<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON FEBRUARY 3, 1999
REGISTRATION NO. 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------------
FORM S-3
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
-----------------------
DISPLAY TECHNOLOGIES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C> <C>
NEVADA 3993 38-2286268
(STATE OR OTHER JURISDICTION OF (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification Number)
</TABLE>
5029 Edgewater Drive, Orlando, FL 32810 (407) 521-7477
- --------------------------------------------------------------------------------
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S OFFICE)
J. William Brandner
5029 Edgewater Drive, Orlando, FL 32810 (407) 521-7477
- --------------------------------------------------------------------------------
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
Copies or communication to:
Marshall S. Harris
Display Technologies, Inc.
5029 Edgewater Drive, Orlando, FL 32810 (407) 521-7477
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time to
time after this registration.
If the only securities being registered on this form are being offered pursuant
to dividend or interest reinvestment plans, please check the following box. [_]
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box: [X]
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [_] _______________
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_] _______________
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
- --------------------------------------------------------------------------------------------------------
Proposed Maximum Proposed Maximum
Title of Each Class of Amount to be Offering Price Aggregate Amount of
Securities to be Registered Per Share/(1)/ Offering Price Registration
Registered Fee
-------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $.001 par value 2,720,021 $6.00 $16,320,126 $4,537/(1)/
- --------------------------------------------------------------------------------------------------------
</TABLE>
(1) Estimated solely for the purpose of determining the Registration Fee.
Calculated pursuant to Rule 457(c), based upon the average of the high and
the low sales prices of the Registrant's Common Stock on January 29, 1999,
as reported on the Nasdaq SmallCap Market.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE
SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION ("SEC"), ACTING
PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
================================================================================
<PAGE>
SUBJECT TO COMPLETION DATED FEBRUARY 3, 1999
THE INFORMATION CONTAINED IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED.
THE REGISTERING SECURITYHOLDERS MAY NOT SELL THESE SECURITIES UNTIL THE
REGISTRATION STATEMENT FILED WITH THE SEC IS EFFECTIVE. THIS PROSPECTUS IS NOT
AN OFFER TO SELL THESE SECURITIES NOR THE SOLICITATION OF AN OFFER TO BUY THESE
SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
[LOGO OF DISPLAY TECHNOLOGIES, INC. APPEARS HERE]
DISPLAY TECHNOLOGIES, INC.
5029 Edgewater Drive
Orlando, Florida 32810
Display Technologies, Inc., through its subsidiaries, designs, manufactures,
installs and services hi-tech electronic computer driven video displays, message
centers, scoreboards and business identity signs, and also manufactures a line
of compressed air filter products.
2,720,021 SHARES OF COMMON STOCK
<TABLE>
<CAPTION>
The Offering Per Share Total
- ------------ --------- -----
<S> <C> <C>
Public offering price.................... $6.00 $16,320,126
Proceeds, before expenses,
to the Registering Securityholders.. 6.00 16,320,126
</TABLE>
Certain of the shareholders named under "Registering Securityholders" have
advised us that they presently intend to offer for sale 411,401 shares of Common
Stock covered by this Prospectus. Display Technologies, Inc. f/k/a La-Man
Corporation (the "Company") will not receive any of the proceeds from the sale
of such shares. We will receive proceeds from the exercise of options and
warrants underlying certain of the shares.
The Common Stock covered by this Prospectus may be offered by the Registering
Securityholders on the Nasdaq SmallCap Market, in privately negotiated
transactions, or by a combination of such methods of sale, at fixed prices that
may be changed, at market prices prevailing at the time of sale, at prices
related to such prevailing market prices, or at negotiated prices.
TRADING SYMBOLS -- NASDAQ SMALLCAP MARKET
COMMON STOCK - DTEK
REDEEMABLE COMMON STOCK WARRANTS - DTEKW
On January 29, 1999, the last reported sale price for the Common Stock was
$6.00 per share.
CONSIDER CAREFULLY THE RISK FACTORS BEGINNING ON PAGE 4 OF THIS PROSPECTUS.
NEITHER THE SEC NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED
THESE SECURITIES OR DETERMINED IF THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
PROSPECTUS DATED FEBRUARY 3, 1999
<PAGE>
YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS DOCUMENT OR TO WHICH
WE HAVE REFERRED YOU. WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH
INFORMATION THAT IS DIFFERENT. THIS DOCUMENT MAY ONLY BE USED WHERE IT IS LEGAL
TO SELL THESE SECURITIES. THE INFORMATION CONTAINED IN THIS DOCUMENT MAY ONLY BE
ACCURATE ON THE DATE OF THIS PROSPECTUS.
2,720,021 Shares of Common Stock
(Par Value $.001 per share)
DISPLAY TECHNOLOGIES, INC.
========================
PROSPECTUS
========================
TABLE OF CONTENTS
<TABLE>
<S> <C>
Operating Subsidiaries of Display Technologies, Inc..................... 1
Available Information................................................... 1
Incorporation by Reference.............................................. 1
Forward-Looking Statements; Certain Defined Terms....................... 2
Prospectus Summary...................................................... 3
Risk Factors............................................................ 4
The Offering............................................................ 10
Use of Proceeds......................................................... 10
Registering Securityholders............................................. 11
Plan of Distribution.................................................... 14
The Company............................................................. 14
Description of Capital Stock............................................ 18
Legal Matters........................................................... 19
Experts................................................................. 19
</TABLE>
<PAGE>
OPERATING SUBSIDIARIES OF DISPLAY TECHNOLOGIES, INC.
AD ART ELECTRONIC SIGN CORPORATION J.M. STEWART INDUSTRIES, INC.
3133 North Ad Art Road 1705 Cattlemen Road, Unit S15
Stockton, CA 95215 Sarasota, Fl. 34232
CERTIFIED MAINTENANCE SERVICE, INC. J.M. STEWART MANUFACTURING, INC.
365 Oak Place 2201Cantu Court, Suite 217
Port Orange, FL 32127 Sarasota, FL 34232
DON BELL INDUSTRIES, INC. LA-MAN CORPORATION
365 Oak Place 700 Glades Court
Port Orange, FL 32127 Port Orange, FL 32127
J.M. STEWART CORPORATION
2201Cantu Court, Suite 217
Sarasota, FL 34232
AVAILABLE INFORMATION
We file annual, quarterly and current reports, proxy statements and other
information with the SEC. You may read and copy any reports, statements or
other information on file at the SEC's public reference room in Washington, D.C.
You can request copies of those documents, upon payment of a duplicating fee, by
writing to the SEC.
The Company has filed a Registration Statement on Form S-3 with the SEC.
This Prospectus, which forms a part of the Registration Statement, does not
contain all of the information included in the Registration Statement. Certain
information is omitted and you should refer to the Registration Statement and
its exhibits. References made in this Prospectus to any contract or other
document of the Company, are not necessarily complete and you should refer to
the exhibits attached to the Registration Statement for copies of the actual
contract or document. You may review a copy of the Registration Statement at
the SEC's public reference room in Washington, D.C.
INCORPORATION BY REFERENCE
The following documents or information filed by the Company with the SEC
are incorporated in this Prospectus by reference:
(a) Annual Report on Form 10-KSB for the fiscal year ended June 30, 1998;
(b) Proxy Statement on Schedule 14A as filed on September 18, 1998;
(c) Quarterly Report on Form 10-QSB for the quarter ended September 30,
1998, as amended on January 20, 1999;
1
<PAGE>
(d) Current Report on Form 8-K as filed on December 7, 1998; and
(e) Current Report on Form 8-K as filed on January 15, 1999.
All reports and other documents filed by the Company pursuant to Section
13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934, as amended,
subsequent to the date of this Prospectus and prior to the termination of the
offering made by this Prospectus are to be deemed to be incorporated by
reference into this Prospectus and to be a part of this Prospectus from the
respective dates they are filed. In the case of a conflict, statements in
documents most recently filed with the SEC should be relied upon.
We will send you, without charge, on your written or oral request, a copy
of any or all of the information incorporated by reference in this Prospectus
(other than exhibits not specifically incorporated into such documents).
Requests for such copies should be directed to Marshall S. Harris, General
Counsel, Vice President and Secretary, Display Technologies, Inc., 5029
Edgewater Drive, Orlando, Florida 32810.
FORWARD-LOOKING STATEMENTS; CERTAIN DEFINED TERMS
Certain statements incorporated by reference or made in this Prospectus
under the captions "Prospectus Summary," "Risk Factors," and "Business" and
elsewhere in this Prospectus are "forward-looking statements" within the meaning
of the private Securities Litigation Reform Act of 1995. These statements are
subject to the safe harbor provisions of that act. The statements include,
without limitation, future statements about the competitiveness of the signage
and filter industries, the future availability and prices of certain materials,
potential regulatory obligations and the Company's strategies and other
statements contained herein that are not historical facts. The words
"anticipate," "believe," "estimate" and similar expressions are generally
intended to identify forward-looking statements. Because such statements
involve risks and uncertainties, there are important factors that could cause
actual results to differ materially from those expressed or implied by such
forward-looking statements, including changes in general economic and business
conditions (including in the signage and filter industries), actions of
competitors, our ability to recover material costs in the pricing of our
products, the extent to which we are able to develop new products and markets
for our products, the time required for such development, the level of demand
for such products, changes in our business strategies and other factors
discussed under "Risk Factors."
As used in this Prospectus, unless the context requires otherwise, (a) the
"Company" means Display Technologies, Inc. and its predecessors and consolidated
subsidiaries, (b) "Common Stock" means our common stock, $.001 par value per
share; (c) "Offering" means the offering of Common Stock contemplated by this
Prospectus; (d) "Securities Act" means the Securities Act of 1933; and (e)
"Exchange Act" means the Securities Exchange Act of 1934.
2
<PAGE>
PROSPECTUS SUMMARY
THIS SUMMARY HIGHLIGHTS SOME INFORMATION CONTAINED ELSEWHERE IN THIS
PROSPECTUS. THIS SUMMARY IS NOT COMPLETE AND MAY NOT CONTAIN ALL OF THE
INFORMATION THAT YOU SHOULD CONSIDER BEFORE INVESTING IN THE COMMON STOCK. YOU
SHOULD READ THE ENTIRE pROSPECTUS, AND THE DOCUMENTS INCORPORATED BY REFERENCE,
CAREFULLY.
THE COMPANY
We have been in operation since 1979. Until 1994, our sole line of business
was the manufacture and sale of a line of filter products used in compressed air
equipment. As the result of acquisitions since 1994, our business now consists
primarily of the design, manufacture, installation and maintenance of sign
displays, primarily outdoor displays. Our products consist of everything from
very simple signage in front of a church, school or other institution, to
spectacular electronic signs for the sports industry, entertainment complexes,
shopping and auto malls, and the like. Our February 1998 acquisition of Ad Art
Electronic Sign Corporation tripled the size of our company and gained us entry
into the market for higher-technology signs, such as our new LED (light emitting
diode) display board which is capable of full live video. All of our business
operations are conducted through our subsidiaries. Our commercial display
business is conducted by Ad Art and Don Bell Industries, Inc. J.M. Stewart
Corporation operates our institutional sign business and our sign maintenance
business is operated by Certified Maintenance Service, Inc., as well as Ad Art
and Don Bell. La-Man Corporation operates our original compressed air filter
business.
REGISTERING SECURITYHOLDERS
The Registering Securityholders are:
. Peter D. Mathews
. Terry J. Long
. Lou A. Papais
. Croft & Bender LLC
. Halyx Partners, Inc. d/b/a The Howell Group
. Various members of Pacific Consulting Group, Inc.
. Renaissance Capital Growth & Income Fund III, Inc.
. Renaissance U.S. Growth & Income Trust PLC
. Worrell Enterprises, Inc.
3
<PAGE>
Only 411,379 shares of Common Stock covered by this Prospectus are
presently being offered for sale. The holders of the remaining 2,308,642 shares
covered by this Prospectus have advised us that they do not presently intend to
offer such shares for sale. Of these 2,308,642 shares, 993,566 shares are
presently outstanding; the remaining 1,315,086 are issuable upon the exercise of
certain options and warrants or the conversion of certain debt instruments.
THE OFFERING
We will not receive any proceeds from the sale of any of the shares covered
by this Prospectus. We will receive $573,052.45 from Mr. Mathews upon the
exercise of his option and warrants, and we will receive $181,122 from
Worrell upon the exercise of its options. Also, our indebtedness will be
reduced by $500,000 upon conversion of the Company's promissory note to Worrell.
We also will receive proceeds of warrants and options held by other Registering
Securityholders if and when exercised, and our indebtedness to the Renaissance
lenders will be reduced or eliminated if and when they exercise their rights to
convert their debt instruments into shares of our Common Stock. Proceeds we
receive from the exercise of the warrants and options will be used to reduce our
indebtedness, for working capital purposes and for acquisitions.
If and when all of the shares covered by this Prospectus are issued, there
will then be 8,231,714 shares of Common Stock outstanding, assuming no
additional shares are issued in the meantime.
RISK FACTORS
YOU SHOULD CONSIDER CAREFULLY THE FOLLOWING FACTORS AND OTHER INFORMATION
IN THIS PROSPECTUS BEFORE DECIDING TO INVEST IN SHARES OF OUR COMMON STOCK.
Market Overhang; Issuance of Additional Shares
The Company presently has outstanding the following stock options, stock
warrants and convertible debt instruments:
. Plan options Options granted under our stock option and stock
compensation plans to various present and former
employees and non-employee directors to purchase
up to an aggregate of 1,916,777 shares of Common
Stock. All but 546,000 of such options are
presently exerciseable, at prices ranging between
$.48 and $5.06 per share.
4
<PAGE>
. Underwriter option Option held by Peter D. Mathews, the successor
to the underwriter of our 1994 offering, to
purchase, at the price of $6.85 per unit,
33,887 units, each unit comprised of two
shares of Common Stock and two common stock
purchase warrants exerciseable at price of
$4.75 per warrant.
. Consultant options Options granted to various of our consultants
to purchase up to an aggregate 409,500 shares.
All of the options and warrants are presently
exercisable at prices ranging between $1.40
per share and $4.29 per share.
. Renaissance warrants Warrants granted to our Renaissance lenders to
purchase up to an aggregate of 210,000 shares.
These warrants are presently exercisable at
the price of $4.11 per share.
. Renaissance debentures $3,500,000 of our 8.75% Convertible Debentures
Due March 2, 2005, held by Renaissance, are
presently convertible into up to 774,336
shares at the conversion price of $4.52 per
share.
. Worrell note $500,000 Promissory Note Due September 7,
2000, that is presently convertible into up to
115,740 shares at the conversion price of
$4.32 per share.
The shares underlying the underwriter and consultant options, the
Renaissance warrants and debentures and the Worrell note and options are
included in this Prospectus. Worrell and Mr. Mathews each have advised us that
they intend to acquire the shares of Common Stock underlying their instruments
and offer such shares for sale under this Prospectus. However, the holders of
the consultant options and the Renaissance warrants and debentures have advised
us that they do not presently intend to exercise the right to convert their
instruments into shares of Common Stock.
On December 29, 1998, we notified the registered holders of our publicly
traded common stock purchase warrants that the Company had elected to exercise
its right to redeem the warrants effective January 28, 1999 at the required
redemption price of $.07 per warrant. Of the 620,000 warrants originally
outstanding, 531,340 of such warrants were exercised prior to the redemption
date at the exercise price of $4.32 per warrant, resulting in proceeds to the
Company of $2,295,388 and the issuance of 531,340 additional shares of common
stock. We intend to use the proceeds from exercise of the warrants to reduce
debt, for general working capital purposes, and for acquisitions.
Over the last six months, the trading volume of the Common Stock has
averaged approximately 60,000 shares weekly and there are now several active
market makers in the Common Stock. Prior to that time, the relatively small
size of the "public float" in the Common Stock and the lack of a sufficient
number of active market makers resulted at times in thin and sporadic trading.
We can not assure you that the public trading in the Common Stock will be as
active in the future as it is at present or that exercise or conversion of our
outstanding options, warrants and convertible debt instruments could not
adversely affect trading prices of the Common Stock.
5
<PAGE>
MARKET PRICE FLUCTUATIONS
We have recently experienced significant fluctuations in the market price
of our Common Stock and the volume of its trading. In addition, the securities
markets from time to time experience significant price and volume fluctuations
that may be unrelated to the operating performance of particular companies.
Economic and other external factors, as well as period-to-period fluctuations in
our financial results, may have a significant impact on the market price of the
Common Stock.
FLUCTUATIONS IN QUARTERLY OPERATING RESULTS
Our operating results have historically varied from quarter to quarter and
we expect that some variability will continue to occur. In the past, operating
results have varied as a result of a number of factors, such as the size and
timing of customer orders, seasonality, the timing of the introduction and
customer acceptance of new products or product enhancements by our competitors.
Other contributing factors have been our introduction of new products, changes
in pricing policies by us or our competitors, marketing and promotional
expenditures, the timing of acquisitions and changes in general economic
conditions.
RISKS IN GROWTH STRATEGY
Our strategy is to grow by strengthening our presence in our existing
markets with existing products and through new product developments, and through
acquisitions. In addition, we seek to improve cash flow and profitability
through cost efficiencies. Our growth strategy presents risks inherent in
assessing the value, strengths and weaknesses of acquisition opportunities, in
evaluating the costs of new growth opportunities and in expanding into new
products and improving our operating efficiencies. We are unable to predict the
number or timing of future acquisition opportunities, or whether any such
opportunities will meet our acquisition criteria.
Likewise, our growth strategy also depends on our ability to achieve cost
efficiencies through increasing production automation, improving distribution
and enhancing work force productivity. There can be no assurances that we will
be able to continue to successfully implement this strategy in the future.
COMPETITION
Our products compete with those of a number of companies, both larger and
smaller than us, and with products based on various forms of technology. In
addition, there are several companies whose current products utilize similar
technology and who possess the resources to develop more competitive products in
the future. There can be no assurance that competitors will not market new
products which have perceived advantages over some of our products or which,
because of pricing strategies, render
6
<PAGE>
some products currently sold by us less marketable or otherwise adversely affect
our operating margins. Each of our business segments is characterized by intense
competition. Many companies offer or are engaged in the development of products
or the provision of services which may be or are competitive with our present or
proposed products or services. Some of these companies have substantially
greater financial, technical, manufacturing, marketing, distribution and/or
other resources than us. There can be no assurance that we will be able to
continue to compete successfully with such companies.
YEAR 2000 NONCOMPLIANCE
Many existing computer programs only use two digits to identify a year in
the date field, with the result that data referring to the Year 2000 and
subsequent years may be misinterpreted by these programs. If present in
computer applications of the Company or its suppliers and not corrected, this
problem could cause computer applications to fail or to create erroneous results
and could cause a disruption in operations and have an adverse effect on the
Company's business and results of operations.
Over the last few years, we have analyzed and evaluated all internal
information technology systems, equipment and operations to ensure their Year
2000 compliance. We have been actively implementing new systems over the last
few years, and we believe that all of our major information technology,
including that used in certain of our electronic display products, is Year 2000
complaint. Letters of compliance have been requested from each of our vendors
and, when the need is identified, we intend to work with our vendors in
determining appropriate testing and compliance processes. Expenditures to
remediate Year 2000 issues have not been material and we do not reasonably
foresee material expenditures related to these issues in the future.
We do not assess as high the risks to our operations of Year 2000
noncompliance by our vendors, since we have numerous alternate sources of
suppliers. However, despite this fact and our efforts to ensure our Year 2000
compliance and that of our vendors, we could potentially experience a disruption
in our operations as the result of Year 2000 noncompliance of certain vendors,
financial institutions, governmental agencies or other third parties or external
systems. Such a disruption could potentially affect various aspects of our
business operations, such as the timeliness of completion and delivery of major
electronic display products.
ENVIRONMENTAL MATTERS
Many of our operations are subject to federal, state and local
environmental laws and regulations pertaining to air and water quality, storage
tanks and the management and disposal of waste at our facilities. To the best
of our knowledge, our operations are in material compliance with applicable
environmental laws and regulations as currently interpreted. We cannot predict
with any certainty whether future events, such as changes unknown to us, may
give rise to additional costs that could be material. Furthermore, actions by
federal, state and local governments concerning environmental matters
7
<PAGE>
could result in laws or regulations that could have a material adverse effect on
our financial condition or results of operations.
DEPENDENCE ON KEY PERSONNEL
We rely, and will continue to rely, on skilled executives and other key
employees, including our present officers. We believe we are able to attract
and retain management and other personnel, and replace key personnel. However,
should that need arise, our inability to attract, retain or replace such
personnel could adversely effect our financial condition and operating results.
BUSINESS AND ECONOMIC FACTORS
The future of the Company, and of our operations, will be subject to a
number of business and other factors beyond our control, such as economic
slowdowns and increased competition. Unfavorable general economic conditions
could adversely affect our operating results. There can be no assurance that
the Company would be able to sustain its operations in the event of an economic
slowdown for an extended period of time or if general economic conditions in the
U.S. and in foreign countries were to significantly deteriorate.
DIVIDENDS
We have paid 5% dividends in Common Stock the last three fiscal years. We
have not paid and do not anticipate paying any cash dividends on the Common
Stock in the foreseeable future. We intend instead to retain working capital
and earnings for use in our business operations and expansion.
FUTURE ISSUANCES OF STOCK BY THE COMPANY
The Company has 50,000,000 shares of Common Stock authorized, of which
5,511,693 shares were issued and outstanding on January 25, 1999. We also are
authorized to issue up to 50,000,000 shares of preferred stock, par value $.001
per share. No shares of preferred stock are outstanding. The Company has
reserved a total of 3,491,151 shares of Common Stock as follows: (a) 2,601,075
shares for issuance upon exercise of outstanding options and warrants; and (b)
890,076 shares for issuance upon exercise of conversion rights under our
convertible debt instruments. The remaining 40,997,156 authorized but unissued
and unreserved shares of Common Stock, and the 50,000,000 authorized shares of
preferred stock, may be issued in certain cases without any action or approval
by shareholders. Although we presently have no plans, agreements, or
undertakings for the issuance of any shares, or related convertible securities
except as disclosed in this Prospectus, any such issuances could be used as a
method of discouraging, delaying, or preventing a change in control of the
Company or could dilute the public ownership of the Company, and there can be no
assurance that we will not issue any such additional shares. A shareholder's pro
rata ownership interest in the Company will be reduced to the
8
<PAGE>
extent of the exercise of the outstanding warrants and options or the exercise
of conversion rights under our convertible debt instruments.
ANTI-TAKEOVER PROVISIONS
There are certain provisions in our Restated Articles of Incorporation and
our debt instruments that could materially affect an attempt to acquire control
of the Company. These provisions are as follows:
. Restated Articles of Incorporation Our Restated Articles of
Incorporation authorize the
issuance of up to 50,000,000
shares of preferred stock and
allow the Board of Directors to
create one or more series of
preferred stock and to fix the
voting rights, dividend rights,
liquidation rights and other
rights of such shares. No
shares of preferred stock are
presently outstanding, and we
presently have no agreements or
plans to do so.
. Debt Instruments A number of our debt
instruments permit our lenders
to accelerate the maturity of
our indebtedness to them if
there occur certain changes
(other than as a result of
resignations) to the makeup of
our Board of Directors or a
person or group obtains a
specified percentage of our
outstanding voting shares.
Also, our debt instruments
contain other provisions that
could make it difficult for
someone to acquire control of
the Company.
The discretion of our Board of Directors to authorize the issuance of
various series of preferred stock and the provisions in our debt instruments
allowing lenders to accelerate the maturity of our indebtedness upon a change in
control might discourage an unsolicited attempt to acquire control of the
Company by offering shareholders a premium for their shares of Common Stock.
However, it is possible that making shares of preferred stock available for
issuance could have the effect of increasing the price offered to our
shareholders in a tender or exchange offer. Moreover, the Marketplace Rules of
The Nasdaq Stock Market, Inc. limit the ability of the Company to issue shares
of preferred stock having certain voting rights without the approval of our
shareholders.
9
<PAGE>
LEVERAGE
Our debt to equity ratio as of November 30, 1998 was approximately 1-to-1.
Our ability to make scheduled payments of the principal of, or interest on, our
debt will depend on our future performance, which is subject, among other
things, to economic, financial, competitive and other factors beyond our
control.
THE OFFERING
Common Stock registered................... 2,720,021 shares
Common Stock presently offered............ 411,401 shares
Total shares outstanding as of
January 25, 1999/(1)/..................... 5,511,693 shares
Registering Securityholders............... See "Registering
Securityholders" below
Use of proceeds........................... The Company will not receive
any proceeds from the
Offering. See "Use of
Proceeds" below.
/(1)/ Does not include 2,735,603 shares reserved for issuance under our stock
option and stock compensation plans, of which 1,916,777 options were
outstanding as of January 25, 1999.
USE OF PROCEEDS
The Company will not receive any proceeds from the sale of the 411,401
shares of Common Stock presently offered under this Prospectus or the sale of
the remaining, 2,308,620 shares if and when they are offered for sale. The
Company will receive from Peter D. Mathews proceeds of $573,052.45 upon the
exercise by Mr. Mathews of certain options and warrants, and the Company will
receive proceeds of $181,122 from Worrell Enterprises, Inc. upon its exercise of
certain options. These proceeds will be used to reduce debt, for general working
capital purposes, and for acquisitions. The Company's indebtedness will be
reduced by $500,000 upon conversion by Worrell of the Company's convertible note
in that amount to Worrell.
10
<PAGE>
REGISTERING SECURITYHOLDERS
The Company has agreed with the Registering Securityholders identified
below to register all 2,577,641 shares of Common Stock covered by this
Prospectus. However, only Messrs. Pete Mathews and Lou Papais, and Worrell
Enterprises, Inc. are presently offering shares for sale under this Prospectus.
The other Registering Securityholders have advised us that they do not intend to
offer their shares for sale or exercise their options or warrants, or convert
their convertible debt instrument, at this time.
The following table sets forth certain information regarding the
Registering Securityholders' beneficial ownership of Common Stock as of January
25, 1999. The table assumes the exercise of all options held by them that are
exerciseable within 60 days of such date, reflects the number of shares
presently offered and also reflects the percentage beneficially owned (if more
than one percent) after the offered shares are sold.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
SHARES BENEFICIALLY SHARES SHARES % AFTER
NAME OF REGISTERING SECURITYHOLDER OWNED REGISTERED OFFERED OFFERING
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Peter D. Mathews 143,548 143,548 143,548
- -----------------------------------------------------------------------------------------------------------------------
Lou A. Papais 680,400 680,400 100,000 9.9%
- -----------------------------------------------------------------------------------------------------------------------
Terry J. Long 275,100 170,100 0 4.6%
- -----------------------------------------------------------------------------------------------------------------------
Croft & Bender LLC 78,750 78,750 0 1.3%
- -----------------------------------------------------------------------------------------------------------------------
Halyx Partners, Inc. d/b/a The Howell Group 110,250 110,250 0 1.9%
- -----------------------------------------------------------------------------------------------------------------------
Pacific Consulting Group, Inc. Principals or Employees
Falcon Consulting Company
Trout Trading Company, Inc. 14,000 14,000 0
J. Scott Liolios 52,375 52,375 0
Chris Rosgen 52,375 52,375 0
Nevine Safyurtlu 18,000 18,000 0
5,000 5,000 0
- -----------------------------------------------------------------------------------------------------------------------
Renaissance Capital Growth & Income Fund III, Inc. 613,696 613,696 0 10.4%
- -----------------------------------------------------------------------------------------------------------------------
Renaissance U.S. Growth & Income Trust PLC 613,696 613,696 0 10.4%
- -----------------------------------------------------------------------------------------------------------------------
Worrell Enterprises, Inc. 534,723 167,831 167,831 6.2%
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
Mr. Mathews is a former principal of Mathews, Holmquist and Associates,
Inc., which acted as the underwriter of the Company's 1994 public offering of
Common Stock and Common Stock purchase warrants. Part of the consideration paid
to the underwriter for that offering was comprised of options to purchase 71,774
shares of Common Stock and 71,774 Common Stock purchase warrants. Each of the
warrants entitles Mr. Mathews to purchase one share of Common Stock at the
exercise price of $4.75 per warrant. Mr. Mathews was assigned all rights to the
unit purchase option by the trustee in bankruptcy for his former underwriting
firm, which assignment was approved by the U.S. Bankruptcy Court, District of
Minnesota. Incident to entering into an amendment extending the expiration date
of the option, Mr.
11
<PAGE>
Mathews paid the Company $13,700 in partial exercise of the option, upon which
he received 4,000 shares of Common Stock and 4,000 warrants. Mr. Mathews has
advised the Company that he intends to fully exercise the remainder of the unit
purchase option and all of his warrants, which will provide additional total
proceeds to the Company of $573,052.45.
Lou A. Papais and Terry J. Long are former shareholders of Electronic Sign
Corporation, the predecessor by merger to the Company's subsidiary, Ad Art
Electronic Sign Corporation. They are registering all of the shares of Common
Stock they acquired as part of the merger. However, Mr. Papais has advised the
Company that he intends to presently offer for sale only 100,000 of such shares
and Mr. Long has advised us that he does not intend to offer any of his shares
for sale at present. Mr. Papais is party to a consulting agreement with the
Company and Ad Art. Under the terms of the consulting agreement, Mr. Papais is
required to devote three days per week to consulting with Ad Art management on
its electronic sign products through February 18, 2001. As consideration for
his consulting services, Mr. Papais receives an annual consulting fee of
$100,000 payable in equal monthly installments. Mr. Long is President of Ad
Art. He has a three-year employment agreement with Ad Art providing for a
$175,000 annual salary and incentive bonus, and also holds options for 105,000
shares of Common Stock exerciseable at the price of $3.84.
Croft & Bender, LLC provided various consulting services to the Company in
connection with the acquisition of Ad Art in February 1998. In consideration of
these consulting services, Croft & Bender, LLC was granted warrants to purchase
up to 78,750 shares of Common Stock at the exercise price of $4.11 per share.
Halyx Partners, Inc. d/b/a The Howell Group has an agreement with the
Company under which it provides various investor public relations services to
us. The shares being registered for this Registering Securityholder are
issuable upon exercise of the following options granted to it for the consulting
services: (a) options to purchase 55,125 shares of Common Stock at the exercise
price of $1.40 per share expiring March 17, 2001; and (b) options to purchase
55,125 shares of Common Stock at the exercise price of $2.50 per share expiring
August 28, 2001. The Howell Group has advised us that it does not presently
intend to exercise the options and, accordingly, is not presently offering the
underlying shares.
Falcon Consulting Company, Trout Trading Company, Inc., J. Scott Liolios,
Chris Rosgen and Nevine Safyurtlu are principals or employees of Pacific
Consulting Group, Inc. Pacific provides various financial public relations
consulting services to the Company. In consideration of these consulting
services, Pacific was granted the following options, which it has assigned to
the named principals and employees in the amounts described in the above table:
(a) options for 78,750 shares of Common Stock at the exercise price of $3.10 per
share; (b) options for 31,500 shares of Common Stock at the exercise price of
$3.57 per share; and (c) options for 31,500 shares of Common Stock at the
exercise price of $4.29 per share. The Pacific options expire on August 28,
2001. Pacific has advised us that none of the
12
<PAGE>
named principals or employees presently plans to exercise any of the options
and, accordingly, the underlying shares are not presently being offered for
sale.
Renaissance Capital Growth & Income Fund III, Inc. and Renaissance U.S.
Growth Income & Trust PLC provided the financing for the Company's acquisition
of Ad Art in February 1998. In exchange for the financing, each of the
Renaissance lenders received the following consideration: (a) 121,528 shares of
Common Stock; (b) a $1,750,000 convertible debenture convertible into shares of
Common Stock at the present conversion price of $4.52 per share; and (c)
warrants to purchase up to 105,000 shares of Common Stock at the present
exercise price of $4.11 per share. The Renaissance lenders have advised the
Company that they do not presently intend to exercise their warrants or their
conversion rights under the debentures and, accordingly, are not presently
offering any of the underlying shares of Common Stock for sale. The Company has
the right to redeem the Renaissance convertible debentures at 101% of par if the
closing bid price for the Common Stock averages at least $8.23 for 20
consecutive trading days, the average daily trading volume for 45 consecutive
trading days prior to the redemption notice is not less that 30,000 shares, and
the Company has previously filed a registration statement covering the shares
underlying conversion of the debentures and such registration statement has been
declared effective.
The $500,000 convertible note held by Worrell Enterprises, Inc. was issued
to Worrell as part of the consideration for the Company's acquisition of Don
Bell Industries, Inc. in September 1995. The note is presently convertible into
115,740 shares of Common Stock at the conversion price of $4.32 per share.
Worrell also holds the following options granted to Worrell in consideration of
the services of Messrs. Edwin M. Freakley and Robert M. Smither, Jr. as non-
employee directors of the Company: (a) options to purchase 4,631 shares of
Common Stock at the exercise price of $.91 per share; (b) options to purchase
4,410 shares at the exercise price of $2.17 per share ; (c) options to purchase
22,050 shares at the exercise price of $2.77 per share; and (d) options to
purchase 21,000 shares at the exercise price of $5.06 per share. Worrell has
advised the Company that it intends to exercise the options and its conversion
rights under the note. Accordingly, Worrell is offering all of such 167,831
shares of Common Stock for sale under this Prospectus.
The Company is registering the shares of Common Stock underlying Mr.
Mathews' option and warrants as the result of his exercise of certain demand
registration rights granted in connection with the option. The Company has
agreed to register the remaining shares covered by this Prospectus as the result
of the exercise by the Registering Securityholders of various piggyback
registration rights. Substantially all of the expenses of the preparation of
the registration statement are being paid by the Company.
13
<PAGE>
PLAN OF DISTRIBUTION
The shares of Common Stock being offered by certain Registering
Securityholders under this Prospectus may be offered and sold from time to time
as market conditions permit on the Nasdaq SmallCap Market, or otherwise, at
prices and terms then prevailing or at prices related to the then current market
price, or in negotiated transactions. Such shares may be sold by one or more of
the following methods, without limitation: (a) a block trade in which a broker
or dealer will attempt to sell the shares as agent but may position and resell a
portion of the block as principal to facilitate the transaction; (b) purchases
by a broker or dealer as principal and resale by such broker or dealer for its
account pursuant to this Prospectus; (c) ordinary brokerage transactions and
transactions in which the broker solicits purchasers; and (d) face-to-face
transactions between sellers and purchasers without a broker/dealer. Brokers or
dealers engaged by the Registering Securityholders may arrange for other brokers
or dealers to participate. Brokers or dealers may receive commissions or
discounts from the Registering Securityholders in amounts to be negotiated.
Participating brokers and dealers may be deemed to be "Underwriters" within the
meaning of the Securities Act in connection with such sales.
To comply with certain state securities laws, if applicable, the shares will
be offered or sold in such jurisdictions only through registered or licensed
brokers or dealers. In addition, in certain states the shares may not be sold
or offered unless they have been registered or qualified for sale in such states
or an exception for registration or qualification is available and is complied
with.
THE COMPANY
GENERAL
Display Technologies, Inc. has been in operation since 1979. Until January
1994, our sole line of business consisted of the manufacture and sale of various
filter products for compressed air equipment. We entered the business of
manufacturing and selling signs to schools, churches and other institutions in
January 1994 and entered the electronic and custom sign business in September
1995. Today, our main business is the design, manufacture, installation and
display of signs and other displays, primarily outdoor displays. Our products
range from very simple signs in front of schools, churches and other
institutions to very large, spectacular LED (light emitting diode) and other
electronic displays for the sports industry, theme parks and other entertainment
complexes, shopping complexes and the like. Our February 1998 acquisition of Ad
Art Electronic Sign Corporation provided for our entry into the market for
higher-technology displays. We produce custom-designed signage and display
products that enhance image and location awareness. Our products vary from back-
lit identification signs for institutions and small businesses to large,
electronic full-color video displays for the sports and entertainment
industries. They communicate visual messages, which can be product or service
14
<PAGE>
advertisements, as well as identification, directional, inspirational,
instructional and simple entertainment messages.
Our February 1998 acquisition of Ad Art approximately tripled the size of
our company and gained us entry into international markets. As a result, we are
now one of the 10 largest companies in the $4.6 billion electronic sign
industry.
Our newest LED product is capable of full-live video. We recently completed
a four-sided video replay board at the University of Houston's indoor arena and
have installed or are installing video boards in convention centers, auto malls,
shopping centers and a cathedral in Las Angeles, California. We have also
installed video boards in Moscow, Siberia, the Middle East, Mexico, South
America and Central America.
Our corporate headquarters are located at 5029 Edgewater Drive, Orlando,
Florida. All of our business operations are conducted through our subsidiaries.
OPERATING SUBSIDIARIES
Ad Art Electronic Sign Corporation, acquired in February 1998, designs and
----------------------------------
manufactures high quality electronic message centers and video display boards
with sophisticated animation, instant replay and live video capabilities. Ad
Art, a California-based firm, is a major manufacturer of traditional and
electronic signage across a broad range of industries and countries.
Aesthetically pleasing, durable, and economical, Ad Art display products are
being utilized worldwide in casinos, stadiums, restaurants, banks, auto malls
and retail establishments.
Ad Art is a recognized leader in state-of-the-art electronic video display
boards, which are found in some of the world's largest sports stadiums, casinos,
airports, theaters, auto malls, churches, shopping centers, convention centers
and other businesses, including:
. Hiram Bithorn Stadium in San Juan, Puerto Rico;
. Atanasio Girardot Stadium in Medellin, Colombia;
. Chelsea Football Stadium in London;
. Stanford University in Palo Alto ,California;
. The University of Houston, Texas;
. the Rio, Circus Circus, Monte Carlo, the Bellagio and Excalibur
in Las Vegas;
. and in Times Square, Mexico, the Philippines and many other
countries.
These systems have the ability to display full colors and project live
video images. The systems use light emitting diodes (LED) rather than cathode
ray tubes (T.V.), substantially lowering the cost of
15
<PAGE>
acquisition and ownership and are rated at 50,000 hours of life. The displays
can be used for indoor and outdoor applications and are louvered so that they
are clear and bright in direct sunlight. Operation of these displays is
controlled by super pentium computers.
Ad Art is the recognized leader in the design, manufacture and installation
of spectacular signs as typically viewed in Las Vegas, Nevada. Currently the
gaming market is expanding rapidly in Atlantic City, along the Mississippi and
on Native American lands nationally. Historically, Ad Art's core business has
been selling to and servicing its well established regional and national
accounts in five broad customer categories: banks, fast food, merchants, oil
companies, and entertainment. Ad Art signs, for market leaders like Wells Fargo
Bank, McDonald's, Federal Express, Blockbuster Video, Pizza Hut, Auto Zone,
Office Depot, Texaco, Planet Hollywood, The Disney Store and many others, can be
seen on virtually any street corner throughout the U.S. and Canada. The reason
each of these $1,000,000+ accounts relies on Ad Art is its superior creative
services, combined with super-bright displays, quality of manufacture and
competitive pricing.
Don Bell Industries, Inc., acquired in 1995, specializes in the design and
-------------------------
manufacture of custom-designed corporate identification systems and electronic
message centers for commercial clients. These include shopping malls,
speedways, theme parks, vacation destinations and other facilities with a themed
image. In fiscal 1997, DBI provided 36% of consolidated sales.
DBI's customer base is comprised of the theme park, food service and
retailing industries. Our customers include, among others:
. Disney
. Walgreens
. Hard Rock Cafe
. Las Vegas, Daytona and Atlanta Motor Speedways
. Sea World
. Universal Studios
. Public Storage
. Hess Oil
. Walmart
. Denny's
16
<PAGE>
J.M. Stewart Corporation, acquired in 1994, produces signs for churches and
------------------------
schools. Recently, Stewart broadened its marketing strategy to include U.S.
military and other government installations worldwide, nursing homes, and civic
organizations such as volunteer fire departments and social clubs. Stewart's
reputation for quality and integrity has enabled it to become a joint venture
partner with the Sunday School Board of the Southern Baptist Convention,
Cokesbury (Methodist; Presbyterian and others), the Gospel Publishing House
(Assemblies of God), Randall House Publishing of the Free Will Baptist Church,
the Church Growth Institute and several others. Under these joint venture
agreements, the denomination endorses Stewart to market signs to local
congregations, with Stewart remitting a percentage of sales in the form of
commissions to the parent body.
Stewart obtains other sales leads by participation in conventions of
church, school and governmental/military personnel and direct mail advertising.
It follows up on sales leads by telephone, mail and other electronic
communications. This allows Stewart's highly trained personnel to penetrate
nationwide and worldwide markets from one centralized location.
Each sign is accompanied by a 20-year comprehensive warranty that is
indicative of Stewart's confidence in the quality and long life of its
products,. Warranty claims have historically been di mininus. Stewart is the
leader in its niche markets and is currently producing sales of as many as 200
signs each month.
Certified Maintenance Services, Inc., acquired in 1997, expanded our
------------------------------------
maintenance and service business, which services indoor and outdoor signage and
lighting. The installation and service department of Don Bell was combined with
Certified to form a single service division. The combined entities now have
nationwide capabilities through a network of subcontractors and a fleet of 31
service trucks in Tampa, Orlando and Port Orange, Florida; Las Vegas, Nevada,
and Atlanta, Georgia.
La-Man Corporation operates our original business, filtration products.
------------------
Compressed air free of contaminants is required in a host of applications.
Users include dental offices and clinics, hospitals, bakeries, spray painters,
sandblasters, oil drillers, staplers, nailers, air doors, injection molders and
even atomic energy plants, among many others. The product size varies from a
one pound unit for small applications such as dental and medical offices to a
300 pound unit for heavy industrial applications. La-Man currently manufactures
10 sizes of the Extractor/Dryer(R).
Although the filtration segment provided only 5% of fiscal 1998 revenues,
it contributed 20% of operating profits. Our filter products reduce or
eliminate water and other foreign contaminants from compressed air lines. An
air tool lubricator is sold as a companion or stand-alone product.
Essentially flat sales in the division for the three years prior to 1998
reflected an insufficient emphasis on marketing, other than limited advertising
and trade show appearances. In early 1997, a
17
<PAGE>
more aggressive marketing program was instituted, including reorganization of
sales and marketing, the addition of field representatives, increased
advertising to end users and increased trade show exhibits. In addition, La-Man
company instituted an active program to recruit new distributors. Management
expects this new marketing strategy to increase sales in the future.
YEAR 2000 COMPLIANCE
We have addressed Year 2000 issues in all of our major accounting and
production computer systems, as have our vendors who supply us with software
packages. We have also addressed Y2K issues with our various suppliers as to
the status of their compliance efforts. Generally, we are being advised that
our suppliers are or will become compliant on a timely basis; however, any
problems of vender noncompliance are mitigated by access to a large number of
alternate supply sources.
DESCRIPTION OF CAPITAL STOCK
Our authorized capital stock consists of 50,000,000 shares of Common Stock
and 50,000,000 shares of preferred stock, each having the par value of $.001 per
share. As of January 25, 1999, 5,511,693 shares of Common Stock were
outstanding and no shares of preferred stock were outstanding.
COMMON STOCK
Our Restated Articles of Incorporation provide that each share of Common
Stock entitles its holder to one vote on all matters on which shareholders are
entitled to vote. Holders of Common Stock are entitled to receive dividends if
and when declared by our Board of Directors and are entitled to share ratably in
all of the assets of the Company available for distribution to holders of Common
Stock upon liquidation, dissolution or winding up of the Company. Holders of
Common Stock do not have preemptive or conversion rights, or cumulative voting
rights.
PREFERRED STOCK
No shares of preferred stock have been issued. The Board of Directors,
without further shareholder action, is authorized to issue all 50,000,000 shares
of preferred stock and establish the designations, dividend rights, dividend
rate, conversion rights, voting rights, terms of redemption, liquidation
preferences and all other preferences and rights of any series of preferred
stock authorized by the Board of Directors. However, the Marketplace Rules of
The Nasdaq Stock Market, Inc., limit the ability of the Board of Directors to
authorize the issuance of shares of preferred stock having certain voting rights
without the prior written approval of holders of a majority of the outstanding
shares of Common Stock.
18
<PAGE>
LEGAL MATTERS
The legality of the securities offered hereby will be passed upon for the
Company by its General Counsel, Marshall S. Harris. Mr. Harris also serves as a
Vice President and Secretary of the Company and has a three-year employment
agreement under which he receives an annual salary of $175,000 and is entitled
to incentive compensation. Mr. Harris also owns, through a self-directed IRA,
11,576 shares of Common Stock and holds options to purchase 78,150 shares at
the price of $3.39, which are not presently exerciseable.
EXPERTS
The consolidated financial statements incorporated by reference in this
Prospectus and Registration Statement have been audited by BDO Seidman, LLP,
independent certified public accountants, to the extent and for the periods set
forth in their report incorporated herein by reference, and are incorporated in
reliance upon such report given upon the authority of said firm as experts in
auditing and accounting.
19
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The estimated expenses in connection with this offering are as follows:
<TABLE>
<S> <C>
SEC Registration $4,703.35
Legal Fees and Expenses* 500.00
Accounting Fees and Expenses* 1,000.00
Miscellaneous 1,000.00
TOTAL $6,203.35
=========
</TABLE>
* Indicates expenses that have been estimated for the purpose of filing.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Subsection 1 of Section 78.751 of the Nevada General Corporation Law (the
"Nevada Law") empowers a corporation to indemnify any person who was or is a
party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the corporation) by
reason of the fact that he is or was a director, officer, employee or agent of
the corporation or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation or enterprise,
against expenses (including attorneys' fees), judgments, fines and amounts paid
in settlement actually and reasonably incurred by him in connection with such
action, suit or proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceedings, had no
reasonable cause to believe his conduct was unlawful.
Subsection 2 of Section 78.751 empowers a corporation to indemnify any
person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action or suit by or in the right of the
corporation to procure a judgment in its favor by reason of the fact that such
person acted in any of the capacities set forth above against expenses,
including amounts paid in settlement and attorneys' fees, actually and
reasonably incurred by him in connection with the defense or settlement of such
action or suit if he acted under standards similar to those set forth above,
except that no indemnification may be made in respect of any claim, issue or
matter as to which such person shall have
II-1
<PAGE>
been adjudged to be liable to the corporation or for amounts paid in settlement
to the corporation unless and only to the extent that the court in which such
action or suit was brought determines that despite the adjudication of liability
such person is fairly and reasonably entitled to indemnity for such expenses as
the court deems proper.
Section 78.751 further provides that to the extent a director or officer of
a corporation has been unsuccessful in the defense of any action, suit or
proceeding referred to in subsections (1) and (2) or in the defense of any
claim, issue or matter therein, he shall be indemnified against expenses
(including attorneys' fees) actually and reasonably incurred by him in
connection therewith; that indemnification provided for by Section 78.751 shall
not be deemed exclusive of any other rights to which the indemnified party may
be entitled; that indemnification, unless ordered by the court or for the
advancement of certain expenses, may not be made to or on behalf of any director
or officer if a final adjudication establishes that his acts or omissions
involved intentional misconduct, fraud or a knowing violation of the law and was
material to the cause of action; and that the scope of indemnification shall
continue as to directors, officers, employees or agents who have ceased to hold
such positions, and to their heirs, executors and administrators.
Sections 78.752 of the Nevada Law empowers the corporation to purchase and
maintain insurance on behalf of a director, officer, employee or agent of the
corporation against any liability asserted against him or incurred by him in any
such capacity or arising out of his status as such whether or not the
corporation would have the power to indemnify him against such liabilities under
Section 78.151.
The Articles of Incorporation and Bylaws of the Registrant provide for
indemnification or its officers and directors, substantially identical in scope
to that permitted under Section 78.151 of the Nevada Law. The Bylaws provide
that the expenses of officers and directors incurred in defending any action,
suit or proceeding, whether civil, criminal, administrative or investigative,
must be paid by the Registrant as they are incurred and in advance of the final
disposition of the action, suit or proceeding, upon receipt of an undertaking by
or on behalf of the director or officer to repay all amounts so advanced if it
is ultimately determined by a court of competent jurisdiction that the officer
or director is not entitled to be indemnified by the Registrant.
II-2
<PAGE>
ITEM 16. EXHIBITS.
Exhibit
Number Title of Exhibit
- ------ ----------------
4.3 Form of Representative's Unit Purchase Option (as revised)22/
--
4.14 8% Convertible Note of Registrant, dated September 7, 1995, in
principal amount of $750,000 to Worrell Enterprises, Inc.28/
--
4.16 Convertible Loan Agreement Dated March 2, 1998 by and between
Registrant and Renaissance Capital Growth & Income Fund III, Inc.,
Renaissance US Growth & Income Trust PLC and Renaissance Capital
Group, Inc.36/
--
4.17 8.75% Convertible Debenture Due March 2, 2005 issued to Renaissance
Capital Growth & Income Fund III, Inc.36/
--
4.18 8.75% Convertible Debenture Due March 2, 2005 issued to Renaissance US
Growth & Income Trust PLC36/
--
4.19 Stock Purchase Warrant issued to Renaissance Capital Growth & Income
Fund III, Inc.36/
--
4.20 Stock Purchase Warrant issued to Renaissance US Growth & Income Trust
PLC36/
--
4.27 Unit Purchase Option Amendment dated as of January 4, 1999 between
Registrant and Peter D. Mathews40/
--
4.28 Stock Option Agreement dated March 18, 1997 between Registrant and
Halyx Partners, Inc. d/b/a The Howell Group
4.29 Stock Option Agreement dated August 29, 1997 between Registrant and
Halyx Partners, Inc. d/b/a The Howell Group
4.30 Stock Purchase Warrant dated as of March 2, 1998 issued to Croft &
Bender LLC by Registrant
4.31 Stock Option Agreement dated July 1, 1998 between Registrant and
Pacific Consulting Group, Inc.
5.1 Opinion of Marshall S. Harris, General Counsel of the Registrant
23.1 Consent of BDO Seidman, LLP
24.1 Power of Attorney
_____________________
22/ Filed as an exhibit to Registrant's Post Effective Amendment No. 4 to
- --
Registration Statement on Form S-1 (Registration No. 33-54230), and
incorporated by reference.
28/ Filed as an exhibit to Registrant's Form 8-K dated September 7, 1995 and
- --
filed effective September 22, 1995 (File No. 0-14427), and incorporated by
reference.
36/ Filed as an exhibit to Registrant's Form 8-K dated March 2, 1998 and filed
- --
March 12, 1998 (File No. 0-144227), and incorporated by reference.
38/ Filed as an exhibit to Registrant's Form 10-KSB for the period ending June
- --
30, 1998 (File No. 0-14427), and incorporated by reference.
40/ Filed as an exhibit to Registrant's Form 8-K dated December 29, 1998 and
- --
filed January 15, 1999 (File No. 0-144227), and incorporated by reference.
II-3
<PAGE>
ITEM 7. UNDERTAKINGS.
A. Rule 415 Offering
-----------------
The undersigned Registrant hereby undertakes:
(1) For purposes of determining any liability under the Securities Act,
each filing of the registrant's annual report pursuant to Section
13(a) or Section 15(d) of the Securities Exchange Act of 1934 that is
incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at the time shall
be deemed to be the initial bona fide offering thereof.
(2) For purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of prospectus filed as
part of this registration statement in reliance upon Rule 430A and
contained in a form of prospectus filed by the registrant pursuant to
Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be
deemed to be part of this registration statement as of the time it was
declared effective.
(3) For the purposes of determining any liability under the Securities Act
of 1933, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating
to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering
thereof.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the provisions described under Item 15 above or
otherwise, the registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the event that a claim
for indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted against the registrant by such director, officer or
controlling person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.
II-4
<PAGE>
B. Indemnification
---------------
Insofar as indemnification for liabilities arising under the Securities Act
of 1933, as amended, may be permitted to directors, officers and controlling
persons of the registrant pursuant to the provisions described under Item 15
above, or otherwise, we have been advised that in the opinion of the SEC such
indemnification is against public policy as expressed in the 1933 Act and
therefore is unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
C. Rule 430A
---------
The undersigned will:
(1) For determining any liability under the Securities Act of 1933, treat
the information omitted from the form of prospectus filed as part of
this Registration Statement in reliance upon Rule 430A and contained
in the form of a prospectus filed by the small business issuer under
rule 424(b) (1) or (4) or 497(h) under the Securities Act as part of
this Registration Statement as of the time the SEC declared it
effective.
(2) For any liability under the Securities Act of 1933, treat each post-
effective amendment that contains a form of prospectus as a new
Registration Statement for the securities offered in the Registration
Statement, and that the offering of the securities at that time as the
initial bona fide offering of those securities.
II-5
<PAGE>
SIGNATURES
In accordance with the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements of filing on Form S-3 and authorized this registration
statement to be signed on its behalf by the undersigned, in the County of
Orange, State of Florida, on the 29th day of January, 1999.
DISPLAY TECHNOLOGIES, INC.
By: /s/ J. William Brandner
-----------------------
J. William Brandner
President and Chief Executive Officer
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below
constitutes and appoints J. Melvin Stewart and J. William Brandner, as each of
their true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign any or all amendments (including post-effective
amendments) to this Registration Statement, and to file the same, with all
exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, full power and authority to do and perform each and every act and thing
requisite or necessary to be done in and about the premises, as ful to all
intents and purposes as he might and could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents or either of them or their
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
In accordance with the requirements of the Securities Act of 1933, this
Registration Statement was signed by the following persons in the capacities and
on this 29th day of January, 1999.
Signature and Title
-------------------
/s/ J. Melvin Stewart /s/ Lester Jacobs
- --------------------------------------------- -----------------------------
J. Melvin Stewart Lester Jacobs
Chairman of the Board & Director Director
/s/ J. William Brandner /s/ Terry J. Long
- --------------------------------------------- -----------------------------
J. William Brandner Terry J. Long
President, Chief Executive Officer & Director Director
/s/ Gary D. Bell /s/ Lou A. Papais
- --------------------------------------------- -----------------------------
Gary D. Bell Lou A. Papais
Director Director
/s/ Edwin M. Freakley /s/ William A. Retz
- --------------------------------------------- -----------------------------
Edwin M. Freakley William A. Retz
Director Director
/s/ Thomas N. Grant /s/ Robert M. Smither
- --------------------------------------------- ----------------------------
Thomas N. Grant Robert M. Smither, Jr.
Director Director
/s/ Philip Howe Hoard
- ---------------------------------------------
Philip Howe Hoard
Vice President & Director
II-6
<PAGE>
EXHIBIT
Number DESCRIPTION
- ------ -----------
4.28 Stock Option Agreement dated March 18, 1997 between Registrant and
Halyx Partners, Inc. d/b/a The Howell Group
4.29 Stock Option Agreement dated August 29, 1997 between Registrant and
Halyx Partners, Inc. d/b/a The Howell Group
4.30 Stock Purchase Warrant dated as of March 2, 1998 issued to Croft &
Bender LLC by Registrant
4.31 Stock Option Agreement dated July 1, 1998 between Registrant and
Pacific Consulting Group, Inc.
5.1 Opinion of Marshall S. Harris, General Counsel of the Registrant
23.1 Consent of BDO Seidman, LLP
24.1 Power of Attorney
II-7
<PAGE>
EXHIBIT 4.28
STOCK OPTION AGREEMENT
This Warrant Agreement ("Agreement") is made and entered into as of March
18, 1997, between LA-MAN CORPORATION ("La-Man"") and [HALYX PARTNERS, INC., a
Texas corporation] ("Halyx").
RECITALS:
La-Man and Halyx, d/b/a The Howell Group, are parties to an agreement dated
February 12, 1997 (the "Investor Relations Agreement"), under the terms of which
Halyx is to perform various investor relations services to or for the benefit of
La-Man, in consideration of certain fees and the granting by La-Man to Halyx of
certain options to purchase newly issued shares of common stock, par value $.001
per share ("Common Stock"), of La-Man; and
The purpose of this Agreement is to embody the agreement reflected in the
Investor Relations Agreement with respect to the granting by La-Man to Halyx of
certain options to purchase newly issued shares of Common Stock from La-Man;
NOW, THEREFORE, La-Man and Halyx agree as follows:
SECTION 1. COMMON STOCK PURCHASE OPTIONS. As additional consideration
under the Investor Relations Agreement, La-Man hereby grants to Halyx options
("Option" or "Options") to purchase up to 50,000 newly issued shares of Common
Stock (the "Underlying Shares") from La-Man on the following terms and
conditions:
(a) The exercise price shall be $1.5422 per share, such price being
equal to 105% of the quoted trading price of the Common Stock on the March 18,
1997 grant date, as published by The Nasdaq SmallCap Market.
(b) The expiration date of the Options shall be March 17, 2001.
(c) The Options shall vest and become exercisable as follows:
(i) Options for 15,000 Underlying Shares shall vest and become
irrevocable and exercisable on and after March 18, 1997;
(ii) Options for 15,000 Underlying Shares shall vest and become
irrevocable and exercisable on September 18, 1997; and
<PAGE>
(iii) Options for the remaining 20,000 Underlying Shares shall
vest and become irrevocable and exercisable on March 18,
1998.
(d) Options shall be exercised in blocks of 1,000 shares or any
multiple thereof.
(e) Notwithstanding any provisions contained in this Agreement to the
contrary, any and all Options not vested upon the effective date of termination
of the Investor Relations Agreement shall terminate, be deemed null and void,
and be of no further force and effect.
SECTION 2. INVESTMENT REPRESENTATION. Halyx represents and warrants
to La-Man as follows:
(a) The Options and, upon exercise of the Options, the Underlying
Shares are being acquired for Halyx's account and not with a view to any public
distribution thereof (such securities, together with all securities issued in
connection with any stock dividend on, stock split of, reclassification of or
recapitalization in respect of such securities, are sometimes hereinafter
referred to as the "Securities").
(b) Halyx has sufficient knowledge and experience in financial and
business matters that Halyx is capable of evaluating the risks and merits of an
investment in the Securities. Halyx has evaluated the risks of holding the
Securities and has determined that the Securities are a suitable investment, and
Halyx has adequate financial resources for an investment of such character, and
at the date hereof could bear a complete loss of such investment.
(c) Halyx has had the opportunity to ask questions of and receive
answers from La-Man concerning the financial condition, business and operations
of La-Man and its subsidiaries, and has had the opportunity to obtain such
information in order to permit Halyx to evaluate the merits and risks of
investing in the Securities.
(d) Halyx understands that the issuance of the Securities to Halyx
has not been reviewed by the Securities and Exchange Commission (the
"Commission") nor by agencies or officials of any other state or jurisdiction,
including the state in which Halyx is domiciled, since the transaction in which
the Securities are being issued to Halyx is intended to be exempt from the
registration requirements of the Securities Act and other applicable laws.
SECTION 3. PROPOSED DISPOSITIONS. The sale, transfer, pledge,
hypothecation, or other disposition (any such transaction being referred to
hereinafter as a "disposition") of any of the Securities may be made only in
compliance with this Agreement. Prior to any disposition of the Securities
without registration under the Securities Act, Halyx shall give written notice
to the Treasurer of La-Man in accordance with Section 11 describing the manner
and circumstances of the proposed disposition and containing such other
information as necessary to enable counsel to La-Man to determine whether the
disposition complies with the Securities Act; provided, however, that Halyx
shall not effect the proposed disposition until La-Man has notified Halyx that
in the
2
<PAGE>
reasonable opinion of its counsel registration of the Securities under the
Securities Act is not required in respect of the proposed disposition.
SECTION 4. RESTRICTIVE LEGENDS. The Securities shall not be
transferable except upon the conditions specified in this Agreement, which
conditions are intended to ensure compliance with the provisions of the
Securities Act with respect to the transfer of any of the Securities. Until:
(a) the Securities are sold in a public distribution under a
registration statement under the Securities Act or pursuant to Rule 144
promulgated under the Securities Act;
(b) in the reasonable opinion of counsel to La-Man, the legend is no
longer necessary to provide assurance of compliance with the Securities Act; or
(c) the removal of the legend by the transfer agent upon the
presentation to it, after the expiration of three years from the date the
applicable Securities are issued and fully paid for, of a stock or warrant
certificate or certificates representing the Securities, which presentation
shall be deemed a representation by the record holder that the record holder (i)
has been the beneficial owner of such Securities for at least three years and
(ii) has not entered into any short sale or put or other option transaction
which would toll the holding period under Rule 144(d) promulgated under the
Securities Act and therefore is free to sell the securities under Rule 144(k)
promulgated under the Securities Act; each certificate representing the
Securities shall bear the following legend:
"The securities represented by this certificate have not been
registered under the Securities Act of 1933, as amended (the
"Act"). The securities have been acquired for investment and may
not be sold, transferred, pledged, hypothecated, or otherwise
disposed of in the absence of registration or the availability of
an exemption from registration under the Act and regulations
promulgated thereunder or as otherwise provided in accordance
with the terms and provisions of a certain Stock Option Agreement
dated as of March 18, 1997, a copy of which is on file at the
office of the Corporation."
SECTION 5. REQUESTED REGISTRATION.
(a) If, during the period from March 18, 1998 to March 17, 2001, La-
Man receives a written request signed by one or more registered holders of not
less than 51% of all issued and unissued Underlying Shares represented by the
Securities, stating that one or more holders ("Demand Holder" or "Demand
Holders") proposes to sell or distribute publicly such issued and issuable
Underlying Shares (the "Registerable Securities"), La-Man shall use its
reasonable best efforts to file, and to cause to become effective, a
registration statement under the Securities Act covering such Registerable
Securities specified in the written request. However, La-Man shall not be
required to effect the registration if (i) La-Man has filed previously a
registration statement under the Securities Act which became effective within
the 12 months prior to receipt of the written request
3
<PAGE>
and which was kept current for the period referred to in Section 6; (ii) La-Man
could be required to undergo a special interim audit in order to comply with the
request (unless the Demand Holders execute an undertaking, reasonably
satisfactory to La-Man, to pay all fees and expenses of the special interim
audit); (iii) the Demand Holders could sell publicly under Rule 144 promulgated
under the Securities Act the number of securities the holders propose to have
registered; or (iv) in the opinion of counsel for La-Man, the securities may be
publicly sold without registration under the Securities Act or La-Man is then
prohibited under the Securities Act from registering such Securities.
(b) La-Man shall be entitled to postpone, for a period of time not to
exceed 120 days from the date it receives the written request pursuant to
Section 5(a), the filing of any registration statement otherwise required to be
prepared and filed by it, if, at the time it receives the request, La-Man
determines, in its sole discretion, that the registration and offering could
interfere with any financing, acquisition, corporate reorganization, or other
material transaction involving La-Man or any of its affiliates and gives any
Demand Holder requesting registration written notice of its determination. If
La-Man shall postpone the filing of a registration statement, the Demand Holder,
within 60 days after receipt of the notice of postponement, shall notify in
writing the Treasurer of La-Man if such holder has determined to withdraw such
request for registration. In the event the Demand Holder does not withdraw such
request for registration, La-Man shall file a registration statement by the
later of (i) the date to which La-Man determined to postpone the filing of the
registration statement or (ii) 90 days from the latest date on which a Demand
Holder advises the Treasurer of La-Man that such holder has determined not to
withdraw his request for registration.
(c) The registration right provided in this Section 5 is a one-time
right that, subject to the provisions of this Section 5, may only be exercised
once, and may only be exercised by the registered holder or holders of not less
than 51% of all issued and unissued Underlying Shares represented by the
Securities.
SECTION 6. "PIGGYBACK" RIGHTS. If, at any time, La-Man proposes to
register any of its equity securities under the Securities Act (other than a
registration under SEC Form S-8 or a successor form), any registered holder or
holders of Options or shares of Common Stock representing not less than 51% of
all Registerable Securities shall be entitled, on each such occasion, to have
any or all of such Registerable Securities owned by them registered and included
in such registration statement subject to the provisions hereof. On each such
occasion, La-Man shall give written notice to each holder of its intention to
effect such registration. Upon the written request of such holders, given
within 15 days after receipt of notice from La-Man, that La-Man include their
Registerable Securities in the registration statement (which request shall state
the number or amount of Registerable Securities to be disposed of), La-Man will
use its reasonable best efforts to cause the Registerable Securities which the
holder has requested to be registered under the Securities Act in connection
with such registration to be registered and to be included in the offering
covered by the registration statement; provided, however, that La-Man shall not
be required to effect registration of any securities which: (i) in the
reasonable opinion of counsel for La-Man, may be sold publicly without
registration under the Securities Act or the registration of which is then
prohibited under the
4
<PAGE>
Securities Act; or (ii) may be sold publicly pursuant to Rule 144 promulgated
under the Securities Act. If, and to the extent that, in the reasonable judgment
of La-Man or the managing underwriter of the proposed offering for which the
registration statement has been or is to be filed, if any, the offering of some
or all of the Securities to be sold for the account of one or more holders which
La-Man has been requested to register pursuant to this Section 6 could
unreasonably interfere with or otherwise be disadvantageous in respect of the
proposed offering, La-Man or the managing underwriter, at its option, may
require either that (i) all La-Man equity securities proposed to be sold for the
account of La-Man be included in the offering and that the number of Securities
to be sold for the account of one or more holders pursuant to this Section 6 be
reduced proportionately to an aggregate number acceptable to La-Man and the
managing underwriter, if any; or (ii) the offering of Registerable Securities
for the account of one or more holders be postponed until 120 days after the
effective date of the registration statement (in which case La-Man will keep the
registration statement current until at least 180 days after the effective date
thereof). In any such case, the holders shall have the right to withdraw such
request for inclusion of any or all of such Registerable Securities in the
registration statement.
SECTION 7. DELAY IN REGISTRATION. Notwithstanding any provisions of
Section 5 or Section 6 to the contrary, La-Man may delay filing a registration
statement, and may withhold efforts to cause the registration statement to
become effective, if La-Man determines in good faith that such registration
might (i) interfere with or affect the negotiation or completion of any
transaction that is being contemplated by La-Man (whether or not a final
decision has been made to undertake such transaction) at the time the right to
delay is exercised, or (ii) involve initial or continuing disclosure obligations
that might not be in the best interest of La-Man's shareholders. If, after a
registration statement becomes effective, La-Man advises the holders of
registered shares that La-Man considers it appropriate for the registration
statement to be amended, the holders of such shares shall suspend any further
sales of their registered shares until La-Man advises them that the registration
statement has been amended. The 180-day time period referred to in Section 6
during which the registration statement must be kept current after its effective
date shall be extended for an additional number of business days equal to the
number of business days during which the right to sell shares was suspended
pursuant to the preceding sentence, but in no event will La-Man be required to
update the registration statement after December 31, 2002.
SECTION 8. EXPENSES OF REGISTRATION. La-Man shall pay all expenses
incurred in connection with the registration and sale of Securities pursuant to
Section 5 or 6, including without limitation, all Commission and blue sky
registration and filing fees, printing expenses, fees and disbursements of
counsel for La-Man and blue sky counsel, fees and disbursements of accountants
for La-Man (including those incurred in a limited review of financial statements
not constituting an audit), transfer agents' and registrars' fees, fees and
disbursements of experts used by La-Man in connection with the registration and
expenses incidental to any post-effective amendment to such registration
statement; provided, however, that the holder who is disposing of Registerable
Securities (sometimes referred to herein as a "Registering Seller") shall pay,
except as set forth above, all fees and disbursements of such holder's counsel
and all transfer taxes and the portion of the underwriters' discounts,
commissions and expenses attributable to the Securities being offered and sold
by the
5
<PAGE>
Registering Seller. In no event shall a Registering Seller be liable for (i) the
compensation of employees and officers of La-Man or (ii) any fees or expenses of
La-Man's accountants except in connection with a special interim audit required
solely for the purposes of the registration statement to which the Registering
Seller agreed.
SECTION 9. OBLIGATIONS IN REGISTRATION.
(a) If and whenever La-Man is obligated by the provisions of this
Agreement to effect the registration of any shares of Common Stock under the
Securities Act, La-Man will, in accordance with Section 8 and as expeditiously
as possible:
(i) prepare and file with the Commission a registration
statement with respect to such shares, use its reasonable best efforts to cause
the registration statement to become and remain effective and prepare and file
any amendments and supplements thereto and to the prospectus used in connection
therewith as may be necessary to keep the registration statement and prospectus
current and to comply with the provisions of the Securities Act and the rules
and regulations promulgated thereunder with respect to the disposition of the
shares covered by the registration statement for the period required to effect
the distribution of such shares, but in no event shall La-Man be required to do
so for a period of more than 120 days following the effective date of the
registration statement (180 days, if the offering of such shares was delayed
pursuant to Section 6(b) or Section 7);
(ii) furnish to the Registering Seller the number of copies of
preliminary, final, amended or supplemented prospectuses, in conformity with the
requirements of the Securities Act and the rules and regulations promulgated
thereunder, and other documents as reasonably may be required in order to
facilitate the disposition of such shares, but only while La-Man is required
under the provisions hereof to cause the registration statement to remain
current; and
(iii) use its best efforts to register or qualify Registerable
Securities covered by the registration statement under the securities or blue
sky laws of those jurisdictions in the United States as the Registering Seller
reasonably shall request, and do any and all other acts and things which may be
necessary to enable each Registering Seller covered by the registration
statement to consummate the disposition of such shares; provided, however, that
in no event shall La-Man be required to qualify to do business as a foreign
corporation or as a dealer in any jurisdiction where it is not qualified; to
conform the composition of its assets at the time to the securities or blue sky
laws of any jurisdiction; to execute or file any general consent to service of
process under the laws of any jurisdiction; to take any action that would
subject it to service of process in suits other than those arising out of the
offer and sale of the shares covered by the registration statement; or to
subject itself to taxation in any jurisdiction where it has not theretofore done
so.
(b) All Registering Sellers shall furnish to La-Man the information,
consents and other documents relating to La-Man and the Registering Sellers as
La-Man shall request and as shall be reasonably required in connection with the
action to be taken by La-Man.
6
<PAGE>
(c) To the extent that any Underlying Shares issuable upon exercise
of Options are included in a registration statement pursuant to Section 5 or
Section 6, the holder or holders of all such Options upon which such registered
Underlying Shares are issuable shall fully exercise all such Options within 90
business days following the date on which such registration statement becomes
effective under the Securities Act.
SECTION 10. INDEMNIFICATION.
(a) By La-Man. In the event of any registration under the Securities
---------
Act of any shares pursuant to this Agreement, La-Man shall indemnify and hold
harmless any Registering Seller and any underwriter of any Registering Seller,
and each other person, if any, who controls the Registering Seller or
underwriter within the meaning of the Securities Act, against any losses,
claims, damages, or liabilities, joint or several, to which each indemnified
party may become subject, under the Securities Act or otherwise, but only to the
extent the 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, on the effective date thereof, in any
registration statement under which the Securities were registered under the
Securities Act, in any preliminary prospectus (if used prior to the effective
date of the registration statement) or in any summary or final prospectus or in
any amendment or supplement thereto (if used during the period La-Man is
required to keep the registration statement current); or arise out of, or are
based upon, the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements made therein,
in the light of the circumstances under which they are made, not misleading and
will reimburse each indemnified party for all legal or other expenses reasonably
incurred by him in connection with investigating or defending any loss, claim,
damage, liability, or action, excluding any amounts paid in settlement of any
litigation, commenced or threatened, if the settlement is effected without the
prior written consent of La-Man; provided, however, that La-Man shall not be
liable in any case to the extent that any loss, claim, damage, liability, or
expense arises out of, or is based upon, an untrue statement or omission made in
the registration statement, the preliminary, summary or final prospectus, or any
amendment or supplement thereto in reliance upon and in conformity with written
information furnished to La-Man by or on behalf of the indemnified party
specifically for use in the preparation thereof; and provided further that La-
Man will not indemnify any underwriter of any Registering Seller or any person
who is associated with or controls the underwriter with respect to any
preliminary or summary prospectus if the underwriter failed to send or to give a
copy of the final prospectus to the person alleging any loss, claim, damage,
liability, action or expense at or prior to the written confirmation of the sale
of such shares to the person, if the untrue statement or omission concerned had
been corrected in the final prospectus and if La-Man advised the underwriter in
writing of the correction at or before the time the final prospectus became
available.
(b) By the Registering Seller. In the event of any registration under
-------------------------
the Securities Act of shares held by one or more holders pursuant to this
Agreement, each Registering Seller severally shall indemnify and hold harmless
La-Man, each of its directors, each of its officers who has signed the
registration statement and each other person, if any, who controls La-Man within
the
7
<PAGE>
meaning of the Securities Act, against any losses, claims, damages, liabilities,
joint or several, to which the indemnified party may become subject under the
Securities Act or otherwise, but only to the extent the losses, claims, damages
or liabilities (or actions in respect thereof) (i) arise out of, or are based
upon, any untrue statement or alleged untrue statement of any material fact
contained, on the effective date thereof, in any registration statement under
which any such shares were registered under the Securities Act, in any
preliminary prospectus (if used prior to the effective date of the registration
statement) or in any final or summary prospectus or in any amendment or
supplement thereto (if used during the period La-Man is required to keep the
registration statement current); or (ii) arise out of, or are based upon, the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements made therein, in the light of
the circumstances under which they were made, not misleading and each
Registering Seller severally shall reimburse each indemnified party for all
legal or other expenses reasonably incurred by him in connection with
investigating or defending any loss, claim, damage, liability, action or expense
excluding any amounts paid in settlement of any litigation, commenced or
threatened, if the settlement is effected without the prior written consent of
the Registering Seller; provided, however, that the indemnification or
reimbursement shall be payable only if, and to the extent that, any loss, claim,
damage, liability, action or expense arises out of, or is based upon, an untrue
statement or omission made in the registration statement, the preliminary, final
or summary prospectus, or any amendment or supplement thereto, in reliance upon
and in conformity with written information furnished to La-Man by the
Registering Seller specifically for use in the preparation thereof.
(c) Actions Commenced. If a third party commences any action or
-----------------
proceeding against an indemnified party related to any of the matters subject to
indemnification under subsections (a) or (b) of this Section 10, the indemnified
party promptly shall notify the indemnifying party or parties in writing of the
amount claimed, the commencement of, and the basis for the claim. In case any
action is brought against an indemnified party and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate in, and, to the extent that it so chooses, jointly with
any other indemnifying party similarly notified, to assume the defense thereof,
with counsel reasonably satisfactory to the indemnified party; and, after notice
from the indemnifying party to the indemnified party of its election to assume
the defense thereof, the indemnifying party shall not be liable for any legal or
other expenses subsequently incurred by the indemnified party in connection with
the defense thereof; provided, however, that if (i) the indemnifying party fails
to take reasonable steps necessary to defend diligently the claim within 20 days
after receiving notice from the indemnified party to the effect that the
indemnified party believes it has failed to do so, (ii) the indemnified party is
a defendant in any action or proceeding which also is brought against the
indemnifying party and reasonably shall have concluded that there may be legal
defenses available to the indemnified party which are not available to the
indemnifying party, or (iii) representation of both parties by the same counsel
is otherwise inappropriate under applicable standards of professional conduct,
the indemnified party shall have the right to assume or continue its own defense
and the indemnifying party shall be liable for any expenses therefor.
8
<PAGE>
(d) Additional Rights. Any indemnity agreements contained herein
-----------------
shall be in addition to any other rights to indemnification or contribution
which any indemnified party may nave pursuant to law or contract and shall
remain operative and in full force and effect regardless of any investigation
made or omitted by or on behalf of any indemnified party.
SECTION 11. NOTICES. Any notice or other communication required or
permitted hereunder shall be in writing and shall be delivered personally,
telegraphed, telexed, sent by facsimile transmission (provided acknowledgment of
receipt thereof is delivered to the sender) or sent by certified, registered or
express mail, postage prepaid. Any such notice shall be deemed given when so
delivered personally, telegraphed, telexed or sent by facsimile transmission or,
if mailed, three days after the date of deposit in the United States mails as
follows:
If to Halyx, to:
Halyx Partners, Inc.
6510 Abrams Road, Suite 570
Dallas, Texas 75231
Attention: Larry E. Halxy
President
If to La-Man, to:
La-Man Corporation
2180 West State Road 434
Suite 6136
Longwood, Florida 32779
Attention: Mr. J. William Brandner
President and Chief Executive Officer
with a copy to:
Marshall S. Harris, P.A.
Broad and Cassel
390 North Orange Avenue, Suite 1100
Orlando, Florida 32801
or such other address as any of the above shall have specified by notice
hereunder.
12. SECTION 13. AMENDMENT; WAIVER. This Agreement may not be amended except
by an instrument in writing signed on behalf of each of the parties hereto. The
waiver by any party hereto of any condition or of a breach of any other
provision of this Agreement shall not operate or be construed as a waiver of any
other condition or any other provision or subsequent breach. The waiver by any
party of any of the conditions precedent to its obligations under this Agreement
shall
9
<PAGE>
not preclude it from seeking redress for breach of this Agreement other than
with respect to the condition so waived. All rights and remedies of any party to
this Agreement shall be cumulative and concurrent and may be exercised
singularly, successively or concurrently, at the sole discretion of such party
and may be exercised as often as occasion therefor may exist.
SECTION 14. GOVERNING LAW; VENUE. This Agreement shall be governed by
and construed in accordance with the laws of the State of Florida, without
giving effect to the principles of conflicts of laws thereof. Each of the
parties hereto agrees that any suit, action or proceeding with respect to this
Agreement shall be brought against it in any state or federal court of competent
jurisdiction in Orange County, Florida and irrevocably waives any (a) right of
immunity that such party may now have or hereafter acquire from service of
process or the jurisdiction of the aforesaid courts and (b) any objection that
such party may now have or hereafter acquire to the laying of venue of any such
suit, action or proceeding in any such court. The parties hereby irrevocably
accept and submit themselves to the jurisdiction of such courts in any such
suit, action or proceeding, and agree that final judgment (with the exhaustion
of all appeals) shall be conclusive and binding in any jurisdiction in which
such party resides or owns property.
SECTION 15. BINDING EFFECT; ASSIGNMENT. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors, assigns and legal representatives. Except as otherwise specified
herein, neither this Agreement, nor any right hereunder, may be assigned by any
party hereto without the prior written consent of the other party hereto.
SECTION 16. ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement and understanding between the parties with respect to the subject
matter hereof and supersedes any and all other agreements, arrangements and
understandings among the parties with respect to such subject matter, and no
agreements, arrangements, understandings, representations or warranties with
respect to such subject matter shall be binding upon the parties unless
specified herein or therein.
SECTION 17. COUNTERPARTS. This Agreement may be executed by the parties
in separate counterparts, each of which when so executed and delivered shall be
an original, but all such counterparts shall together constitute one and the
same instrument. Each counterpart may consist of a number of copies hereof each
signed by less than all, but together signed by all of the parties hereto.
SECTION 18. HEADINGS. The headings in this Agreement are for reference
only, and shall not affect the interpretation of this Agreement.
SECTION 19. EXPENSES. Except as otherwise specifically provided herein,
the parties to this Agreement shall bear their respective expenses incurred in
connection with the preparation, execution and delivery of this Agreement,
including without limitation all fees and expenses of agents, representatives
and counsel.
10
<PAGE>
IN WITNESS WHEREOF, this Agreement has been duly signed by or on behalf of
each of La-Man and Halyx as of the date first above written.
LA-MAN CORPORATION
By: /s/ J. William Brandner
-------------------------------
J. William Brandner, President
[HALYX PARTNERS, INC.]
By: /s/ Larry E. Howell
-------------------------------
Larry E. Howell, President
11
<PAGE>
EXHIBIT 4.29
STOCK OPTION AGREEMENT
This Warrant Agreement ("Agreement") is made and entered into as of August
29, 1997, between LA-MAN CORPORATION ("La-Man"") and HALYX PARTNERS, INC., a
Texas corporation ("Halyx").
RECITALS:
La-Man and Halyx, d/b/a The Howell Group, are parties to an agreement dated
as of August 27, 1997(the "Investor Relations Agreement"), under the terms of
which Halyx is to perform various investor relations services to or for the
benefit of La-Man, in consideration of certain fees and the granting by La-Man
to Halyx of certain options to purchase newly issued shares of common stock, par
value $.001 per share ("Common Stock"), of La-Man; and
The purpose of this Agreement is to embody the agreement reflected in the
Investor Relations Agreement with respect to the granting by La-Man to Halyx of
certain options to purchase newly issued shares of Common Stock from La-Man;
NOW, THEREFORE, La-Man and Halyx agree as follows:
SECTION 1. COMMON STOCK PURCHASE OPTIONS. As additional consideration
under the Investor Relations Agreement, La-Man hereby grants to Halyx options
("Option" or "Options") to purchase up to 50,000 newly issued shares of Common
Stock (the "Underlying Shares") from La-Man on the following terms and
conditions:
(a) The exercise price shall be $2.5 per share, such price being
equal to 105% of the quoted trading price of the Common Stock on the August 29,
1997 grant date, as published by The Nasdaq SmallCap Market.
(b) The expiration date of the Options shall be August 28, 2001;
(c) The Options shall vest and become exercisable as follows:
(i) Options for 15,000 Underlying Shares shall vest and become
irrevocable and exercisable on and after August 29, 1997;
(ii) Options for 15,000 Underlying Shares shall vest and become
irrevocable and exercisable on August 29, 1998; and
<PAGE>
(iii) Options for the remaining 20,000 Underlying Shares shall
vest and become irrevocable and exercisable on August 29,
1999.
(d) Options shall be exercised in blocks of 1,000 shares or any
multiple thereof.
(e) Notwithstanding any provisions contained in this Agreement to the
contrary, any and all Options not vested upon the effective date of termination
of the Investor Relations Agreement shall terminate, be deemed null and void,
and be of no further force and effect.
SECTION 2. INVESTMENT REPRESENTATION. Halyx represents and warrants
to La-Man as follows:
(a) The Options and, upon exercise of the Options, the Underlying
Shares are being acquired for Halyx's account and not with a view to any public
distribution thereof (such securities, together with all securities issued in
connection with any stock dividend on, stock split of, reclassification of or
recapitalization in respect of such securities, are sometimes hereinafter
referred to as the "Securities").
(b) Halyx has sufficient knowledge and experience in financial and
business matters that Halyx is capable of evaluating the risks and merits of an
investment in the Securities. Halyx has evaluated the risks of holding the
Securities and has determined that the Securities are a suitable investment, and
Halyx has adequate financial resources for an investment of such character, and
at the date hereof could bear a complete loss of such investment.
(c) Halyx has had the opportunity to ask questions of and receive
answers from La-Man concerning the financial condition, business and operations
of La-Man and its subsidiaries, and has had the opportunity to obtain such
information in order to permit Halyx to evaluate the merits and risks of
investing in the Securities.
(d) Halyx understands that the issuance of the Securities to Halyx
has not been reviewed by the Securities and Exchange Commission (the
"Commission") nor by agencies or officials of any other state or jurisdiction,
including the state in which Halyx is domiciled, since the transaction in which
the Securities are being issued to Halyx is intended to be exempt from the
registration requirements of the Securities Act and other applicable laws.
SECTION 3. PROPOSED DISPOSITIONS. The sale, transfer, pledge,
hypothecation, or other disposition (any such transaction being referred to
hereinafter as a "disposition") of any of the Securities may be made only in
compliance with this Agreement. Prior to any disposition of the Securities
without registration under the Securities Act, Halyx shall give written notice
to the Treasurer of La-Man in accordance with Section 11 describing the manner
and circumstances of the proposed disposition and containing such other
information as necessary to enable counsel to La-Man to determine whether the
disposition complies with the Securities Act; provided, however, that Halyx
shall not effect the proposed disposition until La-Man has notified Halyx that
in the
2
<PAGE>
reasonable opinion of its counsel registration of the Securities under
the Securities Act is not required in respect of the proposed disposition.
SECTION 4. RESTRICTIVE LEGENDS. The Securities shall not be
transferable except upon the conditions specified in this Agreement, which
conditions are intended to ensure compliance with the provisions of the
Securities Act with respect to the transfer of any of the Securities. Until:
(a) the Securities are sold in a public distribution under a
registration statement under the Securities Act or pursuant to Rule 144
promulgated under the Securities Act;
(b) in the reasonable opinion of counsel to La-Man, the legend is no
longer necessary to provide assurance of compliance with the Securities Act; or
(c) the removal of the legend by the transfer agent upon the
presentation to it, after the expiration of three years from the date the
applicable Securities are issued and fully paid for, of a stock or warrant
certificate or certificates representing the Securities, which presentation
shall be deemed a representation by the record holder that the record holder (i)
has been the beneficial owner of such Securities for at least three years and
(ii) has not entered into any short sale or put or other option transaction
which would toll the holding period under Rule 144(d) promulgated under the
Securities Act and therefore is free to sell the securities under Rule 144(k)
promulgated under the Securities Act; each certificate representing the
Securities shall bear the following legend:
"The securities represented by this certificate have not been
registered under the Securities Act of 1933, as amended (the
"Act"). The securities have been acquired for investment and may
not be sold, transferred, pledged, hypothecated, or otherwise
disposed of in the absence of registration or the availability of
an exemption from registration under the Act and regulations
promulgated thereunder or as otherwise provided in accordance
with the terms and provisions of a certain Stock Option Agreement
dated as of August 29, 1997, a copy of which is on file at the
office of the Corporation."
SECTION 5. REQUESTED REGISTRATION.
(a) If, during the period from August 29, 1998 to August 29, 2001, La-
Man receives a written request signed by one or more registered holders of not
less than 51% of all issued and unissued Underlying Shares represented by the
Securities, stating that one or more holders ("Demand Holder" or "Demand
Holders") proposes to sell or distribute publicly such issued and issuable
Underlying Shares (the "Registerable Securities"), La-Man shall use its
reasonable best efforts to file, and to cause to become effective, a
registration statement under the Securities Act covering such Registerable
Securities specified in the written request. However, La-Man shall not be
required to effect the registration if (i) La-Man has filed previously a
registration statement under the Securities Act which became effective within
the 12 months prior to receipt of the written request
3
<PAGE>
and which was kept current for the period referred to in Section 6; (ii) La-Man
could be required to undergo a special interim audit in order to comply with the
request (unless the Demand Holders execute an undertaking, reasonably
satisfactory to La-Man, to pay all fees and expenses of the special interim
audit); (iii) the Demand Holders could sell publicly under Rule 144 promulgated
under the Securities Act the number of securities the holders propose to have
registered; or (iv) in the opinion of counsel for La-Man, the securities may be
publicly sold without registration under the Securities Act or La-Man is then
prohibited under the Securities Act from registering such Securities.
(b) La-Man shall be entitled to postpone, for a period of time not to
exceed 120 days from the date it receives the written request pursuant to
Section 5(a), the filing of any registration statement otherwise required to be
prepared and filed by it, if, at the time it receives the request, La-Man
determines, in its sole discretion, that the registration and offering could
interfere with any financing, acquisition, corporate reorganization, or other
material transaction involving La-Man or any of its affiliates and gives any
Demand Holder requesting registration written notice of its determination. If
La-Man shall postpone the filing of a registration statement, the Demand Holder,
within 60 days after receipt of the notice of postponement, shall notify in
writing the Treasurer of La-Man if such holder has determined to withdraw such
request for registration. In the event the Demand Holder does not withdraw such
request for registration, La-Man shall file a registration statement by the
later of (i) the date to which La-Man determined to postpone the filing of the
registration statement or (ii) 90 days from the latest date on which a Demand
Holder advises the Treasurer of La-Man that such holder has determined not to
withdraw his request for registration.
(c) The registration right provided in this Section 5 is a one-time
right that, subject to the provisions of this Section 5, may only be exercised
once, and may only be exercised by the registered holder or holders of not less
than 51% of all issued and unissued Underlying Shares represented by the
Securities.
SECTION 6. "PIGGYBACK" RIGHTS. If, at any time, La-Man proposes to
register any of its equity securities under the Securities Act (other than a
registration under SEC Form S-8 or a successor form), any registered holder or
holders of Options or shares of Common Stock representing not less than 51% of
all Registerable Securities shall be entitled, on each such occasion, to have
any or all of such Registerable Securities owned by them registered and included
in such registration statement subject to the provisions hereof. On each such
occasion, La-Man shall give written notice to each holder of its intention to
effect such registration. Upon the written request of such holders, given
within 15 days after receipt of notice from La-Man, that La-Man include their
Registerable Securities in the registration statement (which request shall state
the number or amount of Registerable Securities to be disposed of), La-Man will
use its reasonable best efforts to cause the Registerable Securities which the
holder has requested to be registered under the Securities Act in connection
with such registration to be registered and to be included in the offering
covered by the registration statement; provided, however, that La-Man shall not
be required to effect registration of any securities which: (i) in the
reasonable opinion of counsel for La-Man, may be sold publicly without
registration under the Securities Act or the registration of which is then
prohibited under the
4
<PAGE>
Securities Act; or (ii) may be sold publicly pursuant to Rule 144 promulgated
under the Securities Act. If, and to the extent that, in the reasonable judgment
of La-Man or the managing underwriter of the proposed offering for which the
registration statement has been or is to be filed, if any, the offering of some
or all of the Securities to be sold for the account of one or more holders which
La-Man has been requested to register pursuant to this Section 6 could
unreasonably interfere with or otherwise be disadvantageous in respect of the
proposed offering, La-Man or the managing underwriter, at its option, may
require either that (i) all La-Man equity securities proposed to be sold for the
account of La-Man be included in the offering and that the number of Securities
to be sold for the account of one or more holders pursuant to this Section 6 be
reduced proportionately to an aggregate number acceptable to La-Man and the
managing underwriter, if any; or (ii) the offering of Registerable Securities
for the account of one or more holders be postponed until 120 days after the
effective date of the registration statement (in which case La-Man will keep the
registration statement current until at least 180 days after the effective date
thereof). In any such case, the holders shall have the right to withdraw such
request for inclusion of any or all of such Registerable Securities in the
registration statement.
SECTION 7. DELAY IN REGISTRATION. Notwithstanding any provisions of
Section 5 or Section 6 to the contrary, La-Man may delay filing a registration
statement, and may withhold efforts to cause the registration statement to
become effective, if La-Man determines in good faith that such registration
might (i) interfere with or affect the negotiation or completion of any
transaction that is being contemplated by La-Man (whether or not a final
decision has been made to undertake such transaction) at the time the right to
delay is exercised, or (ii) involve initial or continuing disclosure obligations
that might not be in the best interest of La-Man's shareholders. If, after a
registration statement becomes effective, La-Man advises the holders of
registered shares that La-Man considers it appropriate for the registration
statement to be amended, the holders of such shares shall suspend any further
sales of their registered shares until La-Man advises them that the registration
statement has been amended. The 180-day time period referred to in Section 6
during which the registration statement must be kept current after its effective
date shall be extended for an additional number of business days equal to the
number of business days during which the right to sell shares was suspended
pursuant to the preceding sentence, but in no event will La-Man be required to
update the registration statement after December 31, 2002.
SECTION 8. EXPENSES OF REGISTRATION. La-Man shall pay all expenses
incurred in connection with the registration and sale of Securities pursuant to
Section 5 or 6, including without limitation, all Commission and blue sky
registration and filing fees, printing expenses, fees and disbursements of
counsel for La-Man and blue sky counsel, fees and disbursements of accountants
for La-Man (including those incurred in a limited review of financial statements
not constituting an audit), transfer agents' and registrars' fees, fees and
disbursements of experts used by La-Man in connection with the registration and
expenses incidental to any post-effective amendment to such registration
statement; provided, however, that the holder who is disposing of Registerable
Securities (sometimes referred to herein as a "Registering Seller") shall pay,
except as set forth above, all fees and disbursements of such holder's counsel
and all transfer taxes and the portion of the underwriters' discounts,
commissions and expenses attributable to the Securities being offered and sold
by the
5
<PAGE>
Registering Seller. In no event shall a Registering Seller be liable for (i) the
compensation of employees and officers of La-Man or (ii) any fees or expenses of
La-Man's accountants except in connection with a special interim audit required
solely for the purposes of the registration statement to which the Registering
Seller agreed.
SECTION 9. OBLIGATIONS IN REGISTRATION.
(a) If and whenever La-Man is obligated by the provisions of this
Agreement to effect the registration of any shares of Common Stock under the
Securities Act, La-Man will, in accordance with Section 8 and as expeditiously
as possible:
(i) prepare and file with the Commission a registration
statement with respect to such shares, use its reasonable best efforts to cause
the registration statement to become and remain effective and prepare and file
any amendments and supplements thereto and to the prospectus used in connection
therewith as may be necessary to keep the registration statement and prospectus
current and to comply with the provisions of the Securities Act and the rules
and regulations promulgated thereunder with respect to the disposition of the
shares covered by the registration statement for the period required to effect
the distribution of such shares, but in no event shall La-Man be required to do
so for a period of more than 120 days following the effective date of the
registration statement (180 days, if the offering of such shares was delayed
pursuant to Section 6(b) or Section 7);
(ii) furnish to the Registering Seller the number of copies of
preliminary, final, amended or supplemented prospectuses, in conformity with the
requirements of the Securities Act and the rules and regulations promulgated
thereunder, and other documents as reasonably may be required in order to
facilitate the disposition of such shares, but only while La-Man is required
under the provisions hereof to cause the registration statement to remain
current; and
(iii) use its best efforts to register or qualify Registerable
Securities covered by the registration statement under the securities or blue
sky laws of those jurisdictions in the United States as the Registering Seller
reasonably shall request, and do any and all other acts and things which may be
necessary to enable each Registering Seller covered by the registration
statement to consummate the disposition of such shares; provided, however, that
in no event shall La-Man be required to qualify to do business as a foreign
corporation or as a dealer in any jurisdiction where it is not qualified; to
conform the composition of its assets at the time to the securities or blue sky
laws of any jurisdiction; to execute or file any general consent to service of
process under the laws of any jurisdiction; to take any action that would
subject it to service of process in suits other than those arising out of the
offer and sale of the shares covered by the registration statement; or to
subject itself to taxation in any jurisdiction where it has not theretofore done
so.
(b) All Registering Sellers shall furnish to La-Man the information,
consents and other documents relating to La-Man and the Registering Sellers as
La-Man shall request and as shall be reasonably required in connection with the
action to be taken by La-Man.
6
<PAGE>
(c) To the extent that any Underlying Shares issuable upon exercise of
Options are included in a registration statement pursuant to Section 5 or
Section 6, the holder or holders of all such Options upon which such registered
Underlying Shares are issuable shall fully exercise all such Options within 90
business days following the date on which such registration statement becomes
effective under the Securities Act.
SECTION 10. INDEMNIFICATION.
(a) By La-Man. In the event of any registration under the Securities
---------
Act of any shares pursuant to this Agreement, La-Man shall indemnify and hold
harmless any Registering Seller and any underwriter of any Registering Seller,
and each other person, if any, who controls the Registering Seller or
underwriter within the meaning of the Securities Act, against any losses,
claims, damages, or liabilities, joint or several, to which each indemnified
party may become subject, under the Securities Act or otherwise, but only to the
extent the 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, on the effective date thereof, in any
registration statement under which the Securities were registered under the
Securities Act, in any preliminary prospectus (if used prior to the effective
date of the registration statement) or in any summary or final prospectus or in
any amendment or supplement thereto (if used during the period La-Man is
required to keep the registration statement current); or arise out of, or are
based upon, the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements made therein,
in the light of the circumstances under which they are made, not misleading and
will reimburse each indemnified party for all legal or other expenses reasonably
incurred by him in connection with investigating or defending any loss, claim,
damage, liability, or action, excluding any amounts paid in settlement of any
litigation, commenced or threatened, if the settlement is effected without the
prior written consent of La-Man; provided, however, that La-Man shall not be
liable in any case to the extent that any loss, claim, damage, liability, or
expense arises out of, or is based upon, an untrue statement or omission made in
the registration statement, the preliminary, summary or final prospectus, or any
amendment or supplement thereto in reliance upon and in conformity with written
information furnished to La-Man by or on behalf of the indemnified party
specifically for use in the preparation thereof; and provided further that La-
Man will not indemnify any underwriter of any Registering Seller or any person
who is associated with or controls the underwriter with respect to any
preliminary or summary prospectus if the underwriter failed to send or to give a
copy of the final prospectus to the person alleging any loss, claim, damage,
liability, action or expense at or prior to the written confirmation of the sale
of such shares to the person, if the untrue statement or omission concerned had
been corrected in the final prospectus and if La-Man advised the underwriter in
writing of the correction at or before the time the final prospectus became
available.
(b) By the Registering Seller. In the event of any registration under
-------------------------
the Securities Act of shares held by one or more holders pursuant to this
Agreement, each Registering Seller severally shall indemnify and hold harmless
La-Man, each of its directors, each of its officers who has signed the
registration statement and each other person, if any, who controls La-Man within
the
7
<PAGE>
meaning of the Securities Act, against any losses, claims, damages, liabilities,
joint or several, to which the indemnified party may become subject under the
Securities Act or otherwise, but only to the extent the losses, claims, damages
or liabilities (or actions in respect thereof) (i) arise out of, or are based
upon, any untrue statement or alleged untrue statement of any material fact
contained, on the effective date thereof, in any registration statement under
which any such shares were registered under the Securities Act, in any
preliminary prospectus (if used prior to the effective date of the registration
statement) or in any final or summary prospectus or in any amendment or
supplement thereto (if used during the period La-Man is required to keep the
registration statement current); or (ii) arise out of, or are based upon, the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements made therein, in the light of
the circumstances under which they were made, not misleading and each
Registering Seller severally shall reimburse each indemnified party for all
legal or other expenses reasonably incurred by him in connection with
investigating or defending any loss, claim, damage, liability, action or expense
excluding any amounts paid in settlement of any litigation, commenced or
threatened, if the settlement is effected without the prior written consent of
the Registering Seller; provided, however, that the indemnification or
reimbursement shall be payable only if, and to the extent that, any loss, claim,
damage, liability, action or expense arises out of, or is based upon, an untrue
statement or omission made in the registration statement, the preliminary, final
or summary prospectus, or any amendment or supplement thereto, in reliance upon
and in conformity with written information furnished to La-Man by the
Registering Seller specifically for use in the preparation thereof.
(c) Actions Commenced. If a third party commences any action or
-----------------
proceeding against an indemnified party related to any of the matters subject to
indemnification under subsections (a) or (b) of this Section 10, the indemnified
party promptly shall notify the indemnifying party or parties in writing of the
amount claimed, the commencement of, and the basis for the claim. In case any
action is brought against an indemnified party and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate in, and, to the extent that it so chooses, jointly with
any other indemnifying party similarly notified, to assume the defense thereof,
with counsel reasonably satisfactory to the indemnified party; and, after notice
from the indemnifying party to the indemnified party of its election to assume
the defense thereof, the indemnifying party shall not be liable for any legal or
other expenses subsequently incurred by the indemnified party in connection with
the defense thereof; provided, however, that if (i) the indemnifying party fails
to take reasonable steps necessary to defend diligently the claim within 20 days
after receiving notice from the indemnified party to the effect that the
indemnified party believes it has failed to do so, (ii) the indemnified party is
a defendant in any action or proceeding which also is brought against the
indemnifying party and reasonably shall have concluded that there may be legal
defenses available to the indemnified party which are not available to the
indemnifying party, or (iii) representation of both parties by the same counsel
is otherwise inappropriate under applicable standards of professional conduct,
the indemnified party shall have the right to assume or continue its own defense
and the indemnifying party shall be liable for any expenses therefor.
8
<PAGE>
(d) Additional Rights. Any indemnity agreements contained herein
-----------------
shall be in addition to any other rights to indemnification or contribution
which any indemnified party may nave pursuant to law or contract and shall
remain operative and in full force and effect regardless of any investigation
made or omitted by or on behalf of any indemnified party.
SECTION 11. NOTICES. Any notice or other communication required or
permitted hereunder shall be in writing and shall be delivered personally,
telegraphed, telexed, sent by facsimile transmission (provided acknowledgment of
receipt thereof is delivered to the sender) or sent by certified, registered or
express mail, postage prepaid. Any such notice shall be deemed given when so
delivered personally, telegraphed, telexed or sent by facsimile transmission or,
if mailed, three days after the date of deposit in the United States mails as
follows:
If to Halyx, to:
Halyx Partners, Inc.
d/b/a The Howell Group
6510 Abrams Road, Suite 570
Dallas, Texas 75231
Attention: Larry E. Howell
President
If to La-Man, to:
La-Man Corporation
5029 Edgewater Drive
Orlando, Florida 32810
Attention: Mr. J. William Brandner
President and Chief Executive Officer
with a copy to:
Marshall S. Harris, P.A.
Broad and Cassel
390 North Orange Avenue, Suite 1100
Orlando, Florida 32801
or such other address as any of the above shall have specified by notice
hereunder.
12. SECTION 13. AMENDMENT; WAIVER. This Agreement may not be amended except
by an instrument in writing signed on behalf of each of the parties hereto. The
waiver by any party hereto of any condition or of a breach of any other
provision of this Agreement shall not operate or be construed as a waiver of any
other condition or any other provision or subsequent breach. The waiver by any
party of any of the conditions precedent to its obligations under this Agreement
shall
9
<PAGE>
not Preclude it from seeking redress for breach of this Agreement other than
with respect to the condition so waived. All rights and remedies of any party to
this Agreement shall be cumulative and concurrent and may be exercised
singularly, successively or concurrently, at the sole discretion of such party
and may be exercised as often as occasion therefor may exist.
SECTION 14. GOVERNING LAW; VENUE. This Agreement shall be governed by
and construed in accordance with the laws of the State of Florida, without
giving effect to the principles of conflicts of laws thereof. Each of the
parties hereto agrees that any suit, action or proceeding with respect to this
Agreement shall be brought against it in any state or federal court of competent
jurisdiction in Orange County, Florida and irrevocably waives any (a) right of
immunity that such party may now have or hereafter acquire from service of
process or the jurisdiction of the aforesaid courts and (b) any objection that
such party may now have or hereafter acquire to the laying of venue of any such
suit, action or proceeding in any such court. The parties hereby irrevocably
accept and submit themselves to the jurisdiction of such courts in any such
suit, action or proceeding, and agree that final judgment (with the exhaustion
of all appeals) shall be conclusive and binding in any jurisdiction in which
such party resides or owns property.
SECTION 15. BINDING EFFECT; ASSIGNMENT. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors, assigns and legal representatives. Except as otherwise specified
herein, neither this Agreement, nor any right hereunder, may be assigned by any
party hereto without the prior written consent of the other party hereto.
SECTION 16. ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement and understanding between the parties with respect to the subject
matter hereof and supersedes any and all other agreements, arrangements and
understandings among the parties with respect to such subject matter, and no
agreements, arrangements, understandings, representations or warranties with
respect to such subject matter shall be binding upon the parties unless
specified herein or therein.
SECTION 17. COUNTERPARTS. This Agreement may be executed by the parties
in separate counterparts, each of which when so executed and delivered shall be
an original, but all such counterparts shall together constitute one and the
same instrument. Each counterpart may consist of a number of copies hereof each
signed by less than all, but together signed by all of the parties hereto.
SECTION 18. HEADINGS. The headings in this Agreement are for reference
only, and shall not affect the interpretation of this Agreement.
SECTION 19. EXPENSES. Except as otherwise specifically provided herein,
the parties to this Agreement shall bear their respective expenses incurred in
connection with the preparation, execution and delivery of this Agreement,
including without limitation all fees and expenses of agents, representatives
and counsel.
10
<PAGE>
IN WITNESS WHEREOF, this Agreement has been duly signed by or on behalf of
each of La-Man and Halyx as of the date first above written.
LA-MAN CORPORATION
By: /s/ J. William Brandner
--------------------------------
J. William Brandner, President
HALYX PARTNERS, INC. D/B/A
THE HOWELL GROUP
By: /s/ Larry E. Howell
--------------------------------
Larry E. Howell, President
11
<PAGE>
EXHIBIT 4.30
THIS WARRANT AND THE SECURITIES ISSUABLE UPON THE EXERCISE HEREOF HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933. THEY MAY NOT BE SOLD, OFFERED FOR
SALE, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, OR AN OPINION
OF COUNSEL SATISFACTORY TO THE COMPANY THAT REGISTRATION IS NOT REQUIRED UNDER
SUCH ACT OR UNLESS SOLD PURSUANT TO RULE 144 UNDER SUCH ACT.
STOCK PURCHASE WARRANT
----------------------
This Stock Purchase Warrant (this "Warrant"), dated as of March 2, 1998, is
issued to CROFT & BENDER LLC (the "Holder"), by LA-MAN CORPORATION, a Nevada
corporation (the "Company").
1. Purchase of Shares. Subject to the terms and conditions hereinafter
------------------
set forth, the Holder is entitled, upon surrender of this Warrant at the
principal office of the Company (or at such other place as the Company shall
notify the holder hereof in writing), to purchase from the Company 75,000 fully
paid and non-assessable shares of Common Stock, $.001 par value (the "Common
Stock"), of the Company (as adjusted pursuant to Section 7 hereof, the "Shares")
for the purchase price specified in Section 2 below.
2. Purchase Price. The purchase price for the Shares is $4.32 per share.
--------------
Such price shall be subject to adjustment pursuant to Section 7 hereof (such
price, as adjusted from time to time, is herein referred to as the "Warrant
Price").
3. Exercise Period. This Warrant is exercisable in whole or in part at
---------------
any time from the date hereof through March 2, 2003.
4. Method of Exercise. While this Warrant remains outstanding and
------------------
exercisable in accordance with Section 3 above, the Holder may exercise, in
whole or in part, the purchase rights evidenced hereby. Such exercise shall be
effected by:
(a) surrender of this Warrant, together with a duly executed copy of
the form of Exercise Notice attached hereto, to the Secretary of the Company at
its principal offices, and the payment to the Company of an amount equal to the
aggregate purchase price for the number of Shares being purchased; or
(b) if the Company's Common Stock is publicly traded as of such date,
the instruction to retain that number of Shares having a value equal to the
aggregate exercise price of the Shares as to which this Warrant is being
exercised and to issue to the Holder the remainder of such Shares computed using
the following formula:
<PAGE>
X = Y(A-B)
------
A
Where: X = the number of shares of Common Stock to be issued to the Holder.
Y= the number of shares of Common Stock as to which this Warrant is
being exercised.
A = the fair market value of one share of Common Stock.
B = the Warrant Price.
As used herein, the "fair market value of one share of Common Stock" shall
mean:
(1) Except in the circumstances described in clause (2) or (3)
hereof, the closing price of the Company's Common Stock, as reported in the Wall
Street Journal, on the trading day immediately prior to the date of exercise;
(2) If such exercise is in conjunction with a merger, acquisition
or other consolidation pursuant to which the Company is not the surviving
entity, the value received by the holders of the Common Stock pursuant to such
transaction for each share; or
(3) If such exercise is in conjunction with the initial public
offering of the Company, the price at which the Common Stock is sold to the
public in such offering.
5. Certificates for Shares. Upon the exercise of the purchase rights
-----------------------
evidenced by this Warrant, one or more certificates for the number of Shares so
purchased shall be issued as soon as practicable thereafter, and in any event
within thirty (30) days of the delivery of the subscription notice.
6. Reservation of Shares. The Company covenants that it will at all
---------------------
times keep available such number of authorized shares of its Common Stock, free
from all preemptive rights with respect thereto, which will be sufficient to
permit the exercise of this Warrant for the full number of Shares specified
herein. The Company further covenants that such Shares, when issued pursuant to
the exercise of this Warrant, will be duly and validly issued, fully paid and
non-assessable and free from all taxes, liens and charges with respect to the
issuance thereof.
7. Adjustment of Warrant Price and Number of Shares. The number and kind
------------------------------------------------
of securities purchasable upon exercise of this Warrant and the Warrant Price
shall be subject to adjustment from time to time as follows:
(a) Stock Dividends, Subdivisions, Combinations and Other Issuances.
---------------------------------------------------------------
If the Company shall at any time prior to the expiration of this Warrant
subdivide its Common Stock, by stock split or otherwise, combine its Common
Stock or issue additional shares of its Common Stock
2
<PAGE>
as a dividend with respect to any shares of its Common Stock, the number of
Shares issuable on the exercise of this Warrant shall forthwith be
proportionately increased in the case of a subdivision or stock dividend and
proportionately decreased in the case of a combination. Appropriate adjustments
shall also be made to the purchase price payable per share, but the aggregate
purchase price payable for the total number of Shares purchasable under this
Warrant (as adjusted) shall remain the same. Any adjustment under this Section
7(a) shall become effective at the close of business on the date the subdivision
or combination becomes effective or as of the record date of such dividend, or,
in the event that no record date is fixed, upon the making of such dividend.
(b) Reclassification, Reorganization, Merger, Sale or Consolidation.
---------------------------------------------------------------
In the event of any reclassification, capital reorganization or other change in
the Common Stock of the Company (other than as a result of a subdivision,
combination or stock dividend provided for in Section 7(a) above) or in the
event of a consolidation or merger of the Company with or into, or the sale of
all or substantially all of the properties and assets of the Company, to any
person, and in connection therewith consideration is payable to holders of
Common Stock in cash, securities or other property, then as a condition of such
reclassification, reorganization or change, consolidation, merger or sale,
lawful provision shall be made, and duly executed documents evidencing the same
shall be delivered to the Holder, so that the Holder shall have the right at any
time prior to the expiration of this Warrant to purchase, at a total price equal
to that payable upon the exercise of this Warrant immediately prior to such
event, the kind and amount of cash, securities or other property receivable in
connection with such reclassification, reorganization or change, consolidation,
merger or sale, by a holder of the same number of shares of Common Stock as were
exercisable by the Holder immediately prior to such reclassification,
reorganization or change, consolidation, merger or sale. In any such case,
appropriate provisions shall be made with respect to the rights and interest of
the Holder so that the provisions hereof shall thereafter be applicable with
respect to any cash, securities or property deliverable upon exercise hereof.
Notwithstanding the foregoing, (i) if the Company merges or consolidates with,
or sells all or substantially all of its property and assets to, any other
person, and consideration is payable to holders of Common Stock in exchange for
their Common Stock in connection with such merger, consolidation or sale which
consists solely of cash, or (ii) in the event of the dissolution, liquidation or
winding up of the Company, then the Holder shall be entitled to receive
distributions on the date of such event on an equal basis with holders of Common
Stock as if this Warrant had been exercised immediately prior to such event,
less the Warrant Price. Upon receipt of such payment, if any, the rights of the
Holder shall terminate and cease, and this Warrant shall expire. In case of any
such merger, consolidation or sale of assets, the surviving or acquiring person
and, in the event of any dissolution, liquidation or winding up of the Company,
the Company shall promptly, after receipt of this surrendered Warrant, make
payment by delivering a check in such amount as is appropriate (or, in the case
of consideration other than cash, such other consideration as is appropriate) to
such person as it may be directed in writing by the Holder surrendering this
Warrant.
3
<PAGE>
(c) Certain Distributions. In case the Company shall fix a record
---------------------
date for the making of a dividend or distribution of cash, securities or
property to all holders of Common Stock (excluding any dividends or
distributions referred to in Sections 7(a) or 7(b) above, the number of Shares
purchasable upon an exercise of this Warrant after such record date shall be
adjusted to equal the product obtained by multiplying the number of Shares
purchasable upon an exercise of this Warrant immediately prior to such record
date by a fraction, the numerator of which shall be the Warrant Price
immediately prior to such distribution, and the denominator of which shall be
the Warrant Price immediately prior to such distribution, less the fair market
value per Share, as determined by the Holder, of the cash, securities or
property so distributed. Such adjustment shall be made successively whenever
any such distribution is made and shall become effective on the effective date
of distribution.
8. Pre-Exercise Rights. Prior to exercise of this Warrant, the Holder
-------------------
shall not be entitled to any rights of a shareholder with respect to the Shares,
including without limitation, the right to vote such Shares, receive preemptive
rights or be notified of shareholder meetings, and the Holder shall not be
entitled to any notice or other communication concerning the business or affairs
of the Company.
9. Restricted Securities. The Holder understands that this Warrant and
---------------------
the Shares purchasable hereunder constitute "restricted securities" under the
federal securities laws inasmuch as they are being, or will be, acquired from
the Company in transactions not involving a public offering and accordingly may
not, under such laws and applicable regulations, be resold or transferred
without registration under the Securities Act of 1933, as amended, or an
applicable exemption from registration. In this connection, the Holder
acknowledges that Rule 144 of the Securities and Exchange Commission is not now,
and may not in the future be, available for resales of the Shares purchased
hereunder. The Holder further acknowledges that the Shares and any other
securities issued upon exercise of this Warrant shall bear a legend
substantially in the form of the legend appearing on the face hereof.
10. Certification of Investment Purpose. Unless a current registration
-----------------------------------
statement under the Securities Act of 1933, as amended, shall be in effect with
respect to the securities to be issued upon exercise of this Warrant, the Holder
hereof, by accepting this Warrant, covenants and agrees that, at the time of
exercise hereof, the Holder will deliver to the Company a written certification
that the securities acquired by the Holder are acquired for investments purposes
only and that such securities are not acquired with a view to, or for sale in
connection with, any distribution thereof.
11. Registration Rights. This Warrant and the Shares shall be subject to
-------------------
the registration rights set forth in the Convertible Loan Agreement of even date
herewith by and among La-Man Corporation, Renaissance Capital Growth & Income
Fund III, Inc., Renaissance US Growth & Income Trust PLC and Renaissance Capital
Group, Inc., as Agent, and the Holder shall be entitled to all rights and
benefits thereof as if a party thereto.
4
<PAGE>
12. Successors and Assigns. The terms and provisions of this Warrant
----------------------
shall inure to the benefit of, and be binding upon, the Company and the Holder
and their respective successors and assigns.
13. Governing Law. This Warrant shall be governed by the laws of the
-------------
State of Texas, excluding the conflicts of laws provisions thereof.
LA-MAN CORPORATION
By: /s/ J. William Brandner
--------------------------
J. William Brandner
President and Chief Executive Officer
5
<PAGE>
EXERCISE NOTICE
---------------
Dated _________, ____
The undersigned hereby irrevocably elects to exercise the Stock Purchase
Warrant, dated as of March 2, 1998, issued by La-Man Corporation, a Nevada
corporation (the "Company") to the undersigned to the extent of purchasing
___________ shares of Common Stock and hereby makes payment of $_________ in
payment of the aggregate Warrant Price of such Shares.
CROFT & BENDER LLC
By:________________________________
Title:_____________________________
6
<PAGE>
EXHIBIT 4.31
STOCK OPTION AGREEMENT
This Stock Option Agreement ("Agreement") is made and entered into as of
July 1, 1998, between LA-MAN CORPORATION, a Nevada corporation having its
principal place of business at 5029 Edgewater Drive, Orlando, Florida 32810 (the
"Company"), and PACIFIC CONSULTING, INC., a Nevada corporation having its
principal place of business at 2439 West Coast Highway, Suite 202, Newport
Beach, California 92663 ("Pacific").
RECITALS:
WHEREAS, the Company and Pacific are parties to a Financial Public
Relations Agreement effective as of July 1, 1998 ("FPR Agreement"), under the
terms of which the Company agreed to grant to Pacific certain options to
purchase newly-issued shares of the Company's common stock, par value $.001 per
share (the "Common Stock");
WHEREAS, the FPR Agreement contemplates that the Company and Pacific will
enter into this agreement under which the Company grants Pacific the
aforementioned options and certain rights with respect to the registration under
the Securities Act of 1933, as amended (the "Securities Act");
WHEREAS, the Company is willing to grant Pacific such registration rights,
on the terms and conditions hereinafter set forth.
NOW, THEREFORE, the Company and Pacific agree as follows:
SECTION 1. COMMON STOCK PURCHASE OPTIONS. As additional consideration
under the FPR Agreement, the Company hereby grants to Pacific options ("Option"
or "Options") to purchase up to 135,000 newly issued shares of Common Stock (the
"Underlying Shares") from La-Man on the following terms and conditions:
(a) The expiration date of the Options shall be August 28, 2001.
(b) The Options shall be exercisable as follows:
(i) Options for 75,000 Underlying Shares shall be exercisable
at the price of $3.25 per share;
(ii) Options for 30,000 Underlying Shares shall be exercisable
at the price of $3.75 per share; and
(iii) Options for the remaining 30,000 Underlying Shares shall
be exercisable at the price of $4.50 per share.
<PAGE>
(c) Options shall be exercised in blocks of 5,000 shares or any
multiple thereof.
(d) Pacific may exercise the Options by delivering written notice to
the Company stating the number of Options to be exercised, accompanied by check
or other good funds in the amount of the total exercise price. Also, Pacific
may surrender all or part of the Options and receive in exchange an amount equal
to the difference between the then fair market value of the Underlying Shares
issuable upon exercise of the Option surrendered and the option price payable
upon exercise of the Option surrendered (the "Spread"). Such rights: (i) will
expire no later than the expiration of the Options; (ii) may be for no more than
100% of the Spread; (iii) will be transferable only if and when the underlying
Option is transferable, and under the same conditions; (iv) shall be exercised
only when the Underlying Shares that are issuable upon exercise of such Option
have been registered under the Securities Act or may be sold publicly under Rule
144 promulgated under the Securities Act; and (v) may be exercised only when the
Spread is positive, i.e., when the market price of the Common Stock subject to
the Option exceeds the exercise price of such Option.
SECTION 2. INVESTMENT REPRESENTATION. Pacific represents and warrants to
La-Man as follows:
(a) The Options and, upon exercise of the Options, the Underlying
Shares are being acquired for Pacific's account and not with a view to any
public distribution thereof (such securities, together with all securities
issued in connection with any stock dividend on, stock split of,
reclassification of or recapitalization in respect of such securities, are
sometimes hereinafter referred to as the "Subject Securities").
(b) Pacific's acquisition of the Subject Securities will not cause
Pacific's illiquid investments to become disproportionate to Pacific's total net
worth.
(c) Pacific has sufficient knowledge and experience in financial and
business matters that Pacific is capable of evaluating the risks and merits of
an investment in the Subject Securities. Pacific has evaluated the risks of
holding the Subject Securities and has determined that the Subject Securities
are a suitable investment, and Pacific has adequate financial resources for an
investment of such character, and at the date hereof could bear a complete loss
of such investment.
(d) Pacific has had the opportunity to ask questions of and receive
answers from the Company concerning the financial condition, business and
operations of the Company and its subsidiaries, and has had the opportunity to
obtain such information in order to permit Pacific to evaluate the merits and
risks of investing in the Subject Securities.
(e) Pacific understands that the issuance of the Subject Securities
to Pacific has not been reviewed by the Securities and Exchange Commission (the
"Commission") nor by agencies or officials of any other state or jurisdiction,
including the state in which Pacific is domiciled, since
2
<PAGE>
the transaction in which the Subject Securities are being issued to Pacific is
intended to be exempt from the registration requirements of the Securities Act
and other applicable laws.
(f) Pacific has not been solicited to subscribe for the Subject
Securities by means of general advertising or general solicitation.
SECTION 3. PROPOSED DISPOSITIONS. The sale, transfer, pledge,
hypothecation, or other disposition (any such transaction being referred to
hereinafter as a "disposition") of any of the Subject Securities may be made
only in compliance with this Agreement. Prior to any disposition of the Subject
Securities without registration under the Securities Act, Pacific shall give
written notice to the Treasurer of the Company in accordance with Section 10
describing the manner and circumstances of the proposed disposition and
containing such other information as necessary to enable counsel to the Company
to determine whether the disposition complies with the Securities Act; provided,
however, that Pacific shall not effect the proposed disposition until the
Company has notified Pacific that in the reasonable opinion of its counsel
registration of the Subject Securities under the Securities Act is not required
in respect of the proposed disposition.
SECTION 4. RESTRICTIVE LEGENDS. The Subject Securities shall not be
transferable except upon the conditions specified in this Agreement, which
conditions are intended to ensure compliance with the provisions of the
Securities Act with respect to the transfer of any of the Subject Securities.
Until:
(a) the Subject Securities are sold in a public distribution under a
registration statement under the Securities Act or pursuant to Rule 144
promulgated under the Securities Act;
(b) in the reasonable opinion of counsel to the Company, the legend
is no longer necessary to provide assurance of compliance with the Securities
Act; or
(c) the removal of the legend by the transfer agent upon the
presentation to it, after the expiration of two years from the date the
applicable Subject Securities are issued and fully paid for, of a stock or
warrant certificate or certificates representing the Subject Securities, which
presentation shall be deemed a representation by the record holder that the
record holder (i) has been the beneficial owner of the securities for at least
two (2) years and (ii) has not entered into any short sale or put or other
option transaction which would toll the holding period under Rule 144(d)
promulgated under the Securities Act and therefore is free to sell the
securities under Rule 144(k) promulgated under the Securities Act; each
certificate representing the Subject Securities shall bear the following legend:
"The securities represented by this certificate have not been registered
under the Securities Act of 1933, as amended (the "Act"). The securities
have been acquired for investment and may not be sold, transferred,
pledged, hypothecated, or otherwise disposed of in the absence of
registration or the availability of an exemption from registration under
the Act and regulations promulgated thereunder or as otherwise provided in
accordance with the terms and provisions of a certain Stock Option
3
<PAGE>
Agreement dated as of July 1, 1998, a copy of which is on file at the
office of the Corporation."
SECTION 5. REQUESTED REGISTRATION.
(a) If, between September 30, 1999 and July 1, 2002 the Company
receives a written request signed by one or more registered holders of not less
than 50% of all of the Subject Securities stating that one or more holders
("Demand Holder" or "Demand Holders") proposes to sell or distribute publicly at
least 50% of all of the Subject Securities, the Company shall use its reasonable
best efforts to file, and to cause to become effective, a registration statement
under the Securities Act covering the Subject Securities specified in the
written request. However, the Company shall not be required to effect the
registration if (i) the Company has filed previously a registration statement
under the Securities Act which became effective within the 12 months prior to
receipt of the written request and which was kept current for the period
referred to in Section 6; (ii) the Company could be required to undergo a
special interim audit in order to comply with the request (unless the Demand
Holders execute an undertaking, reasonably satisfactory to the Company, to pay
all fees and expenses of the special interim audit); (iii) the Demand Holders
could sell publicly under Rule 144 promulgated under the Securities Act the
number of securities the holders propose to have registered; or (iv) in the
opinion of counsel for the Company, the securities may be publicly sold without
registration under the Securities Act or the Company is then prohibited under
the Securities Act from registering such shares.
(b) The Company shall be entitled to postpone, for a period of time
not to exceed 120 days from the date it receives the written request pursuant to
Section 5(a), the filing of any registration statement otherwise required to be
prepared and filed by it, if, at the time it receives the request, the Company
determines, in its sole discretion, that the registration and offering could
interfere with any financing, acquisition, corporate reorganization, or other
material transaction involving the Company or any of its affiliates and gives
any Demand Holder requesting registration written notice of its determination.
If the Company shall postpone the filing of a registration statement, the Demand
Holder, within 60 days after receipt of the notice of postponement, shall notify
in writing the Treasurer of the Company if such holder has determined to
withdraw such request for registration. In the event the Demand Holder does not
withdraw such request for registration, the Company shall file a registration
statement by the later of (i) the date to which the Company determined to
postpone the filing of the registration statement or (ii) 90 days from the
latest date on which a Demand Holder advises the Treasurer of the Company that
such holder has determined not to withdraw his request for registration.
(c) The registration right provided in this Section 5 is a one-time
right that, subject to the provisions of this Section 5, may only be exercised
once, and may only be exercised by the registered holder or holders of not less
than 50% of all of the Subject Securities.
SECTION 6. "PIGGYBACK" RIGHTS. If, at any time, the Company proposes to
register any of its equity securities under the Securities Act (other than a
registration under SEC Form S-8 or a
4
<PAGE>
successor form), all registered holders of the Subject Securities shall be
entitled, on each such occasion, to have any or all of the Subject Securities
owned by them registered and included in such registration statement subject to
the provisions hereof. On each such occasion, the Company shall give written
notice to each holder of its intention to effect such registration. Upon the
written request of a holder, given within 15 days after receipt of notice from
the Company, that the Company include the Subject Securities in the registration
statement (which request shall state the number or amount of Subject Securities
to be disposed of), the Company will use its reasonable best efforts to cause
the Subject Securities which the holder has requested to be registered under the
Securities Act in connection with such registration to be registered and to be
included in the offering covered by the registration statement; provided,
however, that the Company shall not be required to effect registration of any
securities which: (i) in the reasonable opinion of counsel for the Company, may
be sold publicly without registration under the Securities Act or the
registration of which is then prohibited under the Securities Act; or (ii) may
be sold publicly pursuant to Rule 144 promulgated under the Securities Act. If,
and to the extent that, in the reasonable judgment of the Company or the
managing underwriter of the proposed offering for which the registration
statement has been or is to be filed, if any, the offering of some or all of the
Subject Securities to be sold for the account of one or more holders which the
Company has been requested to register pursuant to this Section 6 could
unreasonably interfere with or otherwise be disadvantageous in respect of the
proposed offering, the Company or the managing underwriter, at its option, may
require either that: (i) all the Company equity securities proposed to be sold
for the account of the Company be included in the offering and that the number
of Subject Securities to be sold for the account of one or more holders pursuant
to this Section 6 be reduced proportionately to an aggregate number acceptable
to the Company and the managing underwriter, if any; or (ii) the offering of
Subject Securities for the account of one or more holders be postponed until 120
days after the effective date of the registration statement (in which case the
Company will keep the registration statement current until at least 180 days
after the effective date thereof). In any such case, the holders shall have the
right to withdraw such request for inclusion of any or all of such Subject
Securities in the registration statement. Notwithstanding the foregoing, any
such proportionate reduction or postponement shall be subject to the prior
written approval of the holder or holders of not less than 50% of all of the
Subject Securities, which approval shall not be unreasonably withheld or
delayed.
SECTION 7. DELAY IN REGISTRATION. Notwithstanding any provisions of
Section 5 or Section 6 to the contrary, the Company may delay filing a
registration statement, and may withhold efforts to cause the registration
statement to become effective, if the Company determines in good faith that such
registration might (i) interfere with or affect the negotiation or completion of
any transaction that is being contemplated by the Company (whether or not a
final decision has been made to undertake such transaction) at the time the
right to delay is exercised, or (ii) involve initial or continuing disclosure
obligations that might not be in the best interest of the Company's
stockholders. If, after a registration statement becomes effective, the Company
advises the holders of registered shares that the Company considers it
appropriate for the registration statement to be amended, the holders of such
shares shall suspend any further sales of their registered shares until the
Company advises them that the registration statement has been amended. The 180-
day time period referred to in Section 5 during which the registration statement
must be kept current after its effective date shall be extended for an
additional number of
5
<PAGE>
business days equal to the number of business days during which the right to
sell shares was suspended pursuant to the preceding sentence, but in no event
will the Company be required to update the registration statement after July 1,
2003.
SECTION 8. EXPENSES OF REGISTRATION. The Company shall pay all expenses
incurred in connection with the registration and sale of Subject Securities
pursuant to Section 5 or 6, including without limitation, all Commission and
blue sky registration and filing fees, printing expenses, fees and disbursements
of counsel for the Company and blue sky counsel, fees and disbursements of
accountants for the Company (including those incurred in a limited review of
financial statements not constituting an audit), transfer agents' and
registrars' fees, fees and disbursements of experts used by the Company in
connection with the registration and expenses incidental to any post-effective
amendment to such registration statement; provided, however, that the holder who
is disposing of Subject Securities (sometimes referred to herein as a
"Registering Seller") shall pay, except as set forth above, all fees and
disbursements of such holder's counsel and all transfer taxes and the portion of
the underwriters' discounts, commissions and expenses attributable to the
Subject Securities being offered and sold by the Registering Seller. In no event
shall a Registering Seller be liable for (i) the compensation of employees and
officers of the Company or (ii) any fees or expenses of the Company's
accountants except in connection with a special interim audit required solely
for the purposes of the registration statement to which the Registering Seller
agreed.
SECTION 9. OBLIGATIONS IN REGISTRATION.
(a) If and whenever the Company is obligated by the provisions of
this Agreement to effect the registration of any Subject Securities under the
Securities Act, the Company will, in accordance with Section 8 and as
expeditiously as possible:
(i) prepare and file with the Commission a registration
statement with respect to the Subject Securities, use its reasonable best
efforts to cause the registration statement to become and remain effective and
prepare and file any amendments and supplements thereto and to the prospectus
used in connection therewith as may be necessary to keep the registration
statement and prospectus current and to comply with the provisions of the
Securities Act and the rules and regulations promulgated thereunder with respect
to the disposition of the Subject Securities covered by the registration
statement for the period required to effect the distribution of the Subject
Securities, but in no event shall the Company be required to do so for a period
of more than 120 days following the effective date of the registration statement
(180 days, if the offering of Subject Securities was delayed pursuant to Section
6(b) or Section 7);
(ii) furnish to the Registering Seller the number of copies of
preliminary, final, amended or supplemented prospectuses, in conformity with the
requirements of the Securities Act and the rules and regulations promulgated
thereunder, and other documents as reasonably may be required in order to
facilitate the disposition of the Subject Securities, but only while the Company
is required under the provisions hereof to cause the registration statement to
remain current; and
6
<PAGE>
(iii) use its best efforts to register or qualify the Subject
Securities covered by the registration statement under the securities or blue
sky laws of those jurisdictions in the United States as the Registering Seller
reasonably shall request, and do any and all other acts and things which may be
necessary to enable each Registering Seller covered by the registration
statement to consummate the disposition of the Subject Securities; provided,
however, that in no event shall the Company be required to qualify to do
business as a foreign corporation or as a dealer in any jurisdiction where it is
not qualified; to conform the composition of its assets at the time to the
securities or blue sky laws of any jurisdiction; to execute or file any general
consent to service of process under the laws of any jurisdiction; to take any
action that would subject it to service of process in suits other than those
arising out of the offer and sale of the Subject Securities covered by the
registration statement; or to subject itself to taxation in any jurisdiction
where it has not theretofore done so.
(b) All Registering Sellers shall furnish to the Company the
information, consents and other documents relating to the Company and the
Registering Sellers as the Company shall request and as shall be reasonably
required in connection with the action to be taken by the Company.
(c) To the extent that any Options or Underlying Shares issuable upon
exercise of Options are included in a registration statement pursuant to Section
4 or Section 5, the holder or holders of all such registered Options or
unregistered Options upon which such registered Underlying Shares are issuable
shall fully exercise all such Options within 30 calendar days following the date
on which such registration statement becomes effective under the Securities Act.
SECTION 10. INDEMNIFICATION.
(a) By the Company. In the event of any registration under the
--------------
Securities Act of any Subject Securities pursuant to this Agreement, the Company
shall indemnify and hold harmless any Registering Seller and any underwriter of
any Registering Seller, and each other person, if any, who controls the
Registering Seller or underwriter within the meaning of the Securities Act,
against any losses, claims, damages, or liabilities, joint or several, to which
each indemnified party may become subject, under the Securities Act or
otherwise, but only to the extent the 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, on the
effective date thereof, in any registration statement under which the Subject
Securities were registered under the Securities Act, in any preliminary
prospectus (if used prior to the effective date of the registration statement)
or in any summary or final prospectus or in any amendment or supplement thereto
(if used during the period the Company is required to keep the registration
statement current); or arise out of, or are based upon, the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements made therein, in the light of the circumstances
under which they are made, not misleading and will reimburse each indemnified
party for all legal or other expenses reasonably incurred by him in connection
with investigating or defending any loss, claim, damage, liability, or action,
excluding any amounts paid in settlement of any litigation, commenced or
threatened, if the settlement is effected without the prior written consent of
the Company;
7
<PAGE>
provided, however, that the Company shall not be liable in any case to the
extent that any loss, claim, damage, liability, or expense arises out of, or is
based upon, an untrue statement or omission made in the registration statement,
the preliminary, summary or final prospectus, or any amendment or supplement
thereto in reliance upon and in conformity with written information furnished to
the Company by or on behalf of the indemnified party specifically for use in the
preparation thereof; and provided further that the Company will not indemnify
any underwriter of any Registering Seller or any person who is associated with
or controls the underwriter with respect to any preliminary or summary
prospectus if the underwriter failed to send or to give a copy of the final
prospectus to the person alleging any loss, claim, damage, liability, action or
expense at or prior to the written confirmation of the sale of the Subject
Securities to the person, if the untrue statement or omission concerned had been
corrected in the final prospectus and if the Company advised the underwriter in
writing of the correction at or before the time the final prospectus became
available.
(b) By the Registering Seller. In the event of any registration under
-------------------------
the Securities Act of Subject Securities held by one or more holders pursuant to
this Agreement, each Registering Seller severally shall indemnify and hold
harmless the Company, each of its directors, each of its officers who has signed
the registration statement and each other person, if any, who controls the
Company within the meaning of the Securities Act, against any losses, claims,
damages, liabilities, joint or several, to which the indemnified party may
become subject under the Securities Act or otherwise, but only to the extent the
losses, claims, damages or liabilities (or actions in respect thereof) (i) arise
out of, or are based upon, any untrue statement or alleged untrue statement of
any material fact contained, on the effective date thereof, in any registration
statement under which any Subject Securities were registered under the
Securities Act, in any preliminary prospectus (if used prior to the effective
date of the registration statement) or in any final or summary prospectus or in
any amendment or supplement thereto (if used during the period the Company is
required to keep the registration statement current); or (ii) arise out of, or
are based upon, the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements made
therein, in the light of the circumstances under which they were made, not
misleading and each Registering Seller severally shall reimburse each
indemnified party for all legal or other expenses reasonably incurred by him in
connection with investigating or defending any loss, claim, damage, liability,
action or expense excluding any amounts paid in settlement of any litigation,
commenced or threatened, if the settlement is effected without the prior written
consent of the Registering Seller; provided, however, that the indemnification
or reimbursement shall be payable only if, and to the extent that, any loss,
claim, damage, liability, action or expense arises out of, or is based upon, an
untrue statement or omission made in the registration statement, the
preliminary, final or summary prospectus, or any amendment or supplement
thereto, in reliance upon and in conformity with written information furnished
to the Company by the Registering Seller specifically for use in the preparation
thereof.
(c) Actions Commenced. If a third party commences any action or
-----------------
proceeding against an indemnified party related to any of the matters subject to
indemnification under subsections (a) or (b) of this Section 10, the indemnified
party promptly shall notify the indemnifying party or parties in writing of the
amount claimed, the commencement of, and the basis for the claim. In case any
action is brought against an indemnified party and it shall notify the
8
<PAGE>
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate in, and, to the extent that it so chooses, jointly with
any other indemnifying party similarly notified, to assume the defense thereof,
with counsel reasonably satisfactory to the indemnified party; and, after notice
from the indemnifying party to the indemnified party of its election to assume
the defense thereof, the indemnifying party shall not be liable for any legal or
other expenses subsequently incurred by the indemnified party in connection with
the defense thereof; provided, however, that if (i) the indemnifying party fails
to take reasonable steps necessary to defend diligently the claim within 20 days
after receiving notice from the indemnified party to the effect that the
indemnified party believes it has failed to do so, (ii) the indemnified party is
a defendant in any action or proceeding which also is brought against the
indemnifying party and reasonably shall have concluded that there may be legal
defenses available to the indemnified party which are not available to the
indemnifying party, or (iii) representation of both parties by the same counsel
is otherwise inappropriate under applicable standards of professional conduct,
the indemnified party shall have the right to assume or continue its own defense
and the indemnifying party shall be liable for any expenses therefor.
(d) Additional Rights. Any indemnity agreements contained herein
-----------------
shall be in addition to any other rights to indemnification or contribution
which any indemnified party may nave pursuant to law or contract and shall
remain operative and in full force and effect regardless of any investigation
made or omitted by or on behalf of any indemnified party.
SECTION 11. NOTICES. Any notice or other communication required or
permitted hereunder shall be in writing and shall be delivered personally,
telegraphed, telexed, sent by facsimile transmission (provided acknowledgment of
receipt thereof is delivered to the sender) or sent by certified, registered or
express mail, postage prepaid. Any such notice shall be deemed given when so
delivered personally, telegraphed, telexed or sent by facsimile transmission or,
if mailed, three days after the date of deposit in the United States mails as
follows:
If to Pacific, to:
Pacific Consulting, Inc.
2439 West Coast Highway, Suite 202
Newport Beach, California 92663
Attention: Randy J. Sasaki
President
with a copy to:
Hank Schlueter, Esq.
Schlueter & Associates, P.C.
1050 17th Street, Suite 1700
Denver, Colorado 80202
9
<PAGE>
If to the Company, to:
La-Man Corporation
5029 Edgewater Drive
Orlando, Florida 32810
Attention: Mr. J. William Brandner
President and Chief Executive Officer
with a copy to:
Marshall S. Harris, P.A.
Broad and Cassel
390 North Orange Avenue, Suite 1100
Orlando, Florida 32801
or such other address as any of the above shall have specified by notice
hereunder.
SECTION 12. AMENDMENT; WAIVER. This Agreement may not be amended except by
an instrument in writing signed on behalf of each of the parties hereto. The
waiver by any party hereto of any condition or of a breach of any other
provision of this Agreement shall not operate or be construed as a waiver of any
other condition or any other provision or subsequent breach. The waiver by any
party of any of the conditions precedent to its obligations under this Agreement
shall not preclude it from seeking redress for breach of this Agreement other
than with respect to the condition so waived. All rights and remedies of any
party to this Agreement shall be cumulative and concurrent and may be exercised
singularly, successively or concurrently, at the sole discretion of such party
and may be exercised as often as occasion therefor may exist.
SECTION 13. GOVERNING LAW; VENUE. This Agreement shall be governed by and
construed in accordance with the laws of the State of Florida, without giving
effect to the principles of conflicts of laws thereof. Each of the parties
hereto agrees that any suit, action or proceeding with respect to this Agreement
shall be brought against it in any state or federal court of competent
jurisdiction in Orange County, Florida and irrevocably waives any (a) right of
immunity that such party may now have or hereafter acquire from service of
process or the jurisdiction of the aforesaid courts and (b) any objection that
such party may now have or hereafter acquire to the laying of venue of any such
suit, action or proceeding in any such court. The parties hereby irrevocably
accept and submit themselves to the jurisdiction of such courts in any such
suit, action or proceeding, and agree that final judgment (with the exhaustion
of all appeals) shall be conclusive and binding in any jurisdiction in which
such party resides or owns property.
SECTION 14. BINDING EFFECT; ASSIGNMENT. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors, assigns and legal representatives. Except as otherwise specified
herein, neither this Agreement, nor any right hereunder, may be assigned by any
party hereto without the prior written consent of the other party hereto.
10
<PAGE>
SECTION 15. ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement and understanding between the parties with respect to the subject
matter hereof and supersedes any and all other agreements, arrangements and
understandings among the parties with respect to such subject matter, and no
agreements, arrangements, understandings, representations or warranties with
respect to such subject matter shall be binding upon the parties unless
specified herein or therein.
SECTION 16. COUNTERPARTS. This Agreement may be executed by the parties in
separate counterparts, each of which when so executed and delivered shall be an
original, but all such counterparts shall together constitute one and the same
instrument. Each counterpart may consist of a number of copies hereof each
signed by less than all, but together signed by all of the parties hereto.
SECTION 17. HEADINGS. The headings in this Agreement are for reference
only, and shall not affect the interpretation of this Agreement.
SECTION 18. EXPENSES. Except as otherwise specifically provided herein,
the parties to this Agreement shall bear their respective expenses incurred in
connection with the preparation, execution and delivery of this Agreement,
including without limitation all fees and expenses of agents, representatives
and counsel.
IN WITNESS WHEREOF, this Agreement has been duly signed by or on behalf of
each of the Company and Pacific as of the date first above written.
LA-MAN CORPORATION
By: /s/ J. William Brandner
-----------------------
Name: J. William Brandner
Title: President
PACIFIC CONSULTING, INC.
By: /s/ Randy J. Sasaki
--------------------
Name: Randy J. Sasaki
Title: President
11
<PAGE>
EXHIBIT 5.1
[LETTERHEAD OF DISPLAY TECHNOLOGIES, INC.]
January 29, 1999
Display Technologies, Inc.
5029 Edgewater Drive
Orlando, FL 32810
Gentlemen:
I have acted as counsel to Display Technologies, Inc., a Nevada corporation
(the "Company"), in connection with the preparation of a Registration Statement
on Form S-3 (the "Registration Statement"), to be filed with the Securities and
Exchange Commission (the "Commission") with respect to the following securities
of the Company to be publicly offered for sale by the holders thereof (the
"Registering Securityholders"):
(a) 143,548 shares of Common Stock issuable upon the exercise of certain
options and warrants held by Peter D. Mathews at the aggregate
exercise price of $586,752.45;
(b) 680,400 shares of Common Stock held by Lou A. Papais;
(c) 170,100 shares of Common Stock held by Terry J. Long;
(d) 78,500 shares of Common Stock issuable upon exercise of warrants
(exercisable at the exercise price of $4.11 per share expiring
March 2, 2003) held by Croft & Bender LLC;
(e) 110,250 shares of Common Stock issuable upon exercise of options
(exerciseable at the exercise price of $1.40 per share for 55,125
shares expiring March 17, 2001 and at the exercise price of $2.50 per
share for 55,125 shares expiring August 28, 2001) held by Halyx
Partners, Inc. d/b/a The Howell Group;
(f) an aggregate of 141,750 shares of Common Stock issuable upon options
held by various principals and employees of Pacific Consulting Group,
Inc. (exerciseable at the exercise price of $3.10 per share for 78,750
shares, the price of $3.57 for 31,500 shares, and the price of $4.29
for 31,500 shares) expiring August 28, 2001;
(g) the following shares of Common Stock held equally by each of
Renaissance Capital Growth & Income Fund III, Inc. and Renaissance
U.S. Growth Income & Trust PLC: (1) 243,046 shares of Common Stock;
(2) 774,336 shares issuable upon conversion of the Company's
$3,500,000 Convertible Debentures Due March 2, 2005 at the present
conversion price of $4.52 per share; and (3) 210,000 shares issuable
upon the exercise of warrants at the present exercise price of $4.11
per share and expiring March 2, 2005;
(h) 115,740 shares of Common Stock issuable upon conversion of the
Company's $500,000 Convertible Note Due September 7, 2000 held by
Worrell Enterprises, Inc. at the present conversion price of $4.32 per
share; and 52,091 shares of Common Stock issuable upon the exercise of
options (at exercise prices ranging from $2.17 per share to $5.06 per
share) held by Worrell Enterprises, Inc. and expiring on various
dates.
The options and warrants described above are hereinafter respectively
referred to as the "Options" and the "Warrants." The debentures and note
described above are hereinafter collectively referred to as the "Debt
Instruments."
<PAGE>
Display Technologies, Inc.
January 29, 1999
Page 2
For purposes of expressing the following opinion, I have examined and
relied upon: (a) the Restated Articles of Incorporation and Bylaws, as amended,
of the Company; and (b) such other documents and records of the Company as I
deemed necessary for purposes of expressing the following opinion. Insofar as
the opinion expressed below may relate to shares of Common Stock issuable upon
the exercise of the Options and Warrants, I have assumed that prior to the
issuance of any such shares the Company will receive the full exercise price
therefor and that all other conditions precedent to the exercise of such Options
and Warrants will have been fulfilled.
Based upon the foregoing and such other matters as I have deemed relevant,
I am of the opinion that the shares of Common Stock issuable (a) upon exercise
of the Options and Warrants, when issued in accordance with the terms of the
Options and Warrants, and (b) upon conversion of the Debt Instruments, when
issued in accordance with the terms of the Debt Instruments, will be duly
authorized, legally issued, fully paid, and non-assessable.
The opinions expressed above are with respect only to federal law, the laws
of Florida and, to the extent applicable, corporate laws of Nevada. Moreover, I
express no opinion with respect to the securities laws of any state other than
the State of Florida. The opinion is made as of the date of this letter, and
after this date I undertake no obligation to update such opinion to reflect any
facts or circumstances which may later come to my attention or any changes to
applicable laws after the date hereof.
This opinion is furnished to and is solely for the benefit of the Company
and neither this opinion nor any copies hereof may be delivered to or relied
upon by, any governmental agency or other person without our prior written
approval. Notwithstanding the foregoing, I consent to the use of this opinion
as an exhibit to the Registration Statement.
Very truly yours,
Marshall S. Harris
General Counsel, Vice President
and Secretary
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT
CERTIFIED PUBLIC ACCOUNTANTS
Display Technologies, Inc.
Orlando, Florida
We hereby consent to the incorporation by reference in the Prospectus
constituting a part of this Registration Statement on Form S-3 of our report
dated August 10, 1998, relating to the consolidated financial statements of
Display Technologies, Inc. and subsidiaries appearing in the Company's Annual
Report on Form 10-KSB for the year ended June 30, 1998.
We also consent to the reference to us under the caption "Experts" in this
Prospectus.
/s/ BDO Seidman, LLP
BDO SEIDMAN, LLP
Orlando, Florida
January 29, 1999
<PAGE>
EXHIBIT 24.1
POWER OF ATTORNEY
(INCLUDED ON PAGE II-6 HEREOF)
