AMENDMENT NO. 1 TO SERIES B WARRANT AGREEMENT
This Amendment No. 1 to Series B Warrant Agreement
(this "Amendment") is dated as of December 30, 1996 by and
between House of Fabrics, Inc., a Delaware corporation (the
"Company"), and American Stock Transfer & Trust Company, as
warrant agent (the "Warrant Agent").
W I T N E S S E T H:
WHEREAS, the Company and the Warrant Agent have entered
into a Series B Warrant Agreement, dated as of July 31, 1996 (the
"Warrant Agreement"), pursuant to which the Company proposes to
issue up to 256,821 Series B Warrants to purchase Units, each
Unit consisting of (i) one share of the Company's Common Stock,
par value $.01 per share, and (ii) one Series C Warrant, each
Series C Warrant entitling the registered owner thereof to
purchase one share of Common Stock; and
WHEREAS, the Warrant Agreement was executed in
connection with the Third Amended Joint Plan of Reorganization,
dated May 23, 1996, as modified, of the Company and others, which
Plan of Reorganization was confirmed by the order of the United
States Bankruptcy Court of the Central District of California,
Judge Xxxxxxxx X. Xxx, dated July 10, 1996 and duly entered on
July 10, 1996 in the proceeding entitled House of Fabrics, Inc.
et. al., debtors, case number SV94-50060KL (the "Plan of
Reorganization"); and
WHEREAS, the Plan of Reorganization provides that the
exercise price for the Series B Warrants shall be an amount equal
to the greater of (i) 140% of the average daily Trading Price (as
defined in the Warrant Agreement) per share for the Trading Days
(as defined in the Warrant Agreement) during the Pricing Period
(as defined in the Warrant Agreement), and (ii) $16.00; and
WHEREAS, due to a typographical error, Section 9 of the
Warrant Agreement provides that the exercise price shall be the
lesser of clauses (i) and (ii) above; and
WHEREAS, as permitted by Section 19 of the Warrant
Agreement, the parties wish to enter into this Amendment to
correct the typographical error noted above.
NOW, THEREFORE, the Company and the Warrant Agent
hereby agree as follows:
1. Section 9 of the Warrant Agreement is hereby
amended in its entirety to read as follows:
"SECTION 9. Exercise Price.
The price per share at which each Unit shall
be purchasable upon exercise of a Warrant (the
"Exercise Price") shall be an amount equal to the
greater of (i) 140% of the average of the daily
Trading Price (as defined in Section 10.1 (d)) per
share for the Trading Days (as defined in Section
10.1 (d)) during the Pricing Period (rounded down
to the nearest cent), and (ii) $16.00. 'Pricing
Period' is defined as the period commencing on
November 29, 1996 and ending at the close of
business on December 27, 1996."
2. The second paragraph of Exhibit A to the Warrant
Agreement is hereby amended in its entirety to read as follows:
"The `Exercise Price' per Warrant shall be $_____
[THE GREATER OF (I) 140% OF THE AVERAGE OF THE DAILY
TRADING PRICE PER SHARE OF THE COMMON STOCK FOR THE
TRADING DAYS DURING THE PERIOD COMMENCING ON NOVEMBER
29, 1996 AND ENDING AT THE CLOSE OF BUSINESS ON
DECEMBER 27, 1996, AND (II) $16.00.]"
3. Except as expressly set forth in this Amendment,
the Warrant Agreement shall remain in full force and effect. The
Warrant Agreement, as amended by this Amendment, is in all
respects ratified and confirmed, and this Amendment shall be
deemed to be part of the Warrant Agreement in the manner and to
the extent herein provided.
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed as of the day and year first above
written.
HOUSE OF FABRICS, INC.
By: /s/ Xxxx X. Xxxxxxx
---------------------------------
Title: Vice Chairman of the Board
ATTEST:
/s/ Xxxxxx X. Xxxxxxxx
------------------------------
Title: Senior Vice President,
Secretary and General
Counsel
AMERICAN STOCK TRANSFER & TRUST
COMPANY, as Warrant Agent
By: /s/ Xxx Xxxx
---------------------------------
Title: Vice President
ATTEST:
/s/ Xxx Xxxxxx
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Title:
