AMENDMENT TO COMMON STOCK WARRANT
THIS AMENDMENT TO COMMON STOCK PURCHASE WARRANT (the "Amendment") is
effective as of the 20th day of August, 1998, by HOME RETAIL HOLDINGS, INC., a
Delaware Corporation with its principal place of business located at ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ (the "Company"), and LIBERTY BIDCO
INVESTMENT CORPORATION, whose principal office is located at ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ ("BIDCO").
WHEREAS, the Company executed, issued and delivered a Common Stock
Purchase Warrant dated August 12, 1998, evidencing the right to purchase of
92,595 fully paid and non-assessable shares of Common Stock of the Company, at
the price per share of $.01 subject to certain adjustments (the "Warrant") to
BIDCO; and
WHEREAS, ▇▇▇▇▇ has since made additional financial accommodations to
the Company on even date herewith;
NOW, THEREFORE, in consideration of the foregoing Recitals, the terms,
covenants and conditions hereinafter set forth, and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
Company agrees to the following amendments to the Warrant, and BIDCO consents to
such amendments, as follows:
1. Unless otherwise defined herein, capitalized words shall have the same
meaning as set forth in the Warrant.
2. Effective as of the date hereof, all Warrants and the Common Stock to be
issued upon the exercise of the Warrants shall be subject to a put option by
BIDCO on the terms contained in Sections 2 and 3 hereof (the "Put Option").
BIDCO, in its sole discretion, shall have the right and option to have the
Warrant redeemed by the Company at the greater of: (i) $400,000, or (ii) the
difference between the Purchase Price and the then current Fair Market Value
(the "Warrant Put Price"); and BIDCO, in its sole discretion, shall have the
right and option to have the Common Stock issued upon the exercise of the
Warrant redeemed by the Company at the greater of: (i) $400,000, or (ii) the
then current Fair Market Value of such Common Stock (the "Stock Put Price") (in
each respective case, the "Put Price"). In the event that the Put Option is
exercised and BIDCO has partially exercised the Warrant such that it is a Holder
of both Warrants and Common Stock, the Put Price shall be the sum of the number
of the unexercised Warrants over the original number of Warrants multiplied by
the amount of the Warrant Put Price had the Warrant remained completely
unexercised, plus the number of Shares issued upon exercise over the number of
Shares originally issuable under the Warrant multiplied by the amount of the
Stock Put Price had the Warrant been completely exercised. For purposes of this
Amendment, the term "Fair Market Value" of such Common Stock shall mean the
average trading price for the Common Stock over the ten (10) days immediately
prior to the date of the Put Notice reported on the NASDAQ Stock Exchange, or if
the Common Stock is not reported on the NASDAQ Stock Exchange then as reported
on any nationally recognized securities exchange, or if not reported on any
nationally recognized securities exchange then as reported on the over the
counter market. Upon provision by BIDCO of written notice to the Company of
BIDCO's exercise of the Put Option (the "Put Notice"), the Company shall pay to
BIDCO the Put Price in cash.
3. BIDCO's Put Option shall not be exercisable (except pursuant to Section 4
below) until the earlier of: (x) thirteen (13) months following a registration
of the Common Stock by filing a registration statement in compliance with the
Securities Act; or (y) January 31, 2000; provided, however, that BIDCO agrees to
provide the Company with notice six months prior to the exercise of the Put
Option (the "Intent Notice"), which Intent Notice shall be non-binding upon
BIDCO such that BIDCO shall not be required to actually exercise the Put Option
and that BIDCO shall have absolutely no liability or obligation whatsoever for
costs, expenses or fees of any nature, incurred by the Company, its
representatives or agents in reliance upon or because of the Intent Notice.
4. Notwithstanding any other provision of this Amendment or the Warrant, in the
event that, while BIDCO holds the Warrant or Shares issued pursuant to thereto,
more then a twenty-percent (20%) of the total shares of common stock of the
Company are sold other than as contemplated in Section 1 of the Warrant, or if a
substantial portion of the assets (more than 50%) of the Company are sold out of
the ordinary course of business, then BIDCO shall have the option, but not the
obligation, to put this Warrant or the Shares issued pursuant hereto to the
Company, as of the closing date of such transfer or sale. The amount to be paid
to Holder shall be the greater of:
(i) Put Price set forth above, or
(ii) Five Percent (5%) of the purchase price of the assets (based on the
value of all assets of the Company
Amounts due hereunder are payable upon the transfer.
5. The definition of the term "Registration Period" on page 2 of the Warrant is
hereby modified and amended to read in its entirety as follows:
The term "Registration Period" shall mean the period
commencing immediately after the closing of the Company's
first public offering of securities registered under the
Securities Act that takes place after the Original Issue Date
and ending on the earlier of the third anniverary thereof and
the Expiration Date.
6. Subsection 1.1 of the Warrant is hereby amended by deleting therefrom the
sentence appearing on Page 3 of the Warrant and which heretofore read as
follows:
"Notwithstanding the foregoing the Company shall not be
required to include more than 25% of the Registerable
Securities in the first public offering of securities
registered under the Securities Act that takes place after the
Original Issue Date."
7. Except as expressly amended and modified herein, the terms and provisions of
the Warrant as hereby confirmed, affirmed and ratified as if fully set forth
herein.
8. The execution and delivery of this Amendment is a condition precedent to
BIDCO granting the additional financial accommodations to Company on even date
herewith.
2
9. This Amendment may be executed in as many counterparts as may be convenient,
and via facsimile transmission, each of which when so executed shall be deemed
to be an original for all purposes, and shall become binding when the Company
and BIDCO have executed at least one counterpart.
10. The parties agree to perform any further acts and to execute and deliver any
additional documents which may be reasonably necessary to carry out the intent
and provisions of this Amendment.
11. This Amendment shall be binding upon and shall inure to the benefit of the
Company and BIDCO, and their respective successors and assigns.
IN WITNESS WHEREOF, the parties have signed this Amendment to Common
Stock Purchase Warrant, intending to be legally bound thereby as of the day and
date first set forth above.
COMPANY
HOME RETAIL HOLDINGS, INC.,
ATTEST: a Delaware Corporation
/s/ ▇▇▇▇ ▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-------------------------------------------- ---------------------------------------------------------
▇▇▇▇ ▇▇▇▇▇▇, Secretary Its: Interim CEO
ACCEPTED, ACKNOWLEDGED AND AGREED
LIBERTY BIDCO INVESTMENT CORPORATION
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
--------------------------------------------- ---------------------------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Vice President
3