THE OFFER AND SALE OF THE SECURITIES REPRESENTED BY THIS
CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "ACT"), OR UNDER THE SECURITIES LAWS OF ANY
STATE. THESE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND
MAY NOT BE TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION OR OTHER COMPLIANCE UNDER THE ACT AND THE LAWS OF
THE APPLICABLE STATE OR A "NO ACTION" OR INTERPRETIVE LETTER FROM
THE SECURITIES AND EXCHANGE COMMISSION AND ITS COUNSEL, TO THE
EFFECT THAT THE SALE OR TRANSFER IS EXEMPT FROM REGISTRATION
UNDER THE ACT AND SUCH STATE STATUTES.
WARRANT AGREEMENT
For the Purchase of Common Stock, $0.01 Par Value Per Share,
of SPORT SUPPLY GROUP, INC.
(Incorporated Under the Laws of the State of Delaware)
Void After 5:00 P.M., Dallas, Texas,
time on December , 2001
No. 001 Warrant to Purchase
1,000,000 Shares
THIS IS TO CERTIFY, that, for value received, Xxxxxxx Radio Corp., or
registered assigns (the "Holder"), is entitled, subject to the terms and
conditions hereinafter set forth, on the date hereof and at any time prior
to 5:00 P.M., Dallas, Texas, time, on December , 2001, but not
thereafter, to purchase the number of shares set forth above (the "Shares")
of Common Stock, $0.01 par value per share ("Common Stock"), of Sport
Supply Group, Inc., a Delaware corporation (the "Corporation"), from the
Corporation upon payment to the Corporation of $7.50 per share (the
"Purchase Price") if and to the extent this Warrant Agreement ("Warrant")
is exercised, in whole or in part, during the period this Warrant remains
in force, subject in all cases to adjustment as provided in Article II
hereof, and to receive a certificate or certificates representing the
Shares so purchased, upon presentation and surrender to the Corporation of
this Warrant, with the form of subscription attached hereto duly executed,
and accompanied by payment of the Purchase Price of each Share purchased as
provided herein.
336301-5
ARTICLE 1 - TERMS OF THE WARRANT
SECTION 1.1 Subject to the provisions of Section 3.1 hereof, this
Warrant may be exercised at any time and from time to time after 9:00 A.M.,
Dallas, Texas, time, on the date hereof (the "Exercise Commencement Date"),
but no later than 5:00 P.M., Dallas, Texas, time, December , 2001 (the
"Expiration Time"). If this Warrant is not exercised on or before the
Expiration Time it shall become void, and all rights hereunder shall
thereupon cease.
SECTION 1.2
(a) The Holder may exercise this Warrant, in whole or in part,
upon surrender of this Warrant with the form of subscription attached
hereto duly executed, to the Corporation at its corporate office in Dallas,
Texas, together with the full Purchase Price for each Share to be purchased
in lawful money of the United States, or by wire transfer, check, bank
draft, or postal or express money order payable in United States dollars to
the order of the Corporation, and upon compliance with and subject to the
conditions set forth herein.
(b) Upon receipt of this Warrant with the form of subscription
duly executed and accompanied by payment of the aggregate Purchase Price
for the Shares for which this Warrant is then being exercised, the
Corporation shall cause to be issued certificates for the total number of
whole Shares as to which this Warrant is being exercised in such
denominations as are required for delivery to the Holder, and the
Corporation shall thereupon deliver such certificates to the Holder or its
nominee.
(c) In case the Holder shall exercise this Warrant with respect
to less than all of the Shares that may be purchased under this Warrant,
the Corporation shall execute a new Warrant for the balance of the Shares
that may be purchased upon exercise of this Warrant and deliver such new
Warrant to the Holder.
(d) The Corporation covenants and agrees it will pay when due
and payable any and all taxes (other than any income taxes) that may be
payable in respect of the issue of this Warrant, or the issue of any Shares
upon the exercise of this Warrant. The Corporation shall not, however, be
required to pay any such tax that may be payable in respect of any transfer
involved in the issuance or delivery of this Warrant or of the Shares in a
name other than that of the Holder at the time of surrender, and until the
payment of such tax the Corporation shall not be required to issue such
Shares.
SECTION 1.3 This Warrant may be split-up, combined, or exchanged for
another Warrant or Warrants of like tenor to purchase a like aggregate
number of Shares. If the Holder desires to split- up, combine, or exchange
this Warrant, it shall make such request in writing delivered to the
Corporation at its corporate office and shall surrender this Warrant and
any other Warrants to be so split- up, combined, or exchanged at such
office. Upon any such surrender for a split-up, combination, or exchange,
the Corporation shall execute and deliver to the person entitled thereto a
Warrant or Warrants, as the case may be, as so requested. The Corporation
shall not be required to effect any split-up, combination, or exchange that
will result in the issuance of a Warrant entitling the Holder to purchase
upon exercise a fraction of a Share.
SECTION 1.4 Prior to due presentment for registration or transfer of
this Warrant, the Corporation may deem and treat the Holder, as registered
on the books of the Corporation maintained for that purpose, as the
absolute owner of this Warrant (notwithstanding any endorsement or notation
of ownership or other writing hereon) for the purpose of any exercise
hereof and for all other purposes and the Corporation shall not be affected
by any notice to the contrary.
SECTION 1.5 Any assignment permitted hereunder shall be made by
surrender of this Warrant to the Corporation at its principal office with
the form of assignment attached hereto duly executed and funds sufficient
to pay any transfer tax. In such event, the Corporation shall, without
charge, execute, and deliver a new Warrant in the name of the assignee
named in such instrument of assignment and this Warrant shall promptly be
cancelled. This Warrant may be divided or combined with other Warrants
that carry the same rights upon presentation thereof at the corporate
office of the Corporation together with a written notice signed by the
Holder, specifying the names and denominations in which such new Warrants
are to be issued.
SECTION 1.6 Nothing contained in this Warrant shall be construed as
conferring upon the Holder the right to vote or to consent or to receive
notice as a stockholder in respect of any meetings of stockholders for the
election of directors or any other matter, or as having any rights
whatsoever as a stockholder of the Corporation. If, however, at any time
prior to the expiration of this Warrant and prior to its exercise, any of
the following shall occur:
(a) the Corporation shall declare any dividend payable in stock
to the holders of its Common Stock or make any other distribution in
property other than cash to the holders of its Common Stock; or
(b) the Corporation shall offer to the holders of its Common
Stock rights to subscribe for or purchase any shares of any class of
stock or any other rights or options or securities exchangeable for or
convertible into shares of any class of stock; or
(c) the Corporation shall effect any reclassification of its
Common Stock (other than a reclassification involving merely the
subdivision or combination of outstanding shares of Common Stock) or
any capital reorganization, or any consolidation or merger (other than
a merger in which no distribution of securities or other property is
made to holders of Common Stock), or any sale, transfer, or other
disposition of its property, assets, and business substantially as an
entirety, or the liquidation, dissolution, or winding up of the
Corporation;
then, in each such case, the Corporation shall cause notice of such
proposed action to be mailed to the Holder. Such notice shall specify (i)
the date on which the books of the Corporation shall close, or a record be
taken, for determining holders of Common Stock entitled to receive such
stock dividend or other distribution or such rights or options, or the date
on which such reclassification, reorganization, consolidation, merger,
sale, transfer, other disposition, liquidation, dissolution, winding up,
shall take place or commence, as the case may be, (ii) the date as of which
it is expected that holders of record of Common Stock shall be entitled to
receive securities or other property deliverable upon such action, if any
such date has been fixed (on which date in the event of a voluntary or
involuntary liquidation, dissolution, or winding up of the Corporation, the
right to exercise this Warrant shall terminate), and (iii) 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 Purchase Price and the kind and
amount of the Common Stock and other securities and property deliverable
upon exercise of this Warrant. Such notice shall be mailed in the case of
any action covered by Subsection 1.6(a) and 1.6(b) above, at least ten (10)
days prior to the record date of determining holders of the Common Stock
for purposes of receiving such payment or offer, and in the case of any
action covered by Subsection 1.6(c), at least ten (10) days prior to the
earlier of the date upon which such action is to take place or any record
date to determine holders of Common Stock entitled to receive such
securities or other property.
Without limiting the obligation of the Corporation to provide notice
to the Holder of actions hereunder, it is agreed that failure of the
Corporation to give notice shall not invalidate such action of the
Corporation.
SECTION 1.7 If this Warrant is lost, stolen, mutilated, or destroyed,
the Corporation shall, on such reasonable terms as to indemnity or
otherwise as it may impose (which shall, in the case of a mutilated
Warrant, include the surrender thereof), issue a new Warrant of like
denomination and tenor as, and in substitution for, this Warrant, which
shall thereupon become void. Any such new Warrant shall constitute an
independent contractual obligation of the Corporation, whether or not the
Warrant so lost, stolen, destroyed, or mutilated shall be at any time
enforceable by anyone.
SECTION 1.8
(a) The Corporation covenants and agrees that at all times it
shall reserve and keep available for the exercise of this Warrant such
number of authorized Shares as are sufficient to permit the exercise in
full of this Warrant.
(b) Prior to the issuance of any Shares upon exercise of this
Warrant, the Corporation shall secure the listing of such Shares upon any
securities exchange upon which the shares of the Corporation's Common Stock
may at the time be listed for trading.
(c) The Corporation covenants that all Shares when issued upon
the exercise of this Warrant in accordance with the terms hereof will be
validly issued, fully paid, nonassessable, and free of preemptive rights.
ARTICLE 2 -- ADJUSTMENT OF PURCHASE PRICE
AND NUMBER OF SHARES PURCHASABLE UPON EXERCISE
SECTION 2.1 Subject to the provisions of this Article II, the
Purchase Price in effect from time to time shall be subject to adjustment
as follows:
(a) In case the Corporation shall (i) declare a dividend or make
a distribution on the outstanding shares of its Common Stock in shares
of its Common Stock, (ii) subdivide the outstanding shares of its
Common Stock into a greater number of shares, (iii) combine the
outstanding shares of its Common Stock into a smaller number of
shares, (iv) issue any shares of its Common Stock by reclassification
of the Common Stock, then in each case the Purchase Price in effect
immediately after the record date for such dividend or distribution or
the effective date of such subdivision, combination or
reclassification shall be adjusted so that it shall equal the price
determined by multiplying the Purchase Price in effect immediately
prior thereto by a fraction, of which the numerator shall be the
number of shares of Common Stock outstanding immediately prior to such
dividend, distribution, subdivision, combination, or reclassification,
and of which the denominator shall be the number of shares of Common
Stock outstanding immediately after such dividend, distribution,
subdivision, combination, or reclassification. Any shares of Common
Stock of the Corporation issuable in payment of a dividend shall be
deemed to have been issued immediately prior to the record date for
such dividend.
(b) All calculations under this Section 2. 1 shall be made to
the nearest whole cent.
SECTION 2.2 No adjustment in the Purchase Price in accordance with
the provisions of Subsection 2.1(a) hereof need be made if such adjustment
would amount to a change of less than 1% in such Purchase Price; provided
that the amount by which any adjustment is not made by reason of the
provisions of this Section 2.2 shall be carried forward and taken into
account at the time of any subsequent adjustment in the Purchase Price.
SECTION 2.3 Upon each adjustment of the Purchase Price pursuant to
Subsection 2.1(a) hereof, each Warrant shall thereupon evidence the right
to purchase that number of shares of Common Stock (calculated to the
nearest hundredth of a share) obtained by multiplying the number of shares
of Common Stock purchasable immediately prior to such adjustment upon
exercise of the Warrant by the Purchase Price in effect immediately prior
to such adjustment and dividing the product so obtained by the Purchase
Price in effect immediately after such adjustment.
SECTION 2.4 In case of any capital reorganization, other than in the
cases referred to in Section 2.1 hereof, or the consolidation or merger of
the Corporation with or into another corporation (other than a merger or
consolidation in which the Corporation is the continuing corporation and
which does not result in any reclassification of the outstanding shares of
Common Stock or the conversion of such outstanding shares of Common Stock
into shares of other stock or other securities or cash or other property),
or the sale of the property of the Corporation as an entirety or
substantially as an entirety, or the conversion, however effected, of the
Corporation into another form of entity (collectively such actions being
hereinafter referred to as "Reorganizations"), there shall thereafter be
deliverable upon exercise of any Warrant (in lieu of the number of shares
of Common Stock theretofore deliverable) the number of shares of stock or
other securities or cash or other property to which a holder of the number
of shares of Common Stock that would otherwise have been deliverable upon
the exercise of such Warrant would have been entitled to have received upon
such Reorganization if such Warrant had been exercised in full immediately
prior to such Reorganization. In case of any Reorganization, appropriate
adjustment, as determined in good faith by the Board of Directors of the
Corporation, shall be made in the application of the provisions herein set
forth with respect to the rights and interests of Warrant holders so that
the provisions set forth herein shall thereafter be applicable, as nearly
as possible, in relation to any shares or other securities or cash or other
property thereafter deliverable upon exercise of Warrants. The Corporation
shall not effect any such Reorganization, unless upon or prior to the
consummation thereof the successor entity, or if the Corporation shall be
the surviving entity in any such Reorganization and is not the issuer of
the shares of stock or other securities or property to be delivered to
holders of shares of the Common Stock outstanding at the effective time
thereof, then such issuer, shall assume by written instrument the
obligation to deliver to the Holder such shares of stock, securities, cash,
or other property as the Holder shall be entitled to purchase in accordance
with the foregoing provisions. In the event of a sale or conveyance or
other transfer of all or substantially all of the assets of the Corporation
as a part of a plan for liquidation of the Corporation, all rights to
exercise any Warrant shall terminate on the date such sale or conveyance or
other transfer is to be consummated.
SECTION 2.5 The Corporation may select a firm of independent
certified public accountants, which selection may be changed from time to
time, to verify the computations made in accordance with this Article II.
The certificate, report or other written statement of any such firm shall
be conclusive evidence of the correctness of any computation made under
this Article II.
SECTION 2.6 Irrespective of any adjustments pursuant to this Article
II, Warrants theretofore or thereafter issued need not be amended or
replaced, but certificates thereafter issued shall bear an appropriate
legend or other notice of any adjustments.
SECTION 2.7 The Corporation shall not be required upon the exercise
of any Warrant to issue fractional shares of Common Stock that may result
from adjustments in accordance with this Article II to the Purchase Price
or number of shares of Common Stock purchasable under each Warrant. If
more than one Warrant is exercised at one time by the same Holder, the
number of full shares of Common Stock that shall be deliverable shall be
computed based on the number of shares deliverable in exchange for the
aggregate number of Warrants exercised. With respect to any final fraction
of a share called for upon the exercise of any Warrant or Warrants, the
Corporation shall pay a cash adjustment in respect of such final fraction
in an amount equal to the same fraction of the market value of a share of
Common Stock on the business day next preceding the date of such exercise.
The Holder, by his acceptance of the Warrant, shall expressly waive any
right to receive any fractional share of Common Stock upon exercise of the
Warrants. For the purposes of this Section 2.7, the market price per share
of Common Stock at any date shall mean the last reported sale price regular
way or, in case no such reported sale takes place on such date, the average
of the last reported bid and asked prices regular way, in either case on
the principal national securities exchange on which the Common Stock is
admitted to trading or listed if that is the principal market for the
Common Stock or if not listed or admitted to trading on any national
securities exchange or if such national securities exchange is not the
principal market for the Common Stock, the closing bid price (or closing
sales price, if reported) as reported by the NASDAQ or its successor, if
any. If the price of the Common Stock is not so reported, then such market
price shall mean the last known price paid per share by a purchaser of such
stock in an arms'-length transaction. All calculations under this Section
2.7 shall be made to the nearest 1/100th of a share.
SECTION 2.8 In no event shall the Exercise Price be adjusted below
the par value per share of the Common Stock.
ARTICLE 3
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED
SECTION 3.1 The Holder of this Warrant, by acceptance hereof, both
with respect to this Warrant and the Shares to be issuable upon exercise
of this Warrant, represents and warrants:
(a) The Warrants and the Shares are being acquired for the
Holder's own account to be held for investment purposes only and not
with a view to, or for, resale in connection with any distribution of
such Warrant or Shares or any interest therein without registration or
other compliance under the Act, and the Holder hereof has no direct or
indirect participation in any such undertaking or in underwriting such
an undertaking.
(b) The Holder hereof has been advised and understands that the
Warrant and the Shares have not been registered under the Act and the
Warrant and/or the Shares must be held and may not be sold,
transferred, or otherwise disposed of for value unless they are
subsequently registered under the Act or an exemption from such
registration is available; except as contemplated herein, the
Corporation is under no obligation to register the offer and sale of
the Warrant and/or the Shares under the Act; in the absence of such
registration, the Holder may be unable to sell the Warrant or Shares;
the Corporation's registrar and transfer agent will maintain stop
transfer orders against registration of transfer of the Warrant and
the Shares; and the certificates to be issued for any Shares will bear
on their face a legend in substantially the following form:
THE OFFER AND SALE OF THE SECURITIES REPRESENTED BY THIS
CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "ACT"), OR UNDER THE SECURITIES LAWS OF ANY STATE.
THESE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE
TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION OR OTHER
COMPLIANCE UNDER THE ACT AND THE LAWS OF THE APPLICABLE STATE OR A "NO
ACTION" OR INTERPRETIVE LETTER FROM THE SECURITIES AND EXCHANGE
COMMISSION TO THE EFFECT THAT THE SALE OR TRANSFER IS EXEMPT FROM
REGISTRATION UNDER THE ACT AND SUCH STATE STATUTES.
(c) The Corporation may refuse to issue the Shares to a person
other than the Holder upon exercise of the Warrant or transfer the
Warrant and/or the Shares unless the Holder thereof provides
reasonable assurances to the Corporation or a "no action" or
interpretive response from the Securities and Exchange Commission and
any applicable state securities commission to the effect that the
transfer is proper; further, unless such assurances indicate or the
letter states that the Warrants and/or Shares are free of any
restrictions under the Act and any applicable state securities laws,
the Corporation may refuse to transfer the Warrant and/or the Shares
to any transferee who does not furnish in writing to the Corporation
the same representations and agrees to the same conditions with
respect to such Warrant and Shares as are set forth herein. The
Corporation may also refuse to transfer the Warrant or Shares if any
circumstances are present reasonably indicating that the transferee's
representations are not accurate.
SECTION 3.2 Except as provided in that certain Registration Rights
Agreement dated as of even date herewith among the Corporation, Xxxxxxx
Radio Corp., and Xxxxxxx Radio (Hong Kong) Limited, the Corporation has no
obligation to register the offer and sale of the shares issuable upon
exercise of the Warrant or the Warrants under the Act or any applicable
state law.
SECTION 3.3 The agreements in this Article III shall continue in
effect regardless of the exercise and surrender of this Warrant.
ARTICLE 4 -- OTHER MATTERS
SECTION 4.1 All the covenants and provisions of this Warrant by or
for the benefit of the Corporation shall bind and inure to the benefit of
its successors and assigns hereunder.
SECTION 4.2 Notices or demands pursuant to this Warrant to be given
or made shall be sufficiently given or made if sent by certified or
registered mail, return receipt requested, postage prepaid, and addressed,
as follows:
To the Corporation:
Sport Supply Group, Inc.
0000 Xxxxxxxx Xxxxx
Xxxxxxx Xxxxxx, Xxxxx 00000
Attention: Corporate Secretary
To the Holder:
Xxxxxxx Radio Corp.
Nine Xxxxx Xxxx
Xxxxxxxxxx, Xxx Xxxxxx 00000-0000
Attention: President
or to such other address as the Corporation or the Holder, as the case may
be, shall designate in writing.
IN WITNESS WHEREOF, the undersigned has executed this instrument as of
the day of December, 1996.
SPORT SUPPLY GROUP, INC.
By:
Name:
Title:
336301-5
SPORT SUPPLY GROUP, INC.
Subscription Form
(To be executed by the registered holder to exercise the right to
purchase Common Stock evidenced by the foregoing Warrant)
Sport Supply Group, Inc.
0000 Xxxxxxxx Xxxxx
Xxxxxxx Xxxxxx, Xxxxx 00000
The undersigned hereby irrevocably subscribes for the purchase of
shares of your Common Stock pursuant to and in accordance with the terms
and conditions of this Warrant, and herewith makes payment, covering the
purchase of such shares of Common Stock, certificates for which should be
delivered to the undersigned at the address stated below. If such number
of shares shall not be all of the shares purchasable hereunder, please
deliver a new Warrant of like tenor for the balance of the remaining shares
purchasable hereunder to the undersigned at the address stated below.
The undersigned agrees that: (1) the undersigned will not offer, sell,
transfer, or otherwise dispose of any such shares of Common Stock except in
compliance with the requirements set forth in the legend described in
Section 3.1 of this Warrant; (2) the Corporation may notify the transfer
agent for its Common Stock that the certificates for the Common Stock
acquired by the undersigned pursuant hereto are not to be transferred
unless the transfer agent receives advice from the Corporation that one or
both of the conditions referred to in (1)(a) and (1)(b) above have been
satisfied; and (3) the Corporation may affix the legend set forth in
Section 3.1 of this Warrant to the certificates for shares of Common Stock
hereby subscribed for, if such legend is applicable.
Dated: Name:
By:
Name:
Title:
Tax Identification
Number:_____________________
Address:
Signature Guaranteed:
336301-5
SPORT SUPPLY GROUP, INC.
Assignment Form
(To be executed by the registered holder to effect assignment of the
foregoing Warrant)
[CAPTION]
FOR VALUE RECEIVED hereby sells, assigns and transfers
unto the right to purchase shares of Common Stock,
$0.01 par value per share, of the Corporation purchasable pursuant to the
within Warrant, on the terms and conditions set forth therein, and does
hereby irrevocably constitute and appoint
Attorney, to transfer on the books of the Corporation Warrants representing
such rights, with full power of substitution.
Dated:
Name:
By:
Name:
Title:
Signature guaranteed:
336301-5
