WARRANT AGREEMENT
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WESTERN COUNTRY CLUBS, INC.
AND
AMERICAN SECURITIES TRANSFER & TRUST, INC.
Warrant Agent
______________, 1997
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THIS AGREEMENT (the "Agreement") is dated as of ______________, 1997,
between WESTERN COUNTRY CLUBS, INC., a Colorado corporation (the "Company"), and
AMERICAN SECURITIES TRANSFER & TRUST, INC., a Colorado corporation (the "Warrant
Agent").
WHEREAS, the Company proposes to offer to the public up to 460,000
shares of Series A Cumulative Convertible Redeemable Preferred Stock (the
"Series A Preferred Stock") and 1,380,000 Series A Common Stock Purchase
Warrants (the "Warrants"), each of which is exercisable to purchase shares of
Common Stock on the basis of one Warrant to purchase one share of Common Stock;
WHEREAS, upon exercise of the Representative's Purchase Option, the
Company further proposes to issue 120,000 warrants (the "National Warrants") to
National Securities Corporation ("National") or its designees;
WHEREAS, the Company desires to provide for issuance of warrant
certificates (the "Warrant Certificates") representing the Warrants and the
National Warrants; and
WHEREAS, the Company desires the Warrant Agent to act on behalf of the
Company, and the Warrant Agent is willing so to act, in connection with the
issuance, registration, transfer and exchange of Warrant Certificates and
exercise of the Warrants and the National Warrants,
NOW, THEREFORE, in consideration of the promises and the mutual
agreements hereinafter set forth, it is agreed that:
1. Warrants/Warrant Certificates. Each Warrant will entitle the
registered holder of such Warrant to purchase from the Company one share of
Common Stock at $______ per share (the "Exercise Price"). Each National Warrant
will entitle the registered holder of such National Warrant ("National Warrant
Holder") to
purchase from the Company one share of Common Stock at $______ per share (the
"National Exercise Price"). Hereinafter, unless the context indicates otherwise,
as used herein the words "Registered Warrant Holders" will mean the holders of
the Warrants and the National Warrants, the word "Warrants" will mean the
Warrants and the National Warrants and the words "Warrant Shares" will mean the
Company's securities issuable upon exercise of the Warrants. Unless changed
pursuant to Section 8 hereof, the Warrant Shares will consist of the Company's
Common Stock. A copy of the form of Warrant Certificate for the Warrants is
attached hereto as Exhibit A and a copy of the form of Warrant Certificate for
the National Warrants is attached hereto as Exhibit B.
Warrant Certificates representing the right to purchase Warrant
Shares shall be executed by the Company's President and attested to by the
Company's Secretary or Assistant Secretary and delivered to the Warrant
Agent upon execution of this Agreement. The Warrant Certificates shall be
distributed to the purchasers of Warrants in the Company's public
offering pursuant to Registration Statement No. 333-21547.
Subject to the provisions of Sections 3, 5, 6,7 and 8, the
Warrant Agent shall deliver Warrant Certificates in required whole number
denominations to Registered Holders in connection with any transfer or exchange
permitted under this Agreement. No Warrant Certificates shall be issued except
(i) Warrant Certificates initially issued hereunder, (ii) Warrant Certificates
issued on or after the initial issuance date, upon the exercise of any Warrants,
to evidence the unexercised Warrants held by the exercising Registered Holder,
and (iii) Warrant Certificates issued after the initial issuance date, upon any
transfer or exchange of Warrant Certificates or replacements of lost or
mutilated Warrant Certificates.
2. Form and Execution of Warrant Certificates. The Warrant
Certificates shall be substantially in the form attached as Exhibits A and B.
The Warrant Certificates shall be dated as of the date of their issuance,
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whether on initial issuance, transfer or exchange or in lieu of mutilated, lost,
stolen or destroyed Warrant Certificates.
Each such Warrant Certificate shall be numbered serially with the
letter "W" appearing on each Warrant Certificate.
The Warrant Certificates shall be manually countersigned by the
Warrant Agent and shall not be valid for any purpose unless so countersigned. In
the event any officer of the Company who executed the Warrant Certificates shall
cease to be an officer of the Company before the date of issuance of the Warrant
Certificates or before countersignature and delivery by the Warrant Agent, such
Warrant Certificates may be countersigned, issued and delivered by the Warrant
Agent with the same force and effect as though the person who signed such
Warrant Certificates had not ceased to be an officer of the Company.
3. Exercise. Subject to the provisions of Sections 4, 7 and 8, the
Warrants, when evidenced by a Warrant Certificate, may be exercised at a price
(the "Exercise Price") set forth in Section 1 hereof, on the basis of one
Warrant for one share of Common Stock in whole or in part at any time during the
period (the "Exercise Period") commencing on _______,1997, or earlier if so
determined by National (the "Initial Exercise Date") and terminating on
______________, 2002 (the "Expiration Date"), unless extended by a majority vote
of the Company's Board of Directors at its discretion. Notwithstanding the
foregoing, the National Warrants will be exercisable commencing on the date of
their issuance and terminating on the Expiration Date. The Company shall
promptly notify the Warrant Agent of any such extension of the Exercise Period
of the Warrants. A Warrant shall be deemed to have been exercised immediately
prior to the close of business on the date (the "Exercise Date") of the
surrender for exercise of the Warrant Certificate. The exercise form shall be
executed by the Registered Holder thereof or his attorney duly authorized in
writing and will be delivered together with payment to the Warrant Agent at 0000
Xxxxxxxx Xxxxxx, Xxxxx 000, Xxxxxx, XX 00000 (the "Corporate Office"), in cash
or by official bank or certified check, of an amount equal to the aggregate
Exercise Price, in lawful money of the United States of America.
Unless Warrant Shares may not be issued as provided herein, the
person entitled to receive the number of Warrant Shares deliverable on such
exercise shall be treated for all purposes as the holder of such Warrant Shares
as of the close of business on the Exercise Date. In addition, the Warrant Agent
shall also, at such time, verify that all of the conditions precedent to the
issuance of Warrant Shares set forth in Section 4 are satisfied as of the
Exercise Date. If any one of the conditions precedent set forth in Section 4 is
not satisfied as of the Exercise Date, the Warrant Agent shall request written
instructions from the Company as to whether to return the Warrant and Exercise
Price to the exercising Registered Holder or to hold the same until all such
conditions have been satisfied. The Company shall not be obligated to issue any
fractional share interests in Warrant Shares issuable or deliverable on the
exercise of any Warrant or scrip or cash therefor and such fractional shares
shall be of no value whatsoever. If more than one Warrant shall be exercised at
one time by the same Registered Holder, the number of full Warrant Shares which
shall be issuable on exercise thereof shall be computed on the basis of the
aggregate number of full Warrant Shares issuable on such exercise.
Within thirty days after the Exercise Date and in any event prior
to the pertinent Expiration Date, pursuant to a Stock Transfer Agreement between
the Company and theWarrant Agent, the Warrant Agent shall cause to be issued and
delivered to the person or persons entitled to receive the same, a certificate
or certificates for the number of Warrant Shares deliverable on such exercise.
No adjustment shall be made in respect of cash dividends on Warrant Shares
delivered on exercise of any Warrant. The Warrant Agent shall promptly notify
the Company in writing of any exercise and of the number of Warrant Shares
delivered and shall cause payment of an amount in cash equal to the Exercise
Price to be promptly made to the order of the Company.
Expenses incurred by the Warrant Agent while acting in the
capacity as Warrant Agent will be paid by the Company. These expenses, including
delivery of exercised share certificates to the shareholder, will be deducted
from the exercise fee submitted prior to distribution of funds to the Company.
A detailed accounting statement relating to the number of
Warrants exercised and the net amount of exercised funds remitted will be given
to the Company with the payment of each exercise amount. This will serve as an
interim accounting for the Company's use during the Exercise Period. A complete
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accounting will be made by the Warrant Agent to the Company concerning all
persons exercising Warrants, the number of Warrant Shares issued and the amounts
paid at the completion of the Exercise Period.
The Company may deem and treat the Registered Holder of the
Warrants at any time as the absolute owner thereof for all purposes, and the
Company shall not be affected by any notice to the contrary. The Warrants shall
not entitle the holder thereof to any of the rights of shareholders or to any
dividend declared on the Common Stock unless the holder shall have exercised the
Warrants and purchased the Warrant Shares prior to the record date fixed by the
Board of Directors of the Company for the determination of holders of Common
Stock entitled to such dividend or other right.
4. Reservation of Shares and Payment of Taxes. The Company
covenants that it will at all times reserve and have available from its
authorized Common Stock such number of Warrant Shares as shall then be issuable
on the exercise of all outstanding Warrants. The Company covenants that all
Warrant Shares which shall be so issuable shall be duly and validly issued,
fully paid and nonassessable, and free from all taxes, liens and charges with
respect to the issue thereof.
The Company and the Warrant Agent acknowledge that the Company
will be required, pursuant to the Securities Act of 1933, as amended (the
"Act"), to deliver to each Registered Holder, upon the exercise of Warrants and
delivery of Warrant Shares, a prospectus covering the issuance of the Warrant
Shares which meets the requirements of the Act, which prospectus must be a part
of an effective registration statement under the Act at the time that the
Warrants are exercised.
The Company agrees to use its best efforts to maintain, to the
extent required by the Act, a currently effective registration statement under
the Act covering the issuance of the Warrant Shares during the period the
Warrants are exercisable. The Company further agrees, from time to time, to
furnish the Warrant Agent with copies of the Company's prospectus to be
delivered to exercising Registered Holders, as set forth above. If any Warrant
Shares require any other registration with or approval of any government
authority under any federal or state law before such Warrant Shares may be
validly issued or delivered, then the Company covenants that it will in good
faith and as expeditiously as possible endeavor to secure such registration or
approval, as the case may be. No Warrant Shares shall be issued unless and until
any such registration requirements have been satisfied.
The Company shall have the authority to suspend the exercise of
all Warrants, until such registration or approval shall have been obtained; but
all Warrants, the exercise of which are requested during any such suspension,
shall be exercisable at the Exercise Price. If any such period of suspension
continues past the Expiration Date, all Warrants, the exercise of which have
been requested on or prior to the Expiration Date, shall be exercisable upon the
removal of such suspension until the close of the business day immediately
following the expiration of such suspension.
The Registered Holder shall pay all documentary, stamp or similar
taxes and other government charges that may be imposed with respect of the
issuance of the Warrants, or the issuance, transfer or delivery of any Warrant
Shares on exercise of the Warrants. In the event the Warrant Shares are to be
delivered in a name other than the name of the Registered Holder of the Warrant
Certificate, no such delivery shall be made unless the person requesting the
same has paid to the Warrant Agent the amount of any such taxes or charges
incident thereto.
In the event the Warrant Agent ceases to also serve as the stock
transfer agent for the Company, the Warrant Agent is irrevocably authorized to
requisition the Company's new transfer agent from time to time for Certificates
of Warrant Shares required upon exercise of the Warrants, and the Company will
authorize such transfer agent to comply with all such requisitions. The Company
will file with the Warrant Agent a statement setting forth the name and address
of its new transfer agent, for shares of Common Stock or other capital stock
issuable upon exercise of the Warrants and of each successor transfer agent.
5. Registration of Transfer. Other than as provided below with
respect to the National Warrants, the Warrant Certificates may be transferred in
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whole or in part. Warrant Certificates to be exchanged shall be surrendered to
the Warrant Agent at its Corporate Office. The Company shall execute and the
Warrant Agent shall countersign, issue and deliver in exchange therefor the
Warrant Certificate or Certificates which the holder making the transfer shall
be entitled to receive.
The National Warrants may not be sold, transferred, assigned,
pledged, or hypothecated until __________, 1998 except to officers of National,
except to the underwriters of the Company's public offering pursuant to
Registration Statement No. 333-21547, and except by will or operation of law.
After such date, the National Warrants may be sold, transferred, assigned,
pledged, or hypothecated provided that any such transaction is in accordance
with the registration or exemption from registration provisions of the Act and
any applicable state securities laws. If the National Warrants are exercised by
___________, 1998, then any Warrant Shares acquired as a result of any such
exercise may not be sold, transferred, assigned, pledged, or hypothecated until
__________, 1998, except to officers of National, except to the underwriters of
the Company's public offering pursuant to Registration Statement No. 333-21547,
and except by will or operation of law.
The Warrant Agent shall keep transfer books at its Corporate
Office which shall register Warrant Certificates and the transfer thereof. On
due presentment for registration of transfer of any Warrant Certificate at such
office, the Company shall execute and the Warrant Agent shall issue and deliver
to the transferee or transferees a new Warrant Certificate or Certificates
representing an equal aggregate number of Warrants. All Warrant Certificates
presented for registration of transfer or exercise shall be duly endorsed or be
accompanied by a written instrument or instruments of transfer in form
satisfactory to the Company and the Warrant Agent. At the time of exercise, the
transfer fee shall be paid by the Holder. The Company may require payment of a
sum sufficient to cover any tax or other government charge that may be imposed
in connection therewith.
All Warrant Certificates so surrendered, or surrendered for
exercise, or for exchange in case of mutilated Warrant Certificates, shall be
promptly cancelled by the Warrant Agent and thereafter retained by the Warrant
Agent until termination of the agency created by this Agreement. Prior to due
presentment for registration of transfer thereof, the Company and the Warrant
Agent may treat the Registered Holder of any Warrant Certificate as the absolute
owner thereof (notwithstanding any notations of ownership or writing thereon
made by anyone other than the Company or the Warrant Agent), and the parties
hereto shall not be affected by any notice to the contrary.
6. Loss or Mutilation. On receipt by the Company and the Warrant Agent
of evidence satisfactory as to the ownership of and the loss, theft, destruction
or mutilation of any Warrant Certificate, the Company shall execute, and the
Warrant Agent shall countersign and deliver in lieu thereof, a new Warrant
Certificate representing an equal aggregate number of Warrants. In the case of
loss, theft or destruction of any Warrant Certificate, the individual requesting
issuance of a new Warrant Certificate shall be required to indemnify the Company
and Warrant Agent in an amount satisfactory to each of them. In the event a
Warrant Certificate is mutilated, such Certificate shall be surrendered and
cancelled by the Warrant Agent prior to delivery of a new Warrant Certificate.
Applicants for a new Warrant Certificate shall also comply with such other
regulations and pay such other reasonable charges as the Company may prescribe.
7. Redemption of Warrants. (a) Commencing on ____________, 1998, the
Warrants are subject to redemption by the Company at $.05 per Warrant on not
less than 30 days' prior written notice to the holders of Warrants, provided
that the daily trading price per share of Common Stock has been at least $______
(200% of the closing bid price for the Company's Common Stock on the effective
date of Registration Statement No. 333-21547) for a period of at least ten
consecutive trading days ending within ten days prior to the date upon which the
notice of redemption is given. For purposes of determining the daily trading
price of the Company's Common Stock, (i) if the Common Stock is listed on a
national securities exchange, is admitted to unlisted trading privileges on a
national securities exchange, or is quoted on a trading system of the National
Association of Securities Dealers, Inc. such as the NASDAQ Small Cap Market or
the NASDAQ/NMS, then the last reported sale price of the Common Stock on such
exchange or system each day shall be used, but if no such sale has occurred on
such day or if the last sale price is not reported, then the average of the
closing bid prices for the Common Stock for such day on such exchange or system
shall be used; or (ii) if the Common Stock is not then traded on any such
exchange or system, then the average of the daily bid prices for the Company's
Common Stock reported by the National Quotation Bureau, Inc. each day shall be
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used if the Company's Common Stock is included in the National Quotation System.
The Warrants will be exercisable until the close of the business day preceding
the date fixed for redemption, if any. Notwithstanding the foregoing, the
Company will not be entitled to call any of the Warrants for redemption or
redeem any of the Warrants at a time when the Warrants are not exercisable
because the Company has not maintained a current registration statement as
described in Section 4 hereof. On the redemption date, the Warrant Holders of
record of redeemed Warrants shall be entitled to payment of the Redemption price
upon surrender of such redeemed Warrants to the Company at the principal office
of the Warrant Agent.
(b) Notice of redemption of any Warrants shall be given by mailing, by
registered or certified mail, return receipt requested, a copy of such notice to
all of the affected Warrant Holders of record as of two days prior to the
mailing date at their respective addresses appearing on the books or transfer
records of the Company or such other address designated in writing by the
Warrant Holder of record to the Warrant Agent not less than seventy-five (75)
days prior to the redemption date and shall be effective upon receipt.
(c) Notwithstanding any other provision of this Agreement, from and
after the redemption date, all rights of the affected Warrant Holders (except
the right to receive the Redemption Price) shall terminate, but only if (i) on
or prior to the redemption date the Company shall have irrevocably deposited
with the Warrant Agent, as paying agent, a sufficient amount to pay on the
redemption date the Redemption Price for all Warrants called for redemption and
(ii) the notice of redemption shall have stated the name and address of the
Warrant Agent and the intention of the Company to deposit such amount with the
Warrant Agent on or before the redemption date.
(d) The Warrant Agent shall pay to the Warrant Holders of record of
redeemed Warrants all monies received by the Warrant Agent for the redemption of
Warrants to which the Warrant Holders of record of such redeemed Warrants are
entitled under the provisions of this Agreement.
(e) Any amounts deposited with the Warrant Agent which are not required
for redemption of the Warrants may be withdrawn by the Company. Any amounts
deposited with the Warrant Agent which shall be unclaimed after six (6) months
after the redemption date may be withdrawn by the Company, and thereafter the
Warrant Holders of the Warrants called for redemption for which such funds were
deposited shall look solely to the Company for payment. The Company shall be
entitled to the interest , if any, on funds deposited with the Warrant Agent,
and the Warrant Holders of redeemed Warrants shall have no right to any such
interest.
(f) If the Company fails to make a sufficient deposit with the Warrant
Agent as provided above, the Warrant Holders of any Warrants called for
redemption may at the option of the Warrant Holder (i) by notice to the Company
declare the notice of redemption a nullity, or (ii) maintain an action against
the Company for the Redemption Price. If the Warrant Holder brings such an
action the Company will pay reasonable attorneys' fees of the Warrant Holder. If
the Warrant Holder fails to bring an action against the Company for Redemption
Price within ninety (90) days after the redemption date, the Warrant holder
shall be deemed to have elected to declare the notice of redemption to be a
nullity and such notice shall be without any force or effect.
8. Adjustment of Exercise Price and Warrant Shares. After each
adjustment of the Exercise Price pursuant to this Section 8, the number of
Warrant Shares purchasable upon the exercise of each Warrant shall be the number
receivable upon exercise thereof prior to such adjustment multiplied by a
fraction, the numerator of which shall be the original Exercise Price as defined
in Section 3 above and the denominator of which shall be such adjusted Exercise
Price. The Exercise Price shall be subject to adjustment as set forth below:
(a)(i)In case the Company shall hereafter (A) pay a dividend or
make a distribution on its Common Stock in shares of its capital stock (whether
shares of Common Stock or of capital stock of any other class), (B) subdivide
its outstanding shares of Common Stock, (C) combine its outstanding shares of
Common Stock into a smaller number of shares, or (D) issue by reclassification
of its shares of Common Stock any shares of capital stock of the Company, the
Exercise Price in effect immediately prior to such action shall be adjusted so
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that the Registered Holder of any Warrant thereafter exercised shall be entitled
to receive the number of shares of capital stock of the Company which he would
have owned immediately following such action had such Warrant been exercised
immediately prior thereto. An adjustment made pursuant to this subsection shall
become effective immediately after the record date in the case of a dividend and
shall become effective immediately after the effective date in the case of a
subdivision, combination or reclassification. If, as a result of an adjustment
made pursuant to this subsection, the Registered Holder of any Warrant
thereafter exercised shall become entitled to receive shares of two or more
classes of capital stock of the Company, the Board of Directors (whose
determination shall be conclusive and shall be described in a statement filed
with the Warrant Agent) shall determine the allocation of the adjusted Exercise
Price between or among shares of such classes of capital stock.
(ii)In any case in which this Section 8(a) shall require that an
adjustment to the Exercise Price be made immediately following a record date,
the Company may elect to defer (but only until five business days following the
filing by the Company with the Warrant Agent of the certificate of independent
public accountants described in subsection (i) of Section 8(d)) issuing to the
holder of any Warrants exercised after such record date the shares of Common
Stock and other capital stock of the Company issuable upon such exercise over
and above the shares of Common Stock and other capital stock of the Company
issuable upon such exercise on the basis of the Exercise Price prior to
adjustment.
(iii) No adjustment in the Exercise Price shall be required to
be made unless such adjustment would require an increase or decrease of at least
$.05; provided, however, that any adjustments which by reason of this subsection
are not required to be made shall be carried forward and taken into account in
any subsequent adjustment. All calculations under this Section 8 shall be made
to the nearest cent or to the nearest one tenth of a share, as the case may be,
but in no event shall the Company be obligated to issue fractional shares upon
the exercise of any Warrant.
(b) In case of any reclassification or change of Warrant Shares
(other than a change in par value or from par value to no par value or from no
par value to par value or as a result of a subdivision or combination), or in
case of any consolidation or merger of the Company with or into another
corporation (other than a merger with a Subsidiary in which merger the Company
is the continuing corporation and which does not result in any reclassification
or change of the then Warrant Shares (other than a change in par value or from
par value to no par value or from no par value to par value) or in the case of
any sale or conveyance to another corporation of the property of the Company as
an entirety or substantially as an entirety, then, as a condition of such
reclassification, change, consolidation, merger, sale or conveyance, the
Company, or such successor or purchasing corporation, as the case may be, shall
make lawful and adequate provision whereby the Registered Holder of each Warrant
then outstanding shall have the right thereafter to receive on exercise of such
Warrant the kind and amount of shares of stock and other securities and property
receivable upon such reclassification, change, consolidation, merger, sale or
conveyance by a holder of the number of Warrant Shares issuable upon exercise of
such Warrant immediately prior to such reclassification, change, consolidation,
merger, sale or conveyance and the Company or its successors shall forthwith
file at the Corporate Office of the Warrant Agent a statement setting forth such
provisions signed by (1) its Chairman of the Board or Vice Chairman of the Board
or President or a Vice President and (2) by its Treasurer or an Assistant
Treasurer or its Secretary or an Assistant Secretary evidencing such provisions.
Such provisions shall include provision for adjustments which shall be as nearly
equivalent as may be practicable to the adjustments provided for in Section
8(a). The above provisions of this Section 8(b) shall similarly apply to
successive reclassification and changes of Warrant Shares and to successive
consolidations, mergers, sales or conveyances.
(c) Before taking any action which could cause an adjustment
reducing the Exercise Price below the then par value of the Warrant Shares, the
Company will take any corporate action which may, in the opinion of its counsel,
be necessary in order that the Company may validly and legally issue fully paid
and nonassessable Warrant Shares at such adjusted Exercise Price.
(d)(i)Upon any adjustment of the Exercise Price required to be
made pursuant to this Section 8, the Company within 30 days thereafter shall (A)
cause to be filed with the Warrant Agent a certificate of a firm of independent
accountants setting forth the Exercise Price after such adjustment and setting
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forth in reasonable detail the method of calculation and the facts upon which
such calculation is based, which certificate shall be conclusive evidence of the
correctness of such adjustment, and (B) cause to be mailed to each of the
Registered Holders of the Warrant Certificates written notice of such
adjustment. Where appropriate, such notice may be given in advance and included
as a part of the notice required to be mailed under the provisions of subsection
8(d)(ii).
(ii) In case at any time:
(A) The Company shall declare any dividend upon
its Common Stock payable otherwise than in cash; or
(B) The Company shall offer for subscription to
the holders of its Common Stock any additional shares of stock of any class or
any other securities convertible into shares of stock or any rights to subscribe
thereto; or
(C) There shall be any capital reorganization or
reclassification of the capital stock of the Company, or a sale of all or
substantially all of the shares of the assets of the Company, or a consolidation
or merger of the Company with another corporation (other than a merger with a
subsidiary in which merger the Company is the continuing corporation and which
does not result in any reclassification or change of the then Warrant Shares
issuable upon exercise of the Warrants other than a change in par value or from
par value to no par value or from no par value to par value); or
(D) There shall be a voluntary or involuntary
dissolution, liquidation or winding up of the Company;
then, in any one or more of said cases, the Company shall cause to be mailed to
each of the Registered Holders of the Warrant Certificates, at the earliest
practicable time (and, in any event, not less than 20 days before any record
date or other date set for definitive action), written notice of the date on
which the books of the Company shall close or a record shall be taken for such
dividend, distribution or subscription rights or such reorganization,
reclassification, sale, consolidation, merger, dissolution, liquidation or
winding up shall take place, as the case may be. Such notice shall also set
forth such facts as shall indicate the effect of such action (to the extent such
effect may be known at the date of such notice) on the Exercise Price and the
kind and amount of the shares of stock and other securities and property
deliverable upon exercise of the Warrants. Such notice shall also specify the
date as of which the holders of the Common Stock of record shall participate in
said dividend, distribution or subscription rights or shall be entitled to
exchange their Common Stock for securities or other property deliverable upon
such reorganization, reclassification, sale, consolidation, merger, dissolution,
liquidation or winding up, as the case may be (on which date, in the event of
voluntary or involuntary dissolution, liquidation or winding up of the Company,
the right to exercise the Warrants shall terminate).
(iii) Without limiting the obligation of the Company to provide
notice to the Registered Holders of the Warrant Certificates of corporate
actions hereunder, is agreed that failure of the Company to give notice shall
not invalidate such corporate action of the Company.
9. Reduction in Exercise Price at Company's Option. In addition to
any adjustments made to the Exercise Price pursuant to Section 8, the Company's
Board of Directors may, at its sole discretion, reduce the Exercise Price of the
Warrants in effect at any time either for the life of the Warrants or any
shorter period of time determined by the Company's Board of Directors. The
Company shall promptly notify the Warrant Agent and the Registered Holders of
any such reductions in the Exercise Price.
10. Duties, Compensation and Termination of Warrant Agent. The
Warrant Agent shall act hereunder as agent and in a ministerial capacity for the
Company, and its duties shall be determined solely by the provisions hereof. The
Warrant Agent shall not, by issuing and delivering Warrant Certificates or by
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any other act hereunder, be deemed to make any representations as to the
validity, value or authorization of the Warrant Certificates or the Warrants
represented thereby or of the Warrant Shares or other property delivered on
exercise of any Warrant. The Warrant Agent shall not at any time be under any
duty or responsibility to any holder of the Warrant Certificates to make or
cause to be made any adjustment of the Exercise Price or to determine whether
any fact exists which may require any such adjustments.
The Warrant Agent shall not (i) be liable for any recital or
statement of fact contained herein or for any action taken or omitted by it in
reliance on any Warrant Certificate or other document or instrument believed by
it in good faith to be genuine and to have been signed or presented by the
proper party or parties, (ii) be responsible for any failure on the part of the
Company to comply with any of its covenants and obligations contained in this
Agreement except for its own negligence or willful misconduct, or (iii) be
liable for any act or omission in connection with this Agreement except for its
own negligence or willful misconduct.
The Company agrees to indemnify the Warrant Agent against any and
all losses, expenses and liabilities which the Warrant Agent may incur in
connection with the delivery of copies of the Company's prospectus to exercising
Registered Holders upon the exercise of any Warrants as set forth in Section 3.
The Warrant Agent may at any time consult with counsel
satisfactory to it (which may be counsel for the Company) and shall incur no
liability or responsibility for any action taken or omitted by it in good faith
in accordance with the opinion or advice of such counsel. Any notice, statement,
instruction, request, direction, order or demand of the Company shall be
sufficiently evidenced by an instrument signed by its President and attested by
its Secretary or Assistant Secretary. The Warrant Agent shall not be liable for
any action taken or omitted by it in accordance with such notice, statement,
instruction, request, order or demand.
The Company agrees to pay the Warrant Agent reasonable
compensation for its services hereunder and to reimburse the Warrant Agent for
its reasonable expenses as per the fee schedule attached hereto as Exhibit C.
The Company further agrees to indemnify the Warrant Agent against any and all
losses, expenses and liabilities, including judgments, costs and counsel fees,
for any action taken or omitted by the Warrant Agent in the execution of its
duties and powers hereunder, excepting losses, expenses and liabilities arising
as a result of the Warrant Agent's negligence or willful misconduct.
The Warrant Agent may resign its duties or the Company may
terminate the Warrant Agent and the Warrant Agent shall be discharged from all
further duties and liabilities hereunder (except liabilities arising as a result
of the Warrant Agent's own negligence or willful misconduct), on 30 days' prior
written notice to the other party. At least 15 days prior to the date such
resignation is to become effective, the Warrant Agent shall cause a copy of such
notice of resignation to be mailed to the Registered Holder of each Warrant
Certificate. On such resignation or termination the Company shall appoint 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 the resignation by
the Warrant Agent, then the registered holder of any Warrant Certificate may
apply to any court of competent jurisdiction for the appointment of a new
warrant agent.
After acceptance in writing of an appointment of a new warrant
agent is received by the Company, such new warrant agent shall be vested with
the same powers, rights, duties and responsibilities as if it had been
originally named herein as the Warrant Agent, without any further assurance,
conveyance, act or deed; provided, however, if it shall be necessary or
expedient to execute and deliver 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. The Company shall file a notice of appointment of a new
warrant agent with the resigning Warrant Agent and shall forthwith cause a copy
of such notice to be mailed to the Registered Holder of each Warrant
Certificate.
Any corporation into which the Warrant Agent or any new warrant
agent may be converted or merged, or any corporation resulting from any
consolidation to which the Warrant Agent or any new warrant agent shall be a
party, or any corporation succeeding to the corporate trust business of the
Warrant Agent shall be a successor Warrant Agent under this Agreement, provided
that such corporation is eligible for appointment as a successor to the Warrant
Agent under the provisions of the preceding paragraph. Any such successor
Warrant Agent shall promptly cause notice of its succession as Warrant Agent to
be mailed to the Company and to the Registered Holder of each Warrant
Certificate. No further action shall be required for establishment and
authorization of such successor warrant agent.
-9-
The Warrant Agent, its officers or directors and its subsidiaries
or affiliates may buy, hold or sell Warrants or other securities of the Company
and otherwise deal with the Company in the same manner and to the same extent
and with like effect as though it were not Warrant Agent. Nothing herein shall
preclude the Warrant Agent from acting in any other capacity for the Company or
for any other legal entity.
11. Modification of Agreement. The Warrant Agent and the Company
may by supplemental agreement make any changes or corrections in this Agreement
(i) that they shall deem appropriate to cure any ambiguity or to correct any
defective or inconsistent provision or mistake or error herein contained; or
(ii) that they may deem necessary or desirable and which shall not adversely
affect the interests of the holders of Warrant Certificates; provided, however,
this Agreement shall not otherwise be modified, supplemented or altered in any
respect except with the consent in writing of the Registered Holders of Warrant
Certificates representing not less than two-thirds of the Warrants outstanding.
Additionally, except as provided in Section 8, no change in the number or nature
of the Warrant Shares purchasable on exercise of a Warrant, increase in the
purchase price therefor, or the acceleration of the Expiration Date of a Warrant
shall be made without the consent in writing of the Registered Holder of the
Warrant Certificate representing such Warrant, other than such changes as are
specifically prescribed or allowed by this Agreement.
12. Notices. All notices, demands, elections, opinions or requests
(however characterized or described) required or authorized hereunder shall be
deemed given sufficiently if in writing and sent by registered or certified
mail, return receipt requested and postage prepaid, or by tested telex, telegram
or cable to, in the case of the Company:
Western Country Clubs, Inc.
0000 X.X. Xxxxxxxxxx, Xxxxx 0000
Xxxxxxxx Xxxx, XX 00000
with a copy to:
Xxxxxxx Xxxxxxxx & Xxxxxxxxx, P.C.
Mellon Financial Center
0000 Xxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
and in the case of the Warrant Agent:
American Securities Transfer and Trust, Inc.
0000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxx, XX 00000
and if to the Registered Holder of a Warrant Certificate, at the address of such
holder as set forth on the books maintained by the Warrant Agent.
13. Binding Agreement. This Agreement shall be binding upon and inure
to the benefit of the Company, the Warrant Agent and their respective successors
and assigns, and the holders from time to time of Warrant Certificates. Nothing
in this Agreement is intended or shall be construed to confer upon any other
person any right, remedy or claim or to impose on any other person any duty,
liability or obligation.
14. Further Instruments. The parties shall execute and deliver any
and all such other instruments and shall take any and all other actions as may
be reasonably necessary to carry out the intention of this Agreement.
15. Severability. If any provision of this Agreement shall be held,
declared or pronounced void, voidable, invalid, unenforceable, or inoperative
for any reason by any court of competent jurisdiction, government authority or
otherwise, such holding, declaration or pronouncement shall not affect adversely
any other provision of this Agreement, which shall otherwise remain in full
force and effect and be enforced in accordance with its terms, and the effect of
such holding, declaration or pronouncement shall be limited to the territory or
jurisdiction in which made.
16. Waiver. All the rights and remedies of either party under this
Agreement are cumulative and not exclusive of any other rights and remedies as
provided by law. No delay or failure on the part of either party in the exercise
-10-
of any right or remedy arising from a breach of this Agreement shall operate as
a waiver of any subsequent right or remedy arising from a subsequent breach of
this Agreement. The consent of any party where required hereunder to act or
occurrence shall not be deemed to be a consent to any other action or
occurrence.
17. General Provisions. This Agreement shall be construed and
enforced in accordance with, and governed by, the laws of the State of Colorado.
Except as otherwise expressly stated herein, time is of the essence in
performing hereunder. This Agreement embodies the entire agreement and
understanding between the parties and supersedes all prior agreements and
understandings relating to the subject matter hereof, and this Agreement may not
be modified or amended or any term or provisions hereof waived or discharged
except in writing signed by the party against whom such amendment, modification,
waiver or discharge is sought to be enforced. The headings of this Agreement are
for convenience in reference only and shall not limit or otherwise affect the
meaning hereof. This Agreement may be executed in any number of counterparts,
each of which shall be deemed an original, but all of which taken together shall
constitute one and the same instrument.
-11-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.
WESTERN COUNTRY CLUBS, INC.
ATTEST:
____________________________ By_________________________________
Xxxxxxx X. Xxxxxxxx, Secretary Xxxxx X. Xxxxxxxxx, President
AMERICAN SECURITIES TRANSFER AND
TRUST, INC.
Warrant Agent
By_________________________________
Xxxxxxx X. Xxxxxxxx, President
-12-
Exhibit A
WESTERN COUNTRY CLUBS, INC.
Incorporated Under the Laws of the State of Colorado
No. W- _____Series A Common Stock
Purchase Warrants
CUSIP 958054 11 6
CERTIFICATE FOR (See Reverse
SERIES A COMMON STOCK For Certain
PURCHASE WARRANTS Definitions)
This Warrant Certificate certifies that ___________________, or
registered assigns ("the Warrant Holder"), is the registered owner of the above
indicated number of Series A Common Stock Purchase Warrants (the "Warrants")
expiring on __________, 2002 (the "Expiration Date"). One Warrant entitles the
Warrant Holder to purchase one share of common stock ("Share") from Western
Country Clubs, Inc., a Colorado corporation (the "Company"), at a purchase price
of $____ (the "Exercise Price"), commencing on __________, 1997, and terminating
on the Expiration Date ("Exercise Period"), upon surrender of this Warrant
Certificate with the exercise form hereon duly completed and executed with
payment of the Exercise Price at the office of American Securities Transfer &
Trust, Inc. (the "Warrant Agent"), but only subject to the conditions set forth
herein and in a Warrant Agreement dated as of _________, 1997 (the "Warrant
Agreement") between the Company and the Warrant Agent. The Exercise Price, the
number of shares purchasable upon exercise of each Warrant, the number of
Warrants outstanding and the Expiration Date are subject to adjustments upon the
occurrence of certain events. The Warrant Holder may exercise all or any number
of Warrants. Reference hereby is made to the provisions on the reverse side of
this Warrant Certificate and to the provisions of the Warrant Agreement, all of
which are incorporated by reference in and made a part of this Warrant
Certificate and shall for all purposes have the same effect as though fully set
forth at this place.
Upon due presentment for transfer of this Warrant Certificate at the
office of the Warrant Agent, a new Warrant Certificate or Warrant Certificates
of like tenor and evidencing in the aggregate a like number of Warrants, subject
to any adjustments made in accordance with the provisions of the Warrant
Agreement, shall be issued to the transferee in exchange for this Warrant
Certificate, subject to the limitations provided in the Warrant Agreement, upon
payment of $_____ per Warrant Certificate and any tax or governmental charge
imposed in connection with such transfer.
The Warrant Holder of the Warrants evidenced by this Warrant Certificate
may exercise all or any whole number of such Warrants during the period and in
the manner stated hereon. The Exercise Price shall be payable in lawful money of
the United States of America and in cash or by
-1-
certified or bank cashier's check or bank draft payable to the order of the
Company. If upon exercise of any Warrants evidenced by this Warrant Certificate
the number of Warrants exercised shall be less than the total number of Warrants
so evidenced, there shall be issued to the Warrant Holder a new Warrant
Certificate evidencing the number of Warrants not so exercised.
Subject to the following paragraph, no Warrant may be exercised after
5:00 p.m. Mountain Time on the Expiration Date and any Warrant not exercised by
such time shall become void, unless extended by the Company.
Commencing on the date the Warrants are separately tradeable and
transferable, the Warrants are subject to redemption by the Company at $.05 per
Warrant, at any time commencing ________, 1998 (twelve months from the date of
Registration Statement No. 333-21547) and at any time prior to their expiration,
on not less than 30 days' prior written notice to the holders of Warrants,
provided that the daily trading price per share of Common Stock has been at
least $______ (200% of the closing bid price for the Company's Common Stock on
the effective date of Registraiton Statement No. 333-21547) for a period of at
least ten consecutive trading days ending within ten days prior to the date upon
which the notice of redemption is given. During the 30-day period immediately
following the giving of such notice, the Warrant Holders shall have the right to
exercise the Warrants so held by them. Upon expiration of such 30-day period,
all rights of the Warrant Holders shall terminate, other than the rights to
receive the redemption price, without interest, and the right to receive the
redemption price shall itself expire on the Warrant Expiration Date.
This Warrant Certificate shall not be valid unless countersigned by the
Warrant Agent.
IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by
its President and by its Secretary, each by a facsimile of his/her signature,
and has caused a facsimile of its corporate seal to be imprinted hereon.
Dated: ______________________
WESTERN COUNTRY CLUBS, INC.
_____________________________ By________________________________
Xxxxxxx X. Xxxxxxxx, Secretary Xxxxx X. Xxxxxxxxx, President
AMERICAN SECURITIES TRANSFER &
TRUST, INC.
Warrant Agent
By_________________________________
Xxxxxxx X. Xxxxxxxx, President
-2-
Form of Reverse Side of Warrant
This Warrant Certificate, when surrendered to the Warrant Agent at its
principal office by the Warrant Holder, in person or by attorney duly authorized
in writing, may be exchanged in the manner and subject to the limitations
provided in the Warrant Agreement, upon the payment of any tax or other
governmental charge imposed in connection with such exchange, for another
Warrant Certificate or Warrant Certificates of like tenor and evidencing a like
number of Warrants, subject to any adjustments made in accordance with the
provisions of the Warrant Agreement.
The Company and the Warrant Agent may deem and treat the registered
holder hereof as the absolute owner of this Warrant Certificate (notwithstanding
any notation of ownership or other writing hereon made by anyone) for all
proposes and neither the Company nor the Warrant Agent shall be affected by any
notice to the contrary. No Warrant Holder, as such, shall have any rights of a
holder of the Common Stock of the Company, either at law or at equity, and the
rights of the Warrant holder, as such, are limited to those rights expressly
provided in the Warrant Agreement and in the Warrant Certificate.
Under the Warrant Agreement the Exercise Price is subject to adjustment
if the Company shall effect any stock split or stock combination with respect to
the Common Stock. Any such adjustment of the Exercise Price will also result in
an adjustment of the number of shares of Common Stock purchasable upon exercise
of a Warrant or, if the Company should elect, an adjustment of each outstanding
Warrant into a different number of Warrants.
The Company shall not be required to issue fractions of Warrants upon
any such adjustment or to issue fractions of shares upon the exercise of any
Warrants upon any such adjustment, in accordance with the Warrant Agreement.
The Warrant Agreement is subject to amendment upon the approval of
holders of at least two-thirds of the outstanding Warrants as a group, except
that no such approval is required for the reduction of the Exercise Price or
extension of the Expiration Date. No amendment shall accelerate the Expiration
Date or increase the Exercise Price without the approval of all the holders of
all outstanding Warrants. A copy of the Warrant Agreement will be available at
all reasonable times at the office of the Warrant Agent for inspection by any
Warrant Holder. As a condition of such inspection, the Warrant Agent may require
any Warrant Holder to submit the Warrant Holder's Warrant Certificate for
inspection.
IMPORTANT: The Warrants represented by this Certificate may not be exercised by
a Warrant Holder unless at the time of exercise the underlying shares of Common
Stock are qualified for sale by registration or otherwise in the state where the
Warrant Holder resides or unless the issuance of the shares of Common Stock
would be exempt under the applicable state securities laws. Further, a
registration statement under the Securities Act of 1933, as amended, covering
the issuance of shares of Common Stock upon the exercise of this Warrant must be
in effect and current at the time of exercise unless the issuance of shares of
Common Stock upon any exercise is exempt from the registration requirements of
the Securities Act of 1933. Unless such registration statement is in effect and
current at the time of exercise, or unless such an exemption is available the
Company may decline to permit the exercise of this Warrant.
-3-
TRANSFER FEE $_____ PER CERTIFICATE
WESTERN COUNTRY CLUBS, INC.
The following abbreviations, when used in the inscription on the face of
this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT -
TEN ENT - as tenants by the entireties Custodian
---------------
JT TEN - as joint tenants with right (Cust) (Minor)
of survivorship and not as under Uniform Gifts
tenants in common to Minors Act _______
(State)
Additional abbreviations may also be used though not in the above list.
FORM OF ASSIGNMENT
(To Be Executed by the Registered Holder if the Registered Holder
Desires to Assign Series A Warrants Evidenced by the
Within Warrant Certificate)
FOR VALUE RECEIVED___________________ hereby sells, assigns and
transfers unto ____________________ Series A Warrants, evidenced by the within
Warrant Certificate, and does hereby irrevocably constitute and appoint ________
_______ Attorney to transfer the said Warrants evidenced by the within Warrant
Certificate on the books of the Company, with full power of substitution.
Dated: _________________ ________________________________
Signature
NOTICE: The above signature must correspond with the name as written upon the
face of the within Warrant Certificate in every particular, without
alteration or enlargement or any change whatsoever.
Signature Guaranteed: _________________________________________
-4-
FORM OF ELECTION TO PURCHASE
(To be Executed by the Holder if the Registered Holder Desires to
Exercise Warrants Evidenced by the Within Warrant Certificate)
To Western Country Clubs, Inc.:
The undersigned hereby irrevocably elects to exercise Series A Warrants,
evidenced by the within Warrant Certificate for, and to purchase thereunder,
full shares of Common Stock issuable upon exercise of said Warrants and delivery
of $ and any applicable taxes.
The undersigned requests that certificates for such shares be issued in
the name of:
PLEASE INSERT SOCIAL SECURITY OR
TAX IDENTIFICATION NUMBER
------------------------------- ---------------------------------
(Please print name and address)
------------------------------- ---------------------------------
------------------------------- ---------------------------------
If said number of Series A Warrants shall not be all the Warrants
evidenced by the within Warrant Certificate, the undersigned requests that a new
Warrant Certificate evidencing the Warrants not so exercised be issued in the
name of and delivered to:
--------------------------------------------------------------------------------
(Please print name and address)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Dated: ____________________ Signature: __________________________
NOTICE: The above signature must correspond with the name as written upon the
face of the within Warrant Certificate in every particular, without
alteration or enlargement or any change whatsoever, or if signed by any
other person the Form of Assignment hereon must be duly executed and if
the certificate representing the shares or any Warrant Certificate
representing Warrants not exercised is to be registered in a name other
than that in which the within Warrant Certificate is registered, the
signature of the holder hereof must be guaranteed.
Signature Guaranteed: ____________________________________
THE SIGNATURE(S) MUST BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION (BANKS,
STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH MEMBERSHIP IN
AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM, PURSUANT TO S.E.C. RULE
17Ad-15.
-5-
Exhibit B
WESTERN COUNTRY CLUBS INC.
PREFERRED STOCK PURCHASE WARRANT
Certificate Evidencing Right to Purchase __________Shares
This is to certify that _________________________________
("_____________") or assigns, is entitled to purchase at any time or from time
to time after 9:00 A.M., Dallas, Texas time, on ____, 1998 and until 9:00 A.M.,
Dallas, Texas time, on _______________, 2002 up to the above referenced number
of shares of the Company's Series A Cumulative Convertible Redeemable Preferred
Stock (the "Shares"), of Western Country Clubs Inc., a corporation organized
under the laws of the State of Colorado, (the "Company"), for the consideration
specified in Subsection 1(e) of the Warrant and Registration Rights Agreement
dated _____________, 1997 between the Company and National Securities
Corporation, as representative of the several Underwriters (as defined therein)
(the "Warrant Agreement"), pursuant to which this Warrant is issued. All rights
of the holder of this Warrant are subject to the terms and provisions of the
Warrant Agreement, copies of which are available for inspection at the office of
the Company.
The Shares issuable upon the exercise of this Warrant have been
registered under the Securities Act of 1933, as amended (the "Act"). However,
except as provided in the Warrant Agreement, no distribution of this Warrant, or
the Shares issuable upon exercise of this Warrant may be made except pursuant to
(i) a post-effective amendment to the registration statement under the Act
covering the Warrant and the Shares, (ii) a new registration statement, or (iii)
an opinion of counsel, satisfactory to counsel for the Company, that an
exemption from registration under the Act is available.
Subject to the provisions of the Act and of the Warrant Agreement, this
Warrant and all rights hereunder are transferable, in whole or in part, at the
offices of the Company, by the holder hereof in person or by duly authorized
attorney, upon surrender of this Warrant, together with the Assignment hereof
duly endorsed. Until transfer of this Warrant on the books of the Company, the
Company may treat the registered holder hereof as the owner hereof for all
purposes.
Any Preferred Stock which is acquired pursuant to the exercise of this
Warrant shall be acquired in accordance with the Warrant Agreement.
IN WITNESS WHEREOF, the Company has caused this Warrant to be executed
on this _____ day of ___________, 1997, in Dallas, Texas, by its
proper corporate officer's thereunto duly authorized.
Western Country Clubs Inc.
By:
Xxxxx X. Xxxxxxxxx, President
ATTEST:
1
SUBSCRIPTION
(To be signed only upon exercise of Warrant)
To Western Country Clubs Inc.:
The undersigned, the holder of the enclosed Warrant, hereby irrevocably
elects to exercise the purchase right represented by such Warrant for, and to
purchase thereunder, _________________ shares of Series A Preferred Stock (as
defined in the Warrant and Registration Rights Agreement to which the form of
this Subscription was attached) and herewith makes payment of $______________
therefor, and requests that the certificate or certificates for such shares of
Series A Preferred Stock be issued in the name of and delivered to the
undersigned.
Date:_____
__________________________
(Signature must conform in all respects to name of holder as specified on the
face of the Warrant)
__________________________
(Address)
__________________________
Insert the number of shares of Series A Preferred Stock called for on the
face of the Warrant (or, in the case of a partial exercise, the portion thereof
as to which the Warrant is being exercised), in either case without making any
adjustment for additional shares of Series A Preferred Stock or Warrants or
other securities or property or cash which, pursuant to the adjustment
provisions of the Warrant, may be deliverable upon exercise.
2
ASSIGNMENT
(To be signed only upon transfer of Warrant)
For value received, the undersigned hereby sells, assigns and transfers unto
_______________________________ the right represented by the enclosed Warrant to
purchase ________ shares of Series A Preferred Stock with full power of
substitution in the premises.
The undersigned represents and warrants that the transfer, in whole in or in
part, of such right to purchase represented by the enclosed Warrant is permitted
by the terms of the Warrant and Registration Rights Agreement pursuant to which
the enclosed Warrant has been issued, and the transferee hereof, by his
acceptance of this Assignment, represents and warrants that he is familiar with
the terms of such Warrant and Registration Rights Agreement and agrees to be
bound by the terms thereof with the same force and effect as if a signatory
thereto, including without limitation Section 3 thereof.
Date:____
__________________________
(Signature must conform in all respects to name of holder as specified on the
face of the Warrant)
__________________________
(Address)
Signed in the presence of:
__________________________
3
Exhibit C
WESTERN COUNTRY CLUBS INC.
PURCHASE WARRANT
Certificate Evidencing Right to Purchase ________ Warrants
This is to certify that (" ") or assigns, is
entitled to purchase at any time or from time to time after 9:00 A.M., Dallas,
Texas time, on ,1998 and until 9:00 A.M., Dallas, Texas time, on , 2002 up to
the above referenced number of Series A Redeemable Common Stock Purchase
Warrants (the "Warrants"), of Western Country Clubs Inc., a corporation
organized under the laws of the State of Colorado, (the "Company"), for the
consideration specified in Subsection l (e) of the Warrant and Registration
Rights Agreement dated ,1997 between the Company and National Securities
Corporation, as representative of the several Underwriters (as defined therein)
(the "Warrant Agreement"), pursuant to which this Warrant is issued. All rights
of the holder of this Warrant are subject to the terms and provisions of the
Warrant Agreement, copies of which are available for inspection at the office of
the Company.
This Warrant and the Warrants issuable upon the exercise of this Warrant
have been registered under the Securities Act of 1933, as amended (the "Act").
However, except as provided in the Warrant Agreement no distribution of this
Warrant or the Warrants issuable upon exercise of this Warrant may be made
except pursuant to (i) a post-effected amendment to the registration statement
under the Act covering the Warrants and the Series A Preferred Stock, (ii) a new
registration statement, or (iii) an opinion of counsel, satisfactory to counsel
for the Company, that an exemption from registration under the Act is available.
Subject to the provisions of the Act and of the Warrant Agreement, this
Warrant and all rights hereunder are transferable, in whole or in part, at the
offices of the Company, by the holder hereof in person or by duly authorized
attorney, upon surrender of this Warrant, together with the Assignment hereof
duly endorsed. Until transfer of this Warrant on the books of the Company, the
Company may treat the registered holder hereof as the owner hereof for all
purposes.
Any Warrants, which are acquired pursuant to the exercise of this
Warrant, shall be acquired in accordance with the Warrant Agreement.
IN WITNESS WHEREOF, the Company has caused this Warrant to be executed
on this, day of ,1997, in Dallas, Texas, by its proper
corporate officer's thereunto duly authorized.
Western Country Clubs Inc.
By:
Xxxxx X. Xxxxxxxxx, President
ATTEST:
SUBSCRIPTION
(To be signed only upon exercise of Warrant)
To Western Country Clubs Inc.:
The undersigned, the holder of the enclosed Warrant, hereby irrevocably
elects to exercise the purchase right represented by such Warrant for, and to
purchase thereunder, Warrants (as defined in the Warrant and Registration Rights
Agreement to which the form of this Subscription was attached) and herewith
makes payment of $ therefor, and requests that the certificate or certificates
for such Warrants be issued in the name of and delivered to the undersigned.
Date:
Signature must conform in all respects to name of holder as specified on
the face of the Warrant)
(Address)
Insert the number of Warrants called for on the face of the Warrant (or,
in the case of a partial exercise, the portion thereof as to which the Warrant
is being exercised), in either case without making any adjustment for additional
Warrants or other securities or property or cash which, pursuant to the
adjustment provisions of the Warrant, may be deliverable upon exercise.
9
ASSIGNMENT
(To be signed only upon transfer of Warrant)
For value received, the undersigned hereby sells, assigns and transfers unto
the right represented by the enclosed Warrant to purchase Warrants with full
power of substitution in the premises.
The undersigned represents and warrants that the transfer, in whole in or in
part, of such right to purchase represented by the enclosed Warrant is permitted
by the terms of the Warrant and Registration Rights Agreement pursuant to which
the enclosed Warrant has been issued, and the transferee hereof, by his
acceptance of this Assignment, represents and warrants that he is familiar with
the terms of such Warrant and Registration Rights Agreement and agrees to be
bound by the terms thereof with the same force and effect as if a signatory
thereto, including without limitation Section 3 thereof.
Date:
(Signature must conform in all respects to name of holder as specified on
the face of the Warrant)
(Address)
Signed in the presence of-.
10
