder(s), be
liable for any and all incidental, special and consequential damages sustained
by the Holder(s). The demand for registration may be made at any time during a
period of five years commencing on the Effective Date. The Company covenants
and agrees to give written notice of its receipt of any Initial Demand Notice by
any Holder(s) to all other registered Holders of the Purchase Options and/or the
Registrable Securities within ten days from the date of the receipt of any such
Initial Demand Notice.
5.1.2 Terms. The Company shall bear all fees and expenses attendant to
-----
registering the Registrable Securities, but the Holders shall pay any and all
underwriting commissions and the expenses of any legal counsel selected by the
Holders to represent them in connection with the sale of the Registrable
Securities. The Company agrees to use its best efforts to cause the filing
required herein to become effective promptly and to qualify or register the
Registrable Securities in such states as are reasonably requested by the
Holder(s); provided, however, that in no event shall the Company be required to
register the Registrable Securities in a state in which such registration would
cause (i) the Company to be obligated to register or license to do business in
such state, or (ii) the principal stockholders of the Company to be obligated to
escrow their shares of capital stock of the Company. The Company shall cause
any registration statement filed pursuant to the demand rights granted under
Section 5.1.1 to remain effective for a period of at least nine consecutive
months from the date that the Holders of the Registrable Securities covered by
such registration statement are first given the opportunity to sell all of such
securities.
5.2 "Piggy-Back" Registration.
-------------------------
5.2.1 Grant of Right. In addition to the demand right of registration,
--------------
the Holders of the Purchase Options shall have the right for a period of seven
years commencing on the Effective Date to include the Registrable Securities as
part of any other registration of securities filed by the Company (other than in
connection with a transaction contemplated by Rule 145(a) promulgated under the
Act or pursuant to Form S-8) provided, however, that if, in the written opinion
of the Company's managing underwriter or underwriters, if any, for such
offering, the inclusion of the Registrable Securities, when added to the
securities being registered by the Company or the selling stockholder(s), will
exceed the maximum amount of the Company's securities which can be marketed (i)
at a price reasonably related to their then current market
4
value, or (ii) without materially and adversely affecting the entire offering,
the Company shall nevertheless register all or any portion of the Registrable
Securities required to be so registered but such Registrable Securities shall
not be sold by the Holders until 180 days after the registration statement for
such offering has become effective and provided further that, if any securities
are registered for sale on behalf of other stockholders in such offering and
such stockholders have not agreed to defer such sale until the expiration of
such 180 day period, the number of securities to be sold by all stockholders in
such public offering during such 180 day period shall be apportioned pro rata
--- ----
among all such selling stockholders, including all holders of the Registrable
Securities, according to the total amount of securities of the Company owned by
said selling stockholders, including all holders of the Registrable Securities.
5.2.2 Terms. The Company shall bear all fees and expenses attendant to
-----
registering the Registrable Securities, but the Holders shall pay any and all
underwriting commissions and the expenses of any legal counsel selected by the
Holders to represent them in connection with the sale of the Registrable
Securities. In the event of such a proposed regis tration, the Company shall
furnish the then Holders of outstanding Registrable Securities with not less
than thirty days written notice prior to the proposed date of filing of such
registration statement. Such notice to the Holders shall continue to be given
for each registration statement filed by the Company until such time as all of
the Registrable Securities have been sold by the Holder. The holders of the
Registrable Securities shall exercise the "piggy-back" rights provided for
herein by giving written notice, within twenty days of the receipt of the
Company's notice of its intention to file a registration statement. The Company
shall cause any registration statement filed pursuant to the above "piggyback"
rights to remain effective for at least nine months from the date that the
Holders of the Registrable Securities are first given the opportunity to sell
all of such securities.
5.3 General Terms.
-------------
5.3.1 Indemnification. The Company shall indemnify the Holder(s) of the
---------------
Securities to be sold pursuant to any registration statement hereunder and each
person, if any, who controls such Holders within the meaning of Section 15 of
the Act or Section 20(a) of the Securities Exchange Act of 1934, as amended
("Exchange Act"), against all loss, claim, damage, expense or liability
(including all reasonable attorneys' fees and other expenses reasonably incurred
in investigating, preparing or defending against any claim whatsoever) to which
any of them may become subject under the Act, the Exchange Act or otherwise,
arising from such registration statement but only to the same extent and with
the same effect as the provisions pursuant to which the Company has agreed to
indemnify the Underwriter contained in Section 5 of the Underwriting Agreement
between the Underwriter and the Company, dated the Effective Date. The
Holder(s) of the Securities to be sold pursuant to such registration statement,
and their successors and assigns, shall severally, and not jointly, indemnify
the Company, against all loss, claim, damage, expense or liability (including
all reasonable attorneys' fees and other expenses reasonably incurred in
investigating, preparing or defending against any claim whatsoever) to which
they may become subject under the Act, the Exchange Act or otherwise, arising
from information furnished by or on behalf of such Holders, or their successors
or assigns, in writing, for specific inclusion in such registration statement to
the same extent and with the same effect as the provisions contained in Section
5 of the Underwriting Agreement pursuant to which the Underwriter has agreed to
indemnify the Company.
5
5.3.2 Exercise of Warrants. Nothing contained in this Purchase Option
--------------------
shall be construed as requiring the Holder(s) to exercise their Purchase Options
or Warrants prior to or after the initial filing of any registration statement
or the effectiveness thereof.
5.3.3 Exclusivity. The Company shall not permit the inclusion of any
-----------
securities other than the Registrable Securities to be included in any
registration statement filed pursuant to Section 5.1 hereof without the prior
written consent of the Majority Holders of the Securities.
5.3.4 Documents Delivered to Holders. The Company shall furnish to each
------------------------------
Holder participating in an offering contemplated by Section 5.1 hereof and to
each underwriter of any such offering, if any, a signed counterpart, addressed
to such Holder or underwriter, of (i) an opinion of counsel to the Company,
dated the effective date of such registration statement (and, if such
registration includes an underwritten public offering, an opinion dated the date
of the closing under any underwriting agreement related thereto), and (ii) a
"cold comfort" letter dated the effective date of such registration statement
(and, if such registration includes an underwritten public offering, a letter
dated the date of the closing under the underwriting agreement) signed by the
independent public accountants who have issued a report on the Company's
financial statements included in such registration statement, in each case
covering substantially the same matters with respect to such registration
statement (and the prospectus included therein) and, in the case of such
accountants' letter, with respect to events subsequent to the date of such
financial statements, as are customarily covered in opinions of issuer's counsel
and in accountants' letters delivered to underwriters in underwritten public
offerings of securities. The Company shall also deliver promptly to each Holder
participating in the offering requesting the correspondence and memoranda
described below and to the managing underwriter copies of all correspondence
between the Commission and the Company, its counsel or auditors and all
memoranda relating to discussions with the Commission or its staff with respect
to the registration statement and permit each Holder and underwriter to do such
investigation, upon reasonable advance notice, with respect to information
contained in or omitted from the registration statement as it deems reasonably
necessary to comply with applicable securities laws or rules of the National
Association of Securities Dealers, Inc. ("NASD"). Such investigation shall
include access to books, records and properties and opportunities to discuss the
business of the Company with its officers and independent auditors, all to such
reasonable extent and at such reasonable times and as often as any such Holder
shall reasonably request.
5.3.5 Underwriting Agreement. The Company shall enter into an
----------------------
underwriting agreement with the managing underwriter(s) selected by any Holders
whose Registrable Securities are being registered pursuant to Section 5.1. Such
agreement shall be reasonably satisfactory in form and substance to the Company,
each Holder and such managing underwriters, and shall contain such
representations, warranties and covenants by the Company and such other terms as
are customarily contained in agreements of that type used by the managing
underwriter. The Holders shall be parties to any underwriting agreement
relating to an underwritten sale of their Securities and may, at their option,
require that any or all the representations, warranties and covenants of the
Company to or for the benefit of such under writers shall also be made to and
for the benefit of such Holders. Such Holders shall not be required to make any
representations or warranties to or agreements with the Company or the
underwriters except as they may relate to such Holders, their shares and their
intended methods of distribution.
6
5.3.6 Documents to be Delivered by Xxxxxx(s); Cooperation. Each of the
---------------------------------------------------
Holder(s) participating in any of the foregoing offerings shall furnish to the
Company a completed and executed questionnaire provided by the Company
requesting information customarily sought of selling securityholders and shall
otherwise cooperate with the Company's reasonable requests.
6. Adjustments.
-----------
6.1 Adjustments to Exercise Price and Number of Securities. The Exercise
------------------------------------------------------
Price and the number of shares of Common Stock issuable upon exercise of the
Purchase Option shall be subject to adjustment from time to time as hereinafter
set forth:
6.1.1 Stock Dividends, Split-Ups. If after the date hereof, and subject
--------------------------
to the provisions of Section 6.3 below, the number of outstanding shares of
Common Stock is increased by a stock dividend payable in shares of Common Stock
or by a split-up of shares of Common Stock or other similar event, then, on the
effective date of such stock dividend or split-up, the number of shares of
Common Stock issuable on exercise of the Purchase Option shall be increased in
proportion to such increase in outstanding shares.
6.1.2 Aggregation of Shares. If after the date hereof, and subject to the
---------------------
provisions of Section 6.3, the number of outstanding shares of Common Stock is
decreased by a consolidation, combination or reclassification of shares of
Common Stock or other similar event, then, upon the effective date of such
consolidation, combination or reclassification, the number of shares of Common
Stock issuable on exercise of the Purchase Option shall be decreased in
proportion to such decrease in outstanding shares.
6.1.3 Adjustments in Exercise Price. Whenever the number of shares of
-----------------------------
Common Stock purchasable upon the exercise of this Purchase Option is adjusted,
as provided in this Section 6.1, the Exercise Price shall be adjusted (to the
nearest cent) by multiplying such Exercise Price immediately prior to such
adjustment by a fraction (x) the numerator of which shall be the number of
shares of Common Stock purchasable upon the exercise of this Purchase Option
immediately prior to such adjustment, and (y) the denominator of which shall be
the number of shares of Common Stock so purchasable immediately thereafter.
6.1.4 Replacement of Securities Upon Reorganization, etc. If after the
---------------------------------------------------
date hereof any capital reorganization or reclassification of the Common Stock
of the Company, or consolidation or merger of the Company with another
corporation, or the sale of all or substantially all of its assets to another
corporation or other similar event shall be effected, then, as a condition of
such reorganization, reclassification, consolidation, merger, or sale, lawful
and fair provision shall be made whereby the Holders shall thereafter have the
right to purchase and receive, upon the basis and upon the terms and conditions
specified in the purchase Option and in lieu of the securities of the Company
immediately theretofore purchasable and receivable upon the exercise of the
rights represented thereby, such shares of stock, securities, or assets as may
be issued or payable with respect to or in exchange for the number of securities
equal to the number of securities immediately theretofore purchasable and
receivable upon the exercise of the rights represented by the Purchase Option,
had such reorganization, reclassification, consolidation, merger, or sale not
taken place and in such event appropriate provision shall be made with respect
to the rights and interests of the Holders to the end that the provisions hereof
(including, without limitation, provisions for adjustments of the Exercise Price
and of the number of securities purchasable upon the exercise of the Purchase
Option) shall thereafter be applicable, as nearly as may be in relation to any
share of stock, securities, or assets thereafter
7
deliverable upon the exercise hereof. The Company shall not effect any such
consolidation, merger, or sale unless prior to the consummation thereof the
successor corporation (if other than the Company) resulting from such
consolidation or merger, or the corporation purchasing such assets, shall assume
by written instrument executed and delivered to the Holders evidencing its
obligation to deliver such shares of stock, securities, or assets as, in
accordance with the foregoing provisions, such Holders may be entitled to
purchase.
6.1.5 Changes in Form of Purchase Option. This form of Purchase Option
----------------------------------
need not be changed because of any change pursuant to this Section, and Purchase
Options issued after such change may state the same Exercise Price and the same
number of shares of Common Stock as are stated in the Purchase Options initially
issued pursuant to this Agreement. The acceptance by any Holder of the issuance
of new Purchase Options reflecting a required or permissive change shall not be
deemed to waive any rights to a prior adjustment or the computation thereof.
6.2 [Intentionally Omitted]
6.3 Elimination of Fractional Interests. The Company shall not be
-----------------------------------
required to issue certificates representing fractions of shares of Common Stock
upon the exercise or transfer of the Purchase Option, nor shall it be required
to issue scrip or pay cash in lieu of any fractional interests, it being the
intent of the parties that all fractional interests shall be eliminated by
rounding any fraction up or down to the nearest whole number of shares of Common
Stock or other securities, properties or rights.
7. Reservation and Listing. The Company shall at all times reserve and keep
-----------------------
available out of its authorized shares of Common Stock, solely for the purpose
of issuance upon exercise of the Purchase Options, such number of shares of
Common Stock or other securities, properties or rights as shall be issuable upon
the exercise thereof. The Company covenants and agrees that, upon exercise of
the Purchase Options and payment of the Exercise Price therefor, all shares of
Common Stock and other securities issuable upon such exercise shall be duly and
validly issued, fully paid and non-assessable and not subject to preemptive
rights of any stockholder. As long as the Purchase Options shall be
outstanding, the Company shall use its best efforts to cause all shares of
Common Stock issuable upon exercise of the Purchase Options to be listed
(subject to official notice of issuance) on all securities exchanges (or, if
applicable, on Nasdaq) on which the Common Stock issued to the public in
connection herewith is then listed and/or quoted.
8. Certain Notice Requirements.
---------------------------
8.1 Holders' Right to Receive Notice. Nothing herein shall be construed
--------------------------------
as conferring upon the Holders the right to vote or consent or to receive notice
as a stockholder for the election of directors or any other matter, or as having
any rights whatsoever as a stockholder of the Company. If, however, at any time
prior to the expiration of the Purchase Options and their exercise, any of the
events described in Section 8.2 shall occur, then, in one or more of said
events, the Company shall give written notice of such event at least fifteen
days prior to the date fixed as a record date or the date of closing the
transfer books for the determination of the stockholders entitled to such
dividend, distribution, conversion or exchange of securities or subscription
rights, or entitled to vote on such proposed dissolution, liquidation, winding
up or sale. Such notice shall specify such record date or the date of the
closing of the transfer books, as the case may be.
8
8.2 Events Requiring Notice. The Company shall be required to give the
-----------------------
notice described in this Section 8 upon one or more of the following events: (i)
if the Company shall take a record of the holders of its shares of Common Stock
for the purpose of entitling them to receive a dividend or distribution payable
otherwise than in cash, or a cash dividend or distribution payable otherwise
than out of retained earnings, as indicated by the accounting treatment of such
dividend or distribution on the books of the Company, or (ii) the Company shall
offer to all the holders of its Common Stock any additional shares of capital
stock of the Company or securities convertible into or exchangeable for shares
of capital stock of the Company, or any option, right or warrant to subscribe
therefor, or (iii) a dissolution, liquidation or winding up of the Company
(other than in connection with a consolidation or merger) or a sale of all or
substantially all of its property, assets and business shall be proposed.
8.3 Notice of Change in Exercise Price. The Company shall, promptly after
----------------------------------
an event requiring a change in the Exercise Price pursuant to Section 6 hereof,
send notice to the Holders of such event and change ("Price Notice"). The Price
Notice shall describe the event causing the change and the method of calculating
same and shall be certified as being true and accurate by the Company's
President and Chief Financial Officer.
8.4 Transmittal of Notices. All notices, requests, consents and other
----------------------
communications under this Purchase Option shall be in writing and shall be
deemed to have been duly made on the date of delivery if delivered personally or
sent by overnight courier, with acknowledgment of receipt to the party to which
notice is given, or on the fifth day after mailing if mailed to the party to
whom notice is to be given, by registered or certified mail, return receipt
requested, postage prepaid and properly addressed as follows: (i) if to the
registered Holder of the Purchase Option, to the address of such Holder as shown
on the books of the Company, or (ii) if to the Company, to its principal
executive office.
9. Miscellaneous.
-------------
9.1 Amendments. The Company and the Underwriter may from time to time
----------
supplement or amend this Purchase Option without the approval of any of the
Holders in order to cure any ambiguity, to correct or supplement any provision
contained herein which may be defective or inconsistent with any other
provisions herein, or to make any other provisions in regard to matters or
questions arising hereunder which the Company and the Underwriter may deem
necessary or desirable and which the Company and the Underwriter deem shall not
adversely affect the interest of the Holders. All other modifications or
amendments shall require the written consent of the party against whom
enforcement of the modification or amendment is sought.
9.2 Headings. The headings contained herein are for the sole purpose of
--------
convenience of reference, and shall not in any way limit or affect the meaning
or interpretation of any of the terms or provisions of this Purchase Option.
9.3 Entire Agreement. This Purchase Option (together with the other
----------------
agreements and documents being delivered pursuant to or in connection with this
Purchase Option) constitutes the entire agreement of the parties hereto with
respect to the subject matter hereof, and supersedes all prior agreements and
understandings of the parties, oral and written, with respect to the subject
matter hereof.
9
9.4 Binding Effect. This Purchase Option shall inure solely to the
--------------
benefit of and shall be binding upon, the Holder and the Company and their
respective successors, legal representatives and assigns, and no other person
shall have or be construed to have any legal or equitable right, remedy or claim
under or in respect of or by virtue of this Purchase Option or any provisions
herein contained.
9.5 Governing Law; Submission to Jurisdiction. This Purchase Option shall
-----------------------------------------
be governed by and construed and enforced in accordance with the law of the
State of New York, without giving effect to principles of conflicts of law. The
Company hereby agrees that any action, proceeding or claim against it arising
out of, or relating in any way to, this Purchase Option shall be brought and
enforced in the courts of the State of New York or of the United States of
America for the Southern District of New York, and irrevocably submits to such
jurisdiction, which jurisdiction shall be exclusive. The Company hereby waives
any objection to such exclusive jurisdiction and that such courts represent an
inconvenient forum. Any process or summons to be served upon the Company may be
served by transmitting a copy thereof by registered or certified mail, return
receipt requested, postage prepaid, addressed to it at the address set forth in
Section 8.4 hereof. Such mailing shall be deemed personal service and shall be
legal and binding upon the Company in any action, proceeding or claim. The
Company agrees that the prevailing party(ies) in any such action shall be
entitled to recover from the other party(ies) all of its reasonable attorneys'
fees and expenses relating to such action or proceeding and/or incurred in
connection with the preparation therefor.
9.6 Waiver, Etc. The failure of the Company or the Holder to at any time
-----------
enforce any of the provisions of this Purchase Option shall not be deemed or
construed to be a waiver of any such provision, nor to in any way affect the
validity of this Purchase Option or any provision hereof or the right of the
Company or any Holder to thereafter enforce each and every provision of this
Purchase Option. No waiver of any breach, non-compliance or non-fulfillment of
any of the provisions of this Purchase Option shall be effective unless set
forth in a written instrument executed by the party or parties against whom or
which enforcement of such waiver is sought; and no waiver of any such breach,
non-compliance or non-fulfillment shall be construed or deemed to be a waiver of
any other or subsequent breach, non-compliance or non-fulfillment.
9.7 Execution in Counterparts. This Purchase Option may be executed in
-------------------------
one or more counterparts, and by the different parties hereto in separate
counterparts, each of which shall be deemed to be an original, but all of which
taken together shall constitute one and the same agreement, and shall become
effective when one or more counterparts has been signed by each of the parties
hereto and delivered to each of the other parties hereto.
IN WITNESS WHEREOF, the Company has caused this Purchase Option to be
signed by its duly authorized officer as of the ____ day of ______________,
199_.
SPECIALTY CATALOG CORP.
By:__________________________
Name: Xxxxxx X. Xxxx
Title: Chairman and Chief
Executive Officer
10
Form to be used to exercise Purchase Option:
SPECIALTY CATALOG CORP.
00 Xxxxxxx Xxxxx
Xxxxx Xxxxxx, Xxxxxxxxxxxxx 00000
Date:_________________, 19__
The undersigned hereby elects irrevocably to exercise the within Purchase
Option and to purchase ____ shares of Common Stock of Specialty Catalog Corp.
and hereby makes payment of $____________ (at the rate of $_________ per share
of Common Stock) in payment of the Exercise Price pursuant thereto. Please
issue the Common Stock as to which this Purchase Option is exercised in
accordance with the instructions given below.
or
--
The undersigned hereby elects irrevocably to exercise the within Purchase
Option and to purchase _________ shares of Common Stock of Specialty Catalog
Corp. by surrender of the unexercised portion of the within Purchase Option
(with a "Value" of $__________ based on a "Market Price" of $___________).
Please issue the Common Stock in accordance with the instructions given below.
______________________________
Signature
______________________________
Signature Guaranteed
NOTICE: THE SIGNATURE TO THIS FORM MUST CORRESPOND WITH THE NAME AS WRITTEN
UPON THE FACE OF THE WITHIN PURCHASE OPTION IN EVERY PARTICULAR WITHOUT
ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATSOEVER, AND MUST BE GUARANTEED BY A
BANK, OTHER THAN A SAVINGS BANK, OR BY A TRUST COMPANY OR BY A FIRM HAVING
MEMBERSHIP ON A REGISTERED NATIONAL SECURITIES EXCHANGE.
INSTRUCTIONS FOR REGISTRATION OF SECURITIES
Name ________________________________________________________
(Print in Block Letters)
Address ________________________________________________________
11
Form to be used to assign Purchase Option:
ASSIGNMENT
(To be executed by the registered Holder to effect a transfer of the within
Purchase Option):
FOR VALUE RECEIVED,____________________________________
does hereby sell, assign and transfer unto_______________________
the right to purchase _______________________ shares of Common Stock of
Specialty Catalog Corp. ("Company") evidenced by the within Purchase Option and
does hereby authorize the Company to transfer such right on the books of the
Company.
Dated:___________________, 19__
______________________________
Signature
NOTICE: THE SIGNATURE TO THIS FORM MUST CORRESPOND WITH THE NAME AS WRITTEN
UPON THE FACE OF THE WITHIN PURCHASE OPTION IN EVERY PARTICULAR WITHOUT
ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATSOEVER.
12
