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EXHIBIT 4(a)
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 10, 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 10, 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
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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.
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 10, 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
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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
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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 canceled. 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
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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.
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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,
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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
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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
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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
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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
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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
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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 10th day of December, 1996.
SPORT SUPPLY GROUP, INC.
By:
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Name:
Title:
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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:
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By:
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Name:
Title:
Tax Identification
Number:
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Address:
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Signature Guaranteed:
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SPORT SUPPLY GROUP, INC.
Assignment Form
(To be executed by the registered holder to effect assignment of the foregoing
Warrant)
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:
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Name:
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By:
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Name:
Title:
Signature guaranteed:
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