<PAGE>
WARRANT
THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, OR ANY STATE SECURITIES LAWS. THIS WARRANT HAS BEEN
ACQUIRED FOR INVESTMENT AND MAY NOT BE SOLD, ASSIGNED, PLEDGED,
HYPOTHECATED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF A PRIOR
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR A PRIOR OPINION OF COUNSEL TO THE COMPANY OR SUCH OTHER
COUNSEL AS SHALL BE REASONABLY SATISFACTORY TO THE COMPANY STATING THAT
REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR STATE SECURITIES LAWS.
SOULFOOD CONCEPTS, INC.
A Delaware Corporation
WARRANT TO PURCHASE 188,241 SHARES OF COMMON STOCK,
PAR VALUE $.003 PER SHARE
VOID AFTER 5:00 P.M. EASTERN TIME ON JULY 31, 2003
This certifies that, for value received, Commonwealth Associates (the
"Warrant Holder"), is entitled, subject to the terms and conditions hereof, to
purchase from Soulfood Concepts, Inc. (the "Company"), at any time or from time
to time subject to the vesting provisions of Section 1(b) below, but in any
event, on or before July 31, 2003, up to 188,241 shares of common stock of the
Company, par value $.003 per share ("Common Stock"), at an exercise price of
$.01 per share, subject to adjustment as hereinafter provided (the "Exercise
Price"), and to receive a certificate or certificates for the Common Stock so
purchased pursuant to and subject to the terms and conditions set forth below.
This Warrant is being purchased pursuant to the Agreement
dated February 10, 1997 between the Warrant Holder and the Company.
1. (a) This Warrant may be exercised in whole or in part at
any time, or from time to time, subject to the vesting provisions of Section
1(b) below, by delivery and surrender to the Company, subject to Section 2
below, of this Warrant and a subscription form substantially similar to that
attached to this Warrant as Exhibit A duly executed by the Warrant Holder at the
offices of the Company at 630 Ninth Avenue, Suite 310, New York, New York 10036,
accompanied by payment in full, in lawful money of the United States, or by
certified or bank check, or postal or express money order payable in United
States dollars to the order of the Company, of the Exercise Price for each share
of Common Stock as to which this Warrant is being exercised on or before 5:00
P.M. Eastern time on July 31, 2003, after which time this Warrant shall be void.
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<PAGE>
(b) This Warrant shall vest at the rate of thirty-three and
one third percent (33 1/3%) on each vesting date indicated below and may be
exercised by the Warrant Holder with respect to the Common Stock as follows:
<TABLE>
<CAPTION>
Percentage
Exercisable of Exercise
Vesting Date: Total Option Grant Price Per Share
------------ ------------------ ---------------
<S> <C> <C>
July 31, 1999 33 1/3% (62,747) Shares $ .01
July 31, 2000 33 1/3% (62,747) Shares $ .01
January 31, 2001 33 1/3% (62,747) Shares $ .01
</TABLE>
2. (a) Upon the exercise of this Warrant, in full, the Company shall,
or shall direct its transfer agent to, issue to the Warrant Holder certificates
for the total number of shares of Common Stock issuable on the date of such
exercise pursuant to the terms of this Warrant in such denominations as are
required by the Warrant Holder, and the Company shall, or shall direct its
transfer agent to, thereupon deliver such certificates to or in accordance with
the instructions of the Warrant Holder.
(b) In the event that the Warrant Holder shall exercise this Warrant
with respect to less than all of the shares of Common Stock that may be
purchased under the terms of this Warrant, the Company shall, or shall direct
its transfer agent to, issue to the Warrant Holder certificates for the shares
of Common Stock for which this Warrant is being exercised in such denominations
as are required for delivery to the Warrant Holder, and the Company shall, or
shall direct its transfer agent to, thereupon deliver such certificates to or in
accordance with the instructions of the Warrant Holder, and the Company shall
issue to the Warrant Holder a new Warrant, duly executed by the Company, in form
and substance identical to this Warrant for the balance of the shares of Common
Stock then issuable pursuant to the terms of this Warrant.
(c) Notwithstanding anything to the contrary contained herein,
neither the Company nor its transfer agent shall be required to issue any
fraction of a share of Common Stock in connection with the exercise of this
Warrant, and the Company shall, upon exercise of this Warrant in whole or in
part, issue the largest number of whole shares of Common Stock to which this
Warrant is entitled upon such full or partial exercise and shall return to the
Warrant Holder the amount of the Exercise Price paid by the Warrant Holder in
respect of any fractional share.
3. The Warrant Holder, as such, shall not be entitled to vote or
receive dividends or be deemed the holder of shares of Common Stock for any
purpose, nor shall anything contained in this Warrant be construed to confer
upon the Warrant Holder, as such, any of the rights of a shareholder of the
Company including, without limitation, any right to vote, give or
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<PAGE>
withhold consent to any action by the Company (whether upon the
recapitalization, issue of stock, reclassification of stock, consolidation,
merger, conveyance or otherwise), receive notice of meetings or other action
affecting shareholders, receive dividends or subscription rights, or otherwise,
until this Warrant shall have been exercised; provided, however, that any
exercise of this Warrant, in whole or in part, on any date when the stock
transfer books of the Company shall be closed shall constitute the person or
persons in whose name or names the certificate or certificates for such shares
of Common Stock are to be issued as the record holder or holders thereof for all
purposes at the opening of business on the next succeeding day on which such
stock transfer books are open (the "Opening Date"), and this Warrant shall not
be deemed to have been exercised, in whole or in part, as the case may be, until
the Opening Date for the purpose of determining entitlement to dividends on the
Common Stock, and that the Exercise Price of this Warrant shall be the Exercise
Price in effect at the Opening Date.
4. The Exercise Price shall be subject to adjustment as follows:
(a) In case the Company shall, after the date hereof, (i) pay a
stock dividend or make a distribution in shares of its capital stock (whether
shares of its Common Stock or of capital stock of any other class), (ii)
subdivide its outstanding shares of Common Stock, (iii) combine its outstanding
shares of Common Stock into a smaller number of shares, or (iv) issue by
reclassification of its shares of Common Stock any shares of capital stock of
the Company, the Exercise Price in effect immediately prior to such action shall
be adjusted so that the holder of this Warrant thereafter surrendered for
exercise shall be entitled to receive an equivalent number of shares of capital
stock of the Company which he would have owned immediately following such action
had this Warrant been exercised immediately prior thereto. Any adjustment made
pursuant to this subsection (a) shall become effective immediately after the
record date in the case of a dividend or distribution and shall become effective
immediately after the effective date in the case of a subdivision, combination
or reclassification.
(b) Whenever the Exercise Price is adjusted as provided in Section
4(a) herein, the Company will promptly mail to the Warrant Holder a certificate
of the Company's Treasurer or Chief Financial Officer setting forth the Exercise
Price as so adjusted and a brief statement of facts accounting for such
adjustment.
(c) Irrespective of any adjustment or change in the Exercise Price
and the number of shares actually purchasable under this Warrant, this Warrant
may continue to express the Exercise Price per share as expressed upon this
Warrant when initially issued.
5. (a) In case of any consolidation with or merger of the Company with
or into another corporation (other than a merger or consolidation in which the
Company is the surviving or continuing corporation), or in case of any sale,
lease or conveyance to another corporation of the property and assets of any
nature of the Company as an entirety or substantially
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<PAGE>
as an entirety, such successor, leasing, or purchasing corporation, as the case
may be, shall (i) execute with the Warrant Holder an agreement providing that
the Warrant Holder shall have the right thereafter to receive upon exercise or
conversion of this Warrant solely the kind and amount of shares of stock and
other securities, property, cash, or any combination thereof receivable upon
such consolidation, merger, sale, lease, or conveyance by a holder of the number
of shares of Common Stock for which this Warrant might have been exercised
immediately prior to such consolidation, merger, sale, lease, or conveyance
(including shares of Common Stock as to which this Warrant may become
exercisable in the future). Such agreement shall provide for adjustments which
shall be as nearly equivalent as practicable to the adjustments in Section 4.
(b) In case of any reclassification or change of the shares of Common
Stock issuable upon exercise of this Warrant (other than a change in par value
or from no par value to a specific par value, or as a result of a subdivision or
combination, but including any change in the shares into two or more classes or
series of shares), or in case of any consolidation or merger of another
corporation into the Company in which the Company is the continuing corporation
and in which there is a reclassification or change (including a change to the
right to receive cash or other property) of the shares of Common Stock (other
than a change in par value, or from no par value to a specified par value, or as
a result of a subdivision or combination, but including any change in the shares
into two or more classes or series of shares), the Warrant Holder shall have the
right thereafter to receive upon exercise of this Warrant solely the kind and
amount of shares of stock and other securities, property, cash, or any
combination thereof receivable upon such reclassification, change,
consolidation, or merger by a holder of the number of shares of Common Stock for
which this Warrant might have been exercised immediately prior to such
reclassification, change, consolidation, or merger (including shares of Common
Stock as to which this Warrant may become exercisable in the future).
Thereafter, appropriate provision shall be made for adjustments which shall be
as nearly equivalent as practicable to the adjustments in Section 4.
(c) The above provisions of this Section 5 shall similarly apply to
successive reclassifications and changes of shares of Common Stock and to
successive consolidations, mergers, sales, leases, or conveyances.
(d) In case at any time the Company shall propose
(i) to pay any dividend or make any distribution on shares of
Common Stock in shares of Common Stock or make any other distribution (other
than regularly scheduled cash dividends which are not in a greater amount per
share than the most recent such cash dividend) to all holders of Common Stock;
or
(ii) to issue any rights, warrants, or other securities to all
holders of Common Stock entitling them to purchase any additional shares of
Common Stock or any other rights, warrants, or other securities; or
4
<PAGE>
(iii) to effect any reclassification or change of outstanding
shares of Common Stock, or any consolidation, merger, sale or lease of
substantially all of the assets, of the Company;
(iv) to effect any liquidation, dissolution, or winding-up of the
Company.
then, and in any one or more of such cases, the Company shall give written
notice thereof, by regular mail, postage prepaid, to the Holder at the Holder's
address as it shall appear in the Warrant Register, mailed at least 10 days
prior to (i) the date as of which the holders of record of shares of Common
Stock to be entitled to receive any such dividend, distribution, rights,
warrants, or other securities are to be determined, (ii) the date on which any
such reclassification, change of outstanding shares of Common Stock,
consolidation, merger, sale, lease, conveyance of property, liquidation,
dissolution, or winding-up is expected to become effective, and the date as of
which it is expected that holders of record of shares of Common Stock shall be
entitled to exchange their shares for securities or other property, if any,
deliverable upon such reclassification, change of outstanding shares,
consolidation, merger, sale, lease, conveyance of property, liquidation,
dissolution, or winding-up.
6. If this Warrant is lost, stolen or destroyed, the Company
shall, subject to such reasonable terms as to indemnity as are commonly imposed
in respect of warrants which are not registered pursuant to the Act, issue a new
Warrant of like denomination and tenor as, and in substitution for, the Warrant
so lost, stolen or destroyed, and in the event this Warrant shall be mutilated,
the Company shall, upon the surrender hereof, issue a new Warrant of like
denomination and tenor as, and in substitution for, the Warrant so mutilated.
7. Notwithstanding anything to the contrary contained in this
Warrant, this Warrant and the shares of Common Stock underlying this Warrant may
not be sold, assigned or transferred at any time, in any manner or by any person
or entity unless this Warrant and such shares, as the case may be, are
registered pursuant to the Securities Act of 1933, as amended (the "Act"), and
under applicable state securities laws or an exemption from the Act and such
state securities laws is available in respect of the Warrant and such shares for
such sale, assignment or transfer, as the case may be. In addition, except
pursuant to a registration statement under the Act, this Warrant may not be
sold, assigned, or transferred at any time, in any manner or by any person or
entity unless prior to any transfer each transferee of this Warrant shall
execute an agreement reasonably satisfactory to the Company, pursuant to which
each transferee of this Warrant shall agree to receive and hold such securities
of the Company subject to the provisions hereof and the Lock-Up Agreement in
substantially the form of Exhibit B annexed hereto, and there shall be no
further transfer except in accordance with the provisions hereof.
5
<PAGE>
8. (a) Upon the exercise of this Warrant and the issuance of
shares pursuant to the terms hereto unless such Shares theretofore shall have
been registered under the Act, the Company shall instruct the Company's transfer
agent to issue stock certificates bearing the following legend:
THE SHARES OF COMMON STOCK REPRESENTED BY THIS CERTIFICATE
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, OR ANY STATE SECURITIES LAWS. SUCH SHARES HAVE
BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE SOLD, ASSIGNED,
PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED IN THE
ABSENCE OF A PRIOR EFFECTIVE REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR A PRIOR OPINION
OF COUNSEL TO THE COMPANY OR SUCH OTHER COUNSEL AS SHALL BE
REASONABLY SATISFACTORY TO THE COMPANY STATING THAT
REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR STATE
SECURITIES LAWS.
(b) Unless such Shares theretofore shall have been
registered under the Act, the Company shall impose a "stop transfer" instruction
with respect to the certificates representing the Common Stock issued upon the
exercise of this Warrant. Nothing in this Section 8, however, shall affect in
any way the Warrant Holder's obligations and agreements to comply with all
applicable securities laws upon resale of the Common Stock issued upon the
exercise of this Warrant.
9.
9.1 At any time after the date hereof, the Company shall, at
least twenty (20) days prior to the filing of any registration statement under
the Securities Act (other than a registration statement on Form S-8 or Form S-4
or any successor forms) relating to the public offering of its Common Stock by
the Company or any of its security holders, give written notice of such proposed
filing and of the proposed date thereof to the Warrant Holder and if, on or
before the fifteenth (15) day following the date on which such notice is given,
the Company shall receive a written request from the Warrant Holder requesting
that the Company include among the securities covered by such registration
statement some or all of the Registrable Shares held by the
6
<PAGE>
Warrant Holder, the Company shall, subject to Section 9.2 hereof, include such
Registrable Shares in such Registration Statement, if filed, so as to permit
such Registrable Shares to be sold or disposed of in the manner and on the terms
of the offering thereof set forth in such request. For purposes of this Article
9, the term "Registrable Shares" shall mean the Shares of Common Stock
underlying this Warrant.
7
<PAGE>
9.2 Except as otherwise provided herein, in connection with
any registration statement filed pursuant to Section 9.1 herein, the following
provisions shall apply:
(i) If such registration statement shall be filed
pursuant to Section 9.1 hereof and if the managing underwriter
advises the Company in writing that the inclusion in such
registration of some or all of the Registrable Shares sought
to be registered by such Warrant Holder creates a substantial
risk that the proceeds or price per share that will be derived
by the Company from such registration will be reduced or that
the number of shares to be registered at the insistence of
such Warrant Holder, plus the number of shares of Common Stock
sought to be registered by the Company and any other
stockholders of the Company is too large a number to be
reasonably sold, then, in such event, the number of shares
sought to be registered for the Company, the other
stockholders of the Company having registration rights, and
such Warrant Holder, as applicable, shall be reduced, pro rata
in proportion to the number of shares sought to be registered
to the number of shares recommended be sold by the managing
underwriter. In no event will any securities to be sold by the
Company be excluded from such registration by reason of any
underwriters' cut-backs unless the Company has agreed thereto
with the underwriter.
(ii) If requested by such Warrant Holder in
connection with a registration statement filed pursuant to
Section 9.1, the Company will enter into an underwriting
agreement with the underwriters for such offering, such
agreement to be reasonably satisfactory in form and substance
to the Company, such Warrant Holder and the underwriters, and
to contain such representations, warranties and covenants by
the Company and such other terms as are customarily contained
in such agreements used by the managing underwriter,
including, without limitation, restrictions of sales of Common
Stock or other securities by the Company as may be reasonably
agreed to between the Company and such underwriters, and
indemnities and rights to contributions to the effect and to
the extent provided in Sections 9.3 and 9.4 hereof. Such
Warrant Holder shall be a party to any underwriting agreement
relating to an underwritten sale of its Registrable Shares and
may, at their option, require that any or all of the
representations, warranties and covenants of the Company to or
for the benefit of such underwriters, shall also be made to
and for the benefit of such Warrant Holder. All
representations and warranties of such Warrant Holder shall be
made to or for the benefit of the Company.
(iii) The Company shall provide a transfer agent and
registrar (which may be the same entity) for the Registrable
Shares, not later than the effective date of such
registration.
8
<PAGE>
(iv) All expenses in connection with the preparation
and filing of a registration statement filed pursuant to
Section 9.1 shall be borne solely by the Company, except for
any transfer taxes payable with respect to the disposition of
such Registrable Shares, and any underwriting discounts and
selling commissions applicable solely to such sales of
Registrable Shares, which shall be paid by such Warrant
Holder, severally.
(v) The Company shall use its best efforts to cause
all of the shares of Common Stock covered by such registration
statement to be listed on NASDAQ or on such other securities
exchange as such shares may then be listed, on which similar
shares are listed for trading, if the listing of such
registered shares is permitted by such exchange.
(vi) Following the effective date of such
registration statement, the Company shall, upon the request of
such Warrant Holder, forthwith supply such number of
prospectuses (including exhibits thereto and preliminary
prospectuses and amendments and supplements thereto) meeting
the requirements of the Securities Act and such other
documents as are referred to in the prospectus as shall be
reasonably requested by such Warrant Holder to permit such
Warrant Holder to make a public distribution of their
Registrable Shares.
(vii) The Company shall use its best efforts to
register the Registrable Shares covered by any such
registration statements filed pursuant to Section 9.1 under
such securities or Blue Sky laws in addition to those in which
the Company would otherwise sell Registrable Shares, as such
Warrant Holder shall request, except that neither the Company
nor such Warrant Holder shall for any such purpose be required
to execute a general consent to service of process or to
qualify to do business as a foreign corporation in any
jurisdiction where it is not so qualified. The fees and
expenses incurred in connection with such registration shall
be borne by the Company.
(viii) Such Warrant Holder shall cooperate fully with
the Company and provide the Company with all information
reasonably requested by the Company for inclusion in the
registration statement or as necessary to comply with the
Securities Act. The Company shall cooperate fully with any
underwriters selected by such Warrant Holder and counsel to
such underwriters, and shall provide reasonable and customary
access to the Company's books and records (upon receipt from
such underwriters of customary confidentiality agreements) in
order to facilitate such underwriters' review and examination
of the Company in connection with such underwriting.
9
<PAGE>
(ix) The Company shall notify such Warrant Holder, at
any time after effectiveness when a prospectus relating
thereto is required to be delivered under the Securities Act,
of the happening of any event as a result of which the
prospectus included in such registration statement, as then in
effect, includes an untrue statement of a material fact or
omits to state any material fact required to be stated therein
or necessary to make the statements therein not misleading in
light of circumstances then existing (and upon receipt of such
notice and until a supplemented or amended prospectus as set
forth below is available, such Warrant Holder shall not offer
or sell any securities covered by such registration statement
and shall return all copies of such prospectus to the Company
if requested to do so by it), and at the request of such
Warrant Holder prepare and furnish such Warrant Holder as
promptly as practicable, but in any event within 30 days, a
reasonable number of copies of a supplement to or an amendment
of such prospectus as may be necessary so that, as thereafter
delivered to the purchasers of such shares, such prospectus
shall not include an untrue statement of a material fact or
omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading in
light of the circumstances then existing.
(x) The Company shall furnish to such Warrant Holder
at the time of the registration of the Registrable Shares, a
signed copy of an opinion of the Company's regular in-house or
outside general counsel, or other counsel of the Company's
selection reasonably acceptable to, and which opinion shall be
reasonably satisfactory in form and substance to, such Warrant
Holder to the effect that: (a) a registration statement
covering the Registrable Shares has been filed with the
Commission under the Securities Act and has been declared
effective by order of the Commission, (b) said registration
statement and prospectus contained therein comply as to form
in all material respects with the requirements of the
Securities Act, and nothing has come to such counsel's
attention (after due inquiry) which would cause such counsel
to believe that either said registration statement or such
prospectus (other than the financial statements contained
therein, as to which such counsel need not express any
opinion) contains any untrue statement of a material fact or
omits to state a material fact required to be stated therein
or necessary to make the statements therein (in the case of
such prospectus, in light of the circumstances under which
they were made) not misleading, (c) after due inquiry such
counsel knows of no legal or governmental proceedings required
to be described in such registration statement or prospectus
which are not described as required, or of any contracts or
documents of a character required to be described in such
registration statement or such prospectus to be filed as an
exhibit to such registration statement or to be incorporated
by reference therein which are not described and filed as
required and (d) to such counsel's knowledge, no stop order
has been issued by the Commission suspending the effectiveness
of such registration
10
<PAGE>
statement; it being understood that such opinion may contain
such qualifications and assumptions as are customary in the
rendering of similar opinions, and that such counsel may rely,
as to all factual matters treated therein, on certificates of
the Company (copies of which shall be delivered to such
Warrant Holder).
(xi) The Company will use its best efforts to comply
with the reporting requirements of Sections 13 and 15(d) of
the Securities Exchange Act of 1934, as amended, to the extent
it shall be required to do so pursuant to such sections, and
at all times while so required shall use its best efforts to
comply with all other public information reporting
requirements of the Commission (including reporting
requirements which serve as a condition to utilization of Rule
144 promulgated by the Commission under the Securities Act)
from time to time in effect and relating to the availability
of an exemption from the Securities Act for the sale of any of
the Company's Common Stock held by such Warrant Holder. The
Company will also cooperate with such Warrant Holder in
supplying such information and documentation as may be
necessary for such Warrant Holder to complete and file any
information reporting forms presently or hereafter required by
the Commission as a condition to the availability of an
exemption from the Securities Act for the sale of any of the
Company's Common Stock held by such Warrant Holder.
9.3
(i) In the event of the registration of any
Registrable Shares of the Company under the Securities Act
pursuant to the provisions of Section 9.1, the Company agrees
to indemnify and hold harmless such Warrant Holder, each
underwriter, broker or dealer, if any, and their respective
directors, officers and employees, of such Registrable Shares,
and each other person, if any, who controls the holders of the
Registrable Shares (or a permitted assignee thereof), such
underwriter, broker or dealer within the meaning of the
Securities Act, from and against any and all losses, claims,
damages or liabilities (or actions in respect thereof), joint
or several, to which such Warrant Holder (and as applicable)
its directors, officers or employees, or such underwriter,
broker or dealer or controlling person may become subject
under the Securities Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in any
registration statement under which the Registrable Shares were
registered under the Securities Act, any preliminary
prospectus or final prospectus relating to such Registrable
Shares, or any amendment or supplement thereto, or arise out
of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, or
any violation by the Company of any rule or
11
<PAGE>
regulation under the Securities Act applicable to the Company
or relating to any action or inaction required by the Company
in connection with any such registration and will reimburse
such Warrant Holder, each such underwriter, broker or dealer
and controlling person, and their respective directors,
officers or employees, for any legal or other expenses
reasonably incurred by such Warrant Holder or such
underwriter, broker or dealer or controlling person in
connection with investigating or defending any such loss,
claim, damage, liability or action; provided, however, that
the Company will not be liable in any such case to the extent
that any such loss, claim, damage or liability arises out of
or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission made in such
registration statement, such preliminary prospectus, such
final prospectus or such amendment or supplement thereto in
reliance upon and in conformity with information furnished in
writing to the Company by such Warrant Holder's and as
applicable, such Warrant Holder's directors, officers or
employees, or such underwriter, broker, dealer or controlling
person for use in the preparation thereof. Such indemnity
shall remain in full effect irrespective of any investigation
by any person indemnified above.
(ii) In the event of the registration of any
Registrable Shares of such Warrant Holder under the Securities
Act for sale pursuant to the provisions of this Agreement, the
Warrant Holder agrees, to indemnify and hold harmless the
Company, its directors, officers and employees, from and
against any losses, claims, damages or liabilities, joint or
several, to which the Company, its directors, officers or
employees, may become subject under the Securities Act or
otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or
are based upon any untrue statement or alleged untrue
statement of any material fact contained in any registration
statement under which such Registrable Shares were registered
under the Securities Act, any preliminary pros pectus or final
prospectus relating to such Registrable Shares, or any
amendment or supplement thereto, or arise out of or are based
upon omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the
statements therein not misleading, which untrue statement or
alleged untrue statement or omission or alleged omission was
made therein in reliance upon and in conformity with written
information furnished to the Company by such Warrant Holder
for use in the preparation thereof. Such indemnity shall
remain in full effect irrespective of any investigation by any
person indemnified above.
(iii) Promptly after receipt by a person entitled to
indemnification under this Section 9.3 (for purposes of this
Section 9.3, an "Indemnified Party") of notice of the
commencement of any action or claim relating to any
registration statement filed under Section 9.1 or as to which
indemnity may be sought hereunder, such
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<PAGE>
Indemnified Party will, if a claim for indemnification
hereunder in respect thereof is to be made against any other
party hereto (for purposes of this Section 9.3, an
"Indemnifying Party"), give written notice to such
Indemnifying Party of the commencement of such action or
claim, but the failure to so notify the Indemnifying Party
will not relieve it from any liability which it may have to
any Indemnifying Party otherwise than pursuant to the
provisions of this Section 9.3 and shall also not relieve the
Indemnifying Party of its obligations under this Section 9.3,
except to the extent that the Indemnifying Party is damaged
solely as a result of the failure to give timely notice. In
case any such action is brought against an Indemnified Party,
and it notifies an Indemnifying Party of the commencement
thereof, the Indemnifying Party will be entitled (at its own
expense) to participate in and, to the extent that it may
wish, jointly with any other Indemnifying Party similarly
notified, to assume the defense with counsel satisfactory to
such Indemnified Party, of such action and/or to settle such
action and, after notice from the Indemnifying Party to such
Indemnified Party of its election so to assume the defense
thereof, the Indemnifying Party will not be liable to such
Indemnified Party for any legal or other expenses subsequently
incurred by such Indemnified Party in connection with the
defense thereof, other than the reasonable cost of
investigation. If in an Indemnified Party's reasonable
judgment (which is based on the written opinion of its
counsel) a conflict of interest between the Indemnified
Parties and Indemnifying Parties exists in respect of a claim
or if the Indemnifying Party refuses to participate in and to
assume the defense of any action brought against an
Indemnified Party, the Indemnified Party may assume the
defense of such claim or action with counsel of its choosing
which shall not relieve the Indemnifying Party of its
obligations under the preceding subdivisions of this Section
9. No Indemnifying Party and no Indemnified Party shall enter
into any settlement agreement which would impose any liability
on such other party or parties without the prior written
consent of such other party or parties.
(iv) Notwithstanding the foregoing provisions of this
Section 9.3, in no event shall the Warrant Holder be liable
for an amount in excess of the net proceeds received by the
Warrant Holder from the sale of the Registrable Shares.
9.4 If the indemnification provided for in Section 9.3 hereof
is unavailable to the Indemnified Party in respect of any losses, claims,
damages or liabilities referred to herein, then each such Indemnifying Party, in
lieu of indemnifying such Indemnified Party, shall contribute to the amount paid
or payable by such Indemnified Party as a result of such losses, claims, damages
or liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company and such Warrant Holder from the offering of
the shares of Common Stock, or if such allocation is not permitted by applicable
law, in such proportion as is appropriate to reflect not only such relative
benefits but also the relative fault of the Company and such Warrant Holder in
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connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities, as well as any other relevant equitable
considerations and (ii) in such proportion as is appropriate to reflect the
relative fault of the Company and of such Warrant Holder in connection with such
statements or omissions, as well as any other relevant equitable considerations.
In no event shall the obligation of any Indemnifying Party to
contribute under this Section 9.4 exceed the amount that such Indemnifying Party
would have been obligated to pay by way of indemnification if the
indemnification provided for under Section 9.3 hereof had been available under
the circumstances.
No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
9.5 The indemnity and contribution agreements contained in
Sections 9.3 and 9.4 shall remain operative and in full force and effect
regardless of (i) any termination of this Agreement or any underwriting
agreement, (ii) any investigation made by or on behalf of any Indemnified Party
or by or on behalf of the Company and (iii) the consummation of the sale or
successive resales of the Registrable Shares.
10. The validity, interpretation and performance of this
Warrant shall be governed by the laws of the State of New York without giving
effect to its conflict of laws rules.
11. This Warrant cannot be amended, supplemented or changed,
and no provision hereof can be waived, except by a written instrument making
specific reference to this Warrant and signed by the party against whom
enforcement of any such amendment, supplement, modification or waiver is sought.
The Exhibit to this Warrant is incorporated herein by reference to the same
extent as if set forth herein in full. A waiver of any right derived hereunder
by the Warrant Holder shall not be deemed a waiver of any other right derived
hereunder.
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12. This Warrant shall be binding upon the Company and shall
inure to the benefit of the Warrant Holder, and their respective successors and
permitted assigns.
SOULFOOD CONCEPTS, INC.
By: /s/ Brian Hinchcliffe
--------------------------
Name: Brian Hinchcliffe
Title: President
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EXHIBIT A
SUBSCRIPTION FORM
(To be executed by the Warrant Holder to exercise the Warrant in whole or in
part)
TO: SOULFOOD CONCEPTS, INC.
The undersigned, whose Social Security or Tax Identification Number is
__, hereby irrevocably elects the right of purchase represented by the within
Warrant for, and to purchase thereunder, ____________ shares of Common Stock and
tenders payment herewith to the order of Soulfood Concepts, Inc. (the "Company")
in the amount of $__. The undersigned requests that certificates for such shares
of Common Stock be issued in the name of, and delivered to:
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and, if said number of shares of Common Stock shall not be all the shares of the
Common Stock purchasable thereunder, then a new Warrant for the balance of the
remaining shares of Common Stock purchasable thereunder be registered in the
name of, and delivered to, the undersigned at the address stated below.
Address:
Dated:
Warrant Holder: Signature Guaranteed:
By:____________________________ ___________________________
