EXHIBIT 1.2
THIS WARRANT AND THE SECURITIES ISSUABLE UPON THE EXERCISE HEREOF CAN BE
TRANSFERRED ONLY IN COMPLIANCE WITH THE SECURITIES ACT OF 1933, AS AMENDED, AND
APPLICABLE STATE SECURITIES LAWS. THIS WARRANT AND SUCH SECURITIES MAY NOT BE
SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT, UNLESS, IN THE OPINION OF COUNSEL TO THE COMPANY, SUCH REGISTRATION
IS NOT THEN REQUIRED.
SIGNATURE EYEWEAR, INC.
000 XXXXX XXX XXXXXX
XXXXXXXXX, XX 00000
REPRESENTATIVES' WARRANT
--------------------------------------------------------------------------------------------
Date of Issuance: As of ____________, 1997 Right to Purchase 180,000 shares of
Expiration Date: As of ____________, 2002 Common Stock, as part of a Grant of Rights
to Purchase an Aggregate of 180,000 shares
of Common Stock (subject to adjustment)
--------------------------------------------------------------------------------------------
THIS CERTIFIES THAT, in consideration of the premises, the payment by the
party named immediately below (an "Underwriter," as defined in Section 1 hereof)
of one mil ($.001) per warrant, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged,
or permitted transferees in accordance with Section 2 or its registered assigns
(the "Registered Holder"), is entitled to purchase from SIGNATURE EYEWEAR, INC.,
a California corporation (the "Company"), the number of shares of common stock,
par value $.001 per share (the "Common Stock"), of the Company set forth above,
subject to adjustment pursuant to Section 5 hereof, at the price of [$_______]
(120% of the initial public offering price of the Common Stock) per share of
Common Stock (as adjusted from time to time pursuant to Section 4 or Section 6
hereof, the "Exercise Price"). This Representatives' Warrant is issued as
contemplated by that certain Underwriting Agreement dated as of ___________,
1997 between Fechtor, Xxxxxxxx & Co., Inc., Xxx Xxxxxx & Company, the Company
and certain underwriters named on Schedule B thereto (the "Agreement").
The amount and kind of securities purchasable pursuant to the rights
granted under this Representatives' Warrant and the purchase price for such
securities are subject to adjustment pursuant to the provisions contained in
this Representatives' Warrant. This Representatives' Warrant is also subject to
the following provisions:
SECTION 1
Certain Definitions
-------------------
As used in this Representatives' Warrant, the following terms have the
meanings set forth below:
"AGREEMENT" is the Underwriting Agreement dated as of August ___, 1997
among the Company and Fechtor, Detwiler, as representative of the several
Underwriters.
"COMMISSION" means the Securities and Exchange Commission.
"COMMON STOCK" means the Company's common stock, $.001 par value per share.
"DATE OF ISSUANCE" is the date set forth on the front page of this
Representatives' Warrant, and the terms "date hereof," "date of this
Representatives' Warrant," and similar expressions shall be deemed to refer to
the Date of Issuance, as specified in Section 12 of this Representatives'
Warrant.
"EFFECTIVE DATE" means the date on which the Registration Statement is
declared effective by the Commission.
"EXERCISE PERIOD" means the period of time commencing at 12:01 A.M.,
Eastern Time, on the first anniversary date of the Effective Date and ending at
5:00 P.M., Eastern Time, on the fifth anniversary date of the Effective Date.
"MARKET PRICE" means the last reported sale price, or, in case no such
reported sale takes place on such day, the average of the last reported sale
prices for the last three (3) 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 by Nasdaq, or, if the Common Stock is not
listed or admitted to trading on any national securities exchange or quoted by
Nasdaq, the average closing bid price as furnished by the NASD through Nasdaq or
similar organization if Nasdaq is no longer reporting such information, or if
the Common Stock is not quoted on Nasdaq, as determined in good faith by
resolution of the Board of Directors of the Company, based on the best
information then available to it. Should the Market Price be determined by the
Board of Directors of the Company pursuant to the last clause of the previous
sentence, such determination shall, absent manifest error, be binding upon the
Registered Holders.
"NASDAQ" means The Nasdaq National Market or the Nasdaq Small Cap Market,
as the case may be, or such other similar interdealer quotation system as may in
the future be used generally by members of the National Association of
Securities Dealers, Inc. ("NASD") for over-the-counter transactions in
securities.
"PERSON" means an individual, a partnership, a corporation, a trust, a
joint venture, an unincorporated organization, and a government or any
department or agency thereof.
"REGISTRATION STATEMENT" means the Company's registration statement on Form
S-1, File No. 33-______, filed with the Commission.
2
"UNDERWRITER" or "UNDERWRITERS" means Fechtor, Xxxxxxxx & Co., Inc., Xxx
Xxxxxx & Company, and such other broker-dealers participating as underwriters
with respect to the public offering of Common Stock as contemplated by the
Agreement.
"STOCK" means shares of the Company's authorized but unissued Common Stock
issued or issuable upon exercise of this Representatives' Warrant or any other
of the Representatives' Warrants; provided that if there is a change such that
--------
the securities issuable upon exercise of an Representatives' Warrant are issued
by an entity other than the Company, or there is a change in the class of
securities so issuable, then the term "Stock" will mean one share of the
security issuable upon exercise of the Representatives' Warrant if such security
is issuable in shares, or will mean the smallest unit in which such security is
issuable if such security is not issuable in shares.
"REPRESENTATIVES' WARRANT" means this Representatives' Warrant and all
other Representatives' Warrants issued as contemplated by the Agreement, and all
Representatives' Warrants issued in exchange or substitution for this
Representatives' Warrant or any such other warrant pursuant to the terms hereof
or thereof, as the case may be.
SECTION 2
TRANSFER RESTRICTIONS UNTIL EXERCISE PERIOD
-------------------------------------------
Until the commencement of the Exercise Period, the Registered Holder may
not sell, assign, transfer or hypothecate this Representatives' Warrant, in
whole or in part, except: (i) to the officers, directors, employees, partners
and affiliates of any Underwriter; (ii) to selected dealers, whether or not
named in the Agreement, which participated in the initial public offering of the
Company's shares of Common Stock, and their officers, directors, employees,
partners and affiliates; and (iii) by operation of law.
SECTION 3
EXERCISE OR REPRESENTATIVES' WARRANT
------------------------------------
3.1 EXERCISE PERIOD. The Registered Holder may exercise this
---------------
Representatives' Warrant, in whole or in part, at any time and from time to
time, during the Exercise Period and the exercise hereof may be for such number
of shares of Stock as the Registered Holder may, in its sole discretion decide.
3.2 EXERCISE PROCEDURE
------------------
(a) This Representatives' Warrant will be deemed to have been
exercised at such time as the Company has received all of the following items
(the "Exercise Date"):
(i) a completed Exercise Agreement, as described below, executed
by the Person exercising all or part of the purchase rights represented by this
Representatives' Warrant (the "Purchaser");
(ii) this Representatives' Warrant (subject to delivery by the
Company of a new Representatives' Warrant with respect to any unexercised
portion, as provided in Subsection 3.2(b));
3
(iii) if this Representatives' Warrant is not registered in the
name of the Purchaser, an Assignment or Assignments in the form set forth as
Exhibit II hereto, evidencing the assignment of this Representatives' Warrant to
the Person; and
(iv) except as provided in Section 3.3 below, a certified or bank
check or other certified funds payable to the Company in an amount equal to the
product of the Exercise Price multiplied by the number of shares of Stock being
purchased upon such exercise.
(b) Certificates for shares of Common Stock purchased upon exercise of
this Representatives' Warrant will be delivered by the Company to the Purchaser
within three (3) business days after the Exercise Date. Unless this
Representatives' Warrant has expired or all of the purchase rights represented
hereby have been exercised, the Company will prepare a new Representatives'
Warrant representing the rights formerly represented by this Representatives'
Warrant that have not expired or been exercised. The Company will, within such
three-day period, deliver such new Representatives' Warrant to the Person
designated for delivery in the Exercise Agreement.
(c) The Common Stock issuable upon the exercise of this
Representatives' Warrant will be deemed to have been issued to the Purchaser on
the Exercise Date, and the Purchaser will be deemed for all purposes to have
become the record holder of such Stock on the Exercise Date.
(d) The issuance of certificates for Common Stock upon exercise of
this Representatives' Warrant will be made without charge to the Registered
Holder or the Purchaser for any issuance tax in respect thereof or any other
cost incurred by the Company in connection with such exercise and the related
issuance of Common Stock; provided, however that the Company shall not be
required to pay any tax that may be payable in respect of any transfer
involved in the issuance and delivery of any certificate or instrument in a name
other than that of the Registered Holder of this Representatives' Warrant and
the Company shall not be required to issue or deliver any such certificate
unless and until the Person or Persons requesting the issue thereof shall have
paid to the Company the amount of such tax or shall have established to the
satisfaction of the Company that such tax has been paid.
(e) The Company will not close its books for the transfer of this
Representatives' Warrant or the shares of Common Stock issued or issuable upon
the exercise of this Representatives' Warrant in any manner that interferes with
the timely exercise of this Representatives' Warrant. The Company will from
time to time take all such action as may be necessary to assure that the par
value per share of the unissued Common Stock acquirable upon exercise of this
Representatives' Warrant is at all times equal to or less than the Exercise
Price of the Common Stock (divided by such number of shares) then in effect.
3.3 EXERCISE BY SURRENDER OF WARRANT. In addition to the method of
--------------------------------
payment set forth in Section 3.2 and in lieu of any cash payment required
thereunder, the Registered Holder shall have the right at any time and from time
to time subject to Section 3.1, and further subject to such Registered Holder
having a sufficient number of shares of Common Stock remaining to be purchased
under this Representatives' Warrant so as to allow for the payment as provided
for below, to exercise this Representatives' Warrant in whole or in part by
surrendering hereof in the manner specified in Section 3.2 as payment of the
aggregate Exercise Price per share of the Common Stock. The number of Warrants
to be surrendered in payment of the aggregate Exercise Price of the Common Stock
for the Warrants to be exercised shall be determined by multiplying the number
of Warrants to be exercised by the Exercise Price per share of Common Stock, and
then dividing the product thereof by an amount equal
4
to the Market Price per share of Common Stock minus the Exercise Price per share
of Common Stock. [Solely for the purposes of this Section 3.3, Market Price
shall be the average of the Market Price for the three (3) trading days
preceding the date on which the form of Exercise Agreement attached hereto is
deemed to have been sent to the Company pursuant to Section 15.3 hereof ("Notice
Date").]
3.4 EXERCISE AGREEMENT. The Exercise Agreement will be substantially in
------------------
the form set forth as Exhibit I hereto, except that if the Stock is not to be
issued in the name of the Registered Holder of this Representatives' Warrant,
the Exercise Agreement will also state the name of the Person to whom the
certificates or instrument for the Stock is to be issued, and if the number of
shares of Stock purchasable does not include all of such securities purchasable
hereunder, it will also state the name of the Person to whom a new
Representatives' Warrant for the unexercised portion of the rights hereunder is
to be delivered.
3.5 FRACTIONAL SHARES OR WARRANTS. If a fractional share of Stock would,
-----------------------------
but for the provisions of Subsection 3.1, be issuable upon exercise of the
rights represented by this Representatives' Warrant, the Company will, within
twenty days after the Exercise Date, deliver to the Purchaser a check payable to
the Purchaser, in lieu of such fractional share of Stock, in an amount equal to
the Market Price of such fractional share of Stock as of the close of business
on the Exercise Date.
SECTION 4
EXERCISE PRICE
--------------
4.1 GENERAL. The initial Exercise Price of this Representatives' Warrant
-------
is set forth on the front page of this Representatives' Warrant. In order to
prevent dilution of the rights granted under this Representatives' Warrant, the
initial Exercise Price will be subject to adjustment from time to time pursuant
to this Section 4.
4.2 SUBDIVISION OR COMBINATION OR COMMON STOCK; AND STOCK DIVIDENDS. If
---------------------------------------------------------------
the Company shall at any time after the date hereof (a) issue any shares of
Common Stock or any stock or other securities convertible into or exchangeable
for Common Stock (such convertible or exchangeable stock or securities being
herein called "Convertible Securities"), or any rights to purchase Common Stock
or Convertible Securities, as a dividend upon Common Stock, (b) issue any shares
of Common Stock, in subdivision of outstanding shares of Common Stock by
reclassification or otherwise, or (c) combine outstanding shares of Common
Stock, by reclassification or otherwise, then the Exercise Price that would
apply if purchase rights hereunder were being exercised immediately prior to
such action by the Company shall be adjusted by multiplying it by a fraction,
the numerator of which shall be the number of shares of Common Stock outstanding
immediately prior to such dividend, subdivision, or combination and the
denominator of which shall be the number of shares of Common Stock (plus any
Convertible Securities issued in connection therewith) outstanding immediately
after such dividend, subdivision, or combination.
4.3 CERTAIN DIVIDENDS OR DISTRIBUTIONS. If the Company shall declare a
----------------------------------
dividend or distribution upon the Common Stock payable otherwise than out of
earnings or earned surplus and otherwise than in Common Stock or Convertible
---
Securities, the Exercise Price shall be reduced by an amount equal, in the
case of a dividend or distribution in cash, to the amount thereof payable
per share of the Common Stock or, in the case of any other dividend or
distribution, to the fair value of such dividend or distribution per share of
the Common Stock as reasonably determined in good faith by the Board of
Directors of the Company. For purposes of the foregoing, a dividend or
distribution other than
5
in cash shall be considered payable out of earnings or earned surplus only to
the extent that such earnings or earned surplus are charged an amount equal to
the fair value of such dividend or distribution as reasonably determined in good
faith by the Board of Directors of the Company. Such reductions shall take
effect as of the date on which a record is taken for the purpose of such
dividend or distribution, or, if a record is not taken, the date as of which the
holders of Common Stock of record entitled to such dividend or distribution are
to be determined.
4.4 NO DE MINIMIS ADJUSTMENTS. No adjustment of the Exercise Price shall
-------------------------
be made if the amount of such adjustment would be less than one cent per share.
In such case any adjustment that otherwise would be required to be made shall be
carried forward and shall be made at the time and together with the next
subsequent adjustment that, together with any adjustment or adjustments so
carried forward, shall amount to not less than one cent per share.
SECTION 5
ADJUSTMENT OF NUMBER OF
SECURITIES ISSUABLE UPON EXERCISE
---------------------------------
Upon each adjustment of the Exercise Price pursuant to Section 4 hereof,
the Registered Holder of this Representatives' Warrant shall thereafter (until
another such adjustment) be entitled to purchase, at the adjusted Exercise Price
in effect on the date purchase rights under this Representatives' Warrant are
exercised, the number of shares of Common Stock, calculated to the nearest
number of shares of Stock, determined by (a) multiplying the number of shares of
Stock purchasable hereunder immediately prior to the adjustment of the Exercise
Price by the Exercise Price in effect immediately prior to such adjustment, and
(b) dividing the product so obtained by the adjusted Exercise Price in effect on
the date of such exercise.
SECTION 6
EFFECT OF REORGANIZATION,
RECLASSIFICATION, CONSOLIDATION, MERGER, OR SALE
------------------------------------------------
If at any time while this Representatives' Warrant is outstanding there
shall be any reorganization or reclassification of the capital stock of the
Company (other than a subdivision or combination of shares provided for in
Subsection 4.2 hereof), any consolidation or merger of the Company with another
corporation (other than a consolidation or merger in which the Company is the
surviving entity and which does not result in any change in the Common Stock),
or any sale or other disposition by the Company of all or substantially all of
its assets to any other corporation, then the Registered Holder of this
Representatives' Warrant shall thereafter upon exercise of this Representatives'
Warrant be entitled to receive the number of shares of capital stock or other
securities or property of the Company, or of the successor corporation resulting
from such consolidation or merger, as the case may be, to which the Stock (and
any other securities and property) of the Company, deliverable upon the exercise
of this Representatives' Warrant, would have been entitled upon such
reorganization, reclassification of capital stock, consolidation, merger, sale,
or other disposition if this Representatives' Warrant had been exercised
immediately prior to such reorganization, reclassification of capital stock,
consolidation, merger, sale, or other disposition. In any such case,
appropriate adjustment (as reasonably determined in good faith by the Board of
Directors of the Company) shall be made in the application of the provisions set
forth in this Representatives' Warrant with respect to the rights and interests
thereafter of the Registered Holder of this Representatives' Warrant to the end
that the provisions set forth in this
6
Representatives' Warrant (including those relating to adjustments of the
Exercise Price and the number of shares and warrants issuable upon the exercise
of this Representatives' Warrant) shall thereafter be applicable, as near as
reasonably may be, in relation to any shares or other property thereafter
deliverable upon the exercise hereof as if this Representatives' Warrant had
been exercised immediately prior to such reorganization, reclassification of
capital stock, consolidation, merger, sale, or other disposition and the
Registered Holder hereof had carried out the terms of the exchange as provided
for by such reorganization, reclassification of capital stock, consolidation, or
merger. If in any such reorganization, reclassification, consolidation, or
merger, additional shares of Common Stock be issued in exchange, conversion,
substitution, or payment, in whole or in part, for or of a security of the
Company other than Common Stock deliverable from exercise of this
Representatives' Warrant, any such issue shall be treated as an issue of Common
Stock covered by the provisions of Section 4. The Company shall not effect any
such reorganization, consolidation, or merger unless, upon or prior to the
consummation thereof, the successor corporation shall assume by written
instrument the obligation to deliver to the Registered Holder hereof such shares
of stock or other securities, cash, or property as such Registered Holder shall
be entitled to purchase in accordance with the foregoing provisions.
Notwithstanding any other provisions of this Representatives' Warrant, in the
event of sale or other disposition of all or substantially all of the assets of
the Company as a part of a plan for liquidation of the Company, all rights to
exercise the Representatives' Warrant shall terminate upon the earlier of the
expiration of the Exercise Period or nine (9) months after the Company gives
written notice to the Registered Holder of this Representatives' Warrant that
such sale or other disposition has been consummated.
SECTION 7
NOTICE OF ADJUSTMENT
--------------------
Immediately upon any adjustment of the Exercise Price, or increase or
decrease in the number of shares of Common Stock purchasable upon exercise of
this Representatives' Warrant, the Company will send written notice thereof to
all Registered Holders, stating the adjusted Exercise Price and the increased or
decreased number of shares of Stock purchasable upon exercise of this
Representatives' Warrant and setting forth in reasonable detail the method of
calculation for such adjustment and increase or decrease. When appropriate,
such notice may be given in advance and included as part of any notice required
to be given pursuant to Section 8 below.
SECTION 8
PRIOR NOTICE OF CERTAIN EVENTS
------------------------------
If at any time:
(a) the Company shall pay any dividend payable in stock upon its
Common Stock or make any distribution (other than cash dividends payable out of
earnings or earned surplus) to the holders of its Common Stock;
(b) the Company shall offer for subscription pro rata to the holders
--------
of its Common Stock any additional shares of stock of any class or any other
rights;
7
(c) there shall be any reorganization or reclassification of the
capital stock of the Company, any consolidation or merger of the Company with
another corporation, or a sale or disposition of all or substantially all its
assets; or
(d) there shall be a voluntary or involuntary dissolution,
liquidation, or winding up of the Company, then, in each such case, the Company
shall give prior written notice, by hand delivery or by certified mail, postage
prepaid, addressed to the Registered Holder of this Representatives' Warrant at
the address of such holder as shown on the books of the Company, of the date on
which (i) the books of the Company shall close or a record shall be taken for
such stock dividend, distribution, or subscription rights or (ii) such
reorganization, reclassification, consolidation, merger, sale, dissolution,
liquidation, or winding up shall take place, as the case may be. A copy of each
such notice shall be sent simultaneously to each transfer agent of the Company's
Common Stock. Such notice shall also specify the date as of which the holders of
Common Stock of record shall participate in said dividend, distribution, or
subscription rights or shall be entitled to exchange their Common Stock for
securities or other property deliverable upon such reorganization,
reclassification, consolidation, merger, sale, dissolution, liquidation, or
winding up, as the case may be. Such written notice shall be given at least 30
days prior to the record date or the effective date, whichever is earlier, of
the subject action or other event.
If any other event (not listed above) would require adjustment to the
Exercise Price, then the Company shall give prior written notice thereof (in
substance as set forth above) to the Registered Holder at its address and in the
manner provided in Section 15.3 hereof.
SECTION 9
NEW PRO RATA PURCHASE RIGHTS
----------------------------
If at any time prior to the expiration of the Exercise Period the Company
grants, issues, or sells any Options, Convertible Securities, or rights to
purchase stock, warrants, securities, or other property pro rata to the record
holders of Common Stock (the "Purchase Rights"), then the Registered Holder of
this Representatives' Warrant will be entitled to acquire, upon the terms
applicable to such Purchase Rights, the aggregate Purchase Rights that such
Registered Holder could have acquired if such Registered Holder had held the
number of shares of Stock acquirable upon exercise of this Representatives'
Warrant had this Representatives' Warrant been fully exercised immediately prior
to the date on which a record was taken for the grant, issuance, or sale of such
Purchase Rights, or, if no such record was taken, the date as or which the
record holders of Common Stock were determined for the grant, issuance, or sale
of such Purchase Rights.
SECTION 10
RESERVATION OF COMMON STOCK
---------------------------
The Company will at all times reserve and keep available for issuance upon
the exercise of the Representatives' Warrants such number of its authorized but
unissued shares of Common Stock as will be sufficient to permit the exercise in
full of all outstanding Representatives' Warrants and Purchase Rights, and the
Company covenants and agrees that, upon such issuance such shares of Common
Stock will be validly issued, fully paid, and nonassessable and not subject to
the preemptive right of any
8
stockholder. As long as this Representatives' Warrant shall be outstanding, the
Company shall use its best efforts to cause all shares of Common Stock issuable
upon the exercise of this Representatives' Warrant to be approved for listing
(subject to official notice of issuance) on all securities exchanges on which
the Common Stock issued to the public in connection herewith may then be listed
and/or quoted on Nasdaq.
SECTION 11
NO STOCKHOLDER RIGHTS OR OBLIGATION
-----------------------------------
This Representatives' Warrant will not entitle the holder hereof to any
voting rights or other rights as a stockholder of the Company, except as
specifically provided in this Agreement. No provision of this Representatives'
Warrant, in the absence of affirmative action by the Registered Holder to
purchase Stock, and no enumeration in this Representatives' Warrant of the
rights or privileges of the Registered Holder, will give rise to any obligation
of such Registered Holder for the Exercise Price of Stock acquirable by exercise
hereof or as a stockholder of the Company.
SECTION 12
EXCHANGE AND REPLACEMENT
FOR DIFFERENT DENOMINATIONS
---------------------------
The Representatives' Warrant is exchangeable, upon the surrender hereof by
the Registered Holder at the principal office of the Company, for new
Representatives' Warrants of like tenor representing in the aggregate the
purchase rights hereunder, and each of such new Representatives' Warrants, as
set forth on the front page hereof, will represent such portion of such rights
as is designated by the Registered Holder at the time of such surrender. Upon
receipt by the Company of evidence reasonably satisfactory to it of loss, theft
or destruction or mutilation of this Representatives' Warrant and, in the case
of loss, theft or destruction, of indemnity or security reasonably satisfactory
to it and reimbursement of all reasonable expenses, and upon surrender and
cancellation of this Warrant Certificate, if mutilated, the Company will make
and deliver a new Representatives' Warrant of like tenor, in lieu thereof. The
date the Company initially issued this Representatives' Warrant, which is set
forth on the front page hereof, will be deemed to be the "Date of Issuance" of
this Representatives' Warrant and any Representatives' Warrant exchanged or
substituted therefor, regardless of the number of times (and dates on which) new
certificates representing the unexpired and unexercised rights formerly
represented by this Representatives' Warrant are issued.
SECTION 13
TRANSFERABILITY
---------------
Subject to the transfer conditions referred to in Section 2 or in the
remaining provisions or this Section 13, this Representatives' Warrant and all
rights hereunder are transferable, in whole or in part, without charge to the
Registered Holder, upon surrender of this Representatives' Warrant with a
properly executed Assignment (in the form of Exhibit II hereto) at the principal
office of the Company located at 000 X. Xxx Xxxxxx, Xxxxxxxxx, XX 00000. This
Representatives' Warrant and the Stock issued upon exercise hereof may not be
offered, sold, or transferred except in compliance with the Securities Act of
1933, as amended (the "Act"), and any applicable state securities laws; and then
only against receipt of an agreement of the Person to whom such offer or sale is
made to comply with the provisions of this
9
Section 13 with respect to any resale or other disposition of such securities;
provided that no such agreement shall be required from any Person purchasing
this Representatives' Warrant or any underlying security pursuant to a
registration statement effective under the Act. The Registered Holder of this
Representatives' Warrant agrees that, prior to the disposition of any Stock
purchased on the exercise hereof under circumstances that might require
registration of such Stock under the Act, or any similar statute then in effect,
the Registered Holder shall give written notice to the Company, expressing his
intention as to such disposition. Promptly upon receiving such notice, the
Company shall present a copy thereof to its securities counsel. If, in the
opinion of such counsel, the proposed disposition does not require registration
of such Stock under the Act, or any similar statute then in effect, the Company
shall, as promptly as practicable, notify the Registered Holder of such opinion,
whereupon the Registered Holder shall be entitled to dispose of such Stock in
accordance with the terms of the notice delivered by the Registered Holder to
the Company. The above agreement by the Registered Holder of this
Representatives' Warrant shall not be deemed to limit or restrict in any respect
the exercise of rights set forth in Section 14 hereof.
SECTION 14
REGISTRATION RIGHTS
-------------------
14.1 DEMAND RIGHTS. At any time during the Exercise Period, the Registered
-------------
Holders of Stock whose holdings thereof comprise a "majority" (as hereinafter
defined) of the shares of Stock purchasable upon the exercise of outstanding
Representatives' Warrants and outstanding shares of Stock from exercise of an
Representatives' Warrant not previously sold pursuant to a registration
statement as contemplated by this Section 14 (collectively, the "Warrant
Securities") shall have the right (which right is in addition to the
registration rights under Section 14.2 hereof), exercisable by written notice to
the Company, to require the Company to prepare and file with the Commission a
new registration statement under the Act (or, in lieu thereof, a post-effective
amendment or amendments to the Registration Statement, if then permitted under
the Act), covering all or any portion (as designated by the Registered Holders)
of the Warrant Securities and to use its best efforts to obtain promptly and
maintain the effectiveness thereof for at least nine (9) months. The Company
covenants and agrees to give written notice of any registration request under
this Section 14.1 by any Registered Holder to all other Registered Holders of
the Warrant Securities within ten (10) days from the date of receipt of any such
registration request.
14.2 "PIGGYBACK RIGHTS". In addition, if at any time during the seven (7)
------------------
years after the Effective Date, the Company shall prepare and file one or more
post-effective amendments to the Registration Statement, or new registration
statements under the Act, with respect to a public offering of equity or debt
securities of the Company, or of any such securities of the Company held by its
security holders, the Company will include in any such post-effective amendment
such information as may be required to permit a public offering of the Warrant
Securities by the Registered Holders thereof or their respective designees or
transferees, or will include in any such new registration statement such
information as is required, and such number of Warrant Securities held by the
Registered Holders thereof or their respective designees or transferees as may
be requested by them, to permit a public offering of the Warrant Securities so
requested; provided, however, that in the case of an underwritten offering, if,
-------- -------
in the written opinion of the Company's managing underwriter for such offering,
the inclusion of the Warrant Securities requested to be registered, when added
to the securities being registered by the Company or the selling security
holder(s), would exceed the maximum amount of the Company's securities that can
be marketed without otherwise materially and adversely affecting the entire
offering, then such managing underwriter may exclude from such offering that
portion of the Warrant Securities
10
requested to be so registered, so that the total number of securities to be
registered is within the maximum number of shares that, in the opinion of the
managing underwriter, may be marketed without otherwise materially and adversely
affect the entire offering, provided that at least a pro rata amount of the
securities that otherwise were proposed to be registered for other stockholders
is also excluded. In the event of such a proposed registration, the Company
shall furnish the then Registered Holders of Warrant Securities with not less
than thirty (30) days' written notice prior to the proposed date of filing of
such post-effective amendment or new registration statement. Such notice shall
continue to be given by the Company to Registered Holders of Warrant Securities,
with respect to subsequent registration statements or post-effective amendments
filed by the Company, until such time as all of the Warrant Securities have been
registered or may be sold without registration under the Act or applicable state
securities laws and regulations, and without limitation as to volume, pursuant
to Rule 144 of the Act. The holders of Warrant Securities shall exercise the
rights provided for in this Subsection 14.2 by giving written notice to the
Company, within twenty (20) days of receipt of the Company's notice of its
intention to file a post-effective amendment or new registration statement.
14.3 COVENANTS OF THE COMPANY WITH RESPECT TO REGISTRATION. In connection
-----------------------------------------------------
with any registration under Section 14.1 or 14.2 hereof, the Company covenants
and agrees as follows:
(a) The Company shall use its best efforts to file a registration
statement within sixty (60) days of receipt of any demand therefor, shall use
its best efforts to have any registration statements declared effective at the
earliest possible time, and shall furnish each Registered Holder desiring to
sell Warrant Securities such number of prospectuses as shall reasonably be
required; provided, however, that the Company may at any time, delay the filing
-------- -------
or delay or suspend the effectiveness of such demand or piggyback registration
or, without suspending such effectiveness, instruct the Registered Holder(s) not
to sell any securities included in such demand or piggyback registration, (i) if
the Company shall have determined upon the written advice of counsel
(confirmation of which notice shall be provided to the Registered Holder(s) in
writing by such counsel) that the Company would be required to disclose any
actions taken or proposed to be taken by the Company in good faith and for valid
business reasons, including without limitation, the acquisition or divestiture
of assets, which disclosure would have a material adverse effect on the Company
or on such actions, or (ii) if required by law, to update the prospectus
relating to any such registration to include updated financial statements (a
"Suspension Period") by providing the Registered Holder(s) with written notice
of such Suspension Period and the reasons therefor; and provided further, that
-------- -------
the Suspension Periods, in the aggregate, do not exceed sixty (60) days. The
Company shall provide such notice as soon as practicable and in any event prior
to the commencement of such a Suspension Period. In the event of a Suspension
Period, the nine-month effective period during which a demand registration is to
remain effective pursuant to Section 14.1 shall be tolled until the end of any
such Suspension Period.
(b) The Company shall pay all costs (excluding fees and expenses of
the Registered Holder(s)' counsel and any underwriting or selling commissions or
other charges of any broker-dealer acting on behalf of the Registered
Holder(s)), fees and expenses in connection with all post-effective amendments
or new registration statements filed pursuant to Sections 14.1 and 14.2 hereof
including, without limitation, the Company's legal and accounting fees, printing
expenses, blue sky fees and expenses. Provided the Registered Holders(s)
requesting registration shall have timely furnished the Company with all
information and taken such other actions as may be required by the Company in
order to effect such registration, if the Company shall willfully fail to comply
with the provisions of Section 14.3(a), the Company shall, in addition to any
other equitable or other relief available to the Registered Holder(s), extend
the Exercise Period by such number of days as shall equal the delay caused by
the Company's failure.
11
(c) The Company will take all necessary action which may be required
in qualifying or registering the Warrant Securities included in a registration
statement for offering and sale under the securities or blue sky laws of such
states as is reasonably requested by the Registered Holder(s), provided that the
Company shall not be obligated to execute or file any general consent to service
of process or to qualify as a foreign corporation to do business under the laws
of any such jurisdiction.
(d) Nothing contained in this Agreement shall be construed as
requiring the Registered Holder(s) to exercise this Representatives' Warrant
prior to the initial filing of any registration statement or the effectiveness
thereof.
(e) The Company shall furnish to each Registered Holder participating
in an offering covered by a registration statement filed pursuant to this
Agreement a signed counterpart, addressed to such Registered Holder, 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 the underwriting agreement), 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 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.
(f) The Company shall as soon as practicable after the effective date
of the registration statement, and in any event within fifteen (15) months
thereafter, make "generally available to its security holders" (within the
meaning of Rule 158 under the Act) an earnings statement (which need not be
audited) complying with Section 11(a) of the Act and covering a period of at
least twelve (12) consecutive months beginning after the effective date of the
registration statement.
(g) The Company shall deliver promptly to each Registered Holder
participating in the offering who shall have requested in writing the
correspondence and memoranda described below and to the managing underwriters,
if any, 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 Registered 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 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
Registered Holder or underwriter shall reasonably request.
(h) The Company agrees that until all the Warrant Securities have been
sold under a registration statement or pursuant to Rule 144 under the Act, it
shall keep current in filing all reports, statements and other materials
required to be filed with the Commission to permit holders of the Warrant
Securities to sell such securities under Rule 144.
(i) For purposes of this Agreement, the term "majority" in reference
to the Registered Holder(s) of Warrant Securities, shall mean in excess of fifty
percent (50%) of the then outstanding Warrant Securities that (i) are not held
by the Company, an affiliate, officer, creditor,
12
employee or agent thereof or any of their respective affiliates, members of
their family, persons acting as nominees or in conjunction therewith, and (ii)
have not been resold to the public pursuant to a registration statement filed
with the Commission under the Act.
14.4 INDEMNIFICATION. The sellers of Warrant Securities shall be
---------------
indemnified by the Company in the same manner as is contained in Section
10(a)(d) and (e) of the Agreement, with respect to such post-effective
amendments, additional registration statements and prospectuses, to the same
extent as the Underwriters are covered by indemnity agreements under such
Sections from the Company with respect to the Registration Statement. Each
seller of Warrant Securities shall indemnify the Company and any Underwriter in
the same manner as is contained in Section 10(b), (d), (e) and (f) of the
Agreement, with respect to such post-effective amendments, additional
registration statements and prospectuses, to the same extent as the Company and
Underwriters are covered by the indemnity provisions under such Sections from
the Selling Stockholders (as defined in the Agreement) with respect to the
Registration Statement.
14.5 SURVIVAL. The rights and obligations set forth in this Section 14
--------
shall survive the exercise and surrender of this Representatives' Warrant.
SECTION 15
MISCELLANEOUS
-------------
15.1 ORIGINAL ISSUE TAXES. The Company will pay all United States, state
--------------------
and local (but not foreign) original issue taxes, if any, upon the issuance of
this Representatives' Warrant or the Common Stock deliverable upon exercise
hereof.
15.2 AMENDMENT AND WAIVER. Except as otherwise provided herein, the
--------------------
provisions of the Representatives' Warrants may be amended, and the Company may
take any action herein prohibited or omit to perform any act herein required to
be performed by it, only if the Company has obtained the written consent of the
Registered Holders representing at least fifty percent (50%) of the shares of
Common Stock obtainable upon the exercise of this Representatives' Warrant
outstanding at the time of such consent.
15.3 NOTICES. Any notices required to be sent to a Registered Holder of
-------
this Representatives' Warrant or of any Common Stock purchased upon the exercise
hereof will be delivered to the address of such Registered Holder shown on the
books of the Company. All notices referred to herein will be delivered in
person or sent by registered or certified mail, postage prepaid, and will be
deemed to have been given when so delivered in person or on the third business
day following the date so sent by mail. Whether or not Fechtor, Xxxxxxxx shall
then be a Registered Holder, a copy of any notice sent to such a Registered
Holder shall be sent to each of them, in the manner provided above, at the
following address:
Fechtor, Xxxxxxxx & Co., Inc.
00 Xxxx 00/xx/ Xxxxxx, 00/xx/ Xxxxx
Xxx Xxxx, XX 00000
(000) 000-0000 Telephone No.
(000) 000-0000 Fax No.
Attn:______________________________
and
13
Fechtor, Xxxxxxxx & Co., Inc.
0000 Xxxxxx Xxxx
Xxxxx 000X
Xxxx Xxxxx, XX 00000
(000) 000-0000 Telephone No.
(000) 000-0000 Fax No.
Attn: Xxxxxxx Xxxxxxxxx,
with a copy to:
Proskauer Xxxx Xxxxx & Xxxxxxxxxx LLP
0000 Xxxxxx Xxxx, Xxxxx 000 Xxxx
Xxxx Xxxxx, XX 00000
Attn: Xxxxxxxxxxx X. Xxxxxxx, Esq.
Xxxxxx X. Xxxxxxxx, XX, Esq.
(000) 000-0000 Telephone No.
(000) 000-0000 Fax No.
15.4 DESCRIPTIVE HEADINGS; GOVERNING LAW. The descriptive headings of the
-----------------------------------
sections and paragraphs of this Representatives' Warrant are inserted for
convenience only and do not constitute a part of this Representatives' Warrant.
The construction, validity, and interpretation of this Representatives' Warrant
will be governed by the laws of the Commonwealth of Massachusetts, without
giving effect to choice of law or conflict of laws principals thereof.
IN WITNESS WHEREOF, the Company has caused the Warrant to be executed and
attested by its duly authorized officers under its corporate seal.
SIGNATURE EYEWEAR, INC.,
a California corporation
By:____________________________
Name:__________________________
Title:_________________________
[Corporate Seal]
Attest:
__________________________
Name:_____________________
Title:____________________
14
EXHIBIT I
---------
EXERCISE AGREEMENT
------------------
To: Dated:
THE UNDERSIGNED Registered Holder, pursuant to the provisions set forth in
the within Representatives' Warrant, hereby subscribes for and purchases _______
shares of Common Stock covered by such Representatives' Warrant and herewith
either makes full cash payment of $______________ for such Common Stock or
otherwise tenders that number of the Warrants for cashless exercise as is
permitted by Section 3.3 thereof, at the Exercise Price provided by such
Representatives' Warrant.
________________________________
(Signature)
________________________________
(Print or type name)
________________________________
(Address)
________________________________
________________________________
NOTICE: The signature on this Exercise Agreement must correspond with the
name as written upon the face of the within Representatives' Warrant, or upon
the Assignment thereof if applicable, in every particular, without alteration,
enlargement, or any change whatsoever, and must be Medallion guaranteed by a
bank, other than a saving bank, having an office or correspondent in New York,
New York, Boca Raton or Miami, Florida, or Boston, Massachusetts, or by a firm
having membership on a registered national securities exchange and an notice in
New York, New York, Boca Raton or Miami, Florida, or Boston, Massachusetts.
SIGNATURE GUARANTEE
Authorized Signature:_________________________________________________________
Name of Bank or Firm:_________________________________________________________
Dated:________________________________________________________________________
15
EXHIBIT II
----------
ASSIGNMENT
----------
FOR VALUE RECEIVED, _____________________________________, the undersigned
Registered Holder hereby sells, assigns, and transfers all of the rights of the
undersigned under the within Representatives' Warrant with respect to the number
of Securities covered thereby set forth below, unto the Assignee identified
below, and does hereby irrevocably constitute and appoint
______________________________ to effect such transfer of rights on the books of
the Company, with full power of substitution:
-----------------------------------------------------------------------------
No. of Shares
Name of Assignee Address of Assignee of Common Stock No. of Warrants
------------------- ------------------- --------------- ---------------
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
Dated:______________________ _________________________________________
(Signature of Registered Holder)
_________________________________________
(Print or type name)
NOTICE: The signature on this Assignment must correspond with the name as
written upon the face of the within Representatives' Warrant, in every
particular, without alteration, enlargement, or any change whatsoever, and must
be Medallion guaranteed by a bank, other than a savings bank, having an office
or correspondent in New York, New York, Boca Raton or Miami, Florida, or Boston,
Massachusetts, or by a firm having membership on a registered national
securities exchange and an office in New York, New York, Boca Raton or Miami,
Florida, or Boston, Massachusetts.
SIGNATURE GUARANTEE
Authorized Signature:_________________________________________________________
Name of Bank or Firm:_________________________________________________________
Dated:________________________________________________________________________
16
