Exhibit 10.1
THE SECURITIES REPRESENTED BY THIS WARRANT HAVE BEEN ACQUIRED FOR
INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "1933 ACT"). THESE SECURITIES MAY NOT BE SOLD OR
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION
THEREFROM UNDER THE SECURITIES ACT OR UNDER STATE SECURITIES LAWS. THIS
WARRANT MAY NOT BE SOLD, ASSIGNED, TRANSFERRED OR OTHERWISE DISPOSED OF
EXCEPT PURSUANT TO THE EXPRESS PROVISIONS OF THIS WARRANT, AND NO SALE,
ASSIGNMENT, TRANSFER, OR OTHER DISPOSITION OF THIS WARRANT SHALL BE
VALID OR EFFECTIVE UNLESS AND UNTIL SUCH PROVISIONS SHALL HAVE BEEN
COMPLIED WITH.
Date of Issuance: June 7, 2005
CANDIES, INC.
Stock Purchase Warrant
(Void after June 8, 2015)
Candies, Inc., a Delaware corporation (the "Company"), for value
received, hereby certifies and agrees that UCC Consulting Corporation or its
registered assigns (the "Registered Holder"), is entitled, subject to the terms
set forth below, to purchase from the Company, at any time or from time to time
on or after the date hereof (the "Date of Issuance") and on or before the tenth
(10th) anniversary of the Date of Issuance but not later than 5:00 p.m. New York
time (such date and time, the "Expiration Time"), up to One Million (1,000,000)
duly authorized, validly issued, fully paid and nonassessable shares of the
Company's common stock, $0.001 par value per share (the "Common Stock") at an
initial exercise price equal to $5.98 (five dollars and ninety-eight cents) per
share, subject to adjustment in certain cases as described herein. The shares
purchasable upon exercise of this Warrant, and the purchase price per share, are
hereinafter referred to as the "Warrant Shares" and the "Exercise Price,"
respectively. The term "Warrant" as used herein shall include this Warrant and
any other warrants delivered in substitution or exchange therefor, as provided
herein. The Warrant Shares shall vest as follows: (a) 333,334 Warrant Shares
(the "First Tranche") upon consummation of the first acquisition of a Target (as
such term is defined in that certain investment banking agreement dated as of
even date herewith between the Company and UCC Consulting Corporation (the "IB
Agreement")), (b) 333,333 Warrant Shares (the "Second Tranche") upon
consummation of the second acquisition of a Target and (c) 333,333 Warrant
Shares (the "Third Tranche") upon consummation of the third acquisition of a
Target, provided, however, no such vesting shall occur with respect to a Minor
Acquisition (as such term is defined in IB Agreement).
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1. Exercise.
1.1 Method of Exercise.
(a) This Warrant may be exercised by the Registered Holder, in whole or in
part, by surrendering this Warrant, with a Notice of Exercise in the
form of Annex A hereto (the "Notice of Exercise") duly executed by such
Registered Holder or by such Registered Holder's duly authorized
attorney, at the principal office of the Company set forth on the
signature page hereto, or at such other office or agency as the Company
may designate in writing (the "Company's Office"), accompanied by
payment in full, in lawful money of the United States, of the Exercise
Price payable in respect of the number of shares of Warrant Shares
purchased upon such exercise.
(b) Each exercise of this Warrant shall be deemed to have been effected
immediately prior to the close of business on the day on which the
Company receives at the Company's Office the Warrant together with the
appropriate completed Notice of Exercise. At such time, the person or
persons in whose name or names any certificates for Warrant Shares
shall be issuable upon such exercise as provided in Section 1.1(c)
hereof shall be deemed to have become the holder or holders of record
of the Warrant Shares represented by such certificates.
(c) As soon as practicable after the exercise of this Warrant, in full or
in part, and in any event within ten (10) days thereafter, the Company,
at its expense, will cause to be issued in the name of, and delivered
to, the Registered Holder, or as such Registered Holder (upon payment
by such Registered Holder of any applicable transfer taxes) may direct:
(i) a certificate or certificates for the number of full Warrant Shares to
which such Registered Holder shall be entitled upon such exercise plus,
in lieu of any fractional share to which such Registered Holder would
otherwise be entitled, cash in an amount determined pursuant to Section
3 hereof; and
(ii) in case such exercise is in part only, a new Warrant or Warrants (dated
the date hereof) of like tenor, representing in the aggregate the
balance of the Warrant Shares that may be purchased thereunder.
1.2 Exercise by Surrender of Warrant. In addition to the method of payment
set forth in Section 1.1 and in lieu of any cash payment required
thereunder, the Warrant may be exercised by surrendering the Warrant in
the manner specified in this Section 1.2, together with irrevocable
instructions to the Company to issue in exchange for the Warrant the
number of shares of Common Stock equal to the product of (x) the number
of shares of Common Stock underlying the Warrants multiplied by (y) a
fraction, the numerator of which is the Market Value (as defined below)
of the Common Stock less the Exercise Price and the denominator of
which is such Market Value. As used herein, the phrase "Market Value"
at any date shall be deemed to be (i) the last reported sale price on
the day prior to such date, or (ii) 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 (a) officially reported
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by the principal securities exchange on which the Common Stock is
listed or admitted to trading or as reported in the Nasdaq National
Market System, or, (b) if the Common Stock is not listed or admitted to
trading on any national securities exchange or quoted on the Nasdaq
National Market System, the closing sale price as furnished by (i) the
National Association of Securities Dealers, Inc. through Nasdaq or (ii)
similar organization if Nasdaq is no longer reporting such information,
or (c) if such information is no longer reported by NASDAQ or similar
organization, the fair market value of the Common Stock as determined
in good faith by resolution of the Board of Directors of the Company,
based on the best information available to it, but in the case of any
such determination made under this clause (c), in no event less than
the greater of (x) the per share Common Stock price of the last sale or
issuance by the Company or (y) the last closing sale price as available
under clause (a) or (b) above prior to such date.
2. Shares to be Fully Paid; Reservation of Shares. The Company covenants and
agrees that all shares of Common Stock which may be issued upon the exercise of
the rights represented by this Warrant will, upon issuance by the Company, be
validly issued, fully paid and nonassessable, and free from preemptive rights
and free from all taxes, liens and charges with respect thereto (other than any
lien which may be imposed by the Registered Holder(s) of the Warrants). The
Company further covenants and agrees that, from and after the Date of Issuance
and during the period within which the rights represented by this Warrant may be
exercised, the Company will at all times have authorized, and reserve, free from
preemptive rights, out of its authorized but unissued shares of Common Stock,
solely for the purpose of effecting the exercise of this Warrant, a sufficient
number of shares of Common Stock to provide for the exercise of the rights
represented by this Warrant.
3. Fractional Shares. The Company shall not be required upon the exercise of
this Warrant to issue any fractional shares, but shall make an adjustment
therefor in cash on the basis of the Market Value for each fractional share of
the Company's Common Stock which would be issuable upon exercise of this
Warrant.
4. Requirements for Transfer.
4.1 Warrant Register. The Company will maintain a register (the "Warrant
Register") containing the names and addresses of the Registered Holder
or Registered Holders. Any Registered Holder of this Warrant or any
portion thereof may change its address as shown on the Warrant Register
by written notice to the Company requesting such change, and the
Company shall promptly make such change. Until this Warrant is
transferred on the Warrant Register of the Company, the Company may
treat the Registered Holder as shown on the Warrant Register as the
absolute owner of this Warrant for all purposes, notwithstanding any
notice to the contrary; provided, however, that if and when this
Warrant is properly assigned in blank, the Company may, but shall not
be obligated to, treat the bearer hereof as the absolute owner hereof
for all purposes, notwithstanding any notice to the contrary.
4.2 Warrant Agent. The Company may, by written notice to the Registered
Holder, appoint an agent for the purpose of maintaining the Warrant
Register referred to in Section 4.1 hereof, issuing the Common Stock
issuable upon the exercise of this Warrant, exchanging this Warrant,
replacing this Warrant or any or all of the foregoing. Thereafter, any
such registration, issuance, exchange, or replacement, as the case may
be, may be made at the office of such agent.
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4.3 Transfer. This Warrant is transferable only with the prior written
consent of the Company; provided, however, the Registered Holder may
transfer the Warrant to any employee or other "affiliated person," as
such term is defined in the Securities Exchange Act of 1934, as
amended, of the Registered Holder without the consent of the Company.
Neither this Warrant nor any rights hereunder may be transferred unless
the Company receives from the Registered Holder such documents and
representations as the Company may request to assure that the proposed
transfer complies with applicable state and federal securities laws and
the regulations of any stock exchange or quotation medium on which the
Common Stock is listed for trading. Subject to the provisions of this
Section 4, this Warrant and all rights hereunder are transferable, in
whole or in part, upon the surrender of this Warrant with a properly
executed Assignment Form in substantially the form attached hereto as
Annex B (the "Assignment") at the principal office of the Company.
4.4 Exchange of Warrant Upon a Transfer. On surrender of this Warrant for
exchange, properly endorsed on the Assignment and subject to the
provisions of this Warrant and with the limitations on assignments and
transfers as contained in this Section 4, the Company at its expense
shall issue to or on the order of the Registered Holder a new warrant
or warrants of like tenor, in the name of the Registered Holder or as
the Registered Holder (on payment by the Registered Holder of any
applicable transfer taxes) may direct, for the number of shares
issuable upon exercise hereof.
5 Investment Representation and Legend. The Registered Holder, by
acceptance of this Warrant, represents and warrants to the Company
that the holder is acquiring the Warrant for its own account for
investment purposes and not with a view toward the distribution
thereof. Unless the offering and sale of the Warrant Shares to be
issued upon the particular exercise of the Warrant shall have been
effectively registered under the 1933 Act, the Company shall be under
no obligation to issue the Warrant Shares covered by such exercise
unless and until the Registered Holder who exercises the Warrant shall
provide the Company with such information that it may reasonably
request to satisfy itself that the issuance of the Warrant Shares upon
exercise of the Warrant complies with an applicable federal and state
securities laws, including, but not limited to, a representation by
such Registered Holder to the Company, at the time of such exercise,
that such person or entity is acquiring such Warrant Shares for his or
her or its own account, for investment and not with a view to, or for
sale in connection with, the distribution of any such Warrant Shares,
in which event the person acquiring such Warrant Shares shall be bound
by the provisions of a legend, substantially as follows, which shall
be endorsed upon the certificate(s) evidencing the Warrant Shares
issued pursuant to such exercise:
"The shares represented by this certificate have not been
registered under the Securities Act of 1933, as amended (the
"Securities Act"). Such shares may not be sold, transferred or
otherwise disposed of unless they have first been registered
under the Act or, unless, in the opinion of counsel
satisfactory to the Company's counsel, such registration is
not required."
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6. Adjustment of Exercise Price.
6.1 Adjustment. If at any time after the date of grant of this Warrant the
Company shall engage in a split-up, subdivision or combination or
exchange of its Common Stock, then the number of shares covered by this
Warrant and the Exercise Price shall be proportionately adjusted for
any such change by the Board of Directors of the Company, whose
determination shall be conclusive.
6.2 Dividend or Distribution. If the Company shall pay a dividend with
respect to the Common Stock or make any other distribution with respect
to the Common Stock, except any distribution specifically provided for
in this Section 6, payable in shares of Common Stock, then the Exercise
Price shall be adjusted, from and after the date of determination of
the stockholders entitled to receive such dividend or distribution, to
that price determined by multiplying the Exercise Price in effect
immediately prior to such date of determination by a fraction (i) the
numerator of which shall be the total number of shares of Common Stock
outstanding immediately prior to such dividend or distribution, and
(ii) the denominator of which shall be the total number of shares of
Common Stock outstanding immediately after such dividend or
distribution.
6.3 Reclassification, Merger, etc. In the case of any reclassification of
the Common Stock or in the case of any consolidation or merger of the
Company with or into another corporation (other than a merger with
another corporation in which the Company is the surviving corporation
and which does not result in any reclassification of the Common Stock)
or in the case of any sale of all or substantially all of the assets of
the Company, then the Company, or such successor or purchasing
corporation, as the case may be, shall execute a new Warrant
Certificate, providing that the Holder shall have the right to exercise
such new warrant (the "New Warrant") and upon such exercise to receive,
in lieu of each share of Common Stock theretofore issuable upon
exercise of this Warrant, the number and kind of shares of stock, other
securities, money or property receivable upon such reclassification,
change, consolidation or merger by a holder of shares of the Common
Stock with respect to one share of Common Stock. Such New Warrant
certificate shall provide for adjustments which shall be as nearly
equivalent as may be practicable to the adjustments provided for
herein. The provisions of this Section 6.3 shall similarly apply to
successive reclassifications, changes, consolidations or mergers.
6.4 Notice of Adjustment. Upon the occurrence of any event which requires
any adjustment of the Exercise Price, then and in each such case the
Company shall give notice thereof to the Registered Holder, which
notice shall state the Exercise Price resulting from such adjustment
and the increase or decrease, if any, in the number of Warrant Shares
purchasable at such price upon exercise, setting forth in reasonable
detail the method of calculation and the facts upon which such
calculation is based.
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6.5 Adjustment in Number of Securities. Upon each adjustment of the
Exercise Price pursuant to the provisions of this Section 6, the
number of securities issuable upon the exercise of each Warrant shall
be adjusted to the nearest full amount by multiplying a number equal
to the Exercise Price in effect immediately prior to such adjustment
by the number of Warrant Shares issuable upon exercise of the Warrants
immediately prior to such adjustment and dividing the product so
obtained by the adjusted Exercise Price.
7. Notices of Record Date, Etc. In case the Company shall take a record of the
holders of its Common Stock (or other stock or securities at the time
deliverable upon the exercise of this Warrant) for the purpose of entitling or
enabling them to receive any dividend or other distribution, or to receive any
right to subscribe for or purchase any shares of stock of any class or any
other securities, or to receive any other right; or of any capital
reorganization of the Company, any reclassification of the capital stock of
the Company, any consolidation or merger of the Company with or into another
corporation (other than a consolidation or merger in which the Company is the
surviving entity), or any transfer of all or substantially all of the assets
of the Company; or of the voluntary or involuntary dissolution, liquidation or
winding-up of the Company, then, and in each such case, the Company will mail
or cause to be mailed to the Registered Holder of this Warrant a notice
specifying, as the case may be, (i) the date on which a record is to be taken
for the purpose of such dividend, distribution or right, and stating the
amount and character of such dividend, distribution or right, or (ii) the
effective date on which such reorganization, reclassification, consolidation,
merger, transfer, dissolution, liquidation or winding-up is to take place, and
the time, if any is to be fixed, as of which the holders of record of Common
Stock (or such other stock or securities at the time deliverable upon the
exercise of this Warrant) shall be entitled to exchange their shares of Common
Stock (or such other stock or securities) for securities or other property
deliverable upon such reorganization, reclassification, consolidation, merger,
transfer, dissolution, liquidation or winding-up. Such notice shall be mailed
at least ten (10) days prior to the record date or effective date for the
event specified in such notice unless such prior notice is waived by the
Registered Holder. Failure by the Company to give such notice or any defect
therein shall not affect the validity of any action taken by the Company in
connection with the declaration or payment of any such dividend or
distribution, or the issuance of any subscription or other rights, or any
proposed reorganization, reclassification, consolidation, merger, transfer,
liquidation, dissolution or winding up or other corporate action referred to
in this Section 7; provided, however, in the event of failure to give notice
or any defect therein, the Registered Holder shall not waive any rights he
would have otherwise had had timely notice been given.
8. No Rights of Stockholders. Subject to other Sections of this Warrant, the
Registered Holder shall not be entitled to vote, to receive dividends or
subscription rights, nor shall anything contained herein be construed to
confer upon the Registered Holder, as such, any of the rights of a stockholder
of the Company, including, without limitation, any right to vote for the
election of directors or upon any matter submitted to stockholders, to give or
withhold consent to any corporate action (whether upon any recapitalization,
issuance of stock, reclassification of stock, change of par value or change of
stock to no par value, consolidation, merger, conveyance, or otherwise), to
receive notices, or otherwise, until the Warrant shall have been exercised as
provided herein.
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9. Replacement of Warrant. Upon receipt of evidence reasonably satisfactory to
the Company of the loss, theft, destruction or mutilation of this Warrant and
(in the case of loss, theft or destruction) upon delivery of an indemnity
agreement reasonably satisfactory to the Company, or (in the case of
mutilation) upon surrender and cancellation of this Warrant, the Company will
issue, in lieu thereof, a new Warrant of like tenor.
10. Registration Rights.
10.1 Demand Registration.
(a) Upon the vesting of the First Tranche
(the "Trigger Date"), the Registered Holders of at least a
majority of the Registrable Securities may deliver a written
request to the Company requesting that the Company file, on
one (1) occasion, a registration statement under the Act
covering the registration of the Registrable Securities (as
hereinafter defined); provided, however, that (i) the Company
shall not be obligated to effect any such registration
pursuant to this Section 10.1 if Form S-3 is not available for
such offering by the Registered Holders and (ii) the Company
shall not be required to enter into any underwriting agreement
with respect to any registration statement filed under Section
10.1 If the Company shall receive any such written request,
then the Company shall use its commercially reasonable efforts
to file a registration statement (the "Registration
Statement") with the Securities and Exchange Commission
("SEC") as soon as practicable, and in any event within
forty-five (45) days of the receipt of such request ("Request
Date") as would permit or facilitate the sale and distribution
of all or such portion of such Registrable Securities that the
Registered Holders request to be registered; provided,
however, that the 45 day period shall be subject to
availability of audited financial statements of the Company or
to an event which the Company must report on Form 8-K, or
another appropriate SEC form, that prevents such filing, in
which case such Registration Statement shall be filed as soon
as practicable following the availability of audited financial
statements or the reporting of such event on Form 8-K or other
appropriate form. The Company shall (i) use commercially
reasonable efforts to have such Registration Statement
declared effective by the SEC as soon thereafter as is
practical, but in any event within one hundred and fifty (150)
days of its receipt of the written request to effect the
registration, and (ii) cause such Registration Statement to
remain effective until the date which is the earlier of such
time as (A) the Registered Holders have completed the
distribution described in the Registration Statement relating
thereto or (B) the Registered Holders have publicly sold the
Registrable Securities other than pursuant to the registration
statement or (C) all of the Registrable Securities thereunder
may be sold pursuant to Rule 144(k) under the 1933 Act or any
successor rule (the "Effectiveness Period") provided, however,
that the Company shall not be obligated to maintain the
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effectiveness of any such registration pursuant to this
Section 10.1 if Form S-3 is not available for such offering by
the Registered Holders. However, in the event of any failure
of the Company to maintain the effectiveness of the
Registration Statement for the period set forth above other
than by reason of Form S-3 not being available, the demand
registration provisions of this Section 10.1 (limited to the
filing of one additional registration statement only on Form
S-3 if available) shall be available to the Registered
Holders, as if such holders had never made a demand for
registration pursuant to the provisions of this Section 10.1.
For purposes of this Agreement, the term "Registrable
Securities" shall mean the Warrant Shares issuable upon the
exercise of the Warrants; provided, however, that securities
shall only be treated as Registrable Securities if and only
for so long as they (A) have not been disposed of pursuant to
a registration statement declared effective by the SEC, or (B)
have not been sold in a transaction exempt from the
registration and prospectus delivery requirements of the 1933
Act (such as Rule 144(k) or any successor rule) so that all
transfer restrictions and restrictive legends with respect
thereto are removed upon the consummation of such sale or (C)
are not eligible to be sold pursuant to Rule 144(k) or any
successor rule.
(b) Notwithstanding the requirement to file
the Registration Statement as described above, if the Company
shall furnish to the Registered Holders a certificate signed
by the Chief Executive Officer or President of the Company
stating that in the good faith judgment of the Board of
Directors of the Company it would not be in the best interest
of the Company for such registration statement to be filed,
the Company shall have the right to defer taking action with
respect to such filing for a period of not more than ninety
(90) days after the date of such certificate; provided,
however, that the Company shall not defer its obligation in
this manner more than once in any twelve (12) month period.
(c) All expenses (other than (i)
underwriting discounts and commissions, brokerage fees and
applicable transfer taxes and (ii) any fees or expenses of any
advisor or counsel to the Registered Holders (except as may
arise under subsection (e) below) incurred in connection with
registrations, filings or qualifications pursuant to Section
10 hereof, including, without limitation, all registration,
filing and qualification fees, printers' and accounting fees,
fees and disbursements of counsel for the Company shall be
borne by the Company. Further, the Company shall pay its
internal expenses (including, without limitation, all salaries
and expenses of its officers and employees performing legal or
accounting duties), the expense of any annual audit or
quarterly review, the expense of any liability insurance
obtained by the Company and the expenses and fees for listing
or authorizing for quotation the securities to be registered
on each securities exchange, market or automated quotation
system on which it Common Stock is then listed or quoted.
(d) Prior to any resale of Registrable
Securities by any Registered Holder, the Company shall
register or qualify or cooperate with the Registered Holder in
connection with the registration or qualification (or
exemption from the registration or qualification) of such
Registrable Securities for the resale by the Registered Holder
under the securities or Blue Sky laws of such jurisdictions
within the United States as any Registered Holder reasonably
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requests in writing and as reasonably acceptable to the
Company, to keep each registration or qualification (or
exemption therefrom) effective during the Effectiveness Period
and to do any and all other acts or things reasonably
necessary to enable the disposition in such jurisdictions of
the Registrable Securities covered by the Registration
Statement; provided, that the Company shall not be required to
qualify generally to do business in any jurisdiction where it
is not then so qualified, consent to service of process in any
jurisdiction in which it has not so consented, subject the
Company to any material tax in any such jurisdiction where it
is not then so subject or file a general consent to service of
process in any such jurisdiction.
(e) Each of the Company and each Registered
Holder shall indemnify the other party hereto and their
respective officers, directors, employees and agents against
all claims, losses, damages and liabilities (or actions in
respect thereof) arising out of or based on any untrue
statement (or alleged untrue statement) by the indemnifying
party of a material fact contained in any prospectus or other
document (including any related registration statement,
notification or the like) incident to any registration of the
type described in this Section 10, or any omission (or alleged
omission) by the indemnifying party to state in any such
document a material fact required to be stated therein or
necessary to make the statements therein not misleading, and
shall reimburse such indemnified party for any legal and any
other expenses reasonably incurred in connection with
investigating and defending any such claim, loss, damage,
liability or action; provided that no party will be eligible
for indemnification hereunder to the extent that any such
claim, loss, damage, liability or expense arises out of or is
based on any untrue statement or omission based upon written
information furnished by such party for use in connection with
such registration. Notwithstanding the foregoing, no
Requesting Holder shall be entitled to indemnification under
this Section 10 where either (i) a prospectus was required to
be delivered to the purchaser of Registrable Securities and
was available to be delivered by the selling Registered Holder
or its broker but was not so delivered, (ii) prior to
consummation of such sale either a supplement or amendment to
the Company's prospectus correcting any alleged untrue
statement or alleged untrue statement or omission or alleged
omission was transmitted to the selling Registered Holder but
not transmitted by the Registered Holder or its broker to the
purchaser of the Registrable Securities or (iii) the
Registered Holder was advised by the Company in writing that
the prospectus could no longer be used. In addition, if the
indemnifying party is a Registered Holder, in no event shall
its indemnification obligation exceed the net proceeds
received by the Registered Holder upon a sale of the
Registrable Securities.
(f) Each Registered Holder shall furnish to
the Company such information regarding the Registered Holder
and the distribution proposed by it as the Company may
reasonably request in connection with any registration or
offering referred to in this Section 10 and the Company's
registration obligations under this Section 10 shall be
subject to the Company's receipt of such information. Each
Registered Holder shall cooperate as reasonably requested by
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the Company in connection with the preparation of the
registration statement with respect to such registration, and
for so long as the Company is obligated to file and keep
effective such registration statement, shall provide to the
Company, in writing, for use in the registration statement,
all such information regarding the Registered Holder and its
plan of distribution of the Registrable Securities included in
such registration as may be reasonably necessary to enable the
Company to prepare such Registration Statement, to maintain
the currency and effectiveness thereof and otherwise to comply
with all applicable requirements of law in connection
therewith.
10.2 Piggyback Registration. In addition to the demand
registration provisions of Section 10.1, if at any time during the term
of this Warrant, the Company shall determine to prepare and file with
the SEC a registration statement relating to an offering for its own
account or the account of others under the 1933 Act of any of its
equity securities, other than on Form S-4 or Form S-8 (each as
promulgated under the Act) or their then equivalents relating to equity
securities to be issued solely in connection with any acquisition of
any entity or business, any share exchange or recapitalization or
equity securities issuable in connection with the stock option or other
employee benefit plans, then the Company shall send to each Registered
Holder a written notice of such determination and, if within 15 days
after the date of such notice, the Registered Holder shall so request
in writing delivered to the Company, the Company shall include in such
registration statement all or any part of such Registrable Securities
such Registered Holder requests to be registered, subject to customary
underwriter cutbacks applicable to all holders of registration rights
(other than the holder that exercised a demand registration right that
has contractual priority rights with respect to such cutbacks);
provided, that, the Company shall not be required to register any
Registrable Securities pursuant to this Section 10.2 that are eligible
for resale pursuant to Rule 144(k) or that are the subject of a then
effective Registration Statement or that have been publicly sold.
Notwithstanding the provisions of this Section 10.2, the Company shall
have the right at any time after it shall have given notice pursuant to
this Section 10.2 (irrespective of whether any written request for
inclusion of such securities shall have already been made) to elect not
to file any such proposed registration statement, or to withdraw the
same after the filing but prior to the effective date thereof. Whether
or not such registration is withdrawn, the registration expenses of
such withdrawn registration shall be borne by the Company in accordance
with Section 10.1(c) hereof.
11. Mailing of Notices, Etc. All notices and other communications from the
Company to each Registered Holder of this Warrant shall be mailed by
first-class certified or registered mail, postage prepaid, to the last address
furnished to the Company in writing by the Registered Holder of this Warrant.
All notices and other communications from the Registered Holder of this
Warrant or in connection herewith to the Company shall be mailed by
first-class certified or registered mail, postage prepaid, to the Company at
its principal office set forth below. If the Company should at any time change
the location of its principal office to a place other than as set forth below,
then it shall give prompt written notice to each Registered Holder of this
Warrant and thereafter all references in this Warrant to the location of its
principal office at the particular time shall be as so specified in such
notice.
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12. Change or Waiver; Severability. Any term of this Warrant may be changed or
waived only by an instrument in writing signed by the party against which
enforcement of the change or waiver is sought. If any provision of this
Warrant shall be held to be invalid and unenforceable, such invalidity or
unenforceability shall not affect any other provision of this Warrant.
13. Headings; Severability. The headings in this Warrant are for purposes of
reference only and shall not limit or otherwise affect the meaning of any
provision of this Warrant. If any provision of this Warrant shall be held to
be invalid and unenforceable, such invalidity or unenforceability shall not
affect any other provision of this Warrant.
14. Governing Law and Submission to Jurisdiction. This Warrant will be governed
by and construed in accordance with the laws of the State of New York without
regard to principles of conflict or choice of laws of any jurisdiction. The
parties hereby agree that any action, proceeding or claim against it arising
out of, or relating in any way to this Warrant shall be brought and enforced
in the courts of the State of New York, and irrevocably submit to such
jurisdiction, which jurisdiction shall be exclusive.
15. Certificate. Upon request by a Registered Holder of this Warrant, the
Company shall promptly deliver to such holder a certificate executed by its
President or Chief Financial Officer setting forth the total number of
outstanding shares of capital stock, convertible debt instruments and options,
rights, warrants or other agreements relating to the purchase of such capital
stock or convertible debt instruments, together with its calculation of the
number of shares remaining available for issuance upon exercise of this
Warrant, and a certificate of the accuracy of the statements set forth
therein.
16. Supplements and Amendments. The Company and the initial Registered Holder
may from time to time supplement or amend this Warrant in order to cure any
ambiguity, to correct or supplement any provision contained herein which may
be defective or inconsistent with any provision herein, or to make any other
provisions in regard to matters or questions arising hereunder which the
Company and the Holder may deem necessary or desirable.
17. Successors. All the covenants and provisions of this Warrant shall be
binding upon and inure to the benefit of the Company and the Registered
Holders and their respective successors and assigns hereunder.
18. Benefits of this Warrant. Nothing in this Warrant shall be construed to give
to any person, entity or corporation other than the Company and the Registered
Holder(s) of the Warrant Certificate any legal or equitable right, remedy or
claim under this Warrant; and this Warrant shall be for the sole and exclusive
benefit of the Company and the Registered Holder(s) of the Warrant
Certificate.
19. Counterparts. This Warrant may be executed in any number of counterparts and
each such counterpart shall for all purposes be deemed to be an original, and
such counterparts shall together constitute but one and the same instrument.
11
IN WITNESS WHEREOF, CANDIES, INC. has caused this Warrant to be signed by
its duly authorized officers under its corporate seal and to be dated on the day
and year first written above.
CANDIES, INC.
By:/s/ Neil Cole
-------------
Name: Neil Cole
Title: Chief Executive Officer
Principal Office:
215 West 40th Street
New York, NY 10018
12
ANNEX A
NOTICE OF EXERCISE FORM
To: Candies, Inc.
Attention: President
1. The undersigned hereby elects to purchase _______________ (leave
blank if you choose Alternative No. 2 below) shares of Common Stock of Candies,
Inc. pursuant to the terms of this Warrant, and tenders herewith payment of the
purchase price of such shares in full. (Initial here if the undersigned elects
this alternative). _________
2. In lieu of exercising the attached Warrant for cash or check, the
undersigned hereby elects to effect the exercise by surrender of warrant
provision of Section 1.2 of this Warrant and receive ____________ (leave blank
if you choose Alternative No. 1 above) shares of Common Stock of Candies, Inc.
pursuant to the terms of this Warrant. (Initial here if the undersigned elects
this alternative). ___________
3. Please issue a certificate or certificates representing said
securities in the name of the undersigned or in such other name as is specified
below:
- ----------------------------------------------------------------
(Name)
- ----------------------------------------------------------------
(Address)
- -----------------------------------------------------
Signature
- -----------------------------------------------------
Date:
ANNEX B
ASSIGNMENT FORM
FOR VALUE RECEIVED, _________________________________ hereby
sells, assigns and transfers all of the rights of the undersigned under the
attached Warrant with respect to the number of shares of Common Stock covered
thereby set forth below, unto:
Name of Assignee Address No. of Shares
Dated:
Signature:
Dated:
Witness: