AMENDMENT NO. 1 TO SERIES C WARRANT AGREEMENT
This Amendment No. 1 to Series C Warrant Agreement
(this "Amendment") is dated as of December 30, 1996 by and
between House of Fabrics, Inc., a Delaware corporation (the
"Company"), and American Stock Transfer & Trust Company, as
warrant agent (the "Warrant Agent").
W I T N E S S E T H:
WHEREAS, the Company and the Warrant Agent have entered
into a Series C Warrant Agreement, dated as of July 31, 1996 (the
"Warrant Agreement"), pursuant to which the Company proposes to
issue up to 256,821 Series C Warrants, each Warrant entitling the
registered owner thereof to purchase one share of the Company's
Common Stock, par value $.01 per share; and
WHEREAS, the Warrant Agreement was executed in
connection with the Third Amended Joint Plan of Reorganization,
dated May 23, 1996, as modified, of the Company and others, which
Plan of Reorganization was confirmed by the order of the United
States Bankruptcy Court of the Central District of California,
Judge Xxxxxxxx X. Xxx, dated July 10, 1996 and duly entered on
July 10, 1996 in the proceeding entitled House of Fabrics, Inc.
et. al., debtors, case number SV94-50060KL (the "Plan of
Reorganization"); and
WHEREAS, the Plan of Reorganization provides that the
exercise price for the Series C Warrants shall be an amount equal
to the greater of (i) 200% of the average daily Trading Price (as
defined in the Warrant Agreement) per share for the Trading Days
(as defined in the Warrant Agreement) during the Pricing Period
(as defined in the Warrant Agreement), and (ii) $26.67; and
WHEREAS, due to a typographical error, Section 9 of the
Warrant Agreement provides that the exercise price shall be the
lesser of clauses (i) and (ii) above; and
WHEREAS, as permitted by Section 19 of the Warrant
Agreement, the parties wish to enter into this Amendment to
correct the typographical error noted above.
NOW, THEREFORE, the Company and the Warrant Agent
hereby agree as follows:
1. Section 9 of the Warrant Agreement is hereby
amended in its entirety to read as follows:
"SECTION 9. Exercise Price.
The price per share at which Warrant Shares
shall be purchasable upon exercise of each Warrant
(the "Exercise Price") shall be an amount equal to
the greater of (i) 200% of the average of the
daily Trading Price (as defined in Section 10.1
(d)) per share for the Trading Days (as defined in
Section 10.1 (d)) during the Pricing Period
(rounded down to the nearest cent), and (ii)
$26.67. 'Pricing Period' is defined as the period
commencing on November 29, 1996 and ending at the
close of business on December 27, 1996. The
Exercise Price is subject to adjustment pursuant
to Section 10 hereof; provided, however, that if
the Exercise Price in effect on the date of
exercise of a Warrant is less than the par value
of a Warrant Share, the price per share at which
Warrant Shares may be purchased upon the exercise
of such Warrant on such date shall be the par
value of a Warrant Share."
2. The first paragraph of Exhibit A to the Warrant
Agreement is hereby amended in its entirety to read as follows:
"This certifies that, for value received,
__________ or registered assigns (the `Holder'),
is entitled to purchase from House of Fabrics,
Inc., a Delaware corporation (the `Company'),
until 5:00 P.M., New York time, on July 31, 2001
(the `Expiration Date'), at the purchase price of
$[ ] [THE GREATER OF 200% OF THE AVERAGE DAILY
TRADING PRICE PER SHARE OF COMMON STOCK FOR THE
TRADING DAYS DURING THE PERIOD COMMENCING NOVEMBER
29, 1996 AND ENDING AT THE CLOSE OF BUSINESS ON
DECEMBER 27, 1996, AND (II) $26.67] per share (the
`Exercise Price'), a number of shares of Common
Stock, par value $.01 per share, of the Company
(the `Common Stock') that is equal to the number
of Warrants set forth above. The number of shares
purchasable upon exercise of this Warrant and the
Exercise Price per share are subject to adjustment
from time to time as set forth in the Warrant
Agreement referred to below."
3. Except as expressly set forth in this Amendment,
the Warrant Agreement shall remain in full force and effect. The
Warrant Agreement, as amended by this Amendment, is in all
respects ratified and confirmed, and this Amendment shall be
deemed to be part of the Warrant Agreement in the manner and to
the extent herein provided.
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed as of the day and year first above
written.
HOUSE OF FABRICS, INC.
By: /s/ Xxxx X. Xxxxxxx
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Title: Vice Chairman of the Board
ATTEST:
/s/ Xxxxxx X. Xxxxxxxx
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Title: Senior Vice President
and General Counsel
AMERICAN STOCK TRANSFER & TRUST
COMPANY, as Warrant Agent
By: /s/ Xxx Xxxx
---------------------------------
Title: Vice President
ATTEST:
/s/ Xxx Xxxxxx
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Title:
