EXHIBIT 4.5
WARRANT AGREEMENT
BETWEEN
INTERNATIONAL SPORTS WAGERING INC.
AND
AMERICAN STOCK TRANSFER & TRUST COMPANY
Dated as of ________ ___, 1996
WARRANT AGREEMENT
WARRANT AGREEMENT dated as of ________ ___, 1996, between INTERNATIONAL
SPORTS WAGERING INC., a Delaware corporation (the "Company"), and AMERICAN STOCK
TRANSFER & TRUST COMPANY, a corporation organized under the banking laws of the
State of New York (the "Warrant Agent").
W I T N E S E T H:
WHEREAS, the Company proposes to make a public offering (the "Offering") of
Units (the "Units"), each Unit consisting of one share of the Company's Common
Stock, par value $0.001 per share (the "Common Stock"), and one redeemable
warrant (the "Public Warrants"), each Public Warrant entitling the holder to
purchase one share of the Company's Common Stock at an exercise price of
$_____ per share, [120% of the Unit offering price]; and
WHEREAS, the one share of Common Stock and the one Public Warrant included
in each Unit shall not be separable until two years following the date of
issuance, or such shorter period as (i) Barington Capital Group, L.P.
("Barington") may determine or (ii) 30 days after the Company may determine at
any time after one year, provided, that the last sale price of the Units has
been at least 200% of the initial Unit offering price for a period of 15
consecutive trading days ending within 15 days of such Company determination;
and
WHEREAS, the Company proposes to issue to the Representatives an option
(the "Representatives' Options") to purchase up to 150,000 Units (the
"Representatives' Units") such Representatives' Units to be identical to the
Units offered to the public; and
WHEREAS, the Company proposes to issue certificates evidencing the Public
Warrants and the Warrants underlying the Representatives' Units (the
"Representatives' Warrants", and together with the Public Warrants referred to
herein as the "Warrants") (such Warrant certificates issued pursuant to this
Agreement being hereinafter collectively called the "Warrant Certificates"); and
WHEREAS, the Company desires the Warrant Agent, and the Warrant Agent
agrees, to act on behalf of the Company in connection with the issuance,
transfer, exchange, replacement and surrender of the Warrant Certificates; and
WHEREAS, the Company and the Warrant Agent desire to set forth in this
Warrant Agreement, among other things, the form and provisions of the Warrant
Certificates and the terms and conditions under which they may be issued,
transferred, exchanged, replaced and surrendered in connection with the exercise
of the Warrants;
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements herein contained, the parties hereto agree as follows:
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ARTICLE I
DISTRIBUTION OF WARRANT CERTIFICATES
Section 1.1 Appointment of Warrant Agent. The Company hereby appoints the
Warrant Agent to act on behalf of the Company in accordance with the
instructions hereinafter in this Agreement set forth, and the Warrant Agent
hereby accepts such appointment.
Section 1.2 Form of Warrant Certificates. The Warrant Certificates for the
Public Warrants and the Representatives' Warrants shall be issued in registered
form only and, together with the purchase and assignment forms to be printed on
the reverse thereof, shall be substantially in the form of Exhibit A and Exhibit
B attached hereto, respectively, and, in addition, may have such letters,
numbers or other marks of identification or designation and such legends,
summaries, or endorsements stamped, printed, lithographed or engraved 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.
Section 1.3 Execution of Warrant Certificates. The Warrant Certificates
shall be executed on behalf of the Company by its Chief Executive Officer or
Chairman of the Board, or President or any Vice President, and by its Chief
Financial Officer or any Assistant Treasurer or Secretary or any Assistant
Secretary, either manually or by facsimile signature printed thereon. The
Warrant Certificates shall be manually countersigned and dated the date of
countersignature by the Warrant Agent and shall not be valid for any purpose
unless so countersigned and dated. In case any authorized officer of the Company
who shall have signed any of the Warrant Certificates shall cease to be such
officer of the Company either before or after delivery thereof by the Company to
the Warrant Agent, the signature of such person on such Warrant Certificates,
nevertheless, shall be valid and such Warrant Certificates may be countersigned
by the Warrant Agent and issued and delivered to those persons entitled to
receive the Warrants represented thereby with the same force and effect as
though the person who signed such Warrant Certificates had not ceased to be such
officer of the Company.
Section 1.4 Issuance and Distribution of Warrant Certificates. Upon
completion of the Offering, the Company shall deliver to the Warrant Agent an
adequate supply of Warrant Certificates for the Public Warrants and the
Representatives'
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Warrants executed on behalf of the Company as described in Section 1.3 hereof.
Upon receipt of an order from the Company, the Warrant Agent shall within three
business days complete and countersign Warrant Certificates representing the
total number of Public Warrants to be issued hereunder and shall deliver such
Warrant Certificates pursuant to written instructions of the Company. Upon
receipt of an order from the Company acknowledging the exercise of the
Representatives' Options, the Warrant Agent shall within three business days
complete and countersign Warrant Certificates representing the total number of
Representatives' Warrants to be issued upon the exercise of the Representatives'
Option, and shall deliver such Warrant Certificates pursuant to written
instructions of the Company.
ARTICLE II
WARRANT EXERCISE PRICE AND EXERCISE OF WARRANTS
Section 2.1 Exercise Price. Each Warrant Certificate shall, when signed by
the Chief Executive Officer or Chairman of the Board, or President or any Vice
President, and by the Chief Financial Officer or any Assistant Treasurer or
Secretary or any Assistant Secretary of the Company and countersigned by the
Warrant Agent, entitle the registered holder thereof, to purchase from the
Company one share of Common Stock for each Warrant evidenced thereby, at the
purchase price of $_______ per share (the "Initial Exercise Price"), or such
adjusted number of shares at such adjusted purchase price as may be established
from time to time pursuant to the provisions of Article IV hereof, payable in
full at the time of exercise of the Warrant. Except as the context otherwise
requires, the term "Exercise Price" as used in this Agreement shall mean the
purchase price of one share of Common Stock upon the exercise of a Public
Warrant or Representatives' Warrant, as the context requires, reflecting all
appropriate adjustments made in accordance with the provisions of Article IV
hereof.
Section 2.2 Registration of Common Stock and Exercisability of Warrants.
Each Warrant may be exercised at any time after the shares of Common Stock
issuable upon exercise of such Warrants have been effectively registered under
the Securities Act of 1933, as amended (the "Securities Act"), and such other
action as may be required by federal or state law relating to the issuance or
distribution of securities shall have been taken, but not before 9:30 A.M., New
York City time, on [two years after effective date], 1998 or such earlier date
(i) as Barington may determine or (ii) 30 days after the Company may determine
at any time after one year, provided, that the last sale price of the Units
has been at least 200% of the initial Unit offering price for a period of 15
consecutive trading days ending within 15 days of such Company determination,
(herein referred to as the "Separation Date"), and not after 5:00 P.M., New
York City time, on the earlier of [effective date], 2001, and the business
day immediately preceding the Call Date (as defined in Section
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4.9). The term "Exercise Deadline" as used in this Agreement shall mean the
latest time and date at which the Warrants may be exercised. The Company shall
use its best efforts to secure the effective registration of the aforementioned
shares of Common Stock under the Securities Act and to register or qualify such
shares under applicable state laws; the Company further agrees, from and after
the time such registration has become effective, to use its best efforts to
maintain such registration or qualification in effect and to keep available for
delivery upon the exercise of Warrants a prospectus that meets the requirements
of Section 10 of the Securities Act, until the earlier of the date by which all
Warrants are exercised or the Exercise Deadline; provided however, that the
Company shall have no obligation to register such Common Stock or maintain the
effectiveness of such registration or qualification or to keep available a
prospectus, as aforesaid, in the event that, by amendment to the Securities Act
or otherwise, such registration or qualification or the delivery of such
prospectus is not required at the time said Common Stock is to be issued; and
provided further, that in the event, by amendment to the Securities Act or
otherwise, some other or different requirement shall be imposed by act of the
Congress of the United States which shall relate to the issuance of Common Stock
upon exercise of the Warrants, the Company shall use its best efforts to comply
with such requirements so long as the same shall not be more burdensome to the
Company than the registration statement under the Securities Act. Promptly after
a registration statement under the Securities Act covering the aforementioned
Common Stock has become effective, or such other action as contemplated hereby
and as may be required has been taken, as the case may be, the Company shall
cause notice thereof or a copy of the prospectus covering the aforementioned
Common Stock to be mailed to each registered holder of a Warrant Certificate.
Section 2.3 Procedure for Exercise of Warrants. During the period specified
in and subject to the provisions of Section 2.2 hereof, Warrants may be
exercised by surrendering the Warrant Certificates representing such Warrants to
the Warrant Agent at [the principal office of its corporate trust department]
(the "Principal Office"), which is presently at ____________________, with the
election to purchase form set forth on the Warrant Certificate duly completed
and executed, with signatures guaranteed by a member firm of a national
securities exchange, a commercial bank or trust company located in the United
States, a member of the National Association of Securities Dealers, Inc., or
other eligible guarantor institution which is a participant in a signature
guarantee program (as such terms are defined in Reg. 240.17Ad-15 under the
Securities Exchange Act of 1934, as amended) acceptable to the Warrant Agent
("Signatures Guaranteed"), 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 7.1 hereof, for each share of Common
Stock with respect to which
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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 order of 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.
Section 2.4 Issuance of Common Stock. As soon as practicable after the Date
of Exercise of any Warrants, the Company shall issue, or cause the 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 shares of Common Stock issued upon the exercise of any Warrants
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 shares of Common Stock is issued shall for all purposes be
deemed to have become the holder of record of the Common Stock 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 shares of Common Stock.
Section 2.5 Certificates for Unexercised Warrants. In the event that less
than all of the Warrants represented by a Warrant Certificate are exercised, the
Warrant Agent 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 Warrant Agent shall
distribute no Warrant Certificates representing fractions of Warrants under this
or any other section of this Agreement. Final fractions of shares shall be
treated as provided in Section 4.14.
Section 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.
Section 2.7 Disposition of Proceeds. The Warrant Agent shall account at
least monthly (or more frequently upon the request of the Company, provided that
in no event shall the Warrant Agent be required to account more frequently than
weekly) to the Company with respect to Warrants exercised and concurrently
deliver to the Company all funds.
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ARTICLE III
CALL OF WARRANTS
Section 3.1 Right to Call. The Company may, at its option, call for
redemption all or any portion of the then outstanding Warrants at a call price
of $.05 per Warrant (the "Call Price"), at any time after the Separation Date,
provided that the Current Market Price of the Common Stock, as determined
pursuant to Section 4.13, shall have been greater than or equal to 200% of the
initial Unit offering price for a period of 15 consecutive trading
days ending on the day prior to the date that notice of such call shall have
been given to the Warrant Agent by the Company pursuant to Section 4.11.
The foregoing notwithstanding, in no event shall the Representatives' Options be
subject to redemption by the Company under any circumstances as long as the
Representatives' Options are held by the Representatives or any of the following
transferees of the Representatives: (a) one or more officers or partners of the
Representatives (or the officers or partners of any such partner); (b) any other
underwriting firm or member of the selling group which participated in the
Offering (or the officers or partners of any such firm); (c) a successor to
either of the Representatives or the officers or partners of such successor; (d)
a purchaser of substantially all of the assets of either of the Representatives;
or (e) a transferee by operation of law.
Section 3.2 Payment of Call Price. On or prior to the opening of business
on the Call Date (as defined in Section 4.9), the Company will deposit with
Warrant Agent funds in form satisfactory to the Warrant Agent sufficient to
purchase all the Warrants which are to be called. Payment of the Call Price will
be made by the Warrant Agent upon presentation and surrender of the Warrant
Certificates representing such Warrants to the Warrant Agent at its Principal
Office.
Section 3.3 Call in Part. In the event the Company shall determine to call
less than all the Warrants, the Warrants chosen to be called shall be selected
by the Warrant Agent in such manner as the Warrant Agent shall deem fair and
equitable, including without limitation selection by lot.
ARTICLE IV
ADJUSTMENTS AND NOTICE PROVISIONS
Section 4.1 Adjustment of Exercise Price. Subject to the provisions of this
Article IV, the Exercise Price in effect from time to time shall be subject to
adjustment, as follows:
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(a) 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, and the number of shares of Common Stock issuable upon exercise of the
Warrants in effect 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.
(b) In case the Company shall issue or fix a record date for the issuance
to all holders of Common Stock of rights, options, or warrants to subscribe for
or purchase Common Stock (or securities convertible into or exchangeable for
Common Stock) at a price per share (or having a conversion or exchange price per
share, if a security convertible into or exchangeable for Common Stock) less
than the Current Market Price per share of Common Stock (as determined pursuant
to Section 4.2 hereof) on such record date, then, in each case, the Exercise
Price shall be adjusted by multiplying the Exercise Price in effect immediately
prior to such record date by a fraction, the numerator of which shall be the
number of shares of Common Stock outstanding on such record date plus the number
of shares of Common Stock which the aggregate offering price of the total number
of shares of Common Stock so to be offered (or the aggregate initial conversion
or exchange price of the convertible or exchangeable securities so to be
offered) would purchase at such Current Market Price and the denominator of
which shall be the number of shares of Common Stock outstanding on such record
date plus the number of additional shares of Common Stock to be offered for
subscription or purchase (or into which the convertible or exchangeable
securities so to be offered are initially convertible or exchangeable). Such
adjustment shall become effective at the close of business on such record date;
provided, however, that, to the extent the shares of Common Stock (or securities
convertible into or exchangeable for shares of Common Stock) are not delivered,
the Exercise Price shall be readjusted after the expiration of such rights,
options, or warrants (but only with respect to Warrants exercised after such
expiration), to the Exercise Price which would then be in effect had the
adjustments made upon the
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issuance of such rights, options, or warrants been made upon the basis of
delivery of only the number of shares of Common Stock (or securities convertible
into or exchangeable for shares of Common Stock) actually issued. In case any
subscription price may be paid in a consideration part or all of which shall be
in a form other than cash, the value of such consideration shall be as
determined in good faith by the board of directors of the Company, whose
determination shall be conclusive absent manifest error. Shares of Common Stock
owned by or held for the account of the Company or any majority-owned subsidiary
shall not be deemed outstanding for the purpose of any such computation.
(c) In case the Company shall distribute to all holders of Common Stock
(including any such distribution made to the shareholders of the Company in
connection with a consolidation or merger in which the Company is the continuing
corporation) evidences of its indebtedness, cash (other than any cash dividend
which, together with any cash dividends paid within the 12 months prior to the
record date for such distribution, does not exceed 5% of the Current Market
Price at the record date for such distribution) or assets (other than
distributions and dividends payable in shares of Common Stock), or rights,
options, or warrants to subscribe for or purchase Common Stock, or securities
convertible into or exchangeable for shares of Common Stock (excluding those
with respect to the issuance of which an adjustment of the Exercise Price is
provided pursuant to Section 4.1(b) hereof), then, in each case, the Exercise
Price shall be adjusted by multiplying the Exercise Price in effect immediately
prior to the record date for the determination of shareholders entitled to
receive such distribution by a fraction, the numerator of which shall be the
Current Market Price per share of Common Stock on such record date, less the
fair market value (as determined in good faith by the board of directors of the
Company, whose determination shall be conclusive absent manifest error) of the
portion of the evidences of indebtedness or assets so to be distributed, or of
such rights, options, or warrants or convertible or exchangeable securities, or
the amount of such cash, applicable to one share, and the denominator of which
shall be such Current Market Price per share of Common Stock. Such adjustment
shall become effective at the close of business on such record date.
Section 4.2 Current Market Price. For the purpose of any computation under
this Article IV, the Current Market Price per share of Common Stock on any date
shall be deemed to be the average of the daily closing prices for the 30
consecutive trading days immediately preceding the date in question. The closing
price for each day shall be (a) the last reported sales price regular way or, in
case no such reported sale takes place on such day, the closing bid price
regular way, in either case on the principal national securities exchange
(including, for purposes hereof, the NASDAQ National Market System) on which the
Common Stock is listed or admitted to
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trading (b) if the Common Stock is not listed or admitted to trading on any
national securities exchange, the highest reported bid price for the Common
Stock as furnished by the National Association of Securities Dealers, Inc.
through NASDAQ or a similar organization if NASDAQ is no longer reporting such
information or (c) if on any such date the Common Stock is not listed or
admitted to trading on any national securities exchange and is not quoted by
NASDAQ or any similar organization, as determined by reference to the "pink
sheets" published by the National Quotation Bureau or, if not so published, by
such other method of determining the market value of a share of Common Stock as
the board of directors of the Company shall in good faith from time to time deem
to be fair, whose determination shall be conclusive absent manifest error shall
be used.
Section 4.3 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 IV are not required to be
made shall be carried forward and taken into account in any subsequent
adjustment. All calculations under this Article IV shall be made to the nearest
cent or to the nearest one thousandth of a share, as the case may be.
Section 4.4 Deferral of Adjustments to Exercise Price. In any case in which
this Article IV 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 xxxx or other appropriate
instrument evidencing such holder's right to receive such additional shares upon
the occurrence of the event requiring such adjustment.
Section 4.5 Adjustment to Number of Shares. Upon each adjustment of the
Exercise Price as a result of the calculations made in Sections 4.1(b) or 4.1(c)
hereof the Warrants shall thereafter evidence the right to purchase, at the
adjusted Exercise Price, that number of shares (calculated to the nearest
thousandth) obtained by dividing (A) the product obtained by multiplying the
number of shares purchasable upon exercise of the Warrants prior to adjustment
of the number of shares by the Exercise Price in effect prior to adjustment of
the Exercise Price by (B) the Exercise Price in effect after such adjustment of
the Exercise Price.
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Section 4.6 Reorganization. In case of any capital reorganization, other
than in the cases referred to in Section 4.1 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 the sale of the property of the
Company as an entirety or substantially as an entirety (collectively such
actions being hereinafter 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 supplemental agreement between the Company, or any successor thereto, and the
Warrant Agent 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 or conveyance or other transfer of all or substantially all of the
assets of the Company as a 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 of other transfer has been consummated.
Section 4.7 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
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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 or change by a holder
of the number of shares of Common Stock for which the Warrants might have been
exercised immediately prior to such reclassification or change. Thereafter,
appropriate provision shall be as nearly equivalent as practicable to the
adjustments in Article IV. The above provisions of this Section 4.7 shall
similarly apply to successive reclassifications and changes of shares of Common
Stock.
Section 4.8 Verification of Computations. Whenever the Exercise Price is
adjusted as provided in this Article IV, the Corporation will promptly obtain a
certificate of a firm of independent public accountants of recognized standing
selected by the Board of Directors (who may be the regular auditors of the
Corporation) setting forth the exercise price as so adjusted and a brief
statement of the facts accounting for such adjustment, an will make available a
brief summary thereof to the Warrant Agent and to the holders of the Warrant
Certificates, at their addresses listed on the register maintained for the
purpose by the Warrant Agent.
Section 4.9 Exercise Price Not Less Than Par Value. In no event shall the
Exercise Price be adjusted below the par value per share of the Common Stock.
Section 4.10 Notice of Certain Actions. In case at any time the Company
shall propose:
(a) 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
(b) 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
(c) to effect any reclassification or change of outstanding shares of
Common Stock, or any consolidation, merger, sale, lease, or conveyance of
property, described in Section 4.7; or
(d) to effect any liquidation, dissolution, or winding-up of the
Company; or
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(e) 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 Warrant Agent. Such notice shall specify the date on which
the books of the Company shall close, or a record be taken, for determining
holders of Common Stock entitled to receive such stock dividend or other
distribution of such rights or warrants, or the date on which such
reclassification, 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.
The Company shall cause copies of such notice to be mailed to each registered
holder of a Warrant Certificate. Such notice shall be mailed, in the case of any
action covered by Subsection 4.9(a) or 4.9(b) above, at least 10 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
4.9(c) or 4.9(d) above, at least 10 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 Section 4.9(e) above, no more than 30 days after
such action.
Section 4.11 Notice of Call. Notice of any call for redemption shall be
given to the Warrant Agent by the Company not less than 20 days and not more
than 45 days prior to the date established for such call (the "Call Date") and
such notice shall be mailed to all registered holders of Warrant Certificates to
be called by the Warrant Agent promptly after the Company shall have given such
notice to the Warrant Agent. Each such notice of call will specify the Call Date
and the Call Price. The notice will state that payment of the Call Price will be
made by the Warrant Agent upon presentation and surrender of the Warrant
Certificates representing such Warrants to the Warrant Agent at its Principal
Office, and will also state that the right to exercise the Warrants will
terminate at 5:00 P.M., New York City time, on the business day immediately
preceding the Call Date. The Company will also make prompt public announcement
of such redemption by news release and by notice to any national securities
exchange on which the Warrants are listed for trading.
Section 4.12 Notice of Adjustments. Whenever any adjustment is made
pursuant to this Article IV, the Company shall cause notice of such adjustment
to be mailed to the Warrant Agent 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)
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the Exercise Price, the number of shares or the securities or other property
purchasable upon exercise of each Warrant after giving effect to such
adjustment. The Warrant Agent shall within 15 days after receipt of such notice
from the Company cause a similar notice to be mailed to each registered holder
of a Warrant Certificate.
Section 4.13 Warrant Certificate Amendments. Irrespective of any
adjustments pursuant to this Article IV, 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.
Section 4.14 Fractional Shares. The Company shall not be required upon the
exercise of any Warrant to issue fractional shares of Common Stock which may
result from adjustments in accordance with this Article IV to the Exercise Price
or number of shares of Common Stock purchasable under each Warrant. If more than
one Warrant is exercised at one time by the same registered holder, the number
of full shares of Common Stock which shall be deliverable shall be computed
based on the number of shares deliverable in exchange for the aggregate number
of Warrants exercised. With respect to any final fraction of a share called for
upon the exercise of any Warrant or Warrants, the Company shall pay a cash
adjustment in respect of such final fraction in an amount equal to the same
fraction of the Current Market Price of a share of Common Stock calculated in
accordance with Section 4.2.
ARTICLE V
OTHER PROVISIONS RELATING TO
RIGHTS OF REGISTERED HOLDERS
OF WARRANT CERTIFICATES
Section 5.1 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, to receive any notice of, or to attend, meetings of
shareholders or any other proceedings of the Company.
Section 5.2 Lost, Stolen, Mutilated or Destroyed Warrant Certificates. If
any Warrant Certificate shall be mutilated, lost, stolen or destroyed, the
Company in its discretion may direct the Warrant Agent to 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
- 14 -
Certificate, and of the ownership thereof, and indemnity, if requested, all
satisfactory to the Company and the Warrant Agent. 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 or Warrant Agent 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 VI
SPLIT UP, COMBINATION, EXCHANGE, TRANSFER,
AND CANCELLATION OF WARRANT CERTIFICATES
Section 6.1 Split Up, Combination, Exchange and Transfer of Warrant
Certificates. Prior to the Exercise Deadline, Warrant Certificates, subject to
the provisions of Section 6.2, 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 Warrant Agent at its Principal Office 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
"stop-transfer" instructions the Company may give to the Warrant Agent to
implement any such restrictions (which instructions the Company is expressly
authorized to give), transfer of outstanding Warrant Certificates may be
effected by the Warrant Agent from time to time upon the books of the Company to
be maintained by the Warrant Agent for that purpose, upon a surrender of the
Warrant Certificate to the Warrant Agent at its Principal Office, with the
assignment form set forth in the Warrant Certificate duly executed and with
Signatures Guaranteed. Upon any such surrender for split up, combination,
exchange or transfer, the Warrant Agent shall execute and deliver to the person
entitled thereto a Warrant Certificate or Warrant Certificates, as the case may
be, as so requested. The Warrant Agent shall not be required (a) to issue,
register the transfer of, or exchange any Warrant separate from a Unit prior to
the date the Warrant is separable from the Common Stock and exercisable as
provided in Section 2.2 hereof (b) to issue, register the transfer of or
exchange any Warrant during a period beginning at the opening of business 20
days before the day of the mailing of a notice of call of Warrants selected for
call under Section 3.1 and ending at the close of business on the day of such
mailing or (c) to register the transfer of or exchange
- 15 -
any Warrant so selected for call in whole or in part, except, in the case of any
Warrant be called in part, the portion thereof not to be called. The Warrant
Agent 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.
Section 6.2 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
cancelled and shall not be reissued by the Company; and, except as provided in
Section 2.6 in case of the exercise of less than all of the Warrants evidenced
by a Warrant Certificate or in Section 5.1 in case of a split up, combination,
exchange or transfer, no Warrant Certificate shall be issued hereunder in lieu
of such cancelled Warrant Certificate. Any Warrant Certificate so cancelled
shall be destroyed by the Warrant Agent unless otherwise directed by the
Company.
Section 6.3 Agreement of Warrant Certificate Holders. Every holder of a
Warrant Certificate by accepting the same consents and agrees with the Company
and the Warrant Agent and with every other holder of a Warrant Certificate that:
(a) transfer of the Warrant Certificates shall be registered on the
books of the Company maintained for that purpose by the Warrant Agent only
if surrendered at the Principal Office of the Warrant Agent, duly endorsed
or accompanied by a proper instrument of transfer, with Signatures
Guaranteed; and
(b) prior to due presentment for registration of transfer, the Company
and the Warrant Agent 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
or the Warrant Agent) for all purposes whatsoever, and neither the Company
nor the Warrant Agent shall be affected by any notice to the contrary.
ARTICLE VII
PROVISIONS CONCERNING THE WARRANT AGENT
AND OTHER MATTERS
Section 7.1 Payment of Taxes and Charges. The Company will from time to
time promptly pay to the Warrant Agent, or make provisions satisfactory to the
Warrant Agent for the
- 16 -
payment of, all transfer taxes and charges that may be imposed by the United
States or any state upon the Company or the Warrant Agent in connection with the
issuance or delivery of shares of Common Stock upon the exercise of any
Warrants, but any such taxes 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 certificates 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.
Section 7.2 Resignation or Removal of Warrant Agent. The Warrant Agent may
resign its duties and be discharged from all further duties and liabilities
hereunder after giving 30 days' notice in writing to the Company, except that
such shorter notice may be given as the Company shall, in writing, accept as
sufficient. Upon comparable notice to the Warrant Agent, the Company may remove
the Warrant Agent; provided, however, that in such event the Company shall
appoint a new Warrant Agent, as hereinafter provided, and the removal of the
Warrant Agent shall not be effective until a new Warrant Agent has been
appointed and has accepted such appointment. If the office of Warrant Agent
becomes vacant by resignation or incapacity to act or otherwise, the Company
shall appoint in writing a new Warrant Agent. If the Company shall fail to make
such appointment within a period of 30 days after it has been notified in
writing of such resignation or incapacity by the resigning or incapacitated
Warrant Agent or by the registered holder of any Warrant Certificate, then the
registered holder of any Warrant Certificate may apply to any court of competent
jurisdiction for the appointment of a new Warrant Agent. The Warrant Agent
hereby agrees to take any such action as may be necessary to provide for the
orderly transfer of its responsibilities hereunder to the new Warrant Agent. Any
new Warrant Agent appointed hereunder shall execute, acknowledge and deliver to
the former Warrant Agent last in office, and to the Company, an instrument
accepting such appointment under substantially the same terms and conditions as
are contained herein, and thereupon such new Warrant Agent without any further
act or deed shall become vested with the rights, powers, duties and
responsibilities of the Warrant Agent and the former Warrant Agent shall cease
to be the Warrant Agent; but if for any reason it becomes necessary or expedient
to have the former Warrant Agent execute and delivery any further assurance,
conveyance, act or deed, the same shall be done at the expense of the Company
and shall be legally and validly executed and delivered by the former Warrant
Agent.
Section 7.3 Notice of Appointment. Not later than the effective date of the
appointment of a new Warrant Agent, the
- 17 -
Company shall cause notice thereof to be mailed to the former Warrant Agent and
the transfer agent for the Common Stock, and shall forthwith cause a copy of
such notice to be mailed to each registered holder of a Warrant Certificate.
Failure to mail such notice, or any defect contained therein, shall not effect
the legality or validity of the appointment of the successor Warrant Agent.
Section 7.4 Merger of Warrant Agent. Any company into which the Warrant
Agent may be merged or with which it may be consolidated, or any company
resulting from any merger or consolidation to which the Warrant Agent shall be a
party, shall be the successor Warrant Agent under this Agreement without further
act, provided that such company would be eligible for appointment as a successor
Warrant Agent under the provisions of Section 7.2 hereof. Any such successor
Warrant Agent may adopt the prior countersignature of any predecessor Warrant
Agent and distribute Warrant Certificates countersigned but not distributed by
such predecessor Warrant Agent, or may countersign the Warrant Certificates in
its own name.
Section 7.5 Company Responsibilities. The Company agrees that it shall (i)
pay the Warrant Agent reasonable remuneration for its services as Warrant Agent
hereunder and will reimburse the Warrant Agent upon demand for all expenses,
advances, and expenditures that the Warrant Agent may reasonably incur in the
execution of its duties hereunder (including fees and expenses of its counsel);
(ii) provide the Warrant Agent, upon request, with sufficient funds to pay any
cash due pursuant to Section 3.12 upon exercise of Warrants; and (iii) perform,
execute, acknowledge and deliver or cause to be performed, executed,
acknowledged and delivered all further and other acts, instruments and
assurances as may reasonably be required by the Warrant Agent for the carrying
out or performing by the Warrant Agent of the provisions of this Agreement.
Section 7.6 Certification for the Benefit of Warrant Agent. Whenever in the
performance of its duties under this Agreement the Warrant Agent shall deem it
necessary or desirable that any matter be proved or established or that any
instructions with respect to the performance of its duties hereunder be given by
the Company prior to taking or suffering any action hereunder, such matter
(unless other evidence in respect thereof be herein specifically prescribed) may
be deemed to be conclusively proved and established, or such instructions may be
given, by a certificate or instrument signed by the Chairman, Chief Executive
Officer, the President, a Vice President, the Secretary or the Treasurer of the
Company and delivered to the Warrant Agent. Such certificate or instrument may
be relied upon by the Warrant Agent for any action taken or suffered in good
faith by it under the provisions of this Agreement; but in its discretion the
Warrant Agent may in lieu
- 18 -
thereof accept other evidence of such matter or may require such further or
additional evidence as it may deem reasonable.
Section 7.7 Books and Records. The Warrant Agent shall maintain the
Company's books and records for registration and registration of transfer of the
Warrant Certificates issued hereunder. Such books shall show the names and
addresses of the respective holders of the Warrant Certificates, the number of
Warrants evidenced on its face by each Warrant Certificate and the date of each
Warrant Certificate.
Section 7.8 Liability of Warrant Agent. The Warrant Agent shall be liable
hereunder for its own negligence or willful misconduct. The Warrant Agent shall
act hereunder solely as an agent for the Company and its duties shall be
determined solely by the provisions hereof. The Warrant Agent shall not be
liable for or by reason of any of the statements of fact or recitals contained
in this Agreement or in the Warrant Certificates (except its counter-signature
thereof) or be required to verify the same, but all such statements and recitals
are and shall be deemed to have been made by the Company only. The Warrant Agent
will not incur any liability or responsibility to the Company or to any holder
of any Warrant Certificate for any action taken, or any failure to take action,
in reliance on any notice, resolution, waiver, consent, order, certificate, or
other paper, document or instrument reasonably believed by the Warrant Agent to
be genuine and to have been signed, sent or presented by the proper party or
parties. The Warrant Agent shall not be under any responsibility in respect of
the validity of this Agreement or the execution and delivery hereof by the
Company or in respect of the validity or execution of any Warrant Certificate
(except its counter-signature thereof); nor shall it be responsible for any
breach by the Company of any covenant or condition contained in this Agreement
or in any Warrant Certificate; nor shall it be responsible for the making of any
adjustment required under the provisions of Article IV hereof or responsible for
the manner, method or amount of any such adjustment or the facts that would
require any such adjustment; nor shall it by any act hereunder be deemed to make
any representation or warranty as to the authorization or reservation of any
shares of Common Stock or other securities to be issued pursuant to this
Agreement or any Warrant Certificate or as to whether any shares of Common Stock
or other securities will when issued be validly authorized and issued and fully
paid and nonassessable.
Section 7.9 Use of Attorneys, Agents and Employees. The Warrant Agent may
execute and exercise any of the rights or powers hereby vested in it or perform
any duty hereunder either itself or by or through its attorneys, agents or
employees.
Section 7.10 Indemnification. The Company agrees to indemnify the Warrant
Agent and save it harmless against any and
- 19 -
all losses, expenses or liabilities, including judgments, costs and counsel fees
arising out of or in connection with its agency under this Agreement, except as
a result of the negligence or willful misconduct of the Warrant Agent.
Section 7.11 Acceptance of Agency. The Warrant Agent hereby accepts the
agency established by this Agreement and agrees to perform the same upon the
terms and conditions herein set forth.
Section 7.12 Changes to Agreement. Neither the Company nor the Warrant
Agent may, by supplemental agreement or otherwise, alter or change the rights,
privileges or immunities of the registered holders of the Warrant Certificates
without the prior written consent of the Representatives.
Section 7.13 Assignment. All the covenants and provisions of this Agreement
by or for the benefit of the Company or the Warrant Agent shall bind and inure
to the benefit of their respective successors and assigns.
Section 7.14 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 reasonably satisfactory in form and substance to the Warrant Agent and
delivered to the Warrant Agent, 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.
Section 7.15 Notices. Any notice or demand required by this Agreement to be
given or made by the Warrant Agent or by the registered holder of any Warrant
Certificate to or on the Company shall be sufficiently given or made if sent by
certified mail, postage prepaid, addressed (until another address is filed in
writing by the Company with the Warrant Agent), as follows:
International Sports Wagering Inc.
000 Xxxxx Xxxxx Xxxx
Xxxxxx Xxxxx, Xxx Xxxxxx 00000
Attn: Xxxxx Xxxxxx,
Chairman of the Board
Any notice or demand required by this Agreement to be given or made by the
registered holder of any Warrant Certificate or by the Company to or on the
Warrant Agent shall be sufficiently given or made if sent by certified mail,
postage prepaid, addressed (until another address is filed in writing with the
Company by the Warrant Agent), as follows:
- 20 -
American Stock Transfer & Trust Company
[TO BE SUPPLIED]
Any notice or demand required by this Agreement to be given or made by the
Company or the Warrant Agent 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 mail, postage prepaid, addressed to
such registered holder at his last address as shown on the books of the Company
maintained by the Warrant Agent. Otherwise such notice or demand shall be deemed
given when received by the party entitled thereto.
Section 7.16 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 Section 3.1 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.
Section 7.17 Governing Law. The laws of the State of New York shall govern
this Warrant Agreement and the Warrant Certificates.
Section 7.18 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, the Warrant Agent, 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
the Warrant Agent and their respective successors, and the registered holders of
the Warrant Certificates.
Section 7.19 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.
Section 7.20 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.
- 21 -
Section 7.21 Conflict of Interest. The Warrant Agent and any shareholder,
director, officer or employee of the Warrant Agent may buy, sell or deal in any
of the Warrant Certificates or other securities of the Company or become
pecuniarily interested in any transaction in which the Company may be
interested, or contract with or lend money to the Company or otherwise act as
fully and freely as though the Warrant Agent were not Warrant Agent under this
Agreement. Nothing herein shall preclude the Warrant Agent from acting in any
other capacity for the Company, including without limitation as trustee under
any indenture or as transfer agent for the Units, Common Stock or any other
securities of the Company, or for any other legal entity.
Section 7.22 Availability of the Agreement. The Warrant Agent shall keep
copies of this Agreement available for inspection by holders of Warrants during
normal business hours at its Corporate Trust Department. Copies of this
Agreement may be obtained upon written request addressed to:
International Sports Wagering Inc.
000 Xxxxx Xxxxx Xxxx
Xxxxxx Xxxxx, Xxx Xxxxxx 00000
- 22 -
IN WITNESS WHEREOF, this Agreement has been duly executed by the parties
hereto as of the day and year first above written.
INTERNATIONAL SPORTS WAGERING INC.
By:_______________________________________
Name:
Title:
AMERICAN STOCK TRANSFER & TRUST COMPANY
By:_______________________________________
Name:
Title:
- 23 -
Exhibit A
[FORM OF PUBLIC WARRANT CERTIFICATE]
Warrants
CUSIP No.
INTERNATIONAL SPORTS WAGERING INC.
COMMON STOCK PURCHASE WARRANT CERTIFICATE
NOT EXERCISABLE BEFORE 9:30 A.M.,
NEW YORK CITY TIME, ON [TWO YEARS AFTER
EFFECTIVE DATE] 1998 OR AFTER 5:00 P.M.,
NEW YORK CITY TIME, ON
[THE EFFECTIVE DATE] 2001
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, par value
$0.001 per share (the "Common Stock"), of International Sports Wagering Inc., a
Delaware corporation (the "Company"), at the initial exercise price (the
"Exercise Price") of $__________, at any time after the shares of Common Stock
issuable upon exercise of the Warrants evidenced hereby have been registered
under the Securities Act of 1933, as amended, or such other action as may be
required by federal or state law relating to the issuance or distribution of
securities shall have been taken, but not before 9:30 A.M., New York City time,
on [two years after effective date], 1998, or such earlier date (i) as
Barington Capital Group, L.P. (the "Barington") may determine or (ii) 30 days
after the Company may determine at any time after one year, provided, that the
last sale price of the Units has been at least 200% of the initial Unit
offering price for a period of 15 consecutive trading days ending
within 15 days of such Company determination or after the Expiration Date
hereinafter referred to, by surrendering this Warrant Certificate, with the
Form of Election to Purchase on the reverse side hereof duly executed at the
office maintained pursuant to the Warrant Agreement hereinafter referred to
for that purpose to American Stock Transfer & Trust Company, or its successor
as warrant agent (any such warrant agent being herein called the "Warrant
Agent"), 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 order of the Company.
The Warrants have been issued pursuant to a public offering of Units (the
"Units"), each Unit consisting of one share of Common Stock and one Warrant. The
shares of Common Stock and the Warrants included in each Unit shall not be
separable until two years following the date of issuance, or such shorter period
as the Representatives shall
determine (the "Separation Date").
Upon certain events provided for in the Warrant Agreement hereinafter
referred to, the Exercise Price and the number of shares of Common Stock
issuable upon the exercise of each Warrant are required to be adjusted.
The Warrants, or any portion thereof, are subject to call for redemption by
the Company at a call price of $0.05 per Warrant, at any time after the
Separation Date, provided that the Current Market Price (as defined in the
Warrant Agreement) per share of the Common Stock shall have been greater than or
equal to 200% of the initial Unit offering price for a period of 15 consecutive
trading days ending within 30 days of the date that the notice of such call (the
"Call Notice") is given by the Company to the Warrant Agent.
No Warrant may be exercised after 5:00 P.M., New York City time, on the
expiration date (the "Expiration Date") which will be the earlier of [the
effective date], 2001, and the business day next preceding the call date
specified in the Call Notice. All Warrants evidenced hereby shall thereafter
become void.
Prior to the Expiration Date, subject to any applicable laws, rules or
regulations restricting transferability and to any restriction on
transferability that may appear on this Warrant Certificate in accordance with
the terms of the Warrant Agreement hereinafter referred to, the Registered
Holder shall be entitled to transfer this Warrant Certificate in whole or in
part upon surrender of this Warrant Certificate at the office of the Warrant
Agent maintained for that purpose with the Form of Assignment on the reverse
side hereof duly executed, with signatures guaranteed by a member firm or a
national securities exchange, a commercial bank or a trust company located in
the United States, or a member of the National Association of Securities
Dealers, Inc., or other eligible guarantor institution which is a participant in
a signature guarantee program (as such terms are defined in Reg. 240.17Ad-15
under the Securities Exchange Act of 1934, as amended) acceptable to the Warrant
Agent. Upon any such transfer, a new Warrant Certificate or Warrant Certificates
representing the same aggregate number of Warrants will be issued in accordance
with instructions in the form of assignment.
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.
- 2 -
No fractional shares will be issued upon the exercise of Warrants. As to
any final fraction of a share which the Registered Holder of one or more Warrant
Certificates, the rights under which are exercised in the same transaction,
would otherwise be entitled to purchase upon such exercise, the Company shall
pay the cash value thereof determined as provided in the Warrant Agreement.
This Warrant Certificate is issued under and in accordance with the Warrant
Agreement dated as of ________, 1996, between the Company and the Warrant Agent
(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.
This Warrant Certificate shall not be valid for any purpose until it shall
have been countersigned by the Warrant Agent.
- 3 -
IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to be
duly executed under its facsimile Corporate Seal.
INTERNATIONAL SPORTS WAGERING
INC.
By:______________________________________
Seal
Attest:
_______________________________________
Countersigned: AMERICAN STOCK TRANSFER &
TRUST COMPANY, as Warrant Agent
Dated:____________________________ By:_______________________________________
- 4 -
FORM OF
ELECTION TO PURCHASE
The undersigned hereby irrevocably elects to excercise ______ of the
Warrants represented by this Warrant Certificate and to purchase the shares of
Common Stock issuable upon the excercise 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)
at______________________________________________________________________________
(ADDRESS, INCLUDING ZIP CODE)
If the number of Warrants hereby excercised 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 excercised 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 in United States currency
to the order of the Company.
- 5 -
IMPORTANT: PLEASE COMPLETE THE FOLLOWING:
1. The exercise of this Warrant was solicited by the Underwriter / /
2. The exercise of this Warrant was solicited by ________________ / /
3. If the exercise of this Warrant was not solicited, please check the
following box. / /
Dated:___________________________________
_________________________________ ___________________________________
(Insert Social Security or (Signature of registered
other identifying number holder)
of holder)
___________________________________
(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.
- 6 -
FORM OF
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto the Assignee named below all of the rights of the undersigned represented
by the within Warrant Certificate, with respect to the number of Warrants set
forth below:
Name of Assignee Address No. of Warrants
---------------- ------- ---------------
and does hereby irrevocably constitute and appoint Attorney to make such
transfer on the books of International Sports Wagering Inc. maintained for that
purpose, with full power of substitution in the premises.
Dated:__________, 19__.
_____________________________________ ___________________________________
(Insert Social Security or Signature
other identifying number
of holder)
(Signature must conform in all
respects to name of holder as
specified on the face of the
Warrant Certificate.)
Signature Guaranteed:
- 7 -
Exhibit B
[FORM OF REPRESENTATIVE'S WARRANT CERTIFICATE]
No.________ _________ Warrants
INTERNATIONAL SPORTS WAGERING INC.
COMMON STOCK PURCHASE WARRANT CERTIFICATE
NOT EXERCISABLE BEFORE 9:30 A.M.,
NEW YORK CITY TIME, ON [TWO YEARS AFTER
EFFECTIVE DATE] 1998, OR AFTER 5:00 P.M.
NEW YORK CITY TIME, ON [THE EFFECTIVE DATE], 2001
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, par value
$0.001 per share (the "Common Stock"), of INTERNATIONAL SPORTS WAGERING INC., a
Delaware corporation (the "Company"), at the initial exercise price (the
"Exercise Price") of $_____, at any time after the shares of Common Stock
issuable upon exercise of the Warrants evidenced hereby have been registered
under the Securities Act of 1933, as amended, or such other action as may be
required by federal or state law relating to the issuance or distribution of
securities shall have been taken, but not before 9:30 A.M., New York City time,
on [two years after the effective date], 1998, or such earlier date (i) as
Barington Capital Group, L.P. may determine or (ii) 30 days
after the Company may determine at any time after one year, provided, that the
last sale price of the Units has been at least 200% of the initial Unit
offering price for a period of 15 consecutive trading days ending
within 15 days of such Company determination or 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 office
maintained pursuant to the Warrant Agreement hereinafter referred to for that
purpose to American Stock Transfer & Trust Company, or its successor as warrant
agent (any such warrant agent being herein called the "Warrant Agent"), 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 order of the Company.
Upon certain events provided for in the Warrant Agreement hereinafter
referred to, the Exercise Price and the number of shares of Common Stock
issuable upon the exercise of each Warrant are required to be adjusted.
No Warrant may be exercised after 5:00 P.M., New York City time, on the
expiration date (the "Expiration Date") which will be [THE EFFECTIVE DATE],
2001. All Warrants evidenced hereby shall thereafter become void.
Prior to the Expiration Date, subject to any applicable laws, rules or
regulations restricting transferability and to any restriction on
transferability that may appear on this Warrant Certificate in accordance with
the terms of the Warrant Agreement hereinafter referred to, the Registered
Holder shall be entitled to transfer this Warrant Certificate in whole or in
part upon surrender of this Warrant Certificate at the office of the Warrant
Agent maintained for that purpose with the Form of Assignment set forth hereon
duly executed, with signatures guaranteed by a member firm of a national
securities exchange, a commercial bank or a trust company located in the United
States, or a member of the National Association of Securities Dealers, Inc., or
other eligible guarantor institution which is a participant in a signature
guarantee program (as such terms are defined in Reg. 240.17Ad-15 under the
Securities Exchange Act of 1934, as amended) acceptable to the Warrant Agent.
Upon any such transfer, a new Warrant Certificate or Warrant Certificates
representing the same aggregate number of Warrants will be issued in accordance
with instructions in the form of assignment.
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.
No fractional shares will be issued upon the exercise of Warrants. As to
any final fraction of a share which the Registered Holder of one or more Warrant
Certificates, the rights under which are exercised in the same transaction,
would otherwise be entitled to purchase upon such exercise, the Company shall
pay the cash value thereof determined as provided in the Warrant Agreement
hereinafter referred to.
This Warrant Certificate is issued under and in accordance with the Warrant
Agreement, dated as of ____________, 1996, between the Company and the Warrant
Agent (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.
This Warrant Certificate shall not be valid for any purpose until
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it shall have been countersigned by the Warrant Agent.
IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to be
duly executed under its facsimile Corporate Seal.
INTERNATIONAL SPORTS WAGERING INC.
By:_________________________________________
Attest:_____________________________________
__________________________________________
Seal
Countersigned:
as Warrant Agent
AMERICAN STOCK TRANSFER & TRUST
COMPANY, as Warrant Agent
Dated:__________________ By:_______________________________________
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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 request 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)
at______________________________________________________________________________
(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 in United States
currency to the order of the Company.
IMPORTANT: PLEASE COMPLETE THE FOLLOWING:
1. The exercise of this Warrant was solicited by the Underwriter / /
2. The exercise of this Warrant was solicited by ______________ / /
3. If the exercise of this Warrant was not solicited, please check the
following box. / /
Dated:___________________
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______________________________________
(Signature of registered holder)
______________________________________
(Insert Social Security or
other identifying number of
holder)
______________________________________
(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.
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FORM OF
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto the Assignee named below all of the rights of the undersigned represented
by the within Warrant Certificate, with respect to the number of Warrants set
forth below:
Name of Assignee Address No. of Warrants
---------------- ------- ---------------
and does hereby irrevocably constitute and appoint ________________________
Attorney to make such transfer on the books of INTERNATIONAL SPORTS WAGERING
INC. maintained for that purpose, with full power of substitution in the
premises.
Dated:_________ 19__.
_______________________________
Signature
________________________________
(Insert Social Security or other
identifying number of holder)
(Signature must conform in all
respects to name of holder as
specified on the face of the
Warrant Certificate.)
