FORM 8-A
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(B) OR (G) OF THE
SECURITIES EXCHANGE ACT OF 1934
EDISON BROTHERS STORES, INC.
(Exact name of registrant as specified in its charter)
Delaware 43-0254900
(State of incorporation or organization) (I.R.S. Employer Identification No.)
501 North Broadway 63102
St. Louis, Missouri (Zip Code)
(Address of principal executive offices)
SECURITIES TO BE REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:
Title of each class Name of each exchange on which
to be so registered each class is to be registered
Not Applicable Not Applicable
If this Form relates to the registration of a class of debt securities and
is effective upon filing pursuant to General Instruction A.(c)(1), please check
the following box.
If this Form relates to the registration of a class of debt securities and
is to become effective simultaneously with the effectiveness of a concurrent
registration statement under the Securities Act of 1933 pursuant to General
Instruction A.(c)(2), please check the following box. [ ]
SECURITIES TO BE REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:
Common Stock, par value $.01 per share
(Title of class)
Warrants to purchase Common Stock
(Title of class)
HOFS04...:\16\43016\0001\2236\REG7287K.36A
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INFORMATION REQUIRED IN REGISTRATION STATEMENT
ITEM 1. DESCRIPTION OF REGISTRANT'S SECURITIES TO BE REGISTERED.
GENERAL
On November 3, 1995, Edison Brothers Stores, Inc., a Delaware corporation
(the "Company"), and certain of its subsidiaries filed petitions for relief
under Chapter 11 of Title 11, United States Code (the "Bankruptcy Code"), in the
United States District Court for the District of Delaware (the Company and such
subsidiaries, in such capacity, collectively, the "Debtors"). Since such time,
the Debtors have continued to operate their businesses and manage their
properties as debtors in possession pursuant to Sections 1107 and 1108 of the
Bankruptcy Code.
Pursuant to the Debtors' Amended Joint Plan of Reorganization Under
Chapter 11 Of The Bankruptcy Code (Case No. 95-1354 (PJW)) dated June 30, 1997
(as it may be further amended or modified from time to time, the "Plan"), on the
effective date of the Plan (the "Effective Date"), the Company will, among other
things, file an Amended and Restated Certificate of Incorporation (the
"Certificate of Incorporation") with the Delaware Secretary of State under which
the authorized capital stock of the Company will consist of 110,000,000 shares
divided into the following two classes: (1) 100,000,000 shares of Common Stock,
par value $.01 per share ("Common Stock"); and (2) 10,000,000 shares of
Preferred Stock, par value $.01 per share. Also pursuant to the Plan, the
Company will issue the following securities, among others: (1) the Company will
issue, on the 60th day after the Effective Date or as soon thereafter as
practicable (the "Initial Distribution Date"), to holders of Allowed General
Unsecured Claims (as defined in the Plan), 10,000,000 shares of Common Stock,
and on the Effective Date, to certain of the Company's senior executives, an
aggregate of 225,000 shares of restricted Common Stock; and (2) the Company will
issue, on the Initial Distribution Date to holders of Allowed Edison Equity
Interests (as defined in the Plan), approximately 1,008,791 warrants to purchase
Common Stock (the "Warrants").1 The Warrants will be issued pursuant to a
Warrant Agreement (the "Warrant Agreement") to be dated as of the Effective Date
between the Company and a Warrant Agent named therein. This registration
statement on Form 8-A pertains only to the Common Stock and the Warrants.
- -------------------------
1. The Company will additionally issue on the Effective Date to holders of
Allowed Edison Equity Interests 10,000,000 Rights (the "Rights"). The Rights
will be exercisable until 5:00 p.m., New York City time, on the 30th day after
the Effective Date (or, if such date is not a business day, the next succeeding
business day). The Rights will represent, in the aggregate, the right to
purchase, at an exercise price of $16.40 per Right, (1) the Common Stock and (2)
either (a) the Class A Membership Units in EBS Litigation, L.L.C., a limited
liability company to be formed and operated pursuant to the terms of the Plan,
or (b) if the holders thereof are also D&B Spinoff Stockholders (as defined in
the Plan), the right to participate in the D&B Spinoff Settlement (as defined in
the Plan).
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COMMON STOCK
The holders of shares of Common Stock will be entitled to one vote for
each share on all matters submitted to a vote of common stockholders. Except as
otherwise provided by law, the Certificate of Incorporation or the Bylaws of the
Company, the holders of shares of Common Stock will exclusively possess the
voting power for the election of directors of the Company and for all other
purposes. Except as otherwise provided by law, the Certificate of Incorporation
or the Bylaws of the Company, the vote of the holders of at least a majority of
the outstanding shares of Common Stock who are present, in person or by proxy,
at a meeting at which a quorum is present will be required to take action. There
is no provision in the Certificate of Incorporation for cumulative voting with
respect to the election of directors of the Company. Directors of the Company
will be elected by a plurality of the votes of the shares entitled to vote in
the election of directors. On the Effective Date, the initial board of directors
of the Company will consist of nine persons selected as set forth in the Plan,
which persons shall serve as directors until the first annual meeting of
stockholders of the Company thereafter and until their successors have been duly
elected and qualified or until their earlier resignation or removal in
accordance with the Certificate of Incorporation and the Company's Bylaws. Under
the Certificate of Incorporation, any action required or permitted to be taken
by the stockholders of the Company must be effected at a duly called annual or
special meeting of such stockholders and may not be effected by any consent in
writing by such stockholders. Except as otherwise provided by law and subject to
the rights of the holders of any class or series of stock having a preference
over the Common Stock as to dividends or upon liquidation, special meetings of
stockholders of the Company may be called only by the Chairman of the Board of
the Company, the President of the Company, or the board of directors of the
Company pursuant to a resolution approved by a majority of the entire such board
of directors, and shall be called by such President or by the Secretary of the
Company upon the written request of the holders of at least 51% of the
outstanding shares of Common Stock. Each share of Common Stock will be entitled
to participate equally in dividends, when, as and if declared by the board of
directors of the Company, and in the distribution of net assets in the event of
any voluntary or involuntary liquidation, dissolution or winding up of the
Company, subject in all cases to any prior rights of outstanding shares of
preferred stock of the Company. The shares of Common Stock will have no
preemptive or conversion rights, redemption rights or sinking fund provisions
and will not be subject to calls, assessments or rights of redemption by the
Company.
The Plan requires that the Company use reasonable commercial efforts to
cause the Common Stock to be listed on a national securities exchange or the
Nasdaq National Market. The Company intends to make application for inclusion of
the Common Stock on the Nasdaq National Market.
WARRANTS
Each Warrant will entitle the holder thereof to purchase one share of
Common Stock at an exercise price of $16.40 per share, subject to adjustment in
certain circumstances, as described below. The Warrants will be exercisable
until 5:00 p.m., New York City time, on the eighth anniversary of the Effective
Date (or, if such date is not a business day, the next
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succeeding business day). Holders of the Warrants will have no voting rights,
will not be entitled to receive dividends or other distributions declared on the
capital stock of the Company, and will not be entitled to share in any of the
assets of the Company upon liquidation, dissolution or winding up of the
Company. The number of shares of Common Stock for which a Warrant is exercisable
and the exercise price of the Warrants are subject to adjustment in certain
events, including (1) stock dividends, subdivisions and combinations affecting
the Common Stock, (2) certain extraordinary distributions to holders of the
Common Stock, (3) certain distributions to holders of the Common Stock of
options, warrants or other rights to purchase Common Stock or certain securities
convertible into Common Stock if the consideration for which Common Stock is
issuable upon the exercise, or exercise and conversion, thereof is less than the
average daily market price of the Common Stock as calculated pursuant to the
terms of the Warrant Agreement, (4) certain issuances or sales by the Company of
Common Stock, or options, warrants or other rights to purchase Common Stock or
certain securities convertible into Common Stock, for consideration less than
the average daily market price of the Common Stock as calculated pursuant to the
terms of the Warrant Agreement, and (5) certain reorganizations,
reclassifications, consolidations, mergers and dispositions involving the
Company. The Company will be under no obligation to repurchase the Warrants.
However, if at any time the daily market price of the Common Stock, as
calculated pursuant to the terms of the Warrant Agreement, exceeds 200% of the
then current exercise price of the Warrants on any ten Trading Days (as defined
in the Warrant Agreement), whether or not consecutive, during any period of 15
consecutive Trading Days, the Company will have the right upon written notice to
repurchase the Warrants for a purchase price of $1.00 per Warrant on the
forty-fifth day following delivery of such notice (or, if such day is not a
business day, the next succeeding business day); provided, however, that a
holder of the Warrants is not precluded from exercising any portion of such
Warrants exercisable at any time prior to such repurchase.
The Plan requires that the Company use reasonable commercial efforts to
cause the Warrants to be listed on a national securities exchange or the Nasdaq
National Market. The Company intends to make application for inclusion of the
Warrants on the Nasdaq National Market.
ITEM 2. EXHIBITS.
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EXHIBIT
NUMBER DESCRIPTION
- ------ -----------
1.1 Form of Common Stock Certificate.
1.2 Form of Warrant Certificate (included as Exhibit A
to Exhibit 1.5 hereof).
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EXHIBIT
NUMBER DESCRIPTION
- ------ -----------
1.3 Form of the Amended and Restated Certificate of
Incorporation of the Company, to be filed with the
Secretary of State of the State of Delaware and to
become effective as of the Effective Date
(incorporated herein by reference to Exhibit T3A-2 of
the Company's Form T-3 dated July 23, 1997 (File No.
022-22273)).
1.4 Form of the Amended and Restated Bylaws of the
Company to become effective as of the Effective Date
(incorporated herein by reference to Exhibit T3B-2 of
the Company's Form T-3 dated July 23, 1997 (File No.
022-22273)).
1.5 Form of the Warrant Agreement, to be dated as of the
Effective Date, by and between the Company and a
Warrant Agent to be named therein.
1.6 Debtor's Amended Joint Plan of Reorganization Under
Chapter 11 of the Bankruptcy Code dated June 30, 1997
(incorporated herein by reference to Exhibit A to
Exhibit T3E-1 of the Company's Form T-3 dated July
23, 1997 (File No. 022-22273)).
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SIGNATURE
Pursuant to the requirements of Section 12 of the Securities Exchange Act
of 1934, as amended, the registrant has duly caused this registration statement
on Form 8-A to be signed on its behalf by the undersigned, thereto duly
authorized.
EDISON BROTHERS STORES, INC.
By: /s/ David B. Cooper, Jr.
------------------------------------
Name: David B. Cooper, Jr.
Title: Executive Vice President and
Chief Financial Officer
Date: August 20, 1997
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EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION
- ------ -----------
1.1 Form of Common Stock Certificate.
1.2 Form of Warrant Certificate (included as Exhibit A to
Exhibit 1.5 hereof).
1.3 Form of the Amended and Restated Certificate of
Incorporation of the Company, to be filed with the
Secretary of State of the State of Delaware and to
become effective as of the Effective Date
(incorporated herein by reference to Exhibit T3A-2 of
the Company's Form T-3 dated July 23, 1997 (File No.
022-22273)).
1.4 Form of the Amended and Restated Bylaws of the
Company to become effective as of the Effective Date
(incorporated herein by reference to Exhibit T3B-2 of
the Company's Form T-3 dated July 23, 1997 (File No.
022-22273)).
1.5 Form of the Warrant Agreement, to be dated as of the
Effective Date, by and between the Company and a
Warrant Agent to be named therein.
1.6 Debtor's Amended Joint Plan of Reorganization Under
Chapter 11 of the Bankruptcy Code dated June 30, 1997
(incorporated herein by reference to Exhibit A to
Exhibit T3E-1 of the Company's Form T-3 dated July
23, 1997 (File No. 022-22273)).
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Exhibit 1.1
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FORM OF COMMON STOCK CERTIFICATE
--------------------------------
TEMPORARY CERTIFICATE - EXCHANGEABLE FOR DEFINITIVE CERTIFICATE
WHEN READY FOR DELIVERY
- --------------------------------------------------------------------------------
EDISON BROTHERS STORES, INC.
COMMON STOCK COMMON STOCK
------------ ------------
NUMBER SHARES
------ ------
------------ ------------
This Certificate is Transferrable in See Reverse for
New York, NY or Ridgefield Park, NJ certain definitions
CUSIP 280875 10 5
INCORPORATED UNDER THE LAWS OF THE STATE OF DELAWARE
THIS CERTIFIES THAT
------------------------------------------------------------
IS THE OWNER OF
----------------------------------------------------------------
Fully Paid and Nonassessable shares of the Common Stock,
$0.01 par value per share, of EDISON BROTHERS STORES, INC.
transferrable on the books of the Corporation by the holder hereof in person or
by duly authorized attorney upon surrender of this certificate properly
endorsed. This Certificate and the shares represented hereby are issued and
shall be held subject to all of the provisions of the Certificate of
Incorporation of the Corporation, as amended, to all of which the holder by
acceptance hereof assents. This Certificate is not valid until countersigned
by the Transfer Agent and registered by the Registrar.
WITNESS the facsimile seal of the Corporation and the facsimile signatures
of its duly authorized officers.
Dated:
[EDISON BROTHERS STORES, INC.
CORPORATE
SEAL]
/s/ /s/
- ------------------------------- ------------------------------
Secretary President
COUNTERSIGNED AND REGISTERED
CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
TRANSFER AGENT AND REGISTRAR
BY
--------------------------------------------------
AUTHORIZED SIGNATURE
<PAGE>
EDISON BROTHERS STORES, INC.
The Corporation shall furnish, without charge, to each stockholder who
makes a written request therefor, a full statement of the preferences,
limitations, restrictions, voting rights and relative rights of the shares of
each class of stock. Such request may be addressed to the Secretary of the
Corporation at its principal office or to the Transfer Agent named on the face
of this Certificate.
The following abbreviations, when used in the inscription on the face of
this Certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with right
of survivorship and not as tenants
in common
UNIF GIFT MIN ACT - ........Custodian..................
(Cust) (Minor)
under Uniform Gift to Minors
Act................................
(State)
UNIF TRF MIN ACT - .......Custodian (until age ......)
(Cust)
........... under Uniform Transfers
(Minor)
to Minors Act .....................
(State)
Additional abbreviations may also be used though not in the above list.
FOR VALUE RECEIVED, ____________ hereby sell(s), assign(s) and transfer(s) unto
Please insert Social Security ot other
Identifying Number of Assignee
- --------------------------------------
- --------------------------------------
- --------------------------------------------------------------------------------
(Please print or typewrite name and address, including zip code, of Assignee)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Shares
- ------------------------------------------------------------------------
of the capital stock represented by the within Certificate, and do hereby
irrevocably constitute and appoint
Attorney
- -----------------------------------------------------------------------
to transfer the said stock on the books of the within named Corporation with
full power of substitution in the premises.
Dated:
----------------------------
X
---------------------------------
X
---------------------------------
Notice: The signature(s) to this assignment
must correspond with the name(s) as
written upon the face of the
certificate in every particular,
without alteration or enlargement or
any change whatever
Signature(s) Guaranteed
By:
----------------------------------
The signature(s) must be guaranteed by
an eligible Guarantor Institution (Banks,
Stock Brokers, Savings and Loan Associations
and Credit Unions with membership in an
approved signature guarantee medallion program),
pursuant to S.E.C. Rule 17Ad-15.
Exhibit 1.5
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WGM Draft 07/17/97
EDISON BROTHERS STORES, INC.
and
--------------------
as Warrant Agent
--------------------
Warrants to Purchase _______ Shares of Common Stock
------------------
WARRANT AGREEMENT
Dated as of _______ __ , 1997
<PAGE>
TABLE OF CONTENTS
Page
1. DEFINITIONS.......................................................... 1
2. APPOINTMENT OF WARRANT AGENT......................................... 5
2.1. Appointment................................................. 5
3. REGISTRATION, FORM AND EXECUTION OF WARRANTS......................... 5
3.1. Registration................................................ 5
3.2. Form of Warrant............................................. 5
3.3. Countersignature of Warrants................................ 6
4. EXERCISE OF WARRANTS................................................. 6
4.1. Manner of Exercise.......................................... 7
4.2. Payment of Taxes............................................ 7
4.3. Fractional Shares........................................... 7
5. TRANSFER, DIVISION AND COMBINATION................................... 7
5.1. Transfer.................................................... 7
5.2. Division and Combination.................................... 8
5.3. Maintenance of Books........................................ 8
6. ADJUSTMENTS........................................................... 8
6.1. Stock Dividends, Subdivisions and Combinations............... 9
6.2. Certain Distributions....................................... 10
6.3. Issuance of Rights to Purchase Common Stock at Below
Daily Market Price.......................................... 10
6.4. Issuance of Common Stock Below Daily Market Price........... 12
6.5. Reorganization, Reclassification, Merger, Consolidation or
Disposition................................................. 13
6.6. Other Provisions Applicable to Adjustments.................. 14
6.7. Certain Limitations......................................... 14
7. NOTICES TO WARRANT HOLDERS........................................... 14
7.1. Notice of Adjustments....................................... 14
7.2. Notice of Corporate Action.................................. 14
8. NO IMPAIRMENT........................................................ 15
9. RESERVATION AND AUTHORIZATION OF COMMON STOCK;
REGISTRATION WITH OR APPROVAL OF ANY GOVERNMENTAL
AUTHORITY............................................................ 16
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10. TAKING OF RECORD; STOCK AND WARRANT TRANSFER BOOKS................... 16
11. RESTRICTIONS ON TRANSFERABILITY...................................... 16
11.1. Restrictive Legend.......................................... 16
12. LOSS OR MUTILATION................................................... 17
13. OFFICE OF COMPANY.................................................... 17
14. REPURCHASE BY COMPANY OF WARRANTS.................................... 18
14.1. Option to Repurchase Warrants............................... 18
14.2. Payment of Repurchase Price................................. 18
15. WARRANT AGENT........................................................ 18
15.1. Merger or Consolidation or Change of Name of Warrant Agent.. 19
15.2. Certain Terms and Conditions Concerning the Warrant Agent... 19
15.3. Change of Warrant Agent..................................... 21
15.4. Disposition of Proceeds on Exercise of Warrants,
Inspection of Warrant Agreement............................. 21
16. MISCELLANEOUS........................................................ 22
16.1. Limitation of Liability..................................... 22
16.2. Notice Generally............................................ 22
16.3. Successors and Assigns...................................... 23
16.4. Amendment................................................... 23
16.5. Severability................................................ 23
16.6. Headings.................................................... 23
16.7. Governing Law............................................... 23
16.8. Counterparts................................................ 23
EXHIBITS
Exhibit A - Form of Warrant Certificate
Exhibit B - Warrant Agent Fees
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THIS WARRANT AGREEMENT (this "Warrant Agreement"), dated as of ___
_____ 1997, is made by and between Edison Brothers Stores, Inc., a Delaware
corporation (the "Company"), and _________________, a __________ corporation, as
warrant agent (the "Warrant Agent").
W I T N E S S E T H:
--------------------
WHEREAS, the Company proposes to issue, to holders of Allowed Edison
Equity Interests, warrants, as hereinafter described (the "Warrants"), to
purchase up to an aggregate of ______ shares of its Common Stock pursuant to
Section 4.8 of the Plan, as confirmed by the United States Bankruptcy Court for
the District of Delaware (the "Court"), by order entered ______ __, 1997, under
title 11 of the United States Code; and
WHEREAS, the Company has requested the Warrant Agent to act on
behalf of the Company, and the Warrant Agent is willing so to act, in connection
with the issuance, division, transfer, exchange and exercise of 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 and hereunder of the Company, the Warrant
Agent, and the Holders, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged and affirmed, the
Company and the Warrant Agent hereby agree as follows:
1. DEFINITIONS.
As used in this Warrant Agreement, the following terms have the
respective meanings set forth below:
"Additional Shares of Common Stock" shall mean all shares of Common
Stock issued by the Company after the Effective Date, other than Warrant Stock.
"Allowed" shall have the meaning assigned to such term in the Plan.
"Business Day" shall mean any day that is not a Saturday or Sunday
or a day on which banks are required or permitted to be closed in the State of
New York.
"Common Stock" shall mean (except where the context otherwise
indicates) the Common Stock, $.01 par value per share, of the Company as
constituted on the Effective Date, and any capital stock into which such Common
Stock may thereafter be changed, and shall also include (1) capital stock of the
Company of any other class (regardless of how denominated) issued to the holders
of shares of Common Stock upon any reclassification thereof which is also not
preferred as to dividends or assets over any other class of stock of the Company
and which is not subject to redemption and (2) shares of common stock of any
successor or acquiring corporation received by or distributed to the holders of
Common Stock of the Company in the circumstances contemplated by Section 6.2.
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"Company" shall have the meaning assigned to such term in the first
paragraph of this Warrant Agreement.
"Convertible Securities" shall mean evidences of indebtedness,
shares of stock or other securities which are convertible into or exchangeable
for Additional Shares of Common Stock, either immediately or upon the occurrence
of a specified date or a specified event.
"Court" shall have the meaning assigned to such term in the recitals
to this Warrant Agreement.
"Current Warrant Price" shall mean, in respect of a share of Common
Stock at any date herein specified, the price at which a share of Common Stock
may be purchased pursuant to this Warrant Agreement on such date.
"Daily Market Price" shall mean, in respect of any share of Common
Stock on any Trading Day, (1) the last sale price on such day on the principal
stock exchange on which such Common Stock is then listed or admitted to trading
or (2) if no sale takes place on such day on any such exchange, the average of
the last reported closing bid and asked prices on such day as officially quoted
on any such exchange. If the Common Stock is not then listed or admitted to
trading on any stock exchange, the Daily Market Price shall be the average of
the last reported closing bid and asked prices on such day in the
over-the-counter market, as furnished by the National Association of Securities
Dealers Automatic Quotation System or the National Quotation Bureau, Inc.;
provided, that if neither such corporation at the time is engaged in the
business of reporting such prices, the Daily Market Price shall be as furnished
by any similar firm then engaged in such business, or if there is no such firm,
as furnished by any member of the NASD selected mutually by the Majority Holders
and the Company or, if they cannot agree upon such selection, as selected by two
such members of the NASD, one of which shall be selected by the Majority Holders
and one of which shall be selected by the Company. If the Common Stock is not
reported in the over-the-counter market and no member of the NASD selected
pursuant to the preceding sentence will furnish the Daily Market Price, then the
Daily Market Price shall be as determined in good faith by the Board of
Directors of the Company, whose determination shall be conclusive.
"Debtors" shall mean, collectively, the Company, Edison Brothers
Apparel Stores, Inc., Edison Brothers Shoe Stores, Inc., Edison Paymaster, Inc.,
Edison Brothers Redevelopment Corporation, Edbro Missouri Realty Company, Inc.,
Edison Alabama Stores, Inc., Edison Arkansas Stores, Inc., Edison Colorado
Stores, Inc., Edison Brothers Company, Edison Hawaii Stores, Inc., Edison
Illinois Stores, Inc., Edison Kansas Stores, Inc., Edison Kentucky Stores, Inc.,
Edison Louisiana Stores, Inc., Edison Maryland Stores, Inc., Edison
Massachusetts Stores, Inc., Edison Michigan Stores, Inc., Edison Minnesota
Stores, Inc., Edison Mississippi Stores, Inc., Edison Nebraska Stores, Inc.,
Edison New Jersey Stores, Inc., Edison New Mexico Stores, Inc., Edison New York
Stores, Inc., Edison Ohio Stores, Inc., Edison Oklahoma Stores, Inc., Edison
Oregon Stores, Inc., Edison Pennsylvania Stores, Inc., Edison Tennessee Stores,
Inc., Edison Texas Stores, Inc., Edison Utah Stores, Inc., Edbro Ohio Realty,
Inc., EBSS-Montana, Inc., EBSS-North Central, Inc., EBSS-Indiana, Inc., EBSS-
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Iowa, Inc., EBSS-Kansas, Inc., EBSS-Wisconsin, Inc., EBSS-Northeast, Inc.,
EBSS-South, Inc., EBSS-Mideast, Inc., EBSS-Michigan, Inc., EBSS-East, Inc.,
EBSS-Ohio, Inc., EBSS- Pennsylvania, Inc., EBSS-Texas, Inc., EBSS-West, Inc.,
Edison Puerto Rico Stores, Inc., Ebscat, Inc., Edison Brothers Mall
Entertainment, Inc., Horizon Entertainment, Edison Brothers Stores
International, Inc., Edisur, Inc., EBS Holdings Corp., Edison Whittier
Warehouse, Inc., Edbro California USG-2, Inc., Edbro Missouri USG-2, Inc., Edbro
California USG-1, Inc., Industrial Design, Inc., Webster Clothes, Inc., Z&Z
Fashions, Ltd., Webster-Rossville, Inc., Time-Out Family Amusement Centers,
Inc., Tofac of Puerto Rico, Inc., Sacha Shoes, Inc. and Mandel's of California.
"Edison Equity Interest" shall have the meaning assigned to such
term in the Plan.
"Effective Date" shall have the meaning set forth in the Plan.
"Expiration Date" shall mean the date that is the eight-year
anniversary of the Effective Date.
"Fully Diluted Outstanding" shall mean, when used with reference to
Common Stock, at any date as of which the number of shares thereof is to be
determined, all shares of Common Stock Outstanding at such date and all shares
of Common Stock issuable in respect of any Warrants to purchase, or securities
convertible into or exchangeable for, shares of Common Stock outstanding on such
date which would be deemed outstanding in accordance with GAAP for purposes of
determining book value or net income per share.
"GAAP" shall mean generally accepted accounting principles in the
United States of America as from time to time in effect.
"Holder" shall mean the Person in whose name a Warrant is registered
in the warrant register of the Company maintained by or on behalf of the Company
for such purpose.
"Insider" shall mean any person, as such term is defined in Section
(a)(2) of Rule 144 under the Securities Act, that is the beneficial owner, as
such term is used in such Rule 144, of ten percent (10%) or more of any class of
equity securities (or other equity interest) of the Company.
"Majority Holders" shall mean the Holders of Warrants exercisable
for in excess of 50% of the aggregate number of shares of Common Stock then
purchasable upon exercise of all Warrants.
"NASD" shall mean the National Association of Securities Dealers,
Inc., or any successor corporation thereto.
"Other Property" shall have the meaning set forth in Section 6.2.
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"Outstanding" shall mean, when used with reference to Common Stock,
at any date as of which the number of shares thereof is to be determined, all
issued shares of Common Stock, except shares then owned or held by or for the
account of Company or any subsidiary thereof, and shall include all shares
issuable in respect of outstanding scrip or any certificates representing
fractional interests in shares of Common Stock.
"Permitted Issuances" shall mean (i) the issuance of the Warrants,
(ii) the issuance of warrants or stock options to the Company's management and
other employees for the purchase of up to 800,000 shares of Common Stock
pursuant and subject to the 1997 Stock Option Plan of the Company, (iii) the
issuance of warrants or stock options to the Company's non-employee directors
for the purchase of up to 200,000 shares of Common Stock pursuant and subject to
the 1997 Directors Stock Option Plan of the Company, (iv) the issuance of
warrants or stock options to the Company's directors, management or other
employees for the purchase of Common Stock pursuant to any other stock option
plan of the Company, (v) the issuance of shares of Common Stock upon exercise of
the warrants and options referred to in clauses (i), (ii), (iii) and (iv), and
(vi) all other issuances of Common Stock and warrants or stock options by the
Company expressly authorized by the Plan.
"Person" shall mean any individual, sole proprietorship,
partnership, joint venture, trust, incorporated organization, association,
corporation, limited liability company, limited liability partnership,
institution, public benefit corporation, entity or government (whether federal,
state, county, city, municipal or otherwise, including, without limitation, any
instrumentality, division, agency, body or department thereof).
"Plan" shall mean the Debtors' Amended Joint Plan of Reorganization
Under Chapter 11 of the United States Bankruptcy Code, as it may be further
amended or modified.
"Pricing Period" shall have the meaning set forth in Section 14.1.
"Repurchase Price" shall have the meaning set forth in Section 14.1.
"Securities Act" shall mean the Securities Act of 1933, as amended,
and the rules and regulations adopted by the Securities and Exchange Commission
thereunder.
"Trading Day" shall mean any day on which the principal stock
exchange on which the Common Stock is listed or admitted to trading is open or,
if the Common Stock is not then listed or admitted to trading on any stock
exchange, any day on which the National Association of Securities Dealers
Automatic Quotation System or the National Quotation Bureau Inc. reports prices
in respect of securities or, if neither such corporation is then engaged in such
business, any day on which the member of the NASD selected as specified in the
proviso set forth in the definition of "Daily Market Price" furnishes prices for
securities.
"Warrant Agent" shall have the meaning assigned to such term in the
first paragraph of this Warrant Agreement and shall include any successor
Warrant Agent hereunder.
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"Warrant Agent's Principal Office" shall mean the principal office
of the Warrant Agent in New York City, New York (or such other office of the
Warrant Agent or any successor thereto hereunder acceptable to the Company as
set forth in a written notice provided to the Company and the Holders).
"Warrant Agreement" shall have the meaning assigned to such term in
the first paragraph of this Warrant Agreement.
"Warrant Price" shall mean an amount equal to (1) the number of
shares of Common Stock being purchased upon exercise of a Warrant pursuant to
Section 4.1, multiplied by (2) the Current Warrant Price as of the date of such
exercise.
"Warrant Stock" shall mean the shares of Common Stock purchased by
the Holders of the Warrants upon the exercise thereof.
"Warrants" shall have the meaning assigned to such term in the
recitals to this Warrant Agreement, and shall include all warrants issued upon
transfer, division or combination of, or in substitution for, any thereof. All
Warrants shall at all times be identical as to terms and conditions and date,
except as to the number of shares of Common Stock for which they may be
exercised.
2. APPOINTMENT OF WARRANT AGENT.
2.1. Appointment. The Company hereby appoints the Warrant Agent to act as
agent for the Company in accordance with the instructions set forth in this
Warrant Agreement, and the Warrant Agent hereby accepts such appointment.
3. REGISTRATION, FORM AND EXECUTION OF WARRANTS.
3.1. Registration. All Warrants shall be numbered and shall be registered
in a warrant register maintained at the Warrant Agent's Principal Office by the
Warrant Agent as they are issued. The Company and the Warrant Agent shall be
entitled to treat a Holder as the owner in fact for all purposes whatsoever of
each Warrant registered in such Holder's name.
3.2. Form of Warrant. The text of each Warrant and of the Election to
Purchase Form and Assignment Form shall be substantially as set forth in Exhibit
A attached hereto. Each Warrant shall be executed on behalf of the Company by
its President or one of its Vice Presidents, under its corporate seal reproduced
thereon or facsimile thereof attested by its Secretary or an Assistant
Secretary. The signature of any of such officers on the Warrants may be manual
or facsimile.
Warrants 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 Warrants or did not hold such
offices on the date of this Warrant Agreement.
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Warrants shall be dated as of the date of countersignature thereof
by the Warrant Agent either upon initial issuance or upon division, exchange,
substitution or transfer.
3.3. Countersignature of Warrants. Each Warrant shall be manually
countersigned by the Warrant Agent (or any successor to the Warrant Agent then
acting as warrant agent under this Warrant Agreement) and shall not be valid for
any purpose unless so countersigned. Warrants may be countersigned, however, 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
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 President, a Vice
President, the Secretary, or an Assistant Secretary of the Company, countersign,
issue and deliver Warrants entitling the Holders thereof to purchase not more
than _____ shares of Common Stock (subject to adjustment as set forth herein)
and shall countersign and deliver Warrants as otherwise provided in this Warrant
Agreement.
4. EXERCISE OF WARRANTS
4.1. Manner of Exercise. From and after the Effective Date and until 5:00
p.m., New York City time, on the Expiration Date, a Holder may exercise any of
its Warrants, on any Business Day, for all or any part of the number of shares
of Common Stock purchasable hereunder.
In order to exercise a Warrant, in whole or in part, a Holder shall
deliver to the Company at the Warrant Agent's Principal Office, (1) a written
notice of such Holder's election to exercise such Warrant, which notice shall
include the number of shares of Common Stock to be purchased, (2) payment of the
Warrant Price for the account of the Company and (3) such Warrant. Such notice
shall be substantially in the form of the Election to Purchase Form set forth on
the reverse side of the form of Warrant Certificate attached as Exhibit A
hereto, duly executed by such Holder or its agent or attorney. Upon receipt
thereof, the Warrant Agent shall, as promptly as practicable, and in any event
within five Business Days thereafter, deliver or cause to be delivered to such
Holder an executed certificate or certificates representing the aggregate number
of full shares of Common Stock issuable upon such exercise, together with cash
in lieu of any fraction of a share, as hereinafter provided. The stock
certificate or certificates so delivered shall be, to the extent possible, in
such denomination or denominations as such Holder shall request in the notice
and shall be registered in the name of such Holder or, subject to Section 11,
such other name as shall be designated in such notice. A Warrant shall be deemed
to have been exercised and such certificate or certificates shall be deemed to
have been issued, and such Holder or any other Person so designated to be named
therein shall be deemed to have become a holder of record of such shares for all
purposes, as of the date such notice, together with the check or checks and such
Warrant, is received by the Warrant Agent as described above and all taxes
required to be paid by such Holder, if any, pursuant to Section 4.2 prior to the
issuance of such shares have been paid. If any Warrant shall have been exercised
in part, the Warrant Agent shall, at the time of delivery of the certificate or
certificates representing Warrant Stock, deliver to the
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Holder a new Warrant evidencing the rights of such Holder to purchase the
unpurchased shares of Common Stock called for by such Warrant, which new Warrant
shall in all other respects be identical with the Warrant exercised in part, or,
at the request of such Holder, appropriate notation may be made on such
exercised Warrant and the same returned to such Holder. Notwithstanding any
provision herein to the contrary, the Warrant Agent shall not be required to
register shares in the name of any Person who acquired a Warrant (or part
thereof) or any Warrant Stock otherwise than in accordance with such Warrant and
this Warrant Agreement.
Payment of the Warrant Price shall be made at the option of the
Holder by certified or official bank check or any combination thereof, duly
executed by such Holder or by such Holder's attorney duly authorized in writing.
4.2. Payment of Taxes. All shares of Common Stock issuable upon the
exercise of any Warrant pursuant to the terms hereof shall be validly issued,
fully paid and nonassessable and without any preemptive rights. The Company
shall pay any documentary stamp taxes attributable to the initial issuance of
shares of Common Stock issuable upon the exercise of Warrants; provided,
however, that the Company shall not be required to pay any tax or taxes which
may be payable in respect of any transfer involved in the issue or delivery of
any certificates for shares of Common Stock in a name other than that of the
Holder of Warrants in respect of which such shares are issued and the Company
shall not be required to issue and deliver the certificates for such shares
unless and until such Holder has paid to the Company the amount of any tax which
may be payable in respect of any transfer involved in such issuance or delivery
or shall establish to the satisfaction of the Company that all such taxes have
been paid. Other than with respect to such documentary stamp taxes, the Holder
shall pay all expenses in connection with, and all taxes and other governmental
charges that may be imposed with respect to, the issue or delivery of shares of
Common Stock issuable upon the exercise of any Warrant.
4.3. Fractional Shares. The Company shall not be required to issue a
fractional share of Common Stock upon exercise of any Warrant. As to any
fraction of a share which the Holder of one or more Warrants, the rights under
which are exercised in the same transaction, would otherwise be entitled to
purchase upon such exercise, the Company shall pay a cash adjustment in respect
of such final fraction in an amount equal to the same fraction of the average of
the Daily Market Price per share of Common Stock for the 5 consecutive Trading
Days preceding the date of exercise.
5. TRANSFER, DIVISION AND COMBINATION.
5.1. Transfer. Subject to compliance with Section 11, transfer of any
Warrant and all rights hereunder, in whole or in part, shall be registered in
the warrant register of the Company to be maintained for such purpose at the
Warrant Agent's Principal Office, upon surrender of such Warrant at the Warrant
Agent's Principal Office, together with a written assignment of such Warrant
substantially in the form set forth on the reverse side of the form of Warrant
Certificate attached as Exhibit A hereto duly executed by the Holder or its
agent or attorney and payment of all funds sufficient to pay any taxes payable
upon the making of such
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transfer. Upon such surrender and, if required, such payment, and subject to
Section 9, the Company shall execute and the Warrant Agent shall countersign and
deliver a new Warrant or Warrants in the name of the assignee or assignees and
in the denomination specified in such instrument of assignment, and shall issue
to the assignor a new Warrant evidencing the portion of such Warrant not so
assigned, and the surrendered Warrant shall promptly be canceled. A Warrant, if
properly assigned in compliance with Section 11, may be exercised by a new
Holder for the purchase of shares of Common Stock without having a new Warrant
issued.
5.2. Division and Combination. Subject to Section 11, any Warrant may be
divided or combined with other Warrants upon presentation thereof at the Warrant
Agent's Principal Office, together with a written notice specifying the names
and denominations in which new Warrants are to be issued, signed by the Holder
or its agent or attorney. Subject to compliance with Section 5.1 and Section 11,
as to any transfer which may be involved in such division or combination, the
Company shall execute and the Warrant Agent shall countersign and deliver a new
Warrant or Warrants in exchange for the Warrant or Warrants to be divided or
combined in accordance with such notice.
5.3. Maintenance of Books. The Warrant Agent agrees to maintain, at the
Warrant Agent's Principal Office, the warrant register for the registration and
the registration of transfer of the Warrants.
6. ADJUSTMENTS.
The number of shares of Common Stock for which a Warrant is
exercisable, and the price at which such shares may be purchased upon exercise
of a Warrant, shall be subject to adjustment from time to time as set forth in
this Section 6.
6.1. Stock Dividends, Subdivisions and Combinations. If at any time the
Company shall:
(a) pay a dividend or otherwise effect a distribution of Additional
Shares of Common Stock,
(b) subdivide its outstanding shares of Common Stock into a larger
number of shares of Common Stock, or
(c) combine its outstanding shares of Common Stock into a smaller
number of shares of Common Stock,
then (i) the number of shares of Common Stock for which a Warrant is exercisable
immediately after the occurrence of any such event shall be adjusted to equal
the number of shares of Common Stock that a record holder of the same number of
shares of Common Stock for which a Warrant is exercisable immediately prior to
the occurrence of such event would own or be entitled to receive immediately
after the occurrence of such event; and (ii) the Current Warrant Price shall be
concurrently adjusted to equal (A) the Current Warrant Price in
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effect immediately prior to such adjustment multiplied by the number of shares
of Common Stock for which a Warrant is exercisable immediately prior to such
adjustment divided by (B) the number of shares for which a Warrant is
exercisable immediately after such adjustment.
6.2. Certain Distributions. If at any time the Company shall:
(a) distribute to all holders of record of Common Stock
evidences of indebtedness or any shares of capital stock, securities,
property or assets of any nature whatsoever (other than Permitted
Issuances or regularly scheduled cash dividends payable out of earnings or
earned surplus legally available for payment of dividends or any
transaction covered by Section 6.1, 6.3, 6.4 or 6.5), or
(b) distribute to all holders of record of Common Stock
options, warrants or other rights to acquire, subscribe for or purchase
any evidences of indebtedness or any shares of capital stock, securities,
property or assets of any nature whatsoever (other than Permitted
Issuances or options, warrants or other rights covered by Section 6.3
hereof),
then (i) the number of shares of Common Stock for which a Warrant is exercisable
immediately after the occurrence of any such event shall be adjusted to equal
the product obtained by multiplying the number of shares of Common Stock for
which a Warrant is exercisable immediately prior to such adjustment by a
fraction (A) the numerator of which shall be the average of the Daily Market
Price per share of Common Stock for the 5 consecutive Trading Days preceding the
record date for such distribution and (B) the denominator of which shall be such
average Daily Market Price per share of Common Stock minus the amount allocable
to one share of Common Stock of the fair value (as determined in good faith by
the Board of Directors of the Company) of any and all such evidences of
indebtedness, shares of stock, other securities or property or warrants or other
subscription, acquisition or purchase rights so distributed; and (ii) the
Current Warrant Price shall be concurrently reduced to equal (A) the Current
Warrant Price in effect immediately prior to such adjustment multiplied by the
number of shares of Common Stock for which a Warrant is exercisable immediately
prior to such adjustment divided by (B) the number of shares of Common Stock for
which a Warrant is exercisable immediately after such adjustment. A
reclassification of the Common Stock (other than a change in par value, or from
par value to no par value or from no par value to par value) into shares of
Common Stock and shares of any other class of capital stock of the Company shall
be deemed a distribution by the Company to the holders of its Common Stock of
such shares of such other class of stock within the meaning of this Section 6.2
and, if the outstanding shares of Common Stock shall be changed into a larger or
smaller number of shares of Common Stock as a part of such reclassification,
such change shall be deemed a subdivision or combination, as the case may be, of
the outstanding shares of Common Stock within the meaning of Section 6.1
(provided that, in any such case, the adjustment provided for in Section 6.1
shall be effected after the adjustment provided for in this Section 6.2).
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6.3. Issuance of Rights to Purchase Common Stock at Below Daily Market
Price. If at any time the Company shall distribute to all holders of record of
Common Stock options, warrants or other rights to subscribe for or purchase any
Additional Shares of Common Stock or any Convertible Securities (other than
Permitted Issuances or any transaction covered by Section 6.5), whether or not
the rights to exchange, subscribe or convert thereunder are immediately
exercisable, and the consideration per share for which Common Stock is issuable
upon the exercise of such options, warrants or other rights (or, in the case of
options, warrants or other rights to subscribe for or purchase Convertible
Securities, the consideration per share for which Common Stock is issuable upon
the exercise of such options, warrants or other rights and conversion of such
Convertible Securities) shall be less than the average of the Daily Market Price
per share of Common Stock for the 5 consecutive Trading Days immediately prior
to the date of such distribution, then (i) the number of shares of Common Stock
for which a Warrant is exercisable immediately after the occurrence of any such
distribution shall be adjusted to equal the product obtained by multiplying the
number of shares of Common Stock for which a Warrant is exercisable immediately
prior to such distribution by a fraction (A) the numerator of which shall be the
number of shares of Common Stock Outstanding immediately prior to such
distribution plus the total number of Additional Shares of Common Stock issuable
upon the exercise of such options, warrants or other rights (or, in the case of
options, warrants or other rights to subscribe for or purchase Convertible
Securities, issuable upon the exercise of such options, warrants or other rights
and conversion of such Convertible Securities) and (B) the denominator of which
shall be the number of shares of Common Stock Outstanding immediately prior to
such distribution plus the number of shares of Common Stock which the aggregate
consideration to be paid for all such Additional Shares of Common Stock issuable
upon the exercise of such options, warrants or other rights (or, in the case of
options, warrants or other rights to subscribe for or purchase Convertible
Securities, issuable upon the exercise of such options, warrants or other rights
and conversion of such Convertible Securities) would purchase at the average of
the Daily Market Price per share of Common Stock for the 5 consecutive Trading
Days immediately prior to the date of such distribution; and (ii) the Current
Warrant Price shall be concurrently reduced to equal (A) the Current Warrant
Price in effect immediately prior to such adjustment multiplied by the number of
shares of Common Stock for which a Warrant is exercisable immediately prior to
such adjustment divided by (B) the number of shares of Common Stock for which a
Warrant is exercisable immediately after such adjustment. No further adjustments
of the number of shares for which Warrants are exercisable or of the Current
Warrant Price shall be made upon the actual issuance of such Common Stock upon
exercise of such options, warrants or other rights (or the conversion of such
Convertible Securities); provided, however, that in the event any such options,
warrants or other rights to subscribe for or purchase any Additional Shares of
Common Stock or any Convertible Securities are not exercised (or, in the case of
Convertible Securities, are not converted) prior to the respective expiration
dates thereof, then, on each such expiration date, the number of shares of
Common Stock for which a Warrant is exercisable and the Current Warrant Price
shall be readjusted to reverse the adjustment made pursuant to this Section 6.3
in respect of such number(s) of options, warrants or other rights to subscribe
for or purchase any Additional Shares of Common Stock or any Convertible
Securities that were not exercised (or, in the case of Convertible Securities,
were not converted) prior to such expiration date. Notwithstanding anything to
the contrary set forth in
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this Section 6.3, in the event the Company shall distribute any options,
warrants or other rights to purchase any Additional Shares of Common Stock or
any Convertible Securities (other than Permitted Issuances or any transaction
covered by Section 6.5) pursuant to any so-called "poison pill" or shareholders'
rights or similar plan or agreement, the distribution of separate certificates
representing such options, warrants or rights subsequent to their initial
distribution shall be deemed to be the distribution thereof for purposes of this
Section 6.3; provided that the Company may, in lieu of making any adjustment
pursuant to this Section 6.3 upon such a distribution of separate certificates,
make proper provision so that each Holder of Warrants who exercises such
Warrants (or any portion thereof) (A) after such initial distribution but before
such distribution of separate certificates shall be entitled to receive upon
such exercise shares of Common Stock issued with such options, warrants or other
rights and (B) after such distribution of separate certificates and prior to the
expiration, redemption or termination of such options, warrants or other rights
shall be entitled to receive upon such exercise, in addition to the shares of
Common Stock issuable upon such exercise, the same number of such options,
warrants or other rights as would have accompanied such shares of Common Stock
had such Warrants been exercised immediately prior to such distribution of
separate certificates.
6.4. Issuance of Common Stock Below Daily Market Price. If the Company
shall at any time, directly or indirectly, sell or issue shares of Common Stock
(whether originally issued or from the Company's treasury), or options, warrants
or other rights to subscribe for or purchase any Additional Shares of Common
Stock or any Convertible Securities (other than (x) Permitted Issuances and (y)
securities issued in any of the transactions described in Section 6.1, 6.2, 6.3
or 6.5 or issued upon the exercise or conversion of any such securities) for
consideration per share of Common Stock that is less than the average of the
Daily Market Price per share of Common Stock for the 5 consecutive Trading Days
immediately prior to such sale or issuance, then (i) the number of shares of
Common Stock for which a Warrant is exercisable immediately after the occurrence
of any such sale or issuance shall be adjusted to equal the product obtained by
multiplying the number of shares of Common Stock for which a Warrant is
exercisable immediately prior to such sale or issuance by a fraction (A) the
numerator of which shall be the total number of shares of Common Stock
Outstanding immediately after such sale or issuance, and (B) the denominator of
which shall be the sum of the number of shares of Common Stock Outstanding
immediately prior to such sale or issuance plus the number of shares of Common
Stock which the aggregate consideration received for such sale or issuance would
purchase at the average of the Daily Market Price per share of Common Stock for
the 5 consecutive Trading Days immediately prior to the date of such sale or
issuance (for the purpose of such adjustment, the shares of Common Stock that
the holder of any such options, warrants, rights or Convertible Securities shall
be entitled to receive upon the exercise or conversion thereof shall be deemed
to be Outstanding immediately after such sale or issuance, and the consideration
received by the Company therefor shall be deemed to be the consideration
received by the Company for such options, warrants, rights or Convertible
Securities plus the consideration that the holder of any such options, warrants,
rights or Convertible Securities would be required to pay or surrender upon the
exercise or conversion thereof); and (ii) the Current Warrant Price shall be
concurrently reduced to equal (A) the Current Warrant Price in effect
immediately prior to such adjustment multiplied by the number
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of shares of Common Stock for which a Warrant is exercisable immediately prior
to such adjustment divided by (B) the number of shares of Common Stock for which
a Warrant is exercisable immediately after such adjustment. Notwithstanding the
foregoing, in the event any such options, warrants or other rights to subscribe
for or purchase any Additional Shares of Common Stock or any Convertible
Securities are not exercised (or, in the case of Convertible Securities, are not
converted) prior to the respective expiration dates thereof, then, on each such
expiration date, the number of shares of Common Stock for which a Warrant is
exercisable and the Current Warrant Price shall be readjusted to reverse the
adjustment made pursuant to this Section 6.4 in respect of such number(s) of
options, warrants or other rights to subscribe for or purchase any Additional
Shares of Common Stock or any Convertible Securities that were not exercised
(or, in the case of Convertible Securities, were not converted) prior to such
expiration date.
6.5. Reorganization, Reclassification, Merger, Consolidation or
Disposition. In case the Company shall reorganize its capital, reclassify its
capital stock, consolidate or merge with or into another corporation (where the
Company is not the surviving corporation or where there is a change in or
distribution with respect to the Common Stock of the Company), or sell, transfer
or otherwise dispose of all or substantially all its property, assets or
business to another Person, and, pursuant to the terms of such reorganization,
reclassification, merger, consolidation or disposition, shares of common stock
of the successor or acquiring corporation, or any cash, shares of stock or other
securities, property or assets of any nature whatsoever (including warrants or
other subscription or purchase rights) in addition to or in lieu of common stock
of the successor or acquiring corporation ("Other Property") are to be received
by or distributed to the holders of Common Stock of the Company, then each
Holder shall have the right thereafter to receive, upon exercise of a Warrant,
the number of shares of common stock of the successor or acquiring corporation
or of the Company, if it is the surviving corporation, and Other Property
receivable upon or as a result of such reorganization, reclassification, merger,
consolidation or disposition by a holder of the number of shares of Common Stock
for which a Warrant is exercisable immediately prior to such event. In case of
any such reorganization, reclassification, merger, consolidation or disposition,
the successor or acquiring corporation (if other than the Company) shall
expressly assume the due and punctual observance and performance of each and
every covenant and condition of this Warrant Agreement and the Warrants to be
performed and observed by the Company and all the obligations and liabilities
hereunder, subject to such modifications as may be deemed appropriate (as
determined by resolution of the Board of Directors of the Company) in order to
provide for adjustments of shares of the Common Stock for which a Warrant is
exercisable which shall be as nearly equivalent as practicable to the
adjustments provided for in this Section 6. For purposes of this Section 6.5,
"common stock of the successor or acquiring corporation" shall include stock of
such corporation of any class which is not preferred as to dividends or assets
over any other class of stock of such corporation and which is not subject to
redemption and shall also include any evidences of indebtedness, shares of stock
or other securities which are convertible into or exchangeable for any such
stock, either immediately or upon the arrival of a specified date or the
happening of a specified event and any warrants or other rights to subscribe for
or purchase any such stock. The foregoing provisions of this
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Section 6.5 shall similarly apply to successive reorganizations,
reclassifications, mergers, consolidations or dispositions.
6.6. Other Provisions Applicable to Adjustments. The following provisions
shall be applicable to the making of adjustments of the number of shares of
Common Stock for which Warrants are exercisable and the Current Warrant Price
provided for in this Section 6:
(a) Computation of Consideration. To the extent that any Additional
Shares of Common Stock or any Convertible Securities or any options, warrants or
other rights to subscribe for or purchase any Additional Shares of Common Stock
or any Convertible Securities shall be issued for cash consideration, the
consideration received by the Company therefor shall be the amount of the cash
received by the Company therefor, or, if such Additional Shares of Common Stock
or Convertible Securities are offered by the Company for subscription, the
subscription price. To the extent that such issuance shall be for consideration
other than cash, then, except as herein otherwise expressly provided, the amount
of such consideration shall be deemed to be the fair value of such consideration
at the time of such issuance as determined in good faith by the Board of
Directors of the Company. In case any Additional Shares of Common Stock or any
Convertible Securities or any options, warrants or other rights to subscribe for
or purchase such Additional Shares of Common Stock or Convertible Securities
shall be issued in connection with any merger in which the Company issues any
securities, the amount of consideration therefor shall be deemed to be the fair
value, as determined in good faith by the Board of Directors of the Company, of
such portion of the assets and business of the nonsurviving corporation as such
Board in good faith shall determine to be attributable to such Additional Shares
of Common Stock, Convertible Securities, options, warrants or other rights, as
the case may be. The consideration for any Additional Shares of Common Stock
issuable pursuant to any options, warrants or other rights to subscribe for or
purchase the same shall be the consideration received by the Company for issuing
such options, warrants or other rights plus any additional consideration payable
to the Company upon exercise of such options, warrants or other rights. The
consideration for any Additional Shares of Common Stock issuable pursuant to the
terms of any Convertible Securities shall be the consideration received by the
Company for issuing options, warrants or other rights to subscribe for or
purchase such Convertible Securities, plus the consideration paid or payable to
the Company in respect of the subscription for or purchase of such Convertible
Securities, plus the additional consideration, if any, payable to the Company
upon exercise of the right of conversion or exchange in such Convertible
Securities. In case of the issuance at any time of any Additional Shares of
Common Stock or Convertible Securities in payment or satisfaction of any
dividends upon any class of stock other than Common Stock, the Company shall be
deemed to have received for such Additional Shares of Common Stock or
Convertible Securities a consideration equal to the amount of such dividend so
paid or satisfied.
(b) When Adjustments Are to Be Made. The adjustments required by
this Section 6 shall be made whenever and as often as any specified event
requiring an adjustment shall occur, except that any adjustment of the number of
shares of Common Stock for which Warrants are exercisable that would otherwise
be required may be postponed (except in the case of a subdivision or combination
of shares of the Common Stock, as provided for in
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Section 6.1) up to, but not beyond, the date of exercise if such adjustment
either by itself or with other adjustments not previously made adds or subtracts
less than 1% of the shares of Common Stock for which Warrants are exercisable
immediately prior to the making of such adjustment. Any adjustment representing
a change of less than such minimum amount (except as aforesaid) which is
postponed shall be carried forward and made as soon as such adjustment, together
with other adjustments required by this Section 6 and not previously made, would
result in a minimum adjustment or on the date of exercise. For the purpose of
any adjustment, any specified event shall be deemed to have occurred at the
close of business on the date of its occurrence.
(c) Fractional Interests. In computing adjustments under this
Section 6, fractional interests in Common Stock shall be rounded up or down to
the nearest whole share.
6.7. Certain Limitations. Notwithstanding anything herein to the contrary,
the Company agrees not to enter into any transaction which, by reason of any
adjustment hereunder, would cause the Current Warrant Price to be less than the
par value per share of Common Stock.
7. NOTICES TO WARRANT HOLDERS.
7.1. Notice of Adjustments. Whenever the number of shares of Common Stock
for which a Warrant is exercisable, or whenever the price at which a share of
such Common Stock may be purchased upon exercise of the Warrants, shall be
adjusted pursuant to Section 6, the Company shall forthwith prepare a
certificate to be executed by the chief financial officer of the Company setting
forth, in reasonable detail, the event requiring the adjustment and the method
by which such adjustment was calculated, specifying the number of shares of
Common Stock for which a Warrant is exercisable and describing the number and
kind of any other shares of stock or Other Property for which a Warrant is
exercisable, and any change in the purchase price or prices thereof, after
giving effect to such adjustment or change. The Company shall promptly cause a
signed copy of such certificate to be delivered to each Holder in accordance
with Section 16.1. The Company shall keep at its office or agency designated by
the Company pursuant to Section 13 copies of all such certificates and cause the
same to be available for inspection at said office during normal business hours
by any Holder or any prospective purchaser of a Warrant designated by a Holder
thereof.
7.2. Notice of Corporate Action. If at any time
(a) The Company shall take a record of the holders of its Common
Stock for the purpose of entitling them to receive a dividend (other than a
regularly scheduled cash dividend payable out of earnings or earned surplus
legally available for the payment of dividends under the laws of the
jurisdiction of incorporation of the Company) or other distribution, or
(b) there shall be any capital reorganization of the Company, any
reclassification or recapitalization of the capital stock of the Company or any
consolidation or
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merger of the Company with, or any sale, transfer or other disposition of all or
substantially all the property, assets or business of the Company to, another
corporation, or
(c) there shall be a voluntary or involuntary dissolution,
liquidation or winding up of the Company;
then, in any one or more of such cases, the Company shall give to each Holder
(i) prompt written notice of the date on which a record date shall be selected
for such dividend, distribution or right or for determining rights to vote in
respect of any such reorganization, reclassification, merger, consolidation,
sale, transfer, disposition, dissolution, liquidation or winding up, and (ii) in
the case of any such reorganization, reclassification, merger, consolidation,
sale, transfer, disposition, dissolution, liquidation or winding up, at least 10
days' prior written notice of the date when the same shall take place. Such
notice in accordance with the foregoing clause also shall specify (i) the date
on which any such record is taken for the purpose of such dividend, distribution
or right, the date on which the holders of Common Stock shall be entitled to any
such dividend, distribution or right, and the amount and character thereof, and
(ii) the date and time on which any such reorganization, reclassification,
merger, consolidation, sale, transfer, disposition, dissolution, liquidation or
winding up takes place. Each such written notice shall be sufficiently given if
addressed to such Holder at the last address of such Holder appearing on the
books of the Company and delivered in accordance with Section 16.1.
8. NO IMPAIRMENT.
The Company shall not by any action, including, without limitation,
amending its certificate of incorporation or through any reorganization,
transfer of assets, consolidation, merger, dissolution, issue or sale of
securities or any other voluntary action, avoid or seek to avoid the observance
or performance of any of the terms of this Warrant Agreement or any Warrant, but
will at all times in good faith assist in the carrying out of all such terms and
in the taking of all such actions as may be necessary or appropriate to protect
the rights of Holders against impairment. Without limiting the generality of the
foregoing, the Company will (1) not increase the par value of any shares of
Common Stock receivable upon the exercise of a Warrant above the amount payable
therefor upon such exercise immediately prior to such increase in par value, (2)
take all such action as may be necessary or appropriate in order that the
Company may validly and legally issue fully paid and nonassessable shares of
Common Stock upon the exercise of any Warrant and (3) use good faith efforts to
obtain all such authorizations, exemptions or consents from any public
regulatory body having jurisdiction thereof as may be necessary to enable the
Company to perform its obligations under this Warrant Agreement.
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9. RESERVATION AND AUTHORIZATION OF COMMON STOCK; REGISTRATION
WITH OR APPROVAL OF ANY GOVERNMENTAL AUTHORITY.
From and after the Effective Date, the Company shall at all times
reserve and keep available for issue upon the exercise of Warrants such number
of its authorized but unissued shares of Common Stock as will be sufficient to
permit the exercise in full of all outstanding Warrants. All shares of Common
Stock which shall be so issuable, when issued upon exercise of any Warrant and
payment therefor in accordance with the terms of this Warrant Agreement and such
Warrant, shall be duly and validly issued and fully paid and nonassessable, and
not subject to preemptive rights.
Before taking any action which would cause an adjustment reducing
the Current Warrant Price below the then par value, if any, of the shares of
Common Stock issuable upon exercise of the Warrants, the Company shall take any
corporate action which may be necessary in order that the Company may validly
and legally issue fully paid and nonassessable shares of such Common Stock at
such adjusted Current Warrant Price.
The Company shall use reasonable good faith efforts to cooperate
with each Holder of a Warrant and each holder of Common Stock in supplying such
information as may be reasonably requested by such holder for such holder to
complete and file any information or reporting forms currently or hereafter
required by the Securities and Exchange Commission as a condition to the
availability of an exemption from the Securities Act for the sale of any Warrant
or Common Stock.
The Company shall file all reports required to be filed by it under
the Securities Act and the Securities Exchange Act of 1934, as amended, and the
rules and regulations adopted by the Securities and Exchange Commission
thereunder, and will use commercially reasonable efforts to take such further
action as any Holder may reasonably request to enable such Holder to sell
Warrant Stock pursuant to Rule 144 or Rule 144A adopted by the Securities and
Exchange Commission under the Securities Act. The Company shall send or make
available to each Holder copies of such annual, quarterly or current reports,
proxy statements and other reports and documents sent or made available by the
Company to its stockholders at the same time these reports, statements or
documents are sent or made available to the stockholders.
10. TAKING OF RECORD; STOCK AND WARRANT TRANSFER BOOKS.
In the case of all dividends or other distributions by the Company
to the holders of its Common Stock with respect to which any provision of
Section 6, if any, refers to the taking of a record of such holders, the Company
will in each such case take such a record and will take such record as of the
close of business on a Business Day. The Company will not at any time, except
upon dissolution, liquidation or winding up of the Company, close its stock
transfer books or Warrant transfer books so as to result in preventing or
delaying the exercise or transfer of any Warrant.
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11. RESTRICTIONS ON TRANSFERABILITY.
The Warrants and the Warrant Stock shall not be transferred,
hypothecated or assigned before satisfaction of the applicable conditions, if
any, specified by Section 11.1. All Holders, by their acceptance of a Warrant,
agree to be bound by the provisions of this Section 11.
11.1. Restrictive Legend. All certificates representing Warrants shall be
stamped or otherwise imprinted with a legend in substantially the following form
with respect to any Holder who cannot certify that it is not an Insider (to the
extent such certification is required by the Plan):
"THIS WARRANT AND THE WARRANT STOCK (AS DEFINED HEREIN) HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY
APPLICABLE STATE SECURITIES LAWS, AND ARE SUBJECT TO THE PROVISIONS
(INCLUDING THE RESTRICTIONS ON TRANSFER) SET FORTH IN THE WARRANT
AGREEMENT BETWEEN EDISON BROTHERS STORES, INC. AND __________, AS
WARRANT AGENT, DATED ______ __, 1997. THIS WARRANT AND THE WARRANT
STOCK MAY NOT (AND THE HOLDER OF THIS CERTIFICATE, BY ACCEPTANCE OF
THIS CERTIFICATE, AGREES THAT THIS WARRANT AND THE WARRANT STOCK MAY
NOT AND WILL NOT) BE SOLD OR OTHERWISE TRANSFERRED, PLEDGED, OR
HYPOTHECATED UNLESS AND UNTIL SUCH RESTRICTIONS ARE COMPLIED WITH
AND SUCH WARRANTS AND THE WARRANT STOCK ARE REGISTERED UNDER SUCH
ACT, AND SUCH STATE LAW, OR AN OPINION OF COUNSEL SATISFACTORY TO
THE COMPANY IS OBTAINED TO THE EFFECT THAT SUCH REGISTRATION IS NOT
REQUIRED."
12. LOSS OR MUTILATION.
Upon receipt by the Company and the Warrant Agent from any Holder of
evidence reasonably satisfactory to them of the ownership of and the loss,
theft, destruction or mutilation of such Holder's Warrant and indemnity
reasonably satisfactory to them, and in case of mutilation upon surrender and
cancellation thereof, the Company will execute and the Warrant Agent will
countersign and deliver in lieu hereof a new Warrant of like tenor to such
Holder; provided, in the case of mutilation, no indemnity shall be required if
such Warrant in identifiable form is surrendered to the Company or the Warrant
Agent for cancellation.
13. OFFICE OF COMPANY.
As long as any of the Warrants remain outstanding, the Company shall
maintain an office or agency (which may be the principal executive offices of
the Company) where the Warrants may be presented for exercise, registration of
transfer, division or combination as
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provided in this Warrant Agreement. The Company shall initially maintain such an
agency at the Warrant Agent's Principal Offices. The Company shall promptly
notify each Holder of any change in such office or agency.
14. REPURCHASE BY COMPANY OF WARRANTS.
14.1. Option to Repurchase Warrants. If the Daily Market Price for Common
Stock exceeds 200% of the Current Warrant Price on any 10 Trading Days (whether
or not consecutive) during any period of 15 consecutive Trading Days (the
"Pricing Period"), the Company shall have the right, upon prior written notice
to any Holder (which shall be delivered no later than 20 days following the end
of the applicable Pricing Period or, if such day is not a Business Day, the next
succeeding Business Day), to repurchase from such Holder, from any source of
funds legally available therefor, on the 45th day following delivery of such
notice (or, if such day is not a Business Day, the next succeeding Business Day)
and in the manner set forth in Section 14.2 below, each Warrant then held by
such Holder for an amount equal to one dollar ($1.00) (the "Repurchase Price");
provided, however, that nothing herein shall preclude the exercise by such
Holder of any portion of such Warrant exercisable at any time prior to such
repurchase.
14.2. Payment of Repurchase Price. On the date of any repurchase of
Warrants pursuant to this Section 14, each Holder shall assign to Company such
Holder's Warrant being repurchased, without any representation or warranty, by
the surrender of such Holder's Warrant to the Company at the Warrant Agent's
Principal Office against payment therefor of the Repurchase Price by check
issued by the Company.
15. WARRANT AGENT.
15.1. 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
corporate trust business of the Warrant Agent, shall be the successor to the
Warrant Agent hereunder without the execution or filing of any paper or any
further act on the part of any of the parties hereto; provided that such
corporation must be eligible for appointment as a successor Warrant Agent under
the provisions of Section 15.3 hereof. If at the time such successor to the
Warrant Agent shall succeed to the agency created by this Warrant 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 predecessor
Warrant Agent and deliver such Warrants so countersigned; and if 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 Warrants shall have the full force provided in the Warrants and
in this Warrant Agreement. If 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 such Warrants so countersigned;
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and if 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 Warrant Agreement.
15.2. Certain Terms and Conditions Concerning the Warrant Agent. The
Warrant Agent undertakes the duties and obligations imposed by this Warrant
Agreement upon the following terms and conditions, by all of which the Company
and the Holders, by their acceptance of Warrants, shall be bound:
(a) Correctness of Statements. 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.
(b) Breach of Covenants. The Warrant Agent shall not be
responsible for any failure of the Company to comply with any of the covenants
contained in this Warrant Agreement or in the Warrants to be complied with
specifically by the Company.
(c) Performance of Duties. 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 shall not be responsible for the misconduct or
negligence of any agent appointed with due care.
(d) Reliance on Counsel. The Warrant Agent may consult at any
time with legal counsel satisfactory to it (who may be counsel for 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 provided that such counsel shall have been selected with due care.
(e) Proof of Actions Taken. Whenever in the performance of its
duties under this Warrant 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
conclusively to be proved and established by a certificate signed by the
President, the Chief Financial Officer 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 Warrant Agreement in reliance upon such certificate.
(f) Compensation. The Company agrees to pay the Warrant Agent
reasonable compensation as set forth in the fee schedule attached hereto as
Exhibit B for all services rendered by the Warrant Agent in the performance of
its duties under this Warrant
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Agreement, to reimburse the Warrant Agent for all expenses, taxes and
governmental charges and other charges of any kind and nature incurred by the
Warrant Agent in the performance of its duties under this Warrant Agreement, and
to indemnify the Warrant Agent and save it harmless against any and all
liabilities, including judgments, costs and counsel fees, for anything done or
omitted by the Warrant Agent in the performance of its duties under this Warrant
Agreement except as a result of the Warrant Agent's negligence or bad faith.
(g) Legal Proceedings. 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 that 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 Warrant 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.
(h) Other Transactions in Securities of the Company. 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 Warrant
Agreement. Nothing herein shall preclude the Warrant Agent from acting in any
other capacity for the Company or for any other legal entity.
(i) Liability of Warrant 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 Warrant Agreement except
for its own negligence or bad faith.
(j) Reliance on Documents. The Warrant Agent will not incur
any liability or responsibility to the Company or to any Holder 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.
(k) Validity of Agreements. The Warrant Agent shall not be
under any responsibility in respect of the validity of this Warrant 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 and delivery 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 Stock (or other
20
<PAGE>
stock) to be issued pursuant to this Warrant Agreement or any Warrant, or as to
whether any Warrant Stock (or other stock) will, when issued, be validly issued,
fully paid and nonassessable, or as to the Warrant Price or the number or amount
of Warrant Stock or other securities or other property issued upon exercise of
any Warrant.
(l) 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 President, the Chief Financial Officer 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 officer or officers.
15.3. Change of Warrant Agent. The Warrant Agent may resign and be
discharged from its duties under this Warrant Agreement by giving to the Company
30 days' advance 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 30 days after such removal or after it has been
notified in writing of such resignation or incapacity by the resigning or
incapacitated Warrant Agent, then any Holder may apply to the Court for the
appointment of a successor to the Warrant Agent. Pending the appointment of the
successor warrant agent, the Company shall perform the duties of the Warrant
Agent. Any successor warrant agent, whether appointed by the Company or the
Court, shall be 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 $50,000,000. 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 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 execute and deliver any
further assurance, conveyance, act or deed necessary for the purpose. Failure to
give any notice provided for in this Section 15.3, 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 shall mail, first class, to each Holder, written notice of such removal or
resignation and the name and address of such successor warrant agent.
15.4. Disposition of Proceeds on Exercise of Warrants, Inspection of
Warrant Agreement. The Warrant Agent shall account promptly to the Company with
respect to Warrants exercised and concurrently pay to the Company all
immediately available funds and any other consideration received by the Warrant
Agent for the purchase of the Warrant Stock through the exercise of such
Warrants. The Warrant Agent shall, upon request of the Company from time to
time, deliver to the Company such complete reports of registered ownership of
the Warrants and such complete records or transactions with respect to the
Warrants and the shares of Common Stock as the Company may request. The Warrant
Agent
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shall also make available to the Company for inspection by the Company's agents
or employees, from time to time as the Company may request, such original books
of accounts and records maintained by the Warrant Agent in connection with the
issuance and exercise of Warrants hereunder, such inspections to occur at the
Warrant Agent's Principal Office. The Warrant Agent shall keep copies of this
Warrant Agreement and any notices given or received hereunder available for
inspection by the Company or the Holders at the Warrant Agent's Principal
Office. The Company shall supply the Warrant Agent from time to time with such
numbers of copies of this Warrant Agreement as the Warrant Agent may request.
16. MISCELLANEOUS.
16.1. Limitation of Liability. No provision hereof, in the absence of
affirmative action by a Holder to purchase shares of Common Stock, and no
enumeration herein of the rights or privileges of a Holder, shall impose on any
such Holder an obligation to purchase any Common Stock or any liability as a
stockholder of the Company, whether such obligation or liability is asserted by
the Company or by creditors of the Company.
16.2. Notice Generally. Any notice, demand, request, consent, approval,
declaration, delivery or other communication hereunder to be made pursuant to
the provisions of this Warrant Agreement shall be sufficiently given or made if
in writing and either delivered in person with receipt acknowledged or sent by
registered or certified mail, return receipt requested, postage prepaid, or by
telecopy and confirmed by telecopy answerback, addressed as follows:
(a) If to any Holder or holder of Warrant Stock, at its last
known address appearing on the warrant register of the Company
maintained for such purpose.
(b) If to Company at
Edison Brothers Stores, Inc.
501 North Broadway
St. Louis, Missouri 63102
Attention: Alan A. Sachs
Telecopy Number: (314) 331-6554
(c) If to Warrant Agent at
[To come]
Attention: ____________
Telecopy Number: _______________
or at such other address as may be substituted by notice given as herein
provided. The giving of any notice required hereunder may be waived in writing
by the party entitled to receive such notice. Every notice, demand, request,
consent, approval, declaration, delivery or other
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<PAGE>
communication hereunder shall be deemed to have been duly given or served on the
date on which personally delivered, with receipt acknowledged, telecopied and
confirmed by telecopy answerback or three Business Days after the same shall
have been deposited in the United States mail (by registered or certified mail,
return receipt requested, postage prepaid), whichever is earlier.
16.3. Successors and Assigns. All covenants and provisions of this Warrant
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.
16.4. Amendment. This Warrant Agreement and the Warrants may be modified
or amended or the provisions hereof and thereof waived with the written consent
of the Company, the Warrant Agent and the Majority Holders, provided that no
Warrant may be modified or amended to reduce the number of shares of Common
Stock for which such Warrant is exercisable or to increase the price at which
such shares may be purchased upon exercise of such Warrant (before giving effect
to any adjustment as provided herein and therein) without the prior written
consent of the Holder thereof.
16.5. Severability. Wherever possible, each provision of this Warrant
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Warrant Agreement shall be
prohibited by or invalid under applicable law, such provision shall be
ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this
Warrant Agreement.
16.6. Headings. The headings used in this Warrant Agreement are for the
convenience of reference only and shall not, for any purpose, be deemed a part
of this Warrant Agreement.
16.7. Governing Law. THIS WARRANT AGREEMENT AND THE WARRANTS SHALL BE
GOVERNED BY THE LAWS OF THE STATE OF DELAWARE, WITHOUT REGARD TO THE PROVISIONS
THEREOF RELATING TO CONFLICT OF LAWS.
16.8. Counterparts. This Warrant 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.
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<PAGE>
IN WITNESS WHEREOF, each of the Company and the Warrant Agent has
caused this Warrant Agreement to be duly executed by its duly authorized
officers as of the date first above written.
EDISON BROTHERS STORES, INC.
By:
------------------------------
Name:
------------------------------
Title:
------------------------------
, as Warrant Agent
------------
By:
------------------------------
Name:
------------------------------
Title:
------------------------------
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EXHIBIT A
[FORM OF FACE OF WARRANT CERTIFICATE]
[NOTE: THE FOLLOWING LEGEND WILL BE ADDED ON WARRANTS OF ANY HOLDER WHO
CANNOT CERTIFY THAT IT IS NOT AN INSIDER:
"THIS WARRANT AND THE WARRANT STOCK (AS DEFINED HEREIN) HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY APPLICABLE
STATE SECURITIES LAWS, AND ARE SUBJECT TO THE PROVISIONS (INCLUDING THE
RESTRICTIONS ON TRANSFER) SET FORTH IN THE WARRANT AGREEMENT BETWEEN
EDISON BROTHERS STORES, INC. AND ___________, AS WARRANT AGENT, DATED
__________ , 1997. THIS WARRANT AND THE WARRANT STOCK MAY NOT (AND THE
HOLDER OF THIS CERTIFICATE, BY ACCEPTANCE OF THIS CERTIFICATE, AGREES THAT
THIS WARRANT AND THE WARRANT STOCK MAY NOT AND WILL NOT) BE SOLD OR
OTHERWISE TRANSFERRED, PLEDGED, OR HYPOTHECATED UNLESS AND UNTIL SUCH
RESTRICTIONS ARE COMPLIED WITH AND SUCH WARRANTS AND THE WARRANT STOCK ARE
REGISTERED UNDER SUCH ACT, AND SUCH STATE LAW, OR AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY IS OBTAINED TO THE EFFECT THAT SUCH
REGISTRATION IS NOT REQUIRED."]
EDISON BROTHERS STORES, INC.
Warrant to purchase Common Stock, par value $0.01
per share, of Edison Brothers Stores, Inc.
- --------------------------------------------------------------------------------
Warrant Certificate No.: Number of Warrants:
CUSIP No.
- --------------------------------------------------------------------------------
See Reverse for Certain Definitions
Exercisable from and after ____________, until 5:00 p.m. ________,
__________, time on _________, ____.
This Warrant Certificate certifies that ____________________, or
registered assigns, is the registered holder of the number of Warrants set forth
above, expiring at 5:00 p.m., ___________ , time, on ________ ___, ________ or,
if such date is not a Business Day, the next succeeding Business Day (the
"Warrants"), to purchase Common Stock, par value $0.01 per share (the
25
<PAGE>
"Common Stock"), of Edison Brothers Stores, Inc., a Delaware corporation (the
"Company"). The Common Stock issuable upon exercise of Warrants is hereinafter
referred to as the "Warrant Stock." Subject to the immediately succeeding
paragraph, each Warrant entitles the holder upon exercise to purchase from the
Company on or before 5:00 p.m., _____, ____ time, on _____ __, _____or, if such
date is not a Business Day, the next succeeding Business Day, _______ shares of
Common Stock, subject to adjustment as set forth herein and in the Warrant
Agreement dated as of _________, (the "Warrant Agreement") by and between the
Company and ___________, a _______ corporation, as warrant agent (the "Warrant
Agent"), in whole or in part, at the initial purchase price of $16.40 per share,
on and subject to the terms and conditions set forth herein and in the Warrant
Agreement. Such purchase shall be payable in lawful money of the United States
of America by certified or official bank check or any combination thereof to the
order of the Warrant Agent for the account of the Company at the principal
office of the Warrant Agent, subject to the conditions set forth herein and in
the Warrant Agreement. The number of shares of Common Stock for which each
Warrant is exercisable, and the price at which such shares may be purchased upon
exercise of each Warrant, are subject to adjustment upon the occurrence of
certain events as set forth in the Warrant Agreement. Whenever the number of
shares of Common Stock for which a Warrant is exercisable, or the price at which
a share of such Common Stock may be purchased upon exercise of the Warrants, is
adjusted pursuant to the Warrant Agreement, the Company shall cause to be given
to each of the registered holders of the Warrants at such holders' addresses
appearing on the Warrant register written notice of such adjustment by first
class mail postage pre-paid.
No Warrant may be exercised before _____ p.m., _______, ________ time, on
, _______, or after 5:00 p.m., ________, ______ time, on ________, _____ or, if
such date is not a Business Day, the next succeeding Business Day, and to the
extent not exercised by such time such Warrants shall become void.
Reference is hereby made to the further provisions of this Warrant
Certificate set forth on the reverse side hereof and such further provisions
shall for all purposes have the same effect as though fully set forth at this
place.
This Warrant Certificate shall not be valid unless countersigned by the
Warrant Agent.
THIS WARRANT CERTIFICATE SHALL BE GOVERNED BY THE LAWS OF THE STATE OF
DELAWARE, WITHOUT REGARD TO THE PROVISIONS THEREOF RELATING TO CONFLICT OF LAWS.
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<PAGE>
IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to be
signed by its President and has caused its corporate seal to be affixed hereunto
or imprinted hereon.
Dated:
(Seal)
Attest: EDISON BROTHERS STORES, INC.
By:
---------------------------------
Name: Name:
------------------------- ---------------------------------
Title: Secretary Title: President
COUNTERSIGNED:
, as Warrant Agent
----------------
By:
---------------------------------
Name:
---------------------------------
Title:
---------------------------------
[Authorized Signature]
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<PAGE>
[FORM OF REVERSE OF WARRANT CERTIFICATE]
The Warrants evidenced by this Warrant Certificate are part of a duly
authorized issue of up to ___ Warrants expiring at 5:00 p.m., ______ , _______
time, on _____ __ , ____ or, if such date is not a Business Day, the next
succeeding Business Day, entitling the holder on exercise to purchase shares of
Common Stock, par value $0.01 per share, of the Company, and are issued or to be
issued pursuant to the Warrant Agreement, which Warrant Agreement is hereby
incorporated by reference in and made a part of this instrument and is hereby
referred to for a description of the rights, limitation of rights, obligations,
duties and immunities thereunder of the Warrant Agent, the Company and the
Holders (the words "Holders" or "Holder" meaning the registered holders or
registered holder of the Warrants). A copy of the Warrant Agreement may be
obtained by the Holder hereof upon written request to the Company.
Warrants may be exercised at any time on and after ___ p.m., _________,
______ time, on _____ __, ____ and on or before 5:00 p.m., _____ __, ____ time,
on ______, _____ or, if such date is not a Business Day, the next succeeding
Business Day. The Holder of Warrants evidenced by this Warrant Certificate may
exercise them by surrendering this Warrant Certificate, with the form of
election to purchase set forth hereon properly completed and executed, together
with payment of the purchase price by certified or official bank check or any
combination thereof to the order of the Warrant Agent for the account of the
Company and the other required documentation. In the event that upon any
exercise of Warrants evidenced hereby the number of Warrants exercised shall be
less than the total number of Warrants evidenced hereby, there shall be issued
to the Holder hereof or his assignee a new Warrant Certificate evidencing the
number of Warrants not exercised.
The Warrant Agreement provides that the number of shares of Common Stock
for which each Warrant is exercisable, and the price at which such shares may be
purchased upon exercise of each Warrant, are subject to adjustment upon the
occurrence of certain events as set forth in the Warrant Agreement. The Company
shall not be required to issue any fractional share of Common Stock upon the
exercise of any Warrant, but the Company shall pay the cash value thereof
determined as provided in the Warrant Agreement.
Warrant Certificates, when surrendered at the office of the Warrant Agent
by the registered Holder thereof in person or by legal representative or
attorney duly authorized in writing, may be exchanged, in the manner and subject
to the limitations provided in the Warrant Agreement, but without payment of any
service charge, for another Warrant Certificate or Warrant Certificates of like
tenor evidencing in the aggregate a like number of Warrants.
Upon due presentation for registration of transfer of this Warrant
Certificate at the office of the Warrant Agent a new Warrant Certificate or
Warrant Certificates of like tenor and evidencing in the aggregate a like number
of Warrants shall be issued to the transferee in exchange for this Warrant
Certificate, subject to the limitations provided in the Warrant Agreement
without charge except for any tax imposed in connection therewith.
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<PAGE>
[ELECTION TO PURCHASE FORM]
[To be executed only upon exercise of Warrant]
The undersigned registered owner of this Warrant irrevocably
exercises this Warrant for the purchase of ______ Shares of Common Stock of
EDISON BROTHERS STORES, INC. and herewith makes payment therefor, all at the
price and on the terms and conditions specified in this Warrant and the Warrant
Agreement and requests that certificates for the shares of Common Stock hereby
purchased (and any securities or other property issuable upon such exercise) be
issued in the name of and delivered to _____________ whose address is
_________________ and, if such shares of Common Stock shall not include all of
the shares of Common Stock issuable as provided in this Warrant, that a new
Warrant of like tenor and date for the balance of the shares of Common Stock
issuable hereunder be delivered to the undersigned.
-------------------------------
(Name of Registered Owner)
-------------------------------
(Signature of Registered Owner)
-------------------------------
(Street Address)
-------------------------------
(City) (State) (Zip Code)
NOTICE: The signature on this election to purchase must correspond with the
name as written upon the face of the within Warrant in every
particular, without alteration or enlargement or any change
whatsoever.
29
<PAGE>
[ASSIGNMENT FORM]
FOR VALUE RECEIVED the undersigned registered owner of this Warrant
hereby sells, assigns and transfers unto the Assignee named below all of the
rights of the undersigned under this Warrant, with respect to the number of
shares of Common Stock set forth below:
Name and Address of Assignee No. of Shares of Common Stock
- ---------------------------- -----------------------------
and does hereby irrevocably constitute and appoint _______ ________________
attorney-in-fact to register such transfer on the books of EDISON BROTHERS
STORES, INC. maintained for the purpose, with full power of substitution in the
premises.
Dated:____________________ Print Name:
---------------------------------
Signature:
---------------------------------
Witness:
---------------------------------
NOTICE: The signature on this assignment must correspond with the name as
written upon the face of the within Warrant in every particular,
without alteration or enlargement or any change whatsoever.
30
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EXHIBIT B
,
-------------------------
as Warrant Agent
Schedule of Fees
----------------
31
