EXHIBIT 10.12
NEITHER THIS WARRANT NOR THE SHARES OF COMMON STOCK
ISSUABLE ON EXERCISE OF THIS WARRANT MAY BE TRANSFERRED
EXCEPT IN A TRANSACTION REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR WHICH IS EXEMPT FROM THE
REGISTRATION REQUIREMENTS OF THAT ACT.
VOID AFTER 5:00 P.M., NEW YORK CITY TIME, ON MAY 28, 2005.
No. W-1 274,418 SHARES
WARRANT TO PURCHASE SHARES
OF COMMON STOCK
OF FAMILY BARGAIN CORPORATION
TRANSFER RESTRICTED -- SEE SECTION 5.01
This certifies that London Pacific Life & Annuity Company, or
registered assigns, (the "Warrant Holder") is entitled to purchase from
FAMILY BARGAIN CORPORATION (the "Company"), a Delaware corporation, at any
time before 5:00 P.M., New York City time, on the Expiration Date described
in Section 1.01(c), the number of fully paid and nonassessable shares of
Common Stock, par value $.01 per share, of the Company ("Common Stock")
stated above at the Exercise Price described in Section 1.01(b). The
Exercise Price and the number and nature of the Warrant Shares which may be
purchased on exercise of this Warrant are subject to adjustment as provided
in Article III.
ARTICLE I
DEFINITIONS
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SECTION 1.01. (a) The term "Business Day" means a day other than a
Saturday, Sunday or other day on which banks in the State of New York are
authorized by law to remain closed.
(b) The term "Exercise Price" means, $6.00 per share, as that
price may be adjusted from time to time as provided in Article III.
(c) The term "Expiration Date" means May 28, 2005.
(d) The term "Warrant Holder" means the person or entity named
above or any other person or entity in whose name this Warrant is
registered on the books of the Company.
(e) The term "Warrants" means this Warrant and all warrants of
like tenor (together evidencing the right to purchase a total of 274,418
shares of Common Stock) originally issued under a Note Exchange Agreement
dated April 30, 1998 between the Company and the persons referred to in
that Note Exchange Agreement as the Noteholders.
(f) The term "Warrant Shares" means the shares of Common Stock
or other securities deliverable upon exercise of the Warrants.
ARTICLE II
DURATION AND EXERCISE OF WARRANT
--------------------------------
SECTION 2.01. This Warrant may be exercised at any time before 5:00
P.M., New York City time, on the Expiration Date. If this Warrant is not
exercised at or before 5:00 P.M., New York City time, on the Expiration
Date, it will become void and neither the Warrant Holder nor any other
person will have any rights under this Warrant.
SECTION 2.02. (a) To exercise this Warrant in whole or in part, the
Warrant Holder must surrender this Warrant, with the Subscription Form on
it duly executed, to the Company at its principal office accompanied by a
certified or official bank check payable to the order of the Company in an
amount equal to the Exercise Price for the Warrant Shares as to which this
Warrant is being exercised.
(b) When the Company receives this Warrant with the Subscription
Form duly executed and accompanied by payment of the full Exercise Price
for the Warrant Shares as to which this Warrant is being exercised, the
Company will issue certificates, registered in the name of the Warrant
Holder or such other names as are designated by the Warrant Holder,
representing the total number of shares of Common Stock (and other
securities, if any) as to which this Warrant is being exercised, in such
denominations as are requested by the Warrant Holder, and the Company will
deliver those certificates to the Warrant Holder.
(c) If the Warrant Holder exercises this Warrant with respect to
fewer than all the Warrant Shares to which it relates, the Company will
execute a new Warrant for the balance of the Warrant Shares that may be
purchased upon exercise of this Warrant and deliver that new Warrant to the
Warrant Holder.
(d) The Company will pay any taxes which may be payable in
respect of the issuance of Warrant Shares or in respect of the issuance of
a new Warrant if this Warrant is exercised as to fewer than all the Warrant
Shares to which it relates. The Company will not, however, be required to
pay any transfer tax which becomes payable because Warrant Shares or a new
Warrant are to be registered in a name other than that of the Warrant
Holder, and the Company will not be required to issue any Warrant Shares or
to issue a new Warrant registered in a name other than that of the Warrant
Holder until the Company receives either evidence that any applicable
transfer taxes have been paid or funds with which to pay those taxes.
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ARTICLE III
Adjustment of Shares of Common Stock
PURCHASABLE AND OF WARRANT PRICE
--------------------------------
SECTION 3.01. The Exercise Price and the shares of Common Stock or
other securities issuable on exercise of this Warrant are subject to
adjustment as follows:
(a) If, after April 15, 1998, the Company (i) makes a
distribution on its Common Stock in shares of its capital stock, (ii)
subdivides the outstanding Common Stock into a greater number of shares, or
(iii) combines the outstanding Common Stock into a lesser number of shares,
in each such case, the Exercise Price in effect at the record date for the
distribution or the effective date of the subdivision or combination will
be adjusted so that upon exercise of this Warrant after the record date or
effective date with respect to a specified number of Warrant Shares, the
Warrant Holder will receive the number and kind of shares which the Warrant
Holder would have owned if the Warrant Holder had exercised this Warrant
with respect to that number of Warrant Shares immediately before the first
of those events and retained all the shares and other securities which the
Warrant Holder received as a result of each of those events.
(b) If, after April 15, 1998, the Company fixes a record date
for the issuance (or issues without fixing a record date) to the holders of
the Common Stock of rights, options (other than options granted to
employees or directors of the Company or its subsidiaries under Plans
approved by the Company's stockholders) or warrants to subscribe for or
purchase Common Stock, or securities which are convertible into or
exchangeable for Common Stock, at an exercise, conversion or exchange price
per share less than the lesser of (i) the Exercise Price in effect, or (ii)
the mean of the high and low sale prices of the Common Stock reported in
the principal market on which the Common Stock is traded (which, on April
15, 1998 is the Nasdaq Small-Cap market) on the record date (or on the date
of issuance, if there is no record date), the Exercise Price will be
adjusted by multiplying the Exercise Price in effect immediately prior to
that record date (or issuance date) by a fraction, the numerator of which
is the number of shares of Common Stock outstanding on that record date
plus the number of shares of Common Stock which the aggregate exercise,
conversion or exchange price would purchase at that Exercise Price and the
denominator of which is the number of shares of Common Stock outstanding on
that record date (or issuance date) plus the number of additional shares of
Common Stock which the Company would be required to issue upon exercise,
conversion or exchange of all the rights, options, warrants or convertible
or exchangeable securities. Each adjustment will become effective at the
close of business on the record date for issuance of the rights, options,
warrants or convertible or exchangeable securities (or the date of
issuance, if there is no record date). For the purposes of this Section
3.01(b), the exercise, conversion or exchange price of rights, options,
warrants or convertible or exchangeable securities will include any
consideration the holders of the Common Stock are required to pay in order
to receive the rights, options, warrants or convertible or exchangeable
securities, as well as any consideration the holders are required to pay
upon exercise, conversion or exchange (other than surrender of the
securities being exercised, converted or exchanged). If the right to
exercise any rights, options or warrants, or to convert or exchange any
convertible or exchangeable securities, the issuance of which results in an
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adjustment under this Section 3.01(b), expires in whole or in part without
that right's being exercised, when that occurs, the Exercise Price will be
readjusted as though the rights, options, warrants or convertible or
exchangeable securities which were not exercised, converted or exchanged
had not been issued. However, no readjustment will affect any exercise of
this Warrant which takes place before the readjustment.
(c) If, after April 15, 1998, the Company distributes to the
holders of its Common Stock any cash (other than a cash dividend which,
together with all other cash dividends paid within 12 months before the
record date for the cash dividend, does not exceed five percent of the
Exercise Price in effect on the record date for the cash dividend),
evidences of indebtedness or other assets (other than distributions to
which Section 3.01(a) or (b) applies), in each such case, the Exercise
Price will be adjusted by subtracting from the Exercise Price in effect
immediately prior to the record date for the determination of stockholders
entitled to receive the distribution, the value of the cash, evidences of
indebtedness or other assets to be distributed with respect to a share of
Common Stock. Each adjustment under this Section will be effective at the
close of business on the record date for the determination of stockholders
entitled to receive the distribution which results in the adjustment. The
value of evidences of indebtedness or other assets will be their fair
market value as determined in good faith by the Board of Directors of the
Company.
(d) If, after April 15, 1998, the Company sells or otherwise
issues any Common Stock (other than in a transaction to which Section
3.01(a) applies or upon exercise of rights, options or warrants, or
conversion or exchange of convertible or exchangeable securities) at a
price per share which is less than the lesser of (i) the Exercise Price in
effect immediately before the sale or other issuance, or (ii) the Market
Price on the day before the sale or other issuance, in each such case, the
Exercise Price will be adjusted, effective at the close of business on the
day of the sale or other issuance, by multiplying the Exercise Price in
effect immediately before the sale or other issuance by a fraction (i) the
numerator of which will be equal to the sum of (A) the number of shares of
Common Stock outstanding immediately before the sale or other issuance plus
(B) the number of shares of Common Stock which could be purchased at the
Exercise Price in effect immediately before the sale or other the issuance
for the consideration received by the Company upon the sale or other
issuance, and (ii) the denominator of which will be the total number of
shares of Common Stock outstanding immediately after the sale or other
issuance. If, after April 15, 1998, the Company sells or otherwise issues
any rights, options, warrants or convertible or exchangeable securities
(other than in a distribution to which Section 3.01(b) applies and other
than options granted to employees or directors of the Company or its
subsidiaries under plans approved by the Company's stockholders), when it
does so it will, for the purpose of this Section 3.01(d), be treated as
having sold the Common Stock it would be required to issue upon exercise of
all the rights, options or warrants, or upon conversion or exchange of all
the convertible or exchangeable securities, for a price per share equal to
(i) (A) the total price paid for the rights, options or warrants or
convertible or exchangeable securities, divided by (B) the number of shares
of Common Stock issuable on exercise, conversion or exchange of the rights,
options, warrants or convertible or exchangeable securities, plus (ii) any
additional consideration per share of Common Stock which must be paid upon
exercise of the rights, options or warrants or conversion or exchange of
the convertible or exchangeable securities (other than surrender of the
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securities being exercised, converted or exchanged). If the right to
exercise any rights, options or warrants, or to convert or exchange any
convertible or exchangeable securities, the issuance of which results in an
adjustment under this Section 3.01(d), expires in whole or in part without
that right's being exercised, when that occurs, the Exercise Price will be
readjusted as though the rights, options, warrants or convertible or
exchangeable securities which were not exercised, converted or exchanged
had not been issued. However, no readjustment will affect any exercise of
this Warrant which takes place before the readjustment.
(e) If, after the April 15, 1998, there is a reclassification or
change of outstanding shares of Common Stock (other than a change in par
value or a change as a result of a subdivision or combination to which
Section 3.01(a) applies) or a merger or consolidation of the Company with
any other entity that results in a reclassification, change, conversion,
exchange or cancellation of outstanding shares of Common Stock, or a sale
or transfer of all or substantially all the assets of the Company and
distribution of all or a portion of the proceeds of that sale or transfer,
upon any subsequent exercise of this Warrant as to a specified number of
Warrant Shares, the Warrant Holder will be entitled to receive the kind and
amount of securities, cash and other property which the Warrant Holder
would have received if the Warrant Holder had exercised this Warrant as to
that number Warrant Shares immediately before the first of those events and
had retained all the securities, cash and other assets received as a result
of these events.
(f) If all or part of the consideration for, or payable on
exercise, conversion or exchange of, any shares of Common Stock, rights,
options, warrants or convertible or exchangeable securities is other than
cash, for the purposes of this Section 3.01, the non-cash consideration
will be valued at its fair market value as determined in good faith by the
Board of Directors of the Company. If in connection with any sale or other
issuance of Common Stock or other securities or assets, the Company is
required to pay underwriting discounts or other fees or commissions, for
the purposes of this Section 3.01, the consideration the Company receives
will be the amount it receives net of the underwriting discounts, fees or
commissions.
(g) If the exercise price of any rights, options or warrants, or
the conversion or exchange price of any convertible or exchangeable
securities, is changed, on the day the change becomes effective, the
Company will be treated for the purposes of the Warrants as having (i)
cancelled the outstanding rights, options, warrants or convertible or
exchangeable securities which were exercisable, convertible or exchangeable
at the prior price and (ii) issued new rights, options, warrants or
convertible or exchangeable securities which are exercisable, convertible
or exchangeable at the new price.
(h) No adjustment in the Exercise Price will be required if the
adjustment is less than $.10 per Warrant Share. However, any adjustments
which are not made because of this Section 3.01(h) will be carried forward
and taken into account in any subsequent adjustments. All calculations
under this Section 3.01 will be made to the nearest cent or to the nearest
whole share, as the case may be.
(i) Upon each adjustment of the Exercise Price under this
Section 3.01, the number of Warrant Shares which will be issued upon
exercise of this Warrant will be adjusted so that (i) if this Warrant is
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exercised in full, the Warrant Holder will receive (A) the number of
Warrant Shares the Warrant Holder would receive by exercising this Warrant
in full immediately before the adjustment, times (B) the Exercise Price in
effect immediately before the adjustment, divided by (C) the Exercise Price
in effect after the adjustment, and (ii) if this Warrant is exercised only
in part, the Warrant Holder will receive the fraction of the number of
Warrant Shares the Warrant Holder would have received if it had exercised
this Warrant in full of which the numerator is the number of Warrant Shares
as to which this Warrant is exercised and the denominator is the total
number of Warrant Shares issuable on exercise of this Warrant.
(j) If any adjustment in the Exercise Price or in the number of
shares or type of securities to be issued upon exercise of this Warrant
becomes effective as of a record date for a specified event, and this
Warrant is exercised between that record date and the date the event
occurs, the Company may elect to defer, until the event occurs, issuing to
the Warrant Holder the shares of Common Stock or other securities to which
the Warrant Holder is entitled solely by reason of that event. However, if
the Company does that, when this Warrant is exercised, the Company will
deliver to the Warrant Holder a due bill or other instrument evidencing the
Warrant Holder's right to receive the additional shares or other securities
upon occurrence of the event.
SECTION 3.02. Whenever the Exercise Price or the number of Warrant
Shares are adjusted as provided in this Section, the Company will send to
the Warrant Holder a certificate signed by its principal accounting officer
setting forth the adjusted Exercise Price, the adjusted number of Warrant
Shares and the date the adjustment became effective, and containing a brief
description of the events which caused the adjustment.
SECTION 3.03. If at any time after April 15, 1998:
(a) the Company declares a dividend or other distribution on its
Common Stock, other than a dividend payable in cash out of its
undistributed net income in an amount per share which, together with all
other cash dividends paid within 12 months before the record date for the
dividend, does not exceed five percent of the Exercise Price in effect on
that record date; or
(b) the Company authorizes the granting or issuance to the
holders of its Common Stock as a class of rights, warrants or options to
subscribe for or purchase any shares of any class or any other securities;
or
(c) there is any reclassification of the Common Stock (other
than a subdivision or combination of its outstanding Common Stock), or any
consolidation or merger to which the Company is a party and for which
approval of the holders of the Common Stock is required, or a sale or
transfer of all or substantially all the assets of the Company; or
(d) there is a voluntary or involuntary dissolution, liquidation
or winding up of the Company;
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in each case, the Company will mail to the Warrant Holder at least 20 days
before the applicable record date a notice stating (i) the record date for
the dividend, distribution or rights, or, if there will not be a record
date, the date as of which the holders of record of Common Stock who will
be entitled to the dividend, distribution or rights will be determined, or
(ii) the date on which the reclassification, consolidation, merger, sale,
transfer, dissolution, liquidation or winding up is expected to become
effective, and the date as of which it is expected the holders of record of
Common Stock who will be entitled to receive securities or other property
with respect to their Common Stock as a result of the reclassification,
consolidation, merger, sale, transfer, dissolution, liquidation or winding
up will be determined. Failure to give any notice or any defect in the
notice will not affect the validity of the action which should have been
the subject of the notice.
SECTION 3.04. The form of Warrant need not be changed because of any
change in the Exercise Price or in the number of Warrant Shares which may
be purchased by exercising Warrants and Warrants issued after the change
may state the same Exercise Price and the same number of Warrant Shares as
are stated in Warrants issued before the change. However, the Company may
at any time make any change in the form of Warrant that it deems
appropriate to reflect a change in the Exercise Price or in the Warrant
Shares which may be purchased by exercising Warrants (provided the change
in the form of Warrant does not otherwise affect the substance of the
Warrant), and any Warrant issued after the form of Warrant is changed may
be in the changed form.
ARTICLE IV
Other Provisions Relating to
RIGHTS OF WARRANT HOLDER
------------------------
SECTION 4.01. The Warrant Holder will not, as such, be entitled to
vote, to receive dividends or to have any other of the rights of a
shareholder of the Company, except that after this Warrant is exercised in
accordance with the terms of this Warrant, the persons in whose names the
Warrant Shares purchased through exercise of this Warrant are to be issued
will be deemed to become the holders of record of those Warrant Shares for
all purposes even if certificates representing those Warrant Shares are not
issued.
SECTION 4.02. (a) The Company will at all times reserve and keep
available for issuance upon exercise of this Warrant the number of
authorized and unissued shares of Common Stock equal to the maximum number
of shares of Common Stock the Company may be required to issue upon
exercise of this Warrant.
(b) The Company will take all steps which are necessary so that
all the shares of Common Stock (or other securities) which the Company may
be required to issue on exercise of this Warrant will, upon issuance, be
listed on each securities exchange and quoted on each automated quotation
system on which the Common Stock is (or those other securities are) listed
or quoted.
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(c) All shares of Common Stock issued on exercise of this
Warrant will, when they are issued, be validly issued, fully paid,
nonassessable and free of preemptive rights.
SECTION 4.03. The Company will not be required to issue any fraction
of a share upon exercise of this Warrant. In any case in which the Warrant
Holder would, except for the provisions of this Section 4.03, be entitled
to receive a fraction of a share upon exercise of this Warrant, the Company
will, upon exercise of this Warrant, issue the maximum number of whole
shares it is required to issue, but the Company will not be required to
make any payment or give any other consideration with respect to a fraction
of a share to which the Warrant Holder would be entitled except for this
Section 4.03.
SECTION 4.04. The Company will maintain a Warrant Register in which
the name and address of each registered holder of Warrants will be
recorded.
SECTION 4.05. Notices or other communications to the Warrant Holder
will be deemed given by the Company on the third Business Day after the day
on which they are sent by first class mail addressed to the Warrant Holder
at the Warrant ▇▇▇▇▇▇'s last known address shown on the Warrant Register
maintained by the Company.
SECTION 4.06. Until this Warrant is properly presented for
registration of transfer of this Warrant, the Company may treat the Warrant
Holder as the absolute owner of this Warrant for all purposes, including
for the purpose of determining the persons entitled to exercise this
Warrant, despite any notice to the contrary.
ARTICLE V
TRANSFER OF WARRANTS
--------------------
SECTION 5.01. This Warrant may not be sold, transferred, assigned, or
hypothecated, except in a transaction registered under the Securities Act
of 1933, as amended, (the "Securities Act") or which is exempt from the
registration requirements of that Act.
SECTION 5.02. Upon surrender of this Warrant to the Company at its
principal office with the Form of Assignment (or another instrument of
assignment) duly executed and accompanied by (i) evidence that any transfer
tax has been paid, or funds sufficient to pay any transfer tax, and (ii)
evidence reasonably satisfactory to the Company that the proposed
assignment will not violate Section 5.01, the Company will, without charge,
execute and deliver a new Warrant registered in the name of the assignee
named in the Form of Assignment (or other instrument of assignment) and
will promptly cancel this Warrant. This Warrant may be divided or combined
with other Warrants by surrender of this Warrant and any other Warrants
with which it is to be combined at the principal office of the Company
together with a written notice, signed by the Warrant Holder, specifying
the names and denominations in which new Warrants are to be issued.
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SECTION 5.03. Upon receipt by the Company of evidence reasonably
satisfactory to it of the loss, theft, destruction or mutilation of this
Warrant, and (in the case of loss, theft or destruction) of reasonably
satisfactory indemnification, or (in the case of mutilation) upon surrender
of this Warrant, the Company will execute and deliver a new Warrant
relating to the same number of Warrant Shares as this Warrant and the lost,
stolen, destroyed or mutilated Warrant will become void. Any new Warrant
executed and delivered in accordance with this Section 5.03 will constitute
an additional contractual obligation of the Company, and will be valid and
enforceable whether or not the Warrant which was believed to have been
lost, stolen or destroyed is subsequently presented for exercise.
ARTICLE VI
REGISTRATION UNDER THE SECURITIES ACT OF 1933
---------------------------------------------
SECTION 6.01. The holders of the Warrants will be entitled to the
benefits of a Registration Rights Agreement dated April 30, 1998 among the
Company, American Endeavour Fund Limited and London Pacific Life & Annuity
Company.
SECTION 6.02. Unless the resale of Warrant Shares is the subject of a
registration statement which has become effective under the Securities Act,
the certificates representing Warrant Shares issued on exercise of this
Warrant may bear the following legend:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED. THOSE SHARES MAY NOT BE OFFERED, SOLD OR
TRANSFERRED, EXCEPT IN A TRANSACTION WHICH (i) IS
REGISTERED UNDER THAT ACT OR (ii) IS EXEMPT FROM THE
REGISTRATION REQUIREMENTS OF THAT ACT."
ARTICLE VII
OTHER MATTERS
-------------
SECTION 7.01. The provisions of this Warrant will bind, and inure to
the benefit of, the Company and its successors and assigns.
SECTION 7.02. (a) Any notice or other communication to the Company
relating to this Warrant will be deemed given on the day when it is
delivered or sent by facsimile transmission (with a confirmation copy sent
by mail), or on the third Business Day after the day on which it is sent by
first-class mail, to the Company at the following address (or such other
address as may be specified by the Company after the date of this Warrant):
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Family Bargain Corporation
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: President
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
(b) Any notice or other communication to the Warrant Holder will
be deemed given when and as provided in Section 4.05.
SECTION 7.03. This Warrant will be governed by, and construed under,
the laws of the State of New York relating to contracts made and to be
performed in that state.
SECTION 7.04. The Article headings in this Warrant are for
convenience only, are not part of this Warrant and are not intended to
affect the meaning or interpretation of any of the terms of this Warrant.
IN WITNESS WHEREOF, this Warrant has been executed by the Company on
April 30, 1998.
FAMILY BARGAIN CORPORATION
By /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
___________________________________________
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Executive Vice President
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FORM OF ASSIGNMENT
------------------
(To Be Signed Only Upon Assignment)
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers the attached Warrant to __________________________________ to the
extent of the right to purchase _________________ Warrant Shares, and the
undersigned appoints ___________________________, with full power of
substitution, to transfer that Warrant, with respect to the right to
purchase that number of Warrant Shares, on the books of Family Bargain
Corporation.
Dated: ___________, ____
______________________________________________
(Signature must conform to the name of the
Warrant Holder specified on the face of the
Warrant)
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SUBSCRIPTION FORM
-----------------
To: FAMILY BARGAIN CORPORATION
The undersigned irrevocably elects to purchase ________ Warrant Shares
by exercising the Warrant to which this form is attached and tenders
payment of the full Exercise Price with respect to those Warrant Shares.
The undersigned requests that the certificates representing the Warrant
Shares as to which the Warrant is being exercised be registered as follows:
Name: _________________________________________________________
Social Security or Employer Identification Number:_____________
Address: ______________________________________________________
Deliver to: ___________________________________________________
Address: ______________________________________________________
______________________________________________________
If the Warrant Shares as to which the Warrant is being exercised
are fewer than all the Warrant Shares to which the Warrant relates, please
issue a new Warrant for the balance of those Warrant Shares registered in
the name of the undersigned and deliver it to the undersigned at the
following address:
Address: ______________________________________________________
______________________________________________________
Date:_______________ Signature____________________________________
(Signature must conform to the name
of the Warrant Holder specified on
the face of the Warrant)
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