EXHIBIT 4.5
No. of Stock Units: 4,938 Warrant No. SUN-1
WARRANT
TO PURCHASE COMMON STOCK OF
BIG DOG HOLDINGS, INC.
Dated March 3, 2004
(Void after June 30, 2004)
THIS IS TO CERTIFY THAT the Post-Confirmation Committee
established under the Plan (as defined below), or registered assigns, is
entitled to purchase from Big Dog Holdings, Inc., a Delaware corporation (the
"Company"), at any time and from time to time after March 3, 2004 (the
"Initial Exercisability Date"), but not later than 5:00 p.m., Pacific
Standard time, on June 30, 2004 (the "Expiration Date"), 4,938 Stock Units,
in whole or in part in integral units, at a purchase price per Stock Unit of
$4.35, all on the terms and conditions hereinbelow.
This Warrant is issued by the Company pursuant to the
Second Amended Plan of Reorganization (the "Plan") of The Walking Company
and Alan's Shoes, Inc. (collectively, the "Debtors") in connection with the
Debtors' Bankruptcy Case in the United States Bankruptcy Court for the
Central District of California (Case No.SV 03-15880-GM).
Section 1. Certain Definitions. As used in this
Warrant, unless the context otherwise requires:
"Board of Directors" shall mean either the board of
directors of the Company or any duly authorized committee of that board.
"Business Day" shall mean any day other than a Saturday,
Sunday or a day on which banks in the State of California are required or
permitted to close.
"Common Stock" shall mean the Company's authorized common
stock, par value $0.01 per share, irrespective of class unless otherwise
specified, as constituted on the date of original issuance of this
Warrant, and any stock into which such Common Stock may thereafter be
changed, and shall also include stock of the Company of any other class,
which is not preferred as to dividends or assets over any other class of stock
of the Company, issued to the holders of shares of the Company's stock upon
any reclassification thereof.
"Exercise Price" shall mean the purchase price per Stock
Unit as set forth on the first page of his Warrant on the Issuance Date and
thereafter shall mean such dollar amount as shall result from the
adjustments specified in Section 4.
"Holder" means, initially, the Post-Confirmation
Committee established under the Plan, and thereafter any Person that is or
Persons that are the registered holder(s) of this Warrant as registered on
the books of the Company.
"Issuance Date" shall mean March 3, 2004, the date of
issuance of this Warrant.
"Person" shall include a natural person, limited partnership,
a corporation, an association, a partnership, a limited liability company, a
trust or estate, a government, foreign or domestic, and any agency or political
subdivision thereof, or any other entity.
"Stock Unit" shall constitute one share of Common Stock,
as such Common Stock was constituted on the date hereof and thereafter shall
constitute such number of shares (including any fractional shares) of
Common Stock as shall result from the adjustments specified in Section 4.
"Total Exercise Price" shall mean the product of the
Exercise Price times the number of Stock Units to be purchased by the holder
of this Warrant upon the exercise thereof.
"Warrant" shall mean this Warrant to purchase up to
4,938 Stock Units as set forth herein initially issued to Holder, and all
Warrants issued upon transfer, division or combination of, or in substitution
therefor.
"Warrant Stock" shall mean the shares of Common Stock
purchasable by the holder of this Warrant upon the exercise thereof.
Section 2. Exercise of Warrant. The Holder of this
Warrant may, one time only on and after the Initial Exercisability Date,
but not later than the Expiration Date, exercise this Warrant in whole or in
part for the integral number of Stock Units which such holder is then
entitled to purchase hereunder. The exercise procedures for this Warrant
are as follows:
(a) The Holder shall deliver to the Company at its
office maintained pursuant to Section 11 for such purpose (i) an Exercise
Notice in the form attached as Exhibit A, duly completed and signed, (ii) the
original of this Warrant and (iii) the Total Exercise Price therefor, which
shall be payable solely by delivery of the consideration described in
paragraph (b) below.
(b) The Total Exercise Price shall be payable
solely by delivery of the Second Unsecured Creditors Promissory Note (the
"Note") issued by TWC Acquisition Corp., a Delaware corporation ("TWC"),
which for purposes of this Warrant shall be valued at the unpaid principal
amount thereof plus accrued but unpaid interest thereon, together with
written notice to the Company specifying what portion of the principal amount
of the Note delivered (plus accrued but unpaid interest on such portion)
shall be applied to pay the Exercise Price. Upon any partial application of
the principal amount of the Note, the Company shall cause TWC promptly to
issue and deliver to or upon the order of the Holder a new Note in a principal
amount equal to the remaining principal of such surrendered Note which is not
applied to such payment.
The Company shall within 20 days of its receipt of a
conforming Exercise Notice cause to be issued in the name of and delivered
to such Holder, or as the Holder may direct, a certificate or certificates
representing the aggregate number of duly authorized, validly issued,
fully-paid and nonassessable shares of Common Stock issuable upon such
exercise.
The stock certificate or certificates for Warrant
Stock so delivered shall be in such denominations as may be specified in
said notice and shall be registered in the name of such Holder or such other
name or names as shall be designated in said notice. Such certificate or
certificates shall be deemed to have been issued and such Holder or any other
Person so designated to be named therein shall be deemed to have become
a holder of record of such shares, with, to the extent permitted by law,
the right to vote such shares or to consent or to receive notice as a
stockholder, as of the time said notice is delivered to the Company as
aforesaid.
The Company shall pay all expenses and stock transfer
taxes payable in connection with the preparation, issuance and delivery of
stock certificates under this Section 2.
All shares of Common Stock issuable upon the exercise of this
Warrant shall be duly authorized, validly issued, fully paid and nonassessable,
and free from all liens and other encumbrances thereon.
The Company shall not issue certificates for fractional
shares of Common Stock upon any exercise of this Warrant. If the amount
of principal of the Note that is being requested to be used to purchase
Warrant Shares would result in the issuance of fractional shares, the amount
of principal being applied to such purchase shall be adjusted downward to the
nearest whole-share amount, and the Company may at its option either
pay the balance of such principal in cash or include it in the remaining
principal amount of the new Note issued after payment of the Total Exercise
Price pursuant to Section2(b).
Section 3. Transfer, Division and Combination. This
Warrant and all rights hereunder are transferable, in whole but not in part,
on the books of the Company to be maintained for such purpose, upon
surrender of this Warrant at the office of the Company maintained for
such purpose pursuant to Section 11, together with (a) a written
assignment in the form set out at the end of this Warrant duly executed by the
Holder hereof or its agent or attorney and (b) payment of funds sufficient
to pay any stock transfer taxes payable upon the making of such transfer.
Upon such surrender, execution and payment, the Company shall execute and
deliver a new Warrant in the name of the assignee, and this Warrant shall
promptly be canceled. If this Warrant is assigned in blank, the Company
may (but shall not be obliged to) treat the bearer hereof as the absolute owner
of this Warrant for all purposes and the Company shall not be affected by any
notice to the contrary. This Warrant, if properly assigned in compliance
with this Section 3, may be exercised by an assignee for the purchase of
shares of Common Stock without having a new Warrant issued.
The Company shall pay all expenses other than stock
transfer taxes incurred by the Company in the performance of its
obligations in connection with the preparation, issuance and delivery of
Warrants under this Section 3.
The Company agrees to maintain at its aforesaid office books
for the registration and transfer of the Warrants.
Section 4. Adjustment of Stock Unit or Exercise Price.
The number of shares of Common Stock comprising a Stock Unit, and the Exercise
Price per Stock Unit, shall be subject to adjustment from time to time
as set forth in this Section 4 and in Section 5.
4.1. Stock Dividends, Subdivisions and Combinations. In
case at any time or from time to time the Company shall:
(a) take a record of the holders of its Common Stock for
the purpose of entitling them to receive a dividend payable in, or other
distribution of, Common Stock, or
(b) subdivide its outstanding shares of Common Stock
into a larger number of shares of Common Stock, or
(c) combine its outstanding shares of Common Stock into a
smaller number of shares of Common Stock,
then the number of shares of Common Stock comprising a Stock Unit
immediately after the happening of any such event shall be adjusted so as
to consist of the number of shares of Common Stock which a record holder of
the number of shares of Common Stock comprising a Stock Unit immediately
prior to the happening of such event would own or be entitled to receive after
the happening of such event.
4.2. Other Provisions Applicable to Adjustments. The
following provisions shall be applicable to the adjustment of the number of
shares of Common Stock comprising a Stock Unit hereinbefore provided for in
this Section 4:
(a) When Adjustments to Be Made. The adjustments
required by Section 4.1 shall be made whenever and as often as any
specified event requiring an adjustment shall occur. For the purpose
of any adjustment, any specified event shall be deemed to have occurred
at the close of business on the date of its occurrence.
(b) Fractional Interests. In computing adjustments under
this Section 4, fractional interests in Common Stock shall be taken into
account to the nearest one-thousandth of a share.
(c) When Adjustment Not Required. If the Company shall
take a record of the holders of its Common Stock for the purpose of entitling
them to receive a dividend or distribution and shall, thereafter and
before the distribution thereof to shareholders, abandon its plan to
pay or deliver such dividend or distribution, then thereafter no
adjustment shall be required by reason of the taking of such record and any
such adjustment previously made in respect thereof shall be rescinded and
annulled.
4.3. Merger, Consolidation Etc. In case the Company shall
(a) merge into or consolidate with another Person and shall not be the
continuing or surviving Person of such merger or consolidation, (b) shall
permit any other Person to merge into or consolidate with the Company and the
Company shall be the continuing or
surviving Person, but, in connection with such merger or consolidation, the
Common Stock shall be changed into or exchanged for stock or other securities
of any other Person or cash or any other any other property, (c) shall
sell, transfer or otherwise dispose of all or substantially all of its
property, assets or business to another person or (d) effect a capital
reorganization or reclassification of the Common Stock (other than a
capital reorganization or reclassification for which an adjustment is
provided by Section 4.1) and pursuant to the terms of such merger,
consolidation, disposition, capital reorganization or reclassification,
shares of common stock of a successor or acquiring Person are to be
received by or distributed to the holders of Common Stock of the
Company, then each holder of a Warrant shall have the right thereafter to
receive, upon exercise of such Warrant, Stock Units each comprising the number
of shares of common stock of such successor or acquiring Person receivable
upon or as a result of such merger, consolidation, disposition, capital
reorganization or reclassification by a holder of the number of shares of
Common Stock comprising a Stock Unit immediately prior to such event. If,
pursuant to the terms of such merger, consolidation, disposition, capital
reorganization or reclassification, any cash, shares of stock, other
securities or property or warrants or other subscription or purchase rights
or property of any nature whatsoever are to be received by or distributed
to the holders of Common Stock of the Company, then, at the Holder's option,
either (i) there shall be a reduction of the Exercise Price equal to the
amount applicable to the number of shares of Common Stock then comprising
a Stock Unit of any such cash and of the fair value of any and all such shares
of stock or of other securities or property to be received by or
distributed to the holders of Common Stock of the Company, or (ii)
such Holder shall have the right to receive, upon exercise of its Warrant,
such cash, shares of stock or other securities or property of any nature as
a holder of the number of shares of Common Stock underlying a Stock Unit
would have been entitled to receive upon the occurrence of such event. Such
fair value shall be determined in good faith by the Board of Directors of the
Company. In case of any such merger, consolidation, disposition, capital
reorganization or reclassification, the successor or acquiring Person shall
expressly assume the due and punctual observance and performance of each and
every covenant and condition of this Warrant to be performed and
observed by the Company and all of the obligations and liabilities
hereunder, subject to such modification as shall be necessary to provide
for adjustments of Stock Units which shall be as nearly equivalent as
practicable to the adjustments provided for in this Section 4. For the
purposes of this Section 4 "common stock of the successor or acquiring
Person" shall include stock of such corporation of any class, that is not
preferred as to dividends or assets over any other class of stock of such
corporation and that is not subject to redemption, and shall also include any
evidences of indebtedness, shares of stock or other securities which are
convertible into or exchangeable for any such stock, either immediately or
upon the arrival of a specified date or the happening of a specified
event, and any warrants or other rights to subscribe for or purchase any such
stock. The foregoing provisions of this Section 4.3 shall similarly apply
to successive mergers, consolidations, dispositions, capital
reorganizations or reclassifications.
4.4 No Impairment. The Company will not, by amendment of
its certificate of incorporation or through a consolidation, merger,
reorganization, transfer of assets, dissolution, issue or sale of securities
or any other voluntary action, avoid or seek to avoid the observance or
performance of any of the terms of this Warrant, but will at all times in
good faith assist in the carrying out of all such terms and in the taking of
all such action as may be necessary or appropriate in order to protect the
rights of the Holder of this Warrant against impairment. Without limiting
the generality of the foregoing, the Company will not permit the par value
of any shares of stock receivable upon the exercise of this Warrant to exceed
the amount payable therefor upon such exercise, (b) will take all such
action as may be necessary or appropriate in order that the Company may
validly and legally issue fully paid and nonassessable shares of stock on
the exercise of the Warrants from time to time outstanding, and (c) will not
take any action that results in any adjustment of the Exercise Price if the
total number of shares of Common Stock (or other securities) issuable after
the action upon exercise of all of the Warrants would exceed the total number
of shares of Common Stock (or other securities) then authorized by the
Company's certificate of incorporation and available for the purpose of issue
upon such exercise.
Section 5. Notice to Warrant Holders of Adjustment of
Stock Unit or Exercise Price. Whenever the number of shares of Common Stock
comprising a Stock Unit, or the price at which a Stock Unit may be purchased
upon exercise of the Warrants, shall be adjusted pursuant to Section 4, the
Company shall forthwith issue a notice setting forth, in reasonable
detail, the event requiring the adjustment and the method by which such
adjustment was calculated (including a statement of the fair value, as
determined by the Board of Directors of the Company, of any evidences of
indebtedness, shares of stock, other securities or property or warrants or
other subscription or purchase rights or property of any nature whatsoever
referred to in Section 4.3) and specifying the number of shares of Common Stock
comprising a Stock Unit and (if such adjustment was made pursuant to Section
4.3) describing the number and kind of any other shares of stock comprising
a Stock Unit, and any change in the purchase price or prices thereof,
after giving effect to such adjustment or change. The Company shall within
30 days after the making of such adjustment send such notice to the Holder in
accordance with Section 12.
Section 6. Reservation and Authorization of Common
Stock. The Company shall at all times reserve and keep available solely
for issuance upon the exercise of Warrants such number of its authorized but
unissued shares of Common Stock as will be sufficient to permit the exercise
in full of this Warrant. All shares of Common Stock which shall be so issuable,
when issued upon exercise of this Warrant or upon such exercise, as
the case may be, shall be duly and validly authorized and issued, fully-paid
and nonassessable.
Section 7. Taking of Record; Stock and Warrant Transfer
Books. In the case of all dividends or other distributions by the Company
to the holders of its Common Stock with respect to which any provision of
Section 4 which refers to the taking of a record of such holders, the
Company will in each such case take such record as of the close of business
on a Business Day. The Company will not at any time, except upon dissolution,
liquidation or winding up or as otherwise may be required by law, close
its stock transfer books or Warrant transfer books so as to result in
preventing or delaying the exercise or transfer of any Warrant.
Section 8. Limitation of Liability. No provision hereof,
in the absence of affirmative action by the Holder to purchase shares of
Common Stock, and no mere enumeration herein of the rights or privileges of
the Holder, shall give rise to any liability of the Holder for the purchase
price of the Warrant Stock or as a stockholder of the Company, whether such
liability is asserted by the Company or by creditors of the Company.
Section 9. Loss or Destruction of Warrant Certificates.
Upon receipt of evidence reasonably satisfactory to the Company of the loss,
theft, destruction or mutilation of any Warrant and, in the case of any
such loss, theft or destruction, upon receipt of indemnity or security
in an amount reasonably satisfactory to the Company (the original Holder's or
any other institutional Holder's indemnity being satisfactory indemnity in
the event of loss, theft or destruction of any Warrant owned by such
institutional Holder), or, in the case of any such mutilation, upon surrender
and cancellation of such Warrant, the Company will at its own expense execute
and deliver, in lieu of such lost, stolen, destroyed or mutilated
Warrant, a new Warrant of like tenor and representing the right to purchase
the same aggregate number of shares of Warrant Stock.
Section 10. Amendments. The terms of this Warrant may be
amended, and the observance of any term therein may be waived, but only
with the written consent of the Holder.
Section 11. Office of the Company. So long as this
Warrant remains outstanding, the Company shall maintain an office where the
Warrant may be presented for exercise, transfer, division or combination as
in this Warrant provided. Such office shall be at Big Dog Holdings, Inc.,
121 Gray Avenue, Suite 300, Santa Barbara, California 93101, Attention:
General Counsel, Fax: (805) 962-9460, unless and until the Company shall
designate and maintain some other office for such purposes and deliver written
notice thereof to the Holder.
Section 12. Notices Generally.
12.1. All communications (including all required or
permitted notices) pursuant to the provisions hereof shall be in writing
and shall be sent, to any registered Holder of this Warrant, to the address
of such Holder as it appears in the stock or warrant ledger of the Company
or at such other address as such Holder may have furnished in writing to the
Company.
12.2. Any notice shall be deemed to have been duly
delivered when delivered by hand, if personally delivered, and if sent by
mail to a party whose address is in the same country as the sender, five
Business Days after being deposited in the mail, postage prepaid, and
if sent by recognized international courier, freight prepaid, with a copy
sent by telecopier, to a party whose address is not in the same country as
the sender, three Business Days after the later of (a) being telecopied and (b)
delivery to such courier.
Section 13. Governing Law. This Warrant shall be governed
by and construed in accordance with the laws of the State of California
(without regard to the conflicts of laws provisions thereof).
IN WITNESS WHEREOF, the Company has caused this Warrant to
be executed in its name by its duly authorized officer.
Dated as of: March __, 2004
BIG DOG HOLDINGS, INC.,
a Delaware corporation
By /s/ Andrew D. Feshbach
----------------------
Title:President
1
EXHIBIT A
EXERCISE NOTICE
Warrant No. SUN-1
To Big Dog Holdings, Inc.:
The undersigned registered owner of this Warrant to
Purchase Common Stock of Big Dog Holdings, Inc. dated March 3, 2004 (this
"Warrant") irrevocably exercises this Warrant for and purchases
________ Stock Units of Big Dog Holdings, Inc., a Delaware corporation,
purchasable with this Warrant, and hereby tenders $___________________
in principal amount of the attached Second Unsecured Creditors Promissory
Note as payment therefor, all at the price and on the terms and
conditions specified in this Warrant and requests that
certificates for the shares of Common Stock hereby purchased be
issued in the name of and delivered to _________________________
whose address is_____________________.
..
The undersigned registered owner of this Warrant
hereby certifies that it is not an "underwriter" as that term is defined
in Section 1145(b) of the United States Bankruptcy Code, and indemnifies and
holds Big Dog Holdings, Inc. harmless against any liability, loss or
expense (including, without limitation, reasonable attorneys' fees)
incurred or suffered by it arising out of the inaccuracy of this certification.
Capitalized terms not otherwise defined herein shall have the
meanings ascribed thereto in this Warrant.
Dated:___________________, 2004 POST-CONFIRMATION COMMITTEE
By
Name:
Title:
EXHIBIT B
ASSIGNMENT FORM
FOR VALUE RECEIVED the undersigned registered owner of
this Warrant hereby sells, assigns and transfers unto the Assignee named below
all of the rights of the undersigned under this Warrant:
Name and Address of Assignee
and does hereby irrevocably constitute and appoint____________Attorney to
make sure transfer occurs on the books of Big Dog Holdings, Inc., a
Delaware corporation, maintained for the purpose, with full power of
substitution in the premises.
Dated:
___________________________
Signature
___________________________
Witness
NOTICE: The signature to the assignment must correspond with the name as
written upon the face of the Warrant in every particular instance,
without alteration or enlargement or any change whatsoever.
The signature to this assignment must be guaranteed by a bank or
trust company having an office or correspondent in New York, New York
or by a firm having membership on the New York Stock Exchange.