NEITHER THIS WARRANT NOR THE SECURITIES PURCHASABLE UPON EXERCISE OF THIS
WARRANT HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
UNDER THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION AND MAY NOT BE
SOLD, OFFERED FOR SALE OR OTHERWISE TRANSFERRED UNLESS REGISTERED OR QUALIFIED
UNDER SAID ACT AND APPLICABLE STATE SECURITIES LAWS OR UNLESS AN EXEMPTION IS
AVAILABLE AND AN OPINION OF COUNSEL REASONABLY ACCEPTABLE TO THE ISSUER IS
DELIVERED TO SUCH EFFECT.
Issue Date: January 17, 2001 No. of Shares Subject to Warrant: [ ]
WARRANT TO PURCHASE COMMON STOCK
OF
NEW WORLD COFFEE - MANHATTAN BAGEL, INC.
This is to certify that, for value received, GREENLIGHT
CAPITAL, L.P. (the "Holder") is entitled to purchase, subject to the provisions
of this Warrant, from NEW WORLD COFFEE - MANHATTAN BAGEL, INC., a Delaware
corporation (the "Company"), [ ] shares (subject to adjustment or reduction as
provided herein) of Common Stock, $0.001 par value, of the Company ("Common
Stock"), at a price of $0.01 per share (subject to adjustment as provided
herein) at any time during the period beginning on the Issue Date and ending not
later than 5:00 p.m. New York time on fifth anniversary of the Issue Date ( the
"Termination Date"). The number of shares of Common Stock to be received upon
the exercise of this Warrant and the price to be paid for a share of Common
Stock may be adjusted from time to time as hereinafter set forth. The shares of
Common Stock deliverable upon such exercise, and as adjusted from time to time,
are hereinafter sometimes referred to as "Warrant Shares," and the exercise
price of a share of Common Stock in effect at any time and as adjusted from time
to time is hereinafter sometimes referred to as the "Exercise Price."
(a) EXERCISE OF WARRANT.
(1) This Warrant may be exercised in whole or in part at any time from time to
time on or after the Issue Date until the Termination Date, by presentation and
surrender hereof to the Company at its principal office, or at the office of its
stock transfer agent, if any, with the Purchase Form annexed hereto duly
executed and accompanied by payment of the Exercise Price for the number of
shares specified in such form, in lawful money of the United States of America
in cash or by official bank or certified check made payable to the Company.
(2) As an alternative to payment of the Exercise Price in cash, the Holder shall
have the right, at any time and from time to time, to convert this Warrant in
whole or in part into shares of Common Stock (the "Conversion Right"). Upon
exercise of the Conversion Right, payment of the aggregate Exercise Price shall
may be made by delivery of this Warrant with instructions that the Company
retain as payment of the aggregate Exercise Price such number of Warrant Shares
as shall be determined under the next sentence. The Holder shall receive that
number of Warrant Shares determined by multiplying the number of Warrant Shares
for which the Conversion Right is exercised by a fraction, the numerator of
which shall be the difference between the then fair market value per Warrant
Share (based on the closing price on the trading day preceding the exercise of
the Conversion Right) and the Exercise Price per Warrant Share, and the
denominator of which shall be the then fair market value per Warrant Share. The
remaining Warrant Shares for which the Conversion Right has been made shall be
deemed to have been paid to the Company as the aggregate Exercise Price.
(3) The term "closing price" for each day shall mean the last reported sale
price or, in case no such sale takes place, on such day the average of the
closing bid and asked prices, in either case on the principal national
securities exchange or the Nasdaq National Market on which the Company's Common
Stock is listed or admitted to trading, or if the Company's Common Stock is not
listed or admitted to trading on any national securities exchange or the Nasdaq
National Market, the average of the highest reported bid and lowest reported
asked prices as furnished by the National Association of Securities Dealers Inc.
Automated Quotation System, or comparable system. The term "trading day" shall
mean (X) if the Common Stock is listed on at least one stock exchange, a day on
which there is trading on the principal stock exchange on which the Common Stock
is listed or (Y) if the Common Stock is not listed on a stock exchange but sale
prices of the Common Stock are reported on an automated quotation system, a day
on which trading is reported on the principal automated quotation system on
which sales of the Common Stock are reported.
(4) If this Warrant should be exercised in part only, the Company shall, upon
surrender of this Warrant for cancellation, execute and deliver a new Warrant
evidencing the rights of the Holder thereof to purchase the balance of the
shares purchasable thereunder. Upon receipt by the Company of this Warrant at
its office, or by the stock transfer agent of the Company, if any, at its
office, in proper form for exercise and together with payment of the Exercise
Price in the manner provided herein, the Holder shall be deemed to be the holder
of record of the shares of Common Stock issuable upon such exercise, provided,
however, that if at the date of surrender of such Warrants and payment of such
Exercise Price, the transfer books for the Common Stock shall be closed, the
certificates for the shares in respect of which such Warrants are then exercised
shall be issuable as of the date on which such books shall next be opened, and
until such date the Company shall be under no duty to deliver any certificate
for such shares and the Holder shall not be deemed to have become a holder of
record of such shares.
(5) Notwithstanding anything herein to the contrary, this Warrant shall
automatically be deemed to be exercised in full pursuant to the provisions of
paragraph (a)(2) above, without any further action by or on behalf of the
Holder, immediately preceding the time this Warrant would otherwise expire.
(6) So long as this Warrant shall be outstanding, (i) if the Company shall
declare any dividend or make any distribution upon the Common Stock, or (ii) if
any capital reorganization of the Company, reclassification of the capital stock
of the Company, consolidation or merger of the Company with or into another
corporation, sale, lease or transfer of all or substantially all of the property
and assets of the Company to another corporation, or voluntary or involuntary
dissolution, liquidation or winding up of the Company shall be effected, then in
any such case, the Company shall cause to be mailed by certified mail to the
Holder, at least 20 days prior to the date specified in (x) or (y) below, as the
case may be, a notice containing a brief description of the proposed action and
stating the date on which (x) a record is to be taken for the purpose of such
dividend, distribution or offer for subscription or purchase, or (y) such
reorganization, reclassification, consolidation, merger, sale, lease, transfer,
dissolution, liquidation or winding up is to take place and the date, if any is
to be fixed, as of which the holders of the Common Stock or other capital stock
of the Company shall receive cash or other property deliverable upon such
reclassification, reorganization, consolidation, merger, conveyance,
dissolution, liquidation or winding up.
(7) The Holder shall have no rights as a stockholder of the Company for shares
of Common Stock issuable hereunder unless and until such shares are purchased in
accordance herewith.
(b) RESERVATION OF SHARES. The Company hereby agrees that at all times there
shall be reserved for issuance and/or delivery upon exercise of this Warrant
such number of shares of its Common Stock as shall be required for issuance and
delivery upon exercise of this Warrant.
(c) FRACTIONAL SHARES. The Company shall not be required to issue fractions of
shares on the exercise of Warrants. If any fraction of a share would, except for
the provisions of this Section, be issuable on the exercise of any Warrant, the
Company will (1) if the fraction of a share otherwise issuable is equal to or
less than one-half, round down and issue to the Holder only the largest whole
number of shares of Common Stock to which the Holder is otherwise entitled, or
(2) if the fraction of a share otherwise issuable is greater than one-half,
round-up and issue to the Holder one additional share of Common Stock in
addition to the largest whole number of shares of Common Stock to which the
holder is otherwise entitled.
(d) EXCHANGE, TRANSFER, ASSIGNMENT OR LOSS OF WARRANT. This Warrant is
exchangeable, without expense, at the option of the Holder, upon presentation
and surrender hereof to the Company or at the office of its stock transfer
agent, if any, for other Warrants of different denominations entitling the
holder thereof to purchase in the aggregate the same number of shares of Common
Stock purchasable hereunder. Subject to the provisions of Section (g), upon
surrender of this Warrant to the Company or at the office of its stock transfer
agent, if any, with the Assignment Form annexed hereto duly executed and funds
sufficient to pay any transfer tax, the Company shall, without charge, execute
and deliver a new Warrant in the name of the permitted assignee named in such
instrument of assignment and this Warrant shall be canceled. If this Warrant
should be assigned in part only, the Company shall, upon surrender of this
Warrant in accordance with the procedures set forth in the preceding sentence,
execute and deliver, in addition to the new Warrant described in the preceding
sentence, a new Warrant evidencing the rights of the Holder to purchase the
balance of the shares purchasable thereunder. The term "Warrant" as used herein
includes any Warrants into which this Warrant may be divided or exchanged. Upon
receipt by the Company of evidence satisfactory to it of the loss, theft,
destruction or mutilation of this Warrant, and upon surrender and cancellation
of this Warrant, if mutilated, the Company will execute and deliver a new
Warrant of like tenor and date.
(e) RIGHTS OF THE HOLDER. The Holder shall not, by virtue hereof, be entitled to
any rights of a stockholder in the Company, either at law or equity, and the
rights of the Holder are limited to those expressed in the Warrant and are not
enforceable against the Company except to the extent set forth herein.
(f) ANTI-DILUTION AND ADJUSTMENT PROVISIONS. The Exercise Price and the number
and kind of securities purchasable upon the exercise of this Warrant shall be
subject to adjustment from time to time beginning on the date of issue of this
Warrant, as hereinafter provided:
(1) In case the Company shall issue Common Stock as a dividend upon Common Stock
or in payment of a dividend thereon shall subdivide the number of outstanding
shares of its Common Stock into a greater number of shares or shall contract the
number of outstanding shares of its Common Stock into a lesser number of shares,
the Exercise Price then in effect shall be adjusted, effective at the close of
business on the record date for the determination of stockholders entitled to
receive such dividend or be subject to such subdivision or contraction, to the
price (computed to the nearest cent) determined by dividing (A) the product
obtained by multiplying the Exercise Price in effect immediately prior to the
close of business on such record date by the number of shares of Common Stock
outstanding prior to such dividend, subdivision or contraction, by (B) the sum
of the number of shares of Common Stock outstanding immediately after such
dividend, subdivision, or contraction.
(2) If any capital reorganization or reclassification of the capital stock of
the Company (other than as set forth in subsection (1) of this Section (f)), or
consolidation or merger of the Company with another corporation, or the sale of
all or substantially all of its assets to another corporation shall be effected,
then, lawful and adequate provision shall be made whereby the holder of each
Warrant shall thereafter have the right to purchase and receive upon the basis
and upon the terms and conditions specified in the Warrant and in lieu of the
shares of Common Stock of the Company immediately theretofore purchasable and
receivable upon the exercise of the rights represented by such Warrant (the
"Purchasable Shares"), such shares of stock, securities or assets issuable or
payable with respect to or in exchange for the Purchasable Shares had they been
purchased immediately before such reorganization, reclassification,
consolidation, merger or sale, and in any such case appropriate provision shall
be made with respect to the rights and interest of the Holder to the end that
the provisions of the Warrant (including, without limitation, provisions for
adjustment of the Exercise Price and of the number of shares issuable upon the
exercise of Warrants) shall thereafter be applicable as nearly as may be
practicable in relation to any shares of stock, securities, or assets thereafter
deliverable upon exercise of Warrants. The Company shall not effect any such
consolidation, merger or sale unless prior to or simultaneously with the
consummation thereof, the successor corporation (if other than the Company)
resulting from such consolidation or merger or the corporation purchasing such
assets shall assume, by written instrument, the obligation to deliver to the
Holder such shares of stock, securities or assets as, in accordance with the
foregoing provisions, the Holder may be entitled to purchase.
(3) Upon each adjustment of the Exercise Price pursuant to subsection (1) of
this Section (f), the number of shares of Common Stock specified in each Warrant
shall thereupon evidence the right to purchase that number of shares of Common
Stock (calculated to the nearest hundredth of a share of Common Stock) obtained
by multiplying the Exercise Price in effect immediately prior to such adjustment
by the number of shares of Common Stock purchasable immediately prior to such
adjustment upon exercise of such Warrant and dividing the product so obtained by
the Exercise Price in effect after such adjustment.
(4) Irrespective of any adjustments of the number or kind of securities issuable
upon exercise of Warrants or the Exercise Price, Warrants theretofore or
thereafter issued may continue to express the same number of shares of Common
Stock and Exercise Price as are stated in similar Warrants previously issued.
(5) The Company may, at its sole option, retain the independent public
accounting firm regularly retained by the Company, or another firm of
independent public accountants of recognized standing selected by the Company's
Board of Directors, to make any computation required under this Section (f) and
a certificate signed by such firm shall be conclusive evidence of any
computation made under this Section (f) absent manifest error.
(6) Whenever there is an adjustment in the Exercise Price or in the number or
kind of securities issuable upon exercise of the Warrants, or both, as provided
in this Section (f), the Company shall (i) promptly file in the custody of its
Secretary or Assistant Secretary a certificate signed by the Chairman of the
Board or the President or a Vice President of the Company and by the Treasurer
or an Assistant Treasurer or the Secretary or an Assistant Secretary of the
Company, setting forth the facts requiring such adjustment and the number and
kind of securities issuable upon exercise of each Warrant after such adjustment;
and (ii) cause a notice stating that such adjustment has been effected and
stating the Exercise Price then in effect and the number and kind of securities
issuable upon exercise of each Warrant to be sent to each registered holder of a
Warrant.
(7) The Exercise Price and the number of shares issuable upon exercise of this
Warrant shall not be adjusted except in the manner and only upon the occurrence
of the events heretofore specifically referred to in this Section (f).
(8) The Board of Directors of the Company may, in its sole discretion, (a)
reduce the Exercise Price of each Warrant, (b) increase the number of shares of
Common Stock issuable upon exercise of each Warrant and/or (c) provide for the
issuance of other securities (in addition to the shares of Common Stock
otherwise issuable upon exercise of the Warrant) upon exercise of each Warrant.
(g) TRANSFER TO COMPLY WITH THE SECURITIES ACT OF 1933 AND OTHER APPLICABLE
SECURITIES LAWS.
This Warrant or the Warrant Shares or any other security issued or issuable upon
exercise of this Warrant may not be sold or otherwise disposed of unless Holder
provides the Company with an opinion of counsel reasonably satisfactory to the
Company in form reasonably satisfactory to the Company that this Warrant or the
Warrant Shares or such other security may be legally transferred without
violating the Securities Act of 1933, as amended (the "1933 Act") and any other
applicable securities law and then only against receipt of an agreement of the
transferee to comply with the provisions of this Section (g) with respect to any
resale or other disposition of such securities. Upon exercise of this Warrant,
the Holder shall, if requested by the Company, confirm in writing, that the
Warrant Shares are being acquired solely for the Holder's own account and that
Holder or Holder's purchaser representative is an accredited investor, as
defined in Rule 501 under the 1933 Act.
(h) REGISTRATION RIGHTS AGREEMENT.
This Warrant is subject to the rights and benefits of the Registration
Rights Agreement of even date herewith, by and between the Company and the
Holder.
(i) RESTRICTION ON TRANSFER.
The transfer of this Warrant and the Common Stock or other securities
purchasable hereunder is governed by the terms of a Bond Purchase Agreement
among the Company, the original named Holder, and others, of even date herewith.
IN WITNESS WHEREOF, the Company has caused this Warrant to be executed as
of the Issue Date first set forth above by an authorized officer.
NEW WORLD COFFEE -
MANHATTAN BAGEL, INC.
By:
---------------------------
R. Xxxxx Xxxxxx, President
Attest:
----------------------
Xxxxxx X. Xxxxxx
Dated: January , 2001
PURCHASE FORM
Dated: _______________, 2001
The undersigned hereby irrevocably elects to exercise the within Warrant to
the extent of purchasing shares of Common Stock and hereby makes payment of
________ in payment of the Exercise Price thereof.
INSTRUCTIONS FOR REGISTRATION OF STOCK
Name _____________________________________________
(Please typewrite or print in block letters.)
Address _________________________________________
Signature ________________________________________
ASSIGNMENT FORM
FOR VALUE RECEIVED, hereby sells, assigns and transfers unto
Name _____________________________________________
(Please typewrite or print in block letters.)
Address __________________________________________
The right to purchase Common Stock represented by this Warrant to the extent of
______ shares as to which such right is exercisable and does hereby irrevocably
constitute and appoint ______________, Attorney, to transfer the on the books of
the Company with full power of substitution in the premises. Date ____________,
2001
Signature
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