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U.S. GOLF AND ENTERTAINMENT INC.
AND
FIRST UNITED EQUITIES CORPORATION
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REPRESENTATIVE'S
WARRANT AGREEMENT
Dated as of _______________
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REPRESENTATIVE'S WARRANT AGREEMENT, dated as of __________, 199_ (this
"Agreement"), between U.S. GOLF AND ENTERTAINMENT INC., a Delaware corporation
(the "Company"), and FIRST UNITED EQUITIES CORPORATION (the "Representative").
W I T N E S E T H:
WHEREAS, the Company proposes to issue to the Representative 110,000
warrants ("Representative's Warrants"), each Representative's Warrant entitling
the registered holder thereof to purchase one share of common stock, $0.001 par
value, of the Company ("Common Stock"); and
WHEREAS, the Representative has agreed pursuant to the underwriting
agreement (the "Underwriting Agreement"), dated ____________, 199_, between the
Representative and the Company to act as the representative of the Underwriters
listed in the Underwriting Agreement (the "Underwriters") in connection with the
Company's proposed public offering of 1,100,000 shares of Common Stock at a
public offering price of $5.00 per share; and
WHEREAS, the Company has prepared and filed with the Securities and
Exchange Commission (the "Commission") a registration statement, and an
amendment or amendments thereto, on Form SB-2 (No. 333-4873) (the "Registration
Statement"), for the registration of the Common Stock to be sold as part of the
Public Offering, the Representative's Warrants and the Common Stock issuable
upon exercise of the Representative's Warrants under the Securities Act of 1933,
as amended (the "Securities Act"). Except as the context may otherwise require,
such registration statement, as amended, on file with the Commission at the time
such registration statement becomes effective (including the prospectus,
financial statements, schedules, exhibits and all other documents filed as a
part thereof or incorporated therein (including without limitation those
documents or information incorporated by reference therein) and all information
deemed to be a part thereof as of such time pursuant to paragraph (b) of Rule
430(A) under the Securities Act), is hereinafter called the "Registration
Statement"; and
WHEREAS, the Representative's Warrants to be issued pursuant to this
Agreement will be issued on the Closing Date (as such term is defined in the
Underwriting Agreement) by the Company to the Representative in consideration
for, and as part of the Representative's compensation in connection with the
Representative acting as the Representative pursuant to the Underwriting
Agreement;
NOW, THEREFORE, in consideration of the premises, the payment by the
Representative to the Company of an aggregate of One Hundred Ten Dollars ($110),
the agreements herein set forth and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties agree as
follows:
1. Grant. The Holder (as defined in Section 3.1 below) is hereby
granted 110,000 Representative's Warrants, each Representative's Warrant
entitling the Holder the right to purchase,
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at any time from __________, 199_ until 5:00 P.M., New York time, on __________,
200_ (the "Exercise Period"), one share of Common Stock at an initial exercise
price of $6.50 per share of Common Stock (subject to adjustment as provided in
Section 8 hereof), subject to the terms and conditions of this Agreement. Except
as expressly set forth herein, the shares of Common Stock issuable upon exercise
of the Representative's Warrants are in all respects identical to the shares of
Common Stock being purchased by the Underwriters for resale to the public
pursuant to the terms and provisions of the Underwriting Agreement.
2. Warrant Certificates. The warrant certificates evidencing the
Representative's Warrants (the "Warrant Certificates") delivered pursuant to
this Agreement shall be in the form set forth in Exhibit A attached hereto and
made a part hereof, with such appropriate insertions, omissions, substitutions
and other variations as required or permitted by this Agreement.
3. Exercise of Warrant.
3.1 Method of Exercise. The Representative's Warrants initially are
exercisable during the Exercise Period at an initial exercise price (subject to
adjustment as provided in Section 8 hereof) per share of Common Stock set forth
in Section 6 hereof, payable to the Company by certified or official bank check
in New York Clearing House funds. Upon surrender during the Exercise Period of a
Warrant Certificate with the annexed Form of Election to Purchase duly executed,
together with payment of the Exercise Price (as hereinafter defined) for the
shares of Common Stock purchased, at the Company's principal offices in the
United States (presently located at 0 Xxxxx Xxxxxx, Xxxxxxx, Xxx Xxxx 11725) the
registered holder of a Warrant Certificate ("Holder" or "Holders") shall be
entitled to receive a certificate or certificates for the shares of Common Stock
so purchased. The purchase rights represented by each Warrant Certificate are
exercisable, at the option of the Holder thereof, in whole or in part (but not
as to fractional shares of the Common Stock). In the case of the purchase of
less than all the shares of Common Stock under any Warrant Certificate (whether
pursuant to this Section 3.1 or Section 3.2 hereof), the Company shall cancel
such Warrant Certificate upon the surrender thereof and shall execute and
deliver a new Warrant Certificate of like tenor for the balance of the shares of
Common Stock purchasable thereunder.
3.2 Exercise by Surrender of Representative's Warrant. In addition to
the method of payment set forth in Section 3.1 hereof and in lieu of any cash
payment required thereunder, the Holder(s) of the Representative's Warrants
shall have the right at any time and from time to time to exercise the
Representative's Warrants in full or in part by surrendering the Warrant
Certificate in the manner specified in Section 3.1 hereof in exchange for the
number of shares of Common Stock equal to the product of (x) the number of
shares of Common Stock as to which the Representative's Warrants are being
exercised, multiplied by (y) a fraction, the numerator of which is the Market
Price (as defined below) of the Common Stock less the Exercise Price therefor,
and the denominator of which is such Market Price. Solely for the purposes of
this paragraph, Market Price of each security shall be calculated either (i) on
the date on which the form of election attached hereto is deemed to have been
sent to the Company pursuant to Section 13 hereof (the "Notice Date") or (ii)
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as the average of the Market Prices for such security for each of the five
trading days immediately preceding the Notice Date, whichever of (i) or (ii) is
greater.
3.3 Definition of Market Price. As used herein with respect to the
Common Stock, the phrase "Market Price" at any date shall be deemed to be the
last reported sale price of the Common Stock, or if no such reported sale takes
place on such day, the average of the last reported sale prices for the last
three (3) trading days, in either case as officially reported by the principal
securities exchange on which the Common Stock is listed or admitted to trading
or by NASDAQ, or if such security is not listed or admitted to trading on any
such securities exchange or quoted by NASDAQ, the average closing bid price as
furnished by the National Quotation Bureau or a similar organization if NASDAQ
is no longer reporting such information, or if such information is no longer
being provided with respect to the Common Stock, then as determined in good
faith by written resolution of the Board of Directors of the Company, based on
the best information available to it.
4. Issuance of Certificates. Upon the exercise of the Representative's
Warrants, the issuance of certificates for shares of Common Stock or other
securities, property or rights underlying such Representative's Warrants, shall
be made forthwith (and in any event within three (3) business days thereafter)
without charge to the Holder thereof including, without limitation, any tax that
may be payable in respect of the issuance thereof, and such certificates shall
(subject to the provisions of Sections 5 and 7 hereof) be issued in the name of,
or in such names as may be directed by, the Holder thereof; provided, however,
that the Company shall not be required to pay any tax which may be payable in
respect of any transfer involved in the issuance and delivery of any such
certificates in a name other than that of the Holder and the Company shall not
be required to issue or deliver such certificates unless or until the person or
persons requesting the issuance thereof shall have paid to the Company the
amount of such tax or shall have established to the satisfaction of the Company
that such tax has been paid.
The Warrant Certificates and the certificates representing the shares
of Common Stock (and other securities, property or rights issuable upon the
exercise of the Representative's Warrants) shall be executed on behalf of the
Company by the manual or facsimile signature of the then present Chairman or
Vice Chairman of the Board of Directors or President or Vice President of the
Company under its corporate seal reproduced thereon, attested to by the manual
or facsimile signature of the then present Secretary or Assistant Secretary of
the Company. Warrant Certificates and certificates representing the shares of
Common Stock shall be dated the date of execution by the Company upon initial
issuance, division, exchange, substitution or transfer.
5. Restriction On Transfer of Representative's Warrants. The Holder of
a Warrant Certificate, by its acceptance thereof, covenants and agrees that the
Representative's Warrants are being acquired as an investment and not with a
view to the distribution thereof; that the Representative's Warrants may not be
sold, transferred, assigned, hypothecated or otherwise disposed of, in whole or
in part, for a period of one (1) year after the date hereof, except to (i)
officers (who are also stockholders or employees) of the Representative; (ii)
any successor firm or
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corporation of the Representative; or (iii) in the case of an individual,
pursuant to such individual's last will and testament or the laws of descent and
distribution.
6. Exercise Price.
6.1 Initial and Adjusted Exercise Prices. Except as otherwise provided
in Section 8 hereof, the initial exercise price of each Representative's Warrant
shall be $6.50 per share of Common Stock purchased thereunder. The adjusted
exercise price of the Common Stock shall be the price that results from time to
time from any and all adjustments of the initial exercise price in accordance
with the provisions of Section 8 hereof.
6.2 Exercise Price. The term "Exercise Price" herein shall mean the
initial exercise price or the adjusted exercise price, depending upon the
context.
7. Registration Rights.
7.1 Registration Under the Securities Act of 1933.
(a) The Representative's Warrants have been registered under the
Securities Act. If the registration statement under which the shares of Common
Stock underlying the Representative's Warrants and any of the other securities
issued or issuable upon exercise of the Representative's Warrants (collectively,
the "Warrant Securities") are registered ceases to be effective or the
prospectus contained in such registration statement ceases to be current, then
upon exercise, in part or in whole, the Warrant Securities shall bear the
following legend:
The securities represented by this certificate have not been registered
under the Securities Act of 1933, as amended ("Securities Act"), and
may not be offered or sold except pursuant to (i) an effective
registration statement under the Securities Act, (ii) to the extent
applicable, Rule 144 under the Securities Act (or any similar rule
under such Securities Act relating to the disposition of securities),
or (iii) an opinion of counsel, if such opinion shall be reasonably
satisfactory to counsel to the issuer, that an exemption from
registration under such Securities Act is available.
(b) The Company shall use its best efforts to keep current the
Registration Statement covering the Warrant Securities for so long as any
Representative's Warrants shall remain outstanding. In furtherance of and
without limiting the foregoing, the Company shall prepare and file with the
Commission such post-effective amendment or amendments to the Registration
Statement as may be necessary, in the opinion of counsel to the Representative
or the Holders, so as to permit a public offering and sale of the Warrant
Securities by the Representative and any other Holders of such securities and
use its best efforts to cause such post-effective amendment or amendments to
become effective on or prior to the time that the Representative's Warrants
first become exercisable and shall prepare and file with the Commission such
amendments and supplements to the Registration Statement, as so amended, and the
prospectus used in connection
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therewith, as may be necessary to keep the Registration Statement, as so
amended, effective and the prospectus contained therein current, and to comply
with the provisions of the Securities Act with respect to the disposition of all
Warrant Securities covered by such registration statement, for the period
referred to in the immediately preceding sentence.
7.2 Piggyback Registration. Without limitation to Section 7.1(b) above,
if at any time during the five (5) year period following the date hereof the
Company proposes to register any of its securities under the Securities Act
(other than in connection with a merger or acquisition registered on Form S-4
(or a similar special-purpose form) or with an employee benefit plan or similar
plan registered on Form S-8 (or a similar special purpose form) or any dividend
reinvestment plan), it will give written notice by registered mail, at least 30
days prior to the filing of each such registration statement, to the
Representative and to all other Holders of Representative's Warrants and/or
other Warrant Securities of its intention to do so. If the Representative or
other Holders of Representative's Warrants and/or other Warrant Securities
notify the Company within 15 days after receipt of any such notice of its or
their desire to include any such securities in such proposed registration
statement, the Company shall afford each of the Representative and such Holders
of the Representative's Warrants and/or other Warrant Securities the opportunity
to have any such Warrant Securities registered under such registration
statement.
7.3 Demand Registration. Without limitation to Section 7.1(b) above:
(a) At any time, the Holders of the Representative's Warrants and/or
other Warrant Securities representing a "Majority" (as hereinafter defined) of
such securities shall have the right (which right is in addition to the
registration rights under Section 7.2 hereof), exercisable by written notice to
the Company, to have the Company prepare and file with the Commission, on one
occasion, a registration statement and such other documents, including a
prospectus, as may be necessary in the opinion of both counsel for the Company
and counsel for the Representative and Holders, in order to comply with the
provisions of the Securities Act, so as to permit a public offering and sale of
their respective Warrant Securities for nine (9) consecutive months (or such
shorter period which shall terminate when all of the Warrant Securities covered
by such registration statement have been sold pursuant thereto) by such Holders
and any other Holders of the Representative's Warrants and/or other Warrant
Securities who notify the Company within 10 days after receiving notice from the
Company of such request; provided, however, that, the Company shall not be
obligated to file any such registration statement pursuant to this Section
7.3(a) so long as the Registration Statement (as it may hereafter be amended)
remains effective and the prospectus contained therein remains current, provided
such Registration Statement (as it may hereafter be amended) covers the public
offering and sale of all of the Warrant Securities by the Representative and the
other Holders, if any, of the Representative's Warrants and/or other Warrant
Securities.
(b) The Company covenants and agrees to give written notice of any
registration request under this Section 7.3 by any Holder or Holders to all
other registered Holders of Representative's Warrants and/or other Warrant
Securities within 10 days from the date of the receipt of any such registration
request.
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(c) In addition to the registration rights under Section 7.2 hereof and
subsection (a) of this Section 7.3, at any time, any Holders of Representative's
Warrants and/or other Warrant Securities representing a Majority of such
securities shall have the right, exercisable by written request to the Company,
to have the Company prepare and file, on one occasion, with the Commission a
registration statement so as to permit a public offering and sale for nine (9)
consecutive months (or such shorter period which shall terminate when all of the
Warrant Securities covered by such registration statement have been sold
pursuant thereto) by any such Holder of its Warrant Securities; provided,
however, that the provisions of Section 7.4(b) hereof shall not apply to any
such registration request and registration and all costs incident thereto shall
be at the expense of the Holder or Holders making such request.
7.4 Covenants of the Company With Respect to Registration. In
connection with any registration under Section 7.2 or 7.3 hereof, the Company
covenants and agrees as follows:
(a) The Company shall use its best efforts to file a registration
statement within 45 days of receipt of any demand therefor, shall use its best
efforts to have any registration statements declared effective at the earliest
possible time, and shall furnish each Holder desiring to sell Warrant Securities
such number of prospectuses as shall reasonably be requested.
(b) The Company shall pay all costs (excluding fees and expenses of
Holder(s)' counsel and any underwriting or selling commissions), fees and
expenses in connection with all registration statements filed pursuant to
Sections 7.2 and 7.3(a) hereof including, without limitation, the Company's
legal and accounting fees, printing expenses and blue sky fees and expenses. The
Holder(s) shall pay all costs, fees and expenses in connection with any
registration statement filed pursuant to Section 7.3(c) hereof. If the Company
shall fail to comply with its obligations under Section 7.4(a), the Holder(s)
shall be entitled to seek equitable or other relief available to the Holder(s).
(c) The Company shall take all necessary action that may be required in
qualifying or registering the Warrant Securities included in a registration
statement for offering and sale under the securities or blue sky laws of such
states as reasonably are requested by the Holder(s), provided that the Company
shall not be obligated to execute or file any general consent to service of
process or to qualify as a foreign corporation to do business under the laws of
any such jurisdiction.
(d) The Company shall indemnify and hold harmless the Holder(s) of the
Warrant Securities to be sold pursuant to any registration statement and each
person, if any, who controls such Holder(s) within the meaning of Section 15 of
the Securities Act or Section 20(a) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), from and against any and all loss, claim, damage,
expense or liability (including all expenses reasonably incurred in
investigating, preparing or defending against any claim whatsoever including,
without limitation, the fees and expenses of legal counsel) to which any of them
may become subject under the Securities Act, the Exchange Act or otherwise,
arising from such registration statement, but only to the same extent and
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with the same effect as the provisions contained in Section 7(a) of the
Underwriting Agreement pursuant to which the Company has agreed to indemnify
each of the Underwriters.
(e) The Holder(s) of the Warrant Securities to be sold pursuant to a
registration statement, and their successors and assigns, shall severally, and
not jointly, indemnify the Company and its officers and directors and each
person, if any, who controls the Company within the meaning of Section 15 of the
Securities Act or Section 20(a) of the Exchange Act, from and against any and
all loss, claim, damage, expense or liability (including all expenses reasonably
incurred in investigating, preparing or defending against any claim whatsoever
including, without limitation, the fees and expenses of legal counsel) to which
they may become subject under the Securities Act, the Exchange Act or otherwise,
arising from information furnished in writing by or on behalf of such Holders or
their successors or assigns, specifically for inclusion in such registration
statement, but only to the same extent and with the same effect as the provision
pursuant to which the Underwriters have agreed to indemnify the Company
contained in Section 7(b) of the Underwriting Agreement.
(f) Nothing contained in this Agreement shall be construed as requiring
the Holder(s) to exercise their Representative's Warrants prior to the initial
filing of any registration statement or the effectiveness thereof.
(g) The Company shall not permit the inclusion of any securities other
than the Warrant Securities to be included in any registration statement filed
pursuant to Section 7.3 hereof or permit any other registration statement to be
or remain effective during the effectiveness of the registration statement filed
pursuant to Section 7.3 hereof without the prior written consent of the Holders
of the Representative's Warrants and the other Warrant Securities representing a
Majority of such securities.
(h) The Company shall cause to be furnished to each Holder
participating in the offering and to each underwriter, if any, a signed
counterpart, addressed to such Holder or underwriter, of (i) an opinion of
counsel to the Company, dated the effective date of such registration statement
(or if such registration includes an underwritten public offering, an opinion
dated the date of the closing under the underwriting agreement), and (ii) a
"cold comfort" letter dated the effective date of such registration statement
(and, if such registration includes an underwritten public offering, a letter
dated the date of the closing under the underwriting agreement) signed by the
independent public accountants who have issued a report on the Company's
financial statements included in such registration statement, in each case
covering substantially the same matters with respect to such registration
statement (and the prospectus included therein) and, in the case of such
accountants' letter, with respect to events subsequent to the date of such
financial statements, as are customarily covered in opinions of issuer's counsel
and in accountants' letters delivered to underwriters in underwritten public
offerings of securities.
(i) The Company shall as soon as practicable after the effective date
of the registration statement, and in any event within 15 months thereafter,
make "generally available to its security holders" (within the meaning of Rule
158 under the Securities Act) an earnings statement (which
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need not be audited) complying with Section 11(a) of the Securities Act and
covering a period of at least 12 consecutive months beginning after the
effective date of the registration statement.
(j) The Company shall deliver promptly to each Holder participating in
the offering requesting the correspondence and memoranda described below and to
the managing underwriters, copies of all correspondence between the Commission
and the Company, its counsel or auditors and all memoranda relating to
discussions with the Commission or its staff with respect to the registration
statement and permit each Holder and underwriter to do such investigation, upon
reasonable advance notice, with respect to information contained in or omitted
from the registration statement as it deems reasonably necessary to comply with
applicable securities laws or the rules and regulations of the National
Association of Securities Dealers, Inc. ("NASD"). Such investigation shall
include access to books, records and properties and opportunities to discuss the
business of the Company with its officers and independent auditors, all to such
reasonable extent and at such reasonable times and as often as any such Holder
or underwriter shall reasonably request.
(k) With respect to a registration under Section 7.3 hereof, the
Company shall enter into an underwriting agreement with the underwriters
selected for such underwriting by the Holders of a Majority of the Warrant
Securities requesting such registration, which may be the Representative. Such
agreement shall be reasonably satisfactory in form and substance to the Company,
each Holder and such managing underwriters, and shall contain such
representations, warranties and covenants by the Company and such other terms
and conditions as are customarily contained in agreements of the type used by
the managing underwriter. The Holders shall be parties to any underwriting
agreement relating to an underwritten sale of their Warrant Securities and may,
at their option, require that any or all the representations, warranties and
covenants of the Company to or for the benefit of such underwriters shall also
be made to and for the benefit of such Holders. Such Holders shall not be
required to make any representations or warranties to or agreements with the
Company or the underwriters except as they may relate to such Holders and their
intended methods of distribution.
(l) In addition to the Warrant Securities, upon the written request
therefor by any Holder(s), the Company shall include in the registration
statement any other securities of the Company held by such Holder(s) or issuable
upon conversion or exercise or in exchange for securities held by such Holder(s)
as of the date of filing of such registration statement.
(m) For purposes of this Agreement, the term "Majority" or "66-2/3%" in
reference to the Holders of Representative's Warrants and/or other Warrant
Securities, shall mean in excess of 50%, in the former case, and 66-2/3%, in the
latter case, of the shares of Common Stock issued or issuable upon exercise of
all then outstanding Representative's Warrants and/or Warrant Securities
(assuming the exercise of all of the Representative's Warrants) that (i) are not
held by the Company, an affiliate, officer, creditor, employee, or agent thereof
or any of their respective affiliates, members of their family, persons acting
as nominees or in conjunction therewith, and (ii) have not been resold to the
public.
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7.5 Underwriters. In connection with an underwritten offering pursuant
to Section 7.2, the Company shall (together with all Holders, directors,
officers and other stockholders proposing to distribute their securities (the
"Other Stockholders")) enter into an underwriting agreement in customary form
with the representative of the underwriter or underwriters selected for such
underwriting by a majority in interest of the Holders and reasonably acceptable
to the Company. If the managing underwriter of such underwritten offering
advises the Company, the Holders and the Other Stockholders in writing that the
inclusion of the Warrant Securities would materially adversely effect the
proposed offering, the number of securities that may be included in such a
registration shall be allocated among all security holders who wish to include
their securities in such registration in proportion, as nearly as practicable,
to the respective amounts of securities which would otherwise be included in
such registration held by such security holders at the time of the filing of the
related registration statement.
8. Adjustments to Exercise Price and Number of Securities.
8.1 Subdivision and Combination. In case the Company shall at any time
subdivide or combine the outstanding shares of Common Stock, the Exercise Price
shall forthwith be proportionately decreased in the case of a subdivision or
increased in the case of a combination.
8.2 Stock Dividends and Distributions. In case the Company shall pay a
dividend in, or make a distribution of, shares of Common Stock or of the
Company's capital stock convertible into shares of Common Stock, the Exercise
Price shall forthwith be proportionately decreased. An adjustment made pursuant
to this Section 8.2 shall be made as of the record date for the subject stock
dividend or distribution.
8.3 Adjustment in Number of Securities. Upon each adjustment of the
Exercise Price per shares of Common Stock purchasable hereunder pursuant to the
provisions of this Section 8, the respective numbers of shares of Common Stock
issuable upon the exercise of each Representative's Warrant shall be adjusted to
the nearest full amount by multiplying a number equal to the Exercise Price per
share of Common Stock purchasable hereunder in effect immediately prior to such
adjustment by the number of shares of Common Stock issuable upon exercise of the
Representative's Warrants immediately prior to such adjustment and dividing the
product so obtained by the adjusted Exercise Price per share of Common Stock
purchasable hereunder.
8.4 Definition of Common Stock. For the purpose of this Agreement, the
term "Common Stock" shall mean (i) the class of stock designated as Common Stock
in the Certificate of Incorporation of the Company as may be amended as of the
date hereof, or (ii) any other class of stock resulting from successive changes
or reclassifications of such shares of Common Stock consisting solely of changes
in par value, or from par value to no par value, or from no par value to par
value. In the event that the Company shall after the date hereof issue
securities with greater or superior voting rights than the share of Common Stock
outstanding as of the date hereof, a Holder, at its option, may receive upon
exercise of any Representative's Warrant either shares of Common Stock or a like
number of such securities with greater or superior voting rights.
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8.5 Merger or Consolidation. In case of any consolidation of the
Company with, or merger of the Company with, or merger of the Company into,
another corporation (other than a consolidation or merger that does not result
in any reclassification or change of the outstanding share of Common Stock), the
corporation formed by such consolidation or surviving such merger shall execute
and deliver to the Holder a supplemental warrant agreement providing that the
Holder of each Representative's Warrant outstanding immediately prior to the
effective time of such consolidation or merger shall have the right thereafter
(until the expiration of such Representative's Warrant) to receive, upon
exercise of such Representative's Warrant, the kind and amount of shares of
stock and other securities and property receivable upon such consolidation or
merger, by a Holder of the number of shares of Common Stock of the Company for
which such Representative's Warrant might have been exercised immediately prior
to such consolidation or merger. Such supplemental warrant agreement shall
provide for adjustments that shall be identical to the adjustments provided in
Section 8. The above provision of this subsection shall similarly apply to
successive consolidations or mergers.
8.6 No Adjustment of Exercise Price in Certain Cases. No adjustment of
the Exercise Price shall be made:
(a) Upon the issuance or sale of shares of Common Stock sold in
connection with the public offering and shares of Common Stock issued and sold
upon exercise of the Representative's Warrants;
(b) Upon the issuance or sale of shares of Common Stock issuable upon
the exercise or conversion of any security issued and outstanding on the date
hereof; or
(c) If the amount of said adjustment shall be less than two cents
($.02) per Warrant Security, provided, however, that in such case any adjustment
that would otherwise be required then to be made shall be carried forward and
shall be made at the time of and together with the next subsequent adjustment
which, together with any adjustment so carried forward, shall amount to at least
two cents ($.02) per Warrant Security.
9. Exchange and Replacement of Warrant Certificates. Each Warrant
Certificate is exchangeable without expense, upon the surrender thereof by the
registered Holder at the principal executive office of the Company, for a new
Warrant Certificate or Warrant Certificates of like tenor and date representing
in the aggregate the right to purchase the same number of shares of Common Stock
in such denominations as shall be designated by the Holder thereof at the time
of such surrender.
Upon receipt by the Company of evidence reasonably satisfactory to it
of the loss, theft, destruction or mutilation of any Warrant Certificate, and,
in case of loss, theft or destruction, of indemnity or security reasonably
satisfactory to it, and reimbursement to the Company of all reasonable expenses
incidental thereto, and upon surrender and cancellation of the Representative's
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Warrants, if mutilated, the Company shall execute and deliver a new Warrant
Certificate of like tenor, in lieu thereof.
10. Elimination of Fractional Interests. The Company shall not be
required to issue certificates representing fractions of shares of Common Stock
upon the exercise of the Representative's Warrants, but instead shall pay cash
in lieu of fractional interests, based on the market value of a share of Common
Stock.
11. Reservation and Listing of Securities. The Company shall at all
times reserve and keep available out of its authorized shares of Common Stock,
solely for the purpose of issuance upon the exercise of the Representative's
Warrants, such number of shares of Common Stock or other securities, property or
rights as shall be issuable upon the exercise thereof. The Company covenants and
agrees that, upon exercise of the Representative's Warrants in the manner
provided herein and therein and payment of the Exercise Price herein and/or the
exercise price therein, as the case may be, all shares of Common Stock and other
securities issuable upon the exercise of the Representative's Warrants shall be
duly and validly issued, fully paid, non-assessable and not subject to the
preemptive rights of any stockholder or other person or entity. As long as the
Representative's Warrants shall be outstanding, the Company shall use its best
efforts to cause all shares of Common Stock issuable upon the exercise of the
Representative's Warrants to be listed (subject to official notice of issuance)
on all securities exchanges and/or quoted in such inter-dealer quotation systems
on which the Common Stock issued to the public in connection with the Public
Offering may then be listed and/or quoted.
12. Notices to Warrant Holders. Nothing contained in this Agreement
shall be construed as conferring upon the Holders the right to vote or to
consent or to receive notice as a stockholder in respect of any meetings of
stockholders for the election of directors or any other matter, or as having any
rights whatsoever as a stockholder of the Company. If, however, at any time
prior to the expiration of the Representative's Warrants and their exercise, any
of the following events shall occur:
(a) the Company shall take a record of the holders of its
shares of Common Stock for the purpose of entitling them to receive a
dividend or distribution payable otherwise than in cash, or a cash
dividend or distribution payable otherwise than out of earned surplus,
as indicated by the accounting treatment of such dividend or
distribution on the books of the Company; or
(b) the Company shall offer to all the holders of its Common
Stock any additional shares of capital stock of the Company or
securities convertible into or exchangeable for shares of capital stock
of the Company, or any option, right or warrant to subscribe therefor;
or
11
(c) a dissolution, liquidation or winding-up of the Company
(other than in connection with a consolidation or merger) or a sale of
all or substantially all of its property, assets and business as an
entirety shall be proposed;
then, in any one or more of said events, the Company shall give written notice
of such event at least 15 days prior to the date fixed as a record date or the
date of closing the transfer books for the determination of the stockholders
entitled to such dividend, distribution, convertible or exchangeable securities
or subscription rights, or entitled to vote on such proposed dissolution,
liquidation, winding-up or sale. Such notice shall specify such record date or
the date of closing the transfer books, as the case may be. Failure to give such
notice or any defect therein shall not affect the validity of any action taken
in connection with the declaration or payment of any such dividend, or the
issuance of any convertible or exchangeable securities, or subscription rights,
options or warrants, or any proposed dissolution, liquidation, winding-up or
sale.
13. Notices.
All notices, requests, consents and other communications hereunder
shall be in writing and shall be deemed to have been duly made and sent when
delivered, or mailed by registered or certified mail, return receipt requested:
(a) If to the registered Holder of Representative's Warrants,
to the address of such Holder as shown on the books of the Company; or
(b) If to the Company, to the address set forth in Section 3
hereof or to such other address as the Company may designate by notice
to the Holders.
14. Supplements and Amendments. The Company and the Representative may
from time to time supplement or amend this Agreement without the approval of any
holders of Warrant Certificates (other than the Representative) in order to cure
any ambiguity, to correct or supplement any provision contained herein that may
be defective or inconsistent with any provisions herein, or to make any other
provisions in regard to matters or questions arising hereunder which the Company
and the Representative may deem necessary or desirable and that the Company and
the Representative deem shall not adversely affect the interests of the Holders
of Warrant Certificates; provided, however, that this Agreement shall not
otherwise be modified, supplemented or altered in any respect (including,
without limitation, any decrease in the number or any change in the nature of
the securities purchasable upon the exercise of any Representative's Warrant, or
any increase in the Exercise Price therefor, other than such changes as are
prescribed in this Agreement as originally executed) except with the consent in
writing of the registered Holders representing no less than 66- 2/3% of the
Warrant Securities (as defined in Section 7.4(m) hereof).
15. Successors. All the covenants and provisions of this Agreement
shall be binding upon and inure to the benefit of the Company, the Holders and
their respective successors and assigns hereunder.
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16. Termination. This Agreement shall terminate at 5:00 p.m. New York
time on the close of business on _____________, 200_. Notwithstanding the
foregoing, the indemnification provisions of Section 7 hereof shall survive such
termination until the close of business on __________, 200_.
17. Governing Law; Submission to Jurisdiction. This Agreement and each
Warrant Certificate issued hereunder shall be deemed to be a contract made under
the laws of the State of New York and for all purposes shall be construed in
accordance with the laws of said State without giving effect to the rules of
said State governing the conflicts of laws.
The Company and the Representative hereby agree that any action,
proceeding or claim against it arising out of, or relating in any way to, this
Agreement shall be brought and enforced in the courts of the State of New York
or of the United States of America for the Eastern District of New York, and
irrevocably submit to such jurisdiction, which jurisdiction shall be exclusive.
The Company and the Representative hereby irrevocably waive any objection to
such exclusive jurisdiction or inconvenient forum.
Any such process or summons to be served upon the Company or the
Representative (at the option of the party bringing such action, proceeding or
claim) may be served by transmitting a copy thereof, by registered or certified
mail, return receipt requested, postage prepaid, addressed to it at the address
set forth in Section 13 hereof. Such mailing shall be deemed personal service
and shall be legal and binding upon the party so served in any action,
proceeding or claim. The Company and the Representative agree that the
prevailing party(ies) in any such action or proceeding shall be entitled to
recover from the other party(ies) all of its/their reasonable legal costs and
expenses relating to such action or proceeding and/or incurred in connection
with the preparation therefor.
18. Entire Agreement; Modification. This Agreement (including the
Underwriting Agreement to the extent portions thereof are referred to herein)
contains the entire understanding between the parties hereto with respect to the
subject matter hereof and may not be modified or amended except as provided in
Section 15 hereof.
19. Severability. If any provision of this Agreement shall be held to
be invalid or unenforceable, such invalidity or unenforceability shall not
affect any other provision of this Agreement. The parties agree, however, that
in the event any provision of this Agreement shall be declared invalid or
unenforceable, the parties shall negotiate a new provision achieving to the
extent possible the purpose of the invalid provision.
20. Captions. The caption headings of the Sections of this Agreement
are for convenience of reference only and are not intended, nor should they be
construed as, a part of this Agreement and shall be given no substantive effect.
21. Benefits of this Agreement. Nothing in this Agreement shall be
construed to give to any person or corporation other than the Company and the
Representative and any other registered
13
Holder(s) of the Warrant Certificates or Warrant Securities any legal or
equitable right, remedy or claim under this Agreement.
22. Counterparts. This Agreement may be executed in any number of
counterparts and each of such counterparts shall for all purposes be deemed to
be an original, and such counterparts shall together constitute but one and the
same agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed, as of the day and year first above written.
U.S. GOLF AND ENTERTAINMENT INC.
By:______________________________
Name:
Title:
FIRST UNITED EQUITIES CORPORATION
By:______________________________
Name:
Title:
[SEAL]
Attest:
------------------------------
Secretary
14
EXHIBIT A
[FORM OF WARRANT CERTIFICATE]
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED ("SECURITIES ACT"), AND MAY NOT BE
OFFERED OR SOLD EXCEPT PURSUANT TO (I) AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE SECURITIES ACT, (II) TO THE EXTENT APPLICABLE, RULE 144 UNDER THE SECURITIES
ACT (OR ANY SIMILAR RULE UNDER SUCH ACT RELATING TO THE DISPOSITION OF
SECURITIES), OR (III) AN OPINION OF COUNSEL, IF SUCH OPINION SHALL BE REASONABLY
SATISFACTORY TO COUNSEL TO THE ISSUER, THAT AN EXEMPTION FROM REGISTRATION UNDER
SUCH SECURITIES ACT IS AVAILABLE.
THE TRANSFER OR EXCHANGE OF THE WARRANTS REPRESENTED BY THIS CERTIFICATE IS
RESTRICTED IN ACCORDANCE WITH THE WARRANT AGREEMENT REFERRED TO HEREIN.
EXERCISABLE ON OR BEFORE
5:00 P.M., NEW YORK TIME, __________, 200_
(SUBJECT TO EXTENSION AS DESCRIBED HEREIN)
No. W- 110,000 Warrants
WARRANT CERTIFICATE
This Warrant Certificate certifies that First United Equities
Corporation or registered assigns, is the registered holder of __________
warrants (collectively, the "Representative's Warrants") to purchase initially,
at any time from ___________, 199_ until 5:00 p.m. New York time on
_______________, 200_ (__ ______________________________________________) (the
"Expiration Date"), up to 110,000 fully-paid and non-assessable shares of common
stock, $0.001 par value ("Common Stock"), of U.S. Golf and Entertainment Inc., a
Delaware corporation (the "Company"), upon surrender of this Warrant Certificate
and payment of the Exercise Price at an office or agency of the Company, but
subject to the conditions set forth herein and in the Representative's Warrant
Agreement dated as of __________, 199_ between the Company and First United
Equities Corporation (the "Warrant Agreement"). Payment of the Exercise Price
shall be made by certified or official bank check in New York Clearing House
funds payable to the order of the Company or by surrender of this Warrant
Certificate in the manner provided in the Warrant Agreement.
15
No Representative's Warrant may be exercised after 5:00 p.m., New
York time, on the Expiration Date, at which time all Representative's Warrants
evidenced hereby, unless exercised prior thereto, shall thereafter be void.
The Representative's Warrants evidenced by this Warrant
Certificate are part of a duly authorized issue of Representative's Warrants
issued pursuant to the Warrant Agreement, which Warrant Agreement is hereby
incorporated by reference in and made a part of this instrument and is hereby
referred to for a description of the rights, limitation of rights, obligations,
duties and immunities thereunder of the Company and the holders (the words
"holders" or "holder" meaning the registered holders or registered holder) of
the Representative's Warrants.
The Warrant Agreement provides that upon the occurrence of
certain events the Exercise Price and the type and/or number of the Company's
securities issuable hereunder may, subject to certain conditions, be adjusted.
In such event, the Company will, at the request of the holder, issue a new
Warrant Certificate evidencing the adjustment in the Exercise Price and the
number and/or type of securities issuable upon the exercise of the
Representative's Warrants; provided, however, that the failure of the holder to
request or the Company to issue such new Warrant Certificates shall not in any
way change, alter, or otherwise impair, the rights of the holder as set forth in
the Warrant Agreement.
Upon due presentment for registration of transfer of this Warrant
Certificate at an office or agency of the Company, a new Warrant Certificate or
Warrant Certificates of like tenor and evidencing in the aggregate a like number
of Representative's Warrants shall be issued to the transferee(s) in exchange
for this Warrant Certificate, subject to the limitations provided herein and in
the Warrant Agreement, without any charge except for any tax or other
governmental charge imposed in connection with such transfer.
Upon the exercise of less than all of the Representative's
Warrants evidenced by this Certificate, the Company shall forthwith issue to the
holder hereof a new Warrant Certificate representing such number of unexercised
Representative's Warrants.
The Company may deem and treat the registered holder(s) hereof as
the absolute owner(s) of this Warrant Certificate (notwithstanding any notation
of ownership or other writing hereon made by anyone), for the purpose of any
exercise hereof, and of any distribution to the holder(s) hereof, and for all
other purposes, and the Company shall not be affected by any notice to the
contrary.
All terms used in this Warrant Certificate which are defined in
the Warrant Agreement shall have the meanings assigned to them in the Warrant
Agreement unless otherwise defined herein.
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IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to
be duly executed under its corporate seal.
Dated as of ____________________, 199_
[SEAL]
U.S. GOLF AND ENTERTAINMENT INC.
By:
---------------------------------
Name:
Title:
Attest:
------------------------------
Secretary
17
[FORM OF ELECTION TO PURCHASE PURSUANT TO SECTION 3.1]
The undersigned hereby irrevocably elects to exercise the right,
represented by this Warrant Certificate, to purchase _____________________
shares of Common Stock and herewith tenders in payment for such securities a
certified or official bank check payable in New York Clearing House Funds to the
order of U.S. GOLF AND ENTERTAINMENT INC. (the "Company") in the amount of
$________________, all in accordance with the terms of Section 3.1 of the
Representative's Warrant Agreement dated as of ____________________, 199_
between the Company and FIRST UNITED EQUITIES CORPORATION. The undersigned
requests that a certificate or certificates for such securities be registered in
the name of ____________________ whose address is ____________ and whose social
security or taxpayer identification number is
____________________________________________ and that such certificate or
certificates be delivered to ________________________ whose address is
_______________________.
Dated: Signature _________________________
(Signature must conform in all respects to name of
holder as specified on the face of the Warrant
Certificate.)
-----------------------------------------
(Insert Social Security or Other Identifying Number
of Holder)
18
[FORM OF ELECTION TO PURCHASE PURSUANT TO SECTION 3.2]
The undersigned hereby irrevocably elects to exercise the right,
represented by this Warrant Certificate, to purchase _____________________
shares of Common Stock in accordance with the terms of Section 3.2 of the
Representative's Warrant Agreement dated as of ____________________, 199_
between U.S. GOLF AND ENTERTAINMENT INC. and FIRST UNITED EQUITIES CORPORATION.
The undersigned requests that a certificate or certificates for such securities
be registered in the name of________________________ whose address is
_________________________________ and whose social security or taxpayer
identification number is __________________________, and that such certificate
or certificates be delivered to ________________________, whose address is
_______________________.
Dated: Signature _________________________________
(Signature must conform in all respects to name of
holder as specified on the face of the Warrant
Certificate.)
-------------------------------------------
(Insert Social Security or Other Identifying Number
of Holder)
19
[FORM OF ASSIGNMENT]
(To be executed by the registered holder if such
holder desires to transfer the Warrant
Certificate.)
FOR VALUE RECEIVED __________________________ hereby sells,
assigns and transfers unto
----------------------------------------------------------------
(Please print name and address of transferee)
______________________________ Representative's Warrants represented by this
Warrant Certificate, together with all right, title and interest therein, and
does hereby irrevocably constitute and appoint _________________________________
Attorney, to transfer the within Warrant Certificate on the books of the
within-named Company, with full power of substitution.
Dated: Signature _________________________________
(Signature must conform in all respects to name of
holder as specified on the face of the Warrant
Certificate.)
-----------------------------------------
(Insert Social Security or Other Identifying Number
of Assignee)
20
