Void after August 31, 2003
This Warrant and any shares acquired upon the exercise of this
Warrant have not been registered under the Securities Act of 1933. This Warrant
and such shares may not be sold or transferred in the absence of such
registration or an exemption therefrom under said Act and no transfer of this
Warrant or such shares shall be valid or effective unless and until such
conditions shall have been complied with.
ROLLING PIN KITCHEN EMPORIUM, INC.
COMMON STOCK PURCHASE WARRANT
ROLLING PIN KITCHEN EMPORIUM, INC. (the "Company"), having its
principal office at 0000 Xxxxxxx Xxxxxx Xxxx, Xxxxxxxx X, Xxxxxxx, Xxxxxxx 00000
hereby certifies that, for value received, Xxxx, Xxxxxx & Company ("LHC") or
assigns, is entitled, subject to the terms set forth below, to purchase from the
Company at any time on or from time to time after November 27, 1998 and before
5:00 P.M., New York City time, on August 31, 2003 (the "Expiration Date") 3,000
fully paid and non-assessable shares of Common Stock of the Company, at the
price per share of the Purchase Price. The number and character of such shares
of Common Stock and the Purchase Price as hereinafter defined are subject to
adjustment as provided herein.
This Warrant is one of the Common Stock Purchase Warrants (the
"Warrants") originally issued as of the Original Issue Date (as defined below)
and evidencing the right to purchase an aggregate of 3,000 shares of Common
Stock of the Company, subject to adjustment as provided herein.
As used herein the following terms, unless the context otherwise
requires, have the following respective meanings:
(a) The term "Company" includes any
corporation which shall succeed to or assume the obligations of the Company
hereunder.
(b) The term "Common Stock" means the Class A
Common Stock, $.01 par value, of the Company and its successors.
(c) The "Original Issue Date" is November 27,
1998, the date as of which the Warrant was first issued.
(d) The term "Other Securities" refers to any
stock (other than Common Stock) and other securities of the Company or any other
person (corporate or otherwise) which the holder of the Warrant at any time
shall be entitled to receive, or shall have received, upon the exercise of the
Warrant, in lieu of or in addition to Common Stock, or which at any time shall
be issuable or shall have been issued in exchange for or in replacement of
Common Stock or Other Securities pursuant to Section 6 or otherwise.
1
(e) The term "Purchase Price" shall be 165%
of the initial price to the public pursuant to which the Company first sells $1
million or more of Common Stock (taking into account gross proceeds, not net
proceeds), as set forth on the cover page of the prospectus contained in the
registration statement pertaining to such offering, as such price may be
adjusted pursuant to the terms hereof.
(f) The terms "registered" and
"registration" refer to a registration effected by filing a registration
statement in compliance with the Securities Act, to permit the disposition of
Common Stock (or Other Securities) issued or issuable upon the exercise of
Warrants, and any post-effective amendments and supplements filed or required to
be filed to permit any such disposition.
(g) The term "Registrable Securities" shall
mean the shares of Common Stock or Other Securities issuable upon exercise of
the Warrants, excluding Common Stock or other Securities that (a) have been
registered under the Securities Act pursuant to an effective registration
statement filed thereunder and disposed of in accordance with such registration
statement or (b) are eligible for sale under Rule 144(k) under the Securities
Act, or have been sold pursuant to Rule 144 under the Securities Act.
(h) The term "Registration Period" shall mean
the period commencing concurrently with the closing of the Company's first
public offering of $1 million or more of securities registered under the
Securities Act that takes place after the Original Issue Date and ending on the
earlier of the second anniversary thereof and the Expiration Date.
(i) The term "Securities Act" means the
Securities Act of 1933 as the same shall be in effect at the time.
1. Registration Rights.
1.1. Incidental Registration. During the Registration
Period, each holder of Registrable Securities will have a right to have its
Registrable Securities included in registration statements filed by the Company
on general registration forms under the Securities Act, except as otherwise
provided herein. The Company will notify each such holder in writing (the
"Company Notice") promptly after making the decision to file a registration
statement under the Securities Act with respect to the proposed sale of the
Company's equity securities (except with respect to registration statements
filed on Forms S-4 or S-8 or such others in similar form then in effect under
the Securities Act), specifying in the Company Notice the form of registration
statement, the number of shares of securities the Company proposes to register,
the name of the managing underwriter or underwriters (if any) and the general
2
terms and conditions of the proposed registration and sale. Subject to Section
1.6 and the remainder of this Section 1.1, if requested by any holder of
Registrable Securities in a writing (the "Investor Notice"), delivered to the
Company not later than 30 days after the Company gives the Company Notice, to
include in such registration statement Registrable Securities (the "Requested
Shares"), the Company will, unless prohibited by the Underwriter, include the
Requested Shares in the registration statement, and, if the proposed sale is to
be underwritten, to cause the underwriters of securities to be sold by the
Company in such registration statement to purchase such Requested Shares. In the
event that any registration pursuant to this Section 1.1 shall be an
underwritten offering of securities of the Company, any request by such holders
pursuant to this Section 1.1 to register the Requested Shares, may, but need
not, specify that such shares are to be included in the underwriting on the same
terms and conditions as the securities, if any, otherwise being sold through
underwriters under such registration. In the event of an underwritten offering
of securities of the Company, such notice shall also specify as to whether such
holder of Registrable Securities desires that any of such Requested Shares to be
included in any such registration statement be subject to any over-allotment
option granted the underwriters of such offering. No holder shall be required to
have its Requested Shares be part of any underwritten offering and/or subject to
any over-allotment option granted any underwriter by the Company.
Notwithstanding the foregoing, if the managing underwriter or underwriters shall
inform the Company of its opinion, at least 15 days prior to the date that the
registration statement becomes effective, that part or all of the Requested
Shares be excluded from the registration statement on the ground that the
inclusion of such Requested Shares will adversely affect the orderly sales and
distribution of the Common Stock being sold, the Company shall include all
securities to be sold by holders, including the Company, which have the right to
require that their securities be included in the registration on a pro rata
basis. If the underwriters agree to purchase any of the Requested Shares
beneficially owned by any holder who has agreed that such Requested Shares shall
be sold pursuant to the underwritten offering or pursuant to the exercise of any
over-allotment option as described above, such holders will enter into a
reasonably customary underwriting agreement with the underwriters and will sell
such Requested Shares to the underwriters unless, and except to the extent that,
upon written notice to the Company and the managing underwriter or underwriters
at least two days prior to the effective date of the registration statement, any
such holder withdraws any portion of such Requested Shares. If the underwriters
elect to purchase less than all the Requested Shares beneficially owned by
holders who have agreed that such Requested Shares shall be sold pursuant to the
underwritten offering or pursuant to the exercise of any over-allotment option,
the underwriters shall purchase such Requested Shares on a pro rata basis among
the Requested Shares that were included in the timely requests from holders of
Registrable Securities under this subsection and the Requested Shares requested
to be included in the registration statement by other stockholders holding
registration rights and who have requested that such shares be sold pursuant to
the underwritten offering or pursuant to the exercise of an over-allotment
option. Notwithstanding the foregoing, the Company may withdraw any registration
statement referred to in this Section 1 without any liability to the holders of
Registrable Securities.
1.2. Market Standoff. Each holder of Registrable
Securities agrees that if the managing underwriter or underwriters of the
offering contemplated by Section 1.1 so request, such holder shall not effect
any public sale or distribution of any Registrable Securities being registered
thereunder or of any securities convertible into or exchangeable or exercisable
for such Registrable Securities being registered thereunder for a period equal
to the lesser of (x) the period management of the Company has agreed to lockup
and (y) 90 days after the effective date of the registration statement filed in
connection with the public offering.
3
1.3. Obligations of the Company. When required under
Section 1.1 effect the registration of any Registrable Securities, the Company
shall, as expeditiously as is reasonably possible:
(a) Prepare and file with the SEC a
registration statement with respect to such Registrable Securities and such
amendments and supplements to such registration statement and the prospectus
used in connection therewith as may be necessary to exercise the Company's best
efforts to cause such registration statement to become effective at the earliest
practicable date and to remain effective for a period of 90 days or until the
holders and any underwriter purchasing such Registrable Securities have sold or
otherwise disposed of the Registrable Securities registered in such registration
statement, whichever is earlier.
(b) Furnish to each holder selling Registrable
Securities such number of copies of conformed copies of such registration
statement and of each such amendment and supplement thereto (with all exhibits)
and such number of copies of the prospectus, including a preliminary prospectus,
in conformity with the requirements of the Securities Act, and such other
documents as such holder may reasonably request in order to facilitate the
disposition of Registrable Securities to be sold by such holder pursuant to such
registration statement.
(c) Exercise the Company's best efforts to
register and qualify the Registrable Securities covered by such registration
statement under other securities laws or State Securities Laws of such states or
jurisdictions where a self-executing exemption is not available and as any
seller of such Registrable Securities shall reasonably request; provided,
however, that the Company shall not be required in connection therewith or as a
condition thereto to qualify to do business or to file a general consent to
service of process in any such states or jurisdictions.
(d) Cause all securities covered by such
registration statement to be registered with or approved by such other federal
or state governmental agencies or authorities as may be necessary in the opinion
of counsel to the Company and counsel to the seller or sellers of securities to
enable the seller or sellers thereof to consummate the disposition of such
securities.
(e) Notify each seller of securities covered
by such registration statement at any time when a prospectus relating thereto is
required to be delivered under the Securities Act, upon discovery that, or upon
the happening of any event as a result of which, the prospectus included in such
registration statement, as then in effect, includes an untrue statement of a
material fact or omits to state any material fact required to be stated therein
or necessary to make the statements therein not misleading, in the light of the
circumstances under which they were made, and at the request of any such seller
promptly prepare and furnish to it a reasonable number of copies of a supplement
to or an amendment of such prospectus as may be necessary so that, as thereafter
delivered to the purchasers of such securities, such prospectus shall not
include an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statement therein not
misleading in the light of the circumstances under which they were made.
4
(f) Comply with all applicable rules and
regulations of the SEC, make timely filing of all reports pursuant to the
Securities Exchange Act of 1934, as amended ("Exchange Act") at such time as the
Company's securities are registered under the Exchange Act, and make available
to its securities holders, as soon as reasonably practicable, an earnings
statement covering the period of at least twelve months, but not more than
eighteen months, beginning with the first full calendar month after the
effective date of such registration statement, which earnings statement shall
satisfy the provisions of Section 11(a) of the Securities Act and Rule 158
promulgated thereunder, and promptly furnish to each such seller of securities a
copy of such earnings statement.
(g) Use its best efforts to list all
securities covered by such registration statement on any national securities
exchange on which securities of the same class and, if applicable, series,
covered by such registration statement are then listed or on the Nasdaq Stock
Market ("Nasdaq") if the securities are reported on Nasdaq.
1.4. Information to be Furnished. It shall be a
condition precedent to the obligation of the Company to take any action pursuant
to this Section 1 that the holders of Registrable Securities promptly furnish to
the Company such information regarding them, the securities of the Company held
by them and the intended method of disposition of such securities as the Company
shall reasonably request and as shall be required in connection with the
Company's obligations under this Section 1.
1.5. Underwritten Offerings.
(a) Incidental Underwritten Offerings. If the
Company proposes to register any of its securities under the Securities Act as
contemplated by Section 1.1 and such securities are to be distributed by or
through one or more underwriters, the Company will, if requested by any holder
of Registrable Securities, use its best efforts to arrange for such underwriters
to include all the securities to be offered and sold by such requesting holder
among the securities of the Company to be distributed by such underwriters. The
holders of Registrable Securities to be distributed by such underwriters shall
be parties to the underwriting agreement between the Company and such
underwriters and may, at their option, require that any or all of the
representations and warranties by, and the other agreements on the part of, the
Company to and for the benefit of such underwriters shall also be made to and
for the benefit of such holders of Registrable Securities and that any or all of
the conditions precedent to the obligations of such underwriters under such
underwriting agreement be conditions precedent to the obligations of such
holders of Registrable Securities. Any such requesting holder of Registrable
Securities shall not be required to make any representations or warranties to or
agreements with the Company other than representations, warranties or agreements
regarding such holder, such holder's securities and such holder's intended
method of distribution or any other representations required by applicable law.
5
1.6. Notice. In connection with the preparation and
filing of each registration statement under the Securities Act pursuant to this
Agreement, the Company shall promptly notify the holders of Registrable
Securities included in the Registration Statement and their respective counsel
of any stop order issued or threatened by the SEC and take all reasonable
actions required to prevent the entry of such stop order or to remove it if
entered.
1.7. Registration Expenses. All expenses incurred by
the Company and the holders of Registrable Securities in complying with this
Section 1, including, without limitation, all registration, NASD and filing
fees, duplication and printing expenses, travel expenses, fees and disbursements
of counsel for the Company or its independent public accountants, reasonable
fees and disbursements of counsel for holders of securities included in a
Company registration statement and the expense of any special audits incident to
or required by any such registration shall be paid by the Company, except that
each holder of Registrable Securities shall pay underwriting discounts and
commissions attributable to such holder's shares, and transfer taxes on shares
held by such holder.
1.8. Indemnification. In the event any of the Common
Stock of a holder of Registrable Securities is included in a registration
statement pursuant to this Section 1:
(a) To the extent permitted by law, the
Company will indemnify and hold harmless each holder of Registrable Securities
(and its officers, directors, employees, partners and affiliates) selling
Registrable Securities, any underwriter (as defined in the Securities Act) with
respect to the Registrable Securities, and each person, if any, who controls
such holder or underwriter within the meaning of the Securities Act, against any
losses, claims, damages or liabilities, to which they may become subject under
the Securities Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue or allegedly untrue statement of any material fact contained in such
registration statement, including any preliminary prospectus or final prospectus
contained therein or any amendments or supplements thereto, or arise out of or
are based upon the omission or alleged omission to state therein a material fact
required to be stated therein or allegedly necessary to make the statements
therein not misleading; and will reimburse each such holder of Registrable
Securities (and its officers, directors, employees, partners and affiliates),
underwriter or controlling person for any legal or other expenses reasonably
incurred by them in connection with investigating or defending any such loss,
claim, damage, liability or action; provided, however, that the indemnity
agreement contained in this Section 1.8(a) shall not apply to amounts paid in
settlement of any such loss, claim, damage, liability or action if such
settlement is effected without the written consent of the Company, which shall
not be unreasonably withheld, nor shall the Company be liable under this Section
1.8(a) to such a holder, underwriter or controlling person for any such loss,
claim, damage, liability or action to the extent that it arises out of, or is
based upon, an untrue statement or allegedly untrue statement or omission or
alleged omission made in connection with such registration statement,
preliminary prospectus, final prospectus, or amendments or supplements thereto,
in reliance upon and in conformity with information furnished in writing
expressly for use in connection with such registration by such holder, the
Company will reimburse each such holder for any legal or other expenses
reasonably incurred by each such holder in connection with investigating or
defending any such loss, claim, damage, liability or action.
6
(b) To the extent permitted by law, each
holder selling Registrable Securities pursuant to this Section 1 will indemnify
and hold harmless the Company, each of its directors, officers and employees,
each person, if any, who controls the Company within the meaning of the
Securities Act, and any underwriter for the Company (within the meaning of the
Securities Act) against any losses, claims, damages or liabilities to which the
Company or any such person or underwriter may become subject, under the
Securities Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereto) arise out of, or are based upon, any
untrue or allegedly untrue statement of any material fact contained in such
registration statement, including any preliminary prospectus or final prospectus
contained therein or any amendments or supplements thereto, or arise out of or
are based upon the omission or alleged omission to state therein a material fact
required to be stated therein or allegedly necessary to make the statements
therein not misleading, in each case to the extent that such untrue statement or
allegedly untrue statement or omission or alleged omission was made in such
registration statement, preliminary prospectus, or amendments or supplements
thereto in reliance upon and in conformity with information furnished in writing
by such holder expressly for use in connection with such registration; provided,
however, that the indemnity agreement contained in this Section 1.8(b) shall not
apply to amounts paid in settlement of any such loss, claim, damage, liability
or action if such settlement is effected without the written consent of such
holder, which shall not be unreasonably withheld; and each such holder will
reimburse the Company or any such person or underwriter for any legal or other
expenses reasonably incurred by the Company or any such person or underwriter in
connection with investigating or defending any such loss, claim, damage,
liability or action.
(c) Promptly after receipt by an indemnified
party under this Section 1.8 of notice of the commencement of any action, such
indemnified party will, if a claim in respect thereof is to be made against any
indemnifying party under this Section 1.8, notify the indemnifying party in
writing of the commencement thereof and generally summarize such action. The
indemnifying party shall have the right to participate in and to assume the
defense thereof with counsel mutually satisfactory to the parties; provided that
each indemnified party shall have the right to employ its own counsel in any
such case, but the fees and expense of such counsel shall be at the expense of
such indemnified party unless the employment of such counsel shall have been
authorized in writing by the indemnifying party in connection with the defense
of such action or the indemnifying party shall not have employed counsel to have
charge of the defense of such action or such indemnified party or the
indemnified parties shall have reasonably concluded that there may be defenses
available to it or them that are different from or additional to those available
to the indemnifying party (in which case the indemnifying party shall not have
the right to direct the defense of such action on behalf of the indemnified
party or parties) in any of which events the fees and expenses of such counsel
shall be borne by the indemnifying parties. The failure of any indemnified party
to give notice as provided herein shall not relieve the indemnifying party of
its obligations under this Section 1.8, except to the extent that the
indemnifying party is actually and materially prejudiced by such failure to give
notice.
7
2. Sale or Exercise Without Registration. If, at the time of any
exercise, transfer or surrender for exchange of a Warrant or Common Stock (or
Other Securities) previously issued upon the exercise of Warrants, such Warrant
or Common Stock (or Other Securities) shall not be registered under the
Securities Act, the Company may require, as a condition of allowing such
exercise, transfer or exchange, that the holder or transferee of such Warrant or
Common Stock (or Other Securities), as the case may be, furnish to the Company a
satisfactory opinion of counsel to the effect that such exercise, transfer or
exchange may be made without registration under the Securities Act, provided
that nothing contained in this Section 2 shall relieve the Company from
complying with any request for registration pursuant to Section 1 hereof.
3. Exercise of Warrant; Partial Exercise; Cashless Exercise.
3.1. Exercise in Full. Subject to the provisions
hereof, this Warrant may be exercised in full one year after the date hereof by
the holder hereof by surrender of this Warrant, with the form of subscription
attached hereto as Schedule I ("Subscription Form") duly executed by such
holder, to the Company at its principal office accompanied by payment, in cash
or by certified or official bank check payable to the order of the Company, in
the amount obtained by multiplying the number of shares of Common Stock called
for on the face of this Warrant, as adjusted herein, by the Purchase Price.
3.2. Partial Exercise. Subject to the provisions
hereof, this Warrant may be exercised in part one year after the date hereof by
the holder hereof by surrender of this Warrant in the manner and at the place
provided in Section 3.1 except that the amount payable by the holder upon any
partial exercise shall be the amount obtained by multiplying (a) the number of
shares of Common Stock, as adjusted herein, designated by the holder in the
Subscription Form, by (b) the Purchase Price. Upon any such partial exercise,
the Company at its expense will forthwith issue and deliver to or upon the order
of the holder hereof a new Warrant or Warrants of like tenor, in the name of the
holder hereof or as such holder (upon payment by such holder of any applicable
transfer taxes) may request, calling in the aggregate on the face or faces
thereof for the number of shares of Common Stock equal (without giving effect to
any adjustment therein) to the number of such shares called for on the face of
this Warrant minus the number of such shares designated by the holder in the
Subscription Form.
3.3. Exercise by Surrender of Warrant. In addition to
the method of payment set forth in Sections 3.1 and 3.2 and in lieu of any cash
payment required thereunder, the holder of the Warrant shall have the right at
any time (one year after the date hereof) and from time to time to exercise the
Warrants in full or in part by surrendering the Warrant Certificate in the
manner and at the place specified in Section 3.1 as payment of the aggregate
Purchase Price. The number of shares subject to the portion of the Warrant to be
surrendered in payment of the aggregate Exercise Price for the shares to be
purchased shall be determined by multiplying the number of shares to be
purchased by the Purchase Price, and then dividing the product thereof by an
amount equal to the Market Price (as defined below). Upon any such partial
exercise, the Company, at its expense will forthwith issue and deliver to or
upon the order of the holder hereof a new Warrant of like tenor, in the name of
such holder or as such holder may designate (upon payment by such holder of any
applicable transfer taxes), calling in the aggregate on the face thereof for the
number of shares of Common Stock equal (without giving effect to any adjustment
therein) to (A) the number of shares called for on the face of this Warrant
minus (B) the sum of (i) the number of shares so surrendered by the holder
pursuant to this Section plus (ii) the number of shares issued in the exchange.
Solely for the purposes of this paragraph, Market Price shall be calculated as
the average of the Market Prices for each of the ten (10) trading days preceding
the date which the form of election attached hereto is deemed to have been sent
to the Company ("Notice Date").
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3.4. Definition of Market Price. As used herein, the
phrase "Market Price" at any date shall be deemed to be (i) if the principal
trading market for such securities is an exchange, the last reported sale price,
as officially reported on any consolidated tape, (ii) if the principal market
for such securities is the over-the-counter market, the closing bid price on
such date as reported by Nasdaq or, if there is no closing bid price reported on
Nasdaq or if the security is not quoted on Nasdaq, then the high bid price as
set forth in the National Quotation Bureau sheet listing such securities for
such day. Notwithstanding the foregoing, if there is no reported closing price
or high bid price, as the case may be, on the date next preceding the event
requiring an adjustment hereunder, then the Market Price shall be determined as
of the latest date prior to such day for which such closing price or high bid
price is available, or if the securities are not quoted on Nasdaq, as determined
in good faith by resolution of the Board of Directors of the Company, based on
the best information available to it.
3.5. Company to Reaffirm Obligations. The Company will,
at the time of any exercise of this Warrant, upon the request of the holder
hereof, acknowledge in writing its continuing obligation to afford to such
holder any rights (including, without limitation, any right to registration of
the shares of Common Stock or Other Securities issued upon such exercise) to
which such holder shall continue to be entitled after such exercise in
accordance with the provisions of this Warrant, provided that if the holder of
this Warrant shall fail to make any such request, such failure shall not affect
the continuing obligation of the Company to afford such holder any such rights.
4. Delivery of Stock Certificates, etc., on Exercise. As soon as
practicable after the exercise of this Warrant in full or in part, and in any
event within 10 days thereafter, the Company at its expense (including the
payment by it of any applicable issue taxes) will cause to be issued in the name
of and delivered to the holder hereof, or as such holder (upon payment by such
holder of any applicable transfer taxes) may direct, a certificate or
certificates for the number of fully paid and non-assessable shares of Common
Stock (or Other Securities) to which such holder shall be entitled upon such
exercise, plus, in lieu of any fractional share to which such holder would
otherwise be entitled, cash equal to such fraction multiplied by the then
current Market Price of one full share, together with any other stock or other
securities and property (including cash, where applicable) to which such holder
is entitled upon such exercise pursuant to Section 5 or otherwise.
9
5. Adjustment for Dividends in Other Stock, Property, etc.;
Reclassification, etc. In case at any time or from time to time after the
Original Issue Date the holders of Common Stock (or Other Securities) shall have
received, or (on or after the record date fixed for the determination of
stockholders eligible to receive) shall have become entitled to receive, without
payment therefor
(a) other or additional stock or other
securities or property (other than cash) by way of dividend, or
(b) other or additional (or less) stock or
other securities or property other than by way of spin-off, split-up,
reclassification, recapitalization, combination of shares or similar corporate
rearrangement,
then, and in each such case, the holder of this Warrant, upon the exercise
hereof as provided in Section 3, shall be entitled to receive the amount of
stock and other securities and property which such holder would hold on the date
of such exercise if on the Original Issue Date he had been the holder of record
of the number of shares of Common Stock called for on the face of this Warrant
and had thereafter, during the period from the Original Issue Date to and
including the date of such exercise, retained such shares and all such other or
additional (or less) stock and other securities and property receivable by him
as aforesaid during such period, giving effect to all adjustments called for
during such period by Sections 6 and 7 hereof.
6. Reorganization, Consolidation, Merger, etc.
In case the Company after the Original Issue Date shall
(a) effect a reorganization, (b) consolidate with or merge into any other
person, or (c) transfer all or substantially all of its properties or assets to
any other person under any plan or arrangement contemplating the dissolution of
the Company, then, in each such case, the holder of this Warrant, upon the
exercise hereof as provided in Section 3 at any time after the consummation of
such reorganization, consolidation or merger or the effective date of such
dissolution, as the case may be, shall be entitled to receive (and the Company
shall be entitled to deliver), in lieu of the Common Stock (or Other Securities)
issuable upon such exercise prior to such consummation or such effective date,
the stock and other securities and property (including cash) to which such
holder would have been entitled upon such consummation or in connection with
such dissolution, as the case may be, if such holder had so exercised this
Warrant immediately prior thereto, all subject to further adjustment thereafter
as provided in Sections 5 and 7 hereof.
10
In case the Company after the Original Issue Date shall
(i) subdivide the outstanding Common Stock, (ii) combine the outstanding Common
Stock into a smaller number of shares, or (iii) issue any Other Securities by
reclassification of the Common Stock (including any such reclassification in
connection with a consolidation or merger in which the Company is the continuing
corporation), then the number and kind of shares of Common Stock and/or Other
Securities issuable, at the time of the effective date of such subdivision,
combination or reclassification shall be proportionately adjusted so that the
holder of this Warrant after such time shall be entitled to receive upon
exercise of its Warrant the aggregate number and kind of shares of Common Stock
and/or Other Securities which, if its Warrant had been exercised immediately
prior to such time, it would have owned upon such exercise and been entitled to
receive by virtue of such dividend, subdivision, combination or
reclassification, all subject to further adjustment thereafter as provided in
Sections 5 and 7 hereof.
7. Other Adjustments.
7.1. General. Except as provided in Section 7.4, in
case the Company shall issue or sell shares of its Common Stock after the
Original Issue Date for a consideration per share less than the Purchase Price
in effect pursuant to the terms of this Warrant at the time of issuance or sale
of such additional shares, then the Purchase Price in effect hereunder shall
simultaneously with such issuance or sale be reduced to a price determined by
dividing (1) an amount equal to (a) the total number of shares of Common Stock
outstanding immediately prior to such issuance or sale multiplied by the
Purchase Price in effect hereunder at the time of such issuance and sale, plus
(b) the consideration, if any, received by the Company upon such issuance or
sale, by (2) the total number of shares of Common Stock outstanding immediately
after such issuance or sale of such additional shares; and the number of shares
of Common Stock which may be purchased upon exercise of this Warrant shall be
increased so that the aggregate amount to be paid upon full exercise of this
Warrant, after giving effect to each reduction in the Purchase Price, shall not
be reduced.
7.2. Convertible Securities. Except as provided in
Section 7.4, in case the Company shall issue or sell any securities convertible
into Common Stock of the Company ("Convertible Securities") after the Original
Issue Date, there shall be determined the price per share for which Common Stock
is issuable upon the conversion or exchange thereof, such determination to be
made by dividing (a) the total amount received or receivable by the Company as
consideration for the issue or sale of such Convertible Securities, plus the
minimum aggregate amount of additional consideration, if any, payable to the
Company upon the conversion or exchange thereof, by (b) the maximum number of
shares of Common Stock issuable upon the conversion or exchange of all of such
Convertible Securities.
If the price per share so determined shall be less
than the applicable Purchase Price, then such issue or sale shall be deemed to
be an issue or sale for cash (as of the date of issue or sale of such
Convertible Securities) of such maximum number of shares of Common Stock at the
price per share so determined, provided that, if such Convertible Securities
shall by their terms provide for an increase or increases, with the passage of
time, in the amount of additional consideration, if any, to the Company, or in
the rate of exchange, upon the conversion or exchange thereof, the adjusted
Purchase Price shall, forthwith upon any such increase becoming effective, be
readjusted to reflect the same, and provided further, that upon the expiration
of such rights of conversion or exchange of such Convertible Securities, if any
thereof shall not have been exercised, the adjusted Purchase Price shall
forthwith be readjusted and thereafter be the price which it would have been had
an adjustment been made on the basis that the only shares of Common Stock so
issued or sold were issued or sold upon the conversion or exchange of such
Convertible securities, and that they were issued or sold for the consideration
actually received by the Company upon such conversion or exchange, plus the
consideration, if any, actually received by the Company for the issue or sale of
all of such Convertible Securities which shall have been converted or exchanged;
provided that, notwithstanding the foregoing, no readjustment shall be
effectuated hereunder with respect to any shares of Common Stock already issued
upon exercise of the Warrant.
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7.3. Rights and Options. Except as provided in Section
7.4, in case the Company shall grant any rights or options to subscribe for,
purchase or otherwise acquire Common Stock after the Original Issue Date, there
shall be determined the price per share for which Common Stock is issuable upon
the exercise of such rights or options, such determination to be made by
dividing (a) the total amount, if any, received or receivable by the Company as
consideration for the granting of such rights or options, plus the minimum
aggregate amount of additional consideration payable to the Company upon the
exercise of such rights or options, by (b) the maximum number of shares of
Common Stock of the Company issuable upon the exercise of such rights or
options.
If the price per share so determined shall be less
than the applicable Purchase Price, then the granting of such rights or options
shall be deemed to be an issue or sale for cash (as of the date of the granting
of such rights or options) of such maximum number of shares of Common Stock at
the price per share so determined, provided that, if such rights or options
shall by their terms provide for an increase or increases, with the passage of
time, in the amount of additional consideration payable to the Company upon the
exercise thereof, the adjusted purchase price per share shall, forthwith upon
any such increase becoming effective, be readjusted to reflect the same, and
provided, further, that upon the expiration of such rights or options, if any
thereof shall not have been exercised, the adjusted Purchase Price shall
forthwith be readjusted and thereafter be the price which it would have been had
an adjustment been made on the basis that the only shares of Common Stock so
issued or sold were those issued or sold upon the exercise of such rights or
options and that they were issued or sold for the consideration actually
received by the Company upon such exercise, plus the consideration, if any,
actually received by the Company for the granting of all such rights or options,
whether or not exercised.
7.4. Exceptions. The provisions of Sections 7.1, 7.2
and 7.3 do not apply to (i) the exercise of any Warrant,(ii) the exercise of any
right or option with respect to which an adjustment shall have been made at the
time of the issuance of such right or option pursuant to Section 7.3, (iii)
conversion or exchange of any Convertible Security with respect to which an
adjustment shall have been made at the time of the issuance of such Convertible
Security pursuant to Section 7.2, (iv) any transaction with respect to which an
adjustment shall have been made pursuant to Sections 5 or 6, and (v) the
issuance or sale of any Common Stock pursuant to the exercise or conversion of
any option, right or Convertible Security that was issued on or prior to the
Original Issue Date.
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8. Further Assurances. The Company will take all such action as
may be necessary or appropriate in order that the Company may validly and
legally issue fully paid and non-assessable shares of stock upon the exercise of
the Warrants.
9. Accountants' Certificate as to Adjustments. In each case of
any adjustment or readjustment in the shares of Common Stock (or Other
Securities) issuable upon the exercise of the Warrant, the Company at its
expense will promptly cause the Company's regularly retained auditor to compute
such adjustment or readjustment in accordance with the terms of the Warrant and
prepare a certificate setting forth such adjustment or readjustment and showing
in detail the facts upon which such adjustment or readjustment is based, and the
number of shares of Common Stock outstanding or deemed to be outstanding. The
Company will forthwith mail a copy of each such certificate to the holder of
this Warrant.
10. Notices of Record Date, etc. In the event of
(a) any taking by the Company of a record of
the holders of any class of securities for the purpose of determining the
holders thereof who are entitled to receive any dividend (other than a cash
dividend payable out of earned surplus of the Company) 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, or
(b) any capital reorganization of the
Company, any reclassification or recapitalization of the capital stock of the
Company or any transfer of all or substantially all the assets of the Company to
or consolidation or merger of the Company with or into any other person, or
(c) any voluntary or involuntary dissolution,
liquidation or winding-up of the Company, or
(d) any proposed issue or grant by the
Company of any shares of stock of any class or any other securities, or any
right or option to subscribe for, purchase or otherwise acquire any shares of
stock of any class or any other securities (other than the issue of Common Stock
on the exercise of the Warrant),
then and in each such event the Company will mail or cause to be
mailed to each holder of the Warrant a notice specifying (i) the date on which
any such record is to be taken for the purpose of such dividend, distribution or
right, and stating the amount and character of such dividend, distribution or
right, (ii) the date on which any such reorganization, reclassification,
recapitalization, transfer, consolidation, merger, dissolution, liquidation or
winding-up is to take place, and the time, if any, as of which the holders of
record of Common Stock (or Other Securities) shall be entitled to exchange their
shares of Common Stock (or Other Securities) for securities or other property
deliverable upon such reorganization, reclassification, recapitalization,
transfer, consolidation, merger, dissolution, liquidation or winding-up, and
(iii) the amount and character of any stock or other securities, or rights or
options with respect thereto, proposed to be issued or granted, the date of such
proposed issue or grant and the persons or class of persons to whom such
proposed issue or grant is to be offered or made. Such notice shall be mailed at
least 20 days prior to the date therein specified.
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11. Reservation of Stock, etc., Issuable on Exercise of
Warrants. The Company will at all times reserve and keep available, solely for
issuance and delivery upon the exercise of the Warrant, all shares of Common
Stock (or Other Securities) from time to time issuable upon the exercise of the
Warrant.
12. Listing on Securities Exchanges; Registration. If the
Company at any time shall list any Common Stock on any national securities
exchange, or interdealer quotation system, and shall register such Common Stock
under the Securities Exchange Act of 1934 (as then in effect, or any similar
statute then in effect), the Company will, at its expense, simultaneously list
on such exchange, upon official notice of issuance upon the exercise of the
Warrant, and maintain such listing of all shares of Common Stock from time to
time issuable upon the exercise of the Warrant; and the Company will so list on
any national securities exchange, will so register and will maintain such
listing of, any Other Securities if and at the time that any securities of like
class or similar type shall be listed on such national securities exchange by
the Company.
13. Exchange of Warrants. Subject to the provisions of Section 2
hereof, upon surrender for exchange of the Warrant, properly endorsed, to the
Company, the Company at its own expense will issue and deliver to or upon the
order of the holder thereof a new Warrant or Warrants of like tenor, in the name
of such holder or as such holder (upon payment by such holder of any applicable
transfer taxes) may direct, calling in the aggregate on the face or faces
thereof for the number of shares of Common Stock called for on the face or faces
of the Warrant or Warrants so surrendered.
14. Replacement of Warrant. Upon receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of the
Warrant and, in the case of any such loss, theft or destruction, upon delivery
of an indemnity agreement reasonably satisfactory in form and amount to the
Company or, in the case of any such mutilation, upon surrender and cancellation
of the Warrant, the Company at its expense will execute and deliver, in lieu
thereof, a new Warrant of like tenor.
15. Warrant Agent. The Company may, by written notice to each
holder of a Warrant, appoint an agent having an office in New York, New York,
for the purpose of issuing Common Stock (or Other Securities) upon the exercise
of the Warrants pursuant to Section 3, exchanging Warrants pursuant to Section
13, and replacing Warrants pursuant to Section 14, or any of the foregoing, and
thereafter any such issuance, exchange or replacement, as the case may be, shall
be made at such office by such agent.
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16. Negotiability, etc. This Warrant is issued upon the
following terms, to all of which each holder or owner hereof by the taking
hereof consents and agrees:
(a) subject to the provisions hereof, title
to this Warrant may be transferred by endorsement (by the holder hereof
executing the form of assignment attached hereto as Schedule II) and delivery in
the same manner as in the case of a negotiable instrument transferable by
endorsement and delivery;
(b) subject to the foregoing, any person in
possession of this Warrant properly endorsed is authorized to represent himself
as absolute owner hereof and is empowered to transfer absolute title hereto by
endorsement and delivery hereof to a bona fide purchaser hereof for value; each
prior taker or owner waives and renounces all of his equities or rights in this
Warrant in favor of each such bona fide purchaser and each such bona fide
purchaser shall acquire absolute title hereto and to all rights represented
hereby; and
(c) until this Warrant is transferred on the
books of the Company, the Company may treat the registered holder hereof as the
absolute owner hereof for all purposes, notwithstanding any notice to the
contrary.
17. Notices, etc. All notices and other communications from the
Company to the holder of this Warrant shall be mailed by first class registered
or certified mail, postage prepaid, at such address as may have been furnished
to the Company in writing by such holder, or, until an address is so furnished,
to and at the address of the last holder of this Warrant who has so furnished an
address to the Company.
18. Miscellaneous. This Warrant and any term hereof may be
changed, waived, discharged or terminated only by an instrument in writing
signed by the party against which enforcement of such change, waiver, discharge
or termination is sought. This Warrant is being delivered in the State of New
York and shall be construed and enforced in accordance with and governed by the
laws of such State. The headings in this Warrant are for purposes of reference
only, and shall not limit or otherwise affect any of the terms hereof.
19. Assignability. Subject to the transfer conditions referred
to in the legend endorsed hereon, this Warrant is fully assignable at any time
upon surrender of this Warrant with a properly executed Assignment (in the form
of Schedule II hereto) at the principal office of the Company.
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Dated: November ___, 1998
ROLLING PIN KITCHEN EMPORIUM, INC.
By:_______________________
Chairman of the Board
[Corporate Seal]
Attest:
_______________
Secretary
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SCHEDULE I
FORM OF SUBSCRIPTION
(To be signed only upon exercise or surrender of each Warrant)
To: ROLLING PIN KITCHEN EMPORIUM, INC.
The undersigned, the holder of the within Warrant, hereby irrevocably
elects to exercise the purchase right represented by such Warrant for, and to
purchase thereunder, _________ shares of Common Stock of ROLLING PIN KITCHEN
EMPORIUM, INC., and herewith [use version (a) in the event of the payment of
cash purchase price]
(a) makes payment of $_________ therefor, and requests that the certificates for
such shares be issued in the name of, and delivered to, __________ , whose
address is _________________________________.
or [use version (b) in the event of a cashless exercise]
(b) surrenders that portion of the Warrant representing ____ shares of Common
Stock, and requests that the certificates for such shares be issued in the name
of, and delivered to ___________________, whose address is ____________________.
To the extent that the exercise hereunder is for less than all of the shares of
Common Stock represented by the Warrant, the undersigned hereby requests that a
new Warrant for the remaining amount of shares of Common Stock be issued to
__________________ whose address is _____________________________________.
Dated:
--------------------------------------------------
(Signature must conform in all respects to name
of holder as specified on the face of the Warrant)
(Address) __________________________
__________________________
Insert here the number of shares called for on the face of the Warrant (or, in
the case of a partial exercise, the portion thereof as to which the Warrant is
being exercised), in either case without making any adjustment for additional
Common Stock or any other stock or other securities or property or cash which,
pursuant to the adjustment provisions of the Warrant, may be deliverable upon
exercise.
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SCHEDULE II
FORM OF ASSIGNMENT
(To be signed only upon transfer of Warrant)
For value received, the undersigned hereby sells, assigns and
transfers unto ______________ the right represented by the within Warrant to
purchase _____________shares of Common Stock of Rolling Pin Kitchen Emporium,
Inc., to which the within Warrant relates, and appoints _____________________ as
attorney to transfer such right on the books of Home Retail Holdings, Inc. with
full power of substitution in the premises.
Dated:
---------------------------------------
(Signature must conform in all respects to name of holder as specified on the
face of the Warrant)
(Address) ____________________________
____________________________
____________________________
--------------------------------
(Signature guaranteed by a Bank or Trust Company having its principal office in
New York City or by a Member Firm of the New York or American Stock Exchange)
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