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U.S. GOLF AND ENTERTAINMENT INC.
AND
WESTPORT RESOURCES
INVESTMENT SERVICES, INC.
AND
NATIONAL SECURITIES CORPORATION
REPRESENTATIVE'S
WARRANT AGREEMENT
Dated as of August ___, 1997
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REPRESENTATIVE'S WARRANT AGREEMENT dated as of August , 1997,
between U.S. GOLF AND ENTERTAINMENT INC., a Delaware corporation (the
"Company"), WESTPORT RESOURCES INVESTMENT SERVICES, INC. ("Westport") and
NATIONAL SECURITIES CORPORATION ("National") and its assignees or designees
(Westport and National are hereinafter referred to variously as "Holders" or
"Representatives").
W I T N E S S E T H :
WHEREAS, the Representatives have agreed pursuant to the
underwriting agreement (the "Underwriting Agreement") between the
Representatives and the Company, to act as the representatives of the several
underwriters listed therein (the "Underwriters") in connection with the
Company's proposed public offering of 1,100,000 units (the "Units"), consisting
of one (1) share of common stock (the "Common Stock") and one (1) warrant (the
"Warrant") to purchase one (1) share of Common Stock at an exercise price of
$7.20, at a public offering price of $6,125 per Unit (the "Public Offering").
WHEREAS, pursuant to the Underwriting Agreement, the Company
proposes to issue warrants to the Representatives to purchase up to an aggregate
of 110,000 units (the "Representatives' Warrants").
WHEREAS, the Representatives' 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 Representatives in
consideration for, and as part of the Underwriters' compensation in connection
with, the Representatives acting as the representatives pursuant to the
Underwriting Agreement.
NOW, THEREFORE, in consideration of the premises, the payment
by the Representative to the Company of an aggregate of Eleven dollars
($11.00), the agreements herein set forth and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
1. Grant. The Representative is hereby collectively granted
the right to purchase, at any time from August , 1998 until 5:30 p.m., New York
time, on August , 2002 (5 years from the Effective Date of the registration
statement and any supplement thereto, on Form SB-2, No. 333-4873), at which time
the Representative's Warrants expire, up to an aggregate 110,000 Units (subject
to adjustment as provided in Section 8 hereof) each Unit consisting of one (1)
share of common stock, par value $.001 per share, of the Company (the "Common
Stock") and one (1) Warrant to purchase one (1) share of Common Stock, at an
initial exercise price (subject to adjustment as provided in Section 11 hereof)
of $____ (130% of the Public Offering price) (the "Exercise Price").
2. Representative's Warrant Certificates. The Representative's
warrant certificates (the "Warrant Certificates") delivered and to be 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. Registration of Warrant. The Representative's Warrants
shall be numbered and shall be registered on the books of the Company when
issued.
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4. Exercise of Representative's Warrant.
4.1 Method of Exercise. The Representative's Warrants
initially are exercisable at the Exercise Price (subject to adjustment as
provided in Section 11 hereof) per Representative's Warrant set forth in Section
8 hereof payable by certified or official bank check in New York Clearing House
funds. Upon surrender of a Representative's Warrant Certificate with the annexed
Form of Election to Purchase duly executed, together with payment of the
Exercise Price for the shares of Common Stock purchased at the Company's
principal offices in New York (presently located at 0 Xxxxx Xxxxxx, Xxxxxxx, Xxx
Xxxx 11725) the registered holder of a Representative's 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 Representative's Warrant Certificate are exercisable at the
option of the Holder thereof, in whole or in part (but not as to fractional
Units underlying the Representative's Warrants). In the case of the purchase of
less than all of the Units purchasable under any Representative's Warrant
Certificate, the Company shall cancel said Representative's Warrant Certificate
upon the surrender thereof and shall execute and deliver a new Representative's
Warrant Certificate of like tenor for the balance of the shares of the Units
purchasable thereunder.
4.2 Exercise by Surrender of Representative's
Warrant. In addition to the method of payment set forth in Section 4.1 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 4.1 in exchange for the
number of shares of Common Stock equal to the product of (x) the number of
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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 in Section 9.3 (e) hereof) of the shares of Common Stock minus
the Exercise Price of the shares of Common Stock and the denominator of which is
the Market Price per share of Common Stock. Solely for the purposes of this
Section 4.2, Market Price 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 15 hereof ("Notice Date") or (ii) as the average of the
Market Price for each of the five trading days immediately preceding the Notice
Date, whichever of (i) or (ii) results in a greater Market Price.
5. Issuance of Certificates. Upon the exercise of the
Representative's Warrant, the issuance of certificates for Units or other
securities, properties or rights underlying such Representative's Warrant shall
be made forthwith (and in any event within five (5) business days thereafter)
without charge to the Holder thereof including, without limitation, any tax,
other than income taxes, which may be payable in respect of the issuance
thereof, and such certificates shall (subject to the provisions of Sections 7
and 9 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.
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The Representative's Warrant Certificates and the certificates
representing the Units or other securities, property or rights issued upon
exercise of the Representative's Warrant shall be executed on behalf of the
Company by the manual or facsimile signature of the then present President or
any 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 any Assistant Secretary of the Company. Representative's Warrant Certificates
shall be dated the date of execution by the Company upon initial issuance,
division, exchange, substitution or transfer.
6. Transfer of Representative's Warrant. The Representative's
Warrant shall be transferable only on the books of the Company maintained at its
principal office, where its principal office may then be located, upon delivery
thereof duly endorsed by the Holder or by its duly authorized attorney or
representative accompanied by proper evidence of succession, assignment or
authority to transfer. Upon any registration transfer, the Company shall execute
and deliver the new Representative's Warrant to the person entitled thereto.
7. Restriction On Transfer of Representative's Warrant. The
Holder of a Representative's Warrant Certificate, by its acceptance thereof,
covenants and agrees that the Representative's Warrant is being acquired as an
investment and not with a view to the distribution thereof, and that the
Representative's Warrant may not be sold, transferred, assigned, hypothecated or
otherwise disposed of, in whole or in part, for the term of the Representative's
Warrant, except to officers or partners of the Underwriters, or by operation of
law.
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8. Exercise Price and Number of Securities. Except as
otherwise provided in Section 10 hereof, each Representative's Warrant is
exercisable to purchase one Unit at an initial exercise price equal to the
Exercise Price. The Exercise Price and the number of Units for which the
Representative's Warrant may be exercised shall be the price and the number of
Units which shall result from time to time from any and all adjustments in
accordance with the provisions of Section 11 hereof.
9. Registration Rights.
9.1 Registration Under the Securities Act of 1933.
Each Representative's Warrant Certificate and each certificate representing
Units and any of the other securities issuable upon exercise of the
Representative's Warrant (collectively, the "Warrant Shares") shall bear the
following legend unless (i) such Representative's Warrant or Warrant Shares are
distributed to the public or sold to the underwriters for distribution to the
public pursuant to Section 9 hereof or otherwise pursuant to a registration
statement filed under the Securities Act of 1933, as amended (the "Act"), or
(ii) the Company has received an opinion of counsel, in form and substance
reasonably satisfactory to counsel for the Company, that such legend is
unnecessary for any such certificate:
THE REPRESENTATIVE'S WARRANT REPRESENTED BY THIS CERTIFICATE
AND THE OTHER SECURITIES ISSUABLE UPON EXERCISE THEREOF MAY
NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO (i) AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, (ii)
TO THE EXTENT APPLICABLE, RULE 144 UNDER SUCH ACT (OR ANY
SIMILAR RULE UNDER SUCH ACT RELATING TO THE DISPOSITION OF
SECURITIES), OR (iii) AN OPINION OF COUNSEL, IF SUCH OPINION
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SHALL BE REASONABLY SATISFACTORY TO COUNSEL FOR THE ISSUER,
THAT AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT IS
AVAILABLE.
THE TRANSFER OR EXCHANGE OF THE REPRESENTATIVE'S WARRANT
REPRESENTED BY THE CERTIFICATE IS RESTRICTED IN ACCORDANCE
WITH THE REPRESENTATIVE'S WARRANT AGREEMENT REFERRED TO
HEREIN.
9.2 Piggyback Registration. If, at any time
commencing after the effective date of the Registration Statement and expiring
five (5) years thereafter, the Company proposes to register any of its
securities under the Act (other than in connection with a merger or pursuant to
Form S-4 or Form S-8 or successor form thereto) it will give written notice by
registered mail, at least thirty (30) days prior to the filing of each such
registration statement, to the Holders of the Warrant Shares of its intention to
do so. If any of the Holders of the Warrant Shares notify the Company within
twenty (20) days after mailing of any such notice of its or their desire to
include any such securities in such proposed registration statement, the Company
shall afford such Holders of the Warrant Shares the opportunity to have any such
Warrant Shares registered under such registration statement. In the event that
the managing underwriter for said offering advises the Company in writing that
in their opinion the number of securities requested to be included in such
registration exceeds the number which can be sold in such offering without
causing a diminution in the offering price or otherwise adversely affecting the
offering, the Company will include in such registration (a) first, the
securities the Company proposes to sell, (b) second, the securities held by the
entities that made the demand for registration, (d) third, the Warrant Shares
requested to be included in such registration which in the opinion of such
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underwriter can be sold, pro rata among the Holders of Warrant Shares on the
basis of the number of Representative's Warrant Shares requested to be
registered by such Holders, and (e) fourth, other securities requested to be
included in such registration.
Notwithstanding the provisions of this Section 9.2, the
Company shall have the right at any time after it shall have given written
notice pursuant to this Section 9.2 (irrespective of whether a written request
for inclusion of any such securities shall have been made) to elect not to file
any such proposed registration statement or to withdraw the same after the
filing but prior to the effective date thereof.
9.3 Demand Registration.
(a) At any time commencing one (1) year
after the effective date of the Registration Statement and expiring five (5)
years from the effective date of the Registration Statement, the Holders of the
Representative's Warrants and/or Warrant Shares representing a "Majority" (as
hereinafter defined) of the Representative's Warrants and/or Warrant Shares
shall have the right (which right is in addition to the registration rights
under Section 9.2 hereof), exercisable by written notice to the Company, to have
the Company prepare and file with the Securities and Exchange Commission (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 Holders, in order to comply with the
provisions of the Act, so as to permit a public offering and sale by such
Holders and any other Holders of the Representative's Warrant and/or Warrant
Shares who notify the Company within fifteen (15) days after the Company mails
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notice of such request pursuant to Section 9.3(b) hereof (collectively, the
"Requesting Holders") of their respective Warrant Shares for the earlier of (i)
six (6) consecutive months or (ii) until the sale of all of the Warrant Shares
requested to be registered by the Requesting Holders.
(b) The Company covenants and agrees to give
written notice of any registration request under this Section 9.3 by any Holder
or Holders representing a Majority of the Representative's Warrants and/or
Warrant Shares to all other registered Holders of the Representative's Warrants
and the Warrant Shares within ten (10) days from the date of the receipt of any
such registration request.
(c) In addition to the registration rights
under Section 9.2 and subsection (a) of this Section 9.3, at any time commencing
one (1) year after the effective date of the Registration Statement and expiring
five (5) years from the effective date of the Registration Statement, the
Holders of a Majority of the Representative's Warrants and/or Warrant Shares
shall have the right on one occasion, exercisable by written request to the
Company, to have the Company prepare and file with the Commission a registration
statement so as to permit a public offering and sale by such Holders of their
respective Warrant Shares for the earlier of (i) six (6) consecutive months or
(ii) until the sale of all of the Warrant Shares requested to be registered by
such Holders; provided, however, that the provisions of Section 9.4(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. If the Holders have exercised their rights under Section 9.3(a) then
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the Holders may not exercise their rights under Section 9.3(c) for a period of
six (6) months following the effective date of any registration statement filed
pursuant to Section 9.3(a).
(d) Notwithstanding anything to the contrary
contained herein, if the Company shall not have filed a registration statement
for the Warrant Shares within the time period specified in Section 9.4(a) hereof
pursuant to the written notice specified in Section 9.3(a) of the Holders of a
Majority of the Representative's Warrants and/or Warrant Shares, the Company, at
its option, may repurchase (i) any and all Warrant Shares at the higher of the
Market Price (as defined in Section 9.3(e)) per share of Common Stock on (x) the
date of the notice sent pursuant to Section 9.3(a) or (y) the expiration of the
period specified in Section 9.4(a) and (ii) any and all Representative's Warrant
at such Market Price less the Exercise Price of such Representative's Warrant.
Such repurchase shall be in immediately available funds and shall close within
two (2) days after the later of (i) the expiration of the period specified in
Section 9.4(a) or (ii) the delivery of the written notice of election specified
in this Section 9.3(d).
(e) Definition of Market Price. As used
herein, the phrase "Market Price" at any date shall be deemed to be the last
reported sale price, or, in case 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, if the Common
Stock is not listed or admitted to trading on any national securities exchange,
the average closing sale price as furnished by the NASD through The Nasdaq Stock
Market, Inc. ("Nasdaq") or similar organization if Nasdaq is no longer reporting
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such information, or if the Common Stock is not quoted on Nasdaq, as determined
in good faith by resolution of the Board of Directors of the Company, based on
the best information available to it.
9.4 Covenants of the Company With Respect to
Registration. In connection with any registration under Sections 9.2 or 9.3
hereof, the Company covenants and agrees as follows:
(a) The Company shall use its best efforts
to file a registration statement within ninety (90) days of receipt of any
demand therefor, and to have any registration statements declared effective at
the earliest possible time, and shall furnish each Holder desiring to sell
Warrant Shares 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, and excluding roadshow expenses if the only shares to be
registered in such Registration Statement are Warrant Shares), fees and expenses
in connection with all registration statements filed pursuant to Sections 9.2
and 9.3(a) hereof including, without limitation, the Company's legal and
accounting fees, printing expenses, blue sky fees and expenses. The Holder(s)
will pay all costs, fees and expenses (including those of the Company) in
connection with the registration statement filed pursuant to Section 9.3(c).
(c) The Company will take all necessary
action which may be required in qualifying or registering the Warrant Shares
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
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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 the
Holder(s) of the Warrant Shares to be sold pursuant to any registration
statement and each person, if any, who controls such Holders within the meaning
of Section 15 of the Act or Section 20(a) of the Securities Exchange Act of
1934, as amended ("Exchange Act"), against all loss, claim, damage, expense or
liability (including all expenses reasonably incurred in investigating,
preparing or defending against any claim whatsoever) to which any of them may
become subject under the Act, the Exchange Act or otherwise, arising from such
registration statement but only to the same extent and with the same effect as
the provisions pursuant to which the Company has agreed to indemnify each of the
Underwriters contained in Section 7 of the Underwriting Agreement.
(e) The Holder(s) of the Warrant Shares to
be sold pursuant to a registration statement, and their successors and assigns,
shall severally, and not jointly, indemnify the Company, its officers and
directors and each person, if any, who controls the Company within the meaning
of Section 15 of the Act or Section 20(a) of the Exchange Act, against all loss,
claim, damage or expense or liability (including all expenses reasonably
incurred in investigating, preparing or defending against any claim whatsoever)
to which they may become subject under the Act, the Exchange Act or otherwise,
arising from information furnished by or on behalf of such Holders, or their
successors or assigns, for specific inclusion in such registration statement to
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the same extent and with the same effect as the provisions contained in Section
7 of the Underwriting Agreement pursuant to which the Underwriters have agreed
to indemnify the Company.
(f) Nothing contained in this Agreement
shall be construed as requiring the Holder(s) to exercise their Representative's
Warrant 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 Shares to be included in any
registration statement filed pursuant to Section 9.3 hereof, or permit any other
registration statement to be or remain effective during the effectiveness of a
registration statement filed pursuant to Section 9.3 hereof (other than
registration statements filed prior to an exercise of registration rights by a
Holder of Representatives Warrants and/or Warrant Shares pursuant to Section 9.2
hereof), without the prior written consent of National Securities Corporation or
as otherwise required by the terms of any existing registration rights granted
prior to the date of this Agreement by the Company to the holders of any of the
Company's securities.
(h) The Company shall furnish 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
(and, 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
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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 Act) an earnings statement (which need not be
audited) complying with Section 11(a) of the Act and covering a period of at
least 12 consecutive months beginning after the effective date of the
registration statement.
(j) The Company shall enter into an
underwriting agreement with the managing underwriters (in the case of
registration rights exercised pursuant to Section 9.3 hereof, selected for such
underwriting by Holders holding a Majority of the Warrant Shares requested to be
included in such underwriting, which may be the Representative). Such agreement
shall be 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 as are customarily contained in
agreements of that type used by the managing underwriter. The Holders shall be
parties to any underwriting agreement relating to an underwritten sale of their
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Warrant Shares 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.
(k) For purposes of this Agreement, the term
"Majority" in reference to the Representative's Warrants or Warrant Shares,
shall mean in excess of fifty percent (50%) of the then outstanding
Representative's Warrants or Warrant Shares 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 or (ii) have not been resold to the public pursuant
to a registration statement filed with the Commission under the Act.
10. Obligations of Holders. It shall be a condition precedent
to the obligations of the Company to take any action pursuant to Section 9
hereof that each of the selling Holders shall:
(a) Furnish to the Company such information
regarding themselves, the Warrant Shares held by them, the intended method of
sale or other disposition of such securities, the identity of and compensation
to be paid to any underwriters proposed to be employed in connection with such
sale or other disposition, and such other information as may reasonably be
required to effect the registration of their Warrant Shares.
(b) Notify the Company, at any time when a
prospectus relating to the Warrant Shares covered by a registration statement is
required to be delivered under the Act, of the happening of any event with
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respect to such selling Holder as a result of which the prospectus included in
such registration statement, as then in effect, includes an untrue statement of
a material fact or omits to state a material fact required to be stated therein
or necessary to make the statements therein not misleading in the light of the
circumstances then existing.
11. Adjustments to Exercise Price and Number of Securities.
The Exercise Price in effect at any time and the number and kind of securities
purchased upon the exercise of the Representative's Warrant shall be subject to
adjustment from time to time only upon the happening of the following events:
11.1 Stock Dividend, Subdivision and Combination. In
case the Company shall (i) declare a dividend or make a distribution on its
outstanding shares of Common Stock in shares of Common Stock, (ii) subdivide or
reclassify its outstanding shares of Common Stock into a greater number of
shares, or (iii) combine or reclassify its outstanding shares of Common Stock
into a smaller number of shares, the Exercise Price in effect at the time of the
record date for such dividend or distribution or of the effective date of such
subdivision, combination or reclassification shall be adjusted so that it shall
equal the price determined by multiplying the Exercise Price by a fraction, the
denominator of which shall be the number of shares of Common Stock outstanding
after giving effect to such action, and the numerator of which shall be the
number of shares of Common Stock outstanding immediately prior to such action.
Such adjustment shall be made successively whenever any event listed above shall
occur.
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11.2 Adjustment in Number of Securities. Upon each
adjustment of the Exercise Price pursuant to the provisions of this Section 11,
the number of Warrant Shares issuable upon the exercise at the adjusted Exercise
Price of each Representative's Warrant shall be adjusted to the nearest number
of whole shares of Common Stock by multiplying a number equal to the Exercise
Price in effect immediately prior to such adjustment by the number of Warrant
Shares issuable upon exercise of the Representative's Warrant immediately prior
to such adjustment and dividing the product so obtained by the adjusted Exercise
Price.
11.3 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 Articles of Incorporation of the Company as
amended as of the date hereof, or (ii) any other class of stock resulting from
successive changes or reclassifications of such 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.
11.4 Merger or Consolidation. In case of any
consolidation of the Company with, or merger of the Company into, another
corporation (other than a consolidation or merger which does not result in any
reclassification or change of the outstanding Common Stock), the corporation
formed by such consolidation or merger shall execute and deliver to the Holder a
supplemental warrant agreement providing that the Holder of each
Representative's Warrant then outstanding or to be outstanding 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
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consolidation or merger by a holder of the number of shares of Common Stock for
which such Representative's Warrant might have been exercised immediately prior
to such consolidation, merger, sale or transfer. Such supplemental warrant
agreement shall provide for adjustments which shall be identical to the
adjustments provided in Section 11. The above provision of this subsection shall
similarly apply to successive consolidations or mergers.
11.5 No Adjustment of Exercise Price in Certain
Cases. No adjustment of the Exercise Price shall be made:
(a) Upon the issuance or sale of the
Representative's Warrant or the Warrant Shares;
(b) Upon the issuance or sale of Common
Stock (or any other security convertible, exercisable, or exchangeable into
shares of Common Stock) upon the direct or indirect conversion, exercise, or
exchange of any options, rights, warrants, or other securities or indebtedness
of the Company outstanding as of the date of this Agreement or granted pursuant
to any stock option plan of the Company in existence as of the date of this
Agreement, pursuant to the terms thereof; or
(c) If the amount of said adjustment shall
be less than two cents ($.02) per share, 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 Representative's Warrant.
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11.6 Exchange and Replacement of Representative's
Warrant Certificates. Each Representative's 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 Representative's Warrant
Certificate of like tenor and date representing in the aggregate the right
to purchase the same number of Warrant Shares 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
Representative's 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 Warrant, if mutilated,
the Company will make and deliver a new Warrant Certificate of like tenor, in
lieu thereof.
12. 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 Warrant, nor shall it be
required to issue scrip or pay cash in lieu of fractional interests, it being
the intent of the parties that all fractional interests shall be eliminated by
rounding any fraction up to the nearest whole number of shares of Common Stock
or other securities, properties or rights.
13. 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
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Representative's Warrant, such number of shares of Common Stock or other
securities, properties or rights as shall be issuable upon the exercise thereof.
Every transfer agent ("Transfer Agent") for the Common Stock and other
securities of the Company issuable upon the exercise of the Representative's
Warrant will be irrevocably authorized and directed at all times to reserve such
number of authorized shares of Common Stock and other securities as shall be
requisite for such purpose. The Company will keep a copy of this Agreement on
file with every Transfer Agent for the Common Stock and other securities of the
Company issuable upon the exercise of the Representative's Warrant. The Company
will supply every such Transfer Agent with duly executed stock and other
certificates, as appropriate, for such purpose. The Company covenants and agrees
that, upon exercise of the Representative's Warrant and payment of the Exercise
Price therefor, all shares of Common Stock and other securities issuable upon
such exercise shall be duly and validly issued, fully paid, non-assessable and
not subject to the preemptive rights of any stockholder. As long as the
Representative's Warrant 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 Warrant to be listed (subject to official notice of issuance)
on all securities exchanges on which the Common Stock issued to the public in
connection herewith may then be listed and/or quoted on Nasdaq SmallCap Market.
14. Notices to Representative's 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,
-20-
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 current or retained
earnings, 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
(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 fifteen (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
-21-
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.
15. 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 the
Representative's Warrant, 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 4 hereof or to such other address as the Company may designate
by notice to the Holders.
16. Supplements; Amendments; Entire Agreement. 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 by a writing duly signed by the party against whom enforcement of the
modification or amendment is sought. The Company and the Representative may from
time to time supplement or amend this Agreement without the approval of any
holders of Representative's Warrant Certificates (other than the Representative)
in order to cure any ambiguity, to correct or supplement any provision contained
herein which may be defective or inconsistent with any provisions herein, or to
make any other provisions in regard to matters or questions arising hereunder
-22-
which the Company and the Representative may deem necessary or desirable and
which the Company and the Representative deem shall not adversely affect the
interests of the Holders of Representative's Warrant Certificates.
17. Successors. All of 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.
18. Survival of Representations and Warranties. All statements
in any schedule, exhibit or certificate or other instrument delivered by or on
behalf of the parties hereto, or in connection with the transactions
contemplated by this Agreement, shall be deemed to be representations and
warranties hereunder. Notwithstanding any investigations made by or on behalf of
the parties to this Agreement, all representations, warranties and agreements
made by the parties to this Agreement or pursuant hereto shall survive.
19. Governing Law. This Agreement and each Representative's
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.
20. 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.
-23-
21. 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.
22. 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 Holder(s) of the
Representative's Warrant Certificates or Warrant Shares any legal or equitable
right, remedy or claim under this Agreement; and this Agreement shall be for the
sole and exclusive benefit of the Company and the Underwriters and any other
Holder(s) of the Representative's Warrant Certificates or Warrant Shares.
-24-
23. 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 instrument.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed, as of the day and year first above written.
ATTEST: U.S. GOLF AND ENTERTAINMENT INC.
___________________ By:______________________________________________
Xxxxxxx Xxxxxxx Name: Xxxxxx X. Xxxxxxxxx
Secretary Title: Chief Executive Officer
WESPORT RESOURCES
INVESTMENT SERVICES, INC.
By:_______________________________
Name:
Title:
NATIONAL SECURITIES CORPORATION
By:_______________________________
Name: Xxxxxx X. Xxxxxxxxx
Title: Chairman
-25-
EXHIBIT A
[FORM OF REPRESENTATIVES' WARRANT CERTIFICATE]
THE REPRESENTATIVES' WARRANT REPRESENTED BY THIS CERTIFICATE AND THE OTHER
SECURITIES ISSUABLE UPON EXERCISE THEREOF MAY NOT BE OFFERED OR SOLD EXCEPT
PURSUANT TO (i) AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF
1933, (ii) TO THE EXTENT APPLICABLE, RULE 144 UNDER SUCH 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
FOR THE ISSUER, THAT AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT IS AVAILABLE.
THE TRANSFER OR EXCHANGE OF THE REPRESENTATIVE'S WARRANT REPRESENTED BY THIS
CERTIFICATE IS RESTRICTED IN ACCORDANCE WITH THE WARRANT AGREEMENT REFERRED TO
HEREIN.
EXERCISABLE ON OR BEFORE
5:30 P.M., NEW YORK TIME, _________________, 2002
Representatives' Warrant No. ___
____ Shares of Common Stock
WARRANT CERTIFICATE
This Warrant Certificate certifies that __________________, or registered
assigns, is the registered holder of Warrants to purchase initially, at any time
from ________________, 1998 until 5:30 p.m., New York time on ____________, 2002
("Expiration Date"), up to ____ shares of fully-paid and nonassessable common
stock, par value $.001 ("Common Stock") of U.S. Golf and Entertainment Inc., a
[___________] corporation (the "Company"), at the initial exercise price,
subject to adjustment in certain events, of $_______________ per Share (the
"Exercise Price") upon surrender of this Representatives' 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 Representatives' Warrant
Agreement dated as of _________________, 1997 between the Company and National
Securities 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 such other means as are
permitted by the terms of the Warrant Agreement.
No Warrant may be exercised after 5:30 p.m., New York time, on the
Expiration Date, at which time all Representative's Warrant evidenced hereby,
unless exercised prior thereto, shall thereafter be void.
The Representative's Warrant evidenced by this Warrant Certificate is 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
EXH A-1
immunities thereunder of the Company and the holders (the words "holders" or
"holder" meaning the registered holders or registered holder) of the
Representative's Warrant.
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 thereupon 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
Warrant; provided, however, that the failure of 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 Warrant
evidenced by this Certificate, the Company shall forthwith issue to the holder
hereof a new Warrant Certificate representing such numbered unexercised
Representative's Warrant.
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.
This Warrant Certificate does not entitle any holder thereof to any of the
rights of a shareholder of the Company.
IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to be
duly executed under its corporate seal.
Dated as of ________________, 1997.
ATTEST: U.S. GOLF AND ENTERTAINMENT INC.
By:____________________________
Name: Xxxxxx X. Xxxxxxxxx
Title: Chief Executive Officer
EXH A-2
[FORM OF ELECTION TO PURCHASE PURSUANT TO SECTION 4.1]
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 4.1 of the Representative's Warrant Agreement dated as
of ________ __, 1997 between the Company and National Securities Corporation.
The undersigned requests that a certificate for such securities be registered in
the name of ________________________, whose address is ________________________
and that such certificate be delivered to ________________________, whose
address is ________________________, and if said number of shares shall not be
all the shares purchasable hereunder, that a new Warrant Certificate for the
balance of the shares purchasable under the within Warrant Certificate be
registered in the name of the undersigned warrantholder or his assignee as below
indicated and delivered to the address stated below.
Dated: ___________________
Signature:________________________
(Signature must conform in
all respects to name of
holder as specified on the
face of the Warrant
Certificate.)
Address:
(Insert Social Security or
Other Identifying Number
of Holder)
Signature Guaranteed:
(Signature must be guaranteed by a bank savings and loan association,
stockbroker, or credit union with membership in an approved signature guaranty
Medallion Program pursuant to Securities Exchange Act Rule 17Ad-15.)
EXH A-3
[FORM OF ELECTION TO PURCHASE PURSUANT TO SECTION 4.2]
The undersigned hereby irrevocably elects to exercise the right,
represented by this Warrant Certificate, to purchase ____ shares all in
accordance with the terms of Section 4.2 of the Representative's Warrant
Agreement dated as of ________ __, 1997 between U.S. Golf and Entertainment Inc.
and National Securities Corporation. The undersigned requests that a certificate
for such securities be registered in the name of ________________________, whose
address is ________________________ and that such certificate 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.)
Address:
(Insert Social Security or
Other Identifying Number
of Holder)
Signature Guaranteed:
(Signature must be guaranteed by a bank savings and loan association,
stockbroker, or credit union with membership in an approved signature guaranty
Medallion Program pursuant to Securities Exchange Act Rule 17Ad-15.)
EXH A-4
[FORM OF ASSIGNMENT]
(To be executed by the registered holder if such holder
desires to transfer the Warrant Certificate.)
FOR VALUE RECEIVED ____________________ here sells, assigns and transfers unto
[NAME OF TRANSFEREE] 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.)
Address:
(Insert Social Security or
Other Identifying Number
of Holder)
Signature Guaranteed:
(Signature must be guaranteed by a bank savings and loan association,
stockbroker, or credit union with membership in an approved signature guaranty
Medallion Program pursuant to Securities Exchange Act Rule 17Ad-15.)
EXH A-5
