THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR APPLICABLE STATE SECURITIES LAWS, AND MAY NOT BE SOLD, PLEDGED OR
OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT
OR PURSUANT TO AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT AND
APPLICABLE STATE SECURITIES LAWS, SUPPORTED BY AN OPINION OF COUNSEL, REASONABLY
SATISFACTORY TO DELICIOUS BRANDS, INC. AND ITS COUNSEL, THAT SUCH REGISTRATION
IS NOT REQUIRED
DATED: APRIL 12, 1999
WARRANT
TO PURCHASE 700,000 SHARES OF COMMON STOCK
EXPIRING 5:00 P.M. NEW YORK TIME ON APRIL 11, 2009.
THIS IS TO CERTIFY THAT, for value received, Little Meadow
Corp., or registered assigns (the "Holder") is entitled to purchase from
Delicious Brands, Inc., a Delaware corporation (the "Company"), at any time or
from time to time prior to 5:00 p.m., New York City time, on April 11, 2009 at
the principal executive offices of the Company, at the Exercise Price (as
hereinafter defined), the number of shares of Common Stock shown above, all
subject to adjustment and upon the terms and conditions as hereinafter provided,
and is entitled also to exercise the other appurtenant rights, powers and
privileges hereinafter described.
Certain terms used in this Warrant are defined in Article V.
ARTICLE I
EXERCISE OF WARRANTS
1.1. METHOD OF EXERCISE. To exercise this Warrant in whole or
in part, the Holder shall deliver to the Company, at the Company's offices at
the address set forth in Section 6.1, (a) this Warrant, (b) a written notice, in
substantially the form of the Exercise Notice attached hereto (or a reasonable
facsimile thereof), of such Xxxxxx's election to exercise this Warrant, which
notice shall specify the number of shares of Common Stock to be purchased, the
denominations of the certificate or certificates desired, and the name or names
in which such certificates are to be registered, and (c) payment of the Exercise
Price with respect to such Common Stock. Payment made pursuant to clause (c)
above may be made, at the option of the Holder by cash, money order, certified
or bank cashier's check or wire transfer.
1.2. CONVERSION RIGHT. In lieu of the exercise of this Warrant
as provided in Section 1.1, the Holder shall have the right (but not the
obligation) to convert this Warrant, in whole or in part, into a number of
shares of Common Stock equal to the Conversion Number (as defined below) by
delivering to the Company, at the Company's offices at the address set forth in
Section 6.1, (a) this Warrant and (b) a written notice, in substantially the
form of the Conversion Notice attached hereto (or a reasonable facsimile
thereof), of such Xxxxxx's election to convert this Warrant, which notice shall
specify the number of shares of Common Stock into which the portion of the
Warrant so designated in such notice is to be converted, the denominations of
the certificate or certificates desired, and the name or names in which such
certificates are to be registered. As used herein the "Conversion Number" shall
mean that number of shares of Common Stock equal to the quotient obtained by
dividing: (x) the "Value" (as defined below) of the portion of the Warrant being
converted; by (y) the Market Price (as defined below).
For purposes of this Warrant (other than this Section 1.2),
any reference herein to the the exercise of this Warrant shall be deemed to
include a reference to the conversion of this Warrant in accordance with the
terms of this Section 1.2
1.3. DELIVERY OF STOCK CERTIFICATES, ETC. The Company shall,
as promptly as practicable and in any event within five Business Days after the
delivery to the Company of an Exercise Notice or Conversion, as the case may be,
execute and deliver or cause to be executed and delivered, in accordance with
such notice, a certificate or certificates representing the aggregate number of
Shares of Common Stock specified in said notice. The certificate or certificates
so delivered shall be in such denominations as may be specified in such notice
or, if such notice shall not specify denominations, shall be in the amount of
the number of shares of Common Stock for which the Warrant is being exercised
and shall be issued in the name of the Holder or such other name or names as
shall be designated in such notice. 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 for all purposes to have become a holder of
record of such Common Stock, as of the date the aforementioned notice,
accompanied by full payment of the Exercise Price with respect to such Common
Stock pursuant to Section 1.1 or Section 1.2, as applicable, is received by the
Company. If this Warrant shall have been exercised only in part, the Company
shall, at the time of delivery of the certificate or certificates, deliver to
the Holder a new warrant certificate evidencing the rights to purchase the
remaining Common Stock provided for by this Warrant, which new warrant
certificate shall in all other respects be identical with this warrant, or, at
the request of the Holder, appropriate notation may be made on this Warrant
which shall then be returned to the Holder. The Company shall pay all expenses,
taxes (other then income taxes of a Holder) and other charges payable in
connection with the preparation, issuance and delivery of any such certificates
for Common Stock and new Warrants, except that, if any such Common Stock
certificates or new Warrants shall be registered in a name or names other than
the name of the Holder, funds sufficient to pay all transfer taxes payable as a
result of such transfer shall be paid by the Holder at the time of delivering
the aforementioned notice of exercise or promptly upon receipt of a written
request of the Company for payment.
1.4. SECURITIES TO BE FULLY PAID AND NONASSESSABLE. All Common
Stock issued upon the exercise of this Warrant: (i) shall be validly issued,
fully paid and nonassessable and free from all preemptive rights of any holder
of Common Stock, and from all taxes, liens and charges
-2-
with respect to the issue thereof (other than transfer taxes); and (ii) if the
Common Stock is then listed on any national securities exchanges (as defined in
the Exchange Act) or quoted on NASDAQ, shall be duly listed or quoted thereon,
as the case may be.
1.5. SECURITIES LEGEND. Each certificate for Common Stock
issued upon exercise of this Warrant, unless at the time of exercise such Common
Stock are registered under the Securities Act, shall bear the following legend:
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR APPLICABLE STATE SECURITIES LAWS, AND MAY NOT BE SOLD, PLEDGED OR
OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT
OR PURSUANT TO AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT AND
APPLICABLE STATE SECURITIES LAWS, SUPPORTED BY AN OPINION OR COUNSEL, REASONABLY
SATISFACTORY TO DELICIOUS BRANDS, INC. AND ITS COUNSEL, THAT SUCH REGISTRATION
IS NOT REQUIRED.
Each such certificate shall also bear a legend indicating that
such shares are such subject to a lock-up agreement, if issued prior to the
expiration of the lock-up period provided for in Section 9.01 of the Securities
Purchase Agreement.
Any certificate issued at any time in exchange or substitution
for any certificate bearing such legend (except a new certificate issued upon
completion of a public distribution pursuant to a registration statement under
the Securities Act) shall also bear such legend unless, in the reasonable
opinion of counsel to the Company, the securities represented thereby are no
longer subject to restrictions on resale under the Securities Act.
1.6. RESERVATION; AUTHORIZATION. The Company has reserved and
will keep available for issuance upon exercise of the Warrants the total number
of shares of Common Stock deliverable upon exercise of all Warrants from time to
time outstanding. The issuance of such Common Stock has been duly and validly
authorized.
ARTICLE II
TRANSFER, EXCHANGE
AND REPLACEMENT OF WARRANTS
2.1. OWNERSHIP OF WARRANT. The Company may deem and treat the
Person in whose name this Warrant is registered as the holder and owner hereof
(notwithstanding any notations of ownership or writing hereon made by any
Person) for all purposes and shall not be affected by any notice to the
contrary, until presentation of this Warrant for registration of transfer as
provided in this Article II.
2.2. TRANSFER OF WARRANT. The Company agrees to maintain at
its principal executive offices books for the registration of transfers of the
Warrants, and transfer of this Warrant and all rights hereunder shall be
registered, in whole or in part, on such books, upon
-3-
surrender of this Warrant at the Company's principal executive offices, together
with a written assignment of this Warrant duly executed by the Holder or his
duly authorized agent or attorney, with (unless the Holder is the original
Holder of this Warrant) signatures guaranteed by a bank or trust Company or a
broker or dealer registered with the NASD, and funds sufficient to pay any
transfer taxes payable upon such transfer. Upon surrender the Company shall
execute and deliver a new Warrant or Warrants in the name of the assignee or
assignees and in the denominations specified in the instrument of assignment,
and this Warrant shall promptly be canceled. The Company shall not be required
to register any transfers absent an opinion of counsel to the Company that such
transfer is exempt from the registration requirements of the Securities Act;
PROVIDED that the Company agrees not to request an opinion of counsel with
respect to transfers between or among affiliates of a Holder.
2.3. DIVISION OR COMBINATION OF WARRANTS. This Warrant may be
divided or combined with other Warrants upon surrender hereof and of any Warrant
or Warrants with which this Warrant is to be combined at the Company's offices
at the address set forth in Section 6.1, together with a written notice
specifying the names and denominations in which the new Warrant or Warrants are
to be issued, signed by the holders hereof and thereof or their respective duly
authorized agents or attorneys. The Company shall execute and deliver a new
Warrant or Warrants in exchange for the Warrant or Warrants to be divided or
combined in accordance with such notice. Any such division or combination must
comply with Section 2.2, to the extent applicable.
2.4. LOSS, THEFT, DESTRUCTION OR MUTILATION OF WARRANTS. Upon
receipt of evidence satisfactory to the Company of the loss, theft, destruction
or mutilation of any Warrant and, in the case of any such loss, theft or
destruction, upon receipt of indemnity or security reasonably satisfactory to
the Company (the original Holder's or any institutional Holder's indemnity being
satisfactory indemnity in the event of loss, theft or destruction of any Warrant
owned by such holder), or, in the case of any such mutilation, upon surrender
and cancellation of such Warrant, the Company will make and deliver, in lieu of
such lost, stolen, destroyed or mutilated Warrant, a new Warrant of like tenor
and representing the right to purchase the same aggregate number of Common Stock
as provided for in such lost, stolen, destroyed or mutilated Warrant.
2.5. EXPENSES OF DELIVERY OF WARRANTS. The Company shall pay
all expenses, taxes (other than transfer taxes or income taxes of a Holder) and
other charges payable in connection with the preparation, issuance and delivery
of Warrants and Common Stock issuable upon exercise of the Warrants hereunder.
ARTICLE III
CERTAIN RIGHTS
3.1. REGISTRATION RIGHTS. The Common Stock issuable upon
exercise of this Warrant are entitled to the benefits of the registration rights
contemplated in the Securities Purchase Agreement.
-4-
3.2. CERTAIN COVENANTS. The Company covenants and agrees that,
until exercise or cancellation of this Warrant, the Company will deliver to each
Holder who beneficially owns (as defined in Rule 13d-3 promulgated under the
Securities Exchange Act of 1934 as amended) at least the lesser of (x) 5% of the
outstanding Common Stock of the Company or (y) 5% of the Shares.:
(a) As soon as available but not later than 105 days
after the close of the fiscal year of the Company, a consolidated balance sheet
of the Company as at the end of such year and the related consolidated and
consolidating statements of income, of stockholders' equity and of cash flows
for such year, such consolidated statements to be audited by independent
certified public accountants.
(b) As soon as available but not later than 50 days after
the end of each of the first three fiscal quarters, a consolidated balance sheet
of the Company as at the end of, and the related consolidated statements of
income, of stockholders' equity and of cash flows for the portion of the
Company's fiscal year then elapsed, all prepared in accordance with generally
accepted accounting principles;
ARTICLE IV
ANTIDILUTION PROVISIONS
4.1. ADJUSTMENTS GENERALLY. The Exercise Price and the number
of shares of Common Stock (or other securities or property) issuable upon
exercise of this Warrant shall be subject to adjustment from time to time upon
the occurrence of certain events, as provided in this Article IV.
4.2. COMMON STOCK. In the event that the Exercise Price is
adjusted pursuant to the terms hereof, then, effective at the time of such
adjustment, the number of shares subject to this Warrant shall be increased (or,
in the case of the application of Section 4.3(g) as a result of clause (iii) of
the definition of Extraordinary Common Stock Event, reduced) to an amount equal
to the result obtained by multiplying: (i) the number of shares of Common Stock
subject to this Warrant prior to such adjustment by; (ii) a fraction the
numerator of which shall be the Exercise Price immediately prior to such
adjustment and the denominator of which shall be the Exercise Price following
such adjustment.
4.3. ADJUSTMENTS TO EXERCISE PRICE
(a) UPON DILUTIVE ISSUANCES. If the Company shall issue
or sell shares of its Common Stock or Common Stock Equivalents (as hereafter
defined) without consideration or at a price per share less than the GREATER of:
(i) the then current Market Price of such securities so issued; or (ii)$8.00,
then such Exercise Price shall be reduced so as to be equal to an amount
determined by multiplying such Exercise Price by a fraction:
-5-
(i) the numerator of which shall be (a) the number of
shares of Common Stock outstanding immediately prior to the issuance of such
additional shares of Common Stock or Common Stock Equivalents (calculated on a
fully-diluted basis assuming the exercise or conversion of all presently
exercisable options, warrants, purchase rights or convertible securities), plus
(b) the number of shares of Common Stock or Common Stock Equivalents which
aggregate consideration, if any, received by the Company for the total number of
such additional shares of Common Stock or Common Stock Equivalents so issued
would purchase at the GREATER of: (x) the then current Market Price of such
securities so issued; or (y) $8.00 and
(ii) the denominator of which shall be (a) the number
of shares of Common Stock outstanding immediately prior to the issuance of such
additional shares of Common Stock or Common Stock Equivalents (calculated on a
fully-diluted basis assuming the exercise or conversion of all presently
exercisable options, warrants, purchase rights or convertible securities), plus
(b) the number of such additional shares of Common Stock or Common Stock
Equivalents so issued.
(b) UPON DILUTIVE ISSUANCES OF WARRANTS, OPTIONS AND
PURCHASE RIGHTS TO COMMON STOCK OR CONVERTIBLE SECURITIES. For the purposes of
this Article IV, the issuance of any warrants, options, subscription or purchase
rights with respect to shares of Common Stock and the issuance of any securities
convertible into or exchangeable for shares of Common Stock, or the issuance of
any warrants, options, subscription or purchase rights with respect to such
convertible or exchangeable securities (collectively, "Common Stock
Equivalents"), shall be deemed an issuance of Common Stock, with respect to
adjustments required hereunder if the Consideration Per Share which may be
received by the Company for such Common Stock shall be less than the GREATER of:
(i) the then current Market Price of such securities so issued; or (ii)$8.00.
Any obligation, agreement or undertaking to issue Common Stock Equivalents at
any time in the future shall be deemed to be an issuance of Common Stock
Equivalents at the time such obligation, agreement or undertaking is made or
arises. No adjustment of the Exercise Price shall be made under this Section
upon the issuance of any shares of Common Stock which are issued pursuant to the
exercise, conversion or exchange of any Common Stock Equivalents if any
adjustment shall previously have been made upon the issuance of any such Common
Stock Equivalents as above provided.
(c) ADJUSTMENTS FOR CANCELLATION OR EXPIRATION OF COMMON
STOCK EQUIVALENTS. Should the Consideration Per Share of any such Common Stock
Equivalents be decreased from time to time, then, upon the effectiveness of each
such change, the Exercise Price will be that which would have been obtained (1)
had the adjustments made upon the issuance of such Common Stock Equivalents been
made upon the basis of the decreased Consideration Per Share of such securities,
and (2) had the adjustments made to the Exercise Price since the date of
issuance of such Common Stock Equivalents been made to such Exercise Price as
adjusted pursuant to clause (1) above. Any adjustment of the Exercise Price
pursuant to this paragraph which relates to any Common Stock Equivalent shall be
eliminated if, as, and when such Common Stock Equivalent expires or is canceled
without being exercised, or is repurchased by the Company at a price per share
at or less than the original purchase price, so that the Exercise Price
-6-
effective immediately upon such cancellation or expiration shall be equal to the
Exercise Price that would have been in effect had the expired or canceled Common
Stock Equivalent not been issued.
(d) CONSIDERATION PER SHARE. For purposes of this Article
IV, the "Consideration Per Share" which may be received by the Company shall be
determined as follows:
(i) The "Consideration Per Share" shall mean the
amount equal to the total amount of consideration, if any, received by the
Company for the issuance of such Common Stock Equivalents, plus the minimum
amount of consideration, if any, payable to the Company upon exercise,
conversion or exchange thereof, divided by the aggregate number of shares of
Common Stock that would be issued if all such Common Stock Equivalents were
exercised, exchanged or converted.
(ii) The "Consideration Per Share" which may be
received by the Company shall be determined in each instance as of the date of
issuance of Common Stock Equivalents without giving effect to any possible
future upward price adjustments or rate adjustments which may be applicable with
respect to such Common Stock Equivalents.
(e) CONSIDERATION OTHER THAN CASH. If a part or all of
the consideration received by the Company in connection with the issuance of
shares of the Common Stock or the issuance of any of the securities described in
this Section consists of property other than cash, such consideration shall be
deemed to have a fair market value as is reasonably determined in good faith by
the Board of Directors of the Company.
In the event of any dispute between the Holders and the
Company regarding the determination of fair market value of any securities or
property, at the written request of the Requisite Holders, the Company shall
engage a consulting firm or investment banking firm, selected by the Board of
Directors and approved by such Holders, to prepare an independent appraisal of
the fair market value of such securities or property. The determination of such
appraisal shall be final and binding for all purposes. The expenses of any
appraisal by such consulting or investment banking firm shall be borne by the
Company.
(f) EXCEPTIONS TO ANTI-DILUTION ADJUSTMENTS; RESERVED
EMPLOYEE SHARES. This Section 4.3 (a) through (f) shall not apply under any of
the circumstances which would constitute an Extraordinary Common Stock Event (as
defined below). Notwithstanding anything herein to the contrary, such Sections
shall not apply with respect to (i) the conversion of the Series A Preferred
Stock, and (ii) the issuance or sale of up to 1,277,730 shares of Common Stock
issued or issuable pursuant to options and warrants outstanding as of the date
hereof and at the exercise price for such as of the date hereof. The foregoing
numbers shall be subject to adjustment in the event of any stock dividend, stock
split, reorganization, recapitalization, or other similar event.
(g) UPON EXTRAORDINARY COMMON STOCK EVENT. Upon the
happening of an Extraordinary Common Stock Event, the Exercise Price shall,
simultaneously with the happening of such Extraordinary Common Stock Event, be
adjusted by multiplying the Exercise Price, by a fraction, the numerator of
which shall be the number of shares of Common Stock
-7-
outstanding immediately prior to such Extraordinary Common Stock Event and the
denominator of which shall be the number of shares of Common Stock outstanding
immediately after such Extraordinary Common Stock Event, and the product so
obtained shall thereafter be the Exercise Price, and the Exercise Price, as so
adjusted, shall be readjusted in the same manner upon the happening of any
successive Extraordinary Common Stock Event or Events.
An "Extraordinary Common Stock Event" shall mean (i) the
issue of additional shares of Common Stock as a dividend or other distribution
on outstanding shares of Common Stock, (ii) a subdivision of outstanding shares
of Common Stock into a greater number of shares of Common Stock, (iii) a
combination or reverse stock split of outstanding shares of Common Stock into a
smaller number of shares of Common Stock, or (iv) any recapitalization or
reorganization.
(h) DIVIDENDS. In the event the Company shall make or
issue, or shall fix a record date for the determination of holders of Common
Stock entitled to receive a dividend or other distribution (other than a
distribution in liquidation or other distribution otherwise provided for herein)
with respect to the Common Stock payable in (i) securities of the Company OTHER
THAN shares of Common Stock, or (ii) other assets (excluding cash dividends or
distributions), then and in each such event provision shall be made so that the
Holders shall receive upon exercise of this Warrant in addition to the number of
shares of Common Stock receivable thereupon, the number of securities or such
other assets of the Company which each Holder would have received had such
Holder exercised this Warrant and acquired Common Stock on the date of such
event and had such holder thereafter, during the period from the date of such
event to and including the exercise of this Warrant by the Holder, retained such
securities or such other assets receivable by such holder during such period,
giving application to all other adjustments called for during such period under
this Article IV with respect to the rights of the holders of the Common Stock.
(i) CAPITAL REORGANIZATION OR RECLASSIFICATION. If the
Common Stock issuable upon the exercise of this Warrant shall be changed into
the same or different number of shares of any class or classes of capital stock,
whether by capital reorganization, recapitalization, reclassification or
otherwise (other than a subdivision or combination of shares or stock dividend
provided for elsewhere in this Section 4.3, or the sale of all or substantially
all of the Company's capital stock or assets to any other person), then and in
each such event each Holder shall have the right thereafter to acquire the kind
and amount of shares of capital stock and other securities and property
receivable upon such reorganization, recapitalization, reclassification or other
change by the holders of the number of shares of Common Stock for which such
Warrant might have been exercised immediately prior to such reorganization,
recapitalization, reclassification or change, all subject to further adjustment
as provided herein.
(j) CERTIFICATE AS TO ADJUSTMENTS; NOTICE BY COMPANY. In
each case of an adjustment or readjustment hereunder, the Company at its expense
will furnish each Holder not later than the fifth Business Day following any
such adjustment or readjustment, at such Xxxxxx's registered address as shall
appear on the records of the Company, a certificate prepared by the Treasurer or
Chief Financial Officer of the Company, showing such adjustment or readjustment,
and stating in detail the facts upon which such adjustment or readjustment is
based.
-8-
(k) RESERVATION OF COMMON STOCK. The Company shall at all
times reserve and keep available out of its authorized but unissued shares of
Common Stock, solely for the purpose of effecting the exercise of the Warrants,
such number of its shares of Common Stock as shall from time to time be
sufficient to effect the exercise of the Warrants and if at any time the number
of authorized but unissued shares of Common Stock shall not be sufficient to
effect the exercise of Warrants, the Company shall take such action as may be
necessary to increase, and it shall increase, its authorized but unissued shares
of Common Stock to such number of shares as shall be sufficient for such
purpose.
4.4. MERGER, CONSOLIDATION, ETC.
(a) If at any time or from time to time there shall be
(i) a merger, or consolidation of the Company with or into another corporation,
(ii) the sale of all or substantially all of the Company's capital stock or
assets to any other person, (iii) any other form of business combination or
reorganization in which the Company shall not be the continuing or surviving
entity of such business combination or reorganization, or (iv) any transaction
or series of transactions by the Company in which in excess of 50 percent of the
Company's voting power is transferred (each, a "Reorganization"), then as a part
of such Reorganization, provision shall be made so that the Holders shall
thereafter be entitled to receive upon exercise the same kind and amount of
stock or other securities or property (including cash) of the Company, or of the
successor corporation resulting from such Reorganization to which such Holder
would have been entitled if such Holder had exercised its Warrants immediately
prior to the effective time of such Reorganization. In any such case,
appropriate adjustment shall be made in the application of the provisions of
Article IV to the end that the provisions of Article IV (including adjustment of
the Exercise Price then in effect and the number of shares of Common Stock or
other securities issuable upon exercise of the Warrants) shall be applicable
after that event in as nearly equivalent a manner as may be practicable.
(b) The Company will not effect any of the
transactions described in clause (a) of this Section 4.4 hereof unless, prior to
the consummation thereof, each person (other than the Company) which may be
required to deliver any stock, securities, cash or property upon the exercise of
this Warrant as provided herein shall assume, by written instrument delivered
to, and reasonably satisfactory to, the Holders: (i) the obligations of the
Company under this Warrant (and if the Company shall survive the consummation of
such transaction, such assumption shall be in addition to, and shall not release
the Company from, any continuing obligations of the Company under this Warrant),
(ii) the obligations of the Company under the Securities Purchase Agreement with
respect to Registration Rights and (iii) the obligation to deliver to each
holder such shares of stock, securities, cash or property as, in accordance with
the foregoing provisions of this Section 4, each Holder may be entitled to
receive, and such Person shall have similarly delivered to such Holder an
opinion of counsel for such Person, stating that this Warrant shall thereafter
continue in full force and effect and the terms hereof (including without
limitation all of the provisions of this Section 4) shall be applicable to the
stock, securities, cash or property which such Person may be required to deliver
upon any exercise of this Warrant or the exercise of any rights pursuant hereto.
-9-
(c) The provisions of this Section 4.4 are in addition
to and not in lieu of the other provisions of Section 4 hereof.
4.5. NOTICE OF ADJUSTMENT. In addition to any other notice
required hereunder, not less than 10 nor more than 60 days prior to the record
date or effective date, as the case may be, of any action which would require an
adjustment or readjustment pursuant to this Article IV, the Company shall give
notice to each Holder of such event, describing such event in reasonable detail
and specifying the record date or effective date, as the case may be, and, if
determinable, the required adjustment and the computation thereof. If the
required adjustment is not determinable at the time of such notice, the Company
shall give notice to each Holder of such adjustment and computation promptly
after such adjustment becomes determinable.
4.6. NOTICES OF CORPORATE ACTION. In the event of
(a) any taking by the Company of a record of the
holders of any class of securities for the purpose of determining the holders
thereof who are entitled to receive any dividend or other distribution, or any
right to subscribe for, purchase or otherwise acquire any shares of stock of any
class or any other securities or property, or to receive any other right,
(b) any capital reorganization of the Company,
reclassification or recapitalization of the capital stock of the Company or any
consolidation or merger involving the Company and any other Person or any
transfer of all or substantially all the assets of the Company to any other
Person,
(c) any voluntary or involuntary dissolution,
liquidation or winding-up of the Company, or
(d) any issuance of any Common Stock or Common Stock
Equivalents other than upon the conversions of shares of Series A Preferred
Stock or the grant of stock options to the officers, directors, employees of the
Company pursuant to the Stock Option Plan or the exercise thereof (or any
currently outstanding stock options),
the Company will mail to the holder of this Warrant a notice specifying (i) the
date or expected date on which any record is to be taken for the purpose of such
dividend, distribution or right, and the amount and character of such dividend,
distribution or right, (ii) the date or expected date on which any such
reorganization, reclassification, recapitalization, consolidation, merger,
transfer, dissolution, liquidation, winding-up or Sale of the Company is to take
place, the time, if any such time is to be fixed, as of which the holders of
record of Common Stock (or other securities) shall be entitled to exchange their
shares of Common Stock (or other securities) for the securities or other
property deliverable upon such reorganization, reclassification,
recapitalization, consolidation, merger, transfer, dissolution, liquidation or
winding-up and a description in reasonable detail of the transaction and (iii)
the date of such issuance, together with a description of the security so issued
and the consideration received by the Company therefor. Such notice shall be
mailed promptly after the decision is made to take any of the actions specified
in (a)-(d) above.
-10-
ARTICLE V
DEFINITIONS
The following terms, as used in this Warrant, have the
following respective meanings:
"Board of Directors" shall mean the board of directors of the
Company.
"Business Day" shall mean (a) if any Common Stock is listed or
admitted to trading on a national securities exchange or Nasdaq, a day on which
the principal national securities exchange Nasdaq on which such class of Common
Stock are listed or admitted to trading is open for business or (b) if Common
Stock is not so listed or admitted to trading, a day on which any New York Stock
Exchange member firm is open for business.
"Common Stock" means the common stock, $.01 par value, of the
Company.
"Common Stock Equivalents" shall have the meaning set forth in
Section 4.3(b).
"Company" shall have the meaning set forth in the first
paragraph of this Warrant.
"Consideration Per Share" shall have the meaning set forth in
Section 4.3(d).
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and any similar or successor federal statute, and the rules and
regulations of the Securities and Exchange Commission (or its successor)
thereunder, all as the same shall be in effect at the time.
"Exercise Price" shall mean $.01 per share of Common Stock,
adjusted as contemplated herein.
"Extraordinary Common Stock Event" shall have the meaning set
forth in Section 4.3(g).
"Holder" shall have the meaning set forth in the first
paragraph of this Warrant.
"Market Price" at any date shall be deemed to be the last
reported sale price of the Common Stock on such date, or, in case no such
reported sale takes place on such day, the average of the last reported sales
prices for the immediately preceding three trading days, in either case as
officially reported by the principal securities exchange on which the Common
Stock is listed or admitted to trading, or, if the Common Stock is not listed or
admitted to trading on any national securities exchange or if any such exchange
on which the Common Stock is listed is not its principal trading market, the
last reported sale price as furnished by the NASD through the Nasdaq National
Market or SmallCap Market, or, if applicable, the OTC Bulletin Board, or if the
Common Stock is not listed or admitted to trading on the Nasdaq National Market
or SmallCap
-11-
Market or OTC Bulletin Board or similar organization, as determined in good
faith by resolution of the Board of Directors of the Company, based on the best
information available to it.
"NASD" means the National Association of Securities Dealers,
Inc.
"Nasdaq" means The National Association of Securities Dealers,
Inc. Automated Quotation System.
"Person" means any individual, corporation, limited liability
company, partnership, limited liability partnership, joint venture or other
entity.
"Requisite Holders" means, as of any date of determination,
persons holding outstanding Warrants entitling them to purchase a majority of
the Common Stock issuable upon exercise of the Warrants originally represented
hereby.
"Securities Act" shall mean the Securities Act of 1933, as
amended, and any similar or successor federal statute, and the rules and
regulations of the Securities and Exchange Commission (or its successor)
thereunder, all as the same shall be in effect at the time.
"Securities Purchase Agreement" means the Securities Purchase
Agreement dated April 12, 1999 between the Company and Little Meadow Corp.
"Shares" shall have the meaning set forth in the Securities
Purchase Agreement.
"Value" of the portion of this Warrant being converted shall
equal the remainder derived from subtracting (a) the Exercise Price (as adjusted
as provided herein) multiplied by the number of shares of Common Stock
underlying the portion of this Warrant being converted from (b) the Market Price
of the shares of Common Stock multiplied by the number of shares of Common Stock
underlying the portion of this Warrant being converted.
"Warrant or Warrants" means this Warrant and any Warrant
issued to a transferee of all or any part of this Warrant.
ARTICLE VI
MISCELLANEOUS
6.1. NOTICES. All notices or other communications required
hereby shall be in writing and shall be sent either by (a) courier, or (b) by
telecopy as well as by registered or certified mail, and shall be regarded as
properly given in the case of a courier upon actual delivery to the proper place
of address; in the case of telecopy, on the day following the date of
transmission if properly addressed and sent without transmission error to the
correct number and receipt is confirmed by telephone within 48 hours of the
transmission; in the case of a letter for which a telecopy could not be
successfully transmitted or receipt of which could not be confirmed as herein
provided, three (3) days after the registered or certified mailing date if the
letter is
-12-
properly addressed and postage prepaid; and shall be regarded as properly
addressed if sent to the parties and their representatives at the addresses
given below:
To the Company: Delicious Brands, Inc.
0000 Xxxxx Xxxxxx
Xxx Xxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxx, President and
Chief Executive Officer
Xxxxxxxxx: (000) 000-0000
Confirmation: (000) 000-0000
With a copy to: Xxxxxx Xxxxxxxx Frome Xxxxxxxxxx & Xxxxxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxxxx, Esq.
Facsimile: (000) 000-0000
Confirmation: (000) 000-0000
To the Holder: Little Meadow Corp.
c/o Icahn Associates Corp.
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx Xxxxx
Facsimile: (000) 000-0000
Confirmation: (000) 000-0000
With a copy to: Xxxxxx Xxxxxx Butowsky Xxxxxxx Xxxxxx & Xxxx
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxxx Xxxxx, Esq.
Facsimile: (000) 000-0000
Confirmation: (000) 000-0000
or such other address as any of the above may have furnished to the other
parties in writing in compliance with the terms of this Section.
6.2. WAIVERS: AMENDMENTS. No failure or delay of the Holder in
exercising any power or right hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise of any such right or power, or any
abandonment or discontinuance of steps to enforce such a right or power,
preclude any other or further exercise thereof or the exercise of any other
right or power. The rights and remedies of the Holder are cumulative and not
exclusive of any rights or remedies which it would otherwise have. The
provisions of this Warrant may be amended, modified or waived with (and only
with) the written consent of the Company and the Requisite Holders.
Any such amendment, modification or waiver effected
pursuant to this Section shall be binding upon the Holders of all Warrants and
Common Stock issued upon
-13-
exercise thereof, upon each future holder thereof and upon the Company. In the
event of any such amendment, modification or waiver, the Company shall give
prompt notice thereof to all Holders and, if appropriate, notation thereof shall
be made on all Warrants thereafter surrendered for registration of transfer or
exchange.
No notice or demand on the Company in any case shall
entitle the Company to any other or further notice or demand in similar or other
circumstances.
6.3. GOVERNING LAW. This Warrant shall be construed in
accordance with and governed by the laws of the State of New York without regard
to principles of conflicts of law.
6.4. SURVIVAL OF AGREEMENTS; REPRESENTATIONS AND WARRANTIES,
ETC. All representations, warranties and covenants made by the Company herein or
in any certificate or other instrument delivered by or on behalf of it in
connection with the Warrants shall be considered to have been relied upon by the
Holder and shall survive the issuance and delivery of the Warrants, regardless
of any investigation made by the Holder, and shall continue in full force and
effect so long as any Warrant is outstanding.
6.5. COVENANTS TO BIND SUCCESSOR AND ASSIGNS. All covenants,
stipulations, promises and agreements in this Warrant contained by or on behalf
of the Company shall bind its successors and assigns, whether so expressed or
not.
6.6. SEVERABILITY. In case any one or more of the provisions
contained in this Warrant shall be invalid, illegal or unenforceable in any
respect, the validity, legality or enforceability of the remaining provisions
contained herein and therein shall not in any way be affected or impaired
thereby. The parties shall endeavor in good faith negotiations to replace the
invalid, illegal or unenforceable provisions with valid provisions the economic
effect of which comes as close as possible to that of the invalid, illegal or
unenforceable provisions.
6.7. SECTION HEADINGS. The sections headings used herein are
for convenience of reference only, are not part of this Warrant and are not to
affect the construction of or be taken into consideration in interpreting this
Warrant.
6.8. NO IMPAIRMENT. The Company shall not by any action
including, without limitation, amending its organizational documents 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, 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 the Holder against impairment. Without limiting the generality of
the foregoing, the Company will (a) take all such action as may be necessary or
appropriate in order that the Company may validly and legally issue fully paid
and nonassessable Common Stock upon the exercise of this Warrant, and (b) use
its commercially reasonable best 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.
-14-
IN WITNESS WHEREOF, Delicious Brands, Inc. has caused this
Warrant to be executed in its corporate name by one of its officers thereunto
duly authorized, and attested by its Secretary or an Assistant Secretary, all as
of the day and year first above written.
DELICIOUS BRANDS, INC.
By: /s/ Xxxxxxx X. Xxxxx
---------------------------------
Name: Xxxxxxx X. Xxxxx
Title: President and Chief Executive
Officer
Attest:
/s/ Xxxxxx X. Xxxxxx
-------------------------
Name: Xxxxxx X. Xxxxxx
Title: Secretary
-15-
FORM OF EXERCISE NOTICE
(To be executed upon exercise of Warrant)
TO:
The undersigned hereby irrevocably elects to exercise the
right to purchase represented by the attached Warrant for, and to purchase
thereunder, __________________ Common Stock, as provided for therein, and
tenders herewith payment of the Exercise Price in full in accordance with the
terms of the attached warrant.
Please issue a certificate or certificates for such Common
Stock in the following name or names and denominations:
If said number of Common Stock shall not be all the Common
Stock issuable upon exercise of the attached Warrant, a new Warrant is to be
issued in the name of the undersigned for the balance remaining of such Common
Stock.
Dated: _____________, _____
---------------------------------
Note: The above signature should correspond exactly with the name on
the face of the attached Warrant or with the name of the
assignee appearing in the assignment form below.
-16-
FORM OF CONVERSION NOTICE
(To be executed upon conversion of Warrant)
TO:
The undersigned hereby irrevocably converts the attached
Warrant with respect to shares of Common Stock which such holder would be
entitled to receive upon the conversion hereof.
Please issue a certificate or certificates for such Common
Stock in the following name or names and denominations:
If said number of Common Stock shall not be all the Common
Stock issuable upon conversion of the attached Warrant, a new Warrant is to be
issued in the name of the undersigned for the balance remaining of such Common
Stock.
Dated: _____________, _____
---------------------------------
Note: The above signature should correspond exactly with the name on
the face of the attached Warrant or with the name of the
assignee appearing in the assignment form below.
-17-
ASSIGNMENT
(To be executed upon assignment of Warrant)
For value received, ________________________________ hereby
sells, assigns and transfers unto __________________ the attached Warrant,
together with all rights, title and interest therein, and does hereby
irrevocably constitute and appoint ____________________ attorney to transfer
said Warrant on the books of , with full power of substitution in the premises.
---------------------------------
Note: The above signature should
correspond exactly with the name
on the face of the attached
Warrant.
-18-
