THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
OR ANY STATE SECURITIES LAW, AND MAY NOT BE OFFERED, SOLD, TRANSFERRED, PLEDGED,
HYPOTHECATED OR OTHERWISE DISPOSED OF UNLESS (I) A REGISTRATION STATEMENT UNDER
THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS IS EFFECTIVE AND CURRENT
WITH REGARD THERETO, OR (II) AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES
ACT AND APPLICABLE STATE SECURITIES LAWS IS AVAILABLE IN CONNECTION WITH SUCH
OFFER, SALE OR TRANSFER.
WARRANT TO PURCHASE
100,000 SHARES
WARRANT TO PURCHASE COMMON STOCK
of
THIS CERTIFIES that Goodbody International, Inc. or any subsequent
permitted transferee hereof (the "Holder"), has the right to purchase from BIG
XXXXX BRANDS, INC., a Delaware corporation (the "Company"), not more than
100,000 fully paid and nonassessable shares of the Company's Common Stock, $0.01
par value per share ("Common Stock"), at a price of $2.00 (U.S) per share,
subject to adjustment as provided below (the "Exercise Price"), at any time on
or before 5:00 p.m., Atlanta, Georgia time, on 4/7/02.
The Holder of this Warrant agrees with the Company that this Warrant is
issued and all rights hereunder shall be held subject to all of the conditions,
limitations and provisions set forth herein.
1. DATE OF ISSUANCE.
This Warrant shall be deemed to be issued on 4/7/97.
2. EXERCISE.
(a) Manner of Exercise. This Warrant may be exercised as to all or any
lesser number of full shares of Common Stock covered hereby upon surrender of
this Warrant, with the Exercise Form attached hereto duly executed, together
with the full Exercise Price (as defined in Section 3) for each share of Common
Stock as to which this Warrant is exercised, at the office of the Company, Big
Xxxxx Brands, Inc., 0000 Xxxx Xxxxxx Xxxx, Xxxxx 000, Xxxx Xxxxx, XX 00000,
Attention: President, Telephone No. (000) 000-0000, Telecopy No. (000) 000-0000
or at such other office or agency as the Company may designate in writing, by
overnight mail, with an advance copy of the Exercise Form attached as Exhibit A
("Exercise Form") by facsimile (such surrender and payment of the Exercise Price
hereinafter called the "Exercise of this Warrant").
(b) Date of Exercise. The "Date of Exercise" of the Warrant shall be
defined as the date that the advance copy of the Exercise Form is sent by
facsimile to the Company, provided that the original Warrant and Exercise Form
are received by the Company within five (5) business days thereafter. The
original Warrant and Exercise Form must be received within 5 business days of
the Date of Exercise, or the Exercise Form may, at the Company's option, be
considered void. Alternatively, the Date of Exercise shall be defined as the
date the original duly executed Exercise Form, Exercise Price and this warrant
are received by the Company, if Holder has not sent advance notice by facsimile.
(c) Cancellation of Warrant. This Warrant shall be canceled upon its
Exercise, and, as soon as practical after the Date of Exercise, the Holder
hereof shall be entitled to receive Common Stock for the number of shares
purchased upon such Exercise, and if this Warrant is not exercised in full, the
Holder shall be entitled to receive a new Warrant or Warrants (containing terms
identical to this Warrant) representing any unexercised portion of this Warrant
in addition to such Common Stock.
(d) Holder of Record. Each person in whose name any shares of Common
Stock are to be issued following an exercise of this Warrant shall, for all
purposes, be deemed to have become the Holder of record of such shares on the
Date of Exercise of this Warrant, irrespective of the date of delivery of such
shares. Nothing in this Warrant shall be construed as conferring upon the Holder
hereof any rights as a shareholder of the Company.
3. PAYMENT OF WARRANT EXERCISE PRICE.
The Exercise Price ("Exercise Price") shall equal $2.00 (U.S) ("Initial
Exercise Price") or, if the Date of Exercise is more than one (1) year after the
Date of Issuance, the lesser of (i) the Initial Exercise Price or (ii) the
"Lowest Reset Price", as that the term is defined below. The Company shall
calculate a "Reset Price" on each anniversary date of the Date of Issuance which
shall equal one hundred percent (100%) of the average Closing Bid Price of the
Company's Common Stock for the five (5) trading days ending on such anniversary
date of the Date of Issuance. The "Lowest Reset Price" shall equal the Lowest
Reset Price determined on an anniversary date of the Date of Issuance preceding
the Date of Exercise, taking into account, as appropriate, any adjustments made
pursuant to Section 5 hereof.
For purposes hereof, the term "Closing Bid Price" shall mean the
closing bid price on the NASDAQ SmallCap Market, or if no longer traded on the
NASDAQ SmallCap Market, the closing bid price on the Principal National
Securities Exchange or, if not so traded the National Market System, on which
the Common Stock is so traded and if not available, the mean of the high and low
prices on the Principal National Securities Exchange or the National Market
System on which the Common Stock is so traded. NASDAQ will take precedence.
Payment of the Exercise Price may be made by either of the following,
or a combination thereof, at the election of Holder:
2
(i) Cash Exercise: cash, certified check or cashiers check or wire
transfer; or
(ii) Cashless Exercise: surrender of this Warrant at the principal
office of the Company together with notice of cashless election, in which event
the Company shall issue Holder a number of shares of Common Stock computed using
the following formula:
X = Y (A-B)/A
where: X = the number of shares of Common Stock to be issued to Holder.
Y = the number of shares of Common Stock for which this Warrant is
being exercised.
A = the Market Price of the one share of Common Stock (for purposes of
this Section 3(ii), the "Market Price" shall be defined as the average closing
bid price of the Common Stock for the five trading days prior to the Date of
Exercise of this Warrant (the "Average Closing Bid Price"), as reported by the
National Association of Securities Dealers Automated Quotation System
("NASDAQ"), or if the Common Stock is not traded on NASDAQ, the average of the
daily high and low sales prices in the over-the-counter market; provided,
however, that if the Common Stock is listed on a stock exchange, the Market
Price shall be the average of the daily high and low sales prices on such
exchange. If the Common Stock is/was not traded during the five trading days
prior to the Date of Exercise, then the closing bid price for the last publicly
traded day shall be deemed to be the closing bid price for any and all (if
applicable) days during such five trading day period, or the average of the
daily high and low sales prices (if no closing bid prices are reported).
B = the Exercise Price
It is intended that the Common Stock issuable upon exercise of this Warrant in a
cashless exercise transaction shall be deemed to have been acquired at the time
this Warrant was issued, for purposes of Rule 144(d)(3)(ii).
(iii) Warrants cannot be exercised at a price higher than the market
price at time of exercise.
4. TRANSFER AND REGISTRATION.
Transfer Rights. Subject to the provisions of Section 8 of this
Warrant, this Warrant may be transferred on the books of the Company, wholly or
in part, in person or by attorney, upon surrender of this Warrant properly
endorsed. This Warrant shall be canceled upon such surrender and, as soon as
practicable thereafter, the person to whom such transfer is made shall be
entitled to receive a new Warrant or Warrants as to the portion of this Warrant
transferred, and the Holder of this Warrant shall be entitled to receive a new
Warrant or Warrants as to the portion hereof retained.
5. ANTI-DILUTION ADJUSTMENTS.
3
(a) Stock Dividend. If the Company shall at any time declare a dividend
payable in shares of Common Stock, then the Holder hereof, upon Exercise of this
Warrant after the record date for the determination of Holders of Common Stock
entitled to receive such dividend, shall be entitled to receive upon Exercise of
this Warrant, in addition to the number of shares of Common Stock as to which
this Warrant is Exercised, such additional shares of Common Stock as such Holder
would have received had this Warrant been Exercised immediately prior to such
record date.
(b) Recapitalization or Reclassification. If the Company shall at any
time effect a recapitalization, reclassification or other similar transaction of
such character that the shares of Common Stock shall be changed into or become
exchangeable for a larger or smaller number of shares, then upon the effective
date thereof, the number of shares of Common Stock which the Holder hereof shall
be entitled to purchase upon Exercise of this Warrant shall be increased or
decreased, as the case my be, in direct proportion to the increase or decrease
in the number of shares of Common Stock by reason of such recapitalization,
reclassification or similar transaction, and the Exercise Price shall be, in the
case of an increase in the number of shares, proportionately decreased and, in
the case of a decrease in the number of shares, proportionally increased.
Company shall give the Warrant Holder 30 days prior notice of any transaction
described in this Section 5(b).
(c) Distributions. If the Company shall at any time distribute to
Holders of Common Stock cash, evidences of indebtedness or other securities or
assets (other than cash dividends or distributions payable out of earned surplus
or net profits for the current or preceding year) then, in any such case, the
Holder of this Warrant shall be entitled to receive upon exercise of this
Warrant, with respect to each share of Common Stock issuable upon such Exercise,
the amount of cash or evidences of indebtedness or other securities or assets
which such Holder would have been entitled to receive with respect to each such
share of Common Stock as a result of the happening of such event had this
Warrant been Exercised immediately prior to the record date or other date fixing
shareholders to be affected by such event (the "Determination Date") or, in lieu
thereof, if the Board of Directors of the Company should so determine at the
time of such distribution, a reduced Exercise Price determined by multiplying
the Exercise Price on the Determination Date by a fraction, the numerator of
which is the result of such Exercise Price reduced by the value of such
distribution applicable to one share of Common Stock such value to be determined
by the Board in its discretion and the denominator of which is such Exercise
Price.
(d) Notice of Consolidation or Merger. If the Company shall at any time
consolidate or merge with any other corporation or transfer all or substantially
all of its assets, then the Company shall deliver written notice to the Holder
of such merger, consolidation or sale of assets at least thirty (30) days prior
to the closing of such merger, consolidation or sale of assets and this Warrant
shall terminate and expire immediately prior to the closing of such merger,
consolidation or sale of assets.
(e) Exercise Price Defined. No adjustment to the exercise price shall
be made unless such adjustment would change the Exercise Price at the time by
$.01 or more; provided, however, that all adjustments not so made shall be
deferred and made when the aggregate
4
thereof would change the Exercise Price at the time by $.01 or more. No
adjustment made pursuant to any provision of this Section 5 shall have the
effect of increasing the total consideration payable upon Exercise of this
Warrant in respect of all the Common Stock as to which this Warrant may be
exercised.
(f) In the event that at any time, as a result of an adjustment made
pursuant to this Section 5, the Holder of this Warrant shall, upon Exercise of
this Warrant, become entitled to receive shares and/or other securities or
assets (other than Common Stock) then, wherever appropriate, all references
herein to shares of Common Stock shall be deemed to refer to and include such
shares and/or other securities or assets; and thereafter the number of such
shares and/or other securities or assets shall be subject to adjustment from
time to time in a manner and upon terms as nearly equivalent as practicable to
the provisions of this Section 5.
6. FRACTIONAL INTERESTS.
No fractional shares or scrip representing fractional shares shall be
issuable upon the Exercise of this Warrant, but on Exercise of this Warrant, the
Holder hereof may purchase only a whole number of shares of Common Stock. The
Company shall make a payment in cash in respect of any fractional shares which
might otherwise be issuable upon Exercise of this Warrant, calculated by
multiplying the fractional share amount by the closing bid price of the
Company's Common Stock on the Date of Exercise as reported by the NASDAQ Small
Cap or National Market or such other exchange as Company's Common Stock is
traded on.
7. RESERVATION OF SHARES.
The Company shall at all times reserve for issuance such number of
authorized and unissued shares of Common Stock (or other securities substituted
therefor as herein above provided) as shall be sufficient for Exercise of this
Warrant. The Company covenants and agrees that upon Exercise of this Warrant,
all shares of Common Stock issuable upon such Exercise shall be duly and validly
issued, fully paid, nonassessable, and not subject to preemptive rights, rights
of first refusal or similar rights of any person or entity.
8. RESTRICTIONS ON TRANSFER.
(a) This Warrant and the Common Stock issuable on Exercise hereof have
not been registered under the Securities Act of 1933, as amended, or any state
securities law and may not be offered, sold, transferred, pledged, hypothecated
or otherwise disposed of in the absence of registration or the availability of
an exemption from registration under the Act and applicable state securities
laws. All shares of Common Stock issued upon Exercise of this Warrant shall bear
an appropriate legend to such effect, if applicable.
(b) Assignment. Assuming the conditions of (a) above regarding
registration or exemption have been satisfied, the Holder may offer, sell,
transfer, assign, pledge or otherwise dispose of this Warrant, in whole or in
part. Holder shall deliver to Company this
5
Warrant and a written notice, substantially in the form of the Assignment
attached hereto as Exhibit B, indicating the person or persons to whom the
Warrant shall be assigned and the respective number of warrants to be assigned
to each assignee and an opinion of recognized securities counsel stating that
the requirements of the Securities Act, as amended, and applicable state
securities laws have been met with respect to such transfer or that such
transfer is exempt from the requirements of the Act, and applicable state
securities laws which counsel shall be reasonably acceptable to the Company .
The Company shall effect the assignment within ten days, and shall deliver to
the assignee(s) designated by Holder a Warrant or Warrants of like tenor and
terms for the appropriate number of shares assignee by accepting, agreed to be
bound by the terms thereof.
(c) The Warrant and Common Stock issuable upon conversion are intended
to be held for investment purposes and not with an intent to distribution, as
defined in the Act.
9. BENEFITS OF THIS WARRANT.
Nothing in this Warrant shall be construed to confer upon any person
other then the Company and the Holder of this Warrant any legal or equitable
right, remedy or claim under this Warrant and this Warrant shall be for the sole
and exclusive benefit of the Company and the Holder of this Warrant.
10. APPLICABLE LAW.
This Warrant is issued under and shall for all purposes be governed by
and construed in accordance with the laws of the state of New York, without
giving effect to conflict of law provisions thereof. Jurisdiction for any
dispute regarding this Warrant lies in the State of New York.
11. LOSS OF WARRANT.
Upon receipt by the Company of evidence of the loss, theft, destruction
or mutilation of this Warrant, and (in the case of loss, theft or destruction)
of indemnity and/or security reasonably satisfactory to the Company, and upon
surrender and cancellation of this Warrant, if mutilated, the Company shall
execute and deliver a new Warrant of like tenor and date.
12. NOTICE OR DEMANDS.
Notices or demands pursuant to this Warrant to be given or made by the
Holder of this Warrant to or on the Company shall be sufficiently given or made
if sent by certified or registered mail, return receipt requested, postage
prepaid, and addressed, until another address is designated in writing by the
Company, Attn: Big Xxxxx Brands, Inc., 0000 Xxxx Xxxxxx Xxxx Xxxxx 000, Xxxx
Xxxxx, XX 00000, Attention: President, Telephone No. (000) 000-0000, Telecopy
No. (000) 000-0000 and shall be deemed given upon receipt. Notices or demands
pursuant to this Warrant to be given or made by the Company to or on the Holder
of this Warrant shall be sufficiently given or made if sent by certified or
registered mail, return receipt requested, postage prepaid, and addressed,
Goodbody International, Inc., 4514
0
Xxxxxxxx Xxxxxxxx Xx., Xxxxx 000, Xxxxxxx, XX 00000 until another address is
designated in writing by Holder pursuant to this paragraph.
7
IN WITNESS WHEREOF, this Warrant issued to Goodbody International, Inc.
is hereby executed and effective as of the date set forth below.
Dated as of
----------------------
By: /s/ S. Xxxxx Xxxxxxxx
-------------------------------------
Print Name:
-----------------------------------
Title:
---------------------------------
8
EXHIBIT A
EXERCISE FORM
TO:
The undersigned hereby irrevocably exercises the right to purchase
__________________ of the shares of Common Stock of ___________________,
evidenced by the attached Warrant, and herewith makes payment of the Exercise
Price with respect to such shares in full, all in accordance with the conditions
and provisions of said Warrant.
The undersigned agrees not to offer, sell, transfer or otherwise
dispose of any of such Common Stock, except in accordance with the provisions of
Section 8 of the Warrant, and consents that the following legend may be affixed
to the certificates for the Common Stock hereby subscribed for, if such legend
is applicable:
"The securities represented by this certificate have not been
registered under the Securities Act of 1933, as amended (the
"Securities Act"), or any state securities law, and may not be
offered, sold, transferred, pledged, hypothecated or otherwise
disposed of until either (i) a registration statement under
the Securities Act and applicable state securities laws is
effective and current with regard thereto, or (ii) an
exemption from registration under the Securities Act and
applicable state securities laws is available in connection
with such offer, sale or transfer."
The Common Stock being acquired hereunder is intended by the acquirer
to be held for investment purposes and not with an intent to distribution, as
defined in the Act. The undersigned requests that such shares be issued, and a
warrant representing any unexercised portion thereof be issued, pursuant to the
Warrant in the name of the Registered Holder and delivered to the undersigned at
the address set forth below:
Dated:
-----------------------------------------------------------------
Signature of Registered Holder
-----------------------------------------------------------------
Name of Registered Holder (print)
-----------------------------------------------------------------
Address
-----------------------------------------------------------------
-----------------------------------------------------------------
EXHIBIT B
ASSIGNMENT
(To be executed by the registered Holder
desiring to transfer the Warrant)
FOR VALUE RECEIVED, the undersigned Holder of the attached Warrant hereby sells,
assigns and transfers unto the person or persons below named the right to
purchase ________ shares of the Common Stock of Big Xxxxx Brands, Inc. evidenced
by the attached Warrant and does hereby irrevocably constitute and appoint
__________________________ attorney to transfer the said Warrant on the books of
the Company, with full power of substitution in the premises. By accepting the
warrant, based upon this assignment, the assignee will be deemed to have agreed
to the terms of this Warrant as if such assignee were the original holder of the
Warrant.
Dated: ------------------------------
Signature
Fill in for new Registration of Warrant:
-----------------------------------------
Name
-----------------------------------------
Address
-----------------------------------------
Please print name and address of assignee
including zip code number)
------------------------------------------------------------------------
NOTICE
The signature to the foregoing Exercise Form or Assignment must correspond to
the name as written upon the face of the attached Warrant in every particular,
without, without alteration or enlargement or any change whatsoever.
