Exhibit 4.10
Common Stock Warrant No.__
This Warrant has not been registered under the Securities Act of 1933, as
amended (the "Act"), or any applicable state securities laws, and may not be
sold or transferred unless such sale or transfer is in accordance with the
registration requirements of such Act and applicable laws or some other
exemption from the registration requirements of such Act and applicable laws is
available with respect thereto.
This Warrant is non-detachable from the shares of Series C Preferred Stock
held by the holder of this Warrant and may not be assigned, transferred or
conveyed separately from such shares of Series C Preferred Stock subject to
Section 20 hereof.
This Warrant is subject to the forfeiture provisions and certain other
restrictions contained in Article 9 of the Merger Agreement. By acceptance of
this Warrant, Holder hereby agrees to be bound by such forfeiture provisions and
restrictions.
MOTHERS WORK, INC.
WARRANT TO PURCHASE
COMMON STOCK
1. Issuance. This Warrant is issued by Mothers Work, Inc., a Delaware
corporation (the "Company"), to ________________(the "Holder"), a Seller under
the Agreement and Plan of Merger (the "Merger Agreement"), dated October 15,
2001, by and among the Company, iMaternity Acquisition Corp., a Delaware
corporation and a wholly-owned subsidiary of the Company ("Merger Sub"),
eSpecialty Brands, LLC, a Delaware limited liability company ("eSpecialty") and
the Sellers listed on Schedule I to the Merger Agreement (each, a "Seller" and
collectively, the "Sellers"), on this 17th day of October, 2001 (the "Warrant
Issuance Date"). This Warrant is issued as part of the merger consideration
received by such Seller in connection with the merger of Merger Sub with and
into eSpecialty pursuant to the Merger Agreement.
2. Purchase Price; Number of Shares. Subject to the terms and conditions
hereinafter set forth, the registered holder of this Warrant (the "Holder") is
entitled, upon surrender of this Warrant with the duly executed Notice of
Exercise attached hereto as Exhibit A ("Notice of Exercise"), at the office of
the Company, to purchase _____________________________________________ (______)
shares of common stock of the Company, par value $.01 per share (the "Common
Stock"), at the per share exercise price of Twenty Two Dollars and Fifty Cents
($22.50) (the "Purchase Price") (each such share shall sometimes be hereinafter
referred to as a "Warrant Share"). If an exercise of any portion of this Warrant
is to be made in connection with a registered public offering or the sale of the
Company, the exercise of any portion of this Warrant may, at the election of the
holder hereof, be conditioned upon the consummation of the public offering or
sale of the Company in which case such exercise shall not be deemed to be
effective until the consummation of such transaction. Notwithstanding anything
to the contrary herein, this Warrant shall not be exercisable from the date of
the Qualifying Notice of Offer to Purchase (as defined in the Merger Agreement)
until the date the Holder accepts such Qualifying Offer to Purchase by tendering
such Holder's shares of Series C Preferred Stock in accordance with the terms of
the Qualifying Offer to Purchase.
3. Payment of Purchase Price. The Purchase Price may be paid (i) in cash or
by bank or cashier's check, (ii) by the surrender by the Holder to the Company
of shares of Series C Cumulative Preferred Stock, par value $.01 per share, of
the Company (the "Series C Preferred Stock"), with each such share of Series C
Preferred Stock so surrendered being credited against the Purchase Price in an
amount equal to the Stated Value (as defined in the Series C Cumulative
Preferred Stock Certificate of Designation of the Company, filed with the
Secretary of the State of Delaware on October 17, 2001) thereof plus any accrued
and unpaid dividends thereon to the date of surrender or (iii) by any
combination of the foregoing.
4. Mandatory Exercise. During the period from the third anniversary of the
Warrant Issuance Date until the Expiration Date (the "Mandatory Exercise
Period"), the Holder shall exercise this Warrant promptly following written
notice from the Company to the Holder (the "Mandatory Exercise Notice") that the
Company has elected its Mandatory Exercise Right (as hereinafter defined) in
respect of this Warrant. "Mandatory Exercise Right" means the right of the
Company (exercisable in its sole discretion) to require the Holder to exercise
this Warrant during the Mandatory Exercise Period if, during such period, the
last reported sales price of the Common Stock on the Nasdaq National Market (or
other primary exchange, market or quotation service, if the Common Stock is not
traded on the Nasdaq National Market) equals or exceeds Forty Dollars ($40.00)
per share (as may be proportionately adjusted in accordance in accordance with
Section 11 hereof) (the "Minimum Trading Price") for at least ninety (90)
consecutive trading days. If the Holder fails to exercise this Warrant within
thirty (30) days after receipt of a Mandatory Exercise Notice, then the Company
may exercise the Warrant on behalf of the Holder by means of a net issue
election as provided in Section 5 hereof.
5. Net Issue Election. Upon exercise of the Warrant, the Holder may elect
to receive, without the payment by the Holder of any additional consideration,
shares equal to the value of this Warrant or any portion hereof by the surrender
of this Warrant or such portion to the Company, with the duly executed Notice of
Exercise, at the office of the Company. Thereupon, the Company shall issue to
the Holder such number of fully paid and nonassessable shares of Common Stock as
is computed using the following formula:
X=Y(A-B)
--------
A
where X = the number of shares to be issued to the Holder pursuant to this
Section 5.
Y = the number of shares covered by this Warrant in respect of which the
net issue election is made pursuant to this Section 5.
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A = the fair market value of one (1) share of Common Stock. If the
Company's securities are registered pursuant to the Act, the fair market value
shall mean the average high and low prices of the Common Stock on the day prior
to the exercise of this Warrant, if the Common Stock is being traded on a
national exchange; or the last reported sale price on the day prior to exercise
of this Warrant, if the Common Stock is traded on the Nasdaq National Market,
and if the Common Stock is not traded on a national exchange; or the closing bid
price (or average of bid prices) last quoted on the day prior to the exercise of
this Warrant by an established quotation service for over-the-counter
securities, if the Common Stock is not reported on the Nasdaq National Market or
a national exchange. If the election occurs in connection with the registration
of securities, then the fair market value shall be the price offered to the
public. Otherwise, the fair market value shall be as determined in good faith by
the Board, at the time the net issue election is made pursuant to this Section
5.
B = the Purchase Price in effect under this Warrant at the time the net
issue election is made pursuant to this Section 5.
6. Partial Exercise. This Warrant may be exercised in part, and the Holder
shall be entitled to receive a new warrant, which shall be dated as of the date
of this Warrant, covering the number of shares in respect of which this Warrant
shall not have been exercised, and be otherwise identical to this Warrant.
7. Issuance Date. The person or persons in whose name or names any
certificate representing shares of Common Stock is issued hereunder shall be
deemed to have become the holder of record of the shares represented thereby as
at the close of business on the date this Warrant is duly exercised with respect
to such shares, whether or not the transfer books of the Company shall be
closed. The issuance of certificates for shares of Common Stock upon exercise of
this Warrant shall be made without charge to the holder for any issuance tax in
respect thereof or other cost incurred by the Company in connection with such
exercise and the related issuance of shares of Common Stock.
8. Warrant Shares Proxy. Each Warrant Share shall be subject to an
irrevocable proxy, a form of which is attached to the Merger Agreement (the
"Warrant Shares Proxy"). Such Warrant Share Proxy shall terminate, in respect of
any Warrant Share sold to a third party unaffiliated with the holder thereof.
9. Expiration Date. Unless terminated earlier pursuant to the forfeiture
provisions of the Merger Agreement, this Warrant shall expire at the close of
business on October 17, 2008 (the "Expiration Date"), and shall be void
thereafter.
10. Certain Covenants. The Company covenants that it will at all times from
and after the date hereof reserve and keep available such number of its
authorized shares of Common Stock, free from all preemptive rights, rights of
first refusal or similar rights therein, as will be sufficient to permit the
exercise of this Warrant in full. The Company further covenants that, assuming
the receipt by the Company of the consideration therefor, such shares as may be
issued pursuant to the exercise of this Warrant will, upon issuance, be duly and
validly issued, fully paid and nonassessable and free from all taxes, liens and
charges with respect to the issuance thereof. Promptly after delivery of this
Warrant, the Company will file with the
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domestic securities exchange on which the Company's Common Stock is traded (the
"Applicable Exchange"), the appropriate notification form for the listing of
additional shares in a form reasonably acceptable to the Holder of this Warrant
pursuant to the rules and regulations of the Applicable Exchange in respect of
the Common Stock issuable upon exercise of this Warrant. For so long as the
Company is required to file reports under Section 13 of the Exchange Act (as
hereinafter defined), the Company shall file all reports required to be filed by
it under the Securities Act of 1933 (as amended, the "Securities Act") and the
Securities Exchange Act of 1934 (as amended, the "Exchange Act") and the rules
and regulations adopted by the Securities Exchange Commission ("SEC") thereunder
and shall take such further action as any holder or holders of Common Stock
issuable upon exercise of this Warrant may request, all to the extent required
to enable such holder to sell such Common Stock (and all shares issued in
respect of such Common Stock) pursuant to (i) Rule 144 adopted by the SEC under
the Securities Act (as such rule may be amended from time to time) or any
similar rule or regulation hereafter adopted by the SEC or (ii) a registration
statement on Form S-2 or S-3 or any similar registration form hereafter adopted
by the SEC. Upon request in connection with a transfer or registration, the
Company shall deliver to any holder of this Warrant a written statement as to
whether it has complied with such requirements. Promptly after delivery of this
Warrant, the Company will file with the Applicable Exchange the appropriate
notification form for the listing of additional shares in a form reasonably
acceptable to the holder of this Warrant pursuant to the rules and regulations
of the Applicable Exchange in respect of the Common Stock issuable upon exercise
of this Warrant and the Company shall at all times cause the Common Stock
issuable upon exercise of this Warrant to be listed on the Applicable Exchange.
11. Adjustments. If at any time after the Warrant Issuance Date, the
Company subdivides the Common Stock, by split-up or otherwise, or combines the
Common Stock, or issues additional shares of Common Stock in payment of a stock
dividend on the Common Stock, the number of shares issuable on the exercise of
this Warrant shall forthwith be proportionately increased in the case of a
subdivision or stock dividend, or proportionately decreased in the case of a
combination, and the Purchase Price (and Minimum Trading Price) shall forthwith
be proportionately decreased in the case of a subdivision or stock dividend, or
proportionately increased in the case of a combination. Whenever the Purchase
Price (and Minimum Trading Price) is adjusted, as herein provided, the Company
shall promptly deliver to the Holder a certificate of an officer of the Company
setting forth the Purchase Price (and Minimum Trading Price) after such
adjustment and setting forth a brief statement on the facts requiring such
adjustment.
12. Reorganization, Reclassification, Merger, Consolidation or Disposition
of Assets. Any recapitalization, reorganization, reclassification,
consolidation, merger, sale of all or substantially all of the Company's assets
to another Person or other transaction which is effected in such a way that
holders of Common Stock are entitled to receive (either directly or upon
subsequent liquidation) solely stock, securities or other non-cash consideration
with respect to or in exchange for Common Stock is referred to herein as an
"Organic Change." Prior to the consummation of any Organic Change, the Company
shall make appropriate provision (in form and substance reasonably satisfactory
to the holder of this Warrant) to insure that the holder of this Warrant shall
thereafter have the right to acquire and receive, in lieu of or addition to (as
the case may be) the shares of Common Stock immediately theretofore acquirable
and receivable upon the exercise of such holder's Warrant, such shares of stock,
securities or other non-cash
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consideration as may be issued or distributed with respect to or in exchange for
the number of shares of Common Stock immediately theretofore acquirable and
receivable upon exercise of such holder's Warrant had such Organic Change not
taken place. In any such case, the Company shall make appropriate provision (in
form and substance reasonably satisfactory to the holder of this Warrant) with
respect to such holders' rights and interests to insure that the provisions of
this Warrant shall thereafter be applicable to the Warrants. The Company shall
not effect any such consolidation, merger or sale, unless prior to the
consummation thereof, the successor entity (if other than the Company) resulting
from consolidation or merger or the entity purchasing such assets assumes by
written instrument (in form and substance reasonably satisfactory to the holder
of this Warrant) the obligation to deliver to each such holder such shares of
stock, securities or other non-cash consideration as, in accordance with the
foregoing provisions, such holder may be entitled to acquire.
13. No Rights as a Stockholder. The Holder shall not be entitled to vote or
receive dividends or be deemed the holder of Common Stock or any other
securities of the Company that may at any time be issuable on the exercise
hereof for any purpose, nor shall anything contained herein be construed to
confer upon the Holder, as such, any of the rights of a stockholder of the
Company or any right to vote for the election of directors or upon any matter
submitted to stockholders at any meeting thereof, or to give or withhold consent
to any corporate action (whether upon any recapitalization, issuance of stock,
reclassification of stock, change of par value, or change of stock to no par
value, consolidation, merger, conveyance, or otherwise) or to receive notice of
meetings, or to receive dividends or subscription rights or otherwise until the
Warrant shall have been exercised as provided herein (and then only to the
extent so exercised), except for the notices provided in Section 13 hereof.
14. Fractional Shares. In no event shall any fractional share of Common
Stock be issued upon any exercise of this Warrant.
15. Notices of Record Date, Etc. In the event of:
a. any setting a record date by the Company in respect 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 reclassification of the capital stock of the Company, capital
reorganization of the Company, consolidation or merger involving the
Company, or sale or conveyance of all or substantially all of its assets,
c. any adjustment to the Purchase Price, the Minimum Trading Price, or
the number of shares of Common Stock issuable upon exercise of this
Warrant; or
d. any voluntary or involuntary dissolution, liquidation or winding-up
of the Company,
then and in each such event the Company will mail or cause to be mailed to the
Holder a notice specifying (i) the date on which any such record is to be taken
for the purpose of such dividend,
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distribution or right, and stating the amount and character of such dividend,
distribution or right, or (ii) the date on which any such reclassification,
reorganization, consolidation, merger, sale or conveyance, adjustment,
dissolution, liquidation or winding-up is to take place, and the time, if any is
to be fixed, as of which the holders of record in respect of such event are to
be determined. Such notice shall be mailed at least ten (10) days prior to the
date specified in such notice on which any such action is to be taken.
16. Amendment. The terms of this Warrant may be amended, modified or waived
only by written agreement of the Company and the Holder.
17. Warrant Register Transfer, Etc.
a. The Company will maintain a register containing the names and
addresses of the registered holders of outstanding Warrants. The Holder may
change its address as shown on the warrant register by written notice to
the Company requesting such change. Any notice or written communication
required or permitted to be given to the Holder may be given by certified
mail or delivered to the Holder at its address as shown on the warrant
register.
b. This Warrant may not be transferred or assigned in whole or in part
by the Holder without the prior written consent of the Company, which
consent shall not be unreasonably withheld (it being understood that the
Company may, in its sole discretion, withhold consent to any transfer of
the Warrant to any other Seller (other than to an affiliate as provided
below) or to any person seeking to obtain control of the Company), except
that prior written consent of the Company will not be required for a
transfer of the Warrant in whole by the Holder to an "affiliate" of the
Holder. Prior to the effectiveness of any transfer of this Warrant, the
transferee must agree in writing to be bound by the forfeiture provisions
and certain other restrictions contained in Article 8 of the Merger
Agreement and to accept this Warrant subject to such provisions and
restrictions. An "affiliate" of the Holder shall mean any other person or
entity directly or indirectly controlling, controlled by or under direct or
indirect common control with the Holder. Prior to and as a condition to
effecting any such transfer the Holder shall deliver to the Company an
opinion of counsel reasonably satisfactory to the Company to the effect
that such transfer will comply with all applicable securities laws.
c. In case this Warrant shall be mutilated, lost, stolen or destroyed,
the Company shall issue a new warrant of like tenor and denomination and
deliver the same (i) in exchange and substitution for and upon surrender
and cancellation of any mutilated Warrant, or (ii) in lieu of any Warrant
lost, stolen or destroyed, upon receipt of evidence reasonably satisfactory
to the Company of the loss, theft or destruction of such Warrant (including
a reasonably detailed affidavit with respect to the circumstances of any
loss, theft or destruction) and of indemnity reasonably satisfactory to the
Company.
18. No Impairment. The Company will not, by amendment of its Certificate of
Incorporation or through any reclassification, capital reorganization,
consolidation, merger, sale or conveyance of assets, dissolution, liquidation,
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 action as may be necessary or appropriate in order to
protect the rights of the Holder.
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Without limiting the generality of the foregoing, the Company shall use
commercially reasonable efforts to obtain all such authorizations, exemptions or
consents from any public regulatory body having jurisdiction over it as may be
reasonably necessary to enable the Company to perform its obligations under this
Warrant.
19. Governing Law. The provisions and terms of this Warrant shall be
governed by and construed in accordance with the internal laws of the
Commonwealth of Pennsylvania without regard to the principles of conflict of
laws of the Commonwealth of Pennsylvania or any other jurisdiction.
20. Successors and Assigns; Non-Detachable. This Warrant shall be binding
upon the Company's successors and assigns and shall inure to the benefit of the
Holder's successors, legal representatives and permitted assigns. This Warrant
is non-detachable from the shares of Series C Preferred Stock held by Holder and
may not be assigned, transferred or conveyed separately from such shares of
Series C Preferred Stock and then only in conjunction with a the execution and
joinder of the transferee as provided in Section 9.12(d) of the Merger
Agreement; provided, however, during a Put Option Default Period (as defined in
the Series C Certificate of Designation of the Company filed with the Secretary
of State of the State of Delaware on October 17, 2001) Holder may transfer or
convey this Warrant separately from the shares of Series C Preferred Stock held
by such Holder.
21. Business Days. If the last or appointed day for the taking of any
action required or the expiration of any right granted herein shall be a
Saturday or Sunday or a legal holiday in the Commonwealth of Pennsylvania, then
such action may be taken or right may be exercised on the next succeeding day
which is not a Saturday or Sunday or such a legal holiday.
22. References to Common Stock. If there is a change such that the
securities issuable upon exercise of the Warrants are issued by an entity other
than the Company or there is a change in the class of securities so issuable,
then the term "Common Stock" shall mean one share of the security issuable upon
exercise of the Warrants if such security is issuable in shares, or shall mean
the smallest unit in which such security is issuable if such security is not
issuable in shares.
IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by
its duly authorized officer, as of the date above written.
MOTHERS WORK, INC.
By: /s/ Xxxxxxx X. Xxxxxxxx
-----------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: President
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EXHIBIT A
NOTICE OF EXERCISE FORM
To: ____________________________ Dated: ______________________
The undersigned, pursuant to the provisions set forth in the attached
Warrant, hereby irrevocably elects to purchase the number of shares of Common
Stock covered by such Warrant and [Holder must elect (a), (b) or (c)]:
(a) purchase the number of shares of Common Stock covered by this Warrant
and herewith makes payment of $_________ , representing the full Purchase Price
for a total of _______ shares of Common Stock at the exercise price per share
provided for in this Warrant; or
(b) purchase the number of shares of Common Stock covered by such Warrant
and herewith attaches __________ shares of the Holder's Series C Preferred
Stock, in accordance with Section 3 of this Warrant, as payment of
$____________, representing the full Purchase Price for a total of _____ shares
of Common Stock at the exercise price per share provided for in this Warrant; or
(c) purchase the number of shares of Common Stock covered by this Warrant,
and herewith exchanges this Warrant, in accordance with the net issue exercise
provisions of Section 5 herein, for __________ shares of Common Stock covered by
this Warrant.
The certificate(s) for such shares shall be issued in the name of the
undersigned or as otherwise indicated below:
HOLDER
_____________________________________
By:__________________________________
Title:_______________________________
Name for Registration:_______________
Mailing Address:_____________________
_____________________________________
