Exhibit 4.3.1
BIG CITY BAGELS, INC.
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▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
As of July __, 1997
Continental Stock Transfer & Trust Company
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▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Re: Warrant Agreement, dated as of May 7, 1996 between Big City
Bagels, Inc. ("Company") and Continental Stock Transfer &
Trust Company ("Warrant Agent") ("Warrant Agreement")
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Gentlemen:
Reference is made to the above-referenced Warrant Agreement,
pursuant to which you issued on May 13, 1996, 1,793,750 Class A Redeemable
Common Stock Purchase Warrants ("Class A Warrant") and reserved for issuance an
additional 112,500 Class A Warrants issuable upon exercise of certain Purchase
Options issued to ▇▇▇▇▇▇ ▇▇▇▇▇▇ Securities, Inc. and its designees.
Please be advised that effective as of July __, 1997 the
Company will reduce the exercise price of the Class A Warrants to $2.50 per
share for a period of 60 days until September __, 1997, subject to the
discretion of the Company to extend such period for up to an additional 30 days,
until October __, 1997("Special Exercise Period") . Accordingly, if exercised
prior to the expiration of the Special Exercise Period, each Class A Warrant
will entitle the holder to purchase one share of Common Stock for $2.50. In
addition, for each Class A Warrant exercised during the Special Exercise Period,
upon the expiration of the Special Exercise Period, the holder thereof will be
issued a new Class A Warrant ("New Class A Warrant"). If an aggregate of at
least $2,000,000 of gross proceeds are derived from the exercise of the Class A
Warrants during the Special Exercise Period, then the exercise price of the
Class A Warrants which are not exercised and the New Class A Warrants will
remain at $2.50 per share until the expiration date on May 6, 2000. If less than
$2,000,000 of gross proceeds are derived from exercise of the Class A Warrants
during the Special Exercise Period, the exercise price of the Class A Warrants
which are not exercised and the New Class A Warrants will be $4.50 per share.
During the Special Exercise Period, the Company also will
modify the exercise provisions of the Company's 500,000 Class B Redeemable
Common Stock Purchase Warrants ("Class B Warrants"). Although you do not act as
warrant agent for the Class B Warrants, this modification has relevance to you
because upon the expiration of the Special Exercise Period, the Company will
issue one New Class A Warrant for each Class B Warrant exercised.
Accordingly, the Company is increasing the aggregate number of
Class A Warrants you are authorized to issue under the Warrant Agreement by up
to a maximum of
Continental Stock Transfer
& Trust Company
Page 2
2,293,750 (1,793,750 issuable upon exercise of presently outstanding Class A
Warrants and 500,000 issuable upon exercise of presently outstanding Class B
Warrants).
The foregoing modifications to the exercise provisions of the
Class A Warrants and Class B Warrants are binding upon the Company.
Please be advised that a Registration Statement on Form SB-2
("Registration Number 333-29297") registering the Common Stock and New Class A
Warrants underlying the Class A Warrants and Class B Warrants has been filed by
the Company and declared effective by the Securities and Exchange Commission.
Accordingly, during the Special Exercise Period you are
authorized to accept the exercise of Class A Warrants upon payment of the
reduced exercise price of $2.50 per share, subject to your receipt of
confirmation from the exercising holder that the beneficial owner thereof
resides in a State in which the counsel to the Company has advised you that it
has registered or qualified the shares underlying the Class A Warrant or an
exemption from registration and qualification requirements is available.
You are further authorized to issue, upon the expiration of
the Special Exercise Period, one New Class A Warrant for each Class A Warrant
and Class B Warrant exercised during the Special Exercise Period to the
exercising holder. Since you do not maintain records regarding the exercise of
Class B Warrants, the Company will provide you with the names, addresses and
denominations regarding the issuance of New Class A Warrants to exercising Class
B Warrantholders upon expiration of the Special Exercise Period.
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Continental Stock Transfer
& Trust Company
Page 3
Please acknowledge your receipt of this letter and your
agreement to the foregoing as Warrant Agent, which thereupon will constitute an
amendment to the Warrant Agreement, by signing a copy of this letter.
BIG CITY BAGELS, INC.
By:
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▇▇▇▇ ▇▇▇▇▇▇▇, Chairman
and Chief Executive Officer
AGREED:
CONTINENTAL STOCK TRANSFER
& TRUST COMPANY
By:
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Print Name:
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Print Title:
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