Pre-Effective Amendment to Registration of Securities by a Small-Business Issuer — Form SB-2
Filing Table of Contents
Document/Exhibit Description Pages Size
1: SB-2/A Pre-Effective Amendment to Registration of 84 518K
Securities by a Small-Business Issuer
2: EX-1.1 Exhibit 1.1 Representative's Warrant 12 47K
3: EX-1.2 Exhibit 1.2 Underwriting Agreement 38 179K
4: EX-10.28 Exhibit 10.28 Endorsement Agrmt With Glen Day 12 50K
5: EX-10.33 Exhibit 10.33 Form of Incentive Stock Option Agrmt 8 33K
6: EX-10.34 Exhibit 10.34 Form of Non-Qual. Stock Option Agrmt 8 32K
7: EX-10.37 Exhibit 10.37 Consulting Agreement 4 22K
8: EX-10.38 Exhibit 10.38 Form for Outside Directors 7 31K
9: EX-10.39 Exhibit 10.39 Termination Agrmt With Daniel Snider 1 9K
10: EX-10.40 Exhibit 10.40 Wrnt Agrmt, Co. & Amer Stock Tfr 19 79K
11: EX-23.1 Exhibit 23.1 Consent of Pricewaterhouse 1 7K
12: EX-99.1 Exhibit 99.1 - Consent of Daniel Snider 1 7K
13: EX-99.2 Exhibit 99.2 - Consent of Kim Haskell 1 8K
EX-10.40 — Exhibit 10.40 Wrnt Agrmt, Co. & Amer Stock Tfr
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Exhibit 10.40
WARRANT AGREEMENT
WARRANT AGREEMENT dated as of _______________,1998 (and effective as of
______________, 1998) between Outlook Sports Technology, Inc., a corporation
organized under the laws of the State of Delaware (the "Company"), and American
Stock Transfer and Trust Company (the "Warrant Agent").
W I T N E S S E T H :
WHEREAS, the Company proposes to issue and sell to the public in a
initial public offering (the "Initial Offering") 2,500,000 shares of the
Company's Class A Common Stock at $7.00 per share, $0.01 par value per share
(the "Shares"), and 1,000,000 Redeemable Class A Common Stock Purchase Warrants
(the "Public Warrants");
WHEREAS, the Company and Selling Shareholders propose to issue and sell
to Argent Securities, Inc. ("Argent"), and each of the other underwriters named
in Schedule I hereto (collectively, the "Underwriters"), for whom Argent is
acting as representative (the "Representative") in the Initial Offering an
option to purchase an additional 375,000 Shares (100,000 of the additional
Shares to be purchased from the Company and 275,000 of the additional Shares to
be purchased from the Selling Shareholders) and 150,000 Public Warrants (all
such Public Warrants to be purchased from the Company) solely to cover
over-allotments, if any;
WHEREAS, the Company also proposes to issue and sell to the
Representative in the Initial Offering an option to purchase 250,000 Shares of
Class A Common Stock and 50,000 Class A Common Stock Purchase Warrants (the
"Underwriter's Warrants" together with the Public Warrants sometimes hereinafter
referred to as the "Warrants");
WHEREAS, the Warrants shall be evidenced by certificates substantially
in the form of Exhibit "A" annexed hereto (the "Warrant Certificate"), each
Warrant entitling the holder thereof to purchase one share of Class A Common
Stock;
WHEREAS, the Warrants will have an exercise price of $8.05 per share of
Class A Common Stock, subject to certain adjustments (the "Warrant Price"), will
be exercisable commencing thirteen months after the effective date of the
Initial Offering (the "First Exercise Date") until a date which is the second
anniversary of the First Exercise Date (the "Last Exercise Date"), unless
extended by the Company, and, except for the Underwriter's Warrants, will be
exercisable during any period of time fixed for that Warrant's redemption in a
Redemption Notice (hereinafter defined in Section 2.03), which period of time
will terminate on a stated Redemption Date (hereinafter defined in Section
2.03);
WHEREAS, the Company desires the Warrant Agent to act on behalf of the
Company, and the Warrant Agent is willing to so act in connection with the
issuance, registration, transfer, exchange and replacement of the Warrant
Certificates and exercise of the Warrants; and
WHEREAS, the Company and the Warrant Agent desire to set forth in this
Agreement the terms and conditions upon which the Warrant Certificates shall be
issued, transferred,
exchanged and placed and the Warrants exercised, and to provide for the rights
of the holders of the Warrants;
NOW, THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, and the respective undertakings herein below set forth, the
Company and the Warrant Agent agree as follows:
ARTICLE I
ISSUANCE AND EXECUTION OF WARRANTS
Section 1.01. The Company hereby appoints the Warrant Agent to act on
behalf of the Company in accordance with the terms and conditions herein set
forth, and the Warrant Agent hereby accepts such appointment and agrees to
perform the same in accordance with such provisions.
Section 1.02. The Warrant Certificates for the Warrants shall be issued
in registered form only. The text of the Warrant Certificate, including the form
of assignment and subscription printed on the reverse side thereof, shall be
substantially in the form of Exhibit "A" annexed hereto, which text is hereby
incorporated in this Agreement by reference as though fully set forth herein and
to whose terms and conditions the Company and the Warrant Agent hereby agree.
Each Warrant Certificate shall evidence the right, subject to the provisions of
this Agreement and of such Warrant Certificate, to purchase the number of
validly issued, fully paid and non-assessable shares of Class A Common Stock, as
that term is defined in Section 1.05 of this Agreement, stated therein, free of
preemptive rights, subject to adjustment as provided in Article III of this
Agreement.
Section 1.03. Upon the written order of the Company, signed by the
President or any Vice President, and the Secretary, Treasurer, Assistant
Secretary or Assistant Treasurer of the Company, the Warrant Agent shall issue
and register Warrants in the names and denominations specified in that order,
and will countersign and deliver Warrant Certificates evidencing the same in
accordance with that order. Each Warrant Certificate shall be dated the date of
its countersignature. Each Warrant Certificate shall be executed on behalf of
the Company by the manual or facsimile signature of the President of the
Company, under its corporate seal, affixed or facsimile, attested by the manual
or facsimile signature of the Secretary of the Company and shall be
countersigned manually by the Warrant Agent. The Warrant Certificates shall not
be valid for any purpose unless so countersigned. In case any officer whose
facsimile signature has been placed upon any Warrant Certificate shall have
ceased to be such before such Warrant Certificate is issued, it may be issued
with the same effect as if such officer had not ceased to be such on the date of
issuance.
1.04. Except as otherwise expressly stated herein, all terms used in
the Warrant Certificate have the meanings provided in this Agreement.
1.05. As used herein, the term "Class A Common Stock" shall mean the
aggregate number of shares that the Company, by its Certificate of
Incorporation, as from time to time amended, is authorized to issue, which are
not limited by its Certificate of Incorporation to a
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fixed sum or percentage of the book value in respect of the rights of the
holders thereof to participate in dividends or in distribution of assets upon
the voluntary or involuntary liquidation, dissolution, or winding up the
Company.
1.06. The Warrant Agent understands and agrees that the Warrants and
shares of Class A Common Stock are being sold separately in the Initial Offering
and that the Shares and the Warrants shall be detachable and will be traded
separately immediately upon the closing of the Initial Offering.
ARTICLE II
WARRANT PRICE, DURATION AND EXERCISE OF WARRANTS,
CALL OF WARRANTS AND TRADING OF WARRANTS
Section 2.01.
(a) Each Warrant shall entitle the person in whose name at the
time the Warrant shall be registered upon the books to be maintained by
the Warrant Agent for that purpose (the "Warrant Holder"), subject to
the provisions of the Warrant Certificates and of this Agreement, to
purchase from the Company any time on or after the First Exercise Date
but at or before the Last Exercise Date, up to the number of shares of
Class A Common Stock stated therein, as adjusted, at the Warrant Price
in effect at such date, payable in full at the time of purchase in the
manner provided in Section 2.02 of this Agreement.
(b) Each Warrant shall be exercisable in accordance with the
terms herein and in the Warrant Certificate which, among other things,
contains certain terms as to the Warrant Price.
Section 2.02.
(a) The Warrant Holder may exercise a Warrant, in whole or in
part, by surrender of the Warrant Certificate, with the form of
subscription thereon duly executed by the Warrant Agent at its
corporate office, together with the Warrant Price for each share of
Class A Common Stock to be purchased in lawful money of the United
States, or by certified check, bank draft, or postal or express money
order payable in United States Dollars to the order of the Company.
(b) Upon receipt of a Warrant Certificate with the form of
election to purchase thereon duly executed and accompanied by payment
of the aggregate Warrant Price for the shares of Class A Common Stock
for which the Warrant is then being exercised, the Warrant Agent shall
requisition from the transfer agent certificates for the total number
of the shares of Class A Common Stock for which the Warrant is being
exercised in such names and denominations as are required for delivery
to the Warrant Holder, and the Warrant Agent shall thereupon deliver
such certificates to or in accordance with the instructions of the
Warrant Holder. The Company covenants and agrees that it has duly
authorized and directed its transfer agent (and will authorize and
direct all its future transfer agents) to comply with all such requests
of the Warrant Agent.
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(c) In case any Warrant Holder shall exercise his Warrant with
respect to less than all of the shares of Class A Common Stock that may
be purchased under the Warrant, a new Warrant Certificate for the
balance shall be countersigned and delivered to or upon the order of
the Warrant Holder.
(d) The Company covenants and agrees that it will pay when due
and payable any and all taxes which may be payable in respect to the
issuance of Warrants, or the issuance of any shares of Class A Common
Stock upon the exercise of Warrants. However, neither the Company nor
the Warrant Agent shall be required to issue or deliver any Warrant
Certificate or shares of Class A Common Stock in a name other than that
of the Warrant Holder at the time of surrender if any tax is payable in
respect of such transfer until the person requesting the same has paid
to the Company the amount of such tax or has established to the
Company's satisfaction that such tax has been paid or shall not be due
and payable. In the event that any transfer tax is due and payable, the
Warrant Agent shall be under no obligation to issue or deliver any
Warrant Certificate or shares of Class A Common Stock in a name other
than that of the Warrant Holder until the Company has notified the
Warrant Agent that the transfer tax, if any, has been paid, or in the
alternative, that no transfer tax is due and payable by reason of an
exemption.
(e) The Warrant Agent shall account promptly to the Company
with respect to Warrants exercised and concurrently account to the
Company for all moneys received by the Warrant Agent for the purchase
of shares of Class A Common Stock upon the exercise of Warrants.
(f) The Warrant Agent covenants and agrees that upon the
exercise of any of the Warrants, the Warrant Agent shall provide
written notice to the Company at Suite 410, 4400 North Federal Highway,
Boca Raton, Florida 33431, and to the Representative at its office at
3340 Peachtree Street, NE, Suite 900, Atlanta, Georgia 30326, the
expense of which notice shall be borne by the Company. Each notice
shall contain the name of the exercising Warrant Holder, the number of
shares of Class A Common Stock that the Warrant Holder has elected to
purchase, the purchase price paid on a per share basis and the
cumulative number of Warrants exercised by all of the Warrant Holders
as of the date of the transaction which is the subject of the aforesaid
notice. Such notice shall be made on the date of the exercise of the
Warrant. Nothing contained herein shall be construed so as to prevent
the Warrant Agent from providing the information required in this
Section 2.02 (f) in a consolidated or tabular form, provided that all
other provisions of this Section are complied with.
(g) The Warrant Agent covenants and agrees that it shall
provide a list of each and every holder of the Warrants to the Company
and the Underwriters at such time or from time to time as shall be
required by the Company or the Underwriters, but in no event shall such
a list be provided less frequently than once per annum at a date as
shall be determined by the Company.
Section 2.03.
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(a) Commencing on the First Exercise Date, the Company may,
subject to the conditions set forth herein, redeem all, but not less
than all, the Warrants then outstanding at a redemption price of $.125
per Warrant upon not less than thirty (30) days prior written notice
(the "Redemption Notice") to the holders thereof provided that the
average closing price of the Class A Common Stock for the 10
consecutive trading days ending one (1) day prior to the date of the
Redemption Notice is at least $8.05 per share, subject to adjustment
for stock dividends, stock splits and other anti-dilution provisions as
provided for under Article III herein. For purposes of this Section
2.03, "closing price" at any date shall be deemed to be: (i) the last
sale price regular way as reported on the principal national securities
exchange on which the Class A Common Stock is listed or admitted to
trading, or (ii) if the Class A Common Stock is not listed or admitted
to trading on any national securities exchange, the average of the
closing bid and asked prices regular way for the Class A Common Stock
as reported by the Nasdaq National Market or Nasdaq Small Cap Market of
the Nasdaq Stock Market, Inc. ("NASDAQ") or (iii) if the Class A Common
Stock is not listed or admitted for trading on any national securities
exchange, and is not reported by NASDAQ, the average of the closing bid
and asked prices in the over-the-counter market as furnished by the
National Quotation Bureau, Inc. or if no such quotation is available,
the fair market value of the Class A Common Stock as determined in good
faith by the Board of Directors of the Company. The Redemption Notice
shall be deemed effective upon mailing and the time of mailing is the
"Effective Date of the Notice". The Redemption Notice shall state a
redemption date not less than thirty (30) days from the Effective Date
of the Notice (the "Redemption Date") . No Redemption Notice shall be
mailed unless all funds necessary to pay for redemption of all Warrants
then outstanding shall have first been set aside by the Company in
trust with the Warrant Agent for the benefit of all Warrant Holders so
as to be and continue to be available therefor. The redemption price to
be paid to the Warrant Holders will be $0.125 for each share of the
Class A Common Stock of the Company to which the Warrant Holder would
then be entitled upon exercise of the Warrant being redeemed, as
adjusted from time to time as provided herein (the "Redemption Price").
In the event the number of shares of Class A Common Stock issuable upon
exercise of the Warrant being redeemed are adjusted pursuant to Article
III hereof, then upon each such adjustment the Redemption Price will be
adjusted by multiplying the Redemption Price in effect immediately
prior to such adjustment by a fraction, the numerator of which is the
number of shares of Class A Common Stock issuable upon exercise of the
Warrant being redeemed immediately prior to such adjustment and the
denominator of which is the number of shares of Class A Common Stock
issuable upon exercise of such Warrant being redeemed immediately after
such adjustment. The Warrants may only be redeemed if the Company has
in effect a current Registration Statement or post-effective amendment
covering the shares underlying the Warrants. The Warrant Holders may
exercise their Warrants between the Effective Date of the Notice and
the Redemption Date, such exercise being effective if done in
accordance with Section 2.02 (a), and if the Warrant Certificate, with
form of election to purchase duly executed and the Warrant Price, as
applicable for such Warrant subject to redemption for each share of
Class A Common Stock to be purchased is actually received by the
Warrant Agent at its office located at 40 Wall Street, 46th Floor, New
York, N.Y. 10005, no later than 5:00 P.M. New York time on the
Redemption Date.
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(b) If any Warrant Holder does not wish to exercise any
Warrant being redeemed, the Warrant Holder should mail such Warrant to
the Warrant Agent at its office located at 40 Wall Street, 46th Floor,
New York, N.Y. 10005 after receiving the Redemption Notice required by
this Section. If such Redemption Notice shall have been so mailed, and
if on or before the Effective Date of the Notice all funds necessary to
pay for redemption of all Warrants then outstanding shall have been set
aside by the Company in trust with the Warrant Agent for the benefit of
all Warrant Holders so as to be and continue to be available therefor,
then, on and after said Redemption Date, notwithstanding that Warrant
subject to redemption shall not have been surrendered for redemption,
the obligation evidenced by all Warrants not surrendered for redemption
or effectively exercised shall be deemed no longer outstanding, and all
rights with respect thereto shall forthwith cease and terminate, except
only the right of the holder of each Warrant subject to redemption to
receive the Redemption Price for each share of Class A Common Stock to
which he would be entitled if he exercised the Warrant upon receiving
the Redemption Notice of the Warrant subject to redemption held by the
Holder hereof.
(c) Notwithstanding anything contained in this Article II, the
Underwriter's Warrants shall not be eligible for redemption by the
Company.
ARTICLE III
ADJUSTMENT OF SHARES OF CLASS A COMMON STOCK
PURCHASABLE AND OF WARRANT PRICE
Section 3.01. In case the Company shall at any time after the date of
this Agreement (i) declare a dividend on the outstanding Class A Common Stock in
shares of its capital stock, (ii) subdivide the outstanding Class A Common
Stock, (iii) combine the outstanding Class A Common Stock into a smaller number
of shares, or (iv) issue any shares of its capital stock by reclassification of
the Class A Common Stock (including any such reclassification in connection with
a consolidation or merger in which the Company is the continuing corporation),
then, in each case, the Warrant Price, and the number and kind of shares of
Class A Common Stock receivable upon exercise, in effect at the time of the
record date for such dividend or of the effective date of such subdivision,
combination, or reclassification shall be proportionately adjusted so that the
holder of any Warrant exercised after such time shall be entitled to receive the
aggregate number and kind of shares which if such Warrant had been exercised
immediately prior to such time, he would have owned upon such exercise and been
entitled to receive by virtue of such dividend, subdivision, combination, or
reclassification. Such adjustment shall be made successively whenever any event
listed above shall occur.
Section 3.02. In case the Company after the date hereof shall issue
rights, options, or warrants to all holders of Class A Common Stock entitling
them to subscribe for or purchase Class A Common Stock (or securities
convertible into or exchangeable for Class A Common Stock) at a price per share
(or having a conversion price per share, if a security convertible into or
exchangeable for Class A Common Stock) less than the "current market price" (as
defined in Section 3.04 hereof) per share of Class A Common Stock on the record
date established for the issuance of such rights, options or warrants, then, in
such case, the Warrant Price shall be adjusted by multiplying the Warrant Price
in effect on the record date of such issuance by a
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fraction, of which the numerator shall be the number of shares of Class A Common
Stock outstanding on the record date for such issuance plus the number of shares
of Class A Common Stock which the aggregate offering price of the total number
of shares of Class A Common Stock so to be issued (or the aggregate initial
conversion price of the convertible securities to be issued or sold) would
purchase at such "current market price" and of which the denominator shall be
the number of shares of Class A Common Stock outstanding on the record date for
such issuance plus the number of additional shares of Class A Common Stock to be
issued (or into which the convertible or exchangeable securities to be issued or
sold are initially convertible or exchangeable). Such adjustment shall become
effective at the close of business on such record date; provided, however, that,
to the extent the shares of Class A Common Stock (or securities convertible to
or exchangeable for shares of Class A Common Stock) are not delivered, the
Warrant Price shall be readjusted after the expiration of such rights, options,
or warrants (but only with respect to Warrants exercised after such expiration),
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 Class A Common Stock or securities convertible into
or exchangeable for shares of Class A Common Stock actually issued. In case any
subscription price may be paid in a consideration part or all of which shall be
in a form other than cash, the value of such consideration shall be as
determined in good faith by the board of directors of the Company, whose
determination shall be conclusive absent manifest error. Shares of Class A
Common Stock owned by or held for the account of the Company or any
majority-owned subsidiary shall not be deemed outstanding for the purpose of any
such computation.
Notwithstanding the foregoing, no adjustment in the Warrant Price or
the number of shares of Class A Common Stock issuable upon exercise of the
Warrants shall be made upon (i) the issuance of options (or upon exercise
thereof) by the Company pursuant to its Stock Option Plans, (ii) the issuance of
the Underwriter's Warrants, or (iii) any other options and warrants outstanding
as of the date hereof.
Section 3.03. In case the Company shall distribute to all holders of
Class A Common Stock (including any such distribution made to the stockholders
of the Company in connection with a consolidation or merger in which the Company
is the continuing corporation) evidences of its indebtedness or assets (other
than cash dividends distributions and dividends payable in shares of Class A
Common Stock), subscription rights, options, or warrants or convertible or
exchangeable securities containing the right to subscribe for or purchase shares
of Class A Common Stock (excluding those referred to in Section 3.02 hereof),
then, in each case, the Warrant Price shall be adjusted by multiplying the
Warrant Price in effect immediately prior to the record date for the
determination of stockholders entitled to receive such distribution by a
fraction of which the numerator shall be the "current market price" per share of
Class A Common Stock on such record date, less the fair market value (as
determined in good faith by the board of directors of the Company, whose
determination shall be conclusive absent manifest error) of the portion of the
evidences of indebtedness or assets so to be distributed, or of such
subscription rights, options, or warrants, convertible or exchangeable
securities containing the right to subscribe for or purchase shares of Class A
Common Stock, applicable to the share, and of which the denominator shall be
such "current market price" per share of Class A Common Stock. Such adjustment
shall be made whenever any such distribution is made, and shall become
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effective on the date of such distribution retroactive to the record date for
the determination of stockholders entitled to receive such distribution.
Section 3.04. For the purpose of any computation under sections 3.02
and 3.03 hereof, the "current market price" per share of Class A Common Stock on
any date shall be deemed to be the average of the daily closing prices for the
20 consecutive trading days ending three (3) days prior to such date. The
closing price for each day shall be the last reported sales price regular way
or, in case no such reported sale takes place on such day, the closing bid price
regular way, in either case on the principal national securities exchange on
which the Class A Common Stock is listed or admitted to trading or, if the Class
A Common Stock is not listed or admitted to trading on any national securities
exchange, the highest reported bid price as furnished by NASDAQ. If on any such
date the Class A Common Stock is not quoted on NASDAQ or any such organization,
the closing price shall be deemed to be the average of the closing bid and asked
prices in the over-the-counter market as reported by the National Quotation
Bureau or if no such quotation is available, the fair value of the Class A
Common Stock on such date, as determined in good faith by the board of directors
of the Company, whose determination shall be conclusive absent manifest error.
Section 3.05. No adjustment in the Warrant Price shall be required if
such adjustment is less than $0.01; provided, however, that any adjustments
which by reason of this Section 3.05 are not required to be made shall be
carried forward and taken into account in any subsequent adjustment. All
calculations under this Article III shall be made to the nearest cent or to the
nearest one-thousandth of a share, as the case may be.
Section 3.06. In any case in which this Article III shall require that
an adjustment in the Warrant Price be made effective as of a record date for a
specified event, the Company may elect to defer, until the occurrence of such
event, issuing to the holder of any Warrant exercised after such record date,
the shares, if any, issuable upon such exercise over and above the shares, if
any, issuable upon such exercise on the basis of the Warrant Price in effect
prior to such adjustment; provided, however, that the Company shall deliver to
such holder a due bill or other appropriate instrument evidencing such holder's
right to receive such additional shares upon the occurrence of the event
requiring such adjustment.
Section 3.07. Upon each adjustment of the Warrant Price as a result
of the calculations made in Section 3.01, 3.02, or 3.03 hereof, each Warrant
outstanding prior to the making of the adjustment in the Warrant Price shall
thereafter evidence the right to purchase, at the adjusted Warrant Price,
that number of shares (calculated to the nearest thousandth) obtained by
dividing (A) the product obtained by multiplying the number of shares
purchasable upon exercise of a Warrant prior to adjustment of the number of
shares by the Warrant Price in effect prior to adjustment of the Warrant
Price by (B) the Warrant Price in effect after such adjustment of the Warrant
Price.
Section 3.08. In case of any capital reorganization of the Company, or
of any reclassification of the Class A Common Stock (other than a
reclassification of the Class A Common Stock referred to in Section 3.01
hereof), or in the case of the consolidation of the Company with or the merger
of the Company into any other corporation or of the sale, transfer, or lease of
the properties and assets of the Company as, or substantially as, an entirety to
any
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other corporation or other entity, each Warrant shall after such capital
reorganization, reclassification of Class A Common Stock, consolidation, merger,
sale, transfer, or lease, be exercisable, on the same terms and conditions
specified in this Agreement, for the number of shares of stock or other
securities, assets, or cash to which a holder of the number of shares
purchasable (at the time of such capital reorganization, reclassification of
Class A Common Stock, consolidation, merger, sale, transfer, or lease) upon
exercise of such Warrant would have been entitled upon such capital
reorganization, reclassification of Class A Common Stock, consolidation, merger,
sale, transfer, or lease; and in any such case, if necessary, the provisions set
forth in this Article III with respect to the rights and interests thereafter of
the holders of the Warrants shall be appropriately adjusted so as to be
applicable, as nearly as may reasonably be, to any shares of stock, other
securities, assets, or cash thereafter deliverable on the exercise of the
Warrants. The subdivision or combination of shares of Class A Common Stock at
any time outstanding into a greater or lesser number of shares shall not be
deemed to be a reclassification of the Class A Common Stock for the purposes of
this subsection. The Company shall not effect any such consolidation, merger,
transfer, or lease, unless prior to or simultaneously with the consummation
thereof, the successor corporation (if other than the Company) resulting from
such consolidation or merger or the Corporation purchasing, receiving, or
leasing such assets or other appropriate corporation or entity shall expressly
assume, by written instrument in form satisfactory to the Underwriters, the
obligation to deliver to the holder of each Warrant such shares of stock,
securities, or assets as, in accordance with the foregoing provisions, such
holders may be entitled to purchase and to perform the other obligations of the
Company under this Agreement.
Section 3.09. The Company may make such reductions in the Warrant
Price, in addition to those required by this Article III, as it shall, in it
sole discretion, determine to be advisable.
ARTICLE IV
OTHER PROVISIONS RELATING TO RIGHTS OF WARRANT HOLDERS
Section 4.01. No Warrant Holder, as such, shall be entitled to vote or
receive dividends or be deemed the holder of shares of Class A Common Stock for
any purposes, nor shall anything contained in any Warrant Certificate be
construed to confer upon any Warrant Holder, as such, any of the rights of a
shareholder of the Company or any right to vote, give or withhold consent to any
action by the Company, whether upon any recapitalization, issue of stock,
reclassification of stock, consolidation, merger, conveyance or otherwise,
receive dividends or subscription rights, or otherwise, until in connection with
the exercise of any Warrant, such Warrant shall have been surrendered and the
purchase price or the shares of Class A Common Stock for which such Warrant is
being exercised shall have been received by the Warrant Agent; provided,
however, that any such surrender and payment on any date when the stock transfer
books of the Company shall be closed shall constitute the person or persons in
whose name or names the certificate or certificates for those shares of Class A
Common Stock are to be issued as the record holder or holders thereof for all
purposes at the opening of business on the next succeeding day on which such
stock transfer books are open and the Warrant surrendered shall not be deemed to
have been exercised, in whole or in part, as the case maybe, until such next
succeeding day on which stock transfer books are open.
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Section 4.02. The Company covenants and agrees that it shall
contemporaneously provide to all Warrant Holders of record any publication,
mailing or notice of an event which it shall provide to all of its shareholders
of record and which event shall result in the adjustment to the Warrant Price as
provided in Article III hereof. For purposes of this Section 4.02, the Warrant
Holders of record shall be those Warrant Holders who are of record on a date
even with the date chosen by the Company for the purpose of determining the
shareholders of record who shall be entitled to receive such publication,
mailing or notice.
Section 4.03. If any Warrant Certificate is lost, stolen, mutilated or
destroyed, the Company and the Warrant Agent may, on such terms as to indemnity
or otherwise as they may in their discretion reasonably impose, which shall, in
the case of a mutilated Warrant Certificate, include the surrender thereof,
issue a new Warrant Certificate of like denomination and tenor as, and in
substitution for, the Warrant Certificate so lost, stolen mutilated or
destroyed.
Section 4.04.
(a) The Company covenants and agrees that at all times it
shall reserve and keep available for the exercise of outstanding
Warrants such number of authorized shares of Class A Common Stock and
the aggregate number and kind of any other securities which the
Warrants are exercisable for, pursuant to the provisions of Article III
hereof, as are sufficient to permit the exercise in full of such
Warrants and that it will make available to the Warrant Agent from time
to time a number of duly executed certificates representing shares of
Class A Common Stock and other securities, sufficient therefor.
(b) The Company shall use its best efforts to secure the
listing, upon official notice of issuance, of the shares of Class A
Common Stock issuable upon exercise of Warrants upon any securities
exchange upon which the Class A Common Stock becomes listed.
(c) The Company covenants that all shares of Class A Common
Stock issued on exercise of Warrants shall be validly issued, fully
paid, non-assessable and free of preemptive rights.
(d) The Company has filed with the Securities and Exchange
Commission a Registration Statement on Form SB-2 (Registration No.
333-58631) for the registration of, among other things, the sale of the
Warrants and the shares of Class A Common Stock issuable upon exercise
thereof under the Securities Act of 1933, as amended (the "Act") which
was declared effective by the Securities and Exchange Commission at
4:00 p.m. Eastern Daylight Time on __________________, 1998. The
"Effective Date" of the Registration Statement for purposes of this
Agreement is ____________________, 1998. The Company has undertaken to
register or qualify the Class A Common Stock, Warrants and shares of
Class A Common Stock underlying the Warrants under the laws of any
states in which the sale of the Warrants and shares of Class A Common
Stock was registered or qualified at the time of the Initial Offering
and shall use its reasonable good faith efforts to register and qualify
such Class A Common Stock, Warrants and shares of Class A Common Stock
underlying the Warrants in such additional states and jurisdictions as
may be appropriate. The Company further agrees to use its best efforts
to
10
maintain the effectiveness of such Registration Statement and such
state qualifications, as aforesaid, by the filing of any and all
amendments to the Registration Statement and such state qualifications
as may be required from time to time under the Act or the laws of the
various states until the expiration or termination of all the Warrants
in accordance herewith.
(e) The Company will furnish to the Warrant Agent, upon
request, an opinion of counsel satisfactory to the Warrant Agent to the
effect that (i) a Registration Statement under the Act is then in
effect with respect to the Warrants and shares of Class A Common Stock
issuable upon the exercise of the Warrants and that the prospectus
included therein complies as to form in all material respects, (except
as to financial statements, including schedules, and other accounting
and financial data, as to which such counsel need express no opinion),
with the requirements of the Act and the rules and regulations of the
Commission thereunder; or a Registration Statement under the Act with
respect to said Warrants and shares of Class A Common Stock is not
required. In the event that said opinion states that such a
Registration Statement is in effect, the Company will from time to time
furnish the Warrant Agent with current prospectuses meeting the
requirements of the Act and such rules and regulations in sufficient
quantity to permit the Warrant Agent to deliver a prospectus
("Prospectus") to each Warrant Holder upon exercise thereof. The
Company further agrees to pay all fees, costs and expenses in
connection with the preparation and delivery to the Warrant Agent of
the foregoing opinions and Prospectuses and the above mentioned
registrations and other actions, and to immediately notify the Warrant
Agent in the event that (i) the Commission shall have issued or
threatened to issue any order preventing or suspending the use of any
Prospectus; (ii) at any time any Prospectus shall contain any untrue
statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading; or (iii) for any reason it shall be necessary
to amend or supplement any Prospectus in order to comply with the Act.
Section 4.05. If the number of shares purchasable upon the exercise of
each Warrant is adjusted pursuant to Section 3.07 hereof, the Company shall not
be required to issue fractions of shares upon exercise of the Warrants or to
distribute share certificates which evidence fractional shares. In lieu of
fractional shares, the Company, in its sole discretion, may pay to the
registered holders of Warrant Certificates at the time such Warrants are
exercised as herein provided an amount in cash equal to the same fraction of the
current market value of a share. For purposes of this Section 4.05, the current
market value of a share issuable upon the exercise of a Warrant shall be the
closing price of a share of Class A Common Stock, as determined pursuant to the
second and third sentences of Section 3.04, for the trading day immediately
prior to the date of such exercise.
ARTICLE V
TREATMENT OF WARRANT HOLDERS
Section 5.01. Prior to due presentment for registration of transfer of
any Warrant, the Company and the Warrant Agent may deem and treat the Warrant
Holder as the absolute owner of such warrant, notwithstanding any notation of
ownership or other writing thereon, for the
11
purpose of any exercise thereof and for all other purposes, and neither
the Company nor the Warrant Agent shall be affected by any notice to
the contrary.
ARTICLE VI
CONCERNING THE WARRANT AGENT AND OTHER MATTERS
Section 6.01. The Company will from time to time promptly pay, subject
to the provisions of Section 2.02 (d) of this Agreement, all taxes and charges
that may be imposed upon the Company or the Warrant Agent in respect of the
issuance or delivery of shares of Class A Common Stock upon the exercise of the
Warrants.
Section 6.02.
(a) The Warrant Agent may resign and be discharged from its
duties under this Agreement upon sixty (60) days notice in writing,
mailed to the Company by registered or certified mail, and to each
Warrant Holder. The Company may remove the Warrant Agent or any
successor warrant agent upon sixty (60) days notice in writing, mailed
to the Warrant Agent or successor Warrant Agent, as the case may be, by
registered or certified mail, and to each Warrant Holder; provided,
however, the Company shall appoint a new Warrant Agent as hereinafter
provided and such removal shall not become effective until a successor
Warrant Agent has been appointed and has accepted such appointment. If
the Warrant Agent shall resign or shall otherwise become capable of
acting, the Company shall appoint a successor to the Warrant Agent. If
the Company shall fail to make such appointment within a period of
sixty (60) days after it has been notified in writing of such
resignation or incapability by the Warrant Agent by a Warrant Holder,
who shall, with such notice, submit his Warrant Certificate for
inspection by the Company, then any Warrant Holder may apply to any
court of competent jurisdiction or the appointment of a successor to
the Warrant Agent. Any successor Warrant Agent, whether appointed by
the Company or by such a court shall be a registered transfer agent,
bank or trust company, subject to the terms and conditions of this
Section 6.02, in good standing and incorporated under the laws of any
State of the United States, having its principal office in the United
States of America. After appointment, the successor Warrant Agent shall
be vested with the same powers, rights, duties and responsibilities as
if it had been originally named as Warrant Agent without further act or
deed. The former Warrant Agent shall deliver and transfer to the
successor Warrant Agent any property at the time held by it hereunder
and execute and deliver any further assurance, conveyance, act or deed
necessary for the purpose. Failure to give any notice provided for in
this Section, however, or any defect therein, shall not affect the
legality or validity of the resignation or removal of the Warrant Agent
or the appointment of the successor Warrant Agent, as the case may be.
(b) Any corporation into which the Warrant Agent may be merged
or with which it may be consolidated, or any corporation resulting from
any merger or consolidation to which the Warrant Agent shall be a
party, or any corporation succeeding to the corporate trust business of
the Warrant Agent, shall be the successor to the Warrant Agent
hereunder without the execution or filing of any paper or any further
act on the
12
part of any of the parties hereto. In case at the time such successor
to the Warrant Agent shall succeed to the agency created by this
Agreement, any of the Warrant Certificates shall have been
countersigned but not delivered, any such successor to the Warrant
Agent may adopt the countersignature of the original Warrant Agent and
deliver such Warrant Certificates so countersigned, and in case at that
time any of the Warrant Certificates shall not have been countersigned,
any successor to the Warrant Agent may countersign such Warrant
Certificate in its own name or in the name of the successor Warrant
Agent; and in all such cases such Warrant Certificates shall have the
full force provided in the Warrant Certificates and this Agreement.
In case at any time the name of the Warrant Agent shall be changed and
at such time any of the Warrant Certificates shall have been countersigned but
not delivered, the Warrant Agent may adopt the countersignature under this prior
name and deliver Warrant Certificates so countersigned; and in case at that time
any of the Warrant Certificates shall not have been countersigned, the Warrant
Agent may countersign such Warrant Certificates either in its prior name or in
its changed name; and in all such cases such Warrant Certificates shall have the
full force provided in the Warrant Certificates and in this Agreement.
Section 6.03. The Company agrees to pay the Warrant Agent a reasonable
fee for all services rendered by it hereunder. The Company also agrees to
indemnify the Warrant Agent for, and to hold it harmless against, any loss,
liability or expense, incurred without gross negligence, willful misconduct or
bad faith on the part of the Warrant Agent, arising out of or in connection with
the acceptance and administration of this Agreement, including the costs and
expenses of defending against any claim of liability in the premises.
Section 6.04. The Company covenants and agrees that it shall, at the
Company's expense, provide to the Warrant Agent copies of its current
prospectus, if any, in such quantity as to enable the Warrant Agent to deliver
one copy of such current prospectus to such Warrant Holder who shall exercise
his rights under a Warrant. Notwithstanding anything else contained in this
Section 6.04, the Company shall not be obligated to provide copies of its
current prospectus for the purpose of allowing the Warrant Agent to deliver such
copies to any Warrant Holder who delivers all of his redeemable warrants for
redemption pursuant to Section 2.03 or who shall notice the Company of his
intent to permit redemption of all of his Warrants pursuant to Section 2.03
herein or to any person who shall hold any Warrant subject to the terms of this
Agreement after the earlier of the Redemption Date or the Last Exercise Date of
the Warrants.
Section 6.05. The Warrant Agent undertakes the duties and obligations
imposed by this Agreement upon the following terms and conditions, by all of
which the Company and the holders of Warrant certificates, by their acceptance
thereof, shall be bound:
(a) Whenever in the performance of its duties under this
Agreement the Warrant Agent shall deem it necessary or desirable that
any fact or matter be proved or established by the Company prior to
taking or suffering any action hereunder, that fact or matter, unless
other evidence in respect thereof be herein specifically prescribed,
may be deemed to be conclusively proved and established by a
certificate signed by the President or the Secretary of the Company and
delivered to the Warrant Agent. That certificate
13
shall be full authorization to the Warrant Agent for any action taken
or suffered in good faith by it under the provisions of this Agreement
in reliance upon that certificate.
(b) The Warrant Agent shall be liable hereunder only for its own gross
negligence, willful misconduct or bad faith.
(c) The Warrant Agent shall not be liable for or by reason of any of
the statements of fact or recitals contained in this Agreement or in the Warrant
Certificates, except its countersignature thereof, or be required to verify the
same, but all such statements and recitals are and shall be deemed to have been
made by the Company only.
(d) The Warrant Agent shall not be under any responsibility in respect
of the validity of this Agreement or the execution and delivery hereof, except
the due execution hereof by the Warrant Agent, or in respect of the validity or
execution of any Warrant Certificate, except its countersignature thereof; nor
shall it be responsible for any Warrant Certificate; nor shall it be responsible
for the adjustment of the Warrant Price or the making of any change in the
number of shares of Class A Common Stock required under the provisions of
Article III of this Agreement or responsible for the manner, method or amount of
any such change or the ascertaining of the existence of facts that would require
any such adjustment or change except with respect to the exercise of Warrant
Certificates after actual notice of any adjustment of the Warrant Price; nor
shall it by any act under this Agreement be deemed to make any representation or
warranty as to the authorization or reservation of any shares of Class A Common
Stock to be issued pursuant to this Agreement or any Warrant Certificate or as
to whether any share of Class A Common Stock will when issued be validly issued,
fully paid, non-assessable and free of preemptive rights.
(e) The Warrant Agent and any shareholder, director, officer or
employee of the Warrant Agent may buy, sell or deal in any of the Warrant
Certificates or other securities of the Company to retain a pecuniary interest
in any transaction in which the Company may be interested or contract with or
lend money to or otherwise act as fully and freely as though it was not the
Warrant Agent or subject to this Agreement. Nothing herein shall preclude the
Warrant Agent from acting in any other capacity for the Company or for any other
legal entity.
(f) The Warrant Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from any
officer or assistant officer of the Company, and to apply to any such officer or
assistant officer for advice or instructions in connection with its duties, and
shall not be liable for any action taken or suffered to be taken by it in good
faith in accordance with instructions of any such officer or assistant officer.
(g) The Warrant Agent may consult with its counsel or other counsel
satisfactory to it, including counsel for the Company, and the opinion of such
counsel shall be full and complete authorization and protection in respect of
any action taken, offered, or omitted by it hereunder in good faith and in
accordance with the opinion of such counsel.
14
(h) The Warrant Agent shall incur no liability to the Company or to any
holder of any Warrant for any action taken by it in reliance upon any Warrant
Certificate or certificate for Class A Common Stock, instrument of assignment or
transfer, power of attorney, endorsement, affidavit, letter, notice, direction,
consent, certificate, statement, or other paper or document believed by it to be
genuine and to be signed, executed, and where necessary, certified or
acknowledged, by the proper person or persons.
Section 6.06. The Warrant Agent may, without the consent or concurrence
of the Warrant Holders, by supplemental agreement or otherwise, concur with the
Company in making any changes or corrections in this Agreement that (i) it shall
have been advised by counsel, who may be counsel for the Company, are required
to cure any ambiguity or to correct any defective or inconsistent provision or
clerical omission or mistake or manifest error herein contained, or (ii) as
provided in Section 3.09, the Company deems necessary of advisable and which
shall not be inconsistent with the provisions of the Warrant Certificates,
provided such changes or corrections do not adversely affect the privileges or
immunities of the Warrant Holders.
Section 6.07. All the covenants and provisions of this Agreement by or
for the benefit of the Company or the Warrant Agent shall bind and inure to the
benefit of their respective successors and assigns hereunder.
Section 6.08. Forthwith upon the appointment after the date thereof
of any transfer agent for the Class A Common Stock, or of any subsequent
transfer agent for the Class A Common Stock, the Company will file with the
Warrant Agent a statement setting forth the name and address of such transfer
agent.
Section 6.09. Notice or demand pursuant to this Agreement to be
given or made by the Warrant Agent or by any Warrant Holder to or on the
Company shall be sufficiently given or made and effective on the third
business day after posting thereof, unless otherwise provided in this
Agreement, if sent by first-class mail, postage prepaid, addressed (until
another address is filed in writing by the Company with the Warrant Agent) as
follows:
Outlook Sports Technology, Inc.
Suite 410
4400 North Federal Highway
Boca Raton, Florida 33431
notice or demand pursuant to this Agreement to be given or made by the Company
or any Warrant Holder to or on the Warrant Agent shall be sufficiently given or
made and effective on the third business day after posting thereof, unless
otherwise provided in this Agreement, if sent by first-class mail, postage
prepaid, addressed (until another address is filed in writing by the Warrant
Agent with the Company) as follows:
15
American Stock Transfer & Trust Co.
46th Floor
40 Wall Street
New York, NY 10005
notice or demand pursuant to this Agreement to be given or made by the Company
or the Warrant Agent to or on the Underwriters shall be sufficiently given or
made and effective on the third business day after posting thereof, unless
otherwise provided in this Agreement, if sent by first-class mail, postage
prepaid, addressed (until another address is filed in writing by the
Underwriters with the Company) as follows:
Argent Securities, Inc.
3340 Peachtree Street, Suite 900
Atlanta, Georgia 30326
Attn: L. Phillips Reames
notice or demand pursuant to this Agreement to be given or made by the Company
or the Warrant Agent to or on any Warrant Holder shall be sufficiently given or
made and effective on the third business day after posting thereof, unless
otherwise provided in this Agreement, if sent by first-class mail, postage
prepaid, addressed to such Warrant Holder at his last known address as it shall
appear in the records of the Company, if such notice shall be given by the
Company, or, if such notice shall be given by the Warrant Agent, as it shall
appear on the register maintained by the Warrant Agent.
A copy of any Notice or demand given or made pursuant to this Agreement
on the Warrant Agent, Company or Underwriters shall be promptly forwarded by the
recipient thereof to each of the Company, Warrant Agent or Underwriters who
shall not have received or made such demand or Notice.
Section 6.10. The validity, interpretation and performance of this
Agreement and the Warrants shall be governed by the law of the State of Georgia.
Section 6.11. Nothing in this Agreement shall be construed to give to
any person or corporation other than the parties hereto and the Warrant Holders
any right, remedy or claim under promise or agreement hereof. All covenants,
conditions, stipulations, promises and agreements contained in this Agreement
shall be for the sole and exclusive benefit of the Company and the Warrant Agent
and their successors and of the Warrant Holders, and their heirs,
representatives, successors, assigns and transferees.
Section 6.12. A copy of this Agreement shall be available for
inspection by any Warrant Holder during the regular business hours and at the
corporate office of the Warrant Agent in New York, New York, at which time the
Warrant Agent may require any Warrant Holder to submit his Warrant Certificate
for inspection by it.
Section 6.13. This Agreement shall terminate on the Last Exercise Date,
or such earlier date upon which all Warrants have been exercised or redeemed,
except that the Warrant Agent
16
shall account to the Company pursuant to Section 2.02 (e) of this Agreement for
all cash held by it. The provisions of Section 6.03 and 6.04 of this Agreement
shall survive such termination.
Section 6.14. The Article headings in this Agreement are for
convenience only and are not part of this Agreement and shall not affect the
interpretation thereof.
Section 6.15. This Agreement may be executed in any number
counterparts, each of which is so executed shall be deemed to be an original,
and all such counterparts shall together constitute but one and the same
agreement.
OUTLOOK SPORTS TECHNOLOGY. INC.
By:
------------------------------
Jim G. Dodrill II, President
ATTEST:
-----------------------
Secretary
AMERICAN STOCK TRANSFER AND TRUST COMPANY
By:
---------------------------
Name:
---------------------------
Its:
---------------------------
ATTEST:
-----------------------
Secretary
17
SCHEDULE I
SELLING SHAREHOLDERS
Paul H. Berger
Jim G. Dodrill II
Gary M. Treater
Everette C. Hinson
Neal J. Cohen
David K. Stern
James J. Henley
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EXHIBIT "A"
FORM OF WARRANT CERTIFICATE
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