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, 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).
REPRESENTATIVE'S STOCK WARRANT
WARRANT NO. 1
To Subscribe for and Purchase Shares of
DECOR GROUP, INC.
(Transferability Restricted as Provided in Paragraph 8 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 shares of Common Stock (the "Shares") of the
Company, as hereinafter defined, at the "Purchase 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 Common Stock
Purchase Warrants (herein called the "Warrants"), identical in all
respects except as to the names of the holders thereof and the
number of Shares purchasable thereunder, representing on the
original issue thereof rights to purchase up to 50,000 Shares.
1. As used herein:
(a) "Common Stock" or "Common Shares" shall initially
refer to the Company's Common Stock, $.0001 par value, per share as
more fully set forth in Section 5 hereof.
(b) "Purchase Price" shall be $9.90 per share (165% of
the public offering price per share) which is subject to adjustment
pursuant to Section 4 hereof.
(c) "Underwriter" or "Representative" shall refer to VTR
CAPITAL, INC.
(d) "Underwriting Agreement" shall refer to the
Underwriting Agreement dated as of _____________, 1996 between the
Company and the Underwriter.
(e) "Warrants", Underwriters' or "Representative's
Stock Warrants" shall refer to Warrants to purchase an aggregate of up
to 50,000 Shares issued to the Underwriter or its designees by
the Company pursuant to the Underwriting Agreement, as such may be
adjusted from time to time pursuant to the terms of Section 4 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 Shares.
(f) "Underlying Securities" shall refer to and include
the Common Shares issuable or issued upon exercise of the
Representative's Stock Warrants.
(g) "Holders" shall mean the registered holder of such
Representative's Stock Warrants or any issued Underlying
Securities.
(h) "Effective Date" shall refer to the effective date
of the Form SB-2 Registration Statement File No. 333-5553.
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
until _____________, 2001 (the "Expiration Date"), by the presentation
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 Purchase Price for
such Shares of Common Stock. The Company agrees 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 Shares 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 Representative's Stock Warrant evidencing the rights of
the Holder hereof to purchase the balance of the Shares 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.
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 Representative's Stock Warrants of
different denominations entitling the Holder thereof to purchase in
the aggregate the same number of Shares of Common Stock as are
purchasable hereunder; and (ii) this Warrant may be divided or
combined with other Representative's Stock Warrants which carry
the same rights, in either case, upon presentation hereof at the
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aforesaid office of the Company together with a written notice, signed
by the Holder hereof, specifying the names and denominations in which
new Representative's Stock Warrants are to be issued, and the payment
of any transfer tax due in connection therewith.
4. Subject and pursuant to the provisions of this Section 4,
the Purchase Price and number of Common Shares subject to this Warrant
shall be subject to adjustment from time to time as set forth
hereinafter.
(A) If the Company shall, at any time, subdivide its
outstanding Common Shares by recapitalization, reclassification, split
up thereof, or other such issuance without additional consideration,
the appropriate Purchase Price immediately prior to such subdivision
shall be proportionately decreased, and if the Company shall at any
time combine the outstanding Common Shares by recapitalization,
reclassification or combination thereof, the Purchase Price
immediately prior to such combination shall be proportionately
increased. Any such adjustment to the Purchase Price or the
corresponding adjustment to the Purchase Price shall become effective
at the close of business on the record date for such subdivision or
combination. No adjustment to the Purchase Price and the number of
shares issuable upon exercise of this Warrant shall be required if
such adjustment provides the holders of this Warrant with
disproportionate rights, privileges and economic benefits which are
not provided to the public shareholders.
(B) In the event that prior to the Representative's
Stock Warrant's expiration date the Company adopts a resolution to
merge, consolidate, or sell percentages in all of its assets, each
Warrant holder upon the exercise of his Representative's Stock Warrant
will be entitled to receive the same treatment as a holder of any
other share of Common Stock. In the event the Company adopts a
resolution for the liquidation, dissolution, or winding up of the
Company's business, the Company will give written notice of such
adoption of a resolution to the registered holders of the
Representative's Stock Warrants. Thereupon all liquidation and
dissolution rights under this Warrant will terminate at the end of
thirty (30) days from the date of the notice to the extent not
exercised within those thirty (30) days.
(C) If any capital reorganization or
reclassification of the capital stock of the Company or consolidation
or merger of the Company with another corporation, shall be effected
in such a way that holders of Common Stock shall be entitled to
receive stock, securities, cash or assets with respect to or in
exchange for Common Stock, then, as a condition of such
reorganization, reclassification, consolidation, merger or sale, the
Company or such successor or purchasing corporation, as the case may
be, shall execute with the Warrant Agent a supplemental Warrant
Agreement providing that each registered holder of a Representative's
Stock Warrant shall have the right thereafter and until the expiration
date to exercise such Warrant for the kind and amount of stock,
securities, cash or assets receivable upon such reorganization,
reclassification, consolidation, merger or sale by a holder of the
number of shares of Common Stock for the purchase of which such
Warrant might have been exercised immediately prior to such
reorganization,
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reclassification, consolidation, merger or sale,
subject to adjustments which shall be as nearly equivalent as may be
practicable to the adjustments provided for in this Section 4.
(D) In case at any time the Company shall declare a
dividend or make any other distribution upon any stock of the Company
payable in Common Stock, then such Common Stock issuable in payment of
such dividend or distribution shall be deemed to have been issued or
sold without consideration.
(E) Upon any adjustment of the appropriate
respective Purchase Price as hereinabove provided, the number of
Common Shares issuable upon exercise of each class of Warrant shall be
changed to the number of shares determined by dividing (i) the
aggregate Purchase Price payable for the purchase of all shares
issuable upon exercise of that class of Warrant immediately prior to
such adjustment by (ii) the appropriate Purchase Price per share in
effect immediately after such adjustment.
(F) No adjustment in the Purchase Price shall be
required under Section 4 hereof unless such adjustment would require
an increase or decrease in such price of at least 1% provided,
however, that any adjustments which by reason of the foregoing are not
required at the time to be made shall be carried forward and taken
into account and included in determining the amount of any subsequent
adjustment, and provided further, however, that in case the Company
shall at any time subdivide or combine the outstanding Common Shares
as a dividend, said amount of 1% per share shall forthwith be
proportionately increased in the case of a combination or decreased in
the case of a subdivision or stock dividend so as to appropriately
reflect the same.
(G) On the effective date of any new Purchase Price
the number of shares as to which this Warrant may be exercised shall
be increased or decreased so that the total sum payable to the Company
on the exercise of this Warrant shall remain constant.
(H) The form of Representative's Stock Warrant need
not be changed because of any change pursuant to this Article, and
Representative's Stock Warrants issued after such change may state the
Purchase Price and the same number of shares as is stated in the
Representative's Stock Warrants initially issued pursuant to this
Warrant. However, the Company may at any time in its sole discretion
(which shall be conclusive) make any change in the form of
Representative's Stock Warrant that the Company may deem appropriate
and that does not affect the substance thereof, and any
Representative's Stock Warrant thereafter issued or countersigned,
whether in exchange or substitution for an outstanding Warrant or
otherwise, may be in the form as so changed.
5. For the purposes of this Warrant, the terms "Common
Shares" or "Common Stock" shall mean (i) the class of stock
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designated as the Common Stock, $.0001 par value, 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 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 the Representative's Stock 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 at its expense will
obtain the listing thereof on all national securities exchanges on
which the Common Shares 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, 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 will, upon issuance
be validly issued, fully paid, nonassessable and free from all taxes,
liens and charges with respect to the issuance thereof.
(c) All original issue taxes payable in respect of
the issuance of Common Shares upon the exercise of the rights
represented by this Warrant 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 Representative's Stock
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
5
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 New York Corporation Law.
8. This Warrant and the Underlying Securities shall not be
sold, transferred, assigned or hypothecated for a period of twelve
(12) months from the Effective Date, except to officers or partners of
the Representative, 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 and the Underlying Securities 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.
Certain registration rights are incorporated by reference from the
Underwriting Agreement as if set forth herein in their entirety.
10. The Company agrees to indemnify and hold harmless the
holder of this Warrant, or of securities issuable or issued upon
the exercise hereof, from and against any claims and liabilities
caused by any untrue statement of a material fact, or omission to
6
state a material fact required to be stated, in any such registration
statement, prospectus, notification or offering circular under
Regulation A, 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.
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 securities 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 Representative's Stock Warrants of
like tenor, representing, in the aggregate, the right to subscribe for
and purchase the number of Common Shares that may be subscribed for
and purchased hereunder, each of such new Representative's Stock
Warrants to represent the right to subscribe for and purchase such
number of Common Shares 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 Representative's Stock Warrant of like tenor, in lieu of
this Warrant, representing the right to subscribe for and purchase the
number of Common Shares that may be subscribed for and purchased
hereunder. Nothing herein is intended to authorize the transfer of
this Warrant except as permitted under Paragraph 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,
addressed to the Company at 320 Washington Street, Mount 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,
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addressed to the holder at the address of the holder shown on the books of the
Company.
15. The validity, construction and enforcement of this
Warrant shall be governed by the laws of the State of New York 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 as of ________________, 1996.
DECOR GROUP, INC.
By:_________________________
Attest:
____________________________
(Corporate Seal)
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PURCHASE FORM
To Be Executed
Upon Exercise of Warrant
The undersigned hereby exercises the right to purchase _________________
Common Shares 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 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 shall not be all the shares
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
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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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