WARRANT AGREEMENT
BETWEEN
FLOOR DECOR, INC.
AND
WARRANT HOLDERS
Dated as of January ___, 2002
SCHEDULE 1
TABLE OF CONTENTS
Page
ARTICLE I WARRANT CERTIFICATES...............................1
1.1 Form of Warrant Certificates.......................1
1.2 Execution of Warrant Certificates..................1
ARTICLE II WARRANT EXERCISE PRICE AND EXERCISE OF WARRANTS.............1
2.1 Exercise Price.....................................1
2.2 Exercisability of Warrants.........................2
2.3 Procedure of Exercise of Warrants..................2
2.4 Issuance of Warrant Shares.........................2
2.5 Certificates for Unexercised Warrants..............2
2.6 Reservation of Shares..............................2
2.7 Callability of Warrant.............................2
ARTICLE III ADJUSTMENTS AND NOTICE PROVISIONS...........................3
3.1 Adjustment of Exercise Price.......................3
3.2 No Adjustments to Exercise Price...................3
3.3 Deferral of Adjustments to Exercise Price..........3
3.4 Reorganizations....................................3
3.5 Reclassifications..................................4
3.6 Verification of Computations.......................4
3.7 Notice of Certain Actions..........................4
3.8 Notice of Adjustments..............................5
3.9 Warrant Certificate Amendments.....................5
ARTICLE IV OTHER PROVISIONS RELATING TO RIGHTS OF
HOLDERS OF WARRANT CERTIFICATES.............................5
4.1 Rights of Warrant Holders..........................5
4.2 Lost, Stolen, Mutilated or Destroyed Warrant
Certificates......................................6
ARTICLE V SPLIT UP, COMBINATION, EXCHANGE, TRANSFER
AND CANCELLATION OF WARRANT CERTIFICATES...........6
5.1 Split Up, Combination, Exchange and Transfer of
Warrant Certificates...............................6
5.2 Cancellation of Warrant Certificates...............6
5.3 Agreement of Warrant Certificate Holders...........6
ARTICLE VI OTHER MATTERS...............................................7
6.1 Payment of Taxes and Charges.......................7
6.2 Assignment.........................................7
6.3 Successor to Company...............................7
6.4 Notices............................................7
6.5 Defects in Notice..................................8
6.6 Governing Law......................................8
6.7 Standing...........................................8
6.8 Headings...........................................8
6.9 Counterparts.......................................8
6.10 Amendment, Waiver..................................8
Form of Warrant Certificate ................................A-1
Form of Election Purchase..........................................A-3
WARRANT AGREEMENT
WARRANT AGREEMENT dated as of January ___,2002, between Floor Decor,
Inc., a Delaware corporation (the "Company"), and the Warrantholders executing
below to whom this Warrant has been issued by the Company (collectively, the
"Warrantholders").
W I T N E S S E T H:
WHEREAS, the Company proposes to issue the within warrants to purchase
shares (the "Warrant Shares") of the Company's Common Stock (the "Common
Stock"), pursuant to individual Subscription Agreements between the Company and
each of the Warrantholders (the"Purchase Agreements") in connection with each
Warrantholder's purchase of Common Stock from the Company; and
WHEREAS, the Company and the Warrantholders desire to set forth in this
Warrant Agreement, among other things, the form and provisions of the Warrants
as set forth in certificates representing the Warrants (the "Warrant
Certificates") and the terms and conditions under which they may be issued,
transferred, exchanged, replaced, redeemed and surrendered in connection with
the exercise and redemption of the Warrants.
NOW, THEREFORE, in consideration of the promises and of the mutual
agreements herein contained, the parties hereto agree as follows:
ARTICLE I
WARRANT CERTIFICATES
1.1 Form of Warrant Certificates. The Warrant Certificates shall be
substantially in the form of Exhibit A attached hereto and, in addition, may
have such letters, numbers or other marks of identification or designation and
such legends, summaries or endorsements stamped or printed, thereon as the
Company may deem appropriate and as are not inconsistent with the provisions of
this Agreement or as, in any particular case, may be required, in the opinion of
counsel for the Company, to comply with any law or with any rule or regulation
of any regulatory authority or agency or to conform to customary usage.
1.2 Execution of Warrant Certificates. The Warrant Certificates shall
be executed on behalf of the Company by its Chairman of the Board, Chief
Executive Officer or President or any Vice President, and by its Chief Financial
Officer or Treasurer or any Assistant Treasurer, or Secretary or any Assistant
Secretary, either manually or by facsimile signature printed thereon.
ARTICLE II
WARRANT EXERCISE PRICE AND EXERCISE OF WARRANTS
2.1 Exercise Price. Each Warrant Certificate shall, when signed by the
Chairman, Chief Executive Officer or President or any Vice President, and by the
Chief Financial Officer or Treasurer or any Assistant Treasurer, or Secretary or
any Assistant Secretary, of the Company, entitle the registered holder thereof,
to purchase from the Company, Warrant Shares of the Company's Common Stock for
the price of $0.75 per share (the "Initial Exercise Price") for each Warrant
Share included in the Warrant. Except as the context otherwise requires, the
term "Exercise Price" as used in this Agreement shall mean the Initial Exercise
Price per share for the purchase of one Warrant Share, times the total number of
Warrant Shares being purchased pursuant to the exercise of the Warrant, and, as
the context requires, reflecting all appropriate adjustments made in accordance
with the provisions of Article III hereof.
2.2 Exercisability of Warrants. Each Warrant may be exercised at any
time until the December 31, 2003. The term "Exercise Deadline" as used in this
Agreement shall mean the latest time and date at which the Warrants may be
exercised.
2.3 Procedure for Exercise of Warrants. During the period specified in
Section 2.2 hereof, the Warrants may be exercised by surrendering the Warrant
Certificates representing such Warrants to the Company, with the election to
purchase form set forth on the Warrant Certificate duly completed and executed,
accompanied by payment in full of the Exercise Price as provided in Section 2.1
in effect at the time of such exercise, together with such taxes as are
specified in Section 6.1 hereof, for each share of Common Stock with respect to
which such Warrants are being exercised. Such Exercise Price and taxes shall be
paid in full by certified check or money order, payable in United States
currency, to the Company. The date on which Warrants are exercised in accordance
with this Section 2.3 is sometimes referred to herein as the Date of Exercise of
such Warrants.
2.4 Issuance of Warrant Shares. As soon as practicable after the Date
of Exercise of any Warrants, the Company shall issue, or cause its transfer
agent for the Common Stock, if any, to issue a certificate or certificates for
the number of full shares of Common Stock to which such holder is entitled,
registered in accordance with the instructions set forth in the election to
purchase. All Warrant Shares shall be validly authorized and issued, fully paid
and nonassessable and free from all taxes, liens and charges created by the
Company in respect of the issue thereof, and shall be previously unissued
shares. Each person in whose name any such certificate for Warrant Shares is
issued shall for all purposes be deemed to have become the holder of record of
the Warrant Shares represented thereby on the Date of Exercise of the Warrants
resulting in the issuance of such shares, irrespective of the date of issuance
or delivery of such certificate for the Warrant Shares.
2.5 Certificates for Unexercised Warrants. In the event that less than
all of the Warrants represented by a Warrant Certificate are exercised, the
Company shall execute and mail, by first-class mail, within 30 days of the Date
of Exercise, to the registered holder of such Warrant Certificate, or such other
person as shall be designated in the election to purchase, a new Warrant
Certificate representing the number of full Warrants not exercised. In no event
shall a fraction of a Warrant be exercised, and the Company shall distribute no
Warrant Certificates representing fractions of Warrants under this or any other
section of this Agreement.
2.6 Reservation of Shares. The Company shall at all times reserve and
keep available for issuance upon the exercise of Warrants a number of its
authorized but unissued shares of Common Stock that will be sufficient to permit
the exercise in full of all outstanding Warrants.
2.7 Callability of Warrant. The Company shall have the right to call
the Warrant on the following terms and conditions:
1. If the average trading price of the Shares is at least $1.25
for a period of twenty (20) consecutive business days, then
the Company shall have the right to call the Warrants.
2. In the event that the Company exercises its call rights as
set forth above, then the Warrantholder shall have the right
within thirty (30) days after date of notification to
exercise the Warrant rights provided for herein. In the
event that the Warrantholder fails to exercise such Warrant
rights, then the Warrant issued hereunder shall no longer be
exercisable and shall be canceled and of no further force
and effect.
ARTICLE III
ADJUSTMENTS AND NOTICE PROVISIONS
3.1 Adjustment of Exercise Price. Subject to the provisions of this
Article III, the Exercise Price in effect from time to time shall be subject
to adjustment, as follows:
In case the Company shall at any time after the date hereof
(i) declare a dividend on the outstanding Common Stock payable in shares of its
capital stock, (ii) subdivide the outstanding Common Stock, (iii) combine the
outstanding Common Stock into a smaller number of shares, or (iv) issue any
shares of its capital stock 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, in each case, the Exercise
Price in effect, and the number of shares of Common Stock issuable upon exercise
of the Warrants outstanding, at the time of the record date for such dividend or
of the effective date of such subdivision, combination or reclassification,
shall be proportionately adjusted so that the holders of the Warrants after such
time shall be entitled to receive the aggregate number and kind of shares which,
if such Warrants had been exercised immediately prior to such time, such holders
would have owned upon such exercise and been entitled to receive by virtue of
such dividend, subdivision, combination or reclassification. Such adjustment
shall be made successively whenever any event listed above shall occur.
3.2 No Adjustments to Exercise Price. No adjustment in the Exercise
Price shall be required if such adjustment is less than $.05; provided, however,
that any adjustments which by reason of this Article III are not required to be
made shall be carried forward and taken into account in any subsequent
adjustment. All calculations under this Article III shall be made to the nearest
cent or to the nearest one hundredth of a share, as the case may be.
3.3 Deferral of Adjustments to Exercise Price. In any case in which
this Article III shall require that an adjustment in the Exercise Price be made
effective as of a record date for a specified event, the Company may elect to
defer, until the occurrence of such event, issuing to the holders of the
Warrants, if any holder has exercised a Warrant after such record date, the
shares of Common Stock, if any, issuable upon such exercise over and above the
shares of Common Stock, if any, issuable upon such exercise on the basis of the
Exercise Price in effect prior to such adjustment; provided, however, that the
Company shall deliver to such exercising Holder a due ▇▇▇▇ or other appropriate
instrument evidencing such holder's right to receive such additional shares upon
the occurrence of the event requiring such adjustment.
3.4 Reorganizations. In case of any capital reorganization, other than
in the cases referred to in Section 3.1 hereof, or the consolidation or merger
of the Company with or into another corporation (other than a merger or
consolidation in which the Company is the continuing corporation and which does
not result in any reclassification of the outstanding shares of Common Stock or
the conversion of such outstanding shares of Common Stock into shares of other
stock or other securities or property), or in the case of any sale, lease or
conveyance to another corporation of the property and assets of any nature of
the Company as an entirety or substantially as an entirety (such actions being
hereinafter collectively referred to as "Reorganizations"), there shall
thereafter be deliverable upon exercise of any Warrant (in lieu of the number of
shares of Common Stock theretofore deliverable) the number of shares of stock or
other securities or property to which a holder of the number of shares of Common
Stock which would otherwise have been deliverable upon the exercise of such
Warrant would have been entitled upon such Reorganization if such Warrant had
been exercised in full immediately prior to such Reorganization. In case of any
Reorganization, appropriate adjustment, as determined in good faith by the Board
of Directors of the Company, shall be made in the application of the provisions
herein set forth with respect to the rights and interests of Warrant holders so
that the provisions set forth herein shall thereafter be applicable, as nearly
as possible, in relation to any shares or other property thereafter deliverable
upon exercise of Warrants. Any such adjustment shall be made by and set forth in
a notice to the holders of the Warrant Certificates and shall for all purposes
hereof conclusively be deemed to be an appropriate adjustment. The Company shall
not effect any such Reorganization unless upon or prior to the consummation
thereof the successor corporation, or if the Company shall be the surviving
corporation in any such Reorganization and is not the issuer of the shares of
stock or other securities or property to be delivered to holders of shares of
the Common Stock outstanding at the effective time thereof, then such issuer,
shall assume by written instrument the obligation to deliver to the registered
holder of any Warrant Certificate such shares of stock, securities, cash or
other property as such holder shall be entitled to purchase in accordance with
the foregoing provisions. In the event of sale, lease or conveyance or other
transfer of all or substantially all of the assets of the Company as part of a
plan for liquidation of the Company, all rights to exercise any Warrant shall
terminate 30 days after the Company gives written notice to each registered
holder of a Warrant Certificate that such sale or conveyance or other transfer
has been consummated.
3.5 Reclassifications. In case of any reclassification or change of the
shares of Common Stock issuable upon exercise of the Warrants (other than a
change in par value or from no par value to a specified par value, or as a
result of a subdivision or combination, but including any change in the shares
into two or more classes or series of shares), or in case of any consolidation
or merger of another corporation into the Company in which the Company is the
continuing corporation and in which there is a reclassification or change
(including a change to the right to receive cash or other property) of the
shares of Common Stock (other than a change in par value, or from no par value
to a specified par value, or as a result of a subdivision or combination, but
including any change in the shares into two or more classes or series of
shares), the holders of the Warrants shall have the right thereafter to receive
upon exercise of the Warrants solely the kind and amount of shares of stock and
other securities, property, cash, or any combination thereof receivable upon
such reclassification, change, consolidation or merger by a holder of the number
of shares of Common Stock for which the Warrants might have been exercised
immediately prior to such reclassification, change, consolidation or merger.
Thereafter, appropriate provision shall be made for adjustments which shall be
as nearly equivalent as practicable to the adjustments in Article III. The above
provisions of this Section 3.5 shall similarly apply to successive
reclassifications and changes of shares of Common Stock.
3.6 Verification of Computations. Whenever the exercise price is
adjusted as provided in this Article III, the Company will promptly obtain a
certificate of its Chief Financial Officer setting forth the exercise price as
so adjusted and a brief statement of the facts accounting for such adjustment,
and will make available a brief summary thereof to the holders of the Warrant
Certificates, at their addresses listed on the register maintained for that
purpose by the Company (which summary may be included in any notice of
adjustment required by Section 3.8 hereof).
3.7 Notice of Certain Actions. In case at any time the Company shall
propose:
3. to pay any dividend or make any distribution on shares of
Common Stock in shares of Common Stock or make any other
distribution (other than regularly scheduled cash dividends
which are not in a greater amount per share than the most
recent such cash dividend) to all holders of Common Stock;
or
4. to issue any rights, warrants or other securities to all
holders of Common Stock entitling them to purchase any
additional shares of Common Stock or any other rights,
warrants or other securities; or
5. to effect any consolidation, merger, sale, lease, or
conveyance of property, described in Section 3.4, or any
reclassification or change of outstanding shares of Common
Stock, described in Section 3.5; or
6. to effect any liquidation, dissolution or winding-up of the
Company; or
7. to take any other action which would cause an adjustment to
the Exercise Price;
then, in each such case, the Company shall cause notice of such proposed action
to be mailed to the holders of the Warrant Certificates. Such notice shall
specify the date on which the books of the Company shall close, or a record
shall be taken, for determining holders of Common Stock entitled to receive such
stock dividend or other distribution or such rights or warrants, or the date on
which such reclassification, change, consolidation, merger, sale, lease, other
disposition, liquidation, dissolution, winding up or exchange or other action
shall take place or commence, as the case may be, and the date as of which it is
expected that holders of record of Common Stock shall be entitled to receive
securities or other property deliverable upon such action, if any such date has
been fixed. Such notice shall be mailed, in the case of any action covered by
Subsection 3.7(a) or 3.7(b) above, at least 15 days prior to the record date for
determining holders of the Common Stock for purposes of receiving such payment
or offer; in the case of any action covered by Subsection 3.7(c) or 3.7(d)
above, at least 15 days prior to the earlier of the date upon which such action
is to take place or any record date to determine holders of Common Stock
entitled to receive such securities or other property; and in the case of any
action covered by Subsection 3.7(e) above, no more than 15 days after such
action.
3.8 Notice of Adjustments. Whenever any adjustment is made pursuant to
this Article III, the Company shall cause written notice of such adjustment to
be sent by registered mail, postage prepaid to the holders of Warrant
Certificates within 15 days thereafter, such notice to include in reasonable
detail (i) the events precipitating the adjustment, (ii) the computation of any
adjustments, and (iii) the Exercise Price, the number of shares or the
securities or other property purchasable upon exercise of each Warrant.
3.9 Warrant Certificate Amendments. Irrespective of any adjustments
pursuant to this Article III, Warrant Certificates theretofore or thereafter
issued need not be amended or replaced but certificates thereafter issued shall
bear an appropriate legend or other notice of any adjustments.
ARTICLE IV
OTHER PROVISIONS RELATING TO RIGHTS OF
HOLDERS OF WARRANT CERTIFICATES
4.1 Rights of Warrant Holders. No Warrant Certificate shall entitle the
registered holder thereof to any of the rights of a shareholder of the Company,
including, without limitation, the right to vote, to receive dividends and other
distributions, or to receive any notice of, or to attend, meetings of
shareholders or any other proceedings of the Company.
4.2 Lost, Stolen, Mutilated or Destroyed Warrant Certificates. If any
Warrant Certificate shall be mutilated, lost, stolen or destroyed, the Company
shall execute and deliver, in exchange and substitution for and upon
cancellation of a mutilated Warrant Certificate, or in lieu of or in
substitution for a lost, stolen or destroyed Warrant Certificate, a new Warrant
Certificate for the number of Warrants represented by the Warrant Certificate so
mutilated, lost, stolen or destroyed but only upon receipt of evidence of such
loss, theft or destruction of such Warrant Certificate, and of the ownership
thereof, and indemnity, if requested, all satisfactory to the Company.
Applicants for such substitute Warrant Certificates shall also comply with such
other reasonable regulations and pay such other reasonable charges incidental
thereto as the Company may prescribe. Any such new Warrant Certificate shall
constitute an original contractual obligation of the Company, whether or not the
allegedly lost, stolen, mutilated or destroyed Warrant Certificate shall be at
any time enforceable by anyone.
ARTICLE V
SPLIT UP, COMBINATION, EXCHANGE, TRANSFER
AND CANCELLATION OF WARRANT CERTIFICATES
5.1 Split Up, Combination. Exchange and Transfer of Warrant
Certificates. Prior to the Exercise Deadline, Warrant Certificates, subject to
the provisions of Section 5.2, may be split up, combined or exchanged for other
Warrant Certificates representing a like aggregate number of Warrants or may be
transferred in whole or in part. Any holder desiring to split up, combine or
exchange a Warrant Certificate or Warrant Certificates shall make such request
in writing delivered to the Company and shall surrender the Warrant Certificate
or Warrant Certificates so to be split up, combined or exchanged at said office.
Subject to any applicable laws, rules or regulations restricting
transferability, any restriction on transferability that may appear on a Warrant
Certificate in accordance with the terms hereof, or any "stoptransfer"
instructions the Company may give to implement any such restrictions (which
instructions the Company is expressly authorized to give), transfer of
outstanding Warrant Certificates may be effected from time to time upon the
books of the Company, upon a surrender of the Warrant Certificate to the
Company, with the assignment form set forth in the Warrant Certificate duly
executed. Upon any such surrender for split up, combination, exchange or
transfer, the Company shall execute and deliver to the person entitled thereto a
Warrant Certificate or Warrant Certificates, as the case may be, as so
requested. The Company may require the holder to pay a sum sufficient to cover
any tax or governmental charge that may be imposed in connection with any split
up, combination, exchange or transfer of Warrant Certificates prior to the
issuance of any new Warrant Certificate.
5.2 Cancellation of Warrant Certificates. Any Warrant Certificate
surrendered upon the exercise of Warrants or for split up, combination, exchange
or transfer, or purchased or otherwise acquired by the Company, shall be
canceled and shall not be reissued by the Company; and, except as provided (1)
in Section 2.5, in case of the exercise of less than all of the Warrants
evidenced by a Warrant Certificate, or (ii) in Section 5.1, in case of a split
up, combination, exchange or transfer of the Warrants evidenced by a Warrant
Certificate, no Warrant Certificate shall be issued hereunder in lieu of such
canceled Warrant Certificate.
5.3 Agreement of Warrant Certificate Holders. Every holder of a
Warrant Certificate by accepting the same consents and agrees with the Company
and with every other holder of a Warrant Certificate that:
(1) transfer of the Warrant Certificates shall be registered on
the books of the Company maintained for that purpose, duly
endorsed or accompanied by a proper instrument of transfer;
and
(2) prior to due presentment for registration of transfer, the
Company may deem and treat the person in whose name the
Warrant Certificate is registered as the absolute owner
thereof and of the Warrants evidenced thereby,
(notwithstanding any notations of ownership or writing on
the Warrant Certificates made by anyone other than the
Company) for all purposes whatsoever, and the Company shall
not be affected by any notice to the contrary.
ARTICLE VI
OTHER MATTERS
6.1 Payment of Taxes and Charges. Any transfer taxes due in connection
with the issuance of Warrant Certificates or certificates for shares of Common
Stock in any name other than that of the registered holder of the Warrant
Certificate surrendered shall be paid by such registered holder; and, in such
case, the Company shall not be required to issue or deliver any Warrant
Certificate or certificate for shares of Common Stock until such taxes shall
have been paid or it has been established to the Company's satisfaction that no
tax is due.
6.2 Assignment. All the covenants and provisions of this Agreement by
or for the benefit of the Company or the Warrantholders shall bind and inure to
the benefit of their respective successors and assigns. The securities
represented by this investment or document have been acquired for investment and
have not been registered under the Securities Act of 1933, as amended, or any
sate securities laws. Without such registration, such securities may not be
sold, pledged, hypothecated or otherwise transferred, except with the written
consent of the Company, which consent may be withheld in the sole discretion of
the Company, and except upon delivery to the Company that such registrations are
not required for such transfer or the submission to the Company to the effect
that any such transfer shall not be in violation of the Securities Act of 1933,
as amended, applicable state securities laws or any rule or regulation
promulgated thereunder.
6.3 Successor to Company. The Company will not merge or consolidate
with or into any other corporation or sell or otherwise transfer its property,
assets and business substantially as an entirety to a successor corporation,
unless the corporation resulting from such merger, consolidation, sale or
transfer (if not the Company) shall expressly assume, by supplemental agreement,
the due and punctual performance and observance of each and every covenant and
condition of this Agreement to be performed and observed by the Company.
6.4 Notices. Any notice or demand required by this Agreement to be
given or made by the registered holder of any Warrant Certificate to or on the
Company shall be sufficiently given or made if sent by first-class or registered
mail, postage prepaid, addressed (until another address is given in writing by
the Company to each registered holder of a Warrant Certificate) as follows:
Floor Decor, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Any notice or demand required by this Agreement to be given or made by the
Company to or on the registered holder of any Warrant Certificate shall be
sufficiently given or made, whether or not such holder receives the notice, if
sent by first-class or registered mail, postage prepaid, addressed to such
registered holder at his last address as shown on the books of the Company.
Otherwise such notice or demand shall be deemed given when received by the party
entitled thereto.
6.5 Defects in Notice. Failure to file any certificate or notice or to
mail any notice, or any defect in any certificate or notice pursuant to this
Agreement, shall not affect in any way the rights of any registered holder of a
Warrant Certificate or the legality or validity of any adjustment made pursuant
to Article III hereof, or any transaction giving rise to any such adjustment, or
the legality or validity of any action taken or to be taken by the Company.
6.6 Governing Law. The laws of the State of Florida shall govern this
Warrant Agreement and the Warrant Certificates.
6.7 Standing. Nothing in this Agreement expressed and nothing that may
be implied from any of the provisions hereof is intended, or shall be construed,
to confer upon, or give to, any person or corporation other than the Company,
and the registered holders of the Warrant Certificates any right, remedy or
claim under or by reason of this Agreement or of any covenant, condition,
stipulation, promise or agreement contained herein; and all covenants,
conditions, stipulations, promises and agreements contained in this Agreement
shall be for the sole and exclusive benefit of the Company and its successors
and assigns, and the registered holders of the Warrant Certificates.
6.8 Headings. The descriptive headings of the articles and sections of
this Agreement are inserted for convenience only and shall not control or affect
the meaning or construction of any of the provisions hereof.
6.9 Counterparts. This Agreement may be executed in any number of
counterparts, each of which so executed shall be deemed to be an original; but
such counterparts shall together constitute but one and the same instrument.
6.10 Amendment, Waiver. Any provision of this Agreement may be waived
or amended by a written instrument signed by the Company and the registered
holders of Warrant Certificates representing a majority of the Warrant Shares
then unissued.
IN WITNESS WHEREOF, this Agreement has been duly executed by the
parties hereto as of the day and year first above written.
Company:
FLOOR DECOR INC., a Delaware corporation
By:_________________________________
▇.▇. ▇▇▇▇▇▇, President
Warrantholders:
By:_________________________________
By:_________________________________
Exhibit A
FORM OF WARRANT CERTIFICATE
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS AND NEITHER THE SECURITIES
NOR ANY INTEREST THEREIN MAY BE OFFERED, SOLD, TRANSFERRED, PLEDGED OR OTHERWISE
DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH
ACT OR SUCH LAWS OR AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT AND SUCH LAWS,
WHICH, IN THE OPINION OF COUNSEL FOR THE HOLDER, WHICH COUNSEL AND OPINION ARE
REASONABLY SATISFACTORY TO COUNSEL FOR THIS CORPORATION, IS AVAILABLE.
No.__________
Certificate for _____ Warrants
NOT EXERCISABLE AFTER 5:00 P.M., NEW YORK CITY TIME
ON December 31,2003
FLOOR DECOR, INC.
COMMON STOCK PURCHASE WARRANT CERTIFICATE
THIS CERTIFIES that:__________________________________________ or
registered assigns is the registered holder (the "Registered Holder") of the
number of Warrants set forth above, each of which represents the right to
purchase one fully paid and nonassessable share of Common Stock (the "Common
Stock"), of Floor Decor, Inc., a Delaware corporation (the "Company"), at the
purchase price (the "Initial Exercise Price") per share shall equal to the
greater of $0.735 or an amount equal to twenty (20%) percent below the average
trading price of the Common Stock in the public market for a period of twenty
(20) business days prior to the exercise of the Warrant. The trading price of
the Common Stock shall be deemed to be equal to the midpoint between the bid and
ask price each day, at any time, but not after the Expiration Date hereinafter
referred to, by surrendering this Warrant Certificate, with the form of election
to purchase set forth hereon duly executed at the principal office of the
Company, and by paying in full the Exercise Price, plus transfer taxes, if any.
Payment of the Exercise Price shall be made in United States currency, by
certified check or money order payable to the Company.
No Warrant may be exercised after 5:00 P.M., New York City time, on the
expiration date (the "Expiration Date") which will be December 31, 2003. All
Warrants evidenced hereby shall thereafter become void. Upon the exercise of
less than all of the Warrants evidenced by this Warrant Certificate, there shall
be issued to the Registered Holder a new Warrant Certificate in respect of the
Warrants not exercised.
Prior to the Expiration Date, the Registered Holder shall be entitled
to exchange this Warrant Certificate, with or without other Warrant
Certificates, for another Warrant Certificate or Warrant Certificates of the
same aggregate number of Warrants, upon surrender of this Warrant Certificate to
the Company.
Upon certain events provided for in the Warrant Agreement, the Exercise
Price, the number of shares of Common Stock issuable upon the exercise of each
Warrant is required to be adjusted.
This Warrant Certificate is issued under and in accordance with the
Warrant Agreement and is subject to the terms and provisions contained in said
Warrant Agreement, to all of which terms and provisions the Registered Holder
consents by acceptance hereof.
This Warrant Certificate shall not entitle the Registered Holder to any
of the rights of a shareholder of the Company, including, without limitation,
the right to vote, to receive dividends and other distributions, or to attend or
receive any notice of meetings of shareholders or any other proceedings of the
Company.
IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to
be duly executed.
Company:
FLOOR DECOR INC., a Delaware corporation
By:_________________________________
▇.▇. ▇▇▇▇▇▇, President
Warrantholders:
By:_________________________________
By:_________________________________
By:_________________________________
FORM OF ELECTION TO PURCHASE
The undersigned hereby irrevocably elects to exercise of the Warrants
represented by this Warrant Certificate and to purchase the shares of Common
Stock issuable upon the exercise of said Warrants, and requests that
certificates for such shares be issued and delivered as follows:
ISSUE TO: _____________________________________________
(NAME)
_____________________________________________
(ADDRESS, INCLUDING ZIP CODE)
_____________________________________________
(SOCIAL SECURITY OR OTHER TAX IDENTIFYING NUMBER)
DELIVER
TO: _____________________________________________
(NAME)
_____________________________________________
(ADDRESS, INCLUDING ZIP CODE)
If the number of Warrants hereby exercised is less than all the
Warrants represented by this Warrant Certificate, the undersigned requests that
a new Warrant Certificate representing the number of full Warrants not exercised
be issued and delivered as set forth below.
In full payment of the purchase price with respect to the Warrants
exercised and transfer taxes, if any, the undersigned hereby tenders payment of
$ by certified check or money order payable to the order of the Company in
United States currency.
Dated:_______________________________
______________________________________________________
(Insert Social Security or (Signature of registered
other identifying number(s) _______holder(s))
______________________________________________________
Signature of registered ____________ holder, if co-owned)
NOTE: Signature must conform in all respects to name of holder as specified
on the face of the Warrant Certificate.
