SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 4,
1997
HOUSE OF FABRICS, INC.
----------------------
(Exact name of registrant as specified in its charter)
Delaware 1-7927 95-3426136
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(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
13400 Riverside Drive, Sherman Oaks, California 91423
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number including area code:
(818) 995-7000
(Former name or former address, if changed since last report.)
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Not applicable.
<PAGE>
Item 7. Financial Statements and Exhibits
(c) Exhibits
4.1 Series B Warrant Agreement, dated as of July 31,
1996, between House of Fabrics, Inc. and American
Stock Transfer & Trust Company, as Warrant Agent.
4.2 Amendment No. 1, dated as of December 30, 1996, to
Series B Warrant Agreement, dated as of July 31,
1996, between House of Fabrics, Inc. and American
Stock Transfer & Trust Company, as Warrant Agent.
4.3 Series C Warrant Agreement, dated as of July 31,
1996, between House of Fabrics, Inc. and American
Stock Transfer & Trust Company, as Warrant Agent.
4.4 Amendment No. 1, dated as of December 30, 1996, to
Series C Warrant Agreement, dated as of July 31,
1996, between House of Fabrics, Inc. and American
Stock Transfer & Trust Company, as Warrant Agent.
<PAGE>
Pursuant to the requirements of the Securities Exchange Act
of 1934, Registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
HOUSE OF FABRICS, INC.
By: /s/ MARVIN S. MALTZMAN
----------------------------
Marvin S. Maltzman
Senior Vice President and
Secretary
DATED: February 4, 1997
<PAGE>
HOUSE OF FABRICS, INC.
AND
AMERICAN STOCK TRANSFER & TRUST COMPANY,
AS WARRANT AGENT
_________________
SERIES B WARRANT AGREEMENT
_________________
DATED AS OF JULY 31, 1996
<PAGE>
TABLE OF CONTENTS*
_________________
* This Table of Contents does not constitute a part of
this agreement or have any bearing upon the interpretation
of any of its terms or provisions.
Section Page
1. Appointment of Warrant Agent. . . . . . . . . . . . . . . 1
2. Form of Warrants. . . . . . . . . . . . . . . . . . . . . 1
3. Transfer or Exchange of Warrants. . . . . . . . . . . . . 3
4. Mutilated or Missing Warrants . . . . . . . . . . . . . . 3
5. Term of Warrants; Exercise of Warrants. . . . . . . . . . 4
6. Disposition of Proceeds on Exercise of Warrants . . . . . 5
7. Payment of Taxes. . . . . . . . . . . . . . . . . . . . . 5
8. Reservation of Warrant Shares; Authorization of Series
C Warrants; Purchase and Cancellation of Warrants . . . . 5
9. Exercise Price. . . . . . . . . . . . . . . . . . . . . . 7
10. Adjustment of Number of Warrant Shares. . . . . . . . . . 7
11. Fractional Warrant Shares . . . . . . . . . . . . . . . . 13
12. No Rights as Shareholders; Notices to Warrant Holders . . 14
13. Inspection of Warrant Agreement . . . . . . . . . . . . . 15
14. Merger or Consolidation or Change of Name of Warrant
Agent . . . . . . . . . . . . . . . . . . . . . . . . . . 15
15. Concerning the Warrant Agent. . . . . . . . . . . . . . . 16
16. Change of Warrant Agent . . . . . . . . . . . . . . . . . 18
17. Identity of Transfer Agent. . . . . . . . . . . . . . . . 19
18. Notices . . . . . . . . . . . . . . . . . . . . . . . . . 19
19. Supplements and Amendments. . . . . . . . . . . . . . . . 20
20. Successors. . . . . . . . . . . . . . . . . . . . . . . . 20
21. Merger or Consolidation of the Company. . . . . . . . . . 20
22. Applicable Law. . . . . . . . . . . . . . . . . . . . . . 20
23. Benefits of this Agreement. . . . . . . . . . . . . . . . 21
24. Counterparts. . . . . . . . . . . . . . . . . . . . . . . 21
25. Captions. . . . . . . . . . . . . . . . . . . . . . . . . 21
EXHIBIT A - Form of Warrant
<PAGE>
SERIES B WARRANT AGREEMENT, dated as of July 31, 1996,
between HOUSE OF FABRICS, INC., a Delaware corporation (the
"Company"), and AMERICAN STOCK TRANSFER & TRUST COMPANY, as
Warrant Agent (the "Warrant Agent").
WITNESSETH:
WHEREAS, the Company proposes to issue up to 256,821
Series B Warrants hereinafter described (the "Warrants") to
purchase Units (the "Units"), each Unit consisting of (i) one
share of the Company's Common Stock, par value $.01 per share
(the "Common Stock") (each share of Common Stock purchasable upon
the exercise of a Warrant being referred to herein as a "Warrant
Share"), and (ii) one Series C Warrant (a "Series C Warrant"),
each Series C Warrant entitling the registered owner thereof to
purchase one share of Common Stock; and
WHEREAS, the Company wishes the Warrant Agent to act on
behalf of the Company, and the Warrant Agent is willing to act,
in connection with the issuance, transfer, exchange and exercise
of the Warrants.
NOW, THEREFORE, in consideration of the foregoing and
for the purpose of defining the terms and provisions of the
Warrants and the respective rights and obligations thereunder of
the Company and the registered owners of the Warrants (the
"Holders"), the Company and the Warrant Agent hereby agree as
follows:
SECTION 1. Appointment of Warrant Agent.
The Company hereby appoints the Warrant Agent to act as
agent for the Company in accordance with the terms and conditions
hereinafter set forth, and the Warrant Agent hereby accepts such
appointment.
SECTION 2. Form of Warrants.
2.1. Form of Warrant Certificates. The text of
the Warrant certificate and of the form of election to purchase
Units shall be substantially as set forth in Exhibit A attached
hereto. The Warrant certificates shall be appropriately printed,
lithographed or engraved and may have such letters, numbers or
other marks of identification and such legends printed,
lithographed or engraved thereon as the Company may deem
appropriate and as are not inconsistent with the provisions of
this Agreement, or as may be required to comply with any rule or
regulation of any stock exchange on which the Warrants may be
listed, or to conform to usage. The number of Warrant Shares
issuable upon exercise of each Warrant is subject to adjustment
upon the occurrence of certain events, all as hereinafter
provided. The Warrant certificates shall be executed on behalf
of the Company by its Chairman of the Board, its President or one
of its Vice Presidents under its corporate seal reproduced
thereon and attested by its Secretary or an Assistant Secretary.
The signature of any of such officers on the Warrant certificates
may be manual or facsimile.
Warrant certificates bearing the manual or facsimile
signatures of individuals who were at any time the proper
officers of the Company shall bind the Company, notwithstanding
that such individuals or any one of them shall have ceased to
hold such offices prior to the delivery of such Warrant
certificates or did not hold such office on the date of this
Agreement.
Warrant certificates shall be dated as of the date of
countersignature thereof by the Warrant Agent either upon initial
issuance or upon exchange, substitution or transfer.
2.2. Countersignature of Warrant Certificates.
The Warrant certificates shall be manually countersigned by the
Warrant Agent (or any successor to the Warrant Agent then acting
as warrant agent under this Agreement) and shall not be valid for
any purpose unless so countersigned. Warrant certificates may be
countersigned by the Warrant Agent (or by its successor as
warrant agent hereunder) and may be delivered by the Warrant
Agent notwithstanding that the persons whose manual or facsimile
signatures appear thereon as proper officers of the Company shall
have ceased to be such officers at the time of such
countersignature, issuance or delivery. The Warrant Agent shall,
upon written instructions of the Chairman of the Board, the
President, any Vice President or the Secretary of the Company,
countersign, issue and deliver Warrant certificates entitling the
Holders thereof to purchase in the aggregate 256,821 Units and
shall countersign and deliver Warrant certificates as otherwise
provided in this Agreement.
2.3. Registration. The warrant certificates shall
be numbered and shall be registered in a register (the "Warrant
Register") as they are issued. The Company and the Warrant Agent
shall be entitled to treat the registered holder of any Warrant
as the owner in fact thereof for all purposes and shall not be
bound to recognize any equitable or other claim to or interest in
such Warrant on the part of any other person, notwithstanding any
notice to the Company or the Warrant Agent to the contrary,
unless the registered holder of the Warrant is changed in
accordance with the terms of this Agreement.
2.4. Statement on Warrant Certificates.
Irrespective of any adjustments pursuant to the provisions of
Section 10 hereof in the number or the kind of shares purchasable
upon the exercise of the Warrants, Warrant certificates
theretofore or thereafter issued may continue to express the same
number and kind of shares as are stated in the Warrant
certificates initially issuable pursuant to this Agreement.
SECTION 3. Transfer or Exchange of Warrants.
3.1. Transfer. The Warrants shall be transferrable
only in the books of the Company maintained at the office or
agency of the Warrant Agent in the City of New York upon delivery
thereof duly endorsed by the Holder or by his or her duly
authorized attorney or legal representative, or accompanied by
proper evidence of succession, assignment or authority to
transfer, which endorsement shall be guaranteed by an eligible
guarantor institution (a bank, stockbroker, savings and loan
association or credit union with membership in an approved
signature guarantee medallion program) pursuant to Rule 17Ad-15
of the Securities Exchange Act of 1934. In all cases of transfer
by an attorney, the original power of attorney, duly approved, or
an official copy thereof, duly certified, shall be deposited and
remain with the Warrant Agent. In case of transfer by executors,
administrators, guardians or other legal representatives, duly
authenticated evidence of their authority shall be produced, and
may be required to be deposited and remain with the Warrant Agent
in its discretion. Upon any registration of transfer, the
Warrant Agent shall countersign and deliver a new Warrant
certificate to the person entitled thereto.
3.2. Exchange of Warrant Certificates. Warrant
certificates may be exchanged for another certificate or
certificates entitling the Holder thereof to purchase a like
aggregate number of Units as the certificate or certificates
surrendered then entitle such Holder to purchase. Any Holder
desiring to exchange a Warrant certificate shall make such
request in writing delivered to the Warrant Agent, and shall
surrender, properly endorsed in the manner described in
subsection 3.1 hereof, the Warrant certificate or certificates to
be so exchanged. Thereupon, the Warrant Agent shall countersign
and deliver to the person entitled thereto a new Warrant
certificate or certificates, as the case may be, as so requested.
SECTION 4. Mutilated or Missing Warrants.
In case any of the certificates evidencing the Warrants
shall be mutilated, lost, stolen or destroyed, the Company may,
in its discretion, issue and the Warrant Agent shall countersign
and deliver in exchange and substitution for and upon
cancellation of the mutilated Warrant certificate, or in lieu of
and substitution for the Warrant certificate lost, stolen or
destroyed, a new Warrant certificate of like tenor and
representing an equivalent right or interest, but only, in case
of any such loss, theft or destruction, upon receipt of evidence
reasonably satisfactory to the Company and the Warrant Agent
thereof and indemnity also satisfactory to them. An applicant
for such substitute Warrant certificate shall also comply with
such other reasonable regulations and pay such other reasonable
charges as the Company or the Warrant Agent may prescribe.
SECTION 5. Term of Warrants; Exercise of Warrants.
5.1 Term of Warrants. Subject to the terms of
this Agreement, each Holder shall have the right at any time on
or after April 30, 1998 and until 5:00 P.M., New York time, on
July 31, 1998 (the "Expiration Date"), to purchase from the
Company the number of Units which the Holder may at the time be
entitled to purchase on exercise of such Warrants.
5.2 Exercise of Warrants. Units may be purchased
upon surrender to the Company at the office or agency of the
Warrant Agent in the City of New York, of the certificate or
certificates evidencing the Warrants to be exercised, together
with the form of election to purchase on the reverse thereof duly
filled in and signed, which signature shall, if the Units are to
be issued in the name of a person other than the Holder of the
Warrant, be guaranteed by an eligible guarantor institution (a
bank, stockbroker, savings and loan association or credit union
with membership in an approved signature guarantee medallion
program) pursuant to Rule 17Ad-15 of the Securities Exchange Act
of 1934, and upon payment to the Warrant Agent for the account of
the Company of the Exercise Price (as defined in and determined
in accordance with the provisions of Section 9 hereof) for the
number of Units in respect of which such Warrants are then being
exercised. Payment of the aggregate Exercise Price shall be made
by certified or cashiers check, or by any combination thereof.
Subject to Section 7 hereof, upon such surrender of
Warrants and payment of the Exercise Price as aforesaid, the
Company shall issue and cause to be delivered, with all
reasonable dispatch, to or upon the written order of the Holder
and in such name or names as the Holder may designate, (i) a
certificate or certificates for the number of full Warrant Shares
so purchased upon the exercise of such Warrants, together with a
check, as provided in Section 11 hereof, in respect of any
fractional Warrant Shares otherwise issuable upon such surrender,
and (ii) a certificate or certificates for the number of full
Series C Warrants so purchased upon the exercise of such
Warrants, with no fractional Series C Warrants issuable upon such
surrender. Such certificate or certificates representing Warrant
Shares or Series C Warrants, as the case may be, shall be deemed
to have been issued and any person so designated to be named
therein shall be deemed to have become a holder of record of such
Warrant Shares or Series C Warrants, as the case may be, as of
the date of the surrender of such Warrants and payment of the
Exercise Price, as aforesaid; provided, however, that if such
Warrants are surrendered, and the Exercise Price is paid, on a
Saturday, Sunday or other day on which banking institutions in
the City of New York are authorized or obligated by law or
executive order to close, the certificates for the Warrant Shares
or Series C Warrants, as the case may be, in respect of which
such Warrants are then exercised shall be issuable as of the next
succeeding Monday, Tuesday, Wednesday, Thursday or Friday on
which such banking institutions are not so authorized or
obligated to close (whether before or after the Expiration Date)
and which is a day on which the Common Stock transfer books of
the Company are open. The rights of purchase represented by the
Warrants shall be exercisable, at the election of the Holders
thereof, either in full or from time to time in part and, in the
event that a certificate evidencing Warrants is exercised in
respect of less than all of the Units specified therein at any
time prior to the expiration of such Warrants, a new certificate
evidencing the remaining Warrant or Warrants will be issued, and
the Warrant Agent is hereby irrevocably authorized to countersign
and to deliver the required new Warrant certificates pursuant to
the provisions of this subsection and of subsection 2.2 hereof
and the Company, whenever required by the Warrant Agent, will
supply the Warrant Agent with Warrant certificates duly executed
on behalf of the Company for such purpose.
SECTION 6. Disposition of Proceeds on Exercise of
Warrants.
The Warrant Agent shall account promptly to the Company
with respect to the Warrants exercised and concurrently pay to
the Company all moneys received by the Warrant Agent for the
purchase of the Units through the exercise of such Warrants.
SECTION 7. Payment of Taxes.
The Company will pay all documentary stamp taxes, if
any, attributable to the issuance of any Warrant certificates or
certificates for Warrant Shares or Series C Warrants issuable
upon the exercise of Warrants; provided, however, that the
Company shall not be required to pay, and the Holder shall pay,
any tax or taxes that may be payable in respect of any transfer
involved in the issue or delivery of any Warrant certificates or
certificates for Warrant Shares or Series C Warrants in a name
other than that of the registered Holder of the Warrants that
were surrendered and the Company shall not be required to issue
or deliver such Warrant certificates or certificates for Warrant
Shares or Series C Warrants unless or until the persons
requesting the issuance thereof shall have paid to the Company
the amount of such tax or shall have established to the
satisfaction of the Company that such tax has been paid.
SECTION 8. Reservation of Warrant Shares;
Authorization of Series C Warrants;
Purchase and Cancellation of Warrants.
8.1. Reservation of Warrant Shares. There have
been reserved, and the Company shall at all times keep reserved
out of its authorized Common Stock, a number of shares of Common
Stock sufficient to provide for the exercise of the right of
purchase represented by the outstanding Warrants. The Company
covenants that all Warrant Shares will, upon issuance, be duly
authorized, validly issued, fully paid and nonassessable. The
Transfer Agent for the Common Stock and every subsequent transfer
agent for any shares of the Company's capital stock issuable upon
the exercise of any of the rights of purchase aforesaid will be
irrevocably authorized and directed at all times to reserve such
number of authorized shares as shall be requisite for such
purpose. The Company will keep a copy of this Agreement on file
with the Transfer Agent for the Common Stock and with every
subsequent transfer agent for any shares of the Company's capital
stock issuable upon the exercise of the rights of purchase
represented by the Warrants. The Warrant Agent is hereby
irrevocably authorized to requisition from time to time from such
Transfer Agent stock certificates required to honor outstanding
Warrants upon exercise thereof in accordance with the terms of
this Agreement. The Company will supply such Transfer Agent with
duly executed stock certificates for such purpose and will
provide or otherwise make available any cash which may be payable
as provided in Section 11 hereof. Promptly after the Expiration
Date, the Warrant Agent shall certify to the Company the
aggregate number of Warrants then outstanding and not exercised
prior to the Expiration Date and thereafter no shares shall be
subject to reservation in respect of such Warrants.
8.2. Authorization of Series C Warrants. The
Company has executed and delivered a Series C Warrant Agreement,
dated as of July 31, 1996 (the "Series C Warrant Agreement"),
between the Company and American Stock Transfer & Trust Company,
as warrant agent (the "Series C Warrant Agent"), relating to the
issuance of the Series C Warrants. The Company will keep a copy
of this Agreement on file with the Series C Warrant Agent and any
subsequent warrant agent for the Series C Warrants. The Warrant
Agent is hereby irrevocably authorized to requisition from time
to time from the Series C Warrant Agent or any subsequent warrant
agent for the Series C Warrants certificates representing Series
C Warrants required to honor outstanding Warrants upon exercise
thereof in accordance with the terms of this Agreement. The
Company will supply the Series C Warrant Agent or any subsequent
warrant agent for the Series C Warrants with duly executed
certificates for the Series C Warrants for such purpose.
8.3. Governmental Approvals and Listings. The
Company will as promptly as practicable take all action which may
be necessary to obtain and keep effective (a) any and all
permits, consents and approvals of governmental agencies and
authorities, and will make any and all filings under federal and
state securities laws, necessary in connection with the issuance,
distribution and transfer of Warrant certificates, the exercise
of the Warrants, and the issuance, sale, transfer and delivery of
Warrant Shares and Series C Warrants and (b) the listing of the
Warrant Shares on each securities exchange on which the Common
Stock may be listed.
8.4. Purchase of Warrants by the Company. The
Company shall have the right, except as limited by law, other
agreement or herein, to purchase or otherwise acquire Warrants at
such times, in such manner and for such consideration as it may
deem appropriate.
8.5. Cancellation of Warrants. In the event the
Company shall purchase or otherwise acquire Warrants, the related
Warrant certificates shall thereupon be delivered to the Warrant
Agent and be cancelled by it and retired. The Warrant Agent
shall cancel any Warrant certificate surrendered for exchange,
substitution, transfer or exercise in whole or in part. Warrant
certificates cancelled by the Warrant Agent pursuant to any
provision of this Agreement shall be delivered to the Company or,
upon the request of the Warrant Agent and with the consent of the
Company, destroyed by the Warrant Agent. The Warrant Agent shall
furnish to the Company written confirmation of the destruction of
the Warrant certificates so cancelled.
SECTION 9. Exercise Price.
The price per share at which each Unit shall be
purchasable upon exercise of a Warrant (the "Exercise Price")
shall be an amount equal to the lesser of (i) 140% of the average
of the daily Trading Price (as defined in Section 10.1(d)) per
share for the Trading Days (as defined in Section 10.1(d)) during
the Pricing Period (rounded down to the nearest cent), and (ii)
$16.00. "Pricing Period is defined as the period commencing on
November 29, 1996 and ending at the close of business on
December 27, 1996.
SECTION 10. Adjustment of Number of Warrant Shares.
10.1. Adjustments. From and after the date of this
Agreement and regardless of whether any Warrants have been
issued, the number and kind of Warrant Shares purchasable upon
the exercise of each Warrant shall be subject to adjustment as
follows:
(a) Stock Dividends, Splits, etc. In case the Company
shall at any time after the date of this Agreement (w) pay a
dividend or make a distribution on its Common Stock which is
paid or made (A) in Common Stock or other shares of the
Company's capital stock or (B) in rights to purchase Common
Stock or other securities of the Company if such rights are
not initially separable from the Common Stock at the time of
issuance, (x) subdivide its outstanding Common Stock into a
greater number of shares of Common Stock, (y) combine its
outstanding shares into a smaller number of shares of Common
Stock or (z) issue by reclassification of its Common Stock
other securities of the Company, then, in any such event the
number of Warrant Shares issuable upon the purchase of each
Unit pursuant to the exercise of a Warrant immediately prior
thereto shall be adjusted so that the Holder of each Warrant
shall be entitled to receive upon exercise of such Warrant
the kind and number of shares of the Company and rights to
purchase Common Stock or other securities of the Company
(or, in the event of the redemption of any such rights, any
cash paid in respect of such redemption) that he or she
would have owned or have been entitled to receive after the
happening of any of the events described above had such
Warrant been exercised immediately prior to the happening of
such event or any record date with respect thereto. An
adjustment made pursuant to this paragraph (a) shall become
effective immediately after the opening of business on the
next business day following the record date in the case of
dividends or other distributions and shall become effective
immediately after the opening of business on the next
business day following the effective date in the case of a
subdivision or combination.
(b) Distribution of Rights or Warrants. In case the
Company shall at any time after the date of this Agreement
issue rights or warrants to the holders of Common Stock as
such entitling them (for a period expiring within 60 days
after the record date for the determination of shareholders
entitled to receive the same) to subscribe for or purchase
Common Stock at a price per share less than the current
market price per share (as defined in paragraph (d) below)
on such record date, then, in each such case the number of
Warrant Shares thereafter issuable upon the purchase of each
Unit pursuant to the exercise of a Warrant shall be
determined by multiplying the number of Warrant Shares
theretofore issuable upon the purchase of each Unit pursuant
to the exercise of each Warrant by a fraction, of which the
numerator shall be the number of shares of Common Stock
outstanding on the date of issuance of such rights or
warrants, plus the number of additional shares of Common
Stock offered for subscription or purchase, and of which the
denominator shall be the number of shares of Common Stock
outstanding on the date of issuance of such rights or
warrants plus the number of shares of Common Stock that the
aggregate offering price of the total number of shares of
Common Stock so offered would purchase at such current
market price. For the purposes of this paragraph (b), the
issuance of rights or warrants to subscribe for or purchase
securities convertible into Common Stock shall be deemed to
be the issuance of rights or warrants to purchase the Common
Stock into which such securities are convertible at an
aggregate offering price equal to the aggregate offering
price of such securities plus the minimum aggregate amount
(if any) payable upon conversion of such securities into
Common Stock. Any adjustment pursuant to this paragraph (b)
shall be made whenever any such rights or warrants are
issued, but shall also become effective retroactively with
respect to Warrants exercised between the record date for
the determination of shareholders entitled to receive such
rights or warrants and the date such rights or warrants are
issued. For purposes of this paragraph (b) and paragraph (c)
below, the granting of the right to purchase shares of
Common Stock (whether from treasury shares or otherwise)
pursuant to any dividend or interest reinvestment plan
and/or Common Stock purchase plan providing for the
reinvestment of dividends or interest payable on securities
of the Company and/or the investment of periodic optional
payments, in any such case at a price per share of not less
than 95% of the current market price per share (determined
as provided in such plans) of the Common Stock, shall not be
deemed to constitute an issue of rights or warrants by the
Company within the meaning of this paragraph (b) or
paragraph (c) below. The provisions of this paragraph (b)
and paragraph (c) below shall not apply to the issuance of
Series C Warrants or Series A Warrants issued pursuant to
that certain Series A Warrant Agreement, dated as of
July 31, 1996, between the Company and American Stock
Transfer & Trust Company, as warrant agent ("Series A
Warrants").
(c) Distributions of Assets. In case the Company
shall at any time after the date of this Agreement
distribute to all holders of its Common Stock evidences of
indebtedness of the Company (or any other entity) or assets
of the Company (or any other entity) (excluding cash
dividends or distributions out of retained earnings) or
rights or warrants to subscribe for securities of the
Company (excluding those referred to in paragraph (a) and
paragraph (b) above), then in each case the number of
Warrant Shares issuable upon the purchase of each Unit
pursuant to the exercise of a Warrant immediately prior to
such distribution shall be adjusted so that the Holder of
each Warrant shall be entitled to receive upon exercise of
such Warrant the kind and number of assets, evidences of
indebtedness, subscription rights and warrants (or, in the
event of the redemption of any such evidences of
indebtedness, subscription rights and warrants, any cash
paid in respect of such redemption) that he or she would
have owned or have been entitled to receive after the
happening of such distribution had such Warrant been
exercised immediately prior to the record date for such
distribution. Such adjustment shall be made whenever any
such distribution is made, and shall become effective on the
date of distribution retroactive to the record date for the
determination of shareholders entitled to receive such
distribution. At the time of any such distribution, the
Company shall deposit the assets, evidence of indebtedness
or securities payable to Holders of the Warrants pursuant
hereto in trust for the Holders with the Warrant Agent or an
institution eligible to act as trustee under an indenture
qualified under the Trust Indenture Act of 1939, as amended,
with instructions as to the investment of such property and
any proceeds therefrom. Such trust indenture shall provide
that any assets, evidence of indebtedness or securities
deposited in such trust shall revert to the Company upon the
expiration of the term of the Warrants.
(d) Computation of Market Price. For the purpose of
any computation under paragraph (b) of this Section, the
current market price per share of Common Stock at any date
shall be deemed to be the average of the daily Trading Price
per share for the 30 consecutive Trading Days commencing 45
Trading Days before the date in question.
"Trading Price" on any specified date shall mean
(i) if the Common Stock is listed or admitted to trade on a
securities exchange, the closing price of the Common Stock,
regular way, on such day, on the principal securities
exchange on which the stock is so listed or admitted to
trade, or, if there is no such reported sale on such date,
the average closing bid and asked prices on such day, or (if
none) then the closing price of the stock or (if none) such
average, as reported on the next preceding date on which
there was such reported activity in such shares (such
determination or earlier date being hereinafter referred to
as the "applicable trading date"); (ii) if the Common Stock
is not listed or admitted to trade on a securities exchange,
the last reported sales price for the Common Stock or (if
none) the average of the last reported bid and asked prices
on the applicable trading date, as reported by the principal
reputable quotation system available to the Board of
Directors; (iii) if the Common Stock is not listed or
admitted to trade on a securities exchange and no such
reported closing sale price or closing bid and asked prices
are available, the average of the reported high bid and low
asked price for the stock on the applicable trading date, as
reported by a reputable quotation source designated by the
Board of Directors; or (iv) if the Common Stock is not
listed or admitted to trade on a securities exchange,
trading is not so reported, and bid and asked prices are not
available on a reasonably current basis, the value as
established by the Board of Directors in good faith at such
time.
The term "Trading Day" shall mean a Monday,
Tuesday, Wednesday, Thursday or Friday on which banking
institutions in the City of New York are not authorized or
obligated by law or executive order to close or, if the
Common Stock is listed or admitted to trading on a national
securities exchange, a day on which the principal national
securities exchange on which the Common Stock is listed or
admitted to trading is open for the transaction of business.
(e) Minimum Adjustment. No adjustment in the number
of Warrant Shares purchasable hereunder shall be required
unless such adjustment would require an increase or decrease
of at least one per cent (1%) in the number of Warrant
Shares purchasable upon the exercise of each Warrant;
provided, however, that any adjustments which by reason of
this paragraph (e) are not required to be made shall be
carried forward and taken into account in any subsequent
adjustment.
(f) Notice of Adjustment. Whenever the number of
Warrant Shares purchasable upon the exercise of Warrants is
adjusted, as herein provided, the Company shall cause the
Warrant Agent promptly to mail by first class mail, postage
prepaid, to each Holder of a Warrant or Warrants notice of
such adjustment or adjustments and shall deliver to the
Warrant Agent a certificate of a firm of independent public
accountants selected by the Board of Directors of the
Company (who may be the regular accountants employed by the
Company) setting forth (A) the number of Warrant Shares
purchasable upon the exercise of each Warrant after such
adjustment, (B) a brief statement of the facts requiring
such adjustment and (C) the computation by which such
adjustment was made. Such certificate shall be conclusive
evidence of the correctness of such adjustment. The Warrant
Agent shall be entitled to rely on such certificate and
shall be under no duty or responsibility with respect to any
such certificate, except to exhibit the same, from time to
time, to any Holder desiring an inspection thereof during
reasonable business hours. The Warrant Agent shall not at
any time be under any duty or responsibility to any Holder
to determine whether any facts exist that may require any
adjustment of the number of Warrant Shares or other stock or
property purchasable upon exercise thereof or with respect
to the nature or extent of any such adjustment when made, or
with respect to the method employed in making such
adjustment.
(g) Definition of Common Shares. For the purpose of
this subsection 10.1, the term "Common Stock" shall mean (i)
the class of stock designated as the Common Stock of the
Company at the date of this Agreement or (ii) any other
class of stock resulting from successive changes or
reclassifications of such shares consisting solely of
changes in par value, or from par value to no par value or
from no par value to par value. In the event that at any
time, as a result of an adjustment made pursuant to
paragraph (a) above, the Holders of a Warrant or Warrants
shall become entitled to purchase any securities of the
Company other than Common Stock, thereafter the number of
such other securities so purchasable upon exercise of each
Warrant shall be subject to adjustment from time to time in
a manner and on terms as nearly equivalent as practicable to
the provisions with respect to the Warrant Shares contained
in this subsection 10.1 and the provisions of Section 5 and
subsections 10.2 and 10.3, inclusive, with respect to the
Warrant Shares, shall apply on like terms to any such other
securities.
(h) Readjustment of Number of Warrant Shares. If,
upon the expiration of any rights or warrants with respect
to which there shall have been an adjustment of the number
of Warrant Shares purchasable upon the exercise of each
Warrant, any of such rights or warrants shall not have been
exercised, the number of Common Stock purchasable upon the
exercise of a Warrant shall, upon such expiration, be
readjusted and shall thereafter be such as it would have
been had it been originally adjusted (or had the original
adjustment not been required, as the case may be) on the
basis of (A) the only Common Stock so issued were the Common
Stock, if any actually issued or sold upon the exercise of
such rights or warrants and (B) such Common Stock, if any,
were issued or sold for the consideration actually received
by the Company upon such exercise plus the consideration, if
any, actually received by the Company for the issuance, sale
or grant of all such rights or warrants whether or not
exercised; provided, that no such readjustment shall have
the effect of reducing the number of shares of Common Stock
purchasable upon exercise of a Warrant by an amount in
excess of the amount of the adjustment initially made in
respect of the issuance, sale or grant of such rights or
warrants.
(i) Prohibition on Certain Actions. During the
Pricing Period, the Company shall not take any of the
actions described in paragraphs (a), (b) or (c) above.
10.2. No Adjustment for Dividends. Except as
provided in subsection 10.1, no adjustment in respect of any
dividends shall be made during the term of a Warrant or upon the
exercise of a Warrant.
10.3. Adjustment upon Merger, Consolidation, etc.
In case the Company shall consolidate or merge with or into any
other corporation (other than a consolidation or merger in which
the Company is the surviving corporation and each share of Common
Stock outstanding immediately prior to such consolidation or
merger is to remain outstanding immediately after such
consolidation or merger) or shall sell or transfer all or
substantially all of its assets to any corporation, the Company
or such successor or purchasing corporation, as the case may be
(collectively, the "acquiring corporation"), shall execute with
the Warrant Agent an agreement that each Holder of a Warrant
shall have the right thereafter upon payment of the Exercise
Price in effect immediately prior to such action to purchase upon
exercise of each Warrant the kind and amount of shares and other
securities, cash and other property that he or she would have
owned or have been entitled to receive after the happening of
such consolidation, merger or sale had such Warrant been
exercised immediately prior to such action, including, without
limitation, any and all distributions in respect thereof from the
date of such action to the date of such exercise (assuming that
such Holder, as a holder of Common Stock prior to such action,
would not have exercised any rights of election as a holder of
Common Stock as to the kind or amount of securities, cash or
other property receivable upon such consolidation, merger or
sale; provided, that if the kind or amount of securities, cash or
other property receivable upon such consolidation, merger or sale
is not the same for each non-electing share of Common Stock, then
the kind and amount of securities, cash or other property
receivable shall be deemed to be the kind and amount so
receivable by a plurality of the non-electing shares). The
Company shall mail by first-class mail, postage prepaid, to each
Holder, notice of the execution of any agreement with an
acquiring corporation as provided in the first sentence of this
subsection 10.3. In addition to any adjustments required by this
subsection 10.3, such agreement shall provide for adjustments
which shall be as nearly equivalent as may be practicable to the
adjustments provided for in this Section 10. The Company shall
not effect any such consolidation, merger or sale unless prior to
or simultaneously with the consummation thereof the acquiring
corporation (if other than the Company) resulting from such
consolidation or merger or the acquiring corporation purchasing
such assets or other appropriate corporation or entity shall
assume, by written instrument executed and delivered to the
Warrant Agent, the obligation to deliver to each Holder such
shares of stock, securities or assets as, in accordance with the
foregoing provisions, such Holder may be entitled to receive and
the other obligations of the Company under this Agreement. The
provisions of this subsection 10.3 shall similarly apply to
successive consolidations, mergers, sales or conveyances. The
Warrant Agent shall be under no duty or responsibility to
determine the correctness of any provisions contained in any such
agreement relating either to the kind or amount of shares of
stock or other securities, cash or property receivable upon
exercise of Warrants or with respect to the method employed and
provided therein for any adjustments.
SECTION 11. Fractional Warrant Shares.
The Company shall not be required to issue fractional
Warrant Shares on the exercise of Warrants. If more than one
Warrant shall be presented for exercise in full at the same time
by the same Holder, the number of full Warrant Shares that shall
be issuable upon the exercise thereof shall be computed on the
basis of the aggregate number of Warrant Shares represented by
the Warrants so presented. If any fraction of a Warrant Share
would, except for the provisions of this Section 11, be issuable
on the exercise of any Warrant (or specified portion thereof),
the Company shall pay an amount by check equal to the current
market price per share of common stock (as defined in subsection
10.1(d) above) multiplied by such fraction.
SECTION 12. No Rights as Shareholders; Notices to
Warrant Holders.
Nothing contained in this Agreement or in any of the
Warrants shall be construed as conferring upon the Holders or
their transferees the right to vote or to receive dividends or to
consent or to receive notice as shareholders in respect of any
meeting of shareholders for the election of directors of the
Company or any other matter, or any rights whatsoever as
shareholders of the Company. If prior to the expiration of the
Warrants:
(a) the Company shall declare a dividend or other
distribution on its Common Shares, other than (i) in cash
out of retained earnings, (ii) in other shares of Common
Stock, or (iii) in rights to purchase shares of Common Stock
or other securities of the Company of the character
described in paragraph (a) of subsection 10.1; or
(b) the Company shall authorize the issuance to all
holders of its Common Stock of rights or warrants entitling
them to subscribe for or purchase any Common Stock or any
other subscription rights or warrants (other than rights of
the character described in paragraph (a) of subsection 10.1
and other than Series A Warrants and Series C Warrants); or
(c) there shall occur a reclassification of the
capital stock of the Company (other than a subdivision or
combination of its outstanding Common Stock), or a
consolidation or merger to which the Company is a party and
for which approval of any shareholders of the Company is
required, or a sale or transfer of all or substantially all
the assets of the Company; or
(d) the Company shall take an action ("Adjustment
Action") which would cause an adjustment pursuant to Section
10 hereof of the number or kind of Common Shares (or other
securities) purchasable upon the exercise of each Warrant
that would have the effect of reducing the price payable for
a share of the Company's capital stock by a Holder upon
exercise of a Warrant to an amount which is less than the
current par value of such share; or
(e) a voluntary or involuntary dissolution,
liquidation or winding up of the Company shall be proposed;
then, in any such event, the Company shall cause to be mailed to
the Warrant Agent and the Holders in the manner provided in
Section 18 hereof, at least 20 days prior to the applicable
record or effective date hereinafter specified, a notice stating
(i) the date as of which the holders of record of Common Stock to
be entitled to such dividend, distribution, rights or warrants
are to be determined, or (ii) the date on which such
reclassification, Adjustment Action, consolidation, merger, sale,
transfer, dissolution, liquidation or winding up is expected to
become effective, and the date as of which it is expected that
holders of record of Common Stock shall be entitled to exchange
their shares for securities or other property, if any,
deliverable upon such reclassification, Adjustment Action,
consolidation, merger, sale, transfer, dissolution, liquidation
or winding up. Such notice shall also state whether such
transaction will result in any adjustment of the number or kind
of Common Stock (or other securities) purchasable upon the
exercise of a Warrant and, if so, shall set forth the nature
thereof and the date upon which it will become effective. In the
event the Company gives notice to the holders of its Common Stock
of the declaration or distribution of rights to purchase Common
Stock or other securities of the Company of the character
described in paragraph (a) of subsection 10.1, the Company will
give concurrently a similar notice to the Holders in the manner
provided in Section 18 hereof. The failure to give the notices
required by this Section 12, or any defect therein, shall not
affect the legality or validity of any such dividend,
distribution, right, warrant, reclassification, Adjustment
Action, consolidation, merger, sale, transfer, dissolution,
liquidation or winding up, or the vote on any action authorizing
the same.
SECTION 13. Inspection of Warrant Agreement.
The Warrant Agent shall keep copies of this
Agreement and any notices given or received hereunder available
for inspection by the Holders during normal business hours at its
office in the City of New York for that purpose. The Company
shall supply the Warrant Agent from time to time with such
numbers of copies of this Agreement as the Warrant Agent may
request.
SECTION 14. Merger or Consolidation or Change of
Name of Warrant Agent.
Any corporation into which the Warrant Agent may be
merged or with which it may be consolidated, or any corporation
resulting from any merger or consolidation to which the Warrant
Agent shall be a party, or any corporation succeeding to the
stock transfer or corporate trust business of the Warrant Agent,
shall be the successor to the Warrant Agent hereunder without the
execution of filing of any paper or any further act on the part
of any of the parties hereto, provided that such corporation
would be eligible for appointment as successor Warrant Agent
under the provisions of Section 16 hereof. In case at the time
such successor to the Warrant Agent shall succeed to the agency
created by this Agreement any of the Warrants shall have been
countersigned but not delivered, any such successor to the
Warrant Agent may adopt the countersignature of the original
Warrant Agent and deliver such Warrants so countersigned; and in
case at that time any of the Warrants shall not have been
countersigned, any successor to the Warrant Agent may countersign
such Warrants either in the name of the predecessor Warrant Agent
or in the name of the successor Warrant Agent, and in all such
cases such Warrants shall have the full force provided in the
Warrants and in this Agreement.
In case at any time the name of the Warrant Agent shall
be changed and at such time any of the Warrants shall have been
countersigned but not delivered, the Warrant Agent may adopt the
countersignatures under its prior name and deliver Warrants so
countersigned; and in case at that time any of the Warrants shall
not have been countersigned, the Warrant Agent may countersign
such Warrants either in its prior name or in its changed name;
and in all such cases such Warrants shall have the full force
provided in the Warrants and in this Agreement.
SECTION 15. Concerning the Warrant Agent.
The Warrant Agent undertakes the duties and obligations
imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the Holders of
Warrants, by their acceptance thereof, shall be bound:
15.1. Disclaimer of Representations. The
statements contained herein and in the Warrants shall be taken as
statements of the Company, and the Warrant Agent assumes no
responsibility for the correctness of any of the same except such
as describe the Warrant Agent or action taken by it. The Warrant
Agent assumes no responsibility with respect to the distribution
of the Warrants except as herein otherwise provided.
15.2. No Responsibility for Failure of Company's
Covenants. The Warrant Agent shall not be responsible for any
failure of the Company to comply with any of the covenants
contained in this Agreement or in the Warrants.
15.3. Delegation. The Warrant Agent may execute
and exercise any of the rights or powers hereby vested in it or
perform any duty hereunder either itself or by or through its
attorneys or agents (which shall not include its employees), and
the Warrant Agent shall not be answerable or accountable for any
act, neglect or misconduct of any such attorneys or agents or for
any loss to the Company resulting from such neglect or misconduct
provided reasonable care shall have been exercised in the
selection and continued employment thereof.
15.4. Opinion of Counsel. The Warrant Agent may
consult at any time with legal counsel satisfactory to it, who
may be internal or outside counsel to the Company, and the
Warrant Agent shall incur no liability or responsibility to the
Company or to any Holder in respect of any action taken, suffered
or omitted by it hereunder in good faith and in accordance with
the opinion or the advice of such counsel.
15.5. Officer's Certificate. Whenever in the
performance of its duties under this Agreement the Warrant Agent
shall deem it necessary or desirable that any fact or matter be
proved or established by the Company prior to taking or suffering
any action hereunder, such fact or matter (unless other evidence
in respect thereof be herein specifically prescribed) may be
deemed to be conclusively proved and established by a certificate
signed by the Chairman of the Board, the President, any Vice
President, the Treasurer or the Secretary of the Company and
delivered to the Warrant Agent; and such certificate shall be
full authorization to the Warrant Agent for any action taken or
suffered in good faith by it under the provisions of this
Agreement in reliance upon such certificate.
15.6. Compensation and Reimbursement. The Company
agrees to pay the Warrant Agent reasonable compensation for all
services rendered by the Warrant Agent in the performance of its
duties under this Agreement, to reimburse the Warrant Agent for
all expenses, taxes and governmental charges and other charges of
any kind and nature reasonably incurred by the Warrant Agent in
the performance of its duties under this Agreement, and agrees to
indemnify the Warrant Agent and save it harmless against any and
all liabilities, including judgments, costs and reasonable
counsel fees, for anything done or omitted by the Warrant Agent
in the performance of its duties under this Agreement except as a
result of the Warrant Agent's gross negligence or bad faith.
15.7. No Action Without Assurance of Reimbursement.
The Warrant Agent shall be under no obligation to institute any
action, suit or legal proceeding or to take any other action
likely to involve expense unless the Company or one or more
Holders shall furnish the Warrant Agent with reasonable security
and indemnity for any costs and expenses which may be incurred;
but this provision shall not affect the power of the Warrant
Agent to take such action as the Warrant Agent may consider
proper, whether with or without any such security or indemnity.
All rights of action under this Agreement or under any of the
Warrants may be enforced by the Warrant Agent without the
possession of any of the Warrants or the production thereof at
any trial or other proceeding relative thereto, and any such
action, suit or proceeding instituted by the Warrant Agent shall
be brought in its name as Warrant Agent, and any recovery of
judgment shall be for the ratable benefit of the Holders, as
their respective rights or interests may appear.
15.8. Conflicts of Interest. The Warrant Agent and
any stockholder, director, officer or employee of the Warrant
Agent may buy, sell or deal in any of the Warrants or other
securities of the Company or become pecuniarily interested in any
transaction in which the company may be interested, or contract
with or lend money to the Company or otherwise act as fully and
freely as though it were not Warrant Agent under this Agreement.
Nothing herein shall preclude the Warrant Agent from acting in
any other capacity for the Company or for any other legal entity.
15.9. Solely as Agent. The Warrant Agent shall act
hereunder solely as agent, and its duties shall be determined
solely by the provisions hereof. The Warrant Agent shall not be
liable for anything that it may do or refrain from doing in
connection with this Agreement except for its own gross
negligence or bad faith.
15.10. Reliance on Documents. The Warrant Agent
will not incur any liability or responsibility to the Company or
to any Holder of any Warrant for any action taken in reliance on
any notice, resolution, waiver, consent, order, certificate, or
other paper, document or instrument reasonably believed by it to
be genuine and to have been signed, sent or presented by the
proper party or parties.
15.11. No Representation Regarding Validity, Etc.
The Warrant Agent shall not be under any responsibility in
respect of the validity of this Agreement or the execution and
delivery hereof (except the due execution and delivery hereof by
the Warrant Agent) or in respect of the validity or execution of
any Warrant (except its countersignature thereof); nor shall the
Warrant Agent by any act hereunder be deemed to make any
representation or warranty as to the authorization or reservation
of any Warrant Shares (or other stock) or Series C Warrants to be
issued pursuant to this Agreement or any Warrant.
15.12. Instructions from Company. The Warrant Agent
is hereby authorized and directed to accept instructions with
respect to the performance of its duties hereunder from the
Chairman of the Board, the President, any Vice President, the
Treasurer or the Secretary of the Company, and to apply to such
officers for advice or instructions in connection with its
duties, and shall not be liable for any action taken or suffered
to be taken by it in good faith in accordance with instructions
of any such Officers.
SECTION 16. Change of Warrant Agent.
The Warrant Agent may resign and be discharged from its
duties under this Agreement by giving to the Company 60 days'
notice in writing. The Warrant Agent may be removed by like
notice to the Warrant Agent from the Company. If the Warrant
Agent shall resign or be removed or shall otherwise become
incapable of acting, the Company shall appoint a successor to the
Warrant Agent. If the Company shall fail to make such
appointment within a period of 50 days after such notice of
removal or after it has been notified in writing of such
resignation or incapacity by the resigning or incapacitated
Warrant Agent or by any Holder (who shall with such notice submit
his Warrant for inspection by the Company), then the resigning,
discharged or removed Warrant Agent or any Holder may apply to
any court of competent jurisdiction for the appointment of a
successor to the Warrant Agent. Any successor warrant agent,
whether appointed by the Company or such court, shall be (a) a
bank or trust company, in good standing, incorporated under the
laws of the United States of America or any state thereof and
having at the time of its appointment as warrant agent a combined
capital and surplus of at least $100,000,000, as set forth in its
most recent published annual report of condition or (b) an
affiliate of a corporation described in clause (a) above. After
appointment, the successor warrant agent shall be vested with the
same powers, rights, duties and responsibilities as if it had
been originally named as Warrant Agent hereunder without further
act or deed; but the former Warrant Agent shall deliver and
transfer to the successor warrant agent any property at the time
held by it hereunder, and shall execute and deliver any further
assurance, conveyance, act or deed necessary for the purpose.
Failure to file any notice provided for in this Section 16,
however, or any defect therein, shall not affect the legality or
validity of the resignation or removal of the Warrant Agent or
the appointment of the successor warrant agent, as the case may
be. In the event of such resignation or removal, the successor
warrant agent (or in the absence of any immediate successor
warrant agent, the Company) shall promptly mail, by first-class
mail, postage prepaid, to each Holder, written notice of such
removal or resignation and the name and address of such successor
warrant agent.
SECTION 17. Identity of Transfer Agent.
Forthwith upon the appointment of any subsequent
Transfer Agent for the Company's shares of Common Stock, or any
other shares of the Company's capital stock issuable upon the
exercise of the rights of purchase represented by the Warrants,
or the appointment of any subsequent warrant agent for the Series
C Warrants, the Company will file with the Warrant Agent a
statement setting forth the name and address of such Transfer
Agent or warrant agent, as the case may be.
SECTION 18. Notices.
Any notice pursuant to this Agreement by the Company or
by the Holder of any warrant to the Warrant Agent, or by the
Warrant Agent or by the Holder of any Warrant to the Company,
shall be in writing and shall be deemed to have been duly given
if delivered or mailed by certified mail, return receipt
requested, (a) if to the Company, House of Fabrics, Inc., 13400
Riverside Drive, Sherman Oaks, California 91423-2598, Attention:
Secretary; and, if to the Warrant Agent, to American Stock
Transfer & Trust Company, 40 Wall Street, New York, New York
10005, Attention: Executive Vice President. Each party hereto
may from time to time change the address to which notices to it
are to be delivered or mailed hereunder by notice in writing to
the other party.
Any notice mailed pursuant to this Agreement by the
Company or the Warrant Agent to the Holders of Warrants shall be
in writing and shall be deemed to have been duly given if mailed
by first-class mail, postage prepaid, to such Holders at their
respective addresses on the Warrant Register of the Warrant
Agent.
SECTION 19. Supplements and Amendments.
The Company and the Warrant Agent may from time to time
supplement or amend this Agreement, without the approval of any
Holder in order to cure any ambiguity or to correct or supplement
any provision contained herein that may be defective or
inconsistent with any other provisions herein, or to make any
other provisions with regard to matters or questions arising
hereunder that the Company and the Warrant Agent may deem
necessary or desirable and that shall not adversely affect the
interests of the Holders of Warrants. The Warrant Agent shall
promptly notify the Holders of any such supplement or amendment.
SECTION 20. Successors.
All the covenants and provisions of this Agreement by
or for the benefit of the Company or the Warrant Agent shall bind
and inure to the benefit of their respective successors and
assigns hereunder.
SECTION 21. Merger or Consolidation of the Company.
The Company will not merge or consolidate with or into
any other corporation unless the corporation resulting from such
merger or consolidation (if not the Company) shall expressly
assume, by supplemental agreement satisfactory in form to the
Warrant Agent in the exercise of its reasonable judgment and
executed and delivered to the Warrant Agent, the due and punctual
performance and observance of each and every covenant and
condition of this Agreement to be performed and observed by the
Company.
SECTION 22. Applicable Law.
This Agreement and each Warrant issued hereunder shall
be deemed to be a contract made under the laws of the State of
California and for all purposes shall be construed in accordance
with the laws of said State.
SECTION 23. Benefits of this Agreement.
Nothing in this Agreement shall be construed to give to
any person or corporation other than the Company, the Warrant
Agent and the Holders of the Warrants any legal or equitable
right, remedy or claim under this Agreement; and this Agreement
shall be for the sole and exclusive benefit of the Company, the
Warrant Agent, and their respective successors and assigns
hereunder, and the Holders from time to time of the Warrants.
SECTION 24. Counterparts.
This Agreement may be executed in any number of
counterparts and each of such counterparts shall for all purposes
be deemed to be an original, and all such counterparts shall
together constitute but one and the same instrument.
SECTION 25. Captions.
The captions of the Sections and subsections of this
Agreement have been inserted for convenience only and shall have
no substantive effect.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the day and year first above
written.
HOUSE OF FABRICS, INC.
By /s/ GARY L. LARKINS
-----------------------------
Gary L. Larkins
Title: President
Attest:
/s/ MARVIN S. MALTZMAN
- ---------------------------
Marvin S. Maltzman
Title: Secretary
AMERICAN STOCK TRANSFER & TRUST COMPANY
as Warrant Agent
By: /s/ JOE WOLF
-------------------------------
Joe Wolf
Title: Vice President
Attest:
/s/ JOE ALICIA
- ---------------------
Joe Alicia
Title:
<PAGE>
Exhibit A
SERIES B WARRANT TO PURCHASE COMMON STOCK
AND SERIES C WARRANTS VOID AFTER 5:00 P.M.,
NEW YORK TIME, ON JULY 31, 1998
HOUSE OF FABRICS, INC.
No._______ ________ Warrants
This certifies that, for value received, ________
_______________ or registered assigns (the "Holder"), is entitled
to purchase from House of Fabrics, Inc., a Delaware corporation
(the "Company"), at any time on or after April 30, 1998 and until
5:00 P.M., New York time, on July 31, 1998 (the "Expiration
Date"), at the Exercise Price (as defined below), a number of
Units ("Units") equal to the number of Warrants set forth above,
each Unit consisting of (i) one share of the Company's Common
Stock, par value $.01 per share (the "Common Stock"), and (ii)
one Series C Common Stock Purchase Warrant (a "Series C
Warrant"), each Series Warrant entitling the registered owner
thereof to purchase one share of Common Stock.
The "Exercise Price" per Warrant shall be $________
[THE LESSER OF (I) 140% OF THE AVERAGE OF THE DAILY TRADING PRICE
PER SHARE OF THE COMMON STOCK FOR THE TRADING DAYS DURING THE
PERIOD COMMENCING ON NOVEMBER 29, 1996 AND ENDING AT THE CLOSE OF
BUSINESS ON DECEMBER 27, 1996, AND (II) $16.00.]
The Warrants evidenced hereby may be exercised in whole
or in part by presentation of this Warrant Certificate with the
Purchase Form on the reverse side hereof duly executed (with a
signature guarantee if required by the Warrant Agreement) and
simultaneous payment of the Exercise Price at the office or
agency of the Company maintained for that purpose in the City of
New York. Initially, American Stock Transfer & Trust Company
will act as Warrant Agent (the "Warrant Agent"). Payment of such
price shall be made at the option of the holder hereof by
certified or cashier's check. No fractional shares of Common
Stock will be issued upon the exercise of rights to purchase
hereunder, but the Company shall pay the cash value of any such
fraction upon the exercise of one or more Warrants, all as
provided in the Warrant Agreement. No fractional Series C
Warrants will be issued upon the exercise of rights to purchase
hereunder.
Upon any partial exercise of this Warrant Certificate,
there shall be countersigned and issued to the Holder hereof a
new Warrant Certificate in respect of the shares as to which this
Warrant shall not have been exercised. This Warrant Certificate
may be exchanged at the office of the Warrant Agent maintained
for that purpose in the City of New York by surrender of this
Warrant Certificate properly endorsed (with a signature guarantee
if required by the Warrant Agreement), either separately or in
combination with one or more other Warrant Certificates, for one
or more new Warrants for the same aggregate number of shares as
were evidenced by the Warrant Certificate or Warrant Certificates
exchanged.
This Warrant Certificate is transferable at the office
of the Warrant Agent maintained for that purpose in the City of
New York in the manner and subject to the limitations set forth
in the Warrant Agreement.
The Warrants evidenced hereby are part of a duly
authorized issue of Series B Warrants issued under and in
accordance with a Warrant Agreement dated as of July 31, 1996,
between the Company and the Warrant Agent and are subject to the
terms and provisions contained in the Warrant Agreement, to all
of which the Holder of this Warrant Certificate by acceptance
hereof consents. Copies of the Warrant Agreement are on file at
the above mentioned office of the Warrant Agent and may be
obtained for inspection by the Holder hereof upon written request
to the Warrant Agent.
The Holder hereof may be treated by the Company, the
Warrant Agent, and all other persons dealing with this Warrant
Certificate as the absolute owner hereof for any purpose and as
the person entitled to exercise the rights represented hereby, or
to the transfer hereof on the books of the Company, any notice to
the contrary notwithstanding, and until such transfer on such
books, the Company, the Warrant Agent and all such other persons
may treat the registered holder hereof as the owner for all
purposes.
The Warrants evidenced hereby do not entitle any Holder
hereof to any of the rights of a shareholder of the Company.
This Warrant Certificate shall not be valid or
obligatory for any purpose until it shall have been countersigned
by the Warrant Agent.
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Warrant
Certificate to be executed by its duly authorized officers and
the corporate seal hereunto affixed.
Dated: HOUSE OF FABRICS, INC.
By:
----------------------------
Title:
ATTEST:
--------------------------------
Title:
COUNTERSIGNED:
AMERICAN STOCK TRANSFER & TRUST COMPANY
WARRANT AGENT
By:
- -------------------------------
Title:
<PAGE>
HOUSE OF FABRICS, INC.
PURCHASE FORM
The undersigned hereby irrevocably elects to exercise
the right of purchase represented by the within Warrant
Certificate for, and to purchase thereunder, ____ Units, each
Unit consisting of (i) one share of Common Stock and (ii) one
Series C Warrant, and requests that certificates for such shares
of Common Stock and the Series C Warrants be issued in the name
of:
Name:___________________________________________________
Address:________________________________________________
Social Security or Taxpayer's
Identification Number: ____________________________
and, if said number of Units shall not be all the Units
purchasable thereunder, that a new Warrant Certificate for the
balance remaining of the Units purchasable under the within
Warrant Certificate be registered in the name of the undersigned
Warrantholder or his or her Assignee as below indicated and
delivered to the address stated below.
Name of Warrantholder
or Assignee: __________________________
Address: __________________________
Social Security or Taxpayer's
Identification Number: __________________________
Signature: _________________
Dated: ___________________
NOTICE: The above signature must
correspond with the name as
written upon the face of this
Warrant Certificate in every
particular, without alteration
or enlargement or any change
whatever, unless this Warrant
has been assigned.
Signature Guaranteed: ______________________
Signatures must be guaranteed by an eligible guarantor
institution (a bank, stockbroker, savings and loan association or
credit union with membership in an approved signature guarantee
medallion program) pursuant to Rule 17Ad-15 of the Securities
Exchange Act of 1934.
<PAGE>
ASSIGNMENT
(To be signed only upon
assignment of Warrant Certificate)
FOR VALUE RECEIVED, the undersigned hereby sells,
assigns and transfers unto _______________________________
(Name of Assignee)
_____________________________________________________
_____________________________________________________
_____________________________________________________
(Social Security or other Taxpayer Identification Number of
Assignee)
the within Warrants, hereby irrevocably constituting and
appointing ____________________________________________
_____________ Attorney to transfer said Warrants on the books of
the Company, with full power of substitution in the premises.
DATED: __________________
_________________________________
Signature of Registered Holder
NOTICE: The signature of
this assignment must
correspond with the
name as it appears
upon the face of the
within Warrant
Certificate in every
particular, without
alteration or
enlargement or any
change whatever.
Signature Guaranteed: ________________________
Signatures must be guaranteed by an eligible guarantor
institution (a bank, stockbroker, savings and loan association or
credit union with membership in an approved signature guarantee
medallion program) pursuant to Rule 17Ad-15 of the Securities
Exchange Act of 1934.
<PAGE>
AMENDMENT NO. 1 TO SERIES B WARRANT AGREEMENT
This Amendment No. 1 to Series B Warrant Agreement
(this "Amendment") is dated as of December 30, 1996 by and
between House of Fabrics, Inc., a Delaware corporation (the
"Company"), and American Stock Transfer & Trust Company, as
warrant agent (the "Warrant Agent").
W I T N E S S E T H:
WHEREAS, the Company and the Warrant Agent have entered
into a Series B Warrant Agreement, dated as of July 31, 1996 (the
"Warrant Agreement"), pursuant to which the Company proposes to
issue up to 256,821 Series B Warrants to purchase Units, each
Unit consisting of (i) one share of the Company's Common Stock,
par value $.01 per share, and (ii) one Series C Warrant, each
Series C Warrant entitling the registered owner thereof to
purchase one share of Common Stock; and
WHEREAS, the Warrant Agreement was executed in
connection with the Third Amended Joint Plan of Reorganization,
dated May 23, 1996, as modified, of the Company and others, which
Plan of Reorganization was confirmed by the order of the United
States Bankruptcy Court of the Central District of California,
Judge Kathleen T. Lax, dated July 10, 1996 and duly entered on
July 10, 1996 in the proceeding entitled House of Fabrics, Inc.
et. al., debtors, case number SV94-50060KL (the "Plan of
Reorganization"); and
WHEREAS, the Plan of Reorganization provides that the
exercise price for the Series B Warrants shall be an amount equal
to the greater of (i) 140% of the average daily Trading Price (as
defined in the Warrant Agreement) per share for the Trading Days
(as defined in the Warrant Agreement) during the Pricing Period
(as defined in the Warrant Agreement), and (ii) $16.00; and
WHEREAS, due to a typographical error, Section 9 of the
Warrant Agreement provides that the exercise price shall be the
lesser of clauses (i) and (ii) above; and
WHEREAS, as permitted by Section 19 of the Warrant
Agreement, the parties wish to enter into this Amendment to
correct the typographical error noted above.
NOW, THEREFORE, the Company and the Warrant Agent
hereby agree as follows:
1. Section 9 of the Warrant Agreement is hereby
amended in its entirety to read as follows:
"SECTION 9. Exercise Price.
The price per share at which each Unit shall
be purchasable upon exercise of a Warrant (the
"Exercise Price") shall be an amount equal to the
greater of (i) 140% of the average of the daily
Trading Price (as defined in Section 10.1 (d)) per
share for the Trading Days (as defined in Section
10.1 (d)) during the Pricing Period (rounded down
to the nearest cent), and (ii) $16.00. 'Pricing
Period' is defined as the period commencing on
November 29, 1996 and ending at the close of
business on December 27, 1996."
2. The second paragraph of Exhibit A to the Warrant
Agreement is hereby amended in its entirety to read as follows:
"The `Exercise Price' per Warrant shall be $_____
[THE GREATER OF (I) 140% OF THE AVERAGE OF THE DAILY
TRADING PRICE PER SHARE OF THE COMMON STOCK FOR THE
TRADING DAYS DURING THE PERIOD COMMENCING ON NOVEMBER
29, 1996 AND ENDING AT THE CLOSE OF BUSINESS ON
DECEMBER 27, 1996, AND (II) $16.00.]"
3. Except as expressly set forth in this Amendment,
the Warrant Agreement shall remain in full force and effect. The
Warrant Agreement, as amended by this Amendment, is in all
respects ratified and confirmed, and this Amendment shall be
deemed to be part of the Warrant Agreement in the manner and to
the extent herein provided.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed as of the day and year first above
written.
HOUSE OF FABRICS, INC.
By: /s/ Gary L. Larkins
---------------------------------
Title: Vice Chairman of the Board
ATTEST:
/s/ Marvin S. Maltzman
- ------------------------------
Title: Senior Vice President,
Secretary and General
Counsel
AMERICAN STOCK TRANSFER & TRUST
COMPANY, as Warrant Agent
By: /s/ Joe Wolf
---------------------------------
Title: Vice President
ATTEST:
/s/ Joe Alicia
- ---------------------------
Title:
<PAGE>
HOUSE OF FABRICS, INC.
AND
AMERICAN STOCK TRANSFER & TRUST COMPANY,
AS WARRANT AGENT
___________________________
SERIES C WARRANT AGREEMENT
___________________________
DATED AS OF JULY 31, 1996
<PAGE>
TABLE OF CONTENTS*
____________________
* This Table of Contents does not constitute a part of
this Agreement or have any bearing upon the interpretation
of any of its terms or provisions.
Section Page
1. Appointment of Warrant Agent. . . . . . . . . . . . . . . 1
2. Form of Warrants. . . . . . . . . . . . . . . . . . . . . 1
3. Transfer or Exchange of Warrants. . . . . . . . . . . . . 3
4. Mutilated or Missing Warrants . . . . . . . . . . . . . . 3
5. Term of Warrants; Exercise of Warrants. . . . . . . . . . 4
6. Disposition of Proceeds on Exercise of Warrants . . . . . 5
7. Payment of Taxes. . . . . . . . . . . . . . . . . . . . . 5
8. Reservation of Warrant Shares; Purchase and
Cancellation of Warrants. . . . . . . . . . . . . . . . . 5
9. Exercise Price. . . . . . . . . . . . . . . . . . . . . . 6
10. Adjustment of Exercise Price and Number of Warrant
Shares. . . . . . . . . . . . . . . . . . . . . . . . . . 7
11. Fractional Warrant Shares . . . . . . . . . . . . . . . . 14
12. No Rights as Shareholders; Notices to Warrant Holders . . 14
13. Inspection of Warrant Agreement . . . . . . . . . . . . . 16
14. Merger or Consolidation or Change of Name of Warrant
Agent . . . . . . . . . . . . . . . . . . . . . . . . . . 16
15. Concerning the Warrant Agent. . . . . . . . . . . . . . . 16
16. Change of Warrant Agent . . . . . . . . . . . . . . . . . 19
17. Identity of Transfer Agent. . . . . . . . . . . . . . . . 20
18. Notices . . . . . . . . . . . . . . . . . . . . . . . . . 20
19. Supplements and Amendments. . . . . . . . . . . . . . . . 20
20. Successors. . . . . . . . . . . . . . . . . . . . . . . . 21
21. Merger or Consolidation of the Company. . . . . . . . . . 21
22. Applicable Law. . . . . . . . . . . . . . . . . . . . . . 21
23. Benefits of this Agreement. . . . . . . . . . . . . . . . 21
24. Counterparts. . . . . . . . . . . . . . . . . . . . . . . 21
25. Captions. . . . . . . . . . . . . . . . . . . . . . . . . 21
EXHIBIT A - Form of Warrant
<PAGE>
SERIES C WARRANT AGREEMENT, dated as of July 31, 1996,
between HOUSE OF FABRICS, INC., a Delaware corporation (the
"Company"), and AMERICAN STOCK TRANSFER & TRUST COMPANY, as
Warrant Agent (the "Warrant Agent").
WITNESSETH:
WHEREAS, the Company proposes to issue up to 256,821
Series C Common Stock Purchase Warrants hereinafter described
(the "Warrants") to purchase its Common Stock, par value $.01 per
share (the "Common Stock"), each Warrant entitling the registered
owner thereof to purchase one share of Common stock (each share
of Common Stock purchasable upon the exercise of a Warrant being
referred to herein as a "Warrant Share"); and
WHEREAS, the Company wishes the Warrant Agent to act on
behalf of the Company, and the Warrant Agent is willing to act,
in connection with the issuance, transfer, exchange and exercise
of the Warrants.
NOW, THEREFORE, in consideration of the foregoing and
for the purpose of defining the terms and provisions of the
Warrants and the respective rights and obligations thereunder of
the Company and the registered owners of the Warrants (the
"Holders"), the Company and the Warrant Agent hereby agree as
follows:
SECTION 1. Appointment of Warrant Agent.
The Company hereby appoints the Warrant Agent to act as
agent for the Company in accordance with the terms and conditions
hereinafter set forth, and the Warrant Agent hereby accepts such
appointment.
SECTION 2. Form of Warrants.
2.1. Form of Warrant Certificates. The text of
the Warrant certificate and of the form of election to purchase
Warrant Shares shall be substantially as set forth in Exhibit A
attached hereto. The Warrant certificates shall be appropriately
printed, lithographed or engraved and may have such letters,
numbers or other marks of identification and such legends
printed, lithographed or engraved thereon as the Company may deem
appropriate and as are not inconsistent with the provisions of
this Agreement, or as may be required to comply with any rule or
regulation of any stock exchange on which the Warrants may be
listed, or to conform to usage. The price per Warrant Share and
the number of Warrant Shares issuable upon exercise of each
Warrant are subject to adjustment upon the occurrence of certain
events, all as hereinafter provided. The Warrant certificates
shall be executed on behalf of the Company by its Chairman of the
Board, its President or one of its Vice Presidents under its
corporate seal reproduced thereon and attested by its Secretary
or an Assistant Secretary. The signature of any of such officers
on the Warrant certificates may be manual or facsimile.
Warrant certificates bearing the manual or facsimile
signatures of individuals who were at any time the proper
officers of the Company shall bind the Company, notwithstanding
that such individuals or any one of them shall have ceased to
hold such offices prior to the delivery of such Warrant
certificates or did not hold such office on the date of this
Agreement.
Warrant certificates shall be dated as of the date of
countersignature thereof by the Warrant Agent either upon initial
issuance or upon exchange, substitution or transfer.
2.2. Countersignature of Warrant Certificates.
The Warrant certificates shall be manually countersigned by the
Warrant Agent (or any successor to the Warrant Agent then acting
as warrant agent under this Agreement) and shall not be valid for
any purpose unless so countersigned. Warrant certificates may be
countersigned by the Warrant Agent (or by its successor as
warrant agent hereunder) and may be delivered by the Warrant
Agent notwithstanding that the persons whose manual or facsimile
signatures appear thereon as proper officers of the Company shall
have ceased to be such officers at the time of such
countersignature, issuance or delivery. The Warrant Agent shall,
upon written instructions of the Chairman of the Board, the
President, any Vice President or the Secretary of the Company,
countersign, issue and deliver Warrant certificates entitling the
Holders thereof to purchase in the aggregate Warrant Shares
(subject to adjustment pursuant to Section 11 hereof) and shall
countersign and deliver Warrant certificates as otherwise
provided in this Agreement.
2.3. Registration. The warrant certificates shall
be numbered and shall be registered in a register (the "Warrant
Register") as they are issued. The Company and the Warrant Agent
shall be entitled to treat the registered holder of any Warrant
as the owner in fact thereof for all purposes and shall not be
bound to recognize any equitable or other claim to or interest in
such Warrant on the part of any other person, notwithstanding any
notice to the Company or the Warrant Agent to the contrary,
unless the registered holder of the Warrant is changed in
accordance with the terms of this Agreement.
2.4. Statement on Warrant Certificates.
Irrespective of any adjustments pursuant to the provisions of
Section 10 hereof in the Exercise Price (as defined in Section 9
hereof) or the number or the kind of shares purchasable upon the
exercise of the Warrants, Warrant certificates theretofore or
thereafter issued may continue to express the same price and
number and kind of shares as are stated in the Warrant
certificates initially issuable pursuant to this Agreement.
SECTION 3. Transfer or Exchange of Warrants.
3.1. Transfer. The Warrants shall be transferrable
only in the books of the Company maintained at the office or
agency of the Warrant Agent in the City of New York upon delivery
thereof duly endorsed by the Holder or by his or her duly
authorized attorney or legal representative, or accompanied by
proper evidence of succession, assignment or authority to
transfer, which endorsement shall be guaranteed by an eligible
guarantor institution (a bank, stockbroker, savings and loan
association or credit union with membership in an approved
signature guarantee medallion program) pursuant to Rule 17Ad-15
of the Securities Exchange Act of 1934. In all cases of transfer
by an attorney, the original power of attorney, duly approved, or
an official copy thereof, duly certified, shall be deposited and
remain with the Warrant Agent. In case of transfer by executors,
administrators, guardians or other legal representatives, duly
authenticated evidence of their authority shall be produced, and
may be required to be deposited and remain with the Warrant Agent
in its discretion. Upon any registration of transfer, the
Warrant Agent shall countersign and deliver a new Warrant
certificate to the person entitled thereto.
3.2. Exchange of Warrant Certificates. Warrant
certificates may be exchanged for another certificate or
certificates entitling the Holder thereof to purchase a like
aggregate number of Warrant Shares as the certificate or
certificates surrendered then entitle such Holder to purchase.
Any Holder desiring to exchange a Warrant certificate shall make
such request in writing delivered to the Warrant Agent, and shall
surrender, properly endorsed in the manner described in
subsection 3.1 hereof, the Warrant certificate or certificates to
be so exchanged. Thereupon, the Warrant Agent shall countersign
and deliver to the person entitled thereto a new Warrant
certificate or certificates, as the case may be, as so requested.
SECTION 4. Mutilated or Missing Warrants.
In case any of the certificates evidencing the Warrants
shall be mutilated, lost, stolen or destroyed, the Company may,
in its discretion, issue and the Warrant Agent shall countersign
and deliver in exchange and substitution for and upon
cancellation of the mutilated Warrant certificate, or in lieu of
and substitution for the Warrant certificate lost, stolen or
destroyed, a new Warrant certificate of like tenor and
representing an equivalent right or interest, but only, in case
of any such loss, theft or destruction, upon receipt of evidence
reasonably satisfactory to the Company and the Warrant Agent
thereof and indemnity also satisfactory to them. An applicant
for such substitute Warrant certificate shall also comply with
such other reasonable regulations and pay such other reasonable
charges as the Company or the Warrant Agent may prescribe.
SECTION 5. Term of Warrants; Exercise of Warrants.
5.1 Term of Warrants. Subject to the terms of
this Agreement, each Holder shall have the right until 5:00 P.M.,
New York time, on July 31, 2001 (the "Expiration Date"), to
purchase from the Company the number of fully paid and
nonassessable Warrant Shares which the Holder may at the time be
entitled to purchase on exercise of such Warrants.
5.2 Exercise of Warrants. Warrant Shares may be
purchased upon surrender to the Company at the office or agency
of the Warrant Agent in the City of New York, of the certificate
or certificates evidencing the Warrants to be exercised, together
with the form of election to purchase on the reverse thereof duly
filled in and signed, which signature shall, if the Warrant
Shares are to be issued in the name of a person other than the
Holder of the Warrant, be guaranteed by an eligible guarantor
institution (a bank, stockbroker, savings and loan association or
credit union with membership in an approved signature guarantee
medallion program) pursuant to Rule 17Ad-15 of the Securities
Exchange Act of 1934, and upon payment to the Warrant Agent for
the account of the Company of the Exercise Price (as defined in
and determined in accordance with the provisions of Sections 9
and 10 hereof) for the number of Warrant Shares in respect of
which such Warrants are then being exercised. Payment of the
aggregate Exercise Price shall be made by certified or cashiers
check, or by any combination thereof.
Subject to Section 7 hereof, upon such surrender of
warrants and payment of the Exercise Price as aforesaid, the
Company shall issue and cause to be delivered, with all
reasonable dispatch, to or upon the written order of the Holder
and in such name or names as the Holder may designate, a
certificate or certificates for the number of full Warrant Shares
so purchased upon the exercise of such Warrants, together with a
check, as provided in Section 11 hereof, in respect of any
fractional Warrant Shares otherwise issuable upon such surrender.
Such certificate or certificates shall be deemed to have been
issued and any person so designated to be named therein shall be
deemed to have become a holder of record of such Warrant Shares
as of the date of the surrender of such Warrants and payment of
the Exercise Price, as aforesaid; provided, however, that if such
Warrants are surrendered, and the Exercise Price is paid, on a
Saturday, Sunday or other day on which banking institutions in
the City of New York are authorized or obligated by law or
executive order to close, the certificates for the Warrant Shares
in respect of which such Warrants are then exercised shall be
issuable as of the next succeeding Monday, Tuesday, Wednesday,
Thursday or Friday on which such banking institutions are not so
authorized or obligated to close (whether before or after the
Expiration Date) and which is a day on which the Common Stock
transfer books of the Company are open. The rights of purchase
represented by the Warrants shall be exercisable, at the election
of the Holders thereof, either in full or from time to time in
part and, in the event that a certificate evidencing Warrants is
exercised in respect of less than all of the Warrant Shares
specified therein at any time prior to the expiration of such
Warrants, a new certificate evidencing the remaining Warrant or
Warrants will be issued, and the Warrant Agent is hereby
irrevocably authorized to countersign and to deliver the required
new Warrant certificates pursuant to the provisions of this
subsection and of subsection 2.2 hereof and the Company, whenever
required by the Warrant Agent, will supply the Warrant Agent with
Warrant certificates duly executed on behalf of the Company for
such purpose.
SECTION 6. Disposition of Proceeds on Exercise of
Warrants.
The Warrant Agent shall account promptly to the Company
with respect to the Warrants exercised and concurrently pay to
the Company all moneys received by the Warrant Agent for the
purchase of the Warrant Shares through the exercise of such
Warrants.
SECTION 7. Payment of Taxes.
The Company will pay all documentary stamp taxes, if
any, attributable to the issuance of any Warrant certificates or
certificates for Warrant Shares issuable upon the exercise of
Warrants; provided, however, that the Company shall not be
required to pay, and the Holder shall pay, any tax or taxes that
may be payable in respect of any transfer involved in the issue
or delivery of any Warrant certificates or certificates for
Warrant Shares in a name other than that of the registered Holder
of the Warrants that were surrendered and the Company shall not
be required to issue or deliver such Warrant certificates or
certificates for Warrant Shares unless or until the persons
requesting the issuance thereof shall have paid to the Company
the amount of such tax or shall have established to the
satisfaction of the Company that such tax has been paid.
SECTION 8. Reservation of Warrant Shares; Purchase
and Cancellation of Warrants.
8.1. Reservation of Warrant Shares. There have
been reserved, and the Company shall at all times keep reserved
out of its authorized Common Stock, a number of shares of Common
Stock sufficient to provide for the exercise of the right of
purchase represented by the outstanding Warrants. The Company
covenants that all Warrant Shares will, upon issuance, be duly
authorized, validly issued, fully paid and nonassessable. The
Transfer Agent for the Common Stock and every subsequent transfer
agent for any shares of the Company's capital stock issuable upon
the exercise of any of the rights of purchase aforesaid will be
irrevocably authorized and directed at all times to reserve such
number of authorized shares as shall be requisite for such
purpose. The Company will keep a copy of this Agreement on file
with the Transfer Agent for the Common Stock and with every
subsequent transfer agent for any shares of the Company's capital
stock issuable upon the exercise of the rights of purchase
represented by the Warrants. The Warrant Agent is hereby
irrevocably authorized to requisition from time to time from such
Transfer Agent stock certificates required to honor outstanding
Warrants upon exercise thereof in accordance with the terms of
this Agreement. The Company will supply such Transfer Agent with
duly executed stock certificates for such purpose and will
provide or otherwise make available any cash which may be payable
as provided in Section 11 hereof. Promptly after the Expiration
Date, the Warrant Agent shall certify to the Company the
aggregate number of Warrants then outstanding and not exercised
prior to the Expiration Date and thereafter no shares shall be
subject to reservation in respect of such Warrants.
8.2. Governmental Approvals and Listings. The
Company will as promptly as practicable take all action which may
be necessary to obtain and keep effective (a) any and all
permits, consents and approvals of governmental agencies and
authorities, and will make any and all filings under federal and
state securities laws, necessary in connection with the issuance,
distribution and transfer of Warrant certificates, the exercise
of the Warrants, and the issuance, sale, transfer and delivery of
Warrant Shares and (b) the listing of the Warrant Shares on each
securities exchange on which the Common Stock may be listed.
8.3. Purchase of Warrants by the Company. The
Company shall have the right, except as limited by law, other
agreement or herein, to purchase or otherwise acquire Warrants at
such times, in such manner and for such consideration as it may
deem appropriate.
8.4. Cancellation of Warrants. In the event the
Company shall purchase or otherwise acquire Warrants, the related
Warrant certificates shall thereupon be delivered to the Warrant
Agent and be cancelled by it and retired. The Warrant Agent
shall cancel any Warrant certificate surrendered for exchange,
substitution, transfer or exercise in whole or in part. Warrant
certificates cancelled by the Warrant Agent pursuant to any
provision of this Agreement shall be delivered to the Company or,
upon the request of the Warrant Agent and with the consent of the
Company, destroyed by the Warrant Agent. The Warrant Agent shall
furnish to the Company written confirmation of the destruction of
the Warrant certificates so cancelled.
SECTION 9. Exercise Price.
The price per share at which Warrant Shares shall be
purchasable upon exercise of each Warrant (the "Exercise Price")
shall be an amount equal to the lesser of (i) 200% of the average
of the daily Trading Price (as defined in Section 10.1(d)) per
share for the Trading Days (as defined in Section 10.1(d)) during
the Pricing Period (rounded down to the nearest cent), and (ii)
$26.67. "Pricing Period" is defined as the period commencing on
November 29, 1996 and ending at the close of business on December
27, 1996. The Exercise Price is subject to adjustment pursuant
to Section 10 hereof, provided, however, that if the Exercise
Price in effect on the date of exercise of a Warrant is less than
the par value of a Warrant Share, the price per share at which
Warrant Shares may be purchased upon the exercise of such Warrant
on such date shall be the par value of a Warrant Share.
SECTION 10. Adjustment of Exercise Price and Number
of Warrant Shares.
10.1. Adjustments. From and after the date of this
Agreement and regardless of whether any Warrants have been
issued, the number and kind of securities purchasable upon the
exercise of each Warrant and the Exercise Price shall be subject
to adjustment as follows:
(a) Stock Dividends, Splits, etc. In case the Company
shall at any time after the date of this Agreement (w) pay a
dividend or make a distribution on its Common Stock which is
paid or made (A) in Common Stock or other shares of the
Company's capital stock or (B) in rights to purchase Common
Stock or other securities of the Company if such rights are
not initially separable from the Common Stock at the time of
issuance, (x) subdivide its outstanding Common Stock into a
greater number of shares of Common Stock, (y) combine its
outstanding shares into a smaller number of shares of Common
Stock or (z) issue by reclassification of its Common Stock
other securities of the Company, then, in any such event the
number of Warrant Shares purchasable upon exercise of each
Warrant immediately prior thereto shall be adjusted so that
the Holder of each Warrant shall be entitled to receive upon
exercise of such Warrant the kind and number of shares of
the Company and rights to purchase Common Stock or other
securities of the Company (or, in the event of the
redemption of any such rights, any cash paid in respect of
such redemption) that he or she would have owned or have
been entitled to receive after the happening of any of the
events described above had such Warrant been exercised
immediately prior to the happening of such event or any
record date with respect thereto. An adjustment made
pursuant to this paragraph (a) shall become effective
immediately after the opening of business on the next
business day following the record date in the case of
dividends or other distributions and shall become effective
immediately after the opening of business on the next
business day following the effective date in the case of a
subdivision or combination.
(b) Distribution of Rights or Warrants. In case the
Company shall at any time after the date of this Agreement
issue rights or warrants to the holders of Common Stock as
such entitling them (for a period expiring within 60 days
after the record date for the determination of shareholders
entitled to receive the same) to subscribe for or purchase
Common Stock at a price per share less than the current
market price per share (as defined in paragraph (d) below)
on such record date, then, in each such case the number of
Warrant Shares thereafter purchasable upon the exercise of
each Warrant shall be determined by multiplying the number
of Warrant Shares theretofore purchasable upon exercise of
each Warrant by a fraction, of which the numerator shall be
the number of shares of Common Stock outstanding on the date
of issuance of such rights or warrants, plus the number of
additional shares of Common Stock offered for subscription
or purchase, and of which the denominator shall be the
number of shares of Common Stock outstanding on the date of
issuance of such rights or warrants plus the number of
shares of Common Stock that the aggregate offering price of
the total number of shares of Common Stock so offered would
purchase at such current market price. For the purposes of
this paragraph (b), the issuance of rights or warrants to
subscribe for or purchase securities convertible into Common
Stock shall be deemed to be the issuance of rights or
warrants to purchase the Common Stock into which such
securities are convertible at an aggregate offering price
equal to the aggregate offering price of such securities
plus the minimum aggregate amount (if any) payable upon
conversion of such securities into Common Stock. Any
adjustment pursuant to this paragraph (b) shall be made
whenever any such rights or warrants are issued, but shall
also become effective retroactively with respect to Warrants
exercised between the record date for the determination of
shareholders entitled to receive such rights or warrants and
the date such rights or warrants are issued. For purposes of
this paragraph (b) and paragraph (c) below, the granting of
the right to purchase shares of Common Stock (whether from
treasury shares or otherwise) pursuant to any dividend or
interest reinvestment plan and/or Common Stock purchase plan
providing for the reinvestment of dividends or interest
payable on securities of the Company and/or the investment
of periodic optional payments, in any such case at a price
per share of not less than 95% of the current market price
per share (determined as provided in such plans) of the
Common Stock, shall not be deemed to constitute an issue of
rights or warrants by the Company within the meaning of this
paragraph (b) or paragraph (c) below. The provisions of
this paragraph (b) and paragraph (c) below shall not apply
to the issuance by the Company of Series A Warrants issued
pursuant to that certain Series A Warrant Agreement, dated
as of July 31, 1996, between the Company and American Stock
Transfer & Trust Company, as warrant agent (the "Series A
Warrants") or Series B Warrants issued pursuant to that
certain Series B Warrant Agreement, dated as of July 31,
1996, between the Company and American Stock Transfer &
Trust Company, as warrant agent (the "Series B Warrants").
(c) Distributions of Assets. In case the Company
shall at any time after the date of this Agreement
distribute to all holders of its Common Stock evidences of
indebtedness of the Company (or any other entity) or assets
of the Company (or any other entity) (excluding cash
dividends or distributions out of retained earnings) or
rights or warrants to subscribe for securities of the
Company (excluding those referred to in paragraph (a) and
paragraph (b) above), then in each case the Exercise Price
shall be adjusted to a price determined by multiplying the
Exercise Price in effect immediately prior to such
distribution by a fraction, of which the numerator shall be
the then current market price per share of Common Stock (as
defined in paragraph (d) below) on the record date for
determination of shareholders entitled to receive such
distribution, less the then fair value (as determined by the
Board of Directors of the Company, whose determination shall
be conclusive) of the portion of the assets or evidences of
indebtedness so distributed or of such subscription rights
or warrants which are applicable to one share of Common
Stock, and of which the denominator shall be such market
price per share of Common Stock; provided, however, that if
the then current market price per share of Common Stock on
the record date for determination of shareholders entitled
to receive such distribution is less than the then fair
value of the portion of the assets or evidences of
indebtedness so distributed or of such subscription rights
or warrants which are applicable to one share of Common
Stock, the foregoing adjustment of the Exercise Price shall
not be made and in lieu thereof the number of Warrant Shares
purchasable upon exercise of each Warrant immediately prior
to such distribution shall be adjusted so that the Holder of
each Warrant shall be entitled to receive upon exercise of
such Warrant the kind and number of assets, evidences of
indebtedness, subscription rights and warrants (or, in the
event of the redemption of any such evidences of
indebtedness, subscription rights and warrants, any cash
paid in respect of such redemption) that he or she would
have owned or have been entitled to receive after the
happening of such distribution had such Warrant been
exercised immediately prior to the record date for such
distribution. Such adjustment shall be made whenever any
such distribution is made, and shall become effective on the
date of distribution retroactive to the record date for the
determination of shareholders entitled to receive such
distribution. Upon each adjustment of the Exercise Price
pursuant to this paragraph (c), each Warrant outstanding
immediately prior to the making of such adjustment shall
thereafter evidence the right to purchase, at the adjusted
Exercise Price, that number of Warrant Shares (calculated to
the nearest hundredth) obtained by (A) multiplying the
number of Warrant Shares purchasable upon exercise of a
Warrant immediately prior to such adjustment of the number
of Warrant Shares by the Exercise Price in effect
immediately prior to such adjustment of the Exercise Price
and (B) dividing the product so obtained by the Exercise
Price in effect immediately after such adjustment to the
Exercise Price.
(d) Computation of Market Price. For the purpose of
any computation under paragraphs (b) and (c) of this
Section, the current market price per share of Common Stock
at any date shall be deemed to be the average of the daily
Trading Price per share for the 30 consecutive Trading Days
commencing 45 Trading Days before the date in question.
"Trading Price" on any specified date shall mean
(i) if the Common Stock is listed or admitted to trade on a
securities exchange, the closing price of the Common Stock,
regular way, on such day, on the principal securities
exchange on which the stock is so listed or admitted to
trade, or, if there is no such reported sale on such date,
the average closing bid and asked prices on such day, or (if
none) then the closing price of the stock or (if none) such
average, as reported on the next preceding date on which
there was such reported activity in such shares (such
determination or earlier date being hereinafter referred to
as the "applicable trading date"); (ii) if the Common Stock
is not listed or admitted to trade on a securities exchange,
the last reported sales price for the Common Stock or (if
none) the average of the last reported bid and asked prices
on the applicable trading date, as reported by the principal
reputable quotation system available to the Board of
Directors; (iii) if the Common Stock is not listed or
admitted to trade on a securities exchange and no such
reported closing sale price or closing bid and asked prices
are available, the average of the reported high bid and low
asked price for the stock on the applicable trading date, as
reported by a reputable quotation source designated by the
Board of Directors; or (iv) if the Common Stock is not
listed or admitted to trade on a securities exchange,
trading is not so reported, and bid and asked prices are not
available on a reasonably current basis, the value as
established by the Board of Directors in good faith at such
time.
The term "Trading Day" shall mean a Monday,
Tuesday, Wednesday, Thursday or Friday on which banking
institutions in the City of New York are not authorized or
obligated by law or executive order to close or, if the
Common Stock is listed or admitted to trading on a national
securities exchange, a day on which the principal national
securities exchange on which the Common Stock is listed or
admitted to trading is open for the transaction of business.
(e) Minimum Adjustment. No adjustment in the number
of Warrant Shares purchasable hereunder shall be required
unless such adjustment would require an increase or decrease
of at least one per cent (1%) in the number of Warrant
Shares purchasable upon the exercise of each Warrant;
provided, however, that any adjustments which by reason of
this paragraph (e) are not required to be made shall be
carried forward and taken into account in any subsequent
adjustment.
(f) Exercise Price Adjustment. Whenever the number of
Warrant Shares purchasable upon the exercise of each Warrant
is adjusted, as herein provided, the Exercise Price per
Warrant Share payable upon exercise of each Warrant shall,
subject to the proviso to Section 9, be adjusted (to the
nearest cent) by multiplying such Exercise Price immediately
prior to such adjustment by a fraction, of which the
numerator shall be the number of Warrant Shares purchasable
upon the exercise of each Warrant immediately prior to such
adjustment, and of which the denominator shall be the number
of Warrant Shares so purchasable immediately thereafter;
provided, however, that if, as a result of an adjustment of
the Warrant Shares purchasable upon the exercise of a
Warrant, the Holder of a Warrant shall be entitled upon
exercise to receive shares of two or more classes of capital
stock or Common Shares and other capital stock of the
Company, the Board of Directors shall determine in good
faith the allocation of the Exercise Price between or among
shares of such classes of capital stock or Common Stock and
other capital stock.
(g) Notice of Adjustment. Whenever the number of
Warrant Shares purchasable upon the exercise of Warrants or
the Exercise Price of such Warrant Shares is adjusted, as
herein provided, the Company shall cause the Warrant Agent
promptly to mail by first class mail, postage prepaid, to
each Holder of a Warrant or Warrants notice of such
adjustment or adjustments and shall deliver to the Warrant
Agent a certificate of a firm of independent public
accountants selected by the Board of Directors of the
Company (who may be the regular accountants employed by the
Company) setting forth (A) the number of Warrant Shares
purchasable upon the exercise of each Warrant and the
Exercise Price of such Warrant Shares after such adjustment,
(B) a brief statement of the facts requiring such adjustment
and (C) the computation by which such adjustment was made.
Such certificate shall be conclusive evidence of the
correctness of such adjustment. The Warrant Agent shall be
entitled to rely on such certificate and shall be under no
duty or responsibility with respect to any such certificate,
except to exhibit the same, from time to time, to any Holder
desiring an inspection thereof during reasonable business
hours. The Warrant Agent shall not at any time be under any
duty or responsibility to any Holder to determine whether
any facts exist that may require any adjustment of the
Exercise Price or the number of Warrant Shares or other
stock or property purchasable upon exercise thereof or with
respect to the nature or extent of any such adjustment when
made, or with respect to the method employed in making such
adjustment.
(h) Definition of Common Shares. For the purpose of
this subsection 10.1, the term "Common Stock" shall mean (i)
the class of stock designated as the Common Stock of the
Company at the date of this Agreement or (ii) any other
class of stock resulting from successive changes or
reclassifications of such shares consisting solely of
changes in par value, or from par value to no par value or
from no par value to par value. In the event that at any
time, as a result of an adjustment made pursuant to
paragraph (a) above, the Holders of a Warrant or Warrants
shall become entitled to purchase any securities of the
Company other than Common Stock, thereafter the number of
such other securities so purchasable upon exercise of each
Warrant and the Exercise Price of such securities shall be
subject to adjustment from time to time in a manner and on
terms as nearly equivalent as practicable to the provisions
with respect to the Warrant Shares contained in this
subsection 10.1 and the provisions of Section 5 and
subsections 10.2 and 10.3, inclusive, with respect to the
Warrant Shares, shall apply on like terms to any such other
securities.
(i) Readjustment of Exercise Price and Number of
Warrant Shares. If, upon the expiration of any rights or
warrants with respect to which there shall have been an
adjustment of the number of Warrant Shares purchasable upon
the exercise of each Warrant or of the Exercise Price, any
of such rights or warrants shall not have been exercised,
the Exercise Price and the number of Common Stock
purchasable upon the exercise of a Warrant shall, upon such
expiration, be readjusted and shall thereafter be such as it
would have been had it been originally adjusted (or had the
original adjustment not been required, as the case may be)
on the basis of (A) the only Common Stock so issued were the
Common Stock, if any actually issued or sold upon the
exercise of such rights or warrants and (B) such Common
Stock, if any, were issued or sold for the consideration
actually received by the Company upon such exercise plus the
consideration, if any, actually received by the Company for
the issuance, sale or grant of all such rights or warrants
whether or not exercised; provided, that no such
readjustment shall have the effect of increasing the
Exercise Price or reducing the number of shares of Common
Stock purchasable upon exercise of a Warrant by an amount in
excess of the amount of the adjustment initially made in
respect of the issuance, sale or grant of such rights or
warrants.
10.2. No Adjustment for Dividends. Except as
provided in subsection 10.1, no adjustment in respect of any
dividends shall be made during the term of a Warrant or upon the
exercise of a Warrant.
10.3. Adjustment of Exercise Price upon Merger,
Consolidation, etc. In case the Company shall consolidate or
merge with or into any other corporation (other than a
consolidation or merger in which the Company is the surviving
corporation and each share of Common Stock outstanding
immediately prior to such consolidation or merger is to remain
outstanding immediately after such consolidation or merger) or
shall sell or transfer all or substantially all of its assets to
any corporation, the Company or such successor or purchasing
corporation, as the case may be (collectively, the "acquiring
corporation"), shall execute with the Warrant Agent an agreement
that each Holder of a Warrant shall have the right thereafter
upon payment of the Exercise Price in effect immediately prior to
such action to purchase upon exercise of each Warrant the kind
and amount of shares and other securities, cash and other
property that he or she would have owned or have been entitled to
receive after the happening of such consolidation, merger or sale
had such Warrant been exercised immediately prior to such action,
including, without limitation, any and all distributions in
respect thereof from the date of such action to the date of such
exercise (assuming that such Holder, as a holder of Common Stock
prior to such action, would not have exercised any rights of
election as a holder of Common Stock as to the kind or amount of
securities, cash or other property receivable upon such
consolidation, merger or sale; provided, that if the kind or
amount of securities, cash or other property receivable upon such
consolidation, merger or sale is not the same for each
non-electing share of Common Stock, then the kind and amount of
securities, cash or other property receivable shall be deemed to
be the kind and amount so receivable by a plurality of the non-
electing shares). The Company shall mail by first-class mail,
postage prepaid, to each Holder, notice of the execution of any
agreement with an acquiring corporation as provided in the first
sentence of this subsection 10.3. In addition to any adjustments
required by this subsection 10.3, such agreement shall provide
for adjustments which shall be as nearly equivalent as may be
practicable to the adjustments provided for in this Section 10.
The Company shall not effect any such consolidation, merger or
sale unless prior to or simultaneously with the consummation
thereof the acquiring corporation (if other than the Company)
resulting from such consolidation or merger or the acquiring
corporation purchasing such assets or other appropriate
corporation or entity shall assume, by written instrument
executed and delivered to the Warrant Agent, the obligation to
deliver to each Holder such shares of stock, securities or assets
as, in accordance with the foregoing provisions, such Holder may
be entitled to receive and the other obligations of the Company
under this Agreement. The provisions of this subsection 10.3
shall similarly apply to successive consolidations, mergers,
sales or conveyances. The Warrant Agent shall be under no duty
or responsibility to determine the correctness of any provisions
contained in any such agreement relating either to the kind or
amount of shares of stock or other securities, cash or property
receivable upon exercise of Warrants or with respect to the
method employed and provided therein for any adjustments.
SECTION 11. Fractional Warrant Shares.
The Company shall not be required to issue fractional
Warrant Shares on the exercise of Warrants. If more than one
Warrant shall be presented for exercise in full at the same time
by the same Holder, the number of full Warrant Shares that shall
be issuable upon the exercise thereof shall be computed on the
basis of the aggregate number of Warrant Shares represented by
the Warrants so presented. If any fraction of a Warrant Share
would, except for the provisions of this Section 11, be issuable
on the exercise of any Warrant (or specified portion thereof),
the Company shall pay an amount by check equal to the current
market price per share of common stock (as defined in subsection
10.1(d) above) multiplied by such fraction.
SECTION 12. No Rights as Shareholders; Notices to
Warrant Holders.
Nothing contained in this Agreement or in any of the
Warrants shall be construed as conferring upon the Holders or
their transferees the right to vote or to receive dividends or to
consent or to receive notice as shareholders in respect of any
meeting of shareholders for the election of directors of the
Company or any other matter, or any rights whatsoever as
shareholders of the Company. If prior to the expiration of the
Warrants:
(a) the Company shall declare a dividend or other
distribution on its Common Shares, other than (i) in cash
out of retained earnings, (ii) in other shares of Common
Stock, or (iii) in rights to purchase shares of Common Stock
or other securities of the Company of the character
described in paragraph (a) of subsection 10.1; or
(b) the Company shall authorize the issuance to all
holders of its Common Stock of rights or warrants entitling
them to subscribe for or purchase any Common Stock or any
other subscription rights or warrants (other than rights of
the character described in paragraph (a) of subsection 10.1
and other than the Series A Warrants and Series B
Warrants); or
(c) there shall occur a reclassification of the
capital stock of the Company (other than a subdivision or
combination of its outstanding Common Stock), or a
consolidation or merger to which the Company is a party and
for which approval of any shareholders of the Company is
required, or a sale or transfer of all or substantially all
the assets of the Company; or
(d) the Company shall take an action ("Adjustment
Action") which would cause an adjustment pursuant to Section
10 hereof of the number or kind of Common Shares (or other
securities) purchasable upon the exercise of each Warrant or
of the Exercise Price that would have the effect of reducing
the price payable for a share of the Company's capital stock
by a Holder upon exercise of a Warrant to an amount which is
less than the current par value of such share; or
(e) a voluntary or involuntary dissolution,
liquidation or winding up of the Company shall be proposed;
then, in any such event, the Company shall cause to be mailed to
the Warrant Agent and the Holders in the manner provided in
Section 18 hereof, at least 20 days prior to the applicable
record or effective date hereinafter specified, a notice stating
(i) the date as of which the holders of record of Common Stock to
be entitled to such dividend, distribution, rights or warrants
are to be determined, or (ii) the date on which such
reclassification, Adjustment Action, consolidation, merger, sale,
transfer, dissolution, liquidation or winding up is expected to
become effective, and the date as of which it is expected that
holders of record of Common Stock shall be entitled to exchange
their shares for securities or other property, if any,
deliverable upon such reclassification, Adjustment Action,
consolidation, merger, sale, transfer, dissolution, liquidation
or winding up. Such notice shall also state whether such
transaction will result in any adjustment of the number or kind
of Common Stock (or other securities) purchasable upon the
exercise of a Warrant or of the Exercise Price and, if so, shall
set forth the nature thereof and the date upon which it will
become effective. In the event the Company gives notice to the
holders of its Common Stock of the declaration or distribution of
rights to purchase Common Stock or other securities of the
Company of the character described in paragraph (a) of subsection
10.1, the Company will give concurrently a similar notice to the
Holders in the manner provided in Section 18 hereof. The failure
to give the notices required by this Section 12, or any defect
therein, shall not affect the legality or validity of any such
dividend, distribution, right, warrant, reclassification,
Adjustment Action, consolidation, merger, sale, transfer,
dissolution, liquidation or winding up, or the vote on any action
authorizing the same.
SECTION 13. Inspection of Warrant Agreement.
The Warrant Agent shall keep copies of this
Agreement and any notices given or received hereunder available
for inspection by the Holders during normal business hours at its
office in the City of New York for that purpose. The Company
shall supply the Warrant Agent from time to time with such
numbers of copies of this Agreement as the Warrant Agent may
request.
SECTION 14. Merger or Consolidation or Change of
Name of Warrant Agent.
Any corporation into which the Warrant Agent may be
merged or with which it may be consolidated, or any corporation
resulting from any merger or consolidation to which the Warrant
Agent shall be a party, or any corporation succeeding to the
stock transfer or corporate trust business of the Warrant Agent,
shall be the successor to the Warrant Agent hereunder without the
execution of filing of any paper or any further act on the part
of any of the parties hereto, provided that such corporation
would be eligible for appointment as successor Warrant Agent
under the provisions of Section 16 hereof. In case at the time
such successor to the Warrant Agent shall succeed to the agency
created by this Agreement any of the Warrants shall have been
countersigned but not delivered, any such successor to the
Warrant Agent may adopt the countersignature of the original
Warrant Agent and deliver such Warrants so countersigned; and in
case at that time any of the Warrants shall not have been
countersigned, any successor to the Warrant Agent may countersign
such Warrants either in the name of the predecessor Warrant Agent
or in the name of the successor Warrant Agent, and in all such
cases such Warrants shall have the full force provided in the
Warrants and in this Agreement.
In case at any time the name of the Warrant Agent shall
be changed and at such time any of the Warrants shall have been
countersigned but not delivered, the Warrant Agent may adopt the
countersignatures under its prior name and deliver Warrants so
countersigned; and in case at that time any of the Warrants shall
not have been countersigned, the Warrant Agent may countersign
such Warrants either in its prior name or in its changed name;
and in all such cases such Warrants shall have the full force
provided in the Warrants and in this Agreement.
SECTION 15. Concerning the Warrant Agent.
The Warrant Agent undertakes the duties and obligations
imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the Holders of
Warrants, by their acceptance thereof, shall be bound:
15.1. Disclaimer of Representations. The
statements contained herein and in the Warrants shall be taken as
statements of the Company, and the Warrant Agent assumes no
responsibility for the correctness of any of the same except such
as describe the Warrant Agent or action taken by it. The Warrant
Agent assumes no responsibility with respect to the distribution
of the Warrants except as herein otherwise provided.
15.2. No Responsibility for Failure of Company's
Covenants. The Warrant Agent shall not be responsible for any
failure of the Company to comply with any of the covenants
contained in this Agreement or in the Warrants.
15.3. Delegation. The Warrant Agent may execute
and exercise any of the rights or powers hereby vested in it or
perform any duty hereunder either itself or by or through its
attorneys or agents (which shall not include its employees), and
the Warrant Agent shall not be answerable or accountable for any
act, neglect or misconduct of any such attorneys or agents or for
any loss to the Company resulting from such neglect or misconduct
provided reasonable care shall have been exercised in the
selection and continued employment thereof.
15.4. Opinion of Counsel. The Warrant Agent may
consult at any time with legal counsel satisfactory to it, who
may be internal or outside counsel to the Company, and the
Warrant Agent shall incur no liability or responsibility to the
Company or to any Holder in respect of any action taken, suffered
or omitted by it hereunder in good faith and in accordance with
the opinion or the advice of such counsel.
15.5. Officer's Certificate. Whenever in the
performance of its duties under this Agreement the Warrant Agent
shall deem it necessary or desirable that any fact or matter be
proved or established by the Company prior to taking or suffering
any action hereunder, such fact or matter (unless other evidence
in respect thereof be herein specifically prescribed) may be
deemed to be conclusively proved and established by a certificate
signed by the Chairman of the Board, the President, any Vice
President, the Treasurer or the Secretary of the Company and
delivered to the Warrant Agent; and such certificate shall be
full authorization to the Warrant Agent for any action taken or
suffered in good faith by it under the provisions of this
Agreement in reliance upon such certificate.
15.6. Compensation and Reimbursement. The Company
agrees to pay the Warrant Agent reasonable compensation for all
services rendered by the Warrant Agent in the performance of its
duties under this Agreement, to reimburse the Warrant Agent for
all expenses, taxes and governmental charges and other charges of
any kind and nature reasonably incurred by the Warrant Agent in
the performance of its duties under this Agreement, and agrees to
indemnify the Warrant Agent and save it harmless against any and
all liabilities, including judgments, costs and reasonable
counsel fees, for anything done or omitted by the Warrant Agent
in the performance of its duties under this Agreement except as a
result of the Warrant Agent's gross negligence or bad faith.
15.7. No Action Without Assurance of Reimbursement.
The Warrant Agent shall be under no obligation to institute any
action, suit or legal proceeding or to take any other action
likely to involve expense unless the Company or one or more
Holders shall furnish the Warrant Agent with reasonable security
and indemnity for any costs and expenses which may be incurred;
but this provision shall not affect the power of the Warrant
Agent to take such action as the Warrant Agent may consider
proper, whether with or without any such security or indemnity.
All rights of action under this Agreement or under any of the
Warrants may be enforced by the Warrant Agent without the
possession of any of the Warrants or the production thereof at
any trial or other proceeding relative thereto, and any such
action, suit or proceeding instituted by the Warrant Agent shall
be brought in its name as Warrant Agent, and any recovery of
judgment shall be for the ratable benefit of the Holders, as
their respective rights or interests may appear.
15.8. Conflicts of Interest. The Warrant Agent and
any stockholder, director, officer or employee of the Warrant
Agent may buy, sell or deal in any of the Warrants or other
securities of the Company or become pecuniarily interested in any
transaction in which the company may be interested, or contract
with or lend money to the Company or otherwise act as fully and
freely as though it were not Warrant Agent under this Agreement.
Nothing herein shall preclude the Warrant Agent from acting in
any other capacity for the Company or for any other legal entity.
15.9. Solely as Agent. The Warrant Agent shall act
hereunder solely as agent, and its duties shall be determined
solely by the provisions hereof. The Warrant Agent shall not be
liable for anything that it may do or refrain from doing in
connection with this Agreement except for its own gross
negligence or bad faith.
15.10. Reliance on Documents. The Warrant Agent
will not incur any liability or responsibility to the Company or
to any Holder of any Warrant for any action taken in reliance on
any notice, resolution, waiver, consent, order, certificate, or
other paper, document or instrument reasonably believed by it to
be genuine and to have been signed, sent or presented by the
proper party or parties.
15.11. No Representation Regarding Validity, Etc.
The Warrant Agent shall not be under any responsibility in
respect of the validity of this Agreement or the execution and
delivery hereof (except the due execution and delivery hereof by
the Warrant Agent) or in respect of the validity or execution of
any Warrant (except its countersignature thereof); nor shall the
Warrant Agent by any act hereunder be deemed to make any
representation or warranty as to the authorization or reservation
of any Warrant Shares (or other stock) to be issued pursuant to
this Agreement or any Warrant.
15.12. Instructions from Company. The Warrant Agent
is hereby authorized and directed to accept instructions with
respect to the performance of its duties hereunder from the
Chairman of the Board, the President, any Vice President, the
Treasurer or the Secretary of the Company, and to apply to such
officers for advice or instructions in connection with its
duties, and shall not be liable for any action taken or suffered
to be taken by it in good faith in accordance with instructions
of any such Officers.
SECTION 16. Change of Warrant Agent.
The Warrant Agent may resign and be discharged from its
duties under this Agreement by giving to the Company 60 days'
notice in writing. The Warrant Agent may be removed by like
notice to the Warrant Agent from the Company. If the Warrant
Agent shall resign or be removed or shall otherwise become
incapable of acting, the Company shall appoint a successor to the
Warrant Agent. If the Company shall fail to make such
appointment within a period of 50 days after such notice of
removal or after it has been notified in writing of such
resignation or incapacity by the resigning or incapacitated
Warrant Agent or by any Holder (who shall with such notice submit
his Warrant for inspection by the Company), then the resigning,
discharged or removed Warrant Agent or any Holder may apply to
any court of competent jurisdiction for the appointment of a
successor to the Warrant Agent. Any successor warrant agent,
whether appointed by the Company or such court, shall be (a) a
bank or trust company, in good standing, incorporated under the
laws of the United States of America or any state thereof and
having at the time of its appointment as warrant agent a combined
capital and surplus of at least $100,000,000, as set forth in its
most recent published annual report of condition or (b) an
affiliate of a corporation described in clause (a) above. After
appointment, the successor warrant agent shall be vested with the
same powers, rights, duties and responsibilities as if it had
been originally named as Warrant Agent hereunder without further
act or deed; but the former Warrant Agent shall deliver and
transfer to the successor warrant agent any property at the time
held by it hereunder, and shall execute and deliver any further
assurance, conveyance, act or deed necessary for the purpose.
Failure to file any notice provided for in this Section 16,
however, or any defect therein, shall not affect the legality or
validity of the resignation or removal of the Warrant Agent or
the appointment of the successor warrant agent, as the case may
be. In the event of such resignation or removal, the successor
warrant agent (or in the absence of any immediate successor
warrant agent, the Company) shall promptly mail, by first-class
mail, postage prepaid, to each Holder, written notice of such
removal or resignation and the name and address of such successor
warrant agent.
SECTION 17. Identity of Transfer Agent.
Forthwith upon the appointment of any subsequent
Transfer Agent for the Company's shares of Common Stock, or any
other shares of the Company's capital stock issuable upon the
exercise of the rights of purchase represented by the Warrants,
the Company will file with the Warrant Agent a statement setting
forth the name and address of such Transfer Agent.
SECTION 18. Notices.
Any notice pursuant to this Agreement by the Company or
by the Holder of any warrant to the Warrant Agent, or by the
Warrant Agent or by the Holder of any Warrant to the Company,
shall be in writing and shall be deemed to have been duly given
if delivered or mailed by certified mail, return receipt
requested, (a) if to the Company, House of Fabrics, Inc., 13400
Riverside Drive, Sherman Oaks, California 91423-2598, Attention:
Secretary; and, if to the Warrant Agent, to American Stock
Transfer & Trust Company, 40 Wall Street, New York, New York
10005, Attention: Executive Vice President. Each party hereto
may from time to time change the address to which notices to it
are to be delivered or mailed hereunder by notice in writing to
the other party.
Any notice mailed pursuant to this Agreement by the
Company or the Warrant Agent to the Holders of Warrants shall be
in writing and shall be deemed to have been duly given if mailed
by first-class mail, postage prepaid, to such Holders at their
respective addresses on the Warrant Register of the Warrant
Agent.
SECTION 19. Supplements and Amendments.
The Company and the Warrant Agent may from time to time
supplement or amend this Agreement, without the approval of any
Holder in order to cure any ambiguity or to correct or supplement
any provision contained herein that may be defective or
inconsistent with any other provisions herein, or to make any
other provisions with regard to matters or questions arising
hereunder that the Company and the Warrant Agent may deem
necessary or desirable and that shall not adversely affect the
interests of the Holders of Warrants. The Warrant Agent shall
promptly notify the Holders of any such supplement or amendment.
SECTION 20. Successors.
All the covenants and provisions of this Agreement by
or for the benefit of the Company or the Warrant Agent shall bind
and inure to the benefit of their respective successors and
assigns hereunder.
SECTION 21. Merger or Consolidation of the Company.
The Company will not merge or consolidate with or into
any other corporation unless the corporation resulting from such
merger or consolidation (if not the Company) shall expressly
assume, by supplemental agreement satisfactory in form to the
Warrant Agent in the exercise of its reasonable judgment and
executed and delivered to the Warrant Agent, the due and punctual
performance and observance of each and every covenant and
condition of this Agreement to be performed and observed by the
Company.
SECTION 22. Applicable Law.
This Agreement and each Warrant issued hereunder shall
be deemed to be a contract made under the laws of the State of
California and for all purposes shall be construed in accordance
with the laws of said State.
SECTION 23. Benefits of this Agreement.
Nothing in this Agreement shall be construed to give to
any person or corporation other than the Company, the Warrant
Agent and the Holders of the Warrants any legal or equitable
right, remedy or claim under this Agreement; and this Agreement
shall be for the sole and exclusive benefit of the Company, the
Warrant Agent, and their respective successors and assigns
hereunder, and the Holders from time to time of the Warrants.
SECTION 24. Counterparts.
This Agreement may be executed in any number of
counterparts and each of such counterparts shall for all purposes
be deemed to be an original, and all such counterparts shall
together constitute but one and the same instrument.
SECTION 25. Captions.
The captions of the Sections and subsections of this
Agreement have been inserted for convenience only and shall have
no substantive effect.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the day and year first above
written.
HOUSE OF FABRICS, INC.
By: /s/ GARY L. LARKINS
-------------------------------
Gary L. Larkins
Title: President
Attest:
/s/ MARVIN S. MALTZMAN
- ------------------------------
Marvin S. Maltzman
Title: Secretary
AMERICAN STOCK TRANSFER & TRUST COMPANY
as Warrant Agent
By: /s/ JOE WOLF
---------------------------
Joe Wolf
Title: Vice President
Attest:
/s/ JOE ALICIA
- --------------------------
Joe Alicia
Title:
<PAGE>
Exhibit A
SERIES C WARRANT TO PURCHASE COMMON STOCK VOID AFTER
5:00 P.M., NEW YORK TIME, ON JULY 31, 2001
HOUSE OF FABRICS, INC.
No._______ ________ Warrants
This certifies that, for value received, ________
_______________ or registered assigns (the "Holder"), is entitled
to purchase from House of Fabrics, Inc., a Delaware corporation
(the "Company"), until 5:00 P.M., New York time, on July 31, 2001
(the "Expiration Date"), at the purchase price of $[ ] [THE
LESSER OF 200% OF THE AVERAGE DAILY TRADING PRICE PER SHARE OF
COMMON STOCK FOR THE TRADING DAYS DURING THE PERIOD COMMENCING
NOVEMBER 29, 1996 AND ENDING AT THE CLOSE OF BUSINESS ON DECEMBER
27, 1996, AND (II) $26.67] per share (the "Exercise Price"), a
number of shares of Common Stock, par value $.01 per share, of
the Company (the "Common Stock") that is equal to the number of
Warrants set forth above. The number of shares purchasable upon
exercise of this Warrant and the Exercise Price per share are
subject to adjustment from time to time as set forth in the
Warrant Agreement referred to below.
The Warrants evidenced hereby may be exercised in whole
or in part by presentation of this Warrant Certificate with the
Purchase Form on the reverse side hereof duly executed (with a
signature guarantee if required by the Warrant Agreement) and
simultaneous payment of the Exercise Price (subject to
adjustment) at the office or agency of the Company maintained for
that purpose in the City of New York. Initially, American Stock
Transfer & Trust Company will act as Warrant Agent (the "Warrant
Agent"). Payment of such price shall be made at the option of
the holder hereof by certified or cashier's check. No fractional
shares of Common Stock will be issued upon the exercise of rights
to purchase hereunder, but the Company shall pay the cash value
of any such fraction upon the exercise of one or more Warrants,
all as provided in the Warrant Agreement.
Upon any partial exercise of this Warrant Certificate,
there shall be countersigned and issued to the Holder hereof a
new Warrant Certificate in respect of the shares as to which this
Warrant shall not have been exercised. This Warrant Certificate
may be exchanged at the office of the Warrant Agent maintained
for that purpose in the City of New York by surrender of this
Warrant Certificate properly endorsed (with a signature guarantee
if required by the Warrant Agreement), either separately or in
combination with one or more other Warrant Certificates, for one
or more new Warrants for the same aggregate number of shares as
were evidenced by the Warrant Certificate or Warrant Certificates
exchanged.
This Warrant Certificate is transferable at the office
of the Warrant Agent maintained for that purpose in the City of
New York in the manner and subject to the limitations set forth
in the Warrant Agreement.
The Warrants evidenced hereby are part of a duly
authorized issue of Series C Warrants with rights to purchase an
aggregate of up to 256,821 shares of Common Stock (subject to
adjustment) and are issued under and in accordance with a Warrant
Agreement dated as of July 31, 1996, between the Company and the
Warrant Agent and are subject to the terms and provisions
contained in the Warrant Agreement, to all of which the Holder of
this Warrant Certificate by acceptance hereof consents. Copies
of the Warrant Agreement are on file at the above mentioned
office of the Warrant Agent and may be obtained for inspection by
the Holder hereof upon written request to the Warrant Agent.
The Holder hereof may be treated by the Company, the
Warrant Agent, and all other persons dealing with this Warrant
Certificate as the absolute owner hereof for any purpose and as
the person entitled to exercise the rights represented hereby, or
to the transfer hereof on the books of the Company, any notice to
the contrary notwithstanding, and until such transfer on such
books, the Company, the Warrant Agent and all such other persons
may treat the registered holder hereof as the owner for all
purposes.
The Warrants evidenced hereby do not entitle any Holder
hereof to any of the rights of a shareholder of the Company.
This Warrant Certificate shall not be valid or
obligatory for any purpose until it shall have been countersigned
by the Warrant Agent.
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Warrant
Certificate to be executed by its duly authorized officers and
the corporate seal hereunto affixed.
Dated: HOUSE OF FABRICS, INC.
By:
----------------------------
Title:
ATTEST:
--------------------------------
Title:
COUNTERSIGNED:
AMERICAN STOCK TRANSFER & TRUST COMPANY
WARRANT AGENT
By:
- ---------------------------------
Title:
<PAGE>
HOUSE OF FABRICS, INC.
PURCHASE FORM
The undersigned hereby irrevocably elects to exercise
the right of purchase represented by the within Warrant
Certificate for, and to purchase thereunder, ____ shares of
Common Stock, provided for therein, and requests that
certificates for such shares of Common Stock be issued in the
name of:
Name:___________________________________________________
Address:________________________________________________
Social Security or Taxpayer's
Identification Number: ____________________________
and, if said number of shares of Common Stock shall not be all
the Common Stock purchasable thereunder, that a new Warrant
Certificate for the balance remaining of the Common Stock
purchasable under the within Warrant Certificate be registered in
the name of the undersigned Warrantholder or his or her Assignee
as below indicated and delivered to the address stated below.
Name of Warrantholder
or Assignee: __________________________
Address: __________________________
Social Security or Taxpayer's
Identification Number: __________________________
Signature: _________________
Dated: ___________________
NOTICE: The above signature must
correspond with the name as
written upon the face of this
Warrant Certificate in every
particular, without alteration
or enlargement or any change
whatever, unless this Warrant
has been assigned.
Signature Guaranteed: ____________________
Signatures must be guaranteed by an eligible guarantor
institution (a bank, stockbroker, savings and loan association or
credit union with membership in an approved signature guarantee
medallion program) pursuant to Rule 17Ad-15 of the Securities
Exchange Act of 1934.
<PAGE>
ASSIGNMENT
(To be signed only upon
assignment of Warrant Certificate)
FOR VALUE RECEIVED, the undersigned hereby sells,
assigns and transfers unto _______________________________
(Name of Assignee)
_____________________________________________________
_____________________________________________________
_____________________________________________________
(Social Security or other Taxpayer Identification Number of
Assignee)
the within Warrants, hereby irrevocably constituting and
appointing ____________________________________________
_____________ Attorney to transfer said Warrants on the books of
the Company, with full power of substitution in the premises.
DATED: __________________
_________________________________
Signature of Registered Holder
NOTICE: The signature of
this assignment must
correspond with the
name as it appears
upon the face of the
within Warrant
Certificate in every
particular, without
alteration or
enlargement or any
change whatever.
Signature Guaranteed: ______________________
Signatures must be guaranteed by an eligible guarantor
institution (a bank, stockbroker, savings and loan association or
credit union with membership in an approved signature guarantee
medallion program) pursuant to Rule 17Ad-15 of the Securities
Exchange Act of 1934.
<PAGE>
AMENDMENT NO. 1 TO SERIES C WARRANT AGREEMENT
This Amendment No. 1 to Series C Warrant Agreement
(this "Amendment") is dated as of December 30, 1996 by and
between House of Fabrics, Inc., a Delaware corporation (the
"Company"), and American Stock Transfer & Trust Company, as
warrant agent (the "Warrant Agent").
W I T N E S S E T H:
WHEREAS, the Company and the Warrant Agent have entered
into a Series C Warrant Agreement, dated as of July 31, 1996 (the
"Warrant Agreement"), pursuant to which the Company proposes to
issue up to 256,821 Series C Warrants, each Warrant entitling the
registered owner thereof to purchase one share of the Company's
Common Stock, par value $.01 per share; and
WHEREAS, the Warrant Agreement was executed in
connection with the Third Amended Joint Plan of Reorganization,
dated May 23, 1996, as modified, of the Company and others, which
Plan of Reorganization was confirmed by the order of the United
States Bankruptcy Court of the Central District of California,
Judge Kathleen T. Lax, dated July 10, 1996 and duly entered on
July 10, 1996 in the proceeding entitled House of Fabrics, Inc.
et. al., debtors, case number SV94-50060KL (the "Plan of
Reorganization"); and
WHEREAS, the Plan of Reorganization provides that the
exercise price for the Series C Warrants shall be an amount equal
to the greater of (i) 200% of the average daily Trading Price (as
defined in the Warrant Agreement) per share for the Trading Days
(as defined in the Warrant Agreement) during the Pricing Period
(as defined in the Warrant Agreement), and (ii) $26.67; and
WHEREAS, due to a typographical error, Section 9 of the
Warrant Agreement provides that the exercise price shall be the
lesser of clauses (i) and (ii) above; and
WHEREAS, as permitted by Section 19 of the Warrant
Agreement, the parties wish to enter into this Amendment to
correct the typographical error noted above.
NOW, THEREFORE, the Company and the Warrant Agent
hereby agree as follows:
1. Section 9 of the Warrant Agreement is hereby
amended in its entirety to read as follows:
"SECTION 9. Exercise Price.
The price per share at which Warrant Shares
shall be purchasable upon exercise of each Warrant
(the "Exercise Price") shall be an amount equal to
the greater of (i) 200% of the average of the
daily Trading Price (as defined in Section 10.1
(d)) per share for the Trading Days (as defined in
Section 10.1 (d)) during the Pricing Period
(rounded down to the nearest cent), and (ii)
$26.67. 'Pricing Period' is defined as the period
commencing on November 29, 1996 and ending at the
close of business on December 27, 1996. The
Exercise Price is subject to adjustment pursuant
to Section 10 hereof; provided, however, that if
the Exercise Price in effect on the date of
exercise of a Warrant is less than the par value
of a Warrant Share, the price per share at which
Warrant Shares may be purchased upon the exercise
of such Warrant on such date shall be the par
value of a Warrant Share."
2. The first paragraph of Exhibit A to the Warrant
Agreement is hereby amended in its entirety to read as follows:
"This certifies that, for value received,
__________ or registered assigns (the `Holder'),
is entitled to purchase from House of Fabrics,
Inc., a Delaware corporation (the `Company'),
until 5:00 P.M., New York time, on July 31, 2001
(the `Expiration Date'), at the purchase price of
$[ ] [THE GREATER OF 200% OF THE AVERAGE DAILY
TRADING PRICE PER SHARE OF COMMON STOCK FOR THE
TRADING DAYS DURING THE PERIOD COMMENCING NOVEMBER
29, 1996 AND ENDING AT THE CLOSE OF BUSINESS ON
DECEMBER 27, 1996, AND (II) $26.67] per share (the
`Exercise Price'), a number of shares of Common
Stock, par value $.01 per share, of the Company
(the `Common Stock') that is equal to the number
of Warrants set forth above. The number of shares
purchasable upon exercise of this Warrant and the
Exercise Price per share are subject to adjustment
from time to time as set forth in the Warrant
Agreement referred to below."
3. Except as expressly set forth in this Amendment,
the Warrant Agreement shall remain in full force and effect. The
Warrant Agreement, as amended by this Amendment, is in all
respects ratified and confirmed, and this Amendment shall be
deemed to be part of the Warrant Agreement in the manner and to
the extent herein provided.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed as of the day and year first above
written.
HOUSE OF FABRICS, INC.
By: /s/ Gary L. Larkins
----------------------------------
Title: Vice Chairman of the Board
ATTEST:
/s/ Marvin S. Maltzman
- ------------------------------
Title: Senior Vice President
and General Counsel
AMERICAN STOCK TRANSFER & TRUST
COMPANY, as Warrant Agent
By: /s/ Joe Wolf
---------------------------------
Title: Vice President
ATTEST:
/s/ Joe Alicia
- --------------------------
Title:
