Exhibit 4.13
FIRST AMENDMENT TO
WARRANT AGREEMENT
THIS FIRST AMENDMENT TO WARRANT AGREEMENT (this "Amendment") is made
and entered into as of this 15th day of November, 1996 by and between UNCLE B'S
BAKERY, INC., an Iowa corporation (the "Issuer"), and CREDITANSTALT AMERICAN
CORPORATION, a Delaware corporation ("Creditanstalt").
W I T N E S S E T H :
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WHEREAS, pursuant to the Loan and Security Agreement dated as of July
12, 1995 between the Issuer and Creditanstalt Corporate Finance, Inc. ("CFI")
(the "Loan Agreement"), CFI made a loan to the Issuer upon the terms set forth
in the Loan Agreement; and
WHEREAS, in order to induce CFI to structure and to provide the loan
pursuant to the Loan Agreement, the Issuer executed and delivered a Warrant
Agreement dated as of July 12, 1995 (as the same may be amended, supplemented or
otherwise modified from time to time, the "Warrant Agreement") and issued to CFI
Warrants to purchase 215,000 shares of Common Stock or Convertible Preferred
Stock of the Issuer, which Warrants were later transferred by CFI to
Creditanstalt, an affiliate of CFI; and
WHEREAS, the Issuer and CFI wish to enter into a First Amendment to
Loan and Security Agreement dated of even date herewith (as the same may be
amended, supplemented, or otherwise modified from time to time, the "Loan
Agreement Amendment") to provide for the loan of additional funds; and
WHEREAS, in connection with and to induce CFI to enter into the Loan
Agreement Amendment, the Issuer has agreed to amend the Warrant Agreement, as
further set forth herein, in order to provide for the issuance of certain
additional Warrants to Creditanstalt and make certain other changes set forth
herein;
NOW, THEREFORE, in consideration of these premises, the terms and
conditions herein, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:
Section 1. Definitions. As used in this Amendment, unless otherwise
defined herein, terms defined in the Warrant Agreement shall have the meaning
set forth therein when used herein.
Section 2. Amendment of Definition of "Closing Date". The term
"Closing Date," as set forth in Section 1 of the Warrant Agreement, is hereby
deleted in its entirety and the following definition is substituted in lieu
thereof:
"Closing Date" shall mean (i) with respect to the Series A
Warrants, July 12, 1995, the date of the closing of the Loan
Agreement, and (ii) with respect to the Series B Warrants and the
Purchased Shares, November 15, 1996.
Section 3. Amendment of Definition of "Convertible Preferred Stock". The
term "Convertible Preferred Stock," as set forth in Section 1 of the Warrant
Agreement, is hereby deleted in its entirety and the following definition is
substituted in lieu thereof:
"Convertible Preferred Stock" shall mean the Class B Preferred
Stock, Series 2 of the Issuer, par value $.01 per share which shall be
convertible into Common Stock of the Issuer, and shall include any
stock into which such Series 2 Preferred Stock shall have been changed
or any stock resulting from any reclassification of such Series 2
Preferred Stock.
Section 4. Amendment of Definition of "Exercise Price." The term
"Exercise Price," as set forth in Section 1 of the Warrant Agreement, is hereby
deleted in its entirety and the following definition is substituted in lieu
thereof:
"Exercise Price" shall mean the exercise price of a Warrant,
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which shall be $2.25 per Warrant.
Section 5. Amendment of Definition of "Expiration Date". The term
"Expiration Date," as set forth in Section 1 of the Warrant Agreement, is hereby
deleted in its entirety and the following definition is substituted in lieu
thereof:
"Expiration Date" shall mean (i) with respect to the Series A
Warrants, July 12, 2005, and (ii) with respect to the Series B
Warrants, November 15, 2006.
Section 6. Definition of "Non-Public Purchased Shares". Section 1 of the
Warrant Agreement is hereby amended by adding following the definition of "Non-
Attributable Stock," a new definition of "Non-Public Purchased Securities" as
follows:
"Non-Public Purchased Shares" shall mean the Purchased Shares
that have not been sold to the public and bear a restrictive legend.
Section 7. Definition of "Purchased Shares". Section 1 of the Warrant
Agreement is hereby amended by adding following the definition of "Non-Surviving
Combination," a new definition of "Purchased Shares" as follows:
"Purchased Shares" shall mean the 111,111 shares of Common Stock
purchased by Creditanstalt pursuant to that certain subscription
agreement dated November 15, 1996 between the Issuer and
Creditanstalt.
Section 8. Definition of "Registrable Securities". Section 1 of the
Warrant Agreement is hereby amended by adding following the definition of "Put
Right" a new definition of "Registrable Securities" as follows:
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"Registrable Securities" shall mean the Warrants, the Non-Public
Warrant Shares and the Non-Public Purchased Shares.
Section 9. Definition of "Series A Warrants" and "Series B Warrants".
Section 1 of the Warrant Agreement is hereby amended by adding following the
definition of "Securities Act" new definitions of "Series A Warrants" and
"Series B Warrants" as follows:
"Series A Warrants" shall mean the stock purchase warrants issued
pursuant to this Warrant Agreement entitling the record holders
thereof to purchase from the Issuer at the Warrant Office an aggregate
of 215,000 shares of Common Stock or Convertible Preferred Stock (in
the percentages and to the extent provided in subsections 6(e) and
6(f) hereof and subject in each case to adjustments as provided in
Section 12) at the Exercise Price therefor at any time after July 12,
1995 and before 5:00 p.m., New York time, on the Expiration Date
therefor; individually, a "Series A Warrant."
"Series B Warrants" shall mean the stock purchase warrants issued
pursuant to this Warrant Agreement entitling the record holders
thereof to purchase from the Issuer at the Warrant Office an aggregate
of 205,000 shares of Common Stock or Convertible Preferred Stock (in
the percentages and to the extent provided in subsections 6(e) and
6(f) hereof and subject in each case to adjustments as provided in
Section 12) at the Exercise Price therefor at any time after November
15, 1996 and before 5:00 p.m., New York time, on the Expiration Date
therefor; individually, a "Series B Warrant."
Section 10. Amendment of Definition of "Warrant Holders". The term
"Warrant Holders," as set forth in Section 1 of the Warrant Agreement, is hereby
amended by deleting the period at the end of the sentence and adding the
following language:
"and holders of Non-Public Purchased Shares that have not been sold to
the public and bear a restrictive legend."
Section 11. Amendment of Definition of "Warrants". The term "Warrants,"
as set forth in Section 1 of the Warrant Agreement, is hereby deleted in its
entirety and the following definition is substituted in lieu thereof:
"Warrants" shall mean the Series A Warrants and Series B
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Warrants, collectively; individually, a "Warrant."
Section 12. Duration and Exercise of Warrants. Section 6 of the Warrant
Agreement is hereby amended to delete subsection (a) thereof in its entirety and
to substitute therefor a new subsection (a) to read as follows:
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(a) (i) The Series A Warrants evidenced by a Warrant Certificate
shall be exercisable in whole or in part by the registered holder
thereof on any Business Day after July 12, 1995 and on or before 5:00
p.m., New York time, on the Expiration Date therefor.
(ii) The Series B Warrants evidenced by a Warrant Certificate
shall be exercisable in whole or in part by the registered holder
thereof on any Business Day after November 15, 1996 and on or before
5:00 p.m., New York time, on the Expiration Date therefor.
Section 13. Duration and Exercise of Warrants. Section 6 of the Warrant
Agreement is hereby further amended to delete the first proviso of the first
sentence of subsection (e) in its entirety and to substitute therefor a new
proviso to read as follows:
. . . , provided that the Warrant Holder shall not have the right to
have issued to it upon exercise Common Stock which, when aggregated
with the shares of Common Stock (other than shares of Non-Attributable
Stock) previously issued as Warrant Shares or issued in conversion of
Convertible Preferred Stock previously issued as Warrant Shares or
owned or previously owned by the Warrant Holder, . . .
Section 14. Duration and Exercise of Warrants. Section 6 of the Warrant
Agreement is hereby further amended to delete therefrom subsection (f) in its
entirety and to substitute therefor a new subsection (f) to read as follows:
(f) Notwithstanding the foregoing provisions of this Section 6,
in no event shall any Warrant be exercisable for shares of Common
Stock or Convertible Preferred Stock which, when aggregated with all
other shares of capital stock of the Issuer then held by Creditanstalt
or its Affiliates, would, upon issuance, represent in excess of 24.99%
of the Equity of the Issuer unless such shares, when issued, would
constitute Non-Attributable Stock.
Section 15. Voting Agreement. Section 9(c) of the Warrant Agreement is
hereby amended by adding the words "or any Affiliate, including without
limitation Creditanstalt American Corporation," following the word
"Creditanstalt" in the first line thereof.
Section 16. Adjustment of Number of Warrant Shares Purchasable. The
Warrant Agreement is hereby further amended by adding a new subsection 12(j)(3)
which shall read as follows:
(3) there shall be no adjustment pursuant to this Section 12 with
respect to the Issuer's issuance to Creditanstalt of the
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Purchased Shares.
Section 17. Registration. The Warrant Agreement is hereby further amended
by deleting Section 15 in its entirety and substituting the following Section 15
in lieu thereof:
Section 15. Registration.
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(a) Upon the written demand of any Warrant Holder to the Issuer
(a "Demand") at any time and from time to time after the date which is
four years after the Closing Date requesting that the Issuer effect
the registration under the Securities Act of Registrable Securities of
such Warrant Holder, the Issuer will promptly give written notice (a
"Demand Notice") of such Demand to all other Warrant Holders. Each
other Warrant Holder may request that the Issuer effect the
registration under the Securities Act of additional Registrable
Securities of such Warrant Holder by delivering written notice to the
Issuer specifying such number of Registrable Securities within 20 days
of receipt of the Demand Notice. In the event that the Issuer
receives requests for the registration under the Securities Act of at
least an aggregate of 50,000 Non-Public Warrant Shares or Non-Public
Purchased Shares (or if less than an aggregate of 50,000 Registrable
Securities are outstanding, the remainder of the Non-Public Warrant
Shares and Non-Public Purchased Shares then outstanding) within such
20-day period the Issuer shall give written notice (a "Registration
Notice") to all Warrant Holders that the Issuer will be filing a
registration statement pursuant to this subsection 15(a) and will
thereupon use its reasonable best efforts promptly to effect the
registration under the Securities Act of (i) the Registrable
Securities which Warrant Holders have requested to be registered
within 20 days of the Demand Notice, and (ii) additional Registrable
Securities which Warrant Holders have requested to be registered
within 10 days of the Registration Notice. Promptly within 20 days of
the Registration Notice, the Issuer will notify all Warrant Holders
whose Registrable Securities are to be included in the registration of
the number of additional Registrable Securities requested to be
included therein by the other Warrant Holders. If the registration of
which the Issuer gives notice pursuant to subsection 15(a) is for an
underwritten public offering, only Registrable Securities which are to
be included in the underwriting may be included in such registration,
and the selling Warrant Holders shall, after reasonable consultation
with the Issuer, have the right to designate the managing
underwriter(s) in any such underwritten public offering with the
consent of the Issuer (which consent shall not be unreasonably
withheld). Holders who include Registrable Securities in a
registration pursuant to subsection 15(a) shall bear the cost of any
underwriters' discounts and commissions relating to
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their Registrable Securities which are sold.
(b) The Issuer is obligated to effect one demand registration
under subsection 15(a) and the Issuer shall bear all expenses other
than underwriting discounts and commissions, if any, in connection
with such registration, filings or qualifications pursuant to
subsection 15(a), including without limitation all registration,
filing and qualification fees, printers' and accounting fees, the fees
and disbursements of counsel for the Issuer and the fees and
disbursements of one counsel for the selling Warrant Holders, provided
that (i) a registration will not constitute a demand registration
under subsection 15(a) until it has been declared effective under the
Securities Act, (ii) if a registration statement filed pursuant to
subsection 15(a) is terminated or withdrawn by the Issuer before all
Registrable Securities covered thereby have been sold, the Issuer
shall be obligated to pay the expenses of an additional demand
registration under subsection 15(a), and (iii) no Person other than
holders of Registrable Securities and the Persons who have
registration rights on the date of this Warrant Agreement as described
on Schedule II hereto shall have any right to have securities included
in any registration under subsection 15(a). Any Person other than a
holder of Registrable Securities whose securities are included in a
registration under subsection 15(a) shall be subject to the same
limitations applicable to "Other Security Holders" set forth in
subsection 15(c).
(c) If, at any time after the date hereof, the Issuer proposes to
register any of its securities under the Securities Act (except
pursuant to a registration statement filed on Form S-8 or Form S-4 or
such other form as shall be prescribed under the Act for the same
purposes), it will at each such time give written notice (which notice
shall state the intended method of disposition thereof by the
prospective sellers) to all holders of outstanding Registrable
Securities of its intention to do so and the proposed minimum offering
price per Registrable Security and upon the written request of any
holder thereof given within 10 days after the Issuer's giving of such
notice, the Issuer will use its reasonable best efforts to effect the
registration of the Registrable Securities which it shall have been so
requested to register by including the same in such registration
statement all to the extent required to permit the sale or other
disposition thereof in accordance with the intended method of sale or
other disposition given in each such request. If the registration of
which the Issuer gives notice pursuant to this subsection 15(c) is for
an underwritten public offering, only Registrable Securities which are
to be included in the underwriting may be included in such
registration, and the Issuer shall have the right to designate the
managing underwriter(s) in any such
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underwritten public offering; provided that (i) the Issuer shall use
its best efforts to cause the managing underwriter(s) to include the
Registrable Securities requested to be included in the registration in
the underwriting; (ii) if the managing underwriter(s) advises the
holders of the Registrable Securities and all other Persons seeking to
include securities of the Issuer held by them in such registration
statement ("Other Security Holders") in writing that the total amount
of securities which they and the Issuer intend to include in such
offering is sufficiently large to materially and adversely affect the
success of such offering, the amount of securities to be offered for
the accounts of all holders of the Registrable Securities requesting
to be so included and all Other Security Holders, other than the
Issuer, shall be reduced pro rata (based upon the amount of securities
each such Person sought to include in the offering) to the extent
necessary to reduce the total amount of securities to be included in
the offering to the amount recommended by such managing underwriter(s)
(which amount may be zero, if so recommended by such managing
underwriter(s); provided, however, that unless prohibited by the terms
of warrants outstanding on the date of this Warrant Agreement, holders
of Registrable Securities shall be entitled to have a minimum of
50,000 Registrable Securities included in such registration statement
before any securities held by Other Security Holders are included
therein. Any registration statement filed pursuant to this subsection
15(c) may be withdrawn at any time at the discretion of the Issuer.
(d) If a registration under subsection 15(a) or 15(c) shall be in
connection with an underwritten public offering, each holder of
Registrable Securities shall be deemed to have agreed by acquisition
of such Registrable Securities not to effect any sale or distribution,
including any sale pursuant to Rule 144 or Rule 144A, of any
Registrable Securities, and to use such holder's reasonable best
efforts not to effect any such sale or distribution of any other
equity security of the Issuer or of any security convertible into or
exchangeable or exercisable for any equity security of the Issuer
(other than as part of such underwritten public offering) within seven
days before or 90 days after the effective date of such registration
statement (and the Issuer hereby also so agrees and agrees to cause
each holder of any equity security, or of any security convertible
into or exchangeable or exercisable for any equity security, of the
Issuer purchased from the Issuer at any time other than in a public
offering, so to agree).
(e) As a condition to the inclusion of a holder's Registrable
Securities in any registration statements, each such holder of
Registrable Securities requesting registration thereof will
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furnish to the Issuer such information with respect to such holder as
is required to be disclosed in the registration statement (and the
prospectus included therein) by the applicable rules, regulations and
guidelines of the Commission. Failure of a holder to furnish such
information or agreement shall not affect the obligation of the Issuer
under this Section 15 to the remaining holders who furnish such
information.
(f) If and whenever the Issuer is required under this Section 15
to use its reasonable best efforts to effect the registration of
Registrable Securities under the Securities Act, the Issuer shall:
(i) as expeditiously as possible and subject to the
limitations set forth in subsection 15(c), prepare and file with the
Commission a registration statement on the appropriate form with
respect to such Registrable Securities and use its best efforts to
cause such registration statement to become effective as soon as
practicable after such filing;
(ii) as expeditiously as possible, prepare and file with
the Commission such amendments and supplements (including post-
effective amendments and supplements) to the registration statement
covering such Registrable Securities and the prospectus used in
connection therewith as may be necessary to keep such registration
statement effective and usable for resale for a period necessary to
complete the distribution of such securities, but in no event in
excess of 24 months plus any period during which the holders of
Registrable Securities are obligated to refrain from selling because
the Issuer is required to amend or supplement the prospectus under
subsection 15(f)(iv), and to comply with the provisions of the
Securities Act with respect to the disposition of all Registrable
Securities covered by such registration statement during such period
in accordance with the intended method of disposition of the sellers
set forth therein;
(iii) as expeditiously as possible, furnish to each seller
of such Registrable Securities registered, or to be registered under
the Securities Act, and to each underwriter, if any, of such
Registrable Securities such number of copies of a prospectus and
preliminary prospectus in conformity with the requirements of the
Securities Act, and such other documents as such seller or underwriter
may reasonably request in order to facilitate the public sale or other
disposition of such Registrable Securities;
(iv) as expeditiously as possible, notify each seller of
such Registrable Securities if, at any time when a prospectus relating
to such Registrable Securities, is required to be delivered
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under the Securities Act, any event shall have occurred as a result of
which the prospectus then in use with respect to such Registrable
Securities would include an untrue statement of a material fact or
omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading or for any
other reason it shall be necessary to amend or supplement such
prospectus in order to comply with the Securities Act and prepare and
furnish to all sellers as promptly as possible, and in any event
within ninety (90) days of such notice, a reasonable number of copies
of a supplement to or an amendment of such prospectus which will
correct such statement or omission or effect such compliance;
(v) as expeditiously as possible, use its reasonable best
efforts to register or qualify such Registrable Securities under such
other securities or blue sky laws of such jurisdictions as such seller
shall reasonably request and do any and all other acts and things
which may be reasonably necessary to enable such seller to consummate
the public sale or other disposition in each such jurisdiction of the
Registrable Securities owned by such seller and included in such
registration statement, provided that the Issuer shall not be required
to consent to the general service of process or to qualify to do
business in any jurisdiction where it is not then qualified;
(vi) use its reasonable best efforts to keep the holders
of such Registrable Securities informed of the Issuer's best estimate
of the earliest date on which such registration statement or any post-
effective amendment or supplement thereto will become effective and
will promptly notify such holders and the managing underwriters, if
any, participating in the distribution pursuant to such registration
statement of the following: (A) when such registration statement or
any post-effective amendment or supplement thereto becomes effective
or is approved; (B) of the issuance by any competent authority of any
stop order suspending the effectiveness or qualification of such
registration statement or the prospectus then in use or the initiation
or threat of any proceeding for that purpose; and (C) of the
suspension of the qualification of any Registrable Securities included
in such registration statement for sale in any jurisdiction;
(vii) make available to its security holders, as soon as
practicable, an earnings statement covering a period of at least
twelve months which satisfies the provisions of Section 11(a) of the
Securities Act and Rule 158 thereunder;
(viii) cooperate with the sellers of such Registrable
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Securities and the underwriters, if any, of such Registrable
Securities; give each seller of such Registrable Securities, and the
underwriters, if any, of such Registrable Securities and their
respective counsel and accountants, such access to its books and
records and such opportunities to discuss the business of the Issuer
with its officers and independent public accountants as shall be
necessary to enable them to conduct a reasonable investigation within
the meaning of the Securities Act and, in the event that Registrable
Securities are to be sold in an underwritten offering, enter into an
underwriting agreement containing customary representations and
warranties, covenants, conditions and indemnification provisions,
including without limitation the furnishing to the underwriters of a
customary opinion of independent counsel to the Issuer and a customary
"comfort" letter from the Issuer's independent public accountants;
(ix) provide a CUSIP number for all Registrable Securities
not later than the effective date of the registration statement;
(x) as to any registration under subsection 15(a) and all
registrations under subsection 15(c), pay all costs and expenses
incident to the performance and compliance by the Issuer of this
Section 15, including without limitation (A) all registration and
filing fees; (B) all printing expenses; (C) all fees and disbursements
of counsel and independent public accountants for the Issuer; (D) all
blue sky fees and expenses (including fees and expenses of counsel in
connection with blue sky surveys); (E) all transfer taxes; (F) the
entire expense of any special audits required by the rules and
regulations of the Commission; (G) the cost of distributing
prospectuses in preliminary and final form as well as any supplements
thereto; and (H) the fees and expenses of one counsel for the holders
of the Registrable Securities being registered; and
(xi) as to the first registration under subsection 15(a)
which is in respect of an underwritten offering, as expeditiously as
possible, take such actions as the underwriters reasonably request in
order to expedite or facilitate the disposition of the Registrable
Securities to be included in such offering (including, without
limitation, effecting a stock split, stock dividend or a combination
of shares of Common Stock), provided that the Issuer shall not be
required to call a special meeting of shareholders to obtain approval
of such actions.
(g)(i) The Issuer will indemnify and hold harmless each seller
of Registrable Securities, each director, officer, employee and agent
of each seller, and each other person, if any, who
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controls such seller within the meaning of the Securities Act or the
Exchange Act from and against any and all losses, claims, damages,
liabilities and legal and other expenses (including costs of
investigation) caused by any untrue statement or alleged untrue
statement of a material fact contained in any registration statement
under which such Registrable Securities were registered under the
Securities Act, any prospectus or preliminary prospectus contained
therein or any amendment or supplement thereto, or caused by any
omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not
misleading, except insofar as such losses, claims, damages,
liabilities or expenses are caused by any such untrue statement or
omission or alleged untrue statement or omission based upon
information relating to such seller and furnished to the Issuer in
writing by such seller expressly for use therein, and provided that
the Issuer will not be liable to any Person who participates as an
underwriter in the offering or sale of Registrable Securities or any
other Person, if any, who controls such underwriter within the meaning
of the Securities Act under the indemnity agreement in this subsection
15(g) with respect to any preliminary prospectus or the final
prospectus or the final prospectus as amended or supplemented, as the
case may be, to the extent that any such loss, claim, damage or
liability of such underwriter or controlling Person results from the
sale by such underwriter of Registrable Securities to a Person to whom
there was not sent or given, at or prior to the written confirmation
of such sale, a copy of the final prospectus or of the final
prospectus as then amended or supplemented, whichever is most recent,
if the Issuer has previously furnished copies thereof to such
underwriter, or from a sale to a Person in a state where the offering
has not been registered or qualified, if the Issuer has notified the
seller and any underwriter involved in such sale of the states where
the offering has been registered or qualified.
(ii) It shall be a condition to the obligation of the
Issuer to effect a registration of Registrable Securities under the
Securities Act pursuant hereto that (X) each seller, severally and not
jointly, indemnify and hold harmless the Issuer and each person, if
any, who controls the Issuer within the meaning of the Securities Act
or the Exchange Act to the same extent as the indemnity from the
Issuer in the foregoing paragraph, but only with reference to any
breach by such seller of any agreement between such seller, and the
Issuer with respect to the offering and with reference to information
relating to such seller furnished to the Issuer in writing by such
seller expressly for use in the registration statement, any prospectus
or preliminary prospectus contained therein or any amendment or
supplement thereto and (Y) each
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seller, in the event that Registrable Securities are to be sold in an
underwritten offering, enters into an underwriting agreement
containing customary representations and warranties, covenants,
conditions and indemnification provisions.
(iii) In case any claim shall be made or any proceeding
(including any governmental investigation) shall be instituted
involving any indemnified party in respect of which indemnity may be
sought pursuant to this subsection 15(g), such indemnified party shall
promptly notify the indemnifying party in writing of the same,
provided that failure to notify the indemnifying party shall not
relieve it from any liability it may have to an indemnified party
otherwise than under this subsection 15(g). The indemnifying party,
upon request of the indemnified party, shall retain counsel reasonably
satisfactory to the indemnified party to represent the indemnified
party in such proceeding and shall pay the fees and disbursements of
such counsel. In any such proceeding, any indemnified party shall
have the right to retain its own counsel, but the fees and
disbursements of such counsel shall be at the expense of such
indemnified party unless (A) the indemnifying party shall have failed
to retain counsel for the indemnified party as aforesaid, (B) the
indemnifying party and such indemnified party shall have mutually
agreed to the retention of such counsel or (C) representation of such
indemnified party by the counsel retained by the indemnifying party
would, in the reasonable opinion of the indemnified party, be
inappropriate due to actual or potential differing interests between
such indemnified party and any other party represented by such counsel
in such proceeding, provided that the Issuer shall not be liable for
the fees and disbursements of more than one additional counsel for all
indemnified parties. The indemnifying party shall not be liable for
any settlement of any proceeding effected without its written consent
but if settled with such consent or if there be a final judgment for
the plaintiff, the indemnifying party agrees to indemnify the
indemnified party from and against any loss or liability by reason of
such settlement or judgment.
(h) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in subsection
15(g) is due in accordance with its terms but is for any reason held
by a court to be unavailable on grounds of policy or otherwise, the
Issuer or the applicable sellers, as the case may be, shall contribute
to the aggregate losses, claims, damages and liabilities incurred
(including legal or other expenses reasonably incurred in connection
with the investigating or defending of same) by the other and for
which such indemnification was sought. In determining the amount of
contribution to which the
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respective parties are entitled, there shall be considered the
relative benefits received by each party from the offering of the
securities included in the registration statement (taking into account
the portion of the proceeds of the offering realized by each), the
parties' relative knowledge and access to information concerning the
matter with respect to which the claim was asserted, the opportunity
to correct and prevent any statement or omission, and any other
equitable considerations appropriate in the circumstances; provided,
however, that (i) in no case shall any seller of Registrable
Securities be required to contribute any amount in excess of the total
public offering price of the Registrable Securities sold by him and
(ii) no person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this subsection 15(h), each person
who controls any seller of Registrable Securities or the Issuer shall
have the same rights to contribution as such seller or the Issuer. Any
party entitled to contribution shall, promptly after receipt of notice
of commencement of any action, suit or proceeding against such party
in respect of which a claim for contribution may be made against the
Issuer or the seller of Registrable Securities under this subsection
15(h), notify the Issuer or such seller, as the case may be, but the
omission to so notify the Issuer or such seller, as the case may be,
shall not relieve it from any other obligation it may have hereunder
or otherwise.
(i) After the date hereof, the Issuer shall not grant to any
holder of securities of the Issuer any registration rights which have
a priority greater than or equal to those granted to holders of
Registrable Securities pursuant to this Section 15 without the prior
written consent of the holders of at least a majority of the aggregate
outstanding Registrable Securities, voting as a single group.
(j) Notwithstanding the foregoing, Issuer shall not be obligated
to register Warrants or Convertible Preferred Stock unless the Warrant
Holder certifies to the Issuer that there is a reasonable possibility
that its exercise of the Warrants would violate laws or regulations
applicable to such Warrant Holder or its Affiliate.
Section 18. Put Rights and Exchange Rights. The Warrant Agreement is
hereby further amended by deleting Section 16 in its entirety and substituting
the following Section 16 in lieu thereof:
13
Section 16. Put Rights and Exchange Rights.
------------------------------
(a) (i) Subject to the limitations hereinafter set forth,
Creditanstalt and its Affiliates shall have the right, if the Warrant
Shares issued or issuable upon exercise of the Warrants and held by
Creditanstalt and its Affiliates, when aggregated with all other
shares of capital stock of the Issuer then held or previously held by
Creditanstalt or its Affiliates (excluding Non-Attributable Stock),
would represent in excess of 24.99% of the Equity of the Issuer, upon
written notice to Issuer, to require the Issuer to purchase that
portion of such Warrants or Warrant Shares as will reduce the shares
of capital stock of the Issuer held by, attributable to, or issuable
to Creditanstalt and its Affiliates to 24.99% of the Equity of the
Issuer (any such right being herein called a "Put Right"). The price
to be paid to the holder upon exercise of a Put Right shall be an
amount equal to the Put Price at the date the notice exercising such
Put Right is given to the Issuer. The "Put Price" on any date shall
be the amount which is determined when the Current Market Price Per
Share of Common Stock on such date is multiplied by the aggregate
number of shares of Common Stock of the Issuer (i) comprising the
Warrant Shares to be purchased by the Issuer, and/or (ii) issuable
upon exercise of the Warrants to be purchased by the Issuer, and/or
(iii) issuable upon conversion of the Convertible Preferred Stock
comprising the Warrant Shares to be purchased by the Issuer, and/or
(iv) issuable upon conversion of the Convertible Preferred Stock
issuable upon exercise of the Warrants to be purchased by the Issuer
(assuming Convertible Preferred Stock, rather than Common Stock, is
then issuable under such Warrants), and/or (v) comprising the
Purchased Shares.
(ii) The completion of all purchases and sales of Warrants
and Warrant Shares pursuant to exercises of Put Rights shall take
place on the thirtieth (30th) day following the date on which the
respective notice exercising such Put Right is given, unless another
date is mutually agreed upon by the Issuer and the selling holder (the
"Put Closing Date"). The Put Prices for all such purchases and sales
shall be paid by the Issuer issuing to the selling holder in
immediately available funds against delivery of certificates
representing the Warrants and/or Warrant Shares to be purchased, duly
endorsed for transfer to the Issuer.
(b) Creditanstalt and its Affiliates shall have the right, if the
outstanding Common Stock comprising the Purchased Shares and/or issued
upon exercise of the Warrants and held by Creditanstalt and its
Affiliates at any time exceeds 4.99% of the aggregate number of issued
and outstanding shares of Common
14
Stock, upon written notice to Issuer, to require the Issuer to
exchange that portion of such Common Stock for Convertible Preferred
Stock as will reduce the shares of Common Stock held by Creditanstalt
and its Affiliates to 4.99% of the aggregate number of issued and
outstanding shares of Common Stock (such right being called an
"Exchange Right").
(c) As used in this Section 16, "Warrant Shares" shall include
all shares of Common Stock and/or Convertible Preferred Stock and
other securities of the Issuer or its Affiliates issued to holders of
the Issuer's Common Stock and/or Convertible Preferred Stock in
respect of stock dividends, stock splits and other distributions and
any recapitalizations, to the extent the same were not included in any
adjustment of the Warrant Shares issuable upon exercise of Warrants
pursuant to Section 12 hereof.
(d) The certificates representing the Warrants and the Warrant
Shares shall bear a legend indicating that the Warrants and the
Warrant Shares are subject to the provisions of this Section 16.
(e) Notwithstanding any provision of this Warrant Agreement to
the contrary, all Warrants and Warrant Shares which are sold pursuant
to an effective registration statement under the Securities Act shall,
upon such sale, cease to be subject to the provisions of this Section
16.
Section 19. Exhibit A. The Warrant Agreement is hereby further amended by
deleting Exhibit A thereto in its entirety and by substituting therefore a new
Exhibit A in the form attached as Exhibit A hereto.
Section 20. Representations and Warranties. The Issuer hereby represents
and warrants to Creditanstalt, for the benefit of Creditanstalt and any other
Warrant Holder, as follows:
(a) The Issuer is a corporation duly incorporated, validly existing and in
good standing under the laws of the State of Iowa, has the corporate power and
authority to conduct its business as presently conducted and as intended to be
conducted, has the corporate power and authority to execute and deliver this
Warrant Agreement and the Warrant Certificates, to issue the Warrants and to
perform its obligations under this Warrant Agreement and the Warrant
Certificates, has the corporate power and authority and legal right to own and
lease its properties and is duly qualified and in good standing as a foreign
corporation in each jurisdiction in which it owns or leases real property or in
which the conduct of its business requires such qualification, except where
failure to be so qualified could not be reasonably expected to have a material
adverse effect on the business, properties, financial condition or results of
operations of the Issuer and its Subsidiaries taken as a whole.
(b) The execution, delivery and performance by the Issuer of this Warrant
Agreement
15
and the Warrant Certificates, the issuance of the Warrants and the issuance of
the Warrant Shares upon the exercise of the Warrants and the issuance of Common
Stock upon conversion of the Convertible Preferred Stock have been duly
authorized by all necessary corporate action and do not and will not violate, or
result in a breach of, or constitute a default under, or require any consent
under, or result in the creation of any lien, charge or encumbrance upon the
assets of the Issuer pursuant to, any law, statute, ordinance, rule, regulation,
order or decree of any court, governmental body or regulatory authority or
administrative agency having jurisdiction over the Issuer or its Subsidiaries or
the Issuer's Articles of Incorporation or any contract, mortgage, loan
agreement, note, lease or other instrument binding upon the Issuer or its
Subsidiaries or by which their properties are bound.
(c) This Warrant Agreement has been duly executed and delivered by the
Issuer and constitutes a legal, valid, binding and enforceable obligation of the
Issuer. When the Warrants and Warrant Certificates have been issued as
contemplated hereby, (i) the Warrants and the Warrant Certificates will
constitute legal, valid, binding and enforceable obligations of the Issuer and
(ii) the Warrant Shares, when issued upon exercise of the Warrants in accordance
with the terms hereof, and the Common Stock, when issued upon conversion of the
Convertible Preferred Stock in accordance with the terms of the Issuer's
Articles of Incorporation relating to the Convertible Preferred Stock, will be
duly authorized, validly issued, fully paid and nonassessable shares of the
Common Stock and Convertible Preferred Stock, as applicable, with no personal
liability attaching to the ownership thereof.
(d) The Issuer has authorized capital stock consisting of 40,000,000 Class
A shares, par value $.01 per share, of which 3,656,258 shares are issued and
outstanding, and 10,000,000 Class B shares, par value $.01 per share, 215,000
shares of which have been designated as Series 1 Convertible Preferred Stock and
420,000 shares of which have been designated as Series 2 Convertible Preferred
Stock, none of which are issued and outstanding. Except as set forth on
SCHEDULE I hereto, there are no outstanding options, warrants, subscriptions,
rights, convertible or exchangeable securities or other agreements or plans
under which the Issuer may be or become obligated to issue, sell or transfer
shares of its capital stock of other securities. The Convertible Preferred
Stock has no voting rights, except as required by law, and is convertible on a
share-for-share basis into Common Stock of the Issuer. To the Issuer's best
knowledge, there are no voting agreements, voting trusts, proxies or other
agreements or understandings with respect to the voting of any capital stock of
the Issuer or any Subsidiary, other than the Voting Agreement between William T.
Rose, Jr. and William T. Rose, Sr. dated August 14, 1993, the provisions of
Section 9(c) of the Warrant Agreement as amended hereby, and the provisions of
Section 3 of the Subscription Agreement dated November 15, 1996 between the
Issuer and CFI.
(e) Except as set forth on SCHEDULE II hereto, no holder of securities of
the Issuer has any right to the registration of such securities under the
Securities Act and any applicable state securities law.
(f) The Issuer has filed all proxy statements, reports and other documents
required to be filed by it under the Exchange Act. The Issuer has furnished
Creditanstalt with copies of its Report on Form 10-KSB for the fiscal year ended
July 31, 1996 (the "SEC Reports"). Each SEC Report was in substantial
compliance with the requirements of its respective form and none of the SEC
Reports, nor the financial statements (and the notes thereto) included in the
SEC Reports, as
16
of their respective dates, contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading.
Section 21. Expenses. Issuer agrees to pay, immediately upon demand by
Creditanstalt, all costs, expenses, attorneys' fees, and other charges and
expenses incurred by Creditanstalt in connection with the negotiation,
preparation, execution and delivery of this Amendment and any other instrument,
document, agreement or amendment executed in connection with this Amendment.
Section 22. Limitation of Amendment. Except as expressly set forth
herein, this Amendment shall not be deemed to waive, amend or modify any term or
condition of the Warrant Agreement, each of which is hereby ratified and
reaffirmed and shall remain in full force and effect, nor to serve as a consent
to any matter prohibited by the terms and conditions thereof.
Section 23. Counterparts. This Amendment may be executed in any number of
counterparts and any party hereto may execute any counterpart, each of which
when executed and delivered will be deemed to be an original and all of which,
taken together, will be deemed but one and the same agreement.
Section 24. Governing Law: Jurisdiction. THIS AMENDMENT, AND THE RIGHTS
AND OBLIGATIONS OF THE PARTIES HEREUNDER, SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK (WITHOUT REGARD TO THE
PRINCIPLES OF CONFLICTS OF LAW).
[Remainder of page intentionally left blank.]
17
IN WITNESS WHEREOF, the parties hereto have executed this Amendment under
seal as of the date and year first above written.
UNCLE B'S BAKERY, INC.
By: /s/ William T. Rose, Jr.
Name: William T. Rose, Jr.
--------------------
Title: President
--------------------
Attest: /s/ Wm. Howard McClennan, Jr.
Name: Wm. Howard McClennan, Jr.
-------------------------
Title: Secretary
-------------------------
CREDITANSTALT AMERICAN CORPORATION
By: /s/ Scott Kray
Name: Scott Kray
----------------
Title: Senior Associate
----------------
By: /s/ W. Craig Stamm
Name: W. Craig Stamm
----------------
Title: Senior Associate
----------------
18
EXHIBIT A
FORM OF [SERIES A/SERIES B] WARRANT CERTIFICATE
THE WARRANTS REPRESENTED BY THIS CERTIFICATE AND SECURITIES FOR WHICH THIS
WARRANT MAY BE EXERCISED HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR ANY APPLICABLE STATE SECURITIES LAW AND MAY NOT BE SOLD OR
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM UNDER
SUCH ACT OR LAW. SUCH WARRANTS AND SECURITIES MAY BE TRANSFERRED ONLY IN
COMPLIANCE WITH THE CONDITIONS SPECIFIED IN AND ARE SUBJECT TO OTHER PROVISIONS
OF THE WARRANT AGREEMENT, DATED AS OF JULY 12, 1995, BETWEEN THE ISSUER AND
CREDITANSTALT CORPORATE FINANCE, INC., AS AMENDED, A COMPLETE AND CORRECT COPY
OF WHICH IS AVAILABLE FOR INSPECTION AT THE PRINCIPAL OFFICE OF THE ISSUER AND
WILL BE FURNISHED TO THE HOLDER HEREOF UPON WRITTEN REQUEST AND WITHOUT CHARGE.
THE WARRANTS REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN PUT RIGHTS
AND EXCHANGE RIGHTS MORE FULLY SET FORTH IN THE WARRANT AGREEMENT.
________________ ___, 199___ Certificate No. [A-1/B-1]
EXERCISABLE ONLY ON OR BEFORE
[JULY 12, 2005/NOVEMBER 15, 2006]
Warrant Certificate
This Warrant Certificate certifies that CREDITANSTALT AMERICAN
CORPORATION ("Creditanstalt"), or registered assigns, is the registered holder
of [215,000/205,000] Warrants (the "Warrants") to purchase Common Stock or
Convertible Preferred Stock of UNCLE B'S BAKERY, INC., an Iowa corporation (the
"Issuer"). Each Warrant entitles the holder, but only subject to the conditions
set forth herein and in the Warrant Agreement referred to below, to purchase
from the Issuer before 5:00 P.M., New York time, on [July 12, 2005/November 15,
2006] (the "Expiration Date"), one (1) fully paid and nonassessable share of the
Common Stock or Convertible Preferred Stock of the Issuer (the "Warrant Shares")
in the percentages and to the extent set forth in the Warrant Agreement, at a
price (the "Exercise Price") of $2.25 per Warrant payable in lawful money of the
United States of America, upon surrender of this Warrant Certificate, execution
of the annexed Form of Election to Purchase and payment of the Exercise Price at
the office of the Issuer at 441 Dubuque Street, Ellsworth, Iowa 50075, or such
other address as the Issuer may specify in writing to the registered holder of
the Warrants evidenced hereby (the "Warrant Office") In
A-1
lieu of exercising Warrants pursuant to the immediately preceding sentence, the
Warrant holder shall have the right to require the Issuer to convert the
Warrants, in whole or in part and at any time or times, into Warrant Shares, by
surrendering to the Issuer the Warrant Certificate evidencing the Warrants to be
converted, accompanied by the annexed Form of Notice of Conversion which has
been duly completed and signed. The Exercise Price and number of Warrant Shares
purchasable upon exercise of the Warrants are subject to adjustment prior to the
Expiration Date as set forth in the Warrant Agreement. In no event shall this
Warrant be exercisable for shares of Common Stock or Convertible Preferred Stock
which, when aggregated with all other shares of capital stock of the Issuer
previously issued to Creditanstalt or its Affiliates (other than Non-
Attributable Stock (as defined in the Warrant Agreement)) would, upon issuance,
represent in excess of 24.99% of the Equity of the Issuer (defined in the
Warrant Agreement) unless such shares, when issued, would constitute Non-
Attributable Stock (as defined in the Warrant Agreement).
No Warrant may be exercised after 5:00 P.M., New York time, on the
Expiration Date and (except as otherwise provided in the Warrant Agreement) all
rights of the registered holders of the Warrants shall cease after 5:00 P.M.,
New York time, on the Expiration Date.
The Issuer may deem and treat the registered holders of the Warrants
evidenced hereby as the absolute owners thereof (notwithstanding any notation of
ownership or other writing hereon made by anyone), for the purpose of any
exercise hereof and of any distribution to the holders hereof and for all other
purposes, and the Issuer shall not be affected by any notice to the contrary.
Warrant Certificates, when surrendered at the office of the Issuer at
the above-mentioned address by the registered holder hereof in person or by a
legal representative duly authorized in writing, may be exchanged, in the manner
and subject to the limitations provided in the Warrant Agreement, but without
payment of any service charge, for another Warrant Certificate or Warrant
Certificates of like tenor evidencing in the aggregate a like number of
Warrants.
Upon due presentment for registration of transfer of this Warrant
Certificate at the office of the Issuer at the above-mentioned address, a new
Warrant Certificate or Warrant Certificates of like tenor and evidencing in the
aggregate a like number of Warrants shall be issued in exchange for this Warrant
Certificate to the transferee(s) and, if less than all the Warrants evidenced
hereby are to be transferred, to the registered holder hereof, subject to the
limitations provided in the Warrant Agreement, without charge except for any tax
or other governmental charge imposed in connection therewith.
This Warrant Certificate is one of the Warrant Certificates referred
to in the Warrant Agreement, dated as of July 12, 1995, as amended, between the
Issuer and Creditanstalt Corporate Finance, Inc. Said Warrant Agreement is
hereby incorporated by reference in and made a part of this instrument and is
hereby referred to for a description of the rights, limitation of rights,
obligations, duties and immunities thereunder of the Issuer and the holders.
A-2
[Remainder of page intentionally left blank.]
A-3
IN WITNESS WHEREOF the Issuer has caused this Warrant Certificate to
be signed by its duly authorized officers and has caused its corporate seal to
be affixed hereunto.
UNCLE B'S BAKERY, INC.
By: ___________________________________
Name: _________________________________
Title: ________________________________
(CORPORATE SEAL)
ATTEST:
________________________________
Secretary
A-4
ANNEX to Form
of Warrant
Certificate
--------------
FORM OF ELECTION TO PURCHASE
(To be executed upon exercise of Warrant)
The undersigned hereby irrevocably elects to exercise the right,
represented by this Warrant Certificate, to purchase ____ Warrant Shares* and
herewith tenders payment for such Warrant Shares to the order of the Issuer in
the amount of $__________ in accordance with the terms hereof. The undersigned
requests that a certificate for such Warrant Shares be registered in the name of
______________________________________________________ whose address is
__________________________________________ and that such certificate be
delivered to ___________________________ whose address is _________________
_______________________________. If said number of Warrant Shares is less than
all of the Warrant Shares purchasable hereunder, the undersigned requests that a
new Warrant Certificate representing the remaining balance of the Warrant Shares
be registered in the name of _____________________________________________ whose
address is ____________________________________________________________________
and that such Warrant Certificate be delivered to ______________________________
whose address is ______________________________________________.
Signature:
________________________________________________
(Signature must conform in all respects to the name of holder as specified on
the face of the Warrant Certificate.)
Date:______________
* Consisting of:
_____ shares of Common Stock
_____ shares of Convertible Preferred Stock
A-5
ANNEX to Form
of Warrant
Certificate
-------------
FORM OF NOTICE OF CONVERSION
(To be executed upon conversion of Warrant)
The undersigned hereby irrevocably elects to exercise the right,
represented by this Warrant Certificate, to convert Warrants represented hereby
into _____ Warrant Shares* in accordance with the terms hereof. The undersigned
requests that a certificate for such Warrant Shares be registered in the name of
_______________________________________________ whose address is
__________________________________________________________ and that such
certificate be delivered to ____________________________________ whose address
is _____________________________________________________________. If said
number of Warrant Shares is less than all of the Warrant Shares obtainable
hereunder, the undersigned requests that a new Warrant Certificate representing
the remaining balance of the Warrant Shares be registered in the name of
_____________________________________________ whose address is
________________________________________________________ and that such Warrant
Certificate be delivered to ____________________________________ whose address
is ___________________________________________________________.
Signature:
_____________________________________________
(Signature must conform in all respects to name of holder as specified on the
face of the Warrant Certificate.)
Date:________________
* Consisting of:
_____ shares of Common Stock
_____ shares of Convertible Preferred Stock
A-6