BROTHERS GOURMET COFFEES, INC.
and
XXXXXXX XXXXX CREDIT PARTNERS, L.P.
as Holder
--------------------------------
Warrants to Purchase 400,000 Shares of Common Stock
--------------------------------
WARRANT AGREEMENT
Dated as of December 9, 1997
TABLE OF CONTENTS
Page
1. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2. REGISTRATION, FORM AND EXECUTION OF WARRANTS. . . . . . . . . . . . 3
2.1. REGISTRATION . . . . . . . . . . . . . . . . . . . . . . . 3
2.2. FORM OF WARRANT. . . . . . . . . . . . . . . . . . . . . . 3
3. EXERCISE OF WARRANTS. . . . . . . . . . . . . . . . . . . . . . . . 4
3.1. MANNER OF EXERCISE . . . . . . . . . . . . . . . . . . . . 4
3.2. PAYMENT OF TAXES . . . . . . . . . . . . . . . . . . . . . 5
3.3. FRACTIONAL SHARES. . . . . . . . . . . . . . . . . . . . . 5
4. TRANSFER, DIVISION AND COMBINATION. . . . . . . . . . . . . . . . . 6
4.1. TRANSFER . . . . . . . . . . . . . . . . . . . . . . . . . 6
4.2. DIVISION AND COMBINATION . . . . . . . . . . . . . . . . . 6
4.3. MAINTENANCE OF BOOKS . . . . . . . . . . . . . . . . . . . 6
5. ADJUSTMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
5.1. ADJUSTMENT FOR CHANGE IN CAPITAL STOCK . . . . . . . . . . 6
5.2. ADJUSTMENT FOR RIGHTS ISSUE. . . . . . . . . . . . . . . . 7
5.3. ADJUSTMENT FOR OTHER DISTRIBUTIONS . . . . . . . . . . . . 8
5.4. ADJUSTMENT FOR COMMON STOCK ISSUE. . . . . . . . . . . . . 9
5.5. ADJUSTMENT FOR CONVERTIBLE SECURITIES ISSUE. . . . . . . . 10
5.6. MARKET PRICE . . . . . . . . . . . . . . . . . . . . . . . 11
5.7. CONSIDERATION RECEIVED . . . . . . . . . . . . . . . . . . 12
5.8. WHEN ADJUSTMENT MAY BE DEFERRED. . . . . . . . . . . . . . 13
5.9. WHEN NO ADJUSTMENT REQUIRED. . . . . . . . . . . . . . . . 13
5.10. NOTICE OF ADJUSTMENT. . . . . . . . . . . . . . . . . . . 13
5.11. VOLUNTARY REDUCTION . . . . . . . . . . . . . . . . . . . 13
5.12. NOTICE OF CERTAIN TRANSACTIONS. . . . . . . . . . . . . . 14
5.13. PRESERVATION OF PURCHASE RIGHTS UPON RECLASSIFICATION,
CONSOLIDATION, ETC. . . . . . . . . . . . . . . . . . . . 14
5.14. ADJUSTMENT TO THE NUMBER OF SHARES PURCHASABLE UPON
EXERCISE OF WARRANTS; CURRENT WARRANT PRICE NOT LESS
THAN PAR VALUE. . . . . . . . . . . . . . . . . . . . . . 14
5.15. OTHER DILUTIVE EVENTS . . . . . . . . . . . . . . . . . . 15
5.16. COMPANY DETERMINATION FINAL . . . . . . . . . . . . . . . 15
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5.17. FORM OF WARRANTS. . . . . . . . . . . . . . . . . . . . . 15
6. NOTICES TO HOLDERS. . . . . . . . . . . . . . . . . . . . . . . . . 15
6.1. NOTICE OF ADJUSTMENTS. . . . . . . . . . . . . . . . . . . 16
6.2. NOTICE OF CORPORATE ACTION . . . . . . . . . . . . . . . . 16
7. COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
8. RESERVATION AND AUTHORIZATION OF COMMON STOCK: REGISTRATION WITH
OR APPROVAL OF ANY GOVERNMENTAL AUTHORITY . . . . . . . . . . . . . 17
9. STOCK AND WARRANT TRANSFER BOOKS. . . . . . . . . . . . . . . . . . 17
10. LOSS OR MUTILATION . . . . . . . . . . . . . . . . . . . . . . . . 17
11. OFFICE OF COMPANY. . . . . . . . . . . . . . . . . . . . . . . . . 18
12. REPURCHASE BY COMPANY OF WARRANTS. . . . . . . . . . . . . . . . . 18
12.1. COMPANY'S OBLIGATION TO REPURCHASE WARRANTS . . . . . . . 18
12.2. PAYMENT OF REPURCHASE PRICE. . . . . . . . . . . . . . . 18
13. MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . . . . . 19
13.1. NOTICE GENERALLY. . . . . . . . . . . . . . . . . . . . . 19
13.2. SUCCESSORS AND ASSIGNS. . . . . . . . . . . . . . . . . . 20
13.3. AMENDMENT . . . . . . . . . . . . . . . . . . . . . . . . 20
13.4. SEVERABILITY. . . . . . . . . . . . . . . . . . . . . . . 20
13.5. HEADINGS. . . . . . . . . . . . . . . . . . . . . . . . . 20
13.6. GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . . 20
13.7. COUNTERPARTS. . . . . . . . . . . . . . . . . . . . . . . 20
EXHIBITS
Exhibit A - Form of Warrant Certificate
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THIS WARRANT AGREEMENT (this "Warrant Agreement"), dated as of
December 9, 1997, is made by and between Brothers Gourmet Coffees, Inc., a
Delaware corporation (the "Company"), and Xxxxxxx Sachs Credit Partners,
L.P., a Bermuda corporation (the "Warrant Holder").
W I T N E S S E T H:
WHEREAS, the Company has entered into that certain Amended and
Restated Loan and Security Agreement of even date herewith with Xxxxxxx Xxxxx
Credit Partners, L.P., as agent for the benefit of all lenders signatory to
such Loan and Security Agreement (as the same may hereafter be amended,
modified, supplemented or restated from time to time in accordance with the
terms thereof, the "Loan Agreement"); and
WHEREAS, a condition to the Holder and the lenders entering into
the Loan Agreement is that the Company issue to holder warrants, as
hereinafter described (the "Warrants"), to purchase up to an aggregate of
400,000 shares of the Company's Common Stock; and
WHEREAS, the purpose of this Warrant Agreement is to set forth the
terms and conditions which shall govern the issuance of all of the Warrants,
the purchase of Common Stock of the Company upon the exercise thereof, the
adjustments in the terms and price of such Warrants pursuant to the
anti-dilution provisions hereof and such other terms and conditions as
hereinafter set forth;
NOW, THEREFORE, in consideration of the foregoing and for the
purpose of defining the terms and provisions of the Warrants and the
respective rights and obligations thereunder and hereunder of the Company and
the Holder and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged and affirmed, the Company and
the Holder hereby agree as follows:
1. DEFINITIONS
As used in this Warrant Agreement, the following terms have the
respective meanings set forth below:
"ADDITIONAL SHARES OF COMMON STOCK" shall mean all shares of Common
Stock issued by the Company after the date hereof, other than Warrant Stock.
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"BUSINESS DAY" shall mean any day that is not a Saturday or Sunday
or a day on which banks are required or permitted to be closed in the State
of New York.
"COMMON STOCK" shall mean (except where the context otherwise
indicates) the Common Stock, $.0001 par value per share, of the Company as
constituted on the date hereof, and any capital stock into which such Common
Stock may thereafter be changed, and shall also include shares of common
stock of any successor or acquiring corporation received by or distributed to
the holders of Common Stock of the Company in the circumstances contemplated
by Section 5.
"COMPANY" shall have the meaning assigned to such term in the first
paragraph of this Warrant Agreement.
"COMPANY'S PRINCIPAL OFFICE" shall mean the principal office of the
Company in 0000 Xxxxxx Xxxx, Xxxxx 000X, Xxxx Xxxxx, Xxxxxxx 00000 (or such
other office of the Company acceptable to the Holder as set forth in a
written notice provided to the Holder).
"CURRENT WARRANT PRICE" shall mean, in respect of a share of Common
Stock at any date herein specified, $1.50 per share of Common Stock, subject
to adjustment in accordance with Section 5.
"EXPIRATION DATE" shall mean December 9, 2002.
"GAAP" shall mean generally accepted accounting principles in the
United States of America as from time to time in effect.
"MAJORITY HOLDERS" shall mean the holders of Warrants exercisable
for in excess of 50% of the aggregate number of shares of Common Stock then
purchasable upon exercise of all Warrants.
"NASD" shall mean the National Association of Securities Dealers,
Inc., or any successor corporation thereto.
"OUTSTANDING" shall mean, when used with reference to Common Stock,
at any date as of which the number of shares thereof is to be determined, all
issued shares of Common Stock, except shares then owned or held by or for the
account of the Company or any subsidiary thereof, and shall include all
shares issuable in respect of outstanding scrip or any certificates
representing fractional interests in shares of Common Stock.
"PERSON" shall mean any individual, sole proprietorship,
partnership, joint venture, trust, incorporated organization, association,
corporation, limited liability company, limited liability partnership,
institution, public benefit
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corporation, entity or government (whether federal, state, county, city,
municipal or otherwise, including, without limitation, any instrumentality,
division, agency, body or department thereof).
"WARRANT AGREEMENT" shall have the meaning assigned to such term in
the first paragraph of this Warrant Agreement.
"WARRANT PRICE" shall mean an amount equal to (1) the number of
shares of Common Stock being purchased upon exercise of a Warrant pursuant to
Section 4.1, MULTIPLIED by (2) the Current Warrant Price as of the date of
such exercise.
"WARRANT STOCK" shall mean the shares of Common Stock purchased by
the Holders of the Warrants upon the exercise thereof.
"WARRANTS" shall have the meaning assigned to such term in the
recitals to this Warrant Agreement, and shall include all warrants issued
upon transfer, division or combination of, or in substitution for, any
thereof. All Warrants shall at all times be identical as to terms and
conditions and date, except as to the number of shares of Common Stock for
which they may be exercised.
2. REGISTRATION, FORM AND EXECUTION OF WARRANTS
2.1. REGISTRATION
All Warrants shall be numbered and shall be registered in a warrant
register maintained at the Company's Principal Office by the Company as they
are issued. The Company shall be entitled to treat a Holder as the owner in
fact for all purposes whatsoever of each Warrant registered in such Holder's
name.
2.2. FORM OF WARRANT
The text of each Warrant and the Election to Purchase Form,
Assignment Form and Repurchase Form shall be substantially as set forth in
Exhibit A attached hereto. Each Warrant shall be executed on behalf of the
Company by its President or one of its Vice Presidents, under its corporate
seal reproduced thereon or facsimile thereof attested by its Secretary or an
Assistant Secretary. The signature of any of such officers on the Warrants
may be manual or facsimile.
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Warrants bearing the manual or facsimile signatures of individuals
who were at any time the proper officers of the Company shall bind the
Company, notwithstanding that such individuals or any one of them shall have
ceased to hold such offices prior to the delivery of such Warrants or did not
hold such offices on the date of this Warrant Agreement.
Warrants shall be dated as of the date of the date hereof upon
initial issuance and upon division, exchange, substitution or transfer, the
date thereof.
3. EXERCISE OF WARRANTS
3.1. MANNER OF EXERCISE
From and after the date hereof and until 5:00 p.m., New York City
time, on the Expiration Date, a Holder may exercise any of its Warrants, on
any Business Day, for all or any part of the number of shares of Common Stock
purchasable thereunder.
In order to exercise a Warrant, in whole or in part, a Holder shall
deliver to the Company at the Company's Principal Office, (1) a written
notice of such Holder's election to exercise such Warrant, which notice shall
include the number of shares of Common Stock to be purchased, (2) payment of
the Warrant Price for the account of the Company and (3) such Warrant. Such
notice shall be substantially in the form of the Election to Purchase Form
set forth on the reverse side of the form of Warrant Certificate attached as
Exhibit A hereto, duly executed by such Holder or its agent or attorney.
Upon receipt thereof, the Company shall, as promptly as practicable, and in
any event within five Business Days thereafter, deliver or cause to be
delivered to such Holder an executed certificate or certificates representing
the aggregate number of full shares of Common Stock issuable upon such
exercise. The stock certificate or certificates so delivered shall be, to
the extent possible, in such denomination or denominations as such Holder
shall request in the notice and shall be registered in the name of such
Holder or such other name as shall be designated in such notice. Each
Warrant shall be deemed to have been exercised and 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 to have become
a holder of record of such shares for all purposes, as of the date such
notice, together with cash, or certified check or official bank check or wire
transfer in lawful money of the United States of America for payment of the
Warrant Price and such Warrant, is received by the Company as described above
and all taxes required to be paid by such Holder, if any, pursuant to Section
3.2 prior to the issuance of such shares have been paid. If any Warrant
shall have been exercised in part, the Company shall, at the time of
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delivery of the certificate or certificates representing Warrant Stock,
deliver to the Holder a new Warrant evidencing the rights of such Holder to
purchase the unpurchased shares of Common Stock called for by such Warrant,
which new Warrant shall in all other respects be identical with the Warrant
exercised in part, or, at the request of such Holder, appropriate notation
may be made on such exercised Warrant and the same returned to such holder.
Notwithstanding any provision herein to the contrary, the Company shall not
be required to register shares in the name of any Person who acquired a
Warrant (or part thereof) or any Warrant Stock otherwise than in accordance
with such Warrant and this Warrant Agreement.
Payment of the Warrant Price shall be made at the option of the
Holder by certified or official bank check or wire transfer or surrender of
unexercised Warrant or any combination thereof, duly executed by such Holder
or by such Holder's attorney duly authorized in writing. Warrants so
surrendered shall have a value equal to the current market price (as defined
in Section 5.6) of the shares of Warrant Stock issuable upon exercise of such
Warrant minus the Current Warrant Price of such Warrant; PROVIDED, HOWEVER,
that if such exercise occurs in connection with, or within ten (10) business
days of, an event described in paragraph (a) of Section 6.2, then each
Warrant so surrendered shall have a value equal to the greater of (i) the
current market price (as defined in Section 5.6) of the shares of Warrant
Stock issuable upon exercise of such Warrant or (ii) the fair market value
(determined in a manner consistent with Section 5.7) of the consideration
that the Holder would have received in connection with such event with
respect to the number of shares of Warrant Stock issuable upon exercise of
such Warrant had such Warrant been exercised prior to the earlier of the
record date or the effective date for such event, in either case reduced by
the Current Warrant Price of such Warrant.
3.2. PAYMENT OF TAXES
All shares of Common Stock issuable upon the exercise of any
Warrant pursuant to the terms hereof shall be validly issued, fully paid and
nonassessable and without any preemptive rights. The Company shall pay any
documentary stamp taxes attributable to the initial issuance of Warrant Stock
upon the exercise of Warrants; PROVIDED that the Company shall not be
required to pay any tax or taxes that may be payable in respect of any
transfer involved in the issuance of any Warrant certificates or any
certificates for Warrant Stock in a name other than that of the registered
holder of a Warrant certificate surrendered upon the exercise of a Warrant,
and the Company shall not be required to issue or deliver such Warrant
certificates unless or until the person or persons requesting
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the issuance thereof shall have paid to the Company the amount of such tax or
shall have established to the satisfaction of the Company that such tax has
been paid or is not due.
3.3. FRACTIONAL SHARES
The Company shall not be required to issue a fractional share of
Common Stock upon exercise of any Warrant. Whenever any distribution of
warrants exercisable into fractional shares of Common Stock would otherwise
be called for, the actual distribution thereof will reflect a rounding up or
down to the nearest share of Common Stock, PROVIDED THAT, whenever any
distribution of a Warrant that is exercisable into exactly one-half of a
share of Common Stock would otherwise be called for, the actual distribution
will reflect a rounding down to the nearest share of Common Stock.
4. TRANSFER, DIVISION AND COMBINATION
4.1. TRANSFER
Transfer of any Warrant and all rights hereunder, in whole or in
part, shall be registered in the warrant register of the Company to be
maintained for such purpose at the Company's Principal Office, upon surrender
of such Warrant at the Company's Principal Office, together with a written
assignment of such Warrant substantially in the form set forth on the reverse
side of the form of Warrant Certificate attached as Exhibit A hereto duly
executed by the Holder or its agent or attorney and payment of all funds
sufficient to pay any taxes payable upon the making of such transfer. Upon
such surrender and, if required, such payment, and subject to Section 8
hereof, the Company shall execute and deliver a new Warrant or Warrants in
the name of the assignee or assignees and in the denomination specified in
such instrument of assignment, and shall issue to the assignor a new Warrant
evidencing the portion of such Warrant not so assigned, and the surrendered
Warrant shall promptly be cancelled. A Warrant, if properly assigned, may be
exercised by a new Holder for the purchase of shares of Common Stock without
having a new warrant issued.
4.2. DIVISION AND COMBINATION
Any Warrant may be divided or combined with other Warrants upon
presentation thereof at the Company's Principal Office, together with a
written notice specifying the names and denominations in which new Warrants
are to be issued, signed by the Holder or its agent or attorney. Subject to
compliance with Section 4.1, as to any transfer which may be involved in such
division or combination, the Company shall execute and deliver a new Warrant
or Warrants in
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exchange for the Warrant or Warrants to be divided or combined in accordance
with such notice.
4.3. MAINTENANCE OF BOOKS
The Company agrees to maintain, at the Company's Principal Office, the
warrant register for the registration of Warrants and the registration of
transfer of the Warrants.
5. ADJUSTMENTS
The Current Warrant Price and the number of Warrant Stock issuable
upon the exercise of each Warrant are subject to adjustment from time to time
upon the occurrence of the events enumerated in this Section 5.
5.1. ADJUSTMENT FOR CHANGE IN CAPITAL STOCK
If the Company:
(a) pays a dividend or makes a distribution on its Common Stock in shares
of its Common Stock;
(b) subdivides its outstanding shares of Common Stock into a greater
number of shares;
(c) combines its outstanding shares of Common Stock into a smaller number
of shares;
(d) makes a distribution on Common Stock in shares of its capital stock
other than Common Stock; or
(e) issues by reclassification of Common Stock any shares of its capital
stock;
then the exercise right and the Current Warrant Price in effect immediately
prior to such action shall be adjusted so that the holder of Warrants may
receive upon exercise of the Warrants the number of shares of capital stock
of the Company which it would have owned immediately following such action if
it had exercised the Warrants immediately prior to such action. The
adjustment shall become effective immediately after the record
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date in the case of a distribution and immediately after the effective date
in the case of a combination or reclassification.
If, after an adjustment, the holder of Warrants may receive shares of
two or more classes of capital stock of the Company, the Company and the
holders of a majority of the Warrants shall mutually agree upon the
allocation of the adjusted exercise price between the classes of capital
stock. After such allocation, the exercise privilege and the Current Warrant
Price of each class of capital stock shall thereafter be subject to
adjustment on terms comparable to those applicable to Common Stock in this
Section 5.
5.2. ADJUSTMENT FOR RIGHTS ISSUE
If the Company distributes any rights, options or warrants to all holders
of Common Stock entitling them for a period expiring within 60 days after the
record date mentioned below to purchase shares of Common Stock at a price per
share less than the current market price per share on that record date, the
Current Warrant Price shall be adjusted in accordance with the formula:
O + (N)
x P
M
-----------
W(1) = W x O + N
where
W(1) = the adjusted Current Warrant Price.
W = the then current Current Warrant Price.
O = the number of shares of Common Stock outstanding on the record
date.
N = the number of additional shares of Common Stock offered or
issuable on the exercise of the rights, options or warrants.
P = the offering price per share of the additional shares subject to
the rights or warrants.
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M = the current market price per share of Common Stock on the record
date.
The adjustment shall be made successively whenever any such
rights, options or warrants are issued and shall become effective immediately
after the record date for the determination of stockholders entitled to
receive the rights, options or warrants.
If at the end of the period during which such warrants or rights
are exercisable, not all warrants or rights shall have been exercised, the
Current Warrant Price shall be immediately readjusted to what it would have
been if "N" in the above formula had been the number of shares actually
issued.
5.3. ADJUSTMENT FOR OTHER DISTRIBUTIONS
If the Company distributes to all holders of Common Stock any of its
assets (including cash) or debt securities or any rights or warrants to purchase
assets, debt securities or other securities of the Company, the Current Warrant
Price shall be adjusted in accordance with the formula:
M - F
------
W(1) = W x M
where:
W(1) = the adjusted Current Warrant Price.
W = the then current Current Warrant Price.
M = the current market price per share of Common Stock on the record
date mentioned below.
F = the aggregate fair market value (as determined by an Appraiser
chosen in accordance with Section 5.6), on the record date, of
the assets (including cash), securities, rights or warrants so
distributed divided by the number of outstanding shares of Common
Stock on the record date;
PROVIDED, that, in the event that the value of F exceeds the value of M, or in
the event that the value of M exceeds the value of F by less than 10%, in lieu
of the foregoing
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adjustment, adequate provision shall be made so that the holders of the
Warrants shall receive a pro rata share of the aggregate distribution based
upon the maximum number of shares of Common Stock at the time issuable to
such holders (determined without regard to whether the Warrants are
exercisable at such time).
The adjustment shall be made successively whenever any such
distribution is made and shall become effective immediately after the record
date for the determination of stockholders entitled to receive the
distribution.
If at the end of the period during which any such warrants or
rights are exercisable, not all of such warrants or rights shall have been
exercised, the Current Warrant Price shall be immediately readjusted to what
it would have been if "F" in the above formula had not included the fair
market value on the record date of the expired warrants or rights, but were
still divided by the same number of outstanding shares of Common Stock.
This Section 5.3 does not apply to distributions of rights, options
or warrants referred to in Section 5.2.
5.4. ADJUSTMENT FOR COMMON STOCK ISSUE
If the Company issues shares of Common Stock for consideration per
share less than the current market price per share on the date the Company
fixes the offering price of such additional shares, the Current Warrant Price
shall be adjusted in accordance with the formula:
P
-
O + M
-----
W(1) = W x A
where:
W(1) = the adjusted Current Warrant Price.
W = the then current Current Warrant Price.
O = the number of shares outstanding immediately prior to the
issuance of such additional shares.
P = the aggregate consideration received for the issuance of such
additional shares.
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M = the current market price per share on the date of issuance of
such additional shares.
A = the number of shares outstanding immediately after the issuance
of such additional shares.
The adjustment shall be made successively whenever any such
issuance is made, and shall become effective immediately after such issuance.
This Section 5.4 does not apply to:
(a) any of the transactions or distributions described in Sections 5.2,
5.3 or 5.5, or
(b) the conversion or exchange of securities convertible or exchangeable
for Common Stock and the exercise of rights or warrants issued to the
holders of Common Stock, in each case only if the issuance of such
securities, rights or warrants were subject to the provisions of this
Section 5.
5.5. ADJUSTMENT FOR CONVERTIBLE SECURITIES ISSUE
If the Company issues any securities convertible into or
exchangeable or exercisable for Common Stock (other than the securities
issued in transactions described in Sections 5.2 and 5.3) for consideration
per share of Common Stock initially deliverable upon conversion, exchange or
exercise of such securities less than the current market price per share on
the date of issuance of such securities, the Current Warrant Price shall be
adjusted in accordance with the formula:
P
-
O + M
-----
W(1) = W x O + D
where:
W(1) = the adjusted Current Warrant Price.
W = the then current Current Warrant Price.
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O = the number of shares outstanding immediately prior to the
issuance of such securities which are convertible into or
exchangeable or exercisable for Common Stock.
P = the aggregate consideration received for the issuance of such
securities.
M = the current market price per share of Common Stock on the date of
issuance of such securities.
D = the maximum number of shares deliverable upon conversion,
exchange or exercise of such securities at the initial
conversion, exchange or exercise rate.
The adjustment shall be made successively whenever any such
issuance is made, and shall become effective immediately after such issuance.
If all of the Common Stock deliverable upon conversion, exchange or
exercise of such securities has not been issued when such securities are no
longer outstanding, then the Current Warrant Price shall immediately be
readjusted to the Current Warrant Price which would then be in effect had the
adjustment upon the issuance of such securities been made on the basis of the
actual number of shares of Common Stock issued upon conversion, exchange or
exercise of such securities.
This Section 5.5 does not apply to any of the transactions or
distributions described in Sections 5.2 and 5.3.
5.6. MARKET PRICE
The "current market price" per share of Common Stock on any date is
the average of the Quoted Prices of the Common Stock for 15 consecutive
trading days commencing 16 days before the date in question. The "Quoted
Price" of the Common Stock is the last reported sales price of the Common
Stock as reported by the Nasdaq National Market, or if the Common Stock is
listed on another national securities exchange, the last reported sales price
of the Common Stock on such exchange which shall be for consolidated trading
if applicable to such exchange, or if neither so reported or listed, the last
reported bid price of the Common Stock. In the absence of one or more such
quotations, the current market price shall be determined by mutual agreement
of the Company and the holders of a majority of the Warrants or, in the
absence of such mutual agreement, shall be determined in good faith by a
nationally recognized investment banking firm that is a member firm of the
NASD and independent of the Company and chosen in accordance with the
following sentence (an "Appraiser"). The Appraiser shall be chosen by mutual
agreement of the holders of a majority of the Warrants and the Company;
PROVIDED, that if there shall be a disagreement as to the selection of any
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Appraiser, then each of the Company and the holders of a majority of the
Warrants shall choose one investment banking firm satisfying the foregoing
criteria and those two firms then shall agree upon a third such investment
banking firm who shall act as the Appraiser. If applicable, in connection
with the sale of units consisting of Common Stock and other securities, such
investment bank shall take into consideration the value of each component of
such unit. If there shall be more than one class of Common Stock
outstanding, the "current market price" per share of Common Stock shall be
the highest of the "current market prices" per share of such classes of
Common Stock.
5.7. CONSIDERATION RECEIVED
For purposes of any computation with respect to consideration
received pursuant to Sections 5.4 and 5.5, the following shall apply:
(a) in the case of the issuance of shares of Common Stock for
cash, the consideration shall be the amount of such cash
(provided that in no case shall any deduction be made for any
commissions, discounts or other expenses incurred by the
Company for any underwriting of the issue or otherwise in
connection therewith) plus, where the issuance is pursuant to
the exercise of an option, warrant or right, all cash amounts
paid to the Company for such option, warrant or right at its
issue, including without limitation, any amount allocable to
such option, warrant, or right if issued together with other
securities in a unit;
(b) in the case of the issuance of shares of Common Stock for a
consideration in whole or in part other than cash, the
consideration other than cash shall be deemed to be the fair
market value thereof as determined by an Appraiser, whose
determination shall be given to the holders of the Warrants;
and
(c) in the case of the issuance of securities convertible into or
exchangeable for shares of Common Stock, the aggregate
consideration received therefor shall be deemed to be the
consideration received by the Company for the issuance of such
securities plus the additional minimum consideration, if any,
to be received by the Company upon the conversion or exchange
thereof (the consideration in each case to be determined in
the same manner as provided in clauses (a) and (b) of this
Section 5.7).
5.8. WHEN ADJUSTMENT MAY BE DEFERRED
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If the amount of any adjustment of the Current Warrant Price
required pursuant to this Section 5 would be less than one percent (1%) of
the Current Warrant Price in effect at the time such adjustment is otherwise
so required to be made, such amount shall be carried forward and adjustment
with respect thereto made at the time of and together with any subsequent
adjustment which, together with such amount and any other amount or amounts
so carried forward, shall aggregate at least one percent (1%) of such Current
Warrant Price. All calculations under this Section 5 shall be made to the
nearest cent or to the nearest 1/l00th of a share, as the case may be.
5.9. WHEN NO ADJUSTMENT REQUIRED
No adjustment need be made for (a) rights to purchase Common Stock
pursuant to a company plan for reinvestment of dividends, and (b) a change in
the par value or no par value of Common Stock; PROVIDED, that the Company
shall not increase the par value to exceed the Current Warrant Price. To the
extent the Warrants become exercisable into cash, no adjustment need be made
thereafter as to the cash. Interest will not accrue on the cash.
5.10. NOTICE OF ADJUSTMENT
Whenever an event occurs which requires an adjustment to the
Current Warrant Price or number of shares of Warrant Stock, the Company shall
promptly mail (first class) to the holders of the Warrants a notice of such
event and the computation of the adjustment. The Company shall provide the
holders of the Warrants with a certificate from the Company's Chief financial
officer briefly stating the facts requiring the adjustment and the manner of
computing it.
5.11. VOLUNTARY REDUCTION
The Company from time to time may reduce the Current Warrant Price
by any amount for any period of time if the period is at least 20 days and if
the reduction is irrevocable during the period. A reduction of the Current
Warrant Price pursuant to this Section 5.11 does not change or adjust the
current warrant price otherwise in effect for purposes of Sections 5.1, 5.2,
5.3, 5.4 or 5.5. The Company in its discretion may make such reductions in
the Current Warrant Price in addition to those required by this Section 5 as
it considers to be advisable in order that any event treated for federal
income tax purposes as a dividend of stock or stock rights shall not be
taxable to the recipients.
5.12. NOTICE OF CERTAIN TRANSACTIONS
If the Company takes any action that would require an adjustment
pursuant to Sections 5.1, 5.2, 5.3, 5.4 or 5.5, the Company shall mail (first
class) to the holders of the Warrants a notice stating the proposed record
date for a dividend or distribution or the proposed effective date of a
subdivision, combination, reclassification, consolidation, merger, transfer,
lease, liquidation or dissolution or any other transaction or event requiring
an adjustment in the Current Warrant Price. The Company shall mail the
notice at least 15 days before such date; PROVIDED, HOWEVER, that in no event
must the Company give the holders of the Warrants notice prior to the public
announcement of the event
-14-
requiring such adjustment. Failure to mail the notice or any defect in it
shall not affect the validity of the transaction.
5.13. PRESERVATION OF PURCHASE RIGHTS UPON RECLASSIFICATION, CONSOLIDATION,
ETC.
If the Company consolidates or merges with or into, or transfers or
leases all or substantially all its assets to, any person, upon consummation
of such transaction, the Warrants shall automatically become exercisable for
the kind and amount of securities, cash or other assets that the holder of a
Warrant would have owned immediately after the consolidation, merger or
transfer or lease if the holder had exercised the Warrant immediately before
the effective date of the transaction. Concurrently with the consummation of
such transaction, the corporation formed by or surviving any such
consolidation or merger if other than the Company, or the person to which
such sale or conveyance shall have been made, shall enter into a supplemental
Warrant Agreement so providing and further providing for adjustments which
shall be as nearly equivalent as may be practical to the adjustments provided
for in this Section. The successor Company shall mail to Warrant holders a
notice describing the supplemental Warrant Agreement.
If the issuer of securities deliverable upon exercise of Warrants
under the supplemental Warrant Agreement is an affiliate of the formed,
surviving, transferee or lessee corporation, that issuer shall join in the
supplemental Warrant Agreement.
If this Section 5.13 applies to any transaction, Sections 5.1, 5.2,
5.3, 5.4 and 5.5 shall not apply to such transaction. The provisions of this
Section 5.13 shall similarly apply to successive consolidations, mergers,
sales or conveyances.
5.14. ADJUSTMENT TO THE NUMBER OF SHARES PURCHASABLE UPON EXERCISE OF
WARRANTS; CURRENT WARRANT PRICE NOT LESS THAN PAR VALUE
Upon each adjustment of the Current Warrant Price pursuant to this
Section 5, each warrant shall thereupon evidence the right to purchase that
number of shares of Common Stock (calculated to the nearest hundredth of a
share) obtained by multiplying the number of shares of Common Stock
purchasable immediately prior to such adjustment upon exercise of the Warrant
by the Current Warrant Price in effect immediately prior to such adjustment
and dividing the product so obtained by the Current Warrant Price in effect
immediately after such adjustment. The adjustment pursuant to this Section
5.14 to the number of shares of Common Stock purchasable upon exercise of a
Warrant shall be made each time an adjustment of the Current Warrant Price is
made pursuant to this Section 5 (or would be made but for the proviso in
Section 5.3). In no event shall the Current Warrant Price be adjusted below
the par value per share of the Common Stock; PROVIDED, HOWEVER, that in the
event such adjustment would have been made but for this sentence, the number
of shares issuable upon exercise of a Warrant shall
-15-
be adjusted in accordance with the remainder of this Section 5.14 as though
such adjustment in the Current Warrant Price had been made.
5.15. OTHER DILUTIVE EVENTS
In case any event shall occur as to which the provisions of this
Section 5 are not strictly applicable but the failure to make any adjustment
would not fairly protect the purchase rights represented by the Warrants in
accordance with the essential intent and principles of such sections, then,
in each such case, the Company shall make a good faith adjustment to the
Current Warrant Price and number of shares of Warrant Stock into which each
Warrant is exercisable in accordance with the intent of this Section 5, and
upon the written request of the holders of a majority of the Warrants, shall
appoint a firm of independent certified public accounts of recognized
national standing (which may be the regular auditors of the Company), which
shall give their opinion upon the adjustment, if any, on a basis consistent
with the essential intent and principles established in Section 5, necessary
to preserve, without dilution, the purchase rights represented by the
Warrants. Upon receipt of such opinion, the Company will promptly mail a
copy thereof to the holder of each Warrant and shall make the adjustments
described therein.
5.16. COMPANY DETERMINATION FINAL
Absent manifest error, any determination that the Company or the
Board of Directors of the Company must make in good faith pursuant to
Sections 5.3, 5.6 or 5.8, shall be conclusive, if reasonable.
5.17. FORM OF WARRANTS
The Company may, at its option, issue new Warrant certificates
evidencing Warrants in such form as may be approved by its Board of Directors
to reflect any adjustment or change in the Current Warrant Price per Warrant
Stock and the number or kind or class of shares or other securities or
property purchasable under the Warrant Certificates made in accordance with
the provisions of this Agreement.
6. NOTICES TO HOLDERS
6.1. NOTICE OF ADJUSTMENTS
Whenever the number of shares of Common Stock for which a Warrant
is exercisable, or whenever the price at which a share of such Common Stock
may be purchased upon exercise of the Warrants, shall be adjusted pursuant to
Section 5, the Company shall forthwith prepare a certificate to be executed
by the chief financial officer of the Company setting forth, in reasonable
detail, the event requiring the adjustment and the method by which such
adjustment was calculated, specifying the number of shares of Common Stock
for which a Warrant is exercisable and describing the number and kind of any
other shares of stock or
-16-
other property for which a Warrant is exercisable, and any change in the
purchase price or prices thereof, after giving effect to such adjustment or
change. The Company shall promptly cause a signed copy of such certificate
to be delivered to each Holder in accordance with Section 13.1.
6.2. NOTICE OF CORPORATE ACTION
In case:
(a) of any consolidation or merger to which the Company is a party and
for which approval of any stockholders of the Company is required, or of the
conveyance or transfer of the properties and assets of the Company
substantially as an entirety, or of any reclassification or change of Common
Stock issuable upon exercise of the Warrants (other than a change in par
value, or from par value to no par value, or from no par value to par value,
or as a result of a subdivision or combination); or
(b) of the voluntary or involuntary dissolution, liquidation or winding
up of the Company;
Then the Company shall cause to be given to each of the Holders at his
or her address appearing on the Warrant register, at least 10 days prior to
the applicable record date hereinafter specified, or promptly in the case of
events for which there is no record date, in accordance with Section 13.1, a
written notice stating the date on which any such consolidation, merger,
conveyance, transfer, dissolution, liquidation or winding up is expected to
become effective or consummated, and the date as of which it is expected that
holders of record of shares of Common Stock shall be entitled to exchange
such shares for securities or other property, if any, deliverable upon such
reclassification, consolidation, merger, conveyance, transfer, dissolution,
liquidation or winding up. The failure to give the notice required by this
Section 6.2 or any defect therein shall not affect the legality or validity
of any consolidation, merger, conveyance, transfer, dissolution, liquidation
or winding up, or the vote upon any action.
7. COVENANTS
-17-
The Company will (1) not increase the par value of any shares of
Common Stock receivable upon the exercise of a Warrant above the amount
payable therefor upon such exercise immediately prior to such increase in par
value and (2) take all such action as may be necessary or appropriate in
order that the Company may validly and legally issue fully paid and
nonassessable shares of Common Stock upon the exercise of any Warrant.
8. RESERVATION AND AUTHORIZATION OF COMMON STOCK: REGISTRATION WITH OR
APPROVAL OF ANY GOVERNMENTAL AUTHORITY
From and after the date hereof, the Company shall at all times
reserve and keep available for issue upon the exercise of Warrants such
number of its authorized but unissued shares of Common Stock as will be
sufficient to permit the exercise in full of all outstanding Warrants. All
shares of Common Stock which shall be so issuable, when issued upon exercise
of any Warrant and payment therefor in accordance with the terms of this
Warrant Agreement and such Warrant, shall be duly and validly issued and
fully paid and nonassessable, and not subject to preemptive rights.
Before taking any action which would cause an adjustment reducing
the Current Warrant Price below the then par value, if any, of the shares of
Common Stock issuable upon exercise of the Warrants, the Company shall take
any corporate action which may be necessary in order that the Company may
validly and legally issue fully paid and nonassessable shares of such Common
Stock at such adjusted Current Warrant Price.
9. STOCK AND WARRANT TRANSFER BOOKS
The Company will not at any time, except upon dissolution,
liquidation or winding up of the Company, close its stock transfer books or
Warrant transfer books so as to result in preventing or delaying the exercise
or transfer of any Warrant.
10. LOSS OR MUTILATION
Upon receipt by the Company from any Holder of evidence
-18-
reasonably satisfactory to them of the ownership of and the loss, theft,
destruction or mutilation of such Holder's Warrant and indemnity reasonably
satisfactory to them, and in case of mutilation upon surrender and
cancellation thereof, the Company will execute and deliver in lieu thereof a
new Warrant of like tenor to such Holder.
11. OFFICE OF COMPANY
As long as any of the Warrants remain outstanding, the Company
shall maintain an office or agency (which may be the principal executive
offices of the Company) where the Warrants may be presented for exercise,
registration of transfer, division or combination as provided in this Warrant
Agreement. The Company shall initially maintain such an agency at the
Company's Principal Offices.
12. REPURCHASE BY COMPANY OF WARRANTS
12.1. COMPANY'S OBLIGATION TO REPURCHASE WARRANTS
Upon the occurrence of (a) a Change in Control (as defined in the
Loan Agreement) or (b) a termination of the Loan Agreement in accordance with
subsection 2.8(b) thereof, or at any time within 30 days prior to the
Expiration Date, a Holder shall have the right, upon written notice to the
Company, and without payment of any amounts by the Holder (including, without
limitation, the Warrant Price) to require the Company to repurchase from such
Holder, on the 10th day following delivery of such notice (or, if such day is
not a Business Day, the next succeeding Business Day) and in the manner set
forth in Section 12.2 below, each Warrant then held by such Holder for an
amount equal to $0.75 (the "Repurchase Price"); PROVIDED, HOWEVER, that
nothing herein shall preclude the exercise by such Holder of any portion of
such Warrant exercisable at any time prior to such repurchase.
12.2. PAYMENT OF REPURCHASE PRICE
On the date of any repurchase of Warrants pursuant to this Section
12, each Holder shall assign to Company such Holder's Warrant being
repurchased, without any representation or warranty, by surrender of such
Holder's Warrant to the Company at the Company's Principal Office and
delivery to the
-19-
Company of a completed Repurchase Form substantially in the form set forth on
the reverse side of the Form of Warrant Certificate attached as Exhibit A
hereto duly executed by the Holder or its agent or attorney, against payment
therefor of the Repurchased Price by check issued by the Company.
13. MISCELLANEOUS
13.1. NOTICE GENERALLY
Any notice, demand, request, consent, approval, declaration,
delivery or other communication hereunder to be made pursuant to the
provisions of this Warrant Agreement shall be sufficiently given or made if
in writing and either delivered in person with receipt acknowledged or sent
by registered or certified mail, return receipt requested, postage prepaid or
by telecopy and confirmed by telecopy answerback, addressed as follows:
(a) If to any Holder or holder of Warrant Stock, at its last known
address appearing on the warrant register of the Company maintained for such
purpose.
(b) If to the Company, at:
Brothers Gourmet Coffees, Inc.
0000 Xxxxxx Xxxx
Xxxxx 000X
Xxxx Xxxxx, Xxxxxxx 00000
Attention: Vice President-Finance and Administration
Phone: (000) 000-0000
Telecopy Number: (000) 000-0000
With a copy to:
Brownstein, Hyatt, Xxxxxx & Xxxxxxxxxx, P.C.
000 Xxxxxxxxxxx Xxxxxx
Twenty Second Floor
Denver, Colorado 80202-4437
Attention: Xxxx X. Xxxxxxx, Esq.
Phone: (000) 000-0000
TElecopy Number: (000) 000-0000
or at such other address as may be substituted by notice given as herein
provided. The giving of any notice required hereunder may be waived in
writing by the party entitled to receive such notice. Every notice, demand,
request, consent, approval, declaration, delivery or other communication
hereunder shall be deemed to have been duly given or served on the date on
which personally delivered, with receipt
-20-
acknowledged, telecopied and confirmed by telecopy answerback or five
Business Days after the same shall have been deposited in the United States
mail, certified with return receipt requested, whichever is earlier. Failure
or delay in delivering copies of any notice, demand, request, approval,
declaration, delivery or other communication to the Person designated above
to receive a copy shall in no way adversely affect the effectiveness of such
notice, demand, request, approval, declaration, delivery or other
communication.
13.2. SUCCESSORS AND ASSIGNS
All covenants and provisions of this Warrant Agreement by or for
the benefit of the Company shall bind and inure to the benefit of their
respective successors and assigns hereunder.
13.3. AMENDMENT
This Warrant Agreement and the Warrants may only be modified or
amended or the provisions hereof and thereof waived with the written consent
of the Company and the Majority Holders; PROVIDED, that no Warrant may be
modified or amended to reduce the number of shares of Common Stock for which
such Warrant is exercisable or to increase the price at which such shares may
be purchased upon exercise of such Warrant (other than giving effect to any
adjustment as provided herein and therein) without the prior written consent
of the Holder thereof.
13.4. SEVERABILITY
Wherever possible, each provision of this Warrant Agreement shall
be interpreted in such manner as to be effective and valid under applicable
law, but if any provision of this Warrant Agreement shall be prohibited by or
invalid under applicable law, such provision shall be ineffective to the
extent of such prohibition or invalidity, without invalidating the remainder
of such provision or the remaining provisions of this Warrant Agreement.
13.5. HEADINGS
The headings used in this Warrant Agreement are for the convenience
of reference only and shall not, for any purpose, be deemed a part of this
Warrant Agreement.
13.6. GOVERNING LAW
-21-
This Warrant Agreement and the Warrants shall be governed by the
laws of the State of New York, without regard to the provisions thereof
relating to conflict of laws.
13.7. COUNTERPARTS
This Warrant Agreement may be executed in any number of
counterparts and each of such counterparts shall for all purposes be deemed
to be an original, and all such counterparts shall together constitute one
and the same instrument.
-22-
IN WITNESS WHEREOF, the Company has caused this Warrant Agreement
to be duly executed by its duly authorized officers as of the date first
above written.
Dated: December 9, 1997
BROTHERS GOURMET COFFEES, INC.
By:_______________________________
Name:
Title:
-23-
EXHIBIT A
[FORM OF FACE OF WARRANT CERTIFICATE]
WARRANT TO PURCHASE COMMON STOCK
OF BROTHERS GOURMET COFFEES, INC.
-------------------------------------------------------------------------------
Warrant Certificate No.: Number of Warrants:
-------------------------------------------------------------------------------
See Reverse for Certain Definitions
Exercisable from and after __________ __, __________ until 5:00 p.m.,
New York City time on __________ __, 2002.
This Warrant Certificate certifies that [__________________] or registered
assigns, is the registered holder of the number of Warrants set forth above
expiring at 5:00 p.m., New York City time, on __________ __, __________ or, if
such date is not a business day, the next succeeding business day (the
"Warrants") to purchase Common Stock, par value $0.0001 per share (the "Common
Stock"), of Brothers Gourmet Coffees, Inc., a Delaware corporation (the
"Company"). The Common Stock issuable upon exercise of Warrants is hereinafter
referred to as the "Warrant Stock." Subject to the immediately succeeding
paragraph, each Warrant entitles the holder upon exercise to purchase from the
Company on or before 5:00 p.m., New York City time, on __________ __, 2002 or,
if such date is not a business day, the next succeeding business day, one share
of Common Stock, at the purchase price of $1.50 per share, each subject to
adjustment as set forth herein and in the Warrant Agreement dated as of
December, 1997 (the "Warrant Agreement") by and between the Company and Xxxxxxx
Xxxxx Credit Partners, Inc., a Bermuda corporation in whole or in part on and
subject to the terms and conditions set forth herein and in the Warrant
Agreement. Such purchase shall be payable in lawful money of the United States
of America by certified or official bank check or wire transfer or any
combination thereof to the order of the Company at the principal office of the
Company, but only subject to the conditions set forth herein and in the Warrant
Agreement. The number of shares of Common Stock for which each Warrant is
exercisable, and the price at which such shares may be purchased upon exercise
of each Warrant, are subject to adjustment upon the occurrence of certain events
as set forth in the Warrant Agreement. Whenever the number of shares of Common
Stock for which a Warrant is exercisable, or the price at which a share of such
Common Stock may be purchased upon exercise of the Warrants, is adjusted
pursuant to the Warrant Agreement, the Company shall cause to be given to each
of the registered holders of the Warrants at
-24-
such holders' addresses appearing on the warrant register written notice of
such adjustment by first class mail postage pre-paid.
No Warrant may be exercised before __________ p.m., New York City time, on
__________ __, 1997 or after 5:00 p.m., New York City time, on __________ __,
2002 or, if such date is not a business day, the next succeeding business day,
and to the extent not exercised by such time such Warrants shall become void.
Reference is hereby made to the further provisions of this Warrant
Certificate set forth on the reverse side hereof and such further provisions
shall for all purposes have the same effect as though fully set forth at this
place.
THIS WARRANT CERTIFICATE SHALL BE GOVERNED BY THE LAWS OF THE STATE OF
NEW YORK, WITHOUT REGARD TO THE PROVISIONS THEREOF RELATING TO CONFLICT OF
LAWS.
-25-
IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to
be signed by its President and has caused its corporate seal to be affixed
hereunto or imprinted hereon.
Dated:
(Seal)
Attest: BROTHERS GOURMET COFFEES, INC.
____________________________________ By:__________________________________
Name:_______________________________ Name:
Title: Secretary Title:
-26-
[FORM OF REVERSE OF WARRANT CERTIFICATE]
The Warrants evidenced by this Warrant Certificate are part of a duly
authorized issue of up to 400,000 Warrants expiring at 5:00 p.m., New York
City time, on __________ __, 2002 or, if such date is not a business day, the
next succeeding business day, entitling the holder on exercise to purchase
shares of Common Stock, par value $0.0001 per share, of the Company, and are
issued or to be issued pursuant to the Warrant Agreement, which Warrant
Agreement is hereby incorporated by reference in and made a part of this
instrument and is hereby referred to for a description of the rights,
limitation of rights, obligations, duties and immunities thereunder of the
Company and the Holders (the words "Holders" or "Holder" meaning the
registered holders or registered holder of the Warrants). A copy of the
Warrant Agreement may be obtained by the Holder hereof upon written request
to the Company.
Warrants may be exercised at any time on and after _____ p.m., New York
City time, on __________ __, 1997 and on or before 5:00 p.m., New York City
time, on __________ __, 2002 or, if such date is not a business day, the next
succeeding business day. The Holder of Warrants evidenced by this Warrant
Certificate may exercise them by surrendering this Warrant Certificate, with
the form of election to purchase set forth hereon properly completed and
executed, together with payment of the purchase price by certified or
official bank check or wire transfer or any combination thereof to the order
of the Company and the other required documentation. In the event that upon
any exercise of Warrants evidenced hereby the number of Warrants exercised
shall be less than the total number of Warrants evidenced hereby, there shall
be issued to the Holder hereof or his assignee a new Warrant Certificate
evidencing the number of Warrants not exercised. The Holder of Warrants
evidenced by this Warrant Certificate may require the Company, pursuant to
Section 12 of the Warrant Agreement, to repurchase such Warrants upon the
occurrence of certain events as set forth in the Warrant Agreement.
The Warrant Agreement provides that the number of shares of Common Stock
for which each Warrant is exercisable, and the price at which such shares may
be purchased upon exercise of each Warrant, are subject to adjustment upon
the occurrence of certain events as set forth in the Warrant Agreement. The
Company shall not be required to issue any fractional share of Common Stock
upon the exercise of any Warrant, but the Company shall round up or down to
the nearest share of Common Stock as provided in the Warrant Agreement.
Warrant Certificates, when surrendered at the office of the Company by
the registered Holder thereof in person or by such Holder's legal
representative or attorney duly authorized in writing, may be exchanged, in
the manner and subject to the limitations provided in the Warrant Agreement,
but without payment of any service
-27-
charge, for another Warrant Certificate or Warrant Certificates of like tenor
evidencing in the aggregate a like number of Warrants.
Upon due presentation for registration of transfer of this Warrant
Certificate at the office of the Company a new Warrant Certificate or Warrant
Certificates of like tenor and evidencing in the aggregate a like number of
Warrants shall be issued to the transferee in exchange for this Warrant
Certificate, subject to the limitations provided in the Warrant Agreement
without charge except for any tax imposed in connection therewith.
-28-
[ELECTION TO PURCHASE FORM]
[To be executed only upon exercise of Warrant]
The undersigned registered owner of this Warrant irrevocably exercises
this Warrant for the purchase of __________ Shares of Common Stock of
BROTHERS GOURMET COFFEES, INC. and herewith makes payment therefor, all at
the price and on the terms and conditions specified in this Warrant and the
Warrant Agreement and requests that certificates for the shares of Common
Stock hereby purchased (and any securities or other property issuable upon
such exercise) be issued in the name of and delivered to ____________________
whose address is ____________________ and, if such shares of Common Stock
shall not include all of the shares of Common Stock issuable as provided in
this Warrant, that a new Warrant of like tenor and date for the balance of
the shares of Common Stock issuable hereunder be delivered to the undersigned.
(Name of Registered Owner)
__________________________________________
(Signature of Registered Owner)
(Street Address)
__________________________________________
(City) (State) (Zip Code)
NOTICE: The signature on this election to purchase must correspond with the
name as written upon the face of the within Warrant in every
particular, without alteration or enlargement or any change whatsoever.
-29-
[ASSIGNMENT FORM]
FOR VALUE RECEIVED the undersigned registered owner of this Warrant
hereby sells, assigns and transfers unto the Assignee named below all of the
rights of the undersigned under this Warrant, with respect to the number of
shares of Common Stock set forth below:
NAME AND ADDRESS OF NO. OF SHARES OF
ASSIGNEE COMMON STOCK
------------------- ----------------
and does hereby irrevocably constitute and appoint ____________________
attorney-in-fact to register such transfer on the books of BROTHERS GOURMET
COFFEES, INC. maintained for the purpose, with full power of substitution in the
premises.
Dated:____________________ Print Name:____________________________
Signature:_____________________________
Witness:_______________________________
NOTICE: The signature on this assignment must correspond with the name as
written upon the face of the within Warrant in every particular,
without alteration or enlargement or any change whatsoever.
-30-
[REPURCHASE FORM]
FOR VALUE RECEIVED the undersigned registered owner of this Warrant
hereby notifies BROTHERS GOURMET COFFEES, INC. (the "Company") that it is
requiring the Company to repurchase this Warrant, with respect to the number
of shares of Common Stock set forth below:
NO. OF SHARES OF COMMON STOCK
-----------------------------
and does hereby irrevocably constitute and appoint ____________________
attorney-in-fact to register such repurchase on the books of the Company
maintained for the purpose, with full power of substitution in the premises.
Dated:____________________ Print Name:____________________________
Signature:_____________________________
Witness:_______________________________
NOTICE: The signature on this repurchase must correspond with the name as
written upon the face of the within Warrant in every particular,
without alteration or enlargement or any change whatsoever.
-31-
