Exhibit 4.3
Draft: 12/31/97
WARRANT AGREEMENT
AGREEMENT, dated as of ________, 1998, by and among CONNECTICUT VALLEY
SPORTS, INC., a Delaware corporation (the "Company"), CONTINENTAL STOCK TRANSFER
& TRUST COMPANY, a New York corporation, as Warrant Agent (the "Warrant Agent"),
and BRIARWOOD INVESTMENT COUNSEL, a ___________ corporation (the "Underwriter").
W I T N E S S E T H:
WHEREAS, pursuant to an underwriting agreement (the "Underwriting
Agreement") dated ________, 1997 between the Company and the Underwriter, in
connection with (i) a public offering pursuant to a Registration Statement on
Form SB-2 (Registration No. 333-_____) (the "Registration Statement") filed
pursuant to the Securities Act of 1933, as amended (the "Act"), and declared
effective by the Securities and Exchange Commission on ________, 1997 of up to
1,725,000 units (the "Units"), each Unit consisting of one share of common stock
of the Company, par value $0.01 per share (the "Common Stock"), and one
redeemable Common Stock purchase warrant (the "Warrant") and (ii) the issuance
to the Underwriter or its designees of warrants to purchase up to an aggregate
of 150,000 shares of Common Stock and/or 150,000 Warrants (the "Underwriter's
Warrants"), the Company will issue up to an aggregate of 1,875,000 Warrants; and
WHEREAS, the Company desires the Warrant Agent to act on behalf of the
Company, and the Warrant Agent is willing to so act, in connection with the
issuance, registration, transfer, exchange and redemption of the Warrants, the
issuance of certificates representing the Warrants, the exercise of the
Warrants, and the rights of the holders thereof;
NOW THEREFORE, in consideration of the premises and the mutual agreements
hereinafter set forth and for the purpose of defining the terms and provisions
of the Warrants and the certificates representing the Warrants and the
respective rights and obligations thereunder of the Company, the holders of
certificates representing the Warrants and the Warrant Agent, the parties hereto
agree as follows:
SECTION 1. Definitions. As used herein, the following terms shall
have the following meanings, unless the context shall otherwise require:
(a) "Common Stock" shall mean the authorized stock of the Company of
any class, whether now or hereafter authorized, which has the right to
participate in the distribution of earnings and assets of the Company without
limit as to amount or percentage, which at the date hereof consists of Common
Stock of the Company, $.01 par value.
(b) "Corporate Office" shall mean the office of the Warrant Agent (or
its successor) at which at any particular time its principal business shall
be administered, which office is located on the date hereof at 0 Xxxxxxxx,
00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000.
(c) "Exercise Date" shall mean, as to any Warrant, the date on which
the Warrant Agent shall have received both (i) the Warrant Certificate
representing such Warrant, with the exercise form thereon duly executed by
the Registered Holder thereof or his attorney duly authorized in writing, and
(ii) payment in cash, or by official bank or certified check made payable to
the Warrant Agent, of an amount in lawful money of the United States of
America equal to the applicable Purchase Price.
(d) "Initial Warrant Exercise Date" shall mean, as to each Warrant,
_______, 2000, [24 months from Effective Date]; provided, however, that in
the event the Company calls the Warrants for redemption prior to _________,
2000, the Warrants shall be exercisable from the date on which the Warrants
are called for redemption until the redemption date.
(e) "Purchase Price" shall mean the price to be paid upon exercise of
each Warrant in accordance with the terms hereof, which price shall be $6.00
per share, subject to adjustment from time to time pursuant to the provisions
of Section 9 hereof, and subject to the Company's right to reduce the
Purchase Price upon notice to all Warrant Holders.
(f) "Redemption Price" shall mean the price at which the Company may,
at its option, redeem the Warrants in accordance with the terms hereof, which
price shall be $.10 per Warrant, subject to adjustment from time to time
consistent with the provisions of Section 9 hereof.
(g) "Registered Holder" shall mean the person in whose name any
certificate representing Warrants shall be registered on the books maintained
by the Warrant Agent pursuant to Section 6.
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(h) "Transfer Agent" shall mean Continental Stock Transfer & Trust
Company, as the Company's transfer agent, or its authorized successor, as
such.
(i) "Warrant Expiration Date" shall mean, with respect to each Warrant,
5:00 p.m. (Eastern time) on _________, 2003 [5 years after Effective Date],
or on the business day immediately preceding the date fixed for redemption
(as set forth in Section 8), whichever is earlier; provided that if such date
shall in the State of New York be a holiday or a day on which banks are
authorized to close, then 5:00 p.m. (Eastern time) on the next following day
which in the State of New York is not a holiday nor a day on which banks are
authorized to close. Upon notice to all Warrant Holders, the Company shall
have the right to extend the Warrant Expiration Date.
SECTION 2. Warrants and Issuance of Warrant Certificates.
(a) Each Warrant shall initially entitle the Registered Holder of the
Warrant Certificate representing such Warrant to purchase one (1) share of
Common Stock upon the exercise thereof, in accordance with the terms hereof,
subject to modification and adjustment as provided in Section 9.
(b) Upon execution of this Agreement, Warrant Certificates representing
the number of Warrants sold pursuant to the Underwriting Agreement shall be
executed by the Company and delivered to the Warrant Agent. Upon written
order of the Company signed by its President or Chairman or a Vice President
and by its Secretary or an Assistant Secretary, the Warrant Certificates
shall be countersigned, issued and delivered by the Warrant Agent.
(c) From time to time up to the Warrant Expiration Date, the Transfer
Agent shall countersign and deliver stock certificates in required whole
number denominations representing up to an aggregate of 1,875,000 of Common
Stock, subject to adjustment as described herein, upon the exercise of
Warrants in accordance with this Agreement.
(d) From time to time up to the Warrant Expiration Date, the Warrant
Agent shall countersign and deliver Warrant Certificates in required whole
number denominations to the persons entitled thereto in connection with any
transfer or exchange permitted under this Agreement; provided that no Warrant
Certificates shall be issued except (i) those initially issued hereunder,
(ii) those issued on or after the Initial Warrant Exercise Date upon the
exercise of fewer than all Warrants
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represented by any Warrant certificate to evidence any unexercised Warrants held
by the exercising Registered Holder, (iii) those issued upon any transfer or
exchange pursuant to Section 6; (iv) those issued in replacement of lost,
stolen, destroyed or mutilated Warrant Certificates pursuant to Section 7; (v)
those issued pursuant to the Underwriter's Warrants; and (vi) those issued at
the option of the Company, in such form as may be approved by its Board of
Directors, to reflect any adjustment or change in the Purchase Price, the number
of shares of Common Stock purchasable upon exercise of the Warrants or the
Redemption Price therefor made pursuant to Section 9.
(e) Pursuant to the terms of the Underwriter's Warrants, the Underwriter
and its designees may purchase up to an aggregate of 150,000 Warrants.
SECTION 3. Form and Execution of Warrant Certificates.
(a) The Warrant Certificates shall be substantially in the form annexed
hereto as Exhibit A, and may have such letters, numbers or other marks of
identification or designation and such legends, summaries or endorsements
printed, lithographed or engraved thereon as the Company may deem appropriate
and as are not inconsistent with the provisions of this Agreement or as may be
required to comply with any law or with any rule or regulation made pursuant
thereto or with any rule or regulation of any stock exchange on which the
Warrants may be listed, or to conform to usage. The Warrant Certificates shall
be dated the date of issuance thereof (whether upon initial issuance, transfer,
exchange or in lieu of mutilated, lost, stolen or destroyed Warrant
Certificates) and issued in registered form. Warrants shall be numbered
serially with the letter W on the Warrants.
(b) Warrant Certificates shall be executed on behalf of the Company by its
Chairman of the Board, President or any Vice President and by its Secretary or
an Assistant Secretary, by mutual signatures or by facsimile signatures printed
thereon, and shall have imprinted thereon a facsimile of the Company's seal. In
case any officer of the Company who shall have signed any of the Warrant
Certificates shall cease to be such officer of the Company before the date of
issuance of the Warrant Certificates or before countersignature by the Warrant
Agent and issue and delivery thereof, such Warrant Certificates may nevertheless
be countersigned by the Warrant Agent, issued and delivered with the same force
and effect as though the person who signed such Warrant Certificates had not
ceased to be such officer of the Company. After countersignature by the Warrant
Agent, Warrant Certificates shall be delivered by the Warrant Agent to the
Registered Holder
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without further action by the Company, except as otherwise provided by Section
4(a).
(c) It is contemplated that the securities comprising the Units will
become detachable and trade separately immediately upon issuance.
SECTION 4. Exercise.
(a) Each Warrant may be exercised by the Registered Holder thereof at any
time on or after the Initial Warrant Exercise Date, but not after the Warrant
Expiration Date, upon the terms and subject to the conditions set forth herein
and in the applicable Warrant Certificate. A Warrant shall be deemed to have
been exercised immediately prior to the close of business on the Exercise Date
and the person entitled to receive the securities deliverable upon such exercise
shall be treated for all purposes as the holder upon exercise thereof as of the
close of business on the Exercise Date. As soon as practicable on or after the
Exercise Date, the Warrant Agent shall deposit the cash or check received from
the exercise of a Warrant in an account for the benefit of the Company and shall
notify the Company in writing of the exercise of the Warrants. Promptly
following, and in any event within five (5) days after the date of such notice
from the Warrant Agent, the Warrant Agent, on behalf of the Company, shall cause
to be issued and delivered by the Transfer Agent to the person or persons
entitled to receive the same a certificate or certificates for the securities
deliverable upon such exercise (plus a Warrant Certificate for any remaining
unexercised Warrants of the Registered Holder), provided that the Warrant Agent
shall refrain from causing such issuance of certificates pending clearance of
checks received in payment of the Purchase Price pursuant to such Warrants.
Upon the exercise of any Warrant and clearance of the funds received, the
Warrant Agent shall promptly remit the payment received for the Warrant to the
Company or as the Company may direct in writing. Notwithstanding anything in
the foregoing to the contrary, no Warrant will be exercisable unless at the time
of exercise the Company has filed with the Securities and Exchange Commission a
registration statement under the Act covering the shares of Common Stock
issuable upon exercise of such Warrant and such shares have been so registered
or qualified or deemed to be exempt under the securities laws of the state of
residence of the Registered Holder of such Warrant. The Company shall use its
best efforts to have all shares so registered or qualified on or before the date
on which the Warrants become exercisable.
(b) If, on the Exercise Date in respect of the exercise of any Warrant at
any time on or after the first anniversary of the
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date hereof, (i) the market price of the Common Stock is equal to or greater
than the then Purchase Price of the Warrant, (ii) the exercise of the Warrant is
solicited by the Underwriter at such time as the Underwriter is a member of the
National Association of Securities Dealers, Inc. ("NASD"), (iii) the Warrant is
not held in a discretionary account, (iv) disclosure of the compensation
arrangement is made in documents provided to the holders of the Warrants and (v)
the solicitation of the exercise of the Warrant is not in violation of
Regulation M (as such regulation or any successor regulation or rule may be in
effect as of such time of exercise) promulgated under the Securities Exchange
Act of 1934, as amended, then the Underwriter shall be entitled to receive from
the Company, upon exercise of the each of Warrant(s), a fee of five percent (5%)
of the aggregate Purchase Price of the Warrants so exercised (the "Exercise
Fee"). Within five (5) days of the last day of each month commencing with
________, 1999, [first anniversary of date hereof], the Warrant Agent will
notify the Underwriter of each Warrant Certificate which has been properly
completed for exercise by holders of Warrants during the last month. The
Company and Warrant Agent shall determine, in their sole and absolute
discretion, whether a Warrant Certificate has been properly completed. The
Warrant Agent will provide the Underwriter with such information, in connection
with the exercise of each Warrant, as the Underwriter shall reasonably request.
The Company hereby authorizes and instructs the Warrant Agent to deliver to the
Underwriter the Exercise Fee promptly after receipt by the Warrant Agent from
the Company of a check payable to the order of the Underwriter in the amount of
the Exercise Fee. In the event that an Exercise Fee is paid to the Underwriter
with respect to a Warrant which the Company or the Warrant Agent determines is
not properly completed for exercise or in respect of which the Underwriter is
not entitled to an Exercise Fee, the Underwriter will promptly return such
Exercise Fee to the Warrant Agent which shall forthwith return such fee to the
Company. The Underwriter and the Company may at any time, after ________, 1999,
[first anniversary of date hereof] and during business hours, examine the
records of the Warrant Agent, including its ledger of original Warrant
certificates returned to the Warrant Agent upon exercise of Warrants.
Notwithstanding any provision to the contrary, the provisions of this paragraph
may not be modified, amended or deleted without the prior written consent of the
Underwriter.
SECTION 5. Reservation of Shares; Listing; Payment of Taxes; etc.
(a) The Company has reserved, and covenants that it will at all times
reserve and keep available out of its authorized Common Stock, solely for the
purpose of issuance upon exercise of
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Warrants, such number of shares of Common Stock as shall then be issuable upon
the exercise of all outstanding Warrants. The Company covenants that all shares
of Common Stock which shall be issuable upon exercise of the Warrants shall, at
the time of delivery, be duly and validly issued, fully paid, nonassessable and
free from all taxes, liens and charges with respect to the issuance thereof
(other than those which the Company shall promptly pay or discharge) and that
upon issuance such shares shall be listed on each national securities exchange,
if any, on which the other shares of outstanding Common Stock of the Company are
then listed or, if applicable, The Nasdaq Stock Market.
(b) The Company hereby agrees that, so long as any unexpired Warrants
remain outstanding, the Company will file such post-effective amendments to the
Registration Statement as may be necessary to permit it to deliver to each
person exercising a Warrant a prospectus meeting the requirements of Section
10(a)(3) of the Act and otherwise complying therewith, and will deliver such a
prospectus to each such person.
(c) The Company shall pay all documentary, stamp or similar taxes and
other governmental charges that may be imposed with respect to the issuance of
Warrants or the issuance or delivery of any shares upon exercise of the
Warrants; provided, however, that if the shares of Common Stock are to be
delivered in a name other than the name of the Registered Holder of the Warrant
Certificate representing any Warrant being exercised, then no such delivery
shall be made unless the person requesting the same had paid to the Warrant
Agent the amount of transfer taxes or charges incident thereto, if any.
(d) The Warrant Agent is hereby irrevocably authorized to requisition the
Company's Transfer Agent from time to time for certificates representing shares
of Common Stock issuable upon exercise of the Warrants, and the Company will
authorize the Transfer Agent to comply with all such proper requisitions. The
Company will file with the Warrant Agent a statement setting forth the name and
address of the Transfer Agent of the Company for shares of Common Stock issuable
upon exercise of the Warrants, unless the Warrant Agent and the Transfer Agent
are the same entity.
SECTION 6. Exchange and Registration of Transfer.
(a) Warrant Certificates may be exchanged for other Warrant Certificates
representing an equal aggregate number of Warrants of the same class or may be
transferred in whole or in part. Warrant Certificates to be exchanged shall be
surrendered to
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the Warrant Agent at its Corporate Office, and upon satisfaction of all the
terms and provisions hereof, the Company shall execute and the Warrant Agent
shall countersign, issue and deliver in exchange therefor the Warrant
Certificate or Certificates which the Registered Holder making the exchange
shall be entitled to receive.
(b) The Warrant Agent shall keep at its office books in which, subject to
such reasonable regulations as it may prescribe, it shall register Warrant
Certificates and the transfer thereof in accordance with its regular practice.
Upon 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 the aggregate number of Warrants so transferred.
(c) With respect to all Warrant Certificates presented for registration or
transfer, or for exchange or exercise, the "Election to Purchase" or
"Assignment" form, as appropriate, on the reverse thereof shall be duly
endorsed, or be accompanied by a written instrument or instruments of transfer
and subscription, in form satisfactory to the Company and the Warrant Agent,
duly executed by the Registered Holder or his attorney-in-fact authorized in
writing.
(d) A service charge may be imposed by the Warrant Agent for any exchange
or registration of transfer of Warrant Certificates requested by a Registered
Holder. In addition, the Company may require payment by such Registered Holder
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection therewith.
(e) All Warrant Certificates surrendered for exercise or for exchange in
case of mutilated Warrant Certificates shall be promptly canceled by the Warrant
Agent and thereafter retained by the Warrant Agent until termination of this
Agreement or resignation as Warrant Agent, or, with the prior written consent of
the Underwriter, disposed of or destroyed, at the direction of the Company.
(f) Prior to due presentment for registration of transfer thereof, the
Company and the Warrant Agent may deem and treat the Registered Holder of any
Warrant Certificate as the absolute owner thereof and of each Warrant
represented thereby (notwithstanding any notations of ownership or writing
thereon made by anyone other than a duly authorized officer of the Company or
the Warrant Agent) for all purposes and shall not be affected by any notice to
the contrary. The Warrants, which are being publicly
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offered with shares of Common Stock pursuant to the Underwriting Agreement, may
be purchased separately from the shares and will be immediately transferable
separately from the Common Stock.
SECTION 7. Loss or Mutilation. Upon receipt by the Company and the
Warrant Agent of evidence satisfactory to them of the ownership of and loss,
theft, destruction or mutilation of any Warrant Certificate and (in case of
loss, theft or destruction) of indemnity satisfactory to them, and (in the case
of mutilation) upon surrender and cancellation thereof, the Company shall
execute and the Warrant Agent shall (in the absence of notice to the Company
and/or Warrant Agent that the Warrant Certificate has been acquired by a bona
fide purchaser) countersign and deliver to the Registered Holder in lieu thereof
a new Warrant Certificate of like tenor representing an equal aggregate number
of Warrants. Applicants for a substitute Warrant Certificate shall comply with
such other reasonable regulations and pay such other reasonable charges as the
Warrant Agent may prescribe pursuant to Section 6(d) or otherwise.
SECTION 8. Redemption.
(a) Commencing _______, 1999, [one year after Effective Date], on prior
written notice as required pursuant to the provisions of paragraph (b) of this
Section 8 below, the Warrants may, with the prior written consent of the
Underwriter, be redeemed by the Company at the Redemption Price, provided the
closing bid quotation of the Common Stock on The Nasdaq Stock Market or the last
sales price if quoted on a national securities exchange equals or exceeds $7.50
per share, subject to adjustment consistent with the provisions of Section 9
hereof, for 20 consecutive trading days ending on the third trading day prior to
the date on which the Company gives notice of redemption. All Warrants must be
redeemed if any of the Warrants are redeemed.
(b) In case the Company shall desire to exercise its right to so redeem
the Warrants, it shall request the Warrant Agent, or the Underwriter, to mail a
notice of redemption to each of the Registered Holders of the Warrants to be
redeemed, first class, postage prepaid, not earlier than the forty-fifth (45th)
day before the date fixed for redemption and not later than the thirtieth (30th)
day before the date fixed for redemption, at such Registered Holder's last
address as it shall appear on the records of the Warrant Agent. Any notice
mailed in the manner provided herein shall be conclusively presumed to have been
duly given whether or not the Registered Holder receives such notice.
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(c) The notice of redemption shall specify (i) the Redemption Price, (ii)
the date fixed for redemption, (iii) the place where the Warrant Certificates
shall be delivered and the Redemption Price paid, (iv) that the Underwriter will
assist each Registered Holder of a Warrant in connection with the exercise
thereof (if the Underwriter has conducted, or caused to be conducted, the
mailing) and (v) that the right to exercise the Warrant shall terminate at 5:00
p.m. (Eastern time) on the business day immediately preceding the date fixed for
redemption. No failure to mail such notice nor any defect therein or in the
mailing thereof shall affect the validity of the proceedings for such redemption
except as to a holder (a) to whom notice was not mailed or (b) whose notice was
defective. An affidavit of the Warrant Agent or of the Secretary or an
Assistant Secretary of the Underwriter or the Company that notice of redemption
has been mailed shall, in the absence of fraud, be prima facie evidence of the
facts stated therein.
(d) Any right to exercise a Warrant that has been called for redemption
shall terminate at 5:00 p.m. (Eastern time) on the business day immediately
preceding the date fixed for redemption. After such termination, Holders of the
redeemed Warrants shall have no further rights except to receive, upon surrender
of the redeemed Warrant, the Redemption Price.
(e) From and after the date fixed for redemption, the Company shall, at
the place specified in the notice of redemption, upon presentation and surrender
to the Company by or on behalf of the Registered Holder thereof of one or more
Warrants to be redeemed, deliver or cause to be delivered to or upon the written
order of such Holder a sum in cash equal to the Redemption Price of each such
Warrant. From and after the date fixed for redemption and upon the deposit or
setting aside by the Company of a sum sufficient to redeem all the Warrants
called for redemption, such Warrants shall expire and become void and all rights
hereunder and under the Warrant Certificates, except the right to receive
payment of the Redemption Price, shall cease.
SECTION 9. Adjustment of Exercise Price and Number of Shares of Common
Stock or Warrants.
(a) (i) In the event the Company shall, at any time or from time to time
after the date hereof, issue any shares of Common Stock as a stock dividend to
the holders of Common Stock, or subdivide or combine the outstanding shares of
Common Stock into a greater or lesser number of shares (any such sale, issuance,
subdivision or combination being herein called a "Change of Shares"), then, and
thereafter upon each further Change of Shares,
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the applicable Purchase Price in effect immediately prior to such Change of
Shares shall be changed to a price (calculated to the nearest cent) determined
by multiplying the Purchase Price in effect immediately prior thereto by a
fraction, the numerator of which shall be the total number of shares of Common
Stock outstanding immediately prior to such Change of Shares and the denominator
of which shall be the total number of shares of Common Stock outstanding
immediately after such Change of Shares.
(ii) Subject to the exceptions referred to in Section 9(h), in the
event that the Company shall at any time or from time to time issue or sell any
shares of its Common Stock for a consideration per share of Common Stock less
than the then applicable Purchase Price, the Purchase Price shall thereupon be
reduced to a price (calculated to the nearest cent) determined by dividing (x)
an amount equal to the sum of (i) the number of shares of Common Stock of the
Company outstanding immediately prior to such issue or sale multiplied by the
then applicable Purchase Price plus (ii) the consideration, if any, received by
the Company upon such issuance or sale by (y) the total number of shares of
Common Stock of the Company outstanding immediately after such issuance or sale.
(iii) If the Company shall at any time after the date hereof issue or
sell any shares of any other securities convertible into Common Stock or any
options or warrants to purchase Common Stock (except as provided in Section
9(h)), including in connection with retirement of outstanding debt, for a
consideration per share less than the Purchase Price in effect immediately prior
to the time of such issue or sale, then, forthwith upon such issue or sale, the
Purchase Price shall be reduced to the price (calculated to the nearest cent)
determined by dividing (x)an amount equal to the sum of (i) the number of shares
of Common Stock outstanding immediately prior to such issue or sale multiplied
by the Purchase Price at the time plus (ii) the consideration, if any, received
by the Company upon such issue or sale by (y) the total number of shares of
Common Stock outstanding immediately after such issue or sale.
(iv) For purposes of this Section 9(a) the consideration in connection
with any such issue or sale shall be the amount of cash received by the Company
(or, in the case of securities sold to underwriters or dealers for public
offering or to the public through underwriters, the public offering price) for
the sale of such shares or other securities, options or warrants, before
deducting therefrom any commissions or other expenses paid or incurred by the
Company in connection with the issue or sale of such securities, options or
warrants plus any additional cash
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receivable by the Company on conversion or exercise of such other securities,
options or warrants except that, if any portion of such consideration is a
consideration other than cash, the amount of such consideration other than cash
shall be (i) the principal amount thereof, plus any accrued but unpaid interest
thereon and all other amounts payable in connection with such debt including for
expenses and yield maintenance premiums, in the case of debt forgiven, exchanged
or converted, and (ii) the value of such consideration as determined in good
faith by the Board of Directors of the Company (whose determination shall be
conclusive and shall be evidenced by a resolution of the Company's Board of
Directors filed with the Warrant Agent), in the case of any other non-cash
consideration.
(v) If the conversion or exercise price of any securities convertible
into Common Stock or options or warrants to purchase Common Stock is not
specified at the time of the issue or sale of such securities, option or
warrants, the amount thereof, for purposes only of this Section 9(a), shall be
as determined in accordance with Section 9(i).
(vi) In the event of the issuance or sale by the Company of any
securities convertible into Common Stock or any options or warrants to purchase
Common Stock (except as provided in Section 9(h)), the Company shall be deemed
to have issued the maximum number of shares of Common Stock into which such
convertible securities may be converted or the maximum number of shares of
Common Stock deliverable upon the exercise of such options or warrants, as the
case may be, for the minimum consideration payable in respect thereof. On the
expiration of such options or warrants or the termination of the right to
convert such convertible securities, the Purchase Price shall be readjusted
based upon the number of shares of Common Stock actually delivered upon the
exercise of such options or warrants or upon the conversion of such convertible
securities. Except as provided in the next preceding sentence no further
adjustment of the Purchase Price shall be made as a result of the actual
issuance of shares of Common Stock upon the exercise of such options or warrants
or the conversion of such convertible securities.
(b) Upon each adjustment of the applicable Purchase Price pursuant to
Section 9(a), the total number of shares of Common Stock purchasable upon the
exercise of each Warrant shall (subject to the provisions contained in Section
9(c)) be such number of shares (calculated to the nearest tenth) purchasable at
the applicable Purchase Price immediately prior to such adjustment multiplied by
a fraction, the numerator of which shall be the applicable Purchase Price in
effect immediately prior to such
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adjustment and denominator of which shall be the applicable Purchase Price in
effect immediately after such adjustment.
(c) The Company may elect, upon any adjustment of the applicable Purchase
Price, to adjust the number of Warrants outstanding, in lieu of adjusting the
number of shares of Common Stock purchasable upon the exercise of each Warrant
as hereinabove provided, so that each Warrant outstanding after such adjustment
shall represent the right to purchase one share of Common Stock. Each Warrant
held of record prior to such adjustment of the number of Warrants shall become
that number of Warrants (calculated to the nearest tenth) determined by
multiplying the number one by a fraction, the numerator of which shall be the
applicable Purchase Price in effect immediately prior to such adjustment and the
denominator of which shall be the applicable Purchase Price in effect
immediately after such adjustment. Upon each such adjustment of the number of
Warrants, the Redemption Price in effect immediately prior to such adjustment
also shall be adjusted by multiplying such Redemption Price by a fraction, the
numerator of which shall be the Purchase Price in effect immediately after such
adjustment and the denominator of which shall be the Purchase Price in effect
immediately prior to such adjustment. Upon each adjustment of the number of
Warrants pursuant to this Section 9, the Company shall, as promptly as
practicable, cause to be distributed to each Registered Holder of Warrant
Certificates on the date of such adjustment Warrant Certificates evidencing,
subject to Section 10, the number of additional Warrants, if any, to which such
Holder shall be entitled as a result of such adjustment or, at the option of the
Company, cause to be distributed to such Holder in substitution and replacement
for the Warrant Certificates held by such Holder prior to the date of adjustment
(and upon surrender thereof, if required by the Company) new Warrant
Certificates evidencing the number of Warrants to which such Holder shall be
entitled after such adjustment.
(d) In the case of any consolidation or merger of the Company with or into
another corporation (other than a consolidation or merger in which the Company
is the continuing corporation and which does not result in any reclassification,
capital reorganization or other change of outstanding shares of Common Stock),
or in case of any sale or conveyance to another corporation of the property of
the Company as, or substantially as, an entirety (other than a sale/leaseback,
mortgage or other financing transaction), the Company shall cause effective
provision to be made so that each holder of a Warrant then outstanding shall
have the right thereafter, by exercising such Warrant, to purchase the kind and
number of shares of stock or other securities or property (including cash)
receivable upon such consolidation,
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merger, sale or conveyance by a holder of the number of shares of Common Stock
that might have been purchased upon exercise of such Warrant, immediately prior
to such consolidation, merger, sale or conveyance. Any such provision shall
include provision for adjustments that shall be as nearly equivalent as may be
practicable to the adjustments provided for in this Section 9. The foregoing
provisions shall similarly apply to successive consolidations, mergers, sales or
conveyances.
(e) Irrespective of any adjustments or changes in the Purchase Price or
the number of shares of Common Stock purchasable upon exercise of the Warrants,
the Warrant Certificates theretofore and thereafter issued shall, unless the
Company shall exercise its option to issue new Warrant Certificates, continue to
express the applicable Purchase Price per share, the number of shares
purchasable thereunder and the Redemption Price therefor as were expressed in
the Warrant Certificates when the same were originally issued.
(f) After each adjustment of the Purchase Price pursuant to this Section
9, the Company will promptly after the fiscal quarter in which such adjustment
was triggered prepare a certificate signed by the Chairman or President, and by
the Secretary or an Assistant Secretary, of the Company setting forth: (i) the
applicable Purchase Price as so adjusted, (ii) the number of shares of Common
Stock purchasable upon exercise of each Warrant after such adjustment, and, if
the Company shall have elected to adjust the number of Warrants, the number of
Warrants to which the Registered Holder of each Warrant shall then be entitled,
and the adjustment in Redemption Price resulting therefrom, and (iii) a brief
statement of the facts accounting for such adjustment. The Company will
promptly file such certificate with the Warrant Agent and cause a brief summary
thereof to be sent by ordinary first class mail to the Underwriter and to each
Registered Holder of Warrants at his or her last address as it shall appear on
the registry books of the Warrant Agent. No failure to mail such notice nor any
defect therein or in the mailing thereof shall affect the validity thereof
except as to the holder to whom the Company failed to mail such notice, or
except as to the holder whose notice was defective. The affidavit of an officer
of the Warrant Agent or the Secretary or an Assistant Secretary of the Company
that such notice has been mailed shall, in the absence of fraud, be prima facie
evidence of the facts stated therein.
(g) For purposes of Section 9(a), 9(b) and 9(c) hereof, the following
provisions (i) and (ii) shall also be applicable.
14
(i) The number of shares of Common Stock outstanding at any given
time shall include shares of Common Stock owned or held by or for the account of
the Company and the sale or issuance of such treasury shares or the distribution
of any such treasury shares shall not be considered a Change of Shares for
purposes of said sections.
(ii) No adjustment of the Purchase Price shall be made unless such
adjustment would require an increase or decrease of at least $0.05 in such
price; provided that any adjustments which by reason of this clause (ii) are not
required 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(s) so carried forward, shall require an increase or decrease of at
least $0.05 in the Purchase Price then in effect hereunder.
(h) No adjustment to the Purchase Price or to the number of shares of
Common Stock purchasable upon the exercise of each Warrant will be made,
however, with respect to the following:
(1) upon the issuance or exercise of any of the Warrants;
(2) upon (i) the issuance or sale of shares of Common Stock pursuant
to options, warrants or convertible or exchangeable securities outstanding as of
the date of this Agreement or (ii) issuance of shares of Common Stock pursuant
to the Company's 1997 Stock Option Plan as such plan exists on the date hereof;
or
(3) upon the issuance of any shares of Common Stock in connection
with a consolidation or merger in which the Company or a wholly owned subsidiary
of the Company is the continuing corporation and which does not result in any
reclassification, capital reorganization or other change of the outstanding
Common Stock, or (ii) pursuant to and in connection with the acquisition by the
Company or any wholly owned subsidiary of the Company of all or substantially
all of the assets or stock (or other equity interests, as the case may be) of
another entity.
(i) Any determination as to whether an adjustment in the Purchase Price in
effect hereunder is required pursuant to Section 9, or as to the amount of any
such adjustment, if required, shall be binding upon the holders of the Warrants
and the Company if made in good faith by the Board of Directors of the Company.
15
(j) If and whenever the Company shall grant to the holders of Common
Stock, as such, rights or warrants to subscribe for or to purchase, or any
options for the purchase of, Common Stock or securities convertible into or
exchangeable for or carrying a right, warrant or option to purchase Common
Stock, the Company shall concurrently therewith grant to each of the then
Registered Holders of the Warrants all of such rights, warrants or options to
which each such holder would have been entitled if, on the date of determination
of stockholders entitled to the rights, warrants or options being granted by the
Company, such holder were the holder of record of the number of whole shares of
Common Stock then issuable upon exercise (assuming, for purposes of this Section
9(j), that the exercise of Warrants is permissible during periods prior to the
Initial Warrant Exercise Date) of his Warrants. Such grant by the Company to the
holders of the Warrants shall be in lieu of any adjustment which otherwise might
be called for pursuant to this Section 9.
(k) In case the Company shall, at any time prior to the exercise of a
Warrant, make any distribution of its assets to holders of the Common Stock,
then the Registered Holder of such Warrant who exercises his Warrant after the
record date for determination of those Registered Holders of Common Stock
entitled to such distribution of assets shall be entitled to receive, upon
exercise of the Warrant, in addition to Common Stock, the amount of such
distribution which would have been payable to such Registered Holder had he been
the holder of record of the Common Stock receivable upon exercise of such
Warrant on the record date for the determination of those entitled to such
distribution.
SECTION 10. Fractional Warrants and Fractional Shares.
(a) If the number of shares of Common Stock purchasable upon the exercise
of each Warrant is adjusted pursuant to Section 9 hereof, the Company shall
nevertheless not be required to issue fractions of shares, upon exercise of the
Warrants or otherwise, or to distribute certificates that evidence fractional
shares. With respect to any fraction of a share called for upon any exercise
hereof, the Company shall pay to the Holder an amount in cash equal to such
fraction multiplied by the current market value of such fractional share,
determined as follows:
(i) If the Common Stock is listed on a national securities exchange
or admitted to unlisted trading privileges on such exchange or listed for
trading on The Nasdaq Stock Market, the current value shall be the last reported
sale price of the Common Stock on The Nasdaq Stock Market or such exchange on
the last business day prior to the date of exercise of the Warrant, or if no
16
such sale is made on such day, the average of the closing bid and asked prices
for such day on such exchange; or
(ii) If the Common Stock is not listed or admitted to unlisted trading
privileges, the current value shall be the mean of the last reported bid and
asked prices reported by the National Quotation Bureau, Inc. on the last
business day prior to the date of the exercise of the Warrant; or
(iii) If the Common Stock is not so listed or admitted to unlisted
trading privileges and bid and asked prices are not so reported, the current
value shall be an amount determined in such reasonable manner as may be
prescribed by the Board of Directors of the Company.
SECTION 11. Warrant Holders Not Deemed Stockholders. No holder of
Warrants shall, as such, be entitled to vote or to receive dividends or be
deemed the holder of Common Stock that may at any time be issuable upon exercise
of such Warrants for any purpose whatsoever, nor shall anything contained herein
be construed to confer upon the holder of Warrants, as such, any of the rights
of a stockholder of the Company or any right to vote for the election of
directors or upon any matter submitted to stockholders at any meeting thereof,
or to give or withhold consent to any corporate action (whether upon any
recapitalization, issuance or reclassification of stock, change of par value or
change of stock to no par value, consolidation, merger or conveyance or
otherwise), or to receive notice of meetings, or to receive dividends or
subscription rights, until such Holder shall have exercised such Warrants and
been issued shares of Common Stock in accordance with the provisions hereof.
SECTION 12. Rights of Action. All rights of action with respect to this
Agreement are vested in the respective Registered Holders of the Warrants, and
any Registered Holder of a Warrant, without consent of the Warrant Agent or of
the holder of any other Warrant, may, in his own behalf and for his own benefit,
enforce against the Company his right to exercise his Warrants for the purchase
of shares of Common Stock in the manner provided in the Warrant Certificates and
this Agreement.
SECTION 13. Agreement of Warrant Holders. Every holder of a Warrant, by
his acceptance thereof, consents and agrees with the Company, the Warrant Agent
and every other holder of a Warrant that:
(a) The Warrants are transferable only on the registry books of the
Warrant Agent by the Registered Holder thereof in
17
person or by his attorney duly authorized in writing and only if the Warrant
Certificates representing such Warrants are surrendered at the office of the
Warrant Agent, duly endorsed or accompanied by a proper instrument of transfer
satisfactory to the Warrant Agent and the Company in their sole discretion,
together with payment of any applicable transfer taxes; and
(b) The Company and the Warrant Agent may deem and treat the person in
whose name the Warrant Certificate is registered as the holder and as the
absolute, true and lawful owner of the Warrants represented thereby for all
purposes, and neither the Company nor the Warrant Agent shall be affected by any
notice or knowledge to the contrary, except as otherwise expressly provided in
Section 7 hereof.
SECTION 14. Cancellation of Warrant Certificates. If the Company shall
purchase or acquire any Warrant or Warrants, the Warrant Certificate or Warrant
Certificates evidencing the same shall thereupon be delivered to the Warrant
Agent and canceled by it and retired.
SECTION 15. Concerning the Warrant Agent. The Warrant Agent acts
hereunder as agent and in a ministerial capacity for the Company, and its duties
shall be determined solely by the provisions of this Agreement. The Warrant
Agent shall not, by issuing and delivering Warrant Certificates or by 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 any securities or other property delivered upon exercise of any Warrant or
whether any stock issued upon exercise of any Warrant is fully paid and
nonassessable.
The Warrant Agent shall not at any time be under any duty or responsibility
to any holder of Warrant Certificates to make or cause to be made any adjustment
of the Purchase Price or the Redemption Price provided in this Agreement, or to
determine whether any fact exists which may require any such adjustments, or
with respect to the nature or extent of any such adjustment, when made, or with
respect to the method employed in making the same. The Warrant Agent shall not
(i) be liable for any recital or statement of facts contained herein or for any
action taken, suffered 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 or in any Warrant
Certificate, or (iii)
18
be liable for any act or omission in connection with this Agreement except for
its own negligence or willful misconduct.
The Warrant Agent may at any time consult with counsel satisfactory to it
(who may be counsel for the Company or for the Underwriter) and shall incur no
liability or responsibility for any action taken, suffered 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 the
Chairman of the Board, President, any Vice President, its Secretary, or
Assistant Secretary (unless other evidence in respect thereof is herein
specifically prescribed). The Warrant Agent shall not be liable for any action
taken, suffered or omitted by it in accordance with such notice, statement,
instruction, request, direction, order or demand believed by it to be genuine.
The Company agrees to pay the Warrant Agent reasonable compensation for its
services hereunder and to reimburse it for its reasonable expenses hereunder; it
further agrees to indemnify the Warrant Agent and save it harmless against any
and all losses, expenses and liabilities, including judgments, costs and counsel
fees, for anything done or omitted by the Warrant Agent in the execution of its
duties and powers hereunder except losses, expenses and liabilities arising as a
result of the Warrant Agent's negligence or willful misconduct.
In the event of a dispute under this Agreement between the Company and the
Underwriter regarding proceeds received by the Warrant Agent from the exercise
of the Warrants, the Warrant Agent shall have the right, but not the obligation,
to bring an interpleader action to resolve such dispute.
The Warrant Agent may resign its duties and 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), after giving 30 days'
prior written notice to the Company. 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 at the Company's expense. Upon such resignation, or any inability
of the Warrant Agent to act as such hereunder, the Company shall appoint a new
warrant agent in writing. If the Company shall fail to make such appointment
within a period of 15 days after it has been notified in writing of such
resignation by the resigning Warrant Agent, then
19
the Registered Holder of any Warrant Certificate may apply to any court of
competent jurisdiction for the appointment of a new warrant agent. Any new
warrant agent, whether appointed by the Company or by such a court shall be a
bank or trust company having a capital and surplus as shown by its last
published report to its stockholders, of not less than Ten Million Dollars
($10,000,000.00), or a stock transfer company. After acceptance in writing of
such appointment by the 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; but if for any reason 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 and delivered by the resigning Warrant
Agent. Not later than the effective date of any such appointment the Company
shall file notice thereof 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 trust business of the Warrant Agent shall be a
successor warrant agent under this Agreement without any further act, provided
that such corporation is eligible for appointment as 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.
The Warrant Agent, its subsidiaries and affiliates, and any of its or their
officers or directors, may buy and 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 effects 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.
SECTION 16. Modification of Agreement. Subject to the provisions of
Section 4(b), 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 manifest mistake or error herein contained or (ii) that they may
20
deem necessary or desirable and which 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 except
with the consent in writing of the Registered Holders of Warrant Certificates
representing not less than a majority of the outstanding Warrants, and provided,
further, that no change in the number of or nature of the securities purchasable
upon the exercise of any Warrant, or the Purchase Price therefor, or the
acceleration of the Warrant Expiration Date, 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 by this
Agreement as originally executed.
SECTION 17. Notices. All notices, requests, consents and other
communications hereunder shall be in writing and shall be deemed to have been
made three days after such is mailed first class registered or certified mail,
postage prepaid as follows: if to the Registered Holder of a Warrant
Certificate, at the address of such holder as shown on the registry books
maintained by the Warrant Agent; if to the Company, at 0000 Xxxxxxx 00 Xxxxx,
Xxxxxxxxxxxx, Xxxxxxx 00000, Attention: Chief Executive Officer, or at such
other address as may have been furnished to the Warrant Agent in writing by the
Company, with a copy to Gersten, Savage, Xxxxxxxxx & Xxxxxxxxxx LLP, 000 Xxxx
00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxx X. Xxxxxxxxx, Esq.; if to
the Warrant Agent, at Continental Stock Transfer & Trust Company, 0 Xxxxxxxx,
Xxx Xxxx, Xxx Xxxx 00000; if to Briarwood Investment Counsel, at 0000 Xxxx Xxxxx
Xxxxxx, Xxxxx 000, Xxxxx Xxx, Xxxxxxxxxx 00000, Attention: President, with a
copy sent to Zimet, Haines, Xxxxxxxx & Xxxxxx, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000, Attention: Xxxxx Xxxxxx Xxxxxx, Esq.
SECTION 18. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York, without
reference to principles of conflict of laws.
SECTION 19. Binding Effect. This Agreement shall be binding upon and
inure to the benefit of the Company, the Warrant Agent and the Underwriter,
and their respective successors and assigns, and the holders from time to
time of the Warrant Certificates. Nothing in this Agreement is intended or
shall be construed to confer upon any other person any right, remedy or
claim, in equity or at law, or to impose upon any other person any duty,
liability or obligation.
SECTION 20. Termination. This Agreement shall terminate at the close
of business on the Warrant Expiration Date of all the
21
Warrants or such earlier date upon which all Warrants have been exercised
and/or redeemed, except that the Warrant Agent shall account to the Company
for cash held by it and the provisions of Section 15 hereof shall survive
such termination.
SECTION 21. Counterparts. This Agreement may be executed in several
counterparts, which taken together shall constitute a single document.
IN WITNESS WHEREOF, the parties hereto have caused this warrant
Agreement to be duly executed as of the date first above written.
CONNECTICUT VALLEY SPORTS, INC.
By:__________________________________
Name:
Title:
CONTINENTAL STOCK TRANSFER &
TRUST COMPANY
By:__________________________________
Name:
Title: Authorized Officer
BRIARWOOD INVESTMENT COUNSEL
By:__________________________________
Name:
Title:
22
EXHIBIT A
(FORM OF FACE OF WARRANT CERTIFICATE)
No. Warrants
VOID AFTER _______, 2003
WARRANT CERTIFICATE FOR PURCHASE OF COMMON STOCK
CONNECTICUT VALLEY SPORTS, INC.
THIS CERTIFIES THAT, FOR VALUE RECEIVED, __________ or registered assigns
(the "Registered Holder") is the owner of the number of Redeemable Common Stock
Purchase Warrants ("Warrants") specified above. Each Warrant initially entitles
the Registered Holder to purchase, subject to the terms and conditions set forth
in this Certificate and the Warrant Agreement (as hereinafter defined), one (1)
fully paid and nonassessable share of common stock, $0.0001 par value (the
"Common Stock"), of CONNECTICUT VALLEY SPORTS, INC., a Delaware corporation (the
"Company"), at any time from _________, 2000 to the Expiration Date (as
hereinafter defined), upon the presentation and surrender of this Warrant
Certificate with the Election to Purchase Form on the reverse hereof duly
executed, at the corporate office of CONTINENTAL STOCK TRANSFER & TRUST COMPANY
as warrant agent, or its successor (the "Warrant Agent"), accompanied by payment
of $6.00, subject to adjustment (the "Purchase Price") in lawful money of the
United States of America in cash or by official bank or certified check made
payable to the Warrant Agent; provided, however, that in the event the Company
calls the Warrants for redemption prior to _________, 2000, the Warrants shall
be exercisable from the date on which the Warrants are called for redemption
until the redemption date.
This Warrant Certificate and each Warrant represented hereby are issued
pursuant to and are subject in all respects to the terms and conditions set
forth in the Warrant Agreement (the "Warrant Agreement") dated as of _________,
1998, by and among the Company, the Warrant Agent and Briarwood Investment
Counsel (the "Underwriter"). Reference is hereby made to said Warrant Agreement
for a more complete statement of the rights and limitations of rights of the
Registered Holder hereof, the rights and duties of the Warrant Agent and the
rights and obligations of the Company thereunder. Copies of said Warrant
Agreement are on file at the office of the Warrant Agent.
In the event of certain contingencies provided for in the Warrant
Agreement, the Purchase Price or the number of shares of Common Stock subject to
purchase upon the exercise of each Warrant represented hereby are subject to
modifications or adjustments.
Each Warrant represented hereby is exercisable at the option of the
Registered Holder, but no fractional shares of Common Stock will be issued. In
case of the exercise of less than all the Warrants represented hereby, the
Company shall cancel this Warrant Certificate upon the surrender hereof and
shall execute and deliver a new Warrant Certificate or Warrant Certificates of
like tenor, which the Warrant Agent shall countersign, for the balance of such
Warrants.
The term "Expiration Date" shall mean 5:00 p.m. (Eastern time) on
________, 2003, or on the business day immediately preceding the date fixed
for redemption, whichever is earlier. If such date shall in the State of New
York be a holiday or a day on which the banks are authorized to close, then
the Expiration Date shall mean 5:00 p.m. (Eastern time) on the next following
day which in the State of New York is not a holiday or a day on which banks
are authorized to close.
The Company shall not be obligated to deliver any securities pursuant to
the exercise of this Warrant unless a registration statement under the
Securities Act of 1933, as amended, with respect to such securities is
effective. This Warrant shall not be exercisable by a Registered Holder in any
state in which it would be unlawful for the Company to deliver the shares of
Common Stock upon exercise of the Warrants represented hereby.
The Warrant Certificate is exchangeable, upon the surrender hereof by the
Registered Holder at the corporate office of the Warrant Agent, for a new
Warrant Certificate or Warrant Certificates of like tenor representing an equal
aggregate number of Warrants, each of such new Warrant Certificates to represent
such number of Warrants as shall be designated by such Registered Holder at the
time of such surrender. Upon due presentment of this Warrant Certificate at
such office for registration of transfer, together with any transfer fee and any
tax or other governmental charge imposed in connection with such transfer, a new
Warrant Certificate or Warrant Certificates representing an equal aggregate
number of Warrants will be issued to the transferee in exchange therefor,
subject to the limitations provided in the Warrant Agreement.
Prior to the exercise of any Warrant represented hereby, the Registered
Holder shall not be entitled to any rights of a stockholder of the Company,
including, without limitation, the right to vote or to receive dividends or
other distributions, and shall not be entitled to receive any notice of any
proceedings of the Company, except as may be provided in the Warrant Agreement.
Commencing ________, 1999, this Warrant may, with the prior written consent
of the Underwriter, be redeemed at the option of the Company, at the Redemption
Price (as defined in the Warrant Agreement), provided the closing bid quotation
of the Common Stock on The Nasdaq Stock Market or the last sales price if quoted
on a national securities exchange equals or exceeds $7.50 per share (subject to
adjustment as set forth in the Warrant Agreement) for 20 consecutive trading
days ending on the third trading day prior to the date on which the Company
gives notice of redemption. Notice of redemption shall be given not later than
the thirtieth day, and not earlier than the forty fifth day, before the date
fixed for redemption, all as provided in the Warrant Agreement. On and after
the date fixed for redemption, the Registered Holder shall have no rights with
respect to this Warrant except to receive the Redemption Price per Warrant upon
surrender of this Certificate.
Prior to due presentment for registration of transfer hereof, the Company
and the Warrant Agent may deem and treat the Registered Holder as the absolute
owner hereof and of each Warrant represented hereby (notwithstanding any
notations of ownership or writing hereon made by anyone other than a duly
authorized officer of the Company or the Warrant Agent) for all purposes and
shall not be affected by any notice to the contrary.
The Company has agreed to pay a fee of 5% of the Purchase Price to the
Underwriter upon certain conditions as specified in the Warrant Agreement upon
the exercise of this Warrant.
This Warrant Certificate and each Warrant represented hereby shall be
governed by and construed in accordance with the laws of the State of New
York.
This Warrant Certificate shall not be valid unless countersigned by the
Warrant Agent.
IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to be
duly executed, manually or in facsimile by two of its officers thereunto duly
authorized, and a facsimile of its corporate seal to be imprinted hereon.
CONNECTICUT VALLEY SPORTS, INC.
By__________________________________
Its
By__________________________________
Its
Date: _______________
Seal
COUNTERSIGNED:
CONTINENTAL STOCK TRANSFER
& TRUST COMPANY, as
Warrant Agent
By_______________________
Its Authorized Officer
(FORM OF REVERSE OF WARRANT CERTIFICATE)
ELECTION TO PURCHASE FORM
To Be Executed by the Registered Holder
in Order to Exercise Warrants
The undersigned Registered Holder hereby irrevocably elects to exercise
(___) Warrants represented by this Warrant Certificate, and to purchase the
securities issuable upon the exercise of such Warrants, and requests that
certificates for such securities shall be issued in the name of
PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER
_________________________
_________________________
_________________________
_________________________
please print or type name and address
and be delivered to
_________________________
_________________________
_________________________
_________________________
please print or type name and address
and if such number of Warrants shall not be all the Warrants evidenced by this
Warrant Certificate, that a new Warrant Certificate for the balance of such
Warrants be registered in the name of, and delivered to, the Registered Holder
at the address stated below.
The undersigned represents that the exercise of the within Warrant was
solicited by a member of the National Association of Securities Dealers, Inc.
("NASD"). If not
solicited by an NASD member, please write "unsolicited" in the space below.
Unless otherwise indicated by listing the name of another NASD member firm, it
will be assumed that the exercise was solicited by Briarwood Investment Counsel.
Please indicate the name of the NASD member firm which solicited the exercise
of the Warrant.
__________________________________
Name of soliciting NASD Member
Dated: __________________
__________________________________
Name
(Please Print or Typewrite)
__________________________________
Signature
__________________________________
Xxxxxx Xxxxxxx
__________________________________
City, State and Zip Code
__________________________________
Social Security or Other
Taxpayer ID Number
Signature Guaranteed:
__________________________________
ASSIGNMENT
To Be Executed by the Registered Holder
in Order to Assign Warrants
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto
PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER
_________________________
_________________________
_________________________
_________________________
please print or type name and address
(___) of the Warrants represented by this Warrant Certificate, and hereby
irrevocably constitutes and appoints _______________ Attorney to transfer
this Warrant Certificate on the books of the Company, with full power of
substitution in the premises.
Dated:______________ _______________________________________________________
Signature Guaranteed:
___________________________________________
THE SIGNATURE TO THE ASSIGNMENT OR THE ELECTION TO PURCHASE FORM MUST
CORRESPOND TO THE NAME AS WRITTEN UPON THE FACE OF THIS WARRANT CERTIFICATE IN
EVERY PARTICULAR, WITHOUT ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATSOEVER,
AND MUST BE GUARANTEED BY A MEDALLION BANK.
