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EXHIBIT 10.30
WARRANT AGREEMENT
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WESTERN COUNTRY CLUBS, INC.
AND
AMERICAN SECURITIES TRANSFER & TRUST, INC.
Warrant Agent
, 1997
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THIS AGREEMENT (the "Agreement") is dated as of ______________, 1997,
between WESTERN COUNTRY CLUBS, INC., a Colorado corporation (the "Company"),
and AMERICAN SECURITIES TRANSFER & TRUST, INC., a Colorado corporation (the
"Warrant Agent").
WHEREAS, the Company proposes to offer to the public up to 460,000
shares of Series A Cumulative Convertible Redeemable Preferred Stock (the
"Series A Preferred Stock") and 1,000,000 Series A Common Stock Purchase
Warrants (the "Warrants"), each of which is exercisable to purchase shares of
Common Stock on the basis of one Warrant to purchase one share of Common Stock;
WHEREAS, upon exercise of the Representative's Purchase Option, the
Company further proposes to issue 100,000 warrants (the "Argent Warrants") to
Argent Securities, Inc. ("Argent") or its designees;
WHEREAS, the Company desires to provide for issuance of warrant
certificates (the "Warrant Certificates") representing the Warrants and the
Argent Warrants; and
WHEREAS, the Company desires the Warrant Agent to act on behalf of the
Company, and the Warrant Agent is willing so to act, in connection with the
issuance, registration, transfer and exchange of Warrant Certificates and
exercise of the Warrants and the Argent Warrants,
NOW, THEREFORE, in consideration of the promises and the mutual
agreements hereinafter set forth, it is agreed that:
1. Warrants/Warrant Certificates. Each Warrant will entitle the
registered holder of such Warrant to purchase from the Company one share of
Common Stock at $______ per share (the "Exercise Price"). Each Argent Warrant
will entitle the registered holder of such Argent Warrant ("Argent Warrant
Holder") to purchase from the Company one share of Common Stock at $______ per
share (the "Argent Exercise Price"). Hereinafter, unless the context indicates
otherwise, as used herein the words "Registered Warrant Holders" will mean the
holders of the Warrants and the Argent Warrants, the word "Warrants" will mean
the Warrants and the Argent Warrants and the words "Warrant Shares" will mean
the Company's securities issuable upon exercise of the Warrants. Unless
changed pursuant to Section 8 hereof, the Warrant Shares will consist of the
Company's Common Stock. A copy of the form of Warrant Certificate for the
Warrants is attached hereto as Exhibit A and a copy of the form of Warrant
Certificate for the Argent Warrants is attached hereto as Exhibit B.
Warrant Certificates representing the right to purchase
Warrant Shares shall be executed by the Company's President and attested to by
the Company's Secretary or Assistant Secretary and delivered to the Warrant
Agent upon execution of this Agreement. The Warrant Certificates shall be
distributed to the purchasers of Units in the Company's initial public offering
pursuant to Registration Statement No. 333-_____.
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Subject to the provisions of Sections 3, 5, 6,7 and 8, the
Warrant Agent shall deliver Warrant Certificates in required whole number
denominations to Registered Holders in connection with any transfer or exchange
permitted under this Agreement. No Warrant Certificates shall be issued except
(i) Warrant Certificates initially issued hereunder, (ii) Warrant Certificates
issued on or after the initial issuance date, upon the exercise of any
Warrants, to evidence the unexercised Warrants held by the exercising
Registered Holder, and (iii) Warrant Certificates issued after the initial
issuance date, upon any transfer or exchange of Warrant Certificates or
replacements of lost or mutilated Warrant Certificates.
2. Form and Execution of Warrant Certificates. The Warrant
Certificates shall be substantially in the form attached as Exhibits A and B.
The Warrant Certificates shall be dated as of the date of their issuance,
whether on initial issuance, transfer or exchange or in lieu of mutilated,
lost, stolen or destroyed Warrant Certificates.
Each such Warrant Certificate shall be numbered serially with
the letter "W" appearing on each Warrant Certificate.
The Warrant Certificates shall be manually countersigned by
the Warrant Agent and shall not be valid for any purpose unless so
countersigned. In the event any officer of the Company who executed the
Warrant Certificates shall cease to be an officer of the Company before the
date of issuance of the Warrant Certificates or before countersignature and
delivery by the Warrant Agent, such Warrant Certificates may be countersigned,
issued and delivered by the Warrant Agent with the same force and effect as
though the person who signed such Warrant Certificates had not ceased to be an
officer of the Company.
3. Exercise. Subject to the provisions of Sections 4, 7 and 8,
the Warrants, when evidenced by a Warrant Certificate, may be exercised at a
price (the "Exercise Price") set forth in Section 1 hereof, on the basis of one
Warrant for one share of Common Stock in whole or in part at any time during
the period (the "Exercise Period") commencing on _______,1997, or earlier if so
determined by Argent (the "Initial Exercise Date") and terminating on
______________, 2000 (the "Expiration Date"), unless extended by a majority
vote of the Company's Board of Directors at its discretion. Notwithstanding
the foregoing, the Argent Warrants will be exercisable commencing on the date
of their issuance and terminating on the Expiration Date. The Company shall
promptly notify the Warrant Agent of any such extension of the Exercise Period
of the Warrants. A Warrant shall be deemed to have been exercised immediately
prior to the close of business on the date (the "Exercise Date") of the
surrender for exercise of the Warrant Certificate. The exercise form shall be
executed by the Registered Holder thereof or his attorney duly authorized in
writing and will be delivered together with payment to the Warrant Agent at
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ (the "Corporate Office"), in
cash or by official bank or certified check, of an amount equal to the
aggregate Exercise Price, in lawful money of the United States of America.
Unless Warrant Shares may not be issued as provided herein,
the person entitled to receive the number of Warrant Shares deliverable on such
exercise shall be treated for all purposes as the holder of such Warrant Shares
as of the close of business on the Exercise Date. In addition,
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the Warrant Agent shall also, at such time, verify that all of the conditions
precedent to the issuance of Warrant Shares set forth in Section 4 are
satisfied as of the Exercise Date. If any one of the conditions precedent set
forth in Section 4 is not satisfied as of the Exercise Date, the Warrant Agent
shall request written instructions from the Company as to whether to return the
Warrant and Exercise Price to the exercising Registered Holder or to hold the
same until all such conditions have been satisfied. The Company shall not be
obligated to issue any fractional share interests in Warrant Shares issuable or
deliverable on the exercise of any Warrant or scrip or cash therefor and such
fractional shares shall be of no value whatsoever. If more than one Warrant
shall be exercised at one time by the same Registered Holder, the number of
full Warrant Shares which shall be issuable on exercise thereof shall be
computed on the basis of the aggregate number of full Warrant Shares issuable
on such exercise.
Within thirty days after the Exercise Date and in any event
prior to the pertinent Expiration Date, pursuant to a Stock Transfer Agreement
between the Company and the Warrant Agent, the Warrant Agent shall cause to be
issued and delivered to the person or persons entitled to receive the same, a
certificate or certificates for the number of Warrant Shares deliverable on
such exercise. No adjustment shall be made in respect of cash dividends on
Warrant Shares delivered on exercise of any Warrant. The Warrant Agent shall
promptly notify the Company in writing of any exercise and of the number of
Warrant Shares delivered and shall cause payment of an amount in cash equal to
the Exercise Price to be promptly made to the order of the Company.
Expenses incurred by the Warrant Agent while acting in the
capacity as Warrant Agent will be paid by the Company. These expenses,
including delivery of exercised share certificates to the shareholder, will be
deducted from the exercise fee submitted prior to distribution of funds to the
Company.
A detailed accounting statement relating to the number of
Warrants exercised and the net amount of exercised funds remitted will be given
to the Company with the payment of each exercise amount. This will serve as an
interim accounting for the Company's use during the Exercise Period. A
complete accounting will be made by the Warrant Agent to the Company concerning
all persons exercising Warrants, the number of Warrant Shares issued and the
amounts paid at the completion of the Exercise Period.
The Company may deem and treat the Registered Holder of the
Warrants at any time as the absolute owner thereof for all purposes, and the
Company shall not be affected by any notice to the contrary. The Warrants
shall not entitle the holder thereof to any of the rights of shareholders or to
any dividend declared on the Common Stock unless the holder shall have
exercised the Warrants and purchased the Warrant Shares prior to the record
date fixed by the Board of Directors of the Company for the determination of
holders of Common Stock entitled to such dividend or other right.
4. Reservation of Shares and Payment of Taxes. The Company
covenants that it will at all times reserve and have available from its
authorized Common Stock such number of Warrant Shares as shall then be issuable
on the exercise of all outstanding Warrants. The Company
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covenants that all Warrant Shares which shall be so issuable shall be duly and
validly issued, fully paid and nonassessable, and free from all taxes, liens
and charges with respect to the issue thereof.
The Company and the Warrant Agent acknowledge that the Company
will be required, pursuant to the Securities Act of 1933, as amended (the
"Act"), to deliver to each Registered Holder, upon the exercise of Warrants and
delivery of Warrant Shares, a prospectus covering the issuance of the Warrant
Shares which meets the requirements of the Act, which prospectus must be a part
of an effective registration statement under the Act at the time that the
Warrants are exercised.
The Company agrees to use its best efforts to maintain, to the
extent required by the Act, a currently effective registration statement under
the Act covering the issuance of the Warrant Shares during the period the
Warrants are exercisable. The Company further agrees, from time to time, to
furnish the Warrant Agent with copies of the Company's prospectus to be
delivered to exercising Registered Holders, as set forth above. If any Warrant
Shares require any other registration with or approval of any government
authority under any federal or state law before such Warrant Shares may be
validly issued or delivered, then the Company covenants that it will in good
faith and as expeditiously as possible endeavor to secure such registration or
approval, as the case may be. No Warrant Shares shall be issued unless and
until any such registration requirements have been satisfied.
The Company shall have the authority to suspend the exercise
of all Warrants, until such registration or approval shall have been obtained;
but all Warrants, the exercise of which are requested during any such
suspension, shall be exercisable at the Exercise Price. If any such period of
suspension continues past the Expiration Date, all Warrants, the exercise of
which have been requested on or prior to the Expiration Date, shall be
exercisable upon the removal of such suspension until the close of the business
day immediately following the expiration of such suspension.
The Registered Holder shall pay all documentary, stamp or
similar taxes and other government charges that may be imposed with respect of
the issuance of the Warrants, or the issuance, transfer or delivery of any
Warrant Shares on exercise of the Warrants. In the event the Warrant Shares
are to be delivered in a name other than the name of the Registered Holder of
the Warrant Certificate, no such delivery shall be made unless the person
requesting the same has paid to the Warrant Agent the amount of any such taxes
or charges incident thereto.
In the event the Warrant Agent ceases to also serve as the
stock transfer agent for the Company, the Warrant Agent is irrevocably
authorized to requisition the Company's new transfer agent from time to time
for Certificates of Warrant Shares required upon exercise of the Warrants, and
the Company will authorize such transfer agent to comply with all such
requisitions. The Company will file with the Warrant Agent a statement setting
forth the name and address of its new transfer agent, for shares of Common
Stock or other capital stock issuable upon exercise of the Warrants and of each
successor transfer agent.
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5. Registration of Transfer. Other than as provided below with
respect to the Argent Warrants, the Warrant Certificates may be transferred in
whole or in part. Warrant Certificates to be exchanged shall be surrendered to
the Warrant Agent at its Corporate Office. The Company shall execute and the
Warrant Agent shall countersign, issue and deliver in exchange therefor the
Warrant Certificate or Certificates which the holder making the transfer shall
be entitled to receive.
The Argent Warrants may not be sold, transferred, assigned,
pledged, or hypothecated until __________, 1998 except to officers of Argent,
except to the underwriters of the Company's initial public offering pursuant to
Registration Statement No. 333-_____, and except by will or operation of law.
After such date, the Argent Warrants may be sold, transferred, assigned,
pledged, or hypothecated provided that any such transaction is in accordance
with the registration or exemption from registration provisions of the Act and
any applicable state securities laws. If the Argent Warrants are exercised by
___________, 1998, then any Warrant Shares acquired as a result of any such
exercise may not be sold, transferred, assigned, pledged, or hypothecated until
__________, 1998, except to officers of Argent, except to the underwriters of
the Company's initial public offering pursuant to Registration Statement No.
333-_____, and except by will or operation of law.
The Warrant Agent shall keep transfer books at its Corporate
Office which shall register Warrant Certificates and the transfer thereof. On
due presentment for registration of transfer of any Warrant Certificate at such
office, the Company shall execute and the Warrant Agent shall issue and deliver
to the transferee or transferees a new Warrant Certificate or Certificates
representing an equal aggregate number of Warrants. All Warrant Certificates
presented for registration of transfer or exercise shall be duly endorsed or be
accompanied by a written instrument or instruments of transfer in form
satisfactory to the Company and the Warrant Agent. At the time of exercise,
the transfer fee shall be paid by the Holder. The Company may require payment
of a sum sufficient to cover any tax or other government charge that may be
imposed in connection therewith.
All Warrant Certificates so surrendered, or surrendered for
exercise, or for exchange in case of mutilated Warrant Certificates, shall be
promptly cancelled by the Warrant Agent and thereafter retained by the Warrant
Agent until termination of the agency created by this Agreement. Prior to due
presentment for registration of transfer thereof, the Company and the Warrant
Agent may treat the Registered Holder of any Warrant Certificate as the
absolute owner thereof (notwithstanding any notations of ownership or writing
thereon made by anyone other than the Company or the Warrant Agent), and the
parties hereto shall not be affected by any notice to the contrary.
6. Loss or Mutilation. On receipt by the Company and the Warrant
Agent of evidence satisfactory as to the ownership of and the loss, theft,
destruction or mutilation of any Warrant Certificate, the Company shall
execute, and the Warrant Agent shall countersign and deliver in lieu thereof, a
new Warrant Certificate representing an equal aggregate number of Warrants. In
the case of loss, theft or destruction of any Warrant Certificate, the
individual requesting issuance of a new Warrant Certificate shall be required
to indemnify the Company and Warrant Agent in an amount
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satisfactory to each of them. In the event a Warrant Certificate is mutilated,
such Certificate shall be surrendered and cancelled by the Warrant Agent prior
to delivery of a new Warrant Certificate. Applicants for a new Warrant
Certificate shall also comply with such other regulations and pay such other
reasonable charges as the Company may prescribe.
7. Redemption of Warrants. (a) Commencing on ____________, 199_,
the Warrants are subject to redemption by the Company at $.125 per Warrant on
not less than 30 days' prior written notice to the holders of Warrants,
provided that the daily trading price per share of Common Stock has been at
least $______ (150% of the closing bid price for the Company's Common Stock on
the effective date of Registration Statement No. 333-_____) for a period of at
least 5 consecutive trading days ending within 10 days prior to the date upon
which the notice of redemption is given. For purposes of determining the daily
trading price of the Company's Common Stock, (i) if the Common Stock is listed
on a national securities exchange, is admitted to unlisted trading privileges
on a national securities exchange, or is quoted on a trading system of the
National Association of Securities Dealers, Inc. such as the NASDAQ Small Cap
Market or the NASDAQ/NMS, then the last reported sale price of the Common Stock
on such exchange or system each day shall be used, but if no such sale has
occurred on such day or if the last sale price is not reported, then the
average of the closing bid prices for the Common Stock for such day on such
exchange or system shall be used; or (ii) if the Common Stock is not then
traded on any such exchange or system, then the average of the daily bid prices
for the Company's Common Stock reported by the National Quotation Bureau, Inc.
each day shall be used if the Company's Common Stock is included in the
National Quotation System. The Warrants will be exercisable until the close of
the business day preceding the date fixed for redemption, if any.
Notwithstanding the foregoing, the Company will not be entitled to call any of
the Warrants for redemption or redeem any of the Warrants at a time when the
Warrants are not exercisable because the Company has not maintained a current
registration statement as described in Section 4 hereof. On the redemption
date, the Warrant Holders of record of redeemed Warrants shall be entitled to
payment of the Redemption price upon surrender of such redeemed Warrants to the
Company at the principal office of the Warrant Agent.
(b) Notice of redemption of any Warrants shall be given by
mailing, by registered or certified mail, return receipt requested, a copy of
such notice to all of the affected Warrant Holders of record as of two days
prior to the mailing date at their respective addresses appearing on the books
or transfer records of the Company or such other address designated in writing
by the Warrant Holder of record to the Warrant Agent not less than seventy-five
(75) days prior to the redemption date and shall be effective upon receipt.
(c) Notwithstanding any other provision of this Agreement, from
and after the redemption date, all rights of the affected Warrant Holders
(except the right to receive the Redemption Price) shall terminate, but only if
(i) on or prior to the redemption date the Company shall have irrevocably
deposited with the Warrant Agent, as paying agent, a sufficient amount to pay
on the redemption date the Redemption Price for all Warrants called for
redemption and (ii) the notice of redemption shall have stated the name and
address of the Warrant Agent and the intention of the Company to deposit such
amount with the Warrant Agent on or before the redemption date.
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(d) The Warrant Agent shall pay to the Warrant Holders of record
of redeemed Warrants all monies received by the Warrant Agent for the
redemption of Warrants to which the Warrant Holders of record of such redeemed
Warrants are entitled under the provisions of this Agreement.
(e) Any amounts deposited with the Warrant Agent which are not
required for redemption of the Warrants may be withdrawn by the Company. Any
amounts deposited with the Warrant Agent which shall be unclaimed after six (6)
months after the redemption date may be withdrawn by the Company, and
thereafter the Warrant Holders of the Warrants called for redemption for which
such funds were deposited shall look solely to the Company for payment. The
Company shall be entitled to the interest , if any, on funds deposited with the
Warrant Agent, and the Warrant Holders of redeemed Warrants shall have no right
to any such interest.
(f) If the Company fails to make a sufficient deposit with the
Warrant Agent as provided above, the Warrant Holders of any Warrants called for
redemption may at the option of the Warrant Holder (i) by notice to the Company
declare the notice of redemption a nullity, or (ii) maintain an action against
the Company for the Redemption Price. If the Warrant Holder brings such an
action the Company will pay reasonable attorneys' fees of the Warrant Holder.
If the Warrant Holder fails to bring an action against the Company for
Redemption Price within ninety (90) days after the redemption date, the Warrant
holder shall be deemed to have elected to declare the notice of redemption to
be a nullity and such notice shall be without any force or effect.
8. Adjustment of Exercise Price and Warrant Shares. After each
adjustment of the Exercise Price pursuant to this Section 8, the number of
Warrant Shares purchasable upon the exercise of each Warrant shall be the
number receivable upon exercise thereof prior to such adjustment multiplied by
a fraction, the numerator of which shall be the original Exercise Price as
defined in Section 3 above and the denominator of which shall be such adjusted
Exercise Price. The Exercise Price shall be subject to adjustment as set forth
below:
(a)(i) In case the Company shall hereafter (A) pay a dividend
or make a distribution on its Common Stock in shares of its capital stock
(whether shares of Common Stock or of capital stock of any other class), (B)
subdivide its outstanding shares of Common Stock, (C) combine its outstanding
shares of Common Stock into a smaller number of shares, or (D) issue by
reclassification of its shares of Common Stock any shares of capital stock of
the Company, the Exercise Price in effect immediately prior to such action
shall be adjusted so that the Registered Holder of any Warrant thereafter
exercised shall be entitled to receive the number of shares of capital stock of
the Company which he would have owned immediately following such action had
such Warrant been exercised immediately prior thereto. An adjustment made
pursuant to this subsection shall become effective immediately after the record
date in the case of a dividend and shall become effective immediately after the
effective date in the case of a subdivision, combination or reclassification.
If, as a result of an adjustment made pursuant to this subsection, the
Registered Holder of any Warrant thereafter exercised shall become entitled to
receive shares of two or more classes of capital stock of the Company, the
Board of Directors (whose determination shall be conclusive and shall be
described in a statement filed with the Warrant Agent) shall determine the
allocation of the adjusted Exercise Price between or among shares of such
classes of capital stock.
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(ii) In any case in which this Section 8(a) shall require
that an adjustment to the Exercise Price be made immediately following a record
date, the Company may elect to defer (but only until five business days
following the filing by the Company with the Warrant Agent of the certificate
of independent public accountants described in subsection (i) of Section 8(d))
issuing to the holder of any Warrants exercised after such record date the
shares of Common Stock and other capital stock of the Company issuable upon
such exercise over and above the shares of Common Stock and other capital stock
of the Company issuable upon such exercise on the basis of the Exercise Price
prior to adjustment.
(iii) No adjustment in the Exercise Price shall be required
to be made unless such adjustment would require an increase or decrease of at
least $.05; provided, however, that any adjustments which by reason of this
subsection are not required to be made shall be carried forward and taken into
account in any subsequent adjustment. All calculations under this Section 8
shall be made to the nearest cent or to the nearest one tenth of a share, as
the case may be, but in no event shall the Company be obligated to issue
fractional shares upon the exercise of any Warrant.
(b) In case of any reclassification or change of Warrant
Shares (other than a change in par value or from par value to no par value or
from no par value to par value or as a result of a subdivision or combination),
or in case of any consolidation or merger of the Company with or into another
corporation (other than a merger with a Subsidiary in which merger the Company
is the continuing corporation and which does not result in any reclassification
or change of the then Warrant Shares (other than a change in par value or from
par value to no par value or from no par value to par value) or in the case of
any sale or conveyance to another corporation of the property of the Company as
an entirety or substantially as an entirety, then, as a condition of such
reclassification, change, consolidation, merger, sale or conveyance, the
Company, or such successor or purchasing corporation, as the case may be, shall
make lawful and adequate provision whereby the Registered Holder of each
Warrant then outstanding shall have the right thereafter to receive on exercise
of such Warrant the kind and amount of shares of stock and other securities and
property receivable upon such reclassification, change, consolidation, merger,
sale or conveyance by a holder of the number of Warrant Shares issuable upon
exercise of such Warrant immediately prior to such reclassification, change,
consolidation, merger, sale or conveyance and the Company or its successors
shall forthwith file at the Corporate Office of the Warrant Agent a statement
setting forth such provisions signed by (1) its Chairman of the Board or Vice
Chairman of the Board or President or a Vice President and (2) by its Treasurer
or an Assistant Treasurer or its Secretary or an Assistant Secretary evidencing
such provisions. Such provisions shall include provision for adjustments which
shall be as nearly equivalent as may be practicable to the adjustments provided
for in Section 8(a). The above provisions of this Section 8(b) shall similarly
apply to successive reclassification and changes of Warrant Shares and to
successive consolidations, mergers, sales or conveyances.
(c) Before taking any action which could cause an
adjustment reducing the Exercise Price below the then par value of the Warrant
Shares, the Company will take any corporate action which may, in the opinion
of its counsel, be necessary in order that the Company may validly and legally
issue fully paid and nonassessable Warrant Shares at such adjusted Exercise
Price.
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(d)(i) Upon any adjustment of the Exercise Price required to
be made pursuant to this Section 8, the Company within 30 days thereafter shall
(A) cause to be filed with the Warrant Agent a certificate of a firm of
independent accountants setting forth the Exercise Price after such adjustment
and setting forth in reasonable detail the method of calculation and the facts
upon which such calculation is based, which certificate shall be conclusive
evidence of the correctness of such adjustment, and (B) cause to be mailed to
each of the Registered Holders of the Warrant Certificates written notice of
such adjustment. Where appropriate, such notice may be given in advance and
included as a part of the notice required to be mailed under the provisions of
subsection 8(d)(ii).
(ii) In case at any time:
(A) The Company shall declare any dividend
upon its Common Stock payable otherwise than in cash; or
(B) The Company shall offer for subscription
to the holders of its Common Stock any additional shares of stock of any class
or any other securities convertible into shares of stock or any rights to
subscribe thereto; or
(C) There shall be any capital
reorganization or reclassification of the capital stock of the Company, or a
sale of all or substantially all of the shares of the assets of the Company, or
a consolidation or merger of the Company with another corporation (other than a
merger with a subsidiary in which merger the Company is the continuing
corporation and which does not result in any reclassification or change of the
then Warrant Shares issuable upon exercise of the Warrants other than a change
in par value or from par value to no par value or from no par value to par
value); or
(D) There shall be a voluntary or
involuntary dissolution, liquidation or winding up of the Company;
then, in any one or more of said cases, the Company shall cause to be mailed to
each of the Registered Holders of the Warrant Certificates, at the earliest
practicable time (and, in any event, not less than 20 days before any record
date or other date set for definitive action), written notice of the date on
which the books of the Company shall close or a record shall be taken for such
dividend, distribution or subscription rights or such reorganization,
reclassification, sale, consolidation, merger, dissolution, liquidation or
winding up shall take place, as the case may be. Such notice shall also set
forth such facts as shall indicate the effect of such action (to the extent
such effect may be known at the date of such notice) on the Exercise Price and
the kind and amount of the shares of stock and other securities and property
deliverable upon exercise of the Warrants. Such notice shall also specify the
date as of which the holders of the Common Stock of record shall participate in
said dividend, distribution or subscription rights or shall be entitled to
exchange their Common Stock for securities or other property deliverable upon
such reorganization, reclassification, sale, consolidation, merger,
dissolution, liquidation or winding up, as the case may be (on which date, in
the event of voluntary or involuntary dissolution, liquidation or winding up of
the Company, the right to exercise the Warrants shall terminate).
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(iii) Without limiting the obligation of the Company to
provide notice to the Registered Holders of the Warrant Certificates of
corporate actions hereunder, is agreed that failure of the Company to give
notice shall not invalidate such corporate action of the Company.
9. Reduction in Exercise Price at Company's Option. In addition
to any adjustments made to the Exercise Price pursuant to Section 8, the
Company's Board of Directors may, at its sole discretion, reduce the Exercise
Price of the Warrants in effect at any time either for the life of the Warrants
or any shorter period of time determined by the Company's Board of Directors.
The Company shall promptly notify the Warrant Agent and the Registered Holders
of any such reductions in the Exercise Price.
10. Duties, Compensation and Termination of Warrant Agent. The
Warrant Agent shall act hereunder as agent and in a ministerial capacity for
the Company, and its duties shall be determined solely by the provisions
hereof. The Warrant Agent shall not, by issuing and delivering Warrant
Certificates or by any other act hereunder, be deemed to make any
representations as to the validity, value or authorization of the Warrant
Certificates or the Warrants represented thereby or of the Warrant Shares or
other property delivered on exercise of any Warrant. The Warrant Agent shall
not at any time be under any duty or responsibility to any holder of the
Warrant Certificates to make or cause to be made any adjustment of the Exercise
Price or to determine whether any fact exists which may require any such
adjustments.
The Warrant Agent shall not (i) be liable for any recital or
statement of fact contained herein or for any action taken or omitted by it in
reliance on any Warrant Certificate or other document or instrument believed by
it in good faith to be genuine and to have been signed or presented by the
proper party or parties, (ii) be responsible for any failure on the part of the
Company to comply with any of its covenants and obligations contained in this
Agreement except for its own negligence or willful misconduct, or (iii) be
liable for any act or omission in connection with this Agreement except for its
own negligence or willful misconduct.
The Company agrees to indemnify the Warrant Agent against any
and all losses, expenses and liabilities which the Warrant Agent may incur in
connection with the delivery of copies of the Company's prospectus to
exercising Registered Holders upon the exercise of any Warrants as set forth in
Section 3.
The Warrant Agent may at any time consult with counsel
satisfactory to it (which may be counsel for the Company) and shall incur no
liability or responsibility for any action taken or omitted by it in good faith
in accordance with the opinion or advice of such counsel. Any notice,
statement, instruction, request, direction, order or demand of the Company
shall be sufficiently evidenced by an instrument signed by its President and
attested by its Secretary or Assistant Secretary. The Warrant Agent shall not
be liable for any action taken or omitted by it in accordance with such notice,
statement, instruction, request, order or demand.
The Company agrees to pay the Warrant Agent reasonable
compensation for its services hereunder and to reimburse the Warrant Agent for
its reasonable expenses as per the fee
-10-
12
schedule attached hereto as Exhibit C. The Company further agrees to indemnify
the Warrant Agent against any and all losses, expenses and liabilities,
including judgments, costs and counsel fees, for any action taken or omitted by
the Warrant Agent in the execution of its duties and powers hereunder,
excepting losses, expenses and liabilities arising as a result of the Warrant
Agent's negligence or willful misconduct.
The Warrant Agent may resign its duties or the Company may
terminate the Warrant Agent and the Warrant Agent shall be discharged from all
further duties and liabilities hereunder (except liabilities arising as a
result of the Warrant Agent's own negligence or willful misconduct), on 30
days' prior written notice to the other party. At least 15 days prior to the
date such resignation is to become effective, the Warrant Agent shall cause a
copy of such notice of resignation to be mailed to the Registered Holder of
each Warrant Certificate. On such resignation or termination the Company shall
appoint a new warrant agent. If the Company shall fail to make such
appointment within a period of 30 days after it has been notified in writing of
the resignation by the Warrant Agent, then the registered holder of any Warrant
Certificate may apply to any court of competent jurisdiction for the
appointment of a new warrant agent.
After acceptance in writing of an appointment of a new warrant
agent is received by the Company, such new warrant agent shall be vested with
the same powers, rights, duties and responsibilities as if it had been
originally named herein as the Warrant Agent, without any further assurance,
conveyance, act or deed; provided, however, if it shall be necessary or
expedient to execute and deliver any further assurance, conveyance, act or
deed, the same shall be done at the expense of the Company and shall be legally
and validly executed. The Company shall file a notice of appointment of a new
warrant agent with the resigning Warrant Agent and shall forthwith cause a copy
of such notice to be mailed to the Registered Holder of each Warrant
Certificate.
Any corporation into which the Warrant Agent or any new
warrant agent may be converted or merged, or any corporation resulting from any
consolidation to which the Warrant Agent or any new warrant agent shall be a
party, or any corporation succeeding to the corporate trust business of the
Warrant Agent shall be a successor Warrant Agent under this Agreement, provided
that such corporation is eligible for appointment as a successor to the Warrant
Agent under the provisions of the preceding paragraph. Any such successor
Warrant Agent shall promptly cause notice of its succession as Warrant Agent to
be mailed to the Company and to the Registered Holder of each Warrant
Certificate. No further action shall be required for establishment and
authorization of such successor warrant agent.
The Warrant Agent, its officers or directors and its
subsidiaries or affiliates may buy, hold or sell Warrants or other securities
of the Company and otherwise deal with the Company in the same manner and to
the same extent and with like effect as though it were not Warrant Agent.
Nothing herein shall preclude the Warrant Agent from acting in any other
capacity for the Company or for any other legal entity.
11. Modification of Agreement. The Warrant Agent and the Company
may by supplemental agreement make any changes or corrections in this Agreement
(i) that they shall deem
-11-
13
appropriate to cure any ambiguity or to correct any defective or inconsistent
provision or mistake or error herein contained; or (ii) that they may deem
necessary or desirable and which shall not adversely affect the interests of
the holders of Warrant Certificates; provided, however, this Agreement shall
not otherwise be modified, supplemented or altered in any respect except with
the consent in writing of the Registered Holders of Warrant Certificates
representing not less than two-thirds of the Warrants outstanding.
Additionally, except as provided in Section 8, no change in the number or
nature of the Warrant Shares purchasable on exercise of a Warrant, increase in
the purchase price therefor, or the acceleration of the Expiration Date of a
Warrant shall be made without the consent in writing of the Registered Holder
of the Warrant Certificate representing such Warrant, other than such changes
as are specifically prescribed or allowed by this Agreement.
12. Notices. All notices, demands, elections, opinions or
requests (however characterized or described) required or authorized hereunder
shall be deemed given sufficiently if in writing and sent by registered or
certified mail, return receipt requested and postage prepaid, or by tested
telex, telegram or cable to, in the case of the Company:
Western Country Clubs, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇ Key & ▇▇▇▇▇▇▇▇, P.C.
Mellon Financial Center
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
and in the case of the Warrant Agent:
American Securities Transfer and Trust, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
and if to the Registered Holder of a Warrant Certificate, at the address of
such holder as set forth on the books maintained by the Warrant Agent.
13. Binding Agreement. This Agreement shall be binding upon and
inure to the benefit of the Company, the Warrant Agent and their respective
successors and assigns, and the holders from time to time of Warrant
Certificates. Nothing in this Agreement is intended or shall be construed to
confer upon any other person any right, remedy or claim or to impose on any
other person any duty, liability or obligation.
-12-
14
14. Further Instruments. The parties shall execute and deliver
any and all such other instruments and shall take any and all other actions as
may be reasonably necessary to carry out the intention of this Agreement.
15. Severability. If any provision of this Agreement shall be
held, declared or pronounced void, voidable, invalid, unenforceable, or
inoperative for any reason by any court of competent jurisdiction, government
authority or otherwise, such holding, declaration or pronouncement shall not
affect adversely any other provision of this Agreement, which shall otherwise
remain in full force and effect and be enforced in accordance with its terms,
and the effect of such holding, declaration or pronouncement shall be limited
to the territory or jurisdiction in which made.
16. Waiver. All the rights and remedies of either party under
this Agreement are cumulative and not exclusive of any other rights and
remedies as provided by law. No delay or failure on the part of either party
in the exercise of any right or remedy arising from a breach of this Agreement
shall operate as a waiver of any subsequent right or remedy arising from a
subsequent breach of this Agreement. The consent of any party where required
hereunder to act or occurrence shall not be deemed to be a consent to any other
action or occurrence.
17. General Provisions. This Agreement shall be construed and
enforced in accordance with, and governed by, the laws of the State of
Colorado. Except as otherwise expressly stated herein, time is of the essence
in performing hereunder. This Agreement embodies the entire agreement and
understanding between the parties and supersedes all prior agreements and
understandings relating to the subject matter hereof, and this Agreement may
not be modified or amended or any term or provisions hereof waived or
discharged except in writing signed by the party against whom such amendment,
modification, waiver or discharge is sought to be enforced. The headings of
this Agreement are for convenience in reference only and shall not limit or
otherwise affect the meaning hereof. This Agreement may be executed in any
number of counterparts, each of which shall be deemed an original, but all of
which taken together shall constitute one and the same instrument.
-13-
15
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the date first above written.
WESTERN COUNTRY CLUBS, INC.
ATTEST:
By
------------------------------- ----------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Secretary ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, President
AMERICAN SECURITIES TRANSFER AND
TRUST, INC.
Warrant Agent
By
----------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, President
-14-
16
EXHIBIT A
WESTERN COUNTRY CLUBS, INC.
Incorporated Under the Laws of the State of Colorado
No. W- __Series A Common Stock
Purchase Warrants
CUSIP ___________
CERTIFICATE FOR (See Reverse
SERIES A COMMON STOCK For Certain
PURCHASE WARRANTS Definitions)
This Warrant Certificate certifies that ___________________, or
registered assigns ("the Warrant Holder"), is the registered owner of the above
indicated number of Series A Common Stock Purchase Warrants (the "Warrants")
expiring on __________, 2000 (the "Expiration Date"). One Warrant entitles the
Warrant Holder to purchase one share of common stock ("Share") from Western
Country Clubs, Inc., a Colorado corporation (the "Company"), at a purchase
price of $____ (the "Exercise Price"), commencing on __________, 1997, and
terminating on the Expiration Date ("Exercise Period"), upon surrender of this
Warrant Certificate with the exercise form hereon duly completed and executed
with payment of the Exercise Price at the office of American Securities
Transfer & Trust, Inc. (the "Warrant Agent"), but only subject to the
conditions set forth herein and in a Warrant Agreement dated as of _________,
1997 (the "Warrant Agreement") between the Com pany and the Warrant Agent. The
Exercise Price, the number of shares purchasable upon exercise of each Warrant,
the number of Warrants outstanding and the Expiration Date are subject to
adjustments upon the occurrence of certain events. The Warrant Holder may
exercise all or any number of Warrants. Reference hereby is made to the
provisions on the reverse side of this Warrant Certificate and to the
provisions of the Warrant Agreement, all of which are incorporated by reference
in and made a part of this Warrant Certificate and shall for all purposes have
the same effect as though fully set forth at this place.
Upon due presentment for transfer of this Warrant Certificate at the
office of the Warrant Agent, a new Warrant Certificate or Warrant Certificates
of like tenor and evidencing in the aggregate a like number of Warrants,
subject to any adjustments made in accordance with the provi sions of the
Warrant Agreement, shall be issued to the transferee in exchange for this
Warrant Certificate, subject to the limitations provided in the Warrant
Agreement, upon payment of $_____ per Warrant Certificate and any tax or
governmental charge imposed in connection with such trans fer.
The Warrant Holder of the Warrants evidenced by this Warrant
Certificate may exercise all or any whole number of such Warrants during the
period and in the manner stated hereon. The Exercise Price shall be payable in
lawful money of the United States of America and in cash or by certified or
bank cashier's check or bank draft payable to the order of the Company. If upon
exercise of any Warrants evidenced by this Warrant Certificate the number of
Warrants exercised shall be less
17
than the total number of Warrants so evidenced, there shall be issued to the
Warrant Holder a new Warrant Certificate evidencing the number of Warrants not
so exercised.
Subject to the following paragraph, no Warrant may be exercised after
5:00 p.m. Mountain Time on the Expiration Date and any Warrant not exercised by
such time shall become void, unless extended by the Company.
Commencing on the date the Warrants are separately tradeable and
transferable, the Warrants are subject to redemption by the Company at $.125
per Warrant, at any time commencing ________, 1998 (twelve months from the date
of Registration Statement No. 333-_______) and at any time prior to their
expiration, on not less than 30 days' prior written notice to the holders of
Warrants, provided that the daily trading price per share of Common Stock has
been at least $______ (150% of the closing bid price for the Company's Common
Stock on the effective date of Registration Statement No. 333-_____) for a
period of at least 5 consecutive trading days ending within 10 days prior to
the date upon which the notice of redemption is given. During the 30-day period
immedi ately following the giving of such notice, the Warrant Holders shall
have the right to exercise the Warrants so held by them. Upon expiration of
such 30-day period, all rights of the Warrant Holders shall terminate, other
than the rights to receive the redemption price, without interest, and the
right to receive the redemption price shall itself expire on the Warrant
Expiration Date.
This Warrant Certificate shall not be valid unless countersigned by
the Warrant Agent.
IN WITNESS WHEREOF, the Company has caused this Warrant to be signed
by its President and by its Secretary, each by a facsimile of his/her
signature, and has caused a facsimile of its corporate seal to be imprinted
hereon.
Dated:
------------------------
WESTERN COUNTRY CLUBS, INC.
By
----------------------------- -------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Secretary ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, President
AMERICAN SECURITIES TRANSFER &
TRUST, INC.
Warrant Agent
By
--------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, President
-2-
18
FORM OF REVERSE SIDE OF WARRANT
This Warrant Certificate, when surrendered to the Warrant Agent at its
principal office by the Warrant Holder, in person or by attorney duly
authorized in writing, may be exchanged in the manner and subject to the
limitations provided in the Warrant Agreement, upon the payment of any tax or
other governmental charge imposed in connection with such exchange, for another
Warrant Certificate or Warrant Certificates of like tenor and evidencing a like
number of Warrants, subject to any adjustments made in accordance with the
provisions of the Warrant Agreement.
The Company and the Warrant Agent may deem and treat the registered
holder hereof as the absolute owner of this Warrant Certificate
(notwithstanding any notation of ownership or other writing hereon made by
anyone) for all proposes and neither the Company nor the Warrant Agent shall be
affected by any notice to the contrary. No Warrant Holder, as such, shall have
any rights of a holder of the Common Stock of the Company, either at law or at
equity, and the rights of the Warrant holder, as such, are limited to those
rights expressly provided in the Warrant Agreement and in the Warrant
Certificate.
Under the Warrant Agreement the Exercise Price is subject to
adjustment if the Company shall effect any stock split or stock combination
with respect to the Common Stock. Any such adjustment of the Exercise Price
will also result in an adjustment of the number of shares of Common Stock
purchasable upon exercise of a Warrant or, if the Company should elect, an
adjustment of each outstanding Warrant into a different number of Warrants.
The Company shall not be required to issue fractions of Warrants upon
any such adjustment or to issue fractions of shares upon the exercise of any
Warrants upon any such adjustment, in accordance with the Warrant Agreement.
The Warrant Agreement is subject to amendment upon the approval of
holders of at least two-thirds of the outstanding Warrants as a group, except
that no such approval is required for the reduction of the Exercise Price or
extension of the Expiration Date. No amendment shall accelerate the Expiration
Date or increase the Exercise Price without the approval of all the holders of
all outstanding Warrants. A copy of the Warrant Agreement will be available at
all reasonable times at the office of the Warrant Agent for inspection by any
Warrant Holder. As a condition of such inspection, the Warrant Agent may
require any Warrant Holder to submit the Warrant Holder's Warrant Certificate
for inspection.
IMPORTANT: The Warrants represented by this Certificate may not be exercised by
a Warrant Holder unless at the time of exercise the underlying shares of Common
Stock are qualified for sale by registration or otherwise in the state where
the Warrant Holder resides or unless the issuance of the shares of Common Stock
would be exempt under the applicable state securities laws. Further, a
registration statement under the Securities Act of 1933, as amended, covering
the issuance of shares of Common Stock upon the exercise of this Warrant must
be in effect and current at the time of exercise unless the issuance of shares
of Common Stock upon any exercise is exempt from the registration requirements
of the Securities Act of 1933. Unless such registration statement is in effect
and current at the time of exercise, or unless such an exemption is available
the Company may decline to permit the exercise of this Warrant.
-3-
19
TRANSFER FEE $_____ PER CERTIFICATE
WESTERN COUNTRY CLUBS, INC.
The following abbreviations, when used in the inscription on the face of
this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT -
TEN ENT - as tenants by the entireties Custodian
-------------------
JT TEN - as joint tenants with right (Cust) (Minor)
of survivorship and not as under Uniform Gifts
tenants in common to Minors Act _______
(State)
Additional abbreviations may also be used though not in the above list.
FORM OF ASSIGNMENT
(To Be Executed by the Registered Holder if the Registered Holder
Desires to Assign Series A Warrants Evidenced by the
Within Warrant Certificate)
FOR VALUE RECEIVED___________________hereby sells, assigns and transfers
unto _____________ Series A Warrants, evidenced by the within Warrant
Certificate, and does hereby irrevocably constitute and appoint _______________
Attorney to transfer the said Warrants evidenced by the within Warrant
Certificate on the books of the Company, with full power of substitution.
Dated:
---------------- -------------------------------
Signature
NOTICE: The above signature must correspond with the name as written
upon the face of the within Warrant Certificate in every
particular, without alteration or enlargement or any change
whatsoever.
Signature Guaranteed:
--------------------------------------
-4-
20
FORM OF ELECTION TO PURCHASE
(To be Executed by the Holder if the Registered Holder Desires to Exercise
Warrants Evidenced by the Within Warrant Certificate)
To Western Country Clubs, Inc.:
The undersigned hereby irrevocably elects to exercise ______ Series A
Warrants, evidenced by the within Warrant Certificate for, and to purchase
thereunder, ______ full shares of Common Stock issuable upon exercise of said
Warrants and delivery of $______ and any applicable taxes.
The undersigned requests that certificates for such shares be issued
in the name of:
PLEASE INSERT SOCIAL SECURITY OR
TAX IDENTIFICATION NUMBER
------------------------------- ---------------------------------
(Please print name and address)
------------------------------- ---------------------------------
------------------------------- ---------------------------------
If said number of Series A Warrants shall not be all the Warrants
evidenced by the within Warrant Certificate, the undersigned requests that a
new Warrant Certificate evidencing the Warrants not so exercised be issued in
the name of and delivered to:
------------------------------------------------------------------------------
(Please print name and address)
------------------------------------------------------------------------------
------------------------------------------------------------------------------
Dated: Signature:
---------------------------- ----------------------
NOTICE: The above signature must correspond with the name as written upon the
face of the within Warrant Certificate in every particular, without
alteration or enlargement or any change whatsoever, or if signed by
any other person the Form of Assignment hereon must be duly executed
and if the certificate representing the shares or any Warrant
Certificate representing Warrants not exercised is to be registered
in a name other than that in which the within Warrant Certificate is
registered, the signature of the holder hereof must be guaranteed.
Signature Guaranteed:
-----------------------------
THE SIGNATURE(S) MUST BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION
(BANKS, STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH
MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM, PURSUANT TO
S.E.C. RULE 17Ad-15.
-5-
21
EXHIBIT B
WESTERN COUNTRY CLUBS, INC.
Incorporated Under the Laws of the State of Colorado
No. W- ______ Series A Common Stock
Purchase Warrants
CUSIP ____________
CERTIFICATE FOR (See Reverse
SERIES A COMMON STOCK For Certain
PURCHASE WARRANTS Definitions)
This Warrant Certificate certifies that Argent Securities, Inc., or
registered assigns ("the Warrant Holder"), is the registered owner of the above
indicated number of Series A Common Stock Purchase Warrants (the "Warrants")
expiring on __________, 2000 (the "Expiration Date"). One Warrant entitles the
Warrant Holder to purchase one share of Common Stock ("Share") from Western
Country Clubs, Inc., a Colorado corporation (the "Company"), at a purchase
price of $____ (the "Exercise Price"), commencing on __________, 1997, and
terminating on the Expiration Date ("Exercise Period"), upon surrender of this
Warrant Certificate with the exercise form hereon duly completed and executed
with payment of the Exercise Price at the office of American Securities
Transfer & Trust, Inc. (the "Warrant Agent"), but only subject to the
conditions set forth herein and in a Warrant Agreement dated as of _________,
1997 (the "Warrant Agreement") between the Com pany and the Warrant Agent. The
Exercise Price, the number of shares purchasable upon exercise of each Warrant,
the number of Warrants outstanding and the Expiration Date are subject to
adjustments upon the occurrence of certain events. The Warrant Holder may
exercise all or any number of Warrants. Reference hereby is made to the
provisions on the reverse side of this Warrant Certificate and to the
provisions of the Warrant Agreement, all of which are incorporated by reference
in and made a part of this Warrant Certificate and shall for all purposes have
the same effect as though fully set forth at this place.
Until _____, 1998, this Warrant Certificate is not transferrable
except to an underwriter that participated in the public offering by the
Company that resulted in the original issuance of the Warrants, to a partner or
an officer of such an underwriter or by will on operation of law. Upon due
presentment for transfer of this Warrant Certificate at the office of the
Warrant Agent, a new Warrant Certificate or Warrant Certificates of like tenor
and evidencing in the aggregate a like number of Warrants, subject to any
adjustments made in accordance with the provisions of the Warrant Agreement,
shall be issued to the transferee in exchange for this Warrant Certificate,
subject to the limitations provided in the Warrant Agreement, upon payment of
$_____ per Warrant Certificate and any tax or governmental charge imposed in
connection with such transfer.
22
The Warrant Holder of the Warrants evidenced by this Warrant
Certificate may exercise all or any whole number of such Warrants during the
period and in the manner stated hereon. The Exercise Price shall be payable in
lawful money of the United States of America and in cash or by certified or bank
cashier's check or bank draft payable to the order of the Company. If upon
exercise of any Warrants evidenced by this Warrant Certificate the number of
Warrants exercised shall be less than the total number of Warrants so evidenced,
there shall be issued to the Warrant Holder a new Warrant Certificate evidencing
the number of Warrants not so exercised.
Subject to the following paragraph, no Warrant may be exercised after
5:00 p.m. Mountain Time on the Expiration Date and any Warrant not exercised by
such time shall become void, unless extended by the Company.
Commencing on the date the Warrants are separately tradeable and
transferable, the Warrants are subject to redemption by the Company at $.125
per Warrant, at any time commencing _______, 1998 (twelve months from the
effective date of the Company's Registration Statement No. 333- _____) and
prior to their expiration, on not less than 30 days' prior written notice to
the holders of Warrants, provided that the daily trading price per share of
Common Stock has been at least $______ (150% of the closing bid price for the
Company's Common Stock on the effective date of Registration Statement No.
333-_________) for a period of at least five (5) consecutive trading days
ending within 10 days prior to the date upon which the notice of redemption is
given. During the 30-day period immediately following the giving of such
notice, the Warrant Holders shall have the right to exercise the Warrants so
held by them. Upon expiration of such 30-day period, all rights of the Warrant
Holders shall terminate, other than the rights to receive the redemption price,
without interest, and the right to receive the redemption price shall itself
expire on the Warrant Expiration Date.
This Warrant Certificate shall not be valid unless countersigned by
the Warrant Agent.
-2-
23
IN WITNESS WHEREOF, the Company has caused this Warrant to be signed
by its President and by its Secretary, each by a facsimile of his/her
signature, and has caused a facsimile of its corporate seal to be imprinted
hereon.
Dated:
-------------------
WESTERN COUNTRY CLUBS, INC.
By
------------------------------- --------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Secretary ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, President
AMERICAN SECURITIES TRANSFER &
TRUST, INC.
Warrant Agent
By
--------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, President
-3-
24
FORM OF REVERSE SIDE OF WARRANT
This Warrant Certificate, when surrendered to the Warrant Agent at its
principal office by the Warrant Holder, in person or by attorney duly
authorized in writing, may be exchanged in the manner and subject to the
limitations provided in the Warrant Agreement, upon the payment of any tax or
other governmental charge imposed in connection with such exchange, for another
Warrant Certificate or Warrant Certificates of like tenor and evidencing a like
number of Warrants, subject to any adjustments made in accordance with the
provisions of the Warrant Agreement.
The Company and the Warrant Agent may deem and treat the registered
holder hereof as the absolute owner of this Warrant Certificate
(notwithstanding any notation of ownership or other writing hereon made by
anyone) for all proposes and neither the Company nor the Warrant Agent shall be
affected by any notice to the contrary. No Warrant Holder, as such, shall have
any rights of a holder of the Common Stock of the Company, either at law or at
equity, and the rights of the Warrant holder, as such, are limited to those
rights expressly provided in the Warrant Agreement and in the Warrant
Certificate.
Under the Warrant Agreement the Exercise Price is subject to
adjustment if the Company shall effect any stock split or stock combination
with respect to the Common Stock. Any such adjustment of the Exercise Price
will also result in an adjustment of the number of shares of Common Stock
purchasable upon exercise of a Warrant or, if the Company should elect, an
adjustment of each outstanding Warrant into a different number of Warrants.
The Company shall not be required to issue fractions of Warrants upon
any such adjustment or to issue fractions of shares upon the exercise of any
Warrants upon any such adjustment, in accordance with the Warrant Agreement.
The Warrant Agreement is subject to amendment upon the approval of
holders of at least two-thirds of the outstanding Warrants as a group, except
that no such approval is required for the reduction of the Exercise Price or
extension of the Expiration Date. No amendment shall accelerate the Expiration
Date or increase the Exercise Price without the approval of all the holders of
all outstanding Warrants. A copy of the Warrant Agreement will be available at
all reasonable times at the office of the Warrant Agent for inspection by any
Warrant Holder. As a condition of such inspection, the Warrant Agent may
require any Warrant Holder to submit the Warrant Holder's Warrant Certificate
for inspection.
IMPORTANT: The Warrants represented by this Certificate may not be exercised by
a Warrant Holder unless at the time of exercise the underlying shares of Common
Stock are qualified for sale by registration or otherwise in the state where
the Warrant Holder resides or unless the issuance of the shares of Common Stock
would be exempt under the applicable state securities laws. Further, a
registration statement under the Securities Act of 1933, as amended, covering
the issuance of shares of Common Stock upon the exercise of this Warrant must
be in effect and current at the time of exercise unless the issuance of shares
of Common Stock upon any exercise is exempt from the registration requirements
of the Securities Act of 1933. Unless such registration statement is in effect
and current at the time of exercise, or unless such an exemption is available
the Company may decline to permit the exercise of this Warrant.
-4-
25
TRANSFER FEE $_____ PER CERTIFICATE
WESTERN COUNTRY CLUBS, INC.
The following abbreviations, when used in the inscription on the face of
this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT -
TEN ENT - as tenants by the entireties Custodian
JT TEN - as joint tenants with right ---------------
of survivorship and not as (Cust) (Minor)
tenants in common under Uniform Gifts
to Minors Act _______
(State)
Additional abbreviations may also be used though not in the above list.
FORM OF ASSIGNMENT
(To Be Executed by the Registered Holder if the Registered Holder
Desires to Assign Series A Warrants Evidenced by the
Within Warrant Certificate)
FOR VALUE RECEIVED __________________hereby sells, assigns and transfers
unto ________________ Series A Warrants, evidenced by the within Warrant
Certificate, and does hereby irrevocably constitute and appoint
____________________Attorney to transfer the said Warrants evidenced by the
within Warrant Certificate on the books of the Company, with full power of
substitution.
Dated:
------------------------ -----------------------------
Signature
NOTICE: The above signature must correspond with the name as written
upon the face of the within Warrant Certificate in every particular,
without alteration or enlargement or any change whatsoever.
Signature Guaranteed:
---------------------------------
-5-
26
FORM OF ELECTION TO PURCHASE
(To be Executed by the Holder if the Registered Holder Desires to Exercise
Warrants Evidenced by the Within Warrant Certificate)
To Western Country Clubs, Inc.:
The undersigned hereby irrevocably elects to exercise ______ Series A
Warrants, evidenced by the within Warrant Certificate for, and to purchase
thereunder, ______ full shares of Common Stock issuable upon exercise of said
Warrants and delivery of $______ and any applicable taxes.
The undersigned requests that certificates for such shares be issued
in the name of:
PLEASE INSERT SOCIAL SECURITY OR
TAX IDENTIFICATION NUMBER
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(Please print name and address)
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If said number of Series A Warrants shall not be all the Warrants
evidenced by the within Warrant Certificate, the undersigned requests that a
new Warrant Certificate evidencing the Warrants not so exercised be issued in
the name of and delivered to:
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(Please print name and address)
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Dated: Signature:
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NOTICE: The above signature must correspond with the name as written upon the
face of the within Warrant Certificate in every particular, without
alteration or enlargement or any change whatsoever, or if signed by
any other person the Form of Assignment hereon must be duly executed
and if the certificate representing the shares or any Warrant
Certificate representing Warrants not exercised is to be registered
in a name other than that in which the within Warrant Certificate is
registered, the signature of the holder hereof must be guaranteed.
Signature Guaranteed:
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THE SIGNATURE(S) MUST BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION
(BANKS, STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH
MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM, PURSUANT TO
S.E.C. RULE 17Ad-15.
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