EXHIBIT A
The securities represented by this Certificate (including the Warrant
Shares described below) have not been registered under the Securities Act of
1933, as amended (the "Securities Act"). These securities have been acquired for
investment purposes only and not with a view to distribution, and may not be
sold, transferred, pledged or hypothecated in the absence of an effective
registration statement for such securities under the Securities Act or unless in
the opinion of counsel for the holder of this certificate such transaction is
exempt from the registration requirements of the Securities Act.
Emerging Vision, Inc.
WARRANT CERTIFICATE AND AGREEMENT
Dated as of April 26, 2001
Warrants to Purchase Common Stock
Emerging Vision, Inc., a New York corporation (the "Company"), hereby
certifies that, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, Balfour Investors Incorporated, a New York
corporation ("Balfour"), or registered assigns, is the registered owner of
425,063 warrants (each, a "Warrant" and, collectively, the "Warrants"), each of
which will entitle the registered owner thereof at any time after the applicable
Vesting Date to purchase one share, as adjusted from time to time as provided
herein, of Common Stock (each such purchased share being a "Warrant Share" and
all such shares being the "Warrant Shares"), at the exercise price of $ 0.01 per
share (as adjusted from time to time as provided herein, the "Exercise Price")
on or before January 26, 2008 (the "Expiration Date"), all subject to the
following terms and conditions (including the termination provisions set forth
in Section 16):
SECTION 1. Certain Definitions. As used in this Warrant Certificate, the
following terms have the respective meanings set forth below:
"Affiliate" of any Person or entity means any other Person or entity
directly or indirectly controlling, controlled by or under direct or indirect
common control with such Person or entity, any member of the immediate family of
such Person, or any officer, director, employee, agent or authorized
representative of such entity.
"Common Stock" shall mean shares of the common stock of the Company, par
value $.01 per share.
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"Date of Exercise" of any Warrant shall mean the date on which the Company
shall have received both: (i) the original of this Warrant Certificate, with the
Form of Election to Purchase attached hereto appropriately filled in and duly
signed; and (ii) payment of the Exercise Price in cash for such Warrant.
"Divisions" shall mean the Sterling Optical, Insight Laser and Ambulatory
Surgery Center divisions/subsidiaries of the Company.
"EBITDA" shall mean, with respect to any Vesting Year, consolidated
earnings before interest, taxes, depreciation and amortization of the Divisions
for such Vesting Year, determined in accordance with GAAP, consistently applied
with respect to such Vesting Year. EBITDA shall exclude (i) reversals of
reserves (income) established in connection with the Company's discontinued
operations; (ii) reversals of reserves (income) established in connection with
allowances for doubtful accounts; (iii) non-cash charges related to equity
securities (i.e. warrants and options); and (iv) non-cash gains (income) from
sales of Company assets.
"Form of Assignment" shall mean the form of Assignment of Warrant attached
to this Warrant Certificate.
"Form of Election to Purchase" shall mean the form of Election to Purchase
attached to this Warrant Certificate.
"GAAP" shall mean generally accepted accounting principles of the United
States set forth in the Opinions of the Accounting Principles Board of the
American Institute of Certified Public Accountants and in statements by the
Financial Accounting Standards Board or in such other statement by such other
entity as may be approved by a significant segment of the accounting profession;
and the requisite that such principles be applied on a consistent basis shall
mean that the accounting principles observed in a current period are comparable
in all material respects to those applied in a preceding period.
"Person" shall mean an individual, a partnership, a joint venture, a
corporation, a limited liability company, a trust, an unincorporated
organization or a government or any department or agency thereof or any other
entity.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Vesting Date" shall have the meaning set forth in Section 4(a).
"Vesting Year" shall mean each of the years ending December 31, 2001,
December 31, 2002, December 31, 2003 and December 31, 2004.
"Warrant Certificate" shall mean this Warrant Certificate and Agreement
including all exhibits and attachments.
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SECTION 2. Registration. The Company shall register each Warrant upon
records to be maintained by the Company for that purpose in the name of the
record holder of such Warrant from time to time. Subject to the provisions of
Section 3 hereof, the Company may deem and treat the registered holder of each
Warrant as the absolute owner thereof for the purpose of any exercise thereof,
any distribution to the holder thereof and for all other purposes.
SECTION 3. Transfers and Exchanges of Warrants and Warrant Shares.
(a) Registration of Transfers and Exchanges. Subject to: (i) the provisions
of the last sentence of Subsection 3(c) below; and (ii) the Company's prior
receipt of an opinion of counsel (in form and substance reasonably satisfactory
to it) indicating that such transfer is permitted under the Securities Act
and/or any other applicable state securities laws, the Company shall register
the transfer of any Warrants upon records to be maintained by the Company for
that purpose upon surrender of the original of this Warrant Certificate, with
the Form of Assignment attached hereto duly filled in and signed, to the Company
at the office specified in or pursuant to Section 4(d). Upon any such
registration of transfer, a new Warrant Certificate, in substantially the form
of this Warrant Certificate, evidencing the Warrants so transferred shall be
issued to the transferee and a new Warrant Certificate, in similar form,
evidencing the remaining Warrants not so transferred, if any, shall be issued to
the then registered holder thereof.
(b) Warrants Exchangeable for Different Denominations. This Warrant
Certificate is exchangeable, upon the surrender hereof by the holder hereof at
the office of the Company specified in or pursuant to Section 4(d), for one or
more new Warrant Certificates, each in substantially the form of this Warrant
Certificate, evidencing in the aggregate the right to purchase the number of
Warrant Shares which may then be purchased hereunder, each of such new Warrant
Certificates to be dated the date of such exchange and to represent the right to
purchase such number of Warrant Shares as shall be designated by said holder
hereof at the time of such surrender.
(c) Transferability. Subject to the first sentence of Section 3(a) above,
the last sentence of this Section 3(c) and to restrictions contained in the
Securities Act and any applicable state securities or "blue sky" laws, each
Warrant represented by this Warrant Certificate is transferrable, in whole or in
part, at the option of the holder hereof when this Warrant Certificate is
surrendered, together with the Form of Assignment attached hereto duly filled in
and signed, at the office of the Company specified in or pursuant to Section
4(d). Upon such surrender the Company shall issue new Warrant Certificate(s)
pursuant to Section 3(a). Notwithstanding the foregoing, no Warrant may be
transferred by ▇▇▇▇▇▇▇, other than to its Affiliates, each of whom will be
thereafter restricted (prohibited) from further transferring the same.
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SECTION 4. Vesting, Duration and Exercise of Warrants.
(a) Vesting Requirements. Notwithstanding anything to the contrary
contained herein, Warrants may be exercised only after they have vested. The
Warrants shall vest as follows:
(i) Warrants (the "Tranche A Warrants") to purchase 139,573 of Common Stock
shall vest the first time the Divisions generate EBITDA of at least $1,000,000
for a Vesting Year;
(ii) Warrants (the "Tranche B Warrants") to purchase 139,573 shares of
Common Stock shall vest the first time the Divisions generate EBITDA of at least
$2,000,000 for a Vesting Year;
(iii) Warrants (the "Tranche C Warrants") to purchase 145,917 shares of
Common Stock shall vest the first time the Divisions have generated EBITDA of at
least $3,000,000 for a Vesting Year; and
(iv) Any Warrants which have failed to vest as of the end of the Vesting
Year ending December 31, 2004 shall be and become void and of no value.
Warrants which vest as a result of achieving the applicable EBITDA target
for a given Vesting Year shall be deemed to have vested as of the date of the
Company's filing, with the Securities and Exchange Commission, of its Annual
Report on Form 10-K for the Vesting Year in question (the "Vesting Date"). For
the avoidance of doubt, each Tranche of Warrants may only vest one time and the
aggregate number of Warrants hereunder shall not exceed the number set forth in
the Preamble of this Warrant Certificate.
(b) Exercise. Vested Warrants shall be exercisable by the registered holder
thereof on any business day before 5:00 P.M., Eastern Standard Time, on the
Expiration Date. At 5:00 P.M., Eastern Standard Time, on the Expiration Date,
each Warrant not exercised prior thereto shall be and become void and of no
value.
(c) Subject to the provisions of this Warrant Certificate, including the
vesting requirements of Section 4(a) and the adjustments to the number of Warran
Shares issuable on the exercise of each Warrant and to the Exercise Price
pursuant to Section 8, the holder of each Warrant on or prior to the Expiration
Date shall have the right to purchase from the Company (and the Company shall be
obligated to issue and sell to such holder of a Warrant) at the Exercise Price
one fully paid Warrant Share which is non-assessable.
(d) Upon surrender of this Warrant Certificate, with the Form of Election
to Purchase duly filled in and signed, to the Company at its office at ▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, (to the attention of each of
its General Counsel and CFO) or at such other address as the Company may specify
in writing to the then registered holder of the Warrants, and payment of the
Exercise Price multiplied by the number of Warrant Shares then issuable upon
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exercise of the Warrants being exercised in lawful money of the United
States of America, all as specified by the holder of this Warrant Certificate in
the Form of Election to Purchase, the Company shall promptly issue and cause to
be delivered to or upon the written order of the registered holder of such
Warrants, and in such name or names as such registered holder may designate, a
certificate for the Warrant Shares issued upon such exercise of such Warrants.
Any person so designated to be named therein shall be deemed to have become
holder of record of such Warrant Shares as of the Date of Exercise of such
Warrants.
(e) The Warrants evidenced by this Warrant Certificate shall be
exercisable, either as an entirety or for a portion thereof, from time to time
after the applicable Vesting Date, for only the number of Warrants evidenced by
this Warrant Certificate. If less than all of the Warrants evidenced by this
Warrant Certificate are exercised at any time, the Company shall issue, at its
expense, a new Warrant Certificate, in substantially the form of this Warrant
Certificate, for the remaining number of Warrants evidenced by this Warrant
Certificate.
SECTION 5. Payment of Taxes. The Company will pay all transfer and stock
issuance taxes attributable to the initial issuance, only, of the Warrants and
the Warrant Shares or the initial issuance or delivery of certificates for
Warrant Shares or other securities in respect of the Warrant Shares upon the
exercise of Warrants, provided that the Company shall not be obligated to pay
any taxes due or payable as a result of the transfer by the holder of any
Warrants or Warrant Shares.
SECTION 6. Mutilated or Missing Warrant Certificate. If this Warrant
Certificate shall be mutilated, lost, stolen or destroyed, upon request by the
registered holder of the Warrants the Company will issue, in exchange for and
upon cancellation of the mutilated Warrant Certificate, or in substitution for
the lost, stolen or destroyed Warrant Certificate, a new Warrant Certificate, in
substantially the form of this Warrant Certificate, of like tenor and
representing the equivalent number of Warrants, but, in the case of loss, theft
or destruction, only upon receipt of evidence satisfactory to the Company of
such loss, theft or destruction of this Warrant Certificate and, if requested by
the Company, indemnity also satisfactory to it.
SECTION 7. Reservation and Issuance of Warrant Shares. (a) The Company will
at all times have authorized, and reserve and keep available, free from
preemptive rights, for the purpose of enabling it to satisfy any obligation to
issue Warrant Shares upon the exercise of the Warrants, the number of shares of
Warrant Shares deliverable upon exercise of the Warrants. The Company will not,
however, be required to cause any of the Warrant Shares to be listed (upon
issuance or notice of issuance) on any stock exchanges.
(b) Before taking any action which could cause an adjustment pursuant to
Section 8 reducing the Exercise Price below the then par value (if any) of the
Warrant Shares, the Company will use its reasonable, good faith efforts to take
any corporate action which may be necessary in order that the Company may
validly and legally issue at the Exercise Price, as so adjusted, Warrant Shares
that are fully paid and non-assessable.
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(c) The Company covenants that all Warrant Shares will, upon issuance in
accordance with the terms of this Warrant Certificate, be (i) duly authorized,
fully paid and nonassessable, (ii) free from all taxes with respect to the
issuance thereof and from all liens, charges and security interests created by
the Company, and (iii) subject only to the restrictions on transfer contained in
the Securities Act, applicable state securities or "blue sky" laws and Section
3(c), freely transferrable.
SECTION 8. Adjustments of Exercise Price and Number of Warrant Shares
Deliverable.
8.1 The number of Warrant Shares purchaseable upon the exercise of this
Warrant and the Exercise Price with respect to such Warrant Shares shall be
subject to adjustment as follows:
(a) In case the Company shall: (i) declare a dividend or make a
distribution on its Common Stock payable in shares of its capital stock; (ii)
subdivide its outstanding shares of Common Stock through stock split or
otherwise; or (iii) combine its outstanding shares of Common Stock into a
smaller number of shares of Common Stock, the number and/or nature of Warrant
Shares purchasable upon exercise of this Warrant immediately prior thereto shall
be adjusted so that the holder of this Warrant shall be entitled to receive the
kind and number of Warrant Shares or other securities of the Company which it
would have owned or have been entitled to receive after the happening of any of
the events described above, had this Warrant been exercised immediately prior to
the happening of such event or any record date with respect thereto. An
adjustment made pursuant to this paragraph (a) shall become effective
retroactively as of the record date of such event.
(b) In case of any reclassification, capital reorganization or change in
the Common Stock (other than as a result of a subdivision, combination or stock
dividend provided for in Section 8.1(a) above), then, as a condition of such
reclassification, reorganization or change, lawful provision shall be made, and
duly executed documents evidencing the same from the Company or its successor
shall be delivered to the holder, so that the holder shall have the right, at
any time prior to the Expiration Date of the Warrants, to purchase, at a total
price equal to that payable upon the exercise of this Warrant Certificate, the
kind and amount of shares of stock and other securities and property receivable
in connection with such reclassification, reorganization or change by a holder
of the same number of shares of Common Stock as were purchasable by the holder
immediately prior to such reclassification, reorganization or change. In any
such case, appropriate provisions shall be made with respect to the rights and
interests of the holder so that the provisions hereof shall thereafter be
applicable with respect to any shares of stock or other securities and property
deliverable upon the exercise hereof, and appropriate adjustments shall be made
to the Exercise Price per share payable hereunder, provided the aggregate
purchase price shall remain the same. Any adjustment made pursuant to this
paragraph (b) shall become effective retroactively as of the record date of such
event.
(c) Whenever the number of Warrant Shares purchasable upon the exercise of
this Warrant is adjusted, as provided in this Section 8.1, the Exercise Price
with respect to the Warrant Shares shall be adjusted by multiplying such
Exercise Price immediately prior to such adjustment by a fraction, the numerator
of which shall be the number of Warrant Shares purchasable upon the
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exercise of this Warrant immediately prior to such adjustment, and the
denominator of which shall be the number of Warrant Shares so purchasable
immediately thereafter.
(d) When any adjustment is required to be made in the number or kind of
shares purchasable upon exercise of this Warrant, or in the Exercise Price, the
Company shall promptly notify the holder of such event and of the number of
shares of Common Stock or other securities or property thereafter purchasable
upon exercise of this Warrant.
8.2 No adjustment in the number of Warrant Shares purchasable under this
Warrant, or in the Exercise Price with respect to the Warrant Shares, shall be
required unless such adjustment would require an increase or decrease of at
least 1% in the number of Warrant Shares issuable upon the exercise of this
Warrant, or in the Exercise Price thereof; provided, however, that any
adjustments which, by reason of this Section 8.2, are not required to be made,
shall be carried forward and taken into account in any subsequent adjustment.
All final results of adjustments to the number of Warrant Shares and the
Exercise Price thereof shall be rounded to the nearest one thousandth of a share
or the nearest cent, as the case may be.
SECTION 9. No Stock Rights. No holder of this Warrant Certificate, as such,
shall be entitled to vote or be deemed the holder of Common Stock or any other
securities of the Company which may at any time be issuable on the exercise
hereof, nor shall anything contained herein be construed to confer upon the
holder of this Warrant Certificate, as such, the rights of a stockholder of the
Company or the right to vote for the election of directors or upon any matter
submitted to stockholders at any meeting thereof, or give or withhold consent to
any corporate action or to receive notice of meetings or other actions affecting
stockholders (except as provided herein), or to receive dividends or
subscription rights or otherwise, until the Date of Exercise of any Warrants
shall have occurred.
SECTION 10. Fractional Shares. The Company shall not be required to issue
fractions of shares of Common Stock upon exercise of Warrants or to distribute
certificates which evidence fractional shares of Common Stock. In lieu of
fractional shares of Common Stock, the Company shall pay to the then holder of
this Warrant Certificate (as of the Date of Exercise) an amount in cash equal to
the same fraction of the fair market value of the shares of Common Stock
calculated with respect to such Date of Exercise.
SECTION 11. Notices. All notices, requests, demands and other
communications relating to this Warrant Certificate shall be in writing, and
shall be forwarded by first class mail, return receipt requested, postage
prepaid, or by personal delivery (including deliveries by express, overnight
courier service) addressed: (a) if to the registered owner hereof, to it at the
address furnished by the registered owner to the Company; and (b) if to the
Company, to it at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
Attention: Secretary of the Company (with a copy to be simultaneously forwarded
to the attention of the Company's General Counsel) or to such other address as
any party shall notify the other party in writing, and shall be effective, in
the case of written notice by mail, three days after placement into the mails
(first class, postage prepaid), and in the case of personal delivery, on the
same day as receipt is confirmed.
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SECTION 12. Binding Effect. This Warrant Certificate shall be binding upon
and inure to the sole and exclusive benefit of the Company, its successors and
assigns, the registered holder or holders from time to time of the Warrants and
the Warrant Shares.
SECTION 13. Survival of Rights and Duties. This Warrant Certificate shall
terminate and be of no further force and effect on the earlier of 5:00 P.M.,
Eastern Standard Time, on the Expiration Date or the date on which all of the
Warrants have been exercised, except that the provisions of Section 3 shall
continue in full force and effect after such termination date.
SECTION 14. Governing Law. This Warrant Certificate shall be construed in
accordance with and governed by the internal laws of the State of New York
(i.e., without regard to its conflicts of law rules).
SECTION 15. Counterparts. This Warrant Certificate may be executed in two
or more counterparts which together shall constitute the same instrument.
[The remainder of this page has been intentionally left blank.]
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IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to be
executed by its officer thereunto duly authorized as of the date hereof.
EMERGING VISION, INC.
a New York corporation
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇
--------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇
Senior Vice President and
Chief Financial Officer
Accepted and agreed to this 2nd day of July, 2001.
BALFOUR INVESTORS INCORPORATED
By: /s/ ▇▇▇ ▇▇▇▇▇▇▇▇▇
---------------------
Name: ▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: President
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FORM OF ELECTION TO PURCHASE
(To Be Executed by the holder of Warrants if such holder Desires to
Exercise Warrants Evidenced by the Foregoing Warrant Certificate)
To Emerging Vision, Inc.:
The undersigned hereby irrevocably elects to exercise _____________
Warrants evidenced by the foregoing Warrant Certificate for, and to purchase
thereunder, ___________________ full shares of Common Stock issuable upon
exercise of said Warrants, hereby delivers to the Company a check, in the amount
of $_________ (as provided for in the foregoing Warrant Certificate) and any
applicable taxes payable by the undersigned pursuant to such Warrant
Certificate.
The undersigned requests that certificates for such shares be issued in the
name of
PLEASE INSERT SOCIAL SECURITY
OR TAX IDENTIFICATION NUMBER
------------------------------- ---------------------------
(Please print name and address) ---------------------------
-------------------------------------------------------------------------------
If said number of Warrants shall not be all the Warrants evidenced by the
foregoing Warrant Certificate, the undersigned requests that a new Warrant
Certificate evidencing the Warrants not so exercised be issued in the name of
and delivered to
-----------------------------------------------------------------
(Please print name and address)
-----------------------------------------------------------------
Name of holder of Warrant (Print): -------------------------------------
(By:) -------------------------------------
(Title:) -------------------------------------
Dated: , 20
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FORM OF ASSIGNMENT
FOR VALUE RECEIVED, ___________________________________ hereby sells,
assigns and transfers to each assignee set forth below all of the rights of the
undersigned in and to the number of Warrants (as defined in and evidenced by the
foregoing Warrant Certificate) set opposite the name of such assignee below and
in and to the foregoing Warrant Certificate with respect to said Warrants and
the shares of Common Stock issuable upon exercise of said Warrants:
Name of Assignee Address Number of Warrants
-------------------- ------------------------ --------------------
If the total of said Warrants shall not be all the Warrants evidenced by
the foregoing Warrant Certificate, the undersigned requests that a new Warrant
Certificate evidencing the Warrants not so assigned be issued in the name of and
delivered to the undersigned.
Name of
holder of Warrant (Print):
-----------------------
Dated: , 20
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EXHIBIT B
---------
THE SHARES OF COMMON STOCK REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER, AND ARE RESTRICTED SECURITIES WITHIN THE MEANING OF, THE
SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, PLEDGED, TRANSFERRED OR
OTHERWISE DISPOSED OF EXCEPT IN ACCORDANCE WITH SUCH ACT AND THE RULES AND
REGULATIONS PROMULGATED THEREUNDER AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS. THE ISSUER OF THESE SECURITIES WILL NOT TRANSFER SUCH
SECURITIES EXCEPT UPON RECEIPT OF EVIDENCE SATISFACTORY TO THE ISSUER THAT THE
REGISTRATION PROVISIONS OF SUCH ACT HAVE BEEN COMPLIED WITH OR AN OPINION OF
COUNSEL TO THE EFFECT THAT SUCH REGISTRATION IS NOT REQUIRED AND THAT SUCH
TRANSFER WILL NOT VIOLATE ANY APPLICABLE FEDERAL OR STATE SECURITIES LAWS.
EXHIBIT C
PIGGY-BACK REGISTRATION RIGHTS AGREEMENT
This Piggy-Back Registration Rights Agreement (the "Agreement"), dated as
of June 11, 2001, is entered into by and between EMERGING VISION, INC., a New
York corporation (the "Company") and BALFOUR INVESTORS INCORPORATED, a New York
corporation (the "Investor").
RECITALS
A The Company is this day issuing to the Investor an aggregate of 209,359
shares (collectively, the "Shares") of the Company's Common Stock, par value
$.01 per share (the "Common Stock"); and
B. It is a condition to the Company's issuance of the Shares to the
Investor that the parties hereto enter into this Agreement.
NOW, THEREFORE, in consideration of the mutual promises and covenants
contained in this Agreement, the parties hereto do hereby agree as follows:
Section 1. Certain Definitions. As used in this Agreement, the following
terms shall have the following respective meanings:
1.1 "Commission" means the Securities and Exchange Commission, or any other
Federal agency at the time administering the Securities Act;
1.2 "Common Stock" means the Company's Common Stock, par value $.01 per
share;
1.3 "Exchange Act" means the Securities Exchange Act of 1934, as amended,
or any successor Federal statute, and the rules and regulations of the
Commission issued thereunder, as they each may, from time to time, be in effect;
1.4 "Qualified Secondary Public Offering" means the first underwritten
public offering hereafter consummated by the Company with respect to shares of
its Common Stock to be sold by the Company therein, all pursuant to an effective
registration under the Securities Act;
1.5 "Registrable Shares" means: (i) the Shares; and (ii) any other shares
of Common Stock of the Company issued in respect of the Shares described in
clause (i) above (because of stock splits, stock dividends, reclassifications,
recapitalizations, or similar events); provided, however, that shares of Common
Stock that are Registrable Shares shall cease to be Registrable Shares (x) upon
any sale thereof pursuant to a Registration Statement, Section 4(l) of
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the Securities Act or Rule 144 under the Securities Act, (y) when the
Investor is eligible to sell, transfer or otherwise convey all of such
Investor's Registrable Shares pursuant to Rule 144 under the Securities Act in
any 3 month period, or (z) upon any sale, in any manner, of any of the
Registrable Shares by the Investor, to any other person or entity;
1.6 "Registration Expenses" means the expenses described in Section 4
hereof;
1.7 "Registration Statement" means a registration statement on Form S-1
filed by the Company with the Commission for a Qualified Secondary Public
Offering of the Common Stock of the Company; and
1.8 "Securities Act" means the Securities Act of 1933, as amended, or any
successor Federal statute, and the rules and regulations of the Commission
issued thereunder, as they each may, from time to time, be in effect.
Section 2. Piggy-Back Registration.
2.1 Whenever the Company proposes to file (but without any obligation to do
so) a Registration Statement in connection with a Qualified Secondary Public
Offering of shares of its Common Stock, at any time and from time to time, it
will, prior to such filing, give written notice to the Investor of its intention
to do so and, upon the written request of the Investor given within 20 days
after the Company provides such notice, the Company shall use its reasonable
good faith efforts to cause all Registrable Shares (that the Company has been
requested to register by the Investor) to be registered under the Securities Act
to the extent necessary to permit their sale; provided that the Company shall
have the right to postpone or withdraw any registration effected pursuant to
this Section 2 without obligation to the Investor.
2.2 In connection with any Qualified Secondary Public Offering under this
Section 2, the Company shall not be required to include any Registrable Shares
in such underwriting unless the Investor accepts the terms of the underwriting
as agreed upon between the Company and the underwriter(s) selected by it, and
then only in such quantity as will not, in the good faith opinion of the
underwriter(s), jeopardize the success of the offering by the Company. If, in
the opinion of the managing underwriter, the registration of all, or part of,
the Registrable Shares that the Investor has requested to be included would
materially and adversely affect such public offering, then the Company shall be
required to include in the underwriting only that number of Registrable Shares,
if any, that the managing underwriter in good faith believes may be sold without
causing such adverse effect.
Section 3. Registration Procedures. If and whenever the Company is required
by the provisions of this Agreement to use its reasonable, good faith efforts to
effect the registration of any of the Registrable Shares under the Securities
Act, the Company shall:
3.1 include the Registrable Shares in the Registration Statement to be
prepared and filed with the Commission and use its reasonable good faith efforts
to cause that Registration
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Statement to become and remain effective for the earlier of 180 days or
until the completion of the distribution; provided, however, that the Company
shall have the right to postpone or withdraw any such registration, at any time,
without obligation to the Investor;
3.2 as soon as is reasonably possible, prepare and file with the Commission
any amendments and supplements to the Registration Statement and the prospectus
included in the Registration Statement as may be necessary to keep the
Registration Statement effective, and comply with the provisions of the
Securities Act with respect to the disposition of all securities covered by such
Registration Statement;
3.3 as soon as is reasonably possible, furnish to the Investor such
reasonable numbers of copies of the Registration Statement, each amendment and
supplement thereto, and the prospectus and preliminary prospectus (included as a
part thereof), in conformity with the requirements of the Securities Act;
3.4 as soon as is reasonably possible, use its reasonable, good faith
efforts to register or qualify the Registrable Shares covered by the
Registration Statement under the securities or Blue Sky laws of such states as
the Investor shall reasonably request; provided, however, that the Company shall
not be required, in connection with this Section 3.4, to qualify as a foreign
corporation or execute a general consent to service of process in any
jurisdiction;
3.5 enter into, with the managing underwriter(s) of such offering, and
perform its obligations under, the underwriting agreement (to be entered into in
connection therewith), in such form as shall be acceptable to the Company, in
its sole and absolute discretion, it being understood that the Investor shall
also be required to enter into and perform its obligations under such agreement;
3.6 notify the Investor (at any time when a prospectus relating thereto is
required to be delivered under the Securities Act) of the happening of any event
as a result of which the prospectus included in such Registration Statement, as
then in effect, includes an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances then
existing; and
3.7 if the Company has delivered preliminary or final prospectuses to the
Investor and, after having done so, the prospectus is amended to comply with the
requirements of the Securities Act, the Company shall promptly notify the
Investor and, if requested, the Investor shall immediately cease making offers
of Registrable Shares and return all prospectuses to the Company; provided,
however, that the Company shall thereafter provide the Investor with revised
prospectuses in substitution thereof.
Section 4. Allocation of Expenses. The Company will pay all Registration
Expenses (as defined below) of the registration required of it pursuant to this
Agreement . For purposes of this Section, the term "Registration Expenses" shall
mean all expenses incurred by the Company in
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complying with its registration obligations under this Agreement,
including, without limitation, all registration and filing fees, exchange
listing fees, printing expenses, fees and disbursements of counsel for the
Company, only, state Blue Sky fees and expenses, and the expense of any special
audits incident to or required by any such registration, but excluding
underwriting discounts, selling commissions and the fees and expenses of the
Investor's own counsel.
Section 5. Indemnification and Contribution. In the event of any
registration of any of the Registrable Shares under the Securities Act pursuant
to this Agreement, the Company will indemnify and hold harmless the Investor
(including any member, partner, officer or director of the Investor), each
underwriter of such Registrable Shares, and each other person, if any, who
controls the Investor or such underwriter within the meaning of the Securities
Act or the Exchange Act, against any losses, claims, damages or liabilities,
joint or several, to which the Investor, such underwriter or controlling person
may become subject under the Securities Act, the Exchange Act, state securities
or Blue Sky laws or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained in
any Registration Statement under which such Registrable Shares were registered
under the Securities Act, any preliminary prospectus or final prospectus
constituting a part of such Registration Statement, or any amendment or
supplement to such Registration Statement, or arise out of or are based upon the
omission or alleged omission to state a material fact required to be stated
therein or necessary to make the statements contained therein not misleading, or
any violation or alleged violation by the Company of the Securities Act, the
Exchange Act, any state securities law or any rule or regulation promulgated
under the Securities Act, the Exchange Act or any state securities laws in
connection with the offering covered by such Registration Statement; and the
Company will reimburse the Investor, such underwriter and each such controlling
person for any legal or any other expenses reasonably incurred by the Investor,
such underwriter or controlling person in connection with investigating or
defending any such loss, claim, damage, liability or action, promptly as such
expenses are incurred; provided, however, that the Company will not be liable in
any such case to the extent that any such loss, claim, damage or liability
arises out of or is based upon any untrue statement or omission made in such
Registration Statement, preliminary prospectus or prospectus, or any such
amendment or supplement thereto, in reliance upon and in conformity with
information furnished to the Company, in writing, by or on behalf of the
Investor, such underwriter or controlling person specifically for use in the
preparation thereof, or to the extent that any such loss, claim, damage or
liability arises out of the Investor's failure to deliver a copy of the
prospectus or any amendment or supplement thereto.
In the event of any registration of any of the Registrable Shares under the
Securities Act pursuant to this Agreement, the Investor will indemnify and hold
harmless the Company, each of its directors and officers, each underwriter and
each person, if any, who controls the Company or any such underwriter within the
meaning of the Securities Act or the Exchange Act, against any losses, claims,
damages or liabilities, joint or several, to which the Company, such directors
and officers, underwriter, or controlling person may become subject under the
Securities Act, Exchange Act, state securities or Blue Sky laws or otherwise,
insofar as
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such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue statement
of a material fact contained in any Registration Statement under which such
Registrable Shares were registered under the Securities Act, any preliminary
prospectus or final prospectus constituting a part of such Registration
Statement, or any amendment or supplement to the Registration Statement, or
arise out of or are based upon any omission or alleged omission to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading; and the Investor will reimburse the Company for any
legal or any other expenses reasonably incurred by the Company in connection
with investigating or defending any such loss, claim, damage, liability or
action, promptly as such expenses are incurred, if the statement or omission was
made in reliance upon and in conformity with information furnished in writing to
the Company by or on behalf of the Investor, specifically for use in connection
with the preparation of such Registration Statement, prospectus, amendment or
supplement.
Each party entitled to indemnification under this Section 5 (the
"Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnity may be sought, and shall
permit the Indemnifying Party to assume the defense of any such claim or any
litigation resulting therefrom; provided, that counsel for the Indemnifying
Party, who shall conduct the defense of such claim or litigation, shall be
approved by the Indemnified Party (whose approval shall not be unreasonably
withheld); and, provided, further, that the failure of any Indemnified Party to
give notice as provided herein shall not relieve the Indemnifying Party of its
obligations under this Agreement, except to the extent that the Indemnifying
Party's ability to defend against such claim or litigation is impaired as a
result of such failure to give notice. The Indemnified Party may participate in
such defense at such party's expense; provided, however, that the Indemnifying
Party shall pay such expense if representation of such Indemnified Party by the
counsel retained by the Indemnifying Party would be inappropriate due to actual
or potential differing interests between the Indemnified Party and any other
party represented by such counsel in such proceeding. No Indemnifying Party in
the defense of any such claim or litigation shall, except with the consent of
each Indemnified Party, consent to entry of any judgment or enter into any
settlement that does not include as an unconditional term thereof the giving by
the claimant or plaintiff to such Indemnified Party of a release from all
liability in respect of such claim or litigation, and no Indemnified Party shall
consent to entry of any judgment or settle such claim or litigation without the
prior written consent of the Indemnifying Party. Each Indemnified Party shall
furnish such information regarding itself or the claim in question as an
Indemnifying Party may reasonably request in writing and as shall be reasonably
required in connection with the defense of such claim and litigation resulting
therefrom.
In order to provide for just and equitable contribution in circumstances in
which the indemnification provided for in this Section 5 is due in accordance
with its terms but for any reason is held to be unavailable to an Indemnified
Party in respect to any losses, claims, damages and liabilities referred to
herein, then the Indemnifying Party shall, in lieu of indemnifying such
Indemnified Party, contribute to the amount paid or payable by such Indemnified
Party as a result
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of such losses, claims, damages or liabilities to which such party may be
subject in proportion as is appropriate to reflect the relative fault of the
Indemnifying Party on the one hand and the Indemnified Party on the other in
connection with the statements or omissions that resulted in such losses,
claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative fault of the Indemnifying Party and the Indemnified
Party shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of material fact related to information
supplied by the Indemnifying Party or the Indemnified Party and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The Company and the Investor agree that it
would not be just and equitable if contribution pursuant to this Section 5 were
determined by pro rata allocation or by any other method of allocation that does
not take account the equitable considerations referred to above. Notwithstanding
the provisions of this paragraph of this Section 5, in no case shall the Company
be liable and responsible for any amount in excess of the net proceeds received
by it in such Qualified Secondary Public Offering; provided, however, that no
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. Any party entitled to
contribution will, promptly after receipt of notice of commencement of any
action, suit or proceeding against such party or parties under this Section,
notify such party or parties from whom such contribution may be sought, but the
omission so to notify such party or parties from whom contribution may be sought
shall not relieve such party from any other obligation it or they may have
thereunder or otherwise under this Section. No party shall be liable for
contribution with respect to any action, suit, proceeding or claim settled
without its prior written consent, which consent shall not be unreasonably
withheld; provided, however, that it shall not be unreasonable to withhold such
consent if no release is granted in connection therewith or if such consent
would constitute an admission of guilt.
Section 6. Information by Holder. The Investor shall promptly furnish to
the Company such information regarding it and the distribution proposed by it as
the Company may reasonably request in writing and as shall be required in
connection with any registration, qualification or compliance referred to in
this Agreement.
Section 7. "Market Stand-Off" Agreement. The Investor, if requested by the
Company and the managing underwriter of any such Qualified Secondary Public
Offering, shall agree not to sell or otherwise transfer or dispose of any of its
Registrable Shares (not included in any such Registration Statement) or other
securities of the Company held by the Investor for a specified period of time
determined by the Company and the underwriter (not to exceed 180 days) following
the effective date of a Registration Statement.
Section 8. Selection of Underwriter. The Company shall have the sole right
to designate the managing underwriter in any underwritten offering.
Section 9. Successors and Assigns. Except as provided in Section 10 hereof,
the provisions of this Agreement shall be binding upon, and inure to the benefit
of, the respective successors and assigns of the parties hereto.
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Section 10. Non-Trasnferability. This Agreement, and the rights and
obligations of the Investor hereunder, may not be assigned by the Investor
without the prior written consent of the Company, in its sole and absolute
discretion..
Section 11. Miscellaneous.
11.1 Entire Agreement. This Agreement reflects and sets forth the entire
agreement and understanding between the parties hereto with respect to the
subject matter hereof and supersedes all prior discussions, agreements and
understandings of any and every nature among them.
11.2 Amendments and Waivers. This Agreement may not be amended except
pursuant to a written agreement executed by each of the Company and the
Investor.
11.3 Governing Law. This Agreement shall be governed by and construed in
accordance with, the internal laws of the State of New York (without reference
to the choice of law or conflicts of law provisions thereof).
11.4 Notices. All notices, requests, consents, and other communications
under this Agreement shall be in writing and shall be deemed to have been given
when delivered personally to the recipient, one business day after they have
been sent to the recipient by reputable overnight courier service (charges
prepaid) guaranteeing next business day delivery, or two business days after
being sent by certified or registered mail, return receipt requested, postage
prepaid. Such notices and other communications shall be addressed:
If to the Company, at
EMERGING VISION, INC.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
FAX: ▇▇▇-▇▇▇-▇▇▇▇
Attention: General Counsel
If to the Investor, at
BALFOUR INVESTORS INCORPORATED
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
FAX: ▇▇▇-▇▇▇-▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇▇▇▇▇
Either party may give any notice, request, consent or other communication
under this Agreement using any other means (including, without limitation,
personal delivery, messenger service, telecopy,
7
first class mail or electronic mail), but no such notice, request, consent
or other communication shall be deemed to have been duly given unless and until
it is actually received by the party for whom it is intended. Either party may
change the address to which notices, requests, consents or other communications
hereunder are to be delivered by giving the other party notice in the manner set
forth in this Section.
11.5 Severability. In case any provision of this Agreement shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions of this Agreement shall not in any way be affected or
impaired thereby.
11.6 Headings. The section headings are for the convenience of the parties
and in no way alter, modify, amend, limit or restrict the contractual
obligations of the parties.
IN WITNESS WHEREOF, the parties have executed this Registration Rights
Agreement as of the date first written above.
COMPANY:
EMERGING VISION, INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇
-------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇
Title: SVP & CFO
BALFOUR INVESTORS INCORPORATED
By: /s/ ▇▇▇ ▇▇▇▇▇▇▇▇▇
-------------------------
Name: ▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: President
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