No sale, offer to sell or transfer of the securities represented by this
certificate or any interest therein shall be made unless a registration
statement under the Federal Securities Act of 1933, as amended (the "Act"), with
respect to such transaction is then in effect, or the issuer has received an
opinion of counsel satisfactory to it that such transfer does not require
registration under that Act.
This Warrant will be void after 5:00 p.m. New York time on
___________, 2001 (i.e. five years from the effective date of the Registration
Statement).
Warrant No. 1
UNIT PURCHASE WARRANT
To Subscribe for and Purchase Units of
DECOR GROUP, INC.
(Transferability Restricted as Provided in Paragraph 2 Below)
THIS CERTIFIES THAT, for value received, ______________
__________________ or registered assigns, is entitled to subscribe for and
purchase from Decor Group, Inc., incorporated under the laws of the State of
Delaware (the "Company"), up to ________ fully paid and non-assessable Units
(the "Underwriter's Warrant") consisting of two fully paid and non-assessable
shares of Common Stock of the Company and one Class A Common Stock Purchase
Warrant (the "Underwriter's Class A Warrants") of the Company, as hereinafter
defined, at the "Unit Warrant Price" and during the period hereinafter set
forth, subject, however, to the provisions and upon the terms and conditions
hereinafter set forth. This Warrant is one of an issue of the Company's
Underwriter's Warrants identical in all respects except as to the names of the
holders thereof and the number of Units purchasable thereunder, representing on
the original issue thereof rights to purchase up to 30,000 Units.
1. As used herein:
(a) "Common Stock" or "Common Shares" shall initially refer to the
Company's common stock as more fully set forth in Section 5 hereof.
(b) The "Warrant Agreement" shall refer to the Warrant Agreement
dated as of ___________, 1996 between American Stock Transfer & Trust Co. and
the Company.
(c) Class A Warrants shall refer to the Warrant(s) included in the
Units offered to the public by the Company through VTR CAPITAL INC., pursuant to
a Registration Statement declared effective by the Securities and Exchange
Commission ("SEC") on __________, 1996 and issued or to be issued subject to
terms and conditions of the Warrant Agreement.
(d) "Underwriter's Class A Warrants" shall refer to the Class A
Warrants issuable upon exercise of this Warrant to the holder thereof and shall
be identical in all respects to the Class A Warrants issued in the public
offering.
(e) "Units" shall consist of two shares of Common Stock and one
Class A Warrant. The Common Stock included in the Units and issuable upon the
exercise of the Class A Warrant are subject to adjustment pursuant to Section 4
hereof and the Warrant Agreement.
(f) "Effective Date" shall mean the date that the Securities and
Exchange Commission declares effective form SB-2, File No. 333-5553.
(g) "Unit Warrant Price" shall be $16.50 which is subject to
adjustment pursuant to Section 4 hereof.
(h) "Underwriter" shall refer to VTR CAPITAL INC.
(i) "Underwriting Agreement" shall refer to the Underwriting
Agreement dated ___________, 1996 between the Company, Gordon Brothers Capital
Corporations and the Underwriter.
(j) "Underwriter's Warrants" shall refer to Warrants to purchase an
aggregate of up to 30,000 Units issued to the Underwriter or its designees by
the Company pursuant to the Underwriting Agreement (including the Warrants
represented by this Certificate), as such may be adjusted from time to time
pursuant to the terms of Section 4 hereof (and including any Warrants
represented by any certificate issued from time to time in connection with the
transfer, partial exercise, exchange of any Warrants or in connection with a
lost, stolen, mutilated or destroyed Warrant certificate, if any, or to reflect
an adjusted number of Units).
(k) "Underlying Securities" shall refer to and include the Common
Shares and Underwriter's Class A Warrants issuable or issued upon exercise of
the Underwriter's Warrants as well as any Common Shares issued upon the exercise
of the Underwriter's Class A Warrants.
(l) "Holders" shall mean the registered holder of the Underwriter's
Warrants or any issued Underlying Securities.
2. The purchase rights represented by this Warrant may be exercised by the
holder hereof, in whole or in part at any time, and from time to time, during
the period commencing on the Effective Date and expiring on ___________, 2001
(the "Expiration Date"), by the surrender of this Warrant, with the purchase
form attached duly executed, at the Company's office (or such office or agency
of the Company as it may designate in writing to the Holder hereof by notice
pursuant to Section 14 hereof), and upon payment by the Holder to the Company in
cash, or by certified check or bank draft of the Unit Warrant Price for such
Units. The Company agrees
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that the Holder hereof shall be deemed the record owner of such Underlying
Securities as of the close of business on the date on which this Warrant shall
have been presented and payment made for such Units as aforesaid. Certificates
for the Underlying Securities so purchased shall be delivered to the Holder
hereof within a reasonable time, not exceeding five (5) days, after the rights
represented by this Warrant shall have been so exercised. If this Warrant shall
be exercised in part only, the Company shall, upon surrender of this Warrant for
cancellation, deliver a new Underwriter's Warrant evidencing the rights of the
Holder hereof to purchase the balance of the Units which such Holder is entitled
to purchase hereunder. Exercise in full of the rights represented by this
Warrant shall not extinguish the rights granted under Section 9 hereof.
In the event that the Underwriter's Class A Warrants have expired, this
Warrant will entitle the holder to purchase only the shares of Common Stock
included in the Units, subject to adjustment as provided for herein.
3. Subject to the provisions of Section 8 hereof, (i) this Warrant is
exchangeable at the option of the Holder at the aforesaid office of the Company
for other Underwriter's Warrants of different denominations entitling the Holder
thereof to purchase in the aggregate the same number of Units as are purchasable
hereunder; and (ii) this Warrant may be divided or combined with other
Underwriter's Warrants which carry the same rights, in either case, upon
presentation hereof at the aforesaid office of the Company together with a
written notice, signed by the Holder hereof, specifying the names and
denominations in which new Underwriter's Warrants are to be issued, and the
payment of any transfer tax due in connection therewith.
4. Subject and pursuant to the provisions of the Warrant Agreement, the
Unit Warrant Price, the exercise price per share of the Underwriter's Class A
Warrants and number of shares of Common Stock included in and issuable in
connection with the Units and the exercise of the Underwriter's Class A Warrants
subject to this Warrant shall be subject to adjustment from time to time as set
forth in the Warrant Agreement.
5. For the purposes of this Warrant, the terms "Common Shares" or "Common
Stock" shall mean (i) the class of stock designated as the common stock of the
Company on the date set forth on the first page hereof or (ii) any other class
of stock resulting from successive changes or re-classifications of such Common
Stock consisting solely of changes in par value, or from no par value to par
value, or from par value to no par value. If at any time, as a result of an
adjustment made pursuant to Section 4, the securities or other property
obtainable upon exercise of this Warrant shall include shares or other
securities of the Company other than Common Shares or securities of another
corporation or other property, thereafter, the number of such other shares or
other securities or property so obtainable shall be subject to adjustment from
time to time in a manner and on terms as nearly equivalent as practicable
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to the provisions with respect to the Common Shares contained in Section 4 and
all other provisions of this Warrant with respect to Common Shares shall apply
on like terms to any such other shares or other securities or property. Subject
to the foregoing, and unless the context requires otherwise, all references
herein to Common Shares shall, in the event of an adjustment pursuant to Section
4, be deemed to refer also to any other securities or property then obtainable
as a result of such adjustments.
6. The Company covenants and agrees that:
(a) During the period within which the rights represented by this
Warrant may be exercised, the Company shall, at all times, reserve and keep
available out of its authorized capital stock, solely for the purposes of
issuance upon exercise of this Warrant, such number of its Common Shares as
shall be issuable upon the exercise of this Warrant and the exercise of the
Underwriter's Class A Warrants and at its expense will obtain the listing
thereof on all national securities exchanges on which the Class A Warrants are
then listed; and if at any time the number of authorized Common Shares shall not
be sufficient to effect the exercise of this Warrant and the exercise of the
Underwriter's Class A Warrants included therein, the Company will take such
corporate action as may be necessary to increase its authorized but unissued
Common Shares to such number of shares as shall be sufficient for such purpose;
the Company shall have analogous obligations with respect to any other
securities or property issuable upon exercise of this Warrant.
(b) All Common Shares which may be issued upon exercise of the
rights represented by this Warrant or upon the exercise of the Underwriter's
Class A Warrants will, upon issuance and payment be validly issued, fully paid,
nonassessable and free from all taxes, liens and charges with respect to the
issuance thereof (except as may be concurrently discharged by the Company or the
Holder); and,
(c) All original issue taxes payable in respect of the issuance of
Common Shares upon the exercise of the rights represented by this Warrant or the
Underwriter's Class A Warrants shall be borne by the Company but in no event
shall the Company be responsible or liable for income taxes or transfer taxes
upon the transfer of any Underwriter's Warrants.
7. Until exercised, this Warrant shall not entitle the Holder hereof to
any voting rights or other rights as a shareholder of the Company, except that
the Holder of this Warrant shall be deemed to be a shareholder of this Company
for the purpose of bringing suit on the ground that the issuance of shares of
stock of the Company is improper under the laws of the Company's state of
incorporation.
8. This Warrant shall not be sold, transferred, assigned or hypothecated
for a period of twelve (12) months from the effective date of the Company's
public offering with respect to which this
4
Warrant has been issued, except to officers of the Underwriter, and/or the other
underwriters and/or selected dealers who participated in such offering, or the
officers or partners of such underwriters and/or selected dealers. In no event
shall this Warrant be sold, transferred, assigned or hypothecated except in
conformity with the applicable provisions of the Securities Act of 1933, as then
in force (the "Act"), or any similar Federal statute then in force, and all
applicable "Blue Sky" laws.
9. The Holder of this Warrant, by acceptance hereof, agrees that, prior to
the disposition of this Warrant or of any Underlying Securities theretofore
purchased upon the exercise hereof, under circumstances that might require
registration of such securities under the Act, or any similar Federal statute
then in force, such Holder will give written notice to the Company expressing
such Holder's intention of effecting such disposition, and describing briefly
such Holder's intention as to the disposition to be made of this Warrant and/or
the Underlying Securities theretofore issued upon exercise hereof. Promptly upon
receiving such notice, the Company shall present copies thereof to its counsel
and the provisions of the following subdivisions shall apply:
(a) If, in the opinion of such counsel, the proposed disposition
does not require registration under the Act, or any similar Federal statute then
in force, of this Warrant and/or the securities issuable or issued upon the
exercise of this Warrant, the Company shall, as promptly as practicable, notify
the Holder hereof of such opinion, whereupon such holder shall be entitled to
dispose of this Warrant and/or such Underlying Securities theretofore issued
upon the exercise hereof, all in accordance with the terms of the notice
delivered by such Holder to the Company.
(b) If, in the opinion of such counsel, such proposed disposition
requires such registration or qualification under the Act, or similar Federal
statute then in effect, of this Warrant and/or the Underlying Securities
issuable or issued upon the exercise of this Warrant, the Company shall promptly
give written notice of such opinion to the Holder hereof and to the then holders
of the securities theretofore issued upon the exercise of this Warrant at the
respective addresses thereof shown on the books of the Company. Section 15 of
the Underwriting Agreement provides for the following rights:
"SECTION 15. Registration of the Warrants and/or securities underlying the
Underwriters' Warrants. The Company agrees that it will, upon request by the
Representative or the holders of a majority of the Underwriters' Warrants and
Underlying Securities within the period commencing one year after the Effective
Date, and for a period of five years from the Effective Date, on one occasion
only at the Company's sole expense, cause the Underwriters' Warrants and/or the
Underlying Securities issuable upon exercise of the Underwriters' Warrants, to
be the subject of a post-effective amendment, a new Registration Statement, if
appropriate (hereinafter referred to as the "demand Registration Statement"), so
as to enable the Representative and/or its assigns to offer
5
publicly the Underwriters' Warrants and/or the underlying securities. The
Company agrees to register such securities expeditiously and, where possible,
within forty-five (45) business days after receipt of such requests. The Company
agrees to use its "best efforts" to cause the post-effective amendment, new
Registration Statement to become effective and for a period of nine (9) months
thereafter to reflect in the post-effective amendment, new Registration
Statement, financial statements which are prepared in accordance with Section
10(a)(3) of the Act and any facts or events arising which, individually or in
the aggregate, represent a fundamental and/or material change in the information
set forth in such post-effective amendment or new Registration Statement. The
holders of the Underwriters' Warrants may demand registration without exercising
such Warrants and, in fact, are never required to exercise same.
The Company understands and will agree that if, at any time
within the period commencing one year after the Effective Date and ending seven
years after the Effective Date of the Company's Registration Statement, it
should file a Registration Statement with the Securities and Exchange Commission
pursuant to the Securities Act, regardless of whether some of the holders of the
Underwriters' Warrants and Underlying Securities shall have theretofore availed
themselves of the right provided above, the Company, at its own expense, will
offer to said holders the opportunity to register the Underwriters' Warrants and
Underlying Securities. This paragraph is not applicable to a Registration
Statement filed by the Company with the SEC on Form S-8 or any other
inappropriate form.
In addition to the rights above provided, the Company will
cooperate with the then holders of the Underwriters' Warrants and Underlying
Securities in preparing and signing a Registration Statement, on one occasion
only in addition to the Registration Statements discussed above, required in
order to sell or transfer the aforesaid Underwriters' Warrants and underlying
securities and will supply all information required therefor, but such
additional Registration Statement shall be at the then holders' cost and expense
unless the Company elects to register additional shares of the Company's Common
Stock in which case the cost and expense of such Registration Statement will be
prorated between the Company and the holders of the Underwriters' Warrants and
underlying securities according to the aggregate sales price of the securities
being issued. The holders of the Underwriters' Warrants may include such
Warrants in any such filing without exercising the Underwriters' Warrants, and
in fact, are never required to exercise same. The Company can, at any time for
any reason, withdraw any such registration except in connection with a
Registration Statement filed pursuant to the Company's demand Registration
Statement."
10. Whenever, pursuant to Section 9 hereof, a registration statement
relating to the Underwriter's Warrant or Underlying Securities is filed under
the Act, the Company agrees to indemnify and hold harmless the holder of this
Warrant, or of securities
6
issuable or issued upon the exercise hereof, from and against any claims and
liabilities arising out of or based upon any untrue statement of a material
fact, or omission to state a material fact required to be stated, in any such
registration statement or prospectus, except insofar as such claims or
liabilities are caused by any such untrue statement or omission based on
information furnished in writing to the Company by such holder, or by any other
such holder affiliated with the holder who seeks indemnification, as to which
the holder hereof, by acceptance hereof, agrees to indemnify and hold harmless
the Company, in the same manner as set forth herein.
11. If this Warrant, or any of the securities issuable pursuant hereto,
require qualification or registration with, or approval of, any governmental
official or authority (other than registration under the Act, or any similar
Federal statute at the time in force), before such shares may be issued on the
exercise hereof, the Company, at its expense, will take all requisite action in
connection with such qualification, and will use its best efforts to cause such
securities and/or this Warrant to be duly registered or approved, as may be
required.
12. This Warrant is exchangeable, upon its surrender by the registered
holder at such office or agency of the Company as may be designated by the
Company, for new Underwriter's Warrants of like tenor, representing, in the
aggregate, the right to subscribe for and purchase the number of Units or Common
Shares as the case may be that may be subscribed for and purchased hereunder,
each of such new Underwriter's Warrants to represent the right to subscribe for
and purchase such number of Units or Common Shares as the case may be as shall
be designated by the registered holder at the time of such surrender. Upon
receipt of evidence satisfactory to the Company of the loss, theft, destruction
or mutilation of this Warrant, and, in the case of any such loss, theft or
destruction, upon delivery of a bond of indemnity satisfactory to the Company,
or in the case of such mutilation, upon surrender or cancellation of this
Warrant, the Company will issue to the registered holder a new Underwriter's
Warrant of like tenor, in lieu of this Warrant, representing the right to
subscribe for and purchase the number of Units or Common Shares as the case may
be that may be subscribed for and purchased hereunder. Nothing herein is
intended to authorize the transfer of this Warrant except as permitted under
Section 8.
13. Every holder hereof, by accepting the same, agrees with any subsequent
holder hereof and with the Company that this Warrant and all rights hereunder
are issued and shall be held subject to all of the terms, conditions,
limitations and provisions set forth in this Warrant, and further agrees that
the Company and its transfer agent may deem and treat the registered holder of
this Warrant as the absolute owner hereof for all purposes and shall not be
affected by any notice to the contrary.
14. All notices required hereunder shall be given by first-class mail,
postage prepaid; if given by the holder hereof,
7
addressed to the Company at 320 Washington Street, Mt. Vernon, New York 10553;
or such other address as the Company may designate in writing to the holder
hereof; and if given by the Company, addressed to the holder at the address of
the holder shown on the books of the Company.
15. The Company will not merge or consolidate with or into any other
corporation, or sell or otherwise transfer its property assets and business
substantially as an entirety to another corporation, unless the corporation
resulting from such merger or consolidation (if not the Company), or such
transferee corporation, as the case may be, shall expressly assume, by
supplemental agreement satisfactory in form to the Underwriter, the due and
punctual performance and observance of each and every covenant and condition of
this Warrant to be performed and observed by the Company.
16. The validity, construction and enforcement of this Warrant shall be
governed by the laws of the State of New York without giving effect to the
conflict of laws provisions thereof and jurisdiction is hereby vested in the
Courts of said State in the event of the institution of any legal action under
this Warrant.
IN WITNESS WHEREOF, DECOR GROUP, INC. has caused this Warrant to be signed
by its duly authorized officers under its corporate seal, to be dated
_____________, 1996.
DECOR GROUP, INC.
By:____________________________
Attest:
_________________________
(Corporate Seal)
8
PURCHASE FORM
To Be Executed
Upon Exercise of Warrant
The undersigned hereby exercises the right to purchase __________ Common Shares
and __________ Underwriter's Class A Warrants evidenced by the within Warrant,
according to the terms and conditions thereof, and herewith makes payment of the
purchase price in full. The undersigned requests that certificates for such
shares and warrants shall be issued in the name set forth below.
Dated: ,19
_________________________________
Signature
_________________________________
Print Name of Signatory
_________________________________
Name to whom certificates are to
be issued if different from above
Address:_________________________
_________________________
Social Security No.______________
or other identifying number
If said number of shares and warrants shall not be all the shares and
warrants purchasable under the within Warrant, the undersigned requests that a
new Warrant for the unexercised portion shall be registered in the name of:
_________________________
(Please Print)
Address:_________________________
_________________________
Social Security No.______________
or other identifying number
_________________________________
Signature
9
FORM OF ASSIGNMENT
FOR VALUE RECEIVED _________________________________ , hereby
sells assigns and transfers to ____________________ , Soc. Sec. No.
[_____________] the within Warrant, together with all rights, title
and interest therein, and does hereby irrevocably constitute and
appoint ____________________ attorney to transfer such Warrant on
the register of the within named Company, with full power of
substitution.
_________________________________
Signature
Dated: ____________, 19__
Signature Guaranteed:
_________________________________
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