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EXHIBIT 10.34
JUBILEE GAMING CORPORATION
AND
X.X. XXXXXX & CO., INC.
REPRESENTATIVE'S WARRANT AGREEMENT
DATED AS OF _______________ __, 1997
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REPRESENTATIVE'S WARRANT AGREEMENT
THIS REPRESENTATIVE'S WARRANT AGREEMENT (the "Agreement"), dated as of
___________ ___, 1997, is made and entered into by and between JUBILEE GAMING
ENTERPRISES, INC., a Minnesota corporation (the "Company"), and X.X. XXXXXX &
CO., INC., a Delaware corporation (the "Warrantholder").
The Company agrees to issue and sell, and the Warrantholder agrees to
purchase, for an aggregate purchase price of $5.00, warrants, as hereinafter
described (the "Warrants"), to purchase up to an aggregate of 120,000 units
(the "Units"), each Unit consisting of (i) one (subject to adjustment pursuant
to Section 8 hereof) share (the "Shares") of the Company's Common Stock, $____
par value (the "Common Stock") and (ii) one five-year Common Stock purchase
warrant exercisable to purchase one share of Common Stock, in connection with a
public offering by the Company of 1,200,000 Units pursuant to an underwriting
agreement (the "Underwriting Agreement"), dated ___________ ___, 1996, among
the Company and the Warrantholder, as representative ("Representative") of the
several Underwriters named in the Underwriting Agreement. (The warrants
underlying the Units are hereinafter referred to as the "Unit Warrants." The
shares of Common Stock purchasable upon exercise of the Unit Warrants are
hereinafter referred to as the "Unit Warrant Stock"). The purchase and sale of
the Warrants shall occur on the First Closing Date, as defined in the
Underwriting Agreement, and shall be subject to the conditions to the
Underwriters' obligations to purchase Units thereunder. The Unit Warrants shall
be subject to all of the terms and conditions of the Transfer Agent/Warrant
Agreement, dated as of ___________ ___, 1996, between the Company and Norwest
Bank Minnesota, National Association, as Warrant Agent (the "Warrant
Agreement").
In consideration of the foregoing and for the purpose of defining the
terms and provisions of the Warrants and the respective rights and obligations
thereunder, the Company and the Warrantholder, for value received, hereby agree
as follows:
SECTION 1. TRANSFERABILITY AND FORM OF WARRANTS.
1.1 REGISTRATION. The Warrants shall be numbered and registered on
the books of the Company when issued.
1.2 TRANSFER. The Warrants shall be transferable only on the books
of the Company maintained at its principal office, wherever its principal office
may then be located, upon delivery thereof duly endorsed by the Warrantholder or
by its duly authorized attorney or representative, accompanied by proper
evidence of succession, assignment or authority to transfer. Upon any
registration of transfer, the Company shall execute and deliver new Warrants to
the person entitled thereto.
1.3 LIMITATIONS ON TRANSFER OF THE WARRANTS. Subject to the
provisions of Section 11, the Warrants shall not be sold, transferred, assigned
or hypothecated by the Warrantholder until ____________. 1997 except to (i) one
or more persons, each of whom on the date of transfer is an officer of the
Warrantholder; (ii) any of the several Underwriters set forth on Schedule I to
the Underwriting Agreement or members of the selling group and/or the officers
or partners thereof; (iii) a successor to the Warrantholder in merger or
consolidation; (iv) a purchaser of all or substantially all of the
Warrantholder's assets; or (v) any person receiving the Warrants from one or
more of the persons listed in this subsection 1.3 at such person's or persons'
death pursuant to will, trust or the laws of intestate succession. The Warrants
may be divided or combined, upon request to the Company by the Warrantholder,
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into a certificate or certificates representing the right to purchase the same
aggregate number of Units. Unless the context indicates otherwise, the term
"Warrantholder" shall include any transferee or transferees of the Warrants
pursuant to this subsection 1.3, and the term "Warrants" shall include any and
all warrants outstanding pursuant to this Agreement, including those evidenced
by a certificate or certificates issued upon division, exchange, substitution
or transfer pursuant to this Agreement.
1.4 FORM OF WARRANTS. The text of the Warrants and of the form of
election to purchase Units shall be substantially as set forth in Exhibit "A"
attached hereto. The number of shares issuable upon exercise of the Warrants and
Unit Warrants is subject to adjustment upon the occurrence of certain events,
all as hereinafter provided. The Warrants shall be executed on behalf of the
Company by its Chief Executive Officer or by a Vice President, attested to by
its Secretary or an Assistant Secretary. A Warrant bearing the signature of an
individual who was at any time the proper officer of the Company shall bind the
Company notwithstanding that such individual shall have ceased to hold such
office prior to the delivery of such Warrant or did not hold such office on the
date of this Agreement.
The Warrants shall be dated as of the date of signature thereof by the
Company either upon initial issuance or upon division, exchange, substitution or
transfer.
1.5 LEGEND ON SHARES AND UNIT WARRANTS. Each certificate for Shares
or Unit Warrants (or Unit Warrant Stock issued upon exercise of a Unit Warrant)
initially issued upon exercise of the Warrants or a Unit Warrant shall bear the
following legend, unless, at the time of exercise, such Shares or Unit Warrants
(or Unit Warrant Stock) are subject to a currently effective Registration
Statement under the Act:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 OR ANY STATE SECURITIES LAWS AND MAY NOT
BE SOLD, EXCHANGED, HYPOTHECATED OR TRANSFERRED IN ANY MANNER EXCEPT IN
COMPLIANCE WITH SECTION 11 OF THE AGREEMENT PURSUANT TO WHICH THEY WERE
ISSUED."
Any certificate issued at any time in exchange or substitution for any
certificate bearing such legend (except a new certificate issued upon
completion of a public distribution pursuant to a registration statement under
the Securities Act of 1933, as amended (the "Act"), of the securities
represented thereby) shall also bear the above legend unless, in the opinion of
the Company's counsel, the securities represented thereby need no longer be
subject to such restrictions.
SECTION 2. EXCHANGE OF WARRANT CERTIFICATE. Any Warrant certificate may
be exchanged for another certificate or certificates entitling the
Warrantholder to purchase a like aggregate number of Units as the certificate
or certificates surrendered then entitled such Warrantholder to purchase. Any
Warrantholder desiring to exchange a Warrant certificate shall make such
request in writing delivered to the Company, and shall surrender, properly
endorsed, with signatures guaranteed, the certificate evidencing the Warrant to
be so exchanged. Thereupon, the Company shall execute and deliver to the person
entitled thereto a new Warrant certificate as so requested.
SECTION 3. TERM OF WARRANTS; EXERCISE OF WARRANTS.
(a) Subject to the terms of this Agreement, the Warrantholder shall
have the right, at any time during the period commencing at 9:00 a.m., New York
City Time, on ____________, 1997 and ending at 5:00 p.m., New York City Time, on
____________, 2001
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(the "Termination Date"), to purchase from the Company up to the number of
fully paid and nonassessable Units which the Warrantholder may at the time be
entitled to purchase pursuant to this Agreement, upon surrender to the Company,
at its principal office, of the certificate evidencing the Warrants to be
exercised, together with the purchase form on the reverse thereof duly filled
in and signed, with signatures guaranteed, and upon payment to the Company of
the Warrant Price (as defined in and determined in accordance with the
provisions of this section 3 and sections 7 and 8 hereof), for the number of
Units in respect of which such Warrants are then exercised, but in no event for
less than 100 Units (unless less than an aggregate of 100 Units are then
purchasable under all outstanding Warrants held by a Warrantholder).
(b) Except as otherwise provided for in this Section, payment of the
aggregate Warrant Price shall be made in cash or by check, or any combination
thereof. No Warrant may be exercised by the Warrantholder after 5:00 p.m., New
York City Time, on _____________, 2001. Subject to the terms of this agreement,
each Warrant may be exercised to purchase one Unit at a price of $__________
[120% of the Unit Offering price] and each Unit Warrant shall be exercisable to
purchase one share of Common Stock at a price of $________ [120% of the Warrant
exercise price] per share. The Unit Warrant Price is further subject to
adjustment as set forth herein and as is provided in Section 4 of the Warrant
Agreement.
Upon such surrender of the Warrants and payment of such Warrant Price as
aforesaid, the Company shall issue and cause to be delivered with all
reasonable dispatch to or upon the written order of the Warrantholder and in
such name or names as the Warrantholder may designate a certificate or
certificates for the number of full Shares and Unit Warrants so purchased upon
the exercise of the Warrant, together with cash, as provided in Section 9
hereof, in respect of any fractional Shares otherwise issuable upon such
surrender. Such certificate or certificates shall be deemed to have been issued
and any person so designated to be named therein shall be deemed to have become
a holder of record of such securities as of the date of surrender of the
Warrants and payment of the Warrant Price, as aforesaid, notwithstanding that
the certificate or certificates representing such securities shall not actually
have been delivered or that the stock or Unit Warrant transfer books of the
Company shall then be closed. The Warrants shall be exercisable, at the
election of the Warrantholder, either in full or from time to time in part and,
in the event that a certificate evidencing the Warrants is exercised in respect
of less than all of the Units specified therein at any time prior to the
Termination Date, a new certificate evidencing the remaining portion of the
Warrants will be issued by the Company.
(c) Notwithstanding the provisions of Section 1(b) with respect to the
payment of the aggregate Warrant Price to the contrary, the Holder may elect to
exercise this Warrant, in whole or in part, by receiving Units equal to the
value (as herein determined) of the portion of this Warrant then being
exercised, in which event the Company shall issue to the Holder the number of
Units determined by using the following formula:
X = Y(A-B)
------
A
where: X = the number of Units to be issued to the Holder under the
provisions of this Section 1(c).
Y = the number of Units that would otherwise be issued upon such
exercise.
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A = the Current Fair Market Value (as hereinafter defined) of one
Unit calculated as of the last trading day immediately
preceding such exercise.
B = the Exercise Price
As used herein, the "Current Fair Market Value" of the Unit as of a
specified date shall mean with respect to each Unit, (i) the aggregate of the
average of the last reported sales price regular way of the Common Stock and
the Warrants issuable pursuant to the Warrant Agreement sold on all securities
exchanges on which such securities may at the time be listed, or (ii) if there
have been no sales on any such exchange on such day, the average of the highest
bid and lowest asked prices on all such exchanges at the end of such day, or
(iii) if on such day such securities are not so listed, the average of the
representative bid and asked prices quoted in the NASDAQ System as of 4:00
p.m., New York time, or (iv) if on such day such securities are not quoted in
the NASDAQ System, the average of the highest bid and lowest asked prices on
such day in the domestic over-the-counter market as reported by the National
Quotation Bureau, Incorporated or any similar successor organization, in each
such case averaged over a period of 21 days consisting of the day as of which
the Current Fair Market Value is being determined and the 20 consecutive
business days prior to such day. If on the Date for which Current Fair Market
Value is to be determined such securities are not listed on any securities
exchange or quoted in the NASDAQ System or the over-the-counter market, then
Current Fair Market Value of such securities shall be the highest price per
share and per warrant which the Company could then obtain from a willing buyer
(not a current employee or director) for such securities sold by the Company
for such securities, as determined in good faith by the Board of Directors of
the Company, unless prior to such date the Company has become subject to a
merger, consolidation, reorganization, acquisition or other similar transaction
pursuant to which the Company is not the surviving entity, in which case the
Current Fair Market Value of the securities shall be deemed to be the per share
value received or to be received in such transaction by the holder of such
securities.
SECTION 4. PAYMENT OF TAXES. The Company will pay all documentary stamp
taxes, if any, attributable to the initial issuance of the Warrants or the
securities comprising the Units; provided, however, the Company shall not be
required to pay any tax which may be payable in respect of any secondary
transfer of the Warrants or the securities comprising the Units.
SECTION 5. MUTILATED OR MISSING WARRANTS. In case the certificate or
certificates evidencing the Warrants shall be mutilated, lost, stolen or
destroyed, the Company shall, at the request of the Warrantholder, issue and
deliver in exchange and substitution for and upon cancellation of the mutilated
certificate or certificates, or in lieu of and substitution for the certificate
or certificates lost, stolen or destroyed, a new Warrant certificate or
certificates of like tenor and representing an equivalent right or interest,
but only upon receipt of evidence satisfactory to the Company of such loss,
theft or destruction of such Warrant and a bond of indemnity, if requested,
also satisfactory in form and amount at the applicant's cost. Applicants for
such substitute Warrants certificates shall also comply with such other
reasonable regulations and pay such other reasonable charges as the Company may
prescribe.
SECTION 6. RESERVATION OF SHARES. There have been reserved, and the
Company shall at all times keep reserved so long as the Warrants remain
outstanding, out of its authorized Common Stock, such number of shares of
Common Stock as shall be subject to purchase under the Warrants (including such
number of shares of Unit Warrant Stock subject to purchase upon exercise of the
Unit Warrants). Every transfer agent for the Common Stock and other securities
of the Company issuable upon the exercise of the Warrants will be irrevocably
authorized and directed at all times to reserve such number of authorized
shares and other securities as shall be requisite for such purpose. The Company
will keep a copy of this
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Agreement and the Warrant Agreement on file with every transfer agent for the
Common Stock and other securities of the Company issuable upon the exercise of
the Warrants. The Company will supply every such transfer agent with duly
executed stock and other certificates, as appropriate, for such purpose and
will provide or otherwise make available any cash which may be payable as
provided in Section 9 hereof.
SECTION 7. WARRANT PRICE. The price per Unit at which Units shall be
purchasable upon the exercise of the Warrants (the "Warrant Price") shall be
$_______ [120% of the Unit offering price], subject to further adjustment
pursuant to Section 8 hereof.
SECTION 8. ADJUSTMENT OF NUMBER OF SHARES. The number and kind of
securities purchasable upon the exercise of the Warrants and the Warrant Price
shall be subject to adjustment from time to time upon the happening of certain
events, as follows:
8.1 ADJUSTMENTS. The number of Shares purchasable upon the exercise
of the Warrants shall be subject to adjustment as follows:
(a) In case the Company shall (i) pay a dividend in Common Stock
or make a distribution in Common Stock, (ii) subdivide its outstanding Common
Stock, (iii) combine its outstanding Common Stock into a smaller number of
shares of Common Stock, or (iv) issue by reclassification of its Common Stock
other securities of the Company, the number of Shares purchasable upon exercise
of the Warrants immediately prior thereto shall be adjusted so that the
Warrantholder shall be entitled to receive the kind and number of Shares or
other securities of the Company which it would have owned or would have been
entitled to receive immediately after the happening of any of the events
described above, had the Warrants been exercised immediately prior to the
happening of such event or any record date with respect thereto. Any adjustment
made pursuant to this subsection 8.l(a) shall become effective immediately after
the effective date of such event retroactive to the record date, if any, for
such event.
(b) In case the Company shall fix a record date for the issuance
of rights or warrants to all holders of its Common Stock entitling them to
subscribe for or purchase shares of Common Stock (or securities convertible into
Common Stock) at a price (or having a conversion price per share) less than the
Initial Price (defined as $______ per share of Common Stock), the Warrant Price
shall be adjusted so that it shall equal the price determined by multiplying the
number of shares then comprising a Unit by the Warrant Price in effect
immediately prior to the date of such issuance, multiplied by a fraction, the
numerator of which shall be the sum of the number of shares of Common Stock
outstanding on the record date mentioned below plus the number of additional
shares of Common Stock which the aggregate offering price of the total number of
shares of Common Stock so offered (or the aggregate conversion price of the
convertible securities so offered) would purchase at the Initial Price, and the
denominator of which shall be the sum of the number of shares of Common Stock
outstanding on such record date and the number of additional shares of Common
Stock offered for subscription or purchase (or into which the convertible
securities so offered are convertible). Such adjustment shall be made
successively whenever such rights or warrants are issued and shall become
effective immediately after the record date for the determination of
stockholders entitled to receive such rights or warrants; and to the extent that
shares of Common Stock are not delivered (or securities convertible into Common
Stock are not delivered) after the expiration of such rights or warrants, the
Warrant Price shall be readjusted to the Warrant Price which would then be in
effect had the adjustments made upon the issuance of such rights or warrants
been made upon the basis of delivery of only the number of shares of Common
Stock (or securities convertible into Common Stock) actually delivered.
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(c) In case the Company shall hereafter distribute to all holders
of its Common Stock evidences of its indebtedness or assets (excluding cash
dividends or distributions and dividends or distributions referred to in
Subsection (a) above) or subscription rights or warrants (excluding those
referred to in Subsection (b) above), then in each such case the Warrant Price
in effect thereafter shall be determined by multiplying the number of shares
then comprising a Unit by the Warrant Price in effect immediately prior thereto,
multiplied by a fraction, the numerator of which shall be the total number of
shares of Common Stock then outstanding multiplied by the Initial Price, less
the fair market value (as determined by the Company's Board of Directors) of
said assets, or evidences of indebtedness so distributed or of such rights or
warrants, and the denominator of which shall be the total number of shares of
Common Stock outstanding multiplied by such Initial Price. Such adjustment
shall be made whenever any such distribution is made and shall become effective
immediately after the record date for the determination of shareholders entitled
to receive such distribution.
(d) Whenever the Warrant Price payable upon exercise of the
Representative's Warrant is adjusted pursuant to Subsections (a), (b) or (c)
above, the number of Units purchasable upon exercise of this Representative's
Warrant shall simultaneously be adjusted by multiplying the number of Units
issuable upon exercise of this Representative's Warrant by the Warrant Price in
effect on the date hereof and dividing the product so obtained by the Warrant
Price, as adjusted.
(e) Whenever the number of Shares purchasable upon the exercise
of the Warrants is adjusted as herein provided, the Company shall cause to be
promptly mailed to the Warrantholder by first class mail, postage prepaid,
notice of such adjustment and a certificate of the chief financial officer of
the Company setting forth the number of Shares purchasable upon the exercise of
the Warrants after such adjustment, a brief statement of the facts requiring
such adjustment and the computation by which such adjustment was made.
(f) For the purpose of this subsection 8.1 the term "Common
Stock" shall mean (i) the class of stock designated as the Common Stock of the
Company at the date of this Agreement, 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. In the event that at any time, as a result of an
adjustment made pursuant to this Section 8, the Warrantholder shall become
entitled to purchase any securities of the Company other than Common Stock and
Unit Warrants, (i) if the Warrantholder's right to purchase is on any other
basis than that available to all holders of the Company's Common Stock, the
Company shall obtain an opinion of an independent investment banking firm
valuing such other securities and (ii) thereafter the number of such other
securities so purchasable upon exercise of the Warrants shall be subject to
adjustment from time to time in a manner and on terms as nearly equivalent as
practicable to the provisions with respect to the Shares contained in this
Section 8.
(i) Upon the expiration of any rights, options, warrants or
conversion privileges, if such shall not have been exercised, the number of
Shares purchasable upon exercise of the Warrants, to the extent the Warrants
have not then been exercised, shall, upon such expiration, be readjusted and
shall thereafter be such as they would have been had they been originally
adjusted (or had the original adjustment not been required, as the case may be)
on the basis of (A) the fact that the only shares of Common Stock so issued were
the shares of Common Stock, if any, actually issued or sold upon the exercise of
such rights, options, warrants or conversion privileges, and (B) the fact that
such shares of Common Stock, if any, were issued or sold for the consideration
actually received by the Company upon such exercise plus the consideration, if
any, actually received by the Company for the issuance, sale or grant of all
such rights, options, warrants or conversion privileges whether or not
exercised; provided, however, that no such readjustment shall have the
effect of decreasing the number of
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Shares purchasable upon exercise of the Warrants by an amount in excess of the
amount of the adjustment initially made in respect of the issuance, sale or
grant of such rights, options, warrants or conversion privileges.
8.2 NO ADJUSTMENT FOR DIVIDENDS. Except as provided in subsection
8.1, no adjustment in respect of any dividends or distributions out of earnings
shall be made during the terms of the Warrants or upon the exercise of Warrants.
8.3 NO ADJUSTMENT IN CERTAIN CASES. No adjustment shall be made
pursuant to Sections 3 or 8 hereof in connection with the issuance of Units,
Shares, Unit Warrants or Unit Warrant Stock sold as part of the public sale and
issuance of Units pursuant to the Underwriting Agreement or the issuance of
Units, Shares, Unit Warrants or Unit Warrant Stock upon exercise of the
Warrants. No adjustment in the Warrant Price shall be required if such
adjustment is less than $.05; provided, however, that any adjustments which by
reason of this Section 8.3 are not required to be made shall be carried forward
and taken into account in any subsequent adjustment. All calculations under
this Section B shall be made to the nearest cent or to the nearest
one-thousandth of a share, as the case may be.
8.4 PRESERVATION OF PURCHASE RIGHTS UPON RECLASSIFICATION,
CONSOLIDATIONS. In case of any consolidation of the Company with, or merger of
the Company into, another corporation or in case of any sale or conveyance to
another corporation of the property, assets or business of the Company as an
entirety or substantially as an entirety, the Company or such successor or
purchasing corporation, as the case may be, shall execute with the Warrantholder
an agreement that the Warrantholder shall have the right thereafter upon payment
of the Warrant Price in effect immediately prior to such action to purchase,
upon exercise of the Warrants, the kind and amount of shares and other
securities and property which it would have owned or have been entitled to
receive after the happening of such consolidation, merger, sale or conveyance
had the Warrants (and each underlying security) been exercised immediately prior
to such action. In the event of a merger described in Section 368(a)(2)(E) of
the Internal Revenue Code of 1986, as amended, in which the Company is the
surviving corporation, the right to purchase Units under the Warrants shall
terminate on the date of such merger and thereupon the Warrants shall become
null and void, but only if the controlling corporation shall agree to substitute
for the Warrants its warrant which entitles the holder thereof to purchase upon
its exercise the kind and amount of shares and other securities and property
which it would have owned or been entitled to receive had the Warrants been
exercised immediately prior to such merger. Any such agreements referred to in
this subsection 8.4 shall provide for adjustment, which shall be as nearly
equivalent as may be practicable to the adjustments provided for in Section 8
hereof. The provisions of this subsection 8.4 shall similarly apply to
successive consolidations, mergers, sales or conveyances.
8.5 PAR VALUE OF SHARES OF COMMON STOCK. Before taking any action
which would cause an adjustment effectively reducing the portion of the Warrant
Price allocable to each Share below the then par value per share of the Common
Stock issuable upon exercise of the Warrants, the Company will take any
corporate action which, in the opinion of its counsel, may be necessary in order
that the Company may validly and legally issue fully paid and nonassessable
Common Stock upon exercise of the Warrants.
8.6 INDEPENDENT PUBLIC ACCOUNTANTS. The Company may retain a firm of
independent public accountants of recognized national standing (which may be any
such firm regularly employed by the Company) to make any computation required
under this Section 8, and a certificate signed by such firm shall be conclusive
evidence of the correctness of any computation made under this Section 8.
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8.7 STATEMENT ON WARRANT CERTIFICATES. Irrespective of any
adjustments in the number of securities issuable upon exercise of Warrants,
Warrant certificates theretofore or thereafter issued may continue to express
the same number of securities as are stated in the similar Warrant certificates
initially issuable pursuant to this Agreement. However, the Company, at any time
in its sole discretion (which shall be conclusive), may make any change in the
form of Warrant certificate that it may deem appropriate and that does not
affect the substance thereof and any Warrant certificate thereafter issued,
whether upon registration of transfer of, or in exchange or substitution for, an
outstanding Warrant certificate, may be in the form so changed.
SECTION 9. FRACTIONAL INTERESTS; CURRENT MARKET PRICE. The Company
shall not be required to issue fractional Shares on the exercise of the
Warrants. If any fraction of a Share would, except for the provisions of this
Section 9, be issuable on the exercise of the Warrants (or specified portion
thereof), the Company shall pay an amount in cash equal to the then Current
Market Price multiplied by such fraction. For purposes of this Agreement, the
term "Current Market Price" shall mean (i) if the Common Stock is traded in the
NASDAQ Small Cap Market and not in the NASDAQ National Market System nor on any
national securities exchange, the average, of the per share closing bid prices
of the Common Stock on the thirty (30) consecutive trading days immediately
preceding the date in question, as reported by NASDAQ or an equivalent generally
accepted reporting service, or (ii) if the Common Stock is traded in the NASDAQ
National Market System or on a national securities exchange, the average for the
thirty (30) consecutive trading days immediately preceding the date in question,
of the daily per share closing prices of the Common Stock in the NASDAQ National
Market System or on the principal stock exchange on which it is listed, as the
case may be. For purposes of clause (i) above, if trading in the Common Stock is
not reported by NASDAQ, the bid price referred to in said clause shall be the
lowest bid price as reported in the "pink sheets" published by National
Quotation Bureau, Incorporated. The closing price referred to in clause (ii)
above shall be the last reported sale price or, in case no such reported sale
takes place on such day, the average of the reported closing bid and asked
prices, in either case in the NASDAQ National Market System or on the national
securities exchange on which the Common Stock is then listed.
SECTION 10. NO RIGHTS AS STOCKHOLDER; NOTICES TO WARRANTHOLDER.
Nothing contained in this Agreement or in the Warrants shall be construed as
conferring upon the Warrantholder or its transferees any rights as a stockholder
of the Company, including the right to vote, receive dividends, consent or
receive notices as a stockholder in respect of any meeting of stockholders for
the election of directors of the Company or any other matter. If, however, at
any time prior to the expiration of the Warrants and prior to their exercise,
any one or more of the following events shall occur:
(a) any action which would require an adjustment pursuant to Section
8.1; or
(b) a dissolution, liquidation or winding up of the Company (other
than in connection with a consolidation, merger or sale of its property, assets
and business as an entirety or substantially as an entirety) shall be proposed;
then the Company shall give notice in writing of such event to the
Warrantholder, as provided in Section 14 hereof, at least twenty (20) 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 any relevant
dividend, distribution, subscription rights or other rights or for the
determination of stockholders entitled to vote on such proposed dissolution,
liquidation or winding up. Such notice shall specify such record date or date
of closing the transfer books, as the case may be. Failure to mail or receive
such notice or any defect therein shall not affect the validity of any action
taken with respect thereto.
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SECTION 11. RESTRICTIONS ON TRANSFER; REGISTRATION RIGHTS.
(a) The Warrantholder agrees that prior to making any disposition of
the Warrants, the Shares, the Unit Warrants or the Unit Warrant Stock, other
than to persons or entities identified in clauses (i) through (v), inclusive, of
Section 1.3, the Warrantholder shall give written notice to the Company
describing briefly the manner in which any such proposed disposition is to be
made; and no such disposition shall be made if the Company has notified the
Warrantholder that in the opinion of counsel reasonably satisfactory to the
Warrantholder a registration statement or other notification or post-effective
amendment thereto (hereinafter collectively a "Registration Statement") under
the Act is required with respect to such disposition and no such Registration
Statement has been filed by the Company with, and declared effective, if
necessary, by the Securities and Exchange Commission (the "Commission").
(b) The Company shall be obligated to the owners of the Warrants, the
Shares, the Unit Warrants and the Unit Warrant Stock to file a Registration
Statement as follows:
(i) Whenever during the four-year period beginning on
___________, 1997 and ending on ___________, 2001, the Company proposes to file
with the Commission a Registration Statement (other than as to securities issued
pursuant to an employee benefit plan or as to a transaction subject to Rule 145
promulgated under the Act or which a Form S-4 Registration Statement could be
used), it shall, at least twenty (20) days prior to each filing, give written
notice of such proposed filing to the Warrantholder and each holder of Shares,
Unit Warrants and Unit Warrant Stock, at their respective addresses as they
appear on the records of the Company, and shall offer to include and shall
include in such filing any proposed disposition of the Shares, Unit Warrants and
Unit Warrant Stock upon receipt by the Company, not less than ten (10) days
prior to the proposed filing date, of a request therefor setting forth the facts
with respect to such proposed disposition and all other information with respect
to such person reasonably necessary to be included in such Registration
Statement. In the event that the managing underwriter, if any, for said offering
advises the Company in writing that the inclusion of such securities in the
offering would be detrimental to the offering, such securities shall
nevertheless be included in the Registration Statement provided that the
Warrantholder and each holder of Warrants and Shares, Unit Warrants and Unit
Warrant Stock desiring to have such securities included in the Registration
Statement agrees in writing, for a period of ninety (90) days following such
offering not to sell or otherwise dispose of such securities pursuant to such
Registration Statement, which Registration Statement the Company shall keep
effective for a period of at least nine months following the expiration of such
ninety (90) day period.
(ii) In addition to any Registration Statement pursuant to
subparagraph (i) above, during the four-year period beginning on
_______________, 1997 and ending on ________, 2001, the Company, as promptly as
practicable (but in any event within sixty (60) days), after written request
(the "Request") by X.X. XXXXXX & CO., INC., or by a person or persons holding
(or having the right to acquire by virtue of holding the Warrants or Unit
Warrants) at least 50% of the shares of Common Stock which have been (or may be)
issued upon exercise of the Warrants and Unit Warrants, will prepare and file at
its own expense a Registration Statement with the Commission and appropriate
Blue Sky authorities sufficient to permit the public offering of the Shares, the
Unit Warrants and the Unit Warrant Stock, and will use its best efforts at its
own expense through its officers, directors, auditors and counsel, in all
matters necessary or advisable, to cause such Registration Statement to become
effective as promptly as practicable and to maintain such effectiveness so as to
permit resale of the Shares, the Unit Warrants and the Unit Warrant Stock
covered by the Request until the earlier of the time that all such
securities have been sold or the expiration of ninety (90) days from the
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effective date of the Registration Statement; provided, however, that the
Company shall only be obligated to file a Registration Statement under this
Section 1 l(b)(ii) on two occasions.
(c) Except as set forth in the last sentence of this paragraph,
all fees, disbursements and out-of-pocket expenses (other than Warrantholder's
brokerage fees and commissions and legal fees of counsel to the Warrantholder,
if any) in connection with the filing of any Registration Statement under
Section 11) (or obtaining the opinion of counsel and any no-action position of
the Commission with respect to sales under Rule 144) and in complying with
applicable securities and Blue Sky laws shall be borne by the Company. The
Company at its expense will supply any Warrantholder and any holder of Shares,
Unit Warrants or Unit Warrant Stock with copies of such Registration Statement
and the prospectus included therein and other related documents and opinions and
no-action letters in such quantities as may be reasonably requested by the
Warrantholder or holder of Shares, Unit Warrants or Unit Warrant Stock.
Notwithstanding the foregoing, all costs and expenses of a second Registration
Statement filed pursuant to Section 11(b)(ii) shall be borne by the holders of
the securities included therein.
(d) The Company shall not be required by this Section 11 to file
such Registration Statement if, in the opinion of counsel for the Warrantholders
and holders of Shares, Unit Warrants and Unit Warrant Stock and the Company (or,
should they not agree, in the opinion of another counsel experienced in
securities law matters acceptable to counsel for such holders and the Company),
the proposed public offering or other transfer as to which such Registration
Statement is requested is exempt from applicable federal and state securities
laws and would result in all purchasers or transferees obtaining securities
which are not "restricted securities," as defined in Rule 144 under the Act.
(e) The Company agrees that until all Shares, Unit Warrants and
Unit Warrant Stock have been sold under a Registration Statement or pursuant to
Rule 144 under the Act, it will keep current in filing all materials required to
be filed with the Commission in order to permit the holders of such securities
to sell the same under Rule 144.
SECTION 12. INDEMNIFICATION.
(a) In the event of the filing of any Registration Statement
with respect to Warrants, the Shares, the Unit Warrants or the Unit Warrant
Stock pursuant to Section 11 hereof, the Company agrees to indemnify and hold
harmless the Warrantholder or any holder of such Shares, Unit Warrants or Unit
Warrant Stock and each person, if any, who controls the Warrantholder or any
holder of any Shares, Unit Warrants or Unit Warrant Stock, within the meaning of
the Act, against any losses, claims, damages or liabilities, joint or several
(which shall, for all purposes of this Agreement, include, but not be limited
to, all costs of defense and investigation and all reasonable attorneys' fees),
to which the Warrantholder or any holder of such Shares, Unit Warrants or Unit
Warrant Stock or such controlling person may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in any such Registration
Statement, or any related preliminary prospectus, final prospectus, or amendment
or supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading in light of the
circumstances in which they were made; provided, however, that the Company will
not be liable in any such case to the extent that any such loss, claim, damage
or liability arises out of or is based upon an untrue statement or alleged
untrue statement or omission or alleged omission made in such Registration
Statement, preliminary prospectus, final prospectus or amendment or supplement
thereto in reliance upon, and in conformity with, written information furnished
to the Company by such Warrantholder or the
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holder of such Shares, Unit Warrants or Unit Warrant Stock specifically for use
in the preparation thereof. This indemnity will be in addition to any liability
which the Company may otherwise have.
(b) The Warrantholders and the holder of the Shares, Unit
Warrants and Unit Warrant Stock agree that they will indemnify and hold harmless
the Company, each other person referred to in subparts (1), (2) and (3) of
Section 11(a) of the Act in respect of the Registration Statement and each
person, if any, who controls the Company within the meaning of the Act, against
any losses, claims, damages or liabilities (which shall, for all purposes of
this Agreement, include but not be limited to, all costs of defense and
investigation and all attorneys' fees) to which the Company or any such
director, officer or controlling person may become subject under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in such Registration Statement,
or any related preliminary prospectus, final prospectus or amendment or
supplement thereto, or arise out of or are based upon the omission or the
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading in light of the
circumstances in which they were made, but in each case only to the extent that
such untrue statement or alleged untrue statement or omission or alleged
omission was made in such Registration Statement, preliminary prospectus, final
prospectus or amendment or supplement thereto in reliance upon, and in
conformity with, written information furnished to the Company by the
Warrantholder or such holder of Shares, Unit Warrants or Unit Warrant Stock
specifically for use in the preparation thereof. This indemnity agreement will
be in addition to any liability which the Warrantholder or such holder of
Shares, Unit Warrants or Unit Warrant Stock may otherwise have.
(c) Promptly after receipt by an indemnified party under this
Section 12 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying party
under this Section 12, notify the indemnifying party of the commencement
thereof, but the omission so to notify the indemnifying party will not relieve
the indemnifying party from any liability which it may have to any indemnified
party otherwise than as to the particular item as to which indemnification is
then being sought solely pursuant to this Section 12. In case any such action is
brought against any indemnified party, and it notifies the indemnifying party of
the commencement thereof, the indemnifying party will be entitled to participate
in, and, to the extent that it may wish, jointly with any other indemnifying
party similarly notified, reasonably assume the defense thereof, subject to the
provisions herein stated, and upon a notice from the indemnifying party to such
indemnified party of its election to assume the defense thereof, the
indemnifying party will not be liable to such indemnified party under this
Section 12 for any legal or other expenses, subsequently incurred by such
indemnified party in connection with the defense thereof, other than reasonable
costs of investigation, unless the indemnifying party shall not pursue the
action to its final conclusion. The indemnified party shall have the right to
employ separate counsel in any such action and to participate in the defense
thereof, but the fees and expenses of such counsel shall not be at the expense
of the indemnifying party if the indemnifying party has assumed the defense of
the action with counsel reasonably satisfactory to the indemnified party;
provided that if the indemnified party shall have been advised by its counsel
that there may be one or more legal defenses available to the indemnifying party
which differ from those available to the indemnified party the indemnifying
party shall be liable for reasonable legal and other expense incurred by the
indemnified party in connection with the defense of the action (in which case
the indemnifying party shall not have the right to assume the defense of such
action on behalf of the indemnified party, it being understood, however, that
the indemnifying party shall not, in connection with any one such action or
separate but substantially similar or related actions in the same jurisdiction
arising out of the same general allegations or circumstances, be liable for the
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reasonable fees and expenses of more than one separate firm of attorneys for
the indemnified party, which firm shall be designated in writing by a majority
in interest of such holders and controlling persons based upon the value of the
securities included in the Registration Statement. No settlement of any action
against an indemnified party shall be made without the consent of the
indemnified and the indemnifying parties, which shall not be unreasonably
withheld in light of all factors of importance to such parties.
SECTION 13. CONTRIBUTION. In order to provide for just and equitable
contribution under the Act in any case in which it is judicially determined (by
the entry of a final judgment or decree by a court of competent jurisdiction
and the expiration of time to appeal or the denial of the last right of appeal)
that indemnification may not be enforced in such case notwithstanding the fact
that the express provisions of Section 12 hereof provide for indemnification in
such case or (ii) contribution under the Act may be required on the part of any
Warrantholder or any holder of the Shares, Unit Warrants or Unit Warrant Stock
or controlling person, then the Company and any Warrantholder or any such
holder of Shares, Unit Warrants or Unit Warrant Stock, Unit Warrants or Unit
Warrant Stock or controlling person shall contribute to the aggregate losses,
claims, damages or liabilities to which they may be subject (which shall, for
all purposes of this Agreement, include, but not be limited to, all costs of
defense and investigation and all attorneys' fees), in either such case (after
contribution from others) on the basis of relative fault as well as any other
relevant equitable considerations. The relative fault shall be determined by
reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact related to information supplied by the Company on the one hand or
a Warrantholder or holder of Shares, Unit Warrants or Unit Warrant Stock or
controlling person on the other and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission. The Company and such holders of such securities and such controlling
persons agree that it would not be just and equitable if contribution pursuant
to this Section 13 were determined by pro rata allocation or by any other
method which does not take account of the equitable considerations referred to
in this Section 13. The amount paid or payable by an indemnified party as a
result of the losses, claims, damages or liabilities (or actions in respect
thereof) referred to above in this Section 13 shall be deemed to include any
legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim. No person
guilty of fraudulent misrepresentation (within the meaning of Section 1l(f) of
the Act) shall be entitled to contribution from any person who was not guilty
of such fraudulent misrepresentation.
SECTION 14. NOTICES. Any notice pursuant to this Agreement by the Company
or by a Warrantholder, a holder of Shares, Unit Warrants or Unit Warrant Stock
shall be in writing and shall be deemed to have been duly given if delivered or
mailed by certified mail, return receipt requested:
(a) If to a Warrantholder or a holder of Shares, Unit Warrants or Unit
Warrant Stock, addressed to X.X. XXXXXX & CO., INC., 0000 Xx. Xxxx Xxxxxx,
Xxxxxxxxx, Xxx Xxxx 00000; Attention: Corporate Finance Department
(b) If to the Company addressed to it at 0000 Xxxx 00xx Xxxxxx, Xxxxx
000, Xxxxxxxxxxx, Xxxxxxxxx 00000 Attention: Chief Executive Officer.
Each party may from time to time change the address to which notices to it
are to be delivered or mailed hereunder by notice in accordance herewith to the
other party.
SECTION 15. SUCCESSORS. All the covenants and provisions of this Agreement
by or for the benefit of the Company, the Warrantholders, or the holders of the
Shares, Unit Warrants
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or Unit Warrant Stock shall bind and inure to the benefit of their respective
successors and assigns hereunder.
SECTION 16. MERGER OR CONSOLIDATION OF THE COMPANY. The Company will not
merge or consolidate with or any other corporation or sell all or substantially
all of its property to another corporation, unless the provisions of Section
8.4 are complied with.
SECTION 17. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All statements
contained in any schedule, exhibit, 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.
SECTION 18. APPLICABLE LAW. This Agreement 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.
SECTION 19. BENEFITS OF THIS AGREEMENT. Nothing in this Agreement shall be
construed to give to any person or corporation other than the Company, the
Warrantholders and the holders of Shares, Unit Warrants or Unit Warrant Stock
any legal or equitable right, remedy or claim under this Agreement. This
Agreement shall be for the sole and exclusive benefit of the Company, the
Warrantholders and the holders of Shares, Unit Warrants and Unit Warrant Stock.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed, all as of the date and year first above written.
JUBILEE GAMING ENTERPRISES, INC.
By:_______________________________
Xxxxx X. Xxxxxxx
Chief Executive Officer
X.X. XXXXXX & CO., INC.
By:_______________________________
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EXHIBIT A
Warrant Certificate No. HJ-1
REPRESENTATIVE'S WARRANTS TO PURCHASE 120,000 UNITS,
EACH UNIT CONSISTING OF ONE SHARE OF COMMON STOCK AND
ONE FIVE-YEAR WARRANT TO PURCHASE ONE SHARE OF COMMON STOCK
VOID AFTER 5:00 P.M.,
NEW YORK CITY TIME, ON _______________, 2001
JUBILEE GAMING ENTERPRISES, INC.,
This certifies that, for value received, X.X. XXXXXX & CO., INC. the
registered holder hereof or its assigns (the "Warrantholder"), is entitled to
purchase from JUBILEE GAMING ENTERPRISES, INC., (the "Company"), at any time
during the period commencing at 9:00 a.m., Eastern Standard Time, on
____________, 1997, and before 5:00 p.m., Eastern Standard Time, on
____________, 2001, at the purchase price per Unit of $_____ (the "Warrant
Price"), the number of Units of the Company set forth above (the "Units"). The
number of shares of Common Stock of the Company included in the Units
purchasable upon exercise of each Warrant evidenced hereby shall be subject to
adjustment from time to time as set forth in the Representative's Warrant
Agreement referred to below.
The Warrants evidenced hereby may be exercised in whole or in part by
presentation of this Warrant Certificate with the Purchase Form attached hereto
duly executed (with a signature guarantee as provided thereon) and simultaneous
payment of the Warrant Price at the principal office of the Company. Payment of
such price shall be made at the option of the Warrantholder in cash, by check
or as provided for in Section 3(c) of the Representative's Warrant Agreement.
The Warrants evidenced hereby are one of a series representing the right
to purchase an aggregate of up to 120,000 Units and are issued under and in
accordance with a Representative's Warrant Agreement, dated as of ___________
___, 1996 (the "Representative's Warrant Agreement"), between the Company and
X.X. XXXXXX & CO., INC., and are subject to the terms and provisions contained
in the Representative's Warrant Agreement, to all of which the Warrantholder by
acceptance hereof consents.
Upon any partial exercise of the Warrants evidenced hereby, there shall be
signed and issued to the Warrantholder a new Warrant Certificate in respect of
the Units as to which the Warrants evidenced hereby shall not have been
exercised. These Warrants may be exchanged at the office of the Company by
surrender of this Warrant Certificate properly endorsed for one or more new
Warrants of the same aggregate number of Units as here evidenced by the Warrant
or Warrants exchanged. No fractional Units will be issued upon the exercise of
rights to purchase hereunder, but the Company shall pay the cash value of any
fraction upon the exercise of one or more Warrants. These Warrants are
transferable at the office of the Company in the manner and subject to the
limitations set forth in the Representative's Warrant Agreement.
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This Warrant Certificate does not entitle any Warrantholder to any of the
rights of a stockholder of the Company.
JUBILEE GAMING ENTERPRISES, INC.,
By:___________________________
Dated:______________ ___, 1997
ATTEST:
_________________________________
________________, Secretary
[Corporate Seal]
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JUBILEE GAMING ENTERPRISES, INC.
PURCHASE FORM
JUBILEE GAMING ENTERPRISES, INC.
0000 Xxxx 00xx Xxxxxx, Xxxxx 000
Xxxxxxxxxxx, Xxxxxxxxx 00000
The undersigned hereby irrevocably elects to exercise the right of
purchase represented by the within Warrant Certificate for, and to purchase
thereunder, __ Units (the "Units") provided for therein, and requests that
certificates for the Units be issued in the name of:
_______________________________________________
(Please Print or Type Name, Address and Social Security Number)
_______________________________________________
_______________________________________________
and, if said number of Units shall not be all the Units purchasable hereunder,
that a new Warrant Certificate for the balance of the Units 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: ______________
Name of Warrantholder
or Assignee:________________________________________
(Please Print)
Address:____________________________________________
____________________________________________
Signature:__________________________________________
__________________________________________
Note: The above signature must correspond with the name as written upon the
face of this Warrant Certificate in every particular, without alteration or
enlargement or any change whatever, unless these Warrants have been assigned.
Signature Guaranteed:________________________________________
(Signature must be guaranteed by a bank or trust company having an officer or
correspondent in the United States or by a member firm or a registered
securities exchange or the National Association of Securities Dealers, Inc.)
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ASSIGNMENT
(To be signed only upon assignment of Warrants)
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
(Name and Address of Assignee Must Be Printed or Typewritten)
______________________________________________
______________________________________________
______________________________________________
The within Warrants, hereby irrevocably constituting and appointing
_________________ Attorney to transfer said Warrants on the books of the
Company, with full power of substitution in the premises.
Dated:__________ ____________________________________________
Signature or Registered Holder
Note: The signature on this assignment must correspond with the name as it
appears upon the face of the within Warrant Certificate in every particular,
without alteration or enlargement or any change whatever
Signature Guaranteed:__________________________________________
(Signature must be guaranteed by a bank or trust company having an office or
correspondent in the United States or by a member firm of a registered
securities exchange or the National Association or Securities Dealers, Inc.)
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